Good morning, ladies and gentlemen. I am Willem Fransoo. I am Director of Investor Relations at Barco. We welcome you this morning at our conference call on the results of the full year 2022. Together with me on stage today are Charles Beauduin, CEO of Barco, and Ann Desender, CFO of Barco. Charles and Ann will walk you through the full year results update under the heading 32% top line growth with significant profitability improvement, positioning Barco well for long-term profitable growth. Charles and Ann will provide extra color on the results and will take you through the earnings presentation, which is available on our investor portal since early this morning. After the presentation, we will open up for the Q&A round when you will have the possibility to ask questions to Ann and Charles. That's it for the introduction.
We will start with the executive summary, the floor is yours, Ann.
Good morning to you all. Happy to share with you the results on 2022, as well as the outlook for 2023. Starting on the summary, 2022 has been a year of strong profitable growth. landing or starting on this top line, an increase of sales of 32%. Orders landed at the same amount of sales. You might remember that in 2021 orders picked up and after the COVID quite well. There was some timing effect or lagging effect into the sales to order conversion. happy that we worked through this challenges on supply chain, that we over the course of the years and in the second semester, we could normalize our lead times and get to more normal delivery terms.
With that, our book-to-bill, as we then call it, orders to sales landed as well. Order book ended at a high, at a record high end position for the years, and more on that later on. Our EBITDA margin operational result increased to 13.7% in the second semester and landed on a full year to 2o%. This has been the result of both improved gross profit margins and operating leverage on the top line growth. You will see later on that this is really across the three divisions. Net earnings landed at EUR 75 million, and with this nice result we will be able, or the board has decided to propose a 10% higher dividend compared to last year. With respect to the outlook 2023, we are reconfirming our long-term profitable growth and EBITDA outlook.
Moving over to the key highlights of the year and the figures, you will see that if you see the comparison compared to 2021, these are all very nice green figures, which is then better except for one free cash flow, which came out lower than the year before. Orders and sales landed at that same figure, EUR 1.058 billion. If we look to the order book, we landed close to EUR 500 million, which is compared to the end of 2019 55% higher. If we look to the sales up 32%. If we exclude, because there was some tailwind from the USD, if we exclude the effect of the currencies, then our sales increased with 2 4% year-over-year. Again, you will see later on that this double-digit growth is across divisions and across regions.
EBITDA margin landed at 2%, thanks to starting with the improvement on the gross profit margin. Gross profit margins improved 3.3%, which is the effect of a better product mix, moreover, the consistent and persistent actions which have been done in calculating through higher costs into sales prices and over the year and in the second semester, avoiding the higher broker fees which we had. This all actually as we worked through our challenges and resolved primarily through redesigns of our boards, actually, through the supply constraints. Free cash flow landed at 3.3%. The lower amount compared to one year ago is fully linked to higher inventories.
In part to higher trade receivables, but that's then fully linked to the ramp up, of course, over the course of the years and the peak sales which we did in the fourth quarter. Net income landing at EUR 75 million or 7% of sales. This sales top line, I've given a little bit more color here, whereby we in the graph show the increase of the sales compared to last year according to the three divisions, and then to the right, the overview of the regional breakdown of the sales growth. Looking to the three divisions, yeah, all noted very nice figures and uptakes, and then rounded, starting with Entertainment, 29%, 31% for Healthcare and Enterprise 36%.
If we look to the regions, both EMEA and Americas, even at constant currencies, landed with more than 30% of growth year-over-year. With that are back at the level of 2 019. If we look to APAC, also a double-digit growth, 10% higher sales compared to the year before. Not yet, this despite, I would say, the lockdowns or the impacts which the lockdowns in China continued to have. APAC is not yet at the level of 2019, that will be a matter of time or short time, I can't tell. Like always in this call, we are sharing our EBITDA bridge from the year before to 2022 here.
