Annual report 2004 You’ll see
Life's more than what you see.
Revealing the unseen, showing the unsaid, anticipating the unexpected and understanding the unknown takes courage and dedication.
Whether you're a scientist, a pilot, a teacher, an advertiser, an operator, a radiologist or an entertainer, professionals share a passion for insight.
Company profile 4 Mission statement 6 02- 03 Company values 8 Worldwide presence 10 Employees 10 Organizational structure 11 Company milestones 12 Letter to the shareholder 14 Financial highlights of the year 16 Financial highlights per quarter 18 Key figures for shareholders 20 Sales per division 22 Geographical breakdown of sales 23
Market overview
Report of the board of directors
Corporate governance 56 Strategy for growth 66 Technology growth and engineering excellence 70 ICT 72 Corporate marketing 74 Human resources 76 Corporate sustainability 78 Sales and services 80 Table of contents Comments on the results 82 Information for the shareholder
Information about the share 102 Ownership of the company’s shares 103 Evolution of the share price 103 Daily average shares traded 104 Comments on the evolution of the share price 105 Dividend 106 Analysts covering Barco 107 Financial calendar 108 Investor relations 109
Barco consolidated
Income statement 112 Balance sheet 113 Cash-flow statement 114 Changes in shareholders' equity 115 Notes to the consolidated financial statements 116 Auditor’s report 155
Barco n.v.
Balance sheet after appropriation 158 Income statement 160 Appropriation account 161 Company profile
Barco is a world leader in professional markets, in which it offers display and visualization solutions. Based upon in-depth market know- ledge, the company designs and develops solutions for large-screen visualization, display solutions for life-critical applications, and systems for visual inspection.
Currently Barco is active in the markets of medical imaging, defense & security, traffic management, avionics, media, events, digital cinema, presentation, simulation & virtual reality, edutainment, traffic & surveil- lance, utilities & process control, broadcasting and textiles.
Barco is headquartered in Belgium, and has its own facilities for Sales & Marketing, Customer Support, R&D and Manufacturing in Europe, America and Asia-Pacific. Worldwide, Barco employs about 4,400 people and realized sales of more than euro 670 million in 2004. 04- 05
There’s more to consider You’ll see There’s more to read You’ll see 06- 07
Mission statement
As imaging is revolutionizing the world, accurate processing and display of visual information is business-critical for many professionals worldwide. The inherent complexity therefore requires user-friendly solutions.
In line with this vision, Barco's mission is to excel in creating stake- holder value, by offering user-friendly imaging solutions to selected professional markets worldwide.
Barco designs and manufactures innovative hard- and software visua- lization solutions, integrating all aspects of the imaging chain, from image acquisition and processing to image display and management.
Global presence, technological leadership and wide experience in B2B markets guarantee customers pioneering visualization that will opti- mize their productivity and business efficiency. Integrating the latest technologies, these “visual value” solutions answer specific customer needs in diverse markets.
Barco enters a partnership with professionals requiring visualization for intensive use, looking for pixel-perfect visual information, searching for the lowest total cost of ownership, … professionals who know more. Company values
It is Barco’s firm belief that profitability and respect for society go Customer focus hand in hand. As a corporate citizen, Barco has laid down five Barco wants to be a close business partner that speaks the customer’s universal values that are the cornerstone of its relationship with language, that is alert and responsive, that understands and anticipates society. These values offer employees an ethical framework, a guid- his needs. ing principle for their daily operations and business relations. Customer focus, integrity, creativity, passion for achievement and Integrity team spirit are key to realizing the company’s mission in harmonious Relationships with customers, suppliers, colleagues and society in operation with society and mankind. general are marked by integrity. Barco wants to be a long-term partner earning respect, credibility and trust through quality, service, openness and responsiveness.
Creativity Barco is continuously looking for fresh horizons, new technologies and creative ideas. Originality is an invitation for people to participate in an ambitious project, to express Barco’s authenticity through their own personalities.
Passion for achievement Employees share the same work spirit and passion to meet goals and deadlines. They are driven by the kicks of exploring new technologies, the pleasure of designing award-winning solutions and the satisfaction of creating added value.
Team spirit Barco staff are driven by a healthy team spirit. They share the same vision and join hands to achieve their goals. 08- 09
There’s more to enjoy You’ll see Worldwide presence
Sites R&D and manufacturing facilities
Europe & Middle East Asia - Pacific Americas
Belgium Australia Brazil Belgium Czech Republic China Canada China Denmark India United States Czech Republic France Japan France Germany Korea Germany Israel Malaysia India Italy Singapore Japan Poland Taiwan Switzerland Russian Federation Thailand United Kingdom Spain United States Switzerland The Netherlands United Arab Emirates United Kingdom
Employees MKT SAL MAN 200 472 1,661 • MKT: Marketing & Sales • R&D: Research & Development ADM • MAN: Manufacturing 390 • CS: Customer Service CS • ADM: Administration 495 • LOG: Logistics LOG R&D 315 856 Total number: 4,389 10- 11 Organizational structure
BarcoView Barco Media Barco Presentation Barco Control Rooms BarcoVision & Entertainment & Simulation
32.3% 23.6% 15.4% 16.0% 8.9%
Medical Imaging Media Presentation Traffic & Surveillance Textiles Defense & Security Events Simulation & Utilities & Plastics Traffic Management Digital Cinema Virtual Reality Process Control Avionics Edutainment Broadcasting
Barco 3.8% Manufacturing Services Company milestones 2004
January March May • Barco acquires US-based Folsom Research • Barco installs six LED display walls and a • Barco wins multi-million dollar contract for Inc., thus strengthening its leadership in the control room solution at the new Formula 1 development and series production of events market and its position in the US. racetrack in Shanghai, China. The giant Onboard Information Terminals for the • The Queen Mary 2 is the first passenger screens will show streaming video and Airbus A380, the largest commercial airliner liner ever to feature a planetarium. Barco’s advertizing to give grandstand spectators a in the world. projector system presents stunning space truly memorable experience. visualizations across the hemispherical screen three times a day.
February April June • Barco awarded multi-million euro contract • For continuous business process automiza- • Second quarter confirms breakthrough of by Kongsberg Defense and Aerospace tion, Barco starts with the implementation Barco LED technology in Chinese market (Norway) for the delivery of rugged flat dis- of the 6-sigma methodology in its division with contract wins for Kunming Intermediary plays for tactical information display in NATO BarcoView. People’s Court, Guangzhou New Airport, air defense systems. • Barco receives 30 million dollar contract Suzhou Exhibition Center, the Worker’s • Newly opened Canadian subsidiary from Lockheed Martin to supply LCD screens, Stadium, Tianya Building, Chaoyang announces contract wins for digital LED graphics cards and recording solution for the Exhibition Booth and the Shanghai Power signage with Outdoor Broadcast Network upgrade of 20 Federal Aviation Administration Company. and Cadillac Fairview Corporation Limited. air traffic control centers. 12- 13
July September November •Madonna, Van Halen, the Eagles, • United States Coast Guard awards multi- •Barco completes installation of 2,400 Metallica, Red Hot Chili Peppers, Eros million dollar contract for the delivery of square feet of LED displays in Ramazotti, the Corrs and Paul McCartney are large display wall solutions for use in tactical AmericanAirlines Arena, home to four-time but a few of the top performers relying on command and control centers. NBA Atlantic Division champions Miami Barco techno-logy for their summer tours. •Barco acquires leading 3D medical imaging Heat. company. The acquisition of Voxar • Belgian economic delegation, headed by (Edinburgh, UK) is a breakthrough in advanced HRH Prince Filip, visits Barco’s virtual reality 3D radiology imaging, the fastest growing center at the Forbidden City, Beijing, China. segment of the medical imaging market. •Barco launches dedicated approach of Asian market and appoints regional president.
August October December •Lockheed Martin awards 10 million dollar •Barco signs worldwide contract with •Barco’s financial communication ranked follow-on contract for the delivery of flat Cinemeccanica (Italy) to develop and second by Belgian Association of Financial panel displays. The displays replace aging commercialize OEM digital cinema solution Analysts in yearly awards for best financial CRT technology in en-route centers across incorporating Barco’s 2K technology. information. the US. Letter to the shareholder
Dear shareholders, Extending Barco's value proposition
2004 was a challenging year but Barco performed solidly and was able To better serve professional customers in worldwide markets, Barco to meet its strategic and business objectives. In its worldwide markets continues to move from products to systems and solutions. In this challenges came from price pressure and further depreciations of the respect, two strategic acquisitions were made in the course of 2004. dollar. Despite these difficulties Barco recorded a sales growth of Sacramento-based Folsom expands the company's offering in the almost 7% and strengthened its worldwide position in many key mar- events market and further improves market position in the US, besides kets. This is a good indication of the strength of the product portfolio becoming very successful in Europe and Asia. The acquisition of Voxar of the Barco group. Sales over the year amount to euro 672 million, (Scotland) on the other hand, extends Barco's hardware-based with a total EBITA of euro 71.8 million, a 5% growth in comparison offering in the medical imaging market with 3D software solutions, the with 2003. Excluding currency fluctuations, sales would have risen by fastest growing segment in radiological imaging. 12% and EBITA by 11%. With these results we can confidently look to the future and propose to pay shareholders a gross dividend of 2.10 Innovation and technology also remain critical for the success of Barco. euro per share, a 5% increase in comparison with the year before. We will therefore maintain a high level of R&D investments to make sure Barco's value added solutions keep on meeting customer require- A few years ago Barco decided on a sharp strategic focus for its busi- ments and outperform competition. ness portfolio and set out to strengthen its market presence in key geographic markets such as North America and Asia. In 2004 Barco’s Improving business position in Asia and North America board, together with the CEO, took actions to further implement this strategy and focused on three strategic initiatives. North America and Asia are key geographical markets for Barco. Not only do these regions have strongly growing economies, but also, and more importantly, they still hold a lot of untapped market potential for Barco. In 2004 Barco's offensive strategy, with considerable invest- ments in sales and marketing in these regions, was rewarded with a 32% increase in sales in Asia-Pacific and a 14% sales growth in the US in local currencies. Sales in China went up almost 70%. 14- 15
Further testifying to the ongoing globalization of Barco, is the success- Enhancing business efficiency ful transfer of part of its manufacturing to a newly set up facility near Beijing (the Barco Leyard joint venture) and its premises in Noida, Maintaining Barco's competitiveness is crucial towards future success. India. These two facilities already account for a substantial part of In this respect, the reorganization of the Barco Manufacturing Services Barco's worldwide production of LED and control room solutions and division, started at the end of 2003, was successfully completed. All show the way to safeguarding the company’s margins. electronic manufacturing and surface mounting activities have been consolidated into two locations, Kladno in the Czech Republic for large volume production and Poperinge, Belgium for smaller volumes.
