Christian Reinaudo - President and CEO Kris Hoornaert - CFO

Good morning everyone. This is Christian Reinaudo speaking here, and we’re going to discuss the Q4 and the full year 2016 results this morning. I am on Slide 2 on the disclaimer. On Slide 3, we see the numbers of the quarter and the full year top line globally on the year. We had the decline of 3.5% excluding currency exchange rates, which is obviously a concern that we need to address and I will come back to that later. But the good news is that if you look back to the numbers of the last three years, it was minus 5.5% excluding currency exchange rates the year before and somewhere around 7.5% the year before. So, there is kind of progressive recovery and you see that in Q4, our top line was close to flat. In particular, thanks to the growth of HealthCare which of course comes in the contracts with the Q4 of last year, which was in 2015 which was very weak because of the hardcopy films starts a story. The older line that you see on this chart has a very positive evolution below sales. The gross profit delivered exactly what we said we will do. By the way in five years since I told you that we are going to improve the gross margin for improvement of EBITDA 10% of growth with improvement now coming from gross margin from [Indiscernible] and in spite the drop of the [Indiscernible] interrupt in gross margins, so the €857 million gross margin this year and it was just over to limit. [Indiscernible] as our considerations for lower costs as other one, but overall things are more or less comes from contract things and EBITDA resulting for these numbers, we see it's coming to 6 million in the profit and 265 million in the full-year, which is a 10.4%, so clearly above the target of 10% that we set for ourselves coming year. If I move to the Slide 4 with the results below the line of EBIT in the P&L and you see the restructuring charts that we have in the quarter and this is of course it is at least in the comments this morning. In fact, this is very due to the fact that we have booked the closure of [Indiscernible] plan, and it's also related to the decision we have taken of course on years of pertained to stop [Indiscernible]. We started to run in that present [Indiscernible] and the I would say significant, so the moment particularly limited across horizontal seasoned reserves there and it gives €42 million for year, and we can see that in the dilute that they'll see what's the good news for us to rule. The first one is that we prepare the growth for gross margin for the regions to come, and second we finish service that is in there to increase the units of our [Indiscernible] and our decisions to programs to account where and we need that in the secondary solutions as well in controlling of this efficiencies reducing. Operating results of 166 million for the full year or 19 for the quarter and non-operating results, which is of course the pensions and the financial cost minus 11 million in the quarter and 61 million full year. Here also we can say that on the pensions for example that fact that we have 90 million more on the balance sheet which is just the result of an IFRS as standout calculation. I see that as good news in terms of cash flow because we been able to reduce the cash flow and the P&L impact of our pensions and this is the result of efforts. So, I believe here we see also the positive revolution of these elements. Profit before tax as 115 million in the full year, taxes are higher than the guidance that we give, but the cash start of this tax is in line what we keep saying 20 million, and there are other elements in the P&L which are coming into the pictures, so Kris can answer questions that you may have on this later on. And that result off course 80 million compared to 71 million of last year is already strong, but if you take into account these elements of the fourth quarter and EBIT of strong results for the Company. The Slide 5 shows the debt which finally ends up the year 2016 in a positive position, cash position, which is I think of so an achievement in the consistent cash flow we have delivered. If you look at the cash flow deliver on the slide year-over-year, we have a very recurring situation in terms of cash flow delivery which is obviously coming for last part of the working capital evolution that not only. I will not comment on the Slide 6. They are different elements, but you see that in number of days most of our elements of the working capital are improving, growing for the payables and going down for the receivables. And as shown on Slide 7, I would say that overall the Group revenue has increased a little bit less than the rest of the year. Is it a trend for the next month or next quarter? It's early to say that is definitely a trend that we're going to cultivate for the years to come. There are always plus and minus in a given quarter, but overall I believe that the effect of the positive evolution of our growth engines in particular the IT business of its scale, which is now clearly on a steady growth curve with a positive profitability improvement as well. I believe that this is going to help in the years to come clearly that applying evolution of the Company. But again it's not a matter of months or quarters, it’s a question of the medium term evolution of the top line. Second bullet point the graphics business where we've seen that the gross margin has improved. Positive raw material effect, yes, for the aluminum, but nevertheless there is just clear improvement of the efficiency of the graphics business in terms of gross margin. Recurring EBIT 61 million and the rest I think has been commented in the previous charts. If we move now on Slide 9 to the business group focus, graphics first. You see the pie chart which is showing the same evolution, progressive evolution where we see the other business moving down, now at 10% of the phase. By the way, it's not that much down