Agfa Gevaert : PDF - EN

Agfa-Gevaert Annual Report 2024

Non-IFRS financial measures

In this report, all non-IFRS financial measures (APMs) are displayed in italic.

The list of APM definitions is included on page 304 and can be found on the Agfa website via www.agfa.com/corporate/definitions-of-non-ifrs-financial-measures-apms.

In note 6 "Alternative Performance Measures" of the Financial Statements on page 104 to 108, reconciliations with IFRS information can be found.

Official version

The official version of the annual report is the ESEF version. This version can be found on www.agfa.com/corporate/investor-relations/reports-and-presentations/annual%20reports/

Table of contents

ANNUAL REPORT FROM THE BOARD OF DIRECTORS TO THE SHAREHOLDERS OF AGFA-GEVAERT NV

STRATEGIC REPORT

1. Letter to the shareholders

1. Key figures 2024

1. Company profile

1. Agfa in the world

1. Highlights 2024

1. Comments on the Consolidated Financial Statements

1. Business activities in 2024

1. HealthCare IT

1. Digital Print & Chemicals

1. Radiology Solutions

CORPORATE GOVERNANCE, RISKS & REMUNERATION

59 Corporate Governance Statement

1. Risk Management & Internal Controls

1. Remuneration Report

FINANCIAL STATEMENTS

1. Financial Report Table of Contents

1. Consolidated Financial Statements

1. Notes to the Consolidated Financial Statements

1. Statutory Auditor's Report

1. Statutory Accounts

SUSTAINABILITY STATEMENT

221 General Information

1. Environmental Information

1. Social Information

1. Governance Information

1. Statutory Auditor's Report

CONSOLIDATED INFORMATION

306 Consolidated tables 2020-2024

ADDITIONAL INFORMATION

1. Definitions of non-IFRS financial measures (APMs)

1. Shareholder Information

3

Pascal Juéry

CEO

Dear shareholder,

2024 was an important year in the transformation journey of our company. Indeed, we are very pleased with the strategic progress we have made with our future-oriented businesses.

Each in their own way, our growth engines have reached major milestones in their development. The HealthCare IT division has transformed itself into a cloud company after the first successful implementation of its cloud-based Enterprise Imaging platform. Based on crucial strategic decisions, Digital Printing Solutions and Green Hydrogen Solutions boasted strong top line and profitability improvements.

Frank Aranzana

Chairman of the Board of Directors

But of course it wasn't all good news in 2024. The accelerated decline of the traditional film markets affected volumes of our medical film and other film products, which largely explains the Group's top and bottom line performance in 2024. In response to the evolution of the traditional film markets, we initiated a plan to thoroughly reorganize all aspects of our film-related activities.

We explicitly wish to express how proud we are of all our teams around the world. In these complex business conditions and often adverse geopolitical and macroeconomic circumstances, they continue to make unyielding efforts to make our transformation a success.

4	LETTER TO THE SHAREHOLDERS

Our three main growth drivers showed a strong acceleration of profitable growth, powering the Group in top line and profitability.

Shaping the company for future growth

And a success, it will be. Although we expect that 2025 will still be a transition year, the strategic decisions we have taken in recent years and the steps that still need to be taken, will ultimately allow us to create a future of profitable growth for the Agfa-Gevaert Group.

Allow us to elaborate on the major milestones we have already reached, as well as on the path forward. In no more than five years' time, our HealthCare

IT division has achieved a remarkable turnaround, enabling it to make strong positive contributions to the Group's profitability. As we have successfully completed the implementation of the first cloud-based Enterprise Imaging platform in the US, we have established ourselves as a strong player in this segment of the healthcare IT industry. Based on this technology step-up, we built strong momentum for this business in the past year as we recorded a 32% increase in the full year order intake, mainly based on net new customer contracts. Although it will take some time before this momentum translates in our results, we can be proud of having tremendously improved the value of this business.

In recent years, we also significantly strengthened our Digital Printing Solutions business, also through the acquisition of Inca Digital Printers in 2022. Last year, we grew to critical mass also helped by the global strategic partnership between Agfa and EFI for digital printing equipment. We took additional strides by introducing several groundbreaking

solutions and by entering the packaging market with our disruptive high-speed SpeedSet Orca 1060 printer. In 2024, the business grew stronger than the Sign & Display market and achieved all-time high revenue and profitability growth. In the coming years, we expect a further strong increase in profita- bility, partly based on increased sales volumes of our various ranges of high-quality inks.

