CEWE with clear increase in turnover in the first half of 2018

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

09.08.2018 / 07:00
The issuer is solely responsible for the content of this announcement.

CEWE with clear increase in turnover in the first half of 2018

- First half of 2018 on target: turnover increases by 8.5 % to 254.5 million euros

- CEWE PHOTOBOOK rises by 3.9% in the first half of the year, to 2.4 million copies

- Most recent acquisitions reduce earnings in the first half of the year as planned

- Annual EBIT target of 48 million to 54 million euros confirmed

Oldenburg, 9 August 2018. CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) sees itself well on track to reaching its scheduled annual targets for 2018 after the first half of the year. Group turnover, at 254.5 million euros, is 8.5 % higher than that of the same period of the previous year (HY1 2017: 234.6 million euros). Due to the expected negative effects from the most recent acquisitions of Cheerz and LASERLINE, EBIT amounted to -3.4 million euros (HY1 2017: -0.4 million euros). If these effects are not taken into consideration, the EBIT for the first half of 2018 is almost exactly at the same level as in the previous year. The totalled mid-year figures confirm the forecast made by the Board of Management for the current financial year: Group turnover is to increase to an amount in the range of 630 to 665 million euros in 2018 (2017: 599.4 million euros), Group EBIT is to be in a corridor of 48 to 54 million euros, EBT in the range of 47.5 to 53.5 million euros, and after tax earnings in the range of 33 to 37 million euros. The important performance indicators thus all increased over those of the previous year.

CEWE clearly on track to confirm forecast
"Even with our most recent acquisitions, the first half of the year is clearly in line with our forecasts," says Dr. Christian Friege, Chairman of the CEWE Stiftung & Co. KGaA Board of Management. CEWE has significantly increased its photofinishing turnover, in spite of the extremely hot weather seeing customers currently more inclined to take photographs rather than order photo products, even more so than in previous years. "The renewed increase in turnover per photo is proof that customers appreciate our added-value products," Dr. Friege points out. The acquisitions have developed positively, for example with the LASERLINE acquisition increasing sales in commercial online printing by more than 21 %. "And most importantly, synergies will in future be having a positive effect at an earnings level," says Dr. Friege.

Photofinishing: increases in sales of the CEWE PHOTOBOOK and added-value products
The business segment of photofinishing developed most strongly in the first half of the year, generating an increase in turnover of 7.5 %, to 180.3 million euros (2017: 167.7 million euros). This business segment has thus achieved clear growth in spite of the record temperatures that have prevailed since April and an ever-clearer shift in sales into the fourth quarter. Cheerz also contributed to this development. Due to the negative contributions to earnings that have still been planned for as a result of the Cheerz acquisition, the EBIT decreased to 0.4 million euros (2017: 1.6 million euros). From an enterprise point of view, it is most pleasing that with the CEWE PHOTOBOOK, one of our key products achieved a 3.9 % increase in sales in the first half of 2018. Besides, added-value products such as CEWE WALL PICTURES, CEWE CALENDARS, CEWE CARDS, mobile phone covers and other photo gifts provided extra growth in the first half of the year - in some cases even in the second quarter, which traditionally tends to show declines. These added-value products are also the main reason for the 3.2 % increase in turnover per photo, to 20.07 eurocents. "Besides investing in our acquisitions, we have also continued to invest in our brand awareness over the past few months. This strategy has paid off, given the increase in sales of our CEWE brand products," Christian Friege emphasises. The positive development in turnover was also a sound basis for the fourth quarter, in which almost all the annual profits are normally generated.

Commercial Online-Print: strong growth in turnover, mainly thanks to LASERLINE
It is mainly through the acquisition of LASERLINE that CEWE was able to raise turnover in online commercial printing, by 21.3 % to 49.1 million euros (2017: 40.5 million euros). In spite of the ongoing strong price pressure in Germany and weakened UK business as a result of Brexit, the business segment also grew organically. As expected, EBIT was at -2.1 million euros, and is currently still absorbing the scheduled negative contribution to earnings made by LASERLINE (EBIT for commercial online printing in the first half of 2017: -0.2 million euros). Over and above this, higher paper prices and increased logistics costs intensified this development. Dr. Friege: "The clear increases in turnover are making us optimistic. The purchase of LASERLINE may clearly reinforce the business segment and provide a positive contribution to corporate earnings as of 2019. Besides, with the exception of the UK, the forecast for the European online printing market remains positive. Moving from offline to online printing takes time. We believe that we are very well positioned, especially with the acquisition of LASERLINE, and we expect sales to rise again in the second half of the year."

