CPO-CFO Alliance

@ Agfa

Emmanuel Bernoux

Chief Purchasing Officer

March 20-21, 2014

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Executive Summary

At Agfa, the CPO-CFO partnership emcompasses a increasing range of strategic and tactical areas, ranging from financial planning, to profitability and value support including risk management.

This takes place in a fundamental change of internal and external factors.

With one common objective : long term business sustainibility. 

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Contents1. Agfa Introduction

2. CPO-CFO Goal Congruence

• The example of the Agfa Graphics Business Group.

3. Financial Management

1. Planning & Budget

2. Cost

3. Cash

4. Risk Management

1. Materials and supplier markets in the short-mid term

2. Suppliers and supplier markets in the long term

5. Make it work :

1. Commonly defined objectives

2. Necessary Governance and working together in teams

Agfa

An Introduction

Emmanuel Bernoux

Chief Purchasing Officer

March 20-21, 2014

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Introduction

What you have in mind

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Introduction

What it is

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FY'12 FY'13 Δ % (excl. X-rate)

Sales 3.091 2.865 -7.3%(-4.8%)Gross Profit* 870 833 -4,3% as a % of sales 28,1% 29,1%

SG&A* -573 -538 -6,1% SG&A as % of sales 18,5% 18,8%

R&D* -163 -146 -10,4%Other operating items* 6 -5Recurring EBITDA* 225 224 -0,4% as a % of sales 7,3% 7,8%

Recurring EBIT* 139 144 3,6% as a % of sales 4,5% 5,0%

Profit & Loss: Key Figures (in million Euro)

* Before restructuring charges and non-recurring items

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Agfa Group: Sales

Specialty Products8%

Graphics52%

HealthCare40%

Split per Business Group (YTD) By Region (YTD)

Europe40%

NAFTA25%

Latin America9%

Asia and ROW26%

Two strong business groups and a smaller niche business

Small half of sales in Europe; strong presence in North America and Asia (excl. Japan)

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Flexo plates

Pages

Images

Proofing

Offset press

Film setter FilmAnalog plates

Computer-to-Film

Plate setter Digital platesThermal, Polymer & Silver

Computer-to-Plate

Digital Inkjet Print

Ink

Flexo CTP

Screen pressScreen exposure frame Screen

Industrial Inkjet Printing

Flexo

PrintingFlexo press

PC

Agfa Graphics: Product Portfolio

Screen Printing

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Administration

Resource Management

Logistics

Catering

Accounting

Billing

Planning

Examining

Diagnosing

Treating

Reporting

The HealthCare Community

Referring Physicians

Assisted Living

Home Care

Pharmacists

Payors

Electronic Patient

Record

Intensive

Care

Emergency

RoomNursing

Surgery

LaboratoryCardiology

Intensive

Care

Radiology

HealthCare: IT Solution Portfolio

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Conventional

Radiography

Radiology - Product Portfolio

Conventional X-ray Film

X-ray Film

Processor

Hardcopy

Softcopy

DR

Scanners

CT

MRI

US

NM

PET

X-ray Table

DR-GenRad

CR

PACS

Dry Film

Reusable

Phosphor plate

CR Digitizer NX workstation

Dry Imager

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Specialty Products: Product Portfolio

Classic Film

Functional Foils

Advanced Coatings and Chemicals

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Supplier Financial Content @ Agfa

2,900 MEUR

1,900 KEUR 1,800 MEUR 62%

1,900 KEUR 1,150 MEUR 64%

650 MEUR 36%

Revenue

Total Spend

Non Metals

Metals

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Supplier Content by Spend Categories

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Agfa Purchasing as Global Shared Service Organization

Internal Customers

Supplier Spend K€

Revenue K€

Agfa Graphics 832 1,491Agfa HealthCare

416 1,160

Agfa Materials 536 214TOTAL 1,784 2,865

Strategic Metals has global responsibility

for the purchase of the strategic metals,

Silver and Aluminum

Global Category Management is

responsible for the Quality Cost Delivery

performance of the supplier base for all

Agfa entities globally.

Regional Purchasing 

- the deployment of global category

strategies

- and for the Quality Cost Delivery

performance of the supplier base

regionally.

They support the globalization of Agfa

and of its supplier base.

- The organization covers all categories,

Business Groups and GSS Purchasing

needs in the region.- There are 4 regions : Europe, North

America, LATAM and ASPAC.

Advanced Purchasing is responsible

for the Quality Cost Delivery

performance of suppliers in

Solutions Development (New

Product Development) cycles

Purchasing Process Office is

focused on defining, building and

implementing the necessary

standards, business processes,

business tools of the end-to-end

Purchasing process.

Legal and Controlling both support

Agfa Purchasing in legal and

financial monitoring fields.

CPO-CFO Goal Congruence

The example with the Agfa Graphics Business Group.

Emmanuel Bernoux

Chief Purchasing Officer

March 20-21, 2014

17

CPO-CFO Goal Congruence The example with the Agfa Graphics Business Group.

Agfa Graphics

• EBIT• COGS• Price Management & Structural Erosion• SG&A• Working Capital• Predictiblity• Business Continuity• Manufacturing footprint financial

efficiency• Distribution Channels Performance• Value Chain Optimization• Revenue Life Cycle and new Businesses

Agfa Purchasing

• Spend Efficiency• Payables• Financial Risk

Management• Strategic Category

Management• Key Supplier Relationship

Management• Advanced Purchasing

Financial Management

Risk Management

Make it work

Financial ManagementPlanning & Budget

CostCash

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Planning, Budget and Cost

Increase performance via

partnership, transparency and focus.

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Cash

Long term improvement stratgy supported by short term hands on approach

Risk ManagementMaterials and supplier markets in the

short-mid termSuppliers and supplier markets in the

long term

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Short Term

Financial Risk Raw Materials Price erosion distorsion Suppliers Financial Health

Supply Continuity Manufacturing Efficiency

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Mid & Long Term

Supplier Organic Risk KSRM

Supplier Market Risk Supplier markets’

expertise Technology Consolidation in mature

markets Versatility of Commodities

Metals Petrochemicals

Micro and Macro Financial risk Metals’ markets

financiarization Suppliers’ Financial Health

Make it work Commonly defined objectives

Necessary Governance and working together in teams

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Objectives & Governance

• Objectives and Targets are algined

with Business cycles

• Along annual budget and 5 year

plan

• Governance is aligned along

purchasing categories and steered

in common

• Teamwork is instrumental to

succes

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Questions

Thank You