Annual Report • Mar 6, 2012
Annual Report
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. team . vision . image . culture . goal . future . billion .
Barco has a team of 3,500 dedicated professionals.
Barco leads the way in digital visualization for professionals.
Barco stands for innovation, quality and customer intimacy.
Barco shares a common set of seven strong values.
Barco aims for global leadership in all its target markets.
Barco continuously invests in new technologies.
Barco is a one billion euro revenue company.
Barco displays play a vital role in keeping air traffic safe for millions of passengers day after day.
Barco projectors create magical movie experiences for millions of moviegoers each night.
| 06 | |||||
|---|---|---|---|---|---|
| $\overline{0}8$ | 07 | 06 | |||
| O7 | $\cup$ $\odot$ | 05 | |||
| $\overline{06}$ | $05\,$ | 04 | |||
| O7 | $06\,$ | ||||
| 08 | $07$ |
Barco display cubes enhance collaboration and process efficiency in thousands of control rooms around the globe.
Barco displays help provide quality care to millions of patients day and night.
24-37
| KEY FIGURES YEAR IN REVIEW LETTER FROM THE CHAIRMAN & THE CEO |
||
|---|---|---|
| Company profi le | 26 | |
| Our strengths | 30 | |
| Our strategy | 32 | |
| Our objectives | 34 | |
| Our awards | 35 |
| The most precise mammography | |
|---|---|
| display system | 41 |
| The smallest seams on the market | 41 |
| The most intuitive cockpit display | 41 |
| The brightest QXGA projector | |
| for training and simulation | 42 |
| The world's brightest 4K cinema projector 42 | |
| The smartest projector on the road | 42 |
| The coolest 3D video wall | 43 |
| The most energy-effi cient | |
| indoor LED display | 43 |
| The most fl exible networked OR solution | 43 |
| Reducing the ecological | |
|---|---|
| footprint today and tomorrow | 46 |
| Engaging suppliers to go green | 46 |
| Long-lasting social change | 47 |
| Sponsored bike ride against cancer | 47 |
| Supporting technical education | 47 |
| Facilitating social inclusion | 48 |
| Giving earthquake victims a helping hand 48 | |
| Holiday gifts for homeless students | 49 |
| Partner of the Belgian Paralympic Team | 49 |
| HARMAR DE COR | ||||||||
|---|---|---|---|---|---|---|---|---|
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| the property states STATISTICS |
50-75
| Entertainment | 52 |
|---|---|
| Healthcare | 58 |
| Control Rooms & Simulation | 62 |
| Defense & Aerospace | 66 |
| LiveDots | 71 |
|---|---|
| High End Systems | 72 |
| dZine | 73 |
| Orthogon | 74 |
| Silex | 75 |
| Board of directors | 80 |
|---|---|
| Core Leadership Team | 82 |
| Corporate governance statement | 84 |
| Comments on the results | 94 |
| Information about the share | 104 |
| Income statement | 112 |
|---|---|
| Balance sheet | 114 |
| Cash flow statement | 116 |
| Changes in equity | 117 |
| Notes to the consolidated | |
| financial statements | 123 |
| Auditor's report | 165 |
| BARCO NV | 166 |
|---|---|
| Balance sheet after appropriation | 167 |
| income statement | 168 |
| Proposed appropriation of Barco NV result | 168 |
| Contact information | 169 |
1 FEBRUARY 10 FEBRUARY 7 MARCH
| 26 January | » Brand-new line of LED-backlit LCD displays for control rooms |
|---|---|
| 1 February | » Launch of 3D-capable 14K lumens events projector |
| 10 February | » Exclusive partner of the Berlin International Film Festival |
| 4 March | » XDC CineStore joins Barco |
| 7 March | » First main display with replaceable LED backlights for Air Traffic Control |
| 8 March | » ATC software selected for Doha International Airport |
18 MAY 21 JUNE
New breast tomosynthesis display system Twice the brightness of traditional mammography displays with the new Mammo Tomosynthesis 5MP
Selected by Alenia Aermacchi
| 27 April | » Digital Cinema financing program further expanded |
|---|---|
| 18 May | » First display system for breast tomosynthesis |
| 16 June | » Future Touch Screen Control technology presented at Paris Air Show |
| 21 June | » Advanced trainer jet simulator selected by Alenia Aermacchi |
| 24 June | » Avionics displays preferred choice for new military Airbus |
| 13 July | » Delivery of the world's first commercial dual 4K DLP Cinema® projection system |
Joint venture with China Film Group
The CD-2260 collimated display system provides an unobstructed 225° horizontal field of view.
| 23 August | » Joining forces with China Film Group to develop Digital Cinema in China |
|---|---|
| 7 September | » FSN video presentation system enhances live broadcasts at |
| University of California Law School | |
| 12 September | » Extreme displays chosen by General Dynamics UK for |
| Scout Specialist Vehicle program | |
| 28 September | » Selected by FAA for Main Display replacement project |
| 29 September | » 3D LED video walls make their debut |
for the operating room
| OLS video walls are built to | |
|---|---|
| provide 80,000 hours of | |
| continuous operation |
| 10 October | » Opening of new Control Rooms R&D center in Karlsruhe, Germany |
|---|---|
| 18 October | » LED video wall selected by Virginia Department of Transportation |
| 10 November | » First uncompressed video-over-IP solution for the integrated operating room |
| 29 November | » New cross-cockpit collimated display system introduced |
| 14 December | » Ford Motor Company upgrades simulator with Barco SIM 7Q |
| (IN THOUSANDS OF EURO) | 2011 | 2010 | 2009 | ||
|---|---|---|---|---|---|
| Income statement before restructuring & impairment | |||||
| Orders | 1,082,895 | 978,263 | 618,192 | ||
| Orderbook | 479,918 | 426,900 | 331,354 | ||
| Net sales | 1,041,244 | 896,999 | 638,066 | ||
| Gross profit | 312,932 | 287,516 | 167,951 | ||
| EBIT | 78,359 | 45,135 | -29,537 | ||
| Profit/(loss) before taxes | 65,829 | 43,625 | -70,593 | ||
| EBITDA (a) | 130,223 | 98,752 | 24,076 | ||
| Ratios | |||||
| EBIT on sales | 7.5% | 5.0% | -4.6% | ||
| EBITDA on sales | 12.5% | 11.0% | 3.8% | ||
| Net financial cash (/debt) on EBITDA | 47.3% | 9.0% | 97.6% | ||
| Restructuring & impairment | -10,000 | 0 | -39,386 | ||
| (IN THOUSANDS OF EURO) | 2011 | 2010 | 2009 | ||
| Balance sheet & personnel | |||||
| Equity | 460,703 | 395,591 | 344,265 | ||
| Balance sheet total | 814,567 | 754,699 | 572,475 | ||
| Net financial cash/(debt) (f) | 61,635 | 8,857 | 23,486 | ||
| Operating capital employed (e) | 399,534 | 327,608 | 267,700 | ||
| Net working capital (e) | 162,222 | 177,145 | 127,055 | ||
| Personnel on 31 December | 3,507 | 3,499 | 3,217 | ||
| Ratios | |||||
| DSO (b) | 56 | 59 | 67 | ||
| Inventory turns (c) | 2,7 | 2,3 | 2,7 |
|---|---|---|---|
| DPO (d) | 54 | 67 | 55 |
| ROCE (%) (e) | 20% | 12% | -9% |
(a) EBIT+ depreciation on capital expenditure (PP&E) + amortization on capitalized development cost (b) DSO = ((Trade debtors, net) / (sales past quarter))*90
(c) Inventory turns = 12 / [Inventory / (Average Monthly Sales x Material Cost of Goods Sold %)]
(d) DPO = trade payables / (material cost + services and other costs + inventory movement + purchases of (in)tangible fixed assets) x 365 (e) For calculation see page 95
| (IN THOUSANDS OF EURO) | 2011 | 2010 | 2009 | ||
|---|---|---|---|---|---|
| Income statement after restructuring & impairment | |||||
| EBIT | 68,359 | 45,135 | -68,923 | ||
| EBITDA (g) | 130,223 | 98,752 | 15,833 | ||
| Free cash flow (h) | 81,237 | -7,009 | 59,435 | ||
| Net income from continuing operations | 75,850 | 43,625 | -64,210 | ||
| Net income from discontinued operations | - | 0 | 4,289 | ||
| Net income attributable to the equityholder | 75,850 | 43,625 | -59,919 | ||
| Ratios | |||
|---|---|---|---|
| EBIT on sales | 6.6% | 5.0% | -10.8% |
| EBITDA on sales | 12.5% | 11.0% | 2.5% |
| Net financial cash (/debt) on EBITDA | 47.3% | 9.0% | 148.3% |
(g) = (a) + impairment on capitalized development and goodwill (h) For calculation see page 94
| (IN EURO) | 2011 | 2010 | 2009 |
|---|---|---|---|
| Key figures per share | |||
| Number of shares on 31 December (in thousands) | 12,755 | 12,670 | 12,670 |
| Per share (in euro) | |||
| EPS | 6.32 | 3.66 | -5.02 |
| Diluted EPS | 5.91 | 3.41 | -5.02 |
| Gross dividend | 1.10 | 1.00 | 0.00 |
| Net dividend | 0.825 | 0.75 | 0.00 |
| Net dividend with VVPR strip | 0.869 | 0.85 | 0.00 |
| Gross dividend yield (i) | 2.84% | 2.1% | 0.00% |
| Yearly return (j) | -17.40% | 73.0% | 59.2% |
| Pay-out ratio (k) | 18.49% | 29.0% | 0.0% |
| Price/earnings ratio (l) | 6.1 | 13.2 | -5.7 |
(i) Gross dividend/ closing rate on 31 December 2011
(j) Increase or decrease share price + gross dividend, divided by closing share price of previous year
(k) Gross dividend x number of shares on 31 December / net result
(l) Share price 31 December / net result per share
| (e) For calculation see page 95 (f) For calculation see page 149 |
Share price (in euro) | 2011 | 2010 | 2009 |
|---|---|---|---|---|
| Average closing price | 46.41 | 37.46 | 23.40 | |
| Highest closing price | 59.50 | 49.43 | 35.56 | |
| Lowest closing price | 31.20 | 28.23 | 9.80 | |
| Closing price on 31 Dec | 38.76 | 48.28 | 28.49 | |
| Average number of shares traded daily | 28,103 | 30,235 | 37,430 | |
| Stock market capitalization on 30 December (in millions) | 492.7 | 611.7 | 361.0 |
Dear Shareholders,
It gives us great pleasure, and fills us with a sense of pride, to report on one of the best years ever in Barco's 77-year history.
Few observers could have predicted, when we started our journey back in 2009, that Barco would add 400 million euro in revenues to a 2009 baseline of 638 million euro in just two years' time. But in 2011, the company did indeed push swiftly through the psychological barrier of one billion euro in sales – which is truly remarkable.
Our promise to turn 2011 into a 'Grand Cru' year for the company has been met, and we would like to take this opportunity to congratulate and thank the entire Barco community for meeting and beating this challenge and for going the extra mile to make it all happen. This could not have been accomplished without their commitment and dedication, and so our most sincere and warm congratulations are certainly in order.
After our tough three-year journey of recovery from the crisis that resonated through Barco's markets, the company returned to respectable levels of performance and re-established global leadership positions in many geographies. Orders grew 11% year on year, to 1,083 million euro, and sales grew 16% year on year, to 1,041 million. With EBITDA at 12.5% and EBIT at 7.5%, Barco completed a run of eight consecutive quarters of progress in profitability quarter upon quarter.
Remarkably, 2011 was also a very good year in terms of working capital management and the generation of healthy levels of free cash. As the wave of unprecedented demand for Digital Cinema projectors peeked in early 2011, we were able to reduce inventories throughout the year and to free up substantial cash resources that were locked up in our warehouses. At the end of the year, Barco stood essentially debt free with more than 60 million euro in cash in its bank accounts.
In 2011, Barco emerged as the single leading provider of Digital Cinema projectors for use in big screen theaters around the globe. With 25,000 projectors already delivered and in operation, Barco holds 40% market share and has become the vendor of choice in this industry. Barco's line of projectors, based on Texas Instruments' DLP® technology, has recently been enhanced by incorporating laser technology in the light engines and by including integrated media servers and theater management systems software – offering our customers integrated systems capability.
Two years ago, Barco set the Guinness World Record with a Xenon lamp – generating 43,000 lumens of light. In November 2011, we were able to outshine even this record with a prototype laser projector that produces well over 55,000 lumens of light. Furthermore, in June of last year, Barco launched a 4K-resolution projector family and also ventured into 3D sound capabilities with innovative encoding technologies acquired under license from Auro Technologies. Partnerships with companies like Texas Instruments and China Film Group have proven extremely advantageous to fueling Barco's relentless drive towards new standards of performance in this industry.
Barco's Healthcare division continued to progress convincingly with increased market share in the traditional segments of radiology and mammography and the introduction of newer and technically more advanced solutions for the digital operating room. The lossless and latency-free transmission of images in the operating room, plus the ability to transmit and share these images over the net with viewers in remote locations, opens up new, attractive and potentially very buoyant markets for Barco.
With the recent acquisition of JAOtech (in January 2012), Barco has further broadened its horizons by entering the rapidly growing opportunity for integrated media solutions in the patient care segment. Thus, Barco has also emerged as this industry's vendor of choice on a global scale. When it comes to technically advanced solutions for the digitized world of pathology, patient care or robotic surgery, Barco remains the company of choice.
Demand for Barco's big video wall solutions for control rooms has grown 16% year on year and these solutions are now regarded as best-in-class in this industry. Whereas the division struggled to cope with moving many of its operations into Noida, India, in the first half of 2011, the logistics and supply chain issues were effectively addressed and profitability already improved in the second half of the year. This division won a prestigious red dot award for its LED-powered cubes and the Golden Peacock Award for its operations in the Noida factory.
The introduction of improved management systems and advanced controlware under development in Karlsruhe, Germany, coupled with the planned introduction of end-to-end communication links over IP, should propel this division into rapid and profitable growth. We are confident that our Control Rooms team will reclaim a global leadership position in 2012, as we anticipate solid performance from them in the years to come.
Results in this division have been mixed, due to softness in the Defense segment and supply chain issues with certain vendors. On the other hand, the Avionics business continued to grow robustly, and prospects for attractive niche opportunities in this division remain very good.
Barco does not aim to be a global leader in the Defense industry, nor is Belgium well-situated for engaging in such activities. Our goal is to continue to selectively capitalize on Barco's unique capabilities in terms of ruggedized displays and consoles through a gradual integration of these activities into our North American facilities. Nevertheless, the outlook for 2012 remains bullish, as we have achieved a number of wins in the Air Traffic Control segment and several other multi-year frame agreements in Defense and Avionics have been signed. These successes will allow us to capitalize on the significant investments that have been made in prior years. We remain confident that Barco's Defense & Aerospace division can deliver very profitable, double-digit growth to the company.
Barco Ventures also delivered substantially beyond expectations in both top- and bottom-line results. The magic of increased focus through higher levels of autonomy appears to have worked, as it inspired the entrepreneurial culture of so many start-ups, lifting them onto higher ground. Our LED venture, in particular, made tremendous progress on its journey to success – and its newest product offerings are enjoying very encouraging demand from customers looking for that 'simply better LED screen' from Barco.
Barco Ventures have proven to be cradles of innovation and entrepreneurship, where Barco can test new value creation models or venture into newer technologies or segments. They provide fertile training grounds for developing young managerial talent and for testing concepts quickly and effectively without violating the company's rules of engagement.
The ultimate goal of a Barco Venture is to graduate into Barco's core. However, not all Ventures will
be able to produce such outcomes, in which case other alternatives will be pursued.
Last year, we implemented the mind-set of Barco being not only a great engineering company – and we are pleased to report that the company progressed quite well in terms of customer intimacy and operational excellence. We are rapidly becoming a more customer-oriented (less product-centric) organization, and we have successfully moved into many mid-segment markets for more volume and better economies of scale. Our focus on growth in the BRIC countries has produced very encouraging results, especially in China and in Latin America.
The combination of leadership in technology and strong presence in global markets has given Barco an edge over its direct competitors. For 2012, we have placed customer service in the center of our priorities to complement great products with services that can delight our customers and open up new revenue-generating opportunities for us. As Barco learns to rev up all of its core engines, capitalize on its more lucrative Defense & Aerospace businesses, and break into new territories with some of its Ventures, a global technology leader is in the making.
Confident that continued growth is in store for the company, Barco's board voted to keep most financial resources in the company ready for future investments. With a dividend of 1.10 euro per share, we want to express our thanks to our shareholders for investing in our future while being well aware of the task in front of us to continue to drive shareholder value through profitable growth rather than through the payment of hefty dividends.
Herman Daems Eric Van Zele Chairman CEO
» WE LEAD THROUGH INNOVATION
WE DELIGHT OUR CUSTOMERS «
Barco is a global technology company that designs and develops visualization solutions for a variety of selected professional markets.
Barco offers user-friendly imaging products that optimize productivity and business efficiency, and encompass the entire visualization spectrum.
Barco has its own facilities for Sales & Marketing, Customer Support, R&D and Manufacturing in Europe, America and Asia-Pacific. The company (NYSE, Euronext Brussels: BAR) is active in more than 90 countries with about 3,500 employees worldwide.
3,507 ±
20% employees* of all employees active in R&D
*number of full-time equivalents (FTEs), excluding temporary workforce Database Corporate Associates per 31/12/2011
10 employees =
On 4 March 2011, Barco announced the extension of its Digital Cinema product offering through the acquisition of the CineStore activities of cinema solutions provider XDC. Based in Liège, Belgium, Cinestore possesses profound software know-how and in-depth market knowledge of the Digital Cinema business.
On 23 August 2011, Barco and China Film Group announced the formation of CFG Barco (Beijing) Electronics Co. Ltd., a joint venture among two Barco subsidiaries – Barco Visual (Beijing) Electronics Company Limited and Barco China (Holdings) Limited Company – and China Film Equipment Co. Ltd., a subsidiary of China Film Group. The joint venture was set up to further strengthen the development and production of Digital Cinema products and services in China.
* Europe, Middle East, Africa, Latin America
» Belgium » Denmark » France » Germany
» Malaysia » Singapore
» South Korea » Taiwan
» Belgium
R&D AND/OR MANUFACTURING FACILITIES*
» United States
*situation on 1 March 2012
Almost 20% of all employees active in R&D
Dozens of strategic partnerships and ventures
Reposition for the next decade
2012 - 2013 Sustain growth path in a challenging economy
| OBJECTIVES 2011 | RESULTS 2011 | OBJECTIVES 2012 |
|---|---|---|
| » Focus on Healthcare, Projection, Connectivity and Collaboration |
» 10% organic growth in Healthcare » Consolidated leadership in the projection business » Launch of networked solutions for Healthcare and Digital Cinema |
» Strengthen global leadership in Digital Cinema, Healthcare and Enterprise markets » Maintain profitable growth through sharper focus on core business |
| » Focus on products and systems |
» 25+ new product introductions » Technical breakthroughs in projection technology (Laser projection) and networked visualization (Nexxis) |
» Launch Corporate technology center Barco Labs » Further expand product portfolio with mid-range products |
| » Manage each business towards 10-10-20 (10% top-line growth, 10% EBIT and 20% return on capital employed) |
» Targets achieved for Entertainment and Healthcare (representing 60% of Barco's total business) and making significant progress in other businesses |
» Continue on the path towards profitable growth for all divisions |
| » Reduce organizational complexity |
» Simplified company structure with 'Cores' and 'Ventures' |
» Install world-class processes and operations to further improve operational excellence |
| » Achieve leadership in growth markets |
» Strategic wins in BRIC countries and Latin America » 25% of company's incoming orders in 2011 in growth regions » Joint Venture with China Film Group |
» Consolidate market leadership and increase revenue from growth markets |
Barco breaks through the 1 billion euro revenue mark
Barco received the Competitive Strategy Innovation Award from global growth consulting company Frost & Sullivan. The award is presented each year to the company that has shown excellence in three domains: uniqueness of strategy, market position, and competitive intelligence.
CRF Institute, an independent company that specializes in international working conditions research, named Barco as one of Belgium's 'Top Employers' for 2011. According to the Institute, Barco offers both solid working conditions and excellent career opportunities to young talent – and, therefore, the company can proudly present itself as a 'Top Employer' for the duration of a year.
Barco secured no less than five awards at the China Radio and Television Equipment Industrial Association's (CRTA) Science and Technology Innovation Awards ceremony held in the People's Hall, Beijing. Prize winners include the DP2K-32B projector, OVL Series rear projection display wall, and high-brightness projection display system.
At InfoComm, rAVe Publications honored Barco with the award for 'Best New Outdoor LED' for the NX-4 LED display. One of the key features that won the jury over was the NX-4's capability to seamlessly mix 2D and 3D without losing resolution or brightness.
Barco has won the League of American Communications Professionals (LACP) Platinum Award for excellence within its competition class on the development of the launch campaign for the OVL rear projection video wall. In addition, Barco received two LACP Spotlight Awards: one for the Barco 'OVL Launch Campaign communication materials' and one for developing the best in-house communications materials with the Barco OVL Launch Campaign.
Barco Electronic Systems Pvt Ltd. in Noida, India, has won the 2011 Golden Peacock National Quality Award. Named after India's national bird, the Golden Peacock National Quality Award is granted to companies that have made the most significant improvement in Quality in various business and industry sectors. Every year, the best names in the Indian business and industry compete for this much desired award.
Barco is the proud winner of the prestigious red dot product design award for its OL-521 LED display cube. Barco's OL-521 convinced the international jury with the space-saving cube design and small footprint, while providing the brightest and warmest colors.
Barco received several awards at InfoComm in recognition of its technology innovation in the area of video walls and image processing. The OVL-815 received an award for 'Best Video Wall' and the RCP-120 received an award for 'Best Remote Control', both conferred by Commercial Integrator magazine.
Barco and The Barnycz Group have been recognized by Live Design with an Excellence Award in the Architainment category for their work on the American Eagle Outfitters' flagship retail store at Times Square, New York.
Barco has been laurelled with the Lean Practice Award 2011 for manufacturing excellence in China. The award recognizes Barco as an example of a company that has very quickly implemented lean operations in its factory. While companies with lower production volumes rarely embark on a Lean adventure, Barco is a notable exception.
technology patents of all employees active in R&D
To optimize reading and interpretation of digital breast tomosynthesis - a new imaging technique that significantly improves the accuracy of breast cancer detection – Barco equipped the new Mammo Tomosynthesis 5MP display system with pioneering technologies such as RapidFrameTM and DuraLight NovaTM. Both features enable radiologists to detect small details more easily, which results in more diagnostic confidence.
To meet the specific needs of small- and medium-sized control rooms, Barco engineered the NSL-5521, a dedicated LED backlit LCD monitor that combines the benefits of Liquid Crystal Technology - such as low maintenance costs - with extremely narrow seams, for excellent tiled visual performance. The result is a highly dependable and eco-friendly display that fits perfectly into today's modern control rooms.
Control Display Units are a vital input and information device in many cockpit environments. To further enhance the usability and user-experience of these devices, Barco - in cooperation with Delft University of Technology in the Netherlands - created a next-generation CDU prototype equipped with a sophisticated touch screen control interface instead of conventional keys and buttons.
The Barco SIM 7Q HB projector is the world's brightest QXGA projector dedicated to the training and simulation industry. Designed following customer requests, the SIM 7Q HB perfectly responds to the growing demand for systems that deliver high resolution, deep contrast as well as smear reduction.
Engineered with the most efficient optics in their class, the DP4K Digital Cinema projectors stand out as the brightest 4K-resolution projectors on the market - creating an unmatched 3D experience for cinema audiences. The DP4K projector line unites razor-sharp 4K-resolution movie images with proven color consistency, uniformity, and contrast.
The HDX-W14 is the world's first events projector that combines active 3D and wired/wireless control options in a single unit. In addition, it enables quick and easy control via a smartphone or tablet computer. Its sturdy, compact design allows the HDX-W14 to be ready for the road in no time, while its 14,000 lumens light output and three-chip DLP color quality ensure crisp, vivid imagery on any screen.
[09]
The OLS video walls add 3D-capabilities to the long list of benefits brought by the awardwinning OL video wall family. This stereoscopic 3D functionality is a major asset in oil and gas applications - to display explorations of underground fields - and for simulation - where the new OLS is a compact, cost-effective alternative for existing high-end multi-projector systems.
[08]
The Barco C7 is an indoor LED video display for both fixed and rental installations. The C7 tiles consume only a fraction of the power and generate significantly less heat than competitive LED solutions, which makes them the industry's first truly environmentally friendly displays.
Today's operating rooms are confronted with rapidly changing visualization needs. That's why Barco introduced Nexxis for OR, the world's most flexible networked digital operating room system. Built on a high-bandwidth IP platform, Nexxis for OR establishes a scalable technology environment that enhances workflow efficiency and team collaboration.
Engaging more than 1,200 suppliers to go green
Along with quality, performance and customer service, eco-friendliness ranks high on Barco's priority list. To manage and streamline its environmental efforts on a global scale, Barco recently established a dedicated Environmental Compliance Office, assigned with the task of managing environmental product compliance and reducing the ecological footprint of Barco's products today and tomorrow.
In a short period of time, this office has produced:
Barco's Supplier Sustainability Program, established last year, encourages suppliers to comply with environmental regulations such as RoHS, REACH and other international standards restricting the use of toxic substances. Since its kick-off, more than 1,200 suppliers have been requested to prove their commitment to environmental compliance by exchanging information about the chemical composition of their products. In addition, Barco joined the BOMcheck project, a web-based industry platform, funded by Philips, for exchanging chemical information.
On 7 May 2011, Barco sponsored a team of cyclists for a fund-raising event in Texas, USA. The 50-mile ride turned into a great team bonding event, but, most importantly, it raised money for the American charity organization 'United Way'. United Way helps to achieve long-lasting social change in three domains: education (by helping children and youth realize their potential), income (by promoting financial stability and independence), and health (by improving health and avoiding risky behavior).
Last June, Barco was one of the companies to participate in the '1,000 kilometers against Cancer' bike ride. On this charity tour through Flanders, each participant committed to raising 5,000 euro. Three Barco employees entered the challenge to participate in this four-day, 1,000-kilometer tour. The collected funds will be donated to fundamental cancer research.
Through a partnership with non-governmental organization 'Via Don Bosco', Barco is a recognized supporter of educational projects in India. The funds are used to modernize the country's Technical and Vocational Education and Training programs by developing standardized and modular curricula on a national level. All in all, the project encompasses 123 technical schools, with a total of 25,000 students in 10 different regions.
In February 2011, Barco took part in a social inclusion project called '5 Views – Technical Training in Audiovisual', set up to support the poor communities in Rio de Janeiro, Brazil. The project brought together students from several communities in the city, while some of the best cinema artists and technicians served as professional teachers. Barco contributed to this social project with three classes about Digital Cinema projection. On top of this, Barco provided a Digital Cinema projector, 3D glasses and an alternative content switcher, so that the classes could use the film industry's best equipment and technology.
On 11 March 2011, Japan was hit by a magnitude 9.0 earthquake, the strongest in recorded history. The natural disaster cost more than 15,000 lives and destroyed more than 125,000 buildings.
