26 july 04, page 1 company confidential results second quarter 2004 and 6 months ended june 30, 2004...
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26 July 04, page 1Company Confidential
Results Second Quarter 2004 and
6 months ended June 30, 2004
Martin De PryckerCEO
July 27, 2004
26 July 04, page 2Company Confidential
Operational results 2Q 2004 and 1H 2004
in € million 2Q03 2Q04 Growth 2Q03/ 2
Q04
1H03 1H04 Growth 1H04/ 1
H03
Orders as reported 169.2 178.6 5.6% 327.1 332.5 1.7%Orders at constant currencies
169.2 183.8 8.6% 327.1 348.4 6.5%
Sales as reported 158.0 171.5 8.6% 309.1 320.8 3.8%Sales at constant currencies
158.0 176.1 11.5% 309.1 334.9 8.3%
EBITA as reported 17.4 18.7 7.3% 32.8 34.1 3.8%EBITA at constant currencies
17.4 19.4 11.5% 32.8 36.0 9.8%
EBITA % 11.0 10.9 -1.0% 10.6 10.6 0.0%Book- to-bill 1.07 1.04 1.06 1.04
26 July 04, page 3Company Confidential
Results per quarter
0
20
40
60
80
100
120
140
160
180
200
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04
OrdersSalesEBI TA
in € million
26 July 04, page 4Company Confidential
Overall comments 2Q 2004 (1)
• Good order intake at € 178.2 million, a YoY growth of 5.6%, 8.6% at unchanged exchange rates
• Sales growth of 8.6%, 11.5% at unchanged exchange rates
• Good book-to-bill ratio of 1.04 increased the order book for the 6th consecutive quarter
• Gross profit margin stabilized at 44.1%, below 2Q03, due to changing product mix and pricing pressure in some of our markets
• EBITA at 10.9%, remained stable vs 2Q03 despite a 5.7% weaker dollar
• Currency fluctuation negatively impacts EBITA YoY by € 0.7 million
26 July 04, page 5Company Confidential
Overall comments 2Q04 (2)
• Operational profit (EBITA) margin remained unchanged YoY, despite a higher sales volume due to a changing product mix and higher operational costs
– Product mix: margins on LED below Barco’s average, but continuously improving
– Recurring operational cost increases: higher number of personnel and salary adds approximately € 3 million
– Non-recurring operational cost increases: provisions of € 2 million
26 July 04, page 6Company Confidential
Evolution of results per division
in € million Sales % EBITA Sales % EBITA
View 51.3 14.6 54.0 13.6
Media & Entertainment 31.1 5.7 43.7 6.5
Presentation & Simulation
24.6 9.5 28.2 12.8
Control Rooms 19.0 6.9 25.4 14.4
Vision * 17.2 19.1 14.5 10.0
Manufacturing Services 17.3 9.4 30.8 -0.6
Eliminations, Machine Vision, dotrix
-2.5 -25.0
Total 158.0 11.0 171.5 10.9
2Q03 2Q04
* Excludes results from Machine Vision, divested in July 2003
26 July 04, page 7Company Confidential
BarcoView (1)
0
10
20
30
40
50
60
1Q03 Q2 03 3Q03 4Q03 1Q04 2Q04
OrdersSalesEBI TA
in € million
26 July 04, page 8Company Confidential
BarcoView (2)
• Orders – Very good book-to-bill ratio at 1.1– Orders in Defense & Security improved from 2Q03 levels– Orders in Medical remain high– Strong orders in Traffic Management, but comparable with last
year
• Sales– Strong sales volume in Medical confirms market leadership,
although lower than 1Q04 levels– Defense deliveries slightly higher than in 2Q03 – Traffic Management at the same level as in 2Q03
• Margins– Good EBITA margin of 13.6%, thanks to high gross profit margin
of 47,4%
• New products introduced– LCD for mammography– On Board Information terminal (OIT) for A380– Micro Vista: deployable rugged workstation– Modular Rugged Display Station for processing and display in
high resolution– Rugged flat panel display for night bridge applications
26 July 04, page 9Company Confidential
Barco Media & Entertainment (1)
-505
101520253035404550
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04
OrdersSalesEBI TA
in € million
26 July 04, page 10Company Confidential
Barco Media & Entertainment (2)
• Overall improvements versus last year driven by organic growth and acquisitions in the US and China
• Orders– Book-to-bill ratio at 1.02– Strong orders in Media, especially in China and first successes in North
America in sports market, especially in NBA– Successes in Events worldwide, including Folsom– Digital Cinema continues to show positive signs for start in 2005, with
good orders coming in from NA, Europe and Asia
• Sales– Sales increased by 40.2% YoY– Good Media sales but with a weaker profit margin– Extremely good Events sales worldwide, helped by Euro 2004 and
Olympic Games
• Margins– Gross profit margin stable at 37.9% QoQ, but better than in 2Q03– EBITA margin at 6.5%, improved vs last year as a result of good profit in
Events, but margin still not at target level due to investments in Media and Digital Cinema
• New products introduced– Media: SLite 22– Events: “Encore” controller and SLM R12
26 July 04, page 11Company Confidential
Barco Presentation & Simulation (1)
0
5
10
15
20
25
30
35
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04
OrdersSalesEBI TA
in € million
26 July 04, page 12Company Confidential
Barco Presentation & Simulation (2)
• Orders– Order intake grew by 21% YoY; book-to-bill at 0.96 due to
high sales volume in 2Q04– High order intake in Virtual Reality and Simulation
• Sales– Presentation
