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Say.Do.Barco Company Report 2017
Say.Do.Care.Barco Sustainability Report 2017
Say.Do.Perform.Financial Statements 2017
Section B.Non Financial Information
Sustainability Report2017
Section C.Financial Statements
2017
Section A.Company Report
2017
Table of contents
Letter from the CEO A/4
Key figures A/8
Financial highlights A/10
Our company A/12
Our activities A/18
Our strategy A/34
This is section A of Barco’s 2017 annual report.Other sections are available via the download center at ar.barco.com/2017.
Governance A/52
Risk management and control processes A/80
Management discussion A/90
Shareholder information A/104
At Barco, we strive to combine our zeal for innovation with
a strong focus on execution and a clear commitment to
outcome-based solutions That is the new DNA we are
now embracing
The cornerstone of this ambition is to instill a say-do
mentality in our company culture; inspiring our people to
‘do what they say’ and ‘say what they do’
We aim to make this continual focus on transparency,
problem-solving and execution a key element of our col-
laboration, and of our growth as a company
This will complement the Barco DNA with a powerful
capability to translate innovative ideas into bright outcomes
for every Barco stakeholder
Say.Do.
Letterfrom the CEO
Dear customers, business partners,
employees and shareholders,
We introduced and started to execute our renewed strategy,
which includes an increased focus on our performance The
new strategy will help us keep pace with the market and
changing customer needs As we advanced on that strategy,
we achieved consistent results: a +20% EBITDA increase and
an EBITDA margin growth of 1 9 percentage points on flat
organic sales At the same time, we launched new exciting
solutions in our core markets
Let me share some highlights with you in this letter; you can
find the details further on in this report
A/4 Barco annual report 2017
2017: building our capabilities
Strengthened global leadership team
In 2017, we further strengthened our leadership team
With new, experienced members, the team became more
global and diversified By blending the insights that the new
members bring with the strong potential and competences
available at Barco, we created a new dynamism – which is
essential for us to drive our business forward
From entitlement to empowerment
To get a clear view of our identity, our market position and
the strategic initiatives needed to boost value in our markets,
we launched an active dialogue on Barco’s entitlement in
2017 The result is a new ambition statement – ‘enabling
bright outcomes’ – and a revamped strategy
Stepping up our focus on execution: "Say.Do."
One of the key vectors in our revamped strategy is a focus
on performance As we advanced into 2017, we saw the first
positive results of this quest: Barco is becoming a more effec-
tive, leaner, more agile company That helps us to remain
competitive in and stay ahead of changing markets, while
delivering healthy returns on our shareholders’ investments
To ensure that we achieve our objectives, we continuously
strive to narrow the ‘say – do’ gap, turning PowerPoint ‘plans’
into executed ‘proofpoints’
2017: Stakeholder outcomes
Improving margins, solid cash performance
Our focus on performance resulted in measurable impacts on
our financial results, with EBITDA growing by more than 20%
This is a solid first step towards sustained profitable growth
Our ambition is to further amplify our efforts to improve
the margin year after year, while reducing the dependency
of profit growth on topline growth In addition to improving
our profitability performance, we generated solid free cash
flow results in 2017
To achieve these, we did have to make choices across the
organization, including divesting our lighting business and
redeploying investments from non-priority to core strategic
business opportunities While sometimes difficult, these deci-
sions were a must to ensure a healthier basis for continued
organic growth
Our strengthened leadership team
creates the dynamism needed to drive
our business forward
A/5Barco annual report 2017Letter of the CEO
Innovation delivered
Of course, we retained the zeal for innovation so typical of
Barco 2017 saw the introduction of a series of exciting new
products – all developed with the aim to enable bright out-
comes Our Entertainment division, for example, launched
the unbelievable UDX projector and added new projec-
tors to the F-range In Enterprise, we added new models
to our popular ClickShare range and launched UniSeeTM –
a new-generation LCD video wall that raises the bar in many
different fields In Healthcare, we expanded our range of
productivity tools for radiologists and we are working on
the next generation of our Nexxis operating room solution
New collaboration models
Innovation at Barco, however, is also about exploring new
business and collaboration models: we team up with experts,
academic institutions, research centers, and ecosystem part-
ners to better understand the market and co-create solutions
In addition, we increasingly communicate with customers to
gauge their needs and strive to strengthen our bonds with
our business partners
2018: Executing our strategy
Strong foundations in place
We are striding into 2018 with confidence We’ve taken
some important steps forward in 2017, and Barco has every
resource that it needs to create superior value for its custom-
ers, shareholders and employees All of our businesses are
leaders in their industries, where they deliver mission-critical
solutions The strategy update that we disclosed in 2017 will
help us stay on track in today’s rapidly changing markets
Blending innovation with performance
As a technology leader, we will keep our focus on innovation
More than 10% of our revenue will be reinvested in R&D As
I mentioned earlier, we will also be innovating business and
collaboration models We will continue to redefine the Gold
Standard in every market where we operate, in order to fulfill
the brand promise that Barco stands for At the same time,
we will strengthen our focus on execution through value
engineering, driving commercial excellence and investing
in local capabilities in emerging markets
The strategy update that we disclosed
in 2017 will help us stay on track in
today’s rapidly changing markets
A/6 Barco annual report 2017
Achieving superior customer outcomes
Last but not least, we are advancing our capabilities to
achieve superior customer outcomes, by combining hard-
ware, software and services Across every Barco business, we
try to fully understand customer needs and explore new busi-
ness models to learn how we can deliver and capture value
throughout the solution lifecycle The New Cinema Joint
Venture that we announced in late 2017 is sure to become
a key proof point in this exercise It will foster the delivery of
cinema hardware, software and services
Sustainable impact: we care!
Barco is convinced that sustainable business is the only way
forward, as it offers value to every possible stakeholder That
is why we have fully integrated sustainability into our strategy
Sustainability is, of course, a continuous journey of learning
and improving, yet 2017 was a pivotal year: we accelerated
progress on our carbon footprint projects and put solid foun-
dations in place to achieve meaningful objectives for our
Planet, People and Communities
Thank you!
In closing, let me highlight how honored I am to lead this
company, which has an extraordinary heritage and promis-
ing future In 2017, we made progress on many fronts We
couldn’t have done it without the continued dedication and
creative engagement of all our Barco people around the
world In addition, our Board of Directors, our clients and our
shareholders have all embraced our new strategy
Thank you all very much for your commitment and support
I look forward to enabling bright outcomes for the entire
Barco ecosystem, together with all of you
Jan De Witte
CEOWe will combine our passion
for innovation with a focus on
performance and a quest for delivering
superior customer outcomes
A/7Barco annual report 2017Letter of the CEO
7.2%
8.0%
9.9%
20
151.
45
20
160
.91
20
172
.01
20
1574
.1
20
168
8.0
20
1710
7.1
Key figures
Sales(in millions of euro)
Ebitda(in millions of euro) *
Earnings per share(in euro)
% of sales
(*) See 'Comments on the results'
20
161,
102
20
171,
08
5
20
151,
02
9
100
200
300
400
500
600
700
800
900
1,000
1,100
10
20
30
40
50
60
70
80
90
100 2
1
A/8 Barco annual report 2017
20
159
4.4
20
151.
75
20
1675
.4
20
161.
9
20
176
7.7
20
172
.10
131%
225%
111%
Dividend EmployeesNumber of full-time equivalents (FTEs)
Excluding temporary workforce
Pay-out ratio
Carbon footprintEfficiency Barco operations
(tCO2e /mio €)
20
153
,36
1
20
163
,524
20
173
,59
0
2
1
3,000
90
100
80
70
60
50
40
30
20
10
3,500
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2,000
1,500
1,000
500
A/9Barco annual report 2017Key figures
Financial highlights
IN MILLIONS OF EURO 2017 2016 2015
Income statement
Orders 1,105.2 1,081.2 1,043.7
Orderbook 318.8 320.8 333.2
Sales 1,084.7 1,102.3 1,028.9
Gross profit 404.2 378.8 337.8
Gross profit margin 37.3% 34.4% 32.8%
EBITDA 107.1 88.0 74.1
EBITDA margin 9.9% 8.0% 7.2%
Adjusted EBIT 73.2 36.6 1.7
Adjusted EBIT margin 6.8% 3.3% 0.2%
Net income attributable to the equity holder of the parent 24.8 11.0 17.5
Net income margin 2.3% 1.0% 1.7%
EPS (in euro) 2.01 0.91 1.45
Balance sheet & Cash flow
Equity 593.5 615.5 611.7
Balance sheet total 1.065.0 1.159.2 1.140.3
Free cash flow 40.0 57.4 110.3
Net financial cash/(debt) 210.7 286.6 265.1
Operating capital employed 202.4 203.6 220.6
Net working capital -41,6 -56.4 -21.0
IN THOUSANDS OF EURO 2017 2016 2015
Ratios
DSO 55 55 58
Inventory turns 3.6 3.6 3.6
DPO 58 63 69
ROCE (a) 19% 15% 11%
(a) ROCE, excluding impact of amortizations related to capitalized product development costs
(b) Gross dividend / share price at year-end closing date
(c) Increase or decrease share price + gross dividend paid out in the year, divided by closing
share price of previous year
(d) Gross dividend*number of shares on 31 December / net income attributable to the equity holder of the parent
(e) Share price 31 December / earnings per share
A/10 Barco annual report 2017
IN MILLIONS OF EURO 2017 2016 2015 2014
Planet *
Carbon footprint efficiency Barco operations (tCO2 /mio €)** 67.7 75.4 94.4
Carbon footprint efficiency Barco products (tCO2 /mio €)*** 726.5 727.1
People
Employees (FTE) on 31 December 3,590 3,524 3,361 3,245
Employee engagement (employee NPS score) 17
Diversity: Gender equality (% women) 28.4% 28.2% 28% 28.8%
Average hours of learning & development/employee 14.7 17.2 20.7 19.5
Communities
Customer loyalty index 83 87
Supplier compliance with RBA (EICC) Code of Conduct 100% core 100% core 100% core 100% core
Community investment (financial support in community engagement) € 125,000
Community involvement (# employees) +600
IN THOUSANDS OF EURO 2017 2016 2015
Share data
Gross dividend 2.10 1.90 1.75
Gross dividend yield (b) 2.4% 2.4% 2.8%
Yearly return (c) 13.9% 33.0% 8.5%
Pay-out ratio (d) 110.7% 225.1% 130.9%
Price/earnings ratio (e) 44.4 88.0 42.5
Share price (in euro)
Average closing price 86.90 65.90 58.37
Closing price on 31 December 89.25 80.04 61.60
Average number of shares traded daily 16,862 21,921 22,189
Stock market capitalization on 31 December (in millions) 1,166.0 1,045.1 801.6
Number of shares on 31 December (in thousands) 13,064 13,057 13,016
* The reporting period for carbon figures in this report is 2016
** Scope 1,2,3 emissions (excl end-user emissions)
** Scope 3 emissions (end-user emissions)
Extra-financial highlights
A/11Barco annual report 2017Key figures
Number of employees*
* Number of full-time equivalents (FTEs) on 31/12/2017
excluding temporary workforce
** EMEA: Europe & Middle East & Africa
Geographical breakdown of employees
Sales per division
3,361 15%2015
3,524 51%
3,590 34%
2016
2017
Entertainment 49%
Enterprise 28%
Healthcare 22%
The Americas 36%
EMEA** 32%
Asia-Pacific 32%
Geographical breakdown of sales
Company profile
Barco designs technology to enable bright outcomes around the world Seeing
beyond the image, we develop visualization and sharing solutions to help you work
together, share insights, and wow audiences Our focus is on three core markets:
Enterprise (from meeting and control rooms to corporate spaces), Healthcare (from
the radiology department to the operating room), and Entertainment (from movie
theaters to live events and attractions)
EMEA**
Asia-Pacific
The Americas
2017 2017
A/14 Barco annual report 2017
Sites
Americas
• Brazil
• Canada
• Colombia
• Mexico
• United States
Asia-Pacific
• Australia
• China
• Hong Kong
• India
• Japan
• Malaysia
• Singapore
• South Korea
• Taiwan
Europe & Middle East
• Belgium
• France
• Germany
• Italy
• Netherlands
• Norway
• Poland
• Russia
• Saudi Arabia
• Spain
• Sweden
• Turkey
• United Arab Emirates
• United Kingdom
R&D and/or manufacturing facilities
• Belgium
• Canada (X2O)
• China
• Germany
• India
• Italy
• South Korea (Advan)
• Norway
• Taiwan (Awind)
• United States
Geographical footprint
A/15Barco annual report 2017Our company
Our technologyFor over 85 years, technological innovation and agility have been the
cornerstones of growth at Barco Yet in today’s fast-paced, pressure-
packed business climate, it may even be more crucial to embrace
innovation than in the early Barco years Building on years of experience
and expertise in imaging, Barco invests generously in R&D in order to fuel
the innovation pipeline and consolidate its market position
Display technology
We meet the highest requirements in visualization and bring
a wide display portfolio to a variety of markets – from high-
resolution medical displays and rear-projection video walls
to tiled LCD and LED solutions
Projection technology
Featuring one-chip or three-chip DLP® technology and
brightness levels of up to 60,000 lumens, in 2D and 3D, our
high-end and mid-segment projector models can be used
for meeting rooms, digital cinema, post-production, virtual
reality, simulation and events
Connectivity platforms
We bring to market a suite of software-enabled systems,
including networking and cloud-based capabilities Result?
All-round connectivity for uninterrupted, shared, and mobile
access to data, anytime, anywhere
Image processing
Our portfolio also includes a full range of image processing
tools, media servers, and controllers Format converters,
matrix and presentation switchers, etc guarantee the perfect
image playback and management
A/16 Barco annual report 2017
Display technology
Projection technology
Image processing
Collaboration technology
A/17Barco annual report 2017Our company
EntertainmentPage A/20
EnterprisePage A/26
HealthcarePage A/30
Our activities
A/18 Barco annual report 2017
Entertainment
Creating moments, enriching lives
Our award-winning UDX 4K large-
venue laser phosphor projectors work
faultlessly for up to 60,000 hours They
help rental companies and AV integra-
tors provide stunning experiences
while saving both time and money
Our SmartCare warranty program for
smart laser cinema projectors guaran-
tees 10 worry-free years of operation
In this way, it provides exhibitors with
absolute peace of mind and low TCO
In 2017, we extended our F series of
4K laser phosphor projectors with the
rugged F70 and silent F80 projectors
Managers of fixed installations are
now sure to find the right projector
to meet their specific needs
10 YEARS
10 YEARS10 F series60,000
Outcomes
A/20 Barco annual report 2017
Whether in cinemas, concert halls or museums;
at theme parks, music festivals or in retail and
advertising: Barco’s entertainment 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 win fans, rather
than audiences Our increasing focus on providing
convenience and services further helps them keep
that fan base and grow their businesses
In 2017, we achieved the milestone
of 100 all-laser cinema multiplexes
installed worldwide By going all-la-
ser – i e combining flagship laser and
smart laser series projectors – exhibi-
tors are sure to realize substantial cost
savings and operational efficiencies
100 300 4K
With an installed base of over 300
screens, our flagship laser series now
is the most widely-deployed premium
large format system in the world
In 2017, we again extended our leading
Event Master™ series – the most com-
prehensive and flexible 4K60p screen
management solution available on the
market today
Highlights
Cinema 63%
Venues & Hospitality 37%
Approximate distribution
based on sales 2017
20162017
A/21Barco annual report 2017Our activities
Wim Buyens has headed our Entertainment division for nine
years On 1 January 2018, he passed on the torch to Nicolas
Vanden Abeele and became CEO of our New Cinema Joint
Venture How was his last year leading our Entertainment
team?
2017 was a tough year for global cinema. Did Barco feel
the heat of trends like on-demand video?
Well, our business in the US was indeed impacted by a fickle
box office which was mainly attributable to a poor film slate
Yet, we retained steady sales in Europe, grew 17% in China,
and sales in India and Latin America were up, too In the
Middle East, our flagship laser projectors did particularly
well With a 50+% capture rate, we managed to retain our
leadership position
Laser projection has become the new normal for cine-
mas. Do you see an equal take-up of flagship laser and
laser phosphor projectors?
Barco now has 16 models of DCI-compliant laser cinema
projectors, each with its own mix of image quality and TCO
benefits That’s unique, and it’s why so many cinemas go
all-Barco laser Cinemas choose our smart laser series for
smaller theaters and the flagship laser projector to provide an
outstanding movie experience in premium theaters
Working hard to remain ahead of the curve
The combination of front-running
hardware and software is our trump
card in the Venues & Hospitality
market
Wim Buyens CEO New Cinema Joint Venture
A/22 Barco annual report 2017
Whatever model they choose, the projector eliminates all
lamp-related hassles and costs throughout the entire multi-
plex, while ensuring excellent image quality
Did the premium cinema experience accelerate further
in 2017?
It definitely did Today’s moviegoers want more than a good
story; they want to be entertained, like they are in a theme
park More than being a supplier of digital cinema projectors,
we want to help our customers meet that need, while being
profitable too That’s no easy feat, hence the idea of the new
joint venture It will enable us to strengthen the bonds with
our customers and help them face the challenges of cinema
today and tomorrow
How about the rest of Barco’s entertainment business?
We’ve laid some excellent foundations for further growth
in 2017 Over the past few years, the entertainment indus-
try – i e music shows and theme parks, but also museums
and corporate events – is always looking for technology
that offers more pixels and higher brightness Our new UDX
projector and the ever-growing F series of single-chip pro-
jectors are up to that job What’s more, our image processing
solutions have leapfrogged those of our competitors That
combination of front-running hardware and software is our
trump card – it helped us turn profitability around in the
venues and hospitality market
So, is the Entertainment business ready to stand on its
own two feet without the cinema business?
I’m sure it is 2018 will be a very different year of course,
but I am confident that the Entertainment division will fare
well And I trust Nicolas to be the perfect person to gear it
toward success
A/23Barco annual report 2017
New Cinema Joint Venture:
Joining forces to create the cinema of the future
Since January 2018, Barco’s cinema-related sales, marketing and
services activities are no longer part of our Entertainment division
They will become part of a dedicated joint venture which we will
establish during 2018 with China Film Group (CFG), Appotronics
and investor group CITICPE Together, we will offer next-generation
products and services to the global cinema market (excluding mainland
China) Barco does, however, retain full ownership of the assets and
capabilities related to product management, R&D and manufacturing,
Meeting the needs of a shifting market
Now that most of the world’s exhibitors have converted
from 35mm to digital projection, it’s time for the cinema
industry to start writing a new chapter We’re entering the
second wave of digitization: exhibitors are looking for ways
to renew their digital equipment, with a focus on improving
its operational efficiency and total cost of ownership At
The partners will fund the joint venture
by contributing a total of USD 100 mil-
lion Once all partners have entered
the joint venture, Barco will own 55%,
Appotronics and CFG will each own
20% and CITICPE will have a 5% share
We intend to sell 9% of our shares
in BarcoCFG, thereby reducing our
stake from 58% to 49% As sales in
the Chinese cinema market begins
to shift to smaller cities, CFG is better
positioned to lead this phase of develop-
ment
Barco currently has an installed base
of over 80,000 projectors, illuminating
more than 50% of screens worldwide
That leads to a huge potential for
upgrades
-9% +80,00055%
the same time, they understand the need to deliver excep-
tional movie experiences The New Cinema Joint Venture
will strengthen us By enriching our expertise, solutions and
experience with that of other experts, we'll be able to win
in the shifting market
A/24 Barco annual report 2017
A winning combination of products,
technology and services
In the New Cinema Joint Venture, we will combine our
visualization and image processing technology with the
best-in-class technology and solutions of experts CFG,
Appotronics and CITICPE Together, we’ll also develop inno-
vative business models to help exhibitors upgrade to new
technology, like flexible financing options, uptime insurance,
operational partnerships, etc
An all-in-one offering
• Barco’s visualization and image processing technology
• Appotronics laser technology and light source retrofit
modules
• China Film Group: premium cinema solutions and
content
• CITICPE’s financial consulting services
• New services
Clients want outcomes, not just specs. The new joint venture will help them
shape the cinema of the future. We have earned our stripes in the market; it's
time for the next step.
Wim BuyensCEO of the cinema joint venture from 01/01/2018
A/25Barco annual report 2017Our activities
of IT decision-makers see presenta-
tion technology problems as a high
or moderate priority Quick and easy
to set up and use, ClickShare helps
overcome technology issues in large
as well as small meeting rooms
of control room operators use more
than 4 screens on the job With
OpSpace, they need only one key-
board, mouse and audio set to
control every screen and application
Result: less stress and better decision-
making
Our brand-new UniSeeTM platform bun-
dles three elements – View, Mount and
Connect – to revolutionize the LCD
video wall Ensuring a uniform view,
fast installation, easy servicing, and
high reliability, UniSeeTM is bound to
enable bright outcomes
1
2 34
1
2 34
3+40%91%
Enterprise
Engaging you to unleash the power of shared knowledge
Outcomes
A/26 Barco annual report 2017
Corporate 57%
Control rooms 43%
Every Barco Enterprise solution is designed to help
people collaborate better together by ensuring
engaging experiences From our large video
walls, which provide operators with a crystal-clear
overview, our ClickShare presentation system, which
enables meeting participants to easily share ideas,
and our classroom solutions, all the way to our new,
flexible SaaS business models: they all help people
unleash the power of shared knowledge – for
brighter ideas and, ultimately, better results
weConnect, our cloud-based colla-
borative learning solution, is the first
Barco solution to now be offered as a
service through a subscription-based
model – for ultimate peace of mind
1st 80% 350,000
of new car designs see their first light
on a Barco screen With our virtual
reality systems, designers can imme-
diately experience their creations up
close and personal
By the end of 2017, over 350,000
ClickShare units were sold 40% of
global Fortune 1000 companies use
ClickShare – including the CSE-800 for
corporate boardrooms that we laun-
ched in 2017 – to enhance meeting
productivity
Highlights
Approximate distribution
based on sales 2017
20162017
A/27Barco annual report 2017Our activities
In 2016, George Stromeyer took the helm of Barco’s Enter-
prise division In last year’s annual report, he talked about the
company’s strategy for the future, including some exciting
new solutions and services We put his words to the test
Could you briefly recap the strategy of the Enterprise
division?
Well, it’s all about ‘delivering experiences’: we want to help
organizations fully exploit the opportunities of today’s digi-
tal world by providing experiences that enable, engage and
inspire More than that, we want to deliver exceptional expe-
riences at every customer touchpoint: from acquisition to
new services Meeting that need requires a combination
of hardware, software and services – which is what we’re
increasingly offering We are really evolving from a visualiza-
tion company into an enabler of experiences
Could you illustrate that with examples?
The brand-new UniSeeTM LCD video wall is a perfect example
of that More than designing a great product that ensures an
outstanding viewing experience, we rethought the entire
customer journey That’s how we simplified the ordering,
mounting and configuring processes We even included
registration upon activating the wall to make sure we’d stay
Delivering exceptional experiences throughout the customer journey
UniSeeTM illustrates how we are evolving
from a visualization company into an
enabler of experiences
George Stromeyer General Manager
Enterprise
A/28 Barco annual report 2017
in touch with the customer In addition, UniSeeTM is our first
enterprise-wide product: it’s perfect for control rooms as
well as lobbies, experience centers, meeting rooms, etc The
great thing about UniSeeTM is that everyone who discovers it
is just as enthusiastic as we are
Last year, you also announced a cloud-enabled platform
to offer Barco solutions as a service. Can you tell us
more?
The Digital Engagement Platform, as it is called, was indeed
launched The weConnect learning solution is the first
Barco software to be available as a subscription-based ser-
vice through the platform We'll be introducing Overture AV
control as SaaS very soon and there's much more to follow
Returning to the business bestseller: is ClickShare still on
a roll?
There are over 350,000 ClickShare units in meeting rooms
around the world now, so ClickShare remains a star The
high-level CSE-800 model that we introduced in 2017 has
further boosted its success We’re now expanding our sales
network to include more and more IT providers – in line with
the shift from AV to IT Moreover, we’re looking for oppor-
tunities to combine ClickShare and wePresent, our other
wireless presentation solution, with our AV control tools, like
Overture – another 2017 newcomer
Besides maximizing your market share in wireless pre-
sentation, what will 2018 bring?
We want to make the operator experience profitable again,
thanks to new solutions, further investments in value engi-
neering and expansion of our sales network In addition, we
want to get to the point that we can scale Overture, our AV
control offering, and weConnect for learning experiences
We’ve definitely got a solid strategy, a strong leadership team
and the right global talent to make that happen!
Barco launched the ‘enabling bright outcomes’
baseline in 2017. How does the Enterprise division
work to achieve that goal?
More than offering amazing product experiences, we
want to provide exceptional experiences throughout
the customer journey – from acquisition to renewals
and new services That implies that we offer software
and services, on top of hardware, and explore new
business models In this way, we’re the perfect part-
ner to help our customers truly unleash the power of
shared knowledge
A/29Barco annual report 2017Our activities
Radiologists that use a display with a
calibrated luminance of 1000 cd/m2,
like Uniti®, have a 10% greater chance
of detecting microcalcifications
of OR staff believe video integration
could help save time and resources
With Nexxis, they can smoothly
exchange high-res (4K) medical
images
of health IT managers say compliance
of medical displays is a major hurdle
MediCal QAWeb automates compli-
ance and reduces QA and service
costs by more than 10%
96% 95%+10%
Healthcare
Enable better healthcare outcomes for more people
Outcomes
A/30 Barco annual report 2017
Barco co-creates technology solutions for integrated
care From the imaging room and radiology
department to specialist consultations and the
surgical suite: we connect healthcare professionals
at every patient touchpoint They rely on our
medical imaging solutions to deliver the complete
picture they need to make life-critical decisions and
provide the best possible treatment – all in order
to ensure the best healthcare outcomes It’s these
outcomes that matter most to us: our solutions are
designed to meet hospitals’ clinical, operational and
financial needs
Diagnostic imaging 77%
Surgical 23%
Our toolset for a more intuitive
workflow now includes 11 tools –
4 of which were launched in 2017
– all supporting radiologists with their
increasingly busy and demanding
workloads
11 #1 +15%
Our Coronis Uniti® is the world's
No 1 preferred monitor for reading
mammograms Radiologists and breast
cancer experts praise it for providing
the very best diagnostic outcomes
while easing radiologists’ workflows
Sales in Asia Pacific and Latin America
grew by 15% in 2017
Approximate distribution
based on sales 2017
Highlights
20162017
A/31Barco annual report 2017Our activities
When Filip Pintelon took the helm of Barco’s Healthcare divi-
sion in 2015, he clearly defined the essence of the business:
to co-create technology solutions that ensure the best pos-
sible healthcare outcomes for as many people as possible
Did Filip and his team get closer to achieving that mission
in 2017?
What do you consider the highlights of 2017 for the
healthcare division?
The growth of our diagnostics business in the US was really
great news In spite of budget constraints in every hospi-
tal, we did very well thanks to three different factors Our
market-leading portfolio is one of them Coronis Uniti®, for
example, remains a unique solution, putting Barco at the top,
as does our growing range of productivity tools Secondly, we
made big investments in education – webinars, workshops,
our website – in 2017 to explain how we help hospitals deliver
better healthcare outcomes That, too, helped us expand
our reach Last but not least, we also optimized sales: we
appointed key accounts to visit big hospital groups and are
now covering new regions like the West Coast
What about the results on other continents?
While sales in Europe remained steady, we noticed strong
growth in Asia Pacific (+20%) and Latin America (+15%) I’m
Combining high quality, unique features, education and cost control keeps paying off
By sticking to state-of-the-art
technology, we can really help
hospitals deliver better healthcare
outcomes
Filip Pintelon General Manager
Healthcare
A/32 Barco annual report 2017
very happy about this, as it brings us a step closer to my
dream of facilitating excellent healthcare everywhere on the
globe Unfortunately, however, we haven’t been able to boost
sales in China: after achieving a 15% growth there in 2016, we
achieved status quo figures this year The good news is that
we understand the reason why: our go-to-market strategy
needs a makeover We’re working on that now, together with
Chang Tet Jong, the new country manager
Price must be an important argument there, as it is
everywhere in today’s competitive market?
It is, and I must say that we’re coping well For several years
now, we’ve managed to make our products more competitive
without compromising on quality thanks to severe cost-cut-
ting measures Value engineering – smart design, production
and procurement – has become a routine and is indeed a
must, as competition is fierce
In 2016, you saw the first competitors in the surgical
business. Did competition get tougher?
It did For years, we’ve had a first-mover advantage with
Nexxis and then our 4K surgical displays By now, every
new – or refurbished – operating room is a digital OR, so
surgical has become big business It implies that competitors
are claiming their piece of the pie, too That led to a status
quo figure for us in 2017 Still, our strategy is good and we
continue to make substantial investments in our Nexxis plat-
form We are determined to maintain our leadership position
in this growing market
What are the other focus points for 2018?
Getting back to growth in China is one, as is a continued
focus on value engineering In addition, we want to bring
our diagnostics expertise to niche markets, like we did with
dental in 2017 Last but not least, we plan to deliver more
and more services to enable ever-brighter health outcomes
Barco launched the ‘enabling bright outcomes’
baseline in 2017. How does the Healthcare division
work to achieve that goal?
By sustaining our focus on delivering integrated,
high-quality medical solutions Barco solutions ensure
the most accurate images, while raising productivity
in reading rooms as well as operating theaters In
the coming years, we’ll increasingly add services to
deliver added value and help hospitals achieve bright
outcomes
A/33Barco annual report 2017Our activities
Ambition and strategy
Page A/36
Enabling brightoutcomesPage A/39
Lead by innovation
Page A/40
Our strategy
A/34 Barco annual report 2017
Focus to perform
Page A/44
Outcome-based solutions
Page A/48
Go for sustainable impact
Page A/51
A/35Barco annual report 2017Our strategy
Our ambition
Barco’s mission is to enable bright outcomes by transforming
content into insight and emotion
Our core assets
Our strategy
We have worked hard over the past few years to drive our
growth and strengthen our global leadership position in three
key markets: Entertainment, Enterprise and Healthcare
Today, we have every asset we need to win in our respective
markets Based on our strong foundations, we updated the
Barco strategy in 2017: we will combine our innovation efforts
with a clear focus on performance and a commitment to
deliver outcomes We are confident that this approach will
help us advance our growth while improving outcomes for
all stakeholders
People Operationalexcellence
Globalpresence
Strongbrand
Market leadershipin core markets
Technologyleadership
Solidfinancials
A/36 Barco annual report 2017
2013 - 2014
Gear up for growth in
networked visualization global
leadership
Strengthen global leadership
in three target markets
Focus on innovation,
performance and outcomes
2015 - 2017
2017 - 2020We enable bright outcomes by transforming content into
insight and emotion.
A/37Barco annual report 2017Our strategy
Lead by
INNOVATION
Focus to
PERFORM
Offer
OUTCOME-BASED SOLUTIONS
Go for
SUSTAINABLE IMPACT
Planet
People
Communities
A/38 Barco annual report 2017
Enabling brightoutcomes
In February 2017, Barco changed its mission statement Since then,
everyone at Barco lives and breathes the new baseline: we are
committed to ‘enabling bright outcomes’ To help us achieve that
mission, we also upgraded our existing strategy
New ways to live, play and work
Our mission statement and strategy are inspired by our ra-
pidly changing world, in which technology introduces new
ways to live, play and work This brings new opportunities,
as well as new business models In line with these trends,
our customers are more and more demanding outcomes
instead of pure products To serve our customers even bet-
ter with 'peace of mind' solutions we plan to enable bright
outcomes by transforming data into insight and emotions
This will help us move beyond hardware solutions to include
software and to step up in service solutions It will also
enable us to capture the entire lifecycle opportunity of
our solutions
Fusing innovation, performance and outcomes
To cater to these expectations, Barco must evolve from being
a tech ‘specs’ vendor into a partner that delivers outcomes, by
combining hardware, software and services This is why we
included the outcome commitment in our updated strategy
That commitment is intertwined with a zeal for innovation,
a characteristic that has continued to shape Barco since its
earliest days To unlock the full potential of Barco as a com-
pany, we also unceasingly focus on performance
Going for sustainable impact
When discussing how we will execute on that renewed stra-
tegy, everyone at Barco was unanimous: we want to work
with respect – for our colleagues, the community we ope-
rate in and our planet In other words: we want to go for
sustainable impact
This is the Barco DNA, which will guide us on our path toward
continuing success and delivering on our promise to enable
bright outcomes
A/39Barco annual report 2017Our strategy
Lead by innovationInnovation has been the lifeblood of Barco for over 85 years
We’ve always been a technology company Conceive, design and
develop new technology: that’s what we do Our solutions are often
revolutionary and set the tone in their respective markets Innovation at
Barco, however, should be, and increasingly is, customer-oriented In
addition, innovation is about more than launching innovative products
Design thinking
Engineers typically strive
to challenge themselves;
to evolve and come up
with always better, brighter,
stronger technologies and
products, packed with
impressive features However, technology for technology’s
sake does not add any value To ensure true innovation, we
have to start from the customers’ points of view That’s
why we introduced the concept of ‘design thinking’ When
developing new solutions, we talk to customers and business
partners and put ourselves in their shoes to really understand
their needs, realities and contexts We then combine these
insights with the possibilities offered by our technology and
the requirements for business success
Rethinking processes and business models
That, too, is innovation: thinking outside the box about the
way we work and do business Manufacturing becomes lean
and agile Development is transformed into co-creation with
customers, suppliers, peers and the academic world In addi-
tion, we review our sales channels and look for new ways
to market our technology, for example, by selling outcomes
instead of products
To ensure true innovation, we have
to start from the customers’ point of
view
A/40 Barco annual report 2017
UDX: the unbelievable projector
In the spring of 2017, our Entertainment division launched the 4K
UDX large venue projector It is a fine example of customer-cen-
tric development: before designing the projector, Barco talked to
customers and distilled their wants and needs into the new laser
phosphor projector
This is how the UDX enables bright outcomes:
Excellent images
• unbelievable colors
• powerful 4K processing without image quality loss and
lower latency
Peace of mind
• easy to ship and set up, thanks to compact, rugged
design
• modular design ensures easy servicingBarco has taken a big step forward
The UDX is a game-changer in laser
projection technology
Niclas Ljung, CTO, Mediatec
A/41Barco annual report 2017Our strategy
UniSee™: a revolution in the LCD video wall market
The UniSee™ LCD video wall that we launched in October
2017 is a perfect example of innovation in all its aspects
When developing UniSee™, our R&D colleagues took a
step back, evaluated the pain points of existing solutions
and reinvented the concept from the ground up The result
is a truly revolutionary concept that enables bright outcomes
in many ways
An outstanding viewing experience
• barely noticeable inter-tile gaps
• panels are automatically calibrated and aligned
Peace of mind
• patented video wall mounting structure
• modular design for easy servicing
• long lifetime
This is the most revolutionary
technology improvement I’ve seen
in video wall design since Barco’s
inception
Sam Taylor ALMO Pro AV
A/42 Barco annual report 2017
Workflow tools: helping radiologists work smarter, not harder
Over the years, our researchers have built up extensive
know-how on helping radiologists deal with the mounting
challenges they face Based on these insights, we develop
groundbreaking solutions, like our Coronis Uniti® diagnostic
display system, or our ever-growing set of software tools
– 11 in total – to support radiologists as they tackle their
increasingly busy and complex workloads
Our intuitive workflow toolset, including popular tools like
SpotView™, DimView™ and VIrtualView™ help radiologists
work smarter, not harder, by:
• increasing the visibility of subtle details
• improving focus during reading sessions
• accelerating the workflow
Our SpotView™ Mag productivity tool zooms in on a small
area and makes it twice as large – helping radiologists spot
the tiniest details, faster
x2
A/43Barco annual report 2017Our strategy
Focus on performance Bold innovation is no longer enough to remain a market leader in
today’s changing world Achieving a culture of execution will define our
future success This means we have to raise the bar in everything we
do We must work more effectively and in a more agile way so that we
can innovate quicker, strengthen our commercial capabilities, control
costs, etc This focus on performance requires running the company in
a different way and making high-impact choices
Making choices
In 2017, we identified four
strategic areas to focus on:
driving commercial excel-
lence, value engineering,
investing in local capabi-
lities and working smarter
More than that, we have
made – and will continue to make – explicit choices and
pivot if needed, based on our progress and the opportunities
on the horizon This means that we challenge procedures
and are not afraid to adapt them when they don’t make
sense It also means letting go of certain businesses, like our
lighting activities in Entertainment or our bedside solutions in
Healthcare, and moving on to new ones While sometimes
difficult, these decisions are a must to ensure a healthier basis
for continued organic growth
More effective and more agile
As we advanced into 2017, we saw the first positive results
of our efforts By stepping up our passion for execution, we
are becoming a more effective, leaner, more agile com-
pany That means we are able to speedily respond to market
changes and strengthen our competitiveness In 2018, we
will further boost these efforts by focusing on the four focal
areas we identified in 2017 We will work on these until they’ve
become second nature
We want to install a SAY DO
mentality in our company culture
and turn 'PowerPoint plans' into
'proofpoints'
Jan De Witte CEO
A/44 Barco annual report 2017
Driving commercial excellence
To meet the needs of the world’s rapidly changing markets,
we embarked upon a journey to professionalize sales about
three years ago Here’s how we want to drive a culture of
commercial excellence:
01. Think first, then actBefore we start selling, we articulate and align our go-to-mar-
ket strategy: we decide what markets we want to cover and
map the market size, the cost of sales, the margins and the
channels
02. Trusting metricsAs we increasingly rely on metrics, we are professionalizing
our tools and training our sales teams on how to use them
03. Value sellingRather than selling products, we want to deliver solutions and
services that solve our customers’ business pains In 2017,
we trained +300 sales reps on how to embrace value selling
04. Capturing more sales opportunitiesWe are looking to create more opportunities for after-sales,
upselling and cross-selling Key Account Managers help us
improve our cross-selling capabilities
05. Joining forcesWe are intensifying our partnerships with resellers In addition,
sales is also increasingly involved in product development
01.
02.
03.
04.
05.
A/45Barco annual report 2017Our strategy
Value engineering
As a technology company, we typically strive to always come
up with better, brighter, stronger products That, however,
may not be what our customers really need and want Value
engineering helps us think how we can create value for our
customers, while keeping in mind the profitability, service-
ability, reliability, sustainability, etc of our solutions
The power of collaboration
Collaboration is key in value engineering We’re working in
cross-functional teams to question product requirements, the
product design and the manufacturing process and to look
critically at the costs incurred at every step Our engineers
are also increasingly interacting with people in production
and sales to optimize solutions, and we often team up with
customers and suppliers
Saving costs and meeting customer needs
If done well, value engineering helps us cut costs and
develop products that better meet customer needs, while
often being better for the environment, too
Value engineering
Does my product havethe right features?
How can I achieve a lower cost design?
Do I make and purchasemy parts at the right
costs?
Design for ‘-ility’
• Profitability
• Serviceability
• Sustainability
• Reliability
• Manufacturability
A/46 Barco annual report 2017
In country for country
Barco knows that there is huge potential in emerging markets
for products like our healthcare solutions and ClickShare Yet
doing business successfully implies that you know your cus-
tomer really, really well That’s why ‘going local’ in countries
like China and India is key to our strategy
Different markets =
• different business models
• different price points
• different needs and requirements
Business success requires
• local leadership team
• local design, engineering and manufacturing
• local sales channels
Value engineering
Does my product havethe right features?
How can I achieve a lower cost design?
Do I make and purchasemy parts at the right
costs?
Design for ‘-ility’
• Profitability
• Serviceability
• Sustainability
• Reliability
• Manufacturability
Doing global business requires local
affinity Glocalisation is the key to
opening up new markets
Rajiv Bahlla Country director India
A/47Barco annual report 2017Our strategy
Offer outcome-basedsolutions 'Enabling bright outcomes' is Barco’s ambition statement: we want to
help exhibitors create amazing movie experiences and help radiologists
deliver the best possible care In today’s digital – Netflix and Spotify –
world, however, customers increasingly demand an ultimate peace of
mind For businesses, that implies a move to selling outcome-based
solutions
Projection, not just projectors
Pay for awe-inspiring projection without buying projectors
or for reliable diagnostic imaging without investing in our
diagnostic display systems: that’s just two examples of out-
come-based solutions that Barco could offer in the future
As our technology is mission-critical for our customers, the
potential is huge
Overhauling the way we work
The road to this new business model is long It implies that
we have to change from being a tech ‘specs’ vendor to a
partner that delivers outcomes – through hardware, soft-
ware and services So, we’ll have to keep strengthening our
capabilities in these fields More than that, it changes the
dynamics of our relationships with customers and business
partners In other words: an outcome-based business model
will require rethinking the way we work and do business
Center of Excellence
To support us on our journey, we have welcomed several
new colleagues who will steer services-related projects We
have also established a brand-new Services Center of Excel-
lence, where we’re molding new initiatives Our joint efforts
already led to the first results in 2017: our Digital Engagement
Platform
A/48 Barco annual report 2017
The Digital Engagement Platform: our very first SaaS!
