Barco Aktie

Good morning, ladies and gentlemen. Thank you for joining our earnings call for the first half results 2026 here at Barco. My name is Willem Fransoo. I'm Director of Investor Relations. I'm here in the room with our CEO, An Steegen; and CFO, Ann Desender. We will present first our results, which will take about 20 minutes. And after that, we will open for questions. And I will give the word first to our CEO.

Thank you, Willem. Good morning, everybody. Let me start with a summary of the results of the first half of '26. So orders came in at EUR 468 million. That's 4% lower than last year. When we calculate that at constant currency, it's flat. Sales landed at EUR 418 million, 8% below last year, 3% if you calculate at constant currency.

So after a difficult first quarter, we saw the momentum improving in the second quarter, where we saw orders picking up towards the second half of the second quarter. Also worth mentioning is that Diagnostic Imaging as well as Control Rooms really stood out for their solid performance throughout the first half year. Order book is now at EUR 568 million. That's up compared to the end of '25. At that point, we're at EUR 492 million. This, of course, gives again a solid basis for the quarters to come, a solid foundation for the quarters to come.

We also integrated now after the successful acquisition of VerVent Audio Group, we integrated VerVent in our Entertainment division. So they form now third BU under Entertainment. It's called Consumer Experience. And for the 2 months that VerVent has been reporting into the Barco financials, they also basically show solid growth. Then we have also the gross profit margin. So gross profit margin was resilient despite some product mix effects that we saw. EBITDA landed at EUR 26 million, that is 6% of sales, and that was mainly driven by the lower top line and the resulting operating deleverage that we saw from the lower top line.

Now for outlook for the year, management expects and reconfirms basically that we will basically grow sales over last year, including VerVent. And our EBITDA, we expect to land between 11% and 12%.

And now I'd like to hand it over to Ann Desender for some more financial details.

Starting on the top line and orders and sales. So as indicated by An, orders ending in line with last year at constant currencies, sales at constant currencies, 3% below last year. If you look to the different regions, EMEA, orders below last year, sales minus 5%. There as well in the first and second quarter have been largely impacted by weak investment climate linked to the Middle East. And not only, I would say, the shipments that we have towards the Middle East, but also a lot of our customers in Europe having impact on that one.

Americas saw a recovery in the second quarter, so also after a difficult first quarter, quite a nice uptake in the second quarter and actually landing there already at the same level sales as last year's second quarter. When you look then -- look into the orders, orders in the Americas for the first half, 8% above last year, 2 that are standing out in there actually is both Enterprise and Entertainment. On the figures which you see here, orders and sales on the Americas, plus 8% and minus 11%. This is reported on the sales, the biggest impact we have there from currencies, as you do know.

APAC also saw a better second quarter than the first quarter actually, with in particular, order and sales growth in the second quarter for both Healthcare and Enterprise as well as actually good momentum with Consumer Experience VerVent. VerVent who all in all, actually had a very nice quick start actually in the first 2 months that were included in our figures. Landing at an order book at midyear of EUR 568 million, up EUR 67 million compared to the beginning of the year. In the EUR 67 million, including about EUR 15 million of VerVent, our newest acquisitions. And then for the rest, a nice growth, particularly in Cinema and in Control Rooms.

When you look to the EBITDA bridge from last year to this year, FX has an impact more on the top line, quite contained, but negative on our EBITDA. So that's to the tune of about EUR 3 million. VerVent brought in the first 2 months part of our group, a positive contribution to our EBITDA. The big down and impact is actually on the lower volumes of the lower sales, which we faced in particular, in the first quarter. We could have a resilient or we could contain our gross profit margin despite the lower volumes, and that is coming with mix with more sales and service with more recurring revenues, which recurring revenues actually as to the total of our sales is now reaching 13% of our total sales. So all helping in that one.

OpEx and diverse cost measures have been taken. More of that impact will be or largely the impact will be in the second semester. In the first semester, those were offset by R&D investment and particularly in Healthcare and in Meeting Experience. And then we have quite some one-off orders impacts actually, including in the acquisition cost and then purchase price accounting impact in the last year, some other income related to U.S. grants also included, which we do not have this year. So that order making the building blocks and to explain the lower EBITDA compared to last year. So lower sales actually and FX and one-offs hampering, but we could contain our gross profit margin and a good first contribution of VerVent.

When you look further down into the P&L from EBITDA to net earnings, depreciations are evolving primarily as we further build out our Cinema-as-a-Service portfolio. So depreciation and amortization at EUR 25 million in the first semester. We did take restructuring costs and restructuring measures, which indeed will have an incremental impact in the second semester in our P&L. Total restructuring cost, EUR 8.4 million, except for EUR 1 million that will have a cash effect. The biggest one is the closure of the R&D facility in Norway and then diverse other changes actually across the regions with the biggest impact here in Belgium.

Then interest income, some lower than last year as we changed actually from a net debt to -- net cash to a net debt situation after the acquisition of VerVent. Income taxes, effective tax rate constant at 18%. And with that, landing at a net result of minus EUR 4.8 million.

Moving over to free cash flow. Free cash flow in the first semester, minus EUR 37 million. The big impact there, and that's also immediately the big focus area for the second semester is higher inventories, which we have. Gross operating free cash flow landed at EUR 20 million. This is after EUR 4 million of restructuring costs already paid. When looking at our working capital, the increase is primarily situated in inventories, EUR 57 million higher and impacting on the free cash flow compared to the beginning of the year.

We have in there the bigger impacts are in Entertainment actually. We had -- we've taken advanced purchase of components and memory chips where there are price increases and to be ahead of those to also secure our gross profit margins in there. But yes, this being said, we also landed with some more finished goods than we wanted in view of lower-than-expected sales.

The average payment terms of customers and suppliers and a good balance, meaning DSO at 73 days, DPO at 81 days. Capital expenditures, EUR 15 million, in line with last year, EUR 1 million higher, including the bigger ticket items there, the automation in our factory in Kortrijk here and then Cinema-as-a-Service included like we had also in the previous years.

Our net cash position has shifted to a net debt position, EUR 33 million midyear. This is after the cash out for the VerVent acquisition for an amount of EUR 134 million cash out, EUR 44 million of dividends, EUR 11 million of share buyback and of course, the impact of the free cash flow in the first semester.

Looking to our sustainability KPIs, going there strong and with a consistent progress actually on the different KPIs. Eco-labeled revenues at 77% of our total sales, so a further increase of 1% versus last year and well on track towards our target set actually with House Dubai, the new portfolio of Immersive Experience, Healthcare and across the divisions actually. And of course, Control Rooms shifting more to software is certainly helping there out as well.

Pointing at our Net Promoter Score as well stood out at 66 so another 6 percentage points up compared to the full year of last year. We do an extensive inquiry on this customer NPS twice per year actually and are happy to report and steadily increase actually in that performance. So yes, very happy customers. We just would like that they even buy more.

With that, moving it over to the divisional updates, and An will give some more color on that.

All right. So let me start with Entertainment. So we saw a resilient performance in Entertainment, sales landing at EUR 199 million, which is 5% below last year, but orders 3% up to EUR 243 million. From EBITDA perspective, we landed at 8.4% of sales, which is 2 percentage points lower. Partially is that, that's driven by the lower top line, also some of the acquisition costs, and we are already partially also offsetting that with some of the cost measures that we took in the first half, but we'll see more of that in the second half.

Now zooming in on Cinema, solid performance in Cinema. I think with the movie slate getting better, that is always a good sign for exhibitors to resume their lamp-to-laser replacement wave, which we also see. China, though remains soft, but we could cover actually with the replacement waves in the other regions, we could cover for the shortfall in China in Cinema. Also our HDR by Barco, so our new premium cinema solution with the light steering projectors is very well on track. We basically have now more than 100 systems that we plan to have installed by the end of the year.

