Belgian-German printer manufacturer Agfa-Gevaert was “strongly impacted by cost inflation and supply chain issues” in Q2 2022 but reported continued revenue growth in its sign & display business. “The top line of the wide-format printing equipment business continued to recover from the strong COVID-19 impact.” Agfa's integration of the newly-acquired Inca Onset printers is progressing, with Agfa's own inks now certified for Inca.
Inca Digital Onset X3 with ABB robotic load/unload
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| "Turbulent economic and geopolitical times": Agfa CEO Pascal Juéry |
“In these turbulent economic and geopolitical times, we continue to focus on the future,” said Pascal Juéry, president and CEO of the Agfa-Gevaert Group. “We have launched engineering studies to prepare an investment in a new production facility for our Zirfon membranes for hydrogen production at our Mortsel site, which will allow us to meet the strong increase in demand.
“We acquired and integrated Inca Digital Printers, a leading developer and manufacturer of advanced high speed printing and production technologies. Our inks are being certified to be used on the Onset printer range.
“Increased investments in R&D and commercial resources should enable the HealthCare IT division to generate profitable growth. The partnership with Atos for our internal IT activities and the actions to re-organize our internal financial services are expected to bring agility and simplification to Agfa’s operating model. These major steps in our transformation journey will enable us to increase our focus on our growth businesses, which is crucial to our future success in our markets.
“Operationally, the second quarter reflects the current inflationary environment as well as the impact of China lockdowns,” Juéry said. “The Group’s top line growth was driven by volume growth in the Digital Print & Chemicals division and pricing actions in the Offset Solutions division. We experienced the full impact of cost inflation and supply chain issues on our profitability and working capital in the second quarter.”
Adjusted EBITDA decreased from 40 million Euro in the second quarter of 2021 to 32 million Euro. Adjusted EBIT was 16 million Euro, versus 25 million Euro in the second quarter of 2021. The Agfa-Gevaert Group posted a net loss of 13 million Euro.
Digital Print & Chemicals – Q2 2022
“In spite of supply chain issues, the Digital Print & Chemicals division’s top line [revenue] grew substantially versus the second quarter of 2021,” the company said. “Price increases have been implemented in almost all business areas to tackle the increasing raw material, packaging, energy and freight costs. The full impact of these price increases will become visible towards the end of the year.
“In the field of digital print, the top line of the sign & display business continued to grow. The ink product ranges for sign & display applications continued to perform well, clearly exceeding pre-COVID levels. In spite of industry-wide logistic challenges for the high-end equipment, the top line of the wide-format printing equipment business continued to recover from the strong COVID-19 impact. Especially for the larger printers, the order book has grown with a double-digit percentage since the start of the year.
“At the Fespa trade show on June 1, Agfa announced the closing of the acquisition of Inca Digital Printers, a UK based leading developer and manufacturer of advanced high-speed printing and production technologies for sign and display applications as well as for the rapidly growing digital printing market for packaging. The integration of the activities is evolving as planned and Agfa’s inks are being certified for use on the Onset printer range. At the Printing United Expo (Las Vegas –October 19-21), Inca’s Onset printing engine will be shown printing with Agfa’s inks for the first time.
“Agfa recently received orders for two units of the newly released InterioJet 2250i system for printing on décor paper used for interior decoration, such as laminate floors and furniture. These orders confirm Agfa’s technological leadership in this field. The systems will be installed in the coming quarters. A further ramp up of the order intake for InterioJet is expected over the next quarters.”
Outlook
The Agfa-Gevaert Group expects a continuing impact of cost inflation, supply chain issues and the uncertain geopolitical and economic situation in the coming quarters. Potential COVID-related lockdowns in China and other COVID-related effects might also have an impact. The Group is taking all necessary actions to operate in an increasingly complex business environment.
“Additional price actions are being taken to tackle cost inflation. Assuming that the uncertainty in most markets will not deteriorate, the second half of the year is expected to be better thanks to additional pricing actions coming into effect.
“Overall, the Agfa-Gevaert Group continues to focus on working capital improvements and cost management. The ongoing transformation actions are well on track and are expected to bring more agility and to further simplify the operations of the Group. They will also allow the Group to further reduce its costs from 2023 onwards."
Agfa is organizing the Offset Solutions activities into a stand-alone legal entity structure and organization within the Agfa-Gevaert Group. “The implementation of this project is proceeding according to plan," it said.
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