Barco Nv

Ladies and gentlemen, good morning to all of you. Thanks for joining this earnings call on Barclays Results for the third half of 2025. I'm here in the room today with our CEO, Amrish Tejan, and our CFO, Amrish Sander. And my name is Willem Tromp, so I'm Director of Investor Relations. We will first run through the presentation. This will take about 50 to 20 minutes, and then we will go into Q&A sessions. And Amrish Tejan, the CEO, will be coming through.

All right. Good morning, everybody. So I will start with the summary of results from the first half year of 2025. So we saw solid profitable growth. Both orders and sales did increase with 5%. That growth was mainly driven by healthcare and entertainment. There are merits that fill us in here. Our order book did grow with 3% year-over-year. And also 70% and a few percent up from last year of our revenues is actually coming from eco-labeled products. Also all the new products that we introduced in the line are also all eco-labeled. From EBITDA, so we basically landed at 10.6% of sales, which is 48 million, two and a half percentage points up since last year. Growth profit was up to 20 percentage points, and here we basically mitigated impact for 10 with a better product mix and, of course, with managing our OPEX. Free cash flow landed at 21.4 million, up 6.8 million year-over-year, and net income doubled and ended at 23 million. And for the full-year outlook, assuming that market conditions do not worsen, Then we reconfirm our top line and EWA growth for the full year.

