Good morning, ladies and gentlemen. Welcome to the earnings call for Barco's full year results 2024. My name is Willem Fransoo, and I'm the head of investor relations, and today we are publishing our results under the heading "Strong Cash Generation in a Challenging Year." The results will be presented by our CEO, An Steegen, and the CFO, Ann Desender. This will take about 15-20 minutes, and after the presentation, we will open for questions, and I will now give the word to An Steegen, who will kick off the presentation.
Thank you, Willem, and good morning, everybody. So let me start with the summary of the group's results for 2024. After a very difficult start of the year, we saw the situation actually improve throughout the second half, where we ended up almost flat compared to the year before. We saw quite some divisional and regional differences, where we saw very strong performance in the Americas and weaker and softer market conditions in EMEA and APAC. We started the year with a very strong order book, around EUR 564 million. That was definitely with a significant growth in the Entertainment business. Also, a very healthy book-to-bill, larger than one. And we also stepped up our revenue from eco-labeled products to 68% from the total revenue.
For EBITDA margin, for EBITDA, we landed at EUR 121 million, which is 12.8% of sales, with a significant step up in the second half, so gross profit percentage was, of course, supported by the introduction of new products, also more software in the mix, but it was also offset with a weak sales in our Meeting Experience, ClickShare. Now, in the second half, we also basically controlled OpEx, but in a way that we did not jeopardize, of course, our investments and our developments, and we ended up with an EBITDA margin of 16.7% for the second half. Net income came in at EUR 63 million, and we generated a strong free cash flow at EUR 110 million. That was driven by improved working capital. Our CapEx expenditure was mainly going at EUR 43 million and was mainly going in Cinema- as- a Service and our focused factories investments.
For net cash, we ended at a position of about EUR 260 million. When we look at the differences in the divisions and also in the regions, then we can say that our Healthcare division was the most stable and resilient throughout the year, where we saw year-over-year -4% sales. That was fueled by the Americas and new product introductions. In Enterprise, we saw -16% year-over-year, mainly driven by the weak sales in ClickShare, stable sales in Control Rooms , and Entertainment -9%. Slow start of the year for Cinema, but that definitely covered in the second half with a stronger movie slate. Overall, weaker market conditions, especially in EMEA for Immersive E xperience. When you look at the regions, we did grow in the Americas across all divisions, 6% over the year.
And also here, the new product introductions did help, and also the large deals that we closed in Cinema in the second half of the year. In EMEA, we saw the strongest drop, - 27%. Overall, actually difficult market conditions in many of our business units, but especially in ClickShare and I mmersive Experience. And in APAC, a modest reduction of - 8%. We did see a modest improvement in China, but that was then offset with other regions in APAC. Also to note here that we stopped actually our control room business as part of our transformation last year in certain countries in APAC, and that was reflected in the numbers in APAC also for 2024. And now I hand it over to Ann for more details on the numbers.
Thank you, An, and good morning to all of you, also from my end. Looking into a little bit more of the figures, we are presenting first half, second half combined indeed on the full year. The first half indeed softened in particular with respect to the lower sales, which we picked up in the second semester as we got to the absorption, so to speak, effect of inventories at our customers, and as, for instance, the investment climate in Cinema did pick up again as of the second quarter actually already, but further into landing orders and sales into the second half, so second semester, we laid down EUR 512 million of sales, which is - 3% compared to the year before, and combined on a full year, that gets to EUR 947 million of sales, - 10% year-over-year.
Gross profit came down to 40.7%, 1% point lower than last year, which is primarily the impact of lower ClickShare sales in the end, as well as within Entertainment, lower performance of immersive experience. There has been some delay on new products which will be launched this year and which come with a better margin as relating to image processing products. We did contain our OpEx well over both semesters, and in that landed our OpEx at - 5%, so yeah, could contain half of the decline, so to speak, offset in our top line. And then landing at an EBITDA of 12.8%. In there, there is a book gain included in the other operating income of EUR 10 million, which has an impact, which is relating to sale-and-leaseback of building in the U.S., which we concluded the building which we are not fully utilizing.
In that sense, looking for more flexibility going forward. That has an impact on the full year results of EUR 10 million in EBITDA. Excluding this one, we get to a full year EBITDA of 11.8%. Same figures, but then in our usual presentation of the bridge EBITDA full year. In that sense, yeah, the downside, of course, is relating to lower sales. Then one percentage point lower gross profit margin, offset then in part with OpEx containment, so - 5.4% lower OpEx, offsetting indeed inflation. R&D we maintained, and this really because to really go full force on our product roadmap and product introductions, of which we had many in the year and also still more than a few to come in this year. That's nice.