We see that a lot of momentum building up with the studios. Today, we have already secured more than 45 blockbusters. If you compare that to last year with about 35, which is definitely a good sign that people appreciate actually what they see in HDR by Barco. Also not to forget, this comes with a new business model for us. So we are not only selling projectors, but we are also basically now a bigger share in the Cinema value chain with recurring revenues.

Then for our Immersive Experience, where we're very proud to say that we are now the #1 in DLP projection in Immersive Experience. Now we see softness or we saw softness in the rental market. That was definitely also driven by the situation in the Middle East. At the other hand, we see stable performance in fixed install. And there, definitely, theme parks is continuously growing and is definitely proving to be a very strong growth pillar for Immersive Experience.

Now towards the second half, of course, the situation in Middle East needs to get better. But at the other hand, we're also launching new products. So there is our I65 mid-end projector series that we are launching actually in September and more features on Encore 3, which will also continue to boost our Encore 3 platform.

From VerVent's perspective, as I mentioned already before, VerVent is now integrated as a third BU in the Entertainment division. Very solid performance in the last 2 months, driven by the premium headphones and also their automotive audio solutions where they basically provide technology license to the automotive sector. Here again, for us, this is a good indication already that merging visualization and audio is the right way to go to provide growth in our Entertainment division.

Over the longer term, we truly believe in the growth of Entertainment. I think we have the right ingredients to really be a key player in the Entertainment market. That starts with technology leadership, technology breadth, market leadership, a premiumization wave that is going on, especially in Cinema, but also in the consumer space. And then, of course, the customer contacts, the customer relationships that we have.

On top of that, of course, the expansion where we are not only going to focus now on visualization, but also on audio solutions, which basically, if we go to the next page on VerVent. So again, the strategic plan why we acquired the VerVent is because we truly believe that a true entertainment experience is a combination of visualization and audio. This is also consistent with what we have said during Capital Markets Day that we are going to go all in on Entertainment because we -- by adding audio, of course, we can tap into a bigger addressable market in the Entertainment sector.

Now we have 3 objectives with this acquisition. The first one is clearly growth, and that starts already short term by bundling Barco solutions with the audio solutions for the consumer market, especially in home cinema. There we have the projectors available. They have the audio available bundling and combining, of course, the technology, but also our go-to-market channels there to create extra growth. In the longer term, we will also work on audio solutions for Barco's professional market, so in Cinema and in Immersive Experience. And that, of course, also will create synergy and a bigger ecosystem play for Barco in those markets. That's number one.

The second reason is innovation. Both Barco and VerVent, we are engineering companies, we're technology companies. They basically know best what to do in audio processing. We know best what to do in image processing. And we truly believe by combining image processing with audio processing in the future and also the system integration because both of our companies are, of course, experts in system integration that we can come up with solutions, which the 2 of us separately could not do.

And the third one is brands. Barco has, of course, brand in visualization, but VerVent Audio has 2 very iconic brands, Focal and Naim, and they are very well known in the audiophile market, but also in the high-end home market. They're further expanding actually in what they call lifestyle applications, also the automotive sector. So that is, of course, where we will leverage and preserve the brands of VerVent. In the professional markets, once we start adding audio to the professional markets, then, of course, also the Barco brand is very well known in those markets. But that is basically our main focus and the main reason why we acquired VerVent.

Let me then move to Enterprise. So we saw mixed results in enterprise, continued softness of the BYOD market in meeting experience, but that was offset it with a very solid performance in the control room market. When you look at the numbers today, orders landed at EUR 115 million, which is 5% up, mainly driven by Control Rooms. And sales is down with 9%, landing at EUR 98 million, mainly driven by the lower top line sales in Meeting Experience.

Gross profit margin did go up with 2 percentage points. Also here, having more software in the mix, mainly coming from Control Rooms is adding to our gross profit. EBITDA landed at about 6% of sales, mainly driven by top line and lower top line in Meeting Experience. So talking about Meeting Experience, we see continued softness in the BYOD market. This is already now a couple of quarters that we see that. Overall, the market is slower. We see replacement pace also being slower. We did not grow in the first half in EMEA and in the Americas. We saw a slight growth in APAC.

Meanwhile, we have launched, of course, our ClickShare Hub, which is our Microsoft Teams Rooms system, and that's gradually getting adopted by the market. Here, we are certifying more bundles. And what that means is that we combine our ClickShare Hub with the video bars and the cameras of third parties. And the more bundles we certify, of course, the more reach we have. On top of that, we are adding also more features to the ClickShare Hub. The last one we now launched was the BYOD switch that we implemented on our Microsoft Teams platform so that you -- depending on the type of meeting you have in one meeting room, you could switch from a BYOD setting to an MTR setting. These extra features, also the extra bundles that we're certifying is definitely going to stimulate our ClickShare Hub sales for the second half.

Moving on to Control Rooms. So that was definitely the highlight on the first semester. I mean, as well orders as sales did grow in all regions for Control Rooms. That was a combination of our control platform, but also the UniSee wall, so the LCD wall as a replacement wave that we're introducing for the Rear Projection cube right now. The control platform is doing extremely well. That represents now already 43% of the total sales and is growing rapidly year-over-year. And that reinforces basically the strategic decision that we took a couple of years back that we said in Control Rooms, we are going to really focus on that software-based secure control platform, which we're migrating now to what we call KVM over IT system. And this is what the customers seem to want because they want basically software-based, connect people, systems, different systems and different sites. And that is now exactly what the control platform is catering to.

Then moving to Healthcare. Here, definitely mixed results, solid performance in Diagnostic Imaging, but a very weak performance in Surgical. And if you look at the numbers, orders at EUR 109 million, down 23%. Sales at EUR 121 million, down 12%. And if you look at the EBITDA, well, very low, EUR 3.5 million, and that only represents 3% of sales. Main reason for the low EBITDA is, of course, the lower top line in Surgical. It's also the fact that we are transforming surgical, and I'll give you in a minute a more explanation on that, which meant that we need to keep on investing in R&D. And also that all the OpEx savings actions that we took already, but that the majority of that impact that we're only going to see in the second half.

But let me start with Diagnostic Imaging. For Diagnostic Imaging, very solid performance. We see the replacement wave in radiology and in mammography really getting traction. We are the leader in those markets. We are recognized as a leader. We have very high-quality products now in the field. And we feel basically we have a large installed base, and we feel the trust of our installed base in renewing their portfolios.

Also in digital pathology, we're doing very well. As you know, digital pathology is a little bit later in the digitization wave, as we call that. We are going to this market with as well hardware solutions, which are the pathology displays, but also software solutions, which were developed within Barco. SlideRightQA is the one that we explained to you last time. This is now an AI use case to improve the efficiency in pathology labs. And the combination of these 2 is really opening doors in pathology world. We're seeing a lot of traction. It's an emerging market, but we see a lot of traction. And we believe that Barco is one of the first movers in that digitization wave, and we basically want to really take share of that and also grow in this market.

Which brings me then to modality. As you probably remember, end of last year, we made an organizational change that we moved modality with the operational center in Suzhou in China. The main reason to do that because modality for us that is custom displays for OEM, large system integrators in the healthcare world. It's a very competitive market. Cost and being cost conscious is really key in this market. That is the main reason why we moved this to Suzhou. And we see there our business stabilizing. We see basically new projects, new contracts coming in. So definitely there, we can confirm that moving this operational center to Suzhou was the right move to do.

And then we go to surgical and the surgical market is weak. We -- as mentioned already a couple of times, we are losing big contracts. Typically, in surgical, they are very big contracts. They are for years when you are designed in. And it turns out to be extremely difficult to replace these big contracts in a short period of time. We are putting all hands on deck there to basically fix this. That means building up customer relations, working on new projects, which also means new products that we need to develop.

