19 Sep 2020

Agfa reports strong Q2 results

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Agfa-Gevaert today announced its second quarter results.


Clearly outperforming the trend of the first months of the year, the Group's revenue grew 8.7 percent versus the second quarter of 2009 to 736 million Euro. The increase is largely attributable to Agfa Graphics, whereas Agfa HealthCare posted a slightly higher revenue. The current exchange rate conditions had a beneficial impact on the Group's top line business performance.


Due to the continuous success of the efficiency improvement programs, the optimal use of the manufacturing capacity, favorable raw material effects and an IP related one-off effect in Agfa Graphics, the Group's recurring gross profit margin improved to 36.0 percent, versus 31.6 percent in the second quarter of 2009.


Selling and General Administration expenses were 147 million Euro. Representing 20.0 percent of revenue, these expenses are slightly better than the 20.4 percent of last year's second quarter.


The Group's recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) increased from 64 million Euro in the second quarter of 2009 to 107 million Euro. Recurring EBIT improved significantly from 38 million Euro (5.6 percent of sales) to 84 million Euro (11.4 percent of sales).


Restructuring and non-recurring items resulted in an expense of 15 million Euro, versus an expense of 12 million Euro in 2009.


The net finance costs amounted to 22 million Euro, compared to 27 million Euro in the second quarter of 2009.


Income tax expense remained stable at 8 million Euro.


As a result of the strong operational performances of all business groups, a positive net result of 39 million Euro was booked, compared to a net loss of 9 million Euro in the second quarter of 2009.


Balance sheet and cash flow

- At the end of June 2010, total assets were 3,058 million Euro, compared to 2,852 million Euro at the end of 2009.

- Inventories were 585 million Euro (or 113 days). Trade receivables (minus deferred revenue and advanced payments from customers) amounted to 471 million Euro, or 58 days and trade payables were 235 million Euro, or 45 days.

- Net financial debt amounted to 391 million Euro, versus 445 million Euro at the end of 2009 and 569 million Euro at the end of the second quarter of 2009.

- Net cash from operating activities amounted to 61 million Euro.


Agfa Graphics' revenue improved by 19.9 percent (15.2 percent excluding currency effects) versus the second quarter of 2009, when the crisis was still significantly impacting the graphic industry. Broken down in business segments, the growth was due to an upturn of the digital computer-to-plate (CtP) prepress business and the business group's success in the analogue computer-to-film (CtF) market. The Industrial Inkjet segment's revenue also continued to grow. Regionally, the revenue growth is mainly due to the good performance of Agfa Graphics in the USA and in the emerging countries. In most European countries, the industry is recovering far slower than in the rest of the world. In general, competitive pressure continues to weigh on the business group's revenue.


As a result of the efficient use of the manufacturing capacity, higher volumes in the CtF segment, positive raw material effects and an IP related one-off effect, Agfa Graphics' gross profit margin improved from 27.0 percent in the second quarter of 2009 to 33.2 percent. Following strong improvements in the past two years, SG&A costs further reduced from 20.6 percent of revenue in the second quarter of 2009 to 19.4 percent. Recurring EBITDA amounted to 56.6 million Euro (14.5 percent of revenue). Recurring EBIT amounted to 46.1 million Euro (11.8 percent of revenue), versus 12.2 million Euro (3.7 percent of revenue) in the second quarter of 2009, which was marked by the strong impact of the crisis in the industry.


Major events in the second quarter were the Fespa trade show (Munich, Germany - 22-26 June) and the 4-yearly IPEX trade show (Birmingham, UK - 18-25 May). At IPEX, Agfa Graphics was able to exceed its targets in prepress, as well as in industrial inkjet. At the show, Agfa Graphics introduced several new prepress products and systems, including two new eco friendly printing plates. The :Azura V chemistry-free plate for violet CtP systems is ideal for small to mid-size commercial printers. :Amigo TS is an enhanced version of the popular :Amigo thermal printing plate. The new plate offers higher image contrast and allows printers to increase productivity. Agfa Graphics also demonstrated new software solutions, as well as two new platesetters.


