Slide 1: Canon Inc. Third Quarter 2012 Results
Canon Inc. Third Quarter 2012 Results October 25, 2012 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 2012 Results P3 – 5 FY 2012 Projections P6 – 9 Details by Business P10 – 15 Financial Situation P16 – 18 Supplementary Information P19 – 24 October 25, 2012 Canon Inc. 2
Slide 3: 3Q 2012 in Summary
3Q 2012 in Summary External Environment Global economic - Further slowdown Europe - Weakness becoming worse Emerging markets - Moderating growth Exchange rates - Yen's appreciation against the Euro Results Sales and profit decline Worsening external environment Laser printer inventory
Slide 4: Summary of Results
Summary of Results 3Q 2012 Actual (Billions of yen) 3Q 2012 3Q 2011 Pct. Change Actual Actual Net Sales 799.9 916.9 -12.8% Gross Profit 386.8 452.5 -14.5% (% Sales) 48.3% 49.4% Op. Profit 70.9 122.5 -42.2% (% Sales) 8.9% 13.4% Net Income Attributable to Canon Inc. 50.1 77.9 -35.6% (% Sales) 6.3% 8.5
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 3Q 2012 Actual v. 3Q 2011 Actual (Billions of yen) Sales Op. Profit 3Q 2011 Actual 916.9 122.5 Foreign Exchange Impact Change in Exchange Rate -16.9 -10.4 (Net Sales, Cost of Sales, Expenses) •1USD: 77.75 to 78.58 yen •1EURO: 109.98 to 98.48 yen Sales Volume Impact
Slide 6: Assumptions
Assumptions 2012 Current Projection Average 4Q12 FY12 FY11 Exchange Rate Yen-1USD 78.00 yen 79.08 yen 79.55 yen Yen-1EURO 100.00 yen 101.30 yen 110.72 yen Impact of Exchange Rate Movement (4Q Impact Given a One Yen Change) Net Sales Operating Profit USD 5.4 billion yen 2.5 billion yen EURO 2
Slide 7: Key Points FY2012
Key Points FY2012 External Environment Global economy - Instability and growing concern over further slowdown Exchange rates - Continued underlying trend of yen's appreciation Outlook Made allowances for risks due to unstable external environment Projecting sales and profit decline, but will *
Slide 8: Summary of Projected Results
Summary of Projected Results FY 2012 Current Projection (Billions of yen) FY 2012 FY 2011 Pct. Change Current Projection Actual Net Sales 3,532.0 3,557.4 -0.7% Gross Profit 1,691.1 1,736.8 -2.6% (% Sales) 47.9% 48.8% Op. Profit 356.0 378.1 -5.8% (% Sales) 10.1% 10.6% Net Income Attributable to Canon
Slide 9: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2012 Current Projection v. FY 2012 Previous Projection (Billions of yen) Sales Op. Profit Previous Projection (Jul. 25, 2012) 3,690.0 390.0 Change in Exchange Rate Foreign Exchange Impact •1USD: 79.96 to 79.08 yen -15.7 -9.0 •1EURO: 101.59 to 101.30 yen (Net Sal
Slide 10: Office
Office 3Q12 Growth Rate y/y (Unit Base) 3Q12 Color Ratio 3Q 2012 Actual Copiers Printers Copiers Printers Color -4% -17% Value Base* 54% 48% Monochrome -3% -27% Unit Base 32% 14% (Billions of yen) Sales Growth Rate y/y ( ) Local Currency Base Total -3% -26% *Includes Consumables 800 Monochrome Copie
Slide 11: Office
Office FY12 Growth Rate y/y (Unit Base) FY12 Color Ratio FY 2012 Projection Copiers Printers Copiers Printers Color +13% -8% Value Base* 54% 46% Monochrome +8% -16% Unit Base 34% 13% (Billions of yen) Sales Growth Rate y/y ( ) Local Currency Base Total +10% -15% *Includes Consumables 3,000 Monochrom
Slide 12: Imaging System
Imaging System Growth Rate y/y (Unit Base) Interchangeable Lens 3Q 2012 Actual Digital Camera Ratio * 3Q12 3Q12 Interchangeable Lens Value Base 79% -7% Digital Cameras (Billions of yen) Sales Compact Digital Cameras -21% Unit Base 33% Growth Rate y/y ( ) Local Currency Base * Proportion of 600 Total
