Photographic Division

Overview

The Photographic division, based in Italy, designs, manufactures and distributes premium products principally for the professional photographer and keen amateur or ‘pro-sumer’. These include imaging products such as camera tripods and monopods, lighting stands and camera bags, as well as lighting structures for studios and outside events, which are all ‘in-house’ brands. Additional products distributed on behalf of third party manufacturers include flash units, light meters and filters. Most products reach the end customer through local retailers.

Strategy

Originally a manufacturer of professional lighting stands, the Manfrotto business diversified into camera supports, also for the professional. The professional market is relatively static, but as the pro-sumer market is booming with the rapid uptake of digital photography, we have been targeting the latter sector with new products. The expansion of Bogen Imaging, the division’s distribution arm, will allow much closer contact with the end customer and the local retailers. The market for outdoor lighting and rigging structures has also been growing and we are addressing this by focusing on innovation and the supply of equipment to key projects. To aid the development of this strategy the division has been reorganised around the Imaging Accessories, Distribution and Lighting Structures areas.

2005 performance

Sales in the division were up by almost 11% to £76.2 million (2004: £68.7 million), with operating profit before significant items* up almost 10% to £13.6 million (2004: £12.4 million). Operating margin was down slightly due to the lower dollar/euro exchange rates post-hedging and to some changes in mix, principally greater sales of Litec product outside Italy, where lower margins are realised.

Whilst all parts of the division showed sales growth, a significant step in implementing the strategy was the acquisition of Kata, a leading supplier of professional bags and protective equipment. Kata continues to grow strongly, recently relocating to new premises, and is implementing the division-wide ERP system that will link it to our own distribution companies.

Towards the end of 2005 we finished the development of the new ‘Modo’ product. Continuing Manfrotto’s tradition of ground-breaking innovation, it combines a still and video camera head on a tripod aimed at the pro-sumer. It is being manufactured in China.

During the year the operations of Gitzo France were centralised in Italy, improving operational effectiveness and reducing costs. A project to rationalise two further Italian sites commenced that will see some further products outsourced to China.

Bogen Imaging continued to grow strongly, selling both in-house and third party brands. It benefited from the strength of the US economy, as well as from the strong performance of Bogen Imaging GmbH, acquired in 2003.

Litec and IFF were combined to form the Lighting Structures unit, which is now based in Litec’s new facility near Venice, having outgrown the previous site. Litec completed the implementation of the divisional ERP system and continued to see strong growth throughout western Europe. Litec’s products continued to gain widespread recognition for their design and ease of use.

*Before significant items. Significant items are profit on sale of property of £0.3 million (2004: £nil), amortisation of intangible assets of £0.2 million (2004: £nil) and restructuring costs of £nil (2004: £0.1 million reversal of provision)

TV Technology Mario Award 2005 for Manfrotto’s Fig Rig

Pick Hit Award 2005 for Manfrotto’s Fig Rig

4EverGroup’s Event Video Product Innovation Award for Kata’s HB 207 Hiker Backpack

EventDV Readers’ Choice Award 2005 for Manfrotto’s MagFiber and Digi tripods