Sales and marketing included the positive impact from the Cinionic company, so our Cinema sales company, which we integrated and which we have again 100% of share into that. And then also the positive impact of the Control Rooms strategy, which we revisited, and yeah, the size of measures which we took on costs actually, which were helpful. And then there is a beauty part, so to speak, on other income included in there, the two bigger items or the higher results in our China joint venture, which is a recurring thing. And then a non-recurring is the gain EUR 10 million relating to the sale and lease back of our U.S. facility. So with that, yeah, landing at 12.8% EBITDA margin. Going further down into the P&L up to our net income starting from EBITDA, which we explained.
Depreciations are higher than last year, as expected, and has to do with the high depreciations on our Cinema- as- a-S ervice business. Restructuring came down, which is all including layoff costs, is EUR 11 million, so actually in line with the year before, then interest and taxes, interest or higher taxes or lower effective tax rate is the same, 18% as in previous years, and then landing at a net income of EUR 63 million or 0.7 earnings per share, moving over to the free cash flow, so a strong free cash flow, which we were able to generate, and yeah, with continued focus and work done on our working capital, we could also get the positive impact in our results of that month, so free cash flow ending at EUR 110 million, up EUR 72 million versus the year before.
Our net operating cash flow landed at EUR 161 million, including EUR 60 million coming from lowered working capital. Our net working capital is now ending at 11.8% of sales, which is an improvement of 4.8% points versus the year before. The average days sales outstanding, 63 in line with the year before, improvement on average payables, 61. Further opportunity there to get the DSO even lower than the year, so that's a further work at hand for this year. We worked on customer advances as well into that, and puts have a considerable higher amount of that one as well, helping on net working capital, and we've been able to build down our inventories with EUR 25 million. If we look to our inventory terms, then they are still at only 2.1, which is stable year-over-year.
So further opportunities ahead there to do better and continue better also in this year. We further did steady capital expenditures investments to the tune of EUR 43 million rounded here, which is according to our strategy, continued investments in manufacturing in our factories, into automation of our factories, as well as into Cinema-as-a-service included for EUR 15 million in the year 2023. Then the net proceeds of the sale and lease back impact on the free cash flow has an impact, a positive impact in the recurring of EUR 12 million. And so with that landing at the net cash of around EUR 260 million, up EUR 18 million year-over-year, that after dividends of EUR 43 million, EUR 25 million share buyback, and then EUR 20 million relating to the buyout of our minority shareholders in Cinionic.
When we look to the non-financial KPIs, I'm actually, yeah, glad to see that we made progress, a nice progress actually on the different ones, many more KPIs to report into our integrated report, which we also published today. We're taking out here three. So sales from eco-labeled products stepped up to 68%. So when we look also to the introduction of new products, then we are already at 86% of new products that are eco-labeled. So further stepping up towards our yearly step up towards our target, which we have to get to 80% in 2027, we are on the path to get there. Employee engagement score improved with one percentage points to 73%. So that's also, yeah, nice work done across actually the different regions and divisions to keep it at that level. Further working on continuous improvement also there to get to 75% within 2027.
In total, we are with 3,135 FTE at year-end, which is down versus the year before. You saw the restructuring costs and the P&L. Here's a couple of main actions which are sent, which is the closing of the factory in China in Changping as we then opened it, the full automated actually factory in Wuxi Control Rooms and then semi-integration or three bigger items in the year. Very happy with the customer Net Promoter Score, which had an uptake of 6 points last year and landed at 54. So also when we look into our more deep dive, the after-sales service scores which we get there on our product quality and reliability of our products, yeah, which we stand for, of course, yeah, very nice scores in there.
And with that, I give the word to An to give some color on the year, and I will check whether you are still.
Yes. Okay, so let me give some more color on the different divisions, starting with Healthcare. As I mentioned already, very resilient for business in 2024, definitely driven by good performance in Americas and also new product introductions. So that resulted in an order uptake of 6.5% over last year, sales -4%. Also thanks to the product mix, more software, more new products, we saw a step up in gross profit that also reflected in the EBITDA with an increase of 2.8% points on EBITDA margin. When we look at Diagnostic Imaging , full year growth, definitely a pickup in the second half with the new products that we introduced. Very strong growth and demand in the Americas with double-digit sales growth there. A little bit softer conditions also here in EMEA and APAC.
It's slower tender procedures, longer sales cycles, and also, of course, softer macroeconomic conditions in EMEA and APAC. Now, we had very successful launches of two new products in Diagnostic Imaging . One was this AMP home reading. That's a full portfolio now. But also our flagship mammography medical screen, it's 12 megapixel, it's called OneLook, had a very, very successful launch in the second half of the year. Now, we see towards the future that besides, of course, the new disruptive products and hardware that we introduce in the market, that more and more of our differentiation will come actually from new software features, more AI use cases, and of course, also stepping up our performance in other verticals like digital pathology. Now, when we look at Surgical and Modality, there we saw a growth returning in the fourth quarter.
