Innovators in image processing
BARCO
General Presentation
February 20, 2003
JP Tanghe: VP Corp Comm & Inv Rel
1
BARCO
• Founded as the Belgian American Radio
Corporation in Poperinge, Belgium, in 1934
• International company, headquartered in Kortrijk,
Belgium, with a global presence
• Listed on Euronext Brussels, part of BEL 20, Next
150 and component of Dow Jones Sustainability
Indexes
2
Worldwide Presence
Asia
Japan
North America
Europe
Germany
Charlotte (North Carolina)
United Kingdom
Kennesaw (Georgia)
France
Duluth (Georgia)
The Netherlands
Xenia (Ohio)
Italy
Beaverton (Oregon)
Spain
South America
Sao Paulo (Brazil)
Buenos Aires (Argentina)
Tokyo, Osaka, Nagoya
India
Delhi, Noida
Singapore
China
Beijing, Shanghai,
Chengdu, Guangzhou
Hong Kong
Switzerland
Thailand
Czech Republic
Bangkok
Denmark
Malaysia
Poland
Kuala Lumpur
Russia
Australia
Israel
Melbourne, Sydney
Taiwan
Shinzu, Taipei
South-Korea
Seoul
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World Leader in Image Processing
• Large screen visualization (BarcoProjection)
• Visualization for life critical decision-making
(BarcoView)
• Visual inspection and quality control (BarcoVision)
Vision
14%
Subc
7%
dotrix
1%
BCD
12%
BPI
19%
Projection
53%
View
25%
1H02
BCI
22%
4
View
Control Rooms
Media & Events
Simulation
Food
Textile
Markets
Leisure
Automotive
Oil & Gas
Flight +++
Cinema
Events
Media
Surveillance
Broadcast
Telecom
Utilities
Medical
Defense
ATC
Avionics
Leading Edge Technology in Vertical Markets
……
Vision
Projection
Networking/Software/Systems
Image Processing
LCD
CRT
LED
DLP
Sensors
Technologies
5
BarcoProjection
BarcoView
BarcoVision
6
Market Overview
- Control Rooms
Barco Control Rooms
-
Simulation Products
Virtual & Augmented Reality
Edutainment
Intelligent Displays
Barco Projector Innovators
-
Media
Events
High End Home Theater
Digital Cinema
Barco Creative Imaging
7
Control Rooms
• Expansion of application markets from Telecom
and Utilities towards Broadcast, Traffic,
Surveillance
• Worldwide leader with 43% of market
8
Simulation and Virtual & Augmented Reality
• Simulation
Flight, ATC, Ship Bridge, Drive, Gunnery
• V&AR
Virtual Prototyping: Automotive, AEC
Oil & Gas
Molecular Modeling, Medical
Scientific Research and Education
• Edutainment
Museums, Science Centers, Aquariums
Theme Parks and Leisure Centers
Planetariums
9
Intelligent Displays
• Presentations can be sent to projectors via
standard network or Internet, even wireless
• Projector functions can be controlled via network
or Internet
• User can view information on status of all
projectors connected to the network
• Intelligent Displays to replace
standard projectors in market
for corporations and other
organizations
10
Events
• Combines LED, projection
and control equipment to
provide customized events
control solutions to the
events and rental & staging
industries
• A recognized market leader
whose products grace the
shows of Madonna, U2,
Jennifer Lopez and many
more
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Media
• Development and
production of LED
display systems and
peripheral equipment
targeted at the specific
needs of the media and
sports markets
LED Wall Reliant
Stadium, Houston, Texas
LED Wall for Coca Cola on
Piccadilly Circus in London
12
Digital Cinema
• Market with a huge potential of ±118.000 theaters
worldwide, but still waiting for a business model acceptable
by all stakeholders in this market
• Increasing number of agreements signed with Cinema
theater equipment dealers
• Regular “individual” sales of Digital Cinema projectors
• First quantity buy by Boeing
Digital Cinema
• Promising Chinese market
13
High End Home Theater
• Sales in High End Home Theater
market going strong with new
product introductions
• April 2002: launch of
revolutionary home theater
concept “Cine VERSUM”, bringing
unparalleled digital video quality