Barco launched a relief plan that combines corporate donation with internal fundraising. To date, Barco has pledged 125,000 dollars in funds that will be used to purchase medical equipment and to help rebuild local infrastructure in the most severely damaged areas in Northeast Japan.
Throughout 2011, Barco associates in Xenia, USA, held a variety of actions - including ice cream sales, a cookout, a school supplies drive, and more – to raise funds for homeless children in the Xenia area. In early December, this culminated in a 'Holidays for the Homeless' gift card drive, in which gift cards and cash were collected for more than 100 students who were identified as homeless in Xenia Community Schools this year.
In the run-up to the 2012 Olympics in London, Barco has entered into a collaboration with the Belgian Paralympic Committee (BPC) to serve as a preferred visualization partner and silver sponsor of the organization. Through a variety of national and international activities, the BPC aims to promote the values that form the foundation of the Paralympic Movement: integration, personal development, and tolerance. In view of its social role, Barco is fully committed to promoting these goals.
The HDX-W14 is the first compact event projector in the world that combines active three-chip DLP® 3D capabilities with both wired and wireless control options in a single unit. Thanks to its Xenon illumination and high-contrast optical engine, the HDX-W14 is geared to deliver crisp and vivid images on every occasion.
"Barco has supported us throughout the six previous editions, and we know they will do an excellent job – round the clock – for all 10 days."
Director, Berlin International Film Festival, Germany
more silent than its nearest competitor
The RLM-W8 is a three-chip DLP® projector with the price tag of a single-chip model. Featuring superior image quality, 33% less power consumption, and 10 times quieter operation than its nearest three-chip competitors, the new RLM-W8 continues the RLM line's strong legacy of silence and energy-efficiency.
market share in the Digital Cinema projector market in China
30% of the Fortune 100 companies
use Barco technology
The DP4K Digital Cinema projectors guarantee razor-sharp 4K resolution movie images, combined with consistent color uniformity, rich contrast and vibrant, accurate colors. Thanks to their patented cooling system, resulting in the coolest 4K engine in the world, the DP4K projectors deliver unrivaled reliability and lifetime.
"Barco's projectors provide astonishing color rendition, resolution and clarity. The artists were amazed at how the projectors enlivened their work in a realistic – even tactile – way."
Carl Goodman Senior Deputy Director, Museum of the Moving Image, New York, USA
"We can always count on Barco for a highly stable, reliable platform and consistent image quality – an absolute must for a high-profile tour with this much complexity."
Phil Mercer Managing Director, XL Video, USA
Developed by Auro Technologies and powered by Barco, Auro-3D is a next generation 3D sound format that turns conventional cinema audio into a fully immersive 3D sound experience. Auro-3D uses a 3D speaker layout, based on three axes (width, depth and height) to reproduce the most true-to-life movie sound experience in 3 dimensions.
ImagePRO-II is a flexible signal processor for the rental and staging industry. An ideal solution for live events, the ImagePRO-II serves as an all-in-one video scaler, scan converter, switcher and transcoder that converts any input signal format to any output format.
Nexxis is a brand-new, fully IP-centric solution for image distribution in the operating room. The system meets the unique requirements of medical imaging in the surgical suite and enables better communication both in and beyond the operating room.
The Coronis Fusion 4MP DL is the latest addition to the 'Fusion' family of diagnostic display systems, which can be used as a wide-screen desktop or as two seamless side-by-side heads. Equipped with ultra-bright 'Diagnostic Luminance' technology, the new Coronis Fusion 4MP DL addresses the dual needs of color and grayscale imaging, allowing radiologists to read all their studies on a single workstation.
30,000+
medical displays monitored remotely with MediCal QAWeb
65,000+ high-performance display controllers helping to raise hospital efficiency
The Mammo Tomosynthesis 5MP is the industry's first display system to be cleared by the US Food and Drug Administration (FDA) for breast tomosynthesis. The system introduces several groundbreaking innovations, such as RapidFrameTM and I-LuminateTM, which were specifically developed for multi-modality mammography.
"We've partnered with Barco because they lead the industry in medical displays."
James Ruiz, MD Radiologist, Baton Rouge Woman's Hospital, Baton Rouge, USA
MediCal QAWeb is a breakthrough online service for high-grade Quality Assurance of PACS displays. The all-inclusive secured system guarantees maximum diagnostic confidence and uptime of PACS display systems throughout a healthcare facility. In November 2011, a dedicated version was released for use with mobile tablets.
"Barco's medical display systems offer images with exceptional brightness and contrast. The additional QA service guarantees us maximum diagnostic confidence and system up-time."
Carlos Yoshihara PACS Program Coordinator, Hospital do Coração, Brazil
of the world's military pilots are trained with Barco technology
The RP-360 is the most realistic and accurate rear-projected dome for flight training on the market. With fewer projectors, the RP-360 achieves superior image quality and is the only system to offer full 360° immersion with rear projection on the market.
"Barco is a reference beacon that is known to deliver excellent quality."
Satya Dev Adurti Vice-President IT, ACME Tele Power Limited, India
input sources can be displayed with Barco's control rooms concept.
of the world's electricity transport is monitored using Barco technology
The NSL-5521 LCD video wall combines durable, high-bright LED backlight technology with an extremely narrow bezel to deliver excellent tiled visual performance. Thanks to its long-lifetime LED technology, the NSL-5521 is perfectly suited for long-term usage.
The OLS family responds to the growing demand for flexible and cost-effective video wall solutions capable of showing stereoscopic content. The OLS modules combine the proven benefits of the OL range – excellent image quality, low TCO, long lifetime, small footprint, and smart color calibration – with vivid 3D stereo capabilities.
"Vehicle operators in the field deserve the best equipment available in order to do their jobs. That's why we selected Barco's TX display family."
Andy Powell Supply Chain Manager General Dynamics, UK
Barco TX displays unite a low-reflection touch screen, NVIS capability and sunlight readability into a single rugged display unit. The thin and lightweight displays feature a sophisticated thermal management system which makes the displays fit for the harshest temperature environments.
Barco rugged displays can withstand shocks up to 30G
Pilots run more than 100 certified apps on Barco avionics displays
Barco rugged displays remain fully operational at up to 95% humidity
At the Paris Air Show, Barco previewed a prototype of its future Touch Screen Control Unit. Featuring a full-size high-quality multi-touch screen, this next-generation avionics display introduces enhanced flexibility and near-limitless functionality for both existing and new types of aircraft.
The new ISIS 2Kx2K LCD main display has been fitted with replaceable LED backlight technology. Thanks to this industry first innovation, the ISIS main display reduces energy consumption by 20%, while offering a standard stabilized brightness of 240 cd/m².
DIGITAL SIGNAGE
DESIGN SERVICES
The industry's first truly environmentally friendly display, the C7 LED wall features 2,000 nits of high contrast, superior color reproduction and a calibrated output utilizing only a fraction of the power consumption of competing products.
The intellaspot XT-1 moving yoke light combines the next generation in innovative optics with high light output, low energy consumption, and a wide zoom range at a highly competitive price point. With its fast mechanical iris, variable soft edge and electronic strobing, the intellaspot XT-1 offers the events community a full-featured automated luminaire.
The dZine digital signage platform is a scalable system that can be used in both small and large cinema complexes. It features three integrated building blocks that enable smooth content creation, distribution and visualization.
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The OSYRIS Queue Management software is the industry's first complete and proven toolset for integrated air traffic arrival, departure and flow management. OSYRIS helps increase airspace capacity, reduce operator workload, and lower CO2 emissions.
Barco Silex has engineered an enhanced version of its multi-purpose AES crypto engine. The high level of scalability and flexibility of this IP core enables users to create power-efficient solutions with an exceptional level of performance.
In February 2011, Barco Silex announced a new solution for Public Key cryptography. The BA414E is a small and flexible hardware accelerator supporting a wide range of operations in the field of asymmetric cryptography. This 100% CPU offload solution supports complex arithmetic primitives like modular exponentiation for RSA and a wide variety of complex operations and algorithms at a higher level.
The undersigned declare that:
Eric Van Zele, CEO Carl Peeters, CFO
On 31 December 2011 the capital amounted to 54,531,777.48 euro, represented by 12,754,676 shares. Ownership of the company's shares was as follows:
| Gimv | 9.80% | (1,249,921 shares) |
|---|---|---|
| Franklin Templeton Investments Corp. | 4.92% | (627,181 shares) |
| Templeton Investment Counsel, LLC | 4.99% | (636,239 shares) |
| Barco | 5.78% | (737,963 shares) |
| Public | 74.51% | (9,503,372 shares) |
| Total | 100% | (12,754,676 shares) |
| Fully diluted | ||
| Gimv | 9.28% | (1,249,921 shares) |
| Franklin Templeton Investments Corp. | 4.65% | (627,181 shares) |
| Templeton Investment Counsel, LLC | 4.72% | (636,239 shares) |
| Barco | 5.48% | (737,963 shares) |
| Public | 75.87% | (10,222,787 shares) |
| Total | 100% | (13,474,091 shares) |
| BOARD OF DIRECTORS | ||
|---|---|---|
| --------------------------- | -- | -- |
| Chairman | Herman Daems (1) | Chairman of the Board of Directors | 2012* |
|---|---|---|---|
| President & CEO | Eric Van Zele (3) | 2014* | |
| Directors | ADP Vision BVBA (represented by Antoon De Proft) (2) | ||
| Praksis BVBA (represented by Bruno Holthof) (2) | 2014* | ||
| Lumis NV (represented by Luc Missorten) (2) | |||
| Bonem BVBA (represented by Marc Ooms) (1) | 2012* | ||
| Oosterveld Nederland BV (represented by Jan P. Oosterveld) (1) | 2014* | ||
| Marc Vercruysse (1) | 2012* | ||
| Christina von Wackerbarth (2) | 2012* | ||
| Secretary | Kurt Verheggen | General Counsel |
(1) non-executive directors // (2) non-executive independent directors // (3) executive director
* Date on which the term of office expires: end of the annual meeting
CORE LEADERSHIP TEAM SITUATION ON 1 MARCH 2012
| Eric Van Zele | President & Chief Executive Officer |
|---|---|
| Senior Vice Presidents Barco NV | |
| Jacques Bertrand Carl Peeters |
Chief Sales Officer Chief Financial Officer |
| Filip Pintelon | Chief Operating Officer |
| Jan Van Acoleyen | Chief Human Resources Officer |
| Wim Buyens | General Manager Entertainment Division |
| Piet Candeel | General Manager Healthcare Division |
| Steve Leyland | General Manager Control Rooms & Simulation Division |
| Dave Scott | General Manager Defense & Aerospace Division |
Herman Daems [01] is Chairman of the Board of Directors of Barco NV and BNP Paribas Fortis. He is also Chairman of the Belgian Corporate Governance Commission, Chairman of the International Private Equity Valuation guidelines board, and he holds several other board positions. Professor Daems is on the faculty of the K.U. Leuven. He studied theoretical physics and economics and holds a PhD in Economics.
Eric Van Zele [02] has been President and CEO of Barco NV since 2009. He is Chairman of the Board of Reynaers Aluminium nv. Previously, he held top management positions at the Indian Avantha Group, Pauwels International, Telindus nv and Raychem Corporation. Mr. Van Zele holds a Master's degree in Mechanical Engineering from the K.U. Leuven and post-graduate degrees in Management from Stanford University.
Antoon De Proft [03] holds a Master's degree in Electrical Engineering and a post-graduate degree in Medical Engineering. He has been President & CEO of ICOS Vision Systems Corporation. Today, Mr. De Proft has his own consultancy company, and he serves on several boards, including a position as Chairman of IMEC.
Bruno Holthof [04] is CEO of the Antwerp Hospital Network, a major Belgian hospital group. Prior to this, he was a partner at McKinsey & Company, where he became an expert in the areas of strategy, organization and operations. Mr. Holthof holds an MBA from Harvard Business School and an MD/PhD from the K.U. Leuven.
Luc Missorten [05] is CEO of Corelio, a leading Belgian multimedia company. He serves on the board of LMS and Bank Degroof. Before joining Corelio, he was CFO at Inbev and UCB. Mr. Missorten holds a Law degree from the K.U. Leuven, a Master of Laws from the University of California – Berkeley, and a Certificate of Advanced European Studies from the College of Europe in Bruges.
Marc Ooms [06] is non-executive Director of several companies, including Sea-Invest Corporation, European Bulk Terminals, I.V.C., BMT, PinguinLutosa, and Food Invest International.
Jan P. Oosterveld [07] held several senior management positions at Royal Philips Electronics before he retired in 2004. He is a professor at IESE, owns a consultancy company, and holds several board positions. Mr. Oosterveld holds a Master's degree in Mechanical Engineering from the Technical University Eindhoven and an MBA from the IESE Business School, Barcelona. Marc Vercruysse [08] has been CFO and member of the Management Committee of Gimv since 1998. Before becoming CFO, he was Internal Auditor, Senior Investment Manager, and Head of Structured Finance with Gimv. Mr. Vercruysse is on the Board of Directors of several unlisted companies.
Christina von Wackerbarth [09] has held several top positions at VNU Belgium, VNU Magazines International, and the Flemish public broadcasting company VRT. Today, she is active as a Media Consultant and Executive Coach, and she serves on the board of telecom operator Mobistar. Ms. von Wackerbarth holds a degree in Romance Philology and Linguistics, has completed an Advanced Management Program at Insead, and holds a Master's degree in Consulting and Clinical Coaching from HEC Versailles/Insead.
Kurt Verheggen serves as General Counsel of Barco. He started his career with the law firm Linklaters and then worked as Legal Counsel for CMB, GDF Suez and General Electric. He holds a law degree from the K.U. Leuven, a Master of Laws from Tulane University Law School in New Orleans, and a Master's degree in Real Estate from the Antwerp Management School.
Jacques Bertrand [01] joined Barco in 1986 after obtaining a degree in Electronic Engineering. He took up sales and product management roles in the former Barco Graphics division and was responsible for the start-up and expansion of Barco Graphics in Asia-Pacific. In 2000, he was appointed President Barco Japan, and in 2005, he was promoted to President Barco Asia-Pacific. Today, Mr. Bertrand is Chief Sales Officer of Barco NV.
Carl Peeters [02] started with Barco in 1987 and held the positions of Marketing Manager and Division Manager in the former Barco Graphics division. Later, he was responsible for mergers and acquisitions, and he was appointed CFO of BarcoNet when this division became a separate public company. After the delisting of BarcoNet in 2002, Mr. Peeters rejoined Barco NV, where he was appointed CFO in 2010. He holds a Master's degree in Applied Economics and a postgraduate degree in Business Administration.
Filip Pintelon [03] joined Barco in 2008 as President of Avionics & Simulation and President of Media, Entertainment & Simulation, before assuming the role of COO. Prior to joining Barco, he held top positions at LMS, Andersen Consulting and The Boston Consulting Group. After graduating from the K.U. Leuven with a Master's degree in Mathematics/Informatics in 1986, Mr. Pintelon earned an MBA from Vlerick Leuven Gent Management School.
Jan Van Acoleyen [04] is Chief Human Resources Officer. Prior to joining Barco in 2007, he held senior HR positions in high-tech companies such as Alcatel and Agfa-Gevaert. Mr. Van Acoleyen holds a Master's degree in Educational Sciences from the K.U. Leuven and an Executive MBA from the University of Antwerp.
Wim Buyens [05] is General Manager of the Entertainment Division. He started at Barco in November 2007 as Vice President Digital Cinema within the Media & Entertainment Division. Prior to joining Barco, he held several management positions at the Danish technology company Bruel & Kjaer. Mr. Buyens holds a degree in Engineering and obtained his executive management education at Stanford University and IMD in Lausanne.
Piet Candeel [06] is General Manager of the Healthcare Division. Prior to his present position, he held several positions in marketing, sales, and general management in a variety of business units in Barco over a span of 25 years. Mr. Candeel holds an Officer Degree in Nautical Electronics, a post-graduate degree in Marketing from EHSAL Brussels and an MBA from the University of Antwerp (UFSIA).
Steve Leyland [07] is General Manager of Barco's Control Rooms & Simulation Division. Before joining Barco in 2011, he held senior executive roles at Polycom, Intel Corporation, and Dialogic Corporation. Mr. Leyland holds a Bachelor's degree in Electronics Engineering from the University of Nottingham, UK.
Dave Scott [08] is General Manager of the Defense & Aerospace Division. He holds a degree in Electrical Engineering from Virginia Polytechnic Institute and State University. Mr. Scott was co-founder of Chromatics Inc., which was acquired by Barco in 1990. In 2001, he became Chief Operating Officer for Barco-View and, in January 2004, he was appointed President Barco North America. In 2010, Mr. Scott assumed his present position while maintaining legal responsibility for managing the North American region as the Head of Barco, Inc.
Reference is made to the Belgian Corporate Governance Code 2009, http://www.corporategovernancecommittee.be/en/2009_code/latest_ edition/default.aspx and Barco's Corporate Governance Charter, which is available for download at www.barco.com/investors/en/corporategovernance.
Reference is made to Title 1 of the Corporate Governance Charter on www. barco.com for an overview of the responsibilities of the Board of Directors and for a survey of topics discussed at board meetings.
On 9 February 2012, the board consisted of 9 directors. All non-executive directors hold or have held senior positions in leading international companies or organizations.
In 2011, the board of directors met 10 times. One of the meetings was held in Chicago, US.
Overview of the number of meetings attended by all directors in 2011:
| Meetings attended | |
|---|---|
| Executive director and Chief Executive Officer | |
| » Eric Van Zele | 10 |
| Non-executive directors | |
| » Herman Daems, Chairman | 10 |
| » Marc Ooms | 9 |
| » Marc Vercruysse | 7 |
| Independent, non-executive directors | |
| » Bruno Holthof | 10 |
| » Luc Missorten | 10 |
| » Jan P. Oosterveld | 10 |
| » Urbain Vandeurzen | 2 |
| » Christina von Wackerbarth | 10 |
| » Antoon De Proft | 1 |
Non-executive director Urbain Vandeurzen resigned from the board of directors on 30 June 2011, following his appointment as Chairman of Gimv.
The audit committee is composed of three members, Luc Missorten, Chairman, Marc Vercruysse and Bruno Holthof (appointed 14/07/2011), all of whom are non-executive directors. Jan P. Oosterveld is invited to participate to the meetings of the audit committee in view of his expertise and of the continuity of its proceedings. Mr. Missorten, Mr. Holthof and Mr.Oosterveld are independent directors.
The Board of Directors sees to it that the audit committee possesses sufficient relevant expertise, particularly regarding financial, accounting and legal matters, to be able to carry out its function effectively. Reference is made to the short biographies of the above mentioned members of the Audit Committee to testify to their competence in accounting and auditing, as required by the Companies Code, Art. 119, 6°. These biographies can be found on pages 80 and 81 of this annual report. The members of the audit committee are appointed for a period that does not exceed the duration of a director's mandate.
Title 2 (2.2) of the Corporate Governance Charter on www.barco.com gives an overview of the responsibilities of the audit committee. The tasks assigned to the audit committee are carried out for the entire group.
The audit committee meets at least four times per year. Each year, the audit committee assesses its composition and its operation, evaluates its own effectiveness, and makes the necessary recommendations regarding these matters to the board of directors.
Both the statutory auditor and the head of the internal audit have direct and unlimited access both to the chairman of the audit committee and the chairman of the Board of Directors. In 2011, the audit Committee met 6 times.
Overview of the number of meetings attended by the members of the Audit Committee:
| Meetings attended | |
|---|---|
| » Luc Missorten |
6 |
| » Jan P. Oosterveld |
6 |
| » Marc Vercruysse |
5 |
| » Bruno Holthof |
3 |
The remuneration & nomination committee consists of three non-executive directors: Herman Daems (Chairman), Marc Ooms and Christina von Wackerbarth.
The board of directors has made use of the possibility to combine the remuneration committee and the nomination committee into a single committee. In line with the Corporate Governance Charter of the company, either the chairman of the Board of Directors or a non-executive director chairs this committee. The chairman of the board of directors does not chair the remuneration and nomination committee when it is dealing with the remuneration of the chairman.
The remuneration and nomination committee meets at least two times per year, as well as anytime changes are necessary in the composition of the board of directors, be it appointments or reappointments. The committee is aware of the importance of diversity in general in the composition of the board of directors and of gender diversity in particular. The committee takes this into account whenever new directors need to be appointed. In this respect the board is in the process of identifying potential candidates for future nominations. In this respect the CEO participates in the meetings when the remuneration and nomination plan proposed by the CEO for members of the core leadership team is discussed, but not when his own remuneration is being decided.
In fulfilling its responsibilities, the remuneration and nomination committee has access to all resources that it deems appropriate, including external advice.
Title 2 (2.3) of the Corporate Governance Charter on www.barco.com gives an overview of the responsibilities of the Remuneration & Nomination Committee. In 2011, the remuneration & nomination committee met 5 times.
Overview of the number of meetings attended by the members of the remuneration & nomination committee:
| Meetings attended | |
|---|---|
| » Herman Daems |
5 |
| » Marc Ooms |
4 |
| » Christina von Wackerbarth |
5 |
The members of this committee are Herman Daems (chairman), Bruno Holthof, Eric Van Zele, Jan P. Oosterveld. Urbain Vandeurzen was a member of the committee till he resigned on 30 June 2011.
The Board of Directors has set up a strategic committee including the chairman and the CEO. The chairman presides over this strategic committee. Members of the executive management and other members can be invited to attend meetings of the strategic committee. The committee meets when an issue is introduced by the CEO. The committee meets at least one time per year to evaluate the existing strategy.
Upon the proposal of the CEO, the strategic committee discusses options that could influence the strategic path followed by the company. Possible points that may be discussed in this committee include acquisitions, mergers and the sale of a given activity.
Other important strategic choices can also be discussed in the committee, such as investing in new technologies, markets or regions that could have an important impact on the future of the company. This relates to investments running over a number of years that involve a minimum engagement by the company of ten million euro (€ 10m) over the entire duration of the project. In 2011, the strategic committee met 3 times.
Overview of the number of meetings attended by the members of the strategic committee:
| Meetings attended | |
|---|---|
| » Herman Daems |
3 |
| » Eric van Zele |
3 |
| » Bruno Holthof |
2 |
| » Jan P. Oosterveld |
3 |
| » Urbain Vandeurzen |
1 |
In line with Belgian Corporate Governance guidelines the Board of Directors of Barco regularly carries out a process of self-evaluation. The intention is to evaluate the functioning of the Board as a whole and of its committees. In this respect individual and private interviews are held with each of the directors, leading to a report which is submitted to the full board for review and action. The topics discussed are: the quality of the interaction between management and board, the quality of the information and documents submitted to the board, the preparation of the board meetings, the quality of the discussions and decision-making of the board, the extent to which all relevant strategic, organizational and managerial issues are addressed by the board, and the contribution of all board members to the decision-making process at the board. This process allows for actions to be taken, aiming at the continuous improvement of the governance of the company.
The above is fully in line with the Belgian Code on Corporate Governance. Reference is also made to Title 1 (1.3) of the company's Corporate Governance Charter on www.barco.com
On 28 April 2011, pursuant to article 17 of the articles of association, the general meeting set the aggregate annual remuneration for the year 2011 at 2,280,000 euro for the entire Board of Directors. This means that this amount also includes the remuneration for the executive director. This amount was apportioned amongst all members of the board in line with internal rules.
Also in line with internal rules the general meeting grants a fi xed remuneration of 20,000 euro to non-executive directors and an additional amount based on attendance at meetings of the board and of the committees. The attendance fee per meeting of the board and the committees is set at 2,500 euro. The chairman of the audit committee receives an attendance fee of 5,000 euro per meeting. These remunerations are charged as general costs.
Directors do not receive any remuneration linked to performance or results.
| fi xed remuneration attendance |
board | committee attendance 2011 |
total | |
|---|---|---|---|---|
| » Herman Daems | 200,000* | |||
| » Marc Ooms | 20,000 | 22,500 | 10,000 | 52,500 |
| » Marc Vercruysse** | 20,000 | 17,500 | 12,500 | 50,000 |
| » Bruno Holthof | 20,000 | 25,000 | 12.500 | 57,500 |
| » Luc Missorten | 20,000 | 25,000 | 30,000 | 75,000 |
| » Jan P. Oosterveld | 20,000 | 25,000 | 34,500 | 79,500 |
| » Urbain Vandeurzen | 10,000 | 5,000 | 2,500 | 17,500 |
| » Christina von Wackerbarth | 20,000 | 25,000 | 12,500 | 57,500 |
| » Antoon De Proft | 0 | 2,500 | 0 | 2,500 |
* 156,000 euro plus 44,000 euro in retirement benefi ts
** amount paid to Gimv
Remuneration CEO and Corporate Senior Vice Presidents 2011 (in euro) For the Executive Director and the Corporate Senior Vice Presidents, the remuneration is determined by the remuneration & nomination committee, in line with the rules described in the company's 'Corporate Governance Charter' under Title 4 ('Remuneration'), available on www.barco.com.
Barco wants to be an attractive company for top talent in the technology market space based on sustainable human resources practices. Competitive reward, together with career and development opportunities, is at the heart of Barco's employee value proposition. Barco strives overall for a position above the market median on the total reward proposition with a substantial variable part based on company, team and individual performance.
The reward packages of the senior executive and extended management teams are reviewed by the remuneration and nomination committee on an annual basis. The committee assesses overall market competitiveness (based on bi-annual external market data), individual market positioning and sustained individual performance. This review results in updated individual reward packages and reward policies, as well as the criteria for the annual Barco Bonus plan.
The Remuneration Policy is reviewed on an annual basis to accommodate potential developments in (labor) market characteristics, company strategy & portfolio choices, company and individual performance as well as other relevant factors influencing the performance and motivation of the management team. Currently Barco expects to continue the practice in use today for the next two fiscal years.
The Barco Bonus Policy is based on company (40%), divisional/functional (30%) and individual performance (30%) targets including EBIT, free cash flow, costs, orders, sales and individual targets. In case the target variable part of the compensation of individual members of the executive management should exceed the 25% threshold on total compensation, half of the bonus is based on these targets and the other half, involving a deferred pay-out, is based on a sustained profitability target. The deferred pay-out is assessed over a multi-year time span, with half of it paid after a period of two years and the other half paid after a period of three years.
» fixed remuneration
The CEO received a fixed gross remuneration of 612,000 euro
» variable remuneration scheme
The target CEO's cash bonus can range from 0% to 50% of the fixed remuneration with overachievement capped at 100%. Half of the bonus relates to a non-deferred pay-out based on the Group's EBITDA result for the bonus year. The other half, the pay-out of which is deferred, is based on the Group's sustained profitability. The deferred pay-out is assessed over a multi-year time span, with half of it paid after a period of two years based on the Group's EBITDA in the bonus year and the evolution of the EBITDA in the pay out year compared with the previous 5 years' EBITDA. The other half paid after a period of three years using as a reference the Group's EBITDA in the bonus year and the evolution of the EBITDA in the pay out year compared with the previous 5 years' EBITDA.
There is no claw back provision. The assessment of the performance is based on audited results.
The annual performance of the CEO is assessed by the nomination and remuneration committee and the results of this assessment are presented by the Chairman and discussed during a Committee meeting which the CEO does not attend.
The CEO will receive a cash bonus of 306,000 euro, which is the nondeferred component of his 2011 bonus.
