Agfa-Gevaert publishes its first quarter 2017 results – regulated information

Press Release / Mortsel, Belgium / 9th May 2017


·         Good performance of the main growth engines, counterbalanced by lower hardcopy sales

·         Recurring EBITDA at 39 million Euro

·         Net profit of 8 million Euro

·         Further increase of the net cash position to 37 million Euro

Mortsel (Belgium), May 9, 2017 – Agfa-Gevaert today announced its first quarter 2017 results.  

“Following a strong fourth quarter in 2016, the impact of inventory adjustments in Agfa HealthCare’s hardcopy business somewhat overshadowed the good performance of its IT business. Based on good inkjet sales and an improving trend in printing plate volumes, Agfa Graphics’ top line trend improved compared to the previous quarters. For the Group, we reiterate our target of reducing the top line decline and ultimately returning to growth in the medium term. On average, recurring EBITDA should be kept around 10% of revenue in the coming years. We have initiated several top line projects, aimed at limiting the decline of our traditional businesses and at boosting the success of our growth engines,” said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.

Agfa-Gevaert Group – first quarter 2017

in million Euro Q1 2016 Q1 2017 % change
Revenue 603 588 -2.5%
Gross profit (*) 195 193 -1.0%
% of revenue 32.3% 32.8%
Recurring EBITDA (*) 48 39 -18.8%
% of revenue 8.0% 6.6%
Recurring EBIT (*) 34 26 -23.5%
% of revenue 5.6% 4.4%
Result from operating activities 30 23 -23.3%
Result for the period 10 8 -20.0%
Net cash from (used in) operating activities 39 35 -10.3%

(*) before restructuring and non-recurring items

In spite of the strong impact of inventory adjustments in Agfa HealthCare’s hardcopy business, the Agfa-Gevaert Group’s revenue decreased by only 2.5% to 588 million Euro. The main growth engines of all three business groups performed well. In the Agfa Graphics business group, the volume trend for printing plates started to improve.

 In spite of the lower top line, the Group’s gross profit remained almost stable at 193 million Euro. The gross profit margin improved to 32.8% of revenue.

 As a percentage of revenue, Selling and General Administration expenses amounted to 21.9%.

 R&D expenses amounted to 38 million Euro, or 6.5% of revenue.

 Recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) amounted to 6.6% of revenue, versus 8.0% in the first quarter of 2016. Recurring EBIT reached 4.4% of revenue, versus 5.6% in the previous year.

 Restructuring and non-recurring items resulted in an expense of 3 million Euro, versus an expense of 4 million Euro in the first quarter of 2016.

The net finance costs increased from 8 million Euro in the first quarter of 2016 to 12 million Euro.

Income tax expenses amounted to 3 million Euro, versus 12 million Euro in the previous year.

As a result of the elements mentioned above, the Agfa-Gevaert Group posted a net profit of 8 million Euro.

Financial position and cash flow

  • At the end of the first quarter of 2017, total assets were 2,438 million Euro, compared to 2,352 million Euro at the end of 2016.
  • Inventories amounted to 531 million Euro (115 days), versus 528 million Euro (106 days) in the first quarter of 2016. Trade receivables (minus deferred revenue and advanced payments from customers) amounted to 324 million Euro (50 days), versus 349 million Euro (52 days) in the first quarter of 2016, and trade payables were 260 million Euro (56 days), versus 242 million Euro (49 days).
  • The net cash position further improved to 37 million Euro, versus 18 million Euro at the end of 2016.
  • Net cash from operating activities amounted to 35 million Euro.

Agfa Graphics – first quarter 2017

in million Euro Q1 2016 Q1 2017 % change
Revenue 307 300 -2.3%
Recurring EBITDA (*) 24.7 19.9 -19.4%
% of revenue 8.0% 6.6%
Recurring EBIT (*) 18.0 13.7 -23.9%
% of revenue 5.9% 4.6%

(*) before restructuring and non-recurring items

Agfa Graphics’ top line trend improved considerably compared to the previous quarters. The inkjet segment posted solid revenue growth. The wide-format equipment product range performed well. In addition to banners and other wide-format applications, customers are increasingly using Agfa Graphics’ inkjet equipment for industrial applications, such as decoration, flooring, etc. Ink volumes also increased substantially. In the prepress segment, the volume trend for printing plates started to improve, mainly driven by the sustainable chemistry-free solutions.

