Canon Inc. · TSE:7751
Canon — Q3 2020 Earnings Presentation
25 slides from Canon's earnings presentation, Oct 26, 2020
Slide 1: Canon Inc. Third Quarter 2020 Results
Canon Inc. Third Quarter 2020 Results October 26, 2020 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 assump
Slide 2: Agenda
Agenda 3Q 2020 Results P2 – 4 FY 2020 Projection P5 – 8 Details by Business P9 – 16 (3Q 2020 Results & FY 2020 Projection) Financial Situation P17 – 18 Sustainability Measures P19 Supplementary Information P20 – 24 1
Slide 3: Key Message (3Q 2020 Results)
Key Message (3Q 2020 Results) External Environment (Billions of yen) 3Q 2020 Actual 3Q 2019 Actual % Change Global economy recovering Net Sales 758.9 869.5 -12.7% from 2Q's record drop Gross Profit 327.6 389.9 -16.0% (% of Net Sales) 43.2% 44.8% Business Performance Op. Expenses 308.4 351.5 Our
Slide 4: FY 2020 Financial Results by Business Unit
FY 2020 Financial Results by Business Unit (3Q 2020 Actual versus 3Q 2019 Actual) Sales and profit decline for Office and Medical System, sales decline and profit increase for Imaging System and Industry & Others Imaging System profitability back to double-digit level 3Q 2020 3Q 2019 (Billions o
Slide 5: FY 2020 Operating Profit Analysis
FY 2020 Operating Profit Analysis (3Q 2020 Actual versus 3Q 2019 Actual) Sales Volume: Down significantly, but pace of decrease slower than 2Q Op. Expense: Significant improvement thanks to structural reform and expense cutting Change in Net Sales, excluding FX impact, for reference (Billions of
Slide 6: Key Message (FY 2020 Projection)
Key Message (FY 2020 Projection) Impact of exchange rate movement FX Assumptions （4Q impact given a one yen change） 4Q 2020 FY 2020 Net Sales Op. Profit USD/Yen 105.00 yen 106.86 yen 2.9 billion yen 1.0 billion yen EUR/Yen 125.00 yen 122.16 yen 1.5 billion yen 0.7 billion yen External Environment Tr
Slide 7: FY 2020 Financial Projection
FY 2020 Financial Projection (Full Year) Raised projection for net sales and operating profit by 60.0 billion yen and 19.0 billion yen, respectively Increased sales and profit of new businesses FY 2020 FY 2020 FY 2019 Amount (Billions of yen) Current % Change Previous Actual Change Projection Pr
Slide 8: FY 2020 Financial Projection by Business Unit
FY 2020 Financial Projection by Business Unit (Full Year) Lowered projection for Office and Medical System, raised projection for Imaging System and Industry & Others Expect Imaging System profit to increase even for the full year FY 2020 FY 2020 FY 2019 Amount (Billions of yen) Current % Change
Slide 9: FY 2020 Operating Profit Analysis
FY 2020 Operating Profit Analysis (FY 2020 Current Projection versus Previous Projection) Sales Volume: Better-than-expected performance of Imaging System and Industry & Others Pricing: Restrained price reduction while closely monitoring supply and demand FX Details Net Sales: +28.2 Cost of Sale
Slide 10: Office – MFDs
Office – MFDs Recovery in 3Q and 4Q sales to 80% and 90% of last year, respectively, as offices reopen Expand sales of imageRUNNER ADVANCE DX series (Billions of yen) 3Q Full Year 2020 2020 2020 2019 % 2019 % Amount Current Previous Actual Actual Change Actual Change Change Projection Projection
Slide 11: Office – Laser Printers
Office – Laser Printers Hardware and consumable demand on recovery trend since the beginning of 3Q Continue to implement measures to steadily sell consumables (Billions of yen) 3Q Full Year 2020 2020 2020 2019 % 2019 % Amount Current Previous Actual Actual Change Actual Change Change Projection
Slide 12: Office – Others
Office – Others Rise in unit sales and pick up in print volume Recovery in 3Q sales to 90% of previous year (Billions of yen) 3Q Full Year 2020 2020 2020 2019 % 2019 % Amount Current Previous Actual Actual Change Actual Change Change Projection Projection MFDs 123.7 153.4 -19.3% 513.0 645.6 -20.
