Fujifilm Sees 2016 on Target at Close of Nine-Month Period Despite Shrinking Margins in Document Solutions

On January 27, Fujifilm announced financial results for the third quarter and nine-month period ended December 31, 2015. Comparing Fujifilm’s results for the nine-month period to that a year ago, the company reported increases in both revenue and operating income, although net income fell year-over year. But that is only part of the story. It seems Fujifilm’s results have worsened over the course of the fiscal year ending in March 2016. The firm’s first quarter was strong, and the company delivered revenue, operating income, and net income growth.

In the second quarter, Fujifilm’s revenue and operating income growth slowed, and its net income declined. More recently, in its fiscal third quarter, while Fujifilm’s operating income was up less than 1 percent year-over-year, revenue decreased and net income fell nearly 30 percent.

There were signs of weakness in the company’s Document Solutions business, which is responsible for office copiers and MFPs, printers, production printers and services, office services, paper, and consumables. Fujifilm’s Document Solutions business is operated by Fuji Xerox Co. Ltd., which was founded as a joint venture between Fuji Photo Film and Xerox Corporation, and is a manufacturing partner for Xerox.

Despite continuing pressure from the weakened yen and the slowing Chinese economy and weak economic conditions elsewhere in Asia, among other factors, Fujifilm sees its overall progress for fiscal year 2016 as continuing smoothly and is not planning to make any major turns in its strategy for the year.

Company Results

For the third quarter, Fujifilm had revenue of ¥615.4 billion ($5.2 billion), down 2.7 percent from ¥632.3 billion in last year’s third quarter. Operating income was up 0.8 percent year-over-year, climbing from ¥52.8 billion in the prior-year period to ¥53.2 ($448.1 million) in the third quarter of the current fiscal year. Net income fell sharply, however. For the three-month period, Fujifilm’s net income was ¥37.4 billion ($315.0 million), down 29.8 percent from 53.3 billion in the year-ago period.

For the nine-month period ended in December 2015, Fujifilm reported revenue of ¥1.841 trillion ($15.5 billion), up 1.5 percent over ¥1.815 trillion in the previous nine-month period. This increase was credited to sales increases in a number of its business, including its document solutions business. The company also saw its operating income increase 7.6 percent from ¥124.4 billion in the previous nine-month period to ¥133.9 billion ($1.1 billion) on improved profitability of each of its businesses.

Net income attributable to Fujifilm Holdings for the nine-month period shrank 10.1 percent year-over-year, falling from ¥93.9 billion to ¥84.4 billion ($710.8 million). The firm laid the blame on a tough comparison, as in the year-ago period Fujifilm saw a gain on revaluation after making Japan Tissue Engineering a consolidated subsidiary. Excluding the impact of this, net income attributable to Fujifilm Holdings increased by 16.2 percent.

Document Solutions Business

In its third quarter, Fujifilm’s Document Solutions Business reported ¥275.9 billion ($2.3 billion) in revenue, down 3.2 percent from ¥285.1 billion in last year’s third quarter. Meanwhile, the group’s quarterly operating income totaled ¥19.6 billion ($165.1 million), a sharp 17.0 percent decrease from ¥23.5 billion in the year-ago period. The group’s Q3 operating margin shrank from 8.2 percent in the year-ago period to 7.0 percent for the three-month period ended in December.

For the first nine months of the current fiscal year, Fujifilm’s Document Solutions Business saw revenue of ¥868.5 billion ($7.3 billion), up a modest 1.5 percent from ¥855.5 billion in the comparable period one year ago. The segment’s operating income, however, was down 7.3 percent to ¥67.9 billion ($571.9 million) from ¥73.2 billion. For the nine-month period, operating margin was 7.8 percent, down from 8.5 percent in the first nine months of the previous fiscal year.

Fujifilm said its Document Solutions business saw an increase in revenue during the nine-month period on continuing strong sales in the Asia-Oceana region, but profit nevertheless decreased due to currency pressures caused by the depreciation of local Asian currencies. With the U.S. dollar remaining strong and local Asian currencies depreciating, the increasing cost of imports negatively impacted the business. Fujifilm does about 40 percent of its business domestically and does another 60 percent overseas.

In its office products business, the company reported an uptick in overall sales volume, strong sales of full-color models due largely to replacements at major domestic convenience stores, and strong sales of monochrome models in Asia-Oceania. However, the sales volume of export shipments to Xerox decreased as Xerox’s Document Technology segment slid. Fujifilm’s office printers business also saw a sales volume decrease, despite a strong performance by monochrome models in the Asia-Oceana region.

The production services and global services business both saw growth. Global services saw growth in Japan and the Asia-Oceana region thanks to an increase in the managed print service business, while overall sales volume increased for the production services business on strong sales of on-demand publishing systems and monochrome production printers.

