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CEWE sees sales increase for first half of 2019, lauds WhiteWall contribution

Leading European photo personalization service CEWE Foundation & Co. KGaA announced first-half sales increased 7.6 percent, with the core photofinishing segment growing 11.3% to 200.8 million euros and CEWE Photobook sales increasing by 8.3% to 2.57 million copies sold. The company management also added that acquisition of WhiteWall, the premium wall-art specialist, is on pace to contribute meaningfully to the company.

Dr. Christian Friege, CEO of CEWE.

“The first half of 2019 is CLEARLY in line with our forecasts,” says Dr. Christian Friege, chairman of the CEWE Foundation & Co. KGaA Board of Management. “Just like other recent acquisitions, WhiteWall is likely to have a positive effect on group profits.

In a call with financial analysts, Friege discussed how WhiteWall will fit in with CEWE, even though it was only included in one month of results:  “As of the 1st of June, WhiteWall is accounted for in our numbers…And we see that WhiteWall, with the focus on gallery quality, is a very good extension of our photofinishing business. We are focusing on professionals. We are focusing on semi-professionals, and we are focusing on a clientele on customers that I do not think we would ever have been able to reach with the CEWE brand that is so strongly rooted in our partnerships with the trade partners like dm, like Rossman, like Kaufland,  like Saturn, etc. So we cannot stretch a brand that is so deeply rooted in these partnerships to professionals and to people who actually seek gallery quality.”

Friege emphasized WhiteWall is an extension of CEWE’s business, not just a way to consolidate production.

“CEWE will stay CEWE,” he declared. “We will work with the same customers and with the same production for our CEWE clientele. And WhiteWall stays WhiteWall. We will keep the range of products that we have in the past. We’ll keep the brand. We’ll keep the distribution. We will keep all of those things in place. And we will seek the synergies outside of what is actually visible at the end of the day for our customers. And so we believe that WhiteWall will actually strengthen CEWE over the next years.”

Friege also mentioned strong marketing efforts boosted CEWE Photobook volume to record levels:

We increased the number of CEWE PHOTOBOOKs in Q2 by 9.9% and that clearly exceeds our expectation,” he said. “We are very happy about the fact our marketing efforts are focused on the CEWE PHOTOBOOK, all the sales efforts that we have around this key product for us are actually fruitful efforts. We never have we sold more CEWE PHOTOBOOKs in the first half of a year, 2.566 million than in 2019.”

He added, later in the call, the company has been able to maintain average selling prices without a lot of discounts.

The full press release is below:

CEWE with another increase in turnover in the first half of 2019

CEWE with another increase in turnover in the first half of 2019

– Turnover increased by 7.6% and EBIT is improved by 2.2 million euros

– The core business segment of photofinishing grows by 11.3% to 200.8 million euros

– CEWE PHOTOBOOK sales increase by 8.3% to 2.57 million copies sold

– EBIT annual target of up 58 million euros confirmed for 2019

Oldenburg, 13 August 2019. CEWE Foundation & Co. KGaA since itself right on track to reach its annual targets for 2019 after a positive first half-year. Group turnover, at 272.0 million euros, is 7.6% higher than turnover generated in the same period of the previous year (HY1 2018: 252.7 million euros). WhiteWall, EBIT improved clearly by 2.2 million euros to round off at – 0.9 million euros (HY1 2018: – 3.0 million euros) in what is traditionally a negative first half-year for seasonal reasons. The mid-year figures confirm the forecast made by the Board of Management for the current financial year: Group turnover is increasing to 675 to 710 million euros in 2019 (2018: 653. 3 million euros), Group EBIT to be in a corridor of 51 to 58 million euros, EBT in the range of 50.5 to 57.5 million euros, and after-tax earnings in the range of 35 to 39 million euros. Important Factors for All those of the previous year.

CEWE CLEARLY on track to confirm forecast

“The first half of 2019 is CLEARLY in line with our forecasts,” says Dr. Christian Friege, Chairman of the CEWE Foundation & Co. KGaA Board of Management. More than anything else, but the beginning of the hot summer season sees more photos, but the second half of the story goes on year. The WhiteWall takeover, which has already been completed, has been making a positive contribution to the turnover since early June. “Just like other recent acquisitions, WhiteWall is likely to have a positive effect on group profits,” Friege emphasizes.

Photofinishing: mid-year turnover costs 200 million euros for the first time

The business segment of photofinishing has grown and has increased in turnover of 11.3%, to 200.8 million euros, the first time exceeded the 200 million euro mark in a first half-year period (2018: 180.3 million euros). The CEWE PHOTOBOOK, which achieved a pleasing increase of 8.3% in sales, played a decisive role here. Never before have you been in the first half of a year. CEWE WALLS, CEWE CALENDARS, CEWE CARDS or individualized smartphone covers, which are also good in the first half-year period, with EBIT for the business segment of photofinishing improving in the first six months from 2019 by 2.2 million euros to 1.8 million euros (2018: – 0.4 million euros). ”

Commercial online printing: High price

In the first half of 2019, CEWE increased the turnover in commercial online printing moderately by 2.4% to 50.2 million euros (2018: 49.1 million euros). LASERLINE, but also for business in general. EBIT to – 1.4 million euros, thus over the previous year (HY1 2018: – 1.8 million euros). UK business continues to be dampened by a Brexit. However, in our opinion, forecasts for the online printing market in Europe, with the exception of the UK, remain positive, so we are brilliantly positioned with our highly-efficient online printing enterprise Saxoprint in Dresden.

