Quarterly Report • Aug 14, 2017
Quarterly Report
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Delticom AG is an E-Commerce company operating primarily in Europe and the USA. It specialises in the design and operation of online shops, Internet-based customer acquisition, internet marketing, developing partner networks and complex, highly efficient product picking and distribution logistics.
Delticom AG is the leading online distributor of tyres and automotive accessories. Our product range also includes the online second-hand vehicle trade and efood. Delticom has extensive experience in creating shops for the international market and in trans-national E-Commerce. In addition to design, Delticom also provides product descriptions and a comprehensive customer service programme in your national language. Establishing efficient warehousing and logistics processes is utilised not only in selling tyres, used vehicles and online grocery shopping, but is also offered to third parties as an additional service.
Since its establishment in Hanover, Germany in 1999, the company has accrued exceptional expertise in designing efficient, fully integrated internal ordering and logistics processes. The company owns its own warehouses, including a fully automated small item warehouse.
In 2016, Delticom AG generated sales in excess of € 600 million and achieved an EBITDA of € 15.1 million. The E-Commerce specialist operates in 71 countries with over 430 onlineshops and online distribution platforms, serving over 11.4 million customers. The range of tyres offered to retail and commercial customers includes over 100 brands and more than 25,000 models of sedans, motorbikes, trucks, utility vehicles, buses and complete wheel sets. Customers are also able to have the ordered products sent to one of the 43,000 service partners of Delticom AG around the world.
Our range also encompasses over 300,000 automotive parts and accessories, including motor oils, snow chains and batteries. Entry into the business of online used car selling has rounded off the automotive offering. In this sense, Delticom AG has developed from a classic online retailer to an online solutions provider. Delticom AG also now offers a comprehensive range of around 20,000 different food items.
The shares of Delticom AG have been listed in the Prime Standard of the German Stock Exchange since October 2006 (ISIN DE0005146807).
| Key Figures | 01.01.2017 – 30.06.2017 |
01.01.2016 – 30.06.2016 |
–/+ (%, %p) |
|
|---|---|---|---|---|
| Revenues | € million | 297.1 | 275.1 | +8.0 |
| Total income 1 Gross margin |
€ million % |
309.3 21.0 |
284.1 23.6 |
+8.9 –2.6 |
| 2 Gross profit |
€ million | 74.4 | 74.0 | +0.6 |
| EBITDA | € million | 5.0 | 6.1 | –18.8 |
| EBITDA-Marge | % | 1.7 | 2.2 | –0.5 |
| EBIT | € million | 1.3 | 1.6 | –18.1 |
| Net income | € million | 0.8 | 0.9 | –13.1 |
| 3 Earnings per share |
€ | 0.06 | 0.07 | –13.6 |
| Total assets | € million | 216.3 | 225.5 | –4.1 |
| Inventories | € million | 90.6 | 91.9 | –1.4 |
| 4 Investments |
€ million | 3.1 | 0.5 | +520.0 |
| Equity | € million | 52.7 | 55.8 | –5.6 |
| Equity ratio | % | 24.4 | 24.8 | –0.4 |
| Return on equity | % | 1.5 | 1.6 | –0.1 |
| 5 Liquidity position |
€ million | 3.0 | 8.3 | –63.4 |
| Operating cash flow | € million | –12.4 | –9.1 | +36.0 |
| 6 Free cash flow |
€ million | –15.5 | –29.2 | –46.8 |
(1) Gross profit ex other operating income in % of revenues
(2) Gross profit
(3) Undiluted
(4) Investments in tangible and intangible assets (without aquisitions)
(5) Liquidity position = cash and cash equivalents
(6) Free cash flow = Operating cash flow – Cashflow from investing activities
Revenues € >297 million
H1 2016: € 275 million
Consolidated net income
€ 800 thousand
€ 0.06 earnings per share
More than
in over 15 countries
Almost
599,000
new customers in H1 2017
More than
538,000
customers made a repeat purchase with us
Significant events after the reporting date
Macroeconomic developments In the first six months of the current year, the global economy growth has continued to gain strength. The economic situation has improved not just in the advanced economies, but also in important developing countries such as China, Brazil and Russia. Developments in the euro zone have added positive momentum to the global economy, with strong economic growth continuing in the currency area in recent months. In addition to Germany, other major industrialized nations recorded an increase in the pace of growth in the second quarter, among them France, Italy and Spain. However, despite the resulting increase in hiring, the differential between member states remains considerable.
The unemployment rate in France still stands at a high level. Experts see the struggle to increase employment as a central task facing the new President. And whereas in Italy, the employment situation which has barely improved in the past two years is acting as a drag on domestic demand, by the middle of the year, the substantial pace of growth in Spain continued unchecked. In Great Britain, economic activity has been depressed by the huge uncertainties surrounding the course of the Brexit negotiations. In H1-17 the German economy maintained the pace of growth that had heralded the start of the year. Thanks to a robust labor market, consumer spending once again proved to be a supporting pillar of the economy.
According to the manufacturers' association ETRMA, sales of replacement car tyres to distributors in Europe were 1-% lower than in the same period of the previous year. Figures for the first quarter were still clearly positive, however sales in the second quarter dropped by 6-% compared to H1-16. Here in Germany, the spring-like weather persuaded many drivers to make an early switch to summer tyres in March, resulting in a noticeably decline in summer tyre business in the second quarter. According to current figures published by the industry associations, in the first six months of the current year, consumer sales of replacement car tyres booked by German tyre dealers were down by 2.8-%. It is anticipated that the value of the summer tyre business saw a decline of 4.9-% in the first half of 2017.
