Our organisation

 
 

Business performance

Direction

To be the leader in providing the Australian market with integrated document services.

10/11 objectives

How did we do?

10.7% growth in total revenue across Fuji Xerox Australia (based on improved market conditions).

  • $919.9m revenue, a 16% increase on 09/10 with acquisitions included, 8.2% increase in organic growth.
  • Global services revenue grew 2.4%.
  • Equipment revenue increased 11.4% organically.
  • Document supplies revenue increased 13.7%.
  • Annuity revenue grew 5.5% organically.

11/12 objectives

16.8% growth in total revenue across Fuji Xerox Australia (includes acquisitions).

Message from Phil Barter,
Executive General Manager, Business Services

Our business performance should be considered in the context of the Australian economy, which has settled into ‘two speed mode’, where the strength of the mining sector masks underlying weakness in other sectors. Added to this, the natural disasters in the March quarter, particularly the Queensland floods, reduced GDP growth by 1.7 percent to a modest 1 percent for the year.

Against this backdrop, Fuji Xerox Australia set about achieving double digit revenue growth through investment in the existing business and through acquisition. This investment was rewarded by growth in all areas of our existing business, which grew 8.2 percent organically. This increases to 16 percent including the acquisition of Triangle and Upstream. Total revenue of $919.9 million reflects a solid performance in a tough market. With this growth we have maintained our market leadership position in our key market segments.

The weakness in the economy beyond the resource sector was apparent in the difficulty some customers had in paying accounts, particularly in the graphic communications sector and across small and medium enterprises. We incurred higher than anticipated bad debts in the year and continue to work with our customers to closely manage the situation.

One favourable economic factor was the strength of the Australian dollar against the Japanese yen and US dollar. This effectively decreased the inter-company costs of products and therefore helped drive market activity and protect product margins.

The increasing commoditisation of traditional product lines offered to customers, together with larger customers moving to a tendering process for buying office equipment, has continued to challenge profit margins. We will address this challenge by delivering on our mission of integrated document services, which will lead us to invest and innovate as we adapt to shifting market conditions.

In the year under review revenue from equipment sales increased by 11.4 percent as a result of investment in our sales coverage model and targeted marketing activities, with office colour devices being a major contributor to the success. Sales of office colour equipment increased by 34 percent on the back of a new family of flagship products and more than compensated for a decline in black and white equipment sales. While the release of a light production colour device, the PC700, was very successful, unit sales of graphic communications colour equipment decreased by 5 percent.

Annuity revenues are largely derived from equipment support services agreements, and are fundamental to our long term business sustainability. The 5.5 percent growth in 10/11 is due to:

  • an increase in the units of equipment in the field
  • the number of impressions produced on that equipment, which at 13.9 billion prints for the year represents a 2.9 percent increase over the prior year, and
  • the continuing trend to colour which is reflected in a 20 percent increase in colour prints, which offsets a 0.35 percent decline in black and white prints.

Global Services experienced a modest rate of growth with services-based revenue increasing by 2.4 percent. Our customers include many financial services sector customers and other large organisations that were negatively impacted by the economy, resulting in lower activity. The sales cycle for acquiring new business is often greater than a year, and while we did not achieve the growth in new business that we planned, we created a significant sales pipeline that we will realise in the 11/12 year.

Our Supplies division achieved a 13.7 percent growth in revenue, while maintaining a healthy margin in a highly commoditised market. The growth was the result of investment in management capability and re-engineering the sales coverage model.

With effect from 1 April 2010 we acquired a wide format business that predominantly services the engineering sector. This involved re-acquiring the distribution rights to Fuji Xerox technology previously managed through our dealer, Triangle Corporation. In July 2010 we acquired Upstream Print Solutions, which at the time was the largest independent managed print services company in the Australian market. The complementary fit in terms of target market segmentation has increased our customer base and market share substantially. We also acquired Upstream’s main lease finance portfolio from a third party finance company.

The group increased its total asset position by 40 percent to $1.4 billion, reflecting growth in finance receivables, although capital expenditures had been contained in response to prevailing economic conditions. Our robust balance sheet, conservative gearing and strong banking relationships ensured our ability to access the funds needed to continue to grow our business despite the global financial crisis.

The following charts provide a summary of actual payments made to employees and government during the year, including payments made by the company to employees of our Regional Support Centre and ANZ Hub (these employee payments are charged to our immediate parent company for accounting purposes). Eight months of Upstream financials are also included.

Revenue vs operating costs Payments to government Payments to employees Payments to providers of capital Capitalisation