Canon’s operating profit grew by 49.1% in 2020

Canon has recently published its fiscal year 2020 report, which covers the period from January 1 to December 31, 2020. An overview of Canon’s financial statements shows that the company’s imaging unit has been on a better path than in previous years.

According to the Digital Photography Review , since about 2012, the digital camera market has entered a period of crisis-like conditions, and we have witnessed a double-digit decline in the annual sales statistics of the market’s products. 2020 is no exception; But even with the global crisis of the corona virus , companies operating in various industries have not yet given up hope and are at least trying to regain business. An examination of the companies’ new financial statements shows that the crisis is disappearing.

The Canon Imaging System business unit  includes cameras, lenses, inkjet printers and other image-related products. In Canon’s new financial report, we take a look at the imaging system unit and look at the camera statistics in detail.

According to statistics, Canon Imaging System recorded a net sales of 712.2 billion yen ($ 6.8 billion) and operating profit of 71.8 billion yen ($ 690 million) in fiscal year 2020; In comparison, Canon’s net sales and operating profit fell 11.8 percent year on year to 49.1 percent, respectively. Despite a 11.8 percent drop, Canon’s net sales and even operating profit are better than expected. In the third quarter of 2020, Canon said it expects net sales of its products to fall 14.7 percent year-on-year and operating profit to grow 5.9 percent year-over-year by 2020. 

A look at the camera division of Canon Imaging Systems shows that the company’s cameras recorded net sales of 347.7 billion yen ($ 3.4 billion). This figure is better than Canon’s initial expectations of 330.1 billion yen ($ 3.2 billion); But it still shows an annual decline of 25 percent.

According to official statistics, Canon has sold 2.76 million digital camera units with replaceable lenses by 2020, which is higher than the company’s initial expectations (2.7 million units); But it shows that sales of Canon cameras have fallen by 34% year on year.

Canon said in a statement that it expects sales of digital cameras equipped with interchangeable lenses to grow by one percent next year. If growth of one percent really happens, 2021 will be the second year since 2013 in which Canon has been able to increase sales of its cameras. The first example of this happened in 2016; Where Canon announced that its camera sales have grown by 2% compared to 2015. 

Significant increase in Canon operating profit on an annual basis, especially considering the decrease in net sales of the company’s products, shows that Canon has succeeded in significantly reducing the costs of the imaging system business unit. According to additional data released by Canon, the company has managed to reduce imaging system unit costs by approximately 30 billion yen ($ 290 million) by 2020.A large part of this cost reduction is due to the reduction in research and development costs, which amounted to 21 billion yen ($ 200 million).

With the advent of the Corona virus, demand for the camera plummeted, and Canon says the process of improving the camera market has been faster than expected. Evidence of this can be seen in the chart below, which shows that Canon camera net sales fell by only 6.1% in the fourth quarter of 2020; Canon’s net sales fell 16 percent and 54.5 percent in the third and second quarters of 2020, respectively. Canon specifically states that the EOS R5 and EOS R6 mirrorless cameras are selling well and have had a significant impact on improving the company’s imaging system unit.