German retailers profited from a buying mood among consumers in the first half of 2017. In the first six months of the current year, sales were up by 3.5-% compared to the same period last year. According to the Federal Statistical Office, food retailers saw an increase of 1.5-% in the first quarter of 2017 alone.
According to trade association Bundesverband E-Commerce und Versandhandel Deutschland e.V. (bevh), in the first six months of the current year online retailers in Germany recorded an increase of 11.1-%. As an E-Commerce company, Delticom has profited from the global increase in acceptance of the Internet as a distribution channel of ever increasing importance.
Group Delticom Group generates the bulk of its revenues through online sales of replacement tyres for cars, motorcycles, trucks and industrial vehicles. Automotive components and accessories, used cars, premium gourmet and organic food as well as services complete the product offering.
In H1-17 the Group recognized revenues of €-297.1-million, an increase of 8.0-% after €-275.1-million in the prior-year period.
Seasonality The chart Revenues trend summarises the development of the half-year revenues.
Delticom generated revenues of €-126.8-million (Q1-16: €-105.8-million) during the first three months of the current fiscal year. Other than in the previous year, some springlike days in March favored an early start to the summer tyre season. Accordingly, revenues in Q1-17 increased by 19.9-%.
However, with the weather pulling sales forward, the increase in the second quarter was accordingly weaker. In the second quarter, the company generated revenues of €-170.3-million (Q2-16: €-169.3-million, +0.6-%).
Regional split The Group offers its product range in 71 countries. In H1-17 revenues in EU countries totalled €-228.1-million (+5.2-%). Across all non-EU countries the revenue contribution for H1-17 was €-69.0-million (H1-16: €-58.2-million, +18.4-%). In the USA the company managed to increase revenues by more than 50-% compared to the previous year.
table: Revenues by region; in € thousand
| H117 | % | +% | H116 | % | +% | H115 | % | |
|---|---|---|---|---|---|---|---|---|
| Revenues | 297,094 | 100.0 | 8.0 | 275,142 | 100.0 | 10.0 | 250,167 | 100.0 |
| Regions | ||||||||
| EU | 228,140 | 76.8 | 5.2 | 216,928 | 78.8 | 11.4 | 194,773 | 77.9 |
| Rest | 68,954 | 23.2 | 18.4 | 58,214 | 21.2 | 5.1 | 55,394 | 22.1 |
Customer numbers In H1-17 the company was able to acquire a total of 599-thousand new customers (H1-16: 545-thousand, +9.9-%). In addition, a total of 538-thousand existing customers (H1-16: 505-thousand, +6.5-%) made repeat purchases at Delticom Group in the reporting period. Since the company was founded more than 11.4-million customers have made purchases in our online shops.
Warehousing Rents and overheads increased in H1-17 by 5.0-%, from €-2.9-million to €-3.1-million. With the acquisition of the efood and logistics companies taking place at the end of February 2016, the operating costs for the small items warehouse are included in the previous year's expenses from the date of acquisition. Stocking costs amounted to €-3.4-million, after €-3.1-million in H1-16. The 9.9-% increase arises from higher turnover in the warehouses and the described timing effect.
Marketing Marketing expenses in H1-17 amounted to €-12.0-million, after €-12.4-million the previous year. On the one hand, the 3.2-% decrease goes hand in hand with a change in the marketing mix. On the other hand, no TV advertising costs have been incurred for the Tirendo shops since mid of 2016. H1-17 marketing spent with 4.0-% of revenues was lower than last year's 4.5-%.
half-year, in € million
EBIT Earnings before interest and taxes (EBIT) decreased in the reporting period by 18.1-% to €-1.3-million (H1-16: €-1.6-million). This translates into an EBIT margin of 0.5-% (EBIT in percent of revenues, H1-16: 0.6-%).
Thanks to a reduction in depreciation, the decline in EBIT compared to EBITDA was less pronounced. On the expenses side, the company has invested the reduced amount of depreciation in H1-17 almost entirely in new projects.
Financial result Financial income for the first six months amounted to €-22-thousand (H1-16: €-12-thousand). Financial expenses were €-197-thousand (H1-16: €-257-thousand). The financial result totalled €-–175-thousand (H1-16: €-–244-thousand).
Income taxes In the first six months the expenditure for income taxes totalled €-0.4-million (H1-16: €-0.5-million). This equates to a tax rate of 31.7-% (H1-16: 34.3-%).
Net income H1-17 Consolidated net income in the first half of the year totalled €-0.8-million after €-0.9-million in H1-16. This corresponds to earnings per share (EPS) of €-0.06 (H1-16: €-0.07).
