Slide 1: Canon Inc. Third Quarter 2022 Results
Canon Canon Inc. Third Quarter 2022 Results October 26, 2022 This presentation contains forward-looking statements with respect to future results, performance and achievements that are subjed to risk and uncertainties and reflec management's views and assumptions formed by available information. All
Slide 2: Agenda
Canon Agenda @ 3Q 2022 Results P2-4 @ FY 2022 Projection P5-7 @ Details by Business P8- 14 (3Q 2022 Results & FY 2022 Projection) @ Financial Situation P15 - 16 @ Sustainability Measures P17 @ Excellent Global Corporation Plan Phase VI P18 @ Supplementary Information P19 - 21
Slide 3: 3Q 2022 results summary
In the first half of the year, we were unable to supply enough products to meet demand due to the shortage of semiconductors and other parts and components, which was made worse by Shanghai’s lockdown. However, in the third quarter, by further promoting design changes and the procurement of alternat
Slide 4: Results by business unit
Next, a look at our Business Units, starting with Printing. Through a recovery in product supply, thanks to the abatement of material shortages, we significantly exceeded the unit sales of last year in each printing category, which contributed to revenue growth. As for profit, lower non-hardware sal
Slide 5: Factors impacting operating profit
Next, factors impacting operating profit. As for changes in foreign exchange rates, due to significant depreciation of the yen against the U.S. dollar and euro, the impact on operating profit was a positive 24.8 billion yen. As for changes in sales volume, due to an increase in product supply volume
Slide 6: FY 2022 projection and exchange rate assumptions
As for our exchange rate assumptions for the fourth quarter, taking into account the current situation, we assumed 148 yen to the U.S. dollar and 144 yen to the euro. As for the global economy, we have not been seeing any signs that historically high inflation, due to the shortage of goods and rise
Slide 7: FY 2022 projection by business
When you look at our businesses, you see that we plan to post sales and profit growth in all four Business Units. Compared with our previous projection, we lowered our outlook for Printing, due to a decline in demand. However, overall, we expect to exceed our previous projection, as we foresee signi
Slide 8: Operating profit factors versus previous projection
Next, factors impacting operating profit compared to our previous projection. As for changes in foreign exchange rates, reflecting third quarter results, and our revised assumption that the yen will be weaker than we previously expected, the impact was a positive 25.2 billion yen. As for changes in
Slide 9: Printing: office MFDs market and production
In the printing equipment market, thanks to recovery in the number of people coming into the office, the replacement of office MFDs that was stagnant for a time during COVID-19, is progressing. For printers, however, demand decreased, reflecting decline in work from home. In the third quarter, we we
Slide 10: Printing: laser and inkjet printers
In the third quarter, as we were able to increase production in line with our plan, unit sales of laser printers and inkjet printers exceeded those of last year by 20% and 30%, respectively. However, in Europe, the United States, and Asia, we are seeing a decline in print demand due to the topping o
Slide 11: Printing: commercial printing
Even in the commercial printing area, a decline in printed material due to economic slowdown or restrained investment due to rising interest rates are cause for concern. At the same time, rising energy and paper costs, as well as labor shortages at the sites of printing companies, are accelerating t
Slide 12: Imaging: cameras and lenses
Demand for cameras remains solid, even amid economic slowdown, thanks to the launch of new mirrorless models and interchangeable lenses by each company. As a result, we expect the market in 2022 to be 5.45 million units, a slight increase compared to last year. In the third quarter, thanks to the hi
Slide 13: Imaging: network cameras
As for network cameras, amid ongoing global instability resulting from such factors as the COVID-19 infection and Russia-Ukraine conflict, the need for safety and security remains strong. And with continued infrastructure investment, we posted double-digit sales growth in the third quarter, a contin
Slide 14: Medical: diagnostic imaging equipment
In the diagnostic imaging equipment market, investment toward large equipment, such as CT and MRI systems, which was restrained by the pandemic, is recovering, especially in Europe and the United States. In the third quarter, we achieved year-on-year revenue growth, particularly in Europe and Asia,
Slide 15: Industrial: semiconductor lithography equipment
In the 2022 semiconductor device market, though we are seeing a slowdown in demand for memory used in PCs and mobile devices, demand for such things as power devices and logic is growing strong. From this, we expect the market to further expand, exceeding that of last year, which was over 500 billio
Slide 16: Inventory and fourth quarter production
In the third quarter, production went basically as planned, except for some products. As a result, inventory at the end of September was 883.9 billion yen, due to an increase in finished goods. As for the fourth quarter, in addition to expanded sales of consumer products such as cameras and inkjet p
Slide 17: Cash flow, investment and shareholder returns
In the fourth quarter of this year, due to significant growth in sales, we expect an increase in year-end receivables. Though this will slightly decrease operating cash flow we still plan to generate 430 billion yen for the full year. We are increasing our capital investment for the future, which wa
Slide 18: Sustainability: biodiversity conservation
In this year’s Global Risks Report, published by the World Economic Forum, biodiversity loss was ranked high. For this and other reasons, the conservation of ecosystems as a common global issue has recently received more focused attention. Under the slogan of Nature Positive, which aims to halt and
Slide 19: Excellent Global Corporation Plan Phase VI
Up to now, Canon has been expanding its diverse businesses by transforming its business portfolio. We have established a structure in which each business complements each other's ups and downs, during times of economic instability etc. Even amid the slight decline in demand for printing that we are
Slide 20: Supplementary Information
Supplementary Information
Slide 21: FY 2022 Operating Profit Analysis
FY 2022 Operating Profit Analysis Canon (FY 2022 Current Projection versus FY 2021 Actual) Change in Net Sales, excluding FX impact, for reference Printing: +117.0 an Imaging: +50.3 (Billions of yen) Medical: nas Industrial & Others: +31.8 Eliminations: -23.5 FX Details “otak 180.1 Net Sales: +362.4
Slide 22: Printing — Net Sales Growth Rate Y/Y
Printing — Net Sales Growth Rate Y/Y (Hardware & Non-hardware) Canon FY 2022 FY 2021 3Q, Full Year 3Q Full Year Actual Projection Actual Actual ypy Nercware -11% +7%| Non-hardware +14% +10% +4% +3%| Office MFDs ic | Hardware +54% +26% “14% +39%| Non-hardware +3% +1%| +1% 0% spy Hardware +53% +36% -1
Slide 23: Office/Prosumer — Net Sales by Product Category
Office/Prosumer — Net Sales by Product Category (Billions of yen) F Fy 2021 3Q Full Year Actual Actual Office MFDs 150.6) 592.2 107.6 478.4 Office others 78.9 322.7 66.8 278.7 229.5 914.9 174.4 757.1 LPs 151.5 655.8 137.1 563.1 Prosumer |DPs 77.5 367.6 78.5 329.4 229.0 1,023.4 215.6 892.5 DILC Ratio