Earnings call transcript: AGFA Gevaert Q2 2025 sees stock dip amid mixed results

AGFA Gevaert’s Q2 2025 earnings call revealed mixed financial results, leading to a 4.9% drop in stock price to €1.08. With a market capitalization of $562.87 million, the company’s adjusted EBITDA decreased by €9 million, while free cash flow improved by €45 million compared to the first half of 2024. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics, trading at an EV/EBITDA multiple of just 3.24x. The firm continues to face challenges in its Radiology division, with gross profit falling by €13 million. However, the Healthcare IT segment showed promising growth, with expectations for mid to high teen growth for the full year.

Key Takeaways

• Adjusted EBITDA down €9 million year-over-year.
• Radiology gross profit decreased by €13 million.
• Free cash flow improved by €45 million.
• Stock price fell 4.9% post-earnings announcement.
• Healthcare IT segment shows strong growth potential.

Company Performance

AGFA Gevaert’s Q2 2025 performance was mixed, with notable declines in its Radiology Solutions segment due to volume and factory loading issues. However, the company saw a substantial improvement in free cash flow. The Healthcare IT division continues to be a growth engine, particularly in North America, despite the overall subdued market for Green Hydrogen Solutions.

Financial Highlights

• Revenue: Not specified in the provided data.
• Adjusted EBITDA: Decreased by €9 million.
• Free Cash Flow: Improved by €45 million.
• Gross Profit in Radiology: Decreased by €13 million.

Market Reaction

Following the earnings announcement, AGFA Gevaert’s stock price dropped by 4.9% to €1.08. Despite the day’s decline, the stock has shown strong momentum with a 16.17% gain year-to-date. This recent pullback reflects investor concerns over the company’s declining profitability in its Radiology division and the overall market’s subdued response to the mixed earnings report. The stock trades between its 52-week range of €0.59 to €1.24, with InvestingPro data showing 6 additional key insights about the company’s financial health and market position.

Outlook & Guidance

AGFA Gevaert anticipates mid to high teen growth in its Healthcare IT segment for the full year. The company expects a positive net cash flow for 2025, with the second half of the year traditionally stronger, contributing over 40% of EBITDA in Q4. Additionally, the company projects approximately €10 million in cost savings in the second half of the year.

Executive Commentary

CEO Pascal Duery emphasized the strong performance of the Healthcare IT division, stating, "Growth engines, HealthCare IT performing very well." He also highlighted the transition to a subscription model, which may temporarily impact top-line growth but offers more stable revenue streams. Duery noted, "We are transforming project revenue into subscription revenue, which are a lot more stable."

Risks and Challenges

• Declining profitability in Radiology due to market shifts and digital transformation in China.
• Subdued market for Green Hydrogen Solutions with project cancellations and delays.
• Potential impact of transitioning project revenue to subscription revenue on short-term growth.
• Tariff discussions affecting investment decisions in the Digital Print market.
• Increasing net financial debt, despite improvements in pension debt.

Q&A

During the Q&A session, analysts inquired about the company’s restructuring efforts and their impact on future profitability. AGFA Gevaert confirmed no significant headcount additions in the Healthcare IT segment and addressed concerns about the transition to a subscription model. The company also clarified the accounting treatment of AgfaFoto resolution.

Full transcript - AGFA Gevaert NV (AGFB) Q2 2025:

Conference Operator: Hello, and welcome to the Agfa Group Q2 twenty twenty five Results Call. Please note this call is being recorded. And for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. I will now hand you over to your host, Pascal Duery, CEO, to begin today’s conference.

Please go ahead.

Pascal Duery, CEO, Agfa Group: Thank you very much, and good morning to everyone, and thank you for attending. I’m here in the room with our CFO, Fiona Lam, with our Investment Relations Director, Vivian Dictus and members of the executive committee, and we’re going to walk you through the set of the results for Q2 and the first half of the year. I think first message is on the business. As you’ve seen, very contrasted situation between our three businesses, our three main businesses. Mean a strong Healthcare IT, and I’ll come back to that, but the P and L delivery was very good, and we only have positive things to say going forward for Health Care IT.

