Hello, and welcome to the Agfa Half-Year 2023 Results Conference Call. My name is Laura, and I will be your coordinator for today's event. Please note this call is being recorded. And for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the call. [Operator Instructions] I will now hand you over to Pascal Juéry, the CEO, to begin today's conference. Thank you. Pascal Juéry: Thank you very much, Operator. Good morning everyone, and welcome to Agfa's conference for Q2 results. I'm sitting here in Mortsel with Agfa Executives team, and of course, our CFO, Dirk De Man, and our Investor Relationship person, Viviane Dictus. So first, I would like to remind everyone that the story of Agfa is the story of a company in full transformation and that the transformation is in progress. About 50% of the Group activity is with film material to declining activity, whereby the other 50% of the activity is operating in the market, so that we believe represent the future of the company, and are offering significant growth. So, it's still very much a company in full transformation and the set of results is showing that very clearly. Why? Because first -- and I would say this is a positive of these results. When I look at the growth engine of the company, they're all very positive top line, and in an economic environment that is not very supportive, in fact. When I look at HealthCare IT, we are growing 6% for the semester, 8% for the second quarter. And that's actually also having a negative currency impact, by the way. For digital printing services, and remember that DPC is a growth engine, but in fact, half of DPC is in industrial film, so in legacy activity that are declining. So, digital printing, if you look at digital printing, we're growing the business 25% in the semester with the Inca acquisition. If I remove the impact of the Inca acquisition, we would be growing 5% in a market. That is quite actually overall depress now, if you look at the offset printing, the (flexo) (ph) market. And I would say it is 5% organic without Inca. The good news, well, it contrasted as well, and equipment sales would be below last year due to the economic environment in the first-half. But the consumables will be strongly higher than last year or 8% to 10% for things like inks. For our growth engine, ZIRFON, I'm not going to give a percentage. It doesn't make sense. Actually, we are multiplying by four the activity of ZIRFON compared to last year as you know. And although during the first-half, it was not actually producing results. On the contrary, we were spending money to develop its industry. It will produce results during the second-half of the year. So, DPC is indeed a bit dragged by the traditional activities, and that's what you see in these results, which are not as good as the first quarter. Actually, two reasons for that. The first reason is traditional film activity are mainly in fact exposed to China, which today is not good news. Let's say in the terms of market perspective in two areas, the level of demand of course, but also dependability to price in the Chinese market. I'm very clear about it. It's complex. And the second point that has been impacting DPC is we have suffered of the manufacturing inefficiencies that led us to actually write off inventory. If I remove these impacts, actually, DPC is really on track in terms of growth. And what you're seeing in the second quarter will be highlighted in the Q3 and Q4. We do have to apply pressure on the other activities, and you'll see it in the [hydrogen marketing] (ph). We have pressure in the market and in the margins. And also, here we find back China as the main exposure where we have these issues. So, that's very clear that it's a very competitive evolution. And as you know, the transformation of the growth is to replace the legacy activities with the growth activities. Sometimes we -- the name of the game is to grow faster and to generate faster growth from the growth engine that we are losing out, so to speak, on the legacy activities. This quarter was a quarter where it was a bit more difficult to do it for us than the previous quarter. But I think during the second-half, we'll get back to this to this reason. I want to stress as well that currency has been addressed here as well, the dollar and especially the R&D for us, given the size of Chinese exposure. So, it works against us. And if I look at remove the impact of currency the story on the bottom line is also a bit different. Now, the outlook; as I said, DPC will continue its production. No doubt. I think a number of things happened at the end of Q2 that gives the team, I believe, confidence going forward because we are starting the [ink swap] (ph). We were not in a position to do that during the first quarter. We are just starting to implement the strategy. What's really addressing the debate is, are we successful for the time being. As I said just we've made progress on productivity. H1 was bit of a drag during this one; it will be a positive factor during H2 because we have already made some progress. Are we at the end of the progress? Absolutely not. But now I confirm to say yes, because [indiscernible] phone will contribute positively. Radiology will be stable. In fact, more stable to where we are today. We still have the pressure from China that's not going to go away. But the good news in this area is it's not so much margin-related. It's not so much volume-related in China. We're not seeing a decrease of the volume of the market. We are seeing the pressure on the margins from pricing in China due to the procurement activities. In China, the market does not really disappear. So, we expect stable radiology we still declining and we are making progress on the bottom line. HealthCare IT, well, the good news is, you know, the story of HealthCare IT was first to restore profitability, which we did a couple of years ago. In fact, now we're in a phase where we start generating some goals and suddenly the second year actually in a row that will generate growth. However, this growth has not yet full transpired to the P&L. The growth is more on the project side, while we still have a bit of a challenge in the service revenue part, where we are hit by two things. Actually, inflation, that is difficult to reflect on selling price due to the nature on the structure of contracts. We are working on that. And the second part is the growth that we have been generating now for -- I would say year-and-a-half as yet to fully compliant into service recurring revenues. Now there is always a bit of a lag in some specific case. That could be a larger lag, especially when we made contact with the Department of Defense in the U.S. So, I think for important for me to repeat, if we are growing in the market it's because we are growing our presence. We have net new customers. These net new customers are not yet contributing to service for revenue development. So, I want to stress it again today, meaning that on the outlook we still say, yes, we overall H2 is going to be a lot stronger than H1, but also seasonality impact whereby we make most of -- actually our profit from HealthCare IT to fall. That's been the case in the past years. It still will be the case today. So that's the overall comment I wanted to make very quickly. Therefore, I'm not going to dwell so much on this slide. On the next slide, as you see that -- sorry, got the wrong way [indiscernible] you see that it translates after six months with the modest growth, but in fact the significant growths in the growth engines and the decline in the film traditional activity, and where the second quarter was not as favorable as the first we are below last year for the first six months. We're above last year. And I expect it to be better actually than last year that's going to restore a bit or of profitability. First, there's still a lot of [indiscernible] non-recurring less than last year. We start to -- these things coming and say not to an end, but it's going to decrease. We give you the guidance. I think we stick to this guidance today, €35 million for the year, indeed. And therefore, the cost of transformation is still going on. We see some of the benefit of it. If you look at SG&A, totally under control in the high inflation context, in fact, we do the productivity and that is also fueling the transformation of the Group. I'm going to now turn to you, Dirk, to present the cash elements.

