A Firm Grip. Investor and Analyst Presentation on the Occasion of the Release of the 9-Monthly Results 2009 Frankfurt am Main, 9th November 2009
Agenda Delticom at a Glance Business Model Seasonalities in the Tyre Trade Financials Outlook 2
Agenda Delticom at a Glance Business Model Seasonalities in the Tyre Trade Financials Outlook 3
Delticom at a Glance #1 European online tyre dealer (car replacement tyres): > 100 online shops in 35 countries founded 1999, IPO Oct 2006, SDAX Dec 2008 customer base: more than 3 million 2008: ~700 thousand new customers broad product range: > 100 tyre brands, > 25,000 models other products: motorcycle tyres, truck tyres, complete wheels, rims, motor oil, car parts, accessories global network with more than 20,000 fitting partners DE 6504 US 2526 UK 1744 FR 2535 CH 1012 9M 09 9M 08 yoy % Revenues m 201.6 175.2 +15.1 Gross profit m 56.4 45.0 +25.4 EBIT m 14.7 8.9 +64.6 EBIT margin % 7.3 5.1 Net income m 10.0 6.6 +52.7 Earnings per share 0.85 0.56 +52.7 Employees 86 80 +7.5 Total assets m 112.2 94.5 +18.8 Equity ratio % 43.3 47.7 Return on equity % 20.7 14.6 Operating cash flow m 2.8 3.5 19.7 175 165 155 145 01.01.09-30.10.09 41.82 26.25 135 125 Shareholding 115 105 95 85 3.99 27.94 75 1.1 11.1 21.1 31.1 10.2 20.2 2.3 12.3 22.3 1.4 11.4 21.4 1.5 11.5 21.5 31.5 10.6 20.6 30.6 10.7 20.7 30.7 9.8 19.8 29.8 8.9 18.9 28.9 8.10 18.10 28.10 Delticom SDAX DJSGR 4
Agenda Delticom at a Glance Business Model Seasonalities in the Tyre Trade Financials Outlook 5
Tyres and the Internet European Car Replacement Tyres: 11 billion EE+CE 76 WE 199 in million tyres SA 50 Source: LMC World Tyre Forecast Service 2009, Michelin, BRV, own estimates Europeans are increasingly online... 34 Rest 20 World adults on the Internet in % of total 46 69 60 Asia 213 Desk Research GfK Austria, April 2009 77 76 NA 263 66 41 80 other 67 50 71 ES 13 52 81 Western Europe IT 22 FR 24 DE 49 UK 24 Germany: Outlook for 2009 remains dim 60 50 40 30 20 10 0 30% want to buy online in the future (18-39) 25% 20% 15% want to buy online in the future (all) 10% bought last tyres on the Internet (18-39) 5% 28.1% 27.8% 26.4% 24.1% 15.1% 13.7% 13.4% 3.3% +1.9% 4.8% 12.7% 3.7% 3.5% 98 99 2000 01 02 03 04 05 06 07 08 09* Source: BRV (car replacement tyres) * estimates as of March 09... and buy their tyres online. 15.6% 6.1% in million tyres 15.0% 8.9% 4.9% bought last tyres on the Internet (all) 1.8% 2.5% 3.1% 0% 1.0% 98 99 2000 01 02 03 04 05 06 07 08 09* Source: ADAC Reifenmonitor 2005-2009, 2009 preliminary 6
Redesign of the Tyre Distribution Chain Traditional Retail Delticom Redesign European Tyre Manufacturers Non-European Tyre Manufacturers European Tyre Manufacturers Non-European Tyre Manufacturers Wholesalers Wholesalers Delticom European Distribution Centers Retailers Small Garages B2B Customers B2C Customers 7
Key Benefits for Our Partners Customers Fitting Stations Suppliers save time and money select from broad product offering fast delivery, even at peak times large network of service partners pre-/after sale services objective quality control (e.g. TÜV s@fer-shopping ) convenience 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 reliable strategic partner 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 Improved customer value Well connected Attractive Partnership 8
Agenda Delticom at a Glance Business Model Seasonalities in the Tyre Trade Financials Outlook 9
2007 / 2008 / 2009 Seasonalities Q3 Q4 Q1 Q2 Q3 Q4 Relative Weather Relative Revenues 1 2 2 3 4 4 5 6 1 2 3 4 5 6 cold in Jan 09 (but not as much snow as in 08), even colder in Feb 09 (late snow) 2 warm weeks Mar 09, revenues increased yoy strong base from Q2 08 leads to decrease in tyre sales latter part of Q2 colder, but still good growth in summer tyre business Early snow and cold in DE and in the Alps Remainder of Oct and beginning of Nov much warmer Summer season (Q2) and winter season (Q4) are very important. 10
Customers in thousands 2007 2008 2009 New Customers +18.2%...still the main growth driver 1 131 188 127 180 123 218 143 210 146 231 169 2 +34.2% 3 Repeat Customers 50 74 60 87 61 98 76 110 79 125 102...long replacement cycle, and customers are happy Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Ratio...weight of repeat customers Repeat customers constitute important growth potential 11
Agenda Delticom at a Glance Business Model Seasonalities in the Tyre Trade Financials Outlook 12
