DGAP-News: CEWE with a positive increase in turnover and earnings at mid-year

CEWE with a positive increase in turnover and earnings at mid-year

- CEWE PHOTO BOOK grows up to mid-year with 8.5 % more than planned

- Sales grow by 10.8 % to 236 million euros

- Mid-year EBIT improves by 7.1 million euros

- Balanced result already achieved in the period up to mid-year

- Commercial online printing profitable for the first time on a half-yearly basis

Oldenburg, 11 August 2016. After a positive second quarter, CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) achieved an increase of 10.8 % in turnover, to 236 million euros, in the full first half year of 2016. Turnover rose by 10.1 % to 116.8 million euros in the second quarter. At the same time CEWE generated a higher EBIT: the company increased its earning power in the period up to mid-year 2016 by 7.1 million euros, thus already achieving balanced earnings. In the second quarter the EBIT rose by 2.7 million euros, to amount to -0.9 million euros. Adjusted by special effects (0.9 million euros from goodwill depreciation on the CEWE operation in England and 0.2 million euros in restructuring costs as a result of consolidating locations), the Group EBIT in the second quarter of 2016 even rose operatively by 3.8 million euros to a positive 0.2 million euros.

Progress in all business segments
"Our photofinishing business is growing thanks to our strong brand, our new positioning in retailing is apparently paying off, and in commercial online printing we were able to achieve double-digit growth and at the same time generate positive operative earnings for the first time," emphasises Dr. Rolf Hollander, CEWE Stiftung & Co. KGaA CEO.

Non-recurring special tax effect increases targets for after-tax earnings
The Board of Management is raising its forecast for after-tax earnings for 2016 by around two million euros: while the current forecast provided for a range of 25 to 29 million euros, the Board of Management now expects to see 27 to 31 million euros since a tax-related agreement has now been reached with the financial authorities which will provide the company with non-recurring after-tax earnings, including interest, of more than two million euros.

Q2 clearly confirms operational targets for 2016
The annual targets have already shifted to within reach on the basis of the past twelve months (Q3 2015 to Q2 2016): Turnover has climbed to 577.3 million euros in the past twelve months (target: 555 to 575 million euros), EBIT reached 43.9 million euros (target: 38 to 44 million euros), and the EBT was at 43.5 million euros (target: 37 to 43 million euros). Even if the Board of Management still expects the fourth quarter to result in a slight growth in sales and earnings, the same as in previous years, the forecast for the 2016 business year is to be reviewed again after the third quarter, since the once dominant third quarter reports seasonal declines in earnings for photofinishing year after year (EBIT Q3 2009: 15.5 million euros, EBIT Q3 2015: 2.9 million euros), and could in future even contribute negative results to the annual net income. At the same time, CEWE continues unabated with its investments in reinforcing the brand. "The first six months have shown that our value-oriented growth strategy is working, so we can look towards the future quite confidently. We consciously accept expenses with a short-term effect on earnings because we are demonstrably benefiting from the power of our CEWE brands as a distinguishing feature on the market. This is why we will be enhancing awareness of our brand in our target groups and we will continue to focus on innovative, high-quality brands and added value products," says Dr.Hollander.

Photofinishing grows by 11.7 %
Photofinishing sales increased by 11.7 %, to 81.1 million euros in the second quarter - despite the fact that the summer quarters have typically seen their share of sales dropping for years now. The photofinishing EBIT climbed by 1.5 million euros in the second quarter, to -0.6 million euros. Also worth noting: in the second quarter, 97 % of all the photos were digital. Around 69 % of these digital photos were ordered in the internet.
In the period up to mid-year as a whole, photofinishing sales even increased by as much as 12.5 %, and EBIT reached 3.6 million euros, with sales of the CEWE PHOTO BOOK increasing more than planned thanks to its strong brand position and the high level of customer satisfaction: +8.5 % to 2.474 million books (target for 2016: between +1 % and +2 %). CEWE PHOTO BOOKS are Europe's most popular photo books, so they were once again the drive behind the positive development in the photofinishing business segment.

Commercial online printing with double-digit growth and positive earnings
The current year sees commercial online printing combining a high rate of growth and clear improvements in earnings. The extended product range, the high quality of prints and the outstanding product efficiency thanks to investment in the latest production technologies are bearing fruit: with sales increasing by 12.3 % to 20.7 million euros in the second quarter of 2016, the newest CEWE business segment generated positive earnings for the first time ever, at 0.3 million (Q2 2015: -0.9 million euros). In the first six months,with turnover increasing by 13.3 % to 41.1 million euros, this growth exceeded the planned figure of around 10 %, and the EBIT, at +0.8 million euros, exceeded the figure for the previous year by 3.0 million euros.

Retailing: success with new positioning results in improved earnings
Thanks to the new positioning with a revised shop concept and reinforcement of internet trading, the retailing business segment generated a balanced operative result in the second quarter of 2016 with a currency-adjusted increase in sales of 1.7 % to 15.3 million euros (reported: 14.5 million euros and -3.9 %). Currency-adjusted turnover increased by 0.3 million euros to 28.8 million euros in the first six months of the year (reported: 27.3 million euros). The EBIT increased by 0.9 million euros to -0.4 million euros.

