Delticom AG

Quarterly Report • Aug 14, 2024

Semi-Annual Report 2024

Profile

With the brand ReifenDirekt, Delticom AG is the leading company in Europe for the online distribution of tyres and complete wheels.

The product portfolio for private and business customers comprises an unparalleled range of around 600 brands and over 80,000 tyre models for cars and motorcycles. Complete wheels and rims complete the product range. The company operates 339 online shops and online distribution platforms in 68 countries, serving more than 19 million customers. In the online shop Reifendirekt.de, sustainable and resource-saving tyres are labelled accordingly and awarded a sustainability seal.

As part of the service, the ordered products can be sent to one of Delticom's around 30,000 partner garages in Europe for mounting at the customer's request.

Based in Hanover, Germany, the company operates primarily in Europe and has extensive expertise in the development and operation of online shops, internet customer acquisition, internet marketing and the establishment of partner networks.

Since its foundation in 1999, Delticom has built up comprehensive expertise in designing efficient and fully integrated ordering and logistics processes. The company's own warehouses are among its most important assets.

In fiscal year 2023, Delticom AG generated revenues of around $€ 476$ million. At the end of last year, the company employed 172 people.

The shares of Delticom AG have been listed in the Prime Standard of the German Stock Exchange since October 2006 (ISIN DE0005146807).

Key Figures		01.01.2024	01.01.2023	$-/+$
		30.06.2024	30.06.2023	(\%; \%p)
Gross merchandise volume	€ million	258.6	243.7	$+6.1$
Revenues	€ million	212.0	197.7	$+7.2$
Total income	€ million	222.4	215.1	$+3.4$
Gross margin ${ }^{1}$	\%	26.4	22.9	$+3.5$
Gross profit ${ }^{2}$	€ million	66.4	62.7	$+6.0$
EBITDA	€ million	7.8	6.8	$+15.2$
EBITDA-Marge	\%	3.7	3.4	$+0.3$
EBIT	€ million	2.8	3.2	$-10.8$
Net income	€ million	0.1	1.5	$-96.0$
Earnings per share	\%	0.00	0.10	$-96.0$
Total assets	€ million	233.5	235.5	$-0.9$
Inventories	€ million	80.6	82.0	$-1.7$
Investments ${ }^{3}$	€ million	3.2	2.2	$+44.3$
Equity	€ million	48.0	41.3	$+16.3$
Equity ratio	\%	20.6	17.5	$+3.0$
Return on equity	\%	0.1	3.7	$-3.6$
Liquidity position ${ }^{4}$	€ million	3.7	2.5	$+48.7$

(1) Gross profit ex other operating income in \% of revenues
(2) Gross profit including other operating income
(3) Investments in tangible and intangible assets (without aquisitions)
(4) Liquidity position = cash and cash equivalents + liquidity reserve

Highlights H1 2024

Gross merchandise
volume amounted to

Revenues

EBITDA totalled

Improvement of operative EBITDA to

Net income amounted to

Increase of equity ratio to

61 thousand

H1 2023: € 1.5 million

20.6
\%

Content

2 Interim Management Report of Delticom AG, Hanover, for the period from 1 January 2024 to 30 June 2024

15 Consolidated Interim Financial Statements of Delticom AG, Hanover, for the period from 1 January 2024 to 30 June 2024

27 Responsibility Statement
28 Review Report

Interim Management Report
of Delticom AG, Hanover, for the period from 1 January 2024 to 30 June 2024

Content

3 Economic Environment

3 Macroeconomic developments
3 Sectoral developments

4 Business performance and earnings situation

4 Revenues
6 Key expense positions
7 Earnings position

9 Financial and assets position

9 Balance sheet
11 Cash flow

11 Organisation

12 Significant events after the reporting date

12 Risk and Opportunity Report

12 Outlook

12 Macroeconomic developments
13 Sectoral developments

Economic Environment

Macroeconomic developments

Global economy

Euro area

Germany

After losing momentum towards the end of 2023, the global economy picked up again in the first few months of the current year. In the advanced economies, gross domestic product increased at a moderate pace in the first quarter 2024. The previously pronounced differences in economic momentum have diminished. While expansion in the United States slowed noticeably, the economy in Europe grew more strongly than experts had expected. In the emerging markets, the pace of expansion accelerated significantly, mainly due to the $1.6 \%$ increase in production in China compared to the previous quarter. Production in India and the emerging markets of South East Asia also increased significantly in most cases. Experts expect a further, noticeable increase in global production in the second quarter of 2024.

After a prolonged period of near-stagnation, the eurozone economy recorded moderate growth of $0.3 \%$ in the first quarter of the current year. The increase is therefore higher than forecasted by experts. It is assumed that the favorable weather conditions boosted construction activity and gave the economy a temporary boost. In addition, net exports and rising household spending provided a positive impetus.

The German economy picked up slightly at the start of the year and recorded a $0.2 \%$ increase in gross domestic product in the first quarter 2024 compared to the same quarter of the previous year. Due to weather conditions, growth was driven in particular by construction investment and foreign trade. However, weak private and public consumer spending and declining investment in equipment had a dampening effect. Experts expect gross domestic product to fall by 0.8 $\%$ in the second quarter compared to the previous quarter. The weak economic momentum was also reflected in the labor market. Although the unemployment rate in June remained unchanged from the previous month at $5.8 \%$, the number of unemployed rose by 4,000 individuals compared to May, or by 19,000 people on a seasonally adjusted basis. As in previous months, the spring recovery was therefore weak at the end of the first half of the year.

Sectoral developments

The replacement tyre business in Germany continued its slight recovery from 2023 in the first half of the year. According to initial estimates by market experts, around $3 \%$ more car tyres were sold by retailers to consumers in Germany in the first six months of the current year compared to the same period of the previous year. While no year-on-year growth was recorded in the summer tyre business,

demand for all-season tyres increased by around $9 \%$. Sales in the winter tyre business were $3 \%$ lower than in the first six months of 2023.

