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P R E S S   R E L E A S E

BARCO estimates current pre-tax profit in the first half of 1999 at 1.800 Million BEF  

Results are preliminary -- prior to audit

Kortrijk, 8 July 1999. (Preliminary results prior to audit.)  BARCO estimates that its current profit before taxes and amortization of consolidation goodwill will be BEF 1,800 million (44,62 Million Euro) for the first half of 1999. This is 13.5% of turnover. BARCO had already announced that the profits for the first half of 1999 would be lower than the same period in 1998. Based on current estimates, the fall in comparison with the first half of 1998 should be about 30%. For the second half BARCO expects better results, which however, will be lower than the results for the second half of 1998. For the whole of 1999, BARCO expects current profit before taxes to be about one quarter below current profit before taxes for 1998.

As mentioned before, the weak results for 1999 can be explained mainly by the market share lost by BARCO Projection Systems, the limited availability of thermal plates at BARCO Graphics and the crisis in the textile machines market at BARCO Automation.

BARCO Communication Systems continued to grow rapidly, partly due to the ring networks introduced last year. BARCO Projection Systems introduced with success the new LED wall, for which the first orders have already been placed. BARCO Graphics launched the PrintStreamer 2, and could immediately sign a strategic partnership with Xerox. BARCO Automation successfully introduced at the ITMA trade fair in early June the Cyclops, a visual on-loom inspection system.

BARCO's results include the balance (BEF 400 million) of the compensation for trading loss caused by the fire at BARCO Projection Systems. The introduction of a number of new products was delayed because of the fire. There was a lot of interest in these new products at the INFOCOMM tradeshow in Orlando, Florida in early June. The innovative products that attracted the most attention were the DLPTM projector and the LED wall.

The LED wall is a modular wall made up of light components, making it possible to reproduce video and computer images on very large surfaces even in daylight and in open air. Typical applications for the LED wall can be found e.g. in sports stadiums. The first orders already came in at the beginning of July. LED projects easily amount to several tens of millions BEF.

The projector that BARCO has developed on the basis of Texas Instruments' DLPTM technology offers the highest light output in today's market and combines this with an extremely high image quality. It allows for projection onto screens up to 175 m². This ELM or Extreme Light Machine projector will be available for delivery from September 1999.

Partly thanks to these products, BARCO Projection Systems is expecting to improve its position in the market.

Control room and simulator activities grew remarkably fast during the first half of 1999 in comparison with last year.

At BARCO Graphics, the former Gerber Systems in the United States received an order from USA TODAY this June for 56 CrescentNews type platesetters. The first deliveries took place during that same month. All the machines will be delivered before the end of 1999. Availability of thermal plates for platesetters with this type of plates continued to be limited during the first half of the year. This situation will improve during the second half. The introduction of software packages running under WindowsNT will have a positive impact on the third quarter and particularly the fourth quarter results. These software packages greatly reduce the need for customers to invest in hardware. The announcement of this introduction has had the effect of slowing down orders during the first half. The PrintStreamer 2, an innovative product intended to considerably increase performance in digital color printing and introduced in the second quarter, will have much more of a positive impact on the second half results than on the first half. 

BARCO Automation was very successful with its new products at ITMA in early June. ITMA is the most important textile machines fair. It is held every four years and all companies supplying investment goods to the textiles sector take part. There was particular interest in the Cyclops, a visual on-loom inspection technology. This considerably enhances expectations for the year 2000. As expected, BARCO Automation continued to suffer during the first half of 1999 from the consequences of the crisis in the textile machines market. 

In the first half BARCO Machine Vision's sales fell sharply due to restructuring in the market for tobacco producers. The result of this restructuring was that there is a temporary investment freeze in a significant part of this market. BARCO Machine Vision has adapted the tobacco sorting machines to the larger production lines installed in today's factories. This will create much greater opportunities in this market for BARCO Machine Vision in the near future. BARCO Machine Vision had success in the sales of sorting machines based on X-ray technology. These are highly improved machines with increased capacity and enhanced performance. BARCO Machine Vision played an important part in the introduction of visual inspection technology in the BARCO Automation product range.

BARCO Communication Systems did very well during the first half of 1999, with sales up by 26% on the same period in 1998. Cable television hardware and digital ring networks produced rising sales in Belgium, Spain, the UK and the United States. BCS Denmark reached break-even point in the first half of the year, thanks to some major projects in Germany. The order book and prospects for BARCO Communication Systems are still positive for the second half of the year.

BARCO has six strategic activities: BARCO Graphics, BARCO Projection Systems, BARCO Display Systems, BARCO Communication Systems, BARCO Automation and BARCO Machine Vision. These six key activities deliver turnover of more than BEF 26 billion (EUR 655 million). More than 90% of this is realized outside Belgium. BARCO has a network of subsidiaries, distributors and agents in 97 countries throughout the world. BARCO has been quoted on the Brussels Bourse since 1986. BARCO is a BEL 20 company. You can find more information about BARCO on the Web:  http://www.barco.com.

BARCO n.v.

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For more information:
JP Tanghe
Director Corporate Communication and Investor Relations
Pres. Kennedypark 35
8500 Kortrijk
Tel : 056/262.634
Fax : 056/262.262