It is a little bit of a schoolbook example, the graph or the visual, which I'm able to share with you in the sense, how do you get to profitable growth. It's more sales at better margins while containing OpEx. Of course, as you can see to the bigger block, the extra volume has been the main lever of the profitability uptake. 24% growth year-over-year at constant currencies. Gross profit margins improved, and this in all of the three divisions. We further invested both in roadmap, commercialization, footprint, people, systems, but this contained, and in that sense, keeping this operating leverage well under control. Do mind that in particular in the second semester, the inflation, and in particular in the U.S. and EMEA, did have also a considerable impact.
We look to the EBITDA margins per division, we have healthcare with 11.two%, enterprise 19%, and entertainment almost 7%. One remark on entertainment reminds that they have the most challenges in the first semester relating to supply constraints. With that, if you look first half, second half, they really did a rebound in the second semester. Up for a further improvement towards the more group average levels for the next year. Free cash flow. Free cash flow landed at 1three%. EBITDA margin, of course, the improved gross operating cash flow you just saw. This has been in part offset by higher working capital. Higher trade received was all fully linked to the peak sales in the fourth quarter.
DSO well under control and also well in balance with the average days at which we pay our suppliers. We have the higher inventories and which came out higher than anticipated at a certain moment. It really has to do with the supply change, with the supply challenges which we had, with proactive buying in order to make sure that we can deliver proactive buying in view of also price increases. We do see these higher inventories as a temporary thing and will get more to normalized levels over the course of 2023. With that, our net working capital lands at 14% of sales for last year, and we are guiding there more towards back 10%.
Capital expenditures amounted to EUR 21 million, including besides the normal recurring investments, the further expansion of our China footprint. We renewed here our experience centers, and there is also included projectors which are linked to the first Cinema-as-a-Service contract. Our balance sheet remains a very strong one, and also net cash amounts to EUR 264 million. Next to our financial KPIs, we also further work hard on our non-financial KPIs, which then covers planet, people, and the communities, being the customers in the first place. On planet, there we have three main KPIs, which is the carbon emissions of our own operations and which are then the part of revenues which are with products which have an Ecoscore A or better, which we then called Eco-label revenues.
Happy to see actually two kind of milestones which we reached. If we see to 2022, then the carbon emissions were only half of what they were in the, what we call the baseline level year 2015, when we started to measure those. The main trigger or lever in this is logistics, and is the modal shift, as we call it. Shipments more via boats and instead of via airs and flights. With respect to our sales, we crossed the milestone of 50%. 50% of our top line of our sales is with Eco-label revenues. You might remember that in 2021, we were at 30%, 2022 at 50%, and we work hard to get to that 70% for the next years.
As our business, further grew and nicely picked up, we also did extra hirings, and, at the end of last year, we are in total, with, more than 3200 colleagues altogether, which is a net increase of 5%.
We keep the pulse on how they are doing and how they engage their hours and to keep them also engaged via pulse surveys and also in order to listen and to work further on this engagement. With respect to the Net Promoter Score of our customers, also listening to our customers through regular surveys which we are doing, our Net Promoter Score landed at 44 at year-end last year, which is a little lower than the year before, which is again linked to supply constraints, which we largely now have been able to resolve, but still some work at hand and also relating to post-sales services. With that, actually, I'm happy to give the floor to Charles, who will give you a little bit more color on the divisional results, the outlook, as well as then ready for Q&A.
Thank you, Ann.
Voilà. There we go.
I will try to take you through the breakdown of the divisions. First, let's look at Healthcare. We have record high sales, driven mainly by resuming hospital investments, but also by product renewal and introduction of new products. If we look at the order intake, it is well above pre-COVID levels. Sales are all-time high for this division. We have, of course, had large modality projects, and we have also seen a resumption of orders in mammography. The EBITDA margin is improving year-on-year to 11.two%. The mix of products plays a role, also the volume plays a role, we have had very good results in Healthcare. As well, in the two business units, diagnostic imaging.
