EFI reports record Q4 and full-year sales

By Richard Stuart-Turner, Thursday 01 February 2018

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EFI has reported record full-year sales of $993.3m (£698m) following a record fourth quarter, in its results released yesterday (31 January).

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Gecht: "We look at this quarter as our first step in re-establishing a consistent track record"

For the quarter ended 31 December 2017, the company recorded sales of $269.2m, up 1% compared to Q4 2016 revenue of $266.7m. Its sales for the full-year were up 0.1% – in 2016 it recorded total revenue of $992.1m.

Q4 2017 gross profit was £128.2m, down by 8.1% compared to $139.5m in Q4 2016, and gross profit for the full-year was $506.5m, down 0.3% from the $508.1m reported in 2016.

EFI chief executive Guy Gecht said: “We are pleased to end a challenging year with record revenue for Q4, driven by solid performance in our direct business, which now represents 77% of the total company revenues. Revenues were ahead of expectations, marking 31 out of 32 quarters of revenue growth in the past eight years.

“We look at this quarter as our first step in re-establishing a consistent track record and regaining credibility after the missteps of the past year.

“We made good progress in many areas, including continued progress in developing next-generation platforms, closed on key hires to both permanent management and improved execution, completed the spin-out of Jetrion printer operations, and met our Nozomi ship plan in our first commercial quarter.

He added: “We still have a lot to do – we are doubling down on investment in our growth areas, providing expanded sales coverage, increasing the pace of new product development, and growing our services organisation, among other initiatives. We are also making organisational and personnel changes and continue to add experienced talent at all levels.”

The company reported Q4 Industrial Inkjet revenue of $162.8m, up 6% year-on-year, Productivity Software revenue of $45.3m, up 4.8% year-on-year, and Fiery revenue of $61.1m, down 12.6% year-on-year.

For the full-year, Industrial Inkjet turnover grew by 1.4% to $570.7m, Productivity Software sales increased by 3.2% to $156.6m and Fiery revenue dropped by 4.2% to $266m.

“Unfortunately, the outlook for Fiery continues to suffer from negative industry trends,” said Gecht.

“I shared last quarter that we saw slowing in high-end colour production and that has only got worse. Our partners are telling us that they are seeing the same slowing of demand at the high-end of the commercial print market. So while this is an industry-wide issue, the impact on Fiery is more pronounced as the same forces are also pushing some migration to low-end products.

“In addition, last year Fiery had a strong Q1 and this creates a very tough compare for the segment. We expect revenues to recover from Q1 levels as we go forward, and we think Fiery revenues may be closer to $60m per quarter for the balance of the year.”

Last month EFI launched a new version of Fiery targeted at users of its Reggiani industrial digital textile printers. Two months earlier it had unveiled a Fiery digital front-end (DFE) print server for the iGen 5 with White Dry Ink capability.

Speaking about yesterday’s announcement that Fujifilm and Xerox have agreed an industry mega-merger that will see Xerox become part of an enlarged Fuji-Xerox, Gecht said: “We think it is a great move for Xerox and Fujifilm and we are delighted to see that Jeff Jacobson will be leading the new company.

“We view this deal as a good opportunity for us to do more with the new Xerox, and we will certainly propose to Xerox that, as a first step, we extend the strategic arrangement we have regarding our production DFE partnership to the Fuji-Xerox territories, something we were unable to do in the past given the dynamics of this joint venture.”

Geographically, EFI recorded full-year sales of $488m in the Americas – down by 2.5% year-on-year, $369.6m in EMEA countries – up 2.6%, and $135.7m in the APAC region – up 3.3%.

Gecht said the manufacturer’s Q1 outlook shows increasing growth rates, especially for the Industrial Inkjet segment. The company shipped four Nozomi units in Q4 2017. Its manufacturing facility expansion is now completed and it can build two units per month going forward.

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