Slide 1: Canon Inc. First Quarter 2014 Results
Canon Inc. First Quarter 2014 Results April 24, 2014 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 1Q 2014 Results P3 – 5 FY 2014 Projections P6 – 9 Details by Business P10 – 16 Financial Situation P17 – 19 Supplementary Information P20 – 25 April 24, 2014 Canon Inc. 2
Slide 3: 1Q 2014 in Summary
1Q 2014 in Summary External Environment Gradual global economic recovery Yen's depreciation Our markets Office and Industrial Equip. – Solid Camera – Slow start, but early signs of bottoming out Results Four consecutive quarters of sales and profit growth April 24, 2014 Canon Inc. 3
Slide 4: Summary of Results
Summary of Results 1Q 2014 Actual (Billions of yen) 1Q 2014 1Q 2013 Pct. Change Actual Actual Net Sales 868.3 816.7 +6.3% Gross Profit 431.5 385.9 +11.8% (% Sales) 49.7% 47.3% Op. Profit 82.6 54.8 +50.9% (% Sales) 9.5% 6.7% Net Income Attributable to Canon Inc. 47.6 40.9 +16.4% (% Sales) 5.5% 5.0% F
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 1Q 2014 Actual v. 1Q 2013 Actual (Billions of yen) Sales Op. Profit 1Q 2013 Actual 816.7 54.8 Foreign Exchange Impact Change in Exchange Rate +56.5 +17.1 (Net Sales, Cost of Sales, Expenses) •1USD: 92.76 to 102.69 yen •1EURO: 122.35 to 140.77 yen Sales Volume Impac
Slide 6: Assumptions
Assumptions 2014 Current Projection Average 2Q-4Q14 FY14 FY13 Exchange Rate Yen-1USD 100.00 yen 100.61 yen 97.84 yen Yen-1EURO 135.00 yen 136.29 yen 130.01 yen Impact of Exchange Rate Movement (2Q-4Q Impact Given a One Yen Change) Net Sales Operating Profit USD 12.7 billion yen 4.9 billion yen
Slide 7: Key Points FY2014
Key Points FY2014 External Environment Gradual global economic recovery Our markets – Recovery, primarily in 2H14 Outlook Achieve second consecutive year of sales and profit increase, return to a path of growth Expand sales through launches of new products Raise profits through improved prof
Slide 8: Summary of Projected Results
Summary of Projected Results FY 2014 Current Projection (Billions of yen) FY 2014 FY 2013 Pct. Change Current Projection Actual Net Sales 3,860.0 3,731.4 +3.4% Gross Profit 1,877.0 1,798.4 +4.4% (% Sales) 48.6% 48.2% Op. Profit 365.0 337.3 +8.2% (% Sales) 9.5% 9.0% Net Income Attributable to Canon I
Slide 9: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2014 Current Projection v. FY 2014 Previous Projection (Billions of yen) Sales Op. Profit Previous Projection (Jan. 29, 2014) 3,850.0 360.0 Change in Exchange Rate Foreign Exchange Impact •1USD: 100.00 to 100.61 yen +18.0 +7.8 •1EURO: 135.00 to 136.29 yen (Net S
Slide 10: Office
1Q14 Growth Rate y/y (Unit Base) 1Q14 Color Ratio Office Color Copiers +7% Printers +31% Value Base* Copiers 55% Printers 49% Monochrome 0% -2% Unit Base 38% 17% 1Q 2014 Actual Total +2% +2% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 800 Monochrome copiers
Slide 11: Office
FY14 Growth Rate y/y (Unit Base) FY14 Color Ratio Office Color Copiers +19% Printers +12% Value Base* Copiers 56% Printers 46% Monochrome +9% -1% Unit Base 39% 16% FY 2014 Projection Total +13% +1% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 3,000 Monochrome
Slide 12: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens 1Q14 -7% Digital Camera Ratio * 1Q14 Digital Cameras Value Base 83% 1Q 2014 Actual Compact Digital -30% Unit Base 41% Cameras Total Digital Cameras -22% * Proportion of Total Digital Cameras IJP -9% * Value Base Inc
Slide 13: Imaging System
