Annual Report (ESEF) • Apr 22, 2024
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Download Source FileFrank Aranzana
Chairman of the Board of Directors
Pascal Juéry
CEO
Dear shareholder,
In 2023 and in recent months, our company has reached major milestones in its comprehensive transformation process. We have strengthened the focus on our growth engines and we have finalized the divestment of our former Offset Solutions activities. We are very pleased to see that the strategies we have defined for our three main growth drivers – HealthCare IT, Digital Printing Solutions and Green Hydrogen Solutions – are now fully delivering.
In 2023, the growth engines showed a strong acceleration of profitable growth, powering the group both in terms of top line and in terms of profitability. We are confident that this positive trend will continue this year and beyond.
Allow us to stress that these achievements should be seen in the light of the very tough conditions we had and still have to deal with. The current macroeconomic and geopolitical conditions, the weakening economy in China, adverse currency effects, cost inflation and several other adverse elements added to the complexity of the circumstances we had to operate in.
We are very proud of all our teams around the world and across all business areas, as these adverse circumstances did not stop them from contributing to the major steps we took towards achieving profitable and sustainable growth.
The divestment of our Offset Solutions division and the investments in our growth engines have thoroughly changed the look of our product and solution portfolio. Allow us to explain some of the milestones we have reached with our future-oriented activities.
In HealthCare IT, our Enterprise Imaging platform is now cloud-enabled and fitted with best-in-class web-streaming technology. Customer satisfaction has shot up significantly and our two "Best in KLAS" awards show that our efforts are also recognized by industry experts.
In the field of Digital Print Solutions, we recently entered into a global strategic partnership with EFI, which will allow us to accelerate our growth and extend our offer in the sign & display market. Furthermore, we have a number of important product launches, including that of the revolutionary water-based SpeedSet Orca, a single-pass printer for the packaging market, the fastest printer in its category.
Finally, in the field of Green Hydrogen Solutions, we already serve well over 120 customers with our ZIRFON membrane for alkaline water electrolysis, as it is the only membrane making the production of green hydrogen affordable. In 2023, we have successfully ramped up our production capacity and we have started the construction of a new industrial plant for ZIRFON, which is expected to come into operation in October 2025. For this project, we are the recipient of a 11 million euro grant from the prestigious EU Innovation Fund. With ZIRFON, Agfa makes a significant contribution to a greener, more sustainable future.
Our three main growth drivers showed a strong acceleration of profitable growth, powering the Group in top line and profitability.
In 2023, we launched 'We Are Agfa', which marks a pivotal step in our quest to cultivate a culture defined by accountability, collaboration, excellence, and value creation. This initiative serves as the cornerstone of our leadership ethos, uniting our teams under a shared vision of integrity and purpose.
As we embark on this journey, we pledge to strengthen our leadership spine, anchoring our values in every action, empowering each team member to realize their potential, and collectively steering towards our shared aspirations. Together, guided by the principles of 'We Are Agfa,' we will navigate challenges, innovate relentlessly, and emerge as industry leaders, driven by a culture steeped in resilience, empowerment, and dedication to our mission.
For us at Agfa, sustainability is our guiding star for everything we do. It defines how we develop and sell our products, interact with our stakeholders and employees, and care for the environment. Further on in this report, you will read that in 2023, we have made significant progress across all sustainability domains, from advancing carbon management and mapping waste streams, introducing initiatives in Diversity, Equity & Inclusion to initiating improvements in sustainable procurement.
EcoVadis, one of the world’s largest providers of business sustainability ratings, honored our sustainability efforts with a bronze medal. We are proud to say that Agfa is now among the top 25% of all companies assessed by EcoVadis across all industries.
Sustainability is our guiding star for everything we do. It defines how we develop and sell our products and interact with our stakeholders.
Excluding currency effects, our Group’s revenue increased by 3.2%, driven by growth engines HealthCare IT, Digital Printing Solutions and Green Hydrogen Solutions. Together, they more than compensated for the decline of the traditional film activities, which were under pressure from challenging economic conditions and geopolitical circumstances.
Driven by the strong performances of these future-oriented businesses, our gross profit margin improved to 31.2% of revenue, despite adverse effects including cost inflation, adverse currency effects, manufacturing inefficiencies and the weakness in the industrial film markets.
Adjusted EBITDA improved strongly from 50 million euro in 2022 to 76 million euro. Largely driven by the loss related to the Offset Solutions transaction, we booked a net loss of 101 million euro.
Trade working capital decreased significantly from 32% of turnover at the end of 2022 to 27%, which clearly shows that our efforts in this field are paying off.
For the Group as a whole we expect the trends seen in 2023 to continue, with continued growth for the growth engines and further profitability improvements. As usual, due to seasonality reasons and specific projects ramp-up, a slower start of 2024 is expected, followed by a stronger second half.
For our HealthCare IT division, we expect a continued progress in profitability, although we are planning strong investments in cloud technology to further enhance our innovative Enterprise Imaging technology.
The Digital Print & Chemicals is expected to significantly grow both its topline and its profitability, driven by its growth engines Digital Printing Solutions and Green Hydrogen Solutions.
In the Radiology Solutions division, the medical film business will continue to be under pressure. The progress in Direct Radiography we saw in 2023 is expected to continue in 2024.
We would like to end this message by thanking our customers and channel partners for the trust they placed in our company. The many product launches and enhancement we have in the pipeline clearly show that we are determined to continue supporting them with advanced, qualitative and reliable digital products and services.
We would also like to thank our people for their loyalty and dedication. They are crucial for the success of our transformation efforts and for the future success of our businesses. And of course, we are also extremely grateful to you, our shareholders, for your continued support and confidence over the past year.
The peregrine falcon: power, speed and loyalty
Known for being one of the fastest creatures on earth, the peregrine falcon dominates the skies above Agfa’s head office in Mortsel, Belgium. Since 2007, the site’s iconic factory chimney is home to a peregrine falcon couple. In 2023, for the 17th year in a row, the couple returned to its nest. The four falcons born in 2023 bring the total offspring of the couple to 46.
picture by Maarten Mortier
| MILLION EURO | 2019 (4) (5) Re-presented | 2020 | 2021 | 2022 (6) Re-presented | 2023 |
|---|---|---|---|---|---|
| PROFIT OR LOSS | |||||
| Revenue | 1,975 | 1,709 | 1,760 | 1,145 | 1,150 |
| Change vs. |
“Here at Agfa, we’re committed to making a positive difference in the lives of our customers, end-users, patients and the planet as a whole. Our innovative, customer-centric approach to digital information systems and imaging, spanning markets as diverse as healthcare, graphics, the industrial specialty sector and energy transition, has been built on over 150 years of world-class expertise. We’re committed to answering the needs of today’s customer while innovating for tomorrow’s world in a responsible, transparent and sustainable way.” – Pascal Juéry, CEO of the Agfa-Gevaert Group
The Agfa-Gevaert Group is a leading company in imaging technology, with over 150 years of expe- rience. Agfa develops, manufactures and markets analog and digital systems for the healthcare sector, for the printing industry and for specific indus- trial applications. The Group holds the following divisions: HealthCare IT, Digital Print & Chemicals and Radiology Solutions. In addition, the CONOPS division was established to report on the results related to supply and manufacturing agreements that Agfa signed with its former Offset Solutions division. The Group’s financial reporting is based on this divisional structure.
The Agfa-Gevaert Group’s head office and parent company are located in Mortsel, Belgium. The Group’s largest production and research centers are in Belgium, the United States, Canada, Germany, Austria and China. Worldwide the Group is commercially active through wholly owned sales organizations in more than 30 countries. In countries where it does not have its own sales organization, the market is served by a network of agents and representatives.
Agfa HealthCare transforms the delivery of care – supporting healthcare professionals across the globe with holistic, fast, and meaningful engagement with patient images; no matter where, when or how they need access. Agfa HealthCare’s Enterprise Imaging Platform is designed to not only incorporate cutting-edge tech- nology, but also empower organizations to achieve their goals and unlock their full potential – making a difference in patients’ lives on a daily basis. Focusing on creating an exceptional experience and true empowerment, Enterprise Imaging builds a connected, collaborative, and scalable community of care. Agfa HealthCare’s secure platform makes this a reality by providing multi-specialty eco-sys- tems of digital health solutions. There, images are available to all members of the care team, driving an improved performance for care providers, whilst helping to improve business, operational and financial outcomes. In addition to its robust solutions stack, Agfa HealthCare is dedicated to upholding strong client delivery principles. Its commitment extends beyond technology to ensure exceptional service and satis- faction. Agfa HealthCare calls it: “That’s life in flow”. Driving positive change for a greener, healthier and brighter future.
The Digital Print & Chemicals division serves a great variety of industries. Building on Agfa’s expertise in chemistry and its deep knowledge of the graphic industry, the division has a leading position in inkjet printing. Agfa supplies sign & display and packaging printing companies with a range of highly produc- tive and versatile wide-format inkjet printers with matched inks, powered by dedicated workflow soft- ware. In addition, it develops dedicated inkjet printing systems for the laminate and leather industries, as well as high-performance inkjet inks and fluids for a wide variety of industrial inkjet applications, enabling manufacturers to integrate print into their existing production processes. It also offers dedicated func- tional inkjet inks to specific hi-tech industries such as the printed electronics industry. Furthermore, the division supplies high-quality electrolysis membranes to the green hydrogen production industry. With these best-in-class, exceptionally durable ZIRFON mem- branes, Agfa is in a strong position to benefit from the rise of the green hydrogen economy. The product assortment is completed by a range of printable synthetic papers and films for micrography, non- destructive testing, aerial photography and printed circuit board production.
The Radiology Solutions division is a major player in the diagnostic imaging market, providing analog and digital imaging technology to meet the needs of specialized clinicians in hospitals and imaging centers around the world. Agfa’s innovative imaging equipment and its leading MUSICA image process- ing software set standards in productivity, safety, clinical value and cost effectiveness. Furthermore, its SmartXR portfolio provides radiographers with predictive workflow assistance. With over 150 years of experience, Agfa helps its customers to improve the quality and efficiency of their patient care. With Agfa, one image is all it takes.
Early April 2023, the Agfa-Gevaert Group completed the sale of its Offset Solutions division to Aurelius Group. The new CONOPS division contains results related to supply and manufacturing agreements that the Agfa-Gevaert Group signed with its former division, now rebranded as ECO3. The Agfa-Gevaert Group is a leading company in imaging technology, with over 150 years of expe rience.
The Agfa Group has major manufacturing and R&D centers around the world. Agfa is commercially active through wholly owned sales organizations in more than 30 countries.
| HealthCare IT | Radiology Solutions | Digital Print & Chemicals | Manufacturing | R&D | Sales organization | |
|---|---|---|---|---|---|---|
| GERMANY | Munich | Peissenberg | Schrobenhausen | |||
| CANADA | Mississauga | Waterloo | ||||
| BELGIUM | Mortsel HQ | Heultje | Ghent | |||
| ITALY | Macerata | |||||
| USA | Bushy Park | |||||
| AUSTRIA | Vienna | |||||
| CHINA | Shanghai | Wuxi Imaging |
Following a devastating earthquake, Belgian B-FAST team (Belgian First Aid and Support Team) travels to Turkey to assist in the affected area. Agfa’s DX-D 100 mobile wireless solution played an important role in the radiology department of the field hospital. Furthermore, Agfa donated SYNAPS XM110 synthetic paper to B-FAST. Resistant to water and tearing, the paper proved ideal for printing patient forms.
| previous year | |||||
|---|---|---|---|---|---|
| HealthCare IT | -9.9% | -13.5% | 2.9% | - | 0.5% |
| Share of group sales | 12% | 14% | 12% | 21% | 22% |
| Digital Print & Chemicals | 355 | 289 | 330 | 372 | 409 |
| Share of group sales | 18% | 17% | 19% | 33% | 35% |
| Radiology Solutions | 536 | 485 | 464 | 461 | 425 |
| Share of group sales | 27% | 28% | 26% | 40% | 37% |
| Offset Solutions | 843 | 704 | 748 | - | - |
| Share of group sales | 43% | 41% | 43% | - | - |
| CONOPS (1) | - | - | - | 68 | 68 |
| Share of Group sales | - | - | - | 6% | 6% |
| Gross profit | 589 | 494 | 497 | 345 | 359 |
| Results from operating activities | (34) | (52) | 9 | (139) | (8) |
| Net finance costs | (36) | (31) | (8) | (18) | (26) |
| Income tax expense | (14) | (15) | (15) | (29) | (16) |
| Profit (loss) for the period | (48) | 621 | (14) | (223) | (101) |
| Attributable to owners of the Company | (53) | 613 | (17) | (221) | (102) |
| Attributable to non-controlling interests | 5 | 7 | 4 | (2) | 1 |
| Restructuring/non-recurring expenses | 111 | 88 | 33 | (138) | (39) |
| Adjusted EBIT | 77 | 36 | 42 | (1) | 31 |
| Adjusted EBITDA | 153 | 99 | 104 | 50 | 76 |
| Net cash from (used in) operating activities | 123 | (153) | (116) | (100) | (30) |
| Capital expenditures | (2) | (38) | (33) | (26) | (33) |
| Total assets | 2,294 | 2,204 | 2,095 | 1,756 | 1,368 |
| Equity | 130 | 620 | 685 | 561 | 396 |
| Net financial debt | 219 | (502) | (325) | 72 | (6) |
| Current assets minus current liabilities | 473 | 952 | 742 | 568 | 404 |
| Earnings per share (eps) | (0.32) | 3.66 | (0.11) | (1.41) | (0.66) |
| Net operating cash flow per share | 0.88 | (0.81) | (0.65) | (0.55) | (0.18) |
| Gross dividend | - | - | - | - | - |
| Number of outstanding ordinary shares with voting rights at year-end (3) | 167,751,190 | 167,751,190 | 160,438,653 | 154,820,528 | 154,820,528 |
| Weighted average number of ordinary shares | 167,751,190 | 167,751,190 | 165,003,570 | 156,236,319 | 154,820,528 |
| Full time equivalent permanent (active) | 7,892 | 7,337 | 6,993 | 4,983 | 4,847 |
(1) CONOPS = Contractor Operations and Services - former Offset
(2) For intangible assets and property, plant and equipment.
(3) See Note 12 p. 190.
(4) The Group has initially applied IFRS 16 at January 1, 2019, using the modified retrospective approach. Under this approach, comparative information is not restated. There has been no impact to retained earnings of initially applying IFRS 16 at the date of initial application. Figures 2019 relate to continuing operations.
(5) Compliant with IFRS 5.33, the Company has disclosed in its Consolidated Statements of Profit or Loss and Comprehensive Income, a single amount comprising the total of the post-tax profit of discontinued operations and the post-tax gain on the disposal of the net assets constituting the discontinued operation. The Group has sold its reseller business in the US (July 2019) and part of Agfa HealthCare’s IT business (May 2020). Therefore, the Company has re-presented these disclosures for prior periods presented being FY 2019.
(6) Compliant with IFRS 5.33, the Company has presented in its Consolidated Statement of Profit or Loss and Comprehensive Income, a single amount comprising the total of the post-tax profit (loss) of discontinued operations and the post-tax profit (loss) on the disposal of net assets consti- tuting the discontinued operations. The Group has sold its Offset Solutions business in April, 2023. Comparative information has been re-presented.# AGFA-GEVAERT ANNUAL REPORT 2023
SUSTAINABILITY STATEMENTS
1 General Information 20
1.1 Basis for preparation 22
1.2 Governance 27
1.3 Corporate Sustainability Strategy 37
1.4 Double Materiality Assessment 39
2 Environmental Information 46
2.1 Disclosures pursuant to Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation) 48
2.2 Climate change 67
2.3 Pollution 73
2.4 Water and marine resources 75
2.5 Resource use and circular economy 81
3 Social Information 88
3.1 Agfa’s own workforce 90
3.2 Contractual conditions 96
3.3 Diversity, Equity & Inclusion 97
3.4 Learning & Development 103
3.5 Health & Safety 106
3.6 Engagement with Agfa stakeholders 109
3.7 Consumers and end-users’ stewardship 113
4 Governance Information 118
4.1 Business conduct 120
4.2 Management of the relationship with suppliers 121
GRI Content Index 126
Consolidated KPI table 305
The 2023 Agfa Sustainability Statement is designed to present the Agfa-Gevaert Group’s strategy, business model, governance, risks and opportunities, performance and future outlook with regards to sustainable development. This report is Agfa’s opportunity to guide its stakeholders and any internal and external readers in their understanding of the Group’s values, initiatives and overall progress made with regards to sustainability in 2023.
To ensure a thorough and comprehensive understanding of the Group’s overall performance, this report has been prepared on a consolidated basis, using the same scope of consolidation as for the financial statements, and therefore should be read in conjunction with the entire 2023 Agfa Annual Report. The information and data contained in this report cover the period from January 1, 2023 to December 31, 2023. Agfa publishes its Sustainability Statements on an annual basis. Reports from previous years can be found on www.agfa.com.
The UN 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs) are used as a reference to highlight important strategic topics and realizations, as they provide Agfa with an important framework to define and interlink its priorities and describe its impact. This helps Agfa to define the objectives of its activities, the different implications at operational level, as well as its exchanges with peers.
This Annual Report complies with the European Non-Financial Reporting guidelines (converted into Belgian law of September 3, 2017).
“I'm proud to reaffirm our strong commitment to sustainability. At Agfa, we recognize the critical importance of safeguarding our planet and its limited resources for future generations. Recently we solidified this commitment in our company's purpose statement: "Driving positive change for a greener, healthier, and brighter future." I’m especially excited about the comprehensive carbon reduction plan we established in 2023. The plan outlines clear targets and initiatives aimed at reducing greenhouse gas emissions. Through strategies such as energy conservation, transitioning to cleaner energy sources, and implementing innovative solutions, we are diligently working to optimize our energy usage. Throughout this report, you will discover that our commitment to sustainability is more than just words—it's a promise to make a real difference. At Agfa, we are committed to shaping the world of tomorrow into one that is sustainable and thriving.”
Gunther Koch, Head of Sustainability
This report has been prepared using the Global Reporting Initiative (GRI) standards as a main guideline of reference. In view of the upcoming Corporate Sustainability Reporting Directive (CSRD) application to Agfa, the European Sustainability Reporting Standards (ESRS) have also been used as guidelines of reference to prepare for full compliance as of fiscal year 2024.
The Agfa-Gevaert Group falls under the scope of the Taxonomy Regulation (Regulation (EU) 2020/852) and its Delegated Regulation (EU) 2021/2178.
Despite being considered material, classified sensitive information corresponding to intellectual property, know-how or the results of innovation may have been omitted. Nevertheless, reasonable effort has been made to ensure that beyond this omission, the overall relevance of the disclosures in question is not impaired. No exemption from disclosure of impending developments or matters in course of negotiation, as provided for in articles 19a (3) and 29a (3) of the Directive 2013/34/EU, have been used for this report.
To share any feedback or questions related to the Agfa Sustainability Statement, please visit Agfa’s website: https://www.agfa.com/corporate/contact/
“Because of the nature of its business activities, Agfa can make a real difference to create a more sustainable future. I'm noticing a significant shift among my colleagues where sustainability is increasingly becoming a key motivator for their work at Agfa."
The Agfa-Gevaert Group produces membranes for green hydrogen production. The production of green hydrogen is considered a key element in the global transition to a sustainable energy system. Agfa’s ZIRFON membranes are essential for the electrolysis process in the production of green hydrogen. The Group sees its involvement in this sector as a key contribution to the energy transition, which is a major element in the fight against climate change.
Agfa successfully completes the sale of its Offset Solutions division to the alternative investment firm AURELIUS Group. This transaction allows Agfa to focus on growing market segments, which is crucial for its future success.
Given the strong increase in demand, Agfa’s Board of Directors validates the investment for a new industrial unit for the company’s ZIRFON membranes for green hydrogen production, next to further investments in growing the current facility.
Agfa signs the EU Innovation Fund Grant Agreement GIGA-SCALES - the project to build a new industrial unit for ZIRFON membranes at its site in Mortsel, Belgium.
Agfa announces that it will be joining the Hydrogen Council as a supporting member on January 1, 2024. The Hydrogen Council is a global initiative that brings together preeminent companies with a united vision to help foster the hydrogen clean energy transition.
Agfa introduces varnish printing on the ultra-high-speed version of its high-end hybrid Jeti Tauro inkjet printer range, enabling producers of corrugated cardboard displays to embellish prints at a speed of up to 150 m²/h.
Agfa announces the launch of a new ink set for its Onset high-speed flatbed inkjet printers. These inks boast an excellent sustainability footprint, high quality and performance while drastically minimizing ink usage.
Agfa unveils its pioneering SpeedSet 1060 inkjet printing press for the packaging market at an exclusive event for packaging converters and print service providers. Set to be a game-changer in the packaging printing market, the SpeedSet merges the robustness and print excellence of an offset press with the compelling attributes of inkjet printing.
Agfa’s Tauro wide-format hybrid inkjet printer and Anuvia inks obtain the prestigious 3M Performance Guarantee, underscoring their exceptional quality and reliability.
GRI Content Index
Consolidated KPI table
Agfa HealthCare is awarded Best in KLAS for Enterprise Imaging for their Radiology solution in the PACS Middle East/Africa category. Recognized for delivering high value and support to its customers, and dedication to improving and innovating the industry.
Agfa HealthCare is awarded Frost & Sullivan’s ‘Best Practices Customer Value Leadership Award’ for 2023. This award recognizes companies which are at the forefront of innovation and was awarded to Agfa HealthCare for their customer-first approach and innovative leadership.
Because of the quality of its products and services, Agfa Radiology India is recognized as ‘Best Healthcare Brand’ by The Economic Times of India.
At Jornada Paulista de Radiologia – JPR 2023, Agfa HealthCare announces the official relaunch of its activities in Brazil, together with its long-established partner Konimagem.
Hemel Hempstead Hospital X-ray department (UK) takes delivery of their 3rd Agfa Radiology Solutions DR 600 ceiling-suspended digital X-ray room. Even in the busiest imaging environments, the solution delivers a streamlined workflow, increased throughput and enhanced experience for patients and operators alike.
A 40-site group of hospitals Nova Scotia Health (Canada) selects Agfa HealthCare’s Enterprise Imaging solution as the foundation for a provincial enterprise imaging strategy, which includes enabling the future storage of images from other clinical disciplines outside of the traditional areas of radiology and cardiology.
Agfa wins four prestigious Pinnacle Product Awards, presented by PRINTING United Alliance. The awards celebrate outstanding products that drive advancements in quality, capability, and productivity within the printing industry.
At the world’s largest radiology show, RSNA, Agfa HealthCare launches Enterprise Imaging Cloud, offering healthcare providers a solution that is secure, scalable, and accessible; easy to maintain and use - at a predictable cost.
At the 10th Digital Pathology & AI Congress in London, Agfa HealthCare announces the release of Enterprise Imaging for Pathology – introducing a scanner-agnostic solution to help support advanced workflows.# SUSTAINABILITY STATEMENTS
Unless otherwise stated:
Agfa understands greenhouse gases (GHG), as those set out by the United Nations Kyoto Protocol. The reporting of direct (Scope 1) GHG emissions covers those from:
Direct (Scope 1) GHG emissions coming from the transportation of materials, products, waste, workers and passengers are not in scope.
The reporting of indirect (Scope 2) greenhouse gas (GHG) emissions covers those from:
The data reported refers to CO2 equivalents generated from the activities’ scope indicated above. Direct (Scope 1) GHG emissions are calculated as tonnes of CO2 equivalents by multiplying the fuel amounts with corresponding emission factors. The conversion factors used for natural gas, liquid fuel and coal are those recommended by CEFIC. Regarding the calculations for indirect energy emissions (Scope 2), the conversion factor used depends on the site. For the Mortsel site, they are calculated following the recommendations of the Belgian Energy Policy Agreement (EBO: energiebeleidsovereenkomst) and using the hourly gas mixture received from our electricity suppliers. Other GHGs emissions, e.g. CH4, PFCs, NF3, and indirect (Scope 3) emissions are not in scope of the calculations for the time being.
The reporting scope of the data related to other emissions to air in this annual report covers:
For waste management, in the absence of national definitions, the following scope is considered:
The quantitative data reported for social and governance information cover all of Agfa’s entities, i.e. manufacturing sites worldwide, administrative facilities and sales organizations worldwide.
Individuals who have an employment contract with Agfa, including contracts with a temporary inactive (i.e. suspended) status, are in scope of Agfa’s own workforce. Outsourced activities, external consultants, temporary staff hired from employment agencies (or on payroll of the agency) are excluded from this data scope.
For the purpose of reporting on Diversity, Equity & Inclusion (DEI), Executive Management functions are divided into two categories: Level 2 and Level 1 & 0, Level 0 being the highest. The channels to reach, retain, and motivate these two categories are different and, therefore, it is more practical to monitor their performance separately to understand the impact of their activities.
Production volumes (tons/year) Figures including ex-Agfa Offset activities
| Year | Production (tons/year) |
|---|---|
| 2014 | 218,444 |
| 2015 | 190,671 |
| 2016 | 172,884 |
| 2017 | 167,800 |
| 2018 | 167,799 |
| 2019 | 150,164 |
| 2020 | 118,148 |
| 2021 | 124,167 |
| 2022 | 109,191 |
| 2023 | 87,349 |
Production volumes (tons/year) Figures excluding ex-Agfa Offset activities in 2023
| Year | Production (tons/year) |
|---|---|
| 2014 | 218,444 |
| 2015 | 190,671 |
| 2016 | 172,884 |
| 2017 | 167,800 |
| 2018 | 167,799 |
| 2019 | 150,164 |
| 2020 | 118,148 |
| 2021 | 124,167 |
| 2022 | 109,191 |
| 2023 | 37,930 |
Compared to 2022, Agfa’s film manufacturing plants decreased production volumes by 14.8% (total by weight), driven by a 20.0% decrease in the production of chemicals (including developing fluids) and an approximately 10.8% decrease in (PET) film production itself. The decrease in (PET) film production is a trend that has been continuing over the past years due to overall reduction of market demand. Production volume by weight for equipment decreased by 8.9% in 2023. In terms of numbers, this includes approximately 800 units produced for graphics applications (in Cambridge, Manerbio and Mississauga sites) and approximately 13,680 units for medical applications (in Munich, Peissenberg and Wuxi sites).
Each manufacturing site is responsible for its own environmental and safety data calculations. A global document of ‘Definitions and Explanations’ is made available to each site contact point to ensure data are calculated accordingly. Once a year, the global Safety, Health & Environment (SH&E) department based in Agfa’s head office collects the sites’ data for consolidation and external reporting using an Excel-based tool. The format of reporting varies depending on the type of data reported.
The reported quantitative social data are globally collected by the HR department, using a single source SAP database to centralize the information. An internal report is generated monthly to monitor changes. Upstream and downstream value chain estimations are manually gathered by Agfa’s Purchasing and Sales & Services departments respectively. These data are stored in Agfa’s Document Management System and changes are regularly checked during business reviews. In order to increase the level of maturity and accuracy for these data, Agfa plans to invest progressively in automated tools and databases.
This report contains forward-looking information that involves risks and uncertainties, including statements about Agfa’s plans, objectives, expectations and intentions. This is particularly pertinent for climate-related disclosures, which are based on current knowledge and available data. Agfa has diligently selected the most suitable and consistent methodologies for disclosed elements. Harmonized standards and calculation methodes are expected to be updated and/or developed to further enhance data quality in the future. Actual results could vary materially from those anticipated, expected, estimated or projected. Readers are cautioned that forward-looking statements include known and unknown risks and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond Agfa’s control. As a result, this information should be considered to be uncertain.
Unless otherwise stated, when referring to time intervals as of the end of the reporting period, the following time horizons are considered: up to one year for short-term, up to five years for medium-term and more than five years for long-term.
For Health & Safety, by definition, a reportable accident is an accident that must be reported to the authorities according to national and/or local legislation. Reporting requirements differ widely in the countries where Agfa operates and, therefore, there is no universal definition of a reportable accident. Therefore it was decided to refer to the frequency rate of these accidents and to use a generic definition to create a coherent indicator.
Agfa only reports data related to the emissions of ozone-depleting substances starting from 2019 because the Group had previously detected some misalignment in the calculation methodologies between some of its sites and it is impracticable to adjust comparative information for the missing years.# .. Governance
Sustainability governance is fully integrated into the overall Agfa governance structure as it is part of the organization’s core business. As explained in detail in the publicly available Corporate Governance Charter, the Board of Directors (BoD) is the ultimate management body responsible for Agfa’s Sus-tainability Strategy. In this regard, the BoD defines and reviews the behavior covered by Agfa’s Code of Conduct. The BoD entrusts the CEO, supported by the Executive Committee, together with whom he forms the Executive Management Team (EMT), to steer and supervise the implementation of Agfa’s Sustainability Strategy.
Agfa’s corporate sustainability activity comprises many different processes involving different layers of Agfa’s organizational structure. Its management approach is therefore multi-layered:
While sustainability was traditionally addressed at team and divisional levels, since 2020 Agfa has been focusing on building an overall corporate sustainability approach to frame and coordinate projects, resources and target setting between different geographies and departments. This resulted in the creation of a Corporate Sustainability Office, led by the Head of Sustainability, to coordinate and consolidate the daily roll-out of all activities in cooperation with relevant departments and to reinforce regular communication channels within the organization.
In order to facilitate such transition, the Corporate Sustainability Office relied on a Sustainability Advisory Group, which was composed of high-level team leaders across different business functions (e.g. Research & Development, Purchasing, Communications, Human Resources, Corporate Risk, etc.) and acting as sustainability ambassadors. This group met on a quarterly basis and provided strategic advice on sustainability matters, suggested new ideas to the Corporate Sustainability Office, and ensured synergy and cooperation between departments around the new Agfa sustainability strategy.
In 2022, this resulted in the publication of the Corporate Sustainability Policy, used at every business level to set specific actions and intermedi-ate milestones to reach Agfa’s company-wide objectives.
Over time, Agfa started to notice the increasing need to have a more process & product-oriented internal advisory body. In 2023, it was decided to replace the Sustainability Advisory Group with a Product & Process Sustainability Core Team. This Core Team, composed of a multidisciplinary expert team from all knowledge centers (e.g. Research & Development, Production, Engineering, divisions, supporting functions, etc.) became a new monthly platform for knowledge sharing and creation, enabling structure and governance for Agfa’s product and process sustainability, including a two-way communication channel with the management teams of the different business divisions. Agfa believes this will help it to mature its sustainability strategy and feed it with relevant business needs, prepare for a future-proof product portfolio and understand the impact of upcoming legislation around sustain-ability at short, medium and long term.
The Corporate Sustainability Office, also represented in the Core Team, ensures the right escalation to the Head of Sustainability, and therefore to the Executive Management Team (EMT), when an addressed topic is relevant for any of the sustainability-related impacts, risks and opportunities. Indeed, the Head of Sustainability - since 2022 himself an EMT member - reports quarterly directly to the EMT and to the Board of Directors to:
While maturing on sustainability topics, Agfa in 2023 decided to establish a Product & Process Sustainability Core Team. This Core Team, composed of multidisciplinary experts from all knowledge centers (e.g. Research & Development, Production, Engineering, divisions, supporting functions) became a new monthly platform for knowledge sharing and creation, enabling structure and governance for Agfa’s product and process sustainability, including a two-way communication channel with the management teams of the various divisions
Additionally, for all key material topics, the specific site management approach remains and continues to report directly to the Executive Management Team on a regular basis:
General management and key responsibilities for social topics fall under the remit of the Human Resources department due to its key role in the different stages of engagement with employees. Several Global and Regional HR Business Partners build, maintain and develop relationships with senior leaders/managers and employees and act as a point of contact for management, while being involved in important business decisions. Monthly check-ins ensure thorough follow-up and exchange over the course of the year. As Agfa has entered into a comprehensive transformation journey, strengthening its Human Resources expertise is a top priority to help Agfa put its people at the center of its transformation. This is why, since September 2021, Agfa’s Chief Human Resources Officer is also a member of the Executive Management Team.
Agfa considers a variable salary as an important part of the salary package of its employees. All Agfa employees at management level (with exception of the sales or service employees who are in principle linked to a Sales Incentive Plan or a Service Incentive Plan) are linked to the Agfa Global Bonus Plan. This plan reflects the collective and individual performance over a one-year period, through the comparison of the Agfa Group and (sub)divisional results with the defined objectives and through an individual multiplier driven by the employee performance appraisal.
Since 2022, the achievement of the Environmental, Social & Governance (ESG) objectives has been added to the bonus drivers, counting for 10% of Agfa Group results performance. Initially, this applied only to the senior leaders in management grades 1 & 2. In 2023, it has been extended to all employees subject to the Global Bonus Plan, irrespective of their management grades, excluding Agfa employees at management level in HealthCare IT which will be added to the plan as of 2024. Depending on the number of ESG objectives at target, the payout level could vary between 0% and 200%.
The ESG objectives are aligned to five of the priority Sustainable Development Goals (SDGs) identified as the most relevant for Agfa and concern gender parity and Diversity, Equity & Inclusion (SDG 5), Health & Safety (SDG 3), climate action (SDG 13), sustainable innovation (SDG 9) and global sustainability performance (SDG 12).
Changes to the design of the Global Bonus Plan are to be proposed by the Executive Management Team (EMT) and approved by the Board of Directors. The global budget definition (funding ratio) is determined at the level of Agfa, based on the targeted EBITDA. The EMT validates the Agfa Group & divisional EBITDA funding ratios and the final distribution of individual performance ratings.
Prioritizing sustainability material topics, as well as delivering Agfa’s growth strategy in the long term, relies on appropriately identifying and managing risks that could affect its operations. Risk management is therefore an integral part of Agfa’s decision-making process regarding the business strategy as a whole. At a higher level, Agfa’s Executive Management is responsible for the Group’s internal control and risk system, including those related to financial reporting as approved by the Board of Directors.
Risk management processes, in accordance with ISO 31000 risk management standards, are already embedded in Agfa procedures and management systems. Considering risks and opportunities are an integral part of the decision process at the different levels within the organization, specific control mechanisms and deep-dive risk assessments are implemented where needed by business units and/or by corporate offices.
Overall, there is strong awareness of risks (internally referred to as uncertainty/ threat) with a very high focus on mitigation actions. The Agfa Risk Management approach uses the principle of both the 2017 COSO-ERM and the 2018 ISO31000 risk management guidelines with a focus on strategic objectives to enable the identification of the main threats and relevant treatment strategies linked to strategic objectives.
In 2022, a series of structured interviews were conducted with Executive Management as well as other critical corporate support functions (e.g. Human Resources, Finance, IT and Supply Chain). Key objectives were discussed with each leader, as well as the associated uncertainty/threats that they anticipated could hinder the achievement of their top objectives. The information collected was systematized and regrouped into three main areas of threat: Business, Operational Excellence and Human Capital. Then they were prioritized by assessing their likelihood of happening within a five-year strategic horizon, as well as their potential financial impact should they materialize. This top-down approach acted as a proxy to highlight the current highest risks for Agfa.
In 2023, the Enterprise Risk Management (ERM) journey of structurally capturing risk information and management on an objective-centric manner per business division and support function continued. As a result, 85 associated risks and threats could be identified and allocated to 10 updated risk categories. Below are the top risks categories that were identified by the Agfa Risk Management process. Certain risks are slightly regrouped and renamed compared to last year following the most recent risk identification process:
For each of these top risks, both at the Group level and within each business division and support function, mitigation actions, including self-assessment, are being defined and implemented. This involves, for example, the development of strategic partnerships, aligning R&D roadmaps with the expectations of key customers, increasing quality assurance and process controls, and executing various optimization projects. The elaboration, reporting, and monitoring of this mitigation plan will be key focus points for the coming years, along with the refined risk quantification (impact & likelihood).
The following is a short description of the risks relevant to Agfa:
In addition to the risks described in this chapter, failure to fulfil Agfa’s obligations towards authorities and stakeholders for any of the points described could result in reputational damage that could hinder the future of the Group. While it is difficult to estimate the impact of such damage, as it would widely depend on the type of issue occurred, Agfa makes all possible efforts to prevent this by setting in place clear and effective governance to run all its operations.
The numerous laws and regulations to which Agfa is subject are becoming increasingly complex, stringent and are changing faster and more frequently than before. These laws and regulations include, among others, requirements related to data protection, intellectual property laws, labor relation laws, tax laws, anti-trust rules, etc.# Complying with all these regulations on a global scale involves risks as well as additional costs that may negatively impact the Group's overall profit performance. Agfa owns, has applications pending for, and is licensed, under many patents relating to a variety of products, as well as software. The company relies on a combination of patent, copyright, trademark and trade secret legislation, trade secrets, confidentiality procedures, contractual provisions and license arrangements to establish and protect its proprietary rights. The Group also has a policy of strictly respecting third party’s intellectual property rights, however there can be no assurance that third parties will not claim such infringements. Any such claim will be investigated on its merits and corrective actions, if any, will be taken as appropriate.
Agfa is subject to many environmental requirements in the various countries in which it operates, including air and waste water emissions, hazardous materials and spill prevention and clean up. Out of the materiality assessment performed in 2023, the following impacts, risks and opportunities related to environmental topics were identified:
| CSRD sub topics | Financial Impact | Internal SH | Customers | Peers | Internal SH | UNEP tool | Sector federations |
|---|---|---|---|---|---|---|---|
| E1 Greenhouse gas emissions | High | High | x | x | x | x | x |
| E1 Energy usage | High | Significant | x | x | x | x | x |
| E1 Climate adaptation | Limited | Limited | x | ||||
| E1 Innovation and investments | Significant | High | x | x | x | x | |
| E2 Air pollution on site | Significant | Moderate | x | ||||
| E2 Water pollution | Limited | Moderate | |||||
| E2 Soil pollution | Limited | Limited | x | x | |||
| E2 Pollution of living organisms and food resources | Limited | Limited | |||||
| E2 Microplastics | Limited | Moderate | |||||
| E2 Harmful substances | High | Moderate | x | x | |||
| E3 Water and waste- water management (consumption, withdrawals and discharges) | Significant | Moderate | X | x | X | x | |
| E4 Impact drivers of biodiversity loss upstream in value chain | Significant | Moderate | X | x | |||
| E4 Impact drivers of biodiversity loss by products and production | Moderate | Limited | |||||
| E5 Resources inflows, including resource use | Moderate | High | X | X | X | x | |
| E5 Resource outflows, related to products and services incl. waste generation and prevention | High | Significant | x | X | x | X |
• Impacts in upstream value chain by manufacturing chemicals/films/foils/…
• Regulatory risk: climate regulations increasing costs of raw materials or GHG emissions of sites
• Impact of energy efficiency of Agfa operations
• Technology risk of low renewable energy availability in a context of higher energy cost and Agfa being highly dependent on energy (energy intensive activities like polyester extrusion)
• Impact of water scarcity due to climate adaptation
• Physical risk: due to floods in Mortsel in case of heavy rain
• Location in Belgium: risk of not benefiting from tax incentives and government grants while competitors might get these in other countries
• New products opportunity of green energy business
• Impact of smell at neighbourhood of specific sites
• Legislation risk of green taxes related to pollution bringing additional tax and investments to comply
• Impact of micro pollutants to water (e.g. nano particles, micro plastics, ...)
• Reputation risk due to historical pollution and costs of remediation requirements at Mortsel site
• Market opportunity of Agfa producing inks that are certified to be used in food packaging
• Impact from DPC activities when microplastics (bioaccumulative pollutants)from Agfa products (use or end of life disposal) end up in organisms and finally in food chains
• Impact by developing substitutes for hazardous substances (e.g. chemistry free printing plates)
• Legislation and business continuity risk of various hazardous substances legislation (e.g. REACH)
• Impacts of water consumption and efficiency (especially in areas of high water scarcity)
• Legislation risk of green taxes bringing additional tasks to comply and possible fines (e.g. Spain, UK)
• Biodiversity impacts related to the upstream value chain (e.g. extraction of critical metals for silver)
• Business continuity risk of scarcity of critical metals: price increase or material not available
• Impact of the product that allows to substitute critical metals
• Reputation opportunity of turning vacant space on sites into natural habitats (e.g. Argentina)
• Impact of integrating (internal) recycled content in Agfa products (material or packaging)
• Business continuity risk by inflation of material costs, scarcity and technical inability to use alternative
• Impact on (lowering) the consumable intensity during the use phase of products
• Legislation risk of not being able to answer requirements regarding Product Passport (and other regulations coming from the EU’s Circular Economy Action Plan)
SUSTAINABILITY STATEMENTS
Agfa has developed strict policies at each site to prevent the likelihood of these risks materializing. Risk assessment with regards to environmental aspects must be updated at least annually by the responsible departments. Significant operating and capital expenditures are invested to comply with applicable standards. Provision is also made for current and reasonably foreseeable compliance and remediation costs. In addition to its efforts to limit its operations’ impact on the planet, as further explained in the dedicated section of this report, Agfa has assessed and is monitoring possible adverse effects of climate change to its operations in order to be able to initiate an adequate response in case of a major event impacting Agfa’s operations and its customers. Among other long(er) term impacts, climate change causes extreme natural events that could impact the continuity of operations for Agfa’s sites or in its supply chain. Its global distribution network and diverse site locations reduce Agfa’s exposure to phys- ical risks. Every year, Agfa carries out an assessment of its potential exposure to natural disasters, i.e. earthquake, volcanic eruption, cyclone, tornado, flood, lightning, tropical storm, tsunami and thermal anomalies. From this analysis it resulted that the exposure for our direct operations is relatively low. To further mitigate this risk and broaden the scope to encompass both physical and transition risks, Agfa plans to conduct a specific climate risk screening in 2024. This assessment will focus on business locations and business activities, using Intergovernmental Panel on Climate Change (IPCC) scenarios, to better identify red flags. Agfa’s goal is to develop adequate actionable prevention strategies and to implement solutions to address the identified climate risks.
With regards to social and personnel related risks, failure to attract relevant talents and the potential to להlose key management and personnel are key points to address in order to enable Agfa to fulfill its strategic ambition, build further expertise and, above all, manage the other risks faced as an organiza- tion. Agfa also works to ensure it can offer a remuneration package in line with the market, as well as the possibility of growing and developing within the organization as a way of retaining talent as long as possible. More details on the concrete policies in place are listed in the ‘Social Information’ chapter of the Annual Report. In addition, out of the materiality assessment performed in 2023, the following impacts, risks and opportunities related to social topics were identified:
| CSRD sub topics | Financial Impact | Internal SH | Customers | Peers | Internal SH | UNEP tool | Sector federations |
|---|---|---|---|---|---|---|---|
| S1 Contractual conditions | High | Significant | x | X | |||
| S1 Social dialogue | Moderate | Significant | X | ||||
| S1 Human rights, fundamental free- doms, democratic principles | Moderate | Moderate | X | ||||
| S1 (Occupational) Health & Safety | Significant | Moderate | X | X | |||
| S1 Training and skills development | High | Significant | X | X | X | ||
| S1 Diversity and equity | High | Significant | X | x | X | ||
| S2 Working conditions & human rights | Moderate | Moderate | X | X | x | ||
| S2 Health & Safety | Moderate | Significant | X | X |
• Current contractual conditions participates to the well-being and job satisfaction of our employees
• Risk of payment inequality because of war for talent in some departments (e.g. finance department)
• Social dialogue impacts agreements and policies that improve working conditions
• Business continuity risk from negotiation processes potentially slowing down decisions to address employee’s concerns
• Positive impact on the dignity and value of employees by prioritizing respect for human rights
• Legal risk of non-compliance with labor and human rights laws can result in legal consequences, including fines, penalties, and reputational damage through lawsuits and regulatory actions
• Positive impact on health of employees thanks to several measures (EHS management system, environmental controls to verify that emissions meet applicable limits, ...)
• Business continuity risk of (dis)ability to ensure employee well-being can lead to increased absenteeism, reduced productivity, and higher turnover rates
• Enhancing knowledge and capabilities of employees leads to higher job satisfaction, improved morale, and increased engagement
• Opportunity to strengthen innovation mindset via young generation
• Prioritizing diversity and equity leads to more engaged employees and better business decisions
• Business continuity risk from age distribution in Belgium could become a risk of knowledge loss and talents gaps
• Implementation of fair labor practices lead to improved working conditions in the value chain
• Business continuity and reputational risks of lack of transparency in suppliers working conditions
• Reducing the risk of accidents and# SUSTAINABILITY STATEMENTS
Effective corporate governance and stakeholder management practices can create several benefits for a company and its stakeholders. The reverse is that weaknesses in corporate governance practices and stakeholder management processes expose a company and its stakeholders to several risks. Potential risks inter alia include the following:
In addition, out of the materiality assessment performed in 2023, the following impacts, risks and opportunities related to governance topics were identified:
| Impacts, risks and opportunities with high score | Financial Impact | Internal SH | Customers | Peers | Internal SH | UNEP tool | Sector federations |
|---|---|---|---|---|---|---|---|
| G1 Protection of whistle-blowers | Significant | Significant | X | x | |||
| G1 Corporate culture | Significant | Significant | X | X | X | ||
| G1 Animal welfare | Limited | Moderate | X | ||||
| G1 Representation and engagement in working groups | Moderate | Significant | X | ||||
| G1 Management of relationships with suppliers including payment practices | Significant | Moderate | X | X | X | ||
| G1 Corruption and bribery | Significant | Moderate | x | x | X |
These risks could potentially damage the reputation of the company and lead to significant legal costs. Violations of laws, regulations or Agfa policies – such as the Code of Conduct – on fraud, antitrust, corruption, conflicts of interest and other similar areas, can have serious consequences for the Group. Possible consequences include prosecution, fines and penalties, as well as contractual, financial and reputational damage.
In 2019, to ensure its focus on sustainability, Agfa has identified the key priorities on which its corpo- rate sustainability strategy was to be shaped. For that, Agfa has used the 17 Sustainable Development Goals framework from the United Nations and identified six that are the most relevant to the Group, based on the potential beneficial impact that its activities can have in reaching these goals. For each of them, Agfa has set an ambition and prioritized a number of actions where Agfa can make a difference. Since then, for five of these SDGs, this work is used every year to define concrete annual targets. The sixth priority SDG ‘Quality Education’ is embedded into Agfa’s Learning & Development culture.
| SDG | Long Term Ambition 2025 | Ambition | Annual targets for 2023 |
|---|---|---|---|
| Full parity, also at manage- ment level, extended to a comprehensive DEI policy | Align Agfa woman share to women market representation | • Female recruitment intake target reaching +5% of the women market representation • Launch of 3 DEI Initiatives (one per Employee Resource Group) | |
| Zero harm | Reduce by 50% the accidents with one day lost vs 2019 | • Reduction by 10% the accidents with minimum one day lost each year = maximum 24 accidents with minimum one day lost in 2023 | |
| CO 2 neutral | Work towards Paris agreement | • Comprehensive carbon reduction plan for Agfa in Belgium, approved and implementation 100% on track • Global Agfa carbon reduction plan agreed • Agfa mobility plan extension to minimum one additional country | |
| Sustainable business portfolio | Apply methodology to product portfolio, increase share of sustainable innovation | • Full compliance to Progress in sustainability towards next generation products principle • Full application of the sustainability matrix to next generation R&D product portfolio in the Digital Print & Chemicals division • Extension to the Radiology Solution division of the sustainability matrix to next generation R&D product portfolios | |
| EcoVadis “Gold” medal | Top 25% of EcoVadis rated companies | • Increase of absolute EcoVadis score by minimum 20 points in order to generate an increase in overall score |
To assess its approach to sustainability management and benchmark its performance compared to the best in the sector, Agfa carried out a third-party assessment via EcoVadis for the first time in 2021. EcoVadis is one of the world’s largest providers of business sustainability ratings and was chosen because it has already rated more than 125,000 companies. The EcoVadis sustainability assessment is a paid service to assess a compa- ny’s material sustainability impacts based on a questionnaire and extensive supporting documentation. This material is assessed by the organization based on international standards such as the Global Reporting Index (GRI), ISO 26000 and the guiding principles of the Global Compact. Agfa’s performance in 2023, assessed in January 2024, increased to a score of 60 out of 100, which is considered a good result. This score places Agfa among the top 25% of all companies assessed by EcoVadis across all industries in the past 12 months (75+ percentile), allowing Agfa to retain its bronze medal. The feedback received from EcoVadis serves as a valuable source of information, guiding Agfa in identifying improvement paths for its processes across the entire Group.
Compared to its previous assessment in 2022, Agfa demonstrated improvement in all addressed areas (Environment, Labor & Human Rights, Ethics, and Sustainable Procurement). This progress was largely driven by dedicated working groups focused, for example, on carbon management, supplier engagement, and other initiatives. Agfa plans to adopt the same approach in 2024 and beyond to con- tinue making progress in its sustainability efforts. Agfa believes that sustainable business solutions and production are essential to accomplish its growth strategy. The Group therefore considers sustainability as a decision factor in its go-to-market strategies. Since a sustainable business practice entails embedding it in all processes and at all levels of operations, coordination between regions and between departments and business units is essential to successfully implement the global strategy. In 2023, Agfa continued its efforts to integrate sustainable development in the solutions it brings to the market. More specifically, Agfa continued:
Innovation is part of Agfa’s DNA and the Group consider it essential for the accomplishment of its growth strategy. To support the different processes that ensure continuous innovation, Agfa invests 5-6% of its turnover in R&D and innovation each year. Product and technology innovation at Agfa strives for sustainable value creation for its customers and other stakeholders, an objective which is embedded in its ideation processes. In addition to developing new products, Agfa is constantly looking for solutions that not only reduce its own ecological footprint, but also that of its customers. Since 2022, rather than operating as an independent group as it used to, the innovation teams have been placed in close proximity to areas of growth and are fully integrated into the business divisions. While Agfa’s HealthCare IT and Radiology Solutions divisions rely on the innovation focus of their dedicated R&D teams, the innovation teams of Digital Print & Chemicals remain supported by Agfa’s AGFA-GEVAERT ANNUAL REPORT 2023 Materials Technology Centre (MTC), an R&D group which has historically been operating as an Agfa competence center, supporting divisions in technological innovation for materials and processes. Innovation at Agfa is characterized by the process of setting up a continuous ideation process select- ing, validating and ranking proposals. The ideas are assessed through a tailored scoring methodology which considers the attractiveness of the market segments, commercial success factors, technical feasibility and sustainability criteria. The evaluation of changing business models is also an important assessment criterion. A relevant example for Agfa within this context is digitalization and Software as a Service. Innovation teams continue to look at societal and market trends to identify where Agfa can develop new business in adjacent and less adjacent markets and technologies, in line with the current company strategy. This is done either by leveraging existing core competencies, or through developing new markets and technologies. Agfa also involves its customers and other industry stakeholders in its innovation process through its sales and service teams, as they are best placed to capture the needs of Agfa’s customers and, by extension, of society. Collaboration and open innovation are stimulated to accelerate the introduction of solutions in markets where Agfa is not present today. Collaboration with startup and scale up networks is set up to accelerate the exploration and validation of ideas in new applications or unknown markets, but also to encourage a learning mindset and stimulate employees to dare to leave their comfort zone. With regards to its chemistry expertise, one way that Agfa shares this is via Agfa-Labs, its open innova- tion platform for materials and coating research. Through this platform, Agfa supports the industry by investigating the potential use of materials in applications such as life sciences, construction, plastic and polymers, etc. 2023 remained a challenging and transformative year for Agfa. As it is in a process of internal reorgan- ization to adapt its structure to changing market demands, Agfa remains convinced that continuous investment in research and innovation is the key to continue succeeding in its mission of being the partner of choice for the long term for its customers. R&D and innovation will continue to be at the core of Agfa’s growth strategy, focused both on improving the performance of existing solutions and on developing new ones. In 2023, Agfa invested 6.3% of its revenue in R&D, which confirms its strong focus on continuous innovation. Agfa’s strong commitment is also shown by the series of collaborative innovation projects it set up, either Government/EU funded or industry funded, which aim to contribute to continuous innovation either by improving the performance of existing materials, or by developing new ones. As of February 2, 2024, Agfa owned 531 active patent families, together representing 2,050 active patent rights, of which 1,653 granted patents and 397 pending applications. This decrease, compared to previous year, is mainly due to the carve-out of ex-Agfa Offset activities.
In 2019, Agfa formalized its commitment to sustainability by carrying out a first materiality assess- ment to identify the topics representing its most significant impacts on the economy, environment and people, allowing it to thoroughly analyze its main non-financial societal impacts. This internal analysis was then integrated with an external analysis regarding the significance for Agfa’s main stakeholders and hence how these issues would affect the business. The internal materiality exercise was done within the context of a Corporate Social Responsibility (CSR) workshop, resulting in the identification of six priority SDGs and 13 themes with the highest materiality for Agfa’s stakeholders. In 2021, these material topics were reviewed through a survey to ensure the adequacy of selected goals and confirm that Agfa was indeed working on priorities that were relevant to the business context.
In 2023, Agfa updated its materiality analysis in accordance with the double materiality approach introduced by the EU Commission in the Corporate Sustainability Reporting Directive (CSRD). This method mandates the assessment of impacts, risks, and opportunities from two perspectives: financial materiality, focusing on ESG topics influencing Agfa’s financial performance, and impact materiality, considering ESG topics arising from Agfa’s activities that affect society and the environment. The sum- marized results, available in Agfa’s materiality matrix, provide insights into topics deemed material for the Group and its stakeholders. This strategic identification will reinforce Agfa’s sustainability priori- ties and further enhance its ESG performance, helping the Group in identifying the current and future material topics that are integrated in its sustainability strategy.
Financial materiality
What ESG topics impact the financial performance of Agfa (in terms of turnover, market share, investments required, …)?
Evaluate Risks and Opportunities (short, medium, long term)
Impact materiality
On which ESG topics does Agfa have a significant impact?
Evaluate Impact (actual and potential)
The double materiality approach was coordinated by Agfa’s Corporate Sustainability Office. Starting from all Environmental, Social and Governance (ESG) subtopics outlined by the CSRD, a first selection of ESG topics was made considering their relevance for Agfa and the sectors it serves. This process yielded 33 potential material topics. All relevant topics have then been assessed based on their (poten- tial) financial impact for Agfa and on the time frame – short, medium or long term – at which it could (potentially) materialize. This evaluation incorporated insights from Agfa’s Enterprise Risk Manage- ment (ERM) system, financial benchmark analysis of peers and materiality within Agfa’s value chain, encompassing both suppliers and clients. Internal stakeholders were engaged through workshops, surveys and interviews. Specific financial stakeholders were also interviewed to gather external per- spectives. Impact materiality was assessed using data from tools such as United Nations Environment Programme (UNEP) and World Wide Fund for Nature (WWF) risks, ESG ratings, sector federations materiality information, existing internal performance indicators and engagement with affected stake- holders through workshops and surveys to validate impacts on severity (and likelihood).# AGFA-GEVAERT ANNUAL REPORT 2023
| Internal stakeholders | Sector federations | UNEP tool | |
|---|---|---|---|
| Score on subtopic level | 60% | 20% | 20% |
| Workshop: Score per impact (criteria: severity and likelihood) | |||
| After workshop: Feedback ranking subtopic | |||
| Score on subtopic level | Count of sector federations taking subtopic into account | Score on subtopic level for Environmental indicators | |
| Score on subtopic level |
| Internal stakeholders | Peers | Customers | |
|---|---|---|---|
| Score on subtopic level | 60% | 10% | 30% |
| After workshop: Score per risk and assessment (criteria: financial impact and term) | |||
| Score on subtopic level | Count of peers considering subtopic as material | Score on subtopic level | |
| Score on subtopic level | Count of customers considering sub- topic as material (desk research and questionnaire) |
Materiality scores were consolidated on a five point scale matrix, enabling a clearer categorization of topics within the different ranking categories, at Group level. No weight was assigned per division, as the transformation Agfa is going through results in a misalignment between the current financial situation and anticipated future growth of the divisions. This approach also fits with Agfa’s ERM conducted at Group level. The results of the double materiality analysis were validated in a workshop with Agfa’s Executive Management Team. The threshold for materiality has been set at 60% for both impact and financial materiality corresponding to critical and high impact and/or financial materiality.
 document published by the EU Commission on December 19, 2022, due to the fact that a climate risk and vulnerability assessment of the most important physical climate risks that are material to each economic activity, and a documented climate adaptation plan for these activities, are not yet in place.
For now, none of the assessed economic activities of Agfa qualify as eligible activities as described in the Regulation for this environmental objective.
The following economic activities of Agfa qualify as standalone eligible activities:
The following economic activities of Agfa qualify as enabling eligible activities:
The following economic activities of Agfa qualify as standalone eligible activities:
The following economic activities of Agfa qualify as standalone eligible activities:
In order to be aligned and thus qualify as environmentally sustainable according to EU Taxonomy, the eligible economic activities must also do no significant harm (DNSH) to any of the other environmental objectives set out in the Taxonomy Regulation, be carried out in compliance with minimum (social) safeguards set out in the Taxonomy Regulation and comply with technical screening criteria established by the Commission through delegated acts in accordance with the Taxonomy Regulation.
Based on the fact that all activities share the same DNSH criteria with regards to the climate change adaptation environmental objective (i.e. the development of a climate risk and vulnerability assessment for each eligible activity), and that Agfa’s environmental risks assessment performed at corporate level is not specifically developed to adapt each of the eligible activities to the adverse impact of current or expected future climate risks, it can be concluded that all activities identified as Taxonomy-eligible are automatically considered not Taxonomy-aligned.
| In 2021 | In 2022 | In 2023 | |
|---|---|---|---|
| Proportion of Turnover linked to Taxonomy-aligned activities | 0.0% | 0.0% | 0.0% |
| Proportion of CapEx linked to Taxonomy-aligned activities | 0.0% | 0.0% | 0.0% |
| Proportion of OpEx linked to Taxonomy-aligned activities | 0.0% | 0.0% | 0.0% |
However, the alignment process is an ongoing journey.
In September 2002, the Fund for the Conservation of Birds of Prey (F.I.R.) placed a peregrine falcon nest box on the 70-meter high ‘GEVAERT’ factory chimney of Agfa’s plant in Mortsel, Belgium. The provision of suitable nesting opportunities was needed for the conservation of the falcon species in Europe. Since 2007, the factory chimney, which is the beacon for everyone who visits Agfa’s head office, is also a home for a peregrine falcon couple. In 2023, for the 17th year in a row, the couple came back to its nest and mom and dad took turns brooding their eggs. The four baby peregrine falcons born in 2023 bring the total offspring of the couple to 46. Before they leave the nest, the peregrine falcons are ringed with a unique identification number that allows identification and further tracking. Every spring, the livestream of the falcon family can be watched on Agfa’s website: www.agfa.be/slechtvalken. This project is carried out with the support and cooperation of the local city of Mortsel, Natuurpunt Land van Reyen (an independent voluntary association that ensures the protection of vulnerable and endangered nature in Flanders) and Vogelbescherming (a Belgian nature conservation organization).
Agfa supporting local biodiversity# AGFA-GEVAERT ANNUAL REPORT 2023
Considering the relatively long list of eligible activities and the fact that these are eligible due to the nature of Agfa’s business but still need to be documented according to the EU Taxonomy Regulation requirements, Agfa is reviewing how to best address the gaps and speed up the assessment for the other DNSH criteria and the Technical Screening Criteria in order to increase its aligned performance for the next reporting years. Regarding compliance with minimum safeguards as laid out in Article 18 of the EU Taxonomy Regulation, Agfa considers that the substantive topics which remain pertinent to them, i.e. human rights (including labor and consumer rights), bribery, bribe solicitation and extortion, taxation and fair competition, are already part of its DNA and way of operating. Some process and documentation improvement points have been observed, concerning for example the human rights due diligence process, while screening Agfa’s procedures in the context of EU Taxonomy to ensure the alignment with the OECD Guidelines for Multinational Enterprises (OECD MNE Guidelines), UN Guiding Principles on Business and Human Rights, Declaration of the International Labor Organization on Fundamental Principles and Rights at Work and International Bill of Human Rights. However, no breaches of laws and regulations regarding these four core topics have occurred, neither has Agfa refused to engage in a case taken up by an OECD National Contact Point (NCP). This annual report addresses in different sections Agfa’s core values and practices implemented to roll out these minimum safeguards in a responsible and respectful way. Further details on Agfa’s commitments are included in the Group’s Code of Conduct and in the chapters throughout this report.
As set out in Section 1.1.1 of the Disclosures Delegated Act which defines the Turnover KPI, the KPI numerator is calculated based on the net turnover derived from products or services, including intangibles, associated with identified eligible activities such as those generated by Agfa products linked to the manufacture of plastics in primary form (PET), other low carbon technologies (ZIRFON), phosphorous recovery from imaging plates, or HealthCare IT managed services (hosting activities). For the KPI denominator, Section 1.1.1 of the Disclosures Delegated Act sets out that the total net turnover is calculated as amounts derived from the total sale of products and the provision of services after deducting sales rebates and value added tax and other taxes directly linked to turnover. Revenue from entities under the equity method, intercompany revenue, income from subsidies, revenue from discontinued operations and IFRS 5 profit are excluded. These definitions are in line with International Financial Reporting Standards (IFRS), the reporting framework used by Agfa for the financial part of this annual report.
As set out in Section 1.1.2 of the Disclosures Delegated Act that defines the CapEx KPI, the KPI numerator is calculated based on the net CapEx from Taxonomy eligible activities that is:
* Related to assets/processes associated with Taxonomy eligible activities.
* Part of a plan to expand Taxonomy eligible activities or allow activities to become aligned (CapEx plan).
* Linked to the purchase of output from Taxonomy eligible activities and individual measures enabling the target activities to become low-carbon or to lead to GHG reductions, provided that such measures are implemented and operational within 18 months.
These definitions are in line with the reporting framework used by Agfa for the financial part of this annual report. CapEx for specific projects/activities is easily traceable based on project numbers and has been listed on that basis. More general CapEx however, for instance essential replacements/renewals/enhancements to ensure the factory keeps running, have been allocated to the eligible activities based on allocation keys linked to the volumes that each activity represents in that CapEx area. For the KPI denominator, according to the Section 1.1.2 of the Disclosures Delegated Act, the total CapEx covers additions to tangible and intangible assets before depreciation, amortization and re-measurements, including those resulting from revaluations or impairments for the relevant fiscal year and excluding any changes in fair value and assets resulting from business combinations.
As set out in the Section 1.1.3 of the Disclosures Delegated Act which defines the OpEx KPI, the KPI numerator is calculated based on the net OpEx from Taxonomy eligible activities that is:
* Related to assets/processes associated with Taxonomy eligible activities, including training and other human resources on climate adaptation needs, and direct non-capitalized costs that represent R&D.
* Part of the Capex plan to expand Taxonomy eligible activities or allow activities to become aligned.
* Linked to the purchase of output from Taxonomy eligible activities and individual measures enabling the target activities to become low-carbon or to lead to GHG reductions, as well as building renovation measures, provided that such measures are implemented and operational within 18 months.
For the KPI denominator, according to Section 1.1.3 of the Disclosures Delegated Act, the total OpEx covers direct non-capitalized costs relating to R&D (not included in CapEx), building renovation measures, short-term lease, maintenance and repair and any other direct expenditures relating to day-to-day servicing of assets of property, plant & equipment (PPE) by the company or a third party to whom activities are outsourced that are necessary to ensure the continued and effective functioning of such assets. These ‘Other direct expenses’ exclude non-exhaustively, as per the Disclosures Delegated Act frequently asked questions (FAQ) document published by the EU Commission on February 5, 2022: overheads, raw materials, cost of employee operating the machine, cost of managing R&D projects, electricity/fluids needed to operate PPE but include maintenance material, cost of employee repairing a machine, cost of employee cleaning a factory, IT dedicated to maintenance. These definitions are not fully in line with the reporting framework used by Agfa for the financial part of this annual report. Therefore, Agfa has made sure that all reported figures are documented and auditable, limiting the number of assumptions to the maximum. Agfa believes that the applied
methodology covers most cost centers with limited deviations and therefore no significant gaps are expected:
* R&D has been directly retrieved from Agfa’s Profit & Loss statement.
* Building renovation measures, maintenance and repair and any other direct expenditures relating to day-to-day servicing have been considered together to avoid double counting in the allocation in the numerator across economic activities.
* Figures are retrieved out of a dedicated G/L account for ‘Repair and Maintenance Expenses & Quality Expenses’ that comprises all external costs related to repair and maintenance, including cleaning and security expenses. For internal costs, Agfa has decided to avoid the combination of information from different cost accounts to keep a clear source of information and avoid double counting in the allocation of the numerator across economic activities. Instead, the Group has assumed for all companies, except the biggest contributor Agfa-Gevaert NV, that this account covers all relevant costs. For Agfa-Gevaert NV, this account was replaced with only relevant external costs completed by the sum of all maintenance and special repairs (both internal and external) registered on all cost centers within Agfa-Gevaert NV (excluding of course the R&D cost centers to avoid double count).
* Short-term lease is retrieved out of a dedicated G/L account ‘Lease Costs of Low Value Assets and Short-term Leases’.
The same definitions apply as the basis for the calculations of KPIs for alignment reporting for Turnover, CapEx and OpEx numerators and denominators, provided that ‘eligible’ gets replaced by ‘aligned’ and ‘eligibility’ by ‘alignment’ in the text.
