Cewe Color on track: Profit per share to be doubled in 2010

The return on capital employed (ROCE) was doubled over that of the previous 12-month period, from 7.0 % to 14.1 %. For the first time in six years, Cewe Color generated an accumulated positive cash flow (11.6 million euros) as early as in the third quarter (Q1-Q3 2009 -10.3 million euros). The capital ratio increased by 3.2 percentage points to 42.4 %. "On the basis of the first three quarters, we are right on track to achieve our annual targets and to double the profit per share to two euros", says Dr. Rolf Hollander, Chairman of the Board of Management of Cewe Color Holding AG.

Cewe Color invested considerably in its marketing efforts as early as in the third quarter. At 9.3 million euros, these expenses in the third quarter exceeded those of the same period of the previous year by 4.2 million euros. The effect is clearly measurable: The unsupported brand awareness of the Cewe Photo Book in the relevant target group in Germany rose from 15 % in April 2010 to 22 % in September 2010. "Enhanced brand awareness secures the pole position for us in the decisive fourth quarter. The number of buyers who are aware of brands and quality is growing in all the markets. The brand is creating increasing reliability and orientation when decisions to buy are made. Our retail partners also benefit here," Dr. Hollander explains. In the fourth quarter, which is decisive for earnings, Cewe Color would benefit from the advance investments made in the third quarter and another marketing campaign would not only achieve a clear boost in sales and earnings, it would also enhance brand and customer loyalty for future decisions to buy. Cewe Color will probably invest a total of around 24 to 26 million euros in marketing in 2010 – 6 to 8 million euros more than in the previous year. Dr. Hollander: "The strong basic trend in the development of our earnings enables us to invest in our consumers’ future decisions to buy through marketing activities and at the same time considerably increase our earnings despite these upfront expenses."

With an 83.6 % proportion of digital photos in the third quarter, Cewe Color achieved a new record and impressively demonstrated that the transformation from analogue to digital photography had been successfully accomplished. At 1.8 billion photos by the end of September 2010, Cewe Color is on track to achieve its annual target of 2.35 billion photos. The CEWE PHOTO BOOK remains the growth driver: sales rose by around 19 % to approximately 2.7 million CEWE PHOTO BOOKS, thus continuing to exceed the forecast annual growth rate of 17 %. The trend towards products of a higher quality is stable, with turnover per photo in the first three quarters of 2010 rising by 5.8 % over that of the same period in the previous year.

On the basis of the third quarter, the management is confirming all the targets set for 2010. The Board of Management expects to see exchange-rate adjusted turnover increasing to between 420 and 430 million euros. Key earnings figures are to develop clearly above average: the Board of Management expects EBIT to grow over that of 2009 by 28% to 55 %, to between 24 and 29 million euros; at the same time EBT is to rise from 16.8 million euros to between 22 and 27 million euros. After-tax earnings are forecast to rise from 6.7 million euros to around 12 to 15 million euros. This means that earnings per share are to double from one euro in 2009 to between 1.76 and 2.20 euros (a rise of between 76 % and 120 %).