CEWE reports “stable” first-quarter results

GaryPageau

Oldenburg-based photo printer CEWE Stiftung & Co. KGaA reported first-quarter growth, despite the impact of the coronavirus pandemic. Sales increased 4.1% over that of the same quarter of the previous year, to 144.8 million euros (Q1 2019: 139.2 million euros). At 1.8 million euros, EBIT for the first quarter only just falls short of the same quarter of the previous year (Q1 2019: 2.3 million euros) despite the impact of the coronavirus crisis.

With growth at 10.8%, photofinishing sales increased to 114.7 million euros (Q1 2019: 103.5 million euros), the company said. Besides organic growth and the increase resulting from the WhiteWall acquisition, the “stay-at-home” effect, which began at the end of March, also contributed to this increase in turnover, the release said. Conversely, the commercial online printing and retailing segments, on the were affected by the coronavirus shutdown, reporting a 10.5% decline in turnover, to 22.6 million euros.

Dr. Christian Friege

“The strong performance of our core business shows just how resilient we are in terms of photofinishing,” says Dr. Christian Friege, Chairman of the CEWE Stiftung & Co. KGaA Board of Management. “We are, however, currently not in a position to reliably forecast what impact the coronavirus will have on our business in the coming few months. We can see the challenges and we have handled them well: CEWE is stable and very soundly positioned.”

The increase in online business with photo products had a particularly positive effect on earnings in the business segment of photofinishing, with the CEWE PHOTOBOOK continuing to increase in the first quarter, achieving a rise of 2.2% and sales totaling 1.36 million books in the quarter.

Commercial online printing has been appreciably affected by the coronavirus crisis, with the decline in business activity in general also having a marked effect on demand for print products such as printed advertising material, the company said.  Until the end of February – prior to the coronavirus shutdown – CEWE had still reported slight, single-digit growth in business-print turnover.

Sales in the retail division have been scheduled to be in decline anyway through consciously abstaining from the low-margin business. Yet as a result of the extreme impact of the pandemic on retail business overall, the decline of 27.5% to 7.5 million euros against that of the previous year is showing itself to be more pronounced than the company had thought, according to CEWE.

“The situation is completely new and there are no comparative figures,” explains Dr. Christian Friege. “We are convinced that our online photo products, which can be delivered by mail, will help us greatly in weathering the crisis until retail business in stores has returned to normality. CEWE is in a stable position. But we are currently not able to put a reliable figure onto just how earnings will look.”

An overview of Q1 2020 results

CEWE business segments Unit Q1 2019 Q1 2020 Diff. % Diff. abs.
(1) Photofinishing
Photos m. photos 506.3 508.1 0.4% 1.8
CEWE PHOTOBOOK m. books 1.3 1.4 2.2% 0.0
Turnover EUR m. 103.5 114.7 10.8% 11.2
EBIT EUR m. 3.0 3.3 10.4% 0.3
Purchase price allocation effects EUR m. -0.6 -1.1 — —
EBIT before one-off effects EUR m. 3.6 4.4 23.1% 0.8
(2) Retailing
Turnover EUR m. 10.4 7.5 -27.5% -2.9
EBIT EUR m. -0.4 -0.5 -39.4% -0.1
(3) Commercial Online Printing
Turnover EUR m. 25.2 22.6 -10.5% -2.7
EBIT EUR m. -0.4 -0.8 -115% -0.4
Purchase price allocation effects EUR m. -0.2 -0.1 — —
EBIT before one-off effects EUR m. -0.2 -0.7 -255% -0.5
(3) Other
Turnover EUR m. 1.6 1.3 27.1% 0.3
EBIT EUR m. -0.2 -0.3 52.4% 0.2
CEWE Group Unit Q1 2019 Q1 2020 Diff. % Diff. abs.
Turnover EUR m. 139.2 144.8 4.1% 5.6
EBIT EUR m. 2.3 1.8 -22.7% -0.5
Total one-off effects EUR m. -0.8 -1.2 — —
EBIT before one-off effects EUR m. 3.1 3.0 -0.4% 0.0
EBT EUR m. 2.1 1.5 -26.2% -0.5
Earnings after tax EUR m. 1.1 1.7 47.1% 0.5