Agfa-Gevaert publishes its second quarter 2016 results – regulated information

Press Release / Mortsel - Belgium / 25th August 2016


Agfa-Gevaert today announced its second quarter 2016 results.
  • Overall good performance of the growth engines
  • Recurring EBITDA at 12.1% of revenue in the second quarter and 10.1% after six months – Step towards reaching the 10% full year 2016 target
  • Solid net profit

“In the second quarter, our efficiency measures continued to contribute to the improvement of our profitability. Also helped by positive raw material effects, we brought our gross profit margin to the highest level in more than five years. Our recurring EBITDA margin improved to 12.1% of revenue in the second quarter and to 10.1% after six months. This clearly shows that we took a step towards reaching the 10% target we set for the full year. The very solid net profit is another point of satisfaction. We now expect the top line decline rate to slow down in the second half of the year,” said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.

Agfa-Gevaert Group – second quarter 2016
Euro millions Q2 2015 Q2 2016 % change
Revenue 691 645 -6.7%
Gross Profit (*) 229 230 +0.4%
% of revenue 33.1% 35.7%
Recurring EBITDA (*) 72 78 +8.3%
% of revenue 10.4% 12.1%
Recurring EBIT (*) 56 64 +14.3%
% of revenue 8.1% 9.9%
Result from operating activities 48 74 +54.2%
Result for the period 25 40 +60.0%

(*) before restructuring and non-recurring items.

Notwithstanding the good performance of the growth engines, the Agfa-Gevaert Group’s revenue decreased by 6.7% (4.1% excluding currency rates) to 645 million Euro. The classic film products continued to decline in all business groups. The lower top line of the Agfa HealthCare business group is largely contributable to the hardcopy business, where sales were exceptionally high in the second quarter of 2015.

Due to targeted efficiency measures and positive raw material effects (mainly in the Agfa Graphics business group), the Group was able to improve its gross profit margin by 2.6 percentage points to 35.7% of revenue, thus reaching the highest level since the second quarter of 2010.

As a percentage of revenue, Selling and General Administration expenses amounted to 20.0%.

R&D expenses amounted to 35 million Euro, or 5.4% of revenue.

Recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) improved strongly from 10.4% of revenue in the second quarter of 2015 to 12.1%. Recurring EBIT improved from 8.1% of revenue to 9.9%.

Restructuring and non-recurring items resulted in an income of 10 million Euro, versus an expense of 8 million Euro in the second quarter of 2015. This was mainly due to the sale of the properties of the Korean manufacturing site, which was closed in 2015.

Mainly due to the decision to mothball the operations in Venezuela, the net finance costs increased from 14 million Euro in the second quarter of 2015 to 21 million Euro. This decision led to a one-off reclassification from translation reserve to profit and loss for an amount of 7.5 million Euro. This reclassification did not have any cash flow or equity impact.

Income tax expenses amounted to 13 million Euro, versus 9 million Euro in the previous year.

As a result of the elements mentioned above, the Agfa-Gevaert Group posted a very strong net profit of 40 million Euro, a 60% increase versus the second quarter of 2015.

Financial position and cash flow
  • At the end of the second quarter of 2016, total assets were 2,375 million Euro, compared to 2,402 million Euro at the end of 2015.
  • Inventories amounted to 542 million Euro (112 days), versus 575 million Euro (114 days) in the second quarter of 2015. Trade receivables (minus deferred revenue and advanced payments from customers) amounted to 351 million Euro (49 days), versus 371 million Euro (48 days) in the second quarter of 2015, and trade payables were 253 million Euro (52 days), versus 239 million Euro (47 days).
  • Net financial debt amounted to 52 million Euro, versus 58 million Euro at the end of 2015.
  • Net cash from operating activities amounted to 8 million Euro.
Agfa Graphics – second quarter 2016
Euro millions Q2 2015 Q2 2016  % change
Revenue 349 321  -8.0%
Recurring EBITDA (*) 20.0 28.9  +44.5%
% of revenue 5.7% 9.0%
Recurring EBIT (*) 12.5 22.3  +78.4%

(*) before restructuring and non-recurring items.

For Agfa Graphics’ inkjet segment, the four-yearly drupa trade fair (Düsseldorf, Germany – May 31 – June 10) was a success in terms of order generation. However, as customers are always reluctant to invest in new equipment in the months prior to the event, this is not reflected in the second quarter top line. In the prepress segment, the volume trend in the digital computer-to-plate (CtP) business continued to improve, mainly based on the success of the sustainable printing plate solutions. On the negative side, the CtP business continued to suffer from the severe competitive pressure in the offset markets. The continuing decline of the analog computer-to-film (CtF) business also added to Agfa Graphics’ 8.0% (6.3% excluding currency effects) revenue decline.

