Slide 1: Canon Inc. FY 2009 Results
Canon Inc. FY 2009 Results January 27, 2010 Masahiro Osawa Managing Director, Group Executive Finance and Accounting Headquarters This presentation contains forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect
Slide 2: Agenda
Agenda 4Q/FY 2009 Results P3 – 17 FY 2010 Projections P18 – 31 Supplementary Information P32 – 40 Jan. 27, 2010 Canon Inc. 2
Slide 3: FY 2009 in Summary
FY 2009 in Summary Reinforced financial strength, despite lower net sales and profits, through “improved management quality” 9 Achieved record-low inventory turnover in days (39 days) 9 Achieved record-high stockholders’ equity ratio (70%) Achieved a steady recovery in performance through “Improved
Slide 4: Summary of Results
Summary of Results 4Q/FY 2009 Actual (Billions of yen) (For Reference) 2009 Actual 2009 2008 Pct. Change (Excluding Forex Impact) Previous Previous Actual % Sales % Sales Actual % Sales Actual Amt. % Sales Projection Projection Net sales 954.1 944.9 994.7 +1.0% -4.1% 956.5 Gross profit 433.8 45.5% 3
Slide 5: 2009 Achievements: Inventories
2009 Achievements Inventories (Billions of yen) 800 Amount Turnover (days) 700 664 614 58 582 54 52 50 600 563 47 53 39 507 500 47 500 44 134 Bil. Yen 424 427 reduction 400 373 300 4QE07 1QE08 2QE08 3QE08 4QE08 1QE09 2QE09 3QE09 4QE09 Jan. 27, 2010 Canon Inc. 5
Slide 6: 2009 Achievements: Expenses & Capital Expenditures
2009 Achievements Expenses & Capital Expenditures Expenses Capital Expenditures (Billions of yen) (Billions of yen) 1,600 Operating expenses Increase in PP&E 232 Bil. Yen 1,000 Net income attributable to Canon Inc. reduction Depreciation 1,400 750 488 309 1,200 455 500 1,490 1,442 132 1,000 1,210 25
Slide 7: 2009 Achievements: Shareholders' equity ratio
2009 Achievements Shareholders’ equity ratio (%) 75 Shareholders' equity ratio 70 70 67 66 64 65 65 60 FY05 FY06 FY07 FY08 FY09 Note: In 2007, 450 billion yen was used to acquire own share. In 2008, 100 billion yen. Jan. 27, 2010 Canon Inc. 7
Slide 8: 2009 Achievements: Cash on Hand and Return to Shareholders
2009 Achievements Cash on Hand and Return to Shareholders Cash on Hand (Year-end) Dividend (Billions of yen) *Dividend per share has been adjusted to reflect a 3- for-2 forward stock split (effective date July 1, 2006) 3.1 Cash on hand Cash on hand (In months of 2nd-half net sales) Dividend per shar
Slide 9: 2009 Achievements: Steady Recovery in Performance
2009 Achievements Steady Recovery in Performance Operating Profit Ratio 30% 23.6% 21.5% 21.3% 20.9% 20.6% 20.8% 20% 18.2% 17.0% 20.1% 18.1% 17.4% 15.8% 14.9% 14.5% 13.1% 13.1% 11.5% 9.7% 10% 11.3% 7.7% Business machines 5.7% Cameras 3.6% 4.7% Company total 2.9% 0% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Slide 10: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 4Q 2009 Actual v. Projection (Billions of yen) Sales Op. Profit 4Q 2009 Projection (Oct. 27, 2009) 944.9 65.1 Change in Exchange Rate Foreign exchange impact +2.5 +4.9 •1USD: 90.00 to 89.68 yen [net sales, cost of sales, expenses] •1EURO: 130.00 to 132.54 yen Sales
Slide 11: Business Machines