Imaging System FY 2014 Projection Implement measures aimed at achieving stable growth of entry level interchangeable-lens cameras Stimulate demand through initiatives aimed at expanding the user base Improve product mix Expand sales in emerging markets April 24, 2014 Canon Inc. 13
Slide 14: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens FY14 -1% Digital Camera Ratio * FY14 Digital Cameras Value Base 84% FY 2014 Projection Compact Digital -20% Unit Base 42% Cameras Total Digital Cameras -13% * Proportion of Total Digital Cameras IJP +2% * Value Base
Slide 15: Industry and Others
Industry and Others Lithography Equipment IC Lithography Unit Breakdown by Light Source (Unit Sales) 1Q13 1Q14 1Q 2014 Actual 1Q13 1Q14 ArF 0 0 IC 5 12 KrF 0 3 FPD 0 2 i-line 5 9 (Billions of yen) Sales Growth rate y/y ( ) Local currency base 180 Sales Eliminations Lithography Equipment Others 150 I
Slide 16: Industry and Others
Industry and Others Lithography Equipment IC Lithography Unit Breakdown by Light Source (Unit Sales) FY14 FY14 FY 2014 Projection FY14 FY14 FY13 Previous Current FY13 Previous Current Projection Projection Projection Projection ArF 0 0 0 (Billions of yen) Sales Growth rate y/y ( ) Local currency bas
Slide 17: Inventories
Inventories (Billions of yen) 800 Amount (Billions of yen) 90 Turnover (Days) 700 63 61 60 70 56 57 57 59 52 53 608 50 600 591 589 582 554 542 552 554 550 30 500 10 -10 400 -30 300 -50 1QE12 2QE12 3QE12 4QE12 1QE13 2QE13 3QE13 4QE13 1QE14 April 24, 2014 Canon Inc. 17
Slide 18: 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 750 750 500 500 215 210 230 240 240 249 257 225 213 171 515 510 507 250 250 470 384 300 300 275 270 270 270 261
Slide 19: Cash on Hand
Cash on Hand Cash on Hand (Year-end) 1500 4 Cash-on-hand (Bilions of yen) Cash-on-hand 3.5 (In months of 2nd-half net sales, except FYE14, which is based on full-year net sales) 3 2.5 2.5 2.6 1000 2.4 2.4 2.3 2.5 841 825 789 2 773 775 667 1.5 500 1 0.5 0 0 FYE10 FYE11 FYE12 FYE13 FYE14 FYE14 Previou
Slide 20: Supplementary Information
Supplementary Information April 24, 2014 Canon Inc. 20
Slide 21: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2014 Current Projection v. FY 2013 Actual (Billions of yen) Sales Op. Profit FY 2013 Actual 3,731.4 337.3 Foreign Exchange Impact +70.6 +16.9 Change in Exchange Rate (Net Sales, Cost of Sales, Expenses) •1USD: 97.84 to 100.61 yen •1EURO: 130.01 to 136.29 y
Slide 22: Gross Profit Variance Analysis
Gross Profit Variance Analysis 1Q 2014 Actual v. 1Q 2013 Actual (Billions of yen) 1Q14 1Q13 Change (Billions of yen) Gross Profit 431.5 385.9 +45.6 % Sales 49.7% 47.3% +2.4pt. 100 56.5 45.6 50 18.8 7.1 0 -17.3 -19.5 -50 -100 Forex Sales Price Forex Cost Total Impact Volume Change Impact Reduction Ch
Slide 23: Operating Profit Variance Analysis
Operating Profit Variance Analysis 1Q 2014 Actual v. 1Q 2013 Actual (Billions of yen) 1Q14 1Q13 Change Op. Profit 82.6 54.8 +27.8 (Billions of yen) % Sales 9.5% 6.7% +2.8pt. 100 45.6 50 27.8 2.1 0 -19.9 -50 -100 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Excludin
Slide 24: 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% 11 12 10 1.0% 4 3 0.3% 0.3% 0.1% 2 0.1% 0.1% 0 0.0% FYE10 FYE11 FYE12 FYE13 1QE14 Supplementary Information April 24, 2014 Canon Inc. 24
Slide 25: Financial Ratios
Financial Ratios (Yen) 900 15% 9.2% 9.6% 600 10% 8.7% 8.4% 8.2% 6.3% 6.3% 5.7% 5.6% 5.6% 300 5% 199.71 204.49 200.78 213.53 191.34 0 0% FY10 FY11 FY12 FY13 FY14 Current Projection EPS(Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information April 24, 2014 Canon Inc. 25