#1On track. Investor and Analyst Presentation On the Occasion of the Release of the Annual Report 2010 Hanover, 23 March 2011 DELTICOM Aktiengesellschaft#2Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook Investor Presentation FY 2010 Hanover, 23 March 2011 DELTICOM 2 Aktiengesellschaft#3Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook DELTICOM 3 Hanover, 23 March 2011 Aktiengesellschaft#4Delticom at a Glance #1 European online tyre dealer > 100 online shops in 39 countries founded 1999, IPO Oct 2006, SDAX Dec 2008 2010 almost one million new customers customer base: 4.4 million focus on replacement tyres: > 100 tyre brands, > 25,000 models other products: motorcycle tyres, bicycle tyres truck tyres, industrial tyres complete wheels and rims motor oil, car parts, accessories 101 employees, mainly in the Hanover head office global network with more than 27,000 fitting partners, e.g. DE 7803 US 2232 UK 1798 FR 3165 CH 1355 Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook DELTICOMЯ Hanover, 23 March 2011 Aktiengesellschaft 4#5One-Off Effects Q4 10 Jan 07 Jan 08 Source: Google Inc., Google News Archivesearch Jan 09 Jan 10 UK Frankreich Benelux Deutschland لسند Jan 07 Jan 08 Source: Google Inc., Google Search Volume Jan 09 Jan 10 Positive volume and price effects German winter tyre regulation issues make the news... and winter brings much snow in other countries, too Investor Presentation FY 2010 Hanover, 23 March 2011 At a glance Business Model Profit & Loss Balance Sheet Outlook DELTICOM 5 Aktiengesellschaft#6Key Financials 2010 New Customers Customer Base m Q410 Q409 yoy % FY10 FY09 yoy % guidance 333 259 +28,4 958 805 +18,9 4,4 3,4 +27,9 Still strong customer generation... and more repeat customers Revenues €m 162,6 109,7 +48,2 419,6 311,3 +34,8 > 30% Good volume growth... Gross Margin % 31,5 30,4 +1,1p 29,7 28,8 +0,9p Ebit Margin % 15,0 13,4 +1,6p 11,2 9,4 +1,8p ~ 11% Ebit Capex 3 E 24,3 14,7 +65,6 47,1 29,4 +60,1 at better margins Mainly driven by gross margin growth Financial result is negligible 1,7 0,4 +297,5 3,5 3,6 -2,4 New warehouse planned Q211 Very good FY, extraordinary Q4 Investor Presentation FY 2010 Hanover, 23 March 2011 At a glance Business Model Profit & Loss Balance Sheet Outlook DELTICOM 6 Aktiengesellschaft#7Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook DELTICOM 7 Hanover, 23 March 2011 Aktiengesellschaft#8Tyres and the Internet PC & LT Replacement Tyres Europe: > € 10 billion SA 52 Rest 21 other EE+CE 60 NA 69 255 World WE 220 Germany: very good 2010, uncertain outlook for 2011 60 DE 50 59 40 Western Europe 30 UK 20 ES 27 Asia 239 15 10 IT FR 24 26 in million tyres Source: Datamonitor, Continental, Michelin, own estimates Europeans are increasingly online... adults online in % of total 46 34 76 82 76 57 72 60 44 Desk Research GfK Austria, January 2011 0 total 99 2000 01 02 03 04 Source: BRV (car replacement tyres) and buy their tyres online. summer +10.1% 0.0% +3.3% -12.7%-1.3% winter in million tyres 05 06 07 08 09 10 11* * estimates as of March 2011 86 think about buying online (ADAC, 18-39) 30.8% 29.6% 27.8% think about buying online (ADAC, all) 15.8% 16.5% 15.0% bought tyres on the Internet (ADAC, 18-39) 9.2% 7.9% 6.4% bought tyres on the Internet (BRV,GFK) 4.8% 4.8% 4.0% 3.2% 3.7% bought tyres on the Internet (ADAC all) 05 06 07 08 09 10 Source: ADAC (new methodology vs. 2009), BRV, GFK Investor Presentation FY 2010 Hanover, 23 March 2011 At a glance Business Model Profit & Loss Balance Sheet Outlook DELTICOM 8 Aktiengesellschaft#9Redesign of the Tyre Distribution Chain Traditional Retail Tyre Manufactures European Tyre Manufactures Non European Tyre Manufactures Wholesalers Retailers Garages Customers Space + Time + Price Delticom Redesign Tyre Manufactures European Tyre Manufactures Non European Tyre Manufactures DELTICOM Distribution Centers DELTICOM Shops Wholesalers Fitting Partners Customers Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook DELTICOM 9 Hanover, 23 March 2011 Aktiengesellschaft#10Key Benefits for Our Partners Customers Fitting Partners Suppliers save time and money select from broad product offering fast delivery, even at peak times large network of service. partners pre-/after sale services. customer generation, free of charge no restrictions on fitting prices might offer other services (e.g. stock tyres until next changeover) customers review quality of fitting service favourable B2B offers Europe's leader in the online channel, strong growth, high volumes strong balance sheet, low credit risk efficient warehouse systems and processes for large and growing quantities versatile database (supply and demand, volumes and prices), supports consistent planning improved customer value well connected Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook Hanover, 23 March 2011 attractive partnership DELTICOM 10 Aktiengesellschaft#11Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook Hanover, 23 March 2011 DELTICOM 11 Aktiengesellschaft#12Customers New Customers Repeat Customers Q1 Ratio Investor Presentation FY 2010 Hanover, 23 March 2011 Q2 22 123 Q3 2008 2009 2010 in thousands 218 ཁ་ 143 Q1 210 146 22 231 Q2 Q3 Repeat customers constitute important growth potential 169 10 147 259 Q1 114 188 22 At a glance Business Model Profit & Loss Balance Sheet Outlook 152 248 Q3 130 Q4 ས་ 180 189 εεε +22% +29% ... still the main growth driver ... long replacement cycle and customers are happy repeat customers (slowly) DELTICOM 12 Aktiengesellschaft#13Quarterly Revenues in € million 175- 150 125- 100- +25% 75- +9% 50. 25- 0 Investor Presentation FY 2010 Hanover, 23 March 2011 42,6 78,9 Q1 Q2 w 53,7 +22% 2008 2009 2010 2 83,8 +21% 51,0 +20% 88,1 +12% 62,4 +31% +16% +46% 109,7 74,5 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Fluctuations in growth rates: seasons, weather, base effects, strategy At a glance Business Model Profit & Loss Balance Sheet Outlook 102,9 +17% 79,7 Q3 +48% - - 175 - 150 125 +28% - 100 162,6 Q4 75 - - 50 - 25 0 DELTICOM 13 Aktiengesellschaft#145% 10% 1,2% 15% 20% 25% 30%- 23,9% Gross Margin (simple) EBIT Margin Quarterly Gross/EBIT Margins 6,4% 24,0% 6,3% 25,9% 0% Q1 Q2 Q3 Q4 Q1 9,0% 2008 26,6% 26,0% 2,1 2,2 1,0 5,2% 공 ≈ 8,6% 4,0 7,3% 26,4% 13,4% 2009 2,4 1,9 7,9% 27,8% 4,4 28,8% 2,2 26,4% 0,4 1,2 2,7 2,0 0,3 Raw material price increases fed through into purchasing prices + shortage premiums Investor Presentation FY 2010 Hanover, 23 March 2011 At a glance Business Model Profit & Loss Balance Sheet Outlook DELTICOM 14 Aktiengesellschaft 10,6% Q2 Q3 Q4 Q1 Q2 Q3 Q4 7,5% 15,0% 27,6% 0% 2010 1,5 30% -0,7 27,1% - 5% 30,3% - 20% 1,6 