And on the watch now through more details on the numbers. Here we go. Very good morning also from my end. Starting with the key figures. First semester busier compared to last year. In the comparison, happy to see all in the green. So all in improvement compared to year over year. In the top-line book, orders and sales growing year-over-year by 5%. Orders above sales, which could lead to an increase of our order book, landing at €548 million, a year-over-year increase of 2%. Gross profit margin landing at 40% on sales, 0.3% is points up, supported by a better product mix where you have higher picture sales in there, higher software sales in there, but overall, I would say, also supported by new products which we launched. And then, on the other hand, we did have some impacts from the tariffs, which primarily had an impact as we did not immediately calculate this through in our sales price increases on the order book, but we've been able to also have that concluding on a better cross-process margin. We did meanwhile also, and this is a continuum, contain our OPEX stock. Year over year, actually, those are 5 million lower. And the dark landing has a net of 14.8 million, about 13 million higher compared to our stock. Policy cash flow, 21 million, including 14 million of OPEX investments. Working capital lending at 12%, which is at 16%, as we will note on that in a later slide as well. Net income lending at $22 million, $14 million higher or in this study compared to the last year. Then we look to a more regional overview, or I would say the angle regional and regional actually, and what this does also mean is America is about half of our sales. I mean, we have actually seen as much level sales, 10% of orders, or some lower, 4% lower. India, 5% growth year over year, but they're nice to see that our orders and the level for order book have increased 77% compared to last year. So, it's really on a rebound. So, reassuring to see if that's one really out of the beginning of the year already. That was also already in the first quarter. In fact, some more sources tell us the lower 7% did have an improvement over the second quarter compared to the first one. Or just 3% also there. from COVID in the first quarter from better already in the second quarter. From a decision point of view, healthcare 5% increase year-over-year, which is driven by surgical annuality, in particular in the Americas. And, yeah, nice to see, and that's a positive for example of profit to have more software in the mix of policy roles. Enterprise, 5% lower compared to last year, quite an, I would say, opposite momentum there. There's a really rebound, double-digit growth here over the years, both in Guinea and in the Americas. Control room is lower compared to last year, impacted really by, I would say, uncertainty and then promise and decision-making in the U.S. Yeah, links to the geopolitical situation over there. And we did saw, and that was in particular in the first quarter already in the Middle East, LED going down hardware, which in Vientia is our strategy to slightly or gradually go over to software only. But of course, we would like to see it more, I would say, equal. But that is good for the margins, but top line-wise, it was a lower year-over-year impact. Entertainment, really nice on both businesses, actually, in there, both cinema and immersive experience. Year-over-year center, some growth in sales and delivery across the region. EBITDA low compared to last year, so with a climb from 8.1% EBITDA margin on sales to 10.6%. Higher sales always help add a better margin, yes, of course. So margin impact there, we offset our explain, we did offset to the better product mix, the impact from the tariffs. We controlled our OPEX. R&D lower than last year. Last year was at a kind of peak, where we really had a lot of investment, also linked to multiple new products and productions, which we have then been able to do successfully. We do contain and we do keep on investing in our product roadmap, and this is between over 13% of sales in the first semester of this year. When we look at the end-to-the-nose maybes, On currency, then the first semester does not really have an impact on our figures. Here on sales and on EBITDA, for instance, the dollar average used to date landed at 1.01, which is in line with last year. For more details on net income, that's actually the extra EBITDA commission for year-over-year 13 million. The on-and-off income has been able to even add to that amount another two. So with that net income being 14 million higher compared to last year. Depreciations and amortizations are essentially stable year-over-year. Destructuring is lower, about 5.8 million lower than last year. So limited to 2 million, which are layoff costs and diverse organizational efficiencies across the organization, which we started last year and some continuities here, but more limited. Effective tax rate remains optimized at 18% of 2020. the off-sales of property for tax. So, in that sense, in line with the previous years. Free cash flow, 21 million, up year-over-year, around 7 million. Latest operating cash flow, 45 million. So, this is EBITDA minus the layoff of the restructuring cash out. Networking capital on the free cash flow compared to the beginning of the year, you will see this one is flat, so net operating cash flow is the same as across. Working capital landing at 12.2% of sales. When you look to the working capital nominal, that was a year ago, mid-last year, and this has been lowered to 50 million, which is down 29% compared to last year. which have been primarily lower-end inventories. DSOs, DPOs are stable and in balance with each other, so that's how we like to see