and flexibility to the home
theater of the future
Cine VERSUM
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BarcoProjection
BarcoView
BarcoVision
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Market Overview
-
Air Traffic Control
Defense
- Airborne
- Naval
- Landbased
Command & Control
-
Medical Imaging
- PACS
- Modalities
Medical Imaging Systems
- Avionics
Avionics
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Air Traffic Control
• ISIS LCD flat panel turning
into commercial success as
anticipated at introduction in
Europe early 2001
• Now also breaking through in
Asia and US
• Replacement market of some
12,000 workstations worldwide
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Defense
• High quality ruggedized flat panels, graphic
boards, consoles and visualization (sub)systems
that can be used in a variety of defense
applications, reconnaissance, surveillance and
intelligence gathering
18
Medical Imaging
• Significant market share in PACS (Picture
Archiving and Communication Systems)
• To be continued and strengthened by introduction
of Coronis family of flat panels and ImageTile
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Avionics
• Clear acceptance of system concept as adopted
over recent years, made possible thanks to
important R&D investment
• Production series based on this concept are part of
long term projects
20
BarcoProjection
BarcoView
BarcoVision
21
Market Overview
• Textiles: sensors & systems
• Spinning
• Weaving
• Finishing (dyeing)
• Plastics
• Production monitoring
• Optical sorting
• Food (French fries, nuts,
seafood, vegetables…)
• Non food (tobacco,
plastic flakes and pellets)
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Strategy of Barco
(1)
Consolidate our nr. 1 or nr. 2 position in our key
growing markets
• Medical (20% to 25% CAGR)
• Events (14% on the longer term)
• Defense
• Simulation and V&AR (6% to 8% CAGR)
through internal growth by investing in R&D to
improve in
• System approach
• functionalities
• Cost containment
through external growth: acquisitions by means of
strong net cash position of > 60 M€
• TAN in August 2002
• ORTHOGON in October 2002
23
Strategy of Barco
(2)
• Expand in new markets
• Air Traffic Control: build on change from CRT to
LCD (increased market share in 2002 from 5% to
80% of new installations)
• Digital Cinema: build on change from analog to
digital with a potential of 118.000 theatres
(CAGR: 100%, but in its infancy)
• Media: use and adapt technology leadership from
Events market (14% CAGR)
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Innovators in image processing
Results third quarter
2002
25
Operational results Q302
in € million
Q302
YTD02
Q301
YTD01
Orders
163.6
521.8
146.8
525.3
Sales
145.8
474.2
153.7
492.5
EBIT
11.2
39.9
2.2
42.9
7.7%
8.4%
1.4%
8.7%
EBIT %
26
Orders higher than Sales for 3rd
consecutive quarter
(in € million)
200
150
Orders
Sales
EBIT
100
50
0
Q101 Q201 Q301
Q401 Q102 Q202 Q302
* Results 2001 “pro forma” i.e. incl. dotrix n.v., Barco Graphics not
consolidated
27
Results Barco
• Orders: order book has further increased in Q302 by € 18
million
• Sales: sales Q302 traditionally weak because of reduction in
shipments to European customers due to holiday season
Additional impact from
• Delayed internal deliveries due to transfer of mechanical
manufacturing from Belgium to Czech Republic
• Yield problems with external suppliers
• EBIT:
• Slight increase of gross margin from 55% for 1H02 to 56% in
Q302 by
• Ongoing introduction of new features, compensating price pressure
• Ongoing cost improvement
• Further reduction of manpower from 4132 end 2001, to 4000
employees worldwide
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BarcoProjection (1)
(in € million )
100
90
80
70
60
Orders
Sales
EBIT
50
40
30
20
10
0
Q101 Q201 Q301 Q401 Q102 Q202 Q302
