CEWE Stiftung & Co. KGaA — Call Transcript 2019

Nov 13, 2019

Results Q3 2019

Analyst Conference Call

CEWE Stiftung & Co. KGaA

Oldenburg November 13, 2019

This presentation contains forward-looking statements that are based on current assumptions and forecasts of the management of CEWE. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.

All numbers are calculated as exactly as possible and rounded for the presentation. Figures may not sum to 100, because of rounding.

At a glance: Q3 2019

• Turnover in the Photofinishing business segment grew by an outstanding 15.7% to 116.2 million euros. Photofinishing contributed with an EBIT of 1.4 million euros despite a negative contribution of the acquisitions in total (EBIT Q3 2018: 2.6 million euros **). The CEWE PHOTOBOOK sales volume increased by a strong 6.4% with 1.4 million copies. A good third quarter.
• Commercial Online-Print grows by 3.9%, to turnover of 24.8 million euros. More than anything else, weak LASERLINE sales as a result of price pressure slows down the growth. EBIT improved by 0.9 million euros to -0.8 million euros (Q3 2018: -1.7 million euros **).
• Including futalis Group EBIT is exactly on previous year's level. CEWE Group EBIT * (without futalis) in the third quarter at 0.2 million euros (Q3 2018: 0.6 million euros **).

Q3 confirms the targets for 2019: EBIT is to rise to up to 58 million euros

• * EBIT without futalis as "discontinued operation" acc. to IFRS 5
• ** adjusted prior-year figures based on the finalisation of purchase price allocations for Cheerz and Laserline

Highlights Q3		Q3 2018	Q3 2019	Comment
Photofinishing
Sales Volume Turnover EBIT	in photo m. in EUR m.	513.7 100.5 2.6	549.6 116.2 1.4	▪ Also third quarter increases and confirms volume target for 2019 ▪ Turnover increases organically and also through the WhiteWall acquisition ▪ EBIT fully in line with ongoing shift in seasonality
Commercial Online-Print
Turnover EBIT	in EUR m.	23.9 -1.8	24.8 -0.8	▪ Saxoprint more than compensates weak Laserline sales as a result of price pressure ▪ Clear EBIT improvement in spite of Laserline development
Retail
Turnover EBIT	in EUR m.	11.8 -0.1	10.2 -0.1	▪ Focus on profitability and photofinishing reduces hardware sales ▪ EBIT on previous year's level and traditionally negative in third quarter
Other (incl. futalis acc. to IFRS 5)
Turnover EBIT	in EUR m.	1.0 -0.7	1.4 -0.3	▪ Contains structure and company costs and the result from real estate holdings and investments ▪ futalis improves revenue and profit situation
Group (without futalis	acc. to IFRS 5)
Turnover EBIT	in EUR m.	136.2 0.6	151.2 0.2	▪ Turnover up by strong 11.1%, EBIT with special income in PY ▪ "futalis" classified acc. to IFRS 5 ("discontinued operation") in current year and PY ▪ Previous year's figure updated due to finalization of purchase price allocations
Free Cash Flow	in EUR m.	2.8	5.4	▪ Cash flow from operating activities increased due to positive business development
ROCE	%	14.5	15.8	▪ ROCE increased and remains strong (ROCE before IFRS 16 amendment at 18.2%)
Equity ratio	%	52.6	46.2	▪ Solid equity ratio, decline due to IFRS 16 first-time adoption (before IFRS 16: 52.8%)

Also Q3 confirms the annual targets for 2019

Agenda

1. Results

• - Photofinishing
• Commercial Online-Print
• Retail
• Other
• Group
• 1. Financial Report
• 1. Outlook

CEWE Photo Award 2019: The Winners

CEWE Photo Award 2019: The Winners

PR-Clippings: CEWE Photo Award 2019

[…] Goodwin ist Jurorin des diesjährigen CEWE Photoawards: In den über 400.000 Teilnehmern sieht sie 400.000 Unterstützer ihrer Revolution: "Ich will, dass mich die Fotos umwerfen." […]

