Fujifilm Financial Report Q1 FY2018 - A Firm Start to the Year

H1 FY2017 Headlines (Apr 1, 2016 to Sep 30,2016)

  • Overall company Revenue up +4.7%
  • Overall company Operating Income up +21.5%
  • Imaging Solutions segment Revenue up +9.2%
  • Imaging Solutions segment Operating Income up 225%

Overall Business Results

This has been a pretty good start to the financial year for Fujifilm. Revenue is up strongly in Imaging and Information with just Document segment in a small decline. Operating-income has risen in Imaging and Information with just the Document segment in decline. So a firm base for the rest of the year.

Consolidated Revenue across all business segments was up +4.7% from the same period the previous year to ¥571.5B. Operating Income was up by +21.5% to ¥35.8B.

How the sales and profits are made.

  • Imaging Solutions - IMG
  • Information Solutions - INF
  • Document Solutions - DOC

Imaging Solutions Segment Results

Specifically concentrating on the Imaging Solutions segment of the business and isolating the Digital Camera part of the business that is the main concern here. The overall segment accounted for just 14.9% of Revenues but 35.2% of Operating Income. This segment covers film, printing instant photo system as well as digital cameras and optics.

Revenues in the Imaging Solutions segment were up +9.2% to ¥85.0B for Q1 FY2018 year-on-year. Operating profit rose by +225% to ¥12.6B.

The Imaging Solutions segment breaks down into Photo Imaging, Electronic Imaging & Optical Devices. Digital cameras and lenses come under the Electronic Imaging & Optical Devices section that is responsible for 36.7% of Imaging Solutions Revenues and 5.5% of Total Revenue. Operating Income is only declared for the whole segment.

Fujifilm has concentrated their digital camera efforts into high-end Mirrorless cameras such as X-T2 and the recently launched medium format GFX 50S. The X-T2 has been well received and has been a best seller in the last few months. However, the lower end compact market has suffered from falling sales in a shrinking market.

No further breakdown of the Imaging Solutions is given for either geographic area or camera type.

R & D

Research and development expenses within the Imaging segment have decreased from ¥2.2B to ¥1.6B in this first quarter year-on-year. This may indicate a lack of new products in development, but not necessarily.

Exchange Rates

The effect of the fluctuation in the exchange rate has not been as pronounced this year as last year. The forecast is for a modest appreciation of the ¥en over the rest of this financial year. Should not affect things too much.

Forecast

The forecast for the whole business for the whole FY2018 is for Revenue to increase by +5.9% to ¥2460B and Operating income to increase by +7.4% to ¥185.0B. These are unchanged from the previous forecast in June 2017.

In regard to the Imaging Solution Business, the forecast for Revenue for the full year is up +2.4% year-on-year to ¥350B. Operating-income is forecast to rise +16.7% to ¥43B.

Market Share

It would be good to have bit more information in the published results about Digital camera unit sold including the split between Mirrorless and Compact cameras. However, no specific numbers are given about digital camera units sold but from the figures produced by other brands, it should be between 5% and 10% by units.

Conclusions

These are solid results across the board and puts Fujifilm on a firm footing for the rest of the year. Compared, let's say, with Olympus, they are on the upswing whilst Olympus is on the down.

From the perspective of the Digital Camera, these results bear out what I have been seeing in the marketplace. Fujifilm is a very popular choice due to a good combination of quality, style, desirability, options, and price. They have got this just right. Can they keep the momentum going?

Fujifilm Holdings stock price jumped up +8.75% following the earnings report.

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