Slide 1: Canon Inc. First Quarter 2017 Results
Canon Inc. First Quarter 2017 Results April 26, 2017 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 assumpti
Slide 2: Agenda
Agenda 1Q 2017 Results P3 – 5 FY 2017 Projections P6 – 9 Details by Business P10 – 15 Financial Situation P16– 18 Supplementary Information P19 – 24 April 26, 2017 Canon Inc. 2
Slide 3: 1Q 2017 in Summary
1Q 2017 in Summary External Environment Global economy Developed countries - improvement driven by the U.S. Emerging markets - gradual recovery thanks to economic stability Results Significant growth in sales and profits Existing businesses - laser printers and cameras return to positive g
Slide 4: Summary of Results
Summary of Results 1Q 2017 Actual (Billions of yen) 1Q 2017 1Q 2016 Pct. Change Actual Actual Net Sales 972.8 797.2 +22.0% Gross Profit 468.3 404.7 +15.7% (% Sales) 48.1% 50.8% Op. Profit 75.7 40.1 +88.8% (% Sales) 7.8% 5.0% Net Income Attributable to Canon Inc. 55.1 28.0 +96.8% (% Sales) 5.7% 3.5%
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 1Q 2017 Actual v. 1Q 2016 Actual (Billions of yen) Sales Op. Profit 1Q 2016 Actual 797.2 40.1 Foreign Exchange Impact Change in Exchange Rate -12.5 -4.0 •1USD: (Net Sales, Cost of Sales, Expenses) 114.91 to 113.53 yen •1EURO: 127.01 to 121.03 yen Sales Volume Impac
Slide 6: Exchange Rate Assumptions
Exchange Rate Assumptions 2017 Current Projection Average 2Q-4Q17 FY17 FY16 Exchange Rate Yen-1USD 110.00 yen 110.82 yen 108.58 yen Yen-1EURO 120.00 yen 120.26 yen 120.25 yen Impact of Exchange Rate Movement (2Q-4Q Impact Given a One Yen Change) Net Sales Operating Profit USD 10.0 billion yen
Slide 7: Overview of Latest Projections
Overview of Latest Projections External Environment Global economy - stronger recovery than last year Developed countries - continues to be driven by the U.S. Appreciation of the yen due to delayed hike in U.S. interest rates Full-year Projection Double digit growth in sales and Existing b
Slide 8: Summary of Projected Results
Summary of Projected Results FY 2017 Current Projection (Billions of yen) FY 2017 FY 2016 Pct. Change Current Projection Actual Net Sales 4,020.0 3,401.5 +18.2% Gross Profit 1,911.0 1,673.8 +14.2% (% Sales) 47.5% 49.2% Op. Profit 270.0 228.9 +18.0% (% Sales) 6.7% 6.7% Net Income Attributable to Cano
Slide 9: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2017 Current Projection v. FY 2017 Previous Projection (Billions of yen) Sales Op. Profit Previous Projection (Jan. 31, 2017) 4,000.0 255.0 Change in Exchange Rate Foreign Exchange Impact •1USD: 110.00 to 110.82 yen +16.4 +6.9 •1EURO: 120.00 to 120.26 yen (Net S
Slide 10: Office
1Q17 Growth Rate y/y (Unit Base) 1Q17 Color Ratio Office Color Copiers +12% Printers +8% Value Base* Copiers 59% Printers 50% Monochrome -3% +14% Unit Base 55% 16% 1Q 2017 Actual Total +4% +13% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 600 Monochrome copie
Slide 11: Office
FY17 Growth Rate y/y (Unit Base) FY17 Color Ratio Office Color Copiers +8% Printers 0% Value Base* Copiers 59% Printers 52% Monochrome -3% -1% Unit Base 54% 17% FY 2017 Projection Total +3% -1% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 2,500 Monochrome cop
Slide 12: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens 1Q17 +6% Digital Camera Ratio * 1Q17 Digital Cameras Value Base 83% 1Q 2017 Actual Compact Digital -6% Unit Base 52% Cameras Total Digital Cameras 0% * Proportion of Total Digital Cameras IJP -1% * Value Base Includ
