Barco is one of the few companies in our industry that’s public that exclusively makes products for the commercial AV market. So, seeing their results helps us understand where the market is at any given moment. Remember, however, due to the nature of Barco’s typical products, their sales results lag behind, timeline-wise, the rest of the market as by the time they get the purchase order, the integrator is on to newer projects. But, they are a good snap-shot in time for the ProAV markets.

Today Barco (Euronext: BAR; Reuters: BARBt.BR; Bloomberg: BAR BB) announced results for the six month period ended 30 June 2018. EBITDA margin expanded 1.0 percentage point on the strength of gross profit margin improvements and lower operating expenses while the company continued to invest in its growth platforms. Each of the divisions posted higher EBITDA margins. First half sales were 498.1 Million Euro ($583 Million USD).

Reported orders and sales were below last year, by +2% and +2.7% respectively on a constant currency basis. In Enterprise continued strong growth of ClickShare was offset by lower Control Rooms’ sales due to soft demand in the rear projection cube market. Healthcare generated strong order intake reflecting continued strengthening of its market position in both the diagnostic and surgical segments. In Entertainment, Venues & Hospitality produced higher sales year-over-year for the third consecutive semester which partially offset lower Cinema sales, mainly in China.

Barco continued to execute on its ‘focus to perform’ program and to advance its key growth initiatives. The company sold X2O Media; opened its factory for the future in Belgium; and, started the relocation of manufacturing activities from Norway to Belgium.

In parallel, Cinionic, Barco’s new Cinema venture, was commercially launched during the first half and signed its first renewal contracts; UniSee, the new LCD-based videowall, completed its first 50 installations with reference accounts around the world; and Healthcare opened its local R&D and manufacturing center in Suzhou, China, under its ‘In China for China’ program, aimed at more effectively penetrating the Chinese Healthcare market.

First half 2018 financial highlights:

• Bookings were at 324.4 million euro (+14% versus end of year 2017)
• Incoming orders at 539.7 million euro (reported -4.0%; at constant currencies +2.0%)
• Sales at 498.1 million euro (reported -3.8%; at constant currencies +2.7%)
• Gross profit margin of 38.8% (+0.5 ppts)
• EBITDA of 51.5 million euro (+3.3 million euro) or 10.3% of sales (+1.0 ppts)
• Adjusted EBIT of 34.9 million euro (+3.4 million euro) or 7.0% of sales (+0.9 ppts)
• Net income at 27.3 million euro (+8.1 million euro)

This is a statement directly from their earnings release today: “The following statements are forward looking and actual results may differ materially: Given the performance for the first half of the year – and assuming a stable global economic environment and currencies at current levels – management reaffirms its full year outlook which calls for further margin improvement.”

This is a good sign for the second-half of the year for all of us in ProAV. Barco is here, of course.