which is good news also to some extent because one of our competitors has decided to stop the film and therefore we capture some extra business in the market. But the inkjet, software and service part is growing steadily. Obviously that inkjet this year in 2016 was somewhat growing less than we expected. It was somewhat flattish, but it's also a year where we had the few transitions. We had product in the [Indiscernible] which was not coming as expected. So, I have no worry about here again the trend in inkjet, but the year of 2016 was a bit disappointing in terms of growth of inkjet. Under the study, it was very positive on the growth of the IT scale. And digital prepress stays where we are. If you read carefully the announcements of our competitors, you will see that the price pressure we have on the plate normally should start to ease one of these days because everybody is suffering on this price pressure. Aluminum is slightly going up and creating up. So, I expect that there will be some kind of wisdom, let’s say this way, on the price erosion coming both from our key customers and coming from the key competitors. But as a fact for 2016, graphics has still suffered from significant price erosion on the prepress plate. Numbers on Slide 10, you see that top line of graphics is obviously the pain we'd say today in our model in terms of sales. Most of the decline in the business is coming from the graphics evolution. We’ve seen in Q4 a slightly positive evolution, which I believe is the beginning of hopefully a trend. I don’t expect the sales of graphics to grow in the short-term, but at least and again I repeat when I said the price erosion came to a level now where the expected increase of aluminum price normally should help us to ease a little bit on this trend, which has been damaging the business not only for us but for everybody in the last few years. Gross profit improved in spite of this price erosion effect. The SG&A, R&D well in their control and the EBITDA shows a significant improvement to 8.4%, which is in this industry a very robust EBITDA and contributing of course to the positive achievement of 10.4 for the whole group. Slide 11, most of it has been commented. The other competitor to film business continued to decline, but we see that there is a little bit of easiness for us because of the decision of one of our competitors to stop. I mentioned about the margin efficiency and film business highlights that you can read, and if you have questions about the positive evolution of a few products obviously Stefaan Vanhooren can answer some of your questions. HealthCare Slide 13, we see that the pie chart also continues to evolve roughly according to our plans. So, we still have the 50% of the business, which is in this some of the hardcopy and the modality business. And the modality you see that the evolution compensates for the CR drops, so that’s basically a constant part of our business, the same for the hardcopy film. Classic film goes down and the IT is showing a very beautiful growth in 2016 with both the image in IT where we have by far the best platform in the world and a strong order book which is being built. And the HIS/CIS business based on the mainly on the office, but not only which is clearly showing the strong size of improvement also. So, on this chart I would say that everything happened in 2016 as expected. As I guided you during the year, the Q4 was stronger because of the recovery of the situation in our hardcopy film, which by the way I hope we still have got, but the hardcopy film might be a bit like the plate pre-pressed the domains where we have to focus our attention in 2017. But the rest of the business that in particular the IT business is showing a nice evolution of top line. Numbers Page 14, as always I am very talkative, so I commented most of the lines before the slide. You see a strong evolution of the quarter four top line. You see the reset is increasing for under control as expected and recurring EBITDA 13.4% is obviously the big contributor to the EBITDA of the group for the year. Highlights on Slide 15, business highlights we have introduced a new DR system, which is a dynamics system and showing some kind of multipurpose capabilities, and we have released the new version of our enterprise emerging platform. The enterprise emerging platform is quite new and we are now evolving in the release into a maturity level which is convincing more and more customers in the world to come to this platform. Specialty Products, numbers on the Slide 17, good results for a business which is obviously suffering from the decline of the classic films, you see that the top line is rolling by 4%, but the rest of that table shows fantastic evolution including the EBITDA of 16.5 million, compared to the same number of last year basically on a top line which is quite of decline. And here again, we have done the strong performance in the two growth engines, which are small but growth engines for this business group, the Synthetic Papers Synaps and the Electronic Materials Orgacon. No major elements to report, you can read the slide as well as I do. So I just would like to take two minutes to give you my high level view now or where we stand in Agfa. You may remember that in the years 2008 to 2011, in this period it was pretty complicated. The Group was supposed to be split and we didn’t split then we had the financial crisis then we had the seasonal increase. So, it was not the good period. But in 2011 after we refinanced the Company, we said okay, let's work now in what a quite environment for us, let's work to re-stabilize and strengthen the Company. So we have developed product and product offering which is very strong, now and we have reduced the debt to zero. We have improved EBITDA from the 7% where it was in 2011 to 10.4% where it is now. So, I really believe that we have clearly strengthened and delivered on our promises in this phase. The