Earnings call transcript: AGFA Gevaert NV sees mixed Q1 2025 results

AGFA Gevaert NV reported mixed financial results for Q1 2025, with stable EBITDA but a 3% decline in total sales. Despite challenges in some sectors, the company highlighted strong performance in its Healthcare IT segment. The stock price fell by 3.33% as investors reacted to the earnings call details. According to InvestingPro analysis, the company’s shares appear undervalued, with a P/E ratio of 7.66 and strong revenue growth of 13.34% over the last twelve months.

Key Takeaways

• EBITDA remained stable year-over-year.
• Total sales fell by 3%, with contrasting performance across business segments.
• Healthcare IT achieved a record 63% increase in order intake.
• The stock price dropped by 3.33% following the earnings report.

Company Performance

AGFA Gevaert NV’s Q1 2025 performance showcased stability in EBITDA compared to the previous year. However, the company faced a 3% decline in total sales, attributed to varied performance between its growth engines and mature businesses. The Healthcare IT segment stood out with a significant increase in order intake, while the film business’s decline impacted gross profit.

Financial Highlights

• Revenue: Decreased by 3% compared to the previous year.
• Net financial debt: €72 million in Q1.
• Net pension debt: Reduced from €511 million to below €400 million.

Market Reaction

AGFA Gevaert NV’s stock experienced a 3.33% decline, with the price change reflecting investor concerns over the mixed financial results. The stock remains within its 52-week range, indicating a cautious market response.

Outlook & Guidance

The company anticipates an improved outlook for its Healthcare IT segment and expects growth in Digital Printing Solutions’ top line and profitability. However, challenges persist in the Radiology Solutions market, particularly in China. AGFA Gevaert NV projects a recovery in the Green Hydrogen market by 2026-2027. Analysts tracked by InvestingPro forecast EPS of $1.29 for FY2025, suggesting improved profitability ahead. For detailed analysis and comprehensive valuation metrics, investors can access the exclusive Pro Research Report, available to InvestingPro subscribers.

Executive Commentary

CEO Pascal Joueri emphasized the company’s strategic focus, stating, "The strategy works and the growth engines are delivering." He also addressed market share concerns, asserting, "We are not losing market share at all in this market."

Risks and Challenges

• Decline in total sales and specific market segments.
• Continued challenges in the Radiology Solutions market, especially in China.
• Project implementation delays in the Green Hydrogen market.

Q&A

During the earnings call, analysts inquired about the Green Hydrogen market dynamics, the company’s market share, and expectations for a 2026 market recovery. CEO Pascal Joueri provided insights into subsidy tracking for Green Hydrogen projects, underscoring the importance of operational demonstration to secure necessary support.

Full transcript - AGFA Gevaert NV (AGFB) Q1 2025:

Laura, Conference Coordinator: Hello, and welcome to the Oxford Group q one twenty twenty five results. My name is Laura, and I will be your coordinator for today’s event. Please note this call is being recorded. And for the duration of the call, your lines will be on listen only mode. However, you will have the opportunity to ask questions at the end of the call.

This can be done by pressing star one on your telephone keypad to register your question. I will now hand you over to your host, Pascal Joueri, CEO, to begin today’s conference. Thank you.

Pascal Joueri, CEO, Oxford Group: Thank you very much, Laura. Good morning to everyone. I’m sitting in Morsell with Fiona Lam, our CFO with Vivian Dictus, our Investment Relations Manager and the rest of the executive committee ready to answer your questions. So we are going to walk you through the Q1 results of the company. And without further ado, we’ll start.

So Q1, stable EBITDA compared to last year but with a very different sales and activity mix. And in fact, this is a story of, on the one side, the continuous decline of the film, which, as you know, has started to accelerate in 2024, and we are seeing this trend continuing, of course, in 2025. On the other hand, a good performance of the growth engines and, I would say, a good cost control overall. I’d like also to remind everyone that we are a seasonal business, that Q1 is normally the weakest quarter of the year, similar as last year. We typically generate 75% of our EBITDA in the second half of the year.

