investor und analyst presentation annual report 2010...investor and analyst presentation on the...

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Investor and Analyst PresentationOn the Occasion of the Release of the Annual Report 2010

Hanover, 23 March 2011

Investor Presentation FY 2010

Hanover, 23 March 2011 2

Agenda

Delticom at a Glance

Business Model

Profit & Loss

Balance Sheet

Outlook


Hanover, 23 March 2011At a glance Business Model Profit & Loss Balance Sheet Outlook 3

Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook




DE 7803 US 2232 UK 1798 FR 3165 CH 1355

� #1 European online tyre dealer

� > 100 online shops in 39 countries

� founded 1999, IPO Oct 2006, SDAX Dec 2008

� 2010 almost one million new customers

� customer base: 4.4 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

� 101 employees, mainly in the Hanover head office

� global network with more than 27,000 fitting partners, e.g.


Hanover, 23 March 2011At a glance Business Model Profit & Loss Balance Sheet Outlook

Jan 07 Jan 08 Jan 09 Jan 10

UK

Frankreich

Benelux

Deutschland

Jan 07 Jan 08 Jan 09 Jan 10

5

One-Off Effects Q4 10

Source: Google Inc., Google News Archivesearch

Source: Google Inc., Google Search Volume

German winter tyre regulation

issues make the news...

... and winter brings much

snow in other countries, too

► Positive volume and price effects



Key Financials 2010

►

Q410 Q409 yoy % FY10 FY09 yoy % guidance

New Customers k 333 259 +28,4 958 805 +18,9 Still strong customer generation...

Customer Base m 4,4 3,4 +27,9 ... and more repeat customers

Revenues €m 162,6 109,7 +48,2 419,6 311,3 +34,8 > 30% Good volume growth...

Gross Margin % 31,5 30,4 +1,1p 29,7 28,8 +0,9p ... at better margins

Ebit Margin % 15,0 13,4 +1,6p 11,2 9,4 +1,8p ~ 11% Mainly driven by gross margin growth

Ebit m 24,3 14,7 +65,6 47,1 29,4 +60,1 Financial result is negligible

Capex m 1,7 0,4 +297,5 3,5 3,6 –2,4 New warehouse planned Q211

Very good FY, extraordinary Q4



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook



+10.1%

+3.3%–1.3%–12.7%

0.0%

0

10

20

30

40

50

60

99 2000 01 02 03 04 05 06 07 08 09 10 11*

3.2% 4.0%

7.9%

3.7%

9.2%

6.4%

15.8%15.0%

16.5%

30.8%29.6%

27.8%

4.8% 4.8%

0%

5%

10%

15%

20%

25%

30%

35%

99 2000 01 02 03 04 05 06 07 08 09 10 11*

7777

54

72

46

86

60

76

44

76

57

82

34

8

Tyres and the Internet

Source: Datamonitor, Continental, Michelin, own estimates

PC & LT Replacement Tyres Europe: > € 10 billion

Europeans are increasingly online...

in million tyres

... and buy their tyres online.

Source: BRV (car replacement tyres) * estimates as of March 2011

in million tyres

Germany: very good 2010, uncertain outlook for 2011

think about buying online (ADAC, 18-39)

think about buying online (ADAC, all)

bought tyres on the Internet (ADAC, 18-39)

bought tyres on the Internet (BRV,GFK)

Source: ADAC (new methodology vs. 2009), BRV, GFK

WesternWesternWesternWestern

EuropeEuropeEuropeEurope

ES

15IT

24

FR

26

DE

59

UK

27

other

69

WorldWorldWorldWorld

Rest

21

Asia

239

NA

255

WE 220

EE+CE

60

SA

52

bought tyres on the Internet (ADAC all)

Desk Research GfK Austria, January 2011

adults online in

% of total



Redesign of the Tyre Distribution Chain

Traditional Retail Delticom Redesign►



Key Benefits for Our Partners

Customers

� 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

Fitting Partners Suppliers

► improved customer value ► well connected ► attractive partnership



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook



Repeat customers constitute important growth potential►

180

130

152

114

147

102

125

79

110

76

98

61

333

189

248

188

259

169

231

146

210

143

218

123

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2008 2009 2010

+29%

+22%

New Customers

Repeat Customers

Ratio

...still the main growth driver

... long replacement cycle

and customers are happy

... repeat customers � (slowly)

in thousands

Customers



Quarterly Revenues

Fluctuations in growth rates: seasons, weather, base effects, strategy►

in € million

162,6

109,7

62,4

88,1

74,5

42,6

51,0

78,9

53,7

83,8

102,9

79,7

+48%

+17%

+46%

+31%

+16%

+12%

+20%

+21%

+22%

+25%

+9%

+28%

2008 2009 2010

0

25

50

75

100

125

150

175

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

0

25

50

75

100

125

150

175



Quarterly Gross/EBIT Margins

Raw material price increases fed through into purchasing prices + shortage premiums►