In diagnostic and surgical, of course, diagnostic imaging, double-digit sales growth in all the regions and actually more and more going to high-end products that the healthcare systems now favor. We are also seeing large opportunities to expand the portfolio in adjacencies, so like digital pathology, the remote home reading is now very much in fashion for a number of diagnostic specialists. We see also there that the growth is solid. Surgical and modality, we have gaining momentum. We have, of course, there, the push towards digital solutions in operating room and also the digitalization of all the infrastructure in the operating theaters. Sales are driven by several large projects in Americas and China. In all in all, solid sales growth, record high.
Orders are very, in healthcare because they usually we have bulk orders. They are fluctuating. We have a slight decline compared to last year, there is nothing abnormal at that. It's when we register large orders, that makes a difference. If we look at the enterprise, the second division, there, of course, big trends is the back to office wave that has benefited where we have benefited a lot, not only from again, using the offices, but also the hybrid meetings which has become the norm. They have double-digit growth in both business units. We have a growing momentum for wireless conferencing and in hybrid meetings. EBITDA margin for their division is 19.1%. It's fueled, of course, by operating leverage on top line and also higher gross profit margin, thanks to better product mix.
If we look in details to the two business units, meeting experience, sales have resumed strongly. It has started in EMEA followed by the Americas with a little bit more lag in Asia. Hybrid meetings is becoming the absolute norm, our products are today more and more getting the norm for meeting rooms anywhere. We have installed more than 1.1 million meeting rooms. ClickShare Conference is above 60% of our volume. To have an idea of our penetration level, the estimates are between 100 million and 200 million meeting rooms in the world. We still have a job to do.
In large video walls, other division, business unit in this division, we have a top-line growth so that we get back to levels that are close to 2019, mainly driven by large utility and government projects in Americas, Middle East, and Asia. Profitability is still lagging and management intends to conduct a strategic review for this business unit. EBITDA at EUR 60 million. Orders are compared up to 7% compared to 2 021, with the sales at absolute record high of EUR 317 million. For entertainment. Strong rebound as entertainment markets have reopened and supply chain constraints have eased. We have a growing demand. Cinema clearly is not dead, so they have been, again, big orders placed. We have an order book that is at an all-time high.
Sales have been growing throughout the year and with a very strong fourth quarter. The EBITDA margins are still below expectations at 6.9% for the full year. In the second half, they were already at 1tif.6% as supply chain constraints have eased. Also we now expect with the reopening of China to have a much larger impact than before. If we look at the different business units, the cinema industry is rebounding very clearly in all markets except China for 2022. We expect this year also China to join, and the demand for laser projectors is driven, of course, by the demand for quality entertainment, quality images, and the lower cost of ownership for the cinema companies.
In Immersive Experience, we have an outspoken growth in fixed installs, digital museums, projection mapping, simulation, and lots of other verticals in that field. We have also had a strong rebound in events, excluding, of course, China. Orders are for the moment for 2 022 were at EUR 457 million, sales EUR 399 million for an EBITDA of EUR 7.5 million or 6.9% of sales. Traditionally, after breakdown of the divisions, we give you an outlook, and we then will open for Q&A. If we look ahead, actually all our markets for the moment are healthy, are even thriving, and we see very solid trends of demand for our products and our technologies. We see that in healthcare. We see that in enterprise. We see that in entertainment.
In healthcare, we see an accelerating demand in emerging markets for, especially in China, for diagnostic imaging. We see also lots of adjacencies opening up. We see the continuing push for digitalization of operating theaters. We also see a shift towards more high-end products rather than volume products. Enterprise has been the star of the show. Hybrid video-enabled collaboration is today the norm. We have growing momentum for ClickShare. Bring Your Own Meeting proposition, bring your own device is the norm more and more in all the meetings. In LVW, we still see continued investments in control and monitoring. Entertainment, cinema is coming, kicking back. is very hungry for better image and of course, more content and better rendering of this content. Immersive Experience is a segment that is strongly growing and is even now bigger than cinema.