In 2005, the attention of board and management will be on sustain- ing and strengthening margins and on reducing the level of working capital. The relocation and reorganization of manufacturing will certainly contribute to greater efficiency and lower inventory levels.
Just like in the past Barco will keep on developing market-driven inno- vations and exploring new technologies that help our professional customers become more successful in their business. Barco is determined to maintain its profitable growth and has a unique asset to realize this ambition: management and employees who understand like no one else the importance of a personal relationship and customer attention in the high-tech environment Barco is active in.
On behalf of the board of directors, I would like to thank all staff for their commitment and dedication. They all make me feel confident about the future. Furthermore, I would like to stress that the board highly values the constructive relationship with shareholders and that we will continue to create value for shareholders.
Herman Daems Chairman of the board of directors Financial highlights of the year
Key figures
[ in thousands of euro* ] 2004 2003
Net sales* 671,923 628,944 Gross profit* 290,134 277,862
EBITA* 71,780 69,091
Current result before taxes and before goodwill amortization* 72,546 70,631 Current result after taxes and before goodwill amortization* 57,505 54,581 Current result after taxes per share and before goodwill amortization 4.69 4.42
Net income* 47,692 46,564 Earnings per share 3.89 3.77 Diluted earnings per share 3.65 3.54
Current cash-flow* 116,077 109,813 Current cash-flow per share 9.47 8.88 16- 17
2004 2003
[ in thousands of euro ] [ in thousands of euro ]
671,923 653,192 628,944 662,638 700,000 700,000
600,000 600,000
500,000 500,000
400,000 400,000
300,000 300,000
200,000 200,000 71,780 69,091 100,000 100,000
0 0 Sales EBITA Orders Sales EBITA Orders Financial highlights per quarter
Key figures per quarter 2004
[ in thousands of euro* ] 4th quarter 3rd quarter 2nd quarter 1st quarter 2004 2004 2004 2004
Net sales* 193,048 158,118 171,520 149,237 Gross profit* 82,727 65,847 75,685 65,875
EBITA* 24,337 13,342 18,711 15,391
Current result before taxes and before goodwill amortization* 24,210 13,391 19,135 15,809 Current result after taxes and before goodwill amortization* 20,291 10,724 14,558 11,932 Current result after taxes per share and before goodwill amortization 1.66 0.88 1.19 0.97
Net income* 16,131 8,713 12,696 10,035 Earnings per share 1.32 0.71 1.03 0.81 Diluted earnings per share 1.24 0.67 0.97 0.76
Current cash-flow* 38,562 24,183 29,171 24,161 Current cash-flow per share 3.15 1.98 2.38 1.96
Number of employees
Total 4,389 4,384 4,217 4,121 18- 19
Key figures per quarter 2003
[ in thousands of euro *] 4th quarter 3rd quarter 2nd quarter 1st quarter 2003 2003 2003 2003
Net sales* 174,676 145,201 157,990 151,077 Gross profit* 78,646 61,607 70,903 66,705
EBITA* 26,164 10,076 17,443 15,408
Current result before taxes and before goodwill amortization* 26,543 10,370 17,928 15,788 Current result after taxes and before goodwill amortization* 22,495 7,546 13,044 11,497 Current result after taxes per share and before goodwill amortization 1.83 0.61 1.05 0.93
Net income* 18,728 6,684 11,373 9,779 Earnings per share 1.52 0.54 0.92 0.79 Diluted earnings per share 1.42 0.51 0.86 0.74
Current cash-flow* 35,314 21,955 28,049 24,496 Current cash-flow per share 2.87 1.78 2.26 1.97
Number of employees
Total 4,022 4,110 4,166 4,131 Key figures for shareholders
[ in euro ] 2004 2003
Number of shares on 31 Dec (in thousands) 12,464 12,414
Per share
Current result (1) after taxes 4.69 4.42 Current cash-flow (2) 9.47 9.03 Net result 3.89 3.77
Gross dividend 2.10 2.00 Net dividend (3) 1.575 1.50 Net dividend (4) 1.785 1.70 Gross dividend yield (%) (5) 3.09 2.88 Yearly return (%) (6) 143 Pay-out ratio (%) (7) 54 53 Price/earnings ratio (8) 14.51 15.74
Net equity 32.62 31.34
(1) earnings before provision for restructuring, non-operating income, goodwill amortization and tax impact related to afore-mentioned (2) current result after taxes + amortization, depreciation and changes in deferred taxes (3) without VVPR-strip (4) with VVPR-strip (5) gross dividend / closing rate on 31 Dec (6) increase / decrease share price + gross dividend, divided by closing share price (7) gross dividend / net result (8) share price 31 Dec / current result after taxes per share 20- 21
[ in euro ] 2004 2003
Share price
Average price 69.98 55.54 Highest price 75.05 70.1 Lowest price 65.15 42.75 Price on 31 Dec 68.05 69.5
Average number of shares traded daily 30,166 22,893
Stock market capitalization on 31 Dec (in millions) 848.15 862.77 Sales per division
2004 2003
Barco Media & Barco Media & Entertainment Entertainment 23.6% BarcoView 19% BarcoView 32.3% 34% Barco Presentation & Barco Presentation & Simulation Simulation 15.4% 16%
BarcoVision BarcoVision Barco Control Rooms Barco Control Rooms Barco Manufacturing 8.9% 12% 16% 13% dotrix Barco Manufacturing Services Services 3.8% 1% 5% 22- 23
Geographical breakdown of sales
2004 2003
AMERICAS AMERICAS EMEA EMEA 31.4% 51.8% 31.9% 49.9%
ASIA - PACIFIC ASIA - PACIFIC 18.7% 16.3%
EMEA = Europe, Middle East and Africa There’s more to observe You’ll see Market overview Medical Imaging
“In terms of image quality, ease-of-use, speed and working with our PACS environment, Barco’s 3D software wins hands down.”
Mark A. Nigogosyan, M.D., Gundersen Lutheran Medical Center; WI, US
In today's filmless radiology department, diagnostic workstations and projection systems are used to read and review images. Medical pro- fessionals rely on digital technology to zoom in on images and patient information for efficient diagnostic reading.
Barco is a worldwide leader in 3D software and softcopy display tech- nology for digital imaging modalities and PACS (Picture Archiving and Communication System). The company provides 3D software solutions, FDA-approved LCD displays, radiology display and projection systems, and high-speed imaging boards. To ensure that the information on screen is 100% dependable, Barco has designed dedicated solutions for fast and efficient 3D image rendering, automatic calibration, image uniformity and defect pixel compensation. 26- 27
Imelda hospital Bonheiden, Belgium UZ Edegem, Belgium
Customers include leading medical integrators worldwide like Philips, GE, Fuji, Agfa and Kodak.
Imelda hospital Bonheiden, Belgium E2-C Hawkeye (© US Navy) USS San Jacinto (© US Navy)
Barco is a trusted visualization partner of major defense integrators like Lockheed Martin, EADS, Raytheon, Thales, Boeing, Northrop Grumman, BAE Systems, Kongsberg, Atlas Elektronik, Krauss-Maffei Wegmann, Embraer, General Dynamics and Alenia Marconi Systems.
CASA F.I.T.S. (courtesy EADS) 28- 29
Defense & Security
“Our relationship with Barco goes beyond outstanding day to day performance to aligning company strategies that ensure our customers get the products they need.”
Lockheed Martin
Information superiority and speed of command are critical in opera- tional decision-making. Intelligent sensors, fast and powerful networks and real-time display technology allow the military to create a better overall picture and improve tactical Command and Control. By com- bining and sharing information on-screen, commanders have a deeper understanding and a clearer view of battlefield movements.
Barco designs, manufactures and markets display solutions for operational decision-making in airborne, shipboard and ground-based applications. Its range of sensor processing hardware and software, rugged computers, Human Machine Interface software, graphics genera- tors, flat panel displays and integrated consoles has been especially designed and tested for use in extreme environmental conditions. Traffic Management
“Safety remains at the core of all activities in an Air Navigation Services Center. The products that support this prime strategy must therefore be of high quality, reliable and supported by proper services. The Barco ISIS display was selected by the Maastricht UAC because it met these essential concerns.”
Peter Naets, Head Engineering Division, Maastricht UAC, Eurocontrol
The ever increasing number of traffic movements often makes it hard for traffic controllers to detect conflicts, anticipate movements and calculate positions, while at the same time ensuring rapid and efficient handling. To keep a close eye on traffic, they rely on content-rich flat screens and supporting HMI software, displaying information in real- time.
Barco is a recognized leader in the design, development and manufac- turing of real-time graphics display systems and software components for air traffic management, vessel traffic control and coastal surveillance. When the company marketed the first 2Kx2K LCD, this high-contrast, high-resolution display revolutionized air traffic control, with more than 1500 units delivered to the US Federal Aviation Administration alone. Barco's range of components and services goes from sensor interfacing and information visualization to recording, archiving, playback and system management. 30- 31
DFS Bremen, Germany FAA Jacksonville, Florida, US
Barco solutions, integrated by leading system inte- grators in control towers and area control centers, are the reference for more than 50 Air Navigation Service Providers worldwide, including the US Federal Aviation Administration and Eurocontrol.
DFS Bremen, Germany Avionics
“Barco is a dynamic part of the success of Boeing's supplier program. They work as a team, raising issues early and their good planning will keep us successful.”
Charles DiPietro, Boeing
Real-time imaging is becoming more and more important in aerospace applications. Pilots in the cockpit need to have a real-time overview of the outside world, enhanced with computer-generated data, to have the clearest vision possible. Life-critical information is displayed on flat screens, making sure that the pilot keeps a perfect overview from take-off to landing.
Barco offers an extensive range of color cockpit displays, based upon a modular, open system architecture. Developed for crucial flight appli- cations, its product range includes video display units, smart display units, multi-purpose control display units, electronic flight instrument systems and electronic flight bags. Barco is one of a limited number of companies to have received Gold supplier certification from Boeing for its high-quality products and processes and is also a trusted partner of Airbus. 32- 33
Boeing V-22 Osprey Pilatus PC-21 (courtesy Pilatus Aircraft) Cougar EC725 (courtesy Eurocopter)
Recent airborne references include the Airbus A-380, the Boeing V-22 tiltrotor aircraft, the RC-135 Rivet Joint reconnaissance aircraft, the Tiger helicopter, the Merlin MK3 helicopters, the SARAS passenger aircraft, the PC-21 turboprop trainer and the Antonov-124 freighter.
