U.S. Markets closed

Edited Transcript of CWC.DE earnings conference call or presentation 12-May-20 8:00am GMT

Q1 2020 Cewe Stiftung & Co KGaA Earnings Call

Oldenburg May 15, 2020 (Thomson StreetEvents) -- Edited Transcript of Cewe Stiftung & Co KGaA earnings conference call or presentation Tuesday, May 12, 2020 at 8:00:00am GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Olaf Holzkämper

Cewe Stiftung & Co. KGaA - CFO, Member of The Board

* Christian Friege

Cewe Stiftung & Co. KGaA - Chairman & CEO

================================================================================

Conference Call Participants

================================================================================

* Winfried Becker

FMR Research - Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Olaf Holzkämper, Cewe Stiftung & Co. KGaA - CFO, Member of The Board [1]

--------------------------------------------------------------------------------

Welcome to all of you to today's conference call regarding our Q1 results conference call in special times. We are sitting here in our normal Board room with big distances. We are doing what social distancing is demanding from us. But actually I would say we are not doing social distancing at CEWE.

Socially and emotionally we are very well tuned. We are very close to each other and with this closeness of all people at CEWE we are actually keeping CEWE on track in a very stable position. And I guess that is what Christian also would like to agree.

--------------------------------------------------------------------------------

Christian Friege, Cewe Stiftung & Co. KGaA - Chairman & CEO [2]

--------------------------------------------------------------------------------

I sure will. Good morning, everyone. It's a great pleasure to talk to you again about Q1. But as these strange times demand, I will not start out with Q1. Let me guide you through some of the steps that we have taken to find our road within the corona crisis.

We have as a number one item, and early on I have to say, focused on health and safety of our employees. Clearly we would always put our customers at the forefront, but in this particular case we felt that our employees would need to be focused on firstly because that enables us to, number two, secure the production capabilities of our Group and of the entire Group.

And I have to say I am very proud of the fact that we had not had to close down any of our facilities due to any health or whatever reasons and that everyone at CEWE actually stuck together in an unprecedented way. There was a big amount of solidarity among the crews of our labs in the different countries. And every facility actually held up their flag and produced for our customers so that, number three, we kept our online and mobile business moving all along.

We were able to deliver our goods and products at any given point in time in all our European geographies. We were also able to communicate with our customers all through these difficult times. And we were able to also shift among our omni-channel business from retail and store distribution to mail order distribution. So, it is very important for us to keep the capabilities going before we focus on anything else. And then obviously also ultimately served our customers so that they came out as our number one focus as they would always be.

Number four, only then did we start to look at cost measures. And surely we took all the necessary steps to ensure that CEWE will go through this crisis on a steady path, minimizing any risk that we could foresee, making sure that the liquidity of our financial means and our cost position would at all times be such that we could actually serve our customers.

We are using those cost measures to safeguard for an unknown future. We have also recorded short time work to safeguard for an unknown future. Luckily we only have to use that in some parts of the business.

We are currently focusing on restarting of our retail business of our commercial online print business of every think that is now slowly opening again. And we are doing so actively. Just to give you a hint of what we are doing, we are using the innovation focus of CEWE, we recorded a new patent last week that hopefully will help us to push forward our on-site finishing in the stores.

And clearly and very transparently communicated, we're also seeking what I would call corona upsides, that is wherever we feel that we can actually get something out of the difficult times of this crisis, we will transfer that into a new future, a new normal. This can either be ways of working; we've worked together through video conferencing with all kinds of new also digital means in a much, much better and more significant way than we were used to before. And we will actually transfer that into the new normal.

We'll also be looking at where is it that we may be able to pick up an interesting business along the way who feel that they cannot go through the corona crisis all by their own, we're looking out for that as well.

So, what I'm trying to say is from focusing on health and safety, we have now emerged to look forward again, to restart those businesses that we have to limit and to look for upside. And you can see here some of the examples. Let me just highlight a few of the things.

We have 13 production plants for our photofinishing division, we have a logistics network that has also been operational at all times so that we can transfer orders between those 13 sites so that we can at all times meet demand even if that is locally shifting from one country to another, from one region to another, at CEWE we'll always be able to deliver.

We have a focus on sourcing of supply products, obviously. We have a program to reduce costs, I did mention that. Let me focus on the different divisions at a later point in time. On the next slide you can see two other things that I would like to underline. We have a very solid financial foundation. Olaf Holzkämper will take you through the details of that.

