Christian Reinaudo - President and CEO

Emmanuel Carlier – ING Guy Sips – KBC Securities Stefaan Genoe – Petercam

Okay. So good morning to all of you. I will therefore present the results of the quarter two of 2014, which by the way shows a good progress towards our target to deliver a double-digit EBITDA. And this of course is supposed to be achieved mainly through the improvement of our gross margin. On top of the improvement of the gross margin and the subsequent EBITDA, you may have seen that we have also executed on a certain number of targeted actions to register restructuring costs and I will come back to that later on. On the cash flow side, the working capital reduction has helped, of course, to deliver a strong cash flow this quarter also, therefore reducing the debt to a almost historical low level. On the flip side, the top line is still an issue as you may have seen. Roughly the top line is declining by 8% to 9% if you exclude the currency exchange rates which are still weighing on the top line. But it’s not only the currency, there are also of elements on which I would like just to highlight in this introduction two of them. One is the weakness of the emerging markets which seems to be now, not only a short term event but it’s three quarters that we observed that. And another element which is most specific to healthcare which is the very uncertain environment in which we operate and evolve in the United States. So this is just as an introduction and now let's come back to a bit more further analysis. So the top line as you may see in this chart, we are down 8.3% excluding currency exchange rates and you will see that it is across the board. Both graphics and healthcare have roughly the same kind of situation. Of course quite clearly as you know, healthcare should be in a better position than graphics and we see this difference but both are impacted by the situation of mainly the emerging markets and the currencies. On the gross profit side, of course, here comes most of the good news. I must say that of course we are helped by the raw materials. If you compare to the quarter two of 2013 you have roughly $9 to $10 [performance from zero] and based on the model that we have helped you to calculate, it brings a significant reduction of the cost of raw materials. Aluminium also, but to a lesser extent but I must say that we are also benefiting from the results of our efficiency programs, and we may have the opportunity to come back to that later on in the Q&A. On the SG&A side, we limit the expenses. Of course, the current – the weakness of some currency helps us in this case but you see that overall we keep the SG&A level at about 19% a bit more on the first half but the second quarter in particular for healthcare, had brought some efficiency because healthcare launched some actions in the very last part of last year and the beginning of this year and of course, Q2 is improving. So the delta compared to last year is 0.5 points when it was a bit bigger in quarter one. But obviously with the top line decline, it’s a struggle to keep the SG&A level constant but so far we are able to do it. The R&D is somewhat constant but if you look at in fact the full first half we are slightly down. The R&D efforts as you know are critical for us because we need to continue to maintain the leadership position in most of our products, which I believe we’re still doing and market positions are not weakening. But obviously on the top line which is declining we need to adjust the R&D efforts to some extent. But if you look back the last two to three years based on the product customization that we have more or less finished now, this has been achieved. So the R&D expenses are well kept in line with the evolution of the top line overall. The result of these numbers is that we have now an EBITDA which is in the quarter very close to the 10%, of 9.7%, and if you look at the first half we are at close to 8% which is a point above where it was last year. After six months the recurring EBIT is at 7.1% in the quarter. If I move to the below EBIT numbers, so starting from the €46 million of recurring EBIT, you see that the restructuring is very weak. Is it an average of the euro? The answer is certainly not but the targeted actions we have been executing on, being of course the prevention program being all the actions that we've put in place are starting to show results. So I am more and more comfortable with the guidance we have given so far at least for 2014. Of course the restructuring will be linked to the evolution of our business and we will continue to restructure as much as we need to keep the right balance of the numbers of the company but I am more confident that we have achieved a significant result in reducing the cost of restructuring. You might remember that last year we had of course the one-off effect mainly of the RMA [ph] program in the United States which is of course distorting the numbers. So this results in an operating result of €44 million for the quarter. Now the non-operating results which is of course mainly the sum of the financial expenses and the pensions is at minus 13, roughly at constant compared to the first quarter of this year and below what it was last year. The profit before tax stands at €31 million, taxes at minus 3 and the net reserve is at €28 million. The debt is on top of the