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Canon has sluggish 2019

January 29, 2020

The OEM has released its fourth quarter and full year results for the year ending 31 December 2019.

Canon said that looking back at the global economy in 2019, the US economy continued to grow thanks to solid consumer spending based on the strong employment environment and changes in monetary policy, despite signs of a slowdown in manufacturing industries. The European economy was soft amid sluggish exports and concerns over the UK leaving the EU.

The Chinese economy, despite holding discussions with the United States on trades and reaching an agreement in the first stage, the rate of economic growth dropped due to decreases in exports and capital investment caused by prolonged trade friction with the United States.

Other emerging markets, economic growth slowed due to sluggish external demand and weak pricing of natural resources. In Japan, while the employment situation remained strong, the economic recovery was modest due to a drop in manufacturing activity caused by sluggish external demand.

Amid these conditions, in the markets in which Canon operates, demand for office multifunction devices (MFDs) was in line with the previous year, despite solid demand for colour models, and due to lower demand for monochrome models, the OEM stated. As for laser printers, demand decreased due to the impact of economic slowdowns in China and other countries. For Canon, demand for inkjet printers continued to shrink in developed markets and remained sluggish in emerging markets due to economic slowdowns.

In 2019, overall unit sales of office MFDs increased slightly compared with the previous year, despite a decline in monochrome models, and thanks to market exceeding growth in colour models. As for laser printers, although sales for new models were strong, overall unit sales decreased compared with the previous year, due to slowdowns in sales of low-speed models, Canon said. Looking at inkjet printers, despite expanding sales of refillable ink tank models, overall unit sales decreased compared with the previous year.

Looking at Canon’s full year performance in the Office Business Unit, demand for office MFDs was strong for new next-generation colour models that feature enhanced security functions. Sales of monochrome models, however, declined due to the impact of economic slowdowns in emerging markets.

As a result, overall unit sales of MFDs increased slightly compared with the previous year. As for laser printers, despite strong demand for new models that offer low energy consumption, compact body designs, and high productivity, overall unit sales decreased compared with the previous year due to decreasing sales of low-speed models, mainly in China where the economic slowdown continued.

Sales of consumables decreased, mainly due to the economic slowdown in Europe. These factors resulted in total sales for the business unit of ¥1,702.6 billion ($15.6 billion/ €14.19 billion), a year-on-year decrease of 5.8%, while income before income taxes decreased by 23.9% year on year to ¥174.3 billion ($1.6 billion/ €1.45 billion).

As for the outlook for 2020, with regard to the US economy, as the strong employment environment, easing monetary policy, and bottoming out of manufacturing industry business sentiment due to waning concerns over US-China trade friction are assumed, Canon says modest growth is expected to continue.

For the European economy, while consumer spending is expected to remain firm and exports are expected to pick up, mainly due to problems with the U.K. leaving the EU, only a moderate recovery is expected. The Chinese economy is expected to bottom out, despite being affected by US-China trade friction and thanks to measures taken by the government.

In the markets in which Canon operates, overall demand of office MFDs is expected to increase slightly thanks to solid demand for colour models, Canon added. Demand for laser printers, however, is expected to be below that of last year as only a modest economic recovery is expected.

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