CEWE continues to grow

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

14.05.2018 / 07:00
The issuer is solely responsible for the content of this announcement.

CEWE continues to grow

- Q1: Increase of 10.1 % in turnover to 130.6 million euros (Q1 2017: 118.6 million euros)

- CEWE PHOTOBOOK sales grow by strong 7.7 % to 1.248 million books

- 2018 TIPA World Awards: CEWE is the best photo service in the world

- Stable EBIT of 0.6 million euros in spite of expenditure for integration

- Forecast for 2018 confirmed: turnover of 630-665 million euros, EBIT of 48-54 million euros

Oldenburg, 14 May 2018. CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) continues to grow in the first quarter of 2018: turnover increased by 10.1 % to 130.6 million euros (Q1 2017: 118.6 million euros). More than acquisitions, it was mainly the core business of photofinishing that accounted for growth: with the highest sales, this business segment generated strong organic growth, even by as much 10.4 % overall on the inclusion of acquired photo app specialist "Cheerz". At 0.6 million euros, the EBIT for the first quarter of 2018 is at exactly the same level as that of the previous year in spite of extraordinary expenditure for the integration of acquisitions (Q1 2017: 0.6 million euros). "Even if the fourth quarter, as is now traditionally a standard, will also contribute most to turnover and in particular to earnings in 2018, we have created a good initial basis for the year as a whole with our organic growth and the extra boost through our acquisitions. We are particularly pleased about the comeback of the CEWE PHOTOBOOK, as this could not grow in 2017 due to the VAT increase in volume," says Dr. Christian Friege, Chairman of the Board of Management of CEWE Stiftung & Co. KGaA.

Photofinishing growing dynamically
Turnover in the business segment of photofinishing increased overall by 10.4 %, to 94.5 million euros (Q1 2017: 85.6 million euros), with "Cheerz" contributing photofinishing turnover for the first time: in February CEWE had acquired the high-growth market leader for photofinishing apps in France. In addition to the acquisition of Cheerz, the CEWE PHOTOBOOK was the main driver of growth, as it did not increase in the previous year due to the drastic increase in Value Added Tax from 7 % to 19 %: CEWE PHOTOBOOK volume increased strongly by 7.7 % to 1.248 million books in the first quarter of 2018 (Q1 2017: 1.159 million books). CEWE also won through with its CEWE PHOTOBOOK when the company received the 2018 TIPA World Award in the "Best Photo Print Service" category: the option of enhancing CEWE PHOTOBOOK covers impressed the international jury. "Technical Image Press Association" - TIPA - awards are recognised as the most coveted awards for photo and imaging products worldwide. Sales of CEWE CALENDARS, CEWE CARDS, photo gifts and CEWE INSTANT PHOTOS also continued to rise. The trend towards high-quality photos was maintained unchanged: turnover per photo rose by 3.7 % to 20.28 eurocents (Q1 2017: 19.55 eurocents). Against this background, with photofinishing at 1.9 million euros (Q1 2017: 1.3 million euros), CEWE again reported a positive result as early as in the first quarter.

LASERLINE acquisition drives commercial online printing
The business segment of commercial online printing also reported double-digit growth in Q1. At 24.4 million euros, turnover was 18.8 % higher than in the previous year (Q1 2017: 20.6 million euros), benefiting most of all from the LASERLINE acquisition. Portfolio business asserted itself at the same level as in the previous year, in spite of strong ongoing price competition in Germany and weakened business in the UK as a result of Brexit. The EBIT, which reached -0.5 million euros in the first quarter of 2018, after +0.1 million euros in the first quarter of 2017, was also negatively affected by an amount of around 0.2 million euros in non-recurring costs for integrating LASERLINE. As of 2019, LASERLINE is expected to contribute positively to earnings. Rises in costs and two days of production fewer than in the previous year also meant that the EBIT for the business segment of commercial online printing was still negative in Q1.

