Belgium │ Image processing │ www.barco.com
Barco
BUY (vs. ADD)
Price (05/10/2016)
EUR 70.51
Made ready for another leap forward
95.00
Ex CEO Van Zele has reshaped the company
Target price
Risk
High
Reuters
BAR.BR
Bloomberg
BAR BB
12.76
Shares number (m)
Market cap. (m)
899
Net debt 12/16e (m)
-212
Net debt/EBITDA 12/16e
-2.47
20.0%
1 year price perf.
Diff. with Euro Stoxx
22.3%
Volume (sh./day)
17,076
H/L 1 year
74.67 - 54.37
Free Float
68.5%
Michel Van de Wiele NV
18.0%
3D NV
4.0%
U. Vandeurzen
2.9%
treasury
6.7%
Company description
Barco is a leading image processing
company operating in projection,
display, monitoring and
networking and collaboration
technologies. The company is
active in more than 90 countries,
in B2B industries and employs
about 3,400 people.
75
ue
• During his leadership, CEO Eric Van Zele was the key driving force for Barco’s
worldwide leadership in Digital Cinema. He also pushed for a focused and
ambituous growth strategy into key value drivers such as the ClickShare
product and new Healthcare solutions such as digital operating rooms.
• His “One Barco” philosophy redynamised the group and, in contrast with the
historical track record, he kept away from too expensive acquisitions and with
Fimi and Awind acquired some strategic srong performing companies. He also
divested Defense & Aerospace, allowing the group to invest in new break-out
strategies and get more focus.
• We believe Eric Van Zele has changed the company from a too diversified
engineering conglomerate to a focused group with renewed ambitions and
strong market positions beyond pure small scale niche businesses.
New CEO Jan De Witte inherits solid base for further margin
improvement
• While still having a large product portfolio, the group has clearly refocused in
recent years. With its Healthcare unit, ClickShare product and Digital Cinema
worldwide leadership it has some clear value drivers, offering economies of
scale, on which Barco, together with operational excellence programs, should
be able to increase margins.
• With 16 years of experience at GE healthcare, the new CEO has the right profile
to take the company to the next level by combining the renewed growth profile
with operational execution.
• From the 3.6% EBITA-margin level in 2014, the 5.0% in 2015, we expect Barco
to improve its margin to 5.7% in 2016, 6.3% in ’17 and 7.4% in ’18. . This will
result in strong EBITA growth of 20%, 28% and 17% in ‘16/’17/’18 respectively.
• Other small Benelux diversified technology companies such as TKH and
Aalberts, with a mix of hardware, service and software, generate operating
margins of 9% to 12% and trade at 11 to 12x EV/EBIT 2018.
• Barco is currently also putting extra effort in some break-out strategies that
have an estimated short term negative margin impact of some 2% to 3%.
Re-rating potential with earnings upside
• Applying a multiple of 11x EV/EBIT ‘18, we arrive at a target price of EUR 95.00.
• However, we believe there is upside to our current expected 7.4% EBIT margin
2018 and, as such, if execution follows, further upside is in the cards. BUY!
70
65
60
55
50
Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
14 14 15 15 15 15 16 16 16 16
Analyst:
Stefaan Genoe
+32 2 662 8299
[email protected]
1
EQUITY RESEARCH
EUR
Sales
EBITA
Adj. profit
EPS
Div.
EV/EBITA
FCF Yield
P/E
Yield
12/12
1,156
100
91.6
7.23
1.40
5.5
16.4%
7.5
2.6%
12/13
1,158
82.8
69.9
5.39
1.50
7.9
10.2%
10.5
2.6%
12/14
1,051
38.6
6.8
0.52
1.60
18.1
-2.6%
nm
2.7%
12/15
1,029
51.1
-53.8
-4.14
1.75
12.5
10.1%
nm
2.8%
12/16e
1,075
61.1
21.4
1.64
1.85
13.3
1.5%
42.9
2.6%
12/17e
1,127
78.2
49.6
3.82
2.00
9.9
6.9%
18.5
2.8%
12/18e
1,178
91.8
62.4
4.80
2.00
7.9
8.1%
14.7
2.8%
6/10/2016
Table of contents
A different company with earnings upside and re-rating potential ............................................ 3
Investment Case and Valuation ............................................................................................... 3
Improving business portfolio ....................................................................................................... 4
Entertainment.......................................................................................................................... 5
Healthcare................................................................................................................................ 6
Enterprise................................................................................................................................. 7
Margin upside .............................................................................................................................. 8
Entertainment ..................................................................................................................... 8
Healthcare ........................................................................................................................... 8
Enterprise ............................................................................................................................ 8
Combined group margin ...................................................................................................... 8
Accounting and estimates update ............................................................................................... 9
Fading impact from termination development capitalisation ................................................. 9
Healthy balance sheet ............................................................................................................. 9
Above average growth expected next years ........................................................................... 9
2
EQUITY RESEARCH │ Barco
6/10/2016
A different company with earnings upside and re-rating
potential
Investment Case and Valuation
Since the end of the 90ies, Barco has had a long difficult period with different competitive
threats, regular supply chain and operational execution issues and M&A that has not always
been very successful. CEO Eric Van Zele has succeeded in a marked turnaround since 2009.