Digital printing devices and industrial inkjet print-heads also did well for the company, with an overall sales increase for these products lifting Fujifilm’s Graphic Systems business, which is housed within its Information Solutions business.

Going forward, Fujifilm plans to expand sales in its global services business and other areas of growth. It will also seek to expand its sales in the Asia-Oceana region. The company will also look to improve profitability by adding and accelerating cost-cutting measures.

That Fujifilm’s Document Solutions business reported a decrease in sales of exports to Xerox is notable because, for many quarters now, the group has reported increased exports to Xerox. Xerox, however, has been struggling with declining revenue across its Services and Document Technology segments, and in the third quarter of 2015, the company reported its first quarterly net loss since 2010. Xerox is scheduled to report its fiscal year 2015 results on Friday, and it remains to be seen what impact its exploration of strategic alternatives and the new involvement of Carl Icahn will have on Xerox’s performance and its Document Technology strategy.

Forecast

Fujifilm left its forecast for fiscal year 2016 unchanged from its initial forecast. The company said that consolidated performance for its third quarter of fiscal year 2016 proceeded smoothly for the achievement of its forecast and that it would continue to promote its growth strategies. For the fiscal year ending on March 31, 2016, Fujifilm anticipates revenue of ¥2.58 trillion, operating income of ¥190.0 billion, and net income of ¥120.0 billion. Compared to the previous fiscal year, this would represent a revenue growth of 3.5 percent, an increase in operating income of 10.2 percent, and a net income increase of 1.2 percent.

Read Fujifilm nine-month financial results.

*U.S. dollar amounts are translated from yen using the XE currency exchange rates as of January 27, 2016 (¥118.715 = $1). These conversions are for the reader’s convenience only.

BLI Analysts Honor Xerox with Document Imaging Software Line of the Year Award

Buyers Laboratory LLC (BLI), the world’s leading independent evaluator of document imaging software, hardware and services, today announced that Xerox Corporation is the recipient of BLI’s “Document Imaging Software Line of the Year” award for 2016—the third time in a row Xerox has captured the coveted honor. Given once a year, this award recognizes the document imaging vendor that offers the most complete and robust software portfolio across the range of application categories BLI covers on its bliQ subscription service.

“Throughout the year, BLI analysts delve into the software products offered by each leading OEM via research and hands-on evaluation of the products. And three times in a row now, the unmatched Xerox portfolio of in-house-developed software and applications from third-party partners has come out on top,” said Jamie Bsales, Director, Office Workflow Solutions Analysis, at BLI. “And in addition to being ranked best overall, Xerox also had the best showing in several key software categories, including print management and mobile printing applications.”

To determine the Software Line of the Year award recipient, BLI’s experienced staff of analysts considers the imaging software each leading printer and MFP OEM officially sells and supports via its direct and independent sales channels. The OEM’s own products, as well as products from partner ISVs (independent software vendors), were taken into account in categories that include Document Management, Document Capture & Workflow, Print Management, Device Management, Mobile Printing, MFP Connectors and others. BLI’s analysis rates the overall excellence of those applications that have been submitted to BLI’s lab for evaluation in key areas including feature set, ease of use and value, as well as the completeness of the OEM’s software portfolio.

Xerox earned points for several of its own class-leading software offerings, including Xerox App Studio for creating MFP-embedded connectors to streamline document capture/delivery chores, Xerox Mobile Print Solution and Mobile Print Cloud for enabling mobile print functionality across an entire organization, Xerox FreeFlow family of production-print solutions, and the Xerox DocuShare line of document management products. Further strengthening its hand were the myriad best-of-breed partner applications Xerox sells, such as Nuance Communications’ Equitrac print management offerings and AutoStore and eCopy ShareScan document capture/processing routing products, Print Audit’s accounting and fleet management tools, XMediusFAX Cloud MFP fax suite and a host of others.

“Our customer’s workflows are continuously changing and becoming more complex, and therefore they need solutions that deliver the highest levels of productivity and simplicity. Xerox’s response to these ever-changing customers’ environments is the ConnectKey ecosystem, which is the most advanced and flexible continuum of hardware and software solutions in the industry,” said Rui Ferreira, Director/General Manager of Global Office Solutions of the Office and Solutions Business Group at Xerox. “Xerox continues to deliver the simplest and most powerful office solutions that evolve with customer needs, enhance mobile and cloud workflows, and enable unparalleled productivity. Receiving the BLI ‘Line of the Year’ award for three consecutive years validates the ongoing commitment by Xerox and our solution partners to enable the highest level of productivity for our customers and channel partners.”

Five Steps To Your Best Ever Business Plan

For many people, moving into a New Year is associated with making resolutions for change. In business, it’s also a perfect opportunity to take stock – then armed with that knowledge, make plans for the year ahead.

So with that in mind here’s a 5-step guide to getting things off to a flying start in 2016.