Online trade

The Delticom group generates the majority of its revenues from the online sale of replacement tyres for cars and motorcycles. Complete wheels and rims round off the product range.

In the first six months of the current fiscal year, the Delticom group generated revenues of $€ 212$ million, an increase of $7.2 \%$ after $€ 198$ million in H1 2023. In the previous financial year 2023, the previous shop business was supplemented by platform business. The company provides the technical infrastructure and its sales and process know-how to enable external third parties to sell goods online to Delticom's private and commercial end customers and realises commission contributions for the corresponding share of revenues. The gross merchandise volume in H1 2024 amounts to $€ 259$ million (H1 2023: $€ 244$ million, $+6,1 \%$ ).

Seasonality
The chart Revenues trend summarises the development of the half-year revenues.

Overall, the Delticom group generated revenues of € 97 million (Q1 2023: $€ 78$ million, $-24.0 \%$ ) in the first quarter of the current fiscal year. In the light of early summer temperatures in February and March good sales in the business with private and commercial end customers were realised. Gross merchandise volume for Q1 2024 amounted to $€ 119$ million (Q1 2023: $€ 96.2$ million, +23.8 $\%)$.

In the second quarter, the company generated revenues of € 115 million, a year-on-year decrease of $3.7 \%$ (Q2 2023: € 120 million). Due to demand being brought forward to Q1 as a result of the weather, revenues in the second quarter were lower than in the previous year. In Q2 2023, the start of the changeover business was postponed to the second quarter. The gross merchandise volume totalled $€ 139$ million (Q2 2023: $€ 148$ million, $-5.5 \%$ ).

The Group offers its product range in 68 countries. In H1 2024 revenues in EU countries totalled $€ 177$ million (H1 2023: $€ 164$ million, $+7.8 \%$ ). Across all nonEU countries the revenues contribution for H1 2024 was $€ 35$ million (H1 2023: $€ 33$ million, $+4.2 \%)$.

Revenues by region
in $€$ thousand

	H1'24	$\%$	$+\%$	H1'23	$\%$	$+\%$	H1'22	$\%$
Revenues	211,970	100.0	7.2	197,687	100.0	$-10.0$	219,725	100.0
Regions
EU countries	177,107	83.6	7.8	164,219	83.1	$-9.0$	180,422	82.1
Non-EU countries	34,863	16.4	4.2	33,469	16.9	$-14.8$	39,303	17.9

The following customer numbers are the customer numbers in our core business - the online trade with tyres in Europe. In the first six months of 2024 a total of 271 thousand existing customers (H1 2023: 253 thousand, $+7.2 \%$ ) have once again purchased tyres in one of the Delticom Group's online shops. Existing customers are counted only once during the reporting period, regardless of the number of purchases made during that period.

A total of 306 thousand (H1 2023: 351 thousand, $-12.9 \%$ ) new customers were acquired in Europe in H1 2024. Since the company was founded, more than 19 million customers have made purchases in our online shops. Over the half-year period, the number of active buyers (new customers and repeat customers) is $4.5 \%$ lower than in the same period of the previous year.

Key expense positions

The cost of goods sold (COGS) is the largest expense item; it considers the purchase price of sold products (mainly tyres). Group COGS increased by $2.3 \%$ from $€ 152$ million in H1 2023 to $€ 156$ million in H1 2024. The cost of materials ratio (cost of materials as a percentage of revenues) was $73.6 \%$ in H1 2024 (H1 2023: $77.1 \%$ ). The improvement in the cost of materials ratio is primarily the result of a change in the sales mix.

On average, the company employed 167 people in the first six months of the current financial year (H1 2023: 169). At the reporting date 30.06.2024, a total of 164 employees worked for the Group (30.06.2023: 168). Personnel expenses in the reporting period amounted to $€ 7.0$ million (H1 2023: $€ 7.4$ million, $-5.8 \%$ ). The year-on-year decrease is mainly due to the reduction in headcount. In addition, an inflation compensation bonus was paid to employees in January 2023. The personnel expense ratio (ratio of personnel expense to revenues) was $3.3 \%$ in H1 2024 (H1 2023: $3.7 \%$ ).

Depreciation

The largest single item within other operating expenses is transportation costs. These amounted to $€ 20.4$ million after $€ 16.5$ million in the comparative period ( $+23.6 \%$ ). The increase is primarily due to both the higher business volume as well as the country mix in revenues. Transportation costs as a percentage of revenues amounted to $9.6 \%$ (H1 2023: $8.3 \%$ ).

Warehousing	Inventory costs amounted to $€ 5.8$ million in the reporting period, after $€ 4.6$ million in H1 2023. The increase by $25.9 \%$ is due to the revenues development in the first half of 2024 on the one hand and one-off costs in connection with the relocation of the warehouse location in Hanover on the other. Inventory costs in relation to revenues amounted to $2.8 \%$ (H1 2023: $2.3 \%$ ).
Rents and operating costs	Rents and operating costs amounted to $€ 1.7$ million in the reporting period after $€ 2.3$ million in the previous year. In the previous year, index-linked rent increases led to higher expenses during the year. The right-of-use assets were adjusted accordingly in the second half of 2023 on the basis of the increased rental obligations. The higher expenses in H1 2023 are therefore due to a time lag during the year. In the current reporting year, rental expenses are reduced directly by the IFRS 16 effect via the rights of use.
Marketing	In the reporting period, $€ 6.0$ million (H1 2023: $€ 6.6$ million) was spend on Marketing. The decrease of $8.8 \%$ is primarily due to the measures already introduced in 2023 to increase the efficiency of marketing activities. Marketing expenses in relation to revenues amounted to $2.8 \%$ (H1 2023: $3.3 \%$ ).
Financial and Legal	Finance and legal expense in the reporting period amounted to $€ 2.8$ million, compared with $€ 3.6$ million in the prior year ( $-23.9 \%$ ). The syndicated loan agreement was extended as planned in March 2023. Legal consulting costs were correspondingly lower in H1 2024 than in the previous year.