The outlook, well, we want to reconfirm a long-term profitable growth. We, of course, have to make a few assumptions when we give an outlook. We assume that macroeconomic conditions will be relatively stable. We consider that a sales growth between 10% and 15% for 2023 versus last year is achievable. The EBITDA margin is expected to further improve and land above 14% for the full year 2023, reflecting operating leverage and higher sales, as well as improved gross margin because we have easing of constraints on the supply chain, lower cost of brokering, lower cost of transport, et cetera. With this outlook, we think we are able to confirm an increase in the dividend of 10%, so to EUR 0.44 per share. That's a 10% increase over the year ago.
You can see over the graph that the board has consistently increased the share over the last few years, except one time during COVID. This is basically the outlook and the last result. We now open it up to questions.
Thank you, Charles, and thank you, Ann. We're indeed ready to open the Q&A round. If you have a question, you can raise your hand virtually in the system, and there is a button on that on the bottom, and you will be put in a queue. I will then ask the operator to put you in the spotlight here, and then you will be able to ask your question. I would also like to repeat a house rule. Please ask a maximum two questions at a time. If you have more questions, you can queue again. That's no problem. We can have the first question in the spotlight. We have Mark with us. Mark, you're on mute still, I believe. Yes, there you are. Good morning, Mark. Your questions, please.
We do not hear you yet, Mark. Good morning.
Mark, No, we don't hear you yet.
I do see you raise your hands. It might have to do with your headset.
Mark, can you try again? Try again.
Hello, Mark.
Maybe he just froze.
Yeah.
Mark, can you speak?
Hi, can you hear me now?
Yes.
Yes.
We can. We can.
Yes. Yes. Yes. Shoot.
Yes, Mark. Give us your question. Mark, can you try again? I think Mark is not hearing us. I suggest, we move to another question and, we'll come back to Mark in a minute. Maybe we can interact with Mark over the chat. Mark?
Can you hear me now?
Yes, Mark.
Yes, we do.
Go ahead.
Now we have you.
Yeah. Apologies. I am not sure what was wrong, thanks. Well, actually a few questions. Maybe to start with the order strength in cinema, especially also in the fourth quarter. Obviously, we've seen the stories about cinema chains being sometimes in difficulties, attendance level not at the level before. Still you see that very strong intake. What are you seeing behind it? Is actually the effect of high energy prices or maybe the fact that they need to see if cost is actually helping you a bit? What's really behind that strength of the order intake?
Mark, very good question. Yes, energy and, let's say lower cost because you are much more automated and less operators play a role. I think the demand of the movie-going public more and more is to higher quality images. We see that distinctly, the demand for 4K and more, is driving the demand. It's more actually improving the quality of the movie-going experience even more than actually the cost savings.
To brag a little bit, we have also been doing better than competition. We also are gaining some market share in there.
That is also correct.
Absolutely.
How long is that visibility for you? Is that how long ahead can you sort of predict these trends?
Well, the trend, we indicated quite a few years ago that there would be a renewal wave, because of technology change. Of course, we actually do not want to have too long delivery times. This means that we try to have basically a sales to order ratio of about 1.
Okay.
Do you have a second question?
Yeah. The second question that I have is actually on ClickShare. Maybe a bit of similar on the visibility there. It, I think so far you've proven that it is a sort of coming out of COVID device. Is it, you're maybe not fully yet on the 2019 level. There's still some upsides to go. What are you, how far can you look ahead? Also there looking at maybe some companies scrutinizing their CapEx budgets.
Well, I think, Mark, we see a very strong uptake and continued uptake for the ClickShare solution. I briefly hinted in my presentation that we are only yet scratching the surface of the market. We expect actually the product success to continue and to continue for quite some time.
To complement, and a little bit towards your questioning, is there a little bit proactive buying from their end? We are closely following up on the inventory which is in the channel, and that's still, well under control, around two months. It's not that there has been a proactive buying from their sides. We follow up sellout data, every month and this is also confirmed there's the gradual uptake and the success which we have with the ClickShare.