it. Inventories do remain a focus area, as we further want to improve on our terms. Capital expenditure investments, $14 million. Last year, same period, over $19 million. In the 14 million, cinema as a service is a bigger amount, around, it's about 7 million. And then we started on the rebrand here in Portrait of an Automated Warehouse, which is also included in there, and then the recurring investment. Return on capital employed, landing at 15%, 5% up year over year, with a bit of a dip but also lower capital employees, including in their lower working capital compared to a year ago. Net cash ending at 182 million. If you compare that to a year ago, then this is 10 million higher. If you compare it to a year and last year, 77 million lower. This is net cash, net assets. We had about 100 million cash out relating to dividends and then the share buyback. The share buyback has been concluded meanwhile to the full 60 million in the beginning of July. A word on what also keeps us busy is the mitigation of trade policies and currency exchange and we have quite some I would take questions also around that. We thought it might be a good idea to give a little bit of a whole review on what is the impact for us and how are we mitigating those. So, with respect to the great status, this is actually the current view. We don't have a glass ball on how it might change, but that's anyhow how it is for today and how we are dealing with this situation as it is. So we have quite some products actually meanwhile being exempt at this moment from tariffs, but certainly not all. And where we have the most impact actually is on projection, where we have a 10% coming from Europe and then the 37.5% is coming from China. And then on the healthcare displays, 20% is coming from China. How did we mitigate this on a high-level summary over the past month on that? Make use of the factories which we both have in Europe and in Asia. So relocating where that makes more sense than at the beginning of the upcoming religious to the US to also make sure that we have some more inventories over there in view of the pre-tariff plan, we did adapt logistical flows, and then for what we cannot mitigate, we offset that by increase of prices, which comes with a certain lagging effect, as we still had orders and order books to do that also. When we compare this to the competitive situation, actually, anyhow, it is an important piece for us as the U.S. is a large country for us. But when looking to the direct competitors, then actually they all fall in the same or even worse space than we are. So in that sense, not having manufacturing in the U.S. So in that sense, we are making use of our manufacturing footprint, which we have is the most important. With respect to the currencies, as Shorty mentioned when I was commenting on the EBITDA waterfall, currencies did not really have a material impact in the first semesters, as for instance, the US dollar landing at 1.08, which in line with last year. But of course, gradually, the dollar did weaken, and that's also over currencies, actually, except for the euro. So, If we assume that the rates at mid-year would stay the same towards the end of this year, this would mean that this average of 1.08 will become 1.14 on a full year basis, which is then, because last year the 1.08 stayed the same for the full year actually until the end of the year, so that would then be a change year over year of 5.5%. which just has an impact on our EBITDA to the tune of 78 million of EBITDA. This is a line, actually, which we also disclose in our annual report. In our report disclosing, if you get to that page, 10% year-over-year, which implies about 15 million of EBITDA. So, it is about the half. This is included and taken into our guidance. which we confirm and which we almost confirm again. On the litigating actions, the most powerful of course is natural hedge. So this stays in the range of 30 to 75% where we can balance the currencies purchases with the sales. On hedging contracts, we have balance sheet hedging. which then also contains for fluctuations on AR and AP, etc. And then the remainder is an exposure to be dealt with. Looking to our non-financial PTIs, we're really happy to see a further improvement on those as well. And we've taken two particular ones. Our EPO-labeled revenues landing in the first half to 70%. Up first to the 68%, which we had on a full year last year. So, yeah, on schedule, actually, towards the 75%, which we had as far as actually for this year. New products and productions, which we launched also over the course of the first semester, all had an A eco-label or higher, or in the white basket. It also helps, of course, in the product, but also in the software. products which we have. Every year, as the regulations externally get more stringent, we also update our own methodology, so that is taking into account all the different regulations, which we also have an audit stamp on, and so we are happy to see that happening. The lateral motor score from our customers, so we do a broad survey twice per year, so they are again now at mid-year, getting to a score of 56 for the first semester now, which is 2% higher than scoring over the full year of last year. So, a nice one there. Anyhow, we always want to exceed the 50, so that, yeah, we think they largely exceed, so happy about that. But also, yeah, very much learning also from the feedback, which you can always get through those surveys. Very large improvement across, actually, the different business units. And then this has now changed to an open channel for meeting experience, getting even more feedback compared to before. So, yeah, working on all of those from our customers and taking those.