There we're, for instance, focusing on what we call NexxisCube, which is a mid-end solution for the Nexxis market, new display types, also in Summer Valley where we are introducing edge compute so that we can run real-time applications on that system. But all of that takes time as well the trust as the development, as the design-in cycle with these large system integrators, it takes time. We have taken more measures in surgical. We basically -- and in healthcare in general, we have moved now the entire Healthcare division under one leadership. That's under John Zhao, who was leading modality in China. And the reason why we do that is to avoid fragmentation to simplify the organization to speed up decision-making and definitely also to improve execution discipline.

So that combined now with the new portfolio we are building with also our migration into more software, which is definitely already happening in diagnostic imaging, but will also happen in surgical. This gives us confidence that we will turn around healthcare and that we also here have the right ingredients to turn it around and turn it back into growth.

That said, maybe a very quick recap on our strategy. This is what we also showed you at Capital Markets Day, and it's what I have repeated now already for our divisions. For Barco, we have multiple layers. Historically, we started with hardware. We built and pioneered definitely in network solutions on top of that. But more and more, we will differentiate actually in software. And that starts with adding edge compute to our hardware. And then, of course, building software applications on top of that. That is still very consistent. And I think you see this actually the strategy rippling in many of our businesses moving forward.

Then our priorities for the second half. No, yes, maybe first -- no, no, we can repeat. Yes, of course, it's about bringing new products in the market. This just gives you a summary of the product launches that we did in the last 18 months. And as you can see, there are very big new platforms that we have brought to the market at Barco. There is HDR by Barco, which is, of course, a completely new cinema premium solution. There is Encore 3, complete new event switcher solution. NexxisCube, the mid-end solution for Nexxis. New displays going from a OneLook 32-megapixel NDI to a 3D monitor screen for diagnostic applications.

ClickShare Hub, completely new platform and more to come, Brilliant Assist, voice control, surgical displays, more to come here. But we have not been sitting still in bringing these new solutions to the market that sometimes takes some adoption time, but I think we're on the right track here.

And then that brings me to our focus areas, of course, for the second half. Yes, we continue our innovation where you will see more software and AI coming in. That also means that we are going to strengthen and make sure that we can maintain our leadership position in our core markets where we see the best strategic fit. We will also sharpen our focus and our investments on businesses where we see structural growth into the future. And last but not least, of course, also towards the second half, cost discipline and making sure that we introduce the right organizational efficiencies is key also to maintain our profitability, which leads me to the last one, which is the outlook for '26.

So a year geopolitical instability and uncertainties continue to impact the demand and visibility throughout the first half, but management expects full year sales above last year, including the recent acquisition of VerVent Audio Holding and an EBITDA margin in the range of 11% to 12%.

And with this, I'll hand it back to Willem for Q&A.

Thank you very much, An and Ann, for this presentation. I think we are ready for the Q&A.

[Operator Instructions]

I see that Marc is the first one. Marc Hesselink with a question.

First question is on the guidance, let's call it the implicit guidance for the second half of the year, which basically implies a very significant improvement versus the first half. I mean that's normal with your seasonality. But I also think that will be higher than next -- if you take the midpoint of the guidance higher than last year, which seems a bit of a challenge. I know you have talked about cost cutting, but maybe can you walk us through how you can achieve the midpoint of your guidance range in the second half of the year?

It's actually based on primarily 3 or 4 things being in the second half, there will be 6 months of VerVent where we have in the first half 2 months. So that has an impact. We saw on the top line of our Polytan business, the second quarter a better momentum already, especially already picking up and being at the same level of last year in the Americas. So in that sense, that's where we then have the outlook on the top line for the second semester in there and this on the 3 divisions actually.

Gross profit margins were resilient in the first semester despite a lower top line. So in that sense, further, I would say, keeping and even further improving. That's one -- and then it's about operating leverage. So operating leverage on that higher top line actually not only operating leverage, but also we took quite some cost decisions actually in the course of the second quarter, which then have an accelerated impact in the second semester. So it's a little bit all of that together, actually, that makes up for the better -- far better, I call it, normalized result in the second semester.

Okay. Okay. That's clear. And my second question is actually on your '28 guidance, the 15% margin. Just conceptually, the businesses as they are today and maybe structurally some additional weakness in ClickShare. Is that still achievable? And is that in that time frame because it will imply very significant improvements in the margin over the '27, '28 period?

Yes. So we basically hold our guidance for '28. So we basically believe that we can achieve the EUR 1.1 billion. The portfolio mix, as you know, also the focus that we're putting today in our businesses and how the portfolio mix is going to turn out might be slightly different. We're adding also VerVent to that one. But we, in general, think with all the actions that we have in place and all the strategic road maps that we have in our businesses, that we can hold to our guidance of '28.

Maybe then as a follow-up, the EUR 1.1 billion because that excludes VerVent, right? I mean that was organic, the EUR 1.1 billion, right?

Yes. But now, of course, because VerVent is now part of our portfolio, we constantly optimize our portfolio. That is what we need to do in the dynamics that we see in the market today. So by '28, it's part of the portfolio. And that is, of course, included then.

Thank you, Marc, for the questions. Any other questions from other people in the room. You can raise your hand by tapping the hand at the top. We see a question from Trion. Trion Reid from Berenberg.

Hopefully, you can hear me okay. I just had a first question about the -- you mentioned about the component prices. And obviously, it's a reason why your inventory has gone up. And we've heard all about sort of memory shortages and prices going up. What -- how do you think about dealing with that coming forward in terms of increasing your own prices? And what do you expect that to have? What impact will that have on demand? You mentioned your NPS score going up. Does that leave room to increase prices without impacting demand in the future?

Yes. So, of course, we are sensitive to memory and memory shortages and the price increases there. One action we took already, yes, we have already bought a wider supply so we can last for at least a couple of months and this year with the supply that we have. Wherever we can, we basically include that in our price. So we basically include that in the price. Sometimes that's a little bit also a timing effect when you increase the price, but we've seen actually our competition also increasing prices. And when you do this collectively and your competition does it, too, then it's just an effect of the market that everybody needs to swallow.

Back to your question, will that impact sales and will that slow down sales? So far, depending on the business, we have not seen these effects in, for instance, Cinema or Control Rooms or Diagnostic Imaging. One that we have to watch out for is, I think, ClickShare, especially also the new ClickShare Hub platform. It is a Microsoft platform that uses new generations of memories. And there, it's to be seen also how the competition, some of them are already increasing their prices, how they behave and then how the market is going to react to that.

That's great. And just maybe a second question just on VerVent. I mean, obviously, adding audio, we can see that. And you talked about the future adding sort of professional audio products, right, to your Cinema and maybe Immersive Experience. How long do you think that will take? I mean, at what point -- is that still within the 2028 sort of longer-term time frame? Or do you think it's going to take longer to develop those new products?

Well, the plans because the integration is in progress, and we're making very well progress. We focus first on the short-term things, which is the bundles where they have the products, we have the products that sell for home -- mainly for home cinema. For their professional audio, they need to make modifications to their current portfolio. So those road maps are being built right now. Yes, we typically say 2 years and then maybe in the market in the third year, which will be at the outer edge of the 3-year guidance, yes.

Thank you, Trion, for these questions. Any other questions from the room? You may raise your hand. Trion, do you have more questions, please? Go ahead.

I'll come back here. If everyone else is too shy, I'll ask a couple more. Just first of all, on VerVent, I was just going through your report and you talk about the sales and EBITDA contribution. I think if we exclude acquisition-related costs, it was sort of EUR 3 million if it was for the whole of the H1 period, right, on EUR 51.5 million of sales. If we sort of annualize that, it would imply an acquisition price of 21x EBITDA, if my math is right, which feels quite high, especially compared to your own valuation. I mean any comments on the price that you paid and how you justify that and how you expect to generate a good return, that would be useful.