» contribution for retirement benefits of 300,000 euro
In 2011, 15.000 stock options were granted to the CEO. Stock options are not linked to individual nor company performance and so cannot be considered as variable remuneration as defined by the Belgian law of 6 April 2010 on Corporate Governance.
No warrants/stock options were exercised and no warrants/stock options lapsed.
The remuneration is different for each member of the core leadership team and depends on criteria such as sustained performance, organizational role and external market data. For the reported year the data regarding fixed remuneration, variable remuneration, retirement and other benefits are provided as a total for the team while data related to stock options are provided on an individual basis.
There is no claw back provision for the bonus. The assessment of the performance is based on audited results.
Stock options are not linked to individual nor company performance and so cannot be considered as variable remuneration as defined by the Belgian law of 6 April 2010 on Corporate Governance.
| » | Jacques Bertrand: | 3,000 |
|---|---|---|
| » | Wim Buyens: | 3,000 |
| » | Piet Candeel: | 3,000 |
| » | Stephen Leyland: | 6,000 (including sign-on) |
| » | Carl Peeters: | 3,000 |
| » | Filip Pintelon: | 3,000 |
| » | Dave Scott: | 3,000 |
No warrants/stock options were exercised and no warrants/stock options lapsed.
Reference is made to page 154 of this Annual Report for an overview of the warrants and stock options exercisable under the warrant and stock option plans.
The group of Corporate Senior Vice Presidents in office on 9 February 2012 is presented on pages 82 and 83 in this annual report.
In case of termination of the contract by Barco the contract provides a notice period or compensation in lieu of 6 months.
The employment contracts of Jacques Bertrand, Wim Buyens, Piet Candeel, Carl Peeters, Filip Pintelon and Jan Van Acoleyen were signed before the Belgian Corporate Governance Law of 6 April 2010 came into force. The total compensation in case of termination is based on age, seniority in the Barco Group and the total of the individual compensation and benefits. Dave Scott has a US employment agreement. There is no contractual arrangement in case of termination and the Barco US Termination and Severance Policy will therefore be applicable. His contract was signed before the Belgian Corporate Governance Law of 6 April 2010 came into force. Steve Leyland has a French employment agreement with a contractual arrangement in case of termination. The total compensation in case of termination is equivalent to 6 months of total compensation during the first 36 months of employment and to 12 months of total compensation after 36 months of employment.
In line with the Royal Decree of 5 March 2006, which came into force on 10 May 2006, members of the board of directors and the executive committee must notify the FSMA (Financial Services Market Authority) of any transactions involving shares or other financial instruments of Barco within 5 business days after the transaction. These transactions are made public on the web site of the FSMA http://www.fsma.be and also on the Barco website (http://www.barco.com/investors/en/tradingdisclosure/ default.asp), where by the end of the first month following every quarter, all transactions by "insiders" in financial instruments related to Barco, are made public by the Compliance Officer of Barco.
Reference is also made to Title 7 (1) of the Company's Corporate Governance Charter on www.barco.com
The law provides a means of settling conflicts of interest that arise within the context of a director's mandate.
In the interest of the company, the board of directors has decided in this matter that its members must assume a number of additional obligations, which can be summarized as follows:
The legal provisions on conflicts of interest for directors apply to the decisions that fall under the power of the board of directors and that meet the following conditions:
The direct consequences of the applicability of these provisions are that the directors in question:
A director who is a director or business manager of a customer or supplier or who is employed by a customer or supplier shall report this fact to the board of directors prior to the deliberations concerning a topic on the agenda relating (whether directly or indirectly) to this customer or supplier. This obligation also applies when a family member of the director has the above-mentioned position.
The same rule applies when a director or their family members (whether directly or indirectly) hold more than 5% of the shares with voting rights of a customer or supplier.
Subsequently, the director in question:
These legal provisions are not applicable when the customer or supplier is a listed company and the participation of the director (or their family members) takes place within the framework of assets that have been placed under the management of an asset manager who manages these assets in accordance with his own judgment, without taking the director (or their family members) into account.
The directors are conscious of the great importance of the above rules in relation to the good management of Barco nv and they commit themselves to taking the greatest of care to ensure that these rules are observed.
Barco's Board of Directors and its executive management are responsible for establishing and maintaining adequate risk management and control processes. These processes are designed to identify and manage the risks to which the company is exposed, and they provide reasonable assurance regarding achievement of the company objectives.
Barco has set up and operates a risk management and control framework in accordance with the Company Law Code and the Belgian Corporate Governance Code 2009. The main principles are based on the Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). This framework is built upon the 5 basic components of control processes and is aligned with the needs and the size of the company.
Barco strives for overall compliance and a risk-aware attitude with a clear definition of roles and responsibilities in all relevant domains. In this way, the company fosters an environment in which its business objectives and strategies are pursued in a controlled manner. This environment has been implemented by policies and procedures such as:
The core leadership team fully endorses these initiatives and the entire Barco staff is regularly informed and trained on these subjects in order to develop sufficient risk management and control at all levels and in all areas of the organization.
Furthermore, Barco has appointed a Risk and Compliance Manager, who is in charge of the overall coordination of risk management. The Risk and Compliance Manager assists in clearly defining the roles with risk management responsibilities, ensures an integrated approach, raises overall awareness of risk management and control within the company, and checks whether proper risk control measures are in place.
Sound risk management starts with identifying and assessing the risks associated with the business in order to minimize the effects of such risks on the organization's ability to achieve its objectives and to create value for its stakeholders.
Each manager in Barco must ensure the timely identification and qualitative assessment of the risks (and significant changes to them) within his or her area of responsibility.
Barco has identified and analyzed its key corporate risks as disclosed in the 'Risk Factors' section of this annual report. These corporate risks are communicated to the various levels of management in order to provide them with an aggregated view of risk and to strengthen their risk response capability.
Specifically within the financial domain, a quarterly, bottom-up risk analysis is conducted to identify and document the current risk factors. Action plans are defined for all key risks. The results of this analysis are discussed with the statutory auditor.
Control measures are in place to minimize the effect of risk on Barco's ability to achieve its objectives. These control activities are embedded in the company's key processes and systems to assure that the risk responses and the company's overall objectives are carried out as designed. Control activities are conducted throughout the organization, at all levels and all departments.
The Risk and Compliance Manager supports the adoption of clear processes and procedures for a wide range of business operations, such as introducing new products onto the market, signing contractual commitments, or exporting finished goods. The Risk and Compliance Manager reports on his activities to the core leadership team and to the Audit Committee.
In addition to these control activities, an insurance program is being implemented for selected risk categories that cannot be absorbed without material effect on the company's balance sheet.
Specific internal control activities with respect to financial reporting are in place, including the use of a periodic closing and reporting checklist. This checklist assures clear communication of timelines, completeness of tasks, and clear assignment of responsibilities. Specific identification procedures for financial risks are in place to assure the completeness of financial accruals.
The accurate and consistent application of accounting rules throughout the company is assured by means of Finance and Accounting Manuals, which are available for the key accounting sections.
The accounting teams are responsible for producing the accounting figures (closing bookings, reconciliations, etc.), whereas the controlling teams check the validity of these figures. These audits include coherence tests by comparison with historical and budget figures, as well as sample checks of transactions according to their materiality.
All material areas of the financial statements concerning critical accounting judgments and uncertainties are periodically reported to the Audit Committee.
Timely, complete and accurate information flow – both top-down as well as bottom-up – is a cornerstone of effective risk management.
In operational domains, Barco has implemented a management control and reporting system (MCRS) to support efficient management and reporting of business transactions and risks. This system enables Barco's management to capture relevant information on particular areas of business operations at regular time intervals. The process enforces clear assignment of roles and responsibilities, thus ensuring consistent communication to all stakeholders regarding external and internal changes or risks impacting their areas of responsibility.
In addition to the MCRS, the company has put several measures in place to assure security of confidential information and to provide a communication channel for employees to report any (suspected) violations of laws, regulations, company policies or ethical values.
Uniform reporting of financial information throughout the organization ensures a consistent flow of information, which allows the detection of potential anomalies.
An external financial calendar is planned in consultation with the Board and the core leadership team, and this calendar is announced to the external stakeholders. The objective of this external financial reporting is to provide Barco's stakeholders with the information necessary for making sound business decisions.
Monitoring helps to ensure that internal control continues to operate effectively.
The continuity and the quality of Barco's risk management and control framework is assessed by the following actors:
Risk is an inherent factor of any business enterprise. Recognizing the wide variety of risks that exist, Barco takes the necessary measures to reduce the potential impact of these risks on all aspects of its global operations. While this list is not exhaustive, Barco specifically recognizes the following risks as deserving attention:
Barco is active in very specialized, selected professional markets for visualization technologies. In order to maintain, or attain, market-leader status in each of its key markets, the company annually invests considerably in research & development. In 2011, this investment amounted to 74.6 million euro, or 7.2% of sales. With regard to the selected professional markets, the company's main challenge is to define the right products to introduce into each market. Risks associated with this challenge are: » not being the first to market a new product, which may lead to
Expected sales volumes may not be achieved due to a shortage of components. This shortage may be a global phenomenon, due to an economic crisis or a major natural disaster (such as the earthquake and subsequent tsunami in Japan, which disrupted the manufacture of electronic components). It may, however, also be linked to the introduction of new products that require new components, which may not yet be available in the required volumes.
Barco's global procurement team tracks potential disruptions closely in order to alert the company early on. The team also coordinates a companywide response, which proved its value in 2011 following the tsunami in Japan and the flooding in Thailand. Thanks to the company's fast, coordinated reaction, manufacturing operations were not impacted.
Although Barco's strategy is aimed at long-term growth and security, failure to execute this strategy could impact results and share value negatively. This includes the inability to safeguard intellectual property rights and other instances of inadequate strategy execution. Negative impact could also result from not adapting quickly enough to paradigm shifts within the industry.
As Barco is traditionally active in very specialized, selected professional markets, this implies the strategic risk of technology commoditization and low-cost competition moving up the technology ladder. Counteractive measures initiated by Barco include intensified attention to market midsegments, increasing its business in these markets by offering a broader product range to its customer base.
As litigation cannot always be avoided when doing business, Barco is sometimes involved in legal actions, either as a plaintiff or as a defendant. These legal actions may relate to a wide variety of matters, such as intellectual property infringement, warranty issues, product liability, and employee or regulatory issues.
Because the outcome of litigation cannot be predicted with absolute certainty, a legal action might result in unexpected costs. Pending law cases are reviewed regularly, and a cost-benefit analysis is always made prior to engaging in litigation.
Barco carries out its activities in diverse jurisdictions around the world. The sale and export of some of its products may be regulated or even restricted (such as in the healthcare or aviation industries). The regulatory framework in which Barco operates differs from country to country, may be subject to change, and is sometimes very complex (especially regarding product standards for hazardous substances, energy efficiency, or environmental design). Barco has designated a Legal and Compliance Manager for each of its legal entities with the task of advising on upcoming regulatory changes in the local jurisdiction in a timely manner. Barco anticipates regulatory changes as far as possible.
In a company of Barco's size and scope, an employee's actions can result in a breach of laws and regulations or company ethics. Any resulting criminal prosecution or fine can of course have a negative effect on the company's image, business and share value. This risk is higher in emerging markets, as the knowledge of local laws and regulations or the monitoring of ethical standards may still be less developed than in more mature markets.
Through compliance awareness trainings, a strict worldwide application of its Code of Ethics and Business Conduct, and diligent internal control, Barco strives to achieve the highest level of compliance with applicable laws and regulations, and with its Code of Ethics and Business Conduct, on a global scale.
Barco makes extensive use of IT systems and platforms to support its operations. As configuration, hardware or software failures may occur, which can hamper these operations, proper fail-safe and recovery procedures are in place to mitigate these risks.
In addressing safety risks inherent to any modern IT infrastructure, Barco's facility and IT management is fully compliant with ITAR and C-TPAT guidelines, proactively scans its network for vulnerabilities, strictly regulates access to its networks, and regularly performs disaster recovery exercises.
The results of the company are reported in euro. Therefore, the results of operations, and the financial position of Barco entities, that work in currencies other than the euro are translated into euro in the company's consolidation process. However, the daily fluctuation between these other currencies and the euro may cause a negative impact on the company's consolidated results.
The most important currency risk in this respect is related to the US dollar. About 45% of the company's total annual sales are realized in USD or USD-related currencies. As the evolution of the exchange rate between the USD and the euro cannot be predicted, and also because of the elapsed time between order and invoicing, there is an ongoing risk in forecasting revenues – as well as profit margins – for the entire group. Another critical element is the fact that some of Barco's main competitors are USD-based, so that a weakening of the USD against the euro may give these companies a competitive advantage over Barco.
In recent years, Barco has made great efforts to increase its competitive position and to hedge against the USD by increasing the proportion of its operational costs in USD or USD-related currencies and by purchasing more components in these currencies. The company is set to continue on this course. Currency risk exposure is assessed at regular intervals. Selective derivative financial instruments are used to manage these risks, which is especially the case for the USD (and USD-related currencies) for which receivables are systematically higher than payables.
Beyond Barco's immediate business environment, an overall negative economic climate, a lack of liquidity in the financial markets, or a global stock market collapse may have a negative effect on Barco, its customers and its partners. A recession may slow Barco's customers and partners down or render them unable to secure the funds for planned investments. To mitigate its own risks, in December 2011 Barco increased its committed credit facilities to 115 million euro (notwithstanding an improved net cash position) and continued to focus on a pro-active cash generating strategy. On the other hand, the fact that Barco conducts business in a variety of markets and geographical regions may reduce the impact of bad economic conditions, as they may not affect all markets and regions equally.
As Barco's business is introducing new cutting-edge technological applications, finding the right human resources for product management, R&D, business development and operations is a constant challenge. The global distribution of Barco's sales and marketing activities, service organization, and R&D and manufacturing operations reduces this risk to a large extent. This risk is further mitigated by Barco's internal talent and career development and company-wide learning programs, as well as a marketcompetitive reward policy and practices.
In all its operations and locations worldwide, Barco adheres resolutely to all laws and regulations regarding the protection of the environment, human health and safety. Nevertheless, unexpected circumstances or accidents may expose the company to litigation. Moreover, Barco may be ordered to remediate historical environmental conditions on any of its sites, without being the actual (or only) cause of the infraction. As a good corporate citizen, Barco assumes its responsibility in all cases in this regard.
Events of an exceptional nature (such as a fire) may affect the company itself, or events on a larger scale (such as flooding, earthquake or extreme weather conditions) may affect component suppliers. These events, which can also be terrorist attacks or disease epidemics, can destabilize part or all of the world's economy.
Exceptional events can damage or destroy a company site. Especially in the case of an R&D and/or a manufacturing site, such events may seriously affect the company's competitive position, as they may disrupt deliveries to customers or postpone new product releases. Barco has set up an international insurance program with reputable underwriters to cover both its assets and loss of income in case of business interruption due to such exceptional events. The coverage as well as the insured amounts are reviewed regularly and benchmarked with the assistance of professional insurance brokers. Nevertheless, it is impossible to calculate beforehand what the negative impact of such events might actually be.
Part of Barco's long-term growth strategy is based on acquisitions. Despite the fact that Barco has well-defined parameters for potential acquisitions and carries out due-diligence processes with the utmost care, acquisitions always entail risks. These risks may be associated with the integration of the acquired company into the group. The growth of the acquired business may be slower than forecast, or the acquired technological knowledge may not be as valuable as anticipated. These risks may result in impaired goodwill.
Ernst & Young Bedrijfsrevisoren CV De Kleetlaan 2, 1831 Brussel
Represented by Lieve Cornelis (Partner) Jan De Luyck (Partner)
In 2011, remuneration paid to the statutory auditor for auditing activities amounted to 373,027 euro. Remuneration paid to the statutory auditor for special assignments was 26,084 euro.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Cash flow from operating activities | |||
| EBIT after restructuring & impairment | 68,359 | 45,135 | -68,861 |
| Impairment of capitalized development costs and goodwill | 11,328 | 1,278 | 31,144 |
| Restructuring provision (personnel) | -3,351 | -3,735 | -4,598 |
| Amortization capitalized development cost | 36,448 | 39,058 | 40,849 |
| Depreciation of tangible and intangible fixed assets | 14,088 | 13,282 | 12,768 |
| Loss on tangible fixed assets | -85 | - | -856 |
| Gross operating free cash flow | 126,787 | 95,018 | 10,446 |
| Changes in trade receivables | 12,462 | -55,438 | 34,414 |
| Changes in inventory | -2,483 | -68,240 | 43,670 |
| Changes in trade payables | -14,693 | 55,340 | -1,995 |
| Other changes in net working capital | 35,923 | 21,007 | 11,166 |
| Change in net working capital | 31,208 | -47,331 | 87,256 |
| Net operating free cash flow | 157,995 | 47,687 | 97,702 |
| Interest income/expense | -2,530 | -1,448 | -1,669 |
| Income taxes | -10,718 | 393 | 461 |
| Cash flow from operating activities | 144,748 | 46,632 | 96,494 |
| Cash flow from investing activities | |||
| Expenditure on product development | -46,454 | -41,107 | -32,801 |
| Purchases of tangible and intangible fixed assets | -20,302 | -13,397 | -5,486 |
| Proceeds on disposals of tangible and intangible fixed assets | 3,245 | 863 | 1,228 |
| Cash flow from investing activities (excluding acquisitions) | -63,511 | -53,641 | -37,058 |
| Free cash flow | 81,237 | -7,009 | 59,435 |
The accompanying notes are an integral part of this statement.
Barco generated a positive free cash flow of 81.2 million euro in 2011 (2010: -7.0 million eruro; 2009: +59.4 million euro). Main contributor to the positive free cash flow in 2011 is the gross operating free cash flow of 126.8 million euro enforced by the positive change in net working capital of 31.2 million euro. The increase in the gross operating free cash flow, compared to 2010, is fully caused by the higher EBIT.
The positive results in 2010 and 2011 have lead to an increase in the net tax payments (10.7 million euro). Capital expenditures and expenditures on product development have been further reinforced in 2011, leading up to 20.3 million euro investments in tangible and intangible fixed assets and 46.4 million euro investments in product development.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Trade debtors | 187,114 | 200,983 | 134,805 |
| Inventory | 233,928 | 230,421 | 146,264 |
| Trade payables | -110,791 | -125,353 | -67,852 |
| Other working capital | -148,028 | -128,906 | -86,163 |
| Total working capital | 162,222 | 177,145 | 127,055 |
| Long term assets & liabilities | 193,391 | 150,463 | 140,645 |
| Operating capital employed | 355,613 | 327,608 | 267,700 |
| Goodwill | 43,921 | 52,891 | 32,265 |
| Operating capital employed (incl goodwill) | 399,534 | 380,499 | 299,965 |
| EBIT before restructuring & impairment | 78,359 | 45,135 | -29,537 |
| ROCE after tax (%) (a) |
20% | 12% | -9% |
(a) Tax rate used is the effective tax rate, in 2011 and 2010 0% (in 2011 effective tax rate is positive, therefore kept at 0%).
Driven by a further sales increase in 2011 compared to 2010, the Barco group has realized a positive EBIT before goodwill impairment of 78.4 million euro in 2011 compared to a positive EBIT of 45.1 million euro in 2010. By consequence, the group achieves a ROCE in 2011 of 20% versus 12% in the previous period.
| IN THOUSANDS OF EURO | 2011 | 2010 | ||||
|---|---|---|---|---|---|---|
| Sales | EBITDA | % EBITDA | Sales | EBITDA | % EBITDA | |
| Entertainment | 432.1 | 63.8 | 14.8% | 329.7 | 60.2 | 18.3% |
| Healthcare | 192.5 | 33.1 | 17.2% | 175.2 | 28.4 | 16.2% |
| Control Rooms & Simulation | 214.3 | 16.2 | 7.5% | 184.8 | 14.8 | 8.0% |
| Defense & Aerospace | 115.8 | 11.7 | 10.1% | 117.9 | 13.0 | 11.0% |
| Ventures | 88.2 | 5.5 | 6.2% | 92.1 | -17.5 | -19.0% |
| Eliminations | -1.7 | -2.7 | ||||
| Group | 1041.20 | 130.2 | 12.5% | 897.0 | 98.8 | 11.0% |
In 2011, Barco passed the ambitious 1 billion euro mark. The company progressed on many fronts and delivered on its promises for sustainable and profitable growth. Overall sales grew 16.1% year-on-year, with Entertainment growing by 31.1%, Healthcare by 10% and Control Rooms & Simulation by 16.1%. Despite a very challenging macro-economic environment, Barco not only succeeded in a turn-around but also established global leadership positions in all of its core businesses.
Sales to Europe, Middle East, Africa and Latin America (EMEALA) represented 43.7% of consolidated sales, while 33.3% of sales were realized in North America and 23.0% in Asia Pacific. Compared with 2010, regional sales grew by 18.8%, 8.6% and 23.0%, respectively.
Order intake in 2011 was 1,082.9 million euro – an increase of 10.7% against 978.3 million euro in 2010. Europe, Middle East, Africa and Latin America (EMEALA) realized 40.9% of total sales, North America 33.8% and Asia Pacific 25.3%. The EMEALA region grew 4.4% year-on-year, North America 8.2% and the APAC region 27.1%. The BRIC countries, together with Mexico, Japan, Southeast Asia and Central Europe, were among the fastest growing areas for incoming orders.
At the end of 2011, Barco's order book stood at 479.9 million euro. One year earlier, this figure was 426.9 million.euro.
Gross profit increased by 8.8% to 312.9 million euro or 30.1% of sales. In 2010, gross profit was 287.5 million euro and gross profit margin was 32.1%.
EBITDA was 130.2 million euro or 12.5% of sales, compared to 98.8 million euro or 11.0% of sales the year before. EBIT before impairment on goodwill was 78.4 million euro compared to 45.1 million euro the year before. Currency exchanges had a negative impact on EBIT of 1.6 million euro compared to the year before. With EBIT margins moving up from 5.0% in 2010 to 7.5% in 2011, Barco delivered on its promises related to profitability.
While indirect costs had already been reduced to 32% in 2010, they were brought down even further to 29.9% in 2011.
Research & Development expenses increased year-on-year from 71.4 million euro to 74.6 million euro. However, in percentage of sales, R&D expenses decreased from 8.0% of sales to 7.2% of sales. Sales & Marketing expenses increased from 114.6 million euro to 122.5 million euro, but decreased in percentage terms from 12.8% of sales to 11.7% of sales.
EVOLUTION ORDERBOOK PER YEAR HALF
EVOLUTION ORDERS PER YEAR HALF
General & Administration expenses also increased in absolute numbers but decreased in percentage terms: from 49.0 million euro or 5.5% of sales, to 50.2 million euro or 4.8% of sales.
Other operating results were 12.8 million euro positive, due largely to reversals of bad debt and other provisions booked in 2010.
Free cash generation of 81.2 million euro illustrates good management of working capital. In 2010, free cash flow was negative (at - 7.0 million euro).
Capital expenditures for 2011, excluding capitalized development, were 20.3 million euro, compared to 13.4 million euro the year before.
On 31 December 2011, trade receivables stood at 187.1 million euro, down 12.5 million euro from the end of 2010. DSO was reduced to 56 days, down from 59 days at the end of 2010. At 233.9 million euro, inventory was essentially flat year-on-year, marking an important increase in turns from 2.3 at the end of 2010 to 2.7 at the end of 2011.
Trade payables decreased to 110.8 million euro from 125.4 million euro at the end of 2010. DPO was 54 days at the end of 2011, compared to 67 days the year before.
The company performed on target with a ROCE of 20% compared to 12% in 2010.
At the end of December 2011, Barco had a net cash position of 61.6 million euro, compared to a net cash position of 8.9 million euro on 31 December 2010. Barco did not acquire any of its own shares in 2011. A dividend of 1 euro per share was paid in 2011.
Sales for the Entertainment division increased from 329.7 million euro in 2010 to 432.1 million euro in 2011 (+31.1%). Growth was generated in all regions, resulting in more than 30% growth in the EMEALA region, almost 20% in North America, and close to 50% in the APAC region. Growth momentum was strongest in the events market. Barco's renewed focus on the corporate AV segment also proved to be remarkably successful.
Incoming orders for the Entertainment division grew by 18.1% – from 390.2 million euro in 2010 to 460.7 million euro in 2011. Both digital cinema and projectors used for events and fixed installations posted robust growth. The Asia Pacific region contributed the most to this growth, most notably so in Greater China, India and Japan. Long-term frame agreements have not been included in the reported numbers.
EBITDA for the Entertainment division stood at 63.8 million euro compared to 60.2 million euro in 2010, an increase of 6%. EBITDA margin decreased from 18.3% to 14.8% year-on-year as investments in R&D increased substantially.
With 192.5 million euro in sales versus 175.2 million euro in 2010, the Healthcare division realized an increase of 10.0% year-on-year. Top line increased in all three regions, with the APAC region booking the strongest performance with growth over 20%. The FIMI acquisition of 2009 continued to grow at a double-digit pace, while winning important contracts for modality products. Other strategic developments – such as for the compression-free and low-latency transmission of images in the Operating Room – also resulted in important contracts.
The Healthcare division booked incoming orders of 207.1 million euro in 2011. This represents an increase of 24.2% compared to 166.8 million euro of incoming orders booked in the same period the year before.
Solid performance in orders and sales was booked in all regions, in established markets as well as in newer market segments such as surgical displays, dental imaging and digital pathology.
EBITDA for 2011 was 33.1 million euro compared to 28.4 million euro in 2010, an increase of 16.4%. The EBITDA margin increased from 16.2% to 17.2%.
SALES & EBITDA 2011 VS 2010
Sales in the Control Rooms & Simulation division increased 16.1% – from 184.8 million euro in 2010 to 214.3 million euro in 2011 – with robust growth of about 20% in both Europe and the APAC region. Control Rooms did well worldwide. Revenues for Simulation increased in the EMEALA and APAC regions, but decreased in North America.
Global order intake in the Control Rooms & Simulation division increased by 1.6% – from 216.1 million euro in 2010 to 219.6 million euro in 2011 – with growth originating from all three regions. The EMEALA and APAC regions performed best for Control Rooms, while order intake for Simulation was strongest in North America.
EBITDA for 2011 was at 16.2 million euro, a 7.5% EBITDA margin, compared to 14.8 million euro, an 8.0% margin, in 2010.
Global sales decreased by 1.7%, from 117.9 million euro in 2010 to 115.8 million euro in 2011, but with a strong end-of-year performance. Avionics did perform well, with strong growth in the EMEALA and APAC regions. The EMEALA region grew its top line by 5.9%, while the other two regions experienced negative growth.
In 2011, global order intake for the Defense & Aerospace division was down 8.1% (from 115.9 million euro in 2010 to 106.6 million euro in 2011). Only the EMEALA region increased its order intake (by 7.9%). Avionics was the best performing market in the division, particularly in the EMEALA and APAC regions.
EBITDA for the semester was 11.7 million euro, or a 10.1% margin, compared to 13.0 million euro (11.0% margin) in 2010.
Through increased focus and autonomy, the ventures turned profitable and gained strength as they were right-sized and repositioned strategically.
Global sales decreased by 4.2%, from 92.1 million euro (2010) to 88.2 million euro (2011), primarily because of weak sales in the APAC region.
Order intake for the ventures was 90.9 million euro in 2011, an increase of 1.0% from 90.0 million euro in 2010. The EMEALA region and North America did well, while the APAC region contributed negatively.
