January-March 2014mb.cision.com/Main/968/9573482/236426.pdf · About Axis Communications Axis...
Transcript of January-March 2014mb.cision.com/Main/968/9573482/236426.pdf · About Axis Communications Axis...
About Axis Communications Axis offers intelligent security solutions that enable a smarter, safer world. As the global market leader in network video, Axis is driving the industry by continually launching innovative network products based on an open platform - delivering high value to customers through a global partner network. Axis has long-term relationships with partners and provides them with knowledge and ground-breaking network products in existing and new markets. Axis has more than 1,600 dedicated employees in more than 40 countries around the world, supported by a network of over 65,000 partners across 179 countries. Founded in 1984, Axis is a Sweden-based company listed on NASDAQ OMX Stockholm under the ticker AXIS. For more information about Axis, please visit our website www.axis.com.
Sales growth during the first quarter of 2014 was 15 percent in
local currency. Due to lower than expected sales during the end
of the period, the earnings trend was weaker than anticipated.
Eastern Europe has been clearly affected by the unrest in Russia
and Ukraine. Meanwhile, overall sales were impacted by a weaker
performance than expected in the Americas region, particularly
during the second part of the quarter. At a global level, we did
not notice any significant change in inventory levels. We estimate
that the underlying short-term demand is in line with the growth
rate we saw during 2013.
Our investments for future growth have continued at a high pace.
It is thanks to these ambitious investments that we were able
to present a large number of new solutions in various product
categories during the quarter. A number of new network cameras
were released and we have introduced an upgraded version of our
software for medium-sized installations, AXIS Camera Station.
The recruitment rate continued to be high in early 2014 and the
number of employees increased by 81 people.
Axis entered 2014 with a good basis for taking advantage of the
opportunities offered by the market. We will continue to advance
our offering for access control, to release new innovative network
cameras and we have now also strengthened our offering for
medium-sized installations. These investments clearly emphasise
our ambition – to continue to develop new innovative solutions
and strengthen our market-leading position.
President’s comments
Interim reportJanuary-March 2014
Ray Mauritsson President
The first quarter > Net sales increased by 15 percent during the first quarter to SEK 1,129 M (982). Net sales increased by 15 percent in local currencies
> Operating profit decreased to SEK 72 M (89), corresponding to an operating margin of 6.4 percent (9.1).
> Profit after tax amounted to SEK 52 M (66). > Earnings per share amounted to SEK 0.75 (0.95)
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Events during the first quarter A strong product portfolioDuring the period, a number of important changes have occurred in the offering of
network cameras in the Axis P series. A number of advanced additions to the existing
AXIS P33 Series were released as well as the new AXIS P32 Series, while strategic price
reductions were made in certain volume products. The changes have meant that the
offering in this camera segment has improved due to more advanced functionality and a
more competitive price level.
In January, Axis Q60-S PTZ dome network cameras were released featuring stainless
steel casings. The cameras are equipped with functionality for image stabilization and
for handling foggy environments and are ideal for marine installations, surveillance of
oil and gas sites and the chemical industry. The Axis M1145-L and Axis M1145 cameras
were launched in February and offer a cost-efficient solution for around-the-clock indoor
surveillance. The cameras are primarily targeted to end customers in the retail segment
as well as restaurants and hotels. In March, AXIS Camera Station 4.0 was introduced, an
improved version of Axis’ software for medium-sized installations. The software has an
entirely new user interface with a clear focus on easy use. AXIS Camera Station 4.0 also
enables easier and more efficient handling of camera views, rapid replay of incidents,
improved search functionality relating to recorded material and smooth integration with
Axis’ solution for access control.
Continued high recruitment rate During the period, the number of employees increased by 81 people to 1,708 in total. The
recruitment rate is still high and the organization is continuing to expand in order to meet
the increasing future demand. The work on strengthening the global partner network through
training and certification of existing as well as new partners is continuing.
