MATELAN Research - ISRA VISION AG

ISRA VISION In-Depth Report
EXECUTIVE SUMMARY
Economic recovery
stimulating the
European machine
vision market - German
companies excellently
positioned
Numerous drivers of
growth: + 20% expected
for 2011
Order intake secures
sound development in
2012
ISRA attractively
positioned to benefit
from regional growth
trends while being
broadly diversified
across customer
industries
Broad product range and
global reach give ISRA
an edge over most
competitors
- 3 -
Following a sharp contraction during the recession year 2009, the European
market for machine vision technology showed a strong comeback in 2010 on
the back of a recovering global economy. This economic recovery was mainly
driven by the Asian markets, in particular China. Within Europe, Germany
experienced the strongest economic growth, while most other nations were
still struggling. This puts German machine vision companies in a favourable
position as they not only have the largest home market, but also an aboveaverage
exposure to China, the strongest growth driver worldwide.
Economic growth, particularly coming from the emerging markets, increasing
automation in the US and the strength of the German economy are clear
growth drivers for the machine vision market going forward. Looking at
customer industries, we see the traditional industries showing a strong
comeback. Automotive and electrical goods showed the highest growth rates
in 2010 and are expected to continue to do so in 2011. The pharma industry
has good prospects and is rather resistant to a potential economic slowdown.
In industries such as glass and metal, the industry background looks
somewhat more heterogeneous but some machine vision companies are still
reporting good order intake from these industries. We should continue to see
discrete inspection systems as the most important application but 3D systems
and new application should increasingly become drivers of growth. In terms
of products, there is currently a trend towards less complex systems, though
vision systems will continue to dominate the market as they become
increasingly powerful at lower prices. On the back of all these growth drivers,
the EMVA assumes a market increase of 20% for the current year.
Markets are currently worried about a potential slowdown of global economic
growth in 2012. However, most indicators are so far not pointing to a
recession. Growth must be expected to slow from the 2011 level but remain
positive. As a consequence of the late cyclical nature of the machine vision
industry, we would expect the economic slowdown to show only with a time
lag. In fact, order intake remains strong and suggests that the trends
described above will continue in 2012 at slightly lower rates.
Within a rather fragmented industry, ISRA counts among the leading
companies and is one of the few global players. Though Europe is still the
most important region for the company, overseas sales already account for
half of the business. In fact, China has become the second largest location
after Germany. Moreover, ISRA is broadly diversified across most customer
industries. Originating from the automotive industry, metal, paper and glass
now also account for major parts of the company’s sales. We thus feel that
the company should benefit strongly from regional growth trends, while
being in a position to even out the different cycles of the customer industries.
Looking at the competition, only Cognex matches ISRA’s broad
diversification across the industries and its global reach. Though dealing with
much larger customers is never easy, ISRA’s ability to serve its customers
globally with a broad product range gives the company a clear edge over most
competitors. Moreover, ISRA clearly dominates markets such as glass and