Canon Inc. Q1 FY2017 Financial Results - Solid Results Support Camera Production

Canon Q1 FY2017 Headlines

  • Overall company Net Sales up y-on-y +22.0%
  • Overall company Operating Profit y-on-y +88.8%
  • Imaging System segment Net Sales up y-on-y +3.1%
  • Imaging System segment Operating Profit up y-on-y +49.0%

Some good figures coming out of Canon Inc. for the first quarter of 2017. Last years negative effects of the rising ¥en have subsided and stable global markets have allowed for some growth. Core businesses have had some growth but the new businesses have been much stronger performers.


Consolidated net sales have improved 22.0% to 972.8¥B and operating profit has improved y-on-y to 75.7¥B a +88.8% improvement. This improvement reflects the fact that the new businesses of AXIS and Toshiba Medical Services Corporation (TMSC) have been added to the fold. Operating profit to Net Sales ratio is still fairly slim at 7.8% but going in the right direction.

Imaging Segment Results


The imaging segment that includes Digital Cameras, Lenses and Ink Jet Printers has been under pressure due to falling markets and production disruption but still managed a 3.1% improvement in Net Sales at 242¥B. This improvement came mainly from Cameras where sales value was up 7.4% for the quarter year-on-year. Operating profits were much better up 49% on the previous year to 29¥B.

Digital Camera Net Sales as a proportion of Whole Business


So how important are Digital Cameras and Lenses to the overall business results? The answer is less and less. As the market for Digital Cameras matures and growth is hard to come by, diversification to other more profitable areas where growth is strong will continue in the coming months and years. Using core strengths, such as Lens production, will aid in the development of some new business areas, i.e. Network Cameras.

Digital Camera Unit Sales by Type


Taking a closer look at the Digital Cameras sold we can see that Interchangeable Lens (IL) models have improved in numbers by 6% from 1.02M units to 1.08M units y-on-y. These include both ‘true’ DSLR and Mirrorless models. Compact Cameras continue to decline by -6% from 1.06M to 1.0M units y-on-y for this quarter.

The ratio of type by units sold is 52% in favor of IL cameras whereas by value this increases to 83%. Hence, the low priority put on producing low-cost fixed lens cameras.

Canon Market Share of the Digital Camera Market


The chart above is taken from Canons own figures of market size and predictions for the rest of 2017. These figures correlate reasonably well with CIPA figures. Canon's market share of IL cameras in 2016 was ‘just’ 49.3% of the total market by units. Very considerate of them to leave the other half for Nikon, Sony, Olympus, Fujifilm and Panasonic to fight over. In 2017, that is predicted to slip a little over 1%.

Not so with the Compact cameras. Here Canon only had 26.7% of the total market. This is predicted to rise as more advanced cameras take over this segment. Canon G-series cameras are gaining ground from the competition.


After a disrupted year in 2016 and a slight recovery into 2017 things are looking more positive for Canons camera business. The rest of Canons business is holding up and provides a stable platform to support the camera business.

We will need to see at least another 2 quarters to know if this is the bottom of the route on Digital Cameras or if further contraction is ongoing.

Canon sticking to the basic DSLR concept and not charging headlong into the Mirrorless market too soon appears to the right move. If they can balance the two they will be difficult to compete with as the competition is sapped of profits to fund new high-tech R&D.

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