CEWE: clear boost in fourth-quarter earnings expected again

CEWE: clear boost in fourth-quarter earnings expected again

- Seasonal shift towards Q4 continues

- Turnover up to Q3 has already risen by 4.3 percent to 340.5 million euros

- Online printing is the growth driver: +45.3% to 41.6 million euros in Q1-3

- Change in the legal form will generate an additional contribution to earnings of 3.7 million euros in 2013.

Oldenburg, 7 November 2013. CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) is fully in line with targets in the first nine months of 2013; on the basis of this, the company expects to see a record EBIT in the amount of at least 31 million euros (2012: 28.9 million euros). In 2008, EBIT amounted to 8.8 million euros in the fourth quarter, and it has risen consistently since then. Despite this ongoing seasonal shift in high-yield photofinishing in the fourth quarter, the CEWE turnover - in particular due to the rapid pace of expansion in the online printing segment (+45.3% to 41.6 million euros) - grew by as much as 4.3% to 340.5 million euros in the first three quarters of the current business year. 'In the first three quarters of the year, we exploited the photofinishing earning power to significantly reinforce our position in online printing, and at the same time prepare ourselves intensively for the expected seasonal peak in the fourth quarter. In the period from October to December we will probably generate more than a third of our annual sales and our entire annual net income,' says Dr. Rolf Hollander, Chairman of CEWE Stiftung & Co. KGaA. The large share of very high-quality photo products in Christmas business now means that the biggest income by far is generated in the fourth quarter. After EBIT of -4.1 million euros in the first three quarters, the Board of Management is confirming its target of achieving turnover in the amount of 510 to 530 million euros (+1.3% bis +5.3%), and EBIT of 27 million to 33 million euros. Earnings after tax will in this case also profit from the tax-related advantages of the change in the legal form to become a German limited joint-stock partnership (KGaA). CEWE thus anticipates a positive effect, in particular a tax effect, in the amount of 3.7 million euros.

Ongoing trend toward high-quality photos
In the first nine months of the year, turnover in the photofinishing segment, at 222.4 million euros (Q1-3 2012: 223.4 million euros), slightly exceeds the expected range. The ongoing trend towards high-quality photo products counteracted the seasonal shift and the resulting low volumes, an example being the CEWE PHOTO BOOK: the value per photo rose by 5.7 % to 14.02 eurocents per photo (Q1-3 2012: 13.27 eurocents per photo).

Online printing is the growth driver
Investments in expanding online printing and establishing a growing customer base increased turnover in this segment by 45.3% to 41.6 million euros. At the same time, more marketing efficiency in the third quarter improved earnings for the segment from -3.5 million euros in the previous year to -3.2 million euros. In the retail segment, which slightly increased turnover in the first nine months to 76.5 million euros (+ 2.7%), increased investments in the market presence of the company - such as investments in new flagship stores - resulted in negative EBIT in the amount of -1.2 million euros (Q1-3 2012: 0.2 million euros). 'With new products, investments and marketing activities, we have met the requirements to achieve good fourth-quarter earnings in all three business segments,' Dr. Hollander points out.

Photofinishing continues to enhance earning power in spite of the seasonal shift
The main business segment of photofinishing even continued to enhance its operative earning power in the negatively affected first three quarters, in spite of the persistent seasonal shift to the fourth quarter: EBIT before restructuring rose to 3.7 million euros in the first nine months of 2013, an improvement of 0.4 million euros over the same period of the previous year. CEWE is exploiting the increasing contributions to earnings from the company's core business of photofinishing in order to continue to expand the business segment of online printing through intensive marketing activities.

Capital ratio increases to 39% - total return of 26.2% for shareholders
The cash flow from operative business developed extremely positively, increasing by 4.4 million euros, and so did the free cash flow, which is 5.1 million euros above the adjusted figure for the previous year. On a 12-month basis, the Return on Capital Employed (ROCE) reached 13.2% in spite of considerable extra expenses, and the capital ratio rose in spite of a dividend payment and higher pension provisions- due to a change in IFRS regulations - to a sound 39% (30 September 2012: 37.2%). On the basis of the positive share-price development in the first nine months of 2013 (+21.5% to 37.71 euros) and the dividend in the amount of 1.45 euros per share, the total return for shareholders amounted to 8.12 euros. This is equivalent to a return of 26.2% in relation to the 2012 closing share price (EUR 31.04).

Board of Management confirms annual targets
The Board of Management is confirming its growth targets for 2013 on the basis of the development in the first nine months of the year: full-year turnover in the growth sector of online printing is to increase by 40%, to 60 million euros, with Group turnover rising by 1 to 5 %, to 510 to 530 million euros. Due to investments in online printing, the aim for EBIT is in the range of 27 to 33 million euros in 2013, and 2.44 to 3.06 euros is targeted for earnings per share. With its brands CEWE PHOTO BOOK, CEWE CALENDAR, CEWE CARDS (Christmas cards), CEWE WALL PICTURES and other photo gifts, CEWE is excellently positioned for Christmas business in the vital fourth quarter.
Earnings by operating area:

Notes to the 'Earnings by Operating Area' chart

(1) Photofinishing: Production and sale of photo products such as the CEWE PHOTO BOOK, CEWE CARDS,
CEWE CALENDARS, CEWE WALL PICTURES and individual (analogue and digital) photos as well as other photo products.

(2) Retailing: Retail in Norway, Sweden, Poland, the Czech Republic and Slovakia with photo hardware such as cameras and lenses

(3) Online printing: Production and sale of commercial print products in the online printing portals, e.g. CEWE-PRINT.de, saxoprint.de and viaprinto.de

2013 targets and a comparison with the previous year

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, e-mail: IR@cewe.de

Internet: www.cewe.de , www.cewe-fotobuch.de , www.cewe-print.de , www.viaprinto.de , www.saxoprint.de

Now in the app stores: The CEWE Investor Relations app for your iPad(R) or Android tablet, including annual reports and quarterly reports as well as sustainability reports.

Financial schedule:
12/13 November 2013 German Equity Forum, Frankfurt
27 November 2013 Road show in Edinburgh
28 November 2013 Road show in Dublin


About CEWE: The photo and online print service company CEWE, with 11 highly-technical production operations and a staff of around 3,100 employees in 24 European countries. In 2012 CEWE delivered around 2.5 billion prints, 5.6 million CEWE PHOTO BOOKS and photo gift articles to more than 34,000 retail partners to generate consolidated turnover of 503.3 million euros. CEWE is a 'first mover' in the introduction of new digital technologies and products. In the new business segment of online printing, printed material for advertising is marketed through the sales platforms CEWE-PRINT.de , saxoprint and viaprinto. CEWE celebrated its 50th company anniversary in 2011. In 1961 CEWE was founded by Senator h. c. Heinz Neumüller. The company went public under the leadership of Hubert Rothärmel in 1993. CEWE Stiftung & Co. KGaA is listed on the SDAX.