Airbus A-380 (© Airbus - Image Graphique I3M) Shanghai F1 track, China SI Luxury World, Azerbaijan AmericanAirlines Arena, Miami, US
Leading brands like Merrill Lynch, Fuji TV, Quiksilver, BMW and Deutsche Telekom have already discovered the glamour and impact of Barco's LED displays. Barco's solutions have also been selected for high profile sports venues like the Hala Sazka Arena (Czech Republic); the Shanghai F1 track (China); the AmericanAirlines Arena, home to the Miami Heat NBA team (US) and the Karaiskaki and Kaftanzoglio stadiums, which hosted the 2004 Olympic games (Greece).
Crown Fountain, Chicago, US (Shen Milsom & Wilke) 34- 35
Media
“Visitors to Millennium Park will be absolutely stunned by the originality, beauty and feeling behind this one-of-a-kind fountain that blends water, imagery and state-of-the-art technology.”
Roark Frankel, Project Manager for the Crown Fountain
In the world of branding, visibility matters. Digital, interactive and tar- geted communications bring your message into focus and strengthen its impact. Programmable and networked messages allow reaching customers at places and times when they have an eye for you.
Barco's networked LED and LCD solutions are used by the world's lead- ing brands to maximize their visibility. From large-screen displays in sports arenas and giant branding media in corporate headquarters, to digital advertizing and targeted communications in shopping centers and on high-impact locations, Barco solutions bring your content to life and do justice to your brand's reputation. Events
“We have used Barco LED tiles and projectors for concerts of Kylie Minogue and Britney Spears, and we will be using Barco again for U2's world tour. Creatives are thrilled when there are no technical limits to their imagination.“
Detroit car show, US Versace fashion show, Italy Rene De Keyzer, Managing Director XL Video Paris car show, France
Barco's solutions are used for high profile and large-scale events, including car shows, corporate Fans sitting on each other's back, fashion lovers reaching out to the cat- exhibitions, concerts and fashion shows. High walk, car addicts standing shoulder to shoulder, they are all anxious to profile brands like Versace, Armani, Ralph Lauren, catch a glimpse of what's on stage. Artists, designers and corporations Corvette, Audi, BMW, Subaru, Mercedes, Nokia and turning to digital signage are sure to add a creative touch to the Playstation, leading artists like Bon Jovi, Van Halen, crowds’ excitement. The Corrs, Britney Spears, Robbie Williams, Kylie Minogue, Paul McCartney and U2 rely on Barco equipment to render their message with unprece- Barco offers premier, large-format visualization equipment to rental dented impact. and staging companies all over the world. The Barco product range includes the award-winning MiPIX modular LED blocks. It further fea- tures LED displays, projectors and image processing systems that form a complete rental range of display solutions for indoor and outdoor events.
Britney Spears world tour, Seattle, US
Digital Cinema
“Thanks to our innovative digital platform, Kinepolis visitors are sure of a completely new digital cinema experience. Our visitors not only enjoy stunning visual comfort but can now choose from a much wider programming, including feature films, prestigious events, television series, live concerts and sports games.”
Gilbert Deley, General Manager Kinepolis Group
Crowds going loud, spectators saying "hmm" or "ooh" when a scene plays, eyes filling with tears or mouths bursting with laughter, movies are all about emotions. For people to get caught up in the emotions of the movie, image quality and detail are of prime importance.
Barco's digital cinema solutions open up a new world of theatrical, advertizing and business opportunities. From digital mastering to premier quality feature film screenings, from business and sports presentations in the auditorium to advertizing and information displays, Barco has the solution. 38- 39
Dong Feng Cinema City, Changsha, China Hongxing Cinema, Nanning, China
Barco, a market leader with over 200 digital installations worldwide, enjoys strong relation- ships with industry leaders like DreamWorks SKG (digital movie premiere of Shrek 2) and Eastman Kodak. Digital cinema projectors have been installed worldwide for Eng Wah in Singapore, Kinepolis in Belgium, Sathyam in India, the China Film Group, Nordisk Film in Denmark, Soho Images in London, T-Joy in Japan, TekoFilms in Russia and Dolby Screening Room in the US.
Kinepolis, Belgium Presentation
“Our philosophy to invest in top quality products from an industry leader in computer graphics projection has always proven to be a sound decision.”
Infosys boardroom, UK Michael Kubit, Manager of MediaVision and Classroom Technology, ACTIS, UK Ingleside Baptist Church, Georgia, US Case Western Reserve University
Corporations like Microsoft and Vodafone use Barco projectors for conferencing, while Oxford New technologies enabling virtual collaboration and remote exchanging University and Case Western are but a few refe- rences trusting on Barco technology for educational of ideas, offer a new realm of educational opportunities. Information purposes. technology does not only bring a fresh and appealing approach by showing students and conference participants video, photography and animations on screen but more importantly, opens the way for e-learning and just-in-time learning.
Barco projectors, networked or stand-alone, facilitate video conferencing and real-time data exchange between people at multiple sites and turn meeting rooms of corporations, universities and conference centers into virtual meeting rooms, with participants from all over the world conferencing as if they were in the same room. Barco recently launched the first 16:9 projector, winning the Pick Hit award at NAB 2004 for this innovative product introduced.
World Economic Forum, Davos, Switzerland
Simulation & Virtual Reality
“Saab and Barco have been able to work closely together, in an open and flexible way, to develop a solution that meets and exceeds customer requirements.”
Stefan Sandberg, Training Systems Manager for Saab Aerosystems
Simulating reality to come to a deeper understanding, creating a virtual world to gain a deeper insight, that is what Simulation and Virtual Reality are all about. Computer-generated worlds allow to practice real-life situations without any risk or danger involved or make it easier to assimilate volumes of complex data.
Barco is a trusted partner for simulation and virtual reality. Its projec- tion equipment is used to recreate reality through computer-generated images in training applications and research environments. Barco visual display solutions are typically used for flight, ship, ATC and driving simulators, digital prototyping and scientific research. Recently the company received the Edison Emerging Technology Award from the state of Ohio for its outstanding technology. 42- 43
Shell Rijswijk, the Netherlands (courtesy of Shell International Exploration and Production B.V.) SEER mini-dome display system Lockheed Martin FATS (courtesy Lockheed Martin)
Barco solutions are used by researchers at the 3D VR Lab of the University of Calgary; for oil exploration in the Oasis iCenter in Abu Dhabi, and Westerngeco Gatwick, UK; for car design at the PSA group in France; computer-aided surgery at CAESAR in Bonn; and the F-35 Joint Strike Fighter simulator.
PSA France (courtesy PSA France) Edutainment
“Many industry colleagues stated they had never seen such good geometry alignment in any other dome system. A really impressive result.”
Thomas W. Kraupe, Director of the Hamburg Planetarium
Historians presenting detailed views of how our ancestors lived, scientists looking further than ever before into our constellation, and technologists sketching what the future has in store, they all want to create a truly immersive, interactive and unforgettable experience to share their vision with their audience.
Barco's Edutainment offering helps leisure centers, museums and plane- tariums in creating a new interactive world for their visitors. Tailor-made projection solutions introduce a dazzling new world of opportunities and immerse visitors in a 3D world full of sensory experiences of past, present or future wonders of the world. 44- 45
Hamburg planetarium, Germany Technisches Museum Wien, Austria (courtesy TMW Wien) Forbidden City, Beijing, China
Barco systems give visitors the ultimate experience in leisure centers all over the world, including Papalote Museo del Niño (Mexico), the planetarium aboard Queen Mary 2, the Virtual Reality Theater in the Forbidden City (China), the Athens Eugenides planetarium (Greece), the Hamburg planetarium (Germany) and L'Astronef (France).
Queen Mary II (courtesy American Museum of National History, NYC) NCP Manchester Ltd. (NML), UK VCNON, the Netherlands
The Florida Department of Transportation (US), The City of Boca Raton (US), The Coast Guard and Department of Homeland Security (US), NCP Manchester Ltd. (UK), VCNON (The Netherlands), BRISA (Portugal) and Ministries of Defense and Joint Forces are but a few of the customers that have chosen Barco to optimize their traffic control, surveillance and command & control systems.
Welsh Assembly, UK 46- 47 Traffic & Surveillance
“We wanted our investment to be state-of-the-art and as open and flexible as possible. What's more, the Barco system allowed us to reduce our equipment costs.”
Robert J. DiChristopher, Municipal Services Director, City of Boca Raton
Traffic controllers and surveillance operators rely on enhanced display solutions to keep a real-time view of traffic flow and respond to potential emergency situations. Their video display walls, allowing real-time monitoring and on-screen interaction with data sources and sensors, highlight potential congestion points and help coordinate emergency responses.
Barco is regarded the leading expert in control rooms for traffic, surveillance and command & control. Its networked solutions display critical information to operators in command & control centers of police, fire brigades and other organizations. Maps with positions and alternative routes, as well as video feeds of events, are displayed on screen and communicated to the entire operations command staff. Barco’s solutions are also optimized for Homeland Security and Defense applications. They enable shared situational awareness in real-time from the field up to the (central) command in Joint Operations Centers. Utilities & Process Control
“Barco's large screen display wall, comprising thirty-two 50" projection modules, displays the entire high voltage network at a glance.”
Katarzyna Klingenfuss, Barco
Providing operators with all key information at a glance, is business- critical in utilities and process control. Real-time signals and informa- tion sources (data, schematics and video) are visually presented, and help operators identify problems and properly respond to events.
In electricity, water, oil and gas plants, Barco visualizes all dynamic data, from detailed network distribution information to topological overviews. In process control, Barco equipment collects and processes all data from the production site, resulting in total control of the manu- facturing process and improved quality at reduced cost. Barco's control room solutions even feature direct network connectivity, allowing to share and exchange contents between control centers. 48- 49
Neckarwerke Stuttgart, Germany Nuon, the Netherlands
Neckarwerke Stuttgart (Germany), Österreichische Bundesbahnen (Austria), Sichuan Power (China), Nuon (The Netherlands), Petronas (Malaysia), Aramco (Saudi Arabia) and Reliance (India) are some of Barco's references.
