EANS-News: Delticom AG: Q2 revenues and earnings on track

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6-month report

Hanover (euro adhoc) - Hanover, 19 July 2011 - Delticom (German
Securities Code (WKN) 514680, ISIN DE0005146807, stock market symbol
DEX), Europe's leading online tyre dealer, has published preliminary
figures for the second quarter of 2011. Over the past months the
company was able to increase its revenues and earnings, despite the
strong prior-year base. With its new central warehouse, Delticom is
well prepared for the coming quarters.

The European summer tyre trade has lagged behind expectations so far.
At Delticom, positive figures in May barely managed to offset a
comparatively weak April. However, tyre sales have gone up again
noticeably year-on-year since June.

Revenues

In the second quarter, Delticom was able to generate revenues of EUR
112.9 million (Q210: EUR 102.9 million) - a plus of 9.8%, in spite of
the previous year's strong base. As a result, year-to-date revenues
amounted to EUR 198.3 million (H110: EUR 177.3 million, +11.8%). H1
revenues in the E-Commerce division were up year-on-year by 12.0%,
from EUR 169.7 million to EUR 190.1 million. The revenues of the
Wholesale division grew by 7.3% to EUR 8.2 million, after prior-year
revenues of EUR 7.6 million. In the same period, other operating
income decreased by 7.7% to EUR 3.1 million (H110: EUR 3.4 million).

Gross profit

The cost of sales in the reporting period totalled EUR 144.5 million
(H110: EUR 129.3 million, +11.7%), thereof EUR 81.5 million for the
second quarter (Q210: EUR 74.5 million, +9.4%). In the first six
months of 2011 the gross profit advanced by 10.8% year-on-year, from
EUR 51.4 million to EUR 56.9 million. Despite a challenging
Pan-European demand situation, the rise in purchasing prices were
largely passed on to customers. Consequently, second quarter gross
profit margin (gross profit in relation to total income) came in flat
year-on-year at 29.0%. For the first half of the year the gross
profit margin decreased only slightly from 28.4% to 28.3%.

Personnel expenses

In the reporting period an average of 108 staff members were employed
at Delticom (H110: 96). Personnel expenses amounted to EUR 3.5
million (previous year: EUR 3.2 million). Compared to the prior-year
period, the personnel expenses ratio (staff expenditures as
percentage of revenues) remained unchanged at 1.8%.

Other operating expenses

Overall the other operating expenses in H111 totalled EUR 33.5
million, an increase of EUR 2.6 million or 8.5% over the prior-year
value of EUR 30.9 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 service partners. Transportation costs registered only a
rather small step-up in the reporting period, from EUR 15.8 million
to EUR 16.2 million (+2.2%). Because transportation volumes in the
second quarter were only slightly higher than last year's, quarterly
transportation costs remained flat year-on-year at EUR 9.4 million.
Regarding the first six months as a whole, the share of
transportation costs against revenues decreased from 8.9% to 8.2%,
partly driven by relatively stronger revenue growth coming from
higher selling prices.

Marketing expenses in Q211 amounted to EUR 2.0 million after EUR 1.9
million in Q210, an increase of just 4.1%. As a result, marketing in
percent of revenues came down slightly, from 1.8% to 1.7%.

Depreciation

In line with the significant expansion of warehouse capacity and the
parallel investments into warehousing infrastructure, scheduled
depreciation for the past quarter rose by 42.3%, from EUR 0.3 million
in Q210 to EUR 0.4 million. For the first half of the year the total
amount was EUR 0.8 million (H110: EUR 0.6 million, +33.7%). The low
absolute level of depreciation underlines the low capital intensity
of Delticom's business.

Earnings performance

Last year's second quarter earnings before interest and taxes (EBIT)
had shown a steep rise by +43.9% to EUR 10.9 million. Nevertheless,
against the backdrop of a stable gross profit margin, EBIT for this
year's Q2 saw a year-on-year increase once again, by 19.6% to EUR
13.0 million. This translated to a quarterly EBIT margin of 11.5%
(Q210: 10.6%). The EBIT for the total H111 came in at EUR 19.1
million (H110: EUR 16.7 million), a plus of 14.4% and an EBIT margin
of 9.7% (H110: 9.4%).

Inventories and liquidity position

Delticom opened a new large-scale warehouse in the second quarter.
Following the accelerated buildup of stock levels to EUR 103.2
million (31.12.2010: EUR 51.7 million), net working capital increased
to EUR 44.3 million (31.12.2010: EUR 1.3 million). Consequently, cash
flow from ordinary business activities (operating cash flow) for the
period under review came in significantly lower than last year, at
EUR -24.9 million (H110: EUR 3.5 million). Taking the cash dividend
of EUR 32.2 million for 2010 into account, cash and cash equivalents
as of 30.06.2011 totalled EUR 6.1 million (30.06.2010: EUR 21.8
million, 31.12.2010: EUR 66.8 million). The company´s net cash
position (cash and cash equivalents less liabilities from current
accounts) amounted to EUR 0.9 million.

Frank Schuhardt (CFO): "Our new warehouse has allowed us to stock up
for the upcoming months more aggressively than originally envisioned.
Compared to last year, we are now in a better position to offer our
customers attractively priced tyres throughout the entire winter."
Despite the strong prior-year base, Delticom´s management expects to
increase both sales volume and revenues in the fourth quarter,
assuming normal winter weather conditions. Frank Schuhardt adds: "We
remain on track. Our plans call for around 10% revenue growth in 2011
and an EBIT margin of around one percentage point lower than in
2010."

The full report for the first six months of 2011 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 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 29,000 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

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: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
Stuttgart, Düsseldorf, München
language: English