Canon Q1 financial report: “we expect the market to continue to contract at a modest rate”
Canon published the full Q1 report and updated the forecast too:
Within the Imaging System Business Unit, sales volume of interchangeable-lens digital cameras decreased compared with the same period of the previous year. However the sales of such advanced-amateur-models as the EOS 6D Mark II enjoyed solid demand, and, as for compact-system cameras, the entry-level EOS M100 enjoyed strong demand, allowing Canon to maintain the top share of the market, mainly in the United States, Europe and Japan. As for digital compact cameras, although unit sales decreased compared with the same period of the previous year amid the shrinking market, sales of such high-value-added models as the high-image-quality PowerShot G-series enjoyed solid demand. For inkjet printers, demand was strong for the newly launched refillable ink tank models targeting emerging countries, which realize improved color reproduction and operability, however, overall unit sales decreased compared with the same period of the previous year. As a result, sales for the business unit decreased by 8.4% to ¥221.8 billion year on year, while operating profit totaled ¥24.7 billion, a year-on-year decrease of 15.5%.
This is their forecast for the imaging business:
As for interchangeable-lens cameras, we expect the market to continue to contract at a modest rate.
In the first quarter, although unit sales in the same period last year were at a high level, resulting from the resolution of shortages that arose following the Kumamoto earthquake in 2016, we posted 1.05 million in unit sales, limiting our decline to 3%.
Amid this business environment, we launched the EOS M100—a new mirrorless model that offers enhanced autofocus (AF) and network connectivity functions. The camera also realizes easy-to-use operability for beginners with such touch panel operations as tap-to-focus. With the proliferation of social media and the increasing number of smartphone users looking for higher image quality, we are capitalizing on ease-of-use to meet the needs of and successfully build up a base of new users.
As the market and our own sales were in line with our plan in the first quarter, we left our projection for the full year unchanged and still expect the market to decline 4% to 11 million units and our own sales to be 5.5 million units, which is in line with last year.
Following the launch of a high amateur model last year, we launched 3 new entry-class models all at once in the first quarter of this year.
This is part of our full-lineup strategy to further stimulate demand for interchangeable-lens cameras and our aim to capture demand from users looking to move up in class in the future. Under this strategy, we consider the EOS M50 to be a driver of sales. It is the first of our entry-class models to feature 4K video and it incorporate the same AF functionality found in higher end models. This camera also realizes operability that makes it easy to enjoy taking pictures even for beginners. Through these kinds of new products we will stimulate demand and effect improvement in our market share.
From a profit perspective, by raising the proportion of sales generated by new products and solidly expanding sales of high amateur models, we will improve product mix. We will also work to improve profitability by further expanding our use of automation for production and through efforts to thoroughly optimize expense management.
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As for compact cameras, we left our projection for the market and our own unit sales in place and still expect the market to shrink by 19% to 11 million units and our unit sales to decline by 16% to 3.4 million units. We will continue to focus on increasing the proportion of our premium G-series, leading to improved profitability.
via CanonWatch