Mobotix's 2010 Year End Financial Results ExaminedBy John Honovich, Published on Feb 25, 2011
For the second half of 2010, Mobotix recorded significant revenue growth at a far higher rate than the previous year and its best results since the start of the recession. In this note, we examine the key drivers and metrics driving those numbers. Let's start by examining the 56 page Mobotix Half Year Report:
- 47% sales growth for calendar Q4 2010 year over year; Sales for H2 2010 at 34.6 Million Euros ($50 Million USD)
- Domes now outselling fixed cameras: "A large part of revenue growth continued to be achieved through increased sales of dome cameras, which rose by 65.3% from €10.2 million to €16.9 million. Sales revenues for fixed cameras grew by 30.0% to €16 million in comparison with the same period last year."
- Outside of Europe driving growth: "In Germany, revenue rose by 15.0% from €7.7 million to €8.9 million. In the rest of Europe (excluding Germany), revenue climbed 37.6% to €14.0 million. For the rest of the world, revenue rose from €6.0 million to €11.7 million, representing a 95.6% growth."
- Hemispheric (Q24) sales cited as key driver: "The fact that the Company’s main competitors cannot offer any comparable products shows MOBOTIX AG’s innovative strength and enables the company to occupy a unique position in this product segment over the medium term."
- Projecting 30% overall growth for calendar H1 2011
- Mobotix notes minimal new products: "The Company’s product lines have not changed significantly in comparison to June 30, 2010."
The two most important drivers look to be international expansion (nearly doubling outside of Europe) and growth of dome camera sales (up by almost 2/3rds).
While these results are good, part of this is certainly the rebound in the overall video surveillance market - companies ranging from Anixter, Axis and Vicon all reported similar post recession highs in sales.
On the positive side, revenue outside of Europe, while nearly doubling, is still relatively small (not even $20 Million USD). Mobotix likely has significant room to grow in these regions. Also, development in new hemispheric offerings is quite limited. A big factor is the lack of 3rd party support. However, this plays well into Mobotix's focus on selling integrated end to end solutions.
The lack of new product developments and the expansion into a strange niche (door stations) do raise questions.
That noted, with their H2 2010 sales at 34.6 Million Euros, total revenue for their fiscal year ending June 2011 should be over $100 Million USD - a notable milestone for a megapixel only company.
Valuation and Stock Performance
Mobotix's stock price has nearly doubled in the past year - from less than 30 Euros per share to over 50 Euros currently. The current market valuation is ~ 230 Million Euros (about $300 Million USD) - about 3x revenue - an above average valuation for the security industry. However, it still is far from the stratospheric valuations on the Chinese surveillance companies like Infinova who have valuations of 20x revenue. While Infinova has less revenue and a lower growth rate than Mobotix, Infinova's market valuation is more than 300% greater than Mobotix's.