Océ reports profit and growth of printer sales in Q3
Friday, October 01, 2010
Press release from the issuing company
Highlights third quarter:
Comments by Rokus van Iperen, Chairman of the Board of Executive Directors:
Our revenues grew by 6% to € 669 million, although organically revenue remained stable. Nonrecurring revenue grew, for the first time in ten quarters, by 5%. This growth came primarily from Europe and emerging markets. Recently introduced, innovative printers, like the Océ JetStream 1000, the Océ Arizona 550 GT and the Océ PlotWave 300, contributed substantially to the improved printer sales. Recurring revenues declined by 2%.
We increased our EBIT due to better utilization of the factories as well as the positive impact of our action program 2008-2010. We have returned to net profit, although realizing the level is still modest.
In the third quarter good progress was made regarding cross selling of Canon products via Océ, as well as preparing integration in various regions and functions. These developments are set to continue."
Group results third quarter 2010
Our share of color grew to 36% of revenues, up from 30% in the same period last year.
Non-recurring revenues increased 12% to € 193 million. The organic increase was 5%. This was the first quarterly growth for 10 quarters. The growth came mainly from Europe and emerging markets.
Recurring revenues increased 4% to € 476 million. The organic decline was 2%, in line with the second quarter.
Gross margin and operating income
OBS gross margin increased by 0.3%, mainly due to changes in the business mix. The remaining 0.2% improvement was the result of a group mix effect.
Normalized operating expenses amounted to 35.7% of revenues (2009: 35.9%), due to the impact of the action program.
Net R&D capitalization amounted to € 5 million, which is € 9 million lower compared to the third quarter of 2009 (€ 14 million).
On balance, normalized operating income amounted to € 16 million (2009: € 5 million). Operating income amounted to € 13 million (2009: € –25 million).
Finance expenses and net income
Balance sheet and RoCE
Free cash flow
Update cooperation with Canon
In the small format business, implementation started during the quarter. Amongst others, Océ now sells Canon imagePRESS C 7000, Canon imageRUNNER ADVANCE 8000 and Canon imagePROGRAF printers as well as Canon printers connected to Océ PRISMA software.
In the meantime, Océ customers in the US and Europe started buying Canon office and production printers through the Océ sales channel, at the same time ensuring support of the Océ service technicians for maintenance of Canon's equipment.
For the wide format business, a joint project has started to determine the cross sales opportunities in which both Canon and Océ can deliver a stronger product portfolio to their customers. Canon will also sell selected Océ high volume products in certain of their markets and channels.
In the fourth quarter, Océ is participating in Canon Expo; a global technology event, being held in New York, Paris, Tokyo and Shanghai (spring 2011), highlighting major innovations in printing and document management, amongst others.
SBU results third quarter
Digital Document Systems (DDS)
Based on recently issued 2009 product placement data by industry analyst firm InfoTrends, Océ continues to lead the continuous feed market in the US and Western Europe with a 26% share, including inkjet and toner-based technologies. During 2010, Océ received a significant number of orders in this segment, also for its new Océ JetStream 1000 printing system.
The Océ JetStream 1000 is perfectly suited for transaction, direct mail, TransPromo, digital book and manual printing and produces 1010 A4 duplex pages per minute.
In the office segment, Océ and Canon have jointly designed a go to market strategy. In the US, Océ has started selling Canon office printers. Prior to yearend, Océ will offer Canon office printers to all its customers worldwide.
Non-recurring revenues amounted to € 126 million. Organically, revenues increased by 2%.
Recurring revenues amounted to € 249 million. Organically, revenues declined by 2%. This was due to lower print volumes and subsequently lower revenues in office and black & white continuous feed. DDS grew its revenues in production cutsheet and continuous feed color.
Normalized operating income improved to € 3 million (2009: € –3 million), due to cost savings and better utilization in the Venlo and Poing factories.
Wide Format Printing Systems (WFPS)
Revenues in WFPS amounted to € 180 million. Organically, revenues were in line with the prior year. The share of color increased to 50% (2009: 45%), mainly as a result of the newly-introduced Océ ColorWave 300 and Océ CS2400 color systems for the technical documentation market.
To further strengthen its color portfolio for the wide format graphics market, Océ started selling its highspeed Océ Arizona 550 XT flatbed printer which has double the speed of the Océ Arizona 350 XT system.
Non-recurring revenues amounted to € 67 million. Organically, revenues increased by 12%. Growth occurred in almost all markets, with highest growth in Asia.
Recurring revenues amounted to € 113 million. Organically, recurring revenues declined by 3%.
Normalized operating income was € 9 million (2009: € 6 million) thanks to cost savings and better utilization of the Venlo factory.
Océ Business Services (OBS)
Normalized operating income improved to € 4 million (2009: € 2 million), due to improved gross margins and tight operational expense management.
Canon and Océ will continue to work towards creating the best combination in the printing industry. The priorities for 2010 remain unchanged and encompass capturing cross-selling opportunities, cooperation in technology and product development and preparing integration.
Océ's fourth quarter 2010 will consist of four months as Océ will align financial reporting with Canon's, consequently starting its new fiscal year at January 1, 2011. Results on fourth quarter and full year 2010 will be disclosed by the end of January 2011.
Board of Executive Directors Océ N.V.
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