Due to structural efficiency measures, Agfa Graphics’ gross profit margin improved from 29.0% of revenue in last year’s first quarter to 30.0%. Recurring EBITDA amounted to 19.9 million Euro (6.6% of revenue), versus 24.7 million Euro (8.0% of revenue) in last year’s first quarter and recurring EBIT reached 13.7 million Euro (4.6% of revenue), versus 18.0 million Euro (5.9% of revenue).

In the field of inkjet, Agfa Graphics launched Jeti Ceres RTR3200 LED, its dedicated roll-to-roll printer with UV LED curing. The printer combines high production speeds with industry-leading image quality and low ink consumption. Right after the launch, one of the first Jeti Ceres printers was sold to Nuevo Grupo Visual in Mexico.

Agfa Graphics also introduced Asanti 3.0, the latest version of its automated production hub and workflow tool for sign & display printers. The new version offers its users new functionalities, more integration possibilities and added automation.

Various important ink contracts were signed in Europe, as well as in China.

In the field of prepress, an extensive, multi-year contract was signed with Newsprinters, the newspaper arm of News UK. Agfa Graphics will provide three print plants of the group with new Computer-to-Plate equipment and an expanded Arkitex workflow system, including cloud based tools. The contract also includes the supply of N95-VCF chemistry-free printing plates.

Other eye-catching prepress contracts were signed with – among other companies: D.C. Thomson, Newbury Weekly News (both in the UK); Cipola, Grupo Jauense (both in Brazil); Diario de Cd. Juarez, Metro Comunicaciones (both in Mexico); Cia Graphic (France).    

Agfa HealthCare – first quarter 2017

in million Euro Q1 2016 Q1 2017 % change
Revenue 254 239 -5.9%
Recurring EBITDA (*) 22.5 16.3 -27.6%
% of revenue 8.9% 6.8%
Recurring EBIT (*) 16.1 10.1 -37.3%
% of revenue 6.3% 4.2%

(*) before restructuring and non-recurring items

Agfa HealthCare’s top line decrease was mainly attributable to the Imaging segment’s hardcopy and classic X-ray products. After a strong fourth quarter in 2016, the hardcopy business was impacted by inventory adjustments at the distributors’ level in the emerging markets in general and China in particular. The IT segment continued to post revenue growth, mainly due to the strong performance of the HealthCare Information Solutions range. In the field of Imaging IT Solutions, the order book for the Enterprise Imaging platform continued to grow steadily, thus ensuring future revenue growth.

The business group’s gross profit margin remained almost stable at 38.1% of revenue. Recurring EBITDA amounted to 16.3 million Euro (6.8% of revenue), versus 22.5 million Euro (8.9% of revenue) in the first quarter of 2016. Recurring EBIT reached 10.1 million Euro (4.2% of revenue), versus 16.1 million Euro (6.3% of revenue) in last year’s first quarter.

In the field of Imaging, Agfa HealthCare successfully introduced its new multi-purpose DR 800 X-ray room in the European market at the ECR 2017 event. The new X-ray room covers radiography, fluoroscopy and advanced clinical applications.

In the field of Imaging IT Solutions, the KLAS research firm honored Agfa HealthCare’s XERO Viewer with a Category Leader Award in the Universal Image Viewer category. According to a recent KLAS report, Agfa HealthCare is one of two vendors offering universal viewers that are fast and reliable, and noted for continually improving their solutions. In another report, KLAS said that Agfa HealthCare customers are increasingly satisfied with the company’s Enterprise Imaging platform.

