Agfa-Gevaert Publishes Full Year 2013 Results

Agfa-Gevaert announced its full year 2013 results.  The Group’s full year revenue declined by 7.3% to €2,865 million On a currency comparable basis, the decline amounted to 4.8%. The top line evolution is mainly due to strong currency effects, the weak investment climate, the product portfolio rationalization and the decline of the analog businesses. In 2012, the analog businesses recovered from a very slow 2011.

Benefiting from efficiency programs in the business groups and positive raw material effects towards the end of the year, the Group’s gross profit margin improved by one percentage point to 29.1% of revenue.

“Once again, the economic environment was difficult in 2013,” said Christian Reinaudo, president and CEO of the Agfa-Gevaert Group.”The exchange rates between the euro and most other currencies were unfavorable to Agfa. In some emerging markets, GDP growth somewhat slowed down. Furthermore, sales of our analog businesses declined strongly versus a very solid year 2012, when these businesses recovered from the silver crisis of 2011. In these conditions, we chose to focus our efforts on improving our operational efficiency and our balance sheet.

“We succeeded in increasing our gross profit margin throughout the year,” Reinaudo  added. “The strong improvement in the fourth quarter shows that we are on the right track to achieve one of our main goals: to restore our gross profit margin to a level in line with our recurring EBITDA target. The IT and Direct Radiography growth engines of Agfa HealthCare performed well and in line with expectations.

“In Agfa Graphics, our Inkjet business not only reached its target of crossing the break-even line during the year,” Reinaudo  noted. “For the first time ever, it even delivered a slightly positive full year recurring EBIT. This result shows that rationalizing the product portfolio was the right decision. As far as the balance sheet is concerned, we managed to significantly reduce our working capital and to deliver a strong operational cash flow, which resulted in a healthy reduction of our net financial debt. Due to targeted benefit reduction programs, we also reduced our pension liabilities. In 2014, we aim at making good progress towards our medium term target of delivering a double digit recurring EBITDA percentage. In that respect, our fourth quarter results are very encouraging.”  

Agfa Graphics’ revenue decreased by 9.7% to €1,491 million. The top line evolution reflects the decline of the prepress segment’s analog computer-to-film (CtF) business, the tough economic conditions and the product portfolio rationalization. In 2012, the CtF business’ revenue was exceptionally strong. In digital computer-to-plate (CtP), digital printing plate volumes increased slightly. However, the business suffered from adverse price effects.

The industrial inkjet segment’s top line was influenced by the product portfolio rationalization and the weak investment climate. In this tough economic context, Agfa Graphics was able to strengthen its global market position for wide format inkjet printers. Also in inkjet, the number of system integrators, OEM customers and other manufacturing specialists that use Agfa Graphics’ inks for industrial printing applications grew in 2013.

As a result of efficiency programs and product rationalization measures, Agfa Graphics’ gross profit margin improved substantially from 24.7% in 2012 to 26.2%. This evolution also reflects the positive effects of the lower raw material prices. These effects started to become more visible towards the end of the year. Recurring EBITDA improved to €97.9 million (6.6% of revenue) and recurring EBIT grew by 14.3% to €60.7 million (4.1% of revenue). Despite the top line evolution, the industrial inkjet segment crossed the break-even line in the course of 2013 and even achieved a positive full year recurring EBIT.

Agfa Specialty Products’ revenue of €214 million in 2013 decreased by 5.7% due to lower silver prices. The printed circuit board film business’ revenue continued to grow. The Synaps Synthetic Paper and Orgacon Electronic Materials businesses grew steadily. Recurring EBITDA and recurring EBIT improved strongly to €14.5 million and €10.2 million, respectively.