Slide 1: Delticom AG – German Equity Forum
Delticom AG Europe's leading online tyre retailer German Equity Forum November 16 – 18, 2020
Slide 2: Agenda
Agenda Content of presentation ▪ Delticom Group – Refocusing on core business ▪ Market environment ▪ 9M 2020 − Market conditions under COVID-19 − Key financials ▪ Outlook FY 2020 ▪ Business model “Delticom NEW” ▪ Strategic direction 2 Delticom AG – Company Presentation
Slide 3: Delticom Group – Refocusing on core business
Delticom Group – Refocusing on core business Journey, learnings and way forward ▪ Profitable growth path between 2006 and 2011 in core online tyre business Europe ▪ Increased competition in online tyre sales since 2011 ▪ Strategy of e-commerce diversification into e-food was not successful ▪ Losses
Slide 4: Refocusing on core business: Update on Turnaround Process
Refocusing on core business: Update on Turnaround Process Divestment of loss-makers: non-core activities (loss-makers) closed Completed Refocusing on core business in Europe: Sale of US subsidiary under review due to lack of synergies; continuation still a valid option; ~ Ongoing US subsidiary ope
Slide 5: Market environment 1/2
Market environment 1/2 Growth potential in promising e-commerce Growth potential in promising e-commerce ▪ European tyre replacement market considered stable for the coming years ▪ Growth prospects due to low internet penetration rate in the tyre sector ▪ Penetration rate in Europe is around 10% ▪ A
Slide 6: Market environment 2/2
Market environment 2/2 Growth potential in promising e-commerce ▪ Market leadership was defended over the past years despite increased competition in online tyre trade ▪ Strategy focussed on market leadership instead of driving penetration ▪ Various European market players discontinued their online
Slide 7: Market conditions 9M 2020
Market conditions 9M 2020 ▪ COVID19: Shutdown decisions in various European countries weighed on demand ▪ Demand for replacement tyres influenced by weather-related shifting effects (start of the winter season slightly delayed) ▪ German passenger car replacement tyre market decreased by 15.1% in 9M
Slide 8: 9M 2020: Revenues development
9M 2020: Revenues development Revenues (in €m) -15.5% / -65 €m 420 -11% core 355 business -13.6% / -19 €m 136 117 Q3 2020 Q3 2019 9M 2020 9M 2019 * excluding effect from closed operations ▪ Corona pandemic affects tyre business in 9M/2020 (e.g. massive shutdown in southern European countries in H1/2
Slide 9: 9M 2020: Gross margin
9M 2020: Gross margin Gross margin (Revenues less COGS; in % of revenues) + 1.9 pps. + 1.9 pps. + 1.8 pps. 24.1 23.9 22.2 23.7 22.0 21.9 Q3 2020 Q3 2019 9M 2020 9M 2019 H1 2020 H1 2019 ▪ Gross margin increase despite difficult market environment 9 Delticom AG – Company Presentation
Slide 10: 9M 2020: Reported & Operating EBITDA
9M 2020: Reported & Operating EBITDA Reported EBITDA (in €m) +7.2 €m +9.5 €m +2.2 €m Q3 2020 Q3 2019 9M 2020 9M 2019 H1 2020 H1 2019 3.2 1.7 -1.5 -3.7 -4.0 -7.8 Operating EBITDA (before restructuring costs; in €m) +8.2 €m +14.4 €m +6.1 €m Q3 2020 Q3 2019 9M 2020 9M 2019 H1 2020 H1 2019 4.2 6.6 2.4 -
Slide 11: 9M 2020: EBIT
9M 2020: EBIT EBIT (in €m) +7.9 €m +12.3 €m +4.3 €m Q3 2020 Q3 2019 9M 2020 9M 2019 H1 2020 H1 2019 0.7 -5.4 -6.2 -7.2 -17.8 -10.5 ▪ Positive EBIT in Q3 2020, sustained improvement ongoing (Q2 2020: +1,5 €m) ▪ Declining depreciation in 9M 2020 (7.2 €m) compared to 9M 2019 (10.0 €m) 11 Delticom AG –
Slide 12: 9M 2020: P&L
9M 2020: P&L Unit 9M 2020 9M 2019 Revenues €m 355.3 420.3 -15.5% Gross profit €m 100.9 113.2 -10.9% Personnel €m 11.0 14.3 -23.2% Positive impact from divestment of expenses loss-making subsidiaries Advertising €m 12.6 21.5 -41.4% Efficiency measures for cost reduction in costs the core business imp
Slide 13: 9M 2020: Working Capital
9M 2020: Working Capital Unit 30.09.2020 31.12.2019 30.09.2019 Further optimization of stock delivery times Inventories €m 75.9 62.9 103.1 Discontinuation of unprofitable business units Trade payables €m 83.7 69.4 119.0 Trade receivables €m 21.2 10.5 27.9 Streamlined working capital management in or
Slide 14: 9M 2020: Free Cashflow
9M 2020: Free Cashflow Free Cashflow 9M 2020 (€m) Free Cashflow H1 2020 (€m) Cashflow from Cashflow from operating activities investing activities Free Cashflow Cashflow from Cashflow from 6.9 6.0 operating activities investing activities Free Cashflow 3.7 -0.9 2.4 -1.3 Free Cashflow H1 2019 (€m) Ca
Slide 15: Revised Outlook FY2020: Revenues and EBITDA Guidance
Revised Outlook FY2020: Revenues and EBITDA Guidance € 550 – 570 m expected restructuring invest 2020 of about 7 m€ - mainly legal and consultancy costs € 12 – 15 m €5–8m Previous Outlook: € 10 - 13 m Revenues EBITDA (reported) Operating EBITDA 2020e 2020e 2020e Strong focus on profitability: Return
Slide 16: Milestones achieved – Overall strategic direction
Milestones achieved Overall strategic direction Objective: Delticom is Europe’s strongest Ziel: Umstrukturierungsstrategie überzeugtand most profitable Banken company in und Geschäftspartner online tyre retailing ▪ Successful Turnaround Management ▪ Continuous improvement of profitability ▪ Sale and
Slide 17: Business model “Delticom NEW” 1/2
Business model “Delticom NEW” 1/2 Objective: Using and expanding the strengths in the market ▪ High level of awareness of flagship stores such as ReifenDirekt.de, 123pneus.fr and others ▪ High confidence of 15 million customers due to outstanding processing competence ▪ Based on 20 years of market p
Slide 18: Business model “Delticom NEW” 2/2
Business model “Delticom NEW” 2/2 Objective: Using and expanding the strengths in the market ▪ Extensive product portfolio with 100 brands and over 18,000 tyre models ▪ 40 percent of telephone customer contacts automated through self-service ▪ Rims and complete wheels for almost all vehicles with 36
Slide 19: Perspective
Perspective Objective: Sustainable return to profitability The package of measures in the tyre business promises attractive prospects: ▪ Sustainable sales in the core business online tyres Europe of around half a billion euros p. a. ▪ At margin level: lower purchase prices, effects of cost depressio
Slide 20: Conclusion
Conclusion Objective: Success in online tyre sales ▪ Delticom has disposed almost all loss-making activities Xetra closing price 26.10.2006 to 12.11.2020 ▪ The restructuring process is proceeding successfully 100 80 ▪ Core tyre business returns to profitability in 2020 without 60 extraordinary effec
Slide 21: Q&A
Q&A Ziel: Umstrukturierungsstrategie überzeugt Banken und Geschäftspartner A firm grip on the road to success 21