Corporate | 9 August 2012 07:00

CEWE COLOR confirms 2012 sales and earnings forecast

CeWe Color Holding AG / Key word(s): Half Year Results

09.08.2012 / 07:00

CEWE COLOR confirms 2012 sales and earnings forecast

– CEWE within the sales and EBIT target corridor

– Q2 2012: Turnover grows by 10.4% to EUR 106.9 million

– CEWE PHOTO BOOK sales exceed those of the previous year by 12.8%

– Turnover boosted by online printing: EUR 9.7 million increase

– ROCE reaches 15.7% in spite of advance payment in online printing

Oldenburg, 9 August 2012. In the second quarterly period, CEWE COLOR Holding AG (SDAX, ISIN: DE0005403901) significantly increased its turnover over that of the second quarter of 2011 by 10.4%, to EUR 106.9 million. The new online printing segment had a positive effect on the boost in turnover, with the consolidation of the dynamically growing Saxoprint acquisition. The segment contributed a total of EUR 10 million to turnover (an increase of EUR 9.7 million over Q2 2011). Due to the unbroken increase in CEWE PHOTO BOOK sales (+12.8%) and other digital added value products, the photofinishing segment reported an increase of EUR 1.1 million, to EUR 71.5 million. These effects have both clearly more than compensated for the decline in turnover in the retail segment in the amount of EUR 0.6 million, to EUR 25.4 million. As analysts had expected, the seasonal shift, which has continued for several years, and a slight drop in retail profits in the second quarter resulted in a decline of EUR 0.6 million in EBIT (Q2 2011: + EUR 0.7 million). Due to the slight rise in the fixed cost basis for the peak in sales in the fourth quarter, the three first quarters – with weaker sales – will be negatively affected by these advance payments in terms of profits. Against this background, CEWE COLOR is presuming that the company will earn around 90% of its annual EBIT target (EUR 27 to 33 million) in the fourth quarter of 2012. CEO Dr. Rolf Hollander: 'The first six months see us clearly on track with our targets for 2012, namely to generate turnover of more than EUR 500 million and to achieve our earnings targets. The high growth rates for online printing and the CEWE PHOTO BOOK are a clear confirmation of our strategic direction and will reinforce our growth in coming years as well.'

Outstanding performance for online printing and CEWE PHOTO BOOK
In the second quarter the overall number of photos increased by 1.2% over the figure for 2011, to 525.4 million photos. This is mainly due to the sustained success of the CEWE PHOTO BOOK, with sales increasing by 12.8%, to 1.095 million books. The trend to digitisation continues unchanged: as many as 92% of all the photos produced are now digital photos (Q2 2011: 87%), and around 69% of all the photos produced are ordered online (Q2 2011: 63%). In the online printing segment, Saxoprint GmbH, a company acquired in February 2012, markedly drove up its growth in sales in the second quarter over sales generated in the same period of the previous year. 'The outstanding performance of online printing has fully met expectations and achieved EUR 10 million in sales in the second quarter. We are thus convinced that in 2012 we will generate at least EUR 40 million in turnover in our new segment,' Dr. Hollander said.

Period up to mid-year: turnover rises by 8.6%
Consolidated turnover for the whole first six-month period increased strongly, by 8.6% to EUR 202.4 million, due to the positive development in photofinishing and to online printing. EBIT was reduced by EUR 2.8 million to a negative EUR 7.4 million – one of the reasons being that the first quarter of any year has always been negative in the photofinishing segment. Besides the effect resulting from higher fixed costs for Christmas business, this is also a result of the extraordinary expenses incurred in the first quarter due to the Schlecker insolvency in the photofinishing segment and the acquisition costs for Saxoprint GmbH in the online printing segment. 'The change in the seasonal effect on business with the focus on sales and in particular earnings in the fourth quarter becomes apparent here, as expected. Even given the non-recurring effects of the first quarter, the mid-year profit is quite within the expected figures and is a confirmation of our target corridor,' says CFO Dr. Olaf Holzkämper.

Sound return on capital employed in spite of acquisition – capital ratio at 38.6%

Largely as a result of the Saxoprint acquisition, the average amount of capital employed, based on the previous four quarters, rose by EUR 16.3 million to EUR 173.5 million as at 30 June 2012. The 12-month EBIT from the third quarter of 2011 to the second quarter of 2012 reached EUR 27.3 million, and is thus only EUR 2.3 million below the comparable figure for the corresponding quarters in 2010/2011, in spite of acquisition effects and the extraordinary expenses incurred in the first quarter. This means that on a 12-month basis, CEWE COLOR has already achieved the EBIT range forecast for 2012. At 15.7%, CEWE COLOR continued to achieve an attractive interest rate for its invested capital (previous year 18.8% on 30 June 2011). 'The decline is a reflection of the advance payment effect which has occurred as a result of the capital tied up in the new segment of online printing. Capital efficiency will benefit as soon as this segment achieves growing income,' Hollander explains. CEWE COLOR remains soundly financed: in a 12-month comparison, the equity capital of the company has shown practically no change, amounting to EUR 106.7 million (30 June 2011: EUR 106.1 million), with the capital ratio at 38.6%. Net annual income after taxes in the amount of EUR 16.8 million (from 1 July 2011 to 30 June 2012) has thus more than offset the 12% dividend increase in 2012 (EUR 9.2 million), the share repurchase in the second half of 2011 (EUR 6.1 million), the expenses and income with no effect on net income accrued in the 12-month period (EUR 1.2 million), and even a slightly negative equity effect from the consolidation of Saxoprint.