The tables on the following pages provide a detailed overview of Taxonomy-aligned economic activities:
* Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023
* Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023
* Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023
* 2023 Complementary disclosures referred to in Article 8(6) and (7)
* Nuclear and fossil gas related activities
* Taxonomy-aligned economic activities (denominator)
* Taxonomy-aligned economic activities (numerator)
* Taxonomy-eligible but not taxonomy-aligned economic activities
* Taxonomy non-eligible economic activities
| Financial year 2023 | ||
|---|---|---|
| 2023 | ||
| Substantial contribution criteria | ||
| DNSH criteria (“Does Not Significantly Harm”) | ||
| Economic activities (1) | Code (2) | Turnover (3) |
| Climate change mitigation | ||
| Climate change adaption | ||
| Proportion of turnover (4) |
| Economic activities (1) | Code (2) | Turnover (3) | Proportion of turnover (4) | Climate change mitigation (5) | Climate change adaption (6) | Water (7) | Pollution (8) | Circular economy (9) | Bio- diversity (10) | Climate change mitigation (11) | Climate change adaption (12) | Water (13) | Pollution (14) | Circular econ- omy (15) | Biodiversity (16) | Minimum safeguards (17) | Proportion of Taxonomy- aligned (A.1) or -eligible (A.2) turnover, year 2023 (18) | Category enabling activity (19) | Category transitional activity (20) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| A.1 Environmental sustainable activities (Taxonomy-aligned) | |||||||||||||||||||
| Turnover of environmental sustainable activities (Taxonomy-aligned) (A.1) | € - | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | N | N | N | N | N | 0.0% | N | N | |
| Of which enabling | € - | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | N | N | N | N | N | 0.0% | E | ||
| Of which transitional | € - | 0.0% | N | N | N | N | N | 0.0% | T | ||||||||||
| A.2 Taxonomy-eligible but not environmental sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||
| CCM 3.6 Manufacture of other low carbon technologies | C22 | € 23,371,593 | 2.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.2% | ||
| CCM 3.17 Manufacture of plastics in primary form | C20.16 | € 406,781,072 | 35.4% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 26.0% | ||
| CCM 4.1 Electricity generation using solar photovoltaic technology | D35.11, F42.22 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||
| CCM 4.11 Storage of thermal energy | - | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||
| CCM 4.15 District heating/cooling distribution | D35.30 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||
| CCM 4.30 High-efficiency co-generation of heat/cool and power from fossil gaseous fuels | D35.11 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||
| CCM 5.3 Construction, extension and operation of waste water collection and treatment | E37.00 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||
| CCM 5.9 Material recovery from non-hazardous waste | E38.32 | € 5,067,686 | 0.4% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.4% | ||
| CCM 6.4 Operation of personal mobility devices, cycle logistics | N77.11 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||
| CCM 6.5 Transport by motorbikes, passenger cars and light commercial vehicles | N77.11 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||
| CCM 7.3 Installation, maintenance and repair of energy efficiency equipment | F42, F43, M71, C25, C33.12 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||
| CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) | F42, F43, M71, C25 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||
| CCM 7.5 Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings | F42, F43, M71, C25 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||
| CCM 8.1 Data processing, hosting and related activities | J63.11 | € 10,881,202 | 0.9% | EL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | NEL | 0.5% | ||
| CE 1.2 Manufacture of electrical and electronic equip- ment | C26, C27 | € - | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | NEL | NEL | NEL | NEL | EL | NEL | NEL | 0.0% | ||
| CE 2.4 Treatment of hazardous waste | E38.22, E38.32, F42.9 | € - | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | NEL | NEL | NEL | NEL | EL | NEL | NEL | 0.0% | ||
| CE 3.2 Renovation of existing buildings | F41, F43 | € - | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | NEL | NEL | NEL | NEL | EL | NEL | NEL | 0.0% | ||
| CE 3.3 Demolition and wrecking of buildings and other structures | F43.1 | € - | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | NEL | NEL | NEL | NEL | EL | NEL | NEL | 0.0% | ||
| CE 4.1 Provision of IT/OT data-driven solutions | C26, C27, J58.29, J61, J62, J63.1 | € - | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | NEL | NEL | NEL | NEL | EL | NEL | NEL | 0.0% | ||
| CE 5.1 Repair, refurbishment and remanufacturing | - | € - | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | NEL | NEL | NEL | NEL | EL | NEL | NEL | 0.0% | ||
| CE 5.2 Sale of spare parts | G46, G47 | € - | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | NEL | NEL | NEL | NEL | EL | NEL | NEL | 0.0% | ||
| CE 5.3 Preparation for re-use of end-of-life products and product components | - | € - | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | NEL | NEL | NEL | NEL | EL | NEL | NEL | 0.0% | ||
| PPC 2.4 Remediation of contaminated sites and areas | E39, C33.20, M71.20 | € - | 0.0% | NEL | NEL | NEL | EL | NEL | NEL | NEL | NEL | EL | EL | NEL | NEL | NEL | 0.0% | ||
| BIO 1.1 Conservation, including restoration, of habitats, ecosystems and species | R91.04 | € - | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | NEL | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | ||
| Turnover of Taxonomy-eligible but not environmentally sustaina- ble (A.2) activities (not Taxonomy-aligned activities) | € 446,101,553 | 38.8% | 38.8% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 27.1% | ||||
| A. Turnover of Taxonomy-eligible activities (A.1 + A.2) | € 446,101,553 | 38.8% | 38.8% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 27.1% | ||||
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| Turnover of Taxonomy-non-eligible activities (B) | € 703,898,447 | 61.2% | |||||||||||||||||
| TOTAL (A + B) | € 1,150,000,000 | 100.0% |
| Economic activities (1) | Code (2) | CapEx (3) | Proportion of CapEx (4) | Climate change mitigation (5) | Climate change adaption (6) | Water (7) | Pollution (8) | Circular economy (9) | Bio- diversity (10) | Climate change mitigation (11) | Climate change adaption (12) | Water (13) | Pollution (14) | Circular econ- omy (15) | Biodiversity (16) | Minimum safeguards (17) | Proportion of Taxonomy- aligned (A.1) or -eligible (A.2) CapEx, year 2023 (18) | Category enabling activity (19) | Category transitional activity (20) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A. |
| Economic activities (1) | Code (2) | CapEx (3) | Proportion of CapEx (4) | Climate change mitigation (5) | Climate change adaption (6) | Water (7) | Pollution (8) | Circular economy (9) | Bio- diversity (10) | Climate change mitigation (11) | Climate change adaption (12) | Water (13) | Pollution (14) | Circular econ- omy (15) | Biodiversity (16) | Minimum safeguards (17) | Proportion of Taxonomy- aligned (A.1) or -eligible (A.2) CapEx, year 2023 (18) | Category enabling activity (19) | Category transitional activity (20) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| A.1 Environmental sustainable activities (Taxonomy-aligned) | |||||||||||||||||||
| CapEx of environmental sustainable activities (Taxonomy-aligned) (A.1) | € - | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | N | N | N | N | N | N | N | 0.0% | |||
| Of which enabling | € - | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | N | N | N | N | N | N | N | 0.0% | |||
| E | Of which transitional | € - | 0.0% | 0.0% | N | N | N | N | N | N | N | 0.0% | |||||||
| T | |||||||||||||||||||
| A.2 Taxonomy-eligible but not environmental sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||
| CCM 3.6 Manufacture of other low carbon technologies | C22 | € 6,959,311 | 20.9% | EL | NEL | NEL | NEL | NEL | NEL | 7.0% | |||||||||
| CCM 3.17 Manufacture of plastics in primary form | C20.16 | € 11,021,316 | 33.1% | EL | NEL | NEL | NEL | NEL | NEL | 21.8% | |||||||||
| CCM 4.1 Electricity generation using solar photovoltaic technology | D35.11, F42.22 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 4.11 Storage of thermal energy | - | € 717 | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.3% | |||||||||
| CCM 4.15 District heating/cooling distribution | D35.30 | € 25,470 | 0.1% | EL | NEL | NEL | NEL | NEL | NEL | 0.1% | |||||||||
| CCM 4.30 High-efficiency co-generation of heat/cool and power from fossil gaseous fuels | D35.11 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 5.3 Construction, extension and operation of waste water collection and treatment | E37.00 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 5.9 Material recovery from non-hazardous waste | E38.32 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 6.4 Operation of personal mobility devices, cycle logistics | N77.11 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 6.5 Transport by motorbikes, passenger cars and light commercial vehicles | N77.11 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 7.3 Installation, maintenance and repair of energy efficiency equipment | F42, F43, M71, C25, C33.12 | € 49,000 | 0.1% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) | F42, F43, M71, C25 | € 973,904 | 2.9% | EL | NEL | NEL | NEL | NEL | NEL | 0.5% | |||||||||
| CCM 7.5 Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings | F42, F43, M71, C25 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 8.1 Data processing, hosting and related activities | J63.11 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CE 1.2 Manufacture of electrical and electronic equipment | C26, C27 | € 1,801,161 | 5.4% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 2.4 Treatment of hazardous waste | E38.22, E38.32, F42.9 | € - | 0.0% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 3.2 Renovation of existing buildings | F41, F43 | € 1,221,775 | 3.7% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 3.3 Demolition and wrecking of buildings and other structures | F43.1 | € 548,354 | 1.6% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 4.1 Provision of IT/OT data-driven solutions | C26, C27, J58.29, J61, J62, J63.1 | € - | 0.0% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 5.1 Repair, refurbishment and remanufacturing | - | € - | 0.0% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 5.2 Sale of spare parts | G46, G47 | € - | 0.0% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 5.3 Preparation for re-use of end-of-life products and product components | - | € - | 0.0% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| PPC 2.4 Remediation of contaminated sites and areas | E39, C33.20, M71.20 | € - | 0.0% | NEL | NEL | NEL | EL | NEL | NEL | 0.0% | |||||||||
| BIO 1.1 Conservation, including restoration, of habitats, ecosystems and species | R91.04 | € - | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | 0.0% | |||||||||
| CapEx of Taxonomy-eligible but not environmentally sustainable (A.2) activities (not Taxonomy-aligned activities) (A.2) | € 22,601,009 | 67.8% | 57.1% | 0.0% | 0.0% | 0.0% | 10.7% | 0.0% | 29.7% | ||||||||||
| A. CapEx of Taxonomy-eligible activities (A.1 + A.2) | € 22,601,009 | 67.8% | 57.1% | 0.0% | 0.0% | 0.0% | 10.7% | 0.0% | 29.7% | ||||||||||
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| CapEx of Taxonomy-non-eligible activities (B) | € 10,729,256 | 32.2% | |||||||||||||||||
| TOTAL (A + B) | € 33,330,265 | 100.0% |
| Economic activities (1) | Code (2) | OpEx (3) | Proportion of OpEx (4) | Climate change mitigation (5) | Climate change adaption (6) | Water (7) | Pollution (8) | Circular economy (9) | Bio- diversity (10) | Climate change mitigation (11) | Climate change adaption (12) | Water (13) | Pollution (14) | Circular econ- omy (15) | Biodiversity (16) | Minimum safeguards (17) | Proportion of Taxonomy- aligned (A.1) or -eligible (A.2) OpEx, year 2023 (18) | Category enabling activity (19) | Category transitional activity (20) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| A.1 Environmental sustainable activities (Taxonomy-aligned) | |||||||||||||||||||
| OpEx of environmental sustainable activities (Taxonomy-aligned) (A.1) | € - | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | N | N | N | N | N | N | N | 0.0% | |||
| Of which enabling | € - | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | N | N | N | N | N | N | N | 0.0% | |||
| E | Of which transitional | € - | 0.0% | 0.0% | N | N | N | N | N | N | N | 0.0% | |||||||
| T | |||||||||||||||||||
| A.2 Taxonomy-eligible but not environmental sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||
| CCM 3.6 Manufacture of other low carbon technologies | C22 | € 1,393,400 | 1.1% | EL | NEL | NEL | NEL | NEL | NEL | 0.6% | |||||||||
| CCM 3.17 Manufacture of plastics in primary form | C20.16 | € 43,416,597 | 33.5% | EL | NEL | NEL | NEL | NEL | NEL | 25.6% | |||||||||
| CCM 4.1 Electricity generation using solar photovoltaic technology | D35.11, F42.22 | € 55,406 | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 4.11 Storage of thermal energy | - | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 4.15 District heating/cooling distribution | D35.30 | € 716,302 | 0.6% | EL | NEL | NEL | NEL | NEL | NEL | 0.7% | |||||||||
| CCM 4.30 High-efficiency co-generation of heat/cool and power from fossil gaseous fuels | D35.11 | € 2,950,406 | 2.3% | EL | NEL | NEL | NEL | NEL | NEL | 1.6% | |||||||||
| CCM 5.3 Construction, extension and operation of waste water collection and treatment | E37.00 | € 1,974,516 | 1.5% | EL | NEL | NEL | NEL | NEL | NEL | 0.7% | |||||||||
| CCM 5.9 Material recovery from | E38.32 |
Financial year 2023
| Economic activities (1) | Code (2) | OpEx (3) | Proportion of OpEx (4) | Climate change mitigation (5) | Climate change adaption (6) | Water (7) | Pollution (8) | Circular economy (9) | Bio- diversity (10) | Climate change mitigation (11) | Climate change adaption (12) | Water (13) | Pollution (14) | Circular econ- omy (15) | Biodiversity (16) | Minimum safeguards (17) | Proportion of Taxonomy- aligned (A.1) or -eligible (A.2) OpEx, year 2023 (18) | Category enabling activity (19) | Category transitional activity (20) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| A.1 Environmental sustainable activities (Taxonomy-aligned) | |||||||||||||||||||
| OpEx of environmental sustainable activities (Taxonomy-aligned) (A.1) | € - | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | N | N | N | N | N | 0.0% | |||
| Of which enabling | € - | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | N | N | N | N | N | 0.0% | |||
| Of which transitional | € - | 0.0% | N | N | N | N | N | 0.0% | |||||||||||
| A.2 Taxonomy-eligible but not environmental sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||
| CCM 3.6 Manufacture of other low carbon technologies | C22 | € 1,393,400 | 1.1% | EL | NEL | NEL | NEL | NEL | NEL | 0.6% | |||||||||
| CCM 3.17 Manufacture of plastics in primary form | C20.16 | € 43,416,597 | 33.5% | EL | NEL | NEL | NEL | NEL | NEL | 25.6% | |||||||||
| CCM 4.1 Electricity generation using solar photovoltaic technology | D35.11, F42.22 | € 55,406 | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 4.11 Storage of thermal energy | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | ||||||||||
| CCM 4.15 District heating/cooling distribution | D35.30 | € 716,302 | 0.6% | EL | NEL | NEL | NEL | NEL | NEL | 0.7% | |||||||||
| CCM 4.30 High-efficiency co-generation of heat/cool and power from fossil gaseous fuels | D35.11 | € 2,950,406 | 2.3% | EL | NEL | NEL | NEL | NEL | NEL | 1.6% | |||||||||
| CCM 5.3 Construction, extension and operation of waste water collection and treatment | E37.00 | € 1,974,516 | 1.5% | EL | NEL | NEL | NEL | NEL | NEL | 0.7% | |||||||||
| CCM 5.9 Material recovery from non-hazardous waste | E38.32 | € 36,707 | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.2% | |||||||||
| CCM 6.4 Operation of personal mobility devices, cycle logistics | N77.11 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 6.5 Transport by motorbikes, passenger cars and light commercial vehicles | N77.11 | € 2,073,600 | 1.6% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 7.3 Installation, maintenance and repair of energy efficiency equipment | F42, F43, M71, C25, C33.12 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) | F42, F43, M71, C25 | € 81,834 | 0.1% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 7.5 Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings | F42, F43, M71, C25 | € 101,000 | 0.1% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CCM 8.1 Data processing, hosting and related activities | J63.11 | € - | 0.0% | EL | NEL | NEL | NEL | NEL | NEL | 0.0% | |||||||||
| CE 1.2 Manufacture of electrical and electronic equip- ment | C26, C27 | € 7,361,909 | 5.7% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 2.4 Treatment of hazardous waste | E38.22, E38.32, F42.9 | € 456,165 | 0.4% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 3.2 Renovation of existing buildings | F41, F43 | € - | 0.0% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 3.3 Demolition and wrecking of buildings and other structures | F43.1 | € 379,470 | 0.3% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 4.1 Provision of IT/OT data-driven solutions | C26, C27, J58.29, J61, J62, J63.1 | € - | 0.0% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 5.1 Repair, refurbishment and remanufacturing | € - | 0.0% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | ||||||||||
| CE 5.2 Sale of spare parts | G46, G47 | € - | 0.0% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | |||||||||
| CE 5.3 Preparation for re-use of end-of-life products and product components | € - | 0.0% | NEL | NEL | NEL | NEL | EL | NEL | 0.0% | ||||||||||
| PPC 2.4 Remediation of contaminated sites and areas | E39, C33.20, M71.20 | € - | 0.0% | NEL | NEL | NEL | EL | EL | NEL | 0.0% | |||||||||
| BIO 1.1 Conservation, including restoration, of habitats, ecosystems and species | R91.04 | € 75 | 0.0% | NEL | NEL | NEL | NEL | NEL | EL | 0.0% | |||||||||
| OpEx of Taxonomy-eligible but not environmentally sustainable (A.2) activities (not Taxonomy-aligned activities) (A.2) | € 60,997,386 | 47.1% | 40.7% | 0.0% | 0.0% | 0.0% | 0.0% | 6.3% | 0.0% | 29.3% | |||||||||
| A. OpEx of Taxonomy-eligible activities (A.1 + A.2) | € 60,997,386 | 47.1% | 40.7% | 0.0% | 0.0% | 0.0% | 0.0% | 6.3% | 0.0% | 29.3% | |||||||||
| B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||||||||||||
| OpEx of Taxonomy-non-eligible activities (B) | € 68,578,418 | 52.9% | |||||||||||||||||
| TOTAL (A + B) | € 129,575,804 | 100.0% |
AGFA-GEVAERT ANNUAL REPORT 2023
| Row | ||
|---|---|---|
| Nuclear energy related activities | ||
| 1 | The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. | No |
| 2 | The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. | No |
| 3 | The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. | No |
| Fossil gas related activities | ||
| 4 | The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. | Yes |
| 5 | The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. | Yes |
| 6 | The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generationfacilities that produce heat/cool using fossil gaseous fuels. | Yes |
| Row | Economic activities | Amount and proportion for KPI Turnover | Amount and proportion for KPI CapEx | Amount and proportion for KPI OpEx |
|---|---|---|---|---|
| Amount | % | Amount | ||
| 1 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - | 0.0% | € - |
| 2 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - | 0.0% | € - |
| 3 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - | 0.0% | € - |
| 4 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - | 0.0% | € - |
| 5 | Amount and proportion of taxonomy-aligned |
| Row | Nuclear energy related activities |
|---|---|
| 1 | The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. |
| 2 | The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. |
| 3 | The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. |
| Row | Fossil gas related activities |
|---|---|
| 4 | The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. |
| 5 | The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. |
| 6 | The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. |
| Row | Economic activities | Amount and proportion for KPI Turnover | Amount and proportion for KPI CapEx | Amount and proportion for KPI OpEx |
|---|---|---|---|---|
| CCM + CCA | CCM + CCA | CCM + CCA | ||
| Climate change mitigation (CCM) | Climate change adaptation (CCA) | Climate change mitigation (CCM) | ||
| Amount % | Amount % | Amount % | ||
| 1 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 2 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 3 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 4 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 5 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 6 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 7 | Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 8 | Total applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| Row | Economic activities | Amount and proportion for KPI Turnover | Amount and proportion for KPI CapEx | Amount and proportion for KPI OpEx |
|---|---|---|---|---|
| CCM + CCA | CCM + CCA | CCM + CCA | ||
| Climate change mitigation (CCM) | Climate change adaptation (CCA) | Climate change mitigation (CCM) | ||
| Amount % | Amount % | Amount % | ||
| 1 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 2 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 3 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 4 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 5 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 6 | Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 7 | Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 8 | Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| Row | Economic activities | Amount and proportion for KPI Turnover | Amount and proportion for KPI CapEx | Amount and proportion for KPI OpEx |
|---|---|---|---|---|
| CCM + CCA | CCM + CCA | CCM + CCA | ||
| Climate change mitigation (CCM) | Climate change adaptation (CCA) | Climate change mitigation (CCM) | ||
| Amount % | Amount % | Amount % | ||
| 1 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 2 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 3 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 4 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 5 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € 2,950,406 2.3% |
| 6 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - 0.0% | € - 0.0% | € - 0.0% |
| 7 | Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI | € 446,101,553 38.8% | € 446,101,553 38.8% | € - 0.0% |
| ## ENVIRONMENTAL INFORMATION | ||||
| ### Taxonomy-eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI |
| Row | Economic activities | Amount and proportion for KPI Turnover | Amount and proportion for KPI CapEx | Amount and proportion for KPI OpEx | |||
|---|---|---|---|---|---|---|---|
| Amount | % | Amount | % | Amount | % | ||
| 1 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - | 0.0% | € - | 0.0% | € - | 0.0% |
| 2 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - | 0.0% | € - | 0.0% | € - | 0.0% |
| 3 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - | 0.0% | € - | 0.0% | € - | 0.0% |
| 4 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - | 0.0% | € - | 0.0% | € - | 0.0% |
| 5 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - | 0.0% | € - | 0.0% | € 2,950,406 | 2.3% |
| 6 | Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI | € - | 0.0% | € - | 0.0% | € - | 0.0% |
| 7 | Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI | € 446,101,553 | 38.8% | € 446,101,553 | 38.8% | € - | 0.0% |
| € 22,601,009 | 67.8% | € 22,601,009 | 67.8% | € - | 0.0% | ||
| € 58,046,980 | 44.8% | € 58,046,980 | 44.8% | € - | 0.0% | ||
| 8 | Total amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI | € 446,101,553 | 38.8% | € 446,101,553 | 38.8% | € - | 0.0% |
| € 22,601,009 | 67.8% | € 22,601,009 | 67.8% | € - | 0.0% | ||
| € 60,997,386 | 47.1% | € 60,997,386 | 47.1% | € - | 0.0% |
| KPI Turnover | KPI CapEx | KPI OpEx | |||
|---|---|---|---|---|---|
| Amount | % | Amount | % | Amount | % |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € 703,898,447 | 100.0% | € 10,729,256 | 100.0% | € 68,578,418 | 100.0% |
| € 703,898,447 | 100.0% | € 10,729,256 | 100.0% | € 68,578,418 | 100.0% |
| KPI Turnover | KPI CapEx | KPI OpEx | |||
|---|---|---|---|---|---|
| Amount | % | Amount | % | Amount | % |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| € - | 0.0% | € - | 0.0% | € - | 0.0% |
| --- | --- | --- | --- | --- | --- |
| Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI | € 703,898,447 | 100.0% | € 10,729,256 | 100.0% | € 68,578,418 |
We believe that a thriving society is one based on a thriving natural ecosystem. Sustainability is a journey that will span over decades, yet climate change requires immediate action. As a manufacturing company, Agfa acknowledges that its operations have a significant impact on the environment. Therefore, to contribute to counter-balancing this global challenge, Agfa fully supports the need for urgent climate action and the objectives set by the Paris Agreement. To contribute to this global call for action, Agfa is strongly committed to continuously improving the balance between environmental impact and economic performance in its own operations. Equally importantly, the Group is committed to marketing sustainable products and solutions that enable Agfa customers to contribute to the same objectives. New Agfa products are thus designed, developed and manufactured so that production, storage, transport, use, but also end-of-life waste management, have minimal impact on the environment based on the Group’s ‘Progress in sustainability’ principle. Agfa also makes sure to serve markets that are key for the net-zero transition, such as the clean energy market, and strives to promote digital solutions that offer a more efficient use of resources and produce less waste than analog equivalents. Moreover, Agfa also focuses on delivering innovative products and solutions that enable its customers to reduce their own energy consumption.
With a vision to gradually become a net-zero organization, in October 2023, Agfa committed to set near-term science-based targets with the Science Based Targets initiative (SBTi). In the meantime, Agfa has set its ambition on the reduction of combined scope 1 + 2 greenhouse gases (GHG) absolute emissions at 62% by 2030 from a 2006 base year for Belgian sites. This has been defined considering the revised ‘Fit for 55’ package that falls under the umbrella of the EU Green Deal, following the climate targets set in the Paris Agreement. This ‘Fit for 55’ package recently increased the overall ambition of emissions reductions by 2030 to 62% compared to 2005 levels in the sectors covered by the European Union Emissions Trading System (EU ETS), to which Agfa sites in Mortsel are subject. In absence of 2005 details on scope 2, Agfa considered 2006 levels as baseline. Agfa Belgium being the main emitter for the Group’s GHG emissions, the Agfa Belgium Carbon Reduction Plan can be considered as the main driver for the Agfa global reduction plan. The defined target for Agfa Belgium translates into a 20% reduction by 2030 from a 2019 base year for the whole Agfa Group.
Climate action is and will remain one of the main points of attention in Agfa’s future plans, both in terms of reducing its operational impact and delivering increasingly better solutions to the market. Agfa believes in the achievement of the set objectives, thanks to the continuous improvement of processes and a reinvestment plan in energy production in Belgium, approved by the Executive Management Team. The installation, in 2024 and 2025, of new assets such as an industrial heat pump, a mechanical vapor compression and an electrical boiler, will allow Agfa to be efficient and flexible in its energy mix management to reduce CO2 emissions while balancing costs. Further GHG reducing measures continue to be explored to identify new opportunities to intensify Agfa climate action and progress towards science-based targets.
In 2023, this entailed consolidating the efforts to reduce Agfa’s operational footprint (both in terms of energy use and CO2 emissions), increase materials circularity and reduce waste generation. Agfa’s Corporate Sustainability Management Policy and Safety, Health & Environment Policy are the main references driving these processes. While Agfa is nowhere near the end of the journey, some improvements are already visible in many of these areas. Beneath is a summary of the main achievements of 2023, showing the continuous commitment to the highest operational standards.
Training and awareness-raising around sustainability topics are key to driving behavioral change and supporting innovation. Therefore, the Make a Switch! campaign continued in 2023, using visuals and online training to provide some tips to save energy in the workplace (and at home) and foster small behavioral changes that can yield significant energy savings. In addition to office space adjustments, the ‘Make a Switch’ campaign was continued, raising awareness and sharing tips on how all employees can contribute to Agfa’s energy and emission goals. Standby electricity consumption was one of the topics of the 2023 campaign, encouraging everyone to turn off all equipment completely before leaving the office, instead of leaving it on standby. The Energy Management Team in Mortsel distributed smart power plugs to make this ‘switch’ easier.
To achieve its ambitious greenhouse gas emissions reduction objectives, Agfa focuses on energy savings and on utilizing energy more efficiently. Next to working on the energy efficiency of its production processes, Agfa in 2023 optimized office space occupation, by bringing together colleagues on a reduced floor space.
In 2023, Agfa continued to look at its impact beyond operations and put a lot of effort into the electrification of the Agfa car fleet, both for the vehicles used for on-site staff commuting and for employee company cars. The program evolves year on year, strongly backed-up by a mobility plan launched in 2022, enabling Agfa employees to lease a bike and extend the range of company cars to Electric Vehicles (EVs) and Plug-in Hybrid Electric Vehicles (PHEVs).
To support the shift in how employees commute to work, Agfa is collaborating with an external partner to offer its employees in Belgium a bicycle lease program.
“Cycling to work is healthy. I arrive at work with a fresh mind, ready for a productive day. And when I return home in the evening, I have cycled away my work worries. Thanks to the bike lease, I ride a high quality and well-maintained bike, and on top of that, it’s fiscally attractive.”
Veronika Pot, Corporate Communications
As Agfa wants to fully commit to a greener fleet, cars with CO2 emissions higher than 120 g/km (WLTP standard) have been excluded from this range. This has been welcomed by the employees: in 2023, in Belgium, EVs and PHEVs already represented 44% of Agfa’s plant’s fleet. This mobility plan has been coupled with necessary infrastructure adaptation. In 2023, 99 extra charging points were installed in Agfa Belgium car parks, in addition to the 32 already installed in 2022. In 2023, the mobility plan has been extended to Denmark and will continue to be extended to other countries in the years to come. Overall, it represents a great addition to the measures to stimulate carpooling (already implemented for some years), such as fiscal benefits, the possibility for carpoolers to park closer to the factory entrance, etc.
In addition to the provisions from the Belgian Energy Policy Agreement (EBO: energiebeleidsovereenkomst), Agfa sites in Belgium comply with the caps set by the European Union Emissions Trading System (EU ETS). The EBO sets applicability criteria defining thresholds for primary energy use. On this basis, an annual report of GHG emissions data is prepared annually for the Flemish government, which also runs an energy audit at Agfa every four years to assess the potential for projects to increase energy efficiency and actual progress.# SUSTAINABILITY STATEMENTS
Our indicators
1. Total energy consumption (TJ/year)
2. Energy consumption of primary energy (TJ/year)
3. Energy consumption of secondary energy (TJ/year)
4. Specific energy consumption (GJ/ton of product)
Total energy consumption (primary and secondary together) continued to decrease by 6.6% in 2023 compared to 2022 (-36.2% when excluding ex-Agfa Offset Solutions scope from 2023 figures). This decrease is the result of ongoing analysis, monitoring and optimization of energy efficiency and is mostly driven by a reduction in the use of natural gas and electricity. Specific energy consumption however increased by 16.7% to 21.5 GJ per ton of produced product (86.3% to 34.3 GJ per ton of produced product when excluding ex-Agfa Offset Solutions scope from 2023 figures). This can be attributed to changes in production frequency, as start-up/stop phases of production campaigns contribute to a proportionally higher share of energy usage. While a direct comparison between 2022 and 2023 may not be appropriate due to the significant change in the characteristics of the produced portfolio following the carve-out of ex-Agfa Offset activities, in the coming years, we will strive to reduce specific consumption. The consumption level of both primary and secondary energy decreased in 2023, respectively by 6.6% and 6.7% (-24.7% and -68.7% when excluding ex-Agfa Offset Solutions scope from 2023 figures), showing the positive impact of the improvement measures taken in 2023 as Agfa continued to invest in reducing our energy consumption and improving its use efficiency.
· Figures including ex-Agfa Offset Solutions activities:
| Energy consumption (TJ/year) | Specific consumption (GJ/ton of product) | Primary energy (TJ/year) | Secondary energy (TJ/year) | Year |
|---|---|---|---|---|
| 962 | 15.4 | 2,405 | 3,367 | 2014 |
| 930 | 15.9 | 2,111 | 3,040 | 2015 |
| 835 | 16.3 | 1,977 | 2,753 | 2016 |
| 869 | 16.4 | 1,884 | 2,733 | 2017 |
| 804 | 16.3 | 1,929 | 2,733 | 2018 |
| 661 | 16.0 | 1,743 | 2,404 | 2019 |
| 558 | 18.1 | 1,575 | 2,133 | 2020 |
| 526 | 17.1 | 1,561 | 2,012 | 2021 |
| 491 | 18.4 | 1,487 | 1,879 | 2022 |
| 564 | 21.5 | 1,389 | 2,124 | 2023 |
· Figures excluding ex-Agfa Offset Solutions activities in 2023:
| Energy consumption (TJ/year) | Specific consumption (GJ/ton of product) | Primary energy (TJ/year) | Secondary energy (TJ/year) | Year |
|---|---|---|---|---|
| 962 | 15.4 | 2,405 | 3,367 | 2014 |
| 930 | 15.9 | 2,111 | 3,040 | 2015 |
| 835 | 16.3 | 1,977 | 2,753 | 2016 |
| 869 | 16.4 | 1,884 | 2,733 | 2017 |
| 804 | 16.3 | 1,929 | 2,733 | 2018 |
| 661 | 16.0 | 1,743 | 2,404 | 2019 |
| 558 | 18.1 | 1,575 | 2,133 | 2020 |
| 526 | 17.1 | 1,561 | 2,012 | 2021 |
| 164 | 34.5 | 1,119 | 1,284 | 2023 |
| 564 | 21.5 | 1,389 | 2,124 | 2022 |
Our indicators
1. Total CO₂ emissions to air (ktons/year)
2. Direct CO₂ emissions (Scope 1) to air (ktons/year)
3. Indirect CO₂ emissions (Scope 2) to air (ktons/year)
4. Specific CO₂ emissions to air (ktons/product)
In 2023, both the direct (Scope 1) and indirect (Scope 2) amounts of CO₂ emissions decreased, by 7.5% and 7.6% respectively, compared to 2022 (-24.1% and -70.2% when excluding ex-Agfa Offset Solutions scope from 2023 figures). This represents an overall decrease of 7.5% of all CO₂ emissions associated with the operations of the whole Agfa Group, Scopes 1 & 2 combined (-40.6% when excluding ex-Agfa Offset Solutions scope from 2023 figures). This positive trend has been present for several years and adds up to a substantial decrease of Agfa’s total absolute greenhouse gas emissions (-41% over the last ten years). While Agfa is glad that the absolute impact of its CO₂ emissions reflects its commitment to continuous improvement of its processes, specific CO₂ emissions (Scope 1 and 2 together) remained higher than in past years. It is important to note though that a direct comparison between specific metrics in 2022 and in 2023 may not be suitable due to the significant change in the characteristics of the produced portfolio following the carve-out of ex-Agfa Offset Solutions activities. Looking ahead, Agfa’s focus will be on decoupling emissions from production, aiming to reduce specific emissions in the coming years.
· Figures including ex-Agfa Offset Solutions activities:
| CO₂ Scope 1 (ktons/year) | CO₂ Scope 2 (ktons/year) | Specific CO₂ emissions (Scope 1 & 2) to air kg/ton of product | Year |
|---|---|---|---|
| 91.4 | 111.7 | 930 | 2014 |
| 91.5 | 111.5 | 1,065 | 2015 |
| 78.6 | 104.7 | 1,060 | 2016 |
| 79.4 | 102.8 | 1,085 | 2017 |
| 80.1 | 104.6 | 1,101 | 2018 |
| 99.0 | 63.8 | 1,084 | 2019 |
| 53.7 | 90.9 | 1,224 | 2020 |
| 49.6 | 88.1 | 1,109 | 2021 |
| 45.9 | 83.0 | 1,181 | 2022 |
| 42.4 | 76.8 | 1,365 | 2023 |
· Figures excluding ex-Agfa Offset Solutions activities in 2023:
| CO₂ Scope 1 (ktons/year) | CO₂ Scope 2 (ktons/year) | Specific CO₂ emissions (Scope 1 & 2) to air kg/ton of product | Year |
|---|---|---|---|
| 91.4 | 111.7 | 930 | 2014 |
| 91.5 | 111.5 | 1,065 | 2015 |
| 78.6 | 104.7 | 1,060 | 2016 |
| 79.4 | 102.8 | 1,085 | 2017 |
| 80.1 | 104.6 | 1,101 | 2018 |
| 99.0 | 63.8 | 1,084 | 2019 |
| 53.7 | 90.9 | 1,224 | 2020 |
| 49.6 | 88.1 | 1,109 | 2021 |
| 45.9 | 83.0 | 1,181 | 2022 |
| 13.7 | 63.0 | 2,049 | 2023 |
The safe and responsible management of resources is part of Agfa’s overall strategy of continuously improving its environmental performance and reducing its impacts. On this basis, Agfa continues to make efforts to further reduce and optimize the use of installations containing ozone-depleting substances and to increase its solvent recovery rate through improved business practices and plant modifications, e.g. the automation of solvent balance tracking. Air emissions going beyond GHGs are normally managed together. These are pollutants with adverse effects on climate, ecosystems and air quality. For these, Agfa commits to closely monitor its emissions to air and comply with local regulations and emission limits that may apply in some countries for specific compounds. Processes are set up to comply with ISO 14001 guidelines at a minimum.
Our indicators
1. Emissions of ozone-depleting substances (tons CO₂ equivalent/year)
2. NOx, SO₂, VOC, VIC emissions (tons/year)
3. VOC emissions (tons/year)
4. Specific VOC emissions (kg/ton of product)
In 2023, the emission of ozone-depleting substances has once again drastically decreased, thanks to the efforts to further reduce and optimize the use of installations with these substances.
| Ozone-depleting substances (CO₂ tons equivalent/year) | Year |
|---|---|
| 1,508.5 | 2019 |
| 700.2 | 2020 |
| 731.0 | 2021 |
| 306.4 | 2022 |
| 3,008.1 | 2023 |
Beyond optimizing in-house processes, and as part of its extensive greenhouse gas emission reduction plan, Agfa is making sure the use of residual energy is being optimized. Since 2021, residual heat from Agfa’s production processes in Mortsel, Belgium, is delivered to ‘Warmte Verzilverd’, a Flemish heat-net. The heat-net provides for the central heating and sanitary needs of a growing neighbourhood nearby. The project is funded with direct citizen participation and financially supported by the Flemish government.
Flemish heat-net thanks to Agfa’s residual heat
Agfa-Gevaert heat source -> Heat transfer station -> House A, House B, Apartment complex A
Heated water <- Residual heat -> Cooled water
Air emissions excluding CO₂ decreased by 14.3% in 2023 (by 28.8% when excluding ex-Agfa Offset Solutions scope from 2023 figures). This decline is predominantly attributed to the further reduction of NOx emissions associated with natural gas consumption. As a result of continuous efforts and optimization of processes, the VOC emissions trend is in continuous decrease and absolute emissions decreased by 14.4% in 2023 (by 36.4% when excluding ex-Agfa Offset Solutions scope from 2023 figures). In parallel, specific VOC emissions maintained a low level of 0.35 kg per ton produced. When excluding ex-Agfa Offset Solutions scope from 2023 figures, specific VOC emissions to air reaches 0.60 kg per ton produced. As for the other specific metrics of this report, caution is advised in directly comparing 2022 and 2023 due to the significant change in the characteristics of the produced portfolio following the carve-out of ex-Agfa Offset Solutions activities.
· Figures including ex-Agfa Offset Solutions activities:
NOx, SO₂, VOC, VIC emissions to air
| Year | NOX | SO₂ | VOC | VIC | TOTAL (tons/year) |
|---|---|---|---|---|---|
| 2014 | 140.4 | 5.1 | 129.3 | 2.0 | 276.8 |
| 2015 | 137.5 | 1.5 | 121.8 | 1.9 | 262.7 |
| 2016 | 120.3 | 1.5 | 106.1 | 3.5 | 231.4 |
| 2017 | 99.4 | 0.8 | 112.7 | 2.0 | 214.9 |
| 2018 | 99.0 | 1.5 | 88.8 | 2.8 | 192.0 |
| 2019 | 119.0 | 2.7 | 71.9 | 2.8 | 196.3 |
| 2020 | 86.8 | 1.1 | 43.4 | 2.4 | 133.7 |
| 2021 | 93.1 | 1.5 | 38.2 | 2.4 | 135.2 |
| 2022 | 87.9 | 0.9 | 35.4 | 1.7 | 126.0 |
| 2023 | 74.3 | 1.1 | 30.3 | 2.3 | 108.0 |
VOC emissions to air
| VOC (tons/year) | Specific VOC emisions to air (kg/ton of product) | Year |
|---|---|---|
| 129.3 | 0.59 | 2014 |
| 121.8 | 0.64 | 2015 |
| 106.1 | 0.61 | 2016 |
| 112.7 | 0.67 | 2017 |
| 88.8 | 0.53 | 2018 |
| 71.9 | 0.48 | 2019 |
| 43.4 | 0.37 | 2020 |
| 38.2 | 0.31 | 2021 |
| 35.4 | 0.32 | 2022 |
| 30.3 | 0.35 | 2023 |
· Figures excluding ex-Agfa Offset Solutions activities in 2023:
NOx, SO₂, VOC, VIC emissions to air
| Year | NOX | SO₂ | VOC | VIC | TOTAL (tons/year) |
|---|---|---|---|---|---|
| 2014 | 140.4 | 5.1 | 129.3 | 2.0 | 276.8 |
| 2015 | 137.5 | 1.5 | 121.8 | 1.9 | 262.7 |
| 2016 | 120.3 | 1.5 | 106.1 | 3.5 | 231.4 |
| 2017 | 99.4 | 0.8 | 112.7 | 2.0 | 214.9 |
| 2018 | 99.0 | 1.5 | 88.8 | 2.8 | 192.0 |
| 2019 | 119.0 | 2.7 | 71.9 | 2.8 | 196.3 |
| 2020 | 86.8 | 1.1 | 43.4 | 2.4 | 133.7 |
| 2021 | 93.1 | 1.5 | 38.2 | 2.4 | 135.2 |
| 2022 | 87.9 | 0.9 | 35.4 | 1.7 | 126.0 |
| 2023 | 66.6 | 0.5 | 22.5 | 0.1 | 89.7 |
VOC emissions to air
| VOC (tons/year) | Specific VOC emisions to air (kg/ton of product) | Year |
|---|---|---|
| 129.3 | 0.59 | 2014 |
| 121.8 | 0.64 | 2015 |
| 106.1 | 0.61 | 2016 |
| 112.7 | 0.67 | 2017 |
| 88.8 | 0.53 | 2018 |
| 71.9 | 0.48 | 2019 |
| 43.4 | 0.37 | 2020 |
| 38.2 | 0.31 | 2021 |
| 35.4 | 0.32 | 2022 |
| 22.5 | 0.60 | 2023 |
Water is a scarce resource, and access to fresh water is essential for human life, recognized as a basic human right by the United Nations. Simultaneously, climate change is leading to longer periods of drought interspersed with heavy rainfall. The challenge of capturing and retaining rainwater makes us vulnerable to water scarcity. This is why Agfa is fully committed to minimizing its water-related impacts and prioritizing actions in areas that are part of water-stressed regions. The Group strives to minimize water usage, reduce water discharge, and decrease pollutant loads as much as possible. Processes are established to comply with legislation and applicable load limits.
Agfa's Belgian sites collectively contribute significantly to the overall water consumption of the Group, primarily driven by process and cooling water, the two most relevant use categories in operations. Beneath are some examples of initiatives ongoing there to improve water management:
Until 2021, Agfa utilized a biological water purification system for wastewater treatment at its head office site in Mortsel, Belgium. This system was designed to facilitate the reuse of effluent as washing or cooling water, contributing significantly to water conservation. However, the volume of water reuse decreased in 2020 and 2021, correlating with reduced production volumes and a consequent decrease in water sent for treatment. Since 2022, the biological water purification system has not been in operation. Some of its equipment, e.g. pumps, was repurposed to expedite the Per- and PolyFluoroAlkyl Substances (PFAS) removal and avoidance program. Reactivating the biological water purification system would require a substantial investment. Additionally, more stringent environmental legislation imposes challenges on certain water reuse practices due to rigorous standards. Therefore, currently, Agfa is in the process of evaluating the relevance of reinstating the biological water purification system. This assessment considers ecological benefits and explores whether it might be more environmentally advantageous to address the root cause by investing in technologies and strategies to prevent the excessive use of water in both manufacturing and Research & Development processes.
| Year | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|---|---|---|---|
| % | 19.3% | 20.3% | 21.5% | 27.4% | 23.3% | 19.5% | 0.0% | 15.8% | 0.0% | 11.5% |
Our indicators
Total water consumption decreased by 17.6% in 2023 (by 80.0% when excluding ex-Agfa Offset Solutions scope from 2023 figures). The trend of reducing absolute amounts of water used, excluding cooling, also decreased by 1.0% in 2023 compared to 2022 (by 51.7% when excluding the ex-Agfa Offset Solutions scope from 2023 figures). Cooling water remains an important source of water consumption, and efforts to reduce its use will continue to be a focus point. While overall performance leaves room for further improvement, especially in optimizing the amounts of water used for cooling, our continued efforts to optimize production processes have allowed us to maintain specific process water consumption at the same level, reaching 3.85 m³ per ton of product produced. The overall specific water consumption increased by 3.0% compared to 2022, and by 23.7% when excluding cooling water. Although a direct comparison between 2022 and 2023, excluding the ex-Agfa Offset Solutions scope from 2023 specific metrics, is not ideal due to the significant change in the characteristics of the produced portfolio following the carve-out of ex-Agfa Offset Solutions activities, the overall specific water consumption shows a decrease of 41.7%. It now amounts to 19.4 m³ per ton of product produced. Specific water use, excluding cooling, increased by 41.1%, reaching 15.8 m³ per ton of product produced.
| Water consumption | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total consumption (1,000 m³/year) | 5,503 | 5,610 | 5,295 | 4,996 | 5,148 | 4,705 | 2,603 | 2,974 | 3,631 | 1,223 |
| Specific consumption (m³/ton of product) | 25.2 | 29.4 | 30.6 | 29.8 | 30.7 | 31.3 | 25.2 | 25.6 | 33.3 | 11.2 |
| Excl. cooling water (1,000 m³/year) | 2,603 | 2,384 | 2,163 | 2,015 | 1,946 | 1,591 | 1,285 | 1,227 | 1,223 | 726 |
| Specific excl. cooling water (m³/ton of product) | 11.9 | 12.5 | 12.5 | 12.0 | 11.6 | 10.6 | 10.9 | 9.9 | 11.2 | 13.8 |
| Water consumption | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total consumption (1,000 m³/year) | 5,503 | 5,610 | 5,295 | 4,996 | 5,148 | 4,705 | 2,603 | 2,974 | 3,631 | 591 |
| Specific consumption (m³/ton of product) | 25.2 | 29.4 | 30.6 | 29.8 | 30.7 | 31.3 | 25.2 | 25.6 | 33.3 | 19.4 |
| Excl. cooling water (1,000 m³/year) | 2,603 | 2,384 | 2,163 | 2,015 | 1,946 | 1,591 | 1,285 | 1,227 | 1,223 | 1,210 |
| Specific excl. cooling water (m³/ton of product) | 11.9 | 12.5 | 12.5 | 12.0 | 11.6 | 10.6 | 10.9 | 9.9 | 11.2 | 15.8 |
Wastewater volumes
The total volume of wastewater increased by 5.2% in 2023, with a corresponding 31.5% increase in specific wastewater volume, resulting in 12.98 m³ per ton of product produced. Excluding the ex-Agfa Offset Solutions activities from the 2023 figures, the total wastewater volume decreased by 34.6%. Although a direct comparison between 2022 and 2023 specific metrics may not be suitable due to the significant change in production characteristics, the specific wastewater volume increased by 90.8%, reaching 18.83 m³ per ton of product produced. Despite the discontinuation of the on-site biological water purification system for wastewater at the Agfa head office site in Mortsel, Belgium, other water purification systems remain operational and continue to yield positive results. Trends have been moving in the right direction for several consecutive years. Wastewater pollution load decreased by 37.8% in 2023 (by 74.6% when excluding the ex-Agfa Offset Solutions scope from the 2023 figures). The specific water pollution load also decreased by 22.2% in 2023, resulting in a low value of 1.4 kg per ton of product produced, confirming the optimization of the water treatment process. Excluding the ex-Agfa Offset Solutions activities from the 2023 figures, although a direct comparison of specific metrics may not be appropriate due to the significant change in the produced portfolio between 2022 and 2023, there is a decrease of 27.8%, corresponding to a low value of 1.3 kg per ton of product produced. The residual Chemical Oxygen Demand (COD) value further decreased in 2023 by 31.4% to 103.1 tons per year (38.9 tons per year, equivalent to a 74.1% decrease, when excluding ex-Agfa Offset Solutions scope from 2023 figures), which is again the lowest value ever. The decrease is mainly attributable to an additional treatment with activated carbon of the waste water in Agfa Mortsel and Westerlo (Heultje) sites in Belgium. The other values maintain its low figure. Agfa is proud to see that the performance trends and specific results achieved reflect its efforts and commitment with regards to efficient water management. This is a point of continuous attention for Agfa and several optimization measures are put in place every year.# SUSTAINABILITY STATEMENTS
Figures including ex-Agfa Offset Solutions activities:
| Year | Total amount of waste water (m³/year) | Specific volumes (m³/ton of product) | Total waste water load (tons/year) | Specific waste water load (kg/ton of product) | Specific waste water load excl. Alu (kg/ton of product) |
|---|---|---|---|---|---|
| 2014 | 2,537,258 | 11.62 | 601.4 | 2.8 | 2.8 |
| 2015 | 2,298,754 | 12.06 | 703.9 | 3.7 | 2.6 |
| 2016 | 1,939,076 | 11.22 | 459.5 | 2.5 | 2.1 |
| 2017 | 1,810,981 | 10.79 | 461.2 | 2.5 | 1.7 |
| 2018 | 1,700,664 | 11.22 | 511.7 | 2.7 | 2.5 |
| 2019 | 1,342,577 | 10.14 | 372.1 | 2.7 | 1.8 |
| 2020 | 1,077,783 | 8.94 | 251.7 | 2.1 | 1.4 |
| 2021 | 1,077,207 | 8.80 | 207.3 | 1.7 | 1.3 |
| 2022 | 1,133,509 | 9.12 | 195.2 | 1.5 | 1.3 |
| 2023 | 1,092,343 | 9.87 | 121.4 | 1.0 | 1.0 |
Wastewater load (tons/year)
| Year | COD | N | P | AOX | Heavy metals exl. Al | Aluminum | Total waste water load (tons/year) |
|---|---|---|---|---|---|---|---|
| 2014 | 491.3 | 17.9 | 56.4 | 0.4 | 0.3 | 34.9 | 601.4 |
| 2015 | 462.9 | 15.7 | 54.2 | 0.3 | 0.4 | 170.4 | 703.9 |
| 2016 | 322.7 | 9.5 | 38.1 | 0.3 | 0.4 | 88.5 | 459.5 |
| 2017 | 373.4 | 9.5 | 37.3 | 0.3 | 0.2 | 40.5 | 461.2 |
| 2018 | 347.4 | 12.1 | 34.4 | 0.3 | 0.3 | 117.2 | 511.7 |
| 2019 | 255.4 | 10.7 | 34.4 | 0.2 | 0.2 | 71.2 | 372.1 |
| 2020 | 177.8 | 10.0 | 10.9 | 0.1 | 0.1 | 52.8 | 251.7 |
| 2021 | 155.1 | 9.8 | 1.6 | 0.2 | 0.1 | 40.5 | 207.3 |
| 2022 | 150.3 | 10.5 | 1.0 | 0.1 | 0.1 | 33.2 | 195.2 |
| 2023 | 103.1 | 10.9 | 0.7 | 0.0 | 0.1 | 6.6 | 121.4 |
Figures excluding ex-Agfa Offset Solutions activities in 2023:
| Year | Total amount of waste water (m³/year) | Specific volumes (m³/ton of product) | Total waste water load (tons/year) | Specific waste water load (kg/ton of product) | Specific waste water load excl. Alu (kg/ton of product) |
|---|---|---|---|---|---|
| 2014 | 2,537,258 | 11.62 | 601.4 | 2.8 | 2.8 |
| 2015 | 2,298,754 | 12.06 | 703.9 | 3.7 | 2.6 |
| 2016 | 1,939,076 | 11.22 | 459.5 | 2.5 | 2.1 |
| 2017 | 1,810,981 | 10.79 | 461.2 | 2.5 | 1.7 |
| 2018 | 1,700,664 | 11.22 | 511.7 | 2.7 | 2.5 |
| 2019 | 1,342,577 | 10.14 | 372.1 | 2.7 | 1.8 |
| 2020 | 1,077,783 | 8.94 | 251.7 | 2.1 | 1.4 |
| 2021 | 1,077,207 | 8.80 | 207.3 | 1.7 | 1.3 |
| 2022 | 704,226 | 9.12 | 195.2 | 1.3 | 1.3 |
| 2023 | 1,092,343 | 9.87 | 49.6 | 0.5 | 0.5 |
Wastewater load (tons/year)
| Year | COD | N | P | AOX | Heavy metals exl. Al | Aluminum | Total waste water load (tons/year) |
|---|---|---|---|---|---|---|---|
| 2014 | 491.3 | 17.9 | 56.4 | 0.4 | 0.3 | 34.9 | 601.4 |
| 2015 | 462.9 | 15.7 | 54.2 | 0.3 | 0.4 | 170.4 | 703.9 |
| 2016 | 322.7 | 9.5 | 38.1 | 0.3 | 0.4 | 88.5 | 459.5 |
| 2017 | 373.4 | 9.5 | 37.3 | 0.3 | 0.2 | 40.5 | 461.2 |
| 2018 | 347.4 | 12.1 | 34.4 | 0.3 | 0.3 | 117.2 | 511.7 |
| 2019 | 255.4 | 10.7 | 34.4 | 0.2 | 0.2 | 71.2 | 372.1 |
| 2020 | 177.8 | 10.0 | 10.9 | 0.1 | 0.1 | 52.8 | 251.7 |
| 2021 | 155.1 | 9.8 | 1.6 | 0.2 | 0.1 | 40.5 | 207.3 |
| 2022 | 150.3 | 10.5 | 1.0 | 0.1 | 0.1 | 33.2 | 195.2 |
| 2023 | 38.9 | 10.0 | 0.6 | 0.0 | 0.1 | 0.0 | 49.6 |
Agfa strongly believes that the Circular Economy (CE) will play an increasingly significant role in the future as a key process design tool for achieving sustainable business practices. A crucial step in realizing a CE involves reducing the use of raw materials, particularly non-renewable resources. Agfa is dedicated to improving its performance in three main areas:
Since 2021, Agfa has assessed the possibility of establishing global quantitative targets for specific Key Performance Indicators (KPIs) that have been defined thus far. While the Group deemed it premature to set these targets, a more focused exchange with our stakeholders has helped identify priority areas for action, including PET, packaging, and exploring the potential of incorporating more bio-based materials.
Although beyond the scope of this chapter, Agfa remains committed to delivering innovative products and solutions that empower our customers to enhance their own circularity and reduce their own waste. Agfa strives to extend the life cycle of its products by providing spare parts and maintaining a worldwide service organization. This commitment will undoubtedly remain a high priority on the Group’s agenda for the years to come. In addition, delivering innovative products and solutions that enable our customers to increase their own circularity is also one of our focuses, although this falls out of the scope of this chapter.
Plastic
Building on over 150 years of expertise, Agfa stands as a leading company in the manufacturing of polyester-based films enriched with coatings for specific applications. Therefore, plastic is a significant resource for Agfa. The challenge and urgency for action related to plastic is heightened because, in many cases, existing infrastructure is not able to provide adequate collection and treatment for the materials placed on the market. This is why Agfa is committed to addressing this challenge in two ways: contributing to the development of new technologies and partnerships for transforming waste into value, and participating in the creation of a market for secondary raw materials by incorporating recycled content into its product portfolio.
Polyester waste from the film production process and used polyester coming back from our customers are recycled in the form of shreds and reused in Agfa’s production process. Agfa has recently invested in a new twin-screw extruder technology at the manufacturing site in Mortsel, Belgium which enable the Group to increase the amount of reused PolyEthylene Terephthalate (PET) up to 1,250 tons per year, while maintaining a high-quality end product. Agfa film consists of 60% new PET material and 40% recycled PET. In the SYNAPS synthetic paper production, waste and post-consumer trimmings are also recycled to rPET (recycled polyester), constituting more than 15 percent of all newly made SYNAPS.
Agfa regularly participates in multi-year projects to contribute to turning plastic into value. In 2023, for example, the PET2VALUE project focused on upcycling PET for use in high value applications through supply chain collaboration between Agfa-Gevaert NV, Centexbel, Luxilon, Tenco and BCF, UGent and the VUB. For instance, PET waste from Agfa's in-house film processing is upcycled by partners into material for producing tennis racket strings and 3D printed bike parts with mechanical properties comparable to virgin polymers.
Since 2018, Agfa has supported the Operation Clean Sweep® (OCS) initiative, aiming to implement good housekeeping and pellet containment practices to work towards achieving zero pellet loss in the environment. For Agfa this results mainly in specific actions aiming to controlling the spread of PET dust. For instance, lighting in the waste collection room has been optimized, chips from cutting lines are now transported in closed instead of open containers and packaging is reinforced to prevent breakage in transport pipes and sleeves. In addition, Agfa has worked with the SGS company to carry out an inventory of potential emission points to define where stricter measuring is needed. In light of this action plan, Agfa has set up prevention and awareness raising programs among employees by including relevant information in our regular information tours and planning observation rounds on this topic, as well as writing articles for the internal blog and hanging posters and banners around the plant. Employees are also instructed to report any finding to a dedicated team.
Renewable raw materials
The use of renewable feedstock instead of fossil-based raw materials is on the radar of Agfa Research & Development efforts. The likelihood of using such materials depends on the possibility of maintaining the same technical performance and ensuring the economic viability of the final products. In certain applications, especially within the healthcare sector, achieving this may be challenging due to stringent quality assurance levels. Additionally, limitations arise as the substitution of materials by renewables must be considered throughout the entire product life cycle to prevent negative outcomes in later stages. An illustrative example of Agfa’s action in renewable raw materials research is the Tune2Bio project, a government funded project (VLAIO) that seeks to develop the knowledge and expertise needed to tune the biodegradability of (bio)polyesters for more sustainable plastic applications. With the support of Centexbel and KU Leuven, Agfa, together with Oleon, Sioen and Bio4plastics, are working on film-based products and processes to reach proof of concept for new and more sustainable products.
Silver and phosphor
As part of its Radiology Solutions business, Agfa produces Computed Radiography phosphor imaging plates and silver-based light sensitive films for imaging products that serve for many applications. Silver halide technology is key in X-ray technology, used for medical application and for testing materials for their safety in a non-destructive way e.g., pipelines, cars, airplanes, etc. Thanks to its low contact resistance and high electrical and thermal conductivity, silver is also used in complex Printed Circuit Boards (PCBs) that control all electronic devices. Silver and phosphor are therefore essential materials to Agfa business and efforts are made to recuperate and recycle it as much as possible. Measures to reduce production losses vary between technological improvements and the education of operators, whenever necessary.
It’s easy, it’s fun and it makes a difference. In the run up to World Environment Day in June, Agfa’s Sustainability Manager Justine Ciret brought together a team of enthusiast colleagues to join the #rivercleanupchallenge and clean up the area around Agfa’s head office in Mortsel. More teams in Belgium and Canada quickly joined the challenge and cleaned up their local areas and parks. What is the River Cleanup challenge? Every year, 11 billion kilograms of plastic pollution ends up in the ocean. A big part of this pollution flows into the sea via rivers.# ENVIRONMENTAL INFORMATION
River Cleanup is a global network organization that is working on stopping plastic waste from entering our oceans by cleaning rivers and communities. The River Cleanup Challenge invites everyone to join the movement and spend 10 minutes of their time on picking up trash in their local area. Agfa teams joined the River Cleanup challenge.
At Agfa, the continuous increase of the circularity of materials wherever possible represents a challenge due to the various types of materials used in our manufacturing processes over the world, as well as certain materials that remain in the products that we place on the market. It can be difficult therefore to recycle within the existing infrastructure and further minimize production waste without a broader change to the business model.
Processes for designing out waste and related pollution are set up to comply with ISO 14001 guidelines as a minimum. They begin with a thorough mapping of waste sources and careful process design, followed by iterative production process fine-tuning. All our Belgian sites, for example, thoroughly monitor waste production throughout the year under the responsibility of the Plant Waste Manager who prepares a detailed report on an annual basis identifying sources of waste per material and per production line. This report is made available to all production managers and is used as the basis to define the priority waste streams for reduction for the following year.
When waste streams occur, Agfa first investigates whether it can prevent the waste generation - if not, Agfa moves on to considering the potential for internal reuse, which would avoid transport, or sell it to third parties. Incineration for energy recovery and then landfilling are considered as final options. In this process, Agfa usually separates material recycling from energy recovery.
External audits are conducted in accordance with ISO 14001 requirements for certified sites. Waste management audits may also be conducted within the context of the assessment of the environmental management system as a whole, according to local reference standards. In partnership with different waste processors, possible optimizations of waste routing are investigated. The waste Agfa provides is continuously sampled and monitored by waste processors to identify viable ways to recover materials or energy.
Beyond new technical implementations and efforts to reduce waste generation at operations level, Agfa expects all employees and stakeholders to act in an environmentally conscious manner. This implies a continuous process of raising awareness, adjusting and improving waste separation. To this extent, each plant sets up different activities to inform and provide guidelines around waste reduction, not only at work, but also in everyday life outside the company.
Our indicators:
In 2023, the total volume of generated waste decreased by 16.7% while the specific waste volume increased by 4.1% (or -64.5% and +3.8% respectively when excluding ex-Agfa Offset Solutions activities from the 2023 data scope). Upon analyzing the waste sources to identify possible corrective actions for the rising specific waste volume, it has been determined that waste is mostly generated during the start-up and stop phases of production. Unfortunately, within the context of fluctuating market demands, these cycles are difficult to avoid and no feasible corrective actions could be implemented to counter the negative impact on specific waste. This reduction of (specific) waste volumes will remain a point of attention in the coming years.
Hazardous waste represents 18% of the total produced waste (38% when excluding ex-Agfa Offset Solutions activities from 2023 figures). Agfa is committed to optimizing processes and collaborating with waste processors to improve the ratio between non-hazardous and hazardous waste.
Regarding the destination of generated waste, Agfa successfully maintained a high level in 2023 of waste that could be beneficially reused instead of going to landfill (92.9% including ex-Agfa Offset activities, 85.6% excluding it). While the fraction of waste that ultimately remains ‘waste’ and is directed to landfills remains very small in proportion to the total volume of waste (1.0% including ex-Agfa Offset activities, 2.3% excluding it), it increased in 2023 due to a multi-year plan for Belgian plants to remove asbestos-containing materials from roofs.
These results reflect our continuous commitment to design out waste from our processes. Our commitment translates into a constant high level of awareness and continuous implementation of small improvements within production to improve processes efficiency.
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Waste volumes | ||||||||||
| Total (tons/year) | 39,361 | 38,106 | 32,713 | 32,041 | 32,232 | 28,164 | 24,714 | 26,478 | 23,759 | 19,780 |
| Specific waste volumes (kg/ton of product) | 180.2 | 199.9 | 226.5 | 189.2 | 187.6 | 191.0 | 192.1 | 209.2 | 213.2 | 217.6 |
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Landfill | 4,214 | 3,586 | 3,462 | 2,669 | 2,910 | 362 | 295 | 163 | 206 | 190 |
| Incineration | 327 | 227 | 127 | 782 | 527 | 328 | 277 | 212 | 171 | 174 |
| Recycling | 30,879 | 29,939 | 24,603 | 24,398 | 24,293 | 22,815 | 20,231 | 22,045 | 19,317 | 16,033 |
| Energy recovery | 1,173 | 1,438 | 1,188 | 1,057 | 1,336 | 1,583 | 1,387 | 1,662 | 1,708 | 1,033 |
| Physico-chemical treatment | 187 | 119 | 192 | 262 | 146 | 180 | 71 | 122 | 56 | 107 |
| Valorization | 2,581 | 2,796 | 3,141 | 2,874 | 3,020 | 2,895 | 2,453 | 2,275 | 2,301 | 2,244 |
| Total (tons/year) | 39,361 | 38,106 | 32,713 | 32,041 | 32,232 | 28,164 | 24,714 | 26,478 | 23,759 | 19,780 |
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Non-hazardous | 76% | 75% | 86% | 86% | 85% | 76% | 74% | 78% | 81% | 82% |
| Hazardous | 24% | 25% | 14% | 14% | 15% | 24% | 26% | 22% | 19% | 18% |
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Waste directed to disposal (%) | 14.5% | 12.8% | 14.6% | 14.1% | 14.8% | 8.1% | 7.9% | 7.7% | 8.8% | 7.1% |
| Waste diverted to disposal (%) | 85.5% | 86.2% | 85.4% | 85.9% | 85.2% | 91.9% | 92.1% | 92.3% | 91.2% | 92.9% |
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Beneficial use of waste (%) | 88.5% | 90.0% | 89.0% | 89.2% | 89.3% | 97.6% | 97.7% | 98.6% | 98.4% | 98.2% |
| Proportion waste in landfill (%) | 10.7% | 9.4% | 10.6% | 8.3% | 9.0% | 1.3% | 1.2% | 0.6% | 0.9% | 1.0% |
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Waste volumes | ||||||||||
| Total (tons/year) | 39,361 | 38,106 | 32,713 | 32,041 | 32,232 | 28,164 | 24,714 | 26,478 | 23,759 | 8,442 |
| Specific waste volumes (kg/ton of product) | 180.2 | 199.9 | 225.8 | 189.2 | 187.6 | 191.0 | 192.1 | 209.2 | 213.2 | 217.6 |
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Landfill | 4,214 | 3,586 | 3,462 | 2,669 | 2,910 | 362 | 295 | 163 | 206 | 190 |
| Incineration | 327 | 227 | 127 | 782 | 527 | 328 | 277 | 212 | 171 | 0 |
| Recycling | 30,879 | 29,939 | 24,603 | 24,398 | 24,293 | 22,815 | 20,231 | 22,045 | 19,317 | 4,878 |
| Energy recovery | 1,173 | 1,438 | 1,188 | 1,057 | 1,336 | 1,583 | 1,387 | 1,662 | 1,708 | 1,024 |
| Physico-chemical treatment | 187 | 119 | 192 | 262 | 146 | 180 | 71 | 122 | 56 | 107 |
| Valorization | 2,581 | 2,796 | 3,141 | 2,874 | 3,020 | 2,895 | 2,453 | 2,275 | 2,301 | 2,244 |
| Total (tons/year) | 39,361 | 38,106 | 32,713 | 32,041 | 32,232 | 28,164 | 24,714 | 26,478 | 23,759 | 8,442 |
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Non-hazardous | 76% | 75% | 86% | 86% | 85% | 76% | 74% | 78% | 81% | 62% |
| Hazardous | 24% | 25% | 14% | 14% | 15% | 24% | 26% | 22% | 19% | 38% |
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Waste directed to disposal (%) | 14.5% | 12.8% | 14.6% | 14.1% | 14.8% | 8.1% | 7.9% | 7.7% | 8.8% | 14.4% |
| Waste diverted to disposal (%) | 85.5% | 86.2% | 85.4% | 85.9% | 85.2% | 91.9% | 92.1% | 92.3% | 91.2% | 85.6% |
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Beneficial use of waste (%) | 88.5% | 90.0% | 89.0% | 89.2% | 89.3% | 97.6% | 97.7% | 98.6% | 98.4% | 97.7% |
| Proportion waste in landfill (%) | 10.7% | 9.4% | 10.6% | 8.3% | 9.0% | 1.3% | 1.2% | 0.6% | 0.9% | 2.3% |
To ensure and support the translation of its vision and values into clear day-to-day processes, Agfa relies on a series of policies, procedures and corporate guidelines, both at global and local level. The Corporate Governance Charter, including the Code of Conduct, sets out minimum requirements in terms of ethics, non-discrimination and respect for human rights. A basic principle is to ensure that every person is treated with respect. Since 2003, Agfa’s Board of Directors has also included in the CoC a policy of equal employment opportunities to commit that any employee is selected, hired, assigned, trained, transferred, promoted, laid off and compensated on the basis of ability, qualifications and performance without discrimination because of race, color, religion, political belief, sex, age or national origin. Furthermore, the Group’s policy does not permit discrimination against any qualified employee or applicant for employment because of physical or mental handicap or status as disabled. This Charter is fully endorsed by Agfa’s management and, together with the social partners, management is fully committed to actively supporting it.# Sustainability Statements
Compliance is required for all employees; independently, Agfa also expects that all of its subcontractors and other internal and external stakeholders respect the rights and individuality of all people. To support the non-discrimination principle in all its forms and for all phases of life at Agfa, actively address all kinds of discrimination and proactively educate management and employees to enable them to deal with challenges related to Diversity, Equity & Inclusion (DEI), a DEI policy has been developed and implemented at Agfa. An employee’s career can be divided into different phases: recruitment and introduction, career evolution and end-of-career. Competence management, performance management, continuous training and development opportunities, fair and competitive remuneration and constructive feedback are essential elements in each of these phases. Agfa’s Human Resources (HR) policies foresee a number of processes linked to the employee life cycle. To ensure the highest standards, Agfa has different policies in place at each site that include contractors and subcontractors wherever relevant. The focus of these different policies is defined at local level, both based on the specific local and national legal requirements, and on the type of operations carried out at each plant. Agfa’s local policies are made available to all employees in their local language(s) and local training programs are in place. The remuneration policy in place for Agfa’s Board of Directors and Executive Management Team (EMT) is described in the Group’s Corporate Governance Charter; criteria are set by the Nomination and Remuneration Committee and approved by the Board of Directors. The goal of the policy is to ensure that qualified and expert professionals can be recruited, retained and motivated, taking into account the nature and scope of their individual responsibilities. With regards to the general Agfa workforce, Agfa has a Global Compensation Policy in place which ensures that salaries are in line with the market, are fair and are defined across different geographies in a consistent manner. Activities around Health & Safety management are built on the basis of Agfa’s Corporate Safety, Health & Environment (SH&E) policy. Full compliance with such standards begins with ‘soft’ measures to ensure a high level of safety awareness from the first moment anyone steps foot on the Group’s premises, e.g. user-friendly guidelines that are easy for everyone to follow. Agfa then has strict protocols and control mechanisms in place to ensure the prevention of workplace accidents and work-related injuries, as well as proper care in those cases where they do occur. Depending on the specific operations at each Agfa plant, the Group also ensures adequate monitoring and prevention of potential workers’ and visitors’ exposure to chemicals.
AGFA-GEVAERT ANNUAL REPORT 2023
In 2022, Agfa’s Corporate Safety, Health & Environment (SH&E) policy; HR Recruitment policy; Global Learning & Development policy; Compensation & Job Evaluation policy, have all been consolidated under the overarching Agfa Sustainability Management Policy, applicable to all of Agfa’s employees.
Agfa attributes its success to its people and envisions its future based on the competencies, passion, creativity and commitment of all of its teams. People are the driving force behind everything Agfa does, making it crucial to foster a safe, inspiring and inclusive work environment with equal opportunities for thriving and growth. Since 2020, the focus has been on establishing a comprehensive corporate approach to frame and coordinate projects, resources and targets across different geographies and departments, translating them into tangible actions. Agfa firmly believes that this cannot be achieved without the involvement and commitment of the entire Agfa community. To ensure an appropriate level of engagement and dialogue with its approximately 5,000+ employees, Agfa makes use of different internal platforms, tools and processes, providing a variable level of interaction - some at local level and some at corporate level. These include intranet & newsletter publications, individual performance reviews, an Employee Engagement survey, a whistleblower channel, etc.
