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Results 2Q08
Martin De Prycker, CEO
23 July 2008
23 July 2008, page 1
Company confidential
Highlights 2Q08
 Sales growth before exchange impact limited to 1% due
to unequal performance of the different divisions and to
economic slowdown. Sales declined 6% at real exchange
rates
 Good order intake at 1.5% higher than last year despite
strong Euro
 EBIT decline of € 10.5 million, due to lower sales, price
pressure, exchange rates and restructuring
 A cost reduction plan is being implemented to improve
bottom line and to cope with inflation and economic
slowdown
23 July 2008, page 2
Company confidential
Operational results
In € million
2Q07
Growth 08/07
At real
FX
At constant
FX
10%
Orders
185.4
182.6
2%
Orderbook
332.6
322.4
3%
Sales
179.6
191.9
(6%)
1%
6.6
15.5
(57%)
(34%)
EBIT
5.0
15.5
(68%)
(44%)
EBIT %
2.8
8.1
EBIT
(before restructuring)
23 July 2008, page 3
Company confidential
2Q08
Results per quarter
In € million
250
200
Orders
150
Sales
EBIT
Avg. LTM Orders
100
Avg. LTM Sales
50
23 July 2008, page 4
Company confidential
08
08
2Q
07
1Q
07
4Q
07
3Q
07
2Q
06
1Q
06
4Q
06
3Q
06
2Q
05
1Q
05
4Q
05
3Q
2Q
1Q
05
0
Overall comments
 Sales growing 1% excluding exchange rates. Declining
6% at real exchange rates
– Strong growth in Security & Monitoring and Medical can not
compensate the lower sales in Media & Entertainment and
Other Markets
– Weak in EMEA due to strong drop in Middle East (Dubai Mall)
 Gross profit at € 62.4 million vs € 74.7 million last year,
due to exchange rates, product mix and price pressure
 EBIT at € 5.0 million, lower than 2Q07, after a negative
currency impact of € 3.6 million and restructuring
charges of € 1.6 million
23 July 2008, page 5
Company confidential
Evolution of results per division
In € million
2Q08
Sales
% EBIT
Sales
Sales growth 08/07
% EBIT
Media & Entertainment
59.2
1.1%
81.3
10.6%
Security & Monitoring
61.9
7.7%
50.4
0.1%
Medical Imaging
34.5
10.6%
32.7
13.4%
Other
26.9
(15.0%)
34.2
7.2%
Eliminations
(2.9)
0%
(6.7)
0%
179.6
2.8%
191.9
8.1%
Total
23 July 2008, page 6
Company confidential
2Q07
At real
FX
At constant
FX
(27%)
(21%)
22%
31%
6%
16%
(22%)
(14%)
(6%)
1%
Media & Entertainment Division
(1)
In € million
100
80
60
Orders
Sales
40
EBIT
Avg. LTM Orders
Avg. LTM Sales
20
-20
23 July 2008, page 7
Company confidential
08
08
2Q
07
1Q
07
4Q
07
3Q
07
2Q
1Q
06
06
4Q
06
3Q
06
2Q
05
1Q
4Q
05
05
3Q
2Q
1Q
05
0
Media & Entertainment Division
(2)
 Orders
– Orders in Events lower at real exchange rates, but again at a very high
level thanks to the new LED products, increasing confidence for second
half
– Orders in Media strongly improved
– Orders in Digital Cinema much higher than last year, following the VPF
model slowly gaining momentum
 Sales
– Sales in Events much lower, due to weak economy. 2Q07 had a peak
volume of newly launched products
– Media sales significantly lower as some projects were delayed
– Digital Cinema strongly improved vs 2Q07
 Margins
EBIT weaker due to lower volumes and lower gross margin, caused by
sell-off of slow moving inventory
 Actions and outlook
– Headcount reduction implemented in July, further cost reductions are
foreseen
– New product introductions coming up to speed in second half
23 July 2008, page 8
Company confidential
Sales declined 21% at constant FX, due to worldwide economic
situation
Orders increasing again Q on Q and on consecutive basis
Profit much lower than 2Q07
Security & Monitoring Division
(1)
In € million
90
80
70
60
50
Orders
Sales
40
EBIT
Avg. LTM Orders
30
Avg. LTM Sales
20
10
23 July 2008, page 9
Company confidential
08
08
2Q
07
1Q
07
4Q
07
3Q
07
2Q
06
1Q
06
4Q
06
3Q
2Q
06
05
1Q
4Q
05
05
3Q
-10
2Q
1Q
05
0
Security & Monitoring Division
(2)
 Orders
– Decline in orders, but order funnel remains solid
– Good order intake in Defense and Utilities and confirmation of
leadership position in Traffic & Surveillance
– Continued growth in APAC
 Sales
– Sales growth 31% at constant exchange rates
– Stronger growth in Defense and Traffic & Surveillance
 Margins