CEWE RETAIL: continued focus on photofinishing products
The progressive focus of CEWE retail business on photofinishing products naturally reduces hardware turnover in this segment. CEWE also continues to consciously abstain from generating low-margin sales. For this reason sales in the business segment of retailing fell, the same as in previous years: In the first half of 2018, 23.3 million euros were generated, a reduction of 7.0 % against the previous year (2017: 25.0 million euros). The EBIT in this case, at -0.69 million euros, fell slightly short of that of the previous year (2017: -0.38 million euros). "Past years have shown that it is mainly the fourth quarter that is decisive for income in retail business with photo hardware. Cameras and other photo hardware products are also typical Christmas gifts. We thus clearly presume that we will reach all our annual targets in this business segment," says Christian Friege. Besides, when considering this business segment, the importance of retailing as a sales channel for photofinishing products, which are in turn reported in the business segment of photofinishing, must always be taken into account.

CEWE remains soundly financed - substantial increase in the value of the company
With its capital ratio at 54.9 % as at 30 June 2018 (30 June 2017: 62.4 %), CEWE remains extremely soundly financed. The slight decrease is due to extending the balance sheet through the acquisitions of LASERLINE and Cheerz and to the purchase of the "Saxopark" property, the Saxoprint online printing operation. The return on capital employed (ROCE) dropped from 20.5 % in the previous year to what is still a very respectable 16.5 % as at 30 June 2018. In this case too, acquisitions resulted in an increase in the average amount of capital employed. Dr. Friege: "Given the strategically high value and the earnings potential of the acquisitions, and the relatively favourably-priced securing of the location in the Saxopark, interest may fall in the short term, but the value of the company will rise substantially in the long term."

Earnings per business segment in the second quarter and the first half of 2018

CEWE Unit Q2 2017 Q2 2018 HY1 2017 HY1 2018
(1) Photofinishing          
Digital prints in m. units 412.2 421.9 840.6 879.8
Prints from films in m. units 12.0 10.5 21.2 18.5
Total prints in m. units 424.2 432.4 861.8 898.3
CEWE PHOTOBOOK th. books 1,120.0 1,121.1 2,279.1 2,369.1
Turnover in EUR m. 82.1 85.9 167.7 180.3
EBIT in EUR m. 0.2 -1.6 1.6 0.4
Purchase price allocation effects in EUR m. -0.1 -0.1 -0.2 -0.2
Revenue from property in Denmark in EUR m. +0.5 - +0.5 -
EBIT before one-off effects in EUR m. -0.1 -1.5 1.3 0.6
(2) Retailing          
Turnover in EUR m. 13.2 12.4 25.0 23.3
EBIT in EUR m. -0.1 -0.2 -0.4 -0.7
(3) Commercial Online-Print          
Turnover in EUR m. 19.9 24.7 40.5 49.1
EBIT in EUR m. -0.3 -1.6 -0.2 -2.1
Purchase price allocation effects in EUR m. 0.1 -0.1 -0.4 -0.3
LASERLINE integration costs in EUR m. - -0.3 - -0.5
EBIT before one-off effects in EUR m. -0.2 -1.2 0.2 -1.3
(4) Other          
Turnover in EUR m. 0.7 1.0 1.4 1.8
EBIT in EUR m. -0.9 -0.6 -1.4 -1.0
Purchase price allocation effects in EUR m. -0.1 - -0.2 -
EBIT before one-off effects in EUR m. -0.8 -0.6 -1.2 -1.0
CEWE Group Unit Q2 2017 Q2 2018 HY1 2017 HY1 2018
Turnover in EUR m. 116.0 123.9 234.6 254.5
EBIT in EUR m. -1.0 -4.0 -0.4 -3.4
One-off effects in EUR m. +0.1 -0.5 -0.3 -1.0
EBIT before one-off effects in EUR m. -1.1 -3.4 -0.1 -2.3
EBT in EUR m. -1.1 -3.6 -0.4 -3.4
Earnings after tax in EUR m. -0.8 -2.7 -0.3 -2.5

Rounding errors may arise.

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.de , deindesign.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)

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 interim report
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 an SDAX member.


09.08.2018 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.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de

show this