In 2017, our Enterprise division launched a brand-new offering that
perfectly illustrates our commitment to providing outcome-based
solutions: our Digital Engagement Platform Through this platform,
we will be offering all kinds of subscription-based services to
our partners and customers In this model, our customers pay a
monthly subscription fee for services that we provide
The benefits? The concept is truly a win-win
For our customers:
• a low threshold to Barco products, without big upfront
investments;
• peace of mind: they are always using the best, most reliable,
always-on Barco solutions;
• attractive cost of ownership
For Barco:
• a lower threshold to our solutions;
• strategic, long-term partnerships with our customers;
• recurring revenues;
• happy users of Barco solutions
In 2017, we launched weConnect,
our education solution, via the Digital
Engagement Platform
A/49Barco annual report 2017Our strategy
Go for sustainable impactWhen deciding how to execute on our strategy, we decided on a very
clear path forward: we want to work with respect Respect for our
colleagues, for the community we operate in and for the planet we all
live on In other words, we will innovate, focus on performance and
deliver outcome-based solutions in a sustainable way
More details and insights on our Sustainable Impact Program is
available in Section B, the Barco Sustainability Report
Going sustainable is smart business
• It helps build customer loyalty: statistics show us
that 40% to 80% of customers want to buy from a
‘responsible’ firm
• It helps to attract and retain talent: sustainable
companies enjoy 55% stronger employee engagement
• It matches the aspirations of our shareholder base
Planet, people and communities
To support our quest for sustainable impact, we drafted a
sustainability strategy Based on conversations, comparisons
and studies, we identified three sustainable development
goals, which we translated in three focus domains: planet,
communities and people
• Planet: act on climate change, in our operations and in
the solutions we bring to our customers
• People: help our people respond proactively to change
• Communities: help the communities where we operate
to thrive and make progress
40% to 80% 55%
of customers want to buy
from a ‘responsible’ firm
Sustainable companies enjoy 55%
stronger employee engagement
A/51Barco annual report 2017Our strategy
Corporate governance statementPage A/55
Board ofDirectorsPage A/56
Governance
A/52 Barco annual report 2017
Declaration regarding the information given in the Annual Report 2017
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
A/54 Barco annual report 2017
In accordance with article 96, §2 of the Companies Code,
Barco applies the Corporate Governance Code 2009 as
reference code This code can be downloaded via the link
www.CorporateGovernanceCommittee.be
Barco deviates from art 8 4 of the Corporate Governance
Code
Barco makes the information defined in this article available
only on its website An analysis of website traffic revealed that
visitors search for this information on the webpages them-
selves, rather than in the Corporate Governance Charter,
which is also available on the website
Barco’s Corporate Governance Charter is available for
download at
www.barco.com/corporategovernance
Corporategovernance statement
A/55Barco annual report 2017Governance
Bruno HolthofFrank Donck
Charles Beauduin
Ashok K. Jain Hilde Laga
Jan De Witte
Board of Directors
A/56 Barco annual report 2017
An Steegen Christina von Wackerbarth
Jan P. OosterveldLuc Missorten
A/57Barco annual report 2017Governance
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 experience, including international
assignments in Asia and the United States
Jan De Witte (°1964)
is CEO of Barco as of September 2016 He is a global leader
who has served in a variety of operational and business
leadership roles over the past 25 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 officer of General
Electric Cy (GE), and CEO of the Software and Solutions
business in the Healthcare Division During his 17-year, tenure
with GE, he worked in global management roles in manu-
facturing 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
Mr De Witte holds a Master of Electromechanical Engi-
neering from KU Leuven, and an MBA from Harvard Business
School
Board of Directors
Situation on 1 February 2018
Chairman Charles Beauduin 2020*
Directors Jan De Witte 2020*
An Steegen (1) 2020*
Praksis BVBA (represented by Bruno Holthof) (1) 2018*
Luc Missorten (1) 2018*
Oosterveld Nederland B V (represented by Jan P. Oosterveld) 2018*
Kanku BVBA (represented by Christina von Wackerbarth) 2018*
Adisys Corporation (represented by Ashok K. Jain) 2020*
Hilde Laga (1) 2018*
Frank Donck (1) 2020*
Secretary Kurt Verheggen General Counsel
(1) independent directors // * date on which the term of office expires: end of the annual meeting
A/58 Barco annual report 2017
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 and Telecolumbus AG, as
non-executive director of KBC Group NV and as independent
director of Elia System Operator NV 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
board member for several listed and privately owned compa-
nies Mr Donck was Chairman of Telenet Group Holding NV
He is also vice-chairman of Vlerick Business School and is a
member of Belgium’s Corporate Governance Commission
Bruno Holthof (°1961)
is the Chief Executive Officer (CEO) of Oxford University
Hospitals Foundation Trust (OUHFT) OUHFT employs 12,000
staff across four hospital sites and 44 other locations Before
OUHFT, he was CEO of the Antwerp Hospital Network from
January 2004 until September 2015 During this period, he
transformed ZNA into the most profitable hospital group in
Belgium
Before becoming a CEO, he was a partner at McKinsey &
Company During this period, he served a wide range of
healthcare clients in Europe and the United States and gained
significant expertise in the areas of strategy, organization and
operations Bruno Holthof is a member of the Board of Barco,
and a member of the Board of Armonea, a European private
care home provider He holds an MBA from Harvard Business
School and an MD/PhD from the University of Leuven
Ashok K. Jain (°1955)
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 pres-
ident of Gimv NV She is a member of the Belgian Corporate
Governance Committee and served as a member of the
supervisory board of the F S M A (formerly C B F A) until 2014
Luc Missorten (°1955)
is currently Chairman of the Board of Directors of Ontex and
member of the Board of Gimv NV, Recticel, Scandinavian
Tobacco Group A/S and Corelio He served on the boards
of LMS, Vandemoortele and Bank Degroof Throughout his
professional career and until the end of 2014, Mr Missorten
exercised executive roles at various companies, such as
Corelio (CEO), UCB (CFO) and ABInbev (CFO) He holds
a law degree from KU Leuven, a Master of Laws from the
University of California–Berkeley and a Certificate of
Advanced European Studies from the College of Europe in
Bruges
A/59Barco annual report 2017Governance
Jan P. Oosterveld (°1944)
held several senior management positions at Royal Philips
Electronics before he retired in 2004 as member of the
Group Management Committee He is a professor at IESE,
owns a consultancy company and holds several board
positions Mr Oosterveld has a Master of Mechanical
Engineering from Eindhoven Technical University and an
MBA from IESE Business School, Barcelona
Ann Steegen (°1971)
is executive vice president of Semiconductor Technology
& Systems at imec, a world-leading nanotech knowledge
center in Leuven, Belgium She is responsible for developing
state-of-the-art nanoelectronics technology to accelerate the
growth of a connected and sustainable society
Dr Steegen is a world-recognized authority in nanoelectro-
nics that enable system solutions for IoT infrastructure, sen-
sors and actuator-based applications She began her career
as R&D director at IBM in New York She holds a PhD in
material science from KU Leuven and more than 100 publi-
cations and patents
Christina von Wackerbarth (°1954)
has held several top positions at VNU Belgium, VNU Maga-
zines International, Sanoma WSOY and the Flemish public
broadcaster VRT Today, she is active as international consul-
tant and executive coach ad INSEAD Leadership Development
Center and in private practice for major global firms in many
industries She has served on various boards, including those
of telecom operator Mobistar in Belgium and Tamedia in Swit-
zerland Ms von Wackerbarth holds a degree in linguistics,
an AMP diploma from INSEAD (France), a Certificate
in Financial Management at UAMS (Belgium), a MSc in
consulting and clinical coaching from HEC (France) and the
same diploma from INSEAD (France)
Changes
After serving as director for nearly 17 years, Eric Van Zele
resigned on 27 April 2017 ADP Vision BVBA, permanently
represented by Antoon De Proft, did not seek renewal of his
directorship due to other professional duties
At the general meeting of 27 April 2017, the shareholders
appointed Jan De Witte and An Steegen, and reappointed
Adisys Corporation, permanently represented by Ashok Jain
and Frank Donck as directors With the appointment of Ms
Steegen, the composition of the Board meets the statutory
requirement for gender diversity Following the appointment
of Mr De Witte, the Board appointed him managing director
on 29 April 2017
All directors hold or have held senior positions in leading
international companies or organizations Their biographies
can be found on pages A/56-A/60 of this annual report
Board Committee
Further to the changes in the Board, the composition of the
Remuneration & Nomination Committee and the Strategic &
Technology Committee has also been adapted accordingly
Strategic and Technology Committee
As of 26 June 2017, the Strategic & Technology Committee
is composed as follows: Mr Charles Beauduin, who acts as
Chairman, Mr Jan De Witte, Mr Bruno Holthof, Mr Jan P
Oosterveld, Mr Ashok Jain and Mrs An Steegen
A/60 Barco annual report 2017
Audit Committee
The Audit Committee is composed of three members,
Mr Luc Missorten, who acts as Chairman, Mr Bruno Holthof
and Mr Jan P Oosterveld Mr Missorten and Mr Holthof
are independent directors The Audit Committee’s
members have relevant expertise in financial, accounting
and legal matters as shown in the biographies on pages
A/56-A/60 The Board of Directors therefore opines that
the Audit Committee meets the statutory requirements of
independence and expertise in accounting and auditing
Each year, the Audit Committee assesses its composition
and its operation, evaluates its own effectiveness and makes
the necessary recommendations regarding these matters to
the Board of Directors
Both the Statutory Auditor and the head of Internal Audit have
direct and unlimited access to the Chairman of the Audit
Committee and to the Chairman of the Board of Directors
Remuneration and Nomination Committee
The Board of Directors have combined the Remuneration
Committee and the Nomination Committee into a single
committee
As of 27 April 2017, the Remuneration & Nomination Com-
mittee consists of three directors: Mr Charles Beauduin, who
acts as Chairman, Mr Luc Missorten and Mrs Hilde Laga
Mr Missorten and Mrs Laga are independent non-executive
directors
The Committee has the necessary expertise to perform its
mission
A/61Barco annual report 2017Governance
Jan De Witte CEO Ann Desender Senior VP - CFO
Filip Pintelon Senior VP - GM Healthcare
George Stromeyer Senior VP - GM Enterprise
An Dewaele Senior VP - Chief HR Officer
Nicolas Vanden Abeele Senior VP - GM Entertainment Wim Buyens CEO - New Cinema Joint Venture
Piet Candeel Senior VP - EMEA
Core Leadership Team
A/62 Barco annual report 2017
Ney Corsino Senior VP - Americas Chang Tet Jong Senior VP - MD Barco China
Xavier Bourgois Senior VP - Information Technologies Kurt Verheggen Senior VP - General Counsel
Olivier Croly Senior VP - APAC Johan Heyman Senior VP - Operations
A/63Barco annual report 2017Governance
Jan De Witte
See biographies of Board of Directors
(A/58 - A/60)
Ann Desender
Ann Desender 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 Mana-
ger 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
An Dewaele
is Chief Human Resources Officer Prior to joining Barco in
2017, she worked for five years as an HR consultant with De
Witte & Morel, followed by 20 years with the Volvo Group,
where she held several senior HR positions, both local and
global, on operational and strategic levels Mrs Dewaele
holds a Master of Industrial Psychology from the University
of Ghent She is also graduate of Vlerick’s Business School
Compensation and Benefits Management Program
Filip Pintelon
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 Gene-
ral Manager of the Healthcare division, and currently also
acts as ad interim CTO Prior to joining Barco, he held top
positions at Siemens Simulation & Testing, 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
Nicolas Vanden Abeele
is General Manager of the Entertainment division He 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 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 administration
from KU Leuven, and a masters’ degree in business from
the College of Europe and Solvay School of Management
Wim Buyens
heads the New Cinema Joint Venture He has held several
senior management positions in high tech companies during
the past 15 years He started his career in IT and CAD/CAM,
later joining the Danish company Brüel & Kjaer where he
enjoyed several global senior management positions in sales
and product strategy Mr Buyens started his career at Barco
in November 2007 as Vice President Digital Cinema He has
also been appointed in 2017 as chairman of the board of
governors of the Advanced Imaging Society in Hollywood
He has been General Manager of the Barco Entertainment
division for 7 years Mr Buyens holds a degree in Engineering
and obtained his executive management at Stanford Univer-
sity and IMD in Lausanne
A/64 Barco annual report 2017
George Stromeyer
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
working 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
Piet Candeel
heads the EMEA region for Barco Prior to his present posi-
tion, he was the General Manager of the Healthcare division
for over 10 years Preceding that assignment, he held several
positions in marketing, sales and general management in a
variety of business units in Barco Mr Candeel is an Officer
of Nautical Electronics, holds a post-graduate degree in
marketing from EHSAL Brussels and an MBA from the
University of Antwerp (UFSIA) He is also a graduate of Stanford
University’s Executive Program (SEP)
Ney Corsino
is the Regional President of the Americas Prior to this, he
managed the International Sales and Sales Operations of
Barco Before joining Barco, he held several management
positions at Philips, through various industry segments, in
foreign assignments around the globe Mr Corsino holds a
degree in electronic engineering with post-graduate studies
in economics He further extended his executive education
at Insead and Kellogg School of Management
Chang Tet Jong
joined Barco China as Senior Vice President and Managing
Director on 1 April, 2017 and is a member of Barco's Core
Leadership Team
He is responsible for leading the Greater China organization
and Barco’s activities in the China region This includes the
governance of the different joint ventures and other strategic
relationships
Mr Chang brings 30 years of experience to Barco across
R&D, sales & marketing and general management He has a
diverse professional background in several Asia Pacific coun-
tries, notably in China, South East Asia and India He has also
worked in Western Europe and has lived in Brussels for a few
years Prior to his current role, he was the Vice Chairman
and General Manager of Sanbei Seed and Head of Corn and
Vegetables business at Syngenta Mr Chang holds a Master
of Science from Oklahoma State University, USA
Olivier Croly
joined Barco in 2017 as Senior Vice President of APAC
Prior to joining Barco, he held top positions at GE Health-
care & Philips, leading businesses across EMEA & Asia After
graduating from the National Telecom Institute with a
Master of Telecommunications & Informatics in 1988, Mr
Croly earned an MBA from Paris Dauphine University
A/65Barco annual report 2017Governance
Johan Heyman
is Vice President Operations & Logistics, managing Barco's
manufacturing sites worldwide as well as the worldwide
Logistics Procurement, Quality and Facilities teams He
joined the company in 2008 Before joining Barco, he
held several management positions in the semiconductor
industry at Alcatel Microelectronics, AMI Semiconductor
and ON Semiconductor Mr Heyman holds a Master of Elec-
tronic Engineering from the University of Ghent as well as
a post-graduate degree in industrial management from the
same university
Xavier Bourgois
is Senior Vice President of Information Technologies He
joined Barco in 2015 after a career at General Electric and
continuing at The Stanley Works, International Paper and
bpost He held positions of increasing leadership in Opera-
tions, Supply Chain, IT and Business Transformation Xavier
holds an MBA from the University of Chicago Booth School
of Business and a Master of Mechanical Engineering from
KU Leuven
Kurt Verheggen
serves as Company Secretary of the Board He is the General
Counsel of Barco 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 de Havre, a Master of Laws
from Tulane University Law School in New Orleans and a
Master of Real Estate from Antwerp Management School
A/66 Barco annual report 2017
Activity report on Board and Committee meetings
Refer to Title 1 and 2 of Barco’s Corporate Governance Char-
ter for an overview of the responsibilities of the Board of
Directors and its Committees
The table below provides a comprehensive overview of the
directors’ attendance at Board of Directors and Committee
meetings during the 2017 calendar year:
Board of Directors
In 2017, the Board of Directors met seven times In February,
the Directors met in Amsterdam (the Netherlands) and visited
the ISE tradeshow to learn about the newest product offer-
ings and latest technology trends in the audiovisual industry
At every meeting, the Board of Directors reviewed and
discussed 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 2016 and proposed
the dividend for approval by the shareholders It also
deliberated on the renewal of the director mandates as
presented by the Remuneration and Nomination Committee
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 2018 financial budget
The Board closely monitored the implementation of strategic
projects such as the sale of Barco's lighting activity and
the New Cinema Joint Venture for cinema with China
Film Group, Appotronics and CITIC Finally, the Board also
attended several demonstrations of new technologies
in areas such as automated decision support and near-
seamless LCD
Audit Committee
The Audit Committee meets at least twice a year with the
Statutory Auditor and the head of Internal Audit to consult
about matters falling under the Committee’s authority and
the findings of the internal audits The CEO and CFO also
attend the meetings of the Audit Committee, unless the
members of the Audit Committee wish to meet separately
Directors’ attendance at Board and Committee meetings
BOAR
D O
F D
IREC
TORS
AUD
IT
COM
MIT
TEE
REM
UN
ERAT
ION
&
NO
MIN
ATIO
N
COM
MIT
TEE
STRA
TEG
IC &
TE
CHN
OLO
GY
COM
MIT
TEE
Charles Beauduin 7 3 4
Antoon De Proft (1) 2 2
Jan De Witte 5 5 3 2
Frank Donck (1) 7
Bruno Holthof (1) 7 5 3
Ashok K. Jain 7 4
Hilde Laga (1) 7 3
Luc Missorten (1) 7 5 5
Jan P. Oosterveld 7 5
An Steegen (1) 5 2
Christina von Wackerbarth 5 2
Eric Van Zele 2 2
(1) independent directors
A/67Barco annual report 2017Governance
The Audit Committee assists the Board of Directors in fulfilling
its oversight responsibilities with respect to the:
• risk management and internal control arrangements;
• reliability and integrity of the Group’s financial
statements and periodical and occasional reporting;
• compliance with legal and regulatory requirements as
well as the Code of Ethics;
• performance, qualifications and independence of the
external auditors;
• performance of the internal audit function
In 2017, the Audit Committee convened five times The
Chairman of the Audit Committee reported the outcome
of each meeting to the Board of Directors The yearly report
of the activities of the Audit Committee, including the Audit
Committee’s self-assessment, has been submitted to the
Board of Directors
The Statutory Auditor attended three meetings during which
they reported on the results of their audit procedures and
highlighted specific attention points The Statutory Auditor’s
management letter contained no recommendations for
material adjustments
The Audit Committee reviewed the Group’s overall risk areas
and risk management and control procedures related to the
following areas: legal & compliance, IT, currency and treasury
instrument, health, safety and environmental, internal control
and the insurance program
Each quarter, the financial reports are discussed with special
attention to the critical accounting judgments and uncer-
tainties, consistent application of valuation rules and off
balance sheet obligations The Audit Committee meeting
of December is dedicated to the preparation of the year-end
closing, with a particular focus on the review of the impair-
ment testing procedures performed on goodwill and on
capitalized development cost
Remuneration and Nomination Committee
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 Officer, 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
cultural and gender diversity in particular The Committee
took this into account in the recent director appointments,
according to article 526 quater §2 of the Companies Code
For further reference on how the company deals with diver-
sity and equal opportunities we refer to the sustainability
section of this report (Sustainable Impact Plan – people)
In 2017, the Remuneration and Nomination Committee met
five times
The HR Plan for 2017-2020 was presented to the Committee
at the beginning of the year
The Remuneration and Nomination Committee has reviewed
the remuneration of the Core Leadership Team and the CEO
This included the definition and evaluation of bonus criteria,
A/68 Barco annual report 2017
bonus deferral principles as well as an overall assessment of
composition and positioning of the reward packages based
on external data This was done with regard to the 2016
bonus review as well as the 2017 salary review and bonus
plans
The Remuneration and Nomination Committee discussed
the results of a broad global study on pay mix (base salary,
short-term incentives and long-term incentives) and possi-
ble reward tools, providing direction for the Barco Reward
Strategy
The nomination of new Board members, new Core Leader-
ship Team members, and the performance as well as the
succession of the Core Leadership Team were also on the
agenda In preparation for the general meeting, the Commit-
tee prepared and reviewed the remuneration report
With regard to the 2017 stock option plan, the Committee
discussed and confirmed the 2017 plan guidelines Particular
attention was drawn to the balance between the different
components of senior management remuneration and the
relative weight of the equity-based part, before approv-
ing and submitting it for Board approval Upon the CEO’s
recommendation, the Committee approved the grants for
the Core Leadership Team and the principles for eligibility
of Barco employees The grant for the CEO was proposed
and reviewed by the Committee in preparation for Board
approval
In preparation for 2018, the proposed salary increase budgets
for the different countries were reviewed
Following the announcement to set up a new joint venture
which will focus on commercializing cinema solutions, a
number of HR aspects of this change have been highlighted
to the Committee
Strategic and Technology Committee
The Board of Directors has set up a Strategic and Technology
Committee, including the Chairman and the CEO The Chair-
man presides over this Committee The Committee meets
when an issue is introduced by the CEO Members of the
Core Leadership Team and other members of the Board
can be invited to attend meetings of the Committee The
Committee meets at least one time per year to evaluate the
existing strategy and technology roadmap
The Strategic and Technology Committee discusses options
that could influence the company’s strategic path Possible
topics include mergers & acquisitions, investments in new
technologies and markets or regions that could have an
important impact on the future of the company This relates
to investments running over a number of years that involve
a minimum commitment by the company of 10 million euro
over the entire duration of the project
In 2017, the Strategic and 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 Core Leadership Team presented a select number of
proposals for acquisitions The Strategic and Technology
Committee conducted in-depth discussions about the
strategic value of the proposed transactions in view of the
company’s long-term strategy The Committee also evaluated
the opportunities as well as the risk profiles of the projects
and gave appropriate instructions regarding the transaction
parameters
A/69Barco annual report 2017Governance
Evaluation of the Board of Directors and its Committees
The Board of Directors regularly carries out a process of
self-evaluation The intention is to evaluate the functioning of
the Board as a whole and of its Committees In this respect,
individual and private interviews are held with each of the
directors, leading to a report which is submitted to the full
Board for review and action The topics discussed are: the
quality of the interaction between management and the
Board, the quality of the information and documents sub-
mitted to the Board, the preparation of the Board meetings,
the quality of the discussions and decision-making of the
Board, the extent to which all relevant strategic, organiza-
tional and managerial issues are addressed by the Board
and the contribution of all Board members to the decision-
making process of the Board This process allows for actions
to be taken, aiming at the continuous improvement of the
governance of the company Moreover, prior to a direc-
tor’s (re-) appointment, the Remuneration and Nomination
Committee discusses and evaluates the individual director’s
contribution to the Board
The above is fully in line with the Corporate Governance
Code Reference is also made to Title 1 (1 3) of the company’s
Corporate Governance Charter at
www barco com/corporategovernance
A/70 Barco annual report 2017
Remuneration report for financial year 2017
Procedures for developing the remuneration policy and for determining the remuneration granted to non-executive directors and members of the Core Leadership Team
The remuneration policy for the Board and CLT takes account
of prevailing legislation, the Corporate Governance Code
and market data It is monitored and regularly checked by
the Remuneration and Nomination Committee – with the
assistance of specialist members of staff – to see whether
it complies with changes in the law, the Corporate Gover-
nance Code, and prevailing market practices and trends The
Chairman of the Remuneration and Nomination Committee
informs the Board of the Committee's activities and advises
it of any changes to the remuneration policy If required by
law, the Board will submit any policy changes to the General
Meeting for approval
Remuneration awarded to non-executive directors (in euro)
On 27 April 2017, pursuant to article 17 of the Articles of
Association, the General Meeting set the aggregate annual
remuneration for the year 2017 at 2,426,043 euro for the
entire Board of Directors This amount also includes the
remuneration of the executive director The balance of the
amount was apportioned among the other members of the
Board in line with its internal rules
The remuneration paid to non-executive directors consists
solely of an annual fixed component plus the fee received
for each meeting attended In light of the considerable time
he devotes to the ongoing supervision of Barco group affairs,
the Chairman of the Board receives a different remuneration
package that comprises solely a fixed component, which
is set separately by the Remuneration and Nomination
Committee and approved by the Board
The Ordinary Shareholders’ Meeting of 25 April 2013 decided
to set director’s pay, starting from the 2013 financial year,
and to grant:
• an annual gross fixed compensation of 100,000 euro for
the Chairman of the Board
• an annual gross fixed compensation of 20,500 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 Strategic & 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
Non-executive directors do not receive any variable com-
pensation linked to results or other performance criteria
They are not entitled to stock options or shares, nor to any
supplemental pension scheme
These remunerations are charged as general costs.
A/71Barco annual report 2017Governance
Board of Directors
FIXED REMUNERATION
BOARD ATTENDANCE
COMMITTEE ATTENDANCE TOTAL 2017
Charles Beauduin 100,000 100,000
Antoon De Proft 10,250 2,550 5,100 17,900
Frank Donck 20,500 17,850 0 38,350
Bruno Holthof 20,500 17,850 17,250 55,600
Ashok K Jain 20,500 17,850 6,000 44,350
Hilde Laga 20,500 17,850 7,650 46,000
Luc Missorten 20,500 17,850 38,375 76,725
Jan P Oosterveld 20,500 17,850 12,750 51,100
An Steegen 13,667 12,750 3,000 29,417
Christina von Wackerbarth 20,500 12,750 5,100 38,350
Eric Van Zele 6,833 5,100 3,000 14,933
At the company’s request, the following directors have taken
up specific assignments outside the scope of their director-
ship for which they have been compensated as described
hereafter:
• Jan P Oosterveld is a non-executive director of Barco BV
(Netherlands) and receives a fixed remuneration of 12,000
euro per year
• Ashok K Jain: based on his extensive experience in Silicon
Valley, Mr Ashok K Jain is requested to invest additional
time in technology assessments and potential M&A
identification as well as contract initiation: 16,500 euro
(11 days at 1,500 euro per day)
Remuneration policy for the next two financial years
We intend not to make any changes to the remuneration
awarded to non-executive directors
Individual remuneration awarded to non-executive directors
A/72 Barco annual report 2017
Remuneration paid to the CEO and Core Leadership Team (in euro)
For the CEO and the Core Leadership Team, the remune-
ration is determined by the Remuneration and Nomination
Committee, in line with the rules described in the company’s
Corporate Governance Charter under Title 4 (‘Remunera-
tion’), available at
www barco com/corporategovernance
Reward strategy and compensation structure
Barco wants to be an attractive company for top talent in
the technology market space, based on sustainable human
resources practices Competitive rewards, together with
career and development opportunities, are at the heart of
Barco’s employee value proposition Overall, Barco strives for
a position above the market median on the total reward pro-
position, with a substantial variable part based on company,
team and individual performance Compensation decisions
are compliant and equitable, and balance cost and value
appropriately
The reward packages of the Core Leadership Team are
reviewed by the Remuneration and Nomination Committee
on an annual basis The Committee assesses overall market
competitiveness (based on biannual external market data),
individual market positioning and sustained individual per-
formance This review results in updated individual reward
packages and reward policies, as well as the criteria for the
variable remuneration
The main elements of the Group’s executive remuneration
policy are a base remuneration, a short-term variable remu-
neration, stock options, a pension contribution and various
other components
Base salary
The base salary reflects role responsibilities, job characteri-
stics, experience and skill sets Base salary is reviewed annually
and may increase if justified by external market
Pension and benefits
The primary purpose of pension and insurance plans is to
establish a level of security for our employees and their
dependents with respect to age, health, disability and death
Short-term incentive
A strong focus on performance and achievements at Group,
divisional/regional/functional and individual level is reflected
in the short-term variable remuneration program, which is
directly linked to the annual business objectives
If the target variable part of the compensation of individual
members of the executive management should exceed the
25% threshold on total compensation, this excess amount
will be deferred and paid subject to future sustained per-
formance
Stock options
The stock option plans provide each beneficiary with the
right to buy Barco shares at a strike price corresponding to
the fair market value of the shares upon grant
Since stock option grants are based on neither individual
nor company performance, these are not to be considered
variable remuneration as defined by the Law on Corporate
Governance
A/73Barco annual report 2017Governance
Jan De Witte REMUNERATION COMMENTS
Base remuneration 600,000 euro Includes Belgian base remuneration as well as foreign director fees
Short-term variable remuneration 570,000 euro Annual variable remuneration based on 2017 performance,
maximum bonus payout capped at 120% of base remuneration
This amount is part of the bonus provision included in the 2017
results *
In line with the Belgian law of 6 April 2010 on Corporate Gover-
nance, the payment of half of the variable remuneration is
deferred (25% after 1 year and 25% after 2 years) and subject to
multi-year targets or criteria
Stock option grant 30,000 options Number of stock options granted in 2017
Pension and insurance plans 300,000 euro
Other benefits 24,182 euro
Chief Executive Officer remuneration package
The remuneration package of the Chief Executive Officer
consists of a base remuneration, a variable remuneration,
stock options, a pension contribution and other components
The remuneration package aims to be competitive and is
aligned with the responsibilities of a Chief Executive Officer
leading a globally operating industrial group with various
business platforms
The amount of the remuneration and other benefits granted
directly or indirectly to the Chief Executive Officer, by the
Company or its subsidiaries, in respect of 2017 for his Chief
Executive Officer role is set forth below
There were no shares granted
* This does include the deferred annual variable remuneration based on 2017 performance.
Senior Vice Presidents (Core Leadership Team)
remuneration package
The remuneration package of the Core Leadership Team
members other than the Chief Executive Officer consists of
a base remuneration, a variable remuneration, stock options,
a pension contribution 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 with various business platforms
The Chief Executive Officer evaluates the performance
of each of the other members of the CLT and submits his
assessment to the Nomination and Remuneration Com-
mittee This evaluation is done annually based on docu-
mented objectives directly derived from the business plan
and taking into account the specific responsibilities of each
CLT member The achievements measured against those
objectives will determine all performance-related elements
A/74 Barco annual report 2017
Pension and other benefits
The Core Leadership Team is entitled to retirement, death-
in-service and disability benefits on the basis of the provi-
sions of the plans to senior executives in their base countries
Other benefits, such as medical care and company cars or
car allowances, are also provided according to the rules
applicable in the base country The nature and magnitude
of these other benefits are largely in line with the median
market practice
Short-term incentive
A strong focus on performance and achievements at Group
and individual level is reflected in the short-term variable
remuneration program, which is directly linked to the annual
business objectives
The short-term incentive payment is based on Group (40%),
divisional/regional/functional (30%) and individual perfor-
mance (30%) The 2017 variable payment is based on EBITDA,
free cash flow, costs, orders, sales and individual targets
Stock options
The Core Leadership Team receives stock options
The Core Leadership Team under analysis of this chapter
includes 14 persons One person left and three persons
joined in the course of 2017
Remuneration policy for the next two financial years
We intend not to make material changes to the characteristics
and modalities of the renumeration awarded to the Core
Leadership Team
REMUNERATION COMMENTS
Base remuneration 3,060,721 euro Includes local base remuneration as well as foreign director fees
Short-term variable remuneration 928,920 euro Annual variable remuneration based on 2017 performance,
maximum bonus payout capped at 150% of on-target bonus The
amount of 928,920 euro has been provided for in the 2017 results,
but the individual assessment is pending approval of the Board
Stock option grant 49,000 options Number of stock options granted in 2017
Pension and death-in service-coverage 297,853 euro Defined contribution plans
Disability coverage 69,642 euro
Other benefits * 213,642 euro
* Includes health insurance, risk insurances, company cars, luncheon vouchers, representation allowances
A/75Barco annual report 2017Governance
Stock options for the Core Leadership Team granted in 2017
In 2017, following authorization by the general meeting and
at the proposal of the Remuneration and Nomination Com-
mittee, the Board of Directors allotted stock options to some
147 Group senior managers The exercise price amounts to
87,75 euro per option, with a three-year vesting period for
the EEA plan and a two-year vesting period for the non-EEA
plan The number of options to be offered to each indivi-
dual beneficiary is variable in part, based on an assessment
of such person’s long-term contribution to the success of
the Company The options are offered to the beneficiaries
free of charge
49,000 stock options were granted to and accepted by the
members of the Core Leadership Team
The Core Leadership Team does not receive shares as part
of their compensation packages
Reference is made to pages C/70 in the Financial Statements
for an overview of the warrants and stock options exercisable
under the warrant and stock option plans
The Core Leadership Team is presented on pages A/62 –
A/66 of this annual report
NameNumber of stock options
granted in 2017Number of stock options
exercised in 2017Number of stock options
expired in 2017
Xavier Bourgois 1,500 - -
Piet Candeel 3,000 3,000 -
Tet Jong Chang 4,000 - -
Ney Corsino 3,000 550 -
Olivier Croly 4,000 - -
Ann Desender 6,000 - -
An Dewaele 4,000 - -
Johan Heyman 500 250 -
Filip Pintelon 5,000 3,000 -
George Stromeyer 15,000 - -
Kurt Verheggen 3,000 - -
A/76 Barco annual report 2017
Most important provisions of the contractual relationships with the Company and/or affiliatedcompany, including the provisions relating to compensation in the event of early departure
Members of the Core Leadership Team, including the CEO,
have directorships in Group subsidiaries as a function of their
responsibilities Where such directorships are compensated,
they are included in the amounts given above, regardless of
whether the position is deemed to be salaried or undertaken
on a self-employed basis under local legislation
Local law and normal practice are the basis for the sever-
ance arrangements of the members of the Core Leadership
Team, except for:
• The Chief Executive Officer, whose contractual arrange-
ments, entered into at the time of his appointment, provide
for a notice period of six months
• Ney Corsino who transferred to a US employment agree-
ment which includes a severance payment of 12 months
annual compensation in case of termination not for cause
Core Leadership Team members’ contracts do not include
a clause providing a right of claw-back of variable com-
pensation in cases of erroneous financial information The
audited results are used as the basis for the assessment of
the performance
Departure of members of the Core Leadership Team
Paul Matthijs left the Barco Group in 2017
Presentation of the remuneration report to the shareholders
The Remuneration Report will be submitted for vote to the
shareholders at the shareholders’ meeting of 26 April, 2018
A/77Barco annual report 2017Governance
Transparency of transactions involving shares or other financial instruments of Barco
The company’s dealing code is part of its Corporate Gover-
nance Charter charter which is 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
managerial 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
Basic principles
• Art 523 of the Companies Code sets the rules for conflicts
of interest that may arise within the context of a director’s
mandate
• Each Board member sees to it that these rules are strictly
observed
• Any act or transaction which may potentially give rise to
a conflict of interest is carefully scrutinized to avoid that
such conflict may arise
• In 2017, none of the directors reported any conflict of
interest as referred to in article 523 of the Companies Code
Policies of conduct
Functional conflict of interest
A director who is a director or business manager of a customer
or supplier or who is employed by a customer or supplier
shall report this fact to the Board of Directors prior to the
deliberations concerning a topic on the agenda relating
(whether directly or indirectly) to this customer or supplier
This obligation also applies when a family member of the
director is in the abovementioned position
The same rule applies when a director or his or her family
members (whether directly or indirectly) hold more than 5%
of the shares with voting rights of a customer or supplier
Subsequently, the director in question:
• shall leave the meeting while this topic on the agenda is
being dealt with;
• shall not be permitted to participate in the deliberations
and decision-making about the topic in question
These provisions are not applicable when the customer
or supplier is a listed company and the participation of the
director (or his or her family members) takes place within
the framework of assets that have been placed under the
management of an asset manager who manages these assets
in accordance with their own judgment, without taking the
director (or his or her family members) into account
A/78 Barco annual report 2017
At the annual shareholders meeting of 30 April, 2015, Ernst &
Young Bedrijfsrevisoren BCVBA, De Kleetlaan 2, 1831 Brussels,
was reappointed as statutory auditor of the company for a
period of three years
In 2017, remuneration paid to the statutory auditor for
auditing activities amounted to 375,774 euro Remuneration
paid to the statutory auditor for special assignments was
0 euro
Statutory auditor
A/79Barco annual report 2017Governance
Risk management processPage A/83
Risk factorsPage A/87
Financial risk managementand internal controlPage A/89
Risk management and control processes
A/80 Barco annual report 2017
Riskmanagementand control
system
ControlEnvironment
Objectives
Identification
Riskresponse
Controlactivities
Information &communication
Monitoring
Analysis &evalutation
Goals
Correct and timelyfinancial reporting
Compliance with allapplicable laws and
regulations
Operational andstrategic objectives
Operationalexcellence
Within the context of its business operations, Barco is exposed to a wide variety of
risks that can affect its ability to achieve its objectives and to execute its strategy
successfully To anticipate, identify, prioritize, manage and monitor the business
risks that impact its organization, Barco put a sound risk management and con-
trol system into place in accordance with the Companies Code and the 2009
Corporate Governance Code Risk control is a core task of the Board of Directors,
the Core Leadership Team (CLT) as well as all other employees with managerial
responsibilities
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
A/82 Barco annual report 2017
Control environment
Barco strives for a total compliance culture and risk awareness
attitude by defining clear roles and responsibilities in all
relevant domains In this way, the company fosters an envi-
ronment in which it pursues its business objectives and
strategy in a controlled manner This environment is crea-
ted by implementing various company-wide policies and
procedures, such as:
• The updated Code of Ethics
• Decision and signature authority rules
• The Barco values
• 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 sufficient
risk management and control at all levels and in all areas of
the organization
Identification and analysis: yearly risk assessment and compliance gap analysis
In the fourth quarter of each year, Barco performs a company-
wide risk assessment and compliance gap analysis This
exercise, which involves a major part of the management
team as well as other key people, aims to strengthen and
formalize risk awareness throughout Barco It encourages
the management team to actively think about the risks that
impact our business and provides them – as well as other
executives – with a clear view of how their peers around the
world perceive risk
To identify risks, Barco organizes a series of risk interviews,
audits and on-site surveys, the results of which are consoli-
dated in an overview that is passed on to CLT members
All domains from the Barco risk universe are taken into
account They then determine and rank the inherent
(likelihood, impact) and residual risks (control level) The
result of their work is summarized in a final report that is
reviewed by the Audit Committee The outcome is used
for internal audit planning, as input for the risk and
compliance work program, for insurance programs
and for corrective and mitigation actions
The Risk and Compliance Manager is in charge of this exercise,
together with Internal Audit
A/83Barco annual report 2017Risk management
Barco risk universe
All risks are classified in the Barco risk universe, which is divided into four risk areas:
Operational risks
Informationtechnologies
Operations
Financial reporting
Financial risks
Strategic risks
Working capitalmanagement
Forecast & planning
Accounting & controlling
Treasury management
Ethics & business conduct
Legislation and governmental restrictions
Organizational strategy
Operational strategy
Technology (external dynamics/evolutions)
Technology (internal)
Market & competitionProduct regulatory
International standards
Environmental, health, safety & security
Compliance risks
HRM(Social matters, personnel,
human rights, ...)
New productdevelopment & product lifecycle management
Sales and service
Sourcing & supplier
Relationshipmanagement
Properties & fixed assets
A/84 Barco annual report 2017
Risk evaluation To set the right priorities, the risk is first evaluated in a con-
sistent manner in terms of impact and likelihood scale The
resulting inherent risk does not yet take into account any
management activities or control measures developed to
mitigate it
The residual risk level is then determined by taking into
account the control level (control measures and their effec-
tiveness) of each risk
The scales for impact, likelihood and control level are based
on the acceptable level of risk exposure that is ratified by the
Board of Directors
FRE
QU
EN
TR
AR
ELY
DESTRUCTIVENEGLIGIBLE
Improve Monitor
Accept Optimize
INH
ER
EN
T R
ISK
CONTROL LEVEL
Risk response
Management response to residual risks
‘Risks to improve’ are contained by means of an action plan
to minimize their effects of such risks on the organization’s
ability to achieve its objectives These types of risks, if any,
reside under the ownership of the CEO
‘Risks to monitor’ are monitored by a member of the CLT
team
‘Acceptable risks’ and ‘risks to optimize’ are recorded in the
risk register of the related process
Each risk is allocated to a risk owner responsible for its
monitoring and follow-up
The Risk and Compliance Manager supports the adoption
of clear processes and procedures for a wide range of busi-
ness operations related to compliance, security and export
control 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
A/85Barco annual report 2017Risk management
Information and communication
A timely, complete and accurate information flow – both
top-down and bottom-up – is a cornerstone of effective
risk management
In operational domains, Barco has implemented a manage-
ment control and reporting system (MCRS) to support
efficient management and reporting of business transac-
tions 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 ensu-
ring 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, reg-
ulations, company policies or ethical values
Risk monitoring
Monitoring helps to ensure that internal controls continue
to operate effectively 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
• Compliance Officer – within the framework of the
company’s Corporate Governance Charter
• Risk and Compliance Manager – plays a pivotal role in
the organization by ensuring appropriate coordination
and follow-up of risk management activities The Legal,
Risk and Compliance Department to which the Risk and
Compliance Manager also belongs, reports directly to
the CEO via the General Counsel
• Audit Committee – the Board of Directors and the Audit
Committee have ultimate responsibility with respect
to internal control and risk management (See also the
‘Board Committees’ section in the ‘Company report’)
A/86 Barco annual report 2017
Risk factors
Just like in previous years, Barco assessed and analyzed its corporate risks in 2017 Below are the main risks identified by this
exercise along with the trend and main measures
CYBER RISK/DATA PROTECTION Trend p
• Implementation of an Information Security Management
System and certification for ISO27001
• Fostering a global personal data compliance
program (GDPR)
• Coordination by an Information Security Council
• Continued adjustment of the new product introduction (NPI)
methodology to enhance the security of our products
MARKET/COMPETITION RISK Trend p
• Governance model in place via business review meetings and strategic management plan
• Rolling out of the New Technology Introduction process (NPI)
• Strengthening the Central Technology Office
INTELLECTUAL PROPERTY Trend p
• Regular IP awareness trainings
• Proactively monitoring and combating infringements
• Structured approach for filing of patents
• Monitoring freedom to operate
QUALITY – NEW PRODUCT INTRODUCTION (NPI) Trend
• Initiative to further improve the quality culture
• NPI workgroups to sustain and improve rigorous NPI process implementation
• Completing and sustaining NPI methodology for software
An extensive GDPR compliance program,
which is rolled out globally, will help us
ensure personal data protection
A/87Barco annual report 2017Risk management
QUALITY - POST FINAL QUALIFICATION REVIEW (FQR) Trend
• Increased strategic focus on customer service
• Implementation of a Corporate Services Center of Excellence
M&A GOVERNANCE AND INTEGRATION Trend p
• Control relationship with Joint Venture partners
• Pay attention to post-acquisition integration
BUSINESS ETHICS Trend
• Update of Code of Ethics with mandatory sign-off
and e-learning module
• Regular awareness campaign – compliance awareness month –
compliance challenge
• General and dedicated compliance trainings
COST CONSCIOUSNESS Trend p
• Value engineering program
• Strict follow-up on cost center spending
• Enhancement of the business expenses control cycle
More than half of our white-collar workers
worldwide participated in the 3rd yearly
Compliance Challenge, which helps
raising awareness and understanding of
our Code of Ethics in a fun way
Notes:
1) GDPR: General Data Protection Regulation approved by the EU Parliament on 14 April 2016 and enforcement on 5 May 2018
2) The trend indicates whether the risk for Barco has increased or decreased compared to last year
3) The risk measures related to the accounting and financial reporting risks are described in the Financial Statements of this annual report
A/88 Barco annual report 2017
Financial risk management and internal control
The accurate and consistent application of accounting rules
throughout the company is assured by means of finance
and accounting manuals, which are available to the key
accounting sections
Specifically within the financial domain, a quarterly, bot-
tom-up risk analysis is conducted to identify and document
current risk factors Action plans are defined for all key risks
The results of this 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 criti-
cal accounting judgments and uncertainties are periodically
reported to the Audit Committee
Specific internal control activities with respect to finan-
cial 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 com-
pleteness of financial accruals
Uniform reporting of financial information throughout the
organization ensures a consistent flow of information, which
allows the detection of potential anomalies
An external financial calendar is planned in consultation with
the Board and the Core Leadership Team and this calendar
is announced to the external stakeholders The objective of
this external financial reporting is to provide Barco’s stake-
holders with the information necessary for making sound
business decisions
A/89Barco annual report 2017Risk management
Commentson the resultsPage A/92
Consolidated resultsfor the fiscal year 2017Page A/94
Divisional resultsfor the fiscal year 2017Page A/100
Management discussion
A/90 Barco annual report 2017
+ 20% EBITDA growth on flat sales, reflecting tangible progress on ‘focus to perform’ initiatives
Commentson the results
Fiscal year 2017 financial highlights • Incoming orders at 1,105 2 million euro (+ 2 2%)
• Sales at 1,084 7 million euro (- 1 6%), flat excluding
lighting divestment1
• EBITDA of 107 1 million euro (+ 19 1 million euro) or 9 9%
of sales (+ 1 9 ppts)
• Adjusted EBIT2 of 73 2 million euro (+36 7 million euro) or
6 8% of sales (+3 5 ppts)
• Net income3 of 24 8 million euro4 (+13 8 million euro)
• Free cash flow of 40 0 million euro, down from 57 4
million euro
• ROCE @ 19% (+4 ppts)5
• Proposal to increase the dividend to 2 10 euro per share
from 1 90 euro
(1) The reported results are not corrected for currency effects and the impact of the lighting activity, which the company divested in 1H17 Excluding the impact
of lighting, sales for 2017 were flat compared to 2016 ; excluding currency effects reported sales were 1 0% below last year
(2) Adjusted EBIT is EBIT excluding restructuring charges and impairments and other non-operating income expenses, see the 'Glossary' in Module C
of the report
(3) Net income attributable to the equity holder of the parent
(4) Net income include impairments and restructuring costs of 32 4 million euro
(5) ROCE in 2017, and applying an adjusted tax rate of 16%, is 4 percentagepoints higher than ROCE 2016, excluding impact of amortization on capitalized product
development costs
A/92 Barco annual report 2017
Comments on the results
A solid gain in gross profit margin combined with OPEX
control lifted the EBITDA margin by 1 9 percentage points
to 9 9%, with each division posting gains Barco delivered this
profitability improvement while maintaining R&D spending
levels to ensure the healthy pipeline of innovative solutions
Reported sales were slightly below last year and flat excluding
the impact of the divestiture of the company’s lighting
business Enterprise continued to deliver strong growth for
ClickShare and launched Control Room’s UniSeeTM, a new
LCD-based video wall as part of a turnaround plan for this
business Healthcare increased sales and strengthened its
market position in the diagnostic and surgical segments In
Entertainment a promising uptake in the Venue & Hospitality
segment partially offset softer results in Cinema
Barco undertook a strategic review of its businesses, assets,
manufacturing footprint and investments as part of its
‘focus to perform’ program The outcome of this review
included the divestiture of the company’s lighting activity,
a redeployment of resources away from underperforming
or non-strategic initiatives to core business opportunities
and the decision to relocate the manufacturing activities
from Norway to Belgium As a result of the strategic review,
the company recorded 32 4 million euro in restructuring
and impairment charges consisting of 5 2 million euro of
cash restructuring costs and 27 2 million euro of non-cash
charges
During 2017 Barco took decisive actions to establish a
stronger foundation for sustainable profitable growth and
improved quality of earnings Choices were made across the
organization and management attention was intensified on
operational efficiencies and gross margin accretion initiatives
While Barco’s performance in 2017 demonstrates that the
company is moving in the right direction, Barco has not
finished improving its profitability and execution efficiency
Therefore, in 2018, Barco remains focused on its strategic
initiatives in order to deliver another year of EBITDA growth
and on improving the effectiveness of its sustained R&D
investment to deliver future topline growth
Outlook 2018
The following statements are forward looking and actual
results may differ materially.