I can only remind you of the fact that we have actually started out the year with a strong cash position and a strong balance sheet overall with a good -- very good equity ratio. And we actually seek good, solid background of that. And as I said before, we are a omni-channel provider certainly in photofinishing and how that actually is being used to manage the crisis I will show you in half a moment.

Summarizing is that the stay-at-home effect that we started to see towards the end of March is actually on -- supporting us. And the customers -- our customers can use their time at home to create photo products, we can deliver to them through mail order. We are a mail order business in that respect and we are also doing this mail order business on behalf of our partners in retail of the DMs and the [Muellers] and the [LeClair's] and the [Super] (inaudible), etc., etc.

Now moving on swiftly to Q1 in more detail, the corona effects are visible, but we were able to manage them and all-in-all they counterbalance each other. We have the benefit of derisking some of our businesses with upsides in others. And so, our Q1 results are very much in line with the Q1 results last year. The turnover in photofinishing rose by 10.8%. Some of that is because of WhiteWall and the first time that we actually take WhiteWall into account, but certainly not all of that.

We have the commercial online print. By the end of February we saw a slight increase in sales in our commercial online print. And we were very well on track with managing the challenges that we had reported towards the end of last year. However, the commercial online print is also very significantly hit by Corona. And then you can all imagine that yourself.

There is no restaurant who need new menus, there are no fairs who need brochures, there is no tourism going on that needs any leaflets or whatever, there's no posters needed for big events. All of those orders are actually lacking and we see a significant hit of minus 10.5% below previous year's level, that entirely comes out of our March figures.

Obviously the corona shut down -- also hit our retail business with most of the stores being closed in the different countries by the end of March and a hit of 27.5% in turnover. The Group EBIT is basically where it was before. If you take away all the effects of our acquisition depreciations, if you look at the operational EBIT it is almost exactly where it was last year.

So, we can summarize. CEWE had a good quarter one in 2020. We cannot change -- we cannot see a change to that position in April 2020 and that will actually -- we are stable and solidly set up to weather the corona crisis. There still is no serious guidance that we can give you for the entire year because there is so much unclarity about the economic development, the development of consumption of travel and whatnot, whatnot, whatnot in the balance of this year.

And the last thing we've published this morning is the annual shareholders meeting will actually be shifted to the second half of 2020 and will be held as a virtual meeting.

Okay, let's go into the details. In April in the midst of the corona shut downs and the crisis, etc., we got the news that we were actually awarded two TIPA World Awards. And I cannot but underline how very proud we are of that. This is the world championship of photofinishing. This is the Technical Image Press Association who is actually giving away these awards.

And I would not know of any photofinisher in the world who has over the years amassed seven of these TIPA World Awards. And clearly that we got two this year, one for CEWE and the CEWE PHOTOBOOK and one for WhiteWall and the WhiteWall master print is something that we are extremely proud about.

Those of you who have some basic interest in photofinishing and photography check out the WhiteWall website and check out the master print. This is a 4x1.8m huge, huge, huge print seamlessly printed, seamlessly printed. We actually or the folks at WhiteWall actually had a paper manufacturer specifically manufacture the paper for the master print, seamlessly printed, face mounted under a single piece of acrylic glass, under a single piece of acrylic glass.

You can look very closely at the photo, you'd see an amazing amount of detail, and you step back and you see something that, I can assure you, you haven't seen before. This is really a master print in every sense of the word and, as I said, we're extremely proud to have gotten these two TIPA World Awards in 2020.

I'd also like to remind you of our innovation fairs. We have the innovation days in February pre-corona, otherwise you wouldn't see CEWE like this in these days. And it is the strength and innovation that actually enables us to do things like the WhiteWall master print or like the new CEWE PHOTOBOOK in leather and linen covers. That was actually what we got the TIPA award for at CEWE. And it is this serious focus on innovation that actually pushes forward the entire Group every time and again.

We've highlighted before and I'd like to highlight again our omni-channel positioning at CEWE. You can see that our customers can order at home, they can order in store, they can order from their mobile phone anywhere. And we are able to deliver to them through mail-order to their homes and to the stores.

And clearly why is the order in store is actually omitted or had been omitted for some time, there was sufficient focus -- there were sufficient lines and distribution routes left for our customers to sit at home and order.

