Release Date: March 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Agfa-Gevaert NV (XBRU:AGFB, Financial) reported record sales and growth in Q4 2024 for its key segments: HealthCare IT, Digital Printing Solutions, and ZIRFON.
- The company successfully launched cloud solutions, contributing to increased customer satisfaction and order intake.
- Digital Printing Solutions (DPS) experienced a 15% growth, driven by new product launches and strategic partnerships.
- The company has implemented a transformation program to address the decline in its film business, with expected cost savings of over EUR 50 million.
- Agfa-Gevaert NV (XBRU:AGFB) maintained stable gross profit margins despite volume losses, thanks to effective cost control and operational efficiency.
Negative Points
- The film business experienced a significant decline, impacting overall company performance and necessitating a transformation program.
- Transition to cloud-based models in HealthCare IT delayed revenue and margin recognition, affecting short-term financial performance.
- Radiology solutions faced a steep decline in medical film sales, which could not be fully offset by growth in digital radiography.
- The company reported a net financial loss of EUR 75 million for the year, partly due to restructuring and impairment costs.
- Free cash flow for the full year was negative at EUR 46 million, despite a positive Q4 cash flow, due to higher working capital and capital investments.
Q & A Highlights
Q: Based on your intake, it seems that the order book in healthcare IT is up with about 30%, 40%. You highlight the excellent momentum in healthcare IT with the higher sales and the revenue which has already become a sizeable part of the day. So I'm a bit confused as to why you guys are stable performance in 2025. Could you clarify that, please?
A: Yes. But just because of the nature of the order intake has changed and again, if I was in a project-based, you could roughly say that whatever you take in order intake for the zero and will be revenue recognized in the year N+1. But it's not anymore the case, and when you recognize the cell, you recognize the margin and that if you have now a recurring project instead of putting these projects, this order intake, as cells, it will be spread out five, six, seven, eight years depending on the length of the contracts. So going from a project model to a subscription model has a mechanical impact to delay revenue and margin recognition. So if we were in an environment where we were not growing, actually we would see sales decreasing significantly and it decreasing significantly before. During the transition year, it's not the case here due to the fact that we are growing.
Q: How much growth do you actually expect from in '25 because you mentioned the number of investments is up?
A: In '24 we grew by close to 30%, I think in '25 we should see something that will be in the same order of magnitude will not be massively more is what we believe. We do believe that the market will pick up more than that, but it will be in '26, '27. We see now bigger projects being announced and companies again starting to look at real projects, not just high-level dreams, but it will indeed become more for the answering years.
Q: Can you give us, on the division by division and impact of potential US tariffs and what's your US exposure division by division?
A: The area where we are exposed is mainly because we have a Canadian plant for printers, so of course this is one plant that supplies the world and of course North America. We have also a plant in the UK where we also assemble printers. We could imagine using the UK plant as a backup. There is no talk of tariffs for the time being but that could come tomorrow. We might have positive impact, for instance, for DR because actually most some of our competitors are doing VR equipment from China. If they want to go to the US, they have this for the time being we don't from Europe or the countries where we operate.
Q: What's your situation in China?
A: The decrease of the medical market is mainly in China. China is more than 50% of the world market for film, and the situation we are seeing in China is actually a market decrease due to some digitalization initiatives in China.
Q: On the printing division, can you quantify the potential of the BHS partnership and the number of targets for the Speedset machines?
A: On BHS, these machines are big and take a long time to install. In the first period, we will see equipment sales before we actually start seeing substantial ink sales. We are indeed the preferred partner for BHS, but these will be open systems so we will not be the only supplier. On Speedset, we expect to finalize the sale of the data in the first half of the year. The number of machines sold will depend on market conditions and customer demand.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.