EBITDA for 2011 was 5.5 million,euro or a 6.2% margin (compared to -17.5 million euro, or -19.0% margin, in 2010).
| IN EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Number of shares on 31 December (in thousands) | 12,755 | 12,670 | 12,670 |
| Per share (in euro) | |||
| EPS | 6.32 | 3.66 | -5.02 |
| Diluted EPS | 5.91 | 3.41 | -5.02 |
| Gross dividend | 1.10 | 1.00 | 0.00 |
| Net dividend | 0.825 | 0.75 | 0.00 |
| Net dividend with VVPR strip | 0.869 | 0.85 | 0.00 |
| Gross dividend yield (a) | 2.84% | 2.1% | 0.00 |
| Yearly return (b) | -17.40% | 73.0% | 59.2% |
| Pay-out ratio (c) | 18.49% | 29.0% | 0.0% |
| Price/earnings ratio (d) | 6.1 | 16.2 | -5.7 |
(a) Gross dividend/ closing rate on 31 December 2011
(b) Increase or decrease share price + gross dividend, divided by closing share price of previous year
(c) Gross dividend x number of shares on 31 December / net result
(d) share price 31 December / net result per share
| IN EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Share price | |||
| Average closing price | 46.41 | 37.46 | 23.40 |
| Highest closing price | 59.50 | 49.43 | 35.56 |
| Lowest closing price | 31.20 | 28.23 | 9.80 |
| Closing price on 31 December | 38.76 | 48.28 | 28.49 |
| Average number of shares traded daily | 28,103 | 30,235 | 37,430 |
| Stock market capitalization on 31 December (in millions) | 492.7 | 611.7 | 361.0 |
| Barco share | BAR | ISIN BE0003790079 | |
|---|---|---|---|
| Barco VVPR-strip | BARS | ISIN BE0005583548 | |
| Reuters | BARBt.BR | ||
| Bloomberg | BAR BB | ||
| Market capitalization 31 December 2011 | 492,717,120 | ||
| Highest capitalization | 756,364,000 | ||
| Lowest capitalization | 396,614,400 | ||
| Share price 31 December 2010 | 48.28 euro | ||
| Share price 31 December 2011 | 38.76 euro | ||
| Average number of shares traded | |||
| On daily basis (2011) | 28,103 | ||
| Yearly volume (2011) | 330.57 million euro | ||
| Velocity (2011) | 57.00% | ||
The Board of Directors decided to recommend to the general assembly to pay a dividend of 1.10 euro (gross) per share over 2011. This is 0.825 euro net, on withholding tax of 25%, and 0.869 on withholding tax of 21% (with VPP R strip). At 1.10 euro, the pay-out ratio is 18.49%.
2011 2010
| » Bank Degroof |
Siddy Jobe |
|---|---|
| » Exane BNP Paribas |
Arnaud Goossens |
| » Flemish Federation of Investors and Investor Clubs |
Gert De Mesure |
| » Goldman Sachs International |
Benjamin Moore Saurabh Lohariwala |
| » ING |
Emmanuel Carlier |
| » KBC Securities |
Nico Melsens |
| » Kempen & Co. |
Floris Oliemans |
| » Petercam |
Stefaan Genoe |
| » Rabobank International |
Micha Tiekink |
When the markets closed on 30 December 2011, the Barco share closed at 38.76 euro, 19.7% lower than the closing price of 48.28 euro at the end of 2010. However, things looked better at the beginning of 2011: after just 2 weeks into the year, the share price broke through the 50 euro barrier and then climbed steadily to its peak for 2011 – 59.50 euro on 3 May – supported by a first quarter growth, both in orders and in sales, of 36% year-on-year. After a short dip below 50 euro in the second half of June, the 50 euro (and higher) ground was regained up to the end of July, carried by the first half of 2011's 33% year-on-year increase in sales and an EBIT margin of 7.1% (compared to 3% the year before).
As of the beginning of August 2011, the macro-economic headwinds that struck stock markets globally also affected the Barco share. Until then, the Barco share had outperformed the BEL 20, Next 150, Eurostoxx 50, Eurostoxx Technology and Nasdaq-100 indices. For the rest of the year, however, the Barco share price remained more in line with the BEL 20
| » Communication of results 2H11 and FY11 |
9 February 2012 |
|---|---|
| » Analyst & Investor Day 2012 |
17 April 2012 |
| » Trading update 1Q12 |
25 April 2012 |
| » Annual General Shareholders meeting |
26 April 2012 |
| » Communication of results 1H12 |
20 July 2012 |
| » Trading update 3Q12 |
24 October 2012 |
Barco share price 2011
and Next 150 indices, catching up with the Eurostoxx 50 and Eurostoxx Technology only by the end of the year. During that same period, the Nasdaq-100 stayed on its level path, well out of reach of the Barco share price evolution and that of the European indices.
General trends in global investors' behavior overwhelmed the individual shareholders and investors who maintained their faith in the sustainability of Barco's profitable growth story. Consequently, the share dropped to a low of 32.05 euro on 23 November, ignoring the strong order intake Barco enjoyed throughout the second half of the year in spite of the negative economic climate.
But confidence slowly returned by the end of November: the decline from close to 60 euro to the low of 32 euro was turned around, and the share price finished at 38.76 euro at the end of 2011. Since then, the share price has kept rising towards 50 euro as it became clear to the financial
Barco / Bel 20 / Next 150
community that Barco had indeed produced one of the best years in its history, which the strong full-year results published on 9 February 2011 prove.
From the end of 2008 to 23 February 2012, the Barco share grew in value by 278.2% – a perfect illustration of the positive impact of the 3-year turn-around strategy implemented at the beginning of 2009. The only thing that has hampered this excellent growth has been the global macro-economic uncertainty.
As Barco continues on its path of sustainable growth, we thank our shareholders for their unwavering confidence in the company, its board of directors, its management and its employees.
A study of Barco's global shareholdership at 31 December 2011 identified ownership of 71.98% of the company, with identified institutional investors holding 66.19% of all shares and 5.79% being treasury shares held by the company.
In 2010, 59.4% of all shares were held by identified institutional investors. The increase can be attributed to Barco's continued efforts in meeting investors on road shows around the world and receiving them at the company's Customer Center in Belgium. The most remarkable evolution may very well be the significant increase of North American shareholdership. At the end of December 2011, Canadian identified institutional investors held 15.22% of all shares, compared to 8.61% the year before, while USA identified institutional investors increased their holdings from 17.03% to 20.00%. This indicates that, at least in Barco's case, North American fund managers are going against the reluctance to expose themselves to the Euro Zone economies. In Europe, percentages of shares held by institutional investors decreased in Belgium from 30.62% (in 2010) to 27.41% (in 2011), in the United Kingdom from 22.82% to 16.00%, in France from 9.89% to 6.45%, and in Germany from 5.67% to 5.45%.
Investment style did not change compared to 2010, with value investors still holding 31% of the shares held by institutional investors. The same applies to growth investors, who held 17% in 2011, about the same as the year before. However, the compelling discount compared to companies that can be considered as peers, combined with the strong full-year outlook, raised the percentage held by GARP (growth at reasonable price) investors from 18% in 2010 to 23% in 2011.
The top 10 holders remained fairly stable compared to 2010. Together they held around 35% of all shares.
The second half of 2011 proved to be a difficult period for investor relations teams in general, and Barco's IR team was no exception. The macro-economic environment made the global investor community quite cautious, so that the individual company's investment case was not always fully appreciated. This was certainly Barco's situation. However, Barco never stopped presenting its case to the investment community in a very open and transparent way. These efforts began to bear fruit towards the end of November, and the share price started climbing upward again.
Barco plans to hold its next Analyst & Investor Day on 17 April 2012, which will give the financial community the opportunity to become acquainted with the company's strategy for sustainable profitable growth in the future.
In February 2012, Carl Vanden Bussche assumed responsibility for Investor Relations at Barco, taking over from JP Tanghe, who held this responsibility for 14 years.
| IN THOUSANDS OF EURO | NOTE | 2011 | 2010 | 2009 |
|---|---|---|---|---|
| Net sales | 2 | 1,041,244 | 896,999 | 638,066 |
| Cost of goods sold | 4 | -728,313 | -609,484 | -470,115 |
| Gross profit | 4 | 312,932 | 287,516 | 167,951 |
| Research and development expenses | 4 | -74,650 | -71,371 | -69,234 |
| Sales and marketing expenses | 4 | -122,493 | -114,555 | -94,251 |
| General and administration expenses | 4 | -50,221 | -49,006 | -41,665 |
| Other operating income (expense) - net | 4 | 12,792 | -7,449 | 7,662 |
| EBIT before restructuring and impairment | 78,359 | 45,135 | -29,537 | |
| Restructuring and impairment costs | 6 | -10,000 | - | -39,386 |
| EBIT after restructuring and impairment | 68,359 | 45,135 | -68,923 | |
| Interest income | 912 | 912 | 3,803 | |
| Interest expense | -3,442 | -2,422 | -5,472 | |
| Income before taxes | 65,829 | 43,625 | -70,593 | |
| Income taxes | 7 | 10,407 | - | 6,383 |
| Result after taxes | 76,236 | 43,625 | -64,210 | |
| Share in the result of joint ventures and associates | 9 | -386 | - | - |
| Net income from continuing operations | 75,850 | 43,625 | -64,210 | |
| Net income from discontinued operations | 3 | - | - | 4,289 |
| Net income | 75,850 | 43,625 | -59,919 | |
| Non-controlling interest | 0 | 0 | 0 | |
| Net income attributable to the equity holder of the parent | 75,850 | 43,625 | -59,919 | |
| Earnings per share (in euro) | 8 | 6.32 | 3.66 | -5.02 |
| Diluted earnings per share (in euro) | 8 | 5.91 | 3.41 | -5.02 |
| Earnings (continuing) per share (in euro) | 8 | 6.32 | 3.66 | -5.38 |
| Diluted earnings (continuing) per share (in euro) | 8 | 5.91 | 3.41 | -5.38 |
The accompanying notes are an integral part of this income statement.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Net income | 75,850 | 43,625 | -59,919 |
| Exchange differences on translation of foreign operations (a) |
-1,787 | 9,000 | 830 |
| Net (loss)/gain on cash flow hedges | -550 | -1,949 | -229 |
| Income tax | - | 361 | 78 |
| Net (loss)/gain on cash flow hedges, net of tax | -550 | -1,589 | -151 |
| Other comprehensive income (loss) for the period, net of tax | -2,337 | 7,411 | 679 |
| Total comprehensive income for the period, net of tax, | 73,513 | 51,036 | -59,241 |
| attributable to equity holder of the parent |
The accompanying notes are an integral part of this income statement.
(a) Translation exposure gives rise to non-cash exchange gains/losses. Examples are foreign equity and other long-term investments abroad. These long term investments give rise to periodic translation gains/losses that are non-cash in nature until the investment is finally liquidated. The comprehensive income line commonly shows a positive result in case the foreign currency in countries where investments were made appreciates versus the euro, and a negative result in case the foreign currency depreciates. In 2011, negative exchange differences in the comprehensive income line were mainly booked on foreign operations held in Indian Rupee.
| IN THOUSANDS OF EURO | NOTE | 2011 | 2010 | 2009 |
|---|---|---|---|---|
| ASSETS | ||||
| Goodwill | 10 | 43,921 | 52,891 | 32,265 |
| Capitalized development cost | 11 | 69,020 | 59,378 | 54,434 |
| Other intangible assets | 12 | 14,565 | 8,573 | 5,204 |
| Land and buildings | 12 | 30,569 | 30,525 | 30,988 |
| Other tangible assets | 12 | 27,479 | 25,657 | 23,193 |
| Investments | 9 | 9,300 | 326 | 19,327 |
| Deferred tax assets | 13 | 56,763 | 41,742 | 32,125 |
| Other non-current assets | 15 | 19,134 | 17,339 | 6,109 |
| Non-current assets | 270,751 | 236,431 | 203,645 | |
| Inventory | 14 | 233,928 | 230,421 | 146,264 |
| Trade debtors | 15 | 187,114 | 200,983 | 134,805 |
| Other amounts receivable | 15 | 35,197 | 32,044 | 25,850 |
| Cash and cash equivalents | 16 | 79,165 | 46,041 | 45,901 |
| Prepaid expenses and accrued income | 8,412 | 8,780 | 9,092 | |
| Assets from discontinued operations | 3 | - | - | 6,918 |
| Current assets | 543,816 | 518,269 | 368,831 | |
| Total assets | 814,567 | 754,699 | 572,475 | |
| EQUITY AND LIABILITIES | ||||
| Equity attributable to equityholders of the parent | 18 | 460,703 | 395,590 | 344,264 |
| Non-controlling interests | - | 1 | 1 | |
| Equity | 460,703 | 395,591 | 344,265 | |
| Long-term debts | 16 | 19,014 | 12,674 | 11,906 |
| Deferred tax liabilities | 13 | 5,005 | 7,331 | 5,299 |
| Other long-term liabilities | 17 | 8,117 | 13,288 | 5,446 |
| Non-current liabilities | 32,136 | 33,293 | 22,652 | |
| Current portion of long-term debts | 16 | 1,691 | 2,643 | 2,393 |
| Short-term debts | 16 | 6,593 | 24,039 | 8,116 |
| Trade payables | 19 | 110,791 | 125,353 | 67,852 |
| Advances received on contracts in progress | 55,748 | 33,659 | 27,493 | |
| Tax payables | 21,556 | 23,574 | 12,203 | |
| Employee benefit liabilities | 51,741 | 47,598 | 28,450 | |
| Other current liabilities | 8,045 | 6,522 | 3,997 | |
| Accrued charges and deferred income | 23,488 | 14,154 | 10,801 | |
| Provisions | 20 | 42,075 | 48,273 | 38,824 |
| Liabilities from discontinued operations | 3 | - | - | 5,429 |
| Current liabilities | 321,728 | 325,815 | 205,558 | |
| Total equity and liabilities | 814,567 | 754,699 | 572,475 |
The accompanying notes are an integral part of this balance sheet.
The balance sheets per 31 December 2011 and 2010 do not contain discontinued operations, resulting in no differences between the reported and the continuing balance sheet. The balance sheet per 31 December 2009 includes discontinued operations, on which detailed information is included in Note 3. The above mentioned balance sheet relates to the continuing business for the 3 years, whereas the balance sheet from reported business is included in Note 26.
| IN THOUSANDS OF EURO | NOTE | 2011 | 2010 | 2009 | ||||
|---|---|---|---|---|---|---|---|---|
| Cash flow from operating activities | ||||||||
| EBIT after restructuring & impairment | 4 | 68,359 | 45,135 | -68,861 | ||||
| Impairment of capitalized development costs and goodwill | 4 | 11,328 | 1,278 | 31,144 | ||||
| Restructuring provision and charges (personnel) | -3,351 | -3,735 | -4,598 | |||||
| Amortization capitalized development cost | 4 | 36,448 | 39,058 | 40,849 | ||||
| Depreciation of tangible and intangible fixed assets | 12 | 14,088 | 13,282 | 12,768 | ||||
| Loss on tangible fixed assets | -85 | - | -856 | |||||
| Share options recognized as cost | 18 | 676 | 290 | 330 | ||||
| Share of profit/-loss of joint ventures | -386 | - | - | |||||
| Discontinued operations : cash flow from operating activities | - | - | -97 | |||||
| Gross operating cash flow | 127,076 | 95,308 | 10,679 | |||||
| Changes in trade receivables | 12,462 | -55,438 | 34,414 | |||||
| Changes in inventory | -2,483 | -68,240 | 43,670 | |||||
| Changes in trade payables | -14,693 | 55,340 | -1,995 | |||||
| Other changes in net working capital | 35,923 | 21,007 | 11,166 | |||||
| Discontinued operations : change in net working capital | 3 | - | - | -7,528 | ||||
| Change in net working capital | 31,208 | -47,331 | 79,728 | |||||
| Net operating cash flow | 158,284 | 47,977 | 90,408 | |||||
| Interest income/expense | -2,530 | -1,448 | -1,669 | |||||
| Income taxes | -10,718 | 393 | 461 | |||||
| Other non-operating results | - | -7 | - | |||||
| Discontinued operations : income taxes | 3 | - | - | 373 | ||||
| Cash flow from operating activities | 145,037 | 46,915 | 89,572 |
| IN THOUSANDS OF EURO | NOTE | 2011 | 2010 | 2009 |
|---|---|---|---|---|
| Cash flow from investing activities | ||||
| Expenditure on product development | 4 | -46,454 | -41,107 | -32,801 |
| Purchases of tangible and intangible fixed assets | 12 | -20,302 | -13,397 | -5,486 |
| Proceeds on disposals of tangible and intangible fixed assets | 3,245 | 863 | 1,228 | |
| Acquisition of Group companies, net of acquired cash | 1,2,25 | -9,316 | -9,876 | - |
| Disposal of Group companies, net of disposed cash | 1,2,25 | -1,460 | 1,976 | - |
| Other investing activities | 9 | -8,000 | 1 | -19,000 |
| Interest in joint-ventures | 9 | -974 | - | - |
| Discontinued operations : cash flow from investing activities | 3 | - | - | 22,774 |
| Cash flow from investing activities | -83,261 | -61,541 | -33,284 | |
| (including acquisitions and divestments) | ||||
| Cash flow from financing activities | ||||
| Dividends paid | -12,670 | - | - | |
| Share issue | 3,593 | - | - | |
| Acquisition of own shares | - | - | - | |
| Payments of long-term liabilities | -1,255 | -1,406 | -1,766 | |
| Proceeds from (+), payments of (-) short-term liabilities | -18,399 | 16,173 | -80,739 | |
| Cash flow from financing activities | -28,730 | 14,766 | -82,505 | |
| Net increase/-decrease in cash and cash equivalents | 33,046 | 141 | -26,217 | |
| Cash and cash equivalents at beginning of period | 46,042 | 45,901 | 72,119 | |
| Change in consolidation method | 77 | - | - | |
| Cash and cash equivalents at end of period | 79,164 | 46,042 | 45,901 |
The accompanying notes are an integral part of this statement.
| IN THOUSANDS OF EURO | Share capital and premium |
Retained earnings |
Share based payments |
Cumulative translation adjustment |
Cash flow hedge reserve |
Own shares |
Equity attributable to equityholders of the parent |
Non Controlling Interest |
Equity |
|---|---|---|---|---|---|---|---|---|---|
| Balance on 1 January 2009 | 185,319 | 298,461 | 2,858 | -38,587 | 764 | -45,641 | 403,174 | 2 | 403,176 |
| Net income | - | -59,919 | - | - | - | - | -59,919 | - | -59,919 |
| Other comprehensive income (loss) for the period, net of tax |
- | - | - | 830 | -151 | - | 679 | - | 679 |
| Share-based payment | - | - | 330 | - | - | - | 330 | - | 330 |
| Balance on 31 December 2009 | 185,319 | 238,542 | 3,188 | -37,757 | 613 | -45,641 | 344,264 | 1 | 344,265 |
| Balance on 1 January 2010 | 185,319 | 238,542 | 3,188 | -37,757 | 613 | -45,641 | 344,264 | 1 | 344,265 |
| Net income | - | 43,625 | - | - | - | - | 43,625 | - | 43,625 |
| Other comprehensive income (loss) for the period, net of tax |
- | - | - | 9,000 | -1,589 | - | 7,411 | - | 7,411 |
| Share-based payment | - | - | 290 | - | - | - | 290 | - | 290 |
| Balance on 31 December 2010 | 185,319 | 282,166 | 3,478 | -28,757 | -975 | -45,641 | 395,590 | 1 | 395,591 |
| Balance on 1 January 2011 | 185,319 | 282,166 | 3,478 | -28,757 | -975 | -45,641 | 395,590 | 1 | 395,591 |
| Net income | - | 75,850 | - | - | - | - | 75,850 | - | 75,850 |
| Dividend | - | -12,670 | - | - | - | - | -12,670 | - | -12,670 |
| Capital increase | 3,593 | - | - | - | - | - | 3,593 | - | 3,593 |
| Other comprehensive income (loss) for the period, net of tax |
- | - | - | -1,787 | -549 | - | -2,336 | -1 | -2,337 |
| Share-based payment | - | - | 676 | - | - | - | 676 | - | 676 |
| Balance on 31 December 2011 | 188,912 | 345,347 | 4,154 | -30,544 | -1,524 | -45,641 | 460,703 | - | 460,703 |
The accompanying notes are an integral part of this statement.
The consolidated financial statements of the Barco Group have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted for use in the EU. All standards and interpretations issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) effective year-end 2011 and adopted by the European Union are applied by Barco.
The consolidated financial statements are presented in thousands of euro and are prepared under the historical cost convention, except for the measurement at fair value of investments and derivative financial instruments. The financial statements were authorized for issue by the board of directors on 6 February 2012. The chairman has the power to amend the financial statements until the shareholders' meeting of 26 April 2012.
The consolidated financial statements comprise the financial statements of the parent company, Barco nv, and its controlled subsidiaries, after the elimination of all intercompany transactions.
Subsidiaries are consolidated from the date the parent obtains control until the date control ceases. Acquisitions of subsidiaries are accounted for using the purchase method of accounting. Control exists when Barco has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are prepared according to the parent's company reporting schedule, using consistent accounting policies.
Non-controlling Interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the income statement and within equity in the consolidated balance sheet, separately from shareholder's equity.
Investments in associated companies over which the company has significant influence (typically those that are 20-50% owned) are accounted for under the equity method of accounting and are carried in the balance sheet at the lower of the equity method amount and the recoverable amount, and the pro rata share of income (loss) of associated companies is included in income.
The company's interest in jointly controlled entities is recognized using the equity method, which involves recognizing a proportionate share of the joint ventures on the face of its income statement. The investment is presented as non-current asset on the face of the balance sheet.
Goodwill represents the excess of the cost of the acquisition over the fair value of identifiable net assets and contingent liabilities of a subsidiary or associated company at the date of acquisition.
Goodwill is carried at cost less any accumulated impairment losses.
Research and development costs are expensed as incurred, except for development costs, which relate to the design and testing of new or improved materials, products or technologies, which are capitalized to the extent that it is expected that such assets will generate future economic benefits and the recognition criteria of IFRS are met. Capitalized development costs are amortized on a systematic basis over their expected useful lives. General estimate of useful life is 2 years, unless a longer or shorter period can be justified. This period is not exceeding 4 years.
Intangible assets acquired separately are capitalized at cost.
Intangible assets acquired as part of a business combination are capitalized at fair value separately from goodwill if the fair value can be measured reliably on initial recognition. Other intangible assets are amortized on a straight-line basis not exceeding 5 years.
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Generally, depreciation is computed on a straight-line basis over the estimated useful life of the asset. The carrying amounts are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount.
| Estimated useful life is: | |
|---|---|
| »buildings | 20 years |
| »installations | 10 years |
| »production machinery | 5 years |
| »measurement equipment | 4 years |
| »tools and models | 3 years |
| »furniture | 10 years |
| »office equipment | 5 years |
| »computer equipment | 3 years |
| »vehicles | 5 years |
| »demo material | 1 to 3 years |
» leasehold improvements and finance leases: cfr underlying asset, limited to outstanding period of lease contract
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset is included in profit or loss in the year the asset is derecognized.
Finance leases, which effectively transfer to the Group substantially all risks and benefits incidental to ownership of the leased item, are capitalized as property, plant and equipment at the fair value of the leased property, or, if lower, at the present value of the minimum lease payments. The corresponding liabilities are recorded as long-term or current liabilities depending on the period in which they are due. Lease interest is charged to the income statement as a financial cost using the effective interest method. Capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.
Operating leases, where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term, are classified as operating leases. Operating lease payments are expressed in the income statement on a straight line basis over the lease term.
Investments are treated as financial assets available for sale and are initially recognized at cost, being the fair value of the consideration given and including acquisition costs associated with the investment. For investments quoted in an active market, the quoted market price is the best measure of fair value. For investments not quoted in an active market, the carrying amount is the historical cost, if a reliable estimate of the fair value cannot be made. An impairment loss is recorded when the carrying amount exceeds the estimated recoverable amount.
Other non-current assets include long-term interest-bearing receivables and cash guarantees. Such long-term receivables are accounted for as loans and receivables originated by the company and are carried at amortized cost. An impairment loss is recorded when the carrying amount exceeds the estimated recoverable amount.
Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in first out (FIFO) basis. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs of completing the sale. In addition to the cost of materials and direct labor, the relevant proportion of production overhead is included in the inventory values.
Revenue is recognized when it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
For product sales, revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed and determinable, and collectability is probable.
For contract revenue, the percentage of completion method is used, provided that the outcome of the contract can be assessed with reasonable certainty.
For sales of services, revenue is recognized by reference to the stage of completion.
Government grants related to development projects for which costs are capitalized, are classified as deferred income and recognized as income in proportion to the depreciation of the underlying fixed assets. Government grants related to research projects and other forms of government assistance are recognized as income upon irreversible achievement and by reference to the relevant expenses incurred.
Trade debtors and other amounts receivable are shown on the balance sheet at nominal value (in general, the original amount invoiced) less an allowance for doubtful debts. Such an allowance is recorded in operating income when it is probable that the company will not be able to collect all amounts due. Allowances are calculated on an individual basis, and on a portfolio basis for Groups of receivables that are not individually identified as impaired.
Cash and cash equivalents consist of cash on hand and balances with banks and short-term investments with an original maturity date or notice period of three months or less. It is the Group's policy to hold investments to maturity. All investments are initially recognized at fair value, which is the cost at recognition date. Gains and losses are recognized in income when the investments are redeemed or impaired, as well as through the amortization process.
Provisions are recorded when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made to the amount of the obligation.
The Group recognizes the estimated liability to repair or replace products still under warranty at the balance sheet date. The provision is calculated based on historical experience of the level of repairs and replacements.
A provision for restructuring is only recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly before the balance sheet date.
The transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit.
All loans and borrowings are initially recognized at cost, being the fair value of the consideration received net of issue costs associated with the loan/borrowing. Subsequent to initial recognition, interest-bearing loans and borrowings are stated at amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account any issue costs and any discount or premium on settlement.
Trade and other payables are stated at fair value, which is the cost at recognition date.
Employee benefits are recognized as an expense when the Group consumes the economic benefit arising from service provided by an employee in exchange for employee benefits, and as a liability when an employee has provided service in exchange for employee benefits to be paid in the future, General pension plans are defined contribution plans. Obligations for these plans are recognized as an expense in the income statement as incurred. Pension obligations caused by legal requirements and some exceptional cases where the additional pension plan includes defined benefit obligations, are treated as post employment benefits of a defined benefit type.
Transactions in foreign currencies are recorded at the rates of exchange prevailing at the date of transaction or at the end of the month before the date of the transaction. At the end of the accounting period the unsettled balances on foreign currency receivables and liabilities are valued at the rates of exchange prevailing at the end of the accounting period. Foreign exchange gains and losses are recognized in the income statement in the period in which they arise.
In the consolidated accounts all items in the profit and loss accounts of foreign subsidiaries are translated into euro at the average exchange rates for the accounting period. The balance sheets of foreign Group companies are translated into euro at the rates of exchange ruling at the year-end. The resulting exchange differences are classified in a separate component of 'other comprehensive income', until disposal of the investment.