And therefore, the cash profile of the group is according to the seasonality, meaning a buildup of working capital in the first part of the year and a reduction during the second part of the year and most notably the fourth quarter, which is 45% of the EBITDA and the strongest quarter of the year. So this seasonality and pattern will be exactly the same in 2025. So overall, the key elements of the results. First, an extremely good performance of Health Care IT and probably better than our own expectations. Strong Q1 on two elements.

First, the leading indicator. We left ’24 with a less twelve months increase of order intake at 32%. At the end of Q1, we are at 63% increase. And that, I believe, is demonstrating the strong momentum we have in this market. What I’m also happy with, it’s with new customers, and we continue to conclude the cloud contract, meaning we are moving the business to more recurring revenue business model.

Top line increased by 12% in typically weaker quarter for HealthCare IT and adjusted EBITDA. Therefore, strong level of sales on the EBITDA, of course, increased to EUR 5,000,000. Last year, it was only a bit over EUR 1,000,000. So a clear also translation of this momentum into our P and L delivery. DPC, I would say DPC continued to progress.

The comment that I would like to make is we have seen an impact of the weaker investment climate in our equipment sales in BPS and also in in in hydro well, in, sorry, in hydrogen solutions. Somehow, we had a bit of a a a a a a pickup at the end of q one on on the strengths of a number of product innovation and in production. Nothing is broken in BPS at all. I think it was just a bit of the economic uncertainty that created that created a bit of a delay in investment decisions. But all our equipment and launches are very well received in the market, and our team sales, even in this context, continued to grow significantly double digits, although it’s a bit of a different mix.

So progress progress in BPS has been probably a bit weaker than what we thought, but we expect this to to to continue during to continue this progress during the year. Hydrogy, well, clearly, the impact of the decline of the medical field is really the main story, and especially in China, where we’ve seen a rapid decline, mid teens, about 15% to 16% decrease in our in our volumes, mostly related to China, which is the first market. And as you know, we have put in place a comprehensive savings plan that we are currently executing. In the meantime, we have also announced in April the shutdown of our finishing film factory in The US. It’s part also of this plan, which is not only a plan for Belgium, but a global a global footprint plan.

So overall, even if the performance is comparable to last year, it is done with a very different mix. And for me, the best news is really the good performance of HealthCare IT. If we turn to numbers, you see a minus 3% on top line, and this is exactly the trend I was describing and the one that we’ve been seeing now for a few quarters and even a few years, a decline of the maturity of the mature businesses and increase of our growth engines. And the trend is exactly the same for the EBITDA. So although it’s the two numbers for EBITDA are very comparable, it’s a very different way to produce the EBITDA.

We have translated it in order to be easier for you to understand, not in a division view, but in a business maturity view, and you can see the trend as it is. So continuous growth of the growth engine and decline of the mature businesses, whether it is in sales or in EBITDA. I’m going to now turn to Fiona, who will comment the bridge on the cash elements. Fiona?

Fiona Lam, CFO, Oxford Group: Thank you, Pascal. So a bit of insight on the adjusted EBITA. Like Pascal have said, our strategic transformation is working where you also see back in the in the results as well on bottom line. You see, we have been able to the growth engine has been able to compensate the losses in mature decline business. So even though we have done €8,000,000 sales and we have been able to deliver stable adjusted EBITDA, there is help by 1,000,000 positive exchange rate, and then you see the gross profits of health care IT and DPC compensated largely or fully offsetting the gross profit of radiology.

And then you see also in r and d, we had a conscious decision to invest in health care IT. Therefore, we have health IT investments a bit more, and we have some test r and d test credits that we need to compensate in the last quarter. And there, you also see in the part one of the transformation program on s g and a that we have been having very tight cost controls, and they also believe us to resolve. So therefore, we have been able to keep our EBITDA quite stable with $18,000,000 sales. Next slide, please.

In terms of cash flow, we we still are, let’s say, largely consuming 27,000,000 in q one. This has to do, like, the traditional of half a steep increase of working capital normally in q one and q two, and then stabilized the size, we start to decrease in q three and quite large steep decrease in q four. This seasonality is not unexpected, but that’s the seasonality we we would expect. So you see, at this moment, we are consuming 27,000,000 free cash flow. We have some higher CapEx spending, which we expected, not higher than expected.