DPC, disappointing growth. Actually, a lack of growth especially in our growth engines area. There is a trough in the market regarding green hydrogen projects. And digital printing equipment sales were impacted by the market context, but nothing is broken. And if anything, we continue to progress in our markets.

And of course, regarding the film activity, we have seen, I would say, a faster decline of the medical film market, faster than anticipated. And immediately, I can tell you that this will call for additional restructuring and efforts not only in product supply but also in our go to market. This is something that we have started, but we will come back with more details in November in the Q3 call. So that’s for the business. Two events two very positive events also for the company, I believe.

First is the resolution of AgfaPhoto, a long standing case that was resolved in June. So you see the P and L impact today, and you will see the cash impact in Q3, but very positive. And as well as the agreement signed on the revolving credit facility for the next three years. So these are also positive news. And third, I will also explain to you how we are going to realign the organization of the group due to the I think, for two reasons.

First, we want to have better readability of our results by reporting on growth segments and mature segments, I would say. And also, and more importantly, to have a fully integrated management of all film and chemical activities related to the current situation we are facing in the market that will end a better management of the overall value chain. Last but not least, I would like to remind you that, as usual, we are a seasonal business and that the second half of the year is always stronger than the first one, and twenty five percent will be a lot different. If you remember, I mean, we do a significant portion share of the EBITDA of the year during the Q4. It’s going to be exactly the same during 2025.

I think that’s why everybody also need to keep that in mind. This is the way our markets are really working. So if I sorry, if I go back to this slide and give a little bit more color on everything that I said. First, HealthCare IT, strong P and L delivery on the first half of the year, which is not common. Typically, it’s more the second half.

This year, it was a bit different. We continue to successfully transition to the cloud. And where I’m also very pleased is behind these very good numbers, actually, that’s the performance of North America. And North America is of target market, our first priority in terms of market, and we are growing and making progress in this region, and that’s exactly what we want to do for the strategy. On order intake, we are Q2 last year was a record quarter.

It was EUR 60,000,000 order intake actually, representing almost 40% of the total year. In Q2 this year, it was not as good, but order intake is a lumpy. So on a twelve month volume, we are stable. But in fact, we are very confident to end the year with high teen, I would say, growth in order intake. So we keep the momentum, and we keep adding new customers to our line.

Top line growth. As you see here, it’s interesting to see the impact of the currency. More than, I would say, about twothree of our margin comes from North America is dollar denominated. The first part of the year was positive for us, 10% in euro. The second part of the first half was strongly negative.

And that’s what you see here. I mean the growth is a bit understated due to discounts. DPC, some top line growth, but not in the gross engine. I would say more in Specialty Shield than Cable business and more price oriented than volume oriented, I would say. While Green Hydrogen Solutions and EPS had, I would say, stable performance over last year, in an overall market that seems, of a lot softer.

So EBITDA, approximately the same as last year, especially when you look at the first half, the full and first half, it’s online, it’s faster and as we see, we’re still expecting growth. Archaeology, well, the decline of the medical market actually is faster than what everybody could expect. It’s mainly in China, which represents more than half well represented more than half of the global market. It has also been implemented in other countries in Asia, like Vietnam. So it’s a very fast decline.

And the thing is the reason of decline is too fast for us to be able to evacuate lower our costs at the same reason. As you know, we have our EUR 50,000,000 program, which is in full swing, and we are implementing this. But all the cost measures are spread over the next month until actually the ’26. And therefore, we have a bit of a time lag where we are. That’s point number one.

And most of the initiatives that we are taking will accelerate during the Phase two, as always will be signed. This being said, given the current market situation, we will do additional restructuring efforts, as I said, continuously with the product supply, and we’re already working on a plan that I will come to you with a lot more details in November, but also on the go to market, where we’re going to review our setup here. Now if I turn to the numbers. So you see overall, pretty stable sales, but very different dynamics according to the business as usual. EBITDA strongly decreasing versus last year due to the situation in film and especially medical field.

