28 July 2019 Business

Production print provides bright spot for Canon

Canon is saving money, merging its UK head office included, as sales for the Japanese giant fall short.

Production printing proved a rare bright spot for Canon in the first six months of the year which was otherwise marked by a decline in sales in most divisions. Imaging systems (cameras), office products, and industrial area where cameras are used for a multitude of non traditional purposes, all showed slowing business. Only medical systems declared growth.

Except within the Office division, where ranked as ‘other’s Canon lists results from the graphic arts and packaging sectors. Both are growing rapidly, the company says. “During the second quarter we significantly expanded the ability of our Prostream 1000, a continuous feed press that offers industry leading resolution and print speed, to handle thicker paper types. Further expanding the range of printed material that can be output, we saw a significant increase in sales, particularly in North America.

“Additionally, a new model in our Colorado series of large format printers garnered high praise for its ability to print on a broader range of media, which resulted in us securing orders at a level exceeding our target at a printing industry event held in Germany in May.”

The new products will increase sales growth during the remainder of the year and will in turn drive a growth in service revenues. The graphics industry achieved a 5.6% growth in revenue in the first half to ¥106.5 billion with further growth anticipated for the full year.

However, the graphic arts sector remains a minor part of Canon's overall business. This showed a 10% fall in revenues to ¥905.9 billion for the six months and operating profit falling 56%.

The company notes the fall out from the US-China trade friction as it puts, slowing economies in China and Europe which is slowing the take up of new equipment. The confusion over Brexit is also mentioned as a negative factor.

The company is taking action “promoting comprehensive cost reduction in areas spanning procurement to production, up to and including services. We are also working on a group wide basis to review and reduce investments and expenses. Additionally, we are making progress on structural reform, focusing on sales companies, to accelerate the shift from B2C to B2B.”

In the UK this has meant the announced the closure of the Canon UK headquarters in Redhill. The business based there will be merged with Canon Europe’s head office in Stockley Park. Back office functions are being outsourced.

UK managing director Yusuke Mizoguchi has stated: "Canon UK&I is one of the most important national sales organisations in the Europe, Middle East and Africa region and will continue to retain its own identity, with a very clear focus on sales and marketing for the UK and Ireland markets.

"Given that the EMEA HQ has been based in the UK for many years, it makes strategic sense to seek out opportunities to create a more streamlined operation while increasing our overall competitiveness.

"Having a joint location will enable us to look for opportunities to share resources and run a more efficient organisation which will also create some broader group opportunities for some of our UK employees."

By Gareth Ward

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UK HQ to close

UK HQ to close

Canon UK is closing its Redhill head office and will move suitable staff from the 450 employed in Redhill to the Stockley Park office occupied by Canon Europe. Production print is the only division to show growth, medical systems apart.

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