Hello, and welcome to the Agfa Group Q2 2025 Results Call. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Pascal Juery, CEO, to begin today's conference. Please go ahead.

Thank you very much, and good morning to everyone, and thank you for attending. I'm here in the room with our CFO, Fiona Lam; with our Investment Relations Director (sic) [ Investor Relations Director ], Viviane Dictus, and members of the Executive Committee. And we are going to walk you through the set of results for Q2 and the first half of the year. I think first message is on the business. As you've seen, very contrasted situation between our 3 businesses, our 3 main businesses. I mean, a strong HealthCare IT, and I'll come back to that, but the P&L delivery was very good, and we only have positive things to say going forward for HealthCare IT. DPC, disappointing growth, actually a lack of growth in -- especially in our growth engines area. There is a trough in the market regarding green hydrogen projects. And digital printing equipment sales were impacted by the market context, but nothing is broken. And if anything, we continue to progress in our markets. And of course, regarding the film activity, we have seen, I would say, a faster decline of the medical film market, faster than anticipated. And immediately, I can tell you that this will call for additional restructuring and efforts, not only in product supply, but also in our go-to-market. This is something that we have started, but we will come back with more details in November in the Q3 call. So that's for the business. Two events, 2 very positive events also for the company, I believe. First is the resolution of AgfaPhoto, a long-standing case that was resolved in June. So you see the P&L impact today, and you will see the cash impact in Q3, but very positive and as well as the agreement signed on the revolving credit facility for the next 3 years. So these are also positive news. And third, I will also explain to you how we are going to realign the organization of the group due to the -- I think, for 2 reasons. First, we want to have a better readability of our results by reporting on growth segments and mature segments, I would say. And also and more importantly, to have a fully integrated management of all film and chemical activities related to the current situation we are facing in the market that will end a better management of the overall value chain. Last but not least, I would like to remind you that, as usual, we are a seasonal business and that the second half of the year is always stronger than the first one and '25 will be no different. If you remember, I mean, we do a significant portion share of the EBITDA of the year during the Q4, and it's going to be exactly the same during 2025. I think that's for everybody also to keep that in mind, this is the way our markets are really working. So if I go back to this slide and give a little bit more color on everything that I said. First, HealthCare IT, strong P&L delivery on the first half of the year, which is not common. Typically, it's more the second half. This year was a bit different. We continue to successfully transition to the cloud and where I'm also very pleased is behind these very good numbers, actually, that's the performance of North America. North America is our target market, our first priority in terms of market, and we are growing and making progress in this region, and that's exactly what we want to do for the strategy. On order intake, we are -- Q2 last year was a record quarter. It was EUR 60 million order intake actually representing almost 40% of the total year. In Q2 this year, it was not as good, but order intake is a bit lumpy. So on a 12-month rolling, we are stable. But in fact, we are very confident to end the year with high teen, I would say, growth in order intake. So we keep the momentum, and we keep adding new customers to our line. Top line growth. As you see here, it's interesting to see the impact of the currency. More than, I would say, about 2/3 of our margin comes from North America is dollar denominated. The first part of the year was positive for us reported in euro. The second part of the first half was strongly negative. And that's what you see here, meaning the growth is a bit understated due to this currency. DPC, some top line growth, but not in the growth engine, I would say, more in specialty fuels and chemical business and more price-oriented than volume oriented, I would say. While Green Hydrogen Solutions and DPS, I would say, stable performance over last year. Then overall market definitely looks a lot softer. So EBITDA approximately the same as last year, especially when you look at the first half, the full and first half, it's on line with last year. And as you see, we're still expecting growth. Radiology, well, the decline of the medical market actually is faster than everybody could expect. It's mainly in China, which represents more than half -- well, represented more than half of the global market. It has also been implemented in other countries in Asia like Vietnam. So it's a very fast decline. And the thing is the reason of decline is too fast for us to be able to evacuate -- lower our cost at the same reason. As you know, we have our EUR 50 million program, which is in full swing and we are implementing this, but all the cost measures are spread over the next months until actually the end of '26. And therefore, we have a bit of a time lag where we are. That's point number one. And most of the initiatives that we are taking will accelerate during H2 as already decided. This being said, given the current market situation, we will do additional restructuring efforts, as I said, continuously in the product supply, and we are already working on a plan that we will come to you with a lot more details in November, but also on the go-to-market, where we're going to review our setup here. Now if I turn to the numbers, so you see overall pretty stable sales, but very different dynamics according to the business as usual. EBITDA strongly decreasing versus last year due to the situation in film and especially medical film. If I look at -- this is a slide that we are showing right now is the evolution of our mature business and the evolution of our growth engines. Well, I would say a strong decline of our film, of course, as you know, and the growth of our future-oriented business has been a bit more subdued for the reasons I explained on the market environment, especially for GHS and DPS. EBITDA, we continue to make progress, of course, overall in the growth engine, but the impact of the film and especially medical film is taking its toll on the overall business results. Now I'm going to turn to Fiona to comment the bridge, Fiona? Next slide.

