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

Press Release / Mortsel - Belgium / 9th November 2016


Agfa-Gevaert today announced its third quarter 2016 results.
  • Full year 10% recurring EBITDA target well within reach
  • Net profit of 25 million Euro
  • Net financial debt at a historically low level
  • Continued strong top line performance of HealthCare IT

“Driven by the success of our efficiency measures and by favorable raw material effects, the positive profitability trend continued in the third quarter. We expect our full year recurring EBITDA to reach 10% of revenue, which is the main target we set ourselves for 2016. That allows us to partly shift our focus to the top line. We are very pleased with the continued strong performance of HealthCare IT. We will implement various projects aiming at limiting the decline of our traditional businesses and at boosting the success of our growth engines. Reversing the organic top line erosion is our top priority,” said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.

Agfa-Gevaert Group – third quarter 2016
Euro millions Q3 2015 Q3 2016 % change
Revenue 661 625 -5.4%
Gross Profit (*) 209 209
% of revenue 31.6% 33.4%
Recurring EBITDA (*) 60 63 +5.0%
% of revenue 9.1% 10.1%
Recurring EBIT (*) 46 49 +6.5%
% of revenue 7.0% 7.8%
Result from operating activities 43 43
Result for the period 33 25

(*) before restructuring and non-recurring items.

The Agfa-Gevaert Group’s revenue decreased by 5.4% (4.9% excluding currency effects) to 625 million Euro. For the Agfa HealthCare business group, the revenue trend improved compared to the previous quarters of the year. The HealthCare IT growth engines continued to perform strongly. The Agfa Graphics business group continued to face the strong competitive pressure in the offset markets and the market softness in certain emerging countries.

Due to targeted efficiency measures and positive raw material effects (mainly in the Agfa Graphics business group), the gross profit margin improved by almost two percentage points to 33.4% of revenue.

As a percentage of revenue, Selling and General Administration expenses amounted to 19.8%.

R&D expenses amounted to 35 million Euro, or 5.6% of revenue.

Recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) improved by 1 percentage point from 9.1% of revenue in the third quarter of 2015 to 10.1%. Recurring EBIT improved from 7.0% of revenue to 7.8%.

Restructuring and non-recurring items resulted in an expense of 6 million Euro, versus an expense of 3 million Euro in the third quarter of 2015.

The net finance costs decreased from 12 million Euro in the third quarter of 2015 to 11 million Euro.

Income tax expenses amounted to 7 million Euro, versus an income of 2 million Euro in the previous year.

As a result of the elements mentioned above, the Agfa-Gevaert Group posted a net profit of 25 million Euro.

Financial position and cash flow
  • At the end of the third quarter of 2016, total assets were 2,342 million Euro, compared to 2,402 million Euro at the end of 2015.
  • Inventories amounted to 537 million Euro (114 days), versus 563 million Euro (111 days) in the third quarter of 2015. Trade receivables (minus deferred revenue and advanced payments from customers) amounted to 337 million Euro (49 days), versus 363 million Euro (50 days) in the third quarter of 2015, and trade payables were 219 million Euro (46 days), versus 238 million Euro (47 days).
  • Net financial debt amounted to 31 million Euro, versus 58 million Euro at the end of 2015.
  • Net cash from operating activities amounted to 35 million Euro.
Agfa Graphics – third quarter 2016
Euro millions Q3 2015 Q3 2016  % change
Revenue 338 308  -8.9%
Recurring EBITDA (*) 24.4 23.9  -2.0%
% of revenue 7.2% 7.8%
Recurring EBIT (*) 16.8 17.2  +2.4%

(*) before restructuring and non-recurring items.

On a currency comparable basis, Agfa Graphics’ top line decreased by 8.5%. In the prepress segment, the digital computer-to-plate (CtP) business continued to suffer from the severe competitive pressure in the offset markets and the market softness in certain emerging countries. However, the sustainable printing plate solutions continued to be successful all over the world. The analog computer-to-film (CtF) business continued to decline. In the inkjet segment, the fourth quarter will benefit from the successes recorded after the four-yearly drupa trade fair (Düsseldorf, Germany – May 31 – June 10).

The combination of structural efficiency measures and positive raw material effects offset the competitive pressure effects. As a result, Agfa Graphics was able to improve its gross profit margin from 27.5% of revenue in last year’s third quarter to 29.5%. Recurring EBITDA amounted to 23.9 million Euro (7.8% of revenue), versus 24.4 million Euro (7.2% of revenue) in last year’s third quarter and recurring EBIT reached 17.2 million Euro (5.6% of revenue), versus 16.8 million Euro (5.0% of revenue).

In the field of inkjet, Agfa Graphics introduced a new member to its recently launched family of hybrid Anapurna i wide-format printers with LED UV curing at SGIA EXPO 2016 (Las Vegas). The Anapurna H3200i LED machine handles all types of roll media up to 3.2 m, as well as 2mx3m rigid media. Thanks to the LED UV curing, the machine supports the widest media mix in the market, while saving dramatically on energy use. The first ever hybrid Anapurna with LED curing was installed at PSW Paper & Print (UK).

Also at SGIA EXPO 2016, Agfa Graphics won three Product of the Year Awards for the second year in a row. The award-winning inkjet printing machines were the brand-new Anapurna H3200i LED, the Jeti Tauro and the Jeti Mira.

