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Fuji hit by big customer ‘deferments’

Fujifilm Australasia’s past two annual reports paint a picture of a company which has encountered a significant drop in sales, turning a healthy profit in 2011 into a small loss in 2013.

The figures above relate to Fujifilm Holdings consolidated financials for a financial year ending March 31.

Even though Fujifilm has managed to bring its expenses (cost of sales) down by around 25 percent between 2011 and 2013, it hasn’t been enough to keep the company in the black.

In its 2012 Director’s report Fujifilm attributed its strong performance in 2011 ‘mainly to higher than normal imaging hardware sales as our major customers replaced equipment which was at the end of its useful life,’ while net profit fell in 2012 due to restructuring activities which were made necessary due to difficult trading conditions.’

In the 2013 Directors report, the 16 percent drop in revenue was attributed ‘mainly to the tough retail trading conditions which have adversely impacted our customers in-store and online photographic printing and gifting business.

‘As a result,’ the report continues, ‘certain of our major customers have deferred upgrading or replacing their photo imaging hardware.’

Given the two Directors reports paint an accurate picture, they show just how tightly the company has tied its fortunes to decisions by its two major customers, Big W and Harvey Norman. In 2011 major customers upgraded equipment and Fujifilm turned a profit. In 2013 when they deferred upgrades, Fujifilm suffered.

The 2013 report also noted that the slump in digital camera sales (‘replaced by the improved camera capability of smartphones’) had an adverse effect.

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