Canon Marketing Japan Incorporated · TSE:8060
Canon Marketing Japan — Q2 2024 Earnings Presentation
42 slides from Canon Marketing Japan's earnings presentation, Jul 24, 2024
Slide 1: FY2024 2Q Consolidated Results
FY2024 2Q Consolidated Results July 24, 2024 Hatsumi Hirukawa Director, Senior Vice President * The figures are rounded off to the nearest 100 million yen in this material. * Forward-looking statements and results forecasts presented in this material are based on the management’s assumptions using c
Slide 2: Agenda
Agenda ◼ Key Points P.3 ◼ Summary of Results P.4, 7 ◼ Operating Income Variance Analysis P.5, 8 ◼ Results by Segment P.6, 9 ◼ Segment Results P.10-13 ◼ Sales of Products and Services by Segment P.14-15 ◼ Summary of Forecasts P.16 ◼ Forecasts by Segment P.17-19 ◼ Segment Forecasts P.20-21 ◼ 【Suppleme
Slide 3: Key Points
Key Points Summary of 2Q of FY2024 Financial Results • Net sales and income increased year on year. • IT Solutions business continued to grow at a high rate. Sales rose 21% year on year. • Net income attributable to owners of the parent surpassed previous record highs for both Q2 results and the fir
Slide 4: Summary of Results (2Q)
2Q 2024 Actual Summary of Results (from April 1 to June 30) ✓ Net income attributable to owners of the parent surpassed previous quarterly record highs. (Billions of yen) 2Q 2Q Changes FY2023 FY2024 Amount % Net Sales 148.0 161.7 +13.7 +9％ (33.7％) (32.3％) (-1.4％) Gross Profit 49.8 52.2 +2.3 +5％ (8.0
Slide 5: Operating Income Variance Analysis (2Q)
2Q 2024 Actual Operating Income Variance Analysis (from April 1 to June 30) (Billions of yen) +4.6 -2.3 -1.9 11.8 12.2 2Q FY2023 Increase in Deterioration in Increase in 2Q FY2024 net sales GP margin SG&A expenses Deterioration in GP margin Increase in SG&A expenses • IT expenses +0.4B • Gross profi
Slide 6: Results by Segment (2Q)
2Q 2024 Actual Results by Segment (from April 1 to June 30) (Billions of yen) 2Q 2Q Changes FY2023 FY2024 Net sales Op. income Net sales Op. income Net sales Op. income Consumers 33.7 3.4 34.0 3.1 +0.3 -0.3 Enterprise 52.9 4.0 60.6 4.5 +7.7 +0.5 Area 56.7 4.2 57.1 4.4 +0.4 +0.2 Professional 10.2 0.9
Slide 7: Summary of Results (1Q-2Q)
1Q-2Q 2024 Actual Summary of Results (from January 1 to June 30) ✓ Net income attributable to owners of the parent surpassed previous quarterly record highs. (Billions of yen) Changes 1Q-2Q 1Q-2Q FY2023 FY2024 Amount % Net Sales 302.8 318.9 +16.1 +5％ (33.7％) (32.4％) (-1.3％) Gross Profit 102.0 103.4
Slide 8: Operating Income Variance Analysis (1Q-2Q)
1Q-2Q 2024 Actual Operating Income Variance Analysis (from January 1 to June 30) +5.4 -4.0 (Billions of yen) -2.5 27.1 26.0 1Q-2Q FY2023 Increase in Deterioration in Increase in 1Q-2Q FY2024 net sales GP margin SG&A expenses Deterioration in GP margin Increase in SG&A expenses • Gross profit margin
Slide 9: Results by Segment (1Q-2Q)
1Q-2Q 2024 Actual Results by Segment (from January 1 to June 30) (Billions of yen) 1Q-2Q 1Q-2Q Changes FY2023 FY2024 Net sales Op. income Net sales Op. income Net sales Op. income Consumers 66.3 6.6 64.1 5.2 -2.2 -1.4 Enterprise 107.5 9.9 119.6 10.0 +12.1 +0.1 Area 116.5 8.9 116.9 9.6 +0.4 +0.7 Prof
Slide 10: Segment Results: Consumers Segment
Segment Results Consumers Segment ✓ Net sales grew after a rise in sales of IT products and other factors. ✓ Operating income dropped due to a decline in gross profit reflecting weaker sales of high-value added Consumers products. (Billions of yen) 2Q 1Q-2Q FY2023 FY2024 Changes FY2023 FY2024 Change