It took our customers throughout the first half to basically bring down their inventories. We are glad to see that we are at normal levels now, and that also basically caused that we saw an uptick of orders in the fourth quarter and the second half in the fourth quarter, especially actually in the Americas and especially also on our Nexxis network portfolio for operating rooms. Now, that is of course also good for the portfolio because that is a high margin product and that is good to have in the product mix. That was offset with more competition, more cost-driven competition in our modality displays, which we of course address by our global footprint and of course local production, local sourcing in China. That's our way to address actually the competitiveness, our competitive position in modality.
When we go to Enterprise, again, we saw 17% decline in orders, 16% in sales, mainly driven by weak ClickShare performance, stable business in Control Rooms . We also turned our control room business into a profitable business with a very healthy EBITDA margin, and that resulted for the division in a drop in EBITDA of 6%. Now, when we look at M eeting E xperience, we started 2024 with high inventory in the channel. It took us longer than foreseen to build up that excess of inventory. It actually rippled through almost the whole year, but especially in the first three quarters of the year, and on top of that, we see in EMEA also competition, competition not only from Chinese competitors, but also from the proprietary room systems.
Now, that said, we could maintain our market share in diagnostic space with our ClickShare solution being agnostic, being flexible, very secure, and of course have an augmented user experience. That was then reflected in growth actually for our ClickShare business in the second half in the Americas. Now, for this year, we are developing our next platform on the ClickShare family portfolio. That is an Android-based platform. It's a completely new architecture based on this MTR platform. This is in very strong collaboration with Microsoft. This allows us, next to our BYOM ClickShare agnostic system, also to bring a room system on the market. Overall, this will increase actually our reach in the video conferencing market. We plan to launch this product in the second half of this year.
When we look at Control Rooms , then we basically saw growth in the Americas, a little bit slowed down in EMEA and APAC, longer sales cycles there. Of course, our control software platform, the one that we launched already the year before, is definitely basically getting a lot of traction in the market and is very secure, very scalable, very flexible. Those are actually the benefits that our customers start seeing in all our markets in Control Rooms . Today, that contributed for 30% of the total sales came from our new platform, and we're stepping that up to 40% in 2025. Besides our software platform, we also have a very up-to-date hardware portfolio with our LED, LCD, and RPC technologies, and those are also part of the mix in 2024. When we go to Entertainment, so slow start of the year for Cinema.
Overall software market conditions for immersive experience resulted in a 6% decline in orders, about 9% decline in sales, and EBITDA was a slight improvement of 4% points there. So Cinema, slow start of the year, again, limited movie slate still a consequence of the strikes that we saw the year before. That movie slate improved drastically towards the second half, and that also basically made it that our business rebounded in the second half of the year with large deals, especially in the Americas. We also had a launch of our HDR Lights teering projector for premium Cinema theaters. So we basically launched a pilot program in the U.S. and in the U.K. last year, which was also very successfully accepted by actually our exhibitors, our customers, but also by the audience.
Of course, this year is the year where we also start ramping this product in production and into the market. For immersive experience, overall weaker market conditions there, also customers awaiting new product releases. That said, we launched three very important new products in immersive experience in 2024, I600 more towards the beginning of the year, that is our mid-segment projector. And then towards the second half of the year, we had QDX, our high-end projector, and the F400 is our simulation projector. There is one product in image processing, the Encore3, that was delayed towards this first half, where we actually see, overall, we see actually in immersive experience a good order book, including those new products. When we look then at the outlook for 2025, we do believe that we start the year in a better position than we started 2024.
The reason for that is that our customers basically did build down their inventory levels and they're back to normal levels. We also can benefit from a full year effect of our new product introductions. We are seeing more and more software in our product mix, which helps us also for our margins, and of course, we opened our Wuxi factory last year on time within budget, and also there, we basically invest in automation, and that will also reflect in our gross profit margins throughout 2025. Now, with these things, and assuming that the geopolitical and macroeconomic conditions do not strongly deteriorate, we expect the top line growth for the full year with an increase in the EBITDA margin.
