16 February 06, page 1 Company Confidential Results 4Q05 and FY05 Martin De Prycker, CEO 16 February...

16 February 06, page 1Company Confidential

Results 4Q05 and FY05Results 4Q05 and FY05

Martin De Prycker, CEO

16 February 2006


Operational results 4Q 2005 Operational results 4Q 2005 and full year 2005and full year 2005

in € million 4Q 2004

2004 4Q 2005

2005 Growth 4Q05/ 4Q04

Growth 05/04

Orders 161.8 653.2 196.5 730.4 21.4% 11.8%

Sales 193.0 671.9 210.0 712.0 8.8% 6.0%

EBITA before restructuring

24.2 71.4 25.5 60.5 5.3% (15.2%)

EBITA 24.2 71.4 19.0 52.0 (21.3%) (27.2%)

EBITA % before restructuring

12.6 10.6 12.2 8.5

Book-to-bill 0.84 0.97 0.94 1.03


Results per quarterResults per quarter

0

50

100

150

200

250

OrdersSalesEBI TA

in € million


Results 4Q 2005Results 4Q 2005


Overall comments 4Q 2005Overall comments 4Q 2005

• Continued strong orders growth of 21.4 % in most of our activities, especially in

– Medical– Control rooms– Media– Events

• Strong sales growth of 8.8 % vs 4Q04, mainly in– Medical– Events– Digital cinema

• Gross profit margin lower at 41.4 % vs 42.9 %, mainly due to an increased write-off of stocks, but better than first nine months of 2005

• EBITA before restructuring at € 25.5 million, 5.3 % better than 4Q04; however EBITA negatively impacted by € 6.4 million for restructuring in EMEA and US

– Defense– Sales and Service back office

• Results on improved inventory management showing good results at € 141 million level, lower than 4Q04, despite higher anticipated sales in 1Q06 than in 1Q05


Evolution of results per divisionEvolution of results per division

in € million 4Q04 4Q05

Sales % EBITA

Sales % EBITA*

View 67.8 22.9 69.9 13.5

Media & Entertainment 41.9 -7.1 61.6 -1.0

Control Rooms 34.3 14.5 34.2 17.2

Presentation & Simulation 29.1 13.1 30.8 11.9

Vision 16.3 18.1 13.0 10.9

Manufacturing Services 27.3 -0.2 21.6 -3.3

Eliminations -23.7 -21.0

Total 193.0 12.6 210.0 9.1

* EBITA after restructuring


BarcoView BarcoView (1)(1)

0

10

20

30

40

50

60

70

OrdersSalesEBI TA

in € million


BarcoView BarcoView (2)(2)

• Orders – Book-to-bill ratio at 0.72– Orders flat vs 4Q04, positively influenced by Medical and

negatively by Defense & Security and Traffic Management. Orders in Avionics remain at high level of 4Q04

• Sales– Sales growth of 3 %– Strong sales growth in Medical confirms our market

leadership. Growth in all 3 segments: PACS, Modalities and 3D software

– Defense and Traffic Management sales weaker than 4Q04– Avionics sales strongly higher than 4Q04

• Margins– Good gross profit margin at 51.8 % vs 51.1 %, at the same

level as last year despite a higher sales volume of mid range medical products

– Good profit margin at 13.5 % but lower than 22.9 % in 4Q04, mainly because of restructuring and weaker defense and traffic management results


Barco Media & Entertainment Barco Media & Entertainment (1)(1)

-10

0

10

20

30

40

50

60

70

OrdersSalesEBI TA

in € million


Barco Media & Entertainment Barco Media & Entertainment (2)(2)

• Orders– Book-to-bill ratio very high at 1.13– Strong order growth of 62 % in Media & Entertainment– 82 % higher orders in Events, thanks to strong Events market

and increased market share– Orders of Digital Cinema at same high level as 4Q04

• Sales– Sales growth of 47 % vs 4Q04, composed of

• Good Events sales with strong increase vs 4Q04, thanks to successful new products

• Strong sales growth in Digital Cinema, illustrating a further penetration in cinema theaters

• Flat Media sales

• Margins– Gross profit margin at 22.8 % vs 27.5 %, lower due to different

product mix, stock write-off and exceptional warranty cost, caused by premature aging of a third party component

