Agfa Profit Drops 72%

• All business groups contributed to 10.8 percent revenue growth
• Agfa Graphics compensated about half of the raw material impact through various gross margin measures
• EBIT amounts to 40 million Euro
• Net result amounts to 5 million Euro

Partly driven by the recent strategic steps, the Agfa-Gevaert Group's revenue increased by 10.8 percent compared to the first quarter of 2010. All business groups contributed to the growth. The exchange rate conditions still had a beneficial impact of 2.0 percent on the Group's top line. The effects of the price increases for the film products are expected to gradually become more visible in the second half of the year.

Part of the impact of the raw material prices on the Group's profitability was compensated through various gross margin measures. The Group's recurring gross profit margin declined from 34.5 percent in the first quarter of 2010 to 31.4 percent.

As a percentage of revenue, Selling and General Administration expenses decreased to 19.8 percent, versus 20.5 percent in the previous year.

The Group's recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) decreased from 77 million Euro to 63 million Euro. Recurring EBIT decreased from 53 million Euro (8.0 percent of revenue) to 40 million Euro (5.4 percent of revenue).

Restructuring and non-recurring items resulted in an expense of 8 million Euro, versus an expense of 2 million Euro in 2010.

The net finance costs remained stable at 23 million Euro.

Income tax expense amounted to 4 million Euro, compared to 10 million Euro in 2010. Current tax expense amounted to 6 million Euro and deferred tax income amounted to 2 million Euro.

A positive net result of 5 million Euro was booked, compared to 18 million Euro in the first quarter of 2010.

Balance sheet and cash flow

-At the end of the first quarter, total assets were 2,995 million Euro, compared to 3,086 million Euro at the end of 2010.

- Inventories amounted to 688 million Euro (or 123 days). Trade receivables (minus deferred revenue and advanced payments from customers) amounted to 438 million Euro, or 54 days and trade payables were 293 million Euro, or 52 days.
- Net financial debt amounted to 189 million Euro, versus 434 million Euro at the end of of the first quarter of 2010 and 161 million Euro at the end of 2010.

-Net cash from operating activities amounted to minus 26 million Euro.

Compared to last year's first quarter, Agfa Graphics' revenue increased by 11.9 percent (10.1 percent excluding currency effects) to 386 million Euro. In prepress, the analogue computer-to-film (CtF) segment's volumes were impacted by Agfa Graphics' film price increases related to the high raw material prices. As expected, part of the dealers started to use up their film stocks. It is expected that the effects of the price increases for the film products will gradually become more visible in the next quarters. The digital computer-to-plate (CtP) business' revenue increased due to the recent strategic moves. In industrial inkjet, the revenue increase is attributable to both external and internal growth, driven by increasing equipment and ink volumes.

As a result of the high raw material prices, Agfa Graphics' gross profit margin decreased to 28.8 percent, compared to 30.4 percent in the first quarter of 2010. About half of the raw material impact on Agfa Graphics' profitability was mitigated by various gross margin measures. Recurring EBITDA amounted to 27.3 million Euro (7.1 percent of revenue). Recurring EBIT was 17.0 million Euro or 4.4 percent of revenue.