Okay. Thank you, Mark, for your questions. We can bring up the next one.
I think
Yeah, there is one from the chat.
Yes. There is a question from Hugo Sips. He's asking for ClickShare, the year-over-year ASP evolution. Well, the ASP evolution actually what, as was indicated on the slides, what we of course have seen is that there is more and more sales in ClickShare Conference, which comes at about a 33% higher ASP compared to the, what we then call the ClickShare Present. It's more that gradual shift then that is, yeah, also impacting positively the top line and the, I call it, the average ASP of the ClickShare range. The ASP within ClickShare Present as such has remained quite stable, as well as ClickShare Conference. Within the different product offerings, the ASP has not largely evolved, but it's primarily the mix of both.
Does he has a second question? Thank you.
Okay. the operator can bring. Chris, we have you on the spotlight.
Yes, good morning. Can you hear me?
Yes, we can.
Yes, we can.
Perfect. First question would be on the outlook. Of course, very nice to see 10%-15% top line growth given the all cylinders that you're firing on. That's quite good. My question would be on the margin side, given that you've reached already almost actually 14% in Htwo, given that logically entertainment was quite weak in H1 last year with a negative margin. You've got your healthcare impact on your factory, of course, which is hurting margin in the short term. If you look at all the rest, your costs are under control. I'm just wondering, to what extent is there a lot of prudence in the outlook of above 14%? Or is this something which would...
We would see evolving across the year gradually when momentum would kick in and China indeed is confirmed as from the second quarter? That's my first question. Thank you.
Chris, thank you for the question, and also thank you that you already gave the answer, actually.
Again.
It is like you were saying, that gradually moving over the years, indeed, opportunities to improve, primarily with the unlocking of China. Also and in general, with as we got through the second semester also in Entertainment back towards shapes which we like to see. Over the years and how far above the 14, then over the year we will we will see and work on and not see it work on.
It's, also Chris, because, we are slightly prudent because we have a number of new product introductions and also investments in factories that are coming online, which, will bring an increase in cost. That is the reason of a slight prudence, as you remarked.
Okay, thank you. Just second question, perhaps, regarding the strategic exercise you're doing on large video walls. Could you give some more flavor to that? To what might this lead, and what could be some impact on that? Thank you.
That is a little bit early to go more in details. We have decided to start the exercise, and we will keep you posted on what the outcome is. It is clear that our ambition is profitable growth. We need to basically look at what can be done to achieve that target.
Okay. Thank you.
Thank you, Chris. We can have the next person in the spotlight. We have Sebastiaan. Sebastiaan, good morning.
Hi. Good morning. Good morning, everyone. Congratulations for the result. three quick question. Can you update on the competitive landscape for ClickShare, both in Europe and the U.S.? 'Cause it seems to me that you're doing well due to market and market share win, but also some of the competitor might be under trouble. Happy to know a little bit better on this. Second one is, given the Chinese reopening, how you see the opportunity, further acceleration for immersive, any new start of cycle, for renewal of the cinema business? It would be great if you can update. Last one, M&A. I think some of the valuation are maybe still expensive, but less expensive than they used to be.
How is basically the work on the M&A and the probability that we see something or not by 2023? Thanks a lot.
ClickShare.
ClickShare. The competitive landscape for ClickShare is evolving in a very favorable way for Barco because the complexity of the ClickShare, namely, ClickShare Conference has to work together with Teams, Zoom, GoToMeeting, Cisco, whatever. Also, the firmware of that is on your PC, but also with the firmware of the camera together with the firmware of the soundbar. There is a... and most of these systems upgrade constantly. We need also to constantly upgrade our firmware of ClickShare, and we are able to do that in a very successful way. This is requires actually to have a large market share to be able to do that, because to give an idea, last year, Teams had more than one upgrade per day. It's.
We see basically that, this leads to a big success for ClickShare and it's a rising market share for ClickShare.
