By February 7, the major OEMs of the print and imaging industry had released October through December 2022 quarterly financial results. Once again, the notable exception is HP, which released its results for that period on February 28. Below are analyses and summaries of individual OEMs’ performance reflecting the fourth calendar quarter and the full calendar year of 2022 based on the quarterly results as reported by the companies, regardless of the type of fiscal year calendar they may use.

During 2022, the OEMs reported in this article made up 90% of worldwide industry revenue, with Canon, HP, and Ricoh holding just under 65% of the worldwide industry revenue market share.

Canon

Canon released its fourth-quarter and year-end financial results on January 30.

Consolidated Results:

In the fourth quarter, Canon’s consolidated revenue (in yen) grew 21% over the same period in 2021, up by almost ¥202 billion. However, when converted to USD currency, the results reflected a 2.1% decline. The yen appreciation impact continued, with the yen almost 24% stronger in 4Q 2022 than in 4Q 2021. Consolidated operating profit grew almost ¥23 billion (39%) or $63 million (12%). Full-year consolidated revenue results were up almost 15% in yen but down 4% in USD, with full-year operating profit up in both yen and USD at 25% and almost 5%, respectively. Canon was keen in pointing out that the ¥4 trillion in full-year sales revenue was the first time since 2017 the company achieved that level, and that while older core businesses of office equipment and cameras had declined during that time, the new businesses of network cameras and medical have grown to exceed 25% of 2022 revenue showing “steady progress we (Canon) have made in transforming our business portfolio.” Looking ahead to 2023, Canon is aiming for ¥4.3 trillion in consolidated sales revenue (up 6.3% from 2022), operating profit of  ¥360 billion (up almost 2%), and raising net income by almost 11%.

The results for the Printing business unit, covering office, prosumer (laser printers and business inkjet), and production printers, were as follows:

In the printing business segments, Canon enjoyed a year-over-year (YoY) quarterly revenue growth of just shy of 23% in yen. However, the yen’s weakness pulled the USD conversion down to a slightly less than 1% decline. The printing business quarterly operating profit was not as robust, with consolidated results only up around 9% from a year ago in yen but down double digits (12%) in USD $ value.

For the year, the printing business experienced unit sales growth, which drove revenue in yen up by close to 17%; down by a little over 2% when converted to USD. Again, the weakness of the yen impacted results. However, higher parts and logistical costs throughout the year, along with a decline in consumable sales, due to inkjet printer use at home declining as more people returned to the office, pushed profit down by 6% in yen or almost 21% in USD value.

The office segment of the printing business experienced a 6% unit growth rate, with demand for A4 models increasing and despite parts and components being in short supply to produce needed quantities of product. By the fourth quarter, print volume had achieved approximately 80% of pre-COVID levels. In the Prosumer segment, laser printer unit sales were up 9% and inkjet unit sales were up 17%, reflecting the focus the company had on upping production volume. Consumables had a soft third quarter but recovered in the fourth quarter to provide an overall sales increase in this segment. Production printing revenue increased 12% year over year and, in the fourth quarter, quarterly production print revenue exceeded ¥100 billion for the first time.

For 2023 Canon expects demand for office MFDs to remain strong, with print volumes remaining at 2022 levels. In the prosumer segment, the company has concerns that demand for laser printers and inkjet printers may be impacted as fewer people work from home but see an opportunity in expanding sales of refillable ink tank models. As for production, Canon continues to be confident in its place in the production print space with introductions of new products and expanding dealer network increasing unit sales and installed base. With those outlooks, Canon forecasts growing 2023 Printing Business revenue by almost 5% from 2022 and Printing Business operating profit by just over 9% (based on yen).

Epson

On January 31, Epson released its quarterly results (its third quarter FY2022 results).

Consolidated results:

Epson’s quarterly consolidated results in net sales showed a 22% increase (approximately ¥65 billion) over the results in the same quarter of 2021. With the weakening yen, that converts to a slightly more than 1% decrease in USD value. In regard to quarterly consolidated operating profit, the company continues to work through higher costs for materials and parts, transportation, and other production costs, and despite price hikes, this caused significant declines in operating profit (in both yen and USD values) for the quarter. For the calendar year, covering the fourth quarter of Epson’s FY2021 and the first nine months of its FY2022, consolidated sales in yen were up above 13% but not enough to offset the depreciation the yen has experienced and translated to a 5% decline in USD value. Operating profits were affected by the same factors as above and showed negative growth in both yen and USD of almost 6% and 21%, respectively.

