Slide 1: Canon Inc. FY 2016 Results
Canon Inc. FY 2016 Results January 31, 2017 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 assumptions forme
Slide 2: Agenda
Agenda 4Q/FY 2016 Results P3 – 5 FY 2017 Projections P6 – 9 Details by Business P10– 15 (4Q/FY 2016 Results and FY 2017 Projections) Financial Situation P16 – 18 Supplementary Information P19 – 24 January 31, 2017 Canon Inc. 2
Slide 3: FY 2016 in Summary
FY 2016 in Summary External Environment Global economy - Limited to modest growth U.S. - Signs of a recovery Emerging markets - Prolonged economic weakness Lowest since the Great Recession triggered by the collapse of Lehman Brothers. Results Net sales and profit decline Exchange rates, Came
Slide 4: Summary of Results
Summary of Results 4Q/FY 2016 Actual (Billions of yen) 4Q FY 2016 2015 Pct. 2016 2015 Pct. Actual Actual Change Actual Actual Change Net Sales 965.2 1,042.6 -7.4% 3,401.5 3,800.3 -10.5% Gross Profit 460.1 522.8 -12.0% 1,673.8 1,934.4 -13.5% (% Sales) 47.7% 50.1% 49.2% 50.9% Op. Profit 80.2 107.0 -25
Slide 5: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2016 Actual v. FY 2015 Actual (Billions of yen) FY Sales Op. Profit FY 2015 Actual 3,800.3 355.2 Foreign Exchange Impact Change in Exchange Rate(FY) -280.4 -101.8 •1USD: 121.13 to 108.58 yen (Net Sales, Cost of Sales, Expenses) •1EURO: 134.20 to 120.25 yen
Slide 6: Assumptions
Assumptions FY 2017 Projection Average FY17 FY16 Exchange Rate Yen-1USD 110.00 yen 108.58 yen Yen-1EURO 120.00 yen 120.25 yen Impact of Exchange Rate Movement (FY17 Impact Given a One Yen Change) Net Sales Operating Profit USD 13.4 billion yen 4.9 billion yen EURO 6.6 billion yen 2.4 billion
Slide 7: Key Points
Key Points FY 2017 Projection External Environment Developed countries - U.S. will drive, however, Japan and Europe will remain on a path of modest recovery Emerging markets - Steady recovery Outlook Net sales and profit growth Driven by recovery in existing businesses and industrial equipmen
Slide 8: Summary of Projected Results
Summary of Projected Results FY 2017 Projection (Billions of yen) FY 2017 FY 2016 Pct. Change Projection Actual Net Sales 4,000.0 3,401.5 +17.6% Gross Profit 1,903.0 1,673.8 +13.7% (% Sales) 47.6% 49.2% Op. Profit 255.0 228.9 +11.4% (% Sales) 6.4% 6.7% Net Income Attributable to Canon Inc. 170.0 150
Slide 9: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2017 Projection v. FY 2016 Actual (Billions of yen) Sales Op. Profit FY 2016 Actual 3,401.5 228.9 Change in Exchange Rate Foreign Exchange Impact •1USD: 108.58 to 110.00 yen +16.3 +5.7 •1EURO: 120.25 to 120.00 yen (Net Sales, Cost of Sales, Expenses) Sales Volum
Slide 10: Office
Growth Rate y/y (Unit Base) Color Ratio Office Copiers 4Q16 FY16 Printers 4Q16 FY16 Copiers Printers 4Q16 FY16 4Q16 FY16 Color +4% +7% +12% -2% Value Base* 59% 57% 50% 51% 2016 Actual Monochrome -9% -6% +28% -4% Unit Base 52% 49% 17% 17% Total -3% 0% +25% -4% (Billions of yen) 800 Sales *Includes Co
Slide 11: Office
Growth Rate y/y (Unit Base) Color Ratio Office Copiers FY16 FY17(P) Printers FY16 FY17(P) Copiers FY16 FY17(P) Printers FY16 FY17(P) Color +7% +8% -2% -5% Value FY 2017 Projection Monochrome -6% -3% -4% -4% Base* 57% 59% 51% 52% Unit Total 0% +3% -4% -4% 49% 52% 17% 17% Base (P)=Projection *Includes
Slide 12: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens 4Q16 +1% FY16 +2% Digital Camera Ratio * 4Q16 FY16 Digital Cameras Value Base 86% 86% 2016 Actual Compact Digital -47% -38% Unit Base 62% 58% Cameras * Proportion of Total Digital Cameras (Billions of yen) 450 Sales
