Sales, Income up for Canon for Fourth Quarter and Full Year; Strong Sales of Color MFPs

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Canon Inc. of Japan reported results for its fourth quarter and full-year 2013, with net sales for the fourth quarter up 8.8 percent and net income for the four quarter up 5.0 percent. For full-year 2013, net sales were up 7.2 percent and net income was up 2.6 percent. Results however were below Canon’s previously forecast expectations.

2013 in Review

Canon reports that due to the economic slowdown, flat demand led to a continuation of a harsh business environment especially for consumer products. Among its MFPs, color models continued to drive growth, while demand for laser printers realized a turnaround toward recovery. Although demand for interchangeable-lens digital cameras continued to show strong growth in Japan, demand overseas fell short of the previous year’s level, as the economic rebound in such markets as Europe and China is taking longer than expected. As for digital compact cameras, demand continued to shrink in both developed countries as well as in emerging markets. Overall market demand for inkjet printers, hit by the prolonged economic downturn, also declined in all major markets. In Canon’s industry and others sector, a rebound in capital investment for memory devices led to a pickup in demand for semiconductor lithography equipment in the latter half of the year, while demand for lithography equipment used in the production of flat panel displays (FPD) showed healthy market growth for mid- and small-size panels used mainly in smartphones and tablet PCs, and a modest recovery for large-size panels.

The average value of the yen during the year was ¥97.84 against the U.S. dollar, a year-on-year depreciation of approximately ¥18, and ¥130.01 against the euro, a year-on-year depreciation of approximately ¥27.

Despite the decline in demand for digital compact cameras and industrial equipment, Canon reports that net sales for the year increased 7.2 percent to ¥3,731.4 billion (U.S.$35,537 million) from the previous year. Canon says it achieved this through steady sales growth for MFPs and laser printers, along with an increase in sales of inkjet printers, made possible through sales-promotion efforts despite the harsh conditions posed by what it calls a shrinking inkjet printer market, as well as the positive effects of favorable currency exchange rates. Canon’s gross-profit ratio rose 0.8 points year-over-year to 48.2 percent, due to the effects of Canon’s ongoing cost-cutting efforts along with the depreciation of the yen.

Consequently, Canon says cost-cutting measures increased operating profit by 4.1 percent to ¥337.3 billion (U.S.$3,212 million). Net income attributable to Canon Inc. for full-year 2013 increased by 2.6 percent to ¥230.5 billion (U.S.$2,195 million).

Canon also reports that MFP color model sales were led by its imageRUNNER ADVANCE C5200/C2200 series. In its high-speed continuous-feed and wide-format printer business, sales of the Océ ColorStream 3000 series showed solid growth. In Canon’s laser-printer business, laser MFPs recorded strong growth, contributing to a year-over-year increase in sales. As a result, sales for the business unit totaled ¥2,000.1 billion (U.S.$19,048 million), an increase of 13.8 percent year-over-year, while operating profit totaled ¥266.9 billion (U.S.$2,542 million), increasing 31.1 percent.

Outlook

Canon is anticipating exchange rates of ¥100 to the U.S. dollar and ¥135 to the euro, representing depreciations of approximately ¥2 against the U.S. dollar, and approximately ¥5 against the euro compared with the previous year. Canon projects full-year 2014 sales of ¥3,850.0 billion (U.S.$36,667 million), a year-over-year increase of 3.2 percent; operating profit of ¥360.0 billion (U.S.$3,429 million), a year-over-year increase of 6.7 percent; and net income of ¥240.0 billion (U.S.$2,286 million), a year-over-year increase of 4.1 percent.

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