Q120 @BARCO Trading Update

Russ Curry, Ministry of New Media

Today Barco (Euronext: BAR; Reuters: BARBt.BR; Bloomberg: BAR BB) announced the results for the first quarter ended 31 March 2020.

Financial highlights 1Q20 

  • Orders @ 253.7 million euro of incoming orders, a decrease of 5.7% year-over-year. At constant currencies orders were 7.2% lower compared to last year.
  • Order book as of 31 March 2020 stood at 341.8 million euro, flat year-over-year and up 6% compared to the last quarter of last year.
  • Sales for the quarter were 235.7 million euro, a decrease of 2.9% compared to the first quarter of 2019.  At constant currencies sales were 4.5% lower than last year.

Executive summary 1Q20

The start of 2020 was marked by the covid-19 outbreak and it had measurable impact on Barco’s activities.

As a result of lockdowns in China, Barco’s sales in China were halted during February and gradually resumed in March. Also in China, operations and supply chains were disrupted during February but recovered to near full capacity by the end of the first quarter.

The Entertainment division was growing through mid-March at which point demand for event projectors began to stall and cinema replacement cycle projects began to be pushed out.

In Enterprise, orders for the corporate segment increased during the quarter, fueled by the new ClickShare Conference product. However, in the latter half of March, weakening demand impacted both orders and sales which caused sales for the quarter to fall below last year’s first quarter.

The Control Rooms segment was weak relative to a strong first quarter of 2019, due in part to softening demand from oil and gas industry customers compounded by project delays resulting from covid-19 lockdown measures.

The Healthcare division registered double digit topline growth with strong results for diagnostic imaging, mainly driven by intensified demand for remote radiology solutions amid the covid-19 crisis.

CEO Jan De Witte was quoted as saying “During these challenging times, the health and safety of Barco’s employees, customers and partners is our highest priority. In response to covid-19 we have implemented measures to keep our employees safe by applying best-practice hygienic and social distancing guidelines, reconfiguring production facility lay-outs and expanding home-work protocol. The cost productivity and operational efficiency measures we implemented over the past few years, have created a more resilient business model, poised to withstand severe economic headwind. Based on our experience in China since January and with a persistent focus on both short and long term business continuity, we managed to contain our cost spending levels while keeping our manufacturing facilities operational.”

During the first quarter the company aligned the activity rate of its organization to the softening demand in some of its markets, shifted the investment timetable on selected longer-term initiatives and took significant discretionary cost containment actions that will remain in effect for the remainder of 2020.

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