Canon Inc. · TSE:7751
Canon — Q3 2019 Earnings Presentation
24 slides from Canon's earnings presentation, Oct 28, 2019
Slide 1: Third Quarter 2019 Results
Canon Inc. Third Quarter 2019 Results October 28, 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 assump
Slide 2: Agenda
Agenda 3Q 2019 Results P2 – 4 FY 2019 Projection P5 – 9 Details by Business P10 – 16 (3Q 2019 Results & FY 2019 Projection) Financial Situation P17 – 18 Sustainability Measures P19 Supplementary Information P20 – 23 1
Slide 3: Key Message (3Q 2019 Results)
Key Message (3Q 2019 Results) Slowed pace of sales and profit decline compared with the first half thanks to new products and new business growth, despite more challenging external environment External environment (Billions of yen) 3Q 2019 3Q 2018 % Change Global economic slowdown due Actual Actua
Slide 4: FY 2019 Financial Results by Business Unit
FY 2019 Financial Results by Business Unit (3Q 2019 Actual versus 3Q 2018 Actual) Office and Imaging System sales and profit decline affected by macro environment New medical business sales and profit increase thanks to new products 3Q 2019 3Q 2018 (Billions of yen) % Change Actual Actual Office
Slide 5: FY 2019 Operating Profit Analysis
FY 2019 Operating Profit Analysis (3Q 2019 Actual versus 3Q 2018 Actual) Impact from appreciation of the yen against not only the U.S. dollar and euro, but also currencies of emerging market countries Changes in sales volume resulted in lower sales despite medical and network camera sales growth
Slide 6: Key Message (FY 2019 Projection)
Key Message (FY 2019 Projection) Impact of exchange rate movement FX Assumptions （4Q impact given a one yen change） 4Q 2019 FY 2019 Net Sales Op. Profit USD/Yen 105.00 yen 107.99 yen 3.5 billion yen 1.4 billion yen EUR/Yen 117.00 yen 121.07 yen 1.7 billion yen 0.9 billion yen External Environment
Slide 7: FY 2019 Financial Projection
FY 2019 Financial Projection (Full Year) Sales and profit decline due to yen appreciation and deterioration of macro environment Lowered projection for net sales and operating profit by 120.0 billion yen and 27.0 billion yen FY 2019 FY 2019 FY 2018 Amount (Billions of yen) Current % Change Previ
Slide 8: FY 2019 Financial Projection by Business Unit
FY 2019 Financial Projection by Business Unit (Full Year) Significant sales decline of laser printers and cameras affected by external environment Medical and network camera sales and profit growth as well as steady improvement in profitability FY 2019 FY 2019 FY 2018 Amount (Billions of yen) Cu
Slide 9: FY 2019 Operating Profit Analysis
FY 2019 Operating Profit Analysis (FY 2019 Current Projection versus FY 2018 Actual) Sales and profit significantly affected by yen appreciation Changes in sales volume expected to result in lower sales, due to declining sales of laser printers, cameras and industrial equipment, and despite grow
Slide 10: FY 2019 Operating Profit Analysis
FY 2019 Operating Profit Analysis (FY 2019 Current Projection versus FY 2019 Previous Projection) Lowered outlook for sales volume due to deterioration of macro environment Work to improve expenses through comprehensive review Change in Net Sales, excluding (Billions of yen) FX impact, for refer
Slide 11: Office – MFDs
Office – MFDs Following first half, launch strategic production model for high-volume printing in second half Gain market share through new color MFDs and production devices (Billions of yen) 3Q Full Year 2019 2019 2019 2018 % 2018 % Amount Current Previous Actual Actual Change Actual Change Cha
Slide 12: Office – Laser Printers
Office – Laser Printers Third quarter consumable sales declined mainly affected by economic slowdown in Europe While printer hardware sales declined due to emerging market weakness, sales of new medium- and high-speed models grew (Billions of yen) 3Q Full Year 2019 2019 2019 2018 % 2018 % Amount
