On track. Investor and Analyst Presentation On the Occasion of the Release of the Preliminary Figures for 9M 2011
Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook 2
Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook 3
Delticom at a Glance #1 European online tyre dealer > 100 online shops in 40 countries founded 1999, IPO Oct 2006, SDAX Dec 2008 2011 more than 590 thousand new customers so far customer base: more than 4.9 million focus on replacement tyres: > 100 tyre brands, > 25,000 models other products: motorcycle tyres, bicycle tyres truck tyres, industrial tyres complete wheels and rims motor oil, car parts, accessories 111 employees, mainly in the Hanover head office global network with more than 29,000 fitting partners, e.g. DE 8056 US 2294 UK 1777 FR 3489 CH 1500 4
Key Financials 9M Q311 Q310 yoy % 9M11 9M10 yoy % guidance* New Customers k 183 189 3.2 594 625 5.0 Sluggish summer tyre season... Customer Base m 5.0 4.1 +22.8... but still good customer generation. Revenues m 99.4 79.7 +24.7 297.7 257.0 +15.8 ~ 10 % Early start in the winter tyre season... Gross Margin % 25.8 27.4 1.6p 26.6 27.1 0.6p... and DEX offers good prices. Ebit Margin % 9.5 7.9 +1.7p 9.5 8.9 +0.6p < 10.5% Q3 yoy lower without FX effects Ebit m 9.5 6.3 +51.5 28.2 22.9 +23.3 on track Capex m 3.5 0.6 +460.3 8.0 1.9 +333.1 6.5 More winter tyres = higher Capex * as of 23 March 2011, guidance for FY10 9M performance according to plan 5
Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook 6
Tyres and the Internet PC & LT Replacement Tyres Europe: > 10 billion EE+CE 60 SA 52 Rest 21 NA 255 other 69 DE 59 Germany: very good 2010, uncertain outlook for 2011 60 50 40 +10.1% +3.3% 12.7% 1.3% 0.0% WE 220 in million tyres World Asia 239 ES 15 Source: Datamonitor, Continental, Michelin, own estimates IT 24 Western Europe FR 26 UK 27 30 20 in million tyres 10 0 99 2000 01 02 03 04 05 06 07 08 09 10 11* Source: BRV (car replacement tyres) * estimates as of March 2011 Europeans are increasingly online... adults online in % of total 34 46 76 60 77 76 72 44 82 Desk Research GfK Austria, January 2011 54 77 57 86... and buy their tyres online. 35% think 30% about buying online (ADAC, 18-39) 25% think about buying online (ADAC, all) 20% 15% bought tyres on the Internet (ADAC, 18-39) 10% bought tyres on the Internet (BRV,GFK) 5% bought tyres on the Internet (ADAC all) 0% 30.8% 29.6% 27.8% 15.8% 16.5% 15.0% 6.4% 9.2% 3.2% 4.0% 7.9% 4.8% 4.8% 3.7% 99 2000 01 02 03 04 05 06 07 08 09 10 11* Source: ADAC (new methodology vs. 2009), BRV, GFK 7
Redesign of the Tyre Distribution Chain Traditional Retail Delticom Redesign 8
Key Benefits for Our Partners Customers Fitting Partners Suppliers save time and money select from broad product offering fast delivery, even at peak times large network of service partners pre-/after sale services customer generation, free of charge no restrictions on fitting prices might offer other services (e.g. stock tyres until next changeover) customers review quality of fitting service favourable B2B offers Europe s leader in the online channel, strong growth, high volumes strong balance sheet, low credit risk efficient warehouse systems and processes for large and growing quantities versatile database (supply and demand, volumes and prices), supports consistent planning improved customer value well connected attractive partnership 9
Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook 10
Customers in thousands 2009 2010 2011 New Customers 3%...still the main growth driver 79 125 102 147 114 152 130 180 133 165 140 146 231 169 259 188 248 189 333 181 230 183 Repeat Customers +8%...long replacement cycle and customers are happy Ratio Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3... repeat customers (slowly) Repeat customers constitute important growth potential 11
Quarterly Revenues in million 2009 2010 2011 175 +48% 175 150 150 125 100 75 50 +20% +12% +16% +31% +46% +17% +28% +15% +10% +25% 125 100 75 50 25 0 51.0 88.1 62.4 109.7 74.5 102.9 79.7 162.6 85.4 112.9 99.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 25 0 Fluctuations in growth rates: seasons, weather, base effects, strategy 12
Quarterly Gross/EBIT Margins Gross Margin (simple) EBIT Margin 2009 2010 2011 30% 25% 20% 2.1 26.0% 2.4 26.4% 1.9 27.8% 2.2 28.8% 0.3 25.7% 1.6 28.0% 0.4 27.4% 1.8 30.6% 0.3 25.9% 0.3 27.7% 1.6 25.8% 30% 25% 20% 15% 10% 5% 0% 1.8 4.4 2.4 0.3 1.7 2.2 1.0 0.6 2.0 0.2 4.0 5.2% 8.6% 7.3% 13.4% 7.2% 11.0% 7.9% 15.2% 7.0% 11.3% 9.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 15% 10% 5% 0% More tyres, better prices 13
Quarterly EBIT in million 25 2009 2010 2011 +69% 25 20 20 15 10 5 +419% +49% +34% +96% +102% +49% +38% +11% +13% +51% 15 10 5 0 2.6 7.5 4.5 14.7 5.3 11.3 6.3 24.8 5.9 12.8 9.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 0 Step-up from strong 9M10 base 14
P&L Drivers (Q3) EUR yoy % of Revenues Q311 Q310 % Q311 Q310 chng Revenues 99.4 79.7 24.7 100.0 100.0 0.0 Cost of sales 73.7 57.8 27.4 74.2 72.6 1.6 Gross Profit (ex ooi) 25.7 21.8 17.6 25.8 27.4 1.6 Direct costs 13.1 10.9 20.5 13.2 13.7 0.5 Direct costs (dep. on volume) 10.4 8.3 25.6 10.4 10.4 0.1 Transportation costs 8.0 6.5 22.7 8.0 8.2 0.1 Warehousing costs 1.1 0.8 33.6 1.1 1.1 0.1 Operations centre costs 1.3 0.9 38.8 1.3 1.1 0.1 Direct costs (dep. on revenues) 2.8 2.6 4.8 2.8 3.3 0.5 Credit card fees 0.7 0.6 28.3 0.7 0.7 0.0 Bad debt losses 0.1 0.3 57.8 0.1 0.4 0.3 Marketing costs 1.9 1.7 9.2 1.9 2.2 0.3 Contribution margin 1 12.5 10.9 14.6 12.6 13.7 1.1 Indirect costs 4.0 3.2 24.7 4.0 4.0 0.0 Personnel expenses 1.7 1.6 10.7 1.7 1.9 0.2 Rents and overheads 1.3 0.9 41.2 1.3 1.1 0.1 Financial and legal costs 0.6 0.3 75.7 0.6 0.4 0.2 IT and telecommunications 0.2 0.2 12.9 0.2 0.2 0.0 Other 0.3 0.3 2.4 0.3 0.4 0.1 Contribution margin 2 8.5 7.7 10.4 8.6 9.7 1.1 FX effects 1.1 1.5 1.1 1.8 2.9 Other operating profit (w/o FX gains) 0.5 0.4 0.5 0.5 0.1 EBITDA 10.1 6.6 53.0 10.2 8.3 1.9 Depreciation / Amortization 0.6 0.3 82.2 0.6 0.4 0.2 EBIT 9.5 6.3 51.5 9.5 7.9 1.7 Net financial result 0.1 0.0 733.5 EBT 9.4 6.3 50.0 9.5 7.9 1.6 Income taxes 3.2 2.2 42.6 Consolidated net income 6.3 4.1 54.1 6.3 5.1 1.2 attractive prices more tyres from own warehouses wages E-Commerce momentum new warehouse In line with gross profit driven by positive FX effects 15