Assuming a stable economic environment and currencies
at current levels, management expects to generate further
margin improvement on flat sales for 2018 compared to 2017
Management‘s full year outlook on sales anticipates
unfavorable currency comparison for the first half offset by
stronger sales on a comparable currency basis in the second
half of the year
Management’s guidance for 2018 excludes the impact of the
New strategic Cinema Joint Venture and the new ownership
structure in BarcoCFG6
Dividend
The Board of Directors will propose to the General Assembly
to increase the dividend from 1 90 euro to 2 10 euro per share
to be paid out in 2018
The following timetable will be proposed to the Annual
General Shareholder Meeting:
• Ex-date: Monday, 7 May 2018
• Record date: Tuesday, 8 May 2018
• Payment date: Wednesday, 9 May 2018 (6) BarcoCFG is the entity where Barco joined forces with China Film Group
to address the Chinese cinema market Barco holds a 58% stake in this entity
See also 'Glossary' in Module 3 of the Annual Report
A/93Barco annual report 2017Management discussion
Order book
IN MILLIONS OF EURO FY17 FY16 FY15
Order book 318.8 320.8 333.2
Order intake
IN MILLIONS OF EURO FY17 FY16 FY15
Order intake 1,105.2 1,081.2 1,043.7
Order intake was 1,105 2 million euro, an increase of 2 2%
compared to last year driven by strong gains in Healthcare
Order intake by division
IN MILLIONS OF EURO FY17 FY16 CHANGE
Entertainment 535.7 574.8 -6.8%
Enterprise 323.9 290.2 +11.6%
Healthcare 245.8 216.3 +13.7%
Group 1,105.2 1,081.2 +2.2%
Order intake by region
IN MILLIONS OF EURO FY17 FY16CHANGE
(IN NOMINAL VALUE)
The Americas 35% 34% +7.5%
EMEA 32% 32% +1.5%
APAC 33% 34% -2.3%
Consolidated results for the fiscal year 2017
Order intake and order book
Order book at year end was 318 8 million euro, essentially
flat with FY 16 reflecting increases in Enterprise for mainly
the Corporate segment offset by declines in Entertainment
related to cinema and the divested lighting activity
and Enterprise Declines in the APAC region were mainly
offset by strong growth in the Americas region
A/94 Barco annual report 2017
Sales
Full year sales decreased 1 6% driven by a softer cinema mar-
ket, divested business activities, de-emphasis of non-core
activities and unfavourable currency Progress in the Health-
care and Enterprise nearly offset the decline in Entertainment
Sales
IN MILLIONS OF EURO FY17 FY16 FY5
Sales 1,084.7 1,102.3 1,028.9
• Excluding the impact of Barco’s lighting activity, which the
company divested in 1H17, sales for the year were flat
compared to 2016
• Excluding currencies effects (mainly the impact of the
Chinese Yuan) reported sales were 1 0% below last year
Sales by division
IN MILLIONS OF EURO FY17 FY16 CHANGE
Entertainment 533.3 578.1 -7.7%
Enterprise 308.2 289.7 +6.4%
Healthcare 243.2 234.6 +3.7%
Group 1,084.7 1,102.3 -1.6%
Sales by region
IN MILLIONS OF EURO FY17 FY16CHANGE
(IN NOMINAL VALUE)
The Americas 36% 36% -0.1%
EMEA 32% 31% -1.4%
APAC 32% 33% -3.5%
A/95Barco annual report 2017Management discussion
Profitability
Gross profit
Gross profit increased from 378 8 to 404 2 million euro, an
increase of 25 3 million euro
Gross profit margin increased 2 9 percentage points to 37 3%
compared to 34 4% in 2016, reflecting a favorable product
mix and the benefit of cost down engineering actions taken
in all divisions
Operating expenses & other operating results
Total operating expenses (excluding other operating results)
were 327 2 million euro compared to 322 7 million euro a
year earlier
As a percentage of sales, operating expenses were 30 2%
compared to 29 3% for 2016
• On a cash basis, Research & Development expenses were
122 3 million euro compared to 120 5 million euro last year
As percentage of sales, R&D expenses were 11 3% com-
pared to 10 9% a year earlier
• Sales & Marketing expenses were 146 8 million euro com-
pared to 147 1 million euro for 2016 As percentage of sales,
Sales & Marketing expenses were 13 5% compared to
13 3% in 2016
• General and administration expenses increased 5 4% to 58 1
million euro compared to 55 1 million euro last year and
increased to 5 4% as a percentage of sales compared to
5 0% in 2016
Other operating results amounted to a negative 3 7 million
euro mainly driven by additional provisions made Other
operating results in 2016 were 3 3 million euro positive partly
driven by reversals of bad debt
EBITDA and adjusted EBIT
EBITDA grew 21 7% to 107 1 million euro compared to 88 0
million euro for the prior year
EBITDA margin was 9 9% versus 8 0% for 2016
By division, EBITDA and EBITDA margins are as follows:
EBITDA by division 2017 versus 2016 is as follows:
2017(IN MILLIONS OF EURO) SALES EBITDA EBITDA %
Entertainment 533.3 38.9 7.3%
Enterprise 308.2 40.7 13.2%
Healthcare 243.3 27.5 11.3%
Group 1,084.7 107.1 9.9%
(IN MILLIONS OF EURO) 2017 2016 CHANGE
Entertainment 38.9 30.4 +27.8%
Enterprise 40.7 33.0 +23.3%
Healthcare 27.5 24.6 +12.1%
Group 107.1 88.0 +21.7%
A/96 Barco annual report 2017
Barco delivered double-digit EBITDA growth for 2017 with
each division reporting gains, led by Entertainment and
Enterprise together accounting for 85% of the year-over-
year variance
EBITDA growth resumed for the Entertainment division by
discontinuing non-profitable activities and scaling back cer-
tain growth initiatives and supported by a stable performance
in its base business Significant EBITDA growth in the Enter-
prise division was driven by continued strong contributions
from the Corporate activity The Healthcare division booked
profitability gains on favorable product mix
Adjusted EBIT was 73 2 million euro, or 6 8% of sales, com-
pared to 36 6 million euro, or 3 3% of sales, for 2016 EBIT in
2016 included 22 9 million euro of amortizations and impair-
ment of capitalization of product development expenses
Barco recorded restructuring and impairment charges of 32 4
million euro including a 5 2 million euro of cash restructur-
ing charges and 27 2 million euro of non-cash impairment
charges
The cash component includes the lay-off costs related to the
decision to relocate the production in Norway to Belgium
and the decision to revisit a number of growth initiatives in
the Entertainment division and the X2O activity in the Enter-
prise division
Non-cash items include 10 9 million euro impairment cost on
goodwill, 9 1 million euro on investments and a 4 4 million
euro cost related to write-off of inventories
As a result, EBIT was 40 8 million euro compared to 30 5
million euro in 2016
Income taxes
In 2017 taxes were 11 4 million euro for an effective tax rate
of 26 5% Taxes in 2016 were 6 3 million euro for an effective
tax rate of 20 0%
2017 income taxes were negatively impacted by changes in
tax regulation in Belgium and US resulting in a non-recurring
impact of 15 6 million euro tax cost Excluding the non-re-
curring impact, adjusted tax rate in 2017 was 16%
Net income
Net income attributable to the equity holders was 24 8 mil-
lion euro compared to 11 0 million euro in 2016 This is net
income after deducting non-controlling interest for 8 million
euro This was 14 7 million euro in 2016, mainly resulting from
a strong year 2016 in Chinese cinema
Net income per ordinary share (EPS) was 2 01 euro compared
to 0 91 euro in 2016 Fully diluted earnings per share were
1 99 euro compared to 0 88 euro
A/97Barco annual report 2017Management discussion
IN MILLIONS OF EURO 2017 2016 2015
Gross operating free cash flow 104.0 81.9 67.4
Changes in trade receivables -7.3 0.2 -5.4
Changes in inventory -3.6 -2.8 27.6
Changes in trade payables -19.7 -2.7 16.3
Other changes in net working capital -8.1 11.9 32.8
Change in net working capital -38.7 6.6 71.2
Net operating free cash flow 65.3 88.5 138.6
Interest income/expense 2.0 4.1 0.2
Income taxes -4.4 -11.5 -14.9
Free cash flow from operating activities 63.0 81.1 123.9
Purchase of tangible and intangible FA (excl. One Campus) -23.2 -24.2 -14.7
Proceeds on disposal of tangible and intangible FA 0.2 0.6 1.1
Free cash flow from investing -23.0 -23.7 -13.6
FREE CASH FLOW 40.0 57.4 110.3
Working capital and Return on Capital Employed
Working capital actions in the 2nd semester brought
Inventory + Accounts Receivables – Accounts Payables to
20% on flat sales
Net working capital was -3 8% of sales compared to -5 1%
in 2016 mainly due to lower outstanding trade payables
and lower advances on customer contracts
Cash flow and balance sheet
Free cash flow and working capital
As a result of strong working capital management in the
second semester, Barco generated a free cash flow of 40 0
million euro for the year compared to 57 4 million euro for
2016 Free cash flow at the end of the first semester was a
negative 33 5 million euro
Barco realized a 22 1 million euro higher gross operating cash flow mainly driven by higher profitability
A/98 Barco annual report 2017
IN MILLIONS OF EURO FY17 1H17 FY16
Trade Receivables 182.1 189.7 188.6
DSO 55 63 55
Inventory 154.1 169.4 166.2
Inventory turns 3.6 3.3 3.6
Trade Payables -114.5 -121.3 -135.1
DPO 58 59 63
Other working capital -263.3 -232.8 -276.0
TOTAL WORKING CAPITAL -41.6 5.1 -56.4
Capital expenditure
Capital expenditure was 23 2 million euro compared to 24 2
million euro in 2016, excluding the cash-outs for the One
Campus project in 2016
Return on Capital Employed
ROCE calculated on an adjusted tax basis was 19%, a 4
percentage points improvement versus last year 7
Goodwill
Goodwill on the group level stood at 105 4 million euro
compared to 124 3 million euro at the end of 2016 and 132 4
million euro at the end of 2015
During 2017, Barco recorded impairment charges on goodwill
totalling 10 9 million euro mainly related to the Enterprise
division’s X2O activity, which was acquired in 2014 In addition
and related to the decision to change the ownership structure
of BarcoCFG, 8 0 million euro goodwill is transferred to assets
held for sale
Cash position
Barco ended the year with a net financial cash position of
210 7 million euro, excluding the cash held in BarcoCFG This
is 24 million euro higher than the cash position at the end of
2016, mainly as a result of positive free cash flows partially
offset by dividend payments 8
BarcoCFG held 67 4 million euro cash at the end of the year
and intends to pay this out over the next 2 to 3 years through
phased dividend payments to its shareholders
7 Barco began expensing product development costs as incurred effective
1 January 2015 Previously the company had capitalized product develop-
ment costs and the outstanding balance of capitalized development costs
was amortized in 2015 and ROCE in 2016, excluding these amortizations,
was 15% 8 Cash levels refer to the immediately available net cash position, excluding
the cash in BarcoCFG
A/99Barco annual report 2017Management discussion
Divisional results for fiscal year 2017
Barco’s organizational structure
Barco is a global technology company that develops solutions
for three main markets, which is also reflected in its divi-
sional structure: the entertainment, enterprise and healthcare
markets
Entertainment
CinemaVenues & Hospitality
CorporateControl Rooms
SurgicalDiagnostic
Enterprise Healthcare
The Entertainment division is the com-
bination of the Cinema and of the
Venues & Hospitality activities, which
includes Professional AV, Events and
Simulation activities
The Enterprise division is the combi-
nation of the Control Rooms activities
and the Corporate activities ClickShare
is the main contributor to the Corpo-
rate activity which also includes the
Medialon activities
The Healthcare division includes the
activities in Diagnostic Imaging (Diag-
nostic and Modality Imaging) and in
Surgical
A/100 Barco annual report 2017
IN MILLIONS OF EURO 2017 2016 2015CHANGE VS
FY16
Orders 535.7 574.8 536.4 -6.8%
Sales 533.3 578.1 514.5 -7.7%
EBITDA 38.9 30.4 43.6 +27.8%
EBITDA margin 7.3% 5.3% 8.5%
As anticipated, the Entertainment division saw cinema
orders and sales volumes decline during 2017, while
Venues & Hospitality sales and orders grew Venues
& Hospitality sales and orders Venues and Hospitality
accounted for 38% of the orders versus 35% in 2016 EBITDA
and EBITDA margins benefited from ‘focus to perform’ actions
including divesting the lighting activity at the end of the first
quarter of 2017, repositioning some growth initiatives inclu-
ding the LED activities and reducing content financing sup-
port for the Barco Escape format
In the cinema segment, Barco augmented its leadership posi-
tion and expanded its installed base of smart laser and laser
flagship projectors More than a third of all cinema projector
units shipped in 2017 were smart laser projectors and Barco
attained deployments in 100 all-laser multiplexes globally -
a milestone and competitive differentiator for the company
In China and North America, sales declined while Barco
recorded growth in South East Asia, India and Latin America
Gearing up for the renewal wave in cinema, Barco
announced it will enter into a strategic joint venture with
Appotronics and China Film Group in 2018 to create a dedi-
cated commercialized solutions channel for the global cine-
ma market excluding mainland China
The Venues & Hospitality segment delivered good uptake
mainly in the events market and some fixed install areas
such as theme parks These increases were mainly driven
by demand for new products, such as laser phosphor pro-
jectors and image processing solutions which strengthened
Barco’s competitive positioning
Note on Barco Escape
As previously disclosed, Barco had been exploring strategic
options to secure content financing for the Barco Escape
format
Because the results of this exercise were not satisfactory,
management has decided to discontinue this growth ini-
tiative
The 30 theatres with Escape installations have been informed
and Barco is working with each of these customers to reach
a satisfactory outcome
Note on Barco Fredrikstad
On 4 January 2018, Barco announced to restructure its
activities in Frederikstad, Norway In the course of 2018, the
Frederikstad manufacturing activities will be relocated to
Kortrijk, where they will be combined with our larger, new
projection factory Currently, 78 people work in manufac-
turing and related activities at the Frederikstad facility
Entertainment division
A/101Barco annual report 2017Management discussion
IN MILLIONS OF EURO 2017 2016 2015CHANGE VS
FY16
Orders 323.9 290.2 287.0 +11.6%
Sales 308.2 289.7 300.4 +6.4%
EBITDA 40.7 33.0 11.1 +23.3%
EBITDA margin 13.2% 11.4% 3.7%
The Enterprise division performed well in 2017, producing an
180 basis point gain in EBITDA margin and solid increases
in orders and sales driven by continued growth in the Cor-
porate segment
The Corporate segment accounted for about 57% of Enter-
prise’s sales in 2017 compared to 50% a year ago
The Corporate segment continued to grow in all regions with
ClickShare now installed in approximately 350,000 meeting
rooms, up from 200,000 meetings rooms for 2016 40% of
Fortune 1000 companies now use ClickShare North America
and Europe registered the strongest sales growth During
the year, Barco expanded the ClickShare portfolio with the
introduction of a new higher-end version and continued to
extend its sales reach and channel network, adding distrib-
utors in the US and APAC markets In order to enlarge its
meeting room ecosystem, the company also entered into a
global collaboration agreement with Logitech
Enterprise division
With key sectors such as oil and gas and some emerging geo-
graphic markets investing less, Control Rooms’ order intake
was flat and sales declined, resulting in lower EBITDA With
the rear projection cube market maturing and related markets
awaiting the next generation of LCD displays, the launch of
Barco’s new LCD-based video wall, UniseeTM, in November
2017, was timely and met with positive initial feedback from
the market Management expects UniseeTM to begin contrib-
uting sales to Control Rooms in the second quarter of 2018
In addition, the company continued to invest in software and
workflow solutions which are gradually being introduced in
to the market
Management also decided to evaluate strategic options for
Silex and X2O, two non-strategic smaller activities in the
Enterprise portfolio As a result, Silex, an advanced chip
design activity, was sold to Anseribus NV in December 2017
Management plans to complete its analysis of X2O options
in the next coming months
A/102 Barco annual report 2017
IN MILLIONS OF EURO 2017 2016 2015CHANGE VS
FY16
Orders 245.8 216.3 221.2 +13.7%
Sales 243.2 234.6 216.0 +3.7%
EBITDA 27.5 24.6 19.4 +12.1%
EBITDA margin 11.3% 10.5% 9.0%
Healthcare achieved an 11 3% EBITDA margin for 2017, up
from 10 5% in 2016, driven by modest growth in sales for both
the diagnostic and the surgical segments Gross profit margin
expanded, reflecting positive mix-effects and continued value
engineering efforts Modality experienced softer demand
Orders indicated good uptakes in both the diagnostic and
the surgical segments, primarily in North America
In the diagnostic market, Healthcare strengthened its market
leadership and increased sales of its flagship Uniti® display
Surgical gradually made progress and the division is working
on expanding the platform by aligning with new partners to
fuel growth
During the year, Healthcare’s ‘focus to perform’ actions
included reducing investments in patient care solutions The
division is preparing to increase local Chinese production
of healthcare displays and enhance business development
capabilities to further penetrate this high-growth develop-
ing market In addition, the division is also making progress
in growing its installed base of diagnostic displays in Latin
America
Healthcare division
A/103Barco annual report 2017Management discussion
Key figures for the shareholder
Number of shares (in thousands): 13,064 13,057 13,016
PER SHARE (IN EURO) 2017 2016 2015
EPS 2.01 0.91 1.45
Diluted EPS 1.99 0.88 1.41
Gross dividend 2.10 1.90 1.75
Net dividend 1.47 1.33 1.31
Gross dividend yield (a) 2.4% 2.4% 2.8%
Yearly return (b) 13.9% 33.0% 8.5%
Pay-out ratio (c) 110.7% 225.1% 130.9%
Price/earnings ratio (d) 44.4 88.4 42.5
(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
A/106 Barco annual report 2017
Share price performance
Share price
0
20
40
60
80
100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PER SHARE (IN EURO) 2017 2016 2015 2014 2013 2012 2011
Average closing price 86.91 65.90 58.37 56.61 59.96 48.64 46.40
Highest closing price 95.31 80.50 64.26 59.59 69.95 58.75 59.50
Lowest closing price 78.94 54.37 53.54 50.60 52.58 36.52 31.20
Closing price 31 Dec 89.25 80.04 61.60 58.24 56.70 54.50 38.76
Average number of shares traded daily (e) 16.862 21,921 22,188.95 31,962.04 34.019 29.298 29.722
Stock market capitalization on 31 December (in millions) 1,166 1,045.05 801.60 757.00 736.50 696.40 494.37
(e) The average number of shares traded daily is taking into account the trades on the Lit Venues: Euronext as well as registered trades on alternative platforms BATS,
Chi-X, Turquoise and Equiduct
A/107Barco annual report 2017Shareholder information
Jan
uar
y
Feb
ruar
y
Mar
ch
Ap
ril
May
Jun
e
July
Au
gu
st
Sep
tem
be
r
Oc
tob
er
No
vem
be
r
De
ce
mb
er
0
20,000
40,000
60,000
80,000
120,000
100,000
Jan
uar
y
Feb
ruar
y
Mar
ch
Ap
ril
May
Jun
e
July
Au
gu
st
Sep
tem
be
r
Oc
tob
er
No
vem
be
r
De
ce
mb
er
2017 2016 2015 EuronextAll venues
Jan
uar
y
Feb
ruar
y
Mar
ch
Ap
ril
May
Jun
e
July
Au
gu
st
Sep
tem
be
r
Oc
tob
er
No
vem
be
r
De
ce
mb
er
Daily average shares traded
LIQUIDITY SOURCE 2017 2016 2015
Total yearly volume (shares)
Euronext 3,447,772 4,186,998 4,395,360
Lit venues (1) 4,299,723 5,633,738 5,724,749
All venues (2) 7,851,057 10,007,069 9,345,749
Daily average number of shares traded
Euronext 13,521 16,292 17,036
Lit venues (1) 16,862 21,921 22,189
All venues (2) 30,788 38,938 36,224
Total yearly volumes (turnover) in million euro
Euronext 262.09 354.33 235.77
Lit venues (1) 373.15 370.83 334.84
All venues (2) 684.20 652.48 547.33
Velocity 25.43% 31.40% 34.90%
Liquidity
Comment (1&2): Based on the Fidessa stock report: http://fragmentation fidessa com/ The numbers
referenced here take into account trades in the Lit-category The category “Lit venues” includes
Euronext and the alternative platforms BATS Chi-X, Turquoise and Equiduct All Venues includes
Lit-venues, the Systematic internalisers, off-book transactions and dark venues
A/108 Barco annual report 2017
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Barco share price 2017
Barco
60
80
100
80
100
120
140
Barco Bel 20 Next 150
Barco / Bel 20 / Next 150
Barco Eurostoxx 50 Eurostoxx technology Nasdaq - 100
Barco / Eurostoxx 50 / Eurostoxx Technology / Nasdaq - 100
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A/109Barco annual report 2017Shareholder information
Shareholder structure
Shareholders
A study of Barco’s global shareholdership on 31 December
2017 plotted almost 92% of the company’s shareholder
composition1 Identified institutional investors hold 72% of
all shares (versus 70% at the end of 2016), 5% being treasury
shares held by the company and 13% held by retail investors
(versus 14% at the end of 2016)
Stable shareholder structure
All in all, Barco’s main shareholder structure remained stable
in 2017, with no material changes in the +3% positions
Barco’s institutional ownership increased, with institutional
investors holding more than 9 3 million shares, led by
increases in ownership in the Rest of Europe category and
in Belgium
Value-oriented shareholders remained the second-largest
category within Barco’s institutional shareholder base How-
ever, there was a decline in proportional representation, to
23% of identified institutional shares The growth-oriented
investors position increased to +12% of institutional owner-
ship
Geographic distribution
Belgium remains the dominant investment region in Barco’s
institutional shareholder base, with a strong proportional
representation versus peers and industry averages
The Rest of Europe investors reversed the selling seen over
2016 and added shares with purchases out of London, UK,
Frankfurt, Germany This was partly countered by selling
activity out of Geneva, Switzerland and United States
Investment style
While value-oriented shareholders remain the second largest
category within Barco’s institutional shareholder base, once
more there was a decline in proportional representation, to
23% of identified institutional shares at the end of Decem-
ber 2017 (-3 7pp) The share price peak(s) seen throughout
the year may have prompted value investors to book some
profits
Meanwhile, more bullish activity from growth-oriented
investors was noted, suggesting that investors are able to
see attractive entry points, given the growth profile of the
company
The level of passive index ownership in Barco has increased
(+1 1pp) to 6 2% of identified institutional shares, moving
closer to the averages seen across Nasdaq’s technology
clients (17 9%)
Concentration
Concentration level among Barco’s top 10 investors reduced
over this analysis period, following a couple of divestments,
while concentration within the top 25 remained relatively
stable, and increased slightly among the top 50 group of
investors
The categories now account for:
• Top 10: 50 4% (-1 2pp)
• Top 25: 65 2% (+0 0pp)
• Top 50: 72 4% (+0 4pp)
Compared to the mid cap client benchmark, Barco’s
concentration levels are slightly above the average observed
in the benchmark
Norges Bank (the Central Bank of Norway)
Templeton Investment Counsel, LLC
3D NV
Barco NV
Public
TOTAL
(1) Shareholder analysis performed by Nasdaq Advisory services in January 2018
A/110 Barco annual report 2017
Institutional 72%
Retail 13%
Company-related 5%
Brokerage/trading 2%
Miscellaneous 8%
Belgium 47%
United States 23%
Luxembourg 7%
Norway 6%
France 6%
Rest of Europe 11%
Rest of world <1%
Value 23%
Growth 12%
GARP 9%
Index 6%
Hedge fund 1%
Other 49%
Ownership of Barco’s shares 2017 (per 31 December 2017)
18.33% Michel Van de Wiele NV
5.04% ACF IV Investment SARL
4.49% Norges Bank (the Central Bank of Norway)
4.70% Templeton Investment Counsel, LLC
3.94% 3D NV
5.40%
58.10%
Barco NV
Public
100.00%TOTAL
A/111Barco annual report 2017Shareholder information
Shareholder remuneration
Dividend
The Board of Directors decided to recommend that the
general assembly pay a dividend of 2 10 euro (gross) per share
over 2017 (compared to 1 9 euro over 2016) This is 1 47 euro
net, on a withholding tax of 30%
At 2 10 euro, the payout ratio is 110 7% and the gross dividend
yield is 2 4%
Dividend policy
The company confirms its dividend policy to grow the divi-
dend in line with the long-term performance and evolution
of the company 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
Ex-date: Monday, 7 May 2018
Record date (+1): Tuesday, 8 May 2018
Payment date (+1): Wednesday, 9 May 2018
A/112 Barco annual report 2017
Investor relations
The year in retrospect: evolution of the share price
Barco achieved a solid financial performance in 2017: while
sales remained flat, we attained a good uptake in profits
on flat sales Fueled by stable intermediary results, a num-
ber of ‘focus to perform’ proofpoints and new dynamics,
stakeholder confidence increased in 2017, which was clearly
reflected in our share price: the Barco share price rose by
12%
Strong ‘focus to perform’ quarter
Opening at 80 euro, the share price fluctuated between 78
euro and 96 euro throughout 2017 to finally close at 89 euro
The year 2017 started slow until the full-year results were
published The positive 2016 annual results – with solid sales
growth and improved profitability – were well-received, which
led to share price rises The ‘focus to perform’ message –
including the news about the divestment of our lighting
activity – and a successful Capital Markets Day, led to a steep
climb in March and April to reach a peak of 96 euro at the
end of April As Q1 results were more modest and following
the dividend payout, the Barco share price leveled out – in
line with general market trends – to close at 85 euro at the
end of Q2
Slow summer and strong September
The summer of 2017 was particularly slow, which may be
attributable to a mixed update on the half-year results At the
end of August, when the share price had fallen back down
to the January level, the stock started a remarkable upsurge
in September, triggered by overall renewed attention, rera-
tings and a new initiation by Berenberg With comforting Q3
results, the share price remained flat in Q4 to end at 89 euro,
the best closing price in the last 17 years
The yearly return including the dividend is 14% It is a positive
outcome for the sixth consecutive year and once again a
great return that outperforms all main international indices
Market cap: gradually moving up
The market capitalization on 31 December 2017 was 1166 0
million euro, up 11 6% up compared to 2016 (1040 million
euro) The lowest market capitalization in the year was at
1031 3 million euro (29 August 2017) while the highest was
at 1245 1 million euro (5 April 2017)
A/113Barco annual report 2017Shareholder information
Backed by over 85 years of experience, Barco is a strong
brand that is known the world over for its technology leader-
ship in three healthy and solid markets: entertainment,
enterprise and healthcare The solutions we deliver to these
markets are mostly mission-critical: there is a real need for
the high-quality, utterly reliable technology that we are able
to provide, thanks to our experience and well-developed
technological skills
Solid financial results
Barco has established global leadership positions To achieve
that aim, we have significantly streamlined our organization,
sharpened the focus of our activities and developed more
channels into the market, thus extending our customer base
In 2017, under the umbrella of the strategic ‘focus to perform’
program, Barco decided to sharpen its company profile As
a result, it delivered a healthier result on the back of a flat
organic topline result
We significantly enhanced our gross margins, thanks to value
engineering, smarter sourcing and a good product mix Our
cash flow recovered nicely in the second half of the year
Over the years, Barco has always followed a cautious course
in managing its financials and enjoys year-on-year net cash
positive results
Focused to perform
The new management team – new CEO, new CFO, new
Chief Human Resources and new General Manager of the
Enterprise division that came on board in 2016 – all with
impressive track records in leading international companies
– works closely with the existing leadership team to define
the course of the company in the coming years
Confident that Barco has all the required assets to further
deliver sustainable profitable growth, we will continue to
sharpen our focus on performance in 2018 and beyond
While putting together a balanced portfolio of strategic
growth initiatives, we will concentrate on improving the
performance of our core businesses, i e striving to reach
execution – operational and commercial – excellence and
nailing down profitability In this way, Barco will create even
more value for its customers as well as its shareholders.
Shareholder trust
Our sound strategy, strong business model and our solid
financials inspire the trust and confidence of our share-
holders Barco therefore has a very stable international
shareholder base with a predominance of value-oriented
investors Since 2015, both Van de Wiele NV and 3D NV are
represented in the Board of Directors Together, they now
own 22% of Barco’s shares Year after year, our shareholders
see consistent growth in the dividend, which reflects our
increasing profitability and overall growth
Barco's investment case
A/114 Barco annual report 2017
Analysts covering Barco
ABN AMRO Bank Marc Hesselink
Bank Degroof Petercam Stefaan Genoe
Flemish Federation of Investors and Investor Club Gert De Mesure
ING Marc Zwartsenburg
Berenberg Trion Reid & Anna Patrice
KBC Securities Guy Sips
Oppenheimer Andrew Uerkwitz & Paul Dean
Announcement of results 4Q17 and FY17 Thursday 8 February 2018
Trading update 1Q18 Wednesday 18 April 2018
Annual general shareholders meeting Thursday 26 April 2018
Announcement of results 1H18 Thursday 19 July 2018
Trading update 3Q18 Wednesday 17 October 2018
Barco share BAR ISIN BE0003790079
Barco VVPR-strip BARS ISIN BE0005583548
Reuters BARBt BR
Bloomberg BAR BB
Financial calendar 2018
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
A/115Barco annual report 2017Shareholder information
For Barco, 2017 was a year of gradual change and steady
progress. To guide us and enable us to thrive in today’s
rapidly changing world, we formulated and began execut-
ing a clear strategy. Focused on innovation, performance
and outcome-based solutions, our renewed strategy also
includes a resolute choice to go for sustainable impact,
because we believe that sustainable business is smart
business.
This sustainability report, which is an integral part of our
2018 annual report as well as a self-contained assessment,
underpins our commitment to sustainability. It provides a
comprehensive overview of our ambition, strategy and
roadmap in the field of sustainability and zooms in on our
results.
Say.Do.Care.Barco Sustainability Report 2017
B/2Barco annual report 2017Introduction & ambition statement
Introduction and ambition statement
A milestone year
2017 has been a major milestone in our journey towards sus-
tainability, in many ways:
• Sustainability became an integral part of our strategy, in line
with our values and more specifically with the ‘we care’ value.
We strongly believe that growing our company goes hand in
hand with helping our people and the communities around
us thrive, while safeguarding our planet. As a result, we are
giving sustainability a central role in our organization and in
our strategy.
• Under the ‘Sustainable Impact Plan’, we are now firmly
embedding sustainability into every division and process.
We are fully aware that we cannot realize our ambitions on
our own. We count on the help and full engagement of our
employees and business partners.
• We defined and set performance measures and targets for
the most important (material) topics.
• The governance of sustainability-related initiatives has
been put into a structural shape that ensures continued
follow-up and progress. Our roles and committees at both
the executive and management level will spearhead a program
to raise awareness and identify sustainability challenges and
opportunities.
A continuous journey
Today, we have solid foundations in place to achieve our ambi-
tious sustainability objectives in the coming years. Sustainability
is, of course, a continuous journey of learning and improving.
Yet, we are confident that every step we take will bring us closer
to being a truly sustainable company – which is critical for every
business to be successful in the long run.
B/3 Barco annual report 2017
Barco’s sustainability ambition statement
In line with our ambition to fully integrate sustainability into our corporate
DNA, we at Barco have launched our ‘Sustainable Impact Program’, aiming
for sustainability leadership on three levels: planet, people and communities.
1. We will lower our own environmental footprint and those of our
customers.
2. We will prepare our people for future-proof and sustainable employability
by energizing, engaging and inspiring them. We also empower our
employees to constantly explore more sustainable ways of working.
3. We will take up our responsibilities and play an active role in our ecosystem
by safeguarding ethical business standards both inside Barco and in
the relationships with our stakeholders, and engaging with our local
communities by providing underprivileged people across the world with
access to the innovation society through knowledge and resources.
Barco is ready to gear up, move forward and take the lead towards a more
sustainable future.
Jan De Witte,
Barco CEO
B/4Barco annual report 2017Introduction & ambition statement
Barco in a changing world
Our world is changing at dazzling speed, driven by a series of megatrends,
i.e. large global trends that are accelerating economic, environmental,
health, safety and social challenges. As these trends, which interconnect
in many ways, largely impact our customers’ businesses – as well as ours,
it is key to understand them and be on top of them. Below, we briefly
describe four main trends that are shaping the world of Barco and of its
customers. In addition, we illustrate how our solutions and services can
help our customers address the opportunities and challenges driven by
these four main trends.
#1 DIGITAL TRANSFORMATION
The combination of the internet, mobile and connected
devices, data analytics, cloud computing, and machine
learning is shaking up our lives and businesses. Even more,
the pace of change is increasing exponentially. Every new
technological advancement brings vast opportunities for
organizations to become more productive and relevant, yet
presents substantial risks at the same time.
Our impact:
• ClickShare and our projectors foster collaboration in
meeting rooms.
• Our learning environment helps engage today’s digital-
native students.
• Barco video walls help organizations visualize – and,
consequently, analyze – data.
• Nexxis helps surgeons share video and audio in
operating rooms.
#2 INDIVIDUALISM
Increasing globalization and digitization give people a broader
perspective of the world, with numerous possibilities to work,
learn, live and play. As a result, people – be it consumers,
employees, students, patients, etc. – become more demand-
ing. They crave freedom, they want to be recognized as
individuals with personal needs and they are always on the
lookout for ways to express themselves and enjoy life.
Our impact:
• Barco projectors ensure amazing, customized
experiences.
• ClickShare and our learning platform invite people to
share their own views.
• Our growing focus on services instead of products
helps us give our customers what they want and when
and how they want it.
• Our SaaS-platform meets the need for outcome-based
solutions.
B/5 Barco annual report 2017
#3 CHANGING DEMOGRAPHICS
The world’s population is aging, mainly due to increased life
expectancy in developed regions. Developing countries,
for their part, are struggling with fierce population growth.
Changing demographics is poised to be one of the most
significant social transformations of the 21st century. It will
have major implications for nearly all sectors of society, and
not in the least for healthcare.
Our impact:
• Barco’s diagnostic display solutions help radiologists
make accurate diagnoses while raising productivity.
• Our surgical solutions help surgeons work more
effectively, with better outcomes.
#4 CLIMATE & RESOURCES UNDER PRESSURE
Climate change is expected to increasingly threaten natural
ecosystems and their biodiversity, slow economic growth,
threaten human health, etc. In addition, natural resources
such as water and fossil fuels are being depleted. Creating a
more sustainable world may well be the biggest challenge
of today’s society.
Our impact:
• ClickShare and weConnect enable video conferencing
and remote meetings, thus helping organizations reduce
their carbon footprint.
• Our laser-illuminated projectors reduce energy
consumption and avoid lamp swaps (i.e. less transport
of lamps and less waste).
• Barco opts for sustainable design (material use, energy
efficiency, packaging and end-of-life optimization)
across its product portfolio.
Strengthening data and systemsprotection at Barco
In addition to opportunities, our digital, increasingly inter-
connected society is ushering in new risks too – for Barco as
well. As software, connected devices and services comprise
a larger share of our product portfolio, we are also collecting
more customer data. That means we have to comply with
data protection regulations, including the upcoming EU
GDPR. Barco is working hard to prepare for the introduction
of GDPR in May 2018.
In addition, we have to protect our systems, networks and
data from the accelerating threat of cyberattacks. We are
fully aware of these threats and take measures to withstand
these disruptions. To underpin our commitment, we are cur-
rently implementing an information security management
system according to the ISO27001 standard. Certification in
this standard will prove that we have every process in place
required to deliver secure solutions. In a first phase, we’re
working to get our ClickShare solutions certified.
B/6Barco annual report 2017Introduction & ambition statement
Our approach to materiality
1. Outside-in perspectiveWe analyzed a vast range of internal and external data, includ-
ing trend reports and other documents created by peers and
competitors, sector associations and sustainability network-
ing organizations (CDP, SASB, GRI, Sustainalytics, United
Nations Sustainable Development Goals), as well as internal
documents. This research led to a container of over 50 issues.
2. Consultation roundWe surveyed a select group of Barco employees (sustain-
ability ambassadors) to determine the issues they thought
were most important and relevant to Barco (priority setting).
3. Landing phaseFinally, the Executive sustainability steering committee deter-
mined the impact of each of the points on Barco’s success
(see page B/59).
Result: Barco’s material issues
The result of this process is a set of issues that stand out as
‘material’ – i.e. important - for Barco’s sustainability strategy.
It features 10 issues that can be arranged under our three
sustainability pillars:
Planet
People
Communities
For more information on how Barco engages with its stake-
holders to determine risks and points of attention, we refer
to the ‘Stakeholder engagement’ segment on pages B60
and B62 of this report.
Materiality assessmentBarco wants to focus its sustainability efforts on the issues that are most
urgent and relevant to its stakeholders, its business and the technology
sector. A materiality assessment helped us identify and prioritize these
issues, as well as the risks involved, from economic, societal and
environmental points of view. Our approach involved three steps and
resulted in a materiality matrix.
B/7 Barco annual report 2017
Cluster of the material topics under our three sustainability pillars
Planet People Communities
• Climate change /
Greenhouse gas emissions
• Energy efficiency of products
& operations
• Circular economy
• Learning & development
• Employee safety
• Employee health / care
• Diversity / equal opportunities
• Supplier auditing / assurance
• Community engagement
• Business ethics
U.N
. S
US
TA
INA
BL
ED
EV
EL
OP
ME
NT
GO
AL
SM
AT
ER
IAL
ISS
UE
SO
UR
SU
ST
AIN
AB
ILIT
Y P
ILL
AR
S
B/8Barco annual report 2017Barco’s corporate and sustainability strategy
Planet
People
Communities
Barco’s corporate and sustainability strategy
Our mission
Barco’s mission is to enable bright outcomes by transforming
content into insight and emotion. To achieve that mission, we
offer best-in-class networked visualization solutions (hard-
ware and software) and related services.
Our strategy
Inspired by our fast-changing world in which technology
introduces new ways to live, play and work, Barco updated its
mission statement and its strategy in 2017. Both now include
a commitment to outcomes. The Barco DNA, which will
guide us on our path toward continuing success, includes
three intertwined pillars:
Lead by innovation
Focus on performance
Offer outcome-based solutions
We enable bright outcomes
by transforming content into
insight and emotion.
B/9 Barco annual report 2017
Our sustainability stategy
We want to execute on our strategic pillars in a sustainable
way, and increase our focus on the effects they have on our
planet, people and communities.
• Planet: all initiatives that reduce our environmental
impact and that help reduce those of our customers.
• People: all initiatives targeted to encouraging
sustainability employability among all (future)
employees.
• Communities: all initiatives targeted towards the
development of our own Barco community, in relation
to our business partners, stakeholders, and the
communities in which we live and work.
Our seven values
For years, seven core values have guided us in everything
we do. In 2017, we changed ‘we care about our people’
into ‘we care’ to underpin the importance of our sustainable
impact program.
– We lead by innovation
– We delight our customer
– We deal openly and ethically
– We encourage team play
– We are accountable
– We trust each other
– We care
Planet
People
Communities
B/10Barco annual report 2017Barco’s corporate and sustainability strategy
Measuring our sustainability performancePage B/11
Planet
Page B/21
People
Page B/37
Our Sustainability Impact Plan (SIP)
B/11 Barco annual report 2017
To firmly embed sustainability into every division and process,
we drafted the Barco ‘Sustainability Impact Plan’ (SIP). It
helps us organize, prioritize and facilitate our sustainability
efforts, measure our performance and diligently manage
our actions.
Barco’s Sustainability Impact Plan considers the fact that a
successful sustainability program contains:
• a clear strategy and clear focus domains;
• a system that measures performance and tracks it
against defined targets and ambitions;
• a roadmap towards leadership in all focus domains;
• the right leadership, governance and culture to drive
every initiative.
Measuring our sustainability performance
We use two different types of indicators to measure our sus-
tainability performance:
• 4 key performance indicators (KPIs), balanced across
relevant sustainability domains (people, planet and
community) and material topics, help us measure and
set targets for Barco’s sustainable development.
• 25 performance indicators (PIs), i.e. descriptive
statistics, help us measure and track performance on
sustainability focus domains.
The following summary tables give an overview of the per-
formance indicators and our progress since 2014, when we
started measuring our performance. Note that we are only
at the start of our sustainability journey. Month after month
and year after year, we are learning, fine-tuning and sharp-
ening our approach.
B/13 Barco annual report 2017
PLANET KPIs UNIT 2014 2015 (BASELINE) 2016 2017* TARGET 2020**
GH
G-
EM
ISS
ION
S
GHG-emissions
operations (1)***
tCO2e / mio € 94.4
excl. end-user, incl. Defense & Aerospace division
75.4excl. end-user and Defense & Aerospace division
67.7 TBD 2018 -20%
Eco-performance
new products (2)
# / score Barco will start eco-scoring products
from January 2018 onwards
All eco-scoredNo D25% A
Energy footprint
products/delivered
capability (3)
Watt / delivered
capability
NA 0.19 0.18 TBD 2018 -25%
GHG-emissions
products, end-user
emissions
tCO2e / mio € NA 727.1 726.5 TBD 2018
GHG-emissions,
scope 1
tCO2e / mio € 5.8 5.1 4.2 TBD 2018
GHG-emissions,
scope 2
tCO2e / mio € 6.4 5.4 5.0 TBD 2018
GHG-emissions,
scope 3 (incl. end-
user emissions)
tCO2e / mio € 82.2
(end-user scope:healthcare)
792.0(end-user scope: all divisions)
785.0(end-user scope: all divisions)
TBD 2018
Total
GHG-emissions
(scope 1+2+3)
tCO2e / mio € 94.4 802.5 794.2 TBD 2018
Planet (key) performance indicators
* 2017 data will be available in June 2018. We will update our progress in the online version of this Sustainability Report in the course of 2018.
** Barco will explore longer term (2025) carbon emission targets in 2018.
*** See page B/16.
B/14Barco annual report 2017Our Sustainability Impact Plan (SIP)
PLANET KPIs UNIT 2014 2015 2016 2017*
EN
ER
GY
MA
NA
GE
ME
NT
Energy intensity (MWH / FTE) 14.2 15.6 14.6 TBD 2018
(MWH / mio €) 46.0 44.2 39.9 TBD 2018
% energy from renewable sources % NA NA 60% 60%
WA
ST
E
Hazardous
industrial waste
% NA NA 0.1% TBD 2018
Recycling rate % NA NA 69% TBD 2018
* 2017 data will be available in June 2018. We will update our progress in the online version of this Sustainability Report in the course of 2018.
B/15 Barco annual report 2017
KPIs in the ‘planet’ domain:
• GHG emissions (1): We started measuring the GHG emis-
sions of our own operations (logistics, infrastructure and
mobility) in 2015, using the relative total carbon footprint
(tCO2e / mio € turnover) as the standard unit.
• The energy footprint of our products (2): In 2015, we
began measuring the GHG emissions of our products
(limited to the energy consumption of the use phase),
which is one of the main drivers of Barco’s full product
environmental footprint.
• Eco-performance of new products (3): From 2018
onwards, Barco will assess the sustainability performance
of its products in various domains (material use, energy
efficiency, packaging and end-of-life optimization) and
summarize the results in an ecoscore (A, B, C or D). Every
new product launched will be assessed (see the ‘Green
customer solutions’ section pages B/31 - B/36).
Read the ‘planet’ section for more details about our performance, policies and past and future initiatives in this domain.
The GHG emissions of our own oper-
ations fell by 10% between 2015-2016.
Our target is to reduce them by 20% by
2020 (using 2015 as a baseline).
The energy footprint of products per
delivered capability decreased by 6%
between 2015-2016. We aim to reduce
it by 25% by 2020.
By 2020, we want at least 1 in every 4
new products that we launch to have
an A eco-performance score.
-25% 25%-10% -20%
A
B/16Barco annual report 2017Our Sustainability Impact Plan (SIP)
PEOPLE KPIs UNIT 2014 2015 2016 2017 TARGET 2020
EM
PL
OY
E E
NG
AG
EM
EN
T
employee engagement
(employee NPS) (4)
# NA * 17 ** We will formulate a
target on employee
engagement in 2018.
iGemba (5):
# of improvement sugg.
# of improvement sugg.
per operator
% implementation
#
#
%
4685
6.5
87%
5332
6.7
86%
6610
8.4
84%
6751
8.6
85%
LE
AR
NIN
G &
DE
VL
EO
PM
EN
T % of employees in internal
mobility
% 2.2% 2.9% 3.3% 2.7%
Avg hours L&D / employee
Turnover / Outflow -
voluntary
#
%
19.5
5.8%
20.7
5.6%
17.2
6.0%
14.7
7.7%
EM
PL
OY
EE
HE
AL
TH
& S
AF
ET
Y
% of people in LT illness
(> 1 yr)
% 1.1% 0.9% 0.7% 0.7%
Accident rate
Severity rate
Frequency rate
Safety index
#
#
#
0.03
2.12
2.72
0.01
1.58
6.33
0.16
8.25
0.3
0.03
4.16
1.39
DIV
ER
SIT
Y &
INC
LU
SIO
N
% women
Barco overall
% women mgmt. –
Hay grade+18
Avg age of active Barco
payroll employees
%
%
#
28.8%
11.6%
44
28%
14%
43
28.2%
14.5%
42
28.4%
15.2%
41
People (key) performance indicators
* Employee engagement surveys done bi-annually.
** In 2018, Barco will put in place a revised employee engagement and enablement measuring system.
B/17 Barco annual report 2017
(K)PIs in the ‘people’ domain:
• Employee engagement (4): Every two years, we measure
employee engagement by administering a structured
survey. In the 2016 survey, we received an employee net
promoter score1 of 17. We are currently reviewing our
employee engagement measuring method and will set
long-term targets for employee engagement scores in the
course of the 2018.
• iGemba (5): In 2009 we launched the iGemba project,
a global, operator-driven program aimed at installing a
culture of continuous improvement across all Barco’s oper-
ating sites. The number of improvement suggestions (per
operator) is a leading performance indicator for employee
(i.e. blue-collar operator) engagement.
Read the ‘people’ section for more details on our performance, policies and past and future initiatives in this domain.
In 2017, iGemba triggered 6,751 suggestions for
improvement, i.e. 8.6 suggestions per operator.
In giving Barco an employee net promotor score1
of 17, our employees agree that Barco is a great
place to work.
176,751
1 eNPS indicates how likely it is that Barco employees would
recommend – Barco – as a great place to work to their peers
(% promoters - % detractors)
B/18Barco annual report 2017Our Sustainability Impact Plan (SIP)
Communities (key) performance indicators
* Customer satisfaction surveys done bi-annually. The last one was performed in 2016.
** No employee ethics training in 2014-2015.
*** Barco did not track its community engagement efforts quantitatively before 2017.
COMMUNITY KPIs UNIT 2014 2015 2016 2017
CU
ST
OM
ER
SA
TIS
FA
CT
ION
Customer loyalty index (6) # 87 * 83 *
ET
HIC
S &
CO
MP
LIA
NC
E
Employees educated in (Code of) Ethics (7) % NA ** 92% 92%
Supplier compliance with RBA (EICC) Code of
Conduct (8)
% 100% core 100% core 100% core 100% core
Employees covered by collective agreements % 100% 100% 100% 100%
CO
MM
UN
ITY
EN
GA
GE
ME
NT Community investment (9) € NA *** 125,000
Community involvement (10) # heads NA *** +600 heads(20% of total workforce)
B/19 Barco annual report 2017
(K)PIs in the ‘communities’ domain:
• Customer satisfaction survey (6): Barco holds a bi-annual
customer satisfaction survey across divisions and types of
customers (partners vs. end-customers). The last survey
was held in 2016.
• The penetration of ethics and compliance (07) (08): By
measuring the percentage of employees educated in our
Code of Ethics and the percentage of suppliers that com-
ply with the RBA (EICC) Code of Conduct, we can gauge
acceptance of the codes of conduct that guide us in our
activities.
• Community investment and involvement (9) (10): In 2017,
we started measuring our community engagement efforts
both in amount of funds contributed and the number of
Barco employees involved in community engagement
efforts globally.
Read the ‘communities’ section for more details on our performance, policies and past and future initiatives in this
domain.
With a customer loyalty score of 83, we far exceed
the industry benchmark (69).
Over 600 Barco employees were involved in com-
munity engagement projects in 2017.
600+83
B/20Barco annual report 2017Our Sustainability Impact Plan (SIP)
MEASURING OUR CARBON FOOTPRINT
Methodology • Bilan Carbone® methodology
• Compliant with ISO 140064
standard
• Sources of emission factors:
Emission factors from scientific
sources, ADEME, GHG Protocol,
IEA, supplier’s specific for electricity
Scope • Technical: All GHG such as
carbon dioxide (CO2), methane
(CH4), nitrous oxide (N2O),
refrigerants (HFC’s, PFC’s, CFC’s),
are converted into CO2 equivalent
using Intergovernmental Panel on
Climate Change (IPCC) 100-year
global warming potential (GWP)
coefficients
• Boundaries: Operational (vs. equity)
approach, as it better defines the
boundaries of influence
• Geographical scope: main
production facilities and offices
in Belgium, China, Italy, Germany,
India, Norway, Taiwan and US,
accounting for 85% of Barco’s total
headcount (3,006 FTEs)
Reporting
period
• FY 2016
• The 2017 results will be available
in June 2018; the report will be
updated accordingly
Baseline • For targets and performance
comparison, Barco selects FY 2015
as baseline
Reporting • Annual reporting to the Carbon
Disclosure Project (CDP)
Barco’s total carbon footprint
in 2016 (absolute)
881KtCO
2e
Barco’s total carbon footprint
in 2016 (relative to turnover)
794.2tCO
2e / mio € turnover
Planet
As a global company, we are aware of the impact our oper-
ations have on our planet. We are therefore working hard to
minimize the ecological footprint of our operations and our
products. More than meeting the regulatory requirements in
each country, we take voluntary steps to proactively comply
with the most stringent rules and guidelines.
B/21 Barco annual report 2017
OWN OWN
802.5 794.2
ENDUSER
ENDUSER
-1%
-10%
Total carbon footprint
Logistics, mobility, infrastructure and end-user emissions:
these are the four main sources of CO2 emissions at Barco.
On this page, we share some numbers on our total carbon
footprint. We will then zoom in on more detailed results,
targets and actions for each of logistics, mobility and infra-
structure emission sources. End-user emissions are discussed
in the ‘Green customer solutions’ section.
Share of carbon footprint across our activities
Own emissions
Logistics 6%
Mobility 2%
Infrastructure 1%
Total carbon footprint 2015-2016 (tCO2
/ mio €)
End-user emissions 91%
Own emissions 9%
100
200
300
400
500
600
700
800
2015 2016
B/22Barco annual report 2017Our Sustainability Impact Plan (SIP)
Carbon footprint of own emissions2015 – 2016, incl. 2020 target
All figures in tCO2e / mio € turnover
2015
75.4
TARGET2020
60.3
2016
67.7
LOG
MOB
INFR
INFR
10
20
30
40
50
60
70
LOG
MOB
INFR
-10%
-20%
OUR 2016 PERFORMANCE
-10%
Greenhouse gas intensity, excl. end-user emissions
decreased by 10% over 2016.
By 2020
-20%
We want to reduce greenhouse gas intensity for logistics,
mobility and infrastructure, excl. end-user emissions, by 20%
by 2020 (compared to 2015).
