• Adjusted EBITDA at 17 million Euro: year-over-year and quarter-over-quarter improvement driven by the growth engines

• Positive free cash flow of 5 million Euro

• Net result at minus 15 million Euro

“I am pleased to see that all growth engines performed well, even in the face of challenging economic and geopolitical conditions as well as adverse currency effects. We considerably improved the profitability of the Digital Print activities and the HealthCare IT division. Sales for our ZIRFON membranes for green hydrogen production continued to grow strongly and this business also started to contribute to profitability. On the back of good operational performance, we have returned to a positive free cash flow in the third quarter,” said Pascal Juéry, President and CEO of the Agfa-Gevaert Group.

Reporting post Offset Solutions

The recent sale of the Offset Solutions division (now rebranded to ECO3) influences the way the Agfa-Gevaert Group reports its results. The numbers from sales to EBITDA present the Agfa-Gevaert Group with Offset Solutions excluded, but with a new division called ‘Contractor Operations & Services former Offset’ or ‘CONOPS’. CONOPS represents the supply of film and chemicals as well as a set of support services delivered by Agfa to the external party ECO3. The turnover represents the supply agreements, with corresponding COGS charges. The income related to the support services will be accounted for as Other Income, while the costs related to those support services are re-presented in the different SG&A lines. The comparative period Q3 ‘22 has been re-presented accordingly. As per IFRS 5, stranded costs related to Offset Solutions have been treated differently in 2023 vs 2022. In Q3 ’22, stranded costs are reported under CONOPS. In Q3 ‘23 these are absorbed by the three business divisions.

 

in million Euro	Q3 2023	Q3 2022 re-presented	% change (excl. FX effects)	9M 2023	9M 2022 re-presented	% change (excl. FX effects)
REVENUE
HealthCare IT	60	62	-2.2% (3.3%)	180	174	3.4% (5.8%)
Radiology Solutions	103	117	-11.6% (-5.7%)	309	331	-6.7% (-3.3%)
Digital Print & Chemicals	99	96	3.4% (6.8%)	300	273	9.7% (11.7%)
Contractor Operations and Services – former Offset	18	16	11.1% (11.9%)	49	52	-4.6% (-4.5%)
GROUP	280	290	-3.4% (1.3%)	837	829	1.0% (3.5%)
ADJUSTED EBITDA (*)
HealthCare IT	8.5	5.9	44.3%	15.7	15.8	-0.4%
Radiology Solutions	7.2	9.1	-21.2%	23.5	28.3	-16.8%
Digital Print & Chemicals	4.3	0.0		13.5	8.3	63.0%
Contractor Operations and Services – former Offset	(0.2)	(3.3)		1.4	(7.2)
Unallocated	(2.6)	(4.6)		(10.5)	(13.7)
GROUP	17	7	142.4%	44	32	38.2%

 

(*)     before restructuring and non-recurring items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in million Euro	Q3 2023	Q3 2022 re-presented	% change (excl. FX effects)	9M 2023	9M 2022 re-presented	% change (excl. FX effects)
Revenue	280	290	-3.4% (1.3%)	837	829	1.0% (3.5%)
Gross profit (*)	85	85	0.5%	259	252	2.8%
% of revenue	30.5%	29.3%		30.9%	30.4%
Adjusted EBITDA (*)	17	7	142.4%	44	32	38.2%
% of revenue	6.1%	2.4%		5.2%	3.8%
Adjusted EBIT (*)	6	(6)		10	(6)
% of revenue	2.1%	-2.1%		1.2%	-0.7%
Net result	(15)	(17)		(96)	(37)
Profit from continuing operations	(12)	(28)		(49)	(60)
Profit from discontinued operations	(3)	11		(47)	23

(*) before restructuring and non-recurring items

Third quarter

• Excluding currency effects, the Agfa-Gevaert Group’s revenue increased by 1.3% versus the third quarter of 2022, driven by the HealthCare IT division, ZIRFON membranes for green hydrogen production and the good performance of the ink product lines in the Digital Print & Chemicals division. Traditional film activities were under pressure from challenging economic conditions (including adverse currency effects and the weakening economy in China) and the current geopolitical circumstances.