Earnings position

Gross margin

Other operating income

The company achieved a gross margin (gross margin excluding other operating income) of $26.4 \%$ in the reporting period, compared with $22.9 \%$ in the corresponding prior-year period. The increase is mainly due to a change in the sales mix and the modified sales management mechanism compared to the previous year.

Other operating income decreased by $40.1 \%$ to $€ 10.4$ million in the reporting period (H1 2023: $€ 17.4$ million). The decrease is largely due to the scheduled discontinuation of income from project business generated in the first half of 2023. Marketing subsidies, income from transportation losses and other income are regularly generated from the operating business. In addition, other operating income also includes gains from exchange rate differences amounting to $€ 2.3$ million (H1 2023: $€ 2.7$ million, $-13.4 \%$ ). Delticom reports currency losses within other operating expenses. In H1 2024, they totalled $€ 2.4$ million (H1 2023: $€ 2.5$ million). Accordingly, there is a balance of currency gains and losses of $€-33.4$ thousand (H1 2023: $€ 162.4$ thousand) for the reporting period.

Gross profit

EBITDA

Gross profit for the reporting period amounted to $€ 66.4$ million, compared with a prior-year figure of $€ 62.7$ million $(+6.0 \%)$. In relation to total income of $€ 222$ million (H1 2023: € 215 million), gross profit was 29.9\% (H1 2023: 29.1\%).

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter were significantly higher than in the previous quarter at $€ 7.2$ million (Q2 2023: $€ 7.5$ million, $-4.8 \%$ ) (Q1 2024: $€ 0.6$ million, Q1 2023: $€-0.7$ million). EBITDA totalled $€ 7.8$ million in the reporting period (H1 2023: $€ 6.8$ million, $+15.2 \%$ ). This corresponds to an EBITDA margin of $3.7 \%$ (H1 2023: $3.4 \%$ ). Operating EBITDA after elimination of costs in connection with the refinancing amounted to $€ 8.0$ million in the period under review, compared with $€ 7.2$ million in the prior-year period.

EBITDA
half-year, in $€$ million

EBIT

Financial result

EBIT in the reporting period is $€ 2.8$ million after $€ 3.2$ million in H1 2023 $(-10.8 \%)$. Return on revenues (EBIT as a percentage of revenues) is $1.3 \%$ (H1 2023: $1.6 \%$ ). For the second quarter, earnings before interest and taxes amount to $€ 4.4$ million (Q2 2023: $€ 6.1$ million, $-27.8 \%$ ) after $€-1.6$ million in Q1 2024 (Q1 2023: $€-2.9$ million).

Financial income for the first six months amounted to $€ 117$ thousand (H1 2023: $€ 521$ thousand). Financial expense amounted to $€ 1.3$ million (H1 2023: $€ 1.4$ million). In the first half of 2023, a compounding effect from project receivables existing at the time was realized. At $€-1.1$ million, the financial result was slightly lower than in the previous year (H1 2023: $€-0.8$ million).

The tax result for the first six months amounted to $€-1.6$ million (H1 2023: $€-0.8$ million). H1 2024 includes tax expenses relating to other periods in the amount of around $€ 1.1$ million.

The table Abridged P+L statement summarises key income and expense items from multiple years' profit and loss statements.

Abridged P+L statement in € thousand

	H1'24	\%	$+\%$	H1'23	\%	$+\%$	H1'22	\%
Revenues	211,970	100.0	7.2	197,687	100.0	$-10.0$	219,725	100.0
Other operating income	10,401	4.9	$-40.1$	17,374	8.8	$-9.6$	19,219	8.7
Total operating income	222,370	104.9	3.4	215,061	108.8	$-10.0$	238,944	108.7
Cost of goods sold	$-155,944$	$-73.6$	2.3	$-152,384$	$-77.1$	$-11.9$	$-173,052$	$-78.8$
Gross profit	66,426	31.3	6.0	62,677	31.7	$-4.9$	65,892	30.0
Personnel expenses	$-6,971$	$-3.3$	$-5.8$	$-7,404$	$-3.7$	4.4	$-7,093$	$-3.2$
Other operating expenses	$-51,649$	$-24.4$	6.5	$-48,495$	$-24.5$	$-2.9$	$-49,934$	$-22.7$
EBITDA	7,806	3.7	15.2	6,778	3.4	$-23.5$	8,865	4.0
Depreciation	$-4,994$	$-2.4$	37.8	$-3,624$	$-1.8$	$-20.9$	$-4,580$	$-2.1$
EBIT	2,812	1.3	$-10.8$	3,153	1.6	$-26.4$	4,286	2.0
Net financial result	$-1,148$	$-0.5$	38.4	$-830$	$-0.4$	1430.9	$-54$	$-0.0$
EBT	1,663	0.8	$-28.4$	2,324	1.2	$-45.1$	4,231	1.9
Income taxes	$-1,602$	$-0.8$	105.2	$-781$	$-0.4$	$-43.9$	$-1,393$	$-0.6$
Consolidated net income	61	0.0	$-96.0$	1,543	0.8	$-45.7$	2,839	1.3

Financial and assets position

Balance sheet

As of 30.06.2024 the balance sheet total amounted to $€ 233.5$ million (31.12.2023: € 191.6 million, 30.06.2023: € 235.5 million).

Fixed Assets amounted to $€ 98.3$ million (31.12.2023: € 94.1 million) as at the reporting date 30.06.2024. The increase of $€ 4.2$ million since the beginning of the year is mainly due to the investments made into the warehouse infrastructure.

The largest item in current assets is inventories. Since the beginning of the year, inventories have increased by $€ 39.4$ million to $€ 80.6$ million (31.12.2023: $€ 41.2$ million) as part of seasonal stockpiling. Compared with the reporting date,

inventories are lower by $€ 1.4$ million (30.06.2023: $€ 82.0$ million). The share of inventories in total assets amounted to $34.5 \%$ as of 30.06.2024 (31.12.2023: $21.5 \%, 30.06 .2023: 34.8 \%)$.

