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Nikon’s Q1 results show Imaging Products profits up 48% YoY, revenue nearly matching pre-pandemic results

Nikon’s high-end Z-mount cameras, such as the Z9 pictured here, have proven critical for the company in its transition from DSLR to mirrorless cameras.

Nikon has announced the financial results for the first quarter (Q1) of its 2023 fiscal year (FY2023), revealing increased revenue and operating year-over-year (YoY) in nearly every segment, including its Imagine Products Business.

Nikon’s presentation materials show the revenue and operating profit of its Imaging Products Business was 61.2B yen and 13.6B yen, respectively, for Q1 FY2023. That’s an increase of 22.4% and 47.8%, respectively, compared to Q1 FY2022. Isolated, that’s an impressive increase, but Nikon hasn’t necessarily had the best couple of years throughout the pandemic, so how does it compare to Nikon’s pre-pandemic numbers? Turns out, fairly well.

Nikon’s overview for its entire operation. Note the Imaging Products Business section under the YoY banner. Click to enlarge.

Despite making 6.1B yen less in revenue in Q1 FY2023 compared to Q1 FY2020 (which is actually the first quarter of the 2019 calendar year, nearly a year before COVID-19 and the resulting economic strain kicked in), Nikon’s operating profit this year is 10.1B yen more than it was pre-pandemic. Of course, it’s likely the FY2020 operating profit was largely impacted by the company’s switch to mirrorless, which adds to R&D costs, retooling costs and other expenses related to developing and marketing an entirely new camera system. In fact, Nikon reported spending 23B yen in R&D expenditure back in Q1 FY2020, compared to just 16B yen in Q1 FY2023, a decrease of 30.4%.

The financials for Nikon’s Imaging Products Business for Q1 FY2023. Click to enlarge.

Still though, to see revenue back to where it was before the pandemic is a reassuring sign and appears to reaffirm Canon’s recent statements which suggest the camera industry has ‘bottomed out.’ As for how Nikon is making these gains, it cites the weaker yen and the shift to mid-to-high-end camera models for pro and hobbyist photographers. And Nikon expects the gains to only increase as the year goes on.

Nikon’s overview of its Imaging Products Business. Click to enlarge.

Nikon is increasing its annual revenue and operating profits forecasts for its Imaging Products Business to 215B yen and 27B yen, respectively. Those are increases of 2.3% and 22.7%, respectively, compared to the previous forecast (published back on May 12, 2022) and increases of 20.7% and 42.1% compared to its full-year FY2022 results.

Nikon’s revised forecasts for its FY2023. Click to enlarge.

What’s interesting is Nikon is increasing its revenue and operating profits forecasts without increasing the forecasts of its sales volume or market share. Nikon says it still expects to sell 700,000 interchangeable lens cameras and 1.25M interchangeable lenses, which is just 13.7% and 13.3% of the interchangeable lens camera and interchangeable lens markets, according to Nikon’s market estimations (these estimations have been historically accurate to +/- 3%). There could be a few reasons for these gains, but a few possible options include higher margins on its mid-to-high-end cameras, having to pay less for parts as the supply chain gets back to normal, improved efficiencies in the production cycle and/or reduced marketing expenditure now that its entire Z-mount lineup is more established.

Nikon’s unit sales by quarter going back to its FY2019.

Another notable details are that Nikon’s Imaging Products Business accounted for 42% of the company’s revenue in Q1 FY2023, a 4% increase compared to Q1 FY2022.

Financial results aren’t necessarily a crystal ball into the future, but Nikon appears to have weathered the brutal economic conditions of the past few years and has set its Imaging Products Business for a sustainable future, even if it’s only a fraction of what it was in the peak CaNikon days.

You can see the full Q1 FY2023 financials presentation and financial results on Nikon’s investor relations website.