- WKN: 514680
- ISIN: DE0005146807
- Land: Deutschland
Nachricht vom 26.03.2020 | 18:14
Delticom AG publishes Annual Report 2019: Financial, assets and earnings position affected by restructuring and deinvestments
DGAP-News: Delticom AG
/ Key word(s): Annual Results
Delticom AG publishes Annual Report 2019: Financial, assets and earnings position
Hanover, March 26, 2020 - Delticom AG (German Securities Code (WKN) 514680, ISIN DE 00005146807, stock market symbol DEX) today published its Annual Report 2019. The past fiscal year is characterized by consolidation, both with regard to the market environment and the Delticom group's organizational structure.
Sales and earnings positions
The unusually mild winter, which resulted in weaker winter tyre business, caused consolidated revenue to shrink by 3.1 percent in 2019 from € 645.7 million to € 625.8 million. In addition to weaker demand, the increased focus on profitability also contributed to this decline in sales. The European market environment in Delticom AG's core business was again characterized by takeovers and insolvencies in 2019. In addition, various European market players discontinued their online shops last year. Experts speak of a weak year for the European replacement tyre market. In the German tyre trade, sales of passenger car replacement tyres declined by 4.1 % on a year-over-year basis. Due to the mild winter, the total volume of winter tyres sold was 7.5% lower than in the previous year.
The company's refocusing on its core business - online trading with tyres and complete wheels in Europe - goes hand in hand with the clear objective of optimizing Delticom's cost structure in order to return to a sustainable profitable growth course and to be able to make better use of market opportunities in the future. The restructuring process initiated last year and the associated disinvestments to discontinue unprofitable business areas led to one-off effects totalling € 38.8 million in the past fiscal year, which had a negative impact on earnings. Of this amount, € 16.7 million are one-time expenses including restructuring costs. Of these one-off expenses, € 5.4 million are directly related to the divestments associated with impairment losses of € 22.1 million.
The complete adjustment of the balance sheet valuations of the loss-making companies in the efood and logistics sector in preparation for the closure or, in the case of DeltiLog GmbH, a possible sale in H1 2020, had a negative impact on the Group's earnings last year. Consolidated net income totalled € -40.8 million (€ -3.27 per share) compared to € -1.7 million (€ -0.13 per share) in the previous year. Group operating EBITDA before non-recurring expenses totalled € 10.0 million in fiscal year 2019. EBITDA decreased from € 9.0 million to € -6.6 million. This corresponds to an EBITDA margin of -1.1%. Depreciation and amortization including impairment losses totalled € 35.4 million (2018: € 7.9 million). This includes depreciation and amortisation of rights of use in the amount of € 4.8 million in connection with the first-time application of IFRS 16.
The measures initiated and already implemented last year represent an important step towards increasing efficiency and profitability. Cost savings in marketing and the income generated from the participation in a logistics/property project compensated for some of the above-mentioned effects.
The following table bridges the effects from operating EBITDA to consolidated net income (technical rounding differences):
The Delticom group's financial and net assets position as of December 31, 2019 is also characterized by the extensive measures to restructure and realign the company.
Against the backdrop of active working capital management, inventories were reduced by € 36.6 million to € 62.9 million in the course of the year. As a result of the measures implemented last year to optimize warehouse logistics processes, Delticom's customers also benefited from high delivery capacity and shorter delivery times last winter. Corresponding to the decrease in inventories, trade payables were also significantly lower compared to the previous year, totalling € 69.4 million (31.12.2018: € 130.9 million). Thanks to intensified receivables management, the capital tied up in receivables fell from € 16.2 million to € 4.0 million. The average customer target was 5.9 days (2018: 9.4 days).
As of 31.12.2019, liquidity amounted to € 5.3 million (31.12.2018: € 3.4 million). Net liquidity less current financial liabilities amounted to € -59.0 million, after € -23.9 million at the beginning of the year.
Primarily due to a reporting date effect, current liabilities to banks were € 37.2 million higher than on the previous year at € 64.3 million. The increase in non-current interest-bearing liabilities by € 25.0 million to € 28.8 million is largely due to the capitalization of rights of use from rental and leasing obligations in the course of the first-time application of IFRS 16.
The company's equity decreased by € 41.0 million to € 8.3 million. This significant decline is primarily due to the negative consolidated net income in the past fiscal year.
For the current fiscal year, the Delticom group is forecasting total annual revenues of € 600 to 630 million and EBITDA of between € 1.0 and 5.0 million. The Managing Board is forecasting extraordinary expenses of around € 4 million for restructuring and discontinuation. Further loss-makers will either be completely wound up in the coming months or, like DeltiLog GmbH, will probably be sold by the middle of the year. Operating EBITDA in the current year will therefore be in the range of € 5 to 9 million.
The extent to which the corona virus, which is spreading rapidly in Europe, will affect the course of business in the current year can currently only be estimated with considerable uncertainty. On the one hand, the novel corona virus may temporarily lead to increased online demand. On the other hand, official and private restrictions will affect the use of vehicles and thus, eventually the replacement tyre business. However, we currently expect that the current measures to reduce the speed of spread of the virus will only temporarily shift demand for replacement tyres, as the purchase of replacement tyres cannot be postponed indefinitely.
"However this will further develop in the coming weeks," commented CFO Thomas Loock on the occasion of the presentation of the 2019 Annual Report, "we are on the right track with our e-commerce orientation". Even without Corona, the increasing global digitalisation, together with a steadily rising online penetration, is a key factor for future growth.
Independent of Corona, the executive board is "cautiously optimistic for the current and next year", says Loock. The concept for a sustainable return to profitability includes a comprehensive action plan for the restructuring period until the end of 2021. With the measures already initiated last year to close loss-making companies, reduce costs and increase efficiency, the company is ahead of its restructuring plan. The one-off effects from value adjustments and restructuring costs in 2019 will significantly relieve the financial and asset situation in the current year. For the current year, the company is already planning a positive free cash flow in the high single-digit million range.
Stable business relationships with manufacturers and wholesalers, extensive experience in cross-border online trading with largely automated business processes underlines Delticom's market presence and competitive strength. For the current year, the company plans to invest a high single-digit million amount in expanding and technically equipping its warehouse infrastructure and customer-oriented programs.
As the market leader in European online tyre retailing, Delticom will continue to benefit over the medium term from the increasing importance of e-commerce as a sales channel in its core online tyre business. The Managing Board writes the following statement in the management report of the annual report: "By refocusing on its core business and consistently implementing the turnaround measures approved in the restructuring report, the Delticom group will start to record positive results again in 2021. The medium-term target is an operating EBIT margin of 2 %."
The product portfolio for private and business customers comprises an unparalleled range of more than 600 brands and around 18,000 tyre models for cars, motorcycles, trucks, commercial vehicles and buses. Complete wheels and rims complete the product range. The company operates 440 online shops and sales platforms in 75 countries, serving around 15 million customers.
As part of the service, the ordered products can be sent to one of Delticom's approximately 39,000 service partners worldwide for mounting at the customer's request.
Based in Hanover, Germany, the company operates primarily in Europe and the USA 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 2019, Delticom AG generated revenues of around 626 million euros. At the end of last year, the company employed 242 people.
Delticom AG shares have been listed in the Prime Standard of Deutsche Börse since October 2006 (ISIN DE0005146807).
On the internet at: www.delti.com
|Phone:||+49 (0)511 93634 8000|
|Fax:||+49 (0)511 8798 9138|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||1008623|
|End of News||DGAP News Service|