Agfa plans further restructure at offset wing
Thursday, January 21, 2021
Agfa intends to further restructure its printing business with plans to make its Offset Solutions wing a separate legal entity and streamline its product range.
Offset Solutions includes printing plates and film and its last full year results, for 2019, was Agfa’s largest business unit with sales of €843m (£746m), accounting for 38% of sales at the €2.24bn turnover group.
Prior to the Covid-19 pandemic Agfa had been wrangling with a number of challenges at the division, which was Agfa’s only business unit not to deliver underlying profit growth in 2019. Adjusted EBITDA at Offset Solutions fell from €41m to €16.5m and the unit made a €1.4m loss at the adjusted EBIT level.
Last year the division also closed two plates plants: Leeds in the UK, and Pont-à-Marcq in France.
At the time of Agfa's Q3 2020 results, president and group CEO Pascal Juéry said: “The group’s profitability was affected by the ongoing issues in the offset printing industry, which accelerated due to the Covid-19 pandemic. We are taking the necessary steps to secure our position in this industry and to restore profitability.”
Yesterday (20 January), Agfa’s board agreed to put the Offset Solutions activities into a standalone legal entity, within the Agfa-Gevaert Group.
“To improve profitability and to address the significant decline in market demand, Agfa is reviewing its offset business model, simplifying its organisation and streamlining its product offering.
“This intended reorganisation is part of the strategic transformation program for the Agfa-Gevaert Group,” the firm said.
The move will spark speculation that the group could try to sell or spin-off its offset activities.
However, Eddie Williams, Agfa's head of sales for commercial print, said the focus was on getting the business unit in good shape for the future and readying it for further likely changes in the industry.
"Business is not going to come back to where it was. It's about understanding how we can turn the division back to profitability, first and foremost.
"The big three – us, Kodak and Fujifilm – can't continue as we are. There's overcapacity, pressure on prices, and reduced volumes every year," Williams stated.
"We are not chasing volume, we are focused on value-added business as opposed to customers who just see plates as a commodity."
Agfa’s Offset Solutions business includes offset plates; CTP systems; software systems including colour management and web-to-print; pressroom consumables; contact, camera and recording film; and proofing media.
The group’s large-format and industrial inkjet printing systems are part of the separate Digital Print & Chemicals wing.
A company spokesperson said it was “way too early” to say what direction the review would take the business, as the exercise had only just begun.
“However it will enable us now to increase the focus on the profitability of the Offset division. In the long term it will give us the flexibility to participate in the changes in industry,” the spokesperson said.
Agfa is understood to have been working with Boston Consulting Group on a group-wide basis since last year.
The manufacturer has had a partnership with state-owned Chinese plate manufacturer Lucky HuaGuang since the summer of 2018.