And so with that, I'll give you a brief update on the business performance. So I'll start with healthcare. So strong performance in healthcare, all the school kicks in percent, sales 5%. FDA landed at 12.5% of sales, which is 2.7 percentage points up compared to last year. Learning and diagnostic imaging, so strong demand there, and that was especially in pathologies. So we see the pathology market really accelerating, but also in mammography, where we, last October, we launched our new flagship OneLook mammography medical screen, and that's doing very well in the market. We had a fostered start in sales in diagnostic imaging in the Americas and in India. That was, for instance, also driven in the UK, where we saw teamwork of women's families. They come in cycles, and last year we had quite a few of those, this year a little bit less. So that basically slowed us a little bit down in sales in the first half. South Asia performed well, but China remained low. We see their slow government investments in healthcare and as well price competition from the local Chinese competitors. As I said, digital pathology is really accelerating already. So it's not only in the display, but also we launched actually last month in June a new software platform. It's called SlideRise QA. So this is a Barco-developed AI-powered automatic inspection tool to identify quality issues in the pathology flow. This actually increases the operational efficiency from sample prep to the review of the pathologists in this end-to-end flow. This was launched in June, and it gets quite some attention, and we're bringing this to the market now. We're also very proud, because it's an AI developed by Barco. And in general, the whole diagnostic imaging roadmap, we see, and we're adding more and more workflow and software applications to differentiate ourselves in this workflow. Now, there is one example here. We launched also at the beginning of this year, Connect, connected stairs in diagnostic imaging, which is actually a smart service tool, which guarantees the lifetime of the natural displays during the lifetime. So the possible ownership actually to extend the lifetime of those displays, which is one example of what we are doing from service and software and recurring revenue perspective. For surgical and modality, we saw a right-hand first half, basically double-digit growth as well as orders and then sales. That growth was mainly driven by the Americas, and has also led to the sales of our Nexus platform in the Americas. We see this growth also in India. APAC, again, here remains a little soft, mainly driven also by China. The nice growth that we see in Mexico and in our software platform is partially offset by a weaker performance in our modality displays, especially over here in China, where we see also price competition from local Chinese competitors. And for the rest, also in surgical and modality, we are expanding the roadmap with more high-end displays, so a surgical display, voice-composed surgical display that's coming to the market at the end of the year But we're also, on the Nexus platform, we're adding a mid-segment or a more compact version for mid-segment. And we're adding also compute to that Nexus platform so that we can run real-time AI use cases and software applications during the versioning on that platform. When I then switch to enterprise, so in enterprise, all the splits and sales are already minus 5%. We landed in the area of 8.6 million, which is 8% of sales and 3.8 percentage points up compared to last year. But again, a big contrast between two businesses in this region. At first, there was a meeting experience where we saw double-digit growth. That was, of course, also because the channel inventories were normalized compared to the high channel inventories we had at the beginning of last year. We saw the growth, especially in India and the Americas. We are maintaining our leadership position in the wireless market, although we see that market declining. Meanwhile, we are in full development of our new ClickShare platform that is a completely new operating system, so it's Android-based. It will be also a scale-up in portfolio. We will not offer only BYOD to the wireless version, but also a root system version where we collaborate with Microsoft to get that on the market. We will also expand the form factors and the portfolio from DBLR to all of our display to modular systems. And the first releases on this new platform are due in December of this year. And then controls, more challenging market conditions, I mentioned it already, can definitely be driven also by related projects in the US. There is a status and the uncertainty around the status definitely play a role in government standards. and also some price competition, every deep price competition in the Middle East. Meanwhile, we brought Control, which is our operating system for control rooms, already more than a half year ago on the market. This is a platform that is doing very well. Today, 35% to 40% of sales is coming from this control platform. We're adding features as we go, so this is complete roadmap that we continue to develop on this platform. On LED, so as I mentioned already, we focused our own development on LED. But meanwhile, we have basically closed the partnership with three major LED players, two in China, one in the US. They will provide us the latest generation of LED panels, and we will augment that with our state-of-the-art LED image processing system. So, by bundling these packages in the future, whenever an LED package is needed in control rooms with maybe also an immersive experience, we basically will step into this partnership to be able to deliver to our customers. And then, on entertainment, so it goes here. So, orders up 3%, sales up 10%, because all regions involve business units. NBA landed at 10.6% of sales, which is 47% which goes up compared to last year. In cinema, very healthy climate, so after COVID, post-COVID, and the Hollywood strike, we see a very good movie slate actually now, and so already the past month, but also through summer, through the rest of the year, and also into next year. That, of course, resumes then the plan to lay the replacement frames, Today, just to give you an indication, about 30% to 35% of the installed base is laser projected, but all the rest still needs to be replaced over the coming years. Barco has a capture rate of more than 60% in this laser replacement base, and today Barco has installed more than 45,000 laser projectors in the field, knowing that there are in total about 70,000 screens. We are also at Simharkon, which is the biggest cinema conference which is happening in April. We commercially launched our new generation of ATR light-steering laser projectors with quite some success. We have a very nice overview building up, actually, on this projector. We also take care of, actually, the movie Slate in ATR format, so all blockbusters and more than 35 to 30 movies line up that will also be able to and then in HDR format on the particle laser light screen projector. For immersive experience, definitely solid growth in the first half. Strong performance against all the regions here. We have invested here in our own mid-segment build, that is our i600 projector. We launched it already more than a year ago, and actually it's getting a lot of good traction in the market, especially also in theme parks. Meanwhile, our flagship 3DLP projector, which is the QDX, we launched already the first version of that at the beginning of the year. That is the place in our older QDX projector. And there are two more versions coming, one this month and one at the end of this year. And our long-lasting encore 3D platform, our live event video switcher, very high-end, We brought it to the market. We had, of course, a big order book there. We shipped more than 350 systems in this quarter. And again, order book continues to fill up with Encore 3. And we're very glad to actually brought this product with a little delay to the market. And then for outlook and closing, I mentioned already in the beginning, maybe just first to start, what is our focus for the remainder of the year? Of course, navigating our way through the macroeconomical challenges that we see, what's coming is very unpredictable at this point. But for the rest, we stick to our strategy. And what is our strategy? We're expanding in adjacent markets where we can. Just, for instance, pathology, theme parks. We're strengthening our position there. We're completing our hardware portfolio where we believe it's needed. Immersive experience is a very good example of that. Then, of course, we have many new product introductions. We have already many. There's still quite a lot of them coming. And they help us, of course, to gain market share. It's good for our margin. Some of them are replacement products. Some are add-on products. but we continue with a stream of new products in the coming months. We have more and more software that we basically add to our hardware, or even like in control rooms, we basically go with a full software portfolio. For the rest of the business units, we add it to the portfolio as a key differentiator moving forward, and many of those are actually AI-based. And then last but not least, for our gross profit margin, we continue basically our focused factory strategy And then in China, local sourcing of components to make you have a positive impact on our growth growth. And then for the outlook, again, assuming that the market situation is not worsening, we basically reconfirm our full-year outlook, complying growth and ABA growth. And with that, I hand it over to Ron's Q&A.

