Agfa plans to separate healthcare IT business

Agfa-Gevaert said it is considering separating Agfa HealthCare's healthcare IT activities into a standalone business. In other news, the company also reported that revenues and earnings dipped for Agfa HealthCare in its second quarter.

The board of directors of Agfa-Gevaert has asked the company's management to study how to organize the healthcare IT business into a standalone legal entity and organization within the Agfa-Gevaert Group. The move would be a natural progression in the continued transformation of the Agfa-Gevaert Group, and would enable the healthcare IT business to increase its focus on its current markets, according to the vendor.

Agfa HealthCare's imaging business would remain as part of the Agfa-Gevaert Group, however. The company believes business, along with Agfa Graphics and Agfa Specialty Products, would also be better positioned to pursue growth, profitability, and new opportunities as a result of the change.

Meanwhile, the ongoing slowdown in sales of its hardcopy and classic x-ray products was the key factor behind a 4.7% decline in revenue for Agfa HealthCare in its second quarter. For the period (end-30 June), the firm had revenues of 264 million euros, down from 277 million euros in the same period a year ago. Recurring earnings before interest, taxes, depreciation, and amortization (EBITDA) before restructuring and nonrecurring items was 32.1 million euros, compared with 43.9 million euros in the second quarter of 2016.

Agfa noted digital radiography (DR) products performed well, and its Healthcare Information Solutions business produced growth in both revenue and order bookings. While its Imaging IT offerings experienced a temporary slowdown, the continuous strong order bookings for its Enterprise Imaging platform ensure future revenue growth, according to the vendor. Agfa said it is increasing investments in its service organizations due to the success of the Enterprise Imaging platform.

On the downside, Agfa's reorganization of the distribution channels in China continued to weigh on the hardcopy business, which performed well in the other growth markets, according to the company. The effect of the reorganization should start to abate in 2018, Agfa said.

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