Ladies and gentlemen, welcome to the conference call on the results of Barco. I am pleased to introduce to you Mr. Jens Lund Oderwit, CEO Madam Andersson, our CFO and Mr. Carl Vanden Busch, IRO. For the first part of this call, let me remind you that all participants of BOV on a listen only mode.
Afterwards, there will be a question and answer session. As a reminder, this conference call is being recorded. Sir, please go ahead with your meeting.
Thank you, Clotilde, and good morning, ladies and gentlemen. I am Karl Vanden Busse, Head of Investor Relations for Taco. I am pleased to welcome you to this conference call on the results of the first half Thank you, Juan. And today with me in our office, our Chairman, Mr. Charles Baudouin our CEO, Mr.
Jan de Wetzel and our CFO, Mr. Alan de Sedovit. Almond Jann will first walk us through the half year results, provide some extra color on how the growth opportunities are evolving and how we navigate the current and next quarters to come. Our Chairman, Mr. Charles Bodoin, will also provide some extra comments on the Leadership changes as announced last Friday.
We will do follow the sequence of the first half Earnings presentation, so which is available on our investor portal since early this morning. And I assume most of you will have found that presentation. Following the presentation, we foresee some time for Q and A as well. I'll keep it to that for the introduction. And so let's kick it off to you.
Jan, the floor is yours.
Thank you, Karl, And as indicated, we're happy to be joined by Charles Bodoa, Chairman, You'll of course get some a bit more color around the leadership change release or the communication that went out on Friday evening. We're going to reserve some time after Anne and I go to the presentation. So before that, I Okay. First things first, let's go to the 1st semester 2021 results and numbers. Let's go to, I think it's Page 5 in the document's exact Certainly.
Barco's first half results are marked by strong order intake, significantly above what we saw in the first half Last year in the second half last year, reflecting the market activity that we see resuming, picking up again in our different end markets. We already saw the first signs of this in the Q1, but this momentum further built up over the 2nd quarters With order growing in all of our regions, it has led to an increase in our order book by 110,000,000 First at the start of the year and bringing our book now to record levels, above pre COVID levels. In China, our sales are now also back to pre COVID levels, while in the other regions, we see some time lag between orders coming in And sales being realized. This was mainly still driven by continued lockdowns In several geographies, which induced project delays or slower back to office movements, both of which impact Mainly our enterprise businesses and to a lesser extent supply constraints also induced some delays Yes, for a couple of comments. We've seen our gross margin start to recover, 2.7 points up versus the second half of last year, Though not yet at first half twenty twenty levels as mix and some higher variable costs like in transportation still wait on the first half.
We continue to keep our costs in check and saw the result of a number of structural actions that we activated last year Results in an indirect cost below second half twenty twenty levels, while keeping focus on key new product developments and innovation projects. Overall, our EBITDA margin further saw a solid Step up versus the second half of last year, 4 points up and now at 7.5% EBITDA margin with a positive Net income. We also delivered solid free cash flow generation with good reduction of underlying working capital As our finished goods started to move, while payments remained in control. If you turn now to A bit more the regional dynamic on Page 6, we get the following picture. You see all regions show positive orders growth compared to Same period last year.
Also to remind that the first half last year was a semester with still a strong first quarter Yes, and a weakening Q2, especially in China, yes, as COVID set in at that time. In terms of sales, Given the different timing of start and subsiding of COVID, we see positive year over year sales growth in APAC already, And that's mainly driven by China, while in Europe and Americas, we are still in the percent range below last in terms of In the Americas, we see now the cinema industry reopened since May. Box office is picking up and our customers, the exhibitors are repairing Their balance sheet. While they still aim to start reinvesting near the end of the year as we assumed before, We see momentum pickup in pro AV, especially in fixed installs. We are talking here about Digital immersive art installations, museum, theme parks.
And that's a trend that we see across the globe. To share here, the sellout has seen a step up or a step by step pickup over the Q2 as U. S. Corporates now Start to return to office in earnest and our channel further strengthens. The dynamic in Control Rooms is picking up too in the Americas.
And then Healthcare in the Americas keeps going with solid order growth as investments in hospitals I'll resume. In EMEA, we see the same dynamic in Healthcare. Hospitals are resuming their investment plans in Diagnostics and Surgical. In enterprise and specifically ClickShare, we have felt the impacts of the 3rd wave lockdowns in several big Europe countries, yes, specifically in the Q2. But then also we saw a clear reacceleration In June, as major European countries started to unlock after good progress in their vaccination schemes.