In the field of industrial inkjet, Agfa Graphics launched several new inks. The :Agorix LM UV inks are designed to be used on the :Dotrix Modular single-pass UV inkjet press. The inks are ideally suited for short-run printing on a wide range of packaging substrates. The new :Agora ink family is ideal for the next generation single pass "piezo" print heads. Furthermore, Agfa Graphics introduced a new member to its family of :Anapurna large format printers.


Still in industrial inkjet, Agfa Graphics added variable data capabilities to its high-speed :M-Press Tiger flatbed inkjet press. Thanks to this new tool, users can define elements (text, graphics, images, …) which may change from one document to the next without slowing down the printing process. In June, Agfa Graphics announced that StylePrint, one of Australia's leading screen printing companies, purchased its second :M-Press Tiger only five months after the installation of the first system. The first :M-Press Tiger in North America was ordered by Cameron Advertising Displays Ltd, one of the most successful screen printing companies in Canada.


In August 2010, Agfa Graphics announced the successful completion of the acquisition of the assets of the Harold M. Pitman Company, a leading US supplier of prepress, industrial inkjet, pressroom and packaging printing products and systems. The acquisition will allow Agfa Graphics to strengthen its distribution power and expand its presence in the growing US industrial printing industry. It will boost Agfa Graphics' revenue in the US to over $500 million.


Performing markedly better than in the first months of this year, Agfa HealthCare booked a slight revenue increase of 0.3 percent (a decrease of 3.7 percent excluding currency effects) compared to the second quarter of 2009. The traditional imaging products continued their market-driven decline. Computed Radiography (CR) performed well and a strong order intake was booked for CR, as well as for Direct Radiography (DR). For IT, revenue grew substantially in the emerging countries and the USA, where Agfa HealthCare clearly outperformed the market. In certain Southern European countries, the unstable economic climate weighed on Agfa HealthCare's IT sales, whereas the beginning of an upturn was noticed in the German and Northern European markets.


As a result of improved service efficiency in IT and the efficient use of manufacturing capacity, the business group's gross profit margin improved from 39.3 percent in the second quarter of 2009 to 41.9 percent. The business group's SG&A expenses remained stable. Agfa HealthCare's recurring EBITDA amounted to 48.1 million Euro (or 16.3 percent of revenue). Recurring EBIT improved strongly to 35.6 million Euro, or 12.0 percent of revenue.


In the second quarter, Premier Healthcare Alliance honoured Agfa HealthCare with the Supplier Performance Award. With the award, the alliance applauds the efforts of contracted suppliers that meet and exceed operational expectations. Premier is a performance improvement alliance of more than 2,300 US hospitals and 67,000 other healthcare sites working together to achieve high quality, cost-effective care.


In the field of Imaging, Agfa HealthCare was awarded a new three year, multi-source, contract by HealthTrust Purchasing Group to provide Computed Radiography products to their more than 1,400 acute care hospitals, 120 alternate care sites and 3,600 physician practices in the US.


In the 2010 Best in KLAS Medical Equipment Report, Agfa HealthCare was named category leader for single plate CR. Agfa HealthCare's CR 30-X digitizer is the No. 1 ranked CR product according to KLAS, a research firm specializing in monitoring and reporting the performance of healthcare vendors. In the second quarter, a strong order intake was booked for CR and DR systems, with the CR 30-X as the absolute star among the family of CR digitizers.


In Imaging Informatics, Agfa HealthCare signed an agreement with the Academisch Medisch Centrum (AMC) in Amsterdam (The Netherlands) to upgrade its existing Picture Archiving and Communication System (PACS) and install a Radiology Information System (RIS) and Nuclear Information System (NIS). The AMC is one of the The Netherlands' leading university medical centers. Furthermore, Agfa HealthCare completed the installation of its latest PACS and RIS releases at four of Alliance Medical's sites across Ireland. Alliance Medical is an independent provider of diagnostic imaging services with 11 dedicated sites across Ireland. In Brazil, Agfa HealthCare signed an agreement with the Fundação Instituto de Pesquisa e Estudo de Diagnóstico por Imagen (FIDI) for the installation of its CR and Imaging IT solutions across the organization's 25 sites.


