FLIR may sell Raymarine, don’t jump to conclusions

Ben Ellison

Ben Ellison

Panbo editor, publisher & chief bottlewasher from 4/2005 until 8/2018, and now excited to have Ben Stein as very able publisher, webmaster, and editing colleague. Panbo is going to the next level in 2019 and beyond.

6 Responses

  1. Ben Ellison Ben Ellison says:

    Now I’ve seen a memo that went out to Raymarine dealers yesterday. Key paragraph:

    “FLIR is evaluating the potential sale of the Raymarine business. FLIR strongly believes Raymarine is a best-in-class marine electronics business with a compelling and innovative product portfolio that will make the business an extremely attractive asset. During this time, the Raymarine organization will continue moving forward with active research and development, new product introductions, and world-class sales and service for the full Raymarine product line. There will be no disruptions in customer support, service, or customer warranty during this period.”

  2. Unfortunately the marine electronics industry has been slow to embrace open source software, hardware and open achitectures.

    The commerical aspects of the marine electronics industry are still stuck in the 1990s

    Personal experience with B&G products has seen bricked AIS updates, Zeus products based on old linux variants and huge variability in individual sensor performance and behaviour. All very amateurish and so 1990s.

    I’m sure our next major nav system update in a decade will be all open source and based on commodity hardware. The current industry players will either get with the program or go out of business.

    I’ve seen this in so many sectors, automotive, motorsport, cloud computing and even defence now with major combat systems moving to an open architecture model.

  3. brk brk says:

    There is no “may”, Raymarine has been actively soliciting buyers for a few months now, and it does not fit in at all with FLIR’s new strategy. The only questions is wether it will go to a PE-type buyer, or to an existing marine oriented brand.

  4. I never understood why FLIR bought Raymarine in the first place, sure there is some overlap and you can try selling FLIR cameras to boaters, but wouldn’t it have been easier to sell to the entire market? They still had to do this — work with Garmin/Navico/Furuno to make sure those were also doing FLIR integration — and this became harder, not easier, when they bought Raymarine.

    I personally think the current situation with 4 big brands and various smaller ones (Hummingbird, Sitex/Koden) all competing in the same area is not sustainable over the long run. As Ben says the market is not that big and currently nobody has a chance to really recoup the investment.

    I checked Garmin’s financial statements: 2019Q4 report https://www8.garmin.com/aboutGarmin/invRelations/reports/2019_Q4_Earnings_Call_Webcast_Slides.pdf states total company revenue $3.758B gross margin 59.5% operating margin 25.2% — marine is ~13% of that so 480M with same sort of margins in Marine as elsewhere, that is actually much better than I thought.

    Furuno 2019 FY https://www.furuno.co.jp/Portals/0/images/ir/library/annualreport/ar2019_furuno.pdf shows revenue $740M, gross profit $285M operating income $43M so if that is calculated the same for a Japanese company I get a gross margin of 285/740 = 38% and net margin of 43 / 740 = 6%. I would bet a lot of that income is from commercial, not leisure.

    For Navico I could only find data for 2018 — revenue $ 373 M.

    This makes the big four rather comparable in revenue size but not in margin. Adding up 480 + 30% of 740M + 373 = 1.075 M so 1.500M+- 20% for total market seems spot on.

    • brk brk says:

      “I never understood why FLIR bought Raymarine in the first place”

      The same reason FLIR makes almost all of their decisions – sell more thermal cores. Similarly, in their CBU, they bought Digimerge/Lorex on the hope that they could push lower-end thermal cameras into the consumer/SMB video security space (spoiler alert: it didn’t work). The Lorex stuff was divested in early 2018, even though it was moving at a good clip, it did not increase sales of thermal cores measurably enough to warrant the distraction.

      I think that FLIR is best not trying to be in the “consumer” business, they are better off focusing on military/government.

      Hopefully Raymarine finds a good home. It is a solid product with a lot of great features and benefits, it needs to be marketed properly within the maritime industry by an owner that can focus on the brand.

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