By Andy Slawetsky – Canon held their annual One Canon event in southern Florida February 12 – 14. This year, we were in a beautiful hotel on the beach in sunny Hollywood. The event began with a nice cocktail reception the night we arrived. After a bit, EVP Francis McMahon, who set the tone for the event with a short speech, welcomed us. Francis was recently promoted to EVP Production Print Solutions of Canon Solutions America (congrats!).
The next morning started bright and early as Canon USA EVP and GM Toyo Kuwamura took the stage to give us an overview on Canon’s past 12 months. Mr. Kuwamura was also recently promoted (congrats again!), moving into the position of Chairman and CEO of Canon Solutions America. Mr. Kuwamura opened with a discussion on Canon Global’s 2017 full year results, which were at $36.4 billion after 19.9% growth; a solid year! The American market, which accounts for 27% of Canon’s global sales saw 14.9% growth. Office equipment is still a huge piece of the Canon puzzle, accounting for 46% of Canon’s global sales.
Canon Solutions America (CSA), a separate company from Canon USA also showed nice numbers with equipment sales up YoY and 1% growth. CSA is Canon’s production print unit as well as their direct sales branches. Other CSA unit sales highlights included toner cut-sheet hardware up 7% and commercial print (inkjet) up a whopping 24%.
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Mr. Kuwamura then went on to discuss Canon’s investment in technology. Once again, they’re on the top 5 global patent holders list for last year (2017), placing 3rd for the 7th consecutive year, ahead of everyone but IBM and Samsung.
Canon has expanded over the last year, with the development of rockets and satellites, the introduction of the new Canon Medical Systems that came from the acquisition of Toshiba’s medical group ($3.7 billion, 9,952 employees) and the radical new CMOS sensor that is setting the photography world on fire, allowing professionals to shoot perfectly clear, colorful shots with virtually no light. We saw a National Geographic video made using this technology and it was breathtaking to see some of the wildlife videoed at night in their natural habitat, unaware they were being filmed. Truly incredible.
In 2018, Canon will refresh their imageRUNNER ADVANCE line, which Canon says will be a game-changer. The new portfolio will be even more reliable, more secure, will include specialized workflows for vertical markets and will keep pace with Artificial Intelligence (AI), according to slides they showed.
Next, Francis spoke to us some more abut CSA numbers in 2017, where they were 106% of budget for revenue and 104% for profit. Key PPS highlights from last year include 22% growth in ColorStreams, 52% growth in VPi300s and a record year in service and supplies. “Color was king” according to one slide that stated it accounted for 53% of pages for this group.
Canon inkjet pages continue their incredible growth as well, up from 69 billion in 2015 to 100 billion in 2016 to 138 billion in 2017. It made for a really nice chart.
Following Francis, Nobu Kitajima, VP & GM BISG was joined by Rob Reddy, VP BISG & SVP LFS CSA to discuss wide format. Some key 2017 highlights included 68% YoY growth for the Arizona portfolio as well as taking 41% market share with their imagePROGRAF products, taking the number one position in Graphics for the first time as they finally edged out Epson. They continue their reign as #1 in what they labeled Productive CAD Printing, holding a 34% market share with their Océ line.
Next came SVP John Reilly of the newly formed and announced Global Managed Services group that effectively brings together BISG’s Global Services Division with CSA’s Enterprise Managed Services Division. This feeds directly into Canon’s Canon One strategy, helping to provide a single face to Canon customers and allowing Canon to streamline and better manage their programs.
BISG SVP & GM Hiro Imamura followed John to bring us some more details on the new imageRUNNER ADVANCE Third Generation, Second Edition line. According to Mr. Imamura’s slide, enhancements on the new line include “2x more precision welded metal frame, 3x harder surface drums, no replacement rollers and 3x larger waste toner containers,” all of which should improve already excellent reliability for this portfolio. In all, Canon has made 530 enhancements to the imageRUNNER ADVANCE product line in the forthcoming series.
Mr. Imamura then discussed Canon reliability in greater detail, explaining the improvements they saw between the old C5200 Series and the C5500 Series – a 50% increase in Mean Copies Between Failure (MCBF). Service maintenance time was also reduced by 20%, further improving the potential service margins on these devices and bringing customers a more positive experience.