Market-related decline in retailing turnover
In a comparison with the same period of the previous year, sales of hardware in the retailing segment saw a market-related decrease of 8 %, to 10.8 million euros in the first quarter of 2018 (Q1 2017: 11.8 million euros). The optimised price strategy involving a conscious decision to forego low-margin sales did, however, pay off. At -0.5 million euros and in spite of a decline in turnover, the EBIT fell only slightly short of that of the previous year (Q! 2017: -0.3 million euros). First-quarter earnings are traditionally negative in retailing due to the seasonal nature of the business.

Segment for other business increases slightly
Turnover in the segment for other business was at 0.9 million euros in the first quarter of 2018 (Q1 2017: 0.7 million euros). This business segment combines real-estate holdings and participating interests, as well as structural and corporate costs and costs for the annual general meeting and investor relations. The 2018 first-quarter EBIT, at -0.4 million euros, was virtually at the same level as that of the same period of the previous year (Q1 2017: -0.5 million euros).

Capital ratio remains very sound: 59.3 %
The capital ratio remains at a very sound level of 59.3 % as at 31 March 2018 (31 March 2017: 63.2 %). In spite of the increase in capital employed through acquisitions (Saxopark, LASERLINE and the acquisition of Cheerz stocks), the return (ROCE) was again strong at 18.9% (Q1 2017: 20.8 %).

Forecast confirmed
The good results of the first quarter underpin the Board of Management forecast for the full year of turnover in the range of 630 to 665 million euros and EBIT of 48 to 54 million euros, with CEWE expecting growth impulses to come from the acquisition of online printing provider LASERLINE in commercial online printing and from the majority interest in the leading French photo app "Cheerz" in the photofinishing sector. The company also intends to continue with value-oriented growth in 2018 through its reliable dividend policy. CEWE proposed a dividend of 1.85 euros for the 2017 financial year to its shareholders at the Annual General Meeting on 6 June 2018 - which would be the ninth consecutive dividend increase.

Earnings by business segment in the first quarter of 2018

CEWE Unit Q1 2017 Q1 2018 Diff. % Diff. abs.
(1) Photofinishing          
Digital prints in m. units 428.4 457.9 +7.0 +29.5
Prints from films in m. units 9.2 7.9 -14.2 -1.3
Total prints in m. units 437.6 465.8 +6.4 +28.2
CEWE PHOTOBOOK th. books 1,159.1 1,248.0 +7.7 +88.9
Turnover in EUR m. 85.6 94.5 +10.4 +8.9
EBIT in EUR m. 1.3 1.9 +43.7 +0.6
Purchase price allocation effects in EUR m. -0.1 -0.1 - -
EBIT before one-off effects in EUR m. 1.5 2.0 +40.5 +0.6
(2) Retailing          
Turnover in EUR m. 11.8 10.8 -8.0 -0.9
EBIT in EUR m. -0.3 -0.5 -46.7 -0.2
(3) Commercial online printing          
Turnover in EUR m. 20.6 24.4 +18.8 +3.7
EBIT in EUR m. 0.1 -0.5 -559 -0.6
Purchase price allocation effects in EUR m. -0.2 -0.1 - -
LASERLINE integration costs in EUR m. - -0.2 - -
EBIT before one-off effects in EUR m. 0.3 -0.2 -152 -0.5
(4) Other          
Turnover in EUR m. 0.7 0.9 +29.3 +0.2
EBIT in EUR m. -0.5 -0.4 +28.4 +0.2
Purchase price allocation effects in EUR m. -0.1 - - -
EBIT before one-off effects in EUR m. -0.4 -0.4 +8.4 +0.0
CEWE Group          
Turnover in EUR m. 118.6 130.6 +10.1 +12.0
EBIT in EUR m. 0.6 0.6 -2.5 -0.0
One-off effects in EUR m. -0.5 -0.4 - -
EBIT before one-off effects in EUR m. 1.0 1.0 -2.8 -0.0
EBT in EUR m. 0.7 0.2 -73.5 -0.5
Earnings after tax in EUR m. 0.5 0.1 -73.9 -0.4

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 printing: Production and sale of the commercial print products in the online printing portals, e.g. CEWE-PRINT.de, SAXOPRINT, Viaprinto and LASERLINE.

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 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)

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. CEWE brand products are all produced in a climate-natural process. In the "commercial online printing" business segment, 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.

14.05.2018 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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