Half Year 2026 Agfa-Gevaert NV Earnings Call

August 26, 2026

Speaker #2: Ladies and gentlemen, welcome to the Agfa Q2 2026 results conference call. For the first part of the conference call, participants will be in listen-only mode.

Operator 1: Ladies and gentlemen, welcome to the Agfa Q2 2026 results conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing #5 on their telephone keypad. Now, I will hand the conference over to Pascal Juéry, CEO. Please go ahead, sir.

Operator: Ladies and gentlemen, welcome to the Agfa Q2 2026 Results Conference Call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to Pascal Juéry, CEO. Please go ahead, sir.

Speaker #2: During the question-and-answer session, participants are able to ask questions by dialing #Q5 on their telephone keypad. Now, I will hand the conference over to Pascal Juery, CEO.

Speaker #2: Please go ahead, sir.

Speaker #3: Good morning, everyone, and thank you for attending our conference. I'm sitting today with Fiona Lam, our CFO, and the rest of the executive team.

Pascal Juéry: Good morning, everyone, and thank you for attending our conference. I am sitting today with Fiona Lam, our CFO, and the rest of the executive team. Before I walk you through the results, I just like to come back to the transition we are having today with Fiona Lam, who is going to leave the group by the end of the month, and the announcement of our new CFO, Declan Guerin. I just want to publicly thank Fiona for the two years she has spent with Agfa, having an excellent impact and helping me in steering the transformation of the group. This is the last call that Fiona is going to do today with you, and there will be no vacancy because in November, we will have our new CFO in place since Declan will be starting 1 October. Thank you, Fiona. Coming to the results.

Speaker #3: And before I walk you through the results, I'd just like to come back to the transition we're having today. With Fiona Lam, who's going to leave the group by the end of the month, and the announcement of our new CFO, Declan Gera.

Speaker #3: So, I just want to publicly thank Fiona for the two years she has spent with Agfa, having an excellent impact and helping me in steering the transformation of the group.

Speaker #3: This is the last call that Fiona is going to do today with you. And there will be no vacancy, because in November we'll have our new CFO in place.

Speaker #3: Since Declan will be starting 1st of October—so, thank you, Fiona. Turning to the results: as you've seen, pretty resilient results, but a lot of moving parts, actually.

Pascal Juéry: As you have seen, pretty resilient results, but a lot of moving parts, actually. If I start with the three growth engines of Agfa, I can start with HealthCare IT. Very good commercial momentum, very good order intake, excellent move to the cloud, a lot of net new cloud customers. As I repeat every time, there is an impact of this cloud transformation, and that is the delay of revenue and margin recognition. As you can see, the SaaS transformation of the business is accelerating because our order intake, we are 50% cloud-based during the quarter. The message is also we are winning in the market. 54% of our order intake is with net new customers, meaning we are winning share, and we are able to win this share against the market leaders.

Speaker #3: If I start with the three growth engines of Agfa, I can start with Healthcare IT. Very good commercial momentum, very good order intake, excellent move to the cloud, a lot of net new customers, but as I repeat every time, there is an impact of this cloud transformation, and that's the delay of revenue and margin recognition.

Speaker #3: And as you can see, the SaaS transformation of the business is accelerating, because our order intake was 50% cloud-based during the quarter. But the message is also: we're winning in the market.

Speaker #3: Fifty-four percent of our order intake is with net new customers, meaning we are winning share, and we are able to win this share against the market leaders.

Speaker #3: DPS is back to growth. For the semester, after a 2025 year that was a year of—we'll call it—consolidation, we're back to double-digit growth.

Pascal Juéry: DPS is back to growth for the semester after a 2025 year that was a year of, we call it consolidation. We are back to double-digit growth, and that is very good, so it is very positive. Last, of course, the membrane is having, I would say, a very difficult year. The hydrogen membrane, it is a trough. We are part of a trough today, where actually we are very confident to see a very sizable rebound in 2027. But in 2026, we are in a situation where our customers have already what they need in terms of membranes in inventory, and therefore it is a bit of a lost year for ZIRFON. But we remain extremely confident going forward about the growth potential for ZIRFON, and that will start materializing as soon as 2027. So that is the state of the three growth engines.

Speaker #3: And that's very good, so it's very positive. And last, of course, the membrane is having, I would say, a very difficult year. The hydrogen membrane is in a trough.

Speaker #3: We're part of a trough today. Actually, we are very confident to see a very sizable rebound in '27. But in '26, we are in a situation where our customers already have what they need in terms of membranes in inventory.

Speaker #3: And therefore, it's a bit of a lost year for Dearton. But we remain extremely confident going forward about the growth potential for Dearton, and that will start materializing as soon as '27.

Speaker #3: So that's the state of the three growth engines. The resilience of the results is also to be credited to Imaging and Chemicals. Film, in a volume decline environment, has been able to actually generate positive results.

Pascal Juéry: The resilience of the results is also to be credited to Imaging and Chemicals. Film in volume decline environment has been able to actually generate positive results. This is a reflection of the huge restructuring effort we have undertaken now for a year and a half that places us ahead of the curve today, and is more than enough to compensate today the volume decline. We are able to do that in a very turbulent environment, especially with the huge volatility on silver prices. We are able to navigate the market to increase prices to customers as well. So it is a very positive thing for the group. The R is, I would qualify it as stable. Overall, quite, I believe, a good performance given the market backdrop. I will turn now to Fiona to walk you through the numbers.

