Corporate | 13 August 2014 07:00

CEWE on target for 2014 after first half year

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

13.08.2014 / 07:00

CEWE on target for 2014 after first half year

– CEWE PHOTO BOOK continues to increase

– Online printing grows by 24.8% in the first half year

– Return on equity continues to improve: ROCE increases to 17.0%

– Capital ratio rises to 53.4%

Oldenburg, 13 August 2014. CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) is on track to reach its targets for the current business year after the first six months of 2014: Income compared to the target figures for 2013 is to be improved on average by around 3 million euros, in terms of EBIT and EBT and of after-tax earnings. As expected, turnover in the first half year, which is typically weak and loss-generating for seasonal reasons, was reduced from 218.2 million to 204.2 million euros. In addition to the continuing seasonal shift to the fourth quarter, one of the main reasons is the scheduled reduction in turnover from wholesale business in the business segment of retailing, which only generated minimal margins in the previous years. EBIT improved by around three million euros in the first six months of 2014 in comparison to the same period of the previous year, which had continued to be negatively affected by expenditure for restructuring, to amount to -7.3 million euros (1 H 2013: -10.3 million euros), and is thus fully in line with targets. In the case of EBIT on a rolling 12-month basis, which does not reflect seasonal fluctuations, CEWE achieved EBIT of 32.4 million euros (target for 2014: 30-36 million euros). CEWE is now generating by far the greatest share of its earnings in the fourth quarter, with EBIT in the Christmas quarter of 2013 amounting to 33.5 million euros. “We have set ourselves ambitious targets for 2014: continuing with our dynamic growth in online printing and at the same time strengthening our earning power throughout the company. The first half year has shown that we are well on the way to achieving both targets,” says Dr. Rolf Hollander, Chairman of the Board of Management of CEWE Stiftung & Co. KGaA.

Online printing grows even more than anticipated
Online printing grew by 24.8% to 33.9 million euros in the first six months of 2014, which was an even greater increase than had been expected. CEWE is aiming for an increase in turnover of more than 17% in this business segment for 2014 as a whole. EBIT in the segment improved slightly in spite of increased start-up investments for marketing expenses and depreciation on machinery, from – 2.0 million euros to -1,9 million euros. The EBIT margin improved markedly due to the higher level of turnover, from -7.2% in the same quarter of the previous year to -5.7% in the first six months of 2014. “The increase in the number of new customers and our satisfied regular customers are an excellent basis for our future growth,” Dr. Hollander emphasises.

Photofinishing EBIT improved by around 3 million euros
In the first half year of 2014, the CEWE PHOTO BOOK volume, with an increase of 2.9% to 2.26 million, exceeded the target corridor of an increase of 1 to 2% for the year as a whole. This is again confirmation of the trend towards added value products, which has once again largely compensated for the 3.7% decrease in the absolute number of photos produced, to 932.2 million. Due to the renewed increase in the turnover per photo, of 2.8% to 14.75 euro cents, turnover in the photofinishing segment remained virtually consistent at 137.5 million euros (1H 2013: 138.8 million euros). In spite of the continuing seasonal shift to the fourth quarter – demand for photo products in the photofinishing segment which are to be used as Christmas gifts is increasing – the EBIT improved by around three million euros to – 4.3 million euros, also because of the expenditure for restructuring included in the previous year.

Retailing EBIT almost stable in spite of scheduled decrease in turnover
As already announced, CEWE retailing discontinued its hardware wholesale business in the first half year of 2014. The high volume of turnover relating to the business hardly contributed to earnings in the previous year. With turnover reduced by 37.3% to 32.7 million euros, the retailing segment EBIT, at – 1.1 million euros, was almost the same as in the previous year.

Return on equity rises significantly: ROCE improves to an extremely sound 17.0%
After 13.7% in the previous year, the return on capital employed (ROCE) on a 12-month basis reached an extremely sound level of 17.0% as at 30 June 2014. The capital ratio was 53.4%. CFO Dr. Olaf Holzkämper: “By selling our own shares we have not only raised our free float to 70.1%; we have at the same time continued to increase our capital ratio and reduce our debts. We have thus increased our strategic scope and are now in a position to strengthen the company through acquisitions when attractive opportunities arise, in the business segments of online printing and photofinishing, as well as in the neighbouring business segments.