Elia, Belgium Broadcasting
“Barco's solution installed in the newsroom is a new, sophisticated one. The minute a lamp goes out, another lights up in and within two to three seconds, the internal software automatically calibrates the brightness level to match the rest of the wall.”
Mark Karlen, Broadcast Design International, US
The number of images that need to be simultaneously viewed and controlled in studios, master control centers, playout centers, uplink centers and downlink monitoring is increasing drastically. Barco helps operators in today's broadcasting and distribution business identify potential problems and initiate responsive actions.
Barco's rear-screen projection walls offer a total solution for managed monitoring of a wide range of incoming signals from various sources, and are also optimized as a backdrop solution for interactive use in content-rich productions. This backdrop solution won the Broadcast Engineering's Pick Hit award at NAB 2004, an award handed out for the most innovative and exciting products. 50- 51
Astra, Luxembourg TVN24, Poland Channel4, UK
Monitoring rooms for broadcasting and distribution relying on Barco technology include Turner Broadcasting (US), EMC Digital Head End (Taiwan), SES Astra (Luxembourg) and Danish Broadcast Corporation. Backdrop solutions have been installed for Dubai TV (UAE), VTM (Belgium) and the London Stock Exchange (UK).
Dubai TV, United Arab Emirates Textilgruppe Hof, Germany Concordia Textiles, Belgium
Barco's client portfolio includes leading manufac- turers on all continents, including J&J Industries (US), Beaulieu of America (US), Orion Rugs (US), Fruit of the Loom (US), Shaw Industries (US), Brintons Ltd. (UK), Anton Cramer (Germany), Textilgruppe Hof (Germany), the Fabricato Group (Colombia), Mc Three Carpets (BE), Ideal Floorcoverings (Belgium) and Concordia Textiles (Belgium).
Ideal Floorcoverings, Belgium 52- 53
Textiles
“Investments in textile production can only be justified if we guarantee top quality fabrics at the lowest possible cost. Automatic inspection is the way to achieve this target.”
Mr. Runge, Plant Manager of Anton Cramer, Germany
Industry leaders in textiles need real-time manufacturing information to remain successful in a highly competitive market. Automated track- ing, processing and visualization of manufacturing data across plants and locations, offers strategic insight and allows optimizing the production process.
Barco is one of the international leaders in sensor- and camera-based quality management from raw material to final product. The company offers a complete range of computerized production and quality mana- gement solutions for spinning, weaving, knitting, tufting, dyeing and finishing. These products and systems greatly improve the efficiency of the production process, as well as the quality of the final products. Dedicated versions of Barco's manufacturing solutions are also avail- able for the plastics industry. There’s more to manage You’ll see Report of the board of directors Corporate governance
On 9 December 2004 “The Belgian Code on Corporate Governance” Barco will present its charter to the annual general shareholders’ meet- was issued. Although the Corporate Governance chapter in the annual ing on 4 May 2005 and will publish it on the Barco website by 15 May report only needs to be fully compliant with the requirements set forth 2005. in the code from January 2006 onwards, Barco chose to bring the chap- The chapter on Corporate Governance in this annual report is therefore ter as much as possible in line with the code already in this year’s best read together with the “Corporate Governance Charter” of the annual report. company. In the final section of this chapter, all principles of “The “The Belgian Code on Corporate Governance” also requires Belgian Belgian Code on Corporate Governance” that are not complied with, stock listed companies to draft a “Corporate Governance Charter”. are listed with an explanation of the reasons for non-compliance.
Executive committee
Martin De Prycker Chief Executive Officer Antoon Van Petegem Chief Financial Officer Donald Defoort President Human Resources & Corporate Affairs Miel Schamp President Information Technologies JP Tanghe President Corporate Communication & Investor Relations Luc Kindt President Global Sales & Services Bernard Dursin President Europe, Middle East, Africa and Latin America Jacques Bertrand President Asia-Pacific Dave Scott President North America
Luc Vandenbroucke President BarcoView Stephan Paridaen President Barco Media & Entertainment Michel Vandeplas President Barco Presentation & Simulation Carl Peeters President Barco Control Rooms Bernard Cruycke President BarcoVision Patrick Luyssen President Barco Manufacturing Services & General Operations 56- 57
Date on which the term Main position of office expires: end of Board of directors outside the company the annual general meeting
Chairman Herman Daems (1) Chairman of the board of directors Gimv 2006 CEO Martin De Prycker (3) 2008 Vice-Chairman Baron Hugo Vandamme (1) Chairman of the board of directors Roularta Media Group and Kinepolis Group 2008 Directors Jozef Cornu (2) Advisor to the Chairman of Alcatel 2010 Marc Ooms (1) Managing Director Petercam n.v. 2010 Philippe Naert (2) Dean TIAS Business School, Tilburg University (NL) 2008 Eric Van Zele (2) Managing Director Omniform s.a. Chairman Pauwels International and Reynaers Aluminium 2010 Marc Vercruysse (1) Chief Financial Officer Gimv 2006 Robert J. Verhoeven (2) Managing Director BMT n.v. 2007 Jan P. Oosterveld (2) Member of various boards, Professor at IESE Business School Barcelona, Spain 2007
Secretary Antoon Van Petegem
(1) non-executive directors (2) non-executive independent directors (3) executive director Herman Daems is Chairman of the board of Barco and Gimv, a publicly listed Private Equity and Venture Capital firm. He is also a member of the board of CoWare Inc. (San Jose, CA, USA) and EVCA (European Venture Capital Association). Before, he held board positions with Belgacom and Glaverbel and was Professor in International Management and Strategy at Herman Daems the Department of Applied Economics of the Catholic University of Leuven (Belgium). He also taught Competition & Strategy at Harvard Business School and was at the faculty of the University of California, Los Angeles. Herman Daems holds degrees in Mathematical Physics and Economics and has a doctorate in Economics. He received grants and prizes from sev- eral international organizations.
Martin De Prycker held several positions with Alcatel between 1982 and 1996. He was President of the division for ADSL broadband products from 1996 until 2000. From 2000 until 2002 he was Chief Martin De Prycker Technology Officer and a member of the Executive Committee. In February 2002 he became President and CEO of Barco. He is also on the board of directors of FLV Fund and Agoria (Belgian multisector federa- tion for the technology industry). Martin De Prycker holds a PhD in Computer Science. 58- 59
Baron Hugo Vandamme was President and CEO of Barco from 1983 until 2002. Today he is Vice-Chairman of the board of directors and Honorary Hugo Vandamme President. He is Chairman of the boards of Roularta Media Group and Kinepolis Group, a member of the board of supervisors of Sara Lee/DE and a director on the board of the Port Authority of Zeebrugge. Baron Hugo Vandamme is also Chairman of the Association of Belgian Listed Companies and of the Belgo-Indian Chamber of Commerce & Industry.
After three years of research at the Brown Boveri research laboratories in Baden, Switzerland, Jozef Cornu started his career within Bell Telephone (ITT) in 1973. During his career he occupied general mana- gement positions with Mietec and Bell Telephone (ITT) and was COO of Jozef Cornu Alcatel Telecom from 1995 till 1999. Since 2000 he has been on the board of directors of Alcatel. Next to this he is a member of the Supervisory board of Alcatel SEL (Germany) and a member of the board of Alcatel CIT (France). Jozef Cornu is also Chairman of the Board of Directors of Alcatel Bell n.v. and Tijd n.v.; and he is a director of KBC and Agfa-Gevaert.
Marc Ooms joined Petercam as Managing Director in 1988, became Managing Partner of the Petercam Group in 1992 and Chairman of Petercam Nederland in 1999. He is in charge of corporate finance in Marc Ooms Belgium and the Netherlands. He is a member of the board of direc- tors of several companies, including Gimv. Philippe Naert is dean of TIAS Business School at Tilburg University (NL) and Technische Universiteit Eindhoven; and he is a director of Almanij, Concordia Textiles, Nuon Belgium and De Koninck. He was also dean of INSEAD (FR), director of the EIASM (Brussels) and academic director of Philippe Naert the Instituto Universitario Euroforum Escorial (ES). He graduated in Electrical Engineering from the Catholic University of Leuven. He further holds a postgraduate degree in Management Science (University of Manchester, UK) and a PhD (Cornell University, USA). He is Doctor honoris causa of the Helsinki School of economics.
Eric Van Zele is President and CEO of Pauwels International, President Eric Van Zele of Omniform s.a. and chairman of Reynaers Aluminium. Prior to his current positions, he served as President & CEO of Telindus and as Vice- President of Raychem Corporation.
Marc Vercruysse has been CFO and member of the Executive Committee of Gimv since 1998. Before becoming CFO, he was internal Marc Vercruysse auditor with Gimv, senior investment manager and head of Structured Finance. He is also on the board of directors of several unlisted com- panies. 60- 61
For almost twenty years Robert J. Verhoeven held several senior man- agement positions in the connector industry. Since 1991 he has been Robert. J. Verhoeven CEO of the BMT Group. This company is active in 12 countries with 17 manufacturing plants. He is also on the board of LVD company.