CEWE's omni-channel solution: Customer centric

Order at CEWE: Anytime & anyplace

• True self service for customers, simple for store staff to manage
• Integrated iOS- and Android card reader
• Easy, fast and intuitive

• New, attractive creative output products

• Easy, convenient in-browser option

• Includes 6 months free project storage
• Photo editing options
• Automatic layout function selecting multiple photos

• Personalisation available with text and clip-art

• Fully functional software with extensive editing features

• Ideal for larger photo books
• Save projects offline
• Include QR codes for Videos in photo books
• Full range of products available
• Pre-made templates
• Cover highlights

• Assistant available

• Intuitive, quick and easy

• In-app Photo editing
• Automatic layout function selecting multiple photos
• Options for personalisation with text and clip-art

In-store @ CEWE PHOTOSTATION

CEWE PHOTOBOOK

with leather and linen cover

The new leather and linen covers provide for an outstanding visual and haptic experience. They are also an elegant way to protect your most cherished memories. You can customize your CEWE PHOTOBOOK by adding text and clip arts as special highlights on the front and back cover.

CEWE PHOTOBOOK Hardcover with highlights in rosé-gold

Highlights in rosé-gold are now available as new design elements. This allows for new markets and target groups to be opened up.

Memory Boxes Boxes containing photos

Design

Front Back

The photo box is perfect as a gift, for storage, or decoration and its introduction helps to improve competitiveness. Customers can choose which photo they would like to insert at the front as a title, making it a customizable product.

We have added a new additional item to our CEWE CALENDAR range: stylishly sophisticated gift packaging. The ideal option for our customers to wrap their Christmas presents in attractive high-quality packaging.

Poster in plastic frame New material

Available for 10 different Poster formats: plastic frames in slightly glossy black or white! With convenient acrylic glass and mounting bracket.

Photo magnet – square

Enjoy your best pictures every time you open the fridge or put up your shopping list.

Photo magnet – heart

Colourful variety made easy: your most cherished memories in a cute heart shape.

Advent calendar with kinder® Surprise Eggs

Intended for further development of the successful cooperation with Ferrero and for optimising the advent calendar product range.

Photo gifts

Sporting your personal image, the enamel cup is likely to become your new favourite cup!

Photo gifts Premium textiles

Your personal shopping assistant: customize the premium tote with your photo!

Photo gifts Premium textiles

Number of prints and turnover Photofinishing Q3

Rising share of value-added-products increases turnover per photo once again

Number of prints and turnover Photofinishing Q1-Q3

• Volume development exceeds expected range
• Rising share of value-added-products increases turnover per photo

CEWE PHOTOBOOK

CEWE PHOTOBOOK with decent growth – more than expected

60 millionth CEWE PHOTOBOOK

Thomas Lichtblau (BIPA), Lydia Reich and Ewald Hahn (CEWE)

• Bestselling photo book in Europe
• CEWE customer Lydia Reich ordered the 60 millionth CEWE PHOTOBOOK at trading partner BIPA in Austria
• Since 2005, the CEWE PHOTOBOOK has been a bestseller

Turnover by Quarter – Photofinishing

Seasonal distribution: CEWE 2015 to 2019 – Share in turnover by quarter as a million

* Planned group turnover w/o target turnover of segments retail, commercial online-print and other. Rounding differences may occur.

Business segment Photofinishing Q3

in Euro millions

• Q3 photofinishing grows by a strong 15.7%. Former core CEWE business grows significantly, even without Cheerz and WhiteWall (initial consolidation in June 2019).
• As expected, current Q3 EBIT continues the series of seasonal (shift)-related declines in Q3 photofinishing earnings
• Additional marketing expenditure not noticeable in overall income

● Q3 2019 special effects: -0.65 million euros

• PPA effects from DeinDesign purchase price allocation: -0.1 million euros
• PPA effects from Cheerz purchase price allocation: -0.5 million euros

