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CeWe Color Company Presentation

CeWe Color Company Presentation. Close Brothers Seydler Small & MidCap Conference. Frankfurt, February 3, 2010.

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CeWe Color Company Presentation

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  1. CeWe ColorCompany Presentation Close Brothers SeydlerSmall & MidCap Conference Frankfurt, February 3, 2010

  2. This presentation contains forward-looking statements that are based on current assumptions and forecasts of the management of CeWe Color. 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 eventsor developments. All numbers are calculated as exactly as possible and rounded for the presentation. Due to this, rounding errors might occur.

  3. Agenda

  4. Agenda

  5. 2010 corporate structure (in January 2010) • 13 production plants • 24 European countries • 2,700 employees • 1,300 courier service drivers • 50,000 retail partners (PoS) • (- 35,000 PoS supplied direct by CeWe Color • - 15,000 PoS supplied through customers‘ logisticsystems) • 191 retail stores in • Central Eastern Europe and Norway • EUR 420 million revenue (2008) Production sites • CeWe Coloristheleadingphotoservicecompany in Europe

  6. 50,000 trade partners in Europe Pharmaceuticalmarkets Photo retailers Internet retailers Home electronics stores System partners Food retailers and department stores • Wereachconsumersthrough strong retailbrands • Retailpartnersinvest in distributionandmarketing • Retailsaleschannelswith online retailersandsystempartners

  7. Different ways to order CeWe products Ways to order Website 1 Internet / Online CEWE PHOTOBOOKSoftware 2 Film / datacarrier in a photoenvelope 3 Point of sale DigiFotoMakerburns CD or sendsdata online 4 DFM-Kiosk withprinter producespicturesat the POS 5 • CeWe offers allpossiblewaystoplace an order • Page7

  8. Overview CeWe products Prints from digital and analogue cameras Photofinishing Products CEWE PHOTOBOOK Photogiftarticles and Print products (e.g. calendars und greetingcards) • Digitalprintingbecomesmoreimportant • Page8

  9. Personalised photo products 2. Wall decoration 3. Print products 1. Photo gift articles • Added-valueproductstogenerategrowth

  10. Photo gift articles 1 Shoulder bag Mug Mousepad Sports bag Lunch box • CeWe offers a widerangeofphotogifts

  11. Wall decoration (1/2) 2 • 14 formats, from: 20x30 cm to 90 x 160 cm • 5 formats with shadow gap frames • A photocanvasis an attractive wall decorationelement

  12. Wall decoration (2/2) 2 Poster behind acryl glas Poster on aluminium composite plate • CeWe offers a widerangeofposterproducts

  13. Print products 3 Desk-top and wall calendars Greeting cards and post cards Notebooks for students and pupils • Personalisedcards, calendarsandnotebooks

  14. CEWE PHOTOBOOK • The top seller

  15. CEWE PHOTOBOOK Hard cover Soft cover Canvas cover Photo booklet • Widestrangeofproducts • Highlyattractive for retailersandconsumers

  16. CEWE PHOTOBOOKNewCEWE TOPIC PHOTOBOOKS Winter holiday Summer holiday Scrap design • 12 new CEWE TOPIC PHOTOBOOKS, e.g.,summerholiday,winter holiday, baby, scrap-design, soccer, wedding…. • 2 new CEWE PHOTOBOOKS formats Baby

  17. Commercial customers of CEWE PHOTOBOOKS Jewellery designer Building constructor for half-timbered houses Bathroom fitter Veterinarian surgery • Commercialcustomersuse CEWE PHOTOBOOKS as a promotionbrochure

  18. CEWE PHOTOBOOKAwards ETM TestmagazinApril 2009 Stiftung WarentestAugust 2009Partner: Saturn MacweltDecember2009 EISA Award2009 – 2010 • Page18

  19. Agenda

  20. Here is why to invest in CeWeColor Reduced extra burdens Analogue to digital transition completed Growth Mega trends as a growth driver: individualisation / personalisation 1 2 3 4 Cash Flow grows*: Reduced investment volume Additional growth through web-to-print for commercial digital printing Profit grows*: No restructuring one-offs due to analogue / digitaltransformation Growth in photofinishing with CEWE PHOTOBOOKS, photo calendars, greeting cards and other gifts • Limited downside risk: • High equity capital ratio • Strong cash flows 5 * Ceteris paribus

