Q-Base H111 1...Investor Presentation H1 Hanover, 09 August 2011 At a glance Business Model Profit &...

On track.

Investor and Analyst PresentationOn the Occasion of the Release of the Semi-Annual Results 2011Hanover, 09 August 2011

Investor Presentation H1

Hanover, 09 August 2011 2

Agenda

Delticom at a Glance

Business Model

Profit & Loss

Balance Sheet

Outlook


Hanover, 09 August 2011At a glance Business Model Profit & Loss Balance Sheet Outlook 3

Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook




DE 7897 US 2270 UK 1756 FR 3379 CH 1450

� #1 European online tyre dealer

� > 100 online shops in 40 countries

� founded 1999, IPO Oct 2006, SDAX Dec 2008

� 2011 more than 410 thousand new customers so far

� customer base: more than 4.7 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

� 108 employees, mainly in the Hanover head office

� global network with more than 29,000 fitting partners, e.g.



Key Financials H1

►

Q211 Q210 yoy % H111 H110 yoy % guidance*

New Customers k 230 248 –7,3 411 436 –5,8 Sluggish summer tyre season...

Customer Base m 4,8 3,9 +24,1 ... but still good customer generation.

Revenues €m 112,9 102,9 +9,8 198,3 177,3 +11,8 ~ 10 % More prices than volume...

Gross Margin % 28,8 29,4 –0,6p 28,0 28,4 –0,3p ... at stable margins yoy...

Ebit Margin % 11,3 11,0 +0,3p 9,4 9,4 +0,1p < 10.5% ... and lower direct costs.

Ebit m 12,8 11,3 +13,2 18,7 16,6 +12,6 Slightly better than expected.

Capex m 2,7 1,0 +182,7 4,5 1,2 +268,1 6.5 New central warehouse opened

H1 performance according to plan



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook


Hanover, 09 August 2011At a glance 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

7

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►1

65

13

3

18

0

13

0

15

2

11

4

14

7

10

2

12

5

79

23

0

18

1

33

3

18

9

24

8

18

8

25

9

16

9

23

1

14

6

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2009 2010 2011

–7%

+9%

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

16

2,6

79

,7

10

2,9

85

,4

51

,0

74

,5

88

,1

62

,4

10

9,7

11

2,9

+10%

+15%

+48%

+28%

+17%

+46%

+31%

+16%

+12%

+20%

2009 2010 2011

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

Higher prices passed on to the customers►

11

,3%

7,0

%

15

,2%

7,9

%

11

,0%

7,2

%

13

,4%

7,3

%

8,6

%

5,2

%

0%

30%

25%

20%

15%

10%

5%

27

,7%

25

,9%

30

,6%

27

,4%

28

,0%

25

,7%28

,8%

27

,8%

26

,4%

26

,0%

2009 2010 2011

30%

25%

20%

15%

10%

5%

0%

–0,3

0,3

1,8

–0,41,6

–0,3

2,21,9

2,42,1

0,3

–0,2

1,8

0,6

2,4

2,0

4,4

1,0

2,2

4,0

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

Gross Margin (simple)

EBIT Margin



Quarterly EBIT

► Step-up from strong H110 base

6,3

11

,3

5,3

24

,8

14

,7

2,6

7,5

4,5

5,9

12

,8

0

25

20

15

10

5

+13%

+11%

+69%

+38%

+49%

+102%

+96%

+34%

+49%

+419%

2009 2010 2011

25

20

15

10

5

0

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

in € million



P&L Drivers (Q2)

� More price than volume

� E-Commerce momentum �

� will go � with new warehouse

� tyre price increases

� good sales from own warehouses

� wages �

15

Q211 Q210 % Q211 Q210 chng

Revenues 112,9 102,9 9,8 100,0 100,0 0,0

Cost of sales 81,7 74,1 10,3 72,3 72,0 0,3

Gross Profit (simple) 31,2 28,8 8,6 27,7 28,0 –0,3

Direct costs 15,1 15,1 15,1 15,1 14,4 14,4 14,4 14,4 4,24,24,24,2 13,313,313,313,3 14,014,014,014,0 –0,7

