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Jan De Witte: ‘Barco can handle the crisis’

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Due to the pandemic, the imaging group Barco is struggling to translate a well-filled order book into turnover. Nevertheless, resigning CEO Jan De Witte has every confidence in it. “Profit will follow.”

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Barco caused a stir last Friday when it was announced that CEO Jan De Witte must make way for the tandem Charles Beauduin and An Steegen. Beauduin, who will take over the reins on September 1 (see inset) and is chairman until then, attended the presentation of the half-year results.

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These results do not convey an entirely positive message. Looking at the order book, the imaging group seems to be recovering after a disaster year. With EUR 466 million, Barco is doing 17 percent better than in the first half of 2020 and 34 percent better than in the second half of that year. The company is also doing better than the 456 million euros that analysts expected.

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At 366 million euros, however, turnover is 10 percent lower than a year ago and also slightly below the analyst consensus. Gross operating profit (EBITDA) amounted to 27.5 million euros, broadly in line with expectations.

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Long-term restrictions

Barco points to the long-term restrictions imposed during the pandemic to explain the disappointing sales. Working from home remained mandatory or recommended in many parts of the world. Clickshare, Barco’s meeting tool that is used in more than 900,000 meeting rooms, is still struggling. Retiring CEO De Witte puts that into perspective. ‘With Clickshare Conference we have an answer to the challenges of the hybrid forms of working.’

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With Clickshare Conference we have an answer to the challenges of the hybrid forms of working.

Jan De Witte

Outgoing CEO Barco

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The opening of cinemas in Western Europe and the United States also took a long time. In addition, Barco is affected by the shortage of chips. According to De Witte, Barco is in control of that crisis. ‘We work with suppliers and brokers on a daily basis to keep enough chips in stock. In addition, our engineers are looking for technological alternatives, so that we have everything under control.’

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The essence

  • The imaging company Barco publishes half-year figures after the announcement of the CEO change. Jan De Witte will make way for Charles Beauduin and An Steegen in September.
  • At EUR 466 million, Barco’s order book is 17 percent better than in the first half of 2020 and 34 percent better than in the second half of that year.
  • At 366 million euros, however, turnover is 10 percent lower than a year ago.
  • De Witte is confident that Barco will make steady improvements as markets recover and office reopening accelerates.

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That did not stop investors from sending the share more than 6 percent lower on the Brussels stock exchange on Monday evening.

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good momentum

The imaging group itself points to signs of improvement. Profit in the second quarter was 13 percent higher than in the first quarter of 2021, primarily from China. ‘The world is opening up after the corona pandemic,’ says De Witte. ‘We are experiencing a very good momentum there.’ This applies to the sale of business software as well as cinema technology.

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Blockbusters behave like blockbusters. The public finds their way to the cinemas

Jan De Witte

Resigning CEO Barco

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‘In the rest of the world we are at the beginning of that recovery’, says De Witte. He refers to the opening of the cinemas at the end of May. Blockbusters behave like blockbusters. The public will find their way back to the cinemas.’ The replacement wave, in which cinema owners replace their classic projectors with laser projectors, can get going again. Barco is also counting on events for which the technology company supplies projectors to restart in the third quarter.

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Healthcare orders in the first half of the year were 18 percent higher than last year. After the health crisis, hospitals seem to be investing again in diagnostic imaging and surgery.

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De Witte is confident that Barco will achieve steady improvements as markets continue to recover and office reopening accelerates. “Supply chain constraints can dampen the acceleration of growth,” he warns.

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Step aside

Given the still difficult context, the outgoing CEO is not dissatisfied with the results. “The combination of an uneven recovery in economic activity and supply chain constraints has resulted in sales lagging behind orders.”

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For the whole of 2021, De Witte is counting on a turnover recovery and an EBITDA margin that is higher than the 7.5 percent of the first half.

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For the whole of 2021, De Witte is counting on a turnover recovery and an EBITDA margin that is higher than the 7.5 percent of the first half. That doesn’t look very ambitious. Analysts have so far aimed for a turnover growth of 8 percent to 834 million euros and a profit margin of 9.5 percent.

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De Witte thinks the time is right to step aside. My story at Barco consists of three chapters: improving the company’s performance, further digitizing the company and getting through the corona pandemic as best as possible. That worked.’ He emphasizes that his departure as CEO is a joint decision. “Barco has a lot of potential and is ready for the future.”

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He did not yet say what his personal plans are. ‘First I ensure a smooth transition and then I take some vacation. We’ll see afterwards.’

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Charles Beauduin becomes chairman of loom manufacturer Vandewiele

Now that Charles Beauduin, together with An Steegen, will take on the daily management of Barco from 1 September, his weaving loom manufacturer Vandewiele has to look for a new CEO. ‘We are no longer looking’, Beauduin reacted during the press conference following the half-year results of Barco. He did not want to say who the new CEO will be.

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Beauduin himself becomes chairman of the board of the company that he bought together with his father in 1993 to make it a global player.

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It is not yet clear which accents Beauduin and Steegen will place at Barco. The new CEO did not want to anticipate this. ‘We are going for a co-CEO position. We will answer questions about the future as soon as An Steegen takes up her position on October 1, 2021. Beauduin wanted to say that the focus for Barco in the future will be on innovation and further internationalization. ‘We need to invest more in technology, people and radical innovations.’

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Beauduin himself saw a significant part of his assets go up in smoke on Monday. Where his 19.84 percent stake in Barco was worth more than 400 million euros at the closing price of 21.9 euros on Friday, 375 million euros remained after the close of the stock market on Monday.

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