This took some time since the company’s product portfolio, strategy and focus had to be
changed drastically. More importantly, he created one group culture with renewed dynamism
and focus.
Today, Barco has created more critical size with sales of around EUR 250m in Digital Cinema,
over EUR 100m with ClickShare and a renewed growing healthcare business (EUR 220m).
The new CEO, with 16 years of experience at GE healthcare, should take Barco to the next
level by increasing operational efficiencies and structurally improving margins. The current
break-out investments in some new products together with a continued focus on growth
markets and geographies should support operating leverage. Currently, we estimate that
these growth initiatives depress margins by 2% to 3%. Important, Barco does not want to
throw good money after bad money and the growth initiatives are viewed from a venture
perspective. If they do not get the expected momentum, the initiatives are stopped.
Within Enterprise, we also assume that Control Rooms represents an estimated EUR 160m of
sales and is running at break-even levels only. Historically this unit has recorded double digit
margins and getting back to 10% EBIT margin would have a 1.7% additional margin impact at
group level.
The current President of the Board and main reference shareholder Charles Beauduin (owner
of weaving machine company Van de Wiele) also supports investments in long term
innovation initiatives with also a strong focus on automation and operational execution.
From the 3.6% EBIT-margin level in 2014, the 5.0% in 2015, we expect Barco to improve its
margin to 5.7% in 2016, 6.3% in ’17 and 7.4% in ’18. This will result in strong EBITA growth of
20%, 28% and 17% in ‘16/’17/’18 respectively.
Other small Benelux diversified technology companies such as TKH and Aalberts, with a mix of
hardware, software and service revenues, generate operating margins of 9% to 12% and
trade at 11 to 12x EV/EBIT 2018.
We are well aware these companies do not operate in the same business but there is no real
quoted company comparable to Barco. Their common feature is their diversified business
portfolio with a central management structure.
Applying a multiple of 10x EV/EBIT ‘18, we arrive at a target price of EUR 95.00.
However, we believe there is upside to our current expected 7.4% EBIT margin 2018 and, as
such, if execution follows, further upside is in the cards.
With an estimated net cash position in excess of EUR 200m, Barco also has a very strong
balance sheet. We expect Barco to make add-on acquisitions and to use this firepower for
internal product development. We do not expect one major acquisition nor a capital return.
3
EQUITY RESEARCH │ Barco
6/10/2016
Exhibit 1
Exhibit 2
Margin upside
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Re-rating upside - EV/EBIT multiples
17.00
15.00
13.00
11.00
9.00
7.00
5.00
2014
TKH
2015
2016e
Aalberts
Source: Degroof Petercam estimates
2017e
2018e
2015
Barco
TKH
2016e
2017e
Aalberts
2018e
Barco
Source: Degroof Petercam estimates
Improving business portfolio
Barco historically has had an early presence in China. In recent years, China has regained
importance thanks to a very successful collaboration with China Film Group. This has allowed
Barco to be the market leader in China, which is the most important growth market with over
5,000 new screens being installed every year.
With over EUR 250m in sales, Digital Cinema remains the single most important sales
contributor. While a couple of years ago, people feared that DC sales could fall back
significantly once the theatres were digitized, this fear seems to disappear. This is thanks to
Barco’s strong presence in China and additional sales initiatives such as laser projectors, solid
state laser lighting modules, lobby initiatives, the Barco Escape 3 projector “surround image”
experience, service revenues, etc. Services already represented 16% of DC sales in ’15 and are
expected to grow.
The solid state laser projection can be sold as a new projector but also as a separate light
module replacing the traditional DC light unit. The price of a laser phosphor projector is
targeted to beat the TCO of a lamp based projector after 6-7 years lifetime.
Exhibit 3
Exhibit 4
Geographical split
APAC
31%
Enterprise
27%
EMEA
32%
Healthcare
22%
Americas
37%
Source: Barco
4
EQUITY RESEARCH │ Barco
Segment split
Entertain
ment
51%
Source: Barco
6/10/2016
Entertainment
With EUR 500m sales, Entertainment represents about half of group sales. Slightly more than
60% of Entertainment sales are DC sales and 35% is represented by Venues and Hospitality.
