Slide 1: Canon Inc. Third Quarter 2015 Results
Canon Inc. Third Quarter 2015 Results October 27, 2015 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 assump
Slide 2: Agenda
Agenda 3Q 2015 Results P3 – 5 FY 2015 Projections P6 – 9 Details by Business P10 – 15 Financial Situation P16 – 18 Supplementary Information P19 – 24 October 27, 2015 Canon Inc. 2
Slide 3: 3Q 2015 in Summary
3Q 2015 in Summary External Environment Global economy Solid recovery in developed economies of Japan, the U.S., and Europe Rapid slowdown in Asia including China Our markets Office - Color remained driver Camera - Continued market contraction Results Sales growth - Office, lithography
Slide 4: Summary of Results
Summary of Results 3Q 2015 Actual (Billions of yen) 3Q 2015 3Q 2014 Pct. Change Actual Actual Net Sales 925.8 872.2 +6.1% Gross Profit 469.2 431.5 +8.7% (% Sales) 50.7% 49.5% Op. Profit 77.3 71.8 +7.6% (% Sales) 8.3% 8.2% Net Income Attributable to Canon Inc. 49.2 58.2 -15.6% (% Sales) 5.3% 6.7% For
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 3Q 2015 Actual v. 3Q 2014 Actual (Billions of yen) Sales Op. Profit 3Q 2014 Actual 872.2 71.8 Foreign Exchange Impact Change in Exchange Rate +52.4 +11.7 (Net Sales, Cost of Sales, Expenses) •1USD: 104.22 to 122.12 yen •1EURO: 137.78 to 135.93 yen Sales Volume Impa
Slide 6: Assumptions
Assumptions 2015 Current Projection Average 4Q15 FY15 FY14 Exchange Rate Yen-1USD 120.00 yen 120.71 yen 106.18 yen Yen-1EURO 135.00 yen 134.82 yen 140.62 yen Impact of Exchange Rate Movement (4Q Impact Given a One Yen Change) Net Sales Operating Profit USD 3.6 billion yen 1.3 billion yen EUR
Slide 7: Key Points FY2015
Key Points FY2015 External Environment Clear contrast between developed countries and emerging markets Continued solid recovery in developed economies of Japan, the U.S., and Europe Increasing sense of uncertainty towards Asia and other emerging markets Outlook Sales and profit growth Impr
Slide 8: Summary of Projected Results
Summary of Projected Results FY 2015 Current Projection (Billions of yen) FY 2015 FY 2014 Pct. Change Current Projection Actual Net Sales 3,820.0 3,727.3 +2.5% Gross Profit 1,943.0 1,861.5 +4.4% (% Sales) 50.9% 49.9% Op. Profit 365.0 363.5 +0.4% (% Sales) 9.6% 9.8% Net Income Attributable to Canon I
Slide 9: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2015 Current Projection v. FY 2015 Previous Projection (Billions of yen) Sales Op. Profit Previous Projection (Jul. 27, 2015) 3,930.0 380.0 Change in Exchange Rate Foreign Exchange Impact •1USD: 122.83 to 120.71 yen -34.4 -21.0 •1EURO: 134.60 to 134.82 yen (Net
Slide 10: Office
3Q15 Growth Rate y/y (Unit Base) 3Q15 Color Ratio Office Color Copiers +13% Printers +2% Value Base* Copiers 55% Printers 51% Monochrome -10% -15% Unit Base 46% 18% 3Q 2015 Actual Total -1% -12% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 800 Monochrome copi
Slide 11: Office
FY15 Growth Rate y/y (Unit Base) FY15 Color Ratio Office Color Copiers +18% Printers +1% Value Base* Copiers 57% Printers 51% Monochrome -7% -13% Unit Base 46% 17% FY 2015 Projection Total +3% -11% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 3,000 Monochrome
Slide 12: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens 3Q15 -17% Digital Camera Ratio * 3Q15 Digital Cameras Value Base 83% 3Q 2015 Actual Compact Digital -29% Unit Base 45% Cameras Total Digital Cameras -24% * Proportion of Total Digital Cameras IJP -8% * Value Base In