next phase is now starting and the next phase is about the top line. So, we need to shift the focus of this company again based on the solid ground that I believe we have built in terms of both balance sheet and P&L in the last year. So, we need to shift the focus of the Company onto the growth, which is a difficult shift. We have built here a bit like we did for the gross margin improvement and the construction of an EBITDA of 10% where we decided to work layer-by-layer in the Company, starting from the top level on the program base on again four pillar, a bit like we did again five years ago when we told you we are going to work on the factor efficiency, the services, the procurement and the product portfolio rationalization. Here, we have decided to work on four pillars which are. First of all, a revisiting of the way we can better resist on our traditional businesses. Better resist on our traditional businesses means what? It means that first of all, we need to make sure we positioned the efforts of this company in the places where these businesses are still solid and even growing. I speak about hopefully Latin America when they recover, I speak about Africa, I speak about India and I speak about China. Second thing is that I believe that whatever we do as big players, the casting the Kodak, the Fuji, the Agfa. There is an erosion of these businesses and there will be a sort of inevitable consolidation of our time. Is it going to happen in three years and five years and seven years? I don’t know, but there will and my ambition, the ambition of Agfa is clearly to be a strong player in this potential consolidation. And then this, in this domain what is important is to keep cost base and a technology leadership that we have today. Cost based in this factoring not so for the film and leadership in terms of technology, which is true for the hardcopy films, which is true for the plates. The second pillar of this strategy is to boost even further our growth engines. I was saying a few minutes ago, I'm more then confident on our IT business now and I believe that after years of efforts, after big investment and acquisitions in the past 15 years, I really believe this business is now on the path to take off clearly. But the other growth engines, which are the inkjet, digital and the few chemicals, specialty chemicals in the specialty product groups, which has to deliver. They have to deliver more. And they have to deliver profitably, and the focus, my focus personal focus, and the focus of expo would be in the years to come on to performances of these businesses, there Inkjet and a few chemicals in the specialty group. I believe that we have whatever it takes in terms of products now. It’s a matter of making sure we find the right ways to set better then we'll come back to that. The third bullet point of this slide is about what I keep calling cleaver acquisitions. Cleaver acquisitions mean that we're not hunting for large acquisition because we're realistic people and we know where the resources of this company are. But again based on the solid ground we've built in terms of financials that means no finance should debt anymore and profitability in most of our business, which is recognized. I believe that we can now move to this new phase, where, okay. There are a few actors, a few players in the market in particular in the IT world, which are good technologies to continue to try to acquire. But of course we don't want to overpay for this target. We want to make sure that the targets we may have everyone to acquire are going to be successful acquisitions. And this is we're today, we're still a little bit not struggling but we're still learning and this is something that I would like to develop in the years to come. And finally I was talking about shift of this company. We all know that to recover the situation where we're today and which I'm very glad, I read this morning that we're delivering a mix set of results, I'm not saying it’s a mix set of results, it's very good results, because everything which was even mixed like the pensions or the factory closure, it's good news for the business and future evolution of the business. I'm not saying, it’s good news to close the factory and saying that results on the financials will be positive evolution. So this company has been driven in the last five, six years and even 10 years or most, to make sure that we manage carefully the cash and the profitability of the Company and the cost. So the future we have build, thanks to god has been a cost culture, which I believe will stay now because it's part of the new DNA of this company. The shift is now to make sure that the entire organization is going to evolve to lot of growth. And even the domains where we have not growing because it's difficult reducing the drop is a way to grow. And this means that we need to launch and we already done for part of programs to change some of culture elements of our sales force for example adding more value. Agfa is to shy today in the market we have a few products software in particular which are making a big difference for our customers and this is something we need to further emphasize. We need to stop to some extent selling square meters and kilometers or liters I think or whatever and to shift into what is it that we can solve is the customer as a problem that we have today. And I believe it's something that we have already started to do but we need to emphasize that. And again it's a possibility today when it was not a possibility a few years ago when the Company was still in a situation to make sure that we deliver a decent sales and profitability, today's it's a given let's built on that. Two slides that I will quickly comments or Kris, you can comment them because you have mic and I think it will be faster on the pensions. The first slide is the Slide 22, which is giving us what is for the former 10 countries the situation of the pension.

