Agfa-Gevaert publishes its second quarter 2013 results – Regulated information

Press Release / Mortsel - Belgium / 28th August 2013


Agfa-Gevaert today announced its second quarter 2013 results.
  • Group revenue impacted by the weak economic conditions and the decline of the classic film businesses
  • Gross profit margin remained stable, while product portfolio rationalization contributed to the decrease of R&D costs
  • Recurring EBIT improved to 36 million Euro
  • Positive net result due to targeted actions
  • Efforts to improve working capital contributed to strong operating cash flow

“During the second quarter, we focused on the further improvement of our working capital. These efforts helped us to improve our operating cash flow and to reduce our net debt. Furthermore, we are on track to reach the gross profit targets we have set ourselves. Finally, I am also confident that Agfa Graphics’ industrial inkjet business will reach the break-even point in the course of 2013,” said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.

Agfa-Gevaert Group – second quarter 2013
Euro millions Q2 2012 Q2 2013 % change
Revenue 779 732 -6.0%
Gross Profit (*) 226 211 -6.6%
% of revenue 29.0% 28.8%
Recurring EBITDA (*) 53 56 5.7%
% of revenue 6.8% 7.7%
Recurring EBIT (*) 32 36 12.5%
% of revenue 4.1% 4.9%
Result from operating activities 21 67 219.0%
Result for the period  2 23

(*) before restructuring and non-recurring items.

The Group’s revenue decreased by 6.0 percent due to currency effects, the adverse economic conditions and the decline of the traditional film businesses. Excluding currency effects, the decline would be limited to 4.6 percent. Agfa HealthCare’s digital radiography product portfolio performed strongly.

The Group’s second quarter and first half gross profit margin remained stable versus the corresponding periods of 2012. 

As a percentage of revenue, Selling and General Administration expenses amounted to 18.7 percent.

The Group’s efforts to improve efficiency and to rationalize its product portfolio resulted in substantially lower R&D expenses in the second quarter of 2013. 

Recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) improved from 6.8 percent of revenue to 7.7 percent, totaling 56 million Euro. Recurring EBIT grew from 32 million Euro to 36 million Euro. 

Restructuring and non-recurring items resulted in an income of 31 million Euro, versus an expense of 11 million Euro in the second quarter of 2012.
On the one hand, the Group booked the effects of the closure of the post-retirement medical plan in the
USA. On the other hand, restructuring costs were booked for the intended closure of the analog printing plate factory in
Manerbio,
Italy.

The net finance costs amounted to 21 million Euro, versus 20 million Euro in 2012. 

Tax expenses amounted to 23 million Euro.
The major part of this amount is linked to a deferred (non cash) tax expense related to the closure of the post-retirement medical plan in the
USA.

The Group was able to post a strong net result of 23 million Euro, versus a restated (according to IAS 19R) net result of 2 million Euro in the second quarter of 2012. 

Financial position and cash flow
  • At the end of the quarter, total assets were 2,752 million Euro, compared to 2,830 million Euro at the end of 2012.
  • Inventories amounted to 648 million Euro (or 108 days). Trade receivables (minus deferred revenue and advanced payments from customers) amounted to 452 million Euro (or 56 days) and trade payables were 259 million Euro, or 43 days.
  • Net financial debt amounted to 299 million Euro, versus 291 million Euro at the end of 2012.
  • Net cash from operating activities amounted to 51 million Euro. 

 

Agfa Graphics – second quarter 2013
Euro millions Q2 2012  Q2 2013  % change
Revenue 418  380  -9.1%
Recurring EBITDA (*) 21.9  21.9  0.0%
% of revenue 5.2%  5.8%
Recurring EBIT (*) 12.7  12.7  0.0%

(*) before restructuring and non-recurring items.

Agfa Graphics’ revenue decreased by 9.1 percent to 380 million Euro. Overall, the business group’s revenue was impacted by the tough economic conditions and adverse currency effects.

In the prepress segment, the digital computer-to-plate (CtP) business’ volumes were stable, whereas the analog computer-to-film (CtF) business declined strongly. 

The industrial inkjet segment’s revenue was influenced by measures to rationalize the product portfolio and by the weak investment climate, as companies are reluctant to invest in high-end equipment. The low-end Anapurna product range, on the other hand, continued to perform well. In spite of the adverse evolution of the segment’s top line, industrial inkjet is on track to reach the break-even point in the course of 2013. 

Gross profit totaled 25.5 percent of revenue, versus 25.8 percent in the second quarter of 2012 and 25.1 percent in the first quarter of 2013. Agfa Graphics’ operational improvements were offset by mix effects and competitive pressure. As a percentage of revenue, recurring EBITDA and recurring EBIT improved to 5.8 percent and 3.3 percent respectively. In absolute numbers, both recurring EBITDA and recurring EBIT remained stable.