Counterbalancing the competitive pressure effects, the combination of structural efficiency measures and positive raw material effects allowed Agfa Graphics to improve its gross profit margin from 28.1% of revenue in last year’s second quarter to 31.2%. Recurring EBITDA improved substantially from 20.0 million Euro (5.7% of revenue) to 28.9 million Euro (9.0% of revenue). Recurring EBIT reached 22.3 million Euro (6.9% of revenue), versus 12.5 million Euro (3.6% of revenue) in the second quarter of 2015.

The four-yearly international drupa trade fair was the highlight of the quarter for Agfa Graphics. The business group’s sales targets were exceeded for both the inkjet business as well as the prepress business. In prepress, Agfa Graphics confirmed its good position in the chemistry-free printing plate segment of the market. In the build-up to drupa, the business group showed its commitment to the industry through several important product announcements.

In the field of inkjet, Agfa Graphics introduced a new series of Anapurna i print engines with LED UV curing. LED UV curing enables printers to print on a broader range of media, save energy, increase system up time and reduce operational expenses. At drupa, the European Digital Press Association granted Agfa Graphics the EDP award in the category ‘best wide format flatbed/hybrid printer up to 250 m²/h’ for its Jeti Mira print engine.

In the field of prepress, Agfa Graphics launched version 10 of its Apogee workflow software solution for commercial printers. With a wider range of features, improved performance and a unique cloud-based alternative, Apogee 10 expands on its main pillars: innovation, interaction and optimization. 

For newspaper printers, the business group announced a new version of the Arkitex Production workflow solution. Arkitex Production keeps all departments informed about the operations thanks to a single, integrated user interface. The solution offers printers a faster turnaround and increased productivity.

Agfa Graphics also introduced three new Advantage platesetters for newspaper printers and a new ultra-fast Avalon platesetter for commercial customers. Furthermore, Agfa Graphics launched Energy Elite Eco, its new no-bake thermal printing plate, and the brand-new Arkana plate processor. Energy Elite Eco offers very high run lengths and photorealistic imaging quality, as well as significant ecological and economical advantages.

In the field of security printing, Agfa Graphics launched its Arziro Design 2.0 software solution. The solution enables the creation of unique, complex, and hard-to-copy designs that protect e.g. vouchers, tickets, documents, labels and packaging against forgery. With Arziro Design comes the new Arziro Authenticate tool, which makes it possible to track and trace printed matter (including packaging) via the internet.

In April, the European Logistics Association granted Agfa Graphics the ‘ELA Award for best presentation 2016’ for its ‘Sustainability through recycling via collaborative supply chain’ project. The project is aimed at creating a sustainable closed-loop solution that allows high-grade aluminum to be reused without value loss.

Agfa HealthCare – second quarter 2016
Euro millions Q2 2015  Q2 2016  % change
Revenue 294  277  -5.8%
Recurring EBITDA (*) 45.5  43.9  -3.5%
% of revenue 15.5%  15.8%
Recurring EBIT (*) 38.9  37.3  -4.1%

(*) before restructuring and non-recurring items.

In spite of the good performance of the IT business, Agfa HealthCare’s top line decreased by 2.0% on a currency comparable basis. The decline is mainly explained by the Imaging segment’s hardcopy business, where sales were exceptionally high in the first three quarters of 2015. The normalization of hardcopy sales in this year’s first and second quarter led to a top line decrease compared to the same periods in 2015. 

In the IT segment, the HealthCare Information Solutions range continued to grow strongly. The Imaging IT Solutions range also posted substantial revenue growth, driven by the success of the Enterprise Imaging platform.

Mainly due to the structural efficiency measures, Agfa HealthCare’s gross profit margin improved substantially from 39.8% of revenue in the second quarter of 2015 to 41.9%. Recurring EBITDA reached 43.9 million Euro (15.8% of revenue), versus 45.5 million Euro (15.5% of revenue) in the second quarter of 2015. Recurring EBIT amounted to 37.3 million Euro (13.5% of revenue), compared to 38.9 million Euro (13.2% of revenue).

In the field of Imaging, Agfa HealthCare signed an agreement with Kettering Health Network (Ohio, USA) for the installation of nine instant DR systems in three of the network’s hospitals. The agreement fits in the network’s strategy to upgrade and improve its technology in view of the ever-increasing patient load.

