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Results Second Quarter 2003 and 6 months ended June 30, 2003. Martin De Prycker President & CEO August 22, 2003. Operational results Q2 2003 and H1 2002. Results per quarter. in € mio. Overall comments Q2 2003. - PowerPoint PPT Presentation
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22 August 03, page 1Company Confidential
Results Second Quarter 2003 and
6 months ended June 30, 2003
Martin De PryckerPresident & CEO
August 22, 2003
22 August 03, page 2Company Confidential
Operational results Q2 2003 and H1 2002
in € mio Q2 2002 H1 2002 Q2 2003 H1 2003 Growth H1 03 / H1 02
Ordersnominal
190.7 358.3 169.2 327.1 - 8.7 %
Orderscomparable
190.7 358.3 186.4 358.2 0.0 %
Sales nominal
176.1 328.3 158.0 309.1 - 5.9 %
Sales comparable
176.1 328.3 173.3 338.6 + 3.1 %
EBITA 21.9 32.8 17.4 32.9 + 0.1 %
EBITA % 12.7 10.0 11.0 10.6 + 6.0 %
22 August 03, page 3Company Confidential
Results per quarter
0
20
40
60
80
100
120
140
160
180
200
Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03
OrdersSalesEBI TA
in € mio
22 August 03, page 4Company Confidential
Overall comments Q2 2003
• Comparable sales declining 2 % at unchanged €/$ rate versus Q2 2002 (19.1 % decline)
• Nominal sales declining 11 % at actual €/$ rate vs Q2 2002
• Weak economy delayed ordering decisions in April/May, reducing our Q2 sales, but order level picked up again in June
• Book-to-bill ratio very good at 1.07 > 1• EBITA at 11 %, lower than Q2 2002 (12.7 %)
– Price pressure compensated by cost reduction on direct cost. As such, gross profit stable at 45 %
– Dollar has caused a reduction of EBITA of around 4 € million vs last year
• EBITA first half 2003 at 10.6 %, higher than first half 2002 at 10 %, despite 9 € million less profit because of $ effect
22 August 03, page 5Company Confidential
Evolution of results per division
in € mioQ2 02 Q2 03 Q2 02 Q2 03
BarcoProjection 88.7 75.0 11.1 5.4BarcoView 47.8 51.2 7.2 7.4BarcoVision 24.9 23.2 3.9 4.4Barco Subcontr. 22.8 17.2 0.8 1.7Other -8.1 -8.7 -1.1 -1.5Total 176.1 157.9 21.9 17.4
Sales EBI TA
22 August 03, page 6Company Confidential
BarcoProjection (1)
0
10
20
30
40
50
60
70
80
90
Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03
OrdersSalesEBI TA
in € mio
22 August 03, page 7Company Confidential
BarcoProjection (2)• Sales
– Market leadership in events confirmed through strong sales levels both in LED and projection
– Weak sales caused by economic uncertainty, mainly affecting• Control rooms in utilities• Simulation in civil aviation• Fast market transition from CRT to DLP hurting Home Theater, led to restructuring decision• Stand-alone projectors
• Orders– Successes in media US through Logan acquisition and in Europe – Strong orders in control rooms for traffic, surveillance and broadcast put
foundation for good H2– First successes with simulation for homeland security and V&AR in medical
• EBITA– Despite reduced sales volume, profit margin stable at 45 %, resulting in EBITA
above 6 %
• New products introduced– Streaming video for traffic & security control rooms– 2K digital cinema projector (first order received)– Digital projector with i-stereo inside
• Acquisition status– Trans-Lux West successfully integrated in Q2– Leyard delayed because of SARS and unresolved legal
issues. Target closing in September
22 August 03, page 8Company Confidential
BarcoView (1)
-10
0
10
20
30
40
50
60
70
80
Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03
OrdersSalesEBI TA
in € mio
22 August 03, page 9Company Confidential
BarcoView (2)
• Sales– Air Traffic Control performing well, keeping our
market share substantially above 50%– Slightly weaker sales in medical imaging as our
customers are depleting their inventory levels
• Orders – Strong ATC orders confirm our market leadership– Avionics orders strong– Orders in Defense & Security remain low, but market
pick up anticipated for 2nd half 2003
