It isn't looking so good for our friends at Nikon!
Nikon's Year (Financial Results)
Via DSLR Bodies:
Here's the crazy corner Nikon is in: they can claim a modest 7% increase in operating income for the fiscal year that they just finished, but had far lower net sales and with restructuring costs had a significant loss. Nikon predicts that they'll recover to profitability next fiscal year, but with lower sales. They predict the imaging market will shrink, but they'll strengthen the profit of that group. The see saw is bouncing up and down. One end up, the other down, then that end up, the other down.
Most interesting is the way Nikon describes their restructuring process:
So at the moment, Nikon seems to be claiming that they're still doing re-assessment of cost structures while somehow “enhancing” management. Nowhere in that so-called restructuring plan do I actually see the word “implement,” as in “begin doing what we're talking about.” I'm sure that implementation has been active from the get go, but this plan, as presented, strikes me as too mild, too late.
I really don't like this: “Strategic direction for year ending March 31, 2018: Target a profit-structure able to sustain profit in a declining market. Create a midterm roadmap and initiate a fundamental review of costs.” Hmm, no wonder Nikon doesn't provide customer roadmaps: they don't have a complete one themselves.
I'm being harsh and snarky here. In a big business like Nikon, there's the large picture and the small picture. What we're discussing in terms of strategy is the large picture, where Nikon seems to be saying they aren't totally sure what they're doing other than further reducing costs. They've mentioned cost reduction almost every financial disclosure for the last decade, so what exactly do they really mean by “fundamental review of costs”?
In the small picture, I'm sure Nikon is still executing. But exactly what was that execution during the fiscal year they just reported? This:
- Unannounced the DL series
- Shipped the KeyMission series, which failed
- Announced and shipped Coolpix A180, A300, D3400, D5600, none of which sold well
- Announced the D7500
Which brings us to the ugly numbers for the Imaging group:
- Net sales down 26% from 520b yen to 383b yen
- Operating income down 39% from 45.7b yen to 27.7b yen
- ILC cameras down 23% from 4.04m units to 3.1m units
- ILC market share dropped from 31% to 26%
- Lens sales down 22% from 5.9m units to 4.62m units
- Lens market share dropped from 28% to 24%
- Compact camera sales down 61% from 6.23m units to 3.19m
- Compact camera market share down from 30% to 25%
Read full article at DSLR Bodies “Nikon's Year (Financial Results)”
text and images © 2017 Thom Hogan via dslrbodies.com
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(cover photo credit: snap from DSLR Bodies)