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Say.Do.Barco Company Report 2017

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


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


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

2,500

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


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


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

Company profilePage A/14

Our technologyPage A/16

Our company


A/13Barco annual report 2017Our company

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


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


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


Display technology

Projection technology

Image processing

Collaboration technology


EntertainmentPage A/20

EnterprisePage A/26

HealthcarePage A/30

Our activities


A/19Barco annual report 2017Our activities

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


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


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


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 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


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


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


based on sales 2017

20162017


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


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


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


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


based on sales 2017

Highlights

20162017


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


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


Ambition and strategy

Page A/36

Enabling brightoutcomesPage A/39

Lead by innovation

Page A/40

Our strategy


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


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.


Lead by

INNOVATION

Focus to

PERFORM

Offer

OUTCOME-BASED SOLUTIONS

Go for

SUSTAINABLE IMPACT

Planet

People

Communities


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


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


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


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


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


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


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.


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


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


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


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



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


Corporate governance statementPage A/55

Board ofDirectorsPage A/56

Governance


A/53Barco annual report 2017Governance

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


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


Bruno HolthofFrank Donck

Charles Beauduin

Ashok K. Jain Hilde Laga

Jan De Witte

Board of Directors


An Steegen Christina von Wackerbarth

Jan P. OosterveldLuc Missorten


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


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


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


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


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


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


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


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


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


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


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,


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


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


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.


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


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


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


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


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 - -


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


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


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


Risk management processPage A/83

Risk factorsPage A/87

Financial risk managementand internal controlPage A/89

Risk management and control processes


A/81Barco annual report 2017Risk management

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


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


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


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


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’)


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


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


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


Commentson the resultsPage A/92

Consolidated resultsfor the fiscal year 2017Page A/94

Divisional resultsfor the fiscal year 2017Page A/100

Management discussion


A/91Barco annual report 2017Management discussion

+ 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


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


Order book

IN MILLIONS OF EURO FY17 FY16 FY15

Order book 318.8 320.8 333.2

Order intake


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


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


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%


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%


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


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


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


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


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


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%


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



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%


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



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%


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


Shareholder information


A/105Barco annual report 2017Shareholder information

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


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


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


02-1

1-20

17

02-0

1-20

17

02-0

2-20

17

02-0

3-20

17

02-0

4-20

17

02-0

5-20

17

02-0

6-20

17

02-0

7-20

17

02-0

8-20

17

02-0

9-20

17

02-1

0-20

17

02-1

2-20

17

31-1

2-20

17

02-1

1-20

17

02-0

1-20

17

02-0

2-20

17

02-0

3-20

17

02-0

4-20

17

02-0

5-20

17

02-0

6-20

17

02-0

7-20

17

02-0

8-20

17

02-0

9-20

17

02-1

0-20

17

02-1

2-20

17

31-1

2-20

17

02-1

1-20

17

02-0

1-20

17

02-0

2-20

17

02-0

3-20

17

02-0

4-20

17

02-0

5-20

17

02-0

6-20

17

02-0

7-20

17

02-0

8-20

17

02-0

9-20

17

02-1

0-20

17

02-1

2-20

17

31-1

2-20

17

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

80

100

120

140


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


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


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


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)


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


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


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


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.


#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.


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.


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.


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)


Communities

Page B/45

B/12Barco annual report 2017Our Sustainability Impact Plan (SIP)

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.


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.


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.


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


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.


(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)


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)


(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


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.


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


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


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


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.


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.


• 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.



for mobility in 2016

16.99tCO


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%



-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.



for infrastructure in 2016

7.43 tCO


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%


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).


-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).


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


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


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.


-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%


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


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


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.


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


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.


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


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


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.


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%


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-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.


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


Experience



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.


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


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


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.”


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.


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.


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


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


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.


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.


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.


Governance structure specifically related to sustainability

Page 59

Stakeholder engagement

Page 60

Our sustainability management


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


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


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


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


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


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


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.


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


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


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



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


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).



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.


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.


Cash flow statement


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



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).


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



- 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


- -8,131 - 1,610 -224 - -6,746 -445 -7,190


- -8,131 - 1,610 -224 - -6,746 -445 -7,190


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


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



- 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


- 2,940 - -22,907 393 - -19,573 -1,294 -20,868


- 2,940 - -22,907 393 - -19,573 -1,294 -20,868


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.


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


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.


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.


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.


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.


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


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


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.


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.


(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.


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 -


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.


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.


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 .



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


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.


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


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.


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.


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


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.


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


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


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


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%



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 assets and liabilities for Entertainment are excluding the assets held for sale.


2.4. Healthcare


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%



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



2.5. Reconciliation of segment information with group information


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



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.



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 - -



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:


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%


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.


4. Income from continued operations (EBIT)


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.


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.


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).


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%


Indirect costs and other operating income (expenses) - net


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


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.


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


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) General and administration expenses

(d) Other operating income (expense) – net


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.


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


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).


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


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).


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


7. Income taxes


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).


8. Earnings per share



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


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.


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.


Share of the associates' balance sheets:

Current assets 3,046 3,262 269


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


10. Goodwill


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


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.


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):


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%


11. Capitalized development costs


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:


Entertainment 679 3,039

Enterprise 402 1,683

Healthcare 283 144

Total 1,364 4,866


12. Other intangible assets and tangible fixed assets


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


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


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


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).


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:


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.


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.


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


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.


15. Amounts receivable and other non-current assets

(a) Movement in bad debt reserve:


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


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%).


(b) At 31 December 2017, the aging analysis of trade receivables is as follows:


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)).


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


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


- 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


(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%


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:


- 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).


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




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


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


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


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:


18. Equity attributable to equity holders of the parent


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.


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


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


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)


GRANTED IN 2017

EXERCISED IN 2017

CANCELLED IN 2017

EXPIRED IN 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


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%


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:



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.


20. Trade payables and advances received from customers


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.


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.


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


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


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%


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


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) 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.


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.


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.



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


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.


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::


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.


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%


Equity 593,514 615,487 611,664


% 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.


23. Operating leases


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.


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


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.


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


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.


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.


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 - - -


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.


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.


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.


Valuation of deferred tax assets


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.



• 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.


Note 13 of the Consolidated Financial Statements.

Allowance for inventory


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.



• 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.


Note 14 of the Consolidated Financial Statements.


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.


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.


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


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.


Balance sheet after appropriation



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.


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).



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 extraordinary

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.



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.



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).


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.



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.


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.


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.


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


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