CEWE Stiftung & Co. KGaA Stock

Welcome, ladies and gentlemen, to the earnings call of CEWE Group following the publication of the first half year figures of 2026. I would like to welcome CEO, Thomas Mehls; and CFO, Sirka Hintze, who will speak in a moment and guide us through the figures.

[Operator Instructions] The recording will be stopped before the Q&A session.

And having said this, Mr. Mehls, the stage is yours.

Yes. wonderful and very warm welcome and a very good morning to all of you.

Yes. Also from my side, very warm welcome.

Yes. It's a beautiful day in Oldenburg. The heat is not yet up. So I'm sure we will look into a very beautiful summer day today. And you know, summer is an important time for our clients to take a lot of pictures, and I hope either you had your holidays already and took a lot of pictures and are in the face of preparing your personal photo product, or you will be still going on holiday and do so.

We have a very good call this morning. So we are proud to announce very good figures for the first half year. The Q2 was a really strong Q2. And also, we would like, obviously, to reiterate our very beautiful story of the acquisition we did announce actually during my holidays. So I know some of you have been on this call, but not all of you. So of course, we will reflect on this acquisition, which we announced in July where we had this signing. So I would say, a call with good news for today.

And well, let's start. And let's start with the latest news, which are, of course, no news anymore, but it's important to reflect a little bit to give you, again, our view on why we did so, what is going to happen, what is the outlook for the Kodak Moments acquisition. And well, we acquired the Kodak Alaris, and I will come to that one. It sounds all a bit complicated, but in fact, it's very easy. The global instant photo business of Kodak Alaris, which is called Kodak Moments, and which is important. It's a very strong brand, and it's something which will strengthen our brand portfolio here.

So you know us, we are not only the CEWE brand. We are a so-called, house of brands. We are mentioning a diverse portfolio of brands, maybe [ Pixel, ] may be White Wall. And we will add a really strong and international, and we can say, global, a really global brand to our brand portfolio, which, of course, is based on the iconic Kodak brand. You all will know it. It's a brand which emerged in the film business, which is still very strong. Of course, it had its challenges. But I will show you the Kodak Moments brand is a fresh brand, it's a strong brand, especially in the U.S. It's a young brand also, Kodak Moments, I mean, if you happen to look it up in a dictionary, it's something which found its way into dictionaries and it's defined as something, which is really a moment which is a [ charming and memorable ] moment and which was really the -- this brand was loaded by social media in the past 10 years, especially in the U.S.

So what is Kodak Moments doing? So it's very similar to what we call our on-site finishing business. So if you happen to live in Germany and you walk into a dm drug store, for example, you might find our red CEWE photo stations or if you happened to live in the U.K. you walk into Boots store, you will find our CEWE photo stations, or if you happen to live in the Netherlands and you walk into a [ Kruidvat ] store, you will find them. And if you happen to live in France, and you walk into [ E.Leclerc, ] you will find the CEWE photo stations there where you can print on-site. This is why we call it on-site finishing, we can print on-site your pictures.

And this is a very similar business. So they provide the hardware. You can see this in the upper right corner into retail locations. Obviously, they provide software for this hardware. Obviously, they are products, which consumers actually can print on with different designs and forms and shapes and whatnot. And I will come to that in a little bit. Kodak Moments also produces the, as we call it, the kind of technical term, the consumables. So the media kits, which go into this hardware because if you want to print something, there must be something inside, and I will come to this in a little bit. They have the strong advantage and this is one of the strategic rationale, the strong advantage of having a production facility producing these consumables.

So well, you see here for the first time, I would say for the first time in one of our analyst call, actually, we are showing the globe. We're not showing Europe, and I will come to that in a minute. We are showing really the globe because Kodak Moments is serving retailers around the globe and not only some retailers, really strong retailers. And if you have been to the U.S., and I'm sure you have been to the U.S., you know CVS, you know Walmart. Latin America Farmacias, one of the strongest drug stores chain in Mexico, Kmart in Australia.

But well, maybe your summer holidays took you to Disneyland in Paris, could be or will take you to Disneyland in Paris. Kodak Moments is also very active in amusement parks. Disneyland is a very good example for that one. So if you're on the rollercoaster, and this is really, I would say, top-notch technology, which is built into Disneyland Paris, you can imagine at the right moment, in a rollercoaster pictures have to be taken, you can see them on screens, you can buy them as a digital product, you can buy them as a printed product. So they're also in locations like that.

And well, talking about technology. With this deal, we also bought about 400 patents in the sphere of on-site finishing here. So also very interesting, well, patents are important in today's world. So we also acquired about 400 patents. Well, if I say we did acquire, we have to be sure we will acquire because, yes, we signed the deal, but the closing is not yet done. We will come to that in a minute. So forgive me for this one.

So Kodak Moments in a more, let's say, fact-based sheet here. What is that company about, it's about EUR 200 million of turnover. We will have 500 new colleagues joining the CEWE Group, including some of the production. I will come to that one in a minute. They are serving 16,000 points of sales directly with 37,000 connected photo stations. We have about 25,000. They serve also a lot more, which are not connected, but that's a different business. They do about 1.5 billion prints annually. We do, in our on-site finishing, about 400 million, just to give you a little bit of order of magnitude here. And as said, they have a production site in Windsor, Colorado. The main office of Kodak Moments where most people are being employed is in Rochester, which is Upstate New York. So I would say closer to Toronto than to New York City.

Yes. And again, this is the map. Well, we would have focused a bit more and just show you the European map, that's the map you have been used to. This is where the CEWE Group is being present. We are present in most European markets. You know we are the European market leader and, now we will add the global scope of the network of Kodak Moments. CEWE, your company, well, if you're an investor and if you're not yet and want to become one, your company will become a real global company with activities around the globe, the main ones, the key markets there are the U.S., Mexico, Canada and Australia. This is where most of the revenue outside of Europe because they are active in Europe as well, outside of Europe is taking place. So we are adding really new key markets.

And well, this, I told you what they are doing. It's a brand which connects with consumers at the point of sale. This is something which always made CEWE very special. We talked a lot on these calls about omni, I think, it's omnichannel, omnichannel here, which we are driving. And this, of course, strengthen and will strengthen our omnichannel position around the world. So it's something which made this company always special. This is how we grew the business and this is how we will be growing the business as well, and retail has been important and is still very important for CEWE, which is very different to some of the competitors, which limits them in their growth as well.

Yes. I told you, and this is nice. These are our photofinishing brands, and now we will add Kodak Moments to that one. We made it a bit bigger and put it more to the center because this is the news, obviously, here.

I talked to you about the production. So what is production? What does production mean? If we talk about Kodak Moments, it's about -- this is the subline, you see it here on the side, on the sign, the thermal media manufacturing. This is a photo actually in Colorado. Yes, and this is how it looks, a bit dry. Well, we know that now in Germany and in Europe, it's a bit dry as well here. So it's a bit dry. There's not a lot of round. So it's really -- it's in the -- close to Denver, Colorado on the footsteps of the Rocky Mountains. So Rocky Mountains is quite nice, but down there pretty dry and, well, flat land where not a lot is happening actually.

And why thermal media? Well, that's the technique that most photo stations around the world use in order to print on paper. So there is not an inkjet print or a laser printer in there. So it's a thermal media. That means there's a so-called ribbon, which connects with a paper and the ribbon brings basically the color, the color of the picture on to the paper. This is a thermal process, which takes place within the photo station. And of course, this material must be produced.

And this is a photo from the manufacturing side in Windsor in Colorado on the so-called wet end. So this is a [indiscernible] printing machine. It's a huge machine, a lot larger, a lot different to what we used to have here. It's about, I don't know, about 50 meters long, if I would guess about, I don't know, 8 meters high. So it's a monster, I would say, with the large cylinders. And there, they print on these ribbons, it's a very thin -- I don't know, it's about a 1/10 of a millimeter. It's a very thin foil, which will then connect with a paper. So this is the process which takes place here in the so-called wet end. And then there is a dry end, right? It means there's no printing, no chemicals involved where those so-called media kits, which at the end, go inside the photo stations are being produced.

We also, at CEWE, have these media kits. We have them as well. But as of now, we buy them. We buy them from different suppliers. They're all from Asia. We have had challenges also in securing our supply chain. You might remember the crisis we had in the Suez channel and so on and so on. We had quite huge dependencies. So with this step actually, it's a vertical integration, what we are doing, and we make ourselves a bit more independent from the suppliers, which is an important part of the strategic rationale we do here.

So what's happening? And this is what makes this deal a little bit more complicated than just a normal acquisition. It's a carve-out. So there's a company called Kodak Alaris, this Kodak Alaris company actually emerged when Eastman Kodak went bankrupt in 2012, and this company was spun off. And in this company, there are basically 2 main business units and in the one, there are also 2 main business fields.

So two main business units, one is Alaris, they call it mostly Alaris, not Kodak Alaris anymore. It's a B2B field where they produce scanners. So actually, they produce the machine, the hardware, the scanners on -- for companies which have a huge amount of scanning documents, libraries and things like that. So a totally different business, nothing we are in, and we don't want to be in there, to be quite honest.

And in the Kodak Moments business unit, they have the Kodak Moments brands, which is this Retail Photo Solutions. I talked about this one over the last couple of minutes. And then there is the Film, actually distribution, analog, 35 millimeters film for cameras, which carries the Kodak Professional brand. And we will be carving out this retail photo solution business out of Kodak Alaris. We will take the Kodak Moments brand out of Kodak Alaris. It's a perpetual recurring license from Eastman Kodak, so we don't buy this brand, but it's irrevocable, so it's forever. So forever, we are allowed to use and work with this brand.

So this is the transaction scope. And it does make also for finance, this transaction, a little bit more complex than others, right?

So a couple of key facts again. I talked about the carve-out here. It's part of Kodak Alaris. And of course, this closing is subject to regulatory approvals, and we expect completion and there are a couple of more closing conditions, as you can imagine, in this deal that are just regulatory things, the carve-out has to be managed, so within 6 to 12 months, that's fair to say.

So we have transaction pre-closing costs. You saw that in the announcement of our figures. Well, that's part of the deal. Nothing special about. It's well calculated in our ROI calculations. So nothing to worry about. But well, you need to hire a couple of lawyers. You need to hire a couple of people, which do due diligence. I mean, you don't want to run -- we don't want to run and you don't want us to run into blind into such an acquisition. We need a good contract. We need a good due diligence with that, so there's some costs associated with that one.

The purchase price, we communicated that. So the enterprise value is about EUR 88 million. And then, of course, there's an equity, there's a bridge then. And we assume that there will be a cash out of about a little bit more than EUR 70 million, depending on the final bridge there. And the profitability, yes, this currently, because it's something which was owned by a private equity for a long time. They have not invested. They have not really been growing. They have not acquired new retail partners. New retail partners used a little bit of investment there.

So we will start with a single-digit profitability. So it's a profitable business. We did not acquire anything, which is like distressed or something like this, but it's something which will get a lot more profitable under our hood. So this is important to note here.

Strategic rationale, and I think I reflected a little bit already in my speech here. So it's really the combining strength of 2 strong brands. CEWE is very strong in Europe. To be quite honest, nonexisting outside Europe. Kodak Moments is very strong outside Europe. So it's something we see the opportunity and our instant photo business to grow, our instant photo business growing. And we will be having a stronger growth here and obviously also adding more geographies brings growth to us. But we will be growing the Kodak Moments business, so it's not about acquiring a stable business, it's about acquiring a growth platform here.

So this is the second point here. Yes. So we want to scale the business geographically, adding more retailers. We have a huge chance for adding a real growth engine to the CEWE business. It's a very high strategic fit. Well, if we talk about strategically, we also have to talk about people.

I realized I didn't talk about people, but that's also very important. I mean if we do an acquisition, we look really closely to the people. Will those people fit our culture? Can we build a combined company here, which is based on the same values. And we found very passionate people, very, very enthusiastic people about photo, very enthusiastic people about us acquiring that business, very enthusiastic about that, quality-driven people. So this is really a great bunch of people, which will be joining the CEWE Group. We are very proud, and that was important for us as well. So we can talk about revenue, we can talk about profitability, we can talk about strategy. But to have the right people on board is really important, and we have the feeling that this group of people fits perfectly to our group of people here.

And again, omnichannel is a very important point. We have been driving forward this omnichannel approach. If you look at what we do with our retailers here, and we see a lot of chances to add exactly the same notion to Kodak Moments. So again, part of the growth story here.

We believe in retail. We see it. We see it every day. What's happening here. We get a -- it's the entry point for many, many people connecting with our brands. I just invite you to go into these retailers, look into the retailers and see what, especially young people are doing the Gen Z. This is the target group of on-site printing. I mean if you go into any dm around noon time, you see a lot of people after school, young girls especially looking at beauty products and printing pictures. So this is a really highly attractive target group, which we will be -- well, adding actually, well, we are addressing the target with CEWE, but adding geographically here with this acquisition.

I talked about the international expansion. New core markets are being added to our portfolio. First, the U.S., Canada, Mexico and Australia, really strong markets, and we see a lot of potential for growth, especially in these markets. May there be even more growth options, we have been seeing that there is India on the map, there is China on the map. So looking at the current revenues, which Kodak Moments does in these markets, this is currently rather small. There might be even more potential there, but this is not factored into our thoughts as of now. But we might be looking in, I don't know, 1, 2, 3 years into that as well and see if there's more potential there.

And I talked about the vertical integration. It's more control. It's value creation. It's securing the supply chain. So a very important step here for us to be more vertically integrated in this important business field.

Yes. What's going to happen? I mean signing -- well, it's not today, but it was back about, what, 3 weeks ago, something this -- we did the signing. Obviously, we are in the preparation now for closing there in the preparation closing. We are really on full throttle here. There are a lot of things which needs to be done. But obviously, we have a high interest to shorten this period of time as much as possible. They have high interest to shorten that one. So I can't tell you, there's so many dependency on there, but we expect about 6 to 12 months to closing.

And then it's about integration and growing the business. I mean, really, this is a growth case, which we acquired. This is a growth case, which adds profits already, and we'll be adding profitability as well. There's a lot of scaling options in there. So we are very strong about this one. This case changes the CEWE Group dramatically for the better, really for the better.

