Slide 1: Canon Inc. First Quarter 2019 Results
Canon Inc. First Quarter 2019 Results April 24, 2019 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 ■Our Current Situation P2 ■1Q 2019 Results P 3-６ ■FY 2019 Projection P７-11 ■Details by Business P 12-18 (1Q 2019 Results & FY 2019 Projection) ■Financial Situation P 19-20 ■Canon’s Sustainability Activities P 21-22 ■Supplementary Information P 23-26 1
Slide 3: Our Current Situation
Our Current Situation Steady progress in transforming business portfolio Created four new business pillars through M&A since 2005 New businesses expected to grow this year as well Raising new business ratio to 25% of total sales Multiple changes in external environment leading to stagnant perf
Slide 4: Key Message (1Q 2019 Results)
Key Message (1Q 2019 Results) External environment Economic slowdown centered in China and Europe Ongoing depreciation of euro and other currencies compared to last year Business environment Accelerated pace of camera market contraction Continued restraint in customer investment in regard to
Slide 5: FY 2019 Financial Results
FY 2019 Financial Results (1Q 2019 Actual versus 1Q 2018 Actual) Compared to last year: Double-digit decline in sales and profits due to lower sales of cameras and industrial equipment as well as currency impact 1Q 2019 1Q 2018 (Billions of yen) % Change Actual Actual Net Sales 864.5 960.7 -10.0%
Slide 6: FY 2019 Financial Results by Business Unit
FY 2019 Financial Results by Business Unit (1Q 2019 Actual versus 1Q 2019 Actual) Decline in sales and profits of all business units, in particular Imaging System and Industry & Others 1Q 2019 1Q 2018 (Billions of yen) % Change Actual Actual Office Net Sales 425.6 442.7 -3.9% Op. Profit 45.1 51.7
Slide 7: FY 2019 Operating Profit Analysis
FY 2019 Operating Profit Analysis (1Q 2019 Actual versus 1Q 2018 Actual) Sales volume: Negative impact on profit due to sales decline of cameras and industrial equipment Op. expenses: Controlled below last year's level (Billions of yen) Change in Net Sales, excluding FX impact, for reference Off
Slide 8: Key Message (FY 2019 Projection)
Key Message (FY 2019 Projection) FX Assumptions Impact of exchange rate movement （2Q-4Q impact given a one yen change） 2Q-4Q 2019 FY 2019 Net Sales Op. Profit USD/Yen 105.00 yen 106.20 yen 10.1 billion yen 3.4 billion yen EUR/Yen 125.00 yen 125.04 yen 4.8 billion yen 2.4 billion yen External Environ
Slide 9: FY 2019 Financial Projection
FY 2019 Financial Projection (FY 2019 Current Projection versus FY 2018 Actual and FY 2019 Previous Projection) Lowered projection for sales and op. profit by 50 and 51 billion yen, respectively Expect to secure 200 billion yen in net income FY 2019 FY 2019 FY 2018 Amount (Billions of yen) Curre
Slide 10: FY 2019 Financial Projection by Business Unit
FY 2019 Financial Projection by Business Unit (Full Year) Imaging System and Industry & Others: Lowered full-year projection Office: Continues to support entire co. by expanding sales of new products Medical: Projection unchanged, still expect sales and profit growth FY 2019 FY 2019 FY 2018 Am
Slide 11: FY 2019 Operating Profit Analysis
FY 2019 Operating Profit Analysis (FY 2019 Current Projection versus FY 2018 Actual) FX: Significant impact coming from yen’s appreciation Sales volume: Lower profit due to decrease in camera and industrial equipment sales (Billions of yen) Change in Net Sales, excluding FX impact, for reference
Slide 12: FY 2019 Operating Profit Analysis
FY 2019 Operating Profit Analysis (FY 2019 Current Projection versus FY 2019 Previous Projection) Lower projection for mainly cameras and lithography equipment Increased cost reduction thanks to improvement in parts procurement environment Increase in op. expense due to one-off factor (Billion
Slide 13: Office – MFDs
Office – MFDs 1Q: Strong sales of color MFDs and growth in high-speed presses FY: Expand sales of new products with enhanced security features (Billions of yen) 1Q Full Year 2019 2019 2019 2018 % 2018 % Amount Current Previous Actual Actual Change Actual Change Change Projection Projection MFDs
Slide 14: Office – Laser Printers
Office – Laser Printers 1Q: Lower revenue due to decline in consumable sales FY: Expand sales of new products that utilize new toner (Billions of yen) 1Q Full Year 2019 2019 2019 2018 % 2018 % Amount Current Previous Actual Actual Change Actual Change Change Projection Projection MFDs 158.1 163.