Receivables and other assets

Payables

Since the beginning of the year, trade accounts payable have increased by $€ 25.9$ million from $€ 61.5$ million to $€ 87.4$ million. Compared to the reporting date, trade accounts payable are lower by $€ 2.1$ million (30.06.2023: $€ 89.4$ million). The share of trade payables in total assets was $37.4 \%$ (31.12.2023: $32.1 \%, 30.06 .2023: 38.0 \%)$.

Abridged balance sheet in € thousand

	30.06 .24	$\%$	$+\%$	31.12 .23	$\%$	30.06 .23	$\%$
Assets
Non-current assets	111,273	47.7	2.2	108,910	56.9	118,547	50.3
Fixed assets	98,319	42.1	4.5	94,128	49.1	95,404	40.5
Other non-current assets	12,953	5.5	$-12.4$	14,782	7.7	23,143	9.8
Current assets	122,187	52.3	47.8	82,648	43.1	116,966	49.7
Inventories	80,596	34.5	95.5	41,224	21.5	81,981	34.8
Receivables	37,919	16.2	11.0	34,170	17.8	32,515	13.8
Liquidity	3,672	1.6	$-49.4$	7,253	3.8	2,470	1.0
Assets	233,460	100.0	21.9	191,558	100.0	235,513	100.0
Equity and Liabilities
Long-term funds	96,268	41.2	2.7	93,769	49.0	93,396	39.7
Equity	48,028	20.6	0.8	47,635	24.9	41,296	17.5
Long-term debt	48,240	20.7	4.6	46,134	24.1	52,101	22.1
Provisions	33	0.0	58.0	21	0.0	21	0.0
Liabilities	48,207	20.6	4.5	46,113	24.1	51,080	21.7
Other/NonCurrentLiabilities	0	0.0	0.0	0	0.0	1,000	0.4
Short-term debt	137,191	58.8	40.3	97,788	51.0	142,117	60.3
Provisions	6,630	2.8	$-4.5$	6,941	3.6	3,199	1.4
Liabilities	130,562	55.9	43.7	90,848	47.4	138,918	59.0
Equity and Liabilities	233,460	100.0	21.9	191,558	100.0	235,513	100.0

Liquidity position
Liquidity as of 30.06.2024 totalled $€ 3.7$ million (31.12.2023: $€ 7.3$ million, 30.06.2023: $€ 2.5$ million). On 30.06.2024, the company's net cash position (liquidity less liabilities from current accounts) amounted to $€-24.8$ million (31.12.2023: $€-2.2$ million, 30.06.2023: $€-31.7$ million). The improvement compared to the reporting date of the pevious year is mainly due to the reduced utilization of credit lines. In addition to the utilization of credit lines, short-term financial debt also includes the current portion of lease obligations from long-

term rental agreements in the amount of $€ 7.6$ million (31.12.2023: € 9.4 million, 30.06.2023: € 8.8 million).

Equity

Operating cash flow

Investments

Financing activities

Organisation

Legal structure

Equity amounted to $€ 48.0$ million on the balance sheet date (31.12.2023: $€ 47.6$ million, 30.06.2023: $€ 41.3$ million). The equity ratio of the company at the balance sheet date stood at $20.6 \%$ (31.12.2023: $24.9 \%, 30.06 .2023$ : $17.5 \%)$.

Cash flow

Cash flow from operating activities for H1 2024 amounted to $€-21.5$ million (H1 2023: $€-0.9$ million). The year-on-year change is primarily due to working capital. Trade payables have increased less since the beginning of the year than in the previous year. At the same time, winter stockpiling has been brought forward by a few weeks compared to the previous year. Existing credit lines were utilized to pre-finance the inventory build-up.

Capital expenditures for property, plant and equipment in H1 2024 amounted to $€ 2.9$ million (H1 2023: $€ 1.6$ million). These are mainly investments in equipment for our warehouses. In addition, Delticom invested $€ 0.2$ million in intangible assets in the reporting period (H1 2023: $€ 0.5$ million). Cash flow from investing activities consequently amounted to $€-3.2$ million (H1 2023: $€-2.2$ million).

Cash flow from financing activities amounted to $€ 21.1$ million (H1 2023: $€ 2.6$ million) in the reporting period. There were no current financial liabilities to banks at the end of 2023. Since the beginning of the year, the use of credit lines has increased to $€ 20.8$ million in connection with the inventory build-up. In addition, a medium-term loan and lease liabilities totaling $€ 5.6$ million (H1 2023: $€ 10.1$ million) were repaid in the reporting period.

The following section lists the subsidiaries that are fully consolidated in the consolidated interim financial statements as of 30.06.2024:

Subsidiary	Status
All you need GmbH, Hanover (Germany)	in liquidation
Delticom OE S.R.L., Timisoara (Romania)	active
Delticom TOV, Lwiw (Ukraine)	in liquidation
Delticom Russland 000, Moscow (Russia)	in liquidation
Delticom Ltd., Witney (United Kingdom)	active
DeltiLog GmbH, Hanover (Germany)	active
DS Road GmbH, Pratteln (Switzerland)	active
Extor GmbH, Hanover (Germany)	active
Giga GmbH, Hamburg (Germany)	active
Prebo Gesellschaft für Reifengroßhandel und Logistik mbH, Hanover (Germany)	active
Ringway GmbH, Hanover (Germany)	active
Tirendo GmbH, Berlin (Germany)	active
TyresNET GmbH, Munich (Germany)	active

Significant events after the reporting date

There were no events of particular importance after the end of the period under review.

Risk and Opportunity Report

As a company that operates internationally, Delticom is exposed to varying types of risk. In order to be able to identify, evaluate and respond to such risks in a timely fashion, Delticom put in place a risk management system early on. The system is based on corporate guidelines for the early risk detection and risk management. An outline of the risk management process is presented in the combined Management Report for the financial year from January 1, 2023 to December 31, 2023, together with a list of key individual risks and opportunities.

