EANS-News: Delticom AG: Delticom publishes Annual Report 2010

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Annual Reports/Financial Figures/Balance Sheet

Hannover (euro adhoc) - Hanover, 23 March 2011 - For Delticom (German
Securities Code (WKN) 514680, ISIN DE0005146807, stock market symbol
DEX), Europe's leading online tyre dealer, 2010 was an extremely
successful year. According to the annual report released today,
revenues in the fiscal year increased by 34.8% to EUR 419.6 million
and EBIT by 60.1% to EUR 47.1 million. With an EBIT margin of 11.2%
the profitability has improved once again. Earnings per share grew
59.4% to EUR 2.72. As in previous years, the Management Board and the
Supervisory Board will propose to fully distribute the net income to
shareholders.

Q410: Scarce supply, high prices.

The prime reason for the positive business development was the
unusually favourable winter weather in the closing quarter. Heavy
snowfalls caused serious traffic delays, especially in countries
where the winter is usually quite mild. The surge in demand was
intensified by new regulations in Germany, making winter tyres
mandatory. At the same time tyre supply fell substantially short of
demand, because tyre manufactures had ramped up their production only
relatively late in the aftermath of the recession. As a result,
winter tyre prices increased starkly across Europe, driven by
market-wide scarcity. In the closing quarter, revenues climbed owing
to positive volume and price effects to EUR 162.6 million - a plus of
48.2% year-on-year over previous year's value of EUR 109.7 million.

As a result, the EBIT margin in Q410 was with 15.0% again higher than
in the already very successful prior-year period (Q409: 13.4%). We
expect that the built-in advantages of our business model could very
well fall in line with favourable weather and supportive regulations
in the future as well. It is clear, though, that those factors will
not necessarily always build-up in our favour as in 2010.

Fiscal year 2010

Revenues Over the course of the year, selling price levels developed
favourably, the mix was stable and volumes developed well. All in
all, Delticom was able to generate revenues of EUR 419.6 million, a
plus of 34.8% from prior-year's EUR 311.3 million. Revenues in the
E-Commerce division were up year-on-year by 36.2%, from EUR 296.5
million to EUR 403.7 million. The revenues of the Wholesale division
lifted by 7.6% to EUR 15.9 million, after prior-year revenues of EUR
14.8 million. Other operating income increased in 2010 in line with
revenues by 33.3% to EUR 5.8 million (previous year: EUR 4.3
million).

Gross profit The cost of sales increased in the reporting period by
33.2%, from EUR 225.8 million in 2009 to EUR 300.7 million. In an
environment of rising purchasing prices, Delticom was to a good
extent able to cushion the hikes by early purchasing. Thanks to the
increased volume Delticom also benefited from economies of scale in
the procurement function. In addition and according to schedule,
Delticom generated a greater share of revenues with own inventories,
compared to the previous years. This helped to meet the demand even
at peak times, at good margins. As a result, the gross profit
advanced in the reporting period by 38.9% year-on-year, from EUR 89.8
million to EUR 124.7 million and the gross profit margin (gross
profit in relation to total income) progressed from 28.5% to 29.3%.

Personnel expenses Thanks to the highly efficient operating
workflows, the company has been able to keep staff levels low in 2010
despite increasing transaction volumes. In the reporting period on
average 101 staff members were employed at Delticom (previous year:
87). Personnel expenses amounted to EUR 6.8 million (previous year:
EUR 5.8 million). Compared to the prior-year period, the personnel
expenses ratio (staff expenditures as percentage of revenues)
decreased slightly from 1.9% to 1.6%.

Other operating expenses Overall the other operating expenses
totalled EUR 69.5 million in the past financial year, an increase of
EUR 16.0 million or 29.8% over the prior-year value of EUR 53.5
million.

Among the other operating expenses, transportation costs is the
largest line item. Tyres sold online are picked up at the delivery
points by parcel services which then transport the tyres to the
customers or fitting stations. As business volume increases, so too
do these transportation costs, from EUR 26.8 million by +28.8% to EUR
34.5 million. The share of transportation costs against revenues
decreased from 8.6% in 2009 to 8.2% in 2010. The reason for this was
the significant price effect in the revenues for the last financial
year and in the closing quarter in particular. In addition, economies
of scale arising from the centralised warehouse infrastructure helped
to further drive down costs.

