Welcome, warm welcome to everybody, to today's Q3 call, 2023 of CEWE results. As always, we are recording the presentation, and putting that online afterwards. We are not recording the Q&A session later on. We would be delighted if you could switch on your cameras, which gives us a feeling of talking to somebody, seeing the reactions, knowing where we should spend one or two more words on, or where we could skip over quickly. So thank you very much for that and for handling it that way. If I'm saying we, it's obviously Yvonne, our CEO today, and myself, Olaf Holzkämper.
With us is, as always, Axel Weber, who has been running the show in the last days and is running the DJ technically for us, and there's Marcus Opitz as well, taking care of accounting in our group. Looking at Q3, obviously, we are at an important time right now. We are approaching the famous Q4, and I reckon that is probably why so many of you have an interest in joining this call today and getting a feeling for where we are, where we stand, and what's our feeling for the future. And that is a nice question and a nice moment to hand over to Yvonne, who is with us since half a year, roughly, and now enjoying her first Christmas time at CEWE. Yvonne, how do you feel?
Very good. And you see, it's a real Christmas company. So since January. It's like, a bit like sports. Since January, we train our muscles for the final, and we are now in the middle of it. So the Christmas trees are coming out already in August in our teams. And, of course, the production is set. Everyone is there to deliver a best Christmas business. And, you know, between the numbers, we thought we can as well share with you today some Christmas feelings and emotions, because it's only six weeks to go through the course of Advent, and we brought some promising figures with us as a pre-Christmas gift, if I can tell this. So let's dive in. We will cover today the group results.
We will then go on to the corporate development of the segments, the financial details, and we will end with an outlook for 2023. Let's start with the group overview and with the turnover for Q3. In Q3, we are increasing by 5.8%, and this means we are achieving a EUR 157.8 million turnover. This growth is carried by our performance in Photo finishing and Commercial Online Print. Retail, with the photo hardware, is slightly below the previous year's level. Please note, and this is something special, for Futalis, the sales process has started. Therefore, Futalis is now excluded from the income statement in accordance with IFRS 5.
So this growth is carried by the different segments, and the revenue growth and the price increase, as well as the internal cost management, help us to manage the inflation-related cost increase. So in EBIT, we can show a slight increase now up to EUR 1.2 million, and this reaches, for us, typical Q3 level. If you look on the year to date, it's, you know, a similar picture. Group turnover increases significantly here by 8.9%, and we are now reaching EUR 453 million . This is EUR 37 million ahead of last year. So it's a big, a big number.
EUR 3.7 million.
It's the turnover.
Turnover. Sorry, I'm sorry. I'm sorry.
The turnover. EUR 37 million ahead of 2022. It's a similar picture as for the Q3. It is driven by Photo finishing as well as Commercial Online Print. The growth, the premiumization, and the price increases as well here contribute to mitigate the cost pressure. Even so, you know, we have told this, for the last time, that we have been very careful with our increases, not to price ourselves out of the market. The group, turnover, here as well, no longer includes, Futalis. On the EBIT side, we increased by EUR 3.7 million, and, with this year-to-date performance, we are now entering the Christmas quarter with a head start. This gives us the confidence to achieve our targets in 2023.
If we look to the contribution of each of the segments, we can see here, you find back the top number of the total development, the +8.9%, and here you can see that, the drive by the Commercial Online Print was +9%, the Photo finishing was +10.5%, and the Retail, slightly behind was -1.66%. This is contributed by all three. Of course, the lion's share has the Photo finishing, but as well by all the brands. Let's start with Photo finishing. On Photo finishing, I would like to start with some insights. If you look into, If we, to our. Welcome. Let's start again.
If we look into our production data, on the basis of the metadata of each of the photos, we can see where the photos have been taken geographically. The good news are, on the right-hand side, you see 2023, that, the volume of the photos and their origin were as strong as before Corona. So especially the summer holidays, where you can see with the dark blue, we're international again, and, this is good news for us, and this is coherent as well with the publications of the travel industry. And, you know, the good thing for us is that CEWE succeeds in converting these travel activities and, taking photographs into CEWE products.
This is also a promising indicator for us for Christmas, because an important share of the photos for Christmas gifts derive from summer holiday, and this gives us a good base on the Christmas start. But before we start with the business performance, let me talk a little bit about responsibility as a market leader. Here I would like to talk with you, and I would like to share with you that we are happy that we can publish the CEWE Photo Award. The final award ceremony has been taken place on the Photopia in Hamburg, and here you see all the winners together with Michel Comte in the middle, who is the head of the jury, a very well-known fashion photographer and a great person.
