CEWE Stiftung & Co. KGaA — Investor Presentation 2021

Mar 25, 2021

CEWE Annual Press & Analysts' Conference

CEWE Stiftung & Co. KGaA

March 25, 2021

CEWE acts with clear priorities in Corona crisis

• We focus on health and safety of our employees 1
  • We secure production capabilities of our laboratories and printing plants
• 3 We keep online and mobile sites up and communicate with our customers
  • We ensure cost reductions and review investments

4

2

5 We seek "Corona-upsides"

Revenue development: CEWE continues to grow in 2020

e2021

2020 EBIT continues the trend of increasing earnings

in Euro millions

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

4

Agenda

1. Corporate Development by Business Segments

1.1 Photofinishing

1.2 Retail

1.3 Commercial Online-Print

1.4 Other

2. Group Results 2020

• 3. Sustainability
• 4. Financial Details

5. Innovation

6. Outlook 2021

7. Q&A

1.1 Photofinishing

CEWE's omni-channel solution: Customer centric

New CEWE Photo World App with automatically generated suggestions

CEWE ordering software with new layout features

New trading partner Boots in Great Britain : Rollout went extremely well despite Corona

Photo advent calendar with kinder® chocolate

CEWE PHOTOBOOK

»Corona-related changes in holiday travel behavior reduced the number of (multi-photo product) CEWE PHOTOBOOK

Number of prints and turnover Photofinishing

»Rising share of value-added (and single-photo) products increases turnover per photo

Photofinishing-Turnover by Quarter

Seasonal distribution: CEWE 2016 to 2020 – Share in turnover by quarter as a million

»Photofinishing with growth in 2020

Business segment Photofinishing

in Euro millions

»Marked improvement in photofinishing earnings in 2020 »It was mainly economies of scale in the production of additional Christmas orders, together with reduced costs, that contributed to this improvement

19 Rounding differences may occur.

• Photofinishing grew by 8.9% in 2020, with acquired wall-art specialist WhiteWall still contributing non-organically to this growth in the period from January to May
• As of mid-March the coronavirus also had an impact on photofinishing: Instant-print POS business was affected by shop closures, while online photofinishing business saw the stay-at-home effect resulting in a strong level of incoming orders
• Q3 was dominated by a change in holiday travel behaviour to result in fewer (holiday) photos overall and in consequence also in fewer orders for photos and less turnover
• In Q4, Christmas business, which was once again even stronger, played a most significant role in the development of the entire year
• Photofinishing EBIT increased considerably by EUR 21.7 million
• Besides additional contribution margins from the rise in sales (particularly those from Christmas business due to considerable economies of scale in production), the cost-reduction programme initiated as early as in March also played a role in improving the EBIT
• 2020 special effects: -5.0 Euro million
  • Effects resulting from DeinDesign purchase-price allocation: EUR 0.2 million
  • Effects resulting from Cheerz purchase-price allocation: EUR 2.0 million
  • Effects resulting from WhiteWall purchase-price allocation: EUR 2.1 million
  • Restructuring (Photofinishing-share in Retail and DK): EUR -0.7 million
• 2019 special effects: -3.6 Euro million
  • Effects resulting from DeinDesign purchase-price allocation: EUR 0.4 million
  • Effects resulting from the Cheerz purchase-price allocation: EUR 1.9 million
  • Effects resulting from the WhiteWall purchase-price allocation: EUR 1.2 million

Operational Photofinishing EBIT margin* continues to increase

15.1%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

»Especially economies of scale in the production of additional Christmas orders, together with corona-related cost savings, contributed to this improvement

Photofinishing-EBIT by Quarter

Seasonal distribution: CEWE 2016 to 2020 – EBIT before restructuring by quarter in million euros

»Photofinishing with strong increase in earnings in 2020

1.2 Retail

Retail with focus on photofinishing business

• Own retail stores in NO, PL, CZ, SK
• Strategic focus on photofinishing and online business
• EUR 34.1 million revenue (2020) with photo-hardware (cameras, lenses, …)