In 2023, Agfa maintained its focus on key areas such as improving the work environment and culture, Diversity, Equity & Inclusion (DEI), learning & development, and Health & Safety. Various occasions were created to directly engage with Agfa employees during this period. In 2023, the traditional ‘Infotours’ for managers were replaced with quarterly ‘Agfa Connect’ sessions reaching the entire Agfa community simultaneously. These sessions aim to go beyond presenting Group results, incorporating business updates on strategy, safety, key projects, major achievements, and more. The agenda includes dedicated Q&A sessions, fostering a two-way communication channel. This not only provides employees with the opportunity to engage directly with the Executive Management Team but also allows the Group’s leaders to gain a deeper understanding of concerns, enabling them to consider these insights for a more informed approach in their day-to-day actions.
Moreover, in each country where it operates, Agfa enters into dialogue with employee representatives. In most countries, works councils represent employees, and at the European level, a European Works Council is in place. For Health & Safety matters, local committees consisting of employee and employer representatives are also active.
Following Agfa’s transformation journey, in 2023, the Executive Management Team also actively collaborated with a representative group of Agfa leaders, and dedicated time to redefine the Group’s common purpose, ambitions, and company values essential for realizing its strategic objectives. The four values — ‘Own it,’ ‘Play as one,’ ‘Move forward,’ and ‘Drive value’— are accompanied by a set of behaviors serving as a guiding framework for everyone at Agfa in all their activities. Additionally, these values and behaviors are underpinned by a set of leadership expectations, aiming to facilitate the right level and quality of engagement between Agfa leaders and their teams. The values set applies to all Agfa employees. They are not just drivers for individual behavior but also for shaping the overall organizational structure. As such, they will be embedded in the key company processes, including recruitment, performance management, learning & development, recognition, and more.
| Own it | Play as one | Move forward | Drive value |
|---|---|---|---|
AGFA-GEVAERT ANNUAL REPORT 2023
This year, a significant portion of Agfa’s efforts was once again focused on better understanding the Group’s employees’ expectations. In 2023, Agfa conducted the second company-wide annual engagement survey as a tool to monitor the company’s culture and well-being. With a good 62% participation rate among the company’s staff, and over 10,000 individual comments received, it was a noteworthy achievement. The Agfa engagement score increased from 57% to 60% in just one year, which was a good result considering the industry’s downward trend and the significant decrease in unfavorable scores. The survey offers an opportunity to celebrate what Agfa is doing particularly well, as well as to identify opportunities to make things better. There were some very positive messages in the results, such as the fact that staff know what they need to do to carry out their work properly and successfully, and can see how their work contributes to Agfa’s overall success. Also worth celebrating is that people, in general, feel they can be their authentic self when coming to work at Agfa. However, people also expressed that they have not seen enough positive changes as a result of the previous engagement survey and therefore there will be work to be done to listen to concerns and improve. Agfa is therefore taking a deeper dive into the engagement survey results to implement a two-pronged approach of overall company-level actions, paired with grass-roots actions within teams to create more visible results to help increase engagement and confidence across the company. Also of note was that engagement varied to quite an important extent depending on site, country, age, grade, and other demographic markers. This is also something that Agfa will be looking at in closer detail to maximize the impact of remedial actions.
Agfa’s employees often express the need to be more involved in decision-making and priority setting. In 2023, Agfa once more called upon employees to join its Employee Resource Groups (ERG) as part of its Diversity, Equity & Inclusion (DEI) strategy. This led to the appointment of three ERG leads and 30 participating employees. These ERGs are a key part of what Agfa does and how it operates and help in the further development of a corporate culture of Diversity, Equity & Inclusion, covering different areas:
Each group has a very diverse representation of Agfa’s divisions, geographies and functions, which surely enhances and improves the scope and impact of Agfa’s DEI actions. Each ERG gets an active Executive Management Team sponsor to share ideas, views and perspectives of people who may be particularly vulnerable to impacts and/or marginalized. The goal is to capture the energy and ideas of passionate voluntary members to raise even more awareness internally.
“In the EMBRACE group, we firmly believe that our individual differences enhance our perspectives and contribute to the overall richness of our company. Our goal is to foster a fully inclusive workplace where everyone is acknowledged without biases and receives full respect for their unique identities. In 2023, we have been focusing on identifying the topics and areas for improvement regarding inclusion, diversity and ethnicity, to then establish concrete targets. We are working on a Diversity & Inclusion Global policy, but also very practically on overcoming the language barrier at our Mortsel site, by for example translating the restaurant menu and biweekly newsletter.”
Mario Villanueva Moreno, ERG Lead EMBRACE
“Following the announcement of Agfa’s global DEI initiative, the EGO team has created a marketing campaign to promote awareness of our current standards and the values of DEI. This campaign intends to increase understanding of our current position while actively promoting diversity, equity, and inclusion as standard practices within Agfa.”
LaTonya Phillips, ERG Lead Equal Gender Opportunity (EGO)
Throughout the year, direct engagement with the Agfa workforce also occurred during informal events such as New Year’s drinks and local events. In Belgium, more than 250 people directly interacted with Pascal Juéry, CEO, during breakfast and lunch sessions, providing an opportunity to discuss company strategy and updates.
“Today at Agfa, we warmly welcome many new faces while also bidding farewell to retiring colleagues. Our ERG acknowledges the unique challenges posed by this transition but is committed to transforming the dynamics of different generations working together into opportunities that enhance Agfa’s appeal as a workplace for all. In 2023, our efforts were particularly concentrated on understanding the organizational landscape and creating awareness on the diverse perspectives. A notable highlight was the keynote presentation on “Different Generations Working Together”. Having laid the groundwork, our focus now pivots towards integration, aiming to bridge the generational gap and foster an even stronger, more cohesive Agfa team.”
Tobias Haegens, ERG Lead Generations Working Together (GWT)
In addition to strictly applying the Group’s Code of Conduct, which foresees whistleblowing arrangements, to individual behaviors and company processes, Agfa has established a psychosocial risk management system that supports employees who wish to raise concerns or report issues related to any form of abuse, harassment, inappropriate sexual behavior, discrimination, etc. The process, made available to employees on the Group’s intranet, is designed as follows:
In 2023, training sessions and local sources of information were provided to employees to prevent such situations from occurring. Additionally, a psychosocial risk analysis for Agfa was conducted by an external service provider, surveying a representative sample of the Agfa workforce in Belgium to gather insights on well-being indicators, including motivation, stress, work/life balance and instances of inappropriate sexual behavior, bullying, aggression and discrimination. This is repeated every five years and the results are used to define and implement priority actions tailored to each department and employee status.
Agfa considers respect for human rights as a moral imperative integral to its business license to operate. The sectors and geographies of Agfa’s operations and the high-skilled profiles required to perform them prevent the Group from a high risk of trafficking in human beings, forced or compulsory labor and child labor. While these aspects may not be explicitly mentioned in the Agfa CoC, Agfa remains fully committed to compliance with all binding legal provisions applying to its market segments in the countries where it operates.
Consistent with previous years, in 2023, the follow-up of the employee database by Agfa’s Human Resources department warranted that there were no Agfa employees who can be associated as child laborers either by being too young to work or being involved in hazardous activities that may compromise their physical, mental, social or educational development. No cases of human rights incidents were identified, and there were no associated fines, penalties, or compensation for damages related to such incidents.
Agfa’s commitment extends to upholding the general principles outlined in the International Bill of Human Rights, the UN Guiding Principles on Business and Human Rights and the Declaration of the International Labor Organization on Fundamental Principles and Rights at Work. In this spirit, Agfa respects the right of its employees to organize themselves through trade unions and other organizations that represent the rights of employees in their relationship with Agfa as an employer. Agfa also expects its suppliers to follow the same standards and adhere to the same high-level commitment it sets for itself.
Agfa enters into dialogue with employee representatives in each country where it operates. In most of these countries, employees are represented by Works Councils. At European level, a European Works Council is also in place, led by a member of Agfa’s Executive Committee. The Council is composed of representatives from the different business divisions and union representatives from different countries and divisions. It meets at least twice a year to receive updates regarding the progress of different corporate activities, as well as information regarding the different business divisions. Depending on national legislative requirements, there are also collective bargaining agreements, agreed with trade unions, in place for some categories of workers. All existing collective agreements are made available to all employees via the relevant internal sharing platforms, e.g. the intranet, or upon request to HR.
Employing people is a long-term strategic investment and global organizations continue to experience competition in recruiting and retaining staff. Agfa considers market-conforming contractual conditions and remuneration packages as key tools to attract the best talents on the market. Agfa assesses a global compensation positioning by comparing the salary packages of its employees to the salaries applicable per job and per country (region) in the general market with Korn Ferry/Hay Group as benchmark for the market reference salary. This positioning allows the Group to:
The salary package of an employee is expressed in Total Target Cash (TTC) and equals the sum of the annual base salary, the annual on target variable salary and other fixed arrangements existing in some countries. Salary increases are reviewed annually during the Agfa Global Merit Review process. The remuneration policy is built on the principle that Agfa is committed to Pay-for-Performance and, on this basis, the individual employee’s remuneration is based on the following parameters:
In addition to salary, Agfa strives to offer benefits to its employees. By benefits, it understands all parts of the individual packages intended for long term and risk coverage. It is the purpose of Agfa to compare its policy to the midpoint of the general market. Related to this positioning, it will offer competitive but cost-effective benefits, considering long term perspectives and tax efficiency. The most important items are a pension plan, life insurance, disability and medical coverage. Depending on local rules and customs, which can vary significantly, benefits could also include a company car or additional representation costs.
Agfa is committed to paying a living wage to all its internal employees operating worldwide, aiming to have 100% of them earning above the minimum wage at any given point in time.In 2023, a review process driven by Agfa’s head office and complemented by an ad hoc check by the country’s social secretariat overseeing payroll was conducted to ensure compliance with local minimum wage requirements. The approach involved comparing the lowest salary per country with (if applicable) minimal living wage requirements set by the country’s official authority. In 2023, Agfa salaries were observed to be 8% to 894% higher than the local minimal wage. Consequently, Agfa confidently asserts that, regardless of the methodology used, it exceeds the minimal living wage requirements. Since 100% of Agfa’s internal employees are paid above the living wage benchmark, no follow-up action was initiated after that review. This review will be repeated annually. The table below gives an overview of the ratio average salary by management level between genders over the past years. Agfa relies on strict legislative requirements to evaluate its management approach. The Belgian government requires that a gender wage report is submitted to the national workers’ council every two years. This ensures that data on this aspect are regularly reviewed by an external party. These figures should be interpreted with caution as they do not include the number of years of experience in a particular position, the country of employment or the seniority.
Average of TTC FH (euro)
| Management Level | 2019 Female | 2019 Male | 2020 Female | 2020 Male | 2021 Female | 2021 Male | 2022 Female | 2022 Male | 2023 Female | 2023 Male |
|---|---|---|---|---|---|---|---|---|---|---|
| Employee | 89% | 104% | 88% | 104% | 88% | 104% | 87% | 104% | 85% | 104% |
| Manager | 93% | 102% | 93% | 102% | 93% | 102% | 95% | 102% | 95% | 102% |
| Middle Manager | 94% | 101% | 96% | 101% | 97% | 101% | 95% | 101% | 101% | 100% |
| Executive Manager (Level 2) | 97% | 100% | 106% | 99% | 106% | 99% | 107% | 99% | 108% | 99% |
| Executive Manager (Level 1 and 0) | 70% | 104% | 73% | 105% | 72% | 104% | 118% | 98% | 109% | 98% |
| Total | 87% | 104% | 87% | 104% | 87% | 104% | 88% | 104% | 91% | 103% |
Diversity, Equity & Inclusion (DEI) at work means employing a workforce that reflects the society in which it exists and operates. For Agfa, diversity means all the characteristics that make individuals unique, such as gender, race, ethnicity, age, ways of thinking, education, etc. Inclusion refers to the culture and work environment set up that makes everyone feel welcome and where diversity is an element of strength. At Agfa, employees representing 75 nationalities with different backgrounds, personalities and visions work together every day. Agfa is active in more than 100 countries and has its own production centers, R&D centers and sales organizations in more than 30 countries. This diversity enriches the organization as it is the engine of Agfa’s performance, innovation and overall culture. Agfa strives to be a place where diversity of both people and thought is valued everywhere – a place where all employees are all able to be themselves and feel a sense of belonging. This will strengthen Agfa’s performance by bringing it even closer to its people’s needs, and the needs of its customers. Agfa acknowledges that there is currently room for improvement within the organization, which is why it decided to focus on DEI as one of the main priorities for action within the sustainability roadmap for 2023 and the years to come.
| Region | Total Headcount | Number of employees | Percentage | Headcount | Number of permanent employees | Percentage | Headcount | Number of temporary employees | Percentage | Total Headcount | Percentage |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Europe | 3,465 | 3,465 | 69% | 3,438 | 3,438 | 68.4% | 27 | 27 | 0.5% | 5,026 | 100% |
| North America | 807 | 807 | 16% | 806 | 806 | 16.0% | 1 | 1 | 0.0% | ||
| Asia / Oceania / Africa | 577 | 577 | 11% | 573 | 573 | 11.4% | 4 | 4 | 0.1% | ||
| Latin America | 177 | 177 | 4% | 177 | 177 | 3.5% | 0 | 0 | 0.0% |
Since Agfa is committed to diversity and inclusion in its broadest sense, i.e. in terms of culture, ethnicity, socio-economic status, age, gender etc., related activities are not dealt within a silo, but are embedded in the different organizational processes described in this chapter. In addition to the behavior expected from employees, Agfa continues to hold its leaders accountable for promoting and bringing to life its commitment to creating a diverse and inclusive workplace where everyone has a sense of belonging and can be their best and most authentic selves. The role of Talent Acquisition and HR practitioners is integral to the development of such processes to close barriers to inclusion. Agfa’s Talent Acquisition and HR professionals therefore play an important role in attracting, retaining and supporting highly skilled, diverse candidates to meet and exceed organizational goals. Agfa’s focus for 2023 was on the way it recruits and develops people, on exploring ways to foster a more inclusive envi- ronment and on making sure its policies and processes always promote equal opportunity. While Agfa continues to raise awareness by rolling out its DEI toolkit and trainings (focusing on awareness and skills development, unconscious bias, leader and manager capabilities, etc.) on a company-wide basis, it also responded to the need to develop a broader, more articulated DEI strategy and plan. The development of a DEI strategy requires strong sponsorship from Agfa’s senior leaders, but the Group also wants to involve, engage, and empower all of its employees to be part of the solution. For that reason, a Global Diversity, Equity & Inclusion Council was launched in 2022 to create the global workforce necessary for Agfa’s business success. The Global DEI Council will drive and ensure that Agfa’s purpose and strategic priorities are thoroughly embedded into DEI tactics and tie these to broader organizational goals and KPIs. The Global DEI Council is the accountable body to communicate the value of inclusion, both internally and externally. Through its global and cross-func- tional composition, the Global DEI Council focuses on gaining a deeper understanding of how the regional business conditions affect and guide the work of Diversity, Equity & Inclusion. As a result, Agfa has a platform for shaping and sharing best practices globally to influence inclusionary actions and behaviors for all Agfa colleagues. The Global DEI Council also helps to identify and break down outdated norms and barriers for DEI success. This Global Council is strongly connected to the set-up and deployment of the previously mentioned Employee Resource Groups (ERGs). In order to make the DEI strategy actionable in a broad field, gender diversity and equity emerged as a primary workstream, guided by Agfa’s defined quantitative targets and a concrete action plan. For Agfa, this entails recruiting from a gender-balanced pool of candidates for every vacancy, keeping the benefits of the already achieved results by increasing retention and improving employee satisfac- tion, while also fostering diversity within decision-making roles. Although Agfa initially started with a straightforward approach to gradually increase the percentage of women as share of all new hires in permanent positions and high management positions year on year, in 2023, the Group refined its approach to integrate a combination of three elements in its annual goal setting:
Agfa believes this enables its target, which is to have female recruitment intake reach +5% of the women market representation in all specific areas of recruitment where Agfa is active, to better reflect the current and future market reality in the Group’s core segments and support its long-term gender parity ambition. Independently, in line with legal obligations, as mandated by the Belgian law of July 28, 2011, Agfa also ensures that the minimum legal requirement that at least one third of the members of the Board of Directors (BoD) be of the under-represented gender is consistently met, also in 2023. This require- ment will remain a key consideration during any changes or extensions in the BoD’s composition. More information regarding diversity for the BoD can be found in the Corporate Governance Statement. In 2023, Agfa continued to use the series of activities in place to reach its targets, fully aware that quantitative results would only be visible over time due to the nature of the topic. Dialogue with the global DEI Council and the Equal Gender Opportunity ERG helps to map the progress (to be) made and influence decisions that will go towards achieving Agfa’s gender representation ambitions. These activities are organized around five pillars:
ATTRACT: Focused on ensuring that Agfa’s hiring policies are adapted and that vacancies get adequate visibility to a broad set of candidates by using non-stereotyped wording, as well as diverse promotional material and platforms for publication. Ensuring that Agfa’s career webpage portrays diverse testimonials of its current employees.
SPONSOR: Focused on engaging at local level to develop future talents, reinforcing or creating specific actions around women’s mentoring, e.g. working with schools and supporting STEM (Science, Technology, Engineering and Mathematics) initiatives.
| Number of employees | Number of full-time equivalents | ||
|---|---|---|---|
| Male | 3,871 | 3,726 | 77.0% |
| Female | 1,155 | 1,093 | 23.0% |
| Total | 5,026 | 4,819 | 100.0% |
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Female | |||||
| Employee | 25% | 24% | 24% | 23% | 23% |
| Manager | 22% | 22% | 23% | 23% | 25% |
| Middle Manager | 15% | 16% | 17% | 18% | 20% |
| Executive Manager (Level 2) | 9% | 10% | 10% | 12% | 13% |
| Executive Manager (Level 1 and 0) | 12% | 15% | 13% | 11% | 18% |
| Male | |||||
| Employee | 75% | 76% | 76% | 77% | 77% |
| Manager | 78% | 78% | 77% | 77% | 75% |
| Middle Manager | 85% | 84% | 83% | 82% | 80% |
| Executive Manager (Level 2) | 91% | 90% | 90% | 88% | 87% |
| Executive Manager (Level 1 and 0) | 88% | 85% | 87% | 89% | 82% |
| Total | 100% | 100% | 100% | 100% | 100% |
| Male | Female | Total | |
|---|---|---|---|
| Headcount | Full-time equivalent | Headcount | |
| Number of employees | 3,871 | 3,726 | 1,155 |
| Number of permanent employees | 3,852 | 3,708 | 1,142 |
| Number of temporary employees | 19 | 18 | 13 |
At the end of 2023, the overall representation of women in the entire Agfa Group amounted to 23%. Various talent acquisition initiatives throughout the year contributed to reach 32.2% female intake in recruitment, resulting in a yearly alignment to market representation exceeded by 5% in three out of six specific areas of recruitment where Agfa was actively recruiting candidates. While this fell below the intended target, the achievement was unfortunately consistent with the challenges faced by Agfa in 2023. The Group indeed remained challenged by a combination of circumstances, some of which are shared across the entire market. For instance, the burden of unpaid care and domestic work, which continues to fall disproportionately on women, decreased the global number of women available on the labor market for job positions in manufacturing and service departments that involve shifts and extensive travel time – particularly challenging when speed of hire is a crucial requirement.
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Female | 34.3% | 33.5% | 30.9% | 32.8% | 32.2% |
| Male | 65.7% | 66.5% | 69.1% | 67.2% | 67.8% |
| <=20 | 21-30 | 31-40 | 41-50 | 51-60 | 61-70 | 70+ | |
|---|---|---|---|---|---|---|---|
| 2019 | 6.85% | 36.34% | 29.88% | 16.98% | 8.50% | 1.10% | 0.32% |
| 2020 | 2.92% | 33.27% | 32.68% | 18.48% | 11.28% | 1.36% | 0.00% |
| 2021 | 3.33% | 36.49% | 30.18% | 16.84% | 10.53% | 2.11% | 0.53% |
| 2022 | 1.71% | 28.14% | 28.57% | 22.60% | 15.99% | 2.99% | 0.00% |
| 2023 | 3.58% | 28.66% | 27.76% | 22.39% | 15.52% | 2.09% | 0.00% |
Continuous learning and development (L&D) are essential for both individual and organizational growth. At Agfa, fostering a learning mindset is a priority, with a robust commitment to the development of its people. This commitment aligns with Agfa’s priority Sustainable Development Goal 4, ‘Quality Education’. Different roles require different skills and Agfa wants to equip its workforce with flexible skill sets which promote success in a dynamic and complex environment. The question is not only about what roles employees can be prepared for now, but also how Agfa can shift thinking so that employees are ready and able to succeed in whatever roles emerge in the future. With this in mind, Agfa continuously seeks the right balance between attracting competencies from outside the company, developing internal competencies and knowledge transfer, encouraging successful career transitions and mobility, etc. Today, many employees will make more career moves than was traditionally the case. A job-fit employee is therefore necessary in order to remain professionally employable. To this end, Agfa is strongly committed to supporting its workforce in this. Learning & Development is the natural lever to increase the employability of employees. All employees must therefore be able to further develop their unique capabilities, acquire new and advanced skills or knowledge and receive adequate constructive feedback and guidance about their performance and career development. The basis upon which to define learning and development tracks, eligibility, as well as accountability both for managers and employees, are set out in the Global Learning & Development Policy. This policy is complemented by local and divisional programs tailored to the needs of Agfa’s teams. Learning & Development is also key to supporting the achievement of objectives in all areas of the organization’s sustainability goals and each new project should always be supported by adequate training. To this end, a wide range of internal and external L&D experts and tools is provided, combining both digital learning with face-to-face training sessions in technical, business and soft skills areas. New methods of connecting with our employees are promoted or established to enhance the employee experience, including the introduction of learning networks to foster better connectivity among people. Thanks to learner accountability-driven digital learning and a learn-anywhere-anytime approach, Agfa saw an overall increase in the uptake of digitalized learning content in the last years. As a result, coaching tools and instruments have been increasingly digitized and widely proposed to employees through the corporate intranet and online learning platforms. In 2023, the focus has been on L&D platform uniformization. ‘MyLearning’, the new Agfa Learning Management System (LMS), has therefore been launched for all Agfa employees (including contractors and dealers), with the exception of around 30 people in Germany for whom the discussions and approval cycle with local Works Council are still to be completed. It replaces the existing L&D platforms and introduces new features such as a more userfriendly interface, an easier administration, a more efficient self-service for learner, trainer and manager and social learning like rating, featuring and recommending courses. This new LMS will allow Agfa to access a complete set of automatically retrieved data for future reporting exercises. In 2023, 87% of Agfa’s employees used one of the available learning opportunities, either through digital platforms or instructor-led trainings. On average, these individuals spent on average 12.9 hours learning.
“In 2023, we rolled out MyLearning, Agfa’s new learning management system to the vast majority of the company. The platform brings numerous advantages, including a user-friendly interface and role-based training, as well as a much better view on the uptake of trainings. But more importantly it helps us to foster a culture of life-long learning where individuals take charge of their learning journey. The more tailored approach and featured trainings help colleagues not only to improve current skills, but also future-proof their skills and help them to build a mindset that welcomes future challenges and changes with positivity and adaptability.”
— Ronny Duwyn, Global Head of Learning & Development
A skilled workforce and agile organization are essential for the continued success of Agfa’s business. Failure to correctly manage talents to satisfy the current and future needs of the business would hinder the Group’s performance. The processes of career guidance, performance and talent management are those processes implemented to ensure that each individual can thrive within Agfa and can make the best use of their potential to grow and contribute to overall company performance. In particular:
‘FeedForward’ was introduced for all Agfa employees in 2018 to focus on coaching and development, rather than solely on evaluating performance. The ‘FeedForward’ framework provides guidance and coaching tips for people managers and their employees to have value-driven conversations focusing on goal progress, feedback and personal development. Employee development is an integral part of performance management. This supports the achievement of short-term objectives, as well as long-term personal career expectations. An internal career coach may also be assigned to help understand the strengths and weaknesses of employees, which is important for them in their work, life and future career opportunities. The most important goal is to give employees confidence in themselves and in their professional future. This approach creates a flexible performance culture in which both manager and employee play an active role in:
* setting meaningful and result-oriented personal objectives linked to company objectives, thus providing purpose and vision on how each person contributes to the company’s success
* continuously clarifying expectations and redirecting objectives
* giving, asking for and exchanging feedback to improve performance
* maintaining a dialogue on development
The Agfa Talent Development team pursues the ADDIE approach to training, which stands for the five stages of a development process: Analysis, Design, Development, Implementation and Evaluation. The ADDIE model relies on each stage being done in the given order, but with a focus on reflection and iteration. The model offers a streamlined, focused approach that provides feedback for continuous improvement, making it an ideal complement in the spirit of Agfa’s ‘FeedForward’ framework.
Since 2022, senior managers are invited to participate in the annual People Review process to proactively identify key competencies for their department for the future, draw up succession planning for enterprise key roles and list high potentials, i.e. employees who show the potential to take on roles with a broader scope and who are usually on Agfa’s succession bench for wider roles, within the organization. Agfa’s HR Business Partners and HR Managers are specifically trained annually in rolling out the review and in coaching senior managers through the People Review process. In 2023, the deep-dive talent review was performed at company level and helped to identify development actions for more than 1,600 talents and to secure the talent retention and succession plan. To a large extent, the results determine the action plan for development actions and programs for the rest of the calendar year and are followed up centrally by the Talent Development team for each division and corporate center.
Development actions and programs include for example:
* Job rotation and succession plans, career mapping steps.
* Soft skills training plan.
* Talent programs that focus on acquiring the skills, knowledge and practice in building a concrete business case within a nine-month track which is then presented to the leadership teams.
* Leadership programs that aim to equip recently or soon to be promoted people managers with the skills needed to transition from team member to leading a team. This should allow them to progress to skilled people managers who coach other leaders and drive leadership behaviors across Agfa.
* Access to a 360-feedback survey providing insights on how one is perceived in one’s own role, benchmarked against a HR Consultant database (Hudson).
* Access to a Virtual Development Centre (VDC) model, a more agile and business-driven approach based on Hudson competencies, to prepare nominated employees for new or broader roles, with a targeted development track based on outcomes.
Agfa considers Health & Safety (H&S) from a holistic point of view, paying attention to all of its aspects, both physical and mental. This includes working conditions, ergonomics, illness & burn-out prevention and healthy behavior promotion, to name but a few. Agfa strives to ensure that everyone can always work in a safe environment with as few risks as possible and invests in keeping a high level of awareness and focus on preventive measures that avoid any physical or psychological harm to its employees. Safety shall remain an integral part of the Group’s corporate culture and Agfa expects a commitment to safe practices from each individual. Consequently, the Group envisions all employees feeling accountable for their own safety, as well as that of their colleagues and guests. Agfa extends its safety provisions to all visitors, contractors and suppliers, as safe working is an absolute must in order to be allowed to work at and with Agfa. Collectively, all employees bear the responsibility for creating a safe and healthy environment.
To serve Agfa’s vision for zero accidents, a target to reduce the number of accidents with minimum one day lost by 50% by 2025 compared to the 2019 baseline has been set. The focus in 2023 remained on further increasing safety at all levels of operations and to address all those aspects of people’s health that can be influenced by working conditions. Agfa continued to implement all necessary safety measures, as well as adjustments to its way of working. This included for example:
* Offering Agfa employees first aid courses and regular health check-ups adapted to their job and profile risk exposure.
* Providing support for a correct ergonomic set up of the workspaces, and advice on how to keep active and healthy.
* Conducting observation rounds on the work floor to closely examine activities and surroundings and to proactively detect potential unsafe situations and conditions.
* Implementing in the majority of the labs and warehouses the 6-S methodology, a lean approach (Sort, Set in Order, Shine and Inspect, Standardize, Sustain, Safety) to space management that helps create a safe work environment and maximizes overall operational excellence.
* Introducing a new notification process for accidents to give these occurrences more internal visibility and to facilitate their follow-up and investigation.
* Analyzing the root causes of each reported incident, near-accident and accident, across all reporting sites, so that the most adequate corrective measures can be implemented.
* Sharing findings from accident investigations among the sites as a learning opportunity, capitalizing on the experience of those achieving ‘zero’ lost time accidents, some of which have been doing this for several years in a row.
* Harmonizing the incident reporting worldwide to ensure all data are always at hand to carry out appropriate corrective actions. An adequate reporting of occurrences is also key to ensure the right follow-up and, where needed, to report accidents to the authorities according to national and local legislation.
Unfortunately, our effort has not yet been translated into a full positive result for 2023. Although the total number of reportable accidents for the Group excluding the ex-Agfa Offset activities did fall to 13 registrations, the frequency rate of these reportable accidents increased to 2.87. The frequency rate of accidents with more than one working day lost increased to 7.07, with 32 accidents registered in in 2023. These higher figures are due to various factors, such as the variation of legislation related to ‘reportable’ accidents that is stricter in some countries (e.g. the USA) than in others. Particularly long recovery periods for some accidents combined with a lower number of total hours worked played a significant role in this result.
Agfa’s safety indicators:
Table below
| Agfa Group | 2019 (baseline) | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|
| Number of accidents | 34 | 15 | 22 | 29 | 32 |
| Frequency rate (Fg) of accidents with minimum one working day lost | 6.27 | 3.06 | 4.83 | 5.38 | 7.07 |
Frequency rate = (Number of accidents/hours worked) * 1,000,000
These figures are restated to Agfa active sites in 2023, excluding ex-Agfa Offset activities.
Graph below
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Frequency rate (Fg) of reportable accidents for Agfa employees | 0.147 | 0.092 | 0.139 | 0.131 | 0.096 | 0.118 | 0.079 | 0.145 | 0.104 | 0.228 |
| Degree of severity of accidents involving minimum one working day lost | 2.88 | 1.66 | 1.83 | 1.89 | 1.15 | 2.03 | 2.40 | 1.17 | 2.29 | 2.87 |
Frequency rate = (Number of accidents/hours worked) * 1,000,000
Degree of severity = (Number of working days lost/hours worked) * 1,000
These figures exclude ex-Agfa Offset activities in 2023 only.
Given all the considerations and data reported above, the overall long-term trend is still declining. Agfa’s ambition to halve accidents with minimum one working day lost by 2025 remains more active than ever. To achieve this target, following the action plan defined by the additional task force set up at the request of the Executive Management Team in 2022, ongoing safety measures will continue at all locations, and are being reinforced by specific safety programs and education on sites with the highest number of accidents. Consequently, in 2023, ‘Safety High Five’, a set of essential safety rules was launched for everyone in Mortsel, which has historically been one of the sites recording a high number of accidents. ‘Safety High Five’ contains safety requirements as well as Do’s and Don’ts and ensures that everyone has access to the necessary tools and knowledge to work safely.It encompasses five risk areas, to which the training is adapted and it varies in development based on each individual’s work profile:
• safety rules during mobility (on foot, by bicycle or by motorized vehicles)
• appropriate use of collective and personal protective equipment
• specific instructions while working at heights
• proper work methods while working on equipment and plants requiring energy isolation (often referred to as LoToTo, which stands for ‘Lock Out’ ’Tag Out’ and ‘Try Out’)
• work permit requirements when carrying out tasks with high safety risks, e.g. fire, intoxication, suffocation
In parallel, among other programs, the ‘SafeStart’ initiative was also kicked off for manufacturing teams to specifically address the accidents happening during routine tasks, when people are in a hurry or distracted. A number of employees have been trained as Agfa SafeStart trainers to guide the teams through the next training modules. These programs complement the ‘Brain-Based Safety’ initiative started in 2022 for the maintenance and services teams in Mortsel, which builds on neuroscience to deliver coaching that addresses human behavior as a root cause of work-related accidents.
Often, serious injuries are not caused by accidents in the most dangerous circumstances. Far more often, accidents happen during routine tasks, when someone is in a hurry or distracted. In 2023, Agfa started a pilot roll-out of SafeStart. Through a series of training sessions, SafeStart takes safety awareness to the next level by identifying moods and common mistakes and by providing practical techniques that help to be more alert to safety risks, every day, everywhere.
The SafeStart approach to safety
SafeStart – increasing safety awareness to decrease the number of accidents has already been successfully rolled out in many organizations, resulting in a significant decrease in the number and severity of accidents. Through a train-the-trainer concept, a number of colleagues have been trained as Agfa SafeStart trainers. After a common kick-off, these internal trainers are now guiding their teams through the different training modules.
AGFA-GEVAERT ANNUAL REPORT 2023
Since 2023, with the appointment of Bob Wullaert as the Head of Global Industrial Operations and SHEE (Safety, Health, Environment & Energy), these initiatives are being coordinated at Group level and ensure the right focus for the years to come.
Mental health is also essential when preserving the health of employees. Activities to monitor and address concerns are mainly defined at local level, as well as the identification and the specificity of the potential threats due to the fact that they differ based on the operations carried out at each site. In 2023, Agfa continued to support employees by providing online resources and live training sessions related to well-being, resilience, stress management, etc. People managers could rely on dedicated sources to coach and support team members, emphasizing empathy and communication. Additionally, Agfa conducts awareness-raising campaigns that encourage people to work and live more healthily and consciously.
A good work-life balance also plays a crucial role for mental health. This balance entails much more than just the ratio between work hours and private time. How much someone likes their job and how much satisfaction they derive from it is at least as important. Agfa is convinced that people with a good work-life balance are sick less often, experience less stress and feel more engaged. It is also important to acknowledge that the right balance can be different for everyone, and that people’s needs may change over time. Therefore, Agfa has a series of measures in place that are meant to strive for the best possible work-life balance for all its employees:
• flexible working hours, where possible
• part-time work options
• thematic leaves and time credits, e.g. parental leave, training leave etc.
• hybrid work
| Gender | Headcount full-time equivalent | Number of employees | Headcount full-time equivalent | Number of employees | Headcount full-time equivalent | Number of employees | % full-time equivalent |
|---|---|---|---|---|---|---|---|
| Male | 3,871 | 1,155 | 5,026 | 100% | 4,819 | ||
| Female | 3,726 | 1,093 | |||||
| Total |
| Contract Type | Headcount full-time equivalent | Number of employees | Headcount full-time equivalent | Number of employees | Headcount full-time equivalent | Number of employees | % full-time equivalent |
|---|---|---|---|---|---|---|---|
| Number of employees | 3,871 | 1,155 | 5,026 | 100% | 4,819 | ||
| Number of full-time employees | 3,339 | 950 | 4,289 | 85.3% | 4,289 | ||
| Number of part-time employees | 532 | 387 | 205 | 143 | 737 | 14.7% | 530 |
As people are more than ever confronted with new ways to organize their work and communicate with each other, a renewed set of key characteristics and behaviors is expected from both managers and employees to be successful. This is why global guidelines have been developed to provide the framework for eligibility, scheduling, arrangements and expectations on hybrid working. In 2023, Agfa continued to place particular emphasis on developing the relevant capabilities by sharing, for example concrete Do’s and Don’ts for more balance, energy, and self-care when working from home.
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As part of an ecosystem, Agfa’s stakeholder engagement remains a key process to ensure it does business in the most responsible, efficient and sustainable way. Regular exchange with its stakeholders serves as input to define Agfa’s business strategy, to understand and meet mutual expectations and needs, to compare its performance with that of peers and to acquire new knowledge. Agfa’s stakeholder landscape is quite diverse due to the different markets it serves and the fact that it is a publicly listed company and, as such, is framed by specific reporting and transparency duties. Agfa’s stakeholders can be split into internal ones (Agfa employees and trade union representatives), previously described in this report, and external ones (shareholders and business partners across the value chain). The level of engagement with each stakeholder group depends on the relevance of the topic and is likely to vary over time based on other business priorities. The exchanges Agfa regularly had in past years helped to understand the expectations of each stakeholder and served to shape its future actions. In order to achieve a meaningful outcome, stakeholder engagement at Agfa is based on a local approach whereby all divisions and sites are responsible for identifying their respective stakeholders, as well as engaging with them in suitable ways according to needs and interests. While Agfa has built strong relationships with its stakeholders over time, it has also been progressively integrating and structuring its sustainability dialogues within the same framework.
The exchange of information across Agfa’s value chain occurs through multiple channels. At global level, Agfa mainly uses its corporate website, e.g. to make its products’ Safety Data Sheets (SDSs) and the Annual Report publicly available to disclose progress regarding its sustainability performance. These are complemented by a series of tools that are more or less relevant depending on the country and/or the specific markets.
Dialogue with customers, distributors and suppliers is primarily coordinated at local level by each division following specific local and national legal requirements. It is managed through direct contact with sales, service, procurement and marketing departments through regular business meetings, customer visits and training, customer corporate social responsibility and sustainability questionnaires or surveys, annual trade shows, events or tech days, etc. Digital interactions (remote IT project implementations and support, virtual demos for customers, webinars, virtual global conferences and exhibitions etc.) have been increasingly used over the past years and are now fully part of Agfa’s business practices as a complement to the more traditional forms of engagement. These are great platforms to discuss new products and solutions launches, commercial conditions, market trends, innovation, specific needs, co-creation projects, etc. They play a crucial role in Agfa’s decision-making process, particularly in shaping innovation roadmaps or refining sale and service offerings, for example.
Some specific customer programs are also set up at regional level, based on the local context and interest in engaging on sustainability specifically. For instance, Agfa has set up GreenWorks in North America, a customer accreditation scheme that recognizes customers in the graphic communications industry who have demonstrated environmental responsibility and achieved greener outcomes Driven by the close relationships with their customers and the connection to the patients they serve, Agfa’s Latin American team joined the Pink October activities to raise awareness on breast cancer, by setting up the Agfa Run LATAM 2023. Early detection saves lives: for every kilometer run, a square meter
Joining forces for a good cause
of mammography film would be donated. The enthusiasm of the Latin American team quickly spread across the globe. Over 200 colleagues joined the cause, resulting in 350 boxes of film, or 35,000 individual mammography films, donated to six health- care institutions in the region.
AGFA-GEVAERT ANNUAL REPORT 2023
through the use of technology, products, services and practices. The increasing focus on sustainability in the assessment of market needs requires a more explicit and stronger stakeholder engagement. The transition to circular economy, for example, which is essential for a sustainable society, entails the transformation of business models as a whole. To this end, closer cooperation, common strategy and often shared resources with customers and suppliers cannot be underestimated and will further increase in the coming years.
Engagement with shareholders, analysts, investors and potential investors is organized at corporate level under the coordination of the Investor Relations & Corporate Communications department.Agfa regularly organizes investor events, shareholder and analyst meetings, roadshows and personal one-on-one meetings with Executive Management members and the Investor Relations department. In 2023, Agfa:
* Held its Annual Shareholders General Meeting physically on May 9, 2023, where 13 shareholders were present or represented.
* Held approximately 70 one-to-one investor calls to exchange on a series of financial and non-financial topics, mainly addressing key questions around the Group’s strategy and transformation, the business evolution, the impact of cost of inflation, the pension situation and efforts regarding sustainability and ESG as a whole.
More details on how Agfa engaged with its financial stakeholders, including agenda and minutes of shareholders meetings, are provided on Agfa’s corporate website.
Collaboration with market peers, academia and policy makers is essential for Agfa to contribute to broader, industry-wide action on sustainable development and to create synergies that expand its knowledge and potential to make a positive impact. The shared knowledge, expertise, and regulatory intelligence, among other valuable inputs obtained through these collaborations, are used to enhance Agfa’s capacity to innovate, access specialized resources, maintain compliance, align with the latest industry norms and best practices, and adeptly navigate the dynamic business landscape. This, in turn, contributes significantly to the Group’s long-term success and sustainability.
These collaborations are normally topic/product-specific and are primarily managed by the divisions through direct contact via research projects, monitoring of market developments via dedicated press/communication channels and exchange in various industry associations. At a less formal level, members of Agfa’s senior management are often called upon or volunteer to participate in public fora to discuss the Group’s business strategy and sustainable development approach. Such events provide the opportunity to interact with various groups including business leaders, academia and civil society and get their insights.
By the end of 2023, Agfa was an active supportive member of the following associations:
* AXREM – UK trade association representing suppliers of diagnostic medical imaging, radiotherapy, healthcare IT and care equipment
* BELIR – Belgian Investor Relations Association
* BiR&D – Association of international industrial companies having major R&D operations in Belgium
* COCIR – European trade association representing medical imaging, radiotherapy, health ICT and electromedical industries
* essenscia – Belgian Chemical Industry Federation
* EPLF – Association of European Producers of Laminate Flooring
* ESMA – European Specialist Printing Manufacturing Association
SUSTAINABILITY STATEMENTS SOCIAL INFORMATION
* FEFCO – European Corrugated Packaging Association
* Hydrogen Council – Global CEO-led initiative that brings together leading companies with a united vision and long-term ambition for hydrogen to foster the clean energy transition
* Hydrogen Europe – European industries, national associations and research centers active in the hydrogen sector
* I&P – European Imaging and Printing Association
* MedTech Europe – European trade association for the medical technology industry
Agfa is also part of several networks and knowledge centers, including:
* Blauwe Cluster – Belgian innovation cluster for the sustainable blue economy
* CATALISTI – Cluster for the chemical and plastics industry in Flanders
* European Clean Hydrogen Alliance – Supporting the EU’s commitment to reach carbon neutrality by 2050
* CE Connect – Learning network around Circular Economy in Belgium
* FESPA Belgium – An organization bringing together people and organizations active in screen printing, digital printing and textile printing
* Pack4Food – Consortium of companies and research institutes working on the food packaging of the future
* The Shift – Belgian sustainability network
* VIGC – Flemish Innovation Center for Graphic Communication, independent knowledge center in the Benelux
* WaterstofNet – Belgian catalyst for sustainable hydrogen
Via the above platforms, Agfa is also able to participate in knowledge sharing events and is invited to sit at Advisory Committees or ad hoc working groups organized by partners such as the Federation of Belgian Enterprises (VBO) and the Belgian Risk Management Association (BELRIM).
Agfa is also involved with a series of platforms and networks via Agfa-Labs, its open innovation platform for materials and coating research. Examples are the Belgian Association of Technicians for Paint and Related Industries (ATIPI), the Royal Flemish Chemical Association (KVCV) and the Organization for Surface Characterization of Materials (VOM).
Agfa sees itself as part of the communities where its operations are set and where its employees live. Therefore, the Group always dedicates time and resources to engage with them. This is particularly the case when some of its facilities, like the ones in Mortsel, Belgium, are in urban zones.
Agfa uses several ways to inform local communities about its activities, answer questions etc. This is done by physically meeting communities, and especially in the last years, by using virtual tools, social media, websites etc. Agfa has also appointed a representative to sit on the city’s local Environment Council.
An aspect that Agfa monitors closely and that it considers relevant as a reflection of its overall performance, is the number of environmental incidents and complaints. Incidents are one-off events such as spills or releases, for instance due to a machine malfunction, while complaints are those raised for instance by neighbors regarding smell or noise coming from one of our plants. They can be reported to Agfa via email or the available toll-free phone number. Agfa strives to minimize these occurrences as much as possible through regular monitoring and corrective actions depending on the severity of the occurrence. Meeting communities is also a way to propose and listen to suggestions and ideas to reduce these potential nuisances.
Beneath is a summary of the evolution of such figures over time. In 2023, fewer complaints in general were received. Most complaints were related to odor, light, and sound. Measures have been implemented to address them, e.g. restricting the use of internal transport vehicles at certain times.
AGFA-GEVAERT ANNUAL REPORT 2023
| Complaints | Incidents | |
|---|---|---|
| 2014 | 15 | 8 |
| 2016 | 22 | 6 |
| 2018 | 17 | 21 |
| 2020 | 13 | 8 |
| 2022 | 19 | 16 |
| 2015 | 14 | 10 |
| 2017 | 18 | 13 |
| 2019 | 14 | 13 |
| 2021 | 11 | 8 |
| 2023 | 14 | 14 |
Agfa is also regularly active in local knowledge sharing events in STEM projects, school masterclasses, interacting with potential future employees at job fairs, etc. This helps to foster discussions, create an adequate funnel of talents, engage with local communities and encourage social responsibility initiatives.
In addition to transparent communication and proactive engagement to understand what concerns are to be addressed, Agfa tries to provide concrete support whenever possible via monetary or materials/equipment donations. In February 2023, for example, in addition to the matching fundraising organized for UNICEF, the Group donated SYNAPS XM110 to field hospitals after the earthquake that hit southern and central Turkey, as well as northern and western Syria. This Agfa polyester synthetic paper, resistant to water and tearing, was used for printing a standardized patient form created by the Belgian ‘B-Fast’ team. This form aimed to prevent the loss of crucial patient information and translation issues in intercultural medical teams.
More details on how Agfa engaged with its communities are provided on Agfa’s corporate website and through social media.
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Agfa strives to make its customers successful and be their partner of choice for the long term, be it for imaging and information systems or for any other sustainable innovation. This is the vision Agfa wants to encompass in its corporate culture: promoting the ability to learn from each other, listening to its customers and being market-driven to achieve results.
Agfa wants to positively impact the health and well-being of its employees by ensuring supportive working conditions, but also that of people externally by helping them evolve towards digital solutions, energy transition and qualitative patient care through its offerings. Agfa does this by offering leading-edge technology, affordable solutions and innovative ways of working based on its in-depth understanding of the businesses and individual needs of its customers. To succeed, investing in innovation and delivering top quality solutions are key. Operating in a responsible, sustainable and transparent way is just as important.
SUSTAINABILITY STATEMENTS SOCIAL INFORMATION
Agfa HealthCare actively engages a core contingent of its leading clients from discovery and roadmap through the conceptual phase, to the entire development and release processes of their solutions, incorporating frequent feedback sessions, demos and live tests before features get released. Additionally, Agfa HealthCare hosts regular user meetings, including the highly attended AHUG – Agfa HealthCare User Group - meetings in the United States, Canada and across Europe. These user group meetings provide an invaluable platform for gathering first-hand feedback from users, crucial for learning which innovations top the list to improve outcomes and therefore shaping future product roadmaps. Moreover, the agenda of these meetings includes ample time for users to participate in hands-on learning sessions and in-depth demos, ensuring thorough mastery of all solution functionalities and enhancing user efficiency.# AGFA-GEVAERT ANNUAL REPORT 2023
Finally, these user group meetings are greatly valued for their role in creating a true sense of community through networking opportunities. Agfa has a central corporate commitment for product stewardship, service quality and product transparency. The Group takes full responsibility for its products and thereby critically examines safety, health and environmental impacts, as well as legal compliances, throughout each stage of the product’s life cycle. To do that, Agfa applies a three-step approach:
Agfa’s approach to product stewardship is strong, with a dedicated team, clear policies, established processes and internal controls that define day-to-day management. This approach is already fully embedded in the Group’s way of working and the commitments ahead are clear and detailed. Beyond complying with all upcoming new regulations, Agfa’s efforts for the future will be focused on the implementation of the requirements defined within the context of the Green Deal, a package of policy initiatives aimed at setting the European Union on the path to a green transition, with the ultimate goal of reaching climate neutrality by 2050, and particularly on the Chemicals Strategy for Sustainability. It is surely a key tool to achieve sustainable development. Agfa considers it of the utmost importance to drive the entire industry towards more sustainable production and the Group fully supports this both via all its sectors’ associations and its own processes.
In this view, Agfa’s Corporate Safety, Health & Environment Policy principles are:
To support the translation of such principles into clear day-to-day processes, a series of policies and corporate guidelines, both at global and local level, are implemented. In addition to the Global Sustainability Policy that was introduced in 2022, these are some examples of the policies Agfa relies on for the topics addressed in this chapter (not listed in order of priority):
In the coming years, Agfa intends to better structure its approach to delivering sustainable business solutions and managing sustainability in the value chain. Agfa is already active in these areas, mainly addressing these processes at divisional level and ‘per market’. While the divisions know their customers better and will continue to be in charge of defining the right approach, corporate sustainability goals and targets will serve as global supporting guidelines. In 2023, Agfa pursued its efforts around sound products and services management with the aim of ensuring full compliance of its portfolio to binding legislation, and it continued to work on translating corporate objectives into concrete actions.
The main focus regarding Group performance was to:
With regards to chemical management, a Rationalization Committee of Chemicals (RCC) is in place to support the overall implementation of legislation regarding chemicals. It is composed of managers appointed by different business lines and it meets every quarter to align on chemical substitution strategy or other actions to remain compliant with current and future legislation. Due to the nature of Agfa’s products, the RCC pays particular attention to certain substances or groups of substances and specific regulations:
Agfa’s goal is to maintain zero non-compliance regarding the different guidelines listed above. For this reason, Agfa has an internal system in place to report and assess any instance of non-compliance. When one is identified, either preventively, by an internal audit, or reported by a customer, a notified body, or an authority, Agfa ensures the process is adapted to prevent future occurrences.
In 2023, in addition to continuous supporting processes, the focus was on:
Moreover, Agfa HealthCare and Agfa Radiology Solutions were among the first to achieve Quality Management System certification according to the EU Medical Device Regulation 2017/745 (MDR) back in 2021 and 2022. In 2023, Agfa continued with its ambitious roadmap to achieve MDR certification for its product assortment. This shows Agfa’s commitment to quality enhancement and system improvement as the MDR (Regulation (EU) 2017/745) replaces the former European Medical Device Directive (93/42/EEC) and includes more stringent standards and requirements in both clinical and post-market areas than under the directive. The overall goal is to provide patients with access to safer, more effective, and technologically advanced medical devices, ultimately improving healthcare outcomes.
Nowadays, value chains stretch around the globe and companies cannot solely focus on their own products and direct processes anymore. It is crucial that business practices conform to stakeholders’ expectations, not only internally, but also globally across their value chain, to avoid business and moral disruptions. Controlling the entire value chain is so challenging that it is impossible to do without considering partnerships as a key tool to drive business sustainability transformation. Supply chain sustainability management is based on detailed supply chain analysis and monitoring, informed risk assessment and a set of policies to deal with partners. These include the Supplier Sustainability Declaration (SSD), Code of Conduct, Safety, Health & Environment policy, Supplier Performance Standards, etc.
One of the horizontal enablers of these processes is the exchange of information across the value chain. Agfa buys, uses and sells chemical products, electronics and services globally. Hence the proactive management of its products and services on-site and beyond, including engagement with suppliers and downstream users, is the pre-requisite to deliver safe and useful products to the market. Additionally, Agfa’s value chains are extended and diverse due to the variety of its products and services and the multitude of markets the Group works in. They include the wide range of Agfa’s suppliers, e.g. raw materials and packaging suppliers, its distributors, customers and many more. The basis for successful product stewardship and service quality is regulatory compliance to existing legislation, proactive anticipation of future requirements and a deep understanding of the impacts of market developments on our products and services to ensure transparent service-oriented customer relations.# 4. Governance information
Agfa pays great attention to transparent policies that determine the governance of the Group. The goal is to compete vigorously, independently, ethically and fairly, while assuming the responsibility of being a socially responsible company in all countries in which the Group operates worldwide. Agfa’s policies detail its commitment to acting ethically and partnering with organizations that share its vision. These policies include Agfa’s Code of Conduct (CoC) which is integrated in the Corporate Governance Charter, publicly available on Agfa’s website. They list high-level principles that reflect the Group’s objective to operate and grow in a sustainable way, considering the wishes and well-being of its stakeholders, both internal and external. According to the Group’s Code of Conduct (CoC), all Agfa employees, as well as external consultants and contracting parties working with the company, are expected to adhere to the highest standards of ethical conduct and integrity, fully complying with the applicable laws in each jurisdiction where the company operates. Respecting these rights, along with acknowledging the individualities of each employee, is essential for fostering a work environment where everyone is treated with respect. The CoC includes, amongst others, principles regarding:
• Zero-tolerance policy for corruption, bribery and improper payments, both accepted and executed.
• Zero-tolerance policy for conflict of interest and insider trading.
• Full compliance with competition and anti-trust laws.
• Strict respect of intellectual property rights of Agfa and of third parties, agreed confidentiality rules and non-disclosure commitments.
• Full compliance and support in protecting information security and stakeholders’ privacy.
The Corporate Governance Charter and the behavior covered by the CoC are defined by the Board of Directors (BoD). The BoD regularly conducts a comprehensive review of the Corporate Governance Charter, and it is updated as often as needed to reflect the Group’s corporate governance at any time and to assess whether it still is aligned with the latest principles, provisions and guidelines on Corporate Governance. The BoD entrusts the CEO, supported by the Executive Committee, together with whom he forms the Executive Management Team (EMT), to steer and supervise the implementation of this Corporate Governance Charter by setting up internal control and risk management systems. Compliance with the Agfa CoC is required for all employees. Ethical conduct goes beyond mere compliance with the CoC. It involves addressing identified risks inherent in the specific nature of the performed business activities, tasks, countries of operations, etc. and is therefore complemented by more detailed corporate, divisional and/or local policies that define the roll out of these principles within each domain. The coverage and frequency of internal audits take into consideration, for example, the highest risks potentially existing in the most at-risk functions such as corruption and bribery in external exposures (e.g. procurement and sales organizations), or the special focus on sensitive private data, such as patients’ health data, required by the healthcare sector.
Pursuant to Section 54 of the Modern Slavery Act 2015, Agfa HealthCare UK Ltd, as part of the Agfa-Gevaert Group, has also issued a Modern Slavery Statement, renewed in 2022. It sets out the steps taken to prevent modern slavery and human trafficking in its business and supply chains, such as monitoring and improving processes to ensure transparency.
Various levels of internal control and risk management systems are implemented at Agfa to prevent, detect, investigate and respond to allegations or incidents related to business conduct, including corruption, bribery or any other principle mentioned in the Corporate Governance Charter. This includes:
• a Compliance Officer appointed internally to monitor the Directors’ and other designated persons’ compliance with the Corporate Governance Charter;
• an internal audit system to ensure proper monitoring of internal policies related to accounting, financial, sales, production and research and development matters and adequate reviews of such policies;
• a reporting update to the Audit Committee, set up within the BoD, to review and monitor the effectiveness of internal control and risk management systems in place.
Agfa’s annual Compliance Review was presented directly to the Board of Directors before the end of the 2023 fiscal year. In order to mitigate the risk of non-compliance linked to unawareness, every two years, all senior managers involved in decision-making processes (i.e. level 2 and above) are systematically asked to (re)confirm that they have read and understood the Code of Conduct. This was done in 2022 and will be repeated in 2024, once the transitioning of this process to a new platform is finalized. This will enable its extension to all employees holding a management position, regardless of their management level. All Agfa employees have access to dedicated channels made available on the Group’s online training platform Percipio, e.g. ‘The Ethical Leader’ and ‘Ethics, Integrity & Trust’, so they can learn behaviors and strategies to model ethical, honest and trustworthy practices.
Agfa relies on whistle-blowing arrangements to track and ensure compliance with the principles of the Corporate Governance Charter, to reveal and address any misconduct or issue that arises, to promote accountability and fostering a culture of integrity within the organization. Agfa’s employees can at any time submit a question or complaint to their immediate superior or to the Group Compliance Office. The detailed procedure to do so, including contact details (phone number, e-mail and postal addresses) of the Group Compliance Office, is described in the CoC. Complaints and questions are handled in a systematic and confidential manner by the Group Compliance Office. Specialized and independent contact people may be appointed for specific topics covered by the CoC in accordance with local regulation, e.g. a contact person within HR for specific HR related matters.
External parties who would notice a situation that appears to conflict with the law, the CoC or with other regulations, can also submit their concerns by e-mail, phone or letter to the Group Compliance Office. In addition, investors holding a participation in the Company have the opportunity to evaluate the Company’s corporate governance and share their concerns with the Chairman. Other shareholders are in the position to monitor indirectly the management by questioning the Directors on their reports or any other item on the agenda. Those holding at least 3% of the shares can even propose items for the agenda of the General meeting of Shareholders.
In 2023, Agfa continued to increase external visibility, transparency and clarity in its communication towards its stakeholders by regularly including the sustainability topic in presentations for analysts and the press and by using the dedicated section on its website to share regular updates. In 2023, there were no confirmed incidents of corruption or bribery and no convictions or fines for violation of anti-corruption and anti-bribery laws. Two complaints were reported in 2023 via the whistleblowing procedure for alleged breaches of the Agfa CoC. Upon further analysis of the notifications, it was concluded that there had been no breach, and the files were closed without the need for follow-up or corrective action. These conclusions did not lead to follow-up requests from the persons who filed the original complaints.
As an organization, Agfa is part of an ecosystem where suppliers are essential to providing its own products and services to the market. In addition to risks related to ensuring business continuity, having close relationships with suppliers means that their performance and reputation impact Agfa’s own performance and reputation. This is why Agfa expects its suppliers to adhere to the same sustainability standards as it does. Building on the global Agfa Code of Conduct, a specific Agfa Supplier Code of Conduct (CoC) has been developed for all Agfa Suppliers, Distributors and Agents to back up the collaboration between them and the Agfa Procurement department which, due to the specific nature of its tasks, is one of Agfa’s key interfaces with the outside world. Engagement with Agfa’s suppliers is indeed mainly coordinated by the Agfa Procurement department following specific local and national legal requirements. The Agfa Procurement team is a corporate team supporting and servicing all Agfa’s divisions, although for some regions and depending on specific business needs, dedicated local staff may be appointed. The Supplier CoC mandates compliance with laws, the maintenance of applicable legal systems, and the demonstration of a satisfactory record of adherence to both legal requirements and widely accepted standards of fairness and human decency by suppliers.# SUSTAINABILITY STATEMENTS
The covered areas are:
* Prohibition of corruption & bribery
* No unfair business practices
* Anti-discrimination
* No harsh or inhumane treatment
* Freely chosen employment and prohibition of child labor
* Freedom of association & collective bargaining
* Fair working hours, wages & benefits
* Health & safety of employees
* Environmental protection
* Supply chain security (AEO and CT-PAT)
“At Agfa, we are strongly committed to contributing to a better, more sustainable world. Our commitment does not stop at the border of the company. For real impact, we like to look across the entire value chain. And while environmental sustainability is a significant focus, we also emphasize social aspects such as labor conditions, safety, human rights, and business conduct. You may think sustainable procurement comes at a higher cost, but then you need to think again. We need to look through a long-term lens: Considering factors like CO₂ reduction, waste reduction, societal impact, efficiency, and supply chain resilience, you will find that ultimately, sustainable procurement will lead to an overall lower cost. Moreover, sustainability discussions with our suppliers bring a new dimension to the relationship. It is changing the way we do business, and I am sure it will lead to new opportunities and innovation.”
Maarten De Cuypere, Head of Purchasing Agfa HealthCare
The Supplier CoC is incorporated into Agfa’s core and key suppliers’ contracts and is referenced in all purchase orders via the Group’s General Purchasing Conditions, both of which are publicly accessible on the corporate website. Adherence to the Agfa Supplier Code of Conduct is an integral component of Agfa’s General Purchase Conditions. To mitigate the risk associated with sourcing raw materials, goods, or services from suppliers that may not uphold their employees’ human rights, the Agfa Procurement Department ensures that suppliers sign and adhere to the CoC. From 2020 on and throughout 2023, 100% of new contracts signed with key and core suppliers have included the Agfa Supplier CoC as an appendix.
To ensure and regulate fair interactions with suppliers, distributors, and agents, Agfa Procurement employees worldwide can refer to an additional policy on ethical behavior tailored specifically for them. This policy sets forth important principles of ethical business conduct, considering the specific context and needs of Agfa Procurement employees. It provides detailed guidance on interactions with suppliers, government officials, and other third parties, while strictly prohibiting bribery, corruption, and insider trading. Furthermore, it focuses on compliance with competition and anti-trust laws, safeguarding of confidential information, property rights, and resources, as well as on avoidance of conflicts of interest. It also emphasizes employment principles, safety, health, and environmental considerations. The policy incorporates specific examples of potential rule breaches and outlines the expected behavior of employees in such circumstances.
Agfa has also the policy of settling invoices by the mutually and contractually agreed-upon payment terms, ensuring payments are made by the specified deadline. Consequently, there were no outstanding legal proceedings for late payments at the time of this report was drafted.
| Payment Term | Percentage |
|---|---|
| 105 days | 2 |
| 75 days | 22 |
| 45 days | 11 |
| 21 days | 1 |
| 7 days | 12 |
| 90 days | 8 |
| 60 days | 21 |
| 30 days | 19 |
| 14 days | 3 |
| other | 1 |
The selection of Agfa’s suppliers follows a structured qualification and control process that looks into different areas relevant to present and future relationships. All suppliers undergo classification based on a tiering system considering their (potential) impact on Agfa’s business profit, continuity, end-customers, as well as the related supply market complexity and risk level. This classification then guides the nature and frequency of qualification and control processes, such as nomination committees, assessment questionnaires, audit, scorecards etc., which encompass different aspects of supplier performance.
In 2023, both the Potential Supplier Assessment (PSA) used for qualifying (potential) new suppliers and the assessment questionnaire used for auditing existing suppliers were expanded to include sustainability performance (including climate action), environment, and safety categories on top of the existing ones, namely resource and quality management, regulatory affairs and information security.
In 2023, consolidating and giving higher visibility to the initiatives already implemented or in progress, both internally and externally, was a necessary first step. Agfa therefore acted to transparently communicate current strengths, gaps and plans to address these at different levels. More specifically this means that:
All these exchanges serve as the basis to refine Agfa’s sustainability strategy and create the next steps in the Group’s journey. Expanding efforts to increase engagement across Agfa’s supply chain on sustainability topics remains essential for the acceleration of the Group’s progress. It will be a key priority for the years to come.
Agfa has reported the information cited in this GRI content index for 2023 with reference to the GRI Standards.
GRI 1: Foundation 2021
| GRI STANDARD DISCLOSURE | LOCATION | PAGE |
|---|---|---|
| GRI 2: General Disclosures 2021 | ||
| 2-1 Organizational details | • Company Profile • Agfa in the world • Shareholder information | 11 14 307 |
| 2-2 Entities included in the organization’s sustainability reporting | • General basis for preparation of the sustainability statement • Scope of the reported data and reporting process | 22 24-27 |
| 2-3 Reporting period, frequency and contact point | • General basis for preparation of the sustainability statement | 22 |
| 2-4 Restatements of information | • Reporting errors in prior periods | 27 |
| 2-5 External assurance | • Corporate Governance Statement - Auditor | 272 |
| 2-6 Activities, value chain and other business relationships | • Company Profile - Global production and sales network • Healthcare IT ; Digital Print & Chemicals ; Radiology Solutions | 11-15 134-161 |
| 2-7 Employees | • We Are Agfa • Diversity, Equity & Inclusion • Health & Safety | 98-103 109 |
| 2-9 Governance structure and composition | • Corporate Governance Statement • The role of the administrative, management and supervisory bodies | 283-288 |
| 2-10 Nomination and selection of the highest governance body | • Corporate Governance Statement | 283-288 |
| 2-11 Chair of the highest governance body | • Corporate Governance Statement | 283-288 |
| 2-12 Role of the highest governance body in overseeing the management of impacts | • Corporate Governance Statement • The role of the administrative, management and supervisory bodies • Information provided to and sustainability matters addressed by Agfa’s administrative, management and supervisory bodies | 283-288 27-29 |
| 2-13 Delegation of responsibility for managing impacts | • Corporate Governance Statement • The role of the administrative, management and supervisory bodies | 283-288 27 |
| 2-14 Role of the highest governance body in sustainability reporting | • Statutory auditor’s report | 275 |
| 2-15 Conflicts of interest | • Corporate Governance Statement | 283-288 |
| 2-16 Communication of critical concerns | • Corporate Governance Statement | 283-288 |
| 2-18 Evaluation of the performance of the highest governance body | • Corporate Governance Statement | 283-288 |
| 2-19 Remuneration policies | • Remuneration report | 295-300 |
| 2-20 Process to determine remuneration | • Remuneration report | 295-300 |
| 2-22 Statement on sustainable development strategy | • Letter to the shareholders | 4-6 |
| 2-23 Policy commitments | • Business conduct | 120-121 |
| 2-24 Embedding policy commitments | • Business conduct | 120-121 |
| 2-26 Mechanisms for seeking advice and raising concerns | • Channels for Agfa’s workforce to raise concerns • Business conduct | 95-96 120-121 |
| 2-27 Compliance with laws and regulations | • Channels for Agfa’s workforce to raise concerns • Business conduct | 95-96 120-121 |
| 2-28 Membership associations | • Engagement with Agfa’s stakeholders | 111-112 |
| 2-29 Approach to stakeholder engagement | • Processes for engaging with Agfa’s workforce • Engagement with Agfa’s stakeholders | 91 111-112 |
| GRI 3: Material Topics 2021 | ||
| 3-1 Process to determine material topics | • Double Materiality Assessment | 39-42 |
| 3-2 List of material topics | • Double Materiality Assessment | 39-42 |
| 3-3 | # GRI Content Index (continued) |
| Revenue (million euro) | Adjusted EBITDA (1) (million euro) | Adjusted EBIT (1) (million euro) | Result for the period (million euro) |
|---|---|---|---|
| 2023 | 2023 | 2023 | 2023 |
| 1,150 | 76 | (101) | 31 |
| 2022 | 2022 | 2022 | 2022 |
| 1,145 | 50 | (223) | (1) |
(1) Before restructuring and non-recurring items
| Share of Group revenue 2023 by division | Share of Group revenue 2023 by region |
|---|---|
| Digital Print & Chemicals 35% | Europe 37% |
| CONOPS 6% | Latin America 6% |
| Radiology Solutions 37% | NAFTA 26% |
| HealthCare IT 22% | Asia, Oceania, Africa 31% |
Excluding currency effects, the Agfa-Gevaert Group’s revenue increased by 3.2%, driven by the growth engines HealthCare IT, Digital Printing Solutions and ZIRFON membranes for green hydrogen production. In 2023, the growth engines more than compensated for the decline of the traditional film activities, which were under pressure from challenging economic conditions (including adverse currency effects and the weakening economy in China) and geopolitical circumstances.
Based on the strong performances of the HealthCare IT and Digital Print & Chemicals divisions, the Group’s gross profit margin improved to 31.2%, in spite of adverse effects including cost inflation, adverse currency effects, manufacturing inefficiencies and the weakness in the industrial film markets. Adjusted EBITDA improved strongly from 50 million euro in 2022 to 76 million euro (6.6% of revenue).
Based on a strong second half of the year, the HealthCare IT division’s gross profit margin improved from 45.2% in 2022 to 46.5%. The improvement was mainly due overall growth and the increased portion of own IP in the sales mix. The adjusted EBITDA margin increased from 11.0% in 2022 to 12.5%, supported by operational efficiency.
The profitable growth of the Digital Printing Solutions and ZIRFON growth engines, as well as general price increase actions and cost improvements led to a significant improvement in the Digital Print & Chemicals division’s performance. The division was able to restore its gross profit margin from 24.9% of revenue in 2022 to 27.1%. The recurring EBITDA margin improved strongly to 4.6% in 2023, versus 0.9% in the previous year.
Mainly due to issues in the medical film business, the Radiology Solutions division’s gross profit margin decreased slightly from 32.2% of revenue in 2022 to 31.4%. Although costs are well under control and profitability of the Direct Radiography business improved considerably versus 2022, the division’s adjusted EBITDA margin decreased from 10.2% of revenue to 8.8%.
The Agfa-Gevaert Group’s restructuring and non-recurring items resulted in a charge of 39 million euro versus 138 million euro in 2022, which was heavily impacted by transformation efforts and impairments in Radiology Solutions. The Group’s net finance costs amounted to 26 million euro. Income tax expenses decreased to 16 million euro versus 29 million euro in 2022. As a result, the Agfa-Gevaert Group posted a net loss of 101 million euro in 2023, versus a net loss of 223 million euro in the previous year.
