Canon Releases Q1 2022 Financial Results

Canon has released first quarter 2022 financial results to the Investor Relations page.

Presentation Material
Results
Supplementary Data

Imaging System Relevant Quotes from the Presentation Material

During the quarter, countries prioritized economic activity even as the Omicron variant spread Despite this, the global economy outlook became increasingly unclear due to accelerated inflation caused by supply shortages as well as the Ukraine issues.

In response to continuing parts shortages and logistical constraints, we have worked to maximize production by switching to alternative parts, cultivating new suppliers, negotiating with suppliers and by adopting a flexible production system. As a result, we were able to supply products largely in line with our plan, increasing net sales by 4.4 to 879.4 billion yen, and maintaining momentum, posting our fifth consecutive quarter of sales growth.

While being impacted by increases in material, logistical, and other costs, we promoted further efficiency based on a solid earnings foundation that was established through structural reform and re organizing into industry oriented groups. As a result, we were able to raise our performance even amid the unstable business environment, achieving an increase in profit of 76.1 billion yen in operating profit and 46.0 billion yen in net income.

As for Imaging, although we posted an increase in net sales thanks to growth in interchangeable lens unit sales, profit decreased due to the booking of one off expenses linked to the closing of a factory.

Changes in exchange rates, in particular the yen’s depreciation against the U S dollar, had a positive impact on operating profit of 11.0 billion yen.

As for costs, although the impact was negative due to the rise in parts pricing and logistical costs, we were able to partially offset this impact by raising the price of our products.

As for expenses, while we continued to invest in the development and sales of new businesses, overall expenses decreased due to special factors, including the sale of an office that was determined unnecessary after a review of branch functions by our U.S. sales company and the closing of a production site.

We expect inflation to continue in the form of higher prices for resources, energy, and food, resulting from the conflict in Ukraine and the prolonged impact of COVID 19 For these reasons the IMF lowered its world economic outlook for growth this year to 3.6. However, the movement of countries toward economic normalization is expect to continue.

Under these circumstances, we cannot accurately predict when the parts shortage situation, which is the major reason for the product supply shortage, will settle down, but expect the situation to gradually improve as we enter the second half of the year. However, one year has passed since we started implementing measures such as switching to alternative parts through design change, finding new suppliers, and setting up production structures at multiple sights and company wide efforts are showing steady results.

As for our products, expectations for strong demand remains unchanged and by steadily supplying products, we will link backorders as well as regular orders to sales. Based on this, we raised our projection for sales by 110 0 billion yen, bringing the total close to 4 trillion, as we aim to grow 13.3 to 3 trillion 980.0 billion yen.

As for profit, we expect to increase net income by 17.4 to 252 billion yen and raise operating profit by 27.7 to 360.0 billion yen We will achieve this by offsetting the effects of various cost increases through price increases, cost reductions, and expense savings, based on the solid profit structure we have built up through reforms we have implemented so far.

Changes in exchange rate assumptions, in particular expectations that the yen will remain weak against the U S dollar, is forecasted to have a positive 25.2 billion yen impact on operating profit.

As for costs, we will absorb the significant impact, which mainly consists of international shipping costs, by appropriately reflecting this in our pricing.

Canon Releases Q1 2022 Financial Results – Imaging

Demand, mainly coming from professionals and advanced amateurs, continues to be strong as full frame mirrorless cameras released by each company stimulates the market. As a result, we expect the 2022 market to grow by 5% compared to last year to 5.65 million units, which also includes some carry over from last year due to supply shortages

In the first quarter, unit sales of interchangeable lens cameras were below those of last year due to product supply shortages. However, sales increased due to a rise in average selling prices, as we prioritized the supply of high end models such as the EOS R 5 and EOS R 6 and also due to a significant increase in sales of RF lenses.

For the full year, even as the shortage of parts continues, we will continue to increase our product supply by using parts secured through purchases from new suppliers or by switching to alternative parts. At the same time, we will work to achieve our aim of sales and profit growth, fulfilling backorders to sell 3 million units, 10% more than last year.

This year as well, we will promote the enhancement of our lineup of camera bodies and interchangeable lenses, which include two new Super-telephoto fixed focal length RF lenses announced in February. As long telephoto lenses with focal lengths of 1200 mm and 800 mm, these lenses are extremely compact and lightweight, features that are expected to contribute to more people purchasing them.

Going forward, we will continue to enhance the overall value of the R system, including bodies and lenses to solidify our position as a top manufacturer of mirrorless cameras.

Buy your Canon cameras, lens, and accessories at B&H.

Posted: 4/26/2022 9:02:25 AM ET   Posted By: Bryan
Posted to: Canon News    Category: Canon Announcements
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