Slide 1: Canon Inc. Second Quarter 2009 Results
Canon Inc. Second Quarter 2009 Results July 28, 2009 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
Slide 2: Agenda
Agenda 2Q 2009 Results P3 – 6 FY 2009 Projections P7 – 10 Details by Business P11 – 18 Capital Expenditure & Cash Flow P19 – 20 Supplementary Information P21 – 26 (LBP: Laser Beam Printers, IJP: Inkjet Printers, SPE: Semiconductor Production Equipment) July 28, 2009 Canon Inc. 2
Slide 3: 2Q 2009 in Summary
2Q 2009 in Summary External Environment 9 Continued economic slowdown and strong yen Results 9 Lessened pace of decline in sales and operating profit compared with the previous quarter 9 Achieved more than doubled the OP of first quarter, steadily improving OP ratio 9 Progress in “improved managemen
Slide 4: Summary of Results
Summary of Results 2Q&1H 2009 Actual (Billions of yen) (For reference) Pct. 2009 2008 Change 2009 (excluding forex impact) Actual % Sales Actual % Sales Actual Actual % Sales Net sales 793.8 1,105.9 -28.2% 866.0 Gross profit 345.5 43.5% 541.6 49.0% -36.2% 408.4 47.2% Op. profit 44.9 5.7% 160.2 14.5%
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 2Q 2009 Actual v. 2Q 2008 Actual (Billions of yen) Sales Op. Profit 2Q 2008 Actual 1,105.9 160.2 Change in Exchange Rate Foreign exchange impact -72.2 -42.6 •1USD: 104.61 to 97.19 yen [net sales, cost of sales, expenses] •1EURO: 163.55 to 132.90 yen Sales volume im
Slide 6: Expense & Inventory Situation
Expense & Inventory Situation Expenses Inventory (Billions of yen) (Billions of yen) 400 Operating expenses 700 Amount 664 Turnover (days) 58 350 80 Bil. Yen 614 reduction 600 582 54 53 52 563 47 47 300 44 507 190 Bil. Yen 500 reduction 500 381 386 250 346 329 424 301 279 400 200 150 300 1Q08 2Q08 3
Slide 7: Assumptions
Assumptions 2009 Current Projection Average 2H09 FY09 FY08 Exchange Rate Yen-1USD 95.00 yen 95.33 yen 103.23 yen Yen-1EURO 130.00 yen 128.85 yen 151.46 yen Impact of Exchange Rate Movement (2H impact given a one yen change) Net sales Operating profit USD 7.7 billion yen 4.2 billion yen EURO
Slide 8: Key Points FY 2009
Key Points FY 2009 Assumptions 9 Challenging market situation remains, full economic recovery not until next year 9 Yen appreciation continues Projections 9 Exceed previous projection for operating profit 9 Promote “improved management quality” 9 Pursue more thorough expense reduction 9 Launch strat
Slide 9: Summary of Projected Results
Summary of Projected Results FY 2009 Current Projection (Billions of yen) (For reference) FY 2009 FY 2009 FY 2009 FY 2008 Pct. change Current projection Current Previous Previous (excluding forex Actual Actual impact) projection projection projection Net sales 3,200.0 3,330.0 4,094.2 -3.9% -21.8% 3,
Slide 10: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2009 Current Projection v. FY 2009 Previous Projection (Billions of yen) FY 2009 Sales Op. Profit Change in Exchange Rate Previous Projection (April. 30, 2009) 3,330.0 180.0 •1USD: 94.78 to 95.33 yen Foreign exchange impact •1EURO: 124.31 to 128.85 yen +44.8 +31
Slide 11: Business Machines
Business Machines 2Q 2009 Actual / FY 2009 Projection (Billions of yen) 2Q (Billions of yen) FY Sales 900 Growth rate y/y ( ) Local currency base 3,000 600 2,000 -23.6%(-17.2%) 697 -30.3%(-23.6%) 2,660 300 1,000 2,152 2,033 486 0 0 2Q08 2Q09 FY08 FY09 FY09 Previous Current projection projection Op.
