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Introduction & Market Context
Agfa-Gevaert NV (BR:AGFB) presented its second quarter 2025 results on August 27, revealing a stark contrast between its growth segments and traditional businesses. The company’s stock dropped 6.64% following the presentation, closing at €1.06, as investors reacted to the mixed performance across divisions and overall decline in profitability.
The presentation highlighted the ongoing transformation of Agfa’s business model, with its Healthcare IT division showing strong growth while the company’s traditional film businesses continued to decline. This quarter’s results demonstrate both the progress and challenges in Agfa’s strategic shift toward higher-margin growth segments.
Quarterly Performance Highlights
Agfa reported Q2 2025 sales of €281 million, representing a 1.6% decrease compared to the same period last year. More concerning for investors was the significant drop in adjusted EBITDA, which fell to €13 million (4.7% of sales) from €22 million (7.9% of sales) in Q2 2024, marking a 41.2% decline.
The company’s performance varied significantly across divisions, with Healthcare IT emerging as the clear bright spot. This division posted a 4.8% increase in revenue and an impressive 57.3% growth in adjusted EBITDA compared to Q2 2024.
As shown in the following chart of divisional performance:
The Digital Print & Chemicals (DPC) division also showed resilience with a 6.1% revenue increase to €118 million, though its adjusted EBITDA declined slightly from €12 million to €10 million. Meanwhile, the Radiology Solutions division experienced a significant decline, with revenue dropping from €98 million to €80 million and adjusted EBITDA falling from €7 million to €2 million.
The contrast between Agfa’s growth engines and mature businesses is clearly illustrated in this comparison:
The company’s mature businesses, which include traditional film products, saw both revenue and adjusted EBITDA decline, while its growth engines (primarily Healthcare IT and parts of DPC) managed modest growth in both metrics.
Detailed Financial Analysis
The adjusted EBITDA bridge reveals the key factors behind the overall profitability decline:
While Healthcare IT contributed positively with a €5 million increase in gross profit, and DPC added €2 million, these gains were more than offset by a €13 million decline in gross profit from the Radiology Solutions division. This underscores the significant impact of the declining film business on Agfa’s overall profitability.
Free cash flow was negative at -€3 million for the quarter, with capital expenditures of €12 million being a significant factor:
The company’s debt position has also deteriorated over time, with net financial debt excluding IFRS 16 leases rising to €85 million in Q2 2025, compared to a net cash position of €64 million in Q1 2023:
In response to its changing financial position, Agfa secured a new three-year revolving credit facility of €180 million on August 1, 2025, maturing in August 2028. The company’s leverage ratio stands at 2.0, while its interest cover ratio is 9.8.
Healthcare IT: A Growth Driver
The Healthcare IT division emerged as Agfa’s strongest performer in Q2 2025, with revenue reaching €61 million, up 4.8% year-over-year. More impressively, the division’s adjusted EBITDA jumped 57.3% to €9 million, demonstrating significant margin expansion.
The division’s performance metrics show substantial improvement across the board:
Key highlights for Healthcare IT include strong performance in North America, 4.1% growth in recurring revenue, and continued high customer satisfaction. The division’s order composition for Q2 2025 included 4% cloud deals, 18% from new customers, with 79% coming from project business and 21% from recurring business.
Strategic Initiatives & Outlook
Agfa’s presentation reinforces its strategic focus on growing its Healthcare IT business while managing the decline in its traditional film segments. The Digital Print & Chemicals division also remains a focus area, with the company highlighting the development of new solutions and field testing of its first SpeedSet single-pass water-based packaging printer.
The company’s financial results for Q2 2025 show both progress and challenges in this strategic transformation. While Healthcare IT is delivering strong growth and improving profitability, the decline in the film business is happening at a pace that is currently outweighing these gains.
This quarter’s results represent a continuation of trends seen in Q1 2025, where the company also reported mixed results with strong Healthcare IT performance offset by challenges in other segments. However, the EBITDA decline in Q2 is more pronounced than the "stable EBITDA" reported in Q1, suggesting an acceleration of these trends.
With its new credit facility in place and continued investment in growth areas, Agfa appears committed to its transformation strategy despite the near-term pressure on overall profitability and cash flow. Investors will likely be watching closely to see if the growth in Healthcare IT and Digital Print & Chemicals can accelerate enough to offset the continuing decline in the company’s traditional businesses.
Full presentation:
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