Barco Nv Unsp/Adr

Good morning, ladies and gentlemen. I'm Karel van den Bussen, Head of Investor Relations at Barco. We welcome you to this conference call on the results of the second quarter of the year and the half-year results 2022. Today with me, and calling in from remote, Mr. Charles Baudouin, Co-CEO of Barco, and here on stage, Mrs. Anne de Sender, CFO of Barco. Both Charles and Ann will now walk us through the half-year results update. Under the heading, second quarter results exceed second quarter of 19 pre-pandemic level, boosting first half sales with 29% and moving to an EBITDA margin of 9.8%. Ann and Charles will provide some extra colors using the earnings presentation, which is available on the investor portal since early this morning. And that's it for the introduction. We'll come from slide three onwards, the exact summary. Charles, the floor is yours.

Thank you, Carl. And to all attendees, welcome. Thank you for joining. The first half of 2022 is now behind us. It has been an unstable and hectic period with international political struggles, ongoing component shortages and occasional outbursts of the virus we have come to know too well. But how well did Barco sail in these challenging waters? The answer is simple, very well. We see a 29% sales growth compared to the first half of 2021 and even 8% above the second half of that year. This strong growth was fueled by an exceptional performance in the second quarter and by double-digit sales growth across all business units and regions. This despite more than 40 million euro impact from supply shortages. Also, the order intake continued to grow, building up to an order book of 538 million euro. The ABDA margin went up 2.3 percentage points compared to the first half 2021, and even 2.7% versus second half 2021, amounting to 9.8%. This was fueled by a gross profit margin of almost 38%, three percentage points up with the second half of last year. and mainly reflecting a favorable product mix. There is a negative free cash flow, mainly due to higher inventory in response to the supply chain constraints and higher receivables based on a surge in sales towards the end of the quarter.

Thank you Charles. As Charles just said, we continue to have a strong order intake, indicating recovering worldwide demand. With an order book of 538 million, we are up 37% year-on-year and up 10% compared to the end of the year 21. I can therefore indicate what we said after the full year 21 presentation. Our order book is at an all-time high level. Also sales performed strongly with a 29% growth year-on-year. Nice to see double-digit growth in all three divisions. We are pleased with a remarkable EBITDA recovery as we have seen it in the first half. This was fuelled by more favourable product mix in combination with improvement actions on cost of goods. The recovery of the profitability was mainly driven by pre-pandemic performance levels in the healthcare and in the meeting experience business units. Apart from the indicated free cash flow decrease, we see a solid improvement in all key figures versus last year. With respect to free cash flow, we do expect to see a turnaround in the second half, but I'll come back on this topic later on. If we now take a closer look at the second quarter of 2022, we can conclude that it has been the best quarter since the COVID pandemic started and that we are getting close and beyond pre-pandemic performance levels. Compared to the second quarter of 2021, we can see an uptake of 11% in orders and a really strong 37% increase in sales. If we compare to the previous quarter, we see a solid 6% growth in orders and 29% step-up in sales. Looking at the sales per divisions, we have an excellent double-digit growth on all fronts, both compared to the previous quarter and year on year. Especially the entertainment and enterprise divisions, the markets that were challenged the most during the pandemic, performed excellent, but also the healthcare sales reached an all-time high semester. In summary, we can say that the second quarter of 2022 has gone beyond the pre-COVID pandemic levels and boosted the overall sales for the first half of the year.