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On track.

Investor and Analyst PresentationOn the Occasion of the Release of the Preliminary Figures for H1 2012Hanover, 19 July 2012

Preliminary H1 Figures

Hanover, 19 July 2012 2

Agenda

Delticom at a Glance

Business Model

Profit & Loss

Balance Sheet

Outlook


Hanover, 19 July 2012At a glance Business Model Profit & Loss Balance Sheet Outlook 3

Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook




DE 8386 US 2419 UK 2006 FR 4049 CH 1661

� #1 European online tyre dealer

� > 100 online shops in 41 countries

� founded 1999, IPO Oct 2006, SDAX Dec 2008

� customer base: more than 5.6 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

� 142 employees, mainly in the Hanover head office

� global network with more than 30,000 fitting partners, e.g.



Key Financials H1

► H1 performance below plan

Q2 12 Q2 11 yoy % H1 12 H1 11 yoy % guidance*

Revenues € m 107.8 112.9 –4.6 193.3 198.3 –2.5 5 % weak summer tyre business

Gross Margin % 26.9 27.7 –0.7p 26.4 26.9 –0.5p pricing pressure

EBIT-Margin % 9.1 11.3 –2.2p 6.9 9.4 –2.6p low-volume quarter

EBIT € m 9.8 12.8 –23.1 13.2 18.7 –29.2 9 % expenses wrt new warehouse

Inventories € m 135.1 103.3 +30.7 faster stocking of winter tyres...

Cash Flow € m –0.5 –30.2 ...mainly funded with payables

Capex € m 0.3 2.7 –90.3 0.4 4.5 –91.8 bulk already accrued in FY 11

Liquidity € m 7.7 6.2 +24.5 dividend sum ~ 35 m @ 02.05.

* as of 18 July 2012, guidance for FY 12



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook


Hanover, 19 July 2012At a glance Business Model Profit & Loss Balance Sheet Outlook

–4.9%+10.1%

+3.3%–1.3%

+2.4%

0

10

20

30

40

50

60

2000 01 02 03 04 05 06 07 08 09 10 11 12*

3.2% 4.0%

7.9%

3.7%

9.2%

6.4%

19.2%

15.8%15.0%

16.5%

31.0%30.8%29.6%

27.8%

5.8%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

7879

57

73

57

86

60

78

50

95

61

88

57

7

Tyres and the Internet

Source: Datamonitor, Continental, Michelin, own estimates

PC & LT Replacement Tyres Europe: > € 12 billion

Europeans are increasingly online...

in million tyres

... and buy their tyres online.

Source: BRV (car replacement tyres) * estimates as of March 2012

in million tyres

Germany: sluggish 2011, outlook slightly better for 2012

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 in 2011), 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 2012

