ISRA VISION Buy EUR 26.00 - ISRA VISION AG

ISRA VISION
Addressable market has niche character with size of less than EUR 1bn: The actual
addressable market size is assumed to be between EUR 480m – EUR 640m sales per
year, based on the assumption that currently not even 20% of the potentially
addressable market is yet penetrated. However, other industry sources estimate that
only 10% of the potentially addressable market for machine vision technology is yet
penetrated, mainly because some sectors have easier tasks to perform than others and
certain industries including automotive and electronics were able to adopt automation
technologies earlier than others.
VDMA in July 2012 said it expects 5% market growth this year after 20% yoy in
2011 which varies by subsector. The VDMA, the German association for engineering
and plant engineering, expects the market for industrial machine vision systems and
components to grow by 5% yoy in 2012 in terms of revenues of suppliers located in
Germany with customers located in Germany and abroad. In 2011, revenues reached
EUR 1.5bn for the first time. After 2009 the worldwide automation trend continued even
more dynamically. Rationalisation, productivity improvements, shorter and faster cycle
times and quality demands all require automation and surface inspection.
Machine Vision turnover of German suppliers (EUR m)
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
9% CAGR (00-12E)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E
Source: VDMA, Warburg Research
Growth is supported by a low degree of automation. ISRA VISION is expanding in
both high growth areas such as Eastern Europe, Asia and South America and already
established markets including Japan. Global car manufacturers are expanding their
manufacturing capacities in China, underscored by the statements of Dürr, a supplier of
capital goods to the automotive industry, (mainly paint shops and automation solutions)
in its recent capital markets day in China.
South Korea, Thailand, and Malaysia offer further potential to increase the degree of
automation in its industrial applications, according to the VDMA. The US still has a
relatively small degree of automation in production facilities and could offer some growth
opportunities.
In first nine months of FY 11/12, the US was the fastest growing region for ISRA
VISION. Europe, however, is expected to remain the most important market, with growth
opportunities especially in Eastern countries. Even though Germany and Japan are the
highest automated countries, they have always been lucrative for ISRA VISION and are
likely to maintain their position as cash cow markets.
New VDMA figures support our growth scenario. 2011 VDMA figures (published in
2012) again illustrate that Asia is the fastest growing region for German machine vision
suppliers. In absolute terms, Asia caught up with Europe and looks set to outperform the
European market.
Americas, especially North America, made a huge step forward, according to VDMA,
with strong growth of 35% in 2011, which is also perceptible in ISRA VISION’s latest
F U L L N O T E Published 25.10.2012 14