Slide 1: Canon Inc. FY 2020 Results
Canon Inc. FY 2020 Results January 28, 2021 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 assumptions forme
Slide 2: Agenda
Agenda FY 2020 Results P2 – 4 FY 2021 Projection P5 – 8 Details by Business P9 – 16 (FY 2020 Results & FY 2021 Projection) Financial Situation P17 – 18 Sustainability Measures P19 Supplementary Information P20 – 33 1
Slide 3: Key Message (FY 2020 Results)
Key Message (FY 2020 Results) External environment COVID-19 completely changed business environment outlook held at beginning of year and global economy suffered record contraction Business performance Implemented additional forward-looking structural reforms Profit gradually recovered after b
Slide 4: FY 2020 Financial Results (Full Year)
FY 2020 Financial Results (Full Year) Exceeded previous sales and profit projection Operating profit surpassed 110 billion yen, profitability improved with each passing quarter FY 2020 FY 2020 FY 2019 Amount (Billions of yen) % Change Previous Actual Actual Change Projection Net Sales 3,160.2 3,
Slide 5: FY 2020 Financial Results by Business Unit
FY 2020 Financial Results by Business Unit (Full Year) Posted increase in Imaging System profit, achieved a double-digit profit ratio Did not reach previous projection for sales of Industry & Others due to changes in equipment installation plan FY 2020 FY 2020 FY 2019 Amount (Billions of yen) %
Slide 6: Key Message (FY 2021 Projection)
Key Message (FY 2021 Projection) Impact of exchange rate movement FX Assumptions （Annual impact given a one yen change） FY 2020 FY 2021 Net Sales Op. Profit USD/Yen 106.68 yen 105.00 yen 10.9 billion yen 4.0 billion yen EUR/Yen 122.07 yen 120.00 yen 5.6 billion yen 2.5 billion yen External Environme
Slide 7: FY 2021 Financial Projection (Full Year)
FY 2021 Financial Projection (Full Year) Sales and profit growth for first time in four years Limit expenses through efficiency in business activity (For Reference) 2021 2020 2019 (Billions of yen) % Change Projection Actual Actual Net Sales 3,400.0 3,160.2 +7.6% 3,593.3 Gross Profit 1,506.0 1,3
Slide 8: FY 2021 Financial Projection by Business Unit
FY 2021 Financial Projection by Business Unit (Full Year) Sales and profit growth in all Business Units Expect Office, Medical System, and Industry & Others profitability to improve as well as second consecutive year of double-digit Imaging System profitability 2021 2020 (For Reference) 2019 (Bi
Slide 9: FY 2021 Operating Profit Analysis
FY 2021 Operating Profit Analysis (FY 2021 Projection versus FY 2020 Actual) Targeting 158.5 billion yen in operating profit thanks to recovery in sales and efforts to limit increase in expenses (Billions of yen) FX Details Net Sales: -27.6 Cost of Sales: +12.9 Op. Expenses: +8.0 Change in Net Sal
Slide 10: Office – MFDs
Office – MFDs Trend of gradual market recovery in both hardware and print volume Expand market share in 2021 through new products that have increased price competitiveness (Billions of yen) Full Year Full Year 2020 2020 2019 % Amount 2021 2020 % Previous Actual Actual Change Change Projection Ac
Slide 11: Office – Laser Printers
Office – Laser Printers Decrease in 2020 net sales due to lower unit sales of medium- and high- speed equipment for office Raise profitability in 2021 through stable sales of consumables and optimization of fixed costs (Billions of yen) Full Year Full Year 2020 2020 2019 % Amount 2021 2020 % Pre
Slide 12: Office – Others
