Still impacted by adverse currency effects, Agfa HealthCare's revenue decreased by 5.5 percent. On a currency comparable basis, the decrease amounted to 4.3 percent, which is a clear improvement compared to the previous quarters of the year. The economic weakness in most of the emerging markets continued to impact the business group's top line. Sales of the Imaging segment's traditional film products continued to decline strongly. In the segment's digital radiography business (consisting of Computed Radiography, Direct Radiography and the hardcopy business), the DR product range continued its strong revenue growth. The IT segment's radiology IT solutions continued to suffer from the uncertainty in the US healthcare market, where the government is inciting hospitals to invest in Electronic Medical Records (EMR), rather than departmental IT. Agfa HealthCare responds to these changing market conditions with Enterprise Content Management Solutions and Enterprise Imaging Solutions that enrich the EMR with documents and medical images. This strategy is starting to bear fruit.
Agfa HealthCare's gross profit margin improved by over 2 percentage points from 33.6 percent of revenue to 35.9 percent. Its successful efficiency programs and favorable raw material effects allowed the business group to considerably improve its profitability. Recurring EBITDA reached 26.2 million Euro (or 10.1 percent of revenue). Recurring EBIT improved by more than 26 percent to 17.6 million Euro (or 6.8 percent of revenue).
In the field of Imaging, Agfa HealthCare announced its Fast Forward Digital Radiography Upgrade Program. The program aims to support and improve hospitals' and imaging departments' digital imaging evolution. Furthermore, Agfa HealthCare signed several major imaging contracts. The Loma Linda University Medical Center (California, USA) will upgrade to Direct Radiography (DR) through Agfa HealthCare's upgrade program. The center will install 11 DX-D Retrofit DR systems to convert existing CR-based X-ray rooms to DR, as well as five wireless DX-D 100 mobile DR systems. Also in the USA, Summa Health System (Ohio) aims to achieve improved image quality and X-ray dose management, as well as cost savings with Agfa HealthCare's Computed Radiography (CR) and DR solutions.
In the UK, the Northern Devon Healthcare NHS Trust's main hospital and eight of its community hospitals have replaced their existing digital radiography systems with Agfa HealthCare's CR 30-X and DX-G CR-solutions, including the MUSICA image processing software. The newly opened Beirut Medical Centre - Saint Antoine de Padoue (Beirut, Lebanon), has installed Agfa HealthCare’s DX-D 400 DR and CR 10-X CR systems.
In the field of radiology IT, Agfa HealthCare continued the global launch of its new Agility medical imaging management platfo rm. The solution is now live at 87 hospital sites across 13 countries in South America, North America, Africa, Europe, Russia and the Middle East.
Furthermore, the business group is positioning its Enterprise Imaging Solutions and its Enterprise Content Management Solutions as powerful additions to EMR's. Agfa HealthCare has been selected to equip the major Dutch academic hospitals Vrije Universiteit Medisch Centrum (VUmc) and Academisch Medisch Centrum (AMC) with a Vendor Neutral Archive and an Enterprise Imaging Solution, which enriches the EMR with images.
In the field of Healthcare Information Solutions, Agfa HealthCare further improved its strong position in the German speaking region of Europe. Among the German care organizations that started using ORBIS hospital and clinical information solutions are St-Jozefshospital (Krefeld), Maria-Hilf Krankenhaus der Alexianer (Krefeld), Klinik Nürtingen, Gemeinschaftsklinikum Mayen Koblenz, Psychiatrischen Dienste Aargau AG, and SRH Wald-Klinikum Gera.
"Quarter after quarter, we continue to improve the efficiency of our operations and to increase our gross profit margin. In spite of the weak global economy, the rigorous management of our operational costs brings us closer to our short-term target of reaching a 10 percent recurring EBITDA percentage. Our top line decline is the result of the soft investment climate in mature markets, while our traditional consumable business suffers from the lower growth rates in most of the emerging markets. The measures we recently took to address our restructuring costs clearly help to deliver a sustained positive net result. Finally, our working capital management adds to the delivery of a positive net operating cash flow. We are confident that the adaptation of our product portfolio to the new economic situation will allow us to even better cater to the needs of our customers in the near future. This should enable us to limit the erosion of our top line in the quarters to come," said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.
Related news articles:
- 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 2,865 million euro in 2013.
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 2013 were 1,160 million euro.