President's message

The fantastic growth in network video solutions during the past ten years is gradually entering a new phase. As parts of the market mature, innovations and solutions are required that address new market segments. During the year, we saw a good performance in our offerings aimed at smaller installations and we released a new concept for medium-sized systems.

The market is still undergoing many exciting changes and there are great opportunities due to new use of network video, new customer segments and rapid technological developments. Based on our organic growth model, we will continue on the path to be a leading global player in network video.

Investments for today and for the future

In 2014, we carried out many strategic investments and releases aimed at continuing to drive the technology shift to network video in those remaining areas of the market with great potential. Meanwhile, we made investments to broaden our offering with solutions that make us even more relevant to our strong partner network. We are continuing to maintain a high release rate of new innovative network cameras for all market segments. Our product portfolio has been strengthened with network cameras of exceptional leading edge technology as well as cost-efficient products for customers, with simplicity and user-friendliness in focus. At the same time, we are continuing to broaden our offering and take a greater responsibility for the overall security solution. During the year, we released a new version of our AXIS Camera Station software and updated versions of the software for AXIS Companion and AXIS Video Hosting Solution. In medium-sized systems, we released the AXIS S10 series during the fall, consisting of an overall solution featuring cameras, software and a storage unit. Our access control offering was well received in the US market and was introduced in Europe during September when it was also supplemented with a card reader. Taken together, the continued innovation rate demonstrates the strength of our ambition to be a leading supplier of network video surveillance solutions. We continue to be driven by a desire to create new opportunities in the market and to strive for a smarter and safer world.

Continued investments in small and medium-sized installations

The network video market has been characterized by a strong growth rate for many years. A large part of this growth has come from the technology shift in large surveillance installations where the advantages of digital video surveillance have been obvious from a cost and user perspective. Network video is today the natural choice in this market segment. To continue to drive growth through the technology shift, it is important to complement our offering with simple, user-friendly and cost-efficient solutions for small and medium-sized installations. This part of the video surveillance market still has great growth potential for network video. Axis’ goal is to have an annual growth rate of 20 percent and an operating margin of more than 10 percent. This means that we must continue to invest in order to retain our leading position in network video, but we must also dare to invest in new innovations that support our core business and diversify our offering towards partners and end users.

Geographical differences

We still have a very strong position in the US market and the performance in the Americas region has been stable. During the year, we divided the US market into six sales regions with the aim of strengthening our local presence with resources for sales, support and training. In Asia, efforts are ongoing to further establish our partner network and create opportunities for continued strong growth. We are maintaining a high rate of recruitment and are performing strongly in several of the region’s key emerging markets. Axis’ operations in Europe have been impacted by weak demand in many parts of the continent. The countries in Southern Europe are still being affected by the economic turbulence in the region. In Eastern Europe, the political situation in Russia and Ukraine has had a strongly negative impact on sales. Most of Axis’ sales in this region are generated in large projects, which are affected by this type of turbulence. Meanwhile, a number of countries in the Middle East are showing a very positive sales trend and the importance of this region is increasing.

Continued expansion

In 2014, the number of employees increased by 314 people. We are continuing to invest in R&D and the sales organization in order to drive product development and to boost our presence in new and existing markets. During the year, the number of countries with local Axis employees increased to 49. A high recruitment rate imposes great demands on the organization to ensure that competencies are safeguarded and that the strong corporate culture is maintained. There were more introductory programs than ever before and we are continuing the ongoing work related to cultural activities and evaluating Axis as a workplace in order to attract and retain the best employees in the industry.

Sustainability

Today, sustainability is a natural part of everything we do and we have a policy with a declared ambition to be an industry-leader in sustainability issues. During the year, we continued to work on reducing energy consumption in our products and on phasing out hazardous materials even before they are classed as harmful to the environment. In spring, we released two cameras that are manufactured exclusively using recycled material. We are also working to shift to environmentally-friendly forms of transport as far as possible and to establish regional supply chains. We have also intensified the number of training programs and checks of suppliers and contract manufacturers in order to ensure that they meet Axis’ strict requirements relating to the environment and working conditions.

Well-prepared for the future

Axis is well-prepared to continue to drive the trend in network video. We have a clear ambition to continue generating profitable growth and to be a company that is based on a willingness to continually advance our offerings and seek new complementary solutions. To succeed with this, we will continue to invest in innovation and dedicated employees, boost our presence in emerging markets and also work to improve organizational efficiency in line with our expansion. I would like to take this opportunity to thank Axis’ customers, employees and shareholders for your continued support, commitment and confidence during the past year.

Ray Mauritsson
President

"Still great opportunities"