Yes. So one of the things is also -- it's not only EBITDA, it's also revenue. And when you look at the revenue multiple, then we are yes, close to the 1.2x multiple. So that is one of the things that was also driving that. Then there is, of course, also things that we are going to have to do today on the improvement of the EBITDA and how we can basically also get them to the 15% level that we for Barco have as our end goal.

Is this expensive? It's not cheap, that's true. But we truly believe that the value is there that we create the effects and the value by merging the visualization and the audio together. And that actually that extra, this 1 plus 1 is 3 effect that we will see this in the growth that we can present actually in the coming years in entertainment. And that I think when we look at that goal, then we say, okay, this was a fair price that we paid for it.

So being early days actually, but happy with the kind of kickstart that they made since they are part of the group actually. Likewise, then on the outlook on the second semester actually then also adding to recurring revenues being smaller, but it all helps actually. So in that sense, making or, I would say, on plan with also the business case and plan, which we laid forward as part, actually, of the due diligence. So that is still early days, yes, but at least on track on the start, so to speak. So now it's full steam ahead together...

And I think the other plan is also a very convincing business plan. So the way that they basically are presenting their growth for the coming years in their own markets by expanding into more lifestyle applications, they work through points of sales. And for them, that is actually a multiple how they increase the sales. And then, of course, the synergies that we can add by adding all new to the professional markets. So yes, if you take that into account, that basically brought us to our EUR 135 million acquisition price.

Okay. Good. And then maybe just a final one on Healthcare and particularly surgical. Obviously, this seems to be the sort of source of the EBITDA weakness in H1. You talked about you lost these bigger contracts. And in the press release, you say specifically that you're shifting towards this cost competitive and scalable mid-segment solutions, which I think is the NexxisCube that you've talked about before.

I was just interested in 2 points. One, why are you not able to replace those contracts? Is it competitive? Is it just a delay, a time lag? Or is there something structural really happening in the market? And if you do manage to shift towards these more cost competitive and mid-segment solutions, does that have a negative impact on the gross margin?

Yes. So on your first part of the question, when contracts end and they are ending in time, that's just the way it is, that is typically for a large system integrator, the moment where they design a new system, but also look at what they need. And typically, some of the parts that we deliver, they need to become cheaper. So there is a cost competitive effect that will -- that is created once they start designing new systems. That is one of the reasons why indeed NexxisCube is a more mid-end entry -- mid-end solution compared to the high-end Nexxis solution that we have. That is one trend we see. That can be a Nexxis, that can be in the display.

The other trend that we see is once they start designing new large systems, they also need innovation. They want to introduce new features on their systems. And for many of these features, that could be a new type of display, but very often, this starts now being in software. They want to add real-time compute. They want to overlay an MRI on the video image during a surgical intervention. So -- and for that, their infrastructure, and that's typically then Barco plays a role, also needs to be adapted. And that takes time.

So it takes time from their side because they need to come up with a blueprint of the design. Then we need to custom design that and that takes time. Then we need to certify it together. And then actually, you get a confirmation of a PO that you're in that design and then typically, the volume starts gradually picking up. So this is the time that you have to spend with these large system integrators to get designed in. So I think it's the 2 effects. It's one, the cost competitiveness that indeed you need to go to more entry-level products.

Back on your second question on the margin and the price. So we have also learned now for the entry-level products. That's why we also have R&D in China to really from the design -- on design already with less costly components so that we take that into our design. So in that way, we can still actually secure margin even on the products.

Any other person in the room who likes to ask a question, please raise your hand.

Okay. If there's no other questions, then we can conclude the call. Thank you for these questions, and thank you for attending our call today. And the recording of the call will be available later today around noon on the website, and we wish you a good continuation of your day. Thank you very much.

Thank you very much. Have a good day.

Good morning, ladies and gentlemen. Thank you for joining us on the earnings call for Barco's Full year Results 2025. My name is Willem Fransoo. I'm heading Investor Relations at Barco. I'm in the room today with our CEO, An Steegen; and our CFO, Ann Desender. They will guide you through the presentation. And after the presentation, we will open up for questions.

So I would like to give the word first now to our CEO, An Steegen.

Yes. Thank you, Willem, and good morning, everybody. Let me start with a summary of the full year results for 2025. And as promised in our guidance, we delivered profitable growth for '25. Sales landed at EUR 964 million. That is 2% up compared to 2024 and 4% up if you compare it at constant currency. The main contributors to the growth came from Entertainment, which was up 11% and from the EMEA region, which was also up 11%. We faced some headwinds in the U.S. with tariffs and a weak dollar.

We saw slightly lower orders. In general, we see a new trend actually shorter order cycles because since the shortages, the supply shortages are now out of the way, we see shorter order cycles and also more book and turn. So that was one reason. The other one that we had by end of '24 also some preorders for the Encore 3, which didn't happen at the end of '25.

Now we also had a very successful launch of our HDR by Barco Cinema, premium cinema offering. This basically reinforces our Cinema as a Service and also helps us build recurring revenues in our cinema business. So in cinema, thanks to HDR by Barco, we are moving away from a onetime projector sales to a recurring revenue stream over the lifetime of the projector.

In EBITDA, we landed at EUR 125 million, which is 13% of sales. This was definitely supported by a very strong product mix. That, of course, was offset with the impact of tariffs and currency. We also basically had disciplined execution. So we basically resulted in an OpEx spending 4% below last year. What is also very important to mention is that in '24, we had a onetime one-off income, EUR 10 million income from a sale-leaseback from our building in the [indiscernible].

So if you take out this nonrecurring part in '24 and you count in and you take out for a second, the EUR 8 million impact that we see from the FX from the currency, the EUR 7 million from the tariffs, then you could say that in recurring EBITDA, we grew about EUR 30 million. And that is a very strong representation of our business performance in '25, our very strong product mix as well as our disciplined execution.

In earnings per share, we basically increased the earnings per share to EUR 0.85. That's 20% up year-over-year. We returned EUR 120 million to our shareholders, EUR 44 million of that was coming from the dividend. The other EUR 81 million by the end of '25 basically was what we paid back in our 2 share buybacks that we did in '25.

Also for this year, the proposal is to increase the dividend to EUR 0.55 per share, and we also are proposing to cancel 6% of the outstanding shares, which is, of course, more -- giving back more value to our shareholders per share and also basically building up earnings accretion for the future.

Now for the outlook '26, we expect as well top line as EBITDA growth for the full year, excluding currency effects. We see the growth again skewed to the second half. I say again because this is really a typical behavior that we see at Barco, more growth in the second half of the year, and we also expect some more currency effects in the first half. We also reconfirm our long-term guidance as we communicated at Capital Markets Day in October.

And with this, I'll hand it over to Ann Desender for more financial details.

Good morning. Starting with orders and sales. So as indicated on group level, excluding or at constant currencies, our sales has been growing by 4% year-over-year and orders getting closer also to last year at constant currencies with below 2% versus the year before. When also indicating additional 2D orders, indeed, we do see with a normalizing of supply chain speed and no longer supply chain constraints that we do see that the order to sales conversion is getting faster and that indeed also customers do tend to order a little later or we have the lack of preorders, it like that.

From a regional perspective, EMEA had double-digit growth both in orders and in sales growth. When you look to the divisions and more on that later on, then we see that Entertainment is here in a position, call it like that. The Americas reported growth minus 3% sales year-over-year if we exclude currencies getting in line with the year before. And order intake was indeed challenged and that in particular in the second half. A couple of things were explaining that currency, of course, has an impact 3% on a full year basis.

