Agfa-Gevaert publishes its third quarter 2013 results - Regulated information

  • Group revenue impacted by strong currency effects, the product portfolio rationalization, the weak economic conditions and the decline of the analog businesses
  • Gross profit margin continued to improve year-on-year
  • Recurring EBIT at 26 million Euro
  • Net result at minus 6 million Euro
  • Working capital improvement contributed to strong operational cash flow and to net debt reduction

  • Press Release
  • Mortsel - Belgium
  • November 13, 2013 7:45 AM CET

Agfa-Gevaert today announced its third quarter 2013 results.

"Our third quarter top line is distorted by the very strong adverse currency impact. In addition, analog film revenue was much lower than in the third quarter of last year, when the analog businesses performed exceptionally strong, recovering from a weak period in 2011 and in the first months of 2012. Our future oriented digital and IT products, on the other hand, evolved positively. Agfa Graphics' industrial inkjet business confirmed the crossing of the break-even line, resulting in a slightly positive year-to-date recurring EBIT. Our gross profit margin improved compared to last year's third quarter. Furthermore, the improvement of our operational cash flow and the reduced net debt show the success of our working capital efforts," said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.

Agfa-Gevaert Group - third quarter 2013

Euro millions Q3 2012 Q3 2013 % change
Revenue 766 689 -10.1%
Gross Profit (*) 209 192 -8.1%
% of revenue 27.3% 27.9%
Recurring EBITDA (*) 50 46 -8.0%
% of revenue 6.5% 6.7%
Recurring EBIT (*) 29 26 -10.3%
% of revenue 3.8% 3.8%
Result from operating activities 27 17 -37.0%
Result for the period 2 (6)
(*) before restructuring and non-recurring items.

Mainly due to adverse currency effects, the weak investment climate and the decline of the analog businesses, the Group's revenue decreased by 10.1 percent. Excluding currency effects, the decline amounted to 5.9 percent.

The Group's gross profit margin improved from 27.3 percent in the third quarter of 2012 to 27.9 percent. Part of the improvement is attributable to positive raw material effects in the last month of the quarter.

As a percentage of revenue, Selling and General Administration expenses amounted to 18.6 percent.

Continuing the trend of the previous quarter, R&D expenses were substantially lower than in the third quarter of 2012 as a result of the Group's efforts to improve efficiency and to rationalize its product portfolio.

As a percentage of revenue, recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) improved to 6.7 percent. Recurring EBIT remained stable at 3.8 percent.

Restructuring and non-recurring items resulted in an expense of 9 million Euro, versus an expense of 2 million Euro in the third quarter of 2012.

The net finance costs amounted to 17 million Euro, versus 19 million Euro in 2012.

Tax expenses amounted to 6 million Euro.

The Group posted a net result of minus 6 million Euro, versus a restated (according to IAS 19R) net result of 2 million Euro in the third quarter of 2012.

Financial position and cash flow

  • At the end of the quarter, total assets were 2,641 million Euro, compared to 2,830 million Euro at the end of 2012.

  • Inventories amounted to 597 million Euro (or 102 days). Trade receivables (minus deferred revenue and advanced payments from customers) amounted to 436 million Euro (or 57 days) and trade payables were 230 million Euro, or 39 days.
  • Net financial debt amounted to 261 million Euro, versus 291 million Euro at the end of 2012.
  • Net cash from operating activities amounted to 42 million Euro.

Agfa Graphics - third quarter 2013

Euro millions Q3 2012 Q3 2013 % change
Revenue 417 365 -12.5%
Recurring EBITDA (*) 24.1 23.8 -1.2%
% of revenue 5.8% 6.5%
Recurring EBIT (*) 14.8 14.4 -2.7%
(*) before restructuring and non-recurring items.

Agfa Graphics' revenue decreased by 12.5 percent to 365 million Euro. On a currency comparable basis, the decline amounted to 8.8 percent. In addition to the adverse currency effects, the top line evolution is largely the result of the tough investment climate, the product portfolio rationalization and the decline of the prepress segment's analog computer-to-film (CtF) business. In the corresponding period of 2012, this business' revenue was exceptionally strong. In digital computer-to-plate (CtP), digital printing plate volumes remained stable. However, the business continued to suffer from competitive pressure.
Despite the top line evolution, the industrial inkjet segment confirmed the crossing of the break-even line, resulting in a slightly positive recurring EBIT year-to-date.

