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Belgium : Agfa-Gevaert publishes its first quarter 2014 results - Regulated information

May 14, 2014

"Currency effects and the weakness in most of the emerging markets had a strong negative impact on our first quarter revenue, in particular for our traditional businesses which are more exposed to these markets. Despite the negative effects of the strike at our Belgian manufacturing sites, we succeeded in improving our gross profit margin. Benefiting from our efficiency programs and our previously announced restructuring efforts, we achieved a positive net result. Being a major focus point, cash flow generation was strong due to our working capital management program. As a result, we further reduced our net financial debt. We believe the first half of the year 2014 will continue to show a soft business environment, but we will continue to improve our gross profit margin and we will continue to focus on cash flow generation. We stick to our medium term target of delivering a double digit recurring EBITDA percentage, said Christian Reinaudo, President and CEO of the Agfa-Gevaert Group.

The Agfa-Gevaert Group s first quarter revenue declined by 11.8 percent to 622 million Euro. Excluding currency-related effects, the decline amounted to 8.8 percent. The top line was also impacted by the rather weak performance in most of the emerging markets and by the product portfolio rationalization in Agfa Graphics. While Agfa HealthCare s Direct Radiography and Enterprise IT businesses performed well, the Imaging IT activities suffered from the uncertain investment climate in the US healthcare sector.

In spite of the strike, the Group s gross profit margin improved from 28.8 percent in the first quarter of 2013 to 29.3 percent. The main drivers behind the improvement were the targeted efficiency programs and positive raw material effects.

As a percentage of revenue, Selling and General Administration expenses amounted to 20.6 percent.

R&D expenses were lower than in the first quarter of 2013 as a result of efficiency improvements and product portfolio rationalization actions.

Recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) and recurring EBIT remained almost stable at 5.5 percent and 2.6 percent of revenue respectively.

Restructuring and non-recurring items resulted in an expense of 1 million Euro, versus an expense of 9 million Euro in the first quarter of 2013.

The net finance costs amounted to 14 million Euro, versus 16 million Euro in 2013.

Overall, the tax expense was nil.

The Group posted a net profit of 1 million Euro, versus minus 12 million Euro in the first quarter of 2013. At the end of the quarter, total assets were 2,559 million Euro, compared to 2,568 million Euro at the end of 2013. Inventories amounted to 544 million Euro (100 days), versus 112 days in the first quarter of 2013.

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Source: TendersInfo (India)

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