Agfa-Gevaert publishes its third quarter results – Regulated information

Agfa-Gevaert today announced its third quarter results.

• Revenue increased by 6.5 percent – Industrial inkjet and healthcare IT continued to perform well
• Gross profit margin continued to improve year-on-year
• Recurring EBIT increased to 29 million Euro
• Year-on-year improvement of net result

Agfa-Gevaert Group – third quarter 2012

(*) before restructuring and non-recurring items.

Supported by positive currency effects, the Agfa-Gevaert Group’s revenue increased by 6.5 percent compared to the third quarter of 2011. The Group’s main growth engines – industrial inkjet in Agfa Graphics and IT in Agfa HealthCare – continued to contribute to the growth.

As expected, the gross profit margin continued to improve year-on-year. Driven by further efficiency improvements, the gross profit margin reached 27.3 percent, versus 25.2 percent in the third quarter of 2011.

As a percentage of revenue, Selling and General Administration expenses improved slightly from 18.5 percent to 18.3 percent.

The Group’s recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) increased from 32 million Euro to 50 million Euro. Recurring EBIT nearly tripled from 10 million Euro to 29 million Euro.

Restructuring and non-recurring items resulted in an expense of 2 million Euro, versus an expense of 19 million Euro last year.

The net finance costs amounted to 25 million Euro, versus 22 million Euro in 2011.

Income tax expenses remained stable at 6 million Euro.  

For the first time this year, the quarter’s net result improved versus 2011. In the third quarter, a result attributable to the owners of the Company of minus 7 million Euro was booked, compared to minus 37 million Euro in 2011.

“The third quarter did not bring any major surprise, but I would like to highlight two very positive achievements. Firstly, our main growth engines continue to perform well. Agfa Graphics’ industrial inkjet business continues to grow according to plan and Agfa HealthCare’s enterprise IT business posted good sales figures. Secondly, our largest business groups both succeeded in further strengthening their position in the growth markets. Together with the continued improvement of our gross margins, these elements are very encouraging for the future,” said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.

Financial position and cash flow

• At the end of the third quarter, total assets were 2,915 million Euro, compared to 2,949 million Euro at the end of 2011.
• Inventories amounted to 691 million Euro (or 112 days). Trade receivables (minus deferred revenue and advanced payments from customers) amounted to 452 million Euro (or 53 days) and trade payables were 253 million Euro, or 41 days.
• Net financial debt amounted to 295 million Euro, versus 339 million Euro at the end of the third quarter of 2011 and 306 million Euro at the end of the second quarter of 2012.
• Net cash from operating activities amounted to 31 million Euro.

Agfa Graphics – third quarter 2012

(*) before restructuring and non-recurring items.

Supported by positive currency effects, Agfa Graphics’ revenue grew strongly to 417 million Euro. The business group’s industrial inkjet segment posted double-digit revenue growth. In prepress, the volume increase was counterbalanced by price pressure. The digital computer-to-plate (CtP) business continued to suffer from the weakness of the economy in Europe, but performed well in the rest of the world. Sales in the analog computer-to-film (CtF) business were up versus the very weak third quarter of 2011.

Supported by the operational improvements and the top line growth in the industrial inkjet segment, gross profit improved to 24.0 percent of revenue. Recurring EBITDA improved strongly to 24.1 million Euro (5.8 percent of revenue) and recurring EBIT to 14.8 million Euro (3.5 percent of revenue).

In the third quarter, Agfa Graphics again added a number of eye-catching names to its customer base in prepress, as well as in industrial inkjet.

In prepress, Agfa Graphics further strengthened its position in Asia. In Japan, for instance, Print Net (Tokyo), one of the largest web-to-print companies in the country, and Sun m Color (Kyoto) switched to Agfa Graphics’ :Azura chemistry-free printing plates. The China Times, a major newspaper in Taiwan, signed a comprehensive CtP contract, including six platesetters and :Arkitex workflow software. In Korea, the Hankyoreh newspaper signed a multi year contract for :N94-V printing plates. In the field of packaging, both the leading metal can manufacturer Daeryuk Can company and the corrugated box manufacturer Wonchang Corrugated Packaging signed a contract for a platesetter and :Energy Elite Pro printing plates.

In Europe, the German Ganz Interprinter company ordered a complete CtP solution, including equipment, workflow software and a two-year printing plate contract. Alma Manu – part of the second largest media group in Finland – ordered a complete CtP solution for their new printing site. At the new site, they will use Agfa Graphics’ :N94-VCF chemistry-free printing plates for newspaper printers. In the USA, a major printing plate contract was signed with Southern Graphic Systems, a large packaging company based in Louisville, KY.

Agfa Graphics’ industrial inkjet systems continue to convince printers all over the world. Recently, the business group reached a number of eye-catching milestones.

