Cimpress Q2 sales up by nearly a third

By Richard Stuart-Turner, Tuesday 06 February 2018

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Cimpress grew its total sales by 32% year-on-year in its Q2 results, for the three-month period to 31 December 2017.

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Keane: "The decentralisation of the past year is helping us stay small as we get big"

The Netherlands-headquartered web-to-print giant recorded sales of $762m (£543m), up from $577m in the equivalent period a year ago.

The group’s Q2 operating profit more than doubled to $73m, up from the $34m it achieved in last year’s equivalent period.

Cimpress chief executive Robert Keane said: “Across Cimpress, we see evidence that the decentralisation of the past year is helping us stay small as we get big. The leaders of each of our businesses now have direct control over their cross-functional teams.

“In turn, this means that each leader has clear accountability for customer value improvements, for the attraction and motivation of talented team members, for the operation of their businesses in a socially responsible manner, and for the delivery of attractive returns on investment.

“Q2 was a strong quarter and we are on track to deliver on our plans for the remainder of this fiscal year. We believe the capital we are allocating across our company, combined with the organisational and strategic changes we have implemented recently, are solidifying our leadership position in mass customisation and continuing to increase our intrinsic value per share.”

Cimpress chief financial officer Sean Quinn added: “Vistaprint [has] implemented the organisational restructuring as announced in last quarter’s earnings materials. The restructuring charge was lower than we originally estimated, however we believe the anticipated savings will materialise as expected.

“We spent about $15m repurchasing our own shares during the second quarter and we spent an additional $40m on repurchases subsequent to the end of the quarter.”

He added: “Fiscal year-to-date, we’ve spent about $95m on share repurchases at an average share price of $106.

“Despite those repurchases in the second quarter, we reduced our leverage ratio from 3.39 times trailing 12 month EBITDA at the end of September to 2.58 times at the end of the December quarter, through a combination of EBITDA expansion and $120m of debt repayment.”

Vistaprint sales grew by 13% year-on-year to $429m while the group’s Upload and Print business unit, which includes Pixartprinting, Exagroup, Tradeprint and WirMachendruck among others, was up by 26% to $193m year-on-year.

Sales at Cimpress’ 'All Other Business' units, including its ‘most of world’ operations in Brazil, Japan, India and China; and its corporate solutions division, dropped by 53% from $45m to $21m year-on-year.

Last year’s figures 'All Other Business' units, however, included the contribution from Albumprinter, which was sold to European private equity investor Gilde Buyout Partners last summer. The division's revenue excluding Albumprinter in Q2 last year was $15m.

Additionally, Cimpress said it remains pleased with its acquisition of National Pen, which achieved sales of $126m in Q2, its first such quarter as part of Cimpress.

Separately, Pixartprinting has just announced its entry into the printed merchandise area.

From this month, an initial selection of customisable promotional items will be available online, split into three categories: technology, office and stationery, and home and leisure.

The first release of the new range includes more than 50 products, with thousands of different combinations. Products include bottle openers, business card holders, pens, umbrellas, bottles, mugs and selfie sticks.

“These are just the first items as we introduce this new range, but new waves of products are already in the pipeline, to be honed in part on the basis of the feedback we receive from the market,” said Pixartprinting marketing and sales director Federico Gonzalez.

Cimpress’ share price leapt by $17.32 to $144.63 immediately after the results were published last week and had risen to $161.63 at the time of writing.

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