Means holiday season for a lot of people. It means photographic times for a lot of people, taking pictures outside. This is an important season for us, very important, as you can see, because the foundation of what we are doing after the summer holidays and also on the Christmas season is being laid out in these weeks. You all know, and we will come back later to that financially speaking, the Q2 quarter obviously is not the most important quarter which we are looking at. We are quite happy with the results because. Maybe we come to the results in a nutshell, Axel here. When we look at our turnover development, it's quite strong.
It's a bit hard for us to use this word record, but at the end of the day, it's another record group turnover driven mainly by photofinishing. We will come to that in a little bit. Strong, we are happy with the second quarter in that line. The EBIT, which we are looking at, is fully in line with our expectation, that leads us to confirming our annual targets for the year-end, we will come to that also too in terms of how we see the distribution there.
If we come to the first half year, we did look together to the first quarter. This is of course the addition of the two, which means also the group turnover in the first half year is another record. It's a strong continuous line here of our turnover development, driven again mainly by our core segment, which is the photofinishing. You can see, the EBIT is a little bit below last year, but fully in line, number one, with our expectation and also with the years, looking back at this five-year history here. Again, the annual half-year results confirm obviously our expectations for the full year.
Looking a little bit deeper and getting into photofinishing, and you know me, of course we can look at numbers, but there is more than numbers which drives our business. Photos are driving our business. I used the summer holiday also for a big jury session for our CEWE Photo Award, which is our contest, and it turned out to be the largest photo contest in the world. We had, I don't know. Where's the number? More than 600,000. We will come to that. Oh, well, this is a beautiful picture obviously. We did have photographers from all over the world handing in pictures from all over the world. We had, there's the number, more than 650,000 photos being handed in.
We are quite proud to be this, you know, Northern Germany headquartered photo company, very strong in Europe, as you know, active in many, many European countries, but that we managed to gather together this world's largest photo competition with a high quality, which is also important. When we started then, I remember that it was about, I don't know, 12, 14 years ago when we started. We had, well, I would say the usual, snap pics, which we could expect. Now we have really semi-pros, also professional photographers handing in their pictures, and we strongly believe that this is something which helps the brand. We had extraordinary also, brand recognition results just a couple of weeks ago, which helps the brand a lot.
It's also something where we would say position us as the expert in photography. That's a great picture. I love that one actually. I really love that picture. We are happy with these results. We are happy what that does for us. We do it out of the sustainability strategy which we are having here. We donate for every picture being uploaded, and you can do the math. I think it's quite correct, yeah. You can do the math. We donate EUR 0.10 for every picture uploaded here to the SOS Children's Villages worldwide, which is also nice, and hopefully drive some photographers to hand in their pictures. This a little bit to this.
I talked about sustainability and, well, you know that we are looking at our sustainability goals. Despite all the talks outside, we always believed in sustainability. It's part of our DNA. We started that even way before the word sustainability was widely used, and we still continue despite whatever is happening across the Atlantic there. We are still driving that. We believe that we have to do something to protect our resources environmentally. One of the actions, we take ourselves many actions, but it's not only us. You know that we buy a lot of products, mainly paper, but also other products from suppliers. We can only become more sustainable if we work together with our suppliers.
This is why we, I think four years ago, for the first time, awarded the so-called CEWE Supplier Sustainability Award to the suppliers which do the extra mile in their sustainability efforts. We have one of the small and medium sized companies, which is the Schmidt GmbH. It's, they do the wooden frames for our canvases. It's very important how they source it, you know, how they reforest those trees which are used for these wooden frames. The other one is one of our biggest suppliers, the UPM Communication Papers. They are one of the big paper suppliers. For us, in order also to achieve our Scope 3 goals in terms of climate, for example, it is important to have suppliers which also work towards sustainability.
We are quite proud, and they are quite proud, and we do a lot of projects with them. It's one of our partnership engagement which we do here. We can talk a lot about awards and we would have many to choose from, but we chose the Best Managed Companies award. We are recognized 2025 again by this great group of Deloitte, UBS, the Frankfurter Allgemeine Zeitung, and BDI as one of Germany's best managed companies. We strongly believe that we are. Yes. It's also nice that other people recognize us as best managed. The people inside the company are proud about this. We contributed a lot. They did a lot of interviews.
