Canon Inc. · TSE:7751
Canon — Q1 2007 Earnings Presentation
29 slides from Canon's earnings presentation, Apr 24, 2007
Slide 1: Canon Inc. First Quarter 2007 Results
Canon Inc. First Quarter 2007 Results April 24, 2007 Toshizo Tanaka Executive Vice President 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 fo
Slide 2: Agenda
Agenda 1Q 2007 Results P3-12 2Q&FY 2007 Projections P13-21 Supplementary Information P22-29 April 24, 2007 Canon Inc. 2
Slide 3: Summary of Results
Summary of Results 1Q 2007 Actual (Billions of yen) 1Q07 1Q07 1Q06 % Change Actual Projection Actual Projection Actual Net sales 1,039.8 1,000.0 923.3 +4.0% +12.6% Gross profit 533.7 511.0 468.5 +4.4% +13.9% [% sales] 51.3% 51.1% 50.7% Op. profit 207.4 185.0 170.1 +12.1% +21.9% [% sales] 19.9% 18.5%
Slide 4: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 1Q 2007 Actual v. 1Q 2007 Projection (Billions of yen) 1Q 2007 Sales Op. Profit Projection (Jan. 29, 2007) 1,000.0 185.0 Change in Exchange Rate Foreign exchange impact +16.8 +10.8 •1USD: 117.00 to 119.33 yen [net sales, cost of sales, expenses] •1EURO: 152.00 to 1
Slide 5: Business Machines
Business Machines 1Q 2007 Actual Sales Operating Profit (Billions of yen) Growth rate y/y (Billions of yen) ( ) Local currency base 900 OP ratio 300 30% 24.1% 24.7% 22.5% 600 200 20% +13.3%(+9.1%) 690 715 +16.0% 300 631 100 177 10% 152 155 0 0 0% 1Q06 1Q07 1Q07 1Q06 1Q07 1Q07 Projection Projection A
Slide 6: Office Imaging Products
Office Imaging Products 1Q 2007 Actual Sales Growth rate y/y (Billions of yen) Growth rate y/y (Unit base) ( ) Local currency base Others Copying machines Color 1Q 400 Monochrome +6.7%(+2.3%) Color +13% Monochrome -12% 299 306 300 286 (For office use) (+3%) +7.9%(+4.4%) Total -8% 200 +24.1%(+18.3%)
Slide 7: Computer Peripherals
Computer Peripherals 1Q 2007 Actual Growth rate y/y (Unit base) LBP 1Q Sales Color +83% (Billions of yen) Growth rate y/y Monochrome +61% ( ) Local currency base +20.9%(+16.6%) Others Total +64% IJP 400 383 Color ratio (LBP) LBP 363 1Q 317 +12.2%(+6.7%) Value base* 35% 300 Unit base 15% *Includes co
Slide 8: Cameras
Cameras 1Q 2007 Actual Sales Operating Profit (Billions of yen) Growth rate y/y (Billions of yen) ( ) Local currency base 300 OP ratio 80 40% 27.2% 200 60 25.9% 30% 22.9% +15.8%(+10.9%) 40 +37.4% 20% 211 222 61 100 192 55 20 44 10% 0 0 0% 1Q06 1Q07 1Q07 1Q06 1Q07 1Q07 Projection Projection April 24,
Slide 9: Cameras
Cameras 1Q 2007 Actual Sales (Billions of yen) Growth rate y/y Growth rate y/y ( ) Local currency base (Unit base) 300 Video cameras 1Q Digital cameras +15.8%(+10.9%) Digital Film cameras/Lenses +19% cameras 222 211 -14.4%(-18.2%) 200 192 D SLR ratio* 1Q Value base 36% +18.9%(+13.7%) Unit base 13% 1
Slide 10: Optical and Other Products
Optical and Other Products 1Q 2007 Actual Sales Operating Profit (Billions of yen) Growth rate y/y (Billions of yen) ( ) Local currency base 150 OP ratio 40 20% 14.3% 100 30 15% 11.7% 10.3% +1.9%(+0.6%) 20 10% 50 100 99 102 +23.9% 10 21 18 5% 15 0 0 0% 1Q06 1Q07 1Q07 1Q06 1Q07 1Q07 Projection Projec