P&L Drivers (9M) EUR yoy % of Revenues 9M11 9M10 % 9M11 9M10 chng Revenues 297.7 257.0 15.8 100.0 100.0 0.0 Cost of sales 218.6 187.3 16.7 73.4 72.9 0.6 Gross Profit (ex ooi) 79.1 69.7 13.4 26.6 27.1 0.6 Direct costs 40.0 36.2 10.6 13.4 14.1 0.6 Direct costs (dep. on volume) 31.1 27.9 11.4 10.4 10.9 0.4 Transportation costs 24.2 22.4 8.2 8.1 8.7 0.6 Warehousing costs 3.3 2.8 18.2 1.1 1.1 0.0 Operations centre costs 3.6 2.8 30.6 1.2 1.1 0.1 Direct costs (dep. on revenues) 8.9 8.3 8.0 3.0 3.2 0.2 Credit card fees 2.3 1.8 28.7 0.8 0.7 0.1 Bad debt losses 0.8 1.1 33.9 0.3 0.4 0.2 Marketing costs 5.8 5.3 9.9 2.0 2.1 0.1 Contribution margin 1 39.0 33.6 16.3 13.1 13.1 0.1 Indirect costs 11.5 10.1 13.4 3.8 3.9 0.1 Personnel expenses 5.2 4.7 9.8 1.7 1.8 0.1 Rents and overheads 3.1 2.5 24.3 1.1 1.0 0.1 Financial and legal costs 1.6 1.4 8.9 0.5 0.6 0.0 IT and telecommunications 0.5 0.5 9.1 0.2 0.2 0.0 Other 1.0 0.9 11.6 0.3 0.4 0.0 Contribution margin 2 27.6 23.5 17.6 9.3 9.1 0.1 FX effects 0.7 0.7 0.2 0.3 0.5 Other operating profit (w/o FX gains) 1.4 1.1 0.5 0.4 0.0 EBITDA 29.6 23.8 24.4 10.0 9.3 0.7 Depreciation / Amortization 1.4 0.9 51.1 0.5 0.4 0.1 EBIT 28.2 22.9 23.3 9.5 8.9 0.6 Net financial result 0.0 0.1 88.7 EBT 28.2 22.9 23.0 9.5 8.9 0.6 Income taxes 9.2 7.6 21.2 Consolidated net income 19.0 15.3 23.9 6.4 6.0 0.4 outlook: costs outlook: costs outlook: used warehouse capacity In line with revenues growth FX swings expected to wash out low but increasing capital intensity low liquidity, low/no interest rates 16
Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook 17
Working Capital Management 2009 2010 2011 Accounts receivable 2.1 1.1 1.6 0.4 3.2 2.2 0.5 5.5 6.2 31.4 10.6 0.8 4.2 1.1 2.1 4.3 6.2 24.0 22.2 20.4 1.9 3.1 6.1 10.9 13.1 17.7 5.8 0.9 5.8 15.4 3.4 2.7 5.1... follow the seasonal peaks. Inventories 5.4 5.7 8.4 16.6 12.3 4.8 19.7 19.6... significant increase... Accounts payable 13.7 24.3 26.7... funded w/ AP and credit lines Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Working Capital... swings are getting more pronounced quarterly delta in million 18
Liquidity Bridge (ttm) in million 90 80 52.9 1.8 1.7 46.5 90 80 70 36.6 0.1 17.4 70 60 60 50 9.6 50 40 9.3 0.1 0.8 32.2 40 30 24.3 30 20 10.0 0.1 11.7 20 10 10 0 0 Liquidity 30.09.10 EBIT Depreciation other Provisions Inventories Receivables Payables Interest Taxes Propery, Plant and Equipment Intangible Assets Securities etc. Dividend Payments Other financing FX Translation Liquidity 30.09.11 Net cash = 1.8 million 19
Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook 20
Outlook Current trading in Q4: good start into the winter tyre season higher demand in winter tyres across Europe (including GB, BE, NL,...) Market for replacement tyres Germany: 2011 est (BRV, as of March 2011): summer ±0%, winter ±0% 2011 top- and bottom line drivers: shortages (possibly Q4) new central warehouse (Q3 onwards) Q4 volume up, at lower margins (needs normal winter weather) Other factors: seasonal effects customers are trading down Delticom is international Delticom is online Revenues FY11: +10% yoy EBIT-Margin FY11: 1%p yoy summer/winter tyres online channel gains importance diversified country portfolio good prices, good sales, good margins 21
Summary 1 #1 European online tyre retailer 2 Resilient and profitable business model 3 Strong cash flow, strong balance sheet 4 Redesign of the tyre distribution chain 5 Excellent growth opportunities Investor Relations: Melanie Gereke Delticom AG Brühlstr. 11 30169 Hanover, Germany email: gereke@delti.com phone: +49-511-93634-8903 22