So yes, Isn't that nice? It's about Kodak Moments, the CEWE brand is about joy. We thought, isn't it nice that we could create moments of joy together now, and this is what it's all about. So these 2 brands really, and these 2 businesses fit very well together.

So going a little bit more into the strategic perspective here. We also completed our sale of the commercial online print. I mean, to be quite frank, this is also only a couple of weeks ago. I mean, it's not like half a year or a year or 2 years ago. This is just a couple of weeks ago. We changed the scope of the strategy. Well, not the strategy because we talked to you, the 2 of us talked to you about a year now, about what we are going to do with CEWE. We told you we're going to focus on photofinishing. And well, obviously, that, to focus on something means where you don't focus, where you are may be defocused in some ways. So I mean, it's always easier to say what you want to do. But if you say what you want to do, you also need to say what you don't want to do anymore.

And this is what we did. We did a very nice transaction on the Commercial Online Print division. We have been seeing some costs in Half 1, 2026 here, and you will see that in Sirka's presentation. But there will be a strong benefit coming up in the second half of the year in Q3. The closing has been done beginning of July. And obviously, we expect pretty high nice effect, we would come back to that one, which you can see -- we'll be seeing in our Q3 figures. So this was strategically very well for the CEWE Group, but it was also operational as the deal was a very good deal for the CEWE Group.

So this,we, first, almost forgotten, Sirka, a little bit. But it's the first time in our analyst call that we can actually talk about the closing being done here, and this has a high impact, but it's something very consistent to the strategic rationale, which we have been talking to you for the past 12 months. We sold that. It's closed. It says here, completed effective July 2.

So we are a photofinishing company. We are a brand company. We are a house of brands focusing on photofinishing, and now we are global. So yes, the sale, it says here also improved CEWE's financial figures. You can say that we talked to you about that one. And now combining all these things together, I think you will be looking at a very strong growth engine within the CEWE company.

Now let's look a little bit to our results.

Okay, yes. With this being said, I mean, you probably might remember all the strategic discussions also and information we gave to you. And so coming now back to our results here to the existing business. So we completed the first steps. But also you can see here that we showed the numbers with numbers of our Commercial Online Printing and excluding under accounting ruling, we are going ahead with reclassification under IFRS 5 and take certain effects already out.

But on the other hand, the cash came only in on the 2nd of July. So after finishing the year, the first half year, so that's why Thomas mentioned that the effect, from a profitability point of view, only be seen if we finish the consolidation by the third quarter.

So what can we conclude of our business of Q2. You can see here a significant growth in our revenues, which is, I would say, especially under the circumstances that the German market is very difficult for a lot of e-commerce business, but we still see with this as a core market, we can also see here compared to the previous year a significant growth of 6%, excluding our commercial online business.

So the EBIT is, from an operational perspective, comparable to what we have seen in the previous quarters, which is typical for our season. So a good and solid result on the one hand. On the other hand, we, of course, due to our activities of the first half year, I would say, we spent some money for getting our strategic direction implemented, and this is not for free, of course. So the transaction costs, you can see here will be loaded on our P&L as well. So we have to show also these effects, but still at a later stage, you would see that we stay with our predictions and plans. So we don't take these things away. We'll come later to that.

So the group EBIT for Q2, solid operation, was EUR 3 million. And then corrected by transaction costs for the sale and of course, also the transaction costs that we had to anticipate for getting the signing of our acquisition of [indiscernible] done. So a proportion of that amount will be compensated by the seller at a later stage. And so -- but still we had to reflect. So that's why we have reported in after Q2 of minus EUR 7.4 million.

So having the look on our first half year, in addition to all the activities we had, we can see a strong operational first half year. The first quarter was a bit tougher than the second one. If you would ask our people, they would say, no, it was the other way around because we had really a lot of things here to prepare and get under control, I was saying.

So operational-wise, we are really satisfied. And also from a result point of view, we are not unhappy with our profitability, which is, of course, under -- and we shared it over the last months also market-wise, cost-wise, it's something where we have to be very focused and concentrated on steering all our activities with higher logistic costs, higher material costs. All this is also falling into our field. So we have really to manage these circumstances.

So we promised, and I mentioned it in the beginning, as long as you talk at least also to me on this investor conference, we were sharing that we are focusing on our photofinishing business. And I guess, we not only took ourselves and the management, from a management perspective, a favor also for the team and our Commercial Online Printing business. They have now, I guess, a [ high bar ] where they can also develop and flourishing business in a way that they have their, yes, hometown found with Cimpress. So that's why we can now focus on our photofinishing business, which will be strengthened by the addition of Kodak Moments, and we will have furthermore insights of that in the future while we are preparing the closing and then later integration and really implementing the growth. And I guess also for our -- the people at Kodak Moments, it's maybe also a good move because we have a heart for pictures and photos.

So operating performance, as I said, the turnover continued more than expected, and the result is on a typical seasonal level. So that's why we stay with the guidance for this quarter, so especially also the expected turnover growth. And so we will, of course, have a closer look at the third quarter, but it is expected to stay at the line what we have communicated. So EUR 780 million to EUR 810 million. And the EBIT will stay in the range as what we have communicated.

So let's talk about a little bit more about photofinishing. And so I'm happy to announce that again, we have kicked off our International CEWE Photo Award, which is the biggest on earth. And this year, we have decided to donate EUR 0.10 to Unicef. And so we are happy and very curious to what will achieve our, I would say, our -- how do you say this.

The amount of pictures uploaded.

So the pictures and what we would see there. And yes, pretty nice, and we are very curious. And then also, we proudly present our new product, which was the winner of our internal Innovation Days. It's a corporate, it's developed together with Swarovski. And it shows here in the video, you can see that a lot of Swarovski crystals are at the surface of the picture and creates a very sparkling moment if you look at the picture. So it was, as I said, the winner of our innovation process. And will be presented -- the wall art will be presented in 200 selected, especially bigger stores of Swarovski, and it also creates, of course, a higher visibility of our product.

So coming back from this sparkling moment, coming back to the business segment, photofinishing itself. And here, it's underlining what I have said before, 7.5% increase in turnover alone in Q2. And usually, that period is for taking pictures. And obviously, our customers were already on the way of creating PHOTOBOOKS. You can see also here an increase of sold PHOTOBOOKS by 1.5%, and also with the turnover increase of 3%. And also the turnover per photo. We will see it later continued. And so we are very happy to see this. We are always -- have in mind what is coming up with the season. And if we have good and strong year, we are happy to -- and looking forward for the season because usually, the strength is not really changing.

And looking at the EBIT, I explained a little bit EUR 1.7 million, EUR 2 million, the transaction costs for our acquisition. But overall, the operational result stays comparable to last year. And the seasonal -- the seasonality of our business is significant, and this is a very difficult second quarter for us.

Yes. Here, it comes to a conclusion of the first half year. So as we have a weaker first quarter, you can see the turnover growth of 4.5%. And so all in all, it's not changing the overall picture, and it sums up what was said before. Photofinishing turnover per quarter. Here, you can see also visualize to what I have said before. A good growth in the turnover following the trend, and we are happy to see that the growth is steadily going in the right -- absolutely in the right direction and is a little bit in the second quarter above the target range.

EBIT-wise also for us from an operational perspective, no surprise, and completely within the range and our expectations. Yes, the number of current prints and the turnover created by the photofinishing, you can see here also that we were over what we had planned. And the increase, you can see here what's driving the turnover in photofinishing is not only the number but also the value of the photos, which is following to what we have seen, especially in the second half of last year. So very good.

Yes, summarizing here, underlining the number of total trends increasing and also here, you can also see a little bit of the impact of the first quarter. So 4.5%, which we are happy about.

Number of PHOTOBOOKS, which is our core product. And especially, we are happy about that the higher value of the PHOTOBOOKS continues to increase. So that's especially from our discussions that we are having a high focus in making our PHOTOBOOKS more attractive to customers, creating new features within the PHOTOBOOK, increasing the premiumization of the products, and this is now also a good reflection here in the numbers.

Here, summarized for the first half year. And last time in our presentation, we talked about it, yes.

We heard it last time, yes.

We are going ahead and report a little bit about our Commercial Online Print. We always communicated the challenges of that business unit, and which is driven by the overall market decline and also where our, I would say, manufacturing part or technique and the qualification of our people obviously made a good success out of it. This is still what we see in the first half year combined so that the EBIT is on a level where not really something is really earned, but it's also from turnover-wise, the loss of business is not significant. So they stay with the amount of business which is already, I would say, an outstanding performance of team and technique in these declining markets. And this is -- and we wish and hope that for the second half year of that business so that they are keep going and also can take some positive effects out of the acquisition Cimpress did.

Retail, you probably had a little bit of a question mark because also Thomas mentioned, so we are focusing also in Retail business. So we are investing, we are developing our stores, and we also took the decision to have -- the product portfolio in these stores are more focused on higher margin photo products like frames or photo albums, which are closer to our core business. Also because of the, we call it, hardware, the expensive cameras where we cannot compete with other suppliers like the Amazons and other specific suppliers for that. So we are reducing by that decision, focusing on a different product range. We are reducing a little bit the turnover.

From an EBIT perspective, if you go on the next page for the first half year, you can see it's not too bad, and we are heading towards the breakeven and hope that this decision for -- and it's really the Retail business. And so that we are developing it from a margin perspective in the right direction.

Yes. It's like our other segment. It's very small. It's just to have also a segment where we can put what is not really directly connected to our business. As you can see here is we had a little bit higher profitability because of the improvement in the earnings coming out of the property lettings. So nothing more to be said on that.

So that leads me to the financial details. Having a view on P&L here for the Q2, it's showing or translating what we have said before into numbers. So the increase of revenue, you can see. But also, you can see, of course, here, the group wide view on our cost impacts. You have seen EUR 3 million raw material costs. You have seen the transaction costs and also we have hired a little bit more people for the photofinishing business. So also the increase of personnel costs, you can see here.

If we -- and we come later a little bit more to the effects on our cash flow. We have not only acquired something. We have not only sold something. We have also implemented S/4HANA. And so at most, as you may all know, the last month before you go live, and we had a big bang implementation. So we went live with all our businesses in all the countries at the same day. And we've got prepared for that. And so with the cutover planning and the migration, so also from an operational point of view, we had a little bit to fill our storages and making sure that we are, from an operational point of view, are prepared for that.

I can tell you we had a very smooth go live. So we were, all the time, very curious to see what's going to happen, but not really big things happened, so all was fine. So our plans went in the right direction. So the operational expenses are mainly driven by the advisory costs here. And higher IT expenses, of course. Also we took a bit more speed on getting the things done for the S/4 implementation on the last mile. And so this is, of course, obviously reflected in the cost basis.

So if you have a look into our balance sheet, you can see that we have obviously something going on, on our asset bases. And you remember that in the first quarter, we bought properties in U.K. and Germany. And on the other hand, we sold the business and also the facility in Saxopark in Dresden. And then we did the reclassification under IFRS 5 because then you hold the assets for a short-term basis. And that's why you can see here the jump in the current assets compared to previous years. So that is reflected here. All in all, the relations within the balance sheet are changing.

On the liability side, you can see that the retained earnings and the balance sheet results also the dividend payouts. So also the shares we bought back. So the effects, you can see all in all the balance sheet, some stays at the same level, and whereas the equity ratio is increasing now to 71.2%.

So as I said, the free cash flow is reduced towards minus EUR 18.3 million, and this is mainly driven due to the working capital effects we had and payouts and so also to get prepared for paying earlier. And so the accounts payables were paid with a higher speed to not having an unfortunate situation with suppliers, of course, but also for getting our things into storage to be prepared for any delays, just in case we are not ready with our new accounting system here.

So that's why, all in all, the cash flow from the operating activities look a bit different. Also, we prepared you already in our last call that this is something what was planned. So no surprise for us. Also the cash flow from investing activities decreased by nearly EUR 2 million and is mainly reflected by lower capital expenditures on property, plant and equipment. And so all in all, then the free cash flow is shrinking further. The return on capital employed last time diluted, and so it still remains on a solid level, 16.5%. So these figures will be changed in the next upcoming times, I would say.

Yes. Thank you very much, Sirka, for the quick run through our figures. And let's sum it up a little bit. We did dispose our Commercial Online Print activities. We did acquire Kodak Moments, and we launched S/4. All of that was happening in Q2.

So as you said, it was a stressful Q2 for many of our people here, but we delivered good results, operational as well, which is very important here. And yes, you did see some effects on the balance sheet, on the cash flow activities also due to the S/4 launch. Nothing to worry about. We are very confident about what we have seen in Q2. And I would tell you, we are confirming our outlook going forward as well.

And to be honest, this story, which we have here, and many of you have followed us through many of these years, this will look even stronger if we are able then to really add the Kodak Moments business to that one. Usually, we don't believe in hockey sticks, but it will have the form of a hockey stick a little bit if we have this EUR 200 million turnover here after closing.

Our story continues, and this very clearly, our story will accelerate. With this acquisition, our story will accelerate. And I think here, and if we go on the next slide as well, you don't even notice the disposal of the Commercial Online Print activities. But I can tell you in a positive way, you will notice our acquisition of Kodak Moments on the revenue side as well as on the profit side.

So we are confirming our 2026 outlook as of now. And this includes also -- well, that was too quick, Axel. That was too quick. And this includes also our targets in photos, in CEWE PHOTOBOOK, in operational investments and so on.

So we are strong about this business. We are strong about the acquisition. We are strong about CEWE, I think that's fair to say here. And yes, just to remember if some of you might have forgotten, and this was something we were hinting to. This is something we will post in Q3. Obviously, we will deconsolidate. I think that's the right technical term here. We will deconsolidate the Commercial Online Print segment. You know that we did have -- I mean the cash is already here, but it's not -- you didn't see that on the free cash flow because it did arrive in July. As we said, there was the closing in July. And you will see the effect of the deconsolidation. And it will be quite strong. We did communicate openly about this one, and this is something you can be looking forward to in Q3. I think that's fair to say.

So this being said, happy customers. I think we can stay a little bit on this chart here, and you can say, well, this is just a chart. No. This is in a nutshell, in a picture, our strategy because we are really -- everything we do here now at CEWE, in Oldenburg, in all of our countries, is geared towards end customers. That was not the case with Commercial Online Print. So the whole company now is behind this picture. Well, before, our Commercial Online Printing colleague said, well, our customers are, I don't know, buying centers at larger corporations, for example, and so on and so on. So this is really what drives us.

