Canon Inc. · TSE:7751
Canon — Q1 2006 Earnings Presentation
28 slides from Canon's earnings presentation, Apr 27, 2006
Slide 1: Canon Inc. First Quarter 2006 Results
Canon Inc. First Quarter 2006 Results April 27, 2006 Toshizo Tanaka Senior Managing Director, Group Executive Finance and Accounting Headquarters This presentation contains forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertaint
Slide 2: Agenda
Agenda 1Q 2006 Results P3-12 2Q&FY 2006 Projections P13-20 Supplementary Information P21-28 April 27, 2006 Canon Inc. 2
Slide 3: Summary of Results
Summary of Results 1Q 2006 Actual (Billions of yen) 1Q06 1Q06 1Q05 % Change Actual Projection Actual Projection Actual Net sales 923.3 900.0 843.4 +2.6% +9.5% Gross profit 468.5 439.0 409.7 +6.7% +14.4% [% sales] 50.7% 48.8% 48.6% Op. profit 170.1 153.0 143.3 +11.2% +18.7% [% sales] 18.4% 17.0% 17.0
Slide 4: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 1Q 2006 Actual v. 1Q 2006 Projection (Billions of yen) 1Q 2006 Sales Op. Profit Projection (Jan. 30, 2006) 900.0 153.0 Change in Exchange Rate Foreign exchange impact +11.3 +8.4 •1USD: 115.00 to 116.96 yen [net sales, cost of sales, expenses] •1EURO: 135.00 to 140.
Slide 5: Business Machines
Business Machines 1Q 2006 Actual Sales Operating Profit (Billions of yen) Growth rate y/y (Billions of yen) ( ) Local currency base 900 OP ratio 300 30% 23.7% 23.3% 24.1% 600 200 20% +6.3%(-0.0%) 300 594 632 631 +8.1% 100 10% 141 147 152 0 0 0% 1Q05 1Q06 1Q06 1Q05 1Q06 1Q06 Projection Projection Apr
Slide 6: Office Imaging Products
Office Imaging Products 1Q 2006 Actual Sales (Billions of yen) Growth rate y/y Growth rate y/y ( ) Local currency base (Unit base) Others Copying machines Color 400 +4.1%(-0.6%) 1Q Monochrome Color +24% Monochrome -5% 292 286 300 275 Total -2% +5.4%(+1.8%) +19.5%(+14.9%) Color ratio 200 (Copying mac
Slide 7: Computer Peripherals
Computer Peripherals 1Q 2006 Actual Growth rate y/y (Unit base) LBP 1Q Sales Color +65% (Billions of yen) Growth rate y/y Monochrome -4% ( ) Local currency base Total +1% Others IJP Color ratio (LBP) 400 LBP +8.4%(+0.1%) 1Q 315 317 Value base* 33% 292 300 Unit base 13% +2.0%(-2.6%) *Includes consuma
Slide 8: Cameras
Cameras 1Q 2006 Actual Sales Operating Profit (Billions of yen) Growth rate y/y (Billions of yen) ( ) Local currency base 300 OP ratio 60 30% 22.9% 200 19.4% 40 20% 14.9% +20.1%(+12.8%) +84.9% 100 192 44 174 20 10% 160 34 24 0 0 0% 1Q05 1Q06 1Q06 1Q05 1Q06 1Q06 Projection Projection April 27, 2006 C
Slide 9: Cameras
Cameras 1Q 2006 Actual Sales (Billions of yen) Growth rate y/y Growth rate y/y ( ) Local currency base (Unit base) 250 Video cameras 1Q Digital cameras +20.1%(+12.8%) Digital Film cameras/Lenses cameras +19% 200 192 174 +1.2%(-4.8%) 160 D SLR ratio* 150 1Q Value base 41% +22.9%(+15.4%) 100 Unit base
Slide 10: Optical and Other Products