– Improved profit margin at -1.0 % vs -7.1 % in 4Q04 and -3.1 % in 3Q05, but still weak because of restructuring cost


Barco Control Rooms Barco Control Rooms (1)(1)

0

5

10

15

20

25

30

35

OrdersSalesEBI TA

in € million


Barco Control Rooms Barco Control Rooms (2)(2)

• Orders– Book-to-bill at 0.93, higher than 4Q04– Order growth of more than 21.7 % vs 4Q04

• Sales– Sales at same level as 4Q04 with successes in all

market segments

• Margins– Gross profit margin improved to 48.3 % vs 42.7 % in

4Q04, thanks to improved operational efficiency in our total supply chain

– Very good profit margin at 17.2 %


Barco Presentation & Simulation Barco Presentation & Simulation (1)(1)

0

5

10

15

20

25

30

35

OrdersSalesEBI TA

in € million


Barco Presentation & Simulation Barco Presentation & Simulation (2)(2)

• Orders– Book-to-bill for the division at 1.09– Orders improved vs 4Q04, both in Presentation and

Simulation, resulting in order growth of 20 %– Orders 15.7 % higher in Simulation vs 4Q04

• Sales– Sales growing overall with 6 % vs 4Q04

• Lower sales in Presentation due to delayed software release• Strong sales in Simulation, especially in the virtual reality

segment worldwide

• Margins– Lower gross profit margin at 39.9 % vs 46.5 % in

4Q04, due to increased inventory write-off– Profit margin at 11.9 % lower than 13.1 % due to

lower gross profit margin


BarcoVision BarcoVision (1)(1)

0

5

10

15

20

25

OrdersSalesEBI TA

in € million


BarcoVision BarcoVision (2)(2)

• Sales & Orders– Book-to-bill ratio at 0.97– Weak sales in textile, 20 % lower than 4Q04– Orders at a low level, 13 % lower than 4Q04, due to

weak investment climate in textile

• Margins– Gross profit margin improved to 50.6 % vs 47.8 % in

4Q04– EBITA margin weaker at 10.9 % vs 18.1 % in

4Q04,mainly because of lower volume as our operational cost was not reduced with the same level as our sales decline, because of investment in new products


Barco Manufacturing Services Barco Manufacturing Services (1)(1)

-5

0

5

10

15

20

25

30

35

OrdersSalesEBI TA

in € million


Barco Manufacturing Services Barco Manufacturing Services (2)(2)

• Sales & Orders– Sales and orders lower than 4Q04, due to shift of

some final production of Barco to Asia where we typically work with local subcontractors rather than with our own manufacturing services

• Margins– EBITA margin at -3.3 % vs -0.2 % due to lower

volumes – Manpower has been strongly reduced by early

retirement schemes and reduction of temps– Different options for Barco Manufacturing Services

are currently being evaluated


Geographical breakdown of salesGeographical breakdown of sales

31,3%

47,8%

20,9%

EMEAAMERICAS ASIAPAC.

4Q05

4Q0434,5%

44,6%

20,9%


Key figures Income Statement 4Q05Key figures Income Statement 4Q05

in € million 4Q04 % 4Q05 %

SalesCost of goods sold

193.0-110.3

100.0-57.1

210.0-123.1

100.058.6

Gross ProfitResearch & DevelopmentSales & MarketingGeneral & AdministrationOther operating result

82.7-17.8-28.7-12.3

0.3

42.9-9.2

-14.9-6.30.1

86.9-18.8-30.6-13.0-5.4

41.4-9.0

-14.6-6.2

-2.6

EBITAGoodwill

24.2-4.4

12.6-2.3

19.1-4.0

9.1-1.9

Operating Result 19.8 10.3 15.1 7.2

Non-operating result -0.2 -0.1 1.8 0.9

Income Taxes -3.6 -1.9 -3.3 -1.6

Net Income 16.2 8.4 13.7 6.5

Current Cash Flow 34.3 17.8 31.2 14.9

Current Earnings per Share (in €) 1.65 1.22

Net Earnings per Share (in €) 1.32 1.12


Results Full Year 2005Results Full Year 2005


Operational results full year 2005Operational results full year 2005

in € million 2004 2005 Growth 05/04

Orders 653.2 730.4 11.8%

Sales 671.9 712.0 6.0%

EBITA before restructuring

71.4 60.6 (15.2%)