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BarcoProjection (2)
• Sales
• Control Rooms:
• Growth in new markets compensates low investments from Telecom
• Orders Telecom picking up again in Q4
• New stand-alone projector iQ
• Has won several awards
• Not taking off fast enough yet
• Higher market share in V&AR thanks to growth in US market and
TAN acquisition
• Events:
• Q3: weaker investments by Events customers, picking up again in Q4
• Media
• Media projects delayed
• New product for Media applications available as of begin ‘03
• Hopeful signs from Digital Cinema, particularly in China
• EBIT: margin well maintained at 10.1% vs comparable
quarters, Q301 (2.1%) and Q102 (9.3%), despite lower
sales
30
BarcoView (1)
(in € million)
80
70
60
50
Orders
Sales
EBIT
40
30
20
10
0
-10
Q101 Q201 Q301 Q401 Q102 Q202 Q302
31
BarcoView (2)
• Orders:
• Orders in Security and Defense picking up again for existing and
new programs
• Ongoing strong orders for ATC and Medical
• Sales: ongoing successes in
• Air Traffic Control (ATC)
• Further market penetration of flat LCD panel, also in USA
• Strengthening of market position by acquisition of Orthogon
• Medical
• Introduction of high-end flat screens for Medical of 1, 2 and 5
megapixel besides 3 megapixel
• EBIT: much better than Q301
32
Orthogon joined Barco (Oct 1, 2002)
Strategy:
ATC is extending its portfolio with software and integration services,
also towards end users
Market Share Orthogon:
• Mainly ATC (80%) and expanding into Security & Defense to offer
software and integration services
• System integrators and end users
Eurocontrol
• Mainly Europe (80%) with market
10%
leadership
• Short term growth potential in
Others
USA in ATC
14%
• Long term growth potential
Security &
in Security & Defense
Defense
2%
ATC Industry
74%
33
BarcoVision
(in € million)
30
25
20
Orders
Sales
EBIT
15
10
5
0
Q101 Q201 Q301 Q401 Q102 Q202 Q302
• Textile machine market in China and Turkey continues to
go strong
• Sales weaker in Q3 due to seasonal effect
34
Barco Subcontracting
(in € million)
30
25
20
Orders
Sales
EBIT
15
10
5
0
Q101 Q201 Q301 Q401 Q102 Q202 Q302
• Increase in manufacturing with components in consignment
results in lower sales but yields higher gross margin
35
Geographical breakdown of
Turnover per Activity (%)
EU
Nafta
Asia
ROW
BarcoProjection
BarcoView
BarcoVision
37
28
60
35
57
11
24
13
17
4
3
12
Total Q302
42
35
19
5
Total 1H02
46
32
16
6
Total 2001
48
30
16
6
36
OWC: Inventory
• Inventory on same level as end Q202 due to slack in deliveries
and in preparation of higher sales in Q402
in € million
160
140
143
132
126
128
June
Sept
120
119
100
80
60
40
20
0
End 01
Mar
Target Dec
37
OWC: Accounts Receivable
Days outstanding
100
90
92
84
80
75
80
70
60
50
40
30
20
10
0
End 01
Mar
June
Sept
(incl. BG)
38
Net cash position
in € million
80
67.8
70
60
55.2
56
Q102
Q202
50
40
30
20
11.8
10
0
end 01
Q302
39
Results Q3 & YTD
in € million
Q302
YTD02
Q301*
EBIT
11.2
39.9
2.2
42.9
Current Result
11.6
40.7
1.4
42.3
Taxes
(3.2)
(9.6)
(0.3)
(12.9)
1.1
29.4
0
(0.4)
Curr. Res. after Taxes
8.4
Extra-Ordinaries
0
Amort. Of goodwill
1.4
3.6
1.7
Net result
7.0
(0.5)
(0.6)
Current EPS**
0.68
2.51
0.09
Current cash Flow
23.7
31.1
(28.1)
77.5
15.8
YTD01*
5.1
23.9
2.37
74
*”pro forma”, i.e. incl. dotrix n.v., Barco Graphics not consolidated
** in euro
40
Preview Q402
Sales Q402: 193.9 mio euro vs 175/185
expected = +7% vs Q401
• Better supply of certain components
• More deliveries from backlog
• More orders to be delivered still in 2002
EBIT Q402: > 31 mio euro vs 21/25
expected
41
Preview Full Year 2002
Sales FY2002: 668 mio euro vs 673 in 2001
= -0.8% despite low USD
Orders FY2002 vs FY2001: -0.8%
EBIT FY 2002:
+ > 30% vs 2001
> 10% vs sales
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Innovators in Image Processing
www.barco.com
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