Slide 12: Office Imaging Products
Office Imaging Products 2Q 2009 Actual / FY 2009 Projection Growth rate y/y Sales (Unit base) (Billions of yen) Growth rate y/y Copying 2Q FY ( ) Local currency base machines 500 Others 2,000 Color -27% -16% Color Monochrome Mono- -35% -24% chrome 400 Total -33% -22% 1,500 312 1,120 -27.2%(-20.6%) C
Slide 13: New Products
New Products Enhanced coordination Entry to Light Production with IT systems market TCO reduction C5000 series C7000 series C9000PRO series C5051 :51ppm C5035 :35ppm color/mono color/mono C5051F:51ppm C5035F:35ppm C7065 :60/65ppm C9075 :70/75ppm C5045 :45ppm C5030 :30ppm C7055 :55/55ppm C9065 :60/65
Slide 14: Computer Peripherals
Computer Peripherals Growth rate y/y 2Q 2009 Actual / FY 2009 Projection (Unit base) LBP 2Q FY Sales Color -57% -40% Growth rate y/y Mono- -61% -46% (Billions of yen) ( ) Local currency base chrome Total -60% -45% 500 Others 2,000 IJP LBP 400 1,455 -21.5%(-15.2%) 364 1,500 Color ratio (LBP) -30.9%(-
Slide 15: Cameras
Cameras 2Q 2009 Actual / FY 2009 Projection (Billions of yen) 2Q (Billions of yen) FY Sales 500 Growth rate y/y ( ) Local currency base 1,500 400 300 1,000 -12.9%(-4.7%) 200 -20.7%(-11.3%) 1,042 310 500 904 908 100 246 0 0 2Q08 2Q09 FY08 FY09 FY09 Previous Current projection projection Op. OP ratio
Slide 16: Cameras
Cameras 2Q 2009 Actual / FY 2009 Projection Growth rate y/y (Unit base) Sales Digital cameras 2Q FY (Billions of yen) Growth rate y/y Compact -17% -8% ( ) Local currency base SLR +11% +5% 500 Video cameras 2,000 Digital cameras Total -13% -6% Interchangeable lenses and others 400 1,500 D SLR ratio*
Slide 17: Optical and Other Products
Optical and Other Products 2Q 2009 Actual / FY 2009 Projection (Billions of yen) 2Q (Billions of yen) FY Sales 200 Growth rate y/y 600 ( ) Local currency base 150 400 -33.8%(-30.8%) 100 -37.2%(-33.9%) 200 392 50 98 275 260 62 0 0 2Q08 2Q09 FY08 FY09 FY09 Previous Current projection projection Op. Pr
Slide 18: Optical and Other Products
Optical and Other Products 2Q 2009 Actual / FY 2009 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 SPE FY09 2Q09 ArF 150 ArF 2 0 392 Immersion Immersion -33.8%(-30.8%) 400 K
Slide 19: Capital Expenditure and 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 750 750 407 488 234 144 309 455 500 500 839 110 325 110 695 617 473 465 461 432 250 250 429 380 362 355 342 341
Slide 20: Cash on Hand
Cash on Hand (Billions of yen) Cash-on-hand 3.0 3.1 Cash-on-hand 2.4 (Months of 2nd-Half net sales) 1,156 2.1 1,005 2.3 944 679 650 FYE05 FYE06 FYE07 FYE08 FYE09 Projection Note: In 2007, 450 billion yen was used to acquire own share. In 2008, 100 billion yen. July 28, 2009 Canon Inc. 20
Slide 21: Supplementary Information
Supplementary Information July 28, 2009 Canon Inc. 21
Slide 22: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2009 Current Projection v. FY 2008 Actual (Billions of yen) Sales Op. Profit FY 2008 Actual 4,094.2 496.1 Foreign exchange impact -243.5 -142.9 [net sales, cost of sales, expenses] Sales volume impact Office Imaging Products -223.0 Change in Exchange Rate
Slide 23: Gross Profit Variance Analysis
Gross Profit Variance Analysis 2Q 2009 Actual v. 2Q 2008 Actual (Billions of yen) 2Q09 2Q08 Change (Billions of yen) Gross Profit 345.5 541.6 -196.1 % sales 43.5% 49.0% -5.5 pt. 100 50 9.3 0 -20.8 -13.7 -50 -100 -72.2 -98.7 -150 -200 Forex Sales Price Forex Cost -196.1 impact volume change impact re
Slide 24: Operating Profit Variance Analysis
Operating Profit Variance Analysis 2Q 2009 Actual v. 2Q 2008 Actual (Billions of yen) 2Q09 2Q08 Change Op. Profit 44.9 160.2 -115.3 (Billions of yen) % sales 5.7% 14.5% -8.8 pt. 100 60.5 50 20.3 0 -50 -100 -115.3 -150 -200 -196.1 -250 Total change in Change in Change in SG&A Total change in gross pr
Slide 25: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 50 Debt Debt/Total Assets 5% 40 4% 32 31 30 27 3% 20 2% 14 12 0.8% 0.7% 10 0.6% 1% 0.4% 0.3% 0 0% FYE05 FYE06 FYE07 FYE08 2QE09 Supplementary Information July 28, 2009 Canon Inc. 25
Slide 26: Financial Ratios
Financial Ratios (Yen) 1,000 20% 16.8% 16.0% 16.3% 16.5% 800 15% 11.1% 10.1% 10.1% 10.6% 10.8% 600 7.3% 10% 377.59 4.2% 400 341.95 5% 258.53 288.63 246.21 2.8% 200 0% 89.11 0 -5% FY04 FY05 FY06 FY07 FY08 FY09 Projection EPS (Basic) ROE ROA (Attributable to Canon Inc) * EPS (Basic) has been adjusted