15% 10% 25%#15LO 5 15- 10- N/A 0,5 Quarterly EBIT in € million 25- 20- -3% +134% 5,1 Unusually high Q4 EBIT(s) 3,4 7,5 2008 2009 2010 +39% _+419% 2,6 7,5 +49% +34% 4,5 14,7 +96% +122% +44% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Investor Presentation FY 2010 Hanover, 23 March 2011 At a glance Business Model Profit & Loss Balance Sheet Outlook 5,9 10,9 +66% - 25 - 20 - 15 - -10 +33% - 5 6,0 24,3 DELTICOM 15 Aktiengesellschaft#16P&L Drivers (Q4) EUR yoy % of Revenues Q410 Q409 % Q410 Q409 chng Revenues 162,6 109,7 48,2 100,0 100,0 0,0 Cost of sales 113,3 78,1 45,1 69,7 71,2 -1,5 Gross Profit (simple) 49,3 31,6 56,1 30,3 28,8 1,5 strong volume and positive price effects Direct costs 20,4 14,0 45,4 12,6 12,8 -0,2 Direct costs (dep. on sales) 15,0 10,9 37,8 9,2 9,9 -0,7 Transportation costs 12,2 8,9 37,3 7,5 8,1 -0,6 tyre price increases Warehousing costs 1,7 1,1 59,2 1,1 1,0 0,1 good sales from own warehouses Operations centre costs 1,1 0,9 17,1 0,7 0,8 -0,2 front-/backoffice automation ✩ Direct costs (dep. on revenues) 5,4 3,2 71,6 3,3 2,9 0,5 Credit card fees 1,3 0,7 92,2 0,8 0,6 0,2 Bad debt losses 0,5 0,1 284,9 0,3 0,1 0,2 Marketing costs 3,6 2,4 54,0 2,2 2,2 0,1 E-Commerce momentum ↑ Contribution margin 1 28,9 17,6 64,6 17,8 16,0 1,8 Indirect costs 4,8 3,6 33,8 3,0 3,3 -0,3 Personnel expenses 2,1 1,7 24,9 1,3 1,5 -0,2 Rents and overheads 1,0 0,9 5,8 0,6 0,8 -0,2 revenues growth masks capacity Financial and legal costs 1,3 0,5 182,2 0,8 0,4 0,4 IT and telecommunications 0,2 0,2 -8,1 0,1 0,2 -0,1 Other 0,3 0,4 -21,3 0,2 0,3 -0,2 Contribution margin 2 24,1 13,9 72,6 14,8 12,7 2,1 FX effects 0,0 0,1 0,0 0,1 0,0 Other operating profit (w/o FX gains) 0,6 1,1 0,4 1,0 -0,7 EBITDA 24,7 15,1 62,9 15,2 13,8 1,4 Depreciation/Amortization 0,3 0,5 -24,3 0,2 0,4 -0,2 EBIT 24,3 14,7 65,6 15,0 13,4 1,6 Net financial result 0,0 0,0 -315,3 EBT 24,4 14,7 66,2 15,0 13,4 1,6 Income taxes 7,4 4,5 64,7 Consolidated net income 17,0 10,2 66,9 10,5 9,3 1,2 Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook DELTICOM 16 Hanover, 23 March 2011 Aktiengesellschaft#17P&L Drivers (FY) EUR yoy % of Revenues FY10 FY09 % FY10 FY09 chng Revenues 419,6 311,3 34,8 100,0 100,0 0,0 Q4 boosted yoy growth Cost of sales 300,7 225,8 33,2 71,7 72,5 -0,9 Gross Profit (simple) 118,9 85,5 39,1 28,3 27,5 0,9 Direct costs 56,6 44,9 26,0 13,5 14,4 -0,9 Direct costs (dep. on sales) 42,9 33,6 27,8 10,2 10,8 -0,6 Transportation costs 34,5 26,8 28,8 8,2 8,6 -0,4 Warehousing costs 4,5 3,2 41,3 1,1 1,0 0,0 Operations centre costs 3,8 3,6 8,0 0,9 1,1 -0,2 outlook: costs Direct costs (dep. on revenues) 13,7 11,4 20,5 3,3 3,7 -0,4 Credit card fees 3,1 2,1 46,2 0,7 0,7 0,1 Bad debt losses 1,6 1,6 5,6 0,4 0,5 -0,1 Marketing costs 9,0 7,7 16,4 2,1 2,5 -0,3 outlook: costs Contribution margin 1 62,3 40,5 53,7 14,9 13,0 1,8 Indirect costs 14,9 11,6 28,2 3,6 3,7 -0,2 Personnel expenses 6,8 5,8 17,3 1,6 1,9 -0,2 Rents and overheads 3,5 2,2 57,7 0,8 0,7 0,1 outlook: warehouse capacity Financial and legal costs 2,8 1,8 51,0 0,7 0,6 0,1 IT and telecommunications 0,7 0,6 14,5 0,2 0,2 0,0 Other 1,2 1,2 -0,9 0,3 0,4 -0,1 Contribution margin 2 47,4 28,9 64,0 11,3 9,3 2,0 FX effects -0,7 -0,4 -0,2 -0,1 0,0 FX swings wash out Other operating profit (w/o FX gains) 1,7 2,0 0,4 0,6 -0,2 EBITDA 48,4 30,4 58,9 11,5 9,8 1,7 