This latter comprises the rental & staging business, typically projection used for big events
such as pop concerts or urban marketing festivals, but also fixed installations used in
simulation applications, for big fixed billboards or for (outside) theatres.
The DC sales peaked in 2012/2013 at an estimated EUR 360m. With the analogue
replacement cycle largely finished, investors have long feared an implosion of sales. However,
Barco has very well managed this transition thanks to service revenues, new or add-on
product sales and a strong gain in market share, especially in the Chinese market, with a
worldwide capture rate in 2014-2015 of 51%.
In the greater China area capture rates have been above 60%. This strong Chinese
performance can also be deducted from the minority results in the group’s P&L which
amounted to EUR 6.7m in H1 16’ on total net income of EUR 24.8m. When translated to
EBITDA (adj. for taxes and at 100%) Chinese DC sales are a material part of the Entertainment
EBITDA. Barco owns 58% of the very successful joint venture with China Film Group (CFG). We
adjust for the minorities in our EV valuation ratio’s.
Exhibit 5
Entertainment sales split
Others
3%
Venues &
Hospitality
34%
Digital
Cinema
63%
Exhibit 6
Digital screens China
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
# screens
Source: Barco
Source: Barco reports
In the coming years, we expect Barco Entertainment sales to decline slightly with the decline
of new digital projectors being largely compensated by these new initiatives. Of course, with
the unit representing an estimated 48% of group sales, this limits the topline growth potential
at group level. However, as we will indicate below, close to double digit growth in Enterprise
and Healthcare should still generate around 5% group topline growth with profits growing at a
significant higher pace thanks to improved margins.
5
EQUITY RESEARCH │ Barco
6/10/2016
Exhibit 7
Entertainment sales evolution
600
500
400
300
200
100
0
2009
2010
2011
2012
2013
2014
Cinema Base
Cinema Laser
Cinema initiatives
Venues & Hospitality
2015
2016e
2017e
2018e
Cinema Service
Source: Barco and Degroof Petercam estimates
Healthcare
In healthcare, Diagnostics still represent around 80% of sales. Barco has a worldwide installed
base of medical displays of over 1bn. These displays comprise mammography displays,
diagnostic displays, dentistry displays, etc.
In June 2015, Barco acquired the US company ADVAN which produces high-quality LCD
displays for medical modality applications. It is part of the explanation for the slightly lower
EBITDA margin in Healthcare in H1 2016. However, the ADVAN margin should improve and it
should also bolster growth thanks to the access to some large US customers such as Artrex,
Maquet or Stryker, which also sell surgical equipment.
Surgical is Barco Healthcare’s new growth engine where it produces imaging and networking
equipment for the digital operating room. It’s Nexxis OR IP based platform is growing rapidly
(Exhibit 9). Barco is also looking for a partner in China which would facilitate distribution on a
larger scale. Today, distribution is direct and limits the addressable market to the high end
systems only.
Exhibit 8
Healthcare sales split
Others
3%
Exhibit 9
Installed Nexxis OR’s
500
400
Surgical
16%
300
Diagnostic
81%
200
100
0
2012
Source: Barco
6
EQUITY RESEARCH │ Barco
2013
2014
2015
Source: Barco presentation
6/10/2016
Enterprise
While Barco has been a fragmented engineering company for too long, also the Enterprise
unit is a clear example of increased focus and courage to push for blockbuster sales.
The is highlighted by ClickShare, Barco's wireless presentation and collaboration system, that
allows any meeting participant to share content on the central meeting room
screen. Launched in 2012, 2015 sales already exceeded EUR 100m and 2016 sales should
come in around EUR 140m. Barco has recently also launched CS-100 and cse-200 for smaller
and medium-sized meeting rooms. This should further bolster sales in the coming years and
the group is also looking for a partner in the Chinese market to copy the successful
partnership with China Film Group in Digital Cinema. Other initiatives are additional features
such as simultaneous multi-room connection, making it a real wireless interactive
communication system.
ClickShare is now close to 50% of Enterprise sales, which amounted to EUR 70m in H1 2016.
Control Rooms is still slightly bigger. Once a very high margin unit, Control Rooms has had
some difficult years and actually was loss making in 2015. We also believe it was still slightly
loss making in H1 2016. For the FY, with traditionally a seasonally stronger H2, and thanks to
the impact of restructuring measures, we expect Control Rooms to be around break-even.
