Welcome and thank you all for standing by. All participants are in only listen mode. After the presentation we will conduct a question and answer session. To ask a question, you may press star followed by the number one. This call is being recorded, If you have any objection you may disconnect at this point. I will turn the meeting over to CEO of Agfa-Gevaert, Pascal Juéry. You may now begin.
Good morning, welcome everyone to the future results earnings calls of Agfa. It's a call, I have to say also that we have a few people in the room, a couple of analysts and a journalist actually. It's a mixed meeting, and it's nice to have, I would say, the possibility to have physical meeting as well, in the full respect of distanciation and hygiene rules. Q2 results obviously are quite contrasted for the group. To make a long story short, I think our healthcare-related activities have performed extremely well in Q2, while, of course, the printing and graphics-related activities have suffered from the COVID-19 pandemic. A very positive message on the Imaging IT business, which actually we are showing for the first time as is, post the divestiture of part of the HealthCare IT activity.
We are delivering on the strategic roadmap, and we are improving significantly the profitability. This is a three-year journey. This is the first year of this journey, but we are very confident going forward about this activity. If anything, we are probably a bit in advance compared to our strategic roadmap. In the meantime, Radiology Solutions showed extremely good resilience. As you will see, there are moving parts within the business, but overall, we are also very pleased with the development of radiology. Regarding the non-healthcare part of the business, namely the Offset and the Digital Print & Chemicals, these are businesses which have been significantly impacted by COVID-19.
That's very clear, and the name of the game for us has been to do some cost containment measures as much as we could to mitigate the impact on the bottom line, and I would say, I believe we did that with some success. In these two businesses, as you know, Offset was already, I would say, a structurally challenged part of the business portfolio. COVID-19 only compounded this situation, and as you know, we have been already taking steps to address structurally the profitability of this business. Digital Print & Chemicals impacted short-term, but I want to reaffirm immediately that we are extremely confident going forward about the growth potential of the division post the pandemic. Needless to say also, Agfa is a very different company post the HealthCare IT business, and today we are a company with a significant excess cash position on our balance sheet.
The first action that we have already taken, by the way, during Q2, is to start working on increasing the funding ratio of our pension plans, and as well as implementing de-risking actions. We are communicating very clearly that we are going to use EUR 350 million over the next two years in order to do that and to make sure that pension liabilities are significantly reduced and the volatility of this item as well. I would like also to repeat that I always got a lot of questions on the use of proceeds regarding the EUR 975 million coming from the sale of the part of HealthCare IT business. You have part of the answer, EUR 350 million used in pension.
We have also, of course, eliminated any financial debt at the company. We've said that we will use the rest of the proceeds to keep in the company. I want to stress that our position now has not changed. Actually, we use the same word saying, for the time being, given the visibility of the business, we prefer to keep it in the company. There is no change whatsoever in our position here. I guess. Okay, this is the group. I think you know practically the picture. The largest business is indeed Offset. What I want to stress here is about 42% of our business is healthcare-related. The balance, 58%, is graphics and industrial-related. That refers to my previous comment of the strong resilience of the healthcare business. If we look at the P&L, what is the story?
Well, as you've seen, the COVID-19 impact has been extremely significant on the top line of the company. We lost about 20% of our sales for the second quarter. We've seen, of course, the quarter was not equal. I would say that already in June was way better than April and May. The continuation of the trend of improvement of the activity is also showing in July. Overall, it was not a straight line, but still a significant impact for Q2 in terms of top line. Gross profit as well, coming from the operational leverage, so significantly impacted by the top line.
You've seen immediately that for SG&A and R&D, we took steps to cost-contain measures, and we could actually, I believe, be very reactive and efficient in taking these steps and mitigate somehow the impact on the EBITDA line that is more restricted and as well as the EBIT. We're still presenting a quarter with 8% EBITDA, which is not, I would say, a normal quarter, but at least in current circumstances, I believe cost containment could indeed mitigate some of the impact. If we look further to the net profit, there are two stories here. Of course, the net profit does include the gain on the HealthCare IT, and therefore is extremely high at EUR 668. If you turn to the profit from continuing operations, indeed, is negative due to the high restructuring charge we took.
