The numbers are now out and the major press conference over, so it's time to report how Nikon did for their last fiscal year (April 1, 2009 to March 31, 2010). As usual, Nikon did slightly better than their last forecast (made in February), but overall the numbers were down from the year previous. Sales were down almost 11% and Nikon went from profitable to unprofitable. Nikon attributes much of that swing from profit to loss to the appreciation of the yen, but their Precision division business continued to be weak and large write-downs were made there early in the year.
Just how weak was Precision? A -59 billion yen loss on 150 billion in sales, though again much of that was inventory write-down. Still, the number of stepper units sold plummetted by 43%.
Meanwhile, the Imaging side (cameras, lenses) acheived a reasonable result, with a 9% operating profit on 570 billion yen (which represents a drop of about 5% year-to-year). Nikon sold 3.67 million DSLRs (13% more than last year; Nikon attributed it to strong sales of the D3s, D3000, and D5000), 5.45 million lenses (12% more than last year), and 11.5 million Coolpix (11% more than last year; Nikon attributed this to the S220). Nikon calculated its market share in DSLRs last year at 34%, and its Coolpix share at 11% of the market. Still, the continued pressure on prices takes away some of the sheen of the reasonably strong unit volumes sold. Simply put, Nikon is selling more and getting less. As you might have guessed from product shortages, Nikon has been reducing inventories, too. The Imaging division's inventory at the end of the year was only about two-thirds the size it was two years ago. Nikon is running very lean at the moment.
I haven't seen the Imaging division's geographic breakout yet, but overall the company relied even more on North America for sales last year than it did in the past (31.2% versus 29.7%). Asia/Oceanic is declining, Europe showed smallish growth, and Other grew quickly, but is still small (2.1%).
Nikon's goals for the close term are simple: become profitable again this year and achieve a sustainable growth beginning next fiscal year. But what does that mean in terms of cameras? Would you believe 15% growth in unit volume of DSLRs? A bit unbelievable given the current lineup, isn't it? Looking closer at the estimated numbers, we must have at least two new DSLR models coming before October rolls around, otherwise the numbers don't make sense to me (remember, we've already made it through half of Nikon's first quarter). Moreover, the numbers are back-loaded in the year (partly because Christmas falls in their third quarter). Nikon's guess at market share for the coming year is 35%, or basically the same as last year. They'll need several more great products to achieve that, I think.
Nikon also expects a 13% growth in lens sales and a 9% growth in Coolpix sales. How does Nikon suggest they'll achieve all this growth? "Development acceleration of new generation..." and "rapidly growing emerging markets." Oh, and one other factor that's important to most of you reading this: Nikon expects the dollar to be 90 yen and the Euro to be 120 yen during the year. Strong fluctuations off those numbers and either profits or prices have to change.
One thing that struck me in reviewing all of Nikon's filings and the press conference transcipts is that Nikon's statements of "risks" seem boilerplate and dilluted. There is much more at risk to Imaging than is stated (see next story).