Derivative financial instruments are recognized initially at cost, which is the fair value of the consideration given (in the case of an asset) or received (in the case of a liability) for it. Transaction costs are considered in the initial measurement of all financial assets and liabilities. Subsequent to initial recognition, derivative financial instruments are stated at fair value, The fair values of derivative interest contracts are estimated by discounting expected future cash flows using current market interest rates and yield curve over the remaining term of the instrument. The fair value of forward exchange contracts is their market price at the balance sheet date.
Derivative financial instruments that are either hedging instruments that are not designated or do not qualify as hedges are carried at fair value with changes in value included in the income statement.
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognized asset or liability, or a highly probable forecasted transaction, the effective part of any gain or loss on the derivative financial instrument is recognized directly in 'other comprehensive income' with the ineffective part recognized directly in profit and loss.
Current taxes are based on the results of the Group companies and are calculated according to local tax rules.
Deferred tax assets and liabilities are determined, using the liability method, for all temporary differences arising between the tax basis of assets and liabilities and their carrying values for financial reporting purposes. Tax rates used are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantially enacted at the balance sheet date.
Deferred tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carry-forward of unused tax credits and tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
Goodwill is reviewed for impairment at least annually. For other tangible and intangible assets, at each balance sheet date, an assessment is made as to whether any indication exists that assets may be impaired. If any such indication exists, an impairment test is carried out in order to determine if and to what extent a valuation allowance is necessary to reduce the asset to its value in use (the present value of estimated future cash flows) or, if higher, to its fair value less cost to sell. The fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length transaction less the costs to sell while value in use is the present value of the future cash flows expected to be derived from an asset. Recoverable amounts are estimated for individual assets or, if this is not possible, for the cash-generating unit to which the assets belong. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognized in the income statement. Reversal of impairment losses recognized in prior years is included as income when there is an indication that the impairment losses recognized for the asset are no longer needed or the need has decreased, except for impairment losses on goodwill, which are never reversed.
Barco created warrants for staff and non-executive directors as well as for individuals who play an important role for the company. According to the publication of IFRS2, the cost of share-based payment transactions is reflected in the income statement.
The warrants are valued at grant date, based on the share price at grant date, exercise price, expected volatility, dividend estimates, and interest rates. Warrant cost is taken into result on a straight-line basis from the grant date until the first exercise date.
The Group calculates both basic and diluted earnings per share in accordance with IAS 33, Earnings per share. Under IAS 33, basic earnings per share are computed using the weighted average number of shares outstanding during the period. Diluted earnings per share are computed using the weighted average number of shares outstanding during the period plus the dilutive effect of warrants outstanding during the period. As diluted earnings per share can not be higher than basic earnings per share, diluted earnings per share are kept equal to basic earnings per share in case of negative net earnings.
A discontinued operation is a component of the Group that either has been disposed of, or is classified as held for sale and represents a separate major line of business and is part of a single coordinated plan to dispose of a separate major line of business or is a subsidiary acquired exclusively with a view to resale.
The Group classifies a non-current asset (or disposal Group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Immediately before classification as held for sale, the Group measures the carrying amount of the asset (or all the assets and liabilities in the disposal Group) in accordance with applicable IFRSs. Then, on initial classification as held for sale, non-current assets and disposal Groups are recognized at the lower of their carrying amounts and fair value less costs to sell. Impairment losses are recognized for any initial or subsequent write-down of the asset (or disposal Group) to fair value less costs to sell.
The accounting policies adopted are consistent with those of the previous financial year except as follows:
The Group has interests in jointly controlled entities and accounts for these entities applying the equity method. The aggregate share of the profit or loss of the joint ventures is presented on the face of the income statement and the investment is presented as noncurrent asset on the face of the balance sheet.
The accounting policies adopted are consistent with those of the previous financial year except as follows.
The Group has adopted the following new and amended IFRS and IFRIC interpretations as of 1 January 2011:
» Improvements to IFRSs (Issued May 2010), effective 1 January 2011 The IFRS accounting standards adopted as from 2011 did not have a material impact on the consolidated financial statements of Barco,
Following new standards and interpretations have been issued as of the date of approval of these financial statements but were not yet effective on the balance sheet date:
Standards issued but not yet effective up to the date of issuance of the Group's financial statements are listed below:
Barco will apply the new standards and interpretations applicable for the Group as soon as these are effective. Barco did not elect for early application of these standards and interpretations. The adoption of these standards, interpretations and amendments to published standards will have no significant impact on the results of Barco.
We refer to the chapter 'Risk factors' on page 91 for an overview of the risks affecting businesses of the Barco Group.
| Argentina | Barco Argentina S.R.L. | c/o Grant Thornton Argentina, Avenida Corrientes 327 piso 3, C1043AAD Buenos Aires | 100% |
|---|---|---|---|
| Belgium | Barco Coordination Center NV | President Kennedypark 35, 8500 Kortrijk; BE 0431.157.278. RPR Kortrijk | 100% |
| Belgium | Barco Integrated Solutions NV | President Kennedypark 35, 8500 Kortrijk; BE 0429.790.271. RPR Kortrijk | 100% |
| Belgium | Barco Silex SA | Scientific Parc, rue du Bosquet 7, 1348 Ottignies, Louvain-La-Neuve; | |
| BE 0445.977.591. RPR Nivelles | 100% | ||
| Belgium | dZine NV | t Hoge 49, 8500 Kortrijk; BE 0447.294.615. RPR Kortrijk | 100% |
| Belgium | Innovative Designs NV | President Kennedypark 35, 8500 Kortrijk; BE 0427.422.976. RPR Kortrijk | 100% |
| Brazil | Barco Ltda. | Av. Dr Cardoso de Melo, 1855 - 8 Andar - Cj 81, Vila Olimpia, 04548-005 Sao Paulo | 100% |
| Colombia | Barco Colombia SAS | Avenida Chile, Carrera 7 N° 71-21, Piso 13 Torre B Oficina 1304, Bogota | 100% |
| Czech Republic | Barco Manufacturing s.r.o. | Billundská 2756, 272 01 Kladno | 100% |
| Denmark | Barco A/S | c/o Grant Thornton, Stockholmsgade 45, Postbox 869, 2100 Copenhagen | 100% |
| France | Barco SAS | 177 avenue Georges Clémenceau, Immeuble 'Le Plein Ouest', 92000 Nanterre | 100% |
| France | Barco Silex SAS | ZI Rousset-Peynier, Immeuble CCE-CD6, Route de Trets, 13790 Peynier | 100% |
| France | BarcoView Texen SAS | 7 rue Roger Camboulives, Parc Technologique de Basso Cambo, 31000 Toulouse | 100% |
| Germany | Barco Control Rooms GmbH | An der Rossweid 5, 76229 Karlsruhe | 100% |
| Germany | Barco GmbH | Greschbachstr. 5 a, 76229 Karlsruhe | 100% |
| Germany | Barco Orthogon GmbH | Hastedter Osterdeich 222, 28207 Bremen | 100% |
| Israel | Barco Electronic Systems Ltd. | 53 Etzel Street, 75706 Rishon Lezion | 100% |
| Italy | Barco S.r.l. | Via Monferrato 7, 20094 Corsico-MI | 100% |
| Italy | FIMI S.r.l. | c/o Studio Ciavarella, via Vittor Pisani n. 6, 20124 Milano | 100% |
| Mexico | Barco Visual Solutions S.A. de C.V. | Iglesia 2, Torre E, Piso 12, Desp. 1204 Col. Tizapan San Angel, 01090 D.F. Mexico | 100% |
| Netherlands | Barco B.V. | Schootense Dreef 22, 5708HZ Helmond | 100% |
| Norway | Barco Norway AS | Bogstadveien 30, 0355 Oslo | 100% |
| Poland | Barco Sp. z o.o. | Marywilska 16, 03-228 Warsaw | 100% |
| Russia | Barco Services OOO | ulitsa Kondratyuka, 3, 129515 Moscow | 100% |
| Spain | Barco Electronic Systems, S.A. | Travesera de las Corts 371, 08029 Barcelona | 100% |
| Sweden | Barco Sverige AB | Kyrkvägen 1, 192 72 Sollentuna | 100% |
| United Kingdom | Barco Ltd. | Atrium Court, The Ring, RG12 1BW Bracknell, Berkshire | 100% |
| United Kingdom | Voxar | Bonnington Bond, 2 Anderson Place, EH6 5NP Edinburgh, Scotland | 100% |
| Americas | |||
| Canada | Barco Visual Solutions, Inc. | 2000 Mansfield Drive, Suite 1400, Montreal, H3A 3A2 Quebec | 100% |
| USA | Barco Federal Systems LLC | 1209 Orange Street, 19801 Wilmington-DE | 100% |
| USA | Barco Lighting Systems, Inc. | 350 N. St. Paul St., 75201 Dallas-TX | 100% |
USA Barco, Inc. 1209 Orange Street, 19801 Wilmington-DE 100%
| Asia-Pacific | |||
|---|---|---|---|
| Australia | Barco Systems Pty. Ltd. | 2 Rocklea Drive, VIC 3207 Port Melbourne | 100% |
| China | Barco Trading (Shanghai) Co., Ltd. | Rm501, 180 Hua Shen Road, Wai Gao Qiao Free Trade Zone, Shanghai | 100% |
| China | Barco Visual (Beijing) Electronics Co., Ltd. | No. 16 Changsheng Road, Chang Ping Park, | |
| Zhong Guan Cun Science Park, Chang Ping District, 102200 Beijing | 100% | ||
| China | Barco Visual (Beijing) Trading Co., Ltd. | No. 16 Changsheng Road, Chang Ping Park, | |
| Zhong Guan Cun Science Park, Chang Ping District, 102200 Beijing | 100% | ||
| China | CFG Barco (Beijing) Electronics Co., Ltd. (a) No. 16 Changsheng Road, Chang Ping Park, | ||
| Zhong Guan Cun Science Park, Chang Ping District, 102200 Beijing | 58% | ||
| Hong Kong | Barco China (Holding) Ltd. | Suite 2808, 28/F., Central Plaza, 18 Harbour Road, Wanchai | 100% |
| Hong Kong | Barco Ltd. | Suite 2808, 28/F., Central Plaza, 18 Harbour Road, Wanchai | 100% |
| Hong Kong | Barco Visual Electronics Co., Ltd. | Suite 2808, 28/F., Central Plaza, 18 Harbour Road, Wanchai | 100% |
| India | Barco Electronic Systems Pvt. Ltd. | c/o Perfect Accounting & Shared Services P.Ltd., E-20, 1st & 2nd Floor, | |
| Main Market, Hauz Khas, 110016 New Delhi | 100% | ||
| Japan | Barco Co., Ltd. | Yamato International Bldg 8F, 5-1-1 Heiwajima, Ota-ku, 143-0006 Tokyo | 100% |
| Japan | Barco Toyo Co., Ltd. (a) | Yamato International Bldg 8F, 5-1-1 Heiwajima, Ota-ku, 143-0006 Tokyo | 50% |
| Malaysia | Barco Sdn. Bhd. | No. 13A, Jalan SS21/56B, Damansara Utama, 47400 Petaling Jaya, Selangor | 100% |
| Singapore | Barco Pte Ltd. | No. 10 Changi South Lane, #04-01 Ossia Building, 486162 Singapore | 100% |
| South-Korea | Barco Ltd. | Sungdo Venture Tower, 165-2, Samsung-dong, Gangnam-gu, 135-881 Seoul | 100% |
| Taiwan | Barco Ltd. | 11F., No. 102, Guangfu S. Rd., Da-an Dist., 10694 Taipei City | 100% |
(a) These companies are joint ventures and accounted for using the equity method,
Per 31 March 2011, Barco acquired the CineStore activities of cinema solutions provider XDC, based in Liège, Belgium. The acquisition is an extension of the Digital Cinema product offering of the Group and fits within Barco's broader strategy to move up in the value chain from digital projection supplier to provider of total cinema visualization solutions.
Barco mainly acquired the products, know-how and warranty obligations of the XDC CineStore business through an asset deal. The total acquisition cost amounts to 6.4 million euro and equals the fair value of the acquired net assets, which are as follows:
| IN THOUSANDS OF EURO | BEFORE ACQUISITION DATE |
4-01-2011 |
|---|---|---|
| Know-how | - | 4,702 |
| Other tangible and intangible assets | 763 | 600 |
| Total non-current assets | 763 | 5,302 |
| Inventory | 2,714 | 2,714 |
| Other current assets | - | 145 |
| Total current assets | 2,714 | 2,859 |
| Warranty provision | -1,964 | -2,547 |
| Total non-current liabilities | -1,964 | -2,547 |
| Total current liabilities | -225 | -225 |
| Net assets | 1,288 | 5,389 |
| Acquisition cost | - | 6,419 |
| Goodwill | - | 1,030 |
The total acquisition cost paid at closing of the deal amounts to 6.2 million euro. The contract further provides for two additional earn-out payments. The first additional earn-out payment is determined based on the number of servers, originally developed by XDC, sold to the XDC-group over the coming 4 years. The second earn-out payment is a percentage on the sales realized by Barco on all products sold to third parties within the framework of the Cinestore activities over the coming 4 years. There are no minimum or maximum earn-out payments foreseen in the contract. Per 31 December, 2011 the earn-out payments paid to XDC, so far, were allocated to goodwill. The goodwill calculation was based on a provisional assessment of the respective fair values.
The goodwill and the know-how recognized at acquisition is related to specific server technology developed by XDC. The total goodwill of 1.0 million euro is allocated to the Entertainment division.
In 2011 the Cinestore activities have contributed 1.7 million euro to the total turnover of the Group.
On 31 December, 2009 Barco closed the acquisition of 100% of the shares of the Italy-based display company FIMI Srl, which before was a fully owned subsidiary of Royal Philips Electronics. Through the acquisition Barco reaffirms its growth strategy in the medical market by further expanding its footprint and tapping into new market segments, such as mobile point of care devices. This deal also contains for Barco the starting point to build a client relationship with Philips.
In 2010 FIMI Srl has contributed 47.1 million euro to the total turnover of the Group, resulting into 4.1 million euro EBIT contribution. This contribution in the first year was negatively impacted by IFRS restatements recorded in the opening balance sheet. The IFRS restatements related to fair value adjustments on inventory and the valuation of the customer list, which is amortized over 5 years.
The acquisition has been accounted for using the acquisition method conform IFRS 3 Business Combinations (Revised). The following table summarizes the consideration paid for FIMI Srl and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date.
The total acquisition cost includes the amount paid at closing of 19.2 million euro and includes an earn-out payable of 10 million euro over the next five years. The earn-out equals to 35% of the cumulative net purchase value of the Philips Group with the Barco Group over the next five years and is limited to 2.5 million euro per year.
The goodwill and the customer list recognized at acquisition is related to the 'surprix' Barco was willing to pay because of access to the Philips Group and complementary technological expertise and talent of the FIMI workforce and the synergies expected to be achieved from integrating FIMI into the Medical division. The earn-out of 10 million euro is fully considered as additional goodwill at the moment of acquisition as there is a high probability that this amount will be reached over the coming 5 years. For 2010 and 2011, these earn-out conditions were already realized. The total goodwill of 15.3 million euro is allocated to the Healthcare division.
| IN THOUSANDS OF EURO | BEFORE ACQUISITION DATE |
1-01-2010 |
|---|---|---|
| Non-current assets | 4,630 | 9,097 |
| Intangible assets (customer list) | - | 5,000 |
| Capitalized development cost | 3,136 | 2,603 |
| Tangible assets and other intangible assets | 1,494 | 1,494 |
| Current assets | 16,676 | 17,468 |
| Inventory | 9,436 | 10,277 |
| Trade & other receivables | 7,240 | 7,191 |
| Non-current liabilities | -2,852 | -3,434 |
| Provisions | -3,875 | -2,796 |
| Net deferred tax (asset) / liabilities | 1,023 | -638 |
| Current liabilities | -10,226 | -10,526 |
| Cash | 81 | 81 |
| Net assets | 8,308 | 12,685 |
| Goodwill | - | 15,285 |
| Total acquisition cost | - | 27,970 |
In July 2010 Barco acquired 100% of the shares of the Belgium-based digital signage solutions company dZine NV. Through this acquisition, Barco broadens its offering of digital visualization products with the addition of advanced software tools for content creation and management. This acquisition fits within Barco`s strategy to position itself as a total value-added solutions provider in the digital signage market.
The total acquisition cost paid at closing amounts to 8.3 million euro. The contract further provides for two additional earn-out payments. The first additional earn-out payment of maximum 2 million euro is determined based on the net assets per 31 December, 2010 and depends on the 2010 EBITDA minus development capitalization. Per 31 December, 2010 the criteria for this additional earn-out have not been fulfilled. The second earn-out payment of maximum 5 million euro depends on the earn-out profit over the 3 year period 1 January, 2010 till 31 December, 2012. This second earn-out payment, if any, will be accounted for as remuneration.
In 2010 dZine has contributed 5.6 million euro to the total turnover of the Group, resulting in 0.8 million euro EBIT contribution. No important IFRS restatements have been accounted for in the opening balance sheet of dZine.
The acquisition has been accounted for using the acquisition method conform IFRS 3 Business Combinations (Revised). The following table summarizes the consideration paid for dZine and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date.
| IN THOUSANDS OF EURO | 1 July 2010 |
|---|---|
| Non-current assets | 1,423 |
| Capitalized development | 994 |
| Other non-current assets | 429 |
| Current assets | 2,626 |
| Inventory | 1,227 |
| Trade & other receivables | 1,399 |
| Non-current liabilities | -302 |
| Current liabilities | -1,089 |
| Cash | 300 |
| Net assets | 2,958 |
| Goodwill | 5,342 |
| Total acquisition cost | 8,301 |
The goodwill recognized at acquisition relates to new sales opportunities resulting from the combining of Barcos hardware know-how with dZines content creation and management software expertise. Benefits are expected to arise from the dZines core team which will function as Barcos center of competence for digital signage technology. The 5.3 million euro goodwill is allocated to the Ventures.
Per 17 March, 2010 Barco has acquired the products, intellectual property (IP) rights and know-how of Element Labs, an LED video systems expert based in Santa Clara, California. The total acquisition cost amounts to 1.9 million euro and equals the relative fair value of the acquired assets.
On 2 February, 2009, Barco closed the divestment of its Advanced Visualization (AVIS) activities to Toshiba Medical Systems Cooperation. Barco Group has received 27 million euro in cash, subject to adjustments, as stipulated in the contract, for which 4 million euro was put in escrow. The escrow has been cashed for 50% in April 2010 and the remaining 50% was cashed in July 2011. According to IFRS 5, the results and cash flows of the AVIS activities until 31 January 2009 are shown as a separate line 'discontinued operations'.
Beginning 2009, Barco launched a 3-phase plan to increase its performance. The first 2 phases, completed by the end of 2010, consisted of weathering the global economical and financial crisis, followed by resuming growth and restoring profitability. The third phase, initiated early 2011, aimed out preparing Barco for sustainable profitable growth. The first step in this process of redefining Barco was an analysis of its current activities, this lead to a structure of four core businesses and one group of ventures:
Management monitors the results of each of the core divisions and the ventures as 5 divisions separately so as to make decisions about resource allocation and performance assessment. Division performance is evaluated based on EBITDA. Group financing (including finance costs and finance revenue) and income taxes are managed on a group basis and are not allocated to the operating divisions.
As a consequence, the Group has aligned its segment reporting with this new business structure, resulting in 5 operating segments. Prior year financials have been restated for comparison reasons.
Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.
| IN THOUSANDS OF EURO | 2011 | 2010 | VARIANCE 2011-2010 |
||
|---|---|---|---|---|---|
| Net sales | 432,084 | 100.0% | 329,712 | 100.0% | 102,371 |
| external sales | 431,407 | 99.8% | 328,455 | 99.6% | 102,952 |
| interdivision sales | 676 | 0.2% | 1,257 | 0.4% | -581 |
| Cost of goods sold | -322,225 | -74.6% | -231,382 | -70.2% | -90,844 |
| Gross profit | 109,858 | 25.4% | 98,331 | 29.8% | 11,527 |
| EBIT | 53,982 | 12.5% | 50,672 | 15.4% | 3,310 |
| Amortization capitalized development | 5,811 | 1.3% | 6,494 | 2.0% | -683 |
| Depreciation TFA and software | 4,031 | 0.9% | 3,040 | 0.9% | 991 |
| EBITDA | 63,824 | 14.8% | 60,205 | 18.3% | 3,618 |
| Capitalized development | 8,839 | 2.0% | 6,804 | 2.1% | 2,036 |
| Capital expenditures TFA and software | 4,248 | 1.0% | 2,633 | 0.8% | 1,614 |
| Segment assets | 178,792 | 180,199 | |||
| Segment liabilities | 116,312 | 87,182 |
| IN THOUSANDS OF EURO | 2011 | 2010 | VARIANCE 2011-2010 |
||
|---|---|---|---|---|---|
| Net sales | 192,511 | 100.0% | 175,152 | 100.0% | 17,359 |
| external sales | 192,157 | 99.8% | 175,129 | 100.0% | 17,029 |
| interdivision sales | 354 | 0.2% | 24 | 0.0% | 330 |
| Cost of goods sold | -123,225 | -64.0% | -114,501 | -65.4% | -8,724 |
| Gross profit | 69,286 | 36.0% | 60,651 | 34.6% | 8,635 |
| EBIT | 23,226 | 12.1% | 19,619 | 11.2% | 3,607 |
| Amortization capitalized development | 6,501 | 3.4% | 5,580 | 3.2% | 921 |
| Depreciation TFA and software | 3,383 | 1.8% | 3,165 | 1.8% | 218 |
| EBITDA | 33,110 | 17.2% | 28,365 | 16.2% | 4,746 |
| Capitalized development | 10,914 | 5.7% | 17,696 | 10.1% | -6,782 |
| Capital expenditures TFA and software | 3,191 | 1.7% | 2,191 | 1.3% | 1,001 |
| Segment assets | 103,871 | 97,872 | |||
| Segment liabilities | 47,872 | 52,370 |
| IN THOUSANDS OF EURO | VARIANCE 2011 2011-2010 2010 |
||||
|---|---|---|---|---|---|
| Net sales | 214,361 | 100.0% | 184,818 | 100.0% | 29,543 |
| external sales | 213,946 | 99.8% | 184,685 | 99.9% | 29,260 |
| interdivision sales | 415 | 0.2% | 133 | 0.1% | 282 |
| Cost of goods sold | -142,320 | -66.4% | -110,736 | -59.9% | -31,584 |
| Gross profit | 72,041 | 33.6% | 74,082 | 40.1% | -2,041 |
| EBIT | 142 | 0.1% | -3,320 | -1.8% | 3,462 |
| Amortization capitalized development | 12,209 | 5.7% | 13,860 | 7.5% | -1,651 |
| Depreciation TFA and software | 3,830 | 1.8% | 4,218 | 2.3% | -388 |
| EBITDA | 16,180 | 7.5% | 14,758 | 8.0% | 1,422 |
| Capitalized development | 13,199 | 6.2% | 13,350 | 7.2% | -150 |
| Capital expenditures TFA and software | 9,461 | 4.4% | 5,664 | 3.1% | 3,797 |
| Segment assets | 158,135 | 142,160 | |||
| Segment liabilities | 65,439 | 65,343 |
| IN THOUSANDS OF EURO | 2011 | 2010 | VARIANCE 2011-2010 |
||
|---|---|---|---|---|---|
| Net sales | 115,770 | 100.0% | 117,921 | 100.0% | -2,151 |
| external sales | 115,672 | 99.9% | 117,461 | 99.6% | -1,789 |
| interdivision sales | 98 | 0.1% | 461 | 0.4% | -363 |
| Cost of goods sold | -79,696 | -68.8% | -77,553 | -65.8% | -2,143 |
| Gross profit | 36,074 | 31.2% | 40,368 | 34.2% | -4,294 |
| EBIT | 3,370 | 2.9% | 2,836 | 2.4% | 534 |
| Amortization capitalized development | 6,236 | 5.4% | 8,166 | 6.9% | -1,930 |
| Depreciation TFA and software | 2,045 | 1.8% | 1,967 | 1.7% | 77 |
| EBITDA | 11,651 | 10.1% | 12,969 | 11.0% | -1,319 |
| Capitalized development | 5,194 | 4.5% | 6,670 | 5.7% | -1,475 |
| Capital expenditures TFA and software | 2,324 | 2.0% | 1,551 | 1.3% | 772 |
| Segment assets | 104,407 | 100,368 | |||
| Segment liabilities | 28,424 | 25,593 |
| IN THOUSANDS OF EURO | 2011 | 2010 | VARIANCE 2011-2010 |
||
|---|---|---|---|---|---|
| Net sales | 88,221 | 100,0% | 92,125 | 100.0% | -3,904 |
| external sales | 88,062 | 99.8% | 91,270 | 99.1% | -3,208 |
| interdivision sales | 159 | 0.2% | 855 | 0.9% | -696 |
| Cost of goods sold | -62,775 | -71.2% | -77,978 | -84.6% | 15,203 |
| Gross profit | 25,446 | 28.8% | 14,147 | 15.4% | 11,299 |
| EBIT before goodwill impairment | -2,360 | -2.7% | -24,672 | -26.8% | 22,312 |
| Goodwill impairment | -10,000 | -11.3% | - | -10,000 | |
| EBIT after goodwill impairment | -12,360 | -14.0% | -24,672 | -26.8% | 12,312 |
| Amortization capitalized development | 7,020 | 8.0% | 6,236 | 6.8% | 784 |
| Depreciation TFA and software | 799 | 0.9% | 891 | 1.0% | -92 |
| EBITDA | 5,459 | 6.2% | -17,545 | -19.0% | 23,004 |
| Capitalized development | 8,307 | 9.4% | 6,787 | 7.4% | 1,520 |
| Capital expenditures TFA and software | 1,079 | 1.2% | 1,357 | 1.5% | -278 |
| Segment assets | 73,292 | 106,983 | |||
| Segment liabilities | 24,955 | 36,575 |
| IN THOUSANDS OF EURO | 2011 | 2010 |
|---|---|---|
| EXTERNAL SALES | ||
| Entertainment | 431,407 | 328,455 |
| Healthcare | 192,157 | 175,129 |
| Control Rooms and Simulation | 213,946 | 184,685 |
| Defense and Aerospace | 115,672 | 117,461 |
| Ventures | 88,062 | 91,270 |
| Total external sales segments | 1,041,244 | 896,999 |
| IN THOUSANDS OF EURO | 2011 | 2010 |
|---|---|---|
| NET INCOME | ||
| EBIT before goodwill impairment | ||
| Entertainment | 53,982 | 50,672 |
| Healthcare | 23,226 | 19,619 |
| Control Rooms and Simulation | 142 | -3,320 |
| Defense and Aerospace | 3,370 | 2,836 |
| Ventures | -2,360 | -24,672 |
| Goodwill impairment | ||
| Ventures | -10,000 | - |
| EBIT after restructuring & impairment | ||
| Entertainment | 53,982 | 50,672 |
| Healthcare | 23,226 | 19,619 |
| Control Rooms and Simulation | 142 | -3,320 |
| Defense and Aerospace | 3,370 | 2,836 |
| Ventures | -12,360 | -24,672 |
| Total EBIT after restructuring & impairments | 68,359 | 45,135 |
| Interest income (expense) - net | -2,530 | -1,510 |
| Income taxes | 10,407 | - |
| Net income from continuing operations | 76,236 | 43,625 |
| Share in the result of joint ventures and associates | -386 | |
| Net income | 75,850 | 43,625 |
| Non-controlling interest | ||
| Net Income attributable to equityholders of the parent | 75,850 | 43,625 |
| ASSETS | ||
| Segment assets | ||
| Entertainment | 178,792 | 180,199 |
| Healthcare | 103,871 | 97,872 |
| Control Rooms and Simulation | 158,135 | 142,160 |
| Defense and Aerospace | 104,407 | 100,368 |
| Ventures | 73,292 | 106,983 |
| Total segment assets | 618,496 | 627,582 |
| LIABILITIES | ||
| Segment liabilities | ||
| Entertainment | 116,312 | 87,182 |
| Healthcare | 47,872 | 52,370 |
| Control Rooms and Simulation | 65,439 | 65,343 |
| Defense and Aerospace | 28,424 | 25,593 |
| Ventures | 24,955 | 36,575 |
| Total segment liabilities | 283,002 | 267,063 |
Management directs sales of the Group based on the regions to which the goods are shipped or the services are rendered and has three reportable regions: Europe, Middle East, Africa and Latin America (EMEALA), North America (NA) and Asia-Pacific (APAC).