Optical and Other Products 1Q 2006 Actual Sales Operating Profit (Billions of yen) Growth rate y/y (Billions of yen) ( ) Local currency base 150 OP ratio 15 15% 10.1% 10.3% 100 10 10% +14.6% +11.3%(+8.1%) 15 13 5.1% 50 94 100 90 5 5% 7 0 0 0% 1Q05 1Q06 1Q06 1Q05 1Q06 1Q06 Projection Projection *Excl
Slide 11: Optical and Other Products
Optical and Other Products 1Q 2006 Actual Sales (Billions of yen) Growth rate y/y ( ) Local currency base IC Stepper Unit Breakdown IC Stepper 300mm Ratio 150 Others By Light Source (Units) SPE ArF 300mm +11.3%(+8.1%) 5% 100 KrF 43% 52% 68% 100 90 94 i-line +72.6%(+68.1%) 50 SPE (Unit sales) 1Q05 1Q
Slide 12: Operating Profit by Segment
Operating Profit by Segment 1Q 2006 Projection v. 1Q 2005 Actual (Billions of yen) 1Q06 1Q05 Amt. Chg. Pct. Chg. Business Machines 152.2 140.8 +11.4 +8.1% [% sales] 24.1% 23.7% Cameras 44.0 23.8 +20.2 +84.9% [% sales] 22.9% 14.9% Optical & Other 14.5 12.7 +1.8 +14.6% Products [% sales] 10.3% 10.1% C
Slide 13: Assumptions
Assumptions 2Q-4Q 2006 Average 2Q-4Q06 FY06 FY05 Exchange Rate USD 117.00 yen 116.99 yen 110.58 yen EURO 138.00 yen 138.59 yen 137.04 yen Impact of Exchange Rate Movement (2-4Q impact given a one yen change) Net sales Operating profit USD 11.0 billion yen 6.1 billion yen EURO 5.8 billion yen
Slide 14: Summary of Projected Results
Summary of Projected Results 2Q&FY 2006 Current Projection (Billions of yen) 2006 2005 % Change Current Previous Previous % sales % sales Actual % sales Actual projection projection projection Net sales 1,036.7 1,010.0 912.5 +2.6% +13.6% Gross profit 506.5 48.9% 490.0 48.5% 440.4 48.3% +3.4% +15.0%
Slide 15: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit 2Q&FY 2006 Current Projection v. 2Q&FY 2006 Previous Projection (Billions of yen) 2Q FY Sales Op. Profit Sales Op. Profit Previous projection (Jan, 30, 2006) 1,010.0 143.0 4,060.0 653.0 Foreign exchange impact +13.7 +8.1 +54.3 +34.3 [net sales, cost of sales,
Slide 16: Office Imaging Products
Office Imaging Products 2Q&FY 2006 Current Projection Growth rate y/y Sales (Unit base) (Billions of yen) Growth rate y/y ( ) Local currency base Copying machines 500 2,000 2Q FY Others Color +8% +19% Color Monochrome +7.2%(+3.4%) Mono- 400 -3% -6% +7.5%(+4.9%) chrome 1,500 317 Total -2% -3% 314 1,2
Slide 17: Computer Peripherals
Computer Peripherals Growth rate y/y (Unit base) 2Q&FY 2006 Current Projection LBP 2Q FY Color +37% +39% Mono- Sales chrome +3% +7% (Billions of yen) Growth rate y/y Total +7% +10% ( ) Local currency base Color ratio (LBP) 500 Others 2,000 2Q FY IJP +11.5%(+7.3%) Value 400 LBP +15.5%(+9.2%) base* 37
Slide 18: Cameras
Cameras 2Q&FY 2006 Current Projection Sales Growth rate y/y (Unit base) (Billions of yen) Growth rate y/y ( ) Local currency base 2Q FY 500 1,500 Digital Video cameras cameras +18% +14% Digital cameras Film cameras/Lenses +11.5%(+8.3%) 400 1,200 D SLR ratio* 980 +14.8%(+9.7%) 951 2Q FY 879 +14.4%(+1
Slide 19: Optical and Other Products
