Reduction of working capital causes operating cash flow to increase by approx. 50 %
Free cash flow more than doubled
Higher investment cash flow due to investments in start-up companies
The following comments initially refer to the cash flow in the past financial year. At the end of this section, details are provided for the fourth quarter.
Due to an EBIT increase of 3.7 million euros to 32.6 million euros, non-cash depreciation with a volume of 33.5 million euros (2013:
37.9 million euros) was eliminated from CEWE’s cash flow state-ment. The EBITDA figure thus amounted to 66.1 million euros (2013: 66.9 million euros). The other non-cash adjustments which did not have any effect on operating cash flow from operating ac-tivities, such as non-realised foreign-currency effects, changes in non-current receivables and non-current liabilities – mainly in the area of pension accruals – amounted to – 0.8 million euros (2013:
– 0.3 million euros).
Reduction of working capital causes operating cash flow to increase by approx. 50 %
In the financial year 2014, the working capital-induced cash flow increased by 26.0 million euros to 13.0 million euros and has thus clearly strengthened the cash flow from operating activities, having weakened it by – 13.1 million euros in the previous year. In particu-lar, this has caused operating cash flow to increase by 47.5 % or 22.9 million euros to 71.2 million euros, as outlined below.
The Photofinishing business segment contributed the largest share of the working capital-induced cash flow, with a decline in operating net working capital. By comparison with the previous year, it provided a cash flow improvement. This is due to the stabilisation of the seasonal level of trade receivables which fell in the current year, having nega-tively affected cash flow in the previous year. A cash flow improve-ment has resulted from this.
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Due to the change in the volume of Retail business in Poland, in the past financial year CEWE reduced its operating net working capital.
This resulted in a cash flow improvement by comparison with the pre-vious year. This net working capital effect in the Retail segment was mainly due to the significant reduction in inventories, which provided a cash flow improvement, as well as the decline in trade receivables resulting from the lower volume of procurement, a cash flow im-provement on the previous year. However, the reduced volume of inventories is also reflected in the decrease in trade payables – which resulted from the lower volume of procurement – which thus had a negative cash flow effect.
The other working capital mainly reflects the turnover-related increase in the net turnover tax burden in December, as in the previous year.
The cash contribution has thus increased by 3.0 million euros to 4.1 million euros.
The volume of income taxes paid through tax payments increased by 1.9 million euros in the year under review, thus totalling 7.3 mil-lion euros. As a result of the accrual of CEWE COLOR AG & Co. OHG within the scope of the change of form of CEWE COLOR Holding AG to become CEWE Stiftung & Co. KGaA, in the financial year 2013 tax pre-payments of CEWE COLOR AG & Co. OHG were reimbursed and were only collected from CEWE Stiftung & Co. KGaA in the period after December 31, 2013.
Overall, the cash flow from operating activities amounted to 71.2 mil-lion euros and was an impressive 22.9 mil71.2 mil-lion euros higher than in the previous year.
Cash flow from investing activities returns to a normal level, in the amount of 43.1 million euros
Outflows for investments in fixed assets amounted to 35.4 mil-lion euros and were thus almost unchanged on the previous year (35.3 million euros).
Of these 35.4 million euros, 31.0 million euros were invested in prop-erty, plant and equipment and 4.4 million euros in intangible assets.
In the property, plant and equipment segment, expenses amounting to 9.2 million euros were incurred for the company’s point-of-sale pres-ence. 8.4 million euros were invested in digital printing and finishing, while 4.0 million euros were invested in offset printing and finishing.
3.6 million euros were committed for the expansion of the company’s IT infrastructure. The remainder, in the amount of 5.8 million euros, comprises investments in buildings, the fleet of vehicles and other installations. As of December 31, 2014, commitments amounted to 8.3 million euros (previous year: 1.6 million euros). Of this amount, 7.9 million euros (previous year: 1.5 million euros) consisted of property, plant and equipment and 0.3 million euros (previous year:
0.1 million euros) comprised intangible assets.
Outflows from the purchase of consolidated interests and acquisitions amounted to 4.9 million euros in the past financial year (previous year: 0.3 million euros). Outflows of 2.1 million euros for financial assets (previous year: 0.8 million euros) and 1.3 million euros for non-current financial instruments (previous year: 1.1 million euros) comprised start capital invested in current and related business seg-ments, as well as the company’s support for the “High-Tech Gründer-fonds” seed investor.
Inflows from the sale of property, plant and equipment in the amount of 0.6 million euros (2013: 2.4 million euros) had a positive effect on cash flow from investing activities. Cash flow from investing activities thus amounted to 43.1 million euros (2013: 35.1 million euros).
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Free cash flow more than doubled
Free cash flow amounted to 28.1 million euros, compared to 13.1 mil-lion in the previous year. This strong increase is attributable to the above-mentioned 22.9 million euros increase in operating cash flow.
This contrasts with a significantly lower – 8.0 million euros rise in cash flow from investing activities. The upshot is that free cash flow has increased by a strong 14.9 million euros or 113.7 %.
cash flow from financing activities, in the amount of – 14.5 million euros.
In 2014, cash flow from financing activities amounted to – 14.5 mil-lion euros, a 2.2 million euros cash-out decrease on the previous year.
Payments to shareholders in the year under review, 2014, increased by 1.1 million euros to 10.6 million euros, while the exercise of the Stock Option Plan 2010 impacted on cash flow from financing activi-ties, in an amount of 3.2 million. On the other hand, in April 500,000 treasury shares were sold within the scope of an accelerated place-ment procedure. These shares were offered for purchase to qualified investors in Germany and other European countries and were placed at a price of 54 euros. The gross proceeds for CEWE resulting from this issue amount to approx. 26.8 million euros. This money has been used for repayment of the company’s financial liabilities. Interest payments have thus fallen to – 1.4 million euros, a cash flow improve-ment of 0.7 million euros. On account of its financing structure, CEWE was able to fulfil its liquidity requirements at any time during the course of the year, as outlined in the section “Balance sheet and financing” (p. 88).
Fourth-quarter cash flow reflects decrease in working capital In the fourth quarter of 2014, the company’s EBITDA increased by 0.8 million euros to 46.3 million euros. Its working capital-induced cash flow rose by 12.8 million euros to 7.2 million euros. After de-duction of tax payments in the amount of – 4.2 million euros, cash flow from operating activities increased by 7.2 million euros to 48.3 million euros.
As in the previous year, in the fourth quarter of 2014 CEWE once again invested in the necessary expansion of its capacities (– 13.2 million eu-ros; previous year: – 11.1 million euros). It also made an acquisition with a value of 1.6 million euros and invested 1.8 million euros in start-up companies. The cash flow from investing activities thus amounted to – 16.2 million euros (2013: – 10.7 million euros).
The free cash flow reported for the fourth quarter accordingly totalled 32.1 million euros (2013: 30.4 million euros).
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10.8 % 9.5 %
net income for the year equity