Most of this restructuring charge is related to the project we have to shut down two facilities in the Offset part, one in Leeds and one in Pont-à-Marcq. I should stress that for the time being, these units are not shut down yet. That will go on for the next weeks. Do not expect a shutdown and any impact for us before at least Q4. I believe it's going to be a partial impact in Q4. We'll have the full impact in 2021. That's due to the normal process of shutting down a plant. If I turn to the key drivers, I think I pretty much explained the story. I'm not going to comment further on that.
I would like now to give you a view on the finance of the company. I would turn to Dirk De Man, our CFO. Dirk, can you please comment the next slides?
Here we're presenting the net financial debt. Before we were including and showing most of the IFRS 16 debt. Now I decided just to show the pure financial debt position. IFRS 16 is EUR 105 million. This could be, in the last quarter, subtracted from the total amount. That was purely accounting and financial debt. Obviously, after the disposal, we had a very serious cash inflow. As Pascal already mentioned, we paid our financial debt. Overall, this created also a much stronger balance sheet overall, including also the restoration of the equity of the company. The key point I would like to make is that there was two key items that were affecting the cash flow. One was the fact that we already did an extra contribution in Q2 for our pension plan.
I will talk about that in the next slide, but this was already EUR 40 million included in Q2, specifically as an extra contribution as part of the bigger plan. The second part that affected our cash flow this quarter was the working capital. It was a EUR 32 million negative cash flow in working capital, but Pascal will talk a bit more about that later. Overall, a very nice net cash position, and maybe next time I should turn around the slide and show the cash as a positive rather than a negative.
Yeah, because it's a negative number, but it's actually a lot of cash in our bank account, right?
Yeah. Let's maybe move to the next slide. Basically, as we announced, we basically going to do a big step forward in regards to one of our key liabilities, being the pensions. Overall, our objective is to reduce the net liability for all these post-employment liabilities to below EUR 700 million over the next four years. As such, that will also reduce massively the volatility on our balance sheet. We're going to invest about EUR 350 million, which we will focus on the key funded plans. If you may recall, these are the plans in the U.K., in the U.S., and Belgium. There, we will do both funding, but as well, de-risking, which will allow us to bring also the gross liabilities down. This year, we plan to already invest around EUR 250 million.
As mentioned, EUR 40 million was already done in Q2, and the rest will be spread over Q3 and Q4. As a result, the funded plans will get very close to fully funded status. Basically, they will become much less significant. The gross liability will be reduced, and also the investment of the assets will be more a duration matching to eliminate much of any volatility that is left in terms of net liabilities. The German plan is not a funded plan, so we continue to consider that as a predictable long-term liability. Over time, this cash flow will be reduced by EUR 1 million per year. At this point in time, it's around EUR 40 million, and 10 years later, it would be around EUR 30 million.
It's relatively predictable, and we will continue to treat it as such, like a long-term debt with little restrictions. The result of all this will be that the total cash contributions overall will decrease. This year, roughly, we estimate it to be around EUR 80 million. In a couple of years, by 2026, for instance, this would be around EUR 50 million, and as I mentioned, it will continue to decrease over time. I think it's a very big step that we're taking to de-risk the company overall in regards to these liabilities that we have. Pascal, back to you.
Thank you, Dirk. Let's move on now to have a look at the working capital, because indeed, it was a component of the cash flow that was negative for us in Q2. There is clearly a reason for that. We have increased our inventory, and especially in the AGFA] film, medical film business, which is produced right on this site in Mortsel. The reason being, first, it's a critical supply and we wanted to make sure that we were safe in supplying our customers. In a COVID-19 environment, any outbreak of COVID-19 at the plant facility would have triggered, actually, a significant shutdown period. We really were mindful of this impact. Third, we need to run that plant actually flat out. It's not a plant. Either you run it flat out or you shut it down.