• EBITA– Gross profit stable at 46 %– Profit margin good above 13 %
• New products introduced– Mid range medical LCD flat panel (Nio)– Multifunctional rugged display for defense & security
22 August 03, page 10Company Confidential
BarcoVision (1)
0
5
10
15
20
25
30
Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03
OrdersSalesEBI TA
in € mio
22 August 03, page 11Company Confidential
BarcoVision (2)
• Sales– Textile business performing well, but first signs of
business weakness in systems– Good sales for Machine Vision
• Orders– Order level of textile lower, entering the downturn
cycle in the textile business
• EBITA– Gross profit stable at 44 %– Profit margin very strong above 18 %
• New products to be launched at ITMA 03– New polypropylene sensor– Extended range of on-loom inspection (Cyclops)– New family of wireless data collection & monitoring
systems
22 August 03, page 12Company Confidential
Situation Machine Vision
• Barco has sold its food sorting machine business to BEST nv on July 31 and deconsolidated as of July 1, resulting in a marginal non-operating profit
• Machine Vision had a sales of 8.5 € million in the first half of 2003 with low profitability
• With a 15 % market share, it was unlikely to bring this business to the average Barco profit margin level over a reasonable period of time
22 August 03, page 13Company Confidential
Barco Subcontracting
0
5
10
15
20
25
Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03
OrdersSalesEBI TA
in € mio
22 August 03, page 14Company Confidential
Barco Subcontracting
• Sales– Weaker than Q1, but operating cost decreased by
reducing number of temporary contracts and temporary unemployment
• Orders– Stronger than Q1 2003
• EBITA– Cost containment allowed us to improve the
operational profit margin to 6.6 %
• Organization– Assessing a more efficient organization of all
electronic sub-assembly activities within all Barco divisions
22 August 03, page 15Company Confidential
Geographical breakdown of sales
54.4%
14.5%
31.1%
48.7%
32.8%
18.5%
EMEAAMERI CASASI APAC.
Q2 2003
FY 2002
In Q2 03, sales to Americas increased by 3.8% in US $ vs Q2 02
22 August 03, page 16Company Confidential
Key figures Income Statement
in € mio Q2 02 H1 02 Q2 03 H1 03
SalesCost of goods sold
176.1-95.9
328.3-185.4
157.9-87.0
309.0-171.4
Gross ProfitResearch & DevelopmentSales & MarketingGeneral & AdministrationOther operating result
80.1-17.8-24.9-13.1-2.2
142.9-34.9-49.1-25.1-0.9
70.9-18.0-25.6-11.8
2.0
137.6-34.7-49.9-23.7
3.6
EBITAGoodwill amortization
21.9-1.2
32.8-2.4
17.4-1.6
32.9-3.3
Operating Result 20.7 30.4 15.7 29.5
Non-operating result -27.7 -27.6 0.5 0.8
Income Taxes -5.3 -8.3 -4.8 -9.1
Net Income -12.2 -5.6 11.4 21.2
Current Cash Flow 34.9 55.8 28.1 52.5
Current Earnings per Share (in €) 1.37 2.01 1.05 1.98
Net Earnings per Share (in €) -0.99 -0.44 0.92 1.70
22 August 03, page 17Company Confidential
Key figures Balance Sheet
in € mio 31/12/02 30/06/03
Accounts Receivable 158.5 148.3
Inventory 118.0 130.4
Net cash 88.1 76.7
22 August 03, page 18Company Confidential
Share buy-back program
• As approved at the General Shareholder meeting, Barco started a share buy-back program to offset the dilution of its option programs
• On July 31, Barco had bought back 95,928 shares for a total of 4.98 € million
22 August 03, page 19Company Confidential
Expectations Q3 2003
• Target sales: 140-150 € million which means an increase of at least 3 % at comparable $
• Target EBITA: between 7 and 12 € million, i.e. comparable to Q3 2002
• Economic uncertainty continues to keep investment climate weak in certain markets
• Dollar evolution impacts both sales – as 45 % of our sales is in $ related currencies – and EBITA and makes Q4 predictability more difficult, but normally Q4 is the strongest quarter
• Continue to improve – Internal processes w.r.t. non-quality cost, delivery
performance, working capital and indirect manufacturing cost
– Sales coverage: China, Japan and Canada– New product development