Carbon footprint per emission category
The following sections detail the performance, past initiatives
and targets for our own emissions (i.e. emissions related to
our own activities) in three main emission categories : logis-
tics, mobility and infrastructure. They encompass scope 1,
2 and part of scope 3 (logistics) emissions. End-user emis-
sions are discussed more in detail in the ‘Green customer
solutions’ section.
Logistics Mobility
Infrastructure
3 CATEGORIES
B/23 Barco annual report 2017
1. LOGISTICS
• 34% of Barco’s total tkms (tons * distance shipped) is trans-
ported over deep sea corridors, while deep sea transport is
responsible for less than 1% of the CO2 footprint in logistics.
Breakdown of logistics emissions by source (2016)
Air (long) 60%
Air (middle) 2%
Air (short) 1%
Maritime 34%
Road 3%
Rail 0%
Air (long) 89%
Air (middle) 7%
Air (short) 3%
Maritime 1%
Road 0%
Rail 0%
% ton.kms (tons * distance transported) % tCO2 footprint
Barco’s carbon footprint
for logistics in 2016
43.3tCO
2e / mio € turnover
The share of logistics in Barco’s own
CO2 emissions in 2017
63%
• 60% of Barco’s total tkms is transported over long-haul air,
causing 89% of Barco’s CO2 footprint in logistics.
B/24Barco annual report 2017Our Sustainability Impact Plan (SIP)
PROGRESS
-13%
Reduction in relative CO2 emissions (tCO
2e / mio € turnover)
for logistics between 2015 and 2016.
INFR
10
20
30
40
50
Carbon footprint of logistics emissions2015 - 2016, incl. 2020 target
All figures in tCO2e / mio € turnover
2015 TARGET2020
2016
-17%
-13%
49.8 39.943.3
How?
A solid plan to optimize transport worldwide helped us cut
logistics emissions in recent years. In 2016 (and 2017) Barco
focused on the following measures:
• Changing our transportation modes: We increasingly
adopt more carbon-friendly transportation modes, swap-
ping long-haul air transport for sea cargo transportation.
That shift requires building a more stable and predictable
business supported by increased supply chain capabilities in
terms of planning, forecasting and inventory management.
We made substantial progress in 2016 and 2017, which led
to considerable modal shifts on the following corridors:
+40% cargo shipped from India to Belgium by sea
instead of plane (from 0% > 40%);
+11% cargo shipped by sea from China to US (from
55% > 67%).
• Designing products for the supply chain: When design-
ing new products, we try to minimize their volumes and
chargeable/actual weights.
E.g. our new UDX projector is 52% more compact
than the HDF FLEX projector, with 26% smaller
shipment dimensions.
B/25 Barco annual report 2017
• Packaging for logistics: By optimizing our packaging,
we can substantially raise transport efficiency too. These
efforts have yielded the first results (non-exhaustive list) in
2016 and 2017:
Elimination of plastic ‘sea-bags’ for deep sea cargo
transportation
We increasingly choose cardboard packaging and
removed foam as buffer material when transporting
our dental displays
ClickShare CS100 and CSE200 are now shipped in
smaller packages (- 30%)
MID-TERM TARGET (2020)
Barco aims to further execute on its carbon reduction road-
map in logistics in the period 2018 – 2020.
-17%
By 2020, we will cut logistics emissions (tCO2 / mio € turn-
over) by 17%.
How?
• Continuing the modal shift: i.e. replacing air freight with
transport by ship (+20%), train +5%) or truck (+5%).
• Reorganizing the supply chain network to accommodate
more localization: sourcing, manufacturing, repairing and
providing services locally, near the customer.
• Designing packaging and products for the supply chain:
reducing the volume/weight of high-running appliances
by giving clear impulses to new product introductions.
B/26Barco annual report 2017Our Sustainability Impact Plan (SIP)
Barco’s carbon footprint
for mobility in 2016
16.99tCO
2e / mio € turnover
The share of mobility in Barco’s
own emissions
26%
2. MOBILITY
PROGRESS
-1%
Decrease in relative emissions (tCO2e / mio € turnover) for
mobility between 2015 and 2016.
How?
• Updating our car fleet policy (since 2016) does pay off in
most countries. By gradually replacing our petrol-fueled
cars with CNG and electric vehicles and sensitizing employ-
ees to eco-driving, we reduced the relative emissions of
our own fleet by 15% between 2015 and 2016.
• Emissions from business travel and home-work commut-
ing, however, rose by 1% and 5% respectively. We will work
hard to decrease our footprint in the coming years (see
actions below).
Breakdown of mobility emissionsby source (2016)
Business travel 67%
Home-work commuting 16%
Company cars 15%
B/27 Barco annual report 2017
MID-TERM TARGET (2020)
-18%
By 2020, we will cut relative emissions for mobility
(tCO2 / mio € turnover) by 18%.
How?
• Encouraging staff to use our virtual meeting room infra-
structure to cut back on business trips or help them plan
business trips smarter.
• Changing our business travel policy: for short distances
(<600 km), Barco will promote train travel instead of flights.
In addition, we will look for ways to further cut down on
the number of flights for business travel (-8% by 2020).
• Promoting our mobility plan: the mobility plan that we
introduced in 2016 should motivate Belgian employees to
come to work in eco-friendlier ways. We continued this in
2017 and hope to reap the benefits in 2018.
• Facilitating carpooling: by making carpooling ‘easier’ (infra-
structure changes, a digital carpool calendar, transparency
in cost benefits, etc.), we want to strengthen the carpooling
community that we launched in 2017.
• Promoting the use of bikes: in 2017, we further reinforced
the infrastructure, safety and incentives for bikers by provid-
ing a standard bicycle allowance and organizing a bicycle
group purchase in the Belgian HQ. In 2018, we will put
more emphasis on even better infrastructural and safety
support and raise the financial bicycle allowance.
• Reaping the benefits of OneCampus: as every Belgian
Barco employee will work at OneCampus from early 2018
onwards, we expect fuel emissions to drop significantly.
• Updating our new car policy: we will keep replacing our
petrol-fueled cars with CNG and electric vehicles in the
coming years.
B/28Barco annual report 2017Our Sustainability Impact Plan (SIP)
Barco’s carbon footprint
for infrastructure in 2016
7.43 tCO
2e / mio € turnover
The share of infrastructure in Barco’s
own emissions
11%
3. INFRASTRUCTURE
• 72% electricity, which we use as our main energy source
(electricity accounts for 55% of all energy needed).
• 28% other sources: gas for heating, fuel use (excl. company
cars), refrigerant gas leakages from cooling equipment (air
conditioning).
Breakdown of infrastructure emissions by source (2016)
Electricity 72%
Other sources 28%
B/29 Barco annual report 2017
PROGRESS
-6%
reduction in average energy consumption per FTE (14.6
MWh/FTE) between 2015 and 2016.
-10%
reduction in relative energy consumption (per turnover)
between 2015 and 2016
61%
of electricity consumption is provided by green electricity
with certificates of origin (mainly Belgium and Italy).
How?
• Investing in energy-efficiency measures: we replaced old
lighting systems with LED solutions or resolutely chose
LEDs for new offices (Belgium, Italy, US). One Campus
features energy-efficient adiabatic cooling.
• Investing in renewables across the globe: in 2017, we
installed photovoltaic panels at One Campus and in our
manufacturing facilities in China. After positive feasibility
study results, we will also equip our facilities in Italy with
photovoltaic panels in 2018. In parallel, we are executing
a windmill feasibility study for our OneCampus site in
Kortrijk.
• Creating awareness campaigns to engage employees in
energy efficiency and change their behavior in the work-
place (Italy, Taiwan and India).
MID-TERM TARGET (2020)
-67%
By 2020, we will cut relative emissions for infrastructure
(tCO2 / mio € turnover) by 67%.
How?
To further reduce carbon emissions from our infrastructure,
we will continue the initiatives that we began in 2017 and
expand on these:
• Monitoring energy consumption and changing our behav-
ior across the globe.
At OneCampus, we will monitor energy consumption
at team level to encourage rational energy behavior.
• Extending our green energy procurement program to
other regions, notably Germany, India, China and the US.
• Investing in renewables and energy-efficiency measures
across the globe (e.g. LED lighting).
B/30Barco annual report 2017Our Sustainability Impact Plan (SIP)
Green customer solutions
As we are committed to assessing Barco’s total environmen-
tal impact, it is imperative that we measure more than the
impact of our own activities (logistics, mobility and infrastruc-
ture). In 2016, we began actively measuring and managing
end-user emissions, i.e. the energy consumption of our
products and their impact on the environment. We initially
began by measuring the end-user emissions of our Health-
care division. In 2017, we extended the exercise, measuring
the footprint of all our products (across all divisions) for the
years 2015 and 2016.
Our carbon footprint for end-user
emissions in 2016
726.5 tCO
2e / mio € turnover
MEASURING OUR CARBON FOOTPRINT RELATED TO END-USER 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 CO2e/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 2016
Reporting
period
• FY 2016
• The 2017 results will be available
in June 2018; the report will be
updated accordingly
B/31 Barco annual report 2017
Breakdown of end-user emissionsper type/division (2016)
Entertainment 82%
Enterprise 15%
Healthcare 3%
PROGRESS
0%
End-user emissions (per mio € turnover) remained stable
between 2015 and 2016.
-5%
Reduction in energy performance per delivered capability
for Entertainment (82% of end-user emissions), thanks to the
use of more energy-efficient laser technology.
MID-TERM TARGET (2020)
-25% watt/delivered capability
By 2020, we will cut end-user emissions per delivered capa-
bility by 25%.
Generally, we see that market trends and customer pref-
erences are shifting towards solutions with ever-higher
performance (brightness, resolution, etc.) – which require
higher energy consumption levels. That is why Barco mea-
sures (and manages) the energy performance of its solutions,
i.e. the energy consumption relative to brightness, resolution,
luminance, etc. (watt/delivered capability).
How?
• Improving the energy efficiency of our displays: our latest
displays consume far less energy while maintaining the
quality of light output.
• Switching to solid-state illumination: solid-state (laser)
projectors and video walls, which make up an ever-growing
part of our product portfolio, consume far less power (-50
to -150%) than traditional lamp-based systems.
End-user emissions 91%
Own emissions 9%
B/32Barco annual report 2017Our Sustainability Impact Plan (SIP)
Fostering the sustainability performance of our solutions3 examples
Energy efficiency
• Our laser-illuminated projectors could reduce energy
consumption of cinema projectors in Europe by 150
GWh per year – which equals the electricity production
of a small nuclear power plant in one month.
• 50-150% more energy efficient per delivered lumen.
Material use
• Laser technology eliminates any concerns about
potential pollution from xenon lamp disposal.
• Extremely long life time.
Supply chain
• The use of laser projectors could avoid over 1 million
lamp swaps annually in Europe. This is the equivalent of
670 trucks filled with lamps navigating Europe.
• Our UDX projector is 50% more compact than earlier
stage HDF projectors
End-of-life optimization
• Modular design enables retrofit (reuse of casing /
standard parts).
• Platforming for easy maintenance and refurbishment.
Energy efficiency
When designing new healthcare displays, we look for ways
to increase their energy efficiency (in active use and standby).
E.g: our 27-inch pathology display consumes less power:
-10% in operating and over -50% in standby mode.
Material use
Our 26-inch high-bright surgical display (MDSC 2326) uses
LED backlights, thus eliminating lead and mercury.
Supply chain
Design for supply chain both in volume and weight reduction:
E.g: by redesigning the pedestal of our 19-inch MDRC-1219
display we can now pack 24 displays per pallet instead of
16 (+50%).
By slightly redesigning our 58-inch 8MP MDSC 8358 display,
we reduced its weight by ca. 7%.
End-of-life optimization
Barco improved the design of many healthcare displays to
make them easily serviceable but also easy to dismantle at
the end of their lifetime.
Entertainment Healthcare
B/33 Barco annual report 2017
Launching our energy-efficient power
control circuit for video walls
The large video walls that our Enterprise division develops
for control rooms consume quite a bit of energy, even in
standby mode. Barco Noida (India) came up with a solu-
tion to substantially reduce that energy use. Following three
years of development, the team has now filed a patent for an
‘energy-efficient power control circuit’.
Blending innovation
with sustainability
The new solution, which Barco India developed together
with their colleagues from Karlsruhe (Germany), allows users
to turn multiple screens off completely and all at once, in
order to save energy. It is, however, also very easy to switch
the screens on again, with a remote controller, for example.
In the past, several companies have tried to create similar
technologies, but they could never get past the component
level and succeeded only in controlling part of a display wall.
The innovation is an inspiring illustration of Barco’s aim to
transcend mere product development and instead create
sustainable solutions for customers.
Enterprise
This technology will help our
customers substantially reduce
their energy consumption,
leading to a smaller ecological
footprint.
Mahesh Chandra JoshiThe project’s originator, first inventor
and chief inspirer
B/34Barco annual report 2017Our Sustainability Impact Plan (SIP)
Design for the environment
More than improving the energy-efficiency of our technol-
ogy solutions, we want our products to be composed of
low-impact materials (material use), be packed in eco-friendly
packaging (packaging) and be easy to maintain, refurbish and
eventually recycle (end-of-life optimization). That is why an
increasing number of innovation initiatives are focused on
sustainable product innovation. To anticipate to upcoming
standards and regulations, we set up an sustainable product
design/eco-design program, which entails an eco-design
scoring mechanism (A, B, C, D) on product level. Barco’s
Eco Office supports these efforts.
Our journey towards sustainable Barco solutions
2013 - 2015
• Phaseout high-impact hazardous toxic materials
• Adoption of the Barco Substances List
• REACH, RoHS compliance
2016 - 2017
• Energy efficiency (Laser, LED,... )
• Design for supply chain (weight, volume, material
reduction)
2018 - 2020
• Low-impact materials
• Reduce the use of halogens & PVC
• Design for refurbishment & repair/maintenance
PILLAR EXAMPLE/PROGRESS
Energy efficiency • Barco chooses consistently and deliberately for high-energy efficiency technologies (laser, LED, ...)
• Barco invests in research and development of active power management solutions (e.g. standby mode,
deep sleep mode, etc.)
Material use(toxicity/hazardous,
impact, recycled/
renewable)
• REACH/ROHS compliance• Increase transparency of product composition (via: Barco’s Substances List, GreenSoft and BomCheck.net)
• Successfully replaced non-ROHS II components
• Data evidence delivery made stricter in procurement contracts
Product packaging • Packaging designed for the supply chain• Eco-friendlier packaging materials
End-of-lifeoptimization(design for repair,
refurbishment, etc.)
• From 2017 onwards, Barco is putting more emphasis on its services portfolio and providing more retrofit
solutions. Design for serviceability (maintenance, repair, upgrading) is key in all new design tracks.
• In 2017, Barco joined several initiatives to expand its knowledge of the circular economy, such as the Agoria
circular economy learning network and Benelux remanufacturing project. We also joined JWG CLC10. As an
active member, we will help write future standards to improve the sustainable performance of products.
B/35 Barco annual report 2017
Our Design for the Environment program is supported by a
robust eco-scoring methodology that helps us determine the
sustainability performance of our products. Sustainable prod-
ucts must demonstrate balanced leadership on all eco-design
dimensions – energy-efficiency, material use, packaging and
end-of-life optimization – compared to industry standards.
This is done by either outperforming reference (competitor,
older version) products with an eco-performance label or
by outperforming current legislation.
In 2017, we set up, fine-tuned and applied our eco-scoring
methodology in different pilot projects. From 2018 onwards,
all new products will be assessed from a sustainability point
of view and rated according to an ABCD-scale.
MID-TERM GOAL (2020)
25%
Percentage of all new Barco products that should have an A
eco-performance score by 2020.
+
• We want all our products to have an eco-performance
score.
• All new Barco products should have an eco-
performance score higher than D.
Our eco-scoring methodology
A
B
C
D
Energy• Efficiency• Eco mode• Standby mode• Power management
Packaging• Design• Recyclability• Accessories in the
packaging• Manuals
Material use• Toxic substances• Product weight• Recycled material
End-of-life optimization• Durability• Design for disassembly• Modularity• Accessibility of critical
components
No deliberate effort
Degree of sustainability effort
Minimum effort
Upright effort
Significant effort
B/36Barco annual report 2017Our Sustainability Impact Plan (SIP)
People
In 2017, Barco employed 3,590 people. We care about every
single one of them. That is why we work hard to ensure a
healthy, safe and motivating workplace where everyone is
treated fairly and with respect and where it is fun to work.
The key to well-being in the workplace? Sustainable employ-
ability. By appreciating and stimulating talent, by encouraging
our people to learn and develop themselves, by motivat-
ing them and by keeping them healthy – both physically
and mentally –, we want them to feel strong, valued and fit.
Moreover, we focus on their ability to proactively anticipate
change, evolution and trends so they are ready to face the
challenges of an ever-changing world – either within or out-
side our company.
You are you
and together
we are one.
B/37 Barco annual report 2017
Gender 73% male
27% female
Geographical
15% The Americas
23% Asia-Pacific
51% EMEA**
11% Greater China
Number of employees 3,9822013
3,8362014
3,3612015
3,524
3,590
2016
2017
* Number of full-time equivalents (FTEs), excluding temporary workforce(Database Corporate Associates per 31/12/2017)
**EMEA: Europe & Middle East & Africa
84 Customer projects
327 Customer service
230 Marketing
1,183 Manufacturing & logistics
65 Procurement
61 Quality, supply chain & support
840 Research & development
517 Sales
284 Administration Per functional group
B/38Barco annual report 2017Our Sustainability Impact Plan (SIP)
To achieve our objectives in the field of sustainable employability, we
created the You+ program. Since 2015, we have been framing all our
people-related initiatives in this global program. It consists of three pillars,
which match the results of the materiality assessment we performed
in 2017 (see B7/ - B/8).
Training & personal
development
Engaging all employees
in the Barco journey
Providing a healthy, safe
and energizing workplace
Our You+ program
B/39 Barco annual report 2017
We are all part of the same Barco team – OneBarco – with
one mutual goal: achieving operational excellence in order
to maintain and strengthen Barco’s global leadership position.
That’s why we want everyone to understand and actively
contribute to our strategy and vision. To spread our message,
we provide structured communication platforms. Our new
OneCampus in Kortrijk is designed to foster interaction. Yet
in other regions too, we encourage our employees to ask
questions, provide feedback, share ideas and become truly
involved in our operations.
Strategy roadshows and more
To foster awareness of our new strategy, we prepared a strat-
egy roadshow in 2017. In early 2018, our CLT members will
tour the world to help every Barco employee understand
the bigger picture. Yet there are local initiatives, too. In the
Americas, for example, Ney Corsino, Senior Vice President
of the Americas, hosts a monthly teleconference to share
results and discuss programs and activities.
Engaging all employees in the Barco journey
BarcoZone and the CEO blog
BarcoZone, our Intranet, is an excellent platform for sharing
information with every Barco employee. Besides practical
information, BarcoZone spreads new insights – including
blog posts by our CEO, Jan De Witte.
Employee appreciation week
Every year, our American colleagues organize Employee
Appreciation Week: a full week of fun activities – from football
games and painting contests through barbeques – to bring
all the Barco employees and their managers closely together.
Self-steering teams
To ensure that our employees feel more engaged and have
the chance to grow and develop, we increasingly rely on
self-steering teams, ranging from administrative teams to
blue-collar workers. The team working on our Lean Line,
for example, is responsible for the quality checks and the
logistics of the complete production process. As almost every
team member can execute every step in the production pro-
cedure, they can rotate working stations easily, which helps
avoid monotony.
B/40Barco annual report 2017Our Sustainability Impact Plan (SIP)
At Barco, we cherish talent and actively help it to grow
and flourish. Through Barco University, dedicated training
programs and coaching, we seek to empower our people,
ensuring that they are flexible, agile employees while encour-
aging them to think about how they want to contribute to
our company, today and tomorrow.
Our Leadership Development track includes multiple cus-
tom-made programs to help Barco leaders expand their
skillsets and foster their leadership potential.
To make sure our people feel happy in their professional
roles, we provide them with a series of tools to help them
self-manage their careers: In addition, we promote inter-
nal mobility. In 2017, 2.7% of Barco’s total workforce was
internally mobile.
Innovation is one of the key strategic levers of Barco as a
company. As we want to foster innovation in everything we
do, we try to involve every Barco employee in our innovation
processes. Barco STREAM is a corporate ideation platform -
a new initiative to boost our innovation capabilities.
Training and personal development
With courses on topics ranging from GDPR regulations,
ethics and compliance to health and well-being, Barco
employees received on average 15 hours of learning and
development throughout 2017. Barco University remains our
‘tool’ to stimulate lifelong learning. To promote participation,
we combine on-site courses with e-learning.
Our advanced performance management process helps all
Barco employees discover and develop their talents. Based
on 360° feedback tools, team managers discuss the perfor-
mance, training needs, career planning and, of course, job
satisfaction of their team members.
15 hours/employee 100%
B/41 Barco annual report 2017
Barco keeps investing in a healthy and safe work environ-
ment, around the world. Every year, we launch a series of
initiatives to energize our employees and improve their
mind and body balance. Besides encouraging them to keep
healthy and fit, we launched a series of initiatives to promote
their psycho-social well-being and offer additional support
when required. In 2017, we focused on mental health and
well-being.
• Through dedicated training courses, we help supervisors
and HR business partners to develop their coaching skills
and their capability to spot warning signs of stress or burn-
out early on.
• We have a strong network of confidant(e)s that are
the primary go-to persons in case of problems with
sexual discrimination and harassment, other forms of
discrimination or psychosocial issues.
Providing a healthy, safe and energizing workplace
• In 2017, we launched the RAPSY – Risk Analyses of Psycho-
Social aspects at work – methodology, an approach to
assessing departments or groups on their potential for
psychosocial risks and to link action plans to possible
issues.
• Since 2016, Belgian employees who are wrestling with
psychosocial issues can get professional advice and
counselling through the employee assistance program
(dedicated hotline, 24/7 assistance). In 2017, 22 employees
used this channel to find help to tackle private or work-
related (stress) issues.
• In 2017, our Prevention and Protection Working Group
drafted an integrated policy to foster the re-integration of
employees after a long-term illness (0.7% of our workforce
in 2017).
B/42Barco annual report 2017Our Sustainability Impact Plan (SIP)
B-Energized Week 2017
For several years, we have been organizing a ‘B-Energized
week’ at our headquarters – a full week of activities centered
around ‘health’. Under the ‘Stay sharp, relax smart’ motto,
Barco employees were introduced to yoga, joined a ‘recharge
session’ and learned all about healthy food and their mental
capital in 2017.
More than in Belgium, we see B-Energized initiatives pop-
ping up around the world: a walk-a-thon in the Americas,
Ayurveda sessions and biometric screenings in India, ener-
gizing breaks in Germany, weekly energizing breakfast and
‘work stretches’ in Norway, a mental health seminar and yoga
in Japan, etc.
B/43 Barco annual report 2017
Diversity and inclusion
For Barco, diversity and inclusion are priorities in all their
aspects and on all levels. In terms of our workforce, we strive
for a healthy gender balance and geographical spread in
addition to providing local employment in all communities
in which we operate (see overview on page B/39).
More than priding ourselves on the diversity level of our
workforce, we also steer actively towards diversity at the
hightest governance bodies. We continually monitor, assess
and evaluate gaps and areas for improvement in the compo-
sition of our Board of Directors and Core Leadership Team
– in terms of gender, age, capabilities, expertise, educational
and professional experience as well as geography. In 2017,
our Core Leadership Team expanded and diversified from
different angles:
• Age: average age fell by 5 years.
• Size: expanded from 9 to 14 members.
• Gender: 2 women.
• Competencies: increased focus on management,
technology and services and executive-level experience.
• Geographies: more international experience, with more
local representation (esp. China).
For more information about the age, gender, capabilities
and educational and professional expertise of the Board of
Directors and Core Leadership Team members, including
changes in 2017, we refer to the ‘Governance’ section of
the Company Report.
5
3
11
7
12
5-10years
+10years
+20years
4 4 5
Hardware Software Services
7 6 5
No. of years in executive positions in / out of Barco
Out of 13 executive staff members:
Mix of Barco’s Core Leadership Team
Worked / lived
Out of 13 executive staff members:
Experience
Out of 13 executive staff members:
B/44Barco annual report 2017Our Sustainability Impact Plan (SIP)
Communities
As a responsible corporate citizen, Barco is focused on
caring for its entire community - employees, customers
and business partners; investors, analysts and shareholders;
authorities and the media; and, of course, the local commu-
nities in which it operates.
The Barco team does its utmost to continuously contribute
to a safe, healthy and pleasant world for every stakeholder.
Besides working closely together with customers and busi-
ness partners, we also support artistic and cultural initiatives,
promote technology and innovation and help people around
the world build better futures.
Increasing stakeholder
engagement
and helping our
communities thrive.
B/45 Barco annual report 2017
In line with our commitment to increasingly measure and
set targets for our sustainability performance, we have also
identified different types of indicators for the ‘community’
domain (see performance indicators on page B/19 - B/20
of this report).
.
The topics that we identified as crucial for our community
strategy match the results of the materiality assessment that
we performed in 2017.
Customersatisfaction
Ethics &compliance
Communityengagement
B/46Barco annual report 2017Our Sustainability Impact Plan (SIP)
Putting customers first
As Barco is committed to enabling bright outcomes for its
customers, we set great store by offering outstanding cus-
tomer services. Our growing focus on services helps us to
further customize the customer journey, enabling us to give
our customers what they want and when and how they want
it. Our design and development processes too, are becoming
more customer-centric: we listen to our customers’ needs
and take these into account when developing new Barco
solutions.
Customer loyalty study
Every two years, we measure the satisfaction of our custom-
ers with a loyalty study. In 2014, we recorded the highest
customer loyalty index in our history. At 83%, the 2016 score
was slightly lower than the 87% we achieved in 2014, but it is
still a strong result that far exceeds the industry benchmark
(69). The survey yielded a ton of great insights on how to
improve our products and services to score even higher in
the future.
The Supplier Excellence Award that we received from Agfa
Healthcare in 2017 is testament to our customer excellence
mindset.
More details on how we co-operate with our
customers is available in the section ‘Stakeholder
engagement’ towards the end of this report
Barco@Barco
Leading provider of #eHealth &
digital imaging solutions
@AgfaHealthCare honors
@BarcoHealth w/ Supplier Excellence
award http://bit.ly/2CIRg9G
#radiology #diagnosticdisplays
11:00 AM - 18 Jan 2018
B/47 Barco annual report 2017
Community engagement
Barco significantly stepped up its community engagement
efforts in 2017. Under the umbrella of our community
engagement vision, we aim to help tackle important socio-
economic challenges where we can make the biggest
impacts. Using the United Nations’ Sustainable Develop-
ment Goals (UNSDG) as a guideline, Barco is committed to:
“Promoting an innovation society by supporting worldwide
initiatives that strengthen education and entrepreneurship,
close the gap between rich and poor, help underprivileged,
yet talented youth and improve health and well-being.”
is the amount we invested in commu-
nity engagement initiatives in 2017
EUR 125,000
employees (~18% of the total work-
force) were happy to help support
our community engagement initiatives
+600
Supporting good health and well-being
Our headquarters was colored pink in October 2017: every
Barco employee wore a pink ribbon and we had pink drinks
and pink cookies to support Breast Cancer Awareness
Month. To highlight our respect for cancer clinicians world-
wide, we launched the ‘There’s a hero behind every hero
fighting cancer’ video. In addition, we shared useful insights
on breast cancer detection throughout the month.
Barco India donated 60,000 euro to CANSUPPORT, India’s
largest free home-based palliative care program. The money
is used to fund three mobile teams, each comprising a doc-
tor, a nurse and a counselor.
Also in India, a group of underprivileged children suffer-
ing from cancer was invited to the Barco campus for Barco
Play Day. Financed by donations made by Barco employees,
Barco Play Day gave the children a look behind the scenes of
our plant and an amazing cinema experience. Most impor-
tantly, however, it provided them with one day free of worries,
allowing them to forget about their disease for a short while.
B/48Barco sustainability report 2017
Stimulating quality education
In October 2017, the new Barco Sakshi Education Center
opened in Noida, India – a school for underprivileged chil-
dren. The donation of Barco India (20,000 euro) helps pay
for teachers’ wages, as well as for daily – healthy – meals.
More than giving money, Barco employees are encouraged
to support the initiative by helping teach or providing books,
stationery, bags, water bottles or any other items that the
center may require.
Through the innovative ‘iGemba Scholarship Scheme’,
Barco India helps its employees pay for the education of
their children. The concept is simple: for each improvement
suggestion that operators make through our iGemba pro-
gram, Barco contributes 3 euro, which are collected in a
scholarship fund. Since the start of the program, 52 children
of Barco employees received scholarships. The program
not only supports our sustainability and CSR efforts, but also
reinforces the Barco value ‘we care’.
The iGemba Scholarship
Scheme sends a clear message
to everyone at Barco India: we
value your input, appreciate
your improvement ideas and
we strongly believe in the
power of education.”
B/49 Barco annual report 2017
Closing the digital divide and supporting local communities
Barco supports `Ondernemers voor Ondernemers’ (Entre-
preneurs for Entrepreneurs), a Belgian non-profit organization
committed to fostering sustainable economic growth in
developing countries by encouraging local entrepreneurship.
Reducing inequality
In February 2017, the Cambodian Children’s Fund (CCF)
treated 700 children and their families in Steung Meanchey,
a former waste dump in southern Phnom Penh (Cambodia),
to an outdoor screening of the Cambodian blockbuster Jail-
break. Barco provided the necessary projection equipment.
Nine students joined the Barco team at our headquarters
for one day in October 2017, working for good causes in El
Salvador and Belgium during YOUCA ACTION DAY (Youth
for Change and Action).
During the fifth Barco Play Day in Kortrijk, we welcomed over
300 children from underprivileged families for a day full of
fun and games – including an introduction to our technology.
Moreover, Barco Play Day went international in 2017, with
similar initiatives in India (Noida) and Germany (Karlsruhe).
For people in developing
countries, our used laptops
could be a ticket out of
poverty.
Frank VerstraeteIT Service Engineer and Coordinator at Barco
In 2015, Barco stared partnering with Close the Gap – an
international non-profit organization that aims to bridge the
digital divide by donating used IT equipment to educational,
medical, entrepreneurial and social projects in developing
and emerging countries. Close the Gap collects our laptops,
desktops, displays, servers, etc. and refurbishes them for
reuse. When end users can’t use the devices anymore, Close
the Gap collects them so they can be recycled correctly. We
will keep supporting the initiative, not only by donating prod-
ucts, but also by providing access to knowledge, resources,
infrastructure and technology through the “Digital 4 Devel-
opment – Igniting Partnerships” program.
B/50Barco sustainability report 2017
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 opportu-
nities of the digital age to build new, successful businesses.
I am looking forward to sharing
Barco’s experience and, at the
same time, learning from the
young entrepreneurs who we
are going to coach.
Jan De WitteCEO and member of Hangar K’s
Board of Directors
A cycling challenge and a DJ booth were two of the initia-
tives set up to raise money for different causes during ‘De
Warmste Week’ – a popular annual charity event organized
by Belgian radio station Studio Brussel.
EUR 17,500
In ‘De Warmste Week’, Barco collected 17,500 euro for a
range of different good causes.
B/51 Barco annual report 2017
Ethics and compliance
We know that compliance and integrity are crucial to our
business success, as they instill trust in our customers and
business partners. That is why ethical conduct is deeply
embedded across our operations. We expect our employees
to work in alignment with our values: ‘we are accountable’,
‘we deal openly and ethically’ and ‘we trust each other’.
Moreover, we expect our business partners to adhere to the
highest possible ethical standards as well.
Ensuring the compliance of our employees and our business environment
To foster a corporate culture in which compliance is taken
seriously, we need to establish a common understanding
of what we mean by ethics and compliance. Among other
actions, we do this by creating a Code of Ethics outlining
the basic principles of compliant and ethical behavior when
dealing with each other, business partners, company assets,
information, infrastructure, etc. The code contains guidelines
that all Barco employees worldwide are expected to adhere
to in their daily work – an ethics compass.
In 2017, we thoroughly revised the Code of Ethics to make
sure it addresses the issues defined in our materiality assess-
ment and to reflect new trends in compliance domains, such
as privacy, IT security, data protection, open- source software
and social media.
Today, the code reflects on ethics topics relating to work
environment, relationships (incl. anti-bribery and anti-cor-
ruption), compliance, company resources and records and
governance.
Communicating the standards
In 2017, we reviewed the Code of Ethics, making sure that
all employees understand how it applies to their day-to-day
activities.
• The revised code, which is available online1, combines
theory with practice, including a load of real-life
examples (in Q&A style).
• It has been read and signed by all our top and middle
managers (grade 18 and above) and translated into the
major international languages.
• An e-learning course makes sure that all employees
receive full training on the standards.
• We designed a dedicated ethics & compliance portal and
an ethics blog with practical information.
• 50% of our white-collar workers across all sites
worldwide participated in our compliance challenge
2017, a live quiz with 12 compliance-related questions.
Barco is committed to building further towards a positive,
ethical company culture – and stresses the positive aspects
of ethical business conduct in all its communication across
all channels.
1 http://www.barco.com/en/aboutbarco/corporate%20sustainability/compliance/code%20of%20ethics
B/52Barco annual report 2017Our Sustainability Impact Plan (SIP)
Ethicsinbox
EthicsCommittee
Directsupervisor
Code ofEthics
Yearly compliance
challenge
Ethicsinbox
EthicsCommittee
Directsupervisor
Code ofEthics
Yearly compliance
challenge
Supervising compliance, clarifying ethics for all employees and raising concerns
We have built a network of professionals that ensure that
every employee adheres to our Code of Ethics and that gen-
eral inquiries on ethics can be quickly clarified.
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.
• Questions and/or concerns can also be communicated via
the ethics inbox. In 2017, several formal questions/con-
cerns were handled via the ethics inbox. Topics included
general interpretations of the Code of Ethics as well as
requests for guidance on how to handle business relation-
ships (anti-bribery and anti-corruption).
An Ethics Committee, consisting of the General Counsel, the
Chief HR Officer and the internal auditor, formally deals with
the concerns raised on a case-by-case basis.
Moreover, Barco takes a proactive approach to raising the
ethics bar at Barco. At regular intervals, we organize inter-
nal audits and internal control projects to assure ethical
employee behaviour.
Covering a wide spectrum of businessethics topics
Our ethics approach includes several aspects that support
our business activities. Specific risks and risk management
procedures are included in the risk report (see Company
Report).
Several reporting channels
B/53 Barco annual report 2017
Ethicsinbox
EthicsCommittee
Directsupervisor
Code ofEthics
Yearly compliance
challenge
TOPIC POLICY
Non-discrimination What?Ensuring non-discrimination in various domains (e.g. recruiting, …) and countries.
How?Anti-discrimination policy.
• Available on our Intranet (BarcoZone).
• Governed by HR department.
Freedom of association and collective bargaining
What?Ensuring compliance with local and international social security and minimum wage legislations;
industrial relation policies and with international standards on freedom of association.
How?• Barco includes all employees in collective bargaining agreements by complying with all necessary
local workforce regulations in the countries where Barco operates.
E.g. in Belgium, Barco adheres to sector agreements for automatic wage indexation, leave, etc.
• Barco handles specific workforce-related topics by closing off company-specific collective
bargaining agreements.
Where applicable, Barco organizes workers’ councils (both national and international).
Collective labor agreements on company level with specific stipulations for wage and working
conditions, parental leave, etc.
• Applying the ILO-framework (International Labor Organization)) to ensure freedom of association.
Anti-bribery and anti-corruption
What?Avoiding and reporting situations in which a Barco employee is offered or offers money or a favor to
influence the judgment or conduct of a person in a position of trust.
How?The Code of Ethics includes a section on how to deal with anti-bribery and anti-corruption in profes-
sional business relationships.
Human rights What?Barco safeguards human rights as entitled to all people, regardless of nationality, place of residence,
sex, national or ethnic origin, skin color, religion, language, or any other status or characteristic.
How?Barco applies a human rights policy in line with the standards and policies set by the ILO (International
Labor Organization).
• The Code of Ethics includes sections on “Respect for the individual” and “Positive workplace”
• The Statement on Child Labor, Forced Labor and Human Trafficking articulates our position
regarding child labor, forced labor and human trafficking.
B/54Barco annual report 2017Our Sustainability Impact Plan (SIP)
Ensuring compliance of our suppliers
We expect our suppliers to adhere to the same sustainability
standards we do. Over the past few years, we have worked
hard to ensure that every member of our supply chain under-
stands our standards and can demonstrate responsibility and
transparency. Our Supplier Sustainability Program is based
on six pillars:
• Supplier classification: Segmenting suppliers into core, key
and commercial categories based on magnitude of spend
and criticality of technology provided.
• Training and awareness: Through webinars and other com-
munication channels, we train suppliers and inform them
on developments in environmental compliance guidelines,
eco-design and corporate social responsibility.
• RBA Code of Conduct: Each one of our core suppliers is
expected to (contractually) comply with standards relating
to social, environmental and ethical issues in the electron-
ics industry supply chain as set out in the RBA Code of
Conduct (Responsible Business Alliance), formerly known
as the EICC Code of Conduct.
• Supplier audits: Barco audits every (new) supplier via a
questionnaire or on-site. In the case of shortfalls, an action
plan is developed. Our core suppliers are subject to yearly
audits.
• Product compliance: Every component that our suppli-
ers deliver must comply with the Product Compliance
Requirements Code, which includes worldwide regula-
tions, industry standards and many criteria that we have
voluntarily defined.
• Responsible Sourcing Program: This program strives to
make sure that our raw materials, components and pack-
aging come from sustainable sources. In recent years, we
have adopted a conflict minerals policy and improved the
transparency and traceability of metals in our supply chain.
The RBA Code of Conduct, formerly known as the
EICC Code of Conduct, is a set of standards covering
social, environmental and ethical topics relevant to the
electronics industry supply chain. The standards refer-
ence international norms and standards, including the
Universal Declaration of Human Rights, International
Labor Standards (ILO), OECD Guidelines for Multina-
tional Enterprises, ISO and SA standards, and many
more. Topics covered include:
• Labor: Freely chosen employment, humane
treatment, non-discrimination, freedom of
association, ...
• Health and safety: Occupational safety, machine
safeguarding, 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,
privacy, …
100%
All of our core suppliers comply to the RBA Code of
Conduct.
B/55 Barco annual report 2017
iGemba: where all the dimensions of our Sustainable Impact Plan come together
For over five years now, our iGemba program has encour-
aged Barco operators around the globe to continuously
improve processes by placing them at the heart of improve-
ment ideas. Much to our satisfaction, the program continues
to gain momentum year after year. In 2017, operators came
up with an all-time high of 6,751 improvement suggestions
(8.6 per operator), of which 85% were implemented. The
project was driven by clear leadership commitment, as shown
by the 1,500 Gemba walks that fueled the project. We are
proud that our iGemba program succesfully combines all our
sustainability dimensions: planet, people and communities.
People
iGemba promotes a safety culture as
one of the most important values, but
uses self-steering teams as a step-up
towards more operator engagement.
In this context the supervisor makes
the transition from ‘boss’ to ‘coach’,
which stimulates the continuous devel-
opment of operators.
Planet
Environmentally friendly operations
is one the cornerstone of Barco’s
operations strategy. Barco challenges
i t s operators to come up with
improvement ideas that enhance its
environmental footprint by reducing
material use and waste, transportation,
and packaging.
Communities
The iGemba Scolarship Fund is a yearly
initiative through which Barco (India)
donates 3 euro to the education of
employees’ children for every internal
improvement idea that iGemba gen-
erates in India (totaling around 6,000
euro per year). It is one of Barco’s ways
of fostering prosperity in its local com-
munities.
B/56Barco sustainability report 2017
Governance structure specifically related to sustainability
Page 59
Stakeholder engagement
Page 60
Our sustainability management
B/57 Barco annual report 2017
External initiatives (platforms and commitments)
Page 63
B/58Barco annual report 2017Our sustainability management
Governance structure specifically related to sustainability
Barco integrates its sustainability governance structure in
its corporate governance structure by putting in place the
following committees and roles:
All Barco’s corporate governance structures can be found in
the ‘Governance’ section of the Company Report.
Executive sustainability steering committee
• Directs the overall sustainability strategy and program
and frames the different initiatives across Barco’s worldwide
organization. This committee is chaired by Filip Pintelon
(Senior VP and General Manager Healthcare and acting
CTO).
• The sustainability program office reports directly to the
executive sustainability steering committee.
Sustainability ambassador meetings
• A cross-functional committee with Barco’s key sustain-
ability stakeholders gathers feedback and discusses ideas
and partnerships, etc. This committee is chaired by Filip
Pintelon (Senior VP and General Manager of Healthcare),
and led by Carl Vanden Bussche (VP of Investor Relations).
The committee meets every two months.
• The sustainability ambassador group communicates
the accomplishment of key initiatives to all relevant
stakeholders.
Sustainability program office and manager
• Guards overall program progress, objectives, etc.
• Works together with work stream leaders (functional lead-
ers in logistics, procurement, facilities, sales and marketing,
etc.) in the different sustainability fields (planet, people,
communities) to ensure timely implementation of sustain-
able development measures.
Board of Directors
Core Leadership
Team
Sustainability
program office
Executive
sustainability
steerco
Sustainability
ambassador
meeting
B/59 Barco annual report 2017
Stakeholder engagement
Barco aims to engage all relevant stakeholders to integrate
stakeholder (economic, social and environmental) concerns
or issues into all its strategies, actions and policies. By con-
tinuing to standardize the process of interacting with our
stakeholders, we can mitigate risks, identify new business
opportunities and improve financial results.
• At Barco, every department is responsible for identifying
and engaging with its own stakeholders (i.e. those they
affect or are affected by). Barco’s corporate functions pro-
vide the departments with a framework on how to tackle
stakeholder engagement (i.e. stakeholder identification and
classification, guidelines for stakeholder communication,
etc.).
• Barco actively engages in stakeholder dialogues over a
broad range of topics and channels to promote participa-
tive and integrated decision-making. We understand that
stakeholder involvement supports our long-term success
and innovation capability.
• Barco’s main stakeholder groups are
o Customers
o Employees
o Suppliers
o Sector federations
o Policymakers
o NGOs
o Consumer organizations
o Investors
o Academic institutions
B/60Barco annual report 2017Our sustainability management
STAKEHOLDER GROUP SPOC
Customers • Sales
• Corporate and strategic marketing
• Customer service
• External communication
• Product management
ThinkSales is an initiative to strengthen Barco’s commercial capabilities and inject customer-centricity
into our business (e.g. customer journey pilot projects)
Employees • CHRO
• Internal communication
Suppliers • VP procurement
• Eco-office
Public organizations(sector federations, NGOs, policymakers)
(e.g.: The Shift, Agoria, Etion, VBO, Voka, VLAIO)
• Global leadership team
Investors • VP Investor relations
ENGAGEMENT METHOD SPECIFIC ORGANIZATIONS/TOOLS
• Yearly general customer satisfaction survey, to be replaced in
2018
• Daily contacts in the field (sales, strat. mkt, customer service,
NPI, …)
• Engagement with consumer organizations - bilateral
• Customer loyalty score
• Press releases
• Digital interaction via social media, website, ...
• Entertainment: UNIC, GL Events, VERPRG,
• Healthcare/Enterprise: key account mgmt.
• 2-yearly employee engagement/enablement surveys
• Involve key teams in action plan development
• YOU+ program: B-inspired, B-engaged, B-involved
• Intranet, CEO blog, town hall meetings (straight-ups)
• Performance evaluation review
• Involve employees in continuous improvement (iGemba)
• Involve employees in ideation (Barco STREAM)
• Strategy roadshow
• Communicate expectations on social, environmental and
ethical topics through RBA (formerly EICC) Code of Conduct
• Audit system to evaluate supplier performance
• Training to core and key suppliers
• Product compliance requirements for suppliers
• RBA/EICC Code of Conduct
• Barco Substances List
• Data collection through Greensoft
• Bomcheck.net
• Participation in (governmental) workings groups of policymakers
• Meetings and roundtables
• Participation in global networks
• Scientific groups and educational institutions
• European commission – CENELEC
• Laser-illuminated projector association (LIPA)
• Close the Gap/The Shift
• Sustainability networks: The Shift, We Mean Business, …
• IMEC
• Kulak, howest, VIVES, UGent, KU Leuven
• Hangar K: co-creation space with educational institutions
• Sector federations: VBO, VOKA, Agoria, Etion by senior
leadership team
• Symmetric way of information dispersion through different
deliverables
• Bilateral contact via investor roadshows, conferences,
communities
• Support on equity research by brokers
• Annual report, press releases, investor portal
• Capital Market Days (investor days)
• Conference calls
• Equity research documents
B/61 Barco annual report 2017
ENGAGEMENT METHOD SPECIFIC ORGANIZATIONS/TOOLS
• Yearly general customer satisfaction survey, to be replaced in
2018
• Daily contacts in the field (sales, strat. mkt, customer service,
NPI, …)
• Engagement with consumer organizations - bilateral
• Customer loyalty score
• Press releases
• Digital interaction via social media, website, ...
• Entertainment: UNIC, GL Events, VERPRG,
• Healthcare/Enterprise: key account mgmt.
• 2-yearly employee engagement/enablement surveys
• Involve key teams in action plan development
• YOU+ program: B-inspired, B-engaged, B-involved
• Intranet, CEO blog, town hall meetings (straight-ups)
• Performance evaluation review
• Involve employees in continuous improvement (iGemba)
• Involve employees in ideation (Barco STREAM)
• Strategy roadshow
• Communicate expectations on social, environmental and
ethical topics through RBA (formerly EICC) Code of Conduct
• Audit system to evaluate supplier performance
• Training to core and key suppliers
• Product compliance requirements for suppliers
• RBA/EICC Code of Conduct
• Barco Substances List
• Data collection through Greensoft
• Bomcheck.net
• Participation in (governmental) workings groups of policymakers
• Meetings and roundtables
• Participation in global networks
• Scientific groups and educational institutions
• European commission – CENELEC
• Laser-illuminated projector association (LIPA)
• Close the Gap/The Shift
• Sustainability networks: The Shift, We Mean Business, …
• IMEC
• Kulak, howest, VIVES, UGent, KU Leuven
• Hangar K: co-creation space with educational institutions
• Sector federations: VBO, VOKA, Agoria, Etion by senior
leadership team
• Symmetric way of information dispersion through different
deliverables
• Bilateral contact via investor roadshows, conferences,
communities
• Support on equity research by brokers
• Annual report, press releases, investor portal
• Capital Market Days (investor days)
• Conference calls
• Equity research documents
B/62Barco annual report 2017Our sustainability management
External initiatives (platforms and commitments)
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.
