Means holiday season for a lot of people. It means photographic, times for a lot of people taking pictures outside. So 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 led out in in these weeks. You all know, and we will come back later to that, that financially speaking, the q two quarter obviously is not the most important quarter which we are which we are looking at.
But we are quite happy with the results because and maybe we come to the results in a nutshell. Axel here. When we look at our turnover development, it's quite strong. It's another well, it's a bit hard for us to to use this word record, but at the end of the day, it's another record group turnover driven mainly by photo finishing. We will come to that in in a little bit.
So strong. We are happy with the second quarter in in that line. Also, the EBIT, which we are looking at, is fully in line with our expectation, and that leads us to confirming our annual targets for the year end, and we will come to that also too in in terms of how how we see the distribution there. So if we come to the first half year and well, we did look together to the to the first quarter, and 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 con continuous line here of our turnover development driven again mainly by our core segment, which is photo finishing.
And you can see, yes, 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. And, again, the annual the the half year results confirm, obviously, our expectations for the full year. So looking a little bit deeper and getting into photo finishing, and you know me, of course, we can look at numbers, but there is more than numbers which drives our business. Photos driving our business. I used the summer holiday also for big jury session for our CV photo wall 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 would come to that well, this is a beautiful picture, obviously. And we did have photographers from all over the world handing in pictures from all over the world, and we had there's the number more than 650,000 photos being handed in.
And 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 that, I remember that it was about, I don't know, twelve, fourteen years ago when we started. We had well, I I would say the usual snap pics, which we could expect. Now we have really semi semi pros, also professional photographers handing in their 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.
And 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. So we we are happy with these results.
We are happy what that does for us, and, also, we do it out of the sustainability strategy which we are having here. So we donate for every picture being uploaded, and you can do the math. I think it's it's quite correct. Yeah. We do you can do the math.
We donate €10 cents for every picture uploaded here to the SOS Children Villages Worldwide, which is also nice. Hopefully, drive some photographers to hand in their pictures. So this a little bit to to to this. I I talked about sustainability. And, well, you know that we are looking at our sustainability goals despite all the talks outside.
We 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.
And one of the actions we 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, four years ago, for the first time, awarded the so called CV supplier sustainability award to the suppliers, which do the extra mile in their sustainability efforts. And we have one of the small and medium sized companies, which is the Schmidt.
It's they do the wooden frames for our canvases. So it's very important how they source it, you know, how they reforest those trees, which which are used for these wooden frames. The other one is one of our biggest suppliers, the UPM Communication Papers. So they are one of the big paper suppliers. So for us, in order also to achieve our scope three goals in terms of climate, for example, it is important to have suppliers which also work towards sustainability.
And we are quite proud, and they are quite proud. And we do a lot of projects with them. So it's one of our partnership engagement which we do here. So and, also, we can talk a lot about awards, and and we would have many to choose from. We chose the best managed companies award, so we are recognized 2025 again by this great group of Deloitte, UBS, the Frankfurt Argument, Seitung, and and BDI as one of Germany's best managed companies.
We strongly believe that we are. Yes. And it's also nice that other people recognize us as being best managed. And people inside the company are 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. So from that, I would love to come to the numbers. And, again 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 are 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 onboard with our products, and we work hard, obviously, to get them to a second order, maybe a calendar, a second CV photo book in the Christmas season, and, you know, this is a very important Christmas season.
So 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 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 CV photo book of a larger size with a different paper type and and some add ons. So this is what we call premiumization.
So both effects are there. The premiumization effect being a bit stronger because and we maybe I 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 overexaggerated their price increases. We were quite modest, I would say. Price acceptance by consumers is good, and we don't wanna overexaggerate that.
We are a premium brand. Consumers accept our price strategy here, but we don't wanna overexaggerate that. And this leads to an EBIT, which is better than the EBIT in in the previous year. It would have been even better if we would not have had the new tariff agreement with onetime effects here. We also have a little bit more of personal cost.
We did invest also into the brand. We did invest into into new customer acquisition, which is important, and we feel that we have we are little bit on the run here. And if we have the opportunity to to acquire these new customers, we better do it now, and and we accept a little bit higher expenses on the marketing side, which are in line compared to the turnover. So so nothing to worry about. And, obviously, yes, IT license fee, this is something I would say, well, we have these companies, you know, maybe Salesforce, maybe SAP, maybe 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. So good development in photo finishing, strongly in turnover, good in EBIT, I would say. And 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. So this is a little bit and and 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 q three traditionally years ago when you started, probably was the strongest quarter, and now it's the fourth quarter.
But still, it's important that we deliver, and we did deliver in the first quarter. We did deliver in the second quarter, and we have no signs that we will not deliver in the q three and q four. And, also, what we see here, looking a little bit at the market, and, Olaf, you as the subscriber to the Handelsplatz looked at the two e figures this morning, and they were very strong about their travel their travel numbers. And, you know, the travel is a big driver for our consumers to order photo products. And we 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 US. That was also mentioned in the the article here. But, you know, Germans, I think they were called once the travel world champions.
