Agfa-Gevaert publishes its first quarter 2018 results – regulated information

Press Release / Mortsel, Belgium / 8th May 2018


·         Top line decline limited to 1.3%, excluding strong currency effects

·         Strong performance of Agfa HealthCare and Agfa Specialty Products

·         Recurring EBITDA at 37 million Euro

·         Net result at 7 million Euro, in line with the first quarter of 2017

·         Net financial debt at 19 million Euro

Mortsel (Belgium), May 8, 2018 – Agfa-Gevaert today announced its first quarter 2018 results.  

“Our first quarter results are in line with our expectations. As anticipated, strong currency effects and the decision to rationalize Agfa Graphics’ prepress portfolio weighed on our top line. These elements somewhat overshadowed the good performances of the Agfa HealthCare and Agfa Specialty Products business groups. We still do not expect our full year recurring EBITDA margin to be above the margin reached in 2017. However, we stick to our ambition to target a recurring EBITDA margin of around 10% of revenue on average in the years to come,” said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.

Agfa-Gevaert Group – first quarter 2018

in million Euro Q1 2017 Q1 2018 % change
Revenue 588 549 -6.7%
Gross profit (*) 193 178 -7.5%
% of revenue 32.7% 32.4%
Recurring EBITDA (*) 39 37 -3.5%
% of revenue 6.6% 6.8%
Recurring EBIT (*) 26 24 -5.3%
% of revenue 4.3% 4.4%
Result from operating activities 23 20 -14.4%
Result for the period 8 7
Net cash from (used in) operating activities 38 7

(*) before restructuring and non-recurring items

The strength of the Euro versus other currencies had a strong impact on the Agfa-Gevaert Group’s top line. Excluding these currency effects, the revenue decline was limited to 1.3%. The Agfa HealthCare and Agfa Specialty Products business groups performed well. Agfa HealthCare’s hardcopy film business reported improved sales volumes following the reorganization of the Chinese distribution channels in 2017. The Agfa Graphics business group’s top line was impacted by the previously announced product portfolio reorganization in prepress and by the market-driven decline for analog computer-to-film products.

The Group’s gross profit margin remained almost stable at 32.4% of revenue.

As a percentage of revenue, Selling and General Administration expenses stay well under control at 21.9% of revenue.

R&D expenses amounted to 37 million Euro, or 6.8% of revenue.

Recurring EBITDA reached 6.8% of revenue, versus 6.6% in the first quarter of 2017. Recurring EBIT reached 4.4% of revenue.

Restructuring and non-recurring items resulted in an expense of 4 million Euro.

The net finance costs decreased from 12 million Euro in the first quarter of 2017 to 10 million Euro.

Income tax expenses amounted to 3 million Euro, the same amount as in the previous year.

As a result of the elements mentioned above, the Agfa-Gevaert Group posted a net profit of 7 million Euro.

Financial position and cash flow

  • At the end of the first quarter of 2018, total assets were 2,270 million Euro, compared to 2,233 million Euro at the end of 2017.
  • Trade working capital moved from 644 million Euro (26.4% of sales) at the end of 2017 to 635 million Euro (26.4% of sales) at the end of the first quarter of 2018.
  • Net financial debt amounted to 19 million Euro, versus 18 million Euro at the end of 2017.
  • Net cash from operating activities amounted to 7 million Euro.

Agfa Graphics – first quarter 2018

in million Euro  Q1 2017 Q1 2018 % change
Revenue 300 259 -13.7%
Recurring EBITDA (*) 19.9 8.2 -58.6%
% of revenue 6.6% 3.2%
Recurring EBIT (*) 13.7 2.3 -82.9%
% of revenue 4.6% 0.9%

(*) before restructuring and non-recurring items

Excluding the effects of the strength of the Euro and of the decision to discontinue certain prepress-related reseller activities in the United States, Agfa Graphics’ top line decreased by 5.4%. The prepress segment’s top line was impacted by the strong market-driven decline for analog computer-to-film products. For the digital computer-to-plate product offerings, the pressure on price and volume remains but is somewhat easing. The sustainable chemistry-free solutions continued to perform well. Volumes in the inkjet segment grew slightly compared to the strong first quarter of 2017.

Mainly due to product and regional mix effects, Agfa Graphics’ gross profit margin decreased from 29.9% of revenue in the first quarter of 2017 to 27.0%. Recurring EBITDA amounted to 8.2 million Euro (3.2% of revenue), versus 19.9 million Euro (6.6% of revenue) in the first quarter of 2017 and recurring EBIT reached 2.3 million Euro (0.9% of revenue), versus 13.7 million Euro (4.6% of revenue).

In the field of inkjet, Agfa Graphics introduced a new member to its family of wide-format hybrid Anapurna LED print engines. The 1.65m-wide Anapurna H1650i LED is an accessible and cost-effective production tool that combines the latest LED technology with high print quality.

Northern Flags, one of the UK’s largest fabric printers invested in an Avinci DX3200 soft signage print engine, an Anapurna H3200 LED wide-format print engine and Asanti workflow software for their new facility in Leeds. The Japanese King Graphics company decided to strengthen its business with a Jeti Ceres RTR3200 LED print engine. Other important inkjet contracts were signed with – among other companies – Fukuhan (Japan); Kraftex A/S (Norway); Publidecor (France); Magnate Ventures (Kenya); Inpress and Prodem (both in Belgium); TVE, Probosign, Van As and Van Marle (all in the Netherlands).

