CEWE intends to continue growing in 2018

DGAP-News: CEWE Stiftung & Co. KGaA / Key word(s): Final Results/Forecast

22.03.2018 / 07:00
The issuer is solely responsible for the content of this announcement.

CEWE intends to continue growing in 2018

- Corporate targets all reached in 2017

- CEWE PHOTO BOOK withstands a massive increase in VAT

- Ninth consecutive dividend increase sought: 1.85 euros per share

- Turnover and EBIT to rise by up to approx. 10 % in 2018

Oldenburg/Frankfurt am Main, 22 March 2018. CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) once again achieved all its corporate targets in the 2017 financial year. Thanks to the company's strong earnings and sound financial position, the Board of Management and the Supervisory Board are able to propose the ninth consecutive increase in dividends at the Annual General Meeting. CEWE is aiming for another increase in turnover and earnings in 2018, with the earning power in photofinishing business in particular contributing to this rise, in addition to positive earnings in commercial online printing and retailing once again. This was announced by CEWE during the Annual Report and Analysts' Press Conference held today in Frankfurt am Main. "Our goal is to continue to enhance customer satisfaction as the focus of our activities, thus steadily raising our corporate value and enabling our shareholders to be a part of this growth," says Dr. Christian Friege, Chairman of the Board of Management of CEWE Stiftung & Co. KGaA.

CEWE increases turnover and earnings
An important 2016 trend was maintained: the Group's business segments all showed positive results. In 2017 CEWE turnover increased by 1.1 % to 599.4 m. euros (previous year of 2016: 593.1 m. euros) and was thus exactly in the target corridor of 585 m. to 615 m. euros. In the second half-year period in particular, the CEWE PHOTO BOOK even withstood the difficult market situation that prevailed especially in Germany as a result of the drastic increase in VAT, from 7 % to 19 %, which entered into effect in 2017. "Our customers remain loyal in spite of the higher VAT. This shows that we are on the right track with our high standards of product quality and customer service," says Dr. Christian Friege.

Moderate increase in expenditure for marketing reinforces brand awareness and growth
CEWE invested considerably in CEWE brand products in 2017 as well, slightly increasing its marketing expenditure for photofinishing. The effects on brand awareness are clearly positive: unsupported brand awareness was raised by a considerable 7 percentage points, to reach 57 %. With support included, as many as 75 % of the respondents knew of the CEWE PHOTO BOOK. Dr. Friege: "Customers make a conscious decision in favour of CEWE brand products because they can rely on our performance promise. This is what makes the brand so strong, and our retail partners in Europe benefit from this strength." This is one of the reasons why Group EBIT climbed to 49.2 m. euros in the 2017 financial year (2016: 47.0 m. euros).

After-tax earnings grow by 10.5 %: ROCE remains high at 20.1 %
In 2017 CEWE increased its after-tax earnings by 10.5 %, from 30.4 m. euros to 33.6 m. euros, thus reaching the top end of the target corridor of 30 to 34 m. euros. Earnings per share increased to 4.70 euros, and were thus at the upper end of the target corridor of 4.23 to 4.81 euros (2016: 4.25 euros). At 20.1 %, the return on capital employed (ROCE) once again reached a very good level (2016: 21.3 %).

Increase in earnings makes it possible to raise dividends for the ninth consecutive year
On the basis of the positive development in earnings and a generally sound financial situation, the Board of Management and the Supervisory Board have resolved to propose to the shareholders a dividend of 1.85 euros (2016: 1.80 euros) at the Annual General Meeting on 6 June 2018. This is also the ninth dividend increase in succession for CEWE. With the dividend proposed, shareholders are achieving a dividend yield of 2.1 % on the basis of the price at the end of 2017 (88,05 euros). The total return for shareholders was 6.24 % last year on the basis of the dividend for 2016 and the share-price development.

