Agfa Reports 1Q Results, Graphic Systems Shows Significant Improvement
Press release from the issuing company
Mortsel, May 7, 2002 - Agfa posted sales of 1,137 million in the first quarter of 2002. Profitability improved significantly, thanks to increased operational efficiency and to the first positive effects of the Horizon Plan.
Turnover decreased 3.8 percent compared to the first quarter of 2001. Excluding the sales of digital cameras and scanners which were discontinued as from the beginning of 2002, and taking account of Easter which - contrary to last year- fell in the first quarter, total revenues stabilised. Sales of "New digital solutions" continued to show vigorous growth (plus 30 percent) and now account for 34 percent of Group sales (previous year: 25 percent). The company's portfolio has shifted further towards the most profitable business segment: Technical Imaging now represents 39.3 percent of Group sales (previous year 37.2 percent), Graphic Systems increased its share slightly to 40.4 percent and sales of Consumer Imaging now account for 20.3 percent (previous year 22.9 percent).
The Group's Operating result before restructuring and net non recurring expenses reached 103 million, an increase of 35.5 percent compared to the first quarter of 2001. Return on sales amounted to 9.1 percent (previous year: 6.4 percent). This significant improvement is largely explained by the positive trend of the gross profit margin, which rose from 39.5 percent in the first quarter of 2001 to 43.4 percent in 2002.
For the Horizon Plan, a total amount of restructuring costs and non-recurring results of 25 million were booked. The operating result after restructuring thus amounted to 78 million (previous year: 68 million).
The Group recorded a net result of 17 million in the first quarter of 2002, against 20 million in the same period of 2001.
The vigorous efforts to decrease working capital were continued. Inventories decreased 298 million and trade receivables 185 million compared to end of March 2001.
Graphic Systems' sales reached 459 million in the first quarter of 2002, a decrease of 2.5 percent compared to the same period of 2001. This illustrates continuous subdued market conditions in the graphic industry. The transition from Computer-to-Film to Computer-to-Plate systems further accelerated and resulted in lower sales of graphic film and analogue plates and equipment, while turnover in digital plates and digital equipment showed high growth rates. As Agfa succeeded in further improving its product portfolio and the first effects of Horizon became visible, the business group's operating result before restructuring increased substantially (+78 percent) and now amounts to 36.0 million.
At the successful IPEX trade fair in Birmingham in April, Agfa presented several new platesetters, plates and software products which met with considerable customer interest.
Technical Imaging is made up of HealthCare, Non-Destructive Testing (NDT) and Industrial Imaging. Sales increased 1.6 percent to reach 447.0 million. The operating result before restructuring amounted to 64 million (previous year 64 million). The return on sales exceeds again 14 percent and is largely explained by the positive trend in HealthCare, which was able to further improve profitability.
In the first days of 2002, Agfa finalised the acquisition of Mitra, a global supplier of imaging and information management systems for the healthcare sector. This company has been co-operating with Agfa for many years and has played a major role in the development and success of Agfa's digital IMPAX networks over the past 10 years.
In April, Agfa and Hologic announced the signing of a Letter of Intent for the joint development of technological advancements in the field of digital mammography.
Sales in Non-Destructive Testing increased mainly because of the acquisitions of Seifert and Pantak during 2001, but turnover in film systems was affected by worsened market conditions. Industrial Imaging was very successful in the first quarter of 2002 thanks to the strong performance of the motion picture business.
Turnover in Consumer Imaging reached 231 million against 271 million during the first quarter of last year. Exclusive of the sales of digital cameras and scanners which were discontinued as from the beginning of 2002, the decrease is limited to 2 percent. Turnover in lab equipment showed strong growth, especially in minilabs where sales rose more than 80 percent. The new all-digital d-lab.2 minilab was showcased for the first time in the NAFTA region at the PMA Trade Show in Florida, and has been excellently received. Consumer Imaging's operating result before restructuring increased from minus 8.6 million in the first quarter of the previous year to plus 3.1 million in 2002.
In the first quarter of 2002, Europe accounted for 49.9 percent (previous year: 51 percent) of sales. NAFTA's share of Group sales is now 29 percent (previous year: 27.8 percent). The Asia/Oceania and Africa region contributed for 17.4 percent (previous year 16.3 percent) and Latin America for 3.8 percent (previous year: 4.9 percent) to Group sales.
In 2001, Agfa launched its growth and efficiency plan Horizon, which will run to the end of 2003. The major part of the restructuring expenses linked to it (440 million) was charged on last year. Of the remaining 110 million, 25 million are booked in the first quarter of this year.
The expected pickup of economic growth in the second half of 2002 and the fact that the positive effects of Horizon will increase gradually, lead Agfa to expect that its results of the second half of 2002 will exceed those of the first half.
Although the Group will book a total of 110 million restructuring charges in 2002, the net result for 2002 should be positive again.
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