● Previous year Q3 2018 special effects: -0.66 million euros

• PPA effects from DeinDesign purchase price allocation: -0.1 million euros
• PPA effects from Cheerz purchase price allocation: -0.4 million euros
• Sales revenue from the operation in Nuremberg: 1.2 million euros
• Non-recurring costs for the photokina trade-show presentation -1.3 million euros
• Photofinishing grows in core business, with acquisitions also driving increase in sales
• As expected, Q3 contribution to EBIT falls short of previous year

Rounding differences may occur

Business segment Photofinishing Q1-Q3

in Euro millions

• Photofinishing grows strongly

• EBIT improved in spite of contributions to earnings from acquisitions that are still negative

• Q1-3 photofinishing grows by a strong 12.9%. Without Cheerz and WhiteWall, former core CEWE business also grows significantly.

• The first nine months started with another stronger first quarter, followed by a second quarter with the weather "more orderfriendly" resulting in renewed growth, contrary to the trend of seasonal shifting in previous years. The third quarter also sees this development continuing, with growth in core business and through acquisitions.
• Photofinishing grows positively despite transaction costs for the WhiteWall acquisition and (also as a result of these costs) still negative WhiteWall and also Cheerz earnings contributions.
• Q1-3 2019 special effects: -1.8 million euros
• PPA effects from DeinDesign purchase price allocation: -0.3 million euros
• PPA effects from Cheerz purchase price allocation: -1.5 million euros
• Previous year Q1-3 2018 special effects: -1.7 million euros
• PPA effects from DeinDesign purchase price allocation: -0.3 million euros
• PPA effects from Cheerz purchase price allocation: -1.3 million euros
• Sales revenue from the operation in Nuremberg: 1.2 million euros
• Non-recurring photokina trade-show presentation costs -1.3 million euros

Rounding differences may occur

EBIT by Quarter – Photofinishing

Seasonal distribution: CEWE 2015 to 2019 – EBIT share by quarter as a percentage

51.0-58.0 Euro million targeted Group EBIT before segments retail, online printing and other . Rounding differences may occur

Agenda

1. Results

• Photofinishing

- Commercial Online-Print

• Retail
• Other
• Group
• 1. Financial Report
• 1. Outlook

The CEWE online print brands

Business and advertising prints: flyers, business cards, stationery, packaging, promotional items, etc.

Business segment Commercial Online-Print Q3

in Euro millions

• COP turnover continues to increase in Q3 as well

• Negative LASERLINE contribution prevents EBIT from improving even more

• Commercial online printing (COP) increases by 3.9% in the third quarter. Weak LASERLINE sales, mainly as a result of price pressure, continue to put a damper on growth. Without LASERLINE, COP grows more than reported in Q3, in spite of the fact that price pressure in Germany in general continues to restrain stronger growth.

• Reported EBIT improves by 0.9 million euros to -0.8 million euros (Q3 2018: -1.8 million euros). At the same time, almost half of this improvement results from operative progress; in addition, integration costs have occurred at LASERLINE in the previous year.
• More than anything else, weak sales-related LASERLINE earnings prevent an even greater EBIT improvement for COP
• Q3 2019 special effects: -0.1 million euros
• PPA effects from Saxoprint purchase price allocation: -0.1 million euros (rounded off)
• PPA effects from Laserline purchase price allocation: -0.1 million euros (rounded off)
• Previous year Q3 2018 special effects: -0.6 million euros
• PPA effects from Saxoprint purchase price allocation: -0.2 million euros
• PPA effects from Laserline purchase price allocation: -0.1 million euros
• Laserline integration costs: -0.3 million euros

Business segment Commercial Online-Print Q1-Q3

in Euro millions

COP turnover increases by 2.8% in first nine months – Laserline integration costs: -0.8 million euros