And if you had a look into our offices, you would see in some of the hallways already, we have put up Christmas trees. Yes, you can say, we are nuts. Of course, we are nuts. But with 35 degrees, tomorrow, it's forecasted to be 35 degrees in Oldenburg, our people have to prepare Christmas campaigns.

And we need -- coming back from holidays, the school holidays, today is the first day with our school holidays in Lower Saxony here. So those people have to prepare the Christmas campaigns, and we have to get them somehow in the mood. And one of these small little details. We are putting up Christmas trees so that these consumers and these customers will be happy and looking at their individualized photo products underneath the Christmas tree.

So thank you very much for your attention, and we are looking forward to your questions.

Welcome, ladies and gentlemen, to the earnings call of CEWE Group following the publication of the first quarter figures of 2026. I would like to welcome CEO, Thomas Mehls; and CFO, Sirka Hintze, who will speak in a moment and guide us through the presentation and the figures. But before I hand over to the Management Board, [Operator Instructions]. The recording will be stopped before the Q&A session. And having said this, Mr. Mehls, the stage is yours.

Thank you very, very much, and a very warm welcome to all of you. Yes, we appreciate, of course, if you switch on your video, we're photo company Sirka, right? So we are living in pictures and video as part of that. So thanks, Robert, for doing so. We appreciate it very much. So welcome to this Q1 earnings call.

Sirka, we have a very special earnings call.

Yes. So, I guess we made our first quarter quite exciting.

Yes, I hope so. And this is why when we look at the agenda, we start with the latest news hot off the press, so to speak. You probably have all noticed our communication, which we pushed out yesterday, and we had to push out yesterday actually because we concluded the deal in the commercial online print. Then we go through the results, the corporate development, financial details and it will be followed, as always, by a Q&A session.

But let's start with what we have communicated yesterday. We are in the process of selling our Commercial Online Print business segment. We took the decision to sell it.

We signed the deal yesterday, and we are in the period now to wait for the closing of that deal. What is our Commercial Online Print business segment? That is the business segment with the brand SAXOPRINT, Viaprinto and LASERLINE. These are brands which help people to print their business cards, their brochures, their flyers, their flags, bags, basically promotional material in a wider range. What we do basically is either large format or paper-based printing business there. And just let me go through a little bit of the rationale here. What does it mean?

It means focus. This is the main message we want to convey here. We want to focus on our core segment, which is photofinishing. We are the leader of premium photofinishing products. And with this deal, we want to focus management attention, but also capital to grow organically and nonorganically, we come to that one, our photofinishing business. That is the main rationale for why are we doing that.

Also, we are increasing profitability. On a pro forma basis, looking back at the '25 figures here, so we took out the Commercial Online Print division out of our figures, and it would be roughly 1 percentage point of margin increase, which we are having here. And also our return on capital employed will increase significantly by 2 percentage points on a pro forma basis in 2025. So this deal gives us focus, give us better profitability as well. And we will have a cash inflow. We will come to the metrics of the deal in a second, but we will have a cash inflow.

So we did not sell it for EUR 1. So we will have a cash inflow and how do we use that cash inflow? We want to use it in a value-oriented manner. So the strategic priority, as pointed out in the first point is the photofinishing business. So we want to continue to invest in technology, efficiency, our brands. I mean we are really the brand leader in photofinishing. But as you all know and you have heard from us, and we are confirming that one through selective value-enhancing acquisitions. We are not trying to do acquisitions for the sake of doing acquisitions.

We want to do acquisitions that really make sense. So we tend to say deep pockets, shorthand. So we really will focus there as well. And you can expect from us the continuation of our share buyback program and also the dividend payout, and you will come to that in a second, Sirka, we remain one of the very few leaders of constantly increasing dividends here, and this is something you can expect from us as well. So looking a little bit deeper into the transaction. Who are we selling it to?

It's the company called Cimpress. Most of you would know it from the brand VistaPrint. If you're German-based, you might have heard of WIRmachenDRUCK.de, which is a website where they basically do the same business like we are doing. And for them, it makes a lot of sense. It really makes a lot of sense because in Germany, they do not own a production yet. So they print at third parties mainly. And I can see -- I mean, at the end of the day, you have to ask them in their quarterly call. But at the end of the day, it makes a lot of sense for them because with the acquisition, they not only gain revenue, but they also gain the capabilities of a very efficient production, and they can use this production to print their own product there. So it makes a lot of sense to them. This is why they take over all the 544 employees that we have in this business division. It will be taken over. And we have to say they're the global market leader. And we have always discussed the topic that this is a consolidating market. And so they will be able to produce more efficiently.

And we can also say, well, we are quite proud that what we have built over the last decade -- a little bit more than a decade, actually, it was so attractive that the world market leader actually had a high interest in acquiring this business segment. So looking into the transaction there. this is -- okay, sorry about this one.

So first, let's talk about the different slide here. Okay. Let's look back a little bit. So we have a bit of confusion, that doesn't really matter. So where we were coming from?

If you look back in 2009, so that's a long time back. We know that -- sorry about this one, but it made sense to think about something like commercial online print. What was the situation we were in? We were not able to grow the photofinishing business at that point in time. We had capacity in digital print. That was the start in 2009.

And so we wanted to leverage also the brand that we had built for the commercial online print. You all might remember that we tried with cewe-print.de, these were moves we made there. So it seemed appropriate, let's put it that way, to establish commercial online print as a new business unit. So this has changed a little bit. And you know that what we did in the photofinishing, we really grew that business through acquisition organically, through regional expansion. So we really grew that business, and we didn't grow the commercial online print to, let's say, balancing second leg that you would stand on.

So what we are in right now is a business with a consumer-oriented photofinishing. We have double-digit margins in the consumer-oriented photofinishing. It's our growth driver, but it's also our margin driver very clearly. And the commercial online print is just clearly a very different business. It's a price-driven segment. It's B2B oriented. We cannot leverage our brand. We cannot leverage our B2C capabilities as much as we hoped for, let's put it that way. And we also were in front of this decision to say, okay, do we invest more into that because scale matters really in the commercial online print. And this is the decision we took. We said, no, we focus on photofinishing. We don't want to dilute this because scaling in commercial online print would have meant a significant investment and it would not have allowed us to significantly invest into photofinishing.

So it was really -- it was like a turning point for us, and we took a really strategic decision here. So -- now sorry about this one. Coming to the transaction details. Obviously, we did sign yesterday, but the closing is depending to the typical conditions, mainly antitrust approvals. We expect it to take place during the second half of the year '26. You might ask us, okay, how much did you get at the end? We have agreed not to disclose that price, but we can tell you we managed to sell it for a higher price than our book values.

You see that in the last bullet here. We expect to generate a gain from the sale of this business segment in the mid-double-digit million euro range. It's a bit complicated there. But it was -- let's put it this way, quite frankly, it was a good deal. It was really a good deal. So we managed to really get back and a significant portion more than what we had in the books. And we will receive a cash inflow. I refer to that as well. Just for you to remember what was the turnover, it was close to EUR 90 million with an EBITDA of EUR 8.9 million (sic) [ EUR 8.8 million ] , an EBIT of EUR 1.7 million and EBT of EUR 0.9 million. So that was -- that's basically what we are going to divest.

What can you expect in our figures? So now or yesterday, let's put it that way, with the signing, we will separate the commercial online print from our consolidated income statement. IFRS is telling us to do so.

We continue to report the segment with the COP segment and group totals with and without commercial online print, you can expect us to do so. We need to do it. We expect closing, as I said, in the second half of '26. Then we will deconsolidate -- it's an interesting word, deconsolidate the commercial online print and of course, with the recognition of the gain of disposal. And we will also adjust our segment reporting accordingly. So this is something you can expect for us.

Just for you to get a sense of what's happening with the group, and we did this based on of course, the full year and the only full year we are having is the year '25. So we did this on a pro forma -- it's really pro forma display here with the consolidated financial statements from '25. Our turnover, obviously, because we are selling a whole business segment here will decrease to EUR 777.0 million. That's an interesting figure. It's not a Boeing jet here. It's -- it would be the turnover figure from last year. The EBIT would decrease slightly as well.

Profitability, as mentioned, would go up by 1 percentage point and our ROCE, as mentioned, would go up by 2 percentage points without the commercial online print. Our target ranges, obviously, we had to adjust as well for '26. So the revenue that we project now is between EUR 780 million and EUR 810 million and the EBIT between EUR 85 million and EUR 91 million. This is Yes. And here, you can see it on a long-term range again. You can see the famous chart.

We still call it internally the Olaf chart just in accordance with our old CFO, who invented this chart. So we see the long-term growth path to be continued into '26. And the story remains very intact and very solid and even more compelling without the Commercial Online Print segment. And here, you can see what we have just mentioned, the group EBIT without Commercial Online Print, this is the new target range, EUR 85 million to EUR 91 million. This is something which we will expect for the year 2026. And here, you can see our new targets which is very important. And you can see the Commercial Online Print had nothing to do with the photos and nothing to do with the CEWE PHOTOBOOK there. So you can see the previous year figures on the left-hand side, previous year '25, including commercial online print, the old target, including commercial online print, then the pro forma figures of the year '25 without the commercial online print and the new targets.

And we talked about revenue and EBIT already. I just stressed the fact that it doesn't change anything in terms of photos. It doesn't change anything in terms of CEWE PHOTOBOOK. The EBIT effect here, you can see this is very important to know is EUR 85 million to EUR 91 million. The EBT here, and this is without -- and the earnings after tax is without the onetime effect, and we will come to this one, which we were expecting from the commercial online print, right? So this is the target without commercial online print, but we have a nice chart, which will illustrate what's happening with the earnings after tax and what's happening with the earnings per share.

I think this is about to follow, yes. So here, you can see our earnings after tax, the new range, which we are going to expect from the business segments to be continued. So from EUR 58 million to EUR 57 million to EUR 62 million, but we will have an earnings after tax resulting from the sale of the discontinued segment of Commercial Online Print, which is actually quite significant. We are not going to comment in detail on that, but just by the size of the box we were trying to illustrate, you can probably deduct a little bit of what to expect here. And the same is true for the earnings per share, obviously, right?

So -- and now let's come to this one, and this is again, just confirming the strategic rationale of this transaction. The strategic positioning of the CEWE Group is 100% focused on photofinishing. We will really entirely focus the whole group on photofinishing with clear objectives. They have not changed by this transaction, not at all, but we will be able to give it more focus and focus means management attention, but means also capital allocation here. So we want to scale across production, logistics and IT, scaling is very important. We discussed that. We have a premium brand strategy. We are quite successful with the premium brand strategy.

It allows us to generate a lot higher margin than other, let's say, printers, and we would love to call them printers just to make that difference. We will continue to invest in innovation. We will continue to invest in technology.

We will use these investments to automate more, to standardize more and to gain more speed. We think this is a really important USP of our brands here. We will also continue to look at acquisitions like we did before. I mean, basically, all the brands, which you see here, Pixum, WhiteWall and DeinDesign shares have been acquired in the past, I would say, 20 almost 18 years in the past 18 years, and we will continue to do so. We will continue to look for acquisitions which make a lot of sense to us. You know that the segment is not too big. So we have to be very selective here. You know also that we do not have like an M&A department consisting of dozens of people.

So we need to make very smart choices on whom to acquire and how to acquire and when to acquire, but you can expect that we are on it. And this should result everything together in the continuation of our growth momentum. And definitely, we will look after our margins. So this being said, these are the news hot off the press from yesterday. I wanted to elaborate a little bit further on this one. And I probably would expect the Q&A session rather is circling around this question here. And you can imagine it's really important. It's probably the most important change in strategy since we started that segment.

So let's come to Q1. And you know Q1 is -- it's the first quarter that was a military plane above us. I don't know if you heard that. Sorry about this one. So let's come to the results of the first quarter in a nutshell. And as always, we want to inform you about a couple of developments, which are very important as well.

So group turnover grew by 1.4% or EUR 2.4 million. The group EBIT reached EUR 5.6 million as planned. There are a couple of reasons behind that, and Sirka will come to it in more detail. One is a change we made to our Dein Design division. We went into a slight change of business model. I will explain that on a chart later, which is about EUR 300,000 in the first quarter. And also, we were able to basically swallow and this will be almost the last quarter where we can see this effect in this magnitude. Our new tariff union contract because actually, we're comparing, let's say, a new cost level here on our personnel cost with a quarter which did not have the same cost level here.

So this is why we're saying we are quite in line with what we are seeing here. And this is why we're also saying we are confirming our targets for '26 on the revenue as well as on the EBIT. So in photofinishing, and as always, we are quite proud. Innovation is a key driver in this segment. If we want to continue with our premium brands, we need innovation. We need distinctions to other market players. We need distinction to just the usual PHOTOBOOK and this is something which we are pursuing. You know this product already, but what you don't know is that we received an award for it. That's the Momento pocket. So we see -- we were surprised.

I think I commented that already in one of the calls. We were surprised actually by the success of that. It's a very simple product.

It's just a pocket at the end of the day in the CEWE PHOTOBOOK where you can put on remembrance like, I don't know, like a menu card from your wedding, for example, or boarding pass from your travel or something like this. Very simple. Good margin because it's just something which basically we glue into the CEWE PHOTOBOOK at the end of the CEWE PHOTOBOOK, but does create a lot of value for our consumers, and they love it. We also did receive an award. You always think you can't innovate on the calendar segment, but you can. And this is -- it looks more like a wall art and it's a size, which is astonishing. It's really a wall art. If you put that up to your wall, I would say the calendar kind of goes into the background of the calendar function.

It's more the picture there, and it's one of the largest calendars you can order in the market. And very interestingly here, you know that we are pursuing an omni-channel strategy. You know that our retail partners really are at the core of what we are doing. And this -- you see in the background the CEWE photo station, which is usually placed in drug stores or grocery stores and where people go to print. And the question is, how do you transmit your photos, right? And there's the cable very traditional, but it works quite well, right? Sometimes you have to stand in line. I don't know if you've ever managed to look just before Christmas into one of these stores, people really stand in line and they connect their smartphones like their pictures and so on. Some of them, especially when standing in line, have some privacy issues, say, okay, somebody looking over my shoulders.