The risk and opportunity position has not changed significantly compared to the presentation in the combined Group management report for the 2023 financial year.

Outlook

Macroeconomic developments

Global economy

The Kiel Institute for the World Economy (IfW) expects the moderate expansion of the global economy to continue in the current year. The prospects for private consumption have improved in view of real wages no longer falling or even rising against the backdrop of falling inflation and rising remuneration. The experts see risks in the continued restrictive monetary policy and the uncertainties in connection with the US presidential elections. An escalation of trade conflicts could have a dampening effect on global economic activity. Overall, the IfW expects global gross domestic product to increase by $3.2 \%$ in the current year.

The forecast has therefore been raised by 0.4 percentage points compared to the March estimate.

The economic weakness in the eurozone should gradually be overcome over the course of the year. Experts assume that private consumption will regain momentum, as real disposable income will increase noticeably in view of the good labor market situation, significantly higher wages and simultaneously lower inflation. In addition, financing conditions are expected to improve with the anticipated easing of monetary policy. Last but not least, the external economic environment should also provide more impetus for economic activity. The experts see risks in view of increased political uncertainty against the backdrop of the results of the European elections. All in all, the IfW experts estimate that gross domestic product in the eurozone will increase by $0.9 \%$ over the year as a whole.

Over the course of the year, economic activity in Germany will remain on a moderate upward trend. According to IfW experts, dampening factors such as a restrictive monetary policy and the aftermath of the energy crisis will gradually subside. In addition, the slight upturn in sales markets should also see foreign business pick up further momentum. However, there is still no strong economic momentum. On the one hand, the business and consumer climate remains at a low level. Secondly, the scope for expansion is increasingly limited by structural obstacles - not at least the demographic change. The experts at the IfW expect German gross domestic product to increase by $0.2 \%$ overall in 2024.

Sectoral developments

Although the recovery in demand for replacement tyres from 2023 has continued overall in the first six months of the current year in Germany, the largest single market in Europe, it remains to be seen whether this trend will continue which also depends on the general economic conditions.

In their forecast at the beginning of the year, the German E-Commerce and Distance Selling Trade Association (bevh) and the EHI Retail Institute assumed that the downward trend would end over the course of the year and that revenues in e-commerce in Germany would grow by $2.0 \%$ for the year as a whole. Although revenues in e-commerce were still $1.2 \%$ below the previous year's figure in the first half of the year, a small year-on-year increase in revenues of $0.2 \%$ was recorded in the second quarter. In view of current uncertainties regarding political destabilization and geopolitical conflicts, experts do not yet expect the consumer crisis to end. Against this backdrop, further developments remain to be seen.

The company continues to forecast revenues of between $€ 450$ million and $€$ 470 million for the current financial year and is therefore sticking to the forecast

from March 2024. At present, neither an upturn nor a deterioration in market conditions is expected. Although experts for 2024 continue to forecast that the economic weakness in Europe will gradually be overcome, economic and geopolitical risks remain after the first six months of the current financial year. We assume that the strong winter business in 2023 will not be repeated this year. As in previous years, business performance for the year as a whole will largely depend on the course of the fourth quarter.

For operating EBITDA for the year as a whole, the management is still aiming for a range of $€ 19$ million to $€ 21$ million, depending on revenues.

In the first half of the year, the number of new customers was down on the previous year. At this point in time, we still expect to be able to convince at least as many new customers of our product and service offerings for the year as a whole as in the 2023 financial year.

For the first half of 2024, there was a $7.2 \%$ increase in existing customers compared to the previous year. In view of the multi-year replacement cycle, we are confident of being able to greet some of the new customers we have acquired over the past few years as repeat customers in our shops in the coming months.

In line with our revenues and liquidity planning for the current year, we will build up or reduce inventories in the coming months. Close control of working capital management will continue to play a central role. For the current year, we continue to plan a positive free cash flow in the mid single-digit million range.

Consolidated Interim Financial Statements of Delticom AG, Hanover, for the period from 1 January 2024 to 30 June

2024

Content

16 Abridged Consolidated Income Statement

17 Abridged Statement of Recognised Income and Expenses

17 Abridged Consolidated Balance Sheet
17 Assets
18 Shareholders' Equity and Liabilities

19 Abridged Consolidated Cash Flow Statement

20 Abridged Statement of Changes in Shareholders' Equity

21 Selected explanatory notes to the Consolidated Interim Financial Statements of Delticom AG
21 Reporting companies
21 Employees
21 Seasonal effects
21 Principles of accounting and consolidation, balance sheet reporting and valuation methods
22 Group of consolidated companies and basics
23 Changes in significant accounting policies
23 Profit and loss statement, balance sheet and statement of cash flow
24 Notes to the income statement
24 Revenues
24 Other operating expenses
25 Earnings per share
25 Calculation of earnings per share
25 Dividends
25 Related parties disclosure
25 Contingent liabilities and other financial commitments
25 Declaration according to section 115 Abs. 5 WpHG (Securities Act)

Abridged Consolidated Income Statement

	01.01.2024	01.01.2023
in € thousand	30.06.2024	$-30.06 .2023$
Revenues	211,970	197,687
Other operating income	10,401	17,374
Total operating income	222,370	215,061
Cost of goods sold	$-155,944$	$-152,384$
Gross profit	66,426	62,677
Personnel expenses	$-6,971$	$-7,404$
Deprication of intangible assets, Rights of use and property, plant and equipment	$-4,994$	$-3,624$
Bad debt losses and one-off loan provisions	$-1,436$	$-1,027$
Other operating expenses	$-50,213$	$-47,468$
Earnings before interest and income taxes (EBIT)	2,812	3,153
Financial expenses	$-1,265$	$-1,350$
Financial income	117	521
Net financial result	$-1,148$	$-830$
Earnings before income taxes (EBT)	1,663	2,324
Income taxes	$-1,602$	$-781$
Consolidated net income	61	1,543
Thereof allocable to:
Shareholders of Delticom AG	61	1,543
Earnings per share (basic)	0.00	0.10
Earnings per share (diluted)	0.00	0.10