The fact that we are actually an omni-channel business is a very good source also of partnership with our trade partners because they can rely even with the stores closed on us running the photofinishing business for them. And increasingly we had pointed that out last year a few times, increasingly we see that this type of partnership is actually sought after by big retailers in Europe.

Now with that we can see that in Q1 the number of prints increased, the value per photo increased. You can see -- you can imagine -- not see but imagine the slight WhiteWall effect here and the turnover in photofinishing increased by 10.8%.

The number of CEWE PHOTOBOOKs rose by 2.2%, very much in line with what we would have expected had it not been for corona. In fact, in March we saw a [shock] freeze for about two weeks where people actually had to get accustomed to this new situation where they actually focused on anything but ordering photofinishing products.

But then when they started to think about, what am I going to do with all the time, we saw that they actually also looked at photofinishing and the CEWE PHOTOBOOK and other photofinishing products by CEWE that they started to order.

In a seasonal distribution comparison that you can see on this slide you can see that we were with EUR114.7 million turnover within what we would have expected to happen in Q1. I remind you that we will not compare against the pre-corona perspective because that obviously can't be held up in these times.

The overall development in the photofinishing business with a 10.8% increase in sales and a 10.4% increase in EBIT we feel is pretty decent. We can see the stay-at-home effect with the increasing online business and that over compensates the decrease in the POS direct print business due to the corona shutdown for the past few weeks or days in March. And we can see that the result of that is in line with what we had seen last year. That also compares to what we would have expected.

Now for retail, a retail business with closed stores is not a good business. A retail business that we have been managing down as far as the hardware sales is concerned is a strategic business. We've explained to you multiple times how we are actually utilizing these stores in Poland, in Slovakia, in the Czech Republic, in Norway to focus on the CEWE brand and increasingly focus on photofinishing. But again, that strategy is a bit difficult if the stores are mandatorily closed.

So, we have two effects that actually depressed the sales in the first quarter. One is the strategic direction that we have continued to take and that is we will not sell unprofitable hardware and the second one is the corona effect where a closed store doesn't sell that much.

So we have overall a decrease in turnover of 27.5%, but you can also see that the strategy to focus on profitable sales and our immediate measures to prevent a drain of cash and an increase of losses actually enabled us to manage this business in the first quarter at about the same EBIT as it had been the year before, in fact the years before.

I did talk about the commercial online print. We have the four brands that you are all familiar with. We have had a situation, and I feel so sorry for the team there where they had actually turned around quite nicely for the first two months of the year, where the sales and also the results of the measures were already visible by the end of February.

And all of that actually was destroyed in March by the fact, as I pointed out, that orders actually decreased, they plummeted in fact quite significantly. Since mid-March this commercial online presence affected by corona situation in a B2B environment, there is not very much more to say about that.

Division other, you can see that the turnover increased by almost 30% over last year's comparable turnover. We have a slightly lesser EBIT in that in respect. This is entirely a futalis effect. We have, as you will have seen, so far not being able to sell our futalis at the price that we would have wanted to. But the positive sales and EBIT development at futalis is actually supporting our conviction that a fair deal will come at the right point in time.

We are reaching breakeven with futalis and that actually improves our position to bring that business into strategically even better hands at some point in time whenever the time is right. Overall the Group rose turnover by 4.1%, as you can see on this slide. And the EBIT, I pointed that out.

If we look at the EBIT including futalis and without futalis and without the depreciation effects of the different purchase price allocations, that's actually the number that I like most without the depreciation of the purchase price, with the purchase price allocation depreciation effects we have EUR3 million in 2019 in the first quarter and EUR3 million in 2020 in the first quarter.

And so, with the looming corona crisis we are not completely dissatisfied with these results. In fact, we are standing solidly and we will be going through this crisis straight on and we will be -- we feel well-positioned to manage the challenges of the corona situation. And without further ado I had over to Olaf Holzkämper who will guide you into the details and intricacies of P&L and balance sheet and whatnot.

--------------------------------------------------------------------------------

Olaf Holzkämper, Cewe Stiftung & Co. KGaA - CFO, Member of The Board [3]

--------------------------------------------------------------------------------

I guide you into the cellar, yes. Thanks very much, Christian. And we are starting with the P&L as always. We have looked at the revenue already. You see the EUR5.7 million increase, 4.1% overall for the full Group. And if we look at the next item that's worth mentioning, let's look at the other operating income. It's not a lot, but it increased by EUR1.2 million.