And then in entertainment and EMEA, again, like in America, a very good pickup in Pro EV, especially in fixed installs, While cinema exhibitors reopened and are working to get box office back and their balance sheet replenished. In APAC, starting with China, clearly, here we are leaving COVID, I would say, largely behind us with progress Across the board and where our local capabilities put in a strong position to capture the market rebound. APAC outside of China, here, it's still very much an on off dynamic with many countries Going in intermittent work times. And this keeps most of our segments from really picking up with a clear recovery trend. So far, the regional dynamics view, I'll come back later with more business unit view and look forward.
Let's hand it to Anders Sandler to take us into the numbers.
Good morning. Moving over to Slide 7, in which We give you the key figures compared to the first half last year, but also compared to the second half of the Semester of last year, where we indeed had the 2 quarters of impact or the full impact of COVID. What the overview and in particular, the green colors type of sea movements is that we have the worst Cycle behind, which was the 2nd semester of last year. Good recovery on orders and order book, Whether you compare it to the first or second half last year, and this we see in the different divisions and in different regions. If we then see to the sales conversion, this is still impacted by COVID constraint as well as Some component shortages.
If we see the sales figures 1st semester this year versus 1st semester Last year, Zendesen, we are at a minus 10%. If we exclude currency impacts, it's a minus 6%. We land our order book at 391,000,000, which is an additional 110,000,000 order book buildup since the beginning of the year, Good start for the 2nd semester of this year. Gross profit margins, we are kind of halfway, We could say in the sense that improved back versus the dip in the 2nd semester last year with 2.7 percentage points, But not yet at the level of the first half last year. The fact that we did sell more Cinema already versus the 2nd semester of last year as well as ClickShare has helped our gross margin back up As well as what we saw in the 2nd semester last year were more what we call cost of quality related costs, Which is typically inventory write offs and higher warranty costs, which we improved on both back In more recovery times as we are, with that landing at an EBITDA of 7.5%.
Free cash flow, I'll come back to that. But we started we got to a peak in working capital at the mid of last year, Really after one COVID quarter, we can say, start to work on that in the 2nd semester last year, but then continued further In this first semester, irrespective of meanwhile having component shortages, which we have to, yes, type of fight for Like other companies do, but did manage quite well in this 2nd semester. Net income landing at EUR 2,500,000. Moving over to Slide 8, same figures visual, the operational results, EBITDA First half this year compared to the second half last year. So how did we get out of type of the dip, I will call it, in 2nd semester last year, currencies didn't really play.
If you compare it to the 2nd semester of last year, sales started to increase. It's Primarily the orders and order book, which are a big up. The sales conversion will be more than towards the 2nd semester of this year. But gross margins started to pick up, and we did further cost containment along the company within gross Profit margin and also indirect costs, and with that landing at 7.5% or $27,000,000 EBITDA. Moving over to Slide 9, the income lines between EBITDA result And net income also here, we compared it versus the first half of last year as well as the second half of last year.
So we restored the EBITDA back to the 7.5% in the reference versus the second half of Last year improved it with rounded €15,000,000 Between EBITDA and net income, depreciations are Some lower compared to last year. Impairments, we still had some restructuring costs in the 1st semester of this year related to diverse cost resets, which we further did, but the main impact we had and have taken already last year. EBIT, dollars 23,000,000 Stands, which is in line with the 1st semester of last year and then landing at this 2,500,000 $17,000,000 is better than the 2nd semester of last year, not yet at a level where we want to be. Moving over to Slide 10 with an overview of the cash flow and balance sheet or net cash. Free cash flow, dollars 35,000,000 operating cash flow at $21,000,000 is net after payouts relating to lay off the restructuring to the tune of $4,800,000 We reduced our working capital in the 1st semester This year with €29,000,000 and now our net working capital is back at 8.3% of sales.
DSOs further improved certainly compared to where we were at the peak a year ago When we started really having the hits type of and when we primarily in cinema agreed with customers to give them payment plans. Meanwhile, a year further, we have seen and reported on this at the end of the year and at the end of the first A good progress. We have not gotten any customers, which in the end could not pay. Payment plans were diligently followed up and followed by the customers. So in that sense, good news.
There's Some further improvements still to do, but well on our way. Inventory versus the beginning of the year are flat, But this is a different mix in the sense that we sold all of the finished goods, which we kind of have. Raw materials did pick up in the sense that, yes, in the, call it, the fight for components that we are doing what we can And managing this Wow Hours components in. Terms are still low at 2 Point 1, the 3rd where we do have still too much of finished goods, Except again, these are not all projectors or in that sense do not have a risk to the balance sheet or the profit and loss. Payables increased, if you look to the figures of the free cash flow, which we reported, and this is linked with The increased raw material purchases, the average days in which we pay our suppliers, It's not that we did any delays over there.