Thank you, Pascal. As Pascal already mentioned, our adjusted EBITDA has been impacted by Radiology. So you see we are EUR 9 million lower versus last year Q2. This is primarily contributed, as you can see, gross profit of Radiology is down by EUR 13 million because of volumes and loadings of the factory. DPC, this growth engine is not really contributing to growth this quarter and, therefore, also together with the good performance in HealthCare IT, we're not able to offset this accelerated decline of the film. On the other hand, you also see a good level of cost control. It contributed a small few millions earning into 2Q. So that all in all helps us, and we will continue this good high cost control as well in the second half of the year. If you look at free cash flow, Q2 is a small minus EUR 3 million negative free cash flow. This is a very good improvement. Actually, you don't see it from this graph compared to last year Q2 because it's EUR 37 million better than last year Q2. Also for the first half year, it's EUR 45 million better than first half of 2024 if you compare to this year 2025 and 2024 first half. This has -- this big improvements, mid this, is not related to AgfaPhoto because as Pascal said, the cash gain is in July. So it's not in the first half of the year results. The improvement in our cash flow is mainly linked to a very good trend in working capital and control of working capital. We have a lot of initiatives running and improving our working capital to the right level of the business and also provision and others related to lease, receivable build down, and we are collecting those monies. Having the back in this cash flow, we're still investing in our future growth. We have invested EUR 8 million more in CapEx in the Q2. With this, basically, I could say we are quite happy with the free cash flow development and evolution in the first half of year. And I expect the second half of the year will be improving further. Next slide, giving a perspective on our net financial debt or the total debt, which is still relatively high because, as we know, the pension debt is very high. Yes, it's evolving, of course, in the last many quarters. We are still consuming cash, as you know, even though we have been improving it significantly versus last year. You see we are still negative on the total net cash flow perspective. So you see the net financial debt excluding IFRS 16, excluded pension debt are increasing. As normally in Q1 and Q2, we always consume cash and Q3 and Q4, we start to actually improving as well. So the net financial debt normally trends down at the end of the year. For the pension, you also see actually a continuous trend of improvement. So it's coming down steadily quarter-over-quarter. Worth -- already mentioned by Pascal, a 3-year revolving credit facility has been renewed and signed 1st of August to EUR 180 million. This is a 3 year maturity until August 1, 2028, thanks for all the financial institutions' support and confidence in our strategy of Agfa for the next years to come. Just to explain a little bit also to all of you about the governance of the new revolving credit facility. You see we have 4 covenants, which would be applicable as of Q3 onwards. We also would, of course, disclose the transparency of the 4 financial indicators. The new covenants which remains the same as the previous facility is the leverage and the interest cover. The definition of the leverage is net financial debt over our adjusted EBITDA. These are all calculated excluding IFRS 16 impacting is also calculated on a rolling -- past 12 months. Interest cover is adjusted interest over net interest expense. Again, the same definition applies. They are both tested half year. And you see basically the covenants level on leverage is at midyear 3 and at year-end is 2.75. And year-end it would slightly decrease according to our strategic lending for the future, so going to 2.6 in 2026 and 2.4 in 2027. The interest cover minimum stays with 5. Then there are two additional covenants being added. One is adjusted minimum EBITDA excluding IFRS 16 on a rolling basis and it's also tested half year and the minimum is EUR 13 million. We also have a minimum liquidity, being the cash and cash equivalent plus the headrooms, which we have under our facility agreement. So this is tested quarterly. It's the only one which would be tested quarterly and the minimum is EUR 13 million. In terms of numbers, you see the numbers were already explained there on sales and bottom line. What you can also see a bit here is the gross profit, operating expenses. The gross profits decreased because, of course, the lower volumes has a large impact on our loadings and the fixed cost coverage. And so that's mainly because of the top line decrease of the medical films. And then we have a mix also in the DPC and in terms of, let's say, the growth engines and the industrial films. So those mix has a different profitability mix for the group. Next slide. If you look at our net results, we were benefited, the net results from the AgfaPhoto. So the P&L impact of the AgfaPhoto, you see them in the adjusted and restructuring expenses, which is booked at EUR 38 million. So that helped our results to a positive plus EUR 3 million as compared to last year of the [indiscernible]. Thank you.

