Template for HA Research Notes - ISRA VISION AG

ISRA Vision
Reasons to invest in automation and robots include
• Cost reduction (wages, training, health costs, heating, lighting etc)
• Improve product quality (accuracy and repeatability of tedious tasks)
• Improve working environment quality for employees
• Increase output
• Increase flexibility in manufacturing
• Increase yield and reduce waste
• Increase safety standards
• Facilitate access to qualified labour
• Reduce working capital due to lower inventory and work in progress
• Reduce requirements for space in manufacturing
Mmoreover, machine vision systems produce quality data to maximise
yieldM
Machine vision systems generate quality data that customers are using to
maximise revenues by pricing the finished products according to their quality
level. That way, for example, a steel producer is able to identify different sheet
steel qualities which can then be sold at different price levels to maximise the
yield. For example, in automotive, lower steel quality grades can be sold to
mass producers while higher qualities are sold to German premium brands.
Mresulting in short payback periods for a new system
The payback period for a machine vision systems as part of an automised
production systems is typically below 6 months, according to the company. It is
driven by substantial cost savings on labour, increased throughput and reduced
waste, as well as quality improvements. Moreover, compared to the total costs
of a manufacturing cell or a complete production system, the costs of a machine
vision system account for typically only a fraction of total costs while the value
add in the process is significant.
Growth is supported by low market penetration levels
The market for machine vision technology is underpenetrated as only c. 15-20%
of the potential applications are using machine vision to date, according to the
company. 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. The ratio of robots-to-employees in the
automotive industry is 8x higher compared to other industries, according
to KUKA AG, highlighting the room for growth.
Moreover, certain sectors such as the footwear and clothing industries which
are using floppy materials that require sewing did not have access to
appropriate automation technology in the past and therefore shifted production
to low-cost regions.
Positive track record of generating profitable growth
ISRA Vision’s track record of generating profitable growth is excellent (15%
CAGR sales 2001-2010, always generated 2-digit EBIT margins). The company
generated 2-digit EBIT margins even during crisis years while the long-term
average EBIT margin (arithmetic mean 1998/99 – 2009/10) is 15%, while
average EBITDA margins stood at 23%.
9 Hauck & Aufhäuser Institutional Research