Agfa shows signs of slow recovery

Action to cut costs and increase efficiency has helped Agfa HealthCare to offset a decline in revenue and to increase profitability.

Agfa-Gevaert's full-year results say the recession has affected its healthcare division, particularly imaging, but that revenue picked up in the fourth quarter of last year.  

"Although some care organisations were postponing their investment in equipment and IT, Agfa HealthCare was able to safeguard its sales in line with expectations," the results ssay.

However, "the revenue growth in IT did not suffiice to fully compensate for the market driven revenue decline in imaging."

Despite this, cost reductions, improved efficency and lower raw material prices meant the business group "considerably improved its profitability throughout the year."

The group announced that the healthcare division saw its revenue drop 3.7%, from €1,223m in 2008 to €1,178m in 2009. However, EBITDA increased from €115.8 to €168.0 or from 9.5% of revenue to 14.3%.

The healthcare division showed greater resilience to the economic crisis than the group overall, which saw its revenue fall 9.1% in comparison to the previous year, with gross profit down 7.8% from €961m in 2008 to €886m in 2009.

Agfa HealthCare had a particularly good fourth quarter, with IT reporting strong revenue figures and imaging picking up revenue as a result of new digital radiology products.

During 2009, the company introduced a number of new products including DX-G computer radiography system and new versions of its IMPAX picture archiving and administration system.

In Q4, Agfa HealthCare also announced the acquisition of Insight Agents GmBH, a European producer of contrast media that is increasingly used for diagnostic imaging.

It further signed a number of new contracts over the year, including more than 50 new agreements worldwide for IMPAX and RIS (radiology information systems) more than 40 new agreements for its ORBIS system and a new deal in China to provide hospital imagining systems worth around €350m.

The company now anticipates a “weaker top line performances” in the Q1 of 2010 following a strong end to 2009. However, it expects that the final results for 2010 will be in line with the previous year.

Link: End of year results