Agfa starts sales talks as Q3 results released
Wednesday, November 9, 2016
Agfa has entered into “non-exclusive discussions” with CompuGroup Medical SE after the latter expressed interest in buying the business, and released its Q3 results, which show a dip in sales, but improving profitability.
In a statement released last night, Agfa said: “The board of directors of Agfa, together with its financial and legal advisors, has evaluated CompuGroup's expression of interest.
“Taking into account the interests of its shareholders and other stakeholders, the board of directors of Agfa has decided to engage into a non-exclusive discussion with CompuGroup.”
This latest update follows Agfa confirming last month that it had been approached by CompuGroup.
The company reiterated that even though formal discussions have begun “there is no certainty as to whether a public offer for all issued and outstanding shares of Agfa will materialise.”
In its third-quarter results to 30 September 2016, which were released this morning (9 November), group sales fell 5.4% year-on-year to €625m (£556m). However EBITDA rose 5% to €63m, which was largely attributed to efficiency improvements and favourable raw material prices.
“Driven by the success of our efficiency measures and by favorable raw material effects, the positive profitability trend continued in the third quarter,” said Agfa president and chief executive Christian Reinaudo.
“We expect our full-year recurring EBITDA to reach 10% of revenue, which is the main target we set ourselves for 2016.”
Sales in the Graphics business, still its biggest division, showed the steepest decline across group, falling from €338m in Q3 2015 to €308m this year, EBITDA also slipped 2% €23.9m.
Agfa said that the pre-press segment was still suffering from “severe competitive pressure” in the offset plate market, but added that its inkjet segment would benefit in Q4 from strong sales at Drupa earlier this year.
Sales in its more profitable HealthCare division dipped slightly, by 1.8% year-on-year, to €271m. While EBITDA jumped 7.7% to €36.5m.
Sales and EBITDA at Agfa’s Speciality Products wing remained steady at €46m (€47m Q3 2015) and €3.4m (€3.5m) respectively.
Reinaudo said that after improving the profitability of its main Graphics and HealthCare businesses, the focus would now switch to sales growth.
“We are very pleased with the continued strong performance of HealthCare IT. We will implement various projects aiming at limiting the decline of our traditional businesses and at boosting the success of our growth engines. Reversing the organic top line erosion is our top priority,” he said.