If I look at this is a slide that we are showing right now with the evolution of our mature business and the evolution of our gross engine. Well, I would say, strong decline of our film, of course, as you know, and the growth of the growth of our future oriented business has been a bit more subdued for the reasons I explained on the market environment, especially for the improvement and EPS. EBITDA, we continue to make progress, of course, overall in the growth engine, but the impact of the film and especially medical film is taking a stall on the overall business results. Now we’re going to turn to Fiona to comment the bridge, Fiona.

Fiona Lam, CFO, Agfa Group: Thank you, Pascal. As Pascal already mentioned, our adjusted EBITA has been impacted by Radiology. So you see we are €9,000,000 lower versus last year Q2. This is primary contributors. As you can see, gross profit of Radiology is down by €13,000,000 because of volumes and loadings of the factory.

CPC, since the growth engine is not really contributing the growth this quarter and therefore also together with the good performance in Healthcare IT, we’re not able to offset this accelerated decline of Epsilon. On the other hand, you also see a good level of cost control. It contributed a small few millions earning to the 50. So that all in all helps us and we will continue this good high cost control as well in the second half of the year. If you look at free cash flow, Q2 is a small minus €3,000,000 negative free cash flow.

This is very good improvement actually. You don’t see it from this graph compared to last year Q2 because it’s €37,000,000 better than last year Q2. Also for the first half year, it’s €45,000,000 better than 2024, I. E, if you compare to this year 2025 and twenty twenty four first half. These tests these big improvements, mind this, is not related to Afafoto because as Pascal said, the cash is in July, so it’s not in the first half of the year results.

The improvement in our cash flow is mainly linked to very good trending working capital and control of working capital. We have a lot of initiatives running and improving our working capital to the right level of the business and also provision and others related to lease receivable build down and we are collecting those monies. Having the back in this cash flow, we’re still investing in our future growth. We have invested $8,000,000 more in CapEx in the Q2. With this, basically, I could say we are quite happy with the free cash flow development in Evolution in the first half year, and I expect the best second half of the year will be improving further.

Next slide, giving a perspective on our net financial debt or the total debt, which is still relatively high because, as we know, the pension debt is very high. It’s evolving. Of course, in the last many quarters, we are still consuming cash, as you know, even though we have been improving it significantly versus last year. You see we are still negative on the total net cash flow perspective. So you see the net financial debt, excluding IFRS 16, excluding pension debt are increasing.

As normally in Q1 and Q2, we always consume cash and Q3 and Q4, we start to actually improving as well. So the net financial debt normally trends up at the end of the year. For the pension, you also see actually a continuous trend of improvements, so it’s coming down steadily quarter over quarter. Worth already mentioned by Pascal, a three year revolving credit facility has been renewed and signed August 1. This is a three year maturity until 08/01/2028.

Thanks for all the financial institutions’ support and confidence in our strategy of Afa for the next years to come. Just to explain a little bit also to all of you about governance of the new revolving credit facility. You see we have four covenants, which would be applicable as of disclose the transparency of the all financial indicators. The new governance, which remains the same as the previous facility is the leverage and the interest cover. The definition of the leverage is net financial debt over our adjusted EBITDA.

These are all calculated excluding IFRS 16. In fact, things also calculated on a rolling past twelve months. Interest cover is just interest over net interest expense. Again, the same definition applies. They are both tested half year, and you see basically the government’s level on leverage is at mid year three and at year end is 2.75 and year end was slightly decreased according to our strategic planning for the future, so going to 2.6 at 2026 and two 0.4 at 2027.

The interest cover minimum stays with five. Then there are two additional covenants being added. One is adjusted minimum EBITDA excluding IFRS 16 on a rolling basis. And it’s also tested half year and the minimum is $13,000,000 We also have a minimum liquidity being the cash and cash equivalent plus the headroom which we have under our facility agreement. So this is tested quarterly.

It’s the only one which will be tested quarterly and the minimum is $30,000,000 In terms of numbers, you see the numbers were already quarter then of impact on our loadings quarter and the fixed cost coverage. And so that’s mainly because of the top line decrease of the medical develops. And then we have a mix also in DTC in terms of, let’s say, the growth engines and industrial films. So those mix has a different profitability mix for the group. Next slide.