We told them how we steer this company and, well, at the end it turns out that they also found that we are well-managed. From that, I would love to come to the numbers. Again, the numbers are quite strong. They confirm our strategy. They confirm the strategy for the finishing at the core of our business. Also working with as premium brands with a multiple of premium brands, and I will come to that one.
We, we have good turnover development, but we also have good volume development, and we also have a good development of newly acquired customers, which makes us feel strong also about the fourth quarter, because these are early signs where we say, "Okay, we acquire customers, we get customers on board with our products, and we work hard obviously to get them to a second order, maybe a calendar, a second CEWE PHOTOBOOK, in the Christmas season." You know, this is a very important Christmas season. As it said here, we have a volume growth, we will come to that in a, in a minute, of 3%.
The turnover per photo also rose, and you know that we're always talking about two effects here, price on the one hand side and also our premiumization approach so that we at the end of the day deliver higher value products. It might be a CEWE PHOTOBOOK of a larger size with a different paper type and some add-ons. This is what we call premiumization. Both effects are there. The premiumization effect being a bit stronger. We, maybe I talk about that a little bit later, because we believe that the ability to increase prices at this very moment is a bit restricted. You can follow that with a lot of FMCG companies who probably over-exaggerated their price increases. We were quite modest, I would say.
Price acceptance by consumers is good. We don't want to over-exaggerate that. We are a premium brand. Consumers accept our price strategy here. We don't want to over-exaggerate that. This leads to an EBIT which is better than the EBIT in the previous year. It would have been even better if we would not have had the new tariff agreement with one-time effects here. We also have a little bit more of personal costs. We did invest also into the brand. We did invest into new customer acquisition, which is important, and we feel that we have.
We are a little bit on a run here. If we have the opportunity to acquire these new customers, we better do it now. We accept a little bit higher expenses on the marketing side, which are in line compared to the turnover. So nothing to worry about. Obviously, yes, IT license fee, this is something I would say well, we have these companies, you know, may it be Salesforce, may it be SAP, may it be Zendesk, you know, all these big American companies, and they also work on their prices, so we had to accept a little bit more of IT license fees than the previous year. Good development in photofinishing, strongly in turnover, good in EBIT, I would say.
This leads me to the first half of the year. I don't wanna dig too deep into that. It's the addition of the first quarter, which we have commented together. Everything again in line with our expectation, and also same story, strong turnover and EBIT fully in line of what we did expect and what enables us to confirm our targets for the full year. This is a little bit. Here you see what I meant. The second quarter is important. Business-wise, it's important because we prepare a lot for Christmas, but turnover-wise, it, well, at the end of the day, developed into the rather weakest quarter here. You know that the Q3 traditionally, years ago when you Yeah probably was the strongest quarter, and Yes it's the fourth quarter.
Still it's important that we deliver, we did deliver in the first quarter, we did deliver in the second quarter, we have no signs that we will not deliver in the Q3 and Q4. Also what we see here, looking a little bit at the market, all of you as the subscriber to the Handelsblatt looked at the TUI figures this morning, and they were very strong about their travel, their travel numbers. You know that travel is a big driver for our consumers to order photo products. I personally, whatever we hear from other companies, is traveling is strong. Yes, it did shift a little bit. It did shift away from the U.S. That was also mentioned in the article here.
You know, Germans, I think they were called once the travel world champions. They love to travel, and that's important. Other European countries travel a lot. This is something which drives our business, and if somebody like TUI communicates strong figures for travel development, this is something which leads us to a clear expectation that we will look also at strong Q3 and Q4 figures. This is the EBIT development. Here you see we're fully in line with the previous years and also fully in line with our expectations. Actually, did I say for the turnover in line with our expectation? Actually, we are a little bit above our expectation on the turnover development. We have to say that, quite strong. Okay. This is something I did comment already in. We have a volume growth.
You know, these are not the prints actually we do as a single print. This is the number of photos in our different CEWE photo product. In a CEWE PHOTOBOOK on a mug maybe and all of that. We have volume development, which is quite nicely. We did increase the value per photo. Premiumization is the big topic here, and this results in the nice turnover growth, which I commented on. The same is true for the whole first year. This is something which makes us proud, especially when we look at the CEWE PHOTOBOOK in a minute. I think that's the next slide. Yeah. Here you see, it hasn't been always that easy in the past.
