Axis Q3 2015 Growth Rebounds

Author: John Honovich, Published on Oct 15, 2015

After an extremely bad Q2, where true sales actually declined, Axis has bounced back in Q3.

Is this the beginning of a comeback for the former video surveillance market leader or is this a blip?

In this note, we examine their financial results, looking at sources of growth and changes in expansion.

***** *********** *** **, ***** **** ***** ******** ********, **** *** ******* **** in **.

** **** *** ********* ** * ******** *** *** ****** video ************ ****** ****** ** ** **** * ****?

** **** ****, ** ******* ***** ********* *******, ******* ** sources ** ****** *** ******* ** *********.

[***************]

Financials ********

** ********* ***********% ** ***** ********** **** **** ****, ******** ** *** previous *******'* *% ******* ***.

**************, *** ******** *** *** ***, **** ** ***** ** growth **** (**%) *** ******* **** (**% ** ******* *******). This *** * ***** ********** ******** ** *** ******** ******* where ****** *** -*%.

****** *** ***** **** **% ****** *** **** ********* ** struggle ** **** ***** **** *** ** ****** (*% *** better **** *** ******** ******* ***** *** -*%).

Driver / ***********

*** ******* ***** ** ** * ********** ** * ******* last *******, *** * *********** ***** *******. **** ********* ****, in *** ********, *** **** ** ***** ******* **** ******* was ****** ** * ******** **** "****** ***** ***********" ** Q2. ** **** ****, **** *****, "******** ****** ** *** quarter **** ************* ****** **** ******** *****." **** **** **** that **** *** "****** *** ** ********* *** ******** *** actual ******* *** ****** * ******." *******, **** ******** ** comment ** **** ******* *** ****** ****** ****.

Constraining ***** / *********

**** ** ***** ** ****** *** ********, **** *** ****** costs / *********. **** **** ****, ********* ******** *** **** ** ~10%. ** ****, **** ***** **** *** ********* ** * **** of ~**%. *******, *** *** **** **** ****, **** *** added **** ** *********.

Access ******* ******?

**** *** *** ***** ****** ** ***** '*****' ******* ********. Historically, **** *** *** ***** ***** ****** ******** *** **** has ****** ********** ***** **. ** ********, '*****' ******* *** jumped ******* ** ****, *** ** ~$* ******* *** *** Q3, **** **** ****. **** ** ***** **** ~*% ** Axis ***** ***** *** ** *** ******** ******** ******* ****** **** ******** (****** ** ********* *** *** ****** up ** ******** ******** *** ******* ****** ******* ******).

*******

***** ******* *** ******** *** ****, ******* **** ******* *** continued *************** ** *** *** *** ** *** ****** (***** is ***** *********** ********), **** ** **** ** ******** *** market ********. **% ****** ****** ******* ** ** ********** **** going ******* (*** ** *** ****** ***** **********), *** ****** digit ****** ******* ********.

****, ** *** ******** ****, **** ********* ** ******* **** new ******** ********* ******* ** ****** *** *** **** ***** uses **** *** ******* * *******. *** ********* **** ** how **** **** *** **** *** ********* ** *** ** mid ****** *********** / ***** *** *** ************ ***** ** the *********** ** ******* ***********, **** *********, *** ***** ******* feature **** *** ******* ** **** ***** ******.

Comments (13)

Good article, just one comment:

Americas was 57% of total sales in Q3...(instead of 52%).

Good eye, thanks and fixed. I was cross checking Axis financial reports from earlier in the year when it was 52%. Fascinating how big the Americas has become for Axis.

Here is the pie chart for others interested:

From the analysis above it sounds like the Q2 numbers were artificially low, due to an inability to fulfill all orders, and Q3 was artificially high, due to clearing out backlog once product was available to ship.

It sounds as if overall Axis business is seeing roughly 4-5% net growth (2% Q1, ~5% normalized Q2, ~6% normalized Q3)?

Well, Q1 2015 was 2% growth for Axis, and the second half of 2014 was 7%.

So yes, the trend is in the ~5% range. The bigger question becomes what happens going forward. Do all of their new products pull them up from that range? Does the ever increasing low-cost competition of Hikvision, Dahua, Hanwha/Samsung pull them down? My gut feel is that the latter will have a bigger impact than the former and that zero growth or declines is likely over the next 12 months.

YTD 09.2015, total net sales growth was +5% yoy in local currencies and +24% with exchange rate effects.

Good analysis, John. The commoditization of low end video doesn't bode well for manufacturers competing in the price-driven segment but the higher end is where Axis can & does compete. It's expensive funding innovation coupled with exceptional support but we all know the continual problems encountered with low priced solutions. Nobody wants to travel to the 100th floor in an elevator supplied by the lowest bidder.

At that time, Axis noted, "incoming orders in the quarter were significantly higher than reported sales."

I'm not sure I understand Swedish Accounting but, if not as recorded as sales, what would the incoming orders been recorded as?

IMHO, supply chain disruptions initially delay cash flow/income much more than sales revenue. Until they get to the point where customers start canceling orders or stop placing them because of bad promise dates.

