Despite continued disruptions caused by supply chain issues, Agfa’s Digital Print & Chemicals division’s top line grew substantially in the third quarter, “mainly driven by the sign & display business,” with the company signing its first contracts for Agfa-branded Onset wide-format machines. Agfa-Gevaert Group suffered a net loss totaling 17 million Euro.
Adjusted EBITDA increased from 21 million Euro (4.9% of revenue) in the third quarter of 2021 to 23 million Euro (4.9% of revenue), “in spite of inflationary pressure and supply chain issues.” Adjusted EBIT reached 7 million Euro, versus 6 million Euro in the third quarter of 2021.
Non-recurring and restructuring items resulted a 13 million Euro expense, compared with 7 million Euro for the third quarter in 2021. “This increase reflects investments in various transformation projects, including the organization of the Offset Solutions activities into a stand-alone legal entity structure and the re-organization of the Group’s operating model,” Agfa said.
“The net finance expenses amounted to minus five million Euro. The third quarter 2021 income tax expenses were minus 5,000,000 Euro, compared to 1 million Euro in 2020. Due to these factors, Agfa-Gevaert Group reported a net loss totaling 17 million Euro.
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| Agfa CEO Pascal Juéry |
“In these times of exceptional economic and geopolitical instability, we saw strong contrasts between the third quarter performances of our various activities,” said Pascal Juéry, president and CEO of the Agfa-Gevaert Group.
“The HealthCare IT and Offset Solutions divisions performed well, with strong improvements in profitability. The Radiology Solutions and Digital Print & Chemicals divisions continued to struggle with the lockdowns in China, supply chain issues and cost inflation. Many activities felt the effects of the weakening economy, especially in Europe and China.
“Our confidence in the strategy we have outlined for our Digital Print & Chemicals division is strengthened by the recognition of the superiority of our systems by the market and by industry experts, exemplified by the Pinnacle Product awards and the essenscia Innovation award we recently won.
“In August, we signed a share purchase agreement with AURELIUS Group for the sale of our Offset Solutions division. We are on track to complete the transaction in the course of the first quarter of 2023.”
Digital Print & Chemicals – Q3 2022
The Digital Print & Chemicals division’s top line “grew substantially versus the third quarter of 2021, mainly driven by the sign & display business,” Agfa said. “Some business areas, especially in electronics and industrial inkjet applications, were impacted by the weaker economic environment, mainly in Europe and Asia. The demand for products that support the green energy transition (Zirfon and Orgacon hybrid cars) is strong as well as the industrial film products.
“In the field of digital print, the top line of the sign & display business grew strongly. The ink product ranges for sign & display applications continued to perform well. Despite the industry-wide logistical challenges faced by high-end equipment manufacturers, the business’ top line in wide-format printing equipment continued its upward trend.
“In the field of industrial inkjet, the décor printing business was impacted by the weakening economic environment, as customers are postponing investments in their digitization process.
“The Speedset single-pass packaging machine is being developed by Inca Digital Printers. The machine is drawing strong interest from potential customers. Contracts were signed in the third quarter for the delivery of the Onset wide-format machine, which is Agfa-branded.
Outlook
“The Agfa-Gevaert Group expects cost inflation, supply chains issues, COVID locksdowns in China, and uncertain geopolitical economic conditions to continue to impact the next quarter.” Although raw material cost inflation has begun to decline, it is still a concern that salary cost inflation will continue to be a problem in the near future.
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