We consciously invest still on our future growth business in c form r r and d, and we capture actually positive cash flow in building down our lease receivable long term lease receivables. So all in all, that leads to this final outcome of 27,000,000 negative free cash flow. All the rest are actually in line before we have expected. So nothing surprised us as as such in this free cash flow fund. Also, bit of insight on the evolution of the total debt has since, of course, 02/2023 until now.

What you see, the net financial debts excluding IFRS, so that’s really our net financial debt position. That has been, let’s say, evolved from a positive cash position to a net debt position of 72,000,000 in q one. On the other hand, you also see positively the net pension debt has reducing quite gradually year over year. So from 511,000,000 to now below 400,000,000. So it’s a a significant reduction the last two years on net pension debts as well.

Our current credit facility is 230,000,000 that will be mature in February. Like, already, you have seen, you know, annual report fee. We are, of course, working on the refinancing of these facilities with cooperation with the financial institutions. In terms of the governance, just to remind, the governance test is only valid for half year and year end. Of course, we calculate, of course, the ratios just to keep track of it.

So q one, the leverage ratio is 1.4 versus a governance of maximum three, and interest cover ratio is 11 versus a minimum of five. As you would know that we we we expect q two q ’3 normally to slightly increase our working capital and then we start to reduce. Therefore, it’s quite expected that the leverage ratio would raise in Q2 and Q3 and then again to deeply drop in end of Q4 again like last year. So that’s that would be the trend that we also expect

Pascal Joueri, CEO, Oxford Group: Thank you, Shona. Clearly linked to the seasonality of our business. This is the reason why we have this cycle during the year.

Fiona Lam, CFO, Oxford Group: Yes.

Pascal Joueri, CEO, Oxford Group: Now if I turn to the P and L, well, I think I already commented on it, negative top line, but with a very contrastive performance between gross engines and mature businesses, you see that gross profit is, in spite of the steep decline of the film, almost is quite almost stable, I would say, and even slightly better in terms of absolute margin. Operational expenses, as you see, we continue to make progress in not only controlling inflation, but actually decreasing actively the fixed cost base of the group, which leads to comparable EBITDA and actually improved the EBIT performance versus last year. In the rest of the P and L, of course, we continue to, I would say, ensure the transformation of the group through all our actions. And therefore, we we after EBIT, we still we still have restructuring expenses and the cost of transformation, which translates for a loss in the period. So if I turn to business, and I will start with HealthCare IT board.

Clearly, it’s a record after record we are breaking in terms of order intake, in absolute numbers, in increase of the order intake. I mean, that’s that’s trans that’s really showing the momentum we have in the market. I we have considerably improved our competitive positioning in this business, and we sit today among, I would say, the top of the league of the medical IT ranging provider. So for q one, cloud deals were 15% of total deals. Net new customers are showing the fact that we are gaining share in the market, 30% of the order intake.

And as you see, a mix of project versus recurring business order that is clearly increasing in the recurring side, which provides more visibility and which is a testimony of the business transformation we have undertaken. But, again, all these stems from, I would say, customer satisfaction. We have today, we are sitting at the orderly table in terms of customer satisfaction, which creates a very positive momentum for us commercially. And I can say that Q1 has been probably the busiest commercial Q1 that we ever had. We have a very strong pipeline.

So my comments really extend for the rest of the year. We see today, also IT doing probably better than what we thought a few months ago on the strength of this activity. So overall, I would say everything, all the indicators are really green in SAIC. Twelve percent in sales, well, again, q one is is normally the weakest quarter of the year, and this translates into EBITDA. You can see that the gross profit margin also has increased in the year from 44% to 48%, reflecting also the quality of the business we are we are lending with our with our customers.

For order intake, plus 63%, you know, it can be a bit lumpy quarter on quarter. So don’t expect that we’ll keep this level during the full year, but it will still be a spectacular increase again in ’25, of course. But I’m very pleased with the performance here. But if you look at the P and L, so you see sales translate in profit. Operational expenses are quite, let’s say, under control, and therefore, we have a strong EBITDA leverage.

