Agfa-Gevaert decides to split into three independent business groups
Agfa-Gevaert has decided to split the group into three independent business units—Graphics, HealthCare, and Materials.
(pr) Agfa-Gevaert has decided to split the Group into three independent divisions - Graphics, HealthCare and Materials. The new Materials division will combine all film manufacturing activities with the niche products of Specialty Products to position it as an independent supplier of film and related products. This structure will provide each division with optimum flexibility to implement its growth strategy and further reduce costs in line with rapidly changing market conditions. Agfa-Gevaert aims to achieve annual cost savings of an estimated 250 million Euros by 2008, mainly in general services and traditional products across all business groups and regions.In recent years, Agfa-Gevaert has evolved from a manufacturer of analog imaging products to an innovative provider of digital imaging and IT solutions and services. This successful transformation was the result of a clearly defined strategy that combined investments and acquisitions in new growth areas (e.g. industrial inkjet printing and information technology for the healthcare sector) with divestitures of non-core activities (e.g. NDT and Consumer Imaging). The Graphics and HealthCare business groups have been operating independently since the beginning of 2006. Agfa will create a third business group called Materials around its film manufacturing activities, which will produce films and related products on an exclusive basis for Graphics and HealthCare as well as for third parties. This separation into three independent divisions is a logical next step that will allow each division to focus on its core activities.
The appropriate structure for each division will be determined by the beginning of 2007. Agfa-Gevaert NV will operate as a holding company for the three independent divisions.
All three divisions - Graphics, HealthCare and Materials - operate in highly competitive environments characterized by a decline in some of the traditional film markets and a sharp rise in raw material costs. The independence of the business groups will give each one the necessary flexibility to successfully implement its growth strategy, strengthen its competitive position and control its costs in line with changing market conditions. Agfa therefore aims to reduce costs by 250 million Euros per year on a worldwide basis by 2008, mainly in general services and in the development, production and distribution of traditional products, across the three business groups.
Over the next two months, targeted measures will be developed to optimize organizational structures and realize savings. These plans are to be presented at the end of August and will be in line with the individual strategies and investment plans of the divisions.
Agfa Graphics will continue to be a global leader in comprehensive prepress solutions and world-class services, expanding into industrial inkjet printing and new markets. The division will invest in innovative technologies for inkjet printing, digital prepress, software and services. Graphics will strengthen its competitive position by optimizing profitability and expanding its business. The sales target for 2008 is 1.9 billion euros.
Agfa HealthCare will continue to invest in the international roll-out of its hospital IT platform. This will be based on a global leadership position in hospital information technology (IT), including enterprise-wide healthcare information systems, and a strengthened position in conventional and digital medical imaging systems. HealthCare is aiming for a sales target of at least EUR 1.7 billion by 2008.
Agfa Materials will focus on being a cost-effective manufacturer of mainly film and related products on an exclusive basis for Agfa Graphics and Agfa HealthCare as well as for third parties. In addition, Materials will develop, manufacture and distribute film-based imaging solutions for industrial markets outside the printing and healthcare sectors, such as printed circuit board manufacturing, aerial photography, the cinema and film industries and ID and security systems. The expected decline in some of the traditional film products will be offset by growth in new applications. On an independent basis, Materials will be a division with a sales volume of 700 million euros, including sales with Graphics and HealthCare.
"By creating three independent divisions with an optimized cost structure, each division will have the best opportunities and the necessary resources to strengthen its leading position in its respective markets. This plan is in the best interest of our customers, employees and shareholders," said Marc Olivié, Agfa-Gevaert's Chairman and Chief Executive Officer.
About Agfa:The Agfa-Gevaert Group is a world leader in imaging solutions and information technologies. Agfa develops, produces and markets analog and digital systems for the printing and media industry (Agfa Graphics), for the healthcare sector (Agfa HealthCare) as well as film-related products and special industrial applications (Agfa Materials).
Agfa is headquartered in Mortsel, Belgium. The company is active in 40 countries and has representatives in a further 100 countries worldwide. In 2005, the Agfa-Gevaert Group achieved a turnover of 3,308 million euros.
The appropriate structure for each division will be determined by the beginning of 2007. Agfa-Gevaert NV will operate as a holding company for the three independent divisions.
All three divisions - Graphics, HealthCare and Materials - operate in highly competitive environments characterized by a decline in some of the traditional film markets and a sharp rise in raw material costs. The independence of the business groups will give each one the necessary flexibility to successfully implement its growth strategy, strengthen its competitive position and control its costs in line with changing market conditions. Agfa therefore aims to reduce costs by 250 million Euros per year on a worldwide basis by 2008, mainly in general services and in the development, production and distribution of traditional products, across the three business groups.
Over the next two months, targeted measures will be developed to optimize organizational structures and realize savings. These plans are to be presented at the end of August and will be in line with the individual strategies and investment plans of the divisions.
Agfa Graphics will continue to be a global leader in comprehensive prepress solutions and world-class services, expanding into industrial inkjet printing and new markets. The division will invest in innovative technologies for inkjet printing, digital prepress, software and services. Graphics will strengthen its competitive position by optimizing profitability and expanding its business. The sales target for 2008 is 1.9 billion euros.
Agfa HealthCare will continue to invest in the international roll-out of its hospital IT platform. This will be based on a global leadership position in hospital information technology (IT), including enterprise-wide healthcare information systems, and a strengthened position in conventional and digital medical imaging systems. HealthCare is aiming for a sales target of at least EUR 1.7 billion by 2008.
Agfa Materials will focus on being a cost-effective manufacturer of mainly film and related products on an exclusive basis for Agfa Graphics and Agfa HealthCare as well as for third parties. In addition, Materials will develop, manufacture and distribute film-based imaging solutions for industrial markets outside the printing and healthcare sectors, such as printed circuit board manufacturing, aerial photography, the cinema and film industries and ID and security systems. The expected decline in some of the traditional film products will be offset by growth in new applications. On an independent basis, Materials will be a division with a sales volume of 700 million euros, including sales with Graphics and HealthCare.
"By creating three independent divisions with an optimized cost structure, each division will have the best opportunities and the necessary resources to strengthen its leading position in its respective markets. This plan is in the best interest of our customers, employees and shareholders," said Marc Olivié, Agfa-Gevaert's Chairman and Chief Executive Officer.
About Agfa:The Agfa-Gevaert Group is a world leader in imaging solutions and information technologies. Agfa develops, produces and markets analog and digital systems for the printing and media industry (Agfa Graphics), for the healthcare sector (Agfa HealthCare) as well as film-related products and special industrial applications (Agfa Materials).
Agfa is headquartered in Mortsel, Belgium. The company is active in 40 countries and has representatives in a further 100 countries worldwide. In 2005, the Agfa-Gevaert Group achieved a turnover of 3,308 million euros.