The table Abridged P+L statement summarises key income and expense items from multiple years' profit and loss statements.
| in € thousand | ||||||||
|---|---|---|---|---|---|---|---|---|
| H117 | % | +% | H116 | % | +% | H115 | % | |
| Revenues | 297,094 100.0 | 8.0 | 275,142 100.0 | 10.0 | 250,167 100.0 | |||
| Other operating income | 12,161 | 4.1 | 35.8 | 8,957 | 3.3 | 3.1 | 8,689 | 3.5 |
| Total operating income | 309,255 104.1 | 8.9 | 284,100 103.3 | 9.8 | 258,856 103.5 | |||
| Cost of goods sold | –234,835 | –79.0 | 11.8 –210,104 | –76.4 | 9.2 –192,335 | –76.9 | ||
| Gross profit | 74,420 | 24.1 | 0.6 | 73,996 | 26.9 | 11.2 | 66,521 | 26.6 |
| Personnel expenses | –5,247 | –1.8 | 5.4 | –4,979 | –1.8 | 10.3 | –4,514 | –1.8 |
| Other operating expenses | –64,193 | –21.6 | 2.1 | –62,885 | –22.9 | 13.5 | –55,426 | –22.2 |
| EBITDA | 4,979 | 1.7 | –18.8 | 6,131 | 2.2 | –6.8 | 6,582 | 2.6 |
| Depreciation | –3,633 | –1.2 | –19.0 | –4,487 | –1.6 | –13.5 | –5,188 | –2.1 |
| EBIT | 1,346 | 0.5 | –18.1 | 1,644 | 0.6 | 18.0 | 1,394 | 0.6 |
| Net financial result | –175 | –0.1 | –28.3 | –244 | –0.1 | 20.6 | –203 | –0.1 |
| EBT | 1,171 | 0.4 | –16.4 | 1,400 | 0.5 | 17.5 | 1,191 | 0.5 |
| Income taxes | –371 | –0.1 | –22.6 | –480 | –0.2 | 3.3 | –464 | –0.2 |
| Consolidated net income | 800 | 0.3 | –13.1 | 920 | 0.3 | 26.6 | 727 | 0.3 |
As of 30.06.2017 the balance sheet total amounted to €-216.3-million (31.12.2016: €-183.3-million, 30.06.2016: €-225.5-million).
| in € thousand | |||||||
|---|---|---|---|---|---|---|---|
| 30.06.17 | % | +% | 31.12.16 | % 30.06.16 | % | ||
| Assets | |||||||
| Non-current assets | 77,469 | 35.8 | –1.1 | 78,298 | 42.7 | 87,256 | 38.7 |
| Fixed assets | 73,346 | 33.9 | –0.9 | 74,003 | 40.4 | 84,429 | 37.4 |
| Other non-current assets | 4,124 | 1.9 | –4.0 | 4,295 | 2.3 | 2,827 | 1.3 |
| Current assets | 138,863 | 64.2 | 32.3 | 104,967 | 57.3 138,269 | 61.3 | |
| Inventories | 90,601 | 41.9 | 44.4 | 62,746 | 34.2 | 91,870 | 40.7 |
| Receivables | 45,215 | 20.9 | 27.2 | 35,535 | 19.4 | 38,037 | 16.9 |
| Liquidity | 3,046 | 1.4 –54.4 | 6,686 | 3.6 | 8,363 | 3.7 | |
| Assets | 216,332 100.0 | 18.0 | 183,264 100.0 225,525 100.0 | ||||
| Equity and Liabilities | |||||||
| Long-term funds | 60,162 | 27.8 –12.6 | 68,811 | 37.5 | 70,249 | 31.1 | |
| Equity | 52,706 | 24.4 | –9.9 | 58,471 | 31.9 | 55,830 | 24.8 |
| Long-term debt | 7,456 | 3.4 –27.9 | 10,340 | 5.6 | 14,419 | 6.4 | |
| Provisions | 252 | 0.1 –26.2 | 341 | 0.2 | 355 | 0.2 | |
| Liabilities | 7,204 | 3.3 –28.0 | 9,999 | 5.5 | 14,064 | 6.2 | |
| Short-term debt | 156,170 | 72.2 | 36.4 | 114,453 | 62.5 155,276 | 68.9 | |
| Provisions | 2,050 | 0.9 | –4.9 | 2,156 | 1.2 | 2,899 | 1.3 |
| Liabilities | 154,120 | 71.2 | 37.2 | 112,297 | 61.3 152,377 | 67.6 | |
| Equity and Liabilities | 216,332 100.0 | 18.0 | 183,264 100.0 225,525 100.0 |
Fixed Assets The €-0.7-million reduction in fixed assets during the reporting period from €-74.0-million on 31.12.2016 to €-73.3-million is mainly attributable to the scheduled depreciation exceeding the investments made.
| Inventories | Among the current assets, inventories is the biggest line item. Since the beginning of the year their value grew by €-27.9-million or 44.4-% to €-90.6-million |
|---|---|
| (31.12.2016: €-62.7-million, 30.06.2016: €-91.9-million). Inventories accounted | |
| for 41.9-% of the balance sheet total on 30.06.2017 (31.12.2016: 34.2-%, | |
| 30.06.2016: 40.7-%). | |
Legal structure The following section lists the subsidiaries that are fully consolidated in the consolidated financial statements as of 30.06.2017:
An overview of all not-consolidated subsidiaries can be found in the notes.
There were no events of particular significance after the reporting date of 30.06.2017.
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 Annual Report for fiscal year 2016 on pages 62ff, together with a list of key individual risks and opportunities.
Compared to the Annual Report 2016, the risk situation has not changed materially. Individual risks endangering the company do not exist, and considered together, the aggregate risk does not pose any danger to Delticom's going concern.
The global economy is expected to continue to accelerate in the coming months. Growth in a number of industrialised countries and emerging economies outpaced than expected at the start of the year. In light of these developments, the International Monetary Fund (IMF) raised its guidance for global economic growth for both this year and the next. However, there are uncertainties regarding the future direction of US finance and economic policies as well as the further course of the Brexit negotiations between the EU and the United Kingdom. Economic experts are of the opinion that both factors carry the risk of having an inhibiting effect on global economic developments.
