· Good performance by most of the growth engines
· Net profit of 14 million Euro
· Net financial debt at 22 million Euro
Mortsel (Belgium), November 8, 2017 – Agfa-Gevaert today announced its third quarter 2017 results.
“The progress made in the reorganization of our distribution channels for hardcopy film and the continued strong order book build-up in IT give us confidence in the short to medium term evolution of our HealthCare business.
Both our Inkjet business and our future-oriented specialty products performed well, while continued volume decreases, price erosion and aluminum price increases weighed on our prepress business.
The study on how to reorganize our HealthCare IT activities into a stand-alone legal entity structure within the Group is yielding encouraging results and October 10, the Board of Directors decided to initiate the first steps towards the execution of the plans. The management is fully committed to the success of this project, as we strongly believe that it is in the best interest of our Company, its stakeholders and its employees,” said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.
Agfa-Gevaert Group – third quarter 2017
| in million Euro | Q3 2016 | Q3 2017 | % change |
| Revenue | 625 | 593 | -5.1% |
| Gross profit (*) | 209 | 195 | -6.7% |
| % of revenue | 33.4% | 32.9% | |
| Recurring EBITDA (*) | 63 | 53 | -15.9% |
| % of revenue | 10.1% | 8.9% | |
| Recurring EBIT (*) | 49 | 40 | -18.4% |
| % of revenue | 7.8% | 6.7% | |
| Result from operating activities | 43 | 31 | -27.9% |
| Result for the period | 25 | 14 | -44.0% |
| Net cash from (used in) operating activities | 35 | 18 |
(*) before restructuring and non-recurring items
Most of the Agfa-Gevaert Group’s growth engines performed well in the third quarter of 2017. The Group’s top line decrease was mainly due to the strength of the Euro versus other currencies and the decline in the traditional businesses. Excluding currency effects, the decrease would be limited to 2.9%, which shows a clear improvement compared to the first half of the year.
Impacted by adverse raw material effects, the Group’s gross profit amounted to 195 million Euro, or 32.9% of revenue.
As a percentage of revenue, Selling and General Administration expenses amounted to 19.7%.
R&D expenses amounted to 35 million Euro, or 5.9% of revenue.
Recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) amounted to 8.9% of revenue, versus 10.1% in the third quarter of 2016. Recurring EBIT reached 6.7% of revenue, versus 7.8% in the previous year.
Restructuring and non-recurring items resulted in an expense of 9 million Euro, versus an expense of 6 million Euro in the third quarter of 2016.
The net finance costs decreased from 11 million Euro in the third quarter of 2016 to 8 million Euro.
Income tax expenses amounted to 9 million Euro, versus 7 million Euro in the previous year.
As a result of the elements mentioned above, the Agfa-Gevaert Group posted a net profit of 14 million Euro.
Financial position and cash flow
- At the end of the third quarter of 2017, total assets were 2,281 million Euro, compared to 2,352 million Euro at the end of 2016.
- Inventories amounted to 526 million Euro (115 days), versus 534 million Euro (114 days) in the third quarter of 2016. Trade receivables (minus deferred revenue and advanced payments from customers) amounted to 346 million Euro (53 days), versus 337 million Euro (49 days) in the third quarter of 2016, and trade payables were 227 million Euro (50 days), versus 219 million Euro (46 days).
- Net financial debt amounted to 22 million Euro, versus a net cash position of 18 million Euro at the end of 2016.
- Net cash from operating activities amounted to 18 million Euro.