For the reason explained before, we really ran the plant flat out during the first six months of the year. That's clearly why we ended Q2 a bit overstocked on the film, with the intent to work it down during Q3 and Q4. That's really the story. It enabled us, again, to run efficiently and at low cost, the lowest possible cost of the production of film during the first half. I have to say, apart from that, we've been watching, of course, very much our trade receivables, and I'm happy to report that for the time being, we do not have any significant issues with customers paying us. This is an item that we are monitoring, I would say, on a weekly basis, and we are doing okay on this. This is a temporary increase of working capital.
Actually, at the end of July, the working capital was already decreasing, and we expect this trend to continue until year-end. That's also what impacted the operating cash flow of Q2, as well as Dirk explained, the extra contribution in the pension area. We wanted to give you full transparency on that. Now let's turn to the business, and let's start with HealthCare IT. I should say the new HealthCare IT and the new perimeter on here, that the numbers that you are seeing are representing this perimeter, and the least I can say is that we are very happy with the results of Imaging IT.
As we told you, this is a business that was much less profitable than the one we sold, but we also told you that we have a strategic roadmap that is very clear for the next years to bring us to the high teens in terms of EBITDA. Actually, our strategy has been detailed. Clearly, it's a target strategy. We target specific customer segments, we target specific geographies, and we focus our activity on specific revenue streams. Meaning our own software activity and professional services. I'm happy to report it works. Q2 is a good illustration, but Q1 was already pretty positive as well. Q2, let's be clear. It was also a bit exceptional because we could recognize in one go a large contract in North America, the delivery of full-fledged Enterprise Imaging solutions to the AdventHealth Group in Florida.
That, of course, has created a specific revenue event, so to speak. I'm asking you not to take Q2 and draw a line forward. It's not what it is. 55% of the revenue is recurring, but we have 45% linked to project, and project implementation can be a bit lumpy from one quarter to the other. We have enough visibility, because we are also saying that our project pipeline even has been probably a bit slowed down by the COVID situation, is still very healthy. We have a backlog that is well over a year of activity. I have to stress that we could deliver this project in Florida at the height of the COVID-19 crisis, meaning we know how to adapt also our way to work to make it efficient at our customer and being able to execute.
We are able, for instance, to work more and more remotely to execute that kind of project. Overall, now if I go back to the numbers, it translates indeed to the number. For the first half, we are already well into the double-digit EBITDA number. The good news is it comes from pretty much everywhere. Gross profit is higher. The sell line is not great, but again, remember that we are really focusing on the high added value part. If I was removing the non-target activity, actually, you would see a specific growth in S1 for this business in the desired, I would say, sales for the business. Strong gross profit, and there is no reason why we shouldn't have also good cost management in HealthCare IT. It's about delivering for our customer efficiently, and that's what we are doing as well. We are very pleased.
Now, as I said, let's not draw a line for the rest of the year. It's still a three-year journey. We proved that we can get there, but again, don't draw a line. Now, if I turn to Radiology Solutions. Radiology Solutions, you see about still 56% is hardcopy film, which represents still the bulk of our activity. CR and DR, 38%. How did we fare in this business? I probably will do the same, meaning show first the comments and then the numbers. Well, clearly in the DR market, the market changed dramatically during COVID. The market for radiography rooms decreased, but the demand for mobile equipment that you can put to the bedside of any patient increased, for obvious reasons.
We were able to adapt very quickly to this new reality of the market, stepping up also the supply chain, and we could gain share in this environment. We are very happy to say that the direct radiography business has shown tremendous profit improvement during the second quarter and the first half in general. Computed radiography market has been decreasing in the top line, but we have maintained excellent bottom line. This is clearly a managed decline of the market. The market is moving to DR, but we do that very successfully on the profit area. Regarding the film market, and the film market is mainly outside of Europe and North America. The first market is China. Well, China activity is almost back to normal. It's not yet 100%, but it's close to 90% today after Q1 that has been a bit impacted by the pandemic.