Negative LASERLINE contribution prevents EBIT from improving more

• Commercial online printing increases by 2.4% in Q1-3. At the same time, weak LASERLINE sales, mainly as a result of price pressure, put a damper on growth, Without LASERLINE, COP continues to grow more than reported in the first nine months, in spite of the fact that price pressure in Germany continues to restrain stronger growth in general.
• Reported EBIT improves by 1.3 million euros to -2.3 million euros (Q1-3 2018: -3.6 million euros). Besides the operative progress made, the improvement in this case mainly results from lower PPA effects than in the previous year and from LASERLINE integration costs that have occurred in the previous year.
• More than anything else, weak sales-related LASERLINE income prevents COP EBIT improvement from being even greater
• Q1-3 2019 special effects: -0.4 million euros
• PPA effects from Saxoprint purchase price allocation: -0.2 million euros
• PPA effects from Laserline purchase price allocation: -0.2 million euros
• Previous year Q1-3 2018 special effects: -1.5 million euros
• PPA effects from Saxoprint purchase price allocation: -0.5 million euros
• PPA effects from Laserline purchase price allocation: -0.3 million euros

Agenda

1. Results

• Photofinishing
• Commercial Online-Print

- Retail

• Other
• Group
• 1. Financial Report
• 1. Outlook

CEWE´s retail business

• 147 retail stores
• EUR 48.7 million revenue (2018) with photo-hardware (cameras, lenses, …)
• Sales of photofinishing products in photofinishing segment

Retail segment contains hardware revenue only, photofinishing revenue is shown in photofinishing segment

Own retail business provides an excellent window to the market

Business segment Retail* Q3

in Euro millions

● Retail hardware sales further reduced strategically (through focussing on photofinishing business and abandoning lowmargin hardware business)

EBIT*

	0.0				●	Focus on margins sees earnings at exactly the same level as
-0.1		-0.1	-0.1	-0.1		in the previous year in spite of a significant drop in turnover
					●	Q3 EBIT traditionally at zero or just below zero for seasonal
2015	2016	2017	2018	2019		reasons
-0.3%	+0.2%	-0.5%	-0.9%	-1.1% of turnover		* Only hardware, no photofinishing Rounding differences may occur

in spite of a decline in turnover

Hardware turnover in Q3 reduced in line with strategy

Q3 EBIT negative as expected for seasonal reasons and stable

• Focus on margins sees earnings at exactly the same level as in the previous year in spite of a significant drop in turnover
• Q3 EBIT traditionally at zero or just below zero for seasonal reasons

* Only hardware, no photofinishing .

Business segment Retail* Q1-Q3

in Euro millions

EBIT*

-1.4 2015	-0.4 2016	-0.4 2017	-0.8 2018	-0.8 2019	● For seasonal reasons, EBIT traditionally negative in the first nine months of the year
-3.2%	-0.9%	-1.2%	-2.3%	-2.5% of turnover	* Only hardware, no photofinishing.

Q1-3 hardware turnover reduced in line with strategy EBIT at the same level as in the previous year and negative as expected for seasonal reasons

● Retail hardware sales further reduced strategically (through focussing on photofinishing business and abandoning lowmargin hardware business)

• Focus on margins sees earnings at exactly the same level as in the previous year in spite of a significant drop in turnover
• For seasonal reasons, EBIT traditionally negative in the first nine months of the year
• Rounding differences may occur.

Agenda

1. Results

• Photofinishing
• Commercial Online-Print
• Retail

- Other

• Group
• 1. Financial Report
• 1. Outlook

Business segment Other Q3

in Euro millions

Structural and corporate costs and profits arising from real estate property and the acquisition of stocks are shown in the business segment Other.

futalis is reported in this business segment since the business activities cannot be allocated to the other business segments.

• 0.2 0.6 0.8 1.0 1.4 2015 2016 2017 2018 2019 Turnover +42.9%
• The 1.4 million euros in reported turnover is to be solely allocated to futalis (Q3 2018: 1.0 million euros, +42.9%)

EBIT

-0.6	-0.8	-0.9	-0.7	-0.3
2015	2016	2017	2018	2019

● EBIT improvement mainly results from operative progress at futalis

Rounding differences may occur

Segment for other business increases turnover and earnings mainly as a result of the positive futalis development

Business segment Other Q1-Q3

in Euro millions

Structural and corporate costs and profits arising from real estate property and the acquisition of stocks are shown in the business segment Other.

futalis is reported in this business segment since the business activities cannot be allocated to the other business segments.

