Hanover, 07.05.2002 The tyre dealer Delticom starts the new financial year with a high increase in sales. In the first quarter of the current year, total revenue doubled in both of its business segments, Wholesale and E-Commerce, from 3.1 to 6.2 million Euros compared with the same time period last year. Usually, in the tyre industry, January and February are the quietest months of the year. The current summer tyre business - the season lasts from March to May - is continuing on a similar high level. In April, sales of 3 million Euros were registered. On 6th May, sales of 4.4 million Euros in the E-Commerce sector equalled the total revenue for the first three quarters last year.
Originally, the company planned sales of 25 million Euros. But, based on the successful start into the new business year, the Managing Directors of Delticom, Rainer Binder (44) and Andreas Prüfer (39), have decided to raise their revenue projections for the year 2002: "Faced with this pleasing development we now expect 35 million Euros."
Delticom has been nominated for this year's "Deutscher Gründerpreis" (German prize for entrepreneurship). The Hanover company is among the chosen Top 3 that have been selected for the category "Aufsteiger" (newcomer). The winner will be announced on 11th June. The prize is awarded by the Sparkasse finance group, the news magazine Stern, McKinsey & Company and ZDF. "We are proud to see our success being acknowledged", the Delticom management stated.
This year's upbeat continues last year's positive trend. At year end 2001 (record date: 31.12.2001) Delticom earned revenue of 21.7 million Euros. The company more than tripled its previous year's results (2000: 6.9 Mio. Euros) and surpassed its own revenue projection of 15.2 million Euros. The annual profit, based on IAS (International Accounting Standards), amounts to 322 thousand Euros compared with 33 thousand Euros in 2000. This year-end includes the newly founded subsidiaries in Great Britain and the Netherlands according to Delticom's stake: 100 percent of Delticom Ltd. and 90 percent in Delticom B.V. respectively.
The revenue distribution has remained unchanged: approximately two thirds being earned in the Wholesale business sector (13.7 million Euros) and one third in the E-Commerce business sector (8 million Euros). About 25 percent of the E-Commerce revenue was earned in the B2B market with service stations, workshops and dealers. Foreign revenue, especially from Austria and Switzerland, amounted to 10 percent of the E-Commerce revenue.
With increasing revenue and profit, working capital increased under average. At year-end approximately 2.9 million Euros (2000: 3.4 Mio. Euros) were invested for a short-term period. In July 2001 the company increased the nominal capital by 111100,- Euro to approximately 3 million Euro.
In the business year 2001 Delticom employed on average 21 employees. At year-end 24 people were employed, revenue earned per employee was approximately one million Euro. Delticom has plans to hire five more people in 2002 to continue its growth.
Delticom has suceeded in expanding its profitable market position. Once again the company managed to develop positively despite the current industry trend. 2001 was a difficult year for the tyre sector. Eberhard Reiff, vice-president of the federal association of tyre dealers and manufacturers (Bundesverband Reifenhandel und Vulkaniseur-Handwerk e.V.) in Bonn said: "The car tyre market stagnated in its sales to end-consumers. Despite good weather conditions, the wholesale business for winter tyres began very hesitantly, and will remain below last year's figures similar to dealer sales." (Source: BRV-Verbandsmitteilungen "Trends & Facts" Nr. 1, Januar/Februar 2002)
The business sector Wholesale has continued to develop positively. Delticom has established itself internationally as a wholesaler for tyres and rims. "It seems that in this business sector there are no limits to growth", commented Binder, Managing Director responsible for Wholesale. In the past year the company was able to increase the number of own and exclusive brands to 22.
At the end of 2000, the company was operative in 17 countries; by 2001 this increased to 45 countries on all five continents. Delticom now has customers in over 50 countries worldwide.
Well-positioned in the market are Delticom's own tyre brands such as the StarPerformer. This high speed tyre, manufactured in Europe, has been sold 300.000 times in over 30 countries. In 2002, Delticom will introduce further tyre brands into the market, for example the Formula brand.
Delticom has managed to secure itself a leading market position in Germany, Austria, and Switzerland by means of its E-Commerce business. The past year was marked by international expansion. The Hanover-based tyre dealer opened four B2C online tyre shops: Three car tyres shops: www.reifendirekt.ch in Switzerland, www.mytyres.net in the U.K., www.autobandenmarkt.nl in the Netherlands, as well as the first motorbike tyre shop in Germany, www.motorradreifendirekt.de.
In 2002 the company will expand its B2B business even further. Delticom has plans to open B2B shops in all the countries that already have a B2C tyre shop. This has already been implemented in the first quarter in the Netherlands (www.probanden.nl), in Austria (www.autoreifenonline.at) and in Switzerland (www.autoreifenonline.ch). The U.K. and Sweden are in planning. There are plans for further B2C shops. Besides the new shop in Sweden, launched in March, Delticom will expand to two other European countries, Denmark being one of them. In addition, motorbike tyre sales will be extended to other countries.
Within the E-Commerce business the first signs of success can be seen. According to their own sources, several mail-order businesses are making a profit using the Internet. The reversal of the economic trend began during the Christmas season 2001, led by the online book store Amazon figures for the fourth quarter. The forecasts for 2002 are positive. The euphoria has been replaced by sobriety; terms such as ROI (Return on Investment) have replaced the "hype".
German Internet trading has continuously defied the much talked about downturn. According to an estimation by NFO Infratest (based on a study carried out together with the Institute for Information Economics on behalf of the ministry of trade and industry) nearly 50 billion Euros will be realised in online sales in Germany. In Europe, Germany leads the market with a market share of 28.4 percent, followed by the U.K. and France. In 2002, 4.8 percent of all global e-commerce revenue will be generated here. In 2004, this ratio will rise to 9 percent according to the study.
Delticom has positioned itself very well in the e-commerce business. A positive sign is the number of hits, which has risen to the 3 million page impressions per month. Success factors include lower prices, as well as the comprehensive service. This is reflected in the customer opinions. For example, on 24th February, Jens W. from Magdeburg wrote: "A great web page. All Internet shops should be like this." And Sandra H. from Altenau wrote on 19th February: "Your page is brilliant, and very helpful for women that don't understand all of the technical terms. Thank you and keep up the good work!"
Delticom increased the number of service partners in the past year from 700 to 1.600 in all countries where the company has online tyre shops. "We are now benefiting from the fact that we were early adopters and first movers", explained E-Commerce Managing Director Prüfer. "There are several profitable young e-commerce companies out there, but none have such a solid financial foundation like ours."