Speaker #3: This is a reflection of the huge restructuring effort we have undertaken now for a year and a half. That places us ahead of the curve today.

Speaker #3: And it is more than enough to compensate today for the volume decline. And we are able to do that in a very turbulent environment, especially with the huge volatility in silver prices.

Speaker #3: We are able to navigate the market to increase prices to customers as well, so it's a very positive thing for the group. And DR, I would prefer, remains stable.

Speaker #3: So overall, I believe it was quite a good performance given the market backdrop. I will now turn to Fiona to walk you through the numbers.

Speaker #4: Thank you, Pascal. So, in terms of the numbers, a solid quarter, like Pascal has said. The chemical filament, chemical imaging, and chemical silver impact on the revenue are offsetting more than the volume impact.

Fiona Lam: Thank you, Pascal. In terms of the numbers, a solid quarter, like Pascal has said. The film and chemical Imaging and Chemical, the silver impact on the revenue are offsetting more than the volume impact. So you see +2.6% growth in currency. We are specifically pleased with 11% growth on EPS, although still not sufficiently offsetting the decline of Green Hydrogen Solutions because of soft market condition this year. But like Pascal said, the rebound we are expecting in 2027 with Green Hydrogen Solutions. We are also very pleased with HealthCare IT in terms of the transformation, the order intake, the recurrent revenue.

Speaker #4: So you see, plus 2.6% growth is through the currency. We are specifically pleased with 11% growth on DPS, although it's still not sufficiently offsetting the decline of green hydrogen solutions because of soft market conditions.

Speaker #4: This year. But like Pascal said, the rebound we are expecting in 2027 in green hydrogen solutions. Also, we are very pleased with healthcare IT in terms of the transformation.

Speaker #4: The order intake, the recurrent revenue—so the quality of healthcare IT revenue has improved and is on track, even though we see a minus 9.5% decline in the second quarter on healthcare IT in the current revenue. This was anticipated, because we also know that last year we had a very, very strong healthcare IT-owned license sale in the first half of the year.

Fiona Lam: The quality of HealthCare IT revenue has been improved on track even though we see a -9.5% decline in Q2 on HealthCare IT in the current revenue, which is anticipated because we also know last year we had a very strong HealthCare IT own license sale in H1. So seasonality of HealthCare IT last year in H1 was very strong and we anticipate on HealthCare IT H2, we would be basically offsetting that negative trend. If we look at EBITDA, I think we could say it is really a solid performance on the EBITDA. We see the step up of film and chemicals on the saving program that have adjusted our cost base for the decline. So we are able to step up from EUR 4 million to EUR 9 million.

Speaker #4: So seasonality of healthcare IT last year in the first half of year was very strong. And we anticipate on healthcare IT second half of year we would be basically offsetting that negative trend.

Speaker #4: If we look at EBITDA, I think we could say it's really a solid performance on the EBITDA. We see the step up of Filament Chemicals on the saving program that has adjusted our base cost for the decline, so we are able to step up from €4 million to €9 million.

Speaker #4: For industrial solutions, also there, and also for green hydrogen solutions, there was a very small decline, mainly because of the top line. But good cost control has been able to maintain a reasonable adjusted EBITDA level.

Fiona Lam: For Industrial Solutions also there, Green Hydrogen Solutions, a very small decline based a bit cost of the top line, but the good cost control has been able to maintain a reasonable adjusted EBITDA level. HealthCare IT is actually better than our internal expectation even though you see a decline. We anticipated this cloud transition, we anticipated strong H1. All in all, we are happy with the Q2 adjusted EBITDA because it is a very solid performance. Here you see also the bridge. Basically it confirms earlier we said HealthCare IT and Industrial Solutions were because of the top line decline. Imaging and Chemicals, the saving programs, were able to contribute so that the volume decline is offset on the gross profit.

Speaker #4: And Healthcare IT is actually better than our internal expectation, even though you see a decline. We anticipated it. This cloud transition—we anticipated a strong first half year.

Speaker #4: So all in all, we are happy with the Q2 adjusted EBITDA because it's a very solid performance. Here you see also the bridge; basically, it confirms what we said earlier: Healthcare IT and Industrial Solution were affected because of the top line decline.

Speaker #4: Imaging and Chemical—the savings programs were able to contribute so that the volume decline is offset on the gross profit. And then, we have all the good work being done within AFA on adjusting the costs, and debt savings are delivered and stabilizing our Q2 EBITDA as such.

Fiona Lam: We have all the good work being done within Agfa on adjusting the costs and that savings are delivered and stabilizing our Q2 EBITDA as such. On free cash flow, even though we Q2 still consume EUR 10 million negative free cash flow, it is well managed. It is better than expectation internally because we actually have a large quarter of cash out for the expected transformation program, restructuring program, which we have announced last year. It is anticipated a large cash out this quarter. We have, of course, the normal pension. If we look at that, all in all, our working capital has been managed very well, and also our provision, et cetera. Without, let us say, the impact of silver, it would be much better, but we managed to offset quite a lot of these negative impacts internally.

Speaker #4: On free cash flow, even though in Q2 we still consumed €10 million negative free cash flow, it is well managed. It's better than expectations internally because we actually had a large quarter of cash out for the expected transformation program and restructuring program, which we announced last year.

Speaker #4: So, it's an anticipated large cash out. This quarter, we have, of course, the normal pension. So, if we look at that, all in all, our working capital has been managed very well.

Speaker #4: And also our provision, et cetera. Without, let's say, the impact of silver, it would be much better. But we managed to offset quite a lot of these negative impacts internally.