adults online in

% of total

DEPRECATED

DEPRECATED

DEPRECATED

DEPRECATED



Redesign of the Tyre Distribution Chain

Traditional Retail Delticom Redesign►



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook



Repeat customers constitute important growth potential►

New Customers

Repeat Customers

Ratio

...still the main growth driver

... long replacement cycle

and customers are happy

... repeat customers �

in thousands

Customers

16

4

14

3

19

9

14

0

16

5

13

3

18

0

13

0

15

2

11

4

19

7

16

4

32

8

18

3

23

0

18

1

33

3

18

9

24

8

18

8

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2010 2011 2012

–14 %

–1 %



Quarterly Revenues

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

in € million

10

7.8

16

2.6

79

.7

10

2.9

85

.4

74

.5

85

.5

11

2.9

99

.4

18

2.3

+46 %

+17 %

+28 %

+48 %

+15 %

+10 %

+25 %

+12 %

+0 %

–5 %

2010 2011 2012

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

Pricing discipline in a troubled market, more drop-ship►

9.1

%

4.0

%

13

.6 %

9.5

%

11

.3 %

7.0

%

15

.2 %

7.9

%

11

.0 %

7.2

%

0%

30%

25%

20%

15%

10%

5%

26

.9 %

25

.8 %28

.8 %

25

.8 %

27

.7 %

25

.9 %

30

.6 %

27

.4 %

28

.0 %

25

.7 %

2010 2011 2012

30%

25%

20%

15%

10%

5%

0%

–0.7–0.1

–1.8

–1.6

–0.3

0.3

1.8

–0.41.6

–0.3

–2.2

–2.9

–1.6

1.7

0.3

–0.2

1.8

0.6

2.4

2.0

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

Gross Margin

EBIT Margin



Quarterly EBIT

► Low volume and insourced warehouse related costs

9.8

3.46.3

11

.3

5.3

24

.8

24

.8

5.9

12

.8

9.5

5

10

15

20

25

0

+102 %

+49 %

+38 %

+69 %

+11 %

+13 %

+51 %

+0 %

–42 %

–23 %

2010 2011 2012

0

5

10

15

20

25

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

in € million



P&L Drivers (Q2)

� more drop-ship, more wholesale

� sales push �

� new warehouse

� partly insourced

� wages �

14

Q2 12 Q2 11 % Q2 12 Q2 11 chng

Revenues 107.8 112.9 –4.6 100.0 100.0 0.0

Cost of sales 78.7 81.7 –3.6 73.1 72.3 0.7

Gross Profit (ex ooi) 29.0 31.2 –7.0 26.9 27.7 –0.7

Direct costs 14.6 14.6 14.6 14.6 15.1 15.1 15.1 15.1 –2.8–2.8–2.8–2.8 13.613.613.613.6 13.313.313.313.3 0.2

Direct costs (dep. on volume) 11.1 11.9 –6.7 10.3 10.5 –0.2

Transportation costs 9.1 9.4 –3.1 8.5 8.3 0.1

Warehousing costs 0.7 1.3 –49.8 0.6 1.2 –0.5

Operations centre costs 1.3 1.2 12.2 1.2 1.0 0.2

Direct costs (dep. on revenues) 3.5 3.1 11.7 3.3 2.8 0.5

Credit card fees 0.9 0.9 –6.9 0.8 0.8 0.0

Bad debt losses 0.4 0.3 45.9 0.3 0.2 0.1

Marketing costs 2.3 2.0 16.1 2.1 1.7 0.4

Contribution margin 1 14.4 16.2 –10.9 13.4 14.3 –1.0

Indirect costs 4.3 3.8 14.4 4.0 3.3 0.7

Personnel expenses 2.2 1.7 24.6 2.0 1.5 0.5

Rents and overheads 1.5 0.9 63.1 1.4 0.8 0.6

Financial and legal costs –0.1 0.6 –111.8 –0.1 0.5 –0.6

IT and telecommunications 0.3 0.2 74.0 0.3 0.2 0.1

Other 0.5 0.4 10.6 0.4 0.4 0.1


FX effects –0.4 0.3 –0.4 0.2 –0.6

Other operating profit (w/o FX gains) 0.8 0.5 0.7 0.5 0.2

EBITDA 10.5 13.2 –20.7 9.7 11.7 –2.0

Depreciation / Amortization 0.7 0.4 47.9 0.6 0.4 0.2

EBIT 9.8 12.8 –23.1 9.1 11.3 –2.2

Net financial result 0.0 0.0 –224.4

EBT 9.8 12.8 –23.7 9.1 11.3 –2.3

Income taxes 3.3 4.1 –19.8

Consolidated net income 6.5 8.7 –25.5 6.0 7.7 –1.7

EUR yoy % of Revenues

� new warehouse



P&L Drivers (H1)

� outlook: costs �

� low liquidity, low/no interest rates

15

H1 12 H1 11 % H1 12 H1 11 chng

Revenues 193.3 198.3 –2.5 100.0 100.0 0.0

Cost of sales 142.2 144.9 –1.9 73.6 73.1 0.5

Gross Profit (ex ooi) 51.1 53.4 –4.3 26.4 26.9 –0.5

Direct costs 26.9 26.9 26.9 26.9 26.9 26.9 26.9 26.9 0.20.20.20.2 13.913.913.913.9 13.613.613.613.6 0.4

