a firm grip. · 2008-05-14 · investor presentation hanover, 14th may 2008 at a glance business...
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Hanover, 14th May 2008
Investor and Analyst Presentationon the Occasion of the Release of the
3-Monthly Report 2008
A Firm Grip.A Firm Grip.A Firm Grip.A Firm Grip.
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Investor Presentation
Hanover, 14th May 2008 2
Delticom Q1 08 at a Glance
Business Model
Seasonalities in Tyre Trading
Financials
Key Investment Highlights
AgendaAgendaAgendaAgenda
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 3
AgendaAgendaAgendaAgenda
Delticom Q1 08 at a GlanceDelticom Q1 08 at a GlanceDelticom Q1 08 at a GlanceDelticom Q1 08 at a Glance
Business Model
Seasonalities in Tyre Trading
Financials
Key Investment Highlights
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 4
� Business model: Sale of car and motorcycle tyres over the Internet
� More than 2 million customers
� 92 online shops in 32 countries, operating on established web domains
with high awareness
� Broad product range with more than 100 tyre brands and 25,000 tyre
models
� Global network with more than 21,500 service partners (fitting stations),
e.g.
� Customer benefits: Top quality tyres at low prices can be ordered 24 / 7,
high transparency thanks to comprehensive offering, short lead times
(1-4 working days), not location-dependent, free test results, service and
advice from call center.
Delticom ProfileDelticom ProfileDelticom ProfileDelticom Profile
Delticom is Europe‘s leading Internet tyre retailer►
as of 13th May
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 5
Delticom Q1 08 at a GlanceDelticom Q1 08 at a GlanceDelticom Q1 08 at a GlanceDelticom Q1 08 at a Glance
Revenues € 42.6 million
(+ 9.4 % yoy) ►
eCommerce + 11 % yoy
in non-domestic markets►
EBIT: € 0.5 million
(Q1 07: € 0.3 million)►
Market share in Europe
is > 1.7 %►
►Dividend: 2.00 €
(+ 67 % yoy)
Excellent Growth Opportunities
Sustainable and Profitable Business Model
Redesign of the Tyre Distribution Chain
Operational Excellence at Low Costs
International Growth Story
1111
2222
3333
4444
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 6
AgendaAgendaAgendaAgenda
Delticom Q1 08 at a Glance
Business ModelBusiness ModelBusiness ModelBusiness Model
Seasonalities in Tyre Trading
Financials
Key Investment Highlights
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 7
Delticom is European Market LeaderDelticom is European Market LeaderDelticom is European Market LeaderDelticom is European Market Leader
92 online-shops in 32 countries►
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 8
InternetInternetInternetInternet
Internet penetration is long-term driver of Delticom sales►
Internet penetrationInternet penetrationInternet penetrationInternet penetration Delticom service partnersDelticom service partnersDelticom service partnersDelticom service partners
Source: GfK desk research Austria, October 2007
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 9
TyresTyresTyresTyres
Big, mature market – Internet is a growing sales channel►
� Relevant: Passenger Car Tyre Replacement Market
� Europe € 10-12 billion / year
� USA € 12-15 billion / year
� Market share online 2007 (Germany) was 4% (2006: 3%)
� EuPD Research: proportion of German online retailers active in the
„car and accessories“ segment only 2.8%
� „ADAC Reifenmonitor 2008“
� 3.1% have bought their last set of tyres via the Internet (2007: 2.5%,
2006: 1.8%)
� 18-29 bracket: 6.1% (2007: 4.8%, 2006: 3.3%)
� 15.6% indicated interest to buy online in the future (2007: 15%, 2006: 14%)
� 18-29 bracket: 28.1%
According to BRV (Association of German Tyre dealers)
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 10
DivisionsDivisionsDivisionsDivisions
eCommerceeCommerceeCommerceeCommerce
(since 2000)(since 2000)(since 2000)(since 2000)
WholesaleWholesaleWholesaleWholesale
(since 1999)(since 1999)(since 1999)(since 1999)
Online shops (B2C / B2B)
Partners
(wholesale, outsourcing, logistics)
Software solutions
Knowledge about markets and prices
High volumes
Entry in new countries
SynergiesSynergiesSynergiesSynergies
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 11
Redesign of the Tyre Distribution ChainRedesign of the Tyre Distribution ChainRedesign of the Tyre Distribution ChainRedesign of the Tyre Distribution Chain
European Tyre
Manufacturers
Non-European Tyre
Manufacturers
European Tyre
Manufacturers
Non-European Tyre
Manufacturers
WholesalersDelticom European
Distribution Centers
Wholesalers
Retailers
Small Garages
Customers
Garages
B2C Customers
PrePrePrePre----DelticomDelticomDelticomDelticom Delticom RedesignDelticom RedesignDelticom RedesignDelticom Redesign►
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 12
StrategyStrategyStrategyStrategy
Incremental improvements mitigate execution risks►
Customer OrientationCustomer OrientationCustomer OrientationCustomer Orientation
� Secure sufficient supplySecure sufficient supplySecure sufficient supplySecure sufficient supply in
peak times through closer
co-operations with suppliers
and inventory management
Cost LeadershipCost LeadershipCost LeadershipCost Leadership
� Lower purchase prices Lower purchase prices Lower purchase prices Lower purchase prices
through increased purchase
volume and early ordering
� Pooling of EU transport
volumes to reduce transreduce transreduce transreduce trans----
portation costsportation costsportation costsportation costs
� Keep operations lean
through attention to further
outsourcing potential outsourcing potential outsourcing potential outsourcing potential and
continued automationautomationautomationautomation
Growth FocusGrowth FocusGrowth FocusGrowth Focus
� Utilize firstfirstfirstfirst----mover advantage mover advantage mover advantage mover advantage
through fast geographic
expansion into new markets
� Establish new shopsnew shopsnew shopsnew shops in
existing markets in Europe
� Attract new customers by
increased marketing effortsincreased marketing effortsincreased marketing effortsincreased marketing efforts