Office – Others Aim for sales growth in 2021 through enhancement of product lineup and expansion of sales network (Billions of yen) Full Year Full Year 2020 2020 2019 % Amount 2021 2020 % Previous Actual Actual Change Change Projection Actual Change Projection MFDs 510.0 645.6 -21.0% 513.0 -3.0 58
Slide 13: Imaging System – Cameras
Imaging System – Cameras Improved profitability from the second half of 2020, launching EOS R5 and EOS R6 Decrease in 2021 market limited to 3% Further strengthen EOS R system. Improve product mix and increase sales (Billions of yen) Full Year Full Year 2020 2020 2019 % Amount 2021 2020 % Prev
Slide 14: Imaging System – Inkjet Printers
Imaging System – Inkjet Printers Increased 2020 sales, capturing expanding work and learn from home demand 2021 market - Continued home demand, primarily in developed countries, and growth in emerging markets Strengthen lineup, raising competitiveness of refillable ink tank models. Work toward
Slide 15: Medical System
Medical System Sales and profit growth in 2020, on a local currency basis, even amid COVID-19 crisis Targeting 5.5% sales growth in 2021, expanding sales of mid-range and high-end models as well as strengthening sales capability (Billions of yen) Full Year Full Year 2020 2020 2019 % Amount 2021
Slide 16: Industry & Others – Lithography Equipment
Industry & Others – Lithography Equipment IC lithography equipment - Market remains strong, grow unit sales FPD lithography equipment - Targeting 68 unit sales in 2021, thanks to robust demand (Billions of yen) Full Year Full Year 2020 2020 2019 % Amount 2021 2020 % Previous Actual Actual Change
Slide 17: Industry & Others – Others
Industry & Others – Others Advance ultra-high resolution technology and maintain high share of OLED vacuum deposition equipment in 2021 Target double-digit network camera growth in 2021, in market that has returned to growth (Billions of yen) Full Year Full Year 2020 2020 2019 % Amount 2021 2020
Slide 18: Inventory
Inventory Focused on maintaining appropriate inventory levels in 2020, even in the wake of COVID-19 Continue to carefully manage inventory in response to changes in market conditions also in 2021 FY 2019 FY 2020 (Billions of yen) Mar.-end Jun.-end Sep.-end Dec.-end Mar.-end Jun.-end Sep.-end Dec
Slide 19: Cash Flow (Full Year)
Cash Flow (Full Year) Secured 178.4 billion yen in free cash flow in 2020, exceeding previous year Strengthen financial constitution, increasing free cash flow also in 2021 FY 2021 FY 2020 FY 2019 Projection Actual Actual (Billions of yen) Net cash provided by operating activities 380.0 333.8 35
Slide 20: Sustainability Measures
Sustainability Measures Major results from 2020 environmental and CSR activities ■Continued achievement of target - Average 3% per year ■CDP A List Selection improvement in Lifecycle CO2 emissions per product unit LCCO2 Improvement index (Compared with 2008) Target - 3% 1.0 avg. yrly. improvement Cl
Slide 21: Supplementary Information
Supplementary Information 20
Slide 22: FY 2020 Operating Profit Analysis (vs FY 2019 Actual)
FY 2020 Operating Profit Analysis (FY 2020 Actual versus FY 2019 Actual) Change in Net Sales, excluding FX FX Details impact, for reference (Billions of yen) Net Sales: -27.2 Office: -291.2 Cost of Sales: +12.4 Imaging System: -93.8 Op. Expenses: +8.4 Medical System: +3.8 Industry & Others: -21.1 To
Slide 23: FY 2020 Operating Profit Analysis (vs Previous Projection)
FY 2020 Operating Profit Analysis (FY 2020 Actual versus FY 2020 Previous Projection) Change in Net Sales, excluding FX impact, for reference (Billions of yen) Office: +6.7 Imaging System: +19.9 FX Details Medical System: +4.5 Net Sales: -0.5 Industry & Others: -16.1 Cost of Sales: +0.7 Total: +15.0