Agfa Graphics – third quarter 2017
| in million Euro | Q3 2016 | Q3 2017 | % change |
| Revenue | 308 | 284 | -7.8% |
| Recurring EBITDA (*) | 23.9 | 14.2 | -40.6% |
| % of revenue | 7.8% | 5.0% | |
| Recurring EBIT (*) | 17.2 | 8.2 | -52.3% |
| % of revenue | 5.6% | 2.9% |
(*) before restructuring and non-recurring items
Adverse currency effects had a significant impact on Agfa Graphics’ top line. Excluding these effects, revenue decreased by 4.7%. Continuing the good performance of the previous quarters, the business group’s inkjet segment posted double-digit growth. Both the wide-format equipment product range and the inks for wide-format and industrial applications contributed to the revenue increase. Competitive pressure in the offset markets continued to weigh on prepress volumes and printing plate prices, although the price pressure started to ease somewhat due to increasing aluminum prices. In the prepress segment, the sustainable chemistry-free solutions continued to perform well. Agfa Graphics envisages to strengthen its market position with the recently introduced ECO³ program, which aims at giving customers access to a range of newly released value-added software solutions that will reduce costs, both in the prepress and press environment, while improving quality and productivity.
Mainly due to adverse raw material effects and competitive pressure effects, Agfa Graphics’ gross profit margin decreased from 29.5% in the third quarter of 2016 to 27.8%. Recurring EBITDA amounted to 14.2 million Euro (5.0% of revenue), versus 23.9 million Euro (7.8% of revenue) in last year’s third quarter and recurring EBIT reached 8.2 million Euro (2.9% of revenue), versus 17.2 million Euro (5.6% of revenue).
Recently, Independent Printers Worldwide (IPW) recognized Agfa Graphics with their annual Vendor of the Year Award. Agfa Graphics partners with IPW members to drive out waste in production, improve productivity and make the shift from traditional printing to digital inkjet printing. IPW is a global procurement and selling group specializing in superior supplier programs and global print sales opportunities for independent printers.
In the field of inkjet, Agfa Graphics teamed up with Monotech Systems, India’s leading products and solutions provider for the printing industry. Monotech Systems agreed to market Agfa Graphics’ entire range of UV flatbed products in western and southern India.
In the field of prepress, Agfa Graphics completed the acquisition of software developer and reseller Bodoni Systems. Bodoni is based in Watford (UK). Also in prepress, important new equipment, software and consumables contracts were signed in – among other countries – the USA, Argentina, Australia, Brazil, Israel and Saudi Arabia.
Agfa HealthCare – third quarter 2017
| in million Euro | Q3 2016 | Q3 2017 | % change |
| Revenue | 271 | 258 | -4.8% |
| Recurring EBITDA (*) | 36.5 | 35.7 | -2.2% |
| % of revenue | 13.5% | 13.8% | |
| Recurring EBIT (*) | 29.8 | 29.5 | -1.0% |
| % of revenue | 11.0% | 11.4% |
(*) before restructuring and non-recurring items
On a currency comparable basis, Agfa HealthCare’s revenue decline was limited to 3.2%. This decline was largely attributable to the hardcopy and classic X-ray product ranges. However, the top line impact of the reorganization of the hardcopy distribution channels in China started to abate in the third quarter. The situation should further normalize in the next quarters.
Most of the business group’s growth engines performed well in the third quarter. The Direct Radiography (DR) product range posted strong double-digit growth figures. While the HealthCare Information Solutions range reported continuous top line and order book growth, the Imaging IT Solutions range saw a temporary revenue slowdown. However, the continuously strong order book for the Enterprise Imaging platform ensures recurring medium and long term top line growth in this area.
Agfa HealthCare improved its gross profit margin from 39.9% in the third quarter of 2016 to 40.7%. As the success of the Enterprise Imaging platform incites Agfa HealthCare to speed up investments in its sales and service organization, recurring EBITDA decreased slightly from 36.5 million Euro (13.5% of revenue) in the third quarter of 2016 to 35.7 million Euro (13.8% of revenue). Recurring EBIT reached 29.5 million Euro (11.4% of revenue), versus 29.8 million Euro (11.0% of revenue) in last year’s third quarter.
In the field of Imaging IT Solutions, Agfa HealthCare continued to win important contracts for its Enterprise Imaging platform. In Luxembourg, for instance, Agfa HealthCare and Fédération des Hôpitaux Luxembourgeois signed a contract for the installation of a national-level Enterprise Imaging platform. The solution will make all patient images accessible from any hospital in the country, while respecting patient rights and confidentiality. WellStar Health System – the largest not-for-profit health system in the state of Georgia (USA) – will use Agfa HealthCare’s Enterprise Imaging platform to connect its clinicians with patient imaging information across multiple hospitals and hundreds of ambulatory care locations in the greater Atlanta metropolitan area. Recently, Agfa HealthCare and STC Solutions entered into a long-term collaboration to deliver cloud based advanced Enterprise Imaging services to healthcare providers in the Kingdom of Saudi Arabia. STC Solutions is the country’s main IT services provider.
