Agfa announces 2020 results

Agfa has released its results for last year, and announced price increases and a share buyback scheme. The latest figures show that the company has taken a hit, but not out of line with the figures from other vendors, and not a surprise given the pandemic that we are all living through. Thus full year revenue for the group as a whole has fallen 13.5 percent from €1,975 million in 2019 to €1,709 million and gross profit has slipped from €590 million to €494 million. 

Pascal Juery, CEO of Agfa.

The Offset division experienced some of the worst issues, with revenues falling from €843 million in 2019 to €704 million in 2020, which translated into a 109.3 percent fall in Earnings Before Interest, Taxes, Depreciation and Amortisation from €27.9 million to a €2.6 million loss. Agfa has blamed this on the Covid-19 pandemic, including adverse price/mix effects, and the structural decline of the offset markets, saying that the pandemic caused a decrease in advertising and commercial activities, leading to lower print volumes and a lower demand for printing plates. However, the company pointed out that the division’s top line started to recover in the second half of the year.

Nonetheless, Agfa is reviewing its offset business model, simplifying its organisation and streamlining its product offering to address the significant decline in market demand, saying that the current pricing levels in the industry are not sustainable. Part of this includes looking at how it charges for some services. Agfa is also reducing its printing plate manufacturing capacity, having closed factories at Pont-à-Marcq, France, and Leeds, UK, in the fourth quarter. Agfa has previously said that it intends to split the Offset Solutions activities into a stand-alone legal entity structure and organization within the Agfa-Gevaert Group.

Agfa saw revenue for its Digital Print and Chemicals division fall from €355 million to €289 million, with a 44.3 percent fall in its EBITDA from €33.8 million in 2019 to €18.8 million in 2020. Agfa puts much of this down to a drop in sales of its large format printers as customers postpone investments due to the pandemic. However, Agfa claims to have maintained its market share since everyone else was also affected by the same issue. At the same time, Agfa reports that the sales of inks for industrial applications has gone up, though sales of films and foils has fallen as these products are mostly used in industries that have been hit by the Covid-19 pandemic, including aeronautics, the oil and gas industry and the printing industry.

Agfa expects to see growth in its specialty chemicals range, noting that its Orgacon conductive materials is used in hybrid and electric car technology. Agfa also points to its range of Zirfon membranes used for advanced alkaline electrolysis, which is used in the production of green hydrogen.

The Radiology Solutions division reported revenues of €485 million, down 9.4 percent, with EBITDA down 21.9 percent to €75.8 million. Agfa’s Healthcare IT business saw revenues fall 4.6 percent to €230 million though the EBITDA rose from €11.8 million to €23.7 million, mainly driven by improved service efficiencies together with a greater reliance on remote sales and service activities as well as some cost savings.

Agfa has announced price increases for some items, starting with offset plates, which are due to go up by between 5 and 10 percent, taking effect from April 1st 2021 onwards. Agfa has blamed this on rising costs, particularly aluminium, energy and packaging materials, in combination with sharply rising freight rates due to global logistic constraints. However, Agfa pointed out that printers will benefit from higher aluminium prices when they recycle their used plates.

Agfa has also announced immediate price rises on all IdeaLine phototooling films used for the production of Printed Circuit Boards (PCB) and metal structuring applications. Some prices will increase by more than 10 percent due to the increasing cost of production and of raw materials, mainly silver.

In addition, Agfa has announced a share buyback program to the tune of €50 million, starting from 1 April 2021 and running for up to 12 months, with the intention to reduce the issued capital of the Group and to cancel all or part of the purchased shares. This will be carried out by an independent financial intermediary, which will repurchase the shares on the basis of a discretionary mandate. The Board also approved the cancellation of the 4,099,852 treasury shares currently held by the company.

Pascal Juéry, president and CEO of the Agfa-Gevaert Group, explained: “This share buyback program allows our shareholders to benefit from the sale of part of our HealthCare IT activities, which was concluded in May 2020. Furthermore, it shows our confidence in our ongoing transformation process. We are on the right track to execute the growth strategies we have drawn up for our divisions and to create future shareholder value.”

Meanwhile, Agfa also announced that Vincent Wille will join Agfa as president of its Digital Print and Chemicals division. Since 2015 he has worked for Lhoist, mining and minerals company, becoming the Global Head of Procurement and Chief Innovation Officer in 2019.

Juéry commented: “Vincent brings a wealth of knowledge and experience to our company, both in the field of chemicals and in the field of innovation. That combination perfectly fits our Digital Print & Chemicals division, which develops and produces both film products and innovative solutions for the printing industry and for promising industrial markets. I am confident that under Vincent’s leadership, the digital print and specialty chemicals growth engines will be able to reach their full potential. I wish Vincent all success in his career at Agfa.”

You can find more information on Agfa and its range of activities from agfa.com.


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