P&L, another element of satisfaction. You will see in the next chart that a lot is coming from the working capital efforts. Of course working capital – when top line declines, working capital naturally declines, but it’s a number of days that we need to appreciate that and we will see that -- the programs we have on the reduction of inventory as well as improvement of our receivables are paying off. So the debt is at the end of June at €176 million. You may see in this chart – I am now on chart 5 that the inventories are at 107 days of inventory and hence compared to 112 the year before. The trade receivables are also at level which is slightly below what it was a year ago and the trade payables are trending up. So the three parameters are going in the right direction. This is why with something like €120 million of reduction of the working capital we have significantly improved the situation in terms of cash. So to summarize, the quarter two top line has been impacted by the weakness of the emerging markets and the US healthcare market. The gross profit improved by three points of which a significant part is due to our efficiency programs. The net profit grew to €21 million compared to where it was last year in spite of the one-off effect of last year, and the net debt stands at €176 million. If I move on Slide 8 to the graphics business, that additional pie chart shows that the analog prepress business part is declining pretty fast this year, so that's the film -- and mainly the film and obviously the decisions we have taken in the product customization and the closure of our factory in Italy has also impacted the analog plates, impact on the top line but positive impact on the gross margin of course because this business has significantly improved. The numbers are very, as I said in my introduction, very similar to the rest of Agfa, so the sales are down 8.7%. Sales are down because inkjet is still too small of course even growing to compensate for the drop of what is happening in the traditional markets of prepress in the emerging markets. So we have again a significant price pressure on the digital plates and we have of course the reduction of volume of the analog business. So the combination of the two associated with the fact that the emerging markets are not delivering in their GDP what were the expectations, of course, has a significant negative impact on the top line of graphics of minus 8.7%. I honestly believe that both for healthcare and graphics we have swallowed the bitter part of the year in terms of top line reduction and the second half should show an improvement in the reduction of the top line. But obviously the first half of this year was minus 9% for graphics has not been very good. The gross profit of course for graphics, they have the benefit of both silver and aluminum plus the – I would say the very successful efficiency program results and it ends at with a 4% improvement of the gross profit. And we even succeeded with the top line down by 11% to deliver value in euros which is a little bit higher than what it was a year ago with €100 million of gross profit. SG&A, well under control at 19.5%, R&D again under control. So most of the efforts we are doing in R&D, at roughly constant budget for R&D are more targeted now after the product customization, in particular in the inkjet and therefore we delivered better efficiency from our R&D. The recurring EBITDA at 8.5% is a high satisfaction in particular if you compare to our peers and their results and the EBIT is at 6.3%. So the main drivers behind these figures, I explained on the currency, of course negative effect but also the weakness of the emerging markets. The analog prepress business continued to decline and the digital prepress continued to suffer many from competitive pressure. Inkjet posted a positive top line evolution as well as a profitable quarter and the gross profit improved and the recurring EBIT is at 21.5. The business highlights should not be neglected. First of all, we have signed several contracts in Japan which is in line with what we would like to do. Our market share in Japan in graphics as you know was below par compared to what we do in other places and therefore there is a renewed focus on this market. The second bullet point is the European Digital Press Association which has awarded us several awards, of which several – I mean two at least should be remarked. One is the workflow solution Asanti which is a software and the second one is the low migration ink. I must say that we are progressing pretty fast in the development and introduction to market of inks into domains where – that we are not addressing with our equipment and inkjet. And the UV curable inks are successfully introduced. Of course it’s not big number in terms of revenues at this stage but the progression is significant. And finally we have successfully demonstrated that we can integrate inkjet printing solutions into industrial manufacturing lines. So here again we don’t want to move to industrial applications in terms of equipment at least not too fast because the past has demonstrated that we need to be very cautious to stay profitable, I refer to the story of press for example but on the other side, moving progressively and in a well organized manner into these industrial fields through the ink sales and through application