In June, the German Court of Appeal in Düsseldorf decided in favor of Agfa Graphics in a patent law suit against Papier Union GmbH, the German dealer of the Chinese printing plate manufacturer Chengdu Xingraphics Co. Ltd. It was decided that one of Agfa Graphics’ patents (EP823327) is infringed by the sales of Xingraphics ”
FIT
” digital printing plates. The same outcome was also reached in January in the parallel proceedings before the Dutch Court of Appeal. These cases show Agfa Graphics’ firmness in protecting its know-how against infringements.

In the field of prepress, Agfa Graphics’ environment-friendly technology continued to convince commercial printers all over the world. In
Australia, for instance, Fox Print decided to start using Agfa Graphics’ Azura TS chemistry-free printing plate technology in order to further improve its environmental credentials. In
Korea, the leading Ad Core printing company ordered two Avalon N8 platesetters. The company will also use Agfa Graphics’ Azura printing plates.

In the newspaper segment of the printing industry, El Mercurio, the largest newspaper in
Chile, will start using the business group’s eco-friendly N94-VCF printing plates and ordered four Advantage platesetters and Arkitex workflow software. In
New Zealand, newspaper publisher Beacon Media Group signed a three-year printing plate contract with Agfa Graphics and ordered an Advantage N SL platesetter and additional equipment. The Spanish Graficas De Prensa Diare company ordered three Advantage NTR XXT platesetters and signed a three-year printing plate contract.

In April, Agfa Graphics launched a new version of its Fortuna security printing software. Fortuna is designed to protect banknotes, ID-cards, documents, packaging and other printing applications against counterfeiting. 

In the field of industrial inkjet, Agfa Graphics introduced its brand new Asanti automated workflow solution for the wide-format sign and display markets at the FESPA trade show in
London. Asanti allows wide-format printers to streamline their production, and to integrate automated color consistency and quality management features in their workflow.

Also at FESPA, Agfa Graphics launched new additions to its broad portfolio of industrial inkjet printers. The Anapurna M3200 RTR system is an eco-friendly print system that allows users to print onto a wide variety of flexible materials. A new member to the successful Jeti Titan range is the highly productive and versatile Jeti TitanX. In order to satisfy the growing market demand for direct printed textile output, Agfa Graphics launched its new Ardeco wide-format printer.

The Jeti Titan printer range continued to convince print houses of its many advantages. The Brazilian Zoom Imagem company, for instance, ordered two Jeti Titan systems. Crystal Clear Imaging (
New Orleans
,
Louisiana,
USA) will use Agfa Graphics’ system to create high-quality graphics and displays for leading brands and high-profile sporting events. Also in the
USA, Diesel Displays will use its new Jeti Titan to produce turn-key displays and graphics for leading retail organizations. The French Creaprod company signed the very first contract for the new Jeti TitanX system.

Agfa HealthCare – second quarter 2013
Euro millions Q2 2012  Q2 2013  % change
Revenue 300  294  -2.0%
Recurring EBITDA (*) 30.8  28.7  -6.8%
% of revenue 10.3%  9.8%
Recurring EBIT (*) 20.1  18.9  -6.0%

(*) before restructuring and non-recurring items.

Mainly due to adverse currency effects, Agfa HealthCare’s revenue decreased by 2.0 percent to 294 million Euro. Excluding currency effects, revenue remained almost stable.

In the Imaging segment, the digital radiography business (consisting of Computed Radiography, Direct Radiography and the hardcopy business) performed strongly, mainly due to the success of the DR product range. The traditional X-ray product range’s revenue dropped considerably compared to the second quarter of 2012. In last year’s second quarter, the traditional business was marked by a strong recovery following slow sales in earlier months. 

Excluding currency effects, the IT segment’s revenue remained stable. The Enterprise IT business continued its upward trend, whereas the Imaging IT business was rather soft compared to the very strong second quarter in 2012. On a year-to-date basis, Imaging IT continued to grow according to plan. Due to the well-filled order book, sales for Imaging IT are expected to pick up towards the end of the year. 

Agfa HealthCare’s gross profit margin amounted to 34.7 percent of revenue, versus 36.3 percent in the second quarter of 2012. Margins were influenced by mix effects and by investments to further improve service efficiency and to prepare the introduction of new solutions. Recurring EBITDA reached 28.7 million Euro (or 9.8 percent of revenue). Recurring EBIT amounted to 18.9 million Euro (or 6.4 percent of revenue).

In May, Agfa HealthCare established a new subsidiary in the
Kingdom
of
Saudi Arabia. By setting up the Agfa HealthCare Saudi Arabia Company Ltd., the business group will be able to enhance its support to its customers in this important region. 

