Nikon Releases Brutal Financial Report, Lays Off 700 in Southeast Asia

After delaying the report—and publishing a revised financial forecast earlier this month—Nikon has finally released its Fiscal Year 2020 financial results. At the same time, the company reportedly cut 10% of its workforce in Thailand and Laos, laying off 700 people.

We won’t belabor the financial results: they’re bad, and we expected them to be bad, and Nikon is not the only company suffering. Here are the facts:

• Nikon as a whole reported $5.48 billion in revenue, which represents a 16.6% drop year over year.
• Operating profit came in at $62 million for 2020, an even more severe drop of almost 92% compared to last year’s report.
• The Imaging Business reported revenues of $2.09 billion, which represents a drop of 23.7% compared to last year’s results.
• Operating profit for Imaging was in the deep negative, posting a loss of $158.6 million for 2020. That’s a drop of almost $325 million compared to last year, when Nikon posted positive profits of nearly $210 million.

You can see all of the relevant slides from the financial presentation below:

The one bright spot in the presentation is the second point under Revenue, on the final slide above.

“Compared to last year, sales volumes of ML and its lenses increased,” reads the report. “Volume to sales ratio of mid-range and high-end cameras for professionals and hobbyist improved steadily, as well as IL tie ratio against camera. Online sales ratio also grew.”

This will further encourage Nikon to focus their efforts on mid-to-high range products by rounding out their Z-mount camera and lens lineup.

In the interim though, we’re already seeing the fallout from decreased camera sales. According to a report in Nikkei Asia Review published yesterday, Nikon has had to cut 10% of its workforce in Thailand and Laos, letting go of 700 employees.

In a news conference yesterday, CFO Muneaki Tokunari warned that the bleeding will not stop any time soon. “We have to prepare for two straight annual losses,” says Tokunari-san. This tracks with the financial report presentation as well. In a slide forecasting performance for the 2021 fiscal year (see below) Nikon says that the imaging business will likely not recover for some time.

To read the full presentation for yourself, or if you want to dive into the detailed numbers, head over to Nikon’s investor relations page here.

We realize that continuing to share brutal financial reports from the major companies isn’t exactly a cheerful subject, nor is it “news” in the sense that news be something surprising or unexpected. But as the economic fallout from COVID-19 continues to wallop the biggest names in our industry, keeping an eye on their balance sheets will hopefully help our readers determine who will survive, and what the industry will look like on the other side.

Image credits: Header image created using photo by Joe Shlabotnik, CC BY 2.0