Cimpress: resilient but “far from where we want to be”
Friday, July 31, 2020
Cimpress founder Robert Keane has described the effects on business of the Covid-19 pandemic as akin to being “punched hard in the stomach”.
In his commentary accompanying the web-to-print giant’s year-end results, Keane said that Covid-19 was “a black swan event that crashed into the global economy, hit Cimpress customers hard and, in turn, hit Cimpress hard”.
Overall sales for the full-year ending 30 June were down 10% at $2.48bn (£1.89bn), after Q4 sales had slumped by 36% to just over £429m because of the pandemic.
It’s the first time in two decades that year-end sales have fallen at the group.
Adjusted EBITDA increased from $387m to $400m, although the trailing 12-month average figure in February had been $477m.
Keane highlighted the group’s resilience, and said: “Following the deepest trough of the pandemic we have been recovering steadily. Revenue in June relative to the same month in the prior year was down by less than 20%, and our adjusted EBITDA and cashflow were improving even more with a lower cost base including significantly lower advertising spend.
“In the month of July, we expect our bookings to be down 5% compared to the same month the year before.”
Keane said he saw “strength returning to our bottom line even as we continue to fund key investments in technology, customer value improvements, new product introductions and talent recruitment”.
However, he also said the firm was “far from where we want to be, and clearly the pandemic has punched us hard in the stomach and diverted our progress and taken large amounts of cash out of our shareholders' pockets”.
At the group’s biggest business, Vistaprint, sales fell from $1.5bn to $1.34bn, while EBITDA actually improved from $350m to $366m due to the transformation plan underway at the operation.
The group’s Upload & Print division has been split into two segments: PrintBrothers (WirmachenDruck.de, Druck.at, and Drukwerkdeal) and The Print Group (PixartPrinting, Exaprint, Tradeprint and Easyflyer).
Sales at the division fell from $770m to $692m, while EBITDA dropped from $107m to $91m.
At The Print Group, which includes UK production site Tradeprint in Dundee, sales were down $50.67m at $275.2m with $41.4m of the decline taking place in Q4.
National Pen was hit particularly hard by the pandemic. EBITDA more than halved, falling from $17m to $8m, while sales were down by nearly $50m at $299m.
In Q4 Cimpress also refinanced some debt in order to pay down existing debt along with the easing of some financial covenants, “thus providing ample flexibility to navigate the uncertainty”.
Shares in Cimpress jumped after the announcement, rising by 11.55% to $102.66.