Inkjet & Digital Printing
CeWe Color makes digital prints accessible to commercial users
Tuesday 18. November 2008 - Proportion of digital photos rises to 2/3 of the number of all photos; Nine-month sales at 299.3 million; Significant drop in need for investment; Free cash flow clearly strengthened; CeWe Color takes over diron for developing digital prints for commercial users
CeWe Color Holding AG (Prime Standard, ISIN: DE0005403901) has made excellent progress in the demanding process of transformation from analogue to digital photography which commenced in 1998. According to an interim report published today, the proportion of digital photos (including photo book prints) accounted for more than 2/3 of all prints for the first time ever in the third quarter of 2008. Nine-month sales figures were at 299.3 million euros (same period of the previous year 303.0 million euros). The seasonal shift into the fourth quarter of the year, which had been expected as a result of new, successful products, will see sales for the full year in excess of those of the previous year at 415 million euros to 420 million euros (2007 full year 413.5 million euros). After nine months, earnings before tax and restructuring amounted to 13.8 million euros (Q 1 – Q 3 2007 19.6 million euros).
The transformation seen over the past ten years, with investments in new digital products amounting to more than 200 million euros has in the meantime enabled CeWe Color to progress to become Europe’s largest digital printer in the segment for high-quality, four-colour prints. After this feat, the investment volume required will be lowered faster than had originally been anticipated and this year already investments in the acquisition of fixed assets and own work will amount to around 33 million euros instead of the 35 million euros originally projected. In 2009 the amount invested will drop again by more than 30% to less than 22 million euros. “We have come through the process of transition quicker than we had originally anticipated through putting our funds to efficient use. The fruits of these efforts will be harvested in the coming few years in the form of enhanced free cash flow and good results,” says Dr. Rolf Hollander, Chairman of the CeWe Color Holding Board of Management. The financial power of the company will continue to be considerably reinforced on this basis.
Acquisition of diron for the development of digital prints for commercial users
Given the high standard of digital printing, CeWe Color is now better able to focus on acquiring new customer segments and utilising new sales channels. In addition to the success product CEWE PHOTO BOOK (with 1.6 million books sold in Q1 – Q 3 2008 against 0.9 million in the same period of the previous year) and strong growth in sales of photo gift articles, the web-to-print area in particular will develop to become a new growth driver. Web-based professional digital print services for corporate customers of any scale are likely to show attractive developments. This is also the aim of the acquisition of diron GmbH & Co KG, one of the leading suppliers of software and consulting services around professional digital printing in the area of web-to-print solutions. CeWe Color expects this acquisition alone to result in additional sales of more than 20 million euros and good contributions to earnings on the basis of an EBIT margin of 10% in the period up to 2012. “We will not only be proving that we are the leading photo services company in Europe; we will also be exploiting additional opportunities in the area of high-quality digital prints. We expect to see considerable potential for sales and earnings in this market too,” says Dr. Hollander.