E-Commerce Global E-Commerce revenues exceeded the € 1 trillion mark for the first time ever in 2016. More than 25-% of people worldwide over the age of 15 now make purchases online. According to the Global Digital Report 2017, global internet penetration broke past the 50 % mark during the current year. This means that more than half of the world's population already uses the internet and this trend will continue. In many areas, online trading is now a key growth driver. According to the most recent TIX industry barometer of the German association of tyre dealers (BRV, Bundesverband Reifenhandel und Vulkaniseur-Handwerk e.V.), the internet has had a significant impact on drivers' information and shopping behaviour. The growing importance of the internet is regarded as a transforming factor for tyre retailers. The internet is also playing an increasingly important role when buying a car: 74-% of people in Germany wanting to buy a new or used car now research their options online before making a decision.
The German E-Commerce and Distance Selling Trade Association (bevh, Bundesverband E-Commerce und Versandhandel Deutschland e. V.) expects the German E-Commerce market to report revenues of almost € 60 billion this year, a growth of 11-%, corresponding to a share of 11-% of all German retail revenues. Consumers are also increasingly buying everyday goods online as well. Although growth rates are expected to be in the double-digit range in the future, online trading currently only accounts for approximately 1-% of the German retail food trade (2016: € 195.5 billion according to the Federation of German Food and Drink Industries (BVE, Bundesvereinigung der Deutschen Ernährungsindustrie)). Expensive goods picking and distribution is still one of the main hurdles in online food trading.
Guidance unchanged Revenues in the first half of the year developed as scheduled. In a weak market environment, the company succeeded in increasing the volume of sales in its core business compared to the year before. The decline in the gross profit margin in H1-17 was predominantly the result of active pricing in the online shops. Thanks to its high degree of flexibility, Delticom is in a position to seize opportunities for growth as these present themselves.
Direct costs have risen no more than moderately relative to revenues. Both marketing expenses and indirect costs were lower than in the year before. This underscores the company's cost-efficiency. During the reporting period the decline in EBITDA was accordingly steeper than the fall in EBIT. On the expenses side, the company has invested the reduced amount of depreciation in H1-17 almost entirely in new projects.
As Europe's leading online retailer of tyres and automotive accessories as well as efood specialist and expert in the field of efficient warehousing logistics, Delticom is set to profit in the coming months from the increasing trend towards E-Commerce. We expect to see a further positive trend in sales in the second half of the year. The development over the year as a whole will be essentially determined by the winter business in the fourth quarter. It is currently too soon to comment on the movement in prices in the winter tyre business. It is in principle impossible to exclude the possibility that in the event of a mild winter, prices in the European tyre trade may come under pressure.
We continue to anticipate that Delticom Group revenues in the current year will increase to € 650 million. We continue to expect Delticom group's EBITDA for the full year to be at € 16 million. Given a normal winter, we anticipate to see a positive effect on margins in the second half of the year.
New customers Through our various online shops, we appeal to a variety of customer groups. Our plans for the current year continue to foresee the acquisition of more than 1 million new customers via the Delticom shops.
| Repeat customers | In view of the multi-year replacement cycle, we are confident of being able to greet a proportion of the new customers acquired over recent years as repeat customers in our shops in 2017. Further positive development is accordingly expected in the number of repeat customers over the year as a whole. |
|---|---|
| Liquidity | In the coming months we will be building our stocks in line with our sales planning for the current year. As of the year-end, a positive development is expected in both cash flow and liquidity. |
| Investments | In the second half of the year the company plans to invest € 1.5 million in its existing tyre warehouse infrastructure with the goal of achieving further increases in warehouse efficiency. |
| 01.01.2017 | 01.01.2016 | |
|---|---|---|
| in € thousand | – 30.06.2017 | – 30.06.2016 |
| Revenues | 297,094 | 275,142 |
| Other operating income | 12,161 | 8,957 |
| Total operating income | 309,255 | 284,100 |
| Cost of goods sold | –234,835 | –210,104 |
| Gross profit | 74,420 | 73,996 |
| Personnel expenses | –5,247 | –4,979 |
| Depreciation of intangible assets and property, plant and equipment | –3,633 | –4,487 |
| Other operating expenses | –64,193 | –62,885 |
| Earnings before interest and taxes (EBIT) | 1,346 | 1,644 |
| Financial expenses | –197 | –257 |
| Financial income | 22 | 12 |
| Net financial result | –175 | –244 |
| Earnings before taxes (EBT) | 1,171 | 1,400 |
| Income taxes | –371 | –480 |
| Consolidated net income | 800 | 920 |
| Thereof allocable to: | ||
| Non-controlling interests | –108 | –19 |
| Shareholders of Delticom AG | 908 | 938 |
| Earnings per share (basic) | 0.06 | 0.07 |
| Earnings per share (diluted) | 0.06 | 0.07 |
| 01.01.2017 | 01.01.2016 | |
|---|---|---|
| in € thousand | – 30.06.2017 | – 30.06.2016 |
