23.03.2017
CEWE Stiftung & Co. KGaA DE0005403901
DGAP-News: CEWE: growth in earnings through brand power
DGAP-News: CEWE Stiftung & Co. KGaA / Key word(s): Final Results/Results
Forecast
CEWE: growth in earnings through brand power
23.03.2017 / 07:00
The issuer is solely responsible for the content of this announcement.
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CEWE: growth in earnings through brand power
- Corporate targets all reached or exceeded in 2016
- CEWE PHOTO BOOK unsupported brand awareness rises to 51 %
- All three business segments return positive earnings in 2016
- CEWE ends 2016 with a capital ratio of 53.8 %
- Eighth consecutive dividend increase sought: 1.80 euros per share
Oldenburg/Frankfurt am Main, 23 March 2017. CEWE Stiftung & Co. KGaA (SDAX,
ISIN: DE 0005403901) achieved or exceeded all its corporate targets in the
business year of 2016. The Board of Management and the Supervisory Board
will be proposing the eighth consecutive dividend increase to the
shareholders at the Annual General Meeting on the basis of the company's
sustained high earnings quality and sound financial position. The company is
aiming for more earnings-oriented growth in 2017, with the earning power in
photofinishing business, and renewed positive earnings in commercial online
printing and retailing contributing to this rise. This was announced by CEWE
during the Annual Report and Analysts' Press Conference held today in
Frankfurt am Main. "Our aim is to make our company more valuable year after
year and to allow our shareholders to participate in our growing income in
future as well," says Dr. Rolf Hollander, Chairman of the Board of
Management of CEWE Stiftung & Co. KGaA.
Highest marketing expenses and highest earnings in the history of the
company
In 2016 CEWE turnover increased by 7.0 % to 593.1 million euros (previous
year of 2015: 554.2 million euros), thus considerably exceeding the target
of 555 million to 575 million euros. The successful product portfolio, as
well as the CEWE brand's considerable brand awareness and likeability,
contributed to the positive development, with the unsupported brand
awareness of the CEWE PHOTO BOOK rising to 51 % on the German market. At the
same time, the net promoter score also improved again to reach 58 % - a
record high typically only achieved by top international brands. "We are
delighted that our customers have now become genuine brand ambassadors,"
says Dr. Hollander. The extremely positive attitude consumers have to the
CEWE photofinishing range is not least of all also the result of the high
quality of the product portfolio - a fact that was once again confirmed in
many test firsts in 2016: national and international testers distinguished
CEWE PRODUCTS more than 60 times. CEWE has made substantial investments in
the brand in the past few years, and increased its marketing expenses for
photofinishing tenfold since 2015, from 5 million to 54 million euros. CEWE
has at the same time managed to consistently increase its income, with Group
EBIT in the 2016 business year increasing to 47.0 million euros (2015: 36.4
million euros). Dr. Hollander: "Developing CEWE to a strong brand with
annual increases in its marketing investments has clearly paid off: in 2016
we spent more money on marketing than ever before while at the same time
achieving the best results of the past 56 years."
After-tax earnings increase by 35.2 % - ROCE climbs to 21.3 %
In 2016, impairment write-downs on futalis, DeinDesign and the British CEWE
location had a negative effect at an EBIT level in the amount of a total 6.9
million euros. Although these negative effects did not have the effect of
reducing taxes, CEWE increased its after-tax earnings by 35.2 %, from 22.5
million to 30.4 million euros (target figure: 29 million to 33 million
euros). Earnings per share increased to 4.25 euros, and were thus within the
target corridor of 4.00 to 4.57 euros (2015: 3.15 euros). The return on
capital employed (ROCE) improved once again to reach 21.3 % in 2016 (2015:
17.2 %).
Sound financing and strong cash flow make it possible to increase dividends
again
CEWE is aiming for the eighth consecutive dividend increase: on the basis of
the positive development in earnings and the sound cash flow from operative
business in the amount of 93 million euros, the Board of Management and the
Supervisory Board have resolved to propose a dividend of 1.80 euros per
share for the 2016 business year to the shareholders at the Annual General
Meeting on 31 May 2017 (previous year: 1.60 euros per share). On the basis
of the price at the end of 2016 (84,57 euros), shareholders are achieving a
dividend yield of 2.1 % with the dividend proposed.
CEWE increases fourth-quarter turnover by 5.9 %
In what is typically the strongest quarter from the point of view of
seasons, CEWE increased its turnover by 5.9 % to 228.5 million euros on the
basis of the positive development in photofinishing and growth in commercial
online printing. At 42.9 million euros, EBIT also exceeded the figure for
the previous year by 5.3 % in the fourth quarter (Q4 2015: 40.8 million
euros). CEWE thus generated around 38.5 % of its total annual turnover and
91 % of its income in the vital fourth quarter. "A CEWE photo product is the
best Christmas gift ever - individual, personal and also self-made", says
Dr. Hollander. The new products and the user-friendly apps for mobile
devices such as smartphones and tablets have accelerated growth dynamics.