Also, our Board of Directors will propose to the General Assembly to distribute a gross dividend of EUR 0.51 per share, or EUR 51 per share, which is up EUR 0.03 versus last year's dividends. And we want to say that we are and remain committed to exploring acquisition opportunities to strategically strengthen the group, as well to optimize our capital allocation and delivering long-term value to our shareholders. But backed by robust free cash flow generation and a strong balance sheet, the board of directors has decided to initiate a share buyback program, and we're planning to purchase Barco shares for an amount up to EUR 60 million over the next 12 months. The Board of Directors will carefully assess and determine the optimal use of the repurchased shares at a later stage. And now I hand it back to Willem.
Thank you, An and Ann. We will now open up for questions. If you have a question, you can raise your virtual hand. I see some of you have already done that. Alternatively, you can also post a question in the chat, but just raising the hand is preferred. If you have a lot of questions, more than two, please, we will take two at a time, and then you can queue again for more questions. So I'm going to start with the first one, and that is Matthias. You can now unmute yourself, and then you can ask your question.
Yeah.
Matthias Maenhaut from Kepler Cheuvreux.
Good morning. Good morning. Thanks, Ann Desender. Good morning. Hope you can hear me.
Yes, we can.
Yes. Yes.
Yeah. That's a good start. So thank you for allowing me to ask these questions. Maybe two from my end to start with. So your guidance for sales growth and improvement in margins. Could you maybe elaborate a little bit on how you see that from a divisional perspective, more specifically Enterprise, what should we expect there? And then a second question I had was on the capital allocation. So you announced a EUR 60 million share buyback. I would say why EUR 60 million? And I note the comment of the Board of Directors that will decide at a later stage. Can you maybe elaborate on presently any ongoing M&A discussion still ongoing? And is it actually the goal to effectively destroy the shares?
Yes.
My two questions. Thank you.
I'll start and you can complement. Yes, that's very good. So on growth, actually, so indeed going in actually with a more broader statement or outlook, you could say, on growth year- over- year, and without so to speak precise figures. So we'll see as we get smarter and into the years actually on how we can fine-tune those actually. Also, the positive, there's quite some headwinds which we had last year with respect to higher inventories at customers with the situation around the movie slate and Cinema, which we don't have anymore. Then we have quite a lot of new product introductions over the course of last year launched, which are into effect as of the start of this year. So these are the main dynamics actually to the positive, to back actually our sales growth.
Now, we see that actually without giving precise, I would say, guidance so far on the divisional outlooks in that respect, so talking on a group level actually. But what I just named, yeah, covered the three divisions, so to speak. So that's a more, I would then say, general answer as to whether actually, yeah, Trump 2.0 or who you can call it might then have an impact on some hesitance on investments, etc. That's a little too early to tell. We are very cautious there and closely monitoring as what we can do with our focus factories. Yeah, we do have there the ability to deliver out of Europe or out of China. Of course, we don't know what in the end it will be. So preparing on that one.
So in that sense, that's why we indicated on the, yeah, do not further deteriorate or into our outlook statement. So that's a little bit in general where we go for. I have sympathy that you would like to have it more precise, I would say, but we also learned that it's better to first have proof points and then fine-tune as we go.
Yeah. Yes. Okay. For capital allocation, so again, we generated a very strong free cash flow position. So that's why the supervisory board and the Board of Directors actually also decided to increase the dividend and also basically start a share buyback program. So that is definitely share price is low at this moment. So it's a good moment to invest. So in that sense, now, what are the other ways that we will allocate our capital?
Of course, there is our regular business, our Cinema-as-a-ser vice, our capital investments in the manufacturing sites. Besides that, we continue to look at M&A. The two particular targets that we had last year did not work out, but that does not mean that we continue to screen the landscape and see where there are good fits for Barco that will strengthen actually the group, and I think at this moment, the Board of Directors wanted to keep the option open how to allocate actually the capital that comes through the share buyback.
As to the amount, so yeah, it's calculated as with the dividends, which will be an effect of about EUR 45 million. And then on top, the EUR 60 million that combines.
It's about EUR 110 million.
Yeah, of EUR 110 million on the cash.
Okay. Thank you very much
for that question. Next question is for Kris Kippers from Degroof Petercam. You can unmute yourself before asking your question.
Indeed. Thank you, Willem. Can you hear me?
Yes.
Yes. Perfect. Thank you. Good morning. Two questions also from my side. First one, very strong, I think, cost control. If you look at all lines, R&D, sales and marketing, admin, so with sales stable, the absolute numbers were even down. Given that we still see some, certainly, of course, here in Belgium, but also in some other countries, some inflationary impact. When your sales go up, to what extent should we see an inflationary impact, or are these levels just manageable going forward, or are there still some things you can improve right there? Second question, free cash flow, quite strong in 2024, of course, but this was partially driven by, you could say, some one-offs to a certain extent. So the build down of inventories, EUR 25 million, you've had the sale of the buildings. Also, CapEx seemed to have dropped somewhat.