Direct costs (dep. on volume) 20.4 20.7 –1.3 10.6 10.4 0.1

Transportation costs 16.2 16.2 –0.2 8.4 8.2 0.2

Warehousing costs 1.6 2.2 –23.9 0.9 1.1 –0.2

Operations centre costs 2.6 2.3 12.7 1.4 1.2 0.2

Direct costs (dep. on revenues) 6.5 6.2 5.1 3.4 3.1 0.2

Credit card fees 1.5 1.6 –8.4 0.8 0.8 0.0

Bad debt losses 0.7 0.6 11.1 0.4 0.3 0.0

Marketing costs 4.3 3.9 9.8 2.2 2.0 0.3


Indirect costs 9.2 7.4 23.9 4.8 3.7 1.0

Personnel expenses 4.4 3.5 25.4 2.3 1.8 0.5

Rents and overheads 3.0 1.9 63.5 1.6 0.9 0.6

Financial and legal costs 0.4 1.0 –58.8 0.2 0.5 –0.3

IT and telecommunications 0.6 0.4 55.3 0.3 0.2 0.1

Other 0.8 0.7 12.3 0.4 0.4 0.1


FX effects –1.5 –0.4 –0.8 –0.2 –0.6

Other operating profit (w/o FX gains) 1.1 0.9 0.6 0.4 0.1

EBITDA 14.6 19.5 –25.3 7.5 9.8 –2.3

Depreciation / Amortization 1.3 0.8 63.7 0.7 0.4 0.3

EBIT 13.2 18.7 –29.2 6.9 9.4 –2.6

Net financial result –0.1 0.1 –209.3

EBT 13.2 18.8 –29.9 6.8 9.5 –2.7

Income taxes 4.4 6.0 –27.6

Consolidated net income 8.8 12.7 –31.0 4.5 6.4 –1.9

EUR yoy % of Revenues

� fixed costs

� one-off effect will wash out

� FY will depend on winter weather



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook



2.1 4.3 6.2

–24.0

22.2

20.4

–1.9 1.9

–3.4

4.3

17.7

5.8

–0.9

–5.8

15.4

–3.4

26.7

–24.1

35.5

–7.4

16.6

12.3

4.8

–24.3

31.4

19.7

19.6

–16.4

28.2

0.4

3.2

–2.2

0.5

–5.5

6.2

–2.7

5.1

–5.7

4.0

–3.4

2010 2011 2012

Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

quarterly delta in € million

Accounts receivable

Inventories

Accounts payable

Working Capital

... follow the seasonal peaks.

... winter tyre stocks built up ...

... funded w/ AP

... better cash flow ahead

Working Capital Management

17



Liquidity Bridge

Net cash = € –18.0 million ►

in € million

6.2

47.52.6 0.1 –31.7

–3.6

27.2 –0.1 –21.9

–4.3

–0.1 0.0 –34.9

20.4 0.4 7.7

-20

-10

0

10

20

30

40

50

60

Liq

uid

ity

30

.06

.11

EB

IT

Depre

cia

tion

oth

er

Pro

vis

ions

Invento

ries

Receiv

able

s

Paya

ble

s

Inte

rest

Taxes

Pro

pery

, Pla

nt

and E

quip

ment

Inta

ngib

le

Assets

Securities e

tc.

Div

idend

Paym

ents

Oth

er

financin

g

FX T

ransla

tion

Liq

uid

ity

30

.06

.12

-20

-10

0

10

20

30

40

50

60



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook



Outlook

� Current trading in Q3:

� promising start into Q3

� price trends: sell-in stable, sell-out mixed (summer �, winter �)

� Market for replacement tyres

� Germany: FY12 est (BRV, as of Mar12): summer + 1.2 %, winter + 3.6 %

� Europe: sell-in H1 (Michelin): – 11,0 % ytd

� 2012 top- and bottom line drivers:

� more volume, less price

� strong inventory position

� labelling improves mix

� Other factors:

� seasonal effects � summer/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 FY12: + 5 % yoy

� EBIT margin: 9 %

Jan - May: – 20 % volume

(– 15 % revenues)


Hanover, 19 July 2012 21

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

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