In Enterprise IT, Agfa HealthCare continued its geographical expansion by launching its Document Management System (known as HYDMedia) in France and Luxemburg. This new offering completes the digitization of hospitals and healthcare facilities, by allowing them to install a fully paperless workflow.


Agfa Specialty Products' revenue decreased 12.5 percent compared to the second quarter of 2009. Like in the first quarter of the year, the business group's revenue was influenced by the shift of part of its film business to Agfa Graphics and by the market-driven decline for some of the Classic Film products. The revenue for Printed Circuit Board (PCB) film continued to increase due to the growth of the electronics industry in Asia.


The revenue impact and the continued R&D for the New Business products were counterbalanced by the increased use of the manufacturing capacity and the continued efforts to reduce operational costs. The recurring EBITDA margin amounted to 9.0 percent of revenue and the recurring EBIT margin amounted to 7.3 percent of revenue.



Provided that the exchange rates and macro-economic conditions remain stable, the Agfa-Gevaert Group expects a full year revenue growth of about 200 million Euro versus 2009. The revenue increase is expected to come from Agfa Graphics, as the business group's internal growth will be supplemented by the impact of the recently announced acquisitions and joint venture. Agfa Graphics' full year EBIT to revenue ratio is expected to be higher than average because of the favorable raw material costs, the stronger than anticipated recovery of the graphic industry in the USA and the IP related one-off effect. Agfa HealthCare anticipates a better top line performance in the second half of the year. The business group expects its full year EBIT to revenue ratio to be closer to 11 percent than to 10 percent.


Agfa Graphics sticks to its 7 percent medium term EBIT target. Agfa HealthCare will continue its programs to improve service efficiency. Furthermore, the business group's profitability will gradually become less exposed to the fluctuations of the silver price. For Agfa HealthCare, the medium term EBIT to revenue ratio is expected to be between 10.5 percent and 11 percent.


Agfa Specialty Products continues to invest in new businesses, which will only gradually start to compensate for the ongoing decline in the demand for some of the traditional film products.


Christian Reinaudo, Agfa-Gevaert's President and CEO, said: "The strong performance in the first half of this year indicates that our targeted strategies and industry-leading technologies have allowed us to rejoin the path to growth. We expect that the combination of organic growth and the effects of our recent strategic moves will yield a full year revenue increase of about 200 million Euro."

HP reports earnings up in Q3

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Imaging and Printing Group (IPG) revenue increased 9% to $6.2 billion. Supplies revenue was up 5%, while Commercial hardware revenue and Consumer hardware revenue increased 28% and 4%, respectively. Printer unit shipments increased 16%, with Commercial printer hardware units up 44% and Consumer printer hardware units up 9%. Operating profit was $1.0 billion, or 16.9% of revenue, versus $960 million, or 17.0% of revenue, in the prior-year period.


HP today announced financial results for its third fiscal quarter ended July 31, 2010, with net revenue of $30.7 billion, up 11.4% from a year earlier including a favorable currency benefit of approximately one percentage point.

In the third quarter, GAAP diluted earnings per share (EPS) was $0.75, up from $0.69 in the prior-year period. Non-GAAP diluted EPS was $1.08, up from $0.92 in the prior-year period, including a one-time negative impact of approximately $0.02 per share related to a legal settlement. Non-GAAP financial information excludes after-tax costs of approximately $0.33 per share and $0.23 per share in the third quarter of fiscal 2010 and 2009, respectively, related primarily to the amortization of purchased intangibles, restructuring charges and acquisition-related charges.

"The broad-based strength of HP's Q3 performance further demonstrates the power of our strategy and the discipline of our execution," said Cathie Lesjak, HP chief financial officer and interim chief executive officer. "We raised our full-year outlook and are continuing to build momentum in driving out costs, investing for profitable growth and capitalizing on HP's competitive advantages in the marketplace."

Information about HP's use of non-GAAP financial information is provided under "Use of non-GAAP financial information" below. Unless otherwise noted, all growth rates included in the narrative below reflect year-over-year comparisons.