In the field of Integrated Care, Agfa HealthCare announced that it will integrate Mitch&Mates’s solutions for administering and organizing patient questionnaires into its Integrated Care Suite. Agfa HealthCare’s Integrated Care Suite is a web-based platform that supports personal care management and access to patient health information beyond hospital walls for patients as well as care providers.
In HealthCare Information Solutions, all five sites of the Gemeinschaftsklinikum Mittelrhein went live with Agfa HealthCare’s ORBIS solution. In the German speaking countries of Europe, Agfa HealthCare is the leading provider of hospital information systems.
Agfa Specialty Products – third quarter 2017
| in million Euro | Q3 2016 | Q3 2017 | % change |
| Revenue | 46 | 50 | 8.7% |
| Recurring EBITDA (*) | 3.4 | 4.9 | 44.1% |
| % of revenue | 7.4% | 9.8% | |
| Recurring EBIT (*) | 2.7 | 4.0 | 48.1% |
| % of revenue | 5.9% | 8.0% |
(*) before restructuring and non-recurring items
Agfa Specialty Products’ revenue increased to 50 million Euro. The strong performances of the Printed Circuit Board business, Synaps Synthetic Paper and the Specialty Chemicals (including Orgacon Electronic Materials) more than compensated for the decline of the classic film products.
The business group’s recurring EBITDA improved to 4.9 million Euro (9.8% of revenue). Recurring EBIT amounted to 4.0 million Euro (8.0% of revenue).
Results after nine months
Agfa-Gevaert Group – year to date
| in million Euro | 9m 2016 | 9m 2017 | % change |
| Revenue | 1,873 | 1,803 | -3.7% |
| Gross profit (*) | 634 | 600 | -5.4% |
| % of revenue | 33.8% | 33.3% | |
| Recurring EBITDA (*) | 189 | 152 | -19.6% |
| % of revenue | 10.1% | 8.4% | |
| Recurring EBIT (*) | 147 | 113 | -23.1% |
| % of revenue | 7.8% | 6.3% | |
| Result from operating activities | 147 | 99 | -32.7% |
| Result for the period | 75 | 49 | -34.7% |
| Net cash from (used in) operating activities | 82 | 14 |
(*) before restructuring and non-recurring items
Agfa Graphics – year to date
| in million Euro | 9m 2016 | 9m 2017 | % change |
| Revenue | 936 | 893 | -4.6% |
| Recurring EBITDA (*) | 77.5 | 57.0 | -26.5% |
| % of revenue | 8.3% | 6.4% | |
| Recurring EBIT (*) | 57.5 | 38.7 | -32.7% |
| % of revenue | 6.1% | 4.3% |
(*) before restructuring and non-recurring items
Agfa HealthCare – year to date
| in million Euro | 9m 2016 | 9m 2017 | % change |
| Revenue | 802 | 761 | -5.1% |
| Recurring EBITDA (*) | 102.9 | 84.1 | -18.3% |
| % of revenue | 12.8% | 11.1% | |
| Recurring EBIT (*) | 83.2 | 65.3 | -21.5% |
| % of revenue | 10.4% | 8.6% |
(*) before restructuring and non-recurring items
Agfa Specialty Products – year to date
| in million Euro | 9m 2016 | 9m 2017 | % change |
| Revenue | 135 | 148 | 9.6% |
| Recurring EBITDA (*) | 12.3 | 14.5 | 17.9% |
| % of revenue | 9.1% | 9.8% | |
| Recurring EBIT (*) | 9.7 | 12.0 | 23.7% |
| % of revenue | 7.2% | 8.1% |
(*) before restructuring and non-recurring items
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