Dear shareholder,
Enclosed you find the results of the Agfa-Gevaert Group in the first quarter of 2007.
Agfa-Gevaert's net result more than doubled to 41 million Euro, despite significantly higher silver and aluminum costs. The higher share of profitable digital systems and services in the Group's sales and the reduction of our expenses were the main drivers behind this evolution. Sales increased only modestly with 0.4 percent (excluding currency effects) to 786 million Euro, mainly because of the declining analog businesses.
In Agfa Graphics, the shift from analog to digital solutions resulted in solid margins for the prepress segment, whereas the business group is investing heavily in the start-up of its industrial inkjet activities. For this business, Agfa Graphics anticipates increasing sales and the gradual elimination of the start-up losses in the course of the second half of the year.
Agfa HealthCare posted strong sales growth, driven by its innovative digital and IT solutions. Profitability improved as costs savings and the growing share of highly profitable services offset higher silver costs and expenses related to the introduction of the ORBIS hospital-wide IT solution in additional countries. As orders for IT remain strong, the business group expects this positive evolution to continue in the next quarters.
Agfa Specialty Products again reported very strong margins and the business group expects to further improve its position in its traditional film markets in the course of the year.
We are confident that the positive effects of our strategies and our measures to reduce our expenses will further increase in all business groups. However, we also expect that high silver and aluminum costs and adverse currency effects will continue to impact our results in the months to come. In February, we announced the plan to split the Group into three independent, listed companies. We are progressing well and we will submit the demerger for approval to our shareholders at an Extraordinary General Meeting later this year.
We thank you for your interest in our company.
Katia Waegemans
Director Corporate Communication & IR