In the field of prepress, an eye-catching contract was signed with Johnston Press, one of the largest local and regional multimedia organizations in the UK. The 7-year contract covers a complete upgrade of the prepress facilities at the printing sites in Dinnington, Portsmouth and Cam. In Germany, an equipment and printing plate contract was signed with MM Graphia Bielefeld, which is part of Mayr Melnhof Packaging (MMP). MMP is one of the most important players in the German packaging industry. Furthermore, Funke Mediengruppe – one of Germany’s major media groups – signed an important printing plate contract and ordered several Advantage platesetters and Attiro clean-out units. Other major prepress contracts were concluded with – among other companies – Mediaprint (Austria) and The Korea Economic Daily (Korea).

Agfa HealthCare – third quarter 2016
Euro millions Q3 2015  Q3 2016  % change
Revenue 276  271  -1.8%
Recurring EBITDA (*) 33.9  36.5  +7.7%
% of revenue 12.3%  13.5%
Recurring EBIT (*) 27.6  29.8  +8.0%

(*) before restructuring and non-recurring items.

On a currency comparable basis, Agfa HealthCare’s top line decline was limited to 1.1%. The revenue trend for the Imaging segment’s hardcopy business started to stabilize after three quarters of decline versus last year’s equivalent quarters. This decline resulted from measures taken in the fourth quarter of 2015 to align the inventory policy at the distributors’ level with the economic situation in the emerging markets. In the IT segment, both the HealthCare Information Solutions range and the Imaging IT Solutions range continued to perform strongly. As part of the latter product range, the Enterprise Imaging platform again convinced numerous healthcare providers all over the world.

Structural efficiency measures allowed Agfa HealthCare to improve its gross profit margin from 38.8% of revenue in the third quarter of 2015 to 39.9%. Recurring EBITDA improved strongly from 33.9 million Euro (12.3% of revenue) in the third quarter of 2015 to 36.5 million Euro (13.5% of revenue). Recurring EBIT reached 29.8 million Euro (11.0% of revenue), versus 27.6 million Euro (10.0% of revenue) in last year’s third quarter.

In the field of Imaging, Agfa HealthCare has received Frost & Sullivan’s 2016 North American Product Leadership Award in Digital Radiography. The research group commented that Agfa HealthCare’s complete portfolio of DR systems, as well as impressive radiography advancements, have earned a solid reputation for service excellence and product reliability.

In the field of Imaging IT Solutions, Agfa HealthCare was named the Number 1 most recommended image sharing vendor in a recent review published by research firm peer60. The report reflects the views of more than 350 healthcare providers. Image sharing is an integral part of Agfa HealthCare’s Enterprise Imaging platform, enabling caregivers to view, share, and exchange many types of medical images.

The new, comprehensive Enterprise Imaging platform continued to convince care organizations around the world. Examples of US care organizations that recently decided to implement the solutions are Umass Memorial Health Care (the largest provider of healthcare in Central Massachusetts) and the University of Mississippi Medical Center.

Furthermore, the US Government has awarded Agfa HealthCare its DIN-PACS IV contract. The contract term includes one five-year base period and one five-year option period. The DIN-PACS IV contract allows US government healthcare providers to purchase diagnostic imaging IT and related technology solutions on-demand, providing flexibility, cost savings, and quality enhancement in service to its healthcare consumers.

In HealthCare Information Solutions, Agfa HealthCare and Kreiskliniken Esslingen won the GS1 Healthcare Award 2016 for a project that establishes secure medication in the hospital through a unique barcode system. The system forms a secure and closed chain, which is monitored and documented in ORBIS, Agfa HealthCare’s hospital information system. Kreiskliniken Esslingen plans to roll out the successful workflow throughout all wards.

Agfa Specialty Products – third quarter 2016
Euro millions Q3 2015 Q3 2016 % change
Revenue 47 46 -2.1%
Recurring EBITDA (*) 3.5 3.4 -2.9%
% of revenue 7.4% 7.4%
Recurring EBIT (*) 2.5 2.7 +8.0%

(*) before restructuring and non-recurring items.

Agfa Specialty Products’ revenue remained almost stable at 46 million Euro. The future-oriented businesses Synaps Synthetic Paper and Orgacon Electronic Materials performed well.

The business group’s recurring EBITDA reached 3.4 million Euro (7.4% of revenue). Recurring EBIT amounted to 2.7 million Euro (5.9% of revenue).

Results after nine months
Agfa-Gevaert Group – year to date
Euro millions  9m 2015 9m 2016 % change
Revenue  1,974 1,873 -5.1%
Gross Profit (*)  635 634 -0.2%
% of revenue  32.2% 33.8%
Recurring EBITDA (*)  175 189 +8.0%
% of revenue  8.9% 10.1%
Recurring EBIT (*)  130 147 +13.1%
% of revenue  6.6% 7.8%
Result from operating activities  115 147 +27.8%
Result for the period  61 75 +23.0%

(*) before restructuring and non-recurring items.

Agfa Graphics – year to date
Euro millions 9m 2015 9m 2016 % change
Revenue 1,008 936 -7.1%
Recurring EBITDA (*) 65.8 77.5 +17.8%
% of revenue 6.5% 8.3%
Recurring EBIT (*) 43.1 57.5 +33.4%

(*) before restructuring and non-recurring items.

Agfa HealthCare – year to date
Euro millions 9m2015 9m 2016  % change
Revenue 824 802  -2.7%
Recurring EBITDA (*) 99.8 102.9  +3.1%
% of revenue 12.1% 12.8%
Recurring EBIT (*) 79.8 83.2  +4.3%

(*) before restructuring and non-recurring items.

Agfa Specialty Products – year to date
Euro millions 9m 2015 9m 2016 % change
Revenue 142 135 -4.9%
Recurring EBITDA (*) 13.8 12.3 -10.9%
% of revenue 9.1% 9.1%
Recurring EBIT (*) 10.8 9.7 -10.2%

(*) 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.


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

2017-04-20T15:17:53+00:00