Yes. So, let's start talking about trade working capital. And just to be clear, this is the sum of the three divisions. So, it does not include contractor operations, because it's very hard to make comparisons versus last year. And so, the key thing here is that we're seeing significant progress versus last year in terms of the reduction of inventories. And so, versus last year, we reduced 21. And as you know, usually in Q1, Q2, there is a buildup that's the seasonality of Agfa. This time also if you compare versus Q1, we're actually decreasing. And that translates into serious reduction of inventory days also, 23 days. So we can start seeing the results of some of our efforts. It's the start because we are eliminating excess inventories from the past. So, we're not yet at the level where we want to perform. But it's a good start in terms of our program to reduce the invention. So, if you look at the bottom line percent of sales, working capital, so we ended up in Q2 at the same level, 32% is Q4, and Q4 usually is our lowest percentage of the year. I think the question came last time in terms of what does it means with contractor operations. So, that percentage would be 33% in terms of where we are targeting to end up at the end of the year is at 30%. So, we do still will reduce the working capital through the second-half year. And we're targeting to end up at roughly 30% for the end of the year. So, if we then move to the next slide, the free cash flow; so the free cash flow is quite negative at minus 45. There's a couple of elements to highlight, first trade working capital, despite the progress in the three core divisions, this is really the effect of the externalization of our relationship with the former offset division. So, basically, the receivables that used to be intercompany, so neutral for the company now became external receivables. And that's really the explanation of the increase. CapEx is slightly higher than last year, and was driven by the investment program of [indiscernible], as well as some investments regarding energy efficiency provisions, and other are traditionally higher in the second quarter because the core element there is the payout of the employee benefits that traditionally happens in the second quarter. Income taxes were slightly positive. So, there was money received in terms of taxes. And in terms of pensions, I'm not sure if you remember, but in the first quarter we had a slightly higher amount because we paid a bit -- some of it a bit earlier in March rather than April. So, here we see the other side of it a bit lower in the second quarter, that's year-to-date. It's in line with expectations and guidance. Restructuring and non-recurring a bit lower than in Q1, significantly lower than last year, but still a significant amount in the quarter. So, if we then move to the next slide in terms of net financial debt. So, we still are in the net cash position at €14 million, but obviously decreasing quite significantly versus the previous quarter, driven by all the investment programs. Pascal Juéry: But maybe you could comment here that we're expecting a second-half that is cash positive.

