Profits Down for Konica Minolta, but Business Technologies Reports Steady Revenue, Profits
For the six months that ended September 30, 2015, Konica Minolta Group of Japan reports that revenue was ¥507.2 billion, an increase of 6.9 percent year-over-year. While revenue for the company’s Industrial Business decreased, Konica Minolta’s Business Technologies Business reported that higher sales of color products, acquisitions, and the effects of the weaker Japanese yen against the U.S. dollar resulted in an increase in revenue and profit. Konica Minolta’s Healthcare Business also posted higher revenue.
Overall, operating profit for the entire company was ¥28.2 billion, falling by 8.5 percent versus the same period a year ago. The Business Technologies Business’s profits rose despite the continuing strengthening of the Japanese yen against the euro. While the company’s Healthcare Business posted strong sales both in Japan and overseas, and consequently higher profits, falling sales in the Industrial Business led to lower profits.
Konica Minolta says the changes in profit for its businesses, along with the costs of restructuring that Konica Minolta implemented in the first half of its fiscal year, resulted in a decline in profit for the company as a whole. Consequently, profits were down 10.7 percent versus the same period a year ago.
Business Technologies Business
Konica Minolta states that as price competition for A3 color copier/MFPs is progressing in developed countries, it implemented a sales strategy of maintaining prices by making efforts to grow sales of high‐value‐added products, consisting most;u of higher‐segment models, but sales stagnated due to the impact of price competition, especially in the latter half of the second quarter.
It also says that because sales in emerging countries declined due to the impact of slower economic growth, sales volume for the whole of the period under review posted no more than a small gain.
On the other hand, sales of monochrome copier/MFPs were strong in Europe and China, and sales volumes exceeded prior‐year levels.
For “hybrid‐type sales,” which combine equipment sales with the IT services, there was a “solid increase” in contracts for Managed Content Services (MCS) that help improve business processes for mid-size companies.
In the production-printer market, Konica Minolta says its bizhub PRESS C1100 digital color-printing system launched last year posted higher sales in Japan, the United States, Europe, and in all other regions.
For the company’s Marketing Print Management (MPM) services, which help optimize printing costs and improve business processes in a company’s marketing department, the company says it drove a global expansion in the scope of its service offerings and won a large‐scale contract with a leading European retailer.
In its industrial-inkjet printer business, sales of components such as inkjet print heads for use in large‐format printers, were strong.
As a result overall, revenue for the Business Technologies Business to external customers stood at ¥409.2 billion, up 8.5 percent year-over-year, and operating profit was ¥34.3 billion, up 11.2 percent year-over-year. Konica Minolta attributes some of these gains to its acquisitions and the positive effects of the weaker Japanese yen versus the U.S. dollar.
Konica Minolta has revised its earnings forecasts to reflect weakening economic conditions in China and price competitiveness in the copier/MFP market. It now projects 20-percent lower revenue than it had previously forecast, along with 3-percent lower profit, for its entire fiscal year.