- Turnover increases in period up to mid-year by 5.7 million euros to 212.9 million euros
- EBIT exceeds previous year's level by 0.8 million euros, operative improvement of 1.8 million euros
- Selective acquisition strategy: CEWE acquires majority interest in "DeinDesign"
CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) increased its turnover and its earnings over those of the same period of the previous year in the first half year, typically a weak period for seasonal reasons: Turnover grew by 5.7 million euros to 212.9 million euros, and the EBIT improved by 0.8 million euros to -7.0 million euros. The improvement even amounts to 1.8 million euros before the restructuring expenses incurred in Q1 2015. Unlike in previous years, turnover and earnings developed slightly positively in the first six months. On this basis and in view of renewed expectations for a seasonal and income peak in Q4, CEWE is confirming its annual targets: In 2015, the Group turnover for all the business segments is to reach a figure in the range of 515 million to 535 million euros (2014: 523.8 million euros), and the EBIT is to be in a target corridor of 32 million to 38 million euros (2014: 32.6 million euros). For the past 12 months, the rolling EBIT amounts to as much as 33.4 million euros. CEO Dr. Rolf Hollander: "Growth and profits in photofinishing, in commercial online printing and once again in retailing are developing according to plan, so we are clearly confirming our annual targets."
Photofinishing grows by 5.4 % to 148.1 million euros and increases earnings
The business segment of photofinishing contributed to the positive development of the first six-month period with an increase in turnover of 5.4 % to 148.1 million euros and an improved EBIT, by 1.2 million euros to -3.6 million euros. Adjusted by restructuring costs of 0.4 million euros in Q1, the EBIT even exceeded the same figure for the previous year by around 1.7 million euros. The "from mass to class" trend has clearly continued: turnover per photo rose again in the period up to mid-year, by 8.9 % to a current 16.43 cents. This trend is being driven by high-quality CEWE PHOTO BOOK designs and the other brand-name and added-value products (such as CEWE WALL PICTURES, CEWE CALENDARS and CEWE CARDS).
Abstaining from its low-margin wholesale line of business in Poland resulted in a scheduled drop in turnover of around 4.3 million euros to 28.5 million euros in the retailing segment (H1 2014: 32.7 million euros). However, the EBIT in retailing, at -1.3 million euros (H1 2014: -1.1 million euros), fell only insignificantly short of the figure for the previous year, in spite of restructuring costs. Adjusted by these non-recurring costs of 0.6 million euros, the business segment of retailing even achieved a 0.3 million euro improvement in its operative EBIT, which amounted to -0.7 million euros in the first six months of 2015.
Commercial online printing increased turnover by 7.1 % in the first six months, to 36.3 million euros. Core online business in the Internet portals grew by as much as 9.4 % in the first half year of 2015. In spite of a scheduled increase in marketing and staff costs, the commercial online printing EBIT, at -2.2 million euros, was only slightly weaker than in the first half year of the previous year (H1 2014: -1.9 million euros). "In 2016 we will be switching towards income, and will gradually benefit from enhanced brand awareness and an established customer base with growing profits," says Dr. Hollander.
"DeinDesign" acquisition supplements the portfolio of customisable products
CEWE acquired a majority interest in "DeinDesign" shortly before the end of the first half year of 2015. "DeinDesign" produces and markets mainly customisable smart phone cases and films for personalising a number of electronic appliances on its own website www.deindesign.de. In 2014 the company achieved turnover of as much as around six million euros. It is currently continuing to grow strongly, at approximately 30 %. With its wide range of products, mainly targeted at young consumers, "DeinDesign" is an excellent supplement to the CEWE photofinishing portfolio. Dr. Hollander: "It all comes together. We are always very selective in our acquisitions. We were already successful in pursuing this strategy when we acquired SAXOPRINT - and our selective approach has proved its worth. 'DeinDesign' is for the time being a small step, but it does round our photofinishing business off well."
CEWE remains selective in its acquisitions
In spite of another increased dividend payment of 11.2 million euros, high income generated in the previous year saw the capital ratio increasing to 55.1 % as at 30 June 2015 (30 June 2014: 53.8 %). CFO Dr. Olaf Holzkämper: "Our absolutely healthy, rock-solid financing structure is a significant asset for our shareholders. We remain open to larger-scale acquisitions that meet our demanding criteria, but we are maintaining our principle that each acquisition must be able to increase the value of every single share."
2015 targets confirmed: earning power and dividends to continue to increase
In 2015, the Group turnover for all the business segments is to lie in the range of 515 million to 535 million euros (2014: 523.8 million euros). While the Board of Management expects sales to be just about stable in the higher-margin sector of photofinishing, the planned decline in retail business sales is mainly to be more than offset if possible by an expected rise in turnover generated with commercial online printing. After 70.5 million euros in 2014 (+ 17.8 %), the management believes that turnover can be increased to around 80 million euros, and that the starting loss for commercial online printing can be further reduced in 2015. CEWE continues to maintain its target of generating a positive contribution to income in this new business segment from 2016 on. For the Group as a whole, the target corridors for operative earnings show a considerable increase over the earning achieved in 2014: the EBIT is to be in a target corridor of 32 million to 38 million euros (2014: 32.6 million euros). The rolling EBIT, at 33.4 million euros, is already now within the range for the preceding twelve months. The 2015 EBT is to amount to 30 million to 36 million euros (2014: 31.5 million euros) and earnings after tax are to reach an amount ranging from 20 million to 24 million euros (2014: 21.4 million euros). Earnings per share are to be in the range of 2.87 to 3.45 euros (2014: (3.07 euros per share). At the same time the management is confirming its aim of continuing to raise dividends in the coming years as well.
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