Yes. So, the prediction is in the second-half to be cash positive. Obviously, another point that still needs to be settled is the proceeds of the transaction with offset. I think previously we said Q2-Q3. In terms of timing, it looks right now that it will be more Q4-Q1. We are progressing and discussing, but it's taking a bit more time than we originally anticipated. Pascal Juéry: And we have also the subsidy that we are due to apply for in [indiscernible], we successfully passed on that. That's also an element of cash that might influence a bit '23, but not on '24, I guess.

Yes. Okay. Pascal Juéry: Okay. HealthCare IT; so, HealthCare IT, indeed the good news for us is we continue to grow and we continue to add customer. We are in a situation where we are adding customers and we're adding customers now for -- I would say overall year. However, it doesn't yet comply to the P&L for the reasons I was explaining. First, some cost inflation, the service recurring revenue that cannot be immediately passed through to customers and this bit of a lag of the growth translating into recurring revenue as well. But I want to stress here is we still have a very -- I think very healthy business. If I look ahead, the healthy order book, which is actually increasing roughly to 11% growth in the rolling order intake versus last year. So, we are still very firmly in growth territory here. And these are the leading indicators that say, okay, in few months, it will translate into sales and then later it is service revenue. In sales, so the top line for the Q2, 8% versus last year. However, we are dragged by this higher than expected cost inflation, and the fact that indeed when we look at the development of our sales mix, it's a bit unfavorable. However, I want to stress that Q2 was better than Q1, Q3 is going to be better and Q4 is going to represent just like the first couple of years. I would say that vast the largest quarter by far. And it'll represent an outsized percentage of the early EBITDA of the business. If you turn to Radiology Solution, so very different story here; Radiology Solution, it's mainly the largest business is our film sales. It represents a smaller part of the business. And here the dynamics is clearly a negative dynamic with negative top line growth. Mainly coming from price, actually then putting pressure on a margin. And so you've seen, therefore, very subdued activity for Radiology. Here, the main part of the story is really the continuing pressure that we have in China. That's not going to stop. The [DVD] (ph) process is not yet fully implemented in China, so we expect to be facing difficulties going forward as well. On DEI, we continue to make progress, but the progress of DEI is not sufficient to offset the decline in film. So, we have taken action now in terms of adapting the cost to serve, and we will continue to do so as we see. And therefore, you see the result is a gross margin that EBIT under pressure. And EBITDA that is below last year. DPC, so DPC is more complex, because it's a €400 million business. And I could say that roughly speaking, half of it is in additional activities and half of it in growth activities, so I gave you some color already on the growth engine, especially digital printing. Now, if you look at the overall growth of the division on six months, it's 13%. I told you that for digital printing it was 25%. So, you can understand easily what is the pressure on the legacy part of the business. We see here, as I said difficulties in the market. This being said, we have taken the price action. We have for the first-half I think we store the profitability because we are better than last year in terms of EBITDA generation, and this I would say low Q2 quarter. We already expecting to reduce since in screen before. Actually, we believe that we will be back to you a better performance. So, good news on digital printing, as I told you, our print business is doing well even in the context of the whole context -- well, in a lot of other printing areas, actually small declined in growth in this business. I think it validates the choice we have made to view a true player in digital printing, which is really the growth area in the printing world even in the kind of the recession like environment. We are starting to sell several now on second terms. We've acquired Inca that goes very well. We have now inkjet that is ready for what we call ink swaps, meaning we are starting to replace non-Agfa at the onset in full day, and we are doing that successfully for our customers. And the next very exciting thing that's coming out is we are preparing for next year, I would say the first phase of the launch of this inkjet 1050, which is a single pass packaging printer, which is changing a bit the game for us in terms of productivity and architecture. I was myself with the team beginning of July to all the staff, I would say, not opening the first run of this machine after months of trial, it's very impressive to see the speed and the productivity that this machine can offer or actually each times what exists today in the market in terms of productivity. So, it's really, really a game changer. We'll have a first customer event at the end of the year to present the product. In '24 we'll be across there where I would work this is probably beta customers to launch the product. On the ZIRFON, we are happy with where we are. We are more than 100 active customer of now, and it's growing almost every month. However, on the [indiscernible] the top three represents the vast majority of the sales today. Clearly, you're asking our customer investing a lot in capacity over this price over number of projects that will allow our construction. And the good news we have also, actually we have been selected for European Innovation from grants. It doesn't mean that everything will sign off, but normally it's just for us to follow the process to get the subsidy which is a good illustration of the value of technology offers, which represents about 25% of the estimated investment on the size of this subsidy, so it's quite attractive. Last but not least, it's not on the bullet points, but as I told you, the productivity imposing. Don't forget that we started producing industrially really on a regular basis just in the fourth quarter of '22. In a few months, we already made significant progress in productivity, and the pyramid show that instead of being drag, ZIRFON is going to stop in producing actually to the results of the division. That's for the growth engine, but the rest of the activity is under pressure. For weakness in the electronics industry where most of our sales are actually in the China, we see no improvement whatsoever in the situation in Korea, and we are not pressure for those volume and price. And we have been successful to put price increases in every market, but in electronics in China, actually. And as I said we have a week that faster or days on a specific on the sales [indiscernible] because we had to discover bad quality product during the cluster that impacted very much, our activities softened. With that, maybe I'll hand it back to you.