CEWE soundly financed, with a positive cash flow and strong ROCE
With its capital ratio at 57.2 % as at 30 June 2016 (30 June 2015: 55.1 %), the company is soundly financed. The cash flow from operative business improved in the quarter of the report, to 7.7 million euros (+48.1 %), and rose in the first six months of 2016 to amount to 23.8 million euros. The return on capital employed (ROCE) improved substantially, from 16.6 % in the previous year to 20.3 % as at 30 June 2016.

CEWE at the photokina
CEWE will again be represented at the photokina, one of the biggest fairs in the photographic industry and due to be held in Cologne from 20 to 25 September, with one of the biggest stands, on which it will be presenting numerous innovations. Anyone who is interested is very welcome to visit CEWE in Hall 4.2 at the Cologne show grounds.

Earnings by business segment

CEWE	Unit	Q2 2015	Q2 2016	H1 2015	H1 2016
(1) Photofinishing
Digital prints	in m. units	418.4	427.2	868.9	898.8
Prints from films	in m. units	18.7	14.7	32.8	25.5
Total prints	in m. units	437.1	441.9	901.7	924.3
CEWE PHOTO BOOK	th. books	1,120.2	1,196.7	2,279.9	2,474.4
Turnover	in EUR m.	72.6	81.1	148.1	166.6
EBIT	in EUR m.	-2.1	-0.6	-2.9	+0.7
Restructuring costs	in EUR m.	0.0	-0.2	-0.4	-0.2
Proceeds from US internet activity	in EUR m.	0.0	0.0	0.0	0.4
Goodwill depreciation in the UK	in EUR m.	0.0	-0.9	0.0	-0.9
EBIT before one-off effects	in EUR m.	-2.1	0.5	-2.5	1.4
(2) Retailing
Turnover	in EUR m.	15.1	14.5	28.5	27.3
EBIT	in EUR m.	-0.2	0.0	-1.3	-0.4
Restructuring costs	in EUR m.	0.0	0.0	-0.6	0.0
EBIT before one-off effects	in EUR m.	-0.2	0.0	-0.7	-0.4
(3) Commercial online printing
Turnover	in EUR m.	18.4	20.7	36.3	41.4
EBIT	in EUR m.	-0.9	0.3	-2.2	0.8
CEWE Group
Turnover	in EUR m.	106.1	116.8	212.9	236.0
EBIT	in EUR m.	-3.6	-0.9	-7.1	0.0
One-off effects	in EUR m.	0.0	-1.1	-1.0	-0.7
EBIT before one-off effects	in EUR m.	-3.6	0.2	-6.1	-0.7
EBT	in EUR m.	-3.7	-1.0	-7.4	-0.2
Earnings after tax	in EUR m.	-2.4	-0.7	-6.1	-0.1

 

Notes to the "Earnings by Business Segment" chart

(1) Photofinishing: Production and sale of photo products such as CEWE PHOTO BOOKS, CEWE CARDS, CEWE CALENDARS, CEWE WALL ART and individual (analogue and digital) photos as well as other photo products.
(2) Retailing: Trading in photo hardware, such as cameras or lenses in Norway, Sweden, Poland, the Czech Republic and Slovakia.
(3) Commercial online printing: Production and sale of the commercial print products of the online printing portals, e.g. CEWE-PRINT.de, Saxoprint and Viaprinto

Percentage deviations have all been calculated at the exact values.

Should you have any queries, please contact:
CEWE Stiftung & Co. KGaA, Axel Weber (Investor Relations)
Tel.: 0441 / 404 - 2288, Fax: 0441 / 404 - 421, Email: [email protected]

Internet: cewe-photobook.com , cewe.de , cewe-fotobuch.de , cewe-print.de , viaprinto.de , saxoprint.de

The CEWE apps are all available in the app stores: CEWE PHOTO WORLD, CEWE POSTCARD, CEWE SERVICE and other photo apps, and the CEWE Investor Relations app for iPad(c) or android tablets, with annual reports and quarterly reports, presentations and sustainability reports.

Financial schedule:
19-21 September 2016 Berenberg & Goldman Sachs German Corporate Conference
20-22 September 2016 Baader Investment Conference, Munich
10 November 2016 Publication of the interim report as at Q3 2016
21-22 November 2016 German Equity Forum, Frankfurt

About CEWE: The innovative photo and online print service company CEWE, with twelve highly-technical production operations and a staff of around 3,400 employees in 24 European countries, is both market and technological leader. In 2015 CEWE delivered around 2.2 billion prints, 6.0 million copies of the CEWE PHOTO BOOK and photo gift articles to around 25,000 retail partners to generate consolidated turnover of 554.2 million euros. CEWE is continuously generating new impulses in the photographic industry with innovations for people who enjoy taking photos. In the new business segment of commercial online printing, printed material for businesses is marketed through the sales platforms CEWE-PRINT.de, Saxoprint und Viaprinto. Founded in 1961 by Senator h. c. Heinz Neumüller, CEWE was taken to the stock exchange by Hubert Rothärmel in 1993. CEWE Stiftung & Co. KGaA is listed on the SDAX.