Slide 1: Canon Inc. Second Quarter 2017 Results
Canon Inc. Second Quarter 2017 Results July 27, 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 2Q 2017 Results P03 – 06 FY 2017 Projections P07 – 10 Details by Business P11 – 17 Financial Situation P18 – 20 Supplementary Information P21 – 26 July 27, 2017 Canon Inc. 2
Slide 3: Key Messages
Key Messages Existing business recovery, New business expansion "Solid progress in business structure transformation" Second quarter results – Second consecutive quarter of significant sales and profit growth Raised full-year projection – Net sales +30 billion yen and operating profit +60 billio
Slide 4: 2Q 2017 in Summary
2Q 2017 in Summary Second consecutive quarter of significant sales and profit growth Existing Businesses Trend of recovery continued for laser printers and cameras Sales expansion of lithography equipment New Businesses Continued double-digit growth of network cameras and vacuum deposition equ
Slide 5: Summary of Results
Summary of Results 2Q 2017 Actual (Billions of yen) 2Q 2017 2Q 2016 Pct. Change Actual Actual Net Sales 992.5 860.2 +15.4% Gross Profit 495.6 432.4 +14.6% (% Sales) 49.9% 50.3% Op. Profit 96.3 68.6 +40.4% (% Sales) 9.7% 8.0% Net Income Attributable to Canon Inc. 69.2 53.4 +29.4% (% Sales) 7.0% 6.2%
Slide 6: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 2Q 2017 Actual v. 2Q 2016 Actual (Billions of yen) Sales Op. Profit 2Q 2016 Actual 860.2 68.6 Foreign Exchange Impact Change in Exchange Rate +10.3 +3.0 •1USD: (Net Sales, Cost of Sales, Expenses) 108.08 to 111.12 yen •1EURO: 121.94 to 122.36 yen Sales Volume Impac
Slide 7: Exchange Rate Assumptions
Exchange Rate Assumptions 2017 Current Projection Average 2H17 FY17 FY16 Exchange Rate Yen-1USD 112.00 yen 112.14 yen 108.58 yen Yen-1EURO 125.00 yen 123.39 yen 120.25 yen Impact of Exchange Rate Movement (2H Impact Given a One Yen Change) Net Sales Operating Profit USD 7.2 billion yen 2.3 bil
Slide 8: Overview of Current Projection
Overview of Current Projection Full-year projection "Solid progress in business structure transformation” Versus last year Double-digit sales and profit growth Existing businesses - Remains on a path of recovery New businesses - Continue to post significant sales growth Versus previous project
Slide 9: 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 4,050.0 3,401.5 +19.1% Gross Profit 1,954.0 1,673.8 +16.7% (% Sales) 48.2% 49.2% Op. Profit 330.0 228.9 +44.2% (% Sales) 8.1% 6.7% Net Income Attributable to Cano
Slide 10: 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 (Apr. 26, 2017) 4,020.0 270.0 Change in Exchange Rate Foreign Exchange Impact •1USD: 110.82 to 112.14 yen +38.6 +18.5 •1EURO: 120.26 to 123.39 yen (Net
Slide 11: Office
2Q17 Growth Rate y/y (Unit Base) 2Q17 Color Ratio Office Color Copiers +9% Printers +2% Value Base* Copiers 58% Printers 52% Monochrome -4% +10% Unit Base 54% 17% 2Q 2017 Actual Total +3% +9% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 600 Monochrome copiers
Slide 12: Office
FY17 Growth Rate y/y (Unit Base) FY17 Color Ratio Office Color Copiers +8% Printers +3% Value Base* Copiers 59% Printers 51% Monochrome -3% +1% Unit Base 54% 18% FY 2017 Projection Total +3% +1% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 2,500 Monochrome co