This is 46 days, which is quite well and balanced with the DSOs, in fact. We stepped back our CapEx and CapEx investments. The increase which you see year over year is linked to the new health care factory in Suzhou, China. With that, we are lending our net cash $263,000,000 up versus the beginning of the year with $70,000,000 included in there free cash flow deducted The dividend, which was a contained one, in fact, because it was an optional dividend and about half of the shareholders We decided to reinvest in the company, and we did sell a minority investment position This has cost or which has resulted in an increase in the net cash. Next to our financial KPIs, happy to also again report on the progress with respect To our nonfinancial KPIs and listing here on Slide 11.
2 of those in the area of planets We highlight here the percentage of turnover, which we do with products which have an ecolabel. Ecolabel within Barco means that it has an A or minimum A plus AECO score. We are now the percentage of Sales is now at 33% with the new product introductions over the last 2 years, which we have Which we were able to do with products in this category, we are well set to get and move towards our target, Which is 70% by to reach by the end of 2023. At the right hand side, I mentioned here within communities the Nat promoter score, which we started to measure quarterly. And it's not only about measuring it, but also making sure that we pick up all of the recommendations which we find in those with our customers.
Net Promoter Score at the midyear was at 48 points. The target is to get to a minimum of 50 percentage With that, I'm pleased to hand it over again to Jan, who will give more color on the divisional results.
Thank you, and then let's start with entertainment and starting with cinema. So as I said before, we saw a strong recovery for China already, and we saw that in the Q1, Yes. And that continued over the Q2 also in terms of our technology shipments into the Chinese market. In the rest of the world, we saw cinemas start to reopen again mid-2nd quarter with movie slates being released and blockbusters Starting to behave like blockbusters in terms of drawing spectators to the cinemas. As expected, The replacement projects as well as new deployments still remain at a low level at this point in Americas and Europe exhibitors repair their balance sheet.
Though the indication remains that near the end of the year, this will unlock again, and We also do not see any order cancellations in cinema. In addition, cinema starts operating again. We do see our service revenues Come back. One overall trend that we like very much is the observation that premium cinema is getting its fair or rather unfair share of the box office, which plays into the strengths and capability of Barco. In Venues and Hospitality, we see 1st, live events, either entertainment events or business conferences being planned now as of Q3, Driving positive sentiment for investment pickup later in the year.
In ProAV fixed installations, We see a clear step up in investments in digital art, immersive experiences, museums, theme parks. These are the earlier COVID proof type of entertainment opportunities that opened early in the post COVID cycle. We see this across the globe And also in China, which is already above 2019 at this point. We have built over the past years a solid portfolio and market access towards of these segments and are enjoying the fruits of that investment at this point in time. For simulation, here again, Strong order book, but still some projects delayed in execution as a result of primarily COVID lockdowns Yes, in some of those emerging countries.
So if you take entertainment overall, we see Venice and Hospitality And China going strong and other segments, including China, picking up near the end of the year. We have added to this page the bar Chart graph showing orders and sale, demonstrating the quarter to quarter dynamic that we see in entertainment. Also at the division level, you see a solid step up in EBITDA margin versus the first half of twenty twenty despite volume Still being lower than the first half last year. If we move to Enterprise on Page 13, Receivre Control Rooms solid order intake, again, in EMEA and Americas, where we are winning share with our expanded value proposition, both in terms of hardware and software and upgrade offerings. The challenge over the first half remains the conversion from orders to sales, Where still several project implementations got delayed because either the site was not ready or accessible for the solution integrators or other supplies beyond Barco Technology, we're shipping leads.
For corporate, mainly Klipshare, Here, each quarter further proves the correlation between back to office movements and the pickup of clayshare sales. On the division level, you see the gradual resumption of the quarter to quarter growth in orders and revenues, but still a lower year over year EBITDA margin, Mainly caused by mix.
If we
move to Page 14, we go a little bit deeper in ClickShare. The wins that we see with Big Fortune 1,000 and Midsize Corporates further confirm that over the Q2 the product market fit of our ClickShare portfolio. For ClickShare Conference, we continue to expand the channel as well as a number of technology alliance partners. In terms of market and return to office, different entities, different service surveys Want to return over the Q3 or September after vacation in Europe and U. S.
