Agfa-Gevaert Publishes 3Q 2014 Results

Agfa-Gevaert announced its third quarter 2014 results. The Agfa-Gevaert Group’s third quarter revenue declined by 7.7%. Like in the previous quarters, the Group’s top line suffered from the overall economic weakness and the unstable political situation in certain regions. The uncertain investment climate in the U.S. healthcare sector continued to weigh on the Agfa HealthCare business group’s revenue.
 
The success of its efficiency programs and positive raw material effects allowed the Group to improve its gross profit margin by almost 3 percentage points to 30.8% of revenue.
 
“Quarter after quarter, we continue to improve the efficiency of our operations and to increase our gross profit margin,” said Christian Reinaudo, president and CEO of the Agfa-Gevaert Group. “In spite of the weak global economy, the rigorous management of our operational costs brings us closer to our short-term target of reaching a 10% recurring EBITDA percentage. Our top line decline is the result of the soft investment climate in mature markets, while our traditional consumable business suffers from the lower growth rates in most of the emerging markets. The measures we recently took to address our restructuring costs clearly help to deliver a sustained positive net result. Finally, our working capital management adds to the delivery of a positive net operating cash flow. We are confident that the adaptation of our product portfolio to the new economic situation will allow us to even better cater to the needs of our customers in the near future. This should enable us to limit the erosion of our top line in the quarters to come.”
 
Agfa Graphics’ revenue decreased by 10.1% to €328 million. The overall economic weakness weighed on the business group’s top line. In the prepress segment, the analog business continued to decline strongly, while the digital computer-to-plate (CtP) business suffered from competitive pressure. Although to a lesser extent than the prepress segment, the inkjet segment also suffered from the global weak economy.
 
Due to the success of targeted projects to improve efficiency and positive raw material effects, Agfa Graphics’ gross profit margin improved from 25.8% in the third quarter of 2013 to 28.4%. Recurring EBITDA reached €22.1 million (6.7% of revenue). Recurring EBIT amounted to €14.7 million (4.5% of revenue).
 
Mainly due to the lower silver price, Agfa Specialty Products’ revenue decreased to €49 million. Agfa Specialty Products’ future-oriented businesses (mainly Security, Synaps Synthetic Paper and Orgacon Electronic Materials), as well as the Printed Circuit Board business performed well. The business group’s recurring EBITDA amounted to €3.4 million (6.9% of revenue) and recurring EBIT to €2.4 million (4.9% of revenue).