Delticom Results Show Strong Growth in EU Markets

Leading European tyre retailer Delticom AG has reported a 9.4 per cent year on year revenue increase in the first three months of 2008. Details of the company’s Q1 2008 performance, release May 14, point to growth in spite of what is traditionally a week time of the year for tyre sales.

Revenue during the quarter was 42.6 million euros, compared with 38.9 million in the first quarter of 2007. EBIT improved from 250,000 euros in Q1 2007 to 510,000 euros this year. At the same time, consolidated net income rose to 480,000 euros, an increase of 29.7 per cent. Regarding the figures, Delticom comments that the first quarter is traditionally the weakest in sales, and this held true in the first quarter of 2008 – unseasonably cool March weather caused many drivers in Germany and other European countries to delay the purchase of summer tyres until April.

Revenues in the company’s eCommerce division increased 8.6 per cent from 35.5 million euros to 38.5 million euros. In the Wholesale division, growth was up 17.8 per cent with quarter revenues of 4.1 million euros. The company reports key factor driving this growth was the continued positive development of its customer base. In 2008, 123,000 new customers made a purchase through one of Delticom’s online shops while during the same period 61,000 repeat customers shopped with the firm.

On the German home market, Delticom saw what it calls a ‘relatively moderate’ first quarter growth of 5.4 per cent to 14.9 million euros. This is contrasted by stronger revenues increases achieved in a number of foreign markets: With revenues up 13.1 per cent to 23.0 million euros the other EU-markets experienced the highest rates of growth, with the remaining foreign markets showing growth of 5.5 per cent to 4.7 million euros.

“We are pleased with the results achieved during the first quarter of this fiscal year,” commented Frank Schuhardt, Delticom AG CFO. “Of course we would have liked the winter to be cold and snowy with March being warmer. Drivers needed fewer winter tyres – and then they saw no reason to change to summer tyres. However, the summer season got off to a good start in April, and the current sales figures are encouraging. At the same time, the first quarter results indicate that our internationalization strategy is indeed a good way to achieve both consistent, sustainable growth and insulate ourselves against the seasonal fluctuations in individual markets.”