A strong American organizationIn January, a reorganization of the American operations commenced with the
aim of boosting the local presence and further strengthening our position in the
market. By dividing the US into six regions with local offices, proximity will be
strengthened to distributors and partners and also to end customers. Each region
will have its own local resources for sales, support, marketing and training within
the Axis Academy framework. Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014
650700750800850900950
1000105011001150120012501300135014001450150015501600165017001750
1265
1333
1403
1470
1521
15921627
1708
Number of employees
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Comments on the income statement and balance sheetNet salesThe first quarter
Net sales for the first quarter amounted to SEK 1,129 M (982), which was an increase of 15
percent. Growth was 15 percent in local currency. Foreign currency effects had a negative
impact on sales of SEK 3 M.
Sales in the EMEA region amounted to SEK 402 M (353) during the first quarter, corresponding
to growth of 14 percent. Growth was 12 percent in local currency. In Eastern Europe, the sales
was negatively affected by local unrest in parts of the region. Certain markets in Central and
Southern Europe also performed more weakly than expected, especially during the second
half of the period. Meanwhile, the growth rate was particularly good in the Middle East.
Sales in the Americas region amounted to SEK 591 M (513) during the first quarter,
corresponding to growth of 15 percent. Growth amounted to 16 percent in local currency.
Most of the markets in North and South America performed more weakly than expected
during the period.
Sales in the Asia region amounted to SEK 136 M (115) during the first quarter, corresponding
to growth of 18 percent. Growth was 23 percent in local currency. Sales varied sharply
within the region. The emerging markets continued to display strong growth while the
more mature markets in southern Asia displayed weak sales during the quarter.
Invoiced sales per product group (SEK M)
Q1 2014
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Video 1,121.2 979.8 1,112.8 1,318.8 1,296.6
Other 7.9 1.7 1.6 3.6 1.9
TOTAL 1,129.1 981.5 1,114.4 1,322.4 1,298.5
Invoiced sales per region (SEK M)
Q1 2014
Q1 2013
Q2 2013
Q3 2013
Q4 2013
EMEA 401.5 353.4 362.5 511.1 537.1
Americas 591.4 512.9 617.9 653.0 580.0
Asia 136.2 115.2 134.0 158.3 181.4
TOTAL 1,129.1 981.5 1,114.4 1,322.4 1,298.5
Sales
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Sales SEK M
Total growth %
Invoicing per region,Q4 2013
Americas
EMEAAsia
52 %
36 %12 %
SEK M %
Sales per region, SEK M
EMEA Americas Asia
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Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014
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EarningsThe first quarter
Operating profit during the first quarter amounted to SEK 72 M (89), which corresponded
to an operating margin of 6.4 percent (9.1). Operating profit was impacted negatively by
weak sales and a continued high rate of expansion, in combination with a negative effect
from currency translation differences. Meanwhile, gross margin continued to be stable and
amounted to 50.5 percent (51.5) in the first quarter. Profit before tax was SEK 71 M (88).
Profit after tax amounted to SEK 52 M (66). Changes in foreign exchange rates impacted
operating profit negatively by SEK 17 M, compared with the corresponding period of the
previous year.
Condensed income statement, (SEK M)
Q1 2014
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Net sales 1,129.1 981.5 1,114.4 1,322.4 1,298.5
Gross profit 569.8 505.3 568.1 696.2 660.6
Gross margin, % 50.5 51.5 51.0 52.6 50.9 Operating profit 72.1 89.3 126.5 258.4 166.0
Operating margin, % 6.4 9.1 11.4 19.5 12.8 Profit before tax 71.0 88.1 125.9 257.6 165.5
Cash flow, investments and financial positionCash flow from operating activities for the period amounted to SEK 114 M (100). Net
investments totaled SEK 31 M (32), of which capitalized development costs amounted to
SEK 12 M (13). Axis had SEK 419 M (392) in cash and cash equivalents at the end of the
period, as well as unutilized credit facilities of SEK 500 M (500). Accordingly, the company
had a total of SEK 919 M (892) at its disposal at March 31, 2014.