Speaker #4: So minus €10 million cash flow is a good outcome for Q2. And you can also see the evolution of our debt. If you look at the net financial debt, basically in Q2, of course, it has stepped up from €58 million to €74 million because of the net negative free cash flow.

Fiona Lam: A -10 million cash flow is a good outcome for Q2. You can also see the evolution of our debt. If you see the net financial debt basically in Q2, of course, it has been stepped up from EUR 58 million to EUR 74 million because of the net negative free cash flow. We also know, like I earlier said, it is better than expectation. We have now end of Q2 withdraw EUR 113 million of facility out of the EUR 118 million. It is also provided at the end our Q2 governance tests have sufficient headroom. You see liquidity headroom is sufficient compared to the minimum of EUR 30 million. Leverage ratio is stable at 1.4 and interest cover is also well managed and adjusted EBITDA governance is at 52 versus EUR 30 million.

Speaker #4: But we also know, like I said earlier, it is better than expected. So, we now have, at the end of Q2, €430 million of facility out of the €180 million.

Speaker #4: It's also provided at the end: our Q2 governance tests have sufficient headroom. You see, liquidity headroom is sufficient compared to the minimum €30 million.

Speaker #4: Leverage ratio is stable at 1.4, and interest cover is also well managed. Adjusted EBITDA governance is at €52 million versus €30 million. This is basically thanks to all the efforts in the business, the working capital improvements, and also the better EBITDA in the first half of the year.

Fiona Lam: This is basically thanks to all the efforts and the business in the working capital improvements, and also the better EBITDA as H1. If you look at the numbers we just highlighted in the graph, the Q2 numbers here, it is worth also to have a quick look on H1. H1, we deliver actually EUR 10 million more adjusted EBITDA compared to last year. As you know, and still recall, Q1 was stronger adjusted EBITDA and Q2 is stable. So we ended with EUR 10 million more adjusted EBITDA compared to last year. On net results, you see even there we are worse than last year. Just wanted to remind, last year in adjustment and restructuring expenses, we had Agfa-Gevaert that was being booked in June of last year, EUR 38 million.

Speaker #4: So, if you look at the numbers just highlighted in the graph, the Q2 numbers here, it's also worth having a quick look at the first half of the year.

Speaker #4: So, first half of the year, we deliver actually €10 million more adjusted EBITDA compared to last year because, as you know, we still record one year stronger adjusted EBITDA in Q1, and Q2 is stable.

Speaker #4: So we ended with €10 million more adjusted EBITDA compared to last year. And on net results, you see even there we are worse than last year. I just wanted to remind you, last year in adjustment and restructuring expenses, we had the Agfa Photo (AFA) that was being booked in June of last year, €38 million.

Speaker #4: It was not cash being received, but it was booked in the P&L last year under the non-recurrent in 2025. Also, the net finance cost was another €7 million.

Fiona Lam: It was not cash being received, but it was booked in the P&L last year under the non-recurrent in 2025. Also, the net finance cost was another EUR 7 million that was being booked as well in last year. So all in all, you see without Agfa-Gevaert, our net results improvements step up is equivalent to what we have stepped up in adjusted EBITDA, to be aware. Free cash flow is the same as what we have earlier said, minus EUR 10 million free cash flow. But also for the first six months, we are at minus EUR 52 million in total.

Speaker #4: AFA Photo that was being booked as well in last year. So, all in all, you see without AFA Photo, our net results improvements step up is equivalent to what we have stepped up in the adjusted EBITDA, to be aware.

Speaker #4: Free cash flow is the same as what we have earlier said, minus 10 million free cash flow, but also, for the first six months, we are at minus 52 in total.

Speaker #4: And that's offsetting. Remember, in the first half of the year, we have a €45 million silver impact from purchasing silver for the stock ramp-up of our networking capital for that.

Fiona Lam: That's offsetting, remember, the H1, we have EUR 45 million silver impact of purchasing silvers for the stock ramp-up of our net working capital for that, and we were able to offset quite a large part of this and maintain a step up compared to last year of minus EUR 30 million to minus EUR 52 million. So that effect is quite largely managed from Agfa-Gevaert. Thank you for

Speaker #4: And we were able to offset quite a large part of these and maintain a step up compared to last year of minus 30 to minus 52.

Speaker #4: So that effect is quite largely managed from Agfa.

Speaker #5: Thank you for a better answer to healthcare IT, Pascal.

Pascal Juéry: Okay

Fiona Lam: passing to HealthCare IT for Pascal Juéry.

Speaker #1: Thank you, Fiona. Healthcare IT—so, clearly, if I look at the P&L, there are two reasons that already explain why we are below last year. First, seasonality.

Pascal Juéry: Thank you, Fiona. HealthCare IT. So clearly, if I look at the P&L, two reasons that explain already why we are below last year. First, seasonality. Last year we still have more, I would say, project revenue and license, very clearly on the transition to the cloud is the other explanation of which we are seeing today. But I want to insist, this transition is going well. As you've seen, the order intake is increasing by 28%. I'm sure that we will break the EUR 200 million mark for the year as planned. Cloud-based order intake more than tripled, which is showing really that this transition is accelerating. Cloud deals have represented 50% of our orders.

Speaker #1: Last year, we still have more set project revenue and license, very clearly, and the transition to the cloud is the other explanation of what we are seeing today.

Speaker #1: But I want to insist this transition is going well. And as you've seen, the order intake is increasing by 28%. I hope—I'm sure—that we will break the €200 million mark for the year.