demonstration. It's an evolution of our inkjet business for the years to come. Healthcare, the pie chart has not changed at all because unfortunately our IT business has not progressed as expected in particular because of the US radiology market that I mentioned already. The numbers on the Slide 13 show a decline of 6.4%, so a bit less than the graphics decline but still significant in particular for the healthcare business. The gross profit as you see we have basically almost compensated in euros the drop of the top line by an improvement of three points of the percentage margin. The SG&A is kept under control and you see that we are improving in Q2 the control of the SG&A compared to Q1 because we have now the effect of few decisions which were made in Q4 last year and Q1 this year. The R&D is clearly under control and the EBITDA is at 12.3% which is in itself not a bad number but of course would be better if the top line was more successfully developing. The main drivers I think they are the same for the top line as I mentioned already. If we are now a bit more specific on the two different segments, on the imaging segment, I would say that we are still very successful on the direct radiology, the DR, so that’s good news because it's obviously an investment for the future of growth of the healthcare business. And the hardcopy business performed well in the quarter. On the IT side, I don’t come back again to the US situation in the radiology but on the positive side I would say that the information solution, that means basically the obvious and the other solutions associated delivered a good quarter. Gross profit mentioned already, the recurring EBIT is mentioned. Business highlights I would like to mainly insist on the second bullet point which is the introduction of our ICIS Mobile solution and Web Capture. ICIS, you know this is the product solution software suite which is enabling to broaden the scope of our activity beyond radiology in terms of image, in the hospital capturing the images from wherever they are generated from, and this is a very positive evolution, starting to kicking the numbers. You see that India on the third bullet point is also starting to wake up, a significant order of 29 units for the DR, but we also see a few things happening in the IT side in India progressively. Specialty products, you know specialty products, of course, we have these silver clauses in most of our contracts in particular in our big contracts for NDT which means that the sales are going down but they are going down efficiently mainly because of the pass on of the silver cost. So I would more comment this as being almost flat in terms of sales. The good news is that even if our traditional activities such as the microfilm or the cinema are declining, our products for the future of being the Orgacon and print products like Synaps as well as the PCB are performing reasonably well. So that's why in fact we have managed to maintain the top line and more importantly the EBITDA at a good level. you So nothing more to comment on this chart, all the lines are in line with the expectations and the previously announced targets. The main drivers behind the key figures, of course, lower silver price, I mentioned it and I think I spoke about the evolution of the businesses. So that’s in a nutshell the result of Q2. So to wrap it up, strong performance in basically all the points that we wanted to address, and growth -- businesses are growing according to plan, with a little bit of an issue because of course in the US for healthcare. The costs are well under control, the cash flow are delivered, the debt is reduced. The only negative point is obviously the top line, on which we are going to focus a bit more. So normally the second half should show some improvements, but we have more I would say renewed focus on a few actions and a few I would say the tactics in these domains. We are not losing market share in our businesses, it is just this market which is impacted by the overall economic situation. And also I repeat it – the emerging markets which are supposed to be a growth path of our traditional businesses is not a growth path, but obviously hinting the overall situation. So that's it. Thank you and I am ready to take any questions you may have. We take first the questions from the room. And if there are questions on the call, of course I will take them later. Emmanuel Carlier – ING: Hi good morning. Emmanuel from ING. Three questions, the first one is on the gross margin. So gross margin was up 300 basis points but you did not disclose how much is coming from metal prices, how much from efficiency gains? I assume in my model that there is some 13 million positive impact from lower metal prices, could you confirm that number? Then -- 13 million – the second one is on the strike, you mentioned in the first quarter that there was a negative impact of some 5 million and that you will see gradual recovery of that amount in 2014. But would it not be more logical to believe that you recovered that mainly in the second quarter already, if not, why not? And then the last question is on the sales performance. So you have discussed a lot of the historical numbers of course but could you maybe provide some more color on how you believe the emerging markets and the healthcare, IT business will perform in the next couple of quarters?

