Delticom AG

EANS-News: Delticom publishes preliminary figures for FY 2012

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Financial Figures/Balance Sheet

Hanover (euro adhoc) - 23 January 2013 - For Delticom (German Securities Code
(WKN) 514680, ISIN DE0005146807, stock market symbol DEX), Europe's leading
online tyre dealer, 2012 was a challenging year. In a difficult market
environment the company generated revenues of EUR 456.4 million, according to
today's preliminary figures (2011: EUR 480.0 million). EBIT amounted to EUR 32.5
million (2011: EUR 52.9 million). Earnings per share were EUR 1.86 (2011: EUR
3.04).

Q4 12: Successful quarter despite poor market conditions

During the first nine months of 2012 the European tyre trade showed growing
signs of a cyclical downturn. Weak tyre demand in the final quarter confirmed
the trend. As a result, industry experts indicate that winter tyre sales
disappointed in 2012, dropping below the already weak 2011 levels.

This did not leave Delticom's Q4 12 business with commercial customers
unaffected. Both B2B sales in the E-Commerce division as well as wholesale
revenues shrunk double-digit. Total quarterly revenues amounted to EUR 175.9
million (Q4 11: EUR 182.3 million, -3.5 %). Due to robust sales to
end-customers, divisional E-Commerce revenues for Q4 12 stood at EUR 172.7
million, only slightly below last year (Q4 11: EUR 176.5 million, -2.1 %).

In an environment characterised by mild winter conditions and increasing
competitive pressure, Delticom was yet again able to grow its business with
private end-customers (B2C). More than 80 % of the revenues in the E-Commerce
division came from B2C sales. The company was therefore able to at least
partially insulate itself from the overall weak market conditions.

In order to increase volume Delticom had to offer more attractive prices for its
customers. According to the German tyre trade association (BRV), selling prices
for winter tyres had to be reduced by a few percentage and thus forfeiting
profits, as weak demand met fully stocked warehouses. Consequently, Delticom's
Q4 12 gross margin (trade margin ex other operating expenses) of 25.0 % came in
significantly lower than in the prior-year period (Q4 11: 28.8 %). This was
compounded by the planned increase in fixed costs, resulting in a Q4 12 EBIT
margin of 8.5 % (Q4 11: 13.6 %).


Fiscal year 2012

Revenues

Across all divisions, Delticom was able to generate revenues of EUR 456.4
million, 4.9 % less than prior-year's EUR 480.0 million. Due to the difficult
market conditions, sales in the more cyclical business segments decreased
significantly. Wholesale revenues for 2012 collapsed by 38.6 % to EUR 15.0
million, after prior-year revenues of EUR 24.4 million.

Also in the E-Commerce segment with commercial customers (B2B) revenues came
under significant pressure. Thanks to the stable sales to our private end
customers (B2C) the total sales in the E-Commerce segment only came down by 3.1
% from EUR 455.6 million in 2011 to EUR 441.4 million. The divisional share of
group revenues amounted to 96.7 %, compared to 94.9 % in the previous year.

First estimates of the BRV point to a 10,1 % decline in the German tyre trade
for 2012. Against this trend, Delticom was able to increase sales in its core
B2C E-Commerce business, helping the company to outperform the general tyre
market significantly.


Gross margin

The cost of goods sold decreased in the reporting period by 2.7 %, from EUR
348.4 million in 2011 to EUR 338.9 million. Due to the sluggish demand for
summer and winter tyres in Europe, the full-year gross margin came down from
27.4 % to 25.7 %.


Other operating income

Other operating profit decreased by -54.9 % to EUR 3.8 million (2011: EUR 8.3
million). This was mainly due to lower exchange rate gains in the order of EUR
1.6 million (2011: EUR 6.3 million). FX losses have to be accounted for as line
item in the other operating expenses. For the period under review, the balance
of FX income and losses totalled EUR -2.2 million or -0.5 % of revenues. In 2011
the balance had been EUR 0.5 million (0.1 % of revenues). Altogether, the gross
profit shrunk in the reporting period by 13.4 % year-on-year, from EUR 139.9
million to EUR 121.2 million.


Personnel expenses

In the reporting period on average 144 staff members were employed at Delticom
(2011: 116). The reason for this increase was the buildup of qualified staff for
our warehouse facility opened in 2011. Personnel expenses amounted to EUR 8.8
million (previous year: EUR 7.2 million). This equates to a personnel expenses
ratio (staff expenditures as percentage of revenues) of 1.9 % (2011: 1.5 %).


Other operating expenses

Overall the other operating expenses for the past financial year totalled EUR
77.2 million, a decrease of 0.6 % over the prior-year value of EUR 77.7 million.

Among the other operating expenses, transportation costs is the largest line
item. It registered a slight step-up by 2.0 %, from EUR 37.4 million to EUR 38.2
million. The share of transportation costs against revenues went up from 7.8 %
in 2011 to 8.4 % in 2012.

Due to the expansion of warehouse capacity, rents and overheads increased by
25.8 %, from EUR 4.9 million to EUR 6.2 million. Stocking costs came in at EUR
3.6 million, 30.0 % lower than prior-year's EUR 5.1 million. This was mainly due
to taking qualified temporary workers on the payroll.