Speaker #1: That's very good. So, cloud-based order intake more than tripled, which is really showing that this transition is accelerating. Cloud deals have represented 50% of our orders.

Speaker #1: What I want to insist on as well is it's done with net new customers, meaning we are winning new logos in the market, which shows that our offer is appreciated and extremely competitive.

Pascal Juéry: What I want to insist on as well is, it is done with net new customers, meaning we are winning new logos in the market, which shows that our offer is appreciated and extremely competitive, of course. This momentum is really accelerating quarter after quarter. So overall, even if the P&L is not yet delivering this transformation, we are in the way of growth and profitable growth in HealthCare IT. The order intake is really the best leading indicator we can use to describe our business. Overall, I again show the same slide that shows the impact of changing from license revenue to subscription model. As you see, it has a significant impact on the sales and also, therefore, the profits with a totally different model spread over time. The number, we have already commented this number, so I am not going to dwell on it too much.

Speaker #1: Of course. And this momentum is really accelerating quarter after quarter. So overall, even if the P&L is not yet reflecting this transformation, we are on the path toward growth and profitable growth in healthcare IT.

Speaker #1: And the order intake is really the best leading indicator we can use to describe our business. Overall, I will again show the same slide that shows the impact of changing from license revenue to a subscription model.

Speaker #1: As you see, it has a significant impact on the sales and also therefore the profits, with a totally different model spread over time. Then the number—we've already commented on this number also, so I'm not going to dwell on it too much.

Speaker #1: But again, nothing is broken with Healthcare IT. On the contrary, we have good momentum in the market and we are expecting the second part of the year to be as normal.

Pascal Juéry: Nothing is broken with HealthCare IT. On the contrary, we have good momentum in the market, and we are expecting also the second part of the year to be as normal. The Q4 will be the highest quarter, which is the seasonality of this business, and it will happen again this year. Now let me turn to Industrial Solutions. Here a contrast, I would say, very good with Digital Printing Solutions. After a year 2025, where the growth was somehow subdued, we are now growing again double-digit the business. What we are pleased to see is we are growing in the high-end market with the high-end part of our offering, which shows excellent traction today. Of course, the consumables are part of this growth. We sell ink increasing across the board 10% as well.

Speaker #1: The fourth quarter will be the highest quarter, which is the seasonality of this business, and it will happen again this year. So, now let me turn to Industrial Solutions.

Speaker #1: And here, a contrast: I would say very good with the digital printing solutions. After a year '25, where the growth was somehow subdued, we are now growing the business again at double-digit rates.

Speaker #1: And really, what we are pleased to see is we are growing in the high-end market, in the high-end part of our offering. We show excellent traction today, and of course, the consumables are part of this growth, with sales of ink increasing across the board.

Speaker #1: 10% as well. We do, for our high-end offering, receive a lot of customer recognition and actually awards. And we are not forgetting to continue to build our offer in packaging.

Pascal Juéry: We do, for our high-end offering, receive a lot of customer recognition and actually awards. We are not forgetting also to continue to build our offer in packaging. This time it is a collaboration with the software area to make sure we can offer the best full solution to our customers in the packaging segment. So overall, DPS return to growth and good prospects going forward. Very different story for Green Hydrogen Solutions. 2026 is pretty much a trough or a loss year, but there are things advancing very well in the background. First, the H3 implementation is taking place now after some delays. We are seeing projects being FIDed in Europe, which we didn't see for some time, actually. We have an excellent momentum in Asia. We have our first sales in China. Well, still modest, of course, but that is a start.

Speaker #1: And this time, it's a collaboration in the software area to make sure we can offer the best full solution to our customers in the packaging segment.

Speaker #1: So, overall, DPS returned to growth and has good prospects going forward. It's a very different story for Green Hydrogen Solutions—2026 is pretty much the trough, or the last year.

Speaker #1: But there are things advancing very well in the background. First, the RED III implementation is taking place now after some delays. We are seeing projects being FID'd in Europe.

Speaker #1: Which we didn't see for some time, actually. And we have excellent momentum in Asia— we have our first sales in China. While still modest, of course, that's a start.

Speaker #1: And we are also doing extremely well in India. So the message is, yes, short-term, 2026 is not a good year for Zircon—for the green hydrogen membrane.

Pascal Juéry: We are also doing extremely well in India. So the message is, yes, short term 2026 is not a good year for ZIRFON, for the green hydrogen membrane. But we already look at 2027 with great confidence that we are going to rebound in the market. We are also very happy to see that in the meantime, we are growing the recognition of the performance of the membrane, and especially in Asia, which are our priorities in terms of commercial development. Turning to the sales, to make a long story short, what you see here is a DPS that is up and a membrane that is down. So overall, indeed, the membrane has an impact on the segment in spite of the good performance of DPS. Imaging and Chemicals. Well, where I am really happy is the fact that somehow we have turned a corner in film.

Speaker #1: But we already look at '27 with great confidence that we're going to rebound in the market. And we're also very happy to see that, in the meantime, we are growing the recognition of the performance of the membrane, especially in Asia, which are our priorities in terms of commercial development today.

Speaker #1: Turning to the sales, to make a long story short, what you see here is a DPS. That is up, while the membrane is down.

Speaker #1: So overall, indeed, the membrane has an impact on the segment in spite of the good performance of DPS, Imaging, and Chemicals. Well, where I'm really happy is the fact that somehow we have turned the corner in Film.