Also out of these surveys, it's clear that IT and facility managers increasingly indicate having video collaboration investments On top of their list. The graph on the right shows the sellouts pre COVID during 2020 And now 2021. Okay. Sellout is the sales of ClickShare from our resellers to end users and customers. Where you see once more the correlation with the lockdowns in the European and Americas market primarily, You also see for 2021, the June pickup as Europe started to unlock And corporates in the U.
S. Started their back to office drives. ClickShare conference grows also faster Van Flixhare presents as expected and is now 40% of the volume, up from 26% 6 months ago. If we then move to Healthcare. Here for Diagnostic Imaging, we've seen intensified demand from our OEM customers as they step up production for modalities and Diagnostic Imaging Solutions in North America and EMEA.
Here we also expanded the portfolio with displays for digital pathology, a Pathology, a new category that we launched, collaboration enabled displays software solutions to manage display installed base for hospitals. For surgical here, we see the market for digital integrated operating rooms further Thanks for the penetration of digitization in operating rooms is further increasing. This plays to our Nexus software offering. Here, we are further expanding the partner base, both from a channel and integrator as well as from an OEM partner perspective, While further expanding the portfolio with software offerings like Nexus Live, a solution that enables hybrid collaboration in And around the operating room. Overall, and the graph maybe showed as best, we see the strong quarter to quarter progress on orders And sales again across all regions where China showing strength with our in China for China strategy And we're at this point, we are already in the start up of our new factory in Suzhou, the new health care factory in Suzhou.
The EBITDA margin for Healthcare is still below the first half of last year, but this is mainly driven by the investment setup We did in new products and the investment in the China factory and some inflation on components and freight costs. So Thus far, the update on business and market dynamics we saw for the 1st semester, let's now look Forward to the second half, the second semester. On Page 17, I think some of you may remember this slide from previous calls giving a high level view on how and when we see full recovery across our different divisions. At the start of the year, we indicated that we expected Healthcare to grow Yes. In 'twenty one compared to 'nineteen, enterprise recovering to 'nineteen levels during the year 'twenty one and entertainment only starts To get to 2019 levels, yes, over 'twenty two.
I would say today, these projections are still largely correct with some pluses and minuses. For Healthcare, we're on track with these assumptions. The market is steadily coming back to 2019 and beyond levels over this year. Hospitals are getting back to normal on their investment While catching up delayed procedures in surgery and diagnostic. For enterprise, we are on the recovery track, But here, the cautiousness at the beginning of the year that we had with regards to potential new COVID waves Has proven to be warranted definitely in Europe and large parts of Asia beyond China, Which makes or which made that some of the revenue shifted from second quarter to second half.
For entertainment, cinema is on track, meaning good momentum in China and in the Western world, cinemas reopening With boatbusters being released and the expectation that pickup in shipments of projectors would come in late 2021. For ProAV venues and hospitalities, we see a more positive dynamic than assumed, And this links to the fixed installed markets where you see strong pickup in investments in new venues in Asia as well as Europe and U. S. And so with that, we can go to a short outlook update on Page 18. Looking ahead to the remainder of 2021, the 2 main uncertainties we are planning and managing around.
The first It's the steadiness of the economic recovery where we expect to see our markets further progress in their unlocking and resumption of volume. And then second, there are the factors that impact the orders to sales conversion speeds. The first one is the back to office movement A link to the unlocking of the COVID restrictions. Yes, here we assume further progress in EMEA and U. S.
With China already unlocked, with the rest of APAC, yes, we expect still to be in a start stop mode over the next several months. Then there is the impact of component shortages in supply chain. That risk was already there in the first semester, but we managed that down to a limited impact. We do see some more risk in the second half, Specifically in the Q3, though we believe we can retire a large part of it. As we continue to execute on our daily war room work With suppliers, with brokers, our supply chain as well as our design engineers designing in alternative components.
So with that in mind and based on a very solid order book, we are confident that we will see sales for the full year Show a market increase versus last year. And with the full year EBITDA margin higher than the EBITDA margin that we saw for the 1st semester of 'twenty one as the business maintains its focus on operational execution while leveraging our investments In the market and portfolio to strengthen our position. So with that, we are at the end of the financials updates and the PowerPoint. And as I indicated at the start, I'm going to now hand it to Charles Beaudoin, our Chairman, to talk to the organizational announcements that went out last Friday evening. After that call, we'll open it for Q and A.
Thank you, Jan.
First of all, I would like to thank Jan for the great work he has done at Barco. From a very loose organization when he came in, we are structured, streamlined, Organized and developed the organization. It has been a pleasure to work with him, And I think all of us will have great memories and draw great inspirations On everything he has done for Barco. The Board has decided That it was time for new challenges or to face the new challenges. And Barco has, at the same time, its biggest opportunity and its greatest challenge in technology.