Office & Home and Commercial & Industrial Printing segments (Printing Solutions):

Epson’s Printing Solutions business represents just under 70% of the company’s consolidated business. Unsurprisingly, quarterly revenue in this business area was similar to consolidated results: up in yen but down in USD value. Operating profit was also down compared to the same quarter a year ago. For the calendar year, covering the fourth quarter of FY2021 and the first nine months of FY2022 for the company, sales revenue was up by 11% in yen but down a little over 7% in USD $ value due to the yen’s depreciation from last year. Operating profit was down in both yen and USD $ value.

In its nine-month review of FY2022 (April through December 2022), Epson pointed out that office and home printing business increased for the period, with high-capacity ink tank printers unit sales increasing while ink cartridge units decreased. Consumable revenue also increased slightly, driven by sales of ink bottles for ink-tank printers. Commercial and industrial printing revenue also increased as order backlogs were fulfilled and price hikes were instituted. In this area, consumable sales also increased slightly, with robust demand in North America.

HP

HP released its October through December 2022 quarterly earnings report on February 28, 2023.

Consolidated Quarterly results for Personal Systems (computers and peripherals) and Printing:

For the quarter Personal Systems (PS) unit sales were down 28% compared to the same quarter of 2021 with Consumer PS down 33% and Commercial PS units down 24%. Unit sales decline are reflected in a PS revenue decline of $9.2B (24%) over the same time as last year primarily due to “continued market softness … currency and an aggressive pricing environment.” Combined with Printing revenue and operating results, consolidated results show a $3.2B (19%) decline in revenue for the quarter when compared to the same period as 2021 and a 24% decline in operating profit. For the full calendar year comparisons of 2022 and 2021 (January through December 2022) our tracking shows consolidated revenue decline of almost 8% and operating profit decline of almost 11%.

HP has identified Key Growth Areas, which are HP businesses that are expected to grow faster than HP’s core business in the long term. These include:

• Hybrid Systems Video conferencing solutions: Cameras, Headsets, and Voice and related software capabilities
• Gaming: Gaming PCs (Omen, Victus, etc.), HyperX and gaming accessories
• Workforce Services & Solutions: Managed services (Managed Print Service and Device-as-a-Service), digital services and lifecycle services
• Consumer Subscriptions: Instant Ink, other consumer subscriptions and consumer digital services
• Industrial Graphics: Large Format Industrial, PageWide Press, Indigo and PageWide Industrial packaging solutions and supplies
• 3D & Personalization: Portfolio of additive manufacturing solutions and supplies including end-to-end solutions such as molded fiber, footwear and orthotics

Results for the Printing business segment:

For the reported quarter, Printing represented 33% of consolidated revenue and 64% of consolidated operating profit. For the calendar year those ratios were 31% and 61%, respectively.  

In the Printing business segments, total printing revenue was down almost 5% from the same quarter in 2021. Total hardware unit sales, in both Consumer and Commercial printing segments, were up. However, supplies revenue was down 7%.  HP’s cost management programs were able to minimize operating profit challenges by holding the quarterly operating profit decline to less than half of a percent. For the calendar year 2022 Printing revenue was down just over 6% from 2021 while operating profit was up 3.5%.

Konica Minolta

On February 2, Konica Minolta reported its results for October through December 2022.

Consolidated results:

The fourth quarter of 2022 was Konica Minolta’s third quarter of its fiscal year ending March 2023. Consolidated results showed year-over-year improvement in both net sales revenue and operating profit compared to the fourth quarter of 2021. Net sales revenue in each business segment (Digital Workplace, Professional Print, Healthcare, and Industry) was up, creating growth of 34% (approximately ¥161 billion) or 8% when converted to USD. Consolidated operating profit was significantly different than what the company reported for the fourth quarter of 2021. Results for the calendar year (reflecting KM’s fourth quarter of FY2022 and the first three quarters of FY2023) reflect about 18% growth in net sales revenue as reported in yen. Due to the weakening of the yen over the year, this converts to a USD value decline of almost 2%. However, unlike the calendar year 2021, the company experienced positive operating profit results.

Results for  the related business to the print industry – Digital Workplace Business and Professional Print Business:

The printing-related segments continue to represent more than 70% of KM’s consolidated business. In the fourth quarter of 2022, net sales in both yen and USD were up significantly from the same period last year at almost 43% and 15%, respectively. The company revived quarterly operating profit for the quarter as compared to the same period last year. For the calendar year, sales revenue was up in yen value but down slightly in USD value. Again, profits achieved significant positive levels as compared to the calendar year 2021 results.