Slide 13: Imaging System
Imaging System Growth Rate y/y (Unit Base) Interchangeable Lens FY 2012 Projection Digital Camera Ratio * FY12 FY12 Interchangeable Lens Value Base 76% +22% Digital Cameras (Billions of yen) Sales Growth Rate y/y ( ) Local Currency Base Compact Digital Cameras +1% Unit Base 32% 2,500 * Proportion of
Slide 14: Industry and Others
Industry and Others Lithography Equipment IC Stepper Unit Breakdown 3Q 2012 Actual (Unit Sales) by Light Source 3Q11 3Q12 3Q11 3Q12 IC 11 8 ArF 0 0 FPD 7 3 KrF 2 0 (Billions of yen) Sales Growth Rate y/y ( ) Local Currency Base i-line 9 8 180 Sales Eliminations Lithography Equipment Others Industry
Slide 15: Industry and Others
Industry and Others Lithography Equipment IC Stepper Unit Breakdown FY 2012 Projection (Unit Sales) by Light Source FY12 FY12 FY12 FY12 FY11 Previous Current FY11 Previous Current Projection Projection Projection Projection (Billions of yen) Sales Growth Rate y/y ( ) Local Currency Base IC 52 53 49
Slide 16: Inventories
Inventories 800 Amount (Billions of yen) 90 Turnover (Days) 700 63 70 54 56 57 52 46 46 42 50 600 35 591 554 542 30 518 500 471 479 477 10 436 -10 400 385 -30 300 -50 3QE10 4QE10 1QE11 2QE11 3QE11 4QE11 1QE12 2QE12 3QE12 October 25, 2012 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 Increase in PP&E Operating C/F Net Income Attributable to Canon Inc. Free C/F Depreciation Investing C/F 750 750 402 241 500 500 177 247 249 250 132 234 744 213 611 175 505 250 250 470 385 370 342 328 315 280 276 270
Slide 18: Cash on Hand
Cash on Hand Cash on Hand (Year-end) 1500 4 Cash-on hand (Bilions of yen) Cash-on-hand (In months of 2nd-half net sales) 3.5 2.8 3 1000 2.5 2.5 2.5 2.1 2.1 2.1 841 795 773 2 679 700 630 1.5 500 1 0.5 0 0 FYE08 FYE09 FYE10 FYE11 FYE12 FYE12 Previous Current Projection Projection Note 1: 450, 100, 50,
Slide 19: Supplementary Information
Supplementary Information October 25, 2012 Canon Inc. 19
Slide 20: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2012 Current Projection v. FY 2011 Actual (Billions of yen) Sales Op. Profit FY 2011 Actual 3,557.4 378.1 Change in Exchange Rate Foreign Exchange Impact •1USD: 79.55 to 79.08 yen -91.2 -46.9 •1EURO: 110.72 to 101.30 yen (Net Sales, Cost of Sales, Expenses
Slide 21: Gross Profit Variance Analysis
Gross Profit Variance Analysis 3Q 2012 Actual v. 3Q 2011 Actual (Billions of yen) 3Q12 3Q11 Change (Billions of yen) Gross Profit 386.8 452.5 -65.7 % Sales 48.3% 49.4% -1.1 pt. 100 50 16.6 1.3 0 -0.5 -16.9 -11.8 -50 -54.4 -65.7 -100 Forex Sales Price Forex Cost Others Total Impact Volume Change Impa
Slide 22: Operating Profit Variance Analysis
Operating Profit Variance Analysis 3Q 2012 Actual v. 3Q 2011 Actual (Billions of yen) 3Q12 3Q11 Change Op. Profit 70.9 122.5 -51.6 (Billions of yen) % Sales 8.9% 13.4% -4.5 pt. 100 50 7.1 7.0 0 -50 -51.6 -65.7 -100 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Exclu
Slide 23: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 50 5.0% Debt Debt/Total Assets 40 4.0% 30 3.0% 20 2.0% 14 11 12 10 10 1.0% 0.4% 0.3% 0.3% 0.3% 4 0.1% 0 0.0% FYE08 FYE09 FYE10 FYE11 3QE12 Supplementary Information October 25, 2012 Canon Inc. 23
Slide 24: Financial Ratios
Financial Ratios (Yen) 900 15% 11.1% 9.6% 9.3% 600 9.2% 10% 7.3% 6.3% 6.3% 6.1% 4.9% 300 246.21 5% 3.4% 199.71 204.49 202.99 106.64 0 0% FY08 FY09 FY10 FY11 FY12 Current Projection EPS(Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information October 25, 2012 Canon Inc. 24