We refer to 'Comments on the results' on page 94 for a split of revenue from external customers based on the geographical location of the customers to whom the invoice is issued.
There is no significant (i.e. representing more than 30% of the Group's revenue) concentration of Barco's revenues with one customer.
Below table gives an overview of the assets per region and the most important capital expenditures in non-current assets per region:
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 | |||
|---|---|---|---|---|---|---|
| Total assets | ||||||
| Europe - Middle East - Africa - Latin America | 516,565 | 63.4% | 484,470 | 64.2% | 363,200 | 63.4% |
| North America | 150,030 | 18.4% | 140,584 | 18.6% | 100,841 | 17.6% |
| Asia-Pacific | 130,566 | 16.0% | 122,983 | 16.3% | 88,489 | 15.5% |
| Group | 17,406 | 2.1% | 6,662 | 0.9% | 19,945 | 3.5% |
| Total | 814,567 | 100.0% | 754,699 | 100.0% | 572,475 | 100.0% |
| Capitalized development | ||||||
| Europe - Middle East - Africa - Latin America | 38,947 | 83.8% | 35,545 | 86.5% | 25,721 | 78.4% |
| North America | 5,871 | 12.6% | 4,027 | 9.8% | 4,880 | 14.9% |
| Asia-Pacific | 1,635 | 3.5% | 1,535 | 3.7% | 827 | 2.5% |
| Group | - | 0.0% | - | 0.0% | 1,374 | 4.2% |
| Total | 46,454 | 100.0% | 41,107 | 100.0% | 32,801 | 100.0% |
| Purchases of tangible and intangible fixed assets | ||||||
| Europe - Middle East - Africa - Latin America | 16,213 | 79.9% | 6,307 | 57.2% | 6,702 | 85.3% |
| North America | 1,556 | 7.7% | 667 | 6.1% | 397 | 5.1% |
| Asia-Pacific | 2,533 | 12.5% | 4,044 | 36.7% | 756 | 9.6% |
| Total | 20,302 | 100% | 11,019 | 100% | 7,855 | 100% |
Per 31 December, 2011 and 31 December, 2010, there are no discontinued operations included in the consolidated income statement, cash flow statement or balance sheet.
In 2009, Barco realized a net gain of 4.3 million euro relating to discontinued operations, relating to the sale of Barco's Advanced Visualization (AVIS) business.
The income statement of the discontinued operations in 2009 was composed as follows:
| IN THOUSANDS OF EURO | 2009 |
|---|---|
| Revenues | 499 |
| Expenses | -887 |
| Income before taxes | -387 |
| Income taxes (a) | -2,883 |
| Non-operating result | 7,560 |
| Net income from discontinued operations | 4,289 |
| Earnings per share for profit from discontinued operations | |
| basic | 0.36 |
| diluted | 0.34 |
(a) Income taxes relate to the gain on the sold Advanced Visualization (AVIS) activities.
The cash flow statement of 2009 contains 15.5 million euro positive net cash flows relating to discontinued operations, consisting of the cash flow generated by Barco's Advanced Visualization (AVIS) group including the part of the sales price (23 million euro) which had already been received. The remaining part of the sales price, 4 million euro was put in escrow, whereof 50% has been received in 2010 and 50% in 2011. The escrow amount received in 2011 and 2010 is included in the line 'Disposal of group companies, net of disposed cash' in the Cash flow statement of the Group. We refer to note 25 for more details.
The cash flow statement relating discontinued operations is composed as follows:
| IN THOUSANDS OF EURO | 2009 |
|---|---|
| Cash flow from operating activities | |
| EBIT | -387 |
| Amortization capitalized development cost | 253 |
| Depreciation of tangible and intangible fixed assets | 12 |
| Gains and losses on tangible fixed assets | 26 |
| Gross operating cash flow | -97 |
| Changes in trade receivables | 1,815 |
| Changes in inventory | 148 |
| Changes in trade payables | -131 |
| Other changes in net working capital | -9,360 |
| Change in net working capital | -7,528 |
| Net operating cash flow | -7,625 |
| Income taxes | 373 |
| Cash flow from operating activities | -7,252 |
| Cash flow from investing activities | |
| Expenditure on product development | -179 |
| Disposal of Group companies, net of disposed cash | 22,953 |
| Cash flow from investing activities | 22,774 |
| Cash flow from discontinued operations | 15,522 |
The consolidated balance sheet contains per 31 December 2009 assets classified as discontinued operations for an amount of 6.9 million euro. The major classes of assets are the following:
| IN THOUSANDS OF EURO | 2009 |
|---|---|
| Deferred tax assets | 1,918 |
| Other non-current assets | 3,916 |
| Other amounts receivable external | 1,081 |
| Total | 6,915 |
The consolidated balance sheet contains per 31 December 2009 liabilities classified as discontinued operations for an amount of 5.4 million euro, fully related to deferred tax liabilities. Taxes were paid on the sale of the Advanced Visualization (AVIS) business for a total amount of 3.4 million euro. The amount paid is included in the line 'Disposal of group companies, net of disposed cash' in the Cash flow statement of the Group. We refer to note 25 for more details.
See note 1.2 for further information on divestments.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Sales | 1,041,244 | 896,999 | 638,066 |
| Cost of goods sold | -728,313 | -609,484 | -470,115 |
| Gross profit | 312,932 | 287,516 | 167,951 |
| Gross profit as % of sales | 30.1% | 32.1% | 26.3% |
| Indirect costs | -247,364 | -234,932 | -205,150 |
| Other operating income (expenses) - net | 12,792 | -7,449 | 7,662 |
| EBIT before restructuring and goodwill impairment | 78,359 | 45,135 | -29,537 |
| EBIT before restructuring and goodwill impairment as % of sales | 7.5% | 5.0% | -4.6% |
The gross profit increased with 25.4 million euro in 2011 compared to 2010, resulting from a sales growth of 16% compared to last year. The gross profit margin however decreased with two percentage points to 30.1% in 2011 versus 32.1% in 2010.
We refer to note 2 'Segment Information' and to the chapter 'Comments on the results' for more explanation on sales and income from operations (see page 94)
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Research and development expenses (a) | -74,650 | -71,371 | -69,234 |
| Sales and marketing expenses (b) | -122,493 | -114,555 | -94,251 |
| General and administration expenses ( c ) | -50,221 | -49,006 | -41,665 |
| Indirect costs | -247,364 | -234,932 | -205,150 |
| Other operating income (expenses) - net (d) | 12,792 | -7,449 | 7,662 |
| Indirect costs and other operating income (expenses) - net | -234,572 | -242,381 | -197,488 |
Indirect costs, excluding the impact of net capitalized development expenses represent 24% of sales in 2011, compared to 26% in 2010 and 31% in 2009 and remain well under control.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Research & development expenses | 83,327 | 72,142 | 61,186 |
| Capitalized development expenses | -46,454 | -41,107 | -32,801 |
| Amortization capitalized development expenses | 36,448 | 39,058 | 40,849 |
| Impairment of capitalized development expenses | 1,328 | 1,278 | - |
| Capitalized development, net | -8,677 | -771 | 8,048 |
| Research and development expenses, net | 74,650 | 71,371 | 69,234 |
Research and development cash expenses represent 8.0% of sales in 2011, compared to 8.0% in 2010 and 9.6% in 2009. In 2011 the higher capitalization (56% of total research and development expenses in 2011, 57% in 2010; 54% in 2009) of development expenses compared to amortization expenses had a material positive impact on the income from operations (EBIT) of 8.7 million euro (compared to a positive impact of 0.8 million euro in 2010 and a negative impact of 8 million euro in 2009).
In 2010 and 2011, the impairment costs on capitalized development expenses have been presented on the line 'Research and development expenses'. In 2009, the impairment losses have been included in 'Restructuring and impairment costs', because the 2009 impairment losses related to the overall restructuring program executed within the Barco Group. For more explanation on impairment costs on capitalized development we refer to note 11.
Research and development activities are spread over the divisions as follows:
| IN THOUSANDS OF EURO | GROUP | CONTROL ROOMS AND SIMULATIONS |
ENTERTAINMENT |
|---|---|---|---|
| Research & development expenses | 83,327 | 24,192 | 15,639 |
| Capitalized development expenses | -46,454 | -13,199 | -8,839 |
| Amortization capitalized development expenses | 36,448 | 11,906 | 5,395 |
| Impairment of capitalized development expenses | 1,328 | 302 | 416 |
| Capitalized development, net | -8,677 | -990 | -3,028 |
| Research & development expenses | 74,650 | 23,202 | 12,611 |
| IN THOUSANDS OF EURO | HEALTCARE | DEFENSE AND AEROSPACE | VENTURES |
|---|---|---|---|
| Research & development expenses | 19,955 | 10,161 | 13,381 |
| Capitalized development expenses | -10,914 | -5,194 | -8,307 |
| Amortization capitalized development expenses | 6,281 | 6,236 | 6,630 |
| Impairment of capitalized development expenses | 220 | 0 | 390 |
| Capitalized development, net | -4,413 | 1,042 | -1,287 |
| Research & development expenses | 15,541 | 11,202 | 12,094 |
| IN THOUSANDS OF EURO | 2011 | % OF SALES | 2010 | % OF SALES | 2009 | % OF SALES |
|---|---|---|---|---|---|---|
| Sales & marketing expenses | 122,493 | 11.8% | 114,555 | 12.8% | 94,251 | 14.8% |
Sales and marketing expenses include all indirect costs related to the sales and customer service organization which are not billed as part of a product or service to the customer as well as the costs related to regional or divisional marketing activities.
| IN THOUSANDS OF EURO | 2011 | % OF SALES | 2010 | % OF SALES | 2009 | % OF SALES | |
|---|---|---|---|---|---|---|---|
| General and administration expenses | 50,221 | 4.8% | 49,006 | 5.5% | 41,665 | 6.5% |
General and administration expenses include the costs related to general and divisional management, finance and accounting, information technology, human resources and investor relations.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Exchange gains and losses (net) | 2,563 | -3,093 | 683 |
| Bank charges | -2,021 | -3,188 | -1,151 |
| Bad debt provisions (net of write-offs and reversals of write-offs) | 1,991 | -2,358 | 1,480 |
| Other provisions (net of additions and reversals of provisions) | 4,115 | -2,333 | 2,707 |
| Cost of share-based payments | -676 | -290 | -330 |
| Gains on disposal of tangible fixed assets | 278 | 89 | 1,082 |
| Rental income | 704 | 1,007 | 399 |
| Investment grants | 6,433 | 1,978 | 2,764 |
| Other (net) | -595 | 740 | 28 |
| Total | 12,792 | -7,449 | 7,662 |
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Sales | 1,041,244 | 896,999 | 638,066 |
| Material cost | -585,245 | -502,969 | -393,611 |
| Services and other costs | -137,461 | -70,661 | -61,490 |
| Personnel cost | -247,562 | -258,276 | -199,348 |
| Capitalized development cost | 46,454 | 41,107 | 32,801 |
| Amortization and impairment of capitalized development | -37,776 | -40,336 | -40,849 |
| Depreciation property, plant, equipment and software | -14,088 | -13,282 | -12,768 |
| Other operating income (expense) - net (note 4) | 12,792 | -7,449 | 7,662 |
| EBIT before restructuring and impairment | 78,359 | 45,135 | -29,537 |
The table below provides information on the major items contributing to the EBIT, categorized by nature.
Personnel cost includes the cost for temporary personnel for an amount of 6.2 million euro (in 2010 8.2 million euro, in 2009 5.8 million euro). Average number of employees in 2011 was 3,527 (versus 3,296 in 2010 and 3,310 in 2009), including 2,487 white-collars (in 2010 2,345; in 2009: 2,367) and 1,040 blue-collars (in 2010: 951 and in 2009: 943).
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Restructuring costs (a) | - | - | 6,086 |
| Impairment on goodwill (note 10) | 10,000 | - | 25,000 |
| Impairment on contracts in progress (CIP) (b) | - | - | 2,156 |
| Impairment on capitalized development (note 11) | - | - | 6,144 |
| Total | 10,000 | - | 39,386 |
In 2011, an impairment cost of 10 million euro has been recognized on goodwill. For more explanation on the impairment on goodwill we refer to note 10.
An impairment loss of 1.3 million euro relating to capitalized development is included in the income statement line 'Research and development expenses' in 2011 and of 1.3 million euro in 2010 (see note 4 and note 11). In 2010, no restructuring and impairment costs have been booked on the income statement line 'Restructuring and impairment costs'.
For more explanation on the impairment on capitalized development we refer to note 11.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 | |
|---|---|---|---|---|
| Current versus deferred income taxes | ||||
| Current income taxes | -6,647 | -6,969 | 10,216 | |
| Deferred income taxes | 17,054 | 6,969 | -3,833 | |
| Income taxes | 10,407 | - | 6,383 | |
| Income taxes versus income before taxes | ||||
| EBIT after restructuring and impairment | 68,359 | 45,135 | -68,923 | |
| Interest income (expense) - net | -2,530 | -1,510 | -1,669 | |
| Other non-operating income (expense) - net | - | - | - | |
| Income before taxes | 65,829 | 43,625 | -70,593 | |
| Income taxes | 10,407 | - | 6,383 | |
| Effective income tax rate | 15.8% | 0.0% | 9.0% | |
| Income before taxes | 65,829 | 43,625 | -70,593 | |
| Theoretical tax rate | 34% | 34% | 34% | |
| Theoretical tax credit/(cost) | -22,382 | -14,832 | 24,002 | |
| Non deductible expenses for tax purposes | ||||
| Impairment of goodwill | -3,399 | - | -8,498 | |
| Other non-deductible expenses | -1,295 | -1,290 | -1,148 | |
| Government grants exempt from tax | 1,764 | - | - | |
| Patent income deduction (PID) | (c) | 9,689 | - | - |
| Notional interest deduction (NID) | 5,028 | 6,726 | 9,763 | |
| Investment allowances | (a) | 741 | 1,620 | 2,337 |
| Set-up of deferred tax assets, not recognised in prior years | (b) | 16,262 | 10,841 | 380 |
| Deferred tax assets, not recognised in current year | (b) | -117 | -2,723 | -26,747 |
| Effect of different tax rates in foreign companies | 2,138 | 151 | 603 | |
| Tax adjustments related to prior periods | 1,978 | -493 | 5,691 | |
| Reported taxes related to current income before taxes | 10,407 | - | 6,383 |
(a) Spread taxation on capital expenditure and research and development costs of prior years
(b) See note 13
(c) The PID is applicable in Barco NV as of fiscal year 2010. The deduction in our consolidated figures is only included as from 2011 upon obtaining the formal approval from the tax authorities.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Net income from continuing operations | 75,850 | 43,625 | -64,210 |
| Weighted average of shares | 11,995,483 | 11,931,992 | 11,931,992 |
| Basic earnings per share (in euro) | 6.32 | 3.66 | -5.38 |
| Net income from discontinued operations | - | - | 4,289 |
| Weighted average of shares | 11,995,483 | 11,931,992 | 11,931,992 |
| Basic earnings per share (in euro) | - | - | 0.36 |
| Basic earnings per share | 6.32 | 3.66 | -5.02 |
| Net income from continuing operations | 75,850 | 43,625 | -64,210 |
| Weighted average of shares (diluted) | 12,834,721 | 12,782,566 | 12,710,845 |
| Diluted earnings per share (in euro) (a) | 5.91 | 3.41 | -5.38 |
| Net income from discontinued operations | - | - | 4,289 |
| Weighted average of shares (diluted) | 12,834,721 | 12,782,566 | 12,710,845 |
| Diluted earnings per share (in euro) | - | - | 0,34 |
| Diluted earnings per share (a) | 5.91 | 3.41 | -5.02 |
(a) The difference between the weighted average of shares and weighted average of shares (diluted) is due to exercisable warrants. As diluted earnings per share can not be higher than basic earnings per share, diluted earnings are kept equal to basic earnings per share in case of net losses instead of net income.
For more detailed information concerning the shares and warrants, please refer to note 18.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 | |
|---|---|---|---|---|
| Investments | (a) | 8,327 | 326 | 19,327 |
| Interest in joint ventures | (b) | 973 | - | - |
| Total investments | 9,300 | 326 | 19,327 |
(a) In 2011 and 2010 investments represent entities in which Barco owns less than 20% of the shares. In 2009 investments also included the acquisition of 100% of the shares of Fimi, which took place on 31 December 2009, but the effective control was only transferred on 1 January 2010.
(b) The Group has a 50% interest in Barco Toyo Medical Systems Japan Co. a jointly controlled entity which is part of the Healthcare division and a 58% interest in CFG Barco (Beijing) Electronics Co., LTD, a jointly controlled entity which is part of the Entertainment division.
The Group's share of the assets and liabilities as at 31 December 2011 and 2010 and 2009 and income and expenses of the jointly controlled entities for the year ended 31 December 2011 and 2010 and 2009. which are accounted for using the equity method:
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Share of the joint ventures' balance sheet: | |||
| Current assets | 6,652 | 378 | 151 |
| Non-current assets | 113 | - | - |
| Current liabilities | 5,792 | 306 | 56 |
| Equity | 973 | 72 | 95 |
| Share of the joint ventures' revenue and profit: | |||
| Sales | 3,632 | 277 | 202 |
| Gross profit | 389 | 48 | 59 |
| EBIT | -411 | -31 | 34 |
| Profit/(Loss) of the year | -386 | -42 | 22 |
The Group has no share of any contingent liabilities or capital commitments as at 31 December 2011, 2010 and 2009.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| At cost | |||
| On 1 January | 79,027 | 58,401 | 58,401 |
| Acquisitions | 1,030 | 20,626 | - |
| On 31 December | 80,057 | 79,027 | 58,401 |
| Impairment | - | - | - |
| On 1 January | 26,136 | 26,136 | 1,136 |
| Impairment losses | 10,000 | - | 25,000 |
| On 31 December | 36,136 | 26,136 | 26,136 |
| Net book value | |||
| On 1 January | 52,892 | 32,265 | 57,265 |
| On 31 December | 43,921 | 52,891 | 32,265 |
Acquisitions in 2011 fully consist of the CineStore business combination. In 2010, acquisitions include goodwill related to the acquisition of FIMI for 15.3 million euro and dZine for 5.3 million euro. For more detailed information concerning these acquisitions, please refer to note 1.2.
In 2011 the impairment tests on goodwill resulted in impairment charges recorded for an amount of 10 million euro, fully related to Barco's Ventures, more specifically to Barco Lighting. Also in 2009, the impairment tests on goodwill resulted in impairment charges recorded for an amount of 25 million euro, related to the Ventures division, at that time part of the Media, Entertainment & Simulation business group.
The global recession, which started end of 2008, had a profound impact on the fundamentals of the Media, Entertainment & Simulation business group. Total spending in the events markets dropped to less than half of levels recorded before the crisis and the conversion of analog to digital billboards came to a virtual standstill (-80%). Consequently, the value of the acquisition Barco made in prior years to strengthen its position in these markets dropped very substantially which in turn fuelled the need for impairments on goodwill. In the years after 2009, the events market recovered but Barco Lighting was not able so far to achieve a sales growth minimum required to assure a break-even EBIT result.
In 2010 no impairments on goodwill occurred.
See below for explanations on the impairment testing performed.
Goodwill acquired in a business combination is allocated on acquisition to the cash-generating units that are expected to benefit from that business combination. These cash-generating units correspond to the division level. Therefore, impairment testing is performed at division level. An exception is made for the Ventures, where the impairment testing is performed on a business unit level, which is one level below the division level. Barco identified 5 activities in its portfolio, which needed more focus and autonomy in order to enhance their performance and to stimulate growth; these became Barco's Ventures. An impairment test is performed for each of the activities containing goodwill.
The carrying amount of goodwill (after impairment) has been allocated to the cash generating units as follows (in thousands of euro):
| CASH GENERATING UNITS | 2011 | 2010 |
|---|---|---|
| Control rooms and Simulation | 6,145 | 6,145 |
| Entertainment | 7,304 | 6,274 |
| Healthcare | 17,843 | 17,843 |
| Defense and Aerospace | 5,684 | 5,684 |
| Ventures | 6,945 | 16,944 |
| Total goodwill (net book value) | 43,921 | 52,891 |
The goodwill (net book value) of Barco's Ventures relates to the goodwill on dZine and Orthogon.
The Group performed its annual impairment test in the fourth quarter of 2011 consistently with prior years.
The Group looks at the relationship between its market capitalization and its book value, amongst other factors, when reviewing the indicators of impairment. At 31 December 2009, the market capitalization of the Group was close to the book value of its equity, indicating a potential need for impairment of goodwill and impairment of the assets of the operating segments. This was no longer the case at 31 December 2010 as the market capitalization then exceeded the equity of the Group with more than 30%. Whilst, in 2011, the market capitalization came very close to the book value of the equity of the Group, management considers this as an impairment indicator. However, after thorough analysis, management
believes that no additional impairment should be recognized and is of the opinion that it is purely the result of the current financial crisis increasing the volatility of the stock market price of our shares.
The annual impairment tests were performed for each cash-generating unit. The recoverable amount for each of the cash generating units has been determined based on a value-in-use calculation using cash flow projections generated by divisional management covering a five year period. Due to the level of uncertainty around future years, these financial projections have been adjusted to more conservative levels for the purpose of our impairment testing. The pre-tax discount rate applied to projected cash flows is 10.2% (2010: 10.0%, 2009: 10.5%) and cash flows beyond the five year period are extrapolated using a conservative growth rate of 0% (2010: 0%, 2009: 0%).
Based upon the outcome of the impairment tests, an impairment loss of 10 million euro has been recognized relating to Barco's Ventures, more specifically on Barco Lighting. Management did not identify impairments for the other cash-generating units.
The calculation of value-in-use for all divisions is most sensitive to the following assumptions:
» Sales growth rate used during the projection period;
» EBIT;
» Growth rate used to extrapolate cash flows beyond the budget period; » Discount rates;
Sales growth rate used during the projection period – Sales growth rate used over the projected period has been kept conservatively at zero percent for the cash-generating units within the business segments Healthcare and Entertainment, since even then there is no risk for impairment. For all other cash-generating units a growth rate of 3% per year is assumed for the 5 year period.
EBIT as percentage of sales – EBIT as percentage of sales is based on average percentages over the three years preceding the start of the budget period. EBIT levels increase over the projected period for anticipated efficiency improvements. Efficiency improvements can be cost reductions as well as margin improvements. An increase of 1 percentage point per annum was applied for all divisions, except for the Healthcare, Entertainment and Control Rooms & Simulation division.
For the Healthcare and Entertainment division and for the Venture Orthogon, a stable EBIT as percentage of sales is kept conservatively at 10% over the whole budget period, which is below the average over the last three years, since even then there is no risk for impairment.
For the Control Rooms & Simulation division, which had a negative EBIT level in 2010 and break-even level in 2011, a break-even EBIT for 2012 is forecasted. In the first year an increase of 2 percentage points was applied and for the following years an increase of 1.5 percentage point per annum was applied.
Growth rate estimates – The long-term rate used to extrapolate the projection has been kept conservatively at zero % for all divisions.
Discount rates – Discount rates reflect the current market assessment of the risks specific to Barco Group. The discount rate was estimated based on a (long-term) pre-tax cost of capital, the risks being implicit in the cash flows. The long term discount rate was determined on Group level and amounted to 10.2% for the year 2011 and has been applied to all cash-generating units.
With regard to the assessment of value-in-use of the Healthcare and Entertainment division and Orthogon (part of the Ventures), management believes, based on sensitivity analysis performed, that no reasonable possible change in any of the above key assumptions would cause the carrying value of the unit to materially exceed its recoverable amount.
For the other divisions, per 31 December 2011, the estimated recoverable amount, after impairment of goodwill and capitalized development recorded, is closer to its carrying value and, consequently, changes in the key assumption could result in impairment losses. The implications of the key assumptions for the recoverable amount are discussed below:
Sales growth rate used during the budget period – Management has considered the possibility of lower than budgeted sales growth during the budget period. For Defense & Aerospace, no sales growth from 2011 until 2015 would result in an additional impairment. For Control Rooms & Simulation, changes in the sales growth rate during the budget period does not cause the carrying value of the division to materially exceed its recoverable amount. For dZine (part of the Ventures) a sales growth rate of less than 3% during the budget period would result in an additional impairment.
EBIT percentage on sales – Management has considered the possibility of lower than budgeted EBIT percentages on sales.
For the Defense & Aerospace division, the Control Rooms & Simulation division and dZine, a reduction of 1.5% of the long-term EBIT percentage on sales would result in an additional impairment.
Discount rates – change in the weighted average cost with 0.5% would result in an additional impairment for dZine. For the Defense and Aerospace division a change with 1% and for the Control Rooms and Simulation division a change with more than 2% would result in an additional impairment.
Growth rate estimate – only a decrease (which would result in a negative sales evolution) in the long-term rate used to extrapolate the projection would result in an additional impairment.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| At cost | |||
| On 1 January | 322,708 | 268,376 | 238,308 |
| Expenditure | 46,454 | 41,107 | 32,801 |
| Sales and disposals | -15,017 | - | -3,274 |
| Acquisition of subsidiary | 957 | 12,651 | - |
| Translation (losses)/gains | 579 | 575 | 541 |
| On 31 December | 355,680 | 322,708 | 268,376 |
| Impairment | |||
| On 1 January | 17,760 | 16,482 | 10,338 |
| Expenditure | 1,328 | 1,278 | 6,144 |
| On 31 December | 19,088 | 17,760 | 16,482 |
| Amortization | |||
| On 1 January | 245,570 | 197,459 | 158,932 |
| Amortization | 36,448 | 39,058 | 40,849 |
| Sales and disposals | -15,017 | - | -3,274 |
| Acquisition of subsidiary | 570 | 9,054 | - |
| Translation (losses)/gains | - | - | 953 |
| On 31 December | 267,571 | 245,570 | 197,459 |
| Net book value | |||
| On 1 January | 59,378 | 54,434 | 69,038 |
| On 31 December | 69,020 | 59,378 | 54,434 |
Consistent with the tests performed in the previous years, Barco performed impairment tests in the fourth quarter of 2011. Based upon these tests, impairment costs have been recognized for an amount of 1.3 million euro. Similar impairment tests revealed the need to recognize impairment losses on capitalized development in 2010 and 2009 for respectively 1.3 million euro and 6.1 million euro (see note 6). The impairment losses recognized, represent the write down of certain specific capitalized development projects.