If you look at our net results, we were benefited the net results from the APA photo. So the P and L impact of the APA photo, you see them in the adjusted restructuring expenses, which is booked at €38,000,000 So that helps our results to a positive of €30,000,000 compared to last year of 2019.

Pascal Duery, CEO, Agfa Group: Now thank you, Fiona. Now let me turn to HealthCare IT. So what are the key messages? As you’ve seen, strong performance for the first half. Happy because the geographical mix is very good, but we grow where we want to grow, meaning in North America.

And our successful transition to the cloud continues with several customers that we started in Q2. So overall, a very good first half P and L, growth versus last year. And here, we just want to give you the real nominal growth adjusted for currency impact, we see. And the recurring revenue, which is important to us, has never been that high for us, 58 of our total Q2 revenue. Holding twelve months holding order intake, more or less stable versus last year.

Again, I want to stress that order intake can be lumpy by quarter. Indeed, we are just replacing the strongest quarter ever by a quarter that is a lot more, I would say, normal. But I can tell you that knowing what we have coming for Q3 and Q4, we will continue the overall growth. And as we said, mid- to high teen growth for the full year. And I’m also happy to say that we continue to win new logos, new customers.

It was about 20% during Q2. It will be probably even a lot more for the rest of the year on Q3. So really, we are pleased with where we are. The trend we are seeing right now is the other you’ve seen in Q2, cloud was very small in order intake. But if you take last twelve months, it was close to 30%.

And if anything, during for the second half, this percentage will increase probably significantly. Cloud will represent a much higher share of our order intake. And I would like to remind you that we are sitting in the top three in the class ranking for all categories and regions we compete in. We are always in the top three. And as you know, we have a number of best in class awards.

So just looking at the numbers, that’s much what I described already. And I’m also pleased to see that the gross margins continue to increase year over year. So overall, very happy with the situation in Healthcare IT. DBC, a bit of a different story. DPS, as you know, it’s a business that you that is growing normally, should be growing at 10% to 12% per year.

It has been on track record for the past year. The first half of the year was very different. The growth almost came to an old. The reason is actually mainly the equipment market, in fact, that was impacted, not especially by the tariff discussion, although it was part of it, but it kind of froze a lot of investment decisions by our customers. We have seen, towards the end of the first half, an increase in our order taking.

And we believe that our ASP, therefore, will be rather good. But the growth the overall growth we were expecting for the year is probably a bit challenged even in 2020, if nothing is broken in this market. Just to tell you that we are continuing to bring innovation to market, and this is also the reason why even in the subdued market, we are not seeing any decrease so far across the line. And also a very good news for us is actually the sign off of our first speed set single pass printer. It took us approximately nine months to go to this point at our first customer, Delta Group, in The UK.

So we are very pleased with this progress. And of course, it’s a strong message for the overall market in this area. So now we have a printer that works well commercially. Green hydrogen, well, the overall environment on green hydrogen has been rather more than subdued, I would say. We have seen cancellations, delays.

So this is an area for which we are not expecting any growth for 25%, and we believe we will see probably the trough of the market pretty soon. Not everything is frozen in this market. Actually, we still have a lot of dynamism in the regions like China and India with a lot of projects and probably Middle East. But it’s fair to say that in North America, for the time being, things have been a bit frozen by the changes, I would say, in the regulations introduced by the new administration and as well as in Europe, where the development actually today is delayed. But overall, it means we are spending our own, but we cannot rely on our membrane to provide significant growth right now.

So if you look at the numbers, you see that you see what I’m explaining that for the time being, our growth engines are actually have a very subdued performance in terms of top line, while still it is increasing. But that’s mainly the reflection of higher price and not really higher volume. EBITDA close to last year. Actually, if you take the first half, it’s almost in line with last year. And so we continue really nothing is broken with the strategy.

We are continuing what we are doing in EPS. Are successful with our market launches, and we have a lot of opportunities going forward. Okay. Let me turn to Radiology Solutions, which is, of course, today the main issue in our results. So solid plan of the manufacturing market.

