Economic slowdown affects businesses in the second half of the year

Excluding currency effects, sales decreased 4.2% to EUR3,032 million

SG&A costs decreased by more than EUR100 million, exceeding the targeted amount

Recurring EBIT at EUR138 million versus EUR197 million in 2007

Net result at minus EUR167 million, taking into account non-cash charges: an impairment loss of EUR119 million and an exceptional deferred tax charge of EUR34 million

Strong reduction of net financial debt from EUR723 million in the third quarter of 2008 to EUR673 million in the fourth quarter of 2008, despite the worsening business conditions in the fourth quarter

In the second half of the year, Agfa HealthCare’s sales figures were affected by the economic slowdown as some care organizations are postponing their investments in Enterprise IT, Imaging IT and Computed Radiography (CR) equipment. In 2008, Agfa HealthCare successfully introduced its IMPAX Cardiology Suite in pe. The major contract signed with the Assistance Publique – Hôpitaux de Paris hospital network serves as a key lever for new successes in the field of Enterprise IT.

Agfa HealthCare further reduced its SG&A expenses by EUR79 million or 21.0%. On top of the weaker sales and the high raw material costs, the business group’s full year results were strongly affected by the decision to book a number of one-off provisions (totalling EUR12 million) for work that remains to be done under the terms of certain contracts signed in 2006 and 2007. In the fourth quarter, temporary production stops for imaging products and write-downs on receivables and inventories also had an adverse effect. Recurring EBITDA amounted to EUR117.3 million (or 9.6% of sales). Recurring EBIT was EUR57.8 million, or 4.7% of sales. Excluding the one-off elements mentioned above, the business group’s profitability would be at a substantially higher level.

Agfa HealthCare – fourth quarter 2008

Agfa HealthCare’s sales decreased 13.1% to EUR325 million. SG&A costs decreased by EUR25 million or 25.8% compared to the fourth quarter of 2007. Due to the effects of the economic slowdown and certain one-off effects, recurring EBITDA decreased from EUR54.9 million (or 14.7% of sales) in the fourth quarter of 2007 to EUR29.6 million (9.1% of sales). Recurring EBIT decreased to EUR14.1 million or 4.3% of sales.

The highlight of the quarter was the annual meeting of the Radiological Society of North America (RSNA). In spite of the economic conditions, the number of professionals visiting the world’s largest medical meeting remained stable. Agfa HealthCare’s booth was very popular, with the IMPAX IT solutions and the complete CR portfolio taking center stage.

In imaging, ProHealth Care in Wisconsin (USA) ordered 10 DX-S digitizers for use in three of its care centers. Riley Hospital for Children (Indiana, USA) purchased a DX-S for its Neonatal Intensive Care Unit. Recent studies show that the system allows an X-ray dose reduction by up to 50%, without reducing the diagnostic quality of the images.

In the field of imaging IT, Intermountain Healthcare (Utah, USA) partnered with Agfa HealthCare to integrate imaging from its 21 hospitals and from its more than 150 clinics. Furthermore, the US Air Force granted the newest version of Agfa HealthCare’s Picture Archiving and Communication System (PACS), IMPAX 6.3, and the IMPAX Data Center an Authority to Connect, which means that these systems meet all requirements to be installed on US Air Force networks. In the UK, the private acute care center King Edward VII’s Hospital Sister Agnes signed an agreement for the installation of an IMPAX Radiology Information System (RIS) and a PACS, as well as a number of CR 35-X digitizers. In Cardiology IT, the Antwerp University hospital (Belgium) signed an agreement for IMPAX Cardiovascular. This confirms the success of Agfa HealthCare’s internationalization strategy of its Cardiovascular solutions outside North America.

In Enterprise IT, Agfa HealthCare’s ORBIS solution continued its strong growth in the fourth quarter. In the course of 2008, 35 new contracts have been signed in Germany, Austria and Switzerland.