Orders for the first half of 2021 for Barco were significantly above the same period of 2020 driven, according to Barco, by strong demand growth for healthcare and entertainment and continued to demonstrate quarter-to-quarter improvements. However, the conversion of orders to sales was hindered by prolonged pandemic-induced restrictions (Entertainment and Enterprise) and, to a lesser extent, component shortages (entertainment and healthcare). Sales were up 13% versus the first quarter and improved month by month as the global economy began to reopen for the second quarter.
The first half of 2021 recorded sales of 366 million euro ($431 million). This is way up when compared to the first half of 2020 ($398 million) but still below 2019 numbers where Q1 and Q2 of 2019 sales were at $497 million.
In the entertainment division, all segments posted quarter-over-quarter improvements in both orders and sales. This reflects continued momentum in China and the restarting of immersive experiences in the rest of the world. Orders for the first half were up by 32% year-over-year while sales were still below the first half of last year (which included a strong first quarter).
Enterprise saw the continuation of gradual improvements in orders in the second quarter compared to the first quarter in both the Corporate and Control Rooms segments. However, sales were flat as a result of delayed project execution and hindered demand due to slow office reopenings across Europe, APAC and the Americas.
Orders for Healthcare were 18% higher for the first half compared to last year reflecting the resumption of healthcare investments in the diagnostic imaging and surgical markets, while sales were flat excluding currency effects.
EBITDA margin for the first half was 7.5% of sales, 2.5 percentage points below 1H20 and four percentage points higher than 2H20.
Gross profit margin improved 2.7 points versus the second semester of last year but was 2.7 percentage points lower than the first semester of last year, reflecting mainly higher freight costs and product mix effects. As with nearly every company in AV, cash flow was tighter. Cash flow for 1H21 was 35 million euro compared to -51 million euro last year, on the strength of working capital improvements compared to 1H20.
“I’m pleased to see the health of our end-market demand and competitive positioning reaffirmed in a strong order intake and an exceptional order book level for the first half of the year,” said CEO Jan De Witte. “The combination of an uneven recovery in economic activity and supply chain constraints has caused sales to continue to lag orders. I am confident that Barco will continue to generate steady improvements as markets further recover and office reopenings accelerate although supply chain constraints may temper the growth acceleration.”