Let me just exemplify it for you. I think the market has been divided by two in a couple of years, actually. And it means 25% or between 2530% of the global market will disappear very quickly due to digital, I would say, application enforcement in China. That’s what we are going through. So it goes very fast.

So indeed, it’s a loading issue for our plants, where we are actually decreasing very quickly. But the reason of decrease of we have mainly age related measures that we have been implementing, and it goes through a calendar. And so we are dedicating fixed costs as fast as we can, but it cannot go as fast as what we are seeing in the market. I’d like to remind everyone also that having signed a social agreement only in January, actually, the all this program could be implemented only from March. So here, it’s still just the beginning, and we have a lot more to come.

For instance, the shutdown of Boucher Park will be effective only at the end of Q3, actually. So we have things in place. This being said, given the situation, we have launched a new additional program in Restructuring to further the efforts in terms of revising the footprint mainly today Moffett, but also looking at our go to market strategy, where we’re going to go a lot more from a market driven approach to an asset driven approach, and therefore, a more, I would say, need and mean and global management of the share of business. That’s really what we’re going to implement. So if you look at the numbers, you see the very strong impact today of what we are going through in the Offshore business.

Outlook, I think our outlook is yes, probably, we have a bit. ESKA IT, I would say, goes well. And I’m really happy where the business is going. The order intake momentum will continue. I I see a very positive development.

The only thing that I would mention is the second half will be a lot more cloud projects rather than on premise projects. And as you know, when it is the case, it tends to delay it did delay the recognition of the revenue and spreading the overall recognition of the margin. But overall, I would say that all the evolution is very positive. We are gaining, as I told you, new logos, especially in North America, positive. Digital Print and Chemicals, we probably have a more subdued view of the growth that we had before starting this year, we thought we would be able to continue the GPS growth.

That was not the case in the first half. We are still looking at growth in this area, but probably not to the tune that we were doing before. And as I told you, we are not expecting any loss for the team for the membrane given the situation in green hydrogen. Not coming back to Radiology, I think I’ve said it, so we expect the current trend to continue. And again, the only response we have is really our cost restructuring program that is in place.

Last but not least, of course, for the full year 2025, we’re expecting a positive net cash flow at the group level. Of course, the cash flow I see for AXA to have resolved the year end use situation by year end. Will now turn to really what we are doing in terms of new structure. So we have announced today that we are reviewing our structure. And actually, it does two things.

First, we will have three segments, two growth segments and one mature segment, which will improve the readability of our results and especially the read across our strategic high. Two segments for growth because one is IT and one is industrial, I would say. And then the two segment with Imaging and Chemicals, which used to be, if you want, the Radiology part, which with on top of that, we have regrouped all Industrial, Film and Clinical Activities in the same business, so to speak. So improvement of the readability of the results, but also, and more importantly, regrouping Film and Chemical in a single organization, given the challenges that we are facing, we absolutely need to run the business a lot more on an asset driven manner, actually, and to have an end to end strong leadership to drive the restructuring that has been in discussions. So this is really, probably, the key takeaways for the new organization structure.

In terms of people, I think it’s pretty much, as you see, continuity because Health Care IT, of course, is led by Natalie McCowen. Industrial Solutions is led by Vincent Willard. And I take over the Imaging and Clinical part. So quite a continuity, but a different setup, in fact. So in a nutshell, what the takeaway is HealthCare IT and the strategies implemented, the rest of it goes quite well.

DPC temporary slowdown of the growth, I would say, for market results and not performance of that part because if anything, I think we are doing quite well compared to market. And a field situation that calls for a lot more traditional restructurings and cost takeouts to come back to restore the overall profitability of the value chain, which is our intent. I’m going to stop here and take the analyst questions, operator.

Conference Operator: Thank We’ll take our first questions from Alexander Krimich from Kepler Cheuvreux. Your line is open. Please go ahead.

