Agfa-Gevaert NV

welcome to the ACFA third quarter 2024 results conference call. Please note that this conference is being recorded and that for duration of the call, your lines will be on listen only. However, you'll have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Pascal Jouery, CEO, to begin today's conference. Thank you.

Thank you very much, François. Hello, everyone. Welcome to the call. I'm sitting in Motsul today with our new CFO, Fiona Lam, with Vivian Dictus from Investment Relations, and with my colleagues from the Executive Committee of ACFA. Today, as Fiona joined us only a few weeks ago, I'm going to take the call as I did in the previous quarter. So don't be surprised. I'll be covering the full set of slides today. And, of course, we'll open up for questions after my messaging session. So first, what are the key takeaways of the Q3 results for AXA? Number one, I think DPC is on track for growth. Very good performance of DPC, top and bottom line, validating really the strategy of the company. Point number two, healthcare IT is officially a cloud platform. We have started our first ever cloud-enabled enterprise imaging software at customers in the U.S. So that makes us officially a cloud player. I think what is important for us is the traction that we have in the market. We have the highest ever order intakes that we've seen in the business. And the transition to the cloud is probably faster than we anticipated. And that is not without any consequence for the short-term delivery situation of the company because it does change the timing of revenue and margin. You know, going through the cloud is delaying this revenue and margin. But overall, we are very happy with where we are. We have launched cloud solutions barely a year ago And it's now a significant part of our order intake. Then point number three, very difficult situation in film in terms of market background. We are seeing an accelerated decline of some key markets in the film. And when I say key markets, it's mainly on the medical field. and mainly focused on specific geographies, like especially the China market. So in order to offset the impact of this decline, we have launched, as you know, a significant transformation program that we announced back in August. Today we have actually announced what would be the social impact of such a program in our Belgium operations. And we have initiated with our social partners the dialogue that will lead to the implementation of the program. So we confirmed the 50 million. We have announced the specific Belgium social impact today that could be as high as 530 job suppressions. And we have started the what I hope will be a constructive dialogue with our social partners in order to be ready for implementation as soon as in 2025. So that's really the three main messages. The growth engines are doing fine. DPC already on the delivery. LCI on the leading indicator of seeing the context of the cloud transition and a complex situation for film that we're tackling through this self-help productivity program overall. So now when we look at the numbers, you will see for iSCAR-IT, 23% increase in cloud monitoring, highest number of orders, 45% cloud-related for something that we launched only a year ago. meaning showing the excellent traction we've got in the market. More importantly, we are gaining customers, and this is something that needs to be really said here. We are now winning shares and winning customers in a significant way through this cloud transition. So overall, I'm very happy about it. It has an impact on the short term. I'll come back to that when I show you the numbers in the Alkaid system, because indeed, short term, it has an impact on the bottom line. DPC, double-digit top-line growth in our growth engines. So very happy about that. This is an acceleration of the growth. It was to be expected. I will explain why. That's precisely the impact of the FI partnership and and the launches we've done at the beginning of the year and we have also our first packaging printer that is now in operation at our first customer on the first commercial printing will actually happen next week but the the machine is in place and has been printing now for a few weeks Then radiology, as I said, it's mainly a volume issue that we are seeing today. There's an accelerating decline in the market. And although DR is growing 9%, which is a big performance in the current market background, we cannot make this decrease. So if I turn to numbers in the next slide, of course, we have stable sales overall for the group, but a very contrasting situation. where radiology is decreasing double digits and DPC is increasing double digits, while the cells of SKIP are a bit eroded, I would say. Same situation on the bottom line. In TPT, radiology used to be the main moneymaker for the company that now is DPC, illustrated by the way the pivot of our portfolio as well. So small increase of profitability in DPC, radiology under pressure, and the reason why we are launching this productivity program, it will mainly impact the radiology, but other things mainly. And as I see a bit, profitability on quarter, you know, is not as good as last year, that's mainly due to the mix, and I will come back to also again the impact of the cloud transition. So now I'm going to turn to the P&L. So you see that I'm not coming back to the sales, which is overall flat when you remove the impact of currency. The decrease in gross profit is really mainly coming from the field impact. Operational expenses are higher. I believe quite under control and we will continue our effort in this area as well. So it translates into an EBITDA that is below last year, I would say, with a shift, with a specific shift of profitability of the different businesses as discussed. If I look at the bottom part of the P&L, we continue in terms of profitability adjustment which we used to call non-recurring adjustment and restructuring expense as you see are under control and much lower than as already stated. This will change with the implementation of course of the transformation program but this is we will be in a position to tell you about it when we have concluded the negotiation with the social partner, but I can already tell you that for this program, we expect it to be self-funding and actually cash-accretive to the group at... This call was interrupted.

This call was interrupted.