Now we are looking at volume development. We are looking also at good turnover development, which is a little bit stronger, premiumization again, which is a little bit stronger than the volume development. It is good that we increase the volume, that we increase the number of customers, as we increase the number of customers. We had a little visitor here, no worries. That we increased the number of customers ordering CEWE PHOTOBOOKs. Again, these are the customers in our CRM activities for the Christmas season, which again confirms our outlook for the Q4, where we believe we will have a good fourth quarter. Okay. Changing segments, coming to the commercial online print. You probably have seen, just to remember again, this is viaprinto, SAXOPRINT and LASERLINE, the three prints we're working in.
That's a segment where our numbers were not that strong. We did have a turnover decline over there due to the fact that the German market, especially the German market, was very weak in Q2. We believe that we were able to increase our market share again. Still, we're not able to increase our turnover in Germany. We did invest therefore into international markets. You know international markets, well, number one, it's an investment. You acquire new customers. Also acquired a big customer over there quite successfully with a lower margin. This is something which did not help at all over there. Also, the international customers which we did acquire, they need a little bit more of a logistic cost. We are located in Dresden, our printing plant.
To send out brochures and flyers to France, which was quite strong, to the Benelux, which was quite strong, cost more. This turnover was less profitable than the German turnover, which we did not achieve. In parallel, we are in the process of investing into our processes and printing plants. We are going towards a hybrid production, which means that we add very efficient digital production capabilities into our SAXOPRINT plant. It's quite impressive actually. We feel very strong about that one. To be honest, the start of that was a little bit bumpy. I think that's fair to say. You know, if you switch things, maybe in the first couple of months, it doesn't run that well.
We expect, especially for the next year, that will really help us a lot in our cost position, that will help us a lot to gain customers more efficiently. We are a little bit in the ramping up phase over here. This all results into an EBIT development, which we are not quite happy with. You see that we lost about EUR 1.5 million compared to last year in our commercial online print. This, if we look at the first six months, and you remember in the first quarter, we were approximately in line turnover-wise and EBIT-wise with the year before. What we've seen here in the second quarter basically influences a lot our half year results in the commercial online print. This is something we're working on, definitely.
It's something where we see it as a little bit of an invest also into the future. Obviously, we have to mitigate what we see right now in the weak German market. This brings us to our third business segment, which is Retail. Retail, you know, you remember that we had a lot of retail outlets selling cameras, lenses, accessories and all of that. We have about 100 stores, mainly in Scandinavia and Central Eastern Europe here, but we also operate e-commerce webshops. We had a strong turnover development, which is quite rare. I would say also the numbers you are seeing here are confirming strongly our strategy. We always told you that hardware sales are not at the core of the CEWE strategy because they are low margin sales.
Quite nicely, yes, we did sell more cameras. There was also a little bit of a special effect in Norway because one market participant showed some weaknesses, and we made use of it. You can also see that a 10% turnover development did not result into a big EBIT uplift here. It's nice. We're taking it. We did improve our EBIT. We are taking it. The story still remains the same. Hardware sales are not at the core of our strategy because they're low margin, and you can see it in the numbers. Nothing to worry about. A little bit to be happy about, not too much because it's low margin there. We always said, well, it helps a lot. The segment helps a lot with photofinishing.
We're selling through these outlets a lot of photofinishing products. We also feel strongly that we have because the fourth quarter is so important, that we will not lose money, rather that we will make a nice EBIT into that. Again, it will not be part of our core strategy to develop the retail segment here. Okay. This brings us to the segment Other, which I don't know if it's really a segment because we don't generate any real turnover here. You know that our futales activities were consolidated here. Now we have some structural costs and also our real estate business. I don't know if that's the fair word.
Activities.
Activities, I think is a better word to that. You can see that we did generate a little bit more income here, so that we reduced the negative EBIT compared to the year before. Nothing to worry about, all nice. I think nothing which we have to comment a lot. Yeah. This brings us to the group results again. This is the summary of what we have what we have seen. You see also here a little bit the importance, let's say, the business comparisons we are having here. Strong photofinishing, challenges in commercial online print. The rest is quite on track. This is true for the second quarter, which we were commenting on, but also again then for the full half year results.
The same is true here for the EBIT. I think I don't need to comment a lot about. This is just the summary of what you've just seen. This, Axel, brings us to the financial details, which Olaf will be happy to comment on.
