Stellar Fiscal Year for Canon; Expects 2018 Profit To Be Up 27 Percent
Canon Inc. of Tokyo, Japan, reported results for its fiscal year 2017 that ended on December 31, 2017, reporting that, fueled by demand for color office copier/MFPs, demand for ink-tank inkjet printers in emerging economies, and the acquisition of Toshiba Medical Systems Corporation, net sales for the year increased by 19.9 percent year-over-year to ¥4,080.0 billion. Although Canon’s gross profit ratio decreased by 0.4 points to 48.8 percent due to the effect of the product mix, gross profit increased by 19.0 percent year-over-year to ¥1,992.7 billion, due to higher sales and Canon’s continuous cost-reduction efforts.
Operating profit increased by 44.8 percent to ¥331.5 billion. Basic net income attributable to Canon Inc. shareholders per share for the year was ¥222.88 billion, a year-over-year increase of ¥84.93 billion.
During 2017, sales of Canon office copier/MFPs increased compared with the previous year, due to the expanded sales of color models. Sales of laser printers increased compared with the previous year, supported by steady sales of newly launched models, as demand recovered in emerging economies. Demand for inkjet printers increased from the previous year with economies recovering in emerging countries. There was also solid demand for medical equipment, mainly outside of Japan.
Within the Industry and Others sector, demand for flat panel display (FPD) lithography equipment and manufacturing equipment for organic LED (OLED) panels enjoyed strong growth and the demand for network camera also enjoyed solid growth. Demand for cameras shrank moderately.
Results for Office Business Unit
Within Canon’s Office Business Unit, sales of office MFPs increased from the previous year and achieved higher growth than the market average, supported by steady sales of next-generation color models designed to strengthen the product lineup, such as the newly launched color A3 (12”x18”) Canon imageRUNNER ADVANCE C3500 series for small- and mid-size offices.
Among high-speed continuous-feed printers, sales of the Océ-produced VarioPrint i300, a high-speed sheet-fed color inkjet press that offers superior low-running-cost performance, increased.
As for laser printers, sales of both hardware and consumables increased from the previous year, supported by steady sales of new models that achieve low power consumption and compact body designs.
These factors resulted in total sales for the business unit of ¥1,865.9 billion, a year-on-year increase of 3.2%, while operating profit totaled ¥180.6 billion, a year-on-year increase of 6.6 percent. Adjusted operating profit, which excludes impairment losses on goodwill from operating profit, increased by 26.6 percent to ¥214.6 billion.
Within Canon’s Imaging Group, and looking at inkjet printers, sales increased compared with the previous year, thanks to such factors as strong sales of newly launched home-use models and refillable ink-tank models for emerging economies. Canon noted that its newly designed home-use TS-series, refillable ink tank models targeting emerging economies, and the imagePROGRAF PRO series of large-format inkjet printer targeting the professional photo and graphic art printer markets “enjoyed strong demand,” resulting in unit sales increasing from the previous year.
Sales of semiconductor lithography equipment, FPD lithography equipment, and manufacturing equipment for OLED panels exceeded those of the previous year, thanks to favorable market conditions, and sales of network cameras increased steadily in response to the growing market.
As a result, sales for the business unit increased by 3.7 percent year-over-year to ¥1,136.2 billion, while operating profit totaled ¥175.9 billion, a year-on-year increase of 21.8 percent.
For 2018, Canon expects demand for its color MFPs to grow moderately and make up for the contraction of the market for monochrome models, leading to the same level of demand overall compared with the previous year.
Looking at the laser printer market, although demand in developed economies is expected to decrease, demand in emerging economies continues to recover, resulting in overall demand remaining at the same level as the previous year.
Canon expects demand for digital cameras to “decrease moderately,” but expects demand for its inkjet printers to continue to exceed that of the previous year.
As for the medical-equipment market, demand is expected to remain firm in response to replacement demand for medical equipment in developed countries, increasing medical needs associated with population growth in emerging countries, and changes in the prevalence of diseases.
With regard to currency exchange rates for the year, on which Canon’s performance outlook is based, Canon anticipates exchange rates of ¥110 to the U.S. dollar and ¥130 to the euro, representing appreciation of approximately ¥2 against the U.S. dollar and depreciation of approximately ¥3 against the euro compared with the annual average rates of the previous year.
Upon taking into consideration these conditions, Canon projects full-year 2018 consolidated net sales of ¥4,300.0 billion, a year-over-year increase of 5.4 percent; operating profit of ¥420.0 billion, a year-over-year increase of 26.7 percent; income before income taxes of ¥420.0 billion, a year-over-year increase of 18.7 percent; and net income attributable to Canon Inc. of ¥280.0 billion, a year-over-year increase of 15.7 percent.
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