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

Business segment Retail*

in Euro millions

• »Hardware retailing has been affected by coronavirus-related business closures
• 24 »Accelerated implementation of the optimisation strategy initiated as early as in H1 2020
• As a result of coronavirus-related business closures, hardware retailing was impacted by the shutdown, with sales declining by 21.8% in 2020
• Due to a focus on photofinishing business and to refraining from low-margin hardware business, the active reduction in turnover before the onset of the coronavirus crisis was still at around a strategic -10%
• Coming out of the crisis stronger: CEWE is closing altogether more than 30 branches in all the countries in which the company conducts retail business
• Corona-induced accelerated pursuance of an optimisation strategy with a focus on photofinishing business and online business – and with associated restructuring costs as a special effect
• Before these one-off effects, retailing achieved an operative EBIT that had been improved by EUR 0.2 million, to amount to EUR 230,000 (2019: EUR 35,000)
• 2020 one-off effects: EUR 4.4 million
  • Restructuring provisions for retailing: EUR 2.9 million
  • Allowances for inventories of stocks: EUR 1.5 million
• 2019 one-off effects: none

1.3 Commercial Online-Print

Commercial Online-Print

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

Business segment Commercial Online-Print

in Euro millions

• » In a B2B business environment, the COP has been particularly hard hit by the coronavirus crisis in a B2B business environment
• » Efficient cost management keeps the decline in earnings
• 27 under control
• Since as early as mid-March, COP in B2B printing has been strongly impacted by coronavirus, with turnover declining by 34.3% in 2020
• Aggregated as at the end of February (prior to the coronavirus), COP was still increasing at a single-digit growth rate
• Efficient cost management together with a conversion to performance-oriented allowances kept the decline in earnings under control in spite of severe losses in turnover
• Earnings were backed up in the amount of EUR 556,000 by reversing the remaining redundant Laserline restructure provision
• In the previous year of 2019, a restructuring provision of EUR 5 million was established for merging Laserline and Saxoprint production
• Coming out of the crisis stronger: In order to ensure focussed, efficient renewed stimulation of the online printing brands after the coronavirus crisis, CEWE has been concentrating its brand portfolio on the Saxoprint, Viaprinto and Laserline brands since HY1 2020
• 2020 special effects: + EUR 0.9 million
  • Effects resulting from the Laserline purchase-price allocation: EUR 0.2 million
  • Conversion to a performance-related allow. for depr. for Saxoprint: +EUR 0.6 m.
  • Reversal of remaining Laserline restructuring provision: + EUR 0.6 million
• 2019 special effects: EUR 5.6 million
  • Effects resulting from the Saxoprint purchase-price allocation: EUR 0.2 million
  • Effects resulting from the Laserline purchase-price allocation: EUR 0.3 million
  • Restructuring provision for Laserline: EUR 5.0 million

Rounding differences may occur.

1.4 Other

Business Segment Other

in Euro millions

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

The EUR 6.6 million in turnover is to be exclusively allocated to futalis (2019: EUR 5.5 million)

• -7.2 -6.6 -2.6 -2.4 -1.1 2016 2017 2018 2019 2020 EBIT
• EBIT mainly improved through futalis: futalis continues to grow most positively, with earnings moving towards the break-even level
• Besides, IR costs were also lower than in the previous year mainly due to the switch from a (physical) annual general meeting to a virtual online AGM

»Segment for Other business enhances turnover and improves earnings

2. Group Results 2020

Turnover

»Growth in photofinishing can compensate for the (mainly corona-related) decline in other business areas

»Earnings improvement in photofinishing - together with consistent cost management in all areas of the company - overcompensates for the results of the retail and commercial online printing business areas, which were influenced by the negative effects of the pandemic

29.6 32.8 36.3 31.7 4.12 4.54

51.9

Earnings after tax

Earnings after tax in Euro millions

Earnings per share in Euro

»Earnings after tax / earnings per share significantly increased

»Tax rate at expected 31.9%

Results 2020: Dividend is to be increased again in Euro

* recommendation of board of management to supervisory board and AGM (June 9, 2021)