Jan P. Oosterveld joined Philips in 1972. He held various international management positions and became a member of the group manage- ment team in 1998. Until his retirement in 2004 he was in charge of Philips' corporate strategy, corporate alliances and was responsible for the joint ventures for LCD and CRT with LGE Korea. He was also CEO of Philips Asia Pacific. Jan P. Oosterveld holds degrees in Mechanical Engineering from the Technical University Eindhoven, the Netherlands Jan P. Oosterveld and Business Administration from the IESE Business School, Barcelona, Spain. He is a lecturer in Strategy, Entrepreneurship and International Management at leading business schools around the world and was appointed professor at IESE in 2002. Since May 2003 he is a member of the supervisory board of Continental AG, Hannover, Germany. In 2004 he was appointed as a member of the Supervisory Board of Atos Origin s.a. in Paris, France, Crucell n.v. in Leiden, the Netherlands and of Cookson Electronics Plc, London, UK. Appointment of directors Activity report on board and board committees meetings The board consists of 10 directors: Reference is made to the Corporate Governance Charter on One executive director www.barco.com for an overview of the responsibilities of the board of Martin De Prycker, Chief Executive Officer directors and its committees, and for a survey of topics discussed at Four non-executive directors board meetings. Herman Daems, Chairman, Baron Hugo Vandamme, Marc Ooms, Board of directors Marc Vercruysse Five independent, non-executive directors who hold senior positions in In 2004 the board of directors met 9 times. All members participated in leading international companies or organizations 5 of these meetings. At 2 of the 9 meetings 2 directors were excused Jozef Cornu, and at another 2 meetings 1 member was excused. Philippe Naert, Jan P. Oosterveld, Eric Van Zele, Audit committee Robert J. Verhoeven The audit committee consists of Robert J. Verhoeven (chairman), Marc The directors are appointed by the general meeting for a term of maxi- Vercruysse and Philippe Naert, who all are non-executive directors. In mum six years. Terms of office end at the closing of the annual meeting. 2004 the audit committee met 5 times. One member was not present Directors may be dismissed at any time by the general meeting. The at one meeting. age limit is set at 65 and directors can be re-appointed upon the end of their mandate. New directors are nominated by the remuneration & nomination committee; international business experience and/or expe- Remuneration & nomination committee rience in professional electronics are the main selection criteria. The remuneration & nomination committee consists of 3 non-executive directors: Herman Daems (chairman), Jozef Cornu and Marc Ooms. The committee met 3 times. At one occasion one member was not present. 62- 63
Strategic committee committee, in line with the rules described in the company’s “Corporate Governance Charter”, to become available on www.barco.com. The strategic committee met on 3 occasions in 2004. At 2 of these meetings 1 member was absent. The members of this committee are The total remuneration paid in 2004 to members of the executive com- Herman Daems (chairman), Martin de Prycker, Hugo Vandamme, Jozef mittee, including the CEO, amounted to euro 4,517,465. Included are the Cornu, Eric Van Zele and Jan P. Oosterveld. employer’s contributions to personal risk insurances and retirement benefits. Euro 3,319,709 of the total remuneration was fixed, while euro 1,197,756 was variable remuneration. The total number of stock options Remuneration for directors and members of the executive committee granted to the members of the executive committee was 25,500.
The general meeting grants a fixed remuneration to directors and an additional amount for being present at meetings of committee(s) a director is member of. These remunerations are charged to the general Compliance with “The Belgian Code on costs. The board of directors is authorized to grant remuneration to direc- Corporate Governance” tors entrusted with special functions or tasks. This remuneration is also charged as general costs. Barco complies to a large extent to all corporate governance rules, as can be found in “The Belgian Code on Corporate Governance”, which In 2004 the remuneration paid to directors totalled euro 1,358,830 con- can be consulted on www.corporategovernancecommittee.be. sisting of: euro 352,500 fixed remuneration Following is a survey of the principles and guidelines of the code that euro 252,000 variable remuneration Barco does not comply with, along with an explanation of the reasons euro 753,830 paid to HRV n.v. for strategic advice to the company, in for non-compliance. execution of the board’s 2002 decision, as reported in the annual report of 2002. Principle 2, Appendix A, Criteria of independence, 2.3/1 No stock options were granted to directors in 2004. The assessment of independence shoud be made taking into account several For the executive director and the members of the executive committee criteria, including "not having served on the board as a non-executive director for the remuneration is determined by the remuneration & nomination more than three terms". One member of the board of directors, who is also chairman of the audit Without prejudice to applicable legal provisions, proposals for appointment should committee, does not comply with these criteria of independence, as he be communicated at least 24 days before the general meeting, together with the has been a member of the board for more than three terms. Throughout other points on the agenda of the general meeting. This provision also applies to the period (more than 12 years) that the board member in question has proposals for appointment originating from shareholders. been serving as a director, he has always maintained and demonstrated an independent attitude. His departure would result in the loss of a As required by law (article 533, paragraph 4), proposals for appointment wealth of historical background knowledge of the company's complex are included in the concerning notice of the general meeting. business.
Principle 5, Appendix C, Audit Committee, 5.2/1 Principle 4.6, Nomination and appointment The board should set up an audit committee composed exclusively of non- Any proposal for the appointment of a director by the shareholders' meeting executive directors. At least a majority of its members should be independent. The should be accompanied by a recommendation from the board, based on the chairman of the board should not chair the audit committee. The board should advice of the nomination committee. satisfy itself that the committee has sufficient relevant expertise to fulfill its role effectively, notably in financial matters. The proposal should specify the proposed term of the mandate, which should not exceed four years. It should be accompanied by relevant information on the can- One of the members of the audit committee can not be considered as didate's professional qualifications together with a list of the positions the candi- independent for historical reasons. This member of the board represents date already holds. The board will indicate whether the candidate satisfies the Gimv, which owned more than 10% of the shares in the past, and which independence criteria. has no conflicting interests with Barco. The member’s competences and wide financial experience guarantee important expertise in his position as a member of the audit committee. Concerning the chairman of the Until now, directors were appointed by the general meeting for a term audit committee, reference is made to the explanation made under of maximum 6 years. The board of directors will propose at the annual principle 2, Appendix A, Criteria of independence, 2.3/1. shareholders’ meeting to limit terms of office to 4 years. Terms of office of current directors will remain unchanged. 64- 65
Principle, Appendix D, Nomination Committee, 5.3/1 Statutory auditor
The board should set up a nomination committee composed of a majority of inde- Ernst & Young Bedrijfsrevisoren S.C.C. pendent non-executive directors. Marcel Thirylaan 204 1200 Brussel The nomination committee is currently composed of three members, all of whom are non-executive directors. Only one is independent; the represented by Ludo Swolfs and Marc Van Hoecke other two are non-independent. One of these non-independent directors was appointed to represent a shareholder who was not independent at that time as this shareholder held more than 10% of the shares. But Remuneration paid to the statutory auditor for special assignments and today this shareholder holds less than 10% of the shares. Moreover, this to the person with whom the statutory auditor collaborates in his pro- shareholder, nor the director, have conflicting interests with Barco. fessional capacity amounted to 141,423 euro over the past financial year. Payments to the statutory auditor for special assignments were granted mainly for additional audit services relating to the application of Principle 8.9, Shareholders’ meetings International Financial Reporting Standards and with respect to the warrant plan. The persons with whom the statutory auditor collaborates The level of shareholding for the submission of proposals by a shareholder to the professionally were paid with funds designated for fiscal and social general shareholders' meeting should not exceed 5% of the share capital. consulting services.
According to the articles of the association (article 30) and the code on companies (article 532), shareholders owning more than 20% of the company’s shares can request that a general shareholders’ meeting be convened. A 5% limit is not appropriate given the size of the company. Profitable growth
Barco designs and develops solutions for large-screen visualization, and mechanical manufacturing in two locations. This consolidation was life-critical applications, and visual inspection in a diverse range of finalized end of 2004 and internal processes will be further optimized professional markets. In this high-tech environment, a forward-thinking in 2005. In addition, other products like LED tiles and control room company roadmap is essential to align the efforts of many divisions, solutions are manufactured in China and India respectively. business units and regional centers of excellence. Therefore Barco has laid down a long-term growth plan along three axes, as well as a Also in 2004, the Barco Silex center of competence for micro-electronic short-term operational improvement plan. design, was integrated into the medical imaging organization, and adds extra resources to Barco's dedicated engineering department for Operational excellence modality imaging solutions.
In 2004 Barco further streamlined its internal processes with an oper- In 2005 Barco will continue to improve operational efficiency in all ational improvement plan. Increased customer focus, higher quality functional domains (operations, R&D, sales and marketing, finance and levels through the 6-sigma project, a global marketing image and an administration) to yield improved profitability. improved customer service organization have been continued as planned and yielded the expected results. Long-term growth
In order to stay ahead of competition, larger volume products are more Barco strives to grow along three axes: trust upon its wide technology and more manufactured in countries with lower labor cost and coun- expertise and dedicated solutions to expand its offering into new ver- tries with dollar-related currencies, strengthening Barco's natural tical markets, build upon its global presence to expand sales in North hedging position. The consolidation of all subcontracting services in America and Asia-Pacific, and go from (sub)systems to solutions and Poperinge (Belgium) and Kladno (Czech Republic) bundles electronic present customers with a wider range of services. 66- 67
Martin De Prycker Chief Executive Officer Vertical market expansion Regional growth in North America and Asia-Pacific
Intense R&D efforts and strong market knowledge have enabled Barco As an international company, Barco targets markets on a worldwide to become a leader in many professional markets worldwide. It is the scale. Consequently, the company wants to increase its presence and company's strategy to further consolidate its position in stable markets sales in North America and the Asia-Pacific area. In 2004, Barco by increasing market share and streamlining operations, and to build aligned its internal organization with this regional focus, by appointing upon its momentum in fast-growing markets both through internal regional presidents for North America and Asia-Pacific. growth and acquisitions. Markets like medical imaging, media, events and traffic & surveillance have a lot of untapped market potential and The acquisition of Folsom Research Inc. further strengthened the consequently Barco continues to invest heavily in these markets. company's position in North America, where Folsom had a 30% mar- ket share for display control products in the events market. Next to Acquisitions of Voxar (UK), Folsom Research Inc. (USA) and System this, sales offices were opened in Canada; the existing facilities in Technologies (BE), further expand Barco's product portfolio and exper- Duluth near Atlanta (GA), were expanded; and sales and marketing tise in key markets like medical imaging and events. Barco's unique efforts were increased. In the US security market, Barco was awarded technology expertise and cross-divisional collaboration have also numerous contracts, with the US Coast Guard project as a major break- opened new opportunities for LED technology in the market of archi- through. tecture and urban design, whereas rear-projection technology was successfully optimized to be used as a backdrop solution in TV studios. In Asia-Pacific, Barco also heavily invested in expanding the sales and marketing force and set up an R&D center for LED technology in China. 68- 69
In addition, manufacturing of LED tiles was successfully started at the Voxar expands Barco's product portfolio and expertise in the medical Barco Leyard facility near Beijing. The number of employees in China market with 3D image analysis software. Folsom Research Inc. adds rose from 50 to 200, and thousands of LED tiles were manufactured in image processing to Barco's offering for rental and staging companies, the first year of production, a considerable part of Barco's worldwide whereas the integration of System Technologies brings a creative production. Testifying to Barco's success, spectators in the grandstand dimension to Barco's consultancy for rental and staging. of the Formula One grand prix in China last September, followed the race on giant Barco LED screens. An annual R&D investment level of 11% of sales, customer proximity and user involvement in product design, are of prime importance for Also in India, Barco invested considerably over the last years and set Barco to keep on offering pioneering solutions. With a strategic up an R&D and manufacturing facility for its Control Rooms division. In product portfolio rotation of about 60% every two years, Barco keeps 2004, the number of units produced went up from 1,000 to over 3,000 on setting the pace of innovation in many professional markets. units.