However, we are still suffering in terms of top line for the film from the various situation in India, in Latin America, in the rest of Asia. That's clearly the case that in fact, COVID-19 prevents actually people to go to the hospital to get normal procedures. In spite of this top-line challenge, as you can see, we could mitigate it, and bottom line, this is clearly still a very profitable business, 21% of EBITDA, almost the same EBITDA in spite of the film impact as last year, whether you look at Q2 or S1. We would expect these trends basically not to change in the coming quarters. If I look at Digital Print & Chemicals, and we have three businesses really in this area. Inkjet is about digital printing. We sell equipment, software, and inks into this market.
Electronic print is our chemical business to make it simple. The remaining 44% is the non-medical film business, in fact. If I look at the comment before showing the numbers, clearly a huge impact in digital printing for the simple reason, most of our current business is really towards commercial printing, meaning event-driven advertising, commercial activity. Obviously, it was extremely impacted during the pandemic. Also, a significant part of our business is equipment. We sell equipment, we sell software, we sell ink. Equipment during the pandemic, we could deliver the backlog, but there is no new orders, no significant new orders during the situation. That's very clear. This is the most impacted business. What are we doing in this area? Well, First, we have five new product initiatives that are going to be rolled out.
Some are already out, but the rest will be rolled out in the next months. We have used the pandemic time to work on development, and we are bringing new equipment to the market with specific high productivity features for our customers. Second, we have a drive for a few years to diversify away from the commercial printing sign and display market. Today, we have initiatives in floorings and leather that are already commercial and that we are rolling out. We have sold our first equipment in laminate floorings. We are about to sell another one. It's starting. These are end markets that are much less impacted by the situation. Third, we are developing a new application in the field of OEM inks. In the field of corrugated packaging, we believe we have a role to play in this market, thanks to our innovation.
Fourth, you've seen that we have invested in capacity for water-based inks production. The reason is our OEM ink business in the space is about to take off very significantly. Overall, short term, a lot of impact. Midterm, extremely confident that we can deliver superior growth in this market. Specialty chemical business has been quite resilient during the crisis, but not totally immune. Here I want to exemplify a bit what is the play for the specialty chemical business of Agfa by giving two examples of commercial initiatives fueled by innovation at the company. The first is a conductive polymer that is used in capacitors in hybrid and EV vehicles. That's a starting business, of course, and we are extremely well-positioned to take a significant share of this market. That can be potentially a material business for this division in two to three years.
Then also I would like to stress, I'm sure you've all seen the European Green Deal by the European Union with specific announcement on the green hydrogen economy, with billions that will be invested in large capacity for green hydrogen. Germany has issued a similar plan. France is about to issue one. There are initiatives also here in Belgium and Netherlands. It's a booming, I would say, economy. Happy to say that Agfa is part of the story because we do provide a critical component, namely the membrane for the alkaline electrolysis units that will work on renewable to produce hydrogen. If I look at the ambitions by the various countries and the commission in terms of capacity, this is a business that will be growth opportunity.
I want to convey the message here that actually our chemical innovation does position us in the right segments, both in terms of growth and sustainability, by the way. Last, film and foil business also impacted by COVID-19. The exposure to the industry is mainly in the oil and gas and aeronautics, and therefore here we are impacted very clearly. Turning to Offset now. Offset, as you know, was already in a situation where we were challenged even before COVID-19. Of course, the COVID-19 situation has not changed the nature of the issue for the business. There are three markets for Offset. Newspapers and magazines, commercial printing and packaging. The first two were significantly impacted by COVID-19, and therefore we've seen that in our numbers. We have a revenue decrease of 25% in the Offset market.
Clearly, this is the area where we believe that there will not be a full recovery. When demand is being destroyed in this market, typically not all the demand will come back. That we are fully aware of it. As you know, we have already taken steps to address the situation by reducing our capacity in Europe, and I did mention the two plants that we will be shutting down in the next months. On top of that, this is just a first step. On top of that, we are actually today reviewing our Offset Solutions business model. We are going to simplify our organization, our go-to market. We will streamline the product offering. More is yet to come in terms of Offset Solutions, in terms of really structural action. We also believe that current pricing levels in the industry are not sustainable.