We need to accelerate on R and D and innovation. And therefore, barcode like ASML, The greatest European tech success and a lot of other tech companies will move from a single CEO To co CEOs. I'm Steigen and myself will have the honor to lead the company. Aside the focus on technology, we will also accelerate the internationalization And puts much more emphasis on developing our different business units to serve our customers better and grow Barco. The results That we have seen today, our first indication on where the company can go.
We believe very strongly in the future of the company and in the possibilities that we can develop together in the company.
Thank you, Charles. So with that, I'm going to hand it back to Carl to start and manage the Q and
A. Yes. Thank you, Charles. Thank you, Jan. Thank you, Al.
We will indeed now open to the Q and A session. The operator will also tell you how that works. First of all, 2 house holding topics. We do have a hard stop at 10:25, so we will have to Thank you for that. Also, please stick to our traditional approach of maximum 2 questions at a time.
And in case you have more questions, then please queue again. Over to the operator.
Thank you, sir. 01 on the telephone keypad. We have one first question from Mr. Matthias Manard from Kepler Cheuvreux. Sir, go ahead.
Yes. Hello and good morning, everybody. Two questions from my end. First question is actually on the leadership transition. As Charles has mentioned rightly, there will be a focus on internationalization and technology.
What can we expect in terms of M and A, will there be an approach? Will there be an intensification of M and A efforts? That would be my first question. And then secondly, question maybe on the financial guidance. You speak about a marked increase And a full year EBITDA margin that will be higher than the 1st semester.
How should we read this from a quantitative perspective? And do we Need to see sales up double digit. And then will the EBITDA margin be close to 10%? Or how should we interpret this? Thanks.
First question, Charles, was for you, I think, On the leadership transition and perhaps more focus on M and A.
I think
What the team and the Board really aim for is accelerate investments In R and D, in order to basically be able to grow and expand the company. The therefore, also that we have attracted the top technologists as co CEO. Specifically, the M and A structure or the M and A, for the moment, I think There are no concrete plans, but of course, we always look on the radar. We do have the cash if an opportunity presents itself to act.
So maybe I'll pass to Anne on the I'll take the second question. So yes, thank you for the question, Matthias. So on the outlook statement and the market increase, So it is clear that visibility is gradually improving, but there are still uncertainties as we move into the Taking these assumptions into reasonable ways into our guidance, We believe with market increase that top line should be beyond light or modest. So without really putting explicit percentage points to what we mean with market has increased, so it should be beyond the trivial increase clearly. So both on top line and EBITDA, we believe that The consensus for today is now within that range of the market increase and the EBITDA improvement.
And so we will further update you with the next quarter results on how we are moving towards that target. So thank you for kicking off the Q and A. We'll hand it over to the next
We have a next question from Mr. Christophe Beurhin from Kempen. Please go ahead.
Good morning, everyone. Hello. My first question is actually on ClickShare. Can you simply Explain me if the volumes of units sold of ClickShare in the first half of twenty twenty one Is higher or lower compared to 2021 second half?
Okay. Perhaps, Christophe, I'll take this one as well. And I'm not going to talk Exact amount, so you can definitely reach out to me after the call. Yes. So the numbers that we indicate where we talk about in So based where we talk about percentage points, it's clearly there are clearly there to indicate the trends Always also rounding numbers.
And so just two words of explanation. If we talk total installed base, that is a rounding Based on ClickShare's installed in meeting rooms, so close to sell out data, In the current case, the number shared is a very conservative data point. And then if we talk about the split between the subsegment ClickShare Conference and ClickShare Defense,
That
is then based on actually in data and on sales, not units sold. So there may be sometimes temporary discrepancies between the sell in and the sell out, but that typically Shows a good conversion as we move on. So we can definitely undertake that a level deep later today. Okay. But I'm still
a bit puzzled simply on the EBITDA result of H1 on enterprise. It's, of course, very interesting to know whether Control Rooms was EBITDA positive or not. And also on the presentation on Slide 14, you gave a short image On the evolution of units, and we see a drop after March. Is that explained by the prolongment of Work from home trends or and do you expect that maybe to come back in June, July until September?
Maybe on that one. So the drop after March in that red line is Germany going back into lockdown, Yes, several Nordic countries going into lockdown. France remained quite strong. And then the UK, At that point, it was weak. Yes.
What you see in June is Germany and Nordics coming back, France continuing to do well and U. K. Starting to So that's what I said before. If you plot the, let's say, the different movements in Europe with lockdowns, You get a very clean correlation with the sellout trend.