From systems to solutions
Over the years, Barco has gradually evolved from a product manufac- turer into a solution provider. Acquisitions of Folsom, Voxar and System Technologies bring the company valuable expertise in offering com- plete systems, as they add image processing, image analysis and creative design to its portfolio. Technology growth and engineering excellence
In today’s fast changing business environment, clear understanding of In line with the company’s strategic vision, Barco also focuses on emerging and future technologies is key to maintaining Barco’s com- image analysis tools that do not only visualize information but also petitive position. Close interaction between product management, help interpreting and understanding the data available. In this shift R&D and manufacturing, coupled with intimate customer and market from Human Machine Interface to data analysis solutions, the knowledge, allows Barco to focus on technology differentiators and Orthogon product range in traffic management and the Voxar product shorten time-to-market. range in medical imaging offer advanced software tools for image interpretation. In its constant quest for innovation, Barco keeps a close eye on emerg- ing technologies like Micro-Electro-Mechanical Systems (MEMS), flexi- For a technology leader to provide clients and partners with the high- ble displays, reflective displays and nanotechnology. Engineering high- est added value possible, engineering excellence is another foundation lights for 2004 include the first 16:9 High Definition projector for the stone of its activities. Therefore Barco will keep on focusing on opera- Presentation market, circular LED building blocks and the Encore video tional and engineering excellence in the course of 2005, with customer processing and control system for Events, a dedicated backdrop solu- satisfaction as the main standard for evaluation. Key to realizing this tion for Broadcasting, and unique solutions for pixel compensation and ambition and meeting customer expectations are user-friendly design, uniformity in medical LCD technology. In 2004 Barco filed for 31 usability, extensive testing, quality control and serviceability (easy patents and now has a portfolio of over 200 patents. Through an active access to and replacement of consumables). licensing strategy, this intellectual property may well become a valu- able asset for the company in the near future. 70- 71
In support of engineering excellence, Barco set up a company-wide resource planning and management tool in 2004. This will optimize the use of available resources through consistent planning and will allow to fully focus on technology differentiation. In addition, technology forums and collaborative user groups allow for knowledge exchange between divisions and business units, and offer the chance to reuse technology and components in new vertical markets.
Johan Remmerie Vice President Technology ICT
Alertness and responsiveness are key for Barco to remain competitive Processes will gradually get streamlined and management tools will in today’s global economy. Throughout the extended value chain, be implemented to offer integrated views of suppliers and customers, speed of decision making and execution are crucial for success. ICT is and facilitate reporting and data analysis. the basic enabler for the integration and zero-latency of business processes, and offers managers and business analysts a real-time In 2005 a program will be started to optimize Barco’s global supply status overview of the company. network. Related business processes will be rethought to gain transparency and flexibility, and will allow Barco to operate as close as In 2004, the foundations were laid for worldwide resource and port- possible to the customer, with improved service, responsiveness and folio management. This will bring improved focus to resource planning efficiency. The international roll-out of the unified ERP system will on a global scale and drive efficiency within engineering and enable and support the defined operating models in this respect. development. The roll-out of the company-wide ERP system was also continued throughout the year, with particular attention for the basic Barco will also continue the worldwide roll-out of customer-centric processes in customer service. data warehousing and business intelligence tools. Flexible solutions will ensure that information can be disseminated quickly and cost- Next to this, a performance measurement program was started. For a effectively within the organization, and will enable to have a single selected set of business processes, key performance indicators were point of control for enterprise management. defined and brought together in a management dashboard. Furthermore, the technology platform of Barco’s IT infrastructure will be refreshed and upgraded. The new environment will be the corner- stone for real-time collaboration and enhanced knowledge sharing. In this perspective, the info@home project, whereby associates get access to information sources from home, will ensure that all employees are connected and have vital information sources at hand anytime, anywhere.
Risk management also remains prominently on the agenda for 2005. To ensure smooth business operations, continuity and disaster recovery, measures and procedures for ICT services will be further implemented, with particular attention for system redundancy and data recovery in case of failures.
Miel Schamp President Information Technologies Corporate marketing
In today’s competitive business environment, the role of marketing is browse at least two pages. In 2004, a new search functionality was crucial to the entire decision-making process of a company. Marketing implemented to make the website even more user-friendly. Next to offers an organizational framework, with the customer at heart, which this, an e-mail alert system was set up and allows visitors to subscribe enables the whole organization to work as one and achieve its objec- to press release announcements and website updates. tives. As such, marketing goes beyond its traditional support role and identifies long-term strategies for harmonious interaction with To further increase brand recognition, the “You’ll see” cross-divisional customers in a constantly changing environment. communication theme was launched. This theme offers all divisions, business units and regional organizations a guiding principle to reflect With the company’s strategic orientation towards solutions and vertical Barco’s premium brand strategy in their 2005 communications. market expansion, the brand becomes a prime asset in marketing Barco’s unique competences and entering new market segments. Because products are an important interface with the customer, as far Therefore Barco’s premium brand strategy was completed with company as brand experience is concerned, product branding was a major point vision, mission and values, which offer employees a guiding principle of attention in 2004. A brand charter was established to lay down the to live the brand in their daily contacts with customers, prospects, consistent and uniform reflection of the Barco brand in product design. investors and colleagues. In order to avoid brand dilution through a multitude of product names, and to further strengthen the brand in an optimum way, Barco opted In addition, the corporate identity, which has been very consistently for a master brand approach. This approach, with full focus on the implemented worldwide, is paying off and proves to be a prerequisite Barco name, not only enhances brand recognition but also facilitates to position Barco in a professional way in all B2B markets it is active in. the strategic shift from products to solutions, with more emphasis on the added value of the solution than on the individual components. As The globally integrated barco.com website, with its dedicated cus- far as product identification is concerned, the use of non-brandable tomer-oriented market portals, is a driving force in a unified brand alphanumerical codes to identify products will lead to a substantial image and consistent brand experience across all communication. reduction of the number of trademarks and will facilitate cross-market Traffic on the Barco homepage increased by 33% in 2004. More than use of solution components. half of the visitors spend more than 2.5 minutes on the website and Finally, in a global company, with dedicated teams in various locations Ann Galland all over the world, knowledge sharing and strategic planning are cru- Director Corporate Marketing cial to success. To coordinate and streamline all efforts worldwide, a marketing board has been set up, where senior executives share strategic insight and weigh new branding initiatives. In addition, forums were organized for Barco communications and marketing pro- fessionals worldwide in order to exchange views on their respective challenges and achievements. Human resources
Working in a multicultural and global organization has to be an enrich- ing experience. Therefore Barco's three-dimensional human resources approach aims to create a working atmosphere, which stimulates employees to explore new horizons and discover new potential. Multi- national task forces align market position, employee profiles and regional cultural differences with the company's vision.
As people make the difference in today's competitive business envi- ronment, competence management is not an empty phrase with Barco. Dedicated programs have been set up to identify employees' potential and aspirations, and link their personal career paths with the overall company roadmap.
In 2004 the number of staff worldwide rose from 4,022 to 4,389. The number of personnel in Belgium remained stable but increased by 171 in the rest of Europe, by 134 in North America and by 89 in Asia- Pacific. Acquisitions of Voxar in the medical imaging market and Folsom Research Inc. in the events market account for an increase of the number of staff with 152.
Donald Defoort President Human Resources & Corporate Affairs 76- 77
In line with the company's strategy to be the worldwide number one 2004 also was the year of Barco's seventieth birthday, with festivities in selected professional markets, the R&D force was expanded with all over the world. As employees are at the heart of Barco's success 10%, the number of sales and marketing staff with 12% and the cus- story, they were all invited to join the celebrations and organize com- tomer service base with 16%. The strong company focus on regions pany outings and events. Celebrations culminated in the publication of resulted in an increase of the number of personnel of about 20% in the book "An eye for niche markets, the strategic growth of Barco". Asia-Pacific and North America, which lays the foundations for future This historical book not only describes Barco's expansion over the last success in both regions. 70 years but also keeps a close eye on the strong involvement, tech- nological boldness and feel for international expansion of the company's Last year Barco not only invested in people but also had an eye for the staff. workplace and working atmosphere. A new building was constructed for the operations of the BarcoView division in Kortrijk, Belgium, Internationalization will also mark the coming year. Active in global whereas Barco's US facilities in Duluth, Atlanta, were expanded. The markets, Barco interfaces with international customers and offers new and refurbished offices and production floor not only offer products and solutions on all continents. This opens up new perspec- employees enhanced working comfort but also promote cooperation tives and career opportunities for associates, both in product bases and and knowledge exchange by regrouping business units from several regional offices and presents Barco with the ongoing challenge of locations into a central location. Next to this, Human Resources set up optimizing business efficiency in a multicultural environment. the info@home project, which gives staff the chance to connect to the Therefore new initiatives are being set up, including an international Barco intranet and have information at hand where and when they HR exchange program, remuneration benchmarking and employee need it. evaluation. Corporate sustainability
Barco wants to be successful in the long term wherever it operates, successful if it enjoys the trust and support of its neighbors. That is why and as a stock-listed company, making profit is an integral part of this Barco strives to be recognized as a dependable partner and an attrac- approach. Therefore the corporate roadmap focuses on both internal tive employer that takes its social responsibilities seriously. Therefore and external growth, through improved business efficiency and strate- Barco actively sponsors humanitarian, cultural and social causes, gic acquisitions in key markets. With this aggressive approach, Barco is including city projects, concerts, festivals and charities like Unicef, confident to further strengthen its leading position in worldwide visu- Belgian Burns Foundation and the victims of the seaquake in South East alization markets and maximize profit for all stakeholders. Asia.
But profitability is not the only cornerstone of Barco's long-term strategy, Investing in education and science is also very important for Barco's as the company wants to make profit in harmonious operation with future, both from a competitive as well as a social point of view. That society. As a good corporate citizen, Barco wants to balance the three is why Barco financially supports the Vlerick (Belgium) and CEIBS P's in its sustainability approach. Barco works actively to balance financial (China) management schools and hands out yearly awards for promis- success (profit), human progress (people) and a clean environment ing engineering research. What is more, Barco wants to bring high tech (planet). Therefore the company enters into a dialogue with all stake- closer to the people and stimulate interest in sciences through open- holders: employees, customers, neighbors, suppliers, shareholders and ing its doors for the general public on special occasions, welcoming society in general. interns or giving guided tours to students.
