The OEM said that the impact from COVID-19 is growing more serious as it has persisted longer and become more widespread compared with Q1.
In the second quarter, net sales declined 25.7% to ¥673.3 billion ($6.4 billion/ €5.4 billion) and operating profit and net income were a negative ¥17.8 billion ($169 million/ €144 million) and ¥8.8 billion ($83 million/ €71 million), respectively.
Canon added: “We saw unexpected events originating from COVID-19 occurring around the world, such as the closure of corporations and retail establishments, the standstill of business negotiation, and the implementation of overseas travel restrictions.
“Our estimation of the impact of COVID-19 on each of our businesses shows around ¥210.0 billion ($1.99 billion/ €1.7 billion) on net sales and around ¥70.0 billion ($665 million/ €567 million) on operating profit.”
For its Office Business Unit net sales declined 30% and operating profit was in the red as both hardware sales and service revenue decreased.
Forward projections for FY2020 remain difficult. Canon said: “As economies gradually reopen and thanks to large-scale fiscal-stimulus packages and bold monetary policies of each country, we assume that the future economy will rise from its current bottom. However, we expect the pace of economic recovery in the second half of this year to be constrained as we are unable to predict when the situation surrounding COVID-19 settles down.”
Canon now expect full year net sales to decline 14.3% to ¥3.8 trillion ($36.12 billion/ €30.79 billion), operating profit to decline 74.2% to ¥45.0 billion ($428 million/ €365 million), and net income to decline 65.6% to ¥43.0 billion ($409 million/ €348 million).
Canon added: “As for office equipment, print volume in the office will decline as more and more people work from home. With the increase in sales of inkjet printers for remote working and learning, however, we have been able to reconfirm that paper is still essential.
“Going forward, we will support remote working, from both a hardware and software perspective, by providing security and payment methods suitable for home and shared offices. Additionally, we will supply products that respond to the needs of the market, leveraging our strength, which comes from having both laser and inkjet printing technology, in our line-up that ranges from MFDs to home-use printers.”
Looking at Canon’s MFDs section, hardware sales were impacted throughout the second quarter, especially in April and May. Office Laser printer hardware sales also were “significantly below” those of last year. For consumables as well, print volumes declined as the number of people in offices declined.
For inkjet printers, in the second quarter, amid continuing measures that restrict the movement of people, Canon saw an increase in home printing opportunities, particularly in developed countries. As a result of this and Canon increased sales of both hardware and consumables significantly. As for the second half of this year, although Canon says that it expects demand for hardware to settle down, it expects sales of consumables to continue to expand, driven by increased printing at home. As a result, Canon expects net sales for inkjet printers to increase for the full year.
