Barco Results 2002

1
Barco Results 2002

• 26 February 2003
• Herman Daems, Chairman
• Martin De Prycker, President CEO
• Antoon Van Petegem, CFO
• JP Tanghe, VP Corp. Com. Inv. Rel.

2
Q402 Operational Results
in mio Q402 2002 Q401 2001
Orders 158.9 680.7 163.1 688.5
Sales 194.9 669.1 180.9 673.4
EBIT 32.2 72.1 11.6 54.5

EBIT 16.5 10.8 6.4 8.1
3
Q402 Record Sales and Profit, but Lower Orders
in mio
Results 2001 pro forma i.e. incl. dotrix, Barco
Graphics not consolidated
4
Q402 Comments

• Weaker orders at 158.9 M, but order book
  increased from 240.6 M end 2001 to 245.1 M end
  2002
• Sales strong
• Strong demand for immediate supply, especially in
  events and medical
• Yield problems largely solved with external
  suppliers, allowing us to substantially reduce
  backlog
• Gross margin remained strong at 55.9
• EBIT
• Overall strong performance in all divisions, as
  our cost base remained almost stable vs Q3,
  except for additional sales people and
  acquisitions

5
2002 Operational Results
in mio Q402 2002 Q401 2001
Orders 158.9 680.7 163.1 688.5
Sales 194.9 669.1 180.9 673.4
EBIT 32.2 72.1 11.6 54.5

EBIT 16.5 10.8 6.4 8.1
6
2002 Full Year

• Orders and sales decreased with less than 1
• Dollar effect at same average / rate, sales
  and orders would have been 2 higher
• Gross margin remained stable vs 2001
• Operational cost reduced by 19.2 M vs 2001
• EBIT increase by 32.3 from 54.5 M to 72.1 M

7
Variance Analysis of Operational Profit
2001 2002 Variance Comments
Sales 674.1 669.0
Margin 374.1 369.4 -4.7 Sales/mix
Operational cost -212.4 -203.0 9.4 Reduced oper. cost
Strategic cost -61.8 -52.0 9.8 Reduced strat. cost
Depreciation tangible / software -23.4 -20.3 3.1 Less depr. tangible
Capitalization/ amortization RD 8.2 -1.6 -9.8 Less capitalization RD
Write-offs provisions -29.3 -14.4 14.9 Less write-offs / provisions
Other financial results -0.9 -6.0 -5.1 Mainly USD (A/R, inventory)
EBIT 54.5 72.1 17.6
8
Overview of RD Investments
in mio 2001 2002
Total RD 78.7 71.4
Capitalized (41.2) (38.4)
Amortized Total 33.0 70.5 40.0 73
9
Geographical Breakdown of Sales
Sales Barco Group 2001
Sales Barco Group 2002
Sales Barco Group Q4 2002
10
Sales per Region

• Emphasis on NA and Asia has paid off with large
  growth in US, China, Taiwan and Middle East
• European market has been weak overall,
  particularly in France, Germany and UK

11
Sales per Division
in mio
12
BarcoProjection
in mio
13
BarcoProjection Control Rooms

• Success in Broadcast and Security did not fully
  compensate decline in Telecom
• Worldwide leader with 43 of market
• New DLP based solution introduced E2002

in mio
14
BarcoProjection Simulation

• Simulation
• Slowdown in training for civil aviation
• VAR
• US market share increased
• Clear progress in automotive and oil gas
  markets
• Growth in edutainment market
• Stand alone projector success in vertical markets
  resulted in stable revenues 2H vs 1H, but lower
  than 2001

in mio
15
BarcoProjection Media Entertainment

• World leader in events with 40 market share
• Breaking through in media with 7 market share
• Digital Cinema stable market share in slowly
  developing market

in mio
16
BarcoView
in mio
17
BarcoView Medical

• Further success in a growing PACS market
• Successful introduction of new LCD product range
• Introduction of lifelong quality assurance
  software

in mio
18
BarcoView Command and Control
in mio

• Worldwide acceptance of ATC display resulting in
  sales growth from 26 to 39.5 M and orders from
  33 M to 68 M
• Decline in defense sales due to reallocation of
  budgets to direct cost of war