Koma Grafisk became the first printer in the Nordic region to install an :M-Press Leopard flatbed inkjet press. The customer base for the :Jeti 3020 Titan system also continued to grow. Discus Digital Print became the first customer for the high-production inkjet printer in Oceania. Expressway Graphics and Gera Arte Group ordered the first :Jeti Titan systems in Puerto Rico and Brazil respectively. Several European printers – including the Norwegian Konsis Grafisk and the French Publifix company – also welcomed the :Jeti Titan.

One of the most notable contracts signed in the third quarter, was the combined inkjet and prepress contract with Lake Erie Graphics, a commercial printer based in Brook Park, Ohio (USA). The company ordered a :Jeti 3020 Titan system, along with ink and media, as well as an :Avalon N8 platesetter. Furthermore, Agfa Graphics will supply Lake Erie Graphics with :Azura TS printing plates.

Agfa HealthCare – third quarter 2012

(*) before restructuring and non-recurring items.

Supported by positive currency effects, Agfa HealthCare’s revenue increased by 11.2 percent to 297 million Euro. The digital radiography business (consisting of Computed Radiography and Direct Radiography) performed well, adding to the continued growth of the IT segment. Compared to the very weak third quarter of 2011, film volumes also increased.

IT performed strongly in Germany and the North of Europe, as well as in Latin America. Business in the South of Europe continued to suffer from the recession. In the USA, the imaging IT business was somewhat soft.

Thanks to Agfa HealthCare’s film price increases and the measures to support profitability, the gross profit margin improved from 32.2 percent in the third quarter of last year to 35.0 percent. Recurring EBITDA reached 27.9 million Euro (or 9.4 percent of revenue). Recurring EBIT improved to 17.1 million Euro (or 5.8 percent of revenue).

In the field of Imaging, Agfa HealthCare’s CR 10-X table-top computed radiography (CR) system received FDA approval. The system is now available throughout North America. The CR 10-X system offers small hospitals and practices an affordable way to upgrade from analog to high-quality digital imaging.

Also in the third quarter, Agfa HealthCare signed a new three-year multi-source contract with the group purchasing division of the Premier healthcare alliance for its entire portfolio of direct radiography (DR) products. Premier counts over 2,600 member hospitals in the USA.

Furthermore, the Radiologischen Gemeinschaftspraxis Betzdorf became the first healthcare center in Germany to put Agfa HealthCare’s DX-D 800 system into service. This complete DR solution is suitable for both static and dynamic imaging.

In Imaging IT, Agfa HealthCare introduced its new Global Remote Incident Prevention (GRIP) services. As part of the GRIP services, a centralized global monitoring center and technical team continually monitor the IMPAX PACS solutions (as well as certain third-party systems) of customers worldwide to identify and prevent possible incidents before they occur. In a later stage, other Agfa HealthCare solutions will also be covered.

Agfa HealthCare also launched a new version of its IMPAX Data Center. The IMPAX Data Center 3.0 enables hospitals and hospital groups to consolidate all imaging data into a single, centralized repository.

In the UK, Agfa HealthCare signed a seven-year contract extension with Shrewsbury and Telford Hospital NHS Trust. The contract includes a full upgrade of their PACS systems and the replacement of eight CR units. The trust will also trial two of Agfa HealthCare’s DX-D 100 mobile DR systems.

Agfa HealthCare further strengthened its leading position for Enterprise IT in the German speaking countries of Europe. The St. Josefskrankenhaus in Heidelberg (Germany), for instance, signed a contract for the replacement of its existing Hospital Information System (HIS) by Agfa HealthCare’s ORBIS solution. 

In September, Agfa HealthCare announced a global strategic relationship with Orion Health, a global leader in health information exchange and healthcare integration solutions. Thanks to the partnership, Agfa HealthCare will be able to extend the reach of both its ICIS solution (Imaging Clinical Information Services), and its ORBIS Enterprise IT platform. Orion Health will include Agfa HealthCare’s ICIS solution (including the IMPAX Data Center and the XERO image viewer) in its offering.

Agfa Specialty Products – third quarter 2012

(*) before restructuring and non-recurring items.

Agfa Specialty Products’ third quarter revenue decreased by 20.0 percent. The various businesses evolved in line with the trends of the previous quarters.

Recurring EBIT amounted  to minus 2.1 million Euro and recurring EBITDA to minus 0.7 million Euro.

Results after nine months

Agfa-Gevaert Group – year to date

(*) before restructuring and non-recurring items.

Agfa Graphics – year to date

(*) before restructuring and non-recurring items.

Agfa HealthCare – year to date

(*) before restructuring and non-recurring items.

Agfa Specialty Products – year to date

(*) 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.