So what we did here is we built an app CEWE Online Direct. We called it 2.0, where you can with a QR code very simply just transmit your photos to the CEWE Photo station. So very easily, you can prepare everything while sitting in the bus or standing somewhere else and so on. And it does allow us, and that's also very important. It does allow us also to get access to the apps of our retail partners. You know that the dm app, just dm is a large German drugstore chain is very, very popular, millions of downloads used by millions of people because their customer loyalty program is based on that one even payment functions are built in there.

And so we can basically put a photo function into their app, very smart, very nice. So -- and also, this seems to be like an IT kind of thing here, like Shopify app connection sounds very IT-ish. It is, but it's -- and what it does, it's not. You know -- we know that marketing of product has changed a lot over time. You see that in the music industry, for example, where you can see artists that don't use a label anymore, and they use platform like YouTube, for example, or just Instagram or TikTok to become famous. And the same is true for photographers. So in former times, photographers, if you're a professional photographer and wanted to sell your photos, you needed a gallery, right? Gallery really to -- at the end of the day, as an intermediate to sell your pictures.

A lot of photographers don't use a gallery anymore. They market their pictures via Instagram. They have an own web shop in order to sell their pictures. But what do you sell? NFT really did not come through that much. So you actually sell printed pictures, right, printed photos. And how do you do that as a photographer? What are you doing? Are you ordering that at, let's say, WhiteWall or CEWE and you put it into your garage. And if somebody calls you up and then you send it out to the U.S. to Japan, to Europe, how do you handle logistics? How do you handle customs and all of that? And that's something we can do.

So what we built is an app that can integrate in Shopify. Shopify is one of the most used technology platform for photographers to build their web shops with. And it just plugs in and they can define, okay, I have this picture. I have an addition of 10 or 50 or 100. I want to have -- sell it in this size. I want to sell it with this frame and we handle the rest. So we handle logistics. We print it on demand. There's no risk for them and so on and so on. It's branded. It's quite neat, and we see a lot of future for this one in our relationship with our photographers. So -- and yes, I did not mention that we got a award for it, but we got a for it as we did for all the others. And last but certainly not least, and I commented on that one because it's a little bit the reason for not reaching the previous year EBIT figures here because we did invest a little bit into the change of DeinDesign. DeinDesign is our specialist for smartphone cases, and you see them here.

And in the past, we concentrated on the value of the photo on a case, right? It sounds logical to you, right, or a design on a case or something like this. And we saw the market changing quite significantly, and we saw that the value is not only by the case -- by the picture on the case, but also by the case itself. And this is a little bit different to what you see maybe on paper, like if we print something on a paper and we create a CEWE PHOTOBOOK from it, then the paper already gets a totally different value.

And this is not so much the case for smartphone cases because the primary target is you want a smartphone case to protect your smartphone. So we said, well, the quality of what we had in smartphone cases was good. It was not outstanding. So people said, okay, it's nice that I can print a Disney design on it or that I can print a photo on it. That is quite good. But the smartphone case you're using for it, I can actually get for EUR 7 at Amazon or EUR 5 at Shein and so on. So we said we need an own range of cases, which are really outstanding, which at the end of the day, support our premiumness of our brand strategy here. And you can see that range. And we also, in addition to sell that printed with a photo, we also say, okay, this is a good range we can also sell without a picture. And this is an investment we did. This is why we needed a different name.

So it's NIVOCASE by DeinDesign. I invite you all to go to this website, look at it, really great product. We don't have a smartphone here, but I can assure you, very, very, very nice and premium product together with the nice picture. And this was my elaboration of what had happened in the past months, and I hand over to Sirka to let her tell what that meant in figures.

Thank you very much, Thomas. So yes, let's get back to numbers. So let's start again with the photofinishing, which is our core of the business. So if you look into what happened with our turnover, you can see that there is a moderate growth. So the moderate growth means here, we have a turnover increase by 1.7% I mean, if we anticipate what's going on in the different economies, I guess, even for first quarter, we can be quite satisfied with it and especially also because we, again, follow the trend that we have a volume growth. And so this is always good. And we will also later see what products drive this development. If we look into the EBIT, you can see that -- and Thomas mentioned it already, that the EBIT mainly contributed from the photofinishing here for the group EBIT.

So EUR 5.1 million coming out of the photofinishing, which is compared to the last year's first quarter, EUR 0.5 million less. And this is by EUR 300,000 driven by the adjustments into the business model of DeinDesign. So we redeveloped the web shop. We invested. And of course, the business, while this transition is happening, we've seen, of course, less turnover, less results, of course, and this is also our investment into the new business model of the DeinDesign, NIVOCASE as core product, and we will monitor and watch the developments in the next months quite closely. And also, we have one of our Board members acting also as a Managing Director for that business.

So we are very close watching the developments here. So all in all, we would say a successful start to the year, but we also see a continuous increase of our cost basis, personnel costs plus marketing costs, especially also to support our turnover in the international markets. And so this is here reflected in the EBIT. If we would extract the special effect of DeinDesign, we would see a comparable situation compared to last year. So if we have a specific view on the turnover development of the quarters, you can see that traditionally, the first quarter is the second or nearly the third best of the year. So we are still having a bit of flow of the last season.

And so we can see that we ended up within the range -- within our expectation for the first quarter. And also in terms of EBIT, we are in the expected range of the quarter. So if we look into the number of prints, I mentioned it earlier. So there is a good development of the total prints in millions. So continuing growth and also the value per photo is growing, and that's ending up in a turnover of the photofinishing, which is positive.

Our core product, the PHOTOBOOK. We can see that the volume continues to grow in the first quarter by 2.2% and also due to a lot of new features, a lot of new product addings like the pocket at the back or the other premiumization options like different paper quality, different covers. So this is feeding again also the turnover of our core product. And please have a look. It's really great also with the new premium and also the new colors of the covers -- it's really great. So commercial online printing. So we start repeating a bit what is containing to our Commercial Online Print segment. It's set up with 3 brands. So we have the Viaprinto, SAXOPRINT, and LASERLINE. So it's still on board, of course, so that we are also having a look into the performance, which is not too bad.

So especially if you anticipate the market development. The market is still under pressure. So we have a high competitive environment. And also, of course, it's like if you have a commodity product, it's following also the trend here that the price is the driver. And so this is what you can see here also in the results, slightly shrinking.

But turnover-wise, not too bad, especially if you see how the market is developing. So the retail segment is also -- I'm repeating a bit what we also presented last time. So we have 101 stationery photo retail stores, especially in Scandinavia and Central Eastern Europe, E-commerce webshops, which sell hardware like cameras and accessories and photo products like frames and stuff like that, decorating the photos integrating into the rooms at home.

And so what we can see here is a slightly decrease of the overall turnover by 3.7%, but the EBIT is slightly rising. I mean it's all in all, a low contribution with small amounts. But also we can see that the hardware retail, which is really related to these hardware products is growing. And so the trend is obviously not really shrinking. So the other segment is not really adding something to our business, but it's part of the reporting. And so I have nothing to add on that. So that leads me to the financial details.

And it's here in the consolidated P&L statement for the first quarter. So we have an addition of EUR 2.5 million -- nearly EUR 2.5 million more revenues mainly driven or contributed by the photofinishing. As I also mentioned, the result is affected by higher marketing expenses, higher shipping and logistic costs and higher IT license costs. But also what we can see is that the expenses for the materials are rising.

So it's a mixture of different effects. So that means that our EBIT is lower than the last quarter in '25. If we look into the balance sheet, you can see and you probably have noticed that the balance sheet is growing. So we have now an equity ratio of 70.8%, which is quite high. And this is mainly because we invested into 2 buildings, and we added a renovation of our local facility here. So we invested into a production place of our WhiteWall business in Frechen, but also we bought a new building in the U.K. and which are our last 2 bigger investments into our production facilities.

And so this is, of course, increasing our asset base, but also we invested into photo paper mostly into the photo paper photofinishing business, but also for -- still for the commercial online printing. And -- if you look into our free cash flow, then you can see here, of course, what happened with our investments. So you can see here, especially the cash flow shrinking from the investment activities by EUR 25 million. And so also the operational cash flow -- the free cash flow, sorry, is shrinking. If you look into the operating activities, this is more driven from an offset of the working capital. But the significant changes towards the last quarter of '25 is really the investment activity. So -- and this is really the investment into the production plants. And so that also means for us that all our production plans are now in our hands. And so this is it for the moment. And so we follow our strategy to be the driver of what we are doing with the properties.

And -- but this is -- this does not mean that we invest into further property production plans because we have now all in our hands. So the return on capital employed also here is reflecting the result situation, 17.4%, still strong. And the dilution, which was here by the Commercial Online Printing is going away by selling the business. The seventh time (sic) [ 17th time ] in a row, we proposed to the Supervisory Board, Board of Trustees, but also for the next step for the shareholders meeting, we propose EUR 3, which is, again, EUR 0.15 higher than last year and anticipates also a bit the -- or reflecting a bit the last result situation of the year '25. And so we will -- we are curious for the shareholders' meeting taking place beginning of June to get an approval. And we would like to follow our, I would say, also reputation as being the top dividend increaser at in this index or stock exchange here with the second place.

So for us, it's not only driving so the numbers, it's what makes us happy. It's our customers. And so happy customers is our key and core element of managing and driving the company. Thank you very much.

Welcome to the earnings call of CEWE Group following the publication of the annual press and analyst conference. I would like to welcome the CEO, Thomas Mehls; and CFO, Sirka Hintze, who will guide you through the presentation and the figures shortly, followed by a Q&A session via chat. Having said this, Mr. Mehls, the stage is yours.

Thank you very, very much, Ms. Banner, and a very warm welcome from us here from the somewhat cold and sunny Oldenburg. So it's not yet spring time, I believe. It's a little bit April's weather, right? So Yes. So a very warm welcome to all of you. This is our annual press and analyst conference in a bit of an unusual setting.

For the first time, we do this fully virtual. This allows more people to participate. And well, as usual, we will look back at the figures of 2025, which we just published, but we will also give you a little bit more of behind-the-scenes information. So a little bit like what did we do to achieve these results. So stay with us.

And at the end, as I said, you will have the chance to ask questions via the chat. Also in German, we will have a moderator who will translate and transcribe that into the English language. So let's start.

Welcome also from me. Good morning.

Let's start. Yes, a warm welcome again. As I said, I don't want to go through all the agenda here, the results, a little bit of the development. We will do an outlook as well, right, and then a Q&A session. So how did we do in the past year? Well, I would say quite strongly. Our turnover and our EBIT increased. We achieved all the targets. The group turnover of CEWE increased by 3.8% or by EUR 31.7 million to EUR 864.5 million. And this actually is at the very upper end of our own expected target range. So we are very much not only within our range, but at the very upper end there. The group EBIT also increased by EUR 2.1 million or 2.4%. This is also very well within our target range. So all our targets have been clearly met.

However, we can see that with the EBIT development, we are not at the upper end of our own target range. We know that. We can comment a little bit on that one. If we had achieved our targets in the Commercial Online Print segment, we missed them by about EUR 3 million in EBIT. then we would have been at the upper end for the overall results as well. So overall, quite a strong year for the CEWE Group in total. I don't want to read all of this to you. So -- but there are a couple of comments I would like to make here. So you know that we lay out our targets also by product, by a couple of volume indicators and also the financial targets. Something which makes us really proud is that we increased our volumes, and you can see that here in the photos.

The photos is not product only by itself. Of course, we do sell printed photos, but it is also something which is within our product. So the CEWE PHOTOBOOK, for example, does also contain photo. So we over exceeded our own targets. We over exceeded our targets in the volumes by the CEWE PHOTOBOOK, and this is really a strong development. So our growth in photofinishing was driven by volume, and this is something which we really want to acknowledge here and on all the other figures, we will comment a little bit later. right.

So -- as all of you know, we have 3 key business segments. We have the commercial online print. We did EUR 89.6 million of turnover there. The most sizable business, obviously, is the photofinishing, and you can see that here. And we will comment a little bit on also the fact that we are in this segment active with 5 brands. You see them here, our CV brand, the home turf, so to speak, WhiteWall Pixel, Dine Design and Piers. And this is the core of what we are doing. And obviously, the majority of this call will be around photofinishing.

We also have retail, if you like, our most traditional segment, actually where the company comes from. We still operate around 100 retail stores in Scandinavia and Central and Eastern Europe and actually one in Holenburg, by the way. This segment is really nonstrategic. -- in itself, but it is strategic in the role of supporting the photofinishing business. And you can see that here, the brands are clearly moving towards the CEWE brand. And if you walk into these stores, you will see a lot of CEWE.

And actually, we will have a couple of pictures of one of the stores, and it really looks like a CEWE store. So overall, and I think this is really important, this company is on a good track. It's on a good growth track, but it's also strategically on a good track. We are continuing our growth in digital photofinishing. You can see that here. And well, you can see it has been a record year in turnover. It has been a record year as well in EBIT, but it has been a record year, and our transformation path of this company clearly continues and did continue -- well, it does continue in 2026.

We'll come to that in a little bit, but it did continue also in the year 2025. And the same is true for EBIT. So it is also a record year in EBIT, as I said, well within our target range. So quite nicely. We had been -- we would have been at the upper end, as said, if we had been delivered also in the commercial online printing area. So -- and as announced, yes, we will now focus on the photofinishing business on what drives us there, but we will give you a lot of insights about the last year and what -- how did we do that? How did we achieve these results? And actually, what did the teams do because it's not only the 2 of us or us on the Board. We have a lot of team members who work every day very hard to make that happen.

So our strategic principles have not changed. And to be quite honest, they will not change. We are a customer-focused company. And this is very important. I mean all the -- probably every company will say that. But for us, it's crucial because we cannot sell a single product without the involvement of our customers because they have to bring their personal memories. They have to bring their photos. And also with their -- only with their personal memories, we can create and actually then print maybe a CEWE PHOTOBOOK or a Mug or a canvas and deliver it to them.

