EANS-News: Delticom AG: Preliminary Q3 Results

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Financial Figures/Balance Sheet

Hanover (euro adhoc) - 18 October 2012 - Delticom (German Securities
Code (WKN) 514680, ISIN DE0005146807, stock market symbol DEX),
Europe's leading online tyre dealer, has published preliminary
figures for the first nine months of 2012. In a troubled market
environment the company recognised revenues of EUR 280.4 million in
9M 12, a minus of 5.8 % year-on-year. Earnings before interest and
taxes (EBIT) amounted to EUR 17.5 million.

Revenues

Following a weak first half year, the European tyre replacement
market continued to lag expectations in the third quarter. After the
summer tyre business had already been disappointing, the winter tyre
season started much slower than last year.

In this challenging environment 9M 12 group revenues declined by 5.8
% to EUR 280.4 million (9M 11: EUR 297.7 million). In the third
quarter the company recognised revenues of EUR 87.2 million (Q3 11:
EUR 99.4 million, -12.3 %). Q3 12 revenues in the E-Commerce division
were down year-on-year by 5.9 % and amounted to EUR 83.8 million,
resulting in a decrease of 3.7 % to EUR 268.7 million for the nine
months. Quarterly revenues in the Wholesale division decreased by
67.5 % to EUR 3.4 million, resulting in 9M 12 revenues coming down by
36.7 % to EUR 11.7 million.

Gross margin

The cost of goods sold decreased in the reporting period by 5.4 %,
from EUR 218.6 million to EUR 206.9 million. The gross margin for Q3
12 was 25.7 % (Q3 11: 25.8 %). For the nine months the gross margin
was 26.2 %, after 26.6 % in the prior-year period.

Other operating income

Other operating profit decreased by 52.6 % to EUR 2.8 million (9M 11:
EUR 5.9 million), thereof gains from exchange rate differences to the
order of EUR 1.2 million (9M 11: EUR 4.5 million). FX losses have to
be accounted for as line item in the other operating expenses (9M 12:
EUR 3.1 million, 9M 11: EUR 3.9 million). FX gains and losses often
accrue differently to different quarters due to the long duration of
the underlying transaction and the corresponding hedge. For the nine
months the balance of FX income and losses totalled EUR -1.9 million
(9M 11: EUR 0.7 million). Altogether, the gross profit worsened by
10.2 % year-on-year, from EUR 85.0 million to EUR 76.3 million.

Personnel expenses

In the reporting period on average 143 staff members were employed at
Delticom (9M 11: 111). The reason for the increase was the buildup of
qualified staff for our new warehouse facility which opened last
year. Personnel expenses amounted to EUR 6.3 million (9M 11: EUR 5.2
million). The 9M 12 personnel expenses ratio stood at 2.3 % (staff
expenditures as percentage of revenues, 9M 11: 1.7 %).

Other operating expenses

For the nine months other operating expenses totalled EUR 50.4
million, an increase of 0.6 % over the prior-year value of EUR 50.2
million.

Among the other operating expenses, transportation costs is the
largest line item. In the reporting period it amounted to EUR 23.7
million (9M 11: EUR 24.2 million). The share of transportation costs
against revenues went up from 8.1 % in 9M 11 to 8.4 % in 9M 12.

Due to the expansion of warehouse capacity, rents and overheads
increased by 44.5 %, from EUR 3.1 million to EUR 4.5 million.
Stocking costs came in at EUR 2.4 million, 26.1 % lower than
prior-year's EUR 3.3 million. This was mainly due to taking qualified
temporary workers on the payroll.

In the reporting period, advertising costs totalled EUR 6.7 million.
This equates to a ratio of marketing expenses to revenues of 2.4 %
(9M 11: EUR 5.8 million or 2.0 %). In order to support the sales of
winter tyres and according to plans, Q3 12 marketing spent of 2.7 %
of revenues was higher than last year's 1.9 %.

Depreciation

In line with our gradual warehouse capacity expansion and the
parallel investments into warehousing infrastructure, depreciation
rose by 40.2 % from EUR 1.4 million in 2011 to EUR 2.0 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 37.9 % from EUR 28.2
million to EUR 17.5 million, primarily due to higher fixed costs. The
EBIT margin was 6.2 % (9M 11: 9.5 %). Third quarter EBIT saw a
decline of 55.0 %, from prior-year's EUR 9.5 million to EUR 4.3
million. The quarterly EBIT margin was 4.9 % (Q3 11: 9.5 %).

Financial income for the nine months amounted to EUR 26.0 thousand
(9M 11: EUR 96.3 thousand). On the back of higher funding needs for
inventories financial expenses increased to EUR 190.1 thousand (9M
11: EUR 90.1 thousand), leading to a financial result of EUR -164.1
thousand (9M 11: EUR 6 thousand).

The expenditure for income taxes was EUR 5.6 million (previous year:
EUR 9.2 million). The tax rate was 32.5 % (9M 11: 32.6 %).

In total, consolidated net income for the reporting period totalled
EUR 11.7 million, after a prior-year amount of EUR 19.0 million.

Working Capital

Among the current assets, inventories is the biggest line item. They
grew from the beginning of the year by EUR 20.0 million, totalling
EUR 126.5 million on the reporting date (30.09.2011: EUR 122.9
million). In the corresponding prior-year period the increase in
inventory value had amounted to EUR 70.7 million.

In the wake of the inventory build-up, the accounts payable increased
from EUR 68.2 million by EUR 44.2 million or 64.7 % to EUR 112.4
million (30.09.2011: EUR 92.5 million). Taken together with accounts
receivable of EUR 15.7 million (30.09.2011: EUR 20.4 million), the
net working capital on 30.09.2012 amounted to EUR 22.9 million
(30.09.2011: EUR 42.5 million).

Cash flow and liquidity position

Due to the favourable working capital development, the 9M 12 cash
flow from ordinary business activities (operating cash flow) of EUR
29.7 million was significantly better than in the comparison period
(9M 11: EUR -26.0 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 0.8
million year-to-date (9M 11: EUR 8.0 million).

In the reporting period, Delticom recorded a cash flow from financing
activities amounting to EUR -36.2 million, thereof the payout for the
last financial year of EUR -34.9 million and disbursements due to
redemption of loans of EUR -0.9 million. The balance of utilisation
and redemption of short-term credit lines was EUR -0.3 million.

Liquidity (cash and cash equivalents plus liquidity reserve) as of
30.09.2012 totalled EUR 15.0 million (30.09.2011: EUR 11.7 million).
The company's net cash position (liquidity less liabilities from
current accounts) amounted to EUR 11.8 million (30.09.2011: EUR 1.8
million).

Outlook

While last year's winter tyre season benefitted from an early start,
this year the winter tyre business has so far been relatively
sluggish. Despite good demand for winter tyres in some European
countries, Management does not expect the company to exceed annual
prior-year revenues anymore. Due to the challenging market
environment Delticom scales back its EBIT goal for the current
financial year to 7 % - 8 %.

The full report for the first nine months of 2012 will be published
on 08.11.2012 within the "Investor Relations" section of the website
www.delti.com .

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