On the EBITDA, we did not disclose the exact numbers, but Floor rooms was closed, but not at breakeven level.
Okay. Then I will queue in again. Thank you. Thank you, Christophe.
Thank you, sir. Next question is from Mr. Marc Esoin from ING. Sir, go ahead.
Yes. Thank you. And Also on the leadership change, you mentioned, I think, a few things to accelerate R and D investments Different business units. Should we read that this is going to be a change of strategy from what it is, Going to invest more in the coming years and also different business units. What do you mean with that demand?
The transition phase is ongoing. Jan is fully CEO till the 1st September, and we will have a press So an analyst moment in October together with the core CEOs. And I think at that point, We will be better in position to answer this question.
Thank you, Mike. You still have credit for one more question.
Next question is from Mr. Sorry?
Yes, can I ask Yes?
Can I
ask a question?
Yes. Firstly,
I'm still a bit on a follow-up with that one, because then I would still like to understand why this was the moment to make that change. Is it Are there maybe because of COVID so many new opportunities that you really have to accelerate your strategic thinking on this one? Leland is kind of more of a total. Just to understand a bit better, why now? To answer your question, there is no link with the results.
It's purely due to It's a calendar timing that the two press releases went out together. There is absolutely no link between them. The Board has Had a lot of discussions on how and where to go. And out of these discussions came in the end the decision to have a leadership change. This is going in the in a positive way, Which we want all involved to see the opportunities And to see that it's a way forward for the company.
Thank you, Taro. Over to the next question.
Next question is from Mr. Keith Kippos from Degroof Petercam. Sir, please go ahead.
Yes, good morning. Thank you for taking my questions. First one, back on ClickShare. Nara, we've been working in the office for about not in the office, for about 15 months and the return has been quite slow. How can you make sure that when the offices do reopen that indeed corporates do go for click share versus competition?
Can you still are you still confident the current offering is sufficiently advancing for corporates? And then my second question would be on the To what extent could you mitigate the component risk? You've already mentioned the ASML Evolution, of course. And Derek, clearly, there is a shortage in the entire sector. But can you differ from one component to the other?
How is the stock level? Could you share some light with us on that? Because it might also be, of course, a hindering of growth in the second half? Or is that not an issue? Thank you.
Yes. Thank you, Clint. Good questions.
I'll take both. Maybe the first one on ClickShare. It's one reason why we refer to The Fortune 1,000 customers, I mean, big ones and midsize. At the end of the day, what they buy and how they look The best confirmation for is ClickShare, ClickShare Conference, ClickShare Present, is that providing Yes, the right solution for them at the right cost and the right flexibility that They meet in terms of this complex ecosystem where agnosticity is a very important factor for the future. So Yes.
We I mean, quarter by quarter, I mean, we see fantastic deals, big deals, big corporates, yes, smaller deals. The other factor is the channel. I keep close touch with the channel, and my question is still, yes, do you guys feel you can make good money with this product? And as long as I see the fire in their eyes, I think that's a good sign Yes, for the potential of ClickShare. But of course, ClickShare and ClickShare conference is a product that requires hybrid operation and requires Yes, people or a part of the people to be back into office, which are surveys and also the channel indicate Yes, would now be happening at earnest over the summer and definitely as of September.
In terms of your question on components, I said before, the first half, that risk was There, we've managed very well through it. In fact, in the Q4 last year, we already saw this coming and Have upped a number of our components. At the same time, we are Managing this risk on a daily basis. We're working with our suppliers In helping them to find new components, we're working with brokers Yes. To buy components from places where we typically do not buy them, we help our supply chain to swap Sometimes components between some of our suppliers.
And then we're very active with our R and D managers to Redesign in either new components or older components, okay? What we see is that sometimes Yes, a new version of a component is not available anymore, but yes, 2 versions older is still available in the market with brokers And he's fully operational into our printed circuit boards. So I mean that's the Let's say that's the hard work, the hard daily work that's going on every day. It is a work of 2 steps forward, 1 step backwards every day. We assume that we're going to continue doing that definitely over the rest of the year, maybe into Yes, next year.
To give you a little of feel, when we look back at the first half, We estimate the impact on our top line of component shortage At around €5,000,000 in top line shortage. Yes, so a big risk that we brought down to a relatively The main impact on the sales. For the second half, yes, we assume a bigger risk, although We step up or continue to step our actions. At this point, bigger means in the €25,000,000 impact range Yes, as compared to the first half.
Thank you.
