- CEWE PHOTOBOOK sales quantity continues to rise
- Sales grow by 3.7 % to 106.8 million euros
- Considerable growth in photofinishing and commercial online printing
- EBIT slightly improved
- ROCE reaches 16.9 % (2014 Q1: 16.2 %)
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 quarter, traditionally a loss generating quarter for the company: turnover improved by 3.7 % to 106.8 million euros, EBITDA by 1.0 million to +4.8 million euros, and EBIT by 0.7 million to -3.5 million euros. This already includes around 1.0 million euros in extraordinary expenses for closing a call center unit in Dresden and for restructuring the retail business in Poland. Earnings after tax increased from -4.2 million euros in the same quarter of the previous year to -3.6 million euros. CEWE is confirming its annual targets on the basis of the positive development in the first quarter and the seasonal peak in the fourth quarter: 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). The operating results are to exceed the 2014 results: EBIT is to be in a corridor of 32 million to 38 million euros in 2015 (2014: 32.6 million euros), EBT is to be in the range of 30 to 36 million euros (2014: 31.5 million euros), and after tax earnings between 20 million and 24 million euros (2014: 21.4 million euros). CEO Dr. Rolf Hollander: "In particular the photofinishing growth and development in earnings, and the growth in the area of commercial online printing show that we are on track - also strategically. The enhanced earning power on a 12-month basis clearly shows that we are well on the way to achieving our annual targets. We are systematically tackling the consolidation of our retail business in Poland, which means that we are further improving the basis for sustainable earning power for CEWE significantly."
Photofinishing grows by 7.5 % to 75.5 million euros and increases earnings
With a rise in turnover of 7.5 %, to 75.5 million euros, photofinishing contributed to the positive development of the first quarter. In particular the increased figure for each photo, by 8.6 % to 16.25 cents, is impressive testimony to the continuation of the "from mass to class" trend. It was not only the volume of CEWE PHOTO BOOKS that increased (+1.6 %); customers were increasingly deciding in favour of high-quality added-value products. So sales of CEWE WALL PICTURES, CEWE CALENDARS and CEWE CARDS continued to develop positively. Against this background and in spite of restructuring costs for the closure of a call center unit in Dresden (one-time expenditure of 0.4 million euros), the photofinishing EBIT improved to -1.1 million euros (2014 Q1: -2.3 million euros). First-quarter losses are an integral part of the seasonal profile for photofinishing, which is increasingly generating its turnover and in particular its earnings on the basis of the ongoing seasonal shift into the fourth quarter of each year.
As expected, CEWE reduced its turnover in the retail segment by 18.6 % to 13.4 million euros as a result of the discontinued, low-margin wholesale line of business and the restructuring of retail business in Poland. The decline in turnover as expected had no effect on earnings, so that EBIT before restructuring costs in this segment (one-time expenditure in the amount of 0.6 million euros) even improved slightly to - 0.6 million euros.
The business segment of commercial online printing, in which turnover continued to grow by 9.5 % to 17.9 million euros in spite of a slight increase in marketing expenses and a growth-related increase in staff costs, amounted to -1.3 million euros on an EBIT basis, thus almost reaching the result for the previous year (- 1.2 million euros) and at the same time slightly improving the EBIT margin.
Capital ratio reaches a new record high
The high income generated in the previous year and the shares previously held by the company in April 2014 as a result of an issue of shares both increased the capital ratio to a new record high of 60.7 % as at 31 March 2015 (31 March 2014: 50.7%). At the same time the return on capital employed was improved: although the average amount of capital employed was slightly raised to 196.8 million euros (2014 Q1: 193.5 million euros), the ROCE increased from 16.2 % to 16.9 % since the 12-month EBIT increased from 31.3 million to 33.3 million euros. "CEWE is extremely soundly financed, and can finance its organic growth and the acquisitions it makes itself," explained CFO Dr. Olaf Holzkämper.
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 high-margin sector of photofinishing, the potential decline in retail business sales is 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 an increase in commercial online printing turnover to around 80 million euros should be possible in 2015. CEWE continues to maintain its target of generating a positive contribution to income in this new business segment from 2016 on. The target corridors for operative earnings 2015 in comparison to the 2014 results indicate a clear increase: EBIT is to be in a corridor of 32 million to 38 million euros in 2015 (2014: 32.6 million euros), EBT is to be in the range of 30 million to 36 million euros (2014: 31.5 million euros), and after tax earnings between 20 million and 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 consistently raising dividends in the coming years.
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