Now thank you, Fiona. Now let me turn to HealthCare IT. So what are the key messages? As you've seen strong performance for the first half. Happy because the geographical mix is very good, that we grow where we want to grow, meaning in North America. And our successful transition to the cloud continues with several customers that we started in Q2. So overall, a very good first half P&L growth versus last year. And here, we just want to give you the real nominal growth adjusted for currency impact we see. And the recurring revenue, which is important to us, has never been that high for us, 58% of our total Q2 revenue. Rolling -- 12-month rolling order intake were more or less stable versus last year. Again, I want to stress that order intake can be lumpy by quarter. Indeed, we are just replacing the strongest quarter ever by a quarter that is a lot more, I would say, normal. But I can tell you that knowing what we have coming for Q3 and Q4, we will continue the overall growth. And as we said, mid- to high-teen growth for the full year. And I'm also happy to say that we continue to win new logos, new customers. It was about 20% during Q2. It will be probably even a lot more for the rest of the year in Q3. So really, we are pleased with where we are. The trend we are seeing right now is the -- you've seen in Q2, cloud was very small in order intake. But if you take last 12 months, it was close to 30%. And if anything, during -- for the second half, this percentage will increase probably significantly. Cloud will represent a much higher share of our order intake. And I would like to remind you that we are sitting in the top 3 in the KLAS ranking for all categories and regions we compete in, yes. We are always in the top 3. And as you know, we have a number of best in KLAS awards. So just looking at the numbers, that's pretty what I described already. And I'm also pleased to see that the gross margins continue to increase year-over-year. So overall, very happy with the situation in HealthCare IT. DPC, a bit of different story. DPS, as you know, it's a business that you -- that is growing -- normally, should be going 10% to 12% per year, and it has been our track record for the past year. The first half of the year was very different. The growth almost came to a halt. The reason is actually mainly the equipment market. In fact, that was impacted not especially by the tariff discussion, although it was part of it, but that it kind of froze a lot of investment decisions by our customers. We have seen towards the end of the first half an increase in our order taking, and we believe that our H2, therefore, will be rather good. But the growth -- the overall growth we were expecting for the year is probably a bit challenged even if anything -- if nothing is broken in this market. Just to tell you that we are continuing to bring innovation to market. And this is also the reason why even in a subdued market, we're not seeing any decrease so far across the line. And also a very good news for us is actually the sign-off of our first SpeedSet single- pass printer. Took us approximately 9 months to go to this point at our first customer, Delta Group, in the U.K. So we are very pleased with this progress. And of course, it's a strong message for the overall market in this area. So now we have a printer that works well commercially. Green Hydrogen, well, the overall environment of green hydrogen has been rather more than subdued, I would say, we have seen cancellation, delays of course. So this is an area for which we are not expecting any growth for '25, and we believe we will see probably the trough of the market pretty soon. Not everything is frozen in this market. Actually, we do still have a lot of dynamism in the regions like China and India with a lot of projects and probably Middle East. But it's fair to say that in North America, for the time being, things have been a bit frozen by the changes, I would say, in the regulations introduced by the new administration and as well as in Europe, where the development actually today is delayed. But overall, it means we are standing our own, but we cannot rely on our membrane to provide significant growth right now. So if you look at the numbers, you see that -- you see what I'm explaining, that for the time being, our growth engines are actually -- have a very subdued performance in terms of top line, while still it's increasing, but that's mainly the reflection of higher price, not really higher volume. The EBITDA close to last year, actually, if you take the first half. It's almost in line with last year. And so we continue. Really nothing is broken with the strategy. We are continuing what we are doing in DPS. We were successful with our market launches, and we have a lot of opportunities going forward. Okay. Let me turn to Radiology Solutions, which is, of course, today the main issue in our results. So strong decline of the medical film market, let me just exemplify it for you. I