Canon’s MFP line is on a nice run, winning BLI’s Line of the Year for the third straight year (2016, 2017 and 2018). They also saw a 20% increase in sales growth from 2016 to 2017.
Next came BISG SVP & GM Mason Olds. Mason is the “dealer guy” at Canon and he gave us an overview on What’s Happenin’ with their dealers. Canon had steady dealer growth of 3% in 2017 with an impressive 28% rate of growth from this channel from 2011 – 2017. Mason then went on to introduce a Canon dealer, Ryan Jones of American Business Machines in California and his customer who came up to speak to us about their experience buying and selling the Canon products, respectively. You can check out what Ryan had to say in the video below.
After Mason, VP Valerie Belli of Canon’s Enterprise Managed Services Division brought up customers to discuss their experience in working with Canon. EMSD and the small but growing Mount Ida College offered differing experiences with a common thread; they were both thrilled with their partnerships with Canon.
Pete Kowalczuk, President of CSA then discussed how Canon responds to the needs of their customers, providing examples of their work with Cybersecurity Services, a consulting company that specializes in…well, you know what they specialize in.
Winding down our morning (yes, this was all done in one morning), VP Marketing, Large Format Solutions, Sal Sheikh brought us into the home stretch, with an update on Canon’s innovative Océ Colorado 1640 UVgel printer. Canon has done great with this printer and we heard about Canon’s success with the product over the last year.
The final sessions included a presentation from Senior Marketing Specialist John Kaufman, Large Format Solutions and his customer Adam Carver from Pixelwerx and finally an interview with Canon customer Steven Hegna of Arna Marketing Group, owner of such big iron as 2 Océ ColorStreams, 3 Océ VarioPrint i300s and 3 Océ VarioPrint 6000s, among other gear. Steven, speaking in very colorful language as a legitimate printer often does, talked about what they were trying to achieve and how Canon was really the only brand that suited their needs. Indeed, Francis joked that Steven routinely pushes his hardware well beyond Canon’s published specifications and the machines apparently hold up great.
The day finished with a series of one-on-one interviews and we ended with a cocktail hour and dinner that included some Olympics themed trivia games – a lot of fun! The theme built on their guest speaker, famed Canadian Skier Cary Mueller, who was just awesome.
After writing this, it feels like this event must have been several days long. Canon did a great job of moving the presentations along and we were given a ton of information in a very short period. Here are my takeaways.
Canon is doing very well. After a rough period a couple of years ago, Canon is clearly firing on all cylinders again, showing strong numbers and growth all over the board. Their MFP line, which has been recognized as the best line for the last three years by BLI is apparently going to get even better with this next generation. Their production and wide format groups are all growing and taking more market share from competitors. Page volumes in key production areas are increasing and their continued investments into R&D are clearly paying dividends.
The only area where Canon has lagged in the past in my opinion, at least from a product standpoint has been in the in A4, where Canon for some reason always seemed to be farther behind than they should have been considering they were so good at making HP’s LaserJet engines. It was almost as if Canon had some kind of unwritten agreement that as long as HP kept the factories humming, they would drag their feet on their own line. No one at Canon or HP has ever confirmed my suspicion.
Fast forward to now and we see Canon has already been addressing the comparatively weak A4 line with a much more robust and competitive imageCLASS product line, perhaps (probably) in response to HP’s acquisition of Samsung and the possibility that those printer engine sales to HP may eventually go away. Today, Canon has almost 20 A4 laser printers and MFPs on their website, including several recently launched models. These models have much stronger specifications than their predacssors, are priced more aggressively and in some cases, even have large visually appealing touch screens that are considerably better than past models.
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Canon is still one of the leaders driving this industry. Their expansion into new areas like security, rockets/satellites, medical imaging etc. is impressive and shows their willingness to diversify – something I think is critical to printer OEMs going down the road. Clearly investors agree with Canon’s strategies over the last year as their stock has done quite well, up 28% since this time last year (CAJ – NYSE).
I appreciate being invited to cover this event. Canon does a great job with these updates and their most senior executives are always so accessible, you really get a chance to find out What’s Happenin’. Canon is certainly pushing this industry forward and is still one of the elites in this space.