Corporate | 7 November 2013 07:59
Delticom AG / Key word(s): Quarter Results
07.11.2013 / 07:59
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Hanover, 07 November 2013 - Delticom (German Securities Code (WKN) 514680,
ISIN DE0005146807, stock market symbol DEX), Europe's leading online tyre
dealer, has published its full report for the first nine months of 2013. In
a troubled market environment the company recognised revenues of EUR 309.1
million, an increase of 10.2 % year-on-year. Earnings before interest and
taxes (EBIT) amounted to EUR 9.7 million.
On 16.09.2013 Delticom acquired Tirendo, a young and innovative company
with strengths in IT, marketing and branding. The Berlin-based team has
quickly established Tirendo as a fast-growing online retailer of tyres. The
brand is already enjoying a high level of recognition, not least due to TV
campaigns with four-time Formula 1 world champion Sebastian Vettel. While
adding complementary approaches in terms of digital branding and customer
acquisition, Tirendo has access to the extensive industry and logistical
network of the Delticom Group in Hanover.
Revenues. Following a weak first half year, the European tyre replacement
market continued to lag expectations in the third quarter. Against this
market trend, 9M 13 group revenues increased by 10.2 % to EUR 309.1 million
(9M 12: EUR 280.4 million). In the third quarter the company recognised
revenues of EUR 96.9 million (Q3 12: EUR 87.2 million, +11.1 %).
Q3 13 revenues in the E-Commerce division grew year-on-year by 11.4 % and
amounted to EUR 93.3 million, resulting in an increase of 11.6 % to EUR
299.8 million for the nine months. In the reporting period revenues in the
Wholesale division decreased by 20.6 % to EUR 9.3 million, after prior-year
revenues of EUR 11.7 million.
Over the past quarter the company was able to acquire 199 thousand new
customers via its Delticom shops (without Tirendo; Q3 12: 165 thousand,
+20.9 %). As a result, the customer base grew by 634 thousand customers
over the course of the year (9M 12: 525 thousand, +20.7 %). During the same
period 411 thousand existing customers made repeat purchases at Delticom
(9M 12: 353 thousand, +16.4 %).
Gross margin. The gross margin for Q3 13 was 24.1 % (Q3 12: 25.7 %). For
the nine months the gross margin was 24.3 %, after 26.2 % in the prior-year
period.
Gross profit. Other operating profit increased by 23.6 % to EUR 3.5 million
(9M 12: EUR 2.8 million), thereof gains from exchange rate differences to
the order of EUR 2.1 million (9M 12: EUR 1.2 million). Altogether, the
gross profit improved by 2.8 % year-on-year, from EUR 76.3 million to EUR
78.5 million.
Personnel expenses. Personnel expenses amounted to EUR 7.0 million (9M 12:
EUR 6.3 million). Compared with the prior-year period, the 9M 13 personnel
expenses ratio stood unchanged at 2.3 % (staff expenditures as percentage
of revenues, 9M 12: 2.3 %).
Other operating expenses. For the nine months other operating expenses
totalled EUR 59.6 million, an increase of 18.1 % over the prior-year value
of EUR 50.4 million.
Among the other operating expenses, transportation costs is the largest
line item. They increased in the reporting period from EUR 23.7 million by
14.7 % to EUR 27.2 million. The share of transportation costs against
revenues went up from 8.4 % in 9M 12 to 8.8 % in 9M 13.
In the reporting period, advertising costs totalled EUR 10.3 million. This
equates to a ratio of marketing expenses to revenues of 3.3 % (9M 12: EUR
6.7 million or 2.4 %). Q3 13 marketing expenses of 4.0 % of revenues were
higher than last year's 2.7 %, according to plan. This includes the new
commercial with Sebastian Vettel as Tirendo brand ambassador. Since mid of
September the winter spot is regulary broadcasted on TV.
Financial and legal expenses totalled EUR 2.6 million in the reporting
period. For third quarter the expenses totalled EUR 1.3 million (Q3 12: EUR
0.3 million), mainly related to due diligence costs, auditing, tax,
financial and legal advice concerning the acquisition of Tirendo.
Depreciation. Depreciation for 9M 13 rose by 11.7 % from EUR 2.0 million to
EUR 2.2 million. Main reason for this increase is the depreciation of
intangible assets totalling EUR 17.5 million, identified as part of the
purchase price allocation.
