Barco’s role in military technology
Barco NV, a Belgian technology company, plays a significant role in the defence industry. It provides high-quality visualisation solutions for military applications.
Key military contracts
Barco collaborates with various defence companies and organisations, including:
- Raytheon – Supplier for US Navy programmes.
- Airbus – Support for A380 test flights.
- Boeing – Supplier for unmanned combat aircraft.
- US Naval Air Systems Command – Display technology and simulation solutions.
Applications of Barco’s technology
Barco’s military applications include:
- Guidance systems for Tomahawk cruise missiles.
- Modernisation of F-16 fighter jets.
- Rugged displays for operational decision-making on land, sea, and air.
- Control rooms for defence and security.
- Display solutions for simulation and virtual reality in military training.
- Vetronics display systems for armoured vehicles.
Controversy over end-use
Concerns have been raised about the end-use of Barco’s products. Barco screens have been found in Russian military vehicles potentially active in Ukraine. The Flemish Peace Institute warns about the possible deployment of Flemish technology in foreign military operations.
Financial overview
2024 results
- Revenue: €946.6 million (-10% vs. 2023).
- EBITDA margin: 12.8% (lower than 13.6% in 2023).
- Net profit: €63 million (€80.2 million in 2023).
- Free cash flow: Strong increase to €110.3 million due to working capital improvements.
2025 outlook
Barco expects revenue growth and a higher EBITDA margin in 2025. The main growth markets are in North and South America, while Europe and Asia remain under pressure.
Dividend and share buyback
- Dividend: Proposed increase to €0.51 per share (4.08% yield).
- Share buyback: Up to €60 million planned over the next 12 months.
Market position and competition
- Market capitalisation: €1.16 billion.
- P/E ratio: 17.62 (TTM).
- Main competitors: Christie Digital and Extron.
Technical analysis
Stock performance
- Current stock price: €12.28 (25 March 2025) (-1.68% daily drop).
- Below 52-week high of €15.46.
- Above the 50-day moving average (€11.60) – technically a positive signal.
- Analysts’ average price target: €12.88 (+3.12% potential).
Strengths and weaknesses
Strengths
- Innovative product portfolio with strong software integration.
- Strong free cash flow and order book (€563.7 million).
- Dividend increase and share buyback programme enhance shareholder value.
Weaknesses
- Sensitivity to macroeconomic and geopolitical uncertainties.
- Declining margins due to product mix and regional pressure in Europe and Asia.
Conclusion
Despite a challenging 2024, Barco demonstrates resilience. The foundation for growth in 2025 is strong, with new products and strategic initiatives such as the share buyback programme. For investors, Barco offers opportunities through improved cash flows and an attractive dividend yield. However, geopolitical risks remain a key consideration.
What do you think? Is Barco an interesting investment opportunity, or do the risks outweigh the benefits?