According to marketing plans, Delticom spent in Q4 12 with 2.6 % of revenues
slightly more on customer acquisition than in the previous year (Q4 11: 2.3 %).
For the reporting period as a whole, advertising costs totalled EUR 11.3
million. This equates to a ratio of marketing expenses to revenues of 2.5 %
(2011: EUR 10.0 million or 2.1 %).


Depreciation

In line with our gradual warehouse capacity expansion and the parallel
investments into warehousing infrastructure, depreciation rose by 28.0 % from
EUR 2.1 million in 2011 to EUR 2.7 million. The low absolute level of
depreciation underlines the low capital intensity of Delticom's business.


Earnings performance

For 2012 Delticom was able to achieve an EBIT of EUR 32.5 million. The drop of
38.6 % from previous year's EUR 52.9 million was primarily due to a lower gross
margin, higher fixed costs and negative FX effects. The EBIT margin was 7.1 %
(2011: 11.0 %).

Financial income for the reporting period amounted to EUR 45 thousand (2011: EUR
128 thousand). On the back of higher funding needs for inventories financial
expenses increased to EUR 182 thousand (2011: EUR 127 thousand), leading to a
financial result of EUR -137 thousand (2011: EUR 0 thousand).

The expenditure for income taxes was EUR 10.3 million (previous year: EUR 16.9
million). The tax rate was 31.8 % (2011: 32.0 %). Consolidated net income for
2012 decreased from EUR 36.0 million to EUR 22.1 million. This corresponds to
earnings per share (EPS) of EUR 1.86 (undiluted, 2011: EUR 3.04).


Working capital

Among the current assets, inventories is the biggest line item. Stock value at
year end amounted to EUR 74.1 million or 47.4 % of assets (31.12.2011: EUR 106.5
million, 64.0 %). Over the course of the year inventories have therefore been
reduced down by EUR 32.4 million. In the corresponding prior-year period the
inventory value had increased by EUR 54.3 million. The company is well
positioned for the upcoming summer business.

Accounts payable increased from EUR 68.2 million by EUR 6.6 million or 9.6 % to
EUR 74.8 million (31.12.2011: EUR 68.2 million). Taken together with accounts
receivable of EUR 9.6 million (31.12.2011: EUR 10.1 million), the net working
capital on 31.12.2012 amounted to EUR 3.2 million (31.12.2011: EUR 44.4
million).


Cash flow and liquidity position

Due to the favourable working capital development, the 2012 cash flow from
ordinary business activities (operating cash flow) of EUR 62.2 million was
significantly better than in the comparison period (2011: EUR -9.6 million).

The majority of racks, forklifts and packaging machines for the new warehouse
were purchased in 2011. Last year's investments into property, plant and
equipment have therefore been only EUR 1.1 million (2011: EUR 8.5 million).

In the reporting period, Delticom recorded a cash flow from financing activities
amounting to EUR -37.1 million, thereof the dividend 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 -1.2 million.

Liquidity (cash and cash equivalents plus liquidity reserve) as of 31.12.2012
totalled EUR 46.2 million (31.12.2011: EUR 22.2 million). The company's net cash
position (liquidity less liabilities from current accounts) amounted to EUR 43.9
million (31.12.2011: EUR 17.8 million).


Outlook

Consensus among economists sees the economic headwinds in the Eurozone to
persist in 2013. Increasing unemployment figures as well as the uncertainty
stemming from the European debt crises should continue to burden European
consumer sentiment.

Experts from the tyre industry are in disagreement as to whether the European
replacement tyre dealers are able to show growth in the coming months, and if
yes to which extent. At this point in time, Delticom does not have enough
visibility to supply a reliable quantitative guidance for the sales and earnings
development for the full year 2013.

Independent of those short-term developments, the share of online sales in the
tyre market continues to be comparatively low. More and more drivers are turning
to the Internet in search of lower-priced alternatives. Delticom as the leading
online tyre dealer will be able to capitalise on this trend.

The full report for the fiscal year 2012 will be published on 21 March 2013
within the "Investor Relations" section of the website www.delti.com.


Company profile:

Delticom, Europe's leading online tyre retailer, was founded in Hanover in 1999.
With more than 100 online shops in 42 countries, the company offers its private
and business customers an unequalled assortment of excellently priced car tyres,
motorcycle tyres, bicycle tyres, truck tyres, bus tyres, special tyres, rims,
complete wheels (pre-mounted tyres on rims), selected replacement car parts and
accessories, motor oil and batteries. The independent website reifentest.com
contains impartial information about tyre tests and helps the customers choose
from more than 100 tyre brands and more than 25,000 tyre models. Delticom
delivers either directly to the customer's home address, or to one of more than
34,000 service partners - affiliated garages which take delivery of tyres and
then install these on the customer's vehicle. Delticom's Wholesale division also
sells tyres to wholesalers domestically and abroad.

On the Internet at: www.delti.com

Selected online shops: www.reifendirekt.de, www.123pneus.fr, www.mytyres.co.uk,
www.reifendirekt.ch


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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