EANS-News: Delticom AG: Preliminary H1 Results

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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