They so they love to travel, and that's important. Other European countries travel a lot. So this is something which drives our business. And if somebody like Tuohy communicates strong figures for travel development, this is something which leads us to a clear expectation that we will look also at strong q three and q four figures. So, yeah, this is the EBIT development, and and here you see we are 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 Actually, we are a little bit above our expectation on the turnover development. We have to say that. So quite strongly. Okay.
This is something I did comment already in. So 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 CV photo products. So in a CV photo book on a mark maybe and and all of that.
So we have volume development, which is quite nicely. We did increase the volume per photo. Premiumization is the big topic here, and this results in the nice turnover growth, which I commented on. And the same is true for the for the whole first year. And this is something which which which makes us proud, especially when we look at the CV photo book in in a minute.
I think that's the next slide. Yeah. Here you see it hasn't been always that easy in the past, and now we are looking at volume development. We are looking also at good turnover development, which is a lit little bit stronger premiumization again, which is a little bit stronger than the volume development. But it is good that we increased the volume, that we increased the number of customers that we increased the number of customers.
We had a little visitor here, so no worries that we increased the number of customers ordering CV photo books. Again, these are the customers in our CRM activities for the Christmas season, which, again, confirms our outlook for the q four where we where we believe we will have a good fourth quarter. Okay. Changing segments, coming to the commercial online print. And you probably have seen just to remember again, this is via printer, SaxoPrint, and LaserLand, the three points we're working in in, and 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 q two. We believe that we were able to increase our market share again, but still, we're not able to increase our turnover in Germany. We did invest, therefore, into international markets. And you know international markets, well, number one, it's an investment. You acquire new customers.
Also, we acquired a big customer over there quite successfully with a lower margin. So 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 logistic cost. We allocated in Dresden, our printing plants, so to send out brochures and flyers to France, which was quite strong, to the Benelux, which was quite strong, cost more. So these this turnover was more profitable than the German turnover 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. But to be honest, the the start of that was a little bit bumpy.
I think that's fair to say. So, you know, if you switch things maybe in the first couple of months, it doesn't run that well. So we expect, especially for the next year, it will really help us a lot in our cost position. It will help us a lot to gain customers more efficiently, but we are a little bit in the ramping up phase over here. And so this all results into an EBIT development, which we are not quite happy with.
So you see that we lost about 1,500,000.0 compared to last year in here in our commercial online print. And this if we look at the first six months, and you remember in the in the first quarter, we were approximately in line turnover wise and EBIT wise with the year before. So what we've seen here in the second quarter basically influences a lot our half year results in the commercial online print. So 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, and, obviously, we have to mitigate what we see right now in the in the weak German market.
So and this brings us to our third business segment, which is retail. And retail, you know, you remember that we had a lot of retail outlets selling cameras, lenses, accessories, and all that. We have about a 100 stores mainly in Scandinavia and Central And Eastern Eastern Europe here, but we also operate ecommerce webshops. And we had a strong turnover development, which is quite rare. I would say also the numbers you're seeing here are confirming strongly our strategy.
We always told you that hardware sales are not at the core of the CV strategy because there are no margin sales. So quite nicely, yes, we did sell more cameras. There was also a little bit of special effect in in Norway because one market participant showed some weaknesses, and we made use of it. But you can also see that 10% turnover development did not result into a big EBIT uplift here. So it's nice.
We're taking it. We did improve our EBIT. We are taking it, but the story still remains the same. Hardware sales are not at the core of our strategy because they are low margin, and you can see it in the numbers. So nothing to worry about, a little bit to be happy about, not not too much because it's it's low margin there.
And we always said, well, it helps a lot. The segment helps a lot for the finishing. We are selling through these outlets a lot of the finishing 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. But, again, it will not be part of our core strategy to develop the retail segment here.
Okay. And 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 Futalis 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.
And 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 which we really have to to comment a lot at. Yep. So and this brings us to the group results again. And, well, 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 were having here.
So strong for the finishing challenges in commercial online print. The rest is quite on track, and this is true for the second quarter, which we were commenting on, but also again then for the full half year results. And the same is true here for for the EBIT. I think you don't need to to comment a lot about. This is just the summary of what you've just seen.
And this, Axel, brings us to the financial details, which Olaf will be happy to comment on.
Absolutely. Thanks, Thomas. And let's look at, as always, let's look at the p and l first. Starting from the top, I think we talked in in in breadth and in-depth about the changes in revenue, so no need to to to comment on that, but it will play an importance as we move down, obviously. In terms of other operating income, you see an increase here of 3,900,000.0, which is quite a bit.
But at the same time, if we move a little bit down, you see an increase in other operating expenses of 3.9 no. I think 4,000,000 at the same time. So those two actually counterbalance pretty much exactly, and that is due to many things that are that are happening in both of those two two points at the same time. For instance, the currency 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 is something that happened in the change in both in both elements to the same degree exactly. So they counterbalance, and the same is true for some some some some barter means we always have with 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. Now the 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. And here, now it's 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 €1,300,000, and that is obviously given the given the change in revenue we have.
