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leica red figures

markowich

New member
i just posted this in the leica forum:

here is a press release on leica's finances, published by the online service of the austrian tv company:

http://futurezone.orf.at/stories/1632850/

if you buy the S2+lenses now then nobody might be there to provide service after two year's time because leica may have gone under. i've seen financially more sound companies go that route.
well, i have a big investment in the m system and hope....
peter
 

carstenw

Active member
Considering how late in the year the M9 became available (it still isn't shipping in great numbers), and how much R&D went into the S2 and X1, not to mention the M9, and adding to this the cost of the start of production without much of the resulting income yet, I don't see how it could be any other way. I think that 2009 was building up to a peak, whose release we will see in 2010. If the numbers look like this at the end of 2010, I will be worried. As it is, the above report changes nothing.
 

gogopix

Subscriber
actually looks pretty good-turnover (revenue) up 14% and M9 S2 not in the pipeline yet. And the costs for those two ARE in (except for capital items)
EBIT seems fine under the circumsatnces.
If they expense R&D even partially, then they will have a good '10 and 11 as long as S2 sales fill the inital pipeline commitments (sensors I guess.

Maybe our resident financial ex pert (PerterA) can comment? Selling Leica long or short?:rolleyes:

Victor
 

ptomsu

Workshop Member
I think this is kind of normal till now.

What I do not understand is the way Leica treats the high demand for M9s and the S System. They could sell like hell, would they only start production!

Man, after so many months knowing what was coming demand wise - the big bang was back on 09/09/09, this is almost 3 months now, any other company would have ramped up their production lines an fire on all fronts :D

This seems to be a typical Leica issue here, not much change from the past decades unfortunately.

Hope they can live up to the great things they did technology and development wise with the final production.

At least the S system is out of my scope for the moment, as I am now a happy Hasselblad user :cool:
 

markowich

New member
Considering how late in the year the M9 became available (it still isn't shipping in great numbers), and how much R&D went into the S2 and X1, not to mention the M9, and adding to this the cost of the start of production without much of the resulting income yet, I don't see how it could be any other way. I think that 2009 was building up to a peak, whose release we will see in 2010. If the numbers look like this at the end of 2010, I will be worried. As it is, the above report changes nothing.
i am certainly not a finacial analyst, but it is noted that the increase in sales volume is in the PS sector (digilux, i suppose). and also, it seems that the leica factory operates on 'kurzarbeit' (reduced working hours identical to unpaid leave) when they should do double shifts.
peter
 

robmac

Well-known member
Well, I AM a former analyst and spent my formative years in financial/strategic planning and M&A in a VERY high-tech manufacturing sector prior to the lure of 'the Street', and lets just say.... well, um.... Ah forget it, it's not worth the inevitable p----ing contests. This whole Leica vs ___ is just tiresome and predictable. It's just a bloody camera company.

Lets just that say if I were in the market for an S2 (or any MFDB), I'd think LONG & HARD about company-specific and 'orphan product' risk as well as the risk of stagnant product line growth before opening my cheque book.

In the case of the S2, the company financials are public, their product (line) assertions are public record (give them what weight you will), the firm's history with new product intros, orphan products and as a player in the camera markets are well known, prices and likely ranges are well known, the camera and lens specifics are there (or pending). Whenever the eventual release takes place, all the required information is/will be on the table when it comes time to sign.

So, if you consider all the above and decide to go ahead.... well one of the problems of truly considering ALL the risks inherent in a course of action and proceeding fwd is that you're left with no one to blame but yourself afterwards if it s----'s the pooch.

As an adult, making a (truly) fully informed decision (or NOT making one when all the data was readily available) leaves you with no moral high-ground for righteous indignation afterwards if things go south (however you define that) ;<
 
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Paratom

Well-known member
They should just forget the S2 system and concentrate on producing and selling M9s and X1 and make money.
My feeling that the S2 project is going nowhere. I am sure it appeals to some people (it does to me too) but how many potential customers for the S2 are out there?
They have a good product with high demand and cant deliver. Sad.
 

David K

Workshop Member
robmac, as the owner of a DMR with an extensive collection of R lenses I really hate the words "orphan product" :) Despite being dated it really does deliver superb images and Leica does continue to provide service for it.
 

ptomsu

Workshop Member
They should just forget the S2 system and concentrate on producing and selling M9s and X1 and make money.
My feeling that the S2 project is going nowhere. I am sure it appeals to some people (it does to me too) but how many potential customers for the S2 are out there?
They have a good product with high demand and cant deliver. Sad.
There are some more considerations in all this:

1) It was important that they developed something digital from the scratch, in order to get the experience themselves in this area, which a successful camera company needs today - PERIOD. So this was very long overdue and finally they got there. But if the S2 was the right way to start see below ....

2) It is highly questionable if the S system format and all the glass and cameras following that line were/are the right thing to do. Just to invent something new in order to kind of have not to fight in other camps (35mm DSLR and MFDBs) is obviously not the best thing to do, because sitting somewhere in the middle they get pressure now from both sides. Maybe designing and building a true MF system and starting with the 60MP Dalsa sensor would have been the better solution and showing how compact and advanced they could have built this counterpart to existing systems.