Third quarter revenue was up 12% in the Americas to $14.2 billion. Revenue was up 9% in Europe, the Middle East and Africa and up 14% in Asia Pacific to $10.9 billion and $5.6 billion, respectively. When adjusted for the effects of currency, revenue was up 11% in the Americas, up 12% in Europe, the Middle East and Africa and up 8% in Asia Pacific. Revenue from outside of the United States in the third quarter accounted for 63% of total HP revenue, with revenue in the BRIC countries (Brazil, Russia, India and China) increasing 21% while accounting for 11% of total HP revenue.



Services revenue increased 1% to $8.6 billion. Infrastructure Technology Outsourcing revenue and Business Process Outsourcing each increased 1%, while revenue in Technology Services declined roughly 1%. Application Services revenue was up 4% versus the prior-year period. Operating profit was $1.4 billion, or 15.9% of revenue, up from $1.3 billion, or 15.3% of revenue, in the prior-year period.


Enterprise Storage and Servers

Enterprise Storage and Servers (ESS) reported total revenue of $4.4 billion, up 19%. Industry Standard Server revenue increased 31%, while Storage revenue increased 10% and Business Critical Systems revenue declined 15%. ESS blade revenue was up 29%. Operating profit was $549 million, or 12.3% of revenue, up from $381 million, or 10.2% of revenue, in the prior-year period.


HP Software

HP Software revenue increased 2% to $863 million. Business Technology Optimization revenue increased 3%, and Other Software revenue decreased 1%. Operating profit was $183 million, or 21.2% of revenue, up from $153 million, or 18.1% of revenue, in the prior-year period.


Personal Systems Group

Personal Systems Group (PSG) posted a 12% increase in unit shipments and maintained the leading market share position in PCs worldwide. PSG revenue increased 17% to $9.9 billion. Notebook revenue for the quarter was up 10%, while Desktop revenue increased 27%. Commercial client revenue was up 25%, while Consumer client revenue increased 12%. Operating profit was $469 million, or 4.7% of revenue, up from $387 million, or 4.6% of revenue, in the prior-year period.


Imaging and Printing Group

Imaging and Printing Group (IPG) revenue increased 9% to $6.2 billion. Supplies revenue was up 5%, while Commercial hardware revenue and Consumer hardware revenue increased 28% and 4%, respectively. Printer unit shipments increased 16%, with Commercial printer hardware units up 44% and Consumer printer hardware units up 9%. Operating profit was $1.0 billion, or 16.9% of revenue, versus $960 million, or 17.0% of revenue, in the prior-year period.


Corporate Investments

ProCurve revenue increased 42%, and HP Networking overall increased 198% year over year including the impact of the 3Com acquisition.


HP Financial Services

HP Financial Services (HPFS) revenue increased 14% to $764 million. Financing volume increased 3%, and net portfolio assets increased 13%. Operating margin was 9.4%, up from 7.9% in the prior-year period.


Asset management

HP generated $3.3 billion in cash flow from operations for the third quarter. Inventory ended the quarter at $7.2 billion, with days of inventory up to 28 from 25 in the prior-year period. Accounts receivable of $15.6 billion was down 2 days year over year. Accounts payable ended the quarter at $14.9 billion, up 2 days over the prior-year period. HP's dividend payment of $0.08 per share in the third quarter resulted in cash usage of $205 million. HP also utilized $2.6 billion of cash during the quarter to repurchase approximately 55 million shares of common stock in the open market. HP exited the quarter with $14.8 billion in gross cash.



For the fourth quarter of fiscal 2010, HP estimates revenue of approximately $32.5 billion to $32.7 billion, GAAP diluted EPS in the range of $1.03 to $1.05, and non-GAAP diluted EPS in the range of $1.25 to $1.27. Fourth quarter fiscal 2010 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.22 per share, related primarily to the amortization of purchased intangibles, restructuring charges and acquisition-related charges.

For the full year, HP expects revenue in the range of $125.3 billion to $125.5 billion. HP expects FY10 GAAP diluted EPS to be in the range of $3.62 to $3.64 and non-GAAP diluted EPS in the range of $4.49 to $4.51. FY10 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.87 per share, related primarily to the amortization of purchased intangibles, restructuring charges and acquisition-related charges.

SGIA survey shows retail is a leading market for imagers

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SGIA released the 2010 Market Trends Survey Report for the specialty imaging community, offering valuable information about markets served, business concerns and steps made by companies to increase their competitive advantage.

