16 february 06, page 1 company confidential results 4q05 and fy05 martin de prycker, ceo 16 february...
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16 February 06, page 1Company Confidential
Results 4Q05 and FY05Results 4Q05 and FY05
Martin De Prycker, CEO
16 February 2006
16 February 06, page 2Company Confidential
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
16 February 06, page 3Company Confidential
Results per quarterResults per quarter
0
50
100
150
200
250
OrdersSalesEBI TA
in € million
16 February 06, page 4Company Confidential
Results 4Q 2005Results 4Q 2005
16 February 06, page 5Company Confidential
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
16 February 06, page 6Company Confidential
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
16 February 06, page 7Company Confidential
BarcoView BarcoView (1)(1)
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60
70
OrdersSalesEBI TA
in € million
16 February 06, page 8Company Confidential
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
16 February 06, page 9Company Confidential
Barco Media & Entertainment Barco Media & Entertainment (1)(1)
-10
0
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70
OrdersSalesEBI TA
in € million
16 February 06, page 10Company Confidential
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
16 February 06, page 11Company Confidential
Barco Control Rooms Barco Control Rooms (1)(1)
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35
OrdersSalesEBI TA
in € million
16 February 06, page 12Company Confidential
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 %
16 February 06, page 13Company Confidential
Barco Presentation & Simulation Barco Presentation & Simulation (1)(1)
0
5
10
15
20
25
30
35
OrdersSalesEBI TA
in € million
16 February 06, page 14Company Confidential
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
16 February 06, page 15Company Confidential
BarcoVision BarcoVision (1)(1)
0
5
10
15
20
25
OrdersSalesEBI TA
in € million
16 February 06, page 16Company Confidential
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
16 February 06, page 17Company Confidential
Barco Manufacturing Services Barco Manufacturing Services (1)(1)
-5
0
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20
25
30
35
OrdersSalesEBI TA
in € million
16 February 06, page 18Company Confidential
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
16 February 06, page 19Company Confidential
Geographical breakdown of salesGeographical breakdown of sales
31,3%
47,8%
20,9%
EMEAAMERICAS ASIAPAC.
4Q05
4Q0434,5%
44,6%
20,9%
16 February 06, page 20Company Confidential
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
16 February 06, page 21Company Confidential
Results Full Year 2005Results Full Year 2005
16 February 06, page 22Company Confidential
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
16 February 06, page 23Company Confidential
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)
16 February 06, page 24Company Confidential
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
16 February 06, page 25Company Confidential
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%
16 February 06, page 26Company Confidential
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
16 February 06, page 27Company Confidential
Geographical breakdown of salesGeographical breakdown of sales
31,4%
49,9%
18,7%
EMEAAMERICAS ASIAPAC.
2005
200433,5%
47,7%
18,8%
16 February 06, page 28Company Confidential
Expectations 2006Expectations 2006
16 February 06, page 29Company Confidential
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
16 February 06, page 30Company Confidential
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
16 February 06, page 31Company Confidential
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
16 February 06, page 32Company Confidential
Questions & AnswersQuestions & Answers