Marc Olivie, Agfa's CEO.
Agfa’s group sales grew 1.0 percent in the last quarter, compared to the third quarter of 2005, with double-digit growth in Specialty Products, a modest increase in HealthCare but flat sales in Graphics (on a comparable basis). Although raw materials costs continued to rise, all business groups were able to improve their EBIT-margins (before restructuring and non-recurring items) compared to last year, Agfa has announced.
Marc Olivie, Agfa’s CEO says the business groups continue to be successful in assisting their respective clients in the conversion from analogue to digital and IT solutions.
“Due to the ongoing shift to more profitable digital technologies, we were again able to improve the margins of our businesses compared to last year, and this despite the impact of high raw material costs.
"Sales grew 1.0 percent mainly as a result of targeted price increases and strong performances in the field of digital solutions in all business groups. This more than compensated the ongoing decline in the traditional film-related businesses.”
Due to improved production and service efficiencies, the Group’s gross profit margin grew to 36.9 percent from 34.3 percent in the third quarter of 2005, despite the significant increase of raw material costs.
Sales and general administration costs (excluding non-recurring items) amounted to 24.5 percent of sales, compared to 24.2 percent in the third quarter of 2005.
“Measures to bring down these costs are being discussed with the social partners or are already being implemented as part of the Group’s plan to reduce total costs by approximately 250 million Euro by 2008,” he adds.
R&D expenses decreased slightly to 46 million Euro. Supporting the business groups’ growth strategies, the Group’s R&D focus continues to be on industrial inkjet printing, as well as on healthcare IT and software solutions.
Recurring EBIT grew 18.4 percent compared to the third quarter of 2005, amounting to 45 million Euro. The EBIT-margin improved from 4.8 percent to 5.6 percent of sales.
Restructuring and non-recurring items amounted to 33 million Euro, as the Group started to implement the first part of its cost savings plan.
The non-operating result amounted to minus 20 million Euro.
The net loss amounted to 8 million Euro, or minus 6 Eurocents per share, versus 108 million Euro or minus 85 Eurocents per share in the third quarter of 2005.
He says Agfa-Gevaert feels confident about the fourth quarter, “which should be solid despite continued high raw material costs. Sales and results will benefit from seasonal effects in HealthCare and from the further increasing impact of pricing initiatives in Graphics.”