EBIT margin at 7.7% vs 0.1% in 2Q07, thanks to higher sales
and cost containment
 Actions and outlook
– New products introduced for deliveries in second half
– Streamlining portfolio
Declining orders but sales strongly improve, with good
profitability at € 4.9 million
23 July 2008, page 10
Company confidential
Medical Imaging Division
(1)
In € million
60
50
40
Orders
Sales
30
EBIT
Avg. LTM Orders
Avg. LTM Sales
20
10
0
05 05 05 05 06 06 06 06 07 07 07 07 08 08
Q
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
1
23 July 2008, page 11
Company confidential
Medical Imaging Division
(2)
 Orders / Sales
– Orders level stable and growing at constant exchange rates
– Healthy sales growth in PACS vs 2Q07, at constant exchange
rates, mainly in APAC
 Margins
– Good EBIT margin at 10.6%, vs 13.4% in 2Q07, due to lower
gross margin caused by price pressure
 Actions and outlook
– New products being launched in second half, to broaden our
market coverage
– Initiatives to further outsource to LCC ongoing
Very strong sales growth at constant FX, resulting in good
profitability
23 July 2008, page 12
Company confidential
Other Markets
(1)
In € million
50
40
30
Orders
Sales
EBIT
Avg. LTM Orders
Avg. LTM Sales
20
10
0
1Q
-10
23 July 2008, page 13
Company confidential
05
2Q
05
3Q
05
4Q
05
1Q
06
2Q
06
3Q
06
4Q
06
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
Other Markets
(2)
 Orders / Sales
– Order intake stable despite weak USD
– Lower orders and sales in simulation market, mainly due to
unavailability of LCOS products
– Weak orders and sales in presentation market
– Orders and sales in Avionics continue to grow
 Margins
– EBIT margin negative at (15.0%) vs 7.2% in 2Q07, as lower
gross profit was unable to offset the high investments in
product development for simulation and avionics
 Actions and outlook
– Strong orderbook, especially in Simulation and Avionics
– First shipments of simulation projectors with new LCOS
panels have now started. This will help to substantially
increase orders and sales in second half
– Headcount reduction implemented in July, further cost
reductions are foreseen
Overall weaker sales and high R&D investments result in
negative EBIT
23 July 2008, page 14
Company confidential
Geographical breakdown of sales
2Q08
2Q07
19%
20%
45%
EMEA
47%
AMERICAS
APAC
36%
AMERICAS
APAC
33%
• Americas + 1%*
• APAC
- 9%*
• EMEA
- 12%*
* At real FX
23 July 2008, page 15
Company confidential
EMEA
Key figures Income Statement
In € million
2Q08
%
2Q07
%
179.6
(117.1)
100.0
(65.2)
191.9
(117.2)
100.0
(61.1)
62.4
(19.2)
(29.9)
(12.2)
3.9
34.8
(10.7)
(16.6)
(6.8)
2.1
74.7
(16.5)
(29.3)
(12.5)
(0.8)
38.9
(8.6)
(15.3)
(6.5)
(0.4)
5.0
2.8
15.5
8.1
Non-operating result
(0.4)
(0.2)
(0.2)
(0.1)
Income Taxes
(0.8)
(0.5)
(2.9)
(1.5)
Net Income from continuing operations
3.7
2.1
12.5
6.5
Net Income from discontinued operations
0.9
0.5
1.8
1.0
Net Income
4.6
2.6
14.3
7.5
EBITDA
20.5
11.4
28.5
14.9
Net Earnings per Share (in €)
0.39
Sales
Cost of goods sold
Gross Profit
Research & Development
Sales & Marketing
General & Administration
Other operating result
EBIT
23 July 2008, page 16
Company confidential
1.19
Key figures Balance Sheet
30/06/08
31/12/07
30/06/07
Accounts Receivable
179.8
202.4
194.2
Inventory
223.6
204.0
173.4
74.9
87.3
84.9
Net Working Capital
236.4
230.7
184.9
Net Financial Debt
108.4
53.4
24.0
In € million
Trade Payables
23 July 2008, page 17
Company confidential
Expectations full year 2008
 A cost reduction plan of € 30 million is being
implemented, and is composed of manpower reductions,
streamlining our business portfolio and cost containment
actions. This cost reduction plan will result in an
improvement of EBIT in 2009 and will offset inflation
 One time restructuring cost expected of around € 20
million, to be taken in 2H08
 Notwithstanding the current economic circumstances, we
expect a significant improvement of the EBIT level before
restructuring in 2H08 compared to 1H08, thanks to the
good order intake, the cost reduction plan and the
introduction of a number of new products
23 July 2008, page 18
Company confidential