Some of the winners traveled far, as from Asia, South America, or from Europe, and, they were standing out with their works and made it to the top of each category. I let you discover yourself the impressive summary in our short film.
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So these were the winners of the CEWE Photo Award, and it was a great moment for each of the winners, and important as well, we could create an impact in the photo world. We have more than 500,000 photos handed in from 54,000 photographers out of 147 countries, and for each of the photo which was handed in, we contributed as well. We donated to the SOS-Kinderdorf, and we could gather over EUR 50,000 for this donation. Our responsibility is as well to support the industry, and here you see our stand on the fair of the Photopia, one of the few remaining ones and very important ones.
We were there present with WhiteWall and CEWE, but even, more beyond, with our stance, it's important to create impulses, as well as panel discussion inputs and open sessions. It's a great platform for the industry, which we think we are contributing as a market leader. Can you hold on for a moment?
Yes. We have some technical issues here to share the presentation. Just give us a minute, please. Okay, so, we need just a minute to fix this problem with the presentation. I have to reload it. You have to reload it? We could continue just by voice. Yes. Okay. You want why don't you.
Okay. Good. Responsibility is one dimension to build our success, and it's part of our sustainability approach. The overview of the most important dimensions, we have summed up in a sort of a quadrant, and what is in it? CEWE leads the industry with unique innovations, distinct brands, strong partnerships, and a united team, and this we do efficiently and in an increasingly more sustainable way. The consumer is at the heart of everything we do, and our mission is across all the Photo finishing brands to empower our customers to create their photo products at the highest quality and very emotionally. To achieve this mission, we are constantly delivering cutting-edge experience across the entire customer journey. Innovations are key to our success, and they enable us to stay ahead and remain market leader.
So we have brought a couple of things with you, for you. If we go to the, this is the overview of the quadrant, which I just talked through. So let's dive into the innovations. It's important, especially before Christmas, to have all the launches ready and live, and we have brought an overview of a couple of things. Here are some improvements and things, news on the CEWE Photo Book. In terms of sustainability, we received a TIPA Award as well on the Photopia. And we are continuing in premiumization with new templates, state-of-the-art templates and designs, as well as personalization here with the slip case. Beyond the CEWE Photo Book, let me share as well some news for our calendars and gifts. It's yeah, perfect.
It's new formats, it's upgraded quality for a sustainable material, like, on the middle of the bottom, you see the bio-based case for mobile phones. And of course, we extend our, cooperations with, other companies, to bring the personalization to a wider scale. And as well on the wall art and the cards, we do not stand still. Each edition has its purpose. The street map poster is, for us, a social media product, while the wooden wall art, is dedicated for nature lovers, and of course, each year as well. Moving on, for the products, as well, it's important, how our consumers get there. We have, completed our new CEWE app calendar editor, and you will be able to find it, out. But, the main course was here to improve a lot of things.
One of the most demanding is black and white photography, and we are happy to offer this now in ultra HD quality and resolution. For Pixum, we implemented AI-supported occasion registration. What does it mean? So if you have pictures taken in your vacation, this is detected by AI, and if you want to have clip arts, it proposes you the suitable clip arts onto it, without you know, without a lot of work. If we go further to our brand of for CEWE. CEWE enters the Christmas with new design collections and new products as well. Here, a selection of it. You see some retro Advent calendars, surprise crackers, filled with photo gifts, and the so-called Christmas Big Fat Box, which is one of our best sellers.
Here as well, next to the product, it's important to improve technology. And for CEWE, we are making steps as well to integrate videos, and here you see the example of the Christmas card, which is filled with videos, video content to complete the emotional experience for Christmas. So, some of the new things we bring in terms of products, it's very important always to increase our choice and the journey. If we look on the brands, we are now up for Christmas, so we wanted to share with you as well our Christmas campaign, and here you can find a 15-second for the CEWE brand.
Well, the tone is not there. We have still some technical issues. We have the video playing here, but without any volume. Yeah. Okay, let's move on.
Let's move on. We have brought as well. So this is the usual part where the family is enjoying emotionally the value of personalized product, and this is our DNA, and we develop this further from year to year. A different approach, you will see on Pixum. We brought as well as some advertising here, very much focused on mobile, and you will see a different language for a different customer. Let's go for that one. Good. And for CEWE, of course, we will not play the film right here, but you have an impression as well, how the Christmas campaign can look for CEWE. So let's look at the numbers.