Okay, does the mic work? Yes, the overall pension deficit for our 4 material countries has increased with €90 million, but you need to understand the components being the liabilities and the assets. And I start to say that we did in quarter 4 big energy buyout in U.S. and what does that mean, we sold a €140 million of liabilities to an insurance company, the first population of inactive people where earning less than 1000 or getting less than $1,000 per month. And so we brought that we sold that to U.S. insurance company and it cost of us only 2% above the book value of our pension. And for us that was a very good deal and that means that assets and obligations were an amount of €143 million have been taken out so no more risk from our side in the future. And that's also the reason why you can see that the assets have gone down with €115 million so if the 143 would not have happened than we would have their positive figure. The obligations have improved with €25 million, but again the improvement we have been decategorization without a buyout and basically it is the discount rate who further went down over the last year. So then moving to the next page we always give, a flavor of what is the pension cost and the EBIT that the first line. What is the total pension cost? What is the cash flow? In terms of costs in the EBIT it was €23 million same amount projected from last year. And then if you look to the overall pension costs it was €55 million last year's 54 and it's scheduled to be 47 for next year. The most important figure as far as I'm concerned because you know we are focused on the cash flows and the cash flows was €82 billion, last year it was €80 million and is projected to be €73 million for next year. So remember this figure has been for a longtime around 90 to €95 million. We are now more in the area of 70 to €80 million. And then for the – when you build your model for the cash flows and you start from an EBITDA perspective than you have detailed from the EBITDA as it is about €50 million of cash being the difference between 73 and 23 which is a little bit, that’s the guidance. Thank you and that will give you. A - Christian Reinaudo: Thank you, Kris. So just to conclude before I’ll leave the floor to questions, I just would like to repeat and sympathize the feeling you have on this situation. So we have delivered a strong year 2016. We have met the two medium-term target that we set to ourselves long-time ago reduces a reduction of the debt, financial debt and 10% to be down sales. The elements in the quarter results which are perceived factually at like values or surprises and that would again reach to what I said the pension and liability increased, this is the fact of the standard in IFRS but it is important to in case as you just said that means we have been able to improve the situations of the pensions in the last year cost differently and particular in terms of cash flow. And in terms of costs, closing your factory is never good news so it’s a misery even if we are trying to do that in a very keen manner but in terms of financials, closing the factory and having the same capability of manufacturers we have to is the fact that we demonstrate our efficiency in terms of improvement of our structure. And finally, there is one point which is clearly for me as further focus which is the top line. As I said minus 3.5 erosion of stock top line in this year is a bit better than what we have seen in the past two years but obviously something that I am not happy with and we‘ve got to focus on the entire organization in the years to come to solve this problem. Thank you and I’ll leave the floor now to questions. Q - Unidentified Analyst: [Indiscernible] housing change compared to last year and they also give us on the pensions, influence of 35 basis points interest rates increase or decrease what the impact will be where it might be on the balance?