Outlook: 2014 targets reaffirmed
On the basis of the first half year, the Board of Management confirms its earnings targets defined for 2014. Target earnings corridors are all three million euros higher than in the previous year. EBIT in 2014 is to be in the range of 30 million to 36 million euros, and the EBT is to amount to 28 million to 34 million euros. After-tax earnings are to be in the range of 19 million to 23 million euros. Earnings per share are to amount to 2.84 to 3.45 euros, thus making it possible to raise the dividend for the sixth year in succession.

CEWE business segments [EUR million]	1H 2013	1H 2014	2H 2013	2H 2014
(1) Photofinishing (PF)
Turnover	138.8	137.5	69.7	69.1
EBIT	-7.4	-4.3	-2.9	-2.2
EBIT margin [%]	-5.3%	-3.1%	-4.2%	-3.1%
(2) Retailing (R)
Turnover	52.2	32.7	27.6	16.3
EBIT	-0.9	-1.1	-0.3	-0.4
EBIT margin [%]	-1.8%	-3.3%	-1.0%	-2.4%
Core business (PF + R)
Turnover	191.0	170.2	97.3	85.4
EBIT	-8.3	-5.3	-3.2	-2.5
EBIT margin [%]	-4.4%	-3.1%	-3.3%	-3.0%
(3) Online printing
Turnover	27.2	33.9	14.3	17.6
EBIT	-2.0	-1.9	-0.7	-0.7
EBIT margin [%]	-7.2%	-5.7%	-5.2%	-4.0%
CEWE Group [EUR million]
Turnover	218.2	204.2	111.6	102.9
EBIT	-10.3	-7.3	-3.9	-3.3
EBIT margin [%]	-4.7%	-3.6%	-3.5%	-3.2%
ROCE [%]	13.7%	17.0%	–	–

Information

(1) Photofinishing: Production and sale of photo products such as CEWE PHOTO BOOKS, CEWE CARDS, CEWE CALENDARS, CEWE WALL ART and individual (analogue and digital) photos as well as other photo products.

(2) Retailing: Trade with photo hardware such as cameras and lenses in CEWE’s own retail stores in Norway, Sweden, Poland, the Czech Republic and Slovakia.

Core business: Aggregate of photofinishing and retailing

(3) Online printing: Production and sale of commercial print products in the online printing portals at CEWE-PRINT.de, Saxoprint.de and Viaprinto.de, and their international portals

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: www.cewe.de , www.cewe-fotobuch.de , www.cewe-print.de , www.viaprinto.de , www.saxoprint.de

In den App Stores verfügbar: The CEWE Investor Relations app for your iPad(R) or Android tablet, including annual reports and quarterly reports as well as sustainability reports.

Financial schedule:
13 August 2014 Analysts’ telephone conference on 1H
19 September 2014 Capital Market Day @ photokina, Cologne
24 September 2014 Capital market conferences, Munich
12 November 2014 Publication of the Q3 2014 interim report
12 November 2014 Analysts’ telephone conference on Q3
24 November 2014 German Equity Forum, Frankfurt

About CEWE : The photo and online print service company CEWE, with 11 highly-technical production operations and a staff of around 3,200 employees in 24 European countries, is both market and technological leader. In 2013 CEWE delivered around 2.37 billion prints, 5.8 million copies of the CEWE PHOTO BOOK and photo gift articles to around 30,000 retail stores, to generate consolidated turnover of 528.6 million euros. CEWE is continuously generating new impulses in the photographic industry with innovations for people who enjoy taking photos. In the new business segment of online printing, printed material for advertising is marketed through the CEWE-PRINT, Saxoprint and Viaprinto sales platforms. In 1961 CEWE was founded by Senator h. c. Heinz Neumüller. The company went public under the leadership of Hubert Rothärmel in 1993. CEWE Stiftung & Co. KGaA is listed on the SDAX.

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Language:	English
Company:	CEWE Stiftung & Co. KGaA
	Meerweg 30-32
	26133 Oldenburg
	Germany
Phone:	+49 (0)441 40 4-1
Fax:	+49 (0)441 40 4-42 1
E-mail:	IR@cewe.de
Internet:	www.cewe.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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281951  13.08.2014