Barco Nv Unsp/Adr

Good morning, ladies and gentlemen. Welcome to this conference call for Barco's first half results for 2024. My name is Willem Fransul. I'm here in the room with our co-CEOs, Charles Baudouin and Ann Stegen, and also with our CFO, Anne Sender. Anne Stegen and Anne Sender will take us through the presentation of the results this morning. And this presentation is also available on our investment portal on the website. After the presentation, there will be time for questions. I would now like to give the word to Om to take us through the slides.

All right. Thank you, Willem. And good morning, everybody. I'm going to start with a summary of our first semester results. For sales, we landed at 434.5 million, which is about 16.6% lower than last year. We do see sales significantly picking up already in the second quarter, especially in the Americas, where we actually see for the second quarter year-over-year sales growth. Order book is at record high, 533 million, and that includes already orders for new product launches that are still going to come in the second half of this year. Book-to-bill, more than one. And also eco-labeled, so revenue coming from eco-labeled products increased with four percentage points to 64% of the total revenue. EBDA landed at 35 million, which is 8.1% of sales and 4.4% lower than the first half of last year. Gross profit margin was pretty resilient. So we actually saw improvements in healthcare and entertainment. but that was offsetted with a decline in enterprise because of the lower click-sharing sales. OPEX is under control. R&D, we kept on investing to support, of course, new product introductions for the second half of the year. Free cash flow landed about 15 million. That is a step up of more than 38 million since last year, and the net income is at 9 million. Now, the outlook for the full year, we expect to resume growth in the second half. Although the visibility remains challenging, we expect growth for the second half over the second half of last year in sales. And we also expect a strong recovery of our EBDA for the second half of the year, which is now expected to land for the full year between 11% and 13%. So we started the year slow. We had a slow first quarter, but we see significant improvements in orders and sales for the second quarter. As I mentioned already, especially for the Americas, where we for the first half are flat in sales compared to last year. And we see the growth in the second quarter. This growth is mainly driven by our diagnostic imaging business unit, where we see solid performance and also strong demands for premium portfolio. We see also in the first quarter, we saw softer demand in entertainment, but that demand has been picking up in the second quarter. And also order and sales for our control rooms, driven, of course, by the geopolitics, but also by the need for security and data insights, has been growing year over year and quarter over quarter. EMEA remains weaker, so the investment client, customers delaying actually their investments, also the decision-making from lead to order, from order to sales, is slower in EMEA. We also had, for our meeting experience, higher than usual inventories in the channel at the beginning of 2014. And of course, because the market is still in decline and we're growing actually in line with the market, but it took us longer to destock that inventory in the channels. Cinema sales was also weaker in EMEA. That again had to do with the Hollywood strikes and a limited movie slate, which we expect to pick up again towards the end of the year and especially also next year. And also for EMEA, we see growth in control rooms and also an increasing share of software in our portfolio there. APAC was down 13%. We also see pickup in orders for the second quarter in APAC. China remains flat and we see actually stronger demands in cinema already. Now, we had also a very high comparison basis, especially for entertainment compared to last year. So that's also a reason why APEC sales is a little bit lower for the first semester. And also worth to mention is that with our strategic transformation in control rooms, we abandoned several countries' markets in APEC, including China. And that is also basically impacts a little bit our results for APEC.

I'll hand it over to Anna. Thank you. All these figures roll up here to the group figures on the figures as such. So orders landing in the second quarter at 243 million and sales 238.6 million, which is compared to the first quarter, 10% up on orders and sales was up 22%, second quarter versus first quarter. So to speak, let's call it the dip and the softness in the first quarter has picked up again and is largely improved. Orders above sales, which means that we have been able to build up our order book to the tune of 38 million and a half, including in there also indeed pre-orders for new product launches, which will be shipped in the second semester. The visualization of our EBITDA versus last year. So last year was at 12.5% EBITDA margin. First semester this year at 8.5%. Needless to say that the biggest impact is coming from lower volumes, lower sales. Cross-profit margin has been quite resilient. The negative impact is linked to lower sales in enterprise and in particular in click share. where we have high margins. When you look to the gross profit margin in both entertainment and in healthcare, there we see an uptake. So all of the better product mix, more and more software, also the actions which we have done throughout the years With going to China, the focused factories are really yielding results. We have been containing our OPEX. If you compare OPEX first semester versus last year, this is down 6 million. This is despite, or I would say, we did not cut on R&D investment. with a clear eye on the new product introductions, which are upcoming. Where it is coming from, it's really a whole set of cost-contained measures. The control rooms reset last year, clearly has its impact now. And then across, I would say, attrition, which has done not-or-had-count actions. which has done the offsets with organizational efficiencies. If we look to the total headcount mid of the year compared to the beginning of the year, then we are 170 people less direct, indirect, and direct people, indirect people, 120 people less. So landing with that at an 8.1% EBITDA margin. Taking it to net income on slide seven, starting from the EBITDA of 35 million, depreciations are higher than last year, as expected, including in there also depreciations on cinema as a service deals, which we are having. Restructuring costs 7.8 million, including the last phase of the strategic review and research started last year on control rooms. including the closure of the Changping factory, which was already at the beginning of the year, and then numerous diverse actions, but also positive impact, including integration of Synionic into our Barco activities, where we now have again 100%. Interest and taxes, interest positive. Taxes, 18% last year, lower number on a lower EBITDA figure, of course. and then landing to an income of 9 million euros. Moving over to free cash flow, like Anne indicated in the summary, landed positive on the first half, rounded to 15 million, which is a considerable step up compared to the first semester last year. and the main step-up is linked really to the lower working capital. Gross operating cash flow, 30 million, which is EBITDA minus restructuring cost. CapEx, we kept at 19 million, which is quite in line with last year, where we had 21 million. Two bigger items included in there, cinema as a service contracts, which is good for 6 million. Manufacturing footprint, we opened the WUSHI, factory in China, included in their 5.6 million, and then more recurring profits included. The working capital has been reduced compared to the beginning of the year, 9 million, compared to over a year ago, 37 million rounded, though despite, in all honesty, quite still a lot of opportunities to further decrease that, and particularly into the inventories. We saw this declining or decreasing as of the second quarter, but it really remains a focus area to further go down with the improved top line in the second semester. Roche landed at 11% net cash at 173 million rounded, which is 70 million lower at the beginning of the year, included in there, of course, the free cash flow and then the down dividend share buyback and then the buyout of the minority investor into synonyms. Moving over to the sustainability KPIs and picking out two here. First, equilabelled revenues, so 64% compared to 60% in the first semester last year. So a further progress over there is being set. The measures and the definition becoming more stringent every year. Now also including software and service revenues. So if we would restate or compare apples to apples, then actually we would be at 70%. But anyhow, it is what it is. So the new definition, 64%. And we remain our target for next year to go to 75%. including this more called stringent definition. Driven across BUs and across the different divisions uptake, if you take out two which have a really positive impact, then it's within diagnostic imaging and then within cinema in particular. The new product introductions coming in the second semester will also, they are all equal labeled. So in that sense, we'll take the progress further. And looking to the natural motor score of our customers, where every year we have a deep survey twice per year with more and more replies, with more and more, I would say, substance to it. We do a lot also with the results and any of the comments which we get to really work on any comments of the tractors, you could say so. And with that, actually quite pleased with the further progress on our results. landing to a net promoter score of 52 this year, four points up versus the year before. The largest improvement, so we see it really across the regions, but the largest uptakes are in meeting experience and in DI, diagnostic imaging, and it's also really driven by better points on or even better points on after sales and service. And with that, I hand it back over to you, Anne, with some more color on the different divisions.