So their involvement is crucial, and it's really at the core of what we're doing. So we do need to focus on what our consumers bring with them to create really meaningful products out of their memories. So innovation brands efficiency -- sorry, if we can go back, innovation brands, efficiency and sustainability. These are 4 topics you will learn a little bit -- well, maybe not learning because you know us quite well, but we want to reiterate a little bit on that one. Everything is bound together by one team, which is driven by one cultural mindset. And we will go through some of these aspects now.

As said, customer focus, that's something which drove us, and we want to make customers happy. And we are in a very special business. And you look at this picture, you would say, well, these are people which just smile, but we are in a smiling business, right? I mean if you walk into the photo lab downstairs here, you see a lot of pictures and hunt the pictures, people smile. So if you look maybe on your camera, mostly you see smiling people. And if you convert these pictures into a CEWE PHOTOBOOK, we'll see even more smiling people because you will delete all the pictures where you don't smile. So we are really in a happy business, and that drives us every day to make our consumers happy. We have one big success story. That's really important. We have a very important brand and a very important product in our portfolio. This is the CEWE PHOTOBOOK.

And we are so proud that in the past fourth quarter, actually, we did deliver the 100 million difficult to pronounce the 100 million CEWE PHOTOBOOK to one of our consumers. We are going to celebrate that. We're going to announce that in Q4, we actually focused on Q4, not on the celebration. But we are very proud that in the past actually 20 years, we delivered 100 million CEWE PHOTOBOOK. And actually, we delivered a lot of smiles, a lot of proudness, a lot of sharing. I mean we really create memories throughout whole Europe because this product, this brand is the most successful CEWE PHOTOBOOK brand in whole Europe, and we are very proud about this one. So 100 million is really a success story. But we can only do that if we really make our customers happy, and we measure customer satisfaction by the Net Promoter Score, by the NPS. You're used to that. And also, we are very proud and probably we would have not been able to deliver that volume growth, which we did deliver.

We are very proud that we did increase our Net Promoter Score again on a very, very, very high level to 66.7%. I don't want to go into the details of how this Net Promoter Score it's nothing we invented actually. It's a metric a lot of companies use. We are very happy that our consumers are happy. And this happening is not only product quality, of course, but it's also their satisfaction with our ordering channels. So how easy is the software, the app or the website, for example, how fluent is that. It has also a lot to do with how well do we deliver in the fourth quarter because you know to have our products underneath the Christmas tree on time is really crucial.

And the past year was really exceptional in that one. So consumers are happy with the product quality. Consumers are happy with our ordering trends, but they were also very, very happy with our delivery confidence, which we gave to them. So I would say most products out of millions and millions, probably was just a couple of hundred, which did not make it any time underneath the Christmas tree. And this is also reflected in this number. So -- what drives us is innovation.

Yes, we did deliver the 100 million CEWE PHOTOBOOK and it was like, okay, where is the innovation in that? Is it has been the same product? No, it's not the same product. It's like -- if you look at toothpaste, it's not the same toothpaste, which is sold now compared to 20 years ago. There's a lot of innovation in there. If you compare the story of the CEWE PHOTOBOOK throughout the last 20 years, there's a huge difference in the way these CEWE PHOTOBOOK are created now, ordering channels. It's a huge difference in the product variety.

So the width and the depth of our product portfolio has changed greatly, and there's a lot of innovation in there. And this innovation can only be done if a lot of people, and you see here a picture of the innovation days of the year 2025, and we will show you also a video of this year's innovation days in a couple of seconds. This can only be delivered a lot of people from a lot of sites stick their head together and think about how to innovate products, how to innovate ordering channels, how to innovate this company. And this really drives us forward.

So we will give you a little bit of a feeling what made us proud in terms of innovation in the past year. The momentum pocket and photographic paper signal, this is really something where we all said, okay, that's nice. Some consumers say, it would be nice if I had a pocket in my CEWE PHOTOBOK to just include, I don't know, boarding passes or entry tickets or something like this. We said, okay, why not do that for a little extra on there. And we were really surprised by the success of that because it seems to be simple, but it just shows how important it is for the people to collect their memories.

Photos are important, but there's more, especially when you travel, there is more in your memories and you have, I don't know, maybe a menu cardo or whatever it might be, which you store with the CEWE PHOTOBOOK. So small product, big impact. We were quite happy by that one. Design is important. So premium is not only a qualification like you would say, okay, is that a nice design or not? It's not a qualification. But there is a business model behind it. We really moved all of our design portfolio into a freemium model, so you can order free designs, which enhance conversion.

So a good design helps you to really, at the end of the day, finish your product. But we also have premium designs for which we charge, and this also helps the bottom line. So we are quite proud that we enlarged this portfolio to many of our products also to the cars. Sustainability is very important. This is the kitchen calendar with detachable photos, so you don't throw the calendar away with the photos. Some people even cut their photos of the calendar, I was told. So we did invent a method of how to keep your photos by having them detached.

Also the calendar, it is very important for Q4, the XXL personalized wall, it looks quite small here. It's huge. It's really huge. It replaces a canvas or a large wall art on your wall. It's almost a one format. So it's a really huge calendar, very nice, especially for, let's say, ambitious ambitious, right, ambitious photographers. So designs, I told you is important, is important to drive conversion is important to drive also the bottom line, but you do need the right products for that, right? You're the avocado to my toast, that's the design. This looks a lot better. If you have a colorful inside color, interior color in your mark, for example, it just makes the product better. So we have a couple of limited editions launched quite successfully. They were all sold out, by the way, so quite nicely.

And pets. I mean, it's a photo treater. Some people put cookies in there for themselves. Some people put cookies for their pets in there. Pets in itself was a nice driver. So we did focus a bit more on the pets business. So we have landing pages for people -- pets for some people are the replacement of the children, right? So they also like to have the photos of their pets, maybe on a blanket, on a peow. So we saw all kinds of pets on the different photo products, and we want to support that. And again -- and I told you that story. Again, this is just one example of the -- one of the designs we introduced. Design is an important topic because you can say this is a poster No, this is not a poster. This is a product, right? If you have an anniversary collage, this is a real product.

So our designs help us to create at the end of the day, to create real products. We say sometimes the design is a product in itself. And you will find a couple of these products. Photo retreat, map poster is a good example, which is at the end, physically just a poster, but design-wise, it is actually a new product, which we created. And we have a couple of these. So designs really drive our business. You know that our target group, especially for the CV brand, and I will come a little bit to the target group and to the difference of the brands in a minute. They like to be very creative.

So yes, we help them to unlock their creativity with our photo products, but the creativity doesn't stop only with the photo products, of course. So some people say, okay, it's nice that I can order an advent calendar with you guys, which has chocolate in and I just put my picture on there. Others say, yes, pictures are very important for my advent calendar, but I want to fill this advent calendar myself. I want to buy some perfume, some sweets, some whatever treats by myself. I want to do a little bit by myself. So we created this photo advent calendar boxes, actually quite successful, was quite nice. So it actually addresses the target group of people who really want to put more creativity into their advent calendar.

And well, digital greeting cards. Greeting cards is a changing business. It's not our most important product category, but probably if you look yourself onto your shelf at Christmas, how many Christmas cards you receive in business, maybe how many Christmas cards you received as a private person. I hear how many Christmas cards you actually wrote as a private person. So this business is changing. It's not only because in the Christmas card business, it's also an invitation.

So we created digital greeting cards. So you would say, why that, you can just send something via WhatsApp. Yes. But the point is you actually want to design a nice card. If you want to send out Christmas greetings, if you want to invite this example for your 60th birthday, if you want to invite somebody to your 60th birthday. And what we found quite successfully as a last-minute Christmas card. That was quite surprising to us.

So it wasn't something which was really felt in our business in the running up of Christmas, like the calendar business or the CEWE PHOTOBOOK business. But on the 23rd and even the 24th of December, people used a lot of these -- not this one because it's an invitation, but the Christmas card designed to send out a digital Christmas card. So quite interesting how the landscape, I would say, is changing. And I think it's good that we are all convinced that we do great stuff. It's always good, right, if you're convinced yourself. But actually, we do have some external people who also believe that we do great stuff.

And you know the TIPA awards from the past conferences we did here. It's a jury of journalists, expert journalists. It's international that's very important to us. So it's actually worldwide. So -- and they look at the innovation in the photo industry as a whole. They also look at cameras and lenses and so on, but they also look at the photo printing as they call it, industry. And they awarded many TIPA awards last year to us. So for the panoramic page, again, it's if we do it this...

Yes, it's exactly. We do it like this, right? It's really big -- it's an impressive product they thought themselves and it's actually not only impressive in physical terms, but also how easily it can be created, how flexible it is. It's not in a specific point in your CEWE PHOTOBOOK you can put it wherever you want to put it and so on and so on. It's actually a patent. It's actually pat. So they were also quite happy with our CEWE Passport app, which creates a biometric photo. And don't be fool, yes, the German market in terms of passport photos has changed.

We were aware of that because you actually need to have a certified, I don't know, walk into the mayor's building to have your pictures taken, but this is different in a lot of other European countries and also people still need pictures for their, I don't know, public transport card and so on, and this app helps you so quite nicely. We did reinvent the calendar, by the way. We did reinvent the calendar. This is the fine line wall calendar, and you see that there's no spiral binding here. You don't turn the pages, you actually take it off and have a very neat design-oriented hanging and changing the system.

And this was very well received by the Tepper jury. You see that here. It was a red Don winner. And just very recently, actually, I know we talk about 2025 here, but we spoiled it for '26. So it did also receive the IF Design Award, quite outstanding, we believe, because usually, that's not the award photo products are awarded with. So it shows that we also have an impact by designing great products. And well, ordering channels are important. As are important. There's a CVE Smart layout concept, which is not only in the mobile app, but also in the desktop app. You will see that in the video also in a minute. And apps are not only in the CEWE branded world, they are also in the Pixel world, and this is why Pixon also has been awarded a Tea award for their app actually as the best PHOTOBOOK app. and would show you a video also of Pexom showing how they address as a brand, their target in a minute, actually.

And white wall, best photo frame looks nice. Also, we have that in Oak. I ordered it in Oak, very nice. I can just recommend it to you. So we are exceptionally proud, I would say, not only about that we did receive all these TPA awards, but then those winners of these awards, so also from other industry players, I told you this is a journalist jury, which does these TPA awards. They have websites, they have blocks, they have magazines. They put out these awards and let professional photographers vote for their favorite products. And guess what? We won also the photographers Choice Awards. So again, it's not only that we convince the jury, but we also convinced the photographers that we did great.

And the CEWE PHOTOBOOK panorama Page was very well received by those photographers. We're quite proud actually. And this brings us to the question of will that go on? Well, I don't know, I have to tell you because we are in the phase of defining the road map and laying out all the product ideas. But we want to create the environment in which all of our employees can really give an innovative input to the company. So this is why we do the innovation days. Every year, we do that in Aldenburg. Well, that's our home turf. And this year, we had about 1,300 people here in all work. This is quite a stun. It's about 1/3 of our workforce, which came to look at ideas, present ideas themselves, exchange on ideas and the video will give you a little bit of just a feeling on what we do and how people collaborate, I think.

[Presentation]

So yes, the quality of the video. It's actually a good video. It's just the Zoom platform, which doesn't transmit that very well. So sorry for that one. So the idea is really to give you a little bit sense of the spirit we all had. It was your first time, right, and you enjoyed it as well.

Yes, it was really great.

Yes. So good spirit. And the important thing is that everybody and bring some things, can bring an idea, exhibit it there and go into discussion with all the others from the company, receive feedback, develop the idea further. And then hopefully, at some point in time, it will be -- will become a product. And this is actually the way the Panoramic page was invented for the CEWE PHOTOBOOK just as one of the many examples.

So brands is also important. We are one of the very few -- one of the very few, if not the only one, but we can debate that in a little bit, photofinishing companies, which is operating with different brands. And we do that on purpose. We believe there are different target groups out there, which need to be addressed differently. And we want to give you a little bit of a feeling of what we do with different brands and how we address our target group and what were some actions which were brand driven.

And of course, we start with CEWE. You saw a lot about CEWE already. So I want to start with the CEWE photo contest, and we are very proud that we were able to deliver, again, the CEWE Photo Award, which has been the greatest, largest photo competition in the world. We are very proud about this one. I mean, again, it's not us who delivers the content, we deliver the platform. It's the photographers. And this is the praying mantis here in a dancing, so-called dancing. It's actually defensive move in a dancing move, the winning picture. And this is just one of many pictures. We did get 656,000 pictures, I believe, yes, 656,000 pictures, which were uploaded to our platform by far. It's really by far the largest photo competition we did with very nice results. And we got them from all over the world. This is a picture from Indonesia, for example, and 153 countries.

So a lot more countries which handed in their photos than we are active in, quite proud. This is one of my favorite winner photos, I have to tell you because it's from a football a little bit of a football fan, just a little bit. This is actually a French supporter looking at -- well, I would say, probably a mischance. This is my interpretation. I don't know really, a mischance of the French national team against Argentina and the World Cup of a couple of years ago.

So CEWE Photobook is one thing, addressing photographers. You know that our behavior on how we consume media is changing a lot. We are on very different social media channels, maybe Insta or Facebook or Pinterest and so on. Also, we ask constantly ourselves the question of how to present our brand, our products on these channels. And TikTok, well, it is a different channel. So we need to be there in a different way, but still addressing our target group, still addressing our need. And this is just one of the examples of how the CEWE brand does that on the TikTok channel.

[Foreign Language].

Yes. So this is -- sorry for the German video. We actually selected the videos mostly from Germany because we know most of you are actually from Germany. If you are not, you can look at your local TikTok channels and find similar videos on there. But again, we have different brands addressing different needs. So we will show you here a big screen as we call it. So it's for the bigger screens, may be YouTube, maybe TV, may be CTV, like Netflix or whatever advertising. So on the big screen, something from Pix, which clearly addresses a different need.

[Presentation]

So quick, so simple. So it really addresses the mobile target group. It clearly goes on the app. So very important. It's an important ordering channel for us, the app. Most of our consumers actually also visit our websites via their smartphone. It's only the pictures taken by the smartphone. It's also visiting our channels via the smartphone. And this is why we have apps. We have apps at CE as well. But Pixel and their communication focus totally on the app. So a very different need, very different target group.

And just the last example we could show you a lot more is a video from WhiteWall and the target group from WhiteWall is very different. This is probably -- not probably, this is why this video also is very different again.