As a result of targeted actions, the business group's gross profit margin improved from 24.0 percent in the third quarter of 2012 to 25.8 percent. In the second quarter of 2013, the gross profit margin amounted to 25.5 percent. As a percentage of revenue, recurring EBITDA and recurring EBIT improved to 6.5 percent and 3.9 percent respectively.

In the field of prepress, the European Digital Press Association (EDP) awarded Agfa Graphics' Apogee StoreFront solution as best web-to-print solution at the FESPA trade show in London. EDP counts 20 member magazines, covering 23 European countries.

In the third quarter, Agfa Graphics signed several major contracts for comprehensive prepress solutions, often including platesetters, workflow software, service and printing plates. In the UK, for instance, the DG3 Group signed a contract for an Avalon N8-80XT platesetter and two contract proofing systems, as well as a 5-year agreement for services and Azura chemistry-free printing plates. St Joseph's Printing - Canada's largest privately owned printing company - will start using Agfa Graphics' Energy Elite printing plates. Other important prepress contracts were signed with - among other companies - Print&Display (Poland), Jean Bernard (France), Grafiche Tintoretto (Italy), Amcor Cartons (Australia), Singapore Press Holding, and Grupo Reforma (the largest printed media company in Mexico).

Furthermore, Agfa Graphics continued to expand its customer base in the Japanese market for its Azura chemistry free printing plate technology. New contracts were signed with - among other companies - Beniya Offset and Nikkei Inc.

In the field of industrial inkjet, the installed base for Agfa Graphics' Jeti Titan printer range continued to grow. Among the new customers are Costco (USA), Garth West (UK), Metro ( Poland ), Cogeaf Group (B elgium ), Publitecnia ( Mexico ) and Croma ( Chile ). The French Caractères Enseigne company ordered a Jeti Titan system with 48 print heads, as well as two Anapurna M3200 printers. Companies often cite the combination of excellent print quality and high production speeds as the main reason for their decision to invest in Agfa Graphics' Jeti Titan solution.

In July, Agfa Graphics announced its plans to close down its analog printing plate factory in Manerbio, Italy. The decision is part of the business group's strategy to rationalize its product portfolio and to improve its operational efficiency and its competitive position in the highly competitive prepress market.

Agfa HealthCare - third quarter 2013

Euro millions Q3 2012 Q3 2013 % change
Revenue 297 274 -7.7%
Recurring EBITDA (*) 27.9 23.6 -15.4%
% of revenue 9.4% 8.6%
Recurring EBIT (*) 17.1 13.9 -18.7%
(*) before restructuring and non-recurring items.

Severely impacted by adverse currency effects, Agfa HealthCare's revenue decreased by 7.7 percent. On a currency comparable basis, the decrease is limited to 2.5 percent, completely attributable to the decline of the Imaging segment's traditional X-ray film business. In last year's third quarter, the traditional film business' revenue was exceptionally strong.
The Imaging segment's digital radiography business (consisting of Computed Radiography, Direct Radiography and the hardcopy business) performed well, mainly due to the hardcopy and DR product ranges.
Excluding currency effects, the IT segment's revenue increased slightly, driven by the Imaging IT business, which started to pick up after the rather soft second quarter of the year.

Agfa HealthCare's gross profit margin amounted to 33.6 percent of revenue, versus 35.0 percent in the third quarter of 2012. Profitability was impacted by currency and mix effects. Furthermore, the business group continued to invest in the further improvement of service efficiency. These elements were partially compensated by the business group's targeted actions. Recurring EBITDA reached 23.6 million Euro (or 8.6 percent of revenue) and recurring EBIT amounted to 13.9 million Euro (or 5.1 percent of revenue).

In August, Agfa HealthCare received an award from SERVICE 800's Customer Satisfaction Executive Conference for a consistent commitment to quality customer service proven by regular performance at or above industry benchmark over a ten-year period. SERVICE 800 specializes in measuring service quality and customer satisfaction immediately after service experiences.

In the field of digital radiography, Agfa HealthCare won a tender by the Ministry of Health in Kazakhstan to digitize mammography services in the nation's public hospitals. Under the contract, 63 CR 30-Xm computed radiography (CR) systems will be installed in hospitals around the country. In the UK, Agfa HealthCare successfully installed multiple CR systems at the hospitals of the East Sussex Healthcare NHS Trust. Furthermore, Agfa HealthCare started the delivery of DR systems to the US Navy as part of a five-year contract signed in the first quarter.