Voka Charter for Sustainable Management (Voka Charter Duurzaam Ondernemen)
By signing this Flemish charter, which helps and urges com-
panies to take environmental and social responsibility, we
commit ourselves to developing an action plan involving
ten themes:
• Corporate governance
• Engagement with society
• Communication and dialogue
• Being a people-friendly company
• Risk management
• Sustainable investing, procurement and product
development
• Supply chain management
• Climate change and energy
• Quality of the company’s direct environment
• Sustainable logistics and mobility
B/63 Barco annual report 2017
The Shift
Barco is a member of The Shift, Belgium’s largest corporate
sustainability network.
In June 2017, The Shift organized a roundtable discussion
on sustainable development, featuring Queen Mathilde of
Belgium as the guest of honor. As an advocate for the UN’s
Sustainable Development Goals, Queen Mathilde sat around
the table with deputy Prime Minister Alexander De Croo and
ten Belgian captains of industry for whom sustainability is an
important cornerstone of their businesses.
Our CEO Jan De Witte was delighted to join the discussion
and explain how Barco helps promote the SDGs around the
globe.
Carbon Disclosure Project (CDP)
Every year, Barco measures and reports its carbon footprint
to the Carbon Disclosure Project (CDP), benchmarking its
sustainability performance to peer groups that CDP suggests.
We commit to the feedback program as organized by CPD,
and set up action plans to mitigate the risks and capitalize
on the opportunities that CPD points out.
Other sustainability benchmark groups and networks
Barco is constantly evaluating additional platforms, bench-
marks, etc. to continually benchmark, assess and improve its
sustainability performance, such as participating in MSCI ESG
ratings and the Ecovadis sustainability benchmark.
The UNSDG framework and
The Shift initiative are great
points for Barco to rally around,
strengthen our efforts, and
provide thought and execution
leadership around sustainability.
Jan De WitteBarco CEO
B/64Barco annual report 2017Our sustainability management
About this sustainability report
Reporting period, cycle and scope
We published our first corporate Sustainability Report on
18 February 2016 (‘Sustainability Report 2015’) and will con-
tinue to report on an annual basis. This report provides a
clear overview of our most relevant intentions, achievements
and objectives in the field of corporate sustainability in 2017,
unless stated otherwise.
GRI standards
Barco has used the Global Reporting Initiative (GRI) frame-
work to guide the reporting in this sustainability overview.
Barco will continue to work throughout 2018 to be able to
report sustainability efforts in accordance with GRI.
B/65 Barco annual report 2017
GRI Content Index
DISCLOSURE PAGE
GRI 100 UNIVERSAL STANDARDS
GRI 102 General Disclosures 2016
102-1 Name of the organization C/105
102-2 Activities, brands, products and servicesA/14, A/16-33, A/41-43,
A/49
102-3 Location of headquarters C/105
102-4 Location of operations A/15
102-5 Ownership and legal form C/105
102-6 Markets served
A/14-15, A/18-21,
A/26-27, A/30-31,
A/100, C/39
102-7 Scale of the organization A/8-9, A/14-15, B/38
102-8 Information on employees and other workers A//14, B/38
102-9 Supply chain B/55
102-10 Significant changes to the organization's size, structure, ownership or supply chainA/24, A/112-113,
C/28-31
102-12 External initiatives B/35,/B/63-64
102-13 Membership of associations B/63-64
102-14 Statement from senior decision-maker A/7, B/3-4
102-15 Key impacts, risks, and opportunitiesA/87-89, B/5-6,
C/79-80
102-16 Values, principles, standards, and norms of behavior B/10, B/52
B/66Barco annual report 2017GRI Content Index
DISCLOSURE PAGE
102-17 Mechanisms for advice and concerns about ethics B/42, B/53
102-18 Governance structure A/56-66, A/69, B/59
102-19 Delegating authority B/59
102-20 Executive-level responsibility for economic, environmental, and social topics B/59
102-21 Consulting stakeholders on economic, environmental, and social topics B/56
102-22 Composition of the highest governance body and its committees A/56-66, A/69
102-23 Chair of the highest governance body A/58
102-24 Nominating and selecting the highest governance body A/68-69
102-25 Conflicts of interest A/78
102-26 Role of highest governance body in setting purpose, values, and strategy A/67, A/69, B/59
102-27 Collective knowledge of highest governance body A/67, A/69
102-28 Evaluating the highest governance body’s performance A/70
102-29 Identifying and managing economic, environmental, and social impacts A/67, A/69, B/59
102-30 Effectiveness of risk management processes A/80-89, C/79-80
102-31 Review of economic, environmental, and social topics A/67
102-32 Highest governance body’s role in sustainability reporting B/59
102-35 Remuneration policies A/68-69, A/71-76
102-36 Process for determining remuneration A/69, A/71, A/73
102-40 List of stakeholder groups B/60-62
102-41 Collective bargaining agreements B/19, B/54
102-42 Identifying and selecting stakeholders B/60-62
102-43 Approach to stakeholder engagementA/40, B/17-18, B/40,
B/47, B/56, B/60-62
102-45 Entities included in the consolidated financial statements C/25-26
102-47 List of material topics B/7-8
B/67 Barco annual report 2017
DISCLOSURE PAGE
102-49 Changes in reporting B/7-8
102-50 Reporting period B/65
102-51 Date of most recent report B/65
102-52 Reporting cycle B/65
102-53 Contact point for questions regarding the report C/105
102-54 Claims of reporting in accordance with the GRI Standards B/65
102-55 GRI Content Index B/65-69
GRI 103 Management Approach 2016
103-3 Evaluation of the management approach B/13-20
GRI 200 ECONOMIC TOPICS
GRI 201 Economic Performance 2016
201-2 Financial implications and other risks and opportunities due to climate change B/6
GRI 300 ENVIRONMENTAL TOPICS
GRI 301 Materials 2016
301-2 Recycled input materials used B/15
GRI 302 Energy 2016
302-1 Energy consumption within the organization B/15, B/29-30
302-2 Energy consumption outside of the organization B/31
302-3 Energy intensity B/15
302-4 Reduction of energy consumption B/30
302-5 Reductions in energy requirements of products and services B/32-33
GRI 305 Emissions 2016
305-1 Direct (Scope 1) GHG emissionsB/14, B/21, B/27,
B/29-30
B/68Barco annual report 2017GRI Content Index
DISCLOSURE PAGE
305-2 Energy indirect (Scope 2) GHG emissions B/14, B/21, B/29-30
305-3 Other indirect (Scope 3) GHG emissionsB/14, B/21, B/24-25,
B/27, B/31
305-5 Reduction of GHG emissions B/16, B/22-23, B/25-30
GRI 308 Supplier Environmental Assessment 2016
308-1 New suppliers that were screened using environmental criteria B/19, B/55
GRI 400 SOCIAL TOPICS
GRI 403 Occupational Health & Safety 2016
403-2Types of injury and rates of injury, occupational diseases, lost days,
and absenteeism, and number of work-related fatalities B/17
GRI 404 Training and Education 2016
404-1 Average hours of training per year per employee B/17, B/41
404-2 Programs for upgrading employee skills and transition assistance programs B/41
404-3Percentage of employees receiving regular performance and career
development reviewsB/41
GRI 405 Diversity and equal opportunity 2016
405-1 Diversity of governance bodies and employees A/68, B/17, B/44
GRI 407 Freedom of Association and Collective Bargaining 2016
407-1Operations and suppliers in which the right to freedom of association and
collective bargaining may be at riskB/54
GRI 412 Human Rights Assessment 2016
412-2 Employee training on human rights policies or procedures B/52
GRI 413 Local Communities 2016
413-1Operations with local community engagement, impact assessments,
and development programsB/48-51
GRI 414 Supplier Social Assessment 2016
414-1 New suppliers that were screened using social criteria B/19, B/55
B/69 Barco annual report 2017
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 Finan-
cial Reporting Standards as adopted by the European Union.
The chapter ‘Comments on the results’ (see page A/92)
provides an analysis of trends and results of the 2017 finan-
cial year, and is based on the IFRS consolidated financial
statements and should be read in conjunction with these
statements.
Say.Do.Perform.
C/2Barco annual report 2017Financial statements
Table of content
Income statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/5
Statement of comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/6
Balance sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/7
Cash flow statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/8
Changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/10
Significant IFRS accounting principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/12
IFRS accounting standards adopted as of 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/18
IFRS accounting standards issued but not yet effective as of 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/19
Reclassifications of professional services and customer services overhead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/22
Critical accounting judgments and key sources of estimation uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/23
Notes to the consolidated financial statements
1. Consolidated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/25
2. Operating Segments information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/33
3. Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/40
4. Income from continued operations (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/41
5. Revenues and expenses by nature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/46
6. Restructuring and impairment costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/47
7. Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/48
8. Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/49
9. Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/50
10. Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/51
11. Capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/55
12. Other intangible and tangible fixed assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/56
13. Deferred tax assets – deferred tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/59
14. Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/61
15. Amounts receivable and other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/62
16. Net financial cash/debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/64
17. Other long-term liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/68
18. Equity attributable to equity holders of the parent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/69
19. Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/72
20. Trade payables and advances received from customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/74
21. Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/74
22. Risk management - derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/79
23. Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/84
24. Rights and commitments not reflected in the balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/85
C/3 Barco annual report 2017
25. Related party transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/85
26. Cash flow statement: effect of acquisitions and disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/86
27. Events subsequent to the balance sheet date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/88
Auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/89
Supplementary information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/95
Barco NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/95
Balance sheet after appropriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/96
Income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/98
Proposed appropriation of Barco NV result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/99
Supplementary statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/100
Free Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C/100
Return on operating Capital Employed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/102
Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C/103
C/4Barco annual report 2017Financial statements
IN THOUSANDS OF EURO NOTE 2017 2016 2015
Sales 4 1,084,706 1,102,342 1,028,856
Cost of goods sold 4 -680,554 -723,538 -691,091
Gross profit 4 404,152 378,804 337,765
Research and development expenses 4(a) -122,305 -143,362 -150,222
Sales and marketing expenses (a) 4(b) -146,802 -147,088 -137,829
General and administration expenses 4(c) -58,095 -55,122 -50,977
Other operating income (expense) - net 4(d) -3,710 3,325 2,960
Adjusted EBIT (b) 4 73,241 36,557 1,698
Restructuring and impairments 6 -32,404 -12,939 -29,099
Gain on sale building 12.2 - 6,866 -
Other non-operating income/(expense) - 33 35
EBIT 40,836 30,516 -27,366
Interest income 4,666 4,401 7,103
Interest expense -2,653 -3,161 -4,098
Income before taxes 42,849 31,756 -24,360
Income taxes 7 -11,355 -6,345 4,879
Result after taxes 31,494 25,411 -19,481
Share in the result of joint ventures and associates 9 1,290 263 -1,073
Net income/(loss) from continuing operations 32,784 25,674 -20,554
Net income from discontinued operations - - 47,031
Net income 32,784 25,674 26,477
Net income attributable to non-controlling interest 19 8,008 14,652 9,009
Net income attributable to the equity holder of the parent 24,776 11,023 17,468
Net income/(loss) (continuing) attributable to the equity holder of the parent 24,776 11,023 -29,563
Net income (discontinued) attributable to the equity holder of the parent - - 47,031
Earnings per share (in euro) 8 2.01 0.91 1.45
Diluted earnings per share (in euro) 8 1.99 0.88 1.41
Earnings (continuing) per share (in euro) 8 2.01 0.91 -2.45
Diluted earnings (continuing) per share (in euro) 8 1.99 0.88 -2.38
Income statement
(a) Sales and marketing expenses shown here do not correspond to the 2015
financial statements and reflect reclassifications of professional services
and customer services overhead. For more information about the reclass,
see page C/22
(b) Management considers adjusted EBIT to be a relevant performance
measure in order to compare results over the period 2015 to 2017, as it
excludes adjusting items. Adjusting items include restructuring costs and
impairments, one-time gains such as the sale of the headquarter building in
2016 and other non-operating income/(expense).
C/5 Barco annual report 2017
IN THOUSANDS OF EURO 2017 2016 2015
Net income 32,784 25,674 26,477
Exchange differences on translation of foreign operations
Continuing operations -24,201 1,165 11,539
Discontinued operations - - -1,154
Discontinued operations recycled through PL - - 1,154
(a) -24,201 1,165 11,539
Cash flow hedges
Net gain/(loss) on cash flow hedges 535 -280 735
Income tax -142 56 -147
Net gain/(loss) on cash flow hedges continuing operations, net of tax 393 -224 588
Other comprehensive income/(loss) continuing operations, recycled through retained earnings for the period - - -
Other comprehensive income/(loss) to be recycled through profit and loss in subsequent periods -23,808 941 12,127
Remeasurement gains/(losses) on defined benefit plans 5,223 -12,318 -
Deferred tax on remeasurement gains/(losses) on defined benefit plans -2,284 4,187 -
Actuarial gains or losses, net of tax 2,939 -8,131 -
Other comprehensive income/(loss) not to be reclassified to profir or loss in subsequent periods 2,939 -8,131 -
Other comprehensive income/(loss) for the period, net of tax effect -20,869 -7,190 12,127
Attributable to equity holder of the parent -19,574 -6,746 11,757
Attributable to non-controlling interest -1,294 -445 370
Total comprehensive income/(loss) (continuing), for the year, net of tax 11,915 18,484 38,604
Attributable to equity holder of the parent 5,201 4,277 29,224
Attributable to non-controlling interest 6,714 14,207 9,380
Attributable to continuing operations 11,915 18,484 -8,427
Attributable to discontinued operations 0 0 47,031
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 2017, the negative exchange differences from continuing operations in the comprehensive income line were mainly booked on foreign operations held in US
Dollar, Chinese Yuan, Indian Rupee, Hong Kong Dollar and Norwegian Krone.
In 2016, the positive exchange differences from continuing operations in the comprehensive income line were mainly booked on foreign operations held in US
Dollar, Norwegian Krone and Taiwan dollar, partly offset by a negative exchange difference on the Chinese Yuan.
In 2015, the positive exchange differences from continuing operations in the comprehensive income line were mainly booked on foreign operations held in US
Dollar, Chinese Yuan and Indian Rupee.
The accompanying notes are an integral part of this income statement.
C/6Barco annual report 2017Financial statements
The accompanying notes are an integral part of this balance sheet.
IN THOUSANDS OF EURO NOTE 31 DEC 2017 31 DEC 2016 31 DEC 2015
Assets
Goodwill 10 105,385 124,255 132,386
Capitalized development cost 11 - - 22,846
Other intangible assets 12(1) 63,361 75,765 52,628
Land and buildings 12(2) 57,964 53,019 20,221
Other tangible assets 12(2) 47,366 50,916 72,346
Investments 9 7,906 14,460 9,031
Deferred tax assets 13 69,859 89,100 78,031
Other non-current assets 15 12,887 19,112 23,226
Non-current assets 364,729 426,627 410,715
Inventory 14 132,754 166,202 165,960
Trade debtors 15 149,438 188,561 186,910
Other amounts receivable 15 19,368 15,584 26,157
Cash and cash equivalents 16 254,130 353,549 341,277
Prepaid expenses and accrued income 5,041 8,709 9,308
Assets held for sale 3 139,536 - -
Current assets 700,267 732,605 729,612
Total assets 1,064,996 1,159,231 1,140,327
Equity and liabilities
Equity attributable to equityholders of the parent 18 579,449 590,243 597,739
Non-controlling interests 19 14,065 25,244 13,925
Equity 593,514 615,487 611,664
Long-term debts 16 41,036 66,811 79,527
Deferred tax liabilities 13 4,647 8,813 4,462
Other long-term liabilities 17 4,555 11,198 2,839
Long-term provisions (a) 21 24,607 30,824 17,992
Non-current liabilities 74,845 117,647 104,820
Current portion of long-term debts 16 10,000 11,500 10,000
Short-term debts 16 686 2,085 2,124
Trade payables 20 102,943 135,127 139,504
Advances received from customers 20 67,040 109,064 113,874
Tax payables 9,752 13,880 13,016
Employee benefit liabilities 49,983 57,050 48,757
Other current liabilities 10,586 9,684 7,690
Accrued charges and deferred income 18,074 58,050 59,967
Short-term provisions (a) 21 26,904 29,657 28,910
Liabilities directly associated with the assets held for sale 3 100,669 - -
Current liabilities 396,637 426,098 423,842
Total equity and liabilities 1,064,996 1,159,231 1,140,327
Balance sheet
(a) Long-term and short-term provisions presented here do not correspond to the 2016 and 2015 financial statements and reflect reclassifications of (i) the defined
benefit obligations and (ii) the technical warranty provisions. For more information about the long-term portion of these liabilities, see Note 21.
C/7 Barco annual report 2017
Cash flow statement
IN THOUSANDS OF EURO NOTE 2017 2016 2015
Cash flow from operating activities
Adjusted EBIT 73,241 36,557 1,698
Impairment of capitalized development costs 4(a) - 1,364 4,866
Restructuring 21 -4,244 -4,917 -3,622
Gain on sale of divestments 4(d) -513 -1,000 -1,406
Amortization capitalized development cost 4(a) - 21,509 44,575
Depreciation of tangible and intangible fixed assets 12 33,877 28,572 22,906
Gain/(loss) on tangible fixed assets 362 -401 -543
Share options recognized as cost 18 1,549 1,234 1,313
Share in the profit/(loss) of joint ventures and associates 9 1,290 263 -1,073
Discontinued operations: cash flow from operating activities - - -4,407
Gross operating cash flow 105,560 83,180 64,308
Changes in trade receivables -7,326 205 -5,443
Changes in inventory -3,577 -2,829 27,565
Changes in trade payables -19,660 -2,676 16,297
Other changes in net working capital -8,113 11,883 32,773
Discontinued operations: change in net working capital - - 12,767
Change in net working capital -38,677 6,583 83,958
Net operating cash flow 66,883 89,763 148,266
Interest received 4,666 7,272 4,303
Interest paid -2,653 -3,161 -4,098
Income taxes -4,395 -11,538 -14,938
Discontinued operations: income taxes and interest received/(paid) - - -5,094
Cash flow from operating activities 64,501 82,337 128,439
Cash flow from investing activities
Purchases of tangible and intangible fixed assets 12 -23,160 -24,241 -14,730
Proceeds on disposals of tangible and intangible fixed assets 168 578 1,137
Proceeds from sale of building - 9,292 -
Acquisition of Group companies, net of acquired cash 1.3, 26 -5,889 -10,229 -9,635
Disposal of Group companies, net of disposed cash 1.3, 26 6,437 1,000 139,622
Other investing activities (a) -3,729 -16,667 -23,072
Discontinued operations : cash flow from investing activities - - -887
Cash flow from investing activities (including acquisitions and divestments) -26,173 -40,267 92,435
C/8Barco annual report 2017Financial statements
IN THOUSANDS OF EURO NOTE 2017 2016 2015
Cash flow from financing activities
Dividends paid -23,292 -20,951 -19,364
Dividends received 8 376 -
Capital increase/(decrease) 433 2,498 895
(Acquisition)/sale of own shares 5,314 5,684 -1,744
Proceeds from (+)/Payments (-) of long-term liabilities -17,532 -11,381 8,740
Proceeds from (+), payments of (-) short-term liabilities 1,401 -2,239 -17,980
Dividend distributed to non-controlling interest -17,893 -5,707 -3,006
Capital increase from non-controlling interest - 2,912 406
Cash flow from financing activities -51,562 -28,809 -32,053
Net increase (decrease) in cash and cash equivalents -13,234 13,261 188,821
Cash and cash equivalents at beginning of period 353,549 341,277 145,340
Cash and cash equivalents (CTA) -18,801 -989 7,116
Cash and cash equivalents at end of period (b) 321,514 353,549 341,277
(a) ‘Other investing activities’ includes net effect of capital contributions in and results of other investments (3.8 million euro in 2017, 5.5 million euro in 2016, nil in
2015) (see note 9) and the investment in the One Campus project, the new headquarter building ( 2016: 9.1 million euro; 2015: 23.1 million euro).
(b) Cash and cash equivalents at the end of the period includes the 67.4 million euro cash in BarcoCFG which is classified as held for sale in the balance sheet.
Excluding BarcoCFG, cash and cash equivalents amount to 254.1 million euro (balance sheet).
C/9 Barco annual report 2017
IN THOUSANDS OF EUROShare capital
and premiumRetained earnings
Share-based payments
Cumulative translation
adjustment
Cash flow hedge
reserve Own shares
Equityattributable to equityholders of the parent
Non-controlling
interest Equity
Balance on 1 January 2015 198,083 472,822 5,942 -33,589 -1,857 -53,984 587,415 7,146 594,561
Net income (continuing) attributable to the equity holder of the parent
- -29,563 - - - - -29,563 9,009 -20,554
Net income (discontinued) attributable to the equity holder of the parent
- 47,031 - - - - 47,031 - 47,031
Net income attributable to equityholders of the parent
- 17,468 - - - - 17,468 9,009 26,477
Dividend - -19,364 - - - - -19,364 - -19,364
Dividend distributed to non-controlling interest
- - - - - - - -3,006 -3,006
Capital and share premium increase 895 - - - - - 895 406 1,301
Other comprehensive income (loss) for the period (continuing), net of tax
- - - 11,169 588 - 11,757 370 12,127
Other comprehensive income (loss) for the period, net of tax
- - - 11,169 588 - 11,757 370 12,127
Share-based payment - - 1,313 - - - 1,313 - 1,313
Exercise of options - - -1,286 - - 4,587 3,301 - 3,301
Share buy-back - - - - - -5,046 -5,046 - -5,046
Balance on 31 December 2015 198,978 470,926 5,968 -22,421 -1,269 -54,443 597,739 13,925 611,664
Balance on 1 January 2016 198,978 470,926 5,968 -22,421 -1,269 -54,443 597,739 13,925 611,664
Net income attributable to equityholders of the parent
- 11,023 - - - - 11,023 14,652 25,674
Dividend - -21,188 - - - - -21,188 - -21,188
Dividend distributed to non-controlling interest
- - - - - - - -5,707 -5,707
Capital and share premium increase 2,498 - - - - - 2,498 2,819 5,317
Other comprehensive income (loss) for the period (continuing), net of tax
- -8,131 - 1,610 -224 - -6,746 -445 -7,190
Other comprehensive income (loss) for the period, net of tax
- -8,131 - 1,610 -224 - -6,746 -445 -7,190
Share-based payment - - 1,234 - - - 1,234 - 1,234
Exercise of options - - -972 - - 6,656 5,684 - 5,684Balance on 31 December 2016 201,476 452,629 6,230 -20,811 -1,493 -47,787 590,243 25,244 615,487
Changes in equity
C/10Barco annual report 2017Financial statements
IN THOUSANDS OF EUROShare capital
and premiumRetained earnings
Share-based payments
Cumulative translation
adjustment
Cash flow hedge
reserve Own shares
Equityattributable to equityholders of the parent
Non-Controlling
interest Equity
Balance on 1 January 2017 201,476 452,629 6,230 -20,811 -1,493 -47,787 590,243 25,244 615,487
Net income attributable to equityholders of the parent
- 24,776 - - - - 24,776 8,008 32,784
Dividend - -23,292 - - - - -23,292 - -23,292
Dividend distributed to non controlling interest
- - - - - - - -17,893 -17,893
Capital and share premium increase 433 - - - - - 433 - 433
Other comprehensive income (loss) for the period (continuing), net of tax
- 2,940 - -22,907 393 - -19,573 -1,294 -20,868
Other comprehensive income (loss) for the period, net of tax
- 2,940 - -22,907 393 - -19,573 -1,294 -20,868
Share-based payment - - 1,549 - - - 1,549 - 1,549
Exercise of options - - -268 - - 5,582 5,314 - 5,314
Balance on 31 December 2017 201,908 457,053 7,511 -43,717 -1,100 -42,205 579,449 14,065 593,514
The accompanying notes are an integral part of this statement.
C/11 Barco annual report 2017
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) effec-
tive year-end 2017 and adopted by the European Union are
applied by Barco.
The consolidated financial statements are presented in thou-
sands of euro and are prepared under the historical cost
convention, except for the measurement at fair value of
investments and derivative financial instruments. The finan-
cial statements were authorized for issue by the board of
directors on 5 February 2018. The chairman has the power
to amend the financial statements until the shareholders’
meeting of 26 April 2018.
1.2. Principles of consolidation
General
The consolidated financial statements comprise the financial
statements of the parent company, Barco NV (registered
office: 35 President Kennedypark, 8500, Kortrijk, Belgium),
and its controlled subsidiaries, 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 affect 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 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 join ventures when it shares
joint control with other investments and it has right to the
net assets of these joint ventures. Investments in associated
companies over which the company has significant influ-
ence (typically those that are 20-50% owned) 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. Investments in
associated companies and joint ventures are presented as
non-current asset on the face of the balance sheet on the
line ‘investments’.
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
testing of new or improved materials, products or techno-
logies, which are capitalized to the extent that it is expected
that such assets will generate future economic benefits and
C/12Barco annual report 2017Financial statements
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 in 2015, 2016 and 2017
no longer meet the criteria of IAS38.57. As the criteria of
IAS38.57 are no longer fulfilled, capitalization of development
expenses in 2015, 2016 and 2017 was not allowed.
Capitalized development costs are amortized on a systematic
basis over their expected useful lives. General estimate of
useful life is 2 years, unless a longer or shorter period can
be justified.
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
recoverable amount.
Estimated useful life is:
- buildings 20 years
- installations 10 years
- production machinery 5 years
- measurement equipment 4 years
- tools and models 3 years
- furniture 10 years
- office equipment 5 years
- computer equipment 3 years
- vehicles 5 years
- demo material 1 to 3 years
- leasehold improvements and finance leases: cfr underlying
asset, limited to outstanding period of lease contract
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 derecog-
nition of the asset is included in profit or loss in the year the
asset is derecognized.
C/13 Barco annual report 2017
6. Leases
Finance leases, which effectively 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 effective 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 effectively 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 in available-for-sale financial assets
Investments are treated as financial assets available for sale
and are initially recognized at cost, being the fair value of the
consideration given and including acquisition costs asso-
ciated with the investment. For investments quoted in an
active market, the quoted market price is the best measure
of fair value. For investments not quoted in an active mar-
ket, the carrying amount is the historical cost, if a reliable
estimate of the fair value cannot be made. An impairment
loss is recorded when the carrying amount exceeds the
estimated recoverable amount. These investments are
presented on the balance sheet on the line ‘Investments’.
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. Inventories
Inventories are stated at the lower of cost or net realiz-
able 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.
10. Revenue recognition
Revenue is recognized when it is probable that the econo-
mic benefits will flow to the group and the revenue can be
reliably measured.
For product sales, revenue is recognized when the significant
risks and rewards of ownership of the goods have passed to
the buyer. Sales are recognized when persuasive evidence of
an arrangement exists, delivery has occurred, the fee is fixed
and determinable, and collectability is probable.
For 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.
For sales of services, revenue is recognized by reference to
the stage of completion.
C/14Barco annual report 2017Financial statements
11. Government grants
Government grants related to development projects, for
which costs are capitalized, are classified as deferred income
and recognized as income in proportion to the depreciation
of the underlying fixed assets. Government grants related to
research projects and other forms of government assistance
are recognized as income upon irreversible achievement and
by reference to the relevant expenses incurred.
12. Trade debtors and other amounts receivable
Trade debtors and other amounts receivable are shown on
the balance sheet at nominal value (in general, the original
amount invoiced) less an allowance for doubtful debts. Such
an allowance is recorded in operating income when it is
probable that the company will not be able to collect all
amounts due. Allowances are calculated on an individual
basis, and on a portfolio basis for groups of receivables that
are not individually identified as impaired. The calculation
of the allowances is based on an aging analysis of the trade
debtors.
13. 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.
14. 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 experi-
ence 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 affected by the plan before the balance
sheet date.
On the line item ‘Long-term provisions’, the company presents
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 2017 the minimum guaranteed rate of return remains
as in 2016 1.75% on employer contributions and employee
contributions. The old rates (3.25% on employer contributions
and 3.75% on employee contributions) continue to apply to
the accumulated past contributions in the group insurance
as at 31 December 2015. As a consequence, the defined con-
tribution plans have been accounted for as defined benefit
plans in the course of 2016. We refer to note 21 for more
detailed information.
C/15 Barco annual report 2017
15. 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.
16. 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 effective interest rate method.
Amortized cost is calculated by taking into account any issue
costs and any discount or premium on settlement.
17. Trade and other payables
Trade and other payables are stated at fair value, which is the
cost at recognition date.
18. 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.
19. 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.
20. 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 differences are classified in a separate
component of ‘other comprehensive income’, until disposal
of the investment.
21. 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 instru-
ments 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 effective part
of any gain or loss on the derivative financial instrument is
recognized directly in ‘other comprehensive income’ with the
ineffective part recognized directly in profit and loss.
C/16Barco annual report 2017Financial statements
22. 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 differences arising between
the tax basis of assets and liabilities and their carrying values
for financial reporting purposes. Tax rates used are expected
to apply to the period when the asset is realized or the liability
is settled, based on tax rates and tax laws that have been
enacted or substantially enacted at the balance sheet date.
Deferred tax assets are recognized for all deductible tem-
porary differences, carry-forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible tempo-
rary differences, carry-forward of unused tax credits and
tax losses can be utilized. The carrying amount of deferred
income tax assets is reviewed at each balance sheet date
and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part
of the deferred income tax asset to be utilized.
Deferred income tax assets and deferred income tax liabil-
ities are offset, if a legally enforceable right exists to set off
current tax assets against current income tax liabilities and
the deferred income taxes relate to the same taxable entity
and the same taxation authority.
23. 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
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.
24. Share-based payment
Barco created warrants for staff and non-executive directors
as well as for individuals who play an important role in the
company. According to the publication of IFRS2, 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.
25. 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
C/17 Barco annual report 2017
weighted average number of shares outstanding during the
period plus the dilutive effect 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.
26. 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 IFRSs. Then, on initial classification as held for sale,
non-current assets and disposal groups are recognized at
the lower of their carrying amounts and fair value less costs
to sell. Impairment losses are recognized for any initial or
subsequent write-down of the asset (or disposal group) to
fair value less costs to sell.
IFRS accounting standards adopted as of 2017
The Group applied for the first time certain standards and
amendments, which are effective for annual periods begin-
ning on or after 1 January 2017. The Group has not early
adopted any other standard, interpretation or amendment
that has been issued but is not yet effective.
Although these new standards and amendments apply for
the first time in 2017, they do not have a material impact on
the annual consolidated financial statements of the Group.
The nature and the impact of each of the following new
standards, amendments and/or interpretations are described
below:
• Amendments to IAS 7 Statement of Cash Flows – Disclo-
sure Initiative, effective 1 January 2017
• Amendments to IAS 12 Income Taxes – Recognition
of Deferred Tax Assets for Unrealised Losses, effective
1 January 2017
• Annual Improvements Cycle - 2014-20161, effective
1 January 2017
C/18Barco annual report 2017Financial statements
IFRS accounting standards issued but not yet effective as of 2017
Standards issued but not yet effective
The standards and interpretations that are issued, but not yet
effective, 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 effective.
• Amendments to IFRS 2 Share-based Payment - Clas-
sification and Measurement of Share-based Payment
Transactions1, effective 1 January 2018
• Amendments to IFRS 4 Insurance Contracts – Applying
IFRS 9 Financial instruments with IFRS 4 Insurance Con-
tracts1, effective 1 January 2018
• IFRS 9 Financial Instruments, effective 1 January 2018
• IFRS 15 Revenue from Contracts with Customers, includ-
ing amendments to IFRS 15: Effective date of IFRS 15 and
Clarifications to IFRS 15 Revenue from Contracts with
Customers2, effective 1 January 2018
• IFRS 16 Leases1, effective 1 January 2019
• IFRS 17 Insurance Contracts1, effective 1 January 2021
• Amendments to IAS 40 Investment Property – Transfers
of Investment Property1, effective 1 January 2018
• IFRIC 22 Foreign Currency Transactions and Advance
Consideration1, effective 1 January 2018
• IFRIC 23 Uncertainty over Income Tax Treatments1,
effective 1 January 2019
• Annual Improvements Cycle - 2014-20161, effective
1 January 2018
IFRS 9 Financial Instruments
In July 2014, the IASB issued the final version of IFRS 9 Finan-
cial Instruments that replaces IAS 39 Financial Instruments:
Recognition and Measurement and all previous versions
of IFRS 9. IFRS 9 brings together all three aspects of the
accounting for financial instruments project: classification
and measurement, impairment and hedge accounting.
IFRS 9 is effective for annual periods beginning on or after
1 January 2018, with early application permitted. Except for
hedge accounting, retrospective application is required but
providing comparative information is not compulsory. For
hedge accounting, the requirements are generally applied
prospectively, with some limited exceptions.
The Group will adopt the new standard on the required
effective date and doesn’t expect a significant impact on its
balance sheet and equity.
(a) Classification and measurement
The Group does not expect a significant impact on its balance
sheet or equity on applying the classification and measure-
ment requirements of IFRS 9. It expects to continue measuring
at fair value all financial assets currently held at fair value.
The equity shares in non-listed companies are intended to
be held for the foreseeable future. At the transition date, the
Group has one investment for which it decided to present
fair value changes through profit and loss and thereafter
for every new acquisition the decision will be made on an
instrument by instrument basis.
Loans as well as trade receivables are held to collect contrac-
tual cash flows and are expected to give rise to cash flows
representing solely payments of principal and interest. Thus,
the Group expects that these will continue to be measured at
amortised cost under IFRS 9. Following the assessment of the
1 Not yet endorsed by the EU as at 31 December 2017.2 IFRS 15 including Amendments to IFRS 15: Effective date of IFRS 15
has been endorsed by the EU. The Clarifications to IFRS 15 have not
yet been endorsed by the EU as at 31 December 2017.
C/19 Barco annual report 2017
contractual cash flow characteristics of its debt instruments
the Group concluded that the loans and trade receivables can
be classified at amortised cost measurement under IFRS9.
(b) Impairment
IFRS 9 requires the Group to record expected credit losses
on all of its debt securities, loans and trade receivables, either
on a 12-month or lifetime basis. The Group expects to apply
the simplified approach and record lifetime expected losses
on all trade receivables. The Group has concluded that the
application of the expected credit loss will not have a sig-
nificant impact on equity due to secured nature of its loans
and receivables.
(c) Hedge accounting
The Group believes that all existing hedge relationships that
are currently designated in effective hedging relationships
will still qualify for hedge accounting under IFRS 9. As IFRS
9 does not change the general principles of how an entity
accounts for effective hedges, the Group does not expect a
significant impact as a result of applying IFRS 9.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 was issued in May 2014 and establishes a five-step
model to account for revenue arising from contracts with
customers. Under IFRS 15, revenue is recognised at an
amount that reflects the consideration to which an entity
expects to be entitled in exchange for transferring goods or
services to a customer.
The new revenue standard will supersede all current revenue
recognition requirements under IFRS. Either a full retrospec-
tive application or a modified retrospective application is
required for annual periods beginning on or after 1 January
2018. Early adoption is permitted. The Group plans to adopt
the new standard on the required effective date using the full
retrospective method. The Group is considering the clarifi-
cations issued by the IASB in April 2016 and will monitor any
further developments. During 2017, the Group continued its
assessment started in 2016 and concluded that there will not
be an impact on revenues.
(a) Sale of goods
Contracts with customers in which equipment sale is gene-
rally expected to be the only performance obligation are not
expected to have any impact on the Group’s profit or loss.
The Group expects the revenue recognition to occur at a
point in time when control of the asset is transferred to the
customer, generally on delivery of the goods.
In preparing to IFRS 15, the Group is considering the following
warranty options: the Group provides warranties for general
repairs of which the Group determined that such warran-
ties are assurance-type warranties which will continue to be
accounted for under IAS 37 Provisions, Contingent Liabilities
and Contingent Assets consistent with its current practice.
C/20Barco annual report 2017Financial statements
(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. Currently, the Group accounts for the equipment
and service as separate deliverables of bundled sales and
allocates consideration between these deliverables using the
relative fair value approach. The Group recognises service
revenue by reference to the stage of completion. Under IFRS
15, allocation will be made based on relative stand-alone
selling prices. As a result, the allocation of the consideration
and, consequently, the timing of the amount of revenue re-
cognised in relation to these sales may be impacted. The
Group has assessed that the services are satisfied over time
given that the customer simultaneously receives and con-
sumes the benefits provided by the Group. Consequently,
the Group would continue to recognise revenue for these
service contracts/service components of bundled contracts
over time rather than at a point of time.
(c) Presentation and disclosure requirements
IFRS 15 provides presentation and disclosure requirements,
which are more detailed than under current IFRS. The presen-
tation requirements represent a significant change from
current practice and significantly increase the volume of
disclosures required in Group’s financial statements. Many
of the disclosure requirements in IFRS 15 are completely
new. In 2016, the Group developed and started, and in 2017
continued, testing of appropriate systems, internal controls,
policies and procedures necessary to collect and disclose
the required information.
IFRS 16 Leasing
IFRS 16 was issued in January 2016 and it replaces IAS 17
Leases, IFRIC 4 Determining whether an Arrangement con-
tains a Lease, SIC-15 Operating Leases-Incentives and SIC-27
Evaluating the Substance of Transactions Involving the Legal
Form of a Lease. IFRS 16 sets out the principles for the recog-
nition, measurement, presentation and disclosure of leases
and requires lessees to account for all leases under a single
on-balance sheet model similar to the accounting for finance
leases under IAS 17. The standard includes two recognition
exemptions for lessees – leases of ’low-value’ assets (e.g.,
personal computers) and short-term leases (i.e., leases with
a lease term of 12 months or less). At the commencement
date of a lease, a lessee will recognize a liability to make lease
payments (i.e., the lease liability) and an asset representing the
right to use the underlying asset during the lease term (i.e.,
the right-of-use asset). Lessees will be required to separately
recognize the interest expense on the lease liability and the
depreciation expense on the right-of-use asset.
Lessees will be also required to remeasure the lease liability
upon the occurrence of certain events (e.g., a change in
the lease term, a change in future lease payments resulting
from a change in an index or rate used to determine those
payments). The lessee will generally recognize the amount
of the remeasurement of the lease liability as an adjustment
to the right-of-use asset.
Lessor accounting under IFRS 16 is substantially unchanged
from today’s accounting under IAS 17. Lessors will continue
to classify all leases using the same classification principle
as in IAS 17 and distinguish between two types of leases:
operating and finance leases.
C/21 Barco annual report 2017
IFRS 16 also requires lessees and lessors to make more
extensive disclosures than under IAS 17.
IFRS 16 is effective for annual periods beginning on or after
1 January 2019. Early application is permitted, but not
before an entity applies IFRS 15 Revenue from Contract
with Customers. A lessee can choose to apply the standard
using either a full retrospective or a modified retrospective
approach. The standard’s transition provisions permit certain
reliefs.
During 2017, the Group performed a preliminary assessment
of IFRS 16, which is subject to changes arising from a more
detailed ongoing analysis. The Group checked the com-
pleteness of its lease contracts in its contract database and
assessed whether these contracts will meet the definition of
lease in accordance with IFRS16. Based on this analysis, the
Group expects that it will still meet all requirements of the
loan covenants on its existing credit facilities after applying
IFRS16.
Reclassifications of professional services and customer services overhead
In line with international accounting practices, Barco has
reclassified professional services overhead associated with
project management & customer services from sales and
marketing expenses to cost of goods sold.
This reclassification impacts gross profit margin and accord-
ingly the results for 2015 have been restated. There is no
impact on EBIT or net income resulting from this reclassi-
fication.
Prior-period amounts have been revised to reflect profes-
sional service and customer services overhead in Gross Profit
(as part of the full cost of inventory) instead of as part of
Indirect Costs.
The table below outlines the impact of these reclassifications.
There is no impact on net income nor retained
earnings as of 31 December, 2015.
IN THOUSANDS OF EURO 2015
Project overhead -4,159
Services overhead -18,580
Decrease in gross profit -22,739
Decrease in sales and marketing expenses 22,739
Impact on EBIT -
C/22Barco annual report 2017Financial statements
Critical accounting judgments and key sources of estimation uncertainty
General business risks
We refer to the chapter ‘Risk factors’ on C/87 for an over-
view of the risks affecting businesses of the Barco Group.
Key sources of estimation uncertainty
• 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 credits
can be utilized. In making its judgment, management takes
into account elements such as long-term business strategy
and tax planning opportunities (see note 13 ‘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 (see note
10.’Goodwill’).
• Write offs on inventories: inventories are stated at the
lower cost or net realizable value. The calculation of the
allowance for slow-moving inventory is based on consis-
tently applied write off rules, which depend on both his-
torical and future demand, of which the latter is subject
to uncertainty due to rapid technological changes.
Accounting treatment of development expenses
• Shorter life cycles, unpredictability of which development
projects will be successful, and the volatility of techno-
logies and markets in which Barco operates led the
Board of Directors to conclude that Barco’s development
expenses in 2015, 2016 and 2017 no longer meet the
criteria of IAS38.57. As the criteria of IAS38.57 are no longer
fulfilled, our accounting policy, with respect to research
and development costs, no longer allows the capitalization
of development expenses. Before 2015, development
costs were capitalized in accordance with the accounting
policy.
Capitalization of costs was based on management’s
judgment that technological and economic feasibility
was confirmed, usually when a product development
project reached a defined milestone according to an esta-
blished project management model. In determining the
amounts to be capitalized management made assump-
tions regarding the expected future cash generation of
the project, discount rates to be applied and the expected
period of benefits.
• Impairment of development costs: Barco has tested the
capitalized development for impairment if there are
indications that capitalized development might be
impaired (see note 11. ‘Capitalized development costs’).
Defined benefit obligations
• Defined benefits: the cost of the defined benefit pension
plan (see note 21) and the present value of the pension
obligation are determined using actuarial valuations. An
actuarial valuation involves making various assumptions
that may differ 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.
C/23 Barco annual report 2017
Assets held for sale
• Assets held for sale; Barco announced on 4 December
2017, that it has reached an agreement with China Film
Group (CFG) to change the ownership structure of
BarcoCFG for the Chinese cinema market.
Barco will sell 9% of its shares in the BarcoCFG to China
Film Group in exchange for 175 million CNY (or 22.4
million euro), thereby reducing its stake in the subsidiary
from 58% to 49% and by consequence will lose control
once the transaction is completed. The new ownership
structure is expected to take effect by mid-2018 pending
customary regulatory approvals after which Barco, as a
result of the change in control, will report financial results
of BarcoCFG using the equity method.
Operations of BarcoCFG are classified as a disposal group
held for sale, as this will impact the consolidation method.
Barco considered the subsidiary to meet the criteria to
be classified as held for sale at the reporting date for the
following reasons:
• The shares of BarcoCFG are available for immediate
sale and can be sold to the buyer in its current condition.
• The actions to complete the sale were initiated, subject to
Chinese government approval, which is a customary
process and there is no indication that it would stop the
disposal. Therefore the sale is considered as highly
probable.
In connection with the held for sale classification, Barco
allocated goodwill to BarcoCFG. We refer to note 10 for
the judgements applied for this allocation.
For more details on the assets held for sale,
we refer to Note 3.
C/24Barco annual report 2017Financial statements
1. Consolidated companies
1.1. List of consolidated companies on 31 December 2017
COUNTRYOF INCORPORATION LEGAL ENTITY REGISTERED OFFICE %
Europe, Middle-East and Africa
BELGIUM Barco Coordination Center NV Beneluxpark 21, 8500 Kortrijk BELGIUM 100
BELGIUM Barco Integrated Solutions NV Beneluxpark 21, 8500 Kortrijk BELGIUM 100
DENMARK Barco A/S c/o PwC, att. RAS Strandvejen 44, 2900 Hellerup DENMARK 100
FRANCE Barco SAS 177 avenue Georges Clémenceau, Immeuble "Le Plein Ouest", 92000 Nanterre FRANCE 100
GERMANY Barco Control Rooms GmbH Greschbachstrasse 5 a, 76229 Karlsruhe GERMANY 100
GERMANY Barco GmbH Greschbachstrasse 5 a, 76229 Karlsruhe GERMANY 100
ITALY Barco S.r.l. Via Monferrato 7, 20094 Corsico-MI ITALY 100
ITALY FIMI S.r.l. c/o Studio Ciavarella, via Vittor Pisani n. 6, 20124 Milano ITALY 100
UNITEDARAB EMIRATES*
Barco Middle East L.L.C. Concord Tower, Suite 1212, PO Box 487786, Dubai Media City, Dubai UNITED ARAB EMIRATES 49*
NETHERLANDS Barco B.V. Helmond NETHERLANDS 100
NORWAY Barco Fredrikstad AS Habornveien 53, 1630 Gamle Fredrikstad NORWAY 100
NORWAY Habornveien 53 AS Habornveien 53, 1630 Gamle Fredrikstad NORWAY 92.18
NORWAY Habornveien Hjemmel AS Habornveien 53, 1630 Gamle Fredrikstad NORWAY 100
POLAND Barco Sp. z o.o. Annopol 17, 03-236 Warsaw POLAND 100
RUSSIA Barco Services OOO ulitsa Kondratyuka, 3, 129515 Moscow RUSSIAN FEDERATION 100
SPAIN Barco Electronic Systems, S.A. Travesera de las Corts 371, 08029 Barcelona SPAIN 100
SWEDEN Barco Sverige AB c/o Grant Thornton, Box 2230, 403 14 Göteborg SWEDEN 100
UNITED KINGDOM Barco Ltd. Venture House, 2 Arlington Square, Downshire Way, RG12 1WA Bracknell, Berkshire UNITED KINGDOM 100
UNITED KINGDOM JAOtech Ltd. - in liquidation Building 329, Doncastle Road, RG12 8PE Bracknell, Berkshire UNITED KINGDOM 100
Americas
BRAZIL Barco Ltda. Av. Ibirapuera, 2332, 8° andar, conj 82, Torre II, Moema, 04028-002 São Paulo BRAZIL 100
CANADA X2O Media Inc. 147 Saint Paul Street West, Suite 300, H2Y 1Z5 Montreal, Quebec CANADA 100
CANADA MTT Innovation Incorporated Suite 2400, 745 Thurlow Street, V6E 0C5 Vancouver, BC CANADA 100
COLOMBIA Barco Colombia SAS Carrera 15, n° 88-64, Torre Zimma Oficina 610, 110221 Bogota COLOMBIA 100
MEXICO Barco Visual Solutions S.A. de C.V. Mariano Escobedo No. 476 Piso 10 Col. Anzures, C.P. 11590 D.F. México MEXICO 100
UNITED STATES Barco, Inc. 1209 Orange Street, 19801 Wilmington DE UNITED STATES 100
UNITED STATES Advan Int'l Corp. 47817 Fremont Blvd. , 94538 Fremont CA UNITED STATES 100
(*) Barco has control over the relevant activities of the entity by virtue of a contractual agreement with the local investor .
