Oct 18, 2023 Trading update 3Q23
REGULATED INFORMATION - INSIDE INFORMATION - INVESTOR RELATIONS
Focus on profitability growth, while facing tougher market conditions
Kortrijk, Belgium, 18 October 2023, 7:30 am - Today Barco (Euronext: BAR; Reuters: BARBt.BR; Bloomberg: BAR BB) announced the results for the third quarter ended 30 September 2023.
Third quarter 2023 highlights
Orders for 3Q23 of 239.9 million euro, -1% vs 3Q22
Year-to-date orders of 781.0 million euro, up 4% versus last year
Order book per 30 September 2023 stood at 523.4 million euro, 5% higher than at the start of the year and 3% higher than end of June 2023
Sales for 3Q23 of 229.6 million euro, -12% versus 3Q22 (-9% at constant currencies)
Year-to-date sales 750.5 million euro, +2% yoy (+3% at constant currencies)
Executive summary 3Q23 Group topline
Quarter-by-quarter overview
The order level of 239.9 million euro in the third quarter was essentially flat versus the same quarter last year, with growth for Enterprise and Entertainment, and a decline for Healthcare. There were significant regional differences. Demand in APAC remained weak, driven by lower than expected investment levels in China. In Americas, orders grew, with important gains in the Cinema and Large Videowalls segments, partially offset by lower orders in Healthcare. In EMEA the order level declined, driven mainly by Entertainment. The orderbook further grew to 523.4 million euro, growing 3% compared to 505.8 million euro at the end of June 2023. The book-to-bill ratio for the third quarter was above 1.
Sales for the third quarter amounted to 229.6 million euro, 12% lower than the same quarter last year. The Entertainment division continued to perform solidly driven by significant sales growth in the Cinema segment, compared to a strong third quarter of 2022 when the business was rebounding from the supply chain constraints of 1H22. Healthcare sales were 27% lower than last year due to the slower than expected recovery in China and lower sales in the Americas, where sales was impacted by the phase out of a large modality platform, and a delay in supply for an updated Diagnostic Imaging display platform. Meanwhile, Healthcare sales grew in EMEA. In the Enterprise division, the sales declined 13% driven mainly by Large Videowalls, where we executed on the strategic review, but also saw further project delays at major implementation partners. Meeting Experience saw market share gains in a softer market, resulting in a mid-single digit decline in sales versus the same quarter last year.
During the third quarter Barco continued to invest in its growth initiatives aimed at propelling growth in 2024 and beyond. These include new product introductions for next year in all divisions: new additions to the ClickShare portfolio, further expansion of the Barco CTRL software platform for control rooms, the launch of a new flagship product for mammography and a new generation of image processing controllers and mid-end projectors for the Immersive Experience market. In Cinema, we are planning to introduce a new media server and the next generation of laser cinema projectors, equipped with HDR Lightsteering technology. Regarding manufacturing, we continued to roll out our focused factories strategy, while the construction of the new factory for projection in Wuxi is on track.
Quote of the co-CEOs, An Steegen and Charles Beauduin
In the third quarter of 2023, the headwinds of the second quarter intensified. The expected recovery in China from the pandemic has not materialized which is having an impact on the results and growth outlook for this year. In our key markets, we see a mixed picture: Healthcare and Enterprise are facing softer demand related to the weakening macro-economic conditions. On the other hand, the Entertainment market continues to build on its strong momentum that started last year.
While navigating these tougher market conditions throughout 2023, the fundamentals of our key markets remain intact, and our focus is on winning market share, cost containment and further margin improvements. In addition, our management teams remain committed to executing on our strategic initiatives, notably our roadmap of new product introductions and the operational efficiencies through focused factories.
Outlook 2023 and beyond
The following statements are forward looking on a like-for-like basis and actual results may differ materially.
Given the difficult market conditions, management expects sales for FY23 to be in line with last year. At this topline level, management expects an EBITDA margin around 14% for the full year 2023.
The 2024 topline growth will depend on the evolution of general market conditions. However, management reconfirms its long-term guidance to return to high single digit sales growth. Management reconfirms its guidance for an EBITDA margin between 14% and 18% for 2024 and subsequent years.
Update on co-CEO Charles Beauduin
Co-CEO Charles Beauduin has been away from the office on medical leave over the past few months. In recent weeks Mr. Beauduin has resumed his role as co-CEO, working remotely for the most part, but also gradually returning to the office to attend key meetings.
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Disclaimer This press release may contain forward-looking statements. Such statements reflect the current views of management regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Barco is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release in light of new information, future ev