| Consolidated Net Income | 800 | 920 |
| Changes in the financial year recorded directly in equity | ||
| Income and expense that will be reclassified to the statement of income at a later date | ||
| Changes in currency translation | –290 | –153 |
| Net Investment Hedge Reserve | ||
| Changes in current value recorded directly in equity | –16 | –20 |
| Deferred taxes relating to Net Investment Hedge Reserve | 4 | 44 |
| Other comprehensive income for the period | –302 | –129 |
| Total comprehensive income for the period | 498 | 791 |
| Attributable to non-controlling interests | –210 | –211 |
| Attributable to shareholders of the parant | 708 | 1,002 |
| in € thousand | 30.06.2017 | 31.12.2016 |
|---|---|---|
| Non-current assets | 77,469 | 78,298 |
| Intangible assets | 57,700 | 58,998 |
| Property, plant and equipment | 15,448 | 14,758 |
| Financial assets | 198 | 247 |
| Investments using equity method | 196 | 245 |
| Other financial assets | 2 | 2 |
| Deferred taxes | 3,630 | 3,796 |
| Other receivables | 494 | 499 |
| Current assets | 138,863 | 104,967 |
| Inventories | 90,601 | 62,746 |
| Accounts receivable | 25,001 | 20,425 |
| Other current assets | 17,579 | 12,567 |
| Income tax receivables | 2,635 | 2,543 |
| Cash and cash equivalents | 3,046 | 6,686 |
| Assets | 216,332 | 183,264 |
| in € thousand | 30.06.2017 | 31.12.2016 |
|---|---|---|
| Equity | 52,706 | 58,471 |
| Equity attributable to Delticom AG shareholders | 51,880 | 57,351 |
| Subscribed capital | 12,463 | 12,463 |
| Share premium | 33,739 | 33,739 |
| 31.12.1899 | 44 | 0 |
| Other components of equity | 345 | 647 |
| Retained earnings | 200 | 200 |
| Net retained profits | 5,089 | 10,302 |
| Non-controlling interests | 826 | 1,120 |
| Liabilities | 163,626 | 124,793 |
| Non-current liabilities | 7,456 | 10,340 |
| Long-term borrowings | 5,938 | 7,188 |
| Non-current provisions | 252 | 341 |
| Deferred tax liabilities | 1,267 | 2,811 |
| Current liabilities | 156,170 | 114,453 |
| Provisions for taxes | 1,431 | 1,516 |
| Other current provisions | 619 | 641 |
| Accounts payable | 107,335 | 89,003 |
| Short-term borrowings | 32,063 | 12,700 |
| Other current liabilities | 14,721 | 10,594 |
| Shareholders' equity and liabilities | 216,332 | 183,264 |
| 01.01.2017 | 01.01.2016 | |
|---|---|---|
| in € thousand | – 30.06.2017 | – 30.06.2016 |
| Earnings before interest and taxes (EBIT) | 1,346 | 1,644 |
| Depreciation of intangible assets and property, plant and equipment | 3,633 | 4,487 |
| Changes in other provisions | –111 | –343 |
| Net gain on the disposal of assets | 0 | 32 |
| Changes in inventories | –27,856 | –30,025 |
| Changes in receivables and other assets not allocated to investing or financing activity |
–9,540 | –4,975 |
| Changes in payables and other liabilities not allocated to investing or financing activity |
21,967 | 22,072 |
| Interest received | 22 | 12 |
| Interest paid | –197 | –257 |
| Income tax paid | –1,695 | –1,782 |
| Cash flow from operating activities | –12,430 | –9,134 |
| Proceeds from the disposal of property, plant and equipment | 0 | 15 |
| Payments for investments in property, plant and equipment | –1,789 | –194 |
| Payments for investments in intangible assets | –1,236 | –170 |
| Payments for the acquisition of consolidated subsidiaries (less acquired cash and cash equivalents) |
–75 | –19,858 |
| Cash flow from investing activities | –3,100 | –20,207 |
| Dividends paid by Delticom AG | –6,232 | –6,232 |
| Cash inflow of financial liabilities | 19,363 | 33,856 |
| Cash outflow of financial liabilities | –1,250 | –1,250 |
| Cash flow from financing activities | 11,881 | 26,374 |
| Changes in cash and cash equivalents due to currency translation | 8 | –153 |
| Cash and cash equivalents at the start of the period | 6,686 | 11,484 |
| Changes in cash and cash equivalents | –3,648 | –3,121 |
| Cash and cash equivalents - end of period* | 3,046 | 8,363 |
* Cash and cash equivalents consist exclusively liquid assets
| 01.01.2017 | 01.01.2016 | |
|---|---|---|
| in € thousand | – 30.06.2017 | – 30.06.2016 |
| Liquidity – start of period | 6,686 | 11,436 |
| Changes in cash and cash equivalents | –3,648 | –3,121 |
| Liquidity – end of period | 3,038 | 8,315 |
| Net Cash – start of period | –13,249 | –3,705 |
| Changes in cash and cash equivalents | –3,648 | –3,121 |
| Changes in financial liabilities | –18,113 | –32,606 |
| Net Cash – end of period | –35,010 | –39,432 |
| Net cash refer to short term financial liabilities: | ||
| Net Cash – start of period | –6,240 | 7,055 |
| Changes in cash and cash equivalents | –3,648 | –3,121 |
| Veränderungen der kurzfristigen Finanzschulden | –19,363 | –33,856 |
| Net Cash – end of period | –29,251 | –29,922 |
| Net cash refer to long term financial liabilities: | ||
| Net Cash – start of period | –727 | 321 |
| Changes in cash and cash equivalents | –3,648 | –3,121 |
| Veränderungen der langfristigen Finanzschulden | 1,250 | 1,250 |
| Net Cash – end of period | –3,125 | –1,550 |
| Net Invest | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Reserve from | ment | Net | Non-control | |||||||
| Subscribed | Share | currency | Hedge | Retained | retained | ling inter | Total | |||
| in € thousand | capital | premium | translation | Reserve | Sonst. | earnings | profits | Total | ests | equity |
| as of 1 January 2016 |
11,945 | 25,372 | 550 | 5 | 0 | 200 | 11,844 | 49,916 | 1,355 | 51,271 |
| Shares of capital increase |
518 | 518 | 518 | |||||||
| Capital increase of issue new shares |
9,482 | 9,482 | 9,482 | |||||||
| Dividends paid | –6,232 | –6,232 | –6,232 | |||||||
| Net income | 939 | 939 | –19 | 920 | ||||||
| Other comprehen sive income |
