Cimpress, the online Amazon of printing, has seen a fall in gross product for the first half of its financial year while revenue was steady. The revenue figure hides a dynamism which is reflected in the tighter margins and squeeze on profits.
For the first six months the company has reported revenue of $1.549 billion compared to $1.507 billion in 2022 and an Ebitda of $181,365 compared to $258,027 last year. The decline in profitability was most marked in the company’s largest segment Vistaprint where Ebitda fell from $157,686 to $85,894.
The squeeze comes from a decline in consumer products, which have always relied in heavy discounting to drive sales, and shifts in the product mix. The Vista print website is being revamped to improve usability and offer a greater range of products. But while consumers will remain an important segment, small businesses represent the greater opportunity, according to Cimpress CEO Robert Keane.
Keane took on the additional responsibility for Vista print four years ago and is now handling over to Florian Baumgartner as the division’s CEO. He takes over on 1 February. Baumgartner spent time at Amazon before joining Cimpress in October 2019.
Keane says that Vista is aiming to be “the design and marketing partner for small businesses”. This market is less volatile than chasing consumers and more likely to result in repeat business. That said there are still opportunities for growth in the consumer market place and new products include promotional items for consumers, branded glasses for a special event for example. Photo products and apparel performed well, albeit with lower margins, but holiday cards and invitations declined, especially in the US.
The Upload and Print businesses, the Print Group (which covers Pixartprinting and Tradeprint) and PrintBrothers, both showed revenue increases for the first half, but while Ebitda for PrintBrothers was static, that for the Print Group fell back. In the period, Cimpress paid $95.6 million to acquire remaining shares in businesses it has acquired in recent years, including or PrintBrothers, which Keane says has been the fastest growing segment. Revenue in constant currency terms increased 23%, down to 11% as reported.
The Upload and Print businesses, which include the likes of Pixartprinting, Druck.at and Tradeprint in the UK, have managed to mitigate the impact of cost increases by passing these on to customers. Investment in the period has included a new long perfecting Heidelberg at Tradeprint along with a first Canon inkjet press for the plant. It has completed the roll out of the Mass Customisation Platform to Pixartprinting, which should result in productivity gains.
However, the company has ceased to be acquisitive. “We’re not really looking right now,” Keane told analysts reporting on the results.
