All divisions delivered solid sales growth in 2019 resulting in consolidated growth of 9.5%. In Entertainment sales grew 11.3% mainly driven by EMEA and North America where Barco leveraged its market leadership to capture demand bolstered by the cinema replacement cycle, which began in 2019 as anticipated. In Enterprise continued double-digit growth for ClickShare and low single digit growth for the Control Rooms segment resulted in sales growth of 6.8%.
Healthcare posted strong sales growth of 9.7% as result of solid performances in both the diagnostic and the surgical segments.
Disciplined opex spending combined with topline growth led to an EBITDA margin expansion of 2 percentage points to 14.1%. All divisions reported EBITDA and EBITDA margin improvements. Consistent with EBITDA improvement, consolidated EBIT grew 20 million euro to 110 million euro or 10.2% of sales. As a result of improved EBITDA and effective working capital management, the company also generated higher free cash flow.
During 2019 Barco executed on its ‘fit to lead’ program, a capability-building and organization efficiency plan. The company initiated several initiatives, including expanding the channel network, services and partner programs, strengthening its software team and building a company-wide software platform with common components used across divisions.
Under the “In China for China” program, Barco’s Healthcare R&D and production site in Suzhou is now operational and it yielded the targeted growth in the Chinese Healthcare market. In Entertainment, Barco launched the Series 4 laser cinema-projector platform and secured landmark projector-replacement contracts, reinforcing its market leadership position. Barco also continued to invest in the ClickShare product portfolio and is launching a new product category in the first quarter of 2020.
Quote of the CEO, Jan De Witte:
“n 2019, we delivered on our ambition to resume topline growth with sales increases in all business segments,” said Jan De Witte, CEO. “Through our dual focus on growth acceleration and judicious opex spending, we added 2 percentage points to EBITDA margin for the third consecutive year.
In 2020, we plan to remain focused on capturing the growth opportunities in our markets based on a more competitive Barco, while continuing to invest in capabilities to grow into an outcome-based solutions business that leverages hardware, software and services capabilities. Our performance in 2019 and goals for 2020 keep us on our sustainable profitable growth path.
Outlook 2020
The following statements are forward looking and actual results may differ materially.
For 2020, and assuming currencies remain at 2019 average levels, management expects a mid+ single digit topline growth and an improvement in EBITDA margin toward 15%.
Management‘s full year outlook takes into consideration anticipated softer demand in the Entertainment segment in 2020 in China as a result of the Covid-19 virus outbreak and assumes that factory and logistics restrictions are lifted and resolved by end of February.
Considering some timing effect as a result of the Covid-19 virus outbreak and ClickShare Conference launch dynamic effects, management expects the full year growth to be more pronounced in the 2nd half than the 1st half of 2020.
Read the full press release here.