C/25 Barco annual report 2017
COUNTRYOF INCORPORATION LEGAL ENTITY REGISTERED OFFICE %
Asia-Pacific
AUSTRALIA Barco Systems Pty. Ltd. 2 Rocklea Drive, VIC 3207 Port Melbourne AUSTRALIA 100
CHINA Barco Trading (Shanghai) Co., Ltd. Rm501, 180 Hua Shen Road, Wai Gao Qiao Free Trade Zone, 200031 Shanghai CHINA 100
CHINA Barco Visual (Beijing) Electronics Co., Ltd. No. 16 Changsheng Road, Chang Ping Park, Zhong Guan Cun Science Park, Chang Ping District, 102200 Beijing CHINA 100
CHINA Barco Visual (Beijing) Trading Co., Ltd. No. 16 Changsheng Road, Chang Ping Park, Zhong Guan Cun Science Park, Chang Ping District, 102200 Beijing CHINA 100
CHINA CFG Barco (Beijing) Electronics Co., Ltd. No. 16 Changsheng Road, Chang Ping Park, Zhong Guan Cun Science Park, Chang Ping District, 102200 Beijing CHINA 58
CHINABarco China Electronic Visualiza-tion Technology (Nanjing) Co., Ltd.
No.1, Hengtong Road, Nanjing development zone, 210038 Nanjing, Jiangsu CHINA 65
HONG KONG Barco Ltd. Suite 2607-2610, 26/F, Prosperity Center, 25 Chong Yip Street, Kwun Tong, Kowloon HONG KONG 100
HONG KONG Barco Visual Electronics Co., Ltd. Suite 2607-2610, 26/F, Prosperity Center, 25 Chong Yip Street, Kwun Tong, Kowloon HONG KONG 100
HONG KONG Barco China (Holding) Ltd. Suite 2607-2610, 26/F, Prosperity Center, 25 Chong Yip Street, Kwun Tong, Kowloon HONG KONG 100
HONG KONG Barco CEC (Hong Kong) Limited Unit 2607-10, 26/F, Prosperity Center, 25 Chong Yip Street, Kwun Tong, Kowloon HONG KONG 100
INDIA Barco Electronic Systems Pvt. Ltd.c/o Perfect Accounting & Shared Services P.Ltd., E-20, 1st & 2nd Floor, Main Market, Hauz Khas, 110016 New Delhi INDIA
100
JAPAN Barco Co., Ltd. Yamato International Bldg 8F, 5-1-1 Heiwajima, Ota-ku, 143-0006 Tokyo JAPAN 100
SOUTH KOREA Barco Ltd. 42 Youngdong-daero 106-gil, Gangnam-gu, 06172 Seoul KOREA, REPUBLIC OF 100
MALAYSIA Barco Sdn. Bhd. No. 13A, Jalan SS21/56B, Damansara Utama, 47400 Petaling Jaya, Selangor MALAYSIA 100
SINGAPORE Barco Singapore Private Limited No. 10 Changi South Lane #04-01, 486162 Singapore SINGAPORE 100
TAIWAN Barco Limited 33F., No. 16, Xinzhan Rd., Banqiao Dist., 220 New Taipei City TAIWAN, PROVINCE OF CHINA 100
TAIWAN Barco Taiwan Technology Ltd. No. 5, Ti Tang Gang Rd., Feng Hua Village, Xin Shi District, 74148 Tainan City TAIWAN, PROVINCE OF CHINA 90
C/26Barco annual report 2017Financial statements
1.2. List of equity accounted companies on 31 December 2017
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 2017:
• Barco GmbH
• Barco Control Rooms GmbH
These companies are included in the consolidation scope
of Barco Consolidated 2017 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 2017:
• Barco Ltd.
COUNTRYOF INCORPORATION LEGAL ENTITY REGISTERED OFFICE %
Americas
UNITED STATES Audience Entertainment LLC 108 West 13th Street, 19801 Wilmington, Delaware UNITED STATES 18.9
UNITED STATES CCO Barco Airport Venture LLC Corporation Trust Center, 1209 Orange Street, 19801 Wilmington-DE UNITED STATES 35
C/27 Barco annual report 2017
1.3. Acquisitions and divestments
2017
Acquisition of assets of P2M
On 31 August 2017, Barco acquired the assets of P2M, former
distribution agent of Barco for wePresent - an Awind
solution - in EMEA and the Americas. The total acquisition
cost amounts to 2.6 million euro upfront payment and a
contingent consideration of expected 0.5 million euro. The
full cost is allocated to customer list. IFRS3 is not applicable
as the acquisition of the asset does not constitute a business.
Acquisition of Habornveien 53 AS
On 15 December 2017, Barco acquired 51% extra shares in
the real-estate company of which Barco previously owned
42%. The total acquisition cost amounts to 1.9 million euro
and is mainly allocated to land and buildings. IFRS3 is not
applicable as the acquisition is not a business combination.
Divestment of Barco Lighting Systems
On April 1st, 2017 Barco reached an agreement with US-based
lighting company ETC to sell its Lighting activity, Barco Light-
ing Systems (also known as High End Systems) for an amount
of 7.5 million dollar (7 million euro), of which 0.75 million
dollar (0.7 million euro) was put in escrow over a period of
eighteen months (with projected full release on October
1st, 2018). This escrow amount was not recognized in profit
and loss in 2017. Closing of the transaction happened on
the same day. In addition, a price correction caused by an
adjustment on the closing net working capital in comparison
to the agreed target working capital of 0.7 million euro was
paid to ETC in May 2017.
The operating results of the Lighting segment including the
gain on the transaction resulted in a break-even result in
2017. We refer to note 26 'Cash flow statement: effect of
acquisitions and disposals' for impact of the disposal on the
cash flow of the group.
Divestment of Barco Silex SA
On December 22, 2017 Barco reached an agreement with the
Belgian company Anseribus NV regarding the sale of 100% of
the shares of Barco Silex for an amount of 0.5 million euro,
without any escrow. The transaction was cash and debt free.
Closing of the transaction happened on the same day. The
result on the transaction was break-even. We refer to note
26 'Cash flow statement: effect of acquisitions and disposals'
for impact of the disposal on the cash flow of the group.
C/28Barco annual report 2017Financial statements
2016
Acquisition of MTT and Medialon
In April 2016, Barco acquired 100% of the shares of the
US-based company Medialon Inc, for which the major part
of the consideration paid is allocated to in-process devel-
opment. On June 10, 2016, Barco announced it acquired
100% of the shares of the Canadian-based company MTT
Innovation Inc, a developer of next-generation projection
technology with expertise in high dynamic range (HDR),
applied imaging algorithms, advanced color science and
specialized hardware development. MTT’s technology is
still in a research phase and will need further de-risking
and development over the years to come. Major part of the
consideration paid is hence allocated to in-process devel-
opment. Barco continues to invest in the acquired in-process
development but as per 31 December 2016 those additional
development efforts cannot be capitalized since Barco is
unable to demonstrate that the criteria of IAS 38 are fulfilled.
The total aggregated acquisition cost paid at closing amounts
to 13.1 million dollar (11.7 million euro), of which 1.5 million
dollar was put in escrow. On an aggregate basis, the con-
tracts further provide for a deferred payment of 6 million
dollar (5.4 million euro), 2 million dollar paid in 2017, the
remaining deferred consideration is payable over the next 2
years and three earn-outs. One of the earn-outs is subject
to the filing of patents on the in-process technology and is
capped at 5 million dollar (4.5 million euro) of which one
patent was filed in 2017. The two other earn-outs are subject
to future performance and one is capped at 15 million dollar
while the other is uncapped. Barco recognized as contingent
consideration at acquisition only the earn-out related to the
patent filing. The earn-out which is capped at 15 million dollar
is linked to future results as well as to the retention of the
former shareholders while the uncapped earn-out is only
based on future results. At the time of the acquisition Barco
was unable to make a reliable estimate.
The in-process technology of MTT has been allocated to
the Entertainment division and the in-process technology
of Medialon has been allocated to the Enterprise division.
Aggregated transaction costs of 0.2 million euro have been
expensed and are included in administrative expenses in the
statement of profit or loss and are part of operating cash
flows in the statement of cash flows.
The acquisitions have been accounted for using the acquisi-
tion method conform IFRS3 Business Combinations (Revised).
The following table summarizes the aggregated consider-
ation paid for MTT and Medialon and the amounts of the
aggregated assets acquired and liabilities assumed recog-
nized at acquisition date, including the payments of 2017.
C/29 Barco annual report 2017
As the effective control is transferred on 1 May, 2016, the
Medialon figures are taken up in the figures of the Group
from 1 May, 2016 onwards. In 2016, Medialon has contributed
8 months of turnover and EBITDA: 0.9 million euro to the
total turnover of the Group, contributing to the EBITDA 0.1
million euro. The effective control for MTT has transferred
on June 1st, 2016 and as a result the MTT figures are taken
up in the figures of the Group from 1 June, 2016 onwards.
In 2016, seven months further development of the acquired
technology of MTT has impacted the Group EBITDA for an
amount of -0.6 million euro.
Aggregated assets and liabilities acquired 06/01/2016
IN THOUSANDS OF EUROBefore
acquisitionFair value
restatementsAfter
acquisition
Other intangible fixed assets 79 28,897 28,976
Other non-current assets 60 - 60
Total non-current assets 139 28,897 29,036
Total current assets 509 - 509
Deferred tax liability - -7,953 -7,953
Total non-current liabilities - -7,953 -7,953
Total current liabilities -561 - -561
Cash 504 - 504
Total net assets acquired 591 20,944 21,535
Upfront consideration 11,673
Deferred consideration 5,379
Contingent consideration 4,483
Aggregated acquisition cost 21,535
Goodwill -
Cash flow on acquisition
Net cash acquired with the subsidiary 504
Cash paid in 2016 -11,673
Cash paid in 2017 -2,022
Net cash flow on acquisition -13,191
C/30Barco annual report 2017Financial statements
2015
Acquisition of Advan
Per 12 June 2015, Barco acquired 100% of the shares of
the US-based company Advan Int’l Corp, a manufacturer of
high-quality LCD displays for medical modality applications.
The acquisition fits within Barco’s strategy to grow its mar-
ket share in the modality imaging segment and strengthen
its partnerships with leading medical device manufacturers
worldwide.
As the effective control was transferred on 1 July, 2015, the
Advan figures were taken up in the figures of the Barco Group
from 1 July, 2015 onwards.
In 2015 Advan contributed six months of turnover and
EBITDA: 10.7 million euro to the total turnover of the
Group, contributing positive to the net result (1.1 million
euro EBITDA).
If the acquisition had taken place at the beginning of the year,
the total turnover would have been 19.5 million euro and the
EBITDA for the period would have been 0.9 million euro.
Transaction costs of 0.1 million euro were expensed and
included in administrative expenses in the statement of profit
or loss and were part of operating cash flows in the statement
of cash flows.
The acquisition was accounted for using the acquisition
method conform IFRS3 Business Combinations (Revised).
The total acquisition cost paid at closing amounted to 13.5
million dollar (11.8 million euro), of which 3.4 million dollar
(3.0 million euro) was put in escrow. The contract further
provides for an additional earn-out, which is based on the
future performance of Advan and is capped at 5 million dollar
(4.4 million euro) over the next three years. In 2016, the earn-
out targets were not met and therefore no earn-out had to
be paid in the first year after acquisition. The earn-out liability
was not released as the earn-out could still be reached over
the remaining years of the earn-out period (which is June
2015 until May 2018) and at the end of 2016 we did not have
enough information to conclude that the earn-out could
not be reached anymore. Also in 2016 a price correction,
caused by an adjustment on the closing net working capital
in comparison to the agreed target working capital, of 0.8
million dollar (0.8 million euro) was released from escrow.
Together with a correction of the net assets, this resulted in
a decrease of the goodwill of 0.7 million dollar (0.6 million
euro). See note 10. In 2017, an earn-out of 0.5 million dollar
(0.4 million euro) is realized on the second earn-out period.
A change in the estimated earn-out resulted in 0.2 million
euro gain in other operating income. Additionally, there was
a release from escrow of 0.7 million euro under the reps
and warranties of the agreement to cover for costs incurred.
The goodwill recognized at acquisition is related to the future
cash flows Barco expects to realize based on the sale of
products to the Advan customers. The goodwill is not tax
deductible. The goodwill has been assigned to the Health-
care division.
The following table summarizes the consideration paid for
Advan and the amounts of the assets acquired and liabilities
assumed recognized at the acquisition date.
C/31 Barco annual report 2017
Advan assets and liabilities 07/01/2015
IN THOUSANDS OF EUROBefore
acquisitionFair value
restatementsAfter
acquisition
Total non-current assets 1,049 1,657 2,707
Inventory 2,427 -1,029 1,398
Trade receivables 2,815 - 2,815
Other current assets 449 211 661
Total current assets 5,692 -818 4,874
Deferred tax liability - -74 -74
Total non-current liabilities - -74 -74
Total current liabilities -2,934 -465 -3,398
Cash 2,168 - 2,168
Total net assets acquired 5,976 300 6,276
Upfront consideration 9,343
Contingent consideration 1,123
Total acquisition cost 10,466
Goodwill 4,190
Discontinued operations
On September 29th, 2014, Barco reached an agreement with
US-based aerospace and defense group Esterline Corpora-
tion to sell its Defense & Aerospace division. The sale, which
covers both shares of the legal entities Barco Singapore
Private Ltd, Barco Texen, Barco Federal Systems LLC and
Barco Electronic Systems Ltd and assets of the Defense &
Aerospace division in Belgium and the United States, is
valued at 150 million euro.
Closing was finalized on January 31st 2015.
Cash flow on acquisition
Net cash acquired with the subsidiary 2,168
Cash paid -11,044
Net cash flow on acquisition -8,876
C/32Barco annual report 2017Financial statements
2.1. Basis of operating segments information
Effective 1 January 2015, Barco streamlined its organization
into three divisions: Entertainment, Enterprise and Healthcare
which reflects the products and services that it offers to its
customers.
- Entertainment: 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
which also includes the Medialon activities.
- 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.
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 finan-
cial performance and therefore cannot be aggregated into
reportable 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.
As of January 1, 2016, the remaining projector activity which
had been part of Enterprise was transferred to the Entertain-
ment division. The 2015 financial segment data have not
been restated for comparison reasons as the information is
not available and the cost to develop it is excessive. In this
case in accordance with IFRS8.30, the segment information
for the current period should be presented on both the old
and the new bases of segmentation. However the necessary
information is unavailable and the cost of developing it is
excessive, therefore Barco can also not present the current
information on the old basis of segmentation.
Transfer prices between operating segments are on an arm’s
length basis in a manner similar to transactions with third
parties.
We refer to C/18 for more explanation on the activities per-
formed by each division.
2. Operating segments information
C/33 Barco annual report 2017
IN THOUSANDS OF EURO 2017 2016 2015Variance
2017 - 2016Variance
2016-2015
Net sales 533,345 100.0% 578,151 100.0% 514,474 100.0% -7.7% 12.4%
- external sales 533,285 100.0% 578,057 100.0% 513,332 99.8% -7.7% 12.6%
- interdivision sales 61 0.0% 94 0.0% 1,142 0.2% -35.5% -91.8%
Cost of goods sold -370,428 -69.5% -416,628 -72.1% -361,097 -70.2% -11.1% 15.4%
Gross profit 162,917 30.5% 161,523 27.9% 153,377 29.8% 0.9% 5.3%
EBITDA 38,922 7.3% 30,446 5.3% 43,561 8.5% 27.8% -30.1%
Amortization capitalized development - 0.0% 10,142 1.8% 21,251 4.1% -100.0% -52.3%
Depreciation TFA and (acquired) intangibles
15,718 2.9% 14,787 2.6% 8,526 1.7% 6.3% 73.4%
Adjusted EBIT 23,205 4.4% 5,517 1.0% 13,784 2.7% 320.6% -60.0%
Capital expenditures TFA and software 10,890 2.0% 10,345 1.8% 5,184 1.0% 5.3% 99.5%
Segment assets 228,108 315,164 295,242
Segment liabilities 145,780 269,241 243,894
2.2. Entertainment
2.3. Enterprise
IN THOUSANDS OF EURO 2017 2016 2015Variance
2017 - 2016Variance
2016-2015
Net sales 308,161 100.0% 289,652 100.0% 300,391 100.0% 6.4% -3.6%
- external sales 308,161 100.0% 289,652 100.0% 299,627 99.7% 6.4% -3.3%
- interdivision sales - 0.0% - 0.0% 764 0.3% - -100.0%
Cost of goods sold -159,264 -51.7% -156,758 -54.1% -191,452 -63.7% 1.6% -18.1%
Gross profit 148,898 48.3% 132,895 45.9% 108,939 36.3% 12.0% 22.0%
EBITDA 40,662 13.2% 32,984 11.4% 11,081 3.7% 23.3% 197.7%
Amortization capitalized development - 0.0% 5,440 1.9% 15,400 5.1% -100.0% -64.7%
Depreciation TFA and (acquired) intangibles
13,295 4.3% 8,904 3.1% 9,335 3.1% 49.3% -4.6%
Adjusted EBIT 27,368 8.9% 18,640 6.4% -13,654 -4.5% 46.8% -236.5%
Capital expenditures TFA and software 7,807 2.5% 9,041 3.1% 7,307 2.4% -13.7% 23.7%
Segment assets 149,633 177,073 179,330
Segment liabilities 71,224 73,364 71,492
Segment assets and liabilities for Entertainment are excluding the assets held for sale.
C/34Barco annual report 2017Financial statements
2.4. Healthcare
IN THOUSANDS OF EURO 2017 2016 2015Variance
2017 - 2016Variance
2016-2015
Net sales 243,260 100.0% 234,633 100.0% 215,984 100.0% 3.7% 8.6%
- external sales 243,259 100.0% 234,633 100.0% 215,896 100.0% 3.7% 8.7%
- interdivision sales - 0.0% - 0.0% 88 0.0% 0.0% -100.0%
Cost of goods sold -150,922 -62.0% -150,246 -64.0% -140,535 -65.1% 0.4% 6.9%
Gross profit 92,337 38.0% 84,386 36.0% 75,449 34.9% 9.4% 11.8%
EBITDA 27,533 11.3% 24,572 10.5% 19,403 9.0% 12.1% 26.6%
Amortization capitalized development - 0.0% 7,290 3.1% 12,790 5.9% -100.0% -43.0%
Depreciation TFA and (acquired) intangibles
4,865 2.0% 4,881 2.1% 5,045 2.3% -0.3% -3.3%
Adjusted EBIT 22,668 9.3% 12,400 5.3% 1,568 0.7% 82.8% 690.7%
Capital expenditures TFA and software 4,464 1.8% 4,855 2.1% 2,239 1.0% -8.1% 116.9%
Segment assets 104,373 102,768 123,621
Segment liabilities 63,654 59,847 63,006
C/35 Barco annual report 2017
2.5. Reconciliation of segment information with group information
IN THOUSANDS OF EURO 2017 2016 2015
External sales
Entertainment 533,285 578,057 513,332
Enterprise 308,161 289,652 299,627
Healthcare 243,259 234,633 215,896
Total external sales segments 1,084,706 1,102,342 1,028,856
Net Income
EBITDA
Entertainment 38,922 30,446 43,561
Enterprise 40,662 32,984 11,081
Healthcare 27,533 24,572 19,403
Amortization
Entertainment - 10,142 21,251
Enterprise - 5,440 15,400
Healthcare - 7,290 12,790
Depreciation
Entertainment 15,718 14,787 8,526
Enterprise 13,295 8,904 9,335
Healthcare 4,865 4,881 5,045
Adjusted EBIT
Entertainment 23,205 5,517 13,784
Enterprise 27,368 18,640 -13,654
Healthcare 22,668 12,400 1,568
Total adjusted EBIT 73,241 36,557 1,698
Restructuring and impairments -32,404 -12,939 -29,099
Gain on sale building - 6,866 -
Other non-operating income (expense) - net - 33 35
C/36Barco annual report 2017Financial statements
IN THOUSANDS OF EURO 2017 2016 2015
EBIT 40,836 30.516 -27.366
Interest income (expense) - net 2,013 1.240 3.006
Income/(loss) before taxes 42,849 31,756 -24,360
Income taxes -11,355 -6,345 4,879
Result after taxes 31,494 25,411 -19,481
Share in the result of joint ventures and associates 1,290 263 -1,073
Net income from continuing operations 32,784 25,674 -20,554
Net income from discontinued operations - - 47,031
Net income 32,784 25,674 26,477
Non-controlling interest 8,008 14,652 9,009
Net Income attributable to the equity holder of the parent 24,776 11,023 17,468
Net Income (continuing) attributable to the equity holder of the parent 24,776 11,023 -29,563
Net Income (discontinued) attributable to the equity holder of the parent - - 47,031
Note: For 2015 and 2016 adjusted EBIT includes amortization on capitalized development due to the change
in accounting treatment of development expenses since 2015.
C/37 Barco annual report 2017
IN THOUSANDS OF EURO 2017 2016 2015
Assets
Segment assets
Entertainment 228,108 315,164 295,242
Enterprise 149,633 177,073 179,330
Healthcare 104,373 102,768 123,621
Total segment assets 482,114 595,005 598,193
Investments 7,906 14,460 9,031
Deferred tax assets 69,859 89,100 78,031
Cash and cash equivalents 254,130 353,549 341,277
Other non-allocated assets 111,450 107,119 113,795
Assets held for sale 139,536 - -
Total assets 1,064,996 1,159,231 1,140,327
Liabilities
Segment liabilities
Entertainment 145,780 269,241 243,894
Enterprise 71,224 73,364 71,492
Healthcare 63,654 59,847 63,006
Total segment liabilities 280,658 402,452 378,391
Equity attributable to equityholders of the parent 579,449 590,243 597,739
Non-controlling interest 14,065 25,244 13,925
Long-term debts 41,036 66,811 79,527
Deferred tax liabilities 4,647 8,813 4,462
Current portion of long-term debts 10,000 11,500 10,000
Short-term debts 686 2,085 2,124
Other non-allocated liabilities 33,787 52,083 54,158
Liabilities directly associated with the assets held for sale 100,669 - -
Total equity and liabilities 1,064,996 1,159,231 1,140,327
C/38Barco annual report 2017Financial statements
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
(NA and LATAM) and Asia-Pacific (APAC).
We refer to the ‘Comments on the results’ on A/92 for a split
of revenue from external customers based on the geographi-
cal 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 38.3 million euro of the Group
revenues in 2017 versus 50.0 million euro in 2016 and 48.7
million in 2015.
In 2017, Belgium’s non-current assets amount to 170.6 mil-
lion euro (rest of the world 194.1 million euro); in 2016 183.6
million euro (rest of the world 243.0 million euro) and in 2015
180.8 million euro (rest of the world 229.9 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 2017 2016 2015
Net sales
Europe 339,526 31.3% 344,355 31.2% 332,589 32.3%
Americas 394,509 36.4% 394,634 35.8% 384,921 37.4%
Asia-Pacific 350,671 32.3% 363,354 33.0% 311,346 30.3%
Total 1,084,706 100% 1,102,342 100% 1,028,856 100%
Total assets
Europe 458,383 43.0% 494,569 42.7% 559,733 49.1%
Americas 185,006 17.4% 241,994 20.9% 220,887 19.4%
Asia-Pacific 421,607 39.6% 422,669 36.5% 359,707 31.5%
Total 1,064,995 100% 1,159,232 100% 1,140,327 100%
Purchases of tangible and intangible fixed assets
Europe 22,094 82.0% 25,251 75.7% 35,471 82.5%
Americas 1,578 5.9% 2,732 8.2% 1,030 2.4%
Asia-Pacific 3,272 12.1% 5,370 16.1% 6,484 15.1%
Total 26,944 100% 33,353 100% 42,984 100%
C/39 Barco annual report 2017
3. Assets held for sale
We refer to C/23 on the critical accounting judgements for
more background on the intended sale of 9% of Barco’s cur-
rent stake of 58% in BarcoCFG. The major classes of assets
and liabilities of BarcoCFG classified as held for sale as at 31
December are, as follows:
IN THOUSANDS OF EURO NOTE 31 DEC 2017
ASSETS
Goodwill 10 8,000
Deferred tax assets 13 10,174
Non-current assets 18,174
Inventory 14 21,309
Trade debtors 15 32,668
Cash and cash equivalents 16 67,385
Current assets 121,362
Total assets 139,536
LIABILITIES
Non-current accrued charges and deferred income 6,167
Non-current liabilities 6,167
Trade payables 20 11,605
Advances received from customers 20 21,814
Tax payables 13,600
Employee benefit liabilities 1,179
Accrued charges and deferred income 42,696
Provisions 21 3,608
Current liabilities 94,502
Total liabilities 100,669
Per end of 2017, -1.8 million euro CTA was included in equity for BarcoCFG. Once deconsolidated,
this will be recycled through profit and loss.
C/40Barco annual report 2017Financial statements
4. Income from continued operations (EBIT)
IN THOUSANDS OF EURO 2017 2016 2015
Sales 1,084,706 1,102,342 1,028,856
Cost of goods sold -680,554 -723,538 -691,091
Gross profit 404,152 378,804 337,765
Gross profit as % of sales 37.3% 34.4% 32.8%
Indirect costs -327,201 -345,573 -339,028
Other operating income (expenses) - net -3,710 3,325 2,960
Adjusted EBIT 73,241 36,557 1,698
Adjusted EBIT as % of sales 6.8% 3.3% 0.2%
Restructuring and impairments -32,404 -12,939 -29,099
Gain on sale building - 6,866 -
Other non-operating income/(expense) - 33 35
EBIT 40,836 30,516 -27,366
EBIT as % of sales 3.8% 2.8% -2.7%
After an increase in topline of 7% from 2015 to 2016, sales
remained at the same level in 2017 (-1.6%, flat excluding the
impact of the divested Lighting business).
A strong gross profit margin improvement has been realized,
from 32.8% in 2015 to 34.4% in 2016 and then up 2.9 percent-
age points to 37.3% in 2017. A positive mix effect and value
engineering efforts yielding into results across the 3 divisions
are contributors to this improvement.
The higher gross profits while keeping indirect costs under
control result in an adjusted EBIT of 6.8% in 2017, up 3.5 per-
centage points vs 2016. The decrease in indirect costs over
the period is fully explained by amortizations on capitalized
development costs still included in 2016 (see below).
EBIT in 2017 includes following adjusting items: restructuring
costs (5.2 million euro) and non-cash impairment charges
(27.2 million euro) totaling 32.4 million euro (2016: adjusting
items: 6 million euro (net after gain on sale of headquarter
building); 2015: 29.1 million euro).
For more details on adjusting items we refer to note 6.
Restructuring and impairment.
The restructuring costs in 2017 mainly relate to the announ-
ced relocation of the production of the Norway plant to
Belgium and the decision to stop loss-making activities
mainly in the Entertainment division for an amount of
5.2 million euro (in 2016: 5.8 million euro, mainly related to
Entertainment, in 2015: 8.3 million euro, mainly related to
Enterprise). We refer to note 6 for more details on restruc-
turing charges recorded.
C/41 Barco annual report 2017
The change in accounting treatment of development
expenses (see (a)), which resulted in no capitalization of
development expenses in 2016 and 2015, negatively impacts
adjusted EBIT in 2016 and 2015 due to amortizations on
the remaining capitalized development balance (2016: 22.9
million euro; 2015: 49.4 million euro). EBITDA excludes
these impacts and shows a steady improvement in EBITDA
performance of 9.9% on sales in 2017, compared to 8% in
2016 and 7.2% in 2015.
IN THOUSANDS OF EURO 2017 2016 2015
Product sales 888,753 82% 883,437 80% 793,341 77%
Project sales 96,016 9% 120,089 11% 142,237 14%
Service sales 99,936 9% 98,815 9% 93,278 9%
Sales 1,084,706 1,102,342 1,028,856
Major part of the sales relate to product sales (in 2017: 82%, in
2016: 80%, 2015: 77%). Project sales include combined sales
from products, installations and services and are declining
since 2015 as a result of declining project sales in the control
rooms business. Most of these project sales have a lifetime
of less than one year. Service sales remained stable, counting
for 9% of total sales.
We refer to note 2.Segment Information and to the chapter
‘Comments on the results’ for more explanation on sales
and income from operations (A/92).
IN THOUSANDS OF EURO NOTE 2017 2016 2015
Adjusted EBIT 73,241 36,557 1,698
Depreciations and amortizations 12 33,877 28,572 22,906
Amortizations and impairments on development expenses 4a - 11 - 22,873 49,441
EBITDA 107,118 88,002 74,080
EBITDA as % of sales 9.9% 8.0% 7.2%
C/42Barco annual report 2017Financial statements
Indirect costs and other operating income (expenses) - net
IN THOUSANDS OF EURO 2017 2016 2015
Research and development expenses (a) -122,305 -143,362 -150,222
Sales and marketing expenses (b) -146,802 -147,088 -137,829
General and administration expenses ( c ) -58,095 -55,122 -50,977
Indirect costs -327,201 -345,573 -339,028
Other operating income (expenses) - net (d) -3,710 3,325 2,960
Indirect costs and other operating income (expenses) - net -330,911 -342,247 -336,067
Indirect costs represent 30% of sales in 2017 versus 31% of sales in 2016 and 33% of sales in 2015.
(a) Research and development expenses
IN THOUSANDS OF EURO 2017 2016 2015
Research & development expenses 122,305 120,490 100,781
Amortization capitalized development expenses - 21,509 44,575
Impairment of capitalized development expenses - 1,364 4,866
Capitalized development, net - 22,873 49,441
Research and development expenses, net 122,305 143,362 150,222
In order to sustain our technological leadership, Barco
strongly invests in R&D, new technologies and innovation. We
refer to ‘Our strategy’ on page A/34 for more details. Shorter
life cycles of products, unpredictability of which development
projects will become successful together with the volatility
of technologies and the markets Barco operates in, made
the Board of Directors conclude that Barco’s development
expenses no longer fully meet the criteria of IAS38.57. As the
criteria of IAS38.57 are no longer fulfilled, our accounting
policy, with respect to research and development costs, does
no longer allow the capitalization of development expenses
since 2015.
2017 Research and development cash expenses represent
11.3% of sales in 2017, which is in line with 2016 and 9.8%
of sales in 2015.The increase from 2016 to 2015 is related
to development in new growth initiatives and acquisitions
in MTT and Medialon, by which Barco acquired in-process
development which requires additional internal development.
C/43 Barco annual report 2017
No longer capitalizing development expenses since 2015,
had a negative impact on the income from operations (EBIT
and adjusted EBIT) in 2016 and 2015.
As capitalized development expenses are amortized over
their expected useful lives, which is generally 2 years, 2017 is
no longer impacted by the change in accounting treatment
of development expenses. In 2016 and 2015 net research
and development expenses, still include a full year amorti-
zation cost. Adjusted EBIT in 2016 is negatively impacted by
the amortization on the remaining capitalized development
expenses for an amount of 22.9 million euro (2015: 44.6
million euro).
Impairment costs on capitalized development expenses
(2016: 1.4 million euro; 2015: 4.9 million euro) are presented
on the line “Research and development expenses”. For more
explanation on impairment costs on capitalized development
we refer to note 11.
Research and development activities are spread over the divisions as follows:
(b) Sales and marketing expenses
IN THOUSANDS OF EURO 2017 % of sales 2016 % of sales 2015 % of sales
Entertainment 50,142 9% 65,450 11% 60,812 12%
Enterprise 48,768 16% 49,722 17% 56,885 19%
Healthcare 23,395 10% 28,190 12% 32,525 15%
Total Research & development expenses 122,305 143,362 150,222
IN THOUSANDS OF EURO 2017 % of sales 2016 % of sales 2015 % of sales
Sales and marketing expenses 146,802 13,5% 147,088 13,3% 137,829 13,4%
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.
Sales and marketing expenses, as percentage of sales,
amounts to 13.5%, which is in line with previous years.
C/44Barco annual report 2017Financial statements
(c) General and administration expenses
(d) Other operating income (expense) – net
IN THOUSANDS OF EURO 2017 % of sales 2016 % of sales 2015 % of sales
General and administration expenses 58,095 5.4% 55.122 5.0% 50,977 5.0%
General and administration expenses include the costs
related to general and divisional management, finance and
accounting, information technology, human resources and
investor relations. Expenses increased to 5.4% of sales in
2017 compared to 5% in 2016 and 2015 partly the result of
increased investments in IT infrastructure (SAP and Cloud).
(a) In 2014, Barco sold its venture Orthogon. In 2015 a price correction
resulting from the contractual adjustment on the final closing
net working capital in comparison to the agreed target working capital,
of 1.4 million euro was received and recognized in other operating
income. In 2016 the remaining escrow on the sale of Orthogon was
received.
In 2017 sale of divestment mainly relates to the sold Lighting activities.
We refer to note 1.3. Acquisitions and divestments for more explanation.
(b) As of 2016 government grants and other forms of government assistance
related to research projects are recognized as income on the line
research and development expenses. In 2015 these government grants
were included in other operating income (expense) (2015: 5.6 million
euro).
(c) This concerns the loan on the former DAT business. For further
information, see note 17.
IN THOUSANDS OF EURO NOTE 2017 2016 2015
Sale divestments (a) 513 1,000 1,405
Investment grants (b) - 58 5,569
Dividend received from external investment 434 - -
Reversal other long term liability (c) 2,246 - -
Bad debt provisions (net of write-offs and reversals of write-offs) -674 2,788 -1,362
Cost of share-based payments -1,549 -1,234 -1,313
Bank charges -705 -982 -974
Other provisions (net of additions and reversals of provisions) -2,325 1,819 -669
Gains/(loss) on disposal of tangible fixed assets -362 -142 548
Other (net) -1,288 19 -243
Total -3,710 3,325 2,960
C/45 Barco annual report 2017
The table below provides information on the major items
contributing to the adjusted EBIT, categorized by nature.
Personnel cost includes the cost for temporary personnel
for an amount of 5.3 million euro (in 2016: 6.6 million euro,
in 2015: 5.7 million euro).
Average number of employees in 2017 was 3,515 (versus
3,456 in 2016; 3,298 in 2015), including 2,683 white-collars
(in 2016: 2,615, in 2015: 2,509) and 832 blue-collars (in 2016:
841, in 2015: 788).
IN THOUSANDS OF EURO 2017 2016 2015
Sales 1,084,706 1,102,342 1,028,856
Material cost -560,388 -580,142 -575,130
Services and other costs -135,309 -166,234 -128,796
Personnel cost -278,181 -271,289 -253,846
Amortizations on development - -22,873 -49,441
Depreciation property, plant, equipment and software -33,877 -28,572 -22,906
Other operating income (expense) - net (note 4) -3,710 3,325 2,960
Adjusted EBIT 73,241 36,557 1,698
5. Revenues and expenses by nature
C/46Barco annual report 2017Financial statements
The table below shows the restructuring and impairment
costs recognized in the income statement.
Please refer to note 10 for explanation on impairment on
goodwill, note 9 for explanation on the impairment on
investments and note 12 for impairment of (in)tangible fixed
assets.
Restructuring costs include lay off costs (2017: 5.2 million
euro, 2016: 2.3 million euro, 2015: 8.3 million euro). Non-
cash impairment costs relate to impairment on intangible
and tangible fixed assets (2017: 2.9 million euro), goodwill
(2017: 10.9 million euro, 2016: 7.5 million euro and 2015: 16.9
million euro), write off on inventories (2017: 4.4 million euro,
2016: 3.5 million euro) and investments (2017: 9 million euro,
2016: -0.4 million euro and 2015: 3.8 million euro).
Restructuring and impairment costs in 2017 relate to Barco’s
decision to move the production activities in Norway to
Belgium, leading to a provision for lay off costs as well as an
impairment on the building (in Entertainment division), and
to Barco’s decision to revisit the future of certain growth
initiatives (in Entertainment division) and the X2O business (in
Enterprise division). Based on the latter decision, management
assessed additional write offs on inventories (growth initia-
tives), impairment on goodwill and know-how (X2O) and
provision for lay-off costs.
At the end of 2016 Barco decided to scale down the Interactive
Patient Care business, which resulted in an impairment of the
remaining goodwill (see note 10) and additional write off on
inventories for an amount of 0.5 million euro. The decision
to revisit the future of the Lighting business, resulted in addi-
tional write offs on inventories (3 million euro).
IN THOUSANDS OF EURO NOTE 2017 2016 2015
Total restructuring (cash): -5,200 -2,297 -8,315
Lay-off costs -5,200 -2,297 -8,315
Total impairments (non-cash): -27,204 -10,642 -20,783
Impairment on goodwill 10 -10,870 -7,546 -16,940
Impairment on investments 9 -9,074 416 -3,843
Write-off on inventories -4,400 -3,512 -
Impairment (in)tangible fixed assets 12 -2,860 - -
Total restructuring and impairments -32,404 -12,939 -29,099
6. Restructuring and impairment costs
C/47 Barco annual report 2017
7. Income taxes
IN THOUSANDS OF EURO NOTE 2017 2016 2015
Current versus deferred income taxes
Current income taxes -11,779 -16,612 -17,253
Deferred income taxes 424 10,267 10,374
Income taxes -11,355 -6,345 -6,879
Income taxes continuing operations -11,355 -6,345 4,879
Income taxes discontinuing operations - - -11,758
Income taxes versus income before taxes
EBIT continuing operations 40,836 30,516 -27,366
EBIT discontinuing operations - - 58,790
Interest income (expense) - net 2,013 1,240 3,006
Income before taxes 42,849 31,756 34,430
Income taxes -11,355 -6,345 -6,879
Effective income tax rate % -26.5% -20.0% -20.0%
Income before taxes 42,849 31,756 34,430
Theoretical tax rate 34% 34% 34%
Theoretical tax credit/(cost) -14,565 -10,797 -11,706
Effect of change in expected tax rate on deferred taxes (a) -15,562 A - -
Set-up/(use) of deferred tax assets, not recognised in prior years (b) 11,063 A 1,620 -27
Innovation income deduction (IID) (c) 8,243 - -
Effect of different tax rates in foreign companies 4,463 11,542 5,867
Tax adjustments related to prior periods 1,728 -53 4,784
Non deductible expenses/non taxable income for tax purposes
Goodwill impairments non-deductible (d) -3,695 -2,423 -6,233
Impairment on investment (e) -3,364 - -
Dividends received (f) -1,523 -4,610 -
Other non-deductible expenses -1,873 -4,699 -1,873
Income not taxed
Capital loss carried back/Gain on sold share deal entities (g) 1,636 - 4,132
Government grants exempt from tax 1,726 1,995 1,156
Notional interest deduction (NID) (h) - 1,769 2,756
Investment allowances (i) 854 1,771 2,324
Deferred tax assets, derecognised in current year (j) -487 -2,460 -8,058
Taxes related to current income before taxes -11,355 -6,345 -6,879
Note: Adjusted tax rate 2017 = 16% (Taxes related to current income before taxes - non-recurring tax items (i.e. sum of A))/income before taxes =
(-11,355 – (-15,562 + 11,063 ))/42,849
Adjusted tax rate is the tax rate used in the calculation of ROCE (see page C/80).
C/48Barco annual report 2017Financial statements
8. Earnings per share
IN THOUSANDS OF EURO 2017 2016 2015
Net income/(loss) (continuing) attributable to the equity holder of the parent 24,776 11,023 -29,563
Weighted average of shares 12,328,663 12,171,969 12,065,396
Basic earnings per share (in euro) 2.01 0.91 -2.45
Net income/(loss) (discontinued) attributable to the equity holder of the parent - - 47,031
Weighted average of shares - - 12,065,396
Basic earnings per share (in euro) - - 3.90
Basic earnings per share 2.01 0.91 1.45
Net income/(loss) (continuing) attributable to the equity holder of the parent 24,776 11,023 -29,563
Weighted average of shares (diluted) 12,428,453 12,591,376 12,411,732
Diluted earnings per share (in euro) 1.99 0.88 -2.38
Net income/(loss) (discontinued) attributable to the equity holder of the parent - - 47,031
Weighted average of shares (diluted) - - 12,411,732
Diluted earnings per share (in euro) (a) - - 3.79
Diluted earnings per share (a) 1.99 0.88 1.41
(a) The difference 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 18.
(a) (b) Impact of the change in tax regulation in Belgium and US is -4.5 million
euro cost, net of -15.6 million euro (a) reduction on deferred tax assets
in Belgium and US due to a lower enacted tax rate and 11 million euro (b)
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.
(c) As of 2016 Innovation Income Deduction (IID) in Belgium, not used in the
tax year it is incurred, can be carried forward to the next years. This has
resulted in an extra deferred tax asset of 8.2 million euro on the IID not
used in 2016 and 2017 as management believes there will be sufficient
taxable profit in the future to be able to offset the IID carried forward.
(d) See note 10 for more details on goodwill impairment recorded in 2017, 2016
and 2015. The 2017, 2016 and major part of the 2015 goodwill impairment
is non-deductible. Only the part recorded in the US is tax deductible.
(e) See note 9 for more details on impairment on investments recorded in
2017. Impairments on investments are non-tax deductible.
(f) Net effect of deferred taxes on DBI deduction carried forward and 5%
taxable income on dividends received.
(g) Gain realized on divested share deal entities as part of the sale of the DAT
business is tax exempt in 2015. In 2017 the sale of the Lighting activities
resulted in a capital loss for which part could be carried back to the gain
realized on the sale of the assets of the DAT business in 2015 in the US.
(h) Decrease of notional interest percentage allowed over the years – no usage
of NID in 2017.
(i) Spread taxation on capital expenditure and research and development costs
of prior years.
(j) 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 2016 this mainly relates to tax losses
in Belgium and Canada. In 2015 and 2014 this mainly relates to tax losses
in Belgium and Germany. See note 13.
C/49 Barco annual report 2017
The Group has no contingent liabilities or capital commitments in relation to its associates as at 31 December 2017, 2016 and 2015. For all equity accounted
investees, the parent’s or other investor’s consent is required to distribute its profits; which is not foreseen at the reporting date. The equity accounted investees
did not recognize items in other comprehensive income.
IN THOUSANDS OF EURO 2017 2016 2015
Share of the associates' balance sheets:
Current assets 3,046 3,262 269
Non-current assets 7,207 8,244 3,858
Current liabilities 2,652 2,549 451
Non-current liabilities 10 3,805 2,904
Equity 7,591 5,153 772
Share of the associates' revenue and profit:
Sales 13,460 10,207 422
Gross profit 3,095 1,676 194
EBIT 1,439 394 -873
Profit/(loss) of the year 1,290 263 -1,073
The Group’s share of the assets and liabilities as at 31 December 2017, 2016 and 2015 and income and expenses of the joint
ventures and associates for the year ended 31 December 2017, 2016 and 2015, which are accounted for using the equity method:
Investments include entities in which Barco owns less
than 20% of the shares. These are accounted for as AFS
instruments, which implies that the Group measures these
investments on a fair value basis with differences in fair value
reflected in profit and loss. Interest in associates represent
entities in which Barco owns between 20% and 50% of the
shares. The decrease from 2016 to 2017 is the net effect of
the impairment on an investment in Entertainment and an
additional capital contribution in CCO Barco Airport Venture
LLC. The impaired investment is facing cash flow problems,
for which no solution is found to date. This, together with the
return criteria no longer being met, let the Board decide to
impair the investment which is presented in the line restruc-
turing and impairment costs. In 2016, the equity instruments’
fair value is based on a binding agreement with a third party
investor (i.e. price of the last round – level 1 fair value), as
these investments are unquoted instruments.
In 2016 the balance also included the 35% interest in CCO
Barco Airport Venture LLC, as well as a 27.32% interest in
Audience Entertainment and a 41.18% interest in Habornveien
53, a Norwegian real estate company owning the building
leased by Barco Frederikstad AS in Norway. Barco has pur-
chased an additional 51% of the shares on 22 December
2017, resulting in Barco acquiring control of Habornveien
53 as per 31 December 2017. We refer to note 1.3 Acquisi-
tions and divestments. The investment in Habornveien 53
is therefore no longer included per 31 December 2017 in
the investments in associated companies. The results of the
equity investment until 31 December 2017 are included in
the share in the profit/(loss) of joint ventures and associates
in the income statement.
The Audience Entertainment results include in each year the
fourth quarter result of the previous year and the first three
quarters of the result of the current year, as the fourth quarter
figures of the current year are not yet available. In 2015 this
investment has been fully impaired (3.8 million euro impair-
ment) to zero. This impairment was recorded in the income
statement in the line restructuring and impairment costs.
In 2016 the result of Audience Entertainment from October
2015 till September 2016 amounts -0.4 million euro. This
amount is offset in the income statement in the line restruc-
turing and impairment costs in order to keep the investment
at zero. See note 6. Restructuring and impairment. In 2017,
this entity did not generate significant result.
9. Investments
C/50Barco annual report 2017Financial statements
10. Goodwill
IN THOUSANDS OF EURO 2017 2016 2015
At cost
On 1 January 187,548 188,133 182,581
Acquisitions - -584 4,774
Sale - - -
Transfer to assets held for sale -8,000 - -
Translation (losses)/gains - - 777
On 31 December 179,548 187,548 188,133
Impairment
On 1 January 63,292 55,746 38,807
Impairment losses 10,870 7,546 16,940
On 31 December 74,163 63,292 55,746
Net book value
On 1 January 124,255 132,386 143,774
On 31 December 105,385 124,255 132,386
Barco announced on 4 December 2017 that it has reached
an agreement with China Film Group (CFG) to change the
ownership structure of BarcoCFG for the Chinese cinema
market (we refer to assets held for sale in note 3 and criti-
cal accounting judgments estimate on page C/24 for more
explanation). The announcement resulted in the presenta-
tion of the assets and liabilities associated with BarcoCFG as
assets held for sale.
BarcoCFG is included in the cash generating unit Entertain-
ment, which has a total allocated goodwill of 43.6 million
euro per end of 2017. BarcoCFG has been established in 2011
and contributed to the cash generating unit Entertainment
since 1 January 2013, from the date on which Barco obtained
control over BarcoCFG. At acquisition date, no goodwill was
recognized on BarcoCFG but following the acquisition the
entity contributed significantly to the sales and net income
of the CGU. At the announcement of the disposal, good-
will is allocated at the level of the Entertainment CGU and
Barco disposes of an operation within this CGU. Therefore, in
accordance with IAS36.86, it needs to determine the good-
will associated with that operation in order to include it in
the result of the disposal. Barco applied the relative value
based on the sales generated by BarcoCFG compared to the
sales of the Entertainment CGU because most of the China
Entertainment sales are done through BarcoCFG. This has
led to an allocation of 8 million euros goodwill to BarcoCFG,
presented in assets held for sale at the end of 2017.
