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Financial Figures/Balance Sheet
Hanover (euro adhoc) - 19 July 2012 - Delticom (German Securities Code (WKN)
514680, ISIN DE0005146807, stock market symbol DEX), Europe's leading online
tyre dealer, has published its preliminary figures for the first half year.
Against a backdrop of weak summer tyre markets the company recognised revenues
of EUR 193.3 million in H1 12, a minus of 2.5 % year-on-year. Earnings before
interest and taxes (EBIT) amounted to EUR 13.2 million.
After the season had already experienced a difficult start due to poor weather
conditions, second quarter summer tyre sales fell yet again significantly short
of tyre trade expectations. The reason for this market weakness is not just the
poor consumer sentiment in the crisis-ridden European countries. Even in
Germany, sales have been coming down significantly year-on-year. According to a
first draft evaluation of a poll among German tyre dealers conducted by the BRV
(Bundesverband Reifenhandel und Vulkaniseur-Handwerk e. V.), the first five
months of the year saw a decline of revenues for summer tyres of approximately
15 %.
Revenues
In this challenging environment H1-12 group revenues declined by 2.5 % to EUR
193.3 million (H1 11: EUR 198.3 million). In the second quarter the company
recognised revenues of EUR 107.8 million (Q2 11: EUR 112.9 million, -4.6%). Q2
12 revenues in the E-Commerce division were down year-on-year by 5.1 % and
amounted to EUR 104.0 million (H1 12: -2.7% to EUR 184.9 million). Quarterly
revenues in the Wholesale division grew by 13.5 % to EUR 3.8 million, after
prior-year revenues of EUR 3.4 million (H1 12: EUR 8.4 million, +2.1 %).
Gross margin
The cost of goods sold decreased in the reporting period by 1.9 %, from EUR
144.9 million in Q2 11 to EUR 142.2 million. The gross margin for Q2 12 was 26.9
% (Q2 11: 27.7 %). For the first half year the gross margin was 26.4 %, after
26.9 % in the prior-year period.
Part of this decline is attributable to the price pressure arising from weak
end-customer demand. Still, for Delticom the main driver for the gross margin
trend over the past months has been the development of own summer tyre stocks
which have been cut back significantly, in line with deteriorating selling
conditions. As a result, the share of spot drop-ship business with third parties
increased, which usually carries a lower gross margin then selling from own
stocks. Currently Delticom holds fewer summer tyres on stock than in the
preceding years.
Other operating income
Other operating profit decreased by 33.7 % to EUR 2.1 million (H1 11: EUR 3.1
million), thereof gains from exchange rate differences to the order of EUR 1.0
million (H1 11: EUR 2.3 million). FX losses have to be accounted for as line
item in the other operating expenses (H1 12: EUR 2.5 million, H1 11: EUR 2.7
million). The balance of FX income and losses totalled EUR -1.5 million (H1 11:
EUR -0.4 million). Altogether, the gross profit worsened by -5.9 % year-on-year,
from EUR 56.5 million to EUR 53.2 million.
Personnel expenses
In the reporting period on average 142 staff members were employed at Delticom
(H1 11: 108). The reason for the increase was the buildup of qualified staff for
our new warehouse facility which was opened in Q2 last year. Personnel expenses
amounted to EUR 4.4 million (H1 11: EUR 3.5 million). The H1 12 personnel
expenses ratio stood at 2.3 % (staff expenditures as percentage of revenues, H1
11: 1.8 %).
Other operating expenses
In H1 12 other operating expenses totalled EUR 34.2 million, an increase of 2.2
% over the prior-year value of EUR 33.5 million.
Among the other operating expenses, transportation costs is the largest line
item. For H1 12 it amounted to EUR 16.2 million (H1 11: EUR 16.2 million). The
share of transportation costs against revenues went up from 8.2 % in Q2 11 to
8.4 % in Q2 12.
Due to the expansion of warehouse capacity, rents and overheads increased by
63.5 %, from EUR 1.9 million to EUR 3.0 million. Stocking costs came in at EUR
1.6 million, 23.9 % lower than prior-year's EUR 2.2 million. This was mainly due
to taking qualified part-time and temporary workers on the payroll.