Yes, thank you for the presentation. We are ready to go into Q&A session. If you have a question, please raise your hand virtually. You can do that by the hand icon at the top of your team's window. And I will unmute you one by one to ask your questions. Please, two questions at a time. If you have more questions, you can ask me again. And the first question will be for... Matthias Marhals, you can first unmute yourself and then ask your question, Matthias.

Yes, hello, good morning, Matthias Marhals from Kettler Sugar. Can you hear me?

Yes, good morning.

Yeah, good morning. So the question from my end may be the impact of sales on the gross profit margin. Could you maybe quantify that and could you give us an idea if there's still a headwind to be expected in H2? That would be my first question and then the second question is on the buyback. I see that recently, there's good results and there's outlook for more growth, I would say, so why not buy back more shares? There's clearly room to do it with a 180 million net cash position.

I'll start off with your first question. So the impact on the margins was lower than 5 million in the first semester, which was primarily done, of course, in the second quarter. And then to go, I would say, there we go for in the remainder of the year, you actually, based on the current strategy, you have that fully or really largely open platform financing. With the different changes we did, of course, on changing factories, changing agencies, and then also pricing changes we have implemented. And there we are.

And then on the share buyback, so the reason why we did the previous share buyback was indeed because we had cash. We also think we're undervalued for the expected results to buy in. Obviously, for our own option program within Marko, we completed that program as we said. We haven't used the cash, where at this moment we have not decided basically to start a second program on share buyback. the shares are now in tragedy what we do with them is a decision of the board that could be we could use them for M&A we could also cancel them that decision on the current buyback is not done decision made for a new buyback is also not done but indeed we have the cash and that could be something that we can decide as we go yes we can hold the options open there

Okay, thank you for those questions Matthias. Next question is for Matt Heffeling from ING. You can unmute yourself before. Yes, thank you. Actually, my question is about growth. I think growth in the first half of the year was still quite okay, also given the easy comps in the first quarter. And looking ahead, if you look through the divisions, where do you expect growth? Where do you have maybe a bit higher visibility versus visibility very low at this stage? Maybe if you can talk us through.

