Olympus Corp. Full Year Results for FY2016

Previous Forecast

At the end of Q3 FY2016 forecasts were still good despite uncertainties over slowing China and possible litigations. Sales were to be up +7% year-on-year and operating income up +10% year-on-year. The dollar exchange rate was favorable whilst the Euro had turned down slightly.

In the imaging segment of the business, sales were up 1% and previous operating income losses had been wiped out. So all in all expectations for the full year were to maintain this position and move into FY2017 in good shape. So how did things work out in the final quarter.

Full Year and Q4 FY2016 Results

Overall Business Results

For the whole year FY2016 results have definitely improved with Net Sales up 5% and Operating Income up 15% for the overall business. Looking at the final quarter things were not quite so good with Net Sales down 1% and Operating Income up just 7%.

Imaging Business

Note: The rest of the article will concentrate on the Imaging side of the business as that is our main interest here

The final quarter of FY2016 ending 31st March 2016 saw Net Sales drop -14% on the same period the previous year. Operating Income in the same period reduced the year-on-year losses by ¥4.6B but still managed a loss of -¥2.2B.

Sales by Geographical Region

The best areas for sales have been Japan and Europe, whilst sales to North America have been poor.

Sales by Camera Type

The Compact camera market has been shrinking as more people choose to use smartphones rather than a dedicated point-and-shoot camera. Mirrorless cameras have been steadily increasing in popularity, that is until the 4th quarter, as can be seen from these figures.

The drop in Compact camera sales is more noticeable when it comes to units sold. You can see the same pattern of dropping sales as with value.

Average unit costs have been steady for both type in terms of Yen value.

Cost Savings

As part of the cost and resource savings, Digital Camera inventories were reduced from ¥23.7B to ¥14.4B.

Foreign Exchange Effects

In the final quarter, foreign exchange movement started to have effect on profits with the ¥/$ moving from 121.5/1 to 115.48/1 and ¥/€ moving from 132.95/1 to 127.23/1. This was just a foreshadow of things to come.

R & D Expenditure

Spending on research and development, so vital for tech companies, fell over the year from ¥6.758B to ¥5.151B.


Given that Digital Cameras are in a continually falling market, these results are quite positive. The company as a whole is doing well and can afford to subsidize the Imaging segment for a while. The key to the Imaging segment was to reduce losses as well as re-size to meet market demand and this has been achieved so far.

The Imaging segment has reduced from 10.4% to 9.7% of Net Sales for FY2016 and there are signs that this is deteriorating in the last quarter. The future of Olympus as a camera company is in the balance as the market sinks further and the requirements to invest in technology conflict with the obligation to generate profits. I hope it can continue to find its niche as a well-loved classic camera company. Only time will tell.

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