And to me it always feels a bit like, hmmm, there's profit being made just by accident. I can tell you this is not profit by accident, not at least in the way that it's not counterbalanced. Because even more than this EUR1.2 million, slightly more is due to exchange rate gains.

And if you look down there in other operating expenses, you see the minus EUR4.4 million. And out of that pretty much the same number as it is other operating income is as an exchange-rate loss in other operating expenses. So, the EUR1.2 million you see here mainly from exchange rates is directly counterbalanced and that is down there in the expenses.

Then if we look at the next more operational lines, materials, personnel, other operating and amortization depreciation, you know the trend that we have been on for the last many years right now, which is due to the more value-added we are producing, which means we have more of photofinishing revenue and less of retail revenue.

Due to this change in our revenue structure we are increasing to share in terms of percent of revenue of the value added expenses, I want to call it, personnel, other operating and depreciation. And we are reducing the cost of materials. That has been happening for the last many years and this is the case also this year. This year just that commercial online print was not increasing in terms of revenue but decreasing, obviously, as you just learned.

But that is anyway in the middle of it [between] photofinishing and retail P&L structure. So it didn't change the trend and what you see this time is, again, cost of materials, I'm talking now percent of revenue, are clearly down from 27.6% to 25.2%, whereas personal expenses are up from 31.7% to 32.9% of revenue. Other operating expenses are up from 33.2% to 35% of revenue and also depreciation is up from 9.1% to 9.4% of revenue.

So, you see it's exactly this structural move that we have been seeing over the last many years that is also not changed completely by corona. Actually, given the decrease in retail and the increase in photofinishing, one could argue that corona also in this case, as many people claim, corona is actually pushing the development that would have happened anyway a bit further this time.

Now that is the structural change. And if we look into a bit more detail, you see in the cost of materials that the cost of materials obviously have been reduced by what we are lacking in terms of material costs here in retail and commercial online print clearly and that makes sense.

In personnel expenses and the same also in other operating expenses we are seeing the acquisition of WhiteWall there, which has been increasing the expenses to (inaudible). But also wage increases in personnel and other costs like mail-order costs, operational costs and other operating expenses have been increasing those positions. So, very natural development, no important movement here.

And talking about WhiteWall ,in many items over the next charts that you will see you will actually realize that WhiteWall is a driver of change. Other than that there is no structural changes in the charts that we have seen.

Now let's look at the balance sheet. What we've written there is -- I think the most important point to mention, we are looking at the slight increase here from EUR464 million to EUR488 million in terms of balance sheet length, and that is pretty much only driven by the WhiteWall acquisition, as you can see in the little boxes mentioned around there. So, that is the big driver of the balance sheet expansion we have seen here.

One position that we are really looking at and that's important to us is our equity ratio. Let's make sure -- especially in these interesting times, let's make sure CEWE is rock solid. And if you look at the equity ratio, last year 54.9%, this year 54.0%. And if we take out this IFRS 16 effect of right of use assets that we find in our balance sheet right now, we are up at 61.4% equity ratio, balance sheet -- CEWE balance sheet is rock solid.

That important overall takeaway, a detail that we can see here that's interesting, and it's actually corona driven, is visible in the current assets. You see the point there that the trade receivables decreased by EUR7.9 million. You mentioned corona has driven a decrease there.

Now, this effect of downward business, especially in retail and in commercial online print, is more visible in receivables, less than in payables, because the customers, our customers are acting more short-term. They have no long-term contracts with us. And so, we see the decrease there immediately which is driving the decrease of in receivables. And we have longer-term contracts with our customers. So, we will see the decrease in payables later on and we don't see it here. So that's point one there.

And point two is that our customers have a shorter payment term to us than we do have to our suppliers, that's also the reason why we've seen an immediate reaction here in payables there. So, that's interesting and we will see that effect in the next charts on and on again [amounts] of cash flow. So that is the overall balance sheet, important, nice and solid equity ratio.

If we look at the management balance sheet, i.e. we are taking out the EUR110 million net working capital we have all in all overall. We end up having also there extension of the management balance sheet from EUR360 million basically to EUR378 million. And also there if we look through the drivers in the little boxes you see the WhiteWall acquisition is actually the reason why the management balance sheet was driven up.

