Agfa-Gevaert NV

Quarterly Report • Mar 11, 2020

Consolidated Statement of Profit or Loss (in million Euro)

Consolidated figures following IFRS accounting policies.

	FY 2019	FY 2018	Q4 2019	Q4 2018
Continuing operations		Restated	unaudited	Restated
Revenue	2,239	2,191	599	587
Cost of sales	(1,510)	(1,489)	(406)	(405)
Gross profit	729	701	193	182
Selling expenses	(299)	(306)	(76)	(77)
Administrative expenses	(176)	(172)	(47)	(44)
R&D expenses	(147)	(141)	(39)	(36)
Net impairment loss on trade and other receivables, including contract assets	(4)	(5)	-	(2)
Other operating income	42	56	6	11
Other operating expenses	(131)	(73)	(83)	(27)
Results from operating activities	14	62	(46)	7
Interest income (expense) - net	(8)	(8)	(2)	(3)
Interest income	2	2	1	-
Interest expense	(10)	(10)	(3)	(3)
Other finance income (expense) - net	(30)	(31)	(5)	(6)
Other finance income	8	5	4	3
Other finance expense	(38)	(36)	(9)	(8)
Net finance costs	(38)	(39)	(8)	(8)
Share of profit of associates, net of tax	(1)	(1)	-	-
Profit (loss) before income taxes	(25)	22	(53)	(1)
Income tax expenses	(28)	(34)	(4)	(21)
Profit from continuing operations	(53)	(12)	(57)	(22)
Discontinued operation
Profit (loss) from discontinued operation, net of tax	5	(3)	-	(1)
Profit (loss) for the period	(48)	(15)	(57)	(23)
Profit (loss) attributable to:
Owners of the Company	(53)	(24)	(59)	(28)
Non-controlling interests	5	9	2	5
Results from operating activities	14	62	(46)	7
Restructuring and non-recurring items	(112)	(66)	(84)	(37)
Adjusted EBIT	126	128	39	45
Earnings per share (Euro)	(0.32)	(0.14)	(0.36)	(0.16)

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.

Consolidated Statements of Comprehensive Income for year ending December 2018 / December

2019 (in million Euro)

Consolidated figures following IFRS accounting policies

	2019	2018
Profit / (loss) for the period	(48)	(15)
Other Comprehensive Income, net of tax
Items that are or may be reclassified subsequently to profit or loss:
Exchange differences:	7	(1)
Exchange differences on translation of foreign operations	7	(1)
Cash flow hedges:	10	(22)
Effective portion of changes in fair value of cash flow hedges	(7)	(18)
Changes in the fair value of cash flow hedges reclassified to profit or loss	3	(4)
Adjustments for amounts transferred to initial carrying amount of hedged items	14	(4)
Income taxes	-	4
Items that will not be reclassified subsequently to profit or loss:	(132)	24
Equity investments at fair value through OCI – change in fair value	(1)	(2)
Remeasurements of the net defined benefit liability	(139)	26
Income tax on remeasurements of the net defined benefit liability	8	-
Total other Comprehensive Income for the period, net of tax	(114)	1
Total Comprehensive Income for the period attributable to:	(162)	(14)
Owners of the Company	(168)	(23)
Non-controlling interests	5	9

Consolidated Statements of Comprehensive Income for the quarter ending December 2018 /

December 2019 (in million Euro)

Consolidated figures following IFRS accounting policies

	Q4 2019 unaudited	Q4 2018
Profit / (loss) for the period	(57)	(23)
Other Comprehensive Income, net of tax
Items that are or may be reclassified subsequently to profit or loss:
Exchange differences:	(10)	-
Exchange differences on translation of foreign operations	(10)	-
Cash flow hedges:	6	(8)
Effective portion of changes in fair value of cash flow hedges	2	(10)
Changes in the fair value of cash flow hedges reclassified to profit or loss	-	1
Adjustments for amounts transferred to initial carrying amount of hedged items	4	1
Income taxes	-	-
Items that will not be reclassified subsequently to profit or loss:	(132)	26
Equity investments at fair value through OCI – change in fair value	(1)	(1)
Remeasurements of the net defined benefit liability	(139)	26
Income tax on remeasurements of the net defined benefit liability	8	1
Total other Comprehensive Income for the period, net of tax	(134)	18
Total Comprehensive Income for the period attributable to:	(191)	(5)
Owners of the Company	(194)	(10)
Non-controlling interests	2	5

Consolidated Statement of Financial Position (in million Euro)

Consolidated figures following IFRS accounting policies.