Abridged Statement of Recognised Income and Expenses

	01.01.2024	01.01.2023
in € thousand	30.06.2024	30.06.2023
Consolidated Net Income	61	1,543
Changes in the financial year recorded directly in equity
Other comprehensive income for the period	338	94
Income and expense that will be reclassified to the statement of income at a later date
Changes in currency translation	2	94
Changes in the revaluation reserve	336	0
Total comprehensive income for the period	399	1,637
Attributable to shareholders of the parent	399	1,637

Abridged Consolidated Balance Sheet

Assets

in € thousand	30.06.2024	31.12.2023
Non-current assets	111,273	108,910
Intangible assets	37,098	37,255
Rights of use	47,833	46,103
Property, plant and equipment	13,387	10,769
Financial assets	2	2
Deferred taxes	9,081	10,665
Long-term accounts receivable	3,872	4,117
Current assets	122,187	82,648
Inventories	80,596	41,224
Short-term accounts receivable	21,858	17,214
Other current assets	16,006	16,901
Income tax receivables	55	55
Cash and cash equivalents	3,672	7,253
Assets	233,460	191,558

Shareholders' Equity and Liabilities

in € thousand	30.06 .2024	31.12 .2023
Equity	48,028	47,635
Equity attributable to Delticom AG shareholders	48,028	47,635
Subscribed capital	14,793	14,805
Share premium	19.051	19.070
Stock option plan	177	151
Expenses and income recognised directly in equity	43	$-295$
Retained earnings	0	0
Net retained profits	13,965	13,903
Liabilities	185,431	143,923
Non-current liabilities	48,240	46,134
Long-term borrowings	48,207	46,113
Non-current provisions	33	21
Current liabilities	137,191	97,788
Provisions for taxes	2,213	2,076
Other current provisions	4,417	4,865
Contractual liabilities	3,976	4,028
Accounts payable	87,350	61,478
Short-term borrowings	28,459	9,429
Other current liabilities	10,777	15,913
Shareholders' equity and liabilities	233,460	191,558

Abridged Consolidated Cash Flow Statement

in € thousand	$\begin{array}{r} 01.01 .2024 \ -30.06 .2024 \end{array}$	$\begin{array}{r} 01.01 .2023 \ -30.06 .2023 \end{array}$
Earnings before interest and income taxes (EBIT)	2,812	3,153
Depreciation of intangible assets and property, plant and equipment	4,994	3,624
Changes in other provisions	$-448$	$-1,304$
Other non-cash expenses and income	1,087	4,155
Gain (-) / loss (+) from the disposal of non-current assets	$-67$	0
Changes in inventories	$-39,372$	$-38,641$
Changes in receivables and other assets not allocated to	$-10,394$	1,349
investing or financing activity
Changes in payables and other liabilities not allocated to	21,047	28,019
investing or financing activity
Interest received	117	127
Interest paid	$-1,265$	$-1,350$
Income tax paid	$-29$	$-22$
Cash flow from operating activities	$-21,519$	$-890$
Payments for investments in property, plant and equipment	$-2,948$	$-1,647$
Payments for investments in intangible assets	$-206$	$-539$
Cash flow from investing activities	$-3,154$	$-2,186$
Payments for the acquisition of treasury shares	$-32$	0
Cash inflow of financial liabilities	26,728	12,636
Cash outflow of financial liabilities	$-5,605$	$-10,073$
Cash flow from financing activities	21,091	2,563
Changes in cash and cash equivalents due to currency translation	$-1$	$-1$
Cash and cash equivalents at the start of the period	7,253	2,984
Changes in cash and cash equivalents	$-3,582$	$-513$
Cash and cash equivalents - end of period	3,672	2,470

Abridged Statement of Changes in Shareholders' Equity

	Sub- scribed capital	Share premium	Reserve from currency translation	Stock op- tion plan	Revaluati on reserve	Retained earnings	Net retained profits/losses	Total	Non control- ling interests	Total equity
as of 1 January
2023	14,831	47,667	$-406$	272	0	200	$-22,893$	39,670	0	39,670
Stock option plan				$-11$				11	0	$-11$
Net Income							1,543	1,543	0	1,543
Other comprehensive income			94				0	94	0	94
Total comprehensive income			94				1,543	1,637	0	1,637
as of 30 June 2023	14,831	47,667	$-312$	261	0	200	$-21,350$	41,296	0	41,296
as of 1 January 2024	14,805	19,070	$-295$	151	0	0	13,903	47,635	0	47,635
Buptack of own shares	$-12$	$-20$						$-32$	0	$-32$
Stock option plan	0			26				26	0	26
Net income							61	61	0	61
Other comprehensive income			2		336		0	338	0	338
Total comprehensive income			2		336		61	399	0	399
as of 30 June 2024	14,793	19,051	$-293$	177	336	0	13,965	48,028	0	48,028

Selected explanatory notes to the Consolidated Interim Financial Statements of Delticom AG

Reporting companies

Delticom AG (hereinafter referred to as the "company") is the parent company of the Delticom Group (hereinafter referred to as the "Delticom"). Delticom AG is entered in the commercial register of local court of Hanover with register number HRB58026. Delticom's address is Brühlstrasse 11, 30169 Hanover, Germany.

Delticom is Europe's leading online retailer of tyres and complete wheels. The product range for private and commercial customers includes around 600 brands and over 80,000 tyre models for cars and motorbikes as well as complete wheels. Customers are also able to have the ordered products sent for assembly to one of Delticom AG's around 30,000 partner garages across Europe.

Detailed information on the reporting company is presented in the combined (Group) management report of the annual report 2023 in the section Business activities and in the section Organization.

For technical reasons, rounding differences may occur in the tables.

Employees

From 01.01.2024 to 30.06.2024 Delticom had an average of 167 employees.

