10 May 2020 Business

Covid-19: Suppliers wounded as pandemic hits revenues

Suppliers of printing technology have been unable to install or deliver equipment, damaging revenues for litho and digital press providers.

The widespread impact of Covid-19 on the industry is demonstrated in results from litho press and digital press providers alike.

Following on from the sales plummet announced by Xerox, rivals Ricoh and Canon have described similar effects while Konica Minolta has delayed publication of its most recent figures until the end of this month. They will not be good.

The Japanese company says that the pandemic has led to “restrictions on visits to customers, delayed installations and has had an impact on its sales and service activities”. That is the general experience.

Ricoh filed figures for the full year that were 1.7% lower than the previous year, having been on course of an increase after the first nine months of its financial year. Operating profit fell 9%. It says that installations and consumable revenue plummeted in the final three months of the year. In commercial print the company noted a 3.7% drop in revenues for the year, but says that sales of the Pro C9200/9210 and VC70000 have been strong.

Canon says that in comparison to the same three months last year, sales from January to March were down 9.5%, though within this commercial printing achieved sales and revenue growth. This is one of Canon’s growth areas and remains small compared to photographic and office. Sales of MFDs and laserprinters dropped as offices across the world were closed.

“The spread of Covid-19 completely changes the the global economic landscape,” the company says, explaining that it is impossible to provide a forecast for the remainder of the year.

Likewise, Komori is announcing results for the year and says that predictions for the current financial year are impossible because of the pandemic. It was switching to emergency mode to manage the rest of the year.

The company announced an extraordinary loss of ¥17 billion (£135 million) only partly due to the drop in sales and installations caused by the pandemic. The company’s expectations of a growth in sales following the 2008 recession had failed to materialise as expected. The migration to digital had been faster than expected in the US, Japan and Europe, meaning sales targets have been missed.

In the year just passed demand in Europe and the US had been sluggish, while in demand in China is described as weak due to ongoing trade disputes between China and the US. Demand in Japan had been hit following the imposition of a consumption tax which had delayed decisions and meant demand for print had declined.

The effect has been equally dramatic in Europe. Koenig & Bauer says that first quarter revenues were down 25.3% to €172.4 million compared to the same period in 2019 and that Ebit dropped into the red to the tune of €34.9 million.

Orders, however, have remained firm with €271.5 million booked in the three months. The company says that there had been “a significant impact on orders and project processing for the delivery, assembly and installation of machines at our international customers”.

The sheetfed division had felt this most. Revenue dropped to €68.2 million (€113.7 million). As with Komori, the corporate strategy has taken a back seat. “Corona crisis management currently has the highest priority,” the company says.

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Koenig & Bauer reports big sales drop.

Koenig & Bauer reports big sales drop.

Koenig & Bauer is among those announcing that the spread of Covid-19 has hit sales and which is planning to focus on managing the crisis rather than trying to adhere to strategic plans announced previously.

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