So going forward, what should we anticipate here, or what is a recurring level of free cash flow given the guidance you've given us? Thank you.
I'll take the first. Yeah. So yeah, so on cost control, this is something that we always do diligently, and we also need to basically compensate for inflation, which means with top line growth. We aim, of course, the mission is to grow. If not, cost control is definitely one of the measures that we take. We do that in a very focused way so that we don't jeopardize actually our future revenue generators and that we basically look in where else we can optimize our costs. So this is actually good practice that we have throughout the years, and we will apply that also for 2025. But again, the main goal here is, of course, to go for full year growth.
But indeed, as to our models, if I can say so, for 2025, we're also looking in how we can offset the impact of inflation with efficiencies. As to the free cash flow, so a couple of things. So indeed, working capital nicely worked down, including so in total, EUR 60 million, including EUR 25 million on inventories. There were further opportunities in there. Of course, yeah, not to the tune directly to expect nominal as the down which we did last year, so to speak. But yeah, getting now at an 11.8% of our working capital as a percentage of sales, yeah, we do want to have some further improvements on that one and working on those in 2025. And the main thing around this is actually further improving our inventory growth.
Yes. And there we constantly focus on it, but also we still had quite some stock from post-COVID, like end-of-life components that we had basically pulled in. But gradually, as we go, of course, we start consuming those. So this is definitely also something that will happen.
Yeah, so further improvement there. The EUR 12 million upside on the sale and lease back, indeed, is a non-recurring. With respect to the capital expenditures included for EUR 43 million towards this year, EUR 25 million, actually, yeah, we keep it at that level. So that's the assumption to include in there. In that sense, that Cinema-as-a-service does continue. We further invest into automation, into factories, actually, factory revamp included as well here in Kortrijk. So in that sense, that's to take into account. With respect to the other items, it's more stable, like effective tax rate and those things. So in that sense, yeah, for a healthy free cash flow again this year, some areas where we certainly can further improve, starting, of course, with a better operational result or EBITDA, some further improvements on working capital, and with that, yeah, keeping it also strong.
But yeah, likewise, as you mentioned, Kris, some extra have been realized in 2024.
Thank you. And just coming back on the working capital percentage of sales, given your mix and product mix and also the fact that you're distributing differently sometimes direct to consumer now with Barco, for example, or things like that, to what extent does this hinder your further decline? Or would you say that 10%-11% of sales is an achievable number in a normal recurring way of working? Thank you.
Towards 11%, we want to move. That's actually the concrete target there spelled out. There are indeed a couple of things, which is product portfolio. Also, margins coming from a longer underway on the sea, so to speak. That has also an impact in there. New product launches and the startup of those also has some impact. But anyhow, these are things to be managed. So in that sense, yeah, further improvement, but not to the tune of what we did nominal-wise in 2024.
Okay. Thank you.
Thank you, Kris, for those questions. Next in line is Stefano Toffano from ABN AMRO. Stefano, you can unmute yourself.
Yes. Good morning. I hope you can hear me.
We do.
Good morning. Good morning.
Good morning. I have seven questions, but I will just ask a few. Just for my understanding, so the full year adjusted EBITDA margin 12.8%, it included a 1% point impact of the sale and lease back facility. The guidance is that over this 12.8%, so including this impact, so that's the first question.
Yes. Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Yes.
Okay. Thank you. The second question is again on the gross margin improvement. So I mean, obviously, I imagine there is continuous gains to be achieved on further gross margins as you continue to utilize your footprint and also utilization rates of your facilities go up. But can you be a little bit more specific, if possible, on any potential improvements over this year? And then my last question is, if I may, just a very general one. You talked a lot about more software within the mix. Can you quantify that, please, a little bit more? What kind of steps are we seeing from, let's say, 2024- 2025?
I'll take the software one. Do you want to take the?
Go with the gross profit margin. So gross profit margin, further improvements over there with the mix of new products, also more software gradually coming, global footprint. These are actually the three main ones where we have seen continued improvements and are yielding into results, actually, what we've done. That we see across actually different businesses in 2024 already. There was then one more down and 1% point, which we lost compared to the year before, which has to do with lower sales and ClickShare, which primarily was impacted by inventory resets at our channels. And then second, a negative product mix and immersive experience where, yeah, they landed on the orders with respect to the image processing product, but where the shipments and the launch is only coming as of this year. So these actually are the main levers.
Yeah, to quantify as such, yeah, we do want to get back to the percentage which we had in the previous year or in 2023. So at least get that 1% point back. And that's actually what we are working at.