Seasonal effects

In Germany, but also in the Alpine region and in Northern Europe, the seasonal weather changes shape the course of business in the tyre trade. As most motorists buy their winter tyres with the first snowfall and thus in the last months of the year, the first quarter is usually somewhat weaker. The second quarter of the year, on the other hand, is traditionally strong in terms of revenues: temperatures in April and May are often already comparatively high and the sometimes pleasantly warm weather leads many car drivers to buy new summer tyres.

Finally, the third quarter typically levels off again somewhat: In the transition from the summer to the winter tyre business, revenues are somewhat weaker. In most European countries, the last quarter is usually the strongest in terms of revenues. In the darker months of the year, road conditions become more difficult, braking distances increase - and many drivers become directly aware of the need for new tyres. Weather-related shifting effects between the quarters and base effects compared to the previous year are unavoidable.

Principles of accounting and consolidation, balance sheet reporting and valuation methods

These interim consolidated financial statements for the period 01.01.2024 - 30.06.2024 (hereinafter also referred to as "interim financial statements") have been prepared in accordance with the Inter-

national Financial Reporting Standards (IFRS) applicable to interim financial reporting as adopted by the International Accounting Standards Board (IASB) and as adopted by the European Union (EU). All IFRS standards and IFRIC, in particular IAS 34 (Interim Financial Reporting), effective and mandatory at the reporting date have been taken into account.

IAS 34 requires at least the following disclosures in an interim financial report:

• an abbreviated statement of financial position (balance sheet)
• either (a), an abbreviated statement of comprehensive income or (b), an abbreviated statement of comprehensive income and an abbreviated income statement
• an abbreviated statement of changes in equity
• an abbreviated statement of cash flows
• selected explanatory notes

The interim consolidated financial statements in accordance with IAS 34 do not contain all the notes and disclosures required for consolidated financial statements and should therefore be read in conjunction with the consolidated financial statements as of 31.12.2023. The annual report 2023, which contains the consolidated financial statements as of 31.12.2023, is available to download from the Investor Relations section of the company website or from the following link: https://www.delti.com/ en/investor-relations/reports-presentations/.

The fair value of the existing financial instruments approximates the carrying amount for all balance sheet items. The financial instruments in the category "Financial assets held for trading" amounting to $€ 165$ thousand (31.12.2023: € 0 thousand) and in the category "Financial liabilities held for trading" amounting to $€ 419$ thousand (31.12.2023: € 946 thousand) are classified in level 2 of the fair value hierarchy. As in previous years, there are no fair values in hierarchy level 3. Changes in fair values were recognized in the statement of comprehensive income. Valuation is based on current ECB reference rates and forward premiums or discounts.

Due to the short-term maturities of payments, the carrying amount of trade receivables corresponds to the fair value. Income taxes in the income statement are calculated in the interim consolidated financial statements in accordance with IAS 34.30c using a tax rate and essentially include tax expenses from the recognition of deferred tax assets.

Group of consolidated companies and basics

In addition to Delticom AG as the parent company, the group of consolidated companies includes eight domestic and five foreign subsidiaries, all of which have been fully consolidated in the interim consolidated financial statements.

The following companies were fully consolidated in the current fiscal year:

Subsidiary	Status
All you need GmbH, Hanover (Germany)	in liquidation
Delticom OE S.R.L., Tinnisoara (Rumänien)	active
Delticom TOV, Lwiw (Ukraine)	in liquidation
Delticom Russland 000, Moscow (Russia)	in liquidation
Delticom Ltd., Witney (United Kingdom)	active
DeltiLog GmbH, Hanover (Germany)	active
DS Road GmbH, Prattein (Switzerland)	active
Extor GmbH, (Germany)	active
Giga GmbH, Hamburg (Germany)	active
Pnebo Gesellschaft für Reifengroßhandel und Logistik mbH, Hanover (Germany)	active
Ringway GmbH, Hanover (Germany)	active
Tirendo GmbH, Berlin (Germany)	active
TyresNET GmbH, München (Germany)	active

There have been no changes in the scope of consolidation compared with the consolidated financial statements as of 31.12.2023.

Changes in significant accounting policies

The accounting policies and consolidation principles applied in these interim consolidated financial statements correspond to those applied in the company's consolidated financial statements as of 31.12.2023. Further details can be found in the notes to the consolidated financial statements for the 2023 financial year.

The regulations to be applied for the first time as of 01.01.2024 had no influence on the accounting and valuation within the Delticom Group. For 30.06.2024 the IFRS issued and adopted into EU law are only mandatory until reporting periods later than the calendar-same half-year, unless an option of early application has been exercised.

The valuation of land and buildings was an exception. Here, a change was made in 2024 from measurement at amortized cost to revaluation of the assets. This revaluation resulted in an increase of $€$ 499 thousand in the carrying amounts of the land and buildings. The adjustment to the valuation is presented in the revaluation reserve in equity, taking into account deferred taxes of $€ 163$ thousand.

Profit and loss statement, balance sheet and statement of cash flow

Detailed explanations of business development and the profit and loss statement can be found in the chapter Business Performance and Earnings Situation of the interim management report. The chapter Financial and Assets Position contains further information on the balance sheet and the cash flow statement.

The majority of sales contracts (and the resulting revenues) exist between Delticom and private end customers. Delticom is a one-segment company with a focus on e-commerce. Revenues are categorized by geographical region into EU and non-EU countries. Due to the short payment terms and comprehensive monitoring, it is not necessary to categorise the payment default risk. The e-commerce products sold lead to clearly identifiable contractual performance obligations.

Notes to the income statement

The notes to the income statement, including explanations of significant events and business transactions, are provided in the presentation of results of operations in the interim Group management report.

Revenues

Revenues relate almost exclusively to revenues from the delivery of goods to customers for the period from 01.01.2024 to 30.06.2024, of which $€ 98,550$ thousand (H1 2023: € 97,316 thousand) were revenues in Germany. In the previous year, the previous shop business was supplemented by platform business. This resulted in a shift of shop revenues to the platform. Accordingly, commission income is realized for the shifted share of revenues. The transfer of parts of shop revenues has no negative impact on the company's profitability.

