Annual Report (ESEF) • Feb 11, 2021
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Download Source FileUntitled 2020 Integrated annual report barco.com ENABLING BRIGHT OUTCOMES Table of contents Core report...............................1 01 Barco at a glance ...................................3 02 Our company ......................................9 03 How we create value ..............................18 04 Shaping our strategy ............................. 22 05 Our technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 06 Our markets ..................................... 42 07 Our results........................................55 Governance & risk report . . . . . . . . . . . . . . . . .71 01 Corporate governance........................ CGR/3 01 Risk management and control processes .....CGR/38 Report on planet - people - communities 127 01 Our sustainability ambition statement ..........PPC/3 02 Our sustainability strategy . . . . . . . . . . . . . . . . . . . . . PPC/4 03 Our sustainability performance ...............PPC/11 04 Managing sustainability ......................PPC/68 Financial report. . . . . . . . . . . . . . . . . . . . . . . . 203 01 Barco consolidated.............................FIN/6 02 Information about the share .................. FIN/94 Assurance report. . . . . . . . . . . . . . . . . . . . . . . 305 GRI Content index ......................312 Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 CORE MORE • Governance & risk report • Report on planet - people - communities • Financial report ANNEX • Assurance report • GRI Content index • Glossary All definitions for alternative performance measures (APM’s) as used in this report are available in the glossary as available on Barco’s investor portal and in Annex of the Annual Report Barco Integrated report 2020 2 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS On the road to integrated reporting Since 2017, Barco has been on a mission to enable bright outcomes. In line with that mission, we are happy to present our very first integrated report. It highlights our commit- ment to financial as well as non-financial outcomes, value and impact. Beyond accountability and reporting, we also consider integrated reporting a driving force for value creation and innovation. It will guide us further on our road to enabling bright outcomes – for customers, business partners, employ- ees, shareholders and every other stakeholder. Barco Integrated report 2020 3 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS What really marked 2020 was the agility, creativity and resilience shown by each of us, individually and as a company. Message from the CEO Dear customers, business partners, employees and shareholders, A year to forget? An unforgettable year? Whatever option you choose, 2020 was an unprecedented year for each and every one of us. Just like at many other organizations, the entire Barco team worked extraordinarily hard to navigate the human and busi- ness impacts of the covid-19 crisis. In spite of our eorts and the many measures we took, we could not prevent our results from dropping steeply, as disruptions in our markets knocked demand o balance. But we are confidently poised for renewed growth when our key markets in their “new normal” become fully active again. A spirit of agility, creativity and resilience When we’ll look back upon 2020 within a decade, I hope we’ll remember how we managed to turn that massive challenge into meaningful choices. To me, what really marked 2020 was the agility, creativity and resilience shown by each of us, indi- vidually and as a company. Many Barco employees shifted from oce to remote working in no time. Others focused on keeping our factories and oces open for business, combining lots of creativity with timely, pragmatic safety protocols. We adjusted cost levels, redeployed teams to respond to market realities and ensured continuity towards our customers, helping them navigate through the market shocks. Building on solid foundations 2020 confirmed the importance of a strong company culture. Our values, beliefs and attitude have guided us through the crisis. Of course, it takes more than that to keep a business sailing through the heavy winds 2020 brought. While we were ini- tially preparing for strong growth in 2020, the Barco ship was also ready for rough weather when the coronavirus hit, as we are a fit and lean company. Between 2016 and 2019, we had intensively focused on performance, boosting operational and commercial excellence, ensuring cost eciency and building out our commercial footprint while we shaped our organiza- tion, product portfolio and product-market strategies. In last year’s annual report, I wrote how pleased I was that Barco had a healthy, resilient platform for future growth. While the covid- 19 virus left no room for growth, these solid foundations did support us in these heavy winds. Barco Integrated report 2020 4 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Facing head- as well as tailwinds All three Barco markets have been impacted by the covid-19 crisis, with varying degrees of severity. We experienced some tailwinds but many headwinds. As cinemas closed down and events got cancelled, our Entertainment business faced sig- nificant downturn. In Healthcare, the pressure on hospitals initially sent demand for our diagnostic displays and remote diagnostic tools soaring. This growth, however, was oset by lower demand for healthcare solutions in the second half of the year, as elective procedures in hospitals were postponed. Enterprise sales also declined as oces locked down, but began to show signs of recovery with steady progress in the second half of the year. Navigating through the crisis: defense and oense Facing diminishing sales in a number of our markets, we decided to combine both oensive and defensive plays during the crisis. Variable cost structures, cost control measures and government support all helped keep our business running. To ensure a strong rebound from the downturn – or rather, to make sure we emerge from the pandemic even stronger – we kept investing in research and development, continued to launch new products and stepped up well defined investments in customer engagement in 2020. Recipe for recovery We are confident that we will harvest the fruits of that approach. After all, our markets hold promising opportunities for growth in 2021 and beyond: • Our strong healthcare visualization solutions perfectly cater to the need for increased care capacity and to elective surgery once it returns to normal levels; • Clickshare Conference meets the needs of corporates who are now looking for the right technology to enable their hybrid workplaces; • Our next-generation laser projection technologies will help cinema exhibitors dierentiate themselves from the competition while saving costs. In addition, we have reinforced our commercial footprint and our In China For China position, thus increasing our competi- tive strength across the globe. Last but not least, the covid-19 crisis has pushed Barco to operate in new ways, accelerating digitization. We’re shifting gears in that respect too. By wel- coming Marc Spenlé, our new Chief Digital and Information Ocer, as well several other new colleagues with seasoned technology experience and skills, we will create value through digital innovation. Continued focus on sustainability While 2020 was a very dierent year for our entire business, Barco stuck to its sustainability commitments. Since 2017, when we decided to integrate sustainability into every aspect of our business, sustainability has been increasingly pervad- ing everything that Barco does. In 2020, we made progress in various new domains and reached our 2020 targets for ‘planet’, among other achievements. To highlight our dedi- This Integrated report underlines the fact that sustainability-linked factors are just as important as financial factors in helping us create value. To ensure we’d emerge even stronger from the downturn we kept investing in research and development, kept launching new products and invested big in customer engagement in 2020. cation to sustainability, we replaced our familiar Annual and Sustainability reports by this Integrated report. It underlines the fact that sustainability-linked factors are just as important as financial factors in determining our performance and helping us create value. Thank you! This year, more than ever, I want to close my message with a big thank you. Thanks to all our colleagues who adapted rapidly to the new reality. Thank you to our clients, suppli- ers, investors and our Board of Directors, for supporting us and maintaining trust in our long-term potential. It has been a tough year and we are not at the end of this marathon yet, but we look towards the future with confidence and are com- mitted to keeping Barco’s performance on track. Thanks for you continued support. Jan De Witte CEO Since the outbreak of the covid-19 pandemic, we at Barco have been continuously adjusting to face the challenges posed by the virus. Read more about our approach Barco Integrated report 2020 5 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Key figures Percentage of new product releases with a Barco ECO label Barco’s standard customer experience metric, measured quarterly (upper quartile industry performance) NPS (Net Promoter Score) Eco score Employees Reported in heads, excluding temporary workforce (Database Corporate Associates per 31/12/2020) Sales (in millions of euro) 1,028.5 2018 1.082.6 2019 770.1 2020 100 200 300 400 500 600 700 800 900 1, 000 1, 100 Ebitda (in millions of euro) 12.1% 14.1% 7.0% 124.5 2018 153.0 2019 53.6 2020 20 40 60 80 100 120 140 160 180 200 % of sales 48% 47 Gross profit (in millions of euro) 41340.1% 39.7% 36.9% 2018 429.3 2019 283.8 2020 % of sales 100 150 250 350 450 550 50 200 300 400 600 500 2018 3,664 2019 3,636 2020 3,303 Barco Integrated report 2020 6 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Highlights JANUARY Demetra wins Henry van de Velde Gold Award for Business Innovation 2020 More than revolutionizing skin imaging, our Demetra platform also excels in design. We were honored to receive Belgium’s most prestigious design recognition – the Henry van de Velde Gold Award in 2020. Read more JANUARY Trac management center keeps 335,000 vehicles moving 24/7 at the Frankfurter Kreuz interchange At the Hessen Trac Center in Germany, a giant Barco UniSee LCD video wall (39 panels) provides a continuous overview of the trac on no less than 2,000 km of highway. Our TransForm N controller secures the collection and distribution of all media sources to all the workstations. Read more FEBRUARY New ClickShare Conference brings wireless conferencing to the workplace The new ClickShare Conference works seamlessly – and wirelessly – together with videoconferencing software and any type of meeting room hardware to make remote meetings truly intuitive – just what users need in today’s hybrid workplace. Read more MARCH Barco stays open for business – also during the covid-19 pandemic Throughout the covid-19 crisis, Barco focused on business continuity, keeping our production operational, reaching out to customers and implementing strict measures to safeguard the well-being of our people. Read more JUNE New presentation switcher meets the needs of both live events industry and corporate meeting spaces The PDS-4K full-screen presentation switcher is a new member of our industry-leading image processing platform. More than ensuring high-quality visual experiences, it also responds to users’ demands for flexible, long-lasting and easy-to-use solutions. Read more Barco Integrated report 2020 7 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Highlights SEPTEMBER Revealing immersive showpiece with Culturespaces: Bassins de Lumières In Bordeaux (France), Culturespaces opened Bas- sins de Lumières: an amazing exposition that brings the fine art of Gustav Klimt and Paul Klee to life in a former World War II submarine base – thanks to over 100 Barco projectors. Read more SEPTEMBER Achieving our first target to reduce carbon footprint of own operations one year in advance In 2016, Barco had set a number of ambitious sustainability goals to be achieved by 2020. Thanks to our dedication to sustainability, we reduced the carbon footprint of our own operations by 20% in 2019, achieving our target one year in advance. Read more OCTOBER Barco Insights: broadening our IoT-platform for projectors No complex setup or network configuration, no local host PC and no software to install: Barco Insights, our new IoT-enabled cloud platform, makes the remote monitoring and serviceability of projectors easy. Read more OCTOBER Enabling virtual presence for the digital operating room with Caresyntax Together with Caresyntax, our Healthcare division launched a virtual presence technology for the digital operation room, meeting the global surge of remote work and remote collaboration. Read more NOVEMBER Virtual classrooms: delivering world-class business education When Mays Business School at Texas A&M University (US) decided to embrace online teaching, they chose weConnect. “Unlike other solutions, this is really a teaching platform. It lets me truly engage with participants,” said senior advisor Jared Bleak. Read more Barco Integrated report 2020 8 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Our company CORE Report Barco Integrated report 2020 9 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Barco’s mission is to enable bright outcomes by transforming content into insight and emotion. Our mission statement Imagine a way to see, sense, and share the intangible. It’s what happens when big data becomes knowledge. When images become insight. And when experiences come to life. That’s what Barco is all about. In a world where data and rich content are expanding exponentially, we empower you with inspired sight, sound and sharing solutions to help you make meaningful connections. For us, it’s you - our customer - that counts. We help you achieve your goals, whether it’s protecting the health and safety of millions, creating unforgettable experiences, or sup- porting people to work smarter together. We help you get the most out of what you do every day. So together, we create brighter outcomes, around the world. CORE Report 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Barco Integrated report 2020 10 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR RESULTS Regions • Sales & marketing • Customer service & projects Geographical breakdown of sales General Services • Human resources • Finance, strategy & legal • Information technologies • Corporate marketing Operations • Manufacturing • Supply chain • Facilities, health & Safety • Quality Innovation & technology • Technology office • Research & development • Product management Our organisation 39% The Americas 36% EMEA 25% Asia-Pacific 38% Entertainment 28% Enterprise 34% Healthcare Organigram Entertainment Enterprise Healthcare The Americas EMEA Asia-Pacific Divisions Sales per division Barco Integrated report 2020 11 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Geographical footprint The people of Barco Our people are the driving force to our success. A team of over 3,300 employees, located around the globe, all join forces to enable bright outcomes; AMERICAS • Brazil • Canada • Colombia • Mexico • United States ASIAPACIFIC • Australia • China • Hong Kong • India • Japan • Malaysia • Singapore • South Korea • Taiwan EUROPE & MIDDLE EAST • Belgium • France • Germany • Italy • The Netherlands • Norway • Poland • Russia • Spain • Sweden • Turkey • United Arab Emirates • United Kingdom Sites R&D and/or manufacturing facilities 72% male 28% female 12.1% The Americas 54.4% EMEA Number of employees Gender Geographical Per functional group 3,6642018 3,6362019 3,3032020 Reported in heads, excluding temporary workforce (Database Corporate Associates per //) 16.7% Sales 28.5% Research & development 1.4% Quality, supply chain & support 1.8% Procurement 29.6% Manufacturing & logistics 4.9% Marketing 8.9% Customer service 0.7% Customer projects 7.5% Administration 33.5% Asia-Pacific Barco Integrated report 2020 12 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Leadership Barco believes that the role of its leadership team and its Board of Directors is not only to protect the corporation but also to ensure that Barco is able to create value for society at large. While Barco’s Board of Directors sets, steers and monitors our strategic direction, our Core Leadership Team (‘CLT’) is responsible for implementing our group strategy and policies and achieving our objectives and results. In this way, all gover- nance bodies contribute to value creation at Barco. 14 18 19 20 21 1 2 3 5 6 7 8 9 10 13 15 17 16 11 4 12 MATERIAL TOPICS Barco Integrated report 2020 13 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS The composition of the Board of Directors meets the gender diversity requirements. All directors hold or have held senior positions in leading international companies or organizations. See our Corporate Governance section for the biographies. Board of Directors 4 Directors with 5 years of seniority Female members of the Board 2 Independent directors 3 Charles Beauduin Chairman Ashok K. Jain Jan De Witte CEO Hilde Laga Frank Donck An Steegen In 2020, Mr Luc Missorten resigned from the Board of Direc- tors, reducing the number of Board members from 7 to 6. Barco Integrated report 2020 14 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS The CLT, which operates under the chairmanship of the Chief Executive Ocer, comprises key ocers from functions, busi- nesses and regions. Our Core Leadership Team Jan De Witte CEO Stijn Henderickx EMEA Anthony Huyghebaert Chief HR Ocer George Stromeyer GM Enterprise Wim Buyens CEO Cinionic Rob Jonckheere Global Operations Iain Urquhart Americas 6 CLT members with 5 years of Barco seniority Female CLT member 1 Non-Belgian CLT members 7 Olivier Croly APAC Kenneth Wang MD Barco China Nicolas Vanden Abeele GM Entertainment Gerwin Damberg Chief Technology Ocer Filip Pintelon GM Healthcare Kurt Verheggen General Counsel Ann Desender Chief Financial Ocer Marc Spenlé Chief Digital & Information Ocer Anthony Huyghebaert, Marc Spenlé and Kenneth Wang are the new faces in Barco’s CLT in 2021. See our Corporate Gover- nance for the biographies and the description of the changes in the CLT. Barco Integrated report 2020 15 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Culture & ethics Every organization has a culture; implicit or explicit. It is its personality – a set of unwritten rules on how an organiza- tion behaves. And it reveals itself in many dierent forms. In 2019, Barco rejuvenated its corporate culture, defining the cultural traits that Barco must embrace to continue leading in its dynamic markets. For years, ethical behavior has been deeply embedded in the Barco culture. Barco culture: how we live our DNA Corporate culture is everywhere. It comes alive in how we act towards our customers and how we talk and listen to them. It becomes visible in the way we design our processes: have we designed them from our perspective or from the perspectives of those who are aected by them? It guides us in creating teams, but also in how we treat each other as team members. Culture even comes alive in our decision of how to greet each other in the morning. And above all, it defines how we execute our strategy. Culture is how we live our DNA. To come to a common understanding of the culture we envision, we have looked inside the company and reverse engineered the Barco culture. This ‘meeting of minds’ has crystallized into how we can live our DNA with 5 building blocks as the key elements of our Barco culture. Read more on the culture blocks 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 11 4 MATERIAL TOPICS Barco Integrated report 2020 16 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS The importance of ethics and compliance Barco’s reputation and continued success depend on the con- duct of its employees as well as its business partners. That’s why we put great emphasis on ethics and compliance: we continuously invest in building a company culture in which ethical conduct and compliance with Barco’s policies and the applicable regulations are at the core of how we do business. Read more on our approach of compliance and ethics Barco Integrated report 2020 17 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS How we create value Barco Integrated report 2020 18 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS PeoplePeople PlanetPlanet CommunitiesCommunities ManufacturedManufactured IntellectualIntellectual FinancialFinancial Advanced visualisation & collaboration solutions A global player, equally represented across regions INPUTS OUTPUTS E n t e r p r i s e d i v i s i o n H e a l t h c a r e d i v i s i o n E n t e r t a i n m e n t d i v i s i o n O n e c u l t u r e , fi v e b u i l d i n g b l o c k s S u s t a i n a b l e P e r f o r m a n c e I n n o v a t i o n O u t c o m e - b a s e d Enabling bright outcomes Value creation model The concept of ‘value creation’ fits perfectly with Barco’s mis- sion of enabling bright outcomes for its stakeholders. In the above “Value creation model” we describe our inputs and explain how, through our business model, we convert these to outputs that ensure sustainable value to all our stake- holders. Barco Integrated report 2020 19 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Inputs 92% iGemba improvement suggestions implemented 2.3 Inventory turns 3% ROCE 10 Number of new patent filings 430 Number of patents at year-end Outputs -0.05 Earnings per share (€) 7% EBITDA margin -35.9 Free cash flow (mio €) 770.1 Group sales (mio €) 69.6% Make (over hardware revenues) 1.9% Capex (in % of sales) 4 Countries with a manufacturing facility 142 Number of key(+) & core suppliers (covering 81% of material cost) 28.5% Employees in R&D 13.30% R&D spend (in % of sales) 193.5 Net cash (mio €) 68.5% Equity as percentage of balance sheet total 34% Opex (in % of sales) Intellectual Manufactured Financial INPUTS OUTPUTS Enabling bright outcomes All definitions for alternative performance measures (APM’s) are available in the glossary Barco Integrated report 2020 20 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS INPUTS OUTPUTS Enabling bright outcomes PlanetCommunities 17% Women in senior management 20% Internal mobility (% of vacancies filled internally) 2.44 Lost time injury frequency rate 47 Customer Net Promotor Score (relationship NPS) 43% Key+ and core suppliers with sustainability score higher than 80% 2 Number of product lines in scope of ISO 27001 34% Carbon footprint reduction of own operations (vs 2015) 27% Energy footprint reduction of sold products (vs 2015) 48% New products released with Barco ECO label 23% Revenues from products with Barco ECO label People 3,303 Number of employees (# heads) 11.3 Average training hours per employee (# hours) 374 Number of new (external) hires (# heads) 98% Employees trained in Standards@Work 1,184 Number of certified dealers/partners 98% Key(+) and core suppliers that signed declaration of compliance with RBA Code of Conduct (Responsible Business Alliance) 34.3 Total energy consumption (MWh/mio € revenues) (of which 53.5% renewable) 4% New products released with recycled plastics Inputs Outputs All definitions for alternative performance measures (APM’s) are available in the glossary Barco Integrated report 2020 21 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Shaping our strategy Barco Integrated report 2020 22 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS On a mission to enabling bright outcomes Barco is on a mission to enable bright outcomes by transform- ing content into insight and emotion. To guide us in pursuing that mission, we introduced a new strategy in 2017. Building on our strengths and inspired by a series of technological and socio-economic trends, our strategy outlines how we plan to maintain and build on our role in today’s digitally accelerating world. Three time horizions The Barco strategy is a work in progress. It aims to maximize our business opportunities across three time horizons in three ‘chapters’. Since 2019, we have been focusing on growth and expanding our hardware, software and service capabilities. Disruptions like the 2020 covid-19 pandemic, market dynam- ics, materiality and evolving risks are constantly shaping our strategy. Although they may impact the progress and timing of some strategic objectives, they will not change the course of our strategy • Objective: focus on performance and shape the organization, product portfolio and market strategies to build a healthier, more resilient platform for future growth. • Target: EBITDA from 8% in 2016 to 12% in 2018, with a flat top-line • Objective: focus on growth by further expanding our capabilities, footprint, skills and portfolio while keeping our focus on operational eciency. • Target: ecient sales growth (mid + single digit per year) and EBITDA margin between 14% and 17% • Objective: focus on enabling bright outcomes by delivering a combination of hardware, software and services via new business models. • Target: growth in recurring revenues and sustained topline and profit growth Chapter 2: 2019 - 2023 Chapter 3: 2023 and beyond Chapter 1: 2016 - 2018 Barco Integrated report 2020 23 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS On a mission to enabling bright outcomes Four strategic levers To cater to the rapid changes in today’s markets, Barco is evolv- ing from being a tech ‘specs’ vendor into a partner that enables bright outcomes. The commitment to outcomes is one of the four levers of the Barco strategy. It is intertwined with a zeal for innovation, a characteristic that has been shaping Barco since its earliest days, a permanent focus on performance and the resolute choice to go for sustainable impact. 1. Innovate for impact 2. Focus on performance 3. Offer outcome-based solutions 4. Go for sustainable impact Barco Integrated report 2020 24 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Focus areas Proof points in 2020 Continuing to invest in R&D • .% of sales spent on R&D, balancing long- and short-term R&D. • The global software development structure was further strengthened with GEAX, our Globally Empowered to Accelerate Experience team. Innovation at Barco is innovation for impact • Innovation award winner ClickShare Conference facilitates the hybrid meetings which will take a central role in the new way of working and collaborating. • WallConnect Cloud allows remote monitoring and diagnosing of video walls – boosting efficiency, problem-solving and wall uptime. • NexxisCare software helps hospitals manage ORs in multiple facilities remotely – to anticipate on issues and improve efficiency in surgical environments. • Barco Insights, our cloud-based IoT solution for enhanced projector manage- ment, simplifies and facilitates remote monitoring and serviceability. • With the new SPk, the Barco Series projector for smaller screens (, to , lumens), Cinionic makes its laser solutions accessible for every theater. • New XT-series of LED tiles meet the varying needs in our core segments: control rooms, television studios , meeting rooms and D visualization. • UDM projector series expanded to meet the requirements of the events and ProAV market: brightness in a light, compact design. • SecureStream allows secure and user-friendly streaming outside the control room. Innovation is more than introducing new products • weConnect, Demetra and Synergi target the new markets of education, der- matology and oncology, respectively. • Demetra skin imaging platform officially launched in the US market as SaaS solution. • Cinionic launches new business models, in addition to Laser as a Service: Cinema as a Service and Premium as a Service. • ClickShare Alliance Program: integrating ClickShare Conference with meeting room technology of other leading players (Jabra, Logitech, Vaddio, Yamaga) to improve the hybrid meeting room experience. Raising the return on our innovation investments by enhancing processes and organization • New Chief Digital & Information Officer Mark Spenlé appointed. • Further strengthening the global software development structure with GEAX, Barco’s Globally Empowered to Accelerate Experience team. Strategic levers 1. Innovate for impact More than launching innovative products, innovation at Barco aims to deliver impact, i.e. added value for our customers, often in mission-critical areas. By analyzing our innovation plans, discussing them with customers and de-risking them, we want to ensure solid returns on our innovation investments. To keep fueling the innovation that is typical for a technology leader like Barco, we invest heavily in R&D, balancing long- and short-term initiatives. Rather than innovating just to create new digital visualization products and services, however, we focus on innovation for impact, i.e. innovation that solves custom- ers’ real challenges and creates real value in mission-critical areas. Moreover, we also apply innovation practices to change our way of working and doing business. By sharpening our innovation processes, we want to raise the returns on our innovation investments. 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 11 4 MATERIAL TOPICS Barco Integrated report 2020 25 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Strategic levers 2. Focus on performance To lead the way in changing times, we unceasingly focus on performance: we work hard to drive eciency and agility, leveraging OneBarco scale and excellence, strengthen our commercial capabilities while building ICFC (In Country For Country) capabilities, and we apply ‘value-focused thinking’ in everything we do. For several years, Barco has worked hard to improve its per- formance and shape the organization. We made choices to streamline our business portfolio and focused on (cost) e- ciencies and operational excellence. That approach bore fruit: thanks to our eorts, we managed to install a true culture of performance and became a more resilient company. While in 2019 we were fit to focus on growth, the covid-19 crisis urged us to sharpen our focus on performance again. Focus areas Proof points in 2020 Making choices: streamline our busi- ness portfolio • While the business portfolio is streamlined now, making choices will remain key to ensure the impact – the value – of our innovation efforts. • As part of a product-cost improvement opportunity, we started outsourcing the production of the UniSee LCM component and closed our Taiwan factory. Focusing on R&D and operational eciency • Accelerated value engineering initiatives across the group led to gross margin growth progression for particular product lines. • All new hires (white collars) go through a ‘continuous improvement’ train- ing course as part of their onboarding program ( Belgium, global rollout ). Commercial excel- lence • Continued investments in R&D and commercial teams in China to strengthen our commercial footprint there (mainly in Events, ProAV and Healthcare). • Expansion of new partner program, reinforcing our commercial scope. • Further rollout of new service offerings, e.g. break-fix scope and definition, dashboard and reporting processes, and improved interaction between divi- sions and commercial departments. • By keeping our business open during the cov i d- lockdowns, we ensure business continuity and a strong market position once the impacted markets start to recover. 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 4 11 MATERIAL TOPICS Barco Integrated report 2020 26 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Strategic levers 3. Deliver outcome-based solutions We want to be a reliable partner that provides its customers with outcome-based solutions instead of just products. That implies a step-change in the way we work: we have to evolve from a tech ‘specs’ vendor into a partner that delivers out- comes through hardware, software and services. Traditionally a tech ‘specs’ vendor, we are now strengthening our capabilities and organization to combine hardware with software and services. Doing so is a multi-year journey, but as our technology is mission critical, the potential is huge. More than constantly improving customer services, delivering outcome-based solutions will also help us achieve predictable, recurring revenues. Step by step, we are making progress in this field. Focus areas Proof points in 2020 Strengthening capabilities and organization • New initiatives and actions, incl. Standards@Work training, taken to further boost security awareness throughout the organization. • Continued build-out of software and digital business capabilities. • Appointment of Marc Spenlé as the new Chief Digital & Information Officer. • Barco’s software organization was further strengthened. • Progress on subscription-based services (SaaS, incl. subscription, registration and license management), such as weConnect, Demetra and Synergi. • XMS Cloud Management Platform for remote control of the ClickShare and wePresent devices includes analytics to drive the digital workplace. Exploring and launching out- come-based solutions, in new business models • NexxisCare helps hospitals manage ORs in multiple facilities remotely – to anticipate on issues and improve efficiency in surgical environments. • Cinionic introduces ‘Cinema as a Service’ and ‘Platform as a Service’ and launches new, flexible payment models. • The cloud-based Barco Insights IoT solution for projector management simpli- fies and facilitates remote monitoring and serviceability. 14 19 20 21 5 6 7 8 9 10 12 13 15 17 16 11 4 18 1 2 3 MATERIAL TOPICS Barco Integrated report 2020 27 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Strategic levers 4. Go for sustainable impact Barco is convinced that sustainable business is good business. That’s why our sustainability strategy is an integral part of our corporate strategy. When deciding how to execute our strategy, we decided to work with respect for the planet, our people and the communities we operate in. For each of these three domains, which we call our sustainability pillars, we defined an overall ambition statement as well as several focus areas. Year after year, our commitment to ‘go for sustainable impact’ becomes more deeply embedded in Barco’s corporate DNA. Focus areas Proof points in 2020 Strengthening governance and organization • Strong overall directional management and clear accountability with workstream leaders. • We set up a strong organization to prepare future external assurance of sustainability KPIs. • Barco joined the Science Based Targets initiative, a global movement of lead- ing companies that align their businesses with the most ambitious aim of the Paris Agreement. Sustainability strategy • Kick-off of integrated reporting at Barco. • materiality assessment: more than stakeholders and Barco lead- ers participated. • Science-based targets defined (currently under validation) to further solidify our ambitious sustainability goals. Improving sustaina- bility performance in the domains of planet, people and commu- nities • Full focus on the health, safety and wellbeing of our employees during the covid- crisis. • Upgraded from A to AA in MSCI ESG rating, ranking among the top 12% of the Electronic Equipment, Instruments & Components industry. • Sustainalytics ranking rd out of in the Electronics equipment subindustry. • We reached the target to reduce carbon footprint of own operations one year in advance. • targets on product energy footprint and ecodesign achieved. • Flagship product releases in received an A or even A+ ecoscore. • Barco’s customer Net Promotor Score (NPS) rose from to in , high- lighting the increasing satisfaction/loyalty of Barco customers. • Customer journey managers in each division will support Barco’s transforma- tion towards increased customer centricity. • Five new e-learning courses on Standards@Work (ethics and compliance) were launched. 20 21 5 6 7 8 9 10 12 15 17 16 11 14 18 1 2 3 4 19 13 MATERIAL TOPICS CORE Report Barco Integrated report 2020 28 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS Market dynamics Materiality Risks Keeping our strategy in shape Our world and our markets are changing faster than ever. As these changes largely impact our customers’ businesses as well as ours, it is key to understand today’s dynamics and take them into account when implementing our strategy and monitoring process. We also consider and keep track of evolutions in the material topics and risks that possibly aect Barco and Barco’s capa- bilities to execute its strategy. Barco Integrated report 2020 29 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Market dynamics We considered the prevailing market dynamics when we defined our new mission statement and strategy three years ago, and continue to take these into account as the topics evolve and we step up our strategy. Technological as well as global socio-economic trends aect our roadmap for the future. Barco Integrated report 2020 30 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Internet of Things (IoT) – sensors IoT solutions have reached maturity. Used in a growing number of applications in every industry, they now deliver tangible business benefits, from creating new data sources to providing real-time performance updates. Cloud computing Cloud computing has been around for many years now. Today, almost everything is con- nected to the cloud in one way or another. According to Gartner, the proportion of IT spending that is shifting to the cloud will increase in the aftermath of the covid-19 crisis. Analytics and AI Leading organizations aim to become data driven as a way to accelerate business. Tech- nologies like AI, machine learning and natural language processing have huge disruptive power, oering intelligence that may well surpass human insight. Security and data protection In today’s digital, increasingly connected society, systems, networks and data must be protected from the rapidly accelerating threat of increasingly sophisticated cyberattacks, while also complying with data protection regulations. 80% 3.9 million of consumer or industrial products containing electronics will perform on-device analysis by 2025 (source: Gartner, 100 data and analytics predictions through 2024) USD is the average cost of a data breach (source: IBM, 2020 Cost of a Data Breach Report) 61% 14.2% of enterprises show a high degree of IoT maturity (source: Gartner, 2019) of the total global enterprise IT budget will be spent on cloud computing in 2024, up from 9.1% in 2020 (source: Gartner, November 2020) Technological trends The rapidly accelerating pace of digitization While digitization was already high on the agendas of most organizations, the covid-19 pan- demic accelerated the paradigm shift towards digitization and servitization of the economy in 2020. In the heat of the crisis, operating digitally was the only way to stay in business. Digital services, remote working and e-commerce are now here to stay. Trends that are bound to gain importance in the coming years include: Barco Integrated report 2020 31 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Socio-economic trends 345 billion USD will be the value of the as-a-service market by 2026 (source: Research Insights) Everything comes as a service The advent of the cloud triggered a new busi- ness model: a rising number of services and applications are now available as a service, i.e. on demand over the internet, instead of delivered using on-premise hardware and software. Businesses are adopting the on-de- mand oering as it allows them to acquire new technology quickly with fewer up-front costs. The shortening product life cycle With the rapid advancement of technology and globalization and with the resulting tighter competition, product life cycles have been shortening significantly over the past few years. As a result, companies are under constant pressure to rapidly develop and launch new products and optimize revenue and profit. The rise of emerging economies By 2050, up to six of what are currently known as emerging nations could be among the seven largest economies in the world, according to projections by PwC and oth- ers. Among them is China, which is steadily assuming a new role at the epicenter of global technology and innovation. The quest for sustainability ‘Creating a more sustainable world’ – and bal- ancing that quest with economic interests – may well be one of the biggest challenges of today’s society. 50% 25% x 3 of annual company revenues are derived from new products launched within the past 3 years of the world’s largest companies is from emerging markets today (vs. 4% in 1995) (source: www.agility.com) Human consumption of the earth’s natural resources more than tri- pled between 1970 and 2015 and is expected to more than double between now and 2050 (source: ‘The World Counts’) Read our ‘markets’ section to discover trends in events (Entertainment), in meeting rooms and in control rooms (Enterprise) as well as in radiology and operating rooms (Healthcare) Barco Integrated report 2020 32 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Materiality A materiality assessment helps organizations understand what topics matter most to its business and stakeholders. Barco regularly updates its materiality assessment to make sure it reflects changes in its business and the external environment. Our 2020 materiality assessment In 2020, we conducted a new, extensive materiality assess- ment, based upon and aligned with our integrated reporting approach, considering the six capitals. The resulting mate- riality matrix has three categories – low, medium and high materiality topics. The illustration reflects our medium and high material topics. IMPACT ON LONG-TERM SUCCESS OF BARCO IMPORTANCE TO STAKEHOLDERS High materiality Medium materiality 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 14 11 4 Communities 1. Customer engagement 2. Product quality safety & security 3. Information security & data protection 4. Business ethics 5. Corporate governance 6. Responsible supply chain management 7. Community engagement Intellectual 8. Innovation management 9. Brand Financial 10. Financial resilience 11. Sustained profitable growth 12. Market reach People 13. Employee engagement 14. Employee health, safety & wellbeing 15. Labor practices & human rights 16. Learning & development 17. Diversity & inclusion Planet 18. Product stewardship 19. Climate change & energy 20. Waste management Manufactured 21. Long-term asset performance Read more on our materiality assessment Barco Integrated report 2020 33 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Defined in 2015 by the United Nations General Assembly, the Sustainable Development Goals (SDGs) consist of 17 global goals with a 2030 deadline. We realize these goals cannot be met without support from the global business community. Our approach to supporting the SDGs is to focus on the goals where we can have the most impact, while screening and implementing actions that contribute to the other goals as well. We have selected six SDGs that are closely linked to Barco’s high material topics and the overall Barco strategy: • SDG 3: Good health & well-being: Ensure healthy lives and promote well-being for all at all ages • SDG 7: Aordable and clean energy: Ensure access to aordable, reliable, sustainable and modern energy for all • SDG 8: Decent work and economic growth: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all • SDG 9: Industry, innovation and infrastructure: Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation • SDG 12: Responsible consumption and production: Ensure sustainable consumption and production patterns • SDG 13: Climate action: Take urgent action to combat climate change and its impacts How the UN SDGs guide our strategy 8. Innovation management 10. Financial resilience 11. Sustained profitable growth 1. Customer engagement 2. Product quality safety & security 3. Information security & data protection 18. Product stewardship 1. Customer engagement 2. Product quality safety & security 3. Information security & data protection 4. Business ethics 13. Employee engagement 18. Product stewardship 19. Climate change & energy Innovate for impact Focus on performance Oer outcome-based solutions Go for sustainable impact UN SDGs HIGH MATERIAL TOPICS Barco Integrated report 2020 34 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Stakeholder engagement Barco attaches great importance to stakeholder engagement. After all, outside views help us identify and prioritize emerging issues and better align our strategy, actions and policies with the interests of our society and planet. In addition, stakeholders can provide valuable feedback on our performance and other aspects, like transparency. 2020 stakeholder engagement process In 2020, we organized a comprehensive stakeholder engagement process, involving external as well as internal stakeholders, as input for our materiality assessment. In total, 111 stakeholders participated in surveys and interviews. Top 5 material topics by stakeholder group (2020 assessment) Read more on our stakeholder engagement approach Customers Employees Investors Suppliers (Non-) governmen- tal organizations 1 Customer engagement Customer engagement Financial resilience Innovation manage- ment Climate change & energy 2 Product quality, safety & security Employee engagement Sustained profitable growth Product quality, safety & security Information security & data protection 3 Innovation man- agement Product quality, safety & security Market reach Business ethics Innovation manage- ment 4 Financial resilience Innovation management Product quality, safety & security Customer engage- ment Product stewardship 5 Information security & data protection Brand Corporate governance Financial resilience / Sustained profitable growth Employee health, safety & wellbeing Barco Integrated report 2020 35 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Risks Within the context of its business operations, Barco is exposed to a wide variety of risks that can aect its ability to achieve its objectives and to execute its strategy successfully. To antic- ipate, identify, prioritize, manage and monitor the risks that impact its organization, Barco puts a sound risk management and control system into place, which is actively supported by the Board of Directors. Risk management process Risk management is firmly embedded into Barco’s processes, at all levels. For every key management, assurance and sup- porting process, Barco has developed and implemented a systematic risk management approach that consists of five steps: identification, analysis, evaluation, response and mon- itoring. Risk Trend Material topics Strategic levers 1 Macroeconomic, geopolitics and market • Market reach • Brand • Focus on performance 2 Information security • Information security and data protection • Product quality, safety and security • Focus on performance • Go for sustainable impact 3 Digital transformation and new technologies • Innovation management • Learning and development • Innovate for impact • Offer outcome based solutions 4 Human capital and talent management • Employee engagement • Learning and development • Employee health, safety and wellbeing • Diversity and inclusion • Focus on performance • Go for sustainable impact 5 Product quality • Product quality, safety and security • Customer engagement • Brand • Innovate for impact • Offer outcome based solutions 6 Data governance and privacy • Innovation management • Information security and data protection • Go for sustainable impact 7 Supply chain and ‘Nth’ party risk • Responsible supply chain management • Sustained profitable growth • Product quality, safety and security • Focus on performance • Go for sustainable impact 2020: main risks Every year in the fourth quarter, Barco performs a company- wide risk assessment and compliance gap analysis. In 2020, 13 risks were identified and evaluated by CLT members and senior managers via an online questionnaire. The assessment and evaluation led to the following top risks: Read more on Barco’s risk management Barco Integrated report 2020 36 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Our technology Barco Integrated report 2020 37 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Barco is and has always been a true technology company. Building on decades of experience and expertise in imaging and visualization, we continue to invest strong (on average 11% to 12% of turnover) in R&D in order to meet the rapidly evolving market demands. A disciplined and well-governed approach ensures that our innovation eorts pay o and can be turned into commercial reality. Technology: approach Successful innovation is innovation that creates both value for the customer and true business value. Barco increasingly adopts a disciplined approach to innovation, ensuring that our ideas are tightly connected to our strategy and can be turned into both revenue growth potential and brighter outcomes for our customers. Barco as a technology company invests generously in innovation: every year more than 10% of our top-line sales are reinvested in R&D. Our technology 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 11 4 MATERIAL TOPICS Barco Integrated report 2020 38 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS INTERVIEW WITH GERWIN DAMBERG, CHIEF TECHNOLOGY OFFICER Innovate for impact: how do we do that at Barco? Barco has adopted an increasingly disciplined approach to investing in innovation in order to balance risk and poten- tial returns. Part of the innovation process is validating that our programs and initiatives are focused on uncovering and solving real customer pain points, have a clear path to revenue growth potential and are tightly connected to our technology strat - egy. CTO Gerwin Damberg explains. In 2019, Barco reviewed its technology portfolio. Why the change? While hardware-centric solutions such as display and projection applications are still at the core of many of our businesses, connectivity, workflow improvements and content insights are becoming increasingly important in almost all of Barco’s product oerings. As such, Barco took action to broaden and deepen our expertise in some of the younger fields such as computational optics and photonics as well as rendering, parallel computing, and machine learning. In 2019 we took the strategic decision to review our technology tool chest and include a broader range of building blocks to cover all those enabling technologies. This was complemented with some finetuning of our overall approach to innovation to link new ideas even closer to customer and business. 2020 of course was a challenging year, but in spite of the changes in some of our markets we were able to accelerate the innovation pace to come out as a stronger technology company when the markets bounce back. What’s new in Barco’s approach to innovation? Barco as a technology company invests generously in inno- vation: every year more than 10% of our top-line sales are reinvested in R&D. Yet, fast-paced and focused innovation in product development requires a disciplined, well-governed approach to innovation investments, especially for early innova- tion. So, we took a step back and thought about how to approach R&D and tackle innovation at Barco in a more structured way, both for our existing portfolio and for the brand-new technolo- gies, solutions and services in the works. When it comes to the latter, we want to instill elements of a start-up and VC-like investment mentality. What marks a start-up approach? Start-ups need investors, so they adopt a holistic approach to innovation. First, they gauge the desires of the customer, exploring what the customer really needs, what problem(s) need solving. You’d be surprised at how much customer needs can dier from the features that tech innovators have in mind! A second criterium is early validation points of business value: how can this idea can help us grow our company? Last but not least, new ideas have to be technologically feasible and align with the overall Barco strategy. Fast-paced and focused innovation in product development requires a disciplined, well-governed approach to innovation investments across time horizons. Barco Integrated report 2020 39 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS In 2020, we rolled out an innovation approach that takes into account these steps: innovators come up with an idea and pitch it, we check if it ticks all the boxes (desirability, viability, feasibility and strategy) and only then will we work on a proof of concept in Barco Labs. The next, sometimes challenging step is to maintain this startup pace and mentality all the way through the dierent growth stages until an initiative is suc- cessful enough to stand on its own feet or as part of a product division. How does this approach dier from innovation of existing solutions? When upgrading existing solutions or adding new solutions to an existing stack, you build on a lot of experience, existing cus- tomers and well-known expectations. The most important thing here is not to fall into the trap of investing too heavily in product maintenance and updates but maintain a fast pace in evolving and disrupting our own product portfolios. We have to keep challenging ourselves to prevent competitors from passing us: we encourage our teams to identify disruptive solutions to our own product lines. Does Barco need new technology skills to retain the innovation dynamics? When I joined Barco, I was impressed with the broad technol- ogy expertise present across the company. We can tap into a wide pool of engineers with deep expertise, particularly in dis- play, projection, networking and imaging technology. In other fields there is a lot of healthy curiosity and eagerness to learn. So, we’re harnessing all our in-house talent and scout- ing for new people across all our technology domains, with a focus on new fields like computational optics or video analytics. How do you see Barco developing in the coming five years? Our goal is to remain a global technology leader that delivers innovation with impact. To achieve that, we approach innovation much more systematically, always keep- ing the customer and business value in mind from the moment our innovation ideas surface. The steps we have taken in the past year are a solid starting point. If we continue along this road, we will be able to innovate for true impact and enable ever-brighter outcomes for our employees, our customers and our investors! 13.3% R&D spend (in % of sales) in 2020 430 Number of patents at year-end 28.5% of employees in R&D To remain a technology leader, we have to approach innovation more systematically, always keeping the customer and business value in mind from the moment our innovation ideas surface. Barco Integrated report 2020 40 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Advanced display & projection The display and projection technology that lies at the heart of Barco’s visualization solu- tions include optics, electronics and signal processing, manufacturing and calibration techniques related to projection systems and direct view display technologies, including LCD and LED. This advanced technology powers a wide range of advanced display solutions for use in demanding markets – from cinema projectors and high-resolu- tion medical displays to video walls for large screen visualization. Image processing & insights Professional visualization requires both classical image processing algorithms and data-driven approaches. Barco’s ‘image pro- cessing & insights’ technology domain covers image and video capture, enhancements, processing, understanding and rendering as well as techniques to enhance human-ma- chine interaction. Increasingly important is the implementation of high-performance software solutions on modern hardware such as graphics processing units. Connectivity & data analytics Technology that enables connectivity is at the core of Barco’s visualization solutions, as it allows the real-time monitoring of devices or the local or remote streaming of audio and video data. The connectivity platforms that power Barco solutions are always highly optimized for the professional application at hand, whether that is live entertainment, diagnosis or surgery in healthcare settings or sharing content in the workplace. On top of enabling connectivity, Barco increasingly helps customers understand the data trans- mitted, thus providing trustworthy, actionable insights and boosting productivity, collabora- tion and engagement. Computational optics Computational optical technology exploits the properties of light to enable visual experiences that cannot be delivered using traditional optical systems alone. This tech- nology opens the door to a spectrum of new solutions with functionalities or value that cannot be delivered by other visualiza- tion or imaging techniques. Examples include Demetra, Barco’s multispectral skin imaging platform and the high dynamic range (HDR) light-steering technology that uses real-time programmable lasers and lenses to shape light into high-contrast, high-brightness images on screen. Technology: domains In 2019, Barco reorganized its technology map. Four key domains now form the foundation for Barco’s innovation for impact in the future. Barco Integrated report 2020 41 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Our markets Barco Integrated report 2020 42 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Barco’s business activities focus on three core markets: Enter- prise, Healthcare and Entertainment, which are managed in three dierent divisions. While each division has its own goals, targets and focus areas, they are all committed to Barco’s corporate strategy – in order the enable bright outcomes. Entertainment division Enterprise division Healthcare division Sales per division 38% Entertainment 28% Enterprise 34% Healthcare Our markets 14 18 19 20 21 1 3 5 6 7 8 9 10 13 15 17 16 11 4 2 12 MATERIAL TOPICS Barco Integrated report 2020 43 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Entertainment Creating moments, enriching lives Respective weight in the group 2020 sales Approximate subsegment distribution based on sales Whether in cinemas, concert halls or museums; at theme parks, music festivals or corporate events: Barco’s enter - tainment solutions are designed to turn heads and create compelling moments. By providing our customers with the most advanced projectors, LED displays and image processing solutions, we help them capture fans rather than audiences. Our increasing focus on convenience and services further helps them build that fan base and grow their businesses. 38% Entertainment 50% Cinema 50% Venues & Hospitality Barco Integrated report 2020 44 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS In spite of the current challenges, we keep investing in technology – and ever more services – to retain our market leadership. AN INTERVIEW WITH NICOLAS VANDEN ABEELE, GENERAL MANAGER ENTERTAINMENT People will always want to be entertained. We are in pole position to cater to those needs When the covid-19 pandemic impacted every industry in 2020, it sent – and continues to send – immense earthquakes through the entertainment world. “2020 was a reset,” says Nicolas Vanden Abeele, General Manager of our Entertainment division, but he sees many prospects for the future. You joined Barco at the end of 2017 with a clear ambition to boost topline growth. What were your focal points? Well, 2018 was a milestone year as it marked the launch of Cinionic. All our cinema-related sales and services activities are now delivered through the sub- sidiary, which is totally dedicated to the cinema market. Thanks to Cinionic, we have been able to strengthen our ties with our cinema customer/partners and excel in what we do best: selling and servicing our projectors, and developing our new businesses. For Venues & Hospitality, our other entertainment markets, we sharpened our go-to-market strategy and made clear portfolio choices. All these decisions led to solid growth for cinema, Venues & Hospitality in 2019 – which gave us the resilience to survive the challenging year of 2020. With many movie theaters still closed and events cancelled, what is the way forward? We firmly believe that our markets are resilient and we expect to see the start of the bounce back in 2021, and that Barco has a leading role to play in entertainment. So, in spite of the challenges, we keep investing big in technology to retain our market leadership. Our laser projection portfolio, for exam- ple, is unequaled in the world. In 2020, we further stepped up our laser oering with the Series 4 cinema projectors. In addition, we expanded our popular and versatile UDX and UDM laser phosphor platforms for Venues & Hospitality. That portfolio is also now the broadest on the market. In addi- tion, we keep upgrading our image processing solutions and launching services to make our customers’ lives easier. Insights, the IoT-enabled projec- tor management platform that we introduced in 2020, is a perfect example of that. What about technologies that are relatively new to Barco, like LED and light steering? Here, too: as a technology leader, we must keep innovating – even in challenging times. That’s why we are building further on our partnership with Unilumen to drive our LED eorts forward. I see opportunities for LED in many places, yet our main focus is now on large video walls, while we will also explore LED in cinema. Moreover, we are keeping up our research eorts in HDR light steering technology, as it has huge potential to completely overhaul the cinema experience and set the new standard for cinema. There is a lot more to come on HDR light steering in 2021 and 2022. Barco Integrated report 2020 45 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS China and the entire Asian continent will be a growth driver in the coming years, for cinema as well as for venues and hospitality. With the meteoric rise of streaming, does cinema still have a future? Cinema is here to stay. After all, it is the most aordable out- side-of-home entertainment experience and completely dierent than streaming a film from home. Yet, when people go to the movies, they expect a premium experience – so exhib- itors must ensure outstanding image quality, among other things, to dierentiate themselves from home entertainment. Of course, when cinemas reopen, streaming will coexist. But it’s an and-and story, not an or-or story. Chinese cinemas opened pretty quickly after the lockdown. Is China a focus market for the Entertainment division? The covid-19 pandemic battered China’s movie industry in early 2020, but rebounded strongly in the second half of the year. We expect the same to happen around the world: the movie industry’s revenue will rebound over 2021 and we expect strong growth to previous levels in 2022. That said, in China, the cinema market has been in transition for a while, with growth shifting to multiplexes in smaller cities. The potential for Barco remains big, though, both for replacement and for new projectors. Our ‘in China for China’ strategy, which helps us strengthen our sales, R&D and manufacturing capabilities in this country, helps us to further capitalize on those oppor- tunities. China and the entire Asian continent will be a growth driver for Barco in the coming years, for cinema as well as for events and hospitality. Where do you see the Entertainment business in three years? Our strategy still stands: after this crisis, people will want to be entertained again and our entertainment markets are resilient. In cinema, I expect a delay of one to two years: the replacement wave that had started in 2019 will resume by late 2021., We expect events and hospitality to pick up somewhat sooner, particularly the fixed install market and markets in China and the APAC region. What I do know is that the winners of this crisis will be the companies that are able to leverage their oerings to deliver distinct entertainment experiences at competitive cost. In addition, the number of hybrid events is sure to climb. Barco is in pole position to cater to all these trends. So, we’ll keep investing in state-of-the-art projectors with a focus on laser and the 4K series, in our outstanding imaging solutions, and in ever more services to help Barco and our customers stay ahead of the curve – while strictly managing cost, of course. 2020 has shown us that we must never lose our focus on growth and performance. The winners of this crisis will be the companies that are able to leverage their oerings to deliver distinct entertainment experiences. Barco Integrated report 2020 46 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Our number 1 priority is to stay in close touch with our customers, to act as a trusted partner and prepare together for the moment when the market picks up again. AN INTERVIEW WITH WIM BUYENS, CEO CINIONIC We keep investing in technologies, services and customer intimacy to ensure we’re at the forefront when the market recovers ‘Helping cinema exhibitors deliver a world-class cinema expe- rience’: that is the mission of Cinionic, the cinema joint venture of Barco that was launched in 2018. How does the company progress on that mission in times of crisis, and does the covid- 19 pandemic change the future of cinema? We asked CEO Wim Buyens. 2019, Cinionic’s first full year in business was a milestone year. What were the keys to that kick- start? 2019 was characterized by strong frame agreements globally driven by the renewal wave in cinema. Barco had proactively invested in laser technology, leading to a wide portfolio of high-quality laser projectors. The benefits of laser are multiple, including reduced cost of ownership over the pro- jector lifetime and increased sustainability, as no more lamps are needed. This resulted in a commitment from the cinema exhibitors in 2019 and early 2020 as part of trusted long-term partnerships. A strong course was set – and then the pan - demic hit. How do you respond to a crisis this overwhelming? We stay focused and keep our eyes on the ball, that being our customers and their ecosystems. Our number 1 priority is to stay in close touch with our customers through our compelling thought leadership, to act as a trusted partner and prepare together for the moment when the market picks up again. In fact, our most valuable asset, especially in times like these, is our people. They make a dierence with their deep industry knowledge and their flexibility in thinking outside the box. We launched new prod- ucts and service solutions and introduced cutting-edge business models to cater to evolving mar- ket needs. The cinema market will have to change to conform to new realities, won’t it? The covid-19 crisis has acceler- ated a series of changes that were bound to happen. The shrinking of the theatrical release window is one example. In the past, theaters had an exclusivity window of more than 90 days before a movie could be released in the homes. Dynamic the- atrical windows will be more beneficial for all parties involved and more sustainable. Barco Integrated report 2020 47 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS How big a threat is streaming? Streaming is a new trend in the consumption of entertainment content, but it is not a threat to cinema. People cook dinners at home but still go to restaurants because it is a totally dierent experience. The same comparison can be made for streaming versus cinema. When the lockdowns end, people will be crav- ing out-of-home entertainment and social contact. Cinemas will, however, have to reinvent themselves to motivate people to get o of their couches. Going to the movies must be a really exciting night out, hence the importance of delivering a premium cinema experience. How does Cinionic cater to that trend? We can deliver technology and services for the full premium cinema experience based on bright laser technology and immersive sound for every size of screen. In addition, we oer exhibitors flexible financing, ranging from upfront payment and vendor financing to monthly installments, thus providing peace of mind. This model also works for so-called micro-cinemas to deliver a boutique cinema experience where moviegoers can watch content on demand with their friends or families.” Is the market ready for these business models? The cinema market has traditionally been a conservative market. It took some time for customers to embrace laser-as-a- service, but it is now gaining momentum. The same thing goes for our other cinema- and premium-as-a-service solutions. The changed market reality has resulted in huge benefits for the exhibitor. Cinionic is leading with a major shift in the industry, which I believe is a crucial, valuable investment in our future.” How will that future look for Cinionic and your customers? People want to consume entertainment outside of their homes, so the moviegoing business will recover. Once it bounces back, 100,000 screens will be ready for a technol- ogy renewal. By staying close to the cinema industry and its ecosystem, we will be ready to deliver renewed innovative experiences. The key for all of us right now is to be patient, stay hungry and remain innovative… Going to the movies must be a really exciting night out, hence the importance of delivering a premium cinema experience. A short recap: why Cinionic? Wim Buyens: “Over the past few years, the cinema market has been changing rapidly. It switched from analog to digital, reaching full digital conversion. We understood that the future of cinema would be completely dierent. Innovative cinema technologies at a low cost of own- ership were a must to provide the audience with wow experiences in a post-VPF (Virtual Print Fee) world. While Barco had been delivering state-of-the-art digital cinema projectors for over decades, we knew we had to expand the product oering with a full solutions and services approach. In other words: we needed new busi- ness models too. That’s why Cinionic was born.” Barco Integrated report 2020 48 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Enterprise Engaging you to unleash the power of shared knowledge Every Barco enterprise solution is designed to help people collaborate better by ensuring engaging experiences. From boardrooms and workplaces to control rooms and classrooms: all our solutions help people unleash the power of shared knowledge – for brighter ideas and, ultimately, better results. Approximate subsegment distribution based on sales 28% Enterprise 51% Corporate 49% Control rooms Respective weight in the group 2020 sales Barco Integrated report 2020 49 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS The pandemic has now accelerated the need for remote and hybrid collaboration. That is right up our alley. AN INTERVIEW WITH GEORGE STROMEYER With a focus on ‘collaboration’ and ‘connectivity’, our solutions are more than relevant in the new, hybrid normal Enabling collaboration in order to improve productivity: that is at the core of everything our Enterprise division does. In 2020, the word ‘collaboration’ got a whole new dimension, as meeting rooms and classrooms moved to bedrooms and living rooms. Is our Enterprise team ready to facilitate collabo- ration in the new normal? We asked general manager George Stromeyer. The covid-19 crisis accelerated the need for collaboration – and in new forms. Is that good news for the Enterprise division? In the past few years, we have finetuned our purpose and strategy as well as our product portfolio. And indeed, collab - oration with enhanced visualization is really at the core of our business – in workplaces as well as in classrooms and control rooms. The pandemic has now accelerated the need for remote and hybrid collaboration. That too, is right up our alley, as our solutions include (cloud) connectivity to provide the enterprise market with more engaging and futureproof collaboration experiences. So, in fact, the crisis validated our business: all that we do is really relevant. Nevertheless, 2020 was challenging, wasn’t it? We can’t look away from the impact of the crisis. No mat- ter how relevant our oering is, as oces closed, demand for our ClickShare presentation system plummeted. That is tough, as ClickShare has been the star of our business for years. ClickShare Conference, the brand-new wireless con- ferencing system that that we had announced in early 2020, was, we have to admit, a bit slow o the mark with covid-19 being thrown in the game. It is an ideal solution for unified communications and collaboration and for hybrid meet- ings but it was ready for launch just when the pandemic hit and everyone started to work from home... The ease of accommodating hybrid meetings must hold huge potential for the future of ClickShare Conference? The product is really fantastic and interest clearly rose when people started returning to their oces. The market is pretty crowded: many organizations are jumping on this opportu- nity, including the world’s leading tech companies. There is, however, definitely a place for ClickShare Conference in the market. Its major trump card is that it’s technology agnostic: it works seamlessly with all major collaboration platforms and together with most meeting room peripherals, such as micro- phones, displays, etc., We’re building an ecosystem around it in order to broaden our reach. In addition, just like ClickShare, ClickShare Conference ensures an awesome user experience, which is simply essential for a successful workplace solution. Barco Integrated report 2020 50 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS The main action point is to do more with what we have and shape our own destiny. What about the control room business, how did that fare in 2020? We had returned to profitability in 2019, thanks to a sharp focus on performance and the success of professional-quality products like the UniSee LCD video wall. In this market, our triple-play display strategy is key: by combining our existing rear-projection oering with LCD and LED, we can address all market segments and tech- nology preferences. In 2020, the control room business was more resilient than we had expected. Projects were pushed out in time or reduced in scope but not cancelled. We even managed to gain market share – and are determined to fuel that trend. For example, in China we delivered our largest by far deployment of OpSpace operator work - stations for a large new airport control center. And the new solutions that we launched for control rooms, like WallConnect and Secure Stream, help us extend our oering: they meet demand for remote display management. ‘Remote’ is also the new normal in education now. Did weConnect gain traction? While business picked up more slowly than we had hoped, 2020 was marked by several very prominent wins which are making us a reference in this market. Let me highlight that weConnect doesn’t target high schools and universities but rather business schools and corporate learning and develop- ment centers. There too, it was all hands-on deck to switch to remote learning in record time. We expect demand for weConnect to pick up in the post-pandemic world, when people are looking for a remote learning solution that really replicates the classroom and enables true interaction between teachers and students. In summary: the potential and opportunities look huge. How do you want to capitalize on them? The main action point is to do more with what we have. We have a great, broad and relevant portfolio of top-notch solutions and services, so there’s an oer for every need and preference. Of course, we’ll keep investing in these. Exciting new products for the control rooms market are planned for the first half of 2021, for example. But in addition, we have to advance sales and marketing by shifting our commercial skills to higher levels, widening our markets to include the workplace experience, embracing an omnichannel busi- ness model, tapping into virtual selling to improve our go-to-mar- ket, etc. Between 2018 and 2020, we mapped the customer journey, so we know how we can further elevate customer satisfaction. That will also be a focus moving forward. In addition, we will accelerate our work on outcome-based solutions. We’ve taken steps forward in all these fields in the past but accelerating these initiatives will definitely help us seize the opportunities of the new, hybrid normal. Just like ClickShare, ClickShare Conference ensures an awesome user experience, which is simply essential for a successful workplace solution. Barco Integrated report 2020 51 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Healthcare Enabling better healthcare outcomes for more people We connect healthcare professionals at almost every patient touch point, from the imaging room, to radiology, during specialist consultations and in the surgical suite. By providing medical sta with the complete and most accurate picture, we enable more informed decisions, when and where it mat- ters most. Approximate subsegment distribution based on sales 34% Healthcare 74% Diagnostic imaging 26% Surgical Respective weight in the group 2020 sales Barco Integrated report 2020 52 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS For a couple of years, we’d seen a growing trend for radiologists in the US to read medical images from home. When covid-19 hit, European radiologists quickly embraced our solution. FILIP PINTELON, GENERAL MANAGER OF BARCO HEALTHCARE SHARES HIS VISION AND FUTURE OUTLOOK We have all the right solutions and services to prosper in a post-pandemic world Much more than being a display manufacturer, our Health- care division is committed to helping solve healthcare issues. Never before has this mission sounded more relevant than it was in 2020. When the covid-19 crisis hit, part of the business increased sharply, yet another part suered. General manager Filip Pintelon is confident about the future, though: “This cri- sis created new opportunities to innovate and new ways to create value in this evolving healthcare world.” How did the pandemic impact Barco’s healthcare business? Well, initially demand for our diagnostic display systems sky - rocketed as hospitals converted floors or even operating rooms into dedicated units for covid-19 patients. The upsurge took us by surprise and components were hard to get, yet we successfully met the needs of our customers thanks to the resilience and flexibility of everyone involved in our supply chain. In the meantime, demand for our mammography displays and modality solutions declined. That trend persisted through - out the third quarter due to strained hospital finances and a sharp drop in volumes of surgery procedures and diagnostic screenings. On the other hand, as many radiologists started working from home, there was an upswing in demand for the remote radiology reading solution we had launched in 2019. 