»Dividend for the 2020 business year is to be increased to 2.30 euros

»Since analogue/digital transformation: twelfth consecutive dividend increase

3. Sustainability

Sustainability Report 2020

• As one of the few German companies: CEWE has been publishing a sustainability report on a regular basis since 2010
• Sustainability Report 2020 based on new 5000+ stakeholder survey
• All CEWE brand products are produced climateneutral since 2016
• CEWE already achieved the climate targets originally set for 2025 in 2020: 50% reduction of CO2e emissions (scope 1+2, compared to 2015)
• Next goals:
  • » All papers used in production FSCcertified by 2023
  • » Climate-neutral as a company by 2045

CEWE acts in many dimensions of sustainability

Social commitment

• » CEWE donated 1.5 million euros to charity and local communities in 2020
• » CEWE fosters photo festivals and photo culture across Europe every year

Responsibility for employees

• » CEWE regularly issues employee shares
• » CEWE offers many programs to enhance the work life/family balance

"Ehrbarer Kaufmann"

» CEWE acts on basis of the CEWE-Customer Charter for responsible digitisation

CEWE wants to be a pioneer in the industry

CEWE has already taken many steps to make its product range more and more environmentally friendly

» Advent calendar with a 100% biodegradable interior

» CEWE PHOTOBOOK Pure produced with recycled paper

Systematic analysis of the entire product portfolio

CEWE wants to know how sustainable materials and processes really are

• Self-developed methodology evaluates all CEWE products regarding the sustainability aspects of ecology, society and economy
• Assessment based on more than 40 criteria along the product life cycle
  • » raw materials
  • » supply chain
  • » production
  • » use phase
  • » end of product life

Targeted identification of potential for improvement

Optimized sustainability of all CEWE products

CEWE introduces "Supplier Sustainability Award"

Incentive, to raise awareness, to learn from each other and to pursue joint projects

» Fujifilm Europe B.V. received the CEWE Supplier Sustainability Award in the 'large enterprises' category

Fujifilm Europe B.V. was awarded for the joint product development project of Fujifilm and CEWE for creating FSC® certified photographic paper, thus setting a new industry standard.

» Schmidt GmbH - a supplier of wooden rails and stretcher frames - won the 'medium-sized enterprises' category

Schmidt GmbH was awarded for an active exchange and for addressing possible improvement options in the area of sustainability in its cooperation with CEWE, as well as for the company's outstanding commitment in the field of environmental protection.

4. Financial details

Consolidated profit and loss account

Figures in millions of euros	2019	2020	∆ %	∆ Euro mill.	in COP and RT
Revenues	720,4	727,3	1,0%	6,9
Increase / decrease in finished and unfinished goods	0,2	-0,4	-322%	-0,6	(+) Reversal of accruals
Other own work capitalised	1,0	1,3	28,3%	0,3	(+) Gains resulting from foreign exchange differences
Other operating income	22,2	23,0	3,8%	0,8
Cost of materials	-187,5	-170,1	-9,3%	17,3	(+) Material expense ratio declined in line with change in turnover structure
Gross profit	556,4	581,1	4,5%	24,8	PF  / COP  / RT 
Personnel expenses	-197,0	-196,1	-0,5%	0,9
Other operating expenses	-245,4	-249,9	1,9%	-4,5	(+) Job cutbacks in the business areas COP and RT
EBITDA	113,9	135,1	18,6%	21,1	(+) Social security insurance benefits (short-time work)
Amortisation/Depreciation	-57,1	-55,4	-3,0%	1,7
Earnings before interest, taxes (EBIT)	56,8	79,7	40,2%	22,9	(-) PF business driven (mail-order shipping costs and retail partner commissions)

Rounding differences may occur.