15,0%

7,5%

10,6%

7,9%

13,4%

7,3%

8,6%

5,2%

9,0%

6,3%

6,4%

1,2%

0%

30%

25%

20%

15%

10%

5%

30,3%

27,1%

27,6%

26,4%

28,8%

27,8%

26,4%

26,0%

26,6%

25,9%

24,0%

23,9%

2008 2009 2010

30%

25%

20%

15%

10%

5%

0%

1,5

–0,71,20,4

2,21,9

2,42,1

1,6

0,3

2,0

2,7

4,4

1,02,2

4,0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Gross Margin (simple)

EBIT Margin



Quarterly EBIT

► Unusually high Q4 EBIT(s)

6,0

4,5

7,5

2,6

14,7

7,5

0,5

5,1

3,4

5,9 10,9

24,3

0

25

20

15

10

5

+66%

+44%

+122%

+96%

+34%

+49%

+419%

+39%

+134%

–3%

N/A

+33%

2008 2009 2010

25

20

15

10

5

0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

in € million



P&L Drivers (Q4)

� strong volume and positive price effects

� E-Commerce momentum �

� revenues growth masks capacity �

� tyre price increases

� good sales from own warehouses

� front-/backoffice automation �

16

Q410 Q409 % Q410 Q409 chng

Revenues 162,6 109,7 48,2 100,0 100,0 0,0

Cost of sales 113,3 78,1 45,1 69,7 71,2 –1,5

Gross Profit (simple) 49,3 31,6 56,1 30,3 28,8 1,5

Direct costs 20,4 20,4 20,4 20,4 14,0 14,0 14,0 14,0 45,445,445,445,4 12,612,612,612,6 12,812,812,812,8 –0,2

Direct costs (dep. on sales) 15,0 10,9 37,8 9,2 9,9 –0,7

Transportation costs 12,2 8,9 37,3 7,5 8,1 –0,6

Warehousing costs 1,7 1,1 59,2 1,1 1,0 0,1

Operations centre costs 1,1 0,9 17,1 0,7 0,8 –0,2

Direct costs (dep. on revenues) 5,4 3,2 71,6 3,3 2,9 0,5

Credit card fees 1,3 0,7 92,2 0,8 0,6 0,2

Bad debt losses 0,5 0,1 284,9 0,3 0,1 0,2

Marketing costs 3,6 2,4 54,0 2,2 2,2 0,1

Contribution margin 1 28,9 17,6 64,6 17,8 16,0 1,8

Indirect costs 4,8 3,6 33,8 3,0 3,3 –0,3

Personnel expenses 2,1 1,7 24,9 1,3 1,5 –0,2

Rents and overheads 1,0 0,9 5,8 0,6 0,8 –0,2

Financial and legal costs 1,3 0,5 182,2 0,8 0,4 0,4

IT and telecommunications 0,2 0,2 –8,1 0,1 0,2 –0,1

Other 0,3 0,4 –21,3 0,2 0,3 –0,2


FX effects 0,0 0,1 0,0 0,1 0,0

Other operating profit (w/o FX gains) 0,6 1,1 0,4 1,0 –0,7

EBITDA 24,7 15,1 62,9 15,2 13,8 1,4

Depreciation / Amortization 0,3 0,5 –24,3 0,2 0,4 –0,2

EBIT 24,3 14,7 65,6 15,0 13,4 1,6

Net financial result 0,0 0,0 –315,3

EBT 24,4 14,7 66,2 15,0 13,4 1,6

Income taxes 7,4 4,5 64,7

Consolidated net income 17,0 10,2 66,9 10,5 9,3 1,2

EUR yoy % of Revenues



P&L Drivers (FY)

� outlook: costs �

� low but increasing capital intensity

� debt-free, net cash, low/no interest rates

� outlook: warehouse capacity �

� outlook: costs �

17

FY10 FY09 % FY10 FY09 chng

Revenues 419,6 311,3 34,8 100,0 100,0 0,0

Cost of sales 300,7 225,8 33,2 71,7 72,5 –0,9

Gross Profit (simple) 118,9 85,5 39,1 28,3 27,5 0,9

Direct costs 56,6 56,6 56,6 56,6 44,9 44,9 44,9 44,9 26,026,026,026,0 13,513,513,513,5 14,414,414,414,4 –0,9