2019, a year before the teleworking trend? In the US, a growing number of radiologists were already read- ing medical images from home in 2019. To respond to their needs, we built a solution based on an innovative graphics box that ensures the same quality, security and performance radiologists get inside the hospital reading room – but at home. It soon found its way to European radiologists too during the covid- 19 crisis. Today, no one doubts that this trend is here to stay. Remote working requires good connectivity, more than good hardware? We’ve made giant leaps forward in the field of software and services in the past few years. In 2020, we launched three new connected services: Barco DisplayCare and Barco ManagedCare help hospi- tals manage their display fleets via virtual onboarding, online training sessions, remote support and checks, etc. NexxisCare supports OR integrators in mon- itoring and managing operating rooms remotely. Talking surgical: in 2018 and 2019 you had high expectations for the surgical business. Did the covid-19 crisis stand in the way? Our Nexxis digital operating room solution gained global access, but mainly in the fourth quarter. This trend towards Barco Integrated report 2020 53 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Opening a healthcare hub in China was a smart decision. We’ll keep increasing our investments and strengthening our footprint there to support further growth. digital ORs was also accelerated by the pandemic. In the midst of the crisis, operating rooms had to be converted into emergency Covid-19 centers. Hospitals understood that digital ORs are more flexible. Moreover, thanks to our years of solid investments in Nexxis, the healthcare industry sees Barco as the reference when it comes to solutions for the digital OR. Is China ready for digital ORs as well? The Chinese healthcare market is booming enormously and looking to upgrade its infrastructure. Our diagnostic business grew, and indeed, our surgical solutions started gaining traction there in 2020 as hospitals are leaning towards digital solutions.. Opening a healthcare hub in Suzhou was really a smart deci- sion. We’ll keep increasing our investments and strengthening our footprint there to support further growth. Did the division keep its R&D spend up in spite of the crisis? Absolutely. One result of these eorts is the Nio 12MP that we launched in January 2021. The new display system is a bit less high-end than Coronis Uniti™ but enables 12MP and multimodality imaging: just what radiologists need to optimize their workflows and ensure con- fident diagnosis. I am sure it will appeal to many radiologists, who are reading more and more images from home. Apart from that, we kept investing in both Synergi™, our cloud-based collaboration technology, and our Demetra skin scanner. 2020 was not the ideal year to commercialize these solutions, but their potential is big in a post-pandemic world. While Synergi™ supports remote collaboration between specialists, the images scanned by Demetra can easily be read by a dermatologist working remotely. In 2021, we absolutely want to sharpen the go-to-market strategy for Demetra and raise awareness around the globe. It sounds like the health crisis created a heap of opportunities for the Healthcare division? I’d say that it has turbocharged many trends, like the trend towards ‘remote everything’. Yet, it also raised a series of con- cerns and awareness around the importance of healthcare. Will authorities prioritize spend in healthcare infrastructure? Will hospitals adapt to this ‘new normal’ or try to go back to the ‘old ways’? Will they remember the importance of flexibility and the need to raise productivity? Barco has the right solutions and services to increase flexibility and productivity, enabling hospitals to respond to the shortage of healthcare workers. What sets Barco apart from its competitors? We understand the market really well, which is reflected in every Barco medical solution. Apart from that, hospitals choose Barco because they love our services. Moreover, we work hard to put our customers at the heart of everything we do. The eorts that we made to meet peak demand at the start of the crisis, for exam- ple, have helped us build trust and loyalty. You do need solid resources, both the financials and the people, to be able to go that extra mile, as well as a great deal of resilience. We are fortunate to have all that. I am sure we’ll emerge from this crisis much stronger, leaving quite a few competitors behind us. We understand the market really well, which is reflected in every Barco medical solution. Barco Integrated report 2020 54 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Our results CORE Report Barco Integrated report 2020 55 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Group results Sales (in millions of euro) 1,028.5 2018 1.082.6 2019 770.1 2020 100 200 300 400 500 600 700 800 900 1, 000 1, 100 Ebitda (in millions of euro) 12.1% 14.1% 7.0% 124.5 2018 153.0 2019 53.6 2020 20 40 60 80 100 120 140 160 % of sales Percentage of new product releases with a Barco ECO label Barco’s standard customer experience metric, measured quarterly (upper quartile industry performance) NPS (Net Promoter Score) Eco score 48% 47 Gross profit (in millions of euro) 41340.1% 39.7% 36.9% 2018 429.3 2019 283.8 2020 % of sales 100 50 200 300 400 500 600 550 450 350 250 150 Distribution based on sales 38% Entertainment 28% Enterprise 34% Healthcare Barco Integrated report 2020 56 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Comments on the group results Group topline Sales for the year were € 770 million, down 29%, reflecting the covid-19 pandemic impacts on our end-markets across all regions. Profitability & free cash flow Gross profit margin for the year declined 3 percentage points to 37% mainly due to unfavorable product mix. As operat- ing expenses for 2020 were managed down to 20% below 2019, while sustaining investments in priority projects, EBITDA amounted to 54 million euro for a 7% EBITDA margin. Over the second half the company continued to execute on its plan to reset indirect costs for 2021 to levels below 2019, resulting in a full year restructuring and impairment charge of 15 million euro. Free cash flow for 2020 was -36 million euro, reflecting lower EBITDA, cash-outlays associated with the restructuring actions and higher working capital compared to 2019. Working capital improved in second half versus first half, with a second half free cash flow of +15 million euro. (1) All definitions for alternative performance measures (APM’s) are available in the glossary Sales for the year of € 770 million, EBITDA margin of 7% Encouraging improvements in Q4 across all divisions Financial highlights fiscal year 2020 and 4Q20 (1) • Orders FY20 of € 746.0 million, -32.3% versus FY19 • Sales FY20 at € 770.1 million, -28.9% versus FY19 • Year-end orderbook at € 281.5 million down 13% versus FY19 • FY20 EBITDA of € 53.6 million versus € 153 million in 2019 • FY20 EBITDA margin at 7.0% of sales versus 14.1% in 2019 • FY20 Adjusted EBIT of € 10.2 million, resulting in full year net loss of € -4.4 million, after € 14.5 million restructuring and impairment charges • Orders 4Q20 versus 3Q20, increased by +20.3% • Sales 4Q20 versus 3Q20 increased by +16.7% Barco Integrated report 2020 57 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Staying the strategic course Despite the covid-19 impact, Barco continued to invest in stra- tegic and commercial initiatives, including next generation technologies, channel expansion and building out its China presence. This positions the company to strengthen its lead- ership when markets recover. Additionally, for 2020, Barco delivered on its sustainability tar- gets: the operations carbon footprint as well as the product energy footprint were reduced by more than the stated goals of -20% and -25% versus the 2015 baseline, and multiple new products with the Barco ECO label rating were launched in each division. Outlook 1H21 The following statements are forward looking, and actual results may dier materially. Management expects business conditions to be defined by the pandemic for at least the first half of the year and therefore does not have visibility to oer quantitative guidance for 2021 at this time. If we assume a recovery for Entertainment only to start in the second half, a steady dynamic in Healthcare and a stron- ger back-to-oce activity leading to improved demand for ClickShare as of the second quarter, then topline for the first semester will move toward the first half of last year. Under this assumption, and given the reset of Barco’s cost structure, management expects a mid-plus single digit EBITDA margin for the first half of 2021. Dividend Barco’s Board of Directors will propose to the General Assem- bly to distribute a gross dividend of 0.378 euro per share. Barco’s shareholders will be oered the choice between payment in cash or dividend in shares, enabling Barco’s share- holders to reinvest in the company. Chairman of the board, Mr. Charles Beauduin and director, Mr. Frank Donck, have confirmed the intent of respectively Titan Baratto NV and 3D NV, to opt for the stock dividend. Barco Integrated report 2020 58 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Order intake IN MILLIONS OF EURO FY20 FY19 CHANGE Order intake 746.0 ,. -32.3% Order intake at constant currencies -31.8% Order book IN MILLIONS OF EURO 31 DEC 2020 31 DEC 2019 CHANGE Order book 281.5 . -12.7% Order intake by division IN MILLIONS OF EURO FY20 FY19 CHANGE Entertainment 268.7 . -45% Enterprise 215.2 . -% Healthcare 262.1 . +% Group 746.0 ,. -% Order intake breakdown by region IN MILLIONS OF EURO FY20 FY19 CHANGE The Americas 39% % -37% EMEA 35% % -% APAC 26% % -% Global 100% % -% Consolidated results for the fiscal year 2020 Order intake Order intake was 746.0 million euro, a decrease of 32% compared to last year reflecting material impact of the pandemic in Entertainment as well as in Enterprise, mainly in the Americas and EMEA region. Order intake for Healthcare was flat year-over-year. Order book Order book at year end was 281.5 million euro, compared to 322.2 at FY19 year-end, a decrease of 12.7% mainly driven by order book decreases in the Entertainment division. * Change in nominal value Barco Integrated report 2020 59 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Sales IN MILLIONS OF EURO FY20 FY19 CHANGE Order intake 770.1 ,. -28.9% Order intake at constant currencies -28.4% Sales by division IN MILLIONS OF EURO FY20 FY19 CHANGE Entertainment 291.4 . -36% Enterprise 216.8 . -% Healthcare 261.9 . -% Group 770.1 ,. -% Sales by region IN MILLIONS OF EURO FY20 FY19 CHANGE The Americas 39% % -30% EMEA 36% % -% APAC 25% % -% Global 100% % -% Sales Full year sales decreased 29% driven by the Entertainment and Enterprise divisions. Healthcare was slightly down mainly as a result of a soft 3rd quarter. After decreasing 18% in the first semester, sales fell 38% in comparison with a strong 2H19, as a result of the global spreading and deepening of the pandemic. Sales declined in all regions. * Change in nominal value Barco Integrated report 2020 60 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Profitability Gross profit After 5 years of continued profit improvement, gross profit dropped with 34% to 283.8 million on a sales decline of 29% reflecting adverse impacts of the pandemic. Gross profit margin declined 2.8 percentage points to 36.9% from 39.7% last year reflecting mainly unfavorable product mix, a spike in logistics cost and indirect overhead weighing on lower volumes. Indirect expenses & other operating results Total indirect expenses decreased 17% to 265.3 million euro compared to 319.5 million euro a year earlier. The Entertainment and the Enterprise divisions accounted for most of the variance. As a percentage of sales, indirect expenses were 34.5% of sales compared to 29.5% for 2019. • Research & development expenses decreased to 102.6 million euro compared to 119.4 million euro last year, reflecting a more selective approach. As percentage of sales, R&D expenses were 13.3% compared to 11.0% a year earlier. • Sales & marketing expenses decreased to 112.3 million euro compared to 142.5 million euro for 2019, in part reflecting the impact of the covid-19 pandemic on the company’s sales and part reflecting actions taken to align spending to revenue generation. As a percent of sales, sales & marketing expenses were 14.6% of sales compared to 13.2% in 2019. • General & administration expenses amounted to 50.4 million euro compared to 57.6 million euro last year and were 6.5% as a percentage of sales compared to 5.3% in 2019. Other operating results were a negative of 8.3 million euro versus a positive of 0.3 million euro in 2019 mainly driven by lower results in the joint venture BarcoCFG and by increased bad debt and other provisions. EBITDA & adjusted EBIT The reduction in operating expenses partially oset the decrease in gross profit and as a result EBITDA was 53.6 million euro compared to 153.0 million euro for the prior year, and EBITDA margin was 7.0% versus 14.1% for 2019. EBITDA margin declined by approximately 10 percentage points in both Entertainment and Enterprise driven by negative operational leverage. Healthcare maintained profitability in line with 2019. EBITDA by division 2020 versus 2019 is as follows: Adjusted EBIT was 10.2 million euro or 1.3% of sales compared to 110.0 million euro, or 10.2% of sales for 2019. As a result of cost adjustment actions in both the first half (outsourcing the UniSee LCM-com- ponent and closing the Taiwan factory) and the second half (mainly related to reorganizations in Entertainment and Enterprise), Barco booked 14.5 million euro restructuring and impairments. As a result, EBIT was -4.3 million euro. FY20 IN MILLIONS OF EURO SALES EBITDA EBITDA % Entertainment 291.4 . 0.1% Enterprise 216.8 . .% Healthcare 261.9 . .% Group 770.1 . . % IN MILLIONS OF EURO FY20 FY19 CHANGE Entertainment 0.3 ; -99.3% Enterprise 18.2 . -.% Healthcare 35.0 . -.% Group 53.6 . -.% Barco Integrated report 2020 61 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Income taxes Taxes in 2020 are zero on a pre-tax negative result, compared to an eective tax rate of 18% in 2019. Net income Full year net income attributable to the equity holders was -4.4 million euro. Net income per ordinary share (EPS) was -0.05 euro versus a 1.09 euro in 2019. Fully diluted earnings per share were also -0.05 euro compared to 1.07 in 2019. * Earnings per share, restated for the stock split as implemented on 1/07/2020. Cash flow & balance sheet Free cash flow and working capital Free cash flow for 2020 was -36 million euro reflecting lower EBITDA, cash-outlays associated with the restructuring and working capital, while reduced compared to 1H20, still higher than end of year 2019 at approximately 10% of sales. IN MILLIONS OF EURO FY20 FY19 FY18 Gross operating free cash flow 43.9 139.8 120.9 Changes in trade receivables 41.4 -32.2 -11.2 Changes in inventory -12.3 -33.0 0.3 Changes in trade payables -59.9 23.4 -1.3 Other changes in net working capital -24 15.6 -12.7 Change in net working capital -54.8 -26.1 -24.9 Net operating free cash flow -10.8 113.7 96.0 Interest income/expense -0.1 5.8 4.3 Income taxes -10.4 -13.1 -12.5 Free cash flow from operating activities -21.4 106.4 87.9 Purchase of tangible and intangible FA -15 -20.2 -25.6 Proceeds on disposal of tangible and intangible FA 0.5 2.4 0.9 Free cash flow from investing -14.5 -17.8 -24.7 FREE CASH FLOW -35.9 88.7 63.2 Barco Integrated report 2020 62 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Working capital Inventory + Accounts Receivables – Accounts Payables over sales was 32.6% compared to 21.7% in 2019. Net working capital was 10% of sales compared to 3% in 2019. While year-end working capital was higher than 2019, it improved relative to 108 million euro at mid-year reflecting reduced inventory levels and reduced DSO from 82 days sales outstanding to 67 at the end of the year. Capital expenditure Capital expenditure was 15 million euro compared to 20.2 million euro in 2019 as the company saw the timeline of a number of investment projects or phases pushed out as a result of pan- demic lock-downs and shifted priority on selected projects. ROCE ROCE for the year was 3% versus 25% for 2019. IN MILLIONS OF EURO FY20 FY19 FY18 Trade Receivables 146.1 195.4 161.8 DSO 67 55 52 Inventory 175.4 169.0 135.1 Inventory turns 2.3 3.2 3.8 Trade Payables -70.3 -128.9 -105.1 DPO 53 71 59 Other Working Capital -170.6 -205.2 -189.3 TOTAL WORKING CAPITAL 80.6 30.2 2.5 Goodwill Goodwill on group level remained at 105.6 million euro, equal to the end of 2019. Cash position Net financial cash position, including net cash held in Cinionic, was 193.5 million euro compared to 329.4 million euro end of 2019. The direct available net cash position amounted to 127.7 million euro compared to 253.4 million euro last year, reflecting negative free cash flow (35.9 million euro), distributed dividends (33.4 million euro), investments (55.5 million euro) and currency impact. These investments are related to acquired minority stakes and are measured at market price. The remeasurement at fair value at the end of 2020 amounted to 18.3 million euro in 2020 and is reflected in other comprehensive income. Barco Integrated report 2020 63 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Divisional results for the fiscal year 2020 Barco’s organizational structure Barco is a global technology company developing solutions for three main markets, which is also reflected in its divisional structure: Entertainment, Enterprise and Healthcare. • Entertainment: The Entertainment division is the combination of the Cinema and Venues & Hospitality activities, which includes Professional AV, Events and Simulation activities. • Enterprise: The Enterprise division is the combination of the Control Rooms activities and the Corporate activities. ClickShare is the main contributor to the Corporate activity. • Healthcare: The Healthcare division includes the activities in Diagnostic Imaging (Diagnostic and Modality Imaging) and in Surgical. Entertainment division Enterprise division Healthcare division Barco Integrated report 2020 64 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS * Entertainment sales are restated for BarcoCFG Results of the Entertainment division Percentage of new product releases with a Barco ECO label Customer net promoter score Approximate subsegment distribution based on sales Eco score 67% 30 50% Cinema 50% Venues & Hospitality Sales (in millions of euro) 408.1 2018 455.1 2019 291.4 2020 50 100 150 200 250 300 350 400 450 500 Ebitda (in millions of euro) 7.3% 9.5% 0.1% 32.9 2018 43.3 2019 % of sales 10 20 30 40 50 60 70 80 2020 0.3 Gross profit (in millions of euro) 143.332% 31.5% 28.4% 2018 143.2 2019 82.8 2020 % of sales 50 25 100 75 150 125 175 200 Barco’s standard customer experience metric, measured quarterly (upper quartile industry performance) Barco Integrated report 2020 65 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS IN MILLIONS OF EURO FY20 FY19 CHANGE VS FY19 Orders 268.7 . -45.3% Sales 291.4 . -36.0% EBITDA 0.3 . -99.3% EBITDA margin 0.1% .% As a result of contractions in business activity in all regions related to the pandemic beginning in Q2, sales declined 36% for the year. The fourth quarter topline reflects marked recovery mainly driven by projects in the ProAV and Cinema-market led by China. The Cinema activity accounted for approximately 50% of the divisional sales in 2020 down from 58% in 2019. Within Cinema, the primary causes of weakness were material push-outs of replacement proj - ects as a result of cinema lock-downs and movie slate push outs. This subsegment activity is expected to remain soft for the next few quarters. While many replacement contracts have been pushed out, no contract has been cancelled. New build projects in EMEA and China resumed gradually in the second half of the year. During the first half of the year, the division expanded its market share and technology leadership position, with one of its competitors exiting the cinema market, and gaining solid traction with its laser-based projection solutions. Quarter-over-quarter sales The topline of the Venues and Hospitality subsegments was particularly impacted by weakened demand in the events market resulting from event cancellations related to covid lockdown measures. Barco expanded its product portfolio in the ProAV (fixed install) subsegment with selected product releases, including a new compact laser-based UDM and G-100 series-projector and new LED-solutions. The combination of an expanded product portfolio and an intensified commercial focus, resulted in a recovery beginning in the third quarter. While sales for the Simulation segment were slightly down, order intake was flat year-over-year and sizeable long- term frame-agreements with reference customers indicate a strengthening market position. In line with the corporate strategy to expand share of wallet with our installed base through services oerings, the division launched and started selling “Insights-connectivity services”, a cloud-based solution for enhanced and remote projector management. EBITDA was break-even on the decline in gross profit and a negative operating leverage eect on fixed costs due to weaker divisional sales. Entertainment division IN MILLIONS OF EURO 4Q20 3Q20 2Q20 1Q20 CHANGE 3Q VS 4Q Sales 77.3 58.0 56.5 99.7 +33.3% 2020 was a reset but we firmly believe that our markets are resilient and we expect to see the start of the bounce back in 2021. Nicolas Vanden Abeele GM Barco Entertainment Barco Integrated report 2020 66 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Results of the Enterprise division Customer net promoter score Eco score Sales (in millions of euro) 335.9 2018 358.7 2019 216.8 2020 50 100 150 200 250 300 350 400 450 500 43% 48 Ebitda (in millions of euro) 18.1% 20.6% 8.4% 60.9 2018 74.0 2019 % of sales 2020 18.2 Gross profit (in millions of euro) 171.751.1% 51.1% 48.5% 2018 183.3 2019 105.2 2020 % of sales 100 75 50 125 175 150 25 200 51% Corporate 49% Control rooms 10 20 30 40 50 60 70 80 Percentage of new product releases with a Barco ECO label Approximate subsegment distribution based on sales Barco’s standard customer experience metric, measured quarterly (upper quartile industry performance) Barco Integrated report 2020 67 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS IN MILLIONS OF EURO FY20 FY19 FY18 CHANGE VS FY19 Orders 215.2 . . -38.7% Sales 216.8 . . -39.6% EBITDA 18.2 . . -75.4% EBITDA margin 8.4% .% .% The Enterprise division posted a 40% decline in sales and orders for the year and an 8% EBITDA margin down from 22%. Enterprise sales began to recover in the third and fourth quarter with gradual pick-up in both the Control Rooms and the Corporate subsegments. In terms of the sales mix, the Corporate activity accounted for about 51% of Enterprise sales for 2020 versus 58% of Enterprise sales for 2019. Demand for the ClickShare portfolio fell steeply in the second quarter as a result of pandemic related lockdowns and oces being closed. Activity began to resume in the summer in certain geographies as some oces and organizations re-opened and installed hybrid workplace prac- tices after the first lock-down wave. While sta at many companies worked remotely intermittently during the 2 nd half of the year, the division’s eorts to build awareness for the value proposition of ClickShare Conference which was launched in January began to bear fruit, especially in EMEA. The new ClickShare Conference has created a new industry category, perfectly positioned for the hybrid way of working, as testified by industry awards, contract wins with reference cus- tomers and good initial demand with almost 20.000 units shipped and installed during the year. ClickShare Conference accounted for 25% of the ClickShare sales in the second half of 2020. Barco strengthened and broadened its channels, trained more resellers and expanded coverage in selected regions and purchasing routes. The division also established an industry-wide alliance program with 20+ leading meeting room equipment vendors including Logitech, Vaddio, Jabra to create interoperable bundles of oers for the equipping of meeting rooms. Quarter-over-quarter sales The company continued to invest strongly in market awareness around ClickShare Conference, to ensure the solution further penetrates the market as corporates start to bring people back to oce. Control rooms started the year with a weak first quarter and full year sales fell below last year, due to project push-outs and installation delays resulting from the pandemic mainly in the Oil & Gas and Corporate markets. After the first quarter, however, the topline improved quar- ter-over-quarter as customers responded favorably to the strengthening value proposition of the expanded product portfolio. The subsegment enforced its position with its dierentiating triple-play video-wall hardware strategy (rear-projection, LCD and LED) and is gaining traction with LED evidenced by first sizeable project wins. The segment also made progress in maturing and commercializing its software workflow and networking portfolio with remote management solutions such as Secure Stream and WallConnect Cloud services. With a growing need for high quality hybrid and remote learning solutions for education and corporate learning, the Enterprise virtual classroom growth initiative increased its install base with the addition of distinguished references across regions. Enterprise division IN MILLIONS OF EURO 4Q20 3Q20 2Q20 1Q20 CHANGE 3Q VS 4Q Sales 53.9 50.0 45.6 67.2 +7.8% We can’t look away from the impact of the covid-19 crisis. Yet, accelerating all the initiatives that we initiated will definitely help us seize the opportunities of the new, hybrid normal. George Stromeyer GM Barco Enterprise Barco Integrated report 2020 68 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS Results of the Healthcare division Customer net promoter score Eco score Sales (in millions of euro) Gross profit (in millions of euro) Ebitda (in millions of euro) 245.0 2018 268.8 2019 261.9 2020 50 100 150 200 250 300 350 400 450 500 97.940% 12.5% 38.3% 13.3% 36.6% 13.4% 2018 102.9 2019 95.7 2020 30.6 2018 35.7 2019 % of sales % of sales 38% 52 2020 35.0 26% Surgical 74% Diagnostic imaging 100 75 50 125 175 150 25 200 10 20 30 40 50 60 70 80 Percentage of new product releases with a Barco ECO label Approximate subsegment distribution based on sales Barco’s standard customer experience metric, measured quarterly (upper quartile industry performance) Barco Integrated report 2020 69 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS IN MILLIONS OF EURO FY20 FY19 FY18 CHANGE VS FY19 Orders 262.1 . . 0.7% Sales 261.9 . . -2.6% EBITDA 35.0 . . -1.9% EBITDA margin 13.4% .% .% Healthcare posted stable year-over-year results with orders slightly up, sales slightly down and EBITDA margin essentially flat. After a strong first half with high single digit growth in sales, the third quarter slowed down as customers reset delivery schedules based on shifts in hospital spending priorities. The fourth quarter reflected a rebound driven partially by deployments of projects pushed out from the third quarter and partially by stabilizing of the Healthcare supply chain. The diagnostics activity saw mixed results during the year with intensified demand for radiology and home reading stations oset by softer demand for mammography and modality solutions. Surgical saw demand picking up in the fourth quarter after a softer Q3. The Nexxis-solution gained additional global access, expanding the partner-base globally as the operating room infrastructure market increasingly opens up for digital solutions. Barco also expanded its sur- gical oering with the addition of Nexxis care, a cloud-based remote management platform. Quarter-over-quarter sales Under the “In China for China”-program, the division is expanding its local Healthcare hub in Suzhou. The hub was initially opened in March 2019, and draws together business development, product management, research and development and Healthcare display production. As the healthcare market in China further expands in both the diagnostic and surgical subsegments, Barco is further increasing investment levels and strengthening its footprint, to support further market share gains. At the same time the division also invested in a number of new solutions including the Deme- tra skin cancer screening solution, which was commercially launched in the US in the fourth quarter 2020 Healthcare division IN MILLIONS OF EURO 4Q20 3Q20 2Q20 1Q20 CHANGE 3Q VS 4Q Sales 64.3 59.3 69.4 68.8 +8.4% The covid-19 crisis created new opportunities to innovate and new ways to create value in this evolving healthcare world. I am sure we’ll emerge from this crisis stronger. Filip Pintelon GM Barco Healthcare Barco Integrated report 2020 70 CORE Report 01 BARCO AT A GLANCE 02 OUR COMPANY 04 SHAPING OUR STRATEGY 03 HOW WE CREATE VALUE 05 OUR TECHNOLOGY 06 OUR MARKETS 07 OUR RESULTS 2020 Integrated annual report Governance & Risk Report ENABLING BRIGHT OUTCOMESbarco.com 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Table of contents 01 Corporate governance..............................3 Corporate governance statement ......................5 Board of Directors & Core Leadership Team .............6 Annual General Meeting .............................16 Activity report & Evaluation of the Board and its Committees ............................ 17 Remuneration report ................................23 Policies of conduct ..................................37 01 Risk management and control processes .......... 38 Risk management process. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Control environment & Risk management process. . . . . . . 40 Extra risk section regarding the consequences and impact of the covid-19 pandemic . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Top risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Risks to be disclosed pursuant to the rules regarding non-financial information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Financial risk management and internal control . . . . . . . . . 56 This is the Governance & Risk Report section of Barco’s 2020 Integrated annual report. Other sections are available via the download center at ir.barco.com/2020. CORE MORE • Governance & risk report • Report on planet - people - communities • Financial report ANNEX • Assurance report • GRI Content index • Glossary Barco Integrated report 2020 2 CGR Governance & Risk Report Barco Integrated report 2020 2 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Corporate governance Governance & Risk Report Barco Integrated report 2020 3 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Declaration regarding the information given in the Annual Report 2020 The undersigned declare that: • The annual accounts, which are in line with the standards applicable for annual accounts, give a true and fair view of the capital, the financial situation and the results of the issuer and the consolidated companies; • The annual report gives a true and fair view of the development and the results of the company and of the position of the issuer and the consolidated companies, as well as a description of the main risks and uncertainties they are faced with. Jan De Witte, CEO Ann Desender, CFO Barco Integrated report 2020 4 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT In Spring 2019, the Belgian legislator adopted a new Code of Companies and Associations. Further, in the same timeframe, the Corporate Governance Commission adopted the 2020 Belgian Code on Corporate Governance which the Belgian legislator subsequently designated as the reference code for listed companies www.corporategovernancecommittee.be. Both entered into force on 1 January 2020. Following this entry into force, Barco has updated its articles of association as well as its corporate governance charter. The Board of Directors decided not to submit to the shareholders’ approval some of the novelties introduced by the new code, such as a two-tier governance structure or dual voting rights for certain shareholders. At their meetings of 30 April 2020, the shareholders have approved the revised drafts of the articles of association and corporate governance charter. Both are available for download at www.barco.com/corporategovernance. In accordance with article 3:6, §2 of the Code of Companies and Associations, Barco applies the 2020 Belgian Code on Corporate Governance. Barco deviates from the 2020 Belgian Corporate Governance Code as follows: Corporate governance statement Art. 7.9: The Board of Directors has not set a minimum thres- hold of shares to be held by the executives as their remu- neration package is sufficiently balanced with various components to incentivize the executives to pursue a strategy of sustainable profitable growth. Art. 7.12: The Board of Directors endeavors to insert a ‘claw- back provision’ in contract of employment with executives to the extent permissible by the law governing such contract. Art . 7.6: The Board of Directors decided not to grant shares to non-executive board members as part of their remune- ration. Such grant requires further analysis of the practical ramifications thereof, both for the company and its board members. 14 18 19 20 21 1 2 3 6 7 8 9 10 12 13 15 17 16 11 4 5 MATERIAL TOPICS Barco Integrated report 2020 5 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Board of Directors Charles Beauduin Frank Donck Hilde LagaJan De Witte Ashok K. Jain An Steegen 4 Directors with 5 years of seniority Female members of the Board 2 Independent directors 3 Barco Integrated report 2020 6 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Charles Beauduin (°1959) has been CEO and owner of Michel Van de Wiele NV since 1993. Van de Wiele is an international technology player and leader in solutions for the textile industry. Mr. Beauduin holds several positions in trade associations and employer orga- nizations. He holds a Master of Law from KU Leuven and an MBA from Harvard Business School. Mr. Beauduin has broad professional management experi- ence, including international assignments in Asia and the United States. He is member of the Board of Directors of Barco NV since January 2015. Jan De Witte (°1964) is CEO of Barco and member of the Board as of September 2016. He is a global leader who has served in a variety of global operational and business leadership roles over the past 30 years, delivering operational excellence, product development and growth in services, solutions and software businesses for technology companies. Prior to joining Barco, Mr. De Witte was an ocer of General Electric Cy (GE), and CEO of the Software and Solutions busi- ness in its Healthcare Division. During his 17-year tenure with GE, he worked in global management roles in manufacturing supply chain, Quality/Lean Six Sigma, services and software solutions and lived in Chicago, Milwaukee and Paris. Prior to GE, Mr. De Witte held operational management positions in supply chain and manufacturing at Procter & Gamble in Europe. He also served as Senior Consultant with McKinsey & Company, serving clients in airline, process and high-tech industries across Europe. He holds several positions in educational and business incubation organizations and is a member of the Board of Directors of ResMed Inc. Mr. De Witte holds a Master’s degree in Electromechanical Engineering from KU Leuven (Belgium), and an MBA from Harvard Business School (USA). Ashok K. Jain (°1955) is member of the Board of Directors of Barco NV since October 2012. He holds a Master of Technology degree from the Indian Institute of Technology in Delhi, India. During his career, Mr. Jain has founded several technology start-ups and has converted them into successful businesses through strong leadership coupled with insights into emerging opportunities and trends in the global economy. Mr. Jain was founder and Chairman of the Board of IP Video Systems, which was acquired by Barco in February 2012. He is currently a General Partner at Co=Creation=Capital LLC. Mr. Jain is of Indian origin and has US citizenship. Hilde Laga (°1956) holds a PhD in law. She is one of the founding partners of the law firm Laga, which she led as managing partner and head of the corporate M&A practice until 2013. Hilde Laga joined the Board of Directors of Barco NV and NV Greenyard Foods in 2014. In 2015, she joined the Board of Directors of Agfa-Gevaert NV and of Gimv NV. In 2016, she became president of Gimv NV. She is a member of the Belgian Corporate Governance Committee and served as a member of the supervisory board of the FSMA (formerly CBFA) until 2014. Barco Integrated report 2020 7 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Frank Donck (°1965) has been the managing director of investment holding company 3D NV since 1998, investing in a mix of long- term public equity, private equity and real estate. He also serves as Chairman of Atenor Group NV, as non-executive director of KBC Group NV and as independent director of Elia System Operator NV and Luxempart SA. Frank Donck holds a Master of Law from the University of Ghent and he obtained a Master of Finance from Vlerick Business School. He started his career as investment manager for Investco NV and was a chairman and board member for several listed and privately owned companies. He is also vice-chairman of Vlerick Business School and is a member of Belgium’s Corporate Governance Commission. Mr. Donck is member of the Board of Directors of Barco NV since April 2015. An Steegen (°1971) is member of the Board of Directors of Barco NV since April 2017. Dr. Steegen holds a Ph.D. in Material Science and Electrical Engineering from the Catholic University of Leuven, KUL, in collaboration with the Interuniversity Microelectronics Center, imec, in Belgium . She joined IBM Semiconductor R&D in Fishkill, New York, in 2000. As R&D director and executive of IBM’s Interna- tional Semiconductor Alliance, she was responsible for IBM’s advanced logic semiconductor technology development for the mobile and wireless application market. In 2010, she rejoined imec in Belgium. As Executive Vice President, she was in charge of imec’s Semiconductor Technology & Systems division. Dr. Steegen is a recognized leader in semiconductor R&D and an acclaimed and inspiring thought leader in innovation in the IoT and digitalization era. In 2018, Dr. An Steegen joined Umicore as Chief Technology Ocer, responsible for the company’s overall innovation strategy. She is in charge of Umicore’s R&D in the areas of clean mobility materials, recycling and sustainability and she is responsible for Umicore’s new business incubation in adjacent and new opportunity markets. She is also Executive Vice President of the Electro-Optical Materials and Metal Deposition Solutions business units. Barco Integrated report 2020 8 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT The composition of the Board of Directors meets the gender diversity requirement laid down in article 7:86 of the Code of Companies and Associations. All directors hold or have held senior positions in leading international companies or organizations. Their biographies can be found here. Board of Directors Situation on February Chairman Charles Beauduin Directors Jan De Witte An Steegen () Adisys Corporation (represented by Ashok K. Jain) Hilde Laga () Frank Donck () Secretary Kurt Verheggen General Counsel (1) independent directors // * date on which the term of oce expires: end of the annual meeting Changes to the Board of Directors Mr Luc Missorten decided to resign from the Board of Direc- tors of Barco in April 2020, while continuing to provide his support as senior advisor to the company. As a result, the number of Board members reduced from 7 to 6. The General Meeting of 30 april 2020 has re-appointed Mr. Charles Beauduin, Mr. Jan De Witte, Mr. Frank Donck, Mrs. An Steegen and Adisys Corporation, represented by Mr. Ashok Jain, as directors for a period of three (3) years until the closing of the ordinary General Meeting of 2023. Mr. Frank Donck and Mrs. An Steegen are re-appointed as independent directors. Barco Integrated report 2020 9 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Core Leadership Team Jan De Witte Stijn Henderickx Wim Buyens Olivier Croly Gerwin Damberg Ann Desender Anthony Huyghebaert Rob Jonckheere 6 CLT members with 5 years of Barco seniority Female CLT member 1 Non-Belgian CLT members 7 Barco Integrated report 2020 10 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Marc Spenlé Kenneth Wang Filip Pintelon Iain UrquhartGeorge Stromeyer Nicolas Vanden Abeele Kurt Verheggen Barco Integrated report 2020 11 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Jan De Witte CEO See biographies of Board of Directors (Page 9) Wim Buyens (°1966) CEO Cinionic heads the Cinema Joint Venture, Cinionic. He has held seve- ral senior management positions in high tech companies during the past 15 years. He started his career in IT prior to joining the Danish company Brüel & Kjaer where he occupied several global senior management positions in sales and product strategy. Mr. Buyens joined Barco in November 2007 as Vice President Digital Cinema and has been General Manager of the Barco Entertainment division for 7 years. He served as Chairman of the Board of Governors of the Advanced Imaging Society in Hollywood in 2017-2018. Mr. Buyens holds a degree in Engineering and obtained his executive management at Stanford University and IMD in Lausanne. Olivier Croly (°1965) APAC joined Barco in 2017 as Senior Vice President of APAC. Prior to joining Barco, he held top positions at GE Healthcare & Philips, leading businesses across EMEA & Asia. After gradu- ating from the National Telecom Institute with a Master of Telecommunications & Informatics in 1988, Mr. Croly earned an MBA from Paris Dauphine University. Gerwin Damberg (°1978) Chief Technology Ocer joined Barco in 2016 via the acquisition of MTT’s Light Steer- ing technology where he was co-founder and served as CTO. Dr. Damberg is an entrepreneur at heart and has advanced image technologies over the last decade both in start-up and established technology companies in R&D, business devel- opment and management roles. He holds a mechatronics engineering degree from the University of Applied Sciences in Karlsruhe, Germany as well as a PhD in Computer Science from the University of British Columbia, Canada. Ann Desender (°1971) Chief Financial Ocer joined Barco in 2008 and has been leading Barco’s global finance team since 2010. Prior to joining Barco, she held management positions as Corporate Director of Finance & Reporting at Unilin and was a Senior Audit Manager at Arthur Andersen and Deloitte. Mrs. Desender holds a Master of Applied Economic Sciences from the University of Ghent and completed an advanced management program at IESE Barcelona. Stijn Henderickx (°1980) EMEA joined Barco in 2013 and held several positions in Barco’s Entertainment Division, including Vice President Cinema and Vice President Pro AV, Events & Simulation. As of early 2019, he became Senior Vice President of EMEA. Prior to joining Barco, Mr. Henderickx led Philips Arena Solutions, Philips' global business entity focused on stadi- ums and arenas. Earlier in his career, he took on multiple strategy assignments, first at The Boston Consulting Group as Consultant, later on with Philips as Director Corporate Strategy. He holds a Master in Business Engineering from the University of Antwerp. Barco Integrated report 2020 12 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Anthony Huyghebaert (°1974) Chief HR Ocer will join Barco on April 1, 2021. He started his career as a lawyer with Landwell and KPMG, before moving to Alcatel- Lucent and Nokia. He worked in multiple senior HR roles covering the breadth of functional domains in Human Resources, working as HR functional expert as well as in HR business partnership roles across regions, technology and operational organizations, while being stationed in Belgium and Singapore. Mr. Huyghebaert holds a Law Degree from the KU Leuven and a DES International and European Law from the UC Louvain. Rob Jonckheere (°1964) Global Operations is Senior Vice President Global Operations managing Barco’s worldwide manufacturing sites as well as the world- wide Logistics, Procurement, Quality and Facilities teams. He joined Barco in April 2016 as VP Global Procurement and brings 30 years of experience across R&D, Program- and General Management. Prior to joining Barco he held various positions with increas- ing responsibility at Philips and TP Vision and was chairman of the Board of Directors of TP Vision Belgium. Mr. Jonckheere holds a Master of Science in Electromechanical Engineering from the University of Louvain . Filip Pintelon (°1964) GM Healthcare joined Barco in 2008 and has been successively President of Avionics & Simulation, President of Media, Entertainment & Simulation, and COO. As of early 2015, he became General Manager of the Healthcare division. Prior to joining Barco, he held top positions at Siemens, Accenture and The Boston Consulting Group. After graduating from KU Leuven with a Master of Mathematics & Informatics in 1986, Mr. Pintelon earned an MBA from Vlerick Leuven Gent Management School. Mr. Pintelon also holds several positions in industry advisory boards related to Digital Innovation. Marc Spenlé (°1972) Chief Digital & Information Ocer joined Barco as Chief Digital & Information Ocer in August 2020. During his 25+ years of international professional expe- riences in companies like IBM, Vodafone, and smaller IT service companies, he has lead projects in customer centric business transformation, operating of SaaS business models, Software development and IT technology. Mr. Spenlé holds a degree in Process Engineering from the University of Applied Sciences in Niederrhein (Germany). Barco Integrated report 2020 13 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT George Stromeyer GM Enterprise began his career with Raychem Corporation in 1988. Since then, he has assumed roles of increasing responsibility for global technology commercialization with Scientific Atlanta Inc., Cisco Inc. and Harmonic Inc. Mr. Stromeyer joined Barco in February of 2016 to lead the Enterprise division, which integrates seven worldwide sites. A native of Silicon Valley, he has developed a multi-cultural, multilingual background, with extensive years living and work- ing in Europe and Latin America. George Stromeyer holds a Bachelor of Science in Mechanical Engineering from Cornell University and a Master of Business Administration from the Tuck School at Dartmouth College. Iain Urquhart (°1970) Americas joined Barco in 2019 as Senior Vice President of the Americas. Prior to joining Barco, he led the cloud transformation of Oracle America’s SaaS applications channel business. Before Oracle, Iain held senior leadership roles at Rackspace and Microsoft, focusing on driving cloud and as-a-service trans- formation in direct sales, channels and services. Mr. Urquhart holds a BS in History and Communication from the University of Missouri-Columbia. Nicolas Vanden Abeele (°1972) GM Entertainment joined Barco in December 2017. Mr. Vanden Abeele has over 20 years of experience in the technology and process industry in global leadership roles across the globe, having been stationed during his career in the Americas, Asia (China/ Singapore) and Europe. Prior to joining Barco, he was a division head and part of the Executive Committee of the Etex Group. From 1997 until 2010, he held several top leadership positions in regional and business divisional roles at Alcatel-Lucent. He started his career at Arthur Andersen in management and strategy consulting. Mr. Vanden Abeele holds a Degree in Business Administra- tion from KU Leuven, a Masters’ Degree in Business from the College of Europe and and a Masters’ Degree from the Solvay School of Management. Barco Integrated report 2020 14 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Kurt Verheggen (°1970) General Counsel serves as Company Secretary of the Board. He is the General Counsel of Barco in charge of legal, risk & compliance mat- ters. He started his career with the law firm Linklaters and then worked as legal counsel for CMB, Engie and General Electric. He holds a Law Degree from KU Leuven, a 'DEUG en droit' from Université du Havre, a Master of Laws from Tulane University Law School in New Orleans and a Master of Real Estate from Antwerp Management School. He is a judge in entreprise matters with the Enterprise Court in Kortrijk and a clinical teacher at the law faculty of the KU Leuven. Changes Core Leadership Team Barco NV is managed by a Core Leadership Team (‘CLT’) which comprises certain key officers from functions, businesses and regions. The CLT operates under the chairmanship of the Chief Executive Ocer and shares responsibility for the deployment of Barco’s strategy and policies, and the achievement of its objectives and results. The CLT composition has gone through a limited number of changes in 2020: • An Dewaele, Chief HR Ocer, left at the end of 2020. Anthony Huyghebaert will join Barco on April, 1 st 2021 as new Chief HR Ocer and succeed An Dewaele • Marc Spenlé joined Barco in August 2020 as Chief Digital & Information Ocer, leading Barco’s Digital Organization, combining IT and the GEAX organization, Barco’s global software development team. • Xavier Bourgois, Senior Vice President Information Technologies left Barco at the end of January 2021 and left the CLT in September 2020. His responsibilities are taken over by Marc Spenlé. • Johan Heyman, head of Barco’s Program Management Oce “fit to lead” left the CLT at the end of October 2020 and will be reporting to the Chief HR Ocer as Vice President Organizational excellence. • Tet Jong Chang, Managing director for Barco China since 2017, will retire from Barco at the end of the first quarter 2021 and will be succeeded by Kenneth Wang. Kenneth Wang (°1972) MD Barco China rejoins Barco as SVP for the China region as of March 2021. He originally joined Barco in 2015 as Sales Director for the China Entertainment and Clickshare business, and in 2018 moved as General Manager to the CFG-Barco JV in Digital Cinema for China. Prior to joining Barco, he held several commercial and business leadership roles in multinational companies in China including Philips, Dell and British Ameri- can Tobacco. Mr. Wang holds an Engineering degree from Beijing Univer- sity of Technology, and an EMBA from University of Texas at Arlington. Barco Integrated report 2020 15 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Annual General Meeting The annual general meeting (AGM) is held on the last Thursday of April. Shareholders can normally attend the meeting in person or vote by proxy. However, due to the corona virus outbreak in Spring 2020 and the government imposed measures to combat the epidemic, such as the prohibition on gathering, the Board of Directors has urged the individual shareholders not to physically attend the annual meeting but to submit their voting instructions in writing to the company secretary. Although the Belgian legislator exceptionally allowed listed companies to hold the general meetings behind closed doors, the Board of Directors orga- nized virtual meetings whereby shareholders could attend the meetings remotely and ask live questions, using Barco’s weConnect technology. Participation rate & Average of "For" votes Next to the ordinary general meeting, the Board of Directors also convened an extra-ordinary general meeting to approve the updated articles of association as well as the split of the existing share into 7 new shares. The company is open to discussions with proxy voting agencies to better understand their policies and align the company’s governance practices therewith, considering its size, profile, jurisdiction as well as the geographical scope of its activities . Over the last years, shareholders' participation has gradually increased. Almost two thirds of the shareholders participated in the 2020 AGM. 91% 2020 64% 94% 97% 95% 94% 95% 100 2015 42% 2017 56% 2018 54% 2019 58% 52% 2016 20 40 60 80 Voting by proxy Physical attendance Average of "For" votes * In 2020, physical attendance was not possible due to Covid-19. Barco Integrated report 2020 16 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Board of Directors Title 1 and 2 of Barco’s Corporate Governance Charter describe the responsibilities of the Board of Directors and its Committees. The table on the left provides a comprehensive overview of the directors’ attendance at Board of Directors and Commit - tee meetings in 2020. Intermediate meetings are held via teleconference call if need be. All the Board of Directors meetings took place in Belgium with some of the directors attending the meetings via videoconference due to covid-related travel and sanitary restrictions. One meeting was closed with a dinner attended by the executive management and several of their team members to foster closer interaction between the directors and the managers of the company. At every meeting, the Board of Directors reviewed and dis- cussed the financial results as well as the short to mid-term financial forecast of the company. At the beginning of the year, upon recommendation by the Audit Committee, the Board approved the financial results of 2019 and proposed the dividend for approval by the shareholders. The Board, in close concert with the Core Leadership Team, reflected on each of the divisions’ strategies for the short to mid-term, discussed and decided upon the growth initiatives for the company and approved the 2021 financial budget. Activity report on Board and Committee meetings Directors’ attendance at Board and Committee meetings BOARD OF DIRECTORS AUDIT COMMITTEE REMUNERATION & NOMINATION COMMITTEE STRATEGIC & TECHNOLOGY COMMITTEE ATTENDANCE RATE Charles Beauduin % Jan De Witte % Frank Donck () % Ashok K. Jain % Hilde Laga () % Luc Missorten % An Steegen () % (1) independent directors 99% Average total attendance rate Barco Integrated report 2020 17 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT AUGUST Audit Committee The Audit Committee is composed of three members. An Steegen, who acts as Chairman, Frank Donck and Hilde Laga. All members are independent directors. The Audit Committee’s members have relevant expertise in financial, accounting and legal matters as shown in the biographies on pages 7 / 12. Changes to the composition of the Audit Committee during 2020: Luc Missorten was member and acted as Chairman of the Audit Committee until his resignation as board member of Barco on April 9 th 2020. As a result Hilde Laga joined the Committee as a new member and An Steegen was appointed Chairman of the Audit Committee. Board Committees The Board closely monitored the impact of the corona epidemic on the company’s operations and financial results. Finally, the Board reflected on the novelties introduced by the new company code and brought the articles of association in line with the new law. Board of Directors Audit Committee Overview of the Board and Committee meetings in 2020 JANUARY MARCH MAY Remuneration Committee Strategic & Technology Committee FEBRUARY APRIL JUNE The Audit Committee met seven times during 2020. All Audit Committee members were present during all the meetings, except for Ann Steegen who was present in six of the seven meetings. The Audit Committee reported the outcome of each meeting to the Board of Directors. The yearly report of the activi- ties of the Audit Committee was submitted to the Board of Directors. The CEO, the CFO and the VP Corporate finance attended all regular meetings. The Group’s internal auditor was present in 2 meetings and the Group’s external auditor PwC Bedrijfs- revisoren/Accountants bcvba was present in 3 meetings. The overview below indicates a number of matters that were reviewed and/or discussed in Audit Committee meetings throughout 2020: DECEMBERSEPTEMBERJULY OCTOBER NOVEMBER Barco Integrated report 2020 18 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT • With regard to internal audit, the Committee reviewed and approved the internal audit charter, audit plan, audit scope and its coverage in relation to the scope of the external audit, as well as the stang, independence and organizational structure of the internal audit function. • With regard to the external audit, the Committee reviewed the proposed audit scope, approach and fees, the independence of the external auditor, non-audit services provided by the external auditor in conformity with Barco’s non-audit fee policy. The Committee also reviewed the key audit matters valuation of goodwill and valuation of deferred tax assets, as well as the group external auditor’s management letter, which contained no recommendations with material impact. • For information on the fees of Group auditor, please refer to note 23 Related party transactions in the Financial Statements 2020. • The Committee reviewed the report from the external auditor in which the auditor set forth its findings and attention points during the relevant period. The Committee also assessed the overall performance of the external auditor. The Committee also reviewed and approved its updated Audit Committee Charter, including the minor amendments thereto. • The Company’s 2019 annual and 2020 interim financial statements, including non-financial information, prior to publication thereof. The Committee also assessed in its quarterly meetings the adequacy and appropriateness of internal control policies and internal audit programs and their findings. • Matters relating to accounting policies, financial risks. and compliance with accounting standards. Compliance with statutory and legal requirements and regulations, particularly in the financial domain, was also reviewed. Important findings, Barco’s major areas of risk (including the internal auditor’s reporting thereon, as well as the review of litigation and other claims), follow-up actions and appropriate measures were examined thoroughly. • Quarterly review of critical accounting judgements and uncertainties, including potential impact of covid-19. • Each quarter, the Committee reviewed the Company’s free cash flow generation and working capital ratios. • The Committee monitored potential impairment indi- cators, reviewed the goodwill impairment test performed, financial impact of strategic investments and risk mana- gement (covid-19, cyber security, global and Healthcare compliance, currency & treasury instruments, health, safety & environmental, insurance, GDPR, sustainability program). Barco Integrated report 2020 19 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Remuneration and Nomination Committee The Board of Directors has combined the Remuneration Committee and the Nomination Committee into a single committee. The composition of the Remuneration & Nomination Com- mittee has been reviewed. Eective April 9, Mr. Luc Missorten has resigned as director and Mr. Frank Donck has joined the Committee as a new member, next to Mr. Charles Beauduin, who continues to act as Chairman and Mrs. Hilde Laga. The Committee has the necessary expertise to perform its mission The Remuneration and Nomination Committee fulfills the mission imposed on it by law and meets at least three times per year, as well as whenever the Committee needs to address imminent topics within the scope of its responsibi- lities. The CEO is invited to meetings, except for matters that concern him personally. The meetings are prepared by the Chief HR Ocer, who attends the meetings. The Committee gives its opinion on appointments to the Board of Directors (Chairman, new members, renewals and committees) and to Core Leadership Team positions. Other topics for the agenda of the committee typically are remu- neration policies, senior leadership remuneration, critical successions and nominations. In fulfilling its responsibilities, the Remuneration and Nomination Committee has access to all resources that it deems appropriate, including external advice. The Committee is aware of the importance of diversity in the composition of the Board of Directors in general and of cul- tural and gender diversity in particular. For further ref - erence on how the company deals with diversity and equal oppor- tunities we refer to Report on Planet, people and communities.. In 2020, the Remuneration and Nomination Committee met six times. In 2019, the Board of Directors instructed a reputable con- sultancy firm to conduct an in-depth board review and to prepare a report with recommendations on how to further improve the eectiveness of the Board of Directors and the dierent Committees. On the first meeting of the Remu- neration and Nomination Committee in February 2020, the findings of the review on the functioning of the Remuner- ation and Nomination Committee was presented by the Chairman and discussed, resulting in an agreement about a few adjustments. The Remuneration and Nomination Committee has reviewed the results on the 2019 bonus targets, for Barco, Core Leader- ship Team and CEO. For the Core Leadership Team, the evaluation on the individual bonus criteria was discussed and Barco Integrated report 2020 20 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT an overall assessment on the performance was done linked with the salary review. The members of the Remuneration and Nomination Committee received detailed data for each individual CLT member before giving final approval on bonus and merit. The allocations of Stock Options for 2020 has been prepared and brought to the Board for approval. As from Q2, an update was given at each Remuneration and Nomination Committee meeting about the covid-19 crisis where topics such as employee health and wellbeing, tem- porary and structural measures taken and impact on short and long term incentives were discussed. The Remuneration and Nomination Committee discussed and decided to use the legal options available for payback in case of fraud or other types of misconduct or irregularities in the results of the Company would be discovered in a period of 2 years following the payment of the bonus. The Committee has discussed how the Core Leadership Team and the N-2 position holders have been assessed as part of the yearly Talent Review process in Barco and reviewed the talent vitality situation. The Remuneration and Nomination Committee was infor- med and discussed about the Barco Culture Journey that has started, as an important element to support us in executing our strategy successfully. Related to some shifts in the Core Leadership Team through- out the year, the new appointments were discussed by the Remuneration and Nomination Committee. Technology Committee The Technology Committee is an advisory body to the Board of Directors. The Committee is composed of four members. Charles Beauduin, who acts as Chairman, Ashok Jain, An Steegen and Jan De Witte. The Technology Committee assists the Board of Directors in fulfilling its oversight responsibilities by preparing techno- logy related matters that could influence Barco’s strategy, such as the identification of major investment opportunities in future technologies through internal resources or techno- logy acquisitions, technology roadmap strategy, operational performance and technology trends that may aect portfolio performance. Major technology investments relate to investments running over a number of years that involve a minimum commitment by the company of 10 million euro over the entire duration of the project. The investments might also include technology acquisitions. In 2020, the Technology Committee met four times. The Committee organized specific working sessions by division, thus ensuring appropriate depth and focus for each of Barco’s divisions. The Committee also performed the annual general review of foundational technologies as included in its strategic plan update presented to the Board. Barco Integrated report 2020 21 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Evaluation of the Board of Directors and its Committees Regularly assessing the size, composition, functioning and performance of the Board of Directors and its Committees as well as the interaction with the executive management is an essential element of corporate governance. The principle of Board assessment is laid down in the Corporate Governance Code as well as Title 1 (1.5) of the company’s Corporate Governance Charter. See www.barco.com/corporategovernance End of 2019, the Board of Directors had instructed a repu- table consultancy firm to conduct an in-depth board review consisting of an online, tailormade questionnaire, to be completed by all directors, the CFO and the Com- pany Secretary, and personal interviews of each respondent. The Board review covers topics like the quality of the inter- actions within the Board (the relationship between the indi- vidual Board members and between the Board members and the Chairman) and between the members of the Board and the executive management; the quality and timing of the information and documents submitted to the Board; the preparation of the Board meetings; the quality of the discus- sions 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 each Board member to the decision-making process of the Board . In February 2020, the consultancy firm presented its find- ings to the Remuneration and Nomination Committee, and subsequently to the Board of Directors. It concluded that the company has a well-functioning and cohesive board, adding real value to the company and oper- ating in an atmosphere of trust and good collaboration. It also identified a few actions to further improve the function- ing of the Board of Directors, which meanwhile have been implemented to the extent possible. In 2020, the Audit Committee instructed the secretary of the Audit Committee to gather self-review feedback with the members of the audit committee and management. The feedback was gathered using an audit committee self-review questionnaire from PwC. The results of this questionnaire were shared in the Audit Committee meeting of July 2020. The conclusion of both the members as well as management were very positive on the functioning of the Audit Commit- tee, which is operating in an atmosphere of mutual trust and good collaboration. A couple of recommendations linked to non-finance and compliance topics were agreed upon and implemented to the extent possible. Barco Integrated report 2020 22 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Remuneration report for financial year 2020 General introduction By law of 28 April 2020, new rules have been introduced in Belgian company law, implementing the EU Directive 2017/828 as regards the encouragement of long-term share- holder engagement. These new rules require inter alia the company to have a remuneration policy, on which the shareholders have the right to vote at the general meeting. At the time of prepa- ration of this report the company’s remuneration policy, as historically grown, is spread over several policy documents. These will be combined into one remuneration policy which will be submitted to the shareholders for their approval at the general meeting of 29 April 2021. Where the new rules require the remuneration report to link up with the remuneration policy, such link will for this transition year be made to the various policy documents in existence at the time of the preparation of this report. Also in the context of the transition, the company has decided to provide the information required in the remu - neration report with respect to previous years only to the extent that this information was readily available. This report covers the 2020 remuneration of the non- executive board members (Part A), of the Chief Executive Ocer (CEO), who is also a member of the board and thus an executive director (Part B) and other members of the Core Leadership Team (CLT) who are not members of the board (Part C). Barco Integrated report 2020 23 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Part 1 : Introduction to the 2020 remuneration report The covid-19 pandemic had wide-ranging impacts on our company, our markets and our people. Our remuneration policy was also directly impacted by the crisis, with conse- quences for executive pay (management, CEO and CLT) as well as on the wages of the wider workforce. In response to the crisis, Barco took a number of measures to reset expense levels, such as relying on temporary unem- ployment, redeploying people, a continued discretionary spending stop, hiring freezes and scaling back. While the impact on fixed remuneration was limited, we took salary/ bonus actions and decided not to raise short-term incentive payment regardless of the achievements of group, divisional, regional, functional or individual targets. Also the long-term incentive cash bonus was aected by the pandemic, as it is directly linked to the annual business objectives, which Barco had defined. Part 2 : Remuneration report on the non-executive board members, CEO and CLT-members Part 2, A Remuneration of the non-executive board members On 30 April 2020, pursuant to article 17 of the Articles of Association, the General Meeting set the aggregate annual remuneration of the entire Board of Directors at 2,144,575 euro for the year 2020. Next to the board fees of the non- executive directors this amount includes the remuneration package of the CEO. Details on the CEO’s remuneration are provided in section 2, B hereinafter. Barco Integrated report 2020 24 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT TABEL 1 TOATAL REMUNERATION NONEXECUTIVE DIRECTORS Name - Position FIXED REMUNERATION VARIABLE REMUNERATION EXTRA ORDINARY ITEMS PENSION EXPENSE TOTAL REMUNE RATION PROPORTION OF FIXED AND VARIABLE REMUNERATION BASE COMPENSATION ATTENDANCE FEES OTHER BENEFITS ONEYEAR VARIABLE MULTIYEAR VARIABLE FIXED VARIABLE Charles Beauduin Chairman of the Board €, €, NA NA NA NA NA €, % % Frank Donck Member of the Board €, €, NA NA NA NA NA €, % % Ashok K. Jain Member of the Board €, €, NA NA NA NA NA €, % % Hilde Laga Member of the Board €, €, NA NA NA NA NA €, % % Luc Missorten Member of the Board * €, €, NA NA NA NA NA €, % % An Steegen Member of the Board €, €, NA NA NA NA NA €, % % Total €, €, NA NA NA NA NA €, % % Part 2, A, 1 Total remuneration () resigned from the Board with eect as of 9 April 2020 Barco Integrated report 2020 25 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT The remuneration paid to non-executive directors consists solely of an annual fixed component plus the fee received for each meeting attended. Considering the substantial time he devotes to the ongoing supervision of Barco group aairs, the Chairman of the Board receives a dierent remuneration package that comprises solely a fixed component, which is set separately by the Remuneration and Nomination Com- mittee and approved by the Board. The 2020 director’s pay consists of: • an annual gross fixed compensation of 120,000 euro for the Chairman of the Board • an annual gross fixed compensation of 30,000 euro per director to non-executive directors and additionally an individual attendance fee of 2,550 euro gross per Board meeting attended • 2,550 euro gross for members of the Audit Committee and 5,125 euro gross for its Chairman for each meeting of the committee attended • 2,550 euro gross for members of the Remuneration and Nomination Committee for each meeting of the committee attended • 2,550 euro gross per full day and 1,500 euro gross per half day for members of the Technology Committee for each meeting of the committee attended • the Chairman of the Board, the CEO and the members of the CLT do not receive attendance fees for taking part in meetings of the Board and the committees At the company’s request, the following directors have taken up specific punctual assignments outside the scope of their directorship for which they have been compensated as described hereafter: • Adisys Corporation, represented by Ashok K Jain: based on its director’s extensive experience in Silicon Valley, Adisys Corporation is requested to invest additional time in technology assessments and potential M&A identification as well as contract initiation: 3,000 euro (2 days at 1,500 euro per day) Non-executive directors do not receive any variable compen- sation linked to results or other performance criteria. They are not entitled to stock options or shares (see comment in the Corporate Governance statement on page 7 regarding the application of Principle 7 of the 2020 Belgian Corporate Governance Code), nor to any supplementary pension scheme. Part 2, B Remuneration of the CEO Part 2, B, 1 Total remuneration The remuneration package of the CEO consists of a base salary, a variable remuneration, stock options, a pension contribution, and other components. There were no shares granted (see comment in the Corporate Governance state- ment on on page 7 regarding the application of Principle 7 of the 2020 Belgian Corporate Governance Code). The remuneration package aims to be competitive and is aligned with the responsibilities of a CEO leading a globally operating industrial group with various business platforms. Barco Integrated report 2020 26 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT The amount of the remuneration and other benefits granted directly or indirectly to the CEO, by the Company or its subsidiaries, in respect of 2020 for his CEO role is set forth below. Base Salary The base salary of the CEO consists of the actual salary paid by the company as well as of a fixed director’s fee paid by Barco, Inc. and by Barco China (Holding) Ltd. Variable remuneration The variable remuneration of the CEO consists of an annual bonus. The CEO is, contrary to other members of the CLT, not entitled to a long term incentive (LTI), other than stock options (see below). Variable remuneration, if any, vests on 31 December of the performance year. Therefore such variable remuneration is reported for the year it vests and not for the (subsequent) year it is paid. The amount of annual bonus is paid in cash and is subject to a deferral period of three years, i.e. the bonus for performance year N is paid out as follows: • 50% during N+1 • 25% during N+2 • 25% during N+3 The deferred amounts are subject to the achievement of the Company’s sustained EBITDA performance over the deferral periods and are therefore subject to upwards or downwards and capped at 130% (upwards) and 70% (downwards). These parts are reported as multi-year variable. For the reasons explained in Part 1 of this report and in align- ment with the dierent salary actions, and cost reduction measures, taken across Barco’s workforce over 2020, the CEO base salary was reduced versus 2019 and the CEO renounced his bonus for 2020. No bonus for 2020 was vested in the hands of the CEO on 31 December 2020, except for the deferred payments of 2018 and 2019. Given the exceptional, and largely exogenous, impact of the Covid-19 pandemic on Barco’s results the Board of Directors decided to not apply the adjustments to the 2018 and 2019 deferred payments. Pension The pension benefit of the CEO is an individual defined con- tribution pension arrangement, which also includes a death cover. TABEL 1 TOTAL REMUNERATION OF CEO Name - Position FIXED REMUNERATION VARIABLE REMUNERATION EXTRA ORDINARY ITEMS PENSION EXPENSE TOTAL REMUNE RATION PROPORTION OF FIXED AND VARIABLE REMUNERATION BASE SALARY FOREIGN DIRECTOR FEES OTHER BENEFITS ONEYEAR VARIABLE MULTIYEAR VARIABLE FIXED VARIABLE Jan De Witte CEO €, €, €, €, €, NA €, €,, .