Business Machines 4Q/FY 2009 Actual (Billions of yen) 4Q (Billions of yen) FY 900 3,000 Sales Growth rate y/y ( ) Local currency base 600 2,000 -5.7%(-4.4%) -24.4%(-17.7%) 2,660 300 620 608 585 1,000 2,035 2,011 0 0 4Q08 4Q09 4Q09 FY08 FY09 FY09 Previous Previous projection projection OP ratio Op. 3
Slide 12: Office Imaging Products
Office Imaging Products 4Q/FY 2009 Actual Growth rate y/y Sales (Unit base) (Billions of yen) Growth rate y/y Copying 4Q FY ( ) Local currency base machines 600 Others 2,000 Color +5% -17% Color Mono- -12% -26% Monochrome chrome 1,500 Total -8% -24% 400 1,120 Color ratio -26.0%(-19.7%) -12.3%(-12.5%
Slide 13: Computer Peripherals
Computer Peripherals Growth rate y/y 4Q/FY 2009 Actual (Unit base) LBP 4Q FY Sales Color -6% -42% Mono- -9% -47% (Billions of yen) Growth rate y/y chrome ( ) Local currency base 600 2,000 Total -8% -47% Others IJP LBP 1,455 -1.9%(+0.5%) 1,500 -23.7%(-16.7%) Color ratio (LBP) 400 351 363 344 1,128 4Q
Slide 14: Cameras
Cameras 4Q/FY 2009 Actual (Billions of yen) 4Q (Billions of yen) FY 500 1,500 Sales Growth rate y/y ( ) Local currency base 400 1,000 300 -9.5%(-0.1%) 200 +15.2%(+17.3%) 303 500 1,042 943 263 277 918 100 0 0 4Q08 4Q09 4Q09 FY08 FY09 FY09 Previous Previous projection projection OP ratio Op. 150 OP ra
Slide 15: Cameras
Cameras 4Q/FY 2009 Actual Sales Growth rate y/y (Unit base) (Billions of yen) Growth rate y/y 4Q FY ( ) Local currency base 600 Video cameras 2,000 Digital 0% -6% cameras Digital cameras Interchangeable lenses and others D SLR ratio* 4Q FY +15.2%(+17.3%) 1,500 Value 51% 49% 400 -9.5%(-0.1%) base 303
Slide 16: Optical and Other Products
Optical and Other Products 4Q/FY 2009 Actual (Billions of yen) 4Q (Billions of yen) FY Sales 200 Growth rate y/y 600 ( ) Local currency base 150 400 100 -35.0%(-31.8%) -40.4%(-39.1%) 200 392 50 112 248 255 59 67 0 0 4Q08 4Q09 4Q09 FY08 FY09 FY09 Previous Previous projection projection OP ratio OP ra
Slide 17: Optical and Other Products
Optical and Other Products 4Q/FY 2009 Actual Sales Growth rate y/y (Billions of yen) ( ) Local currency base IC Stepper Unit Breakdown IC Stepper Unit Breakdown by Light Source 200 Others by Light Source 600 SPE FY09 4Q09 ArF 150 ArF 2 0 392 immersion immersion -35.0%(-31.8%) 112 -40.4%(-39.1%) 400
Slide 18: Change in Disclosure Segments
Change in Disclosure Segments FY 2010 Previous Current Business Office • B/W copying machines Office •B/W copying machines Imaging • Color copying machines •Color copying machines Machines Products • Others (SOHO,Solutions etc) •Other printing devices Computer • Laser beam printers ( Laser beam prin
Slide 19: Assumptions
Assumptions FY 2010 Average FY10 FY09 Exchange Rate Yen-1USD 90.00 yen 93.21 yen Yen-1EURO 130.00 yen 130.46 yen Impact of Exchange Rate Movement (FY10 impact given a one yen change) Net sales Operating profit USD 15.5 billion yen 8.2 billion yen EURO 6.4 billion yen 4.6 billion yen Jan. 27,
Slide 20: Key Points
Key Points FY 2010 Economic environment 9 Global economy – “L Shaped” recovery Projected performance 9 Raise net sales and achieve more than 50% increase in profits 9Realize new growth in 2010, “the first year in a new era of growth” 9 Maintain strong momentum of consumer products and expand sales o