• 0.2 1.5 2.2 2.8 4.0 2015 2016 2017 2018 2019 Turnover +41.2%
• The 4.0 million euros in reported turnover is to be solely allocated to futalis (Q1-3 2018: 2.8 million euros, +41.2%)

EBIT

-1.3	-2.2	-2.3	-1.7	-1.5
2015	2016	2017	2018	2019

● EBIT improvement mainly results from operative progress at futalis

Rounding differences may occur

Segment for other business increases turnover and earnings mainly as a result of the positive futalis development

Agenda

1. Results

• Photofinishing
• Commercial Online-Print
• Retail
• Other

- Group

• 1. Financial Report
• 1. Outlook

Turnover

Photofinishing Commercial Online-Print Retail Other

Especially segment Photofinishing accounts for growth in group turnover

* Acc. to IFRS 5 the CEWE Group EBIT is reported without discontinued operations futalis which is still reported within segement Others.

Rounding differences may occur

EBIT

Q3 in euro millions

Q1-Q3 in euro millions

EBIT exceeds previous year by improvements in segements Photofinishing and Commercial Online-Print * Acc. to IFRS 5 the CEWE Group EBIT is reported without discontinued operations futalis which is still reported within segement Others.

Rounding differences may occur

EBIT CEWE Group

Q1-3 distribution of earnings in comparison to Q4 in euro millions

4.1 3.2 33.6 37.3 40.8 42.9 46.1 58.1 51-58 -4.6 -4.8 -4.4 -2.4 -0.6 2013 2014 2015 2016 2017 2018* e2019* EBIT Q1-3 EBIT Q4 target area 51.6 to 58.6

EBIT increase in Q4 in euro millions

Q4 EBIT must increase by only 0.5 m. euros to reach the upper end of the EBIT target range Even a significant decrease of Q4-EBIT would lead into the targeted EBIT range for 2019

^* EBIT 2018 and 2019 acc. to IFRS 5 without the discontinued operation "futalis"

^** EBIT increase Q4 2018 calculated without futalis-EBIT in Q4 2017 (-4.2 euro millions)

Agenda

• 1. Results
• Photofinishing
• Commercial Online-Print
• Retail
• Other
• Group
• 2. Financial Report
• 1. Outlook

Consolidated profit and loss account Q3

Figures in millions of euros	Q3 2018	Q3 2019	∆ %	∆ m€	Sales growth in photofinishing (organic and through M&A)
Revenues	136.2	151.2	11.1%	15.1	and commercial online printing exceeds strategic
Increase / decrease in finished and unfinished goods	0.3	0.1	-74.7%	-0.2	strategic reduction in retail
Other own work capitalised	0.2	0.2	41.0%	0.1
Other operating income	6.1	5.4	-11.2%	-0.7	In 2018 profit from sale of the operation in Nuremberg
Cost of materials	-40.3	-43.6	8.2%	-3.3
Gross profit	102.4	113.3	10.7%	10.9	Increase in expenses driven by business increase
Personnel expenses	-41.0	-45.8	11.6%	-4.7
Other operating expenses	-50.7	-54.1	6.8%	-3.5	Increase in personnel expenses driven by acquisition
EBITDA	10.7	13.4	25.7%	2.8	of WhiteWall akquisitioin effect. Last year photokina,
Amortisation/Depreciation	-10.1	-13.2	31.3%	-3.2	last year leases before IFRS 16
Earnings before interest, taxes (EBIT)	0.6	0.2	-65.6%	-0.4
Financial income	0.0	-0.1	-643%	-0.1	Warm up effect for christmas season and WhiteWall
Financial expenses	-0.2	-0.3	42.7%	-0.1	WhiteWall aquisition effect
Financial result	-0.2	-0.5	115%	-0.3
Earnings before taxes (EBT)	0.4	-0.3	-165%	-0.7	Increase of depreciation caused by first time adoption
					of IFRS 16 (Leasing)