On Photo finishing, the growth is +7.1%, and with the tailwind from the travel market, we converted well for the CEWE with higher marketing investments as well, and with a valorization of 5% due to the price increase. We thus mitigate the inflation-related cost increase as we deliver a 0.7% EBIT. If you look on the summary of the year to date, we have a similar picture for the figures. We have a very good top line growth, 9.3%, with more than EUR 300 million turnover. And what we see as well, that we can go ahead with the EBIT, is now with a 1.8%, an improvement versus last year.
Important for us is always to check how we are trending against our targets. Here we see the Photo finishing turnover, divided in the quarter, and we see the green ticks. So that means we are in each of the quarters so far, in the range of our targets, in Q1, even very much beyond. If you look on how it does it look for the EBIT side, and here as well, for the EBIT side, you have the green ticks, so that means we are within our target frame, and especially in Q1, we were very much ahead in carrying this over with us. Let's look at the quantity development. The quantity development, this is the number of prints, so it's really like the photos we are using.
The total prints is +2.3%, the value +4.7%, and here you see the price increase coming through, and this both leads to a turnover increase of 7.1%. If we look how this is placed for year to date, Q1 to Q3, you see 6.6% at the beginning, a higher number, and then you see a 2.6% in the value. And you might ask the question, where is the price increase here? Here, the price increase is not as visible as on the quarter, because we have still the impact of the corona mix. So last year there was a different mix of products, especially wall art and for instance, as well, puzzles were stronger, so more valorized products.
So this is in fact mitigated. Important is that we valorize by 2.6%, and these two effects lead to the +9.3% in Photo finishing. The most important category and the most important product is the CEWE Photo Book, and that is why we would like to share this with you as well. The photo book is in quantities, increasing by 1.8%, so it's in the range. Year to date, we are +5.3%. I think what is important here to understand as well behind is, there seems to be a potential, because the number of photo books are not yet on the level of 2019, and this is a potential.
At the same time, I can tell you, this picture looks very different in value, because here we have a turnover cost of +12% in value for the CEWE Photo Book and accumulated +16%. And this is given by the valorization of it, the price increases, but as well, we are able to use larger, the consumer or the larger formats and more premium products. So it's formats more, as we're embossing and edit values we are adding to the total product. So this is a solid, even a strong performance. So here we would conclude for the Photo finishing and dive into the Commercial Online Print. In Commercial Online Print, we have the three brands with us.
We have viaprinto, Saxoprint, Laserline, Saxoprint being the biggest of them. For the ones who don't know, it's the B2B business, taking care of flyers, cards, stationery, folders, et cetera, for industry, for industry partners, for companies. We go further, and we can have a look, how we perform here. Here in Q3, we have a +2.7%, and we are profitable with EUR 0.7 million of EBIT contribution. What is behind this number? It's in fact, the best price guarantee with very tight managed costs. We have to say that, we are here going against a trend, because this market seems to be more penalized, the B2B market, than the Photo finishing.
If we look on the year to date, on the year to date, we have an impressive +10.5%, and we are adding up now our profits to EUR 1.5 million. As we would say in, as I learned in Oldenburg, we would say we are not unsatisfied with these results in a modest way, and we are looking forward to build on this further. Retail. Retail, we have several brands and several markets contributing here. The strategic focus of Retail is to be a point where the consumer can discover and can connect with us as a CEWE Group.
And in this series, we are now tracking. It is only the hardware business, which is as well declining market, which we are making our way. So into Q3, we are -6.7% in the hardware. As said, the Photo finishing part of it is positive and is included into the Photo finishing figures. In terms of EBIT, we hold the fort, and this is as well typical for Retail, result with 0%, close to 0%.
If we look for the result of Q1 to Q3, -1.6% on the top line and -0.4% on the bottom line, with a very precise and optimized structure as well here, we are more confident for the year, of the end of the year. Mm-hmm. So let's have a look into others, which we normally go quickly. Here you see the effect of Futalis. The view in the segment, it's including Futalis. You will also find the figures excluding Futalis on the notes right, right at the bottom. So we are -2.2% and EUR -0.4 million in EBIT. And as said, the sales process is initiated now. We will come with more news once we are further.
If we look the year-to-date figures, it's +7.5%, with a EUR -2.1 million of EBIT. You might remember the impact of the write-off writing down in the Q2, and this impacted the whole year for us. So having gone through each of the segments, we can sum up, and in this summary, you will be able to see you find back the figures again, the EUR 157.8 million, the +5.8%, and the contribution of each of the segments to this result. And you see as well well the overall evolution, it's a growing line.