At the end of 2023, total assets were 1,368 million euro, compared to 1,756 million euro at the end of 2022.
| Trade working capital (million euro/% of sales) | ||
|---|---|---|
| 2022 | 342 | 32% |
| 2023 | 296 | 27% |
The Agfa-Gevaert Group’s trade working capital (CONOPS excluded) significantly improved from 32% of turnover at the end of the fourth quarter of 2022 to 27% in the fourth quarter of 2023. In absolute numbers, trade working capital evolved from 342 million euro at the end of 2022 to 296 million euro.
In 2023, funded status improved versus 2022 mainly thanks to the disposal of Offset Solutions. The total cash out remained stable due to high inflation of salaries in Belgium in 2022, which forms the basis for the contributions in 2023. The contributions for 2024 are based on a more normalized situation.
In 2023, equity amounted to 396 million euro, against 561 million euro at the end of 2022.
In 2023, the Group generated a free cash flow of minus 48 million euro. In the fourth quarter however, a positive free cash flow of 33 million euro was recorded.
In 2024, the Agfa-Gevaert Group expects a continuation of the trends seen in the previous year, with continued growth for the growth engines and further profitability improvements. As usual, due to seasonality reasons, a slower start of 2024 is expected, followed by a stronger second half, supported by the impact of the materialization of postponed projects.
| Statement of financial position (million euro) | Dec. 2022 | Dec. 2023 |
|---|---|---|
| Non-current assets | 1,756 | 1,368 |
| Current assets | 1,756 | 1,368 |
| Liabilities | 1,195 | 972 |
| Equity | 561 | 396 |
The Annual Accounts as will be presented to the General Meeting of Shareholders of May 14, 2024, were tested against the valuation rules by the Board of Directors and approved in that form. The following points, in particular, will be submitted to the General Meeting of Shareholders for approval:
The Annual Accounts close with a loss for the accounting year 2023 of minus 10,850,376.36 euro. Based on the profit or loss account, the Board of Directors concludes that the Company has suffered a loss for two consecutive years. Article 3:6 1, 6° of the Code of Companies and Associations requires that the Board of Directors justifies the accounting principles in the assumption of going concern. As the going concern assumption of a holding company, such as Agfa-Gevaert NV, basically depends on the Group as a whole, the Board refers to the cash position at Group level and the undrawn credit facilities available at balance sheet date.It is proposed to allocate the result as follows: deduction of the result carried forward. As a result, the result carried forward will amount to minus 513,156,094.55 euro.
Explanation of the most significant entries of the Annual Accounts
In 2023, the Company achieved a revenue of 455.7 million euro. This means an increase of 9.7% compared to the revenue of 2022 (415.6 million euro). The increase was mainly caused by an increase of the sales prices (+11.0%), an adverse currency exchange rate difference (-1.3%) and a stable volume/mix (-0.0%). The 2023 operating loss amounts to minus 23.3 million euro. This represents a decrease of +47,8 million euro compared to 2022. The financial result is minus 54.1 million euro less favorable compared to 2022, resulting in a loss from operating activities before taxes of minus 11.1 million euro (2022: minus 4.8 million euro). After income taxes (2023: plus 0.2 million euro, 2022: minus 1.2 million euro), the loss for the book year amounts to minus 10.9 million euro (2022: minus 6.0 million euro). This is also the result of the financial year to be allocated. This is an increase of the loss with minus 4.8 million euro compared to 2022.
In 2023, the Company spent an amount of 7.8 million euro on research and development in Belgium. In 2023, the number of Agfa-Gevaert NV employees in Belgium decreased by 11 to 1,768 employees on December 31, 2023. This decrease is the result of the recruitment of 181 new employees and 192 employees leaving the Company.
AGFA-GEVAERT ANNUAL REPORT 2023
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| MILLION EURO | FY 2023 | FY 2022 | re-presented % change (excl. FX effects) |
|---|---|---|---|
| Revenue | 249 | 244 | 2.2% |
| (4.9%) | |||
| Adjusted EBITDA (*) | 31.2 | 26.9 | 16.0% |
| % of revenue | 12.5% | 11.0% | |
| Adjusted EBIT (*) | 24.1 | 19.6 | 23.1% |
| % of revenue | 9.7% | 8.0% |
(*) Before restructuring and non-recurring items
In 2023, the HealthCare IT division continued to invest in innovative solutions. At the RSNA event in November, it launched Enterprise Imaging Cloud, offering healthcare providers a solu- tion that is secure, scalable, and accessible, as well as easy to maintain and use – at a predicta- ble cost. Meanwhile, the first significant Cloud contract has been signed in North America. Also at RSNA, the division introduced its Streaming Client in Enterprise Imaging, making images available in near real time, empowering all members of the care team to collaborate seamlessly. In the coming years, innovation efforts will be further accelerated, focusing on cloud, web streaming and reporting, workflow orchestration, and scalability. This specific effort – expected to amount to 10 million euro in 2024-2025 – will be capitalized and will come on top of the current R&D expenditure. Recently, the division recorded a significant improvement in customer satisfaction. HealthCare IT’s customers now commit for the long term and are turning into promotors of the division’s solutions. Throughout the year, HealthCare IT’s order book remained at a healthy level. The division recorded a 1.8% growth in the 12 months rolling order intake starting from 122 million euro the year before to 125 million euro. In both periods, about 15% of total order intake is related to managed services. Excluding currency effects, the division’s top line increased by 4.9% versus 2022. Based on a strong second half of the year, HealthCare IT’s gross profit margin improved from 45.2% in 2022 to 46.5%. The improvement was mainly due overall growth and the increased portion of own IP in the sales mix. The adjusted EBITDA margin increased from 11.0% in 2022 to 12.5%, supported by operational efficiency.
AGFA-GEVAERT ANNUAL REPORT 2023
Diagnostics are the backbone of a hospital. Medical imaging is often the vital piece of information that is needed to reach a diagnosis and initiate patient treatment. Whether it’s an emergency, a routine check-up or treating a long-term disease, patients want all members of their care team to have easy and immediate access to all their images and reports. In the dynamic landscape of modern healthcare, health systems are continuously expanding, forming new partnerships, accommodating rising patient volumes and workloads, and embracing innovative technologies. These developments place an unprecedented demand on staff, resources, and the infrastructure. However, amidst these challenges lies an opportunity to reduce complexity, improve clinical collaboration, and enable workflow efficiencies. Ultimately, this is paving the way for enhanced operations, and superior patient care. And this is where Agfa HealthCare comes in. For over 100 years, Agfa has been a respected leader in innovation. Three decades ago, its IMPAX PACS (Picture Archiving and Communication System) revolutionized the management of imaging in care delivery. Today, the Agfa HealthCare Enterprise Imaging Platform continues to uphold this legacy by pioneering excellence with a solution that not only incorporates cutting-edge technology, but also empowers organizations to achieve their goals and unlock their full potential. Agfa HealthCare’s Enterprise Imaging (Agfa EI) is designed to build a connected, collaborative, and scalable community of care. Its secure platform makes this a reality by providing multi-specialty eco-systems of digital health solutions. There, images are available to all members of the care team – no matter where they are, driving an improved patient experience, while helping to improve business, operational and financial outcomes. Seamlessly co-joining departments across geographies, Agfa HealthCare focuses on creating an exceptional experience and true empowerment. Agfa HealthCare’s ONE platform approach and its unified solutions stack create a true longitudinal Imaging Health Record (IHR) for every patient, completing the customer’s Electronic Health Record (EHR) strategy. It is intended to address not only Radiology and Cardiology, but also the numerous departments and service lines across the healthcare enterprise that generate various forms of imagery. Agfa HealthCare’s technologically sophisticated platform empowers rapid business growth initia- tives, streamlining clinical capacity and knowledge with built-in workflows. This enhances care deliv- ery through a multi-entity shared community Imaging Health Record (IHR) – an Agfa HealthCare Imaging Health Network (IHN) – where studies, regardless of use or location, are available in near real-time. The platform helps to remove the need to move data around, and scale easily by utilizing modern zero-footprint, node-based web-streaming technology. At the top of Agfa HealthCare’s list of priorities is a focus on enabling ‘flow’ – the ability of radiologists and clinicians to cut through the noise and stay focused on the ultimate goal of their role: getting rapidly to an accurate diagnosis, and communicating it to the right people. We call it “That’s life in flow”.
AGFA-GEVAERT ANNUAL REPORT 2023
Agfa HealthCare has been awarded the ‘Best Prac- tices Customer Value Leadership Award, Frost & Sullivan’ for 2023. This award recognizes companies which are at the forefront of innovation – a position achieved by growing in their industries, consolida- ting their leadership position, and innovating and creating new products, solutions and services to meet ever-evolving customer needs. According to the report: “As it sits on a solid foun- dation, Agfa HealthCare can address the growing, fast-evolving global needs and customer-specific challenges” and “Its overall customer-first approach offers immense value to existing and new customers and solidifies its leading reputation in the market.” Agfa HealthCare has been recognized as Best in KLAS for its Enterprise Imaging for Radiology solution in the PACS Middle East/Africa category. This achieve- ment highlights Agfa HealthCare’s focus on delivering high value and support to its customers in the region. The 2023 Best in KLAS report highlights the top-performing healthcare IT solutions as deter- mined by extensive evaluations and conversations with thousands of healthcare providers.
Best in KLAS
AGFA-GEVAERT ANNUAL REPORT 2023
Throughout 2023, Agfa HealthCare maintained a strong commitment to showcasing the unparalleled advantages of its cutting-edge Enterprise Imaging Platform and brought several new innovations to market, amongst which cloud, streaming, workflow orchestration, digital pathology 1 and more AI clini- cal packages. Beyond and above the myriad of benefits of Enterprise Imaging, healthcare providers can now benefit from Software as a Service (SaaS). Major players in the healthcare landscape, particularly prominent organizations in the USA, embraced Agfa HealthCare’s revolutionary one platform solutions.# HEALTHCARE IT
University Health, located in San Antonio, Texas, decided to upgrade to Enterprise Imaging 8.2, plus adding the additional Cardiology module. Eliminating imaging siloes, the solution offers radiologists and cardiologists a single space for reporting, with customizable, modular workflows. University Health is a public hospital with 700 beds, more than 2,400 clinicians, and over 9,000 employees. It also has 25 outpatient specialty and family medicine locations, and opened a new 300-bed women and children’s hospital in summer 2023, with two additional hospitals being planned.
Group of hospitals Nova Scotia Health upgraded its PACS across 40 locations with Agfa HealthCare’s Enterprise Imaging solution. The solution offers the organization access to the latest innovations in digital image storage. Moreover, the enhancements provide radiologists with new tools and will get them ‘future- ready’ for new developments, including artificial intelligence. “The new system continues to allow radiologists to function as needed across the province. They can access the images and information they require, no matter where the patient exams were taken. It’s an end-to-end replacement and improvement of our hardware and software.” Scott McKenna, Chief Information Officer at Nova Scotia Health
Following its re-entry to Brazil, Agfa HealthCare gets traction with its partner Konimagem. Femme, a private healthcare site, specialises in women´s health with 14 units in Sao Paulo, Brazil – performing 1 million clinical studies each year. Together with Konimagem, this project was awarded to Agfa HealthCare’s Enterprise Imaging within a very competitive environment.
Joining the growing number of Agfa HealthCare customers in ASPAC, Northern Health decided to implement Agfa HealthCare’s Enterprise Imaging 8.2 Platform for Radiology, including the RUBEE AI framework. The agreement supports Northern Health’s vision to transform its healthcare services through outstanding innovations and excellence. Northern Health is a prominent public healthcare provider in Melbourne’s Northern Region, which is one of the fastest-growing communities in Australia. “The choice of Agfa HealthCare’s Enterprise Imaging platform aligns with our vision to deliver high-quality care and transform healthcare services through carefully considered investments in innovative technologies.” Dr. Terry Kok, Director of Imaging for Northern Health
HeiligHart hospital decided to upgrade to Agfa HealthCare’s Enterprise Imaging for Radiology solution in the Microsoft Azure cloud platform. This solution will enhance user experience, optimize tasks and improve productivity for the radiology department. The Cloud agreement also includes the Enterprise Imaging VNA and XERO Universal Viewer for image management and visualisation of all affiliated hospital images, as well as a seven-year managed services contract. “The PACS landscape has evolved a lot over the past decade. We want to be ready for the future, including for the possibilities of new technologies such as AI. Enterprise Imaging offers the functionality we need. It is stable, fast, and has a good reputation.” Dr. Rodrigo Salgado, Head of Radiology Department at HeiligHart hospital
Agfa’s Digital Print & Chemicals division is a leading supplier of digital printing solutions for sign & display and industrial markets as well as of innovative products for customers active in the energy sector and various niche industries. The division develops, manufactures and markets state-of-the-art printing equipment and software and a wide range of highly specialized inks for specific applications. To support the green energy transition, the division offers innovative membranes for the production of green hydrogen. Furthermore, it supplies customers in a variety of industrial markets with a broad range of films, coated products and chemicals.
| MILLION EURO | FY 2023 | FY 2022 re-presented | % change (excl. FX effects) |
|---|---|---|---|
| Revenue | 409 | 372 | 9.8% |
| Adjusted EBITDA (*) | 18.6 | 3.4 | 443.4% |
| % of revenue | 4.6% | 0.9% | |
| Adjusted EBIT (*) | 2.6 | (9.3) | |
| % of revenue | 0.6% | -2.5% |
(*) Before restructuring and non-recurring items
In the field of Digital Print Solutions, the ink business grew with 14% in 2023, driven by higher sales across all segments as well as by the ongoing program to convert former Inca customers to Agfa’s ink sets. Early 2024, Agfa and EFI announced their global strategic partnership. Agfa will integrate EFI’s roll-to-roll system into its offerings, while EFI will incorporate Agfa’s high-end hybrid inkjet printers into its suite of solutions. Major product launches are expected in 2024, including the revolutionary water-based SpeedSet 1060 packaging printer, which will be the fastest printer in its category. Furthermore, Agfa plans the launch of the Next-Generation Hybrid Anapurna H3200 inkjet printer, a new mid-range printer and a new 5m roll-to-roll machine.
In the field of Green Hydrogen Solutions, Agfa now counts well over 100 customers in 30 countries for its ZIRFON membrane for alkaline electrolysis. Thus, ZIRFON is rapidly becoming the preferred choice of major players in the green hydrogen market. In 2023, Agfa successfully ramped up its ZIRFON production capacity. The company also started preparing for the establishment of a new industrial-scale ZIRFON production plant in Mortsel, Belgium. The company received approval for an 11 million euro grant for this project and all environmental permits have been obtained. The entry into operation of the plant is planned for October 2025. Recently, Agfa and VITO announced that they renewed their collaboration agreement, aimed at pioneering a new generation of gas separator membranes for alkaline water electrolyzers. For 2024, more than 80% of ZIRFON volumes have already been committed to by customers.
The Digital Print & Chemicals division’s 2023 top line growth was driven by its growth engines Digital Printing Solutions and Green Hydrogen Solutions, as well as by general price increase actions. The weakness in the electronics industry impacted volumes of the ORGACON conductive materials and the products for the production of printed circuit boards. The profitable growth of the growth engines, as well as general price increase actions and cost improvements led to a significant improvement in the division’s performance. As a result, the division was able to restore its gross profit margin from 24.9% of revenue in 2022 to 27.1%. The recurring EBITDA margin improved strongly to 4.6% in 2023, versus 0.9% in the previous year.
Agfa aims to drive the adoption of inkjet printing across various industries. By analyzing the experiences, needs and challenges of graphic printing and goods-producing companies, and by actively partnering with them, Agfa empowers them to become more versatile and efficient through the innovative use of inkjet printing technology.
Agfa’s inkjet printing portfolio consists of in-house designed and developed state-of-the-art inkjet printers, inks, and software – either as complete and perfectly matched printing solutions, or as customized components that are integrated within a larger industrial production process.
Sign & display print service providers, as well as goods-producing industries in need of digital printing, use Agfa’s solutions to print on a wide variety of substrates for an ever-growing range of applications, such as signs, displays, billboards, promotional materials, packaging, leather goods, laminated flooring, and decorative materials. For many applications, inkjet has become the most important alternative to screen printing, gravure printing and flexo printing technologies, offering unique possibilities of personalization, as well as shorter runs and just-in-time printing – thus expanding companies’ offering while reducing lead times, waste and working capital.
Agfa develops and produces its inkjet inks in-house, ensuring that they are perfectly tuned to both the printers they are used in and to specific materials and printing applications. Many of these inks are GREENGUARD Gold certified, which means they meet some of the world’s most stringent chemical emission standards and can be used in sensitive indoor environments such as schools and healthcare facilities.
Agfa’s Onset X3 HS achieves a dazzling printing speed of up to 1450 m²/h. This page-wide inkjet press runs on Agfa’s proprietary Onset 560 ink set and comes with multiple automation options, including loading and unloading robot arms, for a fast and efficient job turnaround.
Efficiency and automation are keywords in today’s printing companies.# DIGITAL PRINT & CHEMICALS
Agfa’s high-end printers come with advanced automation options for loading and unloading printing substrates – even including robots. Also adding to a more automated production process is Agfa’s workflow software, which streamlines digital printing workflows by limiting manual interventions (and thus errors), printer idle time and media waste. An intuitive production overview dashboard allows for efficient planning and follow-up of jobs. Last but not least, Agfa attaches great importance to providing great service for its printing customers. The company has an expert team of highly skilled engineers across the globe, in addition to online monitoring tools, allowing for fast remote interventions. Advanced training programs and feedback sessions make sure that printing companies are confident in using the Agfa solutions and always remain up to date.
In spite of adverse macroeconomic conditions, Agfa’s ink and equipment ranges for sign & display and industrial applications continued to convince customers all over the world of their excellent print quality and high production speeds. Sign & display customers often name the dedicated Asanti workflow software – which streamlines operations and guarantees color consistency – as an important advantage over alternative options.
Agfa’s inkjet printing solutions clinched four Pinnacle Product Awards from PRINTING United Alliance. The awards celebrate outstanding products that drive advancements in quality, capability, and productivity within the printing industry. PRINTING United Alliance is the most comprehensive member-based printing and graphic arts association in the United States.
The award-winning machines were:
3M acknowledged the exceptional quality of Agfa’s Tauro wide-format printer series and Anuvia ink set and granted them the 3M Performance Guarantee. In combination with a variety of 3M media, the Tauro printer series and the Anuvia ink set were subjected to a series of rigorous mechanical and physical tests carried out under 3M’s stringent assessment conditions to qualify for the Performance Guarantee. The 3M Performance Guarantee provides assurance that 3M media will meet the highest quality standards with the tested inks.
In December 2023, Agfa unveiled its pioneering SpeedSet 1060 inkjet printing press for the packaging market at an exclusive event for packaging converters and print service providers. Set to be a game-changer in the packaging printing market, the SpeedSet merges the robustness and print excellence of an offset press with the compelling attributes of inkjet printing. With speeds of 11,000 B1 sheets per hour, it offers offset-like print quality yet boasts shorter setup times, reduced material waste, and efficient variable data printing.
Following the successful installation of their first InterioJet press in 2021, décor paper printing company Chiyoda acquired a second InterioJet water-based inkjet printing press from Agfa to enhance its laminate décor paper print production capabilities. Chiyoda supplies printed décor paper with exclusive designs to flooring, furniture, and car laminate panel makers, catering to their unique requirements. The inkjet presses complete Chiyoda’s gravure presses, yet also offer additional functionality. As they are not limited by cylinder length, they are able to print any design in any quantity.
“The InterioJet has proven to be an invaluable addition to our operations, offering unparalleled print quality and great versatility. By investing in a second press, we are further expanding our capability to do shorter print runs, allowing us to meet the increasing demand for prints on demand and just-in-time deliveries.”
Peter Coenegrachts, COO of Chiyoda
Very Displays installed an Avinci CX3200 dye-sublimation wide-format printer from Agfa at their Market Harborough production facility. Very Displays supply portable display solution hardware and graphics predominantly to the UK trade market. Dye-sublimation has always been a big part of their print arm and the scale of it is increasing. The Avinci CX3200 printer will help Very Displays to meet the growing customer demand for soft signage.
“We were very diligent in our research for a new dye-sub machine and Agfa had lots to offer, but what stood out most was their overall openness and honesty when providing information throughout all stages of the selling process. It was refreshing and it convinced us to make the switch. We are very happy with our decision.”
Richard Haslett, Print Manager at Very Displays
CPV is a French printing company that specializes in point-of-sales solutions for retail. The company produces advertising displays, point-of-sales items, and complete shop-in-shop concepts. To be able to execute their highly creative concepts for the luxury cosmetics industry that require premium-quality printing, they make use of multiple printing technologies and state-of-the-art printing and finishing equipment. Looking for a way to embellish prints in house, they purchased a Jeti Tauro H3300 HS LED, which features the option to add a layer of varnish, either applied to the entire surface (flood varnish) or selectively (spot varnish).
“With the Jeti Tauro, we will be able to create embellishments and high-end finishes in-house on various media, and in one go. On top of that, it will be at a lower cost and an extreme speed.”
Olivier Yvard, CEO Groupe CPV
The Bernard Group (TBG), a leading North American visual merchandising company, recently purchased four Tauro H3300 UHS LED inkjet printing systems from Agfa. Driven by Agfa’s Asanti software, the systems offer TBG roll and board printing that produces identical results in color and quality with a unified appearance across media. To further optimize their workflow, TBG turned to PrintFactory, a leader in print software. This partnership resulted in a streamlined and efficient workflow, which improved TBG’s overall productivity and offered greater flexibility to their operations. TBG is also particularly pleased with the Tauro’s limited ink consumption, as it helps bring overall operational costs down.
“The Jeti Tauro UHS uses 60% less ink than printers from other providers. This is wild because we were observing a much more saturated image. It was astonishing to see that image quality while knowing how much less ink was actually being used.”
Buddy Kramber, Vice President of Operations, The Bernard Group
With its best-in-class ZIRFON membranes, Agfa is in a strong position to benefit from the rise of the green hydrogen economy. Agfa’s membranes are an essential part of electrolysis technologies for green hydrogen production. ZIRFON is a high efficiency separator for use in advanced alkaline water electrolysis systems (separating water into oxygen and hydrogen) with exceptional durability even in the dynamic power supply environment of renewable energies. It is rapidly becoming the preferred choice of major research institutes and system developers as the replacement material for the traditional structures that include felt or asbestos. A study by the Fraunhofer Institute using Agfa’s ZIRFON separator membranes confirms that the alkaline electrolysis technology is the most cost-efficient hydrogen production system to date. In the course of 2023, Agfa started to build a new industrial unit for ZIRFON membranes at its Mortsel site in Belgium. This will allow the Group to be ready to meet the strong growth in demand which is expected in the next years. As it is fully in line with the EU’s ambitions to build a strong European hydrogen economy, the project was selected for an EU Innovation Fund Grant. The final Grant Agreement was signed on December 8th. Agfa is a member of various associations and alliances that promote hydrogen as important building block of a zero-emission future, including the Hydrogen Council, the European Clean Hydrogen Alliance, Hydrogen Europe and WaterstofNet.
In 2023, sales for ZIRFON membranes grew exponentially. Over 120 active customers are now using ZIRFON membranes. Several large customers are starting to build commercial electrolyzers, which allows Agfa to generate recurring ZIRFON sales. Based on measures to increase manufacturing efficiency and price increases, ZIRFON started to contribute to Agfa’s profitability in the second half of the year.
In 2022, thyssenkrupp nucera signed a purchase contract with Agfa for the supply of a significant volume of Agfa’s ZIRFON separator membranes to be used in large-scale hydrogen projects. Thyssenkrupp nucera’s alkaline water electrolysis is one of the world’s leading technologies for the large scale generation of green hydrogen and the company secured several projects in this field. Agfa joined the Hydrogen Council as a supporting member on January 1, 2024. The Hydrogen Council is a global CEO-led initiative that brings together leading companies with a united vision and long-term ambition for hydrogen to foster the clean energy transition.# AGFA-GEVAERT ANNUAL REPORT 2023
More on the Hydrogen Council: www.hydrogencouncil.com
Agfa has received approval for an 11 million grant from the prestigious EU Innovation Fund for its GIGA-SCALES project. This funding will act as a driving force for the establishment of Agfa’s pioneering industrial-scale ZIRFON membranes production plant in Mortsel, Belgium. The production plant’s entry into operation is foreseen for October 2025.
Specialty Films & Chemicals: innovative solutions for industrial applications
Agfa develops and manufactures specialty chemicals for promising growth markets, such as conductive polymers for use in hybrid and electric cars. Furthermore, the company markets products for a variety of applications including printed circuit boards, synthetic paper, security documents, non-destructive testing and aerial photography. Through AgfaLabs, the company shares its research knowledge and infrastructure commercially with third parties.
Agfa is a recognised expert in the field of conductive polymers for use in antistatic protection layers for films and components as well as transparent electrodes. Based on these products, Agfa has further developed its conductive ORGACON product line of printing inks, pastes and formulations used in electronic devices and in – among other applications – capacitive sensors, touch screens and membrane switches. A promising growth market for ORGACON is the hybrid vehicle industry. In 2023, volumes of the ORGACON conductive materials were impacted by the weakness in the electronics industry. Agfa’s portfolio also includes highly innovative silver inks for the production of rigid and flexible printed electronic circuitry. Typical applications are printed RFID antennas, touch sensors and metallization grids for photovoltaics.
Thirteen years ago, global specialty print media manufacturer Nekoosa embarked on a transformative journey to diversify its product portfolio. Dedicated to offering the finest quality products to their clients, and continually exploring innovative avenues for growth, they opted for SYNAPS. Agfa’s synthetic paper has since played a pivotal role in the business’s evolution as they perceive a high demand for SYNAPS OM and XM grades in the North American print market. “SYNAPS has shown itself to be the solution to some of our key challenges, cementing its value in our offering. It replaces traditional lamination and enables the effortless production of high-quality prints using various methods while ensuring durability as well as water and tear resistance. It excels in numerous applications, with restaurant menus being a big favorite.” Erika Thomas, Product Manager at Nekoosa
Agfa is the world’s most important manufacturer of phototooling film for the production of printed circuit boards (PCB) for the electronics industry. Manufacturers of electronics use the film to transfer the circuitry layout onto a copper laminate. As inkjet is identified as the technology for making PCB noticeably more efficient and environmentally friendly, Agfa is focusing its R&D efforts on the development of inkjet inks for the production of PCB’s. These inks are marketed under the Dipamat brand and include etch resist, legend and solder mask inks. Agfa’s photooling films and inks find their application also in chemical milling for the manufacturing of small mechanical parts and in metal decoration. In 2023, phototooling film volumes were impacted by the weakness in the electronics industry.
Agfa develops and markets a range of synthetic paper types as alternatives to laminated paper for applications with high demands on durability. Branded SYNAPS, the papers are valued for their print efficiency thanks to exceptionally quick ink acceptance and their water repellence and resistance to tearing and UV light. SYNAPS papers can be printed with standard inks on offset presses as well HP Indigo and dry toner printers. They are suitable for a wide variety of applications, including labels, indoor and outdoor displays, signage, and promotion printing. In 2023 the demand of SYNAPS papers was stable.
The ever increasing attention for security and identification incites authorities to invest in high-tech ID documents of which the authenticity can be checked quickly and effectively. Agfa responds to this need for fraud-proof ID documents with film and chemistry solutions for ABSOLUT-ID, an innovative solution for card manufacturing.
Agfa produces high-quality X-ray film for non-destructive testing of – among others – welds in pipelines, steel structures and fuselages. When Agfa divested its NDT business group to the General Electric Company (GE) in 2003, both parties signed a long-term agreement under which Agfa continues to supply X-ray film to GE Inspection Technologies (now Baker Hughes/Waygate Technologies). Agfa now acts as the exclusive manufacturer of Baker Hughes/ Waygate Technologies’ NDT X-ray films and related chemicals.
For the aerial photography industry, Agfa supplies films, chemicals and photo paper.
Through AgfaLabs, third parties have access to the knowhow of Agfa’s researchers and the facilities of Agfa’s Materials Technology Center. AgfaLabs offers both analytical and development services in the field of materials and coatings. The AgfaLabs website (agfa.com/agfa-labs/cases) contains case studies that show how Agfa assists companies in tackling challenges in various application fields.
Each week more than three million radiographic exams are carried out around the world with equipment from Agfa’s Radiology Solutions division. Agfa makes every one of those images count. It does this by using the power of intelligent technology to make sure radiologists get the accurate and high-quality diagnostic information they need, from the first X-ray taken. One image is all it takes.
Less need for retakes means less radiation exposure for patients and smoother workflow for radiographers. It means radiologists get the quality images they need more quickly. It means facilities can see more patients and it means those patients get fast, accurate diagnoses enabling speedy treatment and better outcomes.
| MILLION EURO | FY 2023 | FY 2022 re-presented | % change (excl. FX effects) | |
|---|---|---|---|---|
| Revenue | 425 | 461 | -7.9% (-4.5%) | |
| Adjusted EBITDA (*) | 37.5 | 47.0 | -20.2% | |
| % of revenue | 8.8% | 10.2% | ||
| Adjusted EBIT (*) | 18.8 | 22.4 | -16.2% | |
| % of revenue | 4.4% | 4.9% | ||
| (*) Before restructuring and non-recurring items |
In China, the medical film business was impacted by the gradual implementation of new centralized procurement practices. Furthermore, the current geopolitical situation had an adverse effect on cost levels. In most regions, adverse currency effects impacted this business’ top line and profitability, which was partly offset by successful price actions. Agfa continues to manage the market driven top line decline of the Computed Radiography business, maintaining healthy profit margins. Profitability of the Direct Radiography business (DR) strongly improved following the streamlining and repositioning of the business. The business remains extremely dynamic in emerging markets, while in Europe and North America, certain customer groups are postponing their investment plans. In the field of DR, Agfa introduced several artificial intelligence solutions that support automated pathologies detection, thus becoming the leader in operationalizing embedded AI at the point of care. SmartXR is an AI solution that offers X-ray equipment operation assistance. ScanXR offers assistance to clinicians. Throughout 2023, Agfa implemented actions to increase the division’s agility and to better adapt it to the current market conditions (right-sizing of the organization, relocations, cost control actions, price increases, net working capital actions). Mainly due to the issues in the medical film business, the division’s gross profit margin decreased slightly from 32.2% of revenue in 2022 to 31.4%. Although costs are well under control and profitability of the DR business improved considerably versus 2022, the division’s adjusted EBITDA margin decreased from 10.2% of revenue to 8.8%.
The expert in medical imaging
Agfa Radiology Solutions is a global provider of traditional X-ray film, hardcopy film and printers, digital radiography equipment and image processing software. Its roots are in traditional medical imaging, but in today’s healthcare market, digital radiography has become the dominant technology. In digital radiography, Agfa is active with both Computed Radiography (CR) and Direct Radiography (DR) systems. Compatible with traditional radiography equipment, CR offers image intensive departments an affordable entry to digital imaging. DR is often the technology of choice for hospital departments demanding a higher throughput and immediate availability of high-quality digital images. Furthermore, mobile DR equipment allows for bed-side imaging, e.g. in emergency rooms or ICU’s. Many hospitals combine CR and DR technologies to cover all their X-ray imaging needs. As a technology leader in both areas, Agfa is in a unique position to offer tailor-made solutions to healthcare facilities planning to invest in digital imaging. All Agfa’s CR and DR systems are offered with its leading MUSICA image processing software and its MUSICA workstation for image identification, acquisition and quality control. Agfa’s SmartXR portfolio provides the radiographer with predictive workflow assistance.# AGFA-GEVAERT ANNUAL REPORT 2023
Due to the competition of softcopy diagnosis, the remaining market for hardcopy film – on which digital images are printed – is small in the USA, Japan and Western Europe. In other countries, market dynamics vary from region to region. Besides hardcopy film, Agfa also supplies hardcopy printers that enable clinicians to print digital images made by general radiography equipment, as well as images made by other modalities, including CT and MRI scanners.
Although the soft investment climate influenced the healthcare sector in 2023, numerous hospitals and hospital groups selected Agfa’s radiology solutions for their imaging needs. At the end of the year, Agfa had a global installed base of over 100,000 DRYSTAR hardcopy printers and over 89,000 digital radiography solutions, all with its leading MUSICA image processing software.
60%/30%
500,000 Healthcare organizations report that Agfa’s DR solutions software allow them to reduce X-ray doses by up to 60% 1 and to increase their productivity by up to 30%. Agfa has installed over 10,000 DR systems all over the world. Together, they account for over 440,000 imaging exams per day.
1 Testing with board-certified radiologists has determined that Cesium Bromide (CR) and Cesium Iodide (DR) Detectors, when used with MUSICA image processing, can provide dose reductions between 50 to 60%, compared to traditional Barium Fluoro Bromide CR systems. Contact Agfa for more details.
Agfa’s MUSICA image processing software automat- ically analyzes the characteristics of each raw image and optimizes the processing parameters, indepen- dent of body part or dose deviation. It enhances noise suppression, offers superb brightness control, reduces veiling glare, and plays a significant role in enabling potential dose reduction. The result is excellent image quality compared to standard image processing, rep- resenting bone and soft issue in a balanced way.
The SmartXR portfolio offers digital radiography tools for dose, alignment, patient positioning, image rota- tion and more. These provide the radiographer with predictive workflow assistance that helps improve operational performance in image acquisition.
At the ECR 2023 event in Vienna, Agfa and Lunit demonstrated the integration of the Lunit INSIGHT CXR software in Agfa’s MUSICA workstation. Thanks to this collaboration, radiographers can automatically be notified in case of life-threatening pathologies detected in chest X-rays.
Agfa Radiology Solutions and IBEX have collaborated to integrate IBEX Bone Health (BH) into DensityScan, providing automatic detection of osteoporosis from every compatible routine X-ray. ScanXR early notification of pathologies CriticalScan identifies suspicious critical patholo- gies, prioritizing key diagnostic information at the point of care, while DensityScan revolutionizes oste- oporosis case findings by automatically pinpointing high-risk patients from compatible radiographs. Together, they elevate diagnostic capabilities, leading to proactive and personalized patient care.
Jehangir Hospital and Research Center is a 350-bed facility that has been providing quality healthcare services in Pune, India, for 78 years. In 2023, the hospital decided to increase its X-ray capacity with Agfa’s multi-purpose DR 800 direct radiography solution, which supports a broad range of exams with a single room and investment.
“We were impressed with the novel design of the DR 800, which allows multiple applications to be handled by one unit. The DR 800 enables us to diagnose with more precision and accuracy, and further enhance our delivery of quality patient care.”
Dr. Vikas Ojha, Head of the Radiology department of Jehangir Hospital and Research Center
Madisonville Community College is one of 16 colleges that make up the Kentucky Community & Technical College System (KCTCS). Its Radiography program offers a comprehensive associate degree that includes specialized courses and hands-on clinical practice. Recently, the College installed two VALORY DR rooms from Agfa. The solution balances reliability and productivity in a modern and easy-to-use design. VALORY’s modular approach lets hospitals fit the configuration to their current needs and budgets, with the flexibility to upgrade at their own speed.
“Our Radiography program focuses on radiation safety and quality patient care. VALORY and Agfa aligned perfectly with our values, with a cost-effective solution that didn’t compromise on quality. With VALORY, we are now providing our students the opportunity to learn on cutting-edge technology.”
Dr. Joy Menser, Program Instructor/Director at KCTCS
The Northern Care Alliance NHS Foundation Trust went live with Agfa’s DR 600 direct radiography room in the Pendleton Gateway medical center located in Salford. The DR 600 is a high-productivity and fully auto- matic X-ray room that streamlines workflow, increases throughput and supports diagnostic confidence. This makes it ideal for a busy care environment such as the Pendleton Gateway walk-in medical center, which alleviates the workload at the Trust’s four main hospitals by taking on routine X-ray exams.
“Pendleton Gateway is a satellite site, which allows us to offer patients the opportunity to have their X-rays carried out closer to home. The Agfa DR 600 will help us to improve our service and the quality of X-rays we produce.”
Rachael Warham, Clinical Service Lead Radiographer, Northern Care Alliance NHS Foundation Trust
East Lancashire Hospitals NHS Trust has chosen to install Agfa’s ceiling-suspended VALORY digital radio- graphy room at the Community Diagnostic Centre, located in the Rossendale Primary Health Care Centre. The Trust is the first healthcare organization in the UK to install the VALORY room. VALORY was selected based on its flexibility to meet the Centre’s needs for a semi-automated X-ray room. The solution combines simplicity, ease of use and cost-effectiveness, with high image quality and low radiation dose.
“VALORY will be pivotal in helping us provide consis- tent, personal and effective care for our communities. By installing it at our Community Diagnostic Centre in Rossendale, we aim to help reduce attendances at our main sites, creating capacity whilst being more convenient for our patients.”
Jack Smith, Director, LSC Diagnostics Collaborative
The Board of Directors and the Executive Management of Agfa-Gevaert NV, represented by Mr. Frank Aranzana, Chairman of the Board of Directors, Mr. Pascal Juéry, Chief Executive Officer and Mr. Dirk De Man, Chief Financial Officer, hereby declare that, to the best of their knowledge,
The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS OF THE AGFA-GEVAERT GROUP
* Prot or loss
* Comprehensive income
* Financial position
* Changes in equity
* Cash ows
BASIS OF PREPARATION
* 1 Reporting entity
* 2 Basis of accounting
* 3 Functional and presentation currency
* 4 Use of estimates and judgments
* 5 Changes in signicant accounting policies
PERFORMANCE OF THE YEAR
* 6 Reportable segments
* 7 Alternative performance measure
* 8 Revenue
* 9 Other operating income and expenses
* 10 Net nance costs
* 11 Information on the nature of expenses
* 12 Earnings per share
EMPLOYEE BENEFITS
* 13 Post-employment benet plans
* 14 Long-term termination benets
* 15 Share-based payment transactions
* 16 Other employee benets
TAXES
* 17 Income taxes
* 18 Other taxes
ACQUISITIONS AND DISPOSALS
* 19 Acquisitions
* 20 Disposals
FINANCIAL RISKS AND FINANCIAL INSTRUMENTS
* 21 Market risk
* 22 Credit risk
* 23 Liquidity risk
* 24 Capital management
* 25 Accounting classication and fair values
* 26 Items of income, expense, gains and losses on nancial instruments recognized in prot or loss
ASSETS
* 27 Goodwill and intangible assets
* 28 Property, plant and equipment
* 29 Right-of-use assets
* 30 Investments in associates and other nancial assets
* 31 Receivables under nance lease
* 32 Inventories
* 33 Other receivables
* 34 Cash and cash equivalents
* 35 Non-current assets held-for-sale
* 36 Other assets
EQUITY AND LIABILITIES
* 37 Equity
* 38 Loans and borrowings
* 39 Provisions
* 40 Trade and other payables
* 41 Other liabilities
LIST OF SUBSIDIARIES
* 42 Investments in subsidiaries
* 43 Equity accounted investees
OTHER INFORMATION
* 44 Operating leases
* 45 Commitments and contingencies
* 46 Related party transactions
* 47 Events subsequent to December 31, 2023
* 48 Information on the auditor’s assignments and related fees
ACCOUNTING POLICIES
* 49 Basis of# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The accompanying notes on pages 172 to 270 are an integral part of these consolidated financial statements.
| MILLION EURO | Note | 2022 re-presented (1) | 2023 |
|---|---|---|---|
| CONTINUING OPERATIONS | |||
| Revenue | 8 | 1,145 | 1,150 |
| Cost of sales | (800) | (792) | |
| Gross profit | 345 | 359 | |
| Selling expenses | (181) | (170) | |
| Research and development expenses | (82) | (73) | |
| Administrative expenses | (168) | (140) | |
| Net impairment loss on trade and other receivables, including contract assets | 22.2 | (1) | 1 |
| Other operating income | 9 | 64 | 53 |
| Other operating expenses | 9 | (117) | (38) |
| Results from operating activities | 6 | (139) | (8) |
| Interest income (expense) - net | - | 3 | 3 |
| Interest income | 10 | 4 | 15 |
| Interest expense | 10 | (4) | (12) |
| Other finance income (expense) - net | (18) | (29) | |
| Other finance income | 10 | 6 | 2 |
| Other finance expense | 10 | (24) | (31) |
| Net finance costs | (18) | (26) | |
| Share of profit of associates - net of tax | 30.1 | (1) | (1) |
| Profit (loss) before income taxes | (157) | (35) | |
| Income tax expense | 17 | (29) | (16) |
| Profit (loss) from continuing operations | (186) | (51) | |
| DISCONTINUED OPERATIONS | |||
| Profit (loss) from discontinued operations - net of tax | 20.1 | (37) | (49) |
| Profit (loss) for the period | (223) | (101) | |
| Profit (loss) attributable to: | |||
| Owners of the Company | (221) | (102) | |
| Non-controlling interests | (2) | 1 | |
| Earnings per share (euro) | 12.1 | (1.41) | (0.66) |
| Basic earnings per share (euro) continuing operations | (1.19) | (0.33) | |
| Basic earnings per share (euro) discontinued operations | (0.22) | (0.33) |
(1) Compliant with IFRS 5.33, the Company has presented in its Consolidated Statements of Profit or Loss and Comprehensive Income, a single amount comprising the total of post-tax profit (loss) of discontinued operations and the post-tax profit (loss) on the disposal of the net assets constituting the discontinued operations. The Group has sold its Offset business in April 2023. Comparative information has been re-presented.
The accompanying notes on pages 172 to 270 are an integral part of these consolidated financial statements.
| MILLION EURO | Note | 2022 re-presented (1) | 2023 |
|---|---|---|---|
| Profit (loss) for the period | (223) | (101) | |
| Profit (loss) for the period from continuing operations | (186) | (51) | |
| Profit (loss) for the period from discontinued operations | 20.1 | (37) | (49) |
| Other comprehensive income, net of tax | |||
| Items that are or may be reclassified subsequently to profit or loss: | |||
| Exchange differences: | |||
| Exchange differences on translation of foreign operations | 37.6 | 7 | (10) |
| Release of exchange differences of discontinued operations to profit or loss | 37.6 | - | (2) |
| Cash flow hedges: | |||
| Effective portion of changes in fair value of cash flow hedges | 37.4 | (5) | (5) |
| Change in fair value of cash flow hedges reclassified to profit or loss | 37.4 | 2 | 2 |
| Adjustments for amounts transferred to initial carrying amount of hedged items | 37.4 | - | - |
| Income taxes | 37.4 | - | - |
| Items that will not be reclassified subsequently to profit or loss: | |||
| Equity investments at fair value through OCI - change in fair value | 37.3 | (2) | (1) |
| Remeasurements of the net defined benefit liability | 37.5 | 148 | (15) |
| Income tax on remeasurements of the net defined benefit liability | 37.5 | (23) | 3 |
| Total other comprehensive income for the period, net of tax: | 130 | (22) | |
| Total other comprehensive income from continuing operations | 102 | (15) | |
| Total other comprehensive income from discontinued operations | 28 | (6) | |
| Total comprehensive income for the period attributable to: | (93) | (123) | |
| Owners of the Company | (91) | (125) | |
| Non-controlling interests | (2) | 2 | |
| Total comprehensive income for the period from continuing operations attributable to: | (85) | (66) | |
| Owners of the Company (continuing operations) | (85) | (66) | |
| Non-controlling interests (continuing operations) | - | - | |
| Total comprehensive income for the period from discontinued operations attributable to: | (8) | (56) | |
| Owners of the Company (discontinuing operations) | (6) | (58) | |
| Non-controlling interests (discontinuing operations) | (2) | 2 |
(1) Compliant with IFRS 5.33, the Company has presented in its Consolidated Statements of Profit or Loss and Comprehensive Income, a single amount comprising the total of post-tax profit (loss) of discontinued operations and the post-tax profit (loss) on the disposal of the net assets constituting the discontinued operations. The Group has sold its Offset business in April 2023. Comparative information has been re-presented.
The accompanying notes on pages 172 to 270 are an integral part of these consolidated financial statements.
| MILLION EURO | Note | December 31, 2022 | December 31, 2023 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | 602 | 576 | |
| Goodwill | 27 | 218 | 215 |
| Intangible assets | 27 | 29 | 24 |
| Property, plant and equipment | 28 | 107 | 115 |
| Right-of-use assets | 29 | 45 | 39 |
| Investments in associates | 30 | 1 | 1 |
| Other financial assets | 30 | 5 | 4 |
| Assets related to post-employment benefits | 13 | 18 | 29 |
| Trade receivables | 22.2 | 9 | 2 |
| Receivables under finance lease | 31 | 72 | 69 |
| Other assets | 36 | 8 | 4 |
| Deferred tax assets | 17 | 91 | 74 |
| Current assets | 1,153 | 792 | |
| Inventories | 32 | 487 | 289 |
| Trade receivables | 22.2 | 291 | 175 |
| Contract assets | 8.3 | 94 | 83 |
| Current income tax assets | 17 | 56 | 51 |
| Other tax receivables | 18 | 28 | 20 |
| Other financial assets | 30 | 1 | - |
| Receivables under finance lease | 31 | 31 | 31 |
| Other receivables | 33 | 6 | 48 |
| Other current assets | 36 | 17 | 13 |
| Derivative financial instruments | 25 | 3 | 2 |
| Cash and cash equivalents | 34 | 138 | 77 |
| Non-current assets held-for-sale | 35 | 2 | 2 |
| TOTAL ASSETS | 1,756 | 1,368 | |
| EQUITY AND LIABILITIES | |||
| Equity | 37 | 561 | 396 |
| Equity attributable to owners of the Company | 520 | 395 | |
| Share capital | 187 | 187 | |
| Share premium | 210 | 210 | |
| Retained earnings | 1,042 | 945 | |
| Other reserves | (3) | - | |
| Translation reserve | (9) | (22) | |
| Post-employment benefits: remeasurements of the net defined benefit liability | (908) | (926) | |
| Non-controlling interests | 37.8 | 41 | 1 |
| Non-current liabilities | 610 | 584 | |
| Liabilities for post-employment and long-term termination benefit plans | 13/14 | 536 | 486 |
| Other employee benefits | 16 | 9 | 5 |
| Loans and borrowings | 38 | 41 | 69 |
| Provisions | 39 | 14 | 7 |
| Deferred tax liabilities | 17 | 9 | 9 |
| Trade payables | 23 | - | 3 |
| Other non-current liabilities | - | 4 | |
| Current liabilities | 585 | 388 | |
| Loans and borrowings | 38 | 25 | 14 |
| Provisions | 39 | 36 | 13 |
| Trade payables | 23 | 249 | 132 |
| Contract liabilities | 8.3 | 109 | 97 |
| Current income tax liabilities | 17 | 29 | 23 |
| Other tax liabilities | 18 | 32 | 24 |
| Other payables | 40 | 6 | 9 |
| Employee benefits | 16 | 95 | 73 |
| Other current liabilities | - | 1 | |
| Derivative financial instruments | 25 | 2 | - |
| TOTAL EQUITY AND LIABILITIES | 1,756 | 1,368 |
The accompanying notes on pages 172 to 270 are an integral part of these consolidated financial statements.
| MILLION EURO | Note | ATTRIBUTABLE TO OWNERS OF THE COMPANY | NON-CONTROLLING INTERESTS | TOTAL EQUITY |
|---|---|---|---|---|
| Share capital | Share premium | Retained earnings | Reserve for own shares | |
| Balance at January 1, 2022 | 187 | 210 | 1,284 | - |
| Comprehensive income for the period | ||||
| Profit (loss) for the period | - | - | (221) | |
| Other comprehensive income, net of tax | 37.9 | - | - | - |
| Total comprehensive income for the period, net of tax | - | - | (221) | |
| Transactions with owners, recorded directly in equity - changes in ownership | ||||
| Dividends | 37.8 | - | - | - |
| Purchase of own shares | 37.2 | - | - | - |
| Cancellation of own shares | 37.2 | - | - | (21) |
| Total transactions with owners, recorded directly in equity | - | - | (21) | |
| Balance at December 31, 2022 | 187 | 210 | 1,042 | - |
| Balance at January 1, 2023 | 187 | 210 | 1,042 | - |
| Comprehensive income for the period | ||||
| Profit (loss) for the period | - | - | (102) | |
| Other comprehensive income, net of tax | 37.9 | - | - | - |
| Total comprehensive income for the period, net of tax | - | - | (102) | |
| Transactions with owners, recorded directly in equity - changes in ownership | ||||
| Dividends | 37.8 | - | - | - |
| Transfer of amounts recognized in OCI to retained earnings following loss of control | 37.5 | - | - | 6 |
| Derecognition of NCI following loss of control | 37.8 | - | - | - |
| Total transactions with owners, recorded directly in equity | - | - | 6 | |
| Balance at December 31, 2023 | 187 | 210 | 945 | - |
| The accompanying notes on pages 172 to 270 are an integral part of these consolidated financial statements.MILLION EURO | Note | 2022 re-presented (1) | 2023 |
|---|---|---|---|
| Profit (loss) for the period | (223) | (101) | |
| Income taxes | 17 | 42 | |
| Share of (profit)/loss of associates, net of tax | 1 | 1 | |
| Net finance costs | 10 | 19 | |
| Operating result | (160) | (53) | |
| Depreciation and amortization (excluding D&A on right-of-use assets) | 27/28 | 35 | 26 |
| Depreciation and amortization on right-of-use assets | 29 | 28 | 19 |
| Impairment losses on goodwill | 27 | 70 | - |
| Impairment losses on intangibles | 27 | 3 | - |
| Impairment losses on PP&E | 28 | 26 | 3 |
| Impairment losses on right-of-use assets | 29 | 15 | 5 |
| Recycling of hedge reserve | 21.4 | 5 | - |
| Government grants and subsidies | (5) | (5) | |
| Gains/losses on the sale of intangible assets and PP&E | (1) | - | |
| Loss on the sale of discontinued operations | 20.1 | - | 42 |
| Expenses for defined benefit plans and long term-termination benefits | 35 | 24 | - |
| Accrued expenses for personnel commitments | 70 | 60 | - |
| Write-downs/reversals on inventories | 32 | 12 | 13 |
| Impairments/reversals on receivables | 22.2 | 1 | (1) |
| Additions/reversals of provisions | 39 | 23 | 1 |
| Exchange results and changes in fair value of derivatives | 10 | (1) | - |
| Operating cash flow before changes in working capital | 166 | 134 | |
| Change in inventories | (65) | 23 | |
| Change in trade receivables | 25 | (22) | |
| Change in contract assets | (14) | 10 | |
| Change in trade working capital assets | (55) | 11 | |
| Change in trade payables | (7) | (10) | |
| Change in contract liabilities | (8) | 5 | |
| Change in trade working capital liabilities | (15) | (5) | |
| Changes in trade working capital | (69) | 6 | |
| Cash out for employee benefits | (149) | (133) | |
| Cash out for provisions | 39 | (27) | (22) |
| Changes in lease portfolio | (2) | 2 | |
| Changes in other working capital | 4 | (15) | |
| Cash settled operating derivatives | (9) | - | |
| Cash generated from (used in) operating activities | (86) | (28) | |
| Income taxes paid | (15) | (2) | |
| Net cash from (used in) operating activities | (100) | (30) | |
| of which related to discontinued operations | - | (12) |
(1) The Group has elected to present a statement of cash ows that includes all cash ows, including both continuing and discontinuing operations.
AGFA-GEVAERT ANNUAL REPORT 2023
| MILLION EURO | Note | 2022 re-presented (1) | 2023 |
|---|---|---|---|
| Capital expenditures | 27/28 | (33) | (34) |
| Proceeds from sale of intangible assets and PP&E | 27/28 | 2 | 3 |
| Acquisition of subsidiaries, net of cash acquired | 19.2 | (48) | 3 |
| Investments in associates | 30.1 | (1) | (1) |
| Disposal of discontinued operations, net of cash disposed of | 20.1 | (5) | (4) |
| Interest received | 7 | 16 | |
| Net cash from (used in) investing activities | (76) | (16) | |
| of which related to discontinued operations | (10) | (5) | |
| Interest paid | (5) | (13) | |
| Dividends paid to non-controlling interests | 37.8 | (11) | (9) |
| Purchase of treasury shares | 7.2 | (21) | - |
| Proceeds from borrowings | 38.4 | 3 | 40 |
| Repayment of borrowings | 38.4 | (4) | - |
| Payment of leases | 38.4 | (30) | (23) |
| Proceeds/(payment) of derivatives | (9) | (3) | |
| Other financing income/(costs) received/paid | 1 | (2) | |
| Net cash from (used in) financing activities | (77) | (10) | |
| of which related to discontinued operations | (20) | (11) | |
| Net increase (decrease) in cash and cash equivalents | (253) | (57) | |
| Cash and cash equivalents at the start of the period | 398 | 138 | |
| Net increase/(decrease) in cash & cash equivalents | (253) | (57) | |
| Effect of exchange rate fluctuations | (7) | (4) | |
| Cash and cash equivalents at the end of the period | 138 | 77 |
(1) The Group has elected to present a statement of cash ows that includes all cash ows, including both continuing and discontinuing operations.
(2) Bank overdrafts are presented in minus of cash and cash equivalents in the cash ow statement: December 31, 2023, 0 million euro, December 31, 2022, 0.1 million euro.
Agfa-Gevaert Group - Consolidated statement of cash flows (continued)
The accompanying notes on pages 172 to 270 are an integral part of these consolidated financial statements.
Agfa-Gevaert NV (‘the Company’) is a company established in Belgium. The address of the Company’s registered office is Septestraat 27, 2640 Mortsel. The 2023 consolidated financial statements of the Group include the Company and 71 consolidated subsidiaries (2022: 99 consolidated subsidiaries) controlled by the Company. In April 2023, the Agfa-Gevaert Group completed the sale of its Offset Solutions business to the Aurelius Group. This transaction encompassed share deals whereby 28 subsidiaries were divested. In Europe, 15 branches of Agfa NV were also included in this disposal. Investments in subsidiaries are listed in Note 42. Until the disposal of the Offset business, non-controlling interests had a material interest in nine subsidiaries of the Group in Greater China and the ASEAN region. As of April 2023, these subsidiaries have been divested (Note 37.8). In Europe, there are a few subsidiaries in which non-controlling interests have an interest that is of minor importance to the Group.
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as adopted by the European Union up to December 31, 2023. The Group has not early adopted any new IFRS requirements that were not yet effective in 2023. Further information is provided in Note 51 ‘New standards and interpretations issued but not yet effective’. The consolidated financial statements were authorized for issue by the Board of Directors on March 12, 2024.
Based on the consolidated statement of profit or loss, the Board of Directors concludes that the Company has suffered a loss for two consecutive years amounting to – 223 million euro (for 2022), respectively -101 million euro (for 2023). It is to be noted that the net loss of 101 million euro is largely driven by the loss related to the Offset Solutions transaction (amounting to 42 million euro) and the restructuring and non-recurring items that have resulted in a charge of 39 million euro versus 138 million euro in 2022, which was heavily impacted by transformation efforts and impairments in Radiology Solutions. Overall, the Agfa-Gevaert Group expects a further improvement of its operational profitability in the full year 2024, with continued growth for the growth engines Digital Printing Solutions, Green Hydrogen Solutions and HealthCare IT and further profitability improvements. Despite the expected peak in 2024 for capital expenditures, including investments in the new ZIRFON production plant in Belgium (Mortsel), the free cash flow from continuing operations for 2024 is expected to be substantially better than the free cash flow for 2023. The proceeds from the sale of Offset Solutions are also expected to contribute to the Group’s improved net cash flow for 2024. The net financial debt excluding the impact of IFRS16 (lease payments) amounted to a net cash position of 37 million euro at December 31, 2023. The Group has available credit facilities, among others a multi-currency revolving credit facility of 230 million euro on which 40 million is drawn at December 31, 2023. Utilization of this facility is conditional on a net financial debt versus Adjusted EBITDA covenant of maximum 3 – both determined on a basis excluding the impact of IFRS16 - which given the Group’s expectations on Adjusted EBITDA for 2024 ensures the Groups liquidity. Further information on the Group’s credit facilities is provided in Note 23 ‘Liquidity risk’.
AGFA-GEVAERT ANNUAL REPORT 2023
Given the cash position at Group level and the undrawn credit facilities at balance sheet date combined with the expected improvements in business performance for 2024, the Board of Directors has concluded to continue applying accounting principles in the assumption of going concern as there is no doubt on the Group’s ability to continue as a going concern.
The consolidated financial statements are presented in euro, which is the Company’s functional currency. All financial information presented in euro has been rounded to the nearest million, except when otherwise indicated. By using rounded numbers, the sum of line items presented in a table may not always match with (sub)totals as this total has been rounded to the nearest million and is not the sum of rounded data.
In preparing these consolidated financial statements, management has made judgments and estimates that affect the Group’s accounting policies and the reported amounts of assets, liabilities, income and expense. Revisions to accounting estimates are recognized prospectively. Accounting estimates and underlying assumptions are continually reviewed but may vary from the actual values. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are listed below with reference to the respective note(s) where more information is disclosed.
| Area of judgments, assumptions and accounting estimates | Explanatory notes |
|---|---|
| The discounted cash flows used for impairment testing | Note 27 Goodwill and intangible assets |
| The assessment of the adequacy of liabilities for pending or expected income tax audits over previous years | Note 17 Income taxes |
| The recoverability of deferred tax assets | Note 17 Income taxes |
| The actuarial assumptions used for the measurement of defined benefit obligations | Note 13 Post-employment benefits |
| Revenue recognition with regard to multiple-element arrangements | Note 8 Revenue |
| Impairment of financial assets expected credit losses | Note 22.2 Expected credit losses |
Financial reporting standards applied for the first time in 2023 were IFRS 17 ‘Insurance contracts’ and amendments to IFRS 17. The consolidated statements of the Group as disclosed in this annual report take into account new standards applicable as from January 1, 2023. Following standards and amendments were applied for the first time to the Group’s financial statements for the year 2023.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Amendments to IAS 12 Income Taxes: International Tax Reform – Pillar Two Model Rules (issued on May 23, 2023)
The Group has adopted International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12) upon their release on May 23, 2023. The amendments provide for a temporary mandatory exception from deferred tax accounting for the top-up tax, which is effective immediately, and require new disclosures about the Pillar Two exposure. Agfa-Gevaert NV, the ultimate parent entity of the Group is headquartered in Belgium, which has enacted new legislation to implement the global minimum top-up tax. However, since the newly enacted tax legislation in Belgium is only effective from January 1, 2024, there is no current tax impact for the year ended December 31, 2023. The Group has performed a detailed analysis and expects to be subject to the transitional safe harbor rules for almost all jurisdictions in which it is present. For those jurisdictions to which the transitional safe harbor rules would not be met, the Group does not expect to have a material impact of any top-up tax that might be due. The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and shall account for it as a current tax when it is incurred. If the global minimum tax legislation had applied in 2023, then the Group would have faced a top-up tax below 1 million euro for the year ended December 31, 2023. The other standards (amendments) were either not applicable or did not have a material impact to the Group’s financial statements.
Excluding currency effects, the Agfa-Gevaert Group’s revenue increased by 3.2%, driven by growth engines Health- Care IT, Digital Printing Solutions and ZIRFON membranes for green hydrogen production. In 2023, the growth engines more than compensated for the decline of the traditional film activities, which were under pressure from challenging economic conditions (including adverse currency effects and the weakening economy in China) and geopolitical circumstances. Based on the strong performances of the HealthCare IT and Digital Print & Chemicals divisions, the Group’s gross profit margin improved to 31.2%, in spite of adverse effects including cost inflation, adverse currency effects, manufacturing inefficiencies and the weakness in the industrial film markets. Adjusted EBITDA improved strongly from 50 million euro in 2022 to 76 million euro (6.6% of revenue).
The profitable growth of the Digital Printing Solutions and ZIRFON growth engines, as well as general price increase actions and cost improvements led to a significant improvement in the division’s performance. The division was able to restore its gross profit margin from 24.9% of revenue in 2022 to 27.1%. The division’s recurring EBITDA margin improved strongly to 4.6% in 2023, versus 0.9% in the previous year. The integration of Inca Digital Systems and conversion of former Inca customers to Agfa’s ink is on track. A global strategic partnership between Agfa and EFI is announced early 2024. Agfa will integrate EFI’s roll-to-roll system into its offerings, while EFI will incorporate Agfa’s high-end hybrid inkjet printers into its suite of solutions.
For Green Hydrogen Solutions, a successful industrial ramp-up of ZIRFON production capacity was achieved. Regarding the establishment of the new industrial-scale ZIRFON production plant in Mortsel, Belgium, all environmental permits have been obtained, and eleven million euro was granted by the EU Innovation Fund upon fulfillment of certain conditions. The entry into operation is foreseen for October 2025. Agfa has concluded a renewed collaboration agreement with VITO, a global research and service center, to pioneer a new generation of gas separator membranes for alkaline water electrolyzers.
Regarding the HealthCare IT business, the order book remained at a healthy level throughout the year. Supported by a strong Q4, the division recorded a 1.8% growth in the 12 months rolling order intake versus the year before. Excluding currency effects, the division’s top line increased by 4.9% versus 2022. Based on a strong second half of the year, HealthCare IT’s gross profit margin improved from 45.2% in 2022 to 46.5%. The improvement was mainly due to overall growth and the increased portion of own IP in the sales mix. The adjusted EBITDA margin increased from 11.0% in 2022 to 12.5%, partly due to strict cost management.
Regarding Radiology Solutions, the medical film business was impacted by the gradual implementation of new centralized procurement practices in China. Furthermore, the current geopolitical situation had an adverse effect on cost levels. In most regions, adverse currency effects impacted the business’ top line and profitability, which was partly offset by successful price actions. Agfa continues to manage the market driven top line decline of the Computed Radiography business, maintaining healthy profit margins. The Direct Radiography business (DR) struggled with the sales of new installations due to the geopolitical situation and the financial challenges that many customers and governments are facing. In Europe and North-America, certain customer groups are postponing their investment plans. However, under these tough conditions Agfa continued to attract important new customers for its high-end DR solutions. Throughout the year, Agfa implemented actions to increase the business’ agility and to better adapt it to the current market conditions (right-sizing of the organization, relocations, cost control actions, price increases, net working capital actions). Mainly due to the issues in the medical film business, the division’s gross profit margin decreased slightly from 32.2% of revenue in 2022 to 31.4%. Although costs are well under control and profitability of the Direct Radiography business improved considerably versus 2022, the division’s adjusted EBITDA margin decreased from 10.2% of revenue to 8.8%.
In 2024, the Agfa-Gevaert Group expects a continuation of the trends seen in the previous year, with continued growth for the growth engines and further profitability improvements. Due to seasonality reasons and the expected coming to maturity of major projects later in the year, the Group expects a slower start of 2024, followed by a stronger second half of the year.
For HealthCare IT, a continued progress in profitability is expected, although strong investments in cloud technology are planned. The second half of the year is expected to be significantly stronger than the first half.
The division Digital Print & Chemicals expects further top line and profitability growth, driven by its growth engines Digital Printing Solutions and Green Hydrogen Solutions. The first effects of the agreement with EFI are expected to become visible in the second half of the year.
The medical film business of Radiology Solutions will continue to be under pressure. The progress in Direct Radiography is expected to continue.
The activities of the Group have been grouped into four divisions: HealthCare IT, Digital Print & Chemicals, Radiology Solutions and CONOPS (former Offset Solutions). This divisional structure is technology and solutions based and will allow the business to seek future partnerships. The Group’s management has identified the aforementioned divisions as its operating segments. They equal the Group’s reportable segments. All operating segments have strong market positions, well-defined strategies and full responsibility, authority and accountability.
To allow for a more accurate assessment of the performance of the operating segments some costs of Corporate func- tions at Group level (e.g. Investor Relations, Corporate Finance, Internal Audit, Innovation Office) are not attributed to the operating segments. These costs are reported under ‘Corporate Services.’ The Group’s operating segments reflect the level at which the Group’s CEO and the Executive Committee review the business and make decisions about the allocation of resources and other operating matters.
The reportable segments comprise the following activities:
Agfa HealthCare transforms the delivery of care – supporting healthcare professionals across the globe with holistic, fast, and meaningful engagement with patient images; no matter where, when or how they need access. Agfa HealthCare’s Enterprise Imaging Platform is designed to not only incorporate cutting-edge technology, but also empower organizations to achieve their goals and unlock their full potential – making a difference in patients’ lives on a daily basis. Focusing on creating an exceptional experience and true empowerment, Enterprise Imaging builds a connected, collaborative, and scalable community of care. Agfa HealthCare’s secure platform makes this a reality by providing multi-specialty eco-systems of digital health solutions.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
There, images are available to all members of the care team, driving an improved performance for care providers, whilst helping to improve business, operational and financial outcomes. In addition to its robust solutions stack, Agfa HealthCare is dedicated to upholding strong client delivery principles. Its commitment extends beyond technology to ensure exceptional service and satisfaction. Agfa HealthCare calls it: “That’s life in flow”.
The Digital Print & Chemicals division serves a great variety of industries. Building on Agfa’s expertise in chemistry and its deep knowledge of the graphic industry, the division has a leading position in inkjet printing. Agfa supplies sign & display and packaging printing companies with a range of highly productive and versatile wide-format inkjet printers with matched inks, powered by dedicated workflow software. In addition, it develops dedicated inkjet printing systems for the laminate and leather industries, as well as high-performance inkjet inks and fluids for a wide variety of industrial inkjet applications, enabling manufacturers to integrate print into their existing production processes. It also offers dedicated functional inkjet inks to specific hi-tech industries such as the printed electronics industry. Furthermore, the division supplies high-quality electrolysis membranes to the hydrogen production industry. With these best-in-class, exceptionally durable ZIRFON membranes, Agfa is in a strong position to benefit from the rise of the green hydrogen economy. The product assortment is completed by a range of printable synthetic papers and films for micrography, non-destructive testing, aerial photography and printed circuit board production.
The Radiology Solutions division is a major player in the diagnostic imaging market, providing analog and digital imaging technology to meet the needs of specialized clinicians in hospitals and imaging centers around the world. Agfa’s innovative imaging equipment and its leading MUSICA image processing software set standards in productivity, safety, clinical value and cost effectiveness. Furthermore, its SmartXR portfolio provides radiographers with predictive workflow assistance. With over 150 years of experience, Agfa helps its customers to improve the quality and efficiency of their patient care. With Agfa, every image counts.
The recent sale of the Offset Solutions division influences the way the Agfa-Gevaert Group reports its results. Under the terms of the share purchase agreement with Aurelius Group, the Agfa-Gevaert Group continues to provide certain consumables (including film) and services to its former division. In the financial statements of the Group this is presented in a new division called ‘Contractor Operations & Services former Offset’ or ‘CONOPS’. CONOPS represents the supply of film and chemicals as well as a set of support services delivered by Agfa to Offset Solutions. As of April 2023, the segment CONOPS represents income charged to the external party ECO3 and the related costs. Revenue represents the supply agreements, with the corresponding cost of sales. The income related to the support services is presented in other income, the corresponding costs are shown in the different SG&A lines. The comparative results for 2022 and the data for the first quarter 2023 are re-presented to reflect the post-closing relationships between the Agfa-Gevaert and the Aurelius Group. Whereas revenue as from the second quarter of 2023 results from invoicing to the third party ECO3, the revenues re-presented for 2022 and the first quarter of 2023 reflect the relationship with the ‘discontinued operations’. As per IFRS 5, stranded costs related to Offset Solutions have been treated differently in 2023 vs 2022. In 2022 stranded costs are reported under CONOPS. In 2023 these are absorbed by the three business divisions.
The Group’s management has identified the aforementioned divisions as its operating segments. They equal the Groups reportable segments. There are no transactions between operating segments. Segment results, assets and liabilities are attributed to a reportable segment based on the following principles:
To allow for a more accurate assessment of the performance of the operating segments some costs of Corporate functions at Group level (e.g. Investor Relations, Corporate Finance, Internal Audit) are not attributed to the operating segments. These costs are currently reported under ‘Corporate Services.’ Also the costs and liabilities for inactive employees (see below) and closed defined benefit plans are not attributed to operating segments as they cannot be allocated on a reasonable basis to one or more reportable segments.
