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CEWE raises its income forecast

DGAP-News: CEWE Stiftung & Co. KGaA / Key word(s): 9-month figures

2016-11-10 / 07:00
The issuer is solely responsible for the content of this announcement.

CEWE raises its income forecast

- Nine-month Group turnover increases by 7.7 % to 365 million euros

- After three quarters of the year, Group EBIT already at 4.1 million euros (Q1-3 2015: -4.4 million euros)

- Strong seasonal peak expected in Q4 with CEWE PHOTO BOOK and photo gifts

- Improvement in earnings from all three business segments

Oldenburg, 10 November 2016. CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) is raising its income forecast for 2016 by 2 million euros against the background of the sound development of turnover and earnings in the first nine months of the current business year. Instead of the previous 38 to 44 million euros, the Board of Management now expects EBIT in the range of 40 to 46 million euros. The EBT is now to increase to 39 to 45 million euros and after-tax earnings to 29 to 33 million euros. Turnover in 2016 could also be higher than the currently assumed 555 to 575 million euros. In the third quarter of 2016, with turnover at 128.6 million euros, CEWE achieved an increase of 2.5 % (Q3 2015: 125.5 million euros). On the inclusion of the positive one-off effects in the amount of 2.1 million euros, reported EBIT in the third quarter amounted to 4.5 million euros (Q3 2015: 2.7 million euros).

CEWE PHOTO BOOK and other photo gifts increase earnings
CEWE generated profits as early as after the first three quarters for the first time in four years. With an increase of 7.7 % in Group turnover, to 365 million euros, the company generated Group EBIT of 4.1 million euros in the first nine months of the year (Q1-3 2015: -4.4 million euros). However, in this case it must be taken into account that around 2.7 million euros of the EBIT improvement are based on non-recurring, one-off effects from the current and the past business year. "The CEWE PHOTO BOOK and other photo gifts are ensuring that development is positive in 2016 as well, with CEWE benefiting from a strong brand and from numerous test wins by the CEWE product family, which we consistently supplemented with many new products and user-friendly apps. We have also been offering the CEWE PHOTO BOOK and all the CEWE brand products with a neutral effect on climate since the third quarter. We are thus very well-prepared for the Christmas season. We are delighted that we also reached the break-even point in our strategic growth segment of commercial online printing in 2016," Dr. Rolf Hollander, CEWE Stiftung & Co. KGaA CEO, points out.

Photofinishing on target
In the first nine months of 2016, the business segment of photofinishing achieved turnover of 262.0 million euros - an increase of 9.3 % in comparison to the turnover for the previous year (Q1-3 2015: 239.6 million euros). The trend towards high-quality photo products continues to drive the development of turnover: in the first nine months of 2016, turnover per photo rose by 9.8 %, from 16.42 eurocents in the same period of the previous year to 18.04 eurocents, with the CEWE PHOTO BOOK, which has now achieved a supported brand awareness of 70 % in Germany, increasing by 4.6 % - even stronger than the forecast growth corridor of 1 % to 2 % for the full year of 2016. In the first nine months of 2016, CEWE improved the EBIT of 6.1 million euros reported for photofinishing by 5.2 million euros in a comparison with the previous year (Q1-3 2015: 0.8 million euros). Adjusted by one-off effects, the operative EBIT for the first three quarters of 2016, at 4.4 million euros, was around 3.1 million euros better than in the same period of the previous year (Q1-3 2015: 1.3 million euros).

Commercial online printing grows by 10.6 % and generates positive EBIT
In the first three quarters of the year, the growth segment of commercial online printing increased its turnover by 10.6 %, to 60.8 million euros. The pace of growth thus reached exactly the target rate for the year as a whole. At the same time the EBIT, at 0.5 million euros, was positive for the first time (Q1-3 2015: -2.5 million euros). In the isolated third quarter of 2016, commercial online printing achieved turnover of 19.7 million euros, an increase of 5.3 % (Q3 2015: 18.7 million euros), with EBIT improving slightly to -0.3 million euros (Q3 2015: -0.4 million euros). The period with the highest turnover is the fourth quarter in commercial online printing as well, the same as in photofinishing: many business customers get ready for their Christmas business in November, ordering more printed material for advertising. The growth investments essential for reinforcing the brand have had a strong impact on the Profit and Loss Account of this business segment in the past few years. CEWE used the earning power of the established core business segment of photofinishing to rapidly expand the promising growth segment of commercial online printing through intensive marketing, thus generating a growing customer base in commercial online printing on which the company will also be able to build in future. CEWE is now beginning to benefit from this move.

Retailing earnings again improved
Earnings generated by the retail business segment continue to develop positively: after -1.4 million euros in the previous year, the EBIT improved by 1.0 million euros to -0.4 million euros. The operative improvement amounted to 0.4 million euros before the restructuring costs incurred in the previous year. As expected, retail sales, at 40.2 million euros, were 7.6 % below the level of the previous year (Q1-3 2015: 43.5 million euros), with negative currency effects accounting for 1.8 million euros of the decline in turnover (particularly in Norway and Poland). In the first three quarters of the year, currency-adjusted turnover reached 42.0 million euros (a drop of 3.4 % against the same quarter of the previous year). Retail sales and earnings are also mainly generated with Christmas business in the fourth quarter. When taking a look at CEWE retailing overall, it must also be taken into account that the contribution of sales and earnings from the photofinishing range is reported in the photofinishing business segment.