Direct costs (dep. on sales) 42,9 33,6 27,8 10,2 10,8 –0,6

Transportation costs 34,5 26,8 28,8 8,2 8,6 –0,4

Warehousing costs 4,5 3,2 41,3 1,1 1,0 0,0

Operations centre costs 3,8 3,6 8,0 0,9 1,1 –0,2

Direct costs (dep. on revenues) 13,7 11,4 20,5 3,3 3,7 –0,4

Credit card fees 3,1 2,1 46,2 0,7 0,7 0,1

Bad debt losses 1,6 1,6 5,6 0,4 0,5 –0,1

Marketing costs 9,0 7,7 16,4 2,1 2,5 –0,3


Indirect costs 14,9 11,6 28,2 3,6 3,7 –0,2

Personnel expenses 6,8 5,8 17,3 1,6 1,9 –0,2

Rents and overheads 3,5 2,2 57,7 0,8 0,7 0,1

Financial and legal costs 2,8 1,8 51,0 0,7 0,6 0,1

IT and telecommunications 0,7 0,6 14,5 0,2 0,2 0,0

Other 1,2 1,2 –0,9 0,3 0,4 –0,1


FX effects –0,7 –0,4 –0,2 –0,1 0,0

Other operating profit (w/o FX gains) 1,7 2,0 0,4 0,6 –0,2

EBITDA 48,4 30,4 58,9 11,5 9,8 1,7

Depreciation / Amortization 1,3 1,0 24,8 0,3 0,3 0,0

EBIT 47,1 29,4 60,1 11,2 9,4 1,8

Net financial result 0,1 0,2 –37,6

EBT 47,2 29,6 59,5 11,2 9,5 1,7

Income taxes 14,9 9,3 59,7

Consolidated net income 32,3 20,2 59,4 7,7 6,5 1,2

EUR yoy % of Revenues

� FX swings wash out

� Q4 boosted yoy growth



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook



9,0

–15,5

9,2

–6,1

10,6

0,8

–4,2 –1,1

2,7 3,9 5,9

–24,4

–4,3

15,9

–4,0

–3,5

–3,1

6,1

10,9

–13,1

17,7

5,8

–0,9

–5,8

4,5

0,5 3,0

–6,5

5,4

5,7 8,4

–13,7

17,1

11,9

4,5

–24,7

0,1

–0,1

2,2

–3,2

2,1

1,1

–1,6

–0,4

3,2

–2,2 0,5

–5,5

2008 2009 2010

Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

quarterly delta in € million

Accounts receivable

Inventories

Accounts payable

Working Capital

... follow the seasonal peaks.

... strong increase ...

... funded w/ AP

... fewer swings

Working Capital Management

19



Liquidity Bridge (ttm)

100% dividend payout – Delticom remains self-financed►

in € million

40,6

47,1 1,3 1,6 –8,8

–3,1

25,7 0,1 –12,1

–3,4–0,1 –0,8 –20,1

0,0 0,0 67,8

0

20

40

60

80

100

120

Liquidity

31.12.09

EBIT

Depreciation

other

Provisions

Inventories

Receivables

Payables

Interest

Taxes

Propery, Plant

and Equipment

Intangible

Assets

Securities etc.

Dividend

Payments

Other

financing

FX Translation

Liquidity

31.12.10

0

20

40

60

80

100

120



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook



Outlook

� Current trading in Q1:

� difficult comps

� price increases in the first weeks

� Japan has increased volatility of natural rubber and oil prices

� Market for replacement tyres

� Germany: 2011 est (BRV, as of March 2011): summer ±0%, winter ±0% (?)

� shortages likely for summer season

� experts still undecided about impact of Japan on the European tyre trade

� 2011 top- and bottom line drivers: negative base effects (Q4) after 3 good winters in a row.

� Other factors:

� seasonal effects � winter tyres

� customers are trading down � online channel gains importance

� Delticom is international � diversified country portfolio

� Delticom is online � good prices, good sales, good margins

� Revenues FY11: ~ +10% yoy

� EBIT-Margin FY11: –1%p yoy


Hanover, 23 March 2011 23

Summary

#1 European online tyre retailer

Excellent growth opportunities

Strong cash flow, strong balance sheet

Resilient and profitable business model

Redesign of the tyre distribution chain

1111

2222

3333

4444

5555

Investor Relations:

Melanie Gereke

Delticom AG

Brühlstr. 11

30169 Hanover, Germany

eMail: [email protected]

phone: +49-511-93634-8903

investor und analyst presentation annual report 2010...investor and analyst presentation on the...

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