Okay, on the gross margin split, I did exercise as if I were you, with the guidance you have in terms of cost of silver and aluminium, and the conclusion you should derive from that is that our gross margin has improved by roughly two-third because of the raw materials, one-third because of the rest of the actions. I would say that it is a bit better in terms of actions because the one-third, which is one point basically improvement through our targeted actions is itself a mixed bag of positive and negative. In the negative you have of course the price pressure that I mentioned which is of course weighed on the gross margin. You have the mix of products but so it means the efficiency programs we are delivering are more important than what it looks like to me you understand what I mean Emmanuel. So I would say that the efficiency programs we have -- we are delivering and we have delivered, in particular done already the product customization and still going on, the manufacturing efficiency, the service and the procurement are roughly responsible for good half of our improvement. What is going to happen in the next quarters is of course that the silver will continue to push the gross margin improvement but hopefully the silver cost will be the same. So the gross margin value due to silver will not be deteriorated. And it's just we just have to make sure that the efficiency programs we are executing are at least able to compensate for the mix and the price of orders [ph]. In this case we should be in a situation where the gross margin could stay at least the level where it is today, which is compatible as you see with a 10% EBITDA. Emmanuel Carlier – ING: But here on it will mainly be a top line – you will need the top line to further improve margin?

The top line is obviously the current problem. It’s a structural problem of Agfa, we know because of the dynamic of the different markets and in a normal situation, normal means what it has been historically happened till three quarters ago the emerging markets are still growing in terms of volume of hardcopy film and in terms of digital plates. If this engine of growth is no longer functioning well, we need to adapt the model. So it means that with the level of debt like we have today we could think of external growth which is more addressable now and we need what the healthcare is doing if the -- for example, if the radiology business in the US becomes more and more kind of a commodity business we need to switch from the pure radiology backed business where we were till three years ago into a business which is more adapted to the current place where the money spent in the US, hence the decisions we have taken to move into the ICIS, to move more into the document management and this kind of things. So this is coming but of course the market is evolving at the speed which is difficult to react into contract in a matter of a quarter. So going forward and I link to your third question, I have no crystal ball to know what is going to happen in the emerging markets. We believe that India is going to move in the right direction. We believe that China is not in a difficult position. China, there is on graphics a rather tough competition with the Chinese competitors in the Chinese market but if you look at healthcare it's more normal behaviour. The biggest problems we have today and not only Agfa but the economy in general is coming from Latin America. And I would say the Middle East, Russia, Ukraine and this kind of region, it's a well-known information that Ukraine and Russia have problems, that Middle East is in trouble, that Iraq are in trouble. So all these kind of region is under pressure. How long it will last, I don’t know. That we need to react on a more positive way to make sure that we capture, so that's why we moved for example in Japan for graphics. We have product evolution in healthcare and this will pay off. Question is to know when. So I was already starting to say that I believe the second half of the year if you compare to the second half of last year will be less dramatic in terms of top line compared to what we have seen in the first half. But it will not be yet a pattern of growth. On the strike -- the strike as I said it was an effect in the first quarter that we of course took and the logic, you know it, we have put the stocks to make sure we can deliver while not manufacturing and this will be really over time. The quarter two is the part of the recovery, the quarter three because of the summer is normally the triggers, but now most of the recovery has to come from the Q3 and Q4. So we already reabsorbed a part of the cost. How much, honestly I don’t know. Guy Sips – KBC Securities: Guy Sips, KBC Securities. You were indicating that healthcare IT is not progressing as expected but if that would come back to normalized levels, that would have automatically an effect on the margins. Can you try to indicate – can you try to guide us when you expect that this Obamacare effect could be – have an effect on your numbers again? And you were indicating that you also look now at external growth. Are you looking more in the healthcare division or more in the graphics, can you try to guide us on that as well?