Alexander Krimich, Analyst, Kepler Cheuvreux: Alexander from Kepler Cheuvreux here. Yes, thank you for taking my questions. It’s nice to see that you’re catching up in Healthcare IT. I’m just wondering how much more top line can you still process on the short term with same employees? And considering the growth you’re foreseeing, do you plan to have some new employees in this area?

And also on this topic, do you foresee that the current margins are sustainable going forward? Thank you. I’ll take them one by one. Thank you.

Pascal Duery, CEO, Agfa Group: So on Health Care IT, we are not only we are growing. We have new no gos, but we are also, in a way, in a change of model by which we go for traditional on premise projects to cloud based and cloud enabled projects. So to your question, do we need a lot more people to ensure the growth? And can we ensure a good top line growth? Couple of considerations.

Do we need more people? I don’t think so. Because actually, the size delivery is more efficient than the traditional model, okay? So I wouldn’t believe we need to add more people. On the contrary, but we need to go through this transition.

Transition. On the top line growth, what we need to look at in this growth is really the growth of recurring revenue. This is really the sign, the KPI, if you want, of a transformation to a subscription model versus a project model. And as I said, what the fact that we are going to more cloud projects will have a deflationary impact on the top line at some time. Why?

Because again, the project is not invoiced in the same way. It’s invoiced over five years instead of being invoiced 80% during the year of implementation. So that will have an impact on the growth rate, but it’s a transition period. And again, we are transforming project revenue into subscription revenue, which are a lot more stable. You have a lot more upside.

You benefit from the growth and whatnot, okay? But overall, that’s so the top line growth will be impacted by this move to the cloud. And the delivery system of the cloud means we can probably absorb double double digit order intake growth without adding a lot of resources.

Alexander Krimich, Analyst, Kepler Cheuvreux: Okay. Thank you.

Pascal Duery, CEO, Agfa Group: Then second question

Alexander Krimich, Analyst, Kepler Cheuvreux: that this was going to be back end loaded. So I’m just wondering if there are any subsidy numbers in the first half of this year.

Pascal Duery, CEO, Agfa Group: Subsidy numbers, no, no, no. No, no, we do not. Will on the Zircon plant, the second phase of the subsidy will be received only when we demonstrate a full industrial production, which we are doing right now, by the way. We’re working on that. So we are expecting this cash inflow of subsidies to be in rather at the end of the year and not we have not received it in the first half.

Alexander Krimich, Analyst, Kepler Cheuvreux: Okay. And then the last question would be, it’s basically on the P and L on Page 10 on the report. You mentioned the profit from continuing operations of €31,000,000 corresponding to an EPS of continued operations of €0.20 quite a lot, of course. But could you clarify how much of this relates to AgfaFoto? And maybe that’s it’s a case that dates back to 2024?

And maybe what’s the reasoning to include this in the continuing operations? Because I don’t see it as continuing.

Pascal Duery, CEO, Agfa Group: Sure.

Fiona Lam, CFO, Agfa Group: Afafoto itself in the adjustment restructuring is million. And the finance cost, net finance cost is €7,000,000 so a total of 45,000,000 Why is not in the discontinued operation? Because we actually have it accounting wise accounted for non recurrent. So you can see as in the part of the non recurrent. Also, of course, the legal fee and because the €45,000,000 is actually the compensation of all the fees and fee expense that Afa have encountered in the last, I don’t know how many years before my time.

Those were also in the normal business. It’s been never classified as a discontinued operation.

Pascal Duery, CEO, Agfa Group: So it’s for consistency reasons. We incurred during many years legal expenses that were all in nonrecurring but in continued operation. Now that we are getting reimbursed for these fees, it’s also nonrecurring, of course, but continuing operation. That’s the logic, Alexander.

Alexander Krimich, Analyst, Kepler Cheuvreux: Okay. Thank you very much.

Pascal Duery, CEO, Agfa Group: And again, to your point on HealthCare IT, I should add, what yes, where I’m really happy today that today, we are winning deals, including Versus Sekkar. That’s also, I would say, new for us to win new logos versus sectoral as well. So that’s also what gives us a lot of confidence.