Speaker #1: We were suffering from significant volume decline in film while we were putting in place our restructuring efforts. Now, these restructuring efforts are going full steam.

Pascal Juéry: We were suffering from a significant volume decline in film while we were putting in place our restructuring efforts. Now these restructuring efforts are going full steam. Our savings are in place, not only in the operations but also in our go-to market. We have turned the corner, and we are now in a position to claw back some of the profitability of the film. We are also doing that in a market backdrop that is not easy with the volatility of silver price. Although the volumes continue to decline in film, we are seeing an improved profitability. Well, Q2 was not a very good quarter for Digital Radiology Solutions, but I would say that profit-wise, we are on par with last year. Nothing really to worry about.

Speaker #1: Our savings are in place, not only in the operations but also in our go-to-market. We have turned the corner, and we are now in a position to claw back some of the profitability of the film.

Speaker #1: And we are also doing that in a market backdrop that is not easy, with the volatility of the silver price. So, although the volumes continue to decline in film, we are seeing improved profitability.

Speaker #1: Q2 was not a very good quarter for DR, but I would say that profit-wise we are on par with last year, so there's nothing really to worry about.

Speaker #1: We have put together a renewed strategic roadmap for the business, which we are confident will provide the ability to grow both the top and bottom line in this business.

Pascal Juéry: We have put together a renewed strategic roadmap for the business which we are confident will provide the ability to grow top and bottom line in this business. Overall, here maybe I will show the P&L because the P&L is showing actually the cost efforts that we have made in Imaging and Chemicals with gross profit up in spite of decreased volume. As you can see as well, our OPEX decrease, which is extremely significant and is a result of the efforts I was talking. Outlook. Well, for HealthCare IT, we are seeing the rest of the year to continue with our momentum in terms of order intake. Same momentum, I would say, and profitability will be in line with last year's in the context of this cloud transition. Industrial Solutions will be the same with Digital Printing Solutions well oriented and ZIRFON still subdued.

Speaker #1: So overall, here maybe I will show the P&L, because the P&L is actually showing the cost efforts that we have made in Imaging and Chemicals.

Speaker #1: With our gross profit up in spite of decreased volumes. And, as you can see as well, our OPEX decreased, which is extremely significant and is a result of the efforts I referred to.

Speaker #1: Outlook. Well, for healthcare IT, we are seeing the rest of the year continue with our momentum in terms of order intake. Same momentum, I would say.

Speaker #1: And profitability will be in line with last year's, in the context of this cloud transition. Industrial S2 will be the same, with DPS well oriented and Zircon still subdued.

Speaker #1: Again, we're not expecting any rebound in '26, but in '27 for Zircon. And we do have some visibility on the project and the customer orders.

Pascal Juéry: Again, we are not expecting any rebound in 2026, but in 2027 for ZIRFON. We do have some visibility of the project and the customer orders. In Imaging and Chemicals, we will for the full year restore somehow the profitability of film. It will be better than last year. Again, Moonshot will continue to adjust our costs to what we see in the market, and we will continue to be very proactive in terms of silver-based pricing. Cash flow for the year is expected to be more negative. We explained it. We do not have an AgfaPhoto this year, and we still have significant cash outs related to the transformation and the restructurings that we are having for the company. Again, I want to repeat, even if the quarter results are today largely due to the good performance of film, nothing is broken with our growth engines.

Speaker #1: And in Imaging and Chemicals, we will, for the full year, restore somehow the profitability of Film. It's going to be better than last year. Again, some trends will continue to adjust our cost to what we see in the market.

Speaker #1: And we'll continue to be very proactive in terms of silver base pricing. Cash flow for the year is expected to be more negative. We're monitoring it.

Speaker #1: We don't have an Agfa Photo this year, and we still have significant cash out related to the transformation and the restructuring that we are having for the company.

Speaker #1: But again, I want to repeat, even if the quarter results today are largely due to the good performance of film, nothing is broken with our gross engines.

Speaker #1: Elsewhere, IT is winning in the market—it's winning orders. DPS is growing, and Zircon is going to rebound. So, nothing is broken, and we confirm the ability of the group to pursue its transformation.

Pascal Juéry: HealthCare IT is winning in the market, it is winning orders, Digital Printing Solutions is growing, and ZIRFON is going to rebound. Nothing is broken, and we confirm the ability of the group to pursue its transformation. I will stop here and open for questions for the analysts and the press.

Speaker #1: I will stop here and open the floor for questions from the analysts and the press.

Speaker #2: If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6.

Operator 2: If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six. The first question is coming from Alexander Craeymeersch from Kepler Cheuvreux. Your line is now open. Please go ahead.

Operator: If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six. The first question is coming from Alexander Craeymeersch from Kepler Cheuvreux. Your line is now open. Please go ahead.

Speaker #2: The first question is coming from Alexander Kremer from Kepler Cheuvreux. Your line is now open. Please go ahead.

Speaker #3: Hey, good morning. Thank you for taking my questions. So, the first one would be on the transformation cash-out. When you announced the transformation program in 2024, you indicated that it would be self-funding.

Alexander Craeymeersch: Hey, good morning. Thank you for taking my questions. The first one would be on the transformation cash-out. When you announced the transformation program in 2024, you indicated that it would be self-funding, but now we already see a EUR 30 million cash-out by H1 related to this restructuring program. So what has changed versus that original assumption, and how much additional cash-out should we now expect from these programs going forward? The second question would be on AgfaPhoto. You mentioned that the Frankfurt Higher Regional Court decided to annul the ICC award that remits the case back to the tribunal. As an analyst, it is difficult to see the downside risk from here. Could you actually be required to pay that EUR 45 million back, or are you already required to give it back? That would be my second question.