Control Rooms suffered heavily from the switch from rear-projector systems to LCD flat
panels. While volumes continued to increase, this a far more competitive technology with
lower price levels and margins.
The restructuring measures and focus on higher value added software solutions should
improve margin going forward. Barco is currently launching a new workflow software to
facilitate the operator’s system handling.
We do not expect Control Rooms to return to the historically high margin levels, but a 10%
REBITDA margin target towards 2018 should be feasible.
Exhibit 10
Exhibit 11
Enterprise sales split
ClickShare systems
25,000
Others
1%
20,000
15,000
Corporate
43%
10,000
Control
Rooms
56%
5,000
0
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
12 13 13 13 13 14 14 14 14 15 15 15 15
systems
Source: Barco
7
EQUITY RESEARCH │ Barco
Source: Barco presentation
6/10/2016
Margin upside
In recent years, CEO Van Zele has clearly created new dynamism at Barco, which stimulated
the emergence of these new growth engines. More importantly, he has forced the company
to focus on some big growth engines that had the potential to be material value drivers for
the company. In the past, Barco’s product development was too fragmented, with too little
focus and too limited economies of scale.
With some clear value drivers present today, the new CEO has the perfect platform to
implement the “GE-like” operational excellence skills. Economies of scale from some
blockbuster products, margin recovery potential at Control Rooms and the harvest from
current investments in some breakout technologies towards 2018 should offer significant
margin upside.
Entertainment
In Entertainment, margins dropped by 2% in H1 due to growth investments in breakout
strategies such as the Escape Digital Cinema projection technology (3 projector setup) and the
Cinema lobby initiative with digital displays providing real-time visual communication, etc. If
sales from these products start scaling up, the unit should be able to improve margin by some
2%.
Also the one-chip projectiondesign projectors are part of the Venues & Hospitality segment
and this unit has some margin upside.
Healthcare
In June 2015, Barco acquired the US company ADVAN which produces high-quality LCD
displays for medical modality applications. It is part of the reason for the slightly lower EBITDA
margin in Healthcare in H1 2016. However, the ADVAN margin should improve and it should
bolster growth thanks to the access to some large US customers such as Artrex, Maquet or
Stryker, which also sells surgical equipment.
Enterprise
The largest margin upside is in Enterprise where continued strong sales of ClickShare should
create economies of scale but where mainly a turnaround of Control Rooms, which is more
than 50% of the unit sales but slightly loss making, should support margin.
With around EUR 160m sales annually, a recovery from 0% EBITDA estimated to 10% in 2018
would generate EUR 16m additional profit, or support group EBITDA margin by 1.5%.
Combined group margin
Putting all these different margin improvements together, should allow to bolster group
margin by 4% to 5%.
EBITA margin reached 5% underlying in 2015. We believe the margin improvement projects
and economies of scale on the blockbuster products should allow Barco to move to a 10%
EBITA margin over time. In our current estimates we are still prudent and we anticipate a
5.7% margin in 2016, 6.9% in 2017 and 7.7% in 2018.
As we highlighted above, other small Benelux technology conglomerates such as TKH and
Aalberts, with a mix of hardware, software and service revenues, generate operating margins
of 9% to 12%.
8
EQUITY RESEARCH │ Barco
6/10/2016
Exhibit 12
Exhibit 13
Divisional EBITDA evolutions
12.0%
Group EBITDA and EBIT
11.0%
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2015
Entertainment
2016e
Healthcare
2017e
Enterprise
2018e
2015
Group
Source: Degroof Petercam estimates
2016e
EBITA
2017e
2018e
EBITDA
Source: Degroof Petercam estimates
Accounting and estimates update
Fading impact from termination development capitalisation
Barco’s results have long been blurred by its development capitalization policy. Since 2015 the
company has stopped capitalising development costs but it is still amortising the historically
capitalized cost. They are amortized on a 3 year period. We still anticipate some EUR 23m
negative impact in 2016 and a remaining EUR 2m in 2017.
As such, it is much more appropriate to look at EBITA margins and multiples for valuation
purposes.
Healthy balance sheet
Since the divestment of Defense & Aerospace for EUR 250m and thanks to recent year’s cash
generation, Barco has a very strong balance sheet. Net debt amounted to EUR 250m at the
end of 2015 and EUR 178m mid-2016.
The H1 ’16 decline was due to dividend payments, investments in the new HQ’s, the
acquisitions of Medialon and MTT for EUR 10m and increased working capital requirements.
Historically, Barco has had volatile working capital requirements and this should certainly be
part of the future operational excellence projects. Excluding any major impact from working
capital release going forward, we anticipate underlying FCF generation of EUR 60 to 70m. As
such, FCF yields are expected to reach 7% to 8% or, given the net cash position, 10.5% to 12%
based on Enterprise.
