The €975m (£848.2m) sale to the Dedalus Group was completed today (5 May). The proposed disposal was announced in December.
Agfa’s HealthCare Imaging IT business does not form part of the sale, and Agfa said it continued to be “a key business” for the group.
Juéry, who took over in February, said: “The sale of this business is a major step in our transformation process. Given the uncertainty of the current economic context, at this point in time we choose to use the proceeds of the sale to secure the future of our company, to further execute the strategies of our divisions and to address long term liabilities.”
Even prior to the Covid-19 pandemic Agfa had been facing a number of challenges at its largest business unit – Offset Solutions – which includes printing plates and film and had sales of €843m last year.
It accounts for 38% of sales at the €2.24bn turnover group.
The other divisions, by size, are: Radiology Solutions (24% of sales), HealthCare IT (22%), and Digital Print & Chemical (16%).
All divisions bar Offset Solutions delivered underlying profit growth
Agfa said that the division operated in a market that was “characterised by multiple challenges”.
“One of the main priorities of the Agfa-Gevaert Group is to implement a comprehensive plan to improve the profitability of the Offset Solutions division,” it stated.
Agfa also booked a €66.7m impairment charge against the unit in its year-end results.
Offset Solutions is the group’s least-profitable business. Adjusted EBITDA at the operation collapsed by nearly 60% last year, falling from €41m to €16.5m.
The unit posted a bottom line EBIT loss of €1.4m (2018 EBIT profit: €19.7m).
Sales at Offset Solutions were “almost stable”, slipping by 0.8%.
Agfa said the alliance with Chinese manufacturer Lucky HuaGuang Graphics “started to show in the division’s top line” by mid-year.
“The offset industry is marked by the strong decline in demand for analogue prepress technology and decreasing newspaper and commercial print volumes. The division also continues to face price pressure, caused by intense competition, as well as high aluminium costs,” Agfa stated.
Gross profit margins decreased from 26.1% to 22.9%, partly due to the “dilutive effect related to the consolidation of the sales coming from the Lucky alliance”.
Sales at Digital Print & Chemicals, which includes Agfa’s inkjet business, rose by 5.5% to €355m, while adjusted EBITDA fell by 14% to €29.3m.
“As the main effect of the strategic alliance for UV digital packaging inks with Siegwerk Druckfarben has come to an end, the 2019 results were negatively influenced. Excluding this effect, the adjusted EBIT would have increased substantially,” Agfa stated.
In a further statement regarding the measures it was taking to deal with the coronavirus pandemic, Agfa said it was striving to “ensure business continuity to the highest level as possible”.
“We are in solidarity with you and will support you as much as possible, without compromising the safety of your employees and ours… We will strive to deliver your machines and consumables on time. In case of any delay we will contact you personally. Your service team can be reached remotely in case of emergencies.”
