[Leica] Agfa: news straight from the source

[nbeddoe at lehman.com (Beddoe, Neil)]

Not quite a 19% loss but a 19% drop in revenues - see attached:

Neil

BN  07:43 Agfa Says `Positive Trend' of Recent Months Continues in May

 

Agfa Says `Positive Trend' of Recent Months Continues in May

 

By Jennifer M. Freedman

     May 14 (Bloomberg) -- Ludo Verhoeven, chief executive of

Agfa Gevaert NV, Europe's largest maker of X-ray products and

films, said a ``positive trend'' in sales and earnings that began

in March has continued into May.

     ``May is confirming the trend of March and April,''

Verhoeven, 59, said in an interview in Brussels. ``Volume is

picking up in graphic arts, printing and advertising and for the

first time we are rather positive.''

     The company yesterday said first-quarter profit dropped by

half as the euro's gain against the dollar pared sales and the

cost of raw materials such as silver and aluminum rose. While the

company said its healthcare and graphic systems divisions are

back on track, it continues to grapple with a solution for its

consumer-imaging unit, which was unprofitable last year.

     Agfa announced plans to ``carve out'' the unit, which

suffered a 19 percent drop in first-quarter sales, and run it as

a separate company. The business will be cash-positive this year

after it's sliced off, though it won't reach a target to be

breakeven and its earnings will be consolidated, Verhoeven said.

     ``This gives us much more flexibility to act immediately in

the changing market,'' he said. ``When we have a separate company

and run as a separate company, it's easier to make the changes

that need to be made.''

     The move may be the first step to an eventual sale of the

unit or a management buyout, analysts have said. Verhoeven

declined to say what options Mortsel, Belgium-based Agfa was

considering for the unit beyond transforming it into a separate

company.

 

                     `Open to All Solutions'

 

     ``When other necessary measures have to be taken afterwards,

we will look at everything,'' he said. Asked whether he expected

a buyer or venture-capital funds could be found should Agfa

decide to sell the unit, he added: ``You always have people who

are looking to certain solutions and certain operations. That's

not a question today, but we are open to all solutions.''

     The unit, which produces film and paper, has been hurt by

the shift to digital technology. Agfa's equipment is used to

print more than 35 percent of all photos worldwide. The company

has no plans to follow Eastman Kodak Co. or Fuji Photo Film Co.

into the digital industry, Verhoeven said.

     ``We only have 10 percent of the film market. Kodak and Fuji

are much bigger, and you don't only have to ask for revenue, but

you also have to ask for margins,'' he said.

     One sign that the graphic systems business is picking up

 

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                     Copyright (c) 2004, Bloomberg, L. P.


                                                                Page 2  of 2

 

comes from Germany, one of Agfa's most important markets. The

company ``is selling equipment and a lot of software'' at the

Drupa trade fair in the German city of Duesseldorf, Verhoeven

said. ``We are slightly exceeding our expectations at Drupa.''

     Inflation in China, where Agfa has a manufacturing facility

for printing plates ``won't have a major effect'' on Agfa's

business because ``it's not only for the Chinese market that we

are producing in China, he said. China today said consumer prices

rose to a seven-year high of 3.8 percent in April.

 

--With reporting by Rishaad Salamat in London. Editor: Sims.               

-----Original Message-----
From: Philippe Orlent [mailto:philippe.orlent@ldv.be] 
Sent: Friday, May 14, 2004 12:31 PM
To: Leica Users Group
Subject: [Leica] Agfa: news straight from the source


Agfa is splitting its photographic film and paper division off from the
mothercompany, due to 19% losses in this division last year.
Rumours go that this is to prepare the selling of this division.

_______________________________________________
Leica Users Group.
See http://leica-users.org/mailman/listinfo/lug for more information


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