In the field of Green Hydrogen Solutions, our ZIRFON business has evolved from an R&D project to an essential part of our growth strategy. In five years' time, Green Hydrogen Solutions has become the most profitable business unit of our Group. Our ZIRFON membrane for green hydrogen production is largely recognized as the standard in the market. In 2024, we have successfully scaled up our ZIRFON production capacity and towards the end of this year, we will take a brand new production unit into opera- tion. Even in the current somewhat subdued market, we expect the momentum for Green Hydrogen Solutions to continue in 2025.

Recently, we reached an agreement with our social partners in Belgium on our plan to optimize the cost base of our traditional film activities, aligning them with market realities. This self-funding program aims to reduce costs by 50 million euro by the end of 2027, with initial savings expected in the second half of 2025. The plan will impact 470 employees in Belgium.

AGFA-GEVAERT ANNUAL REPORT 2024

5

Growing sustainably

In 2024, we continued to strengthen our commitment to sustainability, driving long-term value creation across all Environmental, Social, and Governance (ESG) dimensions.

Our climate action efforts have been significant, highlighted by the completion of a comprehensive climate risk assessment and the installation of the first energy assets as part of our reinvestment plan, setting the stage for substantial carbon reductions. Alongside these actions, we remained dedicated to minimizing resource use across all aspects

of our operations. As we advance our business growth strategy, ESG considerations are becoming increasingly embedded in our business models and processes. Engaging actively with our diverse and resilient workforce, as well as our stakeholders, has been key to listening to their perspectives and informing our decisions.

This year was also marked by the preparation of our first sustainability statement following the implementation of the Corporate Sustainability Reporting Directive (CSRD), which involved extensive collaboration across multiple teams within the organization. While challenging, the effort reflects our ongoing commitment to enhancing ESG governance and responding to the growing demand for transparency and accountability in corporate sustainability.

Financial results for the Agfa-Gevaert Group in 2024

With a record fourth quarter, the Digital Printing Solutions and Green Hydrogen Solutions activities both reported strong full year top line growth and a step up in profitability. Despite strong top line growth in the fourth quarter, the HealthCare IT division's full year sales were lower due to the market transition to cloud technology. However, Health- Care IT ended the year with a record 32% increase in order intake. The traditional film activities were under pressure from the declining medical film markets. As a result, our Group's full year revenue is 1.1% below that of 2023.

Mainly driven by the growth engines and in spite of the lower fixed cost coverage in the traditional film activities, our Group's gross profit margin remained stable at 31.2% of revenue. Adjusted EBITDA amounted to 70 million euro, versus 76 million euro in 2023. The very strong performance of the growth engines, which improved quarter- over-quarter, was counterbalanced by the effects of the market decline for the traditional film activities.

We recorded high restructuring expenses related to the film manufacturing reorganization program and the closure of a site in Germany, as well as considerable adjustments related to the impairment in Radiology Solutions. We booked a net loss of

92 million euro.

Sustainability is our guiding star for everything we do. It defines how we develop and sell our products and interact with our stakeholders.

6	LETTER TO THE SHAREHOLDERS

In spite of a strong positive free cash flow in Q4	What's on the horizon for 2025
(35 million euro), the full year free cash flow was
minus 46 million euro, versus minus 48 million euro	We expect that the growth engines will con-
at the end of 2023. The negative free cash flow was	tinue to perform strongly in 2025. As usual,
mainly driven by the strategic transformation of the	due to seasonality reasons, a slower start of
Group. There was an additional capex investment	the year is expected, followed by a stronger
for growth as well as restructuring related cash outs.	second half. Please note that this outlook is
In addition, there was an increase in net working	based on the current economic environment.
capital and there was the expected pension-related	For our HealthCare IT division, we expect
cash out.	the good order intake momentum to con-
Regarding pension liabilities, the funded status	tinue. Taking into account the ongoing tran-
of the four material countries (Belgium, Germany,	sition to cloud technology and subscription
UK and USA) excluding Belgian DC-plans evolved	model, the division's performance is expected
in 2024 from minus 439 million euro to minus	to be roughly in line with that of last year.
388 million euro. The improvement of 51 million	The Digital Print & Chemicals division is
euro versus 2023 was mainly due to the fact that	expected to grow significantly in top line and
the employer contributions in Belgium and the	profitability, driven by Digital Printing Solu-
benefit payments in Germany were higher than the	tions and Green Hydrogen Solutions.
defined benefit cost. For 2025, the net interest cost	For the Radiology Solutions division, we
will decrease by 1 million euro to 13 million euro	expect a stable performance, with continued
due to a lower discount rate and a lower defined	progress in Direct Radiography and contin-
benefit obligation in the Eurozone. The service cost	ued pressure on the medical film business.
will decrease by 2 million euro to 9 million euro	We would like to end this message by
because of a decreased membership in Belgium and	thanking our customers and channel partners
Germany. The total cash out for 2025 is expected to	for the trust they placed in our company. The
decrease versus 2024 by 3 million euro to 48 million	large amount of recent product launches and
euro due to less contributions (Belgium).	our stable R&D spendings clearly show that we
	are determined to continue supporting them
	with advanced, qualitative and reliable prod-
	ucts and services. We would also like to thank
	our people for their loyalty and dedication,
	even in complex and challenging conditions.
	They are crucial for the success of our trans-
	formation efforts and for the future success
	of our businesses. And of course, we are also
	extremely grateful to you, our shareholders,
	for your continued support and confidence
	over the past year.

