EANS-News: Delticom AG: Preliminary H1 Results
-------------------------------------------------------------------------------- Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement. -------------------------------------------------------------------------------- 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 -------------------------------------------------------------------------------- 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
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