Delticom AG

EANS-News: Delticom AG: Preliminary Q3 Results

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Financial Figures/Balance Sheet


Hanover (euro adhoc) - 18 October 2012 - Delticom (German Securities Code (WKN)
514680, ISIN DE0005146807, stock market symbol DEX), Europe's leading online
tyre dealer, has published preliminary figures for the first nine months of
2012. In a troubled market environment the company recognised revenues of EUR
280.4 million in 9M 12, a minus of 5.8 % year-on-year. Earnings before interest
and taxes (EBIT) amounted to EUR 17.5 million.


Revenues

Following a weak first half year, the European tyre replacement market continued
to lag expectations in the third quarter. After the summer tyre business had
already been disappointing, the winter tyre season started much slower than last
year.

In this challenging environment 9M 12 group revenues declined by 5.8 % to EUR
280.4 million (9M 11: EUR 297.7 million). In the third quarter the company
recognised revenues of EUR 87.2 million (Q3 11: EUR 99.4 million, -12.3 %). Q3
12 revenues in the E-Commerce division were down year-on-year by 5.9 % and
amounted to EUR 83.8 million, resulting in a decrease of 3.7 % to EUR 268.7
million for the nine months. Quarterly revenues in the Wholesale division
decreased by 67.5 % to EUR 3.4 million, resulting in 9M 12 revenues coming down
by 36.7 % to EUR 11.7 million.


Gross margin

The cost of goods sold decreased in the reporting period by 5.4 %, from EUR
218.6 million to EUR 206.9 million. The gross margin for Q3 12 was 25.7 % (Q3
11: 25.8 %). For the nine months the gross margin was 26.2 %, after 26.6 % in
the prior-year period.


Other operating income

Other operating profit decreased by 52.6 % to EUR 2.8 million (9M 11: EUR 5.9
million), thereof gains from exchange rate differences to the order of EUR 1.2
million (9M 11: EUR 4.5 million). FX losses have to be accounted for as line
item in the other operating expenses (9M 12: EUR 3.1 million, 9M 11: EUR 3.9
million). FX gains and losses often accrue differently to different quarters due
to the long duration of the underlying transaction and the corresponding hedge.
For the nine months the balance of FX income and losses totalled EUR -1.9
million (9M 11: EUR 0.7 million). Altogether, the gross profit worsened by 10.2
% year-on-year, from EUR 85.0 million to EUR 76.3 million.


Personnel expenses

In the reporting period on average 143 staff members were employed at Delticom
(9M 11: 111). The reason for the increase was the buildup of qualified staff for
our new warehouse facility which opened last year. Personnel expenses amounted
to EUR 6.3 million (9M 11: EUR 5.2 million). The 9M 12 personnel expenses ratio
stood at 2.3 % (staff expenditures as percentage of revenues, 9M 11: 1.7 %).


Other operating expenses

For the nine months other operating expenses totalled EUR 50.4 million, an
increase of 0.6 % over the prior-year value of EUR 50.2 million.

Among the other operating expenses, transportation costs is the largest line
item. In the reporting period it amounted to EUR 23.7 million (9M 11: EUR 24.2
million). The share of transportation costs against revenues went up from 8.1 %
in 9M 11 to 8.4 % in 9M 12.

Due to the expansion of warehouse capacity, rents and overheads increased by
44.5 %, from EUR 3.1 million to EUR 4.5 million. Stocking costs came in at EUR
2.4 million, 26.1 % lower than prior-year's EUR 3.3 million. This was mainly due
to taking qualified temporary workers on the payroll.

In the reporting period, advertising costs totalled EUR 6.7 million. This
equates to a ratio of marketing expenses to revenues of 2.4 % (9M 11: EUR 5.8
million or 2.0 %). In order to support the sales of winter tyres and according
to plans, Q3 12 marketing spent of 2.7 % of revenues was higher than last year's
1.9 %.


Depreciation

In line with our gradual warehouse capacity expansion and the parallel
investments into warehousing infrastructure, depreciation rose by 40.2 % from
EUR 1.4 million in 2011 to EUR 2.0 million. The low absolute level of
depreciation underlines the low capital intensity of Delticom's business.