Quarterly Revenues in million 2007 2008 2009 100 80 +26.5% +8.2% +25.2% +20.6% +11.6% +16.3% 100 80 60 40 +52.3% +31.5% +9.4% +21.9% +19.8% 60 40 20 20 0 38.9 63.1 44.0 69.5 42.6 78.9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 53.7 83.8 51.0 88.1 62.4 0 Fluctuations in growth rates: seasons, weather, base effects, strategy 13
201.6 2.5 147.7 4.1 0.6 17.9 5.3 2.6 2.1 1.4 1.4 1.5 1.3 0.4 3.0 14.7 Telco other EBIT Rents Revenues-to-EBIT Bridge in million 14 Revenues Other operating income Cost of Sales Personnel expenses Depreciation Transportation Marketing Operation centres Warehousing Financial & Legal Bad debt Credit cards Gross margin and operating leverage drive EBIT
P&L Drivers growth margin % 9M 09 9M 08 % factor 9M 09 9M 08 chng Revenues 201.6 175.2 15.1 1.0 100.0 100.0 0.0 Cost of sales 147.7 132.2 11.7 0.8 73.3 75.5 2.2 Gross Profit (simple) 53.9 43.0 25.3 1.7 26.7 24.5 2.2 Direct costs 30.9 26.6 16.2 1.1 15.3 15.2 0.2 Direct costs (dep. on sales) 22.7 18.9 20.2 1.3 11.2 10.8 0.5 Transportation costs 17.9 14.4 24.5 1.6 8.9 8.2 0.7 Warehousing costs 2.1 1.7 22.0 1.5 1.0 1.0 0.1 Operations centre costs 2.6 2.7 3.5 0.2 1.3 1.6 0.3 Direct costs (dep. on revenues) 8.2 7.7 6.4 0.4 4.1 4.4 0.3 Credit card fees 1.5 1.2 21.6 1.4 0.7 0.7 0.0 Bad debt losses 1.4 1.5 7.3 0.5 0.7 0.9 0.2 Marketing costs 5.3 5.0 6.9 0.5 2.6 2.8 0.2 Contribution margin 1 23.0 16.4 40.1 2.7 11.4 9.4 2.0 Indirect costs 8.0 7.7 3.9 0.3 4.0 4.4 0.4 Personnel expenses 4.1 3.7 12.4 0.8 2.1 2.1 0.0 Rents and overheads 1.3 1.1 18.4 1.2 0.6 0.6 0.0 Financial and legal costs 1.4 1.6 14.7 1.0 0.7 0.9 0.2 IT and telecommunications 0.4 0.4 12.3 0.8 0.2 0.2 0.0 Other 0.8 1.0 16.6 1.1 0.4 0.6 0.2 Contribution margin 2 15.0 8.7 72.4 4.8 7.4 5.0 2.5 FX effects 0.5 0.1 Other operating profit (w/o FX gains) 0.8 0.8 EBITDA 15.3 9.3 64.5 4.3 7.6 5.3 2.3 Depreciation / Amortization 0.6 0.4 61.8 4.1 0.3 0.2 0.1 EBIT 14.7 8.9 64.6 4.3 7.3 5.1 2.2 Net financial result 0.2 0.7 74.6 5.0 Financial income 0.2 0.8 72.1 4.8 Financial expenses 0.0 0.0 19.6 1.3 EBT 14.9 9.7 54.1 3.6 7.4 5.5 1.9 Income taxes 4.9 3.1 57.0 3.8 Consolidated net income 10.0 6.6 52.7 3.5 5.0 3.8 1.2 15
Working Capital Management 160 2007 2008 2009 Accounts receivable 140 2.7 3.8 1.6 2.5 4.2 0.5...follow the seasonal peaks. Inventories 120 100 9.6 1.3 7.2 5.5 2.3 4.6 1.6 0.6 3.5 4.4 5.6 1.9 6.1 9.8...driven by sales ( ), capacity (+). (e.g. 2009 ramp-up) Accounts payable 80 60 15.0 4.6 2.5 7.5 2.3 2.8 14.4 3.2 6.7 4.9 0.7 3.4 13.4...discretionary payment terms Q2 07: stocking for winter season Q2 09: stocking, but paying later Q3 09: preparing for winter season Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Working Capital 40 20 0 2.7 1.3 11.8 7.5 Changes in working capital reflect seasonal patterns 9.0 15.4 9.2 6.2 10.5 0.8 4.1... both + and, with significant swings. FY 08: 2009: Prepare for increased cash consumption (inventories, terms). quarterly delta in million 16
Cash Bridge (TTM) in million 60 60 22.2 0.7 0.0 13.8 12.5 0.6 5.7 50 40 50 40 3.3 0.1 0.0 11.8 0.7 30 30.2 0.0 0.1 30.7 30 20 20 10 10 0 0 Delticom is self-financed, uses financial resources to support EBIT 17 Liquidity 30.09.08 EBIT Depreciation other Provisions Inventories Receivables Payables Interest Taxes Property, Plant, Equipment Intangible Assets Securities etc. Dividends Paid Other financing FX Translation Differences Liquidity 30.09.09
Agenda Delticom at a Glance Business Model Seasonalities in the Tyre Trade Financials Outlook 18
Outlook Current trading in Q4: early snow in D/A/CH good sales, stable prices German market (BRV) 2008: summer 4.0%, winter 3.4% 2009 est: summer 4%, winter 3% Fuzzy signals from the economy Ifo, deflated retail sales GfK, unemployment price levels? volume? depends (at least partly) on weather! Delticom not unaffected by the wake of the recession, but mitigating factors exists: seasonal effects good start into winter tyre season destocking (more or less) completed price discipline continues recession in all European countries customers are trading down Delticom is an international business diversified country portfolio Delticom is online good prices, good sales, good margins Q4: planned moderate revenues growth @ slightly lower margins room for positive surprises Revenues FY09: +10% yoy EBIT-Margin FY09: 7% 19
Key Investment Highlights 1 #1 European online tyre retailer 2 Resilient and profitable business model 3 Strong cash flow, strong balance sheet 4 Redesign of the tyre distribution chain 5 Excellent growth opportunities 20
Vielen Dank! Investor Relations: Melanie Gereke Delticom AG Brühlstr. 11 30169 Hanover, Germany email: ir@delti.com phone: +49-511-93634-8903 21