Belgium - Agfa-Gevaert today commented on its results in the third quarter of 2023.

'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 Juery, 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.

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.

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.

Outlook

The Agfa-Gevaert Group confirms the outlook that was provided in the Q2 2023 press release. Overall, the Agfa-Gevaert Group expects a recovery in profitability in the full year 2023 versus 2022.

2023 outlook per division

HealthCare IT: Order intake growth continues to be strong. As the portion of own IP in the sales mix is expected to grow, profitability is expected to continue to improve versus the third quarter. This will likely result in a strong end of the year. Impacted by adverse currency effects, full year EBITDA is expected to be slightly below that of last year.

Radiology Solutions: For medical film, exchange rate and margin pressure is expected to continue, resulting in a weak performance in the fourth quarter. The progress in Direct Radiography is expected to continue.

Digital Print & Chemicals: The division expects to continue to improve profitability, based on pricing, cost improvement actions and positive contributions from digital print and the ZIRFON membranes. The revenue generated by ZIRFON will continue to grow very strongly.

Management Certification of Financial Statements and Quarterly Report

This statement is made in order to comply with new European transparency regulation enforced by the Belgian Royal Decree of November 14, 2007 and in effect as of 2008.

'The Board of Directors and the Executive Committee of Agfa-Gevaert NV, represented by Mr. Frank Aranzana, Chairman of the Board of Directors, Mr. Pascal Juery, President and CEO, and Mr. Dirk De Man, CFO, jointly certify that, to the best of their knowledge, the consolidated financial statements included in the report and based on the relevant accounting standards, fairly present in all material respects the financial condition and results of Agfa-Gevaert NV, including its consolidated subsidiaries. Based on our knowledge, the report includes all information that is required to be included in such document and does not omit to state all necessary material facts.'

Statement of risk

This statement is made in order to comply with new European transparency regulation enforced by the Belgian Royal Decree of November 14, 2007 and in effect as of 2008.

'As with any company, Agfa is continually confronted with - but not exclusively - a number of market and competition risks or more specific risks related to the cost of raw materials, product liability, environmental matters, proprietary technology or litigation.'

Contact:

Viviane Dictus

Tel: +32 (0) 3 444 71 24

Email: viviane.dictus@agfa.com

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