- Turnover increases in the first half of the year 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
CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) sees itself right on track to reach all its scheduled 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). In spite of the transaction costs incurred as a result of taking over wall art specialist 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 to increase to an amount in the range of 675 to 710 million euros in 2019 (2018: 653.3 million euros), Group EBIT is 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 indicators thus all exceed 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 Stiftung & Co. KGaA Board of Management. More than anything else, turnover generated in the most important business segment of photofinishing has increased considerably, even though the beginning of the hot summer season sees customers taking many photos, but tending more to using them to order photo products in the second half of the year. The WhiteWall takeover, which has already been concluded, has been making a positive contribution to turnover since as early as June. “Just like other recent acquisitions, WhiteWall is likely to have a positive effect on Group profits,” Dr. Friege emphasises.
Photofinishing: mid-year turnover exceeds 200 million euros for the first time
The business segment of photofinishing developed well and, with an increase in turnover of 11.3 %, to 200.8 million euros, has for 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 so many copies been sold in the first half of a year. The trend for the other photo products, such as CEWE WALL ART, CEWE CALENDARS, CEWE CARDS or individualised smartphone covers, was nevertheless also good in the first half-year period, with EBIT for the business segment of photofinishing improving in the first six months of 2019 by 2.2 million euros to 1.8 million euros (2018: – 0.4 million euros). “We are looking with optimism towards the second half of the year for the photofinishing unit with this good result,” emphasises Dr. Christian Friege. Demand for added-value products is generally far stronger in the second half of the year – in particular in the fourth quarter, in which, as a rule, almost the full amount of annual profits is generated. He continues: “The good result for the half-year period is a sound basis for the second half of the year.”
Commercial online printing: High price pressure prevents even stronger growth
In the first half of 2019, CEWE increased turnover in commercial online printing moderately by 2.4 % to 50.2 million euros (2018: 49.1 million euros). Considerable price pressure prevented even stronger growth, in particular for LASERLINE, but also for business in general. EBIT amounted to – 1.4 million euros, thus improving over that of the previous year (HY1 2018: – 1.8 million euros). UK business continues to be dampened by a Brexit that is showing itself to be increasingly tangible. “We are absolutely satisfied at being able to report moderate growth rates in spite of this difficult environment. However, in our opinion, forecasts for the online printing market in Europe, with the exception of the UK, remain positive. We are also brilliantly positioned with our highly- efficient online printing enterprise Saxoprint in Dresden. We thus expect to see turnover continuing to develop positively in the second half of the year,” says Christian Friege.
CEWE RETAIL: focus on photofinishing products continues
CEWE consciously and consistently does without low-margin hardware sales in retailing, choosing instead to focus strongly on the sale of photofinishing products. Just like it has already done in previous years, this approach continued to reduce strategic and seasonal hardware sales in retailing. 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 spite of 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. The fourth quarter is also typically significant for earnings in photo hardware retailing.
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 have made the CEWE Photo Award “Our World is Beautiful” the biggest photographic competition in the world. At the end of September a top-class international jury – headed by renowned French photographer Yann Arthus-Bertrand as Chairman – will choose the winner in the Museum of Natural History in Vienna.
CEWE received the TIPA Award (Technical Image Press Association Award) for its new product “hexxas” in April 2019 – making it the third time in total that the company had won the award, one of the most prestigious distinctions in the industry. Collages or combinations can be attractively presented in an unusual format with the help of “hexxas” hexagonal photo tiles. “Proof of our innovative strength is given in the fact that hexxas originated from an in-house hackathon. Christian Friege is delighted that a team of CEWE employees was “agilely” set up and went on to personally develop the new product. The CEWE Group now has altogether five awards with the two TIPA distinctions already received by WhiteWall.
CEWE remains soundly financed – substantial increase in the value of the company
With a capital ratio of 46.4 % as at 30 June 2019, CEWE
remains soundly financed. On excluding the lease accounting newly introduced
according to IFRS 16 and the related balance sheet extension, the capital
ratio, in a comparison with the previous year, is even at a strong 53.3 % (30
June 2018: 54.9 %). CEO Christian Friege: “We are growing both organically
and also through our carefully planned acquisitions, such as the recent
acquisition of WhiteWall. We will also be using this strategy in future to
pursue out goal of continuing to raise the value of the company.
Earnings per business segment in the second quarter and first half of 2019
|CEWE||Unit||Q2 2018||Q2 2019||HY1 2018||HY1 2019|
|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|
|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|
|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
The CEWE Group turnover described here and the Group EBIT have been shown excluding Group company futalis, which is held for sale and is nevertheless 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 finalisation of the purchase price allocation for Cheerz and Laserline, the companies acquired in 2018.
Notes to the “Earnings by Business Segment” chart
- Photofinishing: Production and sale of photo products such as CEWE PHOTO BOOKS, CEWE CARDS, CEWE CALENDARS, CEWE WALL PICTURES and individual (analogue and digital) photos as well as other photo products.
- Retailing: Trading in photo hardware, such as cameras and lenses, in Norway, Sweden, Poland, the Czech Republic and Slovakia.
- Commercial online printing: Production and sale of commercial print products in the online printing portals, e.g. CEWE-PRINT.de, SAXOPRINT, Viaprinto and LASERLINE.