Yes. Thank you, Pascal. So, basically a bit of a repetition of what we explained also last time. So, contractor operations is representing the supply towards equal treat the former offset in the top line, and the cost of goods is really about the film and the chemicals in the G&A and the other income. It's more about the transition services on long-term support agreements that are included in there. So, last year is the construction, it was the same in Q1 since we were still having offset as part of Agfa. The key points to note that last year we were representing it in line with the IFRS rules differently than the reality of this year because we do have standard costs related to the disposal, and last year they are included in commerce division. In 2023, those standard costs are allocated to the division, so they are part and absorbed in the division of performance. And on the left-hand side, you can see that the standard cost comparison Q2 versus last year, as of the -- 3.4 is included in the numbers that comes up with $2 million of '23 is included in the division of results. And it partially explains some of the cost comparison first in last year. Back to you, Pascal. Pascal Juéry: Yes, just a word of conclusion. Again, the story of confirmation is ongoing, and the name of the game for us is to make sure that our growth engine can outperform, I would say so to speak, the decline that we see in the other activities. That's really what it's about. We do that in a context where currency is -- actually has turned against us due to high exposure from China and also the global company largely exposed to the U.S. dollar as well. We are doing that at a time where we are trying to move as well and in leaders pointed out by Dirk, we are busy eliminating, I would say which we called the candid cost of the semi 40% of the Group, so we are doing that. In spite of that, I mean I'm really encouraged by the fact that -- yes, I mean growth engine, we are working. Top line, we made the right choices in terms of where we wanted play digital printing, ZIRFON, and even Healthcare IT. I mean, we are ongoing the market very, very clearly here. So, it really works. We are yet to [indiscernible] to insure that we need to comply in the bottom line. As I told you ZIRFON was a drag, it's going to be a beneficial. We have this bit of lag impact in Healthcare IT where that we need to work on and we are actively working on. And indeed we are not yet fully turned the corner in this aspect. And the cash side, it's a major area of business for us. So, as you see we are very active to take that, to improve our working capital management, and we expect on these basis to be able to generate positive cash flow for the price too. And as well, we have yet to receive the offset proceeds that are considered. So, that's where we are today. I'm going to stop here, of course, and take your questions.

A - Pascal Juéry: And I think the first question is you, Guy.

Yes. Pascal Juéry: We have the -- for those in the phone [indiscernible] and they will ask questions. So, Guy Sips.

Yes, Guy Sips, KBC Securities. Pascal Juéry: Yes, yes.

I have four questions. First is on ZIRFON, you stated before that it will be a multi-year investment. So, on the subsidy, we know that the back-end load is -- yes, what is the timing of that? And our use of (€40 million) in ZIRFON lines, so, is that a good benchmark for this 25% of €40 million? Pascal Juéry: It's a good benchmark.

It's a good benchmark. Pascal Juéry: It's a good benchmark. Now, to the profit -- Okay, go with your question, we'll answer.