Above average growth expected next years
As indicated above, Barco’s current business portfolio together with new growth initiatives,
should allow the group to generate mid-single digit topline growth.
We believe the current margin level is still insufficient for a diversified technology group. Over
time, we believe that 10% EBITA margin should be the group target.
In our current estimates we are still prudent and we anticipate a 5.7% margin in 2016, 6.9% in
2017 and 7.7% in 2018. This will already result in above average EBITA growth of 20%, 28%
and 17% in ‘16/’17/’18 respectively.
This above average growth is not reflected at all in current valuation. BUY!
9
EQUITY RESEARCH │ Barco
6/10/2016
Exhibit 14
P&L summary
EUR m
Sales
y/y
Entertainment
y/y
Healthcare
y/y
Enterprise
y/y
2015
1028.9
514.5
216.0
300.4
2016e
1075.1
4.5%
512.9
-0.3%
243.7
12.8%
318.5
6.1%
2017e
1127.3
4.9%
510.4
-0.5%
266.8
9.5%
350.4
10.0%
2018e
1178.2
4.5%
515.0
0.9%
286.8
7.5%
376.7
7.5%
EBITDA
margin
74.0
7.2%
85.9
8.0%
103.0
9.1%
116.8
9.9%
Entertainment
margin
Healthcare
margin
Enterprise
margin
43.6
8.5%
19.4
9.0%
11.1
3.7%
33.3
6.5%
20.7
8.5%
31.9
10.0%
40.8
8.0%
25.3
9.5%
36.8
10.5%
43.8
8.5%
31.6
11.0%
41.4
11.0%
EBITA
margin
51.1
5.0%
61.1
5.7%
78.2
6.9%
91.8
7.8%
EBIT
-22.5
38.2
76.2
92.0
PBT
-19.5
41.7
79.7
95.5
4.9
10.0%
-15.9
22.0%
-18.0
22.0%
-21.0
22.0%
Net earnings
minorities
Group share
-15.7
9.0
-24.7
24.7
11.0
13.7
60.6
11.0
49.6
73.4
11.0
62.4
EPS
-1.90
1.05
3.82
4.80
Taxes
tax rate
Source: Degroof Petercam estimates
10
EQUITY RESEARCH │ Barco
6/10/2016
Profit & Loss (EUR m)
12/12
12/13
12/14
12/15
12/16e
12/17e
12/18e
1,156.0
11%
375.6
-142.2
-84.1
-52.2
3.0
159.5
100.2
8.7%
42.1
97.6
1.1
1.1
98.7
-5.0
0.0
0.0
-0.5
94.2
91.6
1,158.0
0%
386.5
-160.7
-95.5
-55.7
4.4
157.0
82.8
7.2%
49.1
73.4
-2.2
-2.2
71.2
-8.5
0.0
0.1
2.3
60.5
69.9
1,051.4
-9%
315.4
-124.0
-83.0
-56.0
1.0
128.5
38.6
3.7%
50.0
27.5
-1.1
-1.1
26.4
-4.7
0.0
0.1
3.9
17.8
6.8
1,028.9
-2%
360.5
-160.6
-155.2
-51.0
3.0
74.0
51.1
5.0%
44.6
-22.5
3.0
3.0
-19.5
4.9
0.0
-1.1
9.0
-24.7
-53.8
1,075.1
4%
389.7
-142.0
-135.6
-52.0
1.0
85.9
61.1
5.7%
22.9
38.2
3.5
3.5
41.7
-15.9
0.0
-1.1
11.0
13.7
21.4
1,127.3
5%
411.5
-145.3
-136.0
-53.0
1.0
103.0
78.2
6.9%
2.0
76.2
3.5
3.5
79.7
-18.0
0.0
-1.1
11.0
49.6
49.6
1,178.2
5%
430.1
-147.5
-138.0
-54.0
1.2
116.8
91.8
7.8%
0.0
92.0
3.5
3.5
95.5
-21.0
0.0
-1.1
11.0
62.4
62.4
Cash Flow (EUR m)
12/12
12/13
12/14
12/15
12/16e
12/17e
12/18e
EBIT
Depreciation
Amortization
Impairment
Changes in provision
Changes in working capital
changes in inventories
changes in receivables
changes in payables
changes in other current assets
Others
Operational Cash Flow
Tax expenses
Dividends from associates
Net interest charges
Others
CF from operating activities
CAPEX
Investments in intangibles
Acquisitions
Divestments
Others
CF from investing activities
Dividend payment
Minor. & pref. dividends
Equity financing
Others
CF from financing activities
Changes in consolidation scope
Exchange rate impact
Net debt/cash change
FCF to Enterprise
FCF to Equity
97.6
16.1
39.5
0.0
0.0
48.3
10.5
8.3
10.6
19.0
-3.7
197.7
-4.2
0.0
1.1
0.0
194.6
-81.1
