Agfa-Gevaert reported ‘solid results’ in the first quarter of 2020, despite a 4.4% fall in revenue to €501 million, with net profit of €1 million. “Many companies are postponing investments in high-end large-format printing equipment," said the Belgian manufacturer of analogue and digital imaging products, software and systems. "In the coming quarters, a significant COVID-19 impact on the printing industry is to be expected."
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| Agfa's showrom at its HQ in Mortsel, Belgium |
“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 company said in a statement titled Solid results despite challenging economic conditions, issued from its headquarters in Mortsel.
“In inkjet, the ink product ranges performed well. On the other hand, many companies are postponing investments in high-end large-format printing equipment due to the COVID-19 pandemic. As this market almost came to a standstill in March, a strong COVID-19 impact will also be visible in the coming quarters.
“In spite of these adverse conditions, Agfa still considers inkjet as an important growth engine. The company continues to explore promising business opportunities in new market segments.”
In the first quarter, Agfa entered into a strategic partnership with TFL for the development of Alussa, a dedicated inkjet printing solution to decorate high-quality genuine leathers used by the fashion, upholstery, automotive, aviation and nautical industries. Agfa has also introduced the Oberon RTR3300, a 3.3m high-end roll-to-roll machine.
“On the one hand, the Radiology Solutions and HealthCare IT divisions showed resilience in the uncertain global economic conditions," it said. "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.”
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"Adapting our production capacity":
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Pascal Juéry, president and CEO of the Agfa-Gevaert Group, added: “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.
“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.”
Looking ahead, Agfa said: “It is impossible to predict how the COVID-19 pandemic will evolve and the timing of government decisions to ease restrictions is still very uncertain. Furthermore, it is currently unclear how strongly the Agfa-Gevaert Group’s various markets will be affected.
"However, in the coming quarters a significant COVID-19 impact on the printing industry is to be expected. Today’s situation does not allow the Group to assess a quantified impact of the pandemic on its 2020 financial performance and to provide a full year outlook for 2020. Management intends to give more guidance when it reports the second quarter results in August 2020.”
