Slide 1: Canon Inc. First Quarter 2010 Results
Canon Inc. First Quarter 2010 Results April 26, 2010 Masahiro Haga Executive Officer, 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
Slide 2: Agenda
Agenda 1Q 2010 Results P3 – 7 FY 2010 Projections P8 – 11 Details by Business P12 – 19 Financial Situation P20 – 21 Supplementary Information P22 – 27 April 26, 2010 Canon Inc. 2
Slide 3: 1Q 2010 in Summary
1Q 2010 in Summary External Environment 9 Gradual global economic recovery, driven by Asia Results 9 Achieved double-digit sales growth 9 as consumer business remained strong and office business continued to recover 9 Raised gross profit ratio to nearly 50% 9 through improved capacity utilization an
Slide 4: Summary of Results
Summary of Results 1Q 2010 Actual (Billions of yen) 1Q 2010 1Q 2009 Pct. Change Actual Actual Net sales 755.5 687.0 +10.0% Gross profit 368.6 298.8 +23.3% [% sales] 48.8% 43.5% Op. profit 86.8 20.0 +333.5% [% sales] 11.5% 2.9% Net income attributable to 56.8 17.7 +220.2% Canon Inc. [% sales] 7.5% 2.
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 1Q 2010 Actual v. 1Q 2009 Actual (Billions of yen) Sales Op. Profit 1Q 2009 Actual 687.0 20.0 Change in Exchange Rate Foreign exchange impact •1USD: 93.86 to 90.63 yen -4.7 -4.0 •1EURO: 121.85 to 125.07 yen [net sales, cost of sales, expenses] Sales volume impact O
Slide 6: Steady Recovery in Performance
Steady Recovery in Performance Gross & Operating Profit Ratio (Gross Profit Ratio) (Operating Profit Ratio) 55% 25% 50% 49.6% 49.0% 48.8% 20% 48.2% 45.5% 17.0% 45.1% 45% 43.5% 43.5% 15% 14.5% 13.1% 42.4% 40% 11.5% 10% 9.7% 7.7% 35% 5.7% 5% Gross Profit Ratio Operating Profit 3.6% 2.9% 30% 0% 1Q08 2Q
Slide 7: Expense & Inventory Situation
Expense & Inventory Situation Expenses Inventory (Billions of yen) (Billions of yen) 400 Operating 700 Amount expenses Turnover (days) Excluding effect of new 350 58 consolidation Maintained 600 53 54 52 (45 days) 47 50 level Y/Y 47 49 300 39 500 381 386 664 250 346 342 614 329 582 301 289 282 507 5
Slide 8: Assumptions
Assumptions 2010 Current Projection Average 2Q-4Q10 FY10 FY09 Exchange Rate Yen-1USD 90.00 yen 90.14 yen 93.21 yen Yen-1EURO 125.00 yen 125.01 yen 130.46 yen Impact of Exchange Rate Movement (2-4Q impact given a one yen change) Net sales Operating profit USD 13.7 billion yen 6.8 billion yen
Slide 9: Key Points FY 2010
Key Points FY 2010 Assumption 9 Continuing trend of gradual global economic recovery Projections 9 Achieve sales and profit growth of all core businesses in 2010, “the first year in a new era of growth” 9 Raise profitability further through “improved management quality” 9 Strengthen ability to respo
Slide 10: Summary of Projected Results
Summary of Projected Results FY 2010 Current Projection (Billions of yen) (For reference) FY 2010 FY 2010 FY 2010 FY 2009 Pct. Change Current projection Current Previous Previous (excluding Actual Actual effects of new projection projection Projection consolidation) Net sales 3,750.0 3,450.0 3,209.2
Slide 11: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2010 Current Projection v. FY 2010 Previous Projection (Billions of yen) FY 2010 Sales Op. Profit Change in Exchange Rate Previous Projection (Jan. 27, 2010) 3,450.0 330.0 •1USD: 90.00 to 90.14 yen Foreign exchange impact •1EURO: 130.00 to 125.01 yen -23.8 -21.2
Slide 12: Office
Office 1Q 2010 Actual / FY 2010 Projection (Billions of yen) 1Q (Billions of yen) FY Sales 900 Growth rate y/y ( ) Local currency base 3,000 +24.2%(+27.3%) 600 2,000 +8.0%(+9.5%) 300 1,000 1,645 1,761 2,043 1,763 379 409 0 0 1Q09 1Q10 FY09 FY10 FY10 FY10 Previous Current Current projection projectio
Slide 13: Office (Copiers)
Office (Copiers) 1Q 2010 Actual / FY 2010 Projection Growth rate y/y (Unit base) Sales Copiers 1Q FY (Billions of yen) Growth rate y/y Color +36% +16% ( ) Local currency base Others Mono- +10% +7% 600 2,500 chrome Other printing devices Color copiers Total +17% +10% Monochrome copiers 2,043 2,000 40
Slide 14: Office (Other Printing Devices)
Office (Other Printing Devices) 1Q 2010 Actual / FY 2010 Projection Growth rate y/y (Unit base) Sales LP 1Q FY Growth rate y/y (Billions of yen) ( ) Local currency base Color +115% +46% Others 2,500 Mono- +135% +60% 600 Other printing devices chrome Color copiers Monochrome copiers 2,043 Total +131%
Slide 15: Consumer
Consumer 1Q 2010 Actual / FY 2010 Projection (Billions of yen) 1Q (Billions of yen) FY Sales 500 Growth rate y/y ( ) Local currency base 2,000 +6.4%(+9.2%) 400 +19.8%(+19.7%) 1,500 300 1,000 200 1,301 1,370 1,385 242 290 500 100 0 0 1Q09 1Q10 FY09 FY10 Previous FY10 Current projection projection Op.
