Leica has today announced a slight increase in income after tax but an overall drop in sales. Worst hit was compact camera sales which decreased by 44% "due to a temporary lack of digital camera models". The press release goes on to say " In July 2001 the Company finalised a basic agreement with Matsushita Electric Industrial Co., Ltd. of Osaka, Japan to jointly develop and manufacture digital still cameras. The presentation of the first Leica products to emerge from this partnership is scheduled for the spring of 2002." Just in time for PMA...

I picked up this press release primarily because it's the first solid indication from Leica that there will indeed be new digital camera products from their partnership with Matsushita, and that we're likely to see them at PMA 2002.

Leica Camera Group closes first quarter of fiscal 2001/2002 with slightly increased after-tax income

Increased sales of own value-added products largely make up for decreases in contractor-manufactured products. Restructuring programme continues according to plan.

Solms, August 31, 2001 – Leica Camera Group, Solms, Germany, has closed the first quarter of fiscal year 2001/2002 (March 31) with a € 136,000 increase in income after tax, to € 160,000. Sales during the months of April to June were 5.6% below the comparable prior-year period, amounting to € 34.2 million. The Board of Management of Leica Camera AG regards the fact that the Company started into the new fiscal year according to plan as a confirmation of its expectation to achieve a doubling of after-tax income in the third year of the restructuring programme.

Due to the spin-off of Minox GmbH effective at the beginning of the current fiscal year and to a temporary lack of digital compact cameras the Company’s planning provides for a slight decrease in sales for the twelve months period as a whole.

R&D expenditure was increased by € 168,000 to € 1.6 million. Commencing at the beginning of the coming calendar year the Company plans presentations of strategically important new products, especially in the sports optics and digital compact camera product lines.

The operating result for the period under review amounted to € 815,000, after € 889,000 in the first quarter of the previous year. The result from ordinary activities amounted to € 204,000, as compared to € 221,000 in the prior-year period. The extraordinary result of € 23,000 constitutes a € 66,000 improvement on the previous year. Together with a reduced tax load of the Company’s foreign participations this development resulted in the above-mentioned improvement of income after tax from € 24,000 to € 160,000.

Sales by product line

Sales of system cameras slightly decreased - by 3.0% - to € 15.8 million. The cameras and lenses of the Leica M system as well as the re-edition of the Leica 0 series from 1923/24 altogether developed favourably. All 4,000 units of the historical LEICA 0 camera model having been sold and become unavailable at the manufacturer, new orders are now no longer taken. The planned decrease of the cameras and lenses of the Leica R SLR system was not as strong as the downturn of the world market for high-grade SLR cameras.

Due to a temporary lack of digital camera models, sales of compact cameras decreased by 44.2% to € 3.2 million. In July 2001 the Company finalised a basic agreement with Matsushita Electric Industrial Co., Ltd. of Osaka, Japan to jointly develop and manufacture digital still cameras. The presentation of the first Leica products to emerge from this partnership is scheduled for the spring of 2002.

With 16.1% sales growth to € 7.9 million the Company’s sports optics product line showed a favourable development. The sports optics business, comprising binoculars, scopes and rangefinders, will be strengthened by the build-up of a European sales organisation targeting the relevant consumer groups.

At € 1.5 million, sales of projectors were better than the development of the market as a whole and only 6.4% below the previous year.

Sales by region

Sales in Europe decreased by 12.0% to € 17.5 million, with the German market being more stable than the other European markets and declining by 6.6% to € 8.9 million.

In the Asian/Australian region it was first of all the positive development in China and Korea that led to a 25.4% increase to € 7.5 million. In the NAFTA countries the Company recorded sales of € 8.7 million, down 15.1% on the previous year.

The General Meeting of Leica Camera AG will be held on September 27, 2001 in Solms.