Agfa-Gevaert: EBITDA Climbs to €12M in Q1, but Cash Flow Worsens
On Tuesday, Agfa-Gevaert released its first quarter 2026 results, showing a significant improvement in operational profitability. Adjusted EBITDA jumped to 12 million euros, up from 2 million euros in Q1 2025, supported by cost savings and the pass-through of silver-related surcharges to customers. However, the group faces a deterioration in its free cash flow, which fell to negative 42 million euros, a direct result of increased working capital needs due to high silver prices, internal transformation, and pension-related cash outflows.
Profitability Declines Relative to Revenue, but EBITDA Soars
Consolidated revenue decreased by 2.3% in reported terms to 236 million euros, but grew by 1.7% at constant currencies. This performance hides contrasting dynamics by segment: HealthCare IT declined by 4.9% at constant currencies due to the transition to cloud models, while Industrial Solutions grew by 2.7%, driven by Digital Printing Solutions (+10% at constant currencies). On the profitability front, the group marks a significant turning point. Adjusted EBITDA rose from 2 million to 12 million euros, a 500% improvement. Gross margin increased by 1.6 points, from 30.7% to 32.3%, mainly due to cost-saving programs and the group's ability to pass on silver surcharges to its customers. Operating expenses significantly decreased from 81 million to 73 million euros. However, the net result remains in deficit at minus 12 million euros (compared to minus 20 million in Q1 2025). This limited improvement in net income reflects the impact of net financial expenses (minus 7 million euros), although the group benefited from a tax gain of 3 million euros.
HealthCare IT Weakened by Cloud Transition, Imaging and Chemicals Reinvigorated by Silver Prices
The HealthCare IT segment shows a decline: revenue decreased by 4.9% in constant currency to 51 million euros. This drop reflects the group's strategic positioning, transitioning clients to cloud solutions. The rolling 12-month order intake contracted by 10%, from 186 million to 167 million euros, although the share of cloud in order intake has increased (cloud orders have risen in absolute terms). Adjusted EBITDA for the segment fell by 43.9% to 2.8 million euros, affected by the product mix and investments for growth. In stark contrast, Imaging and Chemicals was revitalized. Revenue grew by 4.3% at constant currencies despite a decline in volumes in films and Computed Radiography. Adjusted EBITDA jumped from 2.6 million to 12.8 million euros (a 400% increase), driven by timing effects related to silver and cost reduction measures. Digital Radiology Solutions registered growth at constant currencies, with a recovery in order intake. Industrial Solutions experienced mixed improvement. Digital Printing Solutions advanced by 10% (excluding currencies), benefiting from market stabilization in signage-display. Green Hydrogen Solutions was severely impacted, with a 48% revenue decline due to market weakness in the West (legislative delays on Renewable Energy Directive III).
Cash Flow Deteriorates Despite Operational Recovery
The group's free cash flow severely worsened to minus 42 million euros in Q1, from minus 27 million in Q1 2025 (including discontinued operations). This deterioration is directly attributable to three factors: a 33 million euro increase in working capital needs (including 41 million euros related to the rise in silver prices), disbursements related to internal transformation, and cash payments related to pensions. Excluding the silver impact, all businesses improved their working capital needs compared to Q1 2025. The balance sheet position evolved: net financial debt (excluding IFRS 16 and pensions) stood at 58 million euros at the end of March 2026, up from 21 million at the end of December 2025. The leverage ratio (net debt/adjusted EBITDA over 12 months) was at 1.1x, well below the maximum covenant of 3.0x required for mid-year and 2.75x at year-end. The group drew 129 million euros from its 180 million euro revolving credit line. For the full year 2026, Agfa anticipates an improvement in free cash flow in the coming quarters, but expects the annual free cash flow to be more negative than in 2025 (which had benefited from a 38 million euro inflow related to AgfaPhoto), given the increased disbursements related to transformation and silver prices.