Slide 24: New Businesses Sales Composition Ratio
Change in New Businesses Sales Composition Ratio New Businesses Exsiting Businesses 100% 80% 60% 40% 20% 25% 28% 28% 0% FY 2019 FY 2020 FY 2021 Actual Actual Projection 23
Slide 25: Net Sales Growth Rate of Hardware & Non-hardware
Net Sales Growth Rate of Hardware & Non-hardware FY 2021 FY 2020 FY 2019 Full Year 4Q Full Year 4Q Full Year Projection Actual Actual Actual Actual MFDs Hardware +21% -11% -22% -10% -7% JPY Non-hardware +9% -18% -20% -5% -5% Hardware +22% -11% -21% -6% -4% LC Non-hardware +10% -18% -20% -2% -2% LPs
Slide 26: Color Ratio (MFDs & LPs)
Color Ratio (MFDs & LPs) FY 2021 FY 2020 FY 2019 Full Year 4Q Full Year 4Q Full Year Projection Actual Actual Actual Actual Net Sales 61% 61% 60% 60% 59% MFDs Units 61% 60% 59% 58% 59% Net Sales 52% 51% 51% 51% 52% LPs Units 23% 21% 21% 21% 20% Sales Growth by Monochrome & Color MFDs FY 2021 FY 2020
Slide 27: DILC Ratio / DCC Units / IC Lithography Unit Breakdown
DILC Ratio / Digital Compact Camera (DCC) Units FY 2021 FY 2020 FY 2019 Full Year 4Q Full Year 4Q Full Year Projection Actual Actual Actual Actual DILC Ratio Net Sales * 87% 88% 87% 86% 85% Units 69% 69% 65% 64% 62% DCC Units (Millions) 1.25 0.46 1.48 0.71 2.57 * Net Sales Includes Interchangeable L
Slide 28: Net Sales Growth Rate Y/Y by Segment (JPY)
Net Sales Growth Rate Y/Y by Segment (JPY) FY 2020 1Q 2Q 3Q 4Q Full Year Hardware -18.4% -40.3% -17.7% -11.0% -22.0% Non-hardware -1.9% -39.9% -20.7% -18.0% -20.2% MFDs -9.1% -40.1% -19.3% -14.8% -21.0% Hardware -21.1% -30.8% -16.0% -14.9% -20.8% Non-hardware -7.2% -26.1% -38.0% -5.8% -18.8% LPs -12
Slide 29: 4Q 2020
4Q 2020 28
Slide 30: FY 2020 Financial Results (4Q 2020)
FY 2020 Financial Results (4Q 2020) 4Q 2020 4Q 2019 (Billions of yen) % Change Actual Actual Net Sales 945.7 953.5 -0.8% Gross Profit 414.3 423.4 -2.1% (% of Net Sales) 43.8% 44.4% Op. Expenses 338.1 371.0 (% of Net Sales) 35.7% 38.9% Op. Profit 76.2 52.4 +45.4% (% of Net Sales) 8.1% 5.5% IBT 80.2 5
Slide 31: FY 2020 Financial Results by Business Unit (4Q 2020)
FY 2020 Financial Results by Business Unit (4Q 2020) 4Q 2020 4Q 2019 (Billions of yen) % Change Actual Actual Office Net Sales 399.2 447.0 -10.7% Op. Profit 33.9 39.8 -15.0% (%) (8.5%) (8.9%) Imaging Net Sales 233.4 237.2 -1.6% System Op. Profit 43.2 20.7 +108.7% (%) (18.5%) (8.7%) Medical Net Sales
Slide 32: FY 2020 Operating Profit Analysis (4Q 2020 vs 4Q 2019)
FY 2020 Operating Profit Analysis (4Q 2020 Actual versus 4Q 2019 Actual) Change in Net Sales, excluding FX impact, for reference Office: -46.0 (Billions of yen) Imaging System: -4.9 Medical System: +14.2 Industry & Others: +31.7 FX Details -5.0 Total: Net Sales: -5.6 Cost of Sales: +5.5 Op. Expenses
Slide 33: Office / Imaging System (4Q 2020)
Office / Imaging System (4Q 2020) Office (Billions of yen) 4Q Net Sales Growth Rate Y/Y Unit Growth Rate Y/Y (Local Currency) 2020 2019 % Actual Actual Change 4Q 2020 4Q 2020 4Q 2020 MFDs LP Actual Actual Actual MFDs 142.9 167.8 -14.8% LPs 141.7 156.2 -9.2% MFDs -14.9% Monochrome -11% Monochrome -5%
Slide 34: Medical System / Industry & Others (4Q 2020)
Medical System / Industry & Others (4Q 2020) Medical System (Billions of yen) 4Q Net Sales Growth Rate Y/Y (Local Currency) 2020 2019 % Actual Actual Change 4Q 2020 Actual Net Sales 122.8 110.0 +11.6% Op. Profit 10.3 7.6 +35.0% Total +12.9% (% of Net Sales) 8.4% 6.9% Industry & Others (Billions of y