It's not a sale unless you ship, typically. Ergo, they could not count it as a sale even though they had the PO.

I am not sure why they are calling it a 'supply chain disruptions' because it's not clear what exactly happened.

It's not a sale unless you ship, typically. Ergo, they could not count it as a sale even though they had the PO.

Ok, fair enough, but surely it's got be to be reflected at PO time in some G/L item, like advance sales or booked sales, don't you think?

Not an accountant nor an expert in Swedish accounting regulations, but it's a basic principle that if you are selling product, you don't count it as sales until it ships. Otherwise, you have companies crazy inflating sales numbers by getting POs on the last day of the period.

I am not sure why they are calling it a 'supply chain disruptions' because it's not clear what exactly happened.

My guess (somewhat educated) is that they had PO's from distributors for products they had yet to manufacture. The reasons include:

  1. new product announcements--but slow to fill orders for them.
  2. Also, they seemed to slow production during the period when they were being acquired and shortly after being acquired.
  3. Nor did they seem prepared for the busy summer season for K-12 school projects--being heavily back-ordered.

So, orders/PO's were in their hands, but they were not shipping, meaning these were not yet sales.

I agree.

In other industries, this backlog would be reflected in the book-to-bill ratio. Is there nothing like that for this industry?

I do not recall seeing metrics like that reported in financials for video surveillance manufacturers.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

Intersec 2019 Show Report on Jan 23, 2019
The 2019 Intersec show, held annually in Dubai, is now complete. IPVM attended for 3 days, interviewing numerous Chinese and Western video...
Milesight Company Profile on Jan 22, 2019
Milesight Technology, a Chinese company building an International branded business, says they are slowly building their presence through a series...
Milestone Favorability Results 2019 on Jan 21, 2019
Milestone's favorability moderately strengthed, in new IPVM integrator statistics over their results from 2016. While the industry has been...
Mobile Surveillance Trailers Guide on Jan 17, 2019
Putting cameras in a place for temporary surveillance where power and communications are not readily available can be complicated and expensive....
Avigilon Favorability Results 2019 on Jan 15, 2019
Since IPVM's 2017 Avigilon favorability results, the company was acquired by Motorola and has shifted from being an aggressive startup to a more...
Gorilla Technology AI Provider, Raises $15 Million, Profiled on Jan 15, 2019
Gorilla Technology is a Taiwanese video analytics manufacturer that recently announced a $15 million investment from SBI Group, saying this...
Arecont Costar Layoffs on Jan 14, 2019
Arecont Vision, a Costar Company, has laid off more than 10% of their workforce in a move the company described to IPVM as a result of "important...
CyberExtruder Face Recognition Profile on Jan 04, 2019
CyberExtruder offers 3D modeling face recognition software that they say provides quicker and more accurate matches than other 2D face recognition...
Last Chance - Security Sales Course 2019 on Jan 03, 2019
This is last chance to register for the IPVM sales course: This sales course is customized for the needs and challenges specific to...
European Startup Ajax Profile - They "Stand Against Evil" on Jan 03, 2019
European intrusion detection startup Ajax Systems proclaims: How are they standing against evil? And what are the differentiators and potential...

Most Recent Industry Reports

Testing Bandwidth vs. Frame Rate on Jan 23, 2019
Selecting frame rate has a major impact on surveillance bandwidth and storage consumption. But with smart codecs now common and cameras more...
Camera Course January 2019 on Jan 23, 2019
This is the only independent surveillance camera course, based on in-depth product and technology testing. Lots of manufacturer training exists...
Bosch Favorability Results 2019 on Jan 23, 2019
Bosch's favorability moderately strengthed, in new IPVM integrator statistics over their results from 2017, with 2019 results showing strong net...
Intersec 2019 Show Report on Jan 23, 2019
The 2019 Intersec show, held annually in Dubai, is now complete. IPVM attended for 3 days, interviewing numerous Chinese and Western video...
2019 Camera Book Released on Jan 22, 2019
This is the best, most comprehensive security camera training in the world, based on our unprecedented testing. Now, all IPVM PRO Members can get...
Milesight Company Profile on Jan 22, 2019
Milesight Technology, a Chinese company building an International branded business, says they are slowly building their presence through a series...
Cable Trenching for Surveillance on Jan 21, 2019
Trenching cable for surveillance is surprisingly complex. While using shovels, picks, and hoes is not advanced technology, the proper planning,...
Milestone Favorability Results 2019 on Jan 21, 2019
Milestone's favorability moderately strengthed, in new IPVM integrator statistics over their results from 2016. While the industry has been...
The IP Camera Lock-In Trend: Meraki and Verkada on Jan 18, 2019
Open systems and interoperability have become core features of video surveillance systems, as virtually all professional IP cameras integrate with...
NYPD Refutes False SCMP Hikvision Story on Jan 18, 2019
The NYPD has refuted the SCMP Hikvision story, the Voice of America has reported. On January 11, 2018, the SCMP alleged that the NYPD was using...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact