Agfa-Gevaert increases profit

Sales of Agfa’s Consumer Imaging division plunged 17.1 percent to Euro 442 million during the first half of 2003 due to unfavorable currency conditions and the weak economic environment. Without currency influences, the decrease would have been 12 percent. The operating result in the Consumer Imaging division turned from a profit of Euro 24.7 million in the first half of 2002 to a loss of 24.9 million in the first six months of this year. The company is already implementing measures to cut costs and to develop new business models that match the changing market conditions better. According to an Agfa press release, the management has identified a cost cutting potential of approximately Euro 100 million per year in the production, research and development, sales marketing and administration expenses of Consumer Imaging. Approximately 750 jobs, including 200 previously announced losses, will be cut.

Sales of Agfa’s Graphic Systems division were also affected by the weak economic environment with a drop of 11.7 percent to Euro 822 million or minus 3.8 percent without the influence of currency fluctuations. Technical Imaging, including Agfa’s successful HealthCare business, decreased by 5.9 percent to Euro 860 million during the first half of 2003, but showed an increase of 3,7 percent without the influence of currency fluctuations. The operating result of the Technical Imaging division increased by 45.2 percent to Euro 152.7 million, while Graphic Systems showed a positive result of + 9.5 percent to Euro 61 million.

For the full year 2003, the Agfa management is confident for the Graphic Systems and HealthCare division, if the signs of an economic rebound continue. Due to the uncertainties in the consumer market and the additional restructuring costs for the repositioning of the Consumer Imaging business, the management is reluctant to precisely forecast the operating results of the Agfa-Gevaert Group in the second half of 2003.