	31/12/2019	31/12/2018
Non-current assets	1,060	1,019
Goodwill	492	523
Intangible assets	74	93
Property, plant & equipment	142	174
Right-of-use assets	110	-
Investments in associates	4	4
Other financial assets	8	9
Trade receivables	21	16
Receivables under finance leases	62	62
Other assets	24	24
Deferred tax assets	125	114
Current assets	1,234	1,348
Inventories	436	498
Trade receivables	408	420
Contract assets	100	105
Current income tax assets	75	71
Other tax receivables	25	25
Receivables under finance lease	34	30
Other receivables	15	14
Other assets	21	34
Derivative financial instruments	1	1
Cash and cash equivalents	107	141
Non-current assets held for sale	10	10
TOTAL ASSETS	2,294	2,367

	31/12/2019	31/12/2018
Total equity	130	290
Equity attributable to owners of the company	83	252
Share capital	187	187
Share premium	210	210
Retained earnings	803	854
Other reserves	(84)	(93)
Translation reserve	(5)	(9)
Post-employment benefits: remeasurements of the net defined benefit liability	(1,028)	(897)
Non-controlling interests	47	38
Non-current liabilities	1,402	1,336
Liabilities for post-employment and long-term termination benefit plans	1,137	1,066
Other employee benefits	12	13
Loans and borrowings	225	219
Provisions	5	9
Deferred tax liabilities	19	22
Trade payables	2	2
Contract liabilities	1	3
Other non-current liabilities	1	2
Current liabilities	761	740
Loans and borrowings	101	66
Provisions	45	52
Trade payables	232	217
Contract liabilities	151	163
Current income tax liabilities	49	47
Other tax liabilities	38	27
Other payables	9	17
Employee benefits	130	134
Other current liabilities	1	4
Derivative financial instruments	5	13
TOTAL EQUITY AND LIABILITIES	2,294	2,367

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.

Consolidated Statement of Cash Flows (in million Euro) Consolidated figures following IFRS accounting policies.

	2019	2018	Q4 2019	Q4 2018
Profit (loss) for the period	(48)	(15)	unaudited (57)	(23)
Income taxes	28	34	4	21
Share of (profit)/loss of associates, net of tax	1	1	-	-
Net finance costs	38	39	8	8
Operating result	19	59	(46)	6
Depreciation & amortization (excluding D&A on right-of-use assets)	56	54	14	14
Depreciation & amortization on right-of-use assets	38	-	9	-
Impairment losses on goodwill	35	1	31	1
Impairment losses on intangibles	11	-	10	-
Impairment losses on PP&E	27	5	27	5
Impairment losses on right-of-use assets (*)	4	-	-	-
Exchange results and changes in fair value of derivates	1	(2)	(4)	1
Recycling of hedge reserve	3	(4)	1	1
Government grants and subsidies	(9)	(14)	(1)	(1)
(Gains)/losses on the sale of intangible assets and PP&E and remeasurement of leases Result on the disposal of discontinued operations	- (6)	(2) -	6 (6)	2 -
Expenses for defined benefit plans & long-term termination benefits	36	38	6	8
Accrued expenses for personnel commitments	91	94	25	27
Write-downs/reversal of write-downs on inventories	14	23	4	12
Impairments/reversal of impairments on receivables	4	5	-	2
Additions/reversals of provisions	24	30	12	15
Other non-cash expenses	159	168	43	67
Change in inventories	50	(57)	61	26
Change in trade receivables	4	(8)	(33)	(24)
Change in contract assets	7	4	20	21
Change in trade working capital assets	62	(61)	48	23
Change in trade payables	19	(4)	7	(25)
Change in contract liabilities	(13)	25	(16)	(4)
Changes in trade working capital liabilities	6	21	(9)	(29)
Changes in trade working capital	68	(40)	39	(6)
Cash out for employee benefits	(226)	(209)	(51)	(54)
Cash out for provisions	(36)	(25)	(10)	(7)
Changes in lease portfolio	(9)	(11)	(4)	(1)
Changes in other working capital	18	(29)	18	(34)
Cash settled operating derivatives	(16)	13	(4)	(3)
Cash generated from operating activities	147	(14)	77	(11)
Income taxes paid	(24)	(30)	(10)	(14)
Net cash from / (used in) operating activities	123	(44)	67	(25)