Slide 11: Optical and Other Products
Optical and Other Products 1Q 2007 Actual Sales (Billions of yen) Growth rate y/y IC Stepper Unit Breakdown By Light Source ( ) Local currency base 1Q07 150 Others ArF 0% SPE +1.9%(+0.6%) KrF 40% i-line 60% 100 99 102 IC Stepper 300mm Ratio (Units) 100 1Q07 +4.7%(+2.3%) 300mm 77% 50 SPE (Unit sales)
Slide 12: Operating Profit by Product
Operating Profit by Product 1Q 2007 Actual v. 1Q 2006 Actual (Billions of yen) 1Q07 1Q06 Amt. Chg. Pct. Chg. Business machines 176.5 152.2 +24.3 +16.0% [% sales] 24.7% 24.1% Cameras 60.5 44.0 +16.5 +37.4% [% sales] 27.2% 22.9% Optical & other 18.0 14.5 +3.5 +23.9% products [% sales] 11.7% 10.3% Corp
Slide 13: Assumptions
Assumptions 2Q-4Q 2007 Average 2Q-4Q07 FY07 FY06 Exchange Rate USD 117.00 yen 117.55 yen 116.43 yen EURO 155.00 yen 155.33 yen 146.51 yen Impact of Exchange Rate Movement (2-4Q impact given a one yen change) Net sales Operating profit USD 11.3 billion yen 6.1 billion yen EURO 5.7 billion yen
Slide 14: Summary of Projected Results
Summary of Projected Results 2Q&FY 2007 Current Projection (Billions of yen) 2007 2006 % Change Current Previous Previous % sales % sales Actual % sales Actual projection projection projection Net sales 1,120.2 1,100.0 1,029.0 +1.8% +8.9% Gross profit 563.3 50.3% 556.0 50.5% 510.2 49.6% +1.3% +10.4%
Slide 15: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 2Q&FY 2007 Current Projection v. 2Q&FY 2007 Previous Projection (Billions of yen) 2Q FY Sales Op. Profit Sales Op. Profit Previous projection (Jan, 29, 2007) 1,100.0 183.0 4,450.0 765.0 Foreign exchange impact [net sales, cost of sales, expenses] +18.7 +10.6 +78.9
Slide 16: Office Imaging Products
Office Imaging Products 2Q&FY 2007 Current Projection Growth rate y/y Sales (Unit base) (Billions of yen) Growth rate y/y Copying machines ( ) Local currency base 2Q FY 500 Others 2,000 Color +36% +24% Color +10.0%(+6.4%) Mono- -19% -10% Monochrome +9.8%(+7.4%) chrome 400 (For office 1,500 (+2%) (+5
Slide 17: Computer Peripherals
Computer Peripherals Growth rate y/y (Unit base) 2Q&FY 2007 Current Projection LBP 2Q FY Color +29% +32% Mono- Sales chrome +26% +19% (Billions of yen) Growth rate y/y Total +27% +21% ( ) Local currency base Color ratio (LBP) 500 Others 2,000 +10.2%(+8.0%) 2Q FY IJP +11.1%(+7.6%) Value 37% 37% 400 L
Slide 18: Cameras
Cameras 2Q&FY 2007 Current Projection Sales Growth rate y/y (Unit base) (Billions of yen) Growth rate y/y ( ) Local currency base 2Q FY 500 1,500 Digital Video cameras cameras +13% +14% Digital cameras +9.7%(+7.1%) Film cameras/Lenses 400 1,200 1,116 1,143 +8.8%(+4.7%) 1,042 -0.6%(-3.3%) D SLR ratio
Slide 19: Optical and Other Products
Optical and Other Products 2Q&FY 2007 Current Projection Growth rate y/y ( ) Local currency base Sales (Billions of yen) (Billions of yen) IC Stepper Unit Breakdown IC Stepper Unit Breakdown by Light Source by Light Source 200 750 SPE Others FY07 2Q07 +4.2%(+3.2%) Current +0.1% (-1.4%) Current proje
Slide 20: Operating Profit by Product