Slide 13: Office – Others
Office – Others Also in third quarter, expanded sales of mainly new products that have advantage in handling broad range of media Accelerate sales of new products, strengthening sales network of dealers (Billions of yen) 3Q Full Year 2019 2019 2019 2018 % 2018 % Amount Current Previous Actual Ac
Slide 14: Imaging System – Cameras
Imaging System – Cameras Sales decline due to market contraction and intensifying price competition Accelerate sales of higher-end products through lens lineup enhancement and further strengthening of sales promotion activities (Billions of yen) 3Q Full Year 2019 2019 2019 2018 % 2018 % Amount C
Slide 15: Imaging System – Inkjet Printers
Imaging System – Inkjet Printers Sluggish refillable ink tank printer sales affected by economic slowdown in emerging market countries Stimulate demand for home printing through renewed lineup of ink cartridge models (Billions of yen) 3Q Full Year 2019 2019 2019 2018 % 2018 % Amount Current Prev
Slide 16: Medical System
Medical System Sales and profit growth in the third quarter and for the full year thanks to string of new products Work to overcome challenging external environment and improve performance (Billions of yen) 3Q Full Year 2019 2019 2019 2018 % 2018 % Amount Current Previous Actual Actual Change Ac
Slide 17: Industry & Others
Industry & Others Sales of lithography equipment declined, but memory market showing signs of bottoming out Shift to sales growth from second half thanks to recovery in OLED vacuum deposition equipment demand Maintain network camera growth, leveraging strengths in high-resolution and high low-
Slide 18: Inventory
Inventory Imaging System - Work to lower inventory level towards end of year Industry & Others - Building up inventory for future sales expansion FY 2018 FY 2019 (Billions of yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q Amt. 207.5 209.9 224.6 206.1 215.2 205.8 201.1 Office Days 41 42 46 42 44 44 44 Amt. 140.5 145.
Slide 19: Cash Flow
Cash Flow (Full Year) Lowered outlook for free cash flow, but still secure a level of acceptable liquidity FY 2019 FY 2019 FY 2018 Current Previous Actual (Billions of yen) Projection Projection Net cash provided by operating activities 380.0 450.0 365.3 Net cash used in investing activities -220.
Slide 20: Sustainability Measures
Sustainability Measures Activities & Results in Environmental Area Achievement of Medium-term Environmental Targets Improvement Index: Lifecycle CO2 emissions per product (3% CAGR improvement) Coverage: Entire product lifecycle 50% Total Improvement by 2030 *Compared with 2008 Production Organ
Slide 21: Supplementary Information
Supplementary Information 20
Slide 22: Net Sales Growth Rate of Hardware & Non-hardware
Net Sales Growth Rate of Hardware & Non-hardware FY 2019 FY 2018 3Q Full Year 3Q Full Year Actual Projection Actual Actual MFDs Hardware -4% -5% -3% -1% JPY Non-hardware -6% -6% -1% -1% Hardware +1% -1% -3% -2% LC Non-hardware -2% -2% -1% -2% LPs Hardware -2% -7% +1% +1% JPY Non-hardware -13% -15% +
Slide 23: Color Ratio (MFDs & LPs)
Color Ratio (MFDs & LPs) FY 2019 FY 2018 3Q Full Year 3Q Full Year Actual Projection Actual Actual Net Sales 59% 60% 58% 59% MFDs QTY 60% 59% 56% 58% Net Sales 52% 52% 52% 51% LPs QTY 23% 21% 19% 18% Sales Growth by Monochrome & Color MFDs FY 2019 FY 2018 3Q Full Year 3Q Full Year Actual Projection
Slide 24: Interchangeable Lens Digital Camera Ratio; IC Lithography Equipment Unit Breakdown
Interchangeable Lens Digital Camera Ratio FY 2019 FY 2018 3Q Full Year 3Q Full Year Actual Projection Actual Actual Value Base 84% 85% 85% 85% Unit Base 60% 62% 60% 61% * Value Base Includes Interchangeable Lenses IC Lithography Equipment Unit Breakdown by Light Source (Units) FY 2019 FY 2018 3Q Ful