External growth, I will not be talkative on that but I come back to what we said, I would say before the silver crisis and all the economy downtown put us in a situation where we had to be cautious, so back to almost 4 years ago now when we did a capital increase, the logic of my appointment as CEO and the capital increase which was basically at the same time was to try to find growth through external growth of the company. And the logic is back now because we have the debt level that we believe is at the right level. We have completely eliminated at least on the short to medium-term the risk of silver going to fantastic levels. So it's time to rethink of external growth and the logic which was prevailing four years ago is still the same. It has to be either to complement and increase our market positions in the markets where we are strong to make sure that we can harvest and better amortize the cost of R&D in this market. This is true for markets which are somewhat specific as opposed to global. And number two it is targeting maybe a few technology holes that we may have, if you want to shift in the right direction for the markets. So where is it? Again it could be either in the consolidation of our traditional markets, it could be in the IT healthcare in general terms and it could be in inkjet. So the three domains – nothing has changed on the horizon for that. But what is also true is that considering the multiples of this company in terms of valuation we are not going to make crazy acquisitions of multiples that we can never recover. So it makes the equation a bit more complicated. But I am more positive and I think we have now a room for maneuver in this domain. By the way on the debt, I would like to give an information which is mainly clear in our communication but in the quarter we've done two things in terms of refinancing the company. One, you know that we have reissued bonds which are now at maturity 2019, therefore pushing a bit more than 40 million from 2015 to 2019. And we have secured a loan – it’s very similar to what we have secured with the European bank of investment in Canada of €50 million. So in total we have pushed to 2019 the equivalent of 90 – a bit more than €90 million in the quarter. So it means that today with €176 million of net debt we don’t touch the revolving facility. So we have room for maneuver and I believe we can use it intelligently in a few acquisitions which are going to help the top line evolution. For healthcare IT, Guy, effect on margins I didn’t understand exactly what you mean, because it's clear that the margin stays our main concern. So in a market which is difficult we could easily fall into the facility to hunt for business and grow market share at low margin level which is something we don't want to do. So when the Obama – I mean when the US market re-stabilized into a new model, new business model, hopefully we will have the right products to address this market. But it’s not the question of margin to my opinion. Rick, you want to comment on that – so what is happening in the US I think it's good that you give some information.

Okay. So if you look at the percentage of spending on healthcare in the US in GDP terms is about 17%. If you compare with Europe it’s anywhere between 9% and 11%. Now the baby boomers are arriving and they are arriving in terms of reaching pension age. So it is unsustainable to maintain the spending that has taken place traditionally especially in the US environment. So what we see is that indeed there is strong drive to become more efficient. On the one hand and how is that being achieved through a change in business model. In other words, in the past the US healthcare system was based on a fee-for-service model whereas any action that was being undertaken was reimbursed. So for radiology department the more exams you did, the more you basically were generating business and margins for the hospital. Now we move to an outcome based model -- an outcome-based model where provider [ph] has a fixed envelope and within the fixed envelope for example for a hospital or for a network of hospitals that cooperate together you're going to have to treat the patient in as efficient way as possible. So in other words, radiology turns from a profit center into potentially at risk to become a cost center. So that’s change that’s happening, let’s say when I speak specifically to radiology. At the same time of course one goes for meaningful use, in other words, one tries to make sure that there is a meaningful use of IT, so that redundancy -- redundancy of exams wherever that take place is being taken out of the system. And that's why also there is a significant investment at a level of hospital IT – hospital wide IT. And that’s what you find in the basically the investment in meaningful use in board terms. And so a lot of the monies today go into basically the hospital enterprise. That's where the investments are and there are investments in radiology and what we're doing towards our radiology customers is making them more efficient. So when we talk about our new Agility platform and when we talk about business intelligence platform, when we talk about DR that's how we help our radiology business. At the same time of course we gear to a) where the money is but also where we can make a difference for hospitals and I talk then about hospital CIOs, the chief medical officers, the CEOS that have a very, I would say, existential problem and we also help them in addressing these issues. But that’s not with an EMR, there is no virtue for us to be in the EMR market in the US. We do that through enriching the EMR with images and that’s our ICIS solution because EMRs today where all the money goes are typically not rich in images. They have focused first in populating it with the alphanumeric data, lab data etc. etc. but not yet with images. And that's what we bring as well as with document management systems or enterprise content management systems, so enriching also the EMR with in this respect. And that's what we do to indeed address, let’s say, on the one hand the challenge but on the other hand, also the opportunity in the US market. Hospitals in the US market today are experimenting with different models on how to basically cope better with the changes in their environment. And we will see this in I would say the quarters to come, this is not going to – there is no yet – no best practice yet that has been found in the US market as to how this needs to be managed, and you have accountable care organizations where it for example one tries to build a model that indeed treats the patient as much as possible in the periphery, outside of the hospital team. And then that a number of generalist hospitals focused on general exams and that a number of a few hospitals only focus on the subspecialties and then of course do only subspecialties. And this shift between hospitals and primary care centers is what we are leaving today -- helping today also and in the, I would say, in the quarters to come.