[Presentation]

It was too early, right? There were still some music playing there. So excuse us again for the video quality, again, it's driven by the Zoom platform here. Usually, the video quality is as good as our photo quality at WhiteWall. They're addressing clearly a different target group. They are addressing rather professional, very enthusiastic photographers. You've seen a couple of them they are cooperating with the so-called white wall ambassadors, and that's what also they address in their brand activity.

So it should just give you not only a sense of what we do, but also why we have different brands. That's important. There's a clear strategic vision behind it that there are different target groups out there in the photofinishing segment, which need to be addressed by different brands. So coming to something totally different, but still clearly very, very, very important to us. And I say that in -- I would say, in an environment where people have the feeling and we got actually the question on the Innovation Days to the Board, well, is sustainability still important to us when everywhere else, people talk about not being important anymore, cutting climate goals and so on and so on.

So we always said sustainability is at the heart and within the DNA of what we're doing way before Fridays for future. And also, we believe in that also in these maybe difficult times where people do actually a sustainability bashing. We do not. We actually work towards that goal. And I want to give you a glimpse. It's a little bit more a technical slide here. of our CO2 footprint and what's there. We are really proud. We are really proud.

We were one of the few companies, the first actually in 2017, which set climate goals, SBTi science-based target initiative climate goals, CO2 goals based on the year 2015. And in our Scope 1 and 2 area, and this is basically the direct emissions and the indirect emissions by purchased energy, we overfulfilled those goals. We are very proud. I mean we're talking about the year 2015, a clear reduction. We did a lot of initiatives. You will see most of our buildings now with photovoltaic energy, green electricity. You will see us driving electrical cars, right,. We are replacing gas heatings.

We do a lot of initiatives to bring that down quite successfully. So all the targets met. We have to be honest, we did not meet all the targets in the Scope 3. This is the so-called indirect emissions outside of CEWE in our value chain. So this is, for example, the material we buy, the paper we are buying, for example, the wood we are buying, the logistics, like the DHL courier we are using, for example. This is largely dependent on third parties.

And we did not fulfill our own targets. We are not alone in this world. And there are 2 main reasons for this. We can discuss about this, but 2 main reasons. Number one, our setup in the year 2025 is totally different than in the year 2015. We did acquire WhiteWall. We did acquire Cheers and so on. We would have needed to actually recalculate our base here.

Technically, we did not do that because actually, it's more important to work on the things than just to calculate. And this is one reason why we didn't achieve that. The second is we overestimated actually the impact of how suppliers would work in their own production like our paper suppliers worked in their own production in reducing CO2 emissions. it did not work out that well. We are working with the suppliers very, very hardly to reduce CO2 emissions. This is, for example, why we have the Supplier Sustainability Award to award those suppliers who do really great things. We ourselves make sure that we buy the right material.

FSC is one of the things we use a lot of paper in our production. So we make sure that we use certified paper, very important is one of the things. And we have the clear goal of reducing our CO2 emissions further. We have the goal to work further and further on the sustainability in general. CO2 is just one of the little aspects with many sustainability aspects we are working on, and this is despite all of the talks which are going around us. So -- coming to efficiency, very important. I will address that in the foot finishing in the summary in a little bit as well.

You know that we have a production site scale is an important topic for us. So expansion of production capacity has to do with volume growth. Volume growth needs to be needs to be worked on in our production site, so we need more space. But it has also a lot to do with scaling, so bringing together volumes in production site in order to be able to automate even more. So this drives a lot of the efficiency, and this is something we clearly have as a target, and I will come back to that in a minute. We are also very happy, again, coming to an external acknowledgment here that we were recognized by Deloitte, UBS FS and BDI as one of the Germany's best managed companies, and they clearly addressed our thrive for efficiency as well.

So very proud to get the stamp -- this actually very renowned award here as one of the best managed companies. which brings us to the team because everything which I told you about right now is only possible with a great team, and this is a picture actually from the Innovation Day. I don't know if this is all the 1,000 people, but you see it's a lot of people. We have a great team.

We have about 4,000 employees. They work really hard every single day. And sometimes night if we talk about the Q4, you know that we work in 3 shifts there. They really work hard to make our consumers happy. And so I can talk a lot now about what they are doing. But actually, we let them talk because we put together a video of -- and asking them, what are you exceptionally proud of in the past year and they handed in those seats.

[Presentation]

So great team, great spirit, and we are extremely proud of them as well and take this opportunity also to thank the whole CEWE team for what they delivered in the past year. So -- and this brings me to my final slide in this section. I just want to give you kind of a strategic wrap-up of how we see it in the photofinishing industry.

We are convinced that we are extremely, extremely well positioned in this photofinishing industry. You see the brands we're active with in this industry. We are driven, and this is something I really wanted to bring across in this session today. We are driven by consumers, by customer satisfaction, retention or loyalty, however you want to say that. It is only possible by continuous innovation. We don't stand still never as a company. We don't stand still in terms of product innovation. We don't stand still in terms of ordering channel innovation.

We don't stand still in innovation in our factories, very important. If we look back, the photofinishing market is not very transparent. We have a couple of figures. All of the figures we have, all of them show that we did have market share gains in the past year. All the figures we did not have, but we have a good market feeling indicate the same. So this company drove market share up. This is very important. And this -- and why? Because we have great brand positions there.

We also deliver -- we're also able to deliver steady organic growth, which is largely, not totally, but largely independent from economic development. So as long as people travel, this is one big driver. And as long as Christmas does exist, this business will be healthy, very clearly. So we have a focus on efficiency and production and administration. However, we are not yet there. I think this is something we also need to address here. We are not leveraging the group size enough. You know how important it is to have different brands. You know how important it is to be active in different countries. But do we leverage the group size enough? We saw our EBIT increase less than our turnover.

So we clearly have, as one of our targets, the goal to scale better, still retain our brand positioning, still retaining our local touch and feel to the markets, but we are working clearly on programs of how to scale this company better because this is something where we want to improve and need to improve. We have a good financial strength. Sirka will tell you in a minute more about this one. We have a good financial strength. It enables us for additional growth in an inorganic way.

So we are looking actively for acquisitions. I mean, today is not the day where we are able to send out any ad hoc messages, but be assured that we're working on them, but we select the targets we want to very carefully. We negotiate very carefully. We have them all still on the table. And as I used to say, well, we have deep pockets, good financial strength, but we have short hands. So whatever we do, we do very carefully, but we have clearly opportunities in front of us, and we will use them. So this, Sirka, brings me to the hard figures, right?

Yes. And I guess I will have a hard job to do here because myself, I can say I'm still touched from the videos. So I don't know how much are you still interested in listening to my dry numbers here.

So -- but anyway, looking into the business segment, photofinishing, which is our most important segment, at least 86% of our turnover is fed by the photofinishing business. So the turnover over '25 grew by 4.4%. So Thomas mentioned already a little bit so by what type of products, so what made our photofinishing so successful. I guess the most important story about the turnover is here really that we are proud of volume growth instead of just increasing the prices. So it's obviously -- and this is here really across all the products, the case, while the revenue per photo rose by 0.3%.

Looking into the EBIT, also Thomas mentioned already a little bit, which is true for the entire group that our EBIT is not so fast growing than our turnover. So -- and this is mainly driven by higher personnel costs, in fact, EUR 12.5 million additional personnel costs. And this is a mixture of wage increases, new hires, but also onetime effects because in '25, we had board changes. And so for the top line, we need also to spend a little bit more on our marketing budget and EUR 7.6 million more marketing costs helped also us for supporting the top line.

With the third impact of our EBIT, we also have to notice that the IT costs are rising. I guess we are not the only one in the market who is suffering a bit from the entire development and also the strength of our IT partners. So our IT license fees rose only for the photofinishing business by EUR 1.7 million. So we can conclude that photofinishing continues to grow both top line and bottom line as well. And for the top line, we are happy for the volume growth.

Analyzing the seasonality effect across all the quarters show us how important the last quarter is. I mean, if you look into the numbers turnover-wise, you can really see that we double up the turnover from the quarters in our last quarter, and that has something to do with Christmas, which is for sure and reserved and blocked for our customer base, obviously. So -- but also we could see a continuously growth over all the quarters, which is also a very good sign for us. So the targets were all the time exceeded and which is not only a good motivation for our team, but also it helps us with the numbers.

Looking into the EBIT, of course, you can see here, again, a massive seasonality effect. These graphs show you that we make our money only in the last quarter of the year. And -- but all -- throughout all the quarters, we were within the expected targets, which is also something where we are happy about. Let's change a bit the perspective and looking into the number of prints and the turnover of the photofinishing. You can see here the number of total prints is exceeded -- it was exceeding our targets of 2%.

So we have an increase of 4.1% -- and then if you multiply the turnover per photo, which is also increasing, that makes our turnover of the photofinishing so -- and is increasing, of course, our revenue in total. So very, very proud and very good to see. And if we move now to our core product, Thomas mentioned it, and also maybe you have seen it in the video and you get a bit of flavor again, 3.5% increase. It's the plus of our core product and only in the last quarter with an increase of 1.6%. And this is following the trend and also a success of our constant innovation and the power of our teams. You have seen the beautiful layouts, the premiumization.

So all our customers, especially the creational ones, really like the nice designs and materials. And so yes, good story, I would say. And -- but let's switch to our other business segment, the commercial online printing business. And we combine here Via Printo, [ ZAXOPRIN and LASERLINE ] and focusing on business advertising prints, flyer cards, stationary packaging, promotional items, merchandising, business cards, et cetera. And if you look here into the numbers, we must say, if you only see the dry numbers here, you would say, okay, what's going on there? What we must admit that -- and if you observe the market, there's an unchanged and ongoing trend of digitization for our commercial online printing clients and the entire market is undergoing significant reductions. And that's why we can be satisfied with the only reduction of turnover by 0.4%.

So obviously, our best price guarantee strategy is helping and supporting that still we are gaining market share. And EBIT-wise, we cut obviously our results into half compared to last year, but we are still earning money with the business. And so the -- the EBIT was mainly reduced due to the competitive pricing level in the market, but also due to our investments into the international business. So we grew out a bit more to Netherlands, Belgium, France, Spain and also U.K. And we also spent some money into our efficiency-enhancing ideas, the terms here hybrid production. And what does it mean? It means the combination of offset and digital printing. It's really impressive if you would be on site in our production.

Also when I go to our shops in South and Central Eastern Europe, but also to Scandinavia, it's really nice to see, walk through the CV stores. And so we have more than 100 retail stores. And this segment is also about the e-commerce web shops where we sell hardware. And so there's a point of sale where we get really physically also in touch with our customers. And if you look into these numbers, and honestly, we didn't expect this good development after years of stagnation, we can see increase of turnover. And even everything is still on a low level, but it's going into the right direction.

We have a plus of 2% in turnover, and we are even more proud also on the EBIT development, which shows us a very positive result development. So great development, a bit surprised. I was really also surprised how much interest a lot of our customers have also in these products like frames and also all the products we sell around and the P. less exciting for the completeness, we also have to talk about the remaining segment others. And this is mainly about the structural and corporate costs. And so we are generating also our EBIT out of renting out properties. And this year, the income was a bit higher so that we have an improved EBIT, but it's not our core business.

So moving to our financials. And -- if we look into our balance sheet, and this is a snapshot. I will come back to that snapshot information message once more later. You can see here that we have following the trend growing our asset base. And so this is in '25, not only driven by some effects, what happens over the year-end over the date 31st of December. It is also because we build it up our inventory. So we bought for or restored for more than EUR 4 million photo paper for our photofinishing business, but also for the commercial online printing business we prepared and for supporting also the prints for the elections we have across Germany.

So the total asset base increased also because of our buildup in the properties, the renovations we had. And so the asset base increased by EUR 23.7 million. And if we look into the equity ratio, it's following, again, the increased path. So this is what Thomas when he's talking about full pockets. So we have a massive financial power also to invest with such an equity ratio of now 61%, 61.2% exactly. And of course, the equity is reflecting also our solid results and corrected by the dividends we also a very healthy balance sheet, but also it's showing a bit we are ready. We are ready for the growth.

So let's move to the free cash flow and the operating -- the operative net working capital decreases by EUR 22 million due to the reduction of trade receivables and EUR 3 million higher tax prepayments. And as I mentioned beforehand, also the increase in inventories. So -- and these movements over the year-end plus the investments we had. And so this is mainly into our property plant where we produce, we usually own also the property also to keep our best freedom to build up our production in the way we would like to produce. And so this is, of course, also reflected here in the investing activities. And that leads to a free cash flow as a snapshot of the end of the year by EUR 43.7 million. And for the analysis purposes, we showed a bit also these single effects.

So to normalize the cash flow to give you a bit of flavor what the overall relation is. So as I mentioned, the analyzing the one-off effects, so what would we anticipate if you would normalize our cash flow to see and understand a bit more where we are. You can see here the advanced debt collections by retail partners compared to last year, the tax payments, but also the higher inventory buildup year-on-year, but also the earlier repayment of liabilities and the special investments into real estate renovation and construction and corrected also by the subsidiaries we got for our renovation and new build inburg. So that leads to a normalized cash flow here of EUR 70.8 million if we would take out these extraordinary and one-off effects.

To show you a bit compared to the last -- or what happens over the last year. So we did the same exercise by taking out these special effects over the last years. And there, you can see we are following the trend, and we are within the corridor. And so this is nothing to be concerned about these days. Return on capital employed 17.6%. It's at the level of '22. And as you know, this is influenced also by segments where we have not such a high profitability as the commercial online print. We can see here the dilution, of course, of the return on capital employed for the group's level, it's 17.6%, which is still strong and where we can be very happy about and where we are satisfied about. So last but not least, dividends.

So obviously, I would say, unique story, only very few companies at the stock exchange can tell this. So for the 17th time in the row, we recommend as management Board, the increase of the dividend by EUR 0.15 to EUR 3, and this will propose to the general meeting, which will take place in June. And so the EUR 3 is also a bit anticipating our results situation, but also showing our strong commitment also to the investors. So that leads me to hand over to Thomas.

