Barco NV

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Barco NV

President Kennedypark 35
B-8500 Kortrijk
Belgium
Telephone: ( + 32) 56-262-611
Fax: ( + 32)56-262-262
Web site: http://www.barco.com

Public Company
Incorporated: 1934 as Belgium American Radio Corporation
Employees: 4,696
Sales: EUR 751.11 million ($707.2 million)(2000)
Stock Exchanges: Euronext Brussels
Ticker Symbol: BAR
NAIC: 333315 Photographic and Photocopying Equipment Manufacturing; 334310 Audio and Video Equipment Manufacturing; 334510 Electromedical and Electrotherapeutic Apparatus Manufacturing

Barco NV has carved out a niche for itself as a world leader in high-technology visualization systems. The Kortrijk, Belgium company operates through three primary divisions: Barco Projections Systems, BarcoView and BarcoVision. Together these three companies combined to generate sales of EUR 751 million in 2000, of which more than 90 percent was made outside of Belgium, and more than 50 percent outside of Western Europe. The North American market accounts for some 30 percent of the company’s sales. Barco has also targeted the Asian market for growth since the late 1990s; those markets, including operations in Japan, China, and Singapore, accounted for 20 percent of the company’s 2000 revenues. Barco Projection Systems, which represents 42 percent of company sales, develops and manufactures large-image projection systems, include the Barco Control Room system used by television broadcasters. BarcoView manufactures high-resolution display devices for a variety of industries, as well as graphics control devices and related subsystems. BarcoView designs systems for a variety of industries, from military to air traffic control systems to medical imaging systems. This division contributed EUR 135 million in revenues in 2000. The company’s third division, BarcoVision, manufactures optical detection and inspection systems, sorting machines and other computerized viewing systems with such applications as food sorting and other camera-, laser-, and infrared-based sorting machines; measuring systems; and turnkey systems for textile, plastics, and other industries. In addition to its three core divisions, Barco also operates a Specialized Subcontracting division, which develops customized electronic circuit boards, and Electronic Tooling Systems for printed circuit board manufacture. Quoted on the Brussels stock exchange since 1987, Barco has been seeking to spin off or divest some of its operations. Such was the case with BarcoNet, the company’s telecom division, which was spun off as an independent public company in 2000. In 2001, the company shed its Barco Graphics division, which was merged into a joint-venture with Denmark’s Purup-Eskofot. The company’s plan to spin off its other divisions as public companies was put on hold in 2001 because of the prevailing difficult climate for small-scale public companies. The company is led by president and CEO Hugo Vandamme, who is credited with transforming the company into one of Flemish Belgium’s strongest high-tech companies since the early 1980s. Chairman Herman Daems also represents the company’s largest shareholder, the Flanders region investment group GIMV.

Belgian Radio and Television Pioneer in the 1930s

Barco was founded in 1934 in the town of Poperinge, in the Flemish-speaking region of Belgium. Founder Lucien de Puydt’s initial business was to assemble radios from parts imported from the United States—hence the name of his company, the Belgium American Radio Corporation, or “Barco.” The company’s radios were highly popular in post-war Belgium and Barco’s rising sales enabled it to make investments toward entering another highly promising industry, that of television. By the 1960s, Barco’s television had become a mainstay in many of Belgium’s living rooms. Part of the company’s success was based on its willingness to incorporate compatibility with the variety of European broadcasting standards then being developed, and especially the Secam standard adopted by neighboring France, and the PAL standard adopted in various implementations by much of the rest of Europe. In this way, the company’s customers were able to tune into broadcasts from the Netherlands, Luxembourg, France, and Germany, as well as from Belgium itself.

While consumer goods were to remain an important part of Barco’s business into the 1980s, the company began to diversify into other markets as early as the 1960s. The first of these came in 1965, when the company developed an automated control system for a Belgian maker of weaving looms. This beginning was eventually to lead the company to regrouping around such high-technology niches.

In 1970 the company diversified again, this time adapting its existing television technology to develop a new generation of television studio monitors for Belgium’s national television and radio service, the BRT. The success of these monitors gave the company a new niche market and a means to grow into an internationally operating company.

Barco continued to invest in the high-technology sector during the 1970s and especially in the growing electronics field. At the beginning of the 1980s, Barco struck new success with the launch of its BarcoVision large-screen projection system. This product was to form the basis of the company’s strongest sales in the years to come. In the meantime, however, the early 1980s nearly spelled disaster for the company. Heavy competition from Japanese television makers, coupled with a Europe-wide recession that caused a drop in television sales combined to depress Barco’s own revenues. The rapid rollout of cable television in some of Barco’s core European markets, which eliminated the need for multiple-standard compatibility, further crippled the company’s television sales. Barco’s heavy reliance on its consumer products—which, despite the company’s diversification, still generated more than 85 percent of its sales—sent the company skidding toward a collapse.