If I now turn to DPC, so we have globally sales in line with Q1 twenty twenty four in DPS. Well, in fact, as I said, we had a bit of delayed investment decisions, thanks to the investment climate that is that has become more uncertain. It’s fair to say that the volatility created by the tariff situation didn’t help, And it’s still, by the way, still volatile today. And the overall anticipation of the economy has translated into more caution at our customers regarding investment. However, however, I can confirm that, you know, we are since a couple of years, we have been almost totally renewing our product portfolio through several innovative launches.

And I can tell you that the reception in the market is extremely good. We were last week at the digital printing sale in Europe, and we actually recorded record sales order intake, should I say, during this this fair, more than double what we’ve seen last year at the same event. So things are working. The good thing as well is even if equipment has been subdued in q one, ink is still going strong. A little bit less in capital and a little bit more in our OEM ink businesses.

So overall, ink remains a nice strong engine. So it’s not because we had a weak Q1 in equipment sales that it changes the fundamentals of the business. Absolutely not. Absolutely not. And what’s important for us is, again, the second part of the year and especially Q4 in sales in business.

The launches, I mean, five new engine launches in five m display. You you you can see our solution, you know, on the left hand side of the slide. It’s more and more very sophisticated with automated twenty four seven industrial printing solutions and very well received in the market. And in packaging, as you know, we announced the collaboration with BHS, and I’m happy to say that we have installed already the first print engine in the VHS line in during q one in The US. And we believe that the polychrome one will be done during the second part of the year.

So so, actually, the the collaboration is completing already today into concrete cells. And the beta test phase of the speed set, which has been working as a beta customer for a little bit over six months right now, we are coming to a point where we are very confident that this will be finalized during q two. That’s that’s our belief. We are we are very close to to it, and this will be feeding our future growth. Remember, I remind you that it’s a business growing 12% per year for a couple of years.

And if anything, we are expecting an accelerated growth from this initiative. And the new thing is we we had a position in Water Based Decor that was very subdued following the, I would say, energy crisis and inflation back in ’22. And we’ve seen a revival of this market, which is good news for us because we have solutions in place and leadership in this segment. So not an excellent quarter in equipment sales, but the fundamentals of the business remain strong, and we remain confident going forward on this in this activity. Green hydrogen, well, as you know, it’s been a couple of years where we have a bit of a contracted market picture.

We there is a delay, clearly, in the implementation of the pipeline of projects. We we are also seeing some electrolyzer manufacturers, you know, going out of business. So it’s the the the industry structure is changing, of course, and consolidating, I would say. The Western markets are still being a bit hindered by the regulatory issues, especially Europe and and North America is not also classified. And but we are seeing a very good momentum in Middle East, Africa, and Malaysia.

We we told you, I think, a few months ago that we had our first Indian customer. That’s a perfect illustration. So we have a global presence in Zircon, and we we we we we deliver throughout the world, actually. I think, you know, Zircon is the product of choice in the alkaline technology. And, actually, today, we are we are very busy expanding our reach and especially marketing our products in Asia with, I believe, success.

So, again, we are I’m very happy where where we are going in term, but it’s fair to say that the growth is gonna be quite subdued in ’25. In ’25, we will end up the construction of the new plant, which which will give us ample capacity to answer the market demand and actually probably a bit a bit too much with the current market demand. However, the new plant brings significant advantages in terms of productivity of the membrane. So we will we will benefit from this. So if I turn into numbers, you see that see that actually the stable stability in Q1 for DPS and Geniogen, the growth of sales in DPC comes, and that’s a bit of an exception from Field and Chemicals, which had a good quarter.

And the adjusted EBITDA is increasing, but that also reflects the fact that we had a little bit of a flatter performance for Q1 in our gross engines. If you turn to numbers, you see that gross profit is flat over here, that we continue to manage our operational expenses, I think, very responsibly, and that we continue to well, better performance than than last year in the business. Now let’s turn to Radiology Solutions. And, clearly, this is this is the area where we’ve been clearly impacted by the decline of the medical field market in China. As you know, we have put a plan in place.

