E-paper company sees strong export demand and expands into new markets
June 2012, Ascot UK - ZBD, a UK company that designs, manufactures and supplies e-paper display solutions for retailers and industrial users globally, today announces it has delivered exceptionally strong results for the last financial year (ending 31.3.12).
Highlights
Revenue grew to $19.6m (£12.6m) from $6.4m (£4.1m) in line with forecasts and continuing the 200% CAGR since commercialisation began four years ago
Exports continue to drive growth: presence in 15 retail sectors in 24 countries and at least 50% of the world’s leading retailers engaged with, or in discussion with, ZBD
Retail client numbers grew to 130 from 52 and e-paper for retail (ESL) remains primary revenue driver
Non-retail customer numbers have grown from seven to 40 across eight sectors reflecting increasing activity
Product portfolio now includes eight variants of ZBD’s LCD e-paper displays
Strong improvements in LCD manufacturing yields underpin solid gross margin
Commenting on the results, ZBD CEO, Shaun Gray stated: “We are very pleased with the results for the last year having again grown strongly based on our ability to take science, technology and high-tech manufacturing and deliver highly innovative products and solutions to customers around the world. We are encouraged by the number of clients now using our technology and demonstrating a significant and quantifiable return on investment. This is the most important measure of success.”
Retail market: continuing to drive revenue growth
The retail e-paper market (including electronic shelf labelling ‘ESL’) remains the primary contributor to revenue for ZBD. The Company now has 3 million e-paper displays across 700 installations and a presence in 15 retail sectors and 24 countries. More than 50% of the world’s leading retailers are engaged with, or in discussions with, ZBD.
Demand for ZBD’s e-paper solution continues to be driven by an increasing number of retailers looking for a solution with the ability to manage and update pricing, product and promotional information and stock status at point of purchase, dynamically.
New retail customers during the year included Coop Denmark, Coop Norway, T-Mobile Austria and Franprix in France (a division of Casino).
During the year, ZBD’s retail customers continued to see significant improvements from installing the technology with improved operating margins and a strong return on investment. This underpins more than 85% of retail revenue coming from client rollouts, with the balance coming from pilots.
The last year has seen further changes in the competitive landscape against which ZBD’s solutions and business model are increasingly well placed. All ZBD’s revenues are derived from its fully graphic bistable LCD e-paper technology, in contrast with ESL competitors whose revenues are primarily based on paper-based segment displays, a 20+ year old technology. The growth ZBD has seen in revenues, orders and margin contrasts significantly with the reverse in order levels and margins reported by its ESL competitors.
ZBD is also ideally placed to benefit from increasing customer demands on e-paper technology where use has moved well beyond simple price changes. More than 50% of all retail display changes follow a non-price related event and this is growing as the technology is increasingly used for higher levels of shopper and staff interaction.
Non-retail: growing interest and demand
Outside retail, the last year has seen e-paper being combined with other technologies to deliver paper replacement solutions in a broad range of vertical applications. ZBD now has 40 non-retail clients covering eight sectors including blue chip clients in motor manufacturing, materials movement, healthcare and aerospace.
Technology and manufacturing advances
The year has seen some companies withdraw from the e-paper market and other companies struggling to commercialise. In contrast, ZBD has been able to achieve highly acceptable volumes and manufacturing yield. ZBD has also secured manufacturing capacity to support continued rapid growth. This technology ownership has brought security of supply to ZBD’s clients and a recognition that ZBD is able to continue to innovate at both a technology and solutions level.
The flexibility and scalability of ZBD’s solution continued to be demonstrated with installations ranging from 50 displays to more than 50,000 displays at a single site utilising the same wireless based radio frequency (RF) infrastructure, unique to ZBD. The ease of large-scale installation was increased through the launch of ZBD’s new Bounce Ethernet communicator which allows for extended coverage and higher throughput of data.
Further technical developments included the start of live installations with retailers of its new bistable graphic e-paper displays for freezer environments.
Corporate development
The year saw ZBD continue to build its Board and advisory network. In April 2011, Jim Stoffel, formerly of Kodak and Xerox, was appointed to the Board of Directors. In November, Jörg Funder became the founder member of ZBD’s Advisory Board. Funder founded the Institute for International Retail and Distribution Management IIHD at the University of Worms in Germany.
Overall the company increased its headcount by 56%, from 39 to 61 employees.
ZBD’s progress was highlighted when the Company was recognised as one of Europe's most promising technology companies by Red Herring. ZBD was the only e-paper display company to be recognised in this year’s list, and was selected alongside Europe’s most innovative companies.
Financial
ZBD’s revenue for the year grew to $19.6m (£12.6m) from $6.4m (£4.1m) in line with forecasts and continuing the 200% CAGR since commercialisation began four years ago. Orders grew ahead of revenues with a particularly strong last quarter which saw 67 new orders. Exports accounted for 99% of ZBD’s revenues.
Gross margins have greatly improved and are now consistent with the retail technology sector. This has been driven by strong improvements in LCD manufacturing yields where ZBD continues to innovate.
ZBD remains well positioned financially with strong results and a supportive shareholder base and the company and its advisors continue to monitor the IPO opportunity. While the markets currently remain unpredictable, the company continues to execute successfully, build repeat clients and deliver against other metrics making it well positioned to move should market conditions allow.