Slide 11: Segment Results: Enterprise Segment
Segment Results Enterprise Segment ✓ Net sales were up, reflecting the brisk performance of IT solutions despite sales of Canon Products, other staying flat. ✓ Operating income increased, reflecting a rise in gross profit due to higher sales. Consumers (Billions of yen) 2Q 1Q-2Q FY2023 FY2024 Change
Slide 12: Segment Results: Area Segment
Segment Results Area Segment ✓ Net sales hiked. While sales of Canon products, other dropped slightly, those of IT solutions were buoyant. ✓ Operating income surged. While gross profit fell after the transfer of shares of A&A Co., Ltd., selling, general and Consumers administrative expenses, includi
Slide 13: Segment Results: Professional Segment
Segment Results Professional Segment ✓ Net sales increased after a sales rise of Industrial equipment. ✓ Operating income increased, reflecting a rise in gross profit associated with higher sales in Industrial equipment. Consumers (Billions of yen) 2Q 1Q-2Q FY2023 FY2024 Changes FY2023 FY2024 Change
Slide 14: Sales of Products and Services by Segment (2Q)
2Q 2024 Actual Sales of Products and Services by Segment (from April 1 to June 30) Composition (Billions of yen) Consumers Enterprise Area Professional Other Total Ratio 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q FY2023 FY2024 FY2023 FY2024 FY2023 FY2024 FY2023 FY2024 FY2023 FY2024 FY2023 FY2024 FY2024
Slide 15: Sales of Products and Services by Segment (1Q-2Q)
1Q-2Q 2024 Actual Sales of Products and Services by Segment (from January 1 to June 30) Composition (Billions of yen) Consumers Enterprise Area Professional Other Total Ratio 1Q-2Q 1Q-2Q 1Q-2Q 1Q-2Q 1Q-2Q 1Q-2Q 1Q-2Q 1Q-2Q 1Q-2Q 1Q-2Q 1Q-2Q 1Q-2Q 1Q-2Q FY2023 FY2024 FY2023 FY2024 FY2023 FY2024 FY202
Slide 16: Summary of Forecasts
Previous Forecast vs Summary of Forecasts Current Forecast (Billions of yen) FY2024 FY2024 Changes Changes FY2023 Previous Current Amount % Actual Amount % forecast forecast Net sales 645.0 650.0 +5.0 +1％ 609.5 +40.5 +7％ (8.4％) (8.3％) (-0.1％) (8.6％) (-0.3％) Operating income 54.0 54.0 － － 52.5 +1.5 +
Slide 17: Forecasts by Segment
Previous Forecast vs Forecasts by Segment Current Forecast (Billions of yen) FY2024 FY2024 Changes Previous forecast Current forecast Net Op. Net Op. Net sales Op. sales income sales income Amount % income Consumers 139.3 13.7 139.3 13.7 － － － Enterprise 231.2 20.5 236.2 20.5 +5.0 +2％ － Area 235.0 1
Slide 18: Forecasts by Segment
Previous Forecast vs Forecasts by Segment Current Forecast (Billions of yen) FY2023 FY2024 Changes Actual Current forecast Net Op. Net Op. Net sales Op. sales income sales income Amount % income Consumers 138.9 14.1 139.3 13.7 +0.4 +0％ -0.4 Enterprise 220.3 19.7 236.2 20.5 +15.9 +7％ +0.8 Area 229.7
Slide 19: Forecasts by Segment
1Q-2Q Actual and Forecasts by Segment 3Q-4Q Forecast (Billions of yen) FY2023 FY2024 Changes 1Q-2Q Actual 3Q-4Q Actual 1Q-2Q Actual 3Q-4Q Forecast 1Q-2Q 3Q-4Q Net Op. Net Op. Net Op. Net Op. Net Op. Net Op. sales income sales income sales income sales income sales income sales income Consumers 66.3
Slide 20: Segment Forecasts: Consumers and Enterprise