We believe there is an issue here, we look into a way to position ourselves differently in the market. For instance, today, we give for free a lot of services to customers. We are about to review, therefore, the way we earn our margins in this area. All this means a very negative performance at the EBITDA level. We did the same as in every business segment. We could remove, as you can see, a significant part of our SG&A. Actually, we kept our SG&A in terms of % constant, even with a 25% top-line decrease. Of course, it's not enough to mitigate the decrease in the market, and therefore, we are in negative territory for EBIT and EBITDA. As I said, we are taking the steps to address the situation as we speak, actually. That's a bit for Offset.
I'm going to end up by the outlook. What we see today for Q3 is, on the one hand, the activity level improves gradually. It is certainly not a V-shape recovery, as we know. We are fully aware right now that, of course, the situation will take more time to get back to normal, I would say. The pace of recovery, therefore, is still quite subdued. On top of that, we know already that we cannot repeat some of the cost actions that we were able to have in Q2. Simple example, for instance, people are taking vacation, I would say, during July, August, and we are of course encouraging everyone to take vacation. When you take vacation, the company pay the full amount. While when you are in a temporary unemployment part, of course, there are schemes for you to benefit from advantages. That's one example.
We are also going to wind down our inventories, meaning we will shut down, on a temporary basis, some of our plants, meaning the fixed cost will also partly flow to the P&L. Actually, we are expecting a Q3 that is weak, actually. Before what we believe will be a rebound in Q4 for us. The key assumption for us is that we are not entering into a new lockdown period and that the economic situation continues to improve gradually. That's our assumption. However, on the medium term, and when I say on the medium term, I'm saying in the next couple of years, I can restate only my full confidence in the solidity of the Agfa business portfolio. Healthcare activities will benefit midterm from the situation. I strongly believe that post-pandemic, we will see a reinvestment in the health system.
We already see some signs of it, and our activities are extremely well-placed to take advantage of this positive market trend. On Digital Print & Chemicals, the growth will come from our own innovation. We have a portfolio of innovation today. Again, these are commercial initiatives, not R&D. We strongly believe in their potential. Last but not least, Offset Solutions, the name of the game, we will have to probably right-size the business given the new deal in the market. Expect some more actions in this area. Overall, again, I want to express my full confidence in the portfolio of the company with the one business that needs to be addressed in terms of profitability, which is Offset Solutions. I am going to stop here. Of course, I will be ready to take questions from analysts and journalists. We do have some in the room.
Maybe we should start by the room, Viviane, and then take questions on the phone.
Good morning. Guy Sips, KBC Securities. First, two questions. First is, you stated that you are not changing your view on shareholder remuneration and possible share buyback, whatever. When can we expect some news on that? You highlighted that you didn't change any view since the start of the pandemic compared to today. When can we expect some news on that one? The second is, can you give some more color on the Florida contract size in the HealthCare IT business? What was the contribution of that contract? In Radiology Solutions, you stated that we do not expect the trend to change in the coming quarters. Can you confirm that you're expecting this in Radiology Solutions that EBITDA margins be and stay close to the 20%? Thank you.
Okay. On the shareholder remuneration, yes, I repeat. I think we used exactly the same wording we used for Q1. I think exactly, we have not changed. To your question, when can we expect to have more clarity? It's probably a bit difficult for me to answer because I need to have visibility. Today, I think you would agree with me, the development of the situation through the pandemic, you have ups and downs, and it's probably not what we expected. It's a bit difficult to answer to your question on when, because we need this visibility going forward. I hope that we'll be able to do that in 2021, at least. Regarding the Advent contract, I would turn it to Luc Thijs, the head of HealthCare IT business. I'm not sure we are able to provide any color here.
No. We have agreed with the customers in our contractual terms that we would not divulge the information.
So.
It was, let's say, very significant. Sure. I'll leave it at that.