Slide 13: Imaging System – Cameras
Imaging System – Cameras Faster-than-expected recovery in camera demand EOS R5 and EOS R6 resonating very well, contributing to sales recovery New concept camera, PowerShot Zoom, also attracting great attention (Billions of yen) 3Q Full Year 2020 2020 2020 2019 % 2019 % Amount Current Previous
Slide 14: Imaging System – Inkjet Printers
Imaging System – Inkjet Printers In addition to home demand in developed countries, printer demand recovering in emerging markets Expand models offering improved home printing convenience (Billions of yen) 3Q Full Year 2020 2020 2020 2019 % 2019 % Amount Current Previous Actual Actual Change Act
Slide 15: Medical System
Medical System Lowered full-year projection due to weaker-than-expected market recovery Steadily converting orders into sales, aiming for 4Q sales growth (Billions of yen) 3Q Full Year 2020 2020 2020 2019 % 2019 % Amount Current Previous Actual Actual Change Actual Change Change Projection Proje
Slide 16: Industry & Others – Lithography Equipment
Industry & Others – Lithography Equipment Increased semiconductor lithography equipment unit sales thanks to recovery in memory-oriented investment Aiming to install 22 FPD lithography systems in 4Q in response to customer requests (Billions of yen) 3Q Full Year 2020 2020 2020 2019 % 2019 % Amou
Slide 17: Industry & Others – Others
Industry & Others – Others Increasing full-year OLED vacuum deposition equipment sales through steady progress in installation work Network camera returned to sales growth in 3Q, expect full-year sales to increase even during pandemic (Billions of yen) 3Q Full Year 2020 2020 2020 2019 % 2019 % A
Slide 18: Inventory
Inventory Temporary build up in Industry & Others causing slight increase in overall inventory Steady decrease in other segments in value terms FY 2019 FY 2020 (Billions of yen) Mar.-end Jun.-end Sep.-end Dec.-end Mar.-end Jun.-end Sep.-end Value 215.5 206.1 201.3 191.9 194.9 191.6 188.3 Office
Slide 19: Cash Flow (Full Year)
Cash Flow (Full Year) Improve free cash flow by increasing profit, limiting capital spending etc. Secure same level of cash-on-hand as last time (1.5 months of sales) FY 2020 FY 2020 FY 2019 Current Previous Actual (Billions of yen) Projection Projection Net cash provided by operating activities
Slide 20: Sustainability Measures
Sustainability Measures Responding to COVID-19 through technology Contribute to the realization of a safe, secure, and comfortable society ■Medical equipment development ■Support of new lifestyles Canon Medical Systems Rapid Genetic Testing System Release of a software for the Novel Coronavirus Earl
Slide 21: Supplementary Information
Supplementary Information 20
Slide 22: FY 2020 Operating Profit Analysis
FY 2020 Operating Profit Analysis (FY 2020 Current Projection versus FY 2019 Actual) Change in Net Sales, excluding FX Details FX impact, for reference (Billions of yen) Net Sales: -26.7 Office: -298.0 Cost of Sales: +11.0 Imaging System: -114.1 Op. Expenses: +8.6 Medical System: -0.4 Industry & Oth
Slide 23: Net Sales Growth Rate of Hardware & Non-hardware
Net Sales Growth Rate of Hardware & Non-hardware FY 2020 FY 2019 3Q Full Year 3Q Full Year Actual Projection Actual Actual MFDs Hardware -18% -21% -4% -7% JPY Non-hardware -21% -20% -6% -5% Hardware -18% -20% +1% -4% LC Non-hardware -21% -20% -2% -2% LPs Hardware -16% -22% -2% -5% JPY Non-hardware -
Slide 24: Color Ratio; Sales Growth by Monochrome & Color MFDs
Color Ratio FY 2020 FY 2019 3Q Full Year 3Q Full Year Actual Projection Actual Actual Net Sales 60% 60% 59% 59% MFDs QTY 60% 59% 60% 59% Net Sales 47% 51% 52% 52% LPs QTY 19% 21% 23% 20% Sales Growth by Monochrome & Color MFDs FY 2020 FY 2019 3Q Full Year 3Q Full Year Actual Projection Actual Actual
Slide 25: Interchangeable Lens Digital Camera Ratio; IC Stepper Unit Breakdown
Interchangeable Lens Digital Camera Ratio FY 2020 FY 2019 3Q Full Year 3Q Full Year Actual Projection Actual Actual Value Base 88% 86% 84% 85% Unit Base 64% 64% 60% 62% * Value Base Includes Interchangeable Lenses IC Stepper Unit Breakdown by Light Source (Units) FY 2020 FY 2019 3Q Full Year 3Q Full