% .% Other components of remuneration The other components comprise the total cost of ownership of a company car, a hospitalization insurance as well as a guaranteed income insurance in case of disability. Relative weight of base pay and variable remuneration Following what is stated above, the CEO’s entire 2020 pay consisted of 73.15% fixed remuneration and 26.85% (deferred) variable remuneration. This relative weight is exceptional as it is heavily impacted by the fact that no STI vested for 2020. Barco Integrated report 2020 27 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Part 2, B, 2 Share based remuneration In line with the company’s stock option policy, stock options were oered to the CEO during 2020 as detailed in the table below. The stock options granted under the 2017 scheme vested in the course of 2020. No stock options were exercised during 2020. For more detail, see the table below. Since the grant nor the exercise of the stock options is linked to performance conditions, this item of compensation is not considered as variable remuneration in the sense of the Belgian Corporate Governance Code. Therefore, it is also not included in the calculation of the above relative weight of base pay and variable remuneration. TABLE 2 STOCK OPTIONS MAIN PROVISIONS OF THE STOCK OPTION PLAN INFORMATION RELATED TO THE FINANCIAL YEAR 2020 Name Position PLAN IDENTI FICATION GRANT DATE VESTING DATE END OF RETEN TION PERIOD EXERCISE PERIOD EXERCISE PRICE A NUMBER OF OPTIONS GRANTED B VALUE UNDER LYING SHARES GRANT DATE A NUMBER OF OPTIONS VESTED B VALUE EXCERSISE PRICE A NUMBER OF OPTIONS EXERCISED B DATE OF EXERCISE NUMBER OF OPTIONS EXPIRED Jan De Witte CEO SOP -CEO // // NA //- // . € a) , b) ,, € SOP -CEO // // NA //- // . € a) , b) ,, € Barco Integrated report 2020 28 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Part 2, C Remuneration of the CLT-members The Core Leadership Team under analysis of this chapter includes 15 persons . The CLT-members are employed by local Barco companies in their respective countries of residence. Their compensa- tion package therefor takes local market remuneration and benefit practice into account. NAME POSITION EMPLOYER LEGAL ENTITY JOINED/LEFT CLT 2020 Xavier Bourgois CIO Barco nv (BE) left CLT : 30/09/2020 Tet Jong Chang SVP China Barco Visual Electronics Co., Ltd. (CN) Olivier Croly SVP APAC Barco Singapore Pte Ltd. (SG) Gerwin Damberg CTO MTT Innovation Inc. (CA) Ann Desender CFO Barco nv (BE) An Dewaele CHRO Barco nv (BE) left CLT : 31/12/2020 Stijn Henderickx SVP EMEA Barco nv (BE) Johan Heyman SVP Organizational Excellence Barco nv (BE) left CLT : 30/09/2020 Rob Jonckheere SVP Operations Barco nv (BE) Filip Pintelon SVP Healthcare Division Barco nv (BE) Marc Spenlé CDIO Barco nv (BE) joined CLT : 15/08/2020 George Stromeyer SVP Enterprise Division Barco Inc. (USA) Iain Urquhart SVP Americas Barco Inc. (USA) Nicolas Vanden Abeele SVP Entertainment Division Barco nv (BE) Kurt Verheggen General Counsel Barco nv (BE) Part 2, C, 1 Total remuneration The remuneration package of the Core Leadership Team members other than the Chief Executive Ocer consists of a base remuneration, a short-term variable remuneration, a long-term variable bonus, stock options, a pension contri- bution and various other components. The remuneration package aims to be competitive and is aligned with the role and responsibilities of each CLT member, being a member of a team leading a globally operating industrial group in the technology market space with various business platforms. There were no shares granted. Barco Integrated report 2020 29 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT The amount of the remuneration and other benefits granted directly or indirectly to the CLT-members, by the Company or its subsidiaries, in respect of 2020 is set forth below. Base Salary The base salary reflects role responsibilities, job characteris- tics, experience and skill sets. Variable salary Variable salary consists of an STI component and a Long Term Incentive (LTI) component, both delivered in cash. Variable remuneration, if any, vests on 31 December of the performance year. Therefore such variable remuneration is reported for the year it vests and not for the (subsequent) year it is paid. Annual Bonus It is Barco’s ambition to continue to build a culture where group, team and individual performance make a dierence and are truly recognized and rewarded with an annual bonus as set forward by the global Barco Bonus Policy. The indi- vidual bonus for the CLT members is governed by the same policy. The main conditions for the annual bonus are (i) the creation of the bonus pool and (ii) the achievement of bonus targets: • Profitability of the Barco group is the base for creating the bonus pool. A minimum of 70% of the 2020 Profit Plan EBITDA (excluding results on divestments and discontinued operations and excluding growth initiatives) should be achieved on group level before bonuses are paid. • A strong focus on performance at Group, divisional/ regional/functional and individual level is reflected in the annual Barco bonus program, which is directly linked to the annual business objectives. Payment is capped at 150% of the target award. TABLE 1 TOTAL REMUNERATION OF CLT EXCLUDING CEO Name - Position FIXED REMUNERATION VARIABLE REMUNERATION EXTRA ORDINARY ITEMS PENSION EXPENSE TOTAL REMUNE RATION PROPORTION OF FIXED AND VARIABLE REMUNERATION BASE SALARY FOREIGN DIRECTOR FEES OTHER BENEFITS ONE YEAR VARIABLE MULTI YEAR VARIABLE FIXED VARIABLE Core Leadership Team €,, €, €, €, €, €, €, €,, % % Barco Integrated report 2020 30 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT As explained in Part 1 of this report, no 2020 STI was vested in the hands of the CLT on 31 December 2020 as the condition for creating the bonus pool was not met. Long-term incentive Plan In 2018 Barco implemented its revised LTI policy that exists of a combination of a LTI Cash Plan and stock options. The latter are dealt with in section 2, C, 2 below. The LTI Cash Plan incentivizes and rewards engagement and leadership in driving the performance of Barco’s business in accordance with its long-term strategic goals. The long-term incentive cash bonus is a conditional right to receive a cash payment upon the achievement of certain long-term company performance indicators as determined by the Board: sales CAGR, EBITDA margin increase and cumulated net earnings over the respective plan period comprising 3 financial years (2018, 2019, 2020) and continued employment on the last day of the plan period. Payment is capped at 150% of the target award. For the reasons set out in Part 1 above, no STI was earned in 2020. For the same reasons, the LTI under the 2018- 2020 LTI plan did not vest. As the Board of Directors feels that it is important to still incentivize executives for leading performance over a multi-year period, the vesting period for the 2018-2020 LTI, has been exceptionally extended with an additional year (thus extending the vesting period till 31 December 2021). No change was made to the performance criteria. This extension coincides with the start of the new 2021-2023 LTI plan. BONUS TARGET CLUSTERS WEIGHT BUSINESS DIVIONS REGIONAL SALES & SERVICE ORGANISATIONS FUNCTIONAL DEPARTMENTS 1) Threshold for bonus pool 100% 70% of Group Ebitda PP target : yes / no 2) bonus targets company 20% Ebitda 20% FCF business 30% - Division EBITDA - Division Sales - Division Working Capital % - Regional Sales - Regional Sales Cost vs Sales % - Group Sales - WW functional budget individual 30% Individual performance targets: operational excellence, people leadership (engagement, culture), personal development total 100% Barco Integrated report 2020 31 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Pension The CLT is entitled to a complementary pension benefit on the basis of the provisions of the defined contribution plans for senior executives in their base countries. Other components of remuneration The main other components for all CLT-members are company car or car allowance, hospitalization or medical insurance and a guaranteed income insurance in case of disability, next to occasional local benefits in accordance with local market practice. Relative part of base pay and variable pay Following what is stated above, the CLT’s entire 2020 pay consisted only of fixed remuneration and no variable remu- neration. This relative weight is exceptional as it is heavily impacted by the fact that no STI nor LTI vested for 2020. Part 2, C, 2 Share based remuneration As stated above, part of the LTI is delivered as stock options. No shares were granted to the CLT-members, nor was any other share based remuneration provided to the CLT-mem- bers, during 2020. Reference is made to the explanation given in the Corporate Governance Statement on page 7 above regarding the reason for this deviation from article 7.9 of the Belgian Corporate Governance Code. In 2020, following authorization by the general meeting and at the proposal of the Remuneration and Nomination Committee, the Board of Directors allotted stock options to 12 members of the CLT. The exercise price amounts to EUR 12,76 per option, with a three-year vesting period. The num- ber of options to be oered to each individual beneficiary is variable in part. The options are oered to the beneficiaries for no consideration. 220,650 stock options were granted to and accepted by the members of the CLT. Barco Integrated report 2020 32 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT All details on the stock options granted, vested and exercised are provided in the table below. TABLE 2 STOCK OPTIONS MAIN PROVISIONS OF THE STOCK OPTION PLAN INFORMATION RELATED TO THE FINANCIAL YEAR 2020 Name Position PLAN IDENTI FICATION GRANT DATE VESTING DATE END OF RETEN TION PERIOD EXERCISE PERIOD EXERCISE PRICE A NUMBER OF OPTIONS GRANTED B VALUE UNDER LYING SHARES GRANT DATE A NUMBER OF OPTIONS VESTED B VALUE EXCERSISE PRICE A NUMBER OF OPTIONS EXERCISED B DATE OF EXERCISE NUMBER OF OPTIONS EXPIRED Ann Desender, CFO SOP -P // // NA //- // . € a) , b) , € SOP -EEA // // NA //- // . € a) , b) , € Marc Spenlé, CDIO SOP -P // // NA //- // . € a) , b) , € Filip Pintelon, SVP Healthcare Division SOP -P // // NA //- // . € a) , b) , € SOP -EEA // // NA //- // . € a) , b) , € George Stromeyer, SVP Enterprise Division SOP -P // // NA //- // . € a) , b) , € Nicolas Vanden Abeele, SVP Entertainment Division SOP -P // // NA //- // . € a) , b) , € Tet Jong Chang, SVP China SOP -P // // NA //- // . € a) , b) , € Olivier Croly, SVP APAC SOP -P // // NA //- // . € a) , b) , € SOP -EEA // // NA //- // . € a) , b) , € Stijn Henderickx, SVP EMEA SOP -P // // NA //- // . € a) , b) , € SOP -EEA // // NA //- // . € a) , b) , € Barco Integrated report 2020 33 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT TABLE 2 STOCK OPTIONS MAIN PROVISIONS OF THE STOCK OPTION PLAN INFORMATION RELATED TO THE FINANCIAL YEAR 2020 Name Position PLAN IDENTI FICATION GRANT DATE VESTING DATE END OF RETEN TION PERIOD EXERCISE PERIOD EXERCISE PRICE A NUMBER OF OPTIONS GRANTED B VALUE UNDER LYING SHARES GRANT DATE A NUMBER OF OPTIONS VESTED B VALUE EXCERSISE PRICE A NUMBER OF OPTIONS EXERCISED B DATE OF EXERCISE NUMBER OF OPTIONS EXPIRED Iain Urquhart, SVP Americas SOP -P // // NA //- // . € a) , b) , € An Dewaele, CHRO SOP -EEA // // NA //- // . € a) , b) , € Gerwin Damberg CTO SOP -P // // NA //- // . € a) , b) , € Rob Jonckeere, SVP Operations SOP -P // // NA //- // . € a) , b) , € Johan Heyman, SVP Organizational Excellence SOP -EEA // // NA //- // . € a) , b) , € SOP -EEA // // NA //- // . € a) , b) and May Kurt Verheggen SOP -P // // NA //- // . € a) , b) , € SOP -EEA // // NA //- // . € a) , b) , € Reference is made to page 66-69 in the Financial Statements for an overview of the stock options exercisable under the stock option plans. Barco Integrated report 2020 34 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Part 3 Redundancy payments No such payments were made to the CEO nor to other CLT-members during 2020. Part 4 Use of the right to reclaim There was no reason for the board to reclaim any previ- ously paid variable remuneration to CEO or to any of the CLT-members. Part 5 Deviations from the remuneration policy All of the above was determined and paid in line with the existing company reward policies. It also reflects the mea- sures taken by the Board of Directors at the initiative of the Remuneration and Nomination Committee as stated in Part 1 above. In alignment with these measures the CEO renounced his bonus for 2020 and the Board of Directors decided to not apply the adjustments to the 2018 and 2019 CEO bonus deferrals and pay the deferred bonus parts at 100%. With reference to the LTI Plan for CLT, the board has excep- tionally extended the plan with an additional year (thus extending the vesting period till 31 December 2021) as stated above. Barco Integrated report 2020 35 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Part 6 Evolution of remuneration and company performance IN THOUSANDS OF EURO 2015 2016 2017 2018 2019 2020 Remuneration of Non-Executive Directors (1) Total annual remuneration 483,667 499,175 512,725 430,449 416,825 402,425 Year-on-year dierence (%) 3% 3% -16% -3% -3% Number of Non-Executive Directors under review 9 9 11 9 6 6 Remuneration of CEO Jan De Witte Total annual remuneration (EUR) 1,209,183 1,424,544 1,672,362 1,262,683 Year-on-year dierence (%) - 18% 17% -24% CEO remuneration Total annual remuneration (EUR) 1,587,988 1,600,800 1,209,183 1,424,544 1,672,362 1,262,683 Year-on-year dierence (%) 1% -24% 18% 17% -24% Remuneration of CLT Total annual remuneration (EUR) 3,683,587 4,169,396 4,570,778 5,866,025 6,163,243 4,819,145 Year-on-year dierence (%) 13% 10% 28% 5% -22% Number of CLT Members under review 9 10 14 13 15 15 Barco Group Performance NET SALES (M euro) 1,029,969 1,102,342 1,084,706 1,028,531 1,082,570 770,083 Year-on-year dierence (%) 7% -2% -5% 5% -29% EBITDA (M euro) 74,080 88,002 107,126 124,466 153,022 53,563 Year-on-year dierence (%) 19% 22% 16% 23% -65% "Net income attributable -29,563 11,023 24,776 74,965 95,363 -4,393 Year-on-year dierence (%) 137% 125% 203% 27% -105% Average remuneration per FTE employee (2) average employee cost per FTE (EUR) 76,316 76,316 76,821 76,505 77,192 65,570 Year-on-year dierence (%) 0.0% 0.7% -0.4% 0.9% -15.1% (1) as indicated in Part 2,A of the Remuneration Report the remuneration for non-executive directors is depending only on the number of meetings and is reported aggregated for this table (2) Average remuneration of employees is calculated on basis of "wages and direct social benefits", including company cars, divided by the number of employees on year over year bases Barco Integrated report 2020 36 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Transparency of transactions involving shares or other financial instruments of Barco The company has issued a Market Abuse Prevention Policy which is being enforced as part of its compliance mana- gement program, available for review on the company’s website (www.barco.com/corporategovernance). It meets the requirements of the EU Regulation of 16 April, 2014 n° 596/2014 on market abuse. Persons discharging mana- gerial responsibilities and persons closely associated with them must notify the Financial Services Market Authority (“FSMA”) of any transactions involving shares or other finan- cial instruments of Barco within three business days after the transaction. Such transactions are made public on the website of the FSMA (www.fsma.be) as well as the company’s website, the latter on an aggregate basis. Conflicts of interest The company has laid down the rules for conflicts of inte- rest, applicable to its directors and executive managers, in its Corporate Governance Charter. These rules complement the procedures set by the Code of Companies and Associations for conflicts of interest of a financial nature and related party transactions (Article 7:96 and 7:97 CCA). In 2020, no conflicts of interest of a financial nature or related party transactions falling within the scope of these proce- dures arose. Policies of conduct Managing sustainability Barco refers to note 23 Related party transactions in Financial Statements 2020. Statutory auditor As requested by the Belgian Company Law, Barco reports the pay ratio of the CEO remuneration versus the lowest FTE employee remuneration in its legal entity Barco nv. The 2020 pay ratio is 29.97. Part 7 Vote of the shareholder As no comments were made to the previous remuneration report in the general meeting of 30 April 2020, during which that report was approved, there were no such comments to be considered for the remuneration paid or vested during 2020. At Barco, we see sustainability as one of the drivers of our corporate strategy. We design and act towards sustainable outcomes for our planet, the community we operate in and our colleagues. Governance keeps our corporate sustain- ability strategy on track, ensuring that our strategy remains eective, and that accountability for our results sits right at the top of our company. A more detailed description of our sustainability governance is available in our Planet- People-Communities chapter. Barco Integrated report 2020 37 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Risk management and control processes Barco Integrated report 2020 38 CGR Barco Integrated report 2020 38 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Within the context of its business operations, Barco is exposed to a wide variety of risks that can aect its ability to achieve its objectives and to execute its strategy successfully. To anticipate, identify, prioritize, manage and monitor the risks that impact its organiza- tion, Barco put a sound risk management and control system into place in accordance with the Code of Companies and Associations and the 2020 Corporate Governance Code. Our risk management and control processes are actively supported by the Board of Directors. They understand the risks that Barco faces, and assure that these risks are eectively managed by requiring that the CEO and the Core Leadership Team (CLT) are fully engaged in risk management. Risk control is a core task of the executive manage- ment and all employees with managerial responsibilities. Objectives Barco’s risk management and control system was set up to achieve the following objectives: The principles of the COSO reference framework and the ISO 31000 risk management standard have served as sources of inspiration to Barco in setting up its risk manage- ment and control system. Objectives Correct and timely financial reporting Compliance with all applicable laws and regulations Operational and strategic objectives Operational excellence Risk management and control system Control Environment Objectives Identification Risk response Control activities Information & communication Monitoring Analysis & evaluation Barco Integrated report 2020 39 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Control environment Barco strives for a strong compliance culture and risk aware - ness attitude by defining clear roles and responsibilities in all relevant domains. In this way, the company fosters an environment in which it pursues its business objectives and strategy in a controlled manner. This environment is created by implementing various company-wide policies and procedures, such as: • The Code of Ethics • Decision and signature authority rules • The Barco culture building blocks • Quality and other management systems • Risk profiling, reporting and mitigation processes Risk management process Risk management is firmly embedded into Barco’s processes, at all levels. For every key management, assurance and sup- porting process, Barco has developed and implemented a systematic risk management approach. It consists of five steps: identification, analysis, evaluation, response and monitoring. The CLT fully endorses this approach. Employees are regularly informed and trained on these subjects to ensure sucient risk management and control at all levels and in all areas of the organization. Every year in the fourth quarter, Barco performs a company- wide risk assessment and compliance gap analysis. This exercise, which involves the CLT members, the manag - ers of the subsidiaries and other key employees, aims to strengthen and formalize risk awareness throughout Barco. It encourages the employees with managerial responsibilities to actively think about the risks that impact our business and provides them with a clear view on how their peers around the world perceive risk. The Risk Manager and the Global Compliance Manager, supported by Internal Audit, are in charge of the yearly risk assessment and compliance gap analysis. Identification. Barco identifies the risks to its organization based on risk interviews, market research, the results of the material assess- ment and the outcome of earlier risk assessments. For 2020, the results were consolidated in 13 well-defined risks for Barco. Barco Integrated report 2020 40 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Analysis Once identified, the risks are scored using inherent risk (‘likelihood’ and ‘impact) and control level scales. The scales for impact, likelihood and control level are based on the acceptable level of risk exposure determined by the Board of Directors and laid down in the Barco corporate risk evalua- tion system. In 2020, the scoring of Barco's risks was done via an online questionnaire, which was completed by all 15 CLT members as well as 20 senior managers from dierent subsidiaries. Barco risk universe: The following risks are taken into consideration. FREQUENT RARELY DESTRUCTIVE NEGLIGIBLE Evaluation In the ‘evaluation’ phase, a risk matrix is drawn up, resulting in Barco’s inherent and residual risk profile. To set the right priorities, the risk is first evaluated in terms of impact and likelihood. The resulting inherent risk does not yet consider any management activities or control measures developed to mitigate it. Barco risk universe • Information security • Business Ethics • Product quality • Supply chain & ‘Nth’ party • Financial & liquidity risk • Data governance & privacy • Macroeconomic, geopolitics and market • Human capital & talent management • Contingency & crisis response • Local compliance & regulatory change • Corporate governance & strategy • Sustainability & environmental impact • Digital transformation & new technologies * Nth' party risk: An order of magnitude broader than the traditional third-party risk. Every party that a company utilizes is likely to have a large number of other parties of its own. This becomes a chain of downstream relationships with fourth, fifth parties, and Nth parties, introducing a new risk factor to the ecosystem. Barco Integrated report 2020 41 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT The residual risk level is then determined by taking into account the control level (control measures and their eectiveness) of each risk. The results are then reviewed by the CLT. The top risks are identified and divided into risks to be monitored in light of the existing mitigation measures, and risks to be further improved. For each top risk, a risk owner is nominated. The outcome is summarized in a report that is presented to the Audit Committee and made available to the Board of Directors. Risk response Management response to the top risks • ‘Risks to improve’ are contained by means of an enhan- ced mitigation plan next to the continuous improvement actions and existing control measures. This plan must minimize the eect of these risks on the organization’s ability to achieve its objectives and results. These types of risks, if any, reside under the ownership of the CEO. INHERENT RISK ACCEPT MONITORIMPROVE OPTIMIZE 2 10 15 20 25 3 4 5CONTROL LEVEL RISK UNDER OBSERVATION UNACCEPTABLE RISK CRITICAL RISK • ‘Risks to monitor’ are contained by means of the ongoing continuous improvement actions and existing control measures. These type of risks reside under the ownership of a CLT member and are monitored by the CEO. • ‘Acceptable risks’ and ‘risks to optimize’ are recorded in the risk register of the related process. The Risk Manager supports the adoption of clear processes and procedures for a wide range of business operations. In addition to these control activities, an insurance program has been implemented for selected risk categories that cannot be absorbed without material impact on the company’s balance sheet. Monitoring Risk monitoring helps to ensure that mitigation plans and internal controls continue to operate eectively. Progress of action plans and related status KPIs are tracked on a regular basis to remediate gaps in mitigation and monitoring activities. Risks in the ‘improve’ and ‘monitor’ quadrants are subject to a bi-monthly review by the risk owner, the Risk Manager and a delegation of CLT members. A semi-annual review is conducted during a CLT meeting which is formalized by Internal Audit and reported to the Audit Committee. Barco Integrated report 2020 42 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Control activities The continuity and the quality of Barco’s risk management and control system is assessed by following actors: • Internal Auditor – the tasks and responsibilities assigned to Internal Audit are recorded in the internal audit charter, which has been approved by the Audit Committee. The key mission of internal audit as defined in the internal audit charter is “to add value to the organization by applying a systematic, disciplined approach to evaluating the internal control system and providing recommendations to improve it”. • External Auditor – in the context of the external audit review of the annual accounts and their assessment of key internal controls. • Compliance Ocer – within the framework of the company’s Corporate Governance charter. • Risk Manager – plays a pivotal role in the organization by ensuring appropriate coordination and follow-up of risk management activities. • Global Compliance Manager – coordinates between dierent compliance roles, functionally and regionally. The compliance status and gaps are mapped on a regular basis in order to define compliance risks, priorities and mitigations as needed. • Audit Committee – the Board of Directors, assisted by its Audit Committee has the final responsibility with respect to internal control and risk management. Information and communication A timely, complete and accurate information flow – both top-down and bottom-up – is a cornerstone of eective risk management. In operational domains, Barco has implemented a mana- gement control and reporting system (MCRS) to support efficient management and reporting of business trans- actions 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 the clear assignment of roles and responsibilities, thus ensur- ing 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 into place to ensure the security of confidential information and to provide a communication channel for employees to report any (suspected) violation of laws, regu- lations, or the company’s code of ethics or policies. Barco Integrated report 2020 43 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Since Q1 2020, the covid-19 pandemic has been aecting businesses all over the world – including Barco. Risk description The public health crisis caused by the covid-19 pandemic, as well as measures taken in response to contain or mitigate the pandemic, have had, and are expected to continue to have, certain negative impacts on Barco’s business inclu- ding, without limitation, the following: • The demand, reflected by impact on orders and sales mainly in Barco’s Entertainment and Enterprise division • The profit and loss and operating results • The financial condition • Cash flows Approach: In this section, Barco addresses its risk mitigation plan related to the covid-19 pandemic impact. Overall approach Since the start of the corona virus outbreak (in China in January 2020) Barco has set up a dedicated global response team that is monitoring and supporting Barco’s operations and is focusing both on the safety and health of its employees, as well as on ensuring business continuity. Measures to keep employees safe • Hygiene, social distancing and track-and-trace measures As of February-March 2020 timeframe and taking into account local or regional sanitary & health regulations, the company strengthened personal hygiene measures throughout the organization, as well as business travel restrictions. Barco also expanded its home-work protocol and implemented social distancing measures for employees in all its facilities. In addition, a track- and-trace system has been put in place to slow down a possible future spread of the virus. In 2020, Barco registered approximately 110 infected cases among its global employee force for which none of the infection sources appear to be within the company. All related people have meanwhile recovered. • Hybrid way of working Some of Barco’s oces have been closed for short periods during the year but have gradually reopened. As far as regulations and the local situation allowed, the company applied unlocking measures and started bringing back employees while still taking into account local or regional regulations and recommendations. The company implemented a hybrid way of working with an alternate home-work protocol for its white collars. All oces have been updated according to the strengthened social distancing and sanitary measures to ensure a covid-proof and flexible work environment. Operations and supply chain Mainly in the first half of 2020, Barco has experienced disruptions to its ability to operate its production facilities in some countries, and in the future, further disruptions to Barco’s ability to operate production facilities or distribution operations cannot be excluded as a result of regulatory restrictions, safety protocols and heightened sanitation measures. While the Company experienced disruptions, Barco’s proactive approach limited the delays towards our customers. • Barco’s parts supply base, its subcontractor operations and the logistics chain has seen disruption mainly in the months March and April 2020 but recovered near full operational capacity. Extra risk section regarding the consequences and impact of the covid-19 pandemic Barco Integrated report 2020 44 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT • For Barco’s operations: - In China, operations were disrupted during February but recovered to near full capacity by the end of the first quarter 2020. - For the manufacturing sites in Europe, the operations team has organized production in order to match regulatory requirements with the objective of ensuring manufacturing capacity needed to support market demand. The respective logistics teams were able to secure a continued receiving of components and shipping of finished goods. - The India site (manufacturing of videowalls) was closed for a limited number of weeks in 2020 as a result of the regulatory lockdown-measures but production recovered and was able to meet market demand. Business health In the first quarter and as a result of lockdowns in China, Barco’s sales in China were halted during February and gradually resumed as of March. Since then, the covid-19 pandemic has spread internationally, with negative eects mainly in Barco’s Entertainment and Enterprise markets. The negative impact was caused by both the economic impact of the pandemic on some of its markets as well as by the lockdown measures and related restrictions. Barco remained focused on business continuity and protection of the business health. The company executed on a plan to align both its activity rate and spending with the impacts of the pandemic by resetting indirect cost levels, next to temporary measures and resource redeployments. • Aligning activity rate with market realities and customer demand Consequently, the company has implemented temporary work arrangements and economic unemployment mea- sures for both white and blue collars, in conformity with country specific legal frameworks, support mechanisms and regulations. The new work conditions varied depending on the re- gion, and Barco’s covid-19 response team reviewed the situation site by site, with the same objective to ensure business continuity while also considering all applicable covid regulations. The activity rate and cost containment measures also include ensuring a strong commitment to our customers through sales and servicing. • Adjusting the cost base and discipline in discretionary spending These measures – which can be adjusted again in line with future changes in the pandemic situation - also entail shifts in the planned investment patterns on selected long-term initiatives and a sustained strict discipline on discretionary spending. The Company made deliberate choices on the continua- tion and timetable of selected development projects based on current needs in the market and adjusting internal support levels in function of the focus shift. Furthermore, the Company was able to apply for wage subsidies under the newly enacted covid-19 relief legis- lation in APAC, Canada and Cinionic US. Strong funding and liquidity structure in place Barco has a strong balance sheet and ample liquidity. We refer to note 14 for more details on Barco’s net cash position. Barco has sucient headroom to enable it to conform to covenants on its existing borrowings. The Group complied with all requirements of the loan covenants on its available credit facilities throughout the reporting period. While the future may still bring some levels of headwind, Barco’s strong funding and liquidity structure in place should be more than sucient to ensure the going concern of the company. In addition, we refer to note 8 where we explain how we tested goodwill and all other non-current assets for impairment and concluded no impairment losses need to be recognized. Barco Integrated report 2020 45 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Top risks Below are the top risks identified by the 2020 risk management process, along with the trends and related material topic/ strategic lever. Certain risks are slightly regrouped and renamed compared to last year following the most recent risk identi- fication process and market intelligence. RISK TREND MATERIAL TOPIC STRATEGIC LEVER MACROECONOMIC, GEOPOLITICS AND MARKET p Market Reach Brand Focus to perform INFORMATION SECURITY Information security and data protection Product quality, safety and security Focus to Perform & Go for sustainable impact DIGITAL TRANSFORMATION AND NEW TECHNOLOGIES p p Innovation management Learning and development Innovate for Impact & Offer outcome- based solutions HUMAN CAPITAL AND TALENT MANAGEMENT p Employee engagement Learning and development Employee health, safety and wellbeing Diversity and inclusion Focus to Perform & Go for sustainable impact PRODUCT QUALITY = Product quality, Safety and security Customer engagement Brand Innovate for Impact & Offer outcome- based solutions DATA GOVERNANCE AND PRIVACY = Innovation management Information security and data protection Go for sustainable impact SUPPLY CHAIN AND ‘Nth’ PARTY RISK = Responsible supply chain management Sustained profitable growth Product quality, safety and security Focus to Perform & Go for sustainable impact Barco Integrated report 2020 46 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Macroeconomic, geopolitics & market risk Risk description All Barco divisions face competition due to lower barriers for entry following the further globalization of our markets. Competitors could outperform Barco in terms of product innovation, time to market, product quality, cost price or new business models, leading to loss of revenue, margins and profit. Moreover, Barco's competencies could be per- ceived as less valuable to its customers compared to those of other players on the market. Competition risk could also be impacted by prospects for additional government stimuli and any provisions that would benefit an organization or sector. In addition, serious political and (macro) economic evolu- tions and fluctuations can heavily impact the investment climate and could even completely stop business in a country or region. Geopolitical tensions, deteriorating trade relations and trade policy uncertainties impact global economic activ - ity and could translate into constraints to Barco's operations (taris, intellectual property restrictions, data ownership, investment restrictions, sta mobility restrictions due to travel limitations but also quarantine restrictions impacting the company and its people). Trend: Market/competition risk and geopolitics/macroeconomic risk were identified as main risks in 2019 and topped the risk ranking in 2020 driven by covid-19 which has since priorities in 2020 as a result of the covid-19 impact. Since 1Q2020, the covid-19 impact has been aecting business all over the world – including Barco. We refer to the separate chapter ‘Extra Risk-section regarding the consequences and impact of the covid-19 pandemic’ in the beginning of this risk chapter. 2020 main actions: • Barco developed a strategic management plan (SMP), a roadmap on how to further roll out the customer journey program across all divisions. • We increased our focus on market and competitor insights to face and outperform competition. • We regularly assess supply chain flexibility by considering the manufacturing footprint of Barco and its suppliers to enable risk spreading for any critical event that could cause business interruption. 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 11 4 MATERIAL TOPICS Barco Integrated report 2020 47 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Information security Risk description Barco relies considerably on its IT systems: infrastructure, networks, operating systems, applications and databases. Failure of an information technology system due to an inter- nal or external event (terrorism, crime, violence, vandalism, theft or human error) could impact employees, sites, assets, critical information, or intellectual property and have nega- tive consequences for the business (business interruption, reputational damage and/or liability claims). Ensuring information security includes, among others, processes that: • protect IT infrastructure, IT governance, prevention and remediation of IT failure and security awareness; • ensure the development and sale of secure products. Trend: Cyber risk was identified as a main risk in 2019 and remained a top priority in 2020, bearing in mind the increasing number of cyberattacks and threats. 2020 main actions: To mitigate the higher inherent risk, Barco increased its con - trol level via diverse security improvements: • Expansion of the Barco Security Council – a multi- disciplinary council of experts who coordinate, monitor and manage all information security eorts – with representatives of the divisions. • Raising security levels to adapt to the new normal with safe remote working through VPN and multi- factor authentication (MFA) for all employees. • Finalizing the IT disaster recovery plan and making it available to ensure Barco is well prepared in case of an emergency due to an information security incident. • Closing an updated agreement with Microsoft to enable additional security via its Microsoft365 toolset, including cloud solutions. • Extending ISO27001 certification for ClickShare products to cloud-related products. • Launching several initiatives to educate employees on information security, such as a cyber hygiene e-learning course and one covering fake phishing emails. • Highlighting challenges through a red team and the use of penetration tests. Periodic external reviews of the cybersecurity risk showed improvements over the past year on diverse identified weaknesses. Read more on “Corporate security and data privacy” and “Customer and product responsibility” 14 18 19 20 21 1 3 5 6 7 8 9 10 12 13 15 17 16 11 4 2 MATERIAL TOPICS Barco Integrated report 2020 48 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Digital transformation & new technologies Risk description The inability to embrace technological advancements quickly could impact Barco’s ability to accelerate growth. Technologies such as machine learning, robotics, artificial intelligence and the use of big data and analytics can improve business processes and increase eciency. The failure to adopt these will impair operational resilience and the abil- ity to face current and future challenges and may result in missed revenue and missed business opportunities. In Barco’s environment, a rapid time to market is the key to ensuring competitiveness. Trend: The covid-19 pandemic has increased the importance of digital transformation and new technologies, which was already identified as a risk in 2019. 2020 main actions: • Our organizational structure was transformed by merging the software and IT departments into one Digital Organization. • The role of Chief Digital & Information Ocer (‘CDIO’) was created and filled through external recruitment. The new CDIO has extensive experience in operating SaaS models, software development, data management and analytics, IT technology, cross-functional business transformation and change leadership. • The new CDIO further identifies and integrates digital skills and competences via cross-functional teams within the Digital Organization, which is responsible for accelerating our oering of true end-to-end experiences for our customers and end users. • In response to the growing number of people working and learning remotely to combat the covid-19 pandemic, Barco repositioned its product oerings and accelerated its marketing campaigns for conferencing and digital technologies like Click- Share Conference and weConnect. The ongoing engagement, commitment and sense of urgency in converting strategic decisions into practice will help Barco in this journey. 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 11 4 MATERIAL TOPICS Barco Integrated report 2020 49 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Human capital & talent mamagement Risk description A skilled workforce and agile organization are essential for the continued success of our business. Diculties in attracting, retaining and developing employees could lead to continued vacancies in certain critical areas, higher employee dissatis- faction and turnover, lower performance and underutilization of existing skills. Stang issues could result in a skillset not able to meet all competency requirements in view of rapidly moving technologies, changing business models and operational agility. In times when employees are required to work from home and may become disconnected from the work environment, leading to mental fatigue, stress and anxiety, it is crucial to protect employees’ health and wellbeing to avoid labor incidents, burnouts and long-term sickness. Trend: Human resources management was identified as an increas- ingly important risk in 2019 and was confirmed as one of the main risks in 2020. 2020 main actions: • Timely and emphatic communication and a solid company culture, employee-manager relationships and remote digital working conditions became key to ensuring employee wellbeing during the covid-19 pandemic. • The broader human resources action plan consists of 3 main pillars: ‘attract’, ‘develop & retain’ and ‘reward’ with ‘strengthen the foundation as general support base for all pillars. In 2020, Barco’s HR team focused primarily on ‘strengthening the foundation’ by communicating candidly and in a timely way about the impact of the pandemic, oering support and insights on how to engage in strong employee- manager relationships and staying connected with(in) the teams in a remote or hybrid work system. • Barco increased internal mobility and redeployment to create individual opportunities and to adapt to changing market conditions. • To boost eciency in the recruitment process and better engage hiring managers in the total flow, the recruitment flow is now integrated in new integrated human capital management software. • In the field of learning, we increased learning posibilities via Barco University through remote training sessions. • Two new ‘Pulse’ surveys were launched to measure employee engagement and to identify critical areas that require further actions. • To gain insight into capability needs for the short and long term, human resources is more involved in Barco’s strategic management plan. This proactive position seeks to enable a healthy organizational design where people with the right skillsets can be found both through internal development and external recruitment. • The culture rejuvenation project to revive Barco’s DNA via five building blocks was successfully introduced and implemented before the global lockdowns, helping the organization to be more resilient in crisis situations. Read more in the “Report on People” 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 11 4 14 16 MATERIAL TOPICS Barco Integrated report 2020 50 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Product quality Risk description Barco’s reputation as a business partner relies heavily on its ability to supply high quality products. Failure to comply with the development process and stage gate requirements can lead to the market introduction of immature products – resulting in loss of sales and market share, additional cost and reputational damage. Product quality issues and delivery issues such as the inability to fulfill orders in a timely way lead to reputational damage, customer dissatisfaction and loss of business. Trend: Quality – new product introduction (NPI) was one of our main risks in 2019 and remains so in 2020. 2020 main actions: Five focus areas had to ensure that our product quality was and remained at the desired level. • We took eorts to safeguard product reliability: the reliability of the deviating products was brought to the desired level and the reliability of new products was assured. • Software quality assurance was fully integrated in the software development teams. Cyber security expertise was in-sourced and we achieved IEC62304 certification in Noida, India. • We strengthened adherence to processes and quality requirements in new product introduction stage gates and global process owners were coached on to integrate processes within the quality management system (QMS) and take up the correct level of process accountability. • Key performance indicator (KPI) dashboards were monitored and missing dashboards were implemented. The global audit program was monitored to have better control over the overdue actions. • A quality assurance and regulatory assurance organization and process was developed for our new medical device product base in Suzhou, China. Read more on “Customer and product responsibility” 14 18 19 20 21 1 3 5 6 7 8 9 10 12 13 15 17 16 11 4 2 MATERIAL TOPICS Barco Integrated report 2020 51 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Data governance & privacy Risk description Insucient governance regarding data assets, data confi- dentiality and data ownership could lead to loss or improper use of business-critical or personal data, causing a loss of process eciency, vulnerabilities, prosecution, fines and reputational damage. As a technology company, Barco may fail to register intel- lectual property rights in a timely manner or fail to protect its critical patents. Patents can be challenged and invalidated after they are granted. Insucient IP awareness and a lack of IP strategy can lead to the inability to safeguard and monetize our IP and a dis- connected strategy towards filing and protection. Other risks could come from IP infringements by suppliers or unclear IP agreements. Critical IP or know-how may get lost when key employees or consultants leave the organization. Barco monitors changes in intellectual property rights. However, it cannot exclude the possibility of inadvertently infringing on a party’s intellectual property rights, which could result in claims and litigation. Trend: Data protection was one of our main risks in 2019 and ranks among the top risks in 2020. 2020 main actions: • We implemented a simplified and strengthened innovation process for new technologies, including increased focus on early-stage patenting in a more strategic way. • Patent delegates ensure better visibility and tracking of the IP status for new innovations. • We continued to invest in awareness on the importance of data and IP governance. To further highlight the importance of confidentiality and the value of IP, we developed and refreshed role-based courses that touch on our IP rights (principle aspects, incl. non-disclosure agreements (NDAs), confidential information, patents, trademarks, copyrights, design rights, trade secrets and know-how). Designated training plans are being developed through Barco University to provide tailored key learnings by target group. • Data governance and data strategy are key in Barco’s digital business transformation journey. Read more on “Corporate security and data Privacy” 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 11 4 MATERIAL TOPICS Barco Integrated report 2020 52 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Supply chain & 'Nth' party risk Risk description A strong dependency on suppliers, manufacturers, or the technology or knowledge of consultants and suppliers, part- ners, integrators, distributors or end customers creates a vulnerability that might impact our product portfolio and the competitive pricing of Barco products, disruptions in the supply chain, market share and profitability of our business. The covid-19 pandemic has put high pressure on the global supply chain and caused financial constraints, forcing some suppliers to phase out products or even relocate activities. This caused an additional burden on Barco’s resources and inventory. Trend: Dependency and contingency risks were identified as main risks in 2019 and remained important in 2020, especially in light of the trade wars and regional/global lockdowns. 2020 main actions: • War rooms and day-to-day alignment processes across our global operations were installed to ensure business continuity. • The procurement team further improved and extended the supplier contingency plans for its key and core suppliers, including those which are ‘single source’. The covid-19 pandemic urged the team to bring the plans, which include financial exposure, back-up suppliers and decision trees defining the way forward in case of failure, to life. We took advantage of strategic stock, consignment models, liabilities in dierent parts of the product lifecycle and regional and global dual sourcing. • Geopolitical risks and trade wars leading to additional certifications and regionalization requirements have pushed us to rethink our supply base in certain segments. We enabled multi-site production for our main products, of which the manufacturing is out- sourced, also addressing the certification require- ments of specific countries. • To foster ‘early supplier involvement’ (ESI) in the intro- duction stage of any new products, we extended the involvement of supplier quality assurance (SQA) in the new product introduction process. We added the supplier readiness assessment as part of the review criteria to underpin output, quality and yield. • Business review meetings (BRM) and supplier perfor- mance ratings (SPR) were enhanced with sustaina- bility and cyber security ratings. To date, the cyber- security behavior of more than 60 key and core Barco suppliers has been monitored by using external cybersecurity screening data and consumer audits. The audits did not highlight any major findings. More information can be found in “Supply chain responsibility” 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 4 11 MATERIAL TOPICS Barco Integrated report 2020 53 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Environmental impact Risk description Climate transition and the environmental footprint in general holds a series of risks for Barco. The inability to meet (future) environmental legislation to limit CO 2 emissions and increase energy and material eciency could lead to regulatory fines (such as a carbon tax). More importantly, failure to adapt to changing customer behavior and address environmental concerns could negatively impact Barco’s reputation with customers and investors, thus leading to loss in sales or even capital. Physical climate change risks include impacts of extreme weather events on production facilities and/or equipment and disruptions in the supply chain due to these events. Approach: • Barco has set ambitious targets to reduce green- house gas emissions, increase the energy eciency of its products and increase revenues from products with improved eco-design. • To highlight our dedication to improving sustainabil- ity, we joined the Science Based Targets initiative and signed the business ambition for 1.5°C commitment. • Each year, we respond to the CDP Climate Change questionnaire, disclosing our climate transition risks and low carbon opportunities. Read more in the Report on planet, people and communities Business ethics Risk description Insucient fair practice and business behavior (according to the ethical standards and principles set by the Barco Code of Ethics), including fraud, corruption, bribery, abuse and violations of human rights leads to reputational damage, decrease of sales and legal investigations and prosecutions. Barco is directly exposed to risks in the area of human rights as an employer in the first place, but also through its opera- tions in the regions where it conducts business. Barco may source raw materials from suppliers which may not respect their employees’ human rights, such as the freedom of asso- ciation. The increased pressure on management and employees could raise the temptation to deal with unscreened partners without any diligence procedures. The inability to foster an environment of equality and equal opportunities regardless of gender, race, ethnicity, age or sex could harm Barco's reputation and could lead to noncompliance with applicable laws and regulations. Approach: Code of Ethics: • Barco’s Code of Ethics is fully endorsed and applies to everyone employed by Barco and its partners, regardless of position and level of responsibility. • The mandatory training on “Standards at Work” help educate our people and remind them about the Group’s ethical principles and values. • The ethics mailbox is available to everyone who wishes to report, even anonymously, any issue to the Ethics Committee. Risks to be disclosed pursuant to the rules regarding non-financial information. 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 17 16 11 4 15 MATERIAL TOPICS 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 11 4 MATERIAL TOPICS Barco Integrated report 2020 54 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Supplier assurance: • Our suppliers must comply with the Responsible Business Alliance (RBA) code of Conduct, including labor, ethics and health and safety standards. Before engaging in a business relationship, we screen new suppliers, considering the risk profile and reputation of each partner as well as their adherence to ethical standards. Existing key partners are screened periodically. Key principles such as the four-eyes principles ensure segregation of duties in our procurement and buying processes. Human rights and anti-discrimination: • Barco applies a human rights policy in line with the standards and policies set by the Universal Declaration of Human Rights and the International Labor Organization (ILO). Our anti-discrimination policy is available on our intranet (BarcoZone) and governed by the HR department. • Both the HR department in the headquarters and the Internal Audit team -regularly check labor practices and human rights with the local HR teams. • Barco includes all employees in collective bargaining agreements by complying with all necessary local workforce regulations in the countries where Barco operates. Barco handles specific workforce-related topics by closing o company-specific collective bargaining agreements. Where applicable, Barco organizes workers’ councils (both national and inter- national). • We promote equal opportunity and do not discrim- inate against any employee, candidate, contractor or supplier based on nationality, race, age, physical disability, social, political or religious preference or other personal characteristics. Barco encourages social and cultural diversity, and our recruitment, remuneration, evaluation and supplier tender proces- ses are based solely on professional qualifications. Anti-corruption: • In order to limit the risk of money laundering, a process to screen incoming payments is in place under the Payment Processing Policy. Read more on “Ethics and compliance” and “Supplier assurance” Barco Integrated report 2020 55 CGR Governance & Risk Report 01 CORPORATE GOVERNANCE 02 RISK MANAGEMENT Financial risk management and internal control • Finance and accounting manuals, which are available to key accounting sections, ensure the accurate and consistent application of accounting rules throughout the company. • Specifically within the financial domain, a quarterly bottom-up risk analysis is conducted to identify and document current risk factors. Action plans are defined for all key risks. The results of the analysis are discussed with the statutory auditor. • The accounting teams are responsible for producing the accounting figures (closing books, reconciliations, etc.), whereas the controlling teams check the validity of these figures. These checks 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. • Specific internal control activities concerning 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. • Uniform reporting throughout the organization ensures a consistent flow of financial information, which allows the detection of potential anomalies. • To provide Barco’s stakeholders with the information necessary for making sound business decisions, financial reporting is shared with the outside world. The external financial calendar is planned in consultation with the Board of Directors and the CLT and then announced to external stakeholders. Barco Integrated report 2020 56 CGR Governance & Risk Report 2020 Integrated annual report Report on planet - people - communities ENABLING BRIGHT OUTCOMESbarco.com Table of contents 01 Our sustainability ambition statement ...............3 02 Our sustainability strategy . . . . . . . . . . . . . . . . . . . . . . . . . .4 Go for sustainable impact .............................5 Materiality ...........................................6 How the UN SustainableDevelopment Goals guide Barco’s strategy................................10 03 Our sustainability performance ....................11 Planet..............................................12 People .............................................33 Communities .......................................47 04 Managing sustainability .......................... 68 Sustainability governance and responsibility ............69 Stakeholder engagement............................. 71 External initiatives (platforms and commitments) ........73 Certifications .......................................74 External evaluations .................................75 This is the planet - people - communities section of Barco’s 2020 Integrated annual report. Other sections are available via the download center at ir.barco.com/2020. CORE MORE • Governance & risk report • Report on planet - people - communities • Financial report ANNEX • Assurance report • GRI Content index • Glossary Barco Integrated report 2020 2 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE In line with our ambition to fully integrate sustainability into our corporate DNA, Barco designs and acts towards sustainable outcomes for our planet, people and communities. 1. We will lower our own environmental footprint and those of our customers. 2. We will invest in sustainable employability by encouraging our people to learn and develop themselves and by creating the conditions for a healthy working environment – both physically and mentally. We engage in creating an inclusive workplace that embraces the diversity of our people. 3. We will play an active role in the communities we operate in by upholding the highest ethical and quality standards and expecting the same from our business partners. We always aim to deliver added value to our customers through our solutions, services and capabilities. In addition, we help ensure more people can participate in and benefit from the innovation society. Barco is ready to gear up and move forward towards a more sustainable future. Jan De Witte CEO Barco Our sustainability ambition statement Barco Integrated report 2020 3 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Our sustainability strategy Barco Integrated report 2020 4 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Our sustainability strategy is an integral part of our corpo- rate strategy, ‘enabling bright outcomes’. Integrating ‘go for sustainable impact’ into our corporate strategy was a logical choice for us, as we are convinced that sustainable business is good business. Barco’s Sustainable Impact strategy is focused on three pillars: planet, people and communities. For each pillar, we defined an overall ambition statement and linked the relevant mate- rial topics. Material topics were updated based on the 2020 materiality assessment. Every pillar is discussed in dedicated chapters in this Integrated report. MATERIAL TOPICS AMBITION Barco’s sustainability pillars, ambitions and material topics We will lower our ecological footprint and those of our customers. • Climate change & energy • Product stewardship • Waste management We will invest in sustainable employability by encourag- ing our people to learn and develop themselves and by creating the conditions for a healthy working environment – both physically and men- tally. We engage in creating an inclusive workplace that embraces the diversity of our people. • Employee engagement • Learning & development • Employee health, safety & well-being • Diversity & inclusion • Labor practices & human rights • Customer engagement • Product quality, safety & security • Information security & data protection • Business ethics • Responsible supply chain management • Corporate governance • Community engagement We will play an active role in the communities we operate in by upholding the highest ethical and quality standards and expecting the same from our business partners. We always aim to deliver added value to our custom- ers through our solutions, services and capabilities. In addition, we help ensure more people can participate in and benefit from the inno- vation society Planet People Communities * High material topics Go for sustainable impact Barco Integrated report 2020 5 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Materiality A materiality assessment helps organizations understand what topics matter most to its business and stakeholders. Every three to four years, Barco conducts a comprehensive materiality assessment to make sure it reflects the latest developments in its business and external environment and reflects these in the strategy, risk and business process of the company. A topic is material to Barco if it meets two conditions: • it impacts Barco’s business significantly in terms of growth, cost or risk (X-axis of the materiality matrix); • it is important to Barco’s stakeholders – customers, investors, (non-) governmental organizations, suppliers and employees (Y-axis of the matrix). In determining if a topic is material, we consider Barco’s impacts across the value chain. 2020 materiality assessment: a 3-step approach Composing a longlist of potential material topics through desk research covering the UN Sustain- able Development Goals, reporting standards (GRI, SASB), ESG ratings, sector federations and Barco’s own risk assessment. Reducing the longlist to a shortlist by gathering direct feedback through employee surveys, external stakeholder surveys and interviews, including a survey distributed among the top 100 Barco leaders. Review and validation of the results by the Execu- tive Sustainability Steering Committee and the Core Leadership Team. 1. Longlist 2. Shortlist 3. Review In 2020, we conducted a new, extensive materiality assessment, based upon and aligned with our inte- grated reporting approach, considering the six capitals. Compared to the previous materiality assessment, a number of topic names have changed, or topics have been added to cover all capitals. Barco Integrated report 2020 6 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Barco’s materiality matrix has three categories – low, medium and high material topics. The illustration reflects our medium and high material topics. Changes compared to the previous materiality • In the previous annual report, materiality only included topics of the natural, human and social and relationship capitals (Planet, People, Communities). In line with our step-up to integrated reporting, we included topics of the three other capitals (financial, intellectual and manufactured) too. • People: ‘Labor practices & human rights’ is new. • Planet: - ‘Climate change & energy’ replaces ‘Greenhouse gas emissions’ and ‘Energy eciency of operations’ - ‘Product stewardship’ replaces ‘Energy eciency of products’ - ‘Circular economy’ is replaced by ‘Product stewardship’ and ‘Waste management’. • Communities: ‘Corporate governance’, ‘Information security & data protection’ and ‘Product quality, safety & security’ are new topics. IMPACT ON LONG-TERM SUCCESS OF BARCO IMPORTANCE TO STAKEHOLDERS High materiality Medium materiality 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 14 11 4 Communities 1. Customer engagement 2. Product quality safety & security 3. Information security & data protection 4. Business ethics 5. Corporate governance 6. Responsible supply chain management 7. Community engagement Intellectual 8. Innovation management 9. Brand Financial 10. Financial resilience 11. Sustained profitable growth 12. Market reach People 13. Employee engagement 14. Employee health, safety & well-being 15. Labor practices & human rights 16. Learning & development 17. Diversity & inclusion Planet 18. Product stewardship 19. Climate change & energy 20. Waste management Manufactured 21. Long-term asset performance 2020 materiality matrix Overview of the topics that might affect Barco’s ability to create value for its stakeholders - linked to the six capitals of integrated reporting Barco Integrated report 2020 7 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Description of the medium and high material topics FINANCIAL Financial resilience (high) 10 Solvency, long-term financial stability, the capacity to withstand market-related or financial headwinds. Market reach (medium) 12 The company’s ability to reach its customers across the globe through channels, indirect or direct sales and services. This topic also covers the company’s competitive position in its dierent markets. Sustained profitable growth (high) 11 The company’s ability to deliver structural growth in combi- nation with profitability ensures healthy cash flow generation. MANUFACTURED Long-term asset performance (medium) 21 Performance of fixed assets such as the company’s property, buildings, equipment and infrastructure, but can also include other assets such as long-term investments or patents. INTELLECTUAL Innovation management (high) 8 Management focus, eectiveness and eciency of Barco’s innovation process (including but not limited to R&D and prod- uct management) to ensure outcome-based solutions and safeguard intellectual property (IP). Brand (medium) 9 The company’s brand is an intangible asset distinguishing its solutions from others. It builds on a combination of factors such as name, term, design, symbol or any other features, and determines how the organization is perceived by those who experience it. PLANET Climate change and energy (high) 19 Addressing risks and opportunities related to climate change. It includes but is not limited to reduction of greenhouse gas emissions, implementing energy eciency measures and working towards a low carbon footprint. Product stewardship (high) 18 Incorporating criteria into the design, development and life cycle management of products, services and business mod- els to reduce the environmental footprint. It includes energy eciency, material use intensity, management of hazardous substances, packaging and end-of life optimization (including circularity). Waste management (medium) 20 Reducing, appropriately disposing of and optimizing oppor- tunities for recovery, recycling and re-use of solid waste in operations. It does not include waste from end-of-life of products. PEOPLE Diversity and inclusion (medium) 17 Diversity is representation of gender and minority groups at all levels of the organization. An inclusive workplace is one where individuals from dierent backgrounds are culturally and socially accepted and equally treated. Employee engagement (high) 13 The level of enthusiasm and dedication an employee feels toward their job, the organization and its goals, and the eect it has on well-being and productivity. Employee health, safety and well-being (medium) 14 Occupational health and safety and promotion of well-being of Barco’s employees. Labor practices and human rights (medium) 15 Promoting fair labor practices, decent working conditions and respect for human rights. It includes but is not limited to prohibiting child, forced or bonded labor, ensuring fair wages and overtime pay, minimum wages, provision of benefits and freedom of association. Learning and development (medium) 16 Training and upgrading the capabilities, skills and compe- tencies of employees based on the strategic needs of the organization, employee performance and career development reviews. Barco Integrated report 2020 8 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE COMMUNITIES Business ethics (high) 4 Promoting high ethical standards and combating corruption in business interactions, including in joint ventures and with business partners, customers, suppliers, and distributors. Community engagement (medium) 7 Supporting employee volunteering and charitable giving, and providing corporate financial and in-kind contributions for communities in which the company has a presence or impact. Corporate governance (medium) 5 Conducting operations in accordance with internationally accepted principles of good governance and best practice. These include but are not limited to the roles and responsibili- ties, transparent reporting and remuneration of the supervisory and managing boards, board independence and the positions and rights of shareholders. Customer engagement (high) 1 Meeting or surpassing customer expectations, building suc- cessful relationships with customers, encouraging co-creation. Information security and data protection (high) 3 Protecting the collection, analysis, use, storage, transfer, and sharing of information from unwanted parties, unauthorized access, and security threats, including cyberattacks. Collecting, using, storing, transferring and sharing information in ways that uphold the right to privacy and personal data protection. Product quality, safety and security (high) 2 Oering solutions and services that are healthy, safe and secure to use. It includes but is not limited to liability, management of recalls, product testing to eliminate risk of injury or damage and integrating security controls. Responsible supply chain management (medium) 6 Management of environmental, social and governance risks in the supply chain. It includes but is not limited to labor practices and human rights, business ethics, energy and climate change and waste management. It also includes the management of supply chain disruptions and conflict minerals. Barco Integrated report 2020 9 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 8. Innovation management 10. Financial resilience 11. Sustained profitable growth 1. Customer engagement 2. Product quality safety & security 3. Information security & data protection 18. Product stewardship 1. Customer engagement 2. Product quality safety & security 3. Information security & data protection 4. Business ethics 13. Employee engagement 18. Product stewardship 19. Climate change & energy Innovate for impact Focus on performance Oer outcome-based solutions Go for sustainable impact How the UN Sus- tainableDevelopment Goals guide Barco’s strategy We use the United Nations Sustainable Development Goals (SDGs) as a guideline to shape our strategy and ambitions. Defined in 2015 by the United Nations General Assembly, the SDGs consist of 17 global goals with a 2030 deadline. All 193 countries in the UN General Assembly adopted this resolution. We realize these goals cannot be met without support from the global business community. Our approach to supporting the SDGs is to focus on the goals where we can have the most impact, while screening and implementing actions that contribute to the other goals as well. To identify the SDGs where Barco can make the most impact- ful dierence, we start from Barco’s strategy and material topics. We have selected six SDGs that are closely linked to Barco’s high material topics and the overall Barco strategy: • SDG 3: Good health & well-being: Ensure healthy lives and promote well-being for all at all ages • SDG 7: Aordable and clean energy: Ensure access to aordable, reliable, sustainable and modern energy for all • SDG 8: Decent work and economic growth: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all • SDG 9: Industry, innovation and infrastructure: Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation • SDG 12: Responsible consumption and production: Ensure sustainable consumption and production patterns • SDG 13: Climate action: Take urgent action to combat climate change and its impacts UN SDGs HIGH MATERIAL TOPICS Barco Integrated report 2020 10 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Our sustainability performance Barco Integrated report 2020 11 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Planet Our ambition We will reduce our environmental footprint and those of our customers. 