Yeah, it's confidential. AdventHealth were happy for us to mention the fact that we are their partner.
Let's put it the other way around. This contract, how many times can we expect a contract of this size? Is that every year, every two years, every five years? How exceptional is this?
Well, I would say that the specificity here is that we were able to deploy within, let's say, recognized within one quarter. Because we have similar types of contracts with other customers, but they typically take a longer time to be deployed. Here it was, let's say, within a quarter that you saw the major impact. There is several of those, and of course, towards the future, we're aiming for more of those also. Yeah. As we have, as you will read, a very focused approach towards customers that have a high IT maturity, and secondly, customers that have a growth plan. Meaning hospitals that consolidate other hospitals, or that extend service lines, and therefore grow in patient volume.
No, it shows our ability to win in this market, to have such a large contract with a large provider. It's good. The ability also that we have to execute very well, actually, on the project.
Yeah.
This is what it does reflect. When you do it in one quarter, especially in the context of COVID-19 pandemic in Florida, that's what the takeaway should be. Our ability to deliver flawlessly large contracts in a difficult context gives me every confidence. We won't have it every quarter. As Luc is saying, normally, it's typically spread over, but I think the takeaway is we're on the right track here. We're on a good track.
Yeah.
You had a last question regarding radiology. Yeah, we expect the trend to continue. We are expecting the film business to continue to be challenged until the end of the year in terms of volume. We do expect, as well at the same time, much progress on the direct radiography business. Overall, yes, Radiology Solutions will deliver.
Good morning. Chris Skippers of Roth Capital. Two questions, if I may. First one, importantly, of course, on the cash allocation for the pension plan. I was just wondering, what's the, let's say, the risk profile that you have in mind for the group? What's the calculation you have made to state we want to de-risk our pension plan that we have today? What's, let's say, a normal level that we should anticipate going forward of cash on the balance sheet in that respect? Would you then consider, if you look at investing in, let's say, internal solutions, but also potentially externally, so would you consider if you net out the cash that you have with the pension plan, would you then consider to take in some leverage, let's say, to accelerate your growth as you foresee in some niche areas?
Let's say add-on M&A and things like that. Secondly, oh, sorry, related to that, of course, how do you make the calculation from the 80 to 50? If I understand it well, let's say EUR 5 million-EUR 6 million stems from the German fading out, and there is then a one-off effect of EUR 20 million-EUR 25 million from the deposit that you made now, roughly. Does it imply that you actually land at EUR 45 million also in 2030 when the additional EUR 5 million from Germany is coming in? Just a second question. Indeed, you allude a lot towards the weaker Q3. Temporal unemployment is indeed gradually fading out.
Could you share with us some more details on how Agfa, let's say, benefited from that and in what respect you can compensate those benefits by the restructuring that is coming up, for example, and Offset and things like that? So thank you.
Yeah. On the pensions, I think we just took a cut at where we thought we should go in terms of funding the funded plans. That's really how we went about it. We have three major plans that were funded, but let's say not fully funded. That's basically the angle we took, is we wanted to bring them to a high enough funding level so that you could consider them fully funded with a little gap left. In the future, when you have discount rates still improving a bit, that you get not automatically to a fully funded status or if in the future, and I guess that's the long-term future, because I don't see that happening very soon. If discount rates would increase significantly, you could get to an over-funded situation and potentially take them off the balance sheet completely.
That's very long-term future. That's what determined really our choices around the funding level. I think the second part of your question is more about leverage going forward. That will be more driven by the opportunities that come across our path. At this point in time, we're not intending to make big acquisitions. I think if anything, it will be small bolt-on elements that we need to develop the businesses that we have. Who knows? In the long term, these are indeed options as our business develops, and there are opportunities that we need to look at that could be considered in the future. For now, we intend to stay cash positive and debt-free and use the proceeds as we go along for the projects that we have. I forgot the third question. Can you?
The cash outflow for pension.