Okay, so yes, of course. So let me maybe start with entertainment. I think when we look at the entertainment market, we saw cinema as immersive experience within healthy market conditions. So as I explained, the land-delayed replacement wave in cinema is in full swing. On top of that, we've launched our new factory projector, which is doing well, and also here we're ramping up the factory to ship those and to basically follow up on the orders there. Also, looking at the forecast for movie slates, which is typically a good indicator for cinema, that looks actually very healthy. In terms of experience also, as well, image processing and the projector market are doing well. I think with the new products that we have been developing for the last few years and are now on the market, we have a very good momentum also against our competitors. This, of course, also allows us to take market share there. Just to give you an indication, in the first semester on the 1DLT, so this is the smaller projector range, we were marked biggest in the first semester. So that was actually another good indication that we are taking market share from some of our different types of players. And also there we see the outlook continuing actually to be positive. In healthcare, again, here we see in diagnostic imaging this new product that we have brought to the market in momentum. That is definitely also continuing there is also a matter of our manufacturing making sure we can We can continue to produce at our use the products to ship them out. So part of that is on us. But we see, again, good momentum around nomography. Pathology is definitely an area where we spoke to you in the past. Pathology is where radiology was 10 years ago. So this digitalization way still needs to happen in pathology. And we see this actually happening. And we are actually in that whole end-to-end flow there from the beginning. Started with displays, but now also expanding in the value chain of pathology, and I think that is definitely helping us a lot. And in surgical, I think the next few products are doing very well. There we are absolutely developing new features, new models to basically expand our market reach, but also to fight against maybe or any form of participation that happens on a regular network in an operational role. So we need to continue to basically invent their new features, and that's what we're focusing on. The modality market is a little bit tougher. Again, as I explained, it's pure price pressure there, and there is our China play. That is our strategy there, because we fight there against Chinese competition, especially in China, but also starting actually in the rest of the world. And that is something where over time, basically, we see progress actually in bringing the cost of our modality displays down with local sourcing of components. And that is our answer actually to that competition in China. And then for enterprise, Glitcher, again, the market today, The expectation for video conferencing is that that market is growing around, let's say, 5%. But you see a difference between the wireless conferencing solution and the room system solution. Wireless conferencing actually is decreasing, it's declining slightly. So there we would see a growth of maybe 3% market growth, while room systems are around 6-7%. So, we see also consolidation in this market. So, our competitors, they have a very full portfolio when it comes to video conferencing equipment. So, our strategy is here threefold, actually. One is we have to change our operating system to an Android one. We're working on that. Second one is we expand wireless offerings also into room systems offerings. We're doing this, of course, with a very big partner, which is Microsoft. And also that one is happening now for the first releases in December this year. And the third one is we will also increase our portfolio in the meeting room. So not only wireless offerings and green system offerings, but also the form factor, from video bars to all-in-one displays, so that we basically have a similar broad set of portfolios than you would think some of our competitors have. So that's our answer to that market situation in video conference space. In control rooms, we know we have a very strong operating system. That new platform we brought to the market is actually our ambition to make that default operating system in control rooms. And we're definitely gaining momentum on that one. But there, of course, our heart rate strategy that we allowed now already more than a year ago is that we will harvest on the RPC role. We will continue to offer the LCA role, and we will continue to offer our LED portfolio. But since that is in the renewal cycle, every one and a half to two years, you see that those technologies, they get old quite quickly. So that's why we basically said, okay, our focus in development is on software and even workflows and AR applications in the future. But where we need to bundle our software platform still with the hardware, with the wall, then for MD, we basically have now this alliance that is going to help us. And where we will still put the workbook for us. which is the high-end image processing for LED walls. We don't know that actually with the LED panel from those three partners. But yes, there it was, of course, the new top line will be affected because part of that top line was hardware. The question is how fast will that fade out? But meanwhile, control needs to pick up, maybe not the top line, but especially in bottom line. That is the key about our Are we continuing?

So a lot of positive evidence to go for a good second half. Last year, because of your question and for your model, I assume it was also on the growth and the second semester. So we did confirm our full year growth. And you can all calculate. So this also requires a growth in the second half. And the second half is typically higher than the first one last year. We did about 77 million more in the second semester than the first semester. So, in that sense, we are up for us to do that again. With that, I will complement most of all of the things that you have said. So, in that, going for that, and meanwhile, we are then also having to absorb, taking into that guidance, the impacts from the sudden, which is done in the headwind. Which is done in headwind, not a tailwind, but a headwind. Is that the answer to your question?

Yeah, that was a very elaborate answer. Just maybe a small clarification on the latter part, you said with the currencies, because I think your guidance stays light for light, so I assume that is at constant currencies, but I also hear just in your answer that you also expect some growth even with the currency in the reported numbers. Is that correct?

Correct, correct. Assume the currencies as they were at mid-year to continue, we did not like that, but it is automated and to offset that with all of the things which are on the exchange. Okay, thank you very much.

Thanks, thanks a lot. Thank you, Mark, for those questions. Mathias, you can ask more questions.

Thank you. I still have my hands up, but maybe follow up on Flickshare. I understood that you said that the market growth from the wireless would be 3%, but can you maybe elaborate a little bit on the sellout of Flickshare? Because if I recall correctly, if you weren't, it would still down. Is this still the case? And what will drive the anticipated improvement in market growth?