1. Targets 2020 Targets & KPIs Reduce the carbon footprint of our own operations by 20% (baseline 2015) Reduce the energy footprint of our products by 25% (baseline 2015) Ensure that at least 25% of new products released have the Barco ECO label + 100% of new products released will be ecoscored + no new products will have a D score -20% -25% 25% STATUS 2020 -34% Achieved -27% Achieved 48% Achieved * Products = hardware products ** ECO label = products with A ecoscore or higher 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 11 4 12 MATERIAL TOPICS Barco Integrated report 2020 12 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2. New targets 2023 Reduce the carbon footprint of our own operations by 35% (baseline 2015) • Reduce the energy use of our own operations by 15% (baseline 2015) • Zero waste to landfill • 80% recycling rate in own operations • 75% of new products released have a Barco ECO label Reduce the energy footprint of our products by 25% (baseline 2015) Ensure that at least 70% of our revenues comes from products with the Barco ECO label -35% -25% * 70% PRIMARY TARGETS STATUS 2020 SUPPORTING TARGETS -34% -27% 23% * This target remains the same for 2023 as for 2020. We recognize that, in the near future, it will be hard to further reduce the energy footprint of our product base, as the adoption of laser projectors will slow down, and customers tend to prefer video wall technology that is less energy ecient. Commitment to Science Based Targets Barco is committed to setting Science Based Tar- gets as a way to further solidify our ambitious sustainability goals. We commit to aligning our business with the most ambitious aim of the Paris Agreement: to limit the global temperature rise to 1.5°C above pre-industrial levels. Our carbon reduction targets have been submitted to and are currently under validation by the Science Based Targets initiative. -22% 48% STATUS 2020 STATUS 2020 29% 52% ** Products = hardware products *** ECO label = products with A ecoscore or higher Revenues from hardware products 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 11 4 12 MATERIAL TOPICS Barco Integrated report 2020 13 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 3. Planet (key) performance indicators MATERIAL TOPIC INDICATOR UNIT TARGET 2023 TARGET 2020 2020 2019 2018 Climate change & energy Greenhouse gas emissions of our own operations tCO e/mio € revenues . . . . . Energy consumption MWh/mio € revenues . . . . % energy consumption from renewable sources % . . . % electricity use from renewable sources % . . . Renewable electricity production MWh/mio € revenues . . . Waste management Total solid waste tonnes/mio € revenues . . . % hazardous waste of solid waste % . . . Recycling & composting rate of solid waste % % of solid waste to landfill % Water withdrawal m / mio € revenues . . NA Product stewardship % ecoscored products of total new products released % *** % of new products released with Barco ECO label (hardware) % *** % revenues from products with Barco ECO label (hardware) % NA *** % of active components covered by Full Material Declarations % NA Energy efficiency index of sold products # . . . . . Greenhouse gas emissions of sold products (i.e. Product use emissions) tCO e/mio € revenues . . . % of new products released with recycled plastics (hardware) % NA NA % of countries where products are sold with Barco return and recycling programs % NA NA * For definitions on indicators: see glossary ** Calculation of greenhouse gas emissions is explained on the next page *** Ecoscoring has been rolled out in 2019, therefore 2018 data are not available Barco Integrated report 2020 14 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 4. Other indicators MATERIAL TOPIC INDICATOR UNIT TARGET 2023 TARGET 2020 2020 2019 2018 Climate change & energy greenhouse gas emissions scope tCO e/mio € revenues . . . greenhouse gas emissions scope tCO e/mio € revenues . . . greenhouse gas emissions scope incl product use emissions tCO e/mio € revenues . . . Total greenhouse gas emissions tCO e/mio € revenues . . . Total greenhouse gas emissions tCO e , , , MEASURING CARBON FOOTPRINT OF OUR OWN OPERATIONS Methodology • Bilan Carbone ® methodology • Compliant with ISO 14064 standard • Sources of emission factors: emission factors from internationally recognized emission factor databases, ADEME, GHG Protocol, IEA, suppliers specific for electricity Scope • Technical: all GHG such as carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), refrig- erants (HFCs, PFCs, CFCs) are converted into CO 2 equivalents using Intergovernmental Panel on Climate Change (IPCC) 100-year global warming potential (GWP) coecients • Boundaries: operational (vs. equity) approach, as it better defines the boundaries of influence • Geographical scope: main production facilities and oces in Belgium, China, Italy, Germany, India, Norway, Taiwan and US, accounting for 85% of Barco’s total headcount (3,211 FTEs) in 2020 Baseline • For targets and performance comparison, Barco selects FY 2015 as a baseline MEASURING OUR CARBON FOOTPRINT RELATED TO PRODUCT USE EMISSIONS Methodology • GHG Protocol Methodology Formula to be used: ∑ (total lifetime expected uses of product × number sold in reporting period × electricity consumed per use (kWh) × emission factor for electricity (kg CO 2 e/kWh)) Scope • Emissions based solely on the energy consumption of the product (excluding the embodied energy of components, end-of-life emissions, etc.) • Approx. 90% of the products covered (in terms of sales volume) in 2020 Barco Integrated report 2020 15 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Our roadmap towards sustainable impact: key initiatives and action plans 2020 is the first year that Barco is taking an integrated approach to reporting, explaining how the organization creates value over time – in a wide range of fields. To ensure that our 2020 Integrated report includes the 2020 results for each and every capital described, we decided to accelerate data collection and processing on our performance relating to ‘planet’. Thanks to these eorts, the 2020 results for planet were available upon drafting the 2020 Integrated report – while in previous years, we always reported on the year before. Below is an overview of our results for planet in 2019 as well as 2020. From 2021 onwards, planet results will be on par with all the other financial and non-financial results in the Integrated report. Barco Integrated report 2020 16 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 1. Footprint of our own operations 2015 44.2 Energy consumption, split by source (2020) Energy consumption in own operations (MWh/mio € revenues) 10 20 30 40 2016 39.9 2017 41.7 2018 41.1 2019 33.7 2020 34.3 TARGET 2023 37.6 54% renewable 46% non-renewable In the beginning of 2020, we switched to renewable elec- tricity at the majority of our sites. The result: 97% of our total electricity consumption is from renewable sources - a major improvement compared to 2019 (53% renewable). When look - ing at Barco’s total energy consumption (elecricity and fuel use) 54% is from renewable sources. In 2020, the company fleet’s fuel use dropped significantly, as working from home became the norm in the covid-19 context. We realize that fuel use will go up again after the pandemic, but expect that hybrid working is here to stay, which will result in reduced fuel use in the future. We closed 2020 with energy consumption (including fuel use for company cars) amounting to 34,3 MWh/mio € revenues. That is a 22% decrease compared to our 2015 baseline, mean- ing we have already reached our target of 15% reduced energy consumption by 2023. 2020 carbon footprint reduction target for own operations achieved in 2019 In 2016, Barco set an ambitious sustainability goal: to reduce the carbon footprint of our own opera- tions by 20% compared by 2020. We reached that goal one year in advance. In 2019, we managed to strongly reduce our car- bon emissions in mobility and infrastructure, with a year-on-year reduction of 13% and 12% respectively compared to 2018. The main drivers are a strong reduction of business travel and the centralization of manufacturing activities (including the reloca- tion of production activities to the state-of-the-art factory in Kortrijk). 97% of Barco’s electricity consumption is from renewable sources TARGET -15% 1.1 Energy use in our own operations In 2019, Barco drastically its energy consumption in Belgium due to the move of our production activities from an older site to the state-of-the-art factory in Kortrijk. Also in our US oces, several measures were taken to cut energy consumption, such as installing LED lighting, implementing motion-activated light switches, enabling sleep and power-saving modes on most of the demo equipment and using smart power strips that turn o equipment when not in use. More than investing in eco-friendly equipment, we also work on raising awareness and train our employees on the importance of energy savings. Through our internal communication channels, employees regularly receive tips on how to save energy. Energy is also a topic in the mandatory Sustainability Standards@work training and the Compliance Challenge. Barco Integrated report 2020 17 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 1.2 Greenhouse gas emissions due to our own operations There are three main sources of greenhouse gas emissions in our own operations: logistics, mobility and infrastructure. On this page we share the consolidated numbers for our own operations. On the following pages, we zoom in on the num- bers by source and on the actions for each source. We are proud that Barco achieved the -20% target by 2020 (baseline 2015) in 2019. 2020 was an exceptional year, with dierent impacts on our greenhouse gas emissions (see the following pages) as well as on our revenues. The overall relative reduction in green- house gas emissions from our own operations is -34% versus the 2015 baseline. TARGET -35% Carbon footprint of own operations 2015–2020, inl. 2023 target (All figures in tCO 2 e/mio € revenues) 2023 52.3 TARGET 2015 80.5 10 20 30 40 50 60 70 80 2016 73.1 2017 70.6 2018 67.9 2019 64.3 2020 53.4 -34% Greenhouse gas emissions from our own operations (in tCO 2 e/mio € revenues) decreased by 34% between 2015–2020 Logistics Mobility Infrastructure Barco Integrated report 2020 18 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 1.2.1 Greenhouse gas emissions from logistics The major source of greenhouse gas emissions from our own operations is related to logistics, i.e. the transport of incoming goods and outgoing finished products. In 2019, we accelerated the following initiatives: • Healthcare division: by moving medical display manufacturing for the Chinese market from Italy to our new manufacturing plant in China, CO 2 emissions drop. • Entertainment division: to avoid long-haul air transport, projector engines for US customers are repaired locally in our Atlanta facility instead of in Belgium. • Enterprise division: by opening a new bonded warehouse hub in Taiwan, we can store our latest LCD displays until there is enough demand to fill a sea container. The displays are closer to our APAC customers too. In 2020, the covid-19 pandemic disrupted our supply chain, but we managed to keep our relative CO 2 emissions at the same level as 2019. The split between air and see shipments was the same as in 2019: • 56% of Barco’s total tkms (Metric tonnes * distance shipped) has been shipped by plane. • 41% of Barco’s total tkms is transported via deep-sea shipping, which is responsible for less than 1% of the CO 2 footprint in logistics. Logistics was responsible for 77% of Barco’s own CO 2 emis- sions in 2020. Overall logistics related greenhouse gas emissions dropped by 21% between 2015 and 2020. Other initiatives in logistics: Next to avoiding transport and shifting towards more environ- mentally friendly transport modes, we continue to work on: • Re-designing packaging for logistics: when designing new products, we aim to design smaller and lighter packaging, in order to reduce the volume and/or the weight of high-running appliances. Packaging/logistics is one of the four domains in our ecodesign program. • Modular product design: as more new Barco products are built on existing platforms, only the final customization has to be done in a local warehouse. In this way, we can ship larger volumes to overseas destinations up front by sea. • Every transport and warehousing tender includes a sustainability clause: logistics suppliers are expected to inform us about their sustainability plans and initiatives. This information is considered in the overall decision matrix and, as such, in our supplier selection procedure. In addition, we add sustainability clauses to contracts, driving our suppliers to advance their eorts to cut carbon emissions. Carbon footprint of logistics 2015-2020, incl. 2023 target All figures in tCO 2 e/mio € revenues TARGET -35% Breakdown of logistics emissions by source (2020) 2023 34.0 TARGET 2015 52.2 10 20 30 40 50 2016 45.3 2017 43.0 2018 41.6 2019 41.4 2020 41.3 89% Air (long haul > 4000 km) 7% Air (middle haul) 3% Air short haul < 1000 km 0.6% Sea 0.5% Road 0% Rail -21% Logistics related greenhouse gas emissions dropped by 21% between 2015–2020 Barco Integrated report 2020 19 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 1.2.2 Greenhouse gas emissions from mobility The second-largest source of greenhouse gas emissions from our own operations is mobility. This includes business travel, the use of company cars and commuting. In 2019 the share of mobility in Barco’s CO 2 emissions from own operations was 24% - most of which was caused by busi- ness travel. We managed to further cut back on business travel by promoting virtual collaboration and training and invested firmly in our hybrid working capabilities by, for example, install- ing Clickshare Conference in many of our meeting rooms. In that sense, we were well prepared for the lockdown in 2020. 2020 was an exceptional year featuring severe travel restric - tions, resulting in a large drop in our mobility related emissions. The share of mobility in Barco’s own CO 2 emissions was only 16% in 2020. Overall mobility related greenhouse gas emissions dropped by 56% between 2015 and 2020. We realize that this is a temporary picture as business travel and commuting will increase again. In order to be prepared for a future where our employees will commute again more regularly, we took the first steps in electrifying our fleet in Belgium. 2015 19.1 2023 14.8 TARGET 2016 18.9 2018 17.7 2019 15.4 2020 8.3 10 20 2017 19.3 Carbon footprint of mobility 2015-2020, incl. 2023 target All figures in tCO 2 e/mio € revenues Breakdown of mobility emissions by source (2020) TARGET - 23% 38% Business travel 32% Home-work commuting 30% Company cars -56% Mobility related greenhouse gas emissions dropped by 56% between 2015–2020 Barco Integrated report 2020 20 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Training during travel bans? Yes, we can, thanks to weConnect In 2020, severe travel restrictions had a positive impact on our carbon footprint. Yet, engaging with our partners and resellers became dicult.As they were no longer able to visit our training centers or the number of participants to in-person courses was very limited in 2020, we brought our courses to them: thanks to the weConnect platform, Barco University successfully oered a substantial part of its course oering in the form of shorter, topical virtual classes. Participants are impressed and feel truly ‘connected’ with both the teacher and their fellow participants: • direct visual and audio connectivity with all participants ensures a ‘near in-class’ experience, enabling teachers to guide participants through hands-on parts of the training; • whiteboarding and annotation and quick polling/quizzing make sessions interactive; • thanks to multiple camera feeds, students get a clear view of more practical aspects, for example, when we cover more hardware-related training topics. In 2020, over 2,000 external participants from our worldwide partner and reseller network took Barco University courses via weConnect. The virtual approach helps us keep our partners and resellers “connected” with Barco as well as keeping them “competent” when it comes to the Barco-powered solutions they keep introducing to their markets! 2,000+ participants from our worldwide partner and reseller network followed virtual courses via weConnect, thus restricting business travel. Barco Integrated report 2020 21 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 1.2.3 Greenhouse gas emissions from infrastructure The third source of greenhouse gas emissions from our own operations is infrastructure. This includes emissions from the use of electricity, fossil fuels (excl. company cars), the treatment of waste and the leakage of refrigerant gases from cooling equipment. In 2019 we took several measures to further reduce the carbon footprint of our facilities: • Centralizing manufacturing activities: in Belgium, we finalized the relocation of our production activities from the old Kuurne site to our state-of-the-art, energy-ecient manufacturing plant in Kortrijk. • Switching to green electricity at our site in Atlanta. In 2020 our emissions decreased drastically because • We extended the renewable electricity procurement program to the majority of our sites, including US, China, India, Italy and Norway. • We installed solar panels on the roof of our R&D site in Germany. • We took several measures to reduce energy consumption in the US sites, such as enabling sleep and power saving modes on most of the demo equipment, implementing motion light switches, using smart power strips that turn o equipment when not in use and installing LED lighting in most locations In 2020, the share of infrastructure in Barco’s own CO 2 emis- sions was 7%, which was mainly attributable to the use of fossil fuels. Overall infrastructure related greenhouse gas emis- sions dropped by 59% between 2015 and 2020. Plans to further reduce emissions from infrastructure in 2021 include moving to more energy-ecient buildings. 2015 9.2 2023 3.1 TARGET 2016 8.9 2017 8.3 2018 8.5 2019 7.5 2020 3.8 5 10 Carbon footprint of infrastructure 2015-2020, incl. 2023 target All figures in ton tCO 2 e/mio € revenues TARGET - 66% Breakdown of infrastructure emissions by source (2020) 20% Electricity 43% Fossil fuels 18% Refrigerant losses 18% Waste -59% Infrastructure related greenhouse gas emissions dropped by 59% between 2015–2020 Barco Integrated report 2020 22 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 1.3 Circularity in our own operations First and foremost, we aim to keep waste from operations to a minimum, especially non-sorted waste. Our employees are trained on how to separate waste using dierent bins. Waste recycling is part of our 5S audit sys- tem, where the presence of the dierent waste collectors is checked. We also work hard to reduce the amount of waste generated by the packaging of incoming components and products. Suppliers receive guidance on how to reduce pack- aging and which packaging materials Barco prefers in order to raise recycling rates. By the end of 2020, total solid waste was 2.5 tonnes/mio € revenues, with a recycling rate of 52%. The negative evolution in both figures compared to 2019 (in 2019 total waste was 2.3 tonnes/mio € revenues and recycling rate was 61%) is mainly caused by construction works at our US sites and new local depot repair activities at the Atlanta site. By 2023, we aim to: • recycle 80% of operational waste • send zero operational waste to landfills In 2021, we aim to reduce landfilling by 50% compared to previous years. iGemba: employee-driven improvement ideas to continuously enhance our environmental footprint in operations One of our culture blocks is “We look for the better way”. So, continuous improvement is very important at Barco. It is also a requirement of the ISO 14001 Environmental Management System. In 2020, we celebrated the 10 th anniversary of iGemba, a program that fits perfectly within our ‘continuous improvement’ commitment, as it encourages oper- ators to share their own improvement ideas. “These employee-driven improvements (EDIs) boost quality, safety and eciency and play an important role in decreasing our environmental footprint,” explains Marc Cattoir, Continuous Improvement Coach. How iGemba works Marc: “Operators fill in an EDI card on which they describe their challenge and proposed solution. Every quarter, the three best ideas are displayed on the production floor. In this way, we create a culture of continuous improvement and inspire each other to share new ideas.” New Barco employees are immersed in the philoso- phy of iGemba during initial training. Every two weeks during team meetings, everyone is encouraged to share their ideas or proposals with their colleagues and managers. A couple of examples “The Enigma boards, which are mounted onto the HD-SDI boards, lose power when the projectors run, which reduces their lifetime. Until recently, there was no way to recharge the Enigma. When it reached end of life, we had to dispose of the battery and replace the board. So, I developed a power supply to charge the board and re-use it over and over again.” Steven Christiaens, Repair specialist, Kortrijk “We came up with a very simple solution to safely remove residues of glue from our digital mirror device (DMD). By using a caliper when scraping the surface, our hand now rests on the table. That’s safer, more ergonomic and the glue is more easily removed.” Vanessa Sabbe, Mount optical assemblies, Kortrijk * Barco obtained the ISO 14001 certificate for Barco sites in Belgium, China, India and Italy Barco Integrated report 2020 23 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2.1 Energy performance of our products The energy our products consume on our customers’ prem- ises has a major impact on the environment. Improving the energy performance of our products is therefore one of our main priorities. At the same time, market trends and customer preferences are shifting towards ever-higher performance (brightness, resolu- tion, etc.), which requires higher energy consumption. That’s why we measure energy consumption relative to brightness, resolution, luminance, etc. as watt/delivered capability. In 2016, we set the target of reducing the energy footprint of our products by 25% by 2020 (compared to 2015). We have reached that target: the average energy eciency index decreased by 27% between 2015 (baseline) and 2020, The dominant driver of this reduction is the growing adoption of laser projectors, which consume far less power (-50% to -150%) than traditional lamp-based systems. We recognize that, in the near future, it will be hard to fur- ther reduce the energy footprint of our product base, as the adoption of laser projectors will slow down, and customers tend to prefer video wall technology that is less energy e- cient. Both trends will probably negatively impact the energy eciency index. That is why our target for 2023 stays at -25% compared to 2015. 2. Footprint of our products Exceeding 2020 targets on energy footprint and product ecodesign Our focus on improving the environmental foot- prints of our products stayed sharp in 2020. Thanks to the full implementation of ecodesign in our New Product Introduction process and the high engage- ment of our R&D teams, 48% of new products bore the Barco ECO label upon launch – an impressive increase compared to 2019 and also exceeding the 2020 target of 25%. In addition, a favorable product mix with a high proportion of laser projectors and laser rear-pro- jection video walls led to a 27% drop in the energy footprint of our products versus base year 2015. This too is exceeding the 2020 target (25%). of new products released in 2020 have the Barco ECO label 48% * For definition of energy eciency index: see glossary TARGET -25% Energy eciency index* of sold products 2023 0.75 TARGET 2015 1 0.25 0.50 0.75 1 2016 1.04 2017 0.95 2018 0.86 2019 0.80 2020 0.73 -27% The average energy footprint of sold products fell by 27% between 2015–2020 Barco Integrated report 2020 24 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2.2 Greenhouse gas emissions of our products (product use emissions) Product use emissions are emissions resulting from the energy use of sold Barco products on our customers’ premises. They are by far the largest source of emissions for Barco. In 2020, total product use emissions amounted to 307 tCO 2 e/ mio € revenues. This is 85% of our total carbon footprint. The largest portion of product use emissions is generated by our projectors (Entertainment division). Product use emissions decreased by 56% between 2015 and 2020. In 2020, the Enter- tainment division was hit heavily by the covid-19 crisis, resulting in less sales of projectors. In 2021 we expect product use emissions to increase again due to the higher projector sales. Breakdown of total emissions of Barco by source (2020) 15% Own operations emissions 85% Product use emissions 2015 698.6 Product use emissions All figures in tCO 2 e/mio € revenues 600 100 200 300 400 500 700 2016 704.7 2017 590.1 2018 480.9 2019 359.0 2020 306.7 Breakdown of product use emissions by division (2020) 34% Enterprise 48% Entertainment 18% Healthcare Barco Integrated report 2020 25 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2.3 Ecodesign Improving the energy performance is just one way of lower- ing the ecological footprints of our products. Apart from this, we aim to improve our products on other aspects as well: use low-impact materials, opt for ecofriendly packaging, and improve the way our products can be maintained, refurbished, upgraded and eventually recycled. We drive eco-friendliness in product creation through our ecodesign program. TARGET 70% Ensure that at least 70% of our revenues comes from products with the Barco ECO label + 75% of new products released have a Barco ECO label** 23% of our revenues comes from products with the Barco ECO label * Products = hardware products ** ECO label = products with A ecoscore or higher *** Revenues from hardware products 2.3.1 Barco’s ecodesign journey 2015–2018 • Adopt the Barco Substances List • Ensure 100% of Barco’s products comply with REACH and RoHS • Reduce the use of halogens and PVC • Start the ecoscoring initiative (3 pilot projects) 2019–2020 • Implement power management solutions in all product types • Pro-actively enforce RoHS 10 compliance down our supply chain • Actively phase out phthalates, beryllium, arsenic and antimony • Validate our ecoscoring methodology by a third party • Fully roll out ecoscoring across Barco • Start using plastics that contain post-consumer recycled content • Embed revised EU ecodesign requirements for electronic displays and for computer servers and data storage products 2021 • Proactively select parts that do not employ RoHS 10 exemptions. • Create products that meet the objective upgradability and circularity criteria in the ecoscore tool V5 Continuous endeavors • We proactively update our Barco Substances List with substances to be declared, phased out, or banned, ahead of regulations. This includes substances used in our products as well as packaging. A team of in-house experts checks the list and challenges and corrects suppliers when needed. The list of substances, which is frequently updated, can be found on our website. In 2020 we put special emphasis on the use of chemicals in adhesives. • We proactively look for opportunities in ecodesign such as low-impact materials, energy-eciency improvements, enhancing repairability, modularity etc. • We train internal and external stakeholders (R&D, NPI project managers, product managers, suppliers) in ecodesign and the ecoscoring tool. 23% Barco Integrated report 2020 26 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2.3.2 Ecoscoring: the tool to evaluate the eco-friendliness of our new products In 2017, we continued and refined our ecodesign journey by devising an objective scoring methodology to determine the environmental performance of new products. The next year, we launched a first pilot project. To improve the value of our tool for external stakeholders, we submitted it to an external audit under the framework of the ISO 14021:2006 standard (limited assurance) in 2019. In this way, we aim to ensure that our ecoscoring methodology is complete, reliable, objective and based on relevant product aspects. In 2020, the tool was updated to the more stringent V5 ver- sion – with more objective criteria – and revalidated under ISO 14021:2006. Highlights of the new tool include: push for bulk shipment, increased transparency on presence of critical raw materials (as defined by the European Commission), EU conflict minerals regulation, halogen-free materials, minimum content of recycled metals and further alignment with external ecolabels and competition. Ecoscoring has now become an integral part of our NPI (New Product Introduction) process. At the start of each new project, multidisciplinary teams define ecoscore product spec- ifications, which are then assessed at predefined stage gates. In 2020 we successfully ecoscored 100% of newly devel- oped platforms across all Barco R&D development centers worldwide. No products where scored D, and 48% of new products released received the Barco ECO label. This means that we reached the 2020 target to have at least 25% of prod- ucts launched with the Barco ECO label. And we continue to raise the bar. Our target for 2023 is that at least 75% of new product releases should have the Barco ECO label and that at least 70% of our hardware revenues comes from Barco ECO labeled products. In 2020, revenues coming from these products was 23%. How ecoscore works The ecoscore is divided into four environmental domains: • Energy • Material use • Packaging & logistics • End-of-life optimization. For each domain, a score is calculated assessing the product on several relevant topics. The assessment is performed against objective criteria inspired by future regulations, industry standards, customer expectations and voluntary ecolabels. The domain score ranges from D (lowest score) to A (highest score). Based on the four domain scores, the product receives a final score ranging from D to A++. The Barco ECO label is granted to products with an A++, A+ or A ecoscore. These products have: • an A subscore on energy, and on at least one other domain • no domains with a D subscore • in case one domain has a C subscore, the three other domains need to have an A score MATERIAL USE • Full Material Declarations • Critical Raw Materials • Halogens • Product weight • Recycled materials PACKAGING & LOGISTICS • Recyclability • Recycled content • Optimized packaging design • Optimized logistics & stacking • Limit accessories waste ENERGY • Power supply eciency • Performance eciency • Standby mode • Power management END-OF-LIFE OPTIMIZATION • Lifetime extension • Repairability (service model, spare parts) • Design for disassembly/repair • Modularity/ upgradeability Learn more about our ecoscoring methodology on our website Barco Integrated report 2020 27 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Enabling eco-conscious cinema experiences with new A+ projector range The Barco projection division is on a roll when it comes to sustainability. The new SP2K laser projector is the second projector range to receive an A+ ecoscore. More than bringing numerous benefits to enhance the moviegoer experience and creating peace of mind for exhibitors, the projector series also meets high eco requirements: • Energy A : The SP2K smartly manages its power consumption and is an energy-ecient product thanks to its low-power standby-mode and ECO-mode – great for the environment, but also for the utility bills. • Packaging B : The packaging of the projector and its peripherals is kept to a minimum. Moreover, the design is further optimized for ecient logistics and transport. • Materials A : After the release of the other Series 4 projectors, Barco raised the bar even more in its use of eco-friendly materials. The SP2K projector is the first Barco cinema product with a housing that’s made of halogen-free plastics and contains post-consumer recycled plastics. • End-of-life optimization A : Just like its 4K nephews, the SP2K is designed with maximum modularity in mind to enable serviceability, upgradeability and lifetime extension. The SP2K projector is the first Barco cinema product with a housing that contains recycled plastics. ENERGY- EFFICIENCY A MATERIAL USE A B END-OF-LIFE OPTIMIZATION PACKAGING & LOGISTICS A A ++ A + A B C D Barco Integrated report 2020 28 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE First A+ ecoscore for a Barco medical display system The A+ ecoscore obtained by the new Nio Fusion 12MP demonstrates that Barco is advancing well in making sus - tainability a core aspect of our product development. The following aspects contributed to the score: • Energy A : The Nio Fusion 12MP is praised for its overall energy eciency and has a power management function enabled by default. • Packaging A : Optimized for transport and customer experience, the contents of each package is adapted to the destination region, reducing carbon footprint and waste. • Materials B : We strive to avoid using materials that are harmful to people and nature. Only halogen-free materials are used. • End-of-life optimization B : Although it lasts for many years, the Nio Fusion 12MP is designed with eventual disassembly in mind, contributing to an environmentally friendly end-of-life. Albert Xthona, product manager diagnostic displays, com- ments: “We strive to incorporate learnings from previous medical devices, such as the Coronis Fusion 6MP which received an A ecoscore, and then add further improvements, such as those found in the Nio Fusion 12MP. Our focus on the unboxing experience and reducing discarded components was hard work, but produced a result that each customer actually feels.” ENERGY- EFFICIENCY A MATERIAL USE A B END-OF-LIFE OPTIMIZATION PACKAGING & LOGISTICS A A ++ A + A B C D Our focus on the unboxing experience and reducing discarded components was hard work, but produced a result that each customer actually feels. Albert Xthona Product manager diagnostic displays Barco Integrated report 2020 29 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Latest laser technology further optimizes the ecoscore of RGB Laser ODL video walls RGB Laser projection is the most energy-ecient technology for rear-projection cube (RPC) video walls. That is why Barco’s ODL range was already a high-runner when it comes to ecode- sign. With the introduction of the latest generation of RGB lasers, performance got even better, resulting in an A ecoscore. • Energy A : With highly energy-ecient laser projection technology, backed by the needed design optimizations (including a standby/o-mode, a power management function and a high power supply eciency), the ODL engine minimizes energy consumption. • Packaging B : The packaging design was optimized, and only the essentials are shipped – which reduces the size of the packaging. • Materials B : The ODL range excels in the use of recycled materials. • End-of-life optimization A : An ODL video wall is easily repairable, has all spare parts available for a long time, and can drastically extend its lifetime by simply introducing a new projection engine. Long-term maintenance contracts (up to 10 years) are available for RGB laser RPC video walls. ENERGY- EFFICIENCY A MATERIAL USE A B END-OF-LIFE OPTIMIZATION PACKAGING & LOGISTICS A A ++ A + A B C D An ODL video wall has a really long lifetime: simply introduce a new projection engine and the video wall will last for many more years. Barco Integrated report 2020 30 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2.4 Circular solutions The circular economy is a focus area in Barco’s sustainability strategy. Through smart design and services, we always aim to reduce waste and retain the highest utility and value of products and components. 2.4.1 Circular product design To enable circular solutions for our customers, we engage in circular design. Several criteria are embedded in the ecodesign program to improve the circularity of our products, such as longevity, repairability and recyclability, as well as on material eciency. In 2020, we ramped up the use of post-consumer recycled plastics in our products. 4% of new products launched contained post-consumer recycled plastics, and we aim to increase that figure significantly in the coming years. The ecodesign program also focuses on improving circularity of packaging. Product packaging is evaluated against criteria such a recyclability and (re)use of recycled materials. Next to our internal circular design eorts, we are active in the CEN-CENELEC Joint Technical Committee 10 on energy-re- lated products. The goal of this committee is to establish an objective measuring methodology for repairability and recy- clability of products. As an active member, we contribute to future standards that will improve the circularity performance of products in Europe. Barco fully supports setting out clear, objective criteria that drive the industry toward more circular products. 2.4.2 Product recycling services Dealing with electronic waste is a concern for industry and society. E-waste is one of the fastest growing waste streams, making it important for our products to be recycled at end of life. This is the very basic first step in a circular economy. For every product, we provide a user manual, which includes information for customers on how to handle the product at end-of-life stage, and a recycling passport, which oers recy- cling information to recyclers. We allow our customers to turn in their used products free of charge to our recycling partners. This oering was started up in Europe in accordance with WEEE legislation and has been expanded into important markets in Canada and the US. We participate in and oer product collection and recycling programs in 26% of the countries in which we sell products. Where no structured program is in place yet, we oer ad hoc recycling and collection services. We demand that all our recycling partners are ISO 14001 certified and comply with legislation regarding the prohibition of e-waste export. Read more on our website. In 2019, we started a pilot project on the SCIP database (Sub- stances of Concern In articles as such or in complex objects (Products)) reporting of ECHA (the European Chemicals Agency), which became mandatory in 2021 under the EU Waste Framework Directive (WFD). This publicly accessible database gives recyclers insights about which substances are used and provides market safety authorities with policy guide- lines. Barco was proactively involved in testing the prototype database through the SCIP IT user group and our industry partners. 208 product families were registered prior to the deadline, making Barco a pioneering company when it comes to providing transparent and up-to-date info to customers and regulators. 2.4.3 Extending circular service oerings We realize that before products are recycled, more valuable cir- cular opportunities need to be grasped. That’s why we’re also looking into solutions for product life extensions, including upgrades and predictive maintenance options. In addition, we are starting to explore oerings where customers get access to – rather than ownership of – products. This opens new opportunities for the circular economy. 4% 4% of new products launched in 2020 contained postconsumer recycled plastics. We aim to increase that number significantly in the coming years. Barco Integrated report 2020 31 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Circularity in action: Barco’s rear- projection cube video wall upgrades Rear-projection video walls consist of multiple cubes stacked in a matrix structure. Each cube contains a projector (fac- ing upwards), a mirror reflecting the image, and a projection screen integrated in a mechanical structure. While electronic parts, cooling units and light sources (although they can be separately replaced) age, the mechanical structure, mirror and screens can last a lot longer. That is why Barco oers its customers the possibility to introduce a new projection module into their legacy video walls. This not only upgrades the system to the latest solid-state projection technology, but also minimizes waste and eort by leaving the mechanics, screens and mirrors untouched. This fast, easy and low-cost operation is oered in both CAPEX and OPEX models. In 2020, 25% of installations were upgrades of existing rear-pro- jection cubes. What’s more, the legacy projection engine and lenses are, under certain conditions, also being refurbished. For example, in 2020, 148 lenses were refurbished from rear-pro- jection cubes. 25% of video wall installations in 2020 were upgrades of existing rear-projection cubes. Barco Integrated report 2020 32 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE People Our ambition We invest in sustainable employability by creating the right conditions for our employees to have an engaging, enriching and healthy career at Barco. We do this by encouraging our people to learn and develop themselves and by creating the conditions for a healthy working environment – both physically and mentally. We engage in creating an inclusive workplace that embraces the diversity of our people. Targets and KPIs 72% male 28% female 12.1% The Americas 54.4% EMEA Number of employees Gender Geographical Per functional group 3,6642018 3,6362019 3,3032020 * Reported in heads, excluding temporary workforce(Database Corporate Associates per //) 16.7% Sales 28.5% Research & development 1.4% Quality, supply chain & support 1.8% Procurement 29.6% Manufacturing & logistics 4.9% Marketing 8.9% Customer service 0.7% Customer projects 7.5% Administration 33.5% Asia-Pacific 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 11 4 12 15 17 16 14 MATERIAL TOPICS Barco Integrated report 2020 33 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 1. People (key) performance indicators * MATERIAL TOPIC INDICATOR UNIT 2020 2019 2018 Employee engagement Voluntary turnover rate % . . . Number of iGemba improvement suggestions # , , , Number of iGemba improvement suggestions per operator # . . % implementation % Employee net promotor score (NPS) # NA NA NA Learning & development % of vacancies filled internally % % of employees receiving training % Average training hours/employee hours . . . Average training investment/employee € NA % of leaders in annual talent development review % NA Employee health, safety & well-being % of employees in long-term sick leave (> yr) % . . . Lost time injury frequency rate # . . . Lost time injury severity rate # . . NA Diversity & inclusion % women Barco overall % . . . % women senior mgt % . . . % employees < yrs % % employees between and % % employees > % Number of nationalities at headquarters # Labor practices & human rights % of employees covered by formal collective agreements % * Figures reported are in heads (not FTE), Cinionic employees are excluded. For definitions on indicators: see glossary Barco Integrated report 2020 34 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE To me, what really marked 2020 was the agility, creativity and resilience shown by of each of us, individually and as a company. Jan De Witte CEO Our roadmap towards sustainable impact: key initiatives and action plans Introduction People are key to the success of our company. This is a truth that is even more important in challenging times. As the entire world was hit by covid-19 in 2020, so were the many Barco teams around the world. But we all try to move beyond this massive disruption as well as possible. Minimizing and bal- ancing the impact of the corona crisis on our employees has been a global priority of the whole company in general, and the HR department in particular. HR invested heavily in timely communication, in oering support and insights on how to engage in strong employ- ee-manager relations, and in staying connected with(in) teams in a remote and/or hybrid work system. In addition, everyone worked hard to ensure both the safety and the well-being (both physically and mentally) of our employees during the pandemic – without, of course, neglecting running projects. With many challenges still ahead, we want to keep delivering the best possible working condi - tions to our people. This means ensuring employee engagement, providing a safe and healthy workspace, oering continuous training and development oppor- tunities and making diversity and inclusion priorities. A human-centered approach to reorganizations More than complying with legal reg - ulations when terminating a contract, Barco always tries to exceed these, taking a human-centric approach to reorganizations – in line with our ‘we care’ company culture. We follow best practices and ensure a fair approach, which varies according to the region. In many cases, we oer our former employees help with their career transitions or provide outplacement services, guiding them towards new jobs outside the company. In spite of our efforts to use tem- porary work arrangements and economic unemployment measures for both white and blue collars where possible, the covid-19 crisis led to a reduction in our workforce. Between 150 to 200 people were impacted, of which approximately 50 people were redeployed within the company. In addition, the Barco factory in Taiwan, where approximately 250 people were employed, was closed, as we decided to outsource the UniSee LCM compo- nent that was produced there. We communicated transparently on the why, what and how of the changes via meetings, our intranet and other dedicated channels, taking care to always inform internal stakeholders first. Only after explaining the back- ground, the content and the scope of the program to social partners did we make announcements public. We ensured a timely engagement with employee representatives around the world to start constructive dialogues. Aware of the impact that eventual lay- os have on our people, we always try to restrict the number of job losses to the absolute minimum. In 2020, all impacted employees received a sev- erance package in line with or above the (legal) standards. Barco Integrated report 2020 35 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE During the 2020 covid-19 pandemic, it was a priority to keep employees engaged and connected to our company and each other, as many were working from home for a significant amount of the time. We therefore continuously invested in initiatives that maximize employee engagement. Pulse sur- veys to measure employee engagement during the covid-19 lockdown allowed us to understand how our employees were feeling and enabled us to identify concrete actions we needed to take to work on to retain a motivating working atmosphere. 1.1 Culture journey Scope: worldwide What: in 2019, Barco embarked upon a journey to rejuvenate its culture – in order to keep leading the pack in today’s rapidly changing world. The journey continued in 2020, despite the dicult circumstances. Status and result: a large group of employees worldwide attended workshops on the five culture building blocks, and we continue to use these building blocks in the internal com- munication channels and in company-wide training sessions . Culture workshops were temporary suspended during the covid-19 lockdown, but will start up again in 2021. 1. Employee engagement Next to ‘we care, we grow’, my favourite block is ‘we team up to win globally’ because I’m a firm believer in global thinking and local action. This leads to real value when combined with our cohesive culture and our focus on diversity and inclusion. For me, the words ‘team’ and ‘globally’ are the keys to this building block. Anthony Huyghebaert Chief HR Ocer We care, we grow It all starts with us. We support each other to be the best we want to be. We build upon our talent to be ready for tomorrow. We ask and give feedback to become stronger. We leave room for vulnerability and expect authenticity and integrity. We learn from each other and invest in our growth, enabled by our leaders. We own our results We get energy from moving forward and winning. We agree on goals and bring together the means to drive for full implementation, in a decisive and transparent way. We include the right people at the right time to make the best call along the journey. We are self-empowered to make a positive impact. We team up to win, globally We build the best team to take the leap from ideas to proof points, to execution. We truly understand what it is we want to achieve together. We regard diversity of background, experience and skills as our strength. We focus on helping each other, across regions & functions, to reach our goals. We celebrate success together and have fun while getting there. That’s how we live our DNA. We look for the better way Continuous improvement brings us where it matters. We are creative and stay curious. We reflect, coach, share to be the leader in our markets. We take time to learn from each other, our mistakes and the world around us. We challenge ourselves and the status quo. We take down obstacles and don’t fear change. We think with the customer Our customer is everywhere. It’s our end-users, our resellers, our colleagues who depend on us to deliver. We prioritize customer value & experience in everything we do. To do so, we embrace our suppli- ers & partners as part of our eco system. We are empowered to explore ideas beyond today’s market needs. We look for scalable & innovative solutions that add value for our customer, be it an internal or an external customer. Living our DNA: Barco’s five culture building blocks Barco Integrated report 2020 36 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 1.2. A new way to measure employee satisfaction Scope: All employees What: in early 2020, Barco moved away from biannual employee satisfaction surveys and introduced ‘Pulse surveys’ instead. These short polls allow us to measure employee sat- isfaction multiple times a year, so we know exactly what lives in the company at a certain point in time. Status and result: the Pulse surveys proved to be a very handy tool to keep up to date on employee engagement during the covid-19 crisis, when many people were working remotely. We conducted two surveys: a worldwide survey linked to the first covid-19 outbreak (April 2020) and a survey for EMEA related upon the return to the oce (end of June 2020). The response rate for the global survey was over 70% and the outcome was very positive: although 75% of respondents worked from home for 100% of the time, engagement and connection to the company was still very high – 85% of our employees indicated they were doing okay or great. iGemba: driving engagement in operations For the 10 th year in a row, Barco encouraged operators to share their improvement ideas via the iGemba pro- gram. iGemba’s goal has remained unaltered since the establishment of the program: to establish a culture of continuous improvement. Improvement ideas can be in many domains: quality, safety, ergonomics, environ- ment, … every suggestion that moves the organization forward is welcomed. In 2020, 3,485 suggestions were made (4 per opera- tor), of which 3,206 were implemented. The drop in suggestions compared to 2019 (6,079) is largely due to the covid-19 situation. 3,485 improvement suggestions were made in 2020 – 4 per operator 85% of our employees participating in the worldwide Pulse survey said they were ‘doing okay or great’ during the covid-19 lockdown Covid-19 Barco Integrated report 2020 37 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Barco India certified as a ‘Great Place to Work’ for two years in a row In 2020, the Great Place to Work ® Institute certified Barco India as one of the ‘Great Places to Work’ in the high-tech category for the second year in a row. “In today’s turbulent times, we believe it’s more important than ever to create a working environment in which people feel safe and cared for. Our team continues to live by our culture building blocks,” said Rajiv Bhalla, managing director of Barco India, upon receiving the award. “This certification confirms that we are moving in the right direction in many of the initiatives taken.” Caring about people is in our company’s DNA. We aim to establish a culture that places top priority on safety and on health, as is declared in our Environment, Health, Safety and Security Pledge. In 2020, our focus was inevitably on covid-19. Furthermore, Barco also engages in health and safety man- agement activities in line with relevant laws, regulations and company-specific issues. 2. Employee health, safety & well-being In today’s turbulent times, we believe it’s more important than ever to create a working envi- ronment in which people feel safe and cared for. Our team continues to live by our culture building blocks. Rajiv Bhalla Managing director, Barco India PPC Planet - People - Communities 38 01 INTRODUCTION 02 OUR SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 OUR SUSTAINABILITY PERFORMANCE 2.1 Making all workplaces safe during the covid-19 pandemic Scope: worldwide What: ensuring health and safety in the working environment has been a top priority in 2020. Because Barco is a global company, with oces and production sites around the world, not every site was in the same phase of the covid-19 outbreak. This enabled us to learn from the experiences of other sites and prepare all needed measures in an agile, upfront way. A global response team was set up which reviewed the world- wide pandemic impact, the legal obligations and the global communication on measures taken within the Barco premises. This team focused on: • Guaranteeing compliance with the (constantly changing) legal requirements in the dierent countries, e.g. working from home; • Constantly monitoring infected employees, and tracing who they could have contacted within the company; • Guaranteeing the supply of protective equipment (e.g. hand gels, mouth masks); • Organizing work in the oce in line with social distancing rules; • Updating travel advice in function of the dierent rules in the dierent countries; • Regularly communicating with employees. Result: preparing and transforming the sites in a fast way allowed us to keep all branches open. Thanks to a wide range of measures aimed at avoiding the spread of the covid-19 virus and warning employees in the case of an infection – from fol- lowing up on people’s health status and continuous tracing to quarantining – contact tracing did not reveal any transmissions of the covid-19 virus on the Barco premises. Barco Integrated report 2020 39 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2.2 Continuous improvement Scope: worldwide What: In line with our ambition for zero accidents, each Barco site creates a Plan-Do-Check-Act cycle based on the group’s requirements for safety and health management. This includes, among other relevant activities, the development of a manage- ment framework in each site governed by a safety and health supervisor, and the implementation of risk assessments. Some important actions for the mid-term are: • Preparing for a health and safety management system in the corporate headquarters: Barco Belgium has started taking the necessary preparations to achieve the ISO45001 standard. The first step was a gap analysis on legislation for health and well-being and an ‘EHS Zero Audit’ conducted by Agoria, the Belgian federation for the technology industry. • Chemical safety is a top priority throughout Barco. Every person using the chemical lab needs to take a training course on chemical safety. All chemicals used must be screened by the chemical safety committee and get a specific Barco number. In this way, we avoid any unapproved chemicals from entering operations. Workstations are equipped with safety instructions which contain the information about chemical substances provided by suppliers. These instructions present the info in a clear and straightforward way, so employees know what the risks are and which safety equipment they should be wearing during their task. For every chemical needed, we look for the safest and healthiest option available. All information about chemicals is available on our BarcoZone intranet. • Ensuring laser safety. The laser safety committee ensures that the strict laser safety procedures are respected and that laser technology is always handled in dedicated rooms. • Placing the safety of Barco operators at the heart of improvement ideas through the iGemba program: for over ten years now, our iGemba program has encouraged Barco operators around the globe to continuously improve processes. iGemba promotes a safety culture as one of the most important values. 2.3 Training and communication Scope: worldwide What: Barco employees and subcontractors working on Barco premises are properly informed and trained for the tasks they are performing – not only on a technical level, but also when it comes to health, safety and well-being. We also actively com- municate on the subject with employees through meetings with labor unions and the joint management-worker Health and Safety Committee at the headquarters. Status and result: a specific mandatory Standards@Work e-learning session on safety was launched in 2020. 99% of white collar employees followed the course. 2.4 Monitoring and measuring Scope: worldwide What: the Health & Safety Oce at the Barco headquarters regularly collects data on occupational accidents (lost-time injury frequency rate + severity rate) at Barco manufacturing and R&D sites. This allows Barco to have a full overview of safety at the company, enabling a global and focused strategy. The data is aggregated in a scorecard, which is presented to the Audit Committee. Next to the metrics, information on the health and safety activities carried out at our sites is collected, providing insights into best practices. Status and result: in 2020, the worldwide lost-time injury fre- quency rate was 2.4 and the lost-time injury severity rate 0.07. Barco Integrated report 2020 40 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2.5 Promoting mental health and well-being Scope: worldwide What: multiple actions are undertaken to promote the health and well-being of all Barco employees: • Barco oers multiple means to help employees balance their time at work and their time at home within the limits of business organization and local legislation. This can include the more flexible organization of working time or a flexible combination of working from home and at the oce. Depending on local legislation, Barco also facilitates additional parental leave and short-term leave to enable employees to care for family members during sickness or to educate themselves. • To uncover and mitigate psychosocial risks, we apply the Health & Well-being Survey. It enables us to assess departments or groups on their potential for psychosocial risks and provides input for action plans. Through dedicated training courses, we help supervisors and HR business partners develop their coaching and leadership skills so they can motivate their teams, communicate openly and spot the warning signs of stress. • At several Barco sites, employees can approach trained confidants at all times. They are the primary go-to people in case of problems with supervisors, psychosocial issues, sexual discrimination and harassment, etc. • Belgian employees and their family members struggling with psychosocial issues can get free professional advice and counsel through the employee assistance program. In times of crisis, they can call a dedicated hotline 24/7 and reach out to a competent professional to receive discrete and confidential advice or support with professional or personal questions or diculties. In addition, we also oer the ‘FitForLife’ training program, which provides tips and tricks (via Skype or phone) to deal with stress in a proactive manner. • As an organization, Barco has established a clear vision and policy regarding the reintegration of employees after long-term sickness. From the moment the employee reports an illness to the moment of reintegration he or she can rely on internal support. When the employee is (partly) fit for work again, the reintegration process starts, which consists of dierent steps and includes close follow-up by the manager, HR business partner and occupational physician. In the context of the reintegration, Barco’s health & well-being ocer convenes the welfare working group. This group elaborates the reintegration policy and carries out an annual evaluation. In addition, the health & well-being ocer is part of the Social Medical Team (SMT). Together with the occupational physician and HR business partner, they investigate which of the employees in long-term illness can resume work. Status and result: also in 2020, people with psychosocial issues were able to follow virtual guidance sessions, in accordance with government advice to restrict physical presence. In the worldwide Pulse survey (April 2020), 90% of all respondents said they have access to and are satisfied with the information on health and well-being. 87% considered communication to be very good. 0.7% of employees were on long-term sick leave (i.e. > 1 year) in 2020. Barco Integrated report 2020 41 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Maximizing the talent of our people is one of the main focus points of Barco’s HR department. We invest in hiring, devel- oping and retaining talented employees, with a focus on sustainable employability. Our mission is to promote and support employee development and organizational eectiveness by providing high-quality training programs and development opportunities that are aligned with the strategic needs of the company. Training sessions are designed to meet individual, group or depart- mental, and company needs and objectives. We investigate optimal channels for learning and development by oering online and hybrid training courses and by investing equally in job-related experiential learning and learning via interactions with others. This includes promoting internal mobility, creating a feedback culture, investing in people leadership, mentoring and coaching. If a contract ends, Barco supports employees as well as possible to find a new challenge. In spite of the restrictions that the covid-19 pandemic imposed in 2020, Barco kept investing in employee learning and devel- opment, replacing our in-person courses with remote, virtual training sessions. 3. Employee learning and development 3.1 Adapting training programs to strategic needs Scope: all employees worldwide What: in today’s continuously transforming business envi- ronment, it is key to ensure that learning and development initiatives proactively support employee development and organizational eectiveness. Barco University therefore reg- ularly adapts its training plans, taking into account urgently needed skills and competences in different job domains throughout the organization. Plans are drafted with input from dierent ‘Governance Boards’, which consist of Barco stake- holders from dierent regions and divisions. Together, they identify the most important strategic needs our businesses are facing and translate these into relevant learning and develop- ment programs. With this approach, we can train, reskill and recruit our people in a more focused and proactive way. The Governance Boards also follow up on the balance between the eort, cost and eectiveness of these programs. In a growing number of Barco divisions, new organizational blueprints lead to newly defined roles and positions, which require new skill sets. Barco University enlists the training courses – internal courses, Barco University courses, and exter- nal trainings – that individual employees and teams need to meet future requirements. Status and result: 85% of Barco employees took training courses in 2020. On average, they received 11.3 hours of train- ing. The average amount spent per employee on training was €354. Leveraging our weConnect virtual training solution, many in-person courses were replaced with remote, virtual courses. Moreover, an increasing number of employees in remote oces participated in trainings through either weCon- nect or via other virtual training platforms. 3.2 Promoting internal mobility Scope: all employees What: whenever a vacancy occurs, the job is posted internally and where relevant, Barco’s internal mobility forum actively looks for an internal candidate with the needed skillset – in line with Barco’s internal recruitment policy. In this way, we strive to keep talent in-house. Internal mobility is not bound to a cer- tain site, but is instead company-wide, enabling employees to move to other countries to pursue their ambitions within Barco. Status and result: the covid-19 pandemic triggered some unex- pected circumstances in 2020. While some divisions and job functions saw an increase in demand and activities, others faced a significant decrease. This allowed Barco to leverage opportunities for internal mobility and redeployment, either on a temporary or a permanent basis. In addition, it opened up opportunities to further invest in development and attract new talent. Globally, 20% of vacancies were filled internally in 2020. This number does not take into account the temporary redeployment resulting from covid-19. 20% of vacancies were filled internally in 2020 Barco Integrated report 2020 42 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 3.3 Fostering a frequent feedback culture Scope: all employees What: at Barco, we invest in a culture of frequent feedback because we believe this increases engagement, motivation and performance. Feedback helps people understand how they can contribute to the achievement of a shared goal, get a feel for where they are and where they are heading, and ensures that people feel connected. This means we encourage and support managers in giving feedback to their employees on a frequent, consistent and open basis, and we encourage employees to give and ask feedback to their managers, peers and project teams. Feedback moments include check-ins to set performance expectations and to evaluate the performance of the employee. Status and result: despite the challenging working environ - ment in 2020, which involved plenty of remote working, the frequent feedback culture and frequent check-ins still flour- ished. Based on – mostly virtual – evaluations and in close cooperation with their direct leaders and HR business partners, employees were able to define their personal development plans, training needs and career paths. 3.4 Leadership development Scope: worldwide, focus on current leaders, future leaders and newly promoted leaders. What: Barco leaders participate in an annual talent review that assesses their performance and potential over the years, which leads to a personal development plan. The Barco Leadership Compass provides the worldwide framework for this by outlin- ing clear expectations in three domains: thought leadership, result leadership and people leadership. In this way, all leaders at Barco know what is expected from them and can develop their leadership skills based on a set of well-defined compe- tences. Employees who are not yet in a leadership position but have strong leadership talent and ambition are invited to apply for the global emerging leadership program. The pro- gram enables them to develop their skills in various aspects of business and leadership, creating a strong foundation for them to develop into the leaders of tomorrow. Status and result: in spite of the covid-19 crisis, we were able to assess 30% of Barco leaders during the annual talent review and oer a personal set of practical tools to help them sharpen their skills and capabilities. When life returns to normal after the pandemic, it is Barco’s ambition to drastically expand this group. 30 emerging leaders graduated from the emerging leadership program in 2020 – which was redesigned to comply with a 100%-digital format, after a face-to-face kick-o week in February. Our ambition for 2021 is to further foster leadership development, also bringing senior leaders into programs that focus on resilience, change and adaptability. BARCO LEADERSHIP COMPASS Barco Integrated report 2020 43 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Leveraging our virtual education possibilities In 2020, we made full use of weConnect, our own powerful platform for virtual and hybrid education, for our own training sessions. Most of the Barco University courses as well as other programs like the onboarding ‘Welcome Day’ for new employees were organized using weConnect. The virtual platform also made it easier for employees from remote teams to be involved in training sessions. During the covid-19 pan- 4. Diversity & inclusion At Barco, every employee is valued for their merits. For us, equality is not a hollow phrase and we take measures to ensure a balanced workforce. We strive for diverse teams and keep an eye on the equal pay monitor to optimize equality. A dedicated ‘Women in Technology’ campaign continued to encourage girls to pursue technical careers to ensure a better gender balance in the future. Barco also works towards zero dis- crimination and harassment. Our Code of Ethics is a formal document that describes proper behavior, which all Barco employees have pledged to honor. demic, we opened our virtual classrooms to Belgian organizations, companies, universities and schools, supporting them to oer remote training opportunities to their students, colleagues and employees. This way we helped organizations in our community and made them aware of the opportunities and added value of a virtual classroom. The returns of these sessions were donated to charity. Barco Integrated report 2020 44 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 4.1 Diversifying teams Scope: all employees What: to build an inclusive working culture and leverage the diversity we have in our teams, we oer a number of tools and workshops that help people discover their styles, strengths and the value they bring to the team. This not only leads to self-awareness and self-understanding, but also helps people to understand others and make the most of the relationships that impact them in the workplace. When selecting participants for specific programs (e.g. the emerging leadership program), Barco always strives for a diverse and balanced mix that rep- resents the Barco population worldwide. We also steer actively towards diversity within the highest governance bodies. We monitor, assess and evaluate gaps and areas for improvement in the composition of our Board of Directors and of the Core Leadership Team in terms of gender, age, capabilities, exper- tise, educational and professional experience as well as nationality. Status and result: the covid-19 pandemic had a positive eect on the inclusiveness of our teams. Team spirit and proximity between team members in dierent locations improved as we embraced videoconferencing and started to use a default meeting tool. 28% of Barco employees are women 33% of Board of Directors are women 17% of senior managers are women 24 nationalities employed in our headquarters Diversity by nationality Diversity by gender Diversity by age 9% under 30 years 67% between 30 and 50 24% above 50 years Barco Integrated report 2020 45 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 4.2 Equal pay monitoring Scope: Belgium What: Barco values equality between men and women and believes this should be reflected in rewards. Our Job Grad- ing Policy dictates that the salaries be based on a function level and not assigned individually, ensuring that the wage gap between women and men is negligible. Furthermore, promotions and new hires are a shared responsibility between the HR department and the managers. This extra pair of eyes watching over all processes is another sanity check for equal payment. Annually, a sanity check is done on the salaries of men and women, monitoring the equal pay strategy per func- tion level Status and result: the pay gap between men and women in an equal grade is below national average. 4.3 Working towards zero discrimination and harassment Scope: all employees What: Barco’s Code of Ethics is a formal description of how employees are expected to behave. This includes a clear and extensive indication that we do not allow any form of harass- ment or discrimination. Well-known by all employees, this code not only serves as a guide for proper behavior, but is also an element of dierent policies, for example, in recruitment and internal mobility. If the code is violated, employees can confidentially report any case of (suspected) harassment or discrimination to the whistleblower e-mail address of the ethics department. Every occurrence is investigated with nec- essary urgency and respect. A remediation procedure in line with national legislation is foreseen, if applicable. Status and result: in 2020, 98% of Barco white collar employ- ees were trained on the Code of Ethics, which is a part of the Standards@Work program. All senior managers sign o the Code of Ethics annually. Women in technology campaign In 2019, Barco introduced a campaign encouraging girls and women to pursue careers in technology. We expanded the campaign in 2020, launching a series of video testimonials on social media. Meet Carla, Evelien, Jana and Melanie – our tech girls Barco Integrated report 2020 46 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Communities 1. Targets Our ambition We will play an active role in the communities we operate in by upholding the highest ethical and quality standards and expecting the same from our business partners. We always aim to deliver added value to our customers through our solutions, services and capabilities. In addition, we help ensure more people can participate in and benefit from the innovation society. Targets & KPIs * RBA: Responsible Business Alliance 100% of our employees are trained in Barco’s Standards@Work 100% of our key(+) and core suppliers have signed the declaration of compli- ance with the RBA * Code of Conduct 100% 100% STATUS 2020 Reach a customer Net Promotor Score (NPS) of 50 by 2022 50 4798%98% 14 18 19 20 21 1 3 5 6 7 8 9 10 12 13 15 17 16 11 4 2 MATERIAL TOPICS Barco Integrated report 2020 47 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2. Communities (key) performance indicators MATERIAL TOPIC INDICATOR UNIT TARGET 2020 2019 2018 Customer engagement Customer loyalty index # NA NA Customer Net Promotor Score (NPS) # NA NA Number of certified dealers/partners # , Product quality, safety & security Number of product lines in scope of ISO # NA Business ethics % of employees trained in Barco’s Standards@Work ** % Responsible supply chain management % of key(+) and core suppliers that signed declaration of compliance with RBA Code of Conduct % % in-scope suppliers that responded to Conflict Minerals Reporting Template (CMRT) % NA % of key+ and core suppliers who received sustainability score in Supplier Performance Review % NA NA % of key+ and core suppliers with sustainability score higher than % % NA NA Number of supplier quality audits # % of procurement employees trained in sustainable procurement % NA NA Community engagement Community investment € , , , Community involvement # heads + + + * For definitions of indicators: see glossary ** Standards@Work modules covered in 2020: Ethics, Cybersecurity, Quality, Safety, Sustainability, Data protection Barco Integrated report 2020 48 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Our roadmap towards sustainable impact: key initiatives and action plans 1. Customer engagement “We think with the customer” is one of Barco’s core culture building blocks. And rightly so: to succeed in our mission of enabling bright outcomes, we have to fully understand what our customers want and oer the relevant value propositions to deliver outstanding customer experiences. That’s why we put great focus on becoming a more customer-centric company. 1.1 Kicking o our customer journey program In 2018, we kicked o a customer journey program in the Enterprise division, mapping the customers’ experience at every phase of their journey with Barco: from the moment they discover our products and decide to buy them, all the way to renewal and services. These eorts led to really pos- itive results. In 2020, we started rolling out the customer journey program in the entire Barco organization. In spite of the covid-19 crisis in 2020, we managed to accelerate our eorts to drive cus- tomer centricity across Barco. No matter how good our solutions are, we have to oer mind-blowing services and build and foster outstanding cus- tomer relationships to retain our position in today’s rapidly evolving markets. Marc Spenlé Chief Digital and Information Ocer A great willingness to make the customers and their needs a priority Marc Spenlé traded his role of CIO at Vodaphone for that of Barco’s Chief Digital and Information Ocer in the summer of 2020. A true believer in the importance and impact of customer centricity, he will help Barco to put customers firmly at the heart of our organization: “No matter how good our solutions are, we have to oer mind-blowing services and build and foster outstanding customer relationships to retain our position in today’s rapidly evolving markets.” When asked about Barco’s customer experience roadmap, he is positive: “Things are really moving. The transformation will take time, but from what I see now, there’s a great willingness to make the customers and their needs a priority in what we do.” Barco Integrated report 2020 49 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Net Promotor Score (NPS) as a customer experience metric Until 2018, Barco measured overall customer sentiment through an in-depth biannual survey. The results of the survey were summarized in the customer loyalty index. Today, we gauge customer feedback (for end customers as well as partners) every quarter using the relational Net Promotor Score (NPS) as our standard customer experience metric. NPS mea- sures the loyalty of customers to Barco with a single question: “how likely is it that you would recom- mend Barco to a friend or colleague?”. Committed to constantly improving, we have set an NPS target of 50 by 2022. At the end of 2020, we achieved an NPS score of 47. More than measuring the relational NPS, we also increasingly measure transactional NPS for key contact points, such as sales and services. By com- bining both, our teams get the best possible view of customer perception and loyalty and understand what areas need improvement: • Relational NPS gives a high-level overview of customer satisfaction and loyalty by gauging how customers feel about Barco in general. We send this survey on a quarterly basis. • Transactional NPS reflects customer satisfaction on a more granular level through customer feedback following a specific interaction, for instance when an order has been placed. 