Regarding software, so I would say in 2024, probably one quarter, so 25% of our sales is software. What do we consider software today is, of course, all our software platforms like ClickShare, like Control, like Nexxis in operating rooms. For those, you've seen the numbers. We're already more than 30% actually of the sales of that business unit is then related to software. Now, towards the future, we see more coming in. We also see, first of all, more software features. You increase actually and you differentiate with more software features on those platforms. But we see ourselves also stepping more and more into software applications and AI use cases, which is, of course, developments that we're working on right now that will over time also get us into more recurring revenue.
And that is something that we're definitely focused on and will increase actually also our software share in the coming years. But overall, it's definitely an area where we focus on. And of course, it's good for the mix, for our portfolio mix.
Thank you.
Yeah. One business where we decided we have chosen towards indeed, yeah, more software and Control Rooms then. And so in that sense, this year or in 2024, they were at about more than 30% of software sales in the total equation. And then further stepping a bit to the plan for this year.
Yeah. That was Control. Yeah.
It's only one example.
Yes.
Yes.
Perfect. Thank you.
Thank you, Stefano. Next in line is Guy Sips from KBC Securities.
Yes. Thank you. First of all, congratulations with a nice set of second-half results. And how many months were the successful launches in Healthcare of the two products that you mentioned, so the HMP and the OneLook? How many months were they included in the second half? And are they responsible for the nice half-year on half-year pickup of the EBITDA margin in Healthcare? And the second question is on ClickShare. You mentioned that you're not only seeing competition from Chinese players, but also from proprietary room players. Can you elaborate a little bit more on that? And do you see that only in Asia, and do you expect that also to come in the U.S. and EMEA? And how do you react on these Chinese players who are more focused on price? What is your, let's say, yeah, what's your plan going forward?
Yes. Yes. Okay. No, good. So for the new products in Diagnostic Imaging , so the HMP, so the home reading, we almost had the full year in 2024.
Second quarter.
Second quarter. No, no, yeah, April, second quarter. Okay. Second quarter. The OneLook was until October 1st. So that was a very successful launch. We actually sold about 1,000 or a little bit more than 1,000 actually for the last months of the year. So that definitely helped us with the numbers that you see in Healthcare. But overall, I think we saw quite robust and resilient markets overall, also the inventory build-out at the customer side, which also created nice orders on Nexxis for surgical. But yes, of course, the new products in diagnostic definitely contributed to the good results in Healthcare. Regarding ClickShare and competition, yes, we mentioned already Chinese competition. That is mainly in EMEA. So we don't see Chinese competition in the U.S. How do we fight that? Well, of course, without patents, our intellectual property portfolio.
This is something that we're launching actions actually against these companies in Europe. Sorry. Sorry. So that's one way. The competition that we see from room systems is in general. So the room system market is picking up. Sorry, I lost my voice. It's picking up. We'll also do so in 2025. Our answer to that is our new platform where, besides the ClickShare wireless offering, we will also offer now a room system based on an Android platform.
As of the middle of this year, which we will launch and take it in.
Excuse me. Together with Microsoft.
Yes. Okay. Yeah. Okay. I hope you could catch that one.
Sorry.
Okay.
Good. Thank you, Guy, for those questions. Next in line is Marc Hesselink from ING.
Yes. Thank you. First question also coming back on ClickShare. Quite some moving parts with the inventory levels at your clients. So a very big negative impact in the first quarter. And I think a very difficult comparable base now in the fourth quarter. But if you try to strip that out and look a little bit at the underlying trends, how is that going over the four quarters of the year? And also, if you compare it to your, maybe, let's say, the pre-COVID level, how far are you off from what maybe you could approach?
Yes. So I think just to say the inventory levels, so yes, we started the year with EUR 20 million extra in the channels. That we completely built off towards the end of the year. So we started this year with very normal inventory levels back to the beginning of 2022. So we don't have this challenge anymore of extra inventory in the channels. When you deduct this extra inventory, then I would say that we actually grew pretty much with the market. And the market basically started to pick up as of third, fourth quarter. That's actually, I think, then we saw a pretty normal trend compared to how the market was doing.
This being said, the sellout in the second semester was not yet at the level of the year before. I think that's also your question, Marc, so in that sense, yeah, it was in line with the market, so to speak, and it certainly was better in the second semester than the first semester, not yet at the levels that we had before, so in that sense, yeah, that we will see how that's further evolving.
Yes. And pre-COVID, well, yeah, that was higher. We're talking 2019 at the time. At that time, the competition was also less. There was less competition from room systems, definitely from Chinese players. So the market dynamics have changed actually quite a lot there.
And then from a regional perspective, yeah, we saw that in the Americas, we do see growth again in our figures. And likewise, also into sellout, Europe is the more challenging market macroeconomics-wise. And yeah, in tough markets, more competition as such.
