Canon’s Q2 financial results are out and they are not good

Canon released their 2019 Q2 financial results and they are not good - net sales are down 18.5%, profit is down 64.05% compared to Q2/2018:

The projections for the entire financial year are also grim:

Here is the information related to the camera business:

Some quotes from Canon's presentation:

In Imaging System, we expect sales and profit of interchangeable-lens cameras to decline, due to the continued impact of mainly entry-class DSLR market contraction. However, in the area of mirrorless cameras, where we are focusing our energy, the effects of expanding our lineup will continue to lead to sales growth.

Within the Imaging System Business Unit, although the market of interchangeable lens digital cameras continued to shrink, for mirrorless cameras, unit sales were strong owing to the successive introduction of new models equipped with full-frame sensors after the second half of the previous year, which served to increase the company’s presence in the market. For inkjet printers, although Canon has been working to increase sales by expanding its lineup of refillable ink tank models and through the development of business inkjet MFDs, unit sales decreased overall compared with the same period of the previous year mainly due to the shrinking market. As a result, sales for the business unit decreased by 18.5% to ¥204.7 billion year on year, while income before income taxes decreased by 63.7% year on year to ¥13.4 billion. Sales for the combined first six months of the year totaled ¥381.0 billion, a year-on-year decrease of 17.8%, while income before income taxes totaled ¥18.4 billion, a year-on-year decrease of 71.0%.

Looking at interchangeable-lens cameras, in addition to market contraction centered on entry-class DSLRs, in 2018 we launched three new products that led to a high level of sales in the second quarter of last year. As a result, unit sales for the second quarter this year were down 22% to 1.08 million.

Against this backdrop, we successively launched strategic full-frame models into the mirrorless camera market from the second half of last year. The introduction of a high-end model, further heightened our presence in the market and at the same time had a positive impact on overall sales of our mirrorless cameras.

On the other hand, in the full-frame category of the market where price competition is increasing, as a result of prioritizing profitability, unit sales were below our target. However, for interchangeable-lens cameras overall, our unit sales were in line with our plan. As a result, we retained our full-year projection for unit sales. In terms of revenue, we did lower our projection to reflect a change in product mix to our plan. However, in the second half of the year we will stimulate sales through the launch of new lenses.

Specifically, we will enhance our lineup launching 5 new lenses for mirrorless cameras. Through kit sales that leverage our broad range of mirrorless camera lenses and by bundling cameras with accessories like our lens adapter that makes it possible to use our existing rich lens lineup we will promote further expansion of mirrorless camera sales.

In addition, we will further strengthen our efforts to generate user interest in our mirrorless cameras. As a large percentage of high-end models purchases involve the customer actually handling the model and trying it out before buying, in major cities in Japan and other markets, we will create even more touch points for users, proactively expanding opportunities to actually experience our products.
Additionally, for professional photographers, we will foster trust in our products, offering, among others, enhanced support at international sports events.

Through these measures, we will further raise our presence in the market for high-end models, which will also have a rippling effect on more volume oriented cameras and subsequently link this to a further boost in sales.
As for compact cameras, sales were in line with our plan. As such, we maintain our full-year unit sales projection. Through the launch of new products, we will raise the proportion of sales attributable to premium G series models and link this to improved profitability.

Via Canon

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