Business News

CEWE confirms targets for 2014

Thursday 15. May 2014 - - Sales, turnover and income in Q1 2014 on target - CEWE PHOTO BOOK increases by 3.6% - Online printing grows by 26.6% - EBIT improves by 2.4 million euros in comparison to Q1 2013 - Capital ratio increase to more than 50%

CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) has confirmed its targets for the 2014 business year after the first quarter of 2014. For the EBIT, EBT and annual net profit the Board of Management expects to see earnings improving by around three million euros in each case in comparison to the target figures for 2013. In the typically weakest quarter of the year, CEWE increased its earnings by as much as 2.4 million euros, and is thus well on the way to reaching its targets. “We are confirming our targets for 2014 on the basis of the results achieved so far,” says Dr. Rolf Hollander, Chairman of the Board of Management of CEWE Stiftung & Co. KGaA. The turnover, at 101.2 million euros (Q1 2013: 106.6 million euros), has been reduced by 5.1 percent, primarily as a result of abstaining from low-margin retail business, while the EBIT has improved to amount to -4.0 million euros (Q1 2013: -6.4 million euros). Expenditure for restructuring in the amount of 2.3 million euros had still had an effect on the figure for the previous year. CEWE is now generating by far the greatest share of earnings in the fourth quarter (EBIT Q4 2013: 33.5 million euros). In the first quarter of 2014, online printing continued to develop strongly, increasing by 26.6% to 16.3 million euros. For the whole of 2014, CEWE is aiming for an increase in turnover to more than 70 million euros in this business segment. The volume of CEWE PHOTO BOOKS sold also increased over that of the previous year in the first quarter, by 3.6% to 1.142 million books (target corridor for 2014: between +1% and +2%). In an annual comparison, equity increased from 122.5 million to 135.5 million euros, and the capital ratio rose from 44.6% as at 31 March 2013 to 50.2% as at the end of the quarter of the report.
Photofinishing EBIT improved by 2.4 million euros
In the first quarter, turnover generated by photofinishing, at 68.5 million euros, was exactly in the target corridor ranging from 67.5 to 69.4 million euros (Q1 2013: 69.2 million euros). Photofinishing business was positively affected by the order-promoting prolonged winter period in the previous year. This makes it all the more remarkable that the business segment of photofinishing almost reached the good turnover level of the previous year, in spite of a mild, shorter winter period. Demand for the CEWE PHOTO BOOK played a major role in this case. On the basis of the unchanged positive trend from “mass to class”, turnover per photo rose by 2.6% in comparison to the same quarter of the previous year, to 14.60 eurocents per photo. CEWE improved its EBIT in the business segment of photofinishing over that of the previous year by 2.4 million euros to -2.1 million euros, mainly because expenses for restructuring were no longer incurred (Q1 2013: -4.5 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.
Online printing continues to grow strongly
In the first quarter of 2014, turnover generated by the business segment of online printing rose from 12.9 million euros in the same quarter of the previous year to 16.3 million euros – an increase of 26.6%. “We will also be investing more in marketing online printing in 2014, in order to be able to benefit from a larger customer base in future. The fact that turnover continues to grow strongly is confirmation of this strategy,” Dr. Hollander emphasises. In spite of slightly higher marketing expenses, as well as increased delivery costs as a result of a growth in international business and increased depreciation, EBIT for the business segment of online printing, at -1.2 million euros, was almost exactly at the same level as in the previous year (Q1 2013: -1.2 million euros). The EBIT margin improved from -9.4% in the same quarter of the previous year to -7.5% in the first quarter of 2014, relative to the significant increase in turnover.
Retailing EBIT stable
In the first quarter of 2014, CEWE retailing discontinued its low-margin wholesale business, which had generated considerable sales in the previous year, but had at the same time hardly contributed to earnings. Earnings are thus not negatively affected by the resulting decline in turnover. The business segment of retailing achieved exchange-rate adjusted turnover in the amount of 17.5 million euros (Q1 2013: 24.6 million euros), hence generating EBIT in the amount of -689,000 euros, which is equivalent to that of the previous year (Q1 2013: -657 thousand euros).
Outlook: Targets for 2014 confirmed and dividend to be increased again
The Board of Management confirms the defined targets for turnover and earnings in the light of the first-quarter results. With turnover slightly increased, CEWE intends to achieve a further increase in earnings in spite of advance payments for the growing online printing market. In 2014 the consolidated turnover in all the business segments is to increase from 528.6 million euros to 525 to 540 million euros. In the high-margin segment of photofinishing, the Board of Management expects the earnings quality to rise further with turnover approximately stable. If possible, a likely decline in retailing turnover is to be more than offset by the expected increase in turnover generated by online printing. The management expects turnover generated by online printing to grow to more than 70 million euros in 2014 (i.e. a rise of at least 17% against the previous year; Q1 2014: an increase of 26.6% over the previous year). The earnings corridors are three million euros higher than in the previous year. The EBIT in 2014 is to be in the range of 30 million to 36 million euros, and the EBT is to amount to 28 million to 34 million euros. After-tax earnings are to be in the range of 19 million to 23 million euros. The resulting earnings per share of 2.84 to 3.45 euros (2013: 3.29 euros) would enable the dividend to be increased again. The Board of Management and the Supervisory Board will be proposing to the Annual General Meeting on 4 June that the dividend be increased to 1.50 euros per share. Dr. Rolf Hollander: “Given the exceptionally sound financing and the consistently positive development, we are pleased to be able to increase the dividend for the fifth time in succession.”
Information
(1) Photofinishing: Production and sale of photo products such as the CEWE PHOTO BOOK, photo greeting cards, calendars, wall decorations and individual (analogue and digital) photos as well as other photo products
(2) Retailing: Trading in CEWE’s own retail stores in Norway, Sweden, Poland, the Czech Republic and Slovakia with photo hardware such as cameras and lenses
Core business: Aggregate of photofinishing and retailing
(3) Online printing: Production and sale of commercial print products in the online printing portals at CEWE-PRINT.de, Saxoprint.de and Viaprinto.de
Percentage deviations have all been calculated at the exact values.