14 February 07, page 1 Company Confidential Results 4Q06 and FY06 Martin De Prycker, CEO 14 February...

14 February 07, page 1Company Confidential

Results 4Q06 and FY06

Martin De Prycker, CEO

14 February 2007


Operational results 4Q 2006 and full year 2006Operational results 4Q 2006 and full year 2006

in € million 4Q 2005 2005 4Q 2006 2006 Growth 4Q 06 / 4Q 05

Growth 06 / 05

Orders 196.5 730.4 195.9 817.7 -0.3% 12.0%

Sales 210.0 712.0 222.5 750.8 6.0%* 5.4%

EBIT 19.1 52.0 26.8 60.7 40.6% 16.7%

EBIT % 9.1 7.3 12.0 8.1

Book-to-bill 0.94 1.03 0.88 1.09

* 4Q06/4Q05 sales growth 9.5% at equal currency


Results 4Q 2006Results 4Q 2006


Results per quarterResults per quarter

0

50

100

150

200

250

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

OrdersSalesEBI TA

in € million


Overall comments 4Q 2006Overall comments 4Q 2006

Continued high order input in most of our activities

Strong sales growth of 6.0% vs 4Q05 (9.5% at constant currencies), with

– Growth in BarcoView and Control Rooms– Decline in Media & Entertainment

Book-to-bill at 0.88, due to strong sales

Gross profit margin at 41.5% stable vs 41.4%

EBIT negatively impacted with € 4.5 million, due to replacement of a new product introduced in Media & Entertainment

EBIT at € 26.8 million, 40.6% better than 4Q05


Evolution of results per divisionEvolution of results per division

in € million 4Q05 4Q06

Sales % EBIT Sales % EBIT

View 69.9 13.5 78.7 12.9

Media & Entertainment 61.6 -1.0 56.8 -5.8

Control Rooms 34.2 17.2 42.5 24.9

Presentation & Simulation 30.8 11.9 32.9 16.2

Vision 13.0 10.9 13.4 18.8

Manufacturing Services 21.6 -3.3 26.1 5.7

Eliminations -21.0 -27.8

Total 210.0 9.1 222.5 12.0


BarcoView (1)

0

10

20

30

40

50

60

70

80

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

OrdersSalesEBI TA

in € million


BarcoView BarcoView (2)(2)

Orders – Book-to-bill ratio at 0.98– Orders growing with 53.1% vs 4Q05 in medical with a very

successful RSNA show in Chicago, in defense with further confirmation of order improvement and in avionics. Traffic Management remains weak

Sales– Sales growth of 13%– Strong sales growth in medical confirms our market

leadership– Defense sales flat vs 4Q05 – Avionics sales slightly higher than 4Q05– Traffic Management strongly declining, with stable high

market share

Margins– Gross profit margin at 44.7% vs 51.8%, much lower than last

year, due to volume and price decline in traffic management display

– Good profit margin stable at 12.9% vs 13.5% in 4Q05

Impairment of € 10.4 million on Voxar acquisition (2004)– Slower market acceptance of 3D software, resulting in lower

sales than anticipated


Barco Media & Entertainment Barco Media & Entertainment (1)(1)

-10

0

10

20

30

40

50

60

70

80

90

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

OrdersSalesEBI TA

in € million


Barco Media & Entertainment Barco Media & Entertainment (2)(2)

Orders– Book-to-bill ratio at 0.77– Orders 38% lower than 4Q05

Media orders much lower than 4Q05 Lower orders in Events, yet strongly above quarterly average of

2006 Orders in Digital Cinema slightly lower than 4Q05, but the outlook

for DC in 2007 looks better

Sales– Sales 8% lower vs 4Q05

Events sales lower vs 4Q05 Strong sales growth in media DC sales lower than last year, mainly because of slower than

anticipated roll out outside US

Margins– Gross profit margin at 23.9% vs 22.8 %, better than last year– Profit margin weak at -5.8%, due to a provision of € 4.5 million

for the replacement of a new product in media. Operational profit margin (excluding exceptional provision) at +2.1 %