[Indiscernible] because we have a reduction in the torrential years, this is obviously based on the current exchange rate productivity that there. For the dividend if I look at the Q4 the guidance we have given to you that, if you take something that six to nine months delay it's about the same. During 2017, we will see it for recurring the guidance it has to change because of there is a revision of saying in the cost of aluminum. We will evaluate, but at this stage I would say that there is a good guidance and in the inheritance of aluminum through those backlogs on the results of from your tax model, but something which we'll take into account. For the future software service and later we will see, if we have to adjust date evolution of the different elements of the total cost of the revenue. But at this stage, again as Kris said, you want to answer on the improved pension.

Yes, improved some pensions, the sensitivity for an increase probably these opportunities, if I think is around €80 million.

[Indiscernible] perhaps question on how can this on this positive IT on growth, we have a nice growth in 2016 in Q4 or we have a variety for us what's as moderate on the IP side. This is as we see this is had a positive impact on margins in the fourth quarter in the sense that there are less commercial contracts that boost the growth and that you are more advancing for that are supported by the retailers high-margin contracts a small question. And then second on hardcopy sales in terms of quarter-to-quarter and then year-on-year in 2016 first quarter and that is because of the change in the institution as positive. How should we see hardcopy in 2017 perhaps that you returned to the question mentioned during the presentation you make some comparison with the trade business and geographies how do we see this medium term perhaps as both in terms of top line trends and margin evolutions?

I started in the believe here in Q4 2015, we had a caring to the backlog discussion and the finalization of the in times so it has a good impact over the 2015 that we demonstrate as they went off over the sales more run off but this is significant as well as the size of the one quarter for mainly in 2016. But again if you look at the plans and this is what you have to look at and we just have talked about the backlog by the way that we have and you will see a shift is not on the strong retails of product but it is clearly second and you may see if you read the statistics there the 20 million and now where were we in the competition speeds are effectively lower its overall because the tax because the commodity is the enterprise everyone to have a completely integrated backlog but the consequence of this is at the same time that are just the average size of our comfort is growing and the another time to deliver this is growing also. And we have just followed good news [Indiscernible] vigorous for this contract that we have to, we got [Indiscernible] to reverse, we believe that this contract was signed already sometime. And then this is the reason why I'm continuing this and this is the reason why quarter basis you may feel some of our interest. Because see evolve to business which is, I would say as a [Indiscernible] but more than secondary, so cross sort of the 5 million if you had a contract which is coming to sign the contract, you may have impact to the quarter which is significant, which was not the phase of impact where the other is also was no rental for EURO 200,000, when today we see [Indiscernible] base. So this is something that you need to learn to get results and we may have to communicate in different manner overtime so make sure that there is no business sending that again, but year-over-year as we discuss from [Indiscernible] which is really the obvious, platforms that we have right now and the documents management results growing positively is the main so. This is also why it has this good evolution of the plan and the domain also [Indiscernible]. It is not an evolution which is outside the Germany, France and Italy, not yet, but it's Italy evolution which is very positively now that will grow significantly in Germany, will grow significantly in France and Italy.

There is a follow up.

The follow up, given this confidence [Indiscernible] you were also talking about [Indiscernible] acquisition health care IT, it includes accelerating the move to new countries for the IT health.

I think the purpose today is the phases where eventually understood by customers and come first. And these countries are more of metro countries, which are to some extent Western Europe, some countries in the western Europe may be metro or local and the US. So this propose for recent evolution accelerate for us would be a in this kind of countries, don’t expect that the event of refugees in the India or in China for IT company. But again if you look at the most of European country, in terms of software services and financially you have to say across in the [Indiscernible], then you come to U.S. and Europe and to the North American places. And the few exceptions in the countries, but these [Indiscernible] might be on the verge of certain evolution of certain -- they recover a little bit on their economic situation but at this stage I will not put the focus on this kind of [Indiscernible]. [Indiscernible] so on the same, I would the year 2016 we normalized to 30% on certain business of that, and there is overall flattish, shows that we have something which is, it can back to normal. And are we going to say normal at a low okay, because we did business is obviously a business which is compared to the evolution to IT base and for our energy, and how long it will be I guess, say that are in more in [Indiscernible]. When they speak about these kind of business the same way as think [Indiscernible] because we keep talking about these business kind of digitization of the overall industry that there is another thing which has to come, which is the IT of this business, that in refers to object, the enterprising is close to assume. And I [Indiscernible] it could be nervous or impacted by the way year-over-year to see that You also see that the acquisition is gives us favor as that the effort about cautious [Indiscernible]. And then we have a little [Indiscernible]. The some process [Indiscernible] but so far so good. I want to come back one more time on comparable.