1.2 Customer engagement initiatives • To think about the customer journey in a uniform way across the company, we had identified six phases in the customer journey. For every phase, we selected KPIs that provide us with a comprehensive view of the customer experience. • In 2020, all our divisions started conducting quarterly NPS surveys. By combining KPIs that we gather through these surveys and internal KPIs (e.g. first-response time) we gain powerful insights that we use to steer improvement decisions and boost customer centricity. • As customer centricity is a topic that involves everyone, we are embedding the customer-centric mindset in the entire organization, including sales, marketing and service teams. • In 2020, we laid the foundations of our customer journey operating model, which includes dierent roles and functions that were/will be filled out in the course of 2021 – from divisional customer journey managers and regional customer journey spokespersons to a customer insights specialist within our corporate marketing team. To ensure full support of the customer journey initiative by our Core Leadership Team, sponsorship of the program will reside in our global CLT. 47 is the NPS score for Barco at the end of 2020 – positioning us in the top quartile for our industry Barco Integrated report 2020 50 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Virtual forums with customers and consultants More than gauging customer needs through sur- veys, we want to keep up with market trends, developments and needs by meeting up with our ecosystem of customers and partners. In addition to the partner summits, we launched several new initiatives to collect customer and user feedback. In EMEA, for example, 40 of our core end customers regularly get together in the ‘inner circle forum’ to discuss trends and roadmaps. In the US, consultant round tables help us understand the needs of our markets. 1.3 Outlook for 2021 and beyond In 2021 and beyond, we will accelerate all the above eorts to further boost customer engagement. 2021 focus areas include: • Further rollout of the customer journey operating model. • Installing a customer journey report to retain an overview of KPIs, actions taken and progress made. • Expanding the use of transactional NPS measurements. • Putting a powerful marketing database into place based on real-time, high-quality data in order to refine segmentation and targeting. • Further digitizing the end-to-end customer engagement process. Barco Integrated report 2020 51 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Quality management system The drive to realize our quality policy and ensure that every product – hardware and software – that we launch is of the highest quality, is ingrained in a company-wide quality man- agement system. This system defines the standard Barco processes – from prod- uct planning, design and development, manufacturing and sales all the way to customer service. One of the key aspects of the system is the definition of clear roles and responsibili- ties and the authority of those responsible for product quality throughout the product life cycle. Barco’s quality management system is audited annually and certified according to international certification standards: • ISO 9001 quality management system (for Barco sites in US, Germany, India, Italy, China, Norway and Belgium); • ISO 13485 quality management system specifically for the medical device industry (for Barco sites in US, China, Belgium, Italy and South Korea). 2. Customer and product responsibility As a high-tech company, we have a duty to our customers to ensure that the products we develop and bring into the world are high-quality, safe and secure. Barco’s global Quality Policy At Barco we are committed to • delivering innovative and highly reliable out- come-based solutions that meet customer, legal, regulatory and security requirements; • inspiring and engaging our people through clear roles and responsibilities, with focus on performance and customer satisfaction; • continually monitoring and improving the speed, eciency and eectiveness of our processes throughout the organization. Quality organization Our commitment to quality and customer satisfaction is also reflected in Barco’s quality organizational structure. Each division has dedicated quality assurance responsibles who supervise process and product quality. In close collaboration with the divisional management teams, they monitor quali- ty-related indicators and spearhead improvement initiatives to enhance the quality of our products and services. Together with the quality responsibles assigned to each manufactur- ing plant and the supplier quality responsibles, they form an engaged team that is wholeheartedly committed to continu- ously improving product quality for all our customers. Quality by design The sustained product quality levels are a result of Barco’s standardized product design processes, focusing on: • Compliance with the applicable standards, laws and regulations, even exceeding them; • “Security by design principle” to ensure protection against the rising number of cyberattacks; • Agile software development principles to ensure that high-quality software is delivered at the right cadence; • Close monitoring of key product quality indicators during the dierent design stages; • Early and automated product integration and validation; • Reliable and mature supplier management and manufacturing processes. 2.1 Product quality In line with our mission to enable bright outcomes, Barco aims to oer products and solutions that ensure top quality over their entire lifetimes. Barco has always been considered an A brand that delivers quality, yet we want to continuously raise the bar in order to consistently meet and even exceed customers’ quality expectations. That commitment is strongly expressed in our global Quality Policy. Barco Integrated report 2020 52 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Closing the loop The quality journey continues after product launch through a set of dierent processes and initiatives to integrate feedback into existing and new products, including: • iGemba initiatives initiated by employees to raise product quality; • The monitoring of customer feedback and satisfaction by the divisional and regional service team; • Regular cross-functional quality meetings between quality, R&D, procurement and service to monitor and assess product quality indicators. When needed, improvement activities are initiated in response to quality- related issues; • A monthly quality dashboard visualizing overall quality performance and customer feedback. Main achievements of 2020 • Gradual transition to one Barco-wide multisite ISO 9001 certificate; • Successful completion of ISO 13485 certification in Suzhou; • IEC 62304 certification in Noida, ensuring compliance with medical device regulations for software development; • Transition of the medical devices to the new EU medical device regulation (MDR). We are on track to ensure business continuity when the MDR comes into force in May 2021. 2.2 Product safety All Barco products are assessed, tested and certified to elim- inate risk of injury or damage. However, technology evolves rapidly these days – faster than the applicable standards that are currently in place to ensure the safe use and servicing of our products. New design methods merge various functional- ities into the same product. That is why, in the past few years, Barco has set up a major program to ensure that our complete active product database complies with the hazard-based safety standard that covers an integrated way of assessing joint functionalities and risks. Software as a potential critical component By assessing software as a potential critical component in product safety, we ensure the correct design, implementation and updates of software by integrating it into software life cycle processes and assessments. Safety throughout the product lifecycle As early as the concept and prototyping phase, we review the applicable safety standards. The result of this review is a list of requirements for critical components, suppliers, product design, use cases, and manufacturing, obsolescence, and component change management. Throughout all product lifecycle stages, our product safety engineers provide necessary input and execute tests against the applicable standards in our company lab, according to the ISO 17025 standard for test laboratories. The assessment is successful only when the product passes on each requirement and the test reports are approved by our external certification partners. As a consequence, we CE-label our products with the support of a third-party certification mark such as CEBEC or DEMKO. As long as our products are manufactured and/or sold, we ensure compliance with updated safety standards and require- ments. During that time, reports and certification marks serve as proof that our products adhere to the latest iterations of continuously evolving safety standards. Production process safety The activities of our in-house safety lab also support product safety protocols regarding production processes. Proce- dures concerning the control of nonconformity and corrective and preventive actions are in place, thus meeting one of the requirements of the ISO 9001 certification that Barco holds. Our employees are continuously trained on safety aspects of the new technologies that Barco uses in its products, as well as on changing regulatory requirements. Barco Integrated report 2020 53 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Next to that, we also implement privacy controls in our prod - ucts to comply with and allow our customers to comply with privacy regulations, such as the General Data Protection Reg- ulation (GDPR) and HIPAA. Software updates and patches Just like other professional software firms, we provide regular software updates and patches. Patched security vulnerabilities in each release are communicated in the release notes, which can be found on our corporate website. If there are public references (Common Vulnerabilities and Exposures (CVE) identifiers) defined for the patched vulnerabilities, they are also added to the release notes. Customers can subscribe to receive news alerts about the products they are interested in. Responsible disclosure policy While we believe our security performance is above average and despite our eorts to ensure that Barco products are as secure as possible, vulnerabilities can still be present in our products. That is why our corporate website includes a responsible dis- closure policy, which provides security researchers with clear guidelines on how to reach out to us about security vulner- abilities detected in our products. The feedback is carefully handled using a risk-based approach by our product security incident response team (PSIRT). In 2020, we received 116 noti- fications about potential vulnerabilities (including duplicates) in products or services, reported by customers, ethical hackers and third-party pen-testers contracted by Barco. ISO/IEC 27001 certification In 2019, Barco obtained its first ISO/IEC 27001: 2013 certificate. It covers business processes, infrastructure and tools related to software devel- opment, sales, deployment and support of our ClickShare wireless collaboration product line in our Kortrijk, Noida and Taipei locations. In 2020, the XMS cloud platform to manage the ClickShare install base has been added to the scope of the certificate. 2.3. Product security With the number of cyberattacks rising exponentially and the attacks getting increasingly sophisticated, it is vital to embed product security in every step of a product’s lifecycle – from design and development through to support and maintenance. At Barco, product security architects and experts are the first line of defense within the product business unit. They are responsible for closely monitoring the implementation of tech- nical security controls in products and improvements of the secure software development lifecycle. Secure software development Our secure software development lifecycle follows the shift- left security approach: we aim to integrate security controls as early as possible in the design and development phases of our products. This is industry best practice and becoming increasingly important in complying with regulations that focus on security by design, such as the United States Health Insur- ance Portability and Accountability Act (HIPAA) and Medical Device Regulation (MDR). To integrate these security controls, Barco uses source code management platforms, bug tracking systems, threat model- ing, static application security testing, open source security and compliance management tools, dynamic application security testing and vulnerability scanners. Furthermore, we work together with independent security experts to train our developers and test the security of our products. Thanks to these eorts, we increasingly embrace the ‘security by design’ principle. Read more on our security-by-design approach Barco Integrated report 2020 54 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 3. Corporate security, data governance and privacy As a technology leader that develops devices capable of connecting to the internet and related software solutions, Barco is fully aware of the growing importance of corporate security. In addition, we set great store by proper data governance, in order to protect our data and that of our customers and comply with regulations like GDPR and similar data privacy legislation outside the EU. 3.1 Corporate security Increasing security threats urge us to take all possible mea- sures to keep our IT network, products and data, particularly personal data, secure from inadvertent transfers, leaks and cyberattacks. Moreover, legislative initiatives in this area have increased with the GDPR, the directive on security of network and information systems (NIS Directive), MDR, HIPAA and the EU Cybersecurity Act, among others. Barco has a clear lead- ership commitment to cybersecurity, which translates into a Security Organization that operates along three lines of defense. THIRD LINE OF DEFENSE = CYBERSECURITY AUDIT • Risk assurances based on the highest level of independence and objectivity • Barco-wide security programs • Governance, policies & controls • Cyber risk assessment • Promote awareness • Monitor & evaluate FIRST LINE OF DEFENSE = OPERATIONAL SECURITY • Own and manage operational risks • Implement risk treatments in processes & controls • Maintain eective internal controls SECOND LINE OF DEFENSE = SECURITY OFFICE BARCO MANAGEMENT Barco Integrated report 2020 55 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Security Oce Barco’s Security Oce, the second line of defense, is headed by our chief information security ocer (CISO) and drives our cybersecurity program. At the core of this program is the cybersecurity roadmap developed in line with Barco’s secu- rity objectives. To identify new and remaining security gaps, we regularly perform cybersecurity maturity assessments using the NIST Cybersecurity Framework (CSF). Our roadmap is continuously evolving due to ever-changing threats (e.g. ransomware attacks) and findings from internal and external security audits and security tests conducted using a risk-based approach. In addition, we take into account (potential) security incidents reported by Barco employees. In 2020, they reported a high number of potential phishing incidents. The number of registered potential phishing inci- dents rose by 50% in 2020 compared to 2019. This rise can be explained by an increase in external threats as well as by the growing security awareness of Barco employees, based on the knowledge they obtained during our periodic phishing simulation tests. +50% Information security management system Barco has an information security management system (ISMS) which complies with the ISO 27001 standard, cover- ing policies, management involvement, business processes, technology, compliance with local laws, security awareness and security best practices. In collaboration with the data protection ocer, we assess a growing number of high-risk third parties based on security and privacy requirements. In addition, we continuously monitor our key vendors’ external security activities. We are gradually working to contain all pro- cesses, locations and products within the scope of our ISMS and ISO/IEC 27001:2013 certification. In 2020, we extended the scope of our ISO 27001 certificate successfully with our eXperience Management Suite (XMS) cloud oering, including additional controls from the ISO/IEC 27017:2015 and ISO/IEC 27018:2019. Ensuring secure remote working in 2020 The properly prepared move of collaboration tools to the cloud allowed us to work securely and eciently, even though an unprecedented number of employees worked remotely in 2020. The linked security risks were properly assessed before- hand and mitigated by numerous additional controls, such as the enforcement of multi-factor authentication (MFA) for all Barco employees and additional security awareness about cyber hygiene at home. The scope of Barco’s ISO/IEC 27001:2013 certificate has been extended to include the eXperience Management Suite (XMS). Raising employee awareness about security In addition to the Standards@Work e-learning, Barco also organizes the annual Cybersecurity Month. Throughout the month, we provide ad hoc security tips and oer voluntary online courses. Barco Integrated report 2020 56 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 3.2 Data governance and privacy Barco prioritizes the protection and management of personal data in accordance with GDPR and similar data privacy legis- lation outside the EU. Our data protection ocer is in charge of managing our data privacy compliance program, which is governed by several procedures and frameworks. Highlights in 2020 included: • HIPAA compliance As our healthcare oering includes a growing number of connected services and software, we must step up our eorts to remain compliant with the United States Health Insurance Portability and Accountability Act (HIPAA) and its related regulations. Barco is strengthening its compliance eorts: several administrative, physical and technical measures are required to assure the confidentiality, integrity and availability of electronically protected health information. • Data privacy breaches Since May 2018, an incident procedure has been in place related to data privacy breaches. It includes details on how and when to communicate with the impacted individuals, aected customers and relevant authorities. Barco did not receive any formal complaints from outside parties or regulatory bodies concerning customer privacy breaches. • Sub-processors of personal data Barco ensures that sub-processors involved in the processing of personal data comply with the minimum data privacy and security requirements. The Security Oce, together with the data protection ocer, evaluate sub-processors based on security and privacy requirements. Numerous data processing agreements have been signed with sub-processors. These agreements are required to pass the data protection requirements on to these sub-processors. • Product privacy statement Barco’s product privacy statement explains what data Barco may collect through its products and how Barco uses that data. When Barco processes personal data on behalf of its customers in providing online services to these customers, this is governed by a data processing addendum to ensure the data receives the appropriate level of protection. Both the product privacy statement and data processing addendum are available on the Barco website. • Privacy policy Individuals using Barco products and individuals visiting the Barco website can exercise their privacy rights in accordance with the privacy policy on our website. In 2020, we established a document retention policy, which provides guidelines for the retention and destruction of records in compliance with regulatory and management requirements. Implementation of this policy is scheduled for 2021. Barco Integrated report 2020 57 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 4. Ethics and compliance Excellent financial performance does not conflict with high ethical standards. The DNA that drives business eciency and compliance is the same: 100% say-do ratio, focus on solving issues rather than pushing them out or cutting corners, and a relentless drive for process improvement. Barco’s reputation and continued success depend on the conduct of its employees as well as its business partners. That’s why we put great emphasis on building a company culture in which ethical conduct and compliance with Barco’s policies and the applicable regulations are at the core of how we do business. 4.1 Building a true ethics and compliance culture Barco continuously invests in building a structured, compa- ny-wide compliance program. Its foundation is based on our Code of Ethics, which outlines the basic principles of com- pliant and ethical behavior when dealing with colleagues, business partners, company assets, information, infrastruc- ture, etc. Every manager is required to sign o on the Code of Ethics annually. 4.2 Compliance Awareness Month To raise awareness about the Code of Ethics, Barco organizes a series of activities in the month of June – which is called ‘Compliance Awareness Month’. We distribute posters in all our facilities and oces and publish blog posts covering eth - ical topics on the intranet. In addition, the compliance ocer shares the ‘Compliance Year in Review’ letter with employees around the world. Translated into the most important lan- guages, the letter contains a high-level overview of all the ethics and compliance issues the company faced in the past year. Last but not least, we also organize the Compliance Challenge, a live quiz with compliance-related questions. Over 50% of all white-collar workers participate in the quiz each year. The team with the highest score can proudly exhibit the Compliance Cup in its oce. Unfortunately, the covid-19 crisis prevented us from organizing the Challenge in 2020. Barco Integrated report 2020 58 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 4.3 New global compliance manager In January 2020, Barco designated a global compliance man- ager tasked with implementing, monitoring and continuously fine-tuning the company-wide compliance management sys- tem. During the past year, she mapped the achievements, weaknesses and improvement actions for each pillar of the compliance management system and launched dierent initiatives across the company to implement compliance strengthening measures in each of the pillars. 4.4 Company-wide Standards@Work training As part of its compliance program, Barco has developed a company-wide training program hosted by Barco University, its in-house training and development center. A consistent and uniform set of e-learning courses covering cybersecurity, data protection, sustainability, quality, safety, ethics and continuous improvement has been developed. Every two months, a new course is rolled out. During these courses, Barco employees learn the standards they must adhere to every day, hence the name of the program – Standards@Work. Every employee must take these courses within the deadlines set. We strive for a 100% participation rate and actively follow up on employees with overdue learning assignments. The e-learning courses achieve completion rates well above 98%. Only employees who are on long-term sick leave or will leave Barco in the near future did not take these courses. In mid 2020, an updated series of e-learning courses was launched. Data Protection Quality Ethics Safety Sustainability Cybersecurity Continuous improvement Data Protection Quality Ethics Safety Sustainability Cybersecurity Continuous improvement Barco’s Standards@Work Barco Integrated report 2020 59 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 4.5 Promoting a ‘speak up’ culture Barco wants to actively promote a genuine ‘speak up’ culture where ethical questions or dilemmas can be raised without fear of retaliation. Employees who have questions or want to raise concerns or issues can do so via several channels. Their direct supervisor or HR business partner is the first line of contact. In addition, any employee can reach out to a member of the Legal, Risk & Compliance team or the Internal Audit team. Questions and/or concerns can also be communicated via the Ethics mailbox ([email protected]). All questions or concerns addressed to the Ethics mailbox are reviewed by the Ethics Committee, which consists of the general counsel, the chief HR ocer and the internal auditor. This committee reviews incoming questions or concerns, and assigns them to one of its members, depending on the subject matter. This member is responsible for analyzing the question or concern and proposing a satisfactory solution to the other committee members. The Ethics Committee decides on the solution, any remedial actions that may need to be taken and prepares a response to the person that raised the question or concern. Appropriate records are kept of all questions and concerns raised via the Ethics mailbox. 4.6 Governmental investigations Since Barco conducts business across the world, its opera- tions are scrutinized by governmental authorities in dierent countries from time to time. • In India, the Directorate of Revenue Intelligence is investigating the export of components from Barco’s factory in India, which allegedly fall under the scope of Indian SCOMET export regulations and would require an export license. Barco contests the applicability of SCOMET export regulations and filed a writ with the High Court of Delhi. Due to the covid-19 epidemic, the hearing has been repeatedly delayed. 4.7 Membership of associations Barco is strongly integrated into local and professional initia- tives as well as communities that are relevant for its activities. It supports these initiatives and communities in various ways – as a founding partner, through directorship, delegation of employees to work groups, membership fees, etc. Below is a non-exhaustive list of the various organizations and associa- tions we are a member of: • industry and trade associations and professional networks: Agoria, Society of Motion Picture and Television Engineers (SMPTE), Radio Equipment Directive Compliance Assocation (REDCA), Committee of European Accredited Bodies and Laboratories in Electrotechnics (CE- ABLE), Belgisch Elektrotechnisch Comité (BEC), Deutsches Flachdisplay Forum, Techwatch, European University Information Systems (EUNIS), Manufacturers Association for Information Technology (MAIT), National Association of Software and Service Companies (NASSCOM), EIT Health, Society for Imaging science & technology, COCIR, Laser Illuminated Projector Association (LIPA), Inter Society Digital Cinema Forum, International Association Of Amusement Parks, Themed Entertainment Association, Belir, Belrim, Beltug, IBJ, VONK, Kortrijk IN, Executive Global Network, Guberna, Communication Community. Overview of the matters addressed via the Ethics mailbox in 2020 Data privacy Inappropriate behavior Conflicts of interest Diversity Total Resolved: 7 Unresolved: 1 Closed: 2 Barco Integrated report 2020 60 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE • non-profit organizations supporting: - local entrepreneurship, like Hangar K Start-up Incuba- tor; - innovative research within technology or sustainability sector, like Flanders Make, Medtech Flanders, The Shift and Valipac; - international exchange and trade: Flemish-Chinese, American, Belgo-Indian, Gwinnet County, Metro Atlanta, Belgian American Chambers of Commerce, Belgian Luxembourg Chamber of Commerce for Rus- sia & Belarus and CanCham Belux; • advocacy organizations, like Voka. The membership fees for most of the above organizations and associations range from €250 to €5,000. Only a few require membership fees ranging between €20,000 and €30,000. The largest contribution amounts to €50,000, the required capital contribution for a founding member of the local non- profit organization Hangar K, a joint initiative with education institutions and the city of Kortrijk that supports start-ups and young entrepreneurs in the educational and gaming tech- nology domain. Barco does not make donations or other contributions of any kind to political parties. 5. Supply chain responsibility In order to meet our customers’ expectations for high-quality, innovative products, we rely on service and manufacturing partners from around the world. Together, we continue to drive responsible and ethical behavior and high standards across our supply chain. In 2020, Barco had 142 core, key+ and key group level suppliers, covering 81% of our total direct spend for components and fin- ished products. Up to 60% of our direct spend is located in APAC, 27% in Europe and 13% in the rest of the world. 5.1 Barco’s supply base At Barco, we buy a wide range of components, from plastics, electronic components and sheet metal to finished products, from many dierent suppliers. Because we deal with so many suppliers, we have categorized them into four categories: core, key+, key and non-key suppliers, based upon spend and their strategic technology importance to Barco. The categorization enables us to define a clear scope and supplier management activities for each category. For each category, we have estab- lished dierent levels of engagement. 2020: a test for supply chain resilience 2020 proved to be a real test for Barco’s supply chain resil- ience, given the trade wars and regional/global lockdowns resulting from the covid-19 pandemic. All in all, Barco was able to weather the storm, thanks to our agile reaction to sudden changes in demand, logistics and suppliers. By taking advan- tage of strategic stock and consignment models and regional and global dual sourcing, we put our contingency plans to the test. Our strong, long-term supplier relationships contributed to the success of that approach. The pandemic gave us insights into new opportunities to enhance our supply base resilience, resulting in a number of new initiatives in our risk management strategy. 81% 142 suppliers APAC: 60% Europe: 27% Rest of the world: 13% Barco Integrated report 2020 61 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 5.2 Setting clear standards for our suppliers The key to a high standard supply chain is ensuring that our suppliers know our expectations, including those in the field of sustainability. We adhere to three important sustainability standards: the RBA Code of Conduct, the Product Compliance Requirements and the Responsible Minerals Policy. RBA Code of Conduct We require all our suppliers to comply with the RBA Code of Conduct (Responsible Business Alliance). Formerly known as the EICC Code of Conduct, the RBA Code of Conduct is a set of standards covering social, environmental and ethical topics relevant to the electronics industry supply chain. The Code is aligned with international norms and standards including the Universal Declaration of Human Rights, ILO International Labor Standards, OECD Guidelines for Multinational Enterprises, ISO and SA standards. Topics covered include: • Labor and human rights: freely chosen employment, humane treatment, non-discrimination, freedom of association,.... • Health and safety: occupational safety, machine safety, health and safety communication,... • Environment: greenhouse gas emissions, hazardous substances, environmental permits and reporting,... • Ethics: business integrity, fair business, advertising and competition, responsible sourcing of materials and privacy. The share of key(+) and core suppliers (which account for more than 80% of the direct spend) who have committed to the RBA Code of Conduct or have a similar code, is tracked as a monthly KPI in the Global Procurement dashboard. In 2020, 98% key(+) and core suppliers signed the declaration of compliance with the RBA Code of Conduct. A new version of the code will be applicable in 2021, which will trigger suppliers to renew their commitments to the code. Product Compliance Requirements Every component that our suppliers deliver to Barco must comply with the Barco Product Compliance Requirements (available on our website), which includes compliance with worldwide regulations (such as RoHS10 and REACH, ecodesign requirements, WEEE), industry standards and additional criteria that we have defined. Barco also requires compliance with the Barco substance list, in which we restrict the use of specific chemicals or require declaration of specific substances. With the implementation of the Barco substance list, we go beyond current legislation. In 2020, we rolled out a worldwide chemical substances risk managing process with the purpose of safeguarding our employees and the environment from harmful adhesives. The process also validates chemicals that are defined by Barco to be used at our assembly suppliers, phasing out high-risk chemicals and providing safe use instructions. We strongly urge suppliers to provide full material declarations (FMDs) of their supplied components so that we can guaran- tee future compliance of our products with environmental regulations worldwide, including the forthcoming SCIP ECHA database (database for information on Substances of Concern In articles as such or in complex objects (Products)). Thanks to our large coverage of FMDs (82% of active components in 2020) and RoHS certificates with the applicable exemptions we are able to upload our product families on time in the SCIP database. In addition, the database helps us proactively phase out substances from our products in line with our ecodesign program and industry initiatives. A team of in-house experts performs risk-based assessments of compliance data pro- vided by suppliers and requires in-depth compliance data for high-risk parts. Responsible Minerals Policy Managing our obligations in the field of conflict minerals is part of Barco’s corporate responsibility. We and many of our stakeholders are concerned about human rights violations in dierent forms (child labor, human tracking, forced labor etc.) as well as armed conflicts causing extreme violence across so-called “conflict-aected and high-risk areas” (CAHRAs). We recognize the risk related to illegal extraction and trade of materials such as tin, tungsten, tantalum, gold and cobalt. We align our Responsible Minerals Policy and practices with the “OECD Due Diligence Guidance for Responsible Chains of Minerals from Conflict-Aected and High-Risk Areas” (OECD Due Diligence Guidance). In addition, Barco has obligations addressed by the legislators in various regions, including the US and the European Union. We support and comply with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Aected and High-Risk Areas aected by the risks defined in Annex 2 of the OECD Due Diligence Guidance. We are committed to avoiding the purchase of products and mate- rials containing conflict minerals directly from conflict mines. Furthermore, we rolled out a uniform and enterprise-wide pro- cess to determine the use, source and origin of the relevant minerals in our supply chain (“Supply Chain Due Diligence”), including “Responsible Minerals Assurance Process” (RMAP) in line with the OECD guidelines. We engage with suppliers in order to remediate risks and perform additional due diligence so that we can continue to source responsibly and safeguard the supply chain. Barco Integrated report 2020 62 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Our in-scope suppliers (i.e.. suppliers of components contain- ing the minerals tungsten, tantalum, tin or gold) are expected to source from responsible sources and start actively cascading this request to the next tiers of Barco supply chain. We require our suppliers to establish and maintain a publicly available Responsible Minerals Sourcing Policy that aligns with the OECD Guidelines. In following the OECD Due Diligence Guidance, we request our in-scope suppliers to investigate their supply chains to determine the origins of metals contained in products sup- plied to Barco. In-scope suppliers are required to complete the Conflict Minerals Reporting Template (CMRT) of the Responsible Mineral Initiative (RMI). Our supply chain is very responsive. Nevertheless, a dedicated escalation flow involving procurement is available, forcing actors in the supply chain to provide the required data. In 2020, 100% of in-scope suppliers responded to the CMRT. We perform a detailed conflict miner- als risk analysis on the data received through cross referencing and close collaboration with members of the RMI. In 2020, we started mapping the transparency of our supply chain regarding cobalt in anticipation of future regulation and customer expectations. 5.3 Further embedding sustainability in the procurement process We encourage our suppliers to share our values and require for them to meet our mandatory ethical, labor and environmental standards. In order to ensure the level of engagement required, we have further integrated sustainability into every step of the procurement process. a. Supplier scouting The supplier self-assessment document includes sustainabil- ity-related questions, which are reviewed and form the basis for open discussions when a gap between supplier behavior and our expectations is detected at first glance. b. Supplier onboarding In 2020, more sustainability criteria were added to the new supplier selection report for new component suppliers. c. Purchase contracts Sustainability clauses are part of Barco’s terms and conditions (T&Cs) for purchase as well as our master supply agreements (MSAs) (i.e. contracts with key and core suppliers). 100% of key(+) and core suppliers signed contracts with sustainability clauses, i.e. MSAs or signed T&Cs, in 2020. SCOUTING ONBOARDING PURCHASE PERFORMANCE MONITORING CAPACITY BUILDING Scope All potential component suppliers New critical component suppliers All suppliers All key+ & core suppliers All key(+) & core suppliers Tools Supplier self assessment document including sustainability questions New supplier selection report including mandatory sustainability criteria Terms & conditions of Purchase including sustainability clause (all purchase orders) Contract including sustainability clause (for important spends) Supplier Performance Review including sustainability score Webinars and e-learnings Supplier innovation days Barco Integrated report 2020 63 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE d. Supplier performance monitoring 78% of our targeted key+ and core suppliers received a sus - tainability score in their performance review in 2020: suppliers are scored on their performance in sustainability domains such as product compliance requirements, adherence to RBA Code of Conduct and transparency (the provision of CMRTs and FMDs). In 2020, 43% of our key+ and core suppliers in scope for sustainability performance reviews got a score of >80%, which is the requirement to be a Barco preferred supplier. The sustainability score is communicated to suppliers during business review meetings. Dedicated improvement actions are agreed upon and tracked by the procurement delegate. During these meetings, sustainability is a fixed topic of the agenda: we share our sustainability ambitions and highlight how important it is for our suppliers to help us achieve our targets. Suppliers are encouraged to proactively share their progress regarding sustainability in their operations and supply chains, and to share innovations that could help us improve the sustainability impact of our products. e. Capacity building We also want to ensure that our suppliers understand our sus- tainability standards and learn how to act upon them. Through dierent communication channels, we train suppliers and inform them about developments in several sustainability domains, such as environmental compliance, ecodesign and conflict minerals. 5.4 Training our sta In 2020, we organized a dedicated training course for our procurement team on the Barco sustainability program, the roadmap to a sustainable supply chain and the RBA Code of Conduct. 100% of our procurement colleagues completed the training. 5.5 Plans for 2021 and beyond In 2020, we drafted a sustainable procurement policy, which will be published in early 2021. Activities in 2021 will still focus on increasing awareness of sustainability within the global procurement team as well among our suppliers. We continue our journey from awareness to cooperative improvement of the sustainability performance of our suppliers. The under- writing of the new RBA Code of Conduct will facilitate the discussion with our suppliers. Our ambition for 2021 and beyond is to upgrade our supplier sustainability program to an advanced level, as defined in our sustainability roadmap. Barco Integrated report 2020 64 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Opening up our weConnect virtual classroom to other organizations during lockdowns In March 2020, when the first confinement measures and travel bans came into play, a lot of organizations were forced to find alter- natives for their on-site training courses and edu- cational programs. Barco immediately decided to open up its weConnect virtual classroom so that local companies could stay in touch with their employees around the globe, for a small rental fee. In addition, we also made the virtual class- room available to surrounding schools and universities. The benefits were legion! All 497 virtual attendees who participated in the virtual sessions were enthusiastic about this unique oppor- tunity . For Barco, this was a great chance to receive insightful feedback on our weConnect solution. Moreover, the proceeds from the use of the virtual classrooms went entirely to charity: in November 2020, we donated €9,500 to AZ Groeninge hospital in Kortrijk. The hospital will use the funds to purchase telemedicine equipment which allows healthcare pro- fessionals to remotely monitor blood pressure, weight or other patient parameters from home. 6. Community engagement At Barco, it is our ambition to help ensure more people can participate in and benefit from a prospering society, regardless of their backgrounds. We focus our support on the areas of education and entrepreneurship. We therefore connect our employees with purpose, leveraging their engagement, expertise and skills, and partner with non-profits and social enterprises, targeting long-lasting impact. Beneficiary groups are young and underserved people, with the prime focus on the communities where we live and work. 6.1 2020: an unequaled year that called for special support With the coronavirus raging across the globe, we saw heart- warming solidarity at many Barco sites. From donating medical display systems and personal protective equipment in order to help healthcare professionals battle the virus through to installing a rental program for our virtual classrooms, here’s a brief overview of some of the initiatives we launched: • In Italy, we donated about 150 white suits and other protective clothing to two nearby care centers. • Barco Belgium raised money to buy protective clothing, gloves and goggles for two Chinese hospitals. • 38 medical display systems were donated to hospitals in Beijing and in the provinces of Hebei and Hubei (China). • In Belgium, we bought cloth face masks from Think Pink, the Belgian national breast cancer campaign. More than protecting our people, the comfort masks showcase our commitment to supporting the fight against breast cancer. €9,500 was raised through our virtual classroom rental initiative during the covid-19 lockdown. Barco Integrated report 2020 65 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE • In 2017, Sakshi, an Indian NGO concentrating on education, health and community development, founded Barco Sakshi Education Center – a new school for underprivileged children in Noida, where our site is located. Barco supported the foundation and continues helping the school through various initiatives. In 2020, 28 Barco associates provided virtual classes for the school children. • Through the iGemba Scholarship Fund, Barco India is giving back to its employees (blue collar in particular), giving their children access to the innovation society through good education. The concept is simple: for each improvement suggestion that operators make through our iGemba program, Barco contributes €3, which is collected in a scholarship fund. Since the start of the pro- 6.2 Closing the education gap around the world Education is one of the keys to escaping poverty. Over the past decade, major progress was made on increasing access to education and school enrollment rates around the globe, yet there is still a long way to go. Barco helps close the education gap in order to improve the lives of underprivileged children in a number of ways: • Indus Action, a non-governmental organization anchored in New Delhi, India, truly believes that when children from dierent backgrounds and abilities study together in one classroom, they can achieve their highest potential. Currently active in 19 states, the organization focuses on a mix of technology-based interventions and policy advocacy to provide disad- vantaged children with legitimate access to education. Next to contributing financially to Indus Action, Barco volunteers, particularly from the software team, also help them design and test their software. gram in 2014, 84 children of Barco employees received the scholarship till date. • For its emerging leadership program, Barco partners up with StreetwiZe, a unique talent development provider that develops high-impact learning products to com- panies, inspired by the complex and competitive reality of street communities. StreetwiZe invests 100% of their profits in Mobile School, an organization that provides non-formal education to street youth and helps them grow into positive contributors to society. • On the occasion of the ‘All In Virtual’ event, Barco US donated $500 to Girls Who Code, an organization that is committed to closing the gender gap in tech jobs around the world. Barco Play Day – a 2020 alternative Each year since 2013, Barco has been organizing Barco Play Day – a day of fun, games and workshops for underprivi- leged children at Barco oces – first in Belgium and later also in India and Germany. “More than oering the children a fun day away from their worries, we introduce them to the world of technology,” explains Elsje Declercq, who is one of the driving forces behind the initiative in Belgium. “By giving them a glimpse behind the scenes of our company, we hope to inspire these children to seek education in technology. It’s so rewarding to hear that some of them have actually chosen a STEM (science, technology, engineering and mathematics) edu- cation because we inspired them and they would love to work here.” The success of Barco Play Day is due to the hard work of many volunteers and contributions from a series of organi- zations, including Barco. While the pandemic prevented the team from organizing Barco Play Day in 2020, Elsje and her Belgian colleagues decided to still collect money as well as children’s clothes, toys and school equipment among Barco colleagues – to help local organizations improve the lives of vulnerable children in the neighborhood. Barco Integrated report 2020 66 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 6.3 Ensuring healthy lives and promoting well- being More than ensuring good health outcomes by delivering first- class healthcare solutions and services, Barco wants to help provide access to good healthcare services around the world. In addition to the covid-19-related support, we supported the following initiatives in 2020: • We provided financial aid to CanSupport, India’s largest free home-based palliative care program. The money is used to fund mobile teams, each comprising a doctor, a nurse and a counselor. In addition, Barco colleagues volunteer at CanSupport daycare centers or organize fun activities with young cancer patients. • We also keep contributing financially to Urja Energy. The NGO tries to eradicate the taboo of menstruation, by educating women about menstrual hygiene. In addition, they opened a unit for the production of 100% biodegradable sanitary pads, where local women are employed. • In Norway, we supported organizations like Blue Cross, which helps people with drug related problems, and the National Association for Stopping Child Violence. Closing the education gap with refurbished IT equipment With access to a computer and digital literacy training, children benefit from international sources of information, helping them become global citizens and stimulating entrepreneur- ship. That’s why Barco decided to support Close the Gap, a Belgian social enterprise that was founded over 15 years ago with the aim of bridg- ing the digital divide in developing and emerging countries. One of the activities of Close the Gap is collecting laptops, desktops, displays, servers, etc. and refurbishing them for reuse in educa- tional, medical and social projects, mostly in developing and emerging countries. Since the start of our partnership with Close the Gap, Barco has donated over 6,500 pieces of IT equipment. In 2020, we donated approximately 200 laptops and computers to Digital For Youth, a Belgian organization founded by Close the Gap and DNS that collects laptops from companies, refurbishes them and distributes them to vul- nerable young people. The computers were donated to secondary school children to help them take online courses during the covid-19 lockdown. 200 laptops and com- puters were donated to secondary school children to help them follow online courses during the covid-19 lockdown. Barco Integrated report 2020 67 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Managing sustainability PPC Barco Integrated report 2020 68 Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Sustainability governance and responsibility Governance keeps our corporate sustainability strategy on track. It ensures that our strategy remains eective, and that accountability for our results sits right at the top of our company Board of Directors - Audit Committee At least once a year, sustainability is on the agenda of Barco’s Audit Committee. The committee shares and discusses strate- gic progress on Barco’s overall sustainability program as it is an integral part of Barco’s corporate strategy. The committee also reviews sustainability-related risks as part of it risk management process and is informed about the issues and concerns raised via the Ethics mailbox. In case the Audit Committee consid- ers it appropriate, they further report issues and topics to the Board of Directors. In 2020, the Audit Committee discussed sustainability during the December meeting. Core leadership team (CLT) At least twice a year, sustainability is on the CLT meeting’s agenda. The sustainability strategy and progress status are shared and discussed. Executive sustainability steering committee The members of this committee are our Chief Executive O- cer, Chief Human Resources Ocer, Chief Financial Ocer, Group General Counsel, Senior Vice President Healthcare, Senior Vice President Operations and Senior Vice President Organizational Excellence. They review the corporate sustain- ability strategy, approve targets and monitor execution, helping SUSTAINABILITY WORKSTREAMS & AMBASSADORS GROUPS SUSTAINABILITY OFFICE BOARD OF DIRECTORS AUDIT COMMITTEE CORE LEADERSHIP TEAM SUSTAINABILITY WORKSTREAMS & AMBASSADOR GROUPS SUSTAINABILITY OFFICE SUSTAINABILITY OFFICE EXECUTIVE SUSTAINABILITY STEERING COMMITTEE Barco Integrated report 2020 69 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE to ensure that sustainability is integrated into our business – supporting Barco’s overall goals. The committee meets at least once every quarter. The sustainability oce reports directly to this committee. Sustainability oce The sustainability oce, which is part of the finance depart- ment, champions our company-wide commitment to sustainability performance and transparency towards stake- holders. The oce conducts reporting activities and engages with internal and external stakeholders to assess, prioritize, and monitor sustainability focus areas. The oce establishes the corporate sustainability strategy, drives processes for sustain- ability governance, and provides guidance and coordination across business functions. It also sets corporate sustainability targets based on the targets set by the business functions. Sustainability workstreams Sustainability focus areas are owned by the business. Within the relevant business functions, sustainability workstream leaders are responsible for delivering sustainability targets, managing the sustainability plans and measuring performance. They ensure that sustainability is integrated into Barco’s ongoing business strategy and planning. Each workstream leader is supported by a sponsor, i.e. a senior manager who serves as a sounding board, facilitates decision-making and removes obstacles for the workstream leader. The workstream leaders share progress on sustainability focus areas to the Executive sustainability steering committee. Sustainability ambassador groups The ambassador groups are cross-functional groups of highly motivated employees, including the sustainability workstream leaders. They discuss ongoing initiatives and partnerships, suggest new ideas, etc. Led by the sustainability oce, they meet at least once every quarter. They also communicate and amplify the accomplishment of key initiatives to all relevant stakeholders. SUSTAINABILITY WORKSTREAMS & AMBASSADORS GROUPS SUSTAINABILITY OFFICE BOARD OF DIRECTORS AUDIT COMMITTEE CORE LEADERSHIP TEAM SUSTAINABILITY WORKSTREAMS & AMBASSADOR GROUPS SUSTAINABILITY OFFICE SUSTAINABILITY OFFICE EXECUTIVE SUSTAINABILITY STEERING COMMITTEE Barco Integrated report 2020 70 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Stakeholder engagement Barco attaches great importance to stakeholder engagement. After all, external perspectives help us identify and prioritize emerging issues and better align our strategy, actions and policies with the interests of society and the planet. In addition, stakeholders can provide valuable feedback on our perfor- mance and other aspects of our activities, like transparency. In short: stakeholder engagement supports our long-term success. Dedicated channels and processes We have set up a series of dedicated channels and processes to ensure we meet the expectations of all our key stakehold- ers: customers, employees, investors, suppliers and (non-) governmental organizations. By continuing to standardize the process of interacting with our stakeholders, we can mit- igate risks, identify new business opportunities and improve financial results. 2020 stakeholder engagement process In 2020, we organized a comprehensive stakeholder engage- ment process, involving external stakeholders of all categories as well as internal stakeholders as input for our materiality assessment. Through one-on-one interviews and online sur- veys, we reviewed stakeholder expectations to develop Barco’s materiality matrix. The results are also being used to shape our activities in 2021 and beyond. In total, 111 stakeholders participated in the surveys and interviews. Customers Employees Investors Suppliers (Non-) governmental organizations 1 Customer engagement Customer engagement Financial resilience Innovation man- agement Climate change & energy 2 Product quality, safety & security Employee engagement Sustained profitable growth Product quality, safety & security Information security & data protection 3 Innovation man- agement Product quality, safety & security Market reach Business ethics Innovation manage- ment 4 Financial resilience Innovation management Product quality, safety & security Customer engage- ment Product stewardship 5 Information & data protection Brand Corporate governance Financial resilience / Sustained profitable growth Employee health, safety & well-being Top 5 material topics by stakeholder group (2020 assessment) A description of these topics can be found the ‘materiality’ section of our Integrated report. Barco Integrated report 2020 71 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Continuous stakeholder interaction Our day-to-day activities also enable stakeholder interaction. At Barco, every department is responsible for identifying and engaging with its stakeholders (i.e. those they aect or are aected by). Barco’s corporate functions provide the depart- ments with a framework for stakeholder engagement (i.e. stakeholder identification and classification, guidelines for stakeholder communication, etc.). From informal dialogues to contractual partnerships, our engagement with stakeholders takes many dierent forms. Customers “We think with the customer” is one of Barco’s core cultural building blocks. To succeed in our mission of enabling bright outcomes, we have to fully understand what our customers want and oer the relevant value propositions to deliver out- standing customer experiences. That’s why we are constantly raising the bar on customer experience – to become a truly customer-centric company. We engage with our customers via: • NPS (Net Promotor Score) surveys; • Daily contacts in the field (sales, segment marketing, customer service, …); • (Virtual or live) events and partner summits; • Digital interaction via social media, website, etc.; • Press releases. Read more about our 2020 activities in the field of customer engagement Employees People are key to the success of our company. We want to deliver the best-possible working conditions to our people. This means ensuring employee engagement, providing a safe and healthy workspace, oering continuous training and development opportunities and making diversity and inclusion priorities. We engage with our employees via: • Townhall meetings and Q&A sessions for all employees; • Regular updates on internal news portals (BarcoZone intranet, Yammer and video walls in our oces); • Inspiration sessions on several topics (including sustainability); • Frequent feedback sessions. In case an employee wishes to report or discuss an issue, even anonymously: • They can talk to trained confidants; • They can report the issue to the Ethics mailbox. Read more about our 2020 employee engagement activities Investors We value the essential role that our capital providers play in the success and prosperity of the company, as they allow us to pursue long-term value creation. This should also lead to a continuous increase of the company’s valuation for the benefit of its shareholders. We actively seek engagement with investors, as well as with financial advisors who cover Barco on behalf of their financial market clients and ESG rating agencies. We engage with investors via: • The investor relations section on the company website; • The Annual General Meeting of Shareholders; • Events like the Capital Markets Day, investor conferences and roadshows; • Quarterly conference calls, one-on-one telephone and video calls. Suppliers In order to meet our customers’ expectations for high-quality, innovative products, we rely on service and manufacturing partners from around the world. Barco maintains frequent contact with suppliers, evaluates and trains them to ensure that we continue to drive responsible and ethical behavior and high standards across our supply chain. We engage with suppliers via: • Clear communication about our standards and their updates (RBA Code of Conduct, Product Compliance Requirements and the Responsible Minerals Policy); • Monitoring and audit system to evaluate supplier performance; • Business reviews with key+ and core suppliers; • Trainings (webinars and e-learnings); • Supplier innovation days. Read more about our 2020 eorts to ensure supplier engage- ment (Non-) governmental organizations Barco is a member of several associations that operate on global, regional, and national levels and enters into dialogue with public authorities, policymakers, etc. We engage with associations via: • Participation in working groups of policymakers; • Meetings, roundtables and conferences; • Participation in global networks; • Internships and lectures. More information about our memberships can be found in ‘ethics & compliance’ In addition, we contribute to various charitable institutions and community projects around the globe. Structural partnerships include those with Close the Gap, Sakshi, Indusaction, Can- Support and Urja Energy. Discover our 2020 charity initiatives Barco Integrated report 2020 72 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE External initiatives (platforms and commitments) Science Based Targets initiative The Science Based Targets initiative (SBTi) is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wildlife Fund (WWF). The SBTi is the only global initiative that directly links a com- pany’s carbon-emission targets to the Paris Agreement and associated global eorts, in order to keep the rise in global temperature below 1.5°C. Barco has signed the Business Ambi- tion for 1.5°C Commitment Letter in 2020. Targets are currently under validation. Belgian Alliance for Climate Action In 2020, Barco joined the Belgian Alliance for Climate Action (BACA), a collective of organizations that commit to aligning their activities with the goals of the Paris Agreement: to keep global warming under 2°C and pursue eorts to limit it to 1.5°C. The Belgian Alliance for Climate Action is an initiative of WWF Belgium and The Shift. It unites many Belgian organizations that pledge to take the necessary steps towards a CO 2 -neutral economy. This entails lowering the emission of greenhouse gases, show more climate ambitions, and use Science Based Targets (SBT) to reach the sustainability goals. We Mean Business A coalition of organizations working with thousands of the world’s most influential businesses and investors to accelerate the transition to a low-carbon economy. As a member, Barco is committed to the initiatives and commitments put forward by the We Mean Business Coalition. The Shift Barco is a member of The Shift, Belgium’s largest corporate sustainability network. The aim of the organization is to realize the transition to a more sustainable society and economy. Biodiversity Green Deal A Green Deal is a voluntary partnership between (private) companies and the Government of Flanders (Belgium) who commit themselves to setting up a green project together. This particular Green Deal aims to increase biodiversity in business parks and to rally public support for the initiative. More than 60 companies and organizations have already signed up to participate in this Green Deal, including Barco. Barco Integrated report 2020 73 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE Be The Change What will our labor market look like in 2030? In the study ‘Shap- ing the future of work’, Belgian technology sector federation Agoria defined four strategies for a sustainable labor market. These four strategies can be categorized as: activating unem- ployed people or students, upskilling and retraining employees and further developing and investing in technology. In 2019, Barco endorsed the Be The Change Charter, committing to adapting its personnel policy to the challenges of the labor market of tomorrow. We took on four challenges: • Mapping travel and travel time from employees to customers, suppliers and within the company and reducing these trips by at least 20% by 2022 (technology). • Investing at least 1/5 th of our R&D resources in technological solutions to facilitate remote services in healthcare, education or companies (technology). • Sponsoring and having Barco employees take part in the ‘Take the Lead’ program to encourage and stimulate the digital transformation in the company (upskilling and technology). • Organizing company visits and technology workshops for at least 15 teachers and students in three levels of education, on a yearly basis (activation and upskilling). Certifications In order to assure our stakeholders that our management sys- tems meet international industry-specific standards, we have obtained the following ISO certifications: • ISO 9001 quality management system (for Barco sites in US, Germany, India, Italy, China, Norway and Belgium) • ISO 13485 quality management system specifically for the medical devices industry (for Barco sites in US, China, Belgium, Italy and South Korea) • ISO 14001 environment management system (for Barco sites in Belgium, China, India and Italy) • ISO 27001 information security management system (for Barco sites in Belgium, India and Taiwan) During 2020 Barco was able to deliver on three of the four challenges and is now in the running to apply for “Employer ready for the future of work”. Take the Lead Vlerick Business School and business newspapers De Tijd & L’Echo joined forces in developing Take the Lead as a social commitment to respond to the increasing need for digital knowledge in the business world. It is a learning program that aims to create digital leaders. Barco is a partner in this program, enabling it to be oered to a maximum number of participants. Hangar K Barco is a proud partner of Hangar K, a co-creation hub that was inaugurated in October 2017 in Kortrijk, Belgium. More than just a workspace, Hangar K is a competence center as well as an incubator: a place where start-ups, scale-ups, established companies and the academic world come together to inspire each other and embrace the opportunities of the digital age to build new, successful businesses. Barco Integrated report 2020 74 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2020 2019 2018 RANKING NA B- B NA NA GOLD SILVER Top 5% of companies evaluated AA A A Top 12% of the Electronic Equipment, Instruments & Components industry C+ PRIME C+ PRIME NA Top 20% of the Electronic Devices & Appliances industry 11.2 LOW RISK NA NA 3rd out of 110 in the Electronics Equipment subindustry 27,8% NA NA 80th out of 375 in Electronic products industry External evaluations Barco is rated by several independent organizations on its sustainability performance. We actively participate in the following initiatives: Barco Integrated report 2020 75 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE CDP CDP, the former Carbon Disclosure Project, runs the global disclosure system that enables companies, cities, states and regions to measure and manage their environmental impacts. They have built a comprehensive global collection of self-re - ported environmental data. By scoring businesses from A to D, they take organizations on a journey from disclosure to awareness, management, and finally leadership, on several environmental topics such as climate change. Every year, Barco measures and reports its carbon footprint to CDP, benchmarking its sustainability performance to peer groups suggested by CDP. We commit to the feedback pro- gram as organized by CPD and set up action plans to mitigate the risks and capitalize on the opportunities that CPD points out. Barco received a B- score on its 2019 data. EcoVadis In recognition of its commitment to corporate social respon- sibility (CSR), Barco has been awarded the Gold Rating by EcoVadis in November 2019, placing us among the top 5% of companies evaluated. The 2020 rating will be announced in the course of 2021. EcoVadis’ independent sustainability rating platform mon- itors and improves the environmental, ethical and social performance of companies worldwide. EcoVadis provides sustainability performance audits for 75,000+ companies across 200+ sectors and in more than 160 countries. MSCI MSCI ESG ratings help investors identify ESG risks and opportu- nities within their portfolio. They research and rate companies on a ‘AAA’ to ‘CCC’ scale according to their exposure to indus- try specific ESG risks and their ability to manage those risks compared to peers. We have an AA score and rank among the top 12% of the Electronic Equipment, Instruments & Com- ponents industry. ISS ESG ISS ESG is one of the world’s leading rating agencies for sustainable investments. The ISS ESG rating considers envi- ronmental, social and governance (ESG) aspects by evaluating more than 100 industry-specific indicators with grades from A+ (best grade) to D-. Companies that achieve the best ESG scores among their sector peers are recognized as ‘Prime’. Barco was evaluated for the first time in 2019. We have a C+ score and are rated as a Prime company. With that result, we rank among the top 20% companies of the Electronic Devices & Appliances industry. Sustainalytics Sustainalytics’ ESG risk ratings measure how exposed a com- pany is to industry-specific ESG risks and how well it deals with these risks. The rating scale is made up of 5 risk levels ranging from severe risk to negligible risk. Based on the latest update (March 2020), the Barco rating is 11.2 (low risk). We rank 3rd out of 110 in the Electronics Equipment subindustry. Corporate knights Corporate Knights is a Canadian media and research com- pany producing rankings and financial product ratings based on corporate sustainability performance. The annual Global 100, launched in 2005, recognizes successful corporations that have been world leaders in environmental, social, and governance issues. For this Corporate Knights analyzes 8080 publicly-trading corporations with a revenue of more than USD $1 billion and applies 21 red flags and 24 key indicators including the percentage of clean revenue and investment, as well as carbon productivity. Barco Integrated report 2020 76 PPC Planet - People - Communities 01 SUSTAINABILITY AMBITION STATEMENT 02 SUSTAINABILITY STRATEGY 04 MANAGING SUSTAINABILITY 03 SUSTAINABILITY PERFORMANCE 2020 Integrated annual report Financial report ENABLING BRIGHT OUTCOMESbarco.com Table of contents This is the Governance & Risk Report section of Barco’s 2020 Integrated annual report. Other sections are available via the download center at ir.barco.com/2020. CORE MORE • Governance & risk report • Report on planet - people - communities • Financial report ANNEX • Assurance report • GRI Content index • Glossary 01 Barco consolidated.................................6 Notes to the consolidated financial statements..........26 Supplementary statements ...........................87 Barco NV...........................................89 02 Information about the share ...................... 94 Key figures for the shareholder........................95 Shareholder structure................................99 Barco’s investment case............................. 101 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 4 11 MATERIAL TOPICS Barco Integrated report 2020 2 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IFRS Financial Statements This chapter of the Annual Report contains the IFRS audited consolidated financial statements including the notes thereon, prepared in accordance with the International Financial Reporting Standards as adopted by the European Union. The chapter ‘Our results’ provides an analysis of trends and results of the 2020 financial year, and is based on the IFRS consolidated financial statements and should be read in con- junction with these statements. 14 18 19 20 21 1 2 3 5 6 7 8 9 10 12 13 15 17 16 4 11 MATERIAL TOPICS Barco Integrated report 2020 3 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Table of contents Barco Consolidated Consolidated statement of income ..........................................................................6 Statement of comprehensive income ........................................................................7 Consolidated balance sheet.................................................................................8 Consolidated statement of cash flow.........................................................................9 Consolidated statement of changes in equity ................................................................ 11 Significant IFRS accounting principles .......................................................................13 IFRS accounting standards adopted as of 2020 ...............................................................21 IFRS accounting standards issued but not yet eective as of 2020...............................................21 Critical accounting judgments and key sources of estimation uncertainty........................................22 Notes to the consolidated financial statements 1. Consolidated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 2. Operating Segments information .....................................................................28 3. Income from operations (EBIT) .......................................................................37 4. Revenues and expenses by nature ....................................................................42 5. Restructuring and impairment costs ..................................................................44 6. Income taxes ......................................................................................45 7. Earnings per share ..................................................................................46 8. Goodwill ..........................................................................................47 9. Other intangible and tangible fixed assets..............................................................50 10. Deferred tax assets – deferred tax liabilities.............................................................55 11. Investments and interest in associates ................................................................57 12. Inventory ..........................................................................................59 13. Amounts receivable and other non-current assets ......................................................60 14. Net financial cash/debt ..............................................................................62 15. Other long-term liabilities............................................................................66 16. Equity attributable to equity holders of the parent.......................................................67 17. Non-controlling interest .............................................................................71 Barco Integrated report 2020 4 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 18. Trade payables and advances received from customers .................................................73 19. Provisions .........................................................................................73 20. Risk management - derivative financial instruments .....................................................77 21. Operating leases ...................................................................................82 22. Rights and commitments not reflected in the balance sheet .............................................83 23. Related party transactions ...........................................................................84 24. Cash flow statement: eect of acquisitions and disposals ................................................84 25. Events subsequent to the balance sheet date...........................................................86 Supplementary statements ...................................................................................87 Free Cash Flow ........................................................................................87 Return on Operating Capital Employed ...................................................................88 Supplementary information.................................................................................. 