New warehouse to keep Delticom ‘agile’

In reporting its performance during the first quarter of 2011, Delticom AG notes that the past year demonstrated the importance of having ample stocks on hand to ensure the company can “remain agile” in peak periods. To meet this end, the company is scheduled to open new warehouse within the next couple of weeks. This warehouse is Delticom’s largest to date and the online retailer says it will “enjoy major investments into information, conveyor and packaging technology.”

Generally speaking, the first three months of 2011 appear to have been good to Delticom despite weather conditions conspiring to bring about a sluggish start to the European tyre retailing year. Between the start of January and end of March the Germany-based online tyre retailer and owner of the mytyres.co.uk portal earned 85.35 million euros, a 14 per cent year-on-year increase. Gross profit of 23.67 million euros was 13.0 per cent higher than in the first quarter of 2010 while EBITA, at 6.51 million euros, was up 5.6 per cent. Consolidated net income increased 4.8 per cent year-on-year to 4.20 million euros.

The bulk of this income came via Delticom’s E-Commerce division, whose revenue of 80.5 million represents a year-on-year growth of 13.9 per cent. During the quarter the company’s websites in 39 countries attracted 181,000 new customers and 133,000 repeat customers; more than 80 per cent of segment revenues came from private B2C customers.

While business in the first quarter progressed according to company expectations and the first weeks of the current quarter are also reported to have been in line with Delticom’s expectations, the company states that demand for the second half of the year is “difficult to forecast” – on the one hand the percentage of online tyre sales is still comparatively low in the tyre retail sector yet increasing numbers of motorists are turning to the internet in search of good value offers. Having considered these factors, Delticom expects the number of online tyre sales to rise. “Despite the very high base of 2010, we therefore continue to expect revenues to grow by around 10 per cent year-on-year,” the company reported, adding it anticipates EBIT margins by dropping by approximately one percentage point year-on-year from its 2010 level of 11.2 per cent.