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Talking with Christof Zollitsch, CEO of newly floated STEMMER IMAGING

  • By Jason Stockwell

It’s just over three months since Christof Zollitsch steered STEMMER IMAGING through what by all accounts is one of the most challenging processes that a company management team can undertake, an IPO. So MVPro Magazine’s editor Neil Martin thought it a good opportunity to have a chat with the CEO, to see how he’s taking it all

An initial public offering (or, flotation as its better known by many), is a process by which a company and its management are laid bare. When a company decides to go public, it offers itself up to a level of scrutiny from external advisers that would make some blush. And for the senior management team – usually Chairman, CEO and Finance Director – it means a lot of work and extra worry.

Whether a company takes the step into the limelight is of course dependent on the main shareholders and what they are looking for from a public quote, for example a chance to cash-in (after a purchase, or years of investment), or a route to the increased funds that a stock market profile can deliver.

I started by asking Christof to describe the benefits of a public listing.

“STEMMER IMAGING has grown very successfully in recent years. We are convinced that as a listed company we can push further ahead with our growth strategy as going public accesses an additional source of funds that can be used to fund investments or acquisitions.

“Another advantage is an increased public awareness, which may lead to new opportunities and new customers. Our market visibility, that was already high before, has been significantly enlarged among suppliers or existing and new clients recently.”

Raising the profile of a company is a fundamental reason for going public, as Christof was happy to expand on:

“Going public is a significant stage in the expansion of our business, as it provides us with access to the public capital market and therefore opens up new markets and possibilities for STEMMER IMAGING that were not possible before.

“The main difference in our daily business is that the company is now subject to a large number of disclosure requirements. We see this as an advantage as we have become even more transparent for customers or suppliers.”

So the time was right for the IPO and STEMMER IMAGING’s history is marked by a strong founder, Wilhelm Stemmer, who probably decided last June that for him, a trade sale was a better option that taking the company public himself, even though his ambitious management team might be anxious to take the step. With new owners, the route was open for an IPO.

This was made clear when I asked Christof having been through the process, would he have done anything differently in hindsight?

“Some might say that we should have taken the step earlier. However, the great success of the IPO is largely due to our shareholder PRIMEPULSE, who only last summer became the main shareholder of STEMMER IMAGING. They helped us to become really IPO-ready with their experience and contacts.”

As they say in the entertainment industry, timing is everything, and who knows whether the odd six to 12 months makes that much of a difference to company’s standing for its introduction to a stock market. IPO timing is more often dictated by external issues, such as the global economy, or geo-political considerations.

I then asked Christof about how he coped with the IPO process?

“Directing an IPO is one of the most challenging and rewarding tasks to undertake. We created a comprehensive IPO plan that balanced our short-term objectives with its long-term goals and that allowed for the coming onslaught of real-time reporting required of a public company.”

“Organizing this process is very time-consuming. For example, at one point I had to visit four countries within 24 hours. Essential is a well functioning team in the background consisting of colleagues, the bank and the main shareholders who gave us the best support. The successful IPO shows that we have done everything right.

”What interested me as well though, was whether the prospective shareholders he was meeting during the IPO were up-to-speed with the potential of the machine vision sector.

“As the global machine vision industry continues to expand, many investors were very well-informed. I guess at least half of our potential investors did. Others focus more on figures such as future profitability. The successful IPO shows that STEMMER IMAGING is convincing in all aspects.”

It’s always good news for an industry when those sitting in the investment space are aware of the opportunities.

I then asked, looking ten years out, how did you see machine vision developing.

“Machine vision is the key enabler for Industry 4.0. This means digital transformation is not possible without machine vision. Due to the high demands on sensory systems, machine vision represents a great opportunity for the industry to establish itself further in production as a key technology. For example, in the future machine vision will be used increasingly in non-industrial applications.

With his float in the bag, and the positive reaction of investors, did he think that many other companies in the sector will choose to float?

“The fact that we were the first machine vision company to go public in years shows the general restraint of the market. For STEMMER IMAGING I can say, that as a solid, promising and fast-growing company it was the right decision to go public and that this can only be of benefit to investors.”

Christof makes a fair point and one which possibly reflects how the sector is starting only now to realise its own potential and how important it is becoming. Whether that leads to more IPOs, or more consolidation as smaller companies realise their value from a trade sale, remains to be seen.

And talking about acquisitions, how was that playing out for STEMMER-IMAGING? I reminded him that in the company’s IPO statements, they talked of non-organic growth. I asked if he thought that acquisitions will drive future growth, as opposed to organic growth?

“In the coming years, we intend to further drive and accelerate our growth through focused expansion and to systematically improve profitability through concept and product innovations. This means organic and anorganic growth will take place simultaneously.”

A careful answer but expect to see the cheque book being taken out at regular intervals over the coming years. The challenge for Christof and his team is not to pay top dollar for deals that must be earnings enhancing. Investors expect their public companies to grow, so the pressure will be on to ratchet up the deal flow and report some decent non-organic, as well as organic growth.

I was also intrigued by the mention of Asia within the IPO material. They mentioned Asia as being an area for the company’s expansion, so I asked, how far are they with that strategy?

“The proceeds generated by the listing will be used primarily to help expand our position in Europe, although expansion into Asia is interesting. We have just completed a very successful “Vision China” trade fair in Shanghai, where we were able to make good contacts.”

I take that as Asia is going to play a key part in the company’s development.

I finished the interview with a slightly unfair question. How often does Christof check his share price?

“My team are constantly checking our performance and keep me updated on a regular basis. So there is no need for me to check personally all the time. This means I can focus on our core business machine vision industry and on producing gains for our shareholders.”

Well said Christof, even though I don’t entirely believe him. In my experience, a CEO knows minute-by-minute just what his share price is doing, whether his team is telling him, or not. Rightly, or wrongly, it’s what keeps him attuned to what his investors might be thinking and keeping them happy is a large part of his new role.

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