Balance sheet as of 30 September

Balance sheet total increases due to first-time IFRS 16 application and WhiteWall acquisition Equity ratio at 46.2% after balance sheet extension (as much as 52.8% before IFRS 16)

From Accounting Balance Sheet to Management Balance Sheet

Management balance sheet as of 30 September

Balance sheet total increases due to first-time IFRS 16 application and WhiteWall acquisition

Without IFRS 16: Gross financial debt increases only by 3.1 million Euros

Capital Employed I – T-3

Figures in millions of euros	30.06.2019	30.09.2019	∆ %	∆ Mio. €	Investments smaller than sum of operating
Property, plant and equipment	222.8	222.4	-0.1%	-0.3	depreciation and depreciation of right of
Investment properties	17.4	17.3	-0.7%	-0.1	use assets (IFRS 16)
Goodwill	87.3	87.3	0.0%	0.0
Intangible assets	28.9	27.9	-3.4%	-1.0	Less investments in software
Financial assets	6.9	6.6	-3.9%	-0.3
Non-current financial assets	1.3	1.3	4.4%	0.1	Fair value accounting of financial investments
Non-current other receivables and assets	0.2	0.2	-20.2%	0.0
Deferred tax assets	13.3	13.3	-0.1%	0.0	Strong business leads to stable inventories
Non-current assets	378.0	376.3	-0.5%	-1.7	in spite of stocking up for Christmas season
Inventories	45.6	45.3	-0.6%	-0.3	Slight increase by business volume and
Current trade receivables	43.5	44.1	1.3%	0.6	decreased days of sales outstanding
Operating gross working capital	89.1	89.4	0.4%	0.3
Current trade payables	54.2	60.1	11.0%	6.0	Business driven increase by sales growth
Operating net working capital	34.9	29.3	-16.2%	-5.7	as well as by stocking up for Christmas
					season

Capital Employed II – T-3

Figures in millions of euros	30.06.2019	30.09.2019	∆ %	∆ Mio. €	Investments smaller than sum of operating
Assets held for sale	2.9	3.1	4.7%	0.1
Current receivables from income tax refunds	12.1	15.1	25.2%	3.0	Accounting of tax prepayments at balance
Current financial assets	3.6	4.4	24.2%	0.9	sheet date
Other Current receivables and assets	11.3	13.8	22.4%	2.5
Other gross working capital	29.8	36.4	22.0%	6.6	Mainly increase of VAT receivables
Current tax liabilities	8.1	7.3	-10.0%	-0.8
Current other accruals	3.9	4.3	10.5%	0.4	Reduction by tax payments
Current financial liabilities	11.8	12.2	3.0%	0.4
Current other liabilities	29.4	30.5	3.8%	1.1
Liabilities held for sale	0.7	0.5	-24.1%	-0.2	Increase of payroll liabilities for Christmas
Other net working capital	-24.0	-18.4	-23.5%	5.6	bonuses and performance-related bonuses
Operating net working capital	34.9	29.3	-16.2%	-5.7
Other net working capital	-24.0	-18.4	-23.5%	5.6
Net working capital	10.9	10.9	-0.1%	0.0
Non-current assets	378.0	376.3	-0.5%	-1.7
Net working capital	10.9	10.9	-0.1%	0.0	Free Cash flow increases cash and cash
Cash and cash equivalents	12.0	12.5	3.9%	0.5	equivalents
Capital employed	400.9	399.7	-0.3%	-1.2