In the reporting period, advertising costs totalled EUR 4.3 million. This
equates to a ratio of marketing expenses to revenues of 2.2 % (H1 11: EUR 3.9
million or 2.0 %). In order to support the sales of summer tyres in the peak
season, Q2 12 marketing spent of 2.1 % of revenues was higher than last year's
1.7 %.
Depreciation
In line with our gradual warehouse capacity expansion and the parallel
investments into warehousing infrastructure, depreciation rose by 63.7 % from
EUR 0.8 million in 2011 to EUR 1.3 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 29.2 % from EUR 18.7 million to EUR
13.2 million, primarily due to higher fixed costs. This equates to an EBIT
margin of 6.9 % (H1 11: 9.4 %). Second quarter EBIT saw a decline of 23.1 %,
from prior-year's EUR 12.8 million to EUR 9.8 million. The quarterly EBIT margin
was 9.1 % (Q2 11: 11.3 %).
Financial income for the first half year amounted to EUR 22.8 thousand (H1 11:
EUR 92.0 thousand). On the back of higher funding needs for inventories
financial expenses increased to EUR 109.0 thousand (H1 11: EUR 13.1 thousand),
leading to a financial result of EUR -86.2 thousand (H1 11: EUR 79 thousand).
The expenditure for income taxes was EUR 4.4 million (previous year: EUR 6.0
million). The tax rate was 33.2 % (H1 11: 32.1 %).
In total, consolidated net income for the reporting period totalled EUR 8.8
million, after a prior-year amount of EUR 12.7 million.
Working Capital
Among the current assets, inventories is the biggest line item. They grew from
the beginning of the year by EUR 28.6 million, totalling EUR 135.1 million on
the reporting date (30.06.2011: EUR 103.3 million). In the corresponding
prior-year period the increase in inventory value had amounted to EUR 51.1
million.
In the wake of the inventory build-up, the accounts payable increased from EUR
68.2 million by EUR 28.1 million or 41.2 % to EUR 96.4 million (30.06.2011: EUR
65.9 million). Taken together with accounts receivable of EUR 10.5 million
(30.06.2011: EUR 11.9 million), the net working capital on 30.06.2012 amounted
to EUR 45.4 million (30.06.2011: EUR 44.5 million).
Cash flow and liquidity position
Due to the favourable working capital development, the H1 12 cash flow from
ordinary business activities (operating cashflow) of EUR -0.5 million was
significantly better than in the comparison period (H1 11: EUR -30.2 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 0.4 million year-to-date (H1 11: EUR 4.5
million).
The dividend payment for fiscal year 2011 amounted to EUR 34.9 million. In H1 12
Delticom raised EUR 21.7 million short-term financial liabilities to help
funding the inventory. Cash flow from financing activities in the reporting
period totalled EUR -13.7 million.
Liquidity (cash and cash equivalents plus liquidity reserve) as of 30.06.2012
totalled EUR 7.7 million (30.06.2011: EUR 6.2 million). The company's net cash
position (liquidity less liabilities from current accounts) amounted to EUR
-18.0 million (30.06.2011: EUR 0.9 million).
Outlook
Rainer Binder (Co-CEO): "The European summer tyre markets are in distress. This
does not leave us unaffected. Still, Delticom's business model has proven to be
flexible and resilient. We are winning market share." Management plans for H2
volumes and gross margins to be higher year-on-year, on the back of attractively
priced winter tyre stocks.
Frank Schuhardt (CFO): "For the months ahead, we will continue to strengthen our
fulfillment capabilities even further. As a result, our earnings position will
be burdened with higher fixed costs, like in the first half of the year."
Visibility for the further course of business remains very low, though, in
particular with regards to the winter tyre sales in the fourth quarter.
Schuhardt adds: "Business has lagged behind our expectations so far. We have
therefore decided to reduce the growth target for full-year revenues to +5 %.
EBIT margins above 9 % are attainable only in the event of very favourable
winter weather."
The full report for the first six months of 2012 will be published on 09 August
2011 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 41 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
30,000 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.
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