In Imaging IT, Agfa HealthCare successfully implemented its latest IMPAX Picture Archiving and Communication System (PACS) and Radiology Information System (RIS) at Isala Clinics, the largest non-university hospital in the Netherlands. Furthermore, the first Imaging Clinical Information System (ICIS) solution in the Netherlands was installed at the Radboud hospital in Nijmegen. ICIS allows clinicians to capture, store, exchange and access imaging information securely and independent of location, on a variety of web-enabled devices.

In Belgium, Agfa HealthCare recently signed IMPAX contracts or contract extensions with several leading hospitals.

In the USA, Southern Regional Medical Center (Riverdale, Georgia) became the first hospital in North America to install Agfa HealthCare's next generation Cardiovascular Information System, IMPAX CV12.

Also in the third quarter, Agfa HealthCare started the roll-out of its new IMPAX Agility imaging platform at multiple hospitals in the USA and Latin America.

In the field of Enterprise IT, Agfa HealthCare's solutions continued their success in the German speaking region of Europe. The DRK hospital group Thüringen-Brandenburg (Germany) contracted Agfa HealthCare to install the ORBIS Hospital Information System in three of its sites. Among the other new ORBIS customers are the Sächsisches Krankenhaus Altscherbitz in Schkeuditz (Germany), the private hospital Meiringen (Switzerland) and the rehabilitation clinic Hasliberg (Switzerland). The university hospital Halle (Saale) (Germany) will install Agfa HealthCare's HYDMedia electronic archiving solution.

In the CHU Toulouse hospital group (France), over 8,000 staff members are currently using ORBIS. The group recently confirmed its decision to roll-out additional Medication and Biology processes throughout the entire organization.

Agfa Specialty Products - third quarter 2013

Euro millions Q3 2012 Q3 2013 % change
Revenue 52 50 -3.8%
Recurring EBITDA (*) (0.7) 0.6


% of revenue (1.3%) 1.2%
Recurring EBIT (*) (2.1) (0.5)
(*) before restructuring and non-recurring items.

Agfa Specialty Products' revenue reached 50 million Euro. The Synaps Synthetic Paper, Orgacon Electronic Materials, Security, printed circuit board and microfilm businesses performed well.

Compared to the third quarter in 2012, Specialty Products' recurring EBIT improved to minus 0.5 million Euro and recurring EBITDA to 0.6 million Euro.

Results after nine months

Agfa-Gevaert Group - year to date

Euro millions 9m 2012 9m 2013 % change
Revenue 2,279 2,126 -6.7%
Gross Profit (*) 643 606 -5.8%
% of revenue 28.2% 28.5%
Recurring EBITDA (*) 146 143 -2.1%
% of revenue 6.4% 6.7%
Recurring EBIT (*) 82 83 1.2%
% of revenue 3.6% 3.9%
Result from operating activities 59 96 62.7%
Result for the period (16) 5
(*) before restructuring and non-recurring items.

Agfa Graphics - year to date

Euro millions 9m 2012 9m 2013 % change
Revenue 1,231 1,116 -9.3%
Recurring EBITDA (*) 63.4 59.3 -6.5%
% of revenue 5.2% 5.3%
Recurring EBIT (*) 34.9 31.5 -9.7%
(*) before restructuring and non-recurring items.

Agfa HealthCare - year to date

Euro millions 9m 2012 9m 2013 % change
Revenue 875 844 -3.5%
Recurring EBITDA (*) 84.0 73.7 -12.3%
% of revenue 9.6% 8.7%
Recurring EBIT (*) 51.9 44.4 -14.5%
(*) before restructuring and non-recurring items.

Agfa Specialty Products - year to date

Euro millions 9m 2012 9m 2013 % change
Revenue 173 166 -4.0%
Recurring EBITDA (*) 2.5 13.6 444.0%
% of revenue 1.4% 8.2%
Recurring EBIT (*) (1.5) 10.4
(*) 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 pdf  (78 KB) for Agfa's consolidated statements.




Viviane Dictus
Director Corporate Communication
Septestraat 27
2640 Mortsel - Belgium
tel+32 (0) 3 444 7124
fax+32 (0) 3 444 4485
viviane.dictus@agfa.com

Johan Jacobs
Corporate Press Relations Manager
Septestraat 27
2640 Mortsel - Belgium
tel+32 (0) 3 444 8015
fax+32 (0) 3 444 4485
johan.jacobs@agfa.com