EquityConsolidated equity amounted to SEK 990 M (874). The total number of shares at year-end
was 69,461,250 (69,461,250). Axis has no outstanding stock option programs. The group’s
equity/assets ratio was 50.6 percent (53.5) at March 31, 2014.
(SEK M) Share capital Other contributed
capital Other
reservesRetained earnings
Total equity
Opening balance at Jan 1, 2013 0.7 279.2 -14.1 544.0 809.8Total comprehensive income for the period
- - -2.0 66.1 64.1
Closing balance at Mar 31, 2013 0.7 279.2 -16.1 610.1 873.9
Opening balance at Jan 1, 2014 0.7 279.2 -18.6 675.6 936.9Total comprehensive income for the period
- - 0.2 52.4 52.6
Closing balance at Mar 31, 2014 0.7 279.2 -18.4 728.0 989.5
Parent CompanyThe parent company’s operations are primarily focused on company-wide administration.
The parent company has no employees. During the period, sales amounted to SEK 5.1 M (5.2)
and operating profit amounted to SEK -2.6 M (-2.7). Cash and cash equivalents at the end
of the period amounted to SEK 306.9 M (0) and borrowing was SEK 0 M (0). No investments
have taken place during the period.
Operating profit / EBIT
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014
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50
75
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125
150
175
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275
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EBIT SEK M
Gross margin %EBIT margin %
SEK M %
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Outlook There is a continued steady inflow of new projects and the view on the market’s current
growth rate remains unchanged. Axis and external market research institutions estimate the
long-term global growth potential for the network video market at 20-25 percent annually.
An important factor for continued strong growth is increased penetration in installations
for smaller systems and in emerging markets. In order to meet market demand and retain
its position as the market-leading supplier of network video solutions, Axis will continue
to develop and release a large number of innovative products, refine the partner network,
recruit more employees and continue to expand globally.
OtherRisks and uncertainties Axis’ operations are subject to a further number of risks and uncertainties, which are described
in the 2013 Annual Report. No new material risks have arisen during the first quarter of 2014.
Accounting policiesThis interim report is prepared in accordance with the Swedish Annual Accounts Act and IAS 34,
Interim Financial Reporting. For information on the accounting policies applied, see the 2013
Annual Report. The accounting policies are unchanged compared with those applied in 2013.
Nomination Committee Axis’ Nomination Committee is composed of representatives from the three largest shareholders;
Christer Brandberg (Inter Indu AB), Therese Karlsson (LMK Industri AB) and Martin Gren (AB
Grenspecialisten). Christer Brandberg is chairman and convenor. Proposals and views from
shareholders concerning the composition of the board may either be submitted in writing to
the address: Axis AB, attn. Adrienne Jacobsen, Emdalavägen 14, 223 69 Lund, or by phone
+46 46 272 18 00.
Annual General MeetingAxis’ Annual General Meeting will be held on April 28, 2013 at 5 p.m. in Lund, Sweden.
The Axis share The company’s share is listed on NASDAQ OMX Stockholm in the Large Cap segment, under
the ticker AXIS. Axis’ share had a turnover of 9,330,768 shares during the period January-
March 2014, which gave an average turnover of 150,496 shares per trading day, to a value
of SEK 32,749,337. The average price of the share during the period was SEK 218.4.
Reporting dates Axis will report on the following dates during the 2014 fiscal year:
Interim report, January-June: July 9, 2014
Interim report, January-September: October 16, 2014
Lund, April 24, 2014 Ray Mauritsson President
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Review report Review report of condensed interim financial information (Interim report) prepared in
accordance with IAS 34 and Chapter 9 of the Swedish Annual Accounts Act.
