Hanover, 23 January 2013 For Delticom (German Securities Code (WKN) 514680, ISIN DE0005146807, stock market symbol DEX), Europe's leading online tyre dealer, 2012 was a challenging year. In a difficult market environment the company generated revenues of 456.4 million, according to today's preliminary figures (2011: 480.0 million). EBIT amounted to 32.5 million (2011: 52.9 million). Earnings per share were 1.86 (2011: 3.04).
Q4 12: Successful quarter despite poor market conditions
During the first nine months of 2012 the European tyre trade showed growing signs of a cyclical downturn. Weak tyre demand in the final quarter confirmed the trend. As a result, industry experts indicate that winter tyre sales disappointed in 2012, dropping below the already weak 2011 levels.
This did not leave Delticoms Q4 12 business with commercial customers unaffected. Both B2B sales in the E-Commerce division as well as wholesale revenues shrunk double-digit. Total quarterly revenues amounted to 175.9 million (Q4 11: 182.3 million, 3.5 %). Due to robust sales to end-customers, divisional E-Commerce revenues for Q4 12 stood at 172.7 million, only slightly below last year (Q4 11: 176.5 million, 2.1 %).
In an environment characterised by mild winter conditions and increasing competitive pressure, Delticom was yet again able to grow its business with private end-customers (B2C). More than 80 % of the revenues in the E-Commerce division came from B2C sales. The company was therefore able to at least partially insulate itself from the overall weak market conditions.
In order to increase volume Delticom had to offer more attractive prices for its customers. According to the German tyre trade association (BRV), selling prices for winter tyres had to be reduced by a few percentage and thus forfeiting profits, as weak demand met fully stocked warehouses. Consequently, Delticom's Q4 12 gross margin (trade margin ex other operating expenses) of 25.0 % came in significantly lower than in the prior-year period (Q4 11: 28.8 %). This was compounded by the planned increase in fixed costs, resulting in a Q4 12 EBIT margin of 8.5 % (Q4 11: 13.6 %).