Inkjet Wholesale News aims to provide updates on the latest significant occurrences in the field of printing. Whether it’s the launch of a new technology or volatility of market prices, we’ll be here to give you the lowdown on what happened, when it happened, and what it means!
Q3, FY2015 Epson Financial Results Highlighted By Dropping Revenue & Profits
Epson is one of the more active Original Equipment Manufacturers (OEMs) out there. We, especially, have many stories concerning Epson. In fact, in the last couple of months, we’ve reported on Epson four different times. The earliest post in this period was the launch of The Paperlab from Epson, something that happened in December last year. That was followed by the launch of SureColor SC – S series of wide format printers in late January. In the same month, about a week later, Epson announced that it would be expanding further into the Indonesian market. The last post focusing on Epson on our blog was on an independent study that the OEM had commissioned for finding how important printing is in European markets.
Even though Epson’s commissioned study in that last post revealed the popularity of printing in office setups, it seems as if that popularity is not being translated into financials. The OEM, last month, announced Epson financial results for the third quarter of the current fiscal.
The Epson financial results though seemingly poor are being seen positively by the company because of myriad reasons. For instance, even though the company’s business profits dropped by approximately six percent in the third quarter of the current financial year, the OEM claims the “Q3 business profit” to be “solid”.
In third quarter of the last fiscal, Epson financial results showed its business profit to be around 34.5 billion Japanese yen. In Q3, FY2015, this number dropped by 2 billion Japanese Yen. Epson financial results didn’t only show drop in business profit but also an obvious drop in its overall revenue.
The difference between Q3, FY2015’s revenue and Q3, FY2014’s revenue is 7.5 billion Japanese yen which amounts to a drop of approximately 2.5 percent. The actual numbers stood at 294.4 billion Japanese yen in Q3, FY2015 and 301.9 billion Japanese yen in Q3, FY2014.
The possible reason why Epson financial results are being seen as slightly positive by many analysts and the OEM itself is the numbers for ‘profit from operating activities’. The ‘profit from operating activities’ in Epson financial results for the third quarter of the current fiscal showed massive improvements when compared to the same period of the last year.
The improvements were to the tune of 25.3 percent since the figures in Q3, FY2015 were 40.1 billion Japanese yen, while they were only 32 billion Japanese yen in Q3, FY2014.
The numbers, however, are alarming if one considers the first three quarters of the FY2015 together. The drop in profits in the mentioned period was a drastic 14.9 percent. Business profits, as per Epson financial results, in FY2015 were 72.7 billion Japanese yen, while they were 85.4 billion Japanese yen in FY2014.
Moreover, profits from operating activities were even more alarming. FY2015’s numbers were to the tune of 81.9 billion Japanese yen which was a drop of 26 percent since FY2014’s numbers were to the tune of 110.6 billion Japanese yen. The only bright light in FY2015 were the revenue figures which showed an uptick of 2.8 percent going up from 814.8 billion Japanese yen to 837.4 billion Japanese yen.
Study: Toner Cartridge Sales Drive Growing Demand of Computer & Printer Supplies Industry
The printing industry is in a very strange place right now. On the one hand, everyone needs to graduate to paperless scenarios while on the other, people claim that they still prefer to use printed documents at workplaces. The strangest is that while the profit margins of OEMs are dropping because of market dynamics of printing supplies like we showed above, other studies and researches reveal that the market, itself, is actually flourishing.
A globally relevant technology research and advisory company, Technavio, conducted a study of the global office stationery and supply market. Technavio’s study showed that the global office stationery and supply market is actually expected to grow at a very strong rate between 2015 and 2019 with developed markets being the prime driver.
For instance, the report mentions countries like Japan, France, Canada, Germany, the United Kingdom, and the United States of America. Furthermore, the report also states that emerging or developing countries will also contribute significantly to this growth. Emerging markets such as India, China, South Korea, and Brazil were cited as the major countries that fall in this category.
In terms of sub sectors, the global office stationery and supply market is actually expected to be influenced heavily by the toner cartridge category. The demand for toner cartridges in the global market is expected to rise by a CAGR of nine percent by the end of the next three years.
In fact, such will be the growth in the toner cartridges industry that it is going to be the largest contributor in the global office stationery and supply market. Typically, according to Technavio, this is a market that is being driven by IT integration and industry automation both, areas where the printing is a fundamental requirement.
Technavio revealed the positive growth figures for the toner cartridges category and office stationery and supply market as a part of its report covering the major trends in the sector.
Another trend that Technavio cited in its report was that of ‘multichannel marketing’ which refers to various companies in the specified sector using “various channels” to market their products. For instance, most such companies have incorporated the online medium to their existing offline networks. Technavio also stated that various companies in the industry have either implemented or are considering mergers and acquisitions so as to gain access to larger markets.
Technavio, as explained above, is a well-known technology research and advisory company. It undertakes customised market researches and industry surveys for various clients through more than 300 analysts that it employs. Technavio uses various primary and secondary techniques of research to deduce various market aspects for its clients such as market size, potential trends, and other nuanced information.