Specifically, in the nine months of Minolta’s fiscal year 2023 (April through December 2022), the company attributed positive results in the Digital Workplace Business segment to order backlog clearance as production recovered and increased unit sales of products, particularly A3 and color models. Consumables and service also saw increases as print volumes recovered due to employees returning to work at offices. In the Professional Print Business segment, Konica Minolta noted steady demand for digital print presses along with production, and shipping recovery increased both color and monochrome product sales to 125% and 110%, respectively. Print volume continues to recover in commercial printing and the supply of toner is steadily recovering from the plant accidents of 2021. Overall non-hardware revenue in commercial, label, embellishment and textile press “surged,” contributing to growth.

Looking at the end of its FY2022 (March 2023), Konica Minolta outlined concerns about the sluggish European economy, a possible downturn in the US, and continued worries about inflation. However, the company expects improvements in procurement, particularly in semiconductors, and logistics, enabling continued production and transportation capacity. With these factors, the company maintained its FY2022 sales revenue and operating profit guidance.

Kyocera

On February 1, Kyocera published financial results for October through December 2022, the third quarter of its fiscal year 2023.

Consolidated results:

Quarterly consolidated net sales results for Kyocera showed an approximate ¥35 billion, or a little over a 7% increase over the same period in 2021. Due to the yen being weaker in the quarter, as compared to the same period the year before, this converts to a 13% decline in USD value. In both yen and USD value, consolidated operating profit was down in comparison to the fourth quarter of 2021, with Kyocera citing increased raw materials and logistics costs as well as decreased sales in its Communications unit and slowing demand for smartphone components. Calendar year results, spanning Kyocera’s fourth quarter of FY2022 and the first three quarters of FY2023, showed a sales revenue increase year over year of ¥227 billion, or growth of almost 13%. However, again due to the weaker yen, the USD value was lower than the prior year, reflecting a 5.3% USD decline. (The company, reporting its nine-month results of April through December 2022, noted that despite lowered demand for smartphones, it achieved record high sales results for the period.) Operating profit was impacted by higher materials and logistics costs and declined from the prior year by 3% in yen and almost 19% in USD value.

Document Solutions Unit results (Printers and MFPs make up this business unit):

In Kyocera’s Document Solutions Business segment, net sales in yen increased a bit over 18% over the same quarter last year. However, with a weaker yen, sales revenue showed a 4% decrease in USD value. Higher raw materials and logistics costs affected the operating profit of the segment, decreasing both yen and USD values by almost 9% and 26%, respectively, when compared to the same period in 2021. For the quarter, Document Solutions continued to be the leading revenue contributor of Kyocera, producing 22% of consolidated revenue yet providing only about 7% of the consolidated profit.

For the calendar year 2022 (covering the fourth quarter of FY2022 and the first three quarters of FY2023 for Kyocera), Document Solutions revenue was up almost ¥55 billion over 2021, representing a yen growth of 15%. However, with a weakening yen during the year, the USD value was down by more than 3%. Calendar year operating profit for the segment, as noted before, was hit with challenges in material and logistics costs and showed a decline in both yen and USD values of 16% and 27% respectively.

Ricoh

Ricoh released its results for October through December (Ricoh’s third quarter of FY2022) on February 7.

Consolidated Results:

Ricoh’s consolidated results for the quarter showed strong sales and operating profit growth in both yen and USD when compared to the same quarter in 2021. Sales revenue was up 28% in yen, which overcame a weaker yen value position than the fourth quarter of 2021 to produce an almost 4% growth in USD value. Operating profit reflected an identical growth pattern. For the calendar year, Ricoh’s results showed an almost 14% growth in net sales revenue which, when translated to USD, reflected a decline of 5% due to the weakening of the yen throughout 2022 compared to the yen value in 2021. However, operating profit was more than quadrupled in 2022 in both yen and USD values.

Combined results for Digital Services, Digital Products, and Graphic Communications (print industry-related business segments):

The print related businesses represent close to 90% of consolidated business. For the quarter, sales were up almost ¥85 billion or about 21% when compared to the same quarter of 2021. Yet again, the weakening yen translated this to a 2% decline in USD value. Operating profit was down in both yen and USD value by almost 11% and 28%, respectively. For the calendar year, net sales revenue showed an increase of 11% in yen value, which translated to a 7% decrease in USD value when compared to the calendar year 2021. Operating profit for the calendar year 2022 was significantly higher than in 2021, rising 116% in yen value and almost 87% in USD value.