think the market has been divided by 2 a couple of reasons actually and it means 25% or between 25% or 30% of the global market will disappear very quickly due to digital, I would say, application enforcement in China. That's what we are going through. So it goes very fast. So indeed, it's a loading issue for our film, where we are actually decreasing very quickly. But the reason of decrease of -- we have mainly age-related measures that we have been implementing and it goes through a calendar. And so we are evacuating fixed costs as fast as we can, but we cannot go as fast as what we are seeing in the market. I'd like to remind everyone also that having signed a social agreement at end of January, the -- all this program could be implemented only from March. So here, it's still just the beginning and we have a lot more to come, for instance, the shutdown of Bushy Park will be effective only at the end of Q3 actually. So we have things in place. This being said, given the situation, we have launched a new additional program in restructuring to further the efforts in terms of revising the footprint, mainly today in Mortsel but also looking at our go-to-market strategy where we're going to go a lot more from a market-driven approach to an asset-driven approach and, therefore, more, I would say, lean and mean and global management of the film business. That's really what we're going to implement. So if you look at the numbers, you see the very strong impact today of what we are going through in the [indiscernible]. Outlook. I think our outlook is, yes, probably we have a bit of -- HealthCare IT, I would say goes well. And I'm really happy where the business is going. The order intake momentum will continue. I mean I see a positive development. The only thing that I would mention is the second half will be a lot more cloud projects rather than on-premise project. And as you know, when this is the case, it tends to delay -- it delays the recognition of the revenue and spreading the overall recognition of the margin. But overall, I would say, that all the evolution is very positive. We are gaining, as I told you, new logos, especially in North America, very positive. Digital Print & Chemicals, we probably have a more subdued view of the growth that we had starting this year. We thought we will be able to continue the DPS growth. That was not the case in the first half. We are still looking at growth in this area, but probably not to the tune that we were doing before. And as I told you we are not expecting any growth for Q3 for the membrane given the situation in green hydrogen, so more delay. Not coming back to radiology, I think I said it and we expect the current trend to continue. And again, the only response we have is really our cost restructuring program that is in place. Last but not least, of course, for full year 2025, we are expecting a positive net cash flow at the group level. Of course, the cash we received from AgfaPhoto has -- is helping a lot. We also believe that we'll be in a position to have resolved radiology's situation by year-end. I will now turn to really what we are doing in terms of new structure. So we have announced today that we are reviewing our structure and actually, it does 2 things. First, we will have 3 segments, 2 growth segments and 1 mature segment, which will improve the readability of our results and especially the read across our strategic drive. Two segments for growth because one is IT and one is industrial, I would say. And the mature segment with Imaging and Chemicals, which used to be if you want radiology part which, on top of that, we have regrouped all industrial film and chemical activities in the same business, so to speak. So improvement of the readability of the results but also and more importantly, regrouping film and chemicals in a single organization. Given the challenges that we are facing, we absolutely need to run the business a lot more on an asset-driven manner actually, and to have an end-to-end strong leadership to drive the restructuring that has been in discussion. So this is really probably the key takeaways for the new organization structure. In terms of people, I think it's pretty much as you see continuity because HealthCare IT, of course, is led by Nathalie McCaughley. Industrial Solutions is led by Vincent Wille. And I take over the imaging and chemicals part. So quite continuity, but a different setup in fact. So in a nutshell, what's the takeaways is HealthCare IT and strategies implemented, everything goes quite well. DPC, temporary slowdown of the growth, I would say, for market reasons and not performance for that part because if anything, I think we're doing by well compared to market. And film situation that calls for a lot more traditional restructuring and cost takeout so to come back to restore the overall profitability of the value chain, which is our intent of course. I'm going to stop here and take the analyst questions operator.