Can you give us indication how much information you gave the [Indiscernible] group after the growth on the same information that the desktop community has on you already given more inside in the books so what kind of discussion took place.

[Indiscernible] we didn’t give any information [Indiscernible] permit. To some extent that's why we stopped so quickly in an attempt. We've been very few start to look at their process that there is yet no information on the IT business because we are selling competitors. Even if they're going to not be [Indiscernible] but we didn't want to give any information. And for that we get information which I would say clarification on credit information, nothing more. Exactly what I do when I speak to the [Indiscernible], existing when I do when I speak to investors and our [Indiscernible] nothing more. And then really we're no one that ask [Indiscernible].

Another question on consolidation in graphics. Also if you look at the fourth I think fourth quarter sales [Indiscernible] progress. First quarter was defined as a little bit more moderate but I think the time as we seeing that in general, in graphics could you give a bit more color on consolidation with the traditional market big thing for industry in terms of technology and costs. Is there a room of consolidation in the market in the fastest [Indiscernible] we're going get?

So it's really clear to speak to you precisely about talking that when you has to happen, whenever the consolidation happens we are first as always we're ready [Indiscernible] consolidation is happening. And we almost, there is also some player which was the big one by customer want as a commercial trading, because [Indiscernible] it matters, and we've remain to continue to reduce the cost. So it's kind a like they're defend this industry against the order potential threats which are the flash screens and [Indiscernible] box, which are this kind of web based information as opposed to do some paperwork [Indiscernible] statement. So everybody is fighting for size. So size for customers and I believe that when you see the overall equation of this expertise and arrangement wait for €4 billion globally. When you see that a significant path of the growth of the volume is now moving to the emerging markets clearly in particular to China where we see there is often in China some players which have some omissions. I believe that most of the big players the Fuji, the Kodak the [Indiscernible] taking the big distributed, the Chinese, the Agfa, there will be an obvious way to optimize the overall supply. a bit of what we seeing in the film, that the film is probably happening a few years before. We have seen in the film and the analog business Kodak giving up, we have seen Fuji giving up, in terms of graphic. We have seen basically less and less influence of the small players which used to be there and today it's a lot about [Indiscernible] in term of film for graphics. I believe that in all these domains where we see a reduction of volume over time, if you continue to keep the fragmented setup that we have together in terms of facilities, in terms of logistics, supply chain, in terms of technology, R&D development amongst kind of things, the equation has a limit. We are not close to the limit to that, because when you see the EBITDA of Stefaan and graphics it’s a good EBITDA and the majority of it is still coming from the preferences, not yet coming a lot from the [Indiscernible] business. But our job is to extrapolate the trends and to make sure we manage for the future and I believe that if I take five year rising, because I talked about the five year past, if I take a five year horizon, I will easily bet on the fact that there will be something changing. And the question is obviously for each of the companies to find a way to manage the interest of the shareholders and to reposition the company in the right way. That’s all I can say at this stage. Maybe in five years, people we judge back this discussion and say [Indiscernible] you had good ambition, but you failed and another one would have been successful. This is not what I dreamed of doing of course. But we need to do something as a group, as a management team and this is why we put this as a big pillar even if it is a bit surprising to have in the growth [Indiscernible] change to have the resist on the growth -- on the solution business as one of the big pillar. I believe we owe our customers and our shareholders, we need to -- we owe them a good reflection on how to solve this long-term, medium to long-term issue that we will all face.

In the press release you mentioned a release of the new version of the enterprise [Indiscernible] platform. Is that kind of have result -- positive result in 2017? Meaning the people postponed investments and now they are just waiting for the new release or is it just a few make investment?

