Mobotix Growth Rebounds

After its revenue growth flatline over the past year, the latest financials from Mobotix show that company's growth has rebounded moderately. In this note we examine the company's Q3 financial report, released at the end of last month (a more granular version of the report here). 

Financial Highlights

• Sales have increased 15% in Q3 to 22.2 million Euros ($29.3 USD). This is the biggest increase the company has seen in a while. 
• Non-European buyers are driving Mobotix’s growth. Sales outside of Europe, which grew ~31% now account for more than 40% (9.3 million Euros/$12.2 million USD) of all sales. This success outside of its home continent shows that Mobotix is becoming a more global company.
• Mobotix dome camera sales have increased ~33% while sales of fixed cameras have declined almost 4%, following a broader trend in the industry of customer preference for dome cameras.

High Profit Margins

Their profit margin is up to 14%, compared to last year at 11%. Gross profit increased 2.6 points from 69.3% to 71.9%. 

The gross margins are extremely high for a camera manufacturer, one could argue too high. At a 71.9% gross profit margin, if Mobotix sells cameras for $1000 each, it costs them an average of ~$280 to make. Mobotix could sell cameras for $600 and have similar gross profit margins as Axis and Avigilon. With such a steep price drop, Mobotix would sell far more units to far more customers. That noted, Mobotix has evidently chosen a strategy of high gross margins over maximizing market share. What is amazing is that the profit margin has actually increased when it was already at a high number. 

New Product Impact

In our last report about Mobotix financials, we noted that the lack of new product releases  was holding them back. Since then, Mobotix has released a number of new product/releases at ASIS 2012 that likely have helped Mobotix find an upward trend. See page 34 of their financial report presentation for six recently launched products. 

Market Growth Forecast

The report including the following chart created from IHS research on the CCTV market. IHS expects network camera sales to in crease at a CAGR of 24.9% (vs. analog 1.9%) and on megapixel cameras CAGR to increase while standard resolution decrease. Mobotix says this is an "attractive market segment with sustainable growth medium term."  

Future Outlook

Mobotix remains conservative in their short term projections, estimating a 5% growth in sales revenue for the current financial year and 15% for the mid-term.