[Operator Instructions] We'll take our first questions from Alexander Craeymeersch from Kepler Cheuvreux.

Alexander from Kepler Cheuvreux. It's nice to see that you're catching up in HealthCare IT. I'm just wondering, how much more top line can you still process on the short term with same employees? And considering the growth you're foreseeing, do you plan to have some new employees in this area? And also on this topic, do you foresee that the current margins are sustainable going forward? I'll take them one by one.

So on HealthCare IT, we are not only -- we are growing. We have new logos, but we are also, in a way, in a change of model by which we go for traditional on-premise projects to cloud-based and cloud-enabled projects. So to your question, do we need a lot more people to ensure the growth? And can we ensure a good top line growth? A couple of considerations. Do we need more people? I don't think so. Because actually, the SaaS delivery is more efficient than the traditional model, okay? So I wouldn't believe we need to add more people on the contrary, but we need to go through this transition. On the top line growth, what we need to look at in this growth is really the growth of recurring revenue. This is really the sign, the KPI, if you want, of a transformation to a subscription model versus a project model. And as I said, what -- the fact that we are going to more cloud projects will have a deflationary impact on the top line at some time. Why? Because again, the project is not invoiced in the same way. It's invoiced over 5 years instead of being invoiced 80% during the year of implementation. So it -- that will have an impact on the growth rate. But it's a transition period. And again, we are transforming project revenue into subscription revenue, which are a lot more stable. You have a lot more upside. You benefit from the growth and whatnot, okay? So -- but overall, that's a answer -- so the top line growth will be impacted by this move to the cloud and the delivery system of the cloud means we can probably absorb a double-digit order intake growth without adding a lot of resources.

Okay. Then second question would [Technical Difficulty] that this was going to be back-end loaded. So I'm just wondering if there were any subsidy numbers in the first half of this year?

Subsidy numbers, no, no, no. No, no, we do not. We will -- on the ZIRFON plant, the second phase of the subsidy will be received only when we demonstrate I mean a full industrial production, which we are doing right now. By the way, we're working on that. So we are expecting this cash inflow of subsidies to be in rather at the end of the year and not -- we have not received it in the first half.

Okay. And then the last question would be, it's basically on the P&L on Page 10 on the report. You mentioned the profit from continuing operations of EUR 31 million corresponding to an EPS of continued operations, EUR 0.20. Quite a lot, of course. But could you clarify how much of this relates to AgfaPhoto? And maybe that's -- it's a case that they expect to turn the [indiscernible] and maybe what was the reasoning to include this in the continuing operations? Because I don't see it as continuing.

Fiona?

AgfaPhoto itself in the adjustment restructuring is EUR 38 million. And the finance cost, net finance cost is EUR 7 million, so a total of EUR 45 million. It's not in the discontinued operation because it's -- we actually have it accounting-wise accounted for nonrecurrent. So you can see as in the part of the nonrecurring. Also, of course, the legal fee and -- because the EUR 45 million is actually the compensation of all the fee, yes, expense that Agfa has encountered in the last I don't know how many years, before my time. Those were also in the normal business. It's been never classified as a discontinued operation.