In the year to date, quarter one to three, again, you find the EUR 453 million with a +8.9%, and the contribution of each of the segments. For the EBIT, we see on the left-hand side, in the Q3, we see an improvement from EUR 1 million to EUR 1.2 million. So you find this number back as, and the contribution as just presented. And up to nine months, we are EUR 3.7 million ahead of the previous year on the right-hand side, and have an excellent starting position into Christmas. And with this, I would like to hand over to Olaf for the financial details.
Thank you very much, Yvonne. In the financial details, as you know, we're always starting with some more light around P&L. You've seen the revenue increase that we were looking at in Q3 by EUR 8.6 million. You've seen where it's from. If we move further down in different lines of P&L, there's no comment here on our own work capitalized, but that is a well, kind of significant increase by 0.5%, which is due to the production that has happened within Hertz, our production company, for the CEWE photo stations that we acquired a bit more than a year ago. That's why we, why we have more own work capitalized here now, which is structurally due to this being in-house now.
The first one that carries a red box here is the reduction other operating income. That is obviously counterbalancing. The other were capitalized. This reduction, other operating income, is due to lower sales in recycling materials from production, which just in timing, crashed. Sometimes it happens in this quarter, sometimes in the other, so that is just a timing thing. Whereas the cost of materials changed. The next one, that is again zero point nine million reduction, is more a structural, has more some, some structural driver behind. The driver is, yes, we do see the absolute increase in absolute numbers due to turnover increase, which makes sense.
But if you look at the relative number in terms of percentage of revenue, you do see a decrease from 28.5% to 27.5%, and this is due to the fact that we have a lower share of Commercial Online Print and Retail, and a higher share of our value added and Photo finishing area. And, you know, in Photo finishing, we have less cost of materials relatively, but we have more personnel costs and other costs in there, and this is exactly what you can see here. So there's a structural change in this line, cost of materials. That is the same trend as we have seen it in the last years. Moving on to personnel expenses.
Yes, we do have an overall increase in personnel, and because we do have this change into more value added, and we have also a slight increase in absolute terms, also leading to an increase in relative terms there into these due to this increase, due to these increases that we have seen in Q3. That is on personnel, so in relative terms, it is pretty much on the same level as before. No big change in there. Moving into other operating expenses, EUR 3 million more, and in relative terms, it is, sorry, I was already jumping to other operating expenses with my last sentence on in relative terms, because that's where the, that's, that's stable.
In absolute terms, it's an increase, and the main driver behind the other operating expense increase has been marketing costs, which is just given that we have more of a business here, that's the way things are developing. That's the main driver in there. All in all, you've seen that we are not entirely unsatisfied with the EBIT that we are looking at, and this is what we can just confirm, looking through the details of the P&L. We are moving on to the balance sheet. You can see that the increase we are seeing there is the normal development. EUR 6.7 million increase is less of an increase also in relative terms.
It's less of an increase, 1.3%, than we do see as revenue increase. So yes, we do see, just looking at the balance sheet, the capital turnover is increased, so that's fine, makes sense. You see there's no big structural change on the asset side here. If you look on the liability side, I just wanna jump on the yellow part, on equity. Yes, we are happy. We are seeing, looking back 12 months, we are seeing an increase in equity by EUR 31.9 million, and our equity ratio has increased to 63.8% right now, which is a nice, stable situation, gives us a lot of strategic leeway to make any moves that we could think of.
That should be all on balance sheet. If we move over to the management balance sheet and take out the roughly EUR 100 million that we have in terms of in terms of anything on the balance sheet that we don't have to pay interest or dividends for or whatsoever, then we see that we have a slight increase there as well, EUR 6.2 million to EUR 434.5 million capital employed. So very modest increase, given the given the revenue increase. Where, where does it come from? No big change in non-current assets, EUR 4.7 million, and there's a little box saying there, yes, it is from some investment in real estate projects for Photo finishing production. And yes, if you ask, where does this?
This is in Kozle, in Poland, and yes, we are preparing for some labor arbitrage work we are doing there, like we have done in the last years. So operationally, it makes a lot of sense to go through these steps there. That's on non-current assets. And on the net working capital down there, you see the slight reduction we are seeing there, and you can take that in other net working capital. You have mainly a tax position change in there. This is the last. I think it's the last item we are seeing on the balance sheet where we can allude back to Corona, because after Corona, we had to pay higher taxes because the profits were so high in terms of Corona times.