And here you can see, by the way, the effect of the increased -- of the decreased receivables more clearly, because you can see that the operating working capital is actually negative. Here the net working capital is just shown overall. What the driving factor is the operating working capital, and that is this time -- for the first time, as you can see, even negative down to EUR6.4 million. And that is due to the effect that we just talked through mainly on the end of receivables.

I think that's pretty much all worth mentioning here. From an overall perspective, if we look at the movements that were happening in there in a little bit more detail, next page capital employed, first part. The first segment is explaining the non-current assets, an increase by EUR22.1 million and basically it's WhiteWall that is driving up the noncurrent assets.

If we look up there, in many of the boxes you see a hint to the WhiteWall acquisition. So WhiteWall is driving up the non-current assets. That's the main takeaway here. If we look at the operating net working capital at the bottom, that is exactly the point where you see a couple of WhiteWall items again. But the most important one here is the minus EUR7.2 million in current trade receivables very exactly. And that is a decline we are seeing there, the decrease especially in retail and commercial online print.

The other items haven't changed a lot. Inventories nicely managed down, especially at (inaudible) manage down last year. And already and now again further down, so our colleagues in retail are doing a good job there of keeping a close eye on the inventory and the effect is exactly what you can see here on the chart. It makes sense.

And payables are a little bit up due to the acquisition of WhiteWall. All in all it means operating net working capital has decreased by EUR10 million. And again, a driver of that is the less operating net working capital in receivables due to corona.

And the other position -- other net working capital on the next chart, many things can be mentioned there and you see many ups and downs here that are visible. But at the end of the day it all benefits out to EUR0.9 million change in other net working capital, so no big change there. And we don't have to go through all the details there right now. But some of them we do find actually in the cash flow calculation and that is why it's worth mentioning that right here.

If we then look at net working capital overall, you remember that operating net working capital on the page before was down clearly. So, other net working capital basically no change means we are boiling down to the EUR10 million reduction in net working capital.

Overall and if we look at the capital employed we have in total, we saw the increase on noncurrent assets, EUR22 million due to WhiteWall, we just saw the increase -- the decrease in net working capital due to the corona effect, which means these two are the important changes.

And we see a little bit of cash increase here, which is basically completely driven by the reason that we had some cash in non-euro currencies and we didn't bother bringing back into euro spending time on transferring currencies there. That is the reason why cash flow was up by close to EUR6 million.

So, all in all that leads to an increase in capital employed by EUR18 million mainly due to the WhiteWall integration, that big change here that we saw on the structural charges already before.

Now EUR 18 million more in capital employed, how was that financed? And the financing you can see obviously in capital invested. Now if we look at the next chart here we do see the total increase of EUR18.3 million. There it is at the bottom again, which is helpful so the numbers are right.

Then we see that financing is happening at the top on the equity side. That's one of the big drivers in financing, so it's internal financing on equity and some other liability positions here that are happening to be more than half of the financing. And then there's a little bit of financing in terms of interest-bearing financial liabilities there, EUR7 million and what an accident.

You pretty much realized that the EUR7 million at the bottom there is nearly equal the roughly EUR6 million. We had some additional cash on the chart before. So, basically you can say that the additional increase in financial liabilities was financing the cash we have on the balance sheet in some FX positions. And the real financing of what we see as an increase through WhiteWall was happened to be financed by internal financing, which is a nice development we are seeing here.

Moving from the invested capital to free cash flow, you see basically there is no big change to the two years before. And of course there are special effects if we go back some more years, but this year there is basically a flat cash flow operating business. There is a flat effect on the outflow in investment. And there is a free cash flow as it was in the years before -- at least in the year before and the years before 2018 was just affected by the GS acquisition, otherwise it's pretty much on the same level again.

So, all that is no big change here. There is -- that box on the left hand side, there is an interesting thing in operating cash flow. We have seen the decrease in operating net working capital and one can expect to see this in the operating cash flow, obviously. So, yes, this is an increase cash flow wise by EUR7.4 million, but at the same time we saw the one chart there's many, many changes in other networking capital mainly due to [VAT made] due to other taxes and so on and so on.

Those are the positions that were taking up the cash that were delivered by operational working capital. So, at the end of the day the operating -- the cash flow from operating business happened to be pretty much on the same level than the year before. So, overall stable cash flow, slight improvement in EBITDA, it's all fine.

