CEWE STIFTUNG & CO. KGAA (FRA:CWC) CEWE in a stable position even after the coronavirus quarter

Directive transparence : information réglementée

06/08/2020 07:00

DGAP-News: CEWE Stiftung & Co. KGaA / Key word(s): Half Year Results
CEWE in a stable position even after the coronavirus quarter

06.08.2020 / 07:00
The issuer is solely responsible for the content of this announcement.

CEWE in a stable position even after the coronavirus quarter

  • Core business segment of photofinishing grows by 13.8 % in Q2, in the coronavirus crisis
  • CEWE PHOTOBOOK sales grow by 11.1% to 1.37 million books
  • Group EBIT increases by 2.4 million euros in spite of declines in retailing and commercial online printing
  • Equity ratio increases to a very sound 53.7 % and adjusted ROCE reaches 20.3 %

Oldenburg, 6 August 2020. CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) sees itself even more soundly positioned after the second quarter of 2020 in spite of the ongoing coronavirus crisis. Group turnover, at 130.6 million euros, fell only 2.7 % short of turnover generated in the same period of the previous year (Q2 2019: 134.2 million euros). The EBIT improved clearly, by 2.4 million euros to -1.0 million euros (Q2 2019: -3.4 million euros). The core business segment of photofinishing in particular benefited from the stay-at-home effect, while the other business segments were considerably affected by the temporary lockdown. Even if forecast reliability is severely limited in the current situation, with photofinishing business being potentially negatively affected by a coronavirus-related change in holiday habits as the year progresses, CEWE presumes that it will achieve solid annual net income overall in 2020 as well.

CEWE absolutely stable in spite of the coronavirus
"The coronavirus crisis is shaking up the entire economy. Given these difficult circumstances, we are glad that we have generated the best results for a second quarter at CEWE, thus putting us in a good position," says CEWE Stiftung & Co. KGaA CEO Dr. Christian Friege. Turnover in the main business division of photofinishing has seen a particularly marked increase as many people have used the extra time spent in their own home to create photo memories.

Staying at home benefits photofinishing
This has seen the business segment of photofinishing growing significantly in Q2, with turnover increasing by 13.8 % to 110.6 million euros, exceeding the 100-million-euro mark for the first time ever in a second quarter (Q2 2019: 97.2 million euros). The business division benefited from the stay-at-home effect: Many people used the extra time at home to order photo products such as CEWE PHOTOBOOKS as well as calendars, wall art, greeting cards and personalised photo gifts. The EBIT for the business division of photofinishing, with its top-quality, high-margin photo products, improved clearly in the second quarter of 2020, by 6.3 million euros to +5.1 million euros (Q2 2019: -1.1 million euros). Christian Friege explains: "Our core business of photofinishing is in fact currently getting us through the coronavirus period." Photo memories and photo gifts are an important emotional anchor for people, particularly in difficult times involving contact restrictions. "Given the massive impact of the pandemic, we also immediately initiated a cost-reduction programme in March. This programme is likewise contributing to our good result," Christian Friege continues.

Commercial online printing: coronavirus with a perceptible adverse effect on earnings
While the business division of commercial online printing accumulated a single-digital growth rate as at the end of February, from the beginning of March growth rate was hit by the full force of the pandemic, with turnover in the second quarter decreasing by 56.5 % against that of the previous year, to 10.9 million euros (Q2 2019: 25.0 million euros). CEWE applied efficient cost management in the crisis in order to keep the decline in earnings under control: the EBIT amounted to -2.8 million euros (Q2 2019: -1.1 million euros). The company is already planning to expand and reinforce business for the post-corona period. "We will be streamlining our brand portfolio and focussing all our attention on SAXOPRINT, Viaprinto and LASERLINE. We are convinced that this strategy and a sustainably optimised cost structure will see us emerging stronger from the crisis," says Christian Friege. The integration of LASERLINE production in Berlin into the SAXOPRINT operation in Dresden, initiated at the beginning of the year, has also already been successfully implemented.