In the field of Imaging IT Solutions, Agfa HealthCare continued to sign important contracts for its new, comprehensive Enterprise Imaging platform. With the solution, hospitals can enable clinicians to access and use all imaging data they need, no matter where they are practicing. Examples of organizations implementing the solution in the USA are Methodist Healthcare (San Antonio, Texas) and Augusta Health (Fisherville, Virginia). With 3,000 beds across 12 hospital sites, Methodist Healthcare is the largest hospital by number of beds in the USA. 

In the Netherlands, the Zuyderland Medical Center (MC) has successfully upgraded its imaging cloud solution and migrated to a new image data center, managed by Agfa HealthCare. The Zuyderland MC was formed after the merger of two hospitals. The merged hospital needed a solution to allow the different systems at the two sites to communicate with each other, as well as a shared data center for archiving and managing images.

In HealthCare Information Solutions, Agfa HealthCare and Assistance Publique – Hôpitaux de Paris (AP-HP) have extended their relationship for another four years. Agfa HealthCare will deploy its ORBIS clinical information system across all 39 AP-HP hospitals. The project is one of the most ambitious healthcare IT deployments in Europe. In the UK, Agfa HealthCare signed an agreement with Derby Teaching Hospitals NHS Foundation Trust to implement the ORBIS ICU Manager solution. The solution will allow the organization to automate the collection of data from monitors and devices in the Intensive Care Units (ICU). By speeding up workflow and reducing the risk of potential errors, the solution can help the hospital to improve clinical safety, efficiency and cost effectiveness. 

In June, Agfa HealthCare announced that it joined the Watson Health Imaging Center of Excellence, created by IBM Watson Health. The initiative brings together clinical and industrial participants to develop cognitive technologies in the domain of imaging. Its ultimate goal is saving and improving lives, reducing costs and improving access in order to expand the physicians’ view and support them to make more confident diagnostic and treatment decisions. Agfa HealthCare will e.g. contribute to the training of Watson on common diseases associated with a high use of imaging, high mortality and high costs.

Agfa Specialty Products – second quarter 2016
Euro millions Q2 2015 Q2 2016 % change
Revenue 48 47 -2.1%
Recurring EBITDA (*) 7.3 6.9 -5.5%
% of revenue 15.2% 14.7%
Recurring EBIT (*) 6.3 5.9 -6.3%

(*) before restructuring and non-recurring items.

Agfa Specialty Products’ revenue remained almost stable at 47 million Euro. The good performances of the future-oriented businesses, such as Synaps Synthetic Paper, Printed Circuit Board consumables and Orgacon Electronic Materials partly counterbalanced the decline of the traditional film product lines.

The business group’s recurring EBITDA reached 6.9 million Euro (14.7% of revenue). Recurring EBIT amounted to 5.9 million Euro (12.6% of revenue).

Results after six months
Agfa-Gevaert Group – year to date
Euro millions   H1 2015 H1 2016 % change
Revenue  1,313 1,248 -5.0%
Gross Profit (*)  426 425 -0.2%
% of revenue  32.4% 34.1%
Recurring EBITDA (*)  115 126 +9.6%
% of revenue  8.8% 10.1%
Recurring EBIT (*)  84 98 +16.7%
% of revenue  6.4% 7.9%
Result from operating activities  72 104 +44.4%
Result for the period  28 50 +78.6%

(*) before restructuring and non-recurring items.

Agfa Graphics – year to date
Euro millions H1 2015 H1 2016 % change
Revenue 670 628 -6.3%
Recurring EBITDA (*) 41.4 53.6 +29.5%
% of revenue 6.2% 8.5%
Recurring EBIT (*) 26.3 40.3 +53.2%

(*) before restructuring and non-recurring items.

Agfa HealthCare – year to date
Euro millions H1 2015 H1 2016  % change
Revenue 548 531  -3.1%
Recurring EBITDA (*) 65.9 66.4  +0.8%
% of revenue 12.0% 12.5%
Recurring EBIT (*) 52.2 53.4  +2.3%

(*) before restructuring and non-recurring items.

Agfa Specialty Products – year to date
Euro millions H1 2015 H1 2016 % change
Revenue 95 89 -6.3%
Recurring EBITDA (*) 10.3 8.9 -13.6%
% of revenue 10.8% 10.0%
Recurring EBIT (*) 8.3 7.0 -15.7% 

(*) 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, 2016.


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

2016-08-25T07:45:30+00:00