President's message

• Investor relations
• Corporate governance
  • Articles of Association
  • Annual general meeting
  • Nominating committee
  • Board of Directors
  • Committees
  • Corporate governance reports
  • Audit
  • CEO and management team
  • Remuneration policy
• Stock information
  • Shareholders
  • Dividend
  • Insiders
  • Analysts
  • Earnings estimates
• Operational and financial goals
  • Market leading strategy
  • Financial goals
  • President's message
• Financial reports
• Risk management
• Subscribe to e-news
• Sustainability
• Press releases
• Photo archive
• Glossary

Continued global expansion

We continued our rapid expansion during 2011. Our team at Axis grew by 23 percent during the year and today has a presence that covers all continents. In particular, our strong growth is being driven by the technology shift from analog video surveillance technology (CCTV) to digital network solutions. Our sales increased by a total of 33 percent in 2011 measured in local currencies.

The long-term nature of our work in research and development has contributed to our very competitive product portfolio. New products released during the past two years, combined with the continuing expansion of our sales organization has meant that we, according to our own estimates, have captured market shares in the rapidly growing network video market. The strategy which is based on the three cornerstones; innovative network video products, well-developed partner network and global presence, has continued to be implemented in an effective way.

Eventful year with high global growth

2011 was a very dramatic year in many ways including several major natural disasters, revolutionary trends in North Africa and the Middle East, a terrorist attack in Norway and financial turbulence driven by high indebtedness in several euro zone countries. Of course, some of the events have a direct connection to developments in the security market where our products are sold. We see that the need for products and solutions that contribute to a safer and more secure everyday life is increasing throughout the world, and that our customers require smart solutions that make their everyday lives easier. The natural disasters in Japan and Thailand mainly affected us on the product and component supply side. Through well-planned processes and some redesigned products, we managed to handle these shortages without any major impact on sales. Naturally, the debt crisis and the financial turmoil particularly in southern Europe also affect our market negatively. Despite this, we could report a relatively stable demand trend in these countries during the year.

Almost all of our markets displayed good growth during 2011. Emerging markets, including the BRIC economies, are continuing to grow rapidly and represent an ever increasing share of sales. Meanwhile, we can be especially happy about the strong sales trend in our largest region Americas.

Major steps forward but also challenges

In most geographical markets network video is now an established successor to analog technology in all larger installations. In installations containing more than 100 cameras, a solution based on network video technology is nearly always chosen. On the other hand, in smaller installations – less than 16 cameras – analog cameras connected to DVR (Digital Video Recorder) are the completely dominant solution. The key challenge we face is therefore to continue ensuring that our solutions are used in large installations while we actively continue penetrating the market for smaller installations through innovative products and concepts. Axis has driven the development in this market segment with the AVHS (Axis Video Hosting Solution) platform, which has mainly been sold during the past year to partners that want to offer cloud-based solutions to their end customers. These offerings are also accelerating the shift to digital surveillance in smaller installations.

Pioneering products and solutions

The network camera celebrated 15 years during 2011. Axis introduced the world’s first network camera in 1996, but it was just during the last seven years that the security industry embraced this technology in earnest, as a successor to traditional analog CCTV systems. The year before Axis’ first camera was released, Bill Gates in a speech spoke about a future with “information at your fingertips”. Today it has become a reality for all of us as we are continually connected through our smartphones and tablets. We are now also seeing that this established infrastructure and development of cloud-based services is entering the video surveillance market where Axis’ above mentioned AVHS platform is an offering in the area. Fifteen years after the introduction of the first network camera, we also see a high rate of innovation in functions that are directly camera-related, such as image quality. At Axis, for example, we have focused on development of new, pioneering technology in order to further enhance image quality. During 2011, this resulted in the release of a new generation of products featuring the market’s most light sensitive cameras equipped with Lightfinder technology, offering high image quality even in very poor and demanding light conditions.

Long-term growth potential

A long-term approach defines Axis’ operations in many ways. Our strategy is based on organic growth with a focus on our strong core values – Act as one, Always open and Think big. Another example of our long-term approach and ambition to create sustainable growth is our various sustainability initiatives. We aim to promote good sustainability practice and follow high ethical standards, reduce the environmental impact of our activities and help our partners to do the same. Progress in this area is reported in a separate Sustainability Report. The network video market still has good long-term growth potential. In ten years’ time, this market can easily be ten times larger than today. Although the near term market trend is uncertain, this long-term potential means that we can be optimistic about continuing our expansive growth strategy with a high rate of recruitment and establishment in new countries.

Ray Mauritsson
President