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2012 was dominated by challenging market conditions and global financial turbulence. All the same, I would like to emphasize that it was a successful year for Axis in many respects. We maintained a high release rate of new innovative products in network video while we continued our global expansion. We will continue to drive the market for network surveillance through our position as market leader and through our technological leadership.

We have strengthened our offering toward smaller installations significantly, an area that is expected to grow strongly in the coming years, and have expanded the product portfolio with solutions that contribute to greater customer benefit. I can also confirm with satisfaction that we were ranked as global number one for the first time in the broad video surveillance category in IMS Research’s yearly report. Stable organic growth and a strategic focus generated the highest sales in Axis’ history while the company’s financial position remains favourable.

Strong position in a turbulent market

The continued turbulence surrounding the Euro and Southern Europe clearly affected the EMEA region during the year, which performed weaker than the market as a whole. These concerns have also resulted in some caution with investments in other regions, where growth in video surveillance solutions was generally lower than in previous years. It is difficult to predict the trend for 2013. Underlying demand continues to be affected by the market uncertainty and financial turbulence. This meant that the expected long-term growth in network video of 20–25 percent was not achieved in 2012.

Well-received solutions and products for small systems

During the year, we released a new concept as planned – AXIS Camera Companion – produced as an ideal solution for small video surveillance systems with a small number of cameras. This part of the market is still dominated by analog cameras, but through user-friendly and cost effective solutions, the technology shift to network video is expected to gather momentum in the coming years. AXIS Camera Companion is easy to install, utilizes the capacity in our cameras and handles all video recording on SD memory cards in the camera. The cameras are also equipped with functionality for download of smart applications enabling integration with other systems and thus greater commercial benefit for the end customer. It is still too early to make reliable estimates about the number of small systems sold, but based on downloads of the software used during installation, we can happily confirm a rapidly growing interest for this solution.

Continued investments in technology development

The work on offering the market new innovative products and improved applications is continuing at a high rate. Meanwhile, continual development of our ASIC platforms is taking place, which will enable continued release of market-leading products with unique functionality in the coming years. Besides the release of entirely new products, focused on the above-mentioned market for small systems, we also introduced previously released leading edge functions during the year such as Lightfinder and Wide Dynamic Range in large parts of our broad product portfolio.

Rapid and efficient expansion in all markets

During the year, we had the pleasure of welcoming 276 new employees and today we have more than 1,400 employees worldwide. In our global expansion it is important to succeed in attracting the right employees who share our values and corporate culture. It is thus gratifying to see that our thorough recruitment process has worked exceptionally well during the year. A lot of effort is devoted to personal interviews and meetings in order to ensure competencies and long-term commitment. The rapid expansion in many ways implies a challenge for the existing organization, which has admirably ensured that the introduction of all new colleagues proceeded efficiently and that our core values are firmly established among all employees.

Continued huge growth potential

External developments are resulting in increased need for security solutions. The market is also driven by technological development and innovation. Although the growth rate is somewhat subdued at present, the growth potential for network video in the next 4–5 years is still 20–25 percent annually. This means that we are continuing to prioritize and focus on growth opportunities in network video. Meanwhile looking ahead, as an innovative company, we also aim to identify complementary offerings to strengthen our position further. By combining these ambitions with our clearly focused strategy and leading market position, we are confident about the future and have a good basis for continued positive and profitable growth.

Ray Mauritsson
President