So, the second question is related to the digital print. Sometimes my wife ask me to bring several bananas and some potatoes, and then it will be difficult to give the amounts you speak that several -- that you sold several printers with extra inks and some ink swaps. So, can you be a little bit more precise on that? And third question is related to -- yes, the business you sold last year, right. And yes, the money is now a little bit delayed, how should we see that the money coming in? And is there a penalty for that? And is that money at risk, or how should we see that? Is there any guarantees related to that? And the last question is related to the pension, you said last year [indiscernible] you gave an update on the midyear update, which is unusual on the pension, and on a few weeks after we had the offset solution view. So, of course, there was no lead between the two, but today, the first-half, the interest rate rise is even much higher than we saw last year in the first-half. So, can you give us an update on the situation over there? Thank you. Pascal Juéry: Thank you very much, Guy. So, first, timing of the subsidy, Dirk will --

Sure. I can take that one. So, timing of the subsidy, first of all, we're following a codified process, let's say by European Commissioner. So, we're following the grant process, of course. The exact amount and exact timing are still subject to that process, let's say. So, for all the payers that are now receiving or going to the next step, let's say, we're one out of the 49 companies that the grant that can go to the next stage. Personally we don't have an exact date yet, but with what we know, we expect it to be maybe 1/3rds front loaded, 2/3rds end loaded. It is a mid multiyear -- maybe you should see the investments over two-and-a-half years. Pascal Juéry: Okay. On DPS, so, Guy, basically wants to understand how many onsets that we sold, how many ink swaps that we have done, and [indiscernible] in fact.

Yes, modest, but actually growing nicely. So, in the first-half of the year, we had four onsets in our sales numbers. We expect for the second-half of the year that to be closer to double that amount. And that is new printers that all went with our inks. We also are doing ink swaps at customers buying new printers, or customers that already have existing printers, or customers actually not buying new printers but just being interested in swapping their inks. That is ongoing. I would say we probably have now about three to four that have switched, and we are working on multiple ongoing swaps.

But it's quite a long process, ink swaps. It takes how long?

It takes -- basically you have to start with an audit to make sure that the machine based on how they have been handled by the current user, is it still in okay shape to do an ink swap, but it's a multi-weeks process, not multi-month, but it's multi-week process. So, we have a dedicated team doing that actually across the globe. So, we have a strong interest for mainly Europe and North America to do these swaps. And the feedback we received from our customers is actually very, very positive. Pascal Juéry: Okay. So, see, you got [indiscernible].

Yes. The key point is it's progressing slower than we expected. This has to do with practical things, but I'd rather not comment too much. I mean this is two parties discussing. We need to complete the financial audits with the closing balance sheet. And then we'll have essentially some discussions with the other party, but I'll try not to making the comments.

But can you confirm that the money is not at risk?

I can confirm that the money is not at risk, yes. Pascal Juéry: So the money is not at risk, but it's just normal discussion on strategic points. You know, nothing much to be said in that at this point?

No. Just to may be then pick up on this question, so the €28 million that was initially planned from cash in? Pascal Juéry: Yep.

It's still €28 million, but is not up for discussion because I mean we have seen -- in Belgium in the recent months some re-discussion on valuations. Valuation is not a discussion point at all in these --

Valuation is not in a discussion point at all.

Okay. Pascal Juéry: Okay. Pensions, we have not done anything --

So, in pensions, I mean we did an exception because we had to reflect a number of things. We are not doing that standard last year. We did it this year. We did not, and I think you can use the usual sensitivities to think about the impacts. But we will do the update at the end of the year. And obviously as discount rates are higher you should expect an impact on the pensions valuation.

And you reminded us a little bit on the sensitivity. Pascal Juéry: Sensitivity.

I think maybe Viviane you can --

So, the 25 basis points is about €70 million in both ways up and down on the liability.

Maybe a question from my side, and I'm not sure if you hear me in your call. Pascal Juéry: Please, Laura.

[Indiscernible] Pascal Juéry: We hear you well.

Great. I will start with two questions, the first one on Healthcare IT. So, with the EBITDA expected to be slightly down versus 2022, how does that impact the initial guidance of the [indiscernible] in EBITDA, which was initially planned for this year, but so what is the delay there now? And then a question on DPC, could you elaborate a bit on manufacturing inefficiencies, and how confident are you that this will not impact H2? Thank you. Pascal Juéry: Okay. On Healthcare IT, first off, I don't think -- it doesn't change anything to the story for me, it's just take a bit more time to get there. Now, we need also to look at the market trends in Healthcare IT. On the market trends, we see more and more consolidation of hospital services of the health services in which what we do has an impact. And also, we are seeing more and more, and especially in North America the trends go to the cloud-based solutions. We believe we are expanding well played to serve this market need, because basically what we provide without the vital agency service just getting easy. And we have demonstrated over the years. In terms of cloud, we are readying ourselves to be able to service, to provide our customers this service. So, to make a long story short, I sincerely believe we are well-played -- one of the key player of well-played capture of this market growth, and we stopped doing that. And therefore, I maintain the same midterm objective for us. Yes.

