Current result before taxes decreases by 48% with slight increase in turnover

Kortrijk, March 6, 2002. The current result before taxes and before amortization of consolidation goodwill for 2001 amounts to € 48.4 million, as compared to € 92.6 million in 2000. Thus the decline was limited to 48%. In early December 2001 Barco still expected a decrease of more than 50%. This current result was adversely affected by the losses suffered by Barco Graphics and the additional write-offs on stocks, mainly for BarcoProjection. There was a rise in turnover of 5.4% to € 791.9 million, as compared to the turnover in 2000 of € 751.1 million. With a current result after taxes of € 34.2 million, Barco remains a profitable undertaking, though the net result shows a loss of € 75.3 million due to € 109.5 million in exceptional costs and normal amortization on goodwill. The exceptional costs include additional goodwill write-offs on the acquisitions of Barco Graphics and Machine Vision, the write-off of the participation in Xeikon, the costs for the splitting off of Barco Graphics, and other restructuring costs.

In the course of 2001 Barco shifted its strategic focus to image processing, with primary emphasis on system activities offering customers total solutions. In terms of turnover and current results, these system activities clearly surpassed expectations in 2001. Barco expects these activities to boost future growth.

Therefore the Board of Directors will propose to the General Meeting that the dividend be kept at the level of the past three years, which means setting it once again at € 1.88 . The dividend will be payable as of 22 May 2002.

The decline in the results is a consequence both of economic and structural factors. The worldwide economic recession which began in the second quarter, continued and even worsened in the second half of the year. Accordingly, the volume of orders fell in the second semester by more than 18% in comparison with the first half of the year, when there was an increase in orders of 11% compared to the same period in 2000. One-third of the decline in orders in the second half of 2001 was attributable to Barco Graphics. The 14% growth in turnover in the first half was largely undone in the second semester. The growth which became evident in the first half of 2001 led to the establishment of an expenditure structure aimed at supporting the anticipated continued growth. This translated into the building up of stocks and the recruitment of additional employees. This had a negative effect on the results of stand alone projectors in particular, where sales declined considerably from the end of the second quarter onward.

On the other hand, structural factors also play a role. The development of the results varies greatly in the different Barco business units. The system activities focused on offering total solutions for image processing continue largely to exceed expectations in terms of turnover and current results. This confirms the strategy initiated by Barco in 2001 on the basis of which the company is concentrating on image processing. As of 2002, the company will begin reaping the initial benefits of this strategy. Indeed, the business units within BarcoProjection, BarcoView and BarcoVision that are meeting customers’ new needs with a systems approach will in the future form the strategic basis of Barco current results. Moreover, in the development of stand alone projectors, BarcoProjection will focus on high-end products for applications requiring high performance.

In the mean time the necessary measures have already been taken to lower the operating costs in 2002 by more than € 10 million annually. The number of employees worldwide has been reduced by 370. Only half of the planned investments for 2001 were carried out, and IT expenditures were drastically cut back. At the same time, € 20 million in additional write-offs on stocks were posted for 2001.

2001 is also the year in which the deconsolidation of Barco Graphics was set into motion. The ETS business unit was incorporated into ManiaBarco GhbH, in which Barco retains a 33% interest. Within the context of this operation, Barco also acquired 11% of Mania Technologie AG shares. Since 1 July 2001, ETS results are no longer being consolidated into Barco results. Packaging Systems and Commercial Printing will join with the Danish firm Purup-Eskofot to form a new company in which Barco will retain a 49% interest. The smallest business unit, Industrial Printing, was incorporated into dotrix n.v., in which Barco currently holds an 88% interest. The intention is to involve one or more financial partners in dotrix n.v. Barco expects that in time these new companies will make a positive contribution to the results.

In view of the lack of a marked improvement in the economic situation, in 2002 Barco is expecting to achieve a turnover comparable to that of 2001, taking into account the deconsolidation of Barco Graphics. Through the measures already taken, the goal is to achieve a higher current result in comparison with 2001. Indeed, the operating costs were considerably lowered, important write-offs on stocks were posted in 2001, and the gross margins were increased by improving the internal processes.

Key Figures




(1)  result without extraordinary results and depreciation of consolidation goodwill on acquisitions
(2)  current result after taxes + amortization & depreciation
(3) without consolidation goodwill on acquisitions
(4) investments and cash reduced with debts on more than one year, debts on more than one year which expire within one year and financial debts
(5) from 1996 onwards: liquidities

The statutory auditor has confirmed that his auditing activities, which have been thoroughly carried out, did not uncover any meaningful correction that would need to be included in the accounting information incorporated in this press release.

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