IntroductionWe have reviewed this interim report for the period January 1-March 31, 2014 for Axis
AB (publ). The board of directors and the president are responsible for the preparation
and presentation of this interim financial information in accordance with IAS 34 and the
Swedish Annual Accounts Act. Our responsibility is to express an opinion on this interim
financial information, based on our review.
The focus and scope of the reviewWe conducted our review in accordance with the International Standard on Review
Engagements, ISRE 2410, Review of Interim Financial Information Performed by the
Independent Auditor of the Entity. A review of the interim report consists of making
inquiries, primarily of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review has a different focus and is substantially
less in scope than an audit conducted in accordance with International Standards on
Auditing (ISA) and other generally accepted auditing standards in Sweden. The procedures
performed in a review do not enable us to obtain a level of assurance that would make
us aware of all significant matters that might be identified in an audit. Accordingly, the
conclusion expressed based on a review does not constitute the same level of assurance
as a conclusion based on an audit.
ConclusionBased on our review, nothing has come to our attention that causes us to believe that the
Interim Report, in all material respects, is not prepared for the group in compliance with
IAS 34 and the Swedish Annual Accounts Act and for the Parent Company in compliance
with the Swedish Annual Accounts Act.
Lund, April 24, 2014PricewaterhouseCoopers AB
Ola BjärehällAuthorized Public AccountantAuditor in charge
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Consolidated comprehensive income
(Mkr)Q1
2014Q1
2013Full-year
2013Q2 13 - Q1 14
12 months
Net sales 1,129.1 981.5 4,716.8 4,864.4
Cost of goods and services sold -559.3 -476.2 -2,286.6 -2,369.7
Gross profit 569.8 505.3 2,430.2 2,494.7
Other revenues and changes in value -11.4 -15.4 -8.0 -4.0
Selling and marketing expenses -228.2 -188.7 -864.4 -903.9
Administrative expenses -57.0 -49.4 -208.9 -216.5
Research and development expenses -201.1 -162.4 -708.6 -747.3
Operating profit * 72.1 89.3 640.3 623.1
Financial expenses -1.1 -1.2 -3.1 -3.0
Profit before tax 71.0 88.1 637.2 620.1
Tax -18,6 -22.0 -158.3 -154.9
Net profit for the period 52.4 66.1 478.9 465.2
Other comprehensive incomeItems that later may be transferred to the income statement Exchange differences 0.2 -2.0 -4.5 -2.3
Other comprehensive income for the period, net after tax 0.2 -2.0 -4.5 -2.3
Total comprehensive income for the period 52.6 64.1 474.4 462.9
Total comprehensive income attributable to:
Parent Company’s shareholders 52.6 64.1 474.4 462.9
Earnings per share for the period, SEK 0.75 0.95 6.89 6.70
Number of shares, average, thousands 69,461 69,461 69,461 69,461
*Net effects of changes in exchange rates in underlying receivables and liabilities in foreign currencies have impacted operating profit negatively by SEK 12 M (negatively by SEK 15 M) during the first quarter.