(+) Sales growth in PF (+8.9%) compensated corona-related declines
in COP and RT
(-) Losses from exchange rate differences and allowances for bad debts
(+) Slightly lower advertising costs
(+) LASERLINE restructuring costs in previous year
(+) Discontinuation of the LASERLINE production site in Berlin
(+) Changeover to a units-of-prodution-oriented depreciation at SAXOPRINT (-) Restructuring accruals for optimization of shop structure in retail

Balance Sheet

From Balance Sheet to Management Balance Sheet

Management-Balance Sheet

• »Capital employed increases due to the cash position
• »Operating net working capital reduced for various reasons

Free cash flow

46

» Above all, customer payments (mail order business) and postponed tax payments have led to higher cash flows, which will lead to higher cash-outs to retail partners and tax authorities in Q1 2021

• » Acquisition-free year reduces cash flow from investing activities
• » The free cash flow increases by a total of EUR 67.7 million

ROCE

»Positive development of earnings increases ROCE to 20.6 % (despite IFRS 16 Leasing Accounting since 2019)

5. Innovation

Digitization with responsibility

Digitization with responsibility

of court			DE EN
About us Investor Relations Sustainability Press B2B		Contact
	Corporate Group Areas of Business Digitalisation Responsibility Experience CEWE
Business areas in which artificial intelligence is used
Area of Business	Area of application	Purpose
Research & Development/ IT	Design assistants in the CEWE software	Better image selection and filtering through classification and evaluation (e.g. according to persons, image quality or location/time of recording)
Research & Development/ IT	Organization and search in CEWE MYPHOTOS	Analysis and indexing of photos to enable searching by place, time, objects and people
Research & Development/ IT	Event detection in CEWE software and CEWE MYPHOTOS	Identify and name important events by intelligently grouping photos
Marketing and distribution	Control of SEA campaigns (search engine advertising)	Better reaching of target groups for specific products
Production IT	Upscaling of photos in print using an artificial neural network	Improving the print quality of products with customer photos that are too low in resolution for the product
Customer service	Voice recognition CEWE Recognition of various concerns and extraction of information Service-Bot from texts entered by the customer in dialog

Super resolution

AI-based resolution enhancement for printing

• Challenge through messenger pictures
  • » Low resolution & compression artifacts
• Approach
  • » Resolution increase through artificial intelligence (GAN)
• Products season 2020
  • » Wall art, advent calendars: every fourth picture improved
  • » Wall calendar A2: two of three images improved

Photo selection and distribution

Holding together photos that "belong together"

6. Outlook 2021

EBIT development: e2021

in Euro millions

CEWE Group Targets 2021

Targets		PY 2020	Target 2021	Change in %
1 Photos	billion photos	2.34	~2.3 to ~2.4	-2 to +3
CEWE PHOTO BOOK	millions	6.52	~6.4 to ~6.7	-2 to +3
Operational Investments 2	Euro millions	35.6	~48
Revenue	Euro millions	727.3	710 to 770	-2 to +6
EBIT	Euro millions	79.7	72 to 84	-10 to +5
EBT 3	Euro millions	76.4	70 to 82	-8 to +7
4 Earnings after tax	Euro millions	51.9	48 to 56	-8 to +7
Earnings per share	Euro	7.20	6.60 to 7.73	-8 to +7

1 The number of photos is the sum of the images with which CEWE photo products were designed and refers to all images that are used in value Rounding differences might occur. -added products (e.g. CEWE PHOTOBOOK, CEWE CARDS, CEWE CALENDAR, CEWE WALL PICTURES and other photo gifts)

2 Outflows from investments in property, plant and equipment and intangible assets, netted against inflows from the sale of property, plant and equipment and intangible assets; without acquisitions/company acquisitions 3 Without subsequent valuations of equity instruments

4 Based on the normalized group tax rate of the previous year

»The ranges of these 2021 targets reflect the uncertainty that is currently arising from the pandemic and potential effects on CEWE's business development

7. Q&A-Session

CEWE Annual Press & Analysts' Conference 2021

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. Due to this, rounding differences might occur.