So, Alexander Craeymeersch, Kepler Cheuvreux. So, on Inca, you mentioned that the SpeedSet is going according to plan. Maybe could you remind us what the plan there was again, and when it will be launched specifically? Pascal Juéry: Yes.

And then the second question is also not because you have mentioned that SpeedSet is going according to plan that print engine is that not going to plan? So I think it was also going to be launched to 2024? Pascal Juéry: Which print engines? Sorry.

Print engine, the one that is going to 65 -- Pascal Juéry: The VHS, yes, yes, okay, which is a different --

Yes. Pascal Juéry: Yes. Yes.

So I'm just wondering, like, okay, is that everything confuse us, that one is going to be a bit delay? And then maybe a big sales in the virtual network, in the Q1 call, you mentioned that you were pleased with the strong recovery and that you were firing up on all cylinders and that was set mid-May. So, maybe could we just come back on the statement today on why Q2 was a bit disappointing? And is the visibility that really got loaded reading into this that how should we see the outlook on profits covering H2? And maybe a final question -- Pascal Juéry: You are talking DPC or digital printing?

DPC. Pascal Juéry: Okay.

And maybe a final question for Nathalie. So, in healthcare, we've seen your colleagues check for the momentum and growing some market share, and then also that market growing insight. So, considering that these customers will be lost for multiple years. So, just wondering what is the main worry is for clients that they will go into colleagues of yours instead of Agfa. And then I was [indiscernible] Pascal Juéry: Okay, maybe --

Like -- Pascal Juéry: Okay. Maybe I will ask Dirk to speak about the engine because the --

Yes, no problem. So, the first question, Alexander, on SpeedSet, the plan was and still is. Actually, in the plan we didn't specify that end of this year there will be a customer unveiling if you want, which will happen. The plan was and still is for next year in '24 to have first beta unit sitting at the customer, which means as of '25, we go beta phase, it's not a one month pay, right, in case of course in time, but you will have first commercial sales on the product in 2025. That was actually also the plan. On the print engine that we developed together with four VHS, it's absolutely not in line with the plan. The only reason we don't communicate on it is because no speed test is an Agfa product and Agfa product launch. The print engine is a partner project from and it's actually VHS bringing it to market. And so, that's something we cannot and do not want to communicate on our own, so to speak. So, for the moment, there's nothing to say but everything is also going according to plan. Pascal Juéry: Can we say that we already install one print engine at VHS facility or the -- I already said it with [indiscernible].

But anyway, where did you find it? No, the -- Pascal Juéry: It's improving.

Yes, which is indeed also according to plan is that we have -- there's a first printer that was already sitting there for several years at the customers, and there's a first beta units which will go to a customer, but which is now in the add or partner VHS or for the testing as per plan.

Wait, we're talking two different print engines. No, we're talking the volume into different print. I'm sorry we're talking here. You say the first printer was sitting at the customers? And that there is no VHS --

The VHS printer, there was a first printer for which we made the print engine that is already a customer [indiscernible] in several years. I think now three years in the meantime. So that was even prior to our acquisition. That's the Agfa unit as we call it. There was a lot of changes, upgrades, and so I made to come through the first beta unit, which should be the one that goes commercial. And the first beta unit is now fully assembled and running for test at VHS, and before it will go to a customer that should have a new course in next year. These are printers that are very large, and they are the size of the corrugator, they are price of a corrugator order of magnitude. So, that is a whole production out just for this machine. So, these are machines also that take several months to install. Pascal Juéry: Okay. Digitizing, and I'm telling you to the current where I was saying digital printing goes fine for us, and we are progressing in digital printing. And the Inca plan is actually exactly online with what we give at the time we made the acquisition. So, we are really executing according to plan on this side. Healthcare IT, so I think your question is more about competitive situation, you know, where are we. You mentioned Sectra, which is indeed the tier that is comparable tier in the market. That doesn't have the legacy that we have. They came at a different stage. So, it's mainly from between [indiscernible] we still have a lot of, I would say, legacy system or taxing back that we have to deal with, which the card doesn't have. They only have equivalent of what we go around to price engine system. With being said, can you comment on Sectra? You need to speak in the mic, Nathalie.

