The introduction of successful concepts for optimising printing processes sustained the continuous volume growth in the Canon Business Solutions (CBS) business unit. This enabled an increase in sales of 3.4 % in the CBS
business unit during the first half-year against declining average prices.
Weaker sales in the Canon Consumer Imaging (CCI) business unit – especially in the highly contested compact digital camera sector – led to a reduction in commission income. Coupled with the loss of revenue from the repair
business, outsourced in May 2004, this resulted in a fall of the reported revenue by CHF 3.0 million for CCI.
The gross margin remained under pressure. A higher proportionate share of lower-yielding product segments and increased price pressure on projects in the business solutions market contributed to a further decline in gross
margin from 48.6 % to 48.0 %.
As a result of initiatives in the administrative sector, operating costs were reduced despite extended sales activities. Since this partly compensated for the decline in gross profit, the reported operating profit was only
slightly below the level of the same period of the previous year.
Thanks to higher financial returns and an increased rental income in the non-operating real estate division, the half-year profit rose by 14 % to CHF 2.7 million.
Given the order logbook in the business segment – with a number of major projects in progress – we are anticipating sales in the second half-year to reach the level achieved in the first semester. Our employees’ growing
solution expertise confirms this expectation. Consistent active cost management should also be able to partially offset the lower margins, so that revenue and profit for the year 2005 overall may be expected to be in line with the previous year.