Tirendo brings Delticom its first-ever negative result
For the first time in its 15 year history, online retailer Delticom has reported negative net earnings. The German firm says it ended the first half of the 2014 financial year with a net loss of approximately €200,000; it says this minus result is primarily attributable to an accumulated, after tax loss of €8.0 million from Tirendo, the Berlin-based online tyre retailer Delticom acquired in September 2013. The perhaps understated comment from Delticom on 14 August was that “Tirendo’s performance in the first half of the year is significantly below planning, both in terms of revenues and earnings.”
Total company turnover rose 6.5 per cent in the first half of 2014 to €226.1 million, with turnover within the company’s core e-commerce business rising 7.3 per cent year-on-year to €221.4 million. On the back of these revenues, Europe’s largest online tyre dealer achieved EBITDA of €6.2 million and an EBITDA margin of 2.7 per cent.
At € 17.5 million, Tirendo’s revenues in the first six months remained nearly unchanged. But whereas Tirendo’s revenues increased by 131.2 per cent in the first quarter of the current fiscal year, business in the second quarter was unable to follow up on this positive development. In light of the strong prior-year base and the still low proportion of international business, Tirendo’s revenues decreased 33.8 per cent to € 9.2 million in the second quarter of the 2014 fiscal year.
When Tirendo is taken out of the equation, Delticom achieved revenues of €208.6 million during the first half of the year, 1.7 per cent less than the €212.2 million during the same period of the previous year. EBITDA amounted to €13.3 million, 30.2 per cent higher than a year earlier; this equates to an EBITDA margin of 6.4 per cent, after 4.8 per cent the previous year. Despite the weaker business development in the first half of this year, Delticom says it remains sufficiently profitable, even after the Tirendo takeover, to compensate for Tirendo’s losses.
Revenue growth of ten per cent and EBITDA on par with 2013 remains Delticom’s goal for the full year, and the company says the target it has set for the second half of year is “more ambitious” than that set at the start, and is based on an assumption that there will be greater demand for winter tyres this year in comparison to winter 2013/14. However in its semi-annual report of 14 August, the online tyre retailer included the caveat that “it remains to be seen as to what extent the hopes of the tyre trade for positive winter business can be fulfilled this year.”
Management change at Tirendo
Recently Delticom announced that, effective 31 December 2014, the Tirendo management team – managing directors Markus Bihler, Erik Heinelt and Felix Vögtle – will leave the company. They were replaced by Delticom managers Sascha Jürgensen and Andreas Faulstich as of 21 July.
Further Delticom financial information is available in our company profile archive.