I'll take the one on cinema in China and the reopening up. Yes, I'm confirming that we do see cinema also in China reopening up like we have seen in the other regions, when then COVID is being unlocked, you can then say. It does take, yeah, 1 or two quarters then to really see that also being translated into our figures. In that sense, very positive on the evolution in China. Convinced that they will rebound back, and we've seen before that they can do that quite quickly. Do mind they need, yeah, a couple of quarters to get their own operational cash flows also back into shape. With M&A, Diane, back again to you.
I think, it is clear that, we constantly monitor the field. At the same time we are very conscious that, we, need to, create value. I think, management is convinced to do something, and the board is also convinced that value creation is paramount.
Okay. Thank you, Sebastiaan.
Thank you, Sebastiaan. The next question in the room? Yeah.
Yes.
We have one more from the chat.
Matthias Maenhaut is requesting to elaborate on the strategic review of large video walls. He mentions that at the Capital Markets Day, you were strategically still fully committed. What has triggered this change? How should we interpret? Are there changing market dynamics at the basis? Actually, what we are reconfirming is that they should get to, yeah, profitable EBITDA margins, which then go up to 5-10% actually. That's, yeah, there is certainly some patience to its type of, but not endlessly, if I can say it like that. That has not changed. The market conditions as such has not changed that dramatically or changed actually, to the negative versus the Capital Markets Day in there.
It is being confirmed that more and more the focus goes, and it's a slower moving market towards software. In that sense, the. We do want to give it, a further push type of. Do not solely think that we might grow ourself out of the problem. The strategic review is really being focused on profitable products and profitable markets. With that, actually, that's the flavor or the more, because we answered already to the question. As you insist, Matthias, which is fine, that's the more elaboration that we can give.
At the moment.
At the moment.
Is there a second question on Matthias? No, we can move to the next person in the room. We have Björn Wolk .
Hi, good morning. Björn Wolk from Lupus alpha. Can you hear me?
Yes.
Yes.
Good morning.
Perfect. Good morning. Thanks for taking the question. My first question would be on the margin improvement or on the healthcare division. You mentioned you had a good product mix there. You have operating leverage. I was just wondering, like what is the margin you feel confident for there when this is growing and when you see the operating leverage really evolving? What kind of margin are you feeling confident there?
We don't guide specific EBITDA margins per division. We do that on a group level. As indicated in your question already and highlighted before by Charles, we are there indeed in an investment modus. Yes, we have profitable growth or a growth on the top line. Also better mix and gross margins. We do invest in footprint. We do invest in roadmap. In that sense, and that is then, a conscious choice for the mid to longer term, actually profitability beyond capturing short-term pickups. They were at an 11% for last year, which was a very nice increase compared to the year before. It's not a purpose that they go down.
Okay. Okay. Thank you. Next question would be then on entertainment and especially like on the projectors and the competitive landscape there. I mean, in the past we had like three players there. Sony, Christie is the new, now this whole industry more becoming like a duopoly. I was just wondering what's the end game of this market and how do you see your position and also your competitor that is left in there?
Well, I think, the competitive landscape is a moving landscape like always. Of course there is, large economies of scale that favor us quite considerably. Technology, on lasers and on, image processing and image activation, like we showed at the Capital Markets Day, is far advanced compared to, let's say, the general market. We think we have a very strong competitive position. We want to further promote this competitive position throughout the industry.
To complement on Entertainment, because you were zooming in on Cinema. Entertainment really have two strong legs now, being the also the image processing. Which is the fixed installs for museum, theme parks, which are also for events. Actually on both, actually, we are well growing its market, Immersive Experience, which is going fast actually. Immersive Experience is everywhere, as they say, but it really is. It's all about visualization. This and the different parts of the world actually, and also there with the focus which we put on it since a couple of years now, also in commercialization really has yielded and is further yielding on top line figures, but also on the market shares.
Okay, thank you. Next, person can. We haveEmmanuel Cael Yes. Hi.
Yeah. We hear you.
