Delticom Reports Strong Growth in 2008

Prominent European online tyre dealer Delticom AG reports closing its 2008 fiscal year with a record result. Despite a disappointing year for the tyre industry and for tyre retailers, Delticom’s online business model has again exhibited strong growth. The company recorded significantly increased sales in nearly all of its more than 100 online shops in 35 countries. This is reflected in year-on-year rise in revenues in each quarter. In the fourth quarter alone, revenues of 84.0 million euros were achieved, up from 69.5 million euros in the corresponding quarter of 2007. For the whole year, Delticom increased revenues year-on-year by 20.2 per cent to 259.0 million euros. With these results, Delticom hit the upper end of the revenue targets the company released at the beginning of the last year.

Delticom’s significant revenue growth was accompanied by further improvement in its earnings: EBIT increased in the reporting period by 34.0 per cent to 16.4 million euros. In relation to revenues, this corresponds to an EBIT margin of 6.4 per cent, which clearly exceeds the company’s guidance of 5-6 per cent. Consolidated net income for 2008 was 11.7 million euros or 2.97 euros per share, up 40.5 per cent from previous year’s 2.12 euros. Operating cash flow also increased significantly, from 6.6 million to 16.7 million euros. At the end of the 2008 fiscal year, net cash totalled 42.9 million, euros corresponding to a year-on-year growth of 24.3 per cent.

“We are debt free and have a strong balance sheet,” said Delticom CFO Frank Schuhardt. “ As a result of this, we are in a position to allow our shareholders to partake of our firm’s success, as has been the case in past years.” Subject to the approval of the Annual General Meeting on 19 May 2009, Delticom AG will pay out a dividend of 3.00 euros, 50 per cent more than in the previous year.

Economists continue to be uncertain about the sort of headwind companies will be facing in the next months, notes Delticom. On the other hand, the company adds, thanks to its solid earnings and financial situation, Delticom is well positioned to maintain its success even in the face of the current fragile economic conditions. The company reports that the first three months of 2009 have started on a positive note, despite unfavourable weather conditions for tyre dealers across the main European markets. Delticom’s management is therefore cautiously optimistic at this early point of the year and is aiming for a year-over-year increase in revenues of 10 per cent for 2009. In the current recessionary environment, some additional sales might be achievable at slightly reduced margins. As a result, the management does not see EBIT margins of over 6 per cent as the rule, but would view them a pleasant surprise.

“Particularly in difficult economic times, consumers turn to companies who offer a good selection at reasonable prices. Delticom does both – and not only in Germany, but all over Europe”, says Rainer Binder, CEO of Delticom AG, adding: “We will continue to expand our position as the leading online tyre retailer.”