Slide 21: Summary of Projected Results
Summary of Projected Results FY 2010 Projection (Billions of yen) FY 2010 FY 2009 Projection Actual Pct. change Net sales 3,450.0 3,209.2 +7.5% Gross profit 1,590.0 1,427.4 +11.4% [% sales] 46.1% 44.5% Op. profit 330.0 217.1 +52.0% [% sales] 9.6% 6.8% Net income 200.0 131.6 +51.9% attributable to Ca
Slide 22: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2010 Projection v. FY 2009 Actual (Billions of yen) Sales Op. Profit FY 2009 Actual 3,209.2 217.1 Change in Exchange Rate Foreign exchange impact -55.2 -25.2 •1USD: 93.21 to 90.00 yen [net sales, cost of sales, expenses] •1EURO: 130.46 to 130.00 yen Sales volume
Slide 23: FY 2010 Office
FY 2010 Office A “Turnaround” led by imageRUNNER ADVANCE (Billions of yen) FY Sales 3,000 Growth rate y/y ( ) Local currency base x.x%(x.x%) 2,000 +7.0%(+9.2%) 1,000 1,761 1,645 0 FY09 FY10 Projection Op. Op ratio 400 Profit +25.1% 300 16.3% 200 13.9% 100 287 229 0 FY09 FY10 Projection Jan. 27, 2010
Slide 24: Office (Copying machines)
Office (Copying machines) Sales Growth rate y/y (Unit base) (Billions of yen) Growth rate y/y Copying FY ( ) Local currency base machines 2,500 Others Other printing devices Color +13% Color copying machines +7.0%(+9.2%) Mono- B/W copying machines +2% 2,000 chrome 1,761 1,645 Total +5% 1,500 Color r
Slide 25: Office (Other printing devices)
Office (Other printing devices) Growth rate y/y Sales (Unit base) LP FY (Billions of yen) Growth rate y/y ( ) Local currency base Color +43% Mono- 2,500 Others +41% Other printing devices chrome Color copying machines +7.0%(+9.2%) Total +41% B/W copying machines 2,000 1,761 1,645 Color ratio 16% (Un
Slide 26: FY 2010 Consumer
FY 2010 Consumer A further reinforcement of product competitiveness (Billions of yen) FY Sales 3,000 Growth rate y/y ( ) Local currency base x.x%(x.x%) 2,000 +5.3%(+7.2%) 1,000 1,301 1,370 0 FY09 FY10 Projection Op. 400 Op ratio Profit 300 +16.6% 15.6% 14.1% 200 xx.x% 100 183 214 0 FY09 FY10 Project
Slide 27: Consumer (Cameras)
Consumer (Cameras) Sales (Billions of yen) Growth rate y/y Growth rate y/y ( ) Local currency base (Unit base) 2,500 Others IJP FY Cameras Digital cameras +6% 2,000 +5.3%(+7.2%) D SLR ratio* FY 1,500 1,301 1,370 Value base * 58% 1,000 Unit base 18% * Percentage of cameras sales 500 attributable to S
Slide 28: Consumer (IJP)
Consumer (IJP) Sales (Billions of yen) Growth rate y/y Growth rate y/y ( ) Local currency base (Unit base) 2,500 Others FY IJP Cameras IJP +3% 2,000 +5.3%(+7.2%) 1,500 1,370 1,301 1,000 +5.8%(+6.9%) 500 0 FY09 FY10 Projection Jan. 27, 2010 Canon Inc. 28
Slide 29: FY 2010 Industry and Others
FY 2010 Industry and Others (Billions of yen) FY Growth rate y/y ( ) Local currency base Net Sales Sales 450 319 +21.5%(+22.1%) Net Sales 263 x.x%(x.x%) 300 358 401 Gross Sales Gross Sales 150 +12.1%(+12.5%) (Includes sales among Group businesses) 0 -95 -82 Sales Elimination -150 FY09 FY10 (Sales am
Slide 30: Industry and Others (SPE)
