Our Strategy

Vitec’s strategy is to focus on two markets that offer good long-term growth potential:

Broadcast

We design, manufacture and distribute premium branded products for broadcasters, film and video production companies, independent content creators and enterprises. We also provide premium services including equipment rental and technical solutions to TV production teams and film crews, and enterprise video solutions to corporates, Governments and houses of worship. 

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Photographic

We design, manufacture and distribute premium branded photographic and video equipment such as tripods, bags, filters and lights for professional and consumer photographers.

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Our strategic priorities and progress during 2016

Our focus

We leveraged our premium brands and strong market positions to improve and strengthen our traditional business. We continue to develop innovative products and services while focusing on operational efficiencies.

Our achievements in 2016

  • Sustained investment in R&D with around 4% of product revenue invested in developing new products
  • New products focused on improving our core:
         - Vinten Vantage – camera and lens agnostic compact robotic head                                                                                                                                                  - Sachtler Ace L – tripod system endorsed by Freddie Wong                                                                                                                                                                - Manfrotto BeFree Live – lightweight video head with fluid drag system

  • Continued lean manufacturing initiatives to drive productivity in our main manufacturing plants, including Kaizen Events to increase productivity in Costa Rica and significantly reduce assembly time in Italy
  • Sale of Bury St. Edmunds site to facilitate move to modern manufacturing site in 2017
  • Delivered previously announced restructuring projects to plan that realised an incremental £5.7 million of restructuring savings in 2016
  • Strong cash flow through a focus on improving working capital including delivering an £11.2 million reduction in inventory

Our focus

We invested resources into new and faster growing markets and technologies to underpin future growth, launching products in new addressable markets and to new end users which include independent content creators, filmmakers and enterprises.

Our achievements in 2016

  • Continued to develop and launch products for independent content creators including: SmallHD High Bright screen monitors and Offhollywood OMOD
  • Expanded our offering to filmmakers and independent content creators by the acquisition of Wooden Camera
  • Developed additional strategic relationships within the medical industry and grown underlying sales strongly in this industry year-on-year
  • Launched Teradek Sphere – our award winning Virtual Reality product
  • Launched Teradek Live:Air – iOS app enabling full featured live video production
  • Developed apps to enable LED lighting products to be operated remotely saving customers time and cost
  • Investment in new 4,000 square metre facility for Teradek to support growth
  • Formation of a dedicated Enterprise Video team, VitecEV, specifically to address the growing demand for high quality video by enterprises
  • Launched new products designed to support the needs of consumers developing their interests in photography such as accessories for drones, action cameras and smart phones

Our focus

Vitec has strong relationships with its customers and end users. We are enhancing our distribution channels and collaborating with key market players to form more durable and strategic relationships that are less susceptible to commoditisation. Direct e-commerce has also become an important growth driver for the Photographic Division.

Our achievements in 2016

  • Invested further in our e-commerce capabilities by developing our online platforms and launching and upgrading websites in several countries
  • Continued to build closer relationships with our customers by investing in our owned distribution resources, completing the acquisition of our former photographic distribution partner in the Netherlands, Provak, and taking over distribution for Benelux
  • Continued direct sales to consumers through a significant increase in our revenues with Amazon and other e-tailers
  • Developed a close working relationship with Apple to develop products suitable for iPhone users with five products on sale in Apple Stores worldwide
  • Grew our subscription revenue sevenfold at Teradek with its Core transmission technology
  • Worked closely with the NFL to provide major project management and technical support to upgrade communication infrastructure in stadiums in which they operate
  • Strengthened the management team supporting the Olympic Broadcasting Services with the appointment of a new managing director for Camera Corps, experienced in specialist cameras for sporting events

Our focus

Geographical expansion has been another key focus especially in APAC, which we believe is a particularly attractive medium-term growth market with good opportunities.

Our achievements in 2016

  • Grown sales in our key Asia-Pacific market by £12.8 million during 2016 to £68.7 million including particularly strong growth in the Japanese market
  • Expanded our Chinese direct distribution model that we implemented in 2015 as we continue to grow sales of our photographic products into this market
  • Launched initiatives to coordinate our support functions across the Group to drive growth in the APAC region including sharing HR, finance and other back-office resources

Our focus

We continue to supplement organic growth with carefully targeted acquisitions. We have a strong track record in making and integrating acquisitions and we will continue to look for opportunities that meet our criteria for financial returns and strategic fit. Our people are our most important asset and we aim to recruit suitable talent to support the business.