Segment Forecasts ◼ Consumers (Billions of yen) Consumers ✓ Net sales are forecast to increase due to steady sales of digital interchangeable lens cameras and IT products. ✓ Operating income is expected to increase, reflecting a rise in gross profit due to higher sales. FY2023 FY2024 Changes 1Q-2Q A
Slide 21: Segment Forecasts: Area and Professional
Segment Forecasts ◼ Area (Billions of yen) Consumers ✓ Net sales are expected to rise following strong sales of IT solutions. ✓ Operating income is expected to increase, reflecting a rise in gross profit due to higher sales. FY2023 FY2024 Changes 1Q-2Q Actual 3Q-4Q Actual 1Q-2Q Actual 3Q-4Q Forecast
Slide 22: Supplementary Material: Outline of Main Products Sales
【Supplementary Material】 Outline of Main Products Sales Please see the Supplementary Material for FY2024 2Q on our website. ・URL https://cweb.canon.jp/eng/ir/library/presentation.html © Canon Marketing Japan Inc. 2024 22
Slide 23: Tender Offer for Own Shares
Tender Offer for Own Shares We resolved to acquire our own shares at the Board of Directors meeting held today. Outline of the Purchase • Total number of shares： 22,000,000 shares (16.78% of total number of issued shares) • Total acquisition price : approximately 90 billion yen • Period of Tender Of
Slide 24: Canon Marketing Japan Group
Canon Canon Marketing Japan Group
Slide 25: Supplementary Information
Supplementary Information
Slide 26: Capital Relationship Diagram
Capital Relationship Diagram Canon Marketing Japan Inc. 57.76% Canon Inc. 73,303 100% Canon IT Solutions Inc. 90.00% Qualysite Technologies Inc. 3,617 100 100% TCS Inc. 87.50% Canon Software America,Inc. 868 US$0.8 million 100% Canon System & Support Inc. 49.00% Canon IT Solutions (Thailand) 4,561 C
Slide 27: SG&A Expenses (2Q)
2Q 2024 Actual SG&A Expenses (from April 1 to June 30) (Billions of yen) 2Q 2Q Changes FY2023 FY2024 Advertising expenses 1.1 0.9 -0.2 Promotion expenses 0.7 0.8 +0.1 Warranty expenses 0.7 0.7 -0.1 Other direct selling expenses 4.4 4.7 +0.3 Personnel expenses 23.3 23.3 -0.0 Office expenses 2.1 2.0 -
Slide 28: SG&A Expenses (1Q-2Q)
1Q-2Q 2024 Actual SG&A Expenses (from January 1 to June 30) (Billions of yen) 1Q-2Q 1Q-2Q Changes FY2023 FY2024 Advertising expenses 2.1 1.9 -0.2 Promotion expenses 1.5 1.4 -0.1 Warranty expenses 1.5 1.4 -0.1 Other direct selling expenses 8.7 9.0 +0.3 Personnel expenses 46.0 45.6 -0.4 Office expense
Slide 29: Non-operating Income and Expenses
Non-operating Income and Expenses (Billions of yen) 2Q 2Q 1Q-2Q 1Q-2Q Changes Changes FY2023 FY2024 FY2023 FY2024 Interest income 0.1 0.1 +0.0 0.2 0.2 +0.0 Dividend income 0.1 0.1 +0.0 0.1 0.2 +0.0 Insurance income 0.4 0.4 +0.0 0.5 0.4 -0.0 Foreign exchange gains -0.0 0.1 +0.1 - 0.2 +0.2 Gain on inv
Slide 30: Extraordinary Income and Losses
Extraordinary Income and Losses (Billions of yen) 2Q 2Q 1Q-2Q 1Q-2Q Changes Changes FY2023 FY2024 FY2023 FY2024 Gain on sales of long-lived assets 0.0 0.0 -0.0 0.0 0.0 -0.0 Gain on sales of shares of subsidiaries and associates - 2.9 +2.9 - 2.9 +2.9 Gain on sales of investments in securities 0.1 - -
Slide 31: Quarterly Balance Sheets
Quarterly Balance Sheets (Billions of yen) Dec. 31 Jun. 30 Changes ■ Notes accounts receivable-trade 2023 2024 Assets 557.4 575.8 +18.5 and contract assets Current assets 418.6 400.2 -18.5 68 71 68 66 Cash and deposits 89.7 116.8 +27.1 60 Notes accounts receivable- 111.6 105.5 -6.2 trade and contrac
Slide 32: Financial Indicator