Core business of photofinishing withstands increase in VAT
In spite of the increase in VAT on photo books in Germany, which entered into force on 1 January 2017 and amounted to 19 % after a previous 7 %, the biggest CEWE business segment nevertheless increased its earnings. With the number of photos sold decreasing marginally, turnover in the photofinishing segment rose by 1.6 % to 459.3 m. euros (2016: 452.0 m. euros). This saw EBIT, at 53.9 m. euros, exceeding the same figure for the previous year by 3.7 % (2016: 52.0 m. euros). This development is due to the stable trend towards high-quality photo products, with turnover per photo increasing by 4.3 % to 21.12 eurocents in 2017 - a new record (2016: 20.25 eurocents). The market situation remained generally difficult for CEWE retailing activities in 2017, with margins low. Turnover thus dropped by 3.5 % to EUR 53.0 m. euros (2016: 54.9 m. euros). A slight EBIT decline was also recorded, down to 0.3 m. euros (previous year: 0.6 m. euros).

Commercial online printing at last year's level in spite of Brexit
In spite of the negative impact of Brexit on UK business and the considerable price pressure on the market, particularly in Germany, turnover in the business segment of commercial online printing, at 84.0 m. euros, was at exactly the same level as in the previous year. CEWE used the past financial year to further expand the sales channels for commercial online printing, to extend its product range and to strengthen the company through the acquisition of online printing supplier LASERLINE. The EBIT generated by the business segment developed positively, increasing over that of the previous year by 2.8 %, to 1.64 m. euros (2016: 1.60 m. euros).

CEWE increases fourth-quarter turnover by 2.6 %
In the fourth quarter - typically the strongest quarter from a seasonal point of view - CEWE increased its turnover by 2.6 % to 234.5 m. euros (2016: 228.5 m. euros). The increase in EBIT to 46.1 m. euros corresponded to as much as 7.2 % in comparison to the previous year (2016: 42.9 m. euros). Turnover in the most important segment of photofinishing grew particularly well, by 2.8 %, to 195.4 m. euros (2016: 190.0 m. euros). "Our high-quality CEWE brand products remain attractive as Christmas gifts," says Dr. Christian Friege. The other two business segments also contributed to the positive quarterly growth: retailing increased its turnover in the fourth quarter by 2.0 % to 15.9 m. euros (2016: 14.7 m. euros). In the fourth quarter, commercial online printing achieved turnover in the amount of 23.3 m. euros, thus exceeding the figure for the previous year by 0.7 % (2016: 23.1 m. euros).

Takeovers promise further growth
In the past few months, CEWE has taken over the online printing company LASERLINE as well as acquiring 80 % of the shares in leading French photo app company "Cheerz". The company is using these two acquisitions to set a growth impulse in commercial online printing and photofinishing, thus expecting to generate sustained positive effects on the value of CEWE on the whole.

2018 target corridor: sights set on growth in sales and earnings
CEWE Group turnover is to clearly exceed the 600-euro mark in 2018, and to increase to 630-665 m. euros, with turnover in photofinishing remaining stable or increasing slightly, supported by turnover from the acquisition of Cheerz Group stocks. Retailing is to record consistent to slightly declining development. Commercial online printing is also to rise on the majority of markets, with the British market possibly remaining an exception. Added to this is growth in turnover as a result of the acquisition of Laserline. In spite of the negative contribution as a result of the acquisition of Cheerz stocks still to be expected, Group EBIT is to be in a corridor of 40 m. to 54 m. euros, thus growing by up to 10 %. The EBT is to reach a figure in the range of 47.5 to 53.5 m. euros, with after-tax earnings forecast at 33 to 37 m. euros.

