Delticom Reports 72% Profit Growth in 2009
German based online tyre retailer Delticom, owner of the mytyres.co.uk portal, has reported revenues of 311.3 million euros in the 2009 financial year, a year-on-year increase of 20.2 per cent. During the reporting period the company’s EBIT increased 78.8 per cent to 29.4 million euros, and Delticom notes that, in relation to revenues, this corresponds to an EBIT margin of 9.4 per cent – exceeding the forecast of 7 per cent. Consolidated net income for 2009 was 20.2 million euros or 1.71 per euro share, up 72.4 per cent from the previous year.
“The course of business in the financial year 2009 was a very successful one for Delticom, even more so if viewed in the context of the bruised economy,” commented Delticom CEO Rainer Binder. One significant contributing factor to our results was the unusually favourable, snowy winter weather in the closing quarter.”
Delticom reports that demand for replacement tyres in Europe is concentrated in five main markets: Germany, France, Great Britain, Italy and Spain. Thus, taking unit sales and weighting with average tyre prices, the European market volume relevant to Delticom amounts to approximately 10 billion euros. Admittedly, adds the retailer, the share of tyre sales made online is still relatively low in contrast to a number of other product groups. Delticom estimates that online tyre sales accounted for only five per cent of European sales to end customers in 2009. Germany’s largest automobile association, the ADAC, published a report at the end of 2009 that stated 6.7 per cent of its members purchased tyres over the internet during the previous year, up from 4.9 per cent in 2008. In the 18 to 39 age group, the number rose to 15.4 per cent (8.9 per cent in 2008). There is thus reason to believe that these figures will accelerate in years to come; Delticom notes that for younger, more Internet-savvy buyers, the number making online tyre purchases jumped to 29.6 per cent.
Delticom reports acquiring a total of 805,000 new customers last year, a 15.8 per cent increase on the 695,000 gained a year earlier. In addition to this, 287,000 existing customers made repeat purchases through Delticom’s websites, up 34.3 per cent on 2008. In total, more than 3.4 million customers have now made purchases through Delticom online shops since the company’s founding. Customers’ tyres are fitted by more than 25,000 global fitting partners, including 1,791 located in the UK.
Revenue growth during the current financial year is expected to reach up to ten per cent, however Delticom admits that “how near we get to this year’s +10 per cent will ultimately depend on the year-on-year increase in revenues in the summer season.” An EBIT of eight per cent is anticipated. “This is an ambitious goal, but one which can be achieved if our business develops in a positive way,” said Delticom CFO Frank Schuhardt. “Our E-Commerce division will continue to make a strong contribution to both top- and bottom line over the coming months.”