Absolutely. Thanks, Thomas. Let's look at, as always, let's look at the P&L first. Starting from the top, I think we talked in breadth and in depth about the changes in revenue, so no need to comment on that. It will play an importance as we move down, obviously. In terms of other operating income, you see an increase here of EUR 3.9 million, which is quite a bit. At the same time, if we move a little bit down, you see an increase in other operating expenses of EUR 3.9, I think EUR 4.0 million at the same time.
Those two actually counterbalance pretty much exactly, and that is due to many things that are happening in both of those two points at the same time. For instance, the currency, in fact, currency effects, the foreign exchange effects, the most important piece in both of them. At least on top part of them, the most important piece is something that happened in the change in both elements to the same degree exactly, so they counterbalance. The same is true for some barter deals we always have with retail partners or other partners.
We are, in this case here, we had an income from printing in other operating income because we had an invoice in other operating expenses for marketing they were doing in exchange for the printing that we were doing for them. These little things, little deals always happen. Here now, it's worth mentioning because these are the things that make those two elements actually look exactly the same, one up and the other one down. If we move on to the cost of materials, you see that we have a slight increase by EUR 1.3 million. That is obviously given the change in revenue we have. What we always like to look at is the P&L structure, i.e.
looking at these big cost lines, starting with the cost of materials, in terms of % of revenue, what does it actually mean? You know, if you have followed our company over many years, you know that the structural change in the revenue that we have seen over time, which is in particular the, retail being reduced in importance and the photofinishing gaining importance, led to cost of materials being reduced more and more, because in photofinishing, cost of materials is not so high an item in percentage of revenue because there the cost is in our value generation in personnel and in the elements that follow after the gross profit.
This is exactly what is now driving the fact that these two points of Q2 2024 and 2025 are, in terms of percent of revenue, exactly the same. We do see a 26.3% on cost of materials here, the reason is that the retail business has seen this strong increase, as Thomas was commenting on before. That strong increase increased the importance of material because obviously in retail business, cost of material are the topic. This is why although the photofinishing was nicely increased, the overall cost of materials in terms of percent of revenue just kept stable and didn't increase, didn't decrease further. That's the story behind this first very important line we have there.
If we look into personal expenses and other operating expenses, the story is similar, at least regarding the structure, because in both lines, be it in absolute terms and be it in relative terms, percentage of revenue, we see an increase. The increase in personal expenses, Was especially driven by the wage and wages and the salary changes we had over time. We had a new tariff agreement here in Germany. We have a few new employees, and all these elements obviously are driving the personal cost up there, part of that being preparation for Christmas as always. In terms of other operating expenses, we talked through that already because it is counterbalanced to a large degree by the other operating income. Nevertheless, we do a little bit more marketing as well.
These are the important elements you see already. Maybe the only thing is financial income reduced slightly due to the reduced interest rates in the market. As you know, you are experts for these kind of things. These are the details on the P&L. If we move on to the balance sheet, obviously, we love our strong balance sheet because that gives us strategic freedom to make big moves. You see that the strength of the balance sheet in terms of equity ratio has slightly increased or, let's say it's stable, 66.6% last year, 66.7% this year. Very stable balance sheet, strong situation we have there. In terms of overall length of the balance sheet, you see the EUR 45 million that we are indicating there on the asset side.
EUR 45 million in increase in the balance sheet, that would be an increase by 8.1%. Given that the revenue has increased only by 4%, that would be a strong increase in the balance sheet. As mentioned at the bottom, a lot of the increase in the balance sheet is due to the cash effect that we had. That is a EUR 19.8 million increase in balance sheet that is not driven operationally if you want, but that is just our savings to make strategic moves.
If you take out this EUR 19.8 million, you have an increase only of EUR 25.2 million, which gives you a balance sheet extension of 4.9%, which is pretty much in line with the 4% revenue increase, and that means we do see a similar change there on both sides. Having talked about the cash increase, already on the management balance sheet, the cash becomes visible and you do see on the next page. Thank you. You do see the EUR 19.8 million on the left part, obviously, in the middle segment of this column. Overall, the increase of the management balance sheet was sorry, it was EUR 30.6 million in capital employed and the capital invested.