In the reporting period, costs for advertising totalled EUR 9.0
million, after EUR 7.7 million in 2009. This represents a marketing
expense ratio (marketing expenses as a percentage of revenues) of
2.1%, after 2.5% in the corresponding period of the previous year.
One of the reasons was the snowy winter which clearly illustrated the
importance of appropriate tyres to safety-conscious drivers. Costs
were also lower due to the fact that the client base has grown
continuously over the course of the years.

Depreciation In line with our gradual warehouse capacity expansion
and the parallel investments into warehousing infrastructure,
scheduled depreciation rose by 24.8% from EUR 1.0 million in 2009 to
EUR 1.3 million. The low absolute level of depreciation underlines
the low capital intensity of Delticom's business.

Earnings performance Earnings before interest and taxes (EBIT)
improved during the reporting period to EUR 47.1 million (2009: EUR
29.4 million). This corresponds to an EBIT margin of 11.2% (2009:
9.4%). The continually low Euro money market rates led to a poor
financial result of EUR 102 thousand (2009: EUR 163 thousand). The
expenditure for income taxes was EUR 14.9 million (previous year: EUR
9.3 million). The tax rate of 31.6% was unchanged from the previous
year. Consolidated net income for 2010 grew from EUR 20.2 million to
EUR 32.3 million. This corresponds to earnings per share (EPS) of EUR
2.72 (undiluted, 2009: EUR 1.71), a step-up of 59.4%.

Cash flow and liquidity position The cash flow from ordinary business
activities (operating cash flow) for the period under review was EUR
51.7 million. The strong increase from last year's EUR 13.1 million
was partly due to a significant drop of funds tied up in net working
capital by EUR 11.9 million. During the reporting period, Delticom
made investments of EUR 3.4 million into property, plant and
equipment, EUR 0.8 million into financial assets and EUR 0.1 million
into intangible assets. Delticom boasts a healthy financial and
assets position. At EUR 67.8 million, our liquidity remains high
(previous year: EUR 40.6 million).

At Delticom's Annual General Meeting on 03.05.2011, the Management
Board and the Supervisory Board will propose a dividend of EUR 2.72
per share - an increase of 60.0% compared to the dividend for
financial year 2009 of EUR 1.70.

Outlook

Results such as those posted in 2010 have naturally raised
expectations for the current year. It would be imprudent to expect
the combination of positive factors which were key in driving our
2010 performance to occur again this year. German regulations
requiring drivers to fit winter tyres will play a less important role
in 2011. That the next winter will experience as much snowfall as
last winter remains to be seen. At the same time, shortages of
replacement tyres cannot be ruled out. Many tyre manufacturers have
already raised their prices as a result. It is expected that the
European tyre trade will see a year-over-year decline in the second
half of 2011.

At this point, experts are simply unable to assess the potential
impact which the destruction in Japan could have on the tyre supply
chain. While Delticom does not operate any business in Japan, it is
nevertheless possible that the difficulties there could also have
indirect consequences on the European tyre trade.

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, and an increasing number of these will make their tyre
purchases in our shops. Despite the exceptionally strong results
posted in 2010, Delticom plans an increase in sales volumes of
approximately 10% for the current year - an ambitious, but achievable
goal.

In calculating future EBIT margins, the management orients themselves
to rates of growth more in line with reasonable long-term
expectations. Consequently, the forecast for the 2011 EBIT margin is
about one percentage point below that which was achieved in 2010.
Despite this, the current view is that earnings per share could reach
2010 levels if the current business year unfolds in a positive
manner.

The full Annual Report for 2010 can be downloaded from the website
www.delti.com within the "Investor Relations" section.

Company profile:

Delticom, Europe's leading online tyre retailer, was founded in
Hanover in 1999. With more than 100 online shops in 39 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 27,000 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

end of announcement euro adhoc
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ots Originaltext: Delticom AG
Im Internet recherchierbar: http://www.presseportal.de

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

Branche: Electronic Commerce
ISIN: DE0005146807
WKN: 514680
Index: SDAX, CDAX, Classic All Share, Prime All Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Stuttgart / free trade
Düsseldorf / free trade
München / free trade