BARCO expects profits for 1999 on the same level as in 1998

Kortrijk, 12 May 1999. At the end of January 1999, when announcing its results for 1998, Barco already stated that growth in 1999 would remain below expectation. The first months of 1999 did indeed continue weak, so that profits in the first half of 1999 will be below the level for the second half of 1998. The loss of market share which Barco Projection Systems suffered as a result of the fire in the projector factory in Kuurne in February 1998 is still affecting the profits for 1999, and particularly those for the first half year.

A number of new developments however, will mean that the results for the second half of the year will be a good deal more positive. For example, in March Barco Projection Systems brought out the new 6300 projector. This projector is compact and easily relocated and has a very high resolution and light output. The DPLTM (Digital Light Processing TM) projector, the result of the collaboration with Texas Instruments, is to be launched on the market in the course of the third quarter of 1999. The consequences of the crisis in the textile machines market are still making themselves felt in 1999. In June, Barco Automation will present a number of new products at ITMA, the major textiles trade show. Barco Communication Systems Denmark has also brought out a number of new products which are being very well received by the market.

Barco expects to achieve 15% growth again for the year 2000.

The new projectors from Barco Projection Systems, the 6300 polysilicon projector and the DLP™ projector with Texas Instruments technology were very well received by the market. Production of the 6300 started up in March 1999. This robust but lightweight projector is compact and therefore easy to relocate, and it has a very high resolution and light output. The 6300 projector is especially designed for use in the presentations market and for the rental market. The DLP™ projector, based on the Digital Light Processing™ technology of Texas Instruments, was presented at the NAB tradeshow in Las Vegas last month. It will go into production in the course of the third quarter of 1999. This high brightness projector with extremely high image quality is intended for large screen projection, and supplements Barco's range of CRT and LCD projectors. The DLP™ projector from Barco is a top class projector which achieves up to 25% more light output than other projectors using similar technology. This makes the Barco DLP™ projector extremely suitable for electronic cinema and for major events, as it allows images to be projected onto a screen of up to 169m². The niche markets Barco Projection Systems is targeting are in the upper segments of the projection world. Next to these segments, a new market has arisen in recent years for small portable projectors, which are used for less demanding applications. This is a volume market in which Barco does not desire to be active. After all, the niche markets in which Barco has placed itself are continuing to grow, not just in volume but also in variety of applications. Barco's market share in a number of its niche markets fell off as a result of the fire, but with the introduction of the 6300 and the DLP™ projector Barco expects to recover its market share. The favorable effect which can be expected from the sales of these two projectors will have a positive influence on profits for the second half year in particular. And new product announcements are also planned for the second half of the year.

The consequences of the crisis in the textile machines sector are still making themselves felt in 1999. The ITMA show, the world's most important textiles machines tradeshow, takes place in Paris from 1 to 10 June. This tradeshow, which is held every four years, is attended by all the companies which supply capital goods to the textiles sector. Barco will present a number of new products there, including the CYCLOPS (on-loom inspection), the EYEOPENER (real-time shade detection system) and the ABS sensor and SLIVERWATCH (detection of foreign fibers on spinning machines). These are new products which will produce new customers and new sales. Orders resulting from the ITMA show may have a positive influence on fourth-quarter sales.

As for Barco Communication Systems Denmark, formerly RE, the measures taken in 1998 in the areas of cost savings and product development are progressively achieving their effect. The acceptance of the new products on the market is very good, resulting in a growing order book. Although the results for the first half of 1999 will only come out around the break-even point, it is expected that a profit will be made over the whole of 1999.

The problem which underlay the poor results which the former Gerber Systems produced in 1998, the unavailability of thermal plates for certain computer to plate machines, is gradually being resolved. The expectation is that sales will grow considerably from the second half of 1999.

In the meantime, an agreement has also been reached with the insurance company on the trading loss arising from the fire in the Kuurne projector factory on 18 February 1998. A total payment of BEF 1.6 billion was granted in respect of the trading loss. BEF 1.2 billion had already been included in the results for 1998. The insurance covered the trading loss until 17 February 1999, so that BEF 400 million will be included in the results for 1999.

Barco expects appreciably better results for the second half of 1999 than for the first half, so that the 1998 profit may be equaled over the whole of 1999. Barco expects to achieve 15% growth again for the year 2000.



The Barco Group has six strategic activities: Barco Graphics, Barco Projection Systems, Barco Display Systems, Barco Communication Systems, Barco Automation and Barco Machine Vision. These 6 pillars show a turnover of 26 billion Belgian francs (655 million Euro). Over 90% of this turnover is realized outside Belgium. The Barco Group has a network of subsidiaries, distributors and agents in 97 countries worldwide. Since 1986, Barco has been quoted on the Brussels Stock Exchange and is part of the BEL20. Further information on Barco can be found on the Website: http://www.barco.com.

 

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