Speaker #3: But of course, now we already see a €30 million cash-out by H1 related to this restructuring program. So, what has changed versus that original assumption?

Speaker #3: And how much additional cash out should we now expect from these programs going forward? Second question would be on Agfa Photo. So you mentioned that the Frankfurt Higher Regional Court decided to annul the ICC award.

Speaker #3: That remits the case back to the tribunal. So, I mean, as an analyst, it's difficult to see the downside risk from here. Could you actually be required to pay that €45 million back?

Speaker #3: Or are you already required to give it back? That would be my second question. Then, the third question would be on the Healthcare IT.

Alexander Craeymeersch: Then the third question would be on HealthCare IT. I think when looking at peers, we see that there is also increasing investments in AI-related functionality, and I was wondering how much product development is required for the HealthCare IT, specifically the cloud, to remain competitive midterm. And how much we should pencil in a sort of R&D budget for these features. Thank you.

Speaker #3: I think when looking at peers, we see that there are also increasing investments in AI-related functionality. And I was wondering how much product development is required for healthcare IT, specifically the cloud, to remain competitive in the midterm.

Speaker #3: And how much should we pencil in as a sort of R&D budget for these features? Thank you.

Speaker #1: Thank you, Alexander. On the first question regarding the cash transformation—yes, I mean, it is self-funding. Today, we have a recurring level of savings of more than €60 million.

Pascal Juéry: Thank you, Alexander. On the first question on the cash transformation, well, yes, it is self-funding. Today we have a recurring level of savings of more than EUR 60 million from the program, and that corresponds more or less, I would say, to the cost of the implementation. So yes, things are self-funding in this way, so to speak. You want to add something, Sheila?

Speaker #1: From the program. And that corresponds more or less, I would say, to the cost of the implementation. So yes, things are self-funding in this way.

Speaker #1: So to speak. Do you want to add something, Fiona?

Speaker #4: Yeah, maybe just to add, of course you see in the free cash flow cash out of this amount per quarter, and the savings are in the operating expenses, where you also see we improved EBITDA, where you also see how much lower operating expenses—you can see in our P&L.

Fiona Lam: Yeah, maybe just to add, of course, you see in the free cash flow cash out of this amount per quarter, and the savings are in the operating expenses, where you also see we improved the EBITDA, where you also see how much lower operating expenses you can see in our P&L.

Pascal Juéry: Yes

Speaker #4: Delivering. And plus, of course, each quarter's seasonality is different because your cash out sometimes falls in a different quarter, while you are saving or ramping up.

Fiona Lam: Plus, of course, each quarter this number is different because your cash out sometimes you see a different quarter while your savings are ramping up. So you see, like Pascal said, the annualized saving is EUR 61 million, and you see those cash out, of course, is in different time phases. So you will never be exactly each quarter following each other, of course.

Speaker #4: So you see, like Pascal said, the annualized saving is $61 million. And you see those cash-outs, of course, are in different time phases.

Speaker #4: So, you will never be exactly each quarter bound to each other, of course.

Speaker #1: Yeah.

Speaker #3: Thank you. That's actually quite clear. So, does that mean or imply that the full year cash out costs are also around €60 million?

Alexander Craeymeersch: Thank you. That is actually quite clear. So does that mean or imply that then the full-year costs cash out is also around EUR 60 million?

Fiona Lam: On the Moonshot program, you can say that. But yes, it is different timing, different years. Some last year, some this year, some next year. Moonshot program, but we also.

Speaker #4: On the moonshot program, you can say that. But yes, it's different timing, different year—some last year, some this year, some next year. Moonshot program, but we also...

Speaker #1: What we call Moonshot is the restructuring of Marcel operations, actually, so that's our internal project name. And indeed, that's a one-to-one speak.

Pascal Juéry: What we call Moonshot is the restructuring of Mortsel operation, actually. It's our internal project name, and that's one to one, so to speak. AgfaPhoto. A question on AgfaPhoto. Let me explain the situation. What happened recently, in Germany, when you have the result of an arbitrage, you have the possibility to go for an annulment process that is not based on the subject matter, but on the process itself. That's what happened in a Frankfurt court. The judgment is not about the subject matter, it's about a process and actually the right of the defense in respect. First, we have made an appeal of this judgment for which we are awaiting the outcome.

Speaker #4: Yeah.

Speaker #1: Agfa photo instruction and Agfa photo. Let me explain the situation. What happened recently in Germany is that when you have the result of an arbitrage, you have the possibility to go for an annulment process that is not based on the subject matter but on the process itself.

Speaker #1: And that's what happened too, in a Frankfurt court. And so the judgment is not about the subject matter; it's about a process, and actually the right of the defense in respect.

Speaker #1: So first, we have made an appeal of this judgment, for which we are waiting the outcome. Then, if the judgment is sustained, it means it will go back to arbitration.

Pascal Juéry: Then, if the judgment is sustained, it means it will go back to arbitrage, but not for the full arbitration, just on the specific issue that was pointed by the court related to the right of the defense. So we are not starting again. Point number 4, no, we keep the money. There is no impact at all on the money. I would like to remind everyone that we have prevailed in two arbitration of the subject matter. So whatever the decision of the appeal, we are extremely confident that it will be the case for the small, well, the part that we will have to review in the arbitration. So no, we are keeping the cash. Point number 3, HealthCare IT, and thanks very much for the question, Alexander. It's an excellent question.

Speaker #1: But not for the full arbitration, just on the specific issue that was pointed out by the court related to the right of the defense. So we are not starting again.

Speaker #1: And point number four: no, we keep the money. We keep the money. There is no impact at all on the money. And I would like to remind everyone that we have prevailed in two arbitrations on the subject matter.

Speaker #1: So whatever the decision of the appeal, we are extremely confident that it will be the case for the small well, the part that we will have to review in the arbitration.

Speaker #1: So, no, we're keeping the cash. Point number three: Healthcare IT. And thanks very much for the question, Alexander—it's an excellent question. First, I would like to remind everyone that we are investing a significant amount of R&D in the business.

Pascal Juéry: First, I would like to remind everyone that we are investing a significant amount of R&D in the business, and we have over time increased significantly our efforts in R&D. Because today it's close to EUR 40 million out of the business, but it is about EUR 240 million. AI is not only an investment, it has a return. For instance, today we are using AI in our coding activities. Here you have an immediate benefit because you are increasing productivity by 30% to 50%, depending on what you do on AI. So actually, it's not a cost, it's a boost for us. Indeed, we are integrating. We always have integrated AI for many years in the diagnosis part, in the solution part, in the image generation part. We have already solutions that are commercial today in AI.

Speaker #1: And we have, over time, significantly increased our efforts in R&D. Today, it's close to €40 million, out of a business that is about €240 million.

Speaker #1: AI is not only an investment—it also has a return. For instance, today we are using AI in our coding activities, and here you have an immediate benefit because you are increasing productivity by 30% to 50%, depending on what you do with AI.

Speaker #1: So actually, it's not a cost—it's a boost for us. And indeed, we are integrating, we always have integrated, AI for many years in the diagnosis part, in the solution part, in the imaging, and in the image generation part.

Speaker #1: We already have solutions that are commercially available today in AI. The third impact, where we are using AI, is actually in what we call workflow orchestration.

Pascal Juéry: The third impact where we are using AI is actually on what we call the workflow orchestration. Because remember, we are not selling only a software, we are selling a full solution. Where we are managing the workflow of the radiologist from the time he takes an appointment to the time the image is being stored and archived. Managing this workflow is leveraged today by AI. So don't believe that we need a specific more budget for AI. We are using our current R&D resources to actually invest in these solutions. I gave you three areas where AI has an impact, and I repeat it. In the coding itself by going faster and doing more for the same resources. AI solutions to help the clinician to make a diagnosis.

Speaker #1: Because remember, we are not selling only a software; we are selling a full solution, where we are managing the workflow of a radiologist from the time it takes to make an appointment to the time the image is being stored.

Speaker #1: And archived. Managing this workflow is leveraged today by AI. So don't believe that we need a specific, more budget for AI. We are using our current R&D resources to actually invest in these solutions.

Speaker #1: And I gave you three areas where AI has an impact. And I repeat them: in the coding itself, by going faster, and doing more.

Speaker #1: For the same resources: AI solutions to help the clinician make a diagnosis, and, three, automation of the workflow also to gain productivity and capacity at the end of the day.

Pascal Juéry: And three, automation of the workflow also to gain productivity and capacity at the end of the day in a world where we are resource-constrained for radiologists. AI is totally embedded in everything that we are doing in HealthCare IT. Actually, for us, it is a great opportunity to develop our products for the benefits of clinicians and patients.

Speaker #1: In a world where we are resource-constrained for radiologists, AI is totally embedded in everything that we are doing in healthcare IT.

Speaker #1: And actually, for us, it's a great opportunity to develop our products for the benefit of clinicians and patients.

Alexander Craeymeersch: Okay. Thank you. Maybe if I can just ask a small follow-up on that. Does the cloud also allow for third-party applications to be integrated?

Speaker #3: Okay, thank you. And maybe, if I can just ask a small follow-up on that: does the cloud also allow for third-party applications to be integrated?

Pascal Juéry: Oh, yes. We are providing, as I said, a full solution model in which we have our own, of course, software, but we also integrate third-party software. The answer is yes. Absolutely.

Speaker #1: Yes, we are providing, as I said, a full solution model in which we have our own software, of course, but we also integrate third-party software.

Speaker #1: So the answer is yes. Yes, absolutely.

Speaker #3: Okay. Thank you.

Alexander Craeymeersch: Okay. Thank you.

Speaker #2: The next question is coming from Guy Sips from KBC Securities. Your line is now open. Please go ahead.

Operator 2: The next question is coming from Guy Sips from KBC Securities. Your line is now open. Please go ahead.

Operator: The next question is coming from Guy Sips from KBC Securities. Your line is now open. Please go ahead.

Speaker #5: Yes, thank you. I have one question that I already highlighted in my morning note, or this morning: At the new director recruit, and the new CFO, have both a carve-out history.

Guy Sips: Yes, thank you. I have one question that I already highlighted in my morning note this morning. As a new director, Kurt Decat, and the new CFO have both a carve-out history. Could this lead the way for HealthCare IT?

Speaker #5: Could this lead the way for healthcare IT?

Speaker #1: Well, you're right. But they also have history in corporation as well. I think current cut with CFO of Sibelco, for instance, which was not a carve-out.