  21. Timeline of restructurings 1 Photos (analog + digital) in billion units Number of production sites • Capacityreduction in linewiththevolumetrend • Remainingoperationsmoreefficient • Page21

  22. Restructuring expenditure 1 Restructuring expenditure caused by the analogue-digital-transformation in million Euros • From 2010 on normorerestructuringexpenditure willoccur due toanalogue/digitaltransformation • Ceterisparibusprofits will increase by approx. 10 million Euros from 2010 on

  23. 2 Investments in digital capacities Digital photos in millions Investments In million Euros Investments > EUR 225 million 2.0 billion digital photos in 2009 40.4 37.2 36.2 35.5 33.3 32.5 29.5 1,786 27 1,515 1,114 830 509 170 39 • CeWe hasconsistentlyinvestedmorethan EUR 225 millionin buildingup digital businessearly • Capacityarelargelysufficient. From 2009 on itmaybepossibletoreduceinvestments • Page23

  24. 3 Brand awareness in European keymarket Germany CEWE PHOTOBOOK rankingpositionin unaidedbrandawareness in Germany #1 • Topbrandawareness in keymarket Germany • Page24

  25. 3 Photo book Volume Demand (M) Retail Value (€M) Photo book market development: Western Europe Source: Futuresource consulting Ltd • The photobookmarketis still growingstrongly

  26. 3 Photo book development by manufacturer: Western Europe Photo book unit sales (in 000’s) Source: Futuresource consulting Ltd Photobox Photoservice Hofmann Albumprinter Infowerk CeWe Color Unit sales of CeWe even amounted to 2.6 million books in 2008 (3.6 million books in 2009) Others • CeWe isthe European photobookmarketleader

  27. Growth Opportunity Photo Products: Western Europe 3 * Market Value Growth, 2007-2008 Source: Futuresource consulting Ltd • CeWe participatesfully in themarketgrowth * Retail value • Page27

  28. Commercial digital printing 4 CeWe Color acquired the company diron on October 1, 2008. Objective: Entering in the digital printing market for commercial customers • Commercial digital printing – a newpillarofthebusiness • Page28

  29. Business concept of diron 4 Customers Printing technologies Employees 2007: 24 Revenue 2007: app. 2.1 million Euros Digital printing • Core competences • print4media Web-to-Print standard software • „Sound Project“-experience • Operating major customers • Sales experience in printing and advertising market Offset printing • Diron issoftwaremarketleader in the Web-to-Print area • Page29

  30. 4 Two directions of diron:From large enterprises to SoHo Large enterprises: Project solutions SoHo & SME:Public solution www.aprinto.de – a brandofdiron® GmbH & Co. KG, a CeWeColor company • dironofferscommercialprintingservicesforbusinessesof all sizes • Page30

  31. 4 aprinto.de – step 1: Choose product • Broad choice of highqualityprintproducts • Easy-to-useinteractivepricing • Page31

  32. 4 aprinto.de – step 2: Upload file • Documentsofmanycommonformatscanbeprocessed • Page32

  33. 4 aprinto.de – step 3: Finetune positioning • Position ofcontent on pagecanbeadjustedeasily • Page33

  34. 4 aprinto.de – step 4: Design cover • Cover sheetisdesignedeasilyusingthedocument‘sfirstpagewith no hazzle • Page34

  35. 4 aprinto.de – step 5: Approve print preview … and go! • Printed end productcanbepreviewed on screen, likewithprintfunction in anydesktopsoftware • Convenientdelivery • Page35

  36. 4 aprinto.de – additional function: store and share • MANAGEthedocuments in an online repository. • SHAREthemwith a direct link, so thatco-workersorcustomerscan order copies as needed. • Page36

  37. 4 aprinto key value proposition and next steps • Professional printproductsas easy as„File – Print – …“ • Order oneoranynumberofcopiesasneeded • Online repositoryprovides a documentmanagementsolution on-the-fly, accessible 24x7 fromeverywhere • Share and distributeprintproductsbysimplyforwardingthe product link orembeddingit on your web site • Page37

  38. Enterprise Customers: Project Solutions 4 EXAMPLE 1 data vestors Investors IR Manager testreport • Diron and EquityStory AG: higherqualityandlowercosts in on-demand IR communication • Page38

