CEWE takes steps to mitigate COVID-19 fallout

Due to the coronavirus pandemic, Europe’s leading photo printer CEWE-Stiftung & Co. KGaA announced cost-reduction measures, submit a notification of short-time work (staff pay reductions) as of April 1, 2020, applying to all three business segments: Retail, Photofinishing, and Commercial Online-Print. The proportion of short-time work may vary quite distinctly in the different corporate and operative divisions, the company said. According to the statement, the CEWE board of management and employee representatives concluded agreements enabling capacities to be specifically and flexibly adapted in the event of a lack of work as a result of the coronavirus crisis. In the segments concerned, CEWE backs up the income of employees beyond the scope of legal requirements in many cases, the company added. Business is wildly fluctuating.

CEWE had already taken extensive preventive measures in all the segments of the company a few weeks ago, to protect the health of staff members, and has constantly stepped up these measures. For example, many employees are working in their home office, stringent restrictions on traveling are in place and comprehensive measures have been implemented to ensure that people in the company maintain a physical distance. To become more independent of government regulations on shop opening times, the company has also taken measures in all its divisions to be able to take in customers’ orders online and deliver the products directly to customers by mail order.

In late March, the company reported full-year results for 2019, included a record 6.6 million CEWE Photobooks sold, but the on-going coronavirus pandemic has clouded the forecasts for the year.

In the financial year of 2019, CEWE increased its sales by 10.1% to 714.9 million euros, up from 649.3 million euros, exceeding its own 675 to 710-million euro target. The biggest growth driver was the main business segment of photofinishing, which saw turnover growing by 13.8% to a current 568 million euros. At 57.8 million euros (2018: 55.7 million euros), operative earnings (EBIT) reached the upper end of the target corridor – in spite of provisions previously announced for LASERLINE improvement measures in commercial online printing already having been incorporated in an amount of 5 million euros.

Given this stable positive development trend, the Board of Management and the Supervisory Board is now in a position to propose to the Annual General Meeting an eleventh consecutive increase in dividends: from 1.95 in the previous year to 2.00 euros. With a sound balance sheet and a capital ratio of 53.6% (prior to IFRS 16 lease accounting), CEWE considers itself to be equipped for the potential impact of the global corona crisis on the Group’s own business development.

“Customer satisfaction and customer loyalty are a sound foundation for CEWE, a foundation on which we develop the value of our company,” ” says Dr. Christian Friege, CEO, CEWE Stiftung & CO. KGaA, “And this is why we intend to do everything to continue to delight people for the CEWE product world.”

The development of the company’s most important business segment of photofinishing was extremely positive. CEWE sold altogether more than 2.4 billion photos – an increase of 7.9%, hence exceeding the target corridor of 2.22 to 2.26 billion photos. 

The overall positive trend towards high-quality photo products is reflected in our turnover per photo: at 23.65 eurocents, CEWE achieved another increase here: a plus of 5.5% (2018): 22.42 eurocents). The company showed another clear increase in Q4, with sales exceeding that of the same quarter of the previous year by 15.0% to amount to 251.1 million euros (2018: 218.3 million euros).