Operating Profit by Product 2Q&FY 2007 Current Projection v. 2Q&FY 2006 Actual (Billions of yen) 2007 2006 Current Projection Actual 2Q FY 2Q FY Business machines 162.1 677.8 142.4 599.2 % sales 22.4% 22.9% 21.7% 22.3% Cameras 72.7 299.9 64.7 268.7 % sales 24.9% 26.2% 24.1% 25.8% Optical and other p
Slide 21: Cash on Hand and Return to Shareholders
Cash on Hand and Return to Shareholders Cash on Hand (Year-end) Dividend *Figures in parenthesis represent dividend per share expressed on a pre- 3-for-2 forward stock split basis (effective date July 1, 2006) (Previous projection: 26.9%) (Billions of yen) Dividends per share 30% 25.8% Payout ratio
Slide 22: Supplementary Information
Supplementary Information April 24, 2007 Canon Inc. 22
Slide 23: Gross Profit Variance Analysis
Gross Profit Variance Analysis 1Q 2007 Actual v. 1Q 2006 Actual (Billions of yen) 1Q07 1Q06 Change (Billions of yen) Gross Profit 533.7 468.5 +65.2 90 % sales 51.3% 50.7% +0.6 pt. 65 60 48 36 30 19 0 -5 -8 -30 -25 Forex Sales Price Forex Cost Others Total impact volume change impact reduction change
Slide 24: Operating Profit Variance Analysis
Operating Profit Variance Analysis 1Q 2007 Actual v. 1Q 2006 Actual (Billions of yen) 1Q07 1Q06 Change (Billions of yen) Op. Profit 207.4 170.1 +37.3 90 % sales 19.9% 18.4% +1.5 pt. 65 60 37 30 0 -8 -30 -20 Total change in Change in Change in SG&A Total change in gross profit SG&A forex impact opera
Slide 25: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 1Q 2007 Actual v. 1Q 2006 Actual (Billions of yen) Sales Op. Profit 1Q 2006 Actual 923.3 170.1 Change in Exchange Rate Foreign exchange impact +36.1 +23.1 •1USD: 116.96 to 119.33 yen [net sales, cost of sales, expenses] •1EURO: 140.71 to 156.45 yen Sales volume imp
Slide 26: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 2Q&FY 2007 Current Projection v. 2Q&FY 2006 Actual (Billions of yen) 2Q FY Sales Op. Profit Sales Op. Profit 2006 Actual 1,029.0 168.3 4,156.8 707.0 Foreign exchange impact +33.9 +20.9 +88.4 +57.5 [net sales, cost of sales, expenses] Change in Exchange Rate (2Q) Sa
Slide 27: Inventories Interest Bearing Debt
Inventories Interest Bearing Debt (Billions of yen) (Days) (Billions of yen) 800 Inventories 80 200 Debt 8% Turnover (Days) Debt/Total Assets 600 60 150 6% 49 49 47 45 45 400 40 100 4% 3.1% 555 539 510 489 444 1.1% 200 20 50 98 2% 0.8% 0.7% 0.7% 39 32 31 31 0 0 0 0% FYE03 FYE04 FYE05 FYE06 1QE07 FYE
Slide 28: Free Cash Flow Capital Expenditure
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) 1,000 Capex 1,000 Operating C/F Net income Free C/F Depreciation Investing C/F 800 800 274 234 600 600 505 205 455 384 309 764 400 400 343 695 606 562 490 470 461 401 384 380 200 200 319 295 262 253 226 193 0 0 FY04 FY05 FY06 FY0
Slide 29: Financial Ratios
Financial Ratios (Yen) 500 EPS (Basic) 25% ROE 400 ROA 20% 16.8% 16.3% 16.3% 15.9% 16.0% 300 15% 10.6% 10.8% 9.0% 10.1% 10.1% 200 388.32 10% 341.95 288.63 258.53 100 209.21 5% 0 0% FY03 FY04 FY05 FY06 FY07 Projection Supplementary Information April 24, 2007 Canon Inc. 29