Alexander Krimich, Analyst, Kepler Cheuvreux: Yes. Congratulations with that.

Conference Operator: Thank you. We are now taking our next questions from Laura Roba from Degroof Petercam. Your line is open. Please go ahead.

Laura Roba, Analyst, Degroof Petercam: Thank you. Good morning and thank you for taking my questions. First of all, on H2, we know that H2 is usually better than H1 at Agfa. How do you look at that this year? Can we foresee any improvements in DPC and also in Healthcare IT?

You mentioned that in H2, there will be more subscription revenue model. So does it mean that we should expect a more subdued revenue growth? Then a second question. So still on Healthcare IT, you mentioned the transition from the project to the subscription model. How long do you think this transition will take?

Do you have any visibility on this? And then the last one on the radiology and program to adjust the cost base. So the first saving will materialize in H2. Can you give us an order of magnitude, please? Thank you.

Pascal Duery, CEO, Agfa Group: Okay. So on the H2, well, thank you, Laura, for the questions. On H2, it’s a normal seasonality pattern. Typically, I would like to remind you that last year, more than 40% of the yearly EBITDA was in Q4. And that’s also we kind of installed more than 40% of printing equipment in Q4 as well.

And the same in India. So along actually, almost all our and Healthcare IT, of course, it’s always a stronger quarter. So this is the way the business is designed, and it will be no different this year. So yes, the S2 will be a lot stronger than S1. And the normal, I would say, seasonality will apply.

That’s what we are seeing, and this is exactly what we have in our plan and forecast. So that, I confirm. Regarding your question on SaaS model,

Conference Operator: yes,

Pascal Duery, CEO, Agfa Group: I mean, the P and L delivery will depend how many cloud projects we will install in S2 versus on prem projects. And yes, depending on

Laura Roba, Analyst, Degroof Petercam: this

Pascal Duery, CEO, Agfa Group: mix, that will have an impact on the short term P and L of the business as well. And what we are seeing today is we had a first half where we did relatively good number of on prem traditional projects, where we see S2, where we have a lot more, I would say, cloud SaaS projects, okay? So mechanically, do we expect a little bit more subdued in S2? That might be the case due to this impact, but it’s not really it’s not going to be super material. What goes against us as well is the currency because we are pretty much more and more dollar business in HealthCare IT, and that translates into less euros.

But again, and overall, I mean, I’m very positive about this development. And even if there is a short term impact on the top line for HealthCare IT, it’s still a very positive development. And your third question was about, sorry?

Laura Roba, Analyst, Degroof Petercam: It was about the cost base adjustment

Conference Operator: the cost. On

Pascal Duery, CEO, Agfa Group: Yes. Your question more precisely is how much are we

Laura Roba, Analyst, Degroof Petercam: going Yes. Could you give an order of magnitude of what we can expect in H2?

Pascal Duery, CEO, Agfa Group: What we can expect in H2 regarding the recurring savings of our project, well, we have not commented so much on the calendarization, but we will all this is cumulative. And every month, we are making more progress to evacuate cost. So the overall impact on the second half is probably going to be around, I would say, 10,000,000, I would say, something like that between. Okay. Thank

Fiona Lam, CFO, Agfa Group: you.

Pascal Duery, CEO, Agfa Group: Okay. Thank you very much,

Conference Operator: appears there are no further questions.

Pascal Duery, CEO, Agfa Group: I would like to

Conference Operator: turn the conference back to Pascal Giri for any additional or closing remarks. Please go ahead, sir.

Pascal Duery, CEO, Agfa Group: Thank you, operator. Thank you, everyone, for attending this call. Again, I repeat, growth engines, HealthCare IT performing very well. DPS, for the time being, a bit impacted by market conditions, but should recover quite well actually. And just on the question mark on the hydrogen project, again, it’s a question of time.

And in the meantime, we are taking all necessary measures to address the situation in film. And as you’ve seen, we are also having we are paying a lot of attention to our cash management and especially the management of working capital, but not only in order to make sure that we keep our liquidity level. So thanks very much, everyone. Thank you.

Conference Operator: Thank you for joining today’s call. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.