• Stable sales vs 2Q03 and 1Q04– Simulation
• Sales strong in Security applications• Good sales in museums and planetariums
• Margins– Gross profit margin at 48.2%, above 1Q04 level, but weaker
than 2Q03– Good EBITA margin at 12.8% vs 5.7% in 1Q04, but negatively
impacted by low margin in Presentation
• New products introduced– High resolution projector with HD format at Infocomm will
improve our position in top-end of the presentation market
26 July 04, page 13Company Confidential
Barco Control Rooms (1)
0
5
10
15
20
25
30
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04
OrdersSalesEBI TA
in € million
26 July 04, page 14Company Confidential
Barco Control Rooms (2)
• Orders– Continued strong growth in orders vs 2Q03: +18.1%
compared with 2Q03, continuing to increase the order book– Book-to-bill at 1.15 very high, with successes in North
America, Asia and Middle East
• Sales– High growth worldwide of 33.7%– Good worldwide sales in all segments, particularly strong in
Traffic & Surveillance– Strong inroads into Security applications in the US and
Europe
• Margins– Gross profit margin at 50.5%, slightly better than 2Q03,
despite pricing pressures– EBITA margin very high at 14.4%
• New products introduced– Introduction DLP engine DR120 for replacement market– Announced RGB frame grabber at Infocomm exhibition
26 July 04, page 15Company Confidential
BarcoVision (1)
0
5
10
15
20
25
1Q03* 2Q03* 3Q03 4Q03 1Q04 2Q04
OrdersSalesEBI TA
in € million
* Excludes Machine Vision, divested in July 2003
26 July 04, page 16Company Confidential
BarcoVision (2)
• Sales & Orders– Book-to-bill ratio at 0.93 confirms weaker textile
market, although July shows some pick up, thanks to differentiating products (PP sensors and Cyclops automatic inspection system for more complex fabric styles)
– Results do not include Machine Vision, divested in July 2003
• Margins– Gross profit margin improved sequentially to 45.7%
from 43,7%– EBITA margin lower than usual at 10% due to low
volumes, but still good reflecting cost control
26 July 04, page 17Company Confidential
Barco Manufacturing Services (1)
-5
0
5
10
15
20
25
30
35
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04
OrdersSalesEBI TA
in € million
26 July 04, page 18Company Confidential
Barco Manufacturing Services (2)
• Sales & Orders– Sales & orders increased driven by a higher external
order volume and particularly as a result of the internal reorganization
• Margins– EBITA margin declined to –0.6% reflecting the
increase in personnel in the Czech Republic and temps in Belgium
– These additions in personnel resulted in a temporary decline in efficiency
26 July 04, page 19Company Confidential
Geographical breakdown of sales
31,8%
15,3%
52,9%EMEAAMERI CASASI APAC.
1H03
1H04
30,6%
50,2%
19,2%
26 July 04, page 20Company Confidential
Regional comments first half 2004North America• Flat sales in €, due to the 10% depreciation of the USD• Growth in North America in most markets, especially in Control
Rooms, Media, Events and MedicalAsiapac• Overall 30% growth in Asiapac• China’s performance remains strong, mainly in Control Rooms,
Simulation, Media and Events• Double digit growth in South East Asia, Korea and IndiaEMEA• Flat sales YoY, but with regional/market differences• Growth for Control Rooms, Simulation, Media and especially
Events• France and Germany weaker than 2003, UK stronger and in
particular Spain and Italy doing well• Central & Eastern Europe strong in Control Rooms• Middle East strong in Media
26 July 04, page 21Company Confidential
Key figures Income Statement 2Q04
in € million 2Q03 % 2Q04 % 1H03 % 1H04 %Sales 158.0 100.0 171.5 100.0 309.1 100.0 320.8 100.00Cost of goods sold -83.0 -55.0 -95.8 -55.9 -171.5 -55.5 -179.2 -55.9Gross Profit 71.0 45.0 75.7 44.1 137.6 44.5 141.6 44.1Research & Development -18.0 -11.4 -16.7 -9.7 -34.7 -11.2 -32.2 -10.1Sales & Marketing -25.8 -16.3 -27.8 -16.2 -49.9 -16.2 -53.4 -16.7General & Administration -11.8 -7.5 -12.5 -7.3 -23.7 -7.7 -23.9 -7.4Other operating result +2.1 +1.3 +0.1 0.0 +3.6 +1.2 +2.1 +0.6EBI TA 17.4 11.0 18.7 10.9 32.8 10.6 34.1 10.6Goodwill amortization -1.7 -1.1 -1.8 -1.1 -3.3 -1.1 -3.7 -1.2Operating Result 15.7 9.9 16.9 9.8 29.5 9.6 30.4 9.5Non-operating result 0.5 0.3 0.4 0.2 0.9 0.3 0.8 0.3I ncome Taxes -4.9 -3.1 -4.6 -2.7 -9.2 -3.0 -8.5 -2.6Net I ncome 11.4 7.2 12.7 7.4 21.2 6.8 22.8 7.1Current Cash Flow 28.0 17.8 29.2 17.0 52.5 17.0 53.3 16.6Current Earnings/ Share ( in €) 1.05 1.19 1.98 2.24Net Earnings/ Share ( in €) 0.92 1.03 1.70 1.95
26 July 04, page 22Company Confidential
Key figures Balance Sheet
in € million 30/06/03 31/12/03 30/06/04
Accounts Receivable
148.3 149.5 154.7
Inventory 130.4 103.3 143.1
Cash 101.9 133.4 124.2
Financial debt
25.2 29.2 56.5
26 July 04, page 23Company Confidential
Expectations 3Q04
• Sales target: between € 150 – € 160 million, representing a YoY growth of around 7% at the middle of the range
• EBITA of between € 10 and € 15 million, YoY growth of around 25%
• Current EPS between € 0.63 and € 0.94 versus € 0.61 in 3Q03
26 July 04, page 24Company Confidential
Questions & Answers