–153 | 24 | 192 | 63 | –192 | –129 | ||||
| Total comprehen sive income |
–153 | 24 | 1,131 | 1,002 | –211 | 791 | ||||
| as of 30 June 2016 | 12,463 | 34,854 | 397 | 29 | 0 | 200 | 6,743 | 54,687 | 1,144 | 55,831 |
| as of 1 January 2017 |
12,463 | 33,739 | 606 | 41 | 200 | 10,302 | 57,351 | 1,119 | 58,470 | |
| Dividends paid | –6,232 | –6,232 | –6,232 | |||||||
| Stock option plan | 0 | 44 | 44 | 0 | 44 | |||||
| Compensation of differences from purchase of non controlling interests |
8 | 8 | –83 | –75 | ||||||
| Net income | 908 | 908 | –108 | 800 | ||||||
| Other comprehen sive income |
–290 | –12 | 102 | –200 | –102 | –302 | ||||
| Total comprehen sive income |
–290 | –12 | 1,010 | 708 | –210 | 498 | ||||
| as of 30 June 2017 | 12,463 | 33,739 | 315 | 29 | 44 | 200 | 5,089 | 51,879 | 826 | 52,705 |
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 Hanover local court with register number HRB58026. Delticom's address is Brühlstrasse 11, 30169 Hanover, Germany.
Delticom is Europe's leading online retailer of tyres and automotive accessories as well as efood specialist and expert in the field of efficient warehouse logistics. The range of tyres offered to retail and commercial customers includes over 100 brands and more than 25,000 models for cars, motorbikes, trucks, utility vehicles, buses and complete wheel sets. Customers are also able to have the ordered products sent to one of the 43,000 service partners of Delticom AG around the world.
Our range also encompasses over 300,000 automotive parts and accessories, including motor oils, snow chains and batteries. Entry into the business of online used car selling has rounded off the automotive offering. In this sense, Delticom AG has developed from a classic online retailer to an online solutions provider. Delticom AG also now offers a comprehensive range of around 20,000 different food items. Delticom has enhanced its logistics expertise with last year's acquisition of the efood and logistics companies and taken an important strategic step to further expand its future market position in European E-Commerce.
Further information about the reporting company can be found in the chapter Business Operations and in the chapter Organisation of the Annual Report 2016.
From 01.01.2017 to 30.06.2017 Delticom had an average of 156 employees (thereof on average 10 apprentices and interns). Last year Delticom had an average of 144 employees. The calculation is based on full-time equivalents, thus taking into account the actual work hours.
In many countries, business with car replacement tyres depends to a large extent on the seasons with their different weather and road conditions. For example, the business in the northern parts of Europe and in the German-speaking countries is characterized by two peak periods - the purchase of summer tyres in spring and winter tyres in early winter. Volume is generally weaker in the first quarter, as most winter tyres are bought and fitted with the first snow, and thus before the end of the year. The second quarter is characterized by strong sales: the weather in April and May is usually quite warm and car drivers buy their new summer tyres.
The third quarter is a transitional quarter between the summer and winter business, with unit sales again being somewhat weaker. In most European countries, the last quarter generates the highest sales as car drivers face difficult road conditions and become aware of the fact that they need new tyres. Due to the seasonality, differences in performance between quarters and year-over-year are unavoidable.
For the food business the days before Christmas in December traditionally represent the highest salesperiod of the year.
Delticom's consolidated interim financial statements as of 30.06.2017 were prepared according to the International Financial Reporting Standards (IFRS), as prescribed by the International Accounting Standards Board (IASB), that were mandatory according to the European Union (EU) Directive. All applicable and mandatory IFRS standards on the balance sheet date were applied, especially IAS 34 (Interim Financial Reporting).
According to the IAS 34 the minimum components of the Interim Financial Report are:
To the extent that there were no changes to standards requiring first-time application, the accounting, valuation and calculation methods explained in the 2016 Consolidated Financial Statements have also been applied in this set of interim financial statements, and apply correspondingly.
These interim financial statements contain all clarifications and information required for Group annual financial statements, and can therefore be read in conjunction with the annual financial statements as of 31.12.2016 of Delticom Group.
The Annual Report 2016 is made available on the Delticom website in the section Investor Relations or can be downloaded directly using the following link:
The fair value of the financial instruments corresponds to the book value in respect of all balance sheet items. The financial instruments in the following categories have been assigned to Level 2 of the fair value hierarchy: Financial assets held for trading amounting to € 30 thousand (31.12.2016: € 242 thousand) and Financial liabilities held for trading amounting € 613 thousand (31.12.2016: € 31 thousand). As in previous years, there are no Level 3 fair value inputs. The valuation categories applied to the individual financial instruments have remained unchanged compared with 31.12.2016. Changes in the fair values have been recognized in the income statement. The calculation was performed by the issuing banks and includes actual euro-reference-quotation and timing discounts respectively timing additions.