Yes. Hi. Good morning. Good morning, all.
Good morning.
Now I have two questions. The first one is on enterprise. Your outlook looks more upbeat versus Logitech. I would like to understand a little bit better why that is in your opinion.
I think Logitech, the outlook that Logitech gave was slightly misunderstood by the market. It was mainly when the segment enterprise covers a lot of home cameras. This market is diminishing when people go back to the office. Also they have a much larger market share or very, very high market share that is under more significant competition threat. Our position is radically different, and so, yes, we are more upbeat than Logitech.
Do you have a lot of earnings? I mean, do you have a lot of visibility on that? Because I think you mentioned previously that you only have something like two months of earnings visibility, I think, or maybe three.
No, no. We mentioned that there is I mean, we use a sales system that is through distributors. What Ann mentioned is that sales results are not at all that we stuff the distribution. At the moment, we monitor that very carefully. The distribution has less than two months of stock or let's say, of product ready to be shipped. This is historically is what we do.
It is correct that the book-and-turn or that ClickShare is primarily a book-and-turn business. In that sense, it's not that we have such a large order book already open for the next months. We do have on a quarterly basis, so the visibility is the clearest for the next three months because we do get from our channels the next quarter forecasts. That's actually where we gain the best visibility from. Is that answering your question?
Okay. Yes, definitely. No, that's clear. Thank you.
Yeah.
And then, um...
Yeah.
No, that's clear. Thanks. The second question I have is on working capital. What is actually the reason that working capital was still pretty high despite the improved supply chains? Is this just a timing effect of a few quarters?
You are such a great guy. You always give the answers and the question. Thank you. Indeed, but it's double. As of course, we have such a uptake in our top line. The outstanding receivables also increase, which is then good news for the cash flow of the quarters, the next quarter then. In that sense, there were higher receivables as for us with an top line increase of 32%, then you have some impact on that top line. DSOs are at 54 days actually, so even lower a couple of days than the year before, so well under control.
transcript of a conversation between a Barco representative and an analyst. Inventories were really higher because we, yeah, we took in more than we gradually do, than we normally do, to secure and to work on the lowering of those lead times towards our customers. So indeed, confirm that is, and also taking sometimes into account price increases that were announced and to be then early on there. So it is a temporary thing, correct. This being said, yeah, it quite had an impact on the year-end last year. But where we indicated 14% working capital on sales last year, we want to get that back to 10% and lower for
Okay, thank you.2023
Thank you.
Can I ask one final quick one on the guidance?
Yeah. Yeah. No, no. On the guidance, the 10%-15% sales guidance, could you give me the kind of split you expect between volumes and price? I assume that this is based on constant FX.
It is based on constant FX. With respect to it is a combination of price and volume. The exact figures, we do not share, but it is a combination. It is a combination and.
Okay, thank you Thank you, Emmanuel. The next question coming in. We have, Tristan
Morning. Morning, Willem and Charles. Thanks for taking my question. I think my second question might have just been answered. But the first question was just following up on the M&A point. Obviously, you didn't announce anything, but you did mention in the press release that one of the reasons the net cash fell was because of some minority investments. I just wondered if you could sort of give a bit more detail on what they were, how big were they, and might we see more of those rather than acquisitions in the future?
Well, these are actually smaller stakes, also below public or transparency threshold. In that sense, we do not disclose the names.
No, that's unique.
One where we have taken a larger share into is Cinionic, where we increased our stake towards 80%. Thank you, Charles. That's one which we can disclose. Whether there will be more, it's not a strategy to take a lot of smaller shares in order into investments. That's not the case.
What's the reason for taking those stakes? What's the benefit to Barco?
It's normally linked actually to some other strategic talks, which we have or reviews which we are doing relating to the companies. More I cannot comment.
I think we can disclose that we do sometimes do investments in strategic technology developments. Yeah.
