Agfa results Q3 2024

AGFA has posted double-digit revenue growth and a strong profitability step up in Digital Printing and Chemicals, and a significant increase in order intake in HealthCare IT, with a high share of cloud-based and net new customer contracts. This was counterbalanced by an accelerated market decline in traditional film activities. The 50 million euro savings program to align the cost base with the accelerated market decline of the film-related business is in full preparation. Savings will start to materialise in the second half of 2025, with the full potential to be realised in 2027.

• HealthCare IT: good traction in transitioning to cloud-enabled Enterprise Imaging
  • 23% increase in the 12 months rolling order intake versus the year before, 45% cloud-related contracts in Q3, 57% net new customer contracts in Q3
  • On track with transition to cloud technology
  • First go-live of cloud-based Enterprise Imaging platform
• Digital Print & Chemicals: growth engines power profitability
  • Continuous double-digit top line growth, driven by Green Hydrogen Solutions and Digital Printing Solutions
  • Adjusted EBITDA doubled versus third quarter of 2023, reaching 8% of revenue
  • First SpeedSet Orca 1060 packaging printer at customer site in the UK up and running
• Radiology Solutions: acceleration of global market decline for medical film
  • Medical film: volumes followed accelerated decline of the market
  • Direct Radiography realised 9% top line increase, partly driven by pick-up in North America

Agfa commented on its results in the third quarter of 2024. 
“I am pleased with the evolution of our growth engines. The Digital Print & Chemicals division reported double-digit top line growth and doubled its adjusted EBITDA, driven by Digital Print Solutions and Green Hydrogen Solutions. HealthCare IT’s order intake is growing strongly, powered by our cloud solutions attracting net new customers. Our first go-live of our cloud-based Enterprise Imaging platform was a full success, demonstrating the robustness of our solutions. Having a reference site will add to the momentum we are seeing for this technology. Finally, the plan to adjust the cost base of our traditional film activities to the reality in the market is on track. We expect that this self-funding program will allow us to reduce the cost base of these activities by 50 million euro by the end of 2027. The first savings will start to materialise in the second half of 2025,” said Pascal Juéry, President and CEO of the Agfa-Gevaert Group.

(*)         Adjusted EBIT/EBITDA with the deduction of adjustments and restructuring expenses reconciles to ‘Results from operating activities’(EBIT)/EBITDA

Agfa-Gevaert Group 

(*)         before adjustments and restructuring expenses 
(**)         Adjusted EBIT/EBITDA with the deduction of adjustments and restructuring expenses reconciles to ‘Results from operating activities’(EBIT)/EBITDA

Third quarter

• Compared to the third quarter of 2023, the Group’s revenue remained stable, with a markedly strong performance of Digital Printing Solutions and Green Hydrogen Solutions. As expected, HealthCare IT reported lower sales due to the market transition to cloud technology. The traditional film activities were under pressure from the declining medical film markets.
• Mainly due to the lower fixed cost coverage in the traditional film activities, the Group’s gross profit margin decreased slightly to 29.5% of revenue.
• Adjusted EBITDA evolved to 15 million euro (5.5% of revenue).
• Adjustments and restructuring expenses resulted in a charge of 3 million euro versus 5 million euro in the third quarter of 2023.
• The net finance costs amounted to 7 million euro.
• Income tax expenses were at 7 million euro versus 6 million euro in the previous year.
• The Agfa-Gevaert Group posted a net loss of 13 million euro.

Financial position and cash flow

• Net financial debt (including IFRS 16) evolved from 99 million euro in Q2 2024 to 118 million euro.
• Despite 15 million euro impact from freight issues in the Middle East and the higher silver price, working capital remained stable at 33% of revenue in Q3 2024, in line with the seasonality of the business. In absolute numbers, working capital evolved from 371 million euro at the end of Q3 2023 to 374 million euro. Following the seasonality, working capital is expected to trend down in the fourth quarter.
• In the third quarter of 2024, the Group generated a free cash flow of minus 6 million euro.