CEWE reaffirms annual targets after sound third quarter

DGAP-News: CEWE Stiftung & Co. KGaA / Key word(s): 9-month figures

10.11.2017 / 07:00
The issuer is solely responsible for the content of this announcement.

CEWE reaffirms annual targets after sound third quarter

- CEWE PHOTO BOOK and CEWE CALENDAR see upswing as Christmas season starts

- Turnover increases in the third quarter by 1.7 million euros to 130.3 million euros

- EBIT once again already clearly positive after three quarters

Oldenburg, 10 November 2017. CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) reaffirms its income forecast for 2017 against a background of sound development in turnover and earnings. Group turnover increased by 1.7 million euros to 130.3 million euros in the third quarter. EBIT adjusted by non-recurring effects improved over the previous year by 0.9 million euros, to 4.0 million euros. "We achieved sound results in the third quarter - in particular because all three business segments contributed to the slight increase in turnover and enhanced our operative earning quality," emphasises CEO Dr. Christian Friege. Dr. Friege believes that the company is well-prepared for the anticipated seasonal peak in the fourth quarter. In a 12-month perspective (1 October 2016 to 30 September 2017), which also includes the period of Christmas business which is typically a very strong season, CEWE achieves EBIT in the amount of 46.1 million euros, and is thus within the range forecast for the full year of 2017. In spite of the increase in value added tax for photo books in Germany, Group turnover in 2017 is to rise slightly on average (585 million euros to 615 million euros). Group EBIT is to be in a corridor of 45 to 51 million euros, EBT in the range of 44.5 to 50.5 million euros, and after tax earnings between 30 and 34 million euros.

Renewed positive result in the first nine months
While CEWE still reported losses in the first three quarters of the past few years, up to 2015, and had to generate more than 100 percent of its consolidated result in the fourth quarter, the company has again achieved a positive EBIT after 2016, at 3.2 million euros in the first nine months of the current business year.

Photofinishing: increase in number and value of photos
Brand products showing particularly strong growth, i.e. CEWE CALENDARS, CEWE WALL PICTURES and CEWE CARDS, and other photo gifts such as mobile phone covers all developed most pleasingly in the third quarter of 2017. CEWE PHOTO BOOK sales increased again slightly in the quarter of the report, by 0.3% to 1.361 million books. This is where CEWE also offers another innovation: with its Pure CEWE PHOTO BOOK, the company has a product that is custom-made for customers wishing to have photo books produced quickly and easily by way of an app on their smartphone.
Photofinishing turnover exceeded the figure for the previous year in the third quarter by +0.9% to reach 96.3 million euros (Q3 2016: 95.4 million euros) - in spite of a higher rate of value added tax on photo books, particularly in Germany. Before one-off effects, operative EBIT, at 4.2 million euros, exceeded the adjusted figure of 3.6 million euros for the previous year by 3.6 million euros. Reported photofinishing EBIT for the third quarter of 2017 was 4.1 million euros (Q3 2016: 5.6 million euros). The business segment developed better than expected in operative terms: for the first time since 2013 CEWE reported a rising production volume of photos in the third quarter of the year, with the number of photos produced rising by 0.6% to 532 million photos, and the value per photo increasing by 3.4% to 18.11 eurocents.

Commercial online printing grows by 2.6% and generates positive EBIT in spite of Brexit
In commercial online printing, growth in the remaining countries compensated for currency losses and weak demand in the UK: for the third quarter of 2017, CEWE once again reported slightly positive growth overall, at +2.6% to 20.2 million euros. If turnover in the UK was only constant, the turnover increase would be in the range of 3 to 4 per cent. Commercial online printing, including effects from the SAXOPRINT purchase price allocation, improved EBIT by 0.7 million to 0.4 million euros (operative EBIT: improvement of 0.4 million to 0.5 million euros). CEWE will continue to expand commercial online printing with the acquisition of Berlin online printing company LASERLINE, reported on 23 October 2017. Depending on the approval of the Federal Cartel Office, LASERLINE is to be taken over with effect as at the beginning of 2018. For 2018, CEWE expects to see a contribution to turnover of around 15 million euros and a slightly negative contribution to EBIT due to integration. As of 2019, LASERLINE is to contribute positively to EBIT. As announced, CEWE also acquired from SAXOPRINT its Saxopark factory premises and property in Dresden in the third quarter.

Retailing stabilises turnover and expects quarter to be strong
In the retailing business segment, CEWE stabilised third-quarter turnover for the first time since 2013. After the intended earnings-related reduction in turnover of the previous years, the division, with EBIT close to being balanced again (-70,000 euros), achieved an approximately constant turnover against that of the previous year in the amount of 13 million euros (Q3 2016: 12.9 million euros). In this case it must be taken into account that the photo sales achieved in retailing are reported in the the business segment of photofinishing. Since 2015 photo sales generated in retailing have increased by a considerable 15% - the result of the market- and margin-focused reorganisation of retail business.