Thank you very much, Sirka. And I believe the dividend story is really a great, great story, very well received by all of you, by all of our investors. I think we have roughly how to say that, a dividend ratio of 3% compared to our stock price right now, which is also quite attractive, right? So now it's time to take out the crystal ball a little bit and look into the outlook. Why the crystal ball? Well, Sirka has told you how important the fourth quarter is. So everything we do will depend -- will be dependent, of course, of the fourth quarter as usual.

So how do we see the year 2026? And let's first maybe look a little bit in the environment around us. So we see inflation has come down a lot, which is nice. Consumer confidence, well, this depends now a little bit also of the global situation probably, but consumer confidence is not really under pressure. We have stable labor market conditions and people travel. This is important. Also, if we look at the travel companies, we follow them quite closely. how are they doing in terms of travel? What is it TUI, for example, doing? Do people travel? And they also confirmed their strong position. They had a strong first quarter.

So we are quite confident that we can grow the business again. We lay down range between EUR 870 million and EUR 900 million for the turnover, again, driven obviously by photofinishing here and everything will depend as usually on the fourth quarter. With this expected range we laid down here, we will continue our growth path. We have this long-term growth path, and we are constantly on this growth path.

We watch that very closely, and we see it develop very well. And the same is true for our EBIT. We are always a bit cautious there. The EBIT range almost at the lower end being roughly at where we were in last year, but we see also a goal -- we also see a goal of 93% here at the upper range, maybe.

Yes, thank you very much. And a little bit more to the details here. Again, in the photos, we were at EUR 2.6 billion photos. We see a growth path here of up to 3%. The same is true for the CEWE PHOTOBOOK. We want to invest a little bit more. This has a lot to do with, let's say, some movements, which -- some investments we didn't do in '25 to '26. And the most important thing is our turnover growth between 1% and 4% and an EBIT between minus 1% and plus 6%. So at the end of the day, the goal is to become more profitable. I think that's the bottom line you should take with here.

And this concludes us and concludes this presentation, not the session because as I said, we will have a Q&A session with you. So please feel free to post your question in the chat. We will take them together, transcribe them. If you put them in English, please do so. If you only do that in German, no problem, we will translate them and answer that over the air. If you go home from that session, you should take one thing with you. Everything we do here is to make customers happy. That really drives us. So thank you very much.

Thank you very much, Mr. Mehls and Ms. Hintze for your insightful presentation. Ladies and gentlemen, let me shortly stop the recording at this point.

Good morning, ladies and gentlemen, and welcome to today's analyst conference call of the CEWE Group following the publication of the Q3 financial results of 2025. I am delighted to welcome the CEO, Thomas Mehls; and CFO, Sirka Hintze, with Vice President IR, Axel Weber in the room, who will speak in a moment and guide us through the presentation and the results. [Operator Instructions] And the recording will be stopped after the presentation and before the Q&A session.

Having said this, Mr. Mehls, the stage is yours.

Yes. Thank you very much for your welcome, and I wish you all a very warm welcome on behalf of Sirka Hintze and Axel Weber, whom you will not see, but he is in the room controlling us a little bit, I would say. So I hope you're all very well prepared for Christmas. You have made up your minds about your Christmas presents because we are prepared for Christmas. And that's important. We will come back to that one.

So we would like to guide you a little bit through our Q3. You know that Q3 is the most important quarter of CEWE, maybe not in a financial way, but especially in the way how we prepare for the Q4. And this being said, this is obviously right now in our focus. So let's go through the figures and the results. We will present, as always, a slight overview. We will also tell you a little bit about our Christmas preparation and what's coming up for Christmas, and then we will go into each of our segments.

So as said, the CEWE Group, and you have read our communication with expected seasonally typical Q3 results. Well, I would phrase it a little bit more optimistic, to be honest. We are quite happy with the top line development we are seeing here. Group turnover increases by more than 6%, and you will see that later on. It's a little bit actually above our expectations while the EBIT development is truly within our expectations. Yes, of course, some cost challenges remain, but I will tell you a little bit more about this while we are actually quite positive about the Q3 development.

So -- and we will come to our outlook at the end of the presentation, but our annual targets for 2025 are also confirmed. So let's look a little bit how the situation is in the view of the whole year. And you see our revenue development, group turnover did increase by almost 5 percentage points. And again, there's a very positive notion in that one. We will come to that one in a little bit, but volume is the big topic, which we are quite optimistic and bullish about.

The group EBIT, yes, is a little bit below last year. We did comment in our last call already about a couple of one-off effects there. We do have some challenges on the cost side, but we are quite optimistic, nevertheless, regarding Q4, and I will comment on that one in a little bit as well. And well, obviously, looking at these figures, we also confirm our annual targets for 2025. So the -- let's say, more detailed comments will come in each of our sections. So if I said, well, are you prepared for Q4 and for your personal Christmas present, we indeed are prepared for Q4. Actually, we are in Q4 already. And I think it's important to kind of look at what's needed in Q4 to reach our guidance here.

And as I said, we are quite optimistic that the Q4 will deliver as expected and maybe even beyond. Operating leverage effect is the big topic here, and we will come to that one in a little bit. So as you know, we have an EBIT target range between EUR 84 million and EUR 92 million. And what is needed to achieve that is somewhere in between an improvement of EUR 1 million and EUR 9 million. And given the growth we have experienced in Q1 and Q3, well, we have experienced and that's kind of passive. Actually, we have managed that growth.

We have thought a lot about getting this growth in. And if we succeed in the same way that we did in the first 3 quarters, if we succeed in the same way in Q4, we are, again, as being said, quite optimistic to achieve this target. And again, as I said, EUR 1 million more, EUR 9 million more or less, that's the range -- improvement. That's the range we need to achieve there. So operating leverage, and we will come to volume in a little bit is the big topic here. And those of you, and I know many of you have followed us for many years right now, and you know how big the operating leverage effect is that we're having in Q4. And well, you can contribute a little bit into that one as well by ordering some of your Christmas presents at CEWE, we will be happy.

Okay. Let's continue. And as always, well, now let's look at the numbers of photofinishing. I would love to say, but as always, well, the numbers follow a lot of activities, and I would like to take you through a little bit of a journey we had. And you might know every 2 years, roughly, we do present the winners of the CEWE Photo Award. The CEWE Photo Award is something where we do not directly earn a lot of money with, but it's a very important brand activity. This brand you're following is organizing the world's biggest photo contest, and we had more than 650,000 photos uploaded into our systems, and we did the award ceremony in Prague, and we had people from all over the world, Indonesia, China, Cyprus and so on, and we would like to show you a little bit the quality of the photos we did experience.

The winner we're going to see right now is actually coming from Cyprus, and that's the Danlock photo. I forgot the English name of these, dancing, dancing -- well, and I'm looking at Axel, that's a difficult name in German even, but maybe I will follow up on that one. So it's a great picture. It's a macro shot of Hassan Baglar, who won with this shot actually. And he did won with similar shot actually in National Geographic Photos, so quite astonishing.

So this beautiful RC shot is the favourite of our President of the jury. It's something at the Lake Garda in Italy, shot in the early morning, just a beautiful orchestrated picture you're seeing here. The next one is our Young Talent Award. It's very important for us to actually promote photography also to young people. We're actually also quite bullish on that one. I mean that's a more strategic discussion we are having. Photography is quite popular beyond actually Insta and TikTok and all these platforms, and we are promoting that one. So that's a very young photographer from France who won that one. Astonishing picture here from a photography from Belgium. Between the lines, I think it's perfect title. And you can imagine that's shot in a blink of an eye here.

The next one comes from Indonesia, United Colors. Photography is about emotions and this guy really managed to capture emotion. This is a photography from the Ukraine with a drone shot. Drones are famous in Ukraine now sadly for many other things, but this is a drum shot actually from about a cruise ship and a small piece. So if you look a little bit from the far, you see that the swimming pools actually form 2 letters. And well, thank you, Axel. I just got it. It's the Praying Mantis, the winner shot, sorry for my bad English here. That's the one you saw at the very beginning.

This is a shot from China, and you see actually 3 creatures here in a very -- well, lucky moment for the bird and an unhappy moment for the big fish. And well, the small one actually was in an unhappy situation anyway. So a very, very lucky and great shot. And that's even an RC kind of shot from a cat, photographer from Brazil actually and he shot this one with a smartphone. So you do not need a big inexpensive lens.

So for those of you who are football fans, this is a shot actually from the U.K., but you're not looking at U.K. spectators, you're looking actually at French spectators uniting in a pub in the U.K. And I mean, this is really capturing emotions in a precise moment. Actually, it's a missed shot from the French team, again, in the World Cup match against Argentina, but finally, they won. So it's about that one. And cooking and food, obviously, is an important category for many of these. This is a bit staged, but only a bit because it's a real drink and the photographer at the end of the day drank this drink. You know a lot about photography. Food photography is about staging, but this one is just a little bit staged.

And this is a great shot from Saudi Arabia. It's a professional photographer actually from Slovakia on a trip to Saudi Arabia, who really managed to get into a cave and shot this one from within the cave. So great pictures, great ceremony, great for the brands and actually a lot of big reception also in the press of these photos. So look into the publications in your respective countries, and you're very likely to find some of these coverts.

But coming again to Christmas, and we are preparing and we did prepare a lot for Christmas. Actually, now we are prepared. Now we are in the running up. So if you happen to have a look in the production right now, you see a lot of young people being trained on the different machines. You know that we will switch very soon into 7 days a week, 24 hours production. We have a lot of seasonal workers on board. They need to be trained into the processes, and that's what's happening right now in production.

But on the customer side, obviously, we want to really convince our consumers, the new ones and the ones that did order before with the new features. So we have the momento pocket, which we did test last year, it was quite successful actually, also a bit above my personal expectations. You can actually collect within your CEWE Photobook, you can collect the things like boarding passes or pictures or postcards or whatever it might be that's occurred during the holiday. And now you're able actually to do that with all the products because the test we did was very, very successful.

Also, design is a very important topic. A lot of our consumers complained about the first page that this was always in an either boring white or boring black and design is very important to them. So we now made it possible that they can order. That's something you don't find in the bookstore that you can actually design your first page in the way you would -- the book continues, very nice. Design actually is a big topic. It's a big topic. People love to professionalize on the one hand side, their books, but not all are professionals.

So we need to really help people to create great books without putting in a lot of work. And that's a very successful move we did over the last years. That -- it's just one of the examples, premium cover designs now for CEWE Photobook. But we do really roll out design features across the whole portfolio. And it's very successful in 2 ways basically. It does increase conversion because it just doesn't -- it does help you to create a more beautiful product. But we also did introduce premium designs so that you actually pay a little bit of extra. And you would call it the digital product almost because for the production, it's the same whether you print product with the design or without the design. So also economically speaking, quite a successful move, I would say.

Sustainability and customer centricity is very important to us. We know that many consumers are reluctant to throw away their calendar after the month is over or the year is over. So we're trying now to work with detachable photos in the respect that you can reuse these photos, maybe put it up in the pinboard or send it to relatives or something like this. So that was a big request for consumers if we can help them with that one. So it's actually a test in one calendar type we're doing right now, and let's see how that is going to be.

Yes, calendars. I used to call calendars basically a piece of wall art, which changes every month. And calendars -- the biggest volume in calendars actually for us is A4 calendars and then A3 is the next one, and then we have the A2. And we now really introduce a breathtaking format, and it's really a piece of wall art which you can put against your wall, but it changes the picture every month if you happen to turn it around. So big one, cost about EUR 60 in the basic digital printed version. So also economically speaking, quite nice.

Yes, calendar for 2. So maybe you have your daily routines, your partner has his or her daily routines. So how to put them together. I go to my yoga lessons, my partner maybe go swimming and how to match these calendars. So it's quite a neat idea to say, okay, it's a calendar actually for 2. It's also a nice gift for Christmas, we believe. So let's see how that goes. So also adding things to the calendar section, sometimes removing things which are not doing that well anymore. So a constant change of portfolio is important to give it a fresh look, but also follow market trends or set market trends actually.

And this being said, frames astonishingly are quite in fashion. Is that the way you say that? So still, you would say, well, frames is maybe an old school product, but growth in frames is strong. We see that, and you can now order your prints and that prints maybe margin-wise is not the best product we are having. It's also not the most expensive products. So average order value in prints, as you can imagine, is quite low. So to directly order with the prints, wooden frame is a need for consumers and hopefully need for business as well.

As I said, printing with young people is quite fashionable. So to have add-on products like a wooden foot or rail where you can put your foot not only on maybe a pinboard, but actually at your wall. I mean, this really is an add-on product. Again, economically speaking, good. It's not a lot of work for us in the production. On the other hand side, it's great for consumers how to present their pictures. And actually, it's quite a young product.

And here, basically, we did talk about design. We're helping a bit with design. This is something you don't design the interior color of the mug, but mugs are designed products. And here you see one of the designs you can order with your pictures, you're the avocado to my toast, probably a nice thing, right? And last but certainly not least in terms of something we're trying to address new target groups in many European countries, pets, especially dogs and cats are becoming a new family member and people are willing to spend a lot on their beloved pets. And adding a nice photo maybe to the photo treat jar of a buddy as it says here, I think, is a nice idea.

And if you happen to have an anniversary coming up in your family and you want to celebrate that one with pictures, and again, this is great designs we're introducing here, you can celebrate it maybe in a different way. You can put it up in the gift table, which you're setting up there. So quite a neat idea. And well, it's 13th of November. 1st of December is coming up. And in many, not in all, but in many European countries, Advent calendars are quite fashionable there.

You can have the [indiscernible] version, as I call it, with just photos there. We will come to a special version in a minute here. We have the chocolate ones. We have the Tony's Chocolonely ones. But there are a lot of people out there which like to set up their own Advent calendar with maybe little treats they put in there. And this being in a box with a very personal pictures is something new. And for us, we are quite professional in printing paper. So I think it's a good product for us here.

And we do have some movements out there where people do not want to maybe gift or small gift with an advent calendar or chocolate, but maybe with activities and inspirations and some sayings in there. So people are changing quite a bit and just reflecting on their inner self, and this is something we want to address here with a very special advent calendar with activities and inspiration, which goes beyond the usual chocolate treat, which is maybe even chocolate or an Advent calendar.