Industry and Others (SPE) IC Stepper Unit Breakdown Sales by Light Source (Billions of yen) Growth rate y/y FY10 Projection ( ) Local currency base ArF immersion 0 ArF dry 0 Others SPE KrF 1 Corporate and eliminations i-line 11 600 SPE (Units) +21.5%(+22.1%) FY09 FY10 Projection 263 319 IC 13 12 350
Slide 31: "Turnaround" to Strong Growth Track
“Turnaround” to Strong Growth Track Growth rate Y/Y 60% 52.0% 30% 14.9% 5.0% 7.5% 11.0% -2.5% 0% -7.9% -0.2% -14.9% -14.4% -12.7% -29.9% -30% -55.1% -60% Net Sales Op. Profit -80.4% -90% 1H07 2H07 1H08 2H08 1H09 2H09 FY10 Projection Jan. 27, 2010 Canon Inc. 31
Slide 32: Supplementary Information
Supplementary Information Jan. 27, 2010 Canon Inc. 32
Slide 33: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit 4Q/FY 2009 Actual v. 4Q/FY 2008 Actual (Billions of yen) 4Q FY Sales Op. Profit Sales Op. Profit 2008 Actual 994.7 35.8 4,094.2 496.1 Foreign exchange impact -2.4 +6.6 -249.5 -138.3 [net sales, cost of sales, expenses] Change in Exchange Rate (4Q) Sales volum
Slide 34: Gross Profit Variance Analysis
Gross Profit Variance Analysis 4Q 2009 Actual v. 4Q 2008 Actual 4Q09 4Q08 Change (Billions of yen) Gross Profit 433.8 421.4 +12.4 % sales 45.5% 42.4% +3.1 pt. 100 50 23.5 23.1 8.6 12.4 0 -2.4 -20.6 -19.8 -50 Forex Sales Price Forex Cost Others Total -100 impact volume change impact reduction change
Slide 35: Operating Profit Variance Analysis
Operating Profit Variance Analysis 4Q 2009 Actual v. 4Q 2008 Actual 4Q09 4Q08 Change Op. Profit 92.1 35.8 +56.3 (Billions of yen) % sales 9.7% 3.6% +6.1 pt. 100 75 56.3 50 43.5 25 12.4 0.4 0 -25 Total change in Change in Change in SG&A Total change in -50 gross profit SG&A forex impact operating pro
Slide 36: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) Debt 50 5% Debt/Total Assets 40 4% 32 31 30 27 3% 20 2% 14 0.8% 10 10 0.7% 0.6% 1% 0.4% 0.3% 0 0% FYE 05 FYE 06 FYE 07 FYE 08 FYE 09 Supplementary Information Jan. 27, 2010 Canon Inc. 36
Slide 37: Capital Expenditure Free Cash Flow
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) 1,000 Increase in PP&E Operating C/F Net income attributable to Canon Inc. 1,000 Depreciation Free C/F Investing C/F 750 750 407 488 144 309 241 500 500 160 839 200 132 617 611 520 473 250 429 432 250 362 342 341 370 360 315 300
Slide 38: Cash on Hand
Cash on Hand Cash on Hand (Year-end) (Billions of yen) Cash on hand 3.1 Cash on hand (In months of 2nd-half net sales, except FYE10, which is based on full-year net sales) 2.8 1,156 2.4 2.4 2.1 944 795 679 700 FYE06 FYE07 FYE08 FYE09 FYE10 Projection Note: In 2007, 450 billion yen was used to acquir
Slide 39: Financial Ratios
Financial Ratios (Yen) 1,000 20% 16.0% 16.3% 16.5% 800 15% 11.1% 10.1% 10.6% 10.8% 600 7.4% 10% 7.3% 4.9% 377.59 400 341.95 5% 288.63 5.1% 246.21 3.4% 162.01 200 106.64 0% 0 -5% FY05 FY06 FY07 FY08 FY09 FY10 Projection EPS (Basic) ROE ROA (Attributable to Canon Inc.) * EPS (Basic) has been adjusted
Slide 40: Summary of Projected Results
Summary of Projected Results New segment base FY 2009 Actual / FY 2010 Projection FY 2009 FY 2010 Growth Rate Net Sales Op. Profit Net Sales Op. Profit Net Sales Op. Profit Office 1,645.1 229.4 1,760.9 287.0 +7.0% +25.1% Consumer 1,301.2 183.5 1,369.5 213.9 +5.3% +16.6% Industry and Others 358.0 -76