Yeah, so you're right. In the first quarter, the sell-out is still negative. And I think we saw slight improvement in the second quarter compared to the first quarter, but still negative. where it was still like no single digits in the first quarter. It started going into single digits in the second quarter. It's also regional distances. So in the U.S., it's positive and better. In India, it's a negative. And outlook there, I think, again, this will stay large. So when you have room systems and you have wireless systems, both will continue to basically grow in the market. And at one point, if the market picks up, then you see this gradual improvement also in wireless. Will it be as fast growing as room systems? No, we don't believe so. We don't believe so.

Okay, fair enough.

Thank you. Okay, if other people have questions, please raise your hands and I can unmute you. At the moment we have no other questions. There is Treon from Derenberg. Treon Rees, please ask your question and speak on YouTube before doing that.

Hi guys, Treon here from Derenberg. Good morning. I just wanted to ask about the new ClipShare product, the ClipShare Hub. just if you could talk about your sort of expectations for that and what you think that will bring you, I guess, for next year. And then sort of related to ClickShare, in terms of the margin, can you talk about what happened to the margin in H1? Because obviously you have broken ClickShare, declining control rooms, but obviously ClickShare being more profitable, I might have expected that the EBITDA margin, I think, in enterprise to improve by more. So I'm just wondering, are you seeing sort of decline in crypto margins, or do you feel a bit more colour in what's happening there?

Mm-hmm. Yeah. So I'll take that. I can answer.

Yeah, yeah, yeah. I'm expecting more. So we are investing quite a bit, I would say, on the product portfolio to bring on the market in this crypto hub. So in that sense, it's not that average growth margins of Kickstarter have declined. It's really on investments, in particular than in R&D, which we go full force to have this product ready to be shipped out of the end of the year.

Yes. So, like you said, it's a big investment right now to bring the Kickstarter hub on the markets. What type of platform is this? This is a very new platform co-developed with Microsoft. So it's a platform that Microsoft is actually wanting to have all their suppliers going and be consistent on that same platform. We're one of the first adopters, so it's a lot of work involved actually in getting this on the market. So that's one. Secondly, we launched Clipshare Hub officially in Infocomm in June. That was the official launch. It was quite successful. We actually won a few awards, actually, of most successful new product introduction. So that's all very promising. It typically takes a little time because now we're going through certification with Microsoft. That is then by end of November. And then we basically certify the hub first. And we can bring it officially into the market and into the channels in December. Typically, it takes six to nine months for the channels to really get into full mode on these new products. So we're preparing the channels as much as we can, but we will only be able to deliver the first version because again, the new development, the new form factors coming up next year. But it will take in 26 a little while before the channels are completely up and running. So next year will be in mixed years. So we will continue basically with this product that we have today, so our current product. And we will, of course, gradually start introducing also the new product.

And that's what it will bring us on next year. It's a little too early. It's too early.

It's not fine. Yes. Okay, excellent.

And just maybe a second one, just on the, you mentioned these first orders for the light steering projections, the ATR light steering. Can you talk about the revenue models? I think we've mentioned in the past maybe a service or recurring element, and what does that mean for profitability compared to your existing portfolio?

So, yeah, so it's true. So because of the concept of the light steering projector, so it's more than just a projector, as he always says, It also comes with a software suite that basically helps to reformat the movie content into an HDR form. So this is a software that we also developed. It's now operational in all post-production houses. And that basically means that we have a little bit of bigger share in value chain of cinema with this new concept. So that's why from the beginning we said as business model, there is a part tactics and there is a part security for that software. And this is basically how we're going in all the discussions and in all the contracts that we have signed today. There is always a recurring piece. It varies a little bit. I mean, today we have a few more. We can go from a yearly software license to ticket sharing to a paper show. So there are a couple of scenarios there. Over time, we might be able to stream that into less flavors. But today, there is always a returning piece, which, of course, over the total lifetime of the projector, the value of that projector for Barclay is going up significantly. You want to... Yes.

Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes.

And on top of that, maybe to add, it's also, of course, the whole ecosystem who's really busy around HDR, also the seniors, because it is important, of course, that they endorse this new format, as well in the DCI spec. But also, of course, we need to have the movie players in HDR format. And today, we're managing that extremely well. So it's all basically, especially you, you need to go see Avatar 3. on Lefty Square, on our system there. It's going to be an experience. Yeah. Is that a place for avatars? Oh, don't wait for avatars. No, no, don't wait for avatars. I don't know. I don't know. That wasn't very important to me.