Slide 13: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens FY17 -7% Digital Camera Ratio * FY17 Digital Cameras Value Base 86% FY 2017 Projection Compact Digital -13% Unit Base 60% Cameras Total Digital Cameras -9% * Proportion of Total Digital Cameras (Billions of yen) Sal
Slide 14: Industry and Others
Industry and Others Lithography Equipment IC Lithography Unit Breakdown by Light Source (Unit Sales) 1Q16 1Q17 1Q 2017 Actual 1Q16 1Q17 ArF 0 0 IC 19 11 KrF 6 2 FPD 8 20 i-line 13 9 (Billions of yen) Sales Growth rate y/y ( ) Local currency base Industry and Others 330 Net Sales Sales Eliminations 2
Slide 15: Industry and Others
Industry and Others Lithography Equipment IC Lithography Unit Breakdown by Light Source (Unit Sales) FY17 FY17 FY 2017 Projection FY17 FY17 FY16 Previous Current FY16 Previous Current Projection Projection Projection Projection ArF 0 0 0 (Billions of yen) Sales Growth rate y/y ( ) Local currency bas
Slide 16: Inventories
Inventories (Billions of yen) 800 90 Amount (Billions of yen) Turnover (Days) 700 59 59 70 54 57 55 54 52 53 47 50 591 595 600 569 563 561 30 521 502 494 500 479 10 -10 400 -30 300 -50 1QE15 2QE15 3QE15 4QE15 1QE16 2QE16 3QE16 4QE16 1QE17 April 26, 2017 Canon Inc. 16
Slide 17: Capital Expenditure and Free Cash Flow
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) 1,000 1,000 Operating C/F Increase in PP&E Free C/F Net Income Attributable to Canon Inc. Investing C/F Depreciation 750 500 21 315 837 250 250 584 500 475 454 500 500 510 269 250 260 255 220 170 180 151 0 250 -337 264 273 250 27
Slide 18: Cash on Hand
Cash on Hand Cash on Hand (Year-end) (Billions of yen) 1,500 4 Cash-on-hand (Billions of yen) Cash-on-hand (In months of 2nd-half net sales, except FYE17, 3.5 which is based on full-year net sales) 3 2.6 1,000 2.4 2.5 2.2 845 1.9 789 1.8 1.8 2 634 630 600 600 1.5 500 1 0.5 0 0 FYE13 FYE14 FYE15 FYE1
Slide 19: Supplementary Information
Supplementary Information April 26, 2017 Canon Inc. 19
Slide 20: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2017 Current Projection v. FY 2016 Actual (Billions of yen) Sales Op. Profit FY 2016 Actual 3,401.5 228.9 Foreign Exchange Impact +29.9 +8.4 Change in Exchange Rate (Net Sales, Cost of Sales, Expenses) •1USD: 108.58 to 110.82 yen •1EURO: 120.25 to 120.26 y
Slide 21: Gross Profit Variance Analysis
Gross Profit Variance Analysis 1Q 2017 Actual v. 1Q 2016 Actual (Billions of yen) 1Q17 1Q16 Change (Billions of yen) Gross Profit 468.3 404.7 +63.6 % Sales 48.1% 50.8% -2.7pt. 80 68.4 63.6 40 8.5 2.9 0 -3.7 -12.5 -40 Forex Sales Price Forex Cost Total Impact Volume Change Impact Reduction Change on
Slide 22: Operating Profit Variance Analysis
Operating Profit Variance Analysis 1Q 2017 Actual v. 1Q 2016 Actual (Billions of yen) 1Q17 1Q16 Change Op. Profit 75.7 40.1 +35.6 (Billions of yen) % Sales 7.8% 5.0% +2.8pt. 80 63.6 35.6 40 5.6 0 -33.6 -40 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Excluding (For
Slide 23: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 45 30.0% 613 653 Debt Debt/Total Assets 25.0% 20.0% 12.8% 15.0% 11.9% 10.0% 5.0% 3 2 2 0 0.0% 0.1% 0.0% 0.0% FYE13 FYE14 FYE15 FYE16 1QE17 Supplementary Information April 26, 2017 Canon Inc. 23
Slide 24: Financial Ratios
Financial Ratios (Yen) 900 15% 600 10% 8.4% 8.7% 7.4% 6.5% 5.6% 5.9% 5.0% 5.2% 300 5% 3.5% 3.1% 229.03 200.78 201.65 137.95 164.83 0 0% FY13 FY14 FY15 FY16 FY17 Current Projection EPS(Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information April 26, 2017 Canon Inc. 24