19
BarcoVision

• Textile machine market in China and Turkey
  continues to go strong
• Machine Vision profit margin slightly positive

in mio
20
Barco Subcontracting

• Lower sales but higher added value results in
  higher gross margin, but sligthly lower profit
  margin due to restructuring costs

in mio
21
OWC Inventory

• Inventory control further pays off

in mio
22
OWC Accounts Receivable

• Lower DSO than target, with good credit control
  and improved quality

DSO
23
Net Cash Position
in mio
24
Results Q4 2002
in mio Q402 2002 Q401 2001
EBIT 32.2 72.1 11.6 54.5
Current result 32.7 73.4 12.1 54.4
Taxes -6.5 -16.0 -2.4 -15.3
Curr. res. after taxes 26.2 57.3 9.7 39.0
Extra-ordinaries -0.1 -28.2 -95.9 -96.3
Amortization of goodwill -3.9 -7.5 -1.7 -6.8
Net result 22.2 21.6 -87.9 -64.1
Current EPS 2.1 4.6 0.78 3.1
Current cash Flow 40.1 117.6 21.4 95.5
Net EPS 1.79 1.74 -7.09 -5.16

pro forma, i.e. incl. dotrix, Barco
Graphics not consolidated in
25
2002 Evolution Share Price Barco / Bel 20 / Next
150
26
2002 Evolution Share Price Barco / Eurostoxx 50 /
Eurostoxx Technology
27
2003 Q1 Expectations

• Revenue Q1 03 versus Q1 02
• Flat to slight growth (150-155 M). At equal /
  rate, this would have resulted in an increase of
  8 on sales (18 decline for 45 related sales)
• Growth in medical and ATC continues
• Temporary decline in Q1 in Projection Systems,
  mainly due to lower sales in Media and civil
  aviation
• Orders in Projection are expected to pick up
  again thanks to new Media and Simulation products
• Demand in textile machine market remains high
• EBIT margin
• Slight improvement versus Q1 2002
• Lower cost base in operations partly offset by
  higher sales costs

28
2003 Expectations

• Revenue
• Lower predictability due to uncertain market
  conditionsInternal growth 2003/2002, especially
  in Medical, ATC and Media. This may be offset by
  lower / rate
• Operating profit
• EBIT margin is expected to benefit from stable
  gross margins and cost control
• Net EPS
• Strong increase as a result of no anticipated
  exceptionals from Esko-Graphics and despite
  increase of effective tax rate
• Operating working capital
• Further reduction of inventory and A/R after
  strong reduction in 2002
• A/R reduction to 68 DSO
• Inventory reduction to 4.5 months of sales

29
Dividend

• Proposal of the Board of Directors to the annual
  shareholders meeting on May 14, 2003
• Dividend will be increased to 1.92 from
• 1.88 last year

30
Mission

• To be world leader in visualization and image
  processing solutions in professional markets

31
Strategy Expand in 3 Dimensions
Vertical Markets
EU
Products Solutions
NA
APAC
Geographies
32
Expand in Vertical Markets (1)

• Keep world leadership position in markets and
  extend them into new market segments
• Media Entertainment
• Control Rooms
• Simulation

• Media
• TAM 335 M
• MS 7

• Events
• TAM 191 M
• MS 40

• Traffic Surveillance
• Broadcast
• TAM 83 M
• MS 23

• Utilities
• Telecom
• TAM 106 M
• MS 65

• Oil Gas
• Design Centers
• Entertainment
• TAM 110 M
• MS 22

• Airplane
• Simulation
• TAM 100 M
• MS 40

33
Expand in Vertical Markets (2)

• Medical
• Defense Security
• Air Traffic Control

• Modalities in displays algorithms
• TAM 500 M

• PACS
• Visualizations
• MS 50

• Homeland security
• Controlware
• TAM 550 M

• Naval
• Airborne
• MS 14

• Controlware
• (Orthogon)
• TAM 180 M

• Visualization
• MS 35

34
Vertical Markets (3)

• Develop leading edge products for new markets
• Digital Cinema mid end product to be introduced
  in 2003 and penetrate this market with our
  current products
• Consolidate our world leadership position in
  textile sensor system market where we own above
  40 market share

35
Strategy 2003 Geographical Markets

• Focus on markets which are still strongly growing
  or where we still have a smaller market share in
  some vertical markets
• US / Canada
• China / South Korea / Japan
• Eastern Europe

36
Sales / GDP
37
Questions and Answers