CEWE: Profit in First Quarter again

- Q1 sales, turnover and profit confirm annual forecast for 2017

- CEWE brand products raise turnover per photo by 10.4 %

- EBIT at previous year's level and already positive in the first quarter for the second time in the history of the company

- ROCE reaches 20.8 % (2016 Q1: 18.8 %)

Oldenburg, 11 May 2017. CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) has validated the previous year's positive development and generated positive Group earnings for the second time in the history of the company in the first quarter, hitherto traditionally a loss-making quarter: with turnover virtually stable at 118.6 million euros (Q1 2016: 119.2 million euros), EBIT was consistent with the previous year's level at 0.6 milion euros. The EBIT before one-off effects rose slightly from 0.9 million euros in the previous year to 1.0 million euros in the quarter of the report. From being a traditional loss-generating quarter, Q1 has progressed to become a quarter generating a small profit. On the other hand, the second quarter, and in particular the third quarter, have surrendered the role of former profit generators to the fourth quarter. The clearly dominant fourth quarter has progressed to become the profit engine as a result of digitisation. Against the background of the result for the first quarter, CEWE is confirming its forecast for the 2017 business year, in which the company is targeting EBIT in the range of 45 million to 51 million euros (2016: 47 million euros). CEO Dr. Rolf Hollander: "In the first quarter, we offset specific costs, such as the increased value added tax on photo books in Germany and Austria and the negative effects of Brexit on our commercial online printing with improved developments of other products and on other markets. This is why we are confirming our growth targets for the 2017 business year."

At 85.6 million euros, photofinishing turnover at the same level as in the previous year
In the first quarter, CEWE achieved a first-quarter turnover of 85.6 million euros, corresponding to last year's level in the business segment of photofinishing (2016 Q1: 85.5 million euros). With EBIT at 1.3 million euros, CEWE slightly exceeded the figure of 1.2 million euros for the previous year. In the same quarter of the previous year, earnings even included extraordinary proceeds in the amount of 0.4 million euros from the sale of the minor US internet activity "Smilebooks".
In the first quarter, photofinishing thus reported positive earnings for the second time in the history of the company. The sales structure did, however, change in comparison to the previous year: In the previous year of 2016, the first quarter was characterised by an exceptionally high increase in CEWE PHOTO BOOK sales, so the current development of this product - sooner a logical continuation of the development in 2015 - was shown as a decline in performance against 2016 by - 9.3 %. The discontinuation of supplies to a retail partner, who had offered a margin that was hardly sufficient, also had an impact. The small US internet activity Smilebooks, which has now been sold, had also still contributed to the growth in volume for the previous year. The decline in the CEWE PHOTO BOOK volume is probably also partly due to the increase in value added tax imposed on photo books in Germany and Austria. CEWE is carrying out ongoing analyses on the development of demand-related behaviour for this product in future.
The marked increase in CEWE WALL PICTURES and other CEWE brand products on a sales level fully compensates for the decline in the CEWE PHOTO BOOK. This change in structure cannot be completely offset in terms of the volume of sales and of the volume of photos: CEWE WALL PICTURES and other CEWE brand products are quite predominantly included as 1 in the overall number of prints in the statistics of quantity, but photo books and the prints they contain are included at many times this figure. The basis trend of "mass to class" thus remains positive: turnover per photo increased by 10.4 per cent to 19.55 cents.
The reinforced brand power of the CEWE PHOTO BOOK remains a significant distinguishing edge on the market. The unsupported brand awareness of the CEWE PHOTO BOOK thus increased over that of the previous year as at January 2017, from 44 % to 51 %..

Commercial online printing confirms positive Q1 EBIT
In the first quarter of 2017, turnover in the business segment of commercial online printing increased to 20.6 million euros - a slight increase of 0.6%. At the same time, commercial online printing, at +0.1 million euros on an EBIT level, confirmed the positive development of the previous year (2016 Q1: +0.5 million euros). Growth in commercial online printing was in this case mainly dampened by the development on the British market. Brexit-induced drops in demand meant that the business segment of commercial online printing in Great Britain reported a decline in turnover for the first quarter of 2017. The 10.3 % fall in value of the pound sterling against the euro since 23 June 2016 (reporting date: 31 March 2017) has intensified this effect, since CEWE reports turnover in euros. On the assumption that business with the UK remains the same as in the previous year, the business segment of commercial online printing would have concluded the current first quarter with a middle-range single-digit rate of increase in turnover. Since the increase in business was also characterised by growth in January and February of the previous year that was not typical for the season and was exceptionally strong, the business segment of commercial online printing is on track to achieve the annual target of achieving increasing sales in the majority of markets which was set for 2017.

Retailing earnings again slightly improved
Due to a conscious decision to forego low-margin product areas, turnover generated by the retail business segment was reduced from 12.8 million euros in the same quarter of the previous year to 11.8 million euros in the current first quarter. EBIT improved from - 0.4 million euros to - 0.3 million euros.

"Other" business segment: earnings slightly improved
In the first quarter of 2017, CEWE achieved sales in the amount of 0.7 million euros in the "Other" business segment (2016 Q1: 0.5 million euros). The EBIT contribution to the consolidated result from the exppense items of structure and corporate costs and the earnings from real-estate property and the acquisition of stocks amounted to - 0.5 million euros in the quarter of the report (2016 Q1: - 0.7 million euros).

