Slide 1: First Quarter 2018 Results
Canon Inc. First Quarter 2018 Results April 25, 2018 Toshizo Tanaka Executive Vice President & CFO This presentation contains forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management’s views and assumpti
Slide 2: Agenda
Agenda 1Q 2018 Results P2 - 5 FY 2018 Projection P6 - 10 Details by Business P11 - 17 (1Q 2018 Results & FY 2018 Projection) Financial Situation P18 - 19 Supplementary Information P20 - 22 1
Slide 3: Key Message (1Q 2018 Results)
Key Message (1Q 2018 Results) Profitability improvement continues despite lower sales Slightly lower sales, but trend of improving profit and momentum of last year maintained Existing Businesses Strong sales of lithography equipment offset impact of lower camera revenue, overall sales in line wi
Slide 4: FY 2018 Financial Results (1Q Results)
FY 2018 Financial Results (1Q Results) Versus last year (Pre-reclassification basis): Increased profit and continued profitability improvement despite lower overall sales FY 2018 FY 2017 1Q 1Q 1Q Service 1Q % Change (Billions of yen) Pension Actual Pension Actual Actual Cost Actual (Pre-reclassifi
Slide 5: FY 2018 Financial Results by Business Unit
FY 2018 Financial Results by Business Unit (1Q Results) Imaging System and Medical System BU sales decline due to one-off factors Sales and profit driven by Industry & Others BU 1Q 2018 1Q 2017 (Billions of yen) % Change Actual Actual Office Net Sales 457.7 457.7 0.0% Op. Profit 53.0 55.4 -4.3%
Slide 6: FY 2018 Operating Profit Analysis (1Q)
FY 2018 Operating Profit Analysis (1Q Results) Sales Volume: Increase in Industry and Others BU offset impact of lower camera and medical sales Expenses: Promoting selection and concentration with focus on R&D (Billions of yen) Change in Net Sales, excluding FX Details FX impact, for reference N
Slide 7: Key Message (FY 2018 Projection)
Key Message (FY 2018 Projection) FX Assumptions 2Q-4Q 2018 FY 2018 USD/Yen 107.00 yen 107.24 yen EUR/Yen 132.00 yen 132.25 yen External Environment Global economy - Remains on path of modest expansion FY 2018 Outlook Expand sales through the active launch of new products in each business Measu
Slide 8: FY 2018 Financial Projection (vs FY 2017)
FY 2018 Financial Projection (Full Year comparison against FY 2017) Second highest level of sales since 2007 Second consecutive year of double-digit growth in operating profit FY 2018 FY 2017 Current Full Year Current Service Full year % Change (Billions of yen) Pension Projection Pension Actual
Slide 9: FY 2018 Financial Projection (vs Previous Projection)
FY 2018 Financial Projection (Full Year comparison against Previous Projection) Maintaining previous projection FX negatively impacting net sales and op. profit, 20 and 7 billion yen, respectively Offsetting FX impact by product mix improvement and service revenue expansion FY 2018 Current Pre
Slide 10: FY 2018 Financial Projection by Business Unit
FY 2018 Financial Projection by Business Unit (Full Year) Office: Further raise market share through competitively advantages new products Imaging System: Improve product mix, promote activities to reduce CoS Industry & Others: Grow significantly capturing increasing demand FY 2018 FY 2018 FY
Slide 11: FY 2018 Operating Profit Analysis (Full Year)
FY 2018 Operating Profit Analysis (Full Year comparison against FY 2017) Sales Volume: Volume increase and product mix improvement through launch of new products in all businesses Maintain price reduction at same level as last year, offset with cost reduction (Billions of yen) Service Reclassifi
Slide 12: Office – MFDs
Office – MFDs 1Q: Next-generation color devices and models for emerging markets drove unit sales growth Full year: Further expand sales through upgraded new products and strengthened cooperation with cloud-services (Billions of yen) (Billions of yen) 1Ｑ Full Year 2018 2018 2017 % 2018 2017 % % P
Slide 13: Office – Laser Printers
Office – Laser Printers 1Q: Sales down, mainly due to high level of consumable sales last year, partially offset by increased hardware sales Full year: Raise hardware market share and composition of new products, to achieve aim of stable growth of consumable sales (Billions of yen) (Billions of
Slide 14: Office – Others
Office – Others 1Q: New products that strengthened the lineup targeting Graphic Arts segment were driving force Full year: Accelerate sales of mainly new products (Billions of yen) (Billions of yen) 1Ｑ Full Year 2018 2018 2017 % 2018 2017 % % Previous Actual Actual Change Projection Actual Chang
Slide 15: Imaging System – Cameras
Imaging System – Cameras 1Q: Unit sales were limited to a slight decline despite one-off factor Full year: Increase market share through sales expansion of new products, including mirrorless models Improve product mix, and new product composition to raise profitability (Billions of yen) (Billi
Slide 16: Imaging System – Inkjet Printers
Imaging System – Inkjet Printers 1Q: Strong sales of refillable ink tank models, but lower sales overall due to one-off factor Full year: Increase sales, mainly compact and refillable ink tank models (Billions of yen) (Billions of yen) 1Ｑ Full Year 2018 2018 2017 % 2018 2017 % % Previous Actual
Slide 17: Medical System
Medical System 1Q: Achieved profit growth despite lower revenue due to last year’s high level of sales Full year: Sales and profit growth through efforts to raise market share and improve profitability (Billions of yen) (Billions of yen) 1Ｑ Full Year 2018 2018 2017 % 2018 2017 % % Previous Actua
Slide 18: Industry & Others
Industry & Others 1Q: Sales and profit growth driven by semiconductor litho. equip. Full year: Maintaining high level of semiconductor and FPD litho. equip. sales Maintaining double-digit growth of OLED vacuum deposition equipment and network camera businesses (Billions of yen) (Billions of ye
Slide 19: Inventory
Inventory QoQ increase, but optimal level maintained • Preparing to expand sales of new products (Cameras etc.) FY 2017 FY 2018 (Billions of yen) 1Q 2Q 3Q 4Q 1Q Amt. 207.3 211.5 222.7 205.4 207.9 Office Days 40 42 44 40 40 Amt. 142.7 148.8 163.6 130.4 151.9 Imaging System Days 46 52 54 39 49 Amt.
Slide 20: Cash Flow
Cash Flow (Full Year) Cash flow plan unchanged • Expecting to invest in growth of new businesses • Promoting repayment of debt FY 2018 FY 2018 FY 2017 Previous Projection Actual (Billions of yen) Projection Net cash provided by operating activities 550.0 550.0 590.5 Net cash used in investing acti
Slide 21: Supplementary Information
Supplementary Information 20
Slide 22: FY 2018 Operating Profit Analysis (vs Previous Projection)
FY 2018 Operating Profit Analysis (Full Year Comparison against FY 2018 Previous Projection) FX Details (Billions of yen) Net Sales: -20.0 Cost of Sales: +11.0 Op. Expenses: +2.0 Change in Net Sales, excluding FX impact, for reference Office: +10.3 Imaging System: +7.5 Medical System: +1.8 Industry
Slide 23: Impact of Change in Pension Accounting Standard
Impact of Change in Pension Accounting Standard Reclassification of CoS, SG&A and Other income (deductions) (Full-year impact 9.9 billion yen No impact on IBT or net income Pension accounting - Pre-standard change Pension accounting - Post-standard change FY 2017 FY 2017 FY 2017 FY 2017 FY 2017