-61.4
1.3
-1.2
-142.5
-13.2
0.0
1.1
0.0
-12.0
12.0
0.0
52.2
116.6
113.5
73.4
24.2
49.1
0.9
-2.9
34.9
29.3
25.8
-29.9
9.7
1.3
181.0
-18.9
0.0
-2.2
0.0
159.9
-84.9
-51.7
0.0
-3.1
-139.7
-17.8
0.0
0.0
0.0
-17.8
0.0
-1.8
0.7
96.0
75.0
27.5
19.3
50.0
7.2
0.0
-26.1
-11.9
-19.7
0.2
5.3
-11.1
66.8
-3.0
0.0
-1.1
0.0
62.7
-82.6
-21.9
14.9
-3.8
-93.4
-18.4
0.0
-11.3
20.8
-9.0
0.0
0.0
-39.7
-15.8
-19.9
-22.5
22.9
44.6
25.7
0.0
89.7
27.6
-5.4
16.3
51.2
-6.1
154.1
-14.9
0.0
0.2
-20.7
118.7
-37.8
-9.6
140.8
-3.5
89.8
-19.4
0.0
-0.8
0.0
-20.2
0.0
0.0
188.3
116.3
80.9
38.2
24.8
22.9
0.0
0.0
-52.1
-16.8
-6.6
-10.5
-18.2
7.7
41.4
-15.9
0.0
3.5
9.3
38.3
-25.0
-10.8
1.3
-16.5
-50.9
-20.8
-1.7
-2.3
0.0
-24.8
0.0
0.0
-37.4
16.4
13.3
76.2
24.8
2.0
0.0
0.0
-0.5
-8.9
-9.4
6.3
11.5
0.0
102.4
-18.0
0.0
3.5
0.0
88.0
-25.0
0.0
0.0
0.0
-25.0
-24.0
0.0
0.0
0.0
-24.0
0.0
0.0
38.9
77.4
63.0
92.0
24.8
0.0
0.0
0.0
-0.5
-8.7
-9.2
6.1
11.2
0.0
116.3
-21.0
0.0
3.5
0.0
98.8
-25.0
0.0
0.0
0.0
-25.0
-26.0
0.0
0.0
0.0
-26.0
0.0
0.0
47.8
91.3
73.8
Revenues
(Y/Y - %)
Gross profit
Selling expenses
R & D expenses
General & administ. expenses
Other expenses
EBITDA
EBITA
(Ebita margin - %)
Amortization
Impairment
EBIT
Net Financial Result
(of which Net interest charges)
(of which Other)
Pre-tax result
Taxes
Except. / Discont. operations
Associates
Minorities
Net declared earnings
Net adjusted earnings
Notes
11
Phasing out of development capitalisation policy artificially depresses EBIT and net results in '15, '16 and '17. EBITA is not
impacted and as from '18, EBITA equals EBIT.
EQUITY RESEARCH │ Barco
6/10/2016
Balance Sheet (EUR m)
12/12
12/13
12/14
12/15
12/16e
12/17e
12/18e
Fixed assets
Tangible fixed assets
Goodwill
Other intang. assets
Financial fixed assets
Other fixed assets
Current assets
Inventories
Trade receivables
Other current assets
Cash & Equivalents
Discontinued assets
Total assets
Total Equity
Equity
Minorities & preferred
Provisions
Provisions for pensions
Deferred taxes
Other provisions
Other LT liabilities
LT interest bearing debt
Current liabilities
ST interest bearing debt
Accounts payables
Other ST liabilities
Discontinued liabilities
Total liabilities
359.7
59.4
68.8
107.1
44.4
80.0
562.2
223.7
183.1
33.3
122.1
921.9
538.1
538.1
0.0
13.3
13.3
12.7
357.9
5.4
127.5
224.9
921.9
449.7
67.1
145.7
148.4
11.8
76.6
598.1
211.6
177.5
52.5
156.5
1,047.8
579.4
574.9
4.4
27.0
27.0
40.4
401.0
15.2
114.1
271.6
1,047.8
435.3
65.9
143.8
127.3
14.4
84.0
640.1
185.6
170.5
138.6
145.3
1,075.4
594.6
587.4
7.1
6.8
6.8
57.7
416.3
26.4
109.1
280.8
1,075.4
410.7
92.6
132.4
75.5
9.0
101.3
729.6
166.0
186.9
35.5
341.3
1,140.3
611.7
597.7
13.9
7.3
7.3
79.5
441.8
12.1
139.5
290.2
1,140.3
393.6
106.0
124.7
52.6
9.0
101.3
700.2
182.8
193.5
20.1
303.9
1,093.8
618.6
604.7
13.9
7.3
7.3
79.5
388.4
12.1
129.0
247.3
1,093.8
393.8
106.1
124.7
52.6
9.0
101.3
757.9
191.6
202.9
20.6
342.8
1,151.7
658.2
644.3
13.9
7.3
7.3
79.5
406.7
12.1
135.3
259.3
1,151.7
392.9
105.2
124.7
52.6
9.0
101.3
824.1
200.3
212.1
21.1
390.6
1,217.0
705.6
691.7
13.9
7.3
7.3
79.5
424.5
12.1
141.4
271.0
1,217.0
EV and CE details (EUR m)
12/12
12/13
12/14
12/15
12/16e
12/17e
12/18e
Market cap.