Indeed, you could consider that continuing to decrease over time, at least with EUR 1 million a year. Basically, the point there is that it's the German fund that will be very predictable. There is still a part of an active fund in Belgium, which is the Belgian plan, where when people retire, they take the cash in one lump, and that's also going to be determining the cash outs, but they would not be increasing.
Just a point on acquisition going forward. Let me state also that for the time being, when you look at the, for instance, at Imaging IT or DR, we have an organic plan for growth. We don't need a lot of capital to grow. As I said, in Digital Printing and Chemicals, that's also an organic plan to grow through innovation. It doesn't mean I'm ruling out anything in the future, but the first priority for the time being is really to deliver on these organic plans. That's the first and foremost priority for us. Also, I think we have a pretty good view of where we want to be in Imaging IT and in direct radiography. I think we still have to write a strategic roadmap for the Digital Printing and Chemical business to look at the potential options we have in this space.
It's probably a bit less mature in the strategic, I would say, thinking in these areas.
Coming back on the pensions, you will decrease the cash out from EUR 80 million to EUR 50 million between today and 2026. Will we see a hike in, let's say, this year and next year, or will it be very gradual?
Yeah, I need to look at the projections. I just took the years where we had nice rounded numbers. That's why I picked 2026. We can follow up on that point.
Any question on temporary unemployment?
On temporary unemployment, it's probably a bit difficult to give more color. I did not only mention that, but I also did say that some of our units will be shut down on a temporary basis, which also will impact a bit the P&L in the short term, while releasing cash, by the way, from the working capital. It's probably a bit difficult to give more color right here.
Sorry.
On the temporary unemployment.
Yeah.
Really.
We need to see
The story is not over yet. I explained that, especially, for instance, in Belgium, we favor, of course, vacation. We are looking at our options for September as I speak. The story is not over. Another question from the room, I guess.
You have one on the further reorganization of graphics. What's your message for the labor force right here in Mortsel? Before you said they don't have to worry. Is it still the case?
I think we have Sorry, it seems we have an issue with my microphone. What I did refer to is the industrial production in Mortsel is mainly film and chemical related. Mainly. Graphics is not the main driver for Mortsel. I repeat that. On the manufacturing footprint, the footprint we have in graphics and in which we are doing is in Leeds and Pont-à-Marcq in France. Regarding Offset, what we do have here is a headquarters. We have a lot of people doing services, engineering, and so on. Yes, part of the Offset organization is here, but you should make the distinction between the industrial part and the plant and the headquarters. Right, Luc? Rightly said?
That's it.
If you summarize it a little bit, managing Agfa-Gevaert is making sure that your rebate is high enough to cover for the pension costs and the restructuring charges. Can you give us some clue on the restructuring charges going forward this year? They will be quite high, how do you see them evolving over the coming years?
That's a good question. We have received the cash from the Imaging IT divestiture. This is the opportunity to make a company transformation. We are addressing the liabilities today, the pension liabilities. I will also use the cash to make the company transformation. When you refer to restructuring, we add the resources to restructure. I'm not in a position to guide you right now on restructuring. You need to be a bit patient. You understand that we are still working on the plan for Offset. Offset being a significant part of the company. We will be looking at the overall company setup, of course. It's too soon to guide on the subject. Again, yes, you're quite right. I mean, I'm confident going forward with the growth of our businesses.
Yes, we'll have a group that will comfortably be able to pay its legacy duties while still generate cash. This is the name of the game here. Question from the audience on the phone? I think we have one analyst and maybe a couple of journalists, if any.
Okay. We'll now begin the question and answer session. If you would like to ask a question, you may press star followed by the number one. Please unmute your name clearly when prompted. Your name is required to introduce before the question. To cancel your question, you may press star. Come on, p lease put questions if you will.
No questions from the phone?
Yes, speaker. There are no questions over the phone.
There are no questions. Okay. Very good. No questions from the room? Okay. Thanks very much. Thank you very much for your attendance. Stay safe. See you in about a quarter, I hope. Thank you.
Thank you. That concludes today's conference. Thank you for participating. You may now disconnect.