In the field of digital radiography, Agfa HealthCare launched its NX MUSICA2 Platinum and NX MUSICA2 Neonatal image processing solutions for use with direct radiography (DR) technology. The solutions render excellent bone and soft tissue detail simultaneously in a single exposure. NX MUSICA2 Platinum is suitable for both adults and pediatric patients. NX MUSICA2 Neonatal is designed to meet the demanding requirements of neonatal imaging. 

The installed base for Agfa HealthCare’s innovative DR solutions continued to grow in the second quarter. In the
UK, for instance, Agfa HealthCare successfully implemented its DX-D 600 DR system at Wrightington,
Wigan
and Leigh NHS Foundation Trust. In the
USA, the business group installed six DX-D 100 mobile DR systems at the Department of Defense’s Medical Education & Training Campus for use in the basic biomedical equipment technician training curriculum. 

In Imaging IT, Agfa HealthCare released ICIS View 3.0, the medical images and results viewer for the comprehensive ICIS (Imaging Clinical Information System) enterprise imaging solution. The system allows clinicians, specialists and other stakeholders to access all patient imaging data from any Picture Archiving and Communication System (PACS), using a single viewer. The ICIS solution creates a true imaging record for every patient, containing all possible images of the patient, regardless of the hospital department and de facility that created them.

In May, Agfa HealthCare announced the signing of a new contract that makes the business group’s full suite of imaging IT solutions available to the customers of Novation, a leading healthcare supply contracting company in the
USA. Included in the contract are Agfa HealthCare’s IMPAX departmental and ICIS enterprise imaging solutions.

Among the new customers for Agfa HealthCare’s ORBIS Enterprise IT solution were the following hospitals in
Northern Germany: the St. Marienhospital Ankum-Bersenbrück GmbH, the CKT Marienhospital Steinfurt GmbH and the STENUM Fachklinik für Orthopädie.

Agfa Specialty Products – second quarter 2013
Euro millions Q2 2012 Q2 2013 % change
Revenue 61 58 -4.9%
Recurring EBITDA (*) 2.3 6.5

182.6%

% of revenue 3.8% 11.2%
Recurring EBIT (*) 1.0 5.4 440.0%

(*) before restructuring and non-recurring items.

Agfa Specialty Products’ revenue reached 58 million Euro. The Synaps Synthetic Paper business, the Orgacon Electronic Materials business, the Security business and the printed circuit board business performed well. Furthermore, revenue was positively influenced by the first effects of the supply agreement for microfilm signed with Eastman Park Micrographics (announced in January). 

Partly because of the increased capacity utilization, the business group was able to considerably improve its operational efficiency. As a result, recurring EBIT improved to 5.4 million Euro and recurring EBITDA to 6.5 million Euro.

Results after six months
Agfa-Gevaert Group – year to date
Euro millions  H1 2012 H1 2013 % change
Revenue  1,513 1,437 -5.0%
Gross Profit (*)  434 414 -4.6%
% of revenue  28.7% 28.8%
Recurring EBITDA (*)  96 97 1.0%
% of revenue  6.3% 6.8%
Recurring EBIT (*)  53 57 7.5%
% of revenue  3.5% 4.0%
Result from operating activities  32 79 146.9%
Result for the period  (18) 11

(*) before restructuring and non-recurring items.

Agfa Graphics – year to date
Euro millions    H1 2012 H1 2013 % change
Revenue 814 751 -7.7%
Recurring EBITDA (*) 39.3 35.5 -9.7%
% of revenue 4.8% 4.7%
Recurring EBIT (*) 20.1 17.1 -14.9%

(*) before restructuring and non-recurring items.

Agfa HealthCare – year to date
Euro millions    H1 2012 H1 2013 % change
Revenue 578 570 -1.4%
Recurring EBITDA (*) 56.1 50.1 -10.7%
% of revenue 9.7% 8.8%
Recurring EBIT (*) 34.8 30.5 -12.4%

(*) before restructuring and non-recurring items.

Agfa Specialty Products – year to date
Euro millions    H1 2012 H1 2013 % change
Revenue 121 116 -4.1%
Recurring EBITDA (*) 3.2 13.0 306.3%
% of revenue 2.6% 11.2%
Recurring EBIT (*) 0.6 10.9 1,716.7%

(*) before restructuring and non-recurring items.

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.

Click here for the Condensed Interim Financial Statements as of June 30, 2013.


Viviane Dictus
Director Corporate Communication
Tel nr.: +32 (0) 3 444 7124
Fax nr.: +32 (0) 3 444 4485
viviane.dictus@agfa.com


Johan Jacobs
Corporate Press Relations Manager
Tel nr.: +32 (0) 3 444 8015
Fax nr.: +32 (0) 3 444 4485
johan.jacobs@agfa.com

2013-08-28T07:45:00+00:00