Yes, and I will speak in the mic. So, yes, Sectra is a competitor by all means. However, on the North America market, and I specify North America, we operate on additional market segment. So, by decision, yes, we're competitors. By presence, we send operating different market segments. Sectra is in the smaller to medium, and we're more than medium to large. So, I think they're trying to focus on the risk in terms of competition. So, we have a similar solution; different history. We are carrying a legacy they don't. And so, with that -- that chance of balances out when we are in the market. Pascal Juéry: I would like to stress, there are probably 12 companies that are playing in this market, okay. Sectra is the winner, but there is not only one winner. We are also becoming a winner in this market. And it's not like winner takes all strategy. I let you explain. We are slightly different positioning in the market being a solution with [indiscernible] for some type of customers. So it's up to us on guiding the right product for us.

Yes. Pascal Juéry: So, we have a lot of respect to our competition. Actually, we consider our need that hard to be faster at the top, probably in the top tier in the market, but we aspire to be part of top three, and I think we are. If we are not already in it, we are not fast on it.

Yes, and I think it's said that on the larger segment, the larger customers we are considering North America, while Sectra is not. On the smallest segment, Sectra would be the leader, but we are not wanting to compete, and [indiscernible] because our solution is directed towards large and [indiscernible] customers. Pascal Juéry: And as I said, the market that's consolidating in this area, that consolidate on the private side, on the public side. More and more we see why, because this is the way to get quality out of the system running, and then to have your resource management as well, well-thought out. So, it's a plus, which is a reason why we see actually active investment in the field even in the market if it's going 10% higher, we see a lot of interest in renewing the technology and we are there.

Yes. Our customer sees the same challenge in terms of inflation. So, productivity, cost defectiveness, cost reductions are the primary driver, and especially the one that on the regards [indiscernible]. So, this is our sweet spots for Agfa as a [indiscernible] is very large. Pascal Juéry: Well, I would also say HealthCare IT, remember that we have now in North American base executive team for which the senior IT, the [indiscernible] probably less than three year. So, we have a new team in place. Already we have seen momentum in the top line, and we need also a bit of time to establish well in this activity. It was a little bold move to do what we did by moving the [indiscernible] business in North America, which is absolutely a thing to do. And I think that area has been hitting the ground running now actually, but we still have a new tool that we need to integrate and to execute the strategy. I'm glad to say that for the time being we have been able to do that without any distraction to our business, because it's -- in a way it could have been the case. All right. Any other question? Laura?

Maybe then I'll start [indiscernible] So maybe one more question, I think one day you said that -- last time you said that customers perceive conversation under 100. I think the run rate -- the [inkjet] (ph) was I think €100 million if I recall between '25. Is that number now a bit high, really? Internally --

We have more than hundred active customers, that's completely correct. As Pascal is saying today it's a handful of customers that are making up that the vast amount of our sales. I think the number of important customers for us will certainly increase in the next couple of years, but it will not be -- we have more than a hundred for sure, but actually big customers, the big electrolyzers players out there in the market, I think it will still be have to come in two hands to be honest. And those will be our most important customers. And so, that will be the case between now and 2030 probably. So, in our case, I think our outlook for this one is still in line with what's we said or expected a year ago. Pascal Juéry: But what we are watching is the velocity of actually FIDs on the hydrogen project. That's what -- the buy time is huge. Our customers are very busy building capacity as we speak, so in terms on [indiscernible] plans in Europe --

In the end of next year. Pascal Juéry: -- end of this year probably. For example, lots of company investing in capacity, we are there for them with our capacity, but the key question mark is the ramp up, is it going to be a speed ramp up, is it going to be a more subdued ramp up? Our visibility is probably already for '24, but although I would say it's difficult to have visibility, a precise visibility. But we indeed see a good prospect. And the good news is the -- yes, I mean it's a good message, and as soon as you got volume, so they're flying to the bottom line.

And you said from that it will be profitable in the second-half of the year on what level on the EBITDA or really on the EBIT level? Pascal Juéry: EBITDA and EBIT, I think yes will be. But don't forget that we're still cash negative on ZIRFON because we are building new terms.

With subsidies playing an important part? Pascal Juéry: Yes, but subsidies do not cover our listing. So, we're still going to do invest in cash in ZIRFON, but yes, it's going to be productivity probably. Yes.

Okay. To now, what is already invested in ZIRFON? Pascal Juéry: The historic investment of ZIRFON, what are you talking about? R&D or industrial? But I think in the past three years, we probably invested I would say close to 10 million?