The EUR 30 million on the capital employed side is dividing into two elements if you wanna say. One is the non-current assets, which show an increase of EUR 15.6 million. The big driver there is at the top, the operating non-current assets, which is mainly the real estate projects that we had. You know that we wanna have well invested production sites that are really able to produce our products in a sustainable way and that are well equipped for the future. That's what we keep doing. Freiburg, we extend the production. We are increasing the sustainability here in the old buildings of the headquarter. We have a new lease contract in the U.K., which is obviously given to IFRS.
IFRS 16 is also increasing the operating non-current assets there. This is the moves that are driving the non-current assets. The other element that has been driving the capital employed was the cash we looked at already, slightly reduced by the net working capital. I don't go through all the details at the bottom. The overall story is that the other net working capital has been increased mainly due to the increase of the business, the preparation for Christmas in terms of inventory and so on. The takeaway on capital employed is half of the increase in non-current assets and roughly the other half in cash. The story is even easier on the capital invested side.
The full increase, all of the increase, can be seen in the equity already. There's counterbalancing little small effects on gross financial liabilities and non-operating liabilities, but that is like only interest rate driven and. Actually, on the leasing liabilities, you do see that the U.K. lease extension has actually added EUR 3 million down there. It's the detail you can see, and that was on the left side. It was part of the EUR 17 million we had been looking at at the beginning. Now, those are the changes on the management balance sheet. No big change in terms of structure. No, no interesting things that really make a difference there regarding the judgment on, on how CEWE is moving in our eyes. Looking at the free cash flow, you do see a similar development.
Yes, we have had a little bit less in earnings, that is starting to drive down the cash flow from operating activities on the left-hand side. Added to that is a negative effect from the operating net working capital. If we look through all the details, you see, yes, we have higher inventories, and that is the main driver of the negative working capital. In fact, that's the reason why we do see a decrease of EUR 5.7 million compared to the operating cash flow we had a year ago. Nevertheless, all this is fully in line with what we expect. That's why there's nothing to be concerned about. We have invested in this Q2 as a slice only.
We have invested little bit less than the year before. Overall, throughout the year we will invest a little bit more, as you know, according to our guidance. This leads to the fact that there is this slight decrease in the free cash flow by EUR 3.7 million. Again, it doesn't make a difference. It's all in line with expectations. On the ROCE side, we continued a very strong position. The strong position continues here. We see a 17.1% ROCE. Yes, there's a lot of cash in the ROCE. If we take out the latest increase of the ROCE, the EUR 19.8 million we had been looking at before, we would even be seeing a 17.8% ROCE level here, which is a strong ROCE.
Although we are a well invested company with no backlog investing, at all. That's a strong level that we're looking at there. That moves us to the output, Thomas.
The output.
Is the future bright?
The future is bright as far as we can see. I look out of the window, it's a bright day. That is important. We also look strongly towards the end of this year. You know, our famous chart here in terms of strategy and what you have heard today confirms again that we are fully in line with the strategy. We always said growth, especially through digital photofinishing, and this is exactly what has happened, and this is exactly what we are expecting for the rest of the year. Our target, which was between EUR 835 million-EUR 865 million in revenue, we are confirming that outlook. We feel quite strong about the turnover development. Oh, this is a nice animation.
We also confirm our EBIT target, which is between EUR 84 million and EUR 92 million. You can see, it will all depend on photofinishing, which is of course on the one hand side, I would say a big burden. Sounds too negative. It's big work for us. We have to deliver. We always did deliver, and we feel strongly that we will deliver also in this year. We're confirming also the EBIT target. As you can see in the next slide, this is a nice development. Steady again.
This is something, you know, we as a company and you as a part of the investment community which accompanies us, we are the company which thinks in decades, think really steady turnover development and steady EBIT development and steady dividend development. That is at the core of how we position ourselves in the financial community. This is what we wanna deliver again. We feel that we will deliver also this in the year 2025. Now we skipped our, well, we skipped our volume data over there. What drives us there, and you all know that these are our happy customers.
We did have a lot of happy customers already in the first half of the year. We expect a lot of them to come back in the second half of the year. We also expect to, well, have many happy customers to be the first time customers in the CEWE Group. Maybe one last sentence, I didn't mention that in the turnover section. We also are quite happy that we basically grow in every single European market, which is also something. You know, normally when you're active in so many markets, there's always something in one of the markets. Right now, looking at all these different markets, we see the growth. This also makes us confident for the rest of the year. Thank you very much for listening. Thank you very much for listening, especially to Olaf.