These unallocated data are included in the reconciling items between the total reportable segment information and the consolidated profit or loss, total assets and total liabilities. This reconciliation is provided in Note 6.3.
Inactive employees are defined as permanently retired employees, former employees with vested rights, and other employees who are not expected to return to active status, e.g. early retirement. Employees who are in principle only temporarily inactive, e.g. long-term disability or illness, maternity leave, military service, etc. are treated as active employees and are consequently assigned to one of the reportable segments.
Segment assets and liabilities do not comprise current income tax receivables and payables and deferred taxes (see reconciliation in Note 6.3).
Key data for the reportable segments have been calculated as follows:
| Digital Print & Chemicals | Radiology Solutions | CONOPS (former Offset Solutions) | HealthCare IT | TOTAL | |
|---|---|---|---|---|---|
| MILLION EURO | 2023 | 2023 | 2023 | 2023 | 2023 |
| Revenue | 244 | 249 | 372 | 409 | 1,145 |
| Change | 11.5% | 2.2% | 12.9% | 9.8% | 0.5% |
| Adjusted EBIT | 20 | 24 | (9) | 3 | 18 |
| % of revenue | 8.0% | 9.7% | -2.5% | 0.6% | 2.7% |
| Amortization and depreciation | 2 | 2 | 9 | 11 | 29 |
| Depreciation right-of-use assets | 5 | 5 | 4 | 5 | 21 |
| Adjusted EBITDA | 27 | 31 | 3 | 19 | 69 |
| Segment result | 18 | 20 | (15) | (1) | (83) |
| Segment assets | 420 | 426 | 330 | 321 | 1,436 |
| Segment liabilities | 123 | 132 | 102 | 104 | 617 |
| Free cash from (used in) reportable segments | (1) | 18 | (34) | 7 | (33) |
| Capital expenditures | 2 | 5 | 11 | 17 | 27 |
| Impairment losses recognized on non-current assets | - | - | - | - | 73 |
| Other non-cash items | 20 | 17 | 35 | 28 | 115 |
| Research and development expenses | 33 | 32 | 29 | 29 | 82 |
| Average number of employees (Full time equivalents) (1) | 1,229 | 1,250 | 1,250 | 1,379 | 5,101 |
| Digital Print & Chemicals | Radiology Solutions | CONOPS (former Offset Solutions) | HealthCare IT | TOTAL | |
|---|---|---|---|---|---|
| MILLION EURO | 2022 re-presented | 2022 re-presented | 2022 re-presented | 2022 re-presented | 2022 re-presented |
| Revenue | 461 | 425 | 68 | 68 | 1,150 |
| Change | -0.4% | -7.9% | - | - | -0.3% |
| Adjusted EBIT | 22 | 19 | (14) | - | 45 |
| % of revenue | 4.9% | 4.4% | -20.3% | - | 2.7% |
| Amortization and depreciation | 15 | 11 | 3 | 2 | 29 |
| Depreciation right-of-use assets | 9 | 8 | 3 | 1 | 19 |
| Adjusted EBITDA | 47 | 38 | (8) | 3 | 91 |
| Segment result | (72) | 8 | (14) | (1) | 26 |
| Segment assets | 306 | 282 | 380 | 60 | 1,089 |
| Segment liabilities | 164 | 135 | 228 | 25 | 396 |
| Free cash from (used in) reportable segments | 14 | 4 | (12) | (9) | 20 |
| Capital expenditures | 11 | 10 | 3 | 2 | 33 |
| Impairment losses recognized on non-current assets | 73 | 5 | - | - | 73 |
| Other non-cash items | 51 | 29 | 10 | 5 | 80 |
| Research and development expenses | 16 | 10 | 1 | 1 | 73 |
| Average number of employees (Full time equivalents) (1) | 2,104 | 1,937 | 519 | 281 | 4,847 |
(1) The figures comprise permanent and temporary contracts.
| MILLION EURO | 2022 re-presented | 2023 | |
|---|---|---|---|
| Revenue | Revenue for reportable segments | 1,150 | 1,145 |
| Consolidated revenue | 1,150 | 1,145 | |
| Adjusted EBIT | Adjusted EBIT for reportable segments | 45 | 18 |
| Adjusted EBIT not allocated to a reportable segment | (19) | (15) | |
| Consolidated adjusted EBIT | 26 | 3 | |
| Profit or loss | Segment result | 26 | (83) |
| Profit (loss) from operating activities not allocated to a reportable segment | (56) | (34) | |
| Results from operating activities | (30) | (117) | |
| Other unallocated amounts: | |||
| Interest income (expense) - net | - | 3 | |
| Other finance income (expense) - net | (18) | (29) | |
| Share of profit of associates - net of tax | (1) | (1) | |
| Consolidated profit (loss) before income taxes | (49) | (144) | |
| Assets | Total assets for reportable segments | 1,089 | 1,436 |
| Operating assets not allocated to a reportable segment | 35 | 24 | |
| Other financial assets | 4 | 5 | |
| Deferred tax assets | 74 | 91 | |
| Derivative financial instruments | 2 | 3 | |
| Deferred consideration | 35 | 3 | |
| Cash and cash# 5.2 SEGMENT INFORMATION |
The Group distinguishes the following reportable segments:
* Digital Print & Chemicals
* Radiology Solutions
* CONOPS (former HealthCare IT)
The ‘Offset Solutions’ segment is no longer presented as a separate reportable segment. This segment, with its associated assets and liabilities, is now included in ‘Corporate functions at Group level’.
The segmented other material items as presented in the table under Note 6.2 can be reconciled with the consolidated figures as follows:
| Reportable segments | MILLION EURO | Note | Adjustments | TOTAL |
|---|---|---|---|---|
| Capital expenditures (cash outflows) | 27 | 27/28 | - | 27 |
| Amortization and depreciation | 29 | 27/28 | - | 29 |
| Depreciation right-of-use assets (IFRS 16) | 21 | 29 | - | 21 |
| Impairment losses recognized on non-current assets | 73 | 27/28/29 | - | 73 |
| Other non-cash items | 144 | 5 | 150 | |
| Research and development expenses | 82 | - | 82 |
| Reportable segments | MILLION EURO | Note | Adjustments | TOTAL |
|---|---|---|---|---|
| Capital expenditures (cash outflows) | 33 | 27/28 | - | 33 |
| Amortization and depreciation | 26 | 27/28 | - | 26 |
| Depreciation right-of-use assets (IFRS 16) | 19 | 29 | - | 19 |
| Impairment losses recognized on non-current assets | 5 | 27/28/29 | - | 5 |
| Other non-cash items | 130 | 4 | 134 | |
| Research and development expenses | 73 | - | 73 |
The Group distinguishes four geographical regions: Europe, NAFTA, Latin America and Asia/Oceania/Africa. The Group’s country of establishment is Belgium.
| MILLION EURO | 2022 | 2023 |
|---|---|---|
| Europe | 415 | 430 |
| of which related to home market Belgium | 81 | 80 |
| NAFTA | 296 | 300 |
| Latin America | 74 | 74 |
| Asia/Oceania/Africa | 360 | 346 |
| TOTAL | 1,145 | 1,150 |
| MILLION EURO | 2022 | 2023 |
|---|---|---|
| Germany | 66 | 85 |
| France | 26 | 29 |
| Italy | 47 | 47 |
| UK | 45 | 42 |
| USA | 235 | 231 |
| Canada | 41 | 45 |
| Brazil | 30 | 30 |
| India | 57 | 57 |
| China | 158 | 140 |
| the Netherlands | 33 | 36 |
| Other countries | 407 | 408 |
| TOTAL CONSOLIDATED | 1,145 | 1,150 |
(1) Location by customer
| MILLION EURO | 2022 | 2023 |
|---|---|---|
| Non-current assets | ||
| Europe | 220 | 234 |
| of which related to home market Belgium | 191 | 211 |
| NAFTA | 264 | 256 |
| Latin America | 5 | 3 |
| Asia/Oceania/Africa | 23 | 9 |
| TOTAL | 511 | 502 |
| All foreign countries | ||
| Germany | 6 | 5 |
| UK | 10 | 9 |
| USA | 112 | 110 |
| Canada | 150 | 145 |
| Italy | 5 | 5 |
| China | 9 | 6 |
| Hong Kong | 9 | - |
| Mexico | 2 | 2 |
| Other countries | 17 | 9 |
| TOTAL | 511 | 502 |
(1) Excluding deferred tax assets based on the location of the assets.
Management has presented the performance measures ‘Adjusted EBIT’ and ‘Adjusted EBITDA’ because it monitors these performance measures by division and believes that these measures are relevant to an understanding of the financial performance of the Group’s operating segments.
‘Adjusted EBIT’ is the result from operating activities before restructuring and non-recurring items.
‘Adjusted EBITDA’ is the result from operating activities before depreciation, amortization, restructuring expenses and non-recurring items.
Restructuring expenses mainly relate to employee related termination costs. These costs are presented in Other expense (see Note 9.2).
At year-end 2023, non-recurring items amount to 30 million euro and mainly comprise strategic transformation projects related costs of 17 million euro (changing the organizational structure into a lean, agile and future-oriented structure), impairment losses on property, plant and equipment of 2 million euro (Radiology Solutions), impairment losses of 3 million euro on right-of-use assets related to empty space in Munich, lawyer expenses of 6 million euro, an exceptional write-down of inventories of 1 million euro and preservation site costs as well as unrecoverable balance sheet amounts of 1 million euro.
At year-end 2022, non-recurring items (re-presented) amount to 112 million euro and mainly comprise impairment losses on Goodwill of 70 million euro (Radiology Solutions), impairment losses on intangible assets of 3 million euro, strategic transformation projects related costs of 31 million euro (changing the organizational structure into a lean, agile and future-oriented structure), lawyer expenses of 4 million euro, an exceptional write-down of inventories of 1 million euro, consultancy expenses on acquisitions and divestitures of 2 million euro and a negative pension adjustment of 1 million euro.
The following table gives an overview of the performance of each reportable segment.
| Reportable segment | Digital Print & Chemicals | Radiology Solutions | CONOPS (former HealthCare IT) | Offset Solutions | TOTAL |
|---|---|---|---|---|---|
| 2023 | |||||
| MILLION EURO | |||||
| Segment result (*) | 18 | (15) | (72) | 8 | (61) |
| Adjusted EBIT | 20 | (9) | 22 | 19 | 52 |
| Adjusted EBITDA | 27 | 3 | 47 | 38 | 115 |
| 2022 (re-presented) | |||||
| MILLION EURO | |||||
| Segment result (*) | 20 | (1) | (83) | 14 | (50) |
| Adjusted EBIT | 24 | 3 | 18 | - | 45 |
| Adjusted EBITDA | 31 | 19 | 38 | 3 | 91 |
(*) Segment result: the profit from operating activities allocated to a reportable segment.
| 2022 | 2023 | |
|---|---|---|
| Segment adjusted EBIT | 18 | 45 |
| Adjusted EBIT from operating activities not allocated to a reportable segment: mainly related to ‘Corporate Services’ | (19) | (15) |
| Adjusted EBIT (1) | 31 | |
| Restructuring | (27) | (9) |
| Non-recurring | (112) | (30) |
| Results from operating activities | (108) | (54) |
| 2022 | 2023 | |
|---|---|---|
| Adjusted EBIT | 18 | 45 |
| Depreciation and amortization on intangible assets and PP&E | 29 | 26 |
| Depreciation right-of-use assets (IFRS 16 impact) | 21 | 19 |
| Adjusted EBITDA | 68 | 90 |
| 2022 | 2023 | |
|---|---|---|
| Segment adjusted EBITDA | 68 | 90 |
| Adjusted EBITDA from operating activities not allocated to a reportable segment: mainly related to 'Corporate Services' | (19) | (14) |
| Adjusted EBITDA | 50 | 76 |
| MILLION EURO | 2022 (re-presented) | 2023 |
|---|---|---|
| Revenue from contracts with customers | 1,092 | 1,100 |
| Revenue from other sources: Cash Flow hedges | (2) | (1) |
| Revenue from other sources: Leasing activities | 56 | 54 |
| Sales taxes | (1) | (3) |
| TOTAL REVENUE | 1,145 | 1,150 |
Excluding currency effects, the Agfa-Gevaert Group’s revenue increased by 3.2%, driven by growth engines Health- Care IT, Digital Printing Solutions and ZIRFON membranes for green hydrogen production. In 2023, the growth engines more than compensated for the decline of the traditional film activities, which were under pressure from challenging economic conditions (including adverse currency effects and the weakening economy in China) and geopolitical circumstances.
Regarding the HealthCare IT business, the order book remained at a healthy level throughout the year. Supported by a strong Q4, the division recorded a 1.8% growth in the 12 months rolling order intake versus the year before. Excluding currency effects, the division’s top line increased by 4.9% versus 2022. The improvement was mainly due to overall growth and the increased portion of own IP in the sales mix. The profitable growth of the Digital Printing Solutions and ZIRFON growth engines, as well as general price increase actions and cost improvements led to a significant improvement in the division’s performance. The division was able to restore its gross profit margin from 24.9% of revenue in 2022 to 27.1%.
Regarding Radiology Solutions, the medical film business was impacted by the gradual implementation of new cen- tralized procurement practices in China. Furthermore, the current geopolitical situation had an adverse effect on cost levels. In most regions, adverse currency effects impacted the business’ top line and profitability, which was partly offset by successful price actions. Agfa continues to manage the market driven top line decline of the Computed Radiography business, maintaining healthy profit margins. For HealthCare IT, a continued progress in profitability is expected, although strong investments in cloud technology are planned. The division Digital Print & Chemicals expects further top line and profitability growth, driven by its growth engines Digital Printing Solutions and Green Hydrogen Solutions. The first effects of the agreement with EFI are expected to become visible in the second half of the year. The medical film business of Radiology Solutions will continue to be under pressure. The progress in Direct Radiography is expected to continue.
The Group generates revenue from the sale of goods, the rendering of services and offers multiple-element arrange- ments to customers. Other sources of revenue include rental income from owned and leased equipment under finance leases and immaterial amounts related to hedge accounting.
Revenue from the sale of goods includes the sale of consumables, chemicals, spare parts, stand-alone equipment sales and software licenses. Revenue from the sale of goods are recognized when the customer obtains control of the goods and when it is probable that the agreed transaction price will be collected. In evaluating whether collectability is probable, the entity considers the customer’s ability and intention to pay that amount when it is due.
Revenue from the rendering of services includes installation services, maintenance and post-contract support services.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Under the IFRS 15 standard, as the customer simultaneously receives and consumes the benefits related to these services, the revenue from rendering of services is recognized over time. In case the Group sells multiple services, the total consideration in service contracts will be allocated to all services based on their stand-alone selling price. The stand-alone selling price will be determined based on the list prices at which the Group sells the services in separate transactions. The Group moreover enters into multiple-element arrangements with customers whereby several deliverables such as software, licenses, hardware, services and maintenance are combined and offered to the customer. In accordance with IFRS 15, the Group has assessed whether these deliverables qualify as separate performance obligations, based on the criteria of separate identifiability and whether or not the customer can benefit from goods or services on its own or with resources readily available to him. The Group concluded that for arrangements not requiring substantive customization of the software, these criteria were met. Within the HealthCare IT and Radiology Solutions business segment, the vast majority of the arrangements do not require significant customization or modification. Within the Digital Print & Chemicals divisions, revenue from sale of equipment that require substantive installation activities is recognized when the installation of the equipment is finalized in accordance with the contractually agreed specifications. Installation services and equipment for these installations are considered highly interrelated and are identified as one performance obligation that is recognized at a point in time, i.e. at installation at the client’s premises. Revenue from the sale of smaller equipment not requiring substantive installation activities is recognized when the customer obtains control of the goods. The application of the Group’s accounting policy on recognition of revenue with regard to multiple-element arrangements requires judgment from management in allocating the total arrangement fee, including any discounts, to each performance obligation. Changes to the performance obligations in a multiple-element arrangement and the respective value allocated to the performance obligations could materially impact the amount of earned and unearned revenue.
Within the HealthCare IT segment, the Group also offers ‘Software as a service’ arrangements, whereby products and services including own IP and other services are offered through cloud computing under a subscription model on a pay-per-use model. Agfa offers a right to access the software as it exists throughout the license period. The cloud component is a service towards the customer who can access the software on an as-needed basis over the internet or a dedicated line. Revenue is recognized over time based on a pay-per-use schedule.
Within HealthCare IT, the Group has defined standard payment terms which differ between regions based on local practices. Payment terms are kept as short as possible. In Europe, LATAM, NAFTA and ASPAC these payment terms are on average 30 days after invoicing date, except for Southern Europe where these range between 60-90 days after invoicing date. In other divisions of the Group, payment terms are set based on business and geographical requirements. Deviations from this policy are reviewed by the Credit Committees and approved based on different criteria.
Contract assets related to multiple-element arrangements within the HealthCare IT business amount 76 million euro (2022: 85 million euro), to 2 million euro within the division of Digital Print and Chemicals (2022: 3 million euro) and to 5 million euro within the Radiology Solutions division (2022: 7 million euro). Contract liabilities related to multiple-element arrangements within the HealthCare IT business amount to 57 million euro (2022: 56 million euro), within Digital Print & Chemicals to 16 million euro (2022: 16 million euro), within Radiology Solutions to 24 million euro (2022: 26 million euro) and within Offset Solutions to 0 million euro (2022: 12 million euro).
The disaggregation of revenue from contracts with customers at December 31, 2023, and December 31, 2022, as required by IFRS 15 can be presented as follows:
2023
| CONOPS Digital Print & Chemicals | Radiology Solutions | HealthCare IT | former Offset Solutions | TOTAL |
|---|---|---|---|---|
| MILLION EURO | ||||
| Geographical region | ||||
| Europe | 76 | 193 | 97 | 64 |
| NAFTA | 139 | 108 | 53 | - |
| Latin America | 11 | 10 | 49 | 4 |
| Asia/Oceania/Africa | 23 | 97 | 226 | - |
| Total revenue by geographical region (destination perspective) | 249 | 409 | 425 | 68 |
| Revenue by nature | ||||
| Revenue from the sale of goods | 79 | 357 | 331 | 68 |
| Revenue from the sale of services | 171 | 52 | 94 | - |
| Timing of recognition | ||||
| Revenue recognized at a point in time | 79 | 358 | 332 | 68 |
| Revenue recognized over time | 171 | 50 | 92 | - |
2022 re-presented
| CONOPS Digital Print & Chemicals | Radiology Solutions | HealthCare IT | former Offset Solutions | TOTAL |
|---|---|---|---|---|
| MILLION EURO | ||||
| Geographical region | ||||
| Europe | 71 | 156 | 120 | 68 |
| NAFTA | 139 | 100 | 57 | - |
| Latin America | 11 | 9 | 54 | - |
| Asia/Oceania/Africa | 23 | 106 | 231 | - |
| Total revenue by geographical region (destination perspective) | 244 | 372 | 461 | 68 |
| Revenue by nature | ||||
| Revenue from the sale of goods | 75 | 330 | 364 | 68 |
| Revenue from the sale of services | 169 | 42 | 98 | - |
| Timing of recognition | ||||
| Revenue recognized at a point in time | 75 | 331 | 363 | 68 |
| Revenue recognized over time | 169 | 42 | 98 | - |
Transaction prices allocated to unsatisfied performance obligations are not disclosed as the contracts have in general original expected durations of one year or less.
The Group has recognized following revenue-related receivables, contract assets and contract liabilities:
| MILLION EURO | 2022 | 2023 |
|---|---|---|
| Trade receivables | 300 | 177 |
| Contract assets | ||
| Assets recognized for costs to fulfill contracts | 25 | 23 |
| Goods/services transferred before payment is due | 70 | 60 |
| Contract liabilities | ||
| Deferred revenue | 81 | 78 |
| Advance payments received from customers | 18 | 14 |
| Expected volume discounts - rebates | 11 | 5 |
At December 31, 2023, contract assets amounted to 83 million euro (2022: 94 million euro). Contract assets primarily relate to the Group’s rights to consideration for work performed that is not yet billed. Contract assets are transferred to receivables when the right to payment becomes unconditional. Assets recognized for costs to fulfill contracts comprise all costs that are directly related to a contract such as direct labor, direct materials (WIP balances) and costs that are explicitly chargeable to a customer under a contract. The Group does not capitalize costs to obtain a contract because the amortization period of this asset is less than one year.
At December 31, 2023, contract liabilities amounted to 97 million euro (2022: 109 million euro) and comprise ‘Deferred revenue and advance payments received from customers’ and accruals for bonuses and rebates to goods and service purchased by customers during 2023. Deferred revenue comprises amounts invoiced in accordance with contractually agreed terms but unearned whereas advance payments reflect the amounts paid by customers who have not yet received an invoice and to whom the Company still has to fulfill its commitment, i.e. delivery of goods and/or services. Deferred revenue primarily results from milestone billing in arrangements combining multiple deliverables such as software, hardware, services, (multiple-element arrangements) and from the advance billing of service and maintenance contracts.
Following table shows how much of the revenue recognized in the current period relates to the carry forward of contract balances and how much relates to performance obligations that were satisfied in a prior period:
| MILLION EURO | Contract assets | Contract liabilities |
|---|---|---|
| Opening balance of contract balances | 94 | 109 |
| Revenue recognized that was included in the contract liability at the beginning of the period | - | (109) |
| Revenue recognized from performance obligations satisfied in previous periods | - | - |
| Advance billings to customers during the year | - | 154 |
| Advance payments received from customers during the year | - | 17 |
| Revenue recognized during the period | - | (57) |
| Contract assets recognized during the period | 184 | - |
| Transfer from contract assets to receivables | (125) | - |
| Impairment of contract assets | - | - |
| Contract assets (work in progress) released in Cogs during the period | (69) | - |
| Change in volume discounts/rebates | - | - |
| Acquisitions and disposals of business | - | (16) |
| Exchange differences | (1) | (1) |
| Closing balance of contract balances | 83 | 97 |
| MILLION EURO | 2022 re-presented | 2023 |
|---|---|---|
| Exchange gains and changes in fair value of derivatives | 2 | 3 |
| Finance lease income | 7 | 6 |
| Gains on the sale of property, plant & equipment | - | - |
| Income from reversal of unutilized provisions | 1 | 1 |
| Recharges of costs | 48 | 40 |
| Other income | 6 | 3 |
| TOTAL | 64 | 53 |
Finance lease income mainly comprises interest income. Recharges of costs mainly relate to the CONOPS segment. Under the terms of the share purchase agreement with the Aurelius Group, the Agfa-Gevaert Group continues to provide certain consumables (film) and services to its former division. In the financial statements of the Group, this is presented in a new division ‘Contractor Operations and services former Offset’. The income related to the support functions is presented in other operating income. The comparative results for 2022 are re-presented to reflect the post-closing relationships between the Agfa-Gevaert Group and the Aurelius Group. For 2023, recharges to the Aurelius Group amount to 40 million euro (2022 re-presented: 46 million euro). For 2022, recharges of costs also comprise income related to the services provided to the Dedalus Group (2 million euro).# 9.2 OTHER OPERATING EXPENSES
In 2023 there are no longer recharges to the Dedalus Group.
| MILLION EURO | 2022 re-presented | 2023 | |
|---|---|---|---|
| Restructuring expenses | 27 | 9 | |
| Impairment losses on goodwill | 70 | - | |
| Impairment losses on intangible assets | 3 | - | |
| Impairment losses on PP&E | - | 2 | |
| Impairment losses on right-of-use assets | - | 3 | |
| Exchange losses and changes in fair value of derivatives | 10 | 9 | |
| Housing expenses related to empty space | 3 | 3 | |
| Other expenses | 4 | 12 | |
| TOTAL | 117 | 38 |
In 2022, as a result of the impairment test on goodwill attributable to the cash generating unit Radiology Solutions, an impairment loss amounting to 73 million euro has been recognized. The full carrying amount of goodwill (70 million euro) and intangible assets (3 million euro) has been impaired.
In 2023, conform IAS 36, as a result of a reduced performance of the business segment Radiology Solutions, an impairment test was performed on Property, plant & equipment and Right-of Use assets belonging to this business segment. Individual assets that generate largely independent cash inflows have been tested separately for impairment. Assets for which the value in use could not be determined separately, were tested on the basis of the cash generating unit Radiology Solutions. As a result of these tests, an impairment loss was recorded of 2 million euro on the dedicated assets of the Radiology film business in Mortsel and of 3 million on Right-of-Use assets related to empty space in Munich (more information is provided in Note 28).
In 2022, restructuring plans have resulted in an expense of 27 million euro. This amount partly resulted from the various transformation actions mainly with regard to the Group’s internal financial services impacting a number of positions, mainly in Europe (5 million euro). Moreover, several activities felt the weakening economic environment, mainly in Europe and China. On top of the transformation actions regarding the Group’s IT and financial services, the economic situation thus required further measures for the Group’s activities in Radiology and Digital Print & Chemicals to adapt the cost structure of the Group. In Germany, the production and assembly of some equipment and equipment parts for Computed Radiography has been stopped in 2022. For Direct Radiography, some actions were taken to simplify the operational business model. The aggregate amount of restructuring expenses recognized in 2022 with regard to the measures taken for Radiology amounted to 12 million euro. Measures taken with regard to the Digital Print & Chemicals business have resulted in a restructuring expense of 2 million euro. Other restructuring expenses recognized in the course of 2022 related to individual efficiency/savings initiatives (5 million Euro) and a voluntary leave plan in Belgium for people aged above 60 with a minimum seniority of 15 years: according to this plan, employees could enter during a fix period starting in 2023 into a time credit for 50%, are exempted from daily performance for the part of their working time that they still work for the Company, until their legal retirement or early retirement (the impact at year-end 2022 is estimated at 5 million euro).
In 2023, restructuring expenses mainly relate to employee related restructurings.
| MILLION EURO | 2022 re-presented | 2023 | |
|---|---|---|---|
| Interest income | |||
| on bank deposits and cash balancing accounts between Group entities | 4 | 15 | |
| TOTAL INTEREST INCOME | 4 | 15 | |
| Interest expense on financial liabilities measured at amortized cost | |||
| on bank loans and cash balancing accounts between Group entities | (4) | (12) | |
| on debentures | - | - | |
| TOTAL INTEREST EXPENSE | (4) | (12) | |
| Other finance income | |||
| Exchange gains on non-operating activities net of changes in fair value of derivative financial instruments not part of a hedging relationship | 5 | 2 | |
| Other | 1 | 1 | |
| TOTAL OTHER FINANCE INCOME | 6 | 3 | |
| Other finance expense | |||
| Net periodic pension cost treated as other finance income (expense) and interest portion on other interest-bearing provisions | (1) | (8) | |
| Exchange losses on non-operating activities net of change in fair value of derivative financial instruments not part of a hedging relationship | (20) | (2) | |
| Interest expense on derivatives not part of a hedging relationship | (4) | (4) | |
| Interest expense on cash flow hedges | - | - | |
| Interest expense on other receivables | (1) | - | |
| Interest expense for leases | (2) | (2) | |
| Impairment loss on marketable securities | - | - | |
| Unwinding of discount on provisions | - | - | |
| Exchange differences on disposal of foreign operations reclassified to profit or loss | (3) | - | |
| Other | (4) | (2) | |
| TOTAL OTHER FINANCE EXPENSE | (24) | (31) | |
| NET FINANCE COSTS | (26) | (18) |
(1) The interest portion of other interest-bearing provisions primarily comprises the allocation of interest on provisions for pre-retirement.
(2) The above finance income and finance costs include the following interest income and expense in respect of assets (liabilities) not at fair value through profit or loss.
| 2022 re-presented | 2023 | ||
|---|---|---|---|
| Total interest income on financial assets | 4 | 15 | |
| Total interest expense on financial liabilities | (6) | (15) |
The following table gives an overview of the major expenses/income (incl. subject to restructuring) of the Group’s operating result classified by nature:
| MILLION EURO | Note | 2022 re-presented | 2023 | |
|---|---|---|---|---|
| Revenue | 1,145 | 1,150 | ||
| Cost of goods and services | (580) | (646) | ||
| Personnel expenses | (489) | (460) | ||
| Amortization and depreciation | 27/28/29 | (50) | (45) | |
| Impairment losses on goodwill, intangible assets, PP&E and right-of-use assets | 9.2 | (73) | (5) | |
| Write-downs/write-offs on inventories | 32 | (12) | (11) | |
| Impairment losses on receivables | 22.2 | (1) | 1 | |
| Changes in provisions excl. restructuring | 1 | 1 | ||
| Restructuring expenses | 6/ 7/9 | (27) | (9) | |
| Various income and expenses | (53) | 16 | ||
| Operating result | (139) | (8) |
Cost of goods cover all costs incurred to purchase raw materials, goods purchased for resale, spare parts, changes in inventory and all costs that have a clear link to production such as costs for recutting and refurbishing, to the extent reflected in the cost of sales as comprised in profit or loss for the year.
Cost of services mainly cover:
• the external preliminary work for the processing or manufacturing of products and projects on behalf of the Company
• transport, freight, duties, storage and handling expenses
• utilities and energy expenses
• travel and entertainment
• expenses from leasing activities
The increase of these costs is mainly driven by global inflation on energy, raw materials and logistics.
Personnel expenses in 2023 amounted to 460 million Euro compared to 489 million Euro in 2022. The decrease of these personnel expenses is mainly driven by a reduction in headcount.
Personnel expense comprises:
• payroll related expenses: wages and salaries and social security contributions
• expenses for retirement benefits
• accrued expenses for personnel expenses (such as annual vacation and annual variable payments)
• other personnel expenses (such as temporary staff, training, recruitment and outplacement).
Personnel related restructuring expenses are reported as restructuring expenses
The average number of employees in full-time equivalent heads for 2023 amounted to 4,847 (2022: 4,983).
Classified per function, this average comprising permanent and temporary contracts can be presented as follows:
| 2022 re-presented | 2023 | |
|---|---|---|
| Manufacturing/Engineering | 1,533 | 1,519 |
| Research and development | 713 | 656 |
| Sales and Marketing/Service | 1,928 | 1,900 |
| Administration | 809 | 772 |
| TOTAL | 4,983 | 4,847 |
The calculation of earnings per share at December 31, 2023, was based on the profit attributable to owners of the Company of minus 102 million Euro (2022: minus 221 million Euro) and a weighted average number of ordinary shares outstanding during the year ended December 31, 2023, of 154,820,528 (2022: 156,236,319).
| Number of shares issued | 154,820,528 |
| Own shares (see Note 37.2) | - |
| Number of outstanding ordinary shares at December 31, 2023 (see Note 37.1) | 154,820,528 |
| Effect of options exercised during 2023 | - |
| Effect of stock options on issue | - |
| Weighted average number of ordinary shares at December 31, 2023 | 154,820,528 |
| Euro | 2022 re-presented | 2023 | |
|---|---|---|---|
| Basic earnings per share / Diluted earnings per share | (1.41) | (0.66) |
The average fair value of one ordinary share during 2023 was 2.27 Euro per share.
| MILLION EURO | December 31, 2022 | December 31, 2023 | |
|---|---|---|---|
| Liabilities for post-employment benefits | 531 | 480 | |
| Long-term termination benefits | 5 | 6 | |
| Liabilities for post-employment and long-term benefit plans | 536 | 486 | |
| Other non-current employee benefits | 9 | 5 | |
| Non-current employee benefit liabilities | 545 | 492 | |
| Current employee benefit liabilities | 95 | 73 | |
| Total employee benefit liabilities | 640 | 565 |
The Group provides retirement benefits in most countries in which it operates, mainly through defined contribution plans. In some countries, however, the Group organizes its retirement benefits via defined benefit plans. The net defined benefit liability for Belgium, Germany, UK and USA together (within Agfa in this context also referred to as ‘material countries’) represent 98% (2022: 98%) of the total net defined benefit liability of the Group. A major part of these liabilities relate to closed pension plans, meaning that no further benefits are accrued under these plans. This is the case in the UK, the USA and for a major part of the German pension plans. In Belgium, the major pension plan – referred to as ‘Fabriekspensioenplan’ – has been closed to new managers entering as from January 2019.# . DEFINED CONTRIBUTION PLANS
The Agfa-Gevaert Group companies’ contributions to publicly or privately administered defined contribution pension funds or insurance contracts totaled 7 million euro in 2023 (7 million euro in 2022) of which 3 million euro relates to the Group’s material countries (3 million euro in 2022). These figures reflect the Group’s contributions for its continuing operations only. Once the contributions have been paid, the Group companies have no further payment obligation. The regular contributions constitute an expense for the year in which they are due. Defined contribution plans in Belgium are for the purpose of the IFRS accounting treatment not considered as defined contribution plans but instead as defined benefit plans. More information on these plans is provided hereafter.
Belgian ‘Defined Contribution’ plans are subject to the Occupational Pensions Act of April 2003. In accordance with article 24 of the Occupational Pensions Act, affiliated persons are entitled to a guaranteed return with regard to contributions made by the organizer of the plan and by the employee. Until December 31, 2015, the minimum guaranteed return amounted to 3.25% on employer contributions and of 3.75% on employee contributions. The Act of December 18, 2015, which entered into force on January 1, 2016, has introduced several amendments to the Act of April 28, 2003. As of January 1, 2016, the guaranteed return is aligned with the percentage (65%) of the average return on June 1 over the last 24 months of Belgian State linear bonds (‘OLOs’) with a maturity of 10 years, with a minimum of 1.75% and a maximum of 3.75%. As of 2016, the return guaranteed by law is set at 1.75% and applies to both personal contributions made by the employee and contributions made by the employer. With regard to the application of the guaranteed return in case of modification of the interest rate, the Act of December 18, 2015 introduced the ‘horizontal method’ applicable for all insured plans which guarantee a fixed return up to the retirement age (so-called Branch 21 insured products) and the ‘vertical method’ in all other situations. Within our Belgian group companies, all insured pension plans are managed via ‘Branch 21’ insured products. The application of the ‘horizontal method’ is comparable to a fixed-rate term deposit account. The previous interest rate is applicable until exit, retirement or abolition of the pension engagement whichever occurs first to the contributions due on the basis of the plan rules before the modification. The new interest rate is then applicable to contributions due on the basis of the plan rules from the modification onwards until the first of the aforementioned occurrences. Therefore, for all of the Group’s defined contribution plans with return guaranteed by law, the minimum return of 3.25% (employer contributions) and 3.75% (employee contributions) still apply for contributions made until December 31, 2015. For these contributions, affiliated persons are entitled to at least a return of 3.25%/3.75% until retirement age (or exit/abolition of the pension engagement). For contributions made as from 2016, the employer is committed to a minimum return of 1.75% until occurrence of retirement age, exit or abolition of the pension engagement. As insurance companies apply technical interest rates i.e. agreed interest rates excluding profit-sharing below the minimum return guaranteed by law, not all actuarial and investment risks relating to these insured plans are transferred to the insurance company managing the plans. Therefore these plans do not meet the definition of defined contribution plans under IFRS and are by default classified and measured as defined benefit plans.
In Belgium, the DC-plans comprise pension plans, group insurance plans and bonus pension plans that provide for deferred compensation for employee bonuses. The net liability at December 31, 2023 amounted to 7 million euro (2022: 10 million euro). The total defined benefit cost recognized in profit or loss for 2023 amounted to 9 million euro (2022: 15 million euro) or a decrease of 6 million euro mainly explained by the lower employee bonuses awarded in respect of the 2022 service year and paid into the plan in 2023, and the reduced headcount (and contributions) following the sale of the Offset Solutions business in April 2023. Excluding the impact of discontinued operations, the Group has recognized in profit or loss for 2023 a defined benefit cost for its Belgian DC plans amounting to 9 million euro (2022: 14 million euro). For 2024, the Group expects to recognize a defined benefit cost of 10 million euro. Except for a group insurance plan for managers and executives, all DC-plans are fully financed by employer contributions. In 2023, the annual employer contributions amounted in total to 11 million euro (2022: 15 million euro) or excluding the impact of discontinued operations, 11 million euro (2022: 13 million euro). The Group expects to contribute 13 million euro in 2024.
The Group’s post-employment defined benefit plans primarily relate to retirement benefits. The Group Pension Committee, created as a subcommittee of the Executive Committee (Exco) of the Group assists the Exco in the oversight and supervision of the different pension plans and other post-employment arrangements that exist within the Group. The Committee advises the Exco on benefit plan design matters such as amendment to or termination in whole or in part of the benefit plans and their respective funding arrangements. Next to providing advice to the Exco, the Group Pension Committee is also responsible for advising local management i.e. local management of the pension funds as well as local management of the sponsoring employers of the benefit plans in fulfilling their responsibilities in relation to pension matters. The Group Pension Committee has set a strategic asset allocation for its major plans that are financed through a separate pension fund. The committee reviews the asset allocation targets regularly to ensure that they remain appropriate to the pension fund liability profiles. For the management of the plan assets, the Group Pension Committee is assisted by the Group Pension Investment Committee. The Group Pension Investment Committee has issued a Group Investment Guideline which was approved by the Group Pension Committee. The Group Pension Committee monitors the proper application of this guideline. The Group, through its Group Pension Committee, investigates liability reduction solutions and seeks to de-risk the Group’s post-employment benefit liabilities. In recent years, the Group Pension Committee has proposed different measures that have been realized, among which the closure of the ‘Fabriekspensioenplan’ for new managers entering as from January 2019, the offer in December 2018 to transfer to a third party insurer a certain portion of the benefits built under the Agfa UK Pension Plan and a terminated vested cash-out project for the Agfa Corporation Pension Plan launched in 2018. In 2019, an annuity purchase project has taken place for the pensioners of the Agfa Corporation Pension Plan. In 2020, the de-risking activities continued with a terminated vested cash-out, an annuity placement on retirees and an age 59.5 in-service distributions for the Agfa Corporation Pension Plan. In 2021, the Agfa UK Pension Plan entered into an annuity buy-in contract backing 70% of the pensioner liabilities of the plan, and in 2022 a second annuity buy-in was completed covering the remaining pensioner liabilities and the majority of the deferred member liabilities. Under these buy-in policies purchased from insurers, an up-front premium is paid by the Plan at the time of the transaction after which the insurer pays the Plan the benefits due to members as they fall due. The income the Plan receives from the insurers matches the outgoing payment due to members, due to which the Plan is protected against the risk of having insufficient assets to meet its liabilities in the future. Management of the Group has concluded that the impact of the transaction is to be treated as an asset remeasurement loss with the impact going through Other Comprehensive Income. This conclusion is based on the substance of the transaction being a change in investment strategy. This conclusion is also supported by the decision of both the Group’s management and the trustees of the UK pension plan not to buy-out/wind-up the plan and continue running it until at least 2026. The Group’s major defined benefit plans generally provide benefits that are related to an employee’s remuneration and years of service. Their characteristics and associated risks are explained in more detail hereafter.
Belgium
In Belgium, the defined benefit obligation relates mainly to ‘Fabriekspensioenplan’ that is financed through contributions paid to an external Organization for Financing Pensions (OFP).
The following table summarizes the impact of the Group’s post-employment benefit plans on its consolidated statements of financial position, broken down into material countries and other countries.
| Belgium/ Germany/ UK/US | Other countries | TOTAL | Belgium/ Germany/ UK/US | Other countries | TOTAL | |
|---|---|---|---|---|---|---|
| MILLION EURO | December 31, 2022 | December 31, 2023 | ||||
| Liabilities for post-employment benefits | 521 | 10 | 531 | 476 | 4 | 480 |
| Assets related to post-employment benefits | (18) | - | (18) | (29) | - | (29) |
| Net balance sheet position | 503 | 10 | 513 | 446 | 4 | 451 |
| 98% | 99% |
The evolution of the pension liabilities for the Group’s material countries is explained in section 13.2.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
This fund has the duty to foresee the payments of the pensions promised by its participating employers, being Agfa-Gevaert NV, Agfa NV and Agfa Offset BV to the beneficiaries of the plan.
As of January 1, 2019, the ‘Fabriekspensioenplan’ was closed for new managers of the Group. For the ‘Fabriekspen- sioen’, the plan participants are eligible for a benefit based on a last yearly income formula. As this funded pension plan is still open to future accruals and new entrants except for managers, the plan exposes the Company to a salary increase risk, next to an interest rate risk, an investment risk and a longevity risk. Although this plan has been set up as an annuity plan, more than 95% of the members choose to take their benefit as a lump sum pension payment at the retirement age. The legal and regulatory framework for the ‘Fabriekspensioenplan’ is based on the applicable Belgian law, i.e. the law of October 27, 2006 on the supervision of institutions for occupational retirement provision and the law on supplementary pensions (WAP), applicable as from January 1, 2004. Based on this legislation a funding valuation is prepared annually. The valuation method, used to determine the contributions to the Belgian OFP, is the ‘aggregate cost method’. The contribution, according to the calculation method defined in the financing plan, is expressed as an annual fixed percentage of payroll in order to finance the total service liability. According to the latest actuarial valuation report on the Belgian OFP the Long Term Provision funding ratio at year-end 2023 was 115% (108% at year-end 2022). The Board of Directors of the ‘Pensioenfonds Agfa-Gevaert OFP’ bears the ultimate responsibility for the manage- ment of the assets and liabilities of the ‘Fabriekspensioenplan’. They have delegated investment oversight of the plan’s assets to the Local Investment Committee who in turn operates within the framework set by the Group Pension Committee. The latest Statement of Investments Principles (SIP), prepared by the Local Investment Committee in accordance with the Group Investment Guidelines, has been formally ratified at the Extraordinary General Meeting of the ‘Pensioenfonds Agfa-Gevaert OFP’ on December 7, 2021. The Local Investment Committee needs to ensure that plan assets are invested effectively and prudently, in full compliance with all applicable laws, and for the benefit of plan participants and beneficiaries.
In Germany, no legal or regulatory minimum funding requirements apply, and as such the Group’s German defined benefit retirement plans are all unfunded plans. The German pension plans include a basic plan related to pension relevant salary up to the Social Security Ceiling (SSC) and a supplementary plan covering benefits attributed on pension relevant salary above the Social Security Ceiling. Additionally, Agfa is obliged to provide pension plans according to the Collective Labor Agreement (CLA) regu- lation of the Chemical Sector. In Germany, Agfa has two main pension plans: the ‘old pension plan’ that was closed to new entries as from 2005 and the ‘new pension plan’ applicable to employees joining as from 2005. The ‘old pension plan’ was closed to future benefit accrual as of December 31, 2009 and the participating employees joined the ‘new pension plan’ for future benefit accrual on enhanced benefit terms. Both plans comprise a basic and a supplementary plan.
Under the ‘old pension plan’, the basic plan is managed by the Bayer Pensionskasse (Penka). The Bayer Pensionskasse is a multi-employer plan accounted for as if it were a defined contribution plan (IAS 19.34 (a)). The plan is a defined benefit plan under control of the Group’s former parent company Bayer AG. It is accounted for as a defined contri- bution plan as the Group has no right to obtain the necessary data for defined benefit plan accounting. In case of a deficit, this plan may expose the Group to investment and actuarial risk. The Group however considers these risks insignificant. From 2004 onwards, Agfa has been responsible for adjustments to the pension payments processed by the Bayer Pensionskasse in accordance with Sec. 16, 1 and 2 of the German Pension Act (BetrAVG – Betriebsrenteng- esetz). The base pension including the adjustments processed according to the aforementioned legal regulations up until 2003 are paid by the Penka directly. Consequently, the defined benefit liability disclosed in Agfa’s accounts in respect of this basic plan solely relate to the post-2003 adjustments to the pension payments.
The benefits accrued under the supplementary plan are accounted for as a defined benefit plan. They are based on ‘contributions’ (1) calculated as a fixed percentage of pensionable salary above the SSC. Then, an age independent factor is used for converting those ‘contributions’ (1) into individual pension entitlements.
The new pension plan includes a basic pension plan, i.e. benefits entitlements on pensionable salary up to the SSC, and a supplementary pension plan accruing benefits on pensionable salary above the SSC. The basic plan is funded through contributions paid to the Rheinische Pensionskasse. Employees contribute to the Rheinische Pensionskasse by deferred compensation. Once the contributions have been paid to the Rheinische Pensionskasse, in principle the group companies have no further payment obligation. This plan is consequently accounted for as a defined contribu- tion plan. The new supplementary plan, which is accounted for on the balance sheet as a direct pension commitment, has no upper ceiling for pensionable salary. The benefits accrued under the supplementary plan are based on ‘contributions’ (1) calculated as a fixed percentage of pensionable salary above the SSC. In contrast to the old pension plan, ‘contributions’ (1) to the new supplementary pension plan are then converted into pension entitlements based on age-dependent pension factors and considering a pre-determined annual increase of those entitlements. As of 2012, the plan introduced an option to pay out lump sums instead of monthly pension payments. Employees who participated in the ‘old pension plan’ when it was closed to future accrual as of December 31, 2009, receive supplementary pension entitlements based on a matching ‘fifty-fifty’ approach meaning that the employer pays contributions to the extent of the employee contributions. The structure itself is similar to the new supplemen- tary pension plan as described above. The pension plan according to the CLA of the Chemical Sector is based on ‘contributions’ (1) that are converted into individual pension entitlements using age-dependent pension factors. Employees also contribute to this plan by deferred compensation. In Germany, Agfa has a number of smaller plans from previous corporate acquisitions. These plans are all closed to future benefit accrual. The defined benefit liability in Germany also includes pension plans that are fully based on deferred compensation models. The benefits accrued under these plans are based on the annually deferred compensation amount of each beneficiary converted into pension entitlements and in some cases additionally considering a pre-determined annual increase of those entitlements. For HealthCare IT employees, there are pension plans managed by different external funds (‘Pensionskassen’). These plans are mainly financed by deferred compensation models and are accounted for as defined contribution plans. Additionally, top management of Agfa HealthCare IT in Germany is provided with a salary related pension scheme, processed by a congruently funded multi-employer plan (‘kongruent rückgedeckte Unterstützungskasse’). The different defined retirement benefit plans expose the Company to actuarial risks such as interest rate risk, pension indexation risk and longevity risk. The expense for the German defined contribution plans is included in the amount disclosed in Note 13.1 with regard to the Group’s material countries.
As from 2010, the Agfa UK Pension Plan has been fully closed. As from 2022, its participating employer is limited to Agfa-Gevaert NV (previously also Agfa HealthCare UK Ltd and Agfa Graphics Ltd). The plan members are eligible for a benefit based on a final average pay formula. From the age of 55, benefits accrued under this plan can be paid partly in cash with the remainder paid in monthly payments.
(1) ‘Contributions’ in this context means a calculation base which is used to finally determine the pension entitlements.
If the benefit is taken before the normal retirement age of 65 there is an actuarial reduction of the benefit’s value. Deferred plan members are entitled to an inflation increase, based on CPI (Consumer Price Index), of their accrued benefits until retirement payments are taken. Pension payment increases are generally in line with RPI (Retail Price Index) with a minimum increase of 3% and a maximum increase of 5%. Next to inflation risk, the frozen defined benefit plan exposes the Company to actuarial risks such as investment risk, interest rate risk and longevity risk. The defined benefit plan is governed by a benefit trust whose decision making body is a Board of Trustees. They have a fiduciary duty to act solely in the best interests of the beneficiaries according to the trust rules and UK law. The required funding is determined by a funding valuation carried out every three years based on legal requirements and funding valuation assumptions that meet the UK regulatory body’s current requirements and are also agreed between the Company and the Trustees. The last full actuarial valuation was undertaken in 2021, following the payment of a 90 million pound sterling contribution to the Plan by the Company.# AGFA-GEVAERT ANNUAL REPORT 2023
The following three tables show a reconciliation from the opening balances to the closing balances for the net defined benefit liability and its components.
| Retirement plans Belgian DC-plans (excl. Belgian DC-plans) | Retirement plans Belgian DC-plans with return guaranteed by law | TOTAL | Retirement plans Belgian DC-plans (excl. Belgian DC-plans) | Retirement plans Belgian DC-plans with return guaranteed by law | TOTAL | |
|---|---|---|---|---|---|---|
| MILLION EURO | ||||||
| Net liability at January 1 | 670 | 5 | 674 | 493 | 10 | 503 |
| Defined benefit cost included in profit or loss | 28 | 15 | 44 | 32 | 9 | 41 |
| Total remeasurements included in OCI | (150) | 5 | (145) | 15 | 1 | 15 |
| Net transfer in/(out), including impact of business combinations and divestitures | (2) | - | (2) | (45) | (1) | (46) |
| Cash flows | ||||||
| Employer contributions | (16) | (15) | (31) | (17) | (11) | (28) |
| Benefits paid directly by the company | (39) | - | (39) | (38) | - | (38) |
| Currency effects: charge (or credit) | 2 | - | 2 | (1) | - | (1) |
| Net liability at December 31 | 493 | 10 | 503 | 439 | 7 | 446 |
The net transfer out in 2023 relates to the sale of the Offset Solutions business in April 2023. The net transfer in 2022 relates to the outsourcing of the Group’s Information and Communications Services (including transferring employees and the associated pension liabilities) to Atos during 2022.
| Retirement plans Belgian DC-plans (excl. Belgian DC-plans) | Retirement plans Belgian DC-plans | TOTAL | Retirement plans Belgian DC-plans (excl. Belgian DC-plans) | Retirement plans Belgian DC-plans | TOTAL | |
|---|---|---|---|---|---|---|
| MILLION EURO | ||||||
| Service cost | ||||||
| Service cost, exclusive of employee contributions | 18 | 15 | 33 | 12 | 9 | 20 |
| Past service cost | - | - | - | - | - | - |
| (Gain) loss on settlements | - | - | - | - | - | - |
| Total service cost | 18 | 15 | 33 | 12 | 9 | 20 |
| Net interest cost | ||||||
| Interest expense on DBO | 25 | 2 | 27 | 52 | 5 | 57 |
| Interest (income) on plan assets | (17) | (2) | (20) | (34) | (5) | (39) |
| Total net interest cost | 8 | - | 7 | 18 | - | 18 |
| Administrative expenses and taxes | 2 | - | 3 | 2 | - | 3 |
| DEFINED BENEFIT COST INCLUDED IN PROFIT OR LOSS | 28 | 15 | 44 | 32 | 9 | 41 |
| Actuarial losses (gains) | ||||||
| Experience losses (gains) on plan liabilities | 45 | (14) | 31 | (16) | (9) | (25) |
| Demographic assumptions | - | 1 | 1 | (16) | (2) | (17) |
| Financial assumptions | (463) | (37) | (500) | 57 | 5 | 62 |
| Return on plan assets excl. Interest income | 268 | 56 | 323 | (14) | 7 | (7) |
| Total remeasurements included in OCI | (150) | 5 | (145) | 12 | 1 | 12 |
| TOTAL DEFINED BENEFIT COST RECOGNIZED IN PROFIT OR LOSS AND OCI | (122) | 20 | (102) | 44 | 10 | 53 |
The total defined benefit cost recognized in Profit or Loss and Other Comprehensive Income (OCI) for 2023 for the Group’s material countries amounted to 53 million euro (2022: credit of 102 million euro). Of this amount, 41 million euro expense is reflected in the Group’s Consolidated Statement of Profit or Loss over 2023 (2022: 44 million euro expense). The balance, being a cost of 12 million euro for 2023 (a credit of 145 million euro for 2022) is reflected in OCI under ‘Remeasurements of the net defined benefit liability’. These remeasurements originate from experience gains on plan liabilities, changes in demographic and financial assumptions as well as from experience adjustments on the fair value of assets. The losses due to changes in financial assumptions in 2023 are principally due to the decrease in the discount rate over the year.
The liabilities and defined benefits cost of the Group’s retirement plans are determined using actuarial valuations that involve several actuarial assumptions. At the end of the reporting periods 2022 and 2023, the following principal actuarial assumptions (weighted averages) have been used:
| December 31, 2022 | December 31, 2023 | |
|---|---|---|
| Discount rate | 4.33% | 3.77% |
| Price inflation | 2.36% | 2.35% |
The above stated average discount rates and long-term price inflation rates have been determined based on the actuarial assumptions applied in the different defined benefit plans of the Group’s material countries weighted by the defined benefit obligation of the respective plan. The weighted average price inflation relates to Belgium, Germany, and the UK (RPI). Inflation over the year 2022 was included in the base data used for the actuarial calculations and is therefore not reflected in the evolution of price inflation compared to last year.
The defined benefit obligation, plan assets and funded status for the Group’s material countries are shown below.
| Belgian Retirement plans (excl. Belgian DC-plans) | Belgian DC-plans with return guaranteed by law | TOTAL | Belgian Retirement plans (excl. Belgian DC-plans) | Belgian DC-plans with return guaranteed by law | TOTAL | |
|---|---|---|---|---|---|---|
| MILLION EURO | ||||||
| Change in defined benefit obligation | ||||||
| Defined benefit obligation at January 1 | 1,767 | 191 | 1,959 | 1,270 | 134 | 1,404 |
| Service cost | ||||||
| Current service cost, exclusive of employee contributions | 18 | 15 | 33 | 12 | 9 | 20 |
| Past service cost | - | - | - | - | - | - |
| (Gain)/loss on settlements | - | - | - | - | - | - |
| Interest expense | 25 | 2 | 27 | 52 | 5 | 57 |
| Cash flows | ||||||
| Benefit payments | (92) | (16) | (108) | (95) | (10) | (105) |
| Employee contributions | - | - | - | - | - | - |
| Premiums paid | - | - | - | - | - | - |
| Increase (decrease) due to transfers, including impact of business combinations and divestitures | (15) | (8) | (23) | (67) | (19) | (85) |
| Remeasurements | ||||||
| Effect of changes in demographic assumptions | - | 1 | 1 | (16) | (2) | (17) |
| Effect of changes in financial assumptions | (463) | (37) | (500) | 57 | 5 | 62 |
| Effect of experience adjustments | 45 | (14) | 31 | (13) | (9) | (22) |
| Currency effects: charge (or credit) | (15) | - | (15) | 4 | - | 4 |
| Defined benefit obligation at December 31 | 1,270 | 134 | 1,404 | 1,204 | 112 | 1,317 |
| Change in plan assets | ||||||
| Fair value of assets at January 1 | 1,098 | 187 | 1,284 | 777 | 124 | 901 |
| Interest income | 17 | 2 | 20 | 34 | 5 | 29 |
| Employer contributions | 55 | 15 | 70 | 17 | 11 | 28 |
| Employee contributions | - | - | - | - | - | - |
| Benefit payments | (92) | (16) | (108) | (95) | (10) | (105) |
| Administrative expenses and taxes | (2) | - | (3) | (2) | - | (2) |
| Premiums paid | - | - | - | - | - | - |
| Increase (decrease) due to transfers, including impact of business combinations and divestitures | (14) | (8) | (22) | (22) | (18) | (40) |
| Return on plan assets (excluding interest income) | (268) | (56) | (323) | 14 | (7) | 7 |
| Currency effects: (charge) or credit | (17) | - | (17) | 5 | - | 5 |
| Fair value of assets at December 31 | 777 | 124 | 901 | 765 | 105 | 870 |
| Funded status at December 31 | ||||||
| Funded status | 493 | 10 | 503 | 439 | 7 | 446 |
| Effect of asset ceiling/onerous liability | - | - | - | - | - | - |
| Net liability (asset) at December 31 | 493 | 10 | 503 | 439 | 7 | 446 |
At December 31, 2023, the total defined benefit obligation for the Group’s material countries, excluding defined contribution plans with return guaranteed by law, amounted to 1,204 million euro (1,270 million euro at December 31, 2022). Of this amount, 751 million euro (789 million euro at December 31, 2022) is related to wholly or partly funded plans and 453 million euro (481 million euro at December 31, 2022) is related to unfunded plans. At December 31, 2023, the financing deficit for the Belgian defined contribution plans with guaranteed return amounted to 7 million euro (10 million euro at December 31, 2022). The net pension liability for these plans is calculated as the difference between the present value of the defined benefit obligation (DBO) amounting to 112 million euro (134 million euro at December 31, 2022) and the fair value of the plan assets amounting to 105 million euro (124 million euro at December 31, 2022). It is to be noted that for the Belgian defined contribution plans, the deferred vested rights of the people that have left the Company are not comprised in the defined benefit obligation as shown in the table above nor the related fair value of plan assets. Both are estimated to amount at 55.5 million euro.The discount rates used are determined by reference to the rates available on high-quality corporate bonds, that have a credit rating of at least AA from a main rating agency, that have maturity dates approximating the terms of the Group’s obligations.
Weighted average duration
The Group has consistently calculated the weighted average duration by taking the average of the durations obtained via sensitivities on the discount rate for the retirement plans of the Group’s material countries. At December 31, 2023, the weighted average duration is 9.9 years (10.3 years at December 31, 2022).
Sensitivity analysis
The following information illustrates the sensitivity to a change as at December 31, 2023 in certain assumptions for the retirement plans of the Group’s material countries.
Effect on December 31, 2023 MILLION EURO
| 50 bp decrease in discount rate | 50 bp increase in discount rate | Change in mortality table, assuming employees live one year longer | Change in mortality table, assuming employees live one year shorter | |
|---|---|---|---|---|
| Defined benefit obligation | 6650 | (60) | 36 | (34) |
For the Group’s material countries, plan assets comprise following major asset classes:
MILLION EURO
| December 31, 2022 | December 31, 2023 | |
|---|---|---|
| Cash, cash equivalents and other | 26 | 21 |
| Equity instruments | 112 | 105 |
| Debt instruments | 308 | 301 |
| Investment funds | - | 9 |
| Assets held by insurance company | 455 | 435 |
| TOTAL | 901 | 870 |
(1) Mainly Belgian ‘DC’ plans with return guaranteed by law, and the annuity buy-in contracts in the UK.
The buy-in policies held by the UK plan cover all pensioner members and substantially all deferred members (316 million euro at December 31, 2023). For the equity and debt instruments the Group applies a passive or semi-passive management (index tracking) approach. At 2022 and 2023 year-ends, the fair value of assets does not comprise equity or debt instruments of the Company or its subsidiaries.
For 2024, the Group expects for the defined benefit plans of its material countries a total defined benefit cost in profit or loss of 37 million Euro, comprising of 20 million euro service cost (of which 10 million euro related to defined con- tribution plans in Belgium), 2 million euro administrative expenses and taxes and 14 million euro net interest costs. During the 2024 fiscal year, the Group expects to contribute 15 million euro to its material funded retirement plans (compared to 17 million euro in 2023). This amount excludes the estimated contribution payments for the defined contribution plans in Belgium amounting to 13 million euro (2023: 11 million euro). Additionally, the Group expects to make direct benefit payments totaling 39 million euro to beneficiaries of its material unfunded retirement plans (compared to 38 million euro in 2023).
Long-term termination benefits result from the Group’s commitment to either terminate the employment before the normal retirement date or provide termination benefits as a result of an offer made to encourage voluntary redun- dancy. At December 31, 2023, long-term termination benefits amounted to 6 million euro (5 million euro at December 31, 2022) and mainly relate to severance payments in connection with early retirement arrangements with employees of the Group’s Belgian entities.
In the course of 2020, the Board of Directors has appointed Mr. Pascal Juéry as CEO of the Agfa-Gevaert Group and Managing Director. Mr. Juéry is eligible for a long-term variable compensation, embedded in a Stock Appreciation Rights Plan that can result in an additional cash bonus. The key components of the Stock Appreciation Rights Plan are the following:
The fair value of the Stock Appreciation Rights Plan is calculated using a Black & Scholes model with expected life of 10 years for the first two tranches and with an expected life of five years for the other tranches and is presented as a liability with corresponding changes in fair value recognized in profit or loss (2023: 0.2 million euro; 2022: -0.1 million euro).
In the course of 2023 and 2022, a long-term variable compensation, embedded in a Stock Appreciation Rights Plan that can result in an additional cash bonus, was granted to key personnel members of the Group.
The key components of this Stock Appreciations Rights Plan are the following:
The fair value of the Stock Appreciation Rights Plan is calculated using a Black & Scholes model with expected life of five years and is presented as a liability with corresponding changes in fair value recognized in profit or loss (2023: 0.1 million euro; 2022: -0.2 million euro). The total liability related to the share appreciation rights amounts to 0,6 million euro at December 31, 2023 (2022: 0.9 million euro).
The split between long-term and short-term employee benefits is presented in the table below:
MILLION EURO
| 2022 | 2023 | |
|---|---|---|
| Long-term employee benefits | 9 | 5 |
| Short-term employee benefits | ||
| Liabilities for social expenses | 19 | 14 |
| Payroll liabilities | 4 | 1 |
| Other short-term liabilities | 72 | 58 |
| TOTAL | 105 | 78 |
Long-term employee benefits comprise a long-term disability plan in the US, the plans ‘Jubilee’ and ‘Pensionsurlaub’ in Germany, ‘Jubilee’ benefits in Belgium and some other long-service leave and service awards. At December 31, 2023, these amounted to 5 million euro (9 million euro at December 31, 2022). Other short-term employee benefits comprise liabilities set up for all commitments relating to the workforce in the broadest sense such as accruals for vacation entitlements and flexi-time surpluses, continuation of wage and salary payments in the event of sickness amounts payable within 12 months, short-term disability benefits, accruals for bonuses of all kinds, payments under profit-sharing plans.
The Group is subject to income taxes in numerous jurisdictions. Uncertainties exist with respect to the interpretations of complex tax regulations in the respective countries. The Group establishes accruals for anticipated tax audit issues based on reasonable estimates of whether additional taxes will be due, considering various factors such as experience with previous tax audits and differing legal interpretations by the taxable entity and the responsible tax authority. Differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate adjustments to tax income and expense in future periods. The Group is closely following up on tax developments at OECD (Pillars 1 and 2), EU (Pillar 2, BEFIT, others) as these measures may have an impact on the tax position in the longer term. The impact of the amendments to IAS 12 Income Taxes: International Tax Reform – Pillar Two Model Rules (issued on May 23, 2023) has been disclosed under Note 5 ‘Changes in significant accounting policies’.# . RELATIONSHIP BETWEEN INCOME TAX EXPENSE AND PROFIT (LOSS) BEFORE INCOME TAXES
| MILLION EURO | 2022 re-presented | 2023 |
|---|---|---|
| Profit (loss) before income taxes | (157) | (35) |
| Income tax expense | 29 | 16 |
| Tax rate | -18.3% | 47.1% |
| MILLION EURO | 2023 |
|---|---|
| Profit (loss) before income taxes | (35) |
| Theoretical income tax expense (income) | (7) |
| Theoretical tax rate | 21% |
| Disallowed items | 4 |
| Impact of tax credits and other deduction from tax basis | (2) |
| Tax losses of the year for which no deferred tax asset has been recorded | 42 |
| Prior year adjustments | (3) |
| Tax expense/(income) due to movement in deductible temporary differences for which no deferred tax asset was recorded | (21) |
| Withholding taxes | 1 |
| Other | 2 |
| Income tax expense | 16 |
| Effective tax rate | -47.1% |
(1) The theoretical tax rate is the weighted average tax rate of the Company and all subsidiaries included in the consolidation.
Discontinued | 2022 | operations | 2022 | re-presented
MILLION EURO | 2022 | operations | 2022 | re-presented
Profit (loss) before income taxes | (181) | 24 | (157)
Theoretical income tax expense (income) | (45) | - | (1)
Theoretical tax rate | 24.8% | |
Disallowed items | 9 | |
Impact of tax credits and other deduction from tax basis | (1) | |
Tax losses and deductible temporary differences of the year for which no deferred tax asset has been recorded | 34 | |
Tax losses used this year for which no deferred tax asset was recorded | (3) | |
Tax expense/(income) recorded on losses of previous years | 3 | |
Prior year adjustments | 3 | |
Withholding taxes | 3 | |
Impairments on goodwill and other assets for which no deferred tax asset has been recorded | 21 | |
Valuation loss on previously recognized deferred tax assets on temporary differences | 15 | |
Impact of adjustment in deferred tax rates | 2 | |
Other | 1 | |
Income tax expense attributable to discontinued operations | (13) | |
Income tax expense | 42 | (13) | 29
Effective tax rate | -23.4% | | -18.3%
(1) The theoretical tax rate is the weighted average tax rate of the Company and all subsidiaries included in the consolidation.
| MILLION EURO | December 31, 2021 | Change in consolidation scope | Recognized in profit or loss | Recognized in other comprehensive income | Translation reserves | December 31, 2022 | Change in consolidation scope | Recognized in profit or loss | Recognized in other comprehensive income | Translation reserves | December 31, 2023 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Intangible assets and goodwill | 25 | - | 1 | - | 1 | 28 | (5) | - | - | - | 23 |
| Property, plant and equipment | 2 | - | (6) | - | - | (3) | (3) | 8 | - | - | 3 |
| Right-of-use assets | (17) | - | 2 | - | - | (15) | 4 | 2 | - | - | (9) |
| Inventories | 17 | - | (1) | (1) | 14 | (1) | (2) | (1) | 10 | ||
| Lease receivables | (7) | - | - | (6) | (5) | - | (11) | ||||
| Trade and other receivables | 6 | - | - | 5 | (1) | (1) | - | 1 | |||
| Provisions and liabilities for post-employment benefits | 36 | - | 2 | (23) | 15 | (2) | (1) | 3 | 14 | ||
| Lease liabilities | 18 | - | (3) | - | 14 | (4) | (2) | - | 9 | ||
| Other current assets and other liabilities | (2) | (1) | 6 | - | (1) | 1 | 1 | (1) | - | 1 | |
| Deferred tax assets and liabilities related to temporary differences | 78 | (2) | - | (23) | (1) | 52 | (11) | (2) | 3 | (2) | 40 |
| Tax loss carry-forwards | 38 | - | (11) | - | 27 | (5) | - | 22 | |||
| Excess tax credits | 3 | - | (1) | - | 3 | - | 3 | ||||
| Deferred tax assets/liabilities | 118 | (2) | (12) | (23) | (1) | 82 | (11) | (7) | 3 | (2) | 65 |
The deferred tax asset on provisions and liabilities for post-employment benefits which is recognized in other com- prehensive income is related to the remeasurements of the net defined benefit liability (IAS 19R).## NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other tax receivables amount to 20 million euro (2022: 28 million euro) and other tax liabilities amount to 24 million euro (2022: 32 million euro). Other tax receivables and liabilities relate to other tax, such as VAT and other indirect taxes. Other tax receivables are offset against other tax liabilities when they relate to taxes levied by the same taxation authority, there is a legal right to offset and are intended to be settled on a net basis.
During 2023, the Group made no acquisitions.
In June 2022, the Agfa Group acquired Inca Digital Printers. The acquisition encompassed the portfolio of existing high-speed multi pass printers, including a strong service organization, a newly designed line of single-pass printers for several packaging applications as well as a joint development of a customized in-line print engine in collaboration with leading corrugator manufacturer BHS Corrugated. Inca Digital Printers is a Cambridge UK based leading developer and manufacturer of advanced high-speed printing and production technologies for sign & display applications as well as for the rapidly growing digital printing market for packaging. Inca Digital Printers is an ideal partner for Agfa, bringing a complementary portfolio of printing solutions of the highest standard and a strong technological platform to launch robust single pass printing presses for the packaging market. The acquisition comprised a share-deal of 100% of the shares of two UK based companies, an asset deal of the USA business and the purchase of assigned intellectual property. The purchase price amounts to 54 million euro. Intangible assets identified relate to trademarks, being the brandnames Inca and Onset; the technological IP, being the onset multi-pass technology which have both been valued using the relief from royalty method. Technological IP rights will be amortized over a period of seven years. The brandnames will be amortized over an estimated useful life of six years. The acquired ‘assigned intellectual property’ will be amortized over a period of ten years. The goodwill on acquisition (2 million euro) mainly relates to operating synergies and workforce. The goodwill is not expected to be deductible for tax purposes. Inventories have been valued at fair value being the estimated selling price in the ordinary course of business less estimated costs of completion and sale and a reasonable profit margin based on the effort required to sell the inventory. The amounts of revenue of the acquiree from acquisition date till end of December 2022 amount to 18 million euro and the net loss amounts to 5 million euro. This loss was in line with management expectations based on decision to shift the Inca Digital Printers printers to Agfa inks, for which first sales will be recognized in 2023. On top, due to the fact that the acquired inventories have been valued at fair value less costs to sell, no margin has been realized on these sales. Management strongly believes that the Inca Digital Printers acquisition will create new growth opportunities. Acquisition related costs were immaterial. The gross contractual amount of the receivables acquired amount to 4 million euro which equals its fair value. There are no acquired receivables at acquisition date for which the contractual cash flows are not expected to be received.