AGFA-GEVAERT ANNUAL REPORT 2024

7

The images throughout this Annual Report showcase Agfa's solutions, which empower its customers and their communities with a shared purpose: driving positive change for a greener, healthier, and brighter future.

8

Key figures

MILLION EURO	2020	2021	2022 (1)	2023	2024
Re-presented
PROFIT OR LOSS
Revenue	1,709	1,760	1,145	1,150	1.138
Change vs. previous year	-13.5%	2.9%	-	0.5%	-1.1%
HealthCare IT	230	219	244	249	242
Share of group sales	14%	12%	21%	22%	21%
Digital Print & Chemicals	289	330	372	409	438
Share of group sales	17%	19%	33%	35%	38%
Radiology Solutions	485	464	461	425	383
Share of group sales	28%	26%	40%	37%	34%
Offset Solutions	704	748	-	-	-
Share of group sales	41%	43%	-	-	-
CONOPS	-	-	68	68	75
Share of Group sales	-	-	6%	6%	7%
Gross profit	494	497	345	359	353
Results from operating activities	(52)	9	(139)	(8)	(48)
Net finance costs	(31)	(8)	(18)	(26)	(27)
Income tax expense	(15)	(15)	(29)	(16)	(15)
Profit (loss) for the period	621	(14)	(223)	(101)	(92)
Attributable to owners of the Company	613	(17)	(221)	(102)	(92)
Attributable to non-controlling interests	7	4	(2)	1	-
Adjustments and restructuring expenses	88	33	(138)	(39)	(75)
Adjusted EBIT	36	42	(1)	31	27
Adjusted EBITDA	99	104	50	76	70
CASH FLOW
Net cash from (used in) operating activities	(153)	(116)	(100)	(30)	(4)
Capital expenditures	(33)	(26)	(33)	(34)	(45)
STATEMENT OF FINANCIAL POSITION - DECEMBER 31
Equity	620	685	561	396	324
Current assets minus current liabilities	952	742	568	404	397
Total assets	2,204	2,095	1,756	1,368	1,377
Net financial debt	(581)	(396)	(134)	(37)	37
(excl. IFRS16 and excl. pension debt)
Lease liabilities	79	70	62	43	50
Net financial debt	(502)	(325)	(72)	6	87
(incl. IFRS 16 and excl. pension debt)
Liabilitites for post-employment and					405
long-term termination benefit plans -	956	695	518	457
net balance sheet position
Net debt	454	370	446	463	492
SHARE INFORMATION (EURO)
Earnings (loss) per share	3.66	(0.11)	(1.41)	(0.66)	(0.59)
Operating cash flow per share	(0.81)	(0.65)	(0.55)	(0.18)	0.00
Gross dividend	-	-	-	-	-
Number of outstanding ordinary shares	167,751,190	160,438,653	154,820,528	154,820,528	154,820,528
with voting rights at year-end
Weighted average number of	167,751,190	165,003,570	156,236,319	154,820,528	154,820,528
ordinary shares
EMPLOYEES (AT YEAR END)
Full time equivalent permanent (active)	7,337	6,993	4,983	4,847	4,586

1. Compliant with IFRS 5.33, the Company has presented in its Consolidated Statement of Profit or Loss and Comprehensive Income, a single amount comprising the total of the post-tax profit (loss) of discontinued operations and the post-tax profit (loss) on the disposal of net assets constituting the discontinued operations. The Group has sold its Offset Solutions business in April, 2023. Comparative information has been re-presented.

AGFA-GEVAERT ANNUAL REPORT 2024

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"Here at Agfa, we're committed to making a positive difference in the lives of our customers, end-users, patients and the planet as a whole. Our innovative, customer-centric approach to digital information systems and imaging, spanning markets as diverse as healthcare, graphics, the industrial specialty sector and energy transition, has been built on nearly 160 of world-class expertise. We are committed to answering the needs of today's customer while innovating for tomorrow's world in a responsible, transparent and sustainable way."

- Pascal Juéry, CEO of the Agfa-Gevaert Group

10	COMPANY PROFILE