+ Net financial debt
(of which LT debt)
(of which ST debt)
(of which Cash position)
+ Provisions (pension)
+ Minorities (MV)
- Peripheral assets (MV)
+ Others
Enterprise Value
Equity (group share)
+ Net financial debt
+ Provisions (pension)
+ Minorities
- Peripheral assets
+ Others
Capital employed (for ROCE)
+ Accumulated goodwill amortiz.
CE (for ROCE grossed gdwll)
690.5
-104.0
12.7
5.4
122.1
0.0
-44.4
13.3
555.3
538.1
-104.0
0.0
-44.4
13.3
389.6
0.0
389.6
736.5
-100.9
40.4
15.2
156.5
7.5
-11.8
27.0
658.3
574.9
-100.9
4.4
-11.8
27.0
466.6
-9.4
457.2
756.9
-61.2
57.7
26.4
145.3
12.1
-14.4
6.8
700.3
587.4
-61.2
7.1
-14.4
6.8
519.0
-20.5
498.5
800.5
-249.6
79.5
12.1
341.3
90.1
-9.0
7.3
639.3
597.7
-249.6
13.9
-9.0
7.3
353.0
-49.6
303.4
916.3
-212.2
79.5
12.1
303.9
110.0
-9.0
7.3
812.4
604.7
-212.2
13.9
-9.0
7.3
397.4
-41.9
355.4
916.3
-251.1
79.5
12.1
342.8
110.0
-9.0
7.3
773.4
644.3
-251.1
13.9
-9.0
7.3
398.0
-41.9
356.1
916.3
-298.9
79.5
12.1
390.6
110.0
-9.0
7.3
725.6
691.7
-298.9
13.9
-9.0
7.3
397.6
-41.9
355.7
Notes
12
-
EQUITY RESEARCH │ Barco
6/10/2016
Per Common Share (EUR)
12/12
12/13
12/14
12/15
12/16e
12/17e
12/18e
Adjusted EPS (*)
Adjusted EPS (fully diluted)
Declared EPS
CFS
FCF (to Equity)
Dividend
Book Value
Shares (m)
At the end of F.Y.