ROCE increases to more than 20 %
The capital ratio rose by 4.9 percentage points to 57.2 % as at 30 September 2016 (30 September 2015: 52.3 %). Consolidated debts were reduced against those of 30 September 2015, by 15.2 million euros to 132.5 million euros. The ROCE, a benchmark for the return since 30 September 2015, improved very significantly from 15.9 % to 20.6 % due to the rise in the 12-month EBIT to 44.8 million euros. "Our sound financial position and our considerable earning power mean that we are still in a position to develop our new growth areas and to offer our shareholders an ideally growing dividend," explains CFO Dr. Olaf Holzkämper.
Earnings by business segment

CEWE Unit Q3 2015 Q3 2016 Q1-3 2015 Q1-3 2016
(1) Photofinishing          
Digital prints in m. units 534.0 509.4 1,402.9 1,408.2
Prints from films in m. units 23.4 19.1 56.2 44.5
Total prints in m. units 557.4 528.5 1,459.1 1,452.7
CEWE PHOTO BOOK th. books 1,383.0 1,357.2 3,662.8 3,831.7
Turnover in EUR m. 91.5 95.4 239.6 262.0
EBIT in EUR m. 3.8 5.6 0.8 6.1
Restructuring costs in EUR m. --- --- -0.4 -0.2
Proceeds from US internet activity in EUR m. --- --- --- 0.4
Goodwill depreciation in the UK in EUR m. --- --- --- -0.9
Disposal of the operation in
Graudenz, Poland
in EUR m. --- 0.3 --- 0.3
Initial supply for business partners in EUR m. --- 1.8 --- 2.1
EBIT before one-off effects in EUR m. 3.8 3.5 1.3 4.4
(2) Retailing          
Turnover in EUR m. 15.1 12.9 43.5 40.2
EBIT in EUR m. -0.1 0.0 -1.4 -0.4
Restructuring costs in EUR m. --- --- -0.6 ---
EBIT before one-off effects in EUR m. -0.1 0.0 -0.8 -0.4
(3) Commercial online printing          
Turnover in EUR m. 18.7 19.7 55.0 60.8
EBIT in EUR m. -0.4 -0.3 -2.5 0.5
CEWE Group          
Turnover in EUR m. 125.5 128.6 338.4 364.6
EBIT in EUR m. 2.7 4.5 -4.4 4.1
One-off effects in EUR m. --- 2.1 -1.0 1.7
EBIT before one-off effects in EUR m. 2.7 2.4 -3.4 2.3
EBT in EUR m. 2.5 5.1 -4.9 4.5
Earnings after tax in EUR m. 2.6 5.4 -3.5 4.8

Notes to the "Earnings by Business Segment" chart

(1) 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.
(2) Retailing: Trading in photo hardware, such as cameras or lenses in Norway, Sweden, Poland, the Czech Republic and Slovakia.
(3) Commercial online printing: Production and sale of the commercial print products of the online printing portals, e.g., Saxoprint and Viaprinto

Percentage deviations have all been calculated at the exact values.

Should you have any queries, please contact:
CEWE Stiftung & Co. KGaA, Axel Weber (Investor Relations)
Tel.: 0441 / 404 - 2288, Fax: 0441 / 404 - 421, Email:

Internet: , , , , ,

The CEWE apps are all available in the app stores: CEWE PHOTO WORLD, CEWE POSTCARD, CEWE SERVICE and other photo apps, and the CEWE Investor Relations app for iPad(c) or android tablets, with annual reports and quarterly reports, presentations and sustainability reports.

Financial schedule:
(insofar as already scheduled)

21-22 November 2016 German Equity Forum, Frankfurt
05 January 2017 Oddo Forum, Lyon
23 March 2017 Annual report and analysts' press conference, Frankfurt
23 March 2017 Publication of the 2016 Annual Report
29 March 2017 Bankhaus Lampe Deutschland Conference, Baden-Baden
11 May 2017 Publication of the 2017 Q1 interim report
31 May 2017 2017 Annual General Meeting, Weser-Ems-Halls, Oldenburg
10 August 2017 Publication of the 2017 H1 mid-year report
10 November 2017 Publication of the 2017 Q3 interim report

About CEWE: The innovative photo and online print service company CEWE, with twelve highly-technical production operations and a staff of around 3,400 employees in 24 European countries, is both market and technological leader. In 2015 CEWE delivered around 2.2 billion prints, 6.0 million copies of the CEWE PHOTO BOOK and photo gift articles to around 25,000 retail partners to generate consolidated turnover of 554.2 million euros. CEWE is continuously generating new impulses in the photographic industry with innovations for people who enjoy taking photos. In the new business segment of commercial online printing, printed material for businesses is marketed through the sales platforms, Saxoprint und Viaprinto. Founded in 1961 by Senator h. c. Heinz Neumüller, CEWE was taken to the stock exchange by Hubert Rothärmel in 1993. CEWE Stiftung & Co. KGaA is listed on the SDAX.

2016-11-10 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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