Okay. Thank you. Yeah. The last question was just on price. I didn't get the question before 'cause I was in the queue, but I suspect Emmanuel asked it. Just that you mentioned that sales volume was the main lever of profitability improvement in the bridge. I was wondering how much was price there, and should we expect more price in two02three?
Price last year, will have been about 5%-7%. Whether to expect over the course of this year more, not expecting to have price decreases. There will be price increases. To what extent? That's a little early to say.
I guess your order book is still at some old prices. Is there some natural price that should come through from the order book?
There is. Correct.
Got you. Thank you.
Thank you.
Thank you. Thank you, Tristan One more from the chat. Just a moment. It will open up.
Indeed. A question from Peter De Maene . CapEx was partially driven by the first Cinema-as-a-Service contract. How do you expect this to impact CapEx going forward as this type of contracts become more important?
Yeah, it was a lower amount still last year, expecting to grow. It's not at this moment, if we guide and for, when we gave the guidance at the Capital Markets Day, actually, for the CapEx for the next three years at EUR 150 million actually, then, we do take into account in this, about EUR 5. Is it then 5-10 impacts, so far, not larger than that stake? It's a little too early to tell how many customers might move over to the CapEx model. Remind that for most of our, projector sales, this comes with an attachment of, an extended maintenance contract, service revenues within cinema, amount to 18% of the top line.
In that sense, it's not that we force our customers to go into that model. It is a choice.
Is there another one from the chat?
Thank you, Peter.
The operator can bring the next person on screen. We have Mark again.
Yes. Thanks. Thanks for the second round. First, extra explanation on the inventory. You also mentioned that partly it's also because of you buying an inventory ahead of inflation, so taking benefit of the fact that those inventory prices will be go up in the future. How significant is that? What kind of amount of inventory did you buy in ahead of price increases from your suppliers?
Well, it could have been inflation or price increases which are already in the past as well. It's a combination. We don't really have it split up, as the larger amount is really to have the supply.
Yes.
Yeah.
Mainly we covered supply to be sure that we could ship product to our customers.
Yeah. With the normal lead time.
That has been the prime concern is our customers. There might be some strategic purchasing, but I don't think they are material in the numbers.
Okay, clear. On healthcare, I think the margin in the second half, you mentioned in the release also that you started up the new factory, that's also pushed down the profitability a bit. Is that something that is just like one half year and then you will start covering that factory and then quite quickly you can improve that margin? Is it something the investment will continue for a few semesters and it takes a bit longer before you recover that profitability?
The factory is now operational. That's the factory in China. We will also build a new factory in Italy for healthcare. To have an A and a B site. We expect, let's say, productivity gains to come through now from the China factory this year, but we will still have costs of the startup of the second factory coming through. All in all, I think the influence on the numbers for two02three will be light to moderate.
Okay, clear. Thank you.
Question from Filip Van de Velde . The book-to-bill in enterprise is moving below one in Qthree and Q4. Do you expect this trend to continue? Has the ClickShare order intake passed a post-pandemic peak?
On the first, thank you for the question, and I'm thinking out loud. Anyhow, the one I would say, book-to-bill to one is more of a long-term average, which is the best one actually. Otherwise, you have customers that have to wait too long type of. That for sure. Did enterprise orders now really or at the peak?
ClickShare.
ClickShare, yeah. At the peak, they were not yet at the peak compared to two019. There's room and for still improvement. Anyhow, that's also what's also we are looking towards. I will say it positively. There is so much growth in the market. We have reconfirmed confidence really on the strength of our proposition there, seeing this in the markets. Saw that really also at ISE in Barcelona actually. Plenty of opportunity ahead, and you will see this reflected in both orders and sales.
Thank you for those questions. Do we have more people in the queue? Maybe one final. No more questions, that's perfect. It's 10 sharp. I would like to thank everyone for your interest today in Barco and in our 2022 results. I would also like to put your attention on our annual report, integrated annual report, which is also published today and will be available on our website. Many thanks to all and have a nice day. Thank you very much.
Thank you.
Bye.
Bye.