CeWe Color Holding AG: Preliminary Results 2006

CeWe Color Holding AG / Preliminary Results Ad hoc announcement according to § 15 WpHG transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- Ad hoc release CeWe Color opens up new growth potential - Targets for 2006 met – accelerated digital growth in the 4th quarter - For the first time ever, more digital photos than conventional photos will be sold in 2007 - Medium-term capital expenditure volume of EUR 150 – 200 million Oldenburg, 29 January 2007 – CeWe Color Holding AG (SDAX, ISIN DE 0005403901) generated accelerated digital growth during the final quarter of 2006, hence fulfilling projections for the year. During the business year ended the Group developed just over 2.9 billion colour prints and generated turnover of around EUR 400 million. Preliminary calculations show that earnings before tax amounted to EUR 21.1 million and capital expenditure was at EUR 32.5 million. The number of digital prints rose by 34.3 % to more than 1.1 billion prints. The fourth-quarter increase rate, at 41.7 %, far exceeded that of the annual average. Focussing on digital photo processing at an early stage – CeWe Color commenced with this in the early 90s – has played a major role in the success of the company. Most of the digital growth is generated by the placing of orders for digital photos in the Internet, showing growth rates of 59.3 % in 2006 as a whole and even 76.7 % in the fourth quarter. Whereas the first two quarters in the digital photo world generally lose share, the fourth quarter becomes more and more important due to the growing sales of photo books and photo fun products. The digital print percentage of colour prints including photo book prints amounted to 39 % in 2006 as a whole and 49 % in the fourth quarter. The Board of Management of CeWe Color Holding AG expects the number of digital photos produced to exceed the number of prints from films for the first time ever in the 2007 business year. This means that the turning point will have been reached. The sum total of colour prints is likely to be reduced by around 10 % during the coming year as a result of a decline in the number of prints from films amounting to approximately 32 %. On the other hand, the decline in turnover will only amount to 5 %, to EUR 380 million, given the rising proportion of first-class photos in photo books. Earnings before tax and restructuring have been scheduled at EUR 24.5 million. In 2006 they amounted to Euro 6.2 million. Market researchers assume that the photographic market will bottom in 2008. With a significantly dominating digital photo share the picture market will then generate growth again. Targets for 2007 Change over previous year Colour prints Total 2.6 billion prints - 10 % Anal. 1.2 billion prints - 32 % Digital 1.4 billion prints + 26 % Sales EUR 380 million - 5 % Earnings before tax and restructuring EUR 24.5 million - 10 % The strength of CeWe Color in the field of digital processing and the logistics skills of the company in supplying its retail partners throughout Europe, totalling more than 60,000, as well as the unique Internet presence among competitors on the market is reinforced in the Group by means of targeted investments and acquisitions. The main focus of investment activity is on reinforcing and further developing the technological edge of CeWe Color in the areas of IT, hardware and software and on the installation of more order terminals for digital photos (DigiFoto makers) in the stores of retail partners. Corporate acquisitions primarily aim at market consolidation by CeWe Color and at extending the product range. These investments as well as increased expenditures for internet activities and marketing lead to elevated financial requirements, which are increasingly to be covered by debt. CeWe Color intends to utilise the full scope offered by digital image processing with an innovative range of products. At the same time the Group is supporting its retail partners who are expanding into the new EU member states, into countries such as Lithuania, Slovenia, Croatia and Romania. Medium-term planning provides for a total investment volume of between EUR 150 and 200 million. This is matched by a total of funds currently available to the amount of just over EUR 100 million. The resulting financial requirement is to be covered by means of utilising currently-available credit lines. CeWe Color at a glance: I.-IV. quarters Change IV. quarter Change 2005 2006 in % 2005 2006 in % Sales (in EUR millions) 431.1 400.5 -7.1% 102.6 100.9 -1.7% Number of colour prints (in millions) 3,433 2,879 -16.1% 707 655 -7.4% - of which photos from films (in millions) 2,603 1,764 -32.2% 480 333 -30.5% - of which digital prints (in millions) 830 1.114 +34.3% 226.7 321.2 +41.7% Number of Image CDs from a film (in thousands) 4,825 4,113 -14.8% 972 790 -18.7% Capital expenditure for the full year (in EUR millions) 36.2 32.5 -10.2% Earnings before tax (EBT) (in EUR m.) 25.5 21.1 -17.3% -2.0 -0.8 -60.0% Should you have any queries, please contact: CeWe Color Holding AG, Hella Hahm, Tel.: 0441 / 404 - 400 (Secretary – 234) or 0171 / 34 50 530, Fax: 0441 / 404-421, email: hella.hahm@cewecolor.de, Internet: www.cewecolor.com DGAP 29.01.2007 ---------------------------------------------------------------------- Language: English Issuer: CeWe Color Holding AG Meerweg 30-32 26133 Oldenburg Deutschland Phone: +49 (0)441 40 4-1 Fax: +49 (0)441 40 4-42 1 E-mail: info@cewecolor.de WWW: www.cewecolor.de ISIN: DE0005403901 WKN: 540390 Indices: SDAX Listed: Geregelter Markt in Berlin-Bremen, Frankfurt (Prime Standard); Freiverkehr in Düsseldorf, Hamburg, München, Stuttgart End of News DGAP News-Service ---------------------------------------------------------------------------