The acquisition had the following effect on the consolidated statement of financial position and the consolidated statement of cash flows:
| 2022 (MILLION EURO) Inca Digital Printers | |
|---|---|
| Intangibles with finite useful life | |
| Trademarks | 2 |
| Assigned Intellectual Property | 19 |
| Acquired technology | 3 |
| Property, plant and equipment | 1 |
| Right-of-use assets | 8 |
| Inventories | 18 |
| Trade receivables | 4 |
| Contract assets | 2 |
| Trade payables | (3) |
| Contract liabilities | (4) |
| Other tax receivables | 5 |
| Other current assets | 1 |
| Other receivables | 1 |
| Other tax liabilities | (5) |
| Cash and cash equivalents | 10 |
| Lease liabilities | (8) |
| Provisions | (1) |
| Total identifiable net assets acquired | 52 |
| Goodwill amount recognized | 2 |
| Consideration paid | (54) |
| Consideration paid during 2022 | (57) |
| Deferred purchase price received in 2023 | 3 |
| Cash acquired | 10 |
| Net cash outflow for acquisitions in 2022 | (48) |
| Net cash inflow for acquisitions in 2023 | 3 |
On April 4, 2023, the Agfa-Gevaert Group completed the sale of its Offset Solutions division to the investment firm Aurelius Group at a consideration of 46 million euro. In the second quarter of 2023 an amount of 11 million euro was received which brings the outstanding receivable to 35 million euro which is presented in other receivables (see Note 33) on the balance sheet. The payment of the outstanding receivable is depending on the due completion of certain procedures as agreed with Aurelius. These procedures stipulate that Agfa-Gevaert provides Aurelius with the final purchase price calculation. Aurelius has formulated some comments on this calculation. The Company has recognized its consideration receivable based on its initial assessment of the relevance of those comments. The sale of the Offset Solutions division is an important step in the transformation journey of Agfa. This transaction will allow Agfa to focus on other growing market segments, which is crucial for future success. Under the terms of the share purchase agreement with Aurelius Group, the Agfa-Gevaert Group continues to provide certain consumables (including film) and services to its former division. In the financial statements of the Group this is presented in a new division called ‘Contractor Operations & Services former Offset’ or ‘CONOPS’. CONOPS represents the supply of film and chemicals as well as a set of support services delivered by Agfa to Offset Solutions.
As of April 2023, the segment CONOPS represents income charged to the external party ECO3 and the related costs. Revenue represents the supply agreements, with the corresponding cost of sales. The income related to the support services is presented in other income, the corresponding costs are shown in the different SG&A lines. The comparative results for 2022 and the data for the first quarter 2023 are re-presented to reflect the post-closing relationships between the Agfa-Gevaert Group and the Aurelius Group. Whereas revenue as from the second quarter of 2023 results from invoicing to the third party ECO3, the revenues re-presented for 2022 and the first quarter of 2023 reflect the relationship with the ‘discontinued operations’. In the Consolidated Statements of profit or loss and other comprehensive income the impact of the discontinued operations is presented separately from the continuing operations. The sale had the following effect on the Group’s financial statements:
| Result of discontinued operations (MILLION EURO) | 2022 | 2023 |
|---|---|---|
| Revenue | 778 | 163 |
| Cost of sales | (592) | (118) |
| Gross profit | 187 | 45 |
| Selling expenses | (70) | (16) |
| Research and development expenses | (21) | (5) |
| Administrative expenses | (32) | (8) |
| Other operating expenses | (85) | (18) |
| Results from operating activities | (22) | (1) |
| Interest income (expense) - net | - | - |
| Other finance income (expense) - net | (1) | - |
| Income tax expense | (13) | (5) |
| Profit (loss) for the period | (37) | (6) |
| Loss on the sale of discontinued operations | - | (42) |
| Profit (loss) from discontinued operations - net of tax | (37) | (49) |
Effect of disposal on the financial position of the Group:
| ASSETS | (MILLION EURO) |
|---|---|
| Trade receivables | 141 |
| Other assets | 6 |
| Deferred tax assets | 11 |
| Inventories | 155 |
| Current income tax assets | 2 |
| Other tax receivables | 7 |
| Other financial assets | - |
| Other receivables | 5 |
| Other current assets | 5 |
| Cash and cash equivalents | 13 |
| TOTAL ASSETS | 344 |
| LIABILITIES | |
| Liabilities for post-employment benefits | 51 |
| Lease liabilities | 16 |
| Loans and borrowings | 4 |
| Other loans and borrowings IC: current accounts positions with Group entities outside the disposal Group | 10 |
| Provisions | 9 |
| Deferred tax liabilities | - |
| Trade payables | 93 |
| Contract liabilities | 16 |
| Current income tax liabilities | 8 |
| Other tax liabilities | 5 |
| Other payables | - |
| Employee benefits | 22 |
| TOTAL LIABILITIES | 233 |
| NET ASSETS DISPOSAL GROUP | 111 |
| of which related to non-controlling interests | (32) |
| of which related to other loans and borrowings IC | 10 |
| TOTAL CONSOLIDATED NET ASSETS DISPOSED OF | 90 |
| Cash and cash equivalents - current accounts receivable | (10) |
| Unsettled intercompany receivable - net | (1) |
| Intercompany positions (assets) of the Group against the disposal group, presented as part of the consideration receivable | (11) |
| CONSIDERATION | 46 |
| Consideration received | 11 |
| Net cash disposed off | (13) |
| Cash outflow for directly attributable costs | (3) |
| Cash outflow from disposal net of cash disposed of and net of directly attributable costs | (4) |
| Release of exchange differences of discontinued operations to profit or loss | 2 |
| Directly attributable costs | - |
| LOSS ON THE SALE OF DISCONTINUED OPERATIONS | (42) |
| Impairment of assets and costs directly related to the transaction, recognized in 2022 | (46) |
The 2023 net cash flows attributable to the operating, investing and financing activities from discontinued operations is provided in the Statements of consolidated cash flows.
On April 7 2022, Agfa and Atos concluded its partnership according to which Atos will accompany Agfa in its digital transformation as announced in the last quarter of 2021. Atos will provide and manage a major part of Agfa’s internal IT services and will support the company’s digital journey. As a global imaging technology and IT leader, Agfa has engaged in an ambitious IT transformation program, striving for a simple, agile and future-proof digital organization.# AGFA-GEVAERT ANNUAL REPORT 2023
Through this strategic move, Agfa will benefit from Atos’ long-lasting expertise to implement an innovative and modern IT landscape, while optimizing its IT cost in all of its countries of operations. Atos will implement first-class solutions, including mainframe services, hosting, workplace management, cloud solutions and network. Atos’ solutions will also include a range of key application-related services and transformational projects aiming at simplifying, standardizing and modernizing the Agfa IT landscape, including harmonization of Agfa’s ERP, CRM, HR and digital workplace solutions. By personalizing and significantly enhancing the IT experience for the employees of Agfa, Atos will allow them to enjoy the highest level of employee experience in the sector and help them to further innovate for their clients.
| MILLION EURO | 2022 |
|---|---|
| Liabilities for post-employment benefit plans | 2 |
| Provision | 2 |
| Current employee benefits | 2 |
| Net liabilities divested | 5 |
| Consideration | (5) |
| Cash outflow from disposal | (5) |
In the normal course of its business, the Group is exposed to a number of financial risks such as currency risk, interest rate risk, commodity price risk, liquidity risk and credit risk that could affect its financial position and its result of operations. The Group’s objectives, policies and processes in managing these financial risks are described further in this note. In managing these risks, the Group may use derivative financial instruments. The use of derivative financial instruments is subject to internal controls and uniform guidelines set up by the Group’s Treasury Committee. Derivatives used are over-the-counter instruments, particularly forward exchange contracts.
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The foreign currency risk management distinguishes between three types of foreign currency risk: foreign currency transaction risk, foreign currency translation risk and foreign currency economic risk.
The Group incurs foreign currency transaction risk on accounts receivable, accounts payable and other monetary items that are denominated in a currency other than the Company’s functional currency. Foreign currency transaction risk in the Group’s operations also arises from the variability of cash flows in respect of forecasted transactions.
Foreign operations which do not have the euro as their functional currency give rise to a translation risk. The foreign currency economic risk is the risk that future cash flows and earnings generated by foreign operations may vary. Foreign currency economic risk is highly connected with other factors such as the foreign operations’ competitive position within an industry, its relationship with customers and suppliers.
In monitoring the foreign currency risk exposures, the central treasury department focuses on the transaction and translation risk exposures whereas business management seeks to manage the foreign economic risk through natural hedges.
Each of the above types of foreign currency risk exposure impacts the financial statements differently.
The following significant exchange rates have been applied:
| Yearly average rate 2022 | Yearly average rate 2023 | Year-end closing rate 2022 | Year-end closing rate 2023 | |
|---|---|---|---|---|
| EUR/USD | 1.053899 | 1.08158 | 1.0666 | 1.105 |
| EUR/GBP | 0.852622 | 0.869907 | 0.88693 | 0.86905 |
| EUR/CNY | 7.080221 | 7.65907 | 7.3582 | 7.8509 |
| EUR/CAD | 1.370356 | 1.459581 | 1.444 | 1.4642 |
| EUR/AUD | 1.517361 | 1.628477 | 1.5693 | 1.6263 |
| EUR/INR | 82.713808 | 89.324864 | 88.171 | 91.9045 |
| EUR/HKD | 8.251409 | 8.467553 | 8.3163 | 8.6314 |
The central treasury department monitors and manages foreign currency exposure from the view of its impact on either the statement of financial position or profit or loss.
The currencies that primarily impact the net foreign currency exposure on the statement of financial position are as follows:
December 31, 2022
| MILLION FOREIGN CURRENCY | Net exposure of receivables and payables | Hedging of loans and deposits | Derivative financial instruments | Net position |
|---|---|---|---|---|
| USD | 28.7 | 26.6 | (48.7) | 6.6 |
| CNY | 154.0 | (143.1) | - | 10.9 |
| GBP | 9.5 | (13.2) | - | (3.7) |
| CAD | (4.9) | 2.7 | - | (2.2) |
| AUD | 2.6 | (1.4) | - | 1.2 |
| INR | 768.5 | - | (993.0) | (224.5) |
| HKD | 6.1 | (6.1) | - | - |
December 31, 2023
| MILLION FOREIGN CURRENCY | Net exposure of receivables and payables | Hedging of loans and deposits | Derivative financial instruments | Net position |
|---|---|---|---|---|
| USD | 35.5 | 21.3 | (51.2) | 5.6 |
| CNY | 40.6 | (52.2) | - | (11.6) |
| GBP | 3.7 | 5.3 | - | 9.0 |
| CAD | (9.0) | (1.6) | 4.3 | (6.3) |
| AUD | 1.1 | (1.1) | - | - |
| INR | 583.4 | - | (611.0) | (27.6) |
| HKD | 2.5 | (1.4) | - | 1.1 |
The Group uses cash, cash equivalents, loans and deposits held in a foreign currency as natural hedges of the net exposure of receivables and payables held in these respective currencies. The aim of Group’s management regarding transaction exposure in the statement of financial position is to minimize, over the short term, the revaluation results – both realized and unrealized – of items in the statement of financial position that are denominated in a currency other than the Company’s functional currency. In order to keep the exposures within predefined risk adjusted limits, the central treasury department economically hedges the net outstanding monetary items in the statement of financial position in foreign currency using derivative financial instruments such as forward exchange contracts. As of December 31, 2023, the outstanding derivative financial instruments are mainly forward exchange contracts with maturities of generally less than one year. Where derivative financial instruments are used to economically hedge the foreign exchange exposure of recognized monetary assets or liabilities, no hedge accounting is applied. Changes in the fair value of these derivative financial instruments are recognized in profit or loss.
When the functional currency of the entity that holds the investment is different from the functional currency of the related subsidiary, the currency fluctuations on the net investment directly affect other comprehensive income (‘Translation reserve’) unless any hedging mechanism exists. All subsidiaries have as functional currency the currency of the country in which they operate. The currencies giving rise to the Group’s translation risk in the statement of financial position are primarily the American dollar, Brazilian real, Indian roepie, Canadian dollar and Argentina peso.
Net investment in a foreign entity
| MILLION FOREIGN CURRENCY | December 31, 2022 | December 31, 2023 |
|---|---|---|
| USD | 184 | 105 |
| INR | 592 | 725 |
| BRL | 62 | 53 |
| CAD | 254 | 246 |
| ARS | 899 | 1,973 |
The central treasury department monitors the translation exposure in the statement of financial position of the Group at least on a quarterly basis. The Treasury Committee proposes corrective actions if needed to the Executive Management.
Foreign currency risk in profit or loss includes both the risk of the variability of cash flows in respect of forecasted transactions as a result of changes in exchange rates and the risk that the profit (loss) for the year generated by foreign operations may vary in amount when translated into the presentation currency (euro). The central treasury department monitors and manages both risks simultaneously. The currencies that primarily impact the net foreign currency exposure in profit or loss are American dollar, Chinese yuan, Canadian dollar, British pound, Australian dollar, Korean won, Indian rupee, Japanese yen and Swiss franc.
The Executive Management decides on the hedging policy of aforementioned currency exposures considering the market situation and upon proposal of the Treasury Committee. The objective of the Group’s management of exposure in profit or loss is mainly to increase the predictability of results but also to allow the business to react to the changing environment (e.g. by adapting prices or shifting production).
In the course of 2023, a change in hedging policy has been introduced related to forecasted exposure. From 2024 budget onwards, forecasted exposure will be hedged for material currencies as opposed to the previous policy in which forecasted exposure was hedged for all currencies with a nominal exposure of countervalue of 50 million euro or more. Material currencies are defined as all currencies with the highest potential impact of currency rate change in the profit or loss statement. The forecasted exposure will be covered up to 75% of the net forecasted exposure to the extent that hedge accounting treatment under IFRS 9 can be obtained. This new approach increases the risk coverage and allows a focus on the impact of risk and amount. Besides the change in scope, the timing of executing of the hedges has been updated. The hedges will be executed gradually within corridors that limit the loss or caps the benefit compared to the budgeted rate.
The Group uses forward exchange contracts to hedge its currency risk related to a forecasted exposure. These forward exchange contracts are designated as cash flow hedges. The Group designates only the spot element of forward foreign exchange contracts to hedge its foreign currency risk and applies a hedge ratio of 1:1. The forward element of forward exchange contracts is excluded from the designation of the hedging instrument and is separately accounted for in financial result. The Group’s policy is to align the critical terms of the forward exchange contracts with the hedged item. The existence of an economic relationship between the hedged item and the hedging instrument is based on the currency, amount, and timing of the respective cash flows.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Group assesses whether the derivative designated in the hedging relationship is expected to be and has been effective in offsetting changes in cash flows using the hypothetical derivative method. Very little ineffectiveness is expected from these cash flow hedges. In these relationships, the main sources of ineffectiveness are the counterparty risk and the Group’s own credit risk on the fair value of the forward exchange contracts which is not reflected in the fair value. Also changes in the timing of the hedged transactions can cause hedge ineffectiveness.
In the course of 2023, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in American dollar, Australian dollar, Chinese yuan, Indian rupee, Japanese yen, Korean won and British pound related to highly probable forecasted sales and purchases over the following 12 months. In the course of 2022, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in American dollar related to highly probable forecasted revenue over the following 12 months.
The portion of the gain on the forward exchange contracts that is determined to be an effective hedge is recognized directly in other comprehensive income (December 31, 2023: 1 million euro net of tax; December 31, 2022: -2 million euro net of tax). During 2023, gains amounting to 2 million euro have been recognized in other comprehensive income. An amount of 2 million euro has been reclassified from other comprehensive income and has been deducted from turnover. During 2022, losses amounting to 5 million euro have been recognized in other comprehensive income. An amount of 5 million euro has been reclassified from other comprehensive income and has been deducted from turnover. A reconciliation in tabular format is provided in Note 21.4 ‘Summarizing table of cash flow hedge reserve.’
The following table summarizes the effect of the cash flow hedges related to currency risk on the financial statements:
| Line item in statement of financial position where the hedging instrument is included | Nominal amount | Changes in the value of the hedging instrument recognized in OCI | Hedge ineffectiveness recognized in P&L | Line item in profit or loss that includes hedge ineffectiveness | Amounts reclassified from hedging reserve to profit or loss | Amounts reclassified from hedging reserve to cost of inventory | Line item in profit or loss affected by the reclassification |
|---|---|---|---|---|---|---|---|
| Assets | |||||||
| Liabilities |
| Line item in statement of financial position where the hedging instrument is included | Nominal amount | Changes in the value of the hedging instrument recognized in OCI | Hedge ineffectiveness recognized in P&L | Line item in profit or loss that includes hedge ineffectiveness | Amounts reclassified from hedging reserve to profit or loss | Amounts reclassified from hedging reserve to cost of inventory | Line item in profit or loss affected by the reclassification |
|---|---|---|---|---|---|---|---|
| Assets | |||||||
| Liabilities |
2023
| Carrying amount MILLION EURO | Forward exchange contracts designated as cash flow hedges | Other finance | Derivatives | Revenue expense |
|---|---|---|---|---|
| During the period - 2023 | 38 | 2.0 | - | - |
| Assets | 2 | -2 | - | |
| Liabilities |
2022
| Carrying amount MILLION EURO | Forward exchange contracts designated as cash flow hedges | Other finance | Derivatives | Revenue expense |
|---|---|---|---|---|
| During the period - 2022 | 16 | - | (1.0) | - |
| Assets | (5) | - | ||
| Liabilities | - |
Cash flow hedges hedging its exposure in foreign currency have the following maturities:
| Maturity | 1-3 months | 3-12 months | More than 1 year |
|---|---|---|---|
| Forward exchange contracts designated as cash flow hedges | |||
| Nominal amounts net in millions of foreign currency | |||
| USD | 9 | 23 | - |
| AUD | 1 | 2 | - |
| CNY | 34 | 101 | - |
| INR | 425 | 1,276 | - |
| JPY | 250 | 751 | - |
| KRW | 426 | 1,279 | - |
| GBP | 1 | 2 | - |
| Average EUR:USD forward contract rate | 1.09000 | 1.08000 | - |
| Average EUR:AUD forward contract rate | 1.66000 | 1.68000 | - |
| Average EUR:CNY forward contract rate | 7.72000 | 7.69000 | - |
| Average EUR:INR forward contract rate | 90.12000 | 91.68000 | - |
| Average EUR:JPY forward contract rate | 158.88500 | 155.92000 | - |
| Average EUR:KRW forward contract rate | 1,425.69000 | 1,425.00000 | - |
| Average EUR:GBP forward contract rate | 0.88000 | 0.88000 | - |
| Maturity | 1-3 months | 3-12 months | More than 1 year |
|---|---|---|---|
| Forward exchange contracts designated as cash flow hedges | |||
| Nominal amounts net in millions of foreign currency | |||
| USD | 18 | - | - |
| Average EUR:USD forward contract rate | 1.12770 | - | - |
A strengthening/weakening of the Euro by 10% against the currencies listed hereafter with all other variables held constant, would have increased (decreased) profit or loss by the amounts shown below. The analysis has been performed on the budgeted net exposure by currency for the year 2023, net of the use of cash flow hedges.
| Profit and loss | 2022 | 2023 |
|---|---|---|
| Strengthening of the euro by 10% | Weakening of the euro by 10% | |
| MILLION EURO | ||
| USD | 5.5 | (5.5) |
| CNY | (2.2) | 2.2 |
| CAD | (0.4) | 0.4 |
| GBP | (4.1) | 4.1 |
| AUD | (1.9) | 1.9 |
| INR | (3.4) | 3.4 |
| KRW | (2.0) | 2.0 |
| CHF | (1.1) | 1.1 |
| JPY | (3.5) | 3.5 |
With regard to cash flow hedges, a strengthening/weakening of the euro by 10% against the foreign currencies would have an impact to other comprehensive income of 8 million/(8) million euro. This analysis assumes that all other variables, in particular interest rates remain constant and ignores any impact of forecasted sales.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.
The Group’s exposure to changes in interest rates primarily relates to the Group’s net financial debt position, including the FX-swaps and its interest component that economically hedge intercompany loans and deposits. For the most important currencies the following interest rate profile exists at the reporting date:
| Profit and loss | 2022 | 2023 |
|---|---|---|
| Outstanding amount | Outstanding amount | |
| MILLION EURO | At floating rate | At fixed rate |
| EUR | (4) | - |
| USD | (14) | - |
| GBP | (24) | - |
| CNY | (34) | - |
| AUD | (7) | - |
| JPY | 11 | - |
| BRL | 16 | - |
| CAD | (22) | - |
| HKD | (8) | - |
| PLN | (4) | - |
| KRW | 1 | - |
| ZAR | (1) | - |
| INR | (4) | - |
| Other | 21 | - |
| TOTAL | (72) | - |
| NET FINANCIAL DEBT | (72) | 5 |
A change of 100 basis points in interest rates at December 31, 2023 would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2022.
| Profit and loss | December 31, 2022 | December 31, 2023 |
|---|---|---|
| 100 bp increase | 100 bp decrease | |
| Net impact | 0.72 | (0.72) |
The Group’s most important raw material exposures relate to silver. The Group’s commodity price risk – i.e. the risk that its future cash flows and earnings may vary because of changed material prices – is highly connected with other factors such as the Group’s competitive position within an industry, its relationship with customers and suppliers. The purchases of silver are not hedged.
For 2023, the Group’s exposed tonnage of silver is around 70 tons (2022: 82 tons). For every USD/troy change in the silver price, the impact on the Group’s consolidated profit or loss statement is estimated at 2.2 million USD on a yearly basis (2022: 2.6 million USD). The analysis has been carried out on the actual exposed volume for the year 2023. The aforementioned Group’s exposed tonnage of silver disregards the ability to partly charge its customers without existing silver clauses on the variability of the silver price.
The following table provides a summary of the effect in accumulated other comprehensive income of cash flow hedges by type of risk:
| Cash flow hedges related to Currency risk | Commodity risk | TOTAL | |
|---|---|---|---|
| Other comprehensive income at January 1, 2022 | (2) | - | (2) |
| Effective portion of changes in fair value booked in 'Other comprehensive income' | (5) | - | (5) |
| Changes in fair value of cash flow hedges reclassified to turnover | 5 | - | 5 |
| Adjustments for amounts transferred to initial carrying amount of inventory | - | - | - |
| Income taxes | - | - | - |
| Other comprehensive income at December 31, 2022 | (2) | - | (2) |
| Other comprehensive income at January 1, 2023 | (2) | - | (2) |
| Effective portion of changes in fair value booked in 'Other comprehensive income' | 2 | - | 2 |
| Changes in fair value of cash flow hedges reclassified to turnover | 2 | - | 2 |
| Adjustments for amounts transferred to initial carrying amount of inventory | - | - | - |
| Income taxes | - | - | - |
| Other comprehensive income at December 31, 2023 | 1 | - | 1 |
There are no balances in hedge reserve related to hedge relationships for which hedge accounting is no longer applied.
Credit risk is the risk that the counterparty to a financial instrument may fail to discharge an obligation and cause the Group to incur a financial loss. The Group manages exposure to credit risk by working with upfront agreed counterparty credit limits and through diversification of counterparties. Credit risk arises mainly from the Group’s receivables from customers, investments and foreign currency forward contracts. The exposure to credit risk from customer receivables is monitored on an ongoing basis by the Credit Committee. Credit limits are set for each customer based on its creditworthiness and are reviewed periodically by the Credit Committee. In monitoring the credit risk, customers are grouped in risk categories according to their financial characteristics. It is the Group’s policy to cover a portion of the receivables portfolio through credit insurance to cover default risk.## NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Goods sold are subject to retention of title clauses, so that in event of non-payment the Group may have a secured claim. In normal circumstances, the Group does not require collateral in respect of trade or other receivables. Transactions involving derivative financial instruments and deposits are to be kept within predefined credit limits set by counterparty based on the Standard & Poor’s rating of the related financial institution. To minimize the concentration of counterparty risk, the Group enters into derivative transactions with a number of financial institutions. Investments are only allowed in liquid assets.
As a result of the Group’s broad customer portfolio, there were no significant concentrations of credit risk at December 31, 2023. The maximum exposure is kept within predefined limits. The carrying amounts of the financial assets, including derivative financial instruments, in the statement of financial position reflect the maximum exposure to credit risk. The maximum exposure to credit risk at the reporting date per class of financial asset is as follows:
MILLION EURO
| | Note | 2022 | 2023 |
| :---------------------------------------------- | :--- | :--- | :--- |
| Financial assets at fair value through OCI | | | |
| Equity instruments | 4 | 30.2 | 4 |
| Derivative financial instruments designated as cash flow hedges – assets | 25 | - | 2 |
| Financial assets at fair value through profit or loss | | | |
| Derivatives not part of a hedging relationship – assets | 25 | 3 | 1 |
| Financial assets at amortized cost and contract assets | | | |
| Trade receivables | 22.2 | 300 | 177 |
| Contract assets | 8.3 | 94 | 83 |
| Receivables under finance lease | 31 | 103 | 100 |
| Other receivables | 33 | 6 | 48 |
| Other investments and loans measured at cost | 30.2 | 1 | - |
| Cash | 34 | 138 | 77 |
| TOTAL | | 650 | 492 |
At December 31, 2023 and 2022, the exposure to credit risk for trade receivables, contract assets and lease receivables by geographic region was as follows:
| MILLION EURO | 2022 | 2023 | |||||
|---|---|---|---|---|---|---|---|
| Trade receivables | Contract assets | Lease receivables | Trade receivables | Contract assets | Lease receivables | ||
| Europe | 126 | 34 | 67 | 104 | 24 | 62 | |
| NAFTA | 47 | 49 | 37 | 32 | 45 | 39 | |
| Latin America | 31 | 7 | - | 17 | 9 | - | |
| Asia/Oceania/Africa | 96 | 5 | - | 25 | 4 | - | |
| TOTAL | 300 | 94 | 103 | 177 | 83 | 100 |
With regard to impairment of trade receivables, lease receivables and contract assets, the Group applies the simplified approach for the impairment evaluation, which implies that credit losses for these categories of assets are always measured at an amount equal to lifetime expected credit losses. Credit losses are measured as the present value of all cash shortfalls – i.e. the difference between the cash flows to which the entity is entitled to and what the entity expects to receive. The inputs and assumptions to the expected credit loss model are the following: significant financial difficulty of the counterparty, a default of more than 90 days past due, a possible bankruptcy of the counterparty, …
The evaluation of possible credit-impairment takes into account forward-looking elements. For the major part of the accounts receivable balances, debtors are scored and rated based on quantitative and qualitative information on an ongoing basis through Credit Risk Application in place. All customers are classified into different risk categories which are reassessed on a yearly basis based on relevant forward-looking information such as data from external credit bureaus, age of business, country risk and the credit manager’s assessment. To mitigate the credit risk, credit insurance and other risk mitigation tools such as letter of credit, bank guarantees, mortgage are used within the Group.
The ageing of trade receivables and receivables under finance lease at the reporting date was:
| MILLION EURO | 2022 | 2023 | |||||
|---|---|---|---|---|---|---|---|
| Gross value | Impairment loss | Net | Gross value | Impairment loss | Net | ||
| Trade receivables | |||||||
| Not past due | 264 | (3) | 261 | 153 | (2) | 151 | |
| Past due 0 - 30 days | 15 | (1) | 15 | 17 | (0) | 17 | |
| Past due 31 - 90 days | 15 | (1) | 15 | 4 | (0) | 4 | |
| Past due 91 - 180 days | 4 | (1) | 3 | 4 | (1) | 3 | |
| Past due 181 - 360 days | 9 | (7) | 2 | 4 | (4) | - | |
| Past due more than 360 days | 36 | (31) | 5 | 31 | (29) | 2 | |
| TOTAL TRADE RECEIVABLES | 343 | (44) | 300 | 213 | (36) | 177 | |
| Receivables under finance lease | |||||||
| Not past due | 101 | - | 101 | 97 | - | 97 | |
| Past due 0 - 30 days | 2 | - | 2 | 2 | - | 2 | |
| Past due 31 - 90 days | 1 | - | 1 | 1 | - | 1 | |
| Past due 91 - 180 days | - | - | - | - | - | - | |
| Past due 181 - 360 days | - | - | - | - | - | - | |
| Past due more than 360 days | 1 | (1) | - | 1 | (1) | - | |
| TOTAL RECEIVABLES UNDER FINANCE LEASES | 105 | (1) | 103 | 101 | (1) | 100 |
Past due amounts more than 360 days mainly arise in Belgium and are mainly caused by commercial disputes. These overdues are for the major part written down. Overdues by region are very closely monitored case by case by the Credit Committees within the Group.
The following table provides information about the exposure to credit risk for trade receivables from individual customers at December 31, 2023:
| MILLION EURO | Weighted average Loss allowance | Gross carrying amount |
|---|---|---|
| Not past due | 1.47% | 153 (2) |
| Past due 0 - 30 days | 1.67% | 17 - |
| Past due 31 - 90 days | 3.97% | 4 - |
| Past due 91 - 180 days | 14.56% | 4 (1) |
| More than 180 days | 94.69% | 35 (33) |
The movement in the allowance for impairment in respect of trade, lease receivables and contract assets during the year is shown in the following table. The loss amount is measured at an amount equal to lifetime expected credit losses.
| MILLION EURO | Impairment losses on trade and lease receivables | Impairment losses on contract assets | Impairment losses on trade and lease receivables | Impairment losses on contract assets |
|---|---|---|---|---|
| Balance at January 1 | 47 | - | 45 | 1 |
| Additions/reversals charged to profit or loss | 1 | (1) | - | - |
| Deductions from allowance | (3) | - | (3) | - |
| Disposals | - | - | (4) | - |
| Exchange differences | - | - | - | - |
| Balance at December 31 | 45 | 1 | 37 | - |
Write-offs for which an allowance was previously recorded. The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment for each type of financial asset based on whether there is a reasonable expectation of recovery. Financial assets that are written off are still subject to enforcement activities of the Group for recovery of amounts due. The impairment loss relates to several other customers that indicated not to be able to pay their outstanding balances mainly due to economic circumstances. The cash held by the Group, is deposited with banks having an A credit rating.
Liquidity risk is the risk that the Group will encounter difficulties in meeting commitments related to financial liabilities when they fall due. The Group ensures that it has sufficient liquidity to meet its liabilities. Liquidity risk is managed by maintaining a sufficient degree of diversification of funding sources. The Group has a policy in place to limit concentrations related to liquidity risk. The total share of gross drawn term debt and all undrawn committed facilities provided by one bank or bank group should not exceed predetermined limits. Risk concentrations are monitored on an ongoing basis by the Treasury Committee.
In managing its liquidity risk the Group has a revolving credit facility it can access to meet its liquidity needs. The notional amount of this credit facility amounts to 230 million euro with maturity date March 2024 with a possibility of extension of the term two times with one year. The maturity date has been extended till March 2026. Drawdowns under these lines are made for shorter periods but the Group has the discretion to roll-over the liability under the existing committed loan agreement. In the liquidity analysis, repayments of the committed facilities are included in the earliest time band the Group could be required to repay its liabilities. At December 31, 2023, drawdowns under these lines amount to 40 million euro (2022: 0 million euro).
The following are the remaining contractual maturities at the end of the reporting period of financial liabilities, including estimated interest payments based on conditions existing at the reporting date, i.e. exchange rates and interest rates. With regard to derivatives, the maturity analysis comprises liabilities arising from derivatives and all gross settled forward exchange contracts. The contractual cash flows for forward exchange contracts are determined using forward rates.
| CONTRACTUAL CASH FLOWS (1) | Carrying amount MILLION EURO | TOTAL | 3 months or less | More than 3-12 months | 1-5 years | More than 5 years |
|---|---|---|---|---|---|---|
| Non-derivative financial liabilities | ||||||
| Debenture | - | - | - | - | - | - |
| Revolving credit facility | (1) | (1) | - | - | - | - |
| Other loans | 4 | 4 | 4 | - | - | - |
| Lease liabilities | 62 | 62 | 6 | 14 | 35 | 6 |
| Bank overdrafts | - | - | - | - | - | - |
| Trade payables | 249 | 249 | 249 | - | - | - |
| Other payables | 6 | 6 | 6 | - | - | - |
| Derivative financial liabilities | ||||||
| Forward exchange contracts designated as cash flow hedges: | ||||||
| Outflow | (1) | (17) | (17) | - | - | - |
| Inflow | - | 16 | 16 | - | - | - |
| Other forward exchange contracts: | ||||||
| Outflow | (1) | (128) | (67) | (61) | - | - |
| Inflow | 3 | 130 | 67 | 62 | - | - |
(1) Transaction costs (1 million euro) are presented as a reduction of the carrying amount of the financial liability.
| CONTRACTUAL CASH FLOWS (1) | Carrying amount MILLION EURO | TOTAL | 3 months or less | 3-12 months | 1-5 years | More than 5 years |
|---|---|---|---|---|---|---|
| Non-derivative financial liabilities | ||||||
| Debenture | - | - | - | - | - | - |
| Revolving credit facility | 39 | 40 | 40 | - | - | - |
| Other loans | - | - | - | - | - | - |
| Lease liabilities | 44 | 44 | 4 | 10 | 26 | 3 |
| Bank overdrafts | - | - | - | - | - | - |
| Trade payables | 135 | 135 | 132 | 3 | - | - |
| Other payables | 9 | 9 | 9 | - | - | - |
| Derivative financial liabilities | ||||||
| Forward exchange contracts designated as cash flow hedges: | ||||||
| Outflow | - | (76) | (20) | (56) | - | - |
| Inflow | 2 | 78 | 21 | 57 | - | - |
| Other forward exchange contracts: | ||||||
| Outflow | - | (111) | (52) | (59) | - | - |
| Inflow | 1 | 111 | 52 | 60 | - | - |
(1) Transaction costs (1 million euro) are presented as a reduction of the carrying amount of the financial liability.The following table indicates the periods in which the cash flows associated with cash flow hedges are expected to occur and impact the profit or loss with the fair value of the related hedging instruments.
| MILLION EURO | TOTAL | 3 months | 3-12 months | 1-5 years | More than 5 years | Fair valueless |
|---|---|---|---|---|---|---|
| Derivative financial instruments designated as cash flow hedges | ||||||
| Forward exchange contracts designated as cash flow hedges: | ||||||
| Outflow (1) | (17) | (17) | - | - | - | - |
| Inflow | 16 | 16 | - | - | - | - |
| Swap contracts designated as cash flow hedges: | ||||||
| Outflow | - | - | - | - | - | - |
| Inflow | - | - | - | - | - | - |
| MILLION EURO | TOTAL | 3 months | 3-12 months | 1-5 years | More than 5 years | Fair valueless |
|---|---|---|---|---|---|---|
| Derivative financial instruments designated as cash flow hedges | ||||||
| Forward exchange contracts designated as cash flow hedges: | ||||||
| Outflow | (76) | (20) | (56) | - | - | - |
| Inflow | 78 | 21 | 57 | - | - | - |
| Swap contracts designated as cash flow hedges: | ||||||
| Outflow | - | - | - | - | - | - |
| Inflow | - | - | - | - | - | - |
The Executive Management seeks to maintain a balance between the components of the shareholders’ equity and the net financial debt at an agreed level. Net financial debt is defined as current and non-current loans and borrowings and lease liabilities less cash and cash equivalents. There were no changes in the Group’s approach to capital management during the year. The Group is not subject to any externally imposed capital requirements, with the exception of the statutory minimum equity funding requirements that apply to its subsidiaries in the different countries.
In the first half-year of 2022, the Group has purchased 5,618,125 own shares for an amount of 21 million euro. These shares were cancelled in the course of the first half-year of 2022. At December 31, 2023, the issued capital of the Group amounted to 187 million euro represented by 154,820,528 fully paid shares. At December 31, 2023, the Group does not hold any own shares.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All derivative financial instruments are recognized at fair value in the statement of financial position. The Group aggregates its financial instruments into classes based on their nature and characteristics. The following table shows the carrying amounts and fair values of financial assets and liabilities by category and a reconciliation of the corresponding line items in the statement of financial position. It does not include fair value information for financial assets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. During 2023 and 2022 there have been no reclassifications of financial assets between categories. The other payables classified as mandatorily at fair value through profit or loss in the fair value hierarchy 2 (2023: 2 million euro, 2022: 2 million euro) relate to a deposit of 3.4 ton silver placed by a metal recovery and refining company, valued at fair value (observable market price).
| Financial assets | Financial liabilities | |
|---|---|---|
| MILLION EURO | Hedging instruments | Mandatorily at fair value through P&L |
| Fair value hierarchy | (2) | (2) |
| Assets | ||
| Other financial assets | ||
| Trade receivables | - | - |
| Receivables under finance lease | - | - |
| Other receivables | - | - |
| Derivative financial instruments: | ||
| Forward contracts used for hedging | - | - |
| Swap contracts used for hedging | - | - |
| Other forward exchange contracts | - | 1 |
| Other swap contracts | - | 2 |
| Cash and cash equivalents | - | - |
| TOTAL ASSETS | - | 3 |
| Liabilities | ||
| Loans and borrowings | - | - |
| Revolving credit facility | - | - |
| Bank overdrafts | - | - |
| Other bank liabilities | - | - |
| Lease liabilities | - | - |
| Trade payables | - | - |
| Other payables | - | 2 |
| Derivative financial instruments: | ||
| Forward contracts used for hedging | 1 | - |
| Swap contracts used for hedging | - | - |
| Other forward exchange contracts | - | - |
| Other swap contracts | - | 1 |
| TOTAL LIABILITIES | 1 | 3 |
| Financial assets | Financial liabilities | |
|---|---|---|
| MILLION EURO | Hedging instruments | Mandatorily at fair value through P&L |
| Fair value hierarchy | (2) | (2) |
| Assets | ||
| Other financial assets | ||
| Trade receivables | - | - |
| Receivables under finance lease | - | - |
| Other receivables | - | - |
| Derivative financial instruments: | ||
| Forward contracts used for hedging | - | - |
| Swap contracts used for hedging | - | - |
| Other forward exchange contracts | - | 1 |
| Other swap contracts | - | - |
| Cash and cash equivalents | - | - |
| TOTAL ASSETS | 2 | 1 |
| Liabilities | ||
| Loans and borrowings | - | - |
| Revolving credit facility | - | - |
| Bank overdrafts | - | - |
| Other bank liabilities | - | - |
| Lease liabilities | - | - |
| Trade payables | - | - |
| Other payables | - | 2 |
| Derivative financial instruments: | ||
| Forward contracts used for hedging | - | - |
| Swap contracts used for hedging | - | - |
| Other forward exchange contracts | - | - |
| Other swap contracts | - | - |
| TOTAL LIABILITIES | - | 2 |
Significant methods and assumptions used in estimating the fair values of financial instruments are as follows. The fair value of investments in equity securities is determined by reference to their quoted market price at the reporting date. The fair value of forward exchange contracts and swap contracts is valued using quoted forward exchange rates and yield curve data at reporting date. The fair value of trade and other receivables and trade and other payables is not disclosed as it mainly relates to short-term receivables and payables for which their carrying amount is a reasonable approximation of fair value. The fair value of financial liabilities is calculated based on the present value of future principal and interest cash flows, discounted at market rates of interest at the reporting date. The fair value of the debenture is the quoted market price at the reporting date. The fair value for the current bank liabilities approximates nominal amounts excluding transaction costs, as draw- downs are made for short periods. The fair value of the deferred contingent consideration from business combinations is calculated using a discounted cash flow model. The valuation model considers the present value of the expected future payments, discounted using a risk-adjusted discount rate. Significant observable inputs are the expected cash flows and the risk-adjusted discount rate. The estimated fair value would increase (decrease) if the expected performances are higher (lower).# ITEMS OF INCOME, EXPENSE, GAINS AND LOSSES ON FINANCIAL INSTRUMENTS RECOGNIZED IN PROFIT OR LOSS
| Financial assets at amortized cost | Financial liabilities carried at amortized cost | Financial liabilities at fair value | Derivatives | TOTAL (MILLION EURO) | |
|---|---|---|---|---|---|
| Interest income | 5 | - | - | - | 5 |
| Interest expense | - | (4) | (6) | - | (10) |
| Finance lease income | 7 | - | - | - | 7 |
| Impairment charges | (3) | - | - | - | (3) |
| Income from reversal of impairment losses | 2 | - | - | - | 2 |
| Change in fair value of financial instruments not part of a hedging relationship | - | (7) | - | - | (7) |
| Net result from ineffectiveness of hedging instruments designated as cash flow hedges | - | - | - | - | - |
| Financial assets at amortized cost | Financial liabilities carried at amortized cost | Financial liabilities at fair value | Derivatives | TOTAL (MILLION EURO) | |
|---|---|---|---|---|---|
| Interest income | 16 | - | - | - | 16 |
| Interest expense | - | (3) | (15) | - | (18) |
| Finance lease income | 6 | - | - | - | 6 |
| Impairment charges | (1) | - | - | - | (1) |
| Income from reversal of impairment losses | 2 | - | - | - | 2 |
| Change in fair value of financial instruments not part of a hedging relationship | - | - | - | - | - |
| Net result from ineffectiveness of hedging instruments designated as cash flow hedges | - | - | - | - | - |
| Goodwill | TOTAL | Trademarks | Capitalized development costs | Acquired technology | Contractual customer relationships | Trademarks | Management information systems | Software, licenses, concessions and IP rights | Advance payments to acquire intangible assets | Intangible assets | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Indefinite useful lives | Finite useful lives | ||||||||||
| MILLION EURO | |||||||||||
| Cost at December 31, 2021 | 370 | - | 2 | 38 | 47 | 4 | 128 | 54 | - | 644 | |
| Exchange differences | 9 | - | - | - | - | - | 3 | - | - | 12 | |
| Business combinations additions | 2 | - | - | 2 | 22 | 2 | - | - | - | 26 | |
| Business combinations divestment | - | - | - | - | - | - | - | - | - | - | |
| CHP certificates and emission rights (non-cash) | - | - | - | - | - | - | (2) | - | - | (2) | |
| Capital expenditures | - | - | - | - | - | - | - | 7 | - | 7 | |
| Disposals and retirements | (2) | - | - | - | (5) | (1) | (1) | - | - | (8) | |
| Construction in progress put into use | - | - | - | - | - | - | - | - | - | - | |
| Reclasses | - | - | - | - | - | - | - | - | - | - | |
| Cost at December 31, 2022 | 379 | - | 2 | 61 | 43 | 5 | 131 | 58 | - | 679 | |
| Exchange differences | (7) | - | - | - | (2) | - | (1) | - | - | (10) | |
| Business combinations additions | - | - | - | - | - | - | - | - | - | - | |
| Business combinations divestment | (10) | - | - | (18) | (12) | (2) | (1) | (25) | - | (68) | |
| CHP certificates and emission rights (non-cash) | - | - | - | - | - | - | (2) | - | - | (2) | |
| Capital expenditures | - | - | - | - | - | - | - | 1 | - | 1 | |
| Disposals and retirements | - | - | - | - | - | - | (2) | - | - | (2) | |
| Construction in progress put into use | - | - | - | - | - | - | - | - | - | - | |
| Reclasses | - | - | - | - | - | - | 1 | - | - | 1 | |
| Cost at December 31, 2023 | 361 | - | 2 | 42 | 29 | 3 | 128 | 30 | - | 597 | |
| Accumulated amortization and impairment losses | |||||||||||
| December 31, 2021 | (90) | - | (2) | (38) | (39) | (4) | (126) | (52) | - | (351) | |
| Exchange differences | (2) | - | - | - | - | - | (3) | - | - | (5) | |
| Amortization during the year | - | - | - | (1) | (5) | (1) | (1) | - | - | (9) | |
| Impairment loss during the year | (70) | - | - | - | (3) | - | - | - | - | (73) | |
| Disposals and retirements | 2 | - | - | - | 5 | 1 | - | - | - | 7 | |
| Reclasses | - | - | - | - | - | - | - | - | - | - | |
| Accumulated amortization and impairment losses December 31, 2022 | (160) | - | (2) | (39) | (42) | (4) | (130) | (54) | - | (431) | |
| Exchange differences | 4 | - | - | - | 2 | - | 1 | - | - | 7 | |
| Business combinations divestment | 10 | - | - | 18 | 12 | 2 | 1 | 25 | - | 68 | |
| Amortization during the year | - | - | - | (2) | - | - | (1) | - | - | (4) | |
| Impairment loss during the year | - | - | - | - | - | - | - | - | - | - | |
| Disposals and retirements | - | - | - | - | - | - | - | 1 | - | 1 | |
| Reclasses | - | - | - | - | - | - | - | - | - | - | |
| Accumulated amortization and impairment losses December 31, 2023 | (146) | - | (2) | (24) | (28) | (2) | (128) | (28) | - | (358) | |
| Carrying amount December 31, 2021 | 280 | - | - | 9 | - | 2 | 2 | 23 | - | 293 | |
| Carrying amount December 31, 2022 | 218 | - | - | 21 | 1 | 1 | 1 | 5 | - | 248 | |
| Carrying amount December 31, 2023 | 215 | - | - | 19 | 1 | 1 | - | 3 | - | 239 |
In 2023, the cash relevant capital expenditures for intangible assets amount to 1 million euro (2022: 7 million euro) and mainly relate to software and licences. Business combinations disposals in 2023 relate to the sale of the Offset business (see Note 20.1). Business combinations additions in 2022 relate to the acquisition of Inca Digital Printers (see Note 19.2).
For the financial statements of the Group, goodwill is tested for impairment annually and whenever there is an indication of impairment. For the purpose of impairment testing, goodwill is allocated to a cash-generating unit (CGU). In line with the definition of cash-generating units, the management of the Group has identified the reportable segments as the cash-generating units, i.e. HealthCare IT, Digital Print & Chemicals, Radiology Solutions and CONOPS. The operating segment is the lowest level within the Group at which the goodwill is monitored for internal management purposes (see Note 6 ‘Reportable segments’).
At the end of 2023, the impairment test for goodwill was performed for the cash-generating units HealthCare IT and Digital Print & Chemicals. The other business segments do not comprise goodwill. The impairment testing has been carried out by comparing the carrying amount of each cash-generating unit to its recoverable amount. The recoverable amount of the CGU has been determined based upon a value in use calculation. The value in use is determined as the present value of estimated future cash flows that are derived from the current long-term planning of the Group. The discount rate used in calculating the present value of the estimated future cash flows, is based on an average market participant’s weighted average cost of equity and debt capital (WACC). The WACC considers a debt/equity ratio for an average market’s participant increased with an additional risk premium to the cost of equity. The cost of debt is based on the conditions on which comparable companies can obtain long-term financing. The discount rate is calculated for each cash-generating unit independently, considering the debt/equity ratio of each peer group. The pre-tax discount rates are derived from the WACC by means of iteration.
At December 31, 2023, the carrying amount of the CGU Agfa HealthCare IT comprises goodwill of 214 million euro (2022: 217 million euro). At year-end 2023, the Group tested its goodwill of HealthCare IT for impairment. Based on the assumptions used, the calculated value in use of the CGU was higher than its carrying amount and no impairment loss was recognized. The value in use of the CGU Agfa HealthCare IT has been determined based on estimated cash flow projections covering the next five years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. After five years a terminal value is computed using a growth rate in the division Information Technologies (IT Solutions) of 2%. These growth rates are derived from respective market information.
The main assumptions used in the annual impairment test are determined by the reportable segment’s key management and are based on past performance and management’s expectations for the market development. Key assumptions are:
* after-tax WACC: 10.5% (2022: 10.15%);
* pre-tax discount rate: 12.38% (2022: 12.43%);
* terminal growth rate (after five years): 2% for IT Solutions (2022: 1.5%);
* exchange rate USD/EUR: 1.11 (2022: 1.05);
* revenue and gross margin: revenue and gross margin reflect management’s best expectations, based on past experience and taken into account the specific business risks.
Sensitivity analyses on changes in key assumptions, i.e. substantial changes in WACC, have been performed. The sensitivity analysis was based on a 100 basis point increase in the weighted average cost of capital. These sensitivity analyses have not revealed any risk for impairment loss. Based upon these sensitivity analyses, management is of the opinion that a reasonable, possible change in one of these key assumptions would not trigger an impairment loss to occur.
At December 31, 2023, the carrying amount of the CGU Digital Print & Chemicals comprises goodwill of 2 million euro (2022: 2 million euro). At year-end 2023, the Group tested its goodwill of Digital Print & Chemicals for impairment. Based on the assumptions used, the calculated value in use of the CGU was higher than its carrying amount and no impairment loss was recognized. The value in use of the CGU Digital Print & Chemicals has been determined based on estimated cash flow projections covering the next five years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. After five years, a terminal value is computed using a growth rate in the division of 3.58%. These growth rates are derived from respective market information.
The main assumptions used in the annual impairment test are determined by the reportable segment’s key management and are based on past performance and management’s expectations for the market development. Key assumptions are:
* after-tax WACC: 10.83% (2022: 10.43%);
* pre-tax discount rate: 14.03% (2022: 12.86%);
* terminal growth rate (after five years): 3.58% (2022: 5%);
* exchange rate USD/EUR: 1.11 (2022: 1.05);
* revenue and gross margin: revenue and gross margin reflect management’s best expectations, based on past experience and taken into account the specific business risks.# 23. INTANGIBLE ASSETS AND GOODWILL
At the end of 2022, based on the impairment testing performed, the calculated value in use of the CGU was lower than its carrying amount and the goodwill and intangible assets with finite useful life were impaired in full in 2022. At December 31, 2023 the CGU Radiology Solutions does not comprise any goodwill.
At year-end 2023, the Group has no intangible assets with indefinite useful lives on its balance sheet.
The useful life of an intangible asset is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the Group. Acquired technology and customer relationships are the most crucial recognized intangible assets with finite useful lives for the Group. For acquired technology, the estimation of the remaining useful life is based on the analysis of factors such as typical product life cycles in the industry and technological and commercial obsolescence arising mainly from expected actions by competitors or potential competitors. At December 31, 2023, the net carrying amount of the Group’s acquired technology amounted to 19 million euro (2022: 21 million euro). This technology was acquired in the business combination of Inca Digital Printers (see Note 19.2). The Group’s acquired technology has an estimated weighted average remaining useful life of approximately eight years. The useful lives are periodically reviewed and revised if necessary.
For acquired contractual customer relationships, the estimated remaining useful life is assessed by reference to customer attrition rates. For the estimation of appropriate customer attrition rates, the Group assesses the probability that existing contracts will be renegotiated. For the assessment of the probability that existing contracts can be renegotiated, demand as well as competition and other factors such as technological lock-in and related sunk costs are of importance. At December 31, 2023, the net carrying amount of the Group’s remaining acquired contractual customer relationships amount to 1 million euro (2022: 1 million euro). The Group’s acquired contractual customer relationships have an estimated weighted average remaining useful life of approximately five years. The useful lives are periodically reviewed and revised if necessary.
While the Group believes that the assumptions (such as attrition rates and product life cycles) used for the determination of the useful lives of aforementioned intangibles are appropriate, significant differences in actual experience would affect the Group’s future amortization expense.
| Land, buildings and infrastructure | Machinery and technical equipment | Furniture, fixtures and other equipment | Construction in progress and advance payments to vendors and contractors | TOTAL | |
|---|---|---|---|---|---|
| MILLION EURO | |||||
| Cost at December 31, 2021 | 315 | 1,412 | 139 | 14 | 1,880 |
| Exchange differences | 2 | 4 | - | - | 6 |
| New lease contracts | - | - | - | - | - |
| Capital expenditures | 1 | 16 | 4 | 5 | 26 |
| Business combinations additions | 2 | 10 | 1 | - | 13 |
| Disposals and retirements | (24) | (52) | (4) | (1) | (81) |
| Construction in progress put into use | - | 1 | - | (1) | - |
| Reclasses | - | - | 2 | (1) | 2 |
| Cost at December 31, 2022 | 297 | 1,390 | 143 | 16 | 1,846 |
| Exchange differences | (2) | (2) | (1) | - | (5) |
| New lease contracts | - | - | - | - | - |
| Capital expenditures | 1 | 17 | 4 | 12 | 33 |
| Business combinations divestment | (55) | (239) | (27) | (14) | (335) |
| Disposals and retirements | - | (31) | (5) | - | (36) |
| Construction in progress put into use | - | - | - | (1) | - |
| Reclasses | - | - | 2 | (1) | 1 |
| Cost at December 31, 2023 | 239 | 1,136 | 117 | 13 | 1,505 |
| Accumulated amortization and impairment losses December 31, 2021 | (283) | (1,335) | (126) | (7) | (1,751) |
| Exchange differences | (1) | (3) | (1) | - | (5) |
| Depreciation during the year | (4) | (15) | (8) | - | (26) |
| Impairment loss during the year | (6) | (10) | (2) | (7) | (26) |
| Business combinations additions | (2) | (9) | (1) | - | (12) |
| Disposals and retirements | 24 | 53 | 3 | 1 | 80 |
| Reclasses | - | 1 | - | (1) | - |
| Accumulated depreciation and impairment losses December 31, 2022 | (273) | (1,319) | (133) | (14) | (1,739) |
| Exchange differences | 2 | 2 | 1 | - | 4 |
| Depreciation during the year | (2) | (13) | (6) | - | (22) |
| Impairment loss during the year | - | (3) | - | - | (3) |
| Business combinations divestment | 56 | 239 | 27 | 14 | 335 |
| Disposals and retirements | - | 30 | 5 | - | 35 |
| Reclasses | - | - | - | - | - |
| Accumulated depreciation and impairment losses December 31, 2023 | (218) | (1,064) | (108) | - | (1,389) |
| Carrying amount December 31, 2021 | 31 | 77 | 14 | 7 | 129 |
| Carrying amount December 31, 2022 | 24 | 71 | 10 | 2 | 107 |
| Carrying amount December 31, 2023 | 22 | 72 | 8 | 13 | 115 |
In 2023, capital expenditure for property, plant and equipment amount to 33 million euro (2022: 26 million euro), of which 17 million euro (2022: 16 million euro) relates to machinery and technical equipment, mainly in Belgium and of which 12 million euro (2022: 5 million euro) relates to construction in progress in Belgium and mainly for production efficiency, maintenance, IT-related projects, prototypes in development and managed service-related projects not yet life. The Group, as lessor, included assets subject to operating leases in its statement of financial position under the caption ‘Other Equipment.’ At the end of December 2023, the assets subject to operating leases have a total net carrying amount of 4 million euro (2022: 4 million euro) (see Note 44).
Impairment losses on PP&E in 2022 amounted to 26 million euro and mainly relate to assets belonging to entities that are dedicated to the Offset Solutions activity and are therefore subject to the disposal in 2023. These assets were fully impaired as the sales price for the disposal group is lower than the carrying amount of the disposal group.
Conform IAS 36, as a result of a reduced performance of the business segment Radiology Solutions, an impairment test was performed on property, plant & equipment and right-of-use assets. Individual assets that generate largely independent cash inflows have been tested separately for impairment. Assets for which the value in use could not be determined separately, were tested on the basis of the cash generating unit Radiology Solutions. As a result of these tests, an impairment loss was recorded of 2 million euro on the dedicated assets of the Radiology film business in Mortsel.
The value in use of the CGU Radiology Solutions has been determined based on estimated cash flow projections covering the next ten years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. The weighted average growth rate amounts to minus 4%. These growth rates are derived from respective market information. The main assumptions used in the annual impairment test are determined by the reportable segment’s key management and are based on past performance and management’s expectations for the market development. Key assumptions are:
Due to the application of IFRS 16, the Group – as lessee – recognizes right-of-use assets representing its right to use the underlying assets and lease liabilities representing its obligation to make lease payments. Exemptions are however made for short-term leases and leases of low value items such as the major part of the Group’s ICT-equipment. The right-of-use asset is initially measured at cost and subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In these cases, the right-of-use asset is depreciated over the useful life of the underlying asset, compliant with the methodology applicable for property, plant and equipment.
The following table shows a reconciliation to the closing balances at December 31, 2023, for the right-of-use assets, broken down by category. The Group distinguishes four categories: 1) Right-of-use land, buildings and infrastructure, 2 ) Right-of-use cars, 3) Right-of-use other transportation equipment, mainly related to our manufacturing organizations and 4) Right-of-use other assets.
| Right-of-use land, buildings and infrastructure | Right-of-use cars | Right-of-use other transportation equipment | Right-of-use other assets | TOTAL | |
|---|---|---|---|---|---|
| MILLION EURO | |||||
| Cost at December 31, 2021 | 93 | 35 | 2 | 2 | 132 |
| Exchange differences | - | - | - | - | - |
| New lease contracts | 6 | 8 | - | - | 14 |
| Lease revaluations | (3) | - | - | - | (2) |
| Business combinations | 8 | - | - | - | 8 |
| Disposals and retirements | (9) | (7) | - | - | (17) |
| Reclasses | (1) | (1) | - | - | (2) |
| Cost at December 31, 2022 | 94 | 36 | 2 | 1 | 134 |
| Exchange differences | (1) | - | - | - | (1) |
| New lease contracts | 7 | 12 | - | - | 19 |
| Lease revaluations | - | - | - | - | (1) |
| Business combinations | (26) | (8) | (1) | - | (35) |
| Disposals and retirements | (15) | (10) | - | - | (25) |
| Reclasses | - | - | - | - | - |
| Cost at December 31, 2023 | 60 | 30 | 1 | 1 | 92 |
| Accumulated depreciation and impairment losses December 31, 2021 | (43) | (18) | (1) | - | (63) |
| Exchange differences | - | - | - | - | - |
| Amortization during the year | (17) | (10) | (1) | - | (28) |
| Impairment loss during the year | (11) | (4) | (1) | - | (15) |
| Disposals and retirements | 9 | 6 | - | - | 16 |
| Reclasses | 1 | 1 | - | - | 1 |
| Accumulated depreciation and impairment losses December 31, 2022 | (62) | (25) | (2) | (1) | (89) |
| Exchange differences | 1 | - | - | - | 1 |
| Amortization during the year | (11) | (7) | - | - | (19) |
| Impairment loss during the year | (4) | (1) | - | - | (5) |
| Disposals and retirements | 14 | 10 | - | - | 25 |
| Business combinations | 26 | 8 | 1 | - | 35 |
| Reclasses | - | - | - | - | - |
| Accumulated depreciation and impairment losses December 31, 2023 | (37) | (15) | (1) | - |
In the course of 2021, the Group established with other investment partners the company Penny Black, a start-up private limited liability company providing software and printing solutions for the e-commerce business. The Group holds an investment of 49.79% in this company. The investment in this associate is measured using the equity method. In the course of 2023, the Agfa-Gevaert Group made an extra investment of 0.6 million euro in this associate. During 2023, the Group has recognized losses amounting to 0.8 million euro in relation to its interest in this associate (2022: 0.7 million euro). The carrying amount of the investment in Penny Black amounts to 0.5 million euro after equity pick-up.
| 2022 | 2023 | |
|---|---|---|
| MILLION EURO | ||
| Penny Black (49.80%) | Penny Black (49.79%) | |
| Carrying amount of interests, including goodwill | 0.7 | 0.5 |
| Net loss after taxes | (1.3) | (1.6) |
| Group’s share of net loss after taxes | (0.7) | (0.8) |
| Other Comprehensive Income | - | - |
| Group’s share of Other Comprehensive Income | - | - |
| Summarized financial information | ||
| Non-current assets | - | - |
| Current assets | 1.3 | 0.8 |
| Equity | 1.2 | 0.7 |
| Current liabilities | 0.1 | 0.1 |
| Group’s share of equity | 0.7 | 0.5 |
| Goodwill included in carrying amount of the investment | - | - |
| Carrying amount of investment in other affiliates | 0.7 | 0.5 |
At December 2023 and 2022, financial assets at fair value through OCI comprise the investment in Digital Illustrate Inc., a Korean UV printer manufacturer. The Group owns 15% of the shares of this company. This investment is carried at fair value, being the quoted price on the stock exchange with changes in fair value booked in OCI. The Group designated this investment as at FVOCI because this represents an investment that the Group intends to hold for the long term for strategic purposes. During 2023, no dividends have been received (2022: 0 million euro).
| MILLION EURO | 2022 | 2023 |
|---|---|---|
| Financial assets at fair value through OCI - Equity instruments | 4 | 4 |
| Financial assets at amortized cost | 1 | - |
| TOTAL | 5 | 4 |
Lease agreements in which the other party, as lessee, is to be regarded as the economic owner of the leased assets give rise to accounts receivable in the amount of the discounted future lease payments. These receivables amounted to 101 million euro as of December 31, 2023 (2022: 105 million euro) and will bear interest income until their maturity dates of 11 million euro (2022: 11 million euro). As of December 31, 2023, the impairment losses on the receivables under finance leases amounted to 1 million euro (2022: 1 million euro).
The receivables under finance leases can be presented as follows:
| MILLION EURO | Total future payments | Unearned interest income | Present value | Total future payments | Unearned interest income | Present value |
|---|---|---|---|---|---|---|
| 2022 | 2022 | 2022 | 2023 | 2023 | 2023 | |
| Not later than one year | 37 | 4 | 33 | 38 | 5 | 33 |
| Year +2 | 28 | 3 | 25 | 28 | 3 | 25 |
| Year +3 | 21 | 2 | 19 | 21 | 2 | 19 |
| Year +4 | 15 | 1 | 14 | 14 | 1 | 13 |
| Year +5 | 9 | 1 | 8 | 6 | 1 | 6 |
| Later than five years | 4 | - | 4 | 4 | - | 4 |
| Total minimum lease payments | 114 | 11 | 104 | 111 | 11 | 100 |
| Unguaranteed residual value | 1 | - | 1 | 1 | - | 1 |
| TOTAL | 115 | 11 | 105 | 112 | 11 | 101 |
| Impairment losses | (1) | (1) | (1) | (1) | ||
| Receivables under finance lease | 103 | 100 |
The Group leases out its commercial equipment under finance leases mainly via Agfa Finance (i.e. Agfa Finance NV, Agfa Finance Corp. and Agfa Finance Inc.). At the inception of the lease, the present value of the minimum lease payments generally amounts to at least 90% of the fair value of the leased assets. The major part of the leases concluded with Agfa Finance typically run for a non-cancellable period of four years. The contracts generally include an option to purchase the leased equipment after that period at a price that generally lies between 2% and 5% of the gross investment at the inception of the lease. Sometimes, the fair value of the leased asset is paid back by means of a purchase obligation for consumables at a value higher than its market value, in such a way that this mark-up is sufficient to cover the amount initially invested by the lessor. In these types of contracts the mark-up and or the lease term can be subject to change. Agfa Finance offers its products via its subsidiaries in France and Italy and its branches in Europe (Spain, Switzer- land, Benelux, Germany, UK and the Nordic countries), via Agfa Finance Corp. in the USA and Agfa Finance Inc. in Canada. As of December 31, 2023, the present value of the total future lease payments before impairment losses for Agfa Finance amounted to 101 million euro (2022: 104 million euro). During 2023 and 2022, the Group has not sold any receivables under finance lease.
| MILLION EURO | 2022 | 2023 |
|---|---|---|
| Raw materials and auxiliaries | 92 | 47 |
| Work in progress and semi-finished goods | 118 | 115 |
| Finished goods | 30 | 18 |
| Goods purchased for resale including spare parts | 224 | 111 |
| Inventory in transit & other inventory | 22 | (3) |
| TOTAL | 487 | 289 |
In 2023, inventories are written down to net realizable value for an amount of 11 million euro (2022: 12 million euro). These write-downs relate to obsolete, damaged or expired inventory. Write-downs of inventories are included in cost of sales in the consolidated statement of profit or loss.
Decreased inventory levels versus last year are mainly driven by the sale of the Offset Solutions division to the invest- ment firm Aurelius Group. In the course of 2022, the Group acquired Inca Digital Printers (see Note 19). Inventories acquired in this business combination were valued at fair value less costs to sell being the estimated selling price in the ordinary course of business less estimated costs of completion and sale and a reasonable profit margin based on the effort required to sell the inventory.
Other receivables can be presented as follows:
| MILLION EURO | (1) | 2022 | 2023 |
|---|---|---|---|
| Uninstalled leases | (2) | 5 | |
| Deferred purchase price related to the Inca acquisition | 3 | - | |
| Deferred purchase price related to the divestment of Offset | - | 35 | |
| Subsidies and grants | - | - | |
| Payroll receivables | 1 | 1 | |
| Other receivables | 4 | 6 | |
| TOTAL | 6 | 48 |
(1) Leased equipment not yet installed at the client’s premises. On April 4, 2023, the Agfa-Gevaert Group completed the sale of its Offset Solutions division to the investment firm Aurelius Group at a consideration of 46 million euro. In the second quarter of 2023, an amount of 11 million euro was received which brings the outstanding receivable to 35 million euro which is presented in other receivables on the balance sheet (see Note 20.1). The payment of the outstanding receivable is depending on the due completion of certain procedures as agreed with Aurelius. These procedures have not yet reached their final conclusion.
The reconciliation of cash and cash equivalents with its corresponding items in the statement of financial position can be presented as follows:
| MILLION EURO | 2022 | 2023 |
|---|---|---|
| Total cash and cash equivalents as reported in the consolidated statement of financial position | 138 | 77 |
| Bank overdrafts (reported under current loans and borrowings) | - | - |
| Total cash and cash equivalents as reported in the consolidated statement of cash flows | 138 | 77 |
The non-current assets, classified as held-for-sale, relate to the planned sale of the closed offset printing plate factory in Vallese (Italy) belonging to the former Offset Solutions segment. The sale is planned in the next year. Related land, buildings and infrastructure are measured at their carrying amount at December 31, which is lower than the fair value less costs to sell. The site in Pont-à-Marcq (France), classified as held-for-sale in the past was successfully sold in 2022.
Other non-current and current assets can be presented as follows:
| MILLION EURO | 2022 | 2023 |
|---|---|---|
| Non-current | ||
| Multi-year service contracts (strategic suppliers) | - | 4 |
| Prepayments | 7 | - |
| Total non-current | 8 | 4 |
| Current | ||
| Multi-year service contracts (strategic suppliers) | 10 | 8 |
| Advances on costs | - | - |
| Guarantees and deposits | 3 | 2 |
| Prepayments | 3 | 2 |
| Other | - | - |
| Total current | 17 | 13 |
| TOTAL | 24 | 17 |
The various components of equity and the changes therein from January 1, 2022 to December 31, 2023 are presented in the consolidated statements of changes in equity.
At December 31, 2023 and 2022, the issued capital of the Company amounts to 187 million euro. The outstanding ordinary shares amount to 154,820,528 at December 31, 2023 (2022: 154,820,528 outstanding shares).
