Adverse currency effects had a strong impact on Agfa HealthCare's top line in 2013. Excluding these effects, revenue decline would be limited to 1.1 percent. In the IT segment, both Imaging IT and Enterprise IT performed well. The business group's revenue decline is attributable to the Imaging segment's traditional X-ray film business. It should be mentioned that in 2012, the traditional business was marked by a strong recovery following slow sales in 2011. In the Imaging segment's digital radiography business (consisting of hardcopy, Direct Radiography and Computed Radiography), the DR growth engine posted very strong revenue growth, while hardcopy performed well.
Whereas the emerging markets performed well in the first quarters, signs of stagnation became apparent towards the end of the year. In the course of 2013, business in North America began to feel the effects of the uncertainty in the US healthcare market. Europe, on the other hand, showed clear signs of recovery in the last months of the year.
Agfa HealthCare's gross profit margin reached 34.9 percent of revenue, versus 35.7 percent in 2012. The margin was impacted by currency and mix effects, as well as by investments in the further im provement of service efficiency. In the fourth quarter of the year, the gross margin showed clear signs of recovery as a result of the business group's efficiency programs and favorable raw material effects. Recurring EBITDA amounted to 116.3 million Euro (10.0 percent of revenue) and recurring EBIT reached 77.3 million Euro (or 6.7 percent of revenue).
"Once again, the economic environment was difficult in 2013. The exchange rates between the Euro and most other currencies were unfavorable to Agfa. In some emerging markets, GDP growth somewhat slowed down. Furthermore, sales of our analog businesses declined strongly versus a very solid year 2012, when these businesses recovered from the silver crisis of 2011. In these conditions, we chose to focus our efforts on improving our operational efficiency and our balance sheet. We succeeded in increasing our gross profit margin throughout the year. The strong improvement in the fourth quarter shows that we are on the right track to achieve one of our main goals: to restore our gross profit margin to a level in line with our recurring EBITDA target. The IT and Direct Radiography growth engines of Agfa HealthCare performed well and in line with expectations. In Agfa Graphics, our Inkjet business not only reached its target of crossing the break-even line during the year. For the first time ever, it even delivered a slight ly positive full year recurring EBIT. This result shows that rationalizing the product portfolio was the right decision. As far as the balance sheet is concerned, we managed to significantly reduce our working capital and to deliver a strong operational cash flow, which resulted in a healthy reduction of our net financial debt. Due to targeted benefit reduction programs, we also reduced our pension liabilities. In 2014, we aim at making good progress towards our medium term target of delivering a double digit recurring EBITDA percentage. In that respect, our fourth quarter results are very encouraging," said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.
- Agfa HealthCare's Profile
About Agfa
The Agfa-Gevaert Group is one of the world's leading companies in imaging and information technology. Agfa develops manufactures and markets analogue and digital systems for the printing industry (Agfa Graphics), for the healthcare sector (Agfa HealthCare), and for specific industrial applications (Agfa Materials). Agfa is headquartered in Mortsel, Belgium. The company is present in 40 countries and has agents in another 100 countries around the globe. The Agfa-Gevaert Group achieved a turnover of 3,091 million euro in 2012.
About Agfa HealthCare
Agfa HealthCare, a member of the Agfa-Gevaert Group, is a leading global provider of diagnostic imaging and healthcare IT solutions. The company has nearly a century of healthcare experience and has been a pioneer on the healthcare IT market since the early 1990's. Today Agfa HealthCare designs, develops and delivers state-of-the-art systems for capturing, managing and processing diagnostic images and clinical/administrative information for hospitals and healthcare facilities, as well as contrast media solutions to enable effective medical imaging results. The company has sales offices and agents in over 100 markets worldwide. Sales for Agfa HealthCare in 2012 were 1,212 million euro.