Moving from cash flow to ROCE, we see obviously the increase in the capital employed and we looked at that business on the average of three quarters. And there obviously the WhiteWall acquisition is also pushing up the capital employed. We see there's an average. But given the last 12-month EBIT we are in a nice position regarding ROCE.

Whatever method you use to calculate this means without restructuring or including restructuring effects be it including the right of use assets we have due to IFRS 16 or without them, we are in a good ROCE position and I quite like the number.

We mentioned at the very right bottom there, ROCE, if you take out the IFRS right of use assets and if you take out the one-off restructuring we've had in the last 12 months, then we are at a ROCE close to 19%. And so, that is pretty nice I have to say. We feel in a good position here at CEWE is creating value. And with that I'm sure that Christian and myself are happy to take any questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Winfried Becker, FMR Research.

--------------------------------------------------------------------------------

Winfried Becker, FMR Research - Analyst [2]

--------------------------------------------------------------------------------

I have a question maybe to you, Dr. Holzkämper, concerning the income tax in the P&L. As I have recognized, there is a substantial change in there. Always very difficult to analyze from an external point of view. So, I hope you can give some explanation what's behind that significant change.

And also what is the implication then for the tax rate for the year 2020? Should we expect a normal level in the range 30%-32% as in the last year? That would be very helpful. Thank you.

--------------------------------------------------------------------------------

Olaf Holzkämper, Cewe Stiftung & Co. KGaA - CFO, Member of The Board [3]

--------------------------------------------------------------------------------

Yes, sure. Thanks, Winfried, for the question. Yes, the EBIT change from the EBT line to the after-tax profit there, and the reason for that is that the EBT line, as the IFRS rules are, is without futalis in our case and the after-tax line is including the futalis effect.

And as Christian Friege was pointing out, we are not unhappy with the futalis effect, which means last year we had a negative contribution EBIT for -- or after-tax contribution from futalis, and this year we had a positive contribution from futalis and that is the reason why the results after taxes have quite improved. The driver is futalis in this case. So, that is the expectation there. And regarding your second part of the question, yes, tax should be on the normal level.

--------------------------------------------------------------------------------

Winfried Becker, FMR Research - Analyst [4]

--------------------------------------------------------------------------------

Okay. So, we could expect, in particularly in the last quarter of the fiscal year, due to a booming Christmas -- the major part of the income tax cycle? You separated quarter by quarter, which is maybe (multiple speakers) theoretically.

--------------------------------------------------------------------------------

Olaf Holzkämper, Cewe Stiftung & Co. KGaA - CFO, Member of The Board [5]

--------------------------------------------------------------------------------

Absolutely. I appreciate that you just added I guess at the end of your second last sentence, because all of us cannot do anything else but guessing at this time. I think Christian already alluded to that, that we have no clue how the travel restrictions are going to develop, how the social distancing restrictions are going to develop and so on and so on. But yes, guessing I think for all of us would be like this year could be close to always but close to and how close --?

--------------------------------------------------------------------------------

Operator [6]

--------------------------------------------------------------------------------

(Operator Instructions). We have no further questions, so I will hand over to Christian Friege.

--------------------------------------------------------------------------------

Christian Friege, Cewe Stiftung & Co. KGaA - Chairman & CEO [7]

--------------------------------------------------------------------------------

Thank you very much. As I hope we could show you, we have been able to adapt to the crisis. We feel that we are standing as solidly as possible here. We have shared with you that we are, given the ups and downs of our different divisions, very much on track. We extended that beyond March to that being an April 2020 message.

We are currently managing the restart of the business. We are focusing on that as best as we can, as you would expect us to do. And let me as a last point invite all of you -- think about sending a CEWE PHOTOBOOK to those people you love, think about making special photos of your children or grandchildren and putting them together in a CEWE PHOTOBOOK.

It is something that will put so much smiles into the ones that you are sending the CEWE PHOTOBOOK to. You can imagine that, try it out and do so and tell that to your neighbors and friends it's a very good thing to do in these times. And with that, I very much looking forward to talking to all of you again in three months' time. Have a great day.

--------------------------------------------------------------------------------

Olaf Holzkämper, Cewe Stiftung & Co. KGaA - CFO, Member of The Board [8]

--------------------------------------------------------------------------------

Thank you, bye-bye.