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Barco annual report 2017
4. Income from continued operations (EBIT) IN THOUSANDS OF EURO
2017
2016
2015
Sales
1,084,706
1,102,342
1,028,856
Cost of goods sold
-680,554
-723,538
-691,091
404,152
378,804
337,765
37.3%
34.4%
32.8%
-327,201
-345,573
-339,028
Gross profit Gross profit as % of sales Indirect costs Other operating income (expenses) - net
-3,710
3,325
2,960
Adjusted EBIT
73,241
36,557
1,698
6.8%
3.3%
0.2%
-32,404
-12,939
-29,099
Gain on sale building
-
6,866
-
Other non-operating income/(expense)
-
33
35
40,836
30,516
-27,366
3.8%
2.8%
-2.7%
Adjusted EBIT as % of sales Restructuring and impairments
EBIT EBIT as % of sales
After an increase in topline of 7% from 2015 to 2016, sales remained at the same level in 2017 (-1.6%, flat excluding the impact of the divested Lighting business). A strong gross profit margin improvement has been realized, from 32.8% in 2015 to 34.4% in 2016 and then up 2.9 percentage points to 37.3% in 2017. A positive mix effect and value engineering efforts yielding into results across the 3 divisions are contributors to this improvement. The higher gross profits while keeping indirect costs under control result in an adjusted EBIT of 6.8% in 2017, up 3.5 percentage points vs 2016. The decrease in indirect costs over the period is fully explained by amortizations on capitalized development costs still included in 2016 (see below). EBIT in 2017 includes following adjusting items: restructuring costs (5.2 million euro) and non-cash impairment charges (27.2 million euro) totaling 32.4 million euro (2016: adjusting items: 6 million euro (net after gain on sale of headquarter building); 2015: 29.1 million euro).
For more details on adjusting items we refer to note 6. Restructuring and impairment. The restructuring costs in 2017 mainly relate to the announced relocation of the production of the Norway plant to Belgium and the decision to stop loss-making activities mainly in the Entertainment division for an amount of 5.2 million euro (in 2016: 5.8 million euro, mainly related to Entertainment, in 2015: 8.3 million euro, mainly related to Enterprise). We refer to note 6 for more details on restructuring charges recorded.