We have made an agreement with Social Partner at the January, so we are starting to implement. As I speak, we are implementing, actually, putting in place all the social measures in order to to deliver the savings. So announcing the shutdown of the finishing plant in The US. So gradually, this will build up. But today, there is a bit there is a bit of a lag between the market impact on the ability to generate savings.

Regarding BR, the message I would like to pass on, last year, we had over 108% growth in BR. We are expecting also to continue the growth this year. And the way we differentiate India is really through AI and and software. So either to support the workflow, the convenience, if you want, for radiologists to add value on pathology detection and also to continue for IBM, which will be the best in class image processing software of the industry, which is the reason why we are able to outgrow the markets in India. But overall, I do have the solution is very severely impacted by the situation, of course, of scale when you see it in the numbers.

We we are sales are decreasing by 6060%, and EBITDA is fully negative in in q one. Q ’1 is also the weakest cluster typically in field, and the situation is in in China regarding the end market is further confirmed by the fact that, of course, you have supply chain adjustments, meaning reduction of inventory at which further amplify the this this move. But, again, the answer is what we are currently doing in terms of cost of 50,000,000 program that we are putting in place. So if you look at the numbers, in fact, sales minus 15%, gross profit impacted, but you see also that the cash and all expenses are being reduced also not as fast, of course, as the loss of the volume, but also significantly this in this context, and we have, of course, a lot more to deliver on this area. So overall, what does it mean for the outlook?

I would say, again, I repeat, the strategy works and the the growth engines are delivering. Now again, it’s not the first quarter was not ideal for equipment and for Tier one, but that’s just one quarter. It doesn’t change the whole trend. However, if I look at ’25 outlook compared to what we said a few months ago, I think we have a much better outlook for Health Care IT in the strength of the first quarter. And we are very confident given the quality of our leading indicators.

And so we clearly expect to improve our performance, yeah, quite quite well So it’s it’s probably an improvement of the guidance here. DPS, d p DPC, we will continue to grow in top line and profitability through the growth engines. And again, the first quarter has not has not put into question the overall trend. But if anything, of course, it has an impact.

We’re we’re gonna be progressing probably a bit less than what we thought because we believe that if there is an investment in well, a delay in investment, we’re not probably going to be able to catch it back, so so to speak. But but, again, I’m not concerned at all regarding the the DPS outlook. And here, we’ll continue to make progress in making the product. So we will continue to have efficiency gains, but we are not expecting growth in this market in terms of volumes for ’25. I think ’26 and ’27, we still believe that things are coming, projects are being prepared.

Radiology, we are we are not expecting we are expecting what we’ve seen in q one to continue. The trend is there. It’s not gonna improve. There is no turning back, and we will mitigate it through the savings program. But if anything, I would say the decline has been a little bit more pronounced than what we thought originally.

Just a point on the previous cash payment. Unfortunately, well, we have made progress, as you’ve seen, because we have received the from previous half of the undisputed amount, which represent 20 percent of the total amount that is due, and this amount was already paid to us. Actually, however, we have not yet any conclusion from the independent expert on the on our list. And, Of course, you’ll be the first ones to know when conclusion is reached on this area. Just we added a slide on tariff.

You have all the details here. Well, that’s a slide with, I would say, a short validity validity date because, you know, things are changing a bit over time. But the key message I would like to convey to you is the direct impact of tariff is neutral to positive for us. Meaning, actually, when we say neutral to positive, we mean that we are not impacted more than our competition. And in some cases, we are rather less impacted given our geographic footprint, especially for BPS, our plant in Canada, and our plant in The UK as well.

I’m sorry. So it’s okay. However however, the tariff impact for us is not so much a direct impact, but the impact of making all the goods more expensive, which in turn has an impact on the on the market demand, potential impact on the So we we remain a bit a bit cautious on this area. And, of course, as we know, this is a climate the situation of today might change tomorrow.

Just a word on on the transformation that I would like to to come back. As you know, we have chosen growth engines in which we have invested, and I just would like to come back on what we achieved, actually, the front two a bit. Have been working in DPS to totally upgrade portfolio of equipment. I was commenting that we have renewed almost totality of our current engine equipment in the past couple of years. We are still launching new products today.