Consolidated statement of cash flows
(SEK M)Q1
2014Q1
2013Full-year
2013Q2 13 - Q1 14
12 monthsCash flow from operating activities before change in working capital
83.5 102.9 567.6 548.2
Change in working capital 30.4 -2.6 -90.1 -57.1
Cash flow from operating activities 113.9 100.3 477.5 491.1
Cash flow from investing activities -31.1 -31.8 -117.0 -116.3
Cash flow from financing activities -1.3 -141.3 -487.3 -347.3
Cash flow during the period 81.5 -72.8 -126.8 27.5Cash and cash equivalents at the start of the period 337.7 464.5 464.5 391.7
Cash and cash equivalents at the end of the period 419.2 391.7 337.7 419.2
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Consolidated balance sheet (SEK M) Mar 31, 2014 Mar 31, 2013 Dec 31, 2013Non-current assets 286.3 227.9 270.5
Inventories 676.7 516.1 636.8
Trade receivables* 428.0 385.6** 592.0
Other receivables 145.6 111.5 105.9
Cash and cash equivalents 419.2 391.7 337.7
Total 1,955.8 1,632.8 1,942.9
Equity 989.5 873.9 936.9
Non-current liabilities 181.7 143.3 163.5
Trade payables 402.9 288.4 439.1
Other current liabilities 381.7 327.2** 403.4
Total 1,955.8 1,632.8 1,942.9
*This item includes receivables from contract manufacturers of SEK 92.3 M.**Since Q4 2014, Axis has applied net accounting of trade receivables in cases where Axis’ counterparty in turn has claims on Axis in the form of accrued discounts connected to purchasing from Axis. For comparability between quarters, Q1 2013 has been recalculated and the effect of the net accounting is a reduction in trade receivables and other current liabilities of SEK 97.7 M.
Key ratios Q1
2014Q1
2013Full-year
2013Net sales growth (%) 15.0 11.4 12.7
Gross margin (%) 50.5 51.5 51.1
Operating margin (%) 6.4 9.1 13.6
Profit margin (%) 6.3 9.0 13.5
Depreciation/amortization (SEK M) * 57.2 51.0 55.4
Shareholders’ equity (SEK M) 990 874 937
Capital employed (SEK M) 1,038 814 984
Interest-bearing liabilities (SEK M) - - -
Net interest-bearing liabilities/net receivables (SEK M) ** 419 392 338
Total assets (SEK M) 1,956 1,633 1,943
Return on capital employed (%) * 61.6 64.7 64.8
Return on total assets (%) * 32.0 34.2 35.2
Return on equity (%) * 50.2 53.6 56.9
Interest coverage ratio (times) * 209.9 83.3 206.5
Equity/assets ratio (%) 50.6 53.5 48.2
Share of risk-bearing capital (%) 57.4 60.0 54.2
Capital turnover ratio (times) 4.8 4.7 4.8
Number of employees (average for the period) 1,680 1,449 1,532
Sales per employee (SEK M) * 2.9 3.0 3.1
Operating profit per employee (SEK M) * 0.4 0.4 0.4 *The key figures have been recalculated to rolling 12-month values where appropriate. **Refers to net of interest-bearing receivables and liabilities.
Per-share dataMar 31, 2014 Mar 31, 2013 Dec 31, 2013
Share price at end of period, SEK 221.60 169.50 223.80
Dividend, SEK 5.50* 5.00 5.00
P/E ratio 33** 27** 32
Earnings per share, SEK 0.75 0.95 6.89
Average number of shares, thousands 69,461 69,461 69,461
Number of outstanding shares, thousands 69,461 69,461 69,461
*Proposed dividend.**P/E ratio has been recalculated to rolling 12-month value.
