In this Research Note, we examine the Mobotix video surveillance business, based on their 2020/2021 Annual Report, 2022 business strategy and Memoori market analysis.

Founded in 1999, Mobotix AG is a specialist manufacturer of IP network video cameras, based in Winnweiler-Langmeil, Germany, and listed on the Frankfurt Stock Exchange. The company is a subsidiary of Konica Minolta, Inc., Tokyo, Japan, which has been a strategic investor since 2016.

Following unsatisfactory financial results announced in October 2021, the group has announced a repositioning/transformation phase, which addresses expanding sales in the American market, placing a clearer focus on certain vertical markets and transforming Mobotix from a manufacturer of hardware into a provider of solutions for complex applications through the growing use of intelligent software. The company is making structural improvements in the light of various opportunities to generate more recurring revenues in the future.

Mobotix closed the financial year, ending 30^th September 2021 with sales of €62.4 million, an 11.3% decrease compared to 2019/2020 and an EBIT margin of 0.4% versus 8.8% in the prior year. The Annual Report concluded:

We are not satisfied with either of these figures. Our business suffered from various, in some cases repeated, lockdowns, especially in Asia-Pacific region (APAC) and notably in the project business, e.g., with hotels or shopping malls.

The targeted revenue of the Mobotix Group for fiscal year 2021/22 is in the range of €68 million to €72 million. EBIT for fiscal year 2021/22 is in the range of €1.0 million to €2.0 million due to planned investments in growth.

On 7^th March 2022, Mobotix announced an updated mid-term strategy including corporate planning for the next three years after the pandemic and to reflect the new market conditions. This plan outlines a revenue target of a minimum €90 million by fiscal year 2023/24 and an EBIT margin of around 9% which corresponds to an annual average revenue growth rate of 11%. 

The growth drivers of the 3-year plan are based on a solution approach for 6 vertical markets to be addressed by a new high-performance camera platform with corresponding analytical software applications based on artificial intelligence, including cloud-based software applications.

A milestone in terms of expanding recurring revenues in the past financial year has been the introduction of the new open video management platform, Mobotix Hub, developed in partnership with Milestone. This platform supports all ONVIF-enabled Mobotix video systems as well as over 10,000 cameras and devices from other manufacturers.

Mobotix expects long-term growth for video systems in the following vertical markets: public sector and administration; industrial and resources including oil/gas extraction, utilities and energy; manufacturing; educational institutions; retail and healthcare. The sales focus is based on developing the Mobotix value proposition in selected vertical markets to end-users in co-operation with existing and new partners in US markets as well as in EMEA, DACH and APAC. It also includes additional development of Konica Minolta’s global market presence.

The product strategy includes expansion of the complementary product line Mobotix Move and a high-end expansion of the existing 7-series camera platform as well as contract developments in the hardware and software area for the majority shareholder Konica Minolta within the framework of the new IoT sensor platform FORXAI.

M&A activities may be considered as further drivers of this strategy following a recent strategic acquisition in January 2022.  Vaxtor Technologies in Spain, an AI-based video analytics provider, specializes in Optical Character Recognition (OCR) and Deep Learning technologies. Vaxtor’s OCR analytics technology, and in particular their Automatic License Plate Recognition (ALPR) products, provide a wide range of solutions for numerous vertical market segments, which is both a facilitator and accelerator for Mobotix’s vertical market strategy. 

According to our latest Security Report, the global video surveillance market has bounced back strongly, rising 14.5% year-on-year outperforming 2019 sales and hitting a projected $21.65 billion for 2021. Moving forward, we expect growth from 2021 to 2026 to moderate back to a still healthy CAGR of 7.8%, with total sales expected to rise to $31.5 billion in 2026. 

We expect overall growth to be driven in a large part by increased investments in AI-powered video analytics, although Mobotix has come late to the software market and will face fierce competition from leaders in the field. 

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.