EBITA % before restructuring

10.6 8.5

Book-to-bill 0.97 1.03


Comments full year 2005Comments full year 2005

• Order growth of 11.8 % and sales growth of 6 %, mainly realized through organic growth in following markets

– Medical– Events– Control rooms– Digital cinema

• Focus on operational excellence in 2005 has resulted in a more streamlined organization, at a cost of € 8.5 million for restructuring

• Gross profit margin improved gradually, approaching the level of 2004

• The actions w.r.t. improved inventory are showing first good results (€ 141 million vs € 144 million, despite higher anticipated sales), but have resulted in higher write off of stock of € 5.5 million vs 2004, because of a too high inventory level mid 2005 (i.e. € 168 million)

• We successfully continued our strategy of adding more high mid range products in some markets (e.g. medical, defense)


Key figures Income Statement 2005Key figures Income Statement 2005

in € million FY 04 % FY 05 %

SalesCost of goods sold

671.9-381.8

100.0-56.8

712.0-419.8

100.0-59.0

Gross ProfitResearch & DevelopmentSales & MarketingGeneral & AdministrationOther operating result

290.1-66.8

-109.7-48.1

5.9

43.2-9.9

-16.3-7.20.9

292.2-67.7

-114.8-52.7-4.9

41.0-9.5

-16.1-7.4-0.7

EBITAGoodwill

71.4-10.0

10.6-1.5

52.0-4.0

7.3-0.6

Operating Result 61.5 9.1 48.0 6.7

Non-operating result 0.6 0.1 0.9 0.1

Income Taxes -14.7 -2.2 -10.3 -1.5

Net Income 47.3 7.0 38.6 5.4

Current Cash Flow 111.5 16.6 98.0 13.8

Current Earnings per Share (in €) 4.66 - 3.25

Net Earnings per Share (in €) 3.86 - 3.15


Evolution of results per divisionEvolution of results per division

in € million 2004 2005

Sales % EBITA

Sales % EBITA

Growth 05/04

View 220.4 16.8% 236.0 10.5% 7.1%

Media & Entertainment 160.9 1.6% 188.3 -0.2% 17.0%

Control Rooms 109.6 12.1% 117.4 13.1% 7.1%

Presentation & Simulation 105.2 10.0% 103.2 6.8% (1.9%)

Vision 59.6 12.3% 57.8 14.0% (3.0%)

Manufacturing Services 112.1 0.7% 93.4 -3.2% (16.7%)

Total 671.9 10.6% 712.0 7.3% 6.0%


Key figures Balance SheetKey figures Balance Sheet

in € million 31/12/04 30/06/05 31/12/05

Accounts Receivable

166.2 173.7 188.8

Inventory 144.0 167.8 141.4

Cash 90.6 87.4 106.3

Financial debt 58.0 104.3 84.3


Geographical breakdown of salesGeographical breakdown of sales

31,4%

49,9%

18,7%

EMEAAMERICAS ASIAPAC.

2005

200433,5%

47,7%

18,8%


Expectations 2006Expectations 2006


Outlook 2006Outlook 2006

• Main segments where significant organic growth is expected in 2006

– Medical– Control Rooms– Media & Events– Digital Cinema

• Further growth in US and Asia expected as a result of stronger economic growth in these regions

• Increase profitability through higher operational efficiency by strong focus on quality improvements, improved supply agreements and continuous improvements of processes


Expectations 1Q06Expectations 1Q06

• Orders growing to around € 180 million – € 190 million from € 172 million in 1Q 05

• Sales target between € 165 million and € 175 million vs € 154 million in 1Q05, i.e. 10% growth at the middle of the range

• EBITA of between € 5 million and € 10 million vs € 6.4 million in 1Q05, i.e. an increase of 17% at the middle of the range


DividendDividend

Proposal of the Board of Directors to the annual shareholders’ meeting on May 3, 2006

Dividend will be increased to € 2.15 vs € 2.10 last year


Questions & AnswersQuestions & Answers

16 February 06, page 1 Company Confidential Results 4Q05 and FY05 Martin De Prycker, CEO 16 February...

Documents

Transcript of 16 February 06, page 1 Company Confidential Results 4Q05 and FY05 Martin De Prycker, CEO 16 February...