Barco found rescue in the form of GIMV, an investment company operated by the Flanders regional government. GIMV took over a majority of Barco’s shares and placed Hugo Vandamme as head of the Barco group. GIMV also led a breakup of Barco, which was divided into its two core companies, Barco Industries and Barco Electronics in 1981. Barco Industries took over the company’s industrial automation equipment operations, while Barco Electronics took over the company’s projection systems and high-end monitor systems. Barco’s former mainstay, consumer goods activities were gradually phased out by the end of the decade.

Barco Breaks Up in the 21st Century

Both Barco Industries and Barco Electronics went public, listing on the Brussels exchange in 1986 and 1987 respectively. The GIMV remained the majority shareholder of both companies, however, and, in 1989, the two companies were again combined together under the single Barco name. The newly recombined company now sought to step up its international presence, establishing itself as a worldwide leader in its various operational niches.

Among the company’s new activities was the development of pre-press printing systems, which the company built up by acquiring a number of companies starting in 1989, including Disc Graphics. The operations were then grouped under a new division, Barco Graphics. Another growing area of operation was that of printed circuit boards and other microelectronics products, which was stepped up with the acquisition of full control of its Barco Micro Electronics subsidiary in 1994, as well as the purchase of a majority share in Belgium’s Silex the following year. Barco meanwhile was achieving a top spot in the growing market for large-screen video projection systems. Among the strongest of the company’s performers was its BarcoNet telecommunications unit, which developed and manufactured communications components and systems for television broadcasting, telecommunications, and Internet applications.

The company stepped up its international expansion during this period as well, setting up offices in Singapore, Australia, and elsewhere. By the end of the decade, Barco had developed a global manufacturing and distribution infrastructure, with production facilities in Belgium, Germany, the Netherlands, Norway, Switzerland, the United Kingdom, the United States, the Czech Republic, Japan, and India, while its network of subsidiaries and sales offices grew to include more than 30 countries. Much of the company’s growth came through acquisitions, such as those of Loepfe, of Switzerland, boosting the company’s automation division, acquired in 1994, and BarcoNet’s purchase of RE, based in Denmark, in 1997, enhancing its telecommunications industry capacity. That same year the company acquired Pulsarr, of the Netherlands, and the United States’s Electronic Image Systems.

A new acquisition in the United States followed in 1998 when the company acquired Gerber Systems Corp., a subsidiary of Gerber Scientific, which added its computerized plate graphics systems to Barco Graphics. The company also expanded into Taiwan, Australia, and India that year, and boosted its German process control systems operations with the acquisition of that country’s Dr. Seufert.

Company Perspectives:

Barco operates worldwide and seeks permanent market and quality leadership in various technological areas. With constant enthusiasm, high-quality research and development and flexibility, the group targets niche markets and produces a constant stream of product innovations. Creativity and motivation are the key to the group’s success. To maintain this success into the future, Barco believes in intrapreneurship and in activities that operate autonomously. These activities are split up into various business units. Each of these business units is a flat organization in which small, tight teams work together. In this way each associate is totally involved in all aspects of management (marketing, sales, engineering and manufacturing), allowing for very rapid adjustment to clients ’ technical needs.

Yet 1998 proved a low point for the company. Sales at its key Projection Systems division plunged after a fire destroyed one of its production facilities. The company’s share price, which had peaked at EUR 260 per share, lost half its value by 1999, and dropped to a low of EUR 96 by 2001. At the same time, principal shareholder GIMV, which retained a 34 percent share in the company, began to grow impatient for signs of improvement and began pressuring Barco to simplify its operations.

Barco responded by splitting the company in two, spinning off BarcoNet as an independent, publicly listed company. Barco chief Vandamme pledged that this spin-off was only the first of many as the company promised to spin off its remaining four divisions as independent companies soon after. Yet the drop in the stock market at the beginning of the new century forced the company to place this plan on hold—if only temporarily. Indeed, the company suggested that it might complete its divestment program by 2005. The company’s relatively flat organization, with each division operated more or less autonomously, with its own management structure, helped simplify the prospects for future spinoffs.

In the meantime, the majority of the company’s operations returned to revenue and profit group. Only the company’s Barco Graphics division remained in trouble, but that was enough to drag down the group’s overall profits. By the summer of 2001, the company sought to divest the business and succeeded in doing so in September of that year, when it reached an agreement to merge Barco Graphics with one of its chief rivals, Denmark’s Purup-Eskofot, held by the family behind the Lego Group. The new company, which received the temporary name of BPE, was to be majority-owned by Purup-Eskofot, although Barco retained a 49 percent share of the company.