Do some navel gazing

Time to review last year’s business plan (hopefully it’s covered in virtual coffee stains, is well thumbed and not stuck in an online filing cabinet gathering dust). Which bits of your plan really worked well this year? Can you recreate this success again in the year ahead?

It’s also worth having an honest appraisal of things that didn’t quite work out as you planned. Sometimes, regardless of how tenacious and single-minded you are about achieving a goal, it may turn out to be unrealistic. The real skill is in knowing what is worth pursuing and what needs to be dropped so you can invest your time and energy in more fruitful projects/products/business relationships.

Know your customer

The better you know your customers the easier it is to anticipate their needs and offer them the products and services that add the most value to their business.

It costs 6-7 times more to find and acquire a new customer than retain an existing one* so selling to existing customers and gaining a larger share of wallet makes sense.

But how?

It may be as simple as recording details of conversations on your CRM and creating alerts that ensure you follow up at appropriate times. It may mean engaging at a more strategic level to understand their future plans and be part of them. It certainly means knowing the key contacts names, what they are responsible for and developing a relationship with them.

Knowing your customer will also help you build accurate buyer personas, making your prospecting work more targeted.

Know your market

Do some research into your market and make some New Year predictions of your own about the sweet spots for your business in 2016.

For example, we’re starting to see a rise in A4 colour multifuntion printer (MFP) demand along with the steady rise in demand for mobile print solutions. Does this open up a new opportunity for you in providing additional services?

It’s also worth monitoring the market for new competitors and their offerings. The more that loyal customers view your business as a trusted adviser the easier it will be to counter any threats.

Set goals and objectives

Time to bring all the above points together and set the plan for the year. First have a look at last year’s goals. Did you achieve them? Were they realistic? Set overarching objectives for your business including growth targets for existing business and targets for new business opportunities. Underpinning this will, of course, be your detailed sales plan.

Plan your promotions and offers to keep customers engaged

The other cornerstone to your business plan is mapping out marketing activity to promote your business to customers and prospects. This may include social media, pay per click advertising or web marketing and any other number of tactical activities to support the efforts of your sales team and drive inbound leads.

It may mean delving into new ground, learning something new but embrace the challenge.

Whatever your plans for 2016 we certainly wish you all the best for a successful New Year.

Our plans are to continue supporting our channel partners With a relevant portfolio of products, services and solutions that help us all build a profitable business model and offer customers the highest level of quality.

 

 

 

(*Source: Bain & Company from an article by Carlo Longhi)

 

Walk in your customers’ shoes to find ‘hidden’ revenue

We all know the market in which we operate is changing. It’s always been competitive with many players striving to win market share, but over the years, the tactics have changed. Competing via price will not guarantee you a sale and could seriously erode your profit margins. The New Year presents an opportunity to find a new and sustainable way to unlock the incremental revenue possibilities in each and every one of your customer accounts. But how?

Try on your customers’ shoes in 2016

When you put yourself in someone else’s shoes, you see the world through their eyes and see their pains and agenda. From a business perspective, it can be a real strategy for changing your sales dynamic – away from the supplier/buyer relationship to becoming trusted advisor. So why not try something slightly different this year with this 5-step approach:
1 Don’t get stuck in a rut

By this I mean don’t keep banging on with the same account contact behaviour. You may habitually call each customer every six weeks to find out if they need anything regardless of their buying history. Examine this routine, talk to your customers and plan your call schedule according to what they tell you.

2 Get to know your customers better

This could be as simple as talking in more depth to your contacts, it may be scheduling bi-annual calls with the business owner and listening to their plans and ambitions. It may even be to arrange a working breakfast or evening networking event to discuss plans in a more relaxed setting. The key thing here is to ask questions and listen to the answers, for example if they are buying hardware from you, but not supplies, ask why.

3 Be a market expert

Understanding the market in which your customers operate gives you a real insight into how their businesses work: the seasonality of trade, competitive threats and opportunities and any external regulatory or other pressures they may be under. All of these things will affect how, what and when you sell products, solutions or services.

4 Build a key account plan

It may seem like overkill but using the knowledge you have built up about each customer account to document a sales plan is a crucial weapon in your armoury. A single repository that lays out the key facts about their market and business priorities along with associated selling strategies.

5 Walk in their shoes

Once you have a better understanding of their business, a more open and sharing relationship with your customer will follow. And then you can start to walk in their shoes: anticipate their needs, add value and change their perception of you from supplier to trusted partner.
Use your new knowledge of your customers’ industries, market trends and business plans to pre-empt their needs, save them money, time and energy and help them become more successful. Not only will you change their perception of your company, inevitably it will also fuel your growth as a business in 2016.

Oldline photographic company looks to keep transforming itself

Japan’s Fujifilm Holdings has transformed itself from a photographic company into a diversified conglomerate that produces business equipment, pharmaceuticals and medical machinery.

