Vectron Systems AG

Vectron Systems AG
Financials
Historical development
After the merger in 2005, Vectron regained its independency in the course of the
MBO and carried out a successful listing in March 2007. The company generates
the main proportion of its revenues from the sale of POS systems. In FY 2008,
Vectron experienced a decline in the top-line growth as well as the bottom-line as a
consequence of the ongoing economic downturn. The company generated sales of
EUR 23.6m indicating a drop of 7.2% compared to the level seen in previous fiscal
year. Moreover, the company´s operating business suffered from delays in the
launch of its new hybrid product Vectron POS MobileXL. In FY 2008, the overall
customer sentiment in its underlying business was rather gloomy as many
customers were holding back their investments.
The revenue composition by products reveals that POS systems contributed almost
73% to the total sales in FY 2008. With POS Mini, POS ColorTouch and POS
Vario, the company had three products as significant sales drivers. In the future,
mobile as well as hybrid devices are expected to contribute to a stronger extent to
Vectron´s revenues.
Revenue analysis
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Revenue composition by products
6%
21%
73%
POS Systems Software Peripherials
Source: CBS Research AG, Vectron Systems AG
Vectron still generates more than 60% of its revenues in its domestic market
Germany, even though sales in Europe have accelerated over the last years. At
current stage, Vectron puts strong strategic emphasis on evolving its European
business to a significant revenue pillar in the mid-term. As a first step, the company
aims to establish its business model in France, Spain and UK where Vectron plans
to achieve a significant business size before tapping new geographic markets.
The competitive market environment led to deflating prices which had significant
margin diluting effects in the low-end segment. The drop in prices did not have the
same far-reaching repercussions in the premium and the mid-range segment as
margins have been deteriorating to a significantly slower rate in these segments.
However, Vectron managed to avoid a margin-diluting price competition in its
business which resulted in stable profit margins in the past.
In order to introduce new product innovations and to establish a substantial
international distribution network, Vectron added significant R&D and sales
resource in FY 2008 which had distorting effects on the EBIT margin. Consequently
the company´s EBIT margin dropped to 16% in FY 2008 from 22% in the year
before.
Revenue composition by geografic markets
31%
8%
61%
Germany Europe Other
Recessive market
environment and
delays in product
introduction hit result
in FY 2008
Large proportion of
revenues are
generated from the
sale of POS Systems
Strategic emphasis on
evolving its international
business to a
main revenue pillar
Stable prices helped to
improve margins
Expansion of R&D and
sales resources
resulted in declining
EBIT margins
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