In March, Agfa HealthCare announced the release of a new version of its Enterprise Imaging for Cardiology platform at the American College of Cardiologists’ ACC.17 expo. Customer-driven enhancements include new structured reporting modules for congenital echocardiology and nuclear cardiology. Enterprise Imaging for Cardiology is an important part of the Enterprise Imaging platform.

In the first quarter, Agfa HealthCare’s comprehensive Enterprise Imaging platform continued to convince care organizations around the world. The Greenville Health System, for instance, will implement the platform to seamlessly connect its facilities across the Upstate of South Carolina (USA). In the UK, Agfa HealthCare signed a new agreement with the Ipswich Hospital NHS Trust to transition to the integrated Enterprise Imaging for Radiology platform, helping the Trust to achieve its clinical and integration goals.

In the field of integrated care, Agfa HealthCare’s health management platform has been selected to support the joint Radiotherapy Treatment Project of the Saolta University Health Care Group and Altnagelvin Hospital, part of Western Health and Social Care Trust. This cross-border project will enable patients from County Donegal (Republic of Ireland) to access radiotherapy services at the nearby Altnagelvin Hospital in Derry (Northern Ireland).

In HealthCare Information Solutions, Agfa HealthCare announced that only three years after the signing of the contract, 16 hospitals of the German Asklepios Kliniken Verwaltungsgesellschaft mbH have made the transition to the business group’s ORBIS Hospital Information System. In total 42 Asklepios hospitals are now using ORBIS.

Agfa HealthCare also confirmed its leading position in the German speaking countries of Europe by signing several new ORBIS contracts. SRH Kliniken, for instance, will install ORBIS in its three new hospital sites in Sigmaringen, Pfullingen and Bad Saulgau.

Agfa Specialty Products – first quarter 2017

in million Euro Q1 2016 Q1 2017 % change
Revenue 42 49 16.7%
Recurring EBITDA (*) 2.0 3.5 75.0%
% of revenue 4.8% 7.1%
Recurring EBIT (*) 1.1 2.6 136.4%
% of revenue 2.6% 5.3%

(*) before restructuring and non-recurring items

Agfa Specialty Products’ revenue increased to 49 million Euro. Both the future-oriented businesses (mainly Security, Synaps Synthetic Paper and Orgacon Electronic Materials), as well as a number of classic film product ranges performed well.

The business group’s recurring EBITDA reached 3.5 million Euro (7.1% of revenue). Recurring EBIT improved to 2.6 million Euro (5.3% of revenue).

End of message

Management Certification of Financial Statements and Quarterly Report

This statement is made in order to comply with new European transparency regulation enforced by the Belgian Royal Decree of 14 November 2007 and in effect as of 2008.

“The Board of Directors and the Executive Committee of Agfa-Gevaert NV, represented by Mr. Julien De Wilde, Chairman of the Board of Directors, Mr. Christian Reinaudo, President and CEO, and Mr. Kris Hoornaert, CFO, jointly certify that, to the best of their knowledge, the consolidated financial statements included in the report and based on the relevant accounting standards, fairly present in all material respects the financial condition and results of Agfa-Gevaert NV, including its consolidated subsidiaries. Based on our knowledge, the report includes all information that is required to be included in such document and does not omit to state all necessary material facts.”

Statement of risk

This statement is made in order to comply with new European transparency regulation enforced by the Belgian Royal Decree of 14 November 2007 and in effect as of 2008.
“As with any company, Agfa is continually confronted with – but not exclusively – a number of market and competition risks or more specific risks related to the cost of raw materials, product liability, environmental matters, proprietary technology or litigation.”
Key risk management data is provided in the annual report available on www.agfa.com.

Click here for Agfa’s consolidated statements.

Contact:

Viviane Dictus
Director Corporate Communication
Septestraat 27
2640 Mortsel – Belgium
T +32 (0) 3 444 71 24
E viviane.dictus@agfa.com

Johan Jacobs
Corporate Press Relations Manager
T +32 (0)3/444 80 15
E johan.jacobs@agfa.com

The full press release and financial information is also available on the company’s website: www.agfa.com

2017-05-09T07:52:16+00:00