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CEWE continues to grow

CEWE Stiftung & Co. KGaA (SDAX, ISIN: DE 0005403901) continues to grow in the first quarter of 2018: turnover increased by 10.1 % to 130.6 million euros (Q1 2017: 118.6 million euros). More than acquisitions, it was mainly the core business of photofinishing that accounted for growth: with the highest sales, this business segment generated strong organic growth, even by as much 10.4 % overall on the inclusion of acquired photo app specialist "Cheerz". At 0.6 million euros, the EBIT for the first quarter of 2018 is at exactly the same level as that of the previous year in spite of extraordinary expenditure for the integration of acquisitions (Q1 2017: 0.6 million euros). "Even if the fourth quarter, as is now traditionally a standard, will also contribute most to turnover and in particular to earnings in 2018, we have created a good initial basis for the year as a whole with our organic growth and the extra boost through our acquisitions. We are particularly pleased about the comeback of the CEWE PHOTOBOOK, as this could not grow in 2017 due to the VAT increase in volume," says Dr. Christian Friege, Chairman of the Board of Management of CEWE Stiftung & Co. KGaA.

Photofinishing growing dynamically
Turnover in the business segment of photofinishing increased overall by 10.4 %, to 94.5 million euros (Q1 2017: 85.6 million euros), with "Cheerz" contributing photofinishing turnover for the first time: in February CEWE had acquired the high-growth market leader for photofinishing apps in France. In addition to the acquisition of Cheerz, the CEWE PHOTOBOOK was the main driver of growth, as it did not increase in the previous year due to the drastic increase in Value Added Tax from 7 % to 19 %: CEWE PHOTOBOOK volume increased strongly by 7.7 % to 1.248 million books in the first quarter of 2018 (Q1 2017: 1.159 million books). CEWE also won through with its CEWE PHOTOBOOK when the company received the 2018 TIPA World Award in the "Best Photo Print Service" category: the option of enhancing CEWE PHOTOBOOK covers impressed the international jury. "Technical Image Press Association" – TIPA – awards are recognised as the most coveted awards for photo and imaging products worldwide. Sales of CEWE CALENDARS, CEWE CARDS, photo gifts and CEWE INSTANT PHOTOS also continued to rise. The trend towards high-quality photos was maintained unchanged: turnover per photo rose by 3.7 % to 20.28eurocents (Q1 2017: 19.55 eurocents). Against this background, with photofinishing at 1.9million euros (Q1 2017: 1.3 million euros), CEWE again reported a positive result as early asin the first quarter.

LASERLINE acquisition drives commercial online printing
The business segment of commercial online printing also reported double-digit growth in Q1.At 24.4 million euros, turnover was 18.8 % higher than in the previous year (Q1 2017: 20.6million euros), benefiting most of all from the LASERLINE acquisition. Portfolio businessasserted itself at the same level as in the previous year, in spite of strong ongoing pricecompetition in Germany and weakened business in the UK as a result of Brexit. The EBIT,which reached -0.5 million euros in the first quarter of 2018, after +0.1 million euros in thefirst quarter of 2017, was also negatively affected by an amount of around 0.2 million eurosin non-recurring costs for integrating LASERLINE. As of 2019, LASERLINE is expected tocontribute positively to earnings. Rises in costs and two days of production fewer than in theprevious year also meant that the EBIT for the business segment of commercial onlineprinting was still negative in Q1.

Market-related decline in retailing turnover
In a comparison with the same period of the previous year, sales of hardware in the retailingsegment saw a market-related decrease of 8 %, to 10.8 million euros in the first quarter of2018 (Q1 2017: 11.8 million euros). The optimised price strategy involving a consciousdecision to forego low-margin sales did, however, pay off. At -0.5 million euros and in spiteof a decline in turnover, the EBIT fell only slightly short of that of the previous year (Q! 2017:-0.3 million euros). First-quarter earnings are traditionally negative in retailing due to theseasonal nature of the business.

Segment for other business increases slightly
Turnover in the segment for other business was at 0.9 million euros in the first quarter of2018 (Q1 2017: 0.7 million euros). This business segment combines real-estate holdings andparticipating interests, as well as structural and corporate costs and costs for the annualgeneral meeting and investor relations. The 2018 first-quarter EBIT, at -0.4 million euros,was virtually at the same level as that of the same period of the previous year (Q1 2017: -0.5million euros).

Capital ratio remains very sound: 59.3 %
The capital ratio remains at a very sound level of 59.3 % as at 31 March 2018 (31 March2017: 63.2 %). In spite of the increase in capital employed through acquisitions (Saxopark,LASERLINE and the acquisition of Cheerz stocks), the return (ROCE) was again strong at18.9% (Q1 2017: 20.8 %).

Forecast confirmed
The good results of the first quarter underpin the Board of Management forecast for the fullyear of turnover in the range of 630 to 665 million euros and EBIT of 48 to 54 million euros, with CEWE expecting growth impulses to come from the acquisition of online printingprovider LASERLINE in commercial online printing and from the majority interest in theleading French photo app "Cheerz" in the photofinishing sector. The company also intends tocontinue with value-oriented growth in 2018 through its reliable dividend policy. CEWEproposed a dividend of 1.85 euros for the 2017 financial year to its shareholders at theAnnual General Meeting on 6 June 2018 – which would be the ninth consecutive dividendincrease.

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Christian Stamerjohanns (PR Manager)
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Phone: +49 (0) 441 404-3850
E-Mail: presse@cewe.de

CEWE Stiftung & Co. KGaA
Meerweg 30-32
26133 Oldenburg

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