Agfa-Gevaert publishes its full year 2017 results - Regulated information - March 7, 2018 - 7:45 a.m. CET
· Good performance of most of the growth engines
· Strong fourth quarter performance of Agfa HealthCare
· Recurring EBITDA impacted by growth initiatives and adverse raw material effects
· Net result negatively impacted by a one-off tax expense of 25 million Euro related to changes in tax regulation
· Net financial debt at 18 million Euro
Mortsel (Belgium), March 7, 2018 - Agfa-Gevaert today announced its full year 2017 results.
"2017 has been the first year of a two-year transition period. Having overachieved on our profitability targets in 2016, we have taken a number of initiatives to prepare the Group for future growth by addressing the complexity of the company and the top line decline. Firstly, we started preparations to reorganize our HealthCare IT activities into a stand-alone legal entity structure within the Group. I am convinced that - when completed - the project will allow both the HealthCare IT activities and the remaining part of the Group to pursue growth in the years to come. Also in HealthCare IT, we are investing in the sales and service organization to accelerate sales growth of our highly innovative Enterprise Imaging platform. These efforts are starting to bear fruit and our Imaging IT business is now on the verge of a breakthrough. Thirdly, we reorganized the Agfa HealthCare business group's hardcopy distribution channels in China, which weighed strongly on our hardcopy top line in 2017. This situation is under control and the effects of the reorganization are starting to abate. The fourth initiative is situated in the Agfa Graphics business group. In 2017, the inkjet segment posted double-digit growth, as we started to benefit from the inkjet portfolio rationalization we conducted in the past few years. Inspired by the success of the measures in inkjet, we decided to conduct a similar product portfolio exercise in the prepress segment, which is suffering from market-driven volume decreases, price erosion and aluminum price increases. More in particular, we decided to stop certain reseller activities in the USA. We are convinced that this decision will allow us to better focus on Graphics' core businesses.
These investments in the future of our company will have an impact on our profitability in the coming quarters. However, we are convinced that they will allow us to transform the Agfa-Gevaert Group into a more agile company that will be able to pursue growth in the years to come," said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.
Agfa-Gevaert Group - full year 2017
|in million Euro||2016||2017||% change|
|Gross profit (*)||857||814||-5.0%|
|% of revenue||33.8%||33.3%|
|Recurring EBITDA (*)||265||222||-16.2%|
|% of revenue||10.4%||9.1%|
|Recurring EBIT (*)||208||169||-18.8%|
|% of revenue||8.2%||6.9%|
|Result from operating activities||166||138||-16.9%|
|Result for the period||80||45||-43.8%|
|Net cash from (used in) operating activities||142||39|
(*) before restructuring and non-recurring items
Most of the Agfa-Gevaert Group's growth engines - including Inkjet, HealthCare Information Solutions and several future-oriented activities of the Agfa Specialty Products business group - performed well in 2017. The Group's top line decrease was attributable to adverse currency effects and to the decline in the traditional businesses, including Agfa HealthCare's hardcopy business, which felt the effects of the reorganization of its distribution channels in China. Excluding currency effects, the Group's revenue decline was limited to 2.9%. The top line trend clearly improved versus the previous year (-3.5%), showing a significant improvement in the fourth quarter.
Although adverse raw material effects weighed on the Group's profitability, targeted efficiency measures allowed the Group to keep its gross profit margin at 33.3% of revenue.
As a percentage of revenue, Selling and General Administration expenses amounted to 20.3%.
R&D expenses amounted to 144 million Euro, or 5.9% of revenue, which is slightly higher than in the previous year. This clearly shows the commitment of the Group to keep its technology leadership in most of its businesses.
Recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) amounted to 9.1% of revenue, versus 10.4% in 2016. Recurring EBIT reached 6.9% of revenue, versus 8.2% in the previous year.
Restructuring and non-recurring items resulted in an expense of 31 million Euro, versus an expense of 42 million Euro in 2016.
The net finance costs decreased from 51 million Euro in 2016 to 39 million Euro.
Income tax expenses amounted to 53 million Euro, versus 35 million Euro in the previous year. This includes a one-off (non-cash) deferred tax cost of 25 million Euro following changes in tax regulation in Belgium and the US.
As a result of the elements mentioned above, the Agfa-Gevaert Group posted a net profit of 45 million Euro.
Financial position and cash flow
- At the end of 2017, total assets were 2,233 million Euro, compared to 2,352 million Euro at the end of 2016.
- Inventories amounted to 487 million Euro (108 days), versus 483 million Euro (104 days) in 2016. Trade receivables (minus deferred revenue and advanced payments from customers) amounted to 389 million Euro (55 days), versus 364 million Euro (49 days) in 2016, and trade payables were 224 million Euro (49 days), versus 225 million Euro (48 days).
- Net financial debt amounted to 18 million Euro, versus a net cash position of 18 million Euro at the end of 2016.
- Net cash from operating activities amounted to 39 million Euro.
Director Corporate Communication
2640 Mortsel - Belgium
T +32 (0) 3 444 71 24
Corporate Press Relations Manager
T +32 (0)3/444 80 15
The full press release and financial information is also available on the company's website: www.agfa.com