Barco Nv Unsp/Adr

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.