Thank you, sir. We have the next Question from Mr. Matthias Manard from Kepler Cheuvreux.
Hello, Markus. Hello. Yes, sorry, I was
on mute. So follow-up question on the CEO succession. Historically, we've been talking here that despite COVID In fact, the company would again, in the midterm, revert to the margin bracket that was provided at the last Capital Markets Day being 15% to 17% adjusted EBITDA margin. We now hear the need to invest additionally in R and D. So I was wondering, can we still I think the company will revert to that adjusted EBITDA margin or is that target actually now being reviewed and will be updated in October?
Thank you.
So that's a question for you. At the moment,
the target is still valid. We want to focus much more on the effectiveness of R and D than actually on Spending money for spending money.
Let me maybe add one thing to that. So as Charles said that it's 14 to 17, not 15 to 17. We did link it to 22, okay, which Initially. Yes, initially, which now with the COVID timing impact, we linked to 'twenty three to get to that level. Yes.
When we expressed that target or that outlook already in those longer term plans, yes, we assumed a further Stepping up, yes, of our spend on EBITDA, yes, as our top line continues to expand, too. As I think we've told you in the past, Barco has an above average Investments in R and D, if you look at it as a percent of sales. And as Charles indicates, Our challenge is not to spend more money. Our challenge is to get a stronger return on investment on that spend. And that's in part why Yes.
In terms of leadership and focus, yes, winning in stronger capability to drive that return on R and D investment.
All right. Thank you.
Yes. Thank you, Matthias.
Thank you, sir. We have another question. We have another question from Mr. Guy Sips from KBC Securities. Sir.
Yes, thank you. My question is actually a mixture of the question of Christophe, another analyst. It's a little bit on the ASP of ClickShare. Do you see some evolutions of the ASP? Is it going down?
And second question is on the entry of the C5 and the C10 Range in the Klitschar family that was launched at the end of the first half, I presume. How do you see the benefits of this product Going forward. Thank you.
Yes. Thank you, Guy. I'll take the first one, then One ASP on the future, it is somewhat difficult. On one hand, you know that the Hipshare conference is at a higher ASP compared to the conventional Hipshare Portfolio, you can take as it's on Pru approximately onethree higher. So in the mix, that is somewhat evolving, of course.
And that's something that we will follow-up and also be able to give you more insights as we move on.
Perhaps on C5C10, yes. So C5C10, yes, this is what ClickShare presents, Yes, the old ClickShare. So the C5, C10 is an upgrade of that ClickShare present with A number of new features, but equally important, higher speeds, lower latencies. And so that's the value for the customer. What's underneath is that the C5 and C10 is built on the same Platform, Software and Hardware as the ClickShare Conference portfolio.
Yes. This means internal optimization, both from a hardware management, but also From a software platform management, where essentially we have one underlying software platform that then gets Configured for different type of applications, either video conferencing or Pure presentation share. So it's both a new product, more value for the customer and more Internal Productivity and Platform Consistency Insight Market.
Thank you, Jan. With that, I'll hand it over to the operators. There are more questions In the queue.
Yes, there are 2 more questions in the queue. The next one is from Mr. Christophe Berrien from Kempen. Sir, go ahead.
Yes. I have a last question on cinema. If you make the math, Sales dropped, of course, compared to H2 2020. I think it's by 15%. Can you maybe elaborate or Give more explanation on what the major reasoning behind that was.
Is it because The service revenues came almost to 0. Is it that yes, can you elaborate there a bit more, please?
Yes, I'll start on that. And then did you give already one of the reasons, so cinemas Hello. Also, how did the service revenues? So that's something which we expect We're changing as we move into the first reopening in EMEA, in North America And so kicking off also the service component again. Next to that also what we Realized and give indication in our full year results in Q4, we had some extra order intake end of year, Extra seasonality, which helped pushing the 4th quarter results.
And so where we now see a more kind of steady evolution in the cinema sales. So as indicated in the press release, indicated the comment by Jan earlier here, we're still on that same So expecting the renewal wave of cinema to kick in at the end of this year, beginning next year. We expect to see some more proof points. By the end of the year, proof points could be order contracts or even funnel dynamics. So that has essentially not changed compared to what we have shared before.
Okay. Thanks.
Thank you, sir. Next question is from Mr. Sebastien Le Brunet from Urokad G. S. Johnson.
Sir, go ahead.
Yes. Hi, good morning. Just thank you, Jan, for everything. Happy to keep in touch. Just two questions.