With its global presence, Barco has an impact on and actively partici- Employees are also key in Barco's sustainability approach. Barco is not pates in local communities all over the world. These communities play only committed to internationally recognized labor and social standards an important role in the corporation's success, as Barco can only be at all its sites worldwide, but takes many more initiatives to create a 78- 79
truly international, multicultural working environment. Next to this, the As for the environment, Barco strictly respects legislation and tries to company is continuously internationalizing its management teams. do better than regulations prescribe, by using easily recyclable raw materials and components, by cleaning historic ground pollution or by Barco also wants to cooperate in a constructive manner with employee developing energy-friendly products. Barco's projectors for instance, representatives. In this respect, regular meetings are held with the feature long-life lamps and its LCD displays are equipped with replace- works councils and trade unions, and a European works council was set able backlights, increasing product lifetime and reducing waste. When up several years ago. Protecting and promoting good health is also an polluting manufacturing processes cannot be avoided, Barco operates obligation for a corporation like Barco and therefore many sports teams in strict accordance with local legislation. As an example, its and leisure initiatives have been set up within Barco, including jogging, Manufacturing Services division has had an environmental charter from soccer, teambuilding events, ... an independent government agency since 1993.
When developing new products and manufacturing processes, Barco Another integral part of Barco's corporate sustainability approach is its adheres to the ISO9001 standard and uses the 6sigma methodology to striving for openness. A new corporate governance charter has been create more efficient processes. Next to this, the company also active- drafted and will be submitted to the annual shareholders' meeting in ly involves its suppliers in performance improvement programs as they May 2005. But corporate governance and transparency have always play a crucial role in ensuring the competitiveness of Barco's products been key for Barco, as is illustrated by the fact that its financial com- and services. In this respect, the first ever supplier day was held in munication was awarded for the second time in a row by the Belgian 2004 and the first Barco partnership awards were handed out. Association of Financial Analysts. Sales and services
Customer intimacy is deeply rooted in the values and operating prin- ciples of Barco. With forward-thinking vision, passion and ambition, Barco has strengthened its regional presence and customer-centric focus in sales and post-sales support.
Following the global commitment to anticipating and responding to market demands, Barco has centralized regional sales and post-sales support in North America, Asia-Pacific, and Europe/Middle East/Africa (EMEA). Regional presidents were appointed to each of these three regions to emphasize a dedicated approach, while these presidents were also appointed to Barco’s Executive Committee to ensure conti- nuity across all the business divisions. In just one year, Barco's regional approach has already proven to be a successful strategy, with a notable increase in sales for 2004. While growth in EMEA has steadily continued to climb, US sales experienced a healthy increase of 14% (8% organic) in local currency, while Asia-Pacific realized a 32% gain over the year in local currency.
Luc Kindt President Global Sales & Services In all regional markets, it is of prime importance to have a direct feel for customer needs. With local sales offices in all continents, Barco is Bernard Dursin in a unique position to understand its customers, convince them of the President Europe, Middle East, unique value added solutions and offerings, and show them full com- Africa and Latin America mitment.
For Barco, the optimal performance of its products during the complete life cycle is the best guarantee for the company’s success. To ensure maximum support and availability of products, Barco has expanded its worldwide support network with both regional competence centers and local service centers. Cross-divisional synergies in technology, product development, channel marketing and account management have aided Barco in the successful management of diverse customer groups and multiple products, services and channels, while playing the role of manufacturer, distributor and service provider.
Streamlining Barco’s worldwide service processes has become vital to Dave Scott the success of the company. True to its firm commitment to customer President North America support for sales and post-sales, Barco established a Service Core Team to lead and streamline worldwide service processes for closer commu- nication with the customer in all phases of product life cycles.
Together with local partners in 100 countries worldwide, the Barco service centers and major regional competence centers provide cus- tomers with faster turnarounds, continuous availability of spare parts, and long-term technical support, training, consultancy and engineering services.
Jacques Bertrand President Asia-Pacific Comments on the results
In comparison with the previous year, sales increased by 6.8% in 2004. Two divisions are playing a leading part in the sales increase in Asia- All divisions recorded a growth in sales, except for the division Pacific: Barco Control Rooms and Barco Media & Entertainment. Both BarcoVision, where sales dropped 11% (after exclusion of Machine divisions recorded a strong growth in China. This country already makes Vision, divested July 2003). The divisions Control Rooms and Media & up 9% of Media & Entertainment sales. This proves that the investments Entertainment saw their sales grow by 32% and 31% respectively. in research & development and manufacturing in Barco Leyard (Barco's Growth at the BarcoView and Presentation & Simulation divisions was joint venture in China set up in 2003) render the expected results in the rather modest, with a sales increase of 4% and 3% respectively. Chinese market. Excluding currency fluctuations, sales would have increased by 12% year-on-year. The acquisitions made in 2004, Folsom in January and Orders declined by 1.4% compared with the year before. Excluding Voxar in September, account for a total sales increase of 3.4%. currency fluctuations, however, orders would have grown by 3%. The substantial growth in orders of 18% for the Media & Entertainment divi- The Asia-Pacific region accounts for a considerable part in the growth in sion and the modest growth of 2% for the BarcoView and Barco Control sales with a 22% increase compared with 2003. Sales in the Americas Rooms divisions, could not fully offset the decline by 20% at increased by 5%, whereas sales grew by 3% in EMEA (Europe, Middle BarcoVision and 5% at Presentation & Simulation. For the first three East and Africa). When evaluating sales in local currencies, Asia-Pacific quarters of 2004 orders were higher than sales. But the low book-to-bill grew by 32%, the Americas by 14% and EMEA by 3%. This confirms ratio for 4Q04 of 0.84 brought the book-to-bill for the full year down to once again that Barco's increased investments in sales & marketing in 0.97. regions with strongly growing economies, are paying off. General and administration expenses remained relatively stable in 2004 (7.1% of sales). In absolute value this was also the case for investments in research & development. Sales and marketing investments however, saw a substantial increase of 9% in absolute figures. 82- 83
Sales in ‘000 euro & current EBITA in %
2004 % EBITA 2003 % EBITA
BarcoView 220,449 16.9 211,894 15.6 Barco Media & Entertainment 160,903 1.6 122,486 1.8 Barco Control Rooms 109,552 12.1 82,976 12.6 Barco Presentation & Simulation 105,233 10.0 102,100 13.9 BarcoVision* 59,556 12.4 75,522 15.1 Barco Manufacturing Services 112,083 0.7 64,473 3.8 Eliminations -95,853 -30,507
Total 671,923 10.7 628,944 11.0
* Sales for 2003 include the business unit Machine Vision, divested in July 2003
Evolution of sales per quarter, 2003 - 2004 Evolution of orders per quarter, 2003 - 2004
(‘000 euro) (‘000 euro)
250,000 250,000
200,000 200,000 2003 2003 150,000 150,000 2004 2004 100,000 100,000
50,000 50,000
0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 % 2003 -1.2 8.6 8.9 10.5 % 2003 -2.6 5.6 8.1 -14.2 Traffic Management Medical Imaging 28.4% Systems 35% BarcoView
Orders and sales
Orders at BarcoView increased by 2.4% in 2004. Sales grew by 4%.
With an increase of 24%, sales in the medical market were the most important driver of the division's growth. The medical market grew each quarter year on year, confirming Barco's leadership in the PACS Defense & Security Avionics (Picture Archiving and Communication Systems) market. 3D medical 30.8% 5.8% software company Voxar, which was acquired in September 2004, rea- lized euro 2 million in 4Q04. This acquisition is expected to become an important contributor to Barco's growth in the medical market in the years to come. The defense & security market declined by 15% in 2004, a decline year-on-year to be noted in each of the four quarters. An improved performance in this market is expected in 2005. Traffic BarcoView sales & EBITA, 2003 - 2004 management increased sales by 8% driven by an excellent fourth quarter. Avionics realized a sales increase of 6%.
(In million euro)
In the first half of 2004, BarcoView had a book-to-bill ratio above 1. 250 This was no longer the case in the second half of the year due to a 200 lower order performance in the defense & security and avionics mar- Sales kets. 2004 book-to-bill was 0.94. The medical and traffic management 150 EBITA markets saw good order levels over 2004, with an increase of 24% 100 212 221 and 9% respectively. 50
0 15.6% 16.9% 2003 2004 Evolution of Defense & Security sales per quarter, 2003 - 2004
(‘000 euro)
30,000 25,000 20,000 2003 15,000 2004 10,000 5,000 0 Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4 % 2003 -14.1 -2.4 -14.9 -25.6
Luc Vandenbroucke President BarcoView EBITA
Evolution of Traffic Management EBITA margin increased from 15.6% in 2003 to 16.9% in 2004. sales per quarter, 2003 - 2004
The increase in gross profit margin from 46.6% in 2003 to 47.4% in 2004 had a positive impact on the EBITA margin for the whole year. (‘000 euro) This effect was of particular importance in 4Q04 with the gross profit 25,000 margin increasing to 51.1%, resulting in a 23% EBITA margin. 20,000 2003 R&D investments 15,000 2004 10,000 Total expenditures for research & development amounted to 12.2% of sales. 5,000 0 Q1 Q2 Q3 Q4 Number of employees
At the end of 2004, the division BarcoView had 1,215 employees worldwide. Q1 Q2 Q3 Q4 % 2003 -24.5 6.7 -8 71.6 86- 87
Evolution of Medical Imaging Systems Evolution of Avionics sales per quarter, 2003 - 2004 sales per quarter, 2003 - 2004
(‘000 euro) (‘000 euro) 22,000 20,000 6,000 18,000 5,000 16,000 14,000 2003 4,000 2003 12,000 10,000 2004 3,000 2004 8,000 6,000 2,000 4,000 1,000 2,000 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 % 2003 10.9 12.8 33 38.6 % 2003 24.9 18.7 -3.8 -3.7 Barco Media & Entertainment
Orders and sales
In 2004 orders at Media & Entertainment grew by 18.3% and sales by play an important role in this success. While more than doubling its sales 31.4%. compared with 2003, Digital Cinema saw a shift in importance from the US to the Asia-Pacific market, which makes up for almost 50% of the With the divestment of the home theater activity, only three business total digital cinema market for Barco (with China taking up 23%). The units remain in the Media & Entertainment division: Events, Media and European market almost accounts for almost 40% of sales. This Digital Cinema, which all realized substantial growth in 2004 (29.2%, illustrates the very slow digitization of cinema theaters in the US. 33% and 163.9% respectively). After the acquisition of California-based Folsom in January 2004, its product-line was successfully integrated Orders grew by more than 20% in the events and media markets. It is worldwide. In this way the Folsom products could play a major part in clear that these markets, in particular the media market, will remain the events market in Europe and Asia-Pacific as well, and contributed important growth drivers for Barco in 2005. In digital cinema, orders substantially to the strong increase in sales seen in the events market increased by almost 50%, again with better performance of the worldwide. The Media business unit realized an important part of its European and Asia-Pacific markets than the North-American market. The growth in China, with sales increasing from 3.5% of total sales in 2003 book-to-bill ratio for the division was 1.03. to 17% in 2004. The investments made in the Chinese media market through the joint venture of Barco Leyard at Chang Ping near Beijing,
Digital Cinema
Media 7.5% 30.8%
Events 61.7% 88- 89
Barco Media & Entertainment sales & EBITA, 2003 - 2004
(In million euro)
180 160 140 Sales 120 100 EBITA 80 123 159 60 40 20 0 1.8% 1.6% 2003 2004
Stephan Paridaen President Barco Media & Entertainment EBITA
Evolution of Media EBITA margin decreased from 1.8% in 2003 to 1.6% in 2004. Over the sales per quarter, 2003 - 2004 first three quarters EBITA margins improved compared with a year before. In 4Q04 however, EBITA margin was minus 7.1%, negatively impacted by a lower gross profit margin and higher inventories. This (‘000 euro) was due to the fact that LED walls were (only temporarily) simultane- 18,000 ously manufactured in China and Belgium and to longer lead times of 16,000 suppliers. The EBITA margin was further negatively influenced by pro- 14,000 12,000 2003 visions for bad debt in the events market. 10,000 2004 8,000 R&D investments 6,000 4,000 2,000 Total expenditures for research & development amounted to 8.6% of 0 Q1 Q2 Q3 Q4 sales in 2004.