Slide 15: Office – Others
Office – Others Further strengthen competitiveness of new products for graphic arts Improve profitability, expanding service revenue through MIF expansion (Billions of yen) 1Q Full Year 2019 2019 2019 2018 % 2018 % Amount Current Previous Actual Actual Change Actual Change Change Projection Proj
Slide 16: Imaging System – Cameras
Imaging System – Cameras Revised full year outlook for market and own unit sales due to faster than expected entry-level DSLR market contraction and economic slowdown in China Aiming to recover profitability, mainly through expanded sales of full-size mirrorless cameras and lenses (Billions of y
Slide 17: Imaging System – Inkjet Printers
Imaging System – Inkjet Printers 1Q: Unit sales decline due to market contraction FY: Aiming for market exceeding growth through strengthened lineup of refillable ink tank models and investment into sales & marketing (Billions of yen) 1Q Full Year 2019 2019 2019 2018 % 2018 % Amount Current Prev
Slide 18: Medical System
Medical System 1Q: Although sales declined, progress was made penetrating the market with new products FY: Aiming for sales and profits growth, accelerating sales of strong selling new products Work to improve profitability, strengthening ongoing group efforts (Billions of yen) 1Q Full Year 20
Slide 19: Industry & Others
Industry & Others Semiconductor Litho. Equip.: Full-year projection revised to reflect postponed investment into memory FPD Litho. Equip.: In line with plan, full-year projection unchanged Network cameras: Double-digit growth leveraging broad lineup and sales network (Billions of yen) 1Q Full
Slide 20: Inventory
Inventory Imaging System: Swiftly bring down inventory to an appropriate level by adjusting production Medical and Industry & Others: Inventory built up in connection with future sales expansion FY 2018 FY 2019 (Billions of yen) 1Q 2Q 3Q 4Q 1Q Amt. 207.5 209.9 224.6 206.1 215.2 Office Days 41 42
Slide 21: Cash Flow
Cash Flow (Full Year) Maintaining projection for cash-on-hand at 500 billion yen Continue to secure funds for new businesses growth FY 2019 FY 2019 FY 2018 Current Previous Actual (Billions of yen) Projection Projection Net cash provided by operating activities 570.0 595.0 365.3 Net cash used in
Slide 22: Canon's Basic Stance Towards Social Responsibility
Sustainability Measures Canon’s Basic Stance Towards Social Responsibility Improve corporate value and contribute to realizing a better society through various activities, under Canon’s corporate philosophy of Kyosei Priority issues Canon is challenging for sustainable growth Contribute to • Creat
Slide 23: Canon's Sustainability Measures
Canon’s Sustainability Measures Top Three Priority Issues Creating new value and Protecting and conserving solving issues the Global environment Contribute to solving issues through innovation Reduce environmental impact throughout the Medical, Security, Industrial Robots etc. entire product life-cy
Slide 24: Supplementary Information
Supplementary Information 23
Slide 25: Net Sales Growth Rate of Hardware & Non-hardware
Net Sales Growth Rate of Hardware & Non-hardware FY 2019 FY 2018 1Q Full Year 1Q Full Year Actual Projection Actual Actual MFDs Hardware -3% +3% -5% -1% JPY Non-hardware -4% -3% +2% -1% Hardware -2% +6% -6% -2% LC Non-hardware -2% 0% 0% -2% LPs Hardware -2% -5% +2% +1% JPY Non-hardware -12% -7% -4%
Slide 26: Color Ratio (MFDs & LPs)
Color Ratio (MFDs & LPs) FY 2019 FY 2018 1Q Full Year 1Q Full Year Actual Projection Actual Actual Net Sales 59% 60% 58% 59% MFDs QTY 58% 59% 57% 58% Net Sales 52% 52% 51% 51% LPs QTY 18% 19% 17% 18% Sales Growth by Monochrome & Color MFDs FY 2019 FY 2018 1Q Full Year 1Q Full Year Actual Projection
Slide 27: Interchangeable Lens Digital Camera Ratio; IC Stepper Unit Breakdown
Interchangeable Lens Digital Camera Ratio FY 2019 FY 2018 1Q Full Year 1Q Full Year Actual Projection Actual Actual Value Base 84% 85% 85% 85% Unit Base 63% 62% 64% 61% * Value Base Includes Interchangeable Lenses IC Stepper Unit Breakdown by Light Source (unit) FY 2019 FY 2018 1Q Full Year 1Q Full