EMR, electronic medical record, I assume you are familiar with this. Stefaan Genoe – Petercam: Stefaan Genoe, Petercam. Some two other questions please. First, can you give us some more feeling on profitability in industrial inkjets within graphics and how - what's the delta on this unit in the quarter versus last year? And then second question, two related questions, in the emerging markets business has weak, I have got a feeling that although emerging markets are relatively weak for most industrial companies, I've got the impression it's more pronounced at Agfa is there -- is this possible because there is an accelerated shift in these regions from analog to digital already? And related to this, given the declining analog business and that's where most of the restructuring has been in the past within Agfa, is there a risk that in the coming quarters or next year we could see also accelerated restructuring costs despite the low level from this quarter?

So profitability of inkjet, you know I am more than reluctant to give detail on business unit. I give enough information to the competition. But to be more specific I said long time ago we crossed the breakeven line in 2013 which we do and there is a continuous improvement of the profitability of inkjet over time. In fact, of course quarter after quarter you may have a little bit of differences. But more importantly what I think you have to understand is that we are not yet in inkjet looking for maximizing the profitability of the business. We are trying to reinvest a significant part of finally the positive EBIT that we are able to generate into accelerating our position in the market. I said several times there are today, even in the wide-format printing which is a sub-segment of the inkjet, a small sub-segment, there are still too many players and there will be at the end of the day probably 3, 4 players which are going to emerge and we want to be in these three players. And for that the technology game is important. So we have – that has been one of my main focus in the last two years. I mean the four pillars of what we have done and to improve gross margin are particularly true for the inkjet business. Product customization we are there now, that means we have a platform which is being introduced to the market which is very modular. It means that we don't have to redo machines for any kind of application but if we take modules, which of course has a second impact on the procurement efficiency because we procure the same electronic components, the same building blocks for the more machines. The manufacturing efficiency, we have a factory, if one day you happen to be in Toronto, go to visit our factory in Mississauga. It's a fantastic factory we have now which has been reorganized, refurbished. We have a crew, a very efficient crew. So that’s something which is pretty impressive. And on the service side, while the addition in inkjet was basically to give away services to sell machines, now we have been able progressively to bring the business into a position where the customers have understood that when they buy a solution of inkjet they need to maintain the solution because the ink, the head, the software and equipment is – there is a complete package of the solution and there is an info services. So we finally get to a point where the service is becoming profitable in inkjet and therefore -- and of course we have an attachment rate of service sales which is also increasing. So inkjet is the best example I can give in this company of how the four pillars have delivered improvement. But today if we want to be successful in inkjet we should not be just successful by delivering a fixed percent of EBITDA on the business of €150 million, we need to grow, and for that we need to not only consolidate the position in the wide format printing but start to explore over domains adjacent to the ones where we are. That’s what do with the inks and the applications for growth in the industrial applications. So don’t expect for at least a short period an improvement, massive improvement of the EBITDA through the inkjet. Inkjet is about technology game and making sure we find there the position for the future of Agfa graphics. Emerging markets – do we suffer more than the other ones? Honestly I don’t know. When I read the press releases of the other competitors I believe that now finally everybody says, it was not fashionable when we said that in Q4 to say that emerging markets were not the growth engine that they were supposed to be. But we said it. Are we suffering more? I don’t know. We are suffering and I tell you why, because on our traditional markets being the digital plates for graphics, being the hardcopy film, so it's not – I am not talking about the analog – the analog is dead. It’s an issue of the analog. What is more critical is that we keep for years the digital prepress and the hardcopy film in good position, because this is still the main provider of the cash and EBITDA for the company, while we invest in inkjet and IT. So in these two businesses I said several times the market is somewhat flattish globally but it is flattish because the combination is growth in the emerging markets and the decline in the emerging markets. And today what happens is that the decline in the emerging markets is still there, but the growth in the emerging markets is not here. And this is what -- and we do 35% of our business in the emerging markets and this 35% is mainly traditional businesses because there's no IT, healthcare, very limited and there is almost no inkjet in these businesses. So you understand, you have basically two-thirds of the business of Agfa in terms of products which are sold in these emerging markets, which were supposed to grow which are not growing. That's why we have an impact. So of course for other companies, it depends on the mix of their products. Stefaan Genoe – Petercam: You spoke about [indiscernible] in China?