Just to see if I can sneak one last one in, I guess no one else has this HDR, you don't see Christie or NEC with any competing products?

No, there is maybe some earlier research at Christie, but absolutely not. The only HDR format that is out there today is an LED wall. So, this is mainly, again, coming from China. An LED, like your TV at home, also has, of course, it's capable to run HDR. But then you basically go through an LED, very big screen in a cinema theater, very expensive technology, not yet completely up to the performance point of what a projector does. Today, from 70,000 screens that are out there, there are 100 LEDs, of which 70 in China. So you see, that's the only other form that can actually deliver a film today.

Excellent, thank you. Thank you, Theo. Other people in the room have more questions? Please, you have the opportunity to raise your hand right now. We have some more questions from Mark Heffeling. Please, Mark, unmute yourself and you can ask your questions. Yes. Thanks, I was also wondering about the build up of the margin in the second half of the year because in the second half of the year again there are going to be a lot of moving parts. You already discussed the derby impact which you should be able to offset in the second half of the year but you will have quite a significant currency headwind in the second half. Normally the second half is always better than the first half and you had a very good margin improvement in the first half of the year. maybe the building blocks that you see for the second half, and if you can also improve the margin in the second half year over year.

The building blocks are the typical ones. The extra top line always helps. The extra top line and the mix. The mix, for sure. So actually, we got some updates to do so to get to the same level of gross profit margin as we had on the previous year, which we are working towards. and then operating leverage anyhow on all of the different aspects within the margin and also on the real OPEX lines. These are really things which we all work on. Certainly a big lever as product makers, which is continuing to be on the right path.

So it makes more software, but also new products, where typically you build up momentum and you have your competition a little bit behind. you can gain market share so that's definitely also a very important aspect of bringing products into the market.

Okay, should that be possible to get device up second half versus second half last year? Because last year you also had a sort of one-off positive effect in the second half.

Yeah, that's true. On the EBITDA margin, we are going to be higher than on a few years. So, in that sense, yeah, on this non-recurring issue happened this last year.

That didn't happen.

That didn't happen anymore, but let's say that from a nominal point of view, we already made that up in the first semester. And I already got about 13 million higher than last year. So, in that sense, on a full year, that's where we can guide it. And then for the rest of the year, it will be all of the things which you mentioned, then to obstruct any impact from... Thanks, great, thanks.

Thank you. Thank you, Mark. Mathias?

Yes. Maybe on healthcare in China, I saw that the Chinese government will exclude European companies from centers for medical device products in China. Given your local setup, is this now a threat or is this an opportunity and why?

Yeah, good point. So, because of the local setup, we are not in that situation. So, that's good news for us, of course. Now, again, there are Chinese competitors who are also making medical mobility displays, for sure. So, we still are on a fight with them. So, we have to work on getting our costs down. So, that's a given. But we don't regret there. If you look at our customers, of course, you have the Chinese customers, so they are playing in China, but you have also production customers that make use or that deliver their systems to the Chinese market. So most of the ones that we know have also local production in China, but they could, of course, be affected. So if we indirectly deliver to them and they think that their China sales dropped, that could have an indirect impact. But for what he could basically so far, that's mitigated also from their side with Chinese local manufacturing. So I think in principle, it should be minimal.

It should be minimal. Okay. Thank you. Thank you, Mathias. Other questions from the room at this point? Okay. If there's no other questions, then we will conclude the call.

Thank you for all the questions. The recording of this call, by the way, will be available on the website from this afternoon. And before we close, I would also like to invite you for our Capital Market Day, which will take place on October 23rd here in Kortrijk in our headquarters. And we will host our analysts, but also all institutional investors for a day of strategy updates, of course. Many product demonstrations will be there and you will have the opportunity to meet management. So please save the date, October 23rd, and invites will follow soon in September. And then for today, we will close it here. Thank you very much for your attention and have a good continuation of your day. Thank you very much.

Thank you. Thank you.