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1
Innovators in image processing
JP Tanghe: VP Corp Comm & Inv Rel
BARCOGeneral Presentation
February 20, 2003
2
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
3
Worldwide Presence
Europe
Germany
United Kingdom
France
The Netherlands
Italy
Spain
Switzerland
Czech Republic
Denmark
Poland
Russia
Israel
North America
Charlotte (North Carolina)
Kennesaw (Georgia)
Duluth (Georgia)
Xenia (Ohio)
Beaverton (Oregon)
South America
Sao Paulo (Brazil)
Buenos Aires (Argentina)
Asia
Japan
Tokyo, Osaka, Nagoya
India
Delhi, Noida
Singapore
China
Beijing, Shanghai, Chengdu, Guangzhou
Hong Kong
Thailand
Bangkok
Malaysia
Kuala Lumpur
Australia
Melbourne, Sydney
Taiwan
Shinzu, Taipei
South-Korea
Seoul
4
World Leader in Image Processing• Large screen visualization (BarcoProjection)• Visualization for life critical decision-making
(BarcoView)• Visual inspection and quality control (BarcoVision)
BCD12%
BPI19%
BCI22%
Subc7%
dotrix1%
View25%
Vision14%
1H02
Projection
53%
5
Leading Edge Technology in Vertical Markets
Technologies
Markets
……
Vision
ATC
Defe
nse
Medic
al
Uti
litie
s
Tele
com
Bro
ad
cast
Surv
eill
ance
Media
Even
ts
Cin
em
a
Flig
ht
++
+
Oil
& G
as
Auto
moti
ve
Leis
ure
Texti
le
Food
View
Networking/Software/Systems
Image Processing
LCD CRT LED DLP Sensors
Control Rooms Media & Events Simulation
Avio
nic
s
Projection
6
BarcoProjection
BarcoVision
BarcoView
7
Market Overview
- Control Rooms
- Simulation Products- Virtual & Augmented Reality- Edutainment- Intelligent Displays
- Media- Events- High End Home Theater- Digital Cinema
Barco Control Rooms
Barco Projector Innovators
Barco Creative Imaging
8
Control Rooms• Expansion of application markets from Telecom
and Utilities towards Broadcast, Traffic, Surveillance
• Worldwide leader with 43% of market
9
Simulation and Virtual & Augmented Reality• Simulation
Flight, ATC, Ship Bridge, Drive, Gunnery
• V&ARVirtual Prototyping: Automotive, AECOil & Gas Molecular Modeling, Medical Scientific Research and Education
• EdutainmentMuseums, Science Centers, AquariumsTheme Parks and Leisure CentersPlanetariums
10
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
11
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
12
Media• Development and
production of LED display systems and peripheral equipment targeted at the specific needs of the media and sports markets
LED Wall for Coca Cola on Piccadilly Circus in London
LED Wall Reliant Stadium, Houston, Texas
13
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
14
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
15
BarcoProjection
BarcoVision
BarcoView
16
Market Overview
- Air Traffic Control- Defense
- Airborne- Naval- Landbased
- Medical Imaging- PACS- Modalities
- Avionics
Command & Control
Medical Imaging Systems
Avionics
17
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
18
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
19
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
20
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
21
BarcoProjection
BarcoVision
BarcoView
22
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)
23
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
24
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)
25
Innovators in image processing
Results third quarter
2002
26
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
EBIT % 7.7% 8.4% 1.4% 8.7%
27
Orders higher than Sales for 3rd consecutive quarter
* Results 2001 “pro forma” i.e. incl. dotrix n.v., Barco Graphics not consolidated
0
50
100
150
200
Q101 Q201 Q301 Q401 Q102 Q202 Q302
OrdersSalesEBI T
(in € million)
28
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 seasonAdditional 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
29
BarcoProjection (1)
0
10
20
30
40
50
60
70
80
90
100
Q101 Q201 Q301 Q401 Q102 Q202 Q302
Orders
Sales
EBI T
(in € million )
30
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
31
BarcoView (1)
-10
0
10
20
30
40
50
60
70
80
Q101 Q201 Q301 Q401 Q102 Q202 Q302
Orders
Sales
EBI T
(in € million)
32
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
33
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• Mainly Europe (80%) with market
leadership• Short term growth potential in
USA in ATC• Long term growth potential
in Security & Defense
ATC I ndustry74%
Security & Defense
2%
Others14%
Eurocontrol10%
34
BarcoVision
• Textile machine market in China and Turkey continues to go strong
• Sales weaker in Q3 due to seasonal effect
0
5
10
15
20
25
30
Q101 Q201 Q301 Q401 Q102 Q202 Q302
Orders
Sales
EBI T
(in € million)
35
Barco Subcontracting
• Increase in manufacturing with components in consignment results in lower sales but yields higher gross margin
0
5
10
15
20
25
30
Q101 Q201 Q301 Q401 Q102 Q202 Q302
Orders
Sales
EBI T
(in € million)
36
Geographical breakdown of Turnover per Activity (%)
EU Nafta Asia ROW
BarcoProjection 37 35 24 4BarcoView 28 57 13 3BarcoVision 60 11 17 12
Total Q302 42 35 19 5
Total 1H02 46 32 16 6
Total 2001 48 30 16 6
37
OWC: Inventory• Inventory on same level as end Q202 due to slack in deliveries
and in preparation of higher sales in Q402
in € million
143132
126 128119
0
20
40
60
80
100
120
140
160
End 01 Mar J une Sept Target Dec
38
OWC: Accounts Receivable
92
84
7580
0
10
20
30
40
50
60
70
80
90
100
End 01 Mar J une Sept
(incl. BG)
Days outstanding
39
Net cash position
67.8
5655.2
11.8
0
10
20
30
40
50
60
70
80
end 01 Q102 Q202 Q302
in € million
40
Results Q3 & YTD
in € million Q302 YTD02 Q301* YTD01*
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)
Curr. Res. after Taxes 8.4 31.1 1.1 29.4
Extra-Ordinaries 0 (28.1) 0 (0.4)
Amort. Of goodwill 1.4 3.6 1.7 5.1
Net result 7.0 (0.5) (0.6) 23.9
Current EPS** 0.68 2.51 0.09 2.37
Current cash Flow 23.7 77.5 15.8 74
*”pro forma”, i.e. incl. dotrix n.v., Barco Graphics not consolidated
** in euro
41
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
42
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
43
Innovators in Image Processing
www.barco.com