The reserve for the Company’s own shares comprises the cost of the Company’s shares held by the Group. At December 31, 2023, the Group does not hold own shares (2022: nil). On March 10, 2021, the Group has announced a share buyback program with a volume up to 50 million euro. Agfa-Gevaert NV has requested a financial intermediary to repurchase Agfa-Gevaert shares for a maximum amount of 50 million euro on its behalf under the terms of an initial discretionary mandate agreement with validity until March 31, 2022, effective as from April 1, 2021. On March 8, 2022, the Board of Directors decided to extend the ‘2021 Share Buyback program’ through March 31, 2023 (the ‘Extended Share Buyback Program 2021’). Since the beginning of the share buyback program until June 9, 2022, based on the transaction date, the Agfa-Gevaert Group bought 12,930,662 own shares (2021: 7,312,537 shares; 2022: 5,618,125 shares) for a total amount of 50 million euro (2022: 21 million euro; 2021: 29 million euro). With this announcement, Agfa-Gevaert NV has completed its share buyback program that had started on April 1, 2021. In the first half-year of 2022, the Group has purchased 5,618,125 own shares for an amount of 21 million euro. These shares were cancelled in the first half-year of 2022. At December 31 2023, the Group does not hold own shares.
The revaluation reserve comprises the revaluation of the Group’s investment in Digital Illustrate Inc. which is irrevocably designated at fair value through OCI and will subsequently not be recycled to profit or loss.
As of December 31, 2023, the hedging reserve comprises the effective portion of the cumulative net change in fair value of foreign exchange contracts designated as cash flow hedges. In the course of 2023, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in US dollar, Australian dollar, Chinese yuan, Indian rupee, Japanese yen, Korean won and British pound related to highly probable forecasted sales and purchases over the following 12 months. In 2022, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in US dollar related to highly probable forecasted revenue over the following 12 months. The portion of the gain on the forward exchange contracts that is determined to be an effective hedge is recognized directly in other comprehensive income (December 31, 2023: 1 million euro net of tax, December 31, 2022: -2 million euro net of tax). A reconciliation of hedge reserve in tabular format for each type of risk is provided in Note 21.4.
Remeasurements of the net defined benefit liability primarily relate to actuarial gains and losses and return on plan assets, excluding the amounts included in net interest on the net defined benefit liabilities. The evolution for the year 2023 is as follows:
| Remeasurement of the net defined benefit liability | Transfer of remeasurements on the defined benefit liability to retained earnings | December 31, 2022 | Tax impact | December 31, 2023 | |
|---|---|---|---|---|---|
| MILLION EURO | |||||
| Related to material countries | (883) | (15) | (6) | 3 | (901) |
| Related to non-material countries | (25) | - | - | (25) | (25) |
| TOTAL | (908) | (15) | (6) | 3 | (926) |
| Remeasurement of the net defined benefit liability related to entities divested | |||||
| Note 13 | |||||
| Note 17.4 |
The movement of the year, net of tax amounts is an increase of 12 million euro. Deferred taxes related to the effects of remeasurements are also recognized in ‘Other comprehensive income’. The tax effect is further explained in Note 17.4. The remeasurement adjustments related to entities divested to the Aurelius Group have been reclassed to retained earnings (6 million euro).
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as from the translation of financial instruments that hedge the Company’s net investment in a foreign subsidiary. As a result of the disposal of the Offset business, a release of translation differences was recorded in the amount of 2 million euro. Until May 2016, the Group utilized forward exchange contracts to hedge the foreign currency exposure of the Group’s net investment in one of its subsidiaries in the United States. As from May 2016, the Group has revoked the designation of the hedge. The gain on the hedging instrument relating to the effective portion of the hedge that was recognized in Other comprehensive income (December 31, 2023: 3 million euro, December 31, 2022: 10 million euro) shall be reclassified from equity to profit or loss on the disposal of the foreign entity. As a result of the disposal of the Offset business, part of these hedge results have been released.
In the year 2022, no dividend has been paid out based on the decision of the General Assembly of Shareholders of Agfa-Gevaert NV on May 10, 2022. In the year 2023, no dividend has been paid out based on the decision of the General Assembly of Shareholders of Agfa-Gevaert NV on May 9, 2023. In the year 2024, no dividend has been recommended by the Board of Directors.
Until the disposal of the Offset business, non-controlling interests had a material interest in nine subsidiaries in Greater China and the ASEAN region. As of April 2023, these subsidiaries have been disposed (see Note 20.1). The derecognition of non-controlling interests following the loss of control amounts to 33 million euro. During the first quarter of 2023, dividends amounting to 9 million euro have been paid to Shenzhen Brother Gao Deng Investment Group Co.
Remaining non-controlling interests relate to a few subsidiaries in Europa and are of minor importance to the Group. At December 31, 2023, non-controlling interests amount to 1 million euro (December 31, 2022: 41 million euro). In Greater China and the ASEAN region, the Group and its business partner Shenzhen Brother Gao Deng Investment Group Co., Ltd. combined as of 2010 their activities aiming at reinforcing the market position in the Greater China and the ASEAN region. Shenzhen Brother Gao Deng Investment Group Co., Ltd. has a 49% stake in Agfa Graphics Asia Ltd., the holding company of the combined operations of both parties. The subsidiaries of Agfa Graphics Asia Ltd. were:
* Agfa (Wuxi) Printing Plate Co., Ltd.;
* Agfa ASEAN Sdn. Bhd.;
* Agfa Imaging (Shenzhen) Co., Ltd.;
* Agfa Singapore Pte. Ltd.;
* Agfa Taiwan Co., Ltd.;
* Agfa Graphics Shanghai Co., Ltd.;
* Agfa Pty Ltd.;
* OOO Agfa Graphics;
* Agfa HuaGuang (Shanghai) Graphics.
As of April 2023, these entities have been disposed. The following table summarizes the information relating to the companies in which the business partner Shenzhen Brother Gao Deng Investment Group has a non-controlling interest of 49%, and information relating to the non-controlling interest in the company Agfa HuaGuang (Shanghai) Graphics. This company was newly established in 2019 by Agfa Graphics Asia, in which the Group has a stake of 51% and by Lucky HuaGuang Graphics Co. The latter holds a stake of 49% in this newly established company which brings the share in this newly established company belonging to minority shareholders to 73.99%. The information provided is before intercompany eliminations with other companies of the Agfa-Gevaert Group. The information provided for 2023 relates to the first quarter of 2023 before the loss of control.
| 2022 | 2023 | Agfa HuaGuang Graphics (73.99%) | Agfa HuaGuang Graphics (73.99%) | |
|---|---|---|---|---|
| Agfa Graphics Asia Ltd. and subsidiaries (49%) | Agfa Graphics Asia Ltd. and subsidiaries (49%) | |||
| MILLION EURO | ||||
| Current assets | 79 | 43 | - | - |
| Non-current assets | 35 | - | - | - |
| Current liabilities | 38 | 38 | - | - |
| Non-current liabilities | 2 | - | - | - |
| Net assets Agfa Graphics Asia Ltd. and its subsidiaries (consolidated) | 74 | 5 | - | - |
| Carrying amount of non-controlling interests in Agfa Graphics Asia Ltd. and its subsidiaries (49%) | 36 | - | ||
| Carrying amount of non-controlling interests in Agfa HuaGuang Graphics (73.99%) | 4 | - | ||
| Revenue | 172 | 119 | 24 | 18 |
| Profit for the year | (5) | - | 2 | - |
| Profit allocated to non-controlling interests in Agfa Graphics Asia Ltd. and its subsidiaries (49%) | (2) | 1 | ||
| Profit allocated to non-controlling interests in Agfa HuaGuang Graphics Asia (73.99%) | - | - | ||
| Other comprehensive income: translation differences | - | 1 | ||
| Other comprehensive income allocated to non-controlling interests in Agfa Graphics Asia Ltd. and its subsidiaries (49%) | (2) | - | 1 | - |
| Total comprehensive income allocated to non-controlling interests in Agfa Graphics Asia Ltd. | (2) | - | 2 | - |
| TOTAL OTHER COMPREHENSIVE INCOME (MILLION EURO) | Attributed to owners of the Company | Non-controlling interests | Translation reserve | Hedging reserve | Revaluation reserve | Remeasurement of the net defined benefit liability | TOTAL |
|---|---|---|---|---|---|---|---|
| Exchange differences on translation of foreign operations | 7 | - | - | - | - | 7 | 7 |
| Effective portion of changes in fair value of cash flow hedges, net of tax | - | (5) | - | - | - | (5) | (5) |
| Net changes in fair value of cash flow hedges reclassified to profit or loss, net of tax | - | 5 | - | - | - | 5 | 5 |
| Net changes in fair value of cash flow hedges transferred to initial carrying amount of hedged items, net of tax | - | - | - | - | - | - | - |
| Net change in fair value of equity investments through OCI | - | - | (2) | - | - | (2) | (2) |
| Remeasurement of the net defined benefit liability, net of tax | - | - | - | 125 | 125 | 125 | 125 |
| TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX | 7 | - | (2) | 125 | 125 | 130 | 130 |
| TOTAL OTHER COMPREHENSIVE INCOME (MILLION EURO) | Attributed to owners of the Company | Non-controlling interests | Translation reserve | Hedging reserve | Revaluation reserve | Remeasurement of the net defined benefit liability | TOTAL |
|---|---|---|---|---|---|---|---|
| Exchange differences on translation of foreign operations | (11) | - | - | - | - | (11) | (10) |
| Release of exchange differences of discontinued operations to profit or loss | (2) | - | - | - | - | (2) | (2) |
| Effective portion of changes in fair value of cash flow hedges, net of tax | - | 2 | - | - | - | 2 | 2 |
| Net changes in fair value of cash flow hedges reclassified to profit or loss, net of tax | - | 2 | - | - | - | 2 | 2 |
| Net changes in fair value of cash flow hedges transferred to initial carrying amount of hedged items, net of tax | - | - | - | - | - | - | - |
| Net change in fair value of equity investments through OCI | - | - | (1) | - | - | (1) | (1) |
| Remeasurement of the net defined benefit liability, net of tax | - | - | - | (12) | (12) | (12) | (12) |
| TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX | (13) | 3 | (1) | (12) | (12) | (23) | (22) |
| 2022 | 2023 | |
|---|---|---|
| Non-current liabilities | 41 | 69 |
| Revolving credit facility | - | 39 |
| Lease liabilities | 42 | 29 |
| Current liabilities | 25 | 14 |
| Liabilities to banks | 4 | - |
| Debentures | - | - |
| Bank overdrafts | - | - |
| Lease liabilities | 20 | 14 |
| TOTAL LOANS AND BORROWINGS | 66 | 83 |
On March 5, 2021, Agfa-Gevaert NV closed a three-year multi-currency revolving credit facility of 230 million euro. This facility is unsecured and provides for an extension of the term of two times one year. In the course of 2022, the facility has been extended with one additional year, extending the maturity date till March 2025. In January 2023, this facility had again been extended with one additional year till March 2026. The revolving credit facility will be used for general corporate purposes. The applicable interest rate is Euribor, Libor or its equivalent replacement benchmark (Reuters) and a margin. In general, drawdowns under this facility are made for short periods, but the Group has the discretion to rollover the liability under the existing committed loan facility. The conditions of the revolving credit facility stipulate that in case of a significant disposal of part of the Group, an event of default could occur. Pro-actively, the Group has obtained a waiver for the potential event of default related to the disposal of the Offset business. At December 31, 2023, there is a drawdown of 40 million euro under this facility. In 2022, there were no drawdowns under this facility.
| Notional amount | Outstanding amount | Currency | Interest rate | Maturity date | |
|---|---|---|---|---|---|
| 2022 | 2023 | 2022 | 2023 | 2022 | |
| 230 | 230 | - | 40 | EUR | |
| TOTAL | 230 | 230 | - | 40 |
The Group mainly leases buildings (such as office buildings and warehouses), company cars, other transportation equipment (such as forklifts), and other equipment (such as IT equipment). Building leases include both annually renewable contracts with options to renew the lease as well as leases with longer fixed lease terms. The lease liability relating to building leases amounts to 26 million euro or approximately 58% of the Group’s lease liability, and has an average estimated remaining lease term of three years. Company car leases typically run for a period of four to five years and represent approximately 40% of the Group’s lease liability, 18 million euro. Other leases represent less than 2% of the Group’s lease liability and include forklifts, printers, packaging systems, etc. Lease liabilities are payable as follows:
| Outstanding amount | Incremental borrowing rate | Outstanding amount | Incremental borrowing rate | |
|---|---|---|---|---|
| Maturing | 2022 | 2023 | ||
| < 1 year | 20 | 2.4% | 14 | 3.6% |
| Between 1-5 years | 35 | 3.2% | 26 | 4.4% |
| > 5 years | 6 | 5.3% | 3 | 3.7% |
| TOTAL | 62 | 43 |
Lease liabilities do not comprise costs for low value leases, short-term leases and other out of scope costs, amounting to 10 million euro in total (2022 re-presented: 10 million euro).
At December 31, 2023 there are no drawdowns of short-term facilities with banks. At December 31, 2022, liabilities to banks amounted to 4 million euro and comprised short-term facilities in LATAM and ASPAC countries with a weighted average interest rate of 6.36%.
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s consolidated statement of cash flows as cash flows from financing activities.
| Cash flows from financing activities (MILLION EURO) | Non-cash changes | |
|---|---|---|
| Balance at January 1, 2023 | ||
| Interests paid | (2) | |
| Net repayment/ proceeds of borrowings | (1) | 40 |
| New lease contracts | 19 | |
| Effect of changes in foreign exchange rate | 1 | |
| Revaluation of lease contracts | (1) | |
| Interest expense on loans and borrowings | 2 | |
| Business Combinations | (16) | |
| Balance at December 31, 2023 | 17 | 39 |
| Revolving credit facility | (1) | 39 |
| Liabilities to banks | 4 | - |
| Lease liabilities | 62 | - |
| Bank overdrafts | - | - |
| Total Loans and borrowings | 66 | 83 |
As of December 31, 2023, provisions amounted to 20 million euro (2022: 50 million euro).
| MILLION EURO | Environmental | Trade-related | Restructuring | Other | TOTAL |
|---|---|---|---|---|---|
| Provisions at December 31, 2022 | 2 | 9 | 31 | 8 | 50 |
| Provisions made during the year | - | - | 4 | - | 5 |
| Provisions used during the year | - | (1) | (20) | - | (22) |
| Business combinations divestment | - | (2) | (1) | (8) | (10) |
| Provisions reversed during the year | - | (2) | (2) | - | (4) |
| Exchange differences | - | - | - | 1 | 1 |
| Transfers | - | - | - | - | - |
| Provisions at December 31, 2023 | 2 | 5 | 11 | 1 | 20 |
Provisions for environmental protection relate to future re-landscaping, landfill modernization and the remediation of land contaminated by past industrial operations. Provisions for trade-related commitments at closing date and related flows during the year primarily comprise com- missions to agents, warranty provisions and commercial litigations. Provisions for restructuring mainly comprise employee related costs regarding the announced reorganization and transformation projects. Additions for this year mainly comprise costs for a voluntary leave plan for people aged above 60 in Belgium and individual efficiency restructuring initiatives. Other provisions comprise legal claims (including lawyer fees) and a legal claim regarding import duties.
The other payables at December 31, 2023, amounting to 9 million euro (2022: 6 million euro) comprise a liability mandatorily measured at fair value through profit or loss (2023: 2 million euro, 2022: 2 million euro) related to a deposit of 3.4 ton silver placed by a metal recovery and refining company valued at the quoted market price interests, share-based payment transactions (see Note 15), tantièmes, accruals for insurances, finance leases, liabilities against staff resulting from compensation of travel and other personal related expenses and other various amounts payable.
The other liabilities current and non-current at December 31, 2023, amounting in aggregate to 5 million euro (2022: 1 million euro) comprise the unearned portion of government grants and subsidies, unapplied lease payments paid in advance and other current liabilities.
The ultimate parent of the Group is Agfa-Gevaert NV (BE 0404 021 727), Mortsel (Belgium). The Company is the parent company for the following significant subsidiaries.
| Consolidated companies, December 31, 2023 | Location | Effective interest % |
|---|---|---|
| Agfa (Wuxi) Imaging Co. Ltd. | Wuxi/PR China | 99.16 |
| Agfa Corporation | Elmwood Park/United States of America | 100 |
| Agfa Finance Corp. | Wilmington/United States of America | 100 |
| Agfa Finance Inc. | Toronto/Canada | 100 |
| Agfa Finance Italy SpA | Milan/Italy | 100 |
| Agfa Finance NV | Mortsel/Belgium | 100 |
| Agfa Graphics Ltd. | Leeds/United Kingdom | 100 |
| Agfa Middle East FZCO | Dubai/United Arab Emirates | 100 |
| Agfa NV | Mortsel/Belgium | 100 |
| Agfa Graphics S.r.l. | Milano/Italy | 100 |
| Agfa S.A. (Arg) | Buenos Aires/Argentina | 100 |
| Agfa HealthCare Australia Pty. Ltd. | Scoresby/Australia | 100 |
| Agfa Do Brasil Ltda. | Sao Paulo/Brazil | 100 |
| Agfa HealthCare Chile Ltda. | Santiago de Chile/Chile | 100 |
| Agfa HealthCare Colombia Ltda. | Bogota/Colombia | 100 |
| Agfa HealthCare Corporation | Greenville/United States of America | 100 |
| Agfa HealthCare Denmark A/S | Copenhagen/Denmark | 100 |
| Agfa HealthCare Germany GmbH | Düsseldorf/Germany | 100 |
| Agfa HealthCare Hong Kong Ltd. |
Associated companies, December 31, 2023
| Name of the company | Location | Effective interest % |
|---|---|---|
| Penny Black BV | Antwerp/Belgium | 49.79 |
| Agfa-Gevaert HealthCare GmbH | Düsseldorf/Germany | 100 |
| Agfa-Gevaert Limited | Brentford/United Kingdom | 100 |
| Agfa-Gevaert Ltda. | Santiago De Chile/Chile | 100 |
| Agfa-Gevaert GmbH | Düsseldorf/Germany | 100 |
| Agfa-Gevaert S.A.S. | Pont-à-Marcq/France | 100 |
| Agfa-Gevaert S.p.A. | Milan/Italy | 100 |
| Lastra Attrezzature S.r.l. | Manerbio/Italy | 60 |
| Luithagen NV | Mortsel/Belgium | 100 |
| OOO Agfa | Moscow/Russian Federation | 100 |
| Agfa HealthCare Kazakhstan LLP | Almaty/Republic of Kazakhstan | 100 |
| Agfa HealthCare Ukraine LLC | Kyiv/Ukraine | 100 |
| PT Gevaert-Agfa HealthCare Indonesia | Jakarta/Indonesia | 100 |
| Agfa HealthCare Middle East FZ-LLC | Dubai/United Arab Emirates | 100 |
| Agfa HealthCare IT UK Limited | Middlesex/United Kingdom | 100 |
| Agfa South Africa (Pty) Ltd. | Gauteng/Republic of South Africa | 100 |
| Agfa Australia Pty Ltd. | Scoresby/Australia | 100 |
| Agfa Canada Inc. | Mississauga/Canada | 100 |
| Agfa US Corp. | Greenville/United States of America | 100 |
| Agfa HealthCare IT (Shanghai) Co. Ltd. | Shanghai/PR China | 100 |
| Agfa Hong Kong Ltd. | Hong Kong/PR China | 100 |
| Agfa HealthCare Vietnam Co. Ltd. | Ho Chi Minh City/Vietnam | 100 |
| Agfa Materials Korea Co. Ltd. | Seoul/Korea | 100 |
| Agfa Ré S.A. | Luxembourg/Luxembourg | 100 |
| Inca Digital Printers | Cambridge/United Kingdom | 100 |
| Agfa IJC | Cambridge/United Kingdom | 100 |
| Agfa Alterssicherungs-AG | Düsseldorf/Germany | 100 |
| Agfa HealthCare Inc. | Mississauga/Canada | 100 |
| Agfa HealthCare India Private Ltd. | Thane/India | 100 |
| Agfa HealthCare Luxembourg S.A. | Bertrange/Luxembourg | 100 |
| Agfa HealthCare Malaysia Sdn. Bhd. | Kuala Lumpur/Malaysia | 100 |
| Agfa HealthCare Mexico S.A. de C.V. | Mexico D.F./Mexico | 100 |
| Agfa HealthCare Norway AS | Oslo/Norway | 100 |
| Agfa HealthCare NV | Mortsel/Belgium | 100 |
| Agfa HealthCare Saudi Arabia Company Limited LLC | Riyadh/Saudi Arabia | 100 |
| Agfa HealthCare (Shanghai) Co. Ltd. | Shanghai/PR China | 100 |
| Agfa HealthCare Singapore Pte. Ltd. | Singapore/Republic of Singapore | 100 |
| Agfa HealthCare South Africa Pty. Ltd. | Gauteng/Republic of South Africa | 100 |
| Agfa HealthCare Spain S.A.U. | Barcelona/Spain | 100 |
| Agfa HealthCare Sweden AB | Kista/Sweden | 100 |
| Agfa HealthCare UK Limited | Brentford/United Kingdom | 100 |
| Agfa Inc. | Mississauga/Canada | 100 |
| Agfa Ltd. | Dublin/Ireland | 100 |
| Agfa Materials Corporation | Wilmington/United States of America | 100 |
| Agfa Materials Japan Ltd. | Tokyo/Japan | 100 |
| Agfa Materials Taiwan Co. Ltd. | Taipei/Taiwan | 100 |
| Agfa Solutions SAS | Rueil-Malmaison/France | 100 |
| Agfa Sp. z.o.o. | Warsaw/Poland | 100 |
| Agfa-Gevaert M.A.E.B.E. | Athens/Greece | 100 |
| Agfa-Gevaert Argentina S.A. | Buenos Aires/Argentina | 100 |
| Agfa-Gevaert B.V. | Rijswijk/the Netherlands | 100 |
| Agfa-Gevaert Colombia Ltda. | Bogota/Colombia | 100 |
In April 2023, the Agfa-Gevaert Group completed the sale of its Offset Solutions business to the Aurelius Group. This transaction encompassed share deals whereby 28 subsidiaries were disposed of. In Europe, 15 branches of Agfa NV were also included in this disposal.
Within the segment HealthCare IT, the Group offers Software as a Service (‘SaaS’) which are offsite, onsite or hybrid models under which software, hardware and services are offered to the customer on a pay-per-use basis or a monthly/ annual fee basis. The Group guarantees the management of the system over the contract period, and provides daily technical operations, maintenance and support to the customer. These contracts can comprise an operating lease component. The lease income related to this contracts amounts to 17 million euro during 2023 (2022: 14 million euro) and was recognized in revenue based upon use/consumption by the client. The Group moreover offers ‘bundle deals’ whereby equipment usage is financed by an uplift on consumables purchased by the customer. An operating lease component can be embedded in these type of contracts. The operating lease component is recognized in revenue based on the consumables purchase. The total of assets in operating lease contracts recognized in the statement of financial position at December 31, 2023 amounts to 4 million euro (December 31, 2022: 4 million euro) (see Note 28).
Contingencies resulted entirely from commitments given to third parties and comprise:
| MILLION EURO | ||
|---|---|---|
| 2022 | 2023 | |
| Bank guarantees | 36 | 33 |
| Other | - | - |
| Corporate guarantees | 184 | 173 |
| TOTAL | 220 | 206 |
Corporate guarantees mainly relate to guarantees given by the parent company on behalf of its subsidiaries towards banks and mainly relate to the revolving credit facility (see Note 38.1) and other negotiated credit lines. The purchase commitments in connection with major capital expenditure projects for which the respective contracts have already been awarded or orders placed amount to 19 million euro of which 11 million euro relates to the new ZIRFON plant.
The Group is currently not involved in any major litigation apart from those related to the AgfaPhoto insolvency.
AgfaPhoto
In connection with the divestment of the Consumer Imaging business of Agfa-Gevaert AG and certain of its subsidiaries, the Group entered into various contractual relationships with AgfaPhoto Holding GmbH, AgfaPhoto GmbH and their subsidiaries in various countries (the ‘AgfaPhoto group’), providing for the transfer of its Consumer Imaging business, including assets, liabilities, contracts and employees, to AgfaPhoto group companies. Subsequent to the divestment, insolvency proceedings have been opened with respect to AgfaPhoto GmbH and a number of its subsidiaries in both Germany and other countries. The Group had been sued through lawsuits or other actions in various countries in connection with a number of disputes. Those disputes have been resolved, with the exception of the following dispute. With respect to that divestment, the insolvency receiver of AgfaPhoto GmbH initiated various arbitration proceedings before the ICC International Court of Arbitration in Paris, France. In arbitration proceeding ICC N°. 15362, the receiver claimed damages allegedly suffered as a result of, inter alia, the alleged undercapitalization of AgfaPhoto GmbH and the alleged causation of the insolvency of AgfaPhoto GmbH. The ICC Tribunal issued a final award on May 31, 2018, through which it dismissed all of the insolvency receiver’s claims and ordered him to reimburse to Agfa a very substantial part of the costs that Agfa incurred in that arbitration proceeding. The insolvency receiver filed a request for the annulment of that final award before a German court (‘Oberlandesgericht Frankfurt/Main’ or ‘OLG’) in October 2018. By judgment of January 16, 2020, the OLG declared the annulment of the final award of May 31, 2018. The concerned Agfa companies appealed this judgment before the ‘Bundesgerichtshof’ (BGH). The BHG confirmed the judgment of the OLG by decision of November 26, 2020, which was communicated to Agfa on January 20, 2021. The concerned Agfa companies decided not to appeal this decision before the German Federal Constitutional Court (‘Bundesverfassungsgericht’). Consequently, the final award of May 31, 2018, has been set aside definitively. After an unsuccessful conciliation attempt the insolvency receiver of AgfaPhoto GmbH initiated a new arbitration proceeding before the ICC International Court of Arbitration in April 2021 (ICC N°. 26175), in which he pursues his claim for damages allegedly suffered as a result of the alleged undercapitalization of AgfaPhoto GmbH, in addition to the reimbursement of his costs borne in the first arbitration (ICC N°. 15362). An ICC Tribunal with three arbitrators was formed in the course of 2021. In the course of 2022, the insolvency receiver submitted his full Statement of Claim and Agfa submitted its Statement of Defense. In the course of 2023, the insolvency receiver submitted his full Reply Brief and Agfa submitted its Rejoinder Brief. A hearing took place from November 27, 2023, through December 1, 2023. Through May 2024, the parties shall submit post-hearing briefs and cost submissions (two rounds each). Agfa will vigorously defend itself in this arbitration procedure.
Other
Further legal risks for the Group exist with regard to a dispute with a former distributor of the Group’s products in Bolivia who claims compensation for breach of contract. The Group believes it has meritorious defenses in this lawsuit and is defending itself vigorously.
Key management personnel compensation (excluding employer’s social contribution) included in profit or loss can be detailed as follows:
| MILLION EURO | |||
|---|---|---|---|
| 2022 | 2023 | ||
| Directors | Executive Management | Directors | |
| Short-term employee benefits | 0.5 | 3.3 | 0.5 |
| Termination benefits | - | - | - |
| Post-employment benefits | 0.3 | 0.2 | |
| Share-based payment | 0.3 | (0.3) | |
| TOTAL | 0.5 | 3.9 | 0.5 |
As of December 31, 2023, there were no loans outstanding neither to members of the Executive Management nor to members of the Board of Directors. Pension provisions for members and retired members of the Executive Management, amounting to 11 million euro, are reflected in the statement of financial position of the Group at December 31, 2023. Key management personnel remuneration is also included in the Remuneration Report see pages 294-300.
There are no other material related party transactions in 2023. Other related party transactions in 2022 related to the non-controlling interests disposed off in the Offset sales transaction (more information is provided in Note 37.8).
There are no subsequent events.# INFORMATION ON THE AUDITOR’S ASSIGNMENTS AND RELATED FEES
The following fees for the services of KPMG Bedrijfsrevisoren/Réviseurs d’Entreprises were recognized as an expense:
| EURO | ||
|---|---|---|
| 2022 | 2023 | |
| Fees of the independent auditor with respect to the statutory audit mandate for the Company and the Group (Belgium) | 982,520 | 982,475 |
| Fees for non-audit services rendered by the independent auditor to the Company and the Group | ||
| Other attestation | 20,000 | 695,873 |
| Tax | - | - |
| Other non-audit | - | 11,300 |
| SUBTOTAL | 1,002,520 | 1,689,648 |
| Fees of independent auditor’s network with respect to a statutory audit mandate at the level of the Group (foreign operations) | 668,494 | 395,356 |
| Fees for non-audit services rendered by the independent auditor’s network to the Group (Belgian and foreign operations) | ||
| Other attestation | 25,078 | - |
| Tax | 127,425 | 78,001 |
| Other non-audit | 380,355 | 23,204 |
| SUBTOTAL | 1,201,352 | 496,562 |
| TOTAL | 2,203,872 | 2,186,210 |
The fees for the auditing of financial statements comprise those for the audits of the consolidated financial statements of the Agfa-Gevaert Group and the financial statements of its subsidiaries in Belgium and abroad. Other non-audit fees mainly relate to advice and due diligence assistance.
The consolidated financial statements have been prepared on the historical cost basis except for the following items in the statement of financial position:
• derivative financial instruments are measured at fair value;
• non-derivative financial instruments at fair value through profit or loss (FVTPL) are measured at fair value;
• debt and equity instruments at FVOCI are measured at fair value;
• contingent consideration assumed in a business combination is measured at fair value;
• liabilities for cash-settled shared-based payments arrangements are measured at fair value;
• plan assets attributable to the Company’s defined benefit retirement plans and other post-employment benefit plans are measured at fair value;
• DBO attributable to defined benefit plans are measured using the projected unit credit method.
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group (see Note 50.1.4). Control is the power over the entity, i.e. the right that gives the Company the ability to direct the relevant activities of related entity, and is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Goodwill is not amortized but tested for impairment on an annual basis and whenever there is an indication that the cash-generating unit to which goodwill has been allocated may be impaired. The impairment testing process is described in the appropriate section of these policies. Goodwill is stated at cost less accumulated impairment losses. With respect to associates, the carrying amount of goodwill is included in the carrying amount of the investment. The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognized amount of any non-controlling interests in the acquiree; and if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
• the net fair value of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss. Any contingent consideration payable is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration recognized as a liability are recognized in profit or loss. Costs related to the acquisition are expensed as incurred.
A discontinued operation is a component of the Group’s business, the operations and cash flows which can be clearly distinguished from the rest of the Group and which:
• represents a separate major line of business or geographic area of operations;
• is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or
• is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when an operation meets the criteria to be reclassified as held-for-sale. When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation has been discontinued from the start of the comparative year.
Non-controlling interests are measured at their proportionate share of the acquirees identifiable net assets at the date of acquisition.
A subsidiary is an entity controlled by the Company. Control exists when the Company has the power over the entity, i.e. the right that gives the Company the ability to direct the relevant activities of related entity, and is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of a subsidiary are included in the consolidated financial statements from the acquisition date until the date when the parent ceases to control the subsidiary.
On the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as a financial asset depending on the level of influence retained.
An associate is an entity in which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is presumed to exist when the Company holds between 20% and 50% of the voting power of another entity. An investment in an associate is accounted for using the equity method from the date on which it becomes an associate and is recognized initially at cost. The cost of the investment includes transaction costs. On acquisition of the investment, any difference between the cost of the investment and the Company’s share of the net fair value of the associate’s identifiable assets and liabilities is accounted for as follows:
• goodwill relating to an associate is included in the carrying amount of the investment;
• any excess of the Company’s share of the net fair value of the associate’s identifiable assets and liabilities over the cost of the investment is included as income in the determination of the Company’s share of the associate’s profit or loss in the period in which the investment is acquired.
Elimination of unrealized profits and losses on transactions with associates
Profits and losses resulting from upstream and downstream transactions between the Company – included its consolidated subsidiaries – and an associate must be eliminated to the extent of the Company’s interest in the associate. Upstream transactions are, for example, sales of assets from an associate to the Company. Downstream transactions are, for example, sales of assets from the Company to an associate.
When an investment ceases to be an associate
From the date when the Company ceases to have significant influence over an associate, it accounts for related investment in accordance with IFRS 9 from that date. On the loss of significant influence, the Company measures at fair value any investment the Company retains in the former associate.
The Company recognizes in profit or loss any difference between:
• the fair value of any retained investment and any proceeds from disposing of the (partial) interest in the associate; and
• the carrying amount of the investment at the date when significant influence is lost.
Amounts recognized in OCI in relation to the associate or joint venture are accounted for on the same basis as would be required if the investee had disposed of the related assets and liabilities directly.
Intragroup balances and transactions, including income, expenses and dividends, are eliminated in full. Unrealized profits and losses resulting from intragroup transactions that are recognized in assets, such as inventory and fixed assets, are eliminated in full. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in euro, which is the Company’s functional and presentation currency.
All transactions in currencies other than the functional currency are foreign currency transactions. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.Foreign currency gains and losses resulting from the settlement of such transactions and from the translation at closing rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss. However, foreign currency differences arising from the translation of the following items are recognized in OCI:
• an investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognized in OCI are reclassified to profit or loss);
• qualifying cash flow hedges to the extent that the hedges are effective.
Non-monetary assets and liabilities measured at historical cost that are denominated in foreign currencies are translated using the exchange rate at the date of the transaction.
A foreign operation is an entity that is a subsidiary, associate, joint venture or branch of the Company, of which the activities are based or conducted in a currency other than the euro. The financial statements of foreign operations are translated for the purpose of the consolidation as follows:
• assets and liabilities are translated at the closing rate;
• income and expenses are translated at average year-to-date exchange rates; and
• equity components are translated at historical rates, excluding current year movements, which are translated at rates approximating the rate at the time of the transaction.
All resulting exchange differences are recognized in other comprehensive income and accumulated in a separate component of equity being translation reserve. The amount attributable to any non-controlling interests is allocated to and recognized as part of non-controlling interests.
On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized.
On the partial disposal of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to non-controlling interests in that foreign operation. Any other partial disposal of a foreign operation – related to an associate, joint venture or branch of the Company – results in a reclassification to profit or loss of the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income.
A partial disposal of an entity’s interest in a foreign operation is any reduction in an entity’s ownership interest in a foreign operation, except for those reductions resulting in:
• the loss of control of a subsidiary;
• the loss of significant influence over an associate;
• the loss of joint control over a joint arrangement.
These reductions are accounted for as disposals resulting in a reclassification from other comprehensive income to profit or loss of the cumulative amount of the exchange differences relating to that foreign operation.
Revenue from contracts with customers is recognized according to the criteria set in IFRS 15 Revenue from contracts with customers. In recognizing revenue from contracts with customers a five-step approach is to be applied: first the contract with the customer should be identified; then the distinct performance obligations in the contract should be identified; as a third step the transaction price should be determined; then the transaction price should be allocated to the distinct performance obligations in the contract; and finally revenue is recognized when the distinct performance obligation is satisfied. The standard moreover specifies whether revenue should be recognized at a certain point in time or over a period of time. Revenue is recorded net of sales taxes, customer discounts and rebates.
The Group’s policy distinguishes revenue from the sale of goods, the rendering of services and multiple-element arrangements. Revenue from the sale of goods comprises revenue from the sale of consumables, chemicals, spare parts, standalone equipment and software licenses. Revenue from the rendering of services includes installation services, maintenance and post-contract support services. The Group also enters into arrangements combining multiple deliverables such as software, hardware/equipment and services, including training, maintenance and post-contract customer support, the ‘multiple-element arrangements.’ Freight charged to customers is recognized as revenue as incurred.
Revenue from the sale of goods is recognized when the customer obtains control of the goods and when it is probable that the agreed transaction price will be collected. In evaluating whether collectability is probable, the entity considers the customer’s ability and intention to pay that amount when it is due. Revenue from the sale of goods is, under IFRS 15, recognized upon delivery following applicable freight terms, at a point in time.
Revenue from the sale of stand-alone software licenses is recognized at a point in time, at the delivery of the source key. The license is recognized at a point in time as the Group provides the customer access to and a right to use the intellectual property as it exists at a point in time.
In case volume discounts incentives are offered to the customer, the expected volume rebates are estimated based on historical experience. The amount of the variable consideration is made based on the most likely amount-method. The variable consideration is recognized only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue will not occur.
Under the IFRS 15 standard, revenue from maintenance contracts is recognized straight-line over the maintenance period as the customer simultaneously receives and consumes the benefits from the maintenance over time. Revenue from installation and implementation services are recognized as rendered. The progress is measured based on input methods being the labor hours expended to date versus the estimated hours spend. When in a service contract multiple services are offered, the total consideration is allocated to all services based on their stand-alone selling price.
Multiple-element arrangements offer the customer a combination of several deliverables such as software, licenses, hardware, implementation services and maintenance and post-contract support services. For arrangements not requiring substantive customization of the software, each of aforementioned deliverables is assumed to qualify as a separate performance obligation. The total arrangement fee is allocated to the distinct performance obligations based on the stand-alone selling prices of the performance obligations. In case discounts are offered, a proportionate amount is allocated proportionally to each performance obligation based on their stand-alone selling price.
Within the HealthCare IT and Radiology Solutions business segments, most arrangements do not require significant customization or modification. Revenue allocated to the hardware portion of the arrangement is recognized on delivery when it creates value to the customer on a stand-alone basis. Hardware is considered as a distinct performance obligation as there is no transformative relationship between the hardware and other components of the contract. Revenue allocated to the software component is recognized after successful installation and acceptation at the client’s premises. The software license is a distinct performance obligation as the customer can benefit from the license with readily available resources. The license is recognized at a point in time as the Group provides the customer access to and a right to use the intellectual property as it exists at a point in time. Revenue from installation and implementation services are recognized as rendered. The progress is measured based on input methods being the labor hours expensed to date versus the estimated hours spend. Extended warranty whereby the customer purchases additional warranty separately, i.e. warranty that is adding additional services on top of the legal warranty or for a longer period than legal warranty, is considered as a distinct performance obligation within multiple-element arrangements.
Revenue recognized for which no billing has yet occurred is recognized in the statement of financial position as contract assets and advance payments received for which no revenue has been recognized is presented as contract liabilities.
Within the HealthCare IT segment, the Group also offers ‘Software as a service’ arrangements, whereby products and services including own IP and other services are offered through cloud computing under a subscription model on a pay-per-use model. Agfa offers a right to access the software as it exists throughout the license period. The cloud component is a service towards the customer who can access the software on an as-needed basis over the internet or a dedicated line. Revenue is recognized over time based on a pay-per-use schedule.
Within the Digital Print & Chemicals divisions, revenue from sale of equipment that require substantive installation activities is recognized when the installation of the equipment is finalized in accordance with the contractually agreed specifications. Installation services and equipment are considered highly interrelated and are identified as one performance obligation that is recognized at a point in time, i.e. at installation at the client’s premises.# AGFA-GEVAERT ANNUAL REPORT 2023
For the accounting treatment of post-employment plans, IFRS distinguishes defined contribution plans and defined benefit plans. The classification depends on which party – Company or employee – bears the actuarial and investment risk. In case of a defined contribution plan, the employee bears all the risks and therefore the Company does not recognize a liability in its statement of financial position except for any unpaid contribution. In case of a defined benefit plan, the Company bears the actuarial and investment risk and should consequently recognize a liability in its statement of financial position.
Contributions to defined contribution pension plans are recognized as an expense in profit or loss as incurred. They are allocated among functional costs: cost of sales, research and development expenses, selling and administrative expenses, following the functional area of the corresponding profit and cost centers to which related employees are attributed.
As from December 31, 2016, the accounting treatment for Belgian defined contribution plans with return guaranteed by law has been aligned with the accounting treatment of defined benefit plans.
A. Liabilities for post-employment benefits
For defined benefit plans, the amount recognized in the statement of financial position is determined as the present value of the defined benefit obligation less the fair value of any plan assets. Where the calculation results in a net surplus, the recognized asset does not exceed the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. The present value of the defined benefit obligations (DBO) and the service costs are calculated by a qualified actuary using the Projected Unit Credit (PUC) method. Under this method projected benefits that are payable each future year are discounted to the reporting date at the assumed interest rate. The resulting total benefit obligation is then allocated to past service, presenting the DBO and year-in-service, presenting the service cost. The assumed interest rate is the discount rate based on yields at reporting date on high-quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations. In determining the net present value of the future benefit entitlement for service already rendered (DBO), the Group considers future compensation and benefit increases. The DBO also comprises the present value from the effects of taxes payable by the plan on contributions or benefits relating to services already rendered. More information about the application of the PUC method for Belgian defined contribution plans can be found hereafter.
B. Defined benefit cost recognized in profit or loss and other comprehensive income
The amount charged to profit or loss consists of current service cost, past service cost, gain or loss on settlement, net interest cost and administrative expenses and taxes. Current service costs as well as administrative expenses and taxes, which are borne by the employer(s) participating to the plan, are allocated among functional costs: cost of sales, research and development expenses, selling and general administrative expenses, following the functional area of the corresponding profit and cost centers to which related employees are attributed. Past service cost and settlement gains (losses) are recognized immediately in profit or loss under Other operating income or Other operating expense when the plan amendment, curtailment or settlement occurs. Administrative expenses which are related to the management of plan assets and taxes directly linked to the return on plan assets – borne by the plan itself – are included in the return on plan assets and are recognized in other comprehensive income, net of income taxes (OCI). Net interest cost is recognized in profit or loss under other finance expense. It is calculated by applying the discount rate used to measure the defined benefit obligation to the net defined benefit liability. The net interest cost is broken down into interest income on plan assets and interest cost on the defined benefit obligation. The difference between the return on plan assets and the interest income on plan assets is included in line item post-employment benefits: remeasurements of the net defined benefit liability and recognized in other comprehensive income, net of income taxes. Next to the difference between the actual return and the interest income on plan assets, the line item ‘Post-employment benefits: remeasurements of the net defined benefit liability’ also comprises actuarial gains and losses resulting for example from an adjustment of the discount rate.
C. Defined contribution plans with return guaranteed by law
Belgian defined contribution plans are subject to the Occupational Pensions Act of April 2003. According to article 24 of this Act, affiliated persons are entitled to a guaranteed minimum return on contributions made by either the organizer of the plan or the employee. Some conditions in this law, such as the required level of minimum return, have been amended by the Act of December 18, 2015. Similar to the measurement of all other defined benefit plans, the net pension liability related to defined contribution plans with return guaranteed by law is calculated as the difference between the present value of the defined benefit obligation (DBO) and the fair value of the plan assets. As of December 31, 2016, the present value of the defined benefit obligation (DBO) and the service costs are calculated by a qualified actuary using the Projected Unit Credit (PUC) method. More information on the general principles of this method can be found under liabilities for post-employment benefits. Within the Belgian Agfa-Gevaert Group entities, all insured plans guarantee a fixed return up to the retirement age (so-called Branch 21 insured products). Depending on the nature of the insured contract, the DBO has been determined with or without future contributions and their related minimum returns up to the retirement age or exit. For the Top Performance Plan no future contributions were considered, for all other ‘Branch 21’ insured products recurring contributions are paid and therefore considered in the actuarial calculation. Similar to the Belgian DC-plans, the Group’s Swiss DC-plans are accounted for as DB-plans under IAS 19. In measuring the net liability related to Belgian and Swiss defined contribution plans with return guaranteed by law, the Group has applied paragraph 115 of IAS 19. Paragraph 115 states “Where plan assets include qualifying insurance policies that exactly match the amount and timing of some or all of the benefits payable under the plan, the fair value of those insurance policies is deemed to be the present value of the related obligations” up to the guaranteed rate of the insurer. The application of this paragraph 115 implies a market valuation of the retirement age contractual insured benefit, which impacts both the assets to account for and the DBO. In terms of applying the methodology of paragraph 115, management believes that the DBO calculation should reflect that the employee is entitled to the higher of the actual accumulated reserves and the minimum reserves. Therefore, the DBO calculation reflects this plan characteristic for every event, being leaving before retirement or staying until retirement.
Termination benefits are recognized as a liability and an expense when a Group company is demonstrably committed to either:
* terminate the employment of an employee or group of employees before the normal retirement date; or
* provide termination benefits as a result of an offer made in order to encourage voluntary redundancy and to the extent it is probable that the employees will accept the offer.
Where termination benefits fall due more than twelve months after the reporting date, they are discounted using a discount rate which is the yield at reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations. The interest impact of unwinding and re-measuring long-term termination benefits at adjusted discount rates at financial reporting date is reflected in profit or loss under ‘Other finance expense’ whereas the impact of increases and decreases of the Group’s commitments are presented under ‘Other operating expenses – Restructuring expenses’.
The Group’s net obligation in respect of long-term employee benefits, other than pension plans, post-employment life insurance and medical care, is the amount of future benefit that employees have earned in return for their service in current and prior periods. The obligation is calculated using the Projected Unit Credit method and is discounted to its present value and the fair value of any related assets is deducted. The discount rate used is the yield at reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations. Unlike the accounting treatment of post-employment defined benefit plans, remeasurements of other long-term employee benefits are not reflected in other comprehensive income. Instead, the impact of remeasurements is recognized in profit or loss.
Current employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A liability is recognized for the amount expected to be paid within twelve months if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.
The Group has cash-settled share-based payment transactions as it has granted a long-term variable compensation embedded in a Phantom Stock Option Plan to its CEO and key personnel members of the Group. This plan can result in an additional cash bonus. In the established share-based payment transaction, the eligible person directly participates in changes in value of the underlying equity instrument, being the shares of Agfa-Gevaert NV and, accordingly, the cash payment is based on the price or value of the equity instrument. Related share appreciation rights do not vest until the eligible persons have completed a specified period of service. Therefore, the Company recognizes the services received, and a liability to pay for them, as the eligible person renders service during that period. The liability is measured, initially and at the end of each reporting period until settled, at the fair value of the share appreciation rights, by applying an option pricing model, and the extent to which the employees have rendered service to date. Changes in fair value are recognized in profit or loss. Both the cost recognized at initial measurement as well as the impact of changes in fair value are considered as employee benefit expenses. Black and Sholes is the applied option pricing model.
For accounting purposes, research expenses are defined as costs incurred for current or planned investigations undertaken with the prospect of gaining new scientific or technical knowledge and understanding. Development expenses are defined as costs incurred for the application of research findings or specialist knowledge to plans or designs for the production, provision or development of new or substantially improved products, services or pro- cesses, respectively, prior to the commencement of commercial production or use.
Research and development expenses are incurred in the Agfa-Gevaert Group for in-house research and development activities as well as numerous research and development collaborations and alliances with third parties. Research and development expenses include, in particular, the running costs of the research and development departments such as personnel expenses, material costs and depreciation of fixed assets as well as the costs of laboratories, costs of applications development facilities, engineering departments and other departments carrying out research and development tasks, costs of contacts with universities and scientific institutes including expenses incurred for commissioned research and development work. Research costs cannot be capitalized. The conditions for capitalization of development costs are closely defined: an intangible asset must be recognized if, and only if, there is reasonable certainty of receiving future cash flows that will cover an asset’s carrying amount.
Interest income (expense) – net comprises interests receivable/payable in relation to items of the net financial debt position. Net financial debt is defined as current and non-current loans and borrowings and lease liabilities less cash and cash equivalents.
Other finance income (expense) – net comprises:
* interest received/paid on other assets and liabilities not part of the net financial debt position such as the net inter- est cost of defined benefit plans and the interest component of long-term termination benefits;
* exchange results on non-operating activities;
* changes in the fair value of derivative instruments economically hedging non-operating activities;
* the ineffective portion of cash flow hedges hedging non-operating activities;
* impairment losses recognized on financial assets;
* results on the sale of marketable securities;
* change in contingent consideration from a business combination; and
* other finance income (expense).
Interest income is recognized in profit or loss as it accrues, taking into account the effective yield on the asset. Dividend income is recognized in profit or loss on the date that the dividend is declared. All interest and other costs incurred in connection with borrowings are expensed as incurred using the effective interest rate. The interest expense component of lease payments is recognized in profit or loss using the effective interest rate method. The net interest cost of defined benefit plans is determined by multiplying the net defined benefit liability by the discount rate that is used to measure the defined benefit obligation, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability during the period as a result of contributions and benefit payments. The interest component of long-term termination benefits comprises the impact of unwinding the liability as well as the impact of the changed discount rate.
Income tax on the profit (loss) for the year comprises taxes paid or accrued and deferred tax expense (income). Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in other com- prehensive income, in which case it is recognized in other comprehensive income or if part of a business combination in which case it is recognized against goodwill.
In determining the amount of taxes paid or accrued and deferred tax expense (income), the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. Other tax receivables and liabilities relate to other tax, such as VAT, property tax and other indirect taxes. They are carried at cost. Both current and other tax receivables are offset against current tax liabilities, respectively other tax liabilities when they relate to taxes levied by the same taxation authority and are intended to be settled on a net basis and there is a legal right to offset.
Taxes paid or accrued are the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend. Current income tax for current and prior periods are, to the extent unpaid, recognized as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recog- nized as an asset.
Deferred tax is calculated using the balance sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for:
* taxable temporary differences on the initial recognition of goodwill;
* the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss); and
* differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseea- ble future.
The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the reporting date. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and credits can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax assets and deferred tax liabilities are offset in the statement of financial position if the entity has a legal right to settle current tax amounts on a net basis and the deferred tax amounts are levied by the same taxing author- ity on the same entity that intend to realize the asset and settle the liability at the same time.
Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carry- ing amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity-accounted investee as a whole. Intangible assets with indefinite useful lives, such as trademarks, are stated at cost less accumulated impairment losses. Intangible assets with indefinite useful lives are not amortized. Instead, they are tested for impairment annually and whenever there is an indication that the intangible asset may be impaired.
Intangible assets with finite useful lives are stated at cost less accumulated amortization and impairment losses. Research and development costs are expensed as they are incurred, except for certain development costs, which are capitalized when it is probable that a development project will be a success, and certain criteria, including technolog- ical and commercial feasibility, have been met. Capitalized development costs are amortized on a systematic basis over their expected useful lives.# 2.5.2 INTANGIBLE ASSETS
In accordance with IFRS 3 Business combinations, if an intangible asset is acquired in a business combination, the cost of that intangible asset is its fair value at the acquisition date. The fair value of an intangible asset reflects market expectations about the probability that the future economic benefits embodied in the asset will flow to the entity.
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.
Intangible assets with finite useful lives, such as acquired technology and customer relationships are amortized on a straight-line basis over their estimated useful lives, generally for periods ranging from five to 15 years. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. The cost of an item of property, plant and equipment comprises:
* its purchase price, including import duties and non-refundable purchase taxes;
* any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management;
* the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which the Company incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period;
* capitalized borrowing costs.
For self-constructed assets, directly attributable costs are direct cost of materials, direct manufacturing expenses, appropriate allocations of material and manufacturing overheads, and an appropriate share of the depreciation of assets used in construction. It includes the share of expenses for company pension plans and discretionary employee benefits that are attributable to construction and capitalized borrowing costs.
Expenses for the repair and maintenance of property, plant and equipment are usually expensed as incurred. They are, however, capitalized when they increase the future economic benefits embodied in the item of property, plant and equipment.
Property, plant and equipment is depreciated on a straight-line basis over the estimated useful life of the item. For leased assets, the depreciation period is the estimated useful life of the asset, or the lease term if shorter. The estimated useful lives of the respective asset categories are as follows:
| Asset Category | Useful Life (Years) |
|---|---|
| Buildings | 20 to 50 |
| Outdoor infrastructure | 10 to 20 |
| Plant installations | 6 to 20 |
| Machinery and equipment | 6 to 12 |
| Laboratory and research facilities | 3 to 5 |
| Vehicles | 4 to 8 |
| Computer equipment | 3 to 5 |
| Furniture and fixtures | 4 to 10 |
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
The Group classifies an asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets (or disposal groups) and its sale must be highly probable. Immediately before classification as held for sale, the Group measures the carrying amount of the asset (or all the assets and liabilities in the disposal group) in accordance with applicable IFRS. Then, on initial classification as held for sale, assets and disposal groups are recognized at the lower of their carrying amounts and fair value less costs to sell. Impairment losses are recognized for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. Assets classified as held for sale are no longer amortized or depreciated.
Financial assets comprise equity and debt instruments in another entity, cash and cash equivalents, loans receivable, trade receivables, receivables under finance leases and other receivables as well as derivative financial instruments. The Group initially recognizes loans and receivables on the date that they are originated. All other non-derivative financial assets are recognized on the trade date when the Group becomes a party to the contractual provisions of the instrument. A trade receivable without significant financing is initially measured at its fair value plus any transaction costs that are directly attributable to the acquisition of the financial assets. Transaction costs related to financial assets and liability carried at fair value through profit and loss are recognized in the income statement. The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the rights to receive the contractual cash flows on a financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. In a transaction where an entity neither transfers nor retains substantially all of the risks and rewards of ownership of a financial asset, the related asset is derecognized in case the entity lost control of the asset. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
The Group has the following categories of non-derivative financial assets: financial assets at amortized cost and financial assets at fair value through other comprehensive income. Its classification reflects the business model in which the assets are managed and their cash flow characteristics.
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. All the Group’s receivables – trade receivables, receivables under finance leases as well as other receivables – and cash and cash equivalents fit into aforementioned definition and are consequently measured at amortized cost.
A debt instrument is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss. The Group has made an irrevocable election for the investment in Digital Illustrate Inc. to classify it as FVOCI. The impact of subsequent measurement of this investment in equity securities is reflected in OCI under other reserves. This item in OCI will not be reclassified subsequently to profit or loss.
Financial liabilities comprise debentures, uncommitted bank facilities, revolving and other credit facilities, trade and other payables as well as derivative financial instruments. Financial liabilities are recognized initially at fair value on the trade date at which the Group becomes a party to the contractual provisions of the instrument. At initial recognition, the Group measures its financial liabilities at its fair value less any transaction costs that are directly attributable to the issuance of the financial liability. Non-derivative financial liabilities are subsequently measured at amortized cost except for financial liabilities that arise when a transfer of a financial asset does not qualify for de-recognition or when the continuing involvement approach applies. Interest-bearing loans and borrowings are stated at amortized cost with any difference between the initial amount and the maturity amount being recognized in profit or loss over the expected life of the instrument on an effective interest rate basis. If a transfer of a financial asset does not result in de-recognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received. In subsequent periods, the Group recognized any income on the transferred asset and any expense incurred on the financial liability. If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, and retains control of the transferred asset, the entity continues to recognize the transferred asset to the extent of its continuing involvement and recognizes an associated liability.# AGFA-GEVAERT ANNUAL REPORT 2023
The extent of the Group’s continuing involvement in the transferred asset is the extent to which it is exposed to changes in the value of the transferred asset. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the entity has retained. The associated liability is measured in such a way that the net carrying amount of the transferred asset and the associated liability is the amortized cost of the rights and obligations retained by the Group assuming the transferred asset is measured at amortized cost.
The Group de-recognizes a financial liability when its contractual obligations are discharged, cancelled or expired. The Group also de-recognizes a financial liability when the terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on modified terms is recognized at fair value. On de-recognition of the financial liability, the difference between the carrying amount extinguished and the consideration paid is recognized in profit or loss.
The Group uses derivative financial instruments primarily to manage its exposure to foreign currency risks and price changes in commodities arising from operational, financing and investment activities. The Group uses following types of derivative financial instruments: forward exchange contracts used for hedging, swap contracts used for hedging and other forward exchange contracts and swap contracts. The Group uses forward exchange contracts to hedge the variability in cash flows arising from changes in foreign exchange rates relating to future sales and purchases. Derivative financial instruments that are not designated as cash flow hedges are measured at fair value through profit or loss. In accordance with its treasury policy, the Group does not currently hold or issue derivatives for trading purposes. Derivative financial instruments are initially recognized at fair value on the date at which a derivative contract is entered into (trade date) and are subsequently re-measured at their fair value. In case cash flow hedge or net invest- ment hedge accounting is applied, the effective portion of any gain or loss is recognized in OCI, the non-effective portion in profit or loss. Transaction costs related to financial assets and liability carried at fair value through profit and loss are recognized in the income statement. The Group has the following categories of derivative financial instruments: derivatives not formally designated as hedging instruments and cash flow hedging instruments.
The Group’s forward exchange contracts and swap contracts, that are formally designated as cash flow hedging instruments, are subsequently re-measured at their fair value. Cash flow hedge accounting is applied to all hedges that qualify for hedge accounting when required documentation of the hedging relationship is in place and when the hedge is determined to be effective. When hedge accounting is applied, the effective portion of any gain or loss is recognized in OCI, the non-effective portion in profit or loss. With regard to hedge accounting, the Group applies the requirements of IFRS 9. This standard requires the Group to ensure that hedge accounting relationships are aligned with the Group’s risk management objectives and strategy and to apply a more qualitative and forward looking approach to assessing hedge effectiveness. The Group uses forward exchange contracts to hedge the variability in cash flows arising from changes in foreign exchange rates relating to future sales. The Group currently designates only the change of the spot element of the forward exchange contract as the hedging instrument in cash flow hedging relationships. Under IFRS 9, the change in the fair value of the forward element (‘forward points’) is accounted for as fair value through profit or loss and reflected in net finance costs. The types of hedge accounting transactions that the Group currently designates meet the requirements of IFRS 9 and are aligned with the Group’s risk management strategy and objectives. If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is termi- nated or exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in hedge reserve remains in other comprehensive income until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-finan- cial item’s initial cost or for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedge reserve are immediately reclassified to profit or loss.
Derivative financial instruments that are economic hedges but that do not meet the hedge accounting criteria of IFRS 9 are categorized as Mandatory at FVTPL and are accounted for as financial assets or liabilities at fair value through profit or loss. The impact in profit or loss is reflected in either other operating income and expense or net finance costs depending on the nature of the item economically hedged.
Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually and upon the occurrence of an indication of impairment. The impairment tests are performed annually at the same time each year and at the cash-generating unit level. The Group defines its cash-generating units based on the way that it monitors its goodwill and will derive economic benefit from the acquired goodwill and intangibles. The impairment tests are performed by comparing the carrying value of the assets of these cash-generating units with their recoverable amount, based on their future projected cash flows discounted at an appropriate pre-tax rate of return. The discount rate used in calculating the present value of the estimated future cash flows is based on a weighted average cost of equity and debt capital (WACC), using a debt-equity ratio of an average market participant. An additional risk premium was added to the cost of equity. The cost of debt is based on conditions on which comparable companies can obtain long-term financing. The forecasting risk related to silver is reflected in the cash flow projections. An impairment loss is recognized whenever the carrying amount of the cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in profit or loss. Consideration is given at each reporting date to determine whether there is any indication of impairment of the car- rying amounts of the Group’s property, plant and equipment and intangible assets with finite useful lives. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognized in profit or loss and the carrying amount of related asset is reduced through use of an allowance account. The recoverable amount of the Group’s property, plant and equipment and intangible assets with finite useful lives is the greater of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss recognized in prior periods for an asset other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized.
At each reporting date, the Group reviews the carrying amounts of its right-of-use assets to determine whether there is any indication of impairment. Indication of impairment exists when a lease concluded as a lessee becomes onerous in which case an impairment loss is recognized, measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized.
With regard to impairment of trade receivables, lease receivables and contract assets, the Group applies the simplified approach for the impairment evaluation, which implies that credit losses for these categories of assets are always measured at an amount equal to lifetime expected credit losses. Credit losses are measured as the present value of all cash shortfalls – i.e. the difference between the cash flows to which the entity is entitled to and what the entity expects to receive. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. The inputs and assumptions to the expected credit loss model are the following: significant financial difficulty of the counterparty, a default of more than 90 days past due, a possible bankruptcy of the counterparty, … The evaluation of possible impairment takes into account forward-looking elements.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. The Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component. The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The Group determines its incremental borrowing rate (IBR) twice a year based on the government bond yields per country and per maturity bucket obtained from Reuters and adds a risk premium reflecting the Group’s risk profile. The latter risk premium differs from the country risk classified according to the Organization of Economic Cooperation and Development (OECD). Depending on the low, medium or high risk of the country a different spread is added. As such a IBR-matrix is obtained reflecting six maturity buckets and 50 countries.
Lease payments included in the measurement of the lease liability comprise the following:
* fixed payments, including in-substance fixed payments;
* variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; and
* the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
There are no leases for which it is expected that the Group would need to pay a residual value guarantee.
The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there is a change in future lease payments arising from a change in an index or rate if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets (mainly related to IT equipment) and short-term leases. Short-term leases are leases with a lease term of twelve months or less. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
On the statement of financial position right-of-use assets are presented separately whereas lease liabilities are comprised in ‘Loans and borrowings.’ All lease payments that are due within 12 months after the balance sheet date are classified as current liabilities. All lease payments that are due later than 12 months after the balance sheet date are classified as non-current liabilities.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
The majority of the Group’s finance lease arrangements are concluded by Agfa Finance, i.e. Agfa Finance NV or its subsidiaries Agfa Finance Corp. and Agfa Finance Inc. On manufacturing leases, the Group recognizes revenue and related profit margin at the moment a Group’s manufacturing organization or any related company invoices Agfa Finance at commencement of the lease with the external customer. A commercial contract whereby a certain piece of equipment is financed by means of a medium or long-term agreement under which the customer commits to purchase a certain level of consumables at a mark-up price is called a ‘bundle deal.’ At each sale of consumables, the Group allocates the consideration received from this sale to a reduction of the outstanding lease receivable and revenue from sale of goods on the basis of their stand-alone selling prices. Receivables under finance leases are measured at an amount equal to the discounted future minimum lease payments. Finance lease income – presented as part of ‘Other operating income’ – is subsequently recognized based on a pattern reflecting constant periodic rate of return on the net investment using the effective interest method. On the statement of financial position receivables under finance leases are presented separately. All lease receivables that are due within 12 months after the balance sheet date are classified as current assets. All lease receivables that are due later than 12 months after the balance sheet date are classified as non-current assets. The Group applies the de-recognition and impairment requirements in IFRS 9 to the net investment in the lease. The Group recognizes lease payments received under operating leases as revenue, on a straight line basis over the lease term.
Other assets comprise deferred charges and other non-financial assets. Deferred charges relate to payments made by the Company before the balance sheet date in respect of the expenses of future periods (prepayments). Examples of deferred charges are payments of rent, interests and insurance premiums that were made before the balance sheet date but relate to a specific period after the balance sheet date. Non-financial assets are carried at cost. Deferred charges are recognized in profit or loss by the straight-line method or according to performance of the services received.
Raw materials, supplies and goods purchased for resale are valued at purchase cost. Work in progress and finished goods are valued at the cost of production. The cost of production comprises the direct cost of materials, direct manufacturing expenses, appropriate allocations of material and manufacturing overheads, and an appropriate share of the depreciation of assets used for production.It includes the share of expenses for company pension plans and discretionary employee benefits that are attributable to production. Administrative costs are included where they are attributable to production. Inventories are valued using the weighted-average cost method. If the purchase or production cost is higher than the net realizable value, inventories are written down to net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. The cost of inventories may not be recoverable in following situations:
* obsolete inventory: this is determined based on a list of non-moving or slow-moving inventory-items, including items approximating the expiry date;
* damaged or expired inventory items or products showing quality problems;
* declining selling prices.
Within the Group, write-downs of inventories mainly result from obsolescence.
Cash and cash equivalents comprise cash, checks received, and balances with banks and companies. Cash equivalents are highly liquid short-term financial investments that are subject to an insignificant risk of changes in value, are easily convertible into a known amount of cash and have a maturity of three months or less from the date of acquisition or investment.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognized as a deduction from retained earnings. When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and presented as a deduction from total equity under the caption ‘Reserve for own shares’. Repurchased shares are accounted for using settlement date accounting. Cancelled treasury shares are transferred from ‘Reserve for own shares’ to ‘Retained earnings’. When treasury shares are sold, the amount received is recognized as an increase in equity and the resulting surplus or deficit on the transaction is presented within share premium.
Provisions are recognized in the statement of financial position when a Group company has a present obligation (legal or constructive) as a result of a past event and when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the reporting date. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced to those affected by it. Future operating costs are not provided for.
In accordance with the Group’s published environmental policy and applicable legal requirements, a provision for site restoration in respect of contaminated land is recognized when the land is contaminated.
Trade-related provisions mainly comprise provisions for sales commissions and warranty and commercial litigations. A provision for product warranty is made at the time of revenue recognition and reflects the estimated costs of replacement that will be incurred by the Group.
A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract, which is determined based on the incremental cost of fulfilling the obligation under the contract and an allocation of other costs directly related to fulfilling the contract. Provisions are established for impending losses on purchase or sales contracts at the amount of the anticipated losses.
The Group applies IFRS 15 Revenue from contracts with customers, that introduced the concept of contract assets and contract liabilities. Contract liabilities comprise deferred revenue and advance payments received from customers as well as accruals for bonuses and rebates related to goods and services purchased by customers during the period.
Other liabilities primarily relate to unearned other operating income. Government grants are a typical example of unearned other operating income. They are recognized in profit or loss when there is a reasonable assurance that the conditions attached to the grants will be or are complied with and the grants will be received. Grants that compensate the Group for expenses incurred are recognized in profit or loss under the same functional reporting line item as the corresponding expenses. They are recognized as income over the periods necessary to match them on a systematic basis to the costs that are intended to be compensated. Grants awarded for the purchase or production of assets (Intangible assets or Property, plant and equipment) are recognized initially as other liability and then recognized in profit or loss as other income on a systematic basis over the useful life of the asset. Government grants for future expenses are recorded as other liabilities.
A number of new IFRS standards, amendments to IFRS standards and interpretations issued, were not yet effective for the year ended on December 31, 2023 and have not been applied in preparing the consolidated financial statements. The Group shall adopt these standards after endorsement by the European Union. It relates to:
Amendments to IFRS 16 Leases: Lease liability in a Sale and Leaseback
In September 2022, the IASB issued an amendment to IFRS 16 Leases related to the treatment of a lease liability in a sale and leaseback transaction. These amendments are effective for annual periods beginning on or after January 1, 2024. Earlier application is permitted. The amendment to IFRS 16 Leases specifies the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognise any amount of the gain or loss that relates to the right of use it retains. A sale and leaseback transaction involves the transfer of an asset by an entity (the seller-lessee) to another entity (the buyer-lessor) and the leaseback of the same asset by the seller-lessee. The amendment is intended to improve the requirements for sale and leaseback transactions in IFRS 16. It does not change the accounting for leases unrelated to sale and leaseback transactions. The amendments have been endorsed by the European Union. The application of this amendment will not have a material impact to the consolidated statements of the Group.
Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities as current or non-current, and deferral of effective date
In January 2020, the IASB issued amendments to IAS 1 related to the classification of liabilities. The amendments in Classification of liabilities as current or non-current (Amendments to IAS 1) affect only the presentation of liabilities in the statement of financial position – not the amount or timing of recognition of any asset, liability income or expenses, or the information that entities disclose about those items. A company classifies a liability as non-current if it has a right to defer settlement for at least twelve months after the reporting period. The amendments clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. They clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability. The amendments are applicable to annual periods beginning no later than January 1, 2024. These amendments have been endorsed by the European Union. The application of this amendment will not have a material impact to the consolidated financial statements of the Group.
Amendments to IAS 1: Non-current liabilities with Covenants
In October 2022, the IASB issued an amendment to IAS 1 Non-Current liabilities with Covenants effective for annual periods beginning on or after January 1, 2024. Earlier application is permitted. The amendment clarifies how an entity classifies debt and other financial liabilities as current or non-current in particular circumstances. Under the 2022 amendments, only covenants of a liability arising from a loan arrangement, which an entity must comply with on or before the reporting date affect the classification of that liability as current or non-current. The 2022 amendments, as opposed to the proposed amendments in the 2021 ED, do not require an entity to present separately non-current liabilities for which the entity’s right to defer settlement is subject to compliance with future covenants within twelve months. Instead, the 2022 amendments require entities to disclose information about such covenants and related liabilities in the notes. These amendments have been endorsed by the European Union. The application of this amendment will not have a material impact to the consolidated financial statements of the Group.• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Supplier Finance Arrangements
In May 2023, the IASB issued amendments to IAS7 Statements of cash flows and IFRS 7 Financial instruments: Supplier Finance Arrangements effective for annual periods beginning on or after January 1, 2024. Earlier application is permitted. Some relief from providing certain information in the year of initial application is available. The amendments introduce additional disclosure requirements for companies that enter into supplier finance arrangements. These amendments have not yet been endorsed by the EU. The Group will apply these amendments after endorsement. The application of this amendment will not have a material impact to the consolidated financial statements of the Group.
• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
In August 2023, the IASB issued amendments to IAS 21 effective for annual reporting periods beginning on or after 1 January 2025 with early adoption permitted. These amendments clarify when a currency is exchangeable into another currency (and when it is not). When a currency is not exchangeable, a company needs to estimate a spot rate. The company’s objective when estimating a spot rate is that it reflects the rate at which an orderly exchange transaction would take place at the measurement date between market participants under prevailing economic conditions. The amendments contain no specific requirements for estimating a spot rate. Under the amendments, companies will need to provide new disclosures to help users assess the impact of using an estimated exchange rate on the financial statements. These amendments have not yet been endorsed by the EU. The Group will apply these amendments after endorsement. The application of this amendment will not have a material impact to the consolidated financial statements of the Group.
Statutory auditor’s report to the general meeting of Agfa-Gevaert NV on the consolidated financial statements as of and for the year ended December 31, 2023
Free translation of unqualified statutory auditor’s report originally prepared in dutch.
In the context of the statutory audit of the consolidated financial statements of Agfa-Gevaert NV (“the Company”) and its subsidiaries (jointly “the Group”), we provide you with our statutory auditor’s report. This includes our report on the consolidated financial statements for the year ended December 31, 2023, as well as other legal and regulatory requirements. Our report is one and indivisible.
We were appointed as statutory auditor by the general meeting of May 10, 2022, in accordance with the proposal of the board of directors issued on the recommendation of the audit committee and as presented by the workers’ council. Our mandate will expire on the date of the general meeting deliberating on the annual accounts for the year ended December 31, 2024. We have not been able to identify the exact date of our initial appointment. However, we can confirm that we have performed the statutory audit of the consolidated financial statements of the Group for at least 46 consecutive financial years.
We have audited the consolidated financial statements of the Group as of and for the year ended December 31, 2023, prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board and as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium. These consolidated financial statements comprise the consolidated statement of financial position as at December 31, 2023, the consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended and notes, comprising material accounting policies and other explanatory information. The total of the consolidated statement of financial position amounts to 1.368 million EUR and the consolidated statement of profit or loss shows a loss for the year of 101 million EUR.
In our opinion, the consolidated financial statements give a true and fair view of the Group’s equity and financial position as at December 31, 2023 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board and as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium.
We conducted our audit in accordance with International Standards on Auditing (“ISAs”) as adopted in Belgium. In addition, we have applied the ISAs as issued by the IAASB and applicable for the current accounting year while these have not been adopted in Belgium yet. Our responsibilities under those standards are further described in the “Statutory auditors’ responsibility for the audit of the consolidated financial statements” section of our report. We have complied with the ethical requirements that are relevant to our audit of the consolidated financial statements in Belgium, including the independence requirements. We have obtained from the board of directors and the Company’s officials the explanations and information necessary for performing our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We refer to note 27 “Goodwill and Intangible assets” and note 50.13 “Impairment” of the consolidated financial statements.
The level of judgement required by management in its assessment of impairment, which principally relates to the inputs used in both forecasting and discounting future cash flows to determine the recoverable amount.
Our audit procedures
Our audit procedures included:
We refer to note 17 “Income taxes” and note 50.7.2 “Deferred tax” of the consolidated financial statements.
Description
The Group has significant tax losses and deductible temporary differences from past business performance for which a deferred tax asset of 74 million Euro has been recognized, of which more than half of this balance is related to the HealthCare IT division. There is an inherent uncertainty involved in assessing the availability of future taxable profits, which determines the extent to which deferred tax assets are or are not recognized. Due to the significance of the balance as well as the judgment involved in the estimations described above, the recoverability of deferred tax assets is a key audit matter for our audit.
Our audit procedures
Our audit procedures included:
The Group provides retirement benefits in most countries in which it operates. Retirement benefits are organized through defined contribution plans as well as defined benefit plans. The Group funds its obligations in relation to those plans via insurance plans and segregated assets in Pension Funds. The net defined benefit liability for Belgium, Germany, UK and US together represents 98% of the total net defined benefit liability.
Post-employment benefits are a Key Audit Matter due to:
* The size of the balance (€486m which represents 36% of total equity and liabilities); and
* The significant estimates made in valuing the Group’s post-employment benefit obligations and underlying assets. Small changes in assumptions and estimates used to value the Group’s net post-employment benefit liabilities would have a significant effect on the Group’s financial position.
Our audit procedures included:
* We updated our understanding of the Group’s valuation process.
* We assessed the competence, objectivity and capabilities of the external actuarial experts engaged by management.
* We challenged the key assumptions, being the discount rates, inflation rates and mortality expectations underlying the valuation of the Group’s post-employment benefit obligations with the support of our actuarial specialists. This included a comparison of key assumptions used against externally derived data.
* We verified the accuracy of the census data underlying the actuarial valuation and reconciled the fair value of the plan assets with external confirmations.
* We assessed the overall reasonableness of the valuation outcome.
* Furthermore, we assessed the appropriateness of the Group’s disclosures in respect of employee benefits, which are included in note 13 of the consolidated financial statements.
We refer to note 8 “Revenue” and note 50.3 “Revenue from contracts with customers” of the consolidated financial statements.
For the year ended December 31, 2023, the Group recorded revenue amounting to €1.150m. We identified the recognition of revenue as a key audit matter because revenue is one of the key performance indicators of the Group (including management bonus arrangements) and is, therefore, subject to an inherent risk of manipulation by management to meet targets or expectations and because errors in the recognition of revenue could have a material impact on the Group’s profit for the year. This leads to an increased audit risk relating to sales cut-off (revenues not being recorded in the proper accounting period) and manual interventions on revenue recognition.
Our audit procedures included:
* Evaluating the design, implementation and operating effectiveness of key controls (including IT environment) over the existence, accuracy and timing of revenue recognition.
* Challenging the revenue recognition policies adopted by the Group by making inquiries of management and inspecting a sample of sales transactions to assess the Group’s timing of revenue recognition with reference to the requirements of the prevailing accounting standards.
* Assessing whether revenue had been recognized in the appropriate accounting period by comparing a sample of sales transactions around the year-end with relevant underlying documents (e.g. delivery documentation).
* Inspecting manual adjustments to revenue, enquiring of management as to the reason for such adjustments and comparing the details of the adjustments with relevant underlying documentation.
The board of directors is responsible for the preparation of these consolidated financial statements that give a true and fair view in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board and as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium, and for such internal control as board of directors determines, is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the board of directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the board of directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance as to whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of the users taken on the basis of these consolidated financial statements.
When performing our audit we comply with the legal, regulatory and professional requirements applicable to audits of the consolidated financial statements in Belgium. The scope of the statutory audit of the consolidated financial statements does not extend to providing assurance on the future viability of the Group nor on the efficiency or effectivity of how the board of directors has conducted or will conduct the business of the Group. Our responsibilities regarding the going concern basis of accounting applied by the board of directors are described below.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also perform the following procedures:
We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. For the matters communicated with the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter.# Other legal and regulatory requirements
Responsibilities of the Board of directors
The board of directors is responsible for the preparation and the content of the board of directors’ annual report on the consolidated financial statements and the other information included in the annual report.
Statutory auditor’s responsibilities
In the context of our engagement and in accordance with the Belgian standard which is complementary to the International Standards on Auditing as applicable in Belgium, our responsibility is to verify, in all material respects, the board of directors’ annual report on the consolidated financial statements and the other information included in the annual report, and to report on these matters.
Aspects concerning the board of directors’ annual report on the consolidated financial statements and other information included in the annual report
Based on specific work performed on the board of directors’ annual report on the consolidated financial statements, we are of the opinion that this report is consistent with the consolidated financial statements for the same period and has been prepared in accordance with article 3:32 of the Companies’ and Associations’ Code.
AGFA-GEVAERT ANNUAL REPORT 2023
In the context of our audit of the consolidated financial statements, we are also responsible for considering, in particular based on the knowledge gained throughout the audit, whether the board of directors’ annual report on the consolidated financial statements and other information included in the annual report:
• Letter to the Shareholders
• Key Figures 2023
contain material misstatements, or information that is incorrectly stated or misleading. In the context of the procedures carried out, we did not identify any material misstatements that we have to report to you.
The non-financial information required by article 3:32 §2 of the Companies’ and Associations’ Code has been included in the board of directors’ annual report on the consolidated financial statements, which is part of section Non-Financial Report of the annual report. The Company has prepared this non-financial information based on Global Reporting Initiatives (GRI) standards. In accordance with art 3:80 §1, 1st paragraph, 5° of the Companies’ and Associations’ Code, we do not comment on whether this non-financial information has been prepared in accordance with the GRI Standards.
Information about the independence
• Our audit firm and our network have not performed any engagement which is incompatible with the statutory audit of the consolidated accounts and our audit firm remained independent of the Group during the term of our mandate.
• The fees for the additional engagements which are compatible with the statutory audit referred to in article 3:65 of the Companies’ and Associations’ Code were correctly stated and disclosed in the notes to the consolidated financial statements.
European Single Electronic Format (ESEF)
In accordance with the draft standard on the audit of compliance of the Financial Statements with the European Single Electronic Format (hereafter “ESEF”), we have audited as well whether the ESEF-format is in accordance with the regulatory technical standards as laid down in the EU Delegated Regulation nr. 2019/815 of 17 December 2018 (hereafter “Delegated Regulation”).
The Board of Directors is responsible for the preparation, in accordance with the ESEF requirements, of the consolidated financial statements in the form of an electronic file in ESEF format (hereafter “digital consolidated financial statements”) included in the annual financial report. It is our responsibility to obtain sufficient and appropriate information to conclude whether the format and the tagging of the digital consolidated financial statements comply, in all material respects, with the ESEF requirements under the Delegated Regulation.
In our opinion, based on our work performed, the format of and the tagging of information in the official Dutch version of the digital consolidated financial statements as per December 31, 2023, included in the annual financial report of Agfa-Gevaert NV, are, in all material respects, prepared in compliance with the ESEF requirements under the Delegated Regulation.
Other aspect
• This report is consistent with our additional report to the audit committee on the basis of Article 11 of Regulation (EU) No 537/2014.
Antwerp, April 10, 2024
KPMG Bedrijfsrevisoren - Réviseurs d’Entreprises
Statutory Auditor represented by Frederic Poesen
Bedrijfsrevisor / Réviseur d’Entreprises
Statutory accounts
The following pages are extracts of the statutory annual accounts of Agfa-Gevaert NV prepared under Belgian accounting policies. The management report of the Board of Directors to the Annual General Meeting of Shareholders and the annual accounts of Agfa-Gevaert NV as well as the Auditor’s Report, will be filed with the National Bank of Belgium within the statutory stipulated periods. These documents are available on request from Agfa’s Investor Relations department and at www.agfa.com/investorrelations.
Only the Consolidated Annual Financial Statements as set forth in the preceding pages present a true and fair view of the financial position and performance of the Agfa-Gevaert Group. The Statutory Auditor’s Report is unqualified and certifies that the non-consolidated financial statements of Agfa-Gevaert NV for the year ending December 31, 2023 give a true and fair view of the financial position and results of the Company in accordance with all legal and regulatory dispositions.
| MILLION EURO | 2022 | 2023 |
|---|---|---|
| I. Operating income | ||
| A. Turnover | 416 | 456 |
| B. Stocks of finished goods, work and contracts in progress (increase +,decrease -) | 18 | (6) |
| C. Own work capitalized | 13 | 13 |
| D. Other operating income | 71 | 71 |
| E. Non-recurring operating income | - | - |
| Total operating income | 518 | 534 |
| II. Operating charges | ||
| A. Raw materials, consumables | ||
| 1. Purchases | 247 | 207 |
| 2. Stocks (increase -, decrease +) | (10) | 13 |
| B. Services and other goods | 136 | 123 |
| C. Remuneration, social security costs and pensions | 185 | 187 |
| D. Depreciation of and other amounts written off formation expenses, intangible and tangible fixed assets | 24 | 21 |
| E. Amounts written off stocks, contracts in progress and trade debtors (appropriations +, write-backs -) | - | - |
| F. Provisions for liabilities and charges (appropriations +, uses and write-backs -) | (5) | (8) |
| G. Other operating charges | 12 | 12 |
| H. Non-recurring operating charges | - | 2 |
| Total operating charges | 589 | 557 |
| III. Operating profit/Loss | (71) | (23) |
| IV. Financial income | 361 | 155 |
| V. Financial charges | (295) | (143) |
| VI. Gain/ Loss for the period before taxes | (5) | (11) |
| VII. Transfer from deferred taxes | - | - |
| VIII. Income taxes | (1) | - |
| IX. Gain/ Loss of the period | (6) | (11) |
| X. Transfer from untaxed reserves | - | - |
| XI. Gain/ Loss of the period available for appropriation | (6) | (11) |
| Appropriation account | ||
| A. Profit to be appropriated | (502) | (513) |
| 1. Gain (loss) of the period available for appropriation | (6) | (11) |
| 2. Accumulated profits (losses) | (496) | (502) |
| B. Withdrawals from capital and reserves | - | - |
| C. Transfer to capital and reserves | - | - |
| D. Accumulated profits (losses) | (502) | (513) |
| F. Profit to be distributed | - | - |
Income Statements
SUMMARY VERSION OF STATUTORY ACCOUNTS OF AGFA-GEVAERT NV
Balance sheet
MILLION EURO | December 31, 2022 | December 31, 2023
---|---|---
Assets | |
I. Formation expenses | 1 | 1
II. Intangible fixed assets | 14 | 8
III. Tangible fixed assets | 47 | 62
IV. Financial fixed assets | 742 | 836
V. Amounts receivable after more than 1 year | 4 | 4
VI. Stocks and contracts in progress | 140 | 121
VII. Amounts receivable within one year | 548 | 350
VIII. Current investments | - | -
IX. Cash at bank and in hand | 13 | 4
X. Deferred charges and accrued income | 6 | 5
| 1,515 | 1,391
Liabilities | |
I. Capital | 187 | 187
II. Share premium account | 211 | 211
IV. Reserves | 283 | 283
V. Accumulated profits | (502) | (513)
VI. Investment grants | - | 6
| 179 | 174
VII. Provisions and deferred taxes | 21 | 13
VIII. Amounts payable after more than one year | 624 | 740
IX. Amounts payable within one year | 691 | 463
X. Accrued charges and deferred income | - | 1
| 1,515 | 1,391
The Company applies the Belgian Corporate Governance Code 2020 as reference code. This Code can be consulted on www.corporategovernancecommittee.be. In 2020, the Articles of Association of the Company have been conformed to the new Code of Companies and Associations (Law of March 23, 2019). In 2020, the Board of Directors revised the Corporate Governance Charter of the Company in order to adapt this Charter to the provisions of the Belgian Corporate Governance Code 2020. Within the scope of this revision, the option for a monistic governance structure has also been evaluated and confirmed. The complete Corporate Governance Charter of the Company is published on www.agfa.com/investorrelations.
Unless otherwise stated in the relevant sections of this Statement, the Company is completely in line with the Belgian Corporate Governance Code 2020 for the financial year 2023.
The governance structure of the Company is built up around the Board of Directors, the Chief Executive Officer (CEO) and the Executive Committee (Exco). The Board of Directors is assisted by a Nomination and Remuneration Committee and an Audit Committee.
CORPORATE GOVERNANCE STATEMENT
Board of Directors
As the ultimate management body of the Company, the Board of Directors is empowered to carry out any necessary or useful actions for the achievement of the corporate purpose, the exception being the powers reserved by law for the General Meeting of Shareholders (such as amendments to the articles of association, capital increases other than through the authorized capital, capital decreases). The powers and operation of the Board of Directors are described extensively in the Corporate Governance Charter.# Corporate Governance Statement
The articles of association determine that the Board of Directors meets whenever the interest of the Company so requires or following a request by two directors. In 2023, eight effective meetings took place, as well as a limited number of short discussions per conference call. In the course of 2023, the Board of Directors discussed and decided upon, inter alia: defining the corporate strategy and key policies, the transformation process of the Agfa-Gevaert Group, the investment in the new ZIRFON plant, the closing of the Offset Solutions transaction, the perspectives for 2024 and the action plans for the years to come, ESG related topics, recommendations from the various Committees to the Board of Directors, risk management, the approval of budgets, cost control scenarios, the evolution of important litigations and the approval of the annual accounts. Directors likely to have conflicting interests with regard to any item on the agenda must disclose the conflict before any deliberation and must abstain from deliberating and voting on that item. More particularly, the directors must not put themselves in conflict situations as described in the Corporate Governance Charter of the Company. Should such an event occur against their will, they must disclose it before any deliberation relating to the conflicting item and must abstain from deliberating and voting on that item.
The articles of association of the Company provide that the Board of Directors has at least six members, who do not need to be shareholders and who are appointed for a renewable maximum term of four years. The majority of the members are to be non-executive directors, including a minimum of three independent directors. The mandate of Vantage Consulting BV, permanently represented by Mr. Frank Aranzana, ended immediately after the General Meeting of May 9, 2023. The shareholders elected to reappoint Vantage Consulting BV, permanently represented by Mr. Frank Aranzana, as independent director of the Company for the duration of four (4) years. Likewise, the mandate of Mr. Klaus Röhrig ended immediately after the General Meeting of May 9, 2023. The shareholders elected to reappoint Mr. Röhrig, as non-executive director of the Company for the duration of four (4) years. Lastly, the mandate of H F Routh Consulting LLC, permanently represented by Ms. Helen Routh, had also ended immediately after the General Meeting of May 9, 2023. The shareholders elected to reappoint H F Routh Consulting LLC, permanently represented by Ms. Helen Routh, as independent director of the Company for the duration of four (4) years. The Board therefore consists today of the following seven members:
(1) Independent director in accordance with article 7:87 §1. of the Code of Companies and Associations.
The mandate of PJY Management BV, permanently represented by Mr. Pascal Juéry will expire immediately after the General Meeting of Shareholders of May 14, 2024. PJY Management BV, permanently represented by Mr. Pascal Juéry shall be eligible for re-election. At the General Meeting, it therefore will be proposed to the shareholders to reappoint PJY Management BV, permanently represented by Mr. Pascal Juéry, as executive director of the Company for the duration of four (4) years.
Frank Aranzana (°1958 - French)
Holds a Bachelor’s degree in Economics and Political Sciences from IEP Paris and a Bachelor’s degree in Law from Nice University. He later obtained a Master’s degree in Management from ESSEC Paris. He started his career in 1986 with Dow Chemical, where he worked in sales, marketing and business management. In 1996, he joined DuPont Dow Elastomers as Business Director. In 1999, he joined UCB as a Director of the Radcure business unit and subsequently Specialty Chemicals, which were sold to Cytec Industries in 2005. He became Vice President of Cytec Surface Specialties and in 2008 President of Cytec Specialty Chemicals, member of Cytec’s Executive Leadership team and an Officer of Cytec Industries Inc. In 2013, he was appointed CEO of Allnex, the leading producer of coating resins acquired by Advent International Private Equity and until 2020, he was an Advent Operating partner, sitting on Allnex’s Advisory Committee. Frank Aranzana joined the Board of Directors in May 2019 and was elected Chairman of the Board in August 2020.
Current mandates:
* Chairman of the Board at Anqore
* Industrial Advisor at CVC Capital Partners
Line De Decker (°1974 - Belgian/British)
Is a senior executive with over 25 years’ extensive experience operating at management board level in large, complex, regulated organizations. She combines her excellent communication, influencing and change management skills with an exceptional track record of leading businesses through critical transformations. Mrs. De Decker holds a Law degree from the Universities of Leuven and Barcelona, as well as a Master in Tax Management from Solvay Business School. She is the Chief People & Sustainability Officer and a member of the Executive Committee at Aliaxis, a world leader enabling access to water and energy through innovative fluid management solutions. Prior to joining Aliaxis, she was Senior Vice President and Head of Transformation at GlaxosmithKline (GSK), where she led a global initiative aimed at transforming the company, creating new structures and processes fit for the future. Before taking up this role in the global strategy team, she held multiple senior HR roles in Belgium and the UK in the Corporate, Vaccines, Pharma and Consumer business. Prior to GSK, Mrs. De Decker worked at DuPont in Belgium and Spain, where she was involved in setting up their global business services. She started her career at PriceWaterhouse- Coopers and UCB, as a tax and reward specialist. Line De Decker joined the Agfa-Gevaert Board of Directors in May 2022.
Current mandates:
* Member of the Executive Committee at Aliaxis
Pascal Juéry (°1965 - French)
Is a graduate from ESCP Business School in Paris, France. He provides more than 30 years of experience in the chemical and advanced material industries. Pascal Juéry started his career in finance and soon demonstrated his ability to lead various global businesses as well as hold key functional responsibilities. Between 2010 and 2019, he was a member of the Executive Committee of Rhodia and then Solvay, where he took an active part in the group’s portfolio and business transformation. Pascal Juéry joined the Agfa-Gevaert Board of Directors in 2020. As from February 1, 2020, he became CEO of Agfa-Gevaert.
Current mandates:
* Board member at Desmet-Ballestra
* Board member at Flint Group
Mark Pensaert (°1964 - Belgian)
Holds a Master of Law from the State University of Ghent (Belgium) and later obtained a Master of Law from the Cambridge University St. Catharine’s College. He started his career in 1988 in London with Lazard Brothers & Co, one of the leading independent global investment banks with principal offices in New York, Paris and London. Between 1992 and 1996, he was finance director of Interbuild NV and Rombouts NV. In 1996, he became CFO of Carestel NV (currently part of the Autogrill Group). Between 2000 and 2004, he returned to the international M&A business by rejoining Lazard Frères in Paris to help establish and set up the M&A platform for Lazard in the Benelux. In 2004, he became a Partner and started the Amsterdam office covering the Benelux. In 2008, he joined, as CEO, Leonardo & Co, a spin-off from Lazard, to establish their network in Continental Europe and from September 2015 until July 2018, he served as Chairman of the investment banking division of Alantra Partners, a global investment banking and asset management group quoted on the Madrid Stock Exchange. Mark Pensaert joined the Agfa-Gevaert Board of Directors in 2018.
Current mandates:
* Member Supervisory Board of Rabobank
Christian Reinaudo (°1954 - French)
Is a graduate from the ‘Ecole de Physique et de Chimie Industrielles de Paris’ and holds a doctorate from the University of Paris (France). He started his career with Alcatel, where he managed several multibillion euro global businesses and international sales and services organizations, including the Cable Group of Alcatel (now Nexans), the Submarine Networks Division and the whole Optics Group. He entered the Executive Committee of Alcatel in early 2000 as Executive Vice-President. After managing the AsiaPacific Region, he managed the integration and the transition process associated with the merger of Alcatel and Lucent Technologies. In 2007, he was appointed President Northern and Eastern Europe of Alcatel-Lucent and he joined the Board of Directors of Alcatel-Lucent (Belgium). Early 2008, Christian Reinaudo joined Agfa-Gevaert to be President of Agfa HealthCare. Christian Reinaudo joined the Agfa-Gevaert Board of Directors in 2010. As from May 2010 until February 2020, he was CEO of Agfa-Gevaert.# AGFA-GEVAERT ANNUAL REPORT 2023
Klaus Röhrig (°1977 - Austrian) holds a Master of Economics and Business Administration from Vienna University of Economics and Business Administration. In 2000, Klaus Röhrig started his career at Credit Suisse First Boston in London, focusing on corporate finance and M&A for technology companies. In 2006, he joined Elliott Associates where he was responsible for the funds’ investments in the German speaking countries as well as selected debt, equity and sovereign investments. In 2015, Klaus Röhrig founded Active Ownership S.à r.l. (AOC). Throughout his career, he focused on identifying investment opportunities, structuring of investments and process-driven value creation. Klaus Röhrig joined the Agfa-Gevaert Board of Directors in November 2018. From May 2019 until August 2020, he was Chairman of the Board of Directors.
Current mandates:
* Member of the Supervisory Board of Formycon AG
* Member of the Supervisory Board of Francotyp-Postalia Holding AG
* Member of the Supervisory Board of Fagron NV
* Member of the Board of Directors of MAM Baby AG
Helen Routh (°1962 - British/American) is a board director, advisor and senior executive with more than 25 years’ global healthcare technology experience in business management, strategy and innovation. She has a PhD in Physics, specializing in medical ultrasound from University College Cardiff (UK). Until 2017, she held diverse business and functional roles in healthcare at Philips, working across products, software and services. She was the General Manager of Philips Research in North America and General Manager of Philips’ global Clinical Informatics businesses. As Senior VP of Strategy and Innovation, she led the development of Innovation Strategy across Royal Philips and was head of the Integrated Solutions team. She currently works in the US and Europe with public and private companies and clinical groups focused on the use of data to drive new solutions, business models and outcome improvements and as an advisor to Nina Capital. Helen Routh joined the Agfa-Gevaert Board of Directors in May 2019.
Current mandates:
* Non-Executive Director Ultromics
* Non-Executive Director of Health Innovation Manchester
* Non-Executive Director of Quantivly
The Audit Committee completes the tasks as described in article 7:99 §4 of the Code of Companies and Associations and assists the Board of Directors in achieving its mission of control in the broadest sense. Its powers and the way it functions are described extensively in chapter 5.1 of the Corporate Governance Charter. As from May 14, 2019, the Audit Committee consists of the following three non-executive Directors: Mr. M. Pensaert, Chairman, Mr. K. Röhrig and Ms. H. Routh (as permanent representative of H F Routh Consulting LLC since June 21, 2022). Two of them are independent directors. They all meet the requirements described in article 7:99 §2 of the Code of Companies and Associations, with respect to the expertise in the field of accounting and audit. The Committee held five meetings in 2023. Amongst other items the following topics were discussed: the verification of the annual accounts 2022, the quarterly results of 2023, the appointment of the Statutory Auditor, the reports of the internal audit department, the follow-up of important legal issues such as the AgfaPhoto files, QARA (Quality Assurance & Regulatory Affairs) and the evaluation of risk management in the Group.
The Nomination and Remuneration Committee has been entrusted by the Board of Directors with responsibilities concerning the nomination for appointment, reappointment or dismissal of Directors and members of the Executive Management, the remuneration policies and the individual remuneration of the Directors and the members of the Executive Management. Operation and functions of the NRC are described extensively in chapter 5.2 of the Corporate Governance Charter. The Nomination and Remuneration Committee consists exclusively of non-executive directors. Since May 2022, the Nomination and Remuneration Committee consists of the following three non-executive directors: Mr. C. Reinaudo, Chairman, Mrs. L. De Decker and Mr. F. Aranzana. Two of them are independent directors. The NRC had three meetings in 2023 and the following agenda items, among others, were discussed: the composition of the Board of Directors and its Committees, talent management, including the identification of critical roles and their succession planning, the performance and remuneration of the Executive Management and Senior Executives, the preparation of the remuneration report, the employee engagement survey and Agfa Group values.
| Board | AC | NRC |
|---|---|---|
| Mr. Frank Aranzana | 8/8 | 3/3 |
| Mr. Christian Reinaudo | 8/8 | 3/3 |
| Ms. Helen Routh | 8/8 | 5/5 |
| Mr. Pascal Juéry | 8/8 | |
| Mr. Mark Pensaert | 8/8 | 5/5 |
| Mr. Klaus Röhrig | 7/8 | 4/5 |
| Mrs. Line De Decker | 7/8 | 3/3 |
The Executive Management is at present entrusted to a Managing Director/CEO assisted by an Exco. Together they represent the Executive Management. The CEO is responsible for the implementation of the Company’s policy and strategy laid down by the Board of Directors. Consequently, he has the most extensive powers regarding day-to-day management as well as a number of specific special powers. These powers are described extensively in the Corporate Governance Charter. In order to allow the Board of Directors to exercise its control, the CEO regularly reports about his activities and about the development of the subsidiaries and affiliated companies. Since March 13, 2024, date on which Mr. Jeroen Spruyt was appointed President Radiology Solutions, the leadership team is composed as follows:
Agfa’s Executive Management is responsible for the Group’s internal control and risk systems including those regarding financial reporting as approved by the Board of Directors. Internal control over financial reporting includes the assessment of the relevant risks, the identification and monitoring of key controls and actions taken to correct deficiencies as identified. The Audit Committee reviews the effectiveness of the internal control and risk management systems.
Agfa’s control environment comprised in 2023 of central finance functions such as consolidation and reporting, tax, treasury, investor relations on the one hand and finance functions at the level of the three business divisions on the other. All finance functions report (in)directly to the Chief Financial Officer. All Group entities follow uniform central accounting policies and reporting requirements which are described in Agfa’s Group Consolidation Accounting Manual.
Based on review meetings with the central functions and the management of the business divisions, the Executive Management had, in 2023, a process in place to identify, assess and follow-up on risks including those with regard to the financial reporting process on a regular basis. The Executive Management reports on those risks to the Audit Committee. These risks are being reviewed by the Audit Committee who might define further actions to the Executive Management.
In 2023, each business division was responsible for the monitoring of the financial performance and forecasting. Each business division reports to the Executive Management. The consolidation process, based on a more extensive reporting, was performed on a quarterly basis and reviewed by the Executive Management and the Audit Committee who might define actions to the business divisions and the central functions.
All entities use uniform central reporting tools and report in accordance with the instructions and reporting guidelines set out by the central reporting department. Financial information (including key performance indicators) was prepared on a consistent basis for each business division and at consolidated level and reviewed by the appropriate responsible. The Executive Management reports to the Audit Committee on all key risk factors on a regular basis.
One of the responsibilities of the financial department is to improve the procedures used to prepare and process financial information. Regular reviews are conducted on the key control procedures in the preparation of financial information in the subsidiaries and at Group level in order to ensure proper application of instructions and guidelines with regards to financial reporting. Internal Audit performs reviews on the monitoring of internal policies, guidelines and controls, both relating to financial reporting and operational matters such as sales, production and R&D. Internal Audit reports to the Audit Committee which monitors the effectiveness. The Company Secretary has been appointed as Compliance Officer to monitor the Directors’ and other designated persons’ compliance with the Group’s policy with regard to inside information and market manipulation.
See p. 30 through p. 36.# Evaluation of the Board of Directors and its Committees
The major features of the evaluation process for the Board of Directors and its Committees include assessing how the Board of Directors and its Committees operate, checking that the important issues are suitably prepared and discussed, evaluating the actual contribution of each Director’s work and their involvement in discussions and decision-making. The complete evaluation process is extensively dealt with in the chapters 3, 4 and 5 of the aforementioned Corporate Governance Charter.
The last formal evaluation occurred in 2021, when an internal evaluation process has taken place on the initiative of the Chairman of the Board and in collaboration with the Chairman of the Nomination and Remuneration Committee, involving contacts with the members of the Board of Directors and of the Executive Management in order to evaluate the functioning of the Board and the Executive Management (on individual level as well as on a corporate body level) on the one hand and the cooperation and relation between both bodies on the other. The criteria taken into consideration for the evaluation concerned the size, composition and performance of the Board of Directors and the Committees, as well as the quality of the interaction between the Board of Directors and the Executive Management. The results were based on answers given to a questionnaire (containing about seventy questions divided into ten chapters) on the one hand and the feedback provided during individual interviews on the other.
In the years where no formal evaluation is scheduled, the Chairman of the Board will informally inquire the members of the Board and of the Executive Management at regular intervals regarding the functioning of the various corporate bodies.
See p. 97 through p. 103.
The Board of Directors’ proposals to the General Meeting of Shareholders with regard to the allocation and distribution of the result take into consideration several factors, such as the Company’s financial situation, the operating results, the current and expected cash flows and the plans for expansion.
Consistent with its principles and values, Agfa formulated a Code of Dealing immediately after the IPO in 1999. The Code contains rules with which Directors and members of senior management have to comply in case they wish to deal in financial instruments of the Company. The Code forbids these persons, inter alia, to deal during well-defined periods preceding the announcement of its financial results and the announcement of other price sensitive information.
Taking into account the Market Abuse Regulation, which became effective on July 3, 2016, Agfa has changed this Code to make it compliant with the current legal regulations. The Code of Dealing was last modified on May 11, 2021. The adapted version of the Code is available on the Company’s website as part of the Corporate Governance Charter.
AGFA-GEVAERT ANNUAL REPORT 2023
See Note 47 p. 249.
See p. 38-39.
Agfa-Gevaert NV has no branches.
In order to minimize the risk of fluctuations in exchange rates and interest rates, the appropriate hedge contracts were implemented. These mainly include short-term transactions in foreign currencies, option contracts and interest swaps. Their implementation occurs according to uniform guidelines, is subject to internal audits, and is limited to cover for the operational activities, and related money investments and financial transactions. Further detail hereon is provided in the ‘Notes to the Consolidated Financial Statements’.
See chapter Non-financial information p. 18 through p. 127.
Agfa-Gevaert NV’s Statutory Auditor is KPMG Bedrijfsrevisoren, represented by Mr. Frederic Poesen. The Statutory Auditor was reappointed at the General Meeting of Shareholders of May 10, 2022, for another three-year term. Hence, the mandate would normally expire immediately following the General Meeting of Shareholders of May 13, 2025. Mandatory rotation rules however will require KPMG to resign after having conducted the audit with respect to financial year 2023. Hence, the mandate will end immediately following the General Meeting of Shareholders of May 14, 2024.
It will be proposed to the shareholders to appoint PwC Bedrijfsrevisoren BV/PwC Réviseurs d’Entreprises SRL, represented by Sofie Van Grieken BV, in turn represented by Mrs. Sofie Van Grieken, as Statutory Auditor for a three-year term.
See p. 307.
The Board of Directors hereby states that the Annual Report has been drafted in accordance with article 34 of the Royal Decree of November 14, 2007. In this respect the Board of Directors explains that:
Agfa-Gevaert NV (Company number 0404.021.727, Register of Legal Entities Antwerp) is a listed company under Belgian law, incorporated on June 10, 1964. The registered office of the Company is located at Septestraat 27, 2640 Mortsel, Belgium. The full and annotated financial data and statements are available on the website of the Company, www.agfa.com, or at the registered office of the Company itself.
Information with respect to environmental matters can be found in the Sustainability Report of the Company which is integrated in this Annual Report.
The Company’s Articles of Association are available at the clerk’s office of the Enterprise Court of Antwerp (Belgium) and at the registered office of the Company. They can also be found on the website of the Company, www.agfa.com. The Corporate Governance Charter and the Code of Dealing can be found on the Investor Relations page of the website www.agfa.com. The annual accounts are filed with the National Bank of Belgium. The annual accounts, together with the related reports, are communicated every year to the holders of registered shares and upon request to any interested party.
The Annual Report, the remuneration report, the statutory and consolidated annual accounts including the report of the auditor, as well as the remuneration policy, can be found on the website www.agfa.com and at the registered office. The convocation to the General Meeting of Shareholders is published in the financial press and can also be found on the website. As regards financial information, the financial results and the other required information are published on the website of the Company, in compliance with the guidelines of the Financial Services and Markets Authority (FSMA). The decisions with respect to the nomination and dismissal of members of the Board of Directors are published in the Annexes to the Belgian State Gazette. Any interested party can register free of charge on www.agfa.com to receive the press releases and required financial information by e-mail. The Annual Report is available on the website www.agfa.com, in Dutch and English.
AGFA-GEVAERT ANNUAL REPORT
The Nomination and Remuneration Committee (NRC) meets at least three times a year to, among other things, develop proposals to the Board on the remuneration policy and level for the Directors and the members of the Executive Management. The NRC had three meetings in 2023 and the following agenda items, among others, were discussed: the composition of the Board of Directors and its Committees, talent management, including the identification of critical roles and their succession planning, the performance and remuneration of the Executive Management and Senior Executives, the preparation of the remuneration report, the employee engagement survey and Agfa Group values.# REMUNERATION REPORT
The NRC would like to refer to the Annual Financial Report of the Group for a detailed description of the operating results that have affected the results of the different divisions of the Group, and consequently the remuneration of the Executive Management. As a result of the closing of the Offset Solutions transaction, Mr. Luc Delagaye resigned in April 2023 from the Executive Management team. There were no other changes in the composition of the Executive Management team in 2023.
The new remuneration policy, approved by the shareholders at the Annual Meeting held on May 11, 2021, is available on the Company's website: www.agfa.com/investorrelations. This remuneration policy is aligned with the Shareholders' Rights Directive II, the Companies and Associations Code and the Corporate Governance Code 2020.
The current remuneration policy for Directors and members of the Committees was established at the Annual Meeting held in 2021 and varies according to the number of meetings attended. The remuneration of the Chairman of the Board is an all-inclusive fee. Further details on the remuneration for fiscal year 2023 are provided later in this remuneration report.
The remuneration package of the members of the Executive Management consists of (i) a base salary, (ii) benefits, (iii) short and long-term variable remuneration and (iv) pension-related benefits. These various components are described in more detail in the Company's remuneration policy. The grant of any variable fee to the Executive Management as well as the amount shall be based on the collective results of the Company and the achievement of predetermined targets as set by the Board of Directors. Typically, performance is measured against clear and measurable collective targets, both at Group and divisional level, and personal targets. Collective targets are mainly quantitative and financially driven (e.g. EBITDA, net cash flow,…). However, they also include a sustainable development target. Personal objectives may relate to, for example, delivery of specific projects, individual leadership measures or other specific individual targets. The impact of the Global Bonus Plan on the remuneration of the Executive Committee in the year 2023 is further specified in this Remuneration Report.
The Annual Meeting held on May 9, 2023, approved the previous remuneration report with 82.9% of the votes (compared to 83.9% of the votes in 2022). When drafting and revising its remuneration policy, Agfa-Gevaert takes into account the votes and suggestions of its shareholders. Agfa-Gevaert invites its shareholders to an open and transparent communication on its remuneration policy and other Corporate Governance aspects. The approval rate of the remuneration report is a clear indication of the very broad support for the current remuneration policy. In response to some limited comments Agfa received on the previous remuneration report, Agfa provides in this year’s report some additional disclosures and clarifications on the short- and long-term variable remuneration of the Executive Management.
As stipulated in the current policy, non-executive Directors receive a fixed fee and possibly an attendance fee. The non-executive Directors do not receive any performance-related remuneration directly related to the Company's results. The non-executive Directors also did not receive any part of their remuneration in the form of shares of the company for the fiscal year 2023. In accordance with the policy, non-executive Board Members do not receive equity-related remuneration as referred to under provision 7.6 of the 2020 Corporate Governance Code. Agfa adheres to Principle 6 of the Code and considers that remunerating the non-executive Directors entirely in cash serves better the avoidance of any conflicts of interests and guarantees their complete independence of mind. Expenses (e.g. for intercontinental or international travel) are reimbursed separately. The CEO only receives compensation as a member of the Executive Management. He does not receive a separate fee for his role as Executive Director.
The remuneration policy was revised when Mr. Juéry joined the company as CEO. The new remuneration policy submitted for approval to the Annual Meeting held in 2021 builds on the approach taken in the contractual arrangements with Mr. Juéry. This new policy is rolled out further as new members join the Executive Committee or whenever the current members of the Executive Committee wish to adapt their existing contractual arrangements to such new policy. The NRC regularly reviews the appropriateness of remuneration for Executive Management and, where necessary, makes proposals to the Board of Directors for changes.
The remuneration of the CEO consists of a fixed remuneration, a short-term variable remuneration and a long-term variable remuneration. The allocation and amount of short-term variable compensation depends on the Group results and on the achievement of personal objectives set by the Board of Directors. The long-term variable compensation was embedded in a Stock Appreciation Rights Plan and may lead to an additional cash bonus. The main elements of this Stock Appreciation Rights Plan (which - for the avoidance of doubt - is not a stock-option plan) are:
The remuneration of the members of the Executive Committee consists of a fixed remuneration, a short-term and a long-term remuneration. The short-term cash component amounts to 50% of their base salary and is based on achieving financial and personal objectives of no more than one year. The long-term component is covered by a Stock Appreciation Rights Plan. The variable compensation may be partially converted into a pension contribution. In addition, the members of the Executive Committee are entitled to certain benefits in kind, such as a company car, a representation allowance, meal vouchers and various insurances. Upon the recruitment of one of the Executive Committee Members, a sign-on bonus of 100,000 euro was awarded to buy out lost compensation which the candidate held prior to joining Agfa-Gevaert. The second half of this sign-on bonus was paid out in 2023.
Table 1 - Compensation of the Directors for the reported fiscal year. The Directors do not receive any compensation from other companies of the Agfa-Gevaert Group.
| name of director, position | Fixed remuneration | Variable remuneration | Extra- odinary items | Pension | Total remuneration | Proportion of fixed and variable remuneration |
|---|---|---|---|---|---|---|
| Board Fee | Committee Fee | Other benefits | One-year variable | Multi-year variable | ||
| Frank Aranzana (1) | 180,000 € | 0 € | 0 € | 0 € | 0 € | 0 € |
| Pascal Juéry (2) | 0 € | 0 € | 0 € | 0 € | 0 € | 0 € |
| Mark Pensaert (3) | 52,500 € | 25,000 € | 0 € | 0 € | 0 € | 0 € |
| Christian Reinaudo (4) | 52,500 € | 15,000 € | 0 € | 0 € | 0 € | 0 € |
| Klaus Röhrig (5) | 50,000 € | 12,500 € | 0 € | 0 € | 0 € | 0 € |
| Helen Routh (6) | 52,500 € | 12,500 € | 0 € | 0 € | 0 € | 0 € |
| Line De Decker (7) | 52,500 € | 7,500 € | 0 € | 0 € | 0 € | 0 € |
| TOTAL | 440,000 € | 72,500 € | 0 € | 0 € | 0 € | 0 € |
(1) Chairman of the Board and member of the NRC. Permanent representative of Vantage Consulting SRL.
(2) Executive director (CEO). Permanent representative of PJY Management BV.
(3) Non-executive director and chairman of the Audit Committee. Permanent representative of MRP Consulting BV.
(4) Non-executive director and chairman of the NRC.
(5) Non-executive director and member of the Audit Committee.
(6) Non-executive director and member of the Audit Committee. As natural person until June 20, 2022. Permanent representative of H F Routh Consulting LLC as of June 21, 2022.
(7) Non-executive director and member of the NRC. Permanent representative of Albert House BV.
Table 2 - CEO compensation.
| name of director, position | Fixed remuneration | Variable remuneration | Extra- ordinary items | Pension | Total remuneration | Proportion of fixed and variable remuneration |
|---|---|---|---|---|---|---|
| Base remuneration | Fees | Other benefits | One-year variable | Multi-year variable | ||
| Pascal Juéry (1) - CEO | 780,000 € | 0 € | 0 € | 402,896 € | 0 € | 0 € |
(1) Executive director (CEO). Permanent representative of PJY Management BV.
Table 3 - Aggregated remuneration of the members of the Executive Committee in 2023.# AGFA-GEVAERT ANNUAL REPORT 2023
| name of director, position | Fixed remuneration | Variable remuneration | Extra-ordinary items | Pension | Total remuneration | Proportion of fixed and variable remuneration (*) |
|---|---|---|---|---|---|---|
| Executive Committee | 1,162,902 € | 34,200 € | 46,394 € | 560,037 € | 0 € | 172,537 € |
| TOTAL | 1,162,902 € | 34,200 € | 46,394 € | 560,037 € | 0 € | 172,537 € |
Variable : 28.34%
Fixed 71.66%
(*) Extraordinary items are not taken into account for the calculation of the proportion of fixed and variable remuneration. The “Fees” referred to in this table represent remuneration received by a member of the Executive Committee for a directorship in subsidiaries.
Next to Mr. Pascal Juéry, all members of the Executive Committee are entitled to receive stock-based compensation as long-term variable compensation.
| name & position | Specification of the plan | Main conditions of the share option plan | Information regarding the reported financial year | Opening balance | Closing balance | award date | vesting date | end of retention period | exercise period | strike price |
|---|---|---|---|---|---|---|---|---|---|---|
| # options awarded | # options vested | value underlying shares @ vesting date | value underlying shares @ offer date | value @ strike price | share options awarded and unvested | gain @ vesting date | ||||
| Pascal Juéry (1) | SAR 2020 | 1/02/2020 | 1/02/2021 | 2/1/2023 | 1/02/2023 | - | 4.75 € | - | ||
| a) 200,000 | a) 200,000 | - | ||||||||
| SAR 2020 | 1/02/2022 | unlimited | b) 405,935 | b) 405,935 | ||||||
| SAR 2020 | 1/02/2023 | c) 0 | d) 0 | |||||||
| SAR 2021 | 9/03/2021 | 9/03/2022 | 3/9/2024 | 9/03/2024 | - | 9/03/2029 | 3.78 € | |||
| 200,000 | a) 200,000 | a) 133,333 | 66,667 | |||||||
| SAR 2021 | 9/03/2023 | 9/03/2024 | - | 9/03/2029 | b) 334,000 | b) 222,667 | ||||
| SAR 2021 | 9/03/2024 | 9/03/2024 | - | 9/03/2029 | c) 0 | d) 0 | ||||
| SAR 2022 | 9/03/2022 | 9/03/2023 | 3/9/2025 | 9/03/2025 | - | 9/03/2030 | 3.60 € | |||
| 400,000 | a) 200,000 | a) 66,667 | 133,333 | |||||||
| SAR 2022 | 9/03/2024 | 9/03/2025 | - | 9/03/2030 | b) 288,000 | b) 96,000 | ||||
| SAR 2022 | 9/03/2025 | 9/03/2025 | - | 9/03/2030 | c) 0 | d) 0 | ||||
| SAR 2023 | 9/03/2023 | 9/03/2024 | 3/9/2026 | 9/03/2026 | - | 9/03/2031 | 2.86 € | |||
| 600,000 | a) 200,000 | a) 0 | 200,000 | |||||||
| SAR 2023 | 9/03/2025 | 9/03/2026 | - | 9/03/2031 | b) 318,000 | b) 0 | ||||
| SAR 2023 | 9/03/2026 | 9/03/2026 | - | 9/03/2031 | c) 0 | d) 0 | ||||
| Executive Committee | SAR 2021 | 9/03/2021 | 9/03/2022 | 3/9/2024 | 9/03/2024 | - | 9/03/2029 | 3.78 € | ||
| 90,000 | a) 60,000 | a) 30,000 | ||||||||
| SAR 2021 | 9/03/2023 | 9/03/2024 | - | 9/03/2029 | b) 150,300 | b) 100,200 | ||||
| SAR 2021 | 9/03/2024 | 9/03/2024 | - | 9/03/2029 | c) 0 | |||||
| SAR 2022 | 9/03/2022 | 9/03/2022 | 3/9/2025 | 9/03/2025 | - | 9/03/2030 | 3.60 € | |||
| 90,000 | a) 328,000 | a) 109,333 | 218,667 | |||||||
| SAR 2022 | 9/03/2023 | 9/03/2025 | - | 9/03/2030 | b) 472,320 | b) 157,440 | ||||
| SAR 2022 | 9/03/2024 | 9/03/2025 | - | 9/03/2030 | c) 0 | |||||
| SAR 2023 | 9/03/2023 | 9/03/2024 | 3/9/2026 | 9/03/2026 | - | 9/03/2031 | 2.86 € | |||
| 418,000 | a) 180,000 | a) 0 | 180,000 | |||||||
| SAR 2023 | 9/03/2025 | 9/03/2026 | - | 9/03/2031 | b) 286,200 | b) 0 | ||||
| SAR 2023 | 9/03/2026 | 9/03/2026 | - | 9/03/2031 | c) 0 | d) 0 | ||||
| TOTAL (1) |
(1) Executive director (CEO). Permanent representative of PJY Management BVBA.
No severance payments were made to members of the Executive Management in 2023.
Table 5 provides comparative information regarding the annual change in remuneration and performance, as well as the ratio between the highest remuneration of members of the Executive Management and the lowest remuneration (in full-time equivalent) of employees. The evolution in remuneration for the CEO is mainly related to the company performance. No extraordinary items have been taken into account for the ease of comparison. The evolution in aggregated remuneration for the Executive Committee members is mainly a combination of Company performance related remuneration. No extraordinary items have been taken into account, nor severance packages, for ease of comparison. Agfa is reporting the average remuneration of employees on a full-time equivalent base. For the average remuneration of the employees of the Company only employees in Belgium have been considered. The average remuneration of the employees of the Group takes into account all employees worldwide.
Table 5 - Comparative table on the remuneration and Company performance over the last five reported financial years (RFY).
| name of director, position | RFY-5 vs RFY-6 | RFY-4 vs RFY-5 | RFY-3 vs RFY-4 | RFY-2 vs RFY-3 | RFY-1 vs RFY-2 | RFY vs RFY-1 | Information regarding the RFY |
|---|---|---|---|---|---|---|---|
| Remuneration of Directors and Executive Committee | |||||||
| Frank Aranzana (1) | 141% | 38% | 0% | 0% | 0% | 180,000 € | |
| Pascal Juéry (2) | 0 € | ||||||
| Mark Pensaert (3) | 77,500 € | ||||||
| Christian Reinaudo (4) | 0% | -10% | 27% | 17% | 0% | -4% | 67,500 € |
| Klaus Röhrig (5) | -30% | -42% | 4% | -7% | 62,500 € | ||
| Helen Routh (6) | 16% | 0% | 4% | -4% | 65,000 € | ||
| Line De Decker (7) | 4% | 60,000 € | |||||
| CEO (excl. Agfa Gevaert NV director fee) | 10% | 3% | -50% | 48% | -4% | 6% | 1,182,896 € |
| Executive Committee | 14% | 1% | -43% | 21% | 24% | -16% | 1,757,139 € |
| Company Performance | |||||||
| Financial metric A: revenue | -10% | -10% | -13% | 3% | -35% | 0% | Data of 2022 is represented due to disposal of the Offset business. |
| Financial metric B: EBITDA | -18% | -16% | -35% | 5% | -52% | 52% | |
| Financial metric C: net profit | -133% | -220% | 1394% | -102% | 1493% | -55% | |
| Non-financial metric C | |||||||
| Average Remuneration of employees, on a full-time equivalent base | |||||||
| Employees of the Company | 71,885 € | 74,994 € | 81,751 € | 80,326 € | |||
| Employees of the Group | 61,070 € | 62,836 € | 68,663 € | 76,090 € | |||
| Ratio highest/lowest remuneration | 22.5 | 28.7 | 35.0 | 34.4 |
(1) Chairman of the Board and member of the NRC. Permanent representative of Vantage Consulting SRL.
(2) Executive director (CEO). Permanent representative of PJY Management BV.
(3) Non-executive director and chairman of the Audit Committee. Permanent representative of MRP Consulting BV.
(4) Non-executive director and chairman of the NRC.
(5) Non-executive director and member of the Audit Committee.
(6) Non-executive director and member of the Audit Committee. As natural person until June 20, 2022. Permanent representative of H F Routh Consulting LLC as of June 21, 2022.
(7) Non-executive director and member of the NRC. Permanent representative of Albert House BV.
MILLION EURO
| 2019 Re-presented (1) | 2020 | 2021 | 2022 | 2023 Re-presented (2) | |
|---|---|---|---|---|---|
| Revenue | 1,975 | 1,709 | 1,760 | 1,145 | 1,150 |
| Cost of sales | (1,387) | (1,215) | (1,263) | (800) | (792) |
| Gross profit | 589 | 494 | 497 | 345 | 359 |
| Selling expenses | (271) | (223) | (231) | (181) | (170) |
| Administrative expenses | (157) | (144) | (155) | (168) | (140) |
| Research and development expenses | (103) | (95) | (95) | (82) | (73) |
| Net impairment loss on trade and other receivables, including contract assets | (5) | (2) | (2) | (1) | 1 |
| Other operating income | 41 | 39 | 41 | 64 | 53 |
| Other operating expenses | (127) | (122) | (47) | (117) | (38) |
| Results from operating activities | (34) | (52) | 9 | (139) | (8) |
| Interest income (expense) - net | (8) | (4) | (1) | - | 3 |
| Other finance income (expense) - net | (28) | (26) | (6) | (18) | (29) |
| Net finance costs | (36) | (31) | (8) | (18) | (26) |
| Share of profit of associates - net of tax | - | - | - | (1) | (1) |
| Profit (loss) before income taxes | (70) | (83) | 1 | (157) | (35) |
| Income tax expense | (14) | (15) | (15) | (29) | (16) |
| Profit (loss) from continuing operations | (84) | (98) | (14) | (186) | (51) |
| Profit (loss) from discontinued operations - net of tax | 36 | 719 | - | (37) | (49) |
| Profit (loss) for the period | (48) | 621 | (14) | (223) | (101) |
| Profit (loss) attributable to: | |||||
| Owners of the Company | (53) | 613 | (17) | (221) | (102) |
| Non-controlling interests | 5 | 7 | 4 | (2) | 1 |
| Earnings per share (euro) | |||||
| Basic earnings per share (euro) | (0.32) | 3.66 | (0.11) | (1.41) | (0.66) |
| Diluted earnings per share (euro) | (0.32) | 3.66 | (0.11) | (1.41) | (0.66) |
(1) Compliant with IFRS 5.33, the Company has disclosed in its Consolidated Statements of Profit or Loss and Comprehensive Income, a single amount comprising the total of the post-tax profit of discontinued operations and the post-tax gain on the disposal of the net assets constituting the discontinued operation. The Group has sold its reseller business in the US (July 2019) and part of Agfa HealthCare’s IT business (May 2020). Therefore, the Company has re-presented these disclosures for prior periods presented being FY 2019.
(2) Compliant with IFRS 5.33, the Company has presented in its Consolidated Statement of Profit or Loss and Comprehensive Income, a single amount comprising the total of the post-tax profit (loss) of discontinued operations and the post-tax profit (loss) on the disposal of net assets constituting the discontinued operations. The Group has sold its Offset Solutions business in April, 2023. Comparative information has been re-presented.
MILLION EURO
| Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2023 | |
|---|---|---|---|---|---|
| ASSETS | |||||
| Non-current assets | 1,060 | 714 | 756 | 602 | 576 |
| Intangible assets and goodwill | 566 | 284 | 293 | 247 | 239 |
| Property, plant and equipment | 142 | 127 | 129 | 107 | 115 |
| Right-of-use assets | 110 | 78 | 68 | 45 | 39 |
| Investments in associates | 4 | - | 1 | 1 | 1 |
| Other financial assets | 8 | 7 | 8 | 5 | 4 |
| Assets related to post-employment benefits | - | - | 40 | 18 | 29 |
| Trade receivables | 21 | 15 | 12 | 9 | 2 |
| Receivables under finance lease | 62 | 68 | 70 | 72 | 69 |
| Other assets | 24 | 16 | 11 | 8 | 4 |
| Deferred tax assets | 125 | 120 | 124 | 91 | 74 |
| Current assets | 1,234 | 1,490 | 1,339 | 1,153 | 792 |
| Inventories | 436 | 389 | 418 | 487 | 289 |
| Trade receivables | 408 | 297 | 307 | 291 | 175 |
| Contract assets | 100 | 64 | 76 | 94 | 83 |
| Current income tax assets | 75 | 63 | 63 | 56 | 51 |
| Other tax receivables | 25 | 15 | 19 | 28 | 20 |
| Other financial assets | - | 9 | 2 | 1 | - |
| Receivables under finance lease | 34 | 29 | 30 | 31 | 31 |
| Other receivables | 15 | 9 | 4 | 6 | 48 |
| Other current assets | 21 | 18 | 18 | 17 | 13 |
| Derivative financial instruments | 1 | 9 | 1 | 3 | 2 |
| Cash and cash equivalents | 107 | 585 | 398 | 138 | 77 |
| Non-current assets held for sale | 10 | 4 | 3 | 2 | 2 |
| TOTAL ASSETS | 2,294 | 2,204 | 2,095 | 1,756 | 1,368 |
| EQUITY AND LIABILITIES | |||||
| Total equity | 130 | 620 | 685 | 561 | 396 |
| Equity attributable to owners of the Company | 83 | 570 | 632 | 520 | 395 |
| Share capital | 187 | 187 | 187 | 187 | 187 |
| Share premium | 210 | 210 | 210 | 210 | 210 |
| Retained earnings | 803 | 1,412 | 1,284 | 1,042 | 945 |
| Other reserves | (84) | (76) | (1) | (3) | - |
| Translation reserve | (5) | (42) | (15) | (9) | (22) |
| Post-employment benefits: remeasurement of the |
The Group has elected to present a statement of cash flows that includes all cash flows, including both continuing and discontinuing operations.
MILLION EURO
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Non-current liabilities | |||||
| Liabilities for post-employment and long-term termination benefit plans | 1,137 | 956 | 735 | 536 | 486 |
| Other employee benefits | 12 | 13 | 11 | 9 | 5 |
| Loans and borrowings | 225 | 54 | 46 | 41 | 69 |
| Provisions | 5 | 16 | 12 | 14 | 7 |
| Deferred tax liabilities | 19 | 4 | 6 | 9 | 9 |
| Trade payables | 2 | - | - | - | 3 |
| Contract liabilities | 1 | 2 | 1 | - | - |
| Other non-current liabilities | 1 | 1 | - | - | 4 |
| Current liabilities | 761 | 538 | 597 | 585 | 388 |
| Loans and borrowings | 101 | 29 | 27 | 25 | 14 |
| Provisions | 45 | 63 | 42 | 36 | 13 |
| Trade payables | 232 | 198 | 252 | 249 | 132 |
| Contract liabilities | 151 | 103 | 111 | 109 | 97 |
| Current income tax liabilities | 49 | 23 | 28 | 29 | 23 |
| Other tax liabilities | 38 | 24 | 28 | 32 | 24 |
| Other payables | 9 | 8 | 9 | 6 | 9 |
| Employee benefits | 130 | 88 | 99 | 95 | 73 |
| Other current liabilities | 1 | 1 | - | - | 1 |
| Derivative financial instruments | 5 | 2 | 2 | 2 | - |
| TOTAL EQUITY AND LIABILITIES | 2,294 | 2,204 | 2,095 | 1,756 | 1,368 |
MILLION EURO
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Profit (loss) for the period | (48) | 621 | (14) | (223) | (101) |
| Income taxes | 28 | 8 | 15 | 42 | 21 |
| Share of (profits)/loss of associates, net of tax | 1 | - | - | 1 | 1 |
| Net finance costs | 38 | 31 | 8 | 19 | 26 |
| Operating result | 19 | 660 | 9 | (160) | (53) |
| Depreciation, amortization and impairment losses | 171 | 70 | 63 | 177 | 53 |
| Other non-cash expenses | 159 | (526) | 114 | 150 | 135 |
| Change in inventories | 50 | 25 | (48) | (65) | 23 |
| Change in trade receivables | 4 | 50 | 6 | 25 | (22) |
| Change in contract assets | 7 | (10) | (8) | (14) | 10 |
| Change in trade working capital assets | 62 | 64 | (50) | (55) | 11 |
| Change in trade payables | 19 | 2 | 38 | (7) | (10) |
| Change in contract liabilities | (13) | 23 | 3 | (8) | 5 |
| Changes in trade working capital liabilities | 6 | 25 | 41 | (15) | (5) |
| Changes in trade working capital | 68 | 89 | (10) | (69) | 6 |
| Cash out for employee benefits | (226) | (403) | (273) | (149) | (133) |
| Cash out for provisions | (36) | (37) | (39) | (27) | (22) |
| Changes in lease portfolio | (9) | (3) | (1) | (2) | 2 |
| Changes in other working capital | 18 | 15 | 17 | 4 | (15) |
| Cash settled operating derivatives | (16) | (3) | 12 | (9) | - |
| Cash generated from/(used in) operating activities | 147 | (136) | (108) | (86) | (28) |
| Income taxes paid | (24) | (17) | (8) | (15) | (2) |
| Net cash from/(used in) operating activities | 123 | (153) | (116) | (100) | (30) |
| Capital expenditure | (38) | (33) | (26) | (33) | (34) |
| Proceeds from sale of other investing activities | 7 | 9 | 12 | 2 | 3 |
| Acquisition of associates and subsidiaries, net of cash acquired | (16) | (1) | (1) | (49) | 2 |
| Disposal of discontinued operations, net of cash disposed of | 16 | 915 | - | (5) | (4) |
| Proceeds from other investment activities | 1 | - | 9 | - | (1) |
| Interests received | 3 | 2 | 4 | 7 | 16 |
| Net cash from/(used in) investing activities | (28) | 892 | (2) | (76) | (16) |
| Interests paid | (15) | (7) | (4) | (5) | (13) |
| Dividends paid to non-controlling interests | - | - | (5) | (11) | (9) |
| Purchase of treasury shares | - | - | (29) | (21) | - |
| Proceeds from borrowings | 127 | 59 | 2 | 3 | 40 |
| Repayment of borrowings | (201) | (259) | (3) | (4) | - |
| Payment of finance leases | (42) | (34) | (29) | (30) | (23) |
| Proceeds/(payment) of derivatives | 3 | (9) | (2) | (9) | (3) |
| Other financing income/(costs) received/paid | (3) | - | 4 | 1 | (2) |
| Net cash from (used in) financing activities | (131) | (249) | (67) | (77) | (10) |
| Net increase/(decrease) in cash & cash equivalents | (36) | 490 | (185) | (253) | (57) |
| Cash & cash equivalents at the start of the period | 136 | 99 | 585 | 398 | 138 |
| Net increase/(decrease) in cash & cash equivalents | (36) | 490 | (185) | (253) | (57) |
| Gain/losses (in marketable securities) | - | (1) | (1) | - | - |
| Effect of exchange rate fluctuations on cash held | (1) | (3) | (1) | (7) | (4) |
| Cash & cash equivalents at the end of the period | 99 | 585 | 398 | 138 | 77 |
Beneath a summary of our progress regarding the main Key Performance Indicators. More details about specific split, e.g. waste per destination type, and explanations about the actions driving the changes are given in the dedicated sections of this report. As we started tracking different KPIs at different points in time, some older data might be unavailable. We plan to gradually increase the number of disclosed KPIs over time based on the needs identified in dialogue with our internal and external stakeholders.
| Unit of Measure | 2023 (1) | 2022 | Evolution 1-year | 2018 | Evolution 5-year | 2013 | Evolution 10-years | |
|---|---|---|---|---|---|---|---|---|
| General | ||||||||
| Production volumes * | tons/year | 37,390 | 109,191 | -65.8% | 167,799 | -77.7% | 219,043 | -82.9% |
| Environment | ||||||||
| Total waste volume * | tons/year | 8,442 | 23,759 | -64.5% | 32,232 | -73.8% | 45,497 | -81.4% |
| Share of hazardous waste * | % | 38% | 19% | 100.0% | 15% | 150.9% | 25% | 52.8% |
| Waste diverted from disposal * | % | 85.6% | 91.2% | -6.1% | 85.2% | 0.5% | 87.7% | -2.4% |
| Total water consumption * | m³/year | 726,000 | 3,631,000 | -80.0% | 5,148,487 | -85.9% | 5,783,121 | -87.4% |
| Total waste water volume * | m³/year | 704,226 | 1,077,207 | -34.6% | 1,700,664 | -58.6% | 2,649,374 | -73.4% |
| Waste water pollutant load * | tons per year | 49.6 | 195.2 | -74.6% | 511.7 | -90.3% | 675.1 | -92.7% |
| Total energy consumption * | TJ/year | 1,284 | 2,012 | -36.2% | 2,733 | -53.0% | 3,293 | -61.0% |
| Total CO 2 emissions (scope 1 + scope 2) to air * | ktons/year | 76.6 | 128.9 | -40.6% | 184.7 | -58.5% | 218.5 | -64.9% |
| Emissions of ozone-depleting substances * | kg R11 eq./year | 306 | 731 | -58.1% | - | - | - | - |
| NO x , SO 2 , VOC, VIC emissions * | tons per year | 89.7 | 126.0 | -28.8% | 192.0 | -53.3% | 332.8 | -73.0% |
| VOC emissions * | tons per year | 22.5 | 35.4 | -36.4% | 88.8 | -74.6% | 165.2 | -86.4% |
| Social | ||||||||
| Frequency rate (Fg) of reportable accidents * | (Number of acc. / Perf. hours) * 1,000,000 | 2.87 | 2.29 | 25.3% | 1.15 | 149.4% | 3.21 | -10.7% |
| Frequency rate (Fg) of accidents with more than one working day lost | (Number of acc. / hours worked) * 1,000,000 | 7.07 | 5.38 | 31.4% | 4.35 | 62.6% | 5.76 | 22.7% |
| Number of accidents with one day lost | - | 32 | 10.3% | 34 | -5.9% | 52 | -38.5% | |
| Degree of severity of accidents involving more than one working day lost * | (Number of working days lost / hours worked) * 1,000 | 0.228 | 0.104 | 119.2% | 0.096 | 137.1% | 0.144 | 57.9% |
| Total women share in workforce * | % | 23% | 22.7% | 1.3% | 23.1% | -0.3% | 21.8% | 5.3% |
| Total women share on recruitment * | % | 32% | 32.8% | -1.9% | 30.7% | 4.9% | - | - |
| Women share as Executive Manager (level 1 and 0) * | % | 18% | 11% | 62.2% | 6% | 206.0% | 0% | - |
| Women share as Executive Manager (level 2) * | % | 13% | 12% | 9.2% | 9% | 37.4% | 5% | 156.8% |
| Women share as Middle Manager * | % | 20% | 18% | 9.9% | 15% | 37.2% | 15% | 37.0% |
| Women share as Manager * | % | 25% | 23% | 8.7% | 21% | 17.4% | 19% | 32.7% |
| Women share as Employee * | % | 23% | 23% | -0.9% | 24% | -6.1% | 24% | -2.3% |
| Governance | ||||||||
| Contracts signed by key and core suppliers including Agfa Supplier of CoC | % | 100.0% | 100.0% | 0.0% | - | - | - | - |
| % annual turnover invested in R&D (for the full group) | % | 6.3% | 7.2% | -12.5% | - | - | - | - |
(1) excluding ex-Agfa Offset carved-out activities
* A direct comparison of evolution throught the years may not be suitable for these KPIs, as it was impractical to restate them for the previous years. For them, ex-Agfa Offset carved-out activities are only excluded from 2023 figures. 2023 figures will be used as baseline for comparison as of reporting on fiscal year 2024.
According to the information available to the Company by virtue of the transparency declarations received in accordance with the relevant legal and statutory stipulations, the main shareholders on date of this Annual Report are the following:
EURO
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Earnings per share | (0.32) | 3.66 | (0.11) | (1.41) | (0.66) |
| Net operating cash flow per share | 0.88 | (0.81) | (0.65) | (0.55) | (0.18) |
| Gross dividend | - | - | - | - | - |
| Year end price | 4.62 | 3.90 | 3.79 | 2.67 | 1.47 |
| Year’s high | 4.86 | 4.83 | 4.55 | 4.13 | 2.99 |
| Year’s low | 3.21 | 2.90 | 3.49 | 2.65 | 1.25 |
| Average volume of shares traded/day | 281,280 | 272,995 | 204,607 | 173,097 | 160,699 |
| Weighted average number of ordinary shares | 167,751,190 | 167,751,190 | 165,003,570 | 156,236,319 | 154,820,528 |
Investor Relations Department
Septestraat 27, B-2640 Mortsel, Belgium
Phone +32-(0)3-444 7124
[email protected]
www.agfa.com/investorrelations
Published by Agfa-Gevaert NV
Corporate Communications
Septestraat 27
B-2640 Mortsel (Belgium)
T +32 3 444 71 24
www.agfa.com
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