Direct costs (dep. on sales) 11,9 11,4 4,1 10,5 11,1 –0,6

Transportation costs 9,4 9,4 –0,1 8,3 9,2 –0,8

Warehousing costs 1,3 1,1 20,5 1,2 1,0 0,1

Operations centre costs 1,2 0,9 28,3 1,0 0,9 0,2

Direct costs (dep. on revenues) 3,1 3,0 4,8 2,8 2,9 –0,1

Credit card fees 0,9 0,8 24,3 0,8 0,7 0,1

Bad debt losses 0,3 0,4 –30,8 0,2 0,4 –0,1

Marketing costs 2,0 1,9 4,1 1,7 1,8 –0,1

Contribution margin 1 16,2 14,3 12,9 14,3 13,9 0,4

Indirect costs 3,8 3,4 10,5 3,3 3,3 0,0

Personnel expenses 1,7 1,6 8,0 1,5 1,6 0,0

Rents and overheads 0,9 0,8 18,6 0,8 0,7 0,1

Financial and legal costs 0,6 0,5 2,0 0,5 0,5 0,0

IT and telecommunications 0,2 0,2 –8,5 0,2 0,2 0,0

Other 0,4 0,3 30,2 0,4 0,3 0,1


FX effects 0,3 0,3 0,2 0,3 –0,1

Other operating profit (w/o FX gains) 0,5 0,3 0,5 0,3 0,1

EBITDA 13,2 11,6 14,0 11,7 11,3 0,4

Depreciation / Amortization 0,4 0,3 42,3 0,4 0,3 0,1

EBIT 12,8 11,3 13,2 11,3 11,0 0,3

Net financial result 0,0 0,0 137,0

EBT 12,8 11,3 13,4 11,3 11,0 0,4

Income taxes 4,1 3,6 12,7

Consolidated net income 8,7 7,6 13,8 7,7 7,4 0,3

EUR yoy % of Revenues



P&L Drivers (H1)

� outlook: costs �

� low but increasing capital intensity

� low liquidity, low/no interest rates

� outlook: used warehouse capacity �

� outlook: costs �

16

H111 H110 % H111 H110 chng

Revenues 198,3 177,3 11,8 100,0 100,0 0,0

Cost of sales 144,9 129,4 12,0 73,1 73,0 0,1

Gross Profit (simple) 53,4 47,9 11,4 26,9 27,0 –0,1

Direct costs 26,9 26,9 26,9 26,9 25,3 25,3 25,3 25,3 6,46,46,46,4 13,613,613,613,6 14,314,314,314,3 –0,7

Direct costs (dep. on sales) 20,7 19,6 5,5 10,4 11,1 –0,6

Transportation costs 16,2 15,8 2,2 8,2 8,9 –0,8

Warehousing costs 2,2 1,9 11,6 1,1 1,1 0,0

Operations centre costs 2,3 1,8 26,6 1,2 1,0 0,1

Direct costs (dep. on revenues) 6,2 5,6 9,5 3,1 3,2 –0,1

Credit card fees 1,6 1,3 28,9 0,8 0,7 0,1

Bad debt losses 0,6 0,8 –24,1 0,3 0,5 –0,1

Marketing costs 3,9 3,6 10,2 2,0 2,0 0,0


Indirect costs 7,4 6,9 8,1 3,7 3,9 –0,1

Personnel expenses 3,5 3,2 9,3 1,8 1,8 0,0

Rents and overheads 1,9 1,6 14,9 0,9 0,9 0,0

Financial and legal costs 1,0 1,1 –10,8 0,5 0,6 –0,1

IT and telecommunications 0,4 0,3 7,5 0,2 0,2 0,0

Other 0,7 0,6 18,5 0,4 0,3 0,0


FX effects –0,4 0,8 –0,2 0,4 –0,6

Other operating profit (w/o FX gains) 0,9 0,7 0,4 0,4 0,0

EBITDA 19,5 17,2 13,4 9,8 9,7 0,1

Depreciation / Amortization 0,8 0,6 33,7 0,4 0,3 0,1

EBIT 18,7 16,6 12,6 9,4 9,4 0,1

Net financial result 0,1 0,0 83,9

EBT 18,8 16,6 12,8 9,5 9,4 0,1

Income taxes 6,0 5,4 12,4

Consolidated net income 12,7 11,3 13,0 6,4 6,4 0,1

EUR yoy % of Revenues

� FX swings expected to wash out



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook



10,6

0,8

–4,2

–1,1

2,1 4,3 6,2

–24,0

22,2

20,4

–3,1

6,1

10,9

–13,1

17,7

5,8

–0,9

–5,8

15,4

–3,4

5,4

5,7 8,4

–13,7

16,6

12,3

4,8

–24,3

31,4

19,7

2,1

1,1

–1,6

–0,4

3,2

–2,2

0,5

–5,5

6,2

–2,7

2009 2010 2011

Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1

quarterly delta in € million

Accounts receivable

Inventories

Accounts payable

Working Capital

... follow the seasonal peaks.

... significant increase ...

... funded hardly with AP

(and significant early payments)

... swings are getting more

pronounced

Working Capital Management

18



Liquidity Bridge (ttm)

Net cash = € 0.9 million ►

in € million

22,8

49,7 1,5 1,3 –31,6

–0,6

7,8 0,1 –10,2

–6,7

–0,1 –0,8 –32,2

5,3 –0,2 6,2

0

10

20

30

40

50

60

70

80

Liq

uid

ity

30

.06

.10

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

.11

0

10

20

30

40

50

60

70

80



Agenda


Business Model

Profit & Loss

Balance Sheet

Outlook



Outlook

� Current trading in Q3:

� good volumes and revenues

� better yoy growth

� Market for replacement tyres

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

� 2011 top- and bottom line drivers:

� shortages (possibly FY)

� new central warehouse (Q3 onwards)

� Q4 volume slightly up, at lower margins (needs normal winter weather)

� 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 FY11: ~ +10% yoy

� EBIT-Margin FY11: –1%p yoy


Hanover, 09 August 2011 22

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

Q-Base H111 1...Investor Presentation H1 Hanover, 09 August 2011 At a glance Business Model Profit &...

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