Depreciation/Amortization 1,3 1,0 24,8 0,3 0,3 0,0 EBIT 47,1 29,4 60,1 11,2 9,4 1,8 Net financial result 0,1 0,2 -37,6 low but increasing capital intensity debt-free, net cash, low/no interest rates EBT 47,2 29,6 59,5 11,2 9,5 1,7 Income taxes 14,9 9,3 59,7 Consolidated net income 32,3 20,2 59,4 7,7 6,5 1,2 Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook Hanover, 23 March 2011 DELTICOM 17 Aktiengesellschaft#18Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook STARAPERE Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook Hanover, 23 March 2011 DELTICOM 18 Aktiengesellschaft#19Working Capital -15,5 -6,1 9,0 Q1 Q2 9,2 Accounts payable -4,3 33 -4,0 | 0,8 10,60 Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook Hanover, 23 March 2011 -4,2 -1,1 -3,5 Inventories -3,1 Accounts receivable 4,5 Working Capital Management 0,1 15,9 |0,5 -0,1 3,0 Q-13,1 6,1 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2,7 3,9 5,9 quarterly delta in € million DELTICOM 19 Aktiengesellschaft -6,5 10,9 -5,8 ... fewer swings -13,7 5,8 17,7 6'0- 5,4 -3,2 2,2 2008 2,1 5,7 1,1 -24,7 8,4 2009 |-1,6 -0,4 17,1 3,2 11,9 -2,2 4,5 0,5 ... funded w/ AP -5,5 2010 ... follow the seasonal peaks. strong increase ...#20Investor Presentation FY 2010 Hanover, 23 March 2011 Liquidity 20 31.12.09 09 40 40,6 EBIT Depreciation 80 120 Liquidity Bridge (ttm) in € million 100 47,1 1,3 1,6 -8,8 -3,1 other Provisions Inventories Receivables Payables Interest 100% dividend payout - Delticom remains self-financed Taxes Propery, Plant and Equipment Intangible Assets At a glance Business Model Profit & Loss Balance Sheet Outlook 25,7 0,1 -12,1 Securities etc. -3,4 Dividend Payments Other financing FX Translation -0,1 -0,8 -20,1 Liquidity 31.12.10 DELTICOM 20 Aktiengesellschaft 80 0,0 0,0 67,8 20 40 40 60 100 120#21Agenda Delticom at a Glance Business Model Profit & Loss Balance Sheet Outlook Investor Presentation FY 2010 At a glance Business Model Profit & Loss Balance Sheet Outlook Hanover, 23 March 2011 DELTICOM 8 21 Aktiengesellschaft#22Outlook Current trading in Q1: difficult comps price increases in the first weeks ☐ Japan has increased volatility of natural rubber and oil prices Market for replacement tyres Germany: 2011 est (BRV, as of March 2011): summer ±0%, winter ±0% (?) shortages likely for summer season experts still undecided about impact of Japan on the European tyre trade 2011 top and bottom line drivers: negative base effects (Q4) after 3 good winters in a row. Other factors: ☐ seasonal effects customers are trading down ■ Delticom is international Delticom is online winter tyres online channel gains importance diversified country portfolio good prices, good sales, good margins. Revenues FY11: 2 +10% yoy EBIT-Margin FY11: -1%p yoy Investor Presentation FY 2010 Hanover, 23 March 2011 At a glance Business Model Profit & Loss Balance Sheet Outlook DELTICOM 8 22 Aktiengesellschaft#23Summary 1 #1 European online tyre retailer 2 Resilient and profitable business model 3 Strong cash flow, strong balance sheet 4 Redesign of the tyre distribution chain LO 5 Excellent growth opportunities Investor Presentation FY 2010 Hanover, 23 March 2011 Investor Relations: Melanie Gereke Delticom AG Brühlstr. 11 30169 Hanover, Germany eMail: [email protected] phone: +49-511-93634-8903 DELTICOM 23 Aktiengesellschaft