In its nine-month review of the company’s FY2022 results, Ricoh said that in the office printing area, while production of products recovered in that period, product supply was still impacted and affected its ability to clear order backlogs and shortages of A4 MFPs. Its A3 MFPs, parts, and supplies saw increased production and resulting sales. Non-hardware-related sales continue to recover moderately, and the company’s focus on selling added-value products, pricing controls, and implementing price pass-through helped secure profits in this area. Graphic Communications (production and commercial print equipment) experienced increased sales for the nine months compared to the same period of the previous year. Importantly, non-hardware sales in this area were almost back to pre-COVID levels and helped contribute to increased operating profit. Finally, Ricoh pointed out that Digital Services increased by 14.5% in the nine months and continued growth despite material shortages.

Xerox

Xerox released its  fourth quarter and full-year results on January 26^th:

In its press release, Xerox CEO Steve Bandrowczak cited “Resilient demand and improvements in supply chain conditions …” for year-over-year growth in the 2022 fourth-quarter revenue and operating profit. Sales revenue was up 9.2% from the same period a year ago and represented the highest revenue quarter since the first quarter of 2020. Operating profit returned to a positive after four consecutive quarters of operating profit losses. For the quarter, the Print and Other segment grew 11% (to $1.8B) over the same period as last year, with equipment sales reported at $554M, or 31% of the segment’s total revenue. With better product availability reducing order backlogs that drove the growth of mid-range and color A4 MFPs installations, along with recent pricing actions, equipment sales performed 44% better than in the fourth quarter of last year. Xerox’s contractual print services revenue grew less than 1% from a year ago. FITTLE, Xerox’s equipment leasing and financing solutions business, reported a revenue decline of 10% when compared to the same quarter last year. The equipment leasing and financing solutions FITTLE segment grew originations in the quarter but reported revenue of $151M, which was 10% lower than the same period last year and an operating profit loss of $5M compared to an operating profit of $25M last year.

Xerox ended the year at $7.1B compared to $7.0B in 2021, amounting to 1% growth. As to profitability, Xerox again suffered an operating profit loss this year of $328M, slightly smaller than its loss of $475M in 2021. Project Own It achieved its target of $450M in cost savings, but it was not enough to offset supply chain challenges that impacted better sales growth opportunities and inflationary conditions that pressured operating profits.

For 2023, Xerox provided an outlook of flat to declining revenue growth (low single digits) with a positive operating margin of at least 4.7%. Bandrowczak announced that 2023 priorities would be customer success, profitability, and shareholder returns. He described customer success as delivering “… more value to our clients by making it easier to do business with Xerox,” and that shareholder returns mean a “… laser-focus on cash flow generation.” On profitability, Bandrowczak said that while “Since 2018, Project Own It has been a cornerstone of our transformation efforts … for the optimization of our cost base” (more than $2B in total cost savings). Xerox is not planning to continue projecting annual cost savings going forward but believes “… the behaviors engendered by the program will aid in our continuous effort to implement a more flexible cost base and operating model.”

Summary

The print and imaging-related businesses of the OEMs in this report have faced continuous challenges since 2020. Through the significant and unforeseen downturn due to COVID in 2020, the change in demand for home office products and services as the workforce migrated from working in central offices to working from home, the accelerated digitalization of work, the material shortages and production slowdowns as factory workers stayed home, inflation, the depreciation of the yen, international strife, and more the industry has proven to be innovative and resilient. The last quarter of 2022 provided insight that efforts increasing production, pricing actions, and making the necessary structural changes to reflect the new business environment resulted in positive results. However, in most cases, yen depreciation outstripped reported yen revenue growth and translated into declines once converted to USD values. Inflationary pressures may have positively impacted the top line as price pass-through plans were implemented, yet also conspired in increasing costs and impacting operating profits. Two notable exceptions were Konica Minolta, which saw another quarter of double-digit growth in USD  revenue, and Xerox, which enjoyed 9% revenue growth.

For the calendar year all OEMs except Xerox suffered due to continued yen depreciation when it came to revenue growth in USD. Xerox, due to a good fourth quarter, saw a growth of about 1% year over year. Konica Minolta and Ricoh saw operating profits in their print and imaging-related businesses increase significantly. Konica Minolta overcame a net loss from 2021 and Ricoh increased operating profit by almost 87% over 2021. All others experienced year-over-year declines, with Xerox, unfortunately, experiencing an operating profit loss for the second year.

We see challenges that still lie ahead for the industry. However, as OEMs continue to strengthen supply chains, work at reducing production costs, regain full production capacities, and adapt to new market environments, we expect to keep seeing the industry being as innovative and resilient as it has been, not just during the past three years but throughout its history.

For the industry players reported in this article:

*NOTE: Average yen to the dollar exchange rate for analysis and summary is based on averaging the daily ¥ to $ exchange rates during the quarter as provided by Macrotrends. Therefore, some of the USD conversions and $ percentage increases or decreases summarized may or may not align with what is reported by individual OEMs.