3) It is not always (actually very seldom or never) successful to invent new standards and formats. Think back about the 110 and APSC film formats, they actually never made it to a huge success. And lately 4/3, although the micro FT seems to become a real killer concept, but this is mainly because of the compactness in combination with a reasonably large sensor and the large volumes they can build on based of the standard FT format.

4) They should have concentrated more on building the M9 and also on higher volume manufacturing of this camera and develop their flaghip model system (S) more in the background. No need to actually hurry up in the MF arena, as they could easily now surprise with a 60MP S camera and lenses. And money would come from a mature and FF M system.

5) They were on the 4/3 train and stopped there. In my opinion they should have never jumped on this train like that but as they were already on they should have continued with the Micro 4/3 path, as this one is becoming a great success as we all can see. And frankly, having such a M-FT camera from Leica (I mean a really Leica built and developed camera) instead of their X1 would have been highly accepted by the market and generate another cash flow for them - good for pumping parts of this money into their flagship products.

But this way around - announcing the S System so long ahead of market introduction and finally delay the product till the camera is almost outdated from the sensor capabilities when it arrives on the dealer shelfs is for sure not the optimal way.

My 2c.
 

georgl

New member
These short-sighted financial reports are pretty useless. Want a good one which makes the shareholders happy? Cut all investments, sell know-how, patents, machines and you have a great result... But investing into new products which might make a succesful market-position possible in 3, 5 or 10 years? Forget it...
Luckily, Leica now longer depends on shareholders (or not many)...

Leica reduced production capacity and personal over the last decades, most of these skilled workers found a new job in the optical/fine-mechanical-industry of Wetzlar/Hessen. Demand for the M9 goes through the roof, but these craftsmen won't come back so quickly, educating new personal takes years. You can see these offerings on their career-site (Feinoptiker, Elektroniker, Industriemechaniker).

By the way, I think Phase One and Canon are currently the only companies in the market (digital camera solutions for >>500$) which don't make losses - so you don't want to buy a Panasonic, Nikon, Sony... either?
 
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Christopher

Active member
Well it is only partly true that leica is planing just for the future. The m9 is the best example, the camera was released to make money, QUICK money nothing else. After M8 sales dropped and Leica sales dropped and dropped, they suddenly realized that with just a S2, the whole ship would go under pretty quickly. So they put together a new M camera to get some money back in.
 

markowich

New member
These short-sighted financial reports are pretty useless. Want a good one which makes the shareholders happy? Cut all investments, sell know-how, patents, machines and you have a great result... But investing into new products which might make a succesful market-position possible in 3, 5 or 10 years? Forget it...
Luckily, Leica now longer depends on shareholders (or not many)...

Leica reduced production capacity and personal over the last decades, most of these skilled workers found a new job in the optical/fine-mechanical-industry of Wetzlar/Hessen. Demand for the M9 goes through the roof, but these craftsmen won't come back so quickly, educating new personal takes years. You can see these offerings on their career-site (Feinoptiker, Elektroniker, Industriemechaniker).

By the way, I think Phase One and Canon are currently the only companies in the market (digital camera solutions for >>500$) which don't make losses - so you don't want to buy a Panasonic, Nikon, Sony... either?
i thought nikon is way in the blacks. but of course it depends whether you only count nikon photography division or also microscopes, steppers etc.
well, leica's financial base (essentially mr kauffmann) is of course much more limited and -even with the m9 success- they are at a serious risk. the S2 is not going to help them.
peter
 

georgl

New member
M9-development was started in April 2008 when Kodak claimed that a full-frame CCD for the M-system is possible - way before the S2 was introduced. A full-frame-digital-M was always their goal.

We know very little about Mr. Kaufmanns influence within the family-company which has in fact immense economic power, especially since Leica is an unusual investment. Speculating about these things without further facts is propably just harmful - we should be happy that he seems to be willing to invest against all odds and protect them for other short-sighted investors.
It will take Leica at least a decade to become a solid company again as it was before the Leitz-family sold it in the late 60s. We have to learn again to think in long terms: it's not about the S2, it's about the investment into a new market. It's not about this year or next year, it's about the long-term perspective.
They have three new cameras/systems - all in a unique market position, Many competitors went bankrupt or "crazy". I think they haven't got this opportunity since the introduction of the M3. It depends on their future decisions - what will they do with the money earned and know-how generated with M9/S2/X1?
 

Christopher

Active member
Well I still think the whole S system was a waste. (Just out of a business standpoint) If they just would have put some money and effort into the M9 which went into the S2, they could have created a killer camera. I'm not saying I don't like the M9, but it also is still far from perfect or the best possible.

They just tried to create a M9 with a FF sensor as cheap and fast as possible.
 

markowich

New member
Well I still think the whole S system was a waste. (Just out of a business standpoint) If they just would have put some money and effort into the M9 which went into the S2, they could have created a killer camera. I'm not saying I don't like the M9, but it also is still far from perfect or the best possible.

They just tried to create a M9 with a FF sensor as cheap and fast as possible.
+1
peter
 

carstenw

Active member
They just tried to create a M9 with a FF sensor as cheap and fast as possible.
Do you have some evidence of this, or is it just your deduction based on what you can observe?

I think that Leica did a credible job on the M9, and they managed to solve all the big problems with the M8. I don't think the M9 is perfect, and for now, I will hang on to my M8 and wait and see, but I might well get an M9 at some point.
 
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