Business News
CEWE on target for 2014 after first half year
Tuesday 19. August 2014 - - CEWE PHOTO BOOK continues to increase - Online printing grows by 24.8% in the first half year - Return on equity continues to improve: ROCE increases to 17.0% - Capital ratio rises to 53.4%
CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) is on track to reach its targets for the current business year after the first six months of 2014: Income compared to the target figures for 2013 is to be improved on average by around 3 million euros, in terms of EBIT and EBT and of after-tax earnings. As expected, turnover in the first half year, which is typically weak and loss-generating for seasonal reasons, was reduced from 218.2 million to 204.2 million euros. In addition to the continuing seasonal shift to the fourth quarter, one of the main reasons is the scheduled reduction in turnover from wholesale business in the business segment of retailing, which only generated minimal margins in the previous years. EBIT improved by around three million euros in the first six months of 2014 in comparison to the same period of the previous year, which had continued to be negatively affected by expenditure for restructuring, to amount to -7.3 million euros (1 H 2013: -10.3 million euros), and is thus fully in line with targets. In the case of EBIT on a rolling 12-month basis, which does not reflect seasonal fluctuations, CEWE achieved EBIT of 32.4 million euros (target for 2014: 30-36 million euros). CEWE is now generating by far the greatest share of its earnings in the fourth quarter, with EBIT in the Christmas quarter of 2013 amounting to 33.5 million euros. “We have set ourselves ambitious targets for 2014: continuing with our dynamic growth in online printing and at the same time strengthening our earning power throughout the company. The first half year has shown that we are well on the way to achieving both targets,” says Dr. Rolf Hollander, Chairman of the Board of Management of CEWE Stiftung & Co. KGaA.
Online printing grows even more than anticipated
Online printing grew by 24.8% to 33.9 million euros in the first six months of 2014, which was an even greater increase than had been expected. CEWE is aiming for an increase in turnover of more than 17% in this business segment for 2014 as a whole. EBIT in the segment improved slightly in spite of increased start-up investments for marketing expenses and depreciation on machinery, from – 2.0 million euros to -1,9 million euros. The EBIT margin improved markedly due to the higher level of turnover, from -7.2% in the same quarter of the previous year to -5.7% in the first six months of 2014. “The increase in the number of new customers and our satisfied regular customers are an excellent basis for our future growth,” Dr. Hollander emphasises.
Photofinishing EBIT improved by around 3 million euros
In the first half year of 2014, the CEWE PHOTO BOOK volume, with an increase of 2.9% to 2.26 million, exceeded the target corridor of an increase of 1 to 2% for the year as a whole. This is again confirmation of the trend towards added value products, which has once again largely compensated for the 3.7% decrease in the absolute number of photos produced, to 932.2 million. Due to the renewed increase in the turnover per photo, of 2.8% to 14.75 euro cents, turnover in the photofinishing segment remained virtually consistent at 137.5 million euros (1H 2013: 138.8 million euros). In spite of the continuing seasonal shift to the fourth quarter – demand for photo products in the photofinishing segment which are to be used as Christmas gifts is increasing – the EBIT improved by around three million euros to – 4.3 million euros, also because of the expenditure for restructuring included in the previous year.
Retailing EBIT almost stable in spite of scheduled decrease in turnover
As already announced, CEWE retailing discontinued its hardware wholesale business in the first half year of 2014. The high volume of turnover relating to the business hardly contributed to earnings in the previous year. With turnover reduced by 37.3% to 32.7 million euros, the retailing segment EBIT, at – 1.1 million euros, was almost the same as in the previous year.
Return on equity rises significantly: ROCE improves to an extremely sound 17.0%
After 13.7% in the previous year, the return on capital employed (ROCE) on a 12-month basis reached an extremely sound level of 17.0% as at 30 June 2014. The capital ratio was 53.4%. CFO Dr. Olaf Holzkämper: “By selling our own shares we have not only raised our free float to 70.1%; we have at the same time continued to increase our capital ratio and reduce our debts. We have thus increased our strategic scope and are now in a position to strengthen the company through acquisitions when attractive opportunities arise, in the business segments of online printing and photofinishing, as well as in the neighbouring business segments.
Outlook: 2014 targets reaffirmed
On the basis of the first half year, the Board of Management confirms its earnings targets defined for 2014. Target earnings corridors are all three million euros higher than in the previous year. 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. Earnings per share are to amount to 2.84 to 3.45 euros, thus making it possible to raise the dividend for the sixth year in succession.