Earnings by business segment

CEWE Einheit Q4-2016 Q4-2017 2016 2017
(1) Photofinishing          
Digital prints in m. units 768.0 771.7 2,176 2,128
Prints from films in m. units 11.5 9.9 56.0 47.0
Total prints in m. units 779.5 781.6 2,232 2,175
CEWE PHOTO BOOK in m. units 2.4 2.4 6.2 6.0
Turnover in EUR m 190.0 195.4 452.0 459.3
EBIT in EUR m 45.9 48.3 52.0 53.9
Sales revenue from property in Denmark in EUR m --- --- --- 0.5
Additional expenditure for employee shares in EUR m --- -0.6 --- -0.6
Restructuring costs in EUR m --- --- -0.2 ---
Proceeds from US internet activity in EUR m --- --- 0.4 ---
Goodwill amortisation in EUR m -2.1 --- -3.0 ---
Disposal of the operation in Graudenz, Poland in EUR m --- --- 0.3 ---
Basic equipment for business partners in EUR m --- --- 2.1 ---
Purchase price allocation effect in EUR m -0.1 -0.1 -0.4 -0.4
EBIT before one-off effects in EUR m 48.1 49.0 52.8 54.5
(2) Retail          
Turnover in EUR m 14.7 15.0 54.9 53.0
EBIT in EUR m 1.0 0.7 0.6 0.3
(3) Commercial Online-Print          
Turnover in EUR m 23.1 23.3 84.0 84.0
EBIT in EUR m 1.1 1.4 1.6 1.6
Purchase price allocation effect in EUR m -0.4 -0.1 -1.7 -0.6
EBIT before one-off effects in EUR m 1.5 1.6 3.3 2.3
(3) Other          
Turnover in EUR m 0.6 0.8 2.2 3.0
EBIT in EUR m -5.0 -4.3 -7.2 -6.6
Goodwill amortisation in EUR m -3.9 --- -3.9 ---
Impairment write-down in EUR m --- -3.5 --- -3.5
Purchase price allocation effect in EUR m -0.1 -0.1 -0.5 -0.5
EBIT before one-off effects in EUR m -1.0 -0.7 -2.8 -2.6
CEWE Group   Q4-2016 Q4-2017 2016 2017
Turnover in EUR m 228.5 234.5 593.1 599.4
EBIT in EUR m 42.9 46.1 47.0 49.2
Total one-off effects in EUR millions -6.7 -4.6 -6.9 -5.3
EBIT before one-off effects in EUR m 49.6 50.7 53.9 54.5
EBT in EUR m 41.7 45.5 46.2 48.9
Earnings after tax in EUR m 25.5 31.4 30.4 33.6

Rounding errors may arise. Percentage deviations have all been calculated at the exact values.
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 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-Print: Production and sale of the commercial print products of the online printing portals, e.g. CEWE-PRINT.de, SAXOPRINT, viaprinto and LASERLINE


Full year of 2017 in comparison to the previous year and target, and the targets for 2018

CEWE Konzern Unit 2016
2017 actual 2018 target
Prints in billion units 2.18 2.08-2.18 2.13 2.12-2.14
CEWE PHOTOBOOK in m. units 6.2 6.00-6.25 6.02 6.08-6.14
Investments in EUR m. 50.4 55 44.6* 55
Turnover in EUR m. 593.1 585-615 599.4 630-665
EBIT in EUR m. 47.0 45-51 49.2 48-54
EBT in EUR m. 46.2 44.5-50.5 48.9 47.5-53.5
Earnings after tax in EUR m. 30.4 30-34 33.6 33-37
Earnings per share EUR/share 4.25 4.23-4.81 4.70 4.55-5.13

* EUR 44.6 million in operational investments including building expansion in Oldenburg,
plus acquisition of property "Saxopark" in Dresden (EUR 27.6 million)

Rounding errors may arise. 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: IR@cewe.de

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

19.04.2018 2018 Bankhaus Lampe Deutschland Conference
14.05.2018 Publication of the 2018 Q1 interim report
14.05.2018 Press release on the 2018 Q1 interim report
06.06.2018 2018 Annual General Meeting
09.08.2018 Publication of the 2018 Q2 interim report
09.08.2018 Press release on the 2018 Q2 interim report
24.09.2018 2018 Berenberg & Goldman Sachs German Corporate Conference
25.09.2018 2018 Baader Investment Conference
13.11.2018 Publication of the 2018 Q3
13.11.2018 Press release on the 2018 Q3 interim report
26.11.2018 2018 German Equity Forum

About CEWE: The innovative photo and online print service company, with twelve highly-technical production operations and a staff of around 3,600 employees in 24 European countries, is both market and technological leader. In 2017 CEWE delivered around 2.2 billion prints, 6.0 million CEWE PHOTO BOOK copies and numerous photo gift articles to more than 20,000 retail partners to generate consolidated turnover of 599.4 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 alle CEWE 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, viaprinto and LASERLINE. 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.


22.03.2018 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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