CEWE RETAIL: hard hit by closures in the retail sector
Retail business was hit hard by corona-related shop closures: in the second quarter of 2020, turnover amounted to 7.6 million euros, 28.8 % less than in the same period of the previous year (Q2 2019: 10.6 million euros). Operative EBIT for the business division even showed an improvement, with earnings having broken even (0.0 million) in comparison to the previous year (Q2 2019: -0.3 million euros). Besides, 1.7 million euros in restructuring costs were incurred and allowances for inventories of stocks amounted to 1.5 million euros in the second quarter. This caused the EBIT to decrease overall to -3.2 million euros (Q2 2019: -0.3 million euros). "The impact on retailing is huge, but this is also an opportunity. The crisis is in any case speeding up our current focus on photofinishing and online business," explains Christian Friege. CEWE is thus closing altogether more than 30 branches in all the countries in which it conducts retail business.

Segment for other business: no sales talks around futalis due to the coronavirus
As a result of the coronavirus situation, no more talks with potential buyers about the sale of the futalis company were held in the second quarter of 2020. futalis was thus reincorporated into the CEWE Group Income Statement in accordance with IFRS accounting regulations. The business segment developed most positively in Q2, raising turnover by 13.3 % to 1.5 million euros (Q2 2019: 1.3 million euros), with the contribution to EBIT improving to -0.1 million euros (Q2 2019: -0.9 million euros),

CEWE maintains its strong equity ratio - adjusted ROCE increases to 20.3 %
The equity ratio of the company is more than sound, at 53.7 % as at 30 June 2020. This is another increase over that of the previous year (30 June 2019: 46.4 %). CEWE is thus retaining its extremely sound financing, even in these coronavirus times. Overall interest on capital employed also improved in the quarter of the report: the positive development in earnings raises the ROCE, adjusted for restructuring costs and IFRS 16 effects (lease accounting), to an extremely good 20.3 % (adjusted figure for the previous year: 18.1 %). It is, however, not possible to undertake any realistic ascertainment of the forecast for the latter six months of the year in the current situation. It must for example remain to be seen how the third quarter, which has been declining anyway in terms of photofinishing turnover for several years, will be negatively affected by the change in holiday behaviour as a result of the coronavirus. Many holiday photos are typically used for photo products such as the CEWE PHOTOBOOK. Christian Friege: "In the current phase it is clear that nobody can seriously and reliably - with any of the usual certainty - make concrete forecasts concerning the second half of the year. Yet we are sure that our staff members will all unite in successfully seeing CEWE through these challenging times."

An overview of Q2 and HY1 2020 results

CEWE business segments Unit Q2 2019 Q2 2020 HY1 2019 HY1 2020
(1) Photofinishing          
Photos m. photos 453.0 465.3 959.3 973.4
CEWE PHOTOBOOK m. books 1.232 1.369 2.566 2.732
Turnover EUR m. 97.2 110.6 200.8 225.3
EBIT EUR m. -1.2 5.1 1.8 8.4
Purchase price allocation effects EUR m. -0.7 -1.1 -1.3 -2.2
EBIT before special effects EUR m. -0.4 6.2 3.2 10.6
(2) Retailing          
Turnover EUR m. 10.6 7.6 21.0 15.1
EBIT EUR m. -0.3 -3.2 -0.7 -3.7
Restructuring provisions EUR m. - -1.7 - -1.7
Allowances for inventories of stocks EUR m. - -1.5 - -1.5
EBIT before special effects EUR m. -0.3 0.0 -0.7 -0.5
(3) Commercial Online Printing          
Turnover EUR m. 25.0 10.9 50.2 33.4
EBIT EUR m. -1.1 -2.8 -1.4 -3.4
Purchase price allocation effects EUR m. -0.2 -0.1 -0.3 -0.2
Conversion to performance-oriented
allowances for depreciation
EUR m. - +0.5 - +0.6
EBIT before special effects EUR m. -0.9 -3.3 -1.1 -3.9
(3) Other          
Turnover EUR m. 1.3 1.5 2.6 3.1
EBIT EUR m. -0.9 -0.1 -1.2 -0.3
CEWE Group Unit Q2 2019 Q2 2020 HY1 2019 HY1 2020
Turnover EUR m. 134.2 130.6 274.6 277.0
EBIT EUR m. -3.4 -1.0 -1.5 1.0
Total one-off effects EUR m. -0.9 -3.8 -1.6 -5.0
EBIT before special effects EUR m. -2.5 2.8 0.2 6.0
EBT EUR m. -3.5 -1.2 -1.8 0.5
Earnings after tax EUR m. -2.1 -0.7 -1.0 1.1