So it's for consistency reasons. We incurred during many years, legal expenses that were all in nonrecurring, but in continued operations. Now that we are getting reimbursed for these fees, it's also nonrecurring, of course, but continuing operation. That's the logic, Alexander...

Okay.

And again, to your point on HealthCare IT, I should add what -- where I'm really happy today, that today, we are winning deals, including versus sectoral. That's also, I would say, new for us to win new logos versus sectoral as well. So that's also what gives us a lot of confidence.

Yes, congratulations with that.

Yes.

We are now taking our next questions from Laura Roba from Degroof Petercam.

First of all, on H2, we know that H2 is usually better than H1 at Agfa. How do you look at that this year? Can we foresee an improvement in DPC? And also in HealthCare IT, you mentioned that in H2, there will be more subscription revenue model. So does it mean that we should expect a more subdued revenue growth? Then a second question. So still on HealthCare IT, you mentioned the transition from the project to the subscription model. How long do you take this -- this transition will take? Do you have any visibility on this? And then the last one on radiology and the program to adjust the cost base. So the first saving will materialize in H2. Can you give us an order of magnitude, please?

Okay. So on the H2 -- well, thank you, Laura, for the questions. On H2, it's a normal seasonality pattern. Typically, I would like to remind you that last year, more than 40% of the yearly EBITDA was in Q4. And that's also we kind of installed more than 40% of printing equipment in Q4 as well, and that's the same in India. So along actually almost all of -- and HealthCare IT, of course, it's always a stronger quarter. So this is the way the business is designed and it will be no different this year. So yes, the H2 will be a lot stronger than H1. And the normal, I would say, seasonality will apply. That's what we are seeing, and this is exactly what we have in our plan and forecast. So that, I confirm. Regarding your question on SaaS model. Yes, I mean the P&L delivery will depend how many cloud projects we will install in H2 versus on-prem projects. And yes, depending on this mix, that will have an impact on the short-term P&L of the business as well. And what we are seeing today is we had a first half where we did relatively good number of on-prem traditional projects, where we see H2, where we have a lot more, I would say, cloud SaaS projects, okay? So mechanically, do we expect a little bit more subdued in H2? That might be the case due to this impact, but it's not really -- it's not going to be super material. What goes against us as well is the currency because we are pretty much more and more dollar business in HealthCare IT, and that translates into less euros. But again and overall, I mean I'm very positive about this development. So -- and even if there is a short-term impact on the top line for HealthCare IT, it's still a very positive development. And your third question was about? Sorry.

It was about the cost base adjustments on results.

Yes. And your question more precisely is how much are we going to...

Yes, could you give an order of magnitude of what we can expect in H2?

What we can expect in H2 regarding the recurring savings of our project? Well, we have not commented so much on the calendarization, but we will -- all this is cumulative. And every month, we are making more progress to evacuate cost. So the overall impact on the second half is probably going to be around, I would say, EUR 10 million, I would say, something like that between -- that's what I would say.

Okay.

Okay. Thank you very much, Laura.

[Operator Instructions] It appears there are no further questions.

Thank you.

I would like to turn the conference back to Pascal Juery for any additional or closing remarks. Please go ahead, sir.

Thank you, operator. Thank you, everyone, for attending this call. Again, I repeat, growth engines, HealthCare IT performing very well. DPS, for the time being, a bit impacted by market conditions but should recover quite well actually. And the final question mark on the hydrogen project, again, it's a question of time. And in the meantime, we are taking all necessary measures to address the situation in film. And as you've seen, we are also having -- we are paying a lot of attention to our cash management and especially the management of working capital, but not only, in order to make sure that we keep our liquidity level. So thanks very much, everyone. Thank you.

Thank you for joining today's call. You may now disconnect.