- Q2 2016 Imaging System segment year on year net sales fall -13.5%
- Operating profit Imaging System segment down -14.4%
- Overall company net sales -11.7%
It has been evident as the year has progressed that Canon would face greater challenges to sustain their financial figures. Strengthening ¥en, earthquake disruption to production and general falling market for stand alone cameras have all proved challenging.
Todays consolidate results for Q2 FY2016 give a further insight into just how difficult conditions are for camera manufacturers. In Q1 FY2016 year on year net sales for the Imaging System segment fell -10.6%. Would Q2 see a deterioration or would the business bounce back?
At the beginning of FY2016 projections for the full year 2016 were for a fall of -8% Gross Sales Value and -16% in Total Units in the Imaging System segment. This fall was to be mainly due to the demise of the Fixed Lens Compact Camera that was expected to fall -24% by Units in 2016 under intense competition from the Smart Phone.
Friday 24th June 2016 saw yet another body blow to the Japanese Camera Industry. With global markets in turmoil the Yen gained against both the Euro and Dollar. This of course is exactly what the manufacturers didn’t want. 2016 had already been a challenging year in terms of exchange rate and this would reverse any improvements.
What the Industry needed was a lower Yen exchange rate to boost the important export markets. Since Feb 2016 the exchange rate had been moving against them but just before that fateful Friday it had started to make some improvements. Now that lay in tatters as the outcome of the ‘Brexit’ referendum became clear.
Sony reduced its operating profit forecast for the FY2016/3 due to weakening demand for its camera modules made by its devices segment. Operating profit forecast has now been reduced from ¥320B to ¥290B, a drop of -9.4%.
This drop is largely due to an impairment charge of ¥59.6B as projected demand for camera modules into 2017 looks weaker. These camera modules are used both in Smart Phones and Digital Cameras.
Production problems due to the recent earthquake in the Kumamoto region have not as yet impacted on this years results. However, forecasts for next year have been delayed until the full impact of the damages has been evaluated.
Recent news about the fall in iPhone sales and the ongoing fall in Digital Camera sales would back up this assessment of future demand.
Full year results are due out on 28th April 2016.
- Q1 2016 year on year net sales fall -10.6%
- Operating profit down -32.6%
- Overall company net sales -7%
The first indication of what 2016 will bring for Canon was contained in their Q1 FY2016 financial report just released. Expectations were for a significant fall in the imaging segment so lets see how they got on.
Projections in the last report for the full year 2016 were for a fall of -8% Gross Sales Value and -16% in Total Units. This fall was to be mainly due to the demise of the Fixed Lens Compact Camera that was expected to fall -24% by Units in 2016 under intense competition from the Smart Phone.
In the first part of this report, I looked at the results for Olympus from 2012 to 2015 and what they were looking to achieve in FY2016. With three-quarters of the year have been accounted for, how are they getting on so far. I will look at the aspects of Net Sales Income, Gross Profit, SG&A Expenses and Operating Income.
Total Net Sales up to Q3 2016
While Q3 has been a steady quarter for Olympus if we look at the year for the 9 months so far, for the whole company things have improved significantly.
Net Sales have increased year-on-year by 8%. Gross Profit has had a bigger improvement by 12% year-on-year. This, however, was offset by an 11% rise in SG&A leaving the Operating Income up 19% year-on-year.