89 Barco NV Balance sheet after appropriation ........................................................................90 Income statement .....................................................................................92 Proposed appropriation of Barco NV result ................................................................93 Barco Integrated report 2020 5 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO NOTE 2020 2019 2018 Sales 3 770,083 1,082,570 1,028,531 Cost of goods sold 3 -486,300 -653,274 -615,578 Gross profit 3 283,783 429,295 412,953 Research and development expenses 3(a) -102,610 -119,389 -120,279 Sales and marketing expenses 3(b) -112,329 -142,517 -147,723 General and administration expenses 3(c) -50,362 -57,632 -57,464 Other operating income (expense) - net 3(d) -8,302 280 2,488 Adjusted EBIT (a) 3 10,180 110,038 89,974 Restructuring and impairments 5 -14,513 - -17,000 Gain on change in control - - 16,384 EBIT 3 -4,332 110,038 89,358 Interest income 1,845 7,648 5,915 Interest expense -1,965 -1,866 -1,566 Income before taxes 6 -4,453 115,820 93,708 Income taxes 6 - -20,848 -16,586 Result after taxes -4,453 94,973 77,121 Share in the result of joint ventures and associates 11 -276 1,566 191 Net income -4,729 96,539 77,312 Net income attributable to non-controlling interest 17 -335 1,176 2,347 Net income attributable to the equity holder of the parent -4,393 95,363 74,965 Earnings per share (in euro) (b) 7 -0.05 1.09 0.86 Diluted earnings per share (in euro) 7 -0.05 1.07 0.85 Consolidated Statement of Income (a) Management considers adjusted EBIT to be a relevant performance measure in order to compare results over the period 2018 to 2020, as it excludes adjusting items. Adjusting items include restructuring costs and impairments and one-time gains such as on the sale of 9% shares of BarcoCFG in 2018. We refer to note 5 restructuring and impairment costs. (b) Earnings per share, restated for the stock split as implemented on 1/07/2020. Barco Integrated report 2020 6 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 Net income -4,729 96,539 77,312 Exchange dierences on translation of foreign operations (a) -29,625 5,250 952 Cash flow hedges Net gain/(loss) on cash flow hedges 62 -165 95 Income tax -15 30 -17 Net gain/(loss) on cash flow hedges, net of tax 46 -135 78 Other comprehensive income/(loss) to be recycled through profit and loss in subsequent periods -29,579 5,114 1,031 Remeasurement gains/(losses) on defined benefit plans 19 37 -11,337 -5,676 Deferred tax on remeasurement gains/(losses) on defined benefit plans 10 -9 2,834 1,419 Actuarial gains or losses, net of tax 28 -8,503 -4,256 Changes in the fair value of equity investments through other comprehensive income 11 18,331 1,852 Other comprehensive income/(loss) not to be reclassified to profit or loss in subsequent periods 18,358 -6,650 -4,256 Other comprehensive income/(loss) for the period, net of tax eect -11,221 -1,536 -3,226 Attributable to equity holder of the parent -8,764 -1,075 -3,303 Attributable to non-controlling interest -2,457 -461 77 Total comprehensive income/(loss) for the year, net of tax -15,950 95,003 74,086 Attributable to equity holder of the parent -13,157 94,288 71,662 Attributable to non-controlling interest -2,793 715 2,424 Statement of comprehensive income (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 realized or liquidated. The comprehensive income line commonly shows a positive result in case the foreign currency appreciates versus the Euro in countries where investments were made and a negative result in case the foreign currency depreciates. In 2020, the negative exchange dierences in the comprehensive income line were mainly booked on foreign operations held in Hong Kong Dollar, US Dollar, Indian Rupee and Norwegian Krone (see note 16.4). In 2019, the positive exchange dierences in the comprehensive income line were mainly booked on foreign operations held in US Dollar, Chinese Yuan and Hong Kong Dollar. In 2018, the positive exchange dierences in the comprehensive income line were mainly booked on foreign operations held in US Dollar and Hong Kong Dollar. The accompanying notes are an integral part of this income statement. Barco Integrated report 2020 7 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO NOTE 31 DEC 2020 31 DEC 2019 31 DEC 2018 Assets Goodwill 8 105,612 105,612 105,612 Other intangible assets 9.1 28,952 44,469 47,397 Land and buildings 9.1 74,220 83,665 57,777 Other tangible assets 9.1 49,254 51,804 51,003 Investments and interest in associates 106,942 43,288 19,105 Deferred tax assets 62,811 60,116 67,478 Other non-current assets 13 5,870 4,018 9,732 Non-current assets 433,662 392,972 358,103 Inventory 12 175,390 168,983 135,111 Trade debtors 13 146,138 195,358 161,787 Other amounts receivable 13 17,789 25,669 19,567 Short term investments 14 3,175 24,748 112,795 Cash and cash equivalents 14 235,402 357,035 251,807 Prepaid expenses and accrued income 6,646 9,409 8,131 Current assets 584,542 781,203 689,197 Total assets 1,018,203 1,174,176 1,047,301 Equity and liabilities Equity attributable to equityholders of the parent 16 659,309 700,060 633,267 Non-controlling interests 17 37,798 40,590 1,777 Equity 697,107 740,650 635,044 Long-term debts 14 35,854 40,225 29,882 Deferred tax liabilities 10 4,745 7,575 3,140 Other long-term liabilities 15 43,286 27,031 24,557 Long-term provisions 19 40,156 42,428 34,265 Non-current liabilities 124,042 117,259 91,845 Current portion of long-term debts 14 9,187 12,469 7,500 Short-term debts 14 86 - 686 Trade payables 18 70,299 128,914 105,148 Advances received from customers 18 42,375 69,515 53,747 Tax payables 7,478 9,893 11,370 Employee benefit liabilities (a) 32,284 54,652 51,314 Other current liabilities (b) 8,980 13,268 48,532 Accrued charges and deferred income 12,646 8,795 10,082 Short-term provisions 19 13,720 18,759 32,032 Current liabilities 197,054 316,266 320,412 Total equity and liabilities 1,018,203 1,174,176 1,047,301 Consolidated balance sheet The accompanying notes are an integral part of this statement. (a) Employee benefit liabilities are short term obligations and consist mainly of salaries, bonuses and holiday payments. (b) In 2018, other current liabilities include the contribution of the three minority shareholders in the capital of Cinionic Ltd., totaling 45% of the total capital contributions of USD 100 million. We refer to note 1.1 and the consolidated statement of cash flow for further information. Barco Integrated report 2020 8 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Consolidated statement of cash flow IN THOUSANDS OF EURO NOTE 2020 2019 2018 Cash flow from operating activities Adjusted EBIT 10,180 110,038 89,974 Restructuring 5 -9,536 -13,717 -2,882 Gain on sale of divestments 3(d) - - -743 Depreciation of tangible and intangible fixed assets 3,9 43,383 42,984 34,492 (Gain)/Loss on tangible fixed assets 170 -1,024 -149 Share options recognized as cost 3(d), 16 2,907 2,147 2,050 Share in the profit/(loss) of joint ventures and associates 11 -276 1,566 191 Gross operating cash flow 46,829 141,995 122,933 Changes in trade receivables 41,391 -32,160 -11,209 Changes in inventory -12,260 -32,989 334 Changes in trade payables -59,936 23,404 -1,306 Other changes in net working capital -23,960 15,618 -12,722 Change in net working capital -54,764 -26,126 -24,903 Net operating cash flow -7,936 115,868 98,030 Interest received 1,845 7,648 5,915 Interest paid -1,965 -1,866 -1,566 Income taxes (a) -10,398 -13,053 -12,460 Cash flow from operating activities -18,454 108,597 89,919 Cash flow from investing activities Purchases of tangible and intangible fixed assets -14,980 -20,169 -25,627 Proceeds on disposals of tangible and intangible fixed assets 488 2,379 922 Proceeds from (+), payments for (-) short term investments 14 21,573 88,047 -112,795 Acquisition of Group companies, net of acquired cash 1.3, 24 - -3,272 -5,621 Disposal of Group companies, net of disposed cash 1.3, 24 - - -32,558 Other investing activities (b) -55,530 -41,285 -2,972 Dividends from joint ventures and associates 2,492 7,284 10,499 Cash flow from investing activities (including acquisitions and divestments) -45,958 32,982 -168,152 Barco Integrated report 2020 9 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO NOTE 2020 2019 2018 Cash flow from financing activities Dividends paid -33,354 -28,680 -25,975 Capital increase 482 360 132 Sale of own shares 2,371 6,428 5,928 Payments (-) of long-term liabilities 20 -11,235 -22,359 -8,363 Proceeds from (+), payments of (-) short-term liabilities 20 2,103 3,033 -4,430 Advances on capital contribution from non-controlling interest (c) - - 37,906 Cash flow from financing activities -39,634 -41,218 5,198 Net increase (decrease) in cash and cash equivalents -104,045 100,362 -73,035 Cash and cash equivalents at beginning of period 357,035 251,807 321,514 Cash and cash equivalents (CTA) -17,588 4,866 3,328 Cash and cash equivalents at end of period 235,402 357,035 251,807 The accompanying notes are an integral part of this statement. (a) In 2020 € 5.9m withholding taxes were paid on dividends distributed from subsidiaries of Barco. (b) ‘Other investing activities’ relate mainly to investments in entities in which Barco owns less than 20% of the shares (55.5 million euro in 2020, 41.3 million euro in 2019 and 3.0 million euro in 2018) (see note 11 and 9.1). (c) We refer to notes 1.1 for the explanation on the cash contribution of the three minority shareholders in Barco Ltd. Barco Integrated report 2020 10 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 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 2018 201,908 457,053 7,511 -43,717 -1,100 -42,205 579,449 14,065 593,514 Net income - 74,965 - - - - 74,965 2,347 77,312 Dividend - -25,955 - - - - -25,955 - -25,955 Dividend distributed to non controlling interest - - - - - - - -7,724 -7,724 Capital and share premium increase 132 - - - - - 132 4 136 Other comprehensive income (loss) for the period, net of tax - -4,256 - 875 78 - -3,303 77 -3,226 Share-based payment - - 2,050 - - - 2,050 - 2,050 Exercise of options - - -515 - - 6,443 5,928 - 5,928 Gain on change in control - - - - - - - -6,992 -6,992 Balance on 31 December 2018 202,041 501,807 9,046 -42,842 -1,022 -35,762 633,267 1,777 635,044 Balance on 1 January 2019 202,041 501,807 9,046 -42,842 -1,022 -35,762 633,267 1,777 635,044 Net income - 95,363 - - - - 95,363 1,176 96,539 Dividend - -28,680 - - - - -28,680 - -28,680 Capital and share premium increase 360 - - - - - 360 - 360 Other comprehensive income (loss) for the period, net of tax - -6,260 - 5,320 -135 - -1,075 -461 -1,536 Deferred tax liability recognized on adoption IFRIC23 (a) - -6,500 - - - - -6,500 - -6,500 Share-based payment - - 2,147 - - - 2,147 - 2,147 Exercise of options (b) - - - - - 6,428 6,428 - 6,428 Dividend received - 366 - - - - 366 - 366 Increase in ownership interest, without change in control (c) - -1,617 - - - - -1,617 -1,815 -3,431 Decrease in ownership interest, without change in control (d) - - - - - - - 39,913 39,913 Balance on 31 December 2019 202,401 554,479 11,193 -37,522 -1,157 -29,334 700,060 40,590 740,650 Consolidated statement of changes in equity - Barco Integrated report 2020 11 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The accompanying notes are an integral part of this statement. (a) Uncertainty over income tax treatments has been applied from 1 January 2019. The group has reviewed their tax positions taken in the financial statements and in the tax filings and how these are supported. In addition, the Group has assessed how the taxation authorities might make their examinations and how issues that might arise from examinations could be resolved. Based on this assessment, a deferred tax liability was recorded in equity for an amount of 6.5 million euro on January 1 st , 2019. (b) See note 16. (c) See note 17. (d) Mid December 2018, three minority shareholders have contributed in the capital of Cinionic Ltd, totaling 45% of total contributions of USD 100 million. As of 1 January 2019, these capital contributions all give right to 45% in the Cinionic legal entities’ equity and result. Barco remains in control. Per 1 January 2019, the 45% stake in the capital contribution of USD 100 million is shown as non-controlling interest (39.9 million euro). See note 17. 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 2020 202,401 554,479 11,193 -37,522 -1,157 -29,334 700,060 40,590 740,650 Net income - -4,393 - - - - -4,393 -335 -4,729 Dividend - -33,354 - - - - -33,354 - -33,354 Capital and share premium increase 482 - - - - - 482 - 482 Other comprehensive income (loss) for the period, net of tax - 18,361 - -27,171 46 - -8,764 -2,457 -11,221 Share-based payment - - 2,907 - - - 2,907 - 2,907 Exercise of options (b) - - - - - 2,371 2,371 - 2,371 Balance on 31 December 2020 202,883 535,093 14,100 -64,693 -1,111 -26,962 659,309 37,798 697,107 Barco Integrated report 2020 12 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 1. Accounting principles 1.1. Statement of compliance and basis of presentation The consolidated financial statements of the Barco Group have been prepared in accordance with International Finan- cial Reporting Standards (IFRS), as adopted for use by the EU. All standards and interpretations issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) eec- tive year-end 2019 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, pension estimates and derivative financial instruments. The financial statements were authorized for issue by the board of directors on 8 February 2021. The chairman has the power to amend the financial statements until the shareholders’ meeting of 29 April 2021. 1.2. Principles of consolidation General The consolidated financial statements comprise the financial statements of the parent company, Barco NV (registered oce: 35 President Kennedypark, 8500, Kortrijk, Belgium), and its controlled subsidiaries and joint ventures, after the elimination of all intercompany transactions. Subsidiaries Subsidiaries are consolidated from the date the parent obtains control until the date control ceases. Acquisitions of sub- sidiaries are accounted for using the purchase method of accounting. Control exists when Barco is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to aect those returns through its power over the investee. The financial statements of sub- sidiaries are prepared according to the parent’s company reporting schedule, using consistent IFRS accounting policies. Significant IFRS accounting principles Non-controlling interest 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 and joint ventures The company has investment in joint ventures when it shares joint control with other investments, and it has rights to the net assets of these joint ventures. Investments in associated companies over which the company has significant influence (typically those that are 20-50% owned) and joint ventures are accounted for under the equity method of accounting and are initially recognized at cost. Thereafter the carrying amount of the investment is adjusted to recognize changes in the Group’s share of net assets of the associate since the acquisition date. The statement of profit or loss reflects the Group’s share of the results of operations of the associate, in ‘other operating income’ for associated companies and joint ventures with closely related business and in the line ‘share in the result of joint ventures and associates’ for all other associated companies and joint ventures. Investments in associated companies and joint ventures are presented as non-current asset on the face of the balance sheet on the line 'investments and interest in associates'. 2. Goodwill 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. 3. Research and development costs Research and development costs are expensed as incurred, except for development costs, which relate to the design and Barco Integrated report 2020 13 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE testing of new or improved materials, products or technolo- gies, which are capitalized to the extent that it is expected that such assets will generate future economic benefits and the recognition criteria of IAS38 are met. Shorter life cycles, unpredictability of which development projects will be suc- cessful, and the volatility of technologies and the markets in which Barco operates led the Board of Directors to conclude that Barco’s development expenses since 2015 no longer meet the criteria of IAS38.57. As the criteria of IAS38.57 are no longer fulfilled, capitalization of development expenses as of 2015 was not allowed. 4. Other intangible assets 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 upon initial recognition and are amortized over their economic lifetimes. Other intangible assets are amortized on a straight-line basis not exceeding 7 years. 5. Property, plant and equipment Property, plant and equipment are stated at cost less accu- mulated depreciation and accumulated impairment losses. Generally, depreciation is computed on a straight-line basis over the estimated useful life of the asset. When there is an indication that the item of property, plant and equipment is impaired, the carrying amounts are reviewed 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 recov- erable 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 - oce equipment 5 years - computer equipment 3 years - vehicles 5 years - demo material 1 to 3 years - leasehold improvements and finance leases: cfr under- lying asset, limited to outstanding period of lease contract A property, plant or equipment item 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. 6. Leases The Group has adopted IFRS 16 Leases on the Group’s finan- cial statements from 1 January 2019 and has applied the modified retrospective approach from 1 January 2019. Assets, representing the right to use the underlying leased asset, are capitalized as property, plant and equipment at cost, comprising the amount of the initial measurement of lease liability, any lease payments made at or before the commencement date less any lease incentives received, any initial direct costs and restoration costs. The corresponding lease liabilities, representing the net present value of the lease payments, are recognized as long-term or current liabilities depending on the period in which they are due. Leased assets and liabilities are recognized for all leases with a term of more than 12 months, unless the underlying asset is of low value. Barco Integrated report 2020 14 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The lease payments are discounted using the lessee’s incre- mental borrowing rate, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with simi- lar terms and conditions. The interest rate implicit in the lease could not be determined. Lease interest is charged to the income statement as an interest expense. Leased assets are depreciated, using straight-line deprecia- tion over the lease term, including the period of renewable options, in case it is probable that the option will be exer- cised. Accounting principle applied until 31/12/2018 Finance leases, which eectively transfer to the Group sub- stantially all risks and benefits incidental to ownership of the leased item, are capitalized as property, plant and equip- ment 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 cur - rent liabilities depending on the period in which they are due. Lease interest is charged to the income statement as a financial cost using the eective interest method. Capitalized leased assets are depreciated over the shorter of the esti- mated 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 eectively retains sub- stantially 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. 7. Investments - financial assets at fair value through profit and loss or other comprehensive income Investments are treated as financial assets at fair value through profit and loss or other comprehensive income and are initially recognized at cost, being the fair value of the consideration given. Subsequent fair value recognition through profit and loss or other comprehensive income is determined at moment of initial recognition. 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 impair- ment loss is recorded when the carrying amount exceeds the estimated recoverable amount. These investments are presented on the balance sheet on the line 'Investments and interest in associates'. Short-term investments are cash deposits with a maturity at inception in excess of 3 months and are intended to be held to maturity less than one year (solely payment of principle and interest). They are recognized at amortized cost, with the associated revenue in interest income. 8. Other non-current assets 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. 9. Financial assets The Group classifies its financial assets in the following cat- egories: financial assets at fair value and financial assets at amortized cost. The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. Management determines the classification of its financial assets at initial recognition. Barco Integrated report 2020 15 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Regular purchases and sales of financial assets are recognized on the trade date – the date on which the Group commits to purchase or sell an asset. At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Trans- action costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. Financial assets (such as loans, trade and other receivables, cash and cash equivalents) are subsequently measured at amortized cost using the eective interest method, less any impairment if they are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest. Trade and other receivables after and within one year are recognized initially at fair value and subsequently measured at amortized cost, i.e. at the net present value of the receiv- able amount, using the eective interest rate method, less allowances for impairment. The Group assesses on a for- ward-looking basis the expected credit loss associated with its financial assets carried at amortized cost. For trade receiv- ables, the Group applies the simplified approach permitted by IFRS 9 Financial instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables. The amount of the allowance is deducted from the carrying amount of the asset and is recognized in the income state- ment within other operating income. 10. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in first out (FIFO) or weighted average 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. Write os on inventories are applied on slow-moving inventory. The calculation of the allowance is based on consistently applied write o rules, which depend on both historical and future demand, of which the latter is subject to uncertainty due to rapid technological changes. 11. Revenue recognition We apply the five-step model to account for revenue arising from contracts with customers. Revenue is recognized at an amount that reflects the consideration to which we expect to be entitled in exchange for transferring goods or services to a customer. (a) Sale of goods Contracts with customers to sell equipment has only one performance obligation. Revenue recognition occurs at a point in time, when control of the asset is transferred to the customer, generally on delivery of the goods. The Group has following warranty options: the Group provides warran- ties for general repairs of which the Group determined that such warranties are assurance-type warranties which are accounted for under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. (b) Rendering of services The Group provides services within all segments. These services are sold either on their own in contracts with the customers or bundled together with the sale of equipment to a customer. The Group accounts for the equipment and service as separate deliverables of bundled sales and allocates consideration between these deliverables using the relative Barco Integrated report 2020 16 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE stand-alone selling prices. The Group recognizes service revenue by reference to the stage of completion. The Group recognizes the services over time given that the customer simultaneously receives and consumes the benefits provided by the Group. Consequently, the Group recognizes revenue for these service contracts/service components of bundled contracts over time rather than at a point of time. (c) Projects For revenue out of projects, the percentage of completion method is used, provided that the outcome of the project can be assessed with reasonable certainty. These projects generally have a lifetime of less than one year. The Group adopted IFRS 15 as from 1 January 2018, using the full retrospective method. The transition to IFRS 15 has not had a significant impact. 12. Government grants Government grants related to research and development projects and other forms of government assistance are recognized as income upon irreversible achievement and by reference to the relevant expenses incurred. 13. Trade debtors and other amounts receivable Trade debtors and other amounts receivable are shown on the balance sheet at amortized cost (in general, the original amount invoiced) less an allowance for doubtful debts and less an amount for expected credit losses. The allowance for doubtful debts 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, based on an aging analysis of the trade debtors. For the determination of the expected credit loss, the Group has applied the simplified approach and records lifetime expected losses on all trade receivables. This amount is determined on a portfolio basis. 4. Cash and cash equivalents 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. 15. Provisions 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 expe- rience 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 to those aected by the plan before the balance sheet date. On the line item ‘Long-term provisions’, the company pres- ents the net liability relating to the post-retirement benefit obligations which includes the Belgian defined-contribution pension plans that are by law subject to minimum guaranteed rates of return. Pension legislation was amended at the end of 2015 and defines the minimum guaranteed rate of return as a variable percentage linked to government bond yields observed in the market as from 1 January 2016 onwards. For 2020 the minimum guaranteed rate of return remains the same as in 2019 and 2018, i.e. 1.75% on employer contribu- tions and employee contributions. We refer to note 19 for more detailed information. As a consequence, the defined contribution plans have been accounted for as defined benefit plan. Barco Integrated report 2020 17 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 16. Equity – costs of an equity transaction The transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit. 17. Interest-bearing loans and borrowings 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 eective interest rate method. Amortized cost is calculated by taking into account any issue costs and any discount or premium on settlement. The eective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The eective interest rate is the rate that exactly discounts estimated future cash pay- ments (including all fees and points paid or received that form an integral part of the eective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. When a financial liability measured at amortized cost is modified without this resulting in derecognition, a gain or loss is recognized in profit or loss. The gain or loss is calcu- lated as the dierence between the original contractual cash flows and the modified cash flows discounted at the original eective interest rate. 18. Trade and other payables Trade and other payables are stated at amortized cost, which is the cost at recognition date. This is an approximation of the fair value. 19. Employee benefits 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. 20. Transactions in foreign currencies 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. 21. Foreign Group companies 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 dierences are classified in a separate component of ‘other comprehensive income’, until disposal of the investment. DECEMBER 31, 2020 DECEMBER 31, 2019 DECEMBER 31, 2018 CURRENCY CLOSING RATE AVERAGE RATE YEAR CLOSING RATE AVERAGE RATE YEAR CLOSING RATE AVERAGE RATE YEAR CNY 8.02 7.88 7.81 7.73 7.87 7.81 INR 89.66 84.74 80.08 78.83 79.80 80.72 USD 1.23 1.14 1.12 1.12 1.15 1.18 Barco Integrated report 2020 18 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 22. Derivative financial instruments 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. 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 estimated using valuation techniques which include forward pricing and swap models at the balance sheet date. Derivative financial instruments that are either hedging instru- ments 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 eective part of any gain or loss on the derivative financial instrument is recognized directly in ‘other comprehensive income’ with the ineective part recognized directly in profit and loss. Financial assets and liabilities are oset and the net amount is reported in the balance sheet when there is a legally enforce- able right to oset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. 23. Income taxes Current taxes are based on the results of the Group compa- nies and are calculated according to local tax rules. Deferred tax assets and liabilities are determined, using the liability method, for all temporary dierences 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 tem- porary dierences, 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 tempo- rary dierences, 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 sucient 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 liabil- ities are oset, if a legally enforceable right exists to set o current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority. The Group reviews their tax positions taken in the financial statements and in the tax filings and how these are sup- ported. In addition, the Group assesses how the taxation authorities might make their examinations and how issues that might arise from examinations could be resolved. Based on this assessment, a deferred tax liability is determined in line with IFRIC 23. 24. Impairment of assets 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 an impairment is necessary to reduce the asset to its recoverable amount (which is the higher of (i) value in use and (ii) fair value less costs to sell). The fair value Barco Integrated report 2020 19 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE less costs to sell is determined as (i) the fair value (that is the price that would be received to sell an asset in an orderly transaction in the principal market at the measurement date under current market conditions) less (ii) 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 (CGU) 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. 25. Share-based payment Barco created warrants for sta and non-executive directors as well as for individuals who play an important role in the company. According to the publication of IFRS 2, the cost of share-based payment transactions is reflected in the income statement. The warrants are measured 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 end of the vesting period. 26. Earnings per share 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 eect of warrants outstanding during the period. As diluted earnings per share cannot 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. 27. Discontinued operations and non-current assets held for sale 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. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale expected within one year from the date of the classification. Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for sale. 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 appli- cable IFRS. 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. Barco Integrated report 2020 20 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IFRS accounting standards adopted as of 2020 The Group applied for the first time certain standards and amendments, which are eective for annual periods begin - ning on or after 1 January 2020. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet eective. • Amendments to References to the Conceptual Framework in IFRS Standards, eective 1 January 2020 • Amendments to the guidance of IFRS 3 Business Combinations, eective 1 January 2020 • Amendments to the definition of material in IAS 1 and IAS 8, eective 1 January 2020 • Amendments to IFRS 9, IAS 39 and IFRS 7, eective 1 January 2020 • Amendment to IFRS 16 Leases Covid 19-Related Rent Concessions, eective 1 June 2020, with early application permitted None of these IFRS standards issued have an impact on Barco’s financials. IFRS accounting standards issued but not yet eective as of 2020 Standards issued but not yet eective The standards and interpretations that are issued, but not yet eective, up to the date of issuance of the Group’s financial statements are disclosed below. The Group intends to adopt these standards and interpretations, if applicable, when they become eective. • Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2, eective 1 January 2021. These amendments address issues that might aect financial reporting after the reform of an interest rate benchmark, including its replacement with alternative benchmark rates. The amendments are eective for annual periods beginning on or after 1 January 2021, with earlier application permitted. • Amendments to IAS 1 ‘Presentation of Financial Statements: Classification of Liabilities as current or non-current’ 1 , eective 1 January 2022 • Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and Contingent Assets as well as Annual Improvements 1 , eective 1 January 2022 None of the IFRS standards issued, but not yet eective are expected to have a material impact on Barco’s financials 1 Not yet endorsed by the European Union as at 31 December 2020 Barco Integrated report 2020 21 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Critical accounting judgments and key sources of estimation uncertainty General business risks We refer to the chapter ‘Risk management and control pro- cesses’ for an overview of the risks aecting businesses of the Barco Group. Over the year 2020, the economic impact of the pandemic related to the covid-19 virus has been aecting businesses all over the world – Barco included and is there- fore being addressed as additional risk. The risks described in this chapter are not the only risks facing the Company. Additional risks and uncertainties not cur- rently known to the Company or that the Company currently deems to be immaterial also may materially adversely aect its business, financial condition and/or operating results. Since Q1 2020, the covid-19 pandemic has been aecting businesses all over the world – including Barco. Risk description The public health crisis caused by the covid-19 pandemic, as well as measures taken in response to contain or mitigate the pandemic, have had, and are expected to continue to have, certain negative impacts on Barco’s business inclu- ding, without limitation, the following: • The demand, reflected by impact on orders and sales mainly in Barco’s Entertainment and Enterprise division • The profit and loss and operating results • The financial condition • Cash flows Approach: In this section, Barco addresses its risk mitigation plan related to the covid-19 pandemic impact. Overall approach Since the start of the corona virus outbreak (in China in January 2020) Barco has set up a dedicated global response team that is monitoring and supporting Barco’s operations and is focusing both on the safety and health of its employees, as well as on ensuring business continuity. Measures to keep employees safe • Hygiene, social distancing and track-and-trace measures As of February-March 2020 timeframe and taking into account local or regional sanitary & health regulations, the company strengthened personal hygiene measures throughout the organization, as well as business travel restrictions. Barco also expanded its home-work protocol and implemented social distancing measures for employ- ees in all its facilities. In addition, a track-and-trace system has been put in place to slow down a possible future spread of the virus. In 2020, Barco registered approximately 110 infected cases among its global employee force for which none of the infection sources appear to be within the com- pany. All related people have meanwhile recovered. Extra risk section regarding the consequences and impact of the covid-19 pandemic Barco Integrated report 2020 22 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE • Hybrid way of working Some of Barco’s oces have been closed for short periods during the year but have gradually reopened. As far as regulations and the local situation allowed, the com - pany applied unlocking measures and started bringing back employees while still taking into account local or regional regulations and recommendations. The company implemented a hybrid way of working with an alternate home-work protocol for its white collars. All oces have been updated according to the strengthened social dis- tancing and sanitary measures to ensure a covid-proof and flexible work environment. Operations and supply chain Mainly in the first half of 2020, Barco has experienced disrup- tions to its ability to operate its production facilities in some countries, and in the future, further disruptions to Barco’s ability to operate production facilities or distribution opera - tions cannot be excluded as a result of regulatory restrictions, safety protocols and heightened sanitation measures. While the Company experienced disruptions, Barco’s pro- active approach limited the delays towards our customers. • Barco’s parts supply base, its subcontractor operations and the logistics chain has seen disruption mainly in the months March and April 2020 but recovered near full operational capacity. • For Barco’s operations: - In China, operations were disrupted during February but recovered to near full capacity by the end of the first quarter 2020. - For the manufacturing sites in Europe, the operations team has organized production in order to match regulatory requirements with the objective of ensuring manufacturing capacity needed to support market demand. The respective logistics teams were able to secure a continued receiving of components and shipping of finished goods. - The India site (manufacturing of videowalls) was closed for a limited number of weeks in 2020 as a result of the regulatory lockdown-measures but production recovered and was able to meet market demand. Business health In the first quarter and as a result of lockdowns in China, Barco’s sales in China were halted during February and gradu- ally resumed as of March. Since then, the covid-19 pandemic has spread internationally, with negative eects mainly in Barco’s Entertainment and Enterprise markets. The negative impact was caused by both the economic impact of the pandemic on some of its markets as well as by the lockdown measures and related restrictions. Barco remained focused on business continuity and protec- tion of the business health. The company executed on a plan to align both its activity rate and spending with the impacts of the pandemic by resetting indirect cost levels, next to temporary measures and resource redeployments. • Aligning activity rate with market realities and customer demand Consequently, the company has implemented temporary work arrangements and economic unemployment mea- sures for both white and blue collars, in conformity with country specific legal frameworks, support mechanisms and regulations. The new work conditions varied depending on the re- gion, and Barco’s covid-19 response team reviewed the Barco Integrated report 2020 23 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE situation site by site, with the same objective to ensure business continuity while also considering all applicable covid regulations. The activity rate and cost containment measures also include ensuring a strong commitment to our customers through sales and servicing. • Adjusting the cost base and discipline in discretionary spending These measures – which can be adjusted again in line with future changes in the pandemic situation - also entail shifts in the planned investment patterns on selected long-term initiatives and a sustained strict discipline on discretionary spending. The Company made deliberate choices on the continua- tion and timetable of selected development projects based on current needs in the market and adjusting internal support levels in function of the focus shift. Furthermore, the Company was able to apply for wage subsidies under the newly enacted covid-19 relief legis- lation in APAC, Canada and Cinionic US. Strong funding and liquidity structure in place Barco has a strong balance sheet and ample liquidity. We refer to note 14 for more details on Barco’s net cash position. Barco has sucient headroom to enable it to conform to covenants on its existing borrowings. The Group complied with all requirements of the loan covenants on its available credit facilities throughout the reporting period. While the future may still bring some levels of headwind, Barco’s strong funding and liquidity structure in place should be more than sucient to ensure the going concern of the company. In addition, we refer to note 8 where we explain how we tested goodwill and all other non-current assets for impairment and concluded no impairment losses need to be recognized. Key sources of estimation uncertainty In view of the ongoing uncertainty surrounding the covid-19 global pandemic and the extent and duration of the impacts that it may have in particular on the global cinema, events and Enterprise business as well as the Company’s customers, suppliers and employees, there is heightened potential for future credit losses on receivables, inventory write downs, impairments of goodwill (see note 8) and valuation allowances against deferred tax assets that are based on future performance of the Company’s business. • Deferred tax assets are recognized for the carry-forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax cred- its can be utilized. In making its judgment, management considers elements such as long-term business strategy and tax planning opportunities (see note 10 ‘Deferred tax assets – deferred tax liabilities’). • Uncertain tax positions: The Group reviews their tax positions taken in the financial statements and in the tax filings and how these are supported. In addition, the Group assesses how the taxation authorities might make their examinations and how issues that might arise from exam- inations could be resolved. Based on this assessment, a deferred tax liability is determined in line with IFRIC 23. (see note 10 ‘ Deferred tax assets – deferred tax liabilities’). • Impairment of goodwill: the Group tests the goodwill for impairment annually or more frequently if there are indications that goodwill might be impaired. As a result of the events and factors described above, the Company performed a quantitative goodwill impairment test in June 2020 and the annual impairment test in the last quarter of 2020. (see note 8.’Goodwill’) Barco Integrated report 2020 24 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE • Write os on inventories: Inventories are stated at the lower of cost or net realizable value. The calculation of the allow - ance for slow-moving inventory is based on consistently applied write o rules, which depend on both historical and future demand, of which the latter is subject to uncer- tainty due to rapid technological changes. On top of the minimum rules, more severe rules are applied in case of for example the decision to stop a business unit or product line. The remaining inventory on hand is in that case ana- lyzed and reserved as appropriate. Inventory allowances are only reversed in case the above rules no longer apply or the written o inventory is sold or scrapped. (see note 12. Inventory) • Current expected credit losses: The Group assesses on a forward-looking basis the expected credit loss associated with its financial assets carried at amortized cost. For trade receivables, the Group applies the simplified approach permitted by IFRS 9 Financial instruments, which requires expected lifetime losses to be recognized from initial rec- ognition of the receivables. The ability of the Company to collect its accounts receivable balances is dependent on the viability and solvency of its business partners, distribu- tors and resellers, which is influenced by business behavior, which is on its turn influenced by consumer behavior and general economic conditions. Customers may experience financial diculties that could cause them to be unable to fulfill their payment obligations to the Company. The Company develops its estimate of credit losses by type of business and customer type, number of days overdue and historical loss rates which are then adjusted for specific receivables that are judged to have a higher than normal risk profile after taking into account management’s internal credit assessment, as well as macro-economic and industry risk factors. Moreover, the Company has a credit insurance in place for specific higher risk cinema contracts. For most of its cinema customers the Company was able to reach extended payment plans which most of its customers were honoring. For the year ended December 31, 2020, the Company recorded a provision for current expected credit losses of 1.5 million euro reflecting a reduction in the credit quality of specific cinema customers related accounts receivable as a result of the covid-19 global pandemic. Management’s judgements regarding expected credit losses are based on the facts available to management. Accounting treatment of development expenses Shorter life cycles, unpredictability of which development projects will be successful, and the volatility of technologies (more and more software development) and markets in which Barco operates led the Board of Directors to con- clude that Barco’s development expenses do not meet the criteria of IAS 38.57. As the criteria of IAS 38.57 are not ful- filled, our accounting policy, with respect to research and development costs, does not allow the capitalization of development expenses. Defined benefit obligations Defined benefits: the cost of the defined benefit pension plan (see note 19) and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may dier from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation, and its long-term nature, a defined obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed on reporting date. Barco Integrated report 2020 25 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Notes to the consolidated financial statements 1. Consolidated companies 1.1. List of consolidated companies on 31 December 2020 COUNTRY OF INCORPORATION LEGAL ENTITY REGISTERED OFFICE % Europe, Middle-East and Africa BELGIUM Barco Coordination Center NV Beneluxpark , Kortrijk BELGIUM BELGIUM Barco Integrated Solutions NV Beneluxpark , Kortrijk BELGIUM BELGIUM Cinionic bv Beneluxpark , Kortrijk BELGIUM FRANCE Barco SAS avenue Georges Clémenceau, Immeuble "Le Plein Ouest", Nanterre FRANCE GERMANY Barco Control Rooms GmbH Greschbachstrasse a, Karlsruhe GERMANY GERMANY Barco GmbH Greschbachstrasse a, Karlsruhe GERMANY ITALY Barco S.r.l. Via Monferrato , Corsico-MI ITALY ITALY FIMI S.r.l. c/o Studio Ciavarella, via Vittor Pisani n. , Milano ITALY NETHERLANDS Barco B.V. Zuidplein , WTC Tower H, Floor , XV Amsterdam NETHERLANDS NORWAY Barco Fredrikstad AS Habornveien , Gamle Fredrikstad NORWAY POLAND Barco Sp. z o.o. Annopol , - Warsaw POLAND RUSSIA Barco Services OOO Office , Floor , Kondratyuka str., , Moscow RUSSIAN FEDERATION SPAIN Barco Electronic Systems, S.A. Travessera de les Corts , Entlo. a, Barcelona SPAIN SWEDEN Barco Sverige AB c/o Grant Thornton, Box , Göteborg SWEDEN UNITED ARAB EMIRATES Barco Middle East L.L.C. Concord Tower, Suite , PO Box , Dubai Media City, Dubai UNITED ARAB EMIRATES UNITED KINGDOM Barco Ltd. Building , Doncastle Road, RG PE Bracknell, Berkshire UNITED KINGDOM Americas BRAZIL Barco Ltda. Av. Ibirapuera, , ° andar, conj , Torre II, Moema, - São Paulo BRAZIL CANADA MTT Innovation Incorporated Suite , Thurlow Street, VE C Vancouver, BC CANADA COLOMBIA Barco Colombia SAS Carrera , n° -, Torre Zimma Oficina , Bogota COLOMBIA MEXICO Barco Cine Appo Mexico, S.A. de C.V. Mariano Escobedo No. Piso Col. Anzures, C.P. D.F. México MEXICO MEXICO Barco Visual Solutions S.A. de C.V. Mariano Escobedo No. Piso Col. Anzures, C.P. D.F. México MEXICO UNITED STATES Barco, Inc. Orange Street, Wilmington DE UNITED STATES UNITED STATES Cinionic Inc. Prospect Park Drive, Rancho Cordova CA UNITED STATES * Barco Integrated report 2020 26 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE COUNTRY OF INCORPORATION LEGAL ENTITY REGISTERED OFFICE % Asia-Pacific AUSTRALIA Barco Systems Pty. Ltd. Rocklea Drive, VIC Port Melbourne AUSTRALIA CHINA Barco Trading (Shanghai) Co., Ltd. Room , No. , Fenyang Road, Shanghai CHINA CHINA Barco Visual (Beijing) Electronics Co., Ltd.. No. Changsheng Road, Zhong Guan Cun Science Park, Chang Ping District, Beijing CHINA CHINA Barco Visual (Beijing) Trading Co., Ltd.. No. Changsheng Road, Chang Ping Park, Zhong Guan Cun Science Park, Chang Ping District, Beijing CHINA CHINA Barco China Electronic Visualization Technology (Nanjing) Co., Ltd. No., Hengtong Road, Nanjing development zone, Nanjing, Jiangsu CHINA CHINA Barco Visual (Suzhou) Electronics Co., Ltd . Room , No. , Suhong West Road, Suzhou Industrial Park, Suzhou CHINA HONG KONG Barco Ltd. Suite -, /F, Prosperity Center, Chong Yip Street, Kwun Tong, Kowloon HONG KONG HONG KONG Barco Visual Electronics Co., Ltd. Suite -, /F, Prosperity Center, Chong Yip Street, Kwun Tong, Kowloon HONG KONG HONG KONG Barco China (Holding) Ltd. Suite -, /F, Prosperity Center, Chong Yip Street, Kwun Tong, Kowloon HONG KONG HONG KONG Cinionic Limited Suite -, /F, Prosperity Center, Chong Yip Street, Kwun Ton, Kowloon HONG KONG HONG KONG Barco CEC (Hong Kong) Limited Suite -, /F, Prosperity Center, Chong Yip Street, Kwun Ton, Kowloon HONG KONG INDIA Barco Electronic Systems Pvt. Ltd. c/o Perfect Accounting & Shared Services P.Ltd., E-, st & nd Floor, Main Market, Hauz Khas, New Delhi INDIA JAPAN Barco Co., Ltd. Yamato International Bldg F, -- Heiwajima, Ota-ku, - Tokyo JAPAN MALAYSIA Barco Sdn. Bhd. No. A, Jalan SS/B, Damansara Utama, Petaling Jaya, Selangor MALAYSIA SINGAPORE Barco Singapore Private Limited G Pasir Panjang Road Interlocal Center, Singapore SINGAPORE SOUTH KOREA Barco Korea Ltd. Youngdong-daero -gil, Gangnam-gu, Seoul KOREA, REPUBLIC OF TAIWAN Barco Limited F., No. , Xinzhan Rd., Banqiao Dist., New Taipei City TAIWAN, PROVINCE OF CHINA TAIWAN Barco Taiwan Technology Ltd. No. , Ti Tang Gang Rd., Feng Hua Village, Xin Shi District, Tainan City TAIWAN, PROVINCE OF CHINA () Barco has control over the relevant activities of the entity by virtue of a contractual agreement with the local investor Barco Integrated report 2020 27 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 1.2. List of equity accounted companies on 31 December 2020 Exemption of publishing financial statements and management report according German legislation §264 Abs. 3 HGB : Following subsidiary-companies will be released of publishing their financial statements and management report 2020: • Barco GmbH • Barco Control Rooms GmbH These companies are included in the consolidation scope of Barco Consolidated 2020 as listed above. Exemption of publishing Financial Statements and management report according UK legislation section 479A of the Companies Act 2006: Following subsidiary-companies will be released of publishing their financial statements and management report 2020: • Barco Ltd. COUNTRY OF INCORPORATION LEGAL ENTITY REGISTERED OFFICE % Americas UNITED STATES CCO Barco Airport Venture LLC Corporation Trust Center, Orange Street, Wilmington DE UNITED STATES Asia-Pacific CHINA CFG Barco (Beijing) Electronics Co., Ltd. - No. Changsheng Road, Chang Ping Park, Zhong Guan Cun Science Park, Chang Ping District, Beijing CHINA Barco Integrated report 2020 28 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 1.3. Acquisitions/investments and divestments 2020 and 2019 Barco did not close any acquisition or divestment agreements in 2020 and 2019. 2018 Divestment of X2O Media On March 28 th , 2018 Barco reached an agreement with US-based market leader in digital signage Stratacache to sell 100% of its shares in the Montréal-based X2O Media entity for an amount of 0.9 million US dollar (0.8 million euro), of which 0.3 million US dollar (0.2 million euro) was put in escrow over a period of twenty-four months (with projected full release on April 2020). This escrow amount was not recognized in profit and loss in 2018. Closing of the transaction happened on April 13, 2018. The transaction was cash and debt free. The purchase agreement includes a price correction linked to the closing net working capital for a calculated total of 0.9 million euro. The operating results of the X2O Media (part of the Enterprise division) entity including the gain on the transaction resulted in 0.5 million euro result in 2018. We refer to note 24 'Cash flow statement: eect of acquisi- tions and disposals' for impact on the cash flow of the Group. Barco Integrated report 2020 29 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 2.1. Basis of operating segments information Barco is a global technology company developing solutions for three main markets, which is also reflected in its divisional structure: Entertainment, Enterprise and Healthcare. - Entertainment 1 : the Entertainment division is the combi- nation of the Cinema and Venues & Hospitality activities, which includes Professional AV, Events and Simulation activities. - Enterprise: the Enterprise division is the combination of the Control Rooms activities and the Corporate activities. ClickShare is the main contributor to the Corporate activity. - Healthcare: the Healthcare division includes the activities in Diagnostic Imaging (Diagnostic and Modality Imaging) and in Surgical. No operating segments have been aggregated to form the above reportable operating segments. 2. Operating segments information 1 The projection activity related to virtual reality solutions has been transferred from the Enterprise division to the Entertainment division to further optimize the development and commercialization. With a sales contribution of approximately 8 million euro per semester, this transfer is not considered material, and therefore the 2019 financials are not restated. The CEO and his core leadership team monitor the results of each of the three divisions separately, so as to make decisions about resource allocation and performance assessment and consequently, the divisions qualify as operating segments. These operating segments do not show similar economic characteristics and do not exhibit similar long-term financial performance, therefore cannot be aggregated into report- able segments. 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. Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties. We refer to 'Our markets' for more explanation on the activ- ities performed by each division. Barco Integrated report 2020 30 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 Variance 2020 - 2019 Variance 2019 - 2018 Net sales 291,433 100.0% 455,125 100.0% 447,611 100.0% -36.0% 1.7% Cost of goods sold -208,584 -.% -311,955 -.% -304,273 -68.0% -33.1% 2.5% Gross profit 82,849 .% 143,170 .% 143,337 32.0% -42.1% -0.1% EBITDA 287 .% 43,310 .% 32,879 7.3% -99.3% 31.7% Depreciation TFA and (acquired) intangibles 19,989 .% 18,292 .% 15,906 3.6% 9.3% 15.0% Adjusted EBIT -19,702 -.% 25,019 .% 16,974 3.8% -178.7% 47.4% Capital expenditures TFA and software 8,177 .% 7,515 .% 11,445 2.6% 8.8% -34.3% Interest in associates 19,713 20,073 18,927 Segment assets 285,370 307,832 239,194 Segment liabilities 117,648 169,700 140,225 2.2. Entertainment As a result of contractions in business activity in all regions related to the pandemic beginning in Q2, Entertainment sales declined 36% for the year. The fourth quarter topline evolution however reflects first signs of recovery mainly driven by projects in the ProAV and Cinema-market led by China. During 2020, the Cinema activity accounted for approximately 50% of the divisional sales down from 58% in 2019. EBITDA for 2020 was break-even, as the lower topline has led to a decline in gross profit and a negative operating leverage eect on fixed costs. We refer to 'Our results' and 'Risk management and control processes' for more explanation. As of the second half year of 2018 BarcoCFG is no longer consolidated. Projector sales of Barco to BarcoCFG are as of 1 July 2018, part of sales, while the external sales of BarcoCFG to their customers are no longer included (impact of 39.5 million euro lower sales in 2019 compared to 2018; exclud- ing this impact Entertainment sales in 2019 are 11.5% higher than in 2018). As of July 1 st , 2018, the results of BarcoCFG are accounted for under the equity method and are presented as part of the Group and Entertainment EBITDA (2020: 3.5 million euro, 2019: 6.2 million euro, 2H18: 2.8 million euro (49% of net result BarcoCFG). For the investments in associates we refer to note 11. In 2018, Barco took a strategic decision to strengthen the cinema of the future by moving global, excluding China, cinema related sales, marketing and service activities to Cinionic. We refer to note 1.1 for the Cinionic legal entities incorporated in 2018. Mid December 2018, three minority shareholders have contributed in the capital of Barco Ltd. Hong Kong, totaling 45% of the total contributions of USD 100 million. As of 1 January 2019, these capital contributions all give right to 45% in the Cinionic legal entities’ equity and result. Barco remains in control. Therefore, the non-China cinema sales, marketing and service activities remain con- solidated in the Entertainment results in 2019. The 45% stake is shown as non-controlling interest as of 1 January 2019. Barco Integrated report 2020 31 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 2.4. Healthcare IN THOUSANDS OF EURO 2020 2019 2018 Variance 2020 - 2019 Variance 2019 - 2018 Net sales 261,856 100.0% 268,774 100.0% 245,006 100.0% -2.6% 9,7% Cost of goods sold -166,115 -.% -165,918 -.% -147,070 -.% 0.1% 12,8% Gross profit 95,741 .% 102,856 .% 97,936 .% -6.9% 5,0% EBITDA 35,030 .% 35,660 .% 30,642 .% -1.8% 16,4% Depreciation TFA and (acquired) intangibles 13,362 .% 9,354 .% 5,062 .% 42.9% 84,8% Adjusted EBIT 21,668 .% 26,307 .% 25,580 .% -17.6% 2,8% Capital expenditures TFA and software 3,368 .% 4,225 .% 5,745 .% -20.3% -26,5% Segment assets 127,180 126,199 107,725 Segment liabilities 49,398 60,913 56,149 2.3. Enterprise IN THOUSANDS OF EURO 2020 2019 2018 Variance 2020 - 2019 Variance 2019 - 2018 Net sales 216,794 100.0% 358,671 100.0% 335,914 100.0% -39.6% 6.8% Cost of goods sold -111,601 -.% -175,402 -.% -164,237 -.% -36.4% 6.8% Gross profit 105,193 .% 183,269 .% 171,677 .% -42.6% 6.8% EBITDA 18,246 .% 74,051 .% 60,944 .% -75.4% 21.5% Depreciation TFA and (acquired) intangibles 10,033 .% 15,339 .% 13,525 .% -34.6% 13.4% Adjusted EBIT 8,214 .% 58,712 .% 47,420 .% -86.0% 23.8% Capital expenditures TFA and software 3,436 .% 8,428 .% 8,436 .% -59.2% -0.1% Segment assets 137,786 168,275 158,563 Segment liabilities 53,299 78,147 81,605 The Enterprise division posted a 40% decline in sales and orders for the year and an 8% EBITDA margin down from 22%. While Control Rooms started the first half weaker due to project delays and a softer Oil & Gas market, demand for the ClickShare portfolio fell steeply in the second quarter as a result of pandemic related lockdowns and oces being closed. Overall Enter- prise sales began to recover in the third and fourth quarter with gradual pick-up in both the Control Rooms and the Corporate subsegments. In terms of the sales mix, the Corporate activity accounted for about 51% of Enterprise sales for 2020 versus 58% of Enterprise sales for 2019. Healthcare posted stable year-over-year results with orders slightly up, sales slightly down and EBITDA margin essentially flat. After a strong first half with high single digit growth in sales, the third quarter slowed down as customers reset delivery sched- ules based on shifts in hospital spending priorities. The fourth quarter reflected a rebound driven partially by deployments of projects pushed out from the third quarter and partially by stabilizing of the Healthcare markets. Barco Integrated report 2020 32 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 2.5. Reconciliation of segment information with group information IN THOUSANDS OF EURO 2020 2019 2018 External sales Entertainment 291,433 455,125 447,611 At a point in time 255,694 88% 410,883 90% 407,677 91% Over time 35,739 12% 44,242 10% 39,934 9% Enterprise 216,794 358,671 335,914 At a point in time 153,435 71% 271,956 76% 222,793 66% Over time 63,359 29% 86,715 24% 113,121 34% Healthcare 261,856 268,774 245,006 At a point in time 258,026 99% 264,580 98% 240,327 98% Over time 3,830 1% 4,193 2% 4,679 2% Total external sales segments 770,083 1,082,570 1,028,531 At a point in time 667,155 87% 947,420 88% 870,797 85% Over time 102,928 13% 135,150 12% 157,734 15% Net Income EBITDA Entertainment 287 43,310 32,879 Enterprise 18,246 74,051 60,944 Healthcare 35,030 35,660 30,642 Depreciation and other amortizations Entertainment 19,989 18,292 15,906 Enterprise 10,033 15,339 13,525 Healthcare 13,362 9,354 5,062 Adjusted EBIT Entertainment -19,702 25,019 16,974 Enterprise 8,214 58,712 47,420 Healthcare 21,668 26,307 25,580 Total adjusted EBIT 10,180 110,038 89,974 Restructuring and impairments -14,513 - -17,000 Gain on change in control - - 16,384 Impact of covid-19 on Healthcare topline was limited, fueled by sustained demand in diagnostic imaging, while hospitals postponed elective surgeries and surgical investments. We refer to ‘Our results’ and ‘Risk management and control processes’ for more explanation. Barco Integrated report 2020 33 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The total over time revenues relate to project sales mainly in the Enterprise division (Control Rooms activities) and to recurring service revenues generated on maintenance contracts. IN THOUSANDS OF EURO 2020 2019 2018 EBIT -4,332 110,038 89,358 Interest income (expense) - net -121 5,782 4,350 Income/(loss) before taxes -4,453 115,820 93,708 Income taxes - -20,848 -16,586 Result after taxes -4,453 94,973 77,121 Share in the result of joint ventures and associates -276 1,566 191 Net income -4,729 96,539 77,312 Net income attributable to non-controlling interest -335 1,176 2,347 Net Income attributable to the equity holder of the parent -4,393 95,363 74,965 Barco Integrated report 2020 34 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 Assets Segment assets Entertainment 285,370 307,832 239,194 Enterprise 137,786 168,275 158,563 Healthcare 127,180 126,199 107,725 Total segment assets 550,336 602,306 505,482 Deferred tax assets 62,811 60,116 67,478 Short term investments 3,175 24,748 112,795 Cash and cash equivalents 235,402 357,035 251,807 Other non-allocated assets 166,479 129,971 109,740 Total assets 1,018,203 1,174,176 1,047,301 Liabilities Segment liabilities Entertainment 117,648 169,700 140,225 Enterprise 53,299 78,147 81,605 Healthcare 49,398 60,913 56,149 Total segment liabilities 220,344 308,760 277,979 Equity attributable to equityholders of the parent 659,309 700,060 633,267 Non-controlling interest 37,798 40,590 1,777 Long-term debts 35,854 40,225 29,882 Deferred tax liabilities 4,745 7,575 3,140 Current portion of long-term debts 9,187 12,469 7,500 Short-term debts 86 - 686 Other non-allocated liabilities 50,880 64,496 93,070 Total equity and liabilities 1,018,203 1,174,176 1,047,301 Barco Integrated report 2020 35 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 2.6. Geographic information Management monitors sales of the Group based on the regions to which the goods are shipped or the services are rendered in three geographical regions Europe, Americas (North-America and LATAM) and Asia-Pacific (APAC). We refer to the ‘Comments on the group results’ 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 10% of the Group’s revenue) concentration of Barco’s revenues with one customer. Sales to Belgium represent 23 million euro of the Group revenues in 2020 versus 36 million euro in 2019 and 32.3 million in 2018. In 2020, non-current assets in Belgium amount to 158.5 million euro (rest of the world 275.1 million euro); in 2019 165.5 million euro (rest of the world 227.3 million euro) and in 2018 163.2 million euro (rest of the world 195.2 million euro). 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 2020 2019 2018 Net sales Europe 280,280 .% 402,149 .% 367,488 .% Americas 296,942 .% 426,806 .% 369,834 .% Asia-Pacific 192,862 .% 253,614 .% 291,210 .% Total 770,083 % 1,082,570 % 1,028,531 % Total assets Europe , .% , .% , .% Americas 222,214 .% 247,345 .% 200,037 .% Asia-Pacific 340,059 .% 412,947 .% 395,551 . % Total 1,018,203 % 1,174,176 % 1,047,301 % Purchases of tangible and intangible fixed assets (excl. IFRS 16) Europe 7,315 .% 9,977 .% 16,898 .% Americas 1,441 9.6% 3,546 17.6% 2,234 9.4% Asia-Pacific 6,224 41.5% 6,645 32.9% 4,677 19.6% Total 14,980 100% 20,169 100% 23,809 100% Barco Integrated report 2020 36 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 3. Income from operations (EBIT) IN THOUSANDS OF EURO 2020 2019 2018 Sales 770,083 1,082,570 1,028,531 Cost of goods sold -486,300 -653,274 -615,578 Gross profit 283,783 429,295 412,953 Gross profit as % of sales 36.9% 39.7% 40.1% Indirect costs -265,300 -319,538 -325,467 Other operating income (expenses) - net -8,302 280 2,488 Adjusted EBIT 10,180 110,038 89,974 Adjusted EBIT as % of sales 1.3% 10.2% 8.7% Restructuring and impairments -14,513 - -17,000 Gain on change in control - - 16,384 EBIT -4,332 110,038 89,358 EBIT as % of sales -0.6% 10.2% 8.7% The low 2020 topline (-28.9% year-over-year) is caused by the negative impact of the covid-19 pandemic on Barco’s Entertainment and Enterprise markets. The lower gross profit margin in 2020, down with 2.8 percentage points versus 2019 is primarily resulting from negative mix eect (lower sales Enterprise), higher logistics costs and indirect overhead costs weighing on the lower topline. Lower indirect costs (-54 million euro), as a result of measures taken to align the activity rate with market realities and customer demand, could not compensate for the 145 million euro margin losses, resulting in an adjusted EBIT margin of 1.3% in 2020. 2019 sales were 5.3% higher than 2018 sales. The slightly lower gross profit margin in 2019 compared to 2018 is due to cost of quality related to factory transfers and volume ramp-up transition costs, in Entertainment and Healthcare. The solid gross profits together with lower indirect costs, as a result of the execution of the in 2018 announced restruc- turing plan, resulted in an EBIT margin of 10.2% in 2019, a step-up of 1.5 percentage points versus 2018 (2018: 8.7%) EBIT in 2020 includes restructuring costs related to the clo- sure of the Taiwanese Unisee Liquid Crystal Module (LCM) production factory and to reorganizations in the Entertain- ment and Enterprise divisions caused by the economic impact of the covid-19 pandemic (14.5 million euro). EBIT in 2019 does not include any adjusting items. In 2018 EBIT included following adjusting items: restructuring costs (17 million euro) and gain realized on the sale of 9% of the shares of BarcoCFG (16.4 million euro), totaling net -0.6 mil- lion euro. For more details on adjusting items we refer to note 5. Restructuring and impairment. Barco Integrated report 2020 37 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The negative impact of the pandemic on the company’s topline and gross profit margins has halted the past years trajectory of continued profit improvement, with an EBITDA margin up 2 percentage points in both 2019 and 2018 ver- sus the year before. In 2020 EBITDA margin is 7% on sales, compared to 14.1% in 2019 and 12.1% in 2018. IN THOUSANDS OF EURO 2020 2019 2018 Product sales 639,667 83% 905,366 84% 835,779 81% Project sales 55,743 7% 75,776 7% 96,382 9% Service sales 74,673 10% 101,428 9% 96,369 9% Sales 770,083 1,082,570 1,028,531 Major part of the sales relates to product sales (in 2020: 83%, in 2019: 84%, in 2018: 81%). Project sales include combined sales from products, installations and services and were declining from 2018 to 2019 as a result of declining project sales in the control rooms business after the launch of Unisee (product sales) in 2018. In 2020 the share of project sales remains stable compared to 2019. Most of these project sales have a lifetime of less than one year. The share of service sales in 2020 is 10% of total sales (2019, 2018: 9%). We refer to note 2.Segment Information and to the chapter ‘Our results’ for more explanation on sales and income from operations. IN THOUSANDS OF EURO NOTE 2020 2019 2018 Adjusted EBIT 10,180 110,038 89,974 Depreciations and amortizations 9 43,383 42,984 34,492 EBITDA 53,563 153,022 124,466 EBITDA as % of sales 7.0% 14.1% 12.1% Barco Integrated report 2020 38 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Indirect costs and other operating income (expenses) - net IN THOUSANDS OF EURO 2020 2019 2018 Research and development expenses (a) -102,610 -119,389 -120,279 Sales and marketing expenses (b) -112,329 -142,517 -147,723 General and administration expenses ( c ) -50,362 -57,632 -57,464 Indirect costs -265,300 -319,538 -325,467 Other operating income (expenses) - net (d) -8,302 280 2,488 Indirect costs and other operating income (expenses) - net -273,603 -319,258 -322,979 Indirect costs are significantly lower in 2020 compared to 2019 as a result of measures taken to align the activity rate with market realities and customer demand. The company has implemented temporary work arrangements and eco- nomic unemployment measures for both white and blue collars, in conformity with country specific legal frameworks, support mechanisms and regulations. These measures also entailed shifts in the planned investment patterns on selected long-term initiatives and a sustained strict discipline on dis- cretionary spending. Furthermore, the company was able to apply for wage sub- sidies under the newly enacted Covid-19 relief legislation in the APAC region, Canada and Cinionic US. The total impact on the 2020 full year result of those subsidies received amounts 3.4 million euro. The negative impact on the company’s topline was higher than the reduction in indirect costs via cost measures could compensate for. Consequently, indirect costs as percentage of sales, despite a decline of 54.2 million euro, increased over the last year representing 34.5% of sales in 2020 versus 29.5% of sales in 2019 and 31.6 % of sales in 2018. Research and development activities are spread over the divisions as follows: (a) Research and development expenses IN THOUSANDS OF EURO 2020 % of sales 2019 % of sales 2018 % of sales Entertainment 40,533 14% 49,398 11% 49,216 11% Enterprise 30,582 14% 42,137 12% 43,751 13% Healthcare 31,495 12% 27,853 10% 27,312 11% Total Research & development expenses 102,610 119,389 120,279 In 2020 research and development expenses represent 13.3% of sales in 2020 (11.0% in 2019; 11.7% in 2018). The relative increase is explained by the lower 2020 sales, which cost saving measures could not fully compensate. Barco Integrated report 2020 39 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE (c) General and administration expenses IN THOUSANDS OF EURO 2020 % of sales 2019 % of sales 2018 % of sales General and administration expenses 50,362 6.5% 57,632 5.3% 57,464 5.6% General and administration expenses include the costs related to information technology, finance and accounting, general and divisional management, human resources, legal and investor relations. Expenses have decreased with 7.3 million euro as a result of the covid-related measures taken. As percentage of sales, expenses have increased to 6.5% of sales as the topline decrease exceeded the impact of the cost measures. In 2019, general and administration cost amounted to 5.3% of sales, a year-over-year decrease, resulting from further investing in IT infrastructure and executing the 2018 restructuring plan (2018: 5.6%). Steady investments in IT sys- tems over the past years have led to IT costs (including also amortizations on SAP ERP system) representing the major part of G&A expenses (2020: 45%, 2019: 40%). 