Dear shareholder,
Enclosed you find the results of the Agfa-Gevaert Group in the third quarter of 2007.
Several internal and external factors had a considerable adverse impact on our results. Although we succeeded in lowering our sales and general administration costs, our profitability was affected by the high raw material costs and by the further depreciation of the US dollar, which weakened our competitiveness, especially in the healthcare market.
In local currency, Agfa Graphics' sales increased slightly compared to last year's third quarter. In spite of the considerable impact of high aluminium and silver costs, the profitability of the prepress segment remained stable due to the implementation of the cost savings plan and the shift to more profitable digital prepress systems. On the other hand, the market introduction of the industrial inkjet portfolio is taking more time than foreseen.
Agfa HealthCare's sales were negatively impacted by the strength of the Euro and its additional effect on price erosion and by unexpected high stock levels of medical film at dealers. The business group's SG&A costs decreased significantly, but profitability was affected by the weaker sales, negative mix and currency effects, higher silver costs and certain one-off effects. Several measures have been taken to strengthen HealthCare's management and to improve its operational performance.
Agfa Specialty Products posted solid third quarter sales, but its profitability was affected by higher silver costs and negative mix effects.
We are on track with the implementation of all technical elements in the Group's demerger process. In view of the recent performance of the company, the Board of Directors has decided to give absolute priority to the operational improvement and decided to implement several management changes. Ludo Verhoeven has been asked to extend his role and assume the position of CEO, in addition to his responsibilities as Chairman of the Board. A special Committee of Directors will assist him in closely monitoring the progress of the operational performance.
We thank you for your interest in our company.
Katia Waegemans
Director Corporate Communication & IR
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Katia Waegemans
Director Corporate Communication and Investor Relations
Agfa-Gevaert N.V.
Septestraat 27, B-2640 Mortsel, Belgium
tel: +32 3 444 7124 --- fax: +32 3 444 4485
mobile: +32 494 56 10 70
e-mail: katia.waegemans@agfa.com
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