China, for graphics, if you look at the global situation you have three big players: Kodak, Fuji, Agfa. And there is one place where there are more than three players in the graphics, this is China because there are Chinese local players, which have been enabled to go outside of China so far because of patents that we have protected ourselves. But in China of course we have the competition with that and there's pressure on the prices in China obviously. Stefaan Genoe – Petercam: [Question Inaudible]

In the emerging market part, I don’t know -- globally China is in the range of 10% of Agfa, something like that. Roughly order of magnitude. But in the healthcare, situation is different from graphics in China. Healthcare the game is still between the three big players, it's still a lot of about the radiology film market. We see DR starting to progress but the rule of the game is film in China and it is hardcopy film and in this domain we are still basically the three main players fighting in China. So the pattern of competition is a bit different in graphics. There are local players which are moving from a analog plates to digital plates and of course the competition is a little bit more tougher. Stefaan Genoe – Petercam: And perhaps just a follow on on that –

Sorry, Stefaan, by the way that’s why we created the JV and we have a partner in China four years ago, because that has helped a lot Agfa to sustain the battle there. Stefaan Genoe – Petercam: And as a follow up on that, the hardcopy film production, the digital plate production are two of the businesses I would say probably with the biggest fixed cost in terms of production facilities in terms of factories, in terms of distribution etc. Isn't there a risk with the strong volume decline we will see accelerate – you will have to take additional measures?

There is not a strong volume decline. It used to be a growth volume and the price erosion which was compensating. The price erosion somewhat stabilizes I would say but there is still a price erosion. And the volume are not growing. But in digital plates, there is no drop of volume, not massive drop of volume. In analog, yes, in analog, we have closed [indiscernible] and we have closed the factory in Italy. On the digital volume plates we don't have at this stage and if you look forward what we anticipate to be the evolution of the market, the underlying growth which has disappeared in the emerging market is not yet a decline. So for us the manufacturing situation we have today is okay. If it happens not to be in line with the market evolution, of course, we will do what we have to do, like we did for the Italian factory. But there is nothing we anticipate at this stage in terms of us to grow. The same for hardcopy, the hardcopy the manufacturing here, as long as the coding is concerned and we find that -- we finished the films and we put boxes in two or three places but the hardcopy market is not in decline I would say, it’s okay. Stefaan Genoe – Petercam: Yeah, perhaps you mentioned that you could be looking for some external growth given the strong improvements you’ve seen over the couple – the last couple of quarters, or years and adapt, what kind of size could you potentially be looking for?

Doesn’t change compared to what we said before. I mean it's a question of being opportunistic. So the size may depend on the opportunity but what we have in mind, what I have in mind for acquisitions is things which are per business case in the range of a few tens of million, so let’s say from 10 million to 50 million if you want for the company [ph] but it’s very theoretical. The reality is whatever it has to be to make sense for the company. So if we are done with the questions in the room, I can maybe go to the external auditors – and if there are no questions come back to the room once in final time, and then we close the discussion. Any question on the call?

(Operator Instructions) At this time there are no questions raised over the phone.

Operator, I believe it’s normal that there are basically no question on the call because the analysts are in the room. So unless somebody decides now to ask a question, we go back to the room if there is a final question, and then we close the call. Okay. Any other question here now? So thank you for listening and your contribution to the discussion. Bye, bye.