Business News

CEWE COLOR exceeds earnings targets for 2009 and expects to double earnings in 2010

Monday 22. February 2010 - § Fourth quarter sees record earnings § 2009 operating profit (EBT) rises by 57% § Earnings targets for 2009 all exceeded § Earnings per share to double to around two euros per share in 2010

CEWE COLOR Holding AG (SDAX, ISIN: DE0005403901) doubled its
fourth-quarter operating profit from 7.7 million euros to 15.2 million euros. “We are delighted
with these record earnings. They demonstrate impressively that our business model is highly
stable and that we are on a path of steady growth,” said Dr. Rolf Hollander, CEWE COLOR Holding
AG CEO. The process of restructuring which became necessary due to the transformation to
digital photography on the market was completed in 2009. “In 2010 we intend to switch over
completely to increasing earnings and to double our earnings per share,” Hollander points out.
Operating profit doubled in Q4 2009
Earnings before tax (EBT) grew by 97% to a record 15.2 million euros in the fourth quarter of
2009. CEWE COLOR has never registered higher earnings in a fourth quarter throughout the
entire history of the company. Turnover increased by 6.7 million euros to 127.4 million euros,
with CEWE COLOR having significantly enhanced profitability: the pre-tax income margin was
virtually doubled, rising from 6.4% of turnover to 11.9%. “Operative measures to enhance our
earning power are paying off,” says Hollander. Digital printing in general, CEWE PHOTO BOOKS,
photo calendars and Christmas cards as well as the range of additional services and new designs
have developed particularly strongly.
Operating profit rises by 57%
The record earnings generated in the fourth quarter saw EBIT for the full year increase by 51% to
18.7 million euros and EBT rise by 57% to 16.8 million euros. After-tax earnings remained virtually
unchanged at 6.7 million euros against seven million euros in the previous year. This is the result
of a considerable loss in France, caused by restructuring expenses not being eligible for inclusion
in the remaining profits of the Group. “Without this effect the tax rate would have been 33.2%
and not 55.2%,” Dr. Hollander explains. “In France, operative improvements and the fact that
restructuring costs will no longer be incurred give us good reason to be optimistic about the
future, and we expect to generate profit margins here as well in 2010,” the CEO says.
Earnings targets for 2009 exceeded
These earnings enabled targets for 2009 to be exceeded. The EBT target corridor of 10 to 15
million euros was exceeded with the 16.8 million euros that were achieved. EBT before
restructuring expenses (9.5 million euros), at 26.3 million euros, is more than the 20 to 25 million
euros that had been targeted.
Sales targets for 2009 fully met
At the beginning of 2009, CEWE COLOR had formulated a goal of 420 to 425 million euros for
exchange rate adjusted turnover. This goal was even surpassed, with the exchange rate adjusted
yield amounting to 427.5 million euros. In November 2009, against the background of the
significant developments in exchange rates in 2009, the company stated a more precise nominal
sales target of 405 to 410 million euros. With generated turnover at 409.8 million euros, this
target was also clearly achieved.
Conversion of the operation in Bratislava to a sales organisation
Within the scope of permanent endeavours to optimise the company, the operation in Bratislava
is currently being converted to a sales organisation. “The costs associated with these attempts
are primarily special depreciation items, so this step will pay off as early as in the first year from a
cash point of view. CEWE COLOR not longer separates the costs incurred here in earnings, as it
had done in previous years. “Transformation-related restructuring measures, which had reduced
earnings by an average 10 million euros a year in costs over the past five years, have now been
concluded,” Hollander confirms.
Earnings per share to be doubled in 2010
CEWE COLOR plans to see turnover as well as revenue growing considerably in 2010: turnover is
to be raised from 409.8 million euros to 420 to 430 million euros, EBIT is to be raised from 18.7
million euros to 24 to 29 million euros and EBT from 16.8 million euros to 22 to 27 million euros.
In view of the unexpectedly positive development in France, after-tax earnings are to be doubled,
from 6.7 million euros to 12 to 15 million euros, so that earnings per share are to be increased
from one euro to 1.76 to 2.20 euros per share.
CEWE PHOTO BOOK continues to perform exceptionally well
The Board of Management expects to see a strong increase of 17% in the number of CEWE
PHOTO BOOKS sold, to total 4.2 million books and intends to maintain its market leader position
with this rise. The number of analogue photos from film rolls is expected to decrease by 41%, to
0.35 million photos; CEWE COLOR expects digital photos (including CEWE PHOTO BOOK and
photo gift article prints) to achieve a consistent volume of two million photos. “The trend ‘from
mass to class’ – that is, from very large numbers of chemically developed photos to added-value
products such as CEWE PHOTO BOOKS and photo gift articles – continues and is reinforcing sales
and earnings,” the CEO emphasises. For successfully mastering the transformation to digital
business – mainly through added value products – the German journal WirtschaftsWoche and
management consultants A.T. Kearney awarded CEWE COLOR the “2010 Best Innovator” prize as
by far the most innovative SME.
Basis: Unaudited CEWE COLOR Group income statement