Then after Corona, the tax authorities realized, whoa, these tax prepayments are too high, and we had some tax refunds happening, and these happened now finally, and we are through the Corona, last Corona effects here, basically. So that is the biggest change we are seeing there in terms of other net working capital. Whereas net operating working capital in terms of the typical inventories, receivables, payables, are increasing a little bit due to the effect of business increase. So on the whole capital employed side, no big change, nothing that is of importance other than the way the business moves on. If we look at the capital investment side, we talked through the equity already.
The only thing interesting here is the long-term development, potentially of the gross financial liabilities in the management balance sheet. Here you can see short-term, long-term, nicely grouped, and you can see the, the light green part, how that evolved from 2019. That was just the quarter after the WhiteWall acquisition, I think. That's why we have a little bit more of gross financial liabilities in 2019. And if you see how this evolved nicely over time, you can see how we decrease gross financial liabilities. So structurally, on the balance sheet, we have structuring the balance sheet. Also here you can see we have room to move.
Moving from the balance sheet over to the free cash flow, you see a slight decrease by EUR 3.5 million on the operating cash flow, which is due to increases in net working capital. Yes, because we have more of a business, makes all sense. Also, what we talked through in balance sheet can be seen here in the cash flow as well. Just looking at the Q3 numbers, and also that increase is slightly reduced by the tax payments you can see at the bottom there, which we just walked through already. So slight decrease in operating business very usable given what we've seen in the business here.
In terms of investments, you can see that there is a decrease in investments by EUR 4.3 million to an investment level of EUR 11.7 million, which is just in line with what typically is happening in a Q3, as you can see in all of those four years before there. And the reason why it's less than last year is because we don't have the special acquisition item of Hertz. We briefly talked about that, which happened last year, so that didn't happen. And then we had, in terms of investments into other areas, we sold some more machines, so we have an inflow there actually.
And we have somewhat less investments into our start-up activities, where we have some VC funds happening to be close to this business, but that's nothing, really substantial that has structural importance. So all in all, free cash flow is nearly on the same level, looking on the right-hand side, EUR 3.2 million negative right now, where it was EUR 4 million last year. So that is all in line with what a Q3 typically should look like. Moving on to the ROCE structure, you can see the increase in 12-month EBIT. You can see a slight increase, very steadily, over time in the average capital employed for the four quarters, which leads to a very nice situation in terms of ROCE. So there's many things you can read from here.
One thing you can read is a very steady development of the company, which can be nicely viewed in terms of EBIT and in terms of average capital employed. And ROCE, obviously, is a nice level. I know that many of you are looking at a roughly 15% level as an important threshold for you. You can see 18.1% is obviously not too bad. CEWE is generating value. And with that, I'd like to hand over to Yvonne again for the outlook.
Thank you very much, Olaf. For the outlook, I would like to start with an overview of how we construct the year. Our target range is EUR 70 million-EUR 82 million EBIT to be delivered. Year to date, you see the contribution of each of the quarters, and the total contribution is EUR 2.2 million at once. If we, y ou know, what does it mean for Q4? Let's have a look on the next one. That means, if we compare the on the left-hand side, the Q4, we are starting with EUR +0.8 million, versus the last year, we started EUR -1.4 million into the fourth quarter. So achieving our target, we will need EUR 69 million-EUR 81 million. How realistic is this?
Historically, we managed each year to set EBIT on top, and this you see on the right-hand side, the yearly in a row, so that we managed to set on top. You know, last year it was EUR +4.9 million, and we would need EUR 4.2 million to achieve the upper end, and we could afford a decrease of EUR 7.8 million to land at the lower end of the range. So that, having that in mind, we would be confident that, you know, the year 2023 could continue the success story of CEWE and deliver as well an increase in turnover as well as in EBIT. And with this in mind, we feel well positioned. We have covered a couple of things today.
We have the large stock of images at our customer site to build on, which is a good, you know, good backpack, a positive backpack. We have the products, the innovations out, the campaigns are standing there with the investments behind. We have tuned everything to be able to delivery, to deliver in time and very short until to the Christmas season or the Christmas Eve. We are compensating the cost increases, and we have had a history, and a proven history, that we can be stable even the economy is weak. So with this, you know, we would conclude, and we hope that all of us can sit in front of the Christmas tree with their personal gifts. So I have done mine already, starting.
You know, I invite you to do yours. It's my family. Invite you to do yours. I think it will be very much appreciated by your loved ones, and it will be appreciated by us, by the CEWE group. Thank you very much, and we would be able to move on to the Q&A session.
Thank you. The recording is now stopped, and we're open for the quest.