[Leica] Leica Sales

[Mark <mark@steinberg.net>]

Eric Welch wrote:
>=20
> At 07:12 PM 6/23/98 -0700, you wrote:
>=20
> >while i am in basic agreement with your point (that Leica seem to be d=
oing
> >well and that the S1 may well be a successful product for them) i woul=
d
> >warn that using growth percentages can be very deceptive.
>=20
> Consistent growth in Millions of dollars is significant. For Leica to
> positive increases in sale of 30 percent or more over the past four or =
five
> years is a good indication that the company is healthy, it's customer b=
ase
> is there and that the future is likely to be decent at least.

your admonition caused me to look at leica's site and their published res=
ults.

frankly, i see quite a bit of bad news in their year end report. while th=
is
hardly constitues a disaster the picture is hardly rosy.

here's a few excerpts:

Page 2 of 6
No upturn during the fourth quarter
The strong increases in sales of the Leica Camera Group during the first =
half did not
continue during the second half of the fiscal year 1997/98 due to the eco=
nomic crisis
in Asia and the disappointing Christmas sales in large parts of Europe. T=
urnover during
the traditionally strong selling period of the fourth quarter (January 1 =
to March 31,
1998) amounting to DM 82.9 million was 8.8% below the level of the prior =
year.
During this quarter under report, sales in Asia also declined by 39.0% in=
 comparison
with the prior year to DM 14.5 million.=20

In Europe, the Group was able to strengthen its position outside Germany,=
 although,=20
however, sales declined by 7.6% to DM 52.1 million due to the decline in =
the German=20
market (=969.9%).=20

In the US market which is strategically important for the internationalis=
ation of the Group=92s
business, the growth trend of the first half year was confirmed with an i=
ncrease=20
in sales of 54.1% to DM 15.0 million during the fourth quarter.

[in other words, the US market was just under DM 10.0 million ($6 million=
 approx)=20
during the corresponding quarter in the previous year. annualized this wo=
uld work out
approx $20 million in the 12 months leading up to the month of may 1998.].

[note that the increase of DM 5.0 million sales in the USA was almost off=
set by
the decline of approx DM 4.0 million in Germany]

[also note the sheer size of the German home market. if leica appeal prim=
arily to
"pro users" there must be many more "pro users" per capita in Germany tha=
n in the
USA]


With regard to products, in certain instances considerable declines in sa=
les were
registered in the camera systems (=9618.1%) and in the compact camera (=96=
22.5%)
sectors under the Leica brand name, whilst sales of cameras and binocular=
s of the
Minox brand were able to be increased further (+42.9%). The Leica sectors=
 of
binoculars and scopes (+18.7%) and projectors (+18.0%) were also able to =
register
increases in sales thanks to positive export successes and new products.

[so camera sales are actually down considerably whereas minox, binoculars=
 & scopes,
and projectors are thriving. elsewhere it's stated that M & R cameras con=
stitute some
50% of leica's sales]

The consolidated net income of the quarter under report was characterised=
 above all
by the booking of the extraordinary expense in respect of the restructuri=
ng of Minox
GmbH as well as the adjustment of the cost structures at Leica Camera AG.=
 This
resulted in an operating loss of DM 3.3 million which led to a loss befor=
e taxes of
DM 7.9 million after taking into consideration extraordinary expenses in =
the amount of
DM 3.3 million. The projected loss after taxes for the quarter amounts to=
 DM 6.0
million. More than half of the loss for the year thus arose during the fo=
urth quarter
both at the level of the operating result as well as in respect of the lo=
ss before taxes.

Fiscal year 1997/98 characterised by spring cleaning
As announced, the fiscal year 1997/98 was characterised by a planned repo=
sitioning
of the Leica Camera Group, which was aggravated by substantial sales decl=
ines in
important markets. Actual sales fell DM 30.0 million short of the planned=
 targets thus
resulting in a considerable deterioration of the operating result.......


food for thought ?

mark