Negative Points
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First-half sales declined 8% year-over-year (3% at constant currency) to EUR418 million, with EBITDA falling to EUR26 million (6% of sales) due to lower volumes and operating deleverage.
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Healthcare division faced significant challenges, with orders down 23% and sales down 12%, primarily due to weak performance in Surgical and loss of large contracts.
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Meeting Experience continued to face softness in the BYOD market, with slower replacement pace and no growth in EMEA and the Americas.
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Free cash flow was negative at EUR37 million in the first half, impacted by higher inventories (EUR57 million increase) and lower-than-expected sales.
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Net cash position shifted to a net debt of EUR33 million following the VerVent acquisition, dividend payments, and share buybacks, reducing financial flexibility.
Q & A Highlights
Q: Marc Hesselink (ING) asked how Barco can achieve the midpoint of its full-year EBITDA guidance of 11%-12%, given the second half implies a very significant improvement versus the first half and would be higher than last year.A: CFO Ann Desender explained the second-half improvement rests on four factors: six months of VerVent contribution versus only two months in H1; better top-line momentum already visible in Q2, with the Americas back at last year’s level; resilient gross margin that should hold or improve; and operating leverage on higher volumes, amplified by cost decisions taken in Q2 that will have an accelerated impact in H2.
Q: Marc Hesselink (ING) asked whether the 2028 guidance of a 15% EBITDA margin is still achievable, given structural weakness in ClickShare and the significant margin improvement it implies over 2027-2028.A: CEO An Steegen confirmed Barco holds its 2028 guidance of EUR1.1 billion in sales, noting the portfolio mix may look slightly different and now includes VerVent. She said the strategic road maps and actions in place give confidence the 15% margin target remains achievable.
Q: Trion Reid (Berenberg) asked how Barco is handling rising memory component prices and shortages, whether it can raise its own prices, and what impact that would have on demand.A: CEO An Steegen said Barco pre-bought supply to cover at least a couple of months and the rest of the year, and is passing costs into prices where possible. Competitors are also raising prices, making it a market-wide effect. So far, no demand impact has been seen in Cinema, Control Rooms or Diagnostic Imaging, but ClickShare especially the new ClickShare Hub on a Microsoft platform using new-generation memory is the business to watch.
Q: Trion Reid (Berenberg) asked about the timing of adding VerVent’s professional audio products to Barco’s Cinema and Immersive Experience markets, and whether that falls within the 2028 time frame.A: CEO An Steegen said integration is progressing well, with short-term focus on bundling existing products for home cinema. Professional audio requires modifications to VerVent’s current portfolio, with road maps being built now. She expects roughly two years of development and market introduction in the third year at the outer edge of the three-year guidance.
Q: Trion Reid (Berenberg) questioned the VerVent acquisition price, noting that annualizing the H1 EBITDA contribution implies roughly 21x EBITDA, which looks high versus Barco’s own valuation, and asked how Barco justifies the price and expects a good return.A: CEO An Steegen pointed to the revenue multiple of about 1.2x and the plan to lift VerVent’s EBITDA toward Barco’s 15% goal. She acknowledged the price is “not cheap” but said the value comes from merging visualization and audio a “1 plus 1 is 3” effect and VerVent’s own growth plan expanding into lifestyle applications through points of sale, plus synergies in professional markets, justified the EUR135 million price. CFO Ann Desender added VerVent is on track with the due diligence business case.
Q: Trion Reid (Berenberg) asked why Barco cannot replace the large Surgical contracts it lost whether it is competition, a time lag or something structural and whether shifting to cost-competitive mid-segment solutions like NexxisCube would hurt gross margin.A: CEO An Steegen explained that when large system integrator contracts end, they redesign systems and demand cheaper, more cost-competitive parts, which is why Barco is moving to mid-end solutions like NexxisCube. New designs also require innovation such as real-time compute and software features, and the design-in cycle blueprint, custom design, certification, then PO and gradual volume ramp simply takes time. On margin, she said Barco now designs entry-level products in China with less costly components from the start, helping secure margin even on those products.
Q: Marc Hesselink (ING) followed up on the 2028 EUR1.1 billion sales target, asking whether it excludes VerVent and was originally an organic figure.A: CEO An Steegen confirmed the EUR1.1 billion was originally organic, but since VerVent is now part of the portfolio and Barco continuously optimizes its mix amid market dynamics, VerVent is included in the 2028 figure.
Q: Analysts probed the first-half performance, with orders at EUR468 million (4% lower year over year, flat at constant currency) and sales at EUR418 million (8% below last year, 3% at constant currency).A: CEO An Steegen said momentum improved in Q2 after a difficult Q1, with orders picking up toward the end of the second quarter. Diagnostic Imaging and Control Rooms stood out with solid H1 performance. The order book rose to EUR568 million from EUR492 million at end-2025, providing a solid foundation for coming quarters.
Q: On profitability, EBITDA landed at EUR26 million, or 6% of sales, with net result at minus EUR4.8 million and free cash flow at minus EUR37 million.A: CFO Ann Desender attributed the lower EBITDA mainly to lower volumes and operating deleverage, plus about EUR3 million of negative FX and one-off items including acquisition costs and US grants not repeated this year. Gross margin stayed resilient, helped by more service and recurring revenue, now 13% of total sales. Free cash flow was hit by EUR57 million higher inventories, partly from advance purchases of memory chips and partly from more finished goods than wanted after lower-than-expected sales. Net cash shifted to a net debt position of EUR33 million after the EUR134 million VerVent cash out, EUR44 million dividends and EUR11 million buyback.
Q: On the Healthcare division, orders fell 23% to EUR109 million and sales dropped 12% to EUR121 million, with EBITDA of just EUR3.5 million (3% of sales).A: CEO An Steegen said Diagnostic Imaging performed solidly on the radiology and mammography replacement wave and digital pathology traction, while Surgical was very weak due to lost large design-in contracts. Barco is investing in R&D for new products like NexxisCube and edge-compute displays, and has placed the entire Healthcare division under one leader, John Zhao, to reduce fragmentation, speed up decision-making and improve
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