We have grown grown the business significantly, meaning we’ve grown critical mass in terms of installed base of printers, and you’ve seen the impact of the ink. And we are we are entering the high growth packaging market and the single pass painting. So that that’s really the key achievement. So it it means we have everything in place to continue our growth and accelerate our growth, not only in silent display, but, of course, in in packaging. And the value creation in this business is really to grow the installed base.

Most of, I would say, the profit we make is on the recurring internal sales. And as you see, it continues to be a good cost engine for us even if you want. Green hydrogen, four years ago, it was an R and D project. So today, it’s an industrial business. I think, therefore, we still have work to do, but it’s clearly recognized as a global standard for h two membrane.

Should do if you ask, check GPT, what is the best membrane for alkali in our process, the answer will be their fault. So even AI agrees with us. We are able to monetize our first mover advantage. We have been able to manufacture very efficiently, and we are still continuing this journey. And as the IT, I think the turnaround that we have achieved is, I would call it spectacular in the in the past three years.

We have totally refreshed a new North American based leadership team. I remind you that North America is more than two thirds of the market. We have totally flipped the customer satisfaction, and we have now promoters and sitting in the top league in this area. And we have developed cloud solutions, which we are missing. And today, what we are seeing in terms of meeting indicators is surely the results of this very hard work for for the past for the past year, actually.

And and today, we are in a position where we are invited to more deals. We are winning more deals. We are winning customers. And and and and as I told you, everything is really very positive. Just also very important as well in sustainability.

We continue to be engaging in sustainability and not only through the CSRB report. We are actually doing real actions to improve sustainability in terms of emission targets, where we will where we will reduce our emissions according to the European goals. Engaging our workforce and stakeholders, we continue to work on the I know it’s probably less fashionable in some regions, but in diversity, equity, and inclusion. We won’t pay everyone fairly representative and have fair chance in our company. And we’re actively continuing to reduce to reduce the number of accidents and including safety at work

I also would like to say that this was a first year for us to do a CSR bill reporting. I think we are not we are just at the beginning of the journey. It’s it’s very heavy reporting, but we say we we are doing everything we can to to to to make it in the best possible way. And I would like to sort of stress that although we are relatively recent in our approach in sustainability because we three three years ago. We are already sitting in the top 20% of all companies assessed by eco EcoVadis.

I’m happy with that because, again, we’ve been doing that for me fairly recently whereby a company has more than fifteen years of practice in this area. So we are making we are making good progress. So I’m gonna now turn to questions from analysts.

Laura, Conference Coordinator: Thank you. From Guy from Guy Sips of KBC Securities. Your line is open. Please go ahead.

Guy Sips, Analyst, KBC Securities: Yes. Thank you. Thank you for taking my questions. My main question is actually on Zidfon. Yeah.

The question is actually, are you losing market share, or is it the general market? And in what in what, yeah, markets do you see this evolving? And what are are you taking measurements? Or or what what is actually the situation of of Akfa at this moment, or is it just a wait and see and that the and that you’re very sure that the market will, yeah, regain strength starting from 2026 on? Thank you.

Pascal Joueri, CEO, Oxford Group: No. Thank you very much, Key. We are not losing market share at all in this market, but I will leave it to Vincent Willard to comment further. But we are not losing market share. On the contrary, we are making progress in new geographies.

Vincent Willard, Executive Team Member, Oxford Group: Yes, correct. So indeed, it’s not market share. It’s really the market that is a bit stalling, and there are several large projects that we have in our pipeline. But we do see that new projects are really not coming online or are being frozen in time. So it’s a bit for everyone the same for the moment in the That being said, of course, we are internally making ourselves ready for the next step up in growth.

We had a big step up in the last two years. We expect, honestly, 26, probably more second half of twenty twenty six and 2027 if we listen to our bigger customers now, when the next step up will happen, and we’re getting ready for that, of course. And in the meantime, we really keep our costs under control and continue to improve on our own production efficiencies.

Pascal Joueri, CEO, Oxford Group: So yes, so not a market share issue, but a market kind of delay. And it’s catching us now probably a bit later than our customers, in fact. But nothing is, I mean, everything is good in terms of, development with new geographies as well.