Slide 13: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens FY16 +2% FY17(P) -7% Digital Camera Ratio * FY16 FY17(P) Digital Cameras Value Base 86% 86% FY 2017 Projection Compact Digital -38% -13% Unit Base 58% 60% Cameras * Proportion of Total Digital Cameras -20% -9% Total
Slide 14: Industry and Others
Industry and Others Lithography Equipment (Unit Sales) IC Stepper Unit Breakdown by Light Source 4Q15 FY15 4Q16 FY16 2016 Actual 4Q15 FY15 4Q16 FY16 ArF 0 0 0 0 IC 23 80 19 64 KrF 8 21 6 19 Growth Rate y/y (Billions of yen) 210 Sales ( ) Local Currency Base FPD 15 34 15 12 37 i-line 15 59 13 45 Sale
Slide 15: Industry and Others
Industry and Others Lithography Equipment IC Stepper Unit Breakdown by Light Source FY 2017 Projection (Unit Sales) ArF FY16 0 FY17(P) 0 FY16 FY17(P) IC 64 65 KrF 19 21 FPD 37 84 i-line 45 44 (P)=Projection (Billions of yen) Growth Rate y/y Sales ( ) Local Currency Base Op. Profit 1,400 Industry and
Slide 16: Inventories
Inventories (Billions of yen) 800 Amount (Billions of yen) 90 Turnover (Days) 700 59 59 70 54 57 55 50 52 53 47 50 591 595 600 563 561 30 528 521 502 494 500 479 10 -10 400 -30 300 -50 4QE14 1QE15 2QE15 3QE15 4QE15 1QE16 2QE16 3QE16 4QE16 January 31, 2017 Canon Inc. 16
Slide 17: Capital Expenditure, Free Cash Flow
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) 1,000 1,000 Increase in PP&E Operating C/F Net Income Attributable to Canon Inc. Free C/F Depreciation 750 Investing C/F 750 500 21 315 837 250 584 500 250 475 454 500 500 269 250 255 220 170 151 0 250 -250 -337 264 273 250 270 1
Slide 18: Cash on Hand and Return to Shareholders
Cash on Hand and Return to Shareholders Cash on Hand (Year-end) Dividend Regular Dividend (Yen) 1500 5 200 120.0% Cash-on hand (Billions of yen) Commemorative Dividend marking the 75th Anniversary of the Company's Establishment 108.7% Cash-on-hand Payout Ratio (Consolidated Basis) 110.0% (In months
Slide 19: Supplementary Information
Supplementary Information January 31, 2017 Canon Inc. 19
Slide 20: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2016 Actual v. Projection (Billions of yen) Sales Op. Profit FY 2016 Projection (Oct. 26, 2016) 3,360.0 235.0 Foreign Exchange Impact Change in Exchange Rate +48.0 +20.5 (Net Sales, Cost of Sales, Expenses) •1USD: 106.00 to 108.58 yen •1EURO: 118.75 to 120.25 ye
Slide 21: Gross Profit Variance Analysis
Gross Profit Variance Analysis 4Q 2016 Actual v. 4Q 2015 Actual (Billions of yen) 4Q16 4Q15 Change (Billions of yen) Gross Profit 460.1 522.8 -62.7 % Sales 47.7% 50.1% -2.4pt. 100 50 24.4 16.3 0 -11.3 -22.4 -50 -62.7 -69.7 -100 Forex Sales Price Forex Cost Total Impact Volume Change Impact Reduction
Slide 22: Operating Profit Variance Analysis
Operating Profit Variance Analysis 4Q 2016 Actual v. 4Q 2015 Actual (Billions of yen) 4Q16 4Q15 Change Op. Profit 80.2 107.0 -26.8 (Billions of yen) % Sales 8.3% 10.3% -2.0pt. 100 50 23.4 12.5 0 -26.8 -50 -62.7 -100 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Excl
Slide 23: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 45 30.0% 613 Debt Debt/Total Assets 25.0% 20.0% 15.0% 11.9% 10.0% 5.0% 4 3 2 2 0 0.0% 0.7% 0.1％ 0.7% 0.1％ 0.0% 0.0% FYE12 FYE13 FYE14 FYE15 FYE16 January 31, 2017 Canon Inc. 23
Slide 24: Financial Ratios
Financial Ratios (Yen) 900 15% 600 10% 8.4% 8.7% 7.4% 5.9% 6.1% 5.6% 5.0% 5.2% 300 5% 3.1% 3.3% 229.03 200.78 201.65 137.95 155.67 0 0% FY13 FY14 FY15 FY16 FY17 Projection EPS (Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information January 31, 2017 Canon Inc. 24