Yes. But again, the way that we want to differentiate is also with our product. Having a more secure, more flexible, more agnostic product is definitely something that we want to differentiate ourselves and not go into a downright price fight, especially in the European market.
Okay. Thanks. Maybe a link to that, because I think indeed what you're saying, the big change is the proprietary rooms. If you look at that from a long-term perspective, how does that change your market opportunity? Is that something that means that the structural market opportunity for ClickShare is less because we now have these proprietary rooms? Or how are you looking at that?
It definitely increases our addressable market because now we basically can address all rooms. So that helps. I think working with Microsoft, which is a very dominant UC&C player in this video conferencing market, is also a good thing, basically being now also promoted by Microsoft. We're also the first adopter of Microsoft's new Android platform, which will also basically give us some extra momentum actually when we launch this product. So I think we tap into a bigger addressable market. For us, we started last year with introducing this switch. Remember, that was a standalone device that allowed in one room to switch between an MTR system and a ClickShare system. Now what we're doing is we're building a full MTR system.
And it will also allow, and that is then a whole portfolio of products that we bring out to switch also towards our ClickShare agnostic video conferencing for when the need is there. So when visitors are in the room or when you have a Zoom conference call. So this is actually we're adding then also the differentiators that we have from ClickShare, agnostic ClickShare, into that room system. So that's the way that I think the market is evolving and being first with this new platform or one of the first ones with this new platform is going to give us, I think, a first-mover's advantage.
Okay. Clear. Thanks. My second question is, I mean, a bit of speculation probably from your side, but tariffs.
Yes.
Probably might happen quite a lot or could happen quite a lot. Are you preparing and how, and how will it impact you?
Yes. Yeah. We're definitely monitoring it, so we definitely have a task force, work group here that monitors this very carefully. I think our first responses here are that we have, of course, the flexibility of the manufacturing footprint that we have as well, our manufacturing in China, but also in Belgium and Italy. Now, of course, tariffs can come anywhere, so they might also come in Europe, but that's one flexibility that we have. The other one is that most of our products are not being produced in the Americas, so also our competitors do not produce projectors or medical monitor screens in the U.S., but then still to be seen where they produce and if these countries get tariffs compared to the countries where we produce. Yeah. What else do we have under control? Yeah. We're continuously working, of course, on our cost efficiency on these products.
So that's another thing to bring the cost down. And yeah, then price increases is definitely if we have the way and if we see this as possible in our competitive landscape. Yeah. That's also one of the things that we keep in mind. But yes, we're monitoring that very, very carefully.
It could be like extreme scenarios that you move also production to the U.S. Is that something?
At this moment, there are no concrete plans to do that. Let's see. Let's see what that means if it will ever get that far. Yeah.
Okay. Very clear. Thank you.
Yeah. Thank you, Marc.
Okay. Thank you, Marc. We're back at Matthias Maenhaut from Kepler Cheuvreux for some more questions. Matthias?
Yeah. Hi. Thanks. A couple of follow-ups. Just one clarification. So the guidance, I just wanted to be sure that I understand it pretty good. So you are guiding for a margin increase from the 12.8% you reported, including the one-off of the sale and leaseback.
Correct. Yes.
Okay, then a second question is actually on the transition to laser in Cinema. Could you maybe give us a feeling on where do we sit in the cycle? How much is already done and how much is there still to be done?
Yes. I think at this moment, we're about at 30% installed base on laser worldwide. Barco has quite big market share there, over 65% for new install capture rate. Yeah. Capture rate, even close to 70% in certain countries. But overall, the installed base is around 30% on laser. So there is still a big wave to come. Maybe also here to mention is that you know that Sony stepped out of the projector business in Cinema. There's still Sony systems installed, and they go end of life or end of contract, actually service contract in 2026. So that wave is still also one, yeah, to focus on, of course.
Okay. Thank you.
Thank you. Matthias. Kris, you also had more questions. Please go ahead. Kris Kippers from the room.
Good morning. Follow-up indeed from my side. Just to be sure, if you look at the non-recurring costs or the restructuring costs, actually, so not the EUR 11 million leasing in the U.S. or the sale of the building, but just the restructuring costs you've put in the P&L, it's the second consecutive year it amounts to roughly EUR 11 million. What should we expect from this level going forward? Because this also influences, of course, your adjusted EBITDA margin. So just to make sure, is it again around this level, or are we almost done now with restructuring? Thank you.
We are almost, yeah. We really are done in that sense. Never say never. You see how things are evolving. But certainly not to the tune of the amounts posted in the past two years.
