Agfa-Gevaert : in Q3 2020, full COVID-19 impact on offset printing business confirmed strong profitability in Imaging IT regulated information
November 16, 2020 at 09:34 am EST
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Belgium - Agfa-Gevaert today commented on its results in the third quarter of 2020.
'Considering these uncertain times, our Imaging IT growth engine continued to perform well, with significant improvement in profitability. The Digital Print & Chemicals division was able to keep its EBITDA in line with last year, in spite of the strong COVID-19 impact on its top line. The Group's profitability was affected by the ongoing issues in the offset printing industry, which accelerated due to the COVID-19 pandemic. We are taking the necessary steps to secure our position in this industry and to restore profitability. In the third quarter, we reached an agreement with our social partners regarding the closure of our printing plate factories in Pont-a-Marcq and Leeds, effective before the end of the year. Furthermore, we also see a COVID-19 related impact on the volume of our highly profitable medical film business. However, in the course of the quarter, most of our activities started to improve gradually, and - although we remain cautious - we believe that the fourth quarter will show further improvement,' said Pascal Juery, President and CEO of the Agfa-Gevaert Group.
Pension de-risking measures
As mentioned previously, Agfa plans to spend about 350 million Euro of the proceeds of the sale of part of the HealthCare IT activities to increase the funding ratio of the funded pension plans in Belgium, the UK and the USA, as well as to implement pension de-risking actions. Agfa is well on track with this plan. On top of the 40 million Euro already spent in the second quarter (for Belgium), the company invested about 110 million Euro in the plans in the UK and the USA in the third quarter. De-risking actions are ongoing in the fourth quarter. Before the end of the year, the total amount spent will be close to 250 million Euro.
Statement on re-presented profit and loss numbers
As from 2019, the Agfa-Gevaert Group has adopted the IFRS 16 accounting rules.
In August 2019, the Group terminated its inkjet media reseller activities in the USA. To allow correct comparison, the Q3 2019 and year-to-date numbers have been re-presented. In May 2020, the Group closed the sale of part of its HealthCare IT activities. The Q3 and year-to-date numbers of 2019 and 2020 have been re-presented.
Agfa-Gevaert NV is one of the world leaders in the design, manufacturing, and marketing of imaging systems and products. Net sales break down by sector of activity as follows:
- Radiology solutions (36.9%). Agfa-Gevaert NV supplies radiology departments of hospitals all over the world with traditional X-ray film, hardcopy film and printers, digital radiography equipment and image processing software. Agfa's roots are in traditional medical imaging, but in today's healthcare market, digital radiography has become the dominant technology. All Agfa's digital radiography systems are offered with the company's leading MUSICA image processing software and its MUSICA workstation for image identification, acquisition and quality control;
- Digital Print & Chemicals (35.6%). Agfa-Gevaert NV supplies sign & display printing companies with a range of highly productive and versatile wide-format inkjet printers and dedicated inks, in addition to workflow software, cutting machines and inkjet media. Agfa produces classic film-based products, such as film for non-destructive testing and aerial photography, as well as microfilm and film for the production of printed circuit boards;
- HealthCare IT (21.6%). Agfa-Gevaert NV offers Imaging IT Solutions (The Enterprise Imaging platform creates a true imaging record for every patient, containing all possible images of the patient, regardless of the department and the facility that created them), Hospital IT Solutions (the leading Hospital Information System /Clinical Information System ORBIS, connects medical departments and administrative departments of hospitals into one virtual network), and Integrated Care Solutions (these solutions support collaboration across the borders of care organizations and medical disciplines and enable hospitals to actively engage with all stakeholders in the expanded care process, including physicians, informal care-givers and patients) ;
- Offset solutions (5.9%). Agfa-Gevaert NV is a leading supplier to the printing industry, offering innovative and reliable solutions. Commercial, newspaper and packaging printers around the globe rely on Agfa for the most extensive range of integrated solutions, from computer-to-plate systems with digital offset plates over color management and workflow optimization software to pressroom chemicals.