Now what we always like to look at is the p and l structure, I e, looking at these big cost lines starting with the cost of materials in terms of percent of revenue, what does it actually mean? And, 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 the retail being reduced in importance and the photo finishing gaining importance led to cost of materials being reduced more and more because in photo finishing, cost of materials is not so high. A a an an item in percent of revenue because there, the cost is in our value generation in personnel and in the the elements that follow after the gross profit. And this is exactly what is now driving the fact that these two points of q two twenty four and '25 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 that Thomas was commenting on before. And that strong increase increased the importance of material because, obviously, in retail business, cost of material are the topic. And so this is why although the photo finishing 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. So that's the the story behind this first very important line we have there. Then 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, the percent of revenue, we see an increase.
And the increase in personal expenses was especially driven by the wage and wages and the salary changes we had over time. We had the new tariff agreement here in Germany, and we have a few new employees. And all these elements, are driving the personal cost up there. Part of that being preparation for Christmas as always. And in terms of other operating expenses, we talked through that already because it is counterbalanced to a large degree by the other operating income.
But, 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 and l.
And 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. And 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 and strong situation we have there. In terms of overall length of the balance sheet, you see the 45,000,000 that we are indicating there on the asset side, 45,000,000 in an 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 a strong increase in the balance sheet. But 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 19,800,000.0 increase in balance sheet that is not driven operationally if you want, but that is just our savings to make strategic moves. And if you take out this 19,800,000.0, you have an increase only of 25,200,000, 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.
Now 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 19,800,000.0 on the left part, obviously, in the middle segment of this column. Overall, the the increase of the management balance sheet was 90 or sorry.
It was 30,600,000.0 in capital employed and the capital invested. Now the 30,000,000 on the capital employed side is is dividing into two elements, if you wanna say. One is the noncurrent assets, which is which have an increase of 15,600,000. And the big driver there is at the top, the operating noncurrent 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 way and that are well equipped for the future.
That's what we keep doing. So Friedbuch, we extend the production. We are increasing the sustainability here in the old buildings of the headquarter, and we have a new lease in The UK, which is obviously given to IRS IFRS 16 is also increasing the operating noncurrent assets there. So this is the the the moves that are driving the noncurrent assets. And 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, but the the 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. So the takeaway on capital employed is half in half in half of the increase in noncurrent 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 nonoperating liabilities, but that is, like, only only interest rate driven.
And, actually, on the leasing liabilities, you do see that The UK lease extension has actually added 3,000,000 down there. It's the detail you can see, and that was on the left side. It was part of the 17,000,000 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 on how CV 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, and that was driving is is starting to drive down the cash flow from operating activities on the left hand side. And added to that is a negative effect from the operating net working capital.
And if we look through all the details, you see, yes, we have higher inventories, and that is the main driver of the the negative working capital effect there. That's the reason why we do see a decrease of 5,700,000 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 q two as a slice only.
We have invested a little bit less than the year before, but overall, throughout the year, we will invest a little bit more, as you know, according to our guidance. And this leads to the fact that there is this slight decrease in the free cash flow by 3,700,000.0. But, again, it doesn't make a difference. It's all in line with expectations. On the ROCE side, we continued very, very strong position.
The the the strong position continues here, and we see a 17.1% ROCE. And, yes, there's a lot of cash in the ROCE. If we take out the latest increase of the ROCE, the 19,800,000.0 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. So that's a strong level that we're looking at there. And that moves us to the output. Thomas, is the future is the future bright?
The future is bright as far as we can see. I look out the window. It's a bright day, so that that is important, but we also look strongly towards the end of this year. So, you know, our our famous chart here in in terms of strategy, and what you have heard today confirms again that we are fully in line with the strategy.
We always set growth, especially through digital photo finishing, and this is exactly what has happened, and this is expect exactly what we are expecting for the rest of the year. So our target, which was between $835,000,000 to €865,000,000 in revenue. We're confirming that outlook. We feel quite strong about the turnover development. And oh, this is a nice animation.
And we also confirm our EBIT target, which is between 84 and €92,000,000. And you can see, well, it will all depend on photo finishing. It will all depend on photo finishing, which is, of course, on the one hand side, a big, I would say, a big burden. Sounds so negative. So it's it's a big work for us.
We have to deliver. We always did deliver, and we feel strongly that we will deliver also in this year. So we are confirming also the EBIT target. And as you can see in the next slide, this is a nice development, steady again, and this is something, you know, we as a company and and you as part of the investment community, which accompanies us. We are the the company company which thinks in decades, think in in really steady turnover development and steady EBIT development and steady dividend development that is at the core of how we position ourselves the financial community, and this is what we wanna deliver again.
And we feel that we will deliver also this in the year 2025. And and now we we skipped our well, we skipped our volume data over there. And what 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, and we expect a lot of them to come back in the second half of the year. And we also expect to, well, have many, many happy customers to be the first time customers in the CV group.
And maybe one last sense, I didn't mention that in the 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. But right now, looking at all these different markets, we see the growth, and this also makes us confident for the rest of the year. So thank you very much for listening. Thank you very much for listening, to Olaf's last