The high-margin, added-value brand products such as the CEWE PHOTO BOOK,
CEWE CALENDARS, CEWE CARDS, CEWE WALL PICTURES and other photo gifts were
the most important driver of turnover. This is why the turnover per photo
increased by 7.9%, from 22.6 eurocents in the same quarter of the previous
year to 24.38 eurocents.
Core business of photofinishing boosts sales and earnings
The biggest CEWE business segment exceeded expectations once again in the
2016 business year: in comparison to the previous year, turnover rose by 8.9
% to 452 million euros, with EBIT, at 52.0 million euros, exceeding the same
figure for the previous year by 29.5 % (2015: 40.2 million euros). The trend
towards raised-value photo products continues to largely determine the
development in turnover. This saw a renewed considerable 9.1% rise in
turnover per photo. While CEWE reported turnover per photo at 18.57
eurocents in 2015, this figure amounted to 20.25 eurocents in the year of
the report. CEWE confirmed the turnaround in retail earnings that was
initiated in the previous year: with turnover at 54.9 million euros reduced
intentionally by 9.7 % (2015: 60.8 million euros, CEWE generated slightly
positive EBIT in the amount of 0.6 million euros (2015: -0.4 million euros).
A stronger market focus and cost reductions in the sector offset the effect
on earnings from the decline in turnover for business with cameras. Growth
was once again reported for commercial online printing, which increased by
7.9 % to 84 million euros (2015: 77.8 million euros). This was the first
time that the business segment achieved a positive EBIT on a full-year
basis. With EBIT at 1.6 million euros, commercial online printing exceeded
the figure for the previous year by 2.5 million euros. In the "Other"
section, in which CEWE pools its structure costs and corporate costs as well
as earnings from real-estate property and the acquisition of stocks, it was
mainly goodwill depreciation in the amount of -3.9 million euros that
resulted in EBIT of -7.2 million euros. The investments held in this
business segment are typically in an early phase. "If we are convinced of a
promising business model, we can justify accepting initial losses for a
limited period," Dr. Hollander points out.
Higher value added tax on photo books in Germany
In 2017, the increased value added tax on photo books in Germany could have
a negative effect on the turnover and yield of the company. The original
increase in value added tax on photo books in Germany, from 7 % to 19 % and
valid since 25 December 2015, was temporarily suspended until 31 December
2016. Since this regulation has now expired, photo books have been subject
to value added tax of 19 % since 1 January 2017, instead of 7 %. Given the
implementation of the higher rate of value added tax, CEWE, according to the
current status of available information, presumes that the negative effect
on EBIT will range from 0 euros to a maximum high, single-digit,
million-euro amount - also possible, for example, in the event of a
reduction in enquiries as a result of consumer price rises.
EBIT target corridor for 2017: + 5 million euros
In spite of the increased value added tax on photo books, Group turnover in
2017 is to rise slightly on average, from 593.1 million euros in the
previous year of 2016 to an amount ranging from 585 million to 615 million
euros. In this case, turnover in photofinishing is to remain approximately
stable or increase slightly, the business segment of retailing is to show
turnover to be about constant or slightly in decline and commercial online
printing is to continue to increase its turnover on the majority of markets.
The British market could prove to be an exception in the wake of the Brexit
decision. Group EBIT is to be in a corridor of 45 to 51 million euros, EBT
is to be in the range of 44.5 to 50.5 million euros, and after tax earnings
between 30 and 34 million euros. In its forecast for 2017, the Board of
Management is thus raising its operating EBIT result channel by around 5
million euros over the goals for 2016.
Earnings by business segment
CEWE Unit Q4 2015 Q4 2016 2015 2016
(1) Photofinishing
Digital prints in m. 761.2 768.0 2,164.1 2,176.2
units
Prints from films in m. 14.5 11.5 70.7 56.0
units
Total prints in m. 775.7 779.5 2,235 2,232
units
CEWE PHOTO BOOK th. 2,385.1 2,375.2 6,047.9 6,206.9
books
Turnover in EUR 175.3 190.0 414.9 452.0
m.
EBIT in EUR 39.3 45.9 40.2 52.0
m.
Restructuring costs in EUR --- --- -0.4 -0.2
m.
Proceeds from US internet in EUR --- --- --- 0.4
activity m.