Rounding differences may occur. Percentage deviations have all been calculated at the exact values.

Notes to the "Earnings by Business Segment" chart

(1) Photofinishing: Production and sale of photo products such as CEWE PHOTOBOOKS, calendars, greeting cards, wall decorations and individual (analogue and digital) photos as well as other photo products
(2) Retailing: Trading in photo hardware, such as cameras and lenses, in Norway, Sweden, Poland, the Czech Republic and Slovakia
(3) Commercial online printing: Production and sale of commercial print products in the online printing portals of SAXOPRINT, viaprinto and LASERLINE
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: cewe.de , deindesign.de , whitewall.com , cheerz.com ,
viaprinto.de , saxoprint.de, laser-line.de

The CEWE apps are all available in the app stores. The CEWE Investor Relations app for iPad(c) or android tablets provides all annual and quarterly reports, presentations and sustainability reports.

Financial schedule
(insofar as already scheduled)

22.09.2020 2020 Berenberg & Goldman Sachs German Corporate Conference
23.09.2020 2020 Baader Investment Conference
06.10.2020 Virtual online 2020 AGM
12.11.2020 Publication of the 2020 Q3 interim communication
12.11.2020 Press release on Q3 2020
16.11.2020 German Equity Forum

About CEWE:
The CEWE Group is Europe's leading photo service and online printing supplier.

From its beginnings in 1912, CEWE has progressed to become the leading photo service company for all those wanting to make more of their photos. This is mainly due to the much-awarded CEWE PHOTOBOOK, with more than six million books being sold each year. Customers can purchase other personalised photo products under the brand names of CEWE, WhiteWall and Cheerz - and from many leading retailers in Europe. In terms of their personal photos, they are inspired to produce a variety of creative designs and they entrust the company with around 2.4 billion photos every year.

The CEWE Group has also set up a highly efficient production system for the online printing market, which is still new. Every year billions of high-quality printed products are delivered reliably to their purchasers through the SAXOPRINT, LASERLINE and viaprinto sales platforms.

The CEWE Group, through the founder family of Neumüller as an anchor shareholder, focuses on sustainable corporate management and has already received many awards for this effort: economically sustainable in the long term; cooperative and fair in dealings with customers, employees and suppliers; socially responsible and protective of the environment and resources. An example of this is the climate-neutral process used to produce all the CEWE brand-name products.

The CEWE Group has a staff of more than 4,200 and operates in more than 20 countries. Group sales rose to 714.9 million euros in 2019. CEWE is listed on the SDAX.

More information is available at company.cewe.de.

06.08.2020 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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Language: English
Company: CEWE Stiftung & Co. KGaA
Meerweg 30-32
26133 Oldenburg
Phone: +49 (0)441 40 4-1
Fax: +49 (0)441 40 4-42 1
E-mail: IR@cewe.de
Internet: www.cewe.de
ISIN: DE0005403901
WKN: 540390
Indices: SDAX
Listed: Regulated Market in Berlin, Frankfurt (Prime Standard); Regulated Unofficial Market in Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
EQS News ID: 1110769

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1110769  06.08.2020