Capital Invested – T-3

Figures in millions of euros	30.06.2019	30.09.2019		∆ in %∆ in Mio. €
Equity	235.9	237.5	0.7%	1.6
Non-current accruals for pensions	33.0	33.1	0.5%	0.2
Non-current deferred tax liabilities	2.6	2.4	-6.7%	-0.2
Non-current other accruals	0.6	0.6	-1.3%	0.0
Non-current financial liabilities	2.0	1.9	-7.9%	-0.2
Non-current other liabilities	0.6	0.6	-1.9%	0.0
Non-operating liabilities	38.8	38.6	-0.5%	-0.2
Non-current interest-bearing financial liabilities	1.5	1.2	-14.4%	-0.2	Reclassification to current leasing liabilities
Non-current leasing liabilities	55.7	54.3	-2.4%	-1.4
Current interest-bearing financial liabilities	59.1	58.0	-1.8%	-1.1	Repayment of short term financing liabilities
Current leasing liabilities	10.0	10.0	-0.1%	0.0
Gross financial liabilities	126.2	123.6	-2.1%	-2.6
Capital invested	400.9	399.7	-0.3%	-1.2

Free cash flow Q3

• Cash flow from operative business mainly increased as a result of a positive development in business
• Reduced inflows from asset sales accompanied by stable investments in fixed assets

Consolidated free cash flow Q3

Figures in millions of euros	Q3 2018	Q3 2019		∆ % ∆ Mio. €	(+) Improved earnings situation
EBITDA	10.7	13.4	25.7%	2.8
Non-cash factors	-2.1	-1.0	54.3%	1.1	(+) Decrease of trade debtors
Decrease (+) / increase (-) in operating net working capital	1.5	5.7	287.9%	4.2	(+) Increase of trade payables due to stocking-up for
Decrease (+) in other net working capital (excluding income tax items)	4.7	-0.5	109.7%	-5.1	Christmas season
Taxes paid	-3.8	-2.9	24.2%	0.9
Interest received	0.0	0.0	157.1%	0.0	(-) Increase of VAT refunds
Cash flow from operating activities	10.9	14.8	35.8%	3.9
Outflows from investments in fixed assets	-11.3	-10.2	-9.6%	1.1	(+) Less investments in fixed assets
Outflows (-) / inflows (+) from investments in financial assets	2.0	0.8	-57.0%	-1.1
Inflows (+) outflow (-) from the sale of longterm financal assets	-0.3	-0.1	-80.1%	0.2	(+) Less inflows from financial assets (previous year:
Inflows from the sale of property, plant and equipment and intagible assets	1.5	0.0	-100.0%	-1.5	sale of remaining shares of a start-up company)
Cash flow from investing activities	-8.1	-9.4	-16.3%	-1.3
Free cash flow	2.8	5.4	91.9%	2.6

ROCE as of September 30

Rounding differences might occur.

ROCE sees earnings-induced increase in spite of the rise in the average capital employed (due to the acquisition of WhiteWall and the first-time application of IFRS 16).

ROCE before IFRS 16 amendment even as high as 18.2%

Agenda

• 1. Results
• Photofinishing
• Commercial Online-Print
• Retail
• Other
• Group
• 1. Financial Report
• 3. Outlook

CEWE Group Targets 2019

Targets		2018	Target 2019	Change
Photos	billion photos	2.23	2.22 to 2.26	0% to +2%
CEWE PHOTO BOOK	millions	6.18	6.24 to 6.31	1% to 2%
Investments*	Euro millions	49.6	around 55
Revenue	Euro millions	653.3	675 to 710	3% to 9%
EBIT	Euro millions	53.7	51 to 58	-5% to 8%
EBT	Euro millions	53.3	50.5 to 57.5	-5% to 8%
Earnings after tax	Euro millions	36.3	35 to 39	-5% to 9%
Earnings per share	Euro	5.06	4.74 to 5.40	-6% to 7%

Rounding differences might occur. * Operative investments without potential investments in expanding the business volume and, for example, corporate acquisitions and/or additional customer-base acquisitions

Q3 confirms the target: EBIT is expected to rise to up to 58 Euro millions in 2019

EBIT Development

… and appears reachable

* 2018 reported EBIT, updated EBIT without futalis acc. to IFRS 5 at 55.7 euro millions

Q&A-Session

Q3 2019 Analyst Conference Call November 13, 2019