Barco Control Rooms Barco Control Rooms (1)(1)

0

5

10

15

20

25

30

35

40

45

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

OrdersSalesEBI TA

in € million


Barco Control Rooms Barco Control Rooms (2)(2)

Orders– Book-to-bill at 0.76, lower than 4Q05, mainly because of

extremely high sales volume– Orders flat vs 4Q05

Sales– Sales in all market segments strongly growing vs 4Q05

supported by a streamlined supply chain

Margins– Gross profit margin decreased to 46.2% vs 48.3 % in 4Q05,

due to some large projects with lower margin– Very good profit margin at 24.9% vs 17.2% in 4Q05, thanks to

very high sales volume


Barco Presentation & Simulation Barco Presentation & Simulation (1)(1)

0

5

10

15

20

25

30

35

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

OrdersSalesEBI TA

in € million


Barco Presentation & Simulation Barco Presentation & Simulation (2)(2)

Orders– Book-to-bill at 0.96– Orders declined slightly vs 4Q05, both in Corporate AV and

Simulation– Important reference order for the new LCOS projector

received from CAE for their future simulator family

Sales– Sales increased vs 4Q05, both in Corporate AV and

Simulation– Simulation strongly recovered in US after a weaker first year

half– Corporate AV market remains extremely strong in China

Margins– Gross profit margin at 43.9 % vs 39.9% in 4Q05– Very good profit margin at 16.2%, higher than 11.9% in

4Q05


BarcoVision BarcoVision (1)(1)

0

2

4

6

8

10

12

14

16

18

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

OrdersSalesEBI TA

in € million


BarcoVision BarcoVision (2)(2)

Sales & Orders– Book-to-bill ratio at 1.02– Orders and sales in textile slightly better than in 4Q05

Margins– Gross profit margin stable at 50.9% vs 50.6% in 4Q05– Profit margin much better at 18.8% vs 10.9% in 4Q05

Divestment process started


Barco Manufacturing Services (1)Barco Manufacturing Services (1)

-5

0

5

10

15

20

25

30

35

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

OrdersSalesEBI TA

in € million


Barco Manufacturing Services Barco Manufacturing Services (2)(2)

Sales & Orders– Sales and orders much stronger than 4Q05, thanks to large

internal orders from all Barco divisions for delivery in 4Q06 and 1Q07

Margins– EBIT margin much better at 5.7% vs -3.3 % in 4Q05, thanks

to lower cost and high volume– Sale of Electronic Manufacturing Services to IPTE and Prints

to Elprinta finalized and signed– Discussions with partners for Mechanical business unit are

ongoing– Negative impact of sale to IPTE and Elprinta: € 1.4 million

non-operating result before taxes


Geographical breakdown of salesGeographical breakdown of sales

35,3%

43,7%

21,0%EMEAAMERICAS ASIAPAC.

4Q06

4Q05

34,5%

44,7%

20,8%


Key figures Income Statement 4Q06Key figures Income Statement 4Q06

in € million 4Q05 % 4Q06 %

SalesCost of goods sold

210.0-123.1

100.0-58.6

222.5-130.1

100.0-58.5

Gross ProfitResearch & DevelopmentSales & MarketingGeneral & AdministrationOther operating result