Slide 13: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens FY15 -14% Digital Camera Ratio * FY15 Digital Cameras Value Base 84% FY 2015 Projection Compact Digital -28% Unit Base 46% Cameras Total Digital Cameras -22% * Proportion of Total Digital Cameras IJP -3% * Value Bas
Slide 14: Industry and Others
Industry and Others Lithography Equipment IC Lithography Unit Breakdown by Light Source (Unit Sales) 3Q14 3Q15 3Q 2015 Actual 3Q14 3Q15 ArF 0 0 IC 13 20 KrF 2 4 FPD 8 12 i-line 11 16 (Billions of yen) Sales Growth rate y/y ( ) Local currency base 180 Sales Eliminations Industry and Others Lithograph
Slide 15: Industry and Others
Industry and Others Lithography Equipment IC Lithography Unit Breakdown by Light Source (Unit Sales) FY15 FY15 FY 2015 Projection FY15 FY15 FY14 Previous Current FY14 Previous Current Projection Projection Projection Projection ArF 0 0 0 (Billions of yen) Sales Growth rate y/y ( ) Local currency bas
Slide 16: Inventories
Inventories (Billions of yen) 800 90 Amount (Billions of yen) Turnover (Days) 700 59 59 70 58 57 52 53 54 54 50 608 50 591 595 600 569 554 563 550 30 533 528 500 10 -10 400 -30 300 -50 3QE13 4QE13 1QE14 2QE14 3QE14 4QE14 1QE15 2QE15 3QE15 October 27, 2015 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 Operating C/F Increase in PP&E Free C/F Net Income Attributable to Canon Inc. Investing C/F Depreciation 750 750 10 500 500 20 315 230 255 245 225 257 225 171 584 250 250 507 502 492 465 445 384 270258 275 264 270 270
Slide 18: Cash on Hand
Cash on Hand Cash on Hand (Year-end) 1500 4 Cash-on-hand (Billions of yen) Cash-on-hand (In months of 2nd-half net sales) 3.5 3 2.5 2.6 1000 2.3 2.4 2.5 845 1.9 1.9 789 2 773 667 650 630 1.5 500 1 0.5 0 0 FYE11 FYE12 FYE13 FYE14 FYE15 FYE15 Previous Current Projection Projection Note : Approx. 100,
Slide 19: Supplementary Information
Supplementary Information October 27, 2015 Canon Inc. 19
Slide 20: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2015 Current Projection v. FY 2014 Actual (Billions of yen) Sales Op. Profit FY 2014 Actual 3,727.3 363.5 Foreign Exchange Impact +148.1 +14.7 Change in Exchange Rate (Net Sales, Cost of Sales, Expenses) •1USD: 106.18 to 120.71 yen •1EURO: 140.62 to 134.82
Slide 21: Gross Profit Variance Analysis
Gross Profit Variance Analysis 3Q 2015 Actual v. 3Q 2014 Actual (Billions of yen) 3Q15 3Q14 Change (Billions of yen) Gross Profit 469.2 431.5 +37.7 % Sales 50.7% 49.5% +1.2pt. 100 52.4 50 37.7 12.3 10.0 0 -10.6 -26.4 -50 -100 Forex Sales Price Forex Cost Total Impact Volume Change Impact Reduction C
Slide 22: Operating Profit Variance Analysis
Operating Profit Variance Analysis 3Q 2015 Actual v. 3Q 2014 Actual (Billions of yen) 3Q15 3Q14 Change Op. Profit 77.3 71.8 +5.5 (Billions of yen) % Sales 8.3% 8.2% +0.1pt. 100 50 37.7 5.5 0 -17.9 -14.3 -50 -100 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Excludin
Slide 23: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 50 5.0% Debt Debt/Total Assets 40 4.0% 30 3.0% 20 2.0% 12 10 1.0% 4 0.3% 0.1% 3 2 2 0.1% 0.0% 0.0% 0 0.0% FYE11 FYE12 FYE13 FYE14 3QE15 Supplementary Information October 27, 2015 Canon Inc. 23
Slide 24: Financial Ratios
Financial Ratios (Yen) 900 15% 9.6% 600 10% 8.7% 8.4% 8.7% 7.6% 6.3% 5.7% 5.6% 5.9% 5.0% 300 5% 229.03 204.49 191.34 200.78 206.04 0 0% FY11 FY12 FY13 FY14 FY15 Current Projection EPS(Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information October 27, 2015 Canon Inc. 24