Average number
Fully diluted Average number
7.23
6.78
7.44
8.50
8.96
1.40
42.47
5.39
5.30
4.66
7.25
5.77
1.50
44.26
0.52
0.51
1.37
2.00
-1.53
1.60
45.20
-4.14
-4.09
-1.90
-2.38
6.22
1.75
46.00
1.64
1.62
1.05
3.55
1.02
1.85
46.53
3.82
3.78
3.82
5.73
4.85
2.00
49.58
4.80
4.75
4.80
6.71
5.68
2.00
53.23
12.670
12.670
13.501
12.989
12.989
13.201
12.995
12.995
13.144
12.995
12.995
13.144
12.995
12.995
13.144
12.995
12.995
13.144
12.995
12.995
13.144
(*) Adjusted EPS : pre-goodwill amortisation earnings, adjusted for post-tax non-recurrent items
Ratios
Valuation analysis
P/E
P/CF
P/BV
EV/Sales
EV/EBITDA
EV/EBITA
EV/EBIT
EV/CE
EV/CE (grossed goodwill)
EV/FCF (1)
FCF yield (2)
Dividend yield
Financial ratios
Interest cover
Net Debt/EBITDA
Net Debt/Equity
Net Debt/FCF (2)
Capital turnover
ROCE pre-tax
ROCE post-tax
ROCE pre-tax (grossed goodwill)
ROCE post-tax (grossed gdwll)
ROE
Working capital (in % of sales)
DSO (days)
Average payment period (days)
Inventory turn (days)
Payout
Margin analysis and tax rate
Gross margin
EBITDA margin
EBITA margin
Adjusted profit margin
Tax rate
Growth analysis
Sales
EBITDA
EBITA
Adjusted profit
Adjusted EPS
Dividend
12/12
12/13
12/14
12/15
12/16e
12/17e
12/18e
7.5
6.4
1.3
0.5
3.5
5.5
5.7
1.4
1.4
4.8
16.4%
2.6%
10.5
7.8
1.3
0.6
4.2
7.9
9.0
1.4
1.4
6.9
10.2%
2.6%
nm
29.1
1.3
0.7
5.4
18.1
25.5
1.3
1.4
-44.4
-2.6%
2.7%
nm
nm
1.3
0.6
8.6
12.5
-28.4
1.8
2.1
5.5
10.1%
2.8%
42.9
19.9
1.5
0.8
9.5
13.3
21.3
2.0
2.3
49.4
1.5%
2.6%
18.5
12.3
1.4
0.7
7.5
9.9
10.2
1.9
2.2
10.0
6.9%
2.8%
14.7
10.5
1.3
0.6
6.2
7.9
7.9
1.8
2.0
8.0
8.1%
2.8%
-0.7
-19.3%
-0.9
2.8
34.9%
20.0%
34.9%
20.0%
18.3%
7.6%
57.8
59.6
104.6
-19.4%
-0.6
-17.4%
-1.3
2.6
29.8%
15.2%
29.4%
15.4%
12.6%
4.8%
55.9
54.0
100.1
-32.2%
-0.5
-10.3%
3.1
2.1
19.8%
6.6%
19.2%
6.8%
1.2%
10.0%
59.2
54.1
92.1
-116.6%
-3.4
-40.8%
-3.1
2.5
23.5%
21.0%
21.6%
22.8%
-9.1%
-4.0%
66.3
76.2
90.6
92.1%
-2.5
-34.3%
-15.9
3.2
25.0%
9.4%
22.0%
10.6%
3.6%
1.0%
65.7
68.7
97.3
-175.6%
-2.4
-38.2%
-4.0
3.1
22.1%
14.7%
19.8%
16.4%
7.9%
1.0%
65.7
69.0
97.7
-52.4%
-2.6
-42.4%
-4.1
3.2
25.3%
17.7%
22.7%
19.8%
9.3%
1.0%
65.7
69.0
97.7
-41.6%
32.5%
13.8%
8.7%
7.9%
5.2%
33.4%
13.6%
7.2%
6.0%
13.7%
30.0%
12.2%
3.7%
0.6%
31.0%
35.0%
7.2%
5.0%
-5.2%
10.0%
36.3%
8.0%
5.7%
2.0%
22.0%
36.5%
9.1%
6.9%
4.4%
22.0%
36.5%
9.9%
7.8%
5.3%
22.0%
11%
22%
-13%
6%
6%
27%
0%
-2%
-17%
-24%
-25%
7%
-9%
-18%
-53%
-90%
-90%
7%
-2%
-42%
33%
-chg
-chg
9%
4%
16%
19%
+chg
+chg
6%
5%
20%
28%
132%
132%
8%
5%
13%
17%
26%
26%
0%
(1) Based on FCF to Enterprise - (2) Based on FCF to Equity
Notes
Phasing out of development capitalisation policy artificially depresses EBIT and net results in '15, '16 and '17. EBITA is not
impacted and as from '18, EBITA equals EBIT.
13
EQUITY RESEARCH │ Barco
6/10/2016
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Investment rating system: The Degroof Petercam stock ratings are based on the estimated performance relative to the Degroof Petercam Benelux coverage universe.
The total return required for a given rating depends on the risk profile relative to this universe. This risk profile is represented by the Beta, as estimated by the analyst.
Low risk stocks have an estimated Beta below or equal to 0.9, Medium risk stocks have a Beta between 0.9 and 1.3 and High risk stocks have a Beta equal to or above
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High
Beta >= 1.3
Medium
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SELL
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ADD
BUY
RP<-15%
-15%<=RP<-6%
-6%<=RP<+6%
+6%<=RP<+15%
RP>=15%
RP<-10%
-10%<=RP<-4%
-4%<=RP<+4%
+4%<=RP<+10%
RP>=10%
RP<-6%
-6%<=RP<-2%
-2%<=RP<+2%
+2%<=RP<+6%
RP>=6%
RP : Relative Performance against Degroof Petercam coverage universe
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