In 2015 acquisitions relate to the acquisition of Advan for
4.8 million euro. In 2016 a price correction resulting from
an adjustment on the opening net working capital of Advan
in comparison to the agreed target working capital, of 0.6
million euro, was adjusted to goodwill, as received within
the one year window period.
Following management’s decision to reorganize the Enter-
prise CGU by revisiting the future of X2O, Barco considered
C/51 Barco annual report 2017
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 and Enterprise. For Healthcare, the business
unit Interactive Patient Care (IPC) and Healthcare exclud-
ing Interactive Patient Care were monitored as separate
cash-generating units in the division Healthcare.
As in 2016 the business unit Interactive Patient Care (IPC) was
stopped, the cash-generating unit corresponds to the division
Healthcare. Therefore, impairment testing is performed at
the level of the cash-generating units as indicated below.
IAS 36.12(f) and concluded that based on this decision there
are impairment indicators. The goodwill allocated to the
cash-generating unit Enterprise has been re-allocated and
Barco believes that an arbitrary method as permitted by IAS
36.87 would better reflect the goodwill associated with the
re-organized units. In order to support, Barco considered the
facts and circumstances relating to the acquisition of X20.
The legal entity X2O has been acquired (100% of the shares)
on 18 March 2014. The acquisition reflected Barco’s strategy
to move beyond display and projection technology and
expands Barco’s portfolio with a complete solution to deliver
enhanced and cross-divisional content distribution and
workflow, based on advanced networking and connectivity
capabilities. The goodwill allocated to the cash-generating
unit Enterprise has been reallocated as permitted by IAS36.87
based on the allocation to goodwill of the total acquisition
price paid.
Of the total acquisition price of 13.3 million euro, 3.2 million
euros was allocated to intangibles (know-how; 1.5 million
euro remaining book value per end of 2017) and 10.9 million
euro was allocated to residual goodwill. Barco believes that
the method of allocating goodwill after the re-organization of
the Enterprise cash-generating unit best reflects the goodwill
associated with the remaining Enterprise cash-generating
unit, i.e. the previous goodwill of 52.7 million euro less the
goodwill associated with the X20 acquisition of 10.9 million
euro. Consequently, Barco allocates 10.9 million euro good-
will to the operations of X20 which is immediately impaired
together with the remaining book value of the acquired
know-how (1.5 million euro) because Barco estimates that
the recoverable amount of the X2O operations is insufficient
to cover.
The impairment tests on goodwill in 2017 did not result in
additional impairments for other cash-generating units.
In 2016 an impairment loss was recorded for an amount of
7.5 million euro, related to the remaining goodwill on the
cash-generating unit Interactive Patient Care, after the deci-
sion to stop this business. The impairment tests on goodwill
in 2016 did not result in additional impairments for other
cash-generating units. In 2015, an impairment charge of
16.9 million euro was booked, related to goodwill on Indus-
trial & Government (9.5 million euro) and Interactive Patient
Care (7.5 million euro). There is no remaining goodwill on
Industrial & Government and Interactive Patient Care after
the impairments were booked.
See below for explanations on the impairment testing
performed.
C/52Barco annual report 2017Financial statements
The Group performed its annual impairment test in the fourth
quarter of 2017 consistently with prior years.
The Group looks at the relationship between its market capi-
talization and its book value, amongst other factors, when
reviewing the indicators of impairment. At 31 December 2017,
the market capitalization of the group exceeded the equity
of the Group with 101%. 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
generated 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 conser-
vative levels for the purpose of our impairment testing. The
pre-tax discount rate applied to projected cash flows is 8.9%
(2016: 8.8%, 2015: 9%) and cash flows beyond the five year
period are extrapolated using a conservative growth rate of
0% (2016: 0%, 2015: 0%). The amount by which the unit’s
recoverable amount exceeds its carrying amount is 95 million
euro in Entertainment, 158 million euro in Enterprise and 84
million euro in Healthcare. A sensitivity analysis is performed
on all cash-generating units with respect to the discount rate
(see Sensitivity to changes in assumptions – Discount rate).
The assumptions of the annual impairment test are consistent
with external sources.
For none of the cash-generating units management iden-
tified an impairment after the impairments' test. In 2016 an
impairment was booked on the remaining goodwill of the
business unit Interactive Patient Care (IPC) as it was decided
to stop this business because business plan targets were not
reached. As a result, an impairment loss of 7.5 million euro
was recorded.
Impairment losses recorded are shown in a separate line
‘Restructuring and impairments on the face of the income
statement. We refer to note 6 Impairment and restructuring
costs for a detailed break-down of the amounts shown in
this line of the income statement.
Cash generating units
IN THOUSANDS OF EURO 2017 2016
Entertainment 35,564 43,564
Healthcare 28,036 28,036
Enterprise 41,785 52,655
Total goodwill (net book value) 105,385 124,255
The carrying amount of goodwill (after impairment) has been
allocated to the cash-generating units as follows (in thousands
of euro):
C/53 Barco annual report 2017
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 projection period has been kept
conservatively at zero percent for all cash-generating units,
since even then there is no risk of 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
except for Entertainment where the 2017 actuals EBITDA
percentage was used as this is closer to reality than an aver-
age which suffered from non-recurring items in the previous
years.
Growth rate estimates – The long-term rate used to extra-
polate the projection has been kept conservatively at zero
percent 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 weighted
average cost of capital, the risks being implicit in the cash
flows. It was determined on group level.
Sensitivity to changes in assumptions
Per 31 December 2017, only the change in EBITDA per-
centage on sales could result in impairment losses. The
implications of the key assumptions for the recoverable
amount are discussed below:
Sales growth rate used during the projection period –
Management has considered the possibility of lower than
projected sales growth during the projection period. Changes
in sales growth rates do not cause the carrying value of the
cash-generating units to materially exceed its recoverable
amount.
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 3%, 7% and 4% would result
in an impairment.
Discount rates – Management has considered the possibility
of a significant higher weighted average cost (i.e. 20% instead
of 8.9%) to test the sensitivity. For none of the cash-genera-
ting 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.
ENTER- TAINMENT
HEALTH- CARE
ENTER- PRISE
Sales growth rate used during the projection period
0% 0% 0%
EBITA as % of sales 7.3% 10.3% 9.4%
Growth rate estimates 0% 0% 0%
Discount rates 8.9% 8.9% 8.9%
C/54Barco annual report 2017Financial statements
11. Capitalized development costs
IN THOUSANDS OF EURO 2017 2016 2015
At cost
On 1 January 342,375 340,918 335,874
Translation (losses)/gains -6,027 1,457 5,044
On 31 December 336,347 342,375 340,918
Impairment
On 1 January 34,274 32,911 28,044
Expenditure - 1,364 4,866
On 31 December 34,274 34,274 32,911
Amortization
On 1 January 308,100 285,161 236,479
Amortization - 21,509 44,575
Translation (losses)/gains -6,028 1,430 4,108
On 31 December 302,072 308,100 285,161
Net book value
On 1 January - 22.846 71,351
On 31 December - - 22,846
As the criteria of IAS38.57 are no longer fulfilled, Barco’s
accounting policy, with respect to research and development
costs, no longer allows the capitalization of development
expenses since 2015. Capitalized development expenses are
amortized over their expected useful lives, which is generally
2 years (see Accounting principles). As of the end of 2016,
capitalized development expenses are fully amortized.
Impairment tests on capitalized development costs, resulted
in the recognition of impairment costs in 2016, for an
amount of 1.4 million euro, on certain specific capitalized
development projects, which were predicted to be less success-
ful as originally anticipated and in 2015, for an amount of
4.9 million euro, representing mainly the write-off of all
remaining capitalized development projects in LED and
Lighting (in the Entertainment division), in view of the lower
results realized.
The recognized impairment losses on capitalized develop-
ment are allocated to the divisions as follows:
IN THOUSANDS OF EURO 2016 2015
Entertainment 679 3,039
Enterprise 402 1,683
Healthcare 283 144
Total 1,364 4,866
C/55 Barco annual report 2017
12. Other intangible assets and tangible fixed assets
IN THOUSANDS OF EURO 2017 2016 2015
SOFTWARE
CUSTOMER
RELATIONS KNOW HOW
OTHER INTAN-
GIBLE ASSETS
OTHER INTANGIBLE
ASSETS UNDER CONSTRUC-
TION TOTAL TOTAL TOTAL
At cost
On 1 January 48,329 19,000 23,817 37,366 12,151 140,663 101,874 93,640
Expenditure 2,592 - - 49 3,992 6,634 6,946 5,418
Sales and disposals -260 - -186 -16 - -462 -26 -272
Acquisition of subsidiaries - 3,036 166 - - 3,202 28,979 2,622
Disposal of subsidiaries -124 - - - - -124 - -
Transfers 10,062 - 26,429 -26,418 -10,073 - -9 17
Translation (losses)/gains -228 -1,017 -2,474 -893 - -4,612 2,897 448
On 31 December 60,372 21,019 47,752 10,087 6,071 145,300 140,663 101,874
Depreciation and impairment
On 1 January 24,326 14,719 12,808 13,045 - 64,898 49,246 37,714
Depreciation 6,783 -461 7,224 4,012 - 18,481 14,329 11,632
Impairment - - 1,536 - - 1,536 - -
Sales and disposals -260 - -186 -16 - -462 -24 -245
Acquisition of subsidiaries - - - - - - 3 325
Disposal of subsidiaries -114 - - - - -114 - -
Transfers - 2,324 4,880 -7,204 - - 96 -
Translation (losses)/gains -181 -807 -1,265 -146 - -2,400 1,246 -180
On 31 December 30,555 16,697 24,997 9,690 - 81,939 64,898 49,246
Carrying amount
On 1 January 24,003 4,281 11,009 24,321 12,151 75,765 52,628 55,926
On 31 December 29,817 4,322 22,755 397 6,071 63,361 75,765 52,628
In 2017, capital expenditures for intangible assets amount
to 6.6 million euro (2016: 6.9 million euro; 2015: 5.4 million
euro). Expenditures in 2017 include the implementation
cost of SAP ERP software for 5.4 million euro. The customer
list from the P2M asset deal (3.0 million euro) is included
in ‘acquisition of subsidiaries’. In 2016, total intangible
assets include the investment in in-process development
acquired through the MTT and Medialon acquisitions (29.0
million euro) which are amortized between four and six years
over their useful life and the SAP ERP system (4.6 million euro).
In 2015, acquisition of subsidiaries related for the major part to
the customer list acquired through the acquisition of Advan.
The SAP capital expenditures are depreciated as roll out is
performed successfully pro rata the amount of licenses used.
12.1 Other intangible assets
C/56Barco annual report 2017Financial statements
For the total scope of the OnePlatform SAP project Barco
foresees 2,600 licenses. Per successful roll-out (India,
Belgium, Germany, US) a part of the licenses are activated
and used. These SAP capital expenditures are depreciated
over 7 years conform the valuation rules for intangible fixed
assets. This was done as of April 2014 in India, July 2015 in
Belgium, July 2016 in Germany and July 2017 in the US.
The impairment of 1.5 million euro relates to the acquired
know-how on the X2O acquisition, which resulted from
Barco’s decision to revisit the future of X2O. We refer to note
6 restructuring and impairments.
We refer to Note 1.3 on “Acquisitions and divestments” and
Note 26 on “Cash flow statement: effect of acquisitions and
disposals” for more details on these transactions.
Barco does not hold intangible assets with indefinite
lifetime.
12.2. Tangible fixed assets
IN THOUSANDS OF EURO 2017 2016 2015
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 77,260 90,800 39,755 26,456 4,688 161,699 238,959 225,828 187,889
Expenditure 263 4,807 3,345 719 11,177 20,048 20,311 26,406 37,563
Sales and disposals -322 -7,137 -4,334 -1,530 - -13,002 -13,324 -15,320 -4,058
Acquisition of subsidiaries 836 - - - - - 836 120 1,333
Disposal of subsidiaries -3 -2,003 -646 -389 - -3,038 -3,042 - -
Transfers 13,515 3,930 776 -9,512 -8,708 -13,514 - 9 -17
Translation (losses)/gains -2,036 -1,753 -1,314 -931 -38 -4,035 -6,071 1,915 3,118
On 31 December 89,511 88,643 37,581 14,813 7,119 148,156 237,668 238,959 225,828
Depreciation and impairment
On 1 January 24,241 67,029 30,082 13,673 - 110,783 135,024 133,262 121,977
Depreciation 3,352 5,091 4,158 2,795 - 12,045 15,397 14,243 11,274
Impairment 1,324 - - - - - 1,324 - -
Sales and disposals -159 -6,876 -4,234 -1,526 - -12,635 -12,794 -13,518 -3,490
Acquisition of subsidiaries - - - - - - - 82 919
Disposal of subsidiaries -2 -1,847 -562 -254 - -2,662 -2,664 - -
Transfers 3,947 -18 49 -3,978 - -3,947 - -97 -
Translation (losses)/gains -1,156 -1,305 -997 -492 - -2,794 -3,950 1,052 2,582
On 31 December 31,547 62,074 28,496 10,219 - 100,790 132,337 135,024 133,262
Carrying amount
On 1 January 53,019 23,772 9,673 12,783 4,688 50,916 103,935 92,566 65,912
On 31 December 57,964 26,569 9,085 4,594 7,119 47,366 105,330 103,935 92,566
C/57 Barco annual report 2017
In 2017, capital expenditures amount to 20.3 million euro
(26.4 million euro in 2016; 37.6 million euro in 2015) and
relate mainly to an extended operations facility at the new
headquarters of Barco (12.2 million euro) which started in
2016. Per end of 2017, 6.9 million euro is included in assets
under construction for this extended operations. Capital
expenditure in 2016 (26.4 million euro) mainly relates to plant,
machinery, equipment, furniture and hardware at the new
headquarters of Barco (14.2 million euro). Abroad, 1.6 million
euro in new machinery and R&D equipment was deployed
in Barco Taiwan Technology Ltd. in 2017 (2.1 million euro
in 2016).
Per end of 2015, the new headquarter building was included
in the assets under construction for a total amount of 44.2
million euro. This was reclassified to mainly land and build-
ings and to plant, machinery and equipment in 2016. The
depreciations started as of 1 February, 2016, as the building
was finished and people moved into the new building.
In 2017, following the acquisition of the additional 51% share
in Habornveien 53 AS, Barco transferred the building (Barco
Frederikstad AS) from assets under finance lease to building
of net 5.6 million euro. An impairment of 1.3 million euro
related to this building in Barco Frederikstad AS was recorded
in 2017 (see note 6). In 2017, disposal of subsidiaries relates
to the sale of Barco Lighting Systems and Barco Silex SA.
More information can be found in note 1.3 and 26. In 2017
also, large disposals were booked on the move from the
old production building to the new headquarters building.
In 2016, sales and disposals contains the sale of the former
headquarters building on which a gain of 6.9 million euro
was realized.
The main capex realized in the period 2015 – 2017 relate to
the new headquarters of Barco 70.6 million euro (spread over
2017: 12.2 million euro; 2016: 14.2 million euro; 2015: 44.2
million euro) and to the new factory in Taiwan 3.7 million
euro (spread over 2017: 1.6 million euro; 2016: 2.1 million
euro).
C/58Barco annual report 2017Financial statements
13. Deferred tax assets – deferred tax liabilities
IN THOUSANDS OF EURO ASSETS LIABILITIES NET ASSET/(LIABILITY)
2017 2016 2015 2017 2016 2015 2017 2016 2015
Capitalized development cost - 2,690 3,244 - - -2,028 - 2,690 1,216
Patents, licenses, ... 1 - 60 -8,841 -13,107 -6,298 -8,840 -13,107 -6,238
Tangible fixed assets and software 1,891 1,579 1,889 -519 -1,044 -988 1,372 535 901
Other investments 416 - - - - -1,148 416 - -1,148
Inventory 15,089 20,538 21,718 -148 - -406 14,941 20,538 21,312
Trade debtors 601 815 1,736 3 - -3,810 604 815 -2,074
Provisions 17,055 20,428 14,967 -345 -986 -859 16,710 19,442 14,108
Employee benefits 670 2,787 2,346 22 -782 -510 692 2,005 1,836
Deferred revenue 3,550 5,040 4,838 12 -44 -216 3,562 4,996 4,622
Other items 972 799 1,617 -131 -1,035 -1,126 841 -236 491
Tax value of loss carry forward 23,531 15,524 15,676 - - - 23,531 15,524 15,676
Tax value of tax credits 21,558 27,084 22,866 - - - 21,558 27,084 22,866
Gross tax assets/(liabilities) 85,334 97,284 90,957 -9,947 -16,998 -17,389 75,387 80,286 73,568
Offset of tax -5,300 -8,184 -12,926 5,300 8,184 12,926 - - -
Net tax assets/(liabilities) 80,034 89,100 78,031 -4,647 -8,814 -4,463 75,387 80,286 73,568
Transfer to assets held for sale -10,174 - - - - - -10,174 - -
Net tax assets/(liabilities) 69,860 89,100 78,031 -4,647 -8,814 -4,463 65,213 80,286 73,568
Deferred tax assets and liabilities are attributable to the following items:
C/59 Barco annual report 2017
Movements in the deferred tax assets/(liabilities) arise from the following:
IN THOUSANDS OF EUROAS AT
1 JANUARY
RECOGNIZED THROUGH
INCOMESTATEMENT
RECOGNIZED THROUGH
OCI
ACQUISITIONS AND
DISPOSALS
EXCHANGE GAINS AND
LOSSES
TRANSFER TO ASSETS HELD
FOR SALEAS AT
31 DECEMBER
Capitalized development cost 2,690 -2,690 - - - - -
Patents, licenses, ... -13,107 3,623 - -41 686 - -8,840
Tangible fixed assets and software 535 1,090 - -156 -97 - 1,372
Other investments - 442 - - -26 - 416
Inventory 20,538 -4,278 - -93 -1,226 -1,592 13,349
Trade debtors 815 -151 - - -60 -255 349
Provisions 19,442 575 -2,336 - -971 -8,327 8,383
Employee benefits 2,005 -1,169 - - -144 - 692
Deferred revenue 4,996 -889 - - -545 - 3,562
Other items -236 1,122 - - -46 - 840
Tax value of loss carry forward 15,524 8,271 - - -264 - 23,531
Tax value of tax credits 27,084 -5,522 - - -4 - 21,558
Total 80,286 425 -2,336 -290 -2,697 -10,174 65,213
On top of the tax losses and tax credits for which a net
deferred tax is recognized (net deferred tax asset of respec-
tively 23.5 million euro and 21.6 million euro), the Group
owns tax losses carried forward and other temporary dif-
ferences on which no deferred tax asset is recognized
amounting to 70.2 million euro as of 31 December 2017
(resulting in a non-recognized deferred tax asset of rounded
18.8 million euro) and unutilized capital losses carried forward
on which no deferred tax asset is recognized amounting to
31.4 million euro (resulting in a non-recognized deferred
tax asset of rounded 8.0 million euro). 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. The tax losses
carried forward and other temporary differences on which
no deferred tax asset is recognized have no expiration date.
Deferred tax assets relate for the major part to the tax value
of loss carry forwards and tax credits and almost fully relate
to Belgium. We refer to note 7 for impact of changes in tax
regulations in Belgium and US. 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 ulti-
mate realization of deferred tax assets is dependent upon
the generation of future taxable profit during the periods
in which those temporary differences become deductible.
Management considers the scheduled reversal of deferred
tax liabilities, projected future taxable profit and tax plan-
ning strategies in making this 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 pro-
jections for future taxable profit over the periods in which
the deferred tax assets are deductible, management believes
as at 31 December 2017, it is probable that the group will
be able to recover these deductible temporary differences.
C/60Barco annual report 2017Financial statements
14. Inventory
The amount of write-offs recognized as expense in 2017
amounts to 8.4 million euro or 0.8% of sales (2016: 10.8 mil-
lion euro; 1% of sales, 2015: 14.2 million euro; 1.4% of sales).
In 2017 4.4 million euro write-offs resulting from the decision
to phase out certain businesses are included in restructuring
and impairment costs (in 2016 3.5 million euro). See note 6.
The inventory turns, including BarcoCFG, remained stable
at 3.6.
IN THOUSANDS OF EURO 2017 2016 2015
Raw materials and consumables 73,456 80,922 77,092
Work in progress 50,133 65,288 61,390
Finished goods 100,951 128,835 129,620
Write-off on inventories -91,786 -108,843 -102,142
Inventory 132,754 166,202 165,960
Inventory turns 3.6 3.6 3.6
Barco has not recognized income taxes on undistributed
earnings of its subsidiaries, joint ventures and associates,
as the undistributed earnings 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 457 million euro at 31 December
2017; 529 million euro at 31 December 2016 and 747 million
euro at 31 December 2015.
C/61 Barco annual report 2017
15. Amounts receivable and other non-current assets
(a) Movement in bad debt reserve:
IN THOUSANDS OF EURO 2017 2016 2015
Trade debtors - gross 153,920 194,119 196,262
Trade debtors - bad debt reserve ( a ) -4,481 -5,558 -9,351
Trade debtors - net ( b ) 149,439 188,561 186,910
V.A.T. receivable 7,461 7,461 6,376
Taxes receivable 4,787 3,074 10,881
Interest receivable 777 1 2,800
Currency rate swap (note 21) 677 858 1,750
Guarantees paid 74 60 51
Other 5,592 4,130 4,299
Other amounts receivable 19,368 15,584 26,157
Other non-current assets ( c ) 12,887 19,112 23,226
Number of days sales outstanding (DSO) incl CFG 55 55 58
IN THOUSANDS OF EURO 2017 2016 2015
On 1 January -5,558 -9,351 -8,711
Acquisition of subsidiaries - - -121
Sale of subsidiary 43 - -
Additional provisions -3,913 -1,329 -2,850
Amounts used 199 928 1,350
Amounts unused 3,472 4,117 1,488
Transfer to assets held for sale 1,021 - -
Translation (losses) / gains 256 78 -507
On 31 December -4,481 -5,558 -9,351
Per 31 December 2017, the number of days sales outstanding
(including trade debtors of BarcoCFG, presented in assets
held for sale) are 55 days or equal to 2016 (58 days at the end
of 2015). Decrease in trade debtors, is mainly the result of
the presentation of the trade debtors in BarcoCFG as assets
held for sale. Excluding this impact, trade debtors are 3%
lower than last year. At constant currencies, trade debtors
have increased (see Free CashFlow on C/100).
The bad debt reserve in proportion to the gross amount
of trade debtors has remained stable at 2.9% (2016: 2.9%,
2015: 4.8%).
C/62Barco annual report 2017Financial statements
(b) At 31 December 2017, the aging analysis of trade receivables is as follows:
IN THOUSANDS OF EURO 2017 2016 2015
Not due 120,603 152,402 144,412
Overdue less than 30 days 19,426 18,121 23,177
Overdue between 30 and 90 days 8,184 13,358 16,375
Overdue between 90 days and 180 days 2,331 5,308 4,816
Overdue more than 180 days 3,376 4,930 7,482
Total gross 153,920 194,119 196,262
Bad debt reserve -4,481 -5,558 -9,351
Total 149,439 188,561 186,910
In 2017, total overdue amounts decreased to a total amount
of 33.3 million euro compared to 41.7 million euro in 2016
(2015: 51.9 million euro).
The bad debt reserve in 2017 amounts to 133% of the trade
receivables overdue more than 180 days (2016: 113%, 2015:
125%).
(c) Other non-current assets
The non-current assets include long-term receivables in
the frame of vendor financing programs, amounting to 8.3
million euro per 31 December 2017, of which 8.3 million euro
(see note 16) offset by long term debt of the same amount
(2016: 13.5 million euro, of which 13.5 million euro offset
by a long-term debt; 2015: 15.4 million euro, of which 15.4
million euro offset by a long-term debt) and cash guarantees
for an amount of 3.6 million euro (2016: 3.7 million euro,
2015: 5.1 million euro)).
C/63 Barco annual report 2017
The net financial cash position decreased with 76.0 million
euro in 2017, mainly explained by the exclusion of the cash
of BarcoCFG of 67.4 million euro (see note 3: assets held for
sale). We refer to the cash flow note for explanation on the
cash movements.
The net financial cash in BarcoCFG amounted to 100 million
euro in 2016 and 77 million euro in 2015. The decrease in
2017 versus 2016 mainly relates to dividend payments and
currency translation impact.
(a) DepositsDeposits are short-term, highly liquid investments, which
are readily convertible to known amounts of cash. The
short-term deposits do not carry a material risk of change
in valuation.
16. Net financial cash/debt
IN THOUSANDS OF EURO 2017 2016 2015
Deposits (a) 88,043 108,349 123,814
Cash at bank (b) 166,016 245,177 217,374
Cash in hand 71 22 90
Cash and cash equivalents 254,130 353,549 341,277
Long-term financial receivables (c) 8,267 13,485 15,430
Long-term debts (c) (d) -41,036 -66,811 -79,527
Current portion of long-term debts (d) -10,000 -11,500 -10,000
Short-term debts (e) -686 -2,085 -2,124
Net financial cash/(debt) 210,676 286,638 265,056
Cash held for sale 67,385
Total net financial cash / (debt) 278,061
IN THOUSANDS OF EURO 2017 2016 2015
- deposits in INR, with an average interest rate of 6.98% 15,950 11,060 5,202
- deposits in USD, with an average interest rate of 1.37% 5,469 14,475 23,560
- deposits in CNY, with an average interest rate of 4.03% 64,728 75,978 81,144
- deposits in other currencies 1,895 6,837 13,907
Total deposits 88,043 108,349 123,814
C/64Barco annual report 2017Financial statements
(b) Cash at bank
Cash at bank is immediately available, except for the cash
held in BarcoCFG (in CNY) (taken Barco only holds an own-
ership of 58% in this entity). In 2017 the cash at bank in
BarcoCFG is included in the assets held for sale (see note 3).
Most of the cash is held on accounts with higher interest-yield
compared to classical cash accounts. It is denominated in
the following currencies:
(c) Long-term financial receivables
Barco entered into a number of vendor financing programs
granted to a selective number of international customers. The
purpose of vendor financing is to grant extended payment
terms to such customers, while Barco continues to bene-
fit from prompt payment of the open accounts receivable
position, e.g. by having a financial institution or other third-
party in the middle. The third-party will directly or following
a receivable sale by Barco open a credit in favor of the cus-
tomer, thereby assuming the risk of non-payment on the
spread payment plan in all material respect.
In the case of a supplier credit, Barco continues to serve as
collection agent after the sale of the accounts receivable on
a non-recourse basis, which leads to a long-term financial
receivable from the customer (in line “Other non-current
assets”) this being offset by a long-term financial debt posi-
tion towards the third-party for the same amount (in line
“Long-term debts”). Due to its non-recourse character, both
positions are being eliminated in the net financial cash/(debt).
Per end of 2017, the outstanding long-term financial receiv-
ables have decreased to 8.3 million euro compared to 13.5
million euro in 2016.
When the vendor financing takes the form of a buyer credit
(direct financial contract between customer and financial
institution, and no role for Barco as collection agent), no
positions are being reflected in the balance sheet.
Where Barco assumes a small residual risk on the custom-
er’s payment behavior with recourse character (either in the
form of supplier credit or buyer credit), provisions are being
account for.
(d) Long-term financial debts
Besides a specific real estate credit facility in the US, the
Barco Group has a total of 116.0 million euro committed
credit facilities available. The portfolio consists of 3 major
tranches:
- Barco NV received a research, development and innovation
(RDI) credit facility from the European Investment Bank. The
aim of the facility is to finance RDI activities for networked
visualization connectivity and software. Drawings under
the facility have a long-term tenor of minimum 4 years.
2017 2016 2015
- EUR 47.7% 43.3% 59.7%
- USD 25.8% 14.3% 7.9%
- CNY 12.8% 34.8% 18.6%
- INR 0.4% 1.3% 2.7%
- Others 13.4% 6.3% 11.1%
C/65 Barco annual report 2017
An amount of 15.0 million euro is available and drawn under
the RDI credit facility, noting that the credit line is closed
going forward for new drawings.
- 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 2020. Drawings under
the facilities have a short-term tenor.
- Barco NV signed a number of bilateral committed credit
facilities aiming at financing Barco’s headquarter campus.
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 26 million euro is available and drawn under
this long-term real estate financing. 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 gives an overview of the long-term financial debts including the current portion of long-term financial debts,
per type of interest rate:
The below table summarizes the long-term financial debts, including the current portion of long-term financial debts,
per currency:
IN THOUSANDS OF EURO 2017 2016 2015
- EUR 41,000 52,500 61,000
- USD 2,745 4,961 5,893
- NOK - 9,365 8,999
- Other 7,291 11,486 13,634
Total 51,036 78,311 89,527
TYPE OF INTEREST RATE MATURITY 31 DEC 2017 31 DEC 2016 31 DEC 2015
Real estate financing:
- variable, swapped into fixed (EU) Later than 2022 14,663 15,938 17,213
- variable (EU) Later than 2022 11,338 12,063 12,788
- variable, swapped into fixed (US) Later than 2022 1,666 2,844 3,672
- fixed, financial leasing (Norway) ( 1 ) Later than 2022 - 9,365 8,999
RDI financing:
- fixed, European Investment Bank 2020 15,000 24,500 31,000
Vendor financing (offset by long-term receivable) 8,268 13,485 15,430
Other 103 118 425
Total long-term financial debts 51,036 78,311 89,527
(1) The financial leasing in Norway becomes zero due to the purchase of the shares of Habornveien 53, the entity owning the building leased by Barco Frederikstad AS (see note 9. Investments). This results in a transfer of fixed assets held under leasing to buildings (see note 12b. Tangible fixed assets).
C/66Barco annual report 2017Financial statements
The long-term debts (including interests due), excluding
the current portion of the long-term debts, are payable as
follows:
(e) Short-term financial debts
The below table gives an overview of the short-term financial debts on 31 December 2017:
The available 75 million euro bilateral credit facilities are
undrawn per end of December 2017.
PER 31 DECEMBER 2017 PER 31 DECEMBER 2016 PER 31 DECEMBER 2015
Payable in 2019 16,592 Payable in 2018 14,101 Payable in 2017 15,558
Payable in 2020 4,129 Payable in 2019 20,638 Payable in 2018 11,923
Payable in 2021 2,561 Payable in 2020 5,115 Payable in 2019 22,422
Payable in 2022 4,184 Payable in 2021 3,585 Payable in 2020 5,119
Later 17,802 Later 35,156 Later 39,072
Total long-term debts 45,267 Total long-term debts 78,596 Total long-term debts 94,095
IN THOUSANDS OF EURO 2017 2016 2015
EFFECTIVE INTEREST RATE
BALANCEEFFECTIVE
INTEREST RATEBALANCE
EFFECTIVE INTEREST RATE
BALANCE
- Other 0.0% 686 2.4% 2,085 2.3% 2,124
Total 686 2,085 2,124
C/67 Barco annual report 2017
PER 31 DECEMBER 2017 PER 31 DECEMBER 2016 PER 31 DECEMBER 2015
Payable in 2019 4,555 Payable in 2018 5,599 Payable in 2017 946
Payable in 2020 - Payable in 2019 5,599 Payable in 2018 946
Payable in 2021 - Payable in 2020 - Payable in 2019 946
Payable in 2022 - Payable in 2021 - Payable in 2020 -
Later - Later - Later -
Other long-term liabilities 4,555 Other long-term liabilities 11,198 Other long-term liabilities 2,839
17. Other long-term liabilities
IN THOUSANDS OF EURO 2017 2016 2015
Loan former DAT business (a) 310 2,666 2,839
MTT long-term liability (b) 3,745 8.533
Contingent consideration (c) 500
Other long-term liabilities 4,555 11.198 2,839
(a) Following the divestment of the Defense & Aerospace division, a govern-
mental loan in the amount of 2.8 million euro was formally transferred to
Esterline BVBA, whilst the payment obligation though (based on the sales
agreement) remains with Barco in a back-to-back structure. In 2017 Barco
refunded 0.1 million euro on this loan (2016: 0.2 million euro). The remaining
pay-outs for 2018 and 2019 are expected to amount to 0.3 million euro.
The resulting revenue amounting to 2.2 million euro was booked in other
operating income (see note 4d). The amount is repayable in 2019 as shown
in the below table.
(b) The MTT long-term liability consists of a deferred payment (1.7 million euro)
and an earn-out subject to filing of patents on the in-process technology of
2.1 million euro (capped at 5 million dollar (4.7 million euro)), linked to the
MTT acquisition. The deferred payment originally amounted to 6 million
dollar (5.7 million euro), of which 2 million dollar (1.8 million euro) was paid
in 2017. 2 million dollar (1.8 million euro) becomes payable in 2018 and
is included in other current liabilities. The remaining 2 million dollar (1.8
million euro) shown in other long-term liabilities is payable in 2019. The
remaining decrease in the MTT long-term liability is linked to the earn-out
payable: one patent got filed in 2017, another two are expected to be filed
in 2018 (total amount of 2.5 million dollar or 2.1 million euro for the three
patents), all included in other current liabilities. The timing of the remaining
patent filings is difficult to predict and are therefore shown as payable in
2019 in the below table.
(c) The contingent consideration of 0.5 million euro is linked to the P2M
acquisition and based on a revenue target, payable in 2019.
The other long-term liabilities, excluding the current portion
of the long-term liabilities, are repayable as follows:
C/68Barco annual report 2017Financial statements
18. Equity attributable to equity holders of the parent
IN THOUSANDS OF EURO 2017 2016 2015
Share capital 55,857 55,823 55,648
Share premium 146,051 145,653 143,330
Share-based payments 7,511 6,230 5,968
Acquired own shares -42,205 -47,787 -54,443
Retained earnings 457,053 452,629 470,926
Cumulative translation adjustment -43,717 -20,811 -22,421
Derivatives -1,100 -1,493 -1,269
Equity attributable to equity holders of the parent 579,449 590,243 597,739
1. Share capital, share premium and own shares
The following capital increases took place in 2017:
- Through the exercise of 6,027 warrants into the same num-
ber of new shares on 26 June 2017 with a resulting increase
of the statutory capital of 26 (‘000) euro and an increase
of the share premium account of 308 (‘000) euro.
- Through the exercise of 1,070 warrants into the same num-
ber of new shares on 25 September 2017 with a resulting
increase of the statutory capital of 5 (‘000) euro and an
increase of the share premium account of 47 (‘000) euro.
- Through the exercise of 760 warrants into the same num-
ber of new shares on 22 December 2017 with a resulting
increase of the statutory capital of 3 (‘000) euro and an
increase of the share premium account of 43 (‘000) euro.
As a result thereof the company’s share capital amounts
to 55.9 million euro on 31 December 2017, consisting of
13,064,464 fully paid shares.
Barco acquired own shares in 2015, based on the share-
holder authorization granted by the Extraordinary General
Meeting of 24 April 2014 and the announcement on May 7th,
2014 that the company would launch a first share buy-back
program, for a period of 6 months, starting on 8 May, 2014
and a second announcement on 7 November, 2014 to extend
the share buy-back period with another 6 months, starting
10 November. Barco acquired 89,410 own shares for a total
amount of 5,046 (000) Euro in 2015. In 2016 and 2017, Barco
did not acquire own shares. In total, Barco now owns 704,949
own shares.
Barco sold 77,843 own shares upon the exercise of 77,843
stock options per 21 June 2017 with a resulting decrease
of the own shares of 4,680 (000) euro and a decrease of
the share based payment account of 216 (000) euro, 9,872
own shares through the exercise of 9,872 stock options per
20 September 2017 with a resulting decrease of the own
shares of 594 (‘000) euro and a decrease of the share based
payment account of 31 (000) and 5,125 own shares through
the exercise of 5,125 stock options per 21 December 2017
with a resulting decrease of the own shares of 308 (‘000)
euro and a decrease of the share based payment account
of 22 (‘000) euro.
C/69 Barco annual report 2017
As a result thereof the company’s share premium account
amounts to 146 million euro, the share-based payments
amount to 7.5 million euro and the number of own shares
acquired by Barco NV up to 31 December 2017 therefore
decreased to 704,949 own shares (2016: 797,789; 2015:
908,484 own shares).
2. Share-based payments
On 20 October 2017, 3 new option plans have been approved
by the Board of Directors. These 3 option plans entitled the
Board of Directors to grant maximum 156,000 stock options
before 31 December 2017. Each stock option gives right to
the acquisition of one (1) share. In 2017, 130,925 stock options
have been granted to employees and management of the
group based upon these option plans. On 31 December 2017,
no options remained available for distribution under the 2017
stock option schemes given the expiry dates of the plans per
31 December 2017.
Warrants exercisable under the warrant
and stock option plans
The total number of outstanding warrants on 31 December
2017 amounted to 10,956 which can lead to the creation
of 10,956 new shares. Since 2010, stock options have been
granted. The total number of outstanding stock options on 31
December 2017 amounted to 488,600. The company’s own
shares will be used under the outstanding stock option plan
to fulfill the commitment. There were 10,956 warrants and
74,295 stock options exercisable at year-end. During 2017,
7,857 warrants and 92,840 stock options have been exercised
(in 2016, 40,875 warrants and 110,695 stock options). These
warrants and stock options may be exercised the earliest 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 are 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
ENDTERM
EXERCISE PRICE
(IN EURO)
BALANCE ON 31 DEC 2016
GRANTED IN 2017
EXERCISED IN 2017
CANCELLED IN 2017
EXPIRED IN 2017
BALANCE ON 31 DEC 2017
Warrants
11/09/061 11/08/16 65.05 9,395 - -4,209 - -750 4,436
11/12/071 11/11/17 50.68 8,245 - -2,649 - -4,246 1,350
11/12/072 11/11/17 51.53 1,687 - -99 - -1,588 -
05/28/09 05/27/19 19.62 4,650 - -450 - - 4,200
05/28/09 05/27/19 24.00 1,420 - -450 - - 970
Total number of warrants 25,397 - -7,857 - -6,584 10,956
C/70Barco annual report 2017Financial statements
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 1.5 million euro in
2017 (2016: 1.2 million euro; 2015: 1.3 million euro).
(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
(2) Deviation of exercise price as a result of the implementation of the UK sub plan
(3) Deviation of exercise price as a result of the implementation of the US sub plan
Table on warrants
ALLOCATION DATE
ENDTERM
EXERCISE PRICE
(IN EURO)
BALANCE ON 31 DEC 2016
GRANTED IN 2017
EXERCISED IN 2017
CANCELLED IN 2017
EXPIRED IN 2017
BALANCE ON 31 DEC 2017
Stock options
10/28/10 10/27/20 35.85 1,400 - - - - 1,400
10/28/11 10/27/21 36.65 5,150 - -750 - - 4,400
10/31/12 10/30/22 52.37 8,100 - -2,325 - -800 4,975
10/31/12 10/30/20 52.37 6,100 - -1,750 -150 - 4,200
10/31/123 10/30/20 53.00 12,735 - -4,050 - - 8,685
10/21/13 10/20/23 59.03 56,650 - -48,400 -250 -1,000 7,000
10/21/13 10/20/21 59.03 11,200 - -3,625 -150 -250 7,175
10/21/133 10/20/21 60.94 17,200 - -4,350 - -200 12,650
10/23/14 10/22/24 55.00 53,040 - - -950 - 52,090
10/23/14 10/22/22 55.00 30,650 - -16,490 -1,150 -250 12,760
10/23/143 10/22/22 55.40 22,500 - -11,100 -150 -200 11,050
10/22/15 10/21/25 57.10 54,825 - - -2,450 - 52,375
10/22/15 10/21/23 57.10 31,550 - - -3,500 - 28,050
10/22/153 10/21/23 57.85 24,550 - - -1,850 - 22,700
10/24/16 10/23/26 72.80 74,205 - - - - 74,205
10/24/16 10/23/24 72.80 20,110 - - -1,000 - 19,110
10/24/163 10/23/24 74.24 35,750 - - -900 - 34,850
10/20/17 10/19/27 87.75 - 87,625 - - - 87,625
10/20/17 10/19/25 87.75 - 12,600 - - - 12,600
10/20/173 10/19/25 88.70 - 30,700 - - - 30,700
Total number of stockoptions 465,715 130,925 -92,840 -12,500 -2,700 488,600
C/71 Barco annual report 2017
3. Retained earnings
The change in retained earnings includes the net income of
2017, 2.9 million euro of actuarial gains and losses and the
distribution of 23.3 million euro dividend, as approved by the
general shareholders meeting of 27 April 2017. The board of
directors of Barco NV proposed a gross dividend of 2.1 euro
per share relating to the result as of 31 December 2017. In
2017 a gross dividend of 1.9 euro per share was paid out on
the results of 2016; in 2016 1.75 euro was paid out.
4. Cumulative translation adjustment
In 2017, the exchange differences on translation of foreign
operations have a negative impact of 22.9 million euro,
19. Non-controlling interest
mainly relating to foreign operations held in US Dollar
(-9.5 million euro), Chinese Yuan (-8.6 million euro),
Indian Rupee (-2.8 million euro), Hong Kong Dollar
(-1 million euro) and Norway Krone (-1 million euro). On
the divestment of Barco Lighting Systems, -2.0 million
euro is recycled through profit and loss.
5. Derivatives
Derivative financial instruments are disclosed in note 22.
NAME
COUNTRY OFINCORPORATION AND OPERATION 2017 2016 2015
CFG Barco (Beijing) Electronics Co., Ltd China 42% 42% 42%
Barco Taiwan Technology Ltd. Taiwan 10% 10% 10%
Barco China Electronic Visualization Technology China 35% 35% 0%
IN THOUSANDS OF EURO 2017 2016 2015
CFG Barco (Beijing) Electronics Co., Ltd 11,793 22,415 13,614
Barco Taiwan Technology Ltd. -374 78 310
Barco China Electronic Visualization Technology 2,646 2,751 -
Total equity attributable to non-controlling interest 14,065 25,244 13,925
The below table represents the proportion of equity interest held by non-controlling interests:
Overview of the equity attributable to non-controlling interest:
C/72Barco annual report 2017Financial statements
IN THOUSANDS OF EURO 2017 2016 2015
Total non-current assets 10,827 7,881 5,883
Total current assets 129,047 164,987 123,088
Total assets 139,874 172,868 128,971
Equity attributable to equityholders of the parent 16,326 31,031 18,848
Equity attributable to non-controlling interest 11,793 22,415 13,614
Total equity 28,118 53,447 32,462
Total current liabilities 111,755 119,422 96,509
Total liabilities 139,874 172,868 128,971
The main contributor to the non-controlling interest is CFG Barco (Beijing) Electronics Co., Ltd. Below is its balance sheet as at 31 December
2017, 2016 and 2015. This information is based on amounts before intercompany eliminations. In 2017 assets and liabilities of BarcoCFG are
included in assets held for sale (note 3).
IN THOUSANDS OF EURO% non-
controlling 2017 2016 2015
CFG Barco (Beijing) Electronics Co., Ltd 20,025 35,628 21,666
Barco Taiwan Technology Ltd. -4,650 -2,369 -903
Barco China Electronic Visualization Technology 178 -215 0
Net income 15,553 33,044 20,762
CFG Barco (Beijing) Electronics Co., Ltd 42% 8,411 14,964 9,100
Barco Taiwan Technology Ltd. 10% -465 -237 -90
Barco China Electronic Visualization Technology 35% 62 -75 0
Net income attributable to non-controlling interest 8,008 14,652 9,009
Overview of the net income attributable to non-controlling interest:
Other comprehensive income / (loss) for the period, net of tax effect, part attributable to non-controlling interest amounts to -1.3 million euro in 2017, -0.4 million
euro in 2016 and 0.4 million euro in 2015.
Total comprehensive income for the year, net of tax, part attributable to non-controlling interest amounts to 6.7 million euro in 2017, 14.2 million euro in 2016 and
9.4 million euro in 2015.
C/73 Barco annual report 2017
20. Trade payables and advances received from customers
IN THOUSANDS OF EURO 2017 2016 2015
Trade payables 102,943 135,127 139,504
Days payable outstanding (DPO) 58 63 69
Advances received from customers (a) 67,040 109,064 113,874
(a) Most payment terms of customers define that 30% of the total invoice needs to be prepaid before delivery of the goods. The decrease in advances received in
2017 compared to 2016 is partly caused by the advances received in BarcoCFG (21.8 million euro), which are in 2017 shown as part of the assets held for sale
(see note 3) and partly by lower advances received in Entertainment, mainly linked to lower cinema sales. The decrease in advances in 2016 compared to 2015
is mainly caused by lower advances received in in BarcoCFG.
21. Provisions
IN THOUSANDS OF EURO
BALANCESHEET2017
SALE OF SUBSI-DIARY
(-)
ADDITIONALPROVISIONS
MADE
AMOUNTSUSED
UNUSEDAMOUNTSREVERSED
REMEASURE-MENT GAINS /
(LOSSES)ON DBO
TRANSFER TO ASSETS HELD FOR
SALE
TRANS-LATION
(LOSSES) / GAINS
BALANCESHEET2016
BALANCE SHEET2015
Total long-term provision 24,607 -100 3,135 -974 -2,349 -5,224 - -704 30,824 17,992
Defined benefit obligations (b) 12,596 -100 1,034 -974 -102 -5,224 - 27 17,936 5,811
Technical warranty (a) 12,011 - 2,101 - -2,247 - - -731 12,888 12,181
Total short-term provision 26,904 -231 11,087 -6,370 -2,579 - -3,608 -1,052 29,657 28,910
Technical warranty (a) 12,011 -231 2,101 -1,739 - - -3,608 -731 16,219 12,181
Restructuring provision (c) 6,596 - 5,200 -4,244 - - - - 5,640 8,260
Other claims and risks (d) 8,297 - 3,785 -386 -2,579 - - -321 7,798 8,469
Provisions 51,512 -331 14,221 -7,345 -4,928 -5,224 -3,608 -1,755 60,481 46,903
(a) Technical warranty
Provisions for technical warranty are based on historical expe-
rience of the level of repairs and replacements. Additional
provisions are set up when a technical problem is detected.
There are three different technical warranty provisions:
The amounts shown in the balance sheet on employee benefit liabilities are short term obligations and consist mainly of salaries, bonuses
and holiday payments.
provisions related to ‘normal’ (mostly 2 years) warranty period,
provisions related to extended warranty periods and provi-
sions for specific claims/issues.
