As it promised when it initially pushed back the release date, Nikon has released the financial results today for its 2020 fiscal year (FY2020), ending March 31, 2020, as well as its forecast for its 2021 fiscal year (FY2021).
Overall, Nikon Corporation recorded ¥591B in revenue and ¥6.7B in operating profit. These numbers align with what Nikon’s updated forecast suspected and are a decrease of ¥117.6B and ¥75.9B, respectively, year-over-year (YOY).
|An overview of Nikon’s revenue, operating profit and more for FY2020.|
Interestingly, Nikon attempts to quantify the impact of the COVID-19 pandemic, with its report saying it believes the pandemic has caused 10 billion yen in operating profit losses. Specifically, Nikon attributes ‘approximately 4 billion yen’ of that loss to its Imaging Products division ‘Due to product mix change by [the] suspension of distributors mainly selling mid- and high-end cameras, and delay of launch in main products including professional use products by stagnation of the supply chain.’
Diving specifically into its Imaging Products Business, Nikon recorded ¥225.8B in revenue and a ¥17.1B operating loss. These numbers are both worse than Nikon’s February 2020 forecast and are a decrease of ¥70.3B and ¥39.1B, respectively. The documents reveal Nikon sold 1.62 million interchangeable lens camera (ILC) units and 2.65 million interchangeable lens units, with just 840,000 compact digital cameras sold. These unit numbers are a decrease of 21.4%, 16.4% and 47.5%, respectively, YOY.
|Nikon’s breakdown of the FY2020 results for its Imaging Products Business.|
In notes on the revenue of its Imaging Products Business, Nikon says revenues were ‘progressing mostly in line with previous forecasts until the middle of February,’ when the COVID-19 started to wreak havoc on the supply chain and retailers. Nikon again reiterates that it’s had to delay new product launches ‘such as high-end DSLR cameras and [mirrorless lenses]’ due to the impact of the COVID-19 pandemic. This is referencing the delay of Nikon D6 shipments and suggests the Nikkor Z 70-200mm F2.8 VR S zoom delay back in January could’ve been due to COVID-19 complications as well, even though at the time Nikon said it was caused by ‘production reasons.’ Nikon also notes sales of its Z-series mirrorless cameras and Z-series lenses have increased, and that the volume/sales ratio of mid-range and high-end cameras ‘improved steadily’ YOY.
Additional comments under the ‘Operating Profit’ headline note Nikon incurred ¥2.7B in restructuring costs and posted ¥6.6B in fixed asset impairment losses, which were detailed in its statement earlier this month.
As for FY2021, Nikon doesn’t share too much information, saying performance forecast details will ‘be disclosed once reasonable estimation can be given as the impact of COVID-19 is uncertain.’ Numbers aside, Nikon notes sales for its imaging Products Business ‘decreased significantly YOY’ in April and May of this year and notes that ‘the business of luxury goods is expected to continue in a severe business environment for the time being, and the deficit for the second consecutive fiscal year is inevitable.’
|The executive summary section of the report details how Nikon plans to approach its various divisions in the upcoming year.|
Under the executive headline, Nikon says its strategy for the Imaging Products Business is to ‘rebuild business with an understanding of accelerating market shrinkige [and] aim to achieve early profitability.’ In other words, Nikon plans to optimize its Imaging Products Division to get ahead of the quickly-shrinking camera market by restricting and minimizing costs.
You can find all of the latest financial results and presentation materials referenced above on Nikon’s investor relations website.
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