Delticom reports good Q2 growth

Preliminary figures published by online tyre retailer Delticom show improved performance in what the company calls a “challenging market environment.” During the first half of the year, the company achieved revenues of €212.2 million, up 9.8 per cent year-on-year. During the April to June quarter, Delticom’s revenues amounted to €130.9 million, a 21.5 per cent year-on-year increase. Against the market trend, second quarter revenues in the company’s core E-Commerce division rose 24.0 per cent year-on-year to €128.9 million; division revenues in the first half of 2013 were €206.4 million, an increase of 11.6 per cent.

Revenues in Delticom’s Wholesale division shrunk 47.3 per cent to €2.0 million in the second quarter; half year revenues of €5.8 million show a year-on-year drop of 30.9 per cent.

Summer tyre sales in the second quarter were “yet again disappointing” for the European tyre trade as a whole, opines Delticom. In the company’s German home market, dealer sales of summer tyres to end consumers decreased significantly year-on-year, even after accounting for a rebound in April. According to figures published by the German tyre manufacturers’ association the wdk, the market was down 14.7 per cent for the first five months of the year.

Despite sales failing to reach expectations in Europe, Delticom reports that 271,000 first time buyers purchased from Delticom online shops in the second quarter alone. This represents 37.6 per cent more new customers compared with the same quarter of 2012. Repeat customers were also out in force – 212,000 returned to Delticom sites to make purchases in the second quarter, a year-on-year increase of 29.4 per cent.

The company’s second quarter gross margin was 24.0 per cent, down from 26.9 per cent a year earlier. For the first half year the gross margin was 24.4 per cent, after 26.4 per cent in the prior-year period. The cost of goods sold increased in the reporting period 12.9 per cent to €160.5 million. Other operating profit rose 30.1 per cent to €2.7 million in the first half of the year. Altogether, gross profit rose 2.3 per cent year-on-year to €54.4 million.

Earnings before interest and taxes (EBIT) declined 32.8 per cent to €8.9 million for the first half of 2013. This equates to an EBIT margin of 4.2 per cent, compared with a margin of 6.9 per cent a year earlier. Second quarter EBIT saw a decline of 35.2 per to €6.4 million. The quarterly EBIT margin was 4.9 per cent, down from 9.1 per cent in the second quarter of 2012. The decline was mainly due to lower gross margins.

The financial result was €–7,800 compared with €–86,000 in the first half of 2012. In total, consolidated net income for the reporting period totalled €6.0 million down from € 8.8 million a year earlier.

Delticom says it remains on track for 2013. “Assuming a satisfactory course of business, the group should be able to grow its revenues year-on-year. The management expects Delticom to outperform the industry as a whole in 2013, regardless of broader sector developments.”