C/74Barco annual report 2017Financial statements
of 10-year government bonds. According to IAS19, Belgian
defined contribution plans that guarantee a specified return
on contributions are defined benefit plans, as the employer
is not responsible for the contribution payments, but has
to cover the investment risk until the legal minimum rates
applicable. The returns guaranteed by the insurance compa-
nies 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 insurance 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 insufficient,
additional employer contributions will be requested.
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-measure-
ments 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
differ materially from geographical location, characteris-
tics, regulatory environment, reporting segment or funding
arrangement. In accordance with IAS 19 the disclosure is in
the form of a weighted average. The change in accounting
treatment that resulted in an increase in the defined benefit
obligation was recognized through other comprehensive
income in 2016.
(b) Defined benefit obligations
As per 31 December 2017 and 2016, the defined benefit
obligations are composed of:
Early retirement plans are recognized as liability and expensed
when the company is committed to terminate the employ-
ment of the employees affected before the normal retirement
date.
IN THOUSANDS OF EURO 2017 2016
Pension plans in Belgium 7,405 12,318
Early retirement plans in Belgium 869 1,067
Local legal requirements
(mainly France, Germany, Japan, Korea and Italy) 4,079 4,435
A small number of individual plans 243 116
Total 12,596 17,936
In Belgium, a multi-employer plan exists for some blue-col-
lars 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. The
employer contributions made in 2017 amount to 0.1 million
euro, the same as in 2016 and 2015.
In 2015 and earlier years, the majority of the pension plans
at Barco were treated as defined contribution plans. Obliga-
tions for these plans were recognized as an expense in the
income statement as incurred. During 2015, Barco recog-
nized a defined contribution expense of 5.1 million euro on
these plans. On 18 December 2015, however, Belgian leg-
islation has been updated and clarification was provided on
the minimum guaranteed rate of return. Before 31 December
2015, the minimum guaranteed rate of return on employer
and participant contributions were respectively 3.25% and
3.75%. As from 2016 onwards, the rate decreased to 1.75%
and is annually recalculated based on a risk free rate
C/75 Barco annual report 2017
2017 changes in the Belgian defined benefit obligation and fair value of plan assets:
2016 changes in the Belgian defined benefit obligation and fair value of plan assets:
IN THOUSANDS OF EURO 2017
DEFINED BENEFIT OBLIGATION
FAIR VALUE OF PLAN ASSETS
NET DEFINED BENEFIT LIABILITY
On 1 January 92,041 -79,722 12.318
Pension cost charged to P/L
Service cost 6,556 - 6.556
Net interest expense 1,047 -944 104
Sub-total included in profit or loss 7,603 -944 6.660
Benefits paid -484 484 -
Remeasurement gains/losses in OCI
Increase due to effect of transfers - - -
Return on plan assets (excluding amounts included in net interest expense) - -1,882 -1,882
Actuarial changes arising from changes in demographic assumptions - - -
Actuarial changes arising from changes in financial assumptions -3,567 - -3,567
Experience adjustments 226 - 226
Sub-total included in OCI -3,341 -1,882 -5,223
Contributions by employer - -6,198 -6,198
Disposal of subsidiaries -1,743 1,591 -152
On 31 December 94,077 -86,672 7,405
IN THOUSANDS OF EUROBALANCE SHEET
2015REMEAUSUREMENT
GAINS/LOSSES IN OCIBALANCE SHEET
2016
INCREASE DUETO EFFECT OF TRANSFERS
SUBTOTALINCLUDED
IN OCI
Defined benefit obligations - 92,041 92,041
Fair value of plan assets - -79,722 -79,722
Net defined benefit liability - 12,318 12,318
C/76Barco annual report 2017Financial statements
The fair value of the plan assets (86.9 million euro) are fully
invested in insurance policies. The target asset mix consists
of 65.3% government bonds, 16% real estate, 9.2% corporate
bonds, 5.5% corporate loans and 4% shares.
The principal assumptions used in determining pension
obligations for the Group's plans are shown below:
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.
2017 2016
Discount rate 1.51% 1.16%
Future salary increases 2.58% 2.59%
Future consumer price index increases 1.90% 1.90%
IN THOUSANDS OF EURO 2017 2016
Discount rate:
0.25% decrease 2,032 2,361
0.25% increase -2,019 -2,605
Future salary change:
0.25% decrease -564 -494
0.25% increase 762 478
Future consumer price index change:
0.25% decrease -253 -901
0.25% increase 557 836
IN THOUSANDS OF EURO 2017 2016
Within the next 12 months 3,684 2,408
Between 2 and 5 years 16,393 13,947
Between 5 and 10 years 29,748 23,614
Total expected payments 49,826 39,969
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.
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 13.8 years (same in 2016).
The expected employer contributions to the plan for the
next annual reporting period amounts to 6.6 million euro (6.3
million euro in 2016); the expected employee contributions
1.1 million euro (1.0 million euro in 2016).
C/77 Barco annual report 2017
(c) Restructuring provision
See note 6 Restructuring and impairments.
(d) Other claims and risks
This provision relates to disputes with suppliers 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.
On December 2nd, 2014, Barco has communicated that
an enquiry is ongoing with the authorities of the People’s
Republic of China regarding the importation of large video
walls. These import transactions were managed via custom
brokers on behalf of local distributors and the investigation
relates to the period between 1997 and 2009, prior to the
local assembly of such video walls in China. No provision has
been set up related to this investigation, as no formal claim
has been made towards Barco.
With respect to the contingent liabilities related to the MTT
and Medialon acquisitions, there is one earn-out capped at
15 million euro linked to the retention of the former share-
holders and one uncapped for which the future results could
not be reliably estimated at acquisition. The earn-outs would
flow through profit and loss at moment of payment over the
earn-out period, i.e. per end of 2021 for the capped one and
per end of June 2018 for the uncapped one.
C/78Barco annual report 2017Financial statements
22. 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 ge-
nerally offset by opposite effects 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 effective hedge is recognized directly in
comprehensive income. As at 31 December 2017, 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 effects in foreign currencies, Barco uses
monetary items and/or derivative financial instruments as
described above, which are meant to offset 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 effect on the equity
position of Barco.
- Profit margins may be negatively affected because an
important part of sales are realized in foreign currencies,
while costs are incurred for a smaller part in these cur-
rencies. Barco has done great efforts in recent years to
increase its natural hedging ratio in USD (being its main
foreign currency in terms of sales) by increasing its ope-
rational costs and by purchasing more components in this
currency. Impact on adjusted EBIT is currently estimated at
18 million euro when the weighted average rate of a foreign
currency basket that has an overall overweight of CNY and
a heavily reduced weight of USD changes by 10% versus
the euro in a year. The overall natural hedge ratio of for-
eign currencies reached a level of more than 70% in 2017.
- 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.
C/79 Barco annual report 2017
Interest rate risk
Barco uses following hedging instruments to manage its
interest rate risk:
Swap on outstanding or anticipated borrowing
Barco has an outstanding variable loan of 2.0 million US dollar
(1.7 million euro equivalent) in place, of which variable interest
rate conditions have been swapped into a fixed 3.86%. The
fair value of the interest rate swap with a notional amount
of 9.4 million US dollar or 7.8 million euro equivalent is fully
recognized in the income statement.
Barco also concluded a series of interest rate swaps with an
outstanding notional amount of 14.7 million euro by means
of a partial hedge for the bilateral committed Credit Facili-
ties (currently outstanding at 26.0 million euro) that aim at
financing Barco's new HQ campus. This instrument swaps
the variable interest rate into a fixed 1.76%. These swaps are
determined as an effective hedge of outstanding or anti-
cipated borrowings and meet the hedging requirements of
IAS 39. The fair values of the effective portion of the hedging
instrument are therefore recognized directly in comprehen-
sive 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 20%
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
close to 60% 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 2017, Barco continued to conclude credit insurances in
order to cover credit risks on specific customers with whom
Barco entered into vendor financing agreements. Such ven-
dor financing agreements are concluded and monitored on
a case by case basis.
Credit risk on liquid securities and short-term
investments
A policy defining acceptable counter parties and the
maximum 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.
C/80Barco annual report 2017Financial statements
IN THOUSANDS OF EURO 2017 2016 2015
Carrying amount/Fair value (approx.)
Financial assets
Trade receivables 149,438 188,561 186,910
Other receivables 19,368 15,584 26,157
Loan and other receivables 17,913 14,725 22,315
Interest rate receivable 777 1 2,800
Currency rate swap 677 858 1,042
Other non-current assets 12,887 19,112 23,226
Cash and short-term deposits 254,130 353,549 341,277
Total 435,822 576,806 577,570
Financial liabilities
Financial debts 39,302 61,862 69,390
Floating rate borrowings 31,159 36,671 37,211
Fixed rate borrowings 8,143 25,191 32,179
Other long-term liabilities 4,555 11,198 2,839
Short-term debts 686 2,085 2,124
Trade payables 102,943 135,127 139,504
Other current liabilities 10,586 9,684 7,690
Other short term amounts payable 5,771 3,625 1,991
Dividends payable 2,347 2,368 2,134
Currency rate Swap 515 932 809
Interest rate swap 1,953 2,759 2,756
Total 158,072 219,956 221,547
Fair values
Set out below is an overview of the carrying amounts of
the group’s financial instruments that are showing in the
financial statements.
In general, the carrying amounts are assumed to be a close
approximation of the fair value.
The fair value of the financial assets and liabilities is defined
as the price that would be received to sell an asset or paid
to transfer a liability in orderly transaction in the principal
market at the measurement date under current market
conditions which are other than in a forced or liquidation
sale.
The following methods and assumptions were used to
estimate the fair values:
- Cash and short-term deposits, trade receivables, trade
payables, and other current liabilities approximate their
carrying amounts largely due to the short-term maturities
of these instruments.
- Long term fixed rate and variable rate other assets are eval-
uated by the Group based on parameters such as interest
C/81 Barco annual report 2017
rates, specific country risk factors, individual creditwor-
thiness of the customer and the risk characteristics of the
financed project. Based on this evaluation, allowances are
made to account for the expected losses of these receiv-
ables. As at 31 December 2017, the carrying amounts of
such receivables, net of allowances, are assumed not to
be materially different 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 esti-
mated 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
2017, the effective interest rate is not materially different
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.
IN THOUSANDS OF EURO 2017 2016 2015
Assets measured at fair value
Financial assets at fair value through profit or loss
Foreign exchange contracts - non-hedged 677 858 1,042
Financial assets at fair value through equity
AFS investments - 9,074 8,000
Liabilities measured at fair value
Financial liabilities at fair value through profit or loss
Foreign exchange contracts - non-hedged 515 932 809
Interest rate swap 884 1,297 658
Financial liabilities at fair value through equity
Interest rate swap 1,069 1,462 2,098
Fair value hierarchy
As at 31 December 2017, the Group held the following financial instruments measured at fair value::
C/82Barco annual report 2017Financial statements
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 effect on the recorded fair value are observable,
either directly or indirectly.
Level 3: techniques that use inputs having a significant effect
on the recorded fair value that are not based on observable
market data.
All fair values mentioned in the above table relate to Level 2,
except for the AFS investments which were based on Level
1 input (binding agreement of third party investor).
During the reporting period ending 31 December 2017, 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 2017 2016 2015
Net financial cash/(debt) 16 210,676 286,638 265,056
Equity 593,514 615,487 611,664
% Net financial cash (debt)/equity 35.5% 46.6% 43.3%
IN THOUSANDS OF EURO 2017 2016 2015
Equity 593,514 615,487 611,664
Total equity and liabilities 1,064,996 1,159,231 1,140,327
% Equity/Total equity and liabilities 55.7% 53.1% 53.6%
Capital Management
Management evaluates its capital needs based on following
data:
In 2017, the net cash position ended at a level of 210.7 million
euro compared to 286.7 million euro as per end of 2016,
mainly explained by the exclusion of the cash of BarcoCFG
at 67.4 million euro (assets held for sale).
The solvency position and other current ratios consolidate
at very healthy levels. Together with the existing committed
credit facilities, management considers that it has secured a
very healthy liquidity profile and strong capital base for the
further development of the group.
C/83 Barco annual report 2017
23. Operating leases
IN THOUSANDS OF EURO 2017 2016 2015
Non-cancellable operating leases are payable as follows:
Less than one year 7,457 7,335 6,628
Between one and five years 11,281 11,018 12,426
More than five years 3,202 3,834 5,208
Total 21,941 22,187 24,262
Non-cancellable operating leases mainly relate to leases
of factory facilities, warehouses and sales offices. During
the current year, the total rent expenses recognized in the
income statement amounted to 18 million euro (2016: 17.8
million euro, 2015: 15.7 million euro), of which 9.3 million
euro relating to rent of buildings (2016: 10.2 million euro,
2015: 10.2 million euro).
Changes in liabilities arising from financing activities
IN THOUSANDS OF EURO NON-CASH CHANGES
1 January2017 Cash flows
Foreign exhange
movementsVendor
financing1 Other31 December,
2017
Long-term borrowings 45,961 -8,401 -746 -1,038 -2,031 33,745
Short-term borrowings 13,585 1,401 -4,299 - - 10,686
Lease liabilities 20,850 -9,131 -1,519 -2,910 - 7,291
Total liabilities from financing activities 80,396 -16,131 -6,565 -3,948 -2,031 51,722
(1) The long-term borrowings include long-term payables in the frame of vendor financing programs,
of which the offset is included in the long-term receivables.
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.
C/84Barco annual report 2017Financial statements
25. Related party transactions
Barco NV has entered into arrangements with a number of its subsidiaries and affiliated 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’ on page A/71 for information with respect to remuneration of directors and
members of the core leadership team.
24. Rights and commitments not reflected in the balance sheet
IN THOUSANDS OF EURO 2017 2016 2015
Guarantees given to third parties (a) 2,567 3,009 3,662
Mortgage obligations given as security (b) 30,000 32,844 33,672
- book value of the relevant assets 48,152 57,115 46,376
Buy back obligations (c) 996 3,486 3,565
Purchase commitment (d) 7,507 2,002 2,723
Sales commitment (e) 1,151
(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 project. The increase in the book value in 2015,
2016 relates to the new building at the headquarters of Barco; decrease as
of 2017 due to depreciation.
(c) Barco appeals on a vendor-lease program with the obligation to take back
sold goods, in case of insolvency of the client. No buy-back provision is set
up for this risk as all risks and rewards are transferred upon the sale. Total
possible value of the obligation to take back sold goods amounts to 1 million
euro in 2017 (2016: 3.5 million euro, 2015: 3.6 million euro).
(d) This relates to the extended production facility at the headquarter in
Belgium in 2017. In 2015 and 2016, this relates to the new headquarters in
Belgium. There are no purchase commitments on intangible fixed assets.
(e) This relates to preliminary sales agreements of parts of the land on the
Poperinge site in Belgium.
On 4 December 2017, Barco announced that it has reached
an agreement to enter into a strategic joint venture with
China Film Group, Appotronics and CITIC. This new cinema
JV will focus on commercializing cinema solutions based on
each company’s products and services for the global cinema
market excluding mainland China.
The joint venture is expected to become effective during the
second quarter of 2018 after customary regulatory appro-
vals have been obtained and following consultation with the
relevant social and governmental entities.
C/85 Barco annual report 2017
26. Cash flow statement: effect of acquisitions and disposals
The following table shows the effect of acquisitions and dis-
posals on the balance sheet movement of the group. In 2017,
the movement on the balance sheet coming from acquisi-
tions relates to the acquisition of P2M assets, the additional
purchase of 51% shares in Habornveien and the payments and
releases of previous acquisitions MTT and Advan. The move-
ment coming from divestments relates to the divestment
of Barco Lighting and Barco Silex. In 2016, the movement
on the balance sheet coming from acquisitions relates to
the acquisition of Medialon and MTT, the divestment relates
to the sale of the Orthogon business where the remaining
1 million euro was released from escrow. In 2015 the move-
ment on the balance sheet coming from acquisitions relates
to the acquisition of Advan. The divestments in 2015 relate to
the Defense & Aerospace divestment. As the balance sheet
of the Defense & Aerospace business has been presented
as assets of discontinued operations per end of 2014, the
balances sold as of the end of January 2015 represent no
movement of the continued balance sheet. See Note 1.3 for
more information on these acquisitions and divestments.
IN THOUSANDS OF EURO ACQUISITIONS DIVESTMENTS
2017 2016 2015 2017 2016 2015
Non-current assets 5,724 28,693 3,048 451 - 19,521
Capitalized development cost - - - - - 11,933
Customer list 3,036 - 2,226 - - -
Software - - 71 10 - -
Know-how 166 28,976 - - - 870
Buildings and (leased) building 836 - - 2 - 884
Tangible assets and other intangible assets - 38 414 374 - 2,821
Deferred tax assets - - - -93 - -
Other non-current assets 1,687 -322 337 158 - 3,013
Current assets - 496 4,887 6,079 - 79,139
Inventory - -90 1,623 2,595 - 47,615
Trade debtors & other receivables - 586 3,264 3,484 - 31,523
Non-current liabilities 697 17,577 312 331 - 6,616
Other long term liabilities 500 9,862 - - - 2,920
Deferrred tax liabilities 197 7,715 312 - - 343
Provisions - - - 331 - 3,352
Current liabilities -861 798 2,763 274 - 37,497
Trade payables - 50 2,519 349 - 20,316
Other payables -861 748 244 -75 - 17,181
Net-identifiable assets and liabilities 5,888 10,813 4,861 5,925 - 54,547
C/86Barco annual report 2017Financial statements
The total purchase price in 2017 relates to the acquisition of
the P2M assets for 2.6 million euro, the first deferred consi-
deration of 2.0 million euro on the MTT/Medialon acquisition
and the increased investment in Habornveien for 1.9 million
euro. On the other hand, 0.7 million euro was released from
escrow to cover reps and warranties. The 2017 divestment
relates to the sale of the Lighting business and Barco Silex
for respectively an amount of 6.2 million euro and 1.1 mil-
lion euro.
The total purchase price in 2016 relates to the acquisition of
Medialon and MTT of 11.7 million euro, minus the purchase
price correction on Advan of 0.8 million euro and a release
from escrow on the Awind acquisition of 2013. The cash
flow statement acquisition of group companies show net of
acquired cash of Medialon and MTT as the acquisition was
cash and debt free.
The total purchase price in 2015 relates to the acquisition of
Advan of 11.8 million euro. The cash flow statement acquisi-
tion of group companies show net of acquired cash of Advan
as the acquisition was cash and debt free.
The 2016 divestment relates to the remaining escrow on the
sale of the Orthogon business of 1 million euro. The 2015
divestment relates to the sale of the Defense & Aerospace
business for an amount of 146.1 million euro and the escrow
and net working capital adjustment received on the sale of
the Orthogon business for an amount of 1.4 million euro. The
cash flow statement disposal of group companies shows net
of sold cash of the business for an amount of 7.9 million euro.
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.
IN THOUSANDS OF EURO ACQUISITIONS DIVESTMENTS
2017 2016 2015 2017 2016 2015
Non-operating profit (losses) on disposals - - - - - -
Goodwill on acquisitions/disposals - -584 4,774 - - 13,048
Gain on sale of divestments - - - 513 - 64,102
Acquired/(sold) cash 6 504 2,168 727 - 7,924
Received consideration - - - 7,165 1,000 146,146
Purchase price 5,894 10,732 11,803 - - -
C/87 Barco annual report 2017
27. 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.
C/88Barco annual report 2017Financial statements
Auditor’s report
INDEPENDENT AUDITOR’S REPORT TO THE GENERAL MEETING OF BARCO NV FOR THE YEAR ENDED 31 DECEMBER 2017
As required by law and the Company’s by-laws, we report to
you as statutory auditor of Barco NV (“the Company”) and its
subsidiaries (together “the Group”). This report includes our
opinion on the consolidated balance sheet as at 31 Decem-
ber 2017, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year ended
31 December 2017 and the disclosures (all elements together
“the Consolidated Financial Statements”), and includes as well
our report on other legal and regulatory requirements. These
two reports are considered as one report and are inseparable.
We have been appointed as statutory auditor by the share-
holders meeting held on 30 April 2015, in accordance with
the proposition by the Board of Directors following recom-
mendation of the Audit Committee and on recommendation
of the workers council. Our mandate expires at the share-
holders meeting that will deliberate on the annual accounts
for the year ending 31 December 2017. We have been per-
forming the audit of the Consolidated Financial Statements
of the Group since before 1990.
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS 2017
Unqualified Opinion
We have audited the Consolidated Financial Statements of
Barco NV, which consists of the consolidated balance sheet
as at 31 December 2017, the consolidated income statement,
the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consol-
idated cash flow statement for the year ended 31 December
2017 and the disclosures, which show a consolidated
balance sheet total of € 1.064.996 thousands and of which
the consolidated income statement shows a profit for the
year of € 32.784 thousands.
In our opinion the Consolidated Financial Statements of the
Group as at 31 December 2017 give a true and fair view of the
consolidated net equity and financial position, as well as its
consolidated results and its consolidated cash flows for the
year then ended in accordance with the International Finan-
cial Reporting Standards as adopted by the European Union
(“IFRS”), and with applicable legal and regulatory requirements
in Belgium.
Basis for the unqualified opinion
We conducted our audit in accordance with International
Standards on Auditing (“ISAs”). Our responsibilities under
those standards are further described in the section “Our
responsibilities for the audit of the consolidated financial
statements” of our report.
C/89 Barco annual report 2017
We have complied with all ethical requirements that are rel-
evant to our audit of the Consolidated Financial Statements
in Belgium, including those with respect of independence.
We have obtained from the Board of Directors and the Com-
pany's officials the explanations and information necessary
for the performance of our audit and we believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
Consolidated Financial Statements.
The key audit matters were addressed in the context of our
audit of the Consolidated Financial Statements as a whole
and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Impairment of goodwill
Description of the matter
Goodwill amounts to € 105.4 million or 10% of the consoli-
dated balance sheet at 31 December 2017. In accordance with
IFRS, the Group is required to annually test for impairments
on goodwill. As described in Note 10 of the Consolidated
Financial Statements, the test resulted in an impairment loss
of € 10.9 million.
The valuation of goodwill is significant to our audit because
the assessment process thereof by the Group’s management
is complex, contains various judgmental decisions, and is
strongly affected by assumptions with regard to expected
future cash flows and market conditions.
Procedures performed
Our audit procedures included, among others, the following:
• We have analyzed the Company’s impairment model
including the significant underlying assumptions (sales
growth rate during the 5-year projection period, EBITDA
percentage on sales, long term growth rate beyond the
projection period, discount rate).
• We have assessed whether the cash generating units were
defined in accordance with IFRS.
• We made an assessment of the historical accuracy of
management’s estimates and compared forecasted sales
growth and EBITDA percentages on sales for all cash
generating units with the Group’s business plan as adopted
and approved by the Board of Directors.
• We used a valuation expert in our firm to assess the
methodology, clerical accuracy, long term growth rate and
discount rate by comparison to market practice, past
performance, the Group’s cost of capital and relevant risk
factors.
• We analyzed the sensitivity analyses prepared by
management to understand the impact of reasonable
changes in the key assumptions.
• We considered additional impairment triggers by reading
board minutes, and holding regular discussions with
management.
• We assessed the adequacy of the Group’s disclosures in
Note 10 to the Consolidated Financial Statements.
C/90Barco annual report 2017Financial statements
Valuation of deferred tax assets
Description of the matter
Deferred tax assets on tax carry-forward losses and tax credits
amount to € 45.1 million or 4% of the consolidated balance
sheet at 31 December 2017, (as described in Note 13 of the
Consolidated Financial Statements). The Group recognizes
deferred tax assets on unused tax carry-forward losses and
tax credits to the extent that it is probable that future taxable
profits will be realized against which unused tax losses and
tax credits can be utilized.
The valuation and recoverability of deferred tax assets is sig-
nificant to our audit due to the magnitude of the amount
recognized for these assets and because the Group’s assess-
ment process requires management estimates, in particular
on the assumptions regarding expected future market and
economic conditions and tax laws and regulations.
Procedures performed
Our audit procedures included, among others, the following:
• We have evaluated the amounts and local expiry periods
of unused tax carry-forward losses and tax credits together
with any other applicable restrictions in recovery for each
relevant jurisdiction.
• We assessed and discussed management’s forecasts of
taxable income including the underlying assumptions such
as revenue growth, gross margin, cost developments, the
applicable tax legislation and tax planning assumptions.
• We used a tax expert in our firm to assist us in these audit
procedures.
• We assessed the adequacy of the Group’s disclosures in
Note 13 of the Consolidated Financial Statements.
Allowance for inventory
Description of the matter
The allowance for slow-moving inventory amounts to € 91.8
million as at 31 December 2017 and comprises allowances on
raw materials, work in progress and finished products that are
considered excess or obsolete. The Group states inventory at
the lower of cost or net realizable value. The allowance for
slow-moving inventory is calculated based on the age and
the expected turnover of the inventory.
The allowance for slow-moving inventory is important to our
audit due to the magnitude of the gross inventory amount
(€ 224.5 million) and related allowance, and because the
calculation of the slow-moving inventory items involves
management’s judgment and is subject to uncertainty due
to rapid technological changes.
Procedures performed
Our audit procedures included, among others, the following:
• We have assessed the design and operating effectiveness
of the Group’s internal controls on the inventory allowan-
ce and write-off process, including relevant IT application
controls.
• We evaluated and discussed the analyses and assessments
made by management with respect to slow-moving and
obsolete stock items and related sales forecasts.
• We have evaluated the historic accuracy of the assess-
ments made by management.
• We tested the net realizable value of a sample of inventory
items by comparing their actual sales price with inventory
unit value.
• We assessed the adequacy of the Group’s disclosures in
Note 14 of the Consolidated Financial Statements.
C/91 Barco annual report 2017
Responsibilities of the Board of Directors and Audit
Committee for the preparation of the Consolidated
Financial Statements
The Board of Directors is responsible for the preparation of
the Consolidated Financial Statements that give a true and
fair view in accordance with IFRS and with applicable legal
and regulatory requirements in Belgium. This responsibility
includes: designing, implementing and maintaining internal
control relevant to the preparation of the Consolidated Finan-
cial Statements that give a true and fair view and that are free
from material misstatement, whether due to fraud or error.
As part of the preparation of the Consolidated Financial State-
ments, the Board of Directors is responsible for assessing
the Group’s ability to continue as a going concern. Based
on the financial reporting framework mentioned, the Board
of Directors should prepare the financial statements using
the going concern basis of accounting unless the Board of
Directors either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Our responsibilities for the audit of the Consolidated
Financial Statements
Our objectives are to obtain reasonable assurance about
whether the Consolidated Financial Statements are free
from material misstatement, whether due to fraud or error
and to express an opinion on these Consolidated Financial
Statements based on our audit. Reasonable assurance is a
high level of assurance, but not a guarantee that an audit
conducted in accordance with the 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 Financial Statements.
As part of an audit in accordance with ISAs, we apply profes-
sional judgment and we maintain professional scepticism
throughout the audit. We also perform the following tasks:
• Identification and assessment of the risks of material
misstatement of the Consolidated Financial Statements,
whether due to fraud or error, the planning and execu-
tion of audit procedures to respond to these risks, and
obtain audit evidence which is sufficient and appropriate
to provide a basis for our audit opinion. The risk of not
detecting material misstatements is larger when these mis-
statements are due to fraud, since fraud can be the result
of conspiracy, forgery, deliberate failure to record trans-
actions, deliberate misrepresentation or breaking through
the internal control system;
• Obtaining insight in the system of internal controls that
are relevant for the audit and with the objective 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 selected and applied accounting policies, and
evaluating the reasonability of the accounting estimates
and disclosures in the given circumstances;
• Conclude on the appropriateness of the Board of Direc-
tor’s 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 Company or Group’s ability
to continue as a going concern.
C/92Barco annual report 2017Financial statements
If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the
related disclosures in the Consolidated Financial State-
ments or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on audit evidence
obtained up to the date of the auditor’s report. However,
future events or conditions may cause the Company or
Group to cease to continue as a going-concern.
• Evaluating the overall presentation, structure and content
of the Consolidated Financial Statements, and whether
these financial statements reflect the underlying trans-
actions and events in a true and fair view.
We communicate with the Audit Committee within the Board
of Directors regarding, among other matters, the planned
scope and timing of the audit and significant audit findings,
including any significant findings in internal control that we
identify during our audit.
Because we are ultimately responsible for the opinion, we
are also responsible for directing, supervising and
performing the audits of the subsidiaries. In this respect
we have determined the nature and extent of the audit
procedures to be carried out for group entities.
We provide the Audit Committee within the Board of
Directors with a statement that we have complied with
relevant ethical requirements regarding independence,
and 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 Commit-
tee within the Board of Directors, we determine those
matters that were of most significance in the audit of the
Consolidated Financial Statements of the current period
and are therefore the key audit matters. We describe these
matters in our report, unless the law or regulations prohibit
this.
REPORT ON OTHER LEGALAND REGULATORY REQUIREMENT
Responsibilities of the Board of Directors
The Board of Directors is responsible for the preparation
and the content of the Board of Director’s report and other
information included in the annual report, the compliance
with the legal and regulatory requirements regarding book-
keeping, as well as compliance with the Belgian Companies
Code (“BCC”) and with the Company’s by-laws.
Responsibilities of the auditor
In the context of our mandate and in accordance with the
additional standard to the ISA’s applicable in Belgium, it is
our responsibility to verify, in all material respects, the Board
of Director’s report and other information included in the
annual report, as well as compliance with certain legal and
regulatory requirements and to report any matters.
C/93 Barco annual report 2017
Aspects relating to Board of Director’s report and other
information included in the annual report
In our opinion, after carrying out specific procedures on the
Board of Director’s report, the Board of Director’s report is
consistent with the Consolidated Financial Statements and
has been prepared in accordance with article 119 of the BCC.
In the context of our audit of the Consolidated Financial
Statements, we are also responsible to consider whether,
based on the information that we became aware of during
the performance of our audit, the Board of Director’s report
and other information included in the annual report, being:
• Letter from the CEO (section A page 4-7)
• Key Figures (section A page 8-9)
• Financial Highlights (section A page 10-11)
contain any material inconsistencies or contains informa-
tion that is inaccurate or otherwise misleading. In light of
the work performed, we do not need to report any material
inconsistencies. In addition, we do not express any form of
assurance regarding the individual elements included in the
Board of Director’s report and other information included
in the annual report.
The non-financial information required by article 119 §2 of
the BCC has been included in the Board of Director’s report
on the Consolidated Financial Statements, which is part of
section B of the annual report. The Group has prepared this
non-financial information based on the Global Reporting
Initiative standards (hereafter “GRI”). However, we do not com-
ment on whether this non-financial information has been
prepared, in all material respects, in accordance with GRI.
Independence matters
We have not performed any assignments that are not com-
patible with the legal audit of the Consolidated Financial
Statements and during the course of our mandate we have
remained independent of the Company and the Group.
The fees for additional assignments that are compatible with
the legal audit of the Consolidated Financial Statements
intended by article 134 of the BCC have been correctly dis-
closed and detailed in the notes to the Consolidated Financial
Statements.
Other communications
• This report is consistent with our
supplementary declaration to the Audit
Committee as specified in article 11 of the
regulation (EU) nr. 537/2014.
Ghent, 8 February 2018
Ernst & Young Bedrijfsrevisoren BCVBA
Statutory auditor
Represented by
Marnix Van Dooren
Partner*
* Acting on behalf of a BVBA/SPRL
C/94Barco annual report 2017Financial statements
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 differ from the accounting principles
used for the consolidated annual accounts: the statutory
annual accounts follow the Belgian legal requirements,
while the consolidated annual accounts follow the 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 2017 gives a true and fair view
of the financial position and results of the company in accor-
dance with all legal and regulatory dispositions.
C/95 Barco annual report 2017
Balance sheet after appropriation
IN THOUSANDS OF EURO 2017 2016 2015
Non-current assets 451,277 655,445 978,420
Intangible fixed assets 42,113 49,931 63,496
Tangible fixed assets 71,094 64,284 55,427
Financial fixed assets 336,991 539,113 856,736
Amounts receivable after more than one year 1,079 2,117 2,761
Current assets 239,454 255,985 254,590
Stocks and contracts in progress 69,326 72,617 69,314
Amounts receivable within one year 112,564 118,758 114,537
Investments (own shares) 42,386 47,968 54,624
Cash at bank and in hand 524 503 370
Deferred charges and accrued income 14,654 16,139 15,745
Total assets 690,731 911,430 1,233,010
Capital and reserves 328,165 365,156 409,524
Capital 55,858 55,824 55,649
Share premium account 146,543 146,144 143,821
Reserves 48,599 54,181 60,837
Accumulated profits 76,480 108,164 148,627
Investment grants 685 843 590
Provisions and deferred taxes 21,506 20,177 17,432
Provisions for liabilities and charges 21,506 20,177 17,432
Creditors 341,060 526,097 806,054
Amounts payable after more than one year 36,641 54,321 365,936
Amounts payable within one year 304,419 471,776 440,116
Total Iiabilities 690,731 911,430 1,233,010
Barco NV’s balance sheet further strengthened as a result of
a capital decrease in Barco Coordination Center (168 million
euro) of which 140 million euro has been used to reimburse
the short term loan to Barco Coordination Center in 2017.
The financial fixed assets further decreased because of an
impairment on Projection Design (24.7 million euro) because
of the announced transfer of business from Norway to
Belgium.
C/96Barco annual report 2017Financial statements
In 2016 financial fixed assets decreased with 318 million euro
mainly as the result of a capital decrease in Barco Coordina-
tion Center (232 million euro) and Barco Integrated Solutions
(95 million euro). A long term loan to Barco Coordination
Center was reimbursed for an amount of 308 million euro.
The increase of 92 million euro of financial fixed assets in
2015 consists of the intercompany acquisition of the shares
of Barco Integrated Systems (106 million euro net), partly
offset by the impairment of the shares of X2O Media Inc (12.8
million euro) and the sale of the participation in Barco Texen
(-4.3 million euro) and Barco Singapore (-1.3 million euro) to
Esterline (as part of the Defense & Aerospace divestment).
The intangible fixed assets relate mainly to the implementa-
tion cost of SAP ERP software (increase in 2017: 5.4 million
euro, increase in 2016: 4.6 million euro, 2015: 3.6 million
euro). The total gross value of the SAP ERP software imple-
mentation cost per December 2017 amounts 44.4 million
euro.
The SAP capital expenditures are depreciated as roll out
is performed successfully (April 2014 in India, July 2015 in
Belgium, July 2016 in Germany and July 2017 in US). Per roll-
out a part of the licenses are taken into use. Pro rata these
licenses in use, the SAP capital expenditures are taken into
use and amortized over 7 years. The amortization in 2017
amounts to 4.7 million euro compared to 4.3 million euro
in 2016 and 1.7 million euro in 2015.
Next to this, the decrease of the intangible fixed assets in
2017 is the result of further amortizing the capitalized devel-
opment, ending in 2017, after the change in accounting
treatment in 2015, which resulted in no longer capitalizing
development expenses.
The increase of the tangible fixed assets with 7 million euro in
2017, 11.4 million in 2016 and 25 million euro in 2015, relates
to the new headquarter building in Kortrijk, which has been
taken in use as of February 2016. The total gross value of
the new building is 45 million euro. An extended operations
facility is currently under construction (6.8 million euro in
2017 compared to 2.8 million euro in 2016).
In 2017 and 2016, the inventory remained stable (-3 million
euro in 2017 and + 3 million euro in 2016) while in 2015,
the stocks and contracts in progress decreased due to the
divestment of Defense and Aerospace (-37.7 million euro).
C/97 Barco annual report 2017
IN THOUSANDS OF EURO 2017 2016 2015
Sales 634.306 569,504 520,910
Operating income/(loss) 18,673 -25,280 -36,390
Financial result 2.581 4,218 -5,795
Extraordinary result -32,437 -3,368 33,460
Income taxes -128 601 2,627
Profit/(loss) for the year -11,311 -23,829 -6,098
Income statement
Barco NV sales in 2017 increased to 634 million euro, up
11%, compared to 569.5 million euro in 2016. The operating
income in 2017 is a profit of 18.7 million euro, compared to
a loss of -25.3 million euro in 2016. Higher sales combined
with a gross profit margin improvement, as result of a positive
mix effect and value engineering efforts, results in a higher
operating income. All years are negatively impacted by the
change in accounting treatment of development expenses
as from 2015 there was no capitalization of development
expenses anymore while amortizations on the capitalized
development expenses were still included (2017 : 7.9 million
euro, 2016: 17.7million euro, 2015: 29.2 million euro).
In 2017 the financial income decreased as a result of lower
intercompany dividends received of 6.1 million euro (Barco
Taiwan), while in 2016 the financial income increased with
10 million mainly as a result of 14.5 million euro dividends
received (no dividends received in 2015), although no interest
income from Intercompany loans was received (3.7 million
euro in 2015).
The extra-ordinary result in 2017 and 2016 consists of impair-
ments booked on financial fixed assets explained above and
in 2017 a loss on the realization of an intercompany receiv-
able from X2O of -7.2 million euro. In 2015 the extra- ordinary
result mainly relates to the gain realized on the divestment of
the Defense and Aerospace division for an amount of 50.4
million euro, impairments on intercompany participations
(-15.6 million euro) and -1.3 million euro realisation loss on
own shares.
The income tax in 2017 shows a small cost of 0.1 million
euro. This is the total of a withholding tax cost on received
dividends of 0.7 million euro and a tax credit on research
and development expenses. The latter was 0.5 million euro
in 2017, 1.3 million euro in 2016 and 2.6 million euro in 2015.
There was also a withholding tax cost on received dividends
of 0.7 million euro in 2016.
C/98Barco annual report 2017Financial statements
IN THOUSANDS OF EURO 2017 2016 2015
Profit/(loss) for the year for appropriation -11,311 -23,829 -6,099
Profit brought forward 108,164 148,628 176,373
Profit to be appropriated 96,853 124,799 170,273
Transfer from other reserves -5,582 -6,656 458
Profit to be carried forward 76,480 108,164 148,628
Gross dividends 25,955 23,292 21,188
Total 96,853 124,800 170,273
Proposed appropriation of Barco NV result
The board of directors of Barco NV proposed a gross
dividend of 2.1 euro per share relating to the result as of 31
December 2017. In 2017 a gross dividend of 1.9 euro per
share was paid out on the results of 2016; in 2016 1.75 euro
was paid out.
C/99 Barco annual report 2017
IN THOUSANDS OF EURO 2017 2016 2015
Adjusted EBIT 73,241 36,557 1,698
Impairment of capitalized development costs - 1,364 4,866
Restructuring -4,244 -4,917 -3,622
Gain on sale of divestments -513 -1,000 -1,406
Amortization capitalized development cost - 21,509 44,575
Depreciation of tangible and intangible fixed assets 33,877 28,572 22,906
Gain/(Loss) on tangible fixed assets 362 -401 -543
Share in the profit/(loss) of joint ventures and associates 1,290 263 -1,073
Gross operating Free Cash Flow 104,011 81,947 67,402
Changes in trade receivables -7,326 205 -5,443
Changes in inventory -3,577 -2,829 27,565
Changes in trade payables -19,660 -2,676 16,297
Other changes in net working capital -8,113 11,883 32,773
Change in net working capital -38,677 6,583 71,191
Net operating Free Cash Flow 65,334 88,530 138,593
Interest received 4,666 7,272 4,303
Interest paid -2,653 -3,161 -4,098
Income taxes -4,395 -11,538 -14,938
Free Cash flow from operating activities 62,952 81,103 123,861
Purchases of tangible & intangible FA (excl One Campus) -23,160 -24,241 -14,730
Proceeds on disposals of tangible & intangible fixed assets 168 578 1,137
Free Cash flow from investing activities -22,992 -23,663 -13,593
FREE CASH FLOW 39,960 57,440 110,268
Supplementary statements
The below comments include the assets held for sale
of BarcoCFG. We refer to page C/23 on the critical
accounting judgements for more background on the
intended sale of 9% of Barco’s current stake of 58% in
BarcoCFG.
Positive Free Cash Flow of 40 million euro generated in 2017
(2016: 57.4 million euro, 2015: 110.3 million euro) coming
from a considerable improvement in gross operating free
cash flow, partly offset by a lower DPO (decrease from
Free Cash Flow
63 days in 2016 to 58 days in 2017) and lower advances
received. The net of the components trade debtors, inventory
and accounts payable remained stable as percentage of sales
at 20% (2016: 20%, 2015: 21%).
At the end of December 2017, Barco’s net cash position is
278.1 million euro, slightly lower than 2016 (2016: 286.6 mil-
lion euro, 2015: 265 million euro).
C/100Barco annual report 2017Financial statements
Balance Sheet
The below comments include assets held for sale of
BarcoCFG. We refer to page C/23 on the critical accounting
judgements for more background on the intended sale of
9% of Barco’s current stake of 58% in BarcoCFG.
On 31 December 2017, trade receivables ended at 182.1
million euro. DSO remained at the same level of 2016 at 55
days (2016: 55 days; 2015: 58 days).
Inventory ended (excluding acquisitions, disposals and cur-
rency impact) at 154 million euro, slightly lower than previous
year, resulting in turns of 3.6. This is at the same level as per
end of 2016 and 2015.
Trade payables decreased to 114.5 million euro from 135.1
million euro at the end of 2016 (2015: 139.5 million euro).
Decrease is the result of paying suppliers sooner, on average
after 58 days in 2017 compared to 63 days in 2016.
C/101 Barco annual report 2017
IN THOUSANDS OF EURO 2017 2016 2015
Trade debtors 182,106 188,561 186,910
Inventory 154,063 166,202 165,960
Trade payables -114,548 -135,127 -139,504
Other working capital -263,270 -276,004 -234,358
Working capital -41,649 -56,368 -20,991
Capitalized development - - 22,847
Other long term assets & liabilities 244,079 259,987 218,762
Operating capital employed 202,430 203,618 220,618
Goodwill 113,385 124,255 132,386
Operating capital employed (incl goodwill) 315,815 327,874 353,004
Adjusted EBIT 73,241 36,557 1,698
ROCE after tax (%) (a) 19% 9% 0%
Return on operating Capital Employed
(a) Tax rate used is the adjusted tax rate in 2017(16%), the effective tax rate in 2016 and 2015 (both at 20%). See note 7 for the calculation of the adjusted tax rate.
Note: The operating capital employed includes the assets
held for sale of BarcoCFG.
Total working capital remained low, negative at -3.8% of sales
versus -5.1% at year-end 2016. Difference is mainly related
to lower outstanding trade payables and lower advances on
customer contracts.
In 2016 and 2015 adjusted EBIT was negatively impacted by
the decision to no longer capitalize development expenses;
excluding the impact of the amortization on capitalized
development, return on capital employed stood at 15%
in 2016, 11% in 2015. Return on capital employed further
improved in 2017 to 19%, as a result of a higher adjusted
EBIT, lower capital employed and a lower adjusted tax rate.
C/102Barco annual report 2017Financial statements
Glossary
Financial term or APM Explanation
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. sales building headquarters) and other non-operating income/(expense). Results out of divestments or acquisitions are included in EBIT(DA).
Adjusted return on operating capital employed (ROCE)Adjusted EBIT after tax relative to operating capital employed (including goodwill), including the assets held for sale. ROCE = Adjusted EBIT*(1- adjusted tax rate)/Operating capital employed (including goodwill)
Adjusted tax rate(Taxes related to current income before taxes - non current items of 2017 (effect of change in expected tax rate on deferred taxes+ set up of deferred tax assets, not recognized in prior years))/Income before taxes.
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.
BarcoCFGFull name is CFG Barco (Beijing) Electronics Co, Ltd. Barco CFG is the entity where Barco joined forces with China Film Group to address the Chinese cinema market. Barco holds a 58 % stake in this entity at end of 2017.
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.
Dividend yield Gross dividend as a percentage of the share price on 31 December.
DPODays payable outstanding calculated as Trade Payables / (Material cost + Services and other costs) x 365; including assets held for sale.
DSODays sales outstanding calculated as ((Trade debtors + trade debtors Barco CFG (see note 3 assets held for sale), net) / (sales past quarter)) * 90; including assets held for sale.
EBIT
Operating result (earnings before interest and taxes), calculated as gross profit less research & development
expenses, sales and merketing 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).
Equity methodMethod of accounting whereby an investment (in a joint venture or an associate) is initially recognized at cost and subsequently adjusted for any changes in the investor’s share of the joint venture's or associate’s net assets (i.e. equity). The income statement reflects the investor’s share in the net result of the investee.
Free cashflowGross operating cash flow excluding share options recognized as cost + change in networking capital + Interest (expense)/income + income taxes + purchase of tangible and intangible fixed assets (excl. One Campus) +proceeds on disposals of tangible and intangible fixed assets.
Indirect costs / expensesResearch & development expenses, sales and marketing expenses and general andadministration expenses including depreciations and amortizations.
Inventory turnsInventory turns = 12 / [Inventory / (average monthly sales last 12 months x material cost of goods sold %)],including assets held for sale.
C/103 Barco annual report 2017
Financial term or APM Explanation
Net financial cash/(debt)Cash and cash equivalents + long-term financial receivables - long-term debts - current portion of long-term debts - short-term debts.
Non-recurring tax itemsEffect 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.
Operating capital employed (including goodwill) Operating capital employed + goodwill including assets held for sale.
Operating capital employed (OCE) Working capital + other long term assets and liabilities, including assets held for sale.
Operating expenses (OPEX)Research & development expenses, sales and marketing expenses and general andadministration expenses excluding depreciations and amortizations.
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 e-mail and electronic version of the purchase order out of the customer’s ERP system. The e-mail needs to originate from the customer’s mail server and not from a personal mail account. - 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, etc.
OrderbookOrderbook 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 liabilitiesOther 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 11, 12 and 13 for the amounts.
Other working capital
Other working capital include the net of other non-current assets, other amounts receivable, prepaid expenses and accrued income, other long term liabilities, advances received from customers, tax payables, employee benefits liabilities, other current liabilities, accrued charges and deferred income and provisions, includings assets held for sale.
Subsidiaries Companies in which Barco exercises control.
Working capital (net) Trade debtors + inventory - trade payables - other working capital.
C/104Barco annual report 2017Financial statements
Group management
Beneluxpark 21
BE-8500 Kortrijk
Tel : +32 (0)56 23 32 11
Registered office
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: carl vandenbussche@barco com
Copyright © 2018 Barco NV
All rights reserved
Realization
Barco Corporate Marketing & Investor Relations Office
Focus Advertising
Barco
Beneluxpark 21
8500 Kortrijk – Belgium
A/116 Barco annual report 2017