By Elizabeth Gooding
I had the opportunity to attend the One Canon 2019 event in Boca Raton Florida. One Canon is a media and analyst event intended to present the combined strengths of the worldwide Canon organization and, particularly, the strategy and capabilities for the Canon U.S.A and Canon Solutions America organizations in the U.S. The impetus for the first One Canon event followed the creation of the Canon Solutions America (CSA) brand following the integration of Canon Business Solutions, Inc. with Océ Printing Systems and subsequent market confusion with CUSA versus CSA. There are a lot of companies, brands, divisions and products within Canon, even just within North America, One Canon provides the decoder ring.
Naturally at Inkjet Insight we’re interested in, well, inkjet. That means we are looking at a slice of a slice of the One Canon pie. That would be Production Print Solutions (PPS) and specifically the inkjet portfolio within PPS. However, it’s useful to understand that slice in the context of the whole pie.
It’s good to know that the division of a company you are working with is doing well, but it’s even better to know that the whole company is stable. Stability was one of the key messages at the event, which is not surprising in the context of rising ink production costs, a volatile US paper market and page volumes declining in most segments. In discussing the stability of the company, Sam Yoshida said “being boring is not bad if you are delivering results. Mr. Yoshida is the EVP and GM of Canon BICG, as well as the Vice Chairman of Canon Solutions America.
Canon achieved 3 percent revenue growth in 2018 and continued to invest over 8 percent in R&D. Good. Stable. Maybe a little boring. Canon Solutions America (CSA), by comparison, set a new revenue record in 2018 and Production Print Solutions was a big piece of that story with a 29 percent improvement over the previous year.
That takes us to inkjet, our not so little slice of the pie. CSA reported year over year growth in inkjet hardware sales of 12 percent. When considered in the context of a 15 percent decline in overall, worldwide inkjet device sales during the same period (according to I.T. Strategies) this growth is not boring at all.
Where is the Growth Coming From?
According to Francis McMahon, Executive Vice President, Production Print Solutions, Canon Solutions America, PPS made changes in two key areas of sales focus:
- Creating a Special Accounts Group to nurture growth with existing accounts
- Adjustments to sales force and compensation to incentivize net new account growth
This paid off for PPS with 60 net new accounts in 2018 versus 15 in 2017. For inkjet specifically, CSA reported 92 Continuous Feed inkjet units (46 twin devices installed) and 40 sheet fed engines (20 devices). Sheet fed inkjet growth actually outpaced CF inkjet with growth of 18 percent. The new ProStream 1000 represented 4 of the CF placements in 2018, and McMahon indicated that they had orders for more, but did not have the inventory to close those sales in 2018.
Naturally as device sales continue to accrue, they pay dividends in the form of service and supplies growth. CSA inkjet revenues are now at approximately 30 percent hardware and 70% service and supplies.
Services and supplies naturally become an important factor in revenue growth and profitability as the base of installed devices continues to accrue. Maintaining device up-time and helping customers productively grow pages is important to continued growth and stability.
CSA added an additional day to the event specifically for the PPS division that defined a number of customer facing initiatives geared to doing exactly that. We’ll talk about some of those initiatives in another post.