We had a larger cinema order being shifted out and which is to the tune of about EUR 20 million, which we could now already sign up for and we have been able to book now in January '26. We did see impacted by tariffs and impacted by what's going on in the U.S. lower and delayed government spending that has in particular an impact on our business in control rooms and in Healthcare diagnostics in particular.

And then after a strong first half in Surgical, we did see lower signing of contracts or renewal of contracts in the second semester, which then indeed if you look first semester, second semester [indiscernible].

APAC top line landed in line with last year, minus 2% reported in line if we see that at constant currencies. Our order book landed at EUR 493 million. Also there are some translation effects on that. So we'll see how that evolves going forward. And if we compare it to the year before, the year before, we had some preorders on newly launched products and the biggest one there was Encore 3, which we then were able to deliver all in 2025.

We included here again like we normally do the waterfall on our EBITDA from one year to the other. But this year, indeed, in particular, pointing out a couple of, I would say, headwinds, which have been compensated by the headwinds coming from indeed currency effect coming from tariffs. Tariffs so the extra tariffs which we pay and that's primarily on projection coming out of Europe, which is to the tune of 15%.

And then also with respect to Healthcare, we had some '25. The gross impact which we have been able to mitigate it via the price increases for the half of that. Now what we single out here is the gross impact on the tariffs and then on FX. Then together with the -- and then the red block, so to speak. So last year, other income included a nonrecurring gain on the sale and leaseback. So we add up those 3 blocks to get to EUR 30 million, which we then did offset to come to an increase in our profit and profitability.

So this thanks to higher top line, 4% top line growth continuing actually throughout the year on a better product mix with the new products which we launched with more software, with the impact of our factory footprint and cost mitigations, which we can do there. And then with a tight cost management indeed, we've been able to lower R&D as we had many product launches prepared in '24, which we then have in '25. So we could get our R&D then back in a more normal range of 12.6%.

Sales and marketing G&A in line with the year before, but getting there to a tight cost control. So combined, OpEx, 4% lower than the year before, sales up 4%. So that brings us to the 13% EBITDA margin.

Taking you further down to the net income. So starting indeed from this EBITDA, EUR 125 million. Depreciation, some higher has all to do with the further uptake of Cinema as a Service in our portfolio now also including HDR in there, some increase. The cost containment we've been able to do and the cost down was already started in '24 where we indeed had some higher restructuring costs in there, but that yielded and was more than returned, call it, into an impact of the OpEx in '25.

Effective tax rate, we've been able already since many years to manage that well and get at this 18% effective tax rate and with that landing at an earnings per share of EUR 0.85 and up 20%. This is before even, so that's another uptake to be expected, the impact of the diluted shares as this has to be formalized via the Annual Shareholders' Meeting to approve this in April upcoming.

Free cash flow for '25 landed at 6% of sales, which is nominal EUR 57 million. Starting from a gross operating cash flow, which increased to EUR 24 million year-over-year. We did see a slight increase, 1% up of working capital, which has to do actually with some lower customer advances on bigger contracts, which also has to do with the fact that inventories while staying flat year-over-year, this includes also some impact of our Cinema as a Service business, where we have that's expressed in the contracts in progress about EUR 10 million, which is included in there.

DSO landing at 65 days, which is below the average days which we pay our suppliers. So that's what we want to see. So this is at 70%. Inventory turns being -- so inventory flat year-over-year has some slight improvement to 2.2x with further opportunities to improve. Our capital expenditures landed at EUR 38.5 million. The main ticket items in the Cinema as a Service as well as then the manufacturing automation and footprint included in.

Net cash landing at EUR 186 million at year-end, which is about EUR 73 million lower than year before, up in there, of course, the free cash flow of EUR 57 million, but then combined returned more than EUR 120 million to our shareholders in the form of dividend and share buyback.

When we look finally to the nonfinancial KPIs, sustainability KPIs, very glad to report a very big uptake and further improvement actually. Eco-labeled revenues or revenues of products with an Eco and Eco score A or better have further improved to 67%, up 8% versus the year before and with that also surpassing the target which we have set. It primarily comes down to the fact that all of the new products which we launched have that Eco-labeled. This is on a broader scope also including the scoring of software and services very so glad with the 67%.

By coincidence then also our employee engagement score landed also at 67%, up 76%, saying up 3% year-over-year and also with that also overachieving the target which we had. Headcount at the end of the year, 3,253 colleagues at year-end, which is about 3% lower than 2 years ago, flat or in line with the year before.

Customer Net Promoter Score, which we measure throughout the year and in particular, 2 surveys twice per year then actually where we take all of the recommendations too hard for it like that, and that is really yielding off. Net Promoter Score landing at 60, 6% improvement compared to the year before and constantly actually getting above the target, which we set for ourselves. In there also saw a very nice improvement driven by product quality, which is, of course, key to us and to our customers and also the aftersales service and the NPS on services, which landed at the top score.

With that, I hand it over back to you, An, to give a little bit of more color on the different divisions.

All right. So I'll start with Entertainment. So a very strong profitable growth in Entertainment coming from both business units, double-digit sales growth like on average 11%. So we also saw a very strong profit growth, 27%. And of course, there, it's the top line leverage because of the strong top line. We saw an 8% gross profit growth coming, of course, from a good product mix and volume.

In Cinema, we saw growth spread out over the year, and we also saw growth in all regions. There, we have, of course, the lamp-to-laser replacement wave as well as the push for premiumization in cinema theaters. This drives our growth and also basically with a capture rate of far more than 60% drives our leadership position in the cinema market.

In '25, we also closed some large frame agreements, and that is, of course, good for revenue visibility in the future as well as reinforcing our installed base. As I mentioned before, we had a very successful launch of our HDR by Barco premium cinema offering. So with this one, we basically deliver more image quality, deeper colors, more contrast to our exhibitors. And for Barco, it really positions us again as a frontrunner in technology leadership in cinema.

In '25, we basically installed more than 50 systems, and we have more than 100 systems in the pipeline for '26. Now what is extremely important, again, for HDR by Barco that it shifts our business model from a onetime projector sales to a recurring revenue stream. This recurring revenue that is based on annual license fees, box office sharing, licenses coming from content creation or content integration in the postproduction houses, also managed services.

And by doing this, we basically provide a recurring revenue stream over the 15-plus years lifetime of these projectors. So this is a very important shift in business model for our Cinema business, which will, over the lifetime of the projector also create much more value for Barco.

Now when you look at the total contract value of all the HDR signed contracts that we have already, that basically totals up to EUR 89 million, which is also, again, a sign of the acceleration we are doing towards recurring revenue. In Immersive Experience, also there, we saw a very strong growth in EMEA and APAC, our new platforms, that is QDX, our 3-DLP flagship high-end projector as well as our mid-end 1-DLP 600 projectors are doing very well in the market. In 3-DLP, we continue to basically be the market leader. And in 1-DLP, we are really stepping up and gaining market share.

And then, of course, also, we had a very successful launch in third quarter of Encore 3, our image processor. And again, there, that is boosting sales as well as profitability but also it reestablishes our leadership position in the image processing market.

So in general, for Entertainment, a very strong momentum and profitable growth in '25. And with all the new platforms that we're coming, we foresee that we can basically continue this strong momentum in '26.

Then I'll move to Enterprise. So in Enterprise, we basically show stable profitability throughout a quite complex year to say it in that word. That was basically the strong or the stable EBITDA was driven by a strong product mix and of course, also disciplined execution.

In Meeting Experience, we see very stable growth in EMEA and the Americas. In APAC, we still face quite some competition. We're still very much the market leader in the agnostic wireless BYOD space. And what really differentiates our products there is the fact that we basically are interoperable. We're agnostic. We basically also are license fee model and it's very secure platform. And this really differentiates us from the more standardization you see in general going on in the video conferencing market.

