Delticom: 2011 financials ‘on track’

Delticom AG has published preliminary figures for the first nine months of the current year showing it increased revenues by 15.8 per cent to 297.7 million euros and pre-tax profits (EBIT) by 23.3 per cent to 28.2 million euros, despite the strong prior-year. Third quarter 2011 Earnings before interest and taxes (EBIT) improved by 51.5 per cent to 9.5 million euros (Q310: 6.3 million euros). This translates into an EBIT margin of 9.5 per cent up from 7.9 per cent in the comparable period last year. The company also confirmed anecdotal reports that early winter tyre sales have begun positively, saying: “[the] season has started off well.”

In the third quarter, Delticom generated revenues of 99.4 million euros (Q310: 79.7 million euros), up 24.7 per cent. As a result, year-to-date revenues amounted to 297.7 million euros (9M10: 257 million euros, up 15.8 per cent). Q3 revenues in the e-commerce division were up year-on-year by 18.4 per cent to 89.1 million euros (9M11: 14 per cent to 279.2 million euros). The quarterly revenues of the wholesale division grew by 10.3 million euros, after prior-year revenues of 4.4 million euros (9M11: 18.5 million euros, up 53.2 per cent).

According to the company, initially the summer tyre business had lagged behind expectations until the second quarter. Starting from August, though, market-wide demand for summer tyre sales strengthened. In the course of the third quarter winter tyre sales stepped up noticeably. This presented Delticom with the opportunity to grow volume with better prices. As a result, third quarter gross margin (trade margin excluding other operating expenses) was fell from the previous quarter’s 27.7 per cent to 25.8 per cent. The main reason for this development has been the strong ramp-up of inventories, apparently designed to offer more choice and more competitive prices to consumers.

Delticom CEO Rainer Binder commented: “We are pleased with the course of business so far. Obviously last year’s spectacular winter has raised the bar for the closing quarter. Despite this, we want to beat last year’s winter tyre sales, even with less winterly weather conditions.“

Frank Schuhardt (CFO) adds: “For the remaining months we do not target the extraordinarily high prior-year margins, but rather want to gain additional market share. Assuming a normal course of business our plan is unchanged: a revenue growth of 10 per cent, at an EBIT margin of around one percentage point lower than in 2010.”

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