DGAP-News: Delticom AG / Key word(s): Half Year Results Delticom publishes Semi-Annual Report 2014 14.08.2014 / 08:00 --------------------------------------------------------------------- Hanover, 14 August 2014 - 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 six months of 2014. In the reporting period, the company recognized revenues of EUR 226.1 million, an increase of 6.5 % (H1 13: EUR 212.2 million). EBITDA came in at EUR 6.2 million. This equates to an EBITDA margin of 2.7 % (H1 13: 4.8 %). Business in the first six months Warm temperatures in March prompted many motorists to make an early switch to summer tyres. As a result, the summer tyre business cooled off in the second quarter. First assessments from trade associations for the past quarter showed summer tyre sales in Germany down by nearly 7 % year on year. Revenues. In the reporting period, the company recognized revenues of EUR 226.1 million, an increase of 6.5 % after EUR 212.2 million in the prior-year period. Revenues in the E-Commerce with its 140 online shops increased year-on-year by 7.3 %, from EUR 206.4 million to EUR 221.4 million. Tirendo. Tirendo's performance in the first half of the year is significantly below planning, both in terms of revenues and earnings. At EUR 17.5 million, revenues in the first six months remained nearly unchanged (H1 13: EUR 17.5 million). Whereas Tirendo's revenues increased by 131.2 % in the first quarter of the current fiscal year, business in the second quarter was unable to match the positive development at the beginning of the year. Spring-like temperatures resulted in an early start of the summer season in March. With a view to the strong prior-year base and the still low proportion of international business, revenues of Tirendo decreased by 33.8 % to EUR 9.2 million in Q2 14. New customers. In the period under review, the company was able to acquire a total of 454 thousand new customers (H1 13: 435 thousand, Delticom excluding Tirendo, +4.3 %). Over the same period, 420 thousand existing customers bought their tyres from the Delticom Group again. Gross margin. Group COGS increased by 5.9 % from EUR 160.5 million in H1 13 to EUR 170.0 million in H1 14. Gross margin for H1 14 came in with 24.8 %, after 24.4 % in H1 13. Personnel expenses. On 30.06.2014, the company employed a total of 300 employees. 149 of them (including trainees) worked for Delticom and the remaining 151 for Tirendo (including interns, Q1 14: 147). In the reporting period, Delticom employed an average of 271 staff members (H1 13: 148). Personnel expenses amounted to EUR 7.7 million (H1 13: EUR 4.5 million, +69.4 %). This increase is primarily due to the acquisition of Tirendo and their workforce. The personnel expenses ratio in the first six months came to 3.4 % (staff expenditures as percentage of revenues, H1 13: 2.1 %). Other operating expenses. Other operating expenses amounted to EUR 48.3 million (H1 13: EUR 39.6 million, + 22.0%). Among the other operating expenses, transportation costs is the largest line item. They increased in the reporting period from EUR 18.7 million by 6.0 % to EUR 19.8 million. The share of transportation costs against revenues remained with 8.8 % nearly unchanged (H1 13: 8.8 %). Marketing. Marketing expenses grew by 79.0 % to EUR 11.6 million (H1 13: EUR 6.5 million). This significant increase is mainly due to the EUR 5.3 million additional marketing spent of Tirendo in the first six months of current fiscal year (H1 13: EUR 5.3 million). In the reporting period, marketing spend with 5.1 % of revenues was higher than last year's 3.0 %. Depreciation. Depreciation rose from EUR 1.3 million in H1 13 to EUR 4.1 million. Main reason for this increase is the scheduled depreciation on intangible assets, identified as part of the purchase price allocation. Depreciation from PPA in H1 14 amounted to EUR 2.7 million. Earnings. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the reporting period came in at EUR 6.2 million (H1 13: EUR 10.3 million, -39.7 %). This equates to an EBITDA margin of 2.7 % (H1 13: 4.8 %). In the first six months, EBIT contracted by 76.9 % to EUR 2.1 million (H1 13: EUR 8.9 million). This translates into an EBIT margin of 0.9 % (EBIT in percent of revenues, H1 13: 4.2 %). Delticom excluding Tirendo. In the reporting period, Delticom achieved revenues of EUR 208.6 million, after EUR 212.2 million the previous year (-1.7 %). EBITDA amounted to EUR 13.3 million, after EUR 10.3 million the previous year (+30.2 %). This equates to an EBITDA margin of 6.4 %, after 4.8 % in the previous year. Despite the weaker business development in H1 14, Delticom remains sufficiently profitable, even after the Tirendo takeover, to compensate for Tirendo's losses. Income taxes. In H1 14 the expenditure for income taxes was EUR 1.8 million (H1 13: EUR 2.9 million). Net income. In the period under review, the consolidated net income with EUR -0.2 million turned out negatively (H1 13: EUR 6.0 million). On a half-year basis, the consolidated net income was negative for the first time in the history of the company, which was primarily attributable to Tirendo's accumulated losses after tax of EUR -8.0 million in H1 14. Inventories. Among the current assets, inventories is the biggest line item. Since the beginning of the year stock grew by EUR 36.3 million or 49.9 % to EUR 109.2 million (31.12.2013: EUR 72.8 million). This corresponds to a share of 52.7 % of total assets (31.12.2013: 41.1 %, 30.06.2013: 66.9 %). Liquidity position. Liquidity (cash and cash equivalents plus liquidity reserve) as of 30.06.2014 totalled EUR 7.0 million (31.12.2013: EUR 11.3 million, 30.06.2013: EUR 9.8 million). The company's net cash position amounted to EUR -16.4 million (liquidity less liabilities from current accounts, 30.06.2013: EUR 8.9 million). Outlook Following the disappointing level of demand for winter tyres over the last three years, it remains to be seen as to what extent the hopes of the tyre trade for positive winter business can be fulfilled this year. In the second half of the year, the development of the European tyre replacement market will once again depend a great deal on winter weather conditions. Delticom continues to pursue revenue growth of 10 % for the full year. As Tirendo did not make the expected level of Group growth contributions in the first half of H1 14, the target set for the second half of the year is more ambitious than at the start of the year and is based on the assumption that there will be greater demand for winter tyres this year in comparison to the previous year. We will continue to optimize costs and processes in both Hanover and Berlin in the coming months. In terms of overall earnings before interest, tax, depreciation and amortization (EBITDA), we continue to aim to be on par with the financial year 2013. The full report for the first six months 2014 stands ready for download within the "Investor Relations" section of the website www.delti.com. Company profile: Delticom is Europe's leading online tyre retailer. Founded in 1999, the Hanover-based company has more than 100 online shops in 42 countries, among others ReifenDirekt, www.mytyres.co.uk in UK and www.123pneus.fr in France, as well as the Tirendo shops which enjoy a high level of recognition, not least due to its brand ambassador, Sebastian Vettel. Delticom offers a wide range of products for its private and business customers: more than 25,000 models from over 100 tyre brands for cars, motorcycles, commercial vehicles and buses, but also complete wheels, motor oil, replacement parts and accessories. Customers enjoy all the advantages of modern E-Commerce: convenience in order placing, quick, efficient delivery, clear cost information and, last but not least, low prices. The products are delivered in two business days to any address the customer chooses. Alternatively, Delticom delivers the tyres to one of more than 39,000 service partners (8,900 in Germany alone) for professional fitting directly on to the customer's vehicle at a reasonable price. On the Internet at: www.delti.com Contact: Delticom AG Investor Relations Melanie Gereke Brühlstraße 11 30169 Hannover Tel.: +49(0)511-936 34-8903 Fax: +49 (0)89-208081147 e-mail: [email protected] --------------------------------------------------------------------- 14.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Delticom AG Brühlstraße 11 30169 Hannover Germany Phone: +49 (0)511 93634 8000 Fax: +49 (0)511 33611 655 E-mail: [email protected] Internet: www.delti.com ISIN: DE0005146807 WKN: 514680 Listed: Regulierter Markt in Frankfurt; Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 282224 14.08.2014