While the recession has increased budget offerings and driven prices down, a number of companies still managed to grow their profits. We find out more about their growth factors and differentiators for success.
Staying profitable was no easy task in the dire financial climate. Yet a number of companies were able to increase their profit in 2009. We take a look at the Top 10 Companies for Profit Growth to see how they managed to boost profits in lean times.
Most companies scaled back their profit growth projections due to the financial slowdown. While no Security 50 manufacturer lowered their profit goals, the average profit loss was 4.2 percent in 2009.
Eight of the Top 10 profit growers were in video surveillance, including network video providers Mobotix, IndigoVision, Milestone Systems and Axis Communications. Asia had a strong showing, with Dahua Technology, Hikvision Digital Technology, Hi Sharp Electronics and C-Pro Electronics boosting profit margins. The remaining two companies were biometric providers L-1 Identity Systems and RCG, with all 10 companies posting double-digit profit growth.
IndigoVision increased its profits by 29.8 percent, with a gross margin of 64.1 percent. “Gross margins were lower than last year, reflecting a change in sales mix and greater volumes, but the contribution from gross margin grew 30 percent to a record US$26.1 million,” the company said in a prepared statement. Its lower margins were partly due to increased operating costs, which were 24 percent higher at $21 million.
For L-1 Identity Solutions, its gross margin fell slightly to 29.4 percent in 2009, from 30 percent. “The decrease was due to changes in the revenue mix resulting from lower biometric revenues and higher revenues from secure credentialing and services,” L-1 said in a prepared statement.
Innovation
The industry is headed in two directions: solutions for vertical-specific applications and low-end products. For this year's profit growers, solutions were clearly the way forward.
Adding solutions in HD and outdoor cameras helped Axis stay profitable in 2009. It commits 13 percent of its revenue to R&D, with thermal imaging being the company's next differentiator. “New products — some 20 in 2009 — definitely contributed to our growth,” said Ray Mauritsson, President of Axis Communications. “In terms of vendor alliances, partner programs such as ONVIF also contributed to growth and profit.”
RCG's complete lineup of RFID and biometrics for access control helped solidify its margin. “RCG invests significantly in R&D every year,” said Dato' Lee Boon Han, CEO of RCG. “Our R&D team designs innovative products and solutions to meet various market demands. With our business operating for 11 years, we offer a diverse portfolio of products and services that sets RCG apart from its competitors, which is key to the company's growth and ongoing success.”
Education
Milestone previously conducted the training in-house, but found Connex could do the same much more quickly in the U.S. “We charge distributors and system integrators for these training sessions, but they get to take away and sell complimentary software licenses that are easily worth two times what they pay for,” Fullerton said. “Connex offers at least eight hands-on labs and classes per week, and with each class serving eight to 12 trainees, thousands can be certified in a year — much more cost-effectively than what we can do ourselves.”
Find More 2010 Security 50 Articles :
● Asia Weathers the Storm
● Bucking the Downward Trend: Top 10 Revenue Growers of 2009
● Security 50's Top Performers Rise Above the Fray Part Ⅱ
● Security 50's Top Performers Rise Above the Fray Part Ⅰ