In the early 2000s, two-thirds of Fujifilm’s profit came from photographic-sensitive materials. Once digital cameras decimated that market, however, the company underwent a major restructuring, cutting jobs and making 720 billion yen ($6.06 billion) worth of acquisitions.

The company is expected to post an operating profit of 190 billion yen in the year through March, 92% of the record profit it logged in the fiscal year before the 2008 global financial crisis.

Breaking down the company’s profit, the imaging solutions segment accounts for roughly 10% of the total. Currently, the document solutions segment operated by Fuji Xerox, which came under the wing of Fujifilm Holdings in 2001, generates nearly half of total profit. The remaining 40% comes from the information solutions segment.

As for return on assets by segment, document solutions led the way in the last fiscal year at 8.3%. The imaging solutions segment, which recovered from an operating loss, had a return on assets of 6.4%. The reversal came about as the division shed excess assets.

Next growth area

While market watchers praise Fujifilm for successfully transforming its business, it will not be easy for the company to further improve profit margins in the document solutions business.

For one thing, the global market for document solutions is now mature.

There is more growth potential in the information solutions segment, which includes mammography and other medical equipment. The segment’s return on assets is in the 5% range, which shows room for improvement.

Mammography equipment is likely to lead the way, along with pharmaceuticals and regenerative medicine.

The company is putting more sales muscle behind its medical equipment in Turkey, Egypt and Morocco in the belief that “improvements of medical infrastructure is yet to come” to the region, said Shigehiro Nakajima, president and chief operating officer. The company is also mulling the acquisition of Toshiba Medical Systems, a medical equipment subsidiary of Toshiba.

Xerox Placed as a Leader in Gartner’s 2015 Magic Quadrant for Managed Print and Content Services

Xerox (NYSE: XRX) has been positioned by Gartner, Inc., in the Leaders Quadrant of the 2015 Magic Quadrant for Managed Print and Content Services Worldwide1 for the eighth consecutive year. In this report, Gartner examines the expanding role of managed print services (MPS) along with managed content services (MCS), which is tightly coupled with MPS and focuses on communications inside of an organization. In the new report, Gartner positioned Xerox as furthest for completeness of vision and ability to execute.

Xerox’s Next Generation MPS offering has three main stages – assess and optimize; secure and integrate; automate and simplify – which are designed to bridge the paper and digital worlds so customers can print more cost effectively, conveniently and securely.

“How content is used, shared and saved in today’s mobile centric work environment is a driving force behind implementing a successful MPS and MCS approach,” said Joseph Hanania, senior vice president, Global Document Outsourcing, Large Enterprise Operations, Xerox. “We believe our leadership position in this Gartner Magic Quadrant is validation that our strategy is helping our customers streamline and optimize their paper-based business processes to improve employee productivity and help meet sustainability goals.”

Recent examples of Xerox’s three-pronged MPS strategy include:
•Assess and Optimize: The Xerox Print Awareness Tool – a patented system that encourages workers to be more environmentally responsible – uses gamification technology to help enterprises reduce their carbon footprint and motivate employees to do their part.
•Secure and Integrate: Analytics are driving smarter print decisions, and Xerox is helping counsel businesses on how to optimize their print environments with the Xerox Secure Print Manager Suite with User Analytics, which provides an analysis of who is printing what, when, how much and where.
•Automate and Simplify: Xerox continues to bolster its industry and cross-industry offerings, recently announcing Workflow Automation solutions for the insurance industry and HR departments, two areas of business with data-intensive workflows to help customers avoid document management bottlenecks and inefficiencies. Additionally, new releases of office and personal productivity solutions with Xerox Digital Alternatives and Xerox DocuShare 7.0 improve efficiency by automating document processing, helping deconstruct everyday office procedures to alleviate employees of the time-consuming, manual processes like sharing, annotating, storing and securing documents and data.In 2015, Xerox was also named as the worldwide MPS market leader for the sixth consecutive year by Quocirca Ltd.2, and as a leader in the IDC MarketScape U.S. Managed Workflow Services Vendor Assessment.3

Notice Regarding Information Security of Multifunction Devices

On January 6, 2016, an article was published concerning the security vulnerability of internet-connectable multifunction devices. Please be assured that under normal circumstances your Fuji Xerox multifunction devices are installed within a secured network with appropriate security settings such as a firewall, so your information is safely secured.

Should you have any inquiries about the settings of your multifunction devices, please contact our sales representatives.

For safer use of Fuji Xerox multifunction devices, we recommend our customers to undergo security measures such as setting a password. The below PDF is for your reference on how to set such security measures.

How to set your Fuji Xerox multifunction device to ensure information security. [PDF:443KB]

• NotePlease note that the linked pages in this news release or other information are subject to be shut down without notice.