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Parent Company income statement (SEK M) Q1
2014Q1
2013Full-year
2013Net sales 5.1 5.2 25.9
Gross profit 5.1 5.2 25.9
Administrative expenses -7.7 -7.9 -37.4
Operating profit -2.6 -2.7 -11.5
Result from participations in group companies - - 451.6
Interest income and similar profit/loss items 0.6 1.6 1.8
Interest expenses and similar profit/loss items -1.5 -1.3 -20.5
Profit before tax -3.5 -2.4 421.4
Change in tax allocation reserve - - -31.8
Tax - - -83.7
Net profit for the period -3.5 -2.4 305.9
Parent Company balance sheet(SEK M) Mar 31, 2014 Mar 31, 2013 Dec 31, 2013Non-current assets 9.6 12.0 10.2
Receivables from group companies 564.6 904.5 749.6
Trade receivables and other receivables 1.3 3.0 2.4
Tax receivables 13.9 19.8 15.1
Cash and cash equivalents 306.9 0.0 122.5
Total 896.3 939.3 899.8
Equity 380.2 422.7 383.7
Untaxed reserves 510.4 478.6 510.4
Liabilities to group companies 0.8 0.7 0.9
Current liabilities 4.9 37.3 4.8
Total 896.3 939.3 899.8
Quarterly dataInvoiced sales per product group (SEK ‘000)
Q12014
Q42013
Q32013
Q22013
Q12013
Q42012
Q32012
Q22012
Q12012
Q42011
Q32011
Q22011
Video 1,121.2 1,296.6 1,318.8 1,112.8 979.8 1,177.5 1,065.0 1,039.1 876.6 1,046.7 965.5 740.7
Other 7.9 1.9 3.6 1.6 1.7 2.0 14.2 4.4 4.7 4.2 5.7 6.4
TOTAL 1,129.1 1,298.5 1,322.4 1,114.4 981.5 1,179.5 1,079.2 1,043.5 881.3 1,050.9 971.2 747.2
Invoiced sales per region Q12014
Q42013
Q32013
Q22013
Q12013
Q42012
Q32012
Q22012
Q12012
Q42011
Q32011
Q22011
EMEA 401.5 537.1 511.1 362.5 353.4 484.9 384.9 377.0 331.8 452.1 374.1 320.9
Americas 591.4 580.0 653.0 617.9 512.9 555.9 569.9 542.7 449.0 495.3 499.7 350.0
Asia 136.2 181.4 158.3 134.0 115.2 138.7 124.4 123.8 100.5 103.5 97.4 76.3
TOTAL 1,129.1 1,298.5 1,322.4 1,114.4 981.5 1,179.5 1,079.2 1,043.5 881.3 1,050.9 971.2 747.2
Q12014
Q42013
Q32013
Q22013
Q12013
Q42012
Q32012
Q22012
Q12012
Q42011
Q32011
Q22011
Net sales growth (%) 15.0 10.1 22.5 6.8 11.4 16.9 11.1 39.7 9.0 20.1 31.8 10.2
Gross profit (SEK M) 569.8 660.6 696.2 568.1 505.3 600.5 548.2 515.1 439.7 533.7 499.7 382.4
Gross margin (%) 50.5 50.9 52.6 51.0 51.5 50.9 50.8 49.4 49.9 50.8 51.5 51.2
Operating profit (SEK M) 72.1 166.0 258.4 126.5 89.3 206.7 168.4 121.1 79.1 191.9 224.9 90.2
Operating margin (%) 6.4 12.8 19.5 11.4 9.1 17.5 15.6 11.6 9.0 18.3 23.2 12.1
Analyst & Press Conference
Axis will hold a teleconference for the media and financial analysts today. A presentation
is available at: www.axis.com/sv/corporate/investor/financial_reports.htm
Time: Thursday, April 24. at 10.00 a.m.
Phone number: +46 8 519 993 57
The presentation will be broadcast live on:
http://financialhearings.nu/140424/axis/
For further information please contact:Johan Lundin, Manager, Investor Relations
Mail: [email protected]
Phone: +46 (0)46 - 272 18 00
This report contains future-oriented information that is based on the present expectations of Axis’
Management. Even if the Management believes that the expectations reflected in such future-
oriented information are reasonable, no assurance may be given that these expectations will
prove to be correct. Consequently, actual future outcomes may deviate significantly from what is
reflected in the future-oriented information due to changed conditions relating to the economy,
market and competition, changes in legal requirements and other political measures, fluctuations
in exchange rates and other factors.
Axis discloses the information provided herein pursuant to the Swedish Securities Markets Act and/
or the Swedish Financial Instruments Trading Act. The information was released for publication at
08.00 CET on Thursday, April 24, 2014.
Axis AB (publ)
Corporate identity no. 556241-1065
Emdalavägen 14, 223 69 Lund
Phone: +46 46 272 18 00
www.axis.com