Agfa-Gevaert Publishes 1Q 2014 Results

Agfa-Gevaert announced its first quarter 2014 results. The Agfa-Gevaert Group’s first quarter revenue declined by 11.8% to €622 million. The top line was also impacted by the rather weak performance in most of the emerging markets and by the product portfolio rationalization in Agfa Graphics. While Agfa HealthCare’s Direct Radiography and Enterprise IT businesses performed well, the Imaging IT activities suffered from the uncertain investment climate in the US healthcare sector.

In spite of the strike, the Group’s gross profit margin improved from 28.8% in the first quarter of 2013 to 29.3%. The main drivers behind the improvement were the targeted efficiency programs and positive raw material effects.

“Currency effects and the weakness in most of the emerging markets had a strong negative impact on our first quarter revenue, in particular for our traditional businesses which are more exposed to these markets,” said Christian Reinaudo, president and CEO of the Agfa-Gevaert Group. “Despite the negative effects of the strike at our Belgian manufacturing sites, we succeeded in improving our gross profit margin. Benefiting from our efficiency programs and our previously announced restructuring efforts, we achieved a positive net result. Being a major focus point, cash flow generation was strong due to our working capital management program. As a result, we further reduced our net financial debt.

“We believe the first half of the year 2014 will continue to show a soft business environment, but we will continue to improve our gross profit margin and we will continue to focus on cash flow generation,” Reinaudo  added. “We stick to our medium term target of delivering a double digit recurring EBITDA percentage.”

Agfa Graphics’ revenue decreased by 11.9% to €327 million.  The weak performance in most of the emerging markets weighed on the business group’s top line. The revenue evolution also reflects the product portfolio rationalization, in particular for the traditional businesses. In the prepress segment, the digital computer-to-plate (CtP) business continued to suffer from competitive pressure.

The industrial inkjet segment’s top line was influenced by the weak investment climate and the product portfolio rationalization. In spite of the impact of the strike, Agfa Graphics’ gross profit margin improved from 25.1% in the first quarter of 2013 to 27.5%.

Mainly due to the lower silver price, Agfa Specialty Products’ revenue decreased to €51 million. Together with the Printed Circuit Board business, Agfa Specialty Products’ future-oriented businesses (mainly Synaps Synthetic Paper, Orgacon Electronic Materials and Security) performed well. The business group’s recurring EBITDA declined year-on-year to €1.8 million.