ANNUAL REPORT 2016 REPORT ANNUAL Profile 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 com- plex, 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. In addition to design, Delticom also provides product descriptions and a compre- hensive customer service programme in your national language. Our expertise in trans-national E-Commerce and 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 ware houses, including a fully auto- mated small item warehouse. In 2016, Delticom AG generated sales in excess of € 600 million. The E-Commerce specialist operates in 68 countries with over 380 onlineshops and online distribu- tion platforms, serving over 10 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 DELTICOM AG DELTICOM 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. Annual Report 2016 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). Delticom AG Brühlstraße 11 30169 Hannover Germany www.delti.com ANNUAL REPORT 2016 REPORT ANNUAL Profile 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 com- plex, 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. In addition to design, Delticom also provides product descriptions and a compre- hensive customer service programme in your national language. Our expertise in trans-national E-Commerce and 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 ware houses, including a fully auto- mated small item warehouse. In 2016, Delticom AG generated sales in excess of € 600 million. The E-Commerce specialist operates in 68 countries with over 380 onlineshops and online distribu- tion platforms, serving over 10 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 DELTICOM AG DELTICOM 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. Annual Report 2016 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). Delticom AG Brühlstraße 11 30169 Hannover Germany www.delti.com Highlights 2016 Highlights Q1 2017 Financial Calendar More than 02.05.2017 Annual General Meeting 15.05.2017 3-monthly notification 2017 Revenues 25 new online shops 14.08.2017 6-monthly report 2017 € million > 600 in over 15 countries 14.11.2017 9-monthly notification 2017 27.–29.11.2017 German Equity Forum Frankfurt revenues (2015: € 559.8 million) 3 new shop brands: AutoPink-Shop, Cheesemondo & Coffeemondo Consolidated net income € 4.5 million. € 0.36 earnings per Launch of share Planned dividend of Autoreifenonline.de app € 0.50 per share (previous year: € 0.50 ) More than More than 145,000 Imprint new customers 1,297,000 More than Publisher Delticom AG Brühlstraße 11 new customers 30169 Hanover More than 207,000 Germany customers made a repeat purchase with us 700,000 Contact Investor Relations Melanie Gereke customers made a repeat purchase with us expanded in the area of rims and Brühlstraße 11 Variety of products complete wheels 30169 Hanover Phone: +49-511-93634-8903 E-Mail: [email protected] Highlights 2016 Highlights Q1 2017 Financial Calendar More than 02.05.2017 Annual General Meeting 15.05.2017 3-monthly notification 2017 Revenues 25 new online shops 14.08.2017 6-monthly report 2017 € million > 600 in over 15 countries 14.11.2017 9-monthly notification 2017 27.–29.11.2017 German Equity Forum Frankfurt revenues (2015: € 559.8 million) 3 new shop brands: AutoPink-Shop, Cheesemondo & Coffeemondo Consolidated net income € 4.5 million. € 0.36 earnings per Launch of share Planned dividend of Autoreifenonline.de app € 0.50 per share (previous year: € 0.50 ) More than More than 145,000 Imprint new customers 1,297,000 More than Publisher Delticom AG Brühlstraße 11 new customers 30169 Hanover More than 207,000 Germany customers made a repeat purchase with us 700,000 Contact Investor Relations Melanie Gereke customers made a repeat purchase with us expanded in the area of rims and Brühlstraße 11 Variety of products complete wheels 30169 Hanover Phone: +49-511-93634-8903 E-Mail: [email protected] Key Figures 01.01.2016 01.01.2015 –/+ – 31.12.2016 – 31.12.2015 (%, %p) Revenues € million 606.6 559.8 +8.4 Total income € million 627.2 573.6 +9.3 Gross margin1 % 23.2 23.6 –0.5 Gross profit2 € million 140.5 132.2 +6.2 EBITDA € million 15.1 14.3 +5.5 EBITDA-Marge % 2.5 2.6 –0.1 EBIT € million 7.2 5.6 +28.9 EBIT margin % 1.2 1.0 +0.2 Net income € million 4.5 3.4 +32.4 Earnings per share3 € 0.36 0.28 +27.6 Total assets € million 183.3 160.0 +14.6 Inventories € million 62.7 61.8 +1.5 Investments4 € million 33.1 2.7 +1141.4 Equity € million 58.5 51.3 +14.0 Equity ratio % 31.9 32.0 –0.1 Return on equity % 7.6 6.6 +1.1 Liquidity position5 € million 6.7 11.0 –39.4 Operating cash flow € million 19.7 –8.7 Free cash flow6 € million –3.2 –11.7 (1) Gross profit ex other operating income in % of revenues (2) Gross profit ex other operating income (3) Undiluted (4) Investments in tangible and intangible assets (5) Liquidity position = cash and cash equivalents + liquidity reserve (6) Free cash flow = Operating cash flow – Cashflow from investing activities 2 Letter to Our Shareholders Letter to Our Shareholders Letter to Our Shareholders Table of Contents Dear shareholders, colleagues and friends, 3 Letter to Our Shareholders We look back on a successful fiscal year. In 2016, we raised our revenues by more than 8-% compared with the year-earlier period and, at €-606.6 million, generated the highest revenue volume in the his- 6 Report of the Supervisory Board tory of our company. In addition, we raised annual net income to €-4.5 million, reflecting an increase of more than 30-% in a year-on-year comparison. Our earnings before interest, taxes, depreciation and 16 Management-Interview amortization (EBITDA) of €-15.1 million were also higher than in 2015 (€-14.3 million). However, we did not quite achieve the figures planned at the beginning of 2016 for revenues and EBITDA when we 20 Combined Management Report of Delticom AG set a revenue range of between €-620 million and €-630 million and a target of €-16 million for EBITDA. This was attributable above all to the mild temperatures in the winter season with the impact on rev- 85 Consolidated Financial Statements of Delticom AG enues on the one hand and non-recurrent expenses of € 700 thousand on the other hand. The latter were mainly incurred by legal and consultancy fees in the course of acquiring the efood and 92 Notes to the Consolidated Financial Statements of Delticom AG logistics companies Gourmondo and DeltiTrade (formerly ES Food) in February of the fiscal year ended and by the acquisition of the material assets of AutoPink in November. The moderate increase in 135 Responsibility Statement EBITDA in fiscal 2016 also resulted from the negative EBITDA of the newly acquired business lines. If these two factors are excluded, we achieved operating earnings before depreciation and amortization 136 Auditors' Report of €-18.7 million from our core business, which represents a significant increase compared with the previous year’s figure of €-15.9 million that was adjusted for non-recurrent expenses.