Earnings performance. EBIT for the reporting period came down by 44.5 %
from EUR 17.5 million to EUR 9.7 million. This equates to an EBIT margin of
3.1 % (9M 12: 6.2 %). Third quarter EBIT saw a decline of 80.9 %, from
prior-year's EUR 4.3 million to EUR 0.8 million or 0.8 % of revenues (Q3
12: 4.9 %).
In 9M 13 the expenditure for income taxes was EUR 3.5 million (9M 12: EUR
5.6 million). This equates to a tax rate of 36.5 % (9M 12: 32.5 %). The
income tax rate was unusually high because the due diligence and advisory
costs of EUR 1.1 million related to the Tirendo deal have to be capitalised
as incidental acquisition expenses.
In total, consolidated net income for the reporting period totalled EUR 6.2
million, after a prior-year amount of EUR 11.7 million.
Cash flow and liquidity position. Due to the net working capital increase
and the weaker earnings situation, the cash flow from ordinary business
activities of EUR 11.3 million for the period under review was
significantly lower than last year (9M 12: EUR 29.7 million).
As part of the acquisition of Tirendo, Delticom paid EUR -42.3 million as
equity value (ex cash). In the reporting period Delticom invested EUR 0.4
million into property, plant and equipment, after EUR 0.9 million in the
previous year. In total, the cash flow from investments was EUR -43.1
million (30.09.2012: EUR -0.8 million, 31.12.2012: EUR -1.0 million).
In the reporting period, Delticom recorded a cash flow from financing
activities amounting to EUR -5.0 million, thereof the dividend payout for
the last financial year of EUR 22.5 million and disbursements due to
redemption of loans of EUR 7.5 million. The cash outflow was offset by
inflows from shortterm financial liabilities of EUR 24.9 million. The
redemption of loans includes the repayment of EUR 6.6 million of
shareholder loans which were acquired as part of the Tirendo transaction.
Liquidity as of 30.09.2013 totalled EUR 9.2 million (30.09.2012: EUR 15.0
million). The company's net cash position (liquidity less liabilities from
current accounts) amounted to EUR -18.0 million (30.09.2012: EUR 11.8
million).
Outlook. Despite the disappointing weather conditions so far, Delticom
should be able to exceed previous year's revenues. The company will once
again significantly outperform the industry as a whole in 2013, regardless
of broader sector developments.
The development of the Tirendo brand will affect profits in the coming
quarters. Our focus is therefore on the rapid integration of business
processes in order to make the best use of existing synergies. With its
shops in Hanover and Berlin, the Delticom Group is well positioned to drive
future growth and strengthen its position as the market leader. For the
medium term we expect revenues to grow double-digit. We are confident that
Delticom will continue to grow at a rate above the market trend.
The full report for the first nine months of 2013 stands ready for download
within the 'Investor Relations' section of the website www.delti.com .
Company profile:
Delticom, Europe's leading online tyre retailer, was founded in Hannover in
1999. The company supplies private and business customers with a wide
variety of tyre products in over 100 online shops in 42 countries. Products
include tyres for cars, motorcycles, bicycles, small commercial vehicles
and HGVs, as well as complete wheels (pre-mounted tyres on wheel rims),
selected replacement car parts and accessories, motor oil and batteries.
Berlin-based Tirendo is a fast-growing innovative online retailer of tyres
and complete wheels. After the launch of Tirendo.de in March 2012, the tyre
portal quickly expanded into seven further countries and is enjoying a high
level of recognition, not least due to its brand ambassador, Sebastian
Vettel.
Selected online shops: www.reifendirekt.de, www.tirendo.de,
www.123pneus.fr, www.mytyres.co.uk, www.reifendirekt.ch
Contact:
Melanie Gereke
Brühlstraße 11
30169 Hanover
Phone: +49-511-93634-8903
E-Mail: melanie.gereke@delti.com
End of Corporate News
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Language: English
Company: Delticom AG
Brühlstraße 11
30169 Hannover
Germany
Phone: +49 (0)511 93634 8000
Fax: +49 (0)511 33611 655
E-mail: info@delti.com
Internet: www.delti.com
ISIN: DE0005146807
WKN: 514680
Listed: Regulierter Markt in Frankfurt; Freiverkehr in Berlin,
Düsseldorf, Hamburg, Hannover, München, Stuttgart
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