Financial Indicator 9.2% 8.7% 8.4% 8.2% 8.5% 8.6% 8.3% 6.6% 7.2% 6.6% 6.6% 6.5% 5.7% 5.7% (Billions of yen) 4.4% Net income attributable Operating income margin ROE ROA to owners of the parent 35.6 36.5 37.5 29.4 22.0 FY2020 FY2021 FY2022 FY2023 FY2024 Forecast © Canon Marketing Japan Inc. 2024 32
Slide 33: Financial Indicator: Cash Flow and Capital Investment
Financial Indicator ■Cash Flow ■ Capital Investment 35.9 1Q-2Q 3Q-4Q Full Actual Forecast year 24.9 FY2023 Actual 4.9 4.5 9.4 FY2024 Forecast 5.9 7.9 13.9 32.1 31.8 4.2 ■ Depreciation and amortization -7.1 1Q-2Q 1Q-2Q FY2023 FY2024 1Q-2Q 3Q-4Q Full Net cash provided by operating activities Actual Fo
Slide 34: Financial Indicator: Payout Ratio and Dividends
Financial Indicator Payout Ratio 43% 41% 33% 35% 289 33% 281 274 227 EPS：Yen 170 Dividend per share : Yen 120 120 90 75 60 FY2020 FY2021 FY2022 FY2023 FY2024 Forecast © Canon Marketing Japan Inc. 2024 34
Slide 35: Sales Breakdown by Segment (FY2023)
Sales Breakdown by Segment (FY2023) (Billions of yen) 4 Professional 1 Consumers Operating income Operating income Net sales Net sales 3.6 6% 14.1 40.2 (9.0%) 138.9 22% (10.2%) Customers in specialized areas Individual customers -Production printing -Industrial equipment Net sales 609.5 -Healthcare
Slide 36: Business Summary by Segment
Business Summary by Segment 1 Consumers 2 Enterprise This segment sells imaging products, including cameras which are the For large, quasi-large and medium companies, this segment directly business Canon has been operating since its foundation, inkjet printers provides Canon products and IT Solution
Slide 37: Business Summary by Segment
Business Summary by Segment 3 Area 4 Professional Harnessing diverse channels consisting of indirect sales by business This segment offers solutions to customers in the specialized areas partners and system partners, and direct sales by Canon System and like Production printing, Industrial equipment
Slide 38: Contribution of the service business model to value creation
Enterprise and Area Segments Both Enterprise and Area segments are providing Canon products and IT Solutions, but their customers are different. Canon products IT Solutions business business Contribution of the service business model to value creation Promote DX business through co-creation Enterpri
Slide 39: Mission-critical Total Solution System for Manufacturing Industry
Mission-critical Total Solution System for Manufacturing Industry Logistic issues in 2024 Provide SCM/ERP total solution Issue Reduction of food waste utilizing mathematical technologies Production Scheduler Demand forecasts / supply and demand planning Customers Supply Chain Planning ⚫ Ajinomoto Co
Slide 40: Full Support for Business Innovation
Full Support for Business Innovation Issue Shortage of IT professionals Total support for selection, introduction, operation, maintenance and education of IT solutions © Canon Marketing Japan Inc. 2024 40
Slide 41: Outsiders' Assessments and Inclusion in Indices
Outsiders' Assessments and Inclusion in Indices ESG Indexes Human Capital Selected as a constituent Selected as a constituent Selected as a constituent of Eruboshi certification KENKO Investment for of the FTSE4Good Index of the FTSE Blossom the FTSE Blossom Japan (two stars) Health Stock Selection
Slide 42: Canon Marketing Japan Group
Canon Canon Marketing Japan Group
Canon Marketing Japan — Q2 2024 Earnings Presentation on 6ix