Slide 16: Consumer (Cameras)
Consumer (Cameras) 1Q 2010 Actual / FY 2010 Projection Sales (Billions of yen) Growth rate y/y ( ) Local currency base Growth rate y/y 500 Others 2,000 (Unit base) IJP Cameras 1Q FY 400 Digital cameras +11% +7% 1,500 1,370 1,385 1,301 290 300 D SLR ratio* 242 1,000 1Q FY 200 Value 62% 60% base +6.9%
Slide 17: Consumer (IJP)
Consumer (IJP) 1Q 2010 Actual / FY 2010 Projection Sales (Billions of yen) Growth rate y/y ( ) Local currency base Growth rate y/y 500 Others 2,000 (Unit base) IJP Cameras 1Q FY 400 IJP +8% +3% 1,500 1,370 1,385 1,301 290 300 242 +5.8%(+7.9%) 1,000 +14.6%(+13.6%) 200 500 100 0 0 1Q09 1Q10 FY09 FY10
Slide 18: Industry and Others
Gross Sales (Includes sales Industry and Others among Group businesses) Net Sales Sales Elimination (Sales among 1Q 2010 Actual / FY 2010 Projection Group businesses) (Billions of yen) 1Q (Billions of yen) FY Gross Sales Sales 150 Gross Sales +11.2%(+11.7%) Growth rate y/y -4.1%(-4.3%) 450 Net Sales
Slide 19: Industry and Others (Litho.Equip.)
Industry and Others (Litho.Equip.) 1Q 2010 Actual / FY 2010 Projection 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 Lithography Equipment Corporate and eliminations FY10 1Q10 150 ArF
Slide 20: Capital Expenditure Free Cash Flow
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) Increase in PP&E Operating C/F 1,000 Net income attributable to Canon Inc. 1,000 Free C/F Depreciation Investing C/F 750 750 407 488 144 309 241 500 240 500 160 240 839 200 132 617 611 590 520 473 250 429 432 250 362 370 360 342
Slide 21: Cash on Hand
Cash on Hand (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 2.8 2.4 1,156 2.1 2.4 944 800 795 679 700 FYE06 FYE07 FYE08 FYE09 FYE10 FYE10 Previous Current Projection Projection Note 1: In 2007, 450 billion ye
Slide 22: Supplementary Information
Supplementary Information April 26, 2010 Canon Inc. 22
Slide 23: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2010 Current Projection v. FY 2009 Actual (Billions of yen) Sales Op. Profit FY 2009 Actual 3,209.2 217.1 Foreign exchange impact -83.2 -48.9 [net sales, cost of sales, expenses] Sales volume impact Office +185.8 Change in Exchange Rate (FY) Consumer +156.
Slide 24: Gross Profit Variance Analysis
Gross Profit Variance Analysis 1Q 2010 Actual v. 1Q 2009 Actual (Billions of yen) 1Q10 1Q09 Change (Billions of yen) Gross Profit 368.6 298.8 +69.8 % sales 48.8% 43.5% +5.3 pt. 150 100 69.8 47.4 50 32.3 1.7 0 -4.7 -6.9 -50 Forex Sales Price Forex Cost Total -100 impact volume change impact reduction
Slide 25: Operating Profit Variance Analysis
Operating Profit Variance Analysis 1Q 2010 Actual v. 1Q 2009 Actual (Billions of yen) 1Q10 1Q09 Change Op. Profit 86.8 20.0 +66.8 (Billions of yen) % sales 11.5% 2.9% +8.6 pt. 150 100 69.8 66.8 50 0 -2.0 -1.0 -50 -100 Total change in Change in Change in SG&A Total change in gross profit SG&A forex i
Slide 26: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 50 Debt Debt/Total Assets 5% 40 36 4% 31 30 27 3% 20 2% 14 10 0.9% 10 0.7% 0.6% 1% 0.4% 0.3% 0 0% FYE06 FYE07 FYE08 FYE09 1QE10 Excluding effects of new consolidation (0.3%) Supplementary Information April 26, 2010 Canon Inc. 26
Slide 27: Financial Ratios
Financial Ratios (Yen) 1,000 20% 16.3% 16.5% 800 15% 11.1% 10.6% 10.8% 600 8.7% 10% 7.3% 4.9% 377.59 400 341.95 6.2% 5% 246.21 3.4% 194.41 200 106.64 0% 0 -5% FY06 FY07 FY08 FY09 FY10 Current Projection EPS (Basic) ROE ROA (Attributable to Canon Inc) Note 1: EPS (Basic) has been adjusted to reflect