86.9-18.8-30.6-13.0

-5.4

41.4-9.0

-14.6-6.2

-2.6

92.4-16.7-31.4-14.7

-2.9

41.5-7.5

-14.1-6.6-1.3

EBITGoodwill

19.1-4.0

9.1-1.9

26.8-11.5

12.0-5.2

Operating Result 15.1 7.2 15.3 6.9

Non-operating result 1.8 0.9 -1.8 -0.8

Income Taxes -3.3 -1.6 -5.4 -2.4

Net Income 13.7 6.5 8.1 3.6

Current Cash Flow 31.2 14.9 34.2 15.4

Current Earnings per Share (in €) 1.22 1.70

Net Earnings per Share (in €) 1.12 0.67


Results Full Year 2006Results Full Year 2006


Operational results full year 2006Operational results full year 2006

in € million 2005 2006 Growth 06/05

Orders 730.4 817.7 12.0%

Sales 712.0 750.8 5.4%

EBIT 52.0 60.7 16.7%

EBIT % 7.3 8.1

Book-to-bill 1.03 1.09


Headlines 2006Headlines 2006

Strong growth in sales (5.4%), orders (12.0%) and profit (16.7%), thanks to our focused approach on growth markets, mainly in

– Medical Imaging– Control Rooms– Events

Keeping our gross margin stable at 41.3% with a larger product portfolio

Improving our profit margin to 8.1% in 2006 vs 7.3% in 2005

Investing in growth markets– Digital Cinema– Media– Avionics– Simulation


Evolution of results per divisionEvolution of results per division

in € million 2005 2006

Sales % EBIT Sales % EBIT Sales Growth 06/05

View 236.0 10.5% 248.2 9.0% 5.2%

Media & Entertainment 188.3 -0.2% 216.8 1.2% 15.1%

Control Rooms 117.4 13.1% 126.6 12.9% 7.8%

Presentation & Simulation 103.2 6.8% 111.7 8.4% 8.2%

Vision 57.8 14.0% 55.5 11.3% -4.0%

Manufacturing Services 93.4 -3.2% 86.4 4.4% -7.5%

Total 712.0 7.3% 750.8 8.1% 5.4%


BarcoView 2006BarcoView 2006

Orders– Strong growth in orders (27%) vs 2005 with book-to-bill ratio of 1.16– Strongly growing orders in medical and avionics vs 2005, building up an

order book for 2007 and beyond– Defense orders picking up again after a weak 2005 with a growth of

18%– Traffic Management orders declining in 2006 vs 2005, with major LCD

upgrade projects being postponed

Sales– Growth in sales of 5%– Strong growth in medical, both in PACS and modality, but flat in 3D

software– Defense sales slightly declining (3%) vs 2005– Avionics continued to grow as a result of the strong order book built

over the last years– Traffic Management sales strongly declining, but keeping our market

share in a slow market

Margins– Gross profit margin declining from 47.1% to 44.4% due to a different

product mix and price erosion in traffic management displays– EBIT margin declined from 10% to 9% due to a lower gross profit

margin. Growth in sales volume faster than growth in indirect cost, partially compensating this lower gross profit margin

Impairment of € 12.0 million on Voxar acquisition– Slower market acceptance of 3D software, resulting in lower sales than

anticipated


Barco Media & Entertainment 2006Barco Media & Entertainment 2006

Orders– Orders growing with 17% vs 2005, with a book-to-bill ratio of 1.12– Orders in Events growing vs 2005, in line with the positive trend in the

market– Orders in Media flat, including a large order in Dubai – Orders in Digital Cinema strongly growing, as the Digital Cinema market

expanded

Sales– Sales growing with 15% vs 2005– Sales in Events strongly growing with 13%– Media sales flat vs last year– Digital Cinema sales growing with 25%, but not as fast as orders, as the

roll out is not yet running at full speed

Margins– Gross profit margin slightly improved to 29.4% vs 28.6% in 2005– Growth in sales and growth of absolute gross profit resulted in a

moderate profit growth, because of exceptional items related to new product warranty issues. Actions have been taken to avoid these issues in the future

– EBIT margin switched from slightly negative to slightly positive


Barco Control Rooms 2006Barco Control Rooms 2006

Orders– Orders growing at a moderate pace of 3% with a book-to-bill

ratio of 1.0

Sales– Sales growing 8% vs 2005, in all segments of the market,

with some supply chain issues in 1Q06, but completely solved afterwards

Margins– Gross profit margin declining from 45.3% to 43.2%, mainly

because of end of life of a product and the resulting inventory write down

– EBIT margin stable at 12.9%


Barco Presentation & Simulation 2006Barco Presentation & Simulation 2006

Orders– Orders slightly growing with 1% vs 2005, with a book-to-bill

of 1.02– Orders in Corporate AV growing vs last year and declining in

Simulation, but Simulation recovering from a weaker first half. Positive market reaction to new LCOS projectors built foundation for future growth

