EBIT 2002 Grows 32 % Year on Year with Sales at Same Level as 2001

Kortrijk, Belgium, February 26, 2003 – Barco (Euronext: BAR; Reuters: BARBt.BR; Bloomberg: BAR BB) today announced results for the three- and twelve-month periods ended December 31, 2002.

Fourth quarter 2002
Consolidated sales for the quarter rose year-over-year by 7.7 percent to Euro 194.9 million, from Euro 180.9 million for the same period of 2001. This was mainly due to increases in sales for the quarter of 40 percent at BarcoView and 14 percent at BarcoVision. For the quarter, BarcoView and BarcoVision represented 36 and 13 percent, respectively, of consolidated sales.

Asia Pacific posted strong sales in the fourth quarter with 22 percent of consolidated sales.  30 percent of sales were realized in the Nafta region, and 41 % in the European Union.

Whereas for the first 3 quarters of 2002 the book-to-bill ratio was higher than sales, with total orders at Euro 159 million, this was not the case for the fourth quarter. Orders in the Fourth quarter were down 2.6 percent versus the same period of 2001.

Gross margin on variable cost was at 55.9 percent. Operating working capital went further down, with inventory decreasing from Euro 128 million to Euro 110 million and accounts receivable from 80 to 70 DSO over the fourth quarter. Net cash increased from Euro 67.8 million to 88.1 million.

Consolidated EBIT for the quarter nearly tripled to Euro 32.2 million, from Euro 11.6 million for the fourth quarter of 2001. Consequently, EBIT margin for the quarter was 16.5 percent, compared with 6.4 percent for the fourth quarter in 2001.

Consolidated net result for the fourth quarter rose year-over-year from Euro – 87.9 million to Euro 22.2 million.. Current earnings per ordinary share (EPS) for the quarter were Euro 2.1, compared with EPS of Euro 0.78 for the same quarter of 2001.

Full year 2002
For full year 2002, consolidated sales declined year-over-year by approximately one percent to Euro 669.1 million, from Euro 673.4 million for fiscal year 2001. Excluding the negative impact of the depreciation of the USD against the Euro for the year, consolidated sales would have been two percent higher. For full year 2002, 45 percent of Barco’s consolidated sales were in USD or USD linked currencies. On the other hand Barco has operational costs and buys components in USD for more than 60 percent of its USD income, thus reducing the negative impact of the currency rate of the USD.

By region, sales to Nafta region (US, Canada and Mexico) and Asia rose to 32 and 18 percent, respectively, of consolidated sales. This was the result of the efforts made by the Company to increase the relative importance of sales to those regions. In full year 2001, North America and Asia represented 29 and 17 percent, respectively, of consolidated sales. Orders for the year declined year-over-year by approximately one percent. Orders would also have been two percent higher excluding the impact of the depreciation of the US currency against the Euro, Barco’s reporting currency. The order book at the end of 2002 increased to Euro 245.1 million from Euro 240.6 million one year before.

Consolidated gross margin remained strong at 55.2 percent. Consolidated operating costs for the year declined year-over-year by 7 %. Investments in tangible fixed assets were reduced from Euro 32.1 million to Euro 16.8 million in 2002, reducing depreciation of tangible fixed assets by Euro 2.9 million. Investments in Research & Development remained high at 10.7 % of consolidated sales, continuing the renewal of Barco’s product and solution portfolio.

Operating working capital was significantly reduced by increased efficiency: inventory was lowered by 29 % and accounts receivables by over 5 % year on year. Better management of inventory and accounts receivable reduced the level of write-offs from Euro 29.3 million in 2001 to Euro 14.4 million in 2002. On December 31, 2002, the Company’s net cash position further improved to Euro 88.1 million.

EBIT for the year increased by 32.3 percent to Euro 72.1 million, from Euro 54.5 million for fiscal year 2001, reflecting the strong increase in profitability registered in the final quarter of the year. Current result before tax and before amortization of goodwill even increased by 35 % to 73.4 million euro, or 11 % of sales over 2002. The current result after taxes evolved from 39 million euro to 57.3 million euro, bringing current EPS up from 3.1 to 4.6 euro. The net result over 2002 is 21.6 million euro, compared to – 64.1 million euro over 2001. Negative extra-ordinary results of 2002 of Euro 28.2 million were mainly due to the reduction of the participation of Barco in Esko-Graphics and the write-offs on the remaining investments in Esko-Graphics, Mania and ManiaBarco. The remaining financial investments in these companies are Euro 19.2 million.

Dividend payment for fiscal year 2002
The Company’s Board of Directors will propose to the General Shareholders’ Meeting to be held on May 14, 2003, the payment of a dividend of Euro 1.92 per ordinary share compared to Euro 1.88 over 2001. The dividend will be payable as of May 28, 2003.

Outlook for first quarter and remainder of fiscal year 2003
For the first quarter of 2003, Barco expects consolidated sales to be flat or rise slightly to Euro 150-155 million, despite the negative impact of 8 % on revenues due to the strength of the Euro against the US dollar. Sales growth for the quarter should be driven by medical imaging and Air Traffic Control (ATC) systems, while demand for products for the textile market is also expected to remain strong. At the same time, lower sales are expected year-over-year in media and in simulation products for the civil aviation market. However, new products in Media, Control Rooms and Simulation, which will be available in the second quarter of 2003, will lead to sales picking up later in the year. EBIT margin for the first quarter is expected to slightly improve year-over-year.

Predictability beyond the first quarter of 2003 remains poor. Organic growth may be offset by weakness in the US dollar – Euro exchange rate and other external factors. Consolidated EBIT margin is expected to benefit from stable gross margin and continued cost control. Despite an increase in the effective tax rate for fiscal year 2003, Barco expects to see a strong year-over-year rise in net EPS, as no exceptional charges are anticipated with respect to the Company’s participation in Esko-Graphics. Inventory and accounts receivable are also expected to decrease further, thus improving operating working capital.

Barco’s strategy for 2003 and beyond
For fiscal year 2003 and beyond, Barco will expand in three dimensions. The company will increase its focus on geographical regions that are still growing strongly, or where its market share in some vertical markets can be further expanded. Barco will also continue to move from products to system solutions. Furthermore, Barco will extend its leadership in vertical markets like Media & Entertainment, Control Rooms, Simulation, Medical, Defense & Security, ATC and Textile into new segments of these markets. The company will also see additional growth from leading edge products in new markets, for example the digital cinema market.

All comparisons with the results of 2001 included in this press release relate to the pro forma results for 2001. These pro forma results are excluding the results of former Barco Graphics and including the results of dotrix nv.

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.

Please see attached for:
- Key Figures Q402 
- Key Figures 2002

We refer to www.barco.com for balance sheet after appropriation, income statement and text “Evolution of the Results” in the annual report 2002 on this site.

About Barco
Barco, an international company headquartered in Kortrijk, Belgium, is active in three key areas of imaging technology. Barco designs and develops solutions for large screen visualization, display solutions for life-critical applications, and systems for visual inspection. Barco has a network of subsidiaries, distributors and agents in almost 100 countries. Barco is quoted on Brussels/Euronext, is a BEL 20 and a Next 150 company, and is a member of the Dow Jones Sustainability Indexes. You can find more information about BARCO on the web: http://www.barco.com

 

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