Agfa-Gevaert has released third quarter figures that show “decent top line recovery”, while warning of increasing inflationary pressure and ongoing supply chain issues.
“Businesswise, we saw a decent recovery of market demand for most of our activities, but on the other hand all divisions somehow suffered from the surging cost inflation and supply chain issues. Due to successful price actions for our film products and printing plates, as well as strict cost management, our margins remained at a decent level compared to last year. We also managed to keep our working capital stable as a percentage of sales. Going forward, we will continue to adapt our prices to the situation on the raw material markets and cost management will remain one of our top priorities,” said Pascal Juéry, president and CEO, Agfa-Gevaert.
The group’s revenue for the three-months to 30 September was 439m Euro, up 7.2% on Qs 2020. Gross profit (before restructuring and non-recurring costs) was 118m Euro, up 5.4% on the same period last year.
Supported by price increases and volume increases, both the digital print and chemicals division, and the offset solutions division significantly improved their top line compared to the Covid-impacted third quarter of 2020. The group said that within its digital print and chemicals arm “further price increases will be communicated in the near future”.
In a statement Agfa said that profitability of the sign and display part of the business improved considerably, but on the other hand high cost inflation had a strong impact on the margins of the film products. Mainly impacted by higher silver costs and logistic challenges, the division’s gross profit margin decreased to 24.5% of revenue (27.1% in the third quarter of 2020). The adjusted EBITDA margin evolved from 6.2% of revenue (4.3m Euro in absolute figures) in the third quarter of 2020 to 4.7% (3.8m Euro in absolute figures). Adjusted EBIT reached 0.9m Euro (1.1% of revenue) in the third quarter of 2021 versus 1.7m Euro (2.5% of revenue) in the third quarter of 2020.
In the field of digital print, the gradual comeback of trade events clearly improved market dynamics. The sign and display business booked strong top and bottom line growth. The ink product ranges for sign and display applications continued to perform well, exceeding pre-Covid levels.
In spite of industry-wide logistics challenges, the wide-format printing equipment business continued to recover from the strong Covid-19 impact. Sales of inks for industrial applications continued to grow strongly, partly due to the solutions for new digital printing applications, such as laminate floorings, furniture panels and leather decoration.
As a key sustainability measure, Agfa recently took into service its new manufacturing plant for water-based inkjet inks. The new facility enables Agfa to be a key supplier of such inks for a wide range of novel applications. In the third quarter, leading décor paper printing company Interprint (Germany) expanded its product range by deploying Agfa’s water-based pigmented inkjet ink set.
In the offset print division Agfa improved its top line by 13.0% (excluding currency effects) compared to the third quarter of 2020. To improve profitability and to address the decline in market demand, Agfa is reviewing its offset business model, simplifying its organisation and streamlining its product offering.
