CEWE Stiftung & Co. KGaA ETR: CWC reported a stronger second quarter in its core photo-finishing business and reaffirmed its 2026 outlook, while outlining plans to expand internationally through the proposed acquisition of Kodak Moments and completing the sale of its commercial online-print operations.
CEO Thomas Mehls said the company delivered “very good figures” for the first half, with a particularly strong second quarter despite a challenging environment for e-commerce in Germany. Excluding the commercial online-print business, group revenue rose 6% year over year in the second quarter, according to CFO Sirka Hintze.
The company’s reported second-quarter EBIT was negative EUR 7.4 million, reflecting transaction-related expenses. On an operational basis, group EBIT was EUR 3 million, Hintze said. The reported figure included costs associated with the sale of the commercial online-print division and preparatory costs for the planned Kodak Moments transaction.
Photo-Finishing Growth Continues
Photo finishing remained the central growth driver. Segment revenue increased 7.5% in the second quarter, while first-half photo-finishing revenue rose 4.5%. CEWE said the results were supported by both higher sales volumes and increased product value.
Sales of photo books, the company’s core product category, increased 1.5% in volume during the second quarter, while photo-book revenue rose 3%. Hintze attributed the development in part to continuing premiumization, including new product features and more attractive higher-value offerings.
“What is driving the turnover in photo finishing is not only the number, but also the value,” Hintze said. She added that the company was pleased to see a continued increase in the value of photo books.
Photo-finishing EBIT totaled EUR 1.7 million in the second quarter, including about EUR 2 million in transaction costs related to the planned acquisition. Excluding those expenses, management said the segment’s operating result was comparable with the prior year and consistent with the business’s normal seasonal pattern.
CEWE also highlighted product and marketing initiatives, including the launch of its international CEWE Photo Award. The company said it will donate EUR 0.10 to UNICEF for the initiative. In addition, CEWE introduced a Swarovski-developed wall-art product featuring crystals applied to photo surfaces, which is set to be presented in 200 selected Swarovski stores.
Kodak Moments Transaction Targets Global Expansion
Mehls devoted much of the call to the planned purchase of Kodak Moments, the retail instant-photo business currently within Kodak Alaris. The transaction was signed in July but has not yet closed. Management expects closing within six to 12 months, subject to regulatory approvals and other closing conditions related to the carve-out of the business.
Kodak Moments operates an on-site photo-finishing model similar to CEWE’s photo stations in European retail locations. Mehls said the business generates about EUR 200 million in revenue, serves roughly 16,000 points of sale directly, and has approximately 37,000 connected photo stations. It produces around 1.5 billion prints annually, compared with about 400 million in CEWE’s on-site-finishing operations.
The business would add about 500 employees to CEWE and bring a manufacturing site in Windsor, Colorado, along with a main office in Rochester, New York. Kodak Moments has a presence with retailers and venues including CVS and Walmart in the U.S., Farmacias in Mexico, Kmart in Australia and Disneyland Paris, according to Mehls.
- Enterprise value of approximately EUR 88 million.
- Expected cash outflow of slightly more than EUR 70 million, depending on the final equity bridge.
- Approximately 400 patents related to on-site photo finishing.
- A perpetual, irrevocable license to use the Kodak Moments brand.
Management said Kodak Moments is currently profitable at a single-digit level but has not received substantial investment or added new retail partners under its prior ownership. Mehls characterized the purchase as a growth platform rather than the acquisition of a stable business.
The strategic rationale includes expanding CEWE beyond Europe into core markets such as the U.S., Canada, Mexico and Australia. The deal would also give CEWE greater vertical integration through Kodak Moments’ thermal-media manufacturing operation in Colorado, reducing the group’s dependence on Asian suppliers for the consumables used in photo stations.
“This is a growth case which we acquired,” Mehls said, while noting that the business will formally become part of CEWE only after closing.
Commercial Online Print Sale Completed
CEWE completed the sale of its commercial online-print business effective July 2 to Cimpress, allowing the group to focus more fully on photo finishing and consumer brands. The financial impact of the closing will be reflected in third-quarter results because the cash proceeds arrived after the end of the first half.
Hintze said the commercial online-print unit’s first-half EBIT was near break-even and its revenue decline was not significant despite difficult market conditions. CEWE will no longer report the business as a continuing segment after the disposal.
The company also continued reshaping its retail operations by reducing its exposure to lower-margin hardware such as expensive cameras and placing greater emphasis on higher-margin photo products, including frames and albums. While that decision reduced retail revenue, management said profitability was improving and the segment was moving toward break-even.
Cash Flow and Outlook
CEWE’s free cash flow was negative EUR 18.3 million in the first half, largely due to working-capital effects, accelerated supplier payments and inventory preparations tied to the company’s SAP S/4HANA implementation. Hintze said the company went live with the new system across its businesses and countries on the same day and described the implementation as smooth.
The company’s equity ratio rose to 71.2%, while return on capital employed stood at 16.5%.
Management reaffirmed its 2026 revenue outlook of EUR 782 million to EUR 810 million and said EBIT guidance remained unchanged. Mehls said CEWE’s core business remained on track and that the planned addition of Kodak Moments would accelerate the group’s growth profile once the transaction is completed.
About CEWE Stiftung & Co. KGaA (ETR:CWC)
CEWE Stiftung & Co KGaA operates as a photo service and online printing provider in Germany and internationally. The company operates through three segments: Photofinishing, Retail, and Commercial Online Printing. It offers photo prints, photo books, wall art, photo calendars, greeting cards, and other photo gifts. The company also provides online printing services under the SAXOPRINT, viaprinto, and LASERLINE brands; and markets photo products under the CEWE, WhiteWall, Cheerz, and DeinDesign brands, as well as business stationery products and printed advertising media services.
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