Sales– Overall sales growing at 8% vs 2005– Corporate AV market growing with 16%, thanks to growing

market share, as new products are positively accepted in the market

– Simulation slightly down, recuperating from a weaker first half

Margins– Gross profit margin stable at 41.9%– EBIT margin improving to 8.4% vs 6.8%, thanks to increased

volume


BarcoVision 2006BarcoVision 2006

Orders– Increasing with 4% vs 2005, with a shift from open end to

ring spinning sensors– Book-to-bill at 1.04

Sales– Declining moderately (4%) vs 2005, with the same product

shift as for the orders

Margins– Gross profit margin remaining stable at 47.6% vs 47.2% in

2005– EBIT margin lower at 11.3% vs 14.0% last year, which was

positively influenced by a one time sale of buildings


Barco Manufacturing Services 2006Barco Manufacturing Services 2006

Orders– Strongly growing orders, as internal demand for new

products is picking up, especially in the second half of the year

– Book-to-bill at 1.21

Sales– Sales declining, especially in the first half, but recovering in

the second half

Margins– EBIT margin strongly improving vs 2005, thanks to a strong

cost reduction program and restructuring done in 2005

Divestment of 2 of the 3 business units finalized; for the third business unit, discussions with interested partners are ongoing

Negative impact of sale to IPTE and Elprinta (€ 1.4 million non-operating result before taxes)


Key figures Income Statement 2006Key figures Income Statement 2006

in € million FY 05 % FY 06 %

SalesCost of goods sold

712.0-419.8

100.0-59.0

750.8-440.4

100.0-58.7

Gross ProfitResearch & DevelopmentSales & MarketingGeneral & AdministrationOther operating result

292.2-67.7

-114.8-52.7

-4.9

41.0-9.5

-16.1-7.4-0.7

310.4-69.2

-120.3-55.3

-4.9

41.3-9.2

-16.0-7.4-0.7

EBITGoodwill Impairment

52.0-4.0

7.3-0.6

60.7-13.1

8.1-1.7

Operating Result 48.0 6.7 47.6 6.3

Non-operating result 0.9 0.1 -2.4 -0.3

Income Taxes -10.3 -1.5 -11.8 -1.6

Net Income 38.6 5.4 33.3 4.4

Current Cash Flow 98.0 13.8 104.2 13.9

Current Earnings per Share (in €) 3.25 3.91

Net Earnings per Share (in €) 3.15 2.76


Key figures Balance SheetKey figures Balance Sheet

in € million 31/12/05 30/06/06 31/12/06

Accounts Receivable 188.8 175.2 218.6

Inventory 141.4 167.0 146.7

Cash 106.3 83.4 81.4

Financial debt 84.3 81.3 93.8


Geographical breakdown of salesGeographical breakdown of sales

33,5%

47,9%

18,7%

EMEAAMERICAS ASIAPAC.

2006

200533,1%

48,9%

18,0%


Expectations 2007Expectations 2007


Outlook 2007Outlook 2007

Focus our company on growth markets with– Main segments where significant organic growth is expected

Medical Control Rooms Events Digital Cinema

– Further growth in NA and APAC expected

Comparable sales growing stronger organically than in 2006, but not yet double digit

Increase profitability through higher operational efficiency

Finalize our focusing exercise on selected professional markets by divesting BarcoVision and the remaining part of Manufacturing Services


DividendDividend

Proposal of the Board of Directors to the annual shareholders’ meeting on April 26, 2007

Dividend will be increased to € 2.30 vs € 2.15 last year, resulting in

Pay out ratio of over 80%

Gross dividend yield around 3.4%


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