Optical and Other Products 2Q&FY 2006 Current Projection Growth rate y/y ( ) Local currency base Sales IC Stepper Unit Breakdown (Billions of yen) (Billions of yen) IC Stepper Unit Breakdown by Light Source by Light Source +14.2%(+12.2%) 150 Others +24.1%(+21.6%) i-line 500 ArF 407 426 1% SPE KrF 49
Slide 20: Operating Profit by Product
Operating Profit by Product 2Q&FY 2006 Current Projection v. 2Q&FY 2005 Actual (Billions of yen) 2006 2005 Current Projection Actual 2Q FY 2Q FY Business machines 141.7 619.8 118.6 542.0 % sales 21.0% 22.7% 19.7% 21.7% Cameras 46.5 211.1 38.0 173.7 % sales 18.5% 21.5% 17.4% 19.8% Optical and Others
Slide 21: Supplementary Information
Supplementary Information April 27, 2006 Canon Inc. 21
Slide 22: Gross Profit Variance Analysis
Gross Profit Variance Analysis 1Q 2006 Actual v. 1Q 2005 Actual (Billions of yen) 1Q06 1Q05 Change (Billions of yen) Gross Profit 468.5 409.7 + 58.9 90 % sales 50.7% 48.6% + 2.1 pt 59 60 43 30 24 25 5 0 -10 -30 -28 -60 Forex Sales Price Forex Cost Others Total impact volume change impact reduction c
Slide 23: Operating Profit Variance Analysis
Operating Profit Variance Analysis 1Q 2006 Actual v. 1Q 2005 Actual (Billions of yen) 1Q06 1Q05 Change (Billions of yen) Op. Profit 170.1 143.3 + 26.9 90 % sales 18.4% 17.0% + 1.4 pt 59 60 27 30 0 -7 -30 -25 -60 Total change in Change in Change in SG&A Total change in gross profit SG&A forex impact
Slide 24: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 1Q 2006 Actual v. 1Q 2005 Actual (Billions of yen) Sales Op. Profit 1Q 2005 Actual 843.4 143.3 Change in Exchange Rate Foreign exchange impact +42.8 +25.1 •1USD: 104.58 to 116.96 yen [net sales, cost of sales, expenses] •1EURO: 137.04 to 140.71 yen Sales volume imp
Slide 25: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit 2Q&FY 2006 Current Projection v. 2Q&FY 2005 Actual (Billions of yen) 2Q FY Sales Op. Profit Sales Op. Profit 2005 Actual 912.4 126.9 3,754.2 583.0 Foreign exchange impact +39.0 +21.8 +103.6 +58.0 [net sales, cost of sales, expenses] Change in Exchange Rate (2
Slide 26: Inventories, Interest Bearing Debt
Inventories Interest Bearing Debt (Billions of yen) (Days) (Billions of yen) 800 Inventories 80 200 Debt 8% Turnover (Days) Debt/Total Assets 600 60 150 6% 51 49 5.0% 49 49 47 3.1% 400 40 100 4% 148 545 510 489 444 432 200 20 50 98 2% 1.1% 0.8% 0.8% 39 32 31 0 0 0 0% FY02 FY03 FY04 FY05 1Q06 FY02 FY
Slide 27: Capital Expenditure, Free Cash Flow
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) 800 Capex 800 Operating C/F Net income Free C/F Depreciation Investing C/F 190 600 600 205 432 384 309 400 400 343 690 266 276 606 562 500 466 470 401 384 200 200 319 253 240 226 210 200 193 184 0 0 FY03 FY04 FY05 FY06 FY03 FY04
Slide 28: Financial Ratios
Financial Ratios (Yen) EPS (Basic) 800 20% Dividend per share 16.8% ROE 15.9% 16.0% 15.6% ROA 600 15% 12.5% 486.70 432.94 313.81 387.80 400 10.1% 10% 10.1% 10.1% 217.56 9.0% 6.6% 200 5% 100 100 50 65 30 0 0% FY02 FY03 FY04 FY05 FY06 Projection Supplementary Information April 27, 2006 Canon Inc. 28