Our achievements in 2016

  • Completed three acquisitions in 2016: Provak, Offhollywood, and Wooden Camera in line with our strategy. Acquisitions made in the last five years have achieved a 20% return on investment
  • Appointed Martin Green as an Executive Director with Board responsibility for Group Business Development
  • Acquired rights to Xume filter adapters, a unique patented product to facilitate easy use of filters by photographers
  • Expanded our product development teams especially in terms of software capability with the addition of 24 new engineers at Teradek
  • Continued to promote high potential employees both within and across Divisions as part of our succession planning for key senior employees
  • Made 83 long-term service awards in our Production Equipment business
  • Appointed five senior executives to the Operations Executive team to support the Group’s growth strategy
  • Implemented cross-divisional project teams to leverage synergies and enhance employees’ career options
  • Continued to encourage diversity within our business across all the countries we operate in

Key Performance Indicators

The Board and Operations Executive monitor a number of key performance indicators (KPIs), to measure our performance over time. Targets for most KPIs are set annually during our budgetary process and include our strategic priorities:

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Principal Risks and Uncertainties

Vitec is exposed to a number of risk factors which may affect its performance. The Group has a well-established framework for reviewing and assessing these risks on a regular basis, and has put in place appropriate processes and procedures to mitigate against them. However, no system of control or mitigation can completely eliminate all risks. The Board has determined that the following are the principal risks facing the Group...

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Our Business Model

Vitec designs, manufactures and distributes high quality, high performance, premium branded products and services in the growing “image capture and sharing” market. Our business model is focused on achieving five main strategic objectives.

At the Group level

We create value by:

Strategy
The Board and Operations Executive set Group and Divisional strategy, focusing on markets served, customer segments and products supplied.

Budgeting and monitoring
Vitec sets Group and Divisional budgets annually and regularly reviews Group and Divisional performance during the year. This includes regular forecasts to ensure that the financial performance is clearly understood and appropriate targets are set.

Investor relations
We communicate our strategy, performance, outlook and governance with our investors on a regular basis.

Treasury and tax
Vitec manages its financing, hedging and tax planning activities centrally to ensure that the Group has an appropriate structure and funding to support its geographically diverse business. 

Acquisitions and disposals
We buy businesses that provide a good return with clear synergies such as extending our technological, product or geographic footprint. We dispose of those businesses that do not fit strategically or do not offer scope to deliver attractive returns.       

Governance
Vitec ensures that an effective Group wide governance framework and policies are in place to ensure a strong culture of governance and ethical behaviour.

Risk management
We set an overall framework for reviewing and assessing risk and taking mitigating actions as part of the execution of our strategy.

Health and safety
Vitec sets policies to ensure a healthy, safe and productive work environment for all our employees, and ensures they are complied with.

Talent management
We work across the Group to ensure that we have consistent policies, processes and initiatives for acquiring, engaging and retaining our best talent.

At the Divisional level

We create value by:

Understanding customer needs
Our businesses continually obtain feedback on market trends, competitors and their products from customers as well as from research. As our businesses are market leaders, this enables us to remain close to our customers, anticipating and responding to developments to ensure that our brands remain at the forefront of the industry, renowned for their premium offerings.

Focused new product development and market leading brands
Our experienced, specialist engineers apply new technologies, products and materials to develop high quality high performance solutions. Our innovative products and services are protected by patents and trademarks and marketed under our world renowned brands. We produce the majority of our products in-house and work with selected, market leading partners for specialist solutions. We supplement in-house developments with carefully selected acquisitions in new markets and technologies.

Efficient supply chain
We procure materials from reputable suppliers and produce our products in efficient and environmentally friendly operations and, where appropriate, in lower cost countries such as Costa Rica and China. The majority of our operations are relatively low-volume, small-batch processes and our continuous improvement culture enables us to drive productivity in our core businesses.

Global distribution
We market our products and services through our own sales and marketing teams. The majority of our sales are conducted via a global network of distributors, dealers and retailers who sell on to customers. We are expanding our e-commerce capabilities through working closely with our customers to develop our online presence and have a particular focus on expanding in APAC. The breadth of products and our strong brand heritage means that our network of channel partners is unrivalled in the markets we serve. We also engage with a number of leading logistics partners to ensure responsive and timely delivery of our products to the relevant geography.

We engage our employees through clear values

We create value by:

Product excellence
Everything we make and do is exceptional

Vitec products and services are exceptional because they are delivered by outstanding people. We set the highest standards of technical performance and aftercare, designing solutions that do precisely what image takers need them to do. All our activities reflect our obsession with quality.

Customer focus
We are nothing without our customers

At Vitec, the focus is always on the customer, allowing us to support them no matter what changes and challenges they face. If we respect our customers’ creative expertise, they will respect ours.

Creative solutions
We are constantly looking to break new ground

At Vitec we learn fast and are always looking for new ways to support our customers and meet their needs. To stay ahead of the game, our creativity has to be applied to every aspect of our business, not just our products. Our passion, flair and ability to ask “why not?” are at the heart of everything we do.

Collaboration
We work better when we work together

The closer we are to our colleagues and customer contacts, the more successful we will be. If we celebrate achievements, share knowledge, pool resources, test ideas and support each other, life will be more rewarding and more satisfying.

Integrity
What you see is what you get

Commitment, fairness and honesty towards our customers, our suppliers and our own people. By being authentic we develop loyalty and trust between ourselves and all those we engage with.

 

* Before restructuring costs and charges associated with acquired businesses.

# Cash generated from operating activities after net capital expenditure, before restructuring costs paid.