• Driven by the HealthCare IT and Digital Print & Chemicals divisions, the Group’s gross profit margin improved to 30.5%, in spite of adverse effects including cost inflation, adverse currency effects, manufacturing inefficiencies and the weakness in the industrial film markets.

• Adjusted EBITDA improved strongly from 7 million Euro to 17 million Euro (6.1% of revenue).

• Restructuring and non-recurring items resulted in a charge of 5 million Euro versus 12 million Euro in Q3 2022.

• The net finance costs amounted to 7 million Euro.

• Income tax expenses increased to 6 million Euro versus 5 million Euro in Q3 2022.

• The Agfa-Gevaert Group posted a net loss of 15 million Euro.

Financial position and cash flow

• Net financial debt (including IFRS 16) remained stable versus Q2 2023 at 33 million Euro.

• Trade working capital (CONOPS excluded) evolved from 35% of turnover at the end of Q3 2022 to 31% in Q3 2023. In absolute numbers, trade working capital evolved from 370 million Euro at the end of Q3 2022 to 341 million Euro.

• In Q3 2023, the Group generated a free cash flow of 5 million Euro.

Digital Print & Chemicals

in million Euro	Q3 2023	Q3 2022 re-presented	% change (excl. FX effects)	9M 2023	9M 2022 re-presented	% change (excl. FX effects)
Revenue	99	96	3.4% (6.8%)	300	273	9.7% (11.7%)
Adjusted EBITDA (*)	4.3	0.0		13.5	8.3	63.0%
% of revenue	4.3%	0.0%		4.5%	3.0%
Adjusted EBIT (*)	0.2	(3.6)		1.5	(0.8)
% of revenue	0.2%	-3.7%		0.5%	-0.3%

(*) before restructuring and non-recurring items

Third quarter

• In Digital Print, the ink product ranges for sign & display and industrial applications as well as the high end equipment business continued to perform strongly, but the top line was impacted by the fact that print companies started to postpone investments in lower and mid end equipment due to the adverse macroeconomic conditions and in anticipation of the introduction of new technologies. Agfa expects equipment sales to recover towards the end of the year. Agfa is on track with the conversion of printers of the acquired Inca company to its own ink sets.

• The development of the SpeedSet 1060 single-pass packaging printer is proceeding as planned, with a customer unveiling in December 2023. The beta launch of this digital press with water based inks – which will be the fastest printer in its category – will happen as planned in 2024 and the full commercial launch is planned for 2025. In the third quarter, four of Agfa’s inkjet printing solutions have been honored with a Pinnacle Product Award from PRINTING United Alliance. The Pinnacle Product Awards recognize outstanding products that drive advancements in quality, capability and productivity within the printing industry. PRINTING United Alliance is the most comprehensive member-based printing and graphic arts association in the United States.

• Sales figures for the ZIRFON membranes for advanced alkaline electrolysis continued to grow strongly. Agfa is improving the profitability of the business through measures to increase manufacturing efficiency and price increases. As a result, the business started to contribute to the division’s profitability.

 

January 1, 2024 Agfa will be joining the Hydrogen Council, a global initiative that brings together preeminent companies with a united vision to help foster the hydrogen clean energy transition.

Earlier this year, Agfa’s project to build a new industrial unit for ZIRFON membranes at its Mortsel site in Belgium was selected for an EU Innovation Fund Grant. The preparation of the grant agreement is proceeding according to plan. The signing of the grant agreement is expected to take place towards the end of the year. The new plant will allow the Group to meet the booming customer demand.

 

• The weakness in the electronics industry continued to impact volumes of the ORGACON conductive materials and the products for the production of printed circuit boards.

• Price increase actions and cost improvements to mitigate cost inflation impacts started to bear fruit. The gross profit margin improved from 25.6% of revenue in Q3 2022 to 27.7%.