Agfa-Gevaert today commented on its results in the first quarter of 2020.

SALE OF PART OF AGFA HEALTHCARE'S IT BUSINESS

In May, the Agfa-Gevaert Group has successfully completed the sale of part of Agfa HealthCare's IT business to the Dedalus Group at an enterprise value of 975 million Euro. The part that has been sold consists of the Healthcare Information Solutions activities (Electronic Health Record, the ORBIS platform) and the Integrated Care activities in Germany, Austria, Switzerland, France and Brazil as well as the Imaging IT activities to the extent that these activities are tightly integrated into the Healthcare Information Solutions activities in these geographies. In North America and all other international markets, Agfa HealthCare pursues its Imaging IT software business, which is not included in the sale.

FINANCIAL HIGHLIGHTS

Thanks to its program to reduce working capital, the Agfa-Gevaert Group succeeded in generating strong cash flows in the first quarter of 2020. Excluding the impact of IFRS 16, net financial debt decreased to 69 million Euro.

On the one hand, the Radiology Solutions and HealthCare IT divisions showed resilience in the uncertain global economic conditions. Certain activities in the printing industry on the other hand, were starting to be impacted by the COVID-19 pandemic. This new challenge adds to the already tough conditions in this industry.

Thanks to gross margin improvements and cost saving measures, the Group was able to post strong results. Excluding the impact of the fading effects of the Siegwerk alliance in the Digital Print and Chemicals division, the Group's adjusted EBITDA would have been in line with the first quarter of 2019.

'We feel deeply committed to our customers and the communities they serve. As many of our customers are operating in critical industries, we are taking all measures necessary to guarantee that we can continue supplying and supporting them during the COVID-19 pandemic. However, as always our utmost priority is protecting the health and safety of our employees. Furthermore, we are controlling our working capital levels, capital expenditure, and costs even more rigorously to mitigate as much as possible the impact of the pandemic on our liquidity and bottom-line result. As the printing industry - which was already under pressure - is being impacted by the pandemic, we are adapting our production capacity to the worsened market conditions, resorting to temporary unemployment where applicable.

Despite some impact of COVID-19 on our activities in the printing industry, we delivered a solid set of results and we generated strong cash flows. Our program to reduce working capital continues to be successful. It allowed us to further lower our net financial debt to a very healthy level,' said Pascal Juery, President and CEO of the Agfa-Gevaert Group.

Statement on restated profit and loss numbers

As from 2019, the Agfa-Gevaert Group has adopted the IFRS 16 accounting rules.

In August 2019, the Group terminated its inkjet media reseller activities in the USA. To allow correct comparison, the Q1 2019 numbers have been restated.

The Agfa-Gevaert Group's top line decreased by 4.4% due to the issues in the offset printing industry, the refocus on higher margin activities in several business areas and the first effects of the COVID-19 pandemic.

The Group's gross profit margin improved from 32.7% of revenue in the first quarter of 2019 to 33.9% of revenue due to the above mentioned refocus on quality turnover and improved service and manufacturing efficiencies.

Selling and General Administration expenses decreased significantly from 22.6% of revenue in the first quarter of 2019 to 21.5%.

R&D expenses remained almost stable at 36 million Euro.

Due to the impact of the fading effects of the Siegwerk alliance, adjusted EBITDA decreased from 43 million Euro (8.2% of revenue) in the first quarter of 2019 to 39 million Euro (7.8% of revenue). Excluding the 4.5 million Euro Siegwerk impact, adjusted EBITDA would have been in line with last year. Adjusted EBIT reached 18 million Euro (3.6% of revenue), versus 20 million Euro (3.9% of revenue) in the first quarter of 2019.

Restructuring and non-recurring items resulted in an expense of 2 million Euro, versus an expense of 4 million Euro in the first quarter of 2019.

The net finance costs amounted to 8 million Euro.

Income tax expenses amounted to 8 million Euro, versus 6 million Euro in the first quarter of 2019.

As a result of the elements mentioned above, the Agfa-Gevaert Group posted a net profit of 1 million Euro.

Contact:

Tel: +32 (0) 3 444 71 24

Email viviane.dictus@agfa.com

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