The fair value of the stock option rights were calculated using a binominal model with the help of Level 2 fair value input factors.
Due to short due dates for payments the book value of the trade receivables is equal to their fair value. In the interim financial statements, the taxes on income reported in the Income Statement are calculated pursuant to IAS 34.3c on the basis of an annual tax rate.
The group of consolidated companies comprises Delticom AG as controlling company, fourteen domestic and nine foreign subsidiaries, all fully consolidated in the interim financial accounts.
The fully consolidated subsidiaries at 30.06.2017 are:
Tirendo Holding GmbH, Berlin (Germany)
Toroleo Tyres GmbH, Gadebusch (Germany)
Delticom TOV, Kiev (Ukraine) was founded and fully consolidated in the current fiscal year.
Starting 2016, Delticom Russia LLC, Moscow (Russia) was consolidated at equity in the current year.
Due to its negligible impact on Delticom's net assets, financial position and results of operations, the following companies are not consolidated, but instead recognized as a financial instrument pursuant to IAS 39.
During the current year the following subsidiary were liquidated:
During the six-month period ended 30 June 2017, Delticom AG acquired 10-% of TyresNET shares becoming the unique shareholder of TyresNET for the sale price of € 75 thousand. The difference between the non-controlling interest (€ 83 thousand) and the purchase price was recognized in equity according to IFRS 10.
The Annual General Meeting of 29.04.2014 authorized the Management Board, with Supervisory Board assent (respectively the Supervisory Board instead of the Management Board to the extent that option rights are granted to Management Board members), to grant until 28.04.2019, once or on several occasions, option rights to subscribe for a total of up to 540,000 of the company's new no-par registered shares to members of the company's Management Board, employees of the company, as well as to employees and management members of companies associated with the company.
Through resolutions passed by the Management Board on 25.12.2016, and by the Supervisory Board on 27.12.2016 a stock option plan for employees of the company and a stock option plan for members of the company's Management Board were introduced based on a resolution passed by the company's Supervisory Board on 28.12.2016, taking account of the instructions on the key features in the resolution of the company's Annual General Meeting of 29.04.2014.
Based on these plans, a total of 16,003 stock options were issued to employees of the company on 10.01.2017, and a total of 32,000 stock options were issued to members of the company's Management Board on 05.01.2017. With the subscription declaration of 06.01.2017, which entitles each member of the company's Management Board to subscribe to 8,000 new no-par registered shares, Susann Dörsel-Müller, Philip von Grolman, Thierry Delesalle and Dr. Andreas Prüfer accepted the stock options.
The vesting period for all stock options is four years, starting with the respective date of issue. The stock options are therefore currently not yet exercisable. The option rights have a maximum life of ten years as from the day when the respective option right originated.
Further information about the stock option plan can be found in the Annual Report 2016 in the chapter "The Delticom share" (page 75ff.).
The following assumptions were used in determining the fair value of the plan:
On that basis, the fair value is € 3.75 per option. That amount is recognized as an expense over the vesting period, with the opposite entry recognized directly in equity. The total expense recognized for all stock options in the six month ended 30.06.2017 was € 44 thousand.
Detailed information with regards to business trends 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 presents additional information concerning the balance sheet and the cash flow statement.
The majority of contracts (and related revenues) exist between Delticom and private customers. Delticom is a one-segment-entity with E-Commerce activities. The revenues are categorized in geographic regions (EU and non-EU). The short due dates of payments and monitoring activities lead to no categorization regarding non-payment risk. The type of sold products (tyres, automotive parts, food) lead to no complex identification of performance obligations in the related contracts. Delticom actually analyses their contracts environment but does not expect major effects from adopting IFRS 15.
The following table shows the development of the other operating expenses.
| in € thousand | H117 | H116 |
|---|---|---|
| Transportation costs | 28,148 | 27,294 |
| Warehousing costs | 3,402 | 3,094 |
| Credit card fees | 2,494 | 2,408 |
| Bad debt losses and one-off loan provisions | 1,299 | 1,539 |
| Marketing costs | 11,977 | 12,368 |
| Operations centre costs | 4,968 | 4,427 |
| Rents and overheads | 3,069 | 2,924 |
| Financial and legal costs | 2,400 | 2,380 |
| IT and telecommunications | 1,931 | 2,292 |
| Expenses from exchange rate differences | 1,878 | 1,394 |
| Other | 2,628 | 2,766 |
| Total | 64,193 | 62,886 |
Basic earnings per share totalled €-0.06 (H1-16: €-0.07). The diluted earnings per share totalled €-0.06 (H1-16: €-0.07).
Pursuant to IAS-33, undiluted (basic) earnings per share are calculated by dividing the consolidated net income of €-799,569.67 (previous year: €-920,064.36) by the 12,463,331 weighted average number of ordinary shares in circulation during the financial year (previous year: 12,463,331 shares).
No stock options were exercised during the current year. The option rights can be fully exercised after four years starting from the date the options rights were granted. In general, all shares to be issued should be included in computing diluted EPS if the effect from the stock options is dilutive. They are dilutive when they would result in the issue of ordinary shares for less than the average market price of ordinary shares during the period (no dilutive effect in H1-17).
