Market Consolidation: Cewe sector leader in photo finishing takes over Laserline

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Cewe is aiming high for commercial online printing and has set its sights on a turnover of over 100 million euros in online printing for 2018. A step in this direction is the takeover of the Laserline Group from Berlin.

Tomislav Bucec, the founder and owner of the Laserline group

Just a few days ago Tomislav Bucec, the founder and owner of the Laserline group, celebrated the twentieth anniversary of his firm among his employees. Bucec is one of the pioneers of online printing in Germany and banked on the internet as a sales channel early in the game. The Berliner local hero has specialised in commercial and advertising printing for B2B and small business over the years. In addition to offset and digital printing, Laserline also offers large-format prints and has made a name for itself on the German market with its product diversity and quality. In the past few years, however, Laserline has clearly suffered due to increasing competition. Berlin is an attractive market and the number of competitors is steadily increasing. On the quiet Mimeo as well as WmD have secured their own production capacities in the Berlin area and others are making the effort in the market of the capital city. As Laserline, via their recently relaunched online shop, is also addressing many national customers – and this predominantly in “high-end print” – the takeover by Cewe certainly seems to make sense. With this acquisition Cewe can also offer products in the future that don’t have a place in the industrial production of Saxoprint. The incontestable strength of Laserline is the large number of available product variations and materials – and also the print quality, especially with tricky orders. Just recently we were able to satisfy ourselves of this quality once again (in the scope of our printing test activities at zipcon consulting). Further reasons that could have led to the takeover, which CEO of CEWE Foundation, Christian Friege, addresses in his press release, are the “outstanding clientele” and the more than 160 first-rate employees who make up the Laserline team.

With the acquisition of Laserline, Cewe achieves a distinct quality plus in this aptly self-entitled segment commercial online printing; Source: laser-line.de

With a consolidated turnover in 2016 of almost 600 million euros, Cewe is the undisputed no. 1 in the photobook sector in the German-speaking area. In the segment commercial online printing they are in 4th place in the market ranking behind Flyeralarm, Wir-machen-Druck and Onlineprinters.com with the brands Saxoprint, Cewe-Print and Viaprinto. With the takeover of Laserline, Cewe can expand their market share and curb the advantage that Onlineprinters recently gained through their acquisition of Solopress (UK). Normally companies which have taken over other firms like to manoeuvre in the realm of superlatives, which makes it even more astounding that Cewe sees relatively modest first effects for the Group as a result of the takeover and not until 2018. For this reason Cewe’s corporate target of generating more than 100 million euros in the commercial online print sector in 2018 is actually quite conservative.

Yet Cewe has to do something. The battle for a share of the German-speaking online print market has already been on for a while now. And although online printing is gaining new users daily, the migration of customers from classic print to online print doesn’t result in nearly enough growth potential for the needs of companies like Cewe or even Onlineprinters.de. Companies of this size need higher growth rates so they can finance sufficient investment capital for maintaining a technical advantage. And likewise the marketing costs of retaining existing customers and winning new ones are enormous. Therefore it is hardly surprising that large firms prefer to “swallow” successful businesses to quickly ensure new turnover potential instead of merely relying on generic growth.

In the past few years Cewe has been quite reserved in terms of company acquisitions. After taking over Saxoprint in 2012 and Dein-Design in 2015, there were no further public acquisition attempts – even if some rumours persist that a larger acquisition in the photo sector failed in the spring of 2017. Taking over appropriate businesses is the most reliable path to further growth for Cewe. I therefore expect that Cewe will be looking at further candidates and will continue to expand the multi-brand strategy in online printing.

“For the entire Cewe Group the acquisition of Laserline is an important step in expanding the commercial online printing business segment. Should the photo sector frontrunner use the full synergy potential of its web-to-print brands looking forward, then the placements in the German online print market could definitely shift.” – Bernd Zipper

But what does the takeover mean for Laserline? Sure, under one roof the Cewe Group can use purchasing and marketing synergies, but what does Cewe’s acquisition mean for Laserline customers? The way I interpret Cewe politics, it is indeed first and foremost stability and new services. Saxoprint has invested a lot of money in building up its online shop over the past few years and it would only be logical if Laserline customers could also profit from the new services soon. The team Sauer/Ackermann certainly does a good job in Dresden, even if the 2016 bottom line was fairly modest at just shy of 1.6 million euros – the strategy of manoeuvring with the best available technology, a clean online shop and quite a few brands on the market will pay off in the mid-term.  With sound operations and as the operative unit of Cewe for commercial online printing, Saxoprint has the best opportunity for growth and can establish the basis for a healthy multi-brand strategy.

Three brands already – with Laserline the fourth brand now strengthens Cewe’s portfolio in “commercial online printing”; Source: http://company.cewe.de/de/ueber-uns/kommerzieller-online-druck.html

Other providers, like sector giant Cimpress, have recognised the advantages of the multi-brand strategy. Letting local or specialised brands “survive”, the Group can not only address more diversified target groups, but also take local distinctions into account – a lesson that Cimpress learned in Austria, Italy and Germany. Cewe – well positioned with its brands Saxoprint, Cewe-Print, Viaprinto and Dein-Design – can now continue to follow this strategy with Laserline.

Both companies are shrouded in secrecy as regards the purchase price. This is certainly common these days and also sensible, in order to avoid increasing the expectations of sellers ahead of time with potential further corporate takeovers. And, I firmly believe, it also shows how “heated” the market is at the moment – for this won’t remain the only takeover in the upcoming months if you want to give credence to the signals coming from the market.

My Take: Cewe’s takeover of Laserline is a real dream wedding. Laserline can continue to develop under Cewe, and Cewe can use Laserline to address new target groups. The “capital city effect” shouldn’t be underestimated either – Berlin is booming and it becomes big companies to serve the capital city market. This is good for the image of the respective firm and just as good for the image of online printing generally. It remains to be seen how the “marriage” Cewe/Laserline will develop and which concepts will be used by Cewe to firstly retain the loyalty of Laserline customers and secondly to expand services that, as the case may be, have not been offered by Laserline until now. Laserline didn’t belong to the dominating players on the German market (with more than 50 million turnover per year), and therefore the takeover is just a small step for Cewe – but the right one, for both companies. It keeps us in suspense.

Founder and CEO of zipcon consulting GmbH, one of the leading consulting companies for the print and media industry in Central Europe. The technology and strategy consultant and his team actively support practical implementation in a wide variety of customer projects. His work involves developing visions, concepts and strategies for the players active in the print production process across a wide range of industries. His areas of expertise include online print, mass customization, strategy and technological assessment for print, and the development of new strategies in the print and media environment. Bernd Zipper is the creator and chairman of Initiative Online Print e.V. and, in addition to his consulting activities, is an author, lecturer and sought-after speaker, orator and moderator. His visionary lectures are regarded worldwide as trend-setting management recommendations for the print and media industry. (Profiles also in Xing, LinkedIn).

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