First quarter results of Agfa

Excluding currency fluctuations, total sales would have decreased only 1.4 percent, according to an Agfa press release.

Thanks to the beneficial effects of the Horizon plan, the company succeeded in further improving its profit margin, which reached 43.9 percent compared with 43.4 percent in the first quarter last year. The non-operating result remained almost stable at minus Euro 21 million. The profit before taxes was Euro 64 million, compared with Euro 58 million in the same period last year. The net profit nearly doubled to Euro 39 million.

Turnover in Graphic Systems decreased 9.2 percent to Euro 417 million, representing 40.6 percent of Agfa’s total sales. Technical Imaging comprising Healthcare, Non-Destructive Testing and Industrial Imaging, recorded sales of Euro 418 million, while the operating result improved by more than 50 percent to Euro 72.1 million. Return on sales in the Technical Imaging group exceeded 17 percent, with Healthcare being Agfa’s most profitable business group with a return on sales of 19.7 percent. Agfa is still awaiting regulatory approval for the sale of its non-destructive testing business to General Electric Aircraft Engines division.

Sales of Consumer Imaging decreased 16.9 percent to Euro 192 million. Without the influence of currency exchange rates, the decrease would have been 11 percent, mainly due to the ongoing economic weakness and the reduced travel activities due to the war in the Middle East and the outbreak of the SARS disease. The operating result of the Consumer Imaging division fell from Euro 1.5 million in the first quarter 2002 to minus Euro 21.4 million in the first quarter this year. Since it is uncertain when the economy will recover, Agfa decided to take various immediate measures to restore profitability in Consumer Imaging and to adapt production to lower demand. The management team of Consumer Imaging has been reinforced, temporary unemployment has been installed and discussions with the social partners have already started to reduce working hours and to make additional workforce redundant. 200 jobs are planned to be cut in the production of film and photo finishing products.

Separately, Agfa’s Annual Shareholder Meeting has agreed to pay a gross dividend of Euro 0.50 for the 2002 fiscal year. At the Annual Meeting, John Buttrick and Monte Haymon were appointed to the Agfa Board as independent directors, as were Christian Leysen as a representative of the Gevaert group, and Marc Gedopt, who succeeds CFAO André Bergen.