Yeah, and then second question, just a detail perhaps on ClickShare. We see that ClickShare Bar was about 10% of top line. To what extent is that filling the pipeline or with the inventory of the client base? Or to what extent is this also sales to consumers? Because it's a direct-to-consumer model, so I presume it's quite direct sales.
So we sold more than almost 10,000 video bars actually since launch. So we basically sell that through our regular channels, but also we introduced the Open C hannel approach, which is more, yeah, than a wider set of resellers that do not get the same, yeah, conditions from us. So in that sense, yes, it's opened up to a larger reseller space.
Yeah, but if you talk about normalized inventory levels, then it's actually on all of the different products in the channel.
Yeah. It's the same, and of course, this is also geared towards small and mid-size meeting rooms. So that's, of course, also for smaller companies, SMEs, and that's also why we actually went with this Open Channel approach to reach them actually.
Okay. Thank you.
Thank you, Kris. Stefano Toffano from ABN AMRO, you also had some follow-up questions.
Yes. So two follow-up questions. I don't know if you can specify how much the impact of SaaS is on the full-year EBIT results if there wouldn't have been any SaaS. That's the first question. And the second question is, can you give us the EBITDA margins for control room?
Okay. On the first one, I can be precise. On the second one, we do not disclose. So on Cinema, if.
I tried.
Yeah. Of course. No problem. No problem. So on the first one, if it would help open CapEx sales instead of Cinema-as-a-service , then our sales would have been EUR 30 million higher in 2024. But the good thing about recurring revenues, of course, is that you start the year not from zero, but from a nice amount, which is actually in Cinema in particular, EUR 32 million. For, yeah, Control Rooms , we do. Is this positive, healthy positive?
Yes. It's healthy, positive. And we're actually very happy seeing those results in Control Rooms because the big transformation that we did in this business is actually now turning out to be successful. And it's with consistent feedback, actually, also from our customer base on the software products that we have been launching and that we're bringing to the market now. So it's definitely a very positive way to start this year in our control room business.
Yeah. Yeah, and also helped with the decisive cost measures, which we also took, or through that, the organization is stable moving forward, really going for it, so in that sense, yeah, a nice positive and structural improvement. Yeah. For a steady further.
Perfect.
Yeah. Thank you. Thank you.
Thank you, Stefano. We also have a question from Trion Reid, Berenberg. Trion, you may unmute yourself and ask your question.
Thanks, Willem. Thanks, guys. Hope you can hear me fine.
Good morning.
Hi. Just one question, just on China. I think one of the reasons that 2024 was weak was we expected a rebound in China. It didn't come. Could you just comment on what you're seeing there? Is there any sign of improvement?
Yes. So, in China, we had a very modest growth. Actually, in 2024, it was mainly driven by Entertainment and actually mainly by Cinema. That's what we have been mentioning before. Box office is starting to improve. Movie slate is starting to improve there, and the whole laser upgrade wave is starting again. I think in Healthcare, we have through the anti-corruption hump. So this is now the new way of life. So we have to basically deal with it and also in the channels figure out what that means. But there, I think we see strong leads, especially in our Surgical and Modality business. And also for the Diagnostic Imaging , we're working actually on, yeah, setting up the channels now in this new era after the anti-bribery, yeah, measures that were taken there. So there, I think we're through the worst, and we're setting up for growth in Healthcare.
Maybe one other one on immersive experience. There also, the market is changing in China. So less government sponsoring, so less what we call B2G, yeah, to government, more B2B, which also takes from our side and also from our partners and channels that we now need to deal with that new reality, set up also new partnerships, which are more in this B2B space, and that work is going on. We actually start seeing some nice inputs there, but it's also working our way through. We hit the bottom, that's for sure.
23, yeah.
If any, it will only go uphill. At what pace is still to be seen. Yeah.
Okay. Thank you.
Thank you.
Okay. I see no more raised hands. If you have.
One more.
One more for Trion, but no, it's just. Oh, okay. Yeah. It was another. Trion. If anybody of you has a last question, now is the time.
Okay.
Trion, you still have another question?
No, nothing from me. Thanks.
No? Okay. Then we believe we can close this earnings call. The recording of the call will be available by noon today on our investor portal. And today, we also published our integrated annual report. So I invite you all to go see and find it on our investor portal. You will find a lot of background and stories from the people at Barco and from all divisions and markets. Really worth a look. And before we close, I would also like to draw your attention to our upcoming Capital Markets Day, which we will organize on October 23rd of this year. And we will host our analysts and institutional investors for a strategy update, a lot of product demonstrations, and also the opportunity to meet management at our headquarters in Kortrijk, Belgium. So for now, thank you for your attention and have a very good rest of your day. Thank you very much.