FULL YEAR RESULTS: +20% EBITDA growth on flat sales, reflecting tangible progress on ‘focus to perform’ initiatives

22 Feb 2018 16:54 CET

Kortrijk, Belgium, 8 February 2018, 7:30 am – Today Barco (Euronext: BAR; Reuters: BARBt.BR; Bloomberg: BAR BB) announced results for the six and twelve month periods ended 31 December 2017.

Fiscal year 2017 financial highlights

-      Incoming orders at 1,105.2 million euro (+ 2.2%)

-      Sales at 1,084.7 million euro (- 1.6%), flat excluding lighting divestment[1]

-      EBITDA of 107.1 million euro (+ 19.1 million euro) or 9.9% of sales (+ 1.9 ppts)

-      Adjusted EBIT[2] of 73.2 million euro (+36.7 million euro) or 6.8% of sales (+3.5 ppts)

-      Net income[3] of 24.8 million euro[4] (+13.8 million euro)

-      Free cash flow of 40.0 million euro, down from 57.4 million euro

-      ROCE @ 19% (+4 ppts)[5]

-      Proposal to increase the dividend to 2.10 euro per share from 1.90 euro

Executive Summary

A solid gain in gross profit margin combined with OPEX control lifted the EBITDA margin by 1.9 percentage points to 9.9%, with each division posting gains. Barco delivered this profitability improvement while maintaining R&D spending levels to ensure the healthy pipeline of innovative solutions.

Reported sales were slightly below last year and flat excluding the impact of the divestiture of the company’s lighting business. Enterprise continued to deliver strong growth for ClickShare and launched Control Room’s UniSee, a new LCD-based videowall as part of a turnaround plan for this business. Healthcare increased sales and strengthened its market position in the diagnostic and surgical segments. In Entertainment a promising uptake in the Venues & Hospitality segment partially offset softer sales in Cinema.

Barco undertook a strategic review of its businesses, assets, manufacturing footprint and investments as part of its ‘focus to perform’ program. The outcome of this review included the divestiture of the company’s lighting activity, a redeployment of resources away from underperforming or non-strategic initiatives to core business opportunities and the decision to relocate the manufacturing activities from Norway to Belgium. As a result of the strategic review, the company recorded 32.4 million euro in restructuring and impairment charges consisting of 5.2 million euro of cash restructuring costs and 27.2 million euro of non-cash charges.

Quote of the CEO, Jan De Witte

“During 2017 we took decisive actions to establish a stronger foundation for sustainable profitable growth and improved quality of earnings. We made choices across the organization and intensified management attention on operational efficiencies and gross margin accretion initiatives,” said Jan De Witte, CEO.

“While our performance in 2017 demonstrates that we are moving in the right direction, we are not finished improving our profitability and execution efficiency. Therefore, in 2018, we remain focused on our strategic initiatives in order to deliver another year of EBITDA growth and on improving the effectiveness of our sustained R&D investment to deliver future topline growth,” concluded De Witte.

Outlook 2018

The following statements are forward looking and actual results may differ materially.

Assuming a stable economic environment and currencies at current levels, management expects to generate further margin improvement on flat sales for 2018 compared to 2017.
Management‘s full year outlook on sales anticipates unfavorable currency comparison for the first half offset by stronger sales on a comparable currency basis in the second half of the year.
Management’s guidance for 2018 excludes the impact of the new strategic cinema joint venture and the new ownership structure in BarcoCFG[6].

Read the full press release here

About Barco

Barco designs technology to enable bright outcomes around the world. Seeing beyond the image, we develop visualization and sharing solutions to help you work together, share insights, and wow audiences. Our focus is on three core markets: Enterprise (from meeting and control rooms to corporate spaces), Healthcare (from the radiology department to the operating room), and Entertainment (from movie theaters to live events and attractions). In 2017, we realized sales of 1.085 billion euro. We have a team of 3,600 employees, located in 90 countries, whose passion for technology is captured in 400 granted patents.
For more information, visit us on www.barco.com, follow us on Twitter (@Barco), LinkedIn (Barco), YouTube (BarcoTV), or like us on Facebook (Barco).

© Copyright 2018 by Barco

[1] The reported results are not corrected for currency effects and the impact of the lighting activity, which the company divested in 1H17. Excluding the impact of lighting, sales for 2017 were flat compared to 2016 ; excluding currency effects reported sales were 1.0% below last year.

[2] Adjusted EBIT is EBIT excluding restructuring charges and impairments and other non-operating income expenses, see Glossary Annual report, Module 3

[3] Net income attributable to the equity holder of the parent

[4] Net income include impairments and restructuring costs of 32.4 million euro

[5] ROCE in 2017 is 4 percentagepoints higher than ROCE 2016, excluding impact of amortization on capitalized product development costs and applying adjusted tax rate of 16%

[6] BarcoCFG is the entity where Barco joined forces with China Film Group to address the Chinese cinema market. Barco holds a 58% stake in this entity. See also glossary in Annual Report.