� Exploit customer value Exploit customer value Exploit customer value Exploit customer value
through cross-selling and
repeat purchases
� Improve customer value: Improve customer value: Improve customer value: Improve customer value:
� Time and money saving
purchase process
� Broader product offering
� Larger network of
service partners
� customer services
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 13
AgendaAgendaAgendaAgenda
Delticom Q1 08 at a Glance
Business Model
Seasonalities in Tyre TradingSeasonalities in Tyre TradingSeasonalities in Tyre TradingSeasonalities in Tyre Trading
Financials
Key Investment Highlights
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 14
Historic German Tyre SalesHistoric German Tyre SalesHistoric German Tyre SalesHistoric German Tyre Sales
No apparent effects of economic cycles►
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 15
Q1 SituationQ1 SituationQ1 SituationQ1 Situation
� Recap: German tyre sales 2007
� passenger car tyres total: 41.5 million (2006: 47,4 million) … –12%
� winter tyres: 20.4 million (2006: 24.7 million) … –17%
� Industry sources:
� some tyre dealers face a demanding supply situation after mild winter 2007
� Q1 reporting of international manufacturers show a yoy decrease in sell-in
� manufacturers cite increases in raw material costs and energy prices as a reason for
announced price increases in selected markets
� Forecast German tyre sales 2008:
� passenger car tyres total +1%
� slight decrease for summer tyres, ~ 600.000 more winter tyres than in 2007
� Delticom growth not unaffected, but other factors are at least as important:
� ongoing internationalization
� strong eCommerce growth
� base effects
Delticom grew despite negative market trends►
According to BRV (Association of German Tyre dealers)
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 16
Quarterly RevenuesQuarterly RevenuesQuarterly RevenuesQuarterly Revenues
Fluctuations in growth rates due to seasons and base effects►
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 17
AgendaAgendaAgendaAgenda
Delticom Q1 08 at a Glance
Business Model
Seasonalities in Tyre Trading
FinancialsFinancialsFinancialsFinancials
Key Investment Highlights
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 18
NonNonNonNon----Domestic Markets are ImportantDomestic Markets are ImportantDomestic Markets are ImportantDomestic Markets are Important
Delticom is an international tyre retailer►
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 19
EBIT DriversEBIT DriversEBIT DriversEBIT Drivers
► Delticom operations prepared for 2008
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 20
Working Capital ManagementWorking Capital ManagementWorking Capital ManagementWorking Capital Management
► Changes in working capital reflect seasonal patterns
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 21
Customer MetricsCustomer MetricsCustomer MetricsCustomer Metrics
Repurchases constitute important growth potential►
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 22
Outlook Q2 08 and FY 2008Outlook Q2 08 and FY 2008Outlook Q2 08 and FY 2008Outlook Q2 08 and FY 2008
� Note: Q1 constitutes only a small part of FY sales and EBIT
� Summer season started late in 2008 due to cold weather in March
(not only in Germany but also Scandinavia)
� Marketing costs were low in Q1 due to late start of season
� April sales in line with warmer weather
� Outsourcing costs will continue to show relatively large yoy increases
� US business on track (albeit still small compared to group sales)
– currently no read flags
� Revenues 2008: € 240m – € 260m
� EBIT-Margin 2008: 5.0% – 6.0%
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 23
Medium Term Outlook on Sales and MarginsMedium Term Outlook on Sales and MarginsMedium Term Outlook on Sales and MarginsMedium Term Outlook on Sales and Margins
... Large underlying European replacement tyre market Large underlying European replacement tyre market Large underlying European replacement tyre market Large underlying European replacement tyre market
... Cost degression effects Cost degression effects Cost degression effects Cost degression effects
... Currently low tyre onlineonlineonlineonline penetrationpenetrationpenetrationpenetration rate in Europe,
Delticom’s market share only 1.7%
... Growth from increasingincreasingincreasingincreasing penetrationpenetrationpenetrationpenetration of existing and
new geographies
... Favorable changes in product mix changes in product mix changes in product mix changes in product mix and lower purchase lower purchase lower purchase lower purchase
prices prices prices prices
... Ongoing operating cost reductions operating cost reductions operating cost reductions operating cost reductions
Good operating margin Good operating margin Good operating margin Good operating margin
developmentdevelopmentdevelopmentdevelopment
can be expected due to…
Continued sales growthContinued sales growthContinued sales growthContinued sales growth
can be expected due to…
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 24
AgendaAgendaAgendaAgenda
Delticom Q1 08 at a Glance
Business Model
Seasonalities in Tyre Trading
Financials
Key Investment HighlightsKey Investment HighlightsKey Investment HighlightsKey Investment Highlights
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 25
Key Investment HighlightsKey Investment HighlightsKey Investment HighlightsKey Investment Highlights
Redesign of the Tyre Distribution Chain
Sustainable and Profitable Business Model
Operational Excellence at Low Costs
International Growth Story
Excellent Growth Opportunities
1111
2222
3333
4444
5555
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Investor Presentation
Hanover, 14th May 2008At a glance Business Model Seasonalities Financials Highlights 26
Vielen Dank!Vielen Dank!Vielen Dank!Vielen Dank!
Investor Relations:
Melanie GerekeDelticom AGBrühlstr. 1130169 Hanover, Germany
eMail: [email protected]: +49-511-93634-8903
Rainer BinderCEO
Frank SchuhardteCommerce and Finance
Philip v. GrolmanLogistics and USA