"The survey shows strong evidence that specialty imagers - garment decorators and graphics producers alike - are exploring new markets and opportunities as a way to bolster their businesses," said Dan Marx, SGIA's Vice President of Markets and Technologies. "Further, the survey shows how specialty imaging companies are using sales, management and production initiatives to strengthen their competitive advantage."

The full report, available to all SGIA members and survey participants, includes data such as:

  • Technology distribution
  • Primary markets served
  • Top methods to attract new customers
  • Sales and promotion expenditures

According to the US report, about 71 percent of imagers agree that referrals are a very effective way to attract new customers, while only about 3 percent rely on online directory listings for new business. To increase their competitive advantage in production, 37.6 percent of all imagers are adding finishing capabilities to their businesses - up from 29.1 percent in 2009.

The survey also concludes that retail (direct and indirect through ad agencies) continues to be the leading market for graphic imagers (75.7 percent). For garment decorators, educational institutions (77 percent) and corporate branding (72 percent) are among the primary markets served.

Océ promotes two executives to Business Unit Directors

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Océ, an international leader in digital document management and delivery, has promoted two executives to head up business units in the UK. Stephen Lynch has been appointed Océ UK Director of Document Printing and Craig Nethercott Océ UK Director of Production Printing.

Nethercott joined Océ in 2000. He progressed from various Account and Senior Account Manager roles in Document Printing, through to Sector Manager in Production Printing, before taking over as its Sales Director two years ago.

“The markets are improving. There’s renewed customer confidence and financial institutions are relaxing their previous stringent restrictions on lending money, which had stifled investment,” said Craig Nethercott. “Our market-leading print production and software systems, combined with service and after-sales support that is second to none, will put us in a strong position to benefit as the economy continues to recover. Colour is massively important going forward, and we are confident that our technologies, such as Océ ColorStream and Océ JetStream, will continue to increase our market-share.”

Lynch, who has been with the Océ organisation for more than 15 years, started as a Major Accounts Manager in 1995. Three years later he was promoted to  Northern Regional Manager, based Glasgow, covering Liverpool, Leeds, Manchester, Scotland and Northern Ireland, and then to National Sales Director in 2002. He was working for Imagistics when it became part of Océ in 2005.

“Whilst we operate in a very challenging environment, this also brings opportunities that we, as a major international player, are well positioned to grasp.” said Stephen Lynch. “In the current climate every organisation must ensure it is as efficient as it can be, and we are ideally placed to assess how they manage and produce documentation. Every organisation needs to maximise efficiencies. Océ’s Document Printing division is a specialist in MFDs and Managed Print Services, and our customer-focused business approach and state-of-the-art systems are helping us make real inroads into the marketplace.”

Bron Curley, Managing Director of Océ UK, said: “Stephen Lynch and Craig Nethercott have demonstrated real leadership throughout their careers at Océ. I have every confidence they will continue to build successful teams that remain market focused and provide services that add real value to our customers.”

Canon Aids Rain-Disaster Relief Efforts in China

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Heavy rains in China beginning in May have triggered massive flooding and landslides across the country, causing widespread destruction and loss of life. In addition, on August 8, a devastating landslide struck Zhouqu county in northwest Gansu province and rescue and relief efforts remain ongoing.

We at Canon extend our heartfelt condolences to all those affected by these disasters and our thoughts go out to the victims and their families. Although the road to recovery will be challenging and take time, we hope that the region will soon be able to begin the rebuilding and healing process.

The Canon Group is aiding in the relief efforts for victims with a donation of RMB 2 million (approximately 25.4 million yen) to the Japanese Red Cross Society and other humanitarian aid organizations.

X-Rite announces improved Q2 results

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X-Rite, Incorporated today announced its financial results for the second quarter ended July 3, 2010.