CEWE RETAIL: focus on photofinishing products continues

CEWE consciously and consistently does not include low-margin hardware sales in retailing, rather than focusing on the sale of photofinishing products. Just like it has been done in previous years, this approach continues to reduce and retail sales. In the first half of 2019, turnover reached 21.0 million euros, a reduction of 9.7% against the previous year (2018: 23.3 million euros). In this decline in turnover, EBIT was consistent with the previous year’s level, at -0.7 milion euros (2018: 0.7 million euros), in what is traditionally a negative first half-year for seasonal reasons. Retailing does, however, remain a growing sales channel for the photofinishing products reported in the business segment of photofinishing.

Biggest photographic competition in the world, “Our World Is Beautiful” – third TIPA Award for CEWE

CEWE set a new record in the first half of 2019: the 448,152 international entries submitted the CEWE Photo Award “Our World is Beautiful” photographic competition in the world. Yann Arthus-Bertrand the Chairman – wants to be the winner of the Museum of Natural History in Vienna.

CEWE received the TIPA Award for its new product “hexxas” in April 2019 – making it the third time in the company to win the award, one of the most prestigious distinctions in the industry. Collages or combinations may be attractively presented in an unusual format with the help of “hexxas” hexagonal photo tiles. Christian Friege is delighted to be a team of CEWE employees what he says: “The CEWE Group TIPA distinctions already received by WhiteWall.

CEWE remains soundly financed – with a capital ratio of 46.4% as at 30 June 2019, CEWE remains soundly financed. According to IFRS 16 and the related balance sheet extension, the capital ratio, in a comparison with the previous year, is 53.3% (30 June 2018: 54.9%). CEO Christian Friege: “We are growing both organically and through our carefully planned acquisitions, so we want to use this strategy in the future acquisition of WhiteWall.

Earnings per business segment in the second quarter and first half of 2019

CEWE Unit Q2 2018 Q2 2019 HY1 2018 HY1 2019
(1) Photofinishing
Prints in million units 432.4 453.0 898.3 959.3
CEWE PHOTOBOOK in thousand units 1,121.1 1,232.1 2,369.1 2,566.0
turnover millions of euros 85.9 97.2 180.3 200.8
EBIT millions of euros -1.8 -1.2 -0.4 1.8
Purchase price allocation effects millions of euros -0.6 -0.6 -1.0 -1.2
EBIT before one-off effects in millions of euros -1.2 -0.6 0.7 3.0
(2) Retailing
turnover in millions of euros 12.4 10.6 23.3 21.0
EBIT in millions of euros -0.2 -0.3 -0.7 -0.7
(3) Commercial Online Printing
turnover in millions of euros 24.7 25.0 49.1 50.2
EBIT in millions of euros -1.5 -1.1 -1.8 -1.4
Purchase price allocation effects in millions of euros -0.3 -0.1 -0.5 -0.3
LASERLINE integration costs in millions of euros -0.3 -0.5
EBIT before one-off effects in millions of euros -0.9 -0.9 -0.9 -1.1
(4) Other
turnover in millions of euros 1.0 1.3 1.8 2.6
EBIT in millions of euros -0.6 -0.9 -1.0 -1.2
CEWE Group Unit Q2 2018 Q2 2019 HY1 2018 HY1 2019
turnover in millions of euros 122.9 132.8 252.7 272.0
EBIT in millions of euros -3.6 -3.2 -3.0 -0.9
One-off effects in millions of euros -1.2 -0.7 -2.0 -1.5
EBIT before one-off effects in millions of euros -2.4 -2.4 -1.0 0.6
EBT in millions of euros -3.2 -3.2 -3.0 -1.2
Earnings after tax in millions of euros -2.6 -2.1 -2.7 -1.0

Rounding differences may occur.

Notes to reported figures
Group business futuris, which is still included in the “Other” business segment and as a “discontinued operation” in the segment reports for the current reporting period and for the figures for the previous year Pursuant to IFRS 5.

Figures for the previous year have been adjusted due to the finalization of the purchase price allocation for Cheerz and Laserline, the companies acquired in 2018.

Notes to the ” Earnings by Business Segment “chart
(1) Photofinishing:
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 and lenses, Norway, Sweden, Poland, the Czech Republic and Slovakia.
(3) Commercial online printing: Production and sale of commercial print products in the online printing portals, eg, SAXOPRINT, Viaprinto and LASERLINE.

About CEWE:

The innovative photo and online print service company, with fourteen highly-technical production operations and a staff of around 3,900 employees in 26 European countries, are both market and technological leaders. In 2018 CEWE delivered around 2.2 billion prints, 6.2 million copies of CEWE PHOTO BOOK and more than 20,000 retail partners to generate Group turnover of 653.3 million euros. The company is constantly giving new impulses in the photographic industry. 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 platform of, SAXOPRINT, viaprinto and LASERLINE. Founded by Senator Heinz Neumüller in 1961, CEWE has been listed on the stock exchange since 1993 and is an SDAX member.


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