Agfa has reported encouraging results for “most” of its activities in Q1 as cost reductions and price increases begin to bear fruit.
The Q1 period is typically “seasonally weak” for the Belgium-headquartered manufacturer.
Overall group sales were down 9% at €396m, while EBITDA fell by 36.3% to €15m.
At Offset Solutions, Agfa’s biggest business unit, sales were down 9.7% year-on-year at €169m, while adjusted EBITDA slumped by nearly 57% to €1.6m.
However, compared with Q4 of 2020, the unit’s gross margin improved from 20.6% to 23.6%, “which shows that the measures taken to restore the profitability of this division are beginning to kick in”, Agfa said.
Agfa had previously announced that it was spinning off the business into a separate entity and reviewing its business model.
The manufacturer said that while an improvement in performance was expected for the Offset Solutions wing, “this division will continue to suffer from inflationary pressure and the structural decline of the offset industry”.
Sales at Agfa’s Digital Print & Chemicals wing, which includes large-format printers and ink, sales were down 1.9% at €73m. Agfa said its large-format business had started to recover from the impact of Covid-19, while “the ink product ranges for sign and display applications continued to perform well”.
CEO Pascal Juery said its “growth engines” of HealthCare IT and Digital Print & Chemicals had reported solid margin performances, “which were offset by volume declines for some of our traditional products, as well as inflationary pressure”.
The Radiology Solutions division faced volume and price pressure for its medical film products due to the introduction of new centralised procurement practices in China.
“Our disciplined working capital management and our broad cost reduction program continued to be successful. Additionally, several divisions announced price increase programs, which will allow us – when they will be in full effect – to mitigate the impact of raw material, packaging and freight cost inflation on our profitability,” he stated, and said he expected this momentum to continue in Q2.