Barco was now stripped down to three core and highly complementary divisions: Projection Systems; Barco View, and Barco Vision, each of which attacked a different niche within an overall visualization specialty. The company planned new external expansion efforts, such as the acquisition of a Japanese rival with complementary operations, possibly by the end of 2001. The company also acknowledged its interest in pursuing acquisition targets in the United States, which by then had grown to its single-largest market. Barco expected its business to grow substantially from the end of 2001—the destruction of the World Trade Center in New York was expected to step up demand for many of the company’s core specialties, including air traffic monitoring components. At the same time, the company’s Intelliroom video long-distance communication and conferencing systems were expected to help fill the gap of business people more reluctant to travel by air.

Key Dates:

1934:: Lucien de Puydt founds Belgium American Radio Corporation to assemble radios from American-made components, then enters television manufacturing in the 1950s.
1965:: Company diversifies for the first time into automated control systems.
1970:: Barco develops professional studio monitors for BRT, sparking new diversification drive into electronics and industrial activities.
1981:: Barco splits into two companies, Barco Industries and Barco Electronics; nearly bankrupt, the company is rescued by GIMV.
1986:: Barco Industries goes public on Brussels exchange.
1987:: Barco Electronics goes public.
1989:: Two Barco companies are re-combined as Barco electronics group, ending the company’s consumer goods operations. Barco acquires Disc Graphics, then forms new division, Barco Graphics.
1994:: The company Acquires Loepfe, of Switzerland.
1997:: Barco acquires Denmark’s RE, Pulsarr, of the Netherlands, and the United States’s Electronic Image Systems.
1998:: Barco acquires Gerber Systems Corp, a maker of plate-to-image systems, which is placed under Barco Graphics; fire destroys Projection Systems manufacturing facility, causing drop in sales.
2000:: Barco spins off its BarcoNet subsidiary as an independent, publicly listed company, and makes plans to spinoff its four remaining divisions as well.
2001:: Company sheds troubled Barco Graphics in merger with Purup-Eskofot, but places the remainder of its divestiture plan on hold.

Principal Subsidiaries

Barco Graphics n.v.; Barco Coordination Center n.v.; AESTHEDES n.v.; Barco Picotron n.v.; Barco Creative Systems n.v.; Barco Silex s.a.; Barco Elbicon n.v.; ELBICON Industries n.v.; Barco Graphics s.a.; Barco s.a.; BarcoView, Texen s.a. (France); Barco Ltd. (UK); Barco Graphics Ltd.(UK); ARTOIS UK Ltd. (UK); BarcoVision Ltd. (UK); OLDOIS Engineering Ltd. (UK); OMNIWARD Ltd. (UK); GERBER Systems Corporation Ltd. (UK); Barco GmbH (Germany); Barco Sedo GmbH (Germany); BAASEL-SCHEEL Lasergraphics GmbH (Germany); Barco CONTROL ROOMS GmbH (Germany); GERBER Systems GmbH (Germany); Barco Graphics GmbH(Germany); ARTIOS Deutschland GmbH (Germany); BarcoView GmbH (Germany); Barco Finance b.v.(Netherlands); PULSARR Industrial Research b.v. (Netherlands); Barco Holding b.v. (Netherlands); Barco b.v. (Netherlands); Barco Electronic Systems s.a. (Spain); Barco Service S.L. (Spain); Barco s.r.l, Via Monferrato (Italy); B&B International s.r.l (Italy); Barco Loepfe s.r.l. (Italy); Barco s.r.o., Bieblova 19 (CZ); Gebr. Loepfe A.G., Kastellstrasse (Switzerland); Treepoint A.G. (Switzerland); Barco A.G. (Austria); Barco A/S (Denmark); Barco GesmbH (Austria); Barco Sp. z o.o. (Poland); ELECTRONIC IMAGE SYSTEMS, Inc. (USA); BarcoVision Inc. (USA); Barco Electronic Tooling Systems Inc. (USA); BarcoView Inc. (USA); Barco Graphics Inc. (USA); Barco Inc. (USA); Barco Ltd. (China); GERBER Systems Corporation Ltd. (China); Barco Trading Co. Ltd. (China); Barco Electronic Systems Ltd. (Taiwan); Barco Graphics Private Ltd. (Singapore); Barco Pte Ltd. (Singapore); BarcoView Pte Ltd. (Singapore); Barco Hotline Pvt., Ltd. (India); Barco Electronic Systems Pvt., Ltd. (India); Barco Ltd. (Thailand); Barco Ltd. (Korea); BarcoView Ltd. (Korea); Barco Co., Ltd. (Japan); SIS Corporation, Takara Bld. (Japan); Barco Graphics Co. Ltd. (Japan); Barco Sdn. Bhd. (Malaysia); Barco Electronic Systems Ltd. (Israël); Barco Ltda. (Brazil); Barco Systems Pty Ltd. (Australia); Elbicon Pacific Pty. Ltd. Australia); Barco Electronics SA de CV (Mexico); Barco Ltda. (Chile).