	2019	2018	Q4 2019 unaudited	Q4 2018
Capital expenditure	(38)	(40)	(13)	(9)
Proceeds from sale of intangible assets and PP&E	7	5	(4)	(2)
Acquisition of subsidiaries, net of cash acquired	(16)	(25)	(2)	(5)
Disposal of discontinued operations, net of cash (**)	16	-	16	-
Proceeds from sale of other investments and non-current assets held for sale	1	-	1	-
Interests received	3	3	1	1
Dividends received	-	-	-	-
Net cash from / (used in) investing activities	(28)	(57)	(1)	(16)
Interests paid	(15)	(15)	(3)	(5)
Dividends paid to non-controlling interests	-	(3)	-	-
Proceeds from borrowings	127	227	23	96
Repayment of borrowings	(201)	(34)	(51)	-
Payment of finance leases	(42)	(1)	(10)	-
Proceeds / (payment) of derivatives	3	(1)	(38)	1
Other financing income / (costs) incurred	(3)	(2)	1	-
Other financial flows	-	2	(1)	-
Net cash from/ used in financing activities	(131)	175	(40)	92
Net increase / (decrease) in cash & cash equivalents	(36)	74	25	51
Cash & cash equivalents at the start of the period	136	67
Net increase / (decrease) in cash & cash equivalents	(36)	74
Effect of exchange rate fluctuations on cash held	(1)	(5)
Cash & cash equivalents at the end of the period (**)	99	136

The Group has initially applied IFRS 16 at January 1, 2019, using the modified retrospective approach.

Under this approach, comparative information is not restated.

(*) Partially offset by 3 million Euro reversal of provision for onerous rent.

(**) The Group has elected to present a statement of cash flows that includes all cash flows, including both continuing and discontinued operations.

Consolidated Statement of changes in Equity (in million Euro)

Consolidated figures following IFRS accounting policies.

	ATTRIBUTABLE TO OWNERS OF THE COMPANY
in million Euro	Share capital	Share premium	Retained earnings	Reserve for own shares	Revaluation reserve	Hedging reserve	Remeasurements of the net defined benefit liability	Translation reserve	Total	CONTROLLING S INTEREST NON	TOTAL EQUITY
Balance at January 1, 2018	187	210	878	(82)	3	10	(923)	(8)	275	32	307
Comprehensive income for the period Profit (loss) for the period Other comprehensive income, net of tax Total comprehensive income for the period	- - -	- - -	(24) - (24)	- - -	- (2) (2)	- (22) (22)	- 26 26	- (1) (1)	(24) 1 (23)	9 - 9	(15) 1 (14)
Transactions with owners, recorded directly in equity Dividends Total transactions with owners, recorded directly in equity Balance at December 31, 2018	- - 187	- - 210	- - 854	- - (82)	- - 1	- - (12)	- - (897)	- - (9)	- - 252	(3) (3) 38	(3) (3) 290
Balance at January 1, 2019	187	210	854	(82)	1	(12)	(897)	(9)	252	38	290
Comprehensive income for the period Profit (loss) for the period Other comprehensive income, net of tax Total comprehensive income for the period	- - -	- - -	(53) - (53)	- - -	- (1) (1)	- 10 10	- (131) (131)	- 7 7	(53) (114) (168)	5 - 5	(48) (114) (162)
Transactions with owners, recorded directly in equity 'changes in ownership' Transfer of business to NCI without loss of control Establishment of subsidiary with NCI Total transactions with owners, recorded directly in equity	- - -	- - -	2 - 2	- - -	- - -	- - -	- - -	(3) - (3)	(1) - (1)	1 2 3	- 2 2
Balance at December 31, 2019	187	210	803	(82)	1	(3)	(1,028)	(5)	83	47	130