The recognized impairment losses on capitalized development are allocated to the business segments as follows:
| IN THOUSANDS OF EURO | 2011 | 2010 |
|---|---|---|
| Control rooms and Simulation | 302 | 714 |
| Entertainment | 416 | - |
| Healthcare | 220 | - |
| Defense and Aerospace | - | 564 |
| Ventures | 390 | - |
| Total | 1,328 | 1,278 |
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Intangible Other assets |
Other Intangible assets under contruction |
Total other intangible assets |
Land and buildings |
Machinery and equipment Plant, |
Furniture, office equipment and vehicles |
Other property, equipment plant and |
Assets under construction |
tangible assets Total Other |
Total | Total | Total | |
| At cost | ||||||||||||
| On 1 January | 24,954 | 2,175 | 27,129 | 67,065 | 95,658 | 45,887 | 9,221 | 1,262 | 152,028 | 246,222 | 219,817 | 217,523 |
| Expenditure | 1,221 | 3,183 | 4,404 | 4,759 | 3,753 | 4,424 | 486 | 2,476 | 11,139 | 20,302 | 11,019 | 7,864 |
| Sales and disposals | -911 | - | -911 | -6,167 | -6,141 | -13,756 | -465 | - | -20,362 | -27,440 | -2,529 | -6,036 |
| Acquisition of subsidiary | 4,714 | - | 4,714 | - | 254 | 317 | - | - | 571 | 5,285 | 14,056 | - |
| Disposal of subsidiary | - | - | - | - | - | - | - | - | - | - | - | - |
| Transfers | - | - | - | - | -71 | 49 | -63 | 85 | - | - | - | - |
| Translation (losses)/gains | 5 | - | 5 | 468 | -150 | 125 | -105 | -2 | -132 | 341 | 3,858 | 467 |
| On 31 December | 29,983 | 5,358 | 35,341 | 66,125 | 93,303 | 37,046 | 9,074 | 3,821 | 143,244 | 244,710 | 246,222 | 219,817 |
| Depreciation | ||||||||||||
| On 1 January | 18,556 | - | 18,556 | 36,540 | 80,176 | 39,346 | 6,849 | - | 126,371 | 181,467 | 160,432 | 152,762 |
| Depreciation | 3,117 | - | 3,117 | 2,349 | 5,315 | 2,775 | 532 | - | 8,622 | 14,088 | 13,282 | 12,766 |
| Sales and disposals | -910 | - | -910 | -3,477 | -5,974 | -13,475 | -429 | - | -19,878 | -24,265 | -1,522 | -5,461 |
| Acquisition of subsidiary | 3 | - | 3 | - | 169 | 197 | - | - | 366 | 369 | 6,939 | - |
| Disposal of subsidiary | - | - | - | - | - | - | - | - | - | - | - | - |
| Transfers | - | - | - | - | -2 | -46 | 48 | - | - | - | - | - |
| Translation (losses)/gains | 10 | - | 10 | 144 | -67 | 360 | -9 | - | 284 | 438 | 2,337 | 366 |
| On 31 December | 20,776 | - | 20,776 | 35,556 | 79,617 | 29,157 | 6,991 | - | 115,765 | 172,097 | 181,467 | 160,432 |
| Carrying amount | ||||||||||||
| On 1 January | 6,398 | 2,175 | 8,573 | 30,525 | 15,482 | 6,541 | 2,372 | 1,262 | 25,657 | 64,755 | 59,385 | 64,761 |
In 2011 the capital expenditures amount to 20.3 million euro, compared to 11.0 million euro in 2010 and 7.8 million euro in 2009. The capital expenditures in land and buildings in current year relate for the major part to a new building in Germany (Karlsruhe) for an amount of 3.9 million euro. Other intangible assets under construction have capital expenditure relating to the implementation of a new ERP package and a new consolidation tool, for which the capital expenditures amount to 3.2 million euro in 2011. The capital expenditures in the other tangible assets relate for the major part to R&D and IT equipment.
The net book value of the other intangible assets and tangible fixed assets acquired through acquisitions amounts to 5.3 million euro. This amount mainly consists of 4.7 million euro know-how, included in the other intangible assets. We refer to Note 1.2 on 'Acquisitions and divestments' and Note 25 on 'Cash flow statement: effect of acquisitions and disposals' for more details on these transactions.
Deferred tax assets and liabilities are attributable to the following items:
| Assets | liabilities | Net asset/(liability) | |||||||
|---|---|---|---|---|---|---|---|---|---|
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 | 2011 | 2010 | 2009 | 2011 | 2010 | 2009 |
| Capitalized development cost | 53 | 149 | - | -7,928 | -7,961 | -6,268 | -7,875 | -7,812 | -6,268 |
| Patents, licenses, | 205 | -864 | 1,282 | - | - | -1,123 | 205 | -864 | 159 |
| Tangible fixed assets and software | 1,944 | 1,883 | 1,213 | -2,820 | -2,914 | -2,987 | -876 | -1,031 | -1,774 |
| Other investments | - | - | - | - | - | -19 | - | - | -19 |
| Inventory | 15,001 | 18,469 | 13,131 | -775 | -804 | -1,798 | 14,226 | 17,665 | 11,333 |
| Trade debtors | 960 | 1,861 | 1,208 | -5,069 | -3,527 | -3,174 | -4,109 | -1,666 | -1,966 |
| Provisions | 2,091 | 2,966 | 578 | -67 | -273 | -186 | 2,024 | 2,693 | 392 |
| Employee benefits | 1,431 | 2,425 | 2,358 | - | - | - | 1,431 | 2,425 | 2,358 |
| Deferred revenue | 1,488 | 1,135 | 1,042 | - | -46 | -105 | 1,488 | 1,089 | 937 |
| Other items | 3,624 | 3,292 | 1,424 | -2,073 | -3,250 | -5,480 | 1,551 | 42 | -4,056 |
| Tax value of loss carry forwards | 22,399 | 15,517 | 13,225 | - | - | - | 22,399 | 15,517 | 13,225 |
| Tax value of tax credits | 21,929 | 6,352 | 12,504 | -634 | - | - | 21,295 | 6,352 | 12,504 |
| Gross tax assets/(liabilities) | 71,125 | 53,185 | 47,965 | -19,367 | -18,774 | -21,139 | 51,758 | 34,411 | 26,825 |
| Set off of tax | -14,361 | -11,443 | -15,840 | 14,361 | 11,443 | 15,840 | - | - | - |
| Net tax assets/(liabilities) | 56,764 | 41,742 | 32,125 | -5,006 | -7,331 | -5,299 | 51,758 | 34,411 | 26,825 |
Movements in the deferred tax assets / (liabilities) arise from the following:
| IN THOUSANDS OF EURO | As at 1 January |
Recognized through income statement |
Recognized through equity |
Acquisitions and disposals |
Exchange gains and losses |
As at 31 December |
|---|---|---|---|---|---|---|
| Capitalized development cost | -7,812 | 94 | - | - | -157 | -7,875 |
| Patents, licenses, | -864 | 1,064 | - | - | 5 | 205 |
| Tangible fixed assets and software | -1,031 | 133 | - | - | 22 | -876 |
| Other investments | - | - | - | - | - | - |
| Inventory | 17,665 | -3,685 | - | - | 245 | 14,226 |
| Trade debtors | -1,666 | -2,430 | - | - | -13 | -4,109 |
| Provisions | 2,693 | -574 | - | - | -96 | 2,024 |
| Employee benefits | 2,425 | -1,016 | - | - | 22 | 1,431 |
| Deferred revenue | 1,089 | 337 | - | - | 62 | 1,488 |
| Other items | 42 | 1,307 | - | - | 202 | 1,551 |
| Tax value of loss carry forwards | 15,517 | 6,880 | - | - | 2 | 22,399 |
| Tax value of tax credits | 6,352 | 14,943 | - | - | - | 21,295 |
| Total | 34,411 | 17,054 | - | - | 294 | 51,758 |
On top of the tax losses and tax credits for which a net deferred tax is recognized (net deferred tax asset of respectively 22.4 million euro and 21.9 million euro), the Group owns tax losses carried forward and other temporary differences on which no deferred tax asset is recognized amounting to 94.2 million euro as of 31 December 2011 (at 34% tax rate resulting in a non recognized deferred tax asset of rounded 32 million euro). Deferred tax assets have not been recognized on these items because it is not probable that future profit will be available against which the benefits can be utilized. The tax losses carried forward and other temporary differences on which no deferred tax asset is recognized have no expiration date.
Deferred tax assets relate for the major part to the tax value of loss carry forwards and tax credits and almost fully relate to Belgium. In assessing the realizability of deferred tax assets, management considers whether it is probable that some portion or all of the deferred tax assets will be realized within the foreseeable future. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. In order to fully realize the deferred tax asset, the Group will need to generate future taxable income in the countries where the net operating losses were incurred. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes as at 31 December, 2011, it is probable that the Group will realize all of the recognized benefits of these deductible differences.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Raw materials and consumables | 102,417 | 101,801 | 62,434 |
| Work in progress | 65,612 | 62,452 | 42,161 |
| Finished goods | 116,446 | 103,924 | 77,952 |
| Contracts in progress | 28,082 | 31,345 | 25,889 |
| Write-off on inventories | -78,628 | -69,102 | -62,171 |
| Inventory | 233,928 | 230,420 | 146,265 |
| Inventory turns (a) |
2.7 | 2.3 | 2.7 |
(a) Inventory turns = 12 / [Inventory / (Average Monthly Sales x Material Cost of Goods Sold %)]
The amount of write-offs recognized as expense in 2011 amounts to 14.8 million euro (2010: 9.2 million euro and 2009: 20.5 million euro). The inventory turns improved compared to previous period, reaching 2.7 at the end of 2011, which is at the same level as per end of 2009.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Trade debtors - gross | 193,925 | 211,128 | 142,623 |
| Trade debtors - bad debt reserve (a) | -6,811 | -10,145 | -7,817 |
| Trade debtors - net (b) | 187,114 | 200,983 | 134,805 |
| V,A,T, Receivable | 6,793 | 9,809 | 7,670 |
| Taxes receivable | 21,738 | 17,476 | 16,218 |
| Interest rate swap (note 21) | - | 4 | 14 |
| Currency rate swap (note 21) | 40 | 287 | 155 |
| Guarantees paid | 1,613 | 603 | 654 |
| Other | 5,013 | 3,866 | 2,219 |
| Other amounts receivable | 35,197 | 32,044 | 26,931 |
| Other non-current assets (c) | 19,134 | 17,339 | 6,109 |
| Number of days sales outstanding (DSO) (d) | 56 | 59 | 67 |
Per 31 December 2011, the number of days sales outstanding continues to decrease compared to the two previous reporting periods, reaching 56 days at the end of 2011. For the second year in a road, the bad debt reserve decreased in proportion to the gross amount of trade debtors to 3.5% per 31 December 2011 (2010: 4.8%; 2009: 5.5%).
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| On 1 January | -10,145 | -7,817 | -10,790 |
| Acquisition of subsidiaries | - | -471 | - |
| Additional provisions | -1,279 | -3,598 | -672 |
| Amounts used | 1,399 | 1,185 | 2,152 |
| Amounts unused | 3,229 | 1,283 | 1,493 |
| Translation (losses) / gains | -15 | -727 | - |
| On 31 December | -6,811 | -10,145 | -7,817 |
(b) At 31 December 2011, the aging analysis of trade receivables is as follows:
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Not due | 156,647 | 151,007 | 106,612 |
| Overdue less than 30 days | 17,424 | 24,790 | 12,055 |
| Overdue between 30 and 90 days | 10,414 | 16,629 | 11,039 |
| Overdue more than 90 days | 9,440 | 18,702 | 12,917 |
| Total gross | 193,925 | 211,128 | 142,623 |
| Bad debt reserve | -6,811 | -10,145 | -7,817 |
| Total | 187,114 | 200,983 | 134,805 |
In 2011 total overdues amounts, in all categories, decreased considerably compared to the previous period to a total amount of 37.3 million euro (2010: 60.1 million euro, 2009: 36.0 million euro). In 2011 the bad debt reserve amounts to 72% of the trade receivables more than 90 days overdue (2010: 54%, 2009: 61%).
The further increase in the other non-current assets during 2011 mainly relates to long-term receivables in the frame of vendor financing programs, amounting to 12.5 million euro per 31 December 2011, of which 9.8 million (see note 16) are offset by a long-term debt of the same amount (2010: 3.2 million euro, of which 2.2 million euro offset by a long-term debt; 2009: 0).
DSO = (( Trade debtors, net) / (sales past quarter)) * 90
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Deposits (a) |
1,264 | 11,986 | 10,629 |
| Cash at bank (b) |
77,817 | 33,983 | 35,214 |
| Cash in hand | 83 | 72 | 58 |
| Cash and cash equivalents | 79,165 | 46,041 | 45,901 |
| Long-term financial receivables (c) |
9,768 | 2,172 | - |
| Long-term debts (c) (d) |
-19,014 | -12,674 | -11,906 |
| Current portion of long-term debts (d) |
-1,691 | -2,643 | -2,393 |
| Short-term debts (e) |
-6,593 | -24,039 | -8,116 |
| Net financial cash / (debt) | 61,635 | 8,857 | 23,486 |
Deposits are short-term, highly liquid investments, which are readily convertible to known amounts of cash. At closing date, deposits include:
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| » deposits in INR, with an average interest rate of 5,91% | 992 | 3,675 | 4,719 |
| » deposits in EUR | 0 | 5,091 | 4,328 |
| » deposits in USD | 0 | 2,245 | - |
| » deposits in other currencies | 272 | 975 | 1,582 |
| Total deposits | 1,264 | 11,986 | 10,629 |
Cash at bank is immediately available. Most of the cash is held on accounts with higher interest-yield compared to classical cash accounts. It is denominated in the following currencies:
| 2011 | 2010 | 2009 | |
|---|---|---|---|
| » EUR | 62.7% | 49.7% | 43.5% |
| » USD | 17.3% | 24.2% | 33.5% |
| » CNY | 5.0% | - | 5.7% |
| » INR | 1.5% | 9.0% | - |
| » Other currencies | 13.5% | 17.1% | 17.3% |
During 2010, Barco entered into a specific vendor financing mechanism, resulting in long-term financial receivables for an amount of 2.2 million euro per 31 December 2010 and long-term debts for the same amount. During 2011, the amount increased to 9.8 million euro.
The long-term financial receivables and the long-term debts neutralize each other in the determination of the net cash position, as all material risks and rewards are transferred upon realization of the sales transaction. The long-term financial receivables are presented on the face of the balance sheet on line 'Other non-current assets'. The long term debts are presented on the face of the balance sheet on line 'Long-term debts'.
In December 2011, the Group restructured its portfolio of bank borrowings (mainly a maturing 85 million euro revolving Credit Facility agreement) with 115 million euro new committed credit facilities, as follows:
As per 31 December 2011, no drawings under the 50 million euro research, development and innovation (RDI) Credit Facility from the European Investment Bank were outstanding by means of long term debt.
As per 31 December 2011, Barco is meeting all requirements of the loan covenants on its available credit facilities.
Analysis of long-term financial debts, including the current portion of long-term financial debts, as to currencies:
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| » EUR | 4,813 | 6,079 | 7,247 |
| » USD | 15,570 | 8,237 | 6,548 |
| » Other | 322 | 1,001 | 506 |
| Total | 20,705 | 15,317 | 14,300 |
Analysis of long-term financial debts including the current portion of long-term financial debts, as to interest rates:
| EFFECTIVE INTEREST RATE | MATURITY | 31 December 2011 | 31 December 2010 | 31 December 2009 |
|---|---|---|---|---|
| » variable, limited by cap-floor agreements | ||||
| Euribor 3M + 0.70% | 2014 | 1,250 | 1,750 | 2,250 |
| Euribor 3M + 0.75% | 2014 | 1,250 | 1,625 | 2,250 |
| Euribor 3M + 0.80% | 2014 | 1,250 | 1,750 | 2,250 |
| Euribor 6M + 0.89% | 2014 | - | 512 | 509 |
| » variable, swapped into fixed 3.86% | Later than 2015 | 6,705 | 6,492 | 6,508 |
| » fixed (vendor financing, offset by long-term receivable) | 9,793 | 2,172 | - | |
| » fixed (various) | 457 | 1,015 | 533 | |
| Total long-term financial debts | 20,705 | 15,316 | 14,300 |
| Per 31 December 2011 | Per 31 December 2010 | ||
|---|---|---|---|
| Payable in 2013 | 9,783 | Payable in 2012 | 2,354 |
| Payable in 2014 | 3,659 | Payable in 2013 | 2,270 |
| Payable in 2015 | 259 | Payable in 2014 | 1,444 |
| Payable in 2016 | 259 | Payable in 2015 | 114 |
| Later | 7,999 | Later | 6,492 |
| Total long-term debts | 21,958 | Total long-term debts | 12,674 |
The long-term debts (including interests due), excluding the current portion of the long-term debts, are payable as follows:
Analysis of the short-term financial debts on 31 December 2011:
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 | |||
|---|---|---|---|---|---|---|
| Effective interest rate |
Balance | Effective interest rate |
Balance | Effective interest rate |
Balance | |
| EUR | - | - | 0.7% | 20,000 | 0.7% | 2,260 |
| USD | 2.4% | 5,796 | 3.8% | 3,218 | 3.2% | 2,707 |
| CNY | - | - | - | - | 5.3% | 2,241 |
| Other | 3.2% | 797 | - | 821 | - | 908 |
| Total | 6,593 | 24,039 | 8,116 |
Usage per 31 December 2011 is mainly executed on uncommitted bank facilities. The new 65 million euro bilateral Credit Facilities that when used also translate in a short term debt position were almost completely undrawn (i.e. less than 1 million euro).
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Governmental loans | 3,117 | 5,133 | 5,239 |
| Earn-out payment | 5,000 | 7,500 | - |
| Other | 0 | 655 | 207 |
| Other long-term liabilities | 8,117 | 13,288 | 5,446 |
In the agreement with Royal Philips Electronics relating to the acquisition of FIMI Srl in 2010, an additional earn-out of 10 million euro is foreseen, payable by Barco NV over the period 2011 until 2014. The earn-out equals to 35% of the cumulative net purchase value of the Philips Group with FIMI over the next five years and is limited to 2.5 million euro per year. Early 2011, an earn-out portion of 2.5 million euro was paid. The other long-term liabilities hence still include a 5 million euro earn-out expected to be payable as of 2013, whilst the 2.5 million euro earn-out payable early 2012 is presented on the line 'Other current liabilities'.
| Per 31 December 2011 | Per 31 December 2010 | ||
|---|---|---|---|
| Payable in 2013 | 2,533 | Payable in 2012 | 3,642 |
| Payable in 2014 | 2,533 | Payable in 2013 | 3,005 |
| Payable in 2015 | 33 | Payable in 2014 | 2,995 |
| Payable in 2016 | 33 | Payable in 2015 | 496 |
| Later | 2,985 | Later | 3,150 |
| Total long-term debts | 8,117 | Total long-term debts | 13,288 |
The other long-term liabilities, excluding the current portion of the long-term liabilities, are repayable as follows:
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Share capital | 54,532 | 54,169 | 54,169 |
| Share premium | 134,381 | 131,150 | 131,150 |
| Share-based payments | 4,154 | 3,478 | 3,188 |
| Acquired own shares | -45,641 | -45,641 | -45,641 |
| Retained earnings | 345,348 | 282,166 | 238,542 |
| Cumulative translation adjustment | -30,546 | -28,757 | -37,757 |
| Derivatives | -1,524 | -975 | 613 |
| Equity attributable to equity holders of the parent | 460,703 | 395,590 | 344,264 |
The following capital increases took place in 2011:
As a result thereof the company's share capital amounts to 54.5 million euro on 31 December, 2011, consisting of 12,754,676 fully paid shares. The share premium amounts to 134.4 million euro.
On 21 October 2011 three new stock option schemes were approved by the extraordinary shareholders meeting. This approval entitled the board of directors to create and allocate a maximum of 100,000 stock options before 31 December 2011. Each stock option entitled the subscription to 1 (one) share. In October 2011, a total of 89,750 stock options were granted to employees and management of the group based upon these stock option schemes. On 31 December 2011 no stock options remained available for distribution under the 2011 stock option schemes, given the expiry dates for allocation of the plans per 31 December 2011.
The total number of outstanding warrants on 31 December 2011 amounted to 719,415, which can lead to the creation of 719,415 shares. The stock options granted as of 2010 will be exercised through the conversion of treasury shares.
Warrants and stock options may be exercised under the following conditions:
| Allocation date | End term | Exercise price (in euro) |
Granted | Exercised | Cancelled | Balance on 31 Dec 2011 |
|---|---|---|---|---|---|---|
| Warrants | ||||||
| 16/09/1999 | 15/09/2009 (1) | 93.58 | 135,496 | 0 | 14,511 | 120,985 |
| 13/07/2000 | 12/07/2010 (1) | 91.92 | 155,434 | 0 | 26,714 | 128,720 |
| 18/06/2002 | 17/06/2012 (1) | 42.01 | 193,166 | 149,756 | 11,948 | 31,462 |
| 24/06/2002 | 23/06/2012 | 40.55 | 5,219 | 3,549 | 1,610 | 60 |
| 24/06/2002 | 23/06/2012 (1) | 42.70 | 10,000 | 10,000 | 0 | 0 |
| 4/11/2002 | 3/11/2012 (1) | 42.40 | 25,900 | 21,900 | 0 | 4,000 |
| 23/06/2003 | 22/06/2013 | 50.75 | 73,098 | 19,432 | 8,120 | 45,546 |
| 23/06/2003 | 22/06/2013 | 50.50 | 1,605 | 600 | 625 | 380 |
| 15/09/2003 | 14/09/2013 | 57.52 | 5,350 | 2,975 | 1,575 | 800 |
| 29/03/2004 | 28/03/2014 | 67.00 | 67,876 | 0 | 9,794 | 58,082 |
| 29/03/2004 | 28/03/2014 | 66.50 | 1,385 | 0 | 800 | 585 |
| 12/09/2005 | 11/09/2015 | 63.15 | 1,905 | 0 | 695 | 1,210 |
| 12/09/2005 | 11/09/2015 | 60.51 | 60,462 | 0 | 7,415 | 53,047 |
| 12/09/2005 | 11/09/2015 | 61.35 | 12,655 | 0 | 3,905 | 8,750 |
| 09/11/2006 | 08/11/2016 | 65.05 | 57,576 | 0 | 4,370 | 53,206 |
| 09/11/2006 | 8/11/2016 | 65.05 | 9,935 | 0 | 2,115 | 7,820 |
| 09/11/2006 | 8/11/2016 | 66.15 | 1,910 | 0 | 725 | 1,185 |
| 12/11/2007 | 11/11/2017 | 50.68 | 71,705 | 2,150 | 4,180 | 65,375 |
| 12/11/2007 | 11/11/2017 | 50.68 | 9,745 | 200 | 1,100 | 8,445 |
| 12/11/2007 | 11/11/2017 | 51.53 | 3,550 | 0 | 813 | 2,737 |
| 15/12/2007 | 14/12/2017 | 50.48 | 25,000 | 0 | 0 | 25,000 |
| 28/05/2009 | 27/05/2019 | 19.62 | 90,800 | 0 | 2,800 | 88,000 |
| 28/05/2009 | 27/05/2019 | 24.00 | 15,070 | 0 | 1,450 | 13,620 |
| 28/05/2009 | 27/05/2019 | 23.57 | 600 | 0 | 200 | 400 |
| Total number of warrants | 1,035,442 | 210,562 | 105,465 | 719,415 |
(1) For a large number of warrants this last exercise date was extended with three (3) years according to article 407 of the law of 24 December 2002
| Allocation date | End term | Exercise price (in euro) |
Granted | Exercised | Cancelled | Balance on 31 Dec 2011 |
|---|---|---|---|---|---|---|
| Stock options | ||||||
| 28/10/2010 | 27/10/2015 | 35.85 | 20,000 | 0 | 0 | 20,000 |
| 28/10/2010 | 27/10/2020 | 35.85 | 35,500 | 0 | 250 | 35,250 |
| 28/10/2010 | 27/10/2015 | 35.85 | 13,450 | 0 | 0 | 13,450 |
| 28/10/2010 | 27/10/2015 | 41.75 | 24,150 | 0 | 2,750 | 21,400 |
| 28/10/2011 | 27/10/2016 | 36.65 | 15,000 | 0 | 0 | 15,000 |
| 28/10/2011 | 27/10/2021 | 36.65 | 29,435 | 0 | 0 | 29,435 |
| 28/10/2011 | 27/10/2016 | 36.65 | 17,250 | 0 | 0 | 17,250 |
| 28/10/2011 | 27/10/2016 | 41.70 | 28,065 | 0 | 0 | 28,065 |
| Total number of stock options | 182,850 | 0 | 3,000 | 179,850 |
In the course of 2011, 84,721 warrants were exercised; no warrants were exercised in 2010 and 2009.
The cost of these warrant plans is included in the income statement. The warrants are valued at grant date, based on the share price at grant date, exercise price, expected volatility, dividend estimates and interest rates. The warrant cost is taken into result on a straight-line basis from the grant date until the first exercise date. The share-based payment expenses amounted to 0.7 million euro in 2011 (2010: 0.3 million euro; 2009: 0.3 million euro).
Barco did not acquire any of its own shares in 2011, 2010 and 2009. The number of own shares acquired by Barco NV up to 31 December, 2011 remains unchanged at 737,963.
The change in retained earnings includes the net income of 2011 and
In 2011, exchange differences on translation of foreign operations have a negative impact on the consolidated equity of 1.8 million euro, mainly relating to the Indian Rupee (4.2 million euro negative impact on equity) offset by 1.1 million euro positive impact of the American dollar and the 1.3 million euro of the Chinese Yen.
In 2010, exchange differences on translation of foreign operations amounted to 9.0 million euro positive impact on equity, mainly related to the Indian Rupee (3.6 million euro), the American dollar (2.0 million euro), the Singapore dollar (1.4 million euro) and the Australian dollar (1.1 million euro).