But on top of our wireless solutions, we basically also released now and are expanding our portfolio and we released our first room system solution that is called ClickShare Hub. We released that in December last year. We see already quite some interest and traction. I was at ISE last week, and there was quite a lot of enthusiasm about our ClickShare Hub. We're also shipping and are already installing devices in the field. And what's also important to say is that, that room system, so ClickShare Hub is now certified by Microsoft. And this allows us to basically tap into the larger ecosystem and channels from Microsoft, which will basically also expand our reach moving forward.

Towards '26, we foresee even more form factors on this new platform, video bars, also a BYOD version on a similar platform. So more basically devices of this family will be launched throughout '26. For control rooms, we basically saw growth of control rooms in EMEA and in APAC, especially in the utilities and the energy market. In control rooms, we are still very much in the transition from hardware to software, where our Barco CTRL platform is very critical for the future of control rooms.

We did face challenges in the U.S., delayed government contracts. We also faced some fierce competition in LED walls in the Middle East. That's also why last year, we changed actually our LED strategy in control rooms. We basically are now partnering up with major LED wall suppliers, and we are delivering our proprietary and high-performing LED image processing. This way, we can still offer the complete LED solution, but in a much more profitable way.

So in general, in Enterprise, complex macroeconomic environment here. We could deliver stable profitability here, but the momentum towards '26 with all the new platforms that we have is basically giving us a lot of confidence that we can basically deliver growth in '26 in both of these business units.

And then Healthcare. So in Healthcare, we saw mixed results. So we -- in Diagnostic Imaging, we saw growth in EMEA and in APAC that really reconfirms our leadership position that we have in Diagnostic Imaging. We also saw very strong growth in pathology, but that was, of course, offset by challenges in the U.S. where we saw slower orders coming in because of government delays. We saw impact for tariffs and currency. And that basically resulted that we have a lower EBITDA. So we landed at EUR 26.5 million, which is 22% lower. So it's 10.1% of sales, but 22% lower than last year.

In Diagnostic Imaging, we are also basically further expanding our offering with software applications. One that really got a lot of traction in '26 was SlideRightQA. This is basically where we improve the efficiency of technicians in the pathology lab and also the quality assurance in the pathology lab. So that is really getting a lot of traction. We have more of these applications coming.

In Surgical, we started with a strong first half, but we see -- we saw contracts expiring in the second half, which as typical again in Surgical, it takes time to be designed in and to replace those contracts. We also basically changed our organization in Healthcare. We merged the Surgical part together with Diagnostics to leverage basically synergies, synergies as well in the platforms that we deliver as in the go-to-market. But we also basically moved the entire ownership of our Modality business, which is really in a very cost competitive commoditizing market.

We shifted the ownership now completely to our Suzhou Healthcare hub in China. There, we basically have value engineering in China as well as local component sourcing at our production. And this is the way that we can compete with our Chinese competitors that we have in Modality.

Also for this year, we have quite a few software-based products. So again, flagship products coming out. One of them are the 3D displays that we are going to launch now for presurgical analysis in the eye and in Surgical. We have the voice control brilliant assistant Surgical display and then NexxisCube, which is our mid-end version for mid-end operating rooms of our network in the operating rooms.

So in general, we basically can say that we have very strong foundations in Healthcare. We have a leadership position in diagnostic display. We are really stepping up our efforts in adjacent market as well as in software. And of course, for '26, it is extremely important that we turn around the U.S. market and that we leverage the synergies between Surgical and DI and really become very cost competitive with our Modality efforts in -- coming out of China, Suzhou.

All right. So with this, I'll come to the outlook. And before I go there, I just want to do a very quick recap of what we said at Capital Markets Day. So this is our innovation strategy. Very simple. It's based out of 3 layers. It starts with visualization. This is our production and display technologies where we really, really improve the performance through our advanced and proprietary image processing.

Then we have the connectivity layer where we transport video and audio data from the source to any type of display. And then more and more, and this is, of course, where Barco's legacy truly shines. But more and more, we are adding software applications, AI use cases to these offerings. This way, we will improve the product -- the efficiency, the productivity of the operators using our systems.

But for Barco, this also means that we can step more and more into recurring revenue. AI, you see coming back in all of these layers. We're using it in visualization to improve our image processing. We're using it in connectivity to add edge compute for real-time computation in our applications. And of course, we're using it also to deliver applications that support the workflows of the people that use of our end users.

So with that, the key priorities for Barco are all around expanding in our core markets, how do we do that? Completing the strong track record that we have already in our portfolio, high-end products, flagships where we set us apart from the competition as well as mid-end products which are more price competitive.

We're also stepping aggressively into new adjacent market. And again, we lead premiumization in cinema with its HDR by Barco as a key enabler. Second pillar is that we focus more and more also on software and AI workflows. This is to help our end users, but for Barco also to step more and more in recurring revenues. And of course, as we have a very good track record, we will also basically optimize our capital allocation. We continue to look in inorganic growth with M&A. And we basically have also our return, our capital allocation and the return programs through dividends and share buybacks to our shareholders, which brings me to the outlook.

So as we said already, it's hard to predict how the macroeconomic trends are going to evolve. But assuming that there is no major deterioration in the macroeconomic trends, we foresee growth as well in top line as in EBITDA at constant currency. We foresee that for the full year, but we basically the growth is going to be skewed to the second half of the year. It's a typical thing that we see year-over-year at Barco, but also we see some impact from the weaker dollar in the first half of the year.

We also want to reconfirm our long-term guidance that we basically communicated at the Capital Markets Day. Just as a reminder, we basically see there also continued shifts from CapEx to OpEx. We guide for a EUR 1.1 billion revenue, 15% EBITDA and 15% recurring revenues by '28.

And then last but not least, the Board will propose a dividend of EUR 0.55 per share, which is up EUR 0.04 versus last year. We also completed, as we mentioned before, 2 share buyback programs, the one completed in July that was for EUR 60 million. The other one completed end of January for EUR 30 million. The Board of Directors will also propose to the general assembly to cancel 5,575,000 shares, which is approximately 6% of the total outstanding shares. And again, this will deliver more value per share and also earnings accretion moving forward for all our shareholders.

And with this, I'll hand it back to Willem.

Thank you very much, An and Ann for this presentation. I think we are ready to go into Q&A, and I see some of you have already raised hands.

So first question is for Alexander Craeymeersch. And I will allow you to unmute yourself before asking your question. Alexander is from Kepler Cheuvreux.

Yes. So I just had a small question on the Healthcare segment. So the challenges in the U.S., you mentioned tariffs, but that would imply that's a short-term effect. But then when you look to the outlook, you look rather cautious even on Healthcare. So I was wondering why don't you think it's short term? Or do you think it's more like structural that this is also related to the cuts in Medicaid and stuff like that?

Yes. Thank you for the question. So you're right. So the tariffs impact was something that happened in the first months where we still needed to basically reallocate our flows from our factories, China to Europe to really basically mitigate the impacts of tariffs. So there, we don't foresee that, that is going to get worse in 2026. We also see in Diagnostic Imaging really getting traction with the new products with the software. So there, we basically see definitely growth potential.

In Surgical, also there, new products are coming out. But as we've mentioned already before, it takes time to replace contracts that were finished. It's a very long design in time that you see in Surgical. And these are typically long framework contracts, which basically are for quite some amounts, and that takes time to replace them.

Here again, we also want to with the synergies and the merger between Diagnostic Imaging and Surgical. We want to leverage synergies in go-to-market. Just to give you an example, where in Surgical, almost our entire Surgical business is going through OEM business and very limited through distribution.