First one will relate to ClickShare. Thanks. And we're still waiting basically most of the people to get back to the office. Can you elaborate on
the number of dealers? Have you been able to grow the number
of dealer and BioMATCH? Because I think it could be like one indicator. That's the first question. The second one will be for So, beaudoin, please. As you've been buying from shares some months ago, shall we expect, given the net cash position at Barco, that you can implement Share buyback program that could be used also maybe for any potential acquisition going forward.
Thank you.
Shall I take it off on
the first one? Yes, you had the specific one?
Well, yes, not in front of me, but so we do indicate Sebastian, and good morning, by the way. We do indicate on that Slide 14, so the partners that have Growing with 50% compared
to a year ago.
I will look back into what How does that change in terms of distributors and in terms of resellers? We have the data for it. So I'll definitely provide that to you later today.
This is
a good extension on the alliance program.
Go ahead, Jan.
We'll look back
in a minute because we had that number. We didn't I think it's okay to share that. But let's maybe after Charles answers to try to find back That specific
number. Thanks.
So on the question of share buybacks or M and A, I am sorry to disappoint you, but I will Refer to October and the meeting in October, I think at the moment, there is No, it would use to be given.
So Sebastien, on your first question, so the number moved from around 1,000 certified Partners, distributors to 1500 over the first
half of the year.
Okay. That's interesting. Thanks a lot.
Thank you, sir. Next question is from Mr. Chris Cusickos from Degroof Japan. Sir, please proceed.
Yes, good morning. Quickly on Healthcare, I'm just wondering what explains The steep drop, you could call it sequentially on the orders in itself, it is not that much impacted normally, I would say, By the lockdowns with hospitals reopening a little bit, is that one of the explanation? And secondly, of course, we also saw some hiccups in the Sourcing, and that explains why sales were perhaps not at the level that you should anticipate. Could you elaborate a little
bit on that? Thank you. Yes.
So in terms of the order or the order book in the Q1, we do have a number of our OEMs that Every 2 years, yes, place order for 2 years. So we've got 1 in the Q1. So Yes. That gave sorry, 3 to customers. So that gave that little Speak there.
We've seen that every 2 years, we typically get a good Q1. You see the trends getting further in the Q2. In terms of the impact On sales, out of the €5,000,000 impact, I would say the majority of that came Claim from Healthcare. Yes, specifically on some of our MAXIS shipments that got delayed.
And maybe to complement on that, Then you see the minus 4% 1st semester versus last year. If we exclude currency impact, then it was a Plus 1%, so in line. So currencies also do play here.
Yes. Healthcare is the one which is more exposed to North America. And so Adi results, Adi results, Adi basis currency effects. Sorry, I lost
track on the second question.
Can you just repeat, Chris?
No, indeed, it was on the healthcare, indeed, on the hiccups. And I think it has to do with some order delays, but that has to do probably with some Shortages as well from your side, I presume.
Yes, correct. Okay. Thank you.
Thank you, sir. We have a next question from Mr. Christophe Berrien from Kempen. Sir, head.
Yes. Last question from my end. I don't know if the question was already raised, but if I'm allowed to Post the question, Jan, do you already know what your next journey will be? Where are you heading to? Is that already known?
The
answer is no, right? At this point in time, I'm fully focused on Leading a very good and productive transition over the next few months in parallel. I'll start after taking a bit of vacationally looking what's next for me. But at this point in time, that's definitely not my focus.
Okay. All the best. Thanks.
Sir, we have no other questions. Ladies and gentlemen, I would like to remind you that if you wish to ask one, you may press 1 on your telephone
keypad. Okay. We'll wait perhaps a Couple of seconds if any more question would pop up. Okay. So then if not Okay.
Sorry, one more question.
One more question from Mr. Sebastien de Boillier from EMEA. Please go ahead.
Yes. And I hope I won't have to wait till October, but just I'll try in case. When you say you look for More effectiveness of R and D Spending, which division is mostly into focus? Will it be fair to say it's Medical?
I'll answer that. I would say it's across the board. I think where we have been working and will continue to work is to strengthen our Product management capability in terms of understanding real customer opportunities in significant markets And marrying that with breakthrough technology innovation, yes, to be able to put propositions in those markets that are better In quality, lower in costs and as such, give Barco a commanding market share in these global markets.
Okay. Thanks, Leland.
Thank you. We have no other questions.
Okay. If there are no more questions, I believe we can conclude this Q and A. And also the well attended first half twenty twenty one analyst and investor session.
Let me thank you all for participating
in this call. And should there be any more questions come up, don't hesitate to reach out to me. We remain at your service for the entire week before we then move to a 3 week summer break. Thank you all and have
a great day. Bye bye.
Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.