Derivative financial instruments are disclosed in note 21.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 | |
|---|---|---|---|---|
| Trade payables | 110,791 | 125,353 | 67,852 | |
| Days payable outstanding (DPO) | (a) | 54 | 67 | 55 |
(a) DPO = trade payables / (material cost + services and other costs + inventory movement + purchases of (in)tangible fixed assets) x 365
| IN THOUSANDS OF EURO | Balance sheet 2011 |
Additional provisions made |
Amounts used |
Unused amounts reversed |
Transfers (e) |
Change in consolidation method |
Translation (losses) / gains |
Balance sheet 2010 |
Balance sheet 2009 |
|
|---|---|---|---|---|---|---|---|---|---|---|
| Technical warranty | (a) | 28,898 | 8,546 | -5,656 | -836 | -150 | -16 | 490 | 26,520 | 18,412 |
| Risks on contracts in progress | (b) | 1,910 | - | -627 | -3,800 | - | - | - | 6,337 | 4,000 |
| Pension obligations | (c) | 5,670 | 742 | -1,062 | -38 | - | - | 56 | 5,972 | 4,208 |
| Restructuring provision | (d) | - | - | -3,351 | - | - | - | - | 3,351 | 6,061 |
| Social claims and severance payments | 622 | 297 | -98 | -42 | - | - | 1 | 466 | 904 | |
| Other claims and risks | 4,974 | 2,843 | -3,263 | -1,420 | 1,131 | - | 57 | 5,627 | 5,240 | |
| Provisions | 42,075 | 12,428 | -14,059 | -6,137 | 981 | -16 | 605 | 48,273 | 38,824 |
Provisions for technical warranty are based on historical experience of the level of repairs and replacements. Additional provisions are set up when a technical problem is detected. There are three different technical warranty provisions: provisions related to 'normal' (mostly 2 years) warranty period, provisions related to extended warranty periods and provisions for specific claims/issues.
As soon as Barco considers that it is probable that the contract costs on a contract in progress will exceed the contract revenue, the expected losses are recognized as an expense.
In general, pension plans at Barco are defined contribution plans. Obligations for these plans are recognized as an expense in the income statements as incurred. In some specific cases a pension plan includes a defined benefit obligation. According to IAS 19, provisions are set up in these situations.
As per 31 December 2011, the defined benefit obligations are composed of:
| »Early retirement plans in Belgium | 1,622 |
|---|---|
| »Local legal requirements (mainly France, Japan, Korea and Italy) | 1,727 |
| »A small number of individual plans | 2,321 |
| Total | 5,670 |
Early retirement plans are recognized as liability and expense when the company is committed to terminate the employment of the employees affected before the normal retirement date.
The restructuring plans, initiated in the 2009, have all been finalized during 2011.
The transfers in other claims and risks contain an amount of 981 (000) euro coming from balance sheet account 'Accrued charges and Deferred income'.
General risk factors are described in the director's report 'Risk Factors'.
Derivative financial instruments are used to reduce the exposure to fluctuations in foreign exchange rates and interest rates. These instruments are subject to the risk of market rates changing subsequent to acquisition. These changes are generally offset by opposite effects on the item being hedged.
Barco incurs foreign currency risk on recognized assets and liabilities when they are denominated in a currency other than the company's local currency. Such risks may be naturally covered when a monetary item at the asset side (such as a trade receivable or cash deposit) in a given currency is matched with a monetary item at the liability side (such as a trade payable or loan) in the same currency.
Forward exchange contracts and selectively option contracts are used to manage the currency risk arising from recognized receivables and payables. which are not naturally hedged. This is particularly the case for the USD (and USD-related currencies), for which receivables are systematically higher than payables. No hedge accounting is applied to these contracts.
The balances on foreign currency monetary items are valued at the rates of exchange prevailing at the end of the accounting period. Derivative financial instruments that are used to reduce the exposure of these balances are rated in the balance sheet at fair value. Both changes in foreign currency balances and in fair value of derivative financial instruments are recognized in the income statement.
Barco selectively designates forward contracts to forecasted sales. Hedge accounting is applied to these contracts. The portion of the gain or loss on the hedging instrument that will be determined as an effective hedge is recognized directly in comprehensive income. On 31 December 2011, there were no forward contracts outstanding under hedge accounting treatment.
Main sensitivity to currency fluctuations is related to the evolution of the USD versus the euro. This sensitivity is caused by following factors:
Barco uses following hedging instruments to manage its interest rate risk:
Barco has an outstanding variable loan of 8.7 million US dollar (6.7 million euro) in place, of which variable interest rate conditions have been swapped into a fixed 3.86%.
The swap is determined as an effective hedge of the loan for a similar portion and meets the hedging requirements of IAS 39. The fair value of the effective portion of the hedging instrument is therefore recognized directly in comprehensive income under hedge accounting treatment.
Barco entered in 2004 into a 15 million euro amortizing loan agreement with variable interest rate. Through the cap / floor structure, variability on the interest rate conditions of this loan (currently outstanding at 3.8 million euro) is restricted within a range of 2% and 5%.
The cap / floor loan agreements don't meet the hedging requirements of IAS 39 and are therefore treated as financial instruments held for trading. They are valued at fair value and changes in fair value are recognized in the income statement.
Effective base rate on the 3.8 million euro amortizing loan agreement is currently fixed at 2% (due to low EURIBOR rates and included floor agreement), whereby based on forward-looking interest rate view, management doesn't expect the interest rate to rise above this floor level in the immediate foreseeable future.
Credit evaluations are performed on all customers requiring credit over a certain amount. The credit risk is monitored on a continuous basis. In a number of cases collateral is being requested before a credit risk is accepted. Specific trade finance instruments such as letters of credit and bills of exchange are regularly used in order to minimize the credit risk. In 2011, Barco continued to conclude credit insurances in order to cover credit risks on specific customers with whom Barco entered into vendor financing agreements. Such vendor financing agreements are concluded and monitored on a case by case basis.
A policy defining acceptable counter parties and the maximum risk per counter party is in place. Short-term investments are done in marketable securities or in fixed term deposits with reputable banks.
Set out below is an overview of the carrying amounts of the Group's financial instruments that are showing in the financial statements. In general, the carrying amounts are assumed to be a close approximation of the fair value,
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 | ||
|---|---|---|---|---|---|
| Carrying amount / Fair value (approx,) | |||||
| Financial assets | |||||
| Trade receivables | 187,114 | 200,983 | 134,805 | ||
| Other receivables | 35,197 | 32,044 | 25,850 | ||
| Loan and other receivables | 35,157 | 31,754 | 25,681 | ||
| Interest rate swap | 0 | 4 | 14 | ||
| Currency rate swap | 40 | 287 | 155 | ||
| Other non-current assets | 19,134 | 17,339 | 6,109 | ||
| Cash and short-term deposits | 79,165 | 46,041 | 45,901 | ||
| Total | 320,610 | 296,407 | 212,665 | ||
| Financial liabilities | |||||
| Financial debts | 18,492 | 15,317 | 13,791 | ||
| Floating rate borrowings | 8,605 | 14,302 | 13,258 | ||
| Fixed rate borrowings | 9,887 | 1,015 | 533 | ||
| Other debts | 8,117 | 13,288 | 5,943 | ||
| Short-term debts | 6,593 | 24,039 | 8,116 | ||
| Trade payables | 110,791 | 125,353 | 67,852 | ||
| Dividends payable | 2,946 | 2,142 | 2,222 | ||
| Interest rate swap | 1,843 | 1,134 | 92 | ||
| Other liabilities | 8,045 | 6,522 | 1,683 | ||
| Total | 156,825 | 187,794 | 99,699 |
The fair value of the financial assets and liabilities is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
» The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. Derivatives valued using valuation techniques with market observable inputs are mainly interest rate (cap/floor) swaps and foreign exchange forward contracts. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs including foreign exchange spot and forward rates and interest rate curves.
As at 31 December 2011, the Group held the following financial instruments measured at fair value:
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Assets measured at fair value | |||
| Financial assets at fair value through profit or loss | |||
| Foreign exchange contracts - non-hedged | 467 | 327 | 25 |
| Interest rate swap | - | 4 | 14 |
| Financial assets at fair value through equity | |||
| Foreign exchange contracts - hedged | - | - | 690 |
| Liabilities measured at fair value | |||
| Financial liabilities at fair value through profit or loss | |||
| Foreign exchange contracts - non-hedged | 428 | 56 | 540 |
| Interest rate swap | 317 | 157 | 92 |
| Financial liabilities at fair value through equity | |||
| Foreign exchange contracts - hedged | - | - | 20 |
| Interest rate swap | 1,526 | 977 | 20 |
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
All fair values mentioned in the above table relate to Level 2.
During the reporting period ending 31 December 2011, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements.
Management evaluates its capital needs based on following data:
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Net financial cash / (debt) | 61,635 | 8,857 | 23,486 |
| Equity | 460,703 | 395,591 | 344,264 |
| % Net financial cash (debt) / Equity | 13.4% | 2.2% | 6.8% |
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
| Equity | 460,703 | 395,591 | 344,264 |
| Total equity and liabilities | 814,567 | 754,699 | 572,475 |
| % Equity / Total equity and liabilities | 56.6% | 52.4% | 60.1% |
Barco had a year of strong cash flow generation, which has lead to a net cash position of 61.6 million euro per 31 December 2011 compared to 8.9 million euro as per end of 2010. Thanks to the realized profitable growth, also the solvency position and other current ratios improved.
Together with the enlarged committed credit facilities concluded per end of 2011, management considers that it has secured a very healthy liquidity profile and strong capital base for the further development of the Group.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Non-cancellable operating leases are payable as follows: | |||
| Less than one year | 5,850 | 4,775 | 5,311 |
| Between one and five years | 7,209 | 8,808 | 7,788 |
| More than five years | - | 883 | 526 |
| Total | 13,059 | 14,466 | 13,626 |
Non-cancellable operating leases mainly relate to leases of factory facilities, warehouses and sales offices. During the current year, the total rent expenses recognized in the income statement amounted to 12.8 million euro, whereof 6.6 million euro relating to rent of buildings.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Guarantees given to third parties (a) |
19,303 | 23,351 | 22,986 |
| Mortgage obligations given as security (b) |
|||
| » book value of the relevant assets | 3,600 | 3,819 | 4,381 |
| » total of the mortgage | 9,629 | 9,400 | 8,891 |
| Buy back obligations (c) |
10,258 | 11,300 | 6,700 |
(a) Guarantees given to third parties mainly relate to guarantees given to customers for ongoing projects, guarantees given to suppliers for investment projects and to authorities for commitments related to VAT, duties, etc.
(b) The outstanding debts guaranteed by the mortgage obligations amount to 6.7 million euro per 31 December 2011.
(c) Barco appeals on a vendor-lease program with the obligation to take back sold goods, in case of insolvency of the client. No buy-back provision is set up for this risk as all risks and rewards are transferred upon the sale. Total possible value of the obligation to take back sold goods is 10.3 million euro (11.3 million euro in 2010 and 6.7 million euro in 2009).
At the end of 2007, Barco reached agreements for the sale of important parts of the Manufacturing Services division. These agreements stipulate that the buyers will remain Barco's leading suppliers for the mechanical assembly activities. These commitments gradually decrease from 90% in the first year after the sale of the activities (i.e. 2008) to 82% in 2012. In 2008, Barco reached an additional agreement for cable assembly, which included a purchase commitment gradually decreasing in 2012.
The prices used in all purchase agreements are based on following principles:
» price continuity with customary adjustments for existing products;
» agreed price calculation models and competitiveness obligations for new products.
The agreements include quality and on-time delivery specifications.
For more information with respect to remuneration for directors and members of the executive management, please refer to the 'Corporate governance' section on page 84 of the annual report.
The table below shows the effect of acquisitions and disposals on the balance sheet movement of the Group. The 2011 acquisition fully relates to the Cinestore asset deal. The 2010 acquisitions relate to Fimi, dZine and Element Labs, leading to a combined investment of 38.2 million euro. See Note 1.2 for more information on these acquisitions.
The 2009 effect relates to the disposal of the Advanced Visualization activities.
| IN THOUSANDS OF EURO | ACQUISITIONS | DISPOSALS | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2011 | 2010 | 2009 | 2011 | 2010 | 2009 | ||||
| Non-current assets | 5,302 | 12,021 | - | - | - | -5,172 | |||
| Capitalized development cost | 387 | 3,597 | - | - | - | -4,265 | |||
| Customer list | - | 5,000 | - | - | - | - | |||
| Know-how | 4,702 | - | - | - | - | - | |||
| Tangible assets and other intangible assets | 213 | 2,112 | - | - | - | -229 | |||
| Deferred tax assets | - | 1,299 | - | - | - | -678 | |||
| Other non-current assets | - | 13 | - | - | - | - | |||
| Current assets | 2,859 | 21,848 | - | - | -1,976 | 3,052 | |||
| Inventory | 2,714 | 12,963 | - | - | - | -64 | |||
| Trade debtors & other receivables | 145 | 8,885 | - | -1,992 | -1,976 | 3,116 | |||
| Non-current liabilities | 2,547 | 5,035 | - | - | - | - | |||
| Long-term debts, interest-bearing liabilities | - | - | - | - | - | - | |||
| Deferrred tax liabilities | - | 1,991 | - | 3,452 | - | - | |||
| Provisions | 2,547 | 3,044 | - | - | - | - | |||
| Current liabilities | -2,672 | 11,615 | - | - | - | 2,205 | |||
| Trade payables | 225 | 4,539 | - | - | - | - | |||
| Other payables | -2,897 | 7,076 | - | - | - | 2,205 | |||
| Net-identifiable assets and liabilities | 8,286 | 17,218 | - | - | -1,976 | 85 | |||
| Non-operating profit (losses) on disposals | - | - | - | - | -7,508 | ||||
| Goodwill on acquisitions | 1,030 | 20,626 | - | - | - | -15,544 | |||
| Received / (paid) consideration | - | - | - | -1,460 | 1,976 | 22,967 | |||
| Acquired cash | - | 382 | - | - | - | - | |||
| Purchase price | 9,316 | 38,227 | - | - | - | - |
The total purchase price in 2011, relates to the acquisition of the CineStore activities of 6.4 million euro and current year's earn-out payment on the 2010 Fimi acquisition for an amount of 2.9 million euro.
Out of the total purchase price relating to the 2010 acquisitions (38.2 million euro), 19 million euro purchase price of FIMI Srl was already paid end of 2009; during 2010 an amount of 10 million euro has been paid, mainly relating to the acquisition of dZine and the asset deal with Element Labs. The remaining part of the purchase price concerned earn-out amounts payable as of 2011.
The 2011 disposals relate to the remaining part of the sales price of the 2009 divestment of Barco's Advanced Visualization (AVIS) business, which was put in escrow and received in 2011, and the taxes paid in 2011 on the plus value realized on this sale. The 2010 disposal amount related to the first part of the escrow amount, which was released in 2010.
We refer to the Cash flow statement and note 1.2 on acquisitions and note 3 on discontinued operations.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are carried in terms of historical cost using the exchange rate at the date of the acquisition.
| IN THOUSANDS OF EURO | Note | 31 Dec 2011 | 31 Dec 2010 | 31 Dec 2009 | 31 Dec 2011 | 31 Dec 2010 | 31 Dec 2009 |
|---|---|---|---|---|---|---|---|
| CONTINUING BUSINESS | REPORTED BUSINESS | ||||||
| ASSETS | |||||||
| Goodwill | 10 | 43,921 | 52,891 | 32,265 | 43,921 | 52,891 | 32,265 |
| Capitalized development cost | 11 | 69,020 | 59,378 | 54,434 | 69,020 | 59,378 | 54,434 |
| Other intangible assets | 12 | 14,565 | 8,573 | 5,204 | 14,565 | 8,573 | 5,204 |
| Land and buildings | 12 | 30,569 | 30,525 | 30,988 | 30,569 | 30,525 | 30,988 |
| Other tangible assets | 12 | 27,479 | 25,657 | 23,193 | 27,479 | 25,657 | 23,193 |
| Investments | 9 | 9,300 | 326 | 19,327 | 9,300 | 326 | 19,327 |
| Deferred tax assets | 13 | 56,763 | 41,742 | 32,125 | 56,763 | 41,742 | 34,042 |
| Other non-current assets | 15 | 19,134 | 17,339 | 6,109 | 19,134 | 17,339 | 10,025 |
| Non-current assets | 270,751 | 236,431 | 203,645 | 270,751 | 236,431 | 209,479 | |
| Inventory | 14 | 233,928 | 230,421 | 146,264 | 233,928 | 230,421 | 146,265 |
| Trade debtors | 15 | 187,114 | 200,983 | 134,805 | 187,114 | 200,983 | 134,805 |
| Other amounts receivable | 15 | 35,197 | 32,044 | 25,850 | 35,197 | 32,044 | 26,931 |
| Cash and cash equivalents | 16 | 79,165 | 46,041 | 45,901 | 79,165 | 46,041 | 45,901 |
| Prepaid expenses and accrued income | 8,412 | 8,780 | 9,092 | 8,412 | 8,780 | 9,095 | |
| Assets from discontinued operations | 3 | - | - | 6,918 | - | - | - |
| Current assets | 543,816 | 518,269 | 368,831 | 543,816 | 518,269 | 362,997 | |
| Total assets | 814,567 | 754,699 | 572,475 | 814,567 | 754,699 | 572,475 | |
| EQUITY AND LIABILITIES | |||||||
| Equity attributable to equityholders of the parent | 18 | 460,703 | 395,590 | 344,264 | 460,703 | 395,590 | 344,264 |
| Non-controlling interests | - | 1 | 1 | - | 1 | 1 | |
| Equity | 460,703 | 395,591 | 344,265 | 460,703 | 395,591 | 344,265 | |
| Long-term debts | 16 | 19,014 | 12,674 | 11,906 | 19,014 | 12,674 | 11,906 |
| Deferred tax liabilities | 13 | 5,005 | 7,331 | 5,299 | 5,005 | 7,331 | 10,727 |
| Other long-term liabilities | 17 | 8,117 | 13,288 | 5,446 | 8,117 | 13,288 | 5,446 |
| Non-current liabilities | 32,136 | 33,293 | 22,652 | 32,136 | 33,293 | 28,080 | |
| Current portion of long-term debts | 16 | 1,691 | 2,643 | 2,393 | 1,691 | 2,643 | 2,393 |
| Short-term debts | 16 | 6,593 | 24,039 | 8,116 | 6,593 | 24,039 | 8,116 |
| Trade payables | 19 | 110,791 | 125,353 | 67,852 | 110,791 | 125,353 | 67,852 |
| Advances received on contracts in progress | 55,748 | 33,659 | 27,493 | 55,748 | 33,659 | 27,493 | |
| Tax payables | 21,556 | 23,574 | 12,203 | 21,556 | 23,574 | 12,203 | |
| Employee benefit liabilities | 51,741 | 47,598 | 28,450 | 51,741 | 47,598 | 28,451 | |
| Other current liabilities | 8,045 | 6,522 | 3,997 | 8,045 | 6,522 | 3,997 | |
| Accrued charges and deferred income | 23,488 | 14,154 | 10,801 | 23,488 | 14,154 | 10,802 | |
| Provisions | 20 | 42,075 | 48,273 | 38,824 | 42,075 | 48,273 | 38,824 |
| Liabilities from discontinued operations | 3 | - | - | 5,429 | - | - | - |
| Current liabilities | 321,728 | 325,815 | 205,558 | 321,728 | 325,815 | 200,131 | |
| Total equity and liabilities | 814,567 | 754,699 | 572,475 | 814,567 | 754,699 | 572,475 |
On 1 February 2012, Barco announced the acquisition of the assets of IP Video Systems (IPVS), a California-based innovator in networked visualization solutions. The acquisition fits within Barco's overall strategy to invest in high-performance networked visualization technology and will strengthen the company's product portfolio in a large number of markets.
On 3 February 2012, Barco acquired 100% of the shares of UK based, patient bedside terminal provider Jaotech. With this strategic acquisition, Barco broadens its offering with point-of-care solutions for the Healthcare division.
There are no other major events subsequent to the balance sheet date which have a major impact on the further evolution of the company.
In accordance with the legal requirements, we report to you on the performance of our mandate of statutory auditor. This report contains our opinion on the consolidated financial statements as well as the required additional comments.
We have audited the consolidated financial statements of Barco NV and its subsidiaries (collectively referred to as 'the Group') for the year ended 31 December 2011, prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium. These consolidated financial statements comprise the consolidated balance sheet as at 31 December 2011, and the consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended, as well as the summary of significant accounting policies and other explanatory notes. The consolidated balance sheet shows total assets of 814,567 thousand euro and the consolidated statement of income shows a profit for the year, share of the Group, of 75,850 thousand euro.
The board of directors is responsible for the preparation and fair presenta-
tion of the consolidated financial statements. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the legal requirements and the auditing standards applicable in Belgium, as issued by the Institute of Registered Auditors (Institut des Réviseurs d'Entreprises/Instituut van de Bedrijfsrevisoren). Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
In accordance with these standards, we have performed procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we have considered internal control relevant to the Group's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. We have evaluated the appropriateness of accounting policies used, the reasonableness of significant accounting estimates made by the Group and the presentation of the consolidated financial statements, taken as a whole. Finally, we have obtained from the board of directors and the Group's officials the explanations and information necessary for executing our audit procedures. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In our opinion, the consolidated financial statements for the year ended 31 December 2011 give a true and fair view of the Group's financial position as at 31 December 2011 and of the results of its operations and its cash flows in accordance with IFRS as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium.
The preparation and the assessment of the information that should be included in the directors' report on the consolidated financial statements are the responsibility of the board of directors.
Our responsibility is to include in our report the following additional comments, which do not modify the scope of our opinion on the consolidated financial statements:
The directors' report on the consolidated financial statements deals with the information required by law and is consistent with the consolidated financial statements. We are, however, unable to comment on the description of the principal risks and uncertainties which the entities included in the consolidation are facing, and on their financial situation, their foreseeable evolution or the significant influence of certain facts on their future development. We can nevertheless confirm that the matters disclosed do not present any obvious inconsistencies with the information that we became aware of during the performance of our mandate.
Ernst & Young Bedrijfsrevisoren BCVBA Statutory auditor represented by
Lieve Cornelis Jan De Luyck Partner Partner
The financial statements of the parent company, Barco NV, are presented below in a condensed form.
The accounting principles used for the statutory annual accounts of Barco NV differ from the accounting principles used for the consolidated annual accounts: the statutory annual accounts follow the Belgian legal requirements, while the consolidated annual accounts follow the International Financial Reporting Standards. Only the consolidated annual financial statements as set forth in the preceding pages present a true and fair view of the financial position and performance of the Barco Group.
The management report of the Board of Directors to the Annual General Meeting of Shareholders and the annual accounts of Barco NV, as well as the Auditor's Report, will be filed with the National Bank of Belgium within the statutory periods. These documents are available on request from Barco's Investor Relations department, and at www.barco.com.
The statutory auditor's report is unqualified and certifies that the non-consolidated financial statements of Barco NV for the year ended 31 December 2011 give a true and fair view of the financial position and results of the company in accordance with all legal and regulatory dispositions.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Fixed assets | 706,089 | 667,750 | 701,893 |
| Intangible fixed assets | 63,353 | 46,355 | 41,240 |
| Tangible fixed assets | 22,536 | 21,242 | 22,295 |
| Financial fixed assets | 606,238 | 588,162 | 633,004 |
| Amounts receivable after more than one year | 13,962 | 11,991 | 5,354 |
| Current assets | 327,388 | 358,916 | 259,380 |
| Stocks and contracts in progress | 133,222 | 133,329 | 87,128 |
| Amounts receivable within one year | 134,024 | 175,387 | 118,812 |
| Investments (own shared) | 45,845 | 45,845 | 45,845 |
| Cash at bank and in hand | 38 | 73 | 2,860 |
| Deferred charges and accrued income | 14,259 | 4,282 | 4,736 |
| TOTAL ASSETS | 1,033,477 | 1,026,666 | 961,273 |
| Capital and reserves | 411,288 | 343,710 | 254,192 |
| Capital | 54,532 | 54,169 | 54,169 |
| Share premium account | 134,381 | 131,150 | 131,150 |
| Reserves | 52,058 | 52,058 | 52,059 |
| Accumulated profits | 156,503 | 104,881 | 15,685 |
| Investment grants | 1,333 | 1,452 | 1,128 |
| Provisions and deferred taxes | 19,656 | 24,412 | 20,250 |
| Provisions for liabilities and charges | 19,656 | 24,412 | 20,250 |
| Creditors | 602,533 | 658,544 | 686,832 |
| Amounts payable after more than one year | 39,421 | 34,367 | 30,765 |
| Amounts payable within one year | 574,261 | 624,177 | 656,067 |
| TOTAL LIABILITIES | 1,033,477 | 1,026,666 | 961,273 |
The increase of the intangible fixed assets of 17 million euro in 2011 is mainly caused by 10 million euro R&D capitalization, 3.5 million euro know-how purchased via the Cinestore acquisition and 3 million euro relating to the purchase of SAP ERP-software. The financial fixed assets changes in 2011 consist of the intercompany purchase of shares of Barco Coordination Center (10 million euro) and the purchase of minority shares of 20% for an amount of 8 million euro. The liabilities include mainly intercompany debts (438 million euro), mainly towards Barco Coordination Center NV.
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Sales | 654,511 | 567,124 | 410,992 |
| Operating income/(loss) | 47,072 | 28,705 | -22,709 |
| Financial result | -5,166 | -4,670 | -11,213 |
| Extra-ordinary result | 12,358 | 77,834 | 12,091 |
| Income taxes | 9,838 | -3 | -4,609 |
| Profit/(loss) for the year | 64,102 | 101,866 | -26,440 |
| IN THOUSANDS OF EURO | 2011 | 2010 | 2009 |
|---|---|---|---|
| Profit/(loss) for the year for appropriation | 64,102 | 101,866 | -26,440 |
| Profit brought forward | 104,881 | 15,685 | 42,125 |
| Profit to be appropriated | 168,983 | 117,551 | 15,685 |
| Profit to be carried forward | 156,503 | 104,881 | 15,685 |
| Gross dividends | 12,480 | 12,670 | - |
| Total | 168,983 | 117,551 | 15,685 |
Barco NV sales in 2011 amounts to 654 million euro, which is 15% higher than in 2010 and 59% higher than the sales realized in 2009. In 2011, the performance of the Entertainment and Healthcare division are the main drivers for the increase in sales and operating income.
The operating income increased by 62% in 2011 to 47 million euro, compared to an operating income of 29 million euro in 2010, caused by the higher sales.
The financial results decreased as there were less dividends received from affiliates (2011: 0.4 million euro versus 2010: 6.9 million euro). Thanks to the lower interest expenses incurred in 2011 the financial result movement could be limited to -10.5%.
The extra-ordinary income in 2011 relates to additional gain (12.5 million euro) realized on the intercompany sale of shares of Barco Integrated Solutions NV to Barco Coordination Center NV, which happened in 2010 and on which an extra-ordinary income of 81 million euro was realized at that time. Last year's extraordinary result also included an impairment on the investment in Barco Denmark for 3 million euro. The extra-ordinary income in 2009 relates to the sale of the Avis business
The profit on Income Taxes of + 9.8 million euro in 2011 is related to a tax credit on research and development expenses.
The board of directors of Barco NV proposed a gross dividend of 1.10 euro per share relating to the result as of 31 December 2011.
Pres. Kennedypark 35 BE-8500 Kortrijk Tel.: +32 (0)56 23 32 11 Fax: +32 (0)56 26 22 62
Pres. Kennedypark 35 BE-8500 Kortrijk Tel.: +32 (0)56 23 32 11 Fax: +32 (0)56 26 22 62
NYSE Euronext Brussels
More information can be obtained at the Investor Relations Department of the group management:
Director Investor Relations Tel.: +32 (0)56 26 23 22 Fax: +32 (0)56 26 22 62 E-mail: [email protected]
All rights reserved
Barco Corporate Marketing Focus Advertising
JP Tanghe Senior Advisor to the CEO
President Kennedypark 35 8500 Kortrijk – Belgium
www.barco.com
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