  39. Growth in revenue for various product groups 4 3 CONCEPTUAL Prints from films Digital prints Photo gift articles(e.g., photo calendars, photo greetingcards) CEWE PHOTOBOOKS Business Printing Retail 2006 2007 2008 2009 2010 2011 2012 • Growththrough digital printing (CEWE PHOTOBOOK, photocalendars, greetingcardsandbusinessprinting) NB: Containsonlyrevenuesfrom product groupscurrentlysold or in the developmentstage • Page39

  40. Two CeWeColor growth phases 4 3 Revenue (shown as a diagram as of 2010) Growth I Transformation Growth II Analogue Digital Transformation phase analogue / digital Analogue Regional expansion in the analogue market Growth stimulated by digital business Digital Retail • CeWe accomplishesthetransitionprocess • CeWe is in thesecondstageofgrowth

  41. 3 4 Market entry barriers by product market CONCEPTUAL Commercial digital print market Time Consumer digital print market Analogue silverhalideprintmarket Digital silverhalideprintmarket vs. software/marketingcompanies starting printing vs. traditional printing companies CEWE PHOTOBOOK software Combination of software and productionKnow-How Economy of scale in production • Web-to-print • Know-How • Abilityto manage mini-orders in backend • Digital printingKnow-How Marketentrybarriers Economy of scale in after-printing production processes (e.g. book binding) Economy of scale in production Physicaldistribution Economy of scale in after-printing production processes (e.g. book binding) Physicaldistribution • Level ofmarketentrybarriersisrisingagain

  42. Financing at CeWeColor 5 Solid equity ratio Strategically strong position Strong cash flows Operationally strong position Financing is secured: Credit lines only 50 % used High degree of credit worthiness among banks • Financingissecured • Downsideriskis limited • Page42

  43. Shareholder structure (January 2010) 27.4% ACN Vermögensverwaltungs- gesellschaftmbH & Co. KG (Community of heirs of Senator h.c. Heinz Neumüller) 7.8% Nord LB* 6.7% SentosaBeteiligungs GmbH 6.3% Guy P. Wyser-Pratte 5.0% CeWe Color Holding AG 4.3% Lincoln Vale European Partners 4.0% Sparinvest Holding A/S 32.9% other shareholders 7.38 millionshares 52.0% Free Float (according to Deutsche Börse) according to reports under §§ 21, 22 WpHG * According to own information • Community ofheirsofthecompany‘sfounderisprincipal shareholder of CeWe Color Holding AG • Solidbaseoflong-termorientatedshareholders

  44. Trade volume 2008 and 2009 Average number of traded shares per day in units 2009 2008 • Avaragetradevolume on significantlyhigherlevel

  45. Agenda

  46. Photos 2009 Digital photos (incl. CEWE PHOTOBOOKprints) in million units Photos total in million units Photos from films in million units + 14.0% -0,8% -32.6% • Digital photos: +14% • CEWE PHOTOBOOKS are essential growthdrivers • Product mix ofhighervalue • Page46

  47. CEWE PHOTOBOOK increases +37,7% Number of CEWE PHOTOBOOKS in thousand units 3,644 2,646 1,515 526 71 2009 2005 2006 2007 2008 • Very positive volumeincreaseof 37,7% generated by • CEWE PHOTOBOOKS

  48. 2009 „Outlook“ First actuals Colourphotos digital 2.0 1.9 billionphotos+6% +14% analogue 0.60.5 billionphotos-38% -33% total 2.6 2.4 billionphotos-8% -1% CEWE PHOTO BOOKS 3.6 3.5 millionbooks+35% +38% Sales (exchange-rate adjusted) EUR 420-425 million0% to +1% Sales (nominal) EUR 405-410 million -2% to -4% EBT beforerestructuring EUR 20-25 million-9% to +14% ExpenditureforrestructuringEUR 10 million-9% Earningsbefore tax (EBT) EUR 10-15 million-9% to +36% Capital expenditureEUR 27 million-19% Net cash flow EUR 15-20 million+6% to +42% Change against 2008

  49. Agenda

  50. Turnover 2008 Turnover in million Euros +1.6% • Increases in sales in 2008 in retailbusiness, Central Europe, Benelux and Central Eastern Europe andthanksto a strong fourthquarter

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