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Agfa Lowers Outlook for 2001, Profits Hurt By High Admin and Production Expenses

Press release from the issuing company

Mortsel (Belgium), 13 August 2001 - In spite of the ongoing weakening of the economic situation, Agfa-Gevaert has realised during the second quarter an increase in sales and EBIT of approximately 9 percent compared to the first three months of this year. As opposed to the fairly satisfactory evolution in sales, the development in profit falls considerably short of our expectations. This is due amongst others to higher exceptional expenses and to production and administrative costs, which have increased too rapidly. We aim to restore our profit margin as from 2002. The measures to achieve this goal are incorporated in the Horizon plan which will be communicated on the 27th of September, following approval by the Board of Directors and after communication to and consultation with the social partners. Even though the details of this plan are not available now, it will, most likely, result in extra provisions that will influence the results of the current financial year. Under the circumstances and in the light of recent economic forecasts, which are still lacklustre, we will not be able to achieve the foreseen growth in net profit of 10 percent and will instead have to take into account a decrease in net profit. As the Horizon plan will not be communicated until the end of September, it would be premature to announce already today a more precise outlook for net profit for 2001. We are convinced that the Horizon plan, which aims to improve efficiency and cost-effectiveness, will enable Agfa-Gevaert to realise its strategy of further expansion and acquisitions in digital imaging by means of its own cash-flow, and soon resume its path to profitable growth.