Yeah. So, it is not -- this is not in this terms, in fact the Enterprise Imaging is a new product, I mean, it’s a product which is what three or four years old. So, the first release is always the same story, you release and the name is 8.0, you release the first set of solutions which have limitation in terms of clinical applications, in terms of size, in terms of scalability and in terms of things. And of course during the first deliveries to your customers you tell them that you will have other features and the new release is about that, which is --.

It's been of a service.

Yeah. So, it's going to boost the business, yes, because when you have more and more solutions because we have been the first status in this field. So we need to keep our leadership by keeping developing releases to deliver more bigger specification to our customers, but I would say the current release that I mentioned here, this is the release to some extent that we promised to most of the customers that we have already signed on. Okay.

I think what you said software as a service is an expansion of the functionality of the platform, so that we can satisfy even more consumers than we already satisfied. But it’s a natural evolution and we will have that on a yearly basis. So, nothing more, nothing less.

This platform is not a tool like the banks, this is really an IT platform where you have different dimensions, you have obviously the [Indiscernible] on dimension, which means that we can serve different wards in the hospital not only the ideologies, but all neurologist which are using images. That's a dimension. The second dimension is that different functionalities -- macro functionalities that means you can use this platform as a tool from mobility, for collaboration, for archiving, for distributing images so that second dimension that you need to look at and the third dimension is the service we give to our customers when they are doctors that means the clinical applications. The features which are helping them to go faster and to have the road the better diagnostic for their patients. So in the three dimensions we are developing things and obviously there are lot of intersections in these three dimensions where you need to improve. You need to give clinical applications overtime to all you neurologist and introduce a robustness in terms of mobility collaboration tool, et cetera bigger and bigger and of course you need to develop this in the different domain some of the activity. That's why you will see a permeant evolution and we have to keep that evolving to make sure that we can maintain the leadership.

In this regards, but can you give us some guidance on the CapEx for 2017?

Keep the 40 million and I believe you will not be far from the reality. You look at Kris. You believe Kris more than me, so Kris can you repeat maybe [Indiscernible].

During the presentation you mentioned looking at the four pillars for growth. In going tomorrow value instead of square meters or liters? How should we see this statistical industry that is used to this it's probably very difficult to change, is it moving to more packaged deals, is it a combined offerings making it with, if I don’t know, monthly fees or recurring fees? How should we look at it?

This would be developed over time number one. We have started programs it starts with the trading an indication of our pivot. And it starts also with the people of Agfa realizing that the products that they have in their hands or some of them, I'm not saying all of the products of Agfa better than the competition, but there are some products which are obviously the leading products that we want to promote to make sure that we grow this business. In some of these product lines we have a feature set which is making Agfa a unique solution. So this is the first two things that we have started. Training the people for value selling the sales force and to some extent the service people also which are in daily contact with the customers and second educating the people to understand precisely what is it that we deliver in our products. I'll give you an example. The DR offer of Agfa embedded the best image processor in the world. To the point that we have even customers which are telling us, could you put this software on an equipment -- mechanic equipment of another superior, my answer is no. And if you believe that it is important to have to use a software buy Agfa. I could multiple these examples. So that's the basics of what we need to do. But it goes at the same time with realization by the industry including our customers that we are now moving to a domain which is the so called digital domain, where the value is not that much in the value of the products you deliver the hardware, but its more and more in the software and the way you can use the different products and platform. Again if you're a newspaper of today, the cost of the plates, its peanuts in your total cost, it's nothing compared to the cost of paper, nothing compared to the cost of the workforce. But at the same time if you cannot use the workflow software that we deliver, then you get in problem, and then you would get in problem. So why is it that we continue to sell square meters of aluminum like if the plates have no more value than just reselling aluminum as oppose to these values that we bring to the customer. I understand they are under pressure of themselves off course. But they need to also identify, who are the suppliers which are delivering value for their own business as opposed to put under pressure everybody and if you continue to sell liters and square meters you never get that. People have to realize that they don’t buy square meters of plates they buy knowhow of Agfa including -- and by the way not only Agfa, not saying that for everything we sell, we have the best products in the world. But the same should apply to some of our competitors where they are strong. And this is I believe the best way for this industry to get out of the mud where we're today with this spiral of selling for price and cost and developing new products just for cost cutting and selling at a lower cost et cetera, et cetera, because this will have an end which is will tragic for some of the company's existing today. Isn't a newer but is just to focus that will give in terms of being the management of this company to recover top line evolution. There are no more questions in the room, do we have people?