Number of employees Q1 Q2 Q3 Q4 At the end of 2004, the division Media & Entertainment counted 564 % 2003 365.3 62.2 27.2 -14 employees worldwide. 90- 91
Evolution of Events Evolution of Digital Cinema sales per quarter, 2003 - 2004 sales per quarter, 2003 - 2004
(‘000 euro) (‘000 euro) 35,000 6,000 30,000 5,000 25,000 2003 4,000 2003 20,000 2004 3,000 2004 15,000 2,000 10,000 5,000 1,000 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 % 2003 49.5 34.3 11.4 23.2 % 2003 58.7 209.1 245.5 196.5 Barco Control Rooms
Orders and sales
Orders at Barco Control Rooms increased by 2% and sales by 32% in 2004.
Sales in China increased by 34% in 2004, a growth that is even stronger than the 32% of the division as a whole. Also South Korea proved to be a growing market for the division. Traffic & surveillance applications did very well worldwide throughout the year, while in the second half of the year the process control market showed a growing interest in Barco Barco Control Rooms sales & EBITA, 2003 - 2004 control room solutions.
All quarters in 2003 recorded very strong order levels, thus preparing for (In million euro) the strong sales of 2004. At the end of 2004 Barco saw some orders for 110 control rooms shift to 2005. Book-to-bill ratio was 0.94. 100 90 80 EBITA 70 Sales 60 50 83 109 EBITA EBITA margin was 12.1% of sales versus 12.6% the year before. There 40 30 was a dip to 8.3% in 3Q04, due to temporary supplier issues, which 20 weakened the gross profit margin. 10 0 12.1% 12.6% 2003 2004 R&D investments
Total expenditures for research & development amounted to 6.6% of sales.
Number of employees
At the end of 2004, the Control Rooms division had 569 employees worldwide. 92- 93
Evolution of Control Rooms sales per quarter, 2003 - 2004
(‘000 euro) 40,000 35,000 30,000 25,000 2003 20,000 2004 15,000 10,000 5,000 0 Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4 % 2003 37.2 33.7 39.6 22.5
Carl Peeters President Barco Control Rooms Barco Presentation & Simulation
Orders and sales
Orders at Barco Presentation & Simulation decreased by 5% while sales grew by 3.1%. Barco Presentation & Simulation Except for 1Q04, the division Presentation & Simulation realized a sales & EBITA, 2003 - 2004 growth year-on-year in all quarters of 2004. Simulation business grew by 10% with good performance in the virtual reality segment and the (In million euro) museum and planetarium markets. The market for simulation solutions 110 for civil aviation on the other hand, remained weak. The Presentation 100 business unit saw its sales decrease by 6.3%. In 2004 the award- 90 80 winning ICON projector, the world's first with 16:9 native resolution, was 70 Sales successfully introduced. 60 102 104 50 EBITA 40 Compared with 2003, order intake in the simulation market remained 30 flat. The presentation market saw its orders decrease but with the new 20 10 ICON solution it should be able to re-strengthen its market position. 0 13.9% 10.0% Book-to-bill ratio for the division was 0.99. 2003 2004
EBITA
EBITA decreased from 13.9% in 2003 to 10% in 2004. Compared with the previous year, the EBITA margin was particularly low in 1Q04 due to lower sales volumes. 3Q04 margin suffered from price pressure in the Presentation presentation market and the delivery of some lower margin projects in 38.1% the simulation market. Although the EBITA margin grew to 13.2% again in 4Q04, there was also the negative influence of the lower US dollar.
R&D investments
Total expenditure for research & development amounted to 9.1% of sales. Simulation 61.9% Number of employees
At the end of 2004, the division Presentation & Simulation counted 502 employees worldwide. Michel Vandeplas President Barco Presentation & Simulation
Evolution of Simulation Evolution of Presentation per quarter, 2003 - 2004 sales per quarter, 2003 - 2004
(‘000 euro) (‘000 euro) 20,000 14,000 18,000 16,000 12,000 14,000 10,000 2003 2003 12,000 8,000 10,000 2004 2004 8,000 6,000 6,000 4,000 4,000 2,000 2,000 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 % 2003 -11.3 27.8 9.7 14.1 % 2003 -24.7 -4.8 14.7 -4.2 BarcoVision
Orders and sales
Orders at BarcoVision decreased by 8% and sales by 11%.
BarcoVision sales for 2004, compared with those for 2003, exclude Machine Vision, the company's former food sorting business, which was divested as of 31 July 2003. The decrease in sales year-on-year illustrates the hitherto ongoing low of the textile market cycle. But in the second half of 2004, the decline of sales has stabilized.
Book-to-bill ratio was 1 for 2004.
EBITA
BarcoVision's EBITA margin over 2004 was 12.4%, boosted by a margin of no less than 18.2% in 4Q04, which was realized despite the continuing negative climate in the textile market.
R&D investments
Total expenditure for research and development amounted to 13.5% of sales.
Number of employees
At the end of 2004 the division BarcoVision counted 403 employees Bernard Cruycke worldwide. President BarcoVision 96- 97
Evolution of BarcoVision BarcoVision sales & EBITA, 2003 - 2004* sales per quarter, 2003 - 2004*
(In million euro) (‘000 euro)
80 25,000 70 60 20,000 2003 50 Sales 15,000 40 EBITA 2004 76 60 30 10,000 20 5,000 10 15.1% 12.4% 0 0 Q1 Q2 Q3 Q4 2003 2004
Q1 Q2 Q3 Q4 % 2003 -26.7 -16 -11.2 19.4
* Sales for 2003 include the business unit Machine Vision, divested in July 2003 Barco Manufacturing Services
Orders and sales
Orders at Barco Manufacturing Services grew by 95.2% and sales by 73.8%.
At the end of 2003 the decision was taken to consolidate all electronic manufacturing of the Belgian divisions into Barco Manufacturing Services to get the company's manufacturing operations further Barco Manufacturing Services streamlined. Smaller series are now manufactured in the division's sales & EBITA, 2003 - 2004 Belgian plant, whereas larger series are produced in its Czech plant. The transfer of all subcontracting work from the other Barco divisions into the Barco Manufacturing Services division explains to a large (In million euro) extent the growth in orders and sales of the division. 110 100 90 The division's book-to-bill ratio was 1.05. 80 70 Sales 60 EBITA EBITA 50 64 112 40 30 EBITA margin for 2004 was 0.7%. The margin was temporarily nega- 20 tively impacted by the consolidation of the activities into two factories. 10 0 3.8% 0.7% Moving machines to other production sites and training new people 2003 2004 decreased the efficiency of the manufacturing processes and led to a lower EBITA margin.
Number of employees*
At the end of 2004 the division Manufacturing Services counted 805 employees worldwide.
* Next to staff dedicated to one particular division, Barco also has a global number of 331 employees who hold sales, commercial and administrative positions. Patrick Luyssen President Barco Manufacturing Services & General Operations There’s more to explore You’ll see Information for the shareholder JP Tanghe President Corporate Communication Information about the share & Investor Relations
Euronext Brussels Market capitalization 31 Dec 04 848,150,702 euro Highest capitalization 935,396,182 euro Barco share BAR ISIN BE0003790079 Lowest capitalization 808,765,715 euro Barco VVPR-strip BARS ISIN BE0005583548 Share price 31 Dec 03 69.50 euro Share price 31 Dec 04 68.05 euro Reuters BARBt.BR Average number of shares traded Bloomberg BAR BB on daily basis (2004) 30,166
Yearly volume 2004 544,676,028 euro Velocity 2004 58.36% 102- 103
Ownership of the company’s shares
On 31 December 2004, ownership of the company’s shares was as follows:
Gimv: 9.43% (1,174,921 shares) fully diluted: Gimv: 8.84% (1,174,921 shares) Fidelity:5.33% (664,357 shares) Fidelity:5.00% (664,357 shares) Public: 83.27% (10,379,176 shares) Public: 84.31% (11,202,675 shares) Barco: 1.97% (245,186 shares) Barco: 1.85% (245,186 shares) Total: 100% (12,463,640 shares) Total: 100% (13,287,139 shares)
Evolution of the share price
Barco/BEL 20/Next 150 Barco/Eurostoxx 50/Eurostoxx Technology
180 180
160 160
140 140
120 120
100 100
80 80
60 60
40 40
20 20 ------0 ------0 04 04 04 04 04 04 04 04 04 04 04 04 04 04 01 03 05 07 09 11 12 01 03 05 07 09 11 12 02 02 02 02 02 02 31 02 02 02 02 02 02 31