CEWE on track to reach targets after solid third quarter
Europe’s leading photofinisher CEWE Stiftung & Co. KGaA announced third-quarter sales increased by 8.9% to 423.2 million euros, with strong growth in its key CEWE Photobook category. The company narrowed its third-quarter loss to -0.6 million euros, 73% improvement from the 2.4 million euros quarterly loss the prior year.
“The first three quarters exceeded our expectations, since our core business segment of photofinishing in particular is growing strongly. We are well-prepared for the anticipated seasonal peak in the fourth quarter,” emphasizes Dr. Christian Friege, CEO.,
Company management said the Christmas season contributes to the entire amount of annual net income, and announced the following targets: Group turnover is to increase to a range between 675 and 710 million euros, Group EBIT is to be in a corridor of 51 to 58 million euros, EBT between 50.5 and 57.5 million euros and after-tax earnings between 35 and 39 million euros.
Photofinishing growth continues at a double-digit pace, with nearly 13% growth to 316.9 million euros, driven in part by CEWE Photobook sales of 3.97 million units through the first three quarters of the year. The 60 millionth CEWE Photobook was also delivered in the quarter to a customer in Austria.
In a difficult commercial printing market, CEWE was able to increase its sales in this business segment for the first three quarters, by 2.8% to 75.1 million euros (Q1-3 2018: 73.0 million euros). Commercial online printing improved its contribution to consolidated income overall in the first three quarterly periods, by a respectable 1.3 million euros, with EBIT at -2.3 million euros (Q1-3 2018: -3.6 million euros).
Retail hardware sales will be further reduced as scheduled on the basis of the focus on photofinishing business and of abandoning low-margin camera business. In the first three quarters, this line of business, at 31.2 million euros, fell short of the same period of the previous year by 10.9% (Q1-3 2018: 35.1 million euros). In spite of a significant reduction in sales, the retail contribution to earnings was maintained at the same level as that of the previous year, with EBIT at -0.77 million euros (Q1-3 2018: -0.79 million euros).
“Our customers appreciate the individuality just as much as the feel of the surface of our products – and not least of all, they also appreciate our perfect service,” says Dr. Friege. “With the current financial year developing so positively, we expect Christmas business that ensures that we once again meet all our corporate targets. Besides, given the good run-up period, we only need earnings to grow by 0.5 million euros in the fourth quarter in order to actually reach the top end of 58 million euros in our EBIT target corridor
Earnings per business segment in Q3 and the first nine months of 2019
| CEWE | Unit | Q3 2018 | Q3 2019 | Q1-3 2018 | Q1-3 2019 |
| (1) Photofinishing | |||||
| Photos | in million units | 513.7 | 549.6 | 1,412.0 | 1,508.9 |
| CEWE PHOTOBOOK | in thousand units | 1,322.7 | 1,406.9 | 3,691.7 | 3,972.8 |
| Turnover | in millions of euros | 100.5 | 116.2 | 280.8 | 316.9 |
| EBIT | in millions of euros | 2.6 | 1.4 | 2.2 | 3.2 |
| Purchase price allocation effects | in millions of euros | -0.6 | -0.7 | -1.6 | -1.8 |
| Revenue from the operation in Nuremberg | in millions of euros | 1.2 | – | 1.2 | – |
| Non-recurring costs for the presentation at photokina | in millions of euros | -1.3 | – | -1.3 | – |
| EBIT before one-off effects | in millions of euros | 3.3 | 2.1 | 3.9 | 5.0 |
| (2) Retail | |||||
| Turnover | in millions of euros | 11.8 | 10.2 | 35.1 | 31.2 |
| EBIT | in millions of euros | -0.1 | -0.1 | -0.8 | -0.8 |
| (3) Commercial Online-Print | |||||
| Turnover | in millions of euros | 23.9 | 24.8 | 73.0 | 75.1 |
| EBIT | in millions of euros | -1.8 | -0.8 | -3.6 | -2.3 |
| Purchase price allocation effects | in millions of euros | -0.2 | -0.1 | -0.7 | -0.5 |
| LASERLINE integration costs | in millions of euros | -0.3 | – | -0.8 | – |
| EBIT before one-off effects | in millions of euros | -1.2 | -0.7 | -2.0 | -1.8 |
| (4) Other | |||||
| Turnover | in millions of euros | 1.0 | 1.4 | 2.8 | 4.0 |
| EBIT | in millions of euros | -0.7 | -0.3 | -1.7 | -1.5 |
| CEWE Group | Unit | Q3 2018 | Q3 2019 | Q1-3 2018 | Q1-3 2019 |
| Turnover | in millions of euros | 136.2 | 151.2 | 388.8 | 423.2 |
| EBIT | in millions of euros | 0.6 | 0.2 | -2.4 | -0.6 |
| One-off effects | in millions of euros | -1.2 | -0.8 | -3.2 | -2.3 |
| EBIT before one-off effects | in millions of euros | 1.9 | 1.0 | 0.8 | 1.7 |
| EBT | in millions of euros | 0.4 | -0.3 | -2.6 | -1.4 |
| Earnings after tax | in millions of euros | 0.4 | 0.5 | -1.5 | 0.1 |
Notes to the “Earnings by Business Segment” chart
(1) Photofinishing: Production and sale of photo products such as CEWE PHOTOBOOKS, CEWE CARDS, CEWE CALENDARS, CEWE WALL ART and individual (analogue and digital) photos as well as other photo products
(2) Retail: Trading in photo hardware, such as cameras and lenses, in Norway, Sweden, Poland, the Czech Republic and Slovakia
(3) Commercial Online-Print: Production and sale of commercial print products in the online printing portals, e.g. CEWE-PRINT.de, SAXOPRINT, Viaprinto and LASERLINE