Earnings performance

EBIT for the reporting period came down by 37.9 % from EUR 28.2 million to EUR
17.5 million, primarily due to higher fixed costs. The EBIT margin was 6.2 % (9M
11: 9.5 %). Third quarter EBIT saw a decline of 55.0 %, from prior-year's EUR
9.5 million to EUR 4.3 million. The quarterly EBIT margin was 4.9 % (Q3 11: 9.5
%).

Financial income for the nine months amounted to EUR 26.0 thousand (9M 11: EUR
96.3 thousand). On the back of higher funding needs for inventories financial
expenses increased to EUR 190.1 thousand (9M 11: EUR 90.1 thousand), leading to
a financial result of EUR -164.1 thousand (9M 11: EUR 6 thousand).

The expenditure for income taxes was EUR 5.6 million (previous year: EUR 9.2
million). The tax rate was 32.5 % (9M 11: 32.6 %).

In total, consolidated net income for the reporting period totalled EUR 11.7
million, after a prior-year amount of EUR 19.0 million.


Working Capital

Among the current assets, inventories is the biggest line item. They grew from
the beginning of the year by EUR 20.0 million, totalling EUR 126.5 million on
the reporting date (30.09.2011: EUR 122.9 million). In the corresponding
prior-year period the increase in inventory value had amounted to EUR 70.7
million.

In the wake of the inventory build-up, the accounts payable increased from EUR
68.2 million by EUR 44.2 million or 64.7 % to EUR 112.4 million (30.09.2011: EUR
92.5 million). Taken together with accounts receivable of EUR 15.7 million
(30.09.2011: EUR 20.4 million), the net working capital on 30.09.2012 amounted
to EUR 22.9 million (30.09.2011: EUR 42.5 million).


Cash flow and liquidity position

Due to the favourable working capital development, the 9M 12 cash flow from
ordinary business activities (operating cash flow) of EUR 29.7 million was
significantly better than in the comparison period (9M 11: EUR -26.0 million).

The majority of racks, forklifts and packaging machines for the new warehouse
were purchased in 2011. This year's investments into property, plant and
equipment have therefore just been EUR 0.8 million year-to-date (9M 11: EUR 8.0
million).

In the reporting period, Delticom recorded a cash flow from financing activities
amounting to EUR -36.2 million, thereof the payout for the last financial year
of EUR -34.9 million and disbursements due to redemption of loans of EUR -0.9
million. The balance of utilisation and redemption of short-term credit lines
was EUR -0.3 million.

Liquidity (cash and cash equivalents plus liquidity reserve) as of 30.09.2012
totalled EUR 15.0 million (30.09.2011: EUR 11.7 million). The company's net cash
position (liquidity less liabilities from current accounts) amounted to EUR 11.8
million (30.09.2011: EUR 1.8 million).


Outlook

While last year's winter tyre season benefitted from an early start, this year
the winter tyre business has so far been relatively sluggish. Despite good
demand for winter tyres in some European countries, Management does not expect
the company to exceed annual prior-year revenues anymore. Due to the challenging
market environment Delticom scales back its EBIT goal for the current financial
year to 7 % - 8 %.

The full report for the first nine months of 2012 will be published on
08.11.2012 within the "Investor Relations" section of the website www.delti.com
.


Further inquiry note:
Delticom AG Investor Relations
Melanie Gereke
Brühlstraße 11
30169 Hannover
Tel.: +49 (0)511-936 34-8903
Fax:  +49 (0)89-208081147
e-mail: melanie.gereke@delti.com

end of announcement                               euro adhoc 
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company:     Delticom AG
             Brühlstraße 11
             D-30169 Hannover
phone:       +49 (0)511 93634 8903
FAX:         +49 (0)511 336116 55
mail:     info@delti.com
WWW:      http://www.delti.com
sector:      Electronic Commerce
ISIN:        DE0005146807
indexes:     SDAX, CDAX, Classic All Share, Prime All Share
stockmarkets: free trade: Berlin, München, Düsseldorf, Stuttgart, regulated
             dealing/prime standard: Frankfurt 
language:   English
 



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