And last but not least, we are working also on digital or let's say, business models, which are close to our business, but going more digital here. So a digital greeting card, and I did talk about the design orientation we have in our products where design helps people to create products. And maybe you want to have your invitation to your birthday sent also in addition to the greeting card or just on a digital way, but we still help you to design this digital greeting card and not just a WhatsApp message, right, where you can put in your personal picture combined with a great design.

So this is a test, how people respond to that one. And no, it's not for free. So I know we are on an analyst call, so it's important you might want to ask if we actually earn some money with that one. Yes, we do. So -- and good news also running up for the Christmas season. We talk a lot about ourselves that we think we are well prepared for Christmas and that we have great products. The TIPA association, that's a jury kind of price did award us with a record number of awards this year. But the TIPA being publications and blocks for professional photographers, they also did ask their readers about their professional -- of their best choice products. And they did choose the CEWE Photobook with the Panorama page as Favorite Design of the Year.

And this makes us quite proud because that's professional photographers and you know that professional photographers are opinion leaders also in the B2C community. So this a little bit, and I could go on and talk for hours about the things that we're doing in preparation for Q4. But let's come to the photofinishing. Let's have a look at the numbers of the Q3. And again, as I said, we are not entirely dissatisfied with what we are have seen here in Q3 to put it in Northern German humble wording here.

So our photofinishing turnover did increase by almost 7%. That's good. That's not too bad, I would say. It's EUR 145.3 million. That's again a record. That's again a number we did not have before. And the increase in revenue, we will come to that in a little bit is primarily volume driven. So you would say, well, why is it not price driven, can't you increase prices anymore. We did increase, as you know, prices in the year before quite a bit. So we did pause a little bit on that one also given a little bit the consumer sentiments we feel out there and we managed to really drive volume. And that's a great sign for Q4, given the leverage effect, which we have in Q4 that we really are seeing a volume growth, which we did not see many years before, and that's quite nice.

On the EBIT scale, yes, we're a little bit below last year. We would say almost in the same range. So yes, of course, we are looking at transferring this growth, which we have in turnover into EBIT. Obviously, that's our goal. We do still have and are seeing some cost increase challenges, but they're a lot less so in Q3 than we did see them in Q2. So that's a good sign. And we know exactly where these cost increases are coming from. We did deliberately invest into marketing also in the light of Q4. Some of the cost increases, well, we did deliberately, but we're not as happy as with the marketing because that's IT cost increases and others.

So we are in managing these ones. But also, you will see that in a little bit, the EBIT line is fully in what we did expect from the Q3. So -- and well, this is basically a repetition. If you did follow us in the last quarters, that's the sum of the quarters we have seen. So we see a nice growth. And comparing that one, you've seen that the growth in Q3 actually was stronger than it is accumulated in the first 3 quarters. And while we did talk about the EBIT, we are a bit behind. You still see the one-off effects we have here and you know that we did have a new collective agreement with one-off effects, and we did have 2 departing Board members, and we have some salary accruals over there, one-off effects in the last quarter. So this is why the gap and the EBITDA for the finishing year accumulated is a bit higher, but it's all explainable for us. And again, it's fully in the expectation, and this is why we are quite positive for Q4.

So giving a little bit of perspective here again, and you see actually the turnover, and that's a good news really in all quarters, Q1 and Q2 and Q3 is above the planned target range. So what we are seeing here is a turnover development where we would say, well, even a little bit above our expectations there in all 3 quarters above the planned target range. Well -- but what you see also is the big turnover impact, which we are usually having in Q4. And obviously, for the year 2025, you don't see a column there. This is what we are working on right now.

So good turnover development and have that in mind driven by volume growth, we will come to that one. So the turnover target for 2025, we see that confirmed. And this, of course, looking at the EBIT with the same way. And I think you can see a little bit why I said the Q3 is the most important quarter for us in terms of Christmas preparation, but maybe not in numbers. So you can also see why we feel that everything we have seen so far in EBIT is in line with our expectations and is not blocking us from reaching our annual targets.

So -- and this is what I commented on. We do see in Q3 a nice volume growth and volume, you can see -- you can look at that in different ways. We have the measurement of total prints and so the prints in all of our photo products may be just a single print or a CEWE Photobook, but maybe 200 photos in there. So we have a volume growth of 6.8%. Actually, we are growing across mainly all categories. The value per photo, which gives then the turnover due to some -- it's not accrual actually to some effects where we actually draw the border between the quarters compared to last year, actually looks like we're stagnating here.

Actually, we are continuing with our premiumization if we really eliminate this effect, we did grow by 0.5% also in premiumization. And this is what I was trying to say in terms of designs and all these other things. All these things play very well into our premiumization strategy. And you don't see in our official numbers, but I can tell you, and it's -- actually, it's in the bubble here, 0.5% actually premiumization effect. So also this story continues. So very nice volume growth effect, which we are seeing in the third quarter, which again makes us optimistic for the fourth quarter.

And well, this is the effect we are seeing across the accumulated effect across the 3 years. So volume effect of 4.2%. You see the third quarter was stronger in volume, value per photo about 1%. So it's a constant growth. And this is what we are seeing again is very, very little price effects because we did not work this year that much on price. And this gives us the turnover growth of a little bit more than 5% for the finishing.

Looking at the CEWE Photobook, you know how important this CEWE Photobook is for us as a company. And we are seeing growth numbers here, which are really good, really good in Q3. It also makes us very optimistic for Q4 because the CEWE Photobook for the fourth quarter is also quite important. We did experience a growth here. Now I continue to say we did experience, right? It sounds like it's coming from the sky. Actually, we did work on managing a growth of 7.3% for the CEWE Photobook. There's a lot of work of all the teams in there. So more than 7% volume growth for the CEWE Photobook and you can see premiumization works here. Actually the turnover growth with almost 9% is even stronger than volume growth.

So also nice confirmation, I would say, on our strategy and also confirmation on our outlook. Then let's come to the Commercial Online Print segment. And also just to remember again, this is the setup we are having here with the service focus via printer brand, Saxoprint with a cost leader and actually the best price guarantee. You know that from the last quarters and the regional LASERLINE brand. And actually, it was a better quarter, Q3 was a better quarter though not good yet, not great yet, but a better quarter also than the second quarter. So we actually did see some turnover development.

You might remember me commenting on the last quarter where we said, well, we do see a very weak German economy, and this is reflected in our German numbers in the Commercial Online Print segment. So we did invest internationally, that continued and actually, we did manage some turnover growth. But you also did hear me say, well, this international growth is not as profitable, not as strong in margin as the German turnover. And you might remember that we are still in the process of shifting to digital -- not away from offset, but I would say additional to digital print, which gives us a big cost effect.

It's not yet totally up and running. I think we brought in the last machine now, and I'm quite confident that from Q1 next year because this is the focus you know that we're also helping with the commercial online print a little bit in the photofinishing. So from Q1, we see hopefully, the good effects that we did expect with the shift or additional digital print in the commercial online print. So -- and here, you see why I said, well, the third quarter was actually a healthier and more brighter outlook than the first 2 quarters because you see accumulated that we are EUR 1.7 million away from our last year result here in EBIT. And actually, the turnover accumulated only grew by 0.2%. So nothing which makes us extremely happy.

So let's really -- real quick go into Retail. That's the segment which is not in the most strategic focus of us, but gives us a nice window to the world on photofinishing products. What are we doing in retail there? We have about 100 shops, mainly in Scandinavia and Central and Eastern Europe, actually in Homburg. So if you happen to come by, visit our shop here. But we also do have e-commerce web shops that sell hardware and also photo products in -- with all of these brands. We are moving these brands closer to the CEWE brand. That works actually quite well.

We are moving these stores away from the, we call it, hard hardware. The hard hardware -- what is hard hardware? It's a camera, it's a lens. So these things which are usually associate in the old world with the camera shops and we are moving more to photofinishing. That's in line with our strategy, but also moving into products which are closer to photofinishing. These are frames and albums and so on. And that actually pays off quite well.

So looking at the next slide, you can see that also in the Q3, we did experience here a nice turnover growth, which comes from actually hardware. So we are looking not at the photofinishing part of retail here, we're looking at the hardware part of retail. So it's 7% growth. We do profit a bit from the weakness of a competitor in Norway, but we're not only growing in Norway and the strategy to focus more on photofinishing related hardware, software/hardware, that's the way we call it actually, on software/hardware products also pay off quite well.

But you also see that this is not the most -- the strongest margin business. This is actually why it's not that much in our strategic focus because the turnover growth we are seeing here did actually convert a little bit into EBIT. And if we look to the accumulated figures, you see even better what I'm talking about. We did increase by EUR 1.4 million in the turnover, but only very slightly the EBIT. So it's not a very margin -- it's not a big margin driver of our overall business. So just to complete the segment overview, we have a segment of other, which you did use to -- in the year 2021, you did see an activity there, which we actually sold. And then what we use here is special costs, which are not related to all the other segments.

So something like corporate costs regarding to the boards and so on and so on, but also some incomes and profits, which we have from our real estate activities. It's not big usually, but we do have a couple of buildings and actually lands, which we rent out and the rent effects you see here. And it's nicely a slight improvement. And now we are looking at the accumulated figures, so it's EUR 0.5 million better than it was last year. That's fine.

So -- this now me talking for 35 minutes, sorry, but it's important that also get a glimpse of how we look into the fourth quarter. So this was a little bit also of a commercial break in between. I will come back to my commercial break at the end of the session, but now to the financial details.

Thank you very much. So Thomas expressed quite detailed about our commercial developments. And of course, this is what we will see, and this is especially expressed in our consolidated income statement. And what you can read here is exactly what Thomas gave us a bit of flavor about is the preparation of Christmas. So you can see here, of course, some operating expenses are increasing. So the marketing expenses, Thomas mentioned, so we are getting prepared for Christmas. And maybe also as an insight, if you would go through our halls here in Oldenburg or in all the other locations we have, you would already feel how concentrated and focused the people are.

And if you go to our store and inventory parts, you would see it's filling up. So we're getting prepared. We will see that also later in our cash flow and cash outflows actually. And so we had good growth that was explained by Thomas, and that's being said is that all business segments contributed -- are contributing to our revenue increase, which is quite significant, especially also if you consider the different weakness in the different European countries in developing their economies. And so that's why we are always saying we are not unsatisfied. But I guess we can also be proud as an organization to handle and service these emotional products to our consumers and customers.

So personnel expenses, also Thomas explained a bit. So we had some increases due to tariff changes, and this is reflected, of course, into our personnel expenses. And -- but all in all, not surprisingly. So this is also where we take our responsibility and ownership to our people. So we have -- when we look into the personnel expenses, of course, also reflecting our growth, new hires in photofinishing and also in the numbers, you can see the increase of wages.

Next page. So the balance sheet first time crosses the EUR 600 million, and it's quite a good and solid growth, especially driven by the higher cash position on the one hand, but also, as I said, in preparation of our Christmas and our last and most important season this year to increase the inventory by paper, photo paper, but also we built up into our facilities and so the property and plant and equipment, and this is our backbone of the business to produce what you can hold in your hands later when you have bought our products.

So from an equity perspective, we are still on a very safe and strong growth into our equity ratio by end of September. We achieved 66.6%, which is quite a good development. But it's also, on the other hand, built on the strong results of '24. And this is also what we can see that the cushion we built up in cash is also mainly coming out of the business of last year. So for the free cash flow, we can see here only in the Q3, a development, which shows that a significant or significant outflows reflecting, of course, the free cash flow we have.

On the one hand, we have operating activities, which deliver, of course, the income and have to be taken for, I would say, reliabilities we have to pay for. So the tax payments, which are a bit higher than last year and also due to the effects of the year of '23. So we have a cash outflow, which is related to our investing activities. We have invested into digital printing and point-of-sale machineries. And that leaves us in the Q3 with a decline of cash flow of EUR 3.4 million compared to previous year.

Summing it up or the year-to-date free cash flow is decreased all in all by EUR 14.5 million compared to previous year. And this is due to less operating -- cash driven operating activities and due to, of course, lower earnings. So all in all, we have a decrease of EUR 3.7 million EBITDA. And this is, of course, reflected in the cash flow. And on the other hand, we have acquisitions of Esprint of the last year and the investment into the equipment, as I mentioned, into the new building in Freiburg or renewals and modernization.

And of course, also we have less investments into intangible assets, likely higher investments into SAP S/4HANA and this leaves us with a year-to-date free cash flow of minus EUR 65.2 million. For the return on capital employed, we don't see any strong changes, I would say. I mean, so all in all, we have a strong level of 16.8%, excluding the increase in cash, so the capital employed ratio is even at 17%. And of course, also the ROCE is reflecting our overall business and is not only related to our photofinishing business and is influenced by our commercial online printing business, of course, as well.

Okay. So no new surprises, I would say. So the commercial development is developing our and driving our cash and balance sheet development and here and there some extra effects which has also a drive by our season.

Yes, very much so. Thank you, Sirka. And looking forward, and as we said, everything we see here in the first 3 quarters actually makes us quite optimistic for the fourth quarter. That's a very strong and important message for you to take away. All the effects where you would maybe say, well, this is something could be better here and there. Yes, we're seeing that one, but are very well explainable. It's also very, very important for you to -- as a takeaway. And this taken together confirms our outlook.

You see here the famous chart, I would say, Axel, which you're used to. So this is our revenue development here. And you might remember that we did set a target between EUR 835 million to EUR 865 million. And well, everything you've seen today, I think, gives you the strong idea that this outlook is probably being fulfilled. We are quite optimistic, and we are confirming it. And the same is true for the EBIT target. Here, you see the big -- well, dependency importance, however you want to call that, of photofinishing. You see that Retail and Commercial Online Print actually in our expectations play a minor role. So it all comes down to photofinishing. This is why it's so important for us to prepare well for Christmas here.

And again, we are confirming our outlook for the year 2025 between EUR 84 million and EUR 92 million. So -- and this brings us also -- well, these are the volume figures, and you saw that we are developing quite strongly over there. This brings us to my last commercial break, if you like. So this is -- the German might CEWE Photobook. We could put up a Polish, we could put up an English one or a French one or whatever it might be here. It's not important the language. It's important that you really care for your loved ones. And just remember, the best presence under a Christmas tree is usually a very personal one. There's no better present than a photo product from CEWE. So it may it be a CEWE Photobook or a calendar from us. You will see some tears in the eyes of few beloved ones.