Capital ratio is 57.0%, ROCE 19.3%
The capital ratio was 57.0% as at 30 September 2017 (30 September 2016: 57.1%). The balance sheet total rose over that as at 30 September 2016, by 34.2 million to 342.9 million euros, with the acquisition of Saxopark having an effect, since the financial liabilities and at the same time the long-term assets and hence also the capital employed have been raised. With the 12-month EBIT improved from 46.1 million euros (previous year: 44.8 million euros) this has thus slightly reduced the ROCE as a performance indicator since the period as of 30 September 2016, from 20.6% to 19.3%. "Still a very strong level," declared CFO Dr. Olaf Holzkämper. "We will continue to use our sound financing and our considerable earning power to develop our business segments and offer our shareholders a dividend with the highest-possible increase.
Earnings by business segment

CEWE Unit Q3 2016 Q3 2017 Q1-3 2016 Q1-3 2017
(1) Photofinishing          
Digital prints in m. units 509.4 515.8 1,408.2 1,356.4
Prints from films in m. units 19.1 15.9 44.5 37.1
Total prints in m. units 528.5 531.7 1,452.7 1,393.5
CEWE PHOTO BOOK th. books 1,357.2 1,361.1 3,831.7 3,640.2
Turnover in EUR m. 95.4 96.3 262.0 264.0
EBIT in EUR m. 5.6 4.1 6.1 5.7
Disposal of the operation in Graudenz (PL) in EUR m. 0.3 --- 0.3 ---
Basic equipment for business partners in EUR m. 1.8 --- 2.1 ---
Purchase price allocation effects in EUR m. -0.1 -0.1 -0.3 -0.3
Sale of property in Denmark in EUR m. --- --- --- 0.5
Sale of Smilebooks (USA) in EUR m. --- --- 0.4 ---
Goodwill depreciation in the UK in EUR m. --- --- -0.9 ---
DeinDesign restructuring in EUR m. --- --- -0.2 ---
EBIT before one-off effects in EUR m. 3.6 4.2 4.7 5.5
(2) Retailing          
Turnover in EUR m. 12.9 13.0 40.2 38.0
EBIT in EUR m. 0.0 -0.1 -0.4 -0.4
(3) Commercial online printing          
Turnover in EUR m. 19.7 20.2 60.8 60.7
EBIT in EUR m. -0.3 0.4 0.5 0.2
Purchase price allocation effects in EUR m. -0.4 -0.1 -1.3 -0.5
EBIT before one-off effects in EUR m. 0.1 0.5 1.8 0.7
(4) Other          
Turnover in EUR m. 0.6 0.8 1.5 2.2
EBIT in EUR m. -0.8 -0.9 -2.2 -2.3
Purchase price allocation effects in EUR m. -0.1 -0.1 -0.4 -0.3
EBIT before one-off effects in EUR m. -0.7 -0.7 -1.9 -1.8
CEWE Group          
Turnover in EUR m. 128.6 130.3 364.6 364.9
EBIT in EUR m. 4.5 3.6 4.1 3.2
One-off effects in EUR m. 1.4 -0.4 -0.2 -0.7
EBIT before one-off effects in EUR m. 3.1 4.0 4.3 3.9
EBT in EUR m. 5.1 3.8 4.5 3.4
Earnings after tax in EUR m. 5.2 2.5 4.8 2.1


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 in 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.de , cewe-fotobuch.de , cewe-photobook.com , cewe-print.de , viaprinto.de , SAXOPRINT.de

The CEWE apps are all available in the app stores: CEWE PHOTO WORLD, CEWE POSTCARD, CEWE PURE 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)

27 - 28 November 2017 German Equity Forum, Frankfurt
11 January 2018 Oddo Forum, Lyon
22 March 2018 Annual report and analysts' press conference, Frankfurt
22 March 2018 Publication of the 2017 Annual Report
18 April 2018 Bankhaus Lampe Deutschland Conference, Baden-Baden

About CEWE: The innovative photo and online print service company, 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 CEWE PHOTO BOOK copies and numerous photo gift articles to more than 20,000 retail partners to generate consolidated turnover of 593.1 million euros. The company is continuously generating new impulses in the photographic industry with innovations for people who enjoy taking photos. CEWE is a leading company when it comes to climate protection. The production of CEWE PHOTO WORLD brand products is completely climate-neutral. In the new business segment of "Commercial online printing", printed material for businesses is marketed through the sales platforms of CEWE-PRINT.de, SAXOPRINT and viaprinto. Founded by Senator h. c. Heinz Neumüller in 1961, CEWE has been listed on the stock exchange since 1993 and is currently an SDAX member.



10.11.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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