Pascal Juéry: Well, you are right. But they also have history in corporation as well. I think Kurt Decat was CFO of Sibelco, for instance, which was not a carve-out. I think Declan has experience as well in very good corporate names like Rolls-Royce and what else. But the fact that indeed they have an experience and background in PE is a plus for me and is a plus, I think, for the team because we are going through a transformation. Yes, where we might look at strategic options. Of course, we are always looking at strategic options. Okay? I think it is a very good observation from you, indeed. But they are not only PE, they are broader than that, most of them.

Speaker #1: And I think Declan has experience as well in very good corporate names like Rolls-Royce and whatnot. So it's not, but the fact that indeed they have experience and background in PE is a plus for me.

Speaker #1: And it is a plus, I think, for the team because we are going through a transformation, yes, where we might look at strategic options. Of course.

Speaker #1: We are always looking at strategic options. Okay. So, I think it's a very good observation from you, indeed. But they are not only PE.

Speaker #1: They are broader than that—most of them.

Speaker #6: Maybe to.

Guy Sips: Okay.

Operator 2: Maybe you can then

Operator: Maybe you can then

Speaker #5: I'm going to speak to my question. Could this lead the way for healthcare IT?

Guy Sips: Stick to my question. Could this lead the way for HealthCare IT?

Speaker #1: I'm not going to comment on that. I mean, clearly, the first priority we have for healthcare IT today is to succeed in the cloud transition.

Pascal Juéry: I am not going to comment on that. Clearly, the first priority we have for HealthCare IT today is to succeed the cloud transition. Okay? Now, if the question is, why do we keep an IT business with an industrial business? It is a legitimate question. But for the time being, I think we have been the right shareholder and investor for HealthCare IT, given our track record in the past years on the business transformation. Again, this is our first priority. Clearly, it builds up the value of this business.

Speaker #1: Okay. Now, if the question is why do we keep an IT business with an industrial business, it's a legitimate question. But, for the time being, I think we have been the right shareholder and investor for healthcare IT, given our track record in the past years.

Speaker #1: On the business transformation—and again, this is our first priority—and clearly, it's to build up the value of this business.

Speaker #5: Okay. Thank you.

Guy Sips: Okay. Thank you.

Speaker #1: Fiona wanted to add something.

Pascal Juéry: Fiona wanted to add something.

Speaker #6: Yeah, I just wanted to add, based on the eyes of the CFO, to your question. He is, I think, at Agfa—we just need an all-round, comprehensive CFO.

Fiona Lam: Yeah, I just wanted to add, based on the eyes of CFO to your question. He is, I think, Agfa, we just need an all-around comprehensive CFO who is pretty in finance, corporate finance, but also good in transformation, who is strategic optionality.

Speaker #6: Who is good in finance, corporate finance, but also good in transformation? Who is strategic in optionality? That is where a good, competent CFO comes in.

Pascal Juéry: Yep.

Fiona Lam: That is where I competence as CFO.

Speaker #1: Absolutely. And by the way, you yourself have experience in both corporate and PE-backed companies. And that, I think, is part of being a well-rounded CFO, as you said very well.

Pascal Juéry: Absolutely. By the way, yourself, you have both an experience in corporate and in PE-backed companies. I think it is part of being a well-rounded CFO, as you said very well. Okay.

Speaker #1: Okay.

Speaker #5: Okay. Thank you.

Fiona Lam: Thank you.

Guy Sips: Thank you.

Speaker #1: Thank you.

Pascal Juéry: Thank you.

Speaker #2: There are no further questions at this time, so I will hand the conference back to Pascal Juery, CEO, for any closing remarks.

Operator 2: There are no further questions at this time, so I hand the conference back to Pascal Juéry, CEO, for any closing remarks.

Operator: There are no further questions at this time, so I hand the conference back to Pascal Juéry, CEO, for any closing remarks.

Speaker #1: Well, thanks a lot. Thanks a lot. So again, as you see, we have addressed the film situation, I think, quite efficiently. And that shows today in our results.

Pascal Juéry: Well, thanks a lot. So again, as you see, we have addressed the film situation, I think quite efficiently, and that shows today in our results. In the meantime, I want to repeat my message. Nothing is broken with the growth engines, on the contrary. The commercial momentum that we are seeing for HealthCare IT, we have never seen that before. Gaining so many new customers, large contracts, and very interesting contracts. Digital Printing Solutions is in growth mode, and here the name of the game for us is only to accelerate this growth. ZIRFON is not having a good year, but stay tuned. It's going to change very rapidly in 2027, and the technology is confirmed to be the top class and the reference technology for membranes in the hydrogen world. So clearly, we are extremely confident about what we are doing.

Speaker #1: In the meantime, I want to repeat my message: nothing is broken with the gross engines—on the contrary. I mean, the commercial momentum that we are seeing for healthcare IT—we have never seen that before.

Speaker #1: Gaining so many new customers. Large contracts. And very interesting contracts. DPS is in growth mode. And here, the name of the game for us is only to accelerate this growth.

Speaker #1: And therefore, it is not having a good year. But stay tuned—it's going to change very rapidly in '27, and the technology is confirmed to be top class and the reference technology for membranes in the hydrogen world.

Speaker #1: So, clearly, we are extremely confident about what we are doing. So, thanks very much, and speak to you now in November, I guess.

Pascal Juéry: So thanks very much, and I'll speak to you now in November, I guess.

Speaker #2: This concludes today's call. Thank you for your participation. You may now disconnect.

Operator 2: This concludes today's call. Thank you for your participation. You may now disconnect.

Operator: This concludes today's call. Thank you for your participation. You may now disconnect.

Operator 1: The host has ended this call. Goodbye.

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