Agfa Q1 2024 results show a weak start to the year

Agfa has commented on its results in the first quarter of 2024.

“As indicated before, the first quarter was very soft. In the field of Digital Printing Solutions, we went through a transition as we renewed our mid-range offering at the end of March. The impact of the product launches and the agreement we signed with EFI is expected to kick in later on in the year. Following a very strong fourth quarter of 2023, HealthCare IT experienced a seasonal slow start to the year, while order intake shows positive momentum. The Radiology Solutions division’s quarter was abnormally weak, as we started to reorganise our go-to-market processes in China in line with the new reality in that market. One-off quality issues for medical film in our Mortsel plant also had an impact on our costs. We are taking action to reorganise our medical film production process. Our activities in the field of Green Hydrogen Solutions are developing according to plan, as we again booked significant sales growth in the first quarter. I am also happy to announce that, on top of the EU funding, we recently obtained lease financing to help fund the construction of the new plant for our ZIRFON membranes. Overall, we were able to keep our working capital well under control and restructuring costs were at a low level,” said Pascal Juéry, President and CEO of the Agfa-Gevaert Group.

(*)     before restructuring and non-recurring items

Agfa-Gevaert Group 

(*)     before restructuring and non-recurring items

First quarter

Following a strong fourth quarter 2023, the Agfa-Gevaert Group’s revenue decreased by 6.5% (excluding currency effects). As expected, the Digital Printing Solutions and HealthCare IT growth engines had a soft first quarter, whereas the Green Hydrogen Solutions business continued its top line growth. The traditional film activities continued to be under pressure from the weakness in the electronics market and the new central procurement practices and Agfa’s related reorganisation for medical film in China, as well as some destocking for medical film in China.

Due to cost inflation, adverse currency effects, manufacturing inefficiencies for medical film and sales mix effects, the Group’s gross profit margin evolved from 32.1% of revenue in the first quarter of 2023 to 29.9%.

Following a strong 2023 year-end, adjusted EBITDA decreased to 2 million euro (0.7% of revenue).

Restructuring and non-recurring items resulted in a charge of 2 million euro versus 10 million euro in the first quarter of 2023.

The net finance costs amounted to 6 million euro.

Income tax expenses decreased to 0 million euro versus 5 million euro in the previous year.

The Agfa-Gevaert Group posted a net loss of 21 million euro.

Financial position and cash flow

Net financial debt (including IFRS 16) evolved from 6 million euro in Q4 2023 to 47 million euro in Q1 2024.

Trade working capital (CONOPS included) significantly improved from 32% of turnover at the end of Q1 2023 to 29% in Q1 2024. In absolute numbers, trade working capital evolved from 373 million euro at the end of Q1 2023 to 333 million euro.

In the first quarter of 2024, the Group generated a free cash flow of minus 40 million euro.

Continued focus on cash generation:

Lease financing of the ZIRFON project

Agreement for the sale of lease receivables in the US