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 2020 the relative increase and absolute decrease in sales and marketing expenses is explained by the impact of the covid-19 pandemic on the company’s sales and related cost measures taken. In 2019, decreased sales and marketing expenses are a result of the executed restructuring plan in the areas of product management and commercial and service delivery pro- cesses. (b) Sales and marketing expenses IN THOUSANDS OF EURO 2020 % of sales 2019 % of sales 2018 % of sales Sales and marketing expenses 112,329 14.6% 142,517 13.2% 147,723 14.4% Barco Integrated report 2020 40 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE (d) Other operating income (expense) – net (a) As of July 2018, BarcoCFG is accounted for under the equity method. The 49% share in the net result of BarcoCFG is represented in EBITDA. See note 11. As a result of the covid-19 global pandemic impact on the cinema business, also the results of the Chinese cinema joint-venture are in 2020 lower than in 2019 and 2018. In 2018 only half year result is included in other operating income, as until June 2018, the results of BarcoCFG were consolidated. (b) For the year ended December 31, 2020, the Company recorded a provision for current expected credit losses of 1.5 million euro reflecting mainly a reduction in the credit quality of specific cinema customers related accounts receivable as a result of the covid-19 global pandemic. (c) We refer to note 19.Provisions (d) In 2018 gain on divestment relates to the sale of X2O Media. We refer to note 1.3. Acquisitions and divestments for more explanation. IN THOUSANDS OF EURO NOTE 2020 2019 2018 Share in the result of BarcoCFG (a) 3,507 6,296 2,799 Bad debt provisions (net of write-os and reversals of write-os) (b) -, Cost of share-based payments -, -, -2,050 Exchange gains and losses (net) -, -, -794 Other provisions (net of additions and reversals of provisions) (c) -, Bank charges - - - Customer financial discounts - - -762 Gain on divestments (d) - - Gains/(Loss) on disposal of tangible fixed assets , Other (net) , - Total -, , Barco Integrated report 2020 41 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The table below provides information on the major items contributing to the adjusted EBIT, categorized by nature. Personnel cost in 2020 is 51.9 million euro lower than 2019 as a result of temporary measures and executed restruc- turing lay-os (see note 5. Restructuring and impairments) to align costs with lower demand as a result of the impact of the covid-19 pandemic on the company’s markets. The company has implemented temporary work arrangements and economic unemployment measures for both white and blue collars, in conformity with country specific legal frame- works, support mechanisms and regulations. The lower 2020 personnel costs is in part explained by the fact that there is no bonus included (see ‘Remuneration report for financial year 2020’). These measures also entailed shifts in the planned investment patterns on selected long-term initiatives and a sustained strict discipline on discretionary spending (e.g. travel, mar- keting spend, consulting, ...). The company made deliberate choices on the continuation and timetable of selected development projects based on current needs in the market and future opportunities and adjusted internal support levels in function of the focus shift. This has resulted in 32.7 million lower services and other costs. Furthermore, the company was able to apply for wage sub- sidies under the newly enacted Covid-19 relief legislation in the APAC region, Canada and Cinionic US. The total impact on the 2020 full year result of those subsidies received amounts 3.4 million euro. IN THOUSANDS OF EURO 2020 2019 2018 VARIANCE 20202019 VARIANCE 20192018 Sales 770,083 1,082,570 1,028,531 -29% 5% Material cost -, -% -, -% -, -% -% % Services and other costs -, -% -, -% -, -% -% -% Personnel cost (a) -, -% -, -% -, -% -% % Depreciation property, plant, equipment and software -, -% -, -% -, -% % % Other operating income (expense) - net (note 3(d)) -, -% % , % Adjusted EBIT , % , % , % -% % 4. Revenues and expenses by nature Barco Integrated report 2020 42 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 Wages and salaries -189,654 -231,990 -227,808 Social security contributions -, -, -, Pension expense for defined benefit plans -, -, -, Temporary labour -, -, -, Recruiting expenses -, -, -, Other personnel cost -, -, -, Personnel cost -, - , -, 2020 2019 2018 Barco NV (parent company) 1,282 1,190 1,242 Other subsidiaries , , , Total average number of full time equivalents , , , (a) Personnel cost Personnel cost includes the cost for temporary personnel for an amount of 2.4 million euro (in 2019: 5.3 million euro, in 2018: 4.3 million euro). The average number of full time equivalents can be split as follows: Average number of employees in 2020 was 3,519 (versus 3,590 in 2019; 3,592 in 2018), including 2,738 white-collars (in 2019: 2,688, in 2018: 2,715) and 781 blue-collars (in 2019: 902, in 2018: 877). Full time equivalents at year end 2020 was 3,317 (versus 3,646 end of 2019; 3,563 end of 2018), including 2,671 white collars (2019: 2,728, 2018: 2,699) and 646 blue collars (in 2019: 918, in 2018: 864). Barco Integrated report 2020 43 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The table below shows the restructuring and impairment costs recognized in the income statement. Please refer to note 9.2 for impairment on tangible fixed assets. Restructuring costs include cash costs (mainly lay-o costs) (2020: 7.2 million euro, 2019: 0 million euro, 2018: 17 million euro) and non-cash impairment costs (2020: 7.3 million euro, 2019 and 2018: 0 million euro). Restructuring costs in 2020 related to the closure of the Taiwanese Unisee LCM production factory and to reorganiza- tions in the Entertainment and Enterprise divisions caused by the economic impact on our markets of the pandemic with the purpose to adjust cost levels to the lower topline but also with the aim to have the right focus. All 412 people impacted have been informed before the end of 2020. Restructuring cash costs include a provision for severance of 3.7 million euro per 31 December 2020 (see note 19. Provisions), major part is expected to be paid in the first half of 2021. In 2020, 9.5 million euro of restructuring was paid. As the company decided to move to a more cost competitive and next generation UniSee platform, the industrialization process came to a pivotal moment. After careful evaluation of the options, Barco’s management decided to outsource UniSee LCM (Liquid Crystal Module)-production as of the second half of 2020 and to phase out the inhouse UniSee LCM-production activity in its Taiwanese factory in the sec- ond half of 2020. All impacted people (232) have left the company by the end of 2020. The decision has resulted in mainly non-cash restructuring costs related to the closure of the factory and impairment of the machinery and equipment (see note 9.2 Tangible fixed assets). There are no restructuring and impairment costs in 2019. The restructuring costs in 2018 relate to the in November 7, 2018 announced restructuring plan to align the organization with changing market demands and growth opportunities while enhancing the company’s long-term profitability. This comprehensive plan addressed specific aspects of Barco’s organizational structure and eectiveness, and agility, partic- ularly in the areas of product management and commercial and service delivery processes. The execution of the restructuring announced in November 2018 was expected to aect around 240 positions across the organization over the course of 2019 and 2020, representing a total cost of 17 million euro. In 2019 major part of the plan was executed and completed in full in 2020. IN THOUSANDS OF EURO NOTE 2020 2019 2018 Restructuring (cash): 19 -7,171 - -17,000 Impairments (non-cash): -, - - Total restructuring and impairments -, - -, 5. Restructuring and impairment costs Barco Integrated report 2020 44 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 6. Income taxes IN THOUSANDS OF EURO NOTE 2020 2019 2018 Current versus deferred income taxes Current income taxes -6,886 -12,394 -9,409 Deferred income taxes 10 6,886 -8,454 -7,177 Income taxes 0 -20,848 -16,586 Income taxes versus income before taxes EBIT -4,332 110,038 89,358 Interest income (expense) - net -121 5,782 4,350 Income before taxes -4,453 115,820 93,708 Income taxes 0 -20,848 -16,586 Eective income tax rate % 0.0% 18.0% 17.7% Income before taxes -4,453 115,820 93,708 Theoretical tax rate 25% 30% 30% Theoretical tax credit/(cost) 1,113 -34,260 -27,719 Innovation income deduction (IID) 5,302 7,398 7,291 Eect of dierent tax rates in foreign companies 968 4,772 3,452 Changes in deferred tax on undistributed earnings (a) - -2,100 - Uncertain tax treatment (b) 1,840 1,260 - Income not taxed Gain on sold shares (c) - - 3,719 Other income exempt from tax (mainly government grants) 2,141 2,068 1,390 Non deductible expenses Dividends received (d) -4,265 -3,595 -1,574 Other non-deductible expenses -2,042 -2,440 -1,829 Eect of change in expected tax rate on deferred taxes - 291 -1,055 Tax adjustments related to prior periods 1,029 2,155 -495 Deferred tax assets, derecognized in current year (e) -6,895 -102 -335 Set-up/use of deferred tax assets, not recognized in prior years (f) 809 3,688 270 Investment allowances - - 211 Notional interest deduction (NID) 0 19 89 Taxes related to current income before taxes 0 -20,848 -16,586 Barco Integrated report 2020 45 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 7. Earnings per share IN THOUSANDS OF EURO 2020 2019 2018 Net income/(loss) attributable to the equity holder of the parent -4,393 95,363 74,965 Weighted average of shares 88,265,478 87,836,593 87,060,073 Basic earnings per share -0.05 1.09 0.86 Net income/(loss) attributable to the equity holder of the parent -4,393 95,363 74,965 Weighted average of shares (diluted) 88,693,611 88,859,469 87,719,091 Diluted earnings per share (a) -0.05 1.07 0.85 (a) The dierence between the weighted average of shares and weighted average of shares (diluted) is due to exercisable warrants, which are in the money (which means that the closing rate of the Barco share was higher than the exercise price). For more detailed information concerning the shares and warrants, we refer to note 16. At Barco’s Extraordinary General Shareholder’s Meeting, of 30 April 2020, the shareholders have approved the share split by a factor seven (7), eective as of 1 July 2020. The purpose of the share split is to enhance accessibility and to improve the liquidity of the Barco share. As a result of this share split, Barco’s total capital shall be represented by 91,487,438 shares as from 1 July 2020. Each of these shares confers one voting right at the General Meeting. The new split shares (please note: new ISIN code BE0974362940) are traded on the Euronext Brussels regulated market from 1 July 2020 onwards. Therefore, the earnings and diluted earnings per share as of 31 December 2019 and 2018 are for comparison reasons recalculated for the new number of shares. (a) Deferred tax recognized on undistributed earnings of subsidiaries which are expected to be distributed in the foreseeable future. (b) Tax positions taken in the financial statements and in the tax filings and how these are supported, as well as how the taxation authorities might make their examinations and how issues that might arise from examinations could be resolved, are reviewed. Based on this asses- ment, a deferred tax liability is determined in line with IFRIC 23. A reversal on the deferred tax liability is taken when the uncertain tax position is no longer in place as a result of an occurred tax examination or expiration of the examination period. (c) In 2018, the gain realized on the sale of the 9% shares of BarcoCFG was tax exempt. (d) Withholding taxes on dividends received. (e) Deferred tax assets not recognized on tax losses or tax losses carried forward when assessment shows it is not probable that these tax benefits can be utilized in the near future. In 2020, this also relates to an impairment on the deferred tax assets, resulting from tax losses carried forward in Barco Taiwan Technology Ltd., due to the decision to close the factory (see note 5. Restructuring and impairments) and liquidate the legal entity. (f) In 2019, new deferred tax assets set-up on uncapped or faster deductible tax credits in Belgium, in combination with higher than anticipated taxable results in Belgium. Barco Integrated report 2020 46 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 8. Goodwill IN THOUSANDS OF EURO 2020 2019 2018 At cost On 1 January 179,775 179,775 179,548 Translation (losses)/gains - - 227 On 31 December 179,775 179,775 179,775 Impairment On 1 January 74,163 74,163 74,163 Impairment losses - - - On 31 December 74,163 74,163 74,163 Net book value On 1 January 105,612 105,612 105,385 On 31 December 105,612 105,612 105,612 In 2020 there are no changes to goodwill. Over the last three years the impairment tests on goodwill did not result in any impairment. As a result of the covid-19 global pandemic described in the section ‘Critical accounting judgments and key sources of estimation uncertainty’ on page 22 the Company performed a quantitative goodwill impairment test per 30 June 2020 and again per 31 December 2020. The test was performed on a cash-generating unit level by comparing each unit’s carrying value, including goodwill, to its value-in-use. The value-in-use of each reporting unit was assessed using a discounted cash flow model based on divisional manage- ment’s revised budget for the year and estimated long-term projections covering a five-year period. Consistently with its yearly impairment test, the Company adjusts the divisional management cash flow projections for future years to more conservative levels in view of the level of uncertainty. An appropriate level of conservatism compared to previous reporting periods was applied to the updated impairment testing to take into account covid-19 related uncertainty. The outcome of the goodwill impairment tests performed did not result in any impairment loss. Barco Integrated report 2020 47 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Goodwill by cash-generating unit On acquisition, goodwill acquired in a business combina- tion is allocated to the cash-generating units which are expected to benefit from that business combination. These cash-generating units correspond to the division level for Entertainment, Healthcare and Enterprise. Therefore, impair- ment testing is performed at the level of the cash-generating units as presented below. See below for explanations on the impairment testing performed. Cash generating units IN THOUSANDS OF EURO 2020 2019 2018 Entertainment 35,564 35,564 35,564 Healthcare 28,263 28,263 28,263 Enterprise 41,785 41,785 41,785 Total goodwill (net book value) 105,612 105,612 105,612 The carrying amount of goodwill (after impairment) has been allocated to the cash-generating units as follows: The Group performed its annual impairment test in the fourth quarter of 2020 consistently with prior years. The Group looks at the relationship between its market cap- italization and its book value, amongst other factors, when reviewing the indicators of impairment. At 31 December 2020, the market capitalization of the Group was more than two times the amount of equity of the Group. As such, this general test does not show an indication for impairment. 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 gener- ated by divisional management covering a five-year period. Due to the level of uncertainty of future years, these financial projections have been adjusted to more conservative levels for the purpose of our impairment testing. The pre-tax dis- count rate applied to projected cash flows is 8.7% (2019: 6.5%, 2018: 8.9%) and cash flows beyond the five-year period are extrapolated using a conservative growth rate of 0% (2019: 0%, 2018: 0%). The amount by which the unit’s recoverable amount exceeds its carrying amount is 27 million euro in Entertainment (188 million euro in 2019), 214 million euro in Enterprise (590 million euro in 2019) and 179 million euro (260 million euro in 2019) in Healthcare. The lower headroom in all three divisions is explained by the consistent level of conservatism applied starting from covid impacted 2020 results (see Sales growth rate used during the projection period in Key assumptions used in value-in-use calculations). In 2019 and 2020, the carrying amounts include the impact of the right-of-use assets resulting from the application of IFRS 16 as of 2019. A sensitivity analysis is performed on all cash-generating units with respect to the discount rate (see Sensitivity to changes in assumptions – Discount rate). For forward looking state- ments on sales and EBITDA, we refer to the core report of this annual report. Barco Integrated report 2020 48 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE ENTER TAINMENT HEALTH CARE ENTER PRISE Sales growth rate used during the projection period 0.0% 0.0% 0.0% EBITDA as % of sales 5.8% 13.4% 16.5% Growth rate estimates 0.0% 0.0% 0.0% Discount rates 8.7% 8.7% 8.7% The assumptions of the annual impairment test are consistent with external sources. For none of the cash-generating units management identified an impairment loss after the impairment test. Key assumptions used in value-in-use calculations The calculation of value-in-use for all cash-generating units is most sensitive to the following assumptions: • Sales growth rate used during the projection period; • EBITDA; • Growth rate used to extrapolate cash flows beyond the budget period; • Discount rates; The assumptions are shown in below table: Sales growth rate used during the projection period – Sales growth rate used over the projected period has been kept conservatively at zero percent for all cash-generating units, since even then there is no risk for impairment. EBITDA as percentage of sales – EBITDA as percentage of sales is based on average percentages over the three years preceding the start of the budget period for all divisions. The EBITDA percentage has been kept conservatively flat over the projected period, except for Entertainment, where it is more realistic to take an average of the pre-covid EBITDA level of 2018 and 2019 as of 2022. Growth rate estimates – The long-term rate used to extrap- olate the projection has been kept conservatively at zero % for all cash-generating units. 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. It was deter- mined on group level. Sensitivity to changes in assumptions Per 31 December 2020, only a change in EBITDA margin could result in impairment losses. The implications of the key assumptions for the recoverable amount are discussed below: EBITDA percentage on sales – Management has considered the possibility of lower than projected EBITDA percentages on sales. For Entertainment, Enterprise and Healthcare a reduction of the EBITDA percentage in the last year of the projected period of respectively more than 1.6%, 13% and 9% would result in an impairment. Discount rates – Management has considered the possibil- ity of a significant higher weighted average cost to test the sensitivity. For none of the cash-generating units this leads to an impairment. Growth rate estimate (beyond the projection period) – For all divisions, no reasonable possible change in the growth rate, used to extrapolate beyond the projection period, would result in an impairment. Barco Integrated report 2020 49 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Barco’s intangibles mainly include SAP ERP software and intangibles acquired through acquisitions. In 2020, capital expenditures for intangible assets amount to 2 million euro (2019: 3.1 million euro, 2018: 3.7 million euro), mainly related to SAP ERP software licenses (2019: 1 million euro; 2018: 1.5 million euro). IN THOUSANDS OF EURO 2020 2019 2018 SOFTWARE CUSTOMER RELATIONS KNOW HOW OTHER INTAN GIBLE ASSETS OTHER INTANGIBLE ASSETS UNDER CONSTRUC TION TOTAL TOTAL TOTAL At cost On 1 January 70,436 21,541 54,979 10,191 104 157,250 143,696 145,300 Expenditure 1,690 - - 8 252 1,951 3,122 3,710 Sales and disposals -6,869 -1,054 - -142 - -8,064 -929 -4,581 Acquisition of subsidiaries - - - - - - 8,900 - Disposal of subsidiaries - - - - - - - -405 Transfers - - - - - - - Translation (losses)/gains -44 -6,067 -10,382 -36 - -16,529 2,461 -329 On 31 December 65,323 14,420 44,597 10,020 247 134,608 157,250 143,696 Amortization and impairment On 1 January 43,406 21,541 38,082 9,753 - 112,781 96,299 81,939 Amortization 7,889 - 5,471 28 - 13,388 15,523 19,032 Impairment - - 3,500 - - 3,500 - - Sales and disposals -6,862 -1,054 - -37 - -7,953 -670 -4,554 Disposal of subsidiaries - - - - - - - -153 Transfers - - -6 6 - - - - Translation (losses)/gains -129 -6,067 -9,840 -24 - -16,061 1,629 35 On 31 December 44,303 14,420 37,206 9,726 - 105,655 112,781 96,299 Carrying amount On 1 January 27,031 - 16,897 438 104 44,469 47,397 63,361 On 31 December 21,020 - 7,391 295 247 28,952 44,469 47,397 9. Other intangible assets and tangible fixed assets 9.1 Other intangible assets Barco Integrated report 2020 50 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Disposals in 2020 relate to fully amortized IT software which is no longer used. In 2019, the acquired know how for caresyntax (8.9 million euro) is included in the table above in the line 'acquisition of subsidiaries'. On April 9 th , 2019 Barco announced a joint development, a software distribution and integrator agree- ment, with caresyntax®, leader in vendor-neutral software solutions for surgical automation, analytics and AI, along- side participating in the company’s round of growth equity financing. The investment payment was recorded as an intangible asset (acquired know-how) and is amortized over 5 years. No equity instrument has been recognized because of the premium paid over the fair value of the shares. The Group performed its annual impairment review on acquired intangibles in the fourth quarter of 2020 consistently with prior years. Special attention was paid to the poten- tial impact of covid-19. The impairment test resulted in an impairment of 3.5 million euro on the acquired know how for caresyntax. The impairment cost is included in research and development expenses. Barco does not hold intangible assets with indefinite lifetime. Barco Integrated report 2020 51 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 LAND AND BUILDINGS PLANT, MACHINERY AND EQUIPMENT FURNITURE, OFFICE EQUIPMENT AND VEHICLES OTHER PROPERTY, PLANT AND EQUIPMENT ASSETS UNDER CON STRUCTION TOTAL OTHER TANGIBLE ASSETS TOTAL TOTAL TOTAL At cost On 1 January 127,520 90,335 43,474 13,670 1,862 149,342 276,862 240,011 237,667 Expenditure * 7,878 2,530 5,678 1,144 9,283 18,635 26,513 21,745 20,099 Sales and disposals -7,229 -15,490 -3,759 -3,340 -29 -22,619 -29,847 -19,854 -15,820 Change in accounting principle (IFRS 16) - - - - - - - 33,438 Disposal of subsidiaries - - - - - - - - -1,990 Transfers - , , -, - - - Translation (losses)/gains -3,260 -1,475 -1,005 -607 -77 -3,163 -6,423 1,522 55 On 31 December 124,524 79,485 44,784 12,366 5,945 142,580 267,104 276,861 240,011 Depreciation and impairment On 1 January 43,855 56,491 30,376 10,670 - 97,537 141,393 131,231 132,337 Depreciation 12,233 7,495 5,701 1,066 - 14,262 26,495 27,466 15,458 Impairment - 5,136 - 621 - 5,757 5,757 - - Sales and disposals -4,342 -15,363 -3,574 -3,067 - -22,004 -26,346 -18,048 -15,075 Disposal of subsidiaries - - - - - - - - -1,460 Transfers - 2 9 -11 - - - - - Translation (losses)/gains -1,443 -1,076 -749 -401 - -2,226 -3,669 743 -29 On 31 December 50,304 52,686 31,763 8,877 - 93,326 143,630 141,393 131,231 Carrying amount On 1 January 83,665 33,843 13,098 3,000 1,862 51,805 135,469 108,780 105,330 On 31 December 74,220 26,799 13,020 3,490 5,945 49,254 123,473 135,467 108,779 9.2 Tangible fixed assets () Expenditures in 2020 also includes the additions for IFRS 16. Barco Integrated report 2020 52 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Capital expenditures for tangible assets in 2020, excluding the impact of IFRS16, amount to 15.5 million euro. Major facility related investments concern the new factory in China, Suzhou (2020: 3.3 million euro; 2019: 0.8 million euro), the new software lab in Noida (1.9 million euro) and heating, ventilation and airco investments in its Kortrijk and Duluth facilities (1.1 million euro). The facility related capex in 2018 and 2019 were in Barco’s headquarters and extended operations facility (2019: 1.4 million euro, 2018: 8.2 million euro) and the Taiwan factory (2019: 4.1 million euro; 2018: 2.1 million euro). In addition, capital expenditures include machinery and tool- ing linked to new development projects (2020: 3.6 million euro; 2019: 1.5 million euro) and the renovation of the Duluth facility in the US (2019: 2 million euro, 2018: 1.6 million euro). Disposals in 2020 mainly relate to the closure of the Taiwan factory (impairment of 5.8 million euro), together with old machinery. The main capex on the balance sheet, realized in the period 2015 – 2019 relates to the headquarters of Barco and the extended operations facility for 79.1 million euro. The closure of the Taiwanese Unisee LCM-production factory in the second half of 2020 resulted in an impairment of 5.8 million euro mainly related to the machinery and equipment (see note 5. Restructuring and impairments). The closure was linked to the decision to outsource the Unisee LCM panels. The Company considered the potential impact of covid-19 on the utilization levels of its factories and potential impair- ment of its machinery and equipment. The analysis did not conclude an impairment. See ‘Critical accounting judge- ments and key sources of estimation uncertainty’ for more explanation on the impact of covid-19 on Barco’s operations. Disposals in 2019 mainly relate to old machinery & equip- ment, which are no longer in use and to the sale of the remaining part of the land and building in Poperinge. Barco Integrated report 2020 53 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 31 DEC 2020 31 DEC 2019 Buildings -7,944 -7,702 Vehicles -2,390 -2,281 Total depreciation charge of right-of-use assets -10,334 -9,983 Interest expense (included in finance cost) -1,000 -1,085 Expense relating to short-term leases -41 -509 Expense relating to leases of low-value assets that are not shown above as short-term leases -26 -23 () Until 31 December 2018, the Group only recognized lease assets and lease liabilities in relation to leases that were classified as ‘finance leases’ under IAS 17 Leases. The assets were presented in property, plant and equipment and the liabilities as part of the Group’s borrowings. For adjustments recognized on adoption of IFRS 16 on 1 January 2019, please refer to note IFRS accounting standards adopted as of 2019 in the annual report of 2019. IN THOUSANDS OF EURO 2020 2019 BUILDINGS VEHICLES TOTAL TOTAL On 1 January 30,884 7,081 37,965 33,438 New leases or extensions of currentleases 7,602 3,399 11,000 4,647 Termination of leases -7,226 -1,064 -8,290 -165 Translation (losses)/gains -1,653 -10 -1,663 44 On 31 December 29,607 9,406 39,013 37,965 Depreciation and impairment On 1 January -7,674 -2,275 -9,948 - Depreciation -7,944 -2,390 -10,334 -9,983 Termination of leases 4,339 1,033 5,372 50 Translation (losses)/gains 489 6 495 -15 On 31 December -10,790 -3,625 -14,415 -9,948 Right-of-use assets On 1 January 23,210 4,807 28,017 33,438 On 31 December 18,817 5,781 24,598 28,017 () We refer to note 14 for more information on the lease liabilities. The statement of profit or loss shows the following amounts relating to leases: Leases This note provides more information for leases where the Group is a lessee. The balance sheet shows the following amounts relating to leases: The total cash outflow for leases in 2020 was 10.8 million euro (2019: 10.6 million euro). Additions to the right-of-use assets during 2020 were 11 million euro (2019: 4.4 million euro) split over leased buildings (7.6 million euro) and leased vehicles (3.4 million euro). The additions are both renewals of existing lease agreements as well as new lease agreements in Singapore, China and India over a lease period of respectively 5 years, 5 years and 8 years. Barco Integrated report 2020 54 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 10. Deferred tax assets – deferred tax liabilities IN THOUSANDS OF EURO ASSETS LIABILITIES NET ASSET/LIABILITY 2020 2019 2018 2020 2019 2018 2020 2019 2018 Tax value of loss carry forwards 22,854 22,622 20,367 - - - 22,854 22,622 20,367 Tax value of tax credits 13,616 11,505 18,980 - - - 13,616 11,505 18,980 Provisions 12,197 14,689 13,430 -142 - -2,336 12,054 14,689 11,094 Inventory 9,133 10,247 12,001 - -353 -278 9,133 9,894 11,723 Deferred revenue 5,082 3,825 4,805 -442 -979 -1,518 4,640 2,845 3,287 Tangible fixed assets and software 1,734 1,766 1,741 -925 -960 -836 809 806 905 Employee benefits 843 1,207 1,388 -525 -1,000 -8 318 207 1,380 Other investments 797 558 408 - - - 797 558 408 Trade debtors 407 401 231 - - -4 407 401 228 Uncertain tax treatment (IFRIC 23) - - - -3,400 -5,240 - -3,400 -5,240 - Patents, licenses, ... - - - -3,688 -4,013 -4,159 -3,688 -4,013 -4,159 Other items 589 -1,561 293 -64 -173 -170 525 -1,734 124 Gross tax assets/(liabilities) 67,253 65,260 73,646 -9,187 -12,719 -9,308 58,066 52,541 64,338 Oset of tax -4,441 -5,143 -6,169 4,441 5,143 6,169 - - - Net tax assets/(liabilities) 62,811 60,116 67,478 -4,745 -7,575 -3,140 58,066 52,541 64,338 The deferred tax asset and liability balance comprises temporary dierences attributable to: 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 EXCHANGE GAINS AND LOSSES AS AT 31 DECEMBER Tax value of loss carry forwards 22,622 274 - -43 22,854 Tax value of tax credits 11,505 2,131 - -20 13,616 Patents, licenses, ... -4,013 126 - 199 -3,688 Tangible fixed assets and software 806 126 - -123 809 Other investments 558 303 - -64 797 Inventory 9,894 -193 - -568 9,133 Trade debtors 401 42 - -36 407 Provisions 14,689 -2,378 -9 -247 12,054 Employee benefits 207 165 - -54 318 Deferred revenue 2,845 2,172 - -377 4,640 Other items -1,734 2,278 - -19 525 Uncertain tax treatment (IFRIC 23) -5,240 1,840 - - -3,400 Net deferred tax 52,541 6,886 -9 -1,352 58,066 Barco Integrated report 2020 55 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE On top of the tax losses and tax credits for which a net deferred tax is recognized (net deferred tax asset of respec- tively 22.9 million euro and 13.6 million euro), the Group owns tax losses carried forward and other temporary dif- ferences on which no deferred tax asset is recognized amounting to 42 million euro as of 31 December 2020 (32.3 million euro in 2019) (resulting in a non-recognized deferred tax asset of 11.5 million euro (9.2 million euro in 2019)) and unutilized capital losses carried forward in the US on which no deferred tax asset is recognized amounting to 30.5 million euro (29.4 million euro in 2019) (resulting in a non-recog- nized deferred tax asset of 7.4 million euro (7.3 million euro in 2019)). Deferred tax assets have not been recognized on these items because it is not probable that taxable profit will be available in the near future against which the benefits can be utilized, or that tax assets will be utilized within their statue of limitations. The tax losses carried forward and other temporary dierences on which no deferred tax asset is recog- nized have no expiration date, except for capital losses carried forward which will expire in 2023. Deferred tax assets recognized primarily relate to the tax value of loss carry forwards and tax credits and almost fully relate to Belgium. In assessing the realization 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 depen- dent upon the generation of future taxable profit during the periods in which those temporary dierences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable profit and tax planning strategies in making this assessment. In 2020, the covid-19 impact on future taxable profit was factored in in the realization assessment. A time period of 5 years is considered. In order to fully realize the deferred tax asset, the Group will need to generate future taxable profit in the countries where the net operating losses were incurred. Based upon the level of historical taxable income and projections for future taxable profit over the periods in which the deferred tax assets are deductible, management believes as at 31 December 2020, it is probable that the Group will be able to recover these deductible temporary dierences. Barco has not recognized income taxes on undistributed earnings of its subsidiaries which will not be distributed in the foreseeable future. The cumulative amount of undistributed earnings on which the Group has not recognized income taxes was approximately 478 million euro at December 31, 2020 (2019: 491 million euro, 2018: 460 million euro). Barco Integrated report 2020 56 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Investments include entities in which Barco owns less than 20% of the shares. These are accounted for as fair value through profit and loss or other comprehensive income instruments, as determined at moment of initial recognition, which implies that the Group measures these investments on a fair value basis with dierences in fair value reflected in profit and loss or other comprehensive income. Interest in associates represents entities in which Barco owns between 20% and 50% of the shares. Interest in associates are fully allocated to the Entertainment division. The increase in investments from 2018 to 2020 is related to acquired minority stakes, below regulatory disclosure threshold levels. The investments are measured at market price. For investments that are publicly quoted in an active market, the quoted market price is the best measure of fair value. The remeasurement at fair value per 31 December 2020 versus the carrying amount, amounted to 18.3 million euro and is reflected in other comprehensive income (2019: 1.9 million euro). 11. Investments and interest in associates IN THOUSANDS OF EURO 2020 2019 2018 Investments 87,228 23,215 178 Interest in associates 19,713 20,073 18,927 Investments and interest in associates 106,942 43,288 19,105 IN THOUSANDS OF EURO 2020 2019 Opening net assets 1 January 23,215 178 Additions 52,273 21,185 Other comprehensive income 18,331 1,852 Translation losses -6,591 Closing net assets 31 December 87,228 23,215 Investments Interest in associates Interest in associates, in 2020 and 2019, reflects the equity investment in BarcoCFG and CCO. Barco Integrated report 2020 57 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The Group has no contingent liabilities or capital commitments in relation to its associates as at 31 December 2020 and 2019. For all equity accounted investments, the parent’s or other investor’s consent is required to distribute its profits; which is not decided at the reporting date. The equity accounted investments did not recognize items in other comprehensive income. SUMMARIZED BALANCE SHEET IN THOUSANDS OF EURO BARCO CFG 31 DEC 2020 CCO 31 DEC 2020 TOTAL 31 DEC 2020 BARCO CFG 31 DEC 2019 CCO 31 DEC 2019 TOTAL 31 DEC 2019 Cash and cash equivalents 21,441 18,423 39,864 44,828 12,924 57,752 Other current assets 52,472 3,335 55,807 51,365 9,625 60,990 Total current assets 73,913 21,758 95,671 96,193 22,548 118,741 Non-current assets 7,943 10,535 18,479 7,994 15,602 23,595 Other current liabilities 59,532 7,217 66,749 83,356 9,853 93,209 Total current liabilities 59,532 7,217 66,749 83,356 9,853 93,209 Other non-current liabilities - 7 7 - 13 13 Total non-current liabilities - 7 7 - 110 110 Net assets 22,324 25,070 47,394 20,831 28,187 49,018 Reconciliation to carrying amounts: Opening net assets 1 January 20,831 28,187 49,018 21,998 23,279 45,277 Profit/loss for the period 7,156 -788 6,369 12,849 4,476 17,325 Other comprehensive income (CTA) -578 -2,329 -2,908 161 433 593 Dividends paid -5,085 - -5,085 -14,178 - -14,178 Closing net assets 22,324 25,070 47,394 20,831 28,187 49,018 Group's share in % 49% 35% 49% 35% Group's share 10,939 8,775 19,713 10,207 9,866 20,073 Carrying amount 10,939 8,775 19,713 10,207 9,866 20,073 SUMMARIZED STATEMENT OF COMPREHENSIVE INCOME IN THOUSANDS OF EURO BARCO CFG 31 DEC 2020 CCO 31 DEC 2020 TOTAL 31 DEC 2020 BARCO CFG 31 DEC 2019 CCO 31 DEC 2019 TOTAL 31 DEC 2019 Profit/loss for the period 7,156 -788 6,369 12,849 4,476 17,325 Other comprehensive income (CTA) -578 -2,329 -2,908 161 433 593 Total comprehensive income 6,578 -3,117 3,461 13,010 4,908 17,918 Group's share in % 49% 35% 49% 35% Group's share in profit/(loss) for the period 3,507 -276 3,231 6,296 1,566 7,863 Share in the result of joint ventures and associates - -276 -276 - 1,566 1,566 Included in other operating income 3,507 3,507 6,296 6,296 The Group’s share of the assets and liabilities as at 31 December 2020 and 2019 and income and expenses of the joint ventures and associates for the year ended 31 December 2020 and 2019, which are accounted for using the equity method: Barco Integrated report 2020 58 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 12. Inventory Inventory levels in the company vary depending on the oper- ating segment within Barco. Operating segments selling more hardware products compared to software or project sales generally have higher inventory levels. As a result of the covid pandemic crisis in 2020 the company experienced disruptions to its ability to operate production facilities in some countries in the months of March and April but recovered near full operational capacity afterwards. In order to anticipate on potential disruptions, safety stocks were temporarily increased. As from the second quarter onwards, the covid-19 pandemic started to spread interna - tionally and impacted most of the markets Barco operates in, resulting in a lower and changing customer demand. As a result of the lock-down measures and related restrictions predictability of customer demand dropped. IN THOUSANDS OF EURO 2020 2019 2018 Raw materials and consumables , , , Work in progress , , , Finished goods , , , Write-o on inventories -, -, -, Inventory , , , Inventory turns . . . IN THOUSANDS OF EURO 2020 Turns 2019 Turns 2018 Turns Entertainment , . , . , . Enterprise , . , . , . Healthcare , . , . , . Total inventory and turns , . , . , . While the Company has decelerated significantly on its pur- chases (see note 18), the combination of these impacts has resulted in high year-end inventory levels and lower inven- tory turns especially in the Entertainment division, where the cinema and events business were impacted the most. Inven- tory turns decreased to 2.3, compared to 3.2 in 2019. Increased inventory in the Healthcare division is linked to customer committed orders for the China region for which the supplier decided to stop the production of raw mate- rials and the Company there- fore purchased the raw mate- rials upfront under the form of a last-time buy order. We refer to chapter ‘Critical accounting judgements and key sources of estimation uncertainty’ for more explanation on the impact of covid-19. Inventories are stated at the lower of cost or net realizable value. The calculation of the allowance for slow-moving inventory is based on consistently applied write o rules, which depend on both historical and future demand, both are impacted by the covid-19 pandemic in 2020 and resulted in higher write-os recognized as expense in 2020: 11.6 million euro or 1.5% of sales (2019: 4.4 million euro; 0.4% of sales, 2018: 6.1 million euro; 0.6% of sales). The write-o balance remained stable in 2020, as the higher write-os in profit and loss were oset by scrapped inventories. The inventory turns decreased to 3.2 in 2019 compared to 3.8 in 2018, mainly impacted by the launch and ramp-up of new products in Entertainment. Barco Integrated report 2020 59 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Per 31 December 2020, the number of days sales outstanding is at 67 days (55 days in 2019 and 52 in 2018). The increase in number of days sales outstanding is the result of higher overdues, mainly from cinema customers, caused by the covid-19 global impact on the cinema markets. For the year ended December 31, 2020, the Company recorded a provision for current expected credit losses of 1.5 million euro reflecting a reduction in the credit quality of specific cinema customers related accounts receivable as a result of the covid-19 global pandemic. The bad debt reserve in proportion to the gross amount of trade debtors has increased to 2.9% (2019: 1.4%, 2018: 2.1%). (a) Movement in bad debt reserve: IN THOUSANDS OF EURO 2020 2019 2018 On 1 January -, -, -, Additional provisions -, - -, Amounts used Amounts unused , Translation (losses) / gains 156 -45 -15 On 31 December -4,314 -2,874 -3,413 13. Amounts receivable and other non-current assets IN THOUSANDS OF EURO 2020 2019 2018 Trade debtors - gross , , , Trade debtors - bad debt reserve ( a ) -, -, -, Trade debtors - net ( b ) , , , V.A.T. Receivable , , , Taxes receivable , , , Interest receivable , Currency rate swap (note 20) 5,345 5,879 2,380 Other 1,319 6,090 5,876 Other amounts receivable 17,789 25,669 19,567 Other non-current assets ( c ) 5,870 4,018 9,732 Number of days sales outstanding (DSO) 67 55 52 Barco Integrated report 2020 60 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE (b) At 31 December 2020, the aging analysis of trade receivables is as follows: IN THOUSANDS OF EURO 2020 2019 2018 Not due , , , Overdue less than 30 days , , , Overdue between 30 and 90 days , , , Overdue between 90 days and 180 days , , , Overdue more than 180 days , , , Total gross , , , Bad debt reserve -4,314 -2,874 -3,413 Total 146,138 195,358 161,787 In 2020, total overdue trade receivables amount to 39.4 mil- lion euro (2019: 29.8 million euro, 2018: 25.6 million euro), resulting in 19 days overdue DSO (2019: 9 days). The increase in overdue amounts and long outstanding overdues is mainly from the Company’s cinema customers. The Company has a credit insurance in place for specific higher risk cinema contracts and for cinema customers with overdues. The Company was able to reach extended payment plans which are closely monitored. Part of the overdue amounts are linked to service contracts, for which payments are delayed or ser - vice period was extended in view of the cinemas being closed for business. Potential payment risk and the actual service period were considered when recognizing revenue out of these service contracts. In assessing the potential credit risk and the need for recording a bad debt reserve on expected credit losses, the Company has taken into account the credit insurance in place, payment plans being honored and revenue recogni- tion, which explains the bad debt reserve in 2020 amounting to 54% of the trade receivables overdue more than 180 days (2019: 142%, 2018: 140%). As of 2018, the Group applied the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for all trade receivables based on historical losses. The Group analyzed the impact of IFRS 9 and concluded there was no material impact on the bad debt reserve booked. The Group also assessed whether the historic pattern would change materially in the future and expected no significant impact. (c) Other non-current assets The other non-current assets include cash guarantees for an amount of 5 million euro (2019: 3 million euro, 2018: 3.4 million euro). In 2018, the non-current assets also include long-term receiv- ables in the frame of vendor financing programs, amounting to 5.4 million euro, of which 5.4 million euro (see note 14) oset by long term debt of the same amount. As this long- term receivable expired in 2020, 3.2 million euro is included in other receivables in 2019. Barco Integrated report 2020 61 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The net financial cash at the end of 2020 amounts to 193.5 million euro, 135.9 million euro lower compared to end 2019, a result of the negative free cash flow (-36 million euro), div- idends paid out (-33 million euro), investments (-55 million euro) and currency impact. We refer to the supplementary statements, note 16 and note 11 for more explanation. Of the total net financial cash, 235 million euro is cash on the balance sheet. Additional financial flexibility is provided with 75 million euro of unused bilateral committed credit facilities with a selected group of commercial banks (see further c). In addition to significant liquidity, Barco has a well-balanced debt profile with debt limited to 45 million euro of which 9 million euro near-term maturities. The direct available net cash, excluding the cash contributed by Barco and the minority shareholders of Cinionic (65.7 million euro)) amounts to 127.7 million euro. The net financial cash in 2019 decreased slightly with 2.6 mil- lion euro, versus 2018, mainly due to the IFRS16 related debt of 33.4 million euro added in 2019. The net cash was also impacted by investments (21.1 million euro) and the increase in ownership in BTT and Barco BCV CEC Panda to 100%. 14. Net financial cash/debt IN THOUSANDS OF EURO 2020 2019 2018 Short term investments (a) , , , Deposits (a) , , , Cash at bank (b) , , , Cash in hand Cash and cash equivalents , , , Long-term financial receivables - , Long-term debts (c) -, -, -, Current portion of long-term debts (c) -9,187 -12,469 -7,500 Short-term debts (d) -86 - -686 Net financial cash/(debt) 193,450 329,366 331,964 Barco Integrated report 2020 62 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 AVERAGE INTEREST RATE 2019 AVERAGE INTEREST RATE 2018 AVERAGE INTEREST RATE - deposits in USD , .% , .% , .% - deposits in CNY , .% , .% , .% - deposits in INR , .% , . % , .% - deposits in other currencies , , , Total short term investments and deposits , , , (a) Short term investments and deposits Short term investments are convertible to known amounts of cash between three and twelve months from inception. Deposits are short term (between zero and three months), highly liquid investments, which are readily convertible to known amounts of cash. The short term investments and deposits do not carry a material risk of change in valuation. At closing date, all short term investments and deposits include: (b) Cash at bank Cash at bank is immediately available. It is denominated in the following currencies: 2020 2019 2018 - EUR .% .% .% - HKD .% .% .% - CNY .% .% .% - USD .% .% .% - Others .% .% .% The decrease in foreign currency deposits in CNY and INR in 2020 compared to 2019, is a result of dividents distributed from the Company's aliates in China and India. In view of the low interest rates on deposits, those dividends were kept in cash in Euro and Hong Kong Dollar (see b). Barco Integrated report 2020 63 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 - EUR , , , - USD , , , - INR , , - Other , , , Total , , , (c) Long-term financial debts The Barco Group has a total of 95 million euro committed credit facilities available. The portfolio consists of 2 major tranches: • Barco NV and Barco Coordination Center NV (as co- obligors) signed a number of bilateral committed credit facilities with a selected group of commercial banks for a total amount of 75 million euro. The credit facilities have an availability period till December 2023. Drawings under the facilities have a short-term tenor. • Barco NV signed a number of bilateral committed credit facilities totaling 28 million euro, aiming at financing Barco’s new headquarters campus project. Drawings have a long- term tenor of 15 years following the end of the availability period (as of the end of 2015). An amount of 20 million euro is outstanding per end of 2020. These commitments carry either a variable interest rate or have been swapped via derivatives into fixed rate character. Barco is meeting all requirements of the loan covenants on its available credit facilities. The below table summarizes the long-term financial debts, including the current portion of long-term financial debts, per currency: The below table gives an overview of the long-term financial debts including the current portion of long-term financial debts, per type of interest rate: TYPE OF INTEREST RATE MATURITY 31 DEC 2020 31 DEC 2019 31 DEC 2018 Real estate financing: - variable, swapped into fixed (EU) Later than , , , - variable (EU) Later than , , , - variable, swapped into fixed (US) Later than - Research Development Innovation (RDI) financing: - fixed, European Investment Bank 2020 - 1,500 7,000 Vendor financing (oset by long-term receivable) - - 5,430 Leasing (IFRS 16) 24,929 28,259 - Other 113 47 81 Total long-term financial debts 45,042 52,695 37,382 Barco Integrated report 2020 64 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The long-term debts (including interests due), excluding the current portion of the long-term debts, are payable as follows: The lease liabilites per 31 december are as follows: PER 31 DECEMBER 2020 PER 31 DECEMBER 2019 PER 31 DECEMBER 2018 Payable in 2022 9,883 Payable in 2021 10,003 Payable in 2020 9,540 Payable in 7,034 Payable in 7,081 Payable in 2,545 Payable in 6,214 Payable in 6,259 Payable in 2,476 Payable in 5,083 Payable in 5,133 Payable in 3,300 Later 13,168 Later 15,468 Later 15,352 Total long-term debts 41,381 Total long-term debts 43,945 Total long-term debts 33,213 IN THOUSANDS OF EURO 2020 2019 On 1 January 28,259 33,438 New leases or extensions of current leases 11,000 4,647 Payments or termination of leases -13,132 -9,855 Translation (losses)/gains -1,199 28 Total lease liabilities on 31 December 24,929 28,259 Current 7,187 8,969 Non-current 17,742 19,290 Barco Integrated report 2020 65 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 15. Other long-term liabilities IN THOUSANDS OF EURO 2020 2019 2018 Other amounts payable 75 106 - Accrued charges 3,058 5,146 1,526 Deferred Income (a) 40,016 21,676 22,097 Prepayment customers LT 138 103 934 Other long-term liabilities 43,286 27,031 24,557 (a) Deferred income which will be recognized in revenue over a longer period than one year, is shown in other long-term liabilities. It concerns mainly maintenance contracts sold in the Entertainment division which cover a long-term liability. The contracts start at the end of the two years standard warranty period. The increase in 2020, is caused by some large cinema contracts concluded in 2019 and 2020, for which major part of the extended warranty period will be recognized in revenue as of 2022. Some of these customers concluded yearly service contracts in the past, which were replaced by long term service contracts. Due to the impact of covid-19 on cinema markets globally, less one-year contracts were concluded in 2020. The available 75 million euro bilateral credit facilities that when used translate in a short term debt position are undrawn per end of December 2020. (d) Short-term financial debts The below table gives an overview of the short-term financial debts on 31 December: IN THOUSANDS OF EURO 2020 2019 2018 EFFECTIVE INTEREST RATE BALANCE EFFECTIVE INTEREST RATE BALANCE EFFECTIVE INTEREST RATE BALANCE - Other 0.0% 86 0.0% 0 0.0% 686 Total 86 0 686 Barco Integrated report 2020 66 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 16. Equity attributable to equity holders of the parent IN THOUSANDS OF EURO 2020 2019 2018 Share capital 55,879 55,876 55,869 Share premium 147,003 146,524 146,171 Share-based payments 14,100 11,193 9,046 Acquired own shares -26,962 -29,334 -35,762 Retained earnings 535,093 554,479 501,807 Cumulative translation adjustment -64,693 -37,522 -42,842 Derivatives -1,111 -1,157 -1,022 Equity attributable to equity holders of the parent 659,309 700,060 633,267 1. Share capital, share premium and own shares A small capital increase took place in 2020 through the exer- cise of 5,250 warrants into the same number of new shares on 23 June 2020 with a resulting increase of the statutory capital of 3 (‘000) euro and an increase of the share premium account of 35 (‘000) euro. As a result, the company’s share capital amounts to 55.9 million euro on 31 December 2020, consisting of 91,487,438 fully paid shares. Since 2016, Barco did not acquire own shares. In total, Barco owns now 3,160,032 own shares. In 2020, Barco sold in total 216,614 own shares upon the exercise of 216,614 stock options with a resulting decrease of the own shares of 2,372 (‘000) euro and an increase of the share premium account of 444 (‘000). As a result, thereof the company’s share premium account amounts to 147 million euro, the share-based payments amount to 14.1 million euro and the number of own shares acquired by Barco NV up to 31 December 2020 therefore decreased to 3,160,032 own shares (2019:3,376,646; 2018: 4,184,530 own shares). Barco Integrated report 2020 67 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 2. Share-based payments On 29 October 2020, 2 new option plans have been approved by the Board of Directors. These 2 option plans entitle the granting of maximum 424,000 stock options before 31 December 2020. Each stock option gives right to the acquisition of one (1) share. In 2020, 424,000 stock options have been granted to employees and management of the group based upon these option plans. On 31 Decem- ber 2020, no options remained available for distribution under the 2020 stock option schemes given the expiry dates of the plans per 31 December 2020. Warrants exercisable under the warrant and stock option plans The total number of outstanding warrants on 31 December 2020 amounted to 0. Since 2010, stock options have been granted. The total number of outstanding stock options on 31 December 2020 amounted to 2,727,834. The company’s own shares will be used under the outstanding stock option plan to fulfill the commitment. During 2020, 5,250 warrants and 216,614 stock options have been exercised (in 2019, 11,200 warrants and 807,884 stock options). These warrants and stock options may be exercised the ear- liest 3 years after the allocation date (i.e. the vesting period) over a period of maximum 10 years and during a couple of fixed periods over the year. The cost of the awards is recognized over the vesting period on a straight-line basis. Below is an overview given of the outstanding warrant and stock option plans: Table on warrants ALLOCATION DATE END TERM EXERCISE PRICE IN EURO BALANCE ON 31 DEC 2019 GRANTED IN 2020 EXERCISED IN 2020 CANCELLED IN 2020 EXPIRED IN 2020 BALANCE ON 31 DEC 2020 Warrants // // . , - -, - -, Total number of warrants , - -, - -, (1) For a number of warrants this last exercise date was extended with three (3) years according to article 407 of the law of 24 December 2002 Barco Integrated report 2020 68 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The cost of these warrant/stock option plans is included in the income statement in other operating expense. The warrants/stock options are measured at grant date, based on the share price at grant date, exercise price, expected volatility, dividend estimates and interest rates. The warrant/stock option 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 2.9 million euro in 2020 (2019: 2.1 million euro; 2018: 2.1 million euro). (2) Deviation of exercise price as a result of the implementation of the US sub plan Table on warrants ALLOCATION DATE END TERM EXERCISE PRICE IN EURO BALANCE ON 31 DEC 2019 GRANTED IN 2020 EXERCISED IN 2020 CANCELLED IN 2020 EXPIRED IN 2020 BALANCE ON 31 DEC 2020 Stock options // // . , - -, - -, // // . , - - - - , // // . , - -, - - , // // . , - -, - -, // // . , - -, - -, // // . , - - - - , // // . , - - - - , // // . , - -, - - , // // . , - -, - - , // // . , - - - - , // // . , - -, - - , // // . , - -, - - , // // . , - - - - , // // . , - -, - - , // // . , - -, - - , // // . , - - - - , // // . , - -, - - , // // . , - - - - , // // . , - -, - - , // // . , - -, - -, , // // . , - - -, - , // // . , - - , // // . - , - - - , Total number of stockoptions ,, , -, -, -, ,, Barco Integrated report 2020 69 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 3. Retained earnings The change in retained earnings includes the net income of 2020, actuarial losses, change in the fair value of equity investments, and the distribution of 33.4 million euro divi- dend, as approved by the general shareholders meeting of 30 April 2020. The board of directors of Barco NV will propose in the shareholders meeting of April 2021 a gross dividend of 0.378 euro per share out of the available reserves per 31 December 2020. In 2020 a gross dividend of 0.378 euro per share was paid out on the results of 2019; in 2019 0.329 euro was paid out. 4. Cumulative translation adjustment In 2020, the exchange dierences on translation of foreign operations have a net negative impact of 30 million euro, mainly relating to foreign balances held in Hong Kong Dollar (-12.9 million euro), US Dollar (-7.8 million euro), Indian Rupee (-3.6 million euro), Chinese Yuan (-1.9 million euro) and Norwegian Krone (-1.3 million euro). 5. Derivatives Derivative financial instruments are disclosed in note 20. 6. Main shareholders BEFORE DILUTION Public ,, 69.73% Titan Baratto NV ,, 18.38% Norges Bank ,, 4.48% 3D NV ,, 3.94% Barco NV ,, 3.45% Total ,, 100.00% Barco Integrated report 2020 70 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 17. Non-controlling interest NAME COUNTRY OF INCORPORATION AND OPERATION 2020 2019 2018 Cinionic, Ltd Hong Kong 45% 45% - Barco Taiwan Technology Ltd. Taiwan - - 10% Barco China Electronic Visualization Technology China - - 35% Barco CEC (HK), Ltd China - - 35% IN THOUSANDS OF EURO 2020 2019 2018 Cinionic Ltd. 37,798 40,590 - Barco Taiwan Technology Ltd. - - -1,085 Barco China Electronic Visualization Technology - - 2,819 Barco CEC (HK), Ltd - - 43 Total equity attributable to non-controlling interest 37,798 40,590 1,777 The below table represents the proportion of equity interest held by non-controlling interests Overview of the equity attributable to non-controlling interest: In the course of 2019, Barco acquired the remaining shares in Barco Taiwan Technology Ltd, Barco China Electronic Visualization Technology and Barco CEC (HK), Ltd from their minority shareholders. The remaining contributor to the non-controlling interest in 2019 and 2020 is Cinionic Ltd. In 2018, Barco decided to set up a strategic partnership, whereby global, excluding China, cinema related sales, marketing and service activities were moved to Cinionic. We refer to note 1.1 for the Cinionic legal entities incorporated. Mid December 2018, three minority shareholders have contributed in the capital of Cinionic Ltd, totaling 45% of total contributions of USD 100 million. As of 1 January 2019, these capital contributions all give right to 45% in the Cinionic legal entities’ equity and result. Barco remains in control. Therefore, the non-China cinema sales, marketing and service activities remain consolidated in the Entertainment results in 2019 and 2020. The 45% stake is shown as non-controlling interest as of 1 January 2019. Barco Integrated report 2020 71 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 Total non-current assets 4,901 1,929 Total current assets 107,537 140,080 Total assets 112,438 142,009 Equity attributable to equityholders of the parent 46,197 49,610 Equity attributable to non-controlling interest 37,798 40,590 Total equity 83,995 90,201 Total non-current liabilities 24,420 6,601 Total current liabilities 24,186 61,139 Total liabilities 132,601 157,941 IN THOUSANDS OF EURO % non- controlling 2020 2019 2018 Cinionic Ltd. 618 592 - Cinionic bvba -741 867 - Cinionic Inc. -389 1,123 - Barco Cine Appo Mexico, S.A. de C.V. -233 32 - CFG Barco (Beijing) Electronics Co., Ltd * - - 6,640 Barco Taiwan Technology Ltd. - - -6,926 Barco China Electronic Visualization Technology - - 563 Barco CEC (HK), Ltd - - 107 Net income -745 2,614 384 Cinionic Ltd. 45% 278 45% 267 - Cinionic bvba 45% -334 45% 390 - Cinionic Inc. 45% -175 45% 505 - Barco Cine Appo Mexico, S.A. de C.V. 45% -105 45% 14 - CFG Barco (Beijing) Electronics Co., Ltd * 0% - 0% - 42% 2,805 Barco Taiwan Technology Ltd. 0% - 0% - 10% -693 Barco China Electronic Visualization Technology 0% - 0% - 35% 197 Barco CEC (HK), Ltd 0% - 0% - 35% 37 Net income attributable to non-controlling interest -335 1,176 2,347 Overview of the net income attributable to non-controlling interest: () 42% non-controlling interest on BarcoCFG included until June 30 th , 2018. Other comprehensive income/(loss) for the period, net of tax eect, part attributable to non-controlling interest amounts to -2.5 million euro in 2020, -0.5 million euro in 2019 and 0.1 million euro in 2018. Total comprehensive income for the year, net of tax, part attributable to non-controlling interest amounts to -2.8 million euro in 2020, 0.7 million euro in 2019 and 2.4 million euro in 2018. Below is the consolidated balance sheet of the Cinionic legal entities as at 31 December 2020 and 2019. We refer to note 1.1 for more details on the Cinionic legal entities: Cinionic Limited, Cinionic bvba, Barco CineAppo Mexico, S.A. de C.V. and Cinionic Inc. ASSETS AND LIABILITIES CINIONIC JV Barco Integrated report 2020 72 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 18. Trade payables and advances received from customers IN THOUSANDS OF EURO 2020 2019 2018 Trade payables (a) 70,299 128,914 105,148 Days payable outstanding (DPO) 53 71 59 Advances received from customers (b) 42,375 69,515 53,747 (a) Decreased trade payables in 2020 compared to 2019 is the result of significant lower purchases, linked to the lower demand over 2020. Increased trade payables in 2019 compared to 2018 is the combined eect of higher fourth quarter purchases, as a result of increased sales volume, together with longer payment terms obtained from our suppliers. (b) The lower cinema sales and the financial impact on the Company’s cinema customers of the closed cinemas worldwide as a result of the covid-19 pandemic have resulted in lower advances received in 2020. In 2019, the higher sales and renewed large cinema contracts in Cinionic have resulted in higher advances received from customers. Most payment terms of customers define that 30% of the total invoice needs to be prepaid before delivery of the goods. All prepaid amounts are expected to be recognized in revenues over the coming 12 months. 19. Provisions IN THOUSANDS OF EURO BALANCE SHEET 2020 ADDITIONAL PROVISIONS MADE AMOUNTS USED UNUSED AMOUNTS REVERSED TRANSFERS REMEASUREMENT GAINS/LOSSES ON DBO TRANSLATION LOSSES / GAINS BALANCE SHEET BALANCE SHEET Total long-term provision , , -, -, , - , , Defined benefit obligations (b) , , - -, - - , , Technical warranty (a) , - - -, , - - , , Other claims and risks (d) - - - - - - , Total short-term provision , , -, -, -, - - , , Technical warranty (a) , - - -, -, - - , , Restructuring provision (c) , , -, -, - - - , , Other claims and risks (d) , , - -, - - - , , Provisions , , -, -, - - , , (a) Technical warranty Provisions for technical warranty are based on historical data of the cost incurred for repairs and replacements. Additional provisions are set up when a technical problem is detected. There are three dierent technical warranty provisions: provisions related to ‘normal’ (mostly 2 years) warranty period, provisions related to extended warranty periods and provisions for specific claims/issues. Barco Integrated report 2020 73 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE (b) Defined benefit obligations As per 31 December 2020, 2019 and 2018, the defined benefit obligations are composed of: Belgian regulations require as from 2016 onwards that the mini- mum guaranteed rate of return on employer and participant contributions is 1.75% and is annually recalculated based on a risk-free rate of 10-year government bonds. According to IAS 19, Belgian defined contribution plans that guarantee a specified return on contributions are defined benefit plans, as the employer is not responsible for the contribution pay- ments but has to cover the investment risk until the legal minimum rates applicable. The returns guaranteed by the insurance companies are in most cases lower than or equal to the minimum return guaranteed by law. As a result, the Group has not fully hedged its return risk through an insur- ance contract and a provision needs to be accounted for. The plans at Barco are financed through group insurance contracts. The contracts are benefiting from a contractual interest rate granted by the insurance company. When there is underfunding, this will be covered by the financing fund and in case this is insucient, additional employer contributions will be requested. IN THOUSANDS OF EURO 2020 2019 2018 Pension plans in Belgium 26,190 24,231 13,143 Early retirement plans in Belgium 213 166 783 Local legal requirements (mainly Italy, Korea, Japan, Germany, France) 4,754 5,136 4,580 A small number of individual plans 125 294 251 Total 31,282 29,826 18,757 IAS 19 requires an entity to recognize a liability when an employee has provided service in exchange for employee benefits to be paid in the future. Therefore, pension pro- visions are setup. The obligations are measured on a discounted basis because they are settled many years after the employees render the related service. A qualified actuary has determined the present value of the defined benefit obligations and the fair value of the plan assets. These assets are held by an insurance company. The projected unit credit method was used to estimate the defined benefit obligations, the defined benefit cost and the re-measurements of the net liability. There are 15 defined benefit plans in Barco Belgium, for which we show below the aggregated view as these do not dier materially from geographical location, characteristics, regulatory environment, reporting segment or funding arrangement. In accordance with IAS 19 the disclosure is in the form of a weighted average. Barco Integrated report 2020 74 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 DEFINED BENEFIT OBLIGA TION FAIR VAL UE OF PLAN ASSETS NET DEFINED BENEFIT LIABILITY DEFINED BENEFIT OBLIGA TION FAIR V ALUE OF PLAN ASSETS NET DEFINED BENEFIT LIABILITY DEFINED BENEFIT OBLIGATION FAIR VALUE OF PLAN ASSETS NET DEFINED BENEFIT LIABILITY Pension cost charged to P/L On 1 January 124,416 -100,185 24,231 105,122 -91,980 13,143 94,077 -86,672 7,405 Service cost 7,929 7,929 6,685 6,685 6,602 6,602 Net interest expense 585 -474 111 1,526 -1,379 146 1,358 -1,308 50 Decrease due to curtailment - - -447 -447 Sub-total included in profit or loss 8,513 -474 8,039 7,764 -1,379 6,385 7,960 -1,308 6,652 Benefits paid -1,285 1,285 - -1,020 1,020 - -2,844 2,844 - Remeasurement gains/losses in OCI Increase due to eect of transfers - - - -19 9 -10 - - - Return on plan assets (excluding amounts included in net interest expense) - -2,733 -2,733 - -1,254 -1,254 - -752 -752 Actuarial changes arising from changes in demographic assumptions - - - -479 -479 - Actuarial changes arising from changes in financial assumptions 1,698 1,698 12,199 12,199 281 281 Actuarial changes arising from changes in methodology - - - -172 33 -139 4,821 4,821 Actuarial changes arising from experience adjustments 998 998 1,020 1,020 1,325 1,325 Sub-total included in OCI 2,696 -2,733 -37 12,549 -1,212 11,337 6,427 -752 5,676 Contributions by employer - -6,043 -6,043 - -6,633 -6,633 - -6,590 -6,590 Disposal of subsidiaries - - - - - - -498 498 - On 31 December 134,340 -108,150 26,190 124,416 -100,185 24,231 105,122 -91,980 13,143 2020, 2019 and 2018 changes in the Belgian defined benefit obligation and fair value of plan assets: In 2020 2 million euro net increase in P&L is caused by the increased service cost as a result of a low discount rate com- pared to the minimum guaranteed future rate of return, for which additional employer contributions will be requested. In 2019 12.2 million euro actuarial change arising from changes in financial assumptions concerns a change in the discount rate assumption (see below table). The remeasurement was reflected in other comprehensive income. In 2018 the 4.8 million euro actuarial change arising from change in methodology concerns a change in death in service methodology. The remeasurement went through other comprehensive income. Barco Integrated report 2020 75 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The sensitivity analyses above have been determined based on a method that extrapolates the impact on the defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The sensitivity analyses are based on a change in a significant assumption, keeping all other assumptions constant. These may not be representative for an actual change in the defined benefit obligation, as it is unlikely that changes in assumptions would occur in isolation of one another. IN THOUSANDS OF EURO 2020 2019 2018 Within the next 12 months 3,197 3,071 3,926 Between 2 and 5 years 20,865 24,802 17,893 Between 5 and 10 years 46,857 42,210 22,915 Total expected payments 70,919 70,083 44,734 IN THOUSANDS OF EURO 2020 2019 2018 Discount rate: 0.25% decrease 3,324 3,190 2,537 0.25% increase -3,868 -3,033 -2,384 Future salary change: 0.25% decrease -1,212 -1,181 -924 0.25% increase 596 1,268 989 Future consumer price index change: 0.25% decrease -711 -680 -519 0.25% increase 735 702 535 The following payments are the expected benefit payments from the plan assets: The average duration of the defined benefit plan obligation at the end of the reporting period is 12.6 years (12.5 years in 2019 and 13.7 years in 2018). The expected employer contri- butions to the plan for the next annual reporting period amounts to 7.1 million euro (6.6 million euro in 2019 and 6.2 million euro in 2018); the employee contributions are expected to amount to 1.2 million euro (1.1 million euro in 2019 and 2018). Early retirement plans are recognized as liability and expensed when the company is committed to terminate the employment of the employees aected before the normal retirement date.In Belgium, a multi-em- ployer plan exists for some blue collars where payments go into a sectoral fund. As Barco does not have access to information about the plan that satisfies the requirements of the standard, the plan is further classified as a defined contribution plan and expensed as incurred. (c) Restructuring provision See note 5 Restructuring and impairments. We refer to the accounting standards on provisions including provisions on restructuring. d) Other claims and risks This provision relates to disputes with suppliers, pending litigations and specific customer warranty disputes. Barco cannot provide details on the specific cases, as this could cause considerable harm to Barco in the particular disputes. With respect to the contingent liabilities related to former acquisitions, there is one earn-out capped at 15 million euro linked to the retention of the former shareholders and future results for which the future results could not be reliably esti- mated at acquisition. The earn-outs will flow through profit and loss at moment of payment over the earn-out period, until May 25, 2026. Per end 2020, no payments occurred under this earn-out. The following overview summarizes the sensitivity analysis performed for significant assumptions as at 31 December. The figures show the impact on the defined benefit obligation. 2020 2019 2018 Discount rate 0.29% 0.42% 1.30% Future salary increases 2.44% 2.59% 2.58% Future consumer price index increases 1.75% 1.75% 1.90% The fair value of the plan assets (108.2 million euro) are fully invested in insurance policies. In 2020, the target asset mix consists of 67.50% government bonds (66.5% in 2019), 14% real estate (16% in 2019), 7.5% corporate bonds (7.5% in 2019), 6% corporate loans (6% in 2019) and 5% shares (4% in 2019). The principal assumptions used in determining pension obligations for the Group's plans are shown below: Barco Integrated report 2020 76 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 20. Risk management - derivative financial instruments General risk factors are described in the director’s report “Risk Factors”. Derivative financial instruments are used to reduce the expo- sure 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 gen- erally oset by opposite eects on the item being hedged. Foreign currency risk Recognized assets and liabilities 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 natu - rally 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. The balances on foreign currency monetary items are valued at the rates of exchange prevailing at the end of the account- ing 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. Forecasted transactions 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 eective hedge is recognized directly in comprehensive income. As at 31 December 2020, there were no forward contracts outstanding under hedge accounting treatment. Estimated sensitivity to currency fluctuations Sensitivity to currency fluctuations is mainly related to the evolution of a portfolio of foreign currencies (mainly USD and CNY) versus the euro. This sensitivity is caused by the following factors: - The fair value of foreign currency monetary items is impacted by currency fluctuations. In order to eliminate most of these eects in foreign currencies, Barco uses monetary items and/or derivative financial instruments as described above, which are meant to oset the impact of such results to a major extent. - As the Company has no cash flow hedges in place that aim at hedging forecasted transactions, a similar fluctuation in foreign currencies would not have any eect on the equity position of Barco. - Profit margins may be negatively aected because an important part of sales are realized in foreign currencies, while costs are incurred in a smaller part in these curren- cies. Barco has done great eorts throughout the years to increase its natural hedging ratio in USD (being its main foreign currency in terms of sales) by increasing its opera- tional costs and by purchasing more components in this currency. Impact on adjusted EBIT is currently estimated at -0.5 million euro when the weighted average rate of a foreign currency basket that has an overall overweight of USD, CNY and NOK changes by 10% versus the euro in a year. The overall natural hedge ratio of foreign currencies reached a level of 85% in 2020. - Another impact is the fact that some of Barco’s main com- petitors are USD-based. Whenever the USD decreases in value against the euro, these competitors have a world- wide competitive advantage over Barco. This impact on operating result cannot be measured reliably. Barco Integrated report 2020 77 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Interest rate risk Barco uses following hedging instruments to manage its interest rate risk: Swap on outstanding or anticipated borrowing Barco concluded a series of interest rate swaps with an out- standing notional amount of 12.1 million euro by means of a partial hedge for the bilateral real estate leasing (currently outstanding at 20.0 million euro) for the financing of Barco's HQ campus starting in 2016. This instrument swaps the vari- able interest rate into a fixed 1.76%. These swaps are determined as an eective hedge of out- standing or anticipated borrowings and meet the hedging requirements of IAS 39. The fair values of the eective portion of the hedging instrument are therefore recognized directly in comprehensive income under hedge accounting treatment. Estimated sensitivity to interest rate fluctuations Management doesn’t expect the short-term interest rate to increase significantly in the immediate foreseeable future, which limits the interest exposure on the short-term debt portfolio. With reference to the Fair Values table below, just over 55% of Barco’s outstanding long-term debt portfolio has a fixed interest rate character, which again limits the exposure of the company to interest rate fluctuations. This ratio increases to 79% when including the swap instruments disclosed above. Credit risk Credit risk on accounts receivable 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 2020, Barco continued to conclude credit insurances in order to cover credit risks on specific customers or large contracts on a case by case basis. Credit risk on liquid securities and short-term investments A policy defining acceptable counter parties and the maxi- mum risk per counter party is in place. Short-term invest- ments are made in marketable securities, cash holdings or in fixed term deposits with reputable banks. Barco Integrated report 2020 78 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 Carrying amount/Fair value (approx.) Financial assets Investments at fair value through equity 86,651 23,038 - Trade receivables 146,138 195,358 161,787 Other receivables 17,789 25,669 19,567 Loan and other receivables 12,420 17,930 15,386 Interest rate receivable 24 1,860 1,800 Currency rate swap 5,345 5,879 2,380 Other non-current assets 5,870 4,018 9,732 Other short term investments 3,175 24,748 112,795 Cash and cash equivalents 235,402 357,035 251,807 Total 495,026 629,866 555,688 Financial liabilities Financial debts 20,000 45,390 28,583 Floating rate borrowings 10,838 26,258 26,615 Fixed rate borrowings 9,163 19,132 1,967 Other long-term liabilities 43,286 27,031 24,557 Short-term debts 86 - 686 Trade payables 70,299 128,914 105,148 Other current liabilities 8,980 13,268 48,532 Other short term amounts payable 80 2,825 42,066 Dividends payable 2,290 2,301 2,323 Currency rate Swap 5,529 7,016 2,541 Interest rate swap 1,080 1,126 1,663 Total 142,650 214,603 207,506 Fair values Set out below is an overview of the carrying amounts of the Group’s financial instruments that are shown in the financial statements. In general, the carrying amounts are assumed to be a close approximation of the fair value. 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. Barco Integrated report 2020 79 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The following methods and assumptions were used to estimate the fair values: - Cash and cash equivalents and short-term investments, trade receivables, trade payables, and other current liabili- ties approximate their carrying amounts largely due to the short-term maturities of these instruments. - Investments are measured at market price. For investments that are publicly quoted in an active market, the quoted market price is the best measure of the fair value. The remeasurement at fair value per 31 December 2020 versus the carrying amount is reflected in other comprehensive income. - Long term fixed rate and variable rate other assets are evaluated by the Group based on parameters such as interest rates, specific country risk factors, individual credit- worthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allow- ances are made to account for the expected losses of these receivables. As at 31 December 2020, the carrying amounts of such receivables, net of allowances, are assumed not IN THOUSANDS OF EURO 2020 2019 2018 Assets measured at fair value Financial assets at fair value through profit or loss Foreign exchange contracts - non-hedged 5,345 5,879 2,380 Financial assets at fair value through equity Investments 86,651 23,038 - Liabilities measured at fair value Financial liabilities at fair value through profit or loss Foreign exchange contracts - non-hedged 5,529 7,016 2,541 Interest rate swap - 888 673 Financial liabilities at fair value through equity Interest rate swap 1,080 1,126 991 Fair value hierarchy As at 31 December 2020, the Group held the following financial instruments measured at fair value: to be materially dierent from their calculated fair values. - The fair value of unquoted instruments, loans from banks and other financial liabilities, obligations under finance leases as well as other non-current financial liabilities is estimated by discounting future cash flows using the effective interest rates currently available for debt on similar terms, credit risk and remaining maturities. As of 31 December 2020, the eective interest rate is not materi- ally dierent from the nominal interest rate of the financial obligation. - 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. Barco Integrated report 2020 80 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 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 iden- tical assets or liabilities Level 2: other techniques for which all inputs which have a significant eect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques that use inputs having a significant eect 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, except for the investments which were based on level 1 input. During the reporting period ending 31 December 2020, 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. IN THOUSANDS OF EURO NOTE 2020 2019 2018 Net financial cash/(debt) 14 193,527 329,366 331,964 Equity 697,107 740,650 635,044 % Net financial cash (debt)/equity 27.8% 44.5% 52.3% IN THOUSANDS OF EURO 2020 2019 2018 Equity 697,107 740,650 635,044 Total equity and liabilities 1,018,203 1,174,176 1.047,301 % Equity/Total equity and liabilities 68.5% 63.1% 60.6% Capital Management Management evaluates its capital needs based on following data: In 2020, the net cash position ended at a level of 193.5 million euro compared to 329.4 million euro as per end of 2019. The solvency position and other current ratios continue to consolidate at healthy levels. Together with the existing com- mitted credit facilities, management considers that it has secured a healthy liquidity profile and strong capital base for the further development of the group.We refer to note 14 for the details on the movement. Barco Integrated report 2020 81 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 21. Operating leases IN THOUSANDS OF EURO 2018 Non-cancellable operating leases are payable as follows: Less than one year 8,723 Between one and five years 20,608 More than five years 1,567 Total 30,897 Non-cancellable operating leases in 2018 mainly relate to leases of factory facilities and warehouses and sales oces. During 2018 the total rent expenses recognized in the income statement amounted to 20 million euro, of which 9.1 million euro relating to rent of buildings. As of 1 January 2019, Barco has applied IFRS 16 Leases. We refer to the chapter of Significant IFRS accounting principles and IFRS standards applied as of 2019. Changes in liabilities arising from financing activities IN THOUSANDS OF EURO NONCASH CHANGES January Cash flows IFRS movements Foreign exchange movement December, Long-term borrowings 20,888 -2,871 - -16 18,000 Short-term borrowings 12,469 2,103 - -5,299 9,273 Lease liabilities 19,337 -8,364 8,083 -1,202 17,854 Total liabilities from financing activities 52,695 -9,133 8,083 -6,517 45,127 The long-term borrowings and lease liabilities are together the long-term debts as shown in the balance sheet. The short- term borrowings are the total of current portion of long-term debts and short-term debts, as shown in the balance sheet. The non-cash changes include impacts from fluctuations in the translation of foreign operations balances, including inter- company borrowings of which the balances are eliminated at Group level. Barco Integrated report 2020 82 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 23. Related party transactions Barco NV has entered into arrangements with a number of its subsidiaries and aliated companies in the course of its busi- ness. These arrangements relate to service transactions and financing agreements and were conducted at market prices. Transactions between the Company and its subsidiaries, which are related parties, have been eliminated in the consolidation and are accordingly not disclosed in this note. None of the related parties have entered into any other transactions with the Group that meet the requirements of IAS 24, ‘Related party disclosures’. We refer to note 1 Consolidated companies for an overview of the consolidated and equity accounted companies. We refer to the ‘Corporate Governance Chapter’ for information with respect to remuneration of directors and members of the core leadership team. At the annual shareholders meeting of 26 April 2018, PWC Bedrijfsrevisoren cvba, Woluwedal 18, 1932 Sint-Stevens-Woluwe, was appointed as statutory auditor of the company for a period of three years. In 2020, remuneration approved by the Audit Committee to the statutory auditor for auditing activities amounted to 331,106 euro. Remuneration paid to the statutory auditor for special assignments was 130,215 euro. 22. Rights and commitments not reflected in the balance sheet IN THOUSANDS OF EURO 2020 2019 2018 Guarantees given to third parties (a) 3,850 5,037 4,901 Mortgage obligations given as security (b) 30,000 30,000 30,000 - book value of the relevant assets 36,527 40,460 43,791 Sales commitment - - 1,600 (a) Guarantees given to third parties mainly relate to guarantees given to cus- tomers for ongoing projects, guarantees given to suppliers for investment projects and to authorities for commitments related to VAT, duties, etc. (b) The total mortgage includes three loans of 10 million euro each to fund the headquarter campus. The decrease in net book value since 2017 is due to depreciation. Barco Integrated report 2020 83 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 24. Cash flow statement: eect of acquisitions and disposals The following table shows the eect of acquisitions and disposals on the balance sheet movement of the Group. IN THOUSANDS OF EURO ACQUISITIONS DIVESTMENTS 2019 2018 2018 Non-current assets - - 139 Software - - 3 Tangible assets and other intangible assets - - 136 Current assets - - 1,486 Trade debtors & other receivables - - 1,486 Current liabilities 3,272 5,621 1,019 Trade payables - - 217 Other payables 3,272 5,621 802 Net-identifiable assets and liabilities -3,272 -5,621 605 Net assets held for sale (9% BarcoCFG) - - 5,819 Gain on sale of divestments - - 17,127 Acquired/(sold) cash - - -56,669 Received consideration / Cash sold (net) - - -32,558 Purchase price 3,272 5,621 - Barco Integrated report 2020 84 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE There were no acquisitions and disposals in 2020. The total purchase price in 2019 relates to the last deferred consideration and payment of the last two patent earn-outs on the 2016 MTT acquisition. The total purchase price in 2018 relates to the second deferred consideration and the payment of earn-outs on the issuance of four patents on the 2016 MTT acquisition. The received consideration in 2018 contains mainly the 22.2 million euro received for the sale of the 9% shares in BarcoCFG, resulting in a change in control and corresponding deconsolidation of the underlying net assets. The cash flow statement ‘disposal of group com- panies’ shows net of disposed cash, since as a result of the deconsolidation, the BarcoCFG cash of 56.7 million euro is disposed. Next to the BarcoCFG transaction, 1.3 million euro was received on the sale of the X2O Media entity. We refer to the Cash flow statement and note 1.3 on acqui- sitions and divestments. 