Konica Minolta Posts Upbeat Financial Results

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Konica Minolta has reported results for its latest fiscal period, which ran from April 1 to September 30, 2018, reporting revenue of 517.0 billion yen, an increase of 5.9 percent year-over-year.

By business segment, revenue in the Office Business rose, driven by sales of color models, and the Professional Print Business also posted an increase in revenue, reflecting a higher number of sales of both color and monochrome models.

In the Healthcare Business, revenue fell as a result of discontinuing the sales of certain purchased products.

Revenue in the Industrial Business remained at the level of the same period in the previous fiscal year, with higher sales in the performance materials business unit offsetting a decline in revenue due to slowing demand for products in the measuring instruments business unit.

Operating profit was 34.6 billion yen, an increase of 69.1 percent year-over-year.

Various initiatives taken to boost the profitability of the company’s core businesses under the Medium-Term Business Plan contributed to generate the intended performance, and as a result, there was a significant increase in operating profit in the Office Business and the Professional Print Business.

As part of the initiative that started in the previous fiscal year, Konica Minolta continued to optimize the use of its facilities (land and buildings) under its corporate real estate strategy and recorded 14.9 billion yen in income from liquidation of the assets through sale and lease-back arrangements. Consequently, all of the above led to a significant year-on-year increase in profit on a consolidated basis.

Profit before tax came in at 33.1 billion yen, an increase of 74.0 percent year-over-year, while profit attributable to owners of the parent amounted to 23.3 billion yen, an increase of 72.6 percent year-on-year.

Office Business Segment

In the office products business unit, the number of sales of monochrome A3 MFPs declined year-over-year, but sales of color models grew considerably, resulting in an overall increase in sales volume.

Among color models, the high-speed product launched in the previous fiscal year continued to be a key driver of the business unit’s sales performance in developed countries, primarily in Europe, the United States, and Japan.

In growth countries such as China, the ASEAN region, and India, there was a considerable increase in the number of sales of a wide range of models, from low-speed to high-speed, showing a growth in sales as targeted in strategic initiatives undertaken for the fiscal year ending March 31, 2019, under the company’s regional strategy.

In the IT services solutions business unit, in addition to the continued effects of newly  consolidated subsidiaries in the United States and Europe, the success of strengthening sales and service delivery capabilities to provide managed IT services for the release of the Workplace Hub, an IoT platform, into the market generated higher sales and contributed to a year-over-year increase in revenue.

As a result, the Office Business segment recorded revenue of 290.7 billion yen, an increase of 4.0 percent year-over-year, and operating profit of 22.6 billion yen, an increase of 12.6  percent year-over-year.

In the production print business unit, the number of sales of both monochrome and color equipment increased year-over–year. Sales in Europe increased mainly driven by sales of top-of-the-line color models, while in North America, the number of sales of monochrome models rose significantly. In growth countries including China, the ASEAN region, and India, the number  of sales of both monochrome and color models increased considerably.

In the industrial printing business unit, sales of AccurioJet KM-1 digital inkjet presses, label printers, and digital decoration printing equipment made by MGI increased primarily in North America and Europe. The overall number of sales of products for the industrial printing business unit “rose considerably.”

In the marketing services business unit, in addition to recovering demand from major corporate customers, by accelerating the transition to a business that provides high value-added solutions, the profitability improved.

As a result, the Professional Print Business segment recorded revenue of 109.2 billion yen, an increase of 8.0 percent year-over-year, and operating profit of 5.4 billion yen, an increase of 121.3 percent
year-over-year.

Forecast

For its fiscal year that will end on March 31, 2019, Konica Minolta is forecasting revenue of 1,080.0 billion yen, versus 1031.2 billion yen for its previous fiscal year, and profits of 40.0 billion yen, versus 32.2 billion yen for its previous fiscal year.

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