In March, Agfa Graphics and Siegwerk Druckfarben AG & Co.KGaA, one of the leading international suppliers of printing inks for packaging applications and labels, entered into an important strategic alliance for digital packaging inks.

In the field of prepress, Agfa Graphics launched Adamas, an ecological printing plate that empowers commercial printers to deliver high-quality results with less waste.

Eye-catching prepress agreements were signed with – among other organizations – Print Leeds (UK); ArtLaser&Pallotti (Brazil); Dry Boonen and Kliemo (both in Belgium); as well as several commercial print companies in Mexico.

For the security printing market, Agfa Graphics introduced Fortuna 11, the latest update of its design and assembly software for high-security printing. Fortuna 11 provides a way to effectively protect checks, lottery tickets, driver’s licenses, ID cards, passports and other documents against counterfeiting.

Agfa HealthCare – first quarter 2018

in million Euro Q1 2017 Q1 2018 % change
Revenue 239 239 -0.1%
Recurring EBITDA (*) 16.3 23.2 42.1%
% of revenue 6.8% 9.7%
Recurring EBIT (*) 10.1 16.8 66.8%
% of revenue 4.2% 7.0%

(*) before restructuring and non-recurring items

Excluding currency effects, Agfa HealthCare realized a 4.7% top line growth based on the strong performances of the growth engines and the improved hardcopy volumes in China. The business group’s Direct Radiography growth engine posted double-digit revenue growth (excluding currency effects). The HealthCare Information Solutions range reported continuous top line and order book growth. The Imaging IT Solutions performed well, based on the success of the Enterprise Imaging platform.

Agfa HealthCare’s gross profit margin improved from 37.9% of revenue in the first quarter of 2017 to 39.1%, partly due the improved hardcopy volumes and the go-live of certain larger IT projects. Recurring EBITDA increased from 16.3 million Euro (6.8% of revenue) in the first quarter of 2017 to 23.2 million Euro (9.7% of revenue). Recurring EBIT reached 16.8 million Euro (7.0% of revenue), versus 10.1 million Euro (4.2% of revenue) in the previous year.

In the field of Imaging, Agfa HealthCare is implementing 80 Direct Radiography upgrades at 18 sites of Florida Hospital (part of Adventist Health System). The Dutch hospital group Santiz will implement Agfa HealthCare’s dose management solution at the Streekziekenhuis Koningin Beatrix and Slingeland hospital sites. The software will support Santiz to comply with the European directives to protect patients against the risks of the exposure to ionizing radiation.

In the field of Imaging IT Solutions, Agfa HealthCare signed a group purchasing agreement with Premier Inc. (USA). The agreement allows the Premier members (3,900 hospitals and 150,000 other care sites) to take advantage of pricing and terms pre-negotiated by Premier for Agfa HealthCare’s Enterprise Imaging IT solutions. In the Netherlands, Amsterdam based OLVG hospital chose Agfa HealthCare for the implementation of a single-vendor Enterprise Imaging platform. In the UK, West Suffolk NHS Foundation Trust will implement Agfa HealthCare’s Enterprise Imaging for Radiology platform.

In HealthCare Information Solutions, the Derby Teaching Hospitals NHS Foundation Trust went live with Agfa HealthCare’s ORBIS ICU-Manager critical care information system. It is the first go-live in the UK for ORBIS, which is one of the most widely installed electronic patient record and clinical software solutions in Europe.

In the field of Integrated Care (IC), Agfa HealthCare signed a Memorandum of Understanding with the Dubai Health Authority (DHA). The DHA will validate Agfa HealthCare’s Augmented Intelligence algorithm for chest X-rays, making it possible to use it for fast image analysis and automated reporting in its medical fitness centers. Every year over 2 million expats visit these centers for a medical fitness test.

Also in IC, Agfa HealthCare acquired the French e-health software solution specialist Inovelan, which will enhance and extend Agfa HealthCare’s own integrated care portfolio.

Agfa Specialty Products – first quarter 2018

in million Euro Q1 2017 Q1 2018 % change
Revenue 49 51 4.1%
Recurring EBITDA (*) 3.5 6.7 93.0%
% of revenue 7.1% 13.1%
Recurring EBIT (*) 2.6 5.7 115.8%
% of revenue 5.4% 11.2%

(*) before restructuring and non-recurring items

Agfa Specialty Products’ top line grew by 4.1% to 51 million Euro. Particularly strong sales figures were reported by the Printed Circuit Board business, Synaps Synthetic Paper and the Specialty Chemicals business (including Orgacon Electronic Materials).

The business group’s recurring EBITDA improved strongly to 6.7 million Euro (13.1% of revenue). Recurring EBIT amounted to 5.7 million Euro (11.2% of revenue).

In the first quarter, Agfa Specialty Products added a new foldable version to its portfolio of SYNAPS synthetic papers.

Furthermore, Agfa Specialty Products has appointed Ferrbatt Srl (Italy) as exclusive distributor for its innovative UNIQOAT backsheet film in the EMEA region. Since its launch in April 2017, UNIQOAT enjoys great interest from the global photovoltaic solar panel manufacturing industry.

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

2018-05-08T07:50:59+00:00