Financial Highlights of today’s announcement:

- Second quarter net sales increased by 15.7 percent to $57.1 million compared to $49.4 million for the second quarter of fiscal 2009

- Second quarter Adjusted EBITDA increased $2.7 million, or 22.1 percent, to $14.9 million. Adjusted EBITDA was 26.1 percent of sales versus 24.8 percent of sales in the prior year second quarter

- Second quarter income from operations and net income improved by $5.7 million and $9.5 million to $8.2 million and $1.9 million, respectively, resulting in second quarter EPS of $0.02 per diluted share

- Strong year to date cash flow before financing of $18.6 million or 17.2 percent of sales

- Debt pay downs of $10.6 million for the quarter and $17 million to the end of the second quarter


Market Highlights of today’s announcement:

- Strong sales growth across all sectors and all regions

- New customer agreement signed with a leading North American Hardware Co-operative that is expected to increase iVue® market share and growth of the Retail sector.

- Introduced Pantone Matching Systems PLUS Series and the MA94 and MA96 Multi-Angle Spectrophotometer Industrial product lines


The Company’s strong sales growth was the result of recently launched product and marketing initiatives in combination with the global market recovery. Net earnings for the quarter were $1.9 million, or $0.02 per diluted share, compared to a net loss of $7.6 million, or $(0.10) per diluted share, for the same period of 2009.


Major new products introduced in the quarter were the new Pantone Matching Systems PLUS SERIES product lines and the MA94 and MA96 Multi-Angle Spectrophotometer. The new Pantone Matching Systems PLUS SERIES preserves all of the current colors of the Pantone Matching Systems, which it replaces, while adding a host of new colors, for greater design flexibility. The new Pantone Matching Systems PLUS SERIES product line incorporates X-Rite features such as the Color Checker Lighting Indicator, Color Checker Primer and Color Manager Software. The Multi-Angle products deliver cost effective reliable color measurement anywhere from the lab to the production line supporting formulation and quality control applications. The Company is receiving favorable customer acceptance of the new products.


The Company continued its organic product growth by announcing an agreement to install a minimum of 600 new color matching systems with a leading North American Hardware Co-operative over the next 12 months. This investment will replace an existing solution from an X-Rite competitor and supports the Co-Operative's paint department growth strategy.


"The positive momentum in our business this year continued into the second quarter with very solid growth in both sales and profitability," stated Thomas J. Vacchiano Jr., the Company's Chief Executive Officer. "This reflects the improving economic picture in many of our markets as well as success from our new sales, marketing, and product initiatives. One highlight here is the 26.1 percent growth of our Asia Pacific market. Furthering our commitment to the Asia Pacific region, the Company has recently announced Dr. Iris Mangelschots, a highly successful company sales and marketing leader, as President of X-Rite Asia Pacific region."


Through the Company's continued effective cost management and increased operating leverage, operating income for the second quarter increased to $8.2 million, or 14.4 percent of sales, in the period versus $2.5 million, or 5 percent of sales, in the prior year period. Supported by the combination of sales growth and the fiscal 2009 profit improvement actions, the Company reported Adjusted EBITDA for the second quarter of $14.9 million, or 26.1 percent of sales, an increase of $2.7 million or 22.1 percent over the second quarter of 2009.


The Company reported continued strong cash flows before financing activities of $18.6 million, or 17.2 percent of sales, for the six months ended July 3, 2010. Improved profitability and working capital metrics contributed to the Company's strong operating cash flows. As a result of the Company's operating cash flows an additional $10.6 million of first lien debt was paid in the quarter, for a total of $17.0 million in debt pay downs for the year. At quarter end net debt from secured credit facilities was reduced to $136.5 million.


Rajesh K. Shah, X-Rite's Chief Financial Officer, commented "I am pleased we are able to leverage the benefits of higher sales into significantly improved financial performance and cash flows. This has allowed the Company to continue to focus on accelerated debt pay downs while continuing to make the investments required to achieve our long-term growth plans. In addition to the $17.0 million in debt pay downs the Company achieved in the first six months I am also pleased to announce that we have already paid down an additional $9 million of first lien debt in the third quarter of 2010."


Vacchiano continued, "The Company is off to a good start this year. Our increased 2010 revenue and profitability reflect the strength and momentum of our product portfolio in a healthier global marketplace. This momentum should lead to double digit third quarter sales growth compared to the third quarter of last year. That said we continue to carefully monitor the economic climate, maintaining flexibility to manage our business opportunities accordingly."