Goodwill amortisation in EUR -2.6 -2.1 -2.6 -3.0
m.
Disposal of the operation in EUR --- --- --- 0.3
in Graudenz, Poland m.
Basic equipment for in EUR --- --- --- 2.1
business partners m.
Purchase price allocation in EUR -0.1 -0.1 -0.2 -0.4
effect m.
EBIT before one-off in EUR 42.1 48.1 43.4 52.8
effects m.
(2) Retailing
Turnover in EUR 17.3 14.7 60.8 54.9
m.
EBIT in EUR 0.9 1.0 -0.4 0.6
m.
Restructuring costs in EUR --- --- -0.6 ---
m.
EBIT before one-off in EUR 0.9 1.0 0.1 0.6
effects m.
(3) Commercial online
printing
Turnover in EUR 22.8 23.1 77.8 84.0
m.
EBIT in EUR 1.6 1.1 -0.9 1.6
m.
Purchase price allocation in EUR -0.5 -0.4 -2.1 -1.7
effect m.
EBIT before one-off in EUR 2.1 1.5 1.2 3.3
effects m.
(3) Other
Turnover in EUR 0.4 0.6 0.6 2.2
m.
EBIT in EUR -1.07 -5.0 -2.4 -7.2
m.
Goodwill amortisation in EUR --- -3.9 --- -3.9
m.
Purchase price allocation in EUR -0.1 -0.1 -0.2 -0.5
effect m.
EBIT before one-off in EUR -1.0 -1.0 -2.2 -2.8
effects m.
CEWE Group Q4 2015 Q4 2016 2015 2016
Turnover in EUR 215.8 228.5 554.2 593.1
m.
EBIT in EUR 40.8 42.9 36.4 47.0
m.
One-off effects in EUR -3.4 -6.7 -6.1 -6.9
m.
EBIT before one-off in EUR 44.2 49.6 42.5 53.9
effects m.
EBT in EUR 40.8 41.7 35.9 46.2
m.
Earnings after tax in EUR 26.0 25.5 22.5 30.4
m.
Rounding errors may arise.
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. CEWE-PRINT.de, Saxoprint and
Viaprinto
Overall year of 2016 in a comparison with the previous year and with
targets, and the targets for 2017
CEWE Group Unit 2015 2016 2016 2017
target actual target
Digital prints in billion 2.16 2.05-2.1- 2.18 2.08-2.1-
units 5 8
Prints from films in billion 0.071 0.050-0.- 0.056 0.040-0.-
units 055 045
Total prints in billion 2.23 2.10-2.2- 2.23 2.12-2.2-
units 1 3
CEWE PHOTO BOOK in m. units 6.0 6.10-6.1- 6.2 6.00-6.2-
5 5
Turnover in EUR m. 554.2 555-575 593.1 585-615
EBIT in EUR m. 36.4 40-46 47.0 45-51
EBIT margin % 6.6 6.9-8.3 7.9 7.3-8.7
EBT in EUR m. 35.9 39-45 46.2 44.5-50.-
5
Earnings after tax in EUR m. 22.5 29-33 30.4 30-34
Earnings per share EUR/share 3.15 4.00-4.5- 4.25 4.23-4.8-
diluted 7 1
Fourth quarter in 2016
CEWE Group Unit Q4 2015 Q4 2016 Diff. % Diff. abs.
Digital prints in m. units 761.2 768.0 0.9 % 6.8
Prints from films in m. units 14.5 11.5 -20.7 % -3.0
Total prints in m. units 775.7 779.5 0.5 % 3.8
CEWE PHOTO BOOK in m. units 2.4 2.4 -0.4 % -0.01
Turnover in EUR m. 215.8 228.5 5.9 % 12.7
EBIT in EUR m. 40.8 42.9 5.3 % 2.2
EBT in EUR m. 40.8 41.7 2.2 % 0.9
Earnings after tax in EUR m. 26.0 25.5 -1.7 % -0.4
Rounding errors may arise. 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: [email protected]
Internet: cewe-fotobuch.de , cewe-photobook.com , cewe.de , cewe-print.de ,
viaprinto.de , saxoprint.de , deindesign.de
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)
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 3,500
employees in 24 European countries, is both market and technological leader.
In 2016 CEWE delivered around 2.2 billion prints, 6.2 million copies of the
CEWE PHOTO BOOK and photo gift articles to around 25,000 retail partners to
generate consolidated turnover of 593.1 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 CEWE-PRINT.de, 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.
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23.03.2017 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
Germany
Phone: +49 (0)441 40 4-1
Fax: +49 (0)441 40 4-42 1
E-mail: [email protected]
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
End of News DGAP News Service
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556823 23.03.2017
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