ROCE increases to 20.8 % 12-month EBIT reaches 47 million euros
The capital ratio rose to a sound 63.2 % as at 31 March 2017 (31 March 2016: 61.3 %). At the same time the return on capital employed was improved: although the average amount of capital employed was raised to 226.2 million euros (2016 Q1: 216.3 million euros), the ROCE increased from 18.8 % to 20.8 % as the 12-month EBIT increased from 40.6 million to 47.0 million euros.

Dividend to increase for the eighth time in succession: 1.80 euros per share
The Supervisory Board and the Board of Management will be proposing a dividend which is to increase to 1.80 per share to the Annual General Meeting on 31 May 2017 (+ 20 cents per share). "Our dividend strategy aims at increasing the dividend per share when the earnings situation of the company allows for such an increase. We are pleased that we have now been successful in doing so for the eighth time in succession," explains CFO Dr. Olaf Holzkämper.

Targets for 2017 fully confirmed
On the basis of the first quarter of 2017, the Board of Management is confirming its entire forecast for 2017.
In spite of the increased value added tax on photo books, Group turnover in 2017 is to rise slightly on average, from 593.1 million euros in the previous year of 2016 to an amount ranging from 585 million to 615 million euros. Group EBIT is to be in a corridor of 45 to 51 million euros, EBT is to be in the range of 44.5 to 50.5 million euros, and after tax earnings between 30 and 34 million euros. In its forecast for 2017, the Board of Management is thus raising its operating EBIT result channel by around 5 million euros over the goals for 2016.


Earnings by business segment in the first quarter of 2017

CEWE	Unit	2016 Q1	2017 Q1	Diff. %	Diff. abs.
(1) Photofinishing
Digital prints	in m. units	471.6	428.4	-9.2	-43.2
Prints from films	in m. units	10.8	9.2	-14.7	-1.6
Total prints	in m. units	482.4	437.6	-9.3	-44.8
CEWE PHOTO BOOK	th. books	1,277.7	1,159.1	-9.3	-118.6
Turnover	in EUR m.	85.5	85.6	+0.1	+0.1
EBIT	in EUR m.	1.2	1.3	+14.4	+0.2
Purchase price allocation effects	in EUR m.	-0.1	-0.1	-	-
Proceeds from US internet activity	in EUR m.	+0.4	-	-	-
EBIT before special effects	in EUR m.	0.9	1.5	65.9	0.6
(2) Retailing
Turnover	in EUR m.	12.8	11.8	-8.0	-1.0
EBIT	in EUR m.	-0.4	-0.3	+18.6	+0.1
(3) Commercial online printing
Turnover	in EUR m.	20.4	20.6	0.6	0.1
EBIT	in EUR m.	0.5	0.1	-79.3	-0.4
Purchase price allocation effects	in EUR m.	-0.4	-0.2	-	-
EBIT before special effects	in EUR m.	1.0	0.3	-65.2	-0.6
(4) Other
Turnover	in EUR m.	0.5	0.7	+51.1	+0.2
EBIT	in EUR m.	-0.7	-0.5	+17.5	+0.1
Purchase price allocation effects	in EUR m.	-0.1	-0.1	-	-
EBIT before special effects	in EUR m.	-0.6	-0.4	+21.3	+0.1
CEWE Group
Turnover	in EUR m.	119.2	118.6	-0.5	-0.6
EBIT	in EUR m.	0.6	0.6	-9.0	-0.1
One-off effects	in EUR m.	-0.2	-0.5	-	-
EBIT before special effects	in EUR m.	0.9	1.0	+16.7	+0.1
EBT	in EUR m.	0.6	0.7	+14.5	+0.1
Earnings after tax	in EUR m.	0.4	0.5	+20.8	+0.1

 

 

Notes to the "Earnings by Business Segment" chart

(1) Photofinishing: Production and sale of photo products such as the CEWE PHOTO BOOK, CEWE CARDS,
CEWE CALENDARS, CEWE WALL PICTURES 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
(4) Other: Structural and corporate costs and profits arising from real estate property and the acquisition of stocks

Percentage and absolute deviations are all calculated at their exact value.
Rounding errors may result.
Should you have any queries, please contact:
CEWE Stiftung & Co. KGaA, Axel Weber (Investor Relations)
Tel.: 0441 / 404 - 2288, Fax: 0441 / 404 - 421, Email: IR@cewe.de

Internet: cewe-fotobuch.de , cewe-photobook.com , cewe.de , cewe-print.de , viaprinto.de , saxoprint.de , deindesign.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:
(insofar as already scheduled)

31 May 2017 2017 Annual General Meeting, Weser-Ems Halls, Oldenburg
10 August 2017 Publication of the 2017 H1 mid-year report
20 September 2017 Berenberg & Goldman Sachs German Corporate Conference, Munich
21 September 2017 Baader Investment Conference, Munich
10 November 2017 Publication of the 2017 Q3 interim report
27 - 28 November 2017 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 3,500 employees in 24 European countries, is both market and technological leader. In 2016 CEWE delivered around 2.2 billion prints, 6.2 million copies of the CEWE PHOTO BOOK and photo gift articles to around 25,000 retail partners to generate consolidated turnover of 593.1 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.