FULL YEAR RESULTS: Second consecutive year of solid margin expansion, with topline growth in 2nd half

Fiscal year 2018 financial highlights

-      Incoming orders at 1,046.9 million euro (-1.3%)[1] ; year-end orderbook +6%

-      Sales at 1,028.5 million euro (-0.5%)1; growth in the 2^nd half +2.8%[2]

-      EBITDA of 124.5 million euro (+16%) , EBITDA margin at 12.1% of sales (+2.2 ppts)

-      Net income[3] of 75.0 million euro (+50.2 million euro)

-      Proposal to increase the dividend to 2.30 euro per share from 2.10 euro

Executive Summary

EBITDA margin expanded 2 percentage points, on comparable sales, to 12% and within the range of Barco’s 2020 goal. A 2.9 percentage point gain in gross profit margin to 40% of sales drove the EBITDA margin improvement. Both the Enterprise and the Healthcare division delivered solid EBITDA margin growth while sustained investment in next-generation technology caused Entertainment’s EBITDA margin to be flat year-over-year. Consistent with the EBITDA improvement, group EBIT grew 17 million euro to 90 million euro, or 8.7% of sales, and net earnings increased threefold to 75 million euro.

Noteworthy in Barco’s performance for 2018 is the continued double-digit growth of ClickShare and the measurable turnaround results for Control Rooms which boosted the Enterprise division performance. The topline Entertainment results bottomed out in the course of 2018 with a substantial pick-up in growth in the EMEA and North American region for Cinema, which partially offset anticipated market softness in China. Healthcare booked modest topline growth while continuing to add partners globally, further strengthening its position in the surgical segment.

While continuing to invest nearly 12% of sales in R&D, the company advanced its key growth initiatives, including its ‘In China for China’ program. As part of this program, Healthcare expanded its business development and manufacturing capabilities and the company expanded its local sales presence for Pro AV and ClickShare solutions. Under the ‘Focus to perform’ program, Barco finished streamlining its business activities, optimized its manufacturing footprint and announced its ‘fit to lead’ plan. In 2018, Cinionic, the company’s new cinema venture, started operations and won its first set of sizeable renewal programs.

Quote of the CEO, Jan De Witte

“Since introducing the ‘Focus to perform’ program in 2016, we have expanded the EBITDA margin from 8% to 12% in 2018 and have created a more resilient and healthy platform for future profitable growth,” said Jan De Witte, CEO.

“Nevertheless, we have more work ahead of us as we continue our journey to becoming a sustainable profitable growth company. To that end, in 2019 we will implement the ‘fit to lead’ program, our capability-building and efficiency plan, while resuming topline growth across our business segments.”

Outlook 2019

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

Assuming a stable global economic environment and currencies at 2018 average levels, management expects mid-single digit topline growth on a comparable pro forma basis[4] and continued EBITDA and EBITDA margin growth.[5]

Growth rates in management’s guidance are based on comparisons to 2018 results on a pro forma basis.

Read the full press release here

About Barco

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