Guy Sips, Analyst, KBC Securities: Correct. And the production facility is on schedule. And yeah. You give us some indication what do you internally expect for 2026 for Zircon?

Pascal Joueri, CEO, Oxford Group: Well, your first question, the production facility online on time, I would say. We are on time, and it will be actually operating before the end of the year. So no issue there. ’26, I prefer we have visibility on Zearfone, but not yet for the ’26. We have visibility for the year because we know pretty much what we have in the order book, and that’s a business with quite some visibility on most of the market.

But I think ’26 is a bit early, Vincent. I don’t know if you want to

Vincent Willard, Executive Team Member, Oxford Group: No, that’s correct. We indeed, our customers cannot give us a lot of visibility on ’26 yet. We do have some, but I think it’s too early to really confirm.

Pascal Joueri, CEO, Oxford Group: Yes, it’s too early to say. But things can change also rapidly. We are working on a lot of opportunities. We might that might become concrete at some stage as well. So but it’s today, I will refrain from having guidance on ’26.

Guy Sips, Analyst, KBC Securities: And the last follow-up question on this. You mentioned customers, but can you give us a clue, your top five, top 10 customers, what slice of the pie do they represent? And the second question is also on Zifron on the subsidy, the European subsidy. How is that evolving? Is that on schedule?

Well, the

Pascal Joueri, CEO, Oxford Group: first question is, yes, it’s a concentrated market for us today, and the top five customers represent a disproportionate amount of our business quite typically, by the way, in this area. And if you look at the main players in the market, I mean, you look at the main electrolyzer producers, you can understand very quickly that you have a kind of a Tier one with a few companies, all of them being our customers, I would say. And to your question regarding subsidy, we are on track. We are on track with subsidies. Just a couple of things.

Subsidies, we need to operate the plant. We need to demonstrate that the plant is operating. So we are on track to do that. And we are currently, by the way, are in discussion with the European Innovation Agency, and things are quite on track. No surprise here, Thank you.

Thank you.

Laura, Conference Coordinator: Thank you. We currently have no questions coming through. Thank you. We’ll now take our next question from Laura Rober of Degroof Petercam. Your line is open.

Please go ahead.

Laura Rober, Analyst, Degroof Petercam: Good morning. Thank you for taking my question. A question on the guidance for the remaining of the year. So you are now more bullish on the LPRIT, a bit less on DPC and also on radiology. So I was wondering how we should expect those elements to balance out.

Is the more bullish expectation on Healthcare IT going to offset the lower expectations for DPC and radiology? Thank you.

Pascal Joueri, CEO, Oxford Group: Good question. I think overall, I would say, again, I will repeat, our seasonality is heavily tilted to the second half of the year. So having a slower start for DPS is, of course, I would have liked to have a better start, but that’s not where we are making the year. So yes, I think you summed it very well. We are more bullish on HealthCare IT.

We are today a little bit less bullish on DPC. And of course, we are seeing the film impact being more more pronounced. Overall, if I take everything, I don’t think we can fully compensate the film decline, thanks to the increase in HealthCare IT. I think we have a question mark on the rate of decline of the film for the rest of the year, for which today, we are seeing probably we are seeing a curve of decline that is a bit stronger than anticipated.

Laura Rober, Analyst, Degroof Petercam: Okay. Very clear. Thank you.

Pascal Joueri, CEO, Oxford Group: Okay. Okay. So if no further question, just let me repeat. Really, the business is seasonal. Q1 is always the weakest quarter.

Healthcare IT, excellent momentum, excellent performance in this business. Zircon and DPS, for different reasons, have more subdued performance, DPS, especially on the equipment side, but we expect it to be temporary. And Zircon, I think we explained the situation and a more pronounced decline of the radiology market, but for which we take specific cost measures that are going to kick in mainly during the second half of the year. So overall, I repeat, I think the growth engines deliver, and you shouldn’t look it just quarter on quarter. But everything is I continue to to say everything is in place to to to do the pivot for for AXA.

Thanks very much for your attention.

Laura, Conference Coordinator: Thank you. This concludes today’s call. Thank you for your participation. You may now disconnect.

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