On 06.05.2017 Delticom has paid a dividend of € 0.50 for fiscal year 2016 (previous year: €-0.50).
Related companies and persons in the meaning of IAS 24 include the Managing and Supervisory boards of Delticom AG (category persons in key positions), the majority shareholders Binder GmbH and Prüfer GmbH (category companies with a significant influence on the Group), as well as not consolidated subsidiaries (category not cosolidated subsidiaries). All transactions with related parties are agreed contractually, and conducted on terms as would also be usual with third parties. Transactions which occured during the interim reporting period did not have any signifanct effects on the earnings, financial and asset positions.
Related companies and persons (Category persons in key positions): In the reporting period, goods and services worth € 244 thousand (H1-16: € 323 thousand) were purchased from related companies and persons, and goods and services worth € 1.2 thousand (H1-16: € 3 thousand) were sold to related companies and persons. Accounts receivable from business with related companies and persons amounted to € 0.07 thousand (H1-16: € 0 thousand) and accounts payable totalled € 53 thousand (H1-16: € 0 thousand).
As compared to 31.12.2016, the situation with regards to other financial commitments has not changed significantly:
As of the reporting date, there were no contingent liabilities or claims.
No key events occurred after the reporting period.
The interim financial statements and the interim management report has been reviewed by our auditors.
The website www.delti.com/Investor_Relations/Entsprechungserklaerung.html shows the current statements made by the Managing and Supervisory boards of Delticom AG pursuant to Section 161 of the German Public Limited Companies Act (AktG).
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, 14.08.2017
(The Management Board)
Translation of the auditor's report issued in German language on the consolidated financial statements prepared in German language by the management of Delticom AG, Hanover.
We have reviewed the condensed consolidated interim financial statements - comprising the condensed statement of financial position, condensed statement of comprehensive income, condensed statement of cash flows, condensed statement of changes in equity and selected explanatory notes - and the interim group management report of Delticom AG, Hannover, for the period from 01.01.2017 to 30.06.2017 which are part of the half-year financial report pursuant to § (Article) 37w WpHG ("Wertpapierhandelsgesetz": German Securities Trading Act). 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 provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of the parent Company's Board of Managing Directors. 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). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with moderate assurance, 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 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 limited primarily to inquiries of company personnel and analytical procedures and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot express 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 nor 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.
Hanover, 14.08.2017
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
Martin Schröder ppa. Hanno Karlheim
German Public Auditor German Public Auditor
| WKN | 514680 |
|---|---|
| ISIN | DE0005146807 |
| Reuters / Bloomberg | DEXGn.DE / DEX GR |
| Index membership | CDAX, CLXP, D1BL, 4N83, |
| CXPR, 4N9U, I1RC, PXAP, | |
| NISAX20 | |
| Type of shares | No-par value, registered |
| Transparency level | Prime Standard |
| 14.11.2017 | Q3-Notification |
| German Equity Forum | |
| 27.11.2017 | Frankfurt |
| Number of shares shares 12,463,331 1 Share price on first trading day € 17.83 1 Share price on last trading day of the period € 15.85 1 Share performance % –11.1 1 Share price high/low € 18.04 / 15.70 2 Market capitalisation € million 197.5 Average trading volume per day (XETRA) shares 2,595 EPS (undiluted) € 0.06 EPS (diluted) € 0.06 |
01.01.2017 – 30.06.2017 |
01.01.2016 – 31.12.2016 |
|
|---|---|---|---|
| 12,463,331 | |||
| 20.83 | |||
| 17.89 | |||
| –14.1 | |||
| 20,83 / 14,49 | |||
| 223.0 | |||
| 5,724 | |||
| 0.36 | |||
| 0.36 |
(1) based on closing prices
(2) based on official closing price at end of quarter
| Broker | Analyst | Recommen dation |
Estimates for 2017 | Estimates for 2018 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Target price |
Sales (€m) |
EBITDA (€m) |
EBIT (€m) |
EBIT (%) |
EPS (€) |
Sales (€m) |
EBITDA (€m) |
EBIT (€m) |
EBIT (%) |
EPS (€) |
|||
| NordLB | Frank Schwope | Sell | 14.50 | 655.0 | 16.7 | 8.4 | 1.3 | 0.44 | 702.0 | 18.0 | 8.9 | 1.3 | 0.46 |
| BH Lampe | Christoph Schlienkamp |
Sell | 11.00 | 650.0 | 16.3 | 8.3 | 1.3 | 0.44 | 695.5 | 18.1 | 10.1 | 1.4 | 0.53 |
| Montega | Timo Buss | Sell | 15.00 | 656.3 | 16.6 | 7.9 | 1.2 | 0.41 | 703.1 | 18.2 | 8.9 | 1.3 | 0.46 |
| Warburg | Marc-René Tonn | Hold | 18.00 | 664.6 | 17.9 | 10.5 | 1.6 | 0.53 | 730.7 | 22.4 | 15.4 | 2.1 | 0.79 |
| Average | 14.63 | 656.5 | 16.9 | 8.8 | 1.4 | 0.46 | 707.8 | 19.2 | 10.8 | 1.5 | 0.56 |
as of 7 August 2017
Publisher Delticom AG Brühlstraße 11 30169 Hanover Germany Contact Investor Relations Melanie Gereke Brühlstraße 11 30169 Hanover Phone: +49-511-93634-8903 E-Mail: [email protected]
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