I think it's a number more than. I mean it's more than 15 years of R&D and the private lines that are in the meantime also be [indiscernible] upgraded and so on. So I think it lead over, but you have to look over more than 50 years, there's more than 10 million. Pascal Juéry: Yes, but of course, back in the last threes I mean, to develop which we have today to sustain the market for the next two years or so, probably about 10, I would say, eight to 10, which is a small industrial unit in fact which we have. Laura?

Yes, just going back on my second question. I'm not sure you answer on the DPC and the manufacturing -- Pascal Juéry: Yes. Yes. No, absolutely. You're right. Sorry, I apologize. I apologize. No, what happen, you want to explain maybe what happened on the side and what's happening or…

Sure. But there was two effects in Q2. One was related also to our inventory programs that we're running, and to make sure that we reduce inventories wherever possible. I was actually clean up where we go much more in detailed and at takeout stock that are obsolete or that are that's not fully correct. So, there was actually probably half of our impacts where stuck correction that we have to make, and where we still expect a little bit of saving to Q4, but actually the main thing start happens in Q2. But there was also impact from that production let's say, which of course the teams are attacking. These are very specific in every public client, towards every public clients, where we have quality issues. Don't want to go to technical here but can assure you that with our operations teams we are taking the necessary action there to -- put things right. Pascal Juéry: Yes. And indeed we have a huge strive to work on working capital, and the whole reduction of inventory. So, we are -- what can I say? [Indiscernible] on this to make sure that what we had in inventory [indiscernible], which we do.

Correct. Pascal Juéry: Any other -- Alexander, you still have --

May I just ask one more question on the working capital specifically? Pascal Juéry: Yes.

I think you mentioned that there's so working outsource and mainly related to the diversity position? Just wondering, will some of that, speaking to the remaining business or not? Pascal Juéry: But yes, what you see the impact we had zero, we go to receivable of about 13.

It's a one-time impact. Pascal Juéry: It's a one time impact.

By internalizing those receivables and then it will vary on it's own over time. Pascal Juéry: But not very much?

Well, yes. All right. Well, Maxime is on the phone. If he wants to ask questions, he's welcome.

Sure, thank you. We'll now take our questions from Maxime at ING. Your line is open. Please go ahead.

Hi. Good morning; Maxime Stranart from ING. So, two questions from my end if I may, first of all, looking at Healthcare IT obviously regarding change quite maturely since the full-year 2022. It could be difficult to try what has happened there. Is there any info you could provide on what -- I know about the uncertainty you have on this guidance, but how can we expect this guidance to materialized why the two previous didn't? And secondly, looking at radiology, I think you mentioned in your press release that direct radiography was also impacted by some volume pressure. Any additional info you could provide on that? Thank you. Pascal Juéry: Again, on HealthCare IT, indeed we are saying now that we are going to be close to last year because we have also accounted impact on most of our business in the U.S. that are impactful. That plays also in what we are saying today. And as I said -- I would say the growth is coming a bit under our mission, although it's a significant, it's coming a bit under our mission. And as I said, we have a lag concerning this project revenue into service recurring revenue, and we have specific inflation issue in service revenue. This is really the three areas that I can mention on HealthCare IT. And for Radiology, I'm not sure about the question. India, yes, we have -- we have been growing the top line of India on a regular basis this past year, and right now we are -- this growth has restored, and actually we are bit below last year in terms of sales of goods. I think it's coming mainly form Europe on a kind of subdued market, where hospitals are under pressure, financial pressure. And the renewal of the equipment is probably a bit more delayed. But is it major, the answer is not, it's not major. But yes -- I mean I could do -- I mean I could do re-supplying goods specifically to help the business. But for the time being, that's not the case. We don't call it anymore. It will come back. I'm quite confident. But we have a few quarter as well, we are a bit subdued on the top line in India.

If I may circle back on this one, do you have any view on one this growth may come back, or is it like [indiscernible]? Pascal Juéry: For the time being the way we look at our business, especially for goods is we have a good -- we look at external and our order intake. For the time being, the leading indicator basically been improving a bit lately, but I cannot yet be sure that we're going back in positive growth in Q3. I think it might take a bit more time.

Brilliant. Thank you for your answer. Pascal Juéry: Thank you. Okay, thank you very much. Then it's time to conclude this conference. Sorry for the 10-minute delay at the start due to technical difficulties outside of our control in the side. And thanks very much for attending this meeting. Have a good day.

Thank you, ladies and gentlemen. This concludes today's call. Thank you for your participation. Stay safe. You may now disconnect.