The restructuring costs this year were very high, how do you see the evolving in coming years, will it continue to be what around 20 million like in the cost or will that come to an end.

It will come to an end may be one day, but on the medium terms you have to stick to what we have said for long, that means this company spends in the range of €20 million to €25 million a year to restructure the business. Just look at the size of our businesses, that is not the unit you need to keep that in mind, look at the price charts, you still have a precast business and graphics which is two-third of the business, which is structurally in decline. You look at the business of its scale, it’s a bit more impressive but you still have the [Indiscernible] CR Business which are the structurally declining part versus the another frame, which are still being presenting something in the range of 45% or 50%. So you will still have a significant size of a traditional businesses which are in structural decline. Our team isn’t come from the fact that the rest, which is bigger and bigger grows, faster and faster, but of course we continue to keep an eye and actions on the strong base of the structural business we have. And this is why I believe we're not close to the end of this [Indiscernible]. We keep every year changing the population of Agfa. In a nutshell in the last five years roughly globally we have added 1,000 to 1,100 people leaving the company and 700 people joining. So you see the company of about 10,000 to 11,000 people, globally it's a big shift, it's a big chunk of people. So and this is what I call the transformation of Agfa and the minute we stop transformation, and the minute we stopped having a this level of company management that gives you a transformation, that this minute this company will be back again in trouble, we need to continue moving. And this will be finish when we have only the digital technology that I can better view that at this time there will be other things which are going to force Agfa to transform itself. Kris you wanted --.

One comment is that the restricting cost of 42 million this year about half is non-cash cost, because there are also will be understood, about half is only a cash cost.

And are there any plans to restore dividend payments?

There is no plan to distribute dividends at this state. We still believe that the best use for the shareholders of the shareholders of the cash flow we deliver believe as we invest this cash flow as much as possible in the development of the company. I answer as a member of the board. No more questions? Do we have questions outside of the room here, operator?

Yes we have one question from the line of [Indiscernible]. Your line is now open you may begin.

Good morning. [Indiscernible], ING. I have a couple of more additional questions on behalf of the [Indiscernible]. On the repurchasing cost, the cash out I believe in 2016 or is there a part in 2017? Next question on the --?

I interrupt you because we didn't hear you well. So the question was about the cash restricted in 16'-17'?

Yes.

Yeah so I think Kris answered the question just a few minutes before, out of the €42 million, about half of it is cash this year and the rest is non-cash.

Then second question on the pension liability, how do you expect annual cash flows to evolve beyond 2017?

Again, I think Kris gave a picture. So let's here we believe we'll be in the range of €70 million plus compared to 80 of this year. and we believe this will be the same kind of picture for a few years, but let's think about 2017 and the number was given in the slide on pensions showing €72 million if I remember well, cash outflow next year.

Okay. And due to the bad line, I didn't catch the impact of silver on your guidance, could you please repeat that part, thank you so much.

Silver, will keep guiding on the fact that we will give two elements. We say first of all if you take the combination of the tonnage we use, the price of the silver, the productivity between dollar and euro and the commercial elements of our contracts in average, the average weight of an evolution of $1 per ounce on the silver has a full year impact on Agfa of €3.5 million. And the second thing we face that in terms of timing, there is a delay There is a delay of something three, four, five months depending on the businesses between the time buy -- the time situation the accounts of the company.

Okay. Thank you very much.

Thank you. At this point, there are no questions on queue. You may proceed.

Okay. So, if there is no more questions I think we can close this call. And wish you all the best. And see you or talk to you in May.

Thank you, speakers. That concludes today's conference. Thank you all for joining. You may now disconnect.