Barco’s earnings we released today. EBITDA margin expanded 2 percentage points, on comparable sales, to 12 percent and within the range of Barco’s 2020 goal. A 2.9 percentage point gain in gross profit margin to 40 percent of sales drove the EBITDA margin improvement. Both the Enterprise and the Healthcare division delivered solid EBITDA margin growth while sustained investment in next-generation technology caused Entertainment’s EBITDA margin to be flat year-over-year. Consistent with the EBITDA improvement, group EBIT grew 17 million euro to 90 million euro, or 8.7 percent of sales, and net earnings increased threefold to 75 million euro. Total sales for 2018 were just shy of $1.2 Billion US dollars.
Noteworthy in Barco’s performance for 2018 is the continued double-digit growth of ClickShare and the measurable turnaround results for Control Rooms which boosted the Enterprise division performance. The topline Entertainment results bottomed out in the course of 2018 with a substantial pick-up in growth in the EMEA and North American region for Cinema, which partially offset anticipated market softness in China. Healthcare booked modest topline growth while continuing to add partners globally, further strengthening its position in the surgical segment.
While continuing to invest nearly 12 percent of sales in R&D, the company advanced its key growth initiatives, including its ‘In China for China’ program. As part of this program, Healthcare expanded its business development and manufacturing capabilities and the company expanded its local sales presence for ProAV and ClickShare solutions. Under the ‘Focus to perform’ program, Barco finished streamlining its business activities, optimized its manufacturing footprint and announced its ‘fit to lead’ plan. In 2018, Cinionic, the company’s new cinema venture, started operations and won its first set of sizeable renewal programs.
Assuming a stable global economic environment and currencies at 2018 average levels, management expects mid-single digit topline growth on a comparable pro forma basis and continued EBITDA and EBITDA margin growth.
Growth rates in management’s guidance are based on comparisons to 2018 results on a pro forma basis.
Fiscal year 2018 financial highlights
- Incoming orders at 1,046.9 million euro (-1.3 percent) ; year-end orders booked +6 percent
- Sales at 1,028.5 million euro (-0.5 percent)1; growth in the 2nd half +2.8 percent
- EBITDA of 124.5 million euro (+16 percent) , EBITDA margin at 12.1 percent of sales (+2.2 ppts)
- Net income of 75.0 million euro (+50.2 million euro)
- Proposal to increase the dividend to 2.30 euro per share from 2.10 euro