Other operating expenses

The following table shows the development of the other operating expenses.

In €thousand	H1'24	H1'23
Transportation costs	20,367	16,477
Warehousing costs	5,831	4,633
Credit card fees	1,598	1,386
Marketing costs	5,977	6,553
Operations centre costs	5,662	5,774
Rents and overheads	1,692	2,267
Financial and legal costs	2,759	3,625
IT and telecommunications	1,159	1,153
Expenses from exchange rate differences	2,363	2,529
Other	2,804	3,071
Summe	50,213	47,468

Income Taxes

Taxes on income include non-period original and deferred tax expenses of $€ 152$ thousand and $€ 907$ thousand respectively.

Earnings per share

Basic and diluted earnings per share are $€ 0.00$ (H1 2023: € 0.10).

Calculation of earnings per share

In accordance with IAS 33, basic earnings per share are calculated as the quotient of the profit for the period after tax of $€ 61,355.02$ (H1 2023: € 1,542,678.66) and the weighted average number of ordinary shares outstanding during the financial year of $14,813,735$ (H1 2023: 14,831,361).

No share options were exercised in the reporting period. The vesting period for all share options granted is four years starting on the respective issue date. In principle, all shares issued must be taken into account for the calculation of diluted EPS if the share options have a dilutive effect. This is the case if the issue price of the new shares is below the average market price of the ordinary shares in circulation during the period under review. There is a dilutive effect in H1 2024 in the amount of 395,067 ordinary shares, which, however, does not lead to a change in earnings per share of $€ 0.00$.

Dividends

No dividend was paid for the past fiscal year 2023 (previous year: € 0).

Related parties disclosure

Related parties within the meaning of IAS 24 are the Managing and Supervisory Boards of Delticom AG (category persons in key positions) as well as Binder GmbH and Prüfer GmbH (category significant influence on the reporting company). All transactions with related parties have been contractually agreed and executed under the same conditions as are usual with unrelated third parties.

Contingent liabilities and other financial commitments

There were no significant changes in other financial obligations compared to 31.12.2023.

As of the reporting date, there were no contingent liabilities or claims.

Declaration according to section 115 Abs. 5 WpHG (Securities Act)

These interim consolidated financial statements and the interim Group management report have been reviewed by the auditor.

German Corporate Governance Codex

The website https://www.delti.com/de/investor-relations/corporate-governance/entsprechungserklaerung/ contains the current declarations pursuant to Section 161 AktG on the German Corporate Governance Code by the Managing and Supervisory Boards of Delticom AG.

Responsibility Statement

To the best of our knowledge, we declare that, according to the principles of proper interim consolidated reporting applied, the interim consolidated financial statements provide a true and fair view of the company's net assets, financial position and results of operations, that the interim consolidated management report presents the company's business including the results and the company's position such as to provide a true and fair view and that the major opportunities and risks of the company's anticipated growth for the remaining financial year are described.

Hanover, 14.08.2024
(The Management Board)

Review Report

To Delticom AG

We have reviewed the Condensed Consolidated Interim Financial Statements - comprising the consolidated balance sheet, the consolidated income statement, the consolidated cash flow statement, the consolidated statement of changes in shareholder's equity and selected explanatory notes - and the Interim Group Management Report of Delticom AG, Hanover, for the period from 1 January 2024 to 30 June 2024, which are part of the Half-Year Financial Report pursuant to Article 115 of the German Securities Trading Act WpHG (Wertpapierhandelsgesetz, WpHG). The preparation of the Condensed Consolidated Interim Financial Statements in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and of the Interim Group Management Report in accordance with the requirements of the German Securities Trading Act (WpHG) applicable to interim group management reports is the responsibility of the Company's Management Board. Our responsibility is to issue a review report on the Condensed Consolidated Interim Financial Statements and on the Interim Group Management Report based on our review.

We conducted our review of the condensed consolidated interim financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW) and additionally observed in the International Standard on Review Engagements "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" (ISRE 2410). These standards require that we plan and perform the review so that we can preclude through critical evaluation, with moderate assurance, that the abridged consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports. A review is essentially limited to the questioning of Company personnel and analytical assessments and therefore does not provide the assurance as is attainable in a financial statement audit. Since, in accordance with our mandate, we have not performed an audit of the financial statement, we cannot issue an audit opinion.

Based on our review, no matters have come to our attention that cause us to presume that the Condensed Consolidated Interim Financial Statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU or that the Interim Group Management Report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act (WpHG) applicable to interim group management reports.

Bremen, 14 August 2024

BDO AG
Wirtschaftsprüfungsgesellschaft

The Delticom Share

(1) based on closing prices
(2) based on official closing price at end of quarter

Estimates for 2024

Estimates for 2025

Estimates for 2025

Broker	Analyst	Recom- mendation	Target price	Sales (€m)	EBITDA (€m)	EBIT (€m)	EBIT (\%)	EPS (€)	Sales (€m)	EBITDA (€m)	EBIT (€m)	EBIT (\%)	EPS (€)
Metzler	Felix DennI	Hold	3.70	460.0	19.0	12.0	2.6	0.48	476.0	21.0	12.0	2.5	0.51
Quirin	Daniel Kukalj	Buy	4.80	456.0	19.0	10.0	2.2	0.42	463.0	21.0	12.0	2.6	0.51
Montega	Bastian Brach	Buy	5.50	469.2	18.2	8.6	1.8	0.29	489.6	21.7	11.2	2.3	0.40
		Average	4.67	461.7	18.7	10.2	2.2	0.40	476.2	21.2	11.7	2.5	0.47

Imprint

Publisher	Delticom AG
	Brühlstraße 11
	30169 Hanover
	Germany
Contact Investor Relations	Melanie Becker
	Brühlstraße 11
	30169 Hanover
	Phone: +49 511 93634-8903
	E-Mail: melanie.becker@delti.com