In Diagnostic Imaging, that is just the opposite. So we have much more going through distribution than through OEMs. We're trying to basically see if we can leverage some of that discipline that we have in Diagnostic Imaging also to Surgical. And that's also a structural change that will take some time to basically get there, but that is where we're focused on. And besides that, of course, leading the path in Surgical with new products with innovative products that sets us apart from the competition is also a continued focus for us.

And then the last one is Modality. There, it is a commoditizing business and with strong Chinese competition. So there, we will fight at the same level with our hub in China, where we are going to make sure that we are coming out with cost competitive products that also help actually grow our profitability in the future.

Okay. So if I can just have one add-on question. So look, the margins compressed quite a lot in H2. So the question I would have, what part of this margin compression is short term and what part is structural?

The impact which we saw on the margin from tariffs is gone. So that's nonrecurring. So that will be an upside over there. So that has a primary impact and then it comes indeed currency, we do foresee some impact still in the second semester if currencies stay like they are first semester. If they would stay like they are, it would be the same level as we have in the second semester of '25.

So we'll see where that goes. But aside from, I would say, the impact from FX, which did have an impact on Healthcare in particular, that if it stays the same impact still second semester, not anymore in the first semester, not anymore in the second semester. As we have quite some new products also coming out and that will then evolve over the year as such, that's another [Technical Difficulty].

Okay. So what I hear is that basically Healthcare margins should recover in 2026. Looking at the consensus today, with the EBITDA margin standing at around 13.5% if the consensus, you actually would expect that if Healthcare margins basically recover that you would end up closer to the 15% mark. So just wondering whether...

We don't guide on the divisional level, as you know, of course, let's call it, back in the right direction. We can cancel that one.

Next in line is Stefano Toffano from ABN AMRO.

So I had a similar question actually to my colleague. Let me maybe perhaps phrase it differently. So it seems to me -- I understand that '25, lots of headwinds, the tariffs, low visibility. But it seems that a lot of that is already in the books and you do have quite some more visibility also given the new product launches. Why does, again, an outlook so qualitative, if I may ask? It still feels like you should be able with what you're seeing today to be a little bit more concrete on your outlook, if I may be so free.

Then maybe -- sorry, I ask another question. Maybe also then on the Entertainment because it seems that you're extremely confident that the strong momentum will continue. HDR, how much potential does that have over the next few years?

And maybe a last question then is simply on the working capital. Where do you see that normalized by the end of this year?

Yes. So maybe on your first question again, are we too cautious on guidance? We've learned to be cautious, to be honest with you, with all the macroeconomic effects that we've seen over the last years. We definitely have a lot of structural activities going on that are going to improve, especially then in Healthcare, our profitability. The timing there is something that we have to see. So when exactly are the new products going to be introduced, the lead time it takes into the market. And again, especially here, I'll repeat myself in Surgical, especially in Surgical, that lead time is quite long.

The other thing is also basically gaining back the confidence in Modality to make sure that we have the cost competitive products, which we have, but also basically stepping up there and basically opening up the doors there again. It's something that takes some time. These are all structural positive things, but the timing there is something that we're building up this year and then also going into the next years.

On the HDR, thank you for asking that question because, of course, the extra value that we are going to create for Barco over the lifetime of an HDR projector is very significant. If you compare it to a one-off sales, we basically can quote numbers between 8x and 10x for Barco over the lifetime of that projector. And the good thing about that one is also that it's recurring revenue. So you don't sell 1 year and then for 15 years, you have no revenue coming in, like one-off projector sales typically is.

Now you have that recurring revenue building up over the years to come during the lifetime of the projector. So that is why this is such an important switch in cinema because, again, the lamp-to-laser replacement wave is now 35% and there's still a way to go, and that will still take years basically to get that completely upgraded. But after then, these projectors last quite long. So for Barco, it's important that we basically are coming up with that new business model, which HDR by Barco allows us to do now.

Maybe to complement before I can take the question on working capital, with respect to the expectations on Enterprise in particular. So we are very happy with the first success we do see on the ClickShare Hub, but how fast that will pick up and then evolve over the year, that's a little early in the year. And that also in part explains why we are not more specific on the uptick. But indeed, the bigger uncertainty remains what we've seen and what we've learned over the past years on the macroeconomic side.

With respect to working capital, yes, we want to get that back to the 12%, actually, call it like that. Yes, the contracts Cinema as a Service, which is a great investments actually and yielding into long-term results and profitability has some impact also on free cash flow on CapEx and also on contracts in progress included in working capital, but we have more opportunities to lower inventories in particular, and that's what we do want to go after.

Okay. Thank you, Stefano, for the questions. Next is from Guy Sips from KBC.

My question is related to the ASP of ClickShare. So first on pricing power versus and product mix. ClickShare sales declined again in 2025, while competition in APAC intensified. Can you elaborate on how ASPs evolved across regions? And to what extent mix effects at conference versus bring your own device versus the new ClickShare Hub supported or diluted the ASP levels. So I want to know the impact of the room system transition on ASPs, while ClickShare shifted from a bring your own device only model towards Microsoft certified room systems. Should we expect structural ASP uplifts from this repositioning? Or will increased bundle pricing pressure from the Teams Rooms ecosystem limit ASP expansion?

Overall on Enterprise, actually, we foresee a further uplift of the -- or containing and no down on EBITDA margin likewise on gross margin and which is the combined of everything. When you say -- we saw indeed a lower sales over '25, but this is primarily, of course, because room systems market has grown faster than the agnostic play. And we only had our ClickShare Hub towards the end of the year. So that did have an impact where the average, I would say, ASP has on the agnostic is gradually indeed some lower with going into the new offerings, which we will do with being more, I would say, some hardware more into the bundles that will have an effect. But yes, I would say volume and uptake of sales will on its own also have a positive impact on then where we target for the gross margin.

Yes. And maybe to add, so also in 2025, indeed, agnostic market was declining. We definitely kept our market share. It's not that we did massive discounts on our ClickShare that we had in the market in '25. We did not do that. And regarding the new wave, so the ClickShare Hub, so this is basically priced in a competitive way. Again, there, the volumes should also help maybe a slightly lower margin on these products to be competitive there. We'll have also differentiation built into our ClickShare Hub which again are features that we ported from the agnostic version in there, which also will differentiate us in the market. Yes. So in general, we believe that is going to help us to basically position the ClickShare Hub very well in the market as of now, basically.

Next question is for Kris Kippers from Degroof Petercam. We will to the next and next is the Marc Hesselink.

So first, I want to get back on the guidance of the margin improvement. So you're not looking on the divisional level, but maybe then from a gross margin and from an OpEx indirect cost level. I think if I read you correct in the previous statements, there should definitely be some upside to your gross margin given less impact of the tariff and all the moving parts. I think in '25, you also made a very good cost control on the OpEx level. So if you look at those 2 buckets, is it -- does it mean that indeed for the '26 period is predominantly gross margin and less on the indirect cost? Or am I missing anything?

Well, the gross margin, indeed, yes, we have. And so in that sense, and OpEx management, yes, like we did in the previous years, actually, yes, we're also swift on that one. So I would say before further increased top line growth as being concerned, so to speak. We are also, I would say, selective on the investments of quality, having a strict control on that being that, yes, we do continue and invest into our road maps. We are not holding off to that.

But then yes, we do offset with further automation, with further process optimizations, simplifications. I would say, yes, there's always further room for improvement. Also AI helps us on that to, I would say, make sure that we also further work on cost efficiencies to allow the selected investments and full speed ahead, which we do and maybe to name 2 more, I would say, big investments planned versus prior year is on the completion of the portfolio for ClickShare further along and then actually on HDR and go-to-market, call it a little bit more marketing-related spending.

