Cewe Color improves turnover and earnings

Turnover increased by 3.3 percent to EUR 186.3 million, EBIT improved by EUR 1.4 million to EUR -4,5 million and after-tax earnings increased by as much as EUR 4.6 million to EUR -6.0 million. The cash flow from operative business was raised by EUR 1.6 million to EUR 12.6 million. Despite a record dividend of EUR 1.25 per share (2010 EUR 1.05 per share) and a payout of EUR 8.5 million, the company reported a sound capital ratio of 44.5 percent (30 June 2010: 40.3percent). ‘The positive first six months of the year, with increases in earnings, is full confirmation of our annual target. Due to an increasing seasonal effect on our business, we break even in the third quarter and will be generating up to 90 percent of our annual profit in the fourth quarter,’ says Dr. Rolf Hollander, Chairman of the Board of Management of Cewe Color Holding AG.

The trend towards added-value products bearing higher margins also continued in the period up to mid-year in 2011, with sales of the Cewe Photo Book rising by 17.5percent to 1.89 million books and sales of photo greeting cards and wall decoration products showing dynamic development. The currency-adjusted turnover per photo rose by a total of 4.8percent to 13.63 cents in the period up to mid-year.

The positive development of the first two quarters becomes clear in a 12-month outlook: since 1 July 2010 Cewe Color has achieved an EBIT of EUR 29.5 million, which is EUR 3.9 million more than in the previous 12-month period. The return on capital employed also rose clearly in the 12-month period from 16.1percent to 18.8percent. ‘We are confirming our targets for the full year on the basis of the first six-month period,’ Dr. Hollander says. The shift in sales, turnover and earnings to the four quarter was, however, also continuing in 2011. Growth in the fourth quarter was achieved predominantly at the expense of the second and third quarters, in which Cewe Color had to bear the costs for preliminary work relating to the extremely high capacity utilisation in the fourth quarter.

Despite current general economic uncertainty, the company was abiding by its annual targets. In the economic and financial crisis of 2008/2009, the Cewe Color business model had proved to be exceedingly robust, so that the negative economic development and consumer reluctance had little effect on Cewe Color. Cewe Color photo products had a high emotional value for consumers and the financial outlay was comparatively low. ‘Cocooning, the typical withdrawal into one’s private life at home in economically difficult times, even has a considerable supporting effect on sales of our products,’ Dr. Hollander explains.

The Board of Management expects turnover to grow by up to 3percent to EUR 460 million in 2011 (target corridor: EUR 447 to 460 million) and EBIT to be at EUR 28 to 31 million (an increase of up to 10percent over the previous year). Despite initial funding for commercial digital printing, the annual net profit is to increase by up to 39percent, to EUR 16 to 19 million, and earnings per share are to increase to EUR 2.36 to 2.80 in 2011. It is primarily the Cewe Photo Book and digital added-value products that are to contribute to the increase in sales and earnings.

Cewe Color has launched a new business segment with its online printing service viaprinto.de. The comprehensive digital printing know-how of the European photo book market leader is also used for commercial printing needs in small volumes.