Slide 13: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens 2Q17 -5% Digital Camera Ratio * 2Q17 Digital Cameras Value Base 86% 2Q 2017 Actual Compact Digital -8% Unit Base 57% Cameras Total Digital Cameras -6% * Proportion of Total Digital Cameras (Billions of yen) Sales IJ
Slide 14: 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 -8% Unit Base 59% Cameras Total Digital Cameras -7% * Proportion of Total Digital Cameras (Billions of yen) Sale
Slide 15: Medical System
Medical System 2Q 2017 Actual & FY 2017 Projection ＜Major products＞ (Billions of yen) 500 Sales Op. Profit 15.0% Op.Profit(Billions of yen) 440 Op.Profit Ratio 400 10.0% 300 CT scanners 7.5% Aquilion ONE/GENESIS Edition 200 4.7% 5.0% 132 100 89 21 10 0.2% 0 0 0.0% 1Q17 2Q17 FY17 1Q17 2Q17 FY17 Curre
Slide 16: Industry and Others
Industry and Others IC Lithography Unit Lithography Equipment Breakdown by Light Source 2Q 2017 Actual (Unit Sales) 2Q16 2Q17 2Q16 2Q17 ArF 0 0 IC 12 19 KrF 2 8 (Billions of yen) Sales FPD 10 14 i-line 10 11 Growth rate y/y ( ) Local currency base 250 Sales Eliminations Industry and Others Lithograp
Slide 17: 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 IC 64 74 74 KrF 19 24 24 Growth rate y
Slide 18: Inventories
Inventories (Billions of yen) 800 90 Amount (Billions of yen) Turnover (Days) 700 59 59 70 57 55 54 55 52 53 47 50 591 595 597 600 569 561 30 521 502 494 500 479 10 -10 400 -30 300 -50 2QE15 3QE15 4QE15 1QE16 2QE16 3QE16 4QE16 1QE17 2QE17 July 27, 2017 Canon Inc. 18
Slide 19: Capital Expenditure Free Cash Flow
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) 1,000 1,000 Increase in PP&E Operating C/F Net Income Attributable to Canon Inc. Free C/F Depreciation Investing C/F 750 500 21 315 295 837 250 584 550 500 475 454 500 510 269 260 255 255 220 180 220 151 0 250 -337 264 273 250 26
Slide 20: 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 Previous Projection, 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 1.7 2 634 630 600 600 1.5 500 1 0.5 0 0 FY
Slide 21: Supplementary Information
Supplementary Information July 27, 2017 Canon Inc. 21
Slide 22: 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 +67.8 +22.8 Change in Exchange Rate (Net Sales, Cost of Sales, Expenses) •1USD: 108.58 to 112.14 yen •1EURO: 120.25 to 123.39
Slide 23: Gross Profit Variance Analysis
Gross Profit Variance Analysis 2Q 2017 Actual v. 2Q 2016 Actual (Billions of yen) 2Q17 2Q16 Change (Billions of yen) Gross Profit 495.6 432.4 +63.2 % Sales 49.9% 50.3% -0.4pt. 80 63.2 55.7 40 10.3 7.4 0 -5.8 -4.4 -40 Forex Sales Price Forex Cost Total Impact Volume Change Impact Reduction Change on
Slide 24: Operating Profit Variance Analysis
Operating Profit Variance Analysis 2Q 2017 Actual v. 2Q 2016 Actual (Billions of yen) 2Q17 2Q16 Change Op. Profit 96.3 68.6 +27.7 (Billions of yen) % Sales 9.7% 8.0% +1.7pt. 80 63.2 40 27.7 0 -2.9 -32.6 -40 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Excluding (Fo
Slide 25: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 45 30.0% 653 Debt Debt/Total Assets 613 25.0% 20.0% 15.0% 12.5% 11.9% 10.0% 5.0% 3 2 2 0 0.0% 0.1% 0.0% 0.0% FYE13 FYE14 FYE15 FYE16 2QE17 Supplementary Information July 27, 2017 Canon Inc. 25
Slide 26: Financial Ratios
Financial Ratios (Yen) 900 15% 600 10% 8.4% 8.7% 7.9% 7.4% 5.6% 5.9% 5.0% 5.2% 300 4.3% 5% 3.1% 229.03 200.78 201.65 202.68 137.95 0 0% FY13 FY14 FY15 FY16 FY17 Current Projection EPS(Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information July 27, 2017 Canon Inc. 26