Martin De Prycker, CEO 25 October, 2006 Results 3Q 2006 and YTD 2006 Martin De Prycker, CEO 25 October, 2006
Operational results 3Q06 and YTD06 In € million YTD05 YTD06 Growth YTD06/YTD05 3Q05 3Q06 Growth 3Q06/ 3Q05 Orders 533.9 621.8 16.5% 175.9 230.3 30.9% Sales 502.0 528.3 5.2% 171.5 170.2 (0.7%) EBITA 32.9 33.9 2.9% 11.0 8.5 (23.2%) EBITA % 6.6 6.4 - 5.0 Book-to-bill 1.06 1.18 1.03 1.35
Results per quarter in € million
Overall comments YTD Orders growing at 16.5% vs YTD 2005; third quarter in a row with a book-to-bill larger than 1, increasing our backlog with € 79 million, i.e. an increase of over 32% vs end 2005 Sales growing at 5.2% vs YTD 2005 Gross profit margin increased slightly from 40.9% to 41.3% EBITA increasing to € 33.9 million, i.e. an increase of 2.9% EBITA margin declining to 6.4% vs 6.6% last year Development of new breakthrough products for 2007 in medical, projectors for media & entertainment and simulation and video networking for security & monitoring, to allow our organic growth to continue
Overall comments 3Q06 Extremely successful order intake with book to bill of 1.35 Basis for a good 4Q06 and 2007 Dubai mall (2007) order of € 24 million Medical: contract for monthly supply of € 1 million until end 2007 Some contracts are basis for market growth on longer term Avionics display for business jets Strategic contract for new technology projector for simulation Sales comparable to last year, with growth in most markets Strong decline in sales in defense and traffic management Temporary supply chain issues EBITA lower than last year at 5.0% vs 6.4% last year Gross profit margin lower at 39.9% vs 40.6% last year as the volume of high gross margin products (defense, traffic management) is lower Operating cost increasing in R&D to prepare new products
Evolution of results per division in € million 3Q05 3Q06 Growth % 3Q05/3Q06 Sales % EBITA ∆ Sales View 57.9 10.0 52.7 2.7 (9%) Media & Entertainment 46.9 -3.1 49.2 3.9 5% Control Rooms 29.0 21.0 29.8 6.0 3% Presentation & Simulation 22.9 2.9 26.4 7.4 15% Vision 14.3 8.2 13.1 6.2 Manufacturing Services 21.1 -5.8 19.0 3.0 (10%) Eliminations -20.5 -20.0 Total 171.5 6.4 170.2 5.0 (1%)
BarcoView (1) in € million
BarcoView (2) Orders Sales Margins High book to bill at 1.5 Very good orders in Medical, one with a supply agreement running into 2007, spread over next 15 months High orders in Avionics, as part of refurbishment program for business jets Growth in Defense and Traffic Management Sales Sales in Medical growing 14%, in line with market growth, keeping our worldwide marketshare stable in the top position Avionics sales at same level as last year Defense and Traffic Management sales strongly declined vs last year as new projects are not generating volume and some have been delayed by customers due to budget shifts Margins Lower gross profit margin at 42% vs 44.9% in 3Q05 because of lower sales in high gross profit margin products and lower sales volume EBITA margin at 2.7% vs 10.0% last year, as the implemented cost reduction in Defense/Traffic Management does not fully offset lower gross profit margin
Barco Media & Entertainment (1) in € million
Barco Media & Entertainment (2) Orders Very good book-to-bill ratio at 1.72 in all markets, especially in Media with € 24 million order for ‘Dubai mall’ creating strong backlog for 2007 Orders in Digital Cinema growing strongly worldwide Sales Media sales slightly down vs last year, because of focus on high margin projects Events sales growing 10%, especially with new projectors DC sales growing at a slower pace than orders Margins Gross profit margin at 31.1%, better than 26.9% last year EBITA margin at 3.9% better than last year’s loss of 3.1%
Barco Control Rooms (1) in € million
Barco Control Rooms (2) Orders Sales Margins Orders increased more than 9% vs 3Q05 Book-to-bill at 1.06 Sales Sales growing 3%, at a lower speed than last year, but large backlog preparing a strong 4Q06 Margins Gross profit margin at 41.0%, lower than last year’s 48.6%, as our leading position is challenged by competition resulting in price pressure, but market performance remains strong and several actions are in execution to maintain a stable gross profit EBITA margin low at 6.0%, due to lower gross profit and higher investment in sales & marketing and R&D for video networking
Barco Presentation & Simulation (1) in € million
Barco Presentation & Simulation (2) Orders Book-to-bill ratio at 1.0 Order intake 8.4% larger than 3Q05 Strategic contract for new technology projector for simulation Sales Sales strongly growing at 15% vs last year Presentation sales grew vs 3Q05 Simulation sales growing strongly vs 3Q05 Margins Gross profit margin declined to 41.1% vs 44.2% in 3Q05, due to shift in product mix in simulation EBITA margin better at 7.4% vs 2.9% in 3Q05
BarcoVision (1) in € million
BarcoVision (2) Sales & Orders Margins Book to bill ratio at 1.0 Sales declining 9% vs last year Margins Gross profit margin stable at 46.2% EBITA margin at 6.2%, lower than 8.2% in 3Q05 due to volume effect
Barco Manufacturing Services (1) in € million
Barco Manufacturing Services (2) Sales & Orders High book-to-bill ratio of 1.38, preparing for large internal delivery for 4Q06 Sales lower than last year Margins EBITA margin at 3.0%, much better than 3Q05 (loss of 5.8%) as manpower and cost have strongly declined vs last year, thanks to restructuring actions taken in 2005 Contract negotiations ongoing with acquiring companies, targeting transaction to be closed in 4Q06
Geographical breakdown of sales
Key figures Income Statement 3Q06
Key figures Balance Sheet in € million 30/09/05 31/12/05 30/09/06 Accounts Receivable 168.2 188.8 191.0 Inventory 162.9 141.4 174.8 Cash 86.4 106.3 76.4 Financial debt 91.8 84.3 87.8
Expectations Double digit growth in 2006 in orders, showing good acceptance of new products 2006 orders will be more than 13% up vs 2005 2006 sales will be € 735 million - € 745 million vs € 711 million, i.e. 4% higher than 2005 2006 EBITA will be € 59 million -64 million, vs € 52.5 million, i.e. 17% higher than 2005 Investments in new product development ongoing, preparing for continued organic growth by new products to be introduced in 2007 Outlook 4Q06 4Q06 sales between € 207 million – € 217 million vs € 210.0 million in 4Q05 4Q06 EBITA of between € 25 million and € 30 million vs € 19.0 million in 4Q05
Questions & Answers