Okay. That is clear. Then the second question that I had is on the Entertainment division, clearly performing very strongly, I think the top line as well as margins. But especially looking into cinema, yes, you also see that the market for cinema is not great. And I know you have a different dynamic. It's a replacement cycle and anything. But just in your discussions, I mean, do you see any feedback on that, that the cinema owners are having those issues with attendance and that kind of levels?

So I think the Cinema business and getting people to theaters depends on a couple of things. It depends on good content, but it also depends on good technology that gives the audience an experience that you don't have at home. It is proven there is a period that movies would first be released off streaming, not go to the cinema theaters. And there are analysis made that basically say most of the revenue coming from a movie comes from blockbuster weekends. So from opening weekend for blockbusters. So that is still a trend that studios really stick to.

So if you look at the combination of the 2, a good content slate, and we know for '26 that is going to be a good content -- there is going to be a good content slate as well as having new and remarkable technologies that can really draw the attention. And we are very positive on our HDR by Barco because from everybody, if it's now from the studios, the exhibitors or from the audiences, this is really a wow effect. And this draws people to the rooms where we have HDR by Barco installed. So that's one positive.

And the other one, as you mentioned, of course, we're still far from done from the lamp-to-laser replacement wave. And this is, of course, a cycle when the when the projectors near their end of life, you have to replace them. They extended already the lifetime of some of these projectors during COVID. So this is just happening right now. So that's why we are very confident about our cinema growth this year and the coming year.

I can confirm on that. And indeed, as you point out or the question is that if the latest, I would say, discussions with customers on that, it's certainly not that they are slowing down versus the plans which they had or in the replacement or, I would say, for the large frame agreements we have there and then the call of orders in there. So that is continue. We don't see a slowdown.

Okay. Okay. Good to hear. Maybe a final quick question is, you mentioned shorter lead times because of normalization of the supply chain. And then you say, okay, you're seeing a back-end loaded growth. I mean I just want to really get clear on the visibility because I think if lead times are shorter, it can also be tricky a little bit on the visibility. Like it could be that the lead time is shorter, but it could also be that your client is just a bit more hesitant because he doesn't know, right? So how -- what kind of discussions do you have to have that visibility beyond, let's call it, the near-term order book?

Yes.

What we do see is in the latest discussions over the last semester, if an order is placed, that they do also expect a very fast delivery on that. So that is not only, I would say, you don't know larger order book, which mean more visibility.

But it is a fact that in general, the trend is changing. Orders are placed much later, more book and turn. There is a change in behavior. You could say they wait longer and then will they cancel it, yes or no. But it's also because of projects. So where in the past, actually partners typically, you could deliver your products when they were ready and they store them until they had the supply of all the other suppliers to start a project. They don't do that anymore. They don't put anything in their warehouse anymore.

So you have to basically keep your goods until they say it's ready to go and they start the project. So you see all these trends changing, and I agree with you that, of course, limits the visibility. And also for us, of course, we need to make sure that our production that we can deliver on time. Will that slow down? No, I don't think in general, when they need it, they need it. Of course, slowdowns you'll have because of macroeconomic effects. Has that anything to do with shorter lead times or longer? I don't think so. Then just it's -- yes, it's the macroeconomic effect that starts playing in. But it is a fact, and it's something that we need to learn to live with that, that is more and more becoming a reality. And yes...

An important one, of course, first half, second half, along the fact that we typically have a higher sales in the second semester than the first semester is indeed, if currency stays at this level, reported sales will have an impact in the first semester. So that is where -- that's also one of the, I would say, reasons why we guide for a more skewed sales growth in the second semester.

But again, our fourth quarter is always the best. So this is not any different this year.

Okay. Thank you for these questions. Maybe trying once more with Kris Kippers. Kris, I can see you're still muted maybe now. I see you are unmuted, but we still don't hear you. So maybe we will -- you can type it in chat.

Meanwhile, if any other investors in the room have additional questions or analysts, please go ahead. I see a question from Trion. I will allow you just a moment.

I just had a question about the shareholder returns. I mean you increased the dividend, which is obviously welcome. You did the share buyback that's just finished, but no mention of a new share buyback. It'd just be interesting to get your view on why not? Or could we see more cash returns upcoming?

So at this moment, I think we need to be returned EUR 120 million to our shareholders over the period of last year until end of January. At this moment, we still have active discussions, and we need to basically also see where we are spending our capital moving forward. So we have some CapEx expenditures in our factories, for instance, here in Kortrijk and in Italy where we're upgrading. That's one.

So we need to, of course, keep cash for that. And we still have active discussions right now also regarding M&A. So at this moment, this is the immediate priority that we basically hold off and basically see what comes out of that. And in due course, of course, if things do not pan out, we can always consider another share buyback at the right time. But at this moment, those are our priorities.

Very clear. And just one -- sorry, one last one. On the Entertainment business, as you mentioned, very strong in '25, especially in the second half and especially with regards to the margin. Just wanted to be sure that there was no sort of one-off or something special there that this margin is kind of sustainable into '26 and beyond?

No, no, no. For cinema, it was very linear and spread out over the year. The only thing that we had in IX was the Encore 3 that launched in Q3, but that is now a steady income stream also moving forward. So there was nothing so special.

Structures really besides Cinema Immersive Experience with the launch of the new products, we really did very well, which comes also with higher margin improvements but also worked on their OpEx and could lower the investments done or which were more upbeat in the previous year on R&D and could get that to a more normalized level after the launch of those products. So that is a structure -- so is that okay for you Trion? So making the bridge [indiscernible] so on the OpEx savings, how structural is this the measures which we did on OpEx are indeed structural. That doesn't mean that we can continue on that path with respect to the further reductions. But it's not that it was a onetime, I would say, OpEx lowering that all of a sudden came back.

Yes. And the second question is about our Microsoft collaboration and certification for ClickShare, if there is any impact on the business in '26 already and since we started and launched in December.

So yes, again, this was a very good launch. We see a lot of positive comments. We had a very important trade show ISE in Barcelona last week with a lot of momentum building around our ClickShare Hub. We have already a couple of hundred installed in the field right now and basically all these devices are connected. We are getting live feedback on those, and they're doing very well. Also regarding our Microsoft relationship, we have to say we really appreciate the collaboration that we have and have during this development with Microsoft. They helped us a lot. We kind of aligned our stars with Microsoft, and they're helping us actually also in their ecosystem, thanks to their ecosystem, we can broaden actually our go-to-market. So in general, we see a very positive momentum around that.

Okay. And then we have a follow-up question from Alexander Craeymeersch.

Just following up on Trion's question here. So you mentioned that Entertainment margins should be sustainable at that 18% margin. Enterprise is probably also sustainable at that margin. Healthcare margins should recover. So the question that I actually still have is why only guide for 15% EBITDA margins by 2028? I understand that you conservative and that you want to be cautious. But at the same time, it doesn't make much sense unless there's something structural in the margins downwards.

No, there is nothing more structural than we said before. And I do look, let's look at it quarter-by-quarter. It's with a special focus on Healthcare, that recovery in the U.S. that we need to see. And of course, also the structural improvements with the new products that we have in Healthcare, it will just take a little bit longer to basically get those in the field and in the market. But we'll monitor this quarter-by-quarter. And if we see positive progress, then we are going to be the first one to hear about that.

I see no other hands raised. So last chance to raise your question. Otherwise, we will be closing the call. So thank you for all these questions. Thank you for your attention today. The recording of this earnings call will become available on the website later today. And I would also like to draw your attention to our annual report, which is also published today as one of the first companies on the Belgium market. And please go have a look on our investor portal to find stories and insights on all the divisions and business lines of Barco. So for now, we will leave it here. Thank you for your attention, and goodbye.

Thank you. Have a good day.

Thank you.