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. Barco Integrated report 2020 85 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE 25. Events subsequent to the balance sheet date There are no major events subsequent to the balance sheet date which have a major impact on the further evolution of the company. Barco Integrated report 2020 86 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 Adjusted EBIT 10,180 110,038 89,974 Restructuring -9,536 -13,717 -2,882 Gain on sale of divestments - - -743 Depreciation of tangible and intangible fixed assets 43,383 42,984 34,492 Gain/(Loss) on tangible fixed assets 170 -1,024 -149 Share in the profit/(loss) of joint ventures and associates -276 1,566 191 Gross operating Free Cash Flow 43,921 139,848 120,882 Changes in trade receivables 41,391 -32,160 -11,209 Changes in inventory -12,260 -32,989 334 Changes in trade payables -59,936 23,404 -1,306 Other changes in net working capital -23,960 15,618 -12,722 Change in net working capital -54,764 -26,126 -24,903 Net operating Free Cash Flow -10,843 113,721 95,979 Interest received 1,845 7,648 5,915 Interest paid -1,965 -1,866 -1,566 Income taxes -10,398 -13,053 -12,460 Free Cash flow from operating activities -21,361 106,451 87,869 Purchases of tangible & intangible FA -14,980 -20,169 -25,627 Proceeds on disposals of tangible & intangible fixed assets 488 2,379 922 Free Cash flow from investing activities -14,493 -17,790 -24,705 FREE CASH FLOW -35,854 88,661 63,164 Supplementary statements Free cash flow for 2020 was -36 million euro reflecting lower EBITDA, cash-outlays associated with the restructuring and working capital, while reduced compared to 1H20, still higher than end of year 2019 at approximately 10% of sales. Free Cash Flow At the end of December 2020, Barco’s net cash position reaches 193.5 million euro, a decrease compared to last year (2019: 329.4 million euro, 2018: 332 million euro) as a result of the negative free cash flow (-36 million euro), dividends paid out (-33 million euro), investments (-55 million euro) and currency impact. Barco Integrated report 2020 87 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 Trade debtors 146,138 195,358 161,787 Inventory 175,390 168,983 135,111 Trade payables -70,299 -128,914 -105,148 Other working capital -170,620 -205,246 -189,289 Working capital 80,610 30,181 2,462 Other long term assets & liabilities 210,493 232,479 220,515 Operating capital employed 291,102 262,661 222,977 Goodwill 105,612 105,612 105,612 Operating capital employed (incl goodwill) 396,714 368,272 328,589 Adjusted EBIT 10,180 110,038 89,974 ROCE after tax (%) (a) 3% 25% 23% Return on Operating Capital Employed (a) Tax rate used is the eective tax rate (in 2020: 0%; 2019: 18% and 2018: 17.7%). The return on capital employed is at 3% in 2020 (2019: 25%, 2018: 23%), due to the lower operational result and increased working capital, both impacted by the global covid-19 pandemic. Balance Sheet Inventory + accounts receivable – accounts payable over sales was 32.6% compared to 21.7% in 2019. Net working capital was 10% of sales compared to 3% in 2019. While year-end working capital was higher than 2019, it improved relative to 108 million euro at mid-year reflecting reduced inventory levels and reduced DSO from 82 days sales outstanding to 67 at the end of the year. Inventory levels remained high in 2020, mainly in Entertain- ment, a combined eect of build-up safety stocks at the start of and lower and changing customer demand after the international spread of the covid-19 pandemic. Barco Integrated report 2020 88 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Supplementary information Barco NV Summary version of statutory accounts Barco NV 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 dier 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 Interna- tional 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 upon 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 2020 gives a true and fair view of the financial position and results of the company in accor- dance with all legal and regulatory dispositions. Barco Integrated report 2020 89 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Balance sheet after appropriation IN THOUSANDS OF EURO 2020 2019 2018 Fixed assets , , , Intangible fixed assets , , , Tangible fixed assets , , , Financial fixed assets , , , Current assets , , , Amounts receivable after more than one year - - Inventory , , , Amounts receivable within one year , , , Investments (own shares) , , , Cash and cash equivalents , Deferred charges and accrued income , , , Total assets , , , Capital and reserves , , , Capital , , , Share premium account 146,776 146,741 146,663 Reserves 34,207 36,054 42,156 Accumulated profits , , , Investment grants 193 303 631 Provisions 11,739 15,818 24,059 Provisions for liabilities and charges , , , Creditors 330,404 392,066 367,954 Amounts payable after more than one year 18,000 20,000 23,890 Amounts payable within one year 312,404 372,066 344,064 Total Iiabilities , , , Intangible fixed assets relate mainly to the implementation cost of SAP ERP software. These SAP capital expenditures are amortized over 7 years. The main capex realized in 2018 and 2019 related to the extended operations facility at the headquarters in Kortrijk. Financial fixed assets in 2020 decreased 34 million euro, as a result of statutory impairments on the participations in Barco Ltd. (Taiwan) and in Barco Fredrikstad AS (Norway), both as a result of the integration of the business into Barco NV, and on Barco Taiwan Technology Ltd (Taiwan) because of the closure of the Taiwan factory and the decision to liquidate the legal entity. Barco Integrated report 2020 90 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE The increase of inventory in 2019 is the result of the trans- fer of business from Norway and the launch and ramp-up of new products. Inventory levels remained high in 2020, mainly in Entertainment, a combined eect of build-up of safety stocks at the start of and lower and changing cus- tomer demand after the international spread of the covid-19 pandemic. Amounts receivables are lower in 2020 because of the lower sales. Amounts payable are lower in 2020 due to braked purchases as a result of the lower demand. Barco Integrated report 2020 91 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 Sales 583,172 772,944 674,159 Recurring operating income/(loss) -15,954 70,795 38,810 Recurring financial result 44,514 -2,973 1,515 Non-recurring financial result -41,784 -43,604 -2,861 Income taxes -4,030 -568 -333 Transfer to untaxed reserves - -850 - Profit/(loss) for the year -17,254 22,800 37,131 Income statement Barco NV sales in 2020 decreased 25% to 583 million euro, due to lower sales in Entertainment (-34%) and Enterprise (-31%), as a result of the negative impact of the covid-19 pandemic on Barco’s Entertainment and Enterprise markets. The lower high margin Enterprise sales are the main reason for the lower gross profit margin in 2020. Cost measures were taken to align the activity rate with market realities and demand, resulting in 23% lower operating charges. Barco continued to invest in strategic and commercial initiatives, in order to strengthen its leadership position when markets recover. As such, cost measures did not fully compensate for the decrease in gross margins, which has led to an operating loss of -16 million euro, compared to a profit of 70.8 million euro in 2019. The recurring financial income in 2020 includes intercom- pany dividends received from Barco Electronic Systems Pvt. Ltd. (India), Barco Fredrikstad AS (Norway), Barco Limited (Taiwan) and Barco Inc (US). The non-recurring financial result consists of impairments booked on financial fixed assets (see above). In 2019 this was the result of the impairment on Barco Fredrikstad and Barco Taiwan. The income taxes relate to withholding taxes on received dividends. In 2019 this relates to the cost of investment in the Belgian tax shelter regime. The transfer to untaxed reserves is also linked to this tax shelter regime in 2019. Barco Integrated report 2020 92 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE IN THOUSANDS OF EURO 2020 2019 2018 Profit/(loss) for the year for appropriation -17,254 22,800 37,131 Profit brought forward 87,771 91,374 76,480 Profit to be appropriated 70,517 114,174 113,611 Transfer from other reserves -1,848 -6,951 -6,443 Profit to be carried forward 38,977 87,771 91,374 Gross dividends 33,388 33,354 28,680 Total 70,517 114,174 113,611 Proposed appropriation of Barco NV result The board of directors of Barco NV will propose to the General Assembly to distribute a gross dividend of 0.378 euro per share. Barco’s shareholders will be oered the choice between payment in cash or dividend in shares, enabling Barco’s shareholders to reinvest in the company. Barco Integrated report 2020 93 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Information about the share Barco Integrated report 2020 94 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Barco Integrated report 2020 94 FIN Financial report Barco Integrated report 2020 95 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Key figures for the shareholder (a) Gross dividend / share price at year-end closing date (b) Increase or decrease share price + gross dividend paid out in the year, divided by closing share price of previous year (c) Gross dividend number of shares on 31 December / net income attributable to the equity holder of the parent (d) Share price 31 December / earnings per share Number of shares (in thousands): 91,487 91,482 91,471 PER SHARE IN EURO 2020 2019 2018 EPS -0.05 1.09 0.86 Diluted EPS -0.05 1.07 0.85 Gross dividend 0.378 0.378 0.329 Net dividend 0.26 0.26 0.23 Return on Equity (ROE) -0.7% 13.0% 12% Gross dividend yield (a) 2.1% 1.2% 2.3% Yearly return (b) -41.8% 123.8% 13.2% Pay-out ratio (c) -787.1% 36.3% 40.1% Price/earnings ratio (d) -358.0 28.8 16.4 Values for 2018 & 2019 restated following to the 7:1 share split, see press release Barco Integrated report 2020 96 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Share price performance 0 5 10 20 25 30 35 40 15 2010 2011 2012 2013 2014 2015 2016 2019 202020182017 Lowest to highest closing price Average closing price Values for 2018 & 2019 restated following to the 7:1 share split, see press release Share price PER SHARE IN EURO 2020 2019 2018 2017 2016 Average closing price 21.22 23.80 15.09 12.42 9.41 Highest closing price 35.21 31.71 17.66 13.62 11.50 Lowest closing price 12.76 14.37 12.84 11.28 7.77 Closing price 31/dec 17.82 31.29 14.13 12.75 11.43 Average number of shares traded daily () 279,797 171,185 162,505 118,032 153,448 Stock market capitalization on 31 December (in millions) 1,630.31 2,862.09 1,292.35 1,166.00 1,045.05 () The average number of shares traded daily is taking into account the trades as registered and disclosed by Euronext. Barco Integrated report 2020 97 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE January February March April May June July August September October November December January February March April May June July August September October November December January February March April May June July August September October November December 100,000 200,000 300,000 500,000 600,000 400,000 2018 2019 2020 Liquidity SOURCE SOURCE 2020 2019 2018 Total yearly volume (shares) Euronext Brussels 71,907,829 42,274,925 34,975,857 Daily average number of shares traded Euronext Brussels 279,797 171,185 162,505 Total yearly volumes (turnover) in million euro Euronext Brussels 1,459.92 1,008.55 528.20 Velocity Euronext Brussels 77.56% 45.99% 38.16% Daily average shares traded Values for 2018 & 2019 restated following to the 7:1 share split, see press release Barco Integrated report 2020 98 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Barco share price 2020 Barco share price 2020 10 20 00 30 40 02-01 01-0301-02 01-04 01-05 01-06 01-07 01-08 01-09 01-10 01-11 01-12 -40 -20 20 0% 40 60 02-01 01-0301-02 01-04 01-05 01-06 01-07 01-08 01-09 01-10 01-11 01-12 Barco Bel 20 Next 150 Barco / Bel 20 / Next 150 Barco Eurostoxx 50 Eurostoxx technology Nasdaq - 100 Barco / Eurostoxx 50 / Eurostoxx Technology / Nasdaq - 100 Barco -60 -40 -20 20 0% 40 60 02-01 01-0301-02 01-04 01-05 01-06 01-07 01-08 01-09 01-10 01-11 01-12 -60 50 60 Barco Integrated report 2020 99 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Shareholder structure Shareholders A study of Barco’s global shareholdership, carried in Decem- ber 2020, plotted almost 98% of the company’s shareholder composition (1) , compared to 97% a year earlier. Identified institutional investors hold almost 75% of all shares (compared to 76% the year before). Treasury shares held by the company are good for 3.5% of the shares and approximately 14.5% of the shares are held by retail investors, up from 13% a year ago. Geographic distribution Belgium remains the dominant investment region in Barco’s institutional shareholder base, with a strong proportional rep- resentation versus peers and industry averages. Over 2020 domestic investors were net buyers of the stock, fueled by some new entrants, to hold now 45% of the institutional shares compared to 40% at the end of 2019. US remain the second largest region in institutional ownership with a 21%, down from 25% the year before. The decline was partly influenced by the exit of some quant driven funds. France jumped over the UK to become the third region of institutional investors, increasing their exposure with 2.5 percentage points. United Kingdom was a net seller with ownership moving from 9% in 2019 to 7.7% at the of 2020. Compared to the Nasdaq Belgian client base benchmark, Bel- gium and Norway continue to show overweight position driven by the domestic reference shareholder and Norges Bank, bal- anced by underweight positions for US, UK and France. Investment style Especially in the first half of the year value type ownership give in to land at 14% from 20% a year before. While a number of growth oriented investors featured amongst the top buyers and sellers and were the most active in the panel, growth ownership remained quiet stable at 17.6%; com- pared to 18% a year ago. GARP-type investors strengthened their position from 11% to hold approximately 13% at the end of 2020. As the company has a large proportion of “other investment style” owners, all other main categories remain underweight when compared to Nasdaq Technology Base benchmark. Index type investors decreased their position, compared to the year before, owning now almost 7% compared to 8 % the year before. Investing responsibly According to the analysis, 20% of the institutional shares is held by SRI (Social Responsible Investment) funds (mainly Europe and mainly Core SRI), an increase of 10 percentage points compared to 2019 and 2018 levels. Core SRI are investors with an outstanding level of commitment to investing responsibly which have achieved a full integration of ESG performance factors in their investment decisions models. These investors include the most progressive pension fund managers and specialist SRI investment advisors. Concentration Overall concentration level amongst Barco top holders increased over 2020 with the major shifts taking place in the first half of the year. All categories (Top-10, 25 and 50) increased over this analysis period. The categories now account for: • Top 10: 51 % compared to 45% • Top 25: 73% compared to 61% • Top 50: 88% compared to 69% Compared to the average observed in the mid cap client base benchmark, Barco’s concentration levels are slightly over- weight on the top 50 and 25 and underweight compared to top 10. (1) Shareholder analysis performed by Nasdaq Advisory services in December 2020 and January 2021 Barco Integrated report 2020 100 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Shareholder structure Geographic distribution Investment style 74.2% 14.4% 3.5% 5.7% 2.2% 13.3% 20.3% 13.1% 7.7 % 1.1% 44.6% 45.4% 21% 11.5% 7.7 % 3.4% 10.7% <1% Value Growth GARP Index Hedge Fund Other Belgium United States France United Kingdom Norway Rest of Europe Rest of world Institutional Retail Company-related Brokerage/trading Miscellaneous Ownership of Barco’s shares 2020 (per 31 December 2020) Titan Baratto NV Norges Bank (Central Bank of Norway) 3D NV Barco NV Public TOTAL 18.38% 4.48% 3.94% 3.45% 100.00% 69.73% 91,487,438 total amount of shares Barco Integrated report 2020 101 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Shareholder remuneration Dividend Barco’s board of directors will propose to the General Assembly to distribute a gross dividend of 0.378 euro per share. Barco’s shareholders will be oered the choice between payment in cash or dividend in shares, enabling Barco’s shareholders to reinvest in the company. Chairman of the board, Mr. Charles Beauduin and director, Mr. Frank Donck, have confirmed the intent of respectively Titan Baratto NV and 3D D NV, to opt for the stock dividend. This is year-over-year a stable dividend. Modalities for the dividend as well as ex-, record and payment date will be announced at the latest with the convening of the Annual General Assembly 2021. Dividend policy The dividend is set by the Board of Directors and subsequently proposed at the Annual General Meeting of shareholders at the end of each fiscal year. • Board believes that consistency and reliability towards the investment community is key, and considers a consistent dividend pay-out as a key contributor, reflecting the long term confidence in the company & its future growth and opportunities • The Board wants to also protect the strong balance sheet of the company and Barco’s capability to invest in the future. Barco’s investment case Strong foundation with technology & market leadership in healthy markets Backed by over 85 years of experience, Barco is a strong brand known for its technology leadership in three solid and healthy markets: Entertainment, Enterprise and Healthcare. Building on sustainable advantages, Barco has established global leader- ship positions in all of these markets. The solutions delivered to these markets are mostly mission-critical with a real eec - tive need for high-performance and reliable technology. Based on a solid experience, a thorough understanding of customer needs, advanced know-how in developing dier- entiated technology and delivering value-add solutions and a well-developed go-to-market network, Barco continues to lead in these markets. Focused strategy The company is implementing its “enabling bright out- comes”-strategy, building capabilities to become a successful hardware + software + service company, to capture more of the lifecycle opportunity of its solutions and as a result enhance the relationships with its customer base and strengthen the contribution of recurring revenues. Solid financial results Over the past years, Barco has streamlined its organization, and continues to sharpen the focus of its activities. Since introducing the ‘focus to perform’ program in 2016, as part of the ‘enabling bright outcomes’ strategy, Barco has made measurable and steady progress primarily by rationalizing the business portfolio and part of the footprint and by implement- ing value engineering initiatives. As a result EBITDA margin expanded from 8% in 2016 to 12% in 2018 and net earnings grew to 7% of sales. In 2019 the company resumed topline growth (+9%) with sales increases in all divisions and further strengthened its EBITDA margin to 14%. In 2020 the company faced a weak year due to pandemic-impacts resulting in a strong decline of sales and profits. The company is confident to recapture growth again in its markets when the recovery sets in and to get back to its path towards its long-term finan- cial objectives. Except for 2020, Barco booked year-on-year net cash positive results. The company follows a conservative course in man - aging its financials and net cash position. A strong & reliable leadership team With some new experienced leaders, Barco’s leadership team became more global and diversified over the past couple of years and allowed to blend insights of new members with the strong potential and competencies available at Barco. The team delivered on its promises in line with its stated Say.Do objective. Confident that Barco has the required assets to further deliver sustainable profitable growth, the company implemented its ‘fit to lead’ program, a capability building and eciency plan and is determined to resume topline growth across the dierent business segments when the recovery sets in. Shareholder trust Barco has a stable international shareholder base with a pre- dominance of value-oriented investors. Since 2015, both Titan Barato NV and 3D NV are represented in the Board of Directors. Together, they now own more than 22% of Barco’s shares. Board believes that consistency and reliability towards the investment community is key, and considers a consistent div- idend pay-out as a key contributor, reflecting the long term confidence in the company & its future growth and oppor- tunities. Barco Integrated report 2020 102 FIN Financial report 01 BARCO CONSOLIDATED 02 INFORMATION ABOUT THE SHARE Analysts covering Barco Bank Degroof Petercam sa Kris Kippers Berenberg Trion Reid De Belegger Geert Smet Flemish Federation of Investors and Investor Club Gert De Mesure ING Marc Hesselink KBC Securities Guy Sips Kempen & Co N.V. Christophe Beghin Kepler Cheuvreux Matthias Maenhaut Announcement of results 4Q20 and FY20 Tuesday 26 January 2021 Trading update 1Q21 Wednesday 21 April 2021 Extra-ordinary shareholders meeting Friday 26 March 2021 Annual general and extra-ordinary shareholders meeting Thursday 29 April 2021 Announcement of results 1H21 Monday 19 July 2021 Trading update 3Q21 Wednesday 20 October 2021 Barco share BAR ISIN BE0974362940 Reuters BARBt.BR Bloomberg BAR BB Financial calendar 2021 Share info More info including the quarterly consensus update, reports, reference to conference, roadshows and relevant tradeshows are available on Barco’s investor portal www.barco.com/investors BARCO NV Statutory auditor's report to the general shareholders’ meeting on the consolidated accounts for the year ended 31 December 2020 10 February 2021 PwC Bedrijfsrevisoren BV - PwC Reviseurs d'Entreprises SRL - Financial Assurance Services Maatschappelijke zetel/Siège social: Woluwe Garden, Woluwedal 18, B-1932 Sint-Stevens-Woluwe Vestigingseenheid/Unité d'établissement: Sluisweg 1 bus 8, B-9000 Gent T: +32 (0)9 268 82 11, F: +32 (0)9 268 82 99, www.pwc.com BTW/TVA BE 0429.501.944 / RPR Brussel - RPM Bruxelles / ING BE43 3101 3811 9501 - BIC BBRUBEBB / BELFIUS BE92 0689 0408 8123 - BIC GKCC BEBB STATUTORY AUDITOR'S REPORT TO THE GENERAL SHAREHOLDERS’ MEETING OF THE COMPANY BARCO NV ON THE CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020 We present to you o ur statutory auditor’s report in the context of our statutory audit of the consolidated accounts of Barco NV (the “Company”) and its subsidiaries (jointly “the Group”). This report includes our report on the consolidated accounts, as well as the other legal and regulatory requirements. This forms part of an integrated whole and is indivisible. We have been appointed as statutory auditor by the general meeting d.d. 26 April 2018, following the proposal formulated by the board of directors and following the recommendation by the audit committee and the proposal formulated by the works’ council. Our mandate will expire on the date of the general meeting which will deliberate on the annual financial statements for the year ended 31 December 2020. We have performed the statutory audit of the consolidated financial statements of Barco NV for 3 consecutive years. Report on the consolidated accounts Unqualified opinion We have performed the statutory audit of the Group’s consolidated accounts, which comprise the consolidated balance sheet as at 31 December 2020, the consolidated statement of income, the statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flow for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information, and which is characterised by a consolidated balance sheet total of EUR ‘000 1,018,203 and a net loss attributable to the equity holder of the parent of EUR ‘000 4,393. In our opinion, the consolidated accounts give a true and fair view of the Group’s net equity and consolidated financial position as at 31 December 2020, and of its consolidated financial performance and its consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. Basis for unqualified opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Belgium. Furthermore, we have applied the International Standards on Auditing (ISAs) as approved by the IAASB which are applicable to the year- end and which are not yet approved at the national level. Our responsibilities under those standards are further described in the “Statutory auditor’s responsibilities for the audit of the consolidated accounts” section of our report. We have fulfilled our ethical responsibilities in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Belgium, including the requirements related to independence. We have obtained from the board of directors and Company officials the explanations and information necessary for performing our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 3 of 7 Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated accounts of the current period. These matters were addressed in the context of our audit of the consolidated accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Impairment testing of goodwill - Note 8 Description of key audit matter The carrying value of the Group’s goodwill amounts to EUR’000 105,612 at 31 December 2020. These assets are subject to impairment testing on an annual basis or more frequently if there are indicators of impairment. We consider this matter as key to our audit because the determination of whether or not an impairment charge is necessary involves significant judgement in estimating the future results of the business. How our audit addressed the key audit matter We evaluated the appropriateness of the Group’s accounting policies and assessed compliance with the policies in accordance with IFRS. We evaluated management’s annual impairment testing and assessment of the indicators of impairment and challenged impairment calculations by assessing the future cash flow forecasts used in the models, and the process by which they were drawn up, including comparing them to the latest budgets approved by the board of directors. We understood and challenged: ● Assumptions used in the Group’s budget and internal forecasts and the long-term growth rates by comparing them to economic and industry forecasts; ● The discount rate by assessing the cost of capital and other inputs including benchmarking with comparable organizations; ● The historical accuracy of budgets to actual results to determine whether cash flow forecasts are reliable based on past experience; ● The mechanics of the underlying calculations. In performing the above work, we utilized our internal valuation experts to provide challenge and external market data to assess the reasonableness of the assumptions used by management. We evaluated the sensitivity analysis around the key drivers within the cash flow forecasts to ascertain the extent of change in those assumptions and also considered the likelihood of such a movement in those key assumptions arising. Whilst recognizing that cash flow forecasting, impairment modeling and valuations are all inherently judgmental, we found that the assumptions used by management were within an acceptable range of reasonable estimates. 4 of 7 Valuation of deferred taxes and valuation allowance on deferred tax assets related to tax losses carried forward - Note 10 Description of key audit matter Deferred tax assets on tax losses carried forward and tax credits amounts to EUR’000 36,470 (note 10). The valuation of the deferred tax positions at Barco involved significant judgement, more specifically in the determination of the recognition of deferred tax assets related to tax losses carried forward. The estimation of the future taxable basis is highly judgemental as well as the assessment of the impact of tax laws and regulations, tax planning action and strategies, rulings and transfer pricing. The valuation and recoverability of deferred tax assets is key to our audit due to the magnitude of the amount recognized for these assets and because the assessment requires management estimates, mainly on the assumptions regarding expected future market and economic conditions and tax laws and regulation. How our audit addressed the key audit matter We challenged the assumptions made to assess the recoverability of deferred tax assets related to tax losses carried forward and the timing of the reversal of deferred tax positions. During our procedures, we used amongst others budgets, forecasts and tax laws and in addition we assessed the historical accuracy of management’s assumptions. We involved tax specialists in our audit. An important management judgement was the period over which taxable profits can be reliably estimated and consequently, no deferred tax assets are recognised for tax losses used in any period beyond. We verified that the deferred tax position was calculated at the enacted tax rate for the year in which the deferred tax position is expected to reverse. We also assessed the adequacy and completeness of the Company’s disclosure included in Note 10 in respect of deferred taxes. We found management’s judgements in respect of the Group’s deferred tax positions to be consistent and in line with our expectations. Responsibilities of the board of directors for the preparation of the consolidated accounts The board of directors is responsible for the preparation of consolidated accounts that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium, and for such internal control as the board of directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated accounts, the board of directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the board of directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. 5 of 7 Statutory auditor’s responsibilities for the audit of the consolidated accounts Our objectives are to obtain reasonable assurance about whether the consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated accounts. In performing our audit, we comply with the legal, regulatory and normative framework applicable to the audit of the consolidated accounts in Belgium. A statutory audit does not provide any assurance as to the Group’s future viability nor as to the efficiency or effectiveness of the board of directors’ current or future business management at Group level. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • Obtain an understanding of internal control relevant to the audit 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; • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors; • Conclude on the appropriateness of the board of directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor’s report to the related disclosures in the consolidated accoun ts or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our statutory auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern; • Evaluate the overall presentation, structure and content of the consolidated accounts, including the disclosures, and whether the consolidated accounts represent the underlying transactions and events in a manner that achieves fair presentation; • Obtain sufficient and appropriate audit evidence regarding the financial inform ation of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. 6 of 7 We communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the audit committee, we determine those matters that were of most significance in the audit of the consolidated accounts of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter. Other legal and regulatory requirements Responsibilities of the board of directors The board of directors is responsible for the preparation and the content of the directors’ report on the consolidated accounts, the separate report on non-financial information and the other information included in the report on the consolidated financial statements. Statutory auditor’s responsibilities In the context of our mandate and in accordance with the Belgian standard which is complementary to the International Standards on Auditing (ISAs) as applicable in Belgium, our responsibility is to verify, in all material respects, the directors’ report on the consolidated accounts, the separate report on non- financial information and the other information included in the report on the consolidated accounts and to report on these matters. Aspects related to the directors’ report on the consolidated financial statements and to the other information included in the annual report on the consolidated financial statements In our opinion, after having performed specific procedures in relation to the directors’ report on the consolidated accounts, this report is consistent with the consolidated accounts for the year under audit, and it is prepared in accordance with article 3:32 of the Companies’ and Associations’ Code. In the context of our audit of the consolidated financial statements, we are also responsible for considering, in particular based on the knowledge acquired resulting from the audit, whether the directors’ report is materially misstated or contains information which is inadequately disclosed or otherwise misleading. In light of the procedures we have performed, there are no material misstatements we have to report to you. The non-financial information required by virtue of article 3:32, §2 of the Companies’ and Associations’ Code is included in the directors’ report on the consolidated accounts. The Company has prepared the non-financial information, based on Global Reporting Initiative Standards. However, in accordance with article 3:80, §1, 5° of the Companies’ and Associations’ Code, we do not express an opinion as to whether the non-financial information has been prepared in accordance with the Global Reporting Initiative Standards as disclosed in the consolidated accounts. 7 of 7 Statement related to independence ● Our registered audit firm and our network did not provide services which are incompatible with the statutory audit of the consolidated financial statements, and our registered audit firm remained independent of the Group in the course of our mandate. ● The fees for additional services which are compatible with the statutory audit of the consolidat ed financial statements referred to in article 3:65 of the Companies’ and Associations’ Code are correctly disclosed and itemized in the notes to the consolidated financial statements. Other statements ● This report is consistent with the additional report to the audit committee referred to in article 11 of the Regulation (EU) N° 537/2014. Ghent, 10 February 2021 The statutory auditor PwC Reviseurs d'Entreprises SRL / PwC Bedrijfsrevisoren BV Represented by Lien Winne Peter Opsomer Réviseur d’Entreprises / Bedrijfsrevisor Réviseur d’Entreprises / Bedrijfsrevisor 2020 Integrated annual report GRI Content index ENABLING BRIGHT OUTCOMESbarco.com Reporting period, cycle and scope This integrated report provides an overview of our most relevant intentions, achievements and objectives in 2020, unless stated otherwise. The scope of the report is Barco worldwide, unless stated otherwise. The report is published annually. Date of previous report: Febuary 2020. GRI standards This report has been prepared in accordance with the GRI Standards: ‘Core option’. GRI Content index Pages without prefix refer to the Core integrated report. PPC refers Planet-People-Communities report. FIN refers to Finan- cial report. CCG refers to Corporate governance report. GRI refers to GRI index. GLO refers to the Glossary. ASR refers to Assurance report. GRI Content index This is the GRI Content index of Barco’s 2020 Integrated annual report. Other sections are available via the download center at ir.barco.com/2020. CORE MORE • Governance & risk report • Report on planet - people - communities • Financial report ANNEX • Assurance report • GRI Content • Glossary Barco Integrated report 2020 2 GRI Content index GRI GRI CONTENT INDEX DISCLOSURE PAGE GRI 100 UNIVERSAL STANDARDS GRI 102 General Disclosures 2016 102-1 Name of the organization 9, 71 102-2 Activities, brands, products and services 11, 19, 37-41, 42-54 102-3 Location of headquarters 71 102-4 Location of operations 12 102-5 Ownership and legal form FIN/26-27 102-6 Markets served 11, 42-54, FIN/30-36 102-7 Scale of the organization 11-12, 20-21, 42-54, 55-70, FIN/6 102-8 Information on employees and other workers 12, PPC/33 102-9 Supply chain CGR/53, PPC/61 102-10 Significant changes to the organization's size, structure, ownership or supply chain FIN/22-25, FIN/29, FIN/30-41 102-11 Precautionary Principle or approach CGR/40-43 102-12 External initiatives PPC/73-74 102-13 Membership of associations PPC/60-61 102-14 Statement from senior decision-maker 4-5, 58, PPC/3 102-15 Key impacts, risks, and opportunities 29-36, CGR/38-56, PPC/6-9, FIN/22-25 102-16 Values, principles, standards, and norms of behavior 16-17, PPC/36-38, PPC/58-61 102-17 Mechanisms for advice and concerns about ethics PPC/60 102-18 Governance structure 13-15, CGR/6-15, CGR/17-21 102-19 Delegating authority PPC/68-70 102-20 Executive-level responsibility for economic, environmental, and social topics PPC/68-70 Barco Integrated report 2020 3 GRI Content index GRI GRI CONTENT INDEX Barco Integrated report 2020 4 GRI Content index GRI GRI CONTENT INDEX DISCLOSURE PAGE 102-21 Consulting stakeholders on economic, environmental, and social topics 33-36, PPC/6-9, PPC/71-74 102-22 Composition of the highest governance body and its committees 14, CGR/6-9, CGR/17-21 102-23 Chair of the highest governance body 14, CGR/6-9, CGR/17-21 102-24 Nominating and selecting the highest governance body CGR/9, CGR/17, CGR/20 102-25 Conflicts of interest CGR/37 102-26 Role of highest governance body in setting purpose, values, and strategy CGR/17-22, CGR/37, PPC/69 102-27 Collective knowledge of highest governance body CGR/17-21, PPC/69 102-28 Evaluating the highest governance body’s performance CGR/22 102-29 Identifying and managing economic, environmental, and social impacts CGR/38-56, PPC/7-9, PPC/71-72 102-30 Eectiveness of risk management processes CGR/39-43 102-31 Review of economic, environmental, and social topics CGR/17-21, PPC/69 102-32 Highest governance body’s role in sustainability reporting PPC/69 102-33 Communicating critical concerns CGR/43, CGR/56 102-35 Remuneration policies CGR/23-31 102-36 Process for determining remuneration CGR/23-32 102-37 Stakeholders’ involvement in remuneration CGR/23-23, CGR/29 102-38 Annual total compensation ratio CGR/36-37 102-40 List of stakeholder groups PPC/71-72 102-41 Collective bargaining agreements PPC/34 102-42 Identifying and selecting stakeholders PPC/71-72 102-43 Approach to stakeholder engagement PPC/71-72 102-44 Key topics and concerns raised PPC/71-72, PPC/60 DISCLOSURE PAGE 102-45 Entities included in the consolidated financial statements FIN/26 102-46 Defining report content and topic Boundaries PPC/6 102-47 List of material topics PPC/7 102-48 Restatements of information N/A 102-49 Changes in reporting PPC/6 102-50 Reporting period GRI/2 102-51 Date of most recent report GRI/2 102-52 Reporting cycle GRI/2 102-53 Contact point for questions regarding the report 71 102-54 Claims of reporting in accordance with the GRI Standards GRI/2 102-55 GRI Content Index GRI 102-56 External assurance ASR GRI 103 Management approach 2016 103-1 Explanation of the material topic and its Boundary PPC/7-9 103-2 The management approach and its components CGR/5, CGR/48-56, PPC/11-70 103-3 Evaluation of the management approach PPC/60, PPC/74-76, CGR/17-37 GRI 200 ECONOMIC TOPICS GRI 201 Economic Performance 2016 201-1 Direct economic value generated and distributed FIN/6, FIN/30-33, FIN/37-41 201-4 Financial assistance received from government FIN/41, FIN/44, FIN/45 GRI 205 Anti-corruption 2016 205-2 Communication and training about anti-corruption policies and procedures CGR/55, PPC/58-59, PPC/64 Barco Integrated report 2020 5 GRI Content index GRI GRI CONTENT INDEX DISCLOSURE PAGE 205-3 Confirmed incidents of corruption and actions taken PPC/60 GRI 207 Tax 2019 207-1 Approach to tax FIN/45, FIN/55-56 207-2 Tax governance, control, and risk management CGR/22 GRI 300 ENVIRONMENTAL TOPICS GRI 302 Energy 2016 302-1 Energy consumption within the organization PPC/14, PPC/17 302-2 Energy consumption outside of the organization PPC/14, PPC/24 302-3 Energy intensity PPC/14, PPC/17, PPC/24 302-4 Reduction of energy consumption PPC/17, PPC/24 302-5 Reductions in energy requirements of products and services PPC/24 GRI 303 Water and euents 2018 303-3 Water withdrawal PPC/14 GRI 305 Emissions 2016 305-1 Direct (Scope 1) GHG emissions PPC/15 305-2 Energy indirect (Scope 2) GHG emissions PPC/15 305-3 Other indirect (Scope 3) GHG emissions PPC/15 305-4 GHG emissions intensity PPC/15 305-5 Reduction of GHG emissions PPC/18-20, PPC/25 GRI 306 Waste 2020 306-2 Management of significant waste-related impacts PPC/23, PPC/31-32 306-3 Waste generated PPC/14 Barco Integrated report 2020 6 GRI Content index GRI GRI CONTENT INDEX DISCLOSURE PAGE 306-4 Waste diverted from disposal PPC/14 GRI 308 Supplier Environmental Assessment 2016 PPC/14 GRI 400 SOCIAL TOPICS GRI 401: Employment 2016 401-1 New employee hires and employee turnover 21, PPC/34 GRI 403 Occupational Health & Safety 2018 403-1 Occupational health and safety management system PPC/38, PPC/40 403-2 Hazard identification, risk assessment, and incident investigation PPC/38, PPC/37 403-3 Occupational health services PPC/41 403-4 Worker participation, consultation, and communication on occupational health and safety PPC/40 403-5 Worker training on occupational health and safety PPC/40 403-6 Promotion of worker health PPC/41 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships PPC/53 403-9 Work-related injuries PPC/34, GLO/6 GRI 404 Training and Education 2016 404-1 Average hours of training per year per employee PPC/34, GLO/4 404-2 Programs for upgrading employee skills and transition assistance programs PPC/35, PPC/42-43 GRI 405 Diversity and equal opportunity 2016 405-1 Diversity of governance bodies and employees PPC/45 GRI 407 Freedom of association and collective bargaining 2016 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk CGR/55 Barco Integrated report 2020 7 GRI Content index GRI GRI CONTENT INDEX Barco Integrated report 2020 8 GRI Content index GRI GRI CONTENT INDEX DISCLOSURE PAGE GRI 412 Human rights assessment 2016 412-2 Employee training on human rights policies or procedures PPC/59 412-3 Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening PPC/63 GRI 413 Local communities 2016 413-1 Operations with local community engagement, impact assessments, and development programs PPC/65-67 GRI 414 Supplier social assessment 2016 GRI 416: Customer health and safety 2016 416-1 Assessment of the health and safety impacts of product and service categories PPC/53 GRI 418: Customer privacy 2016 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data PPC/57 2020 Integrated annual report ENABLING BRIGHT OUTCOMESbarco.com Glossary Glossary Financial Terms, Alternative Performance Measures (APM) and Non-financial KPI's Unit of measure Definition % of key+ and core suppliers who received sustainability score in Supplier Performance Review % Key+ and core suppliers who received a sustainability score in the Supplier Performance Review / total key+ and core suppliers who received a Supplier Performance Review. % ecoscored products of total new products released % Number of newly introduced hardware products that have received a Barco ecoscore/total number of newly introduced hardware products. Definition "hardware product": Barco branded finished electronic hardware product, either designed inhouse or outsourced to OEM suppliers, that can deliver standalone its intended function. Definition "newly introduced hardware product": commercial launch of first member of product family covered by one dedicated hardware development project. Options or modules are not in scope of the definition. Definition "commercial launch": projects for which Formal Quality Review (FQR) is granted and or is available on Barco.com. The Barco ECO label is granted to products that have received an ecoscore of A, A+ or A++. The ecoscoring methodology, which is validated against the ISO 14021 standard, is explained on our website https://www.barco.com/en/page/sustainability/ecoscore. % electricity from renewable sources % Electricity consumption from renewable sources/total electricity consumption of the considered Barco sites. Renewable electricity is either achieved by own production using a renewable source (e.g. PV panels) or by having renewable electricity contracts (e.g. Guarantees of Origin, RECs). Renewable energy sources are sources which have zero direct CO2e-emissions (e.g. solar power, wind turbines). % employees < 30 yrs % Number of personnel with age < 30 years/total number of personnel at year-end. % employees > 30 yrs < 50 yrs % Number of personnel with age >=30 years and =<50 years/total number of personnel at year-end. % employees > 50 yrs % Number of personnel with age > 50 years/total number of personnel at year-end. % employees covered by formal collective agreements % Barco applies an active formal collective agreements policy in these countries and industries where collective agreements are mandatory, relevant or customary. For the scope of this definition, we take into consideration the number of employees captured by collective agreement for these sites and regions where a formal collective agreements policy is applicable. In Belgium where the company has its headquarter as well as its main manufacturing site, Barco applies interprofessional, industry as well as company-specific formal collective agreements. In the rest of the EMEA region as well as the Latin American region Barco applies interprofessional and industry collective agreements. In other regions such as APAC-re- gion; where collective agreements are less common, the company is typically subject of regulatory requirements in this domain. In addition to the regulatory framework the respective topics are typically captured in local policies and employee handbooks. % employees trained in Standards@Work % Total white-collar employees trained in Standards@Work /total number of white-collar personnel at year-end (averaged over all modules). % energy consumption from renewable sources % Energy consumption from renewable sources/total energy consumption at the considered Barco sites. Renewable energy sources are sources which have zero direct CO2e-emissions (e.g. solar power, wind turbines). % hazardous waste of solid waste % Tonnes hazardous waste/ total tonnes of solid waste generated at the considered Barco sites. Note that the classification of "hazardous" is dependant on the legal framework of the country considered. % in-scope suppliers that responded to Conflict Minerals Reporting Template % Number of in-scope suppliers that responded to Conflict Minerals Reporting Template (CMRT)/Total number of in-scope suppliers. In-scope suppliers are suppliers that deliver products or components containing tungsten, tantalum, tin or gold. The CMRT is provided by the Responsible Minerals Initiative (RMI). % make (over hardware revenues) % Product revenue (excl services) of materials inhouse manufactured / total product revenue (excl services). % of employees in R&D % Total number of personnel included in R&D expenses/ total number of personnel at year-end. Barco Integrated report 2020 2 Glossary GLO GLOSSARY Financial Terms, Alternative Performance Measures (APM) and Non-financial KPI's Unit of measure Explanation % of active components covered by Full Material Declarations % Number of active components that are coverd by FMD-A or FMD-B material declarations/total number of active components. % of countries where products are sold with Barco dedicated return and recycling programs % Number of countries to which products were shipped where specific structural extended producer responsibility measures have been implemented like take back and WEEE reporting / total number of countries to which products were shipped. % of employees having received training % Number of employees who had followed a training course within the year/ total number of personnel at year end. % of employees in long-term sick leave (>1 yr) % Number of personnel on long term sick leave (> 1 year)/total number of personnel at year-end. % of iGemba improvement suggestions implemented % Implemented suggestions/total improvement suggestions. iGemba is the name of Barco's continuous improvement system. An improvement suggestion is an idea, improvement, solution, ... that is registered by an operator on an iGemba improvement card. % of key(+) and core suppliers who signed declaration of compliance with RBA Code of Conduct (Responsible Business Alliance) % Number of key/key+/core component suppliers that have commited formally to the RBA code of conduct or equivalent. % of key+ and core suppliers with sustainability score higher than 80% % Key+ and core suppliers who received a sustainability score of >80% in the Supplier Performance Review / total key+ and core suppliers who were scored on sustainability. % of leaders in Annual Talent Development Review % Number of leaders in annual talent development review/total number of leaders. Leaders are employees with direct reports. A talent development review maps the individual’s sustained contribution and behavior and his/her potential and identifies actions needed with regards to development, career paths and internal moves. % of new products released with Barco ECO label (hardware) % Number of newly introduced hardware products that have received the Barco ECO label/total number of newly introduced hardware products. Definition "hardware product": Barco branded finished electronic hardware product, either designed inhouse or outsourced to OEM suppliers, that can deliver standalone its intended function. Definition "newly introduced hardware product": commercial launch of first member of product family covered by one dedicated hardware development project. Options or modules are not in scope of the definition. Definition "commercial launch": projects for which Formal Quality Review (FQR) is granted and or is available on Barco.com. The ecoscoring methodology, which is validated against the ISO 14021 standard, is explained on our website https://www.barco.com/en/page/sustainability/ecoscore. % of new products released with recycled plastics (hardware) % Number of newly introduced hardware products containing recycled plastics/total number of newly introduced hardware products. Definition "hardware product": Barco branded finished electronic hardware product, either designed inhouse or outsourced to OEM suppliers, that can deliver standalone its intended function. Definition "newly introduced hardware product": commercial launch of first member of product family covered by one dedicated hardware development project. Options or modules are not in scope of the definition. Definition "commercial launch": projects for which Formal Quality Review (FQR) is granted and or is available on Barco.com. Definition "containing recycled plastics": product containing a minimum mass percentage recycled content in plastic parts larger than 25 grams. The minimum mass percentage is defined in the applied Barco ecoscore tool version. % of procurement employees trained in sustainable procurement # Number of employees within the worldwide functional domain of procurement (Function-Subfunction=PRO- ) who completed the training 'Sustainable Procurement' / total number of employees within the worldwide procurement team. % revenues from products with Barco ECO label (hardware) % Revenues from hardware products that received the Barco ECO label/ total hardware product revenues. Definition ""hardware product"": Barco branded finished electronic hardware product either designed inhouse or outsourced to OEM suppliers, that can deliver standalone its intended function. The Barco ECO label is granted to products that have received an ecoscore of A, A+ or A++. The ecoscoring methodology, which is validated against the ISO 14021 standard, is explained on our website https://www.barco.com/en/page/sustainability/ecoscore. % waste to landfill % Tonnes of waste sent to landfill/total tonnes of solid waste generated at the considered Barco sites. Barco Integrated report 2020 3 Glossary GLO GLOSSARY Financial Terms, Alternative Performance Measures (APM) and Non-financial KPI's Unit of measure Explanation % women Barco overall % Number of female personnel/total number of personnel at year-end. % women in senior management % Number of female personnel with hay grade >= 18/total number of personnel with hay grade >= 18 at year-end. Adjusted EBIT EBIT excluding restructuring costs and impairments relating to reorienting or stopping certain activities, business or product lines, as well as impairments on goodwill and revenues resulting from a single material transaction not linked to current business activities (e.g. change of control in a subsidiary). Results out of divestments or acquisitions are included in EBIT(DA). Reconciliation from EBIT to adjusted EBIT can be found in the income statement. Adjusted return on operating capital employed (ROCE) Adjusted EBIT after tax relative to operating capital employed (including goodwill). ROCE = (Adjusted) EBIT(1- tax rate)/Operating capital employed (including goodwill). Associates Companies in which Barco has a significant influence, generally reflected by an interest of at least 20%. Associates are accounted for using the equity method. Average training hours per employee # hours Total hours or learning /total number of personnel at year end. Average training investment per employee € Total 'out of pocket' expenses for learning & development / total number of personnel at year end. BarcoCFG Full name is CFG Barco (Beijing) Electronics Co., Ltd. BarcoCFG is the entity where Barco joined forces with China Film Group to address the Chinese cinema market. Barco holds a 49% stake in this entity at the end of December 2020. Book value per share Equity attributable to the Group divided by number of shares outstanding at balance sheet date. Capital ratio Equity relative to total assets. Community investment € The expenses related to charity projects, in €. It does not include in-kind donations. Community involvement # heads The number of Barco volunteers who participated in charity projects. Customer Net Promotor Score (relationship NPS) # Calculation of the Net Promotor Score is based on the answer of customers to the question: "On a scale from 0-10, how likely are you to recommend Barco to a friend or colleague?" Detractors score 0-6, passives score 7-8, promotors score 9-10. Calculation of NPS result = % promotors - % detractors. Direct available net cash Net financial cash excluding the cash in Cinionic. Dividend yield Gross dividend as a percentage of the share price on 31 December. DPO Days payable outstanding calculated as Trade Payables / (Material cost + Services and other costs) x 365 DSO Days sales outstanding calculated as ((Trade debtors / (sales past quarter)) * 90 Earnings per share (€) € Net income/(loss) attributable to the equity holder of the parent divided by weighted average of shares Barco Integrated report 2020 4 Glossary GLO GLOSSARY Financial Terms, Alternative Performance Measures (APM) and Non-financial KPI's Unit of measure Explanation EBIT Operating result (earnings before interest and taxes), calculated as gross profit less research & development expenses, sales and marketing expenses, general and administration expenses, other operating income (expense) - net and plus or minus adjusting items. EBITDA Adjusted EBIT + depreciation, amortization and impairments (if any). EBITDA margin % EBITDA as percentage of sales. EMEA Europe, Middle-East and Africa. Employees per functional group % Personnel at year-end (in heads) per functional group (9 functional groups). Employees per region % Personnel at year-end (in heads) per region (3 regions). Energy eciency index of sold products (#) # The energy eciency index of our products is calculated by taking into account the energy consumption/delivered capability of the most important product groups in terms of energy consumption: projectors & LED products in the Entertainmaint division and large video walls from the Enterprise division. The energy performance of these product groups is calculated and formulated as Watt/delivered capability. Within the Entertainment division the average energy use/delivered capability is weighted on revenues from the considered product groups (i.e. projectors & LED since 2018). Within each division the energy performance is normalised versus the 2015 baseline value (which has the default value 1,0). The final energy eciency index is then calculated by weighing the average of the Entertainment division's and the Enterprise division's normalized energy performance. The weighing is done on revenues per division. Equity method Method of accounting whereby an investment (in an associate) is initially recognized at cost and subsequently adjusted for any changes in the investor’s share of the associate’s net assets (i.e. equity). The income statement reflects the investor’s share in the net result of the investee. Free cash flow Gross operating cash flow excluding share options recognized as cost + change in net working capital + Interest (expense)/income + income taxes + purchase of tangible and intangible fixed assets + proceeds on disposals of tangible and intangible fixed assets. Greenhouse gas emissions infrastructure Tonnes CO2 e / mio € revenues Total Greenhouse gas emissions of the considered Barco sites covering own operations emissions from infrastructure in tonnes of CO2e per turnover (mio € revenues). Infrastructure covers total emissions from infrastructure energy, refrigerant losses and waste generated at the facilities. All Kyoto & Non-Kyoto greenhouse gases are accounted for and converted to CO2-equivalents. Greenhouse gas emissions logistics Tonnes CO2 e / mio € revenues Total Greenhouse gas emissions of the considered Barco sites covering own operations emissions from logistics in tonnes of CO2e per turnover (mio € revenues). Logistics covers all emissions from transport of goods (in- & outbound) paid for by Barco. All Kyoto & Non-Kyoto greenhouse gases are accounted for and converted to CO2-equivalents. Greenhouse gas emissions mobility Tonnes CO2 e / mio € revenues Total Greenhouse gas emissions of the considered Barco sites covering own operations emissions from mobility in tonnes of CO2e per turnover (mio € revenues). Mobility covers owned/leased fleet emissions, commuting and business travel emissions. All Kyoto & Non-Kyoto greenhouse gases are accounted for and converted to CO2-equivalents. Barco Integrated report 2020 5 Glossary GLO GLOSSARY Financial Terms, Alternative Performance Measures (APM) and Non-financial KPI's Unit of measure Explanation Greenhouse gas emissions of our own operations Tonnes CO2 e / mio € revenues Total Greenhouse gas emissions of the considered Barco sites covering own operations emissions from infrastructure, mobility and logistics in tonnes of CO2e per turnover (mio € revenues). Infrastructure covers total energy emissions from infrastructure energy, refrigerant losses and waste generated at the facilities; mobility covers owned/leased fleet emissions, commuting and business travel emissions; Logistics covers all emissions from transport of goods (in- & outbound) paid for by Barco. All Kyoto & Non-Kyoto greenhouse gases are accounted for and converted to CO2-equivalents. Greenhouse gas emissions of sold products (product use emissions) Tonnes CO2 e / mio € revenues Total Greenhouse Gas emissions of the considered Barco sold products in tonnes of CO2e per turnover (mio € revenues). All Kyoto & Non-Kyoto greenhouse gases are accounted for and converted to CO2-equivalents. Greenhouse gas emissions scope 1 Tonnes CO2 e / mio € revenues Total Greenhouse gas emissions of the considered Barco sites covering scope 1 as defined by the Greenhouse Gas Protocol in tonnes of CO2e per turnover (mio € revenues). Scope 1 covers the direct emissions from combustion of fossil fuels on site and by company vehicles and emissions from refrigerant losses. All Kyoto & Non-Kyoto greenhouse gases are accounted for and converted to CO2-equivalents. Greenhouse gas emissions scope 2 Tonnes CO2 e / mio € revenues Total Greenhouse gas emissions of the considered Barco sites covering scope 2 as defined by the Greenhouse Gas Protocol in tonnes of CO2e per turnover (mio € revenues). Scope 2 covers the direct emissions from purchased electricity or district heating. Note that the market based approach is used here. All Kyoto & Non-Kyoto greenhouse gases are accounted for and converted to CO2-equivalents. Greenhouse gas emissions scope 3 incl. product use emissions Tonnes CO2 e / mio € revenues Total Greenhouse gas emissions of the considered Barco sites and Barco sold products covering scope 3 as defined by the Greenhouse Gas Protocol in tonnes of CO2e per turnover (mio € revenues). Scope 3 covers the direct emissions from waste generated on site, home-work commuting, business travel, logistics operations and product use emissions. All Kyoto & Non-Kyoto greenhouse gases are accounted for and converted to CO2-equivalents. Indirect costs/expenses Research & development expenses, sales and marketing expenses and general and administration expenses; including depreciations and amortizations. Indirect expenses (internally – OPEX%) % (Research & development expenses, sales and marketing expenses and general and administration expenses; including depreciations and amortizations) as percentage of sales. Innovation awards # Awards are registered throughout the year via publications on the newsroom site and / or press releases. Some awards are noted on the product page of the specific product. Internal mobility (% of vacancies filled internally) % Number of internally recruited filled in vacancies/total number of vacancies filled. Inventory turns # Inventory turns = 12 / [Inventory / (average monthly sales last 12 months x material cost of goods sold %)]. Lost Time Injury Frequency rate # Number of lost-time injuries multiplied with 1,000,000 and divided by total hours worked by all employees. Lost-time injuries are accidents that result in at least one lost day of work. When recording lost-time injuries, we use applicable national definitions for incidents as work-related. Lost Time Injury Severity rate # Number of lost days of work of all employees multiplied with 1,000 and divided by total hours worked by all employees. Net financial cash/(debt) Short term investments + Cash and cash equivalents + long-term financial receivables - long-term debts - current portion of long-term debts - short-term debts. New product releases (FQRs - hardware) # Commercial launch of the first member of a product family covered by one dedicated hardware development project. Options or modules are not in scope of the definition. Definition "commercial launch": projects for which Formal Quality Review (FQR) is granted and or is available on Barco.com Barco Integrated report 2020 6 Glossary GLO GLOSSARY Financial Terms, Alternative Performance Measures (APM) and Non-financial KPI's Unit of measure Explanation New software releases (MRDs) # Commercial launch of a software product. Definition "commercial launch": projects for which Formal Quality Review (FQR) or Market Review Decision (MRD) is granted. Non-recurring tax items Eect of change in expected tax rate on deferred taxes + innovation income deduction (IID) + tax adjustments related to prior periods + capital loss carried back/gain on sold share deal entities. Nth party risk An order of magnitude broader than the traditional third-party risk. Every party that a company utilizes is likely to have a large number of other parties of its own. This becomes a chain of downstream relationships with fourth, fifth parties, and Nth parties, introducing a new risk factor to the ecosystem. Number of certified dealers/partners # Number of SAP accounts for which one or more employees have followed a Barco University certified training course. Definition "Partner": Barco recognized account through which we place products into the market ; Definition "Certified": can be based on a test at the end or throughout the instructer-lead training course or as having completed an E-learning on a particular (range of) product(s) in full. Number of employees (FTEs) # FTEs Number of personnel at year-end, in fulltime equivalents. Number of employees (heads) # heads Number of personnel at year-end, in heads Number of iGemba improvement suggestions # Total number of iGemba improvement suggestions received in the considered year. iGemba is the name of Barco's continuous improvement system. An improvement suggestions is an idea, improvement, solution, ... that is registered by an operator on an iGemba improvement card. Number of iGemba improvement suggestions per operator # Total number of iGemba improvement suggestions received in the considered year/total number of operators. iGemba is the name of Barco's continuous improvement system. An improvement suggestions is an idea, improvement, solution, ... that is registered by an operator on an iGemba improvement card. An operator is a blue-collar employee. Number of key(+) & core suppliers (covering X% of material cost) # Number of key, key+ and core suppliers registered in Barco. Total material cost equals the total direct spend. Dierentiations between key/Key+ and core is done based upon annual spend and technological/quality importance to Barco. Number of new (external) hires # heads Number of externally recruited filled in vacancies. Number of new patent filings # New patent applications filed in the indicated year. Number of patents at year-end # Total number of granted patents at year-end (of the indicated year). Number of product lines in scope of ISO 27001 # Product lines are products found on the public Barco.com website. Number of supplier quality audits # Number of supplier quality audits performed during reporting year. Operating capital employed (including goodwill) Operating capital employed + goodwill. Operating capital employed (OCE) Working capital + other long term assets and liabilities Operating expenses (OPEX) Research & development expenses, sales and marketing expenses and general and administration expenses; excluding depreciations and amortizations Barco Integrated report 2020 7 Glossary GLO GLOSSARY Financial Terms, Alternative Performance Measures (APM) and Non-financial KPI's Unit of measure Explanation Order An order can only be recognized if a valid purchase order has been received from the invoice-to customer. An order is only valid if it is: - In writing. This includes electronic version of the purchase order out of the customer’s ERP system. - The contract needs to be signed by an authorized person from the business partner. Next to this, a minimum number of fields need to be mentioned on the order like customer name, address, reference to sales quotation or business partner sales agreement of Barco, etc. Orderbook Orderbook are previously received orders, which still fulfill all the conditions of an order, but are not deliverd yet and hence not taken in revenue. Other long term assets and liabilities Other long term assets & liabilities include the sum of other intangible assets, land and buildings, other tangible assets, deferred tax assets (net). We refer to note 9 and 10 for the amounts. Other working capital Other working capital includes the net of other non-current assets, other amounts receivable, prepaid expenses and accrued income and other long term liabilities, advances received from customers, tax payables, employee benefits liabilities, other current liabilities, accrued charges and deferred income and provisions; See remark on the 2018 other working capital in definition of 'Return on operating capital employed (ROCE)'. R&D spend (in % of sales) % R&D spend in percentage of sales. Recycling & composting rate of solid waste (%) % Tonnes recycled or composted waste/ total tonnes of solid waste generated at the considered Barco sites. Regional spread of key(+) & core suppliers (% spend of material cost) % % Spend of material cost per region (in SAP) Renewable electricity production MWh/mio € revenues Renewable electricity generated at the considered Barco sites (e.g. PV panels) in MWh per turnover (mio € revenues). Return on operating capital employed (ROCE) Adjusted EBIT after tax relative to operating capital employed (including goodwill). ROCE = EBIT(1- eective tax rate)/Operating capital employed (including goodwill). In the 2018 calculation of return on operating capital employed, the other working capital doesn't include the other current liabilities related to the contribution of the three minority shareholders in the capital of BarcoCineAppo Limited Hong Kong. ROCE % Return on operating capital employed. EBIT after tax relative to operating capital employed (including goodwill). ROCE = EBIT(1- eective tax rate)/Operating capital employed (including goodwill). In the 2018 calculation of return on operating capital employed, the other working capital doesn't include the other current liabilities related to the contribution of the three minority shareholders in the capital of BarcoCine Appo Limited Hong Kong. Sales per region (growth) mio € Sales per region. Split of shares per July20 At Barco’s Extraordinary General Shareholder’s Meeting, of 30 April 2020, the shareholders have approved the share split by a factor seven (7), eective as of 1 July 2020. The purpose of the share split is to enhance accessibility and to improve the liquidity of the Barco share. As a result of this share split, Barco’s total capital shall be represented by 91,487,438 shares as from 1 July 2020. Each of these shares confers one voting right at the General Meeting. The new split shares (please note: new ISIN code BE0974362940) are traded on the Euronext Brussels regulated market from 1 July 2020 onwards. Therefore, the earnings and diluted earnings per share as of 31 December 2019 and 2018 are for comparison reasons recalculated for the new number of shares. Subsidiaries Companies in which Barco exercises control. Barco Integrated report 2020 8 Glossary GLO GLOSSARY Financial Terms, Alternative Performance Measures (APM) and Non-financial KPI's Unit of measure Explanation TFA Tangible fixed assets. Theoretical tax rate The theoretical tax rate is the corporate tax rate applied in the country of origin of the parent legal entity (i.e. Belgium). The Belgian corporate tax rate as of 2020 is 25% (2019 & 2018: 29.58%). Total energy consumption MWh/mio € revenues Total energy consumption (MWh) per turnover (mio € revenues) of the considered Barco sites, covering both infrastructure energy consumption and owned/leased fleet energy consumption. Regarding infrastructure energy this covers both fossil fuel consumption (natural gas, fuel), purchased energy (grey or green electricity, district heating) as well as produced renewable electricity (e.g. by means of PV panels). Total greenhouse gas emissions Tonnes CO2 e / mio € revenues Total Greenhouse Gas emissions of the considered Barco sites and Barco sold products for the complete covered scope (own operations emissions + product use emissions) in tonnes of CO2e per turnover (mio € revenues). All Kyoto & Non-Kyoto greenhouse gases are accounted for and converted to CO2-equivalents. Total greenhouse gas emissions Tonnes CO2 e Total Greenhouse Gas emissions of the considered Barco sites and Barco sold products for the complete covered scope (own operations emissions + product use emissions) in tonnes of CO2e. All Kyoto & Non-Kyoto greenhouse gases are accounted for and converted to CO2-equivalents. Total solid waste Tonnes/mio € revenues Total amount of solid waste generated at the considered Barco sites in tonnes of waste per turnover (mio € revenues). Solid waste is all reported waste at the Barco sites in solid state, excluding liquid waste streams such as wastewater. Voluntary turnover rate % Number of voluntary exits/total number of personnel at year-end. Water withdrawal m³/mio € revenues Direct purchased water at the considered Barco sites in m³ per turnover (mio € revenues). Typically this is called "city water", "tap water", "mains water". It excludes water use from other sources (e.g. captured rainfall or groundwater). Working capital (net) Trade debtors + inventory - trade payables - other working capital. Barco Integrated report 2020 9 Glossary GLO GLOSSARY Barco Integrated report 2020 10 Glossary GLO barco.com ENABLING BRIGHT OUTCOMES Group management Beneluxpark 21 BE-8500 Kortrijk Tel.: +32 (0)56 23 32 11 Registered oce President Kennedypark 35 BE-8500 Kortrijk Tel.: +32 (0)56 23 32 11 Stock exchange Euronext Brussels Financial information More information is available from the Group’s Investor Relations Department: Carl Vanden Bussche Vice President Investor Relations Tel.: +32 (0)56 26 23 22 E-mail: [email protected] Copyright © 2021 Barco NV All rights reserved Realization Barco Corporate Marketing & Investor Relations Oce Focus Advertising Barco Beneluxpark 21 8500 Kortrijk – Belgium 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NVBeneluxpark 21, BE-8500 Kortrijk, BelgiumLtd. (NV)BELGIUMPres. Kennedypark 35, BE-8500 Kortrijk, BelgiumKORTRIJK (BELGIUM)TECHNOLOGY COMPANY ACTIVE IN 3 MARKETS: ENTERTAINMENT, ENTERPRISE AND HEALTHCAREBarco NVBarco NVN/A
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