Board of Management confirms targets for 2012
On the basis of the second quarter, the Board of Management is confirming all the annual targets for the 2012 business year: the new segment for online printing is to considerably boost growth by around EUR 40 million and raise Group turnover in the range of 7% to 12%, from EUR 500 million to EUR 525 million. After adjustment by the contribution to sales of the new online printing business segment, the management predicts a slight average increase in sales to around EUR 460 million to EUR 485 million (-1.9 % to +3.4 %), While the total number of photos in the photofinishing sector is declining slightly, probably by around 2.29 to 2.36 billion photos, the management nevertheless continues to expect growth in the sale of CEWE PHOTO BOOKS, by around 11 to 15%, to range between 5.7 million and 5.9 million photos. Investments in 2012 are expected to remain in the range of EUR 30 to 33 million (-1% to +9%) and EBIT is to amount to around EUR 27 to 33 million (-10% to +10%). The average of this range is thus the same as in the 2011 business year. Since the management does not expect online printing, at turnover of around EUR 40 million, to contribute notably to earnings, an EBIT margin of 5.6% to 7.2% – an average of 6.4% – results on the basis of photofinishing sales (2011: 6.4%). Earnings per share are likely to reach around EUR 2.44 to EUR 3.06.

Second quarter of 2012 in a comparison with the previous year

CEWE COLOR Group	Unit	Q2	Q2	Delta	Delta
		2011	2012	%	Absolute
Digital prints	in m. units	449.7	480.9	+6.9 %	+31.2
Prints from films	in m. units	69.3	44.5	-35.8 %	-24.8
Total prints	in m. units	519.0	525.4	+1.2 %	+6.4
CEWE PHOTO BOOKS	th. books	970.4	1,095.0	+12.8 %	+124.6
Turnover	in EUR m.	96.8	106.9	+10.4 %	+10.1
EBIT	in EUR m.	0.7	-0.6	–	-1.3
EBT	in EUR m.	0.3	-1.1	–	-1.4
Earnings after tax	in EUR m.	-0.3	-0.7	-164 %	-0.5

1. Period up to mid-year 2012 in a comparison with the previous year

CEWE COLOR Group	Unit	HY1	HY1	Delta	Delta
		2011	2012	%	Absolute
Digital prints	in m. units	872.6	942.7	+8.0 %	+70.1
Prints from films	in m. units	120.4	78.9	-34.5 %	-41.5
Total prints	in m. units	993.0	1,021.6	+2.9 %	+28.6
CEWE PHOTO BOOKS	th. books	1,890.2	2,121.6	+12.2 %	+231.4
Turnover	in EUR m.	186.3	202.4	+8.6 %	+16.1
EBIT	in EUR m.	-4.5	-7.4	-62.8 %	-2.8
EBT	in EUR m.	-5.1	-8.4	-64.0 %	-3.3
Earnings after tax	in EUR m.	-6.0	-7.8	-30.0 %	-1.8

Percentage deviations have all been calculated at the exact values.

Should you have any queries, please contact:
CEWE COLOR Holding AG, Axel Weber (Investor Relations)
Tel.: 0441 / 404 – 2288, Fax: 0441 / 404 – 421,
e-mail: IR@cewecolor.de
Internet: www.cewecolor.de , www.cewe.de , www.cewe-fotobuch.de
www.viaprinto.de , www.saxoprint.de

Financial schedule:

8 November 2012: Publication of the QI-Q3 interim report
12 November 2012: German Equity Forum, Frankfurt

About CEWE COLOR: Europe's leading online printing and photo service company CEWE COLOR, with 13 highly-technical production operations and a staff of around 3,100 employees in 24 European countries, is both market and technological leader. In 2011 CEWE COLOR delivered around 2.5 billion prints, more than 5.1 million CEWE PHOTO BOOKS and photo gift articles to more than 33,000 retail partners to generate consolidated turnover of 469 million euros. CEWE COLOR is a 'first mover' in the introduction of new digital technologies and products. CEWE COLOR is continuing to expand its online printing service as an additional business segment with viaprinto.de and saxoprint.de . CEWE COLOR celebrated its 50th company anniversary in 2011. In 1961 CEWE COLOR was founded by Senator h.c. Heinz Neumüller. The company went public under the leadership of Hubert Rothärmel in 1993. CEWE COLOR Holding AG is listed on the SDAX.

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Language:	English
Company:	CeWe Color Holding AG
	Meerweg 30-32
	26133 Oldenburg
	Germany
Phone:	+49 (0)441 40 4-1
Fax:	+49 (0)441 40 4-42 1
E-mail:	IR@cewecolor.de
Internet:	www.cewecolor.de
ISIN:	DE0005403901
WKN:	540390
Indices:	SDAX
Listed:	Regulierter Markt in Berlin, Frankfurt (Prime Standard); Freiverkehr in Düsseldorf, Hamburg, Hannover, München, Stuttgart

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181000  09.08.2012