Canon Inc. · TSE:7751
Canon — Q1 2023 Earnings Presentation
23 slides from Canon's earnings presentation, Apr 26, 2023
Slide 1: Canon Inc. First Quarter 2023 Results
Canon Canon Inc. First Quarter 2023 Results April 26, 2023 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 formed by available information. All
Slide 2: Agenda
Canon Agenda @ 1Q 2023 Results P2-4 @ FY 2023 Projection P5-7 @ Details by Business P8 - 14 (1Q 2023 Results & FY 2023 Projection) @ Financial Situation P15 - 16 @ Sustainability Measures P17 @ Excellent Global Corporation Plan Phase VI P18 @ Supplementary Information P19 - 21
Slide 3: We began 2023 aiming for a third consecutive year of growth
We began 2023 - a year in which we aim to achieve our third consecutive year of sales and profit growth - facing various issues that could negatively impact the external environment, such as growing geopolitical risks and rapidly rising interest rates around the world. Since then, however, the rate
Slide 4: Results by business: Printing, Imaging, Medical, Industrial
As for Printing, although significant growth in the unit sales of office MFDs led to higher revenue, profit was lower, as printer consumable sales was impacted by the economy. As for Imaging, revenue increased more than 20% and profitability improved to 19.4%, thanks to new mirrorless cameras, which
Slide 5: Operating profit analysis: exchange rates, volume, pricing, expenses
As for exchange rates, the weaker yen had a positive effect of 14.3 billion yen on operating profit. As for changes in sales volume, increased sales of mainly office MFDs, medical equipment, and network cameras, contributed to profit growth. As for pricing, through sustained efforts to adjust prices
Slide 6: FY2023 projection and exchange rate assumptions
We did not change our exchange rate assumptions, which are 130 yen to the U.S. dollar and 140 yen to the euro. Although the degree of uncertainty regarding the global economic outlook remains high, mainly due to policy and monetary easing effects, we expect growth to continue, albeit at a moderate r
Slide 7: Plan for all four Business Units to achieve growth
Our plan calls for all four Business Units to achieve sales and profit growth. As for Printing, in response to solid demand, we will work to expand sales of office MFDs and inkjet printers in the second half of the year, and at the same time strive to raise profitability. In Imaging, thanks to stron
Slide 8: FY2023 operating profit projection analysis
Changes in exchange rates are projected to have a negative impact of 19.4 billion yen on operating profit. As for changes in sales volume, we expect positive contribution on the sales of all four business units. As for pricing, supported by high product competitiveness, we will work to maintain pric
Slide 9: Printing: office MFDs demand and unit sales
As for office MFDs, we expect demand to remain firm for printing equipment offering high image quality, high print speed, exceptional durability, and other features that contribute to operational efficiency in the office. In the first quarter, we increased unit sales by 28%, thanks to a significant
Slide 10: Printing: laser printers and diversifying needs
Printing needs are becoming more diverse due to decentralization of the workplace. As a result, demand for printing equipment suitable for each type of office is increasing. For laser printers in the first quarter, impacted by the economy, unit sales, particularly of low-end models, declined. Sales
Slide 11: Printing: Colorado M series and production printing
Though some small- and medium-size printing companies have become more cautious in their investment decisions due to the rise in interest rates, supported by our product lineup that we constantly strengthen through customer feedback, we maintained unit sales growth and also increased service revenue
Slide 12: Imaging: mirrorless cameras demand
Amid a recovery in travel and other leisure activities, demand for cameras was firm, and new mirrorless cameras launched by each company stimulated buying interest. In the first quarter, our sales of new mirrorless cameras, such as the EOS R7, EOS R10, and EOS R6 Mark II, which were launched last ye
Slide 13: Imaging: network cameras and SPAD sensor
The network camera market continues to grow, thanks mainly to the security sector, due to the growing need for security and safety. Our first-quarter sales were ahead of plan and second only to last year's fourth quarter, resulting in a significant increase in revenue. We will continue to capture de
Slide 14: Medical: diagnostic imaging equipment market
As for the diagnostic imaging equipment market in 2023, through a recovery in investment in large equipment such as MRI and X-Ray systems, which was postponed due to the impact of COVID-19, the market is expected to grow at a typical rate of around 2%. In the first quarter, in response to orders tha
Slide 15: Industrial: semiconductor lithography equipment
As for the semiconductor device market, given that the market for memory chips remains in a phase of adjustment, we expect a transitory decline in 2023. Still, demand for power devices, analog devices, and sensors, remains solid, and we are starting to see signs of recovery in the memory market as p
Slide 16: Inventory and parts procurement
Finished goods inventory at the end of March was more than 30 billion yen higher than at the end of December 2022. This reflects increases in the amount of network cameras, medical equipment, semiconductor lithography equipment, and other products, to prepare for sales expansion from April. As for p
Slide 17: Cash flow, investments and shareholder returns
This year, in addition to increasing net income, by reducing the level of inventory and accounts receivable, which increased last year, we plan to generate operating cash flow in excess of 600 billion yen. And in the first quarter, we generated profit in line with our plan. As for investments, we ha
Slide 18: ESG activities and CO2 reduction
To sustainably increase corporate value, we believe it is important to enhance both ESG activities and information disclosure. As part of our efforts to reduce CO2 emissions, in collaboration with multiple companies from different industries in the Kiyohara Industrial Park in Utsunomiya City, Tochig
Slide 19: Excellent Global Corporation Plan Phase VI
In the first quarter of this year, which marks the halfway point of Phase VI of our Global Excellent Corporation Plan, as expected, we got off to a good start, posting our fifth consecutive quarter of sales and profit growth, and maintaining a high level of profitability. From the second quarter as
Slide 20: Supplementary Information
Supplementary Information
Slide 21: FY 2023 Operating Profit Analysis
FY 2023 Operating Profit Analysis Canon (FY 2023 Current Projection versus Previous Projection) (Billions of yen) +0.0 +10.0 +0.0 +0.0 wetel0.. Change in Net Sales, excluding FX impact, for reference Imaging: +26.0 380.0 FY 2023 FX Sales Volume Pricing Cost Op. Expense FY 2023 Previous /Product Mix
Slide 22: Printing: Net Sales Growth Rate Y/Y
Canon Printing — Net Sales Growth Rate Y/Y (Hardware & Non-hardware) FY 2022 Full Year 1a Full Year Previous aie Actual Actual Projection spy Hardware +11%| -4% +30%) Non-hardware +12% +5% +5% +6% +10% Office MFDs Lc Hardware +27% +12%| +12%| -9% +17% Non-hardware +4% +5% +5% +3% +2% spy Hardware +1
Slide 23: Office/Prosumer Net Sales by Product Category
Canon Office/Prosumer - Net Sales by Product Categor Billions of yen) FY 2022 1Q Full Year Actual Actual Office MFDs 116.3 567.8) Office [Others 77.7 321.1 194.0 888.9 LPs 150.2 651.2) Prosumer |IJPs 89.7 370.1 239.9 1,021.3 Semiconductor Lithography Equipment- Unit Breakdown by Light Source (Units)