Slide 1: Canon Inc. Second Quarter 2012 Results
Canon Inc. Second Quarter 2012 Results July 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 assumpti
Slide 2: Agenda
Agenda 2Q 2012 Results P3 – 5 FY 2012 Projections P6 – 9 Details by Business P10 – 16 Financial Situation P17 – 19 Supplementary Information P20 – 25 July 25, 2012 Canon Inc. 2
Slide 3: 2Q 2012 in Summary
2Q 2012 in Summary External Environment Global economic slowdown Economic stagnation in Europe Gradual recovery in the U.S. Weakening growth in emerging markets Yen‟s appreciation Results Gained share through expanded sales of competitive products Maintained profitability through promp
Slide 4: Summary of Results
Summary of Results 2Q 2012 Actual (Billions of yen) 2Q 2012 2Q 2011 Pct. Change Actual Actual Net Sales 899.2 836.6 +7.5% Gross Profit 439.9 418.5 +5.1% (% Sales) 48.9% 50.0% Op. Profit 92.6 78.4 +18.1% (% Sales) 10.3% 9.4% Net Income Attributable to Canon Inc. 51.7 53.9 -4.0% (% Sales) 5.8% 6.4% Fo
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 2Q 2012 Actual v. 2Q 2011 Actual (Billions of yen) Sales Op. Profit 2Q 2011 Actual 836.6 78.4 Foreign Exchange Impact Change in Exchange Rate -44.1 -21.2 (Net Sales, Cost of Sales, Expenses) •1USD: 81.58 to 80.09 yen •1EURO: 117.28 to 102.34 yen Sales Volume Impact
Slide 6: Assumptions
Assumptions 2012 Current Projection Average 2H12 FY12 FY11 Exchange Rate Yen-1USD 80.00 yen 79.96 yen 79.55 yen Yen-1EURO 100.00 yen 101.59 yen 110.72 yen Impact of Exchange Rate Movement (2H Impact Given a One Yen Change) Net Sales Operating Profit USD 10.4 billion yen 5.3 billion yen EURO
Slide 7: Key Points FY2012
Key Points FY2012 External Environment Gradual global economy growth Continued yen„s appreciation Outlook Expand share through active launch of new more innovative and competitive products Enhance profitability through manufacturing advancement Firmly achieve sales and profit growth July 25,
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 3,690.0 3,557.4 +3.7% Gross Profit 1,741.0 1,736.8 +0.2% (% Sales) 47.2% 48.8% Op. Profit 390.0 378.1 +3.2% (% Sales) 10.6% 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 (Apr. 25, 2012) 3,900.0 450.0 Change in Exchange Rate Foreign Exchange Impact •1USD: 79.94 to 79.96 yen -38.6 -21.1 •1EURO: 104.91 to 101.59 yen (Net Sa
Slide 10: Office
Office 2Q12 Growth Rate y/y (Unit Base) 2Q12 Color Ratio 2Q 2012 Actual Copiers Printers Copiers Printers Color +43% +41% Value Base* 54% 45% Monochrome +36% -1% Unit Base 33% 13% (Billions of yen) Sales Growth Rate y/y ( ) Local Currency Base Total +38% +3% *Includes Consumables 800 Monochrome Copi
Slide 11: Office
Office FY12 Growth Rate y/y (Unit Base) FY12 Color Ratio FY 2012 Projection Copiers Printers Copiers Printers Color +15% -2% Value Base* 54% 45% Monochrome +13% -12% Unit Base 34% 13% (Billions of yen) Sales Growth Rate y/y ( ) Local Currency Base Total +14% -11% *Includes Consumables 3,000 Monochro
Slide 12: Imaging System
Imaging System Growth Rate y/y (Unit Base) Interchangeable Lens 2Q 2012 Actual Digital Camera Ratio * 2Q12 2Q12 Interchangeable Lens Value Base 75% +47% Digital Cameras (Billions of yen) Sales Compact Digital Cameras +31% Unit Base 31% Growth Rate y/y ( ) Local Currency Base * Proportion of 600 Tota
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% +27% Digital Cameras (Billions of yen) Sales Growth Rate y/y ( ) Local Currency Base Compact Digital Cameras +12% Unit Base 30% 2,500 * Proportion o
Slide 14: New Products
New Products Mirrorless Cameras High image quality befitting the EOS brand Compact and lightweight Compatibility with extensive lineup of EF lenses New series of EOS cameras to attract new users July 25, 2012 Canon Inc. 14
Slide 15: Industry and Others
Industry and Others Lithography Equipment IC Stepper Unit Breakdown 2Q 2012 Actual (Unit Sales) by Light Source 2Q11 2Q12 2Q11 2Q12 IC 8 19 ArF 0 0 FPD 2 7 KrF 2 1 (Billions of yen) Sales Growth Rate y/y ( ) Local Currency Base FPD : Flat Panel Display i-line 6 18 180 Sales Eliminations Lithography
Slide 16: 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 70 53
Slide 17: Inventories
Inventories 800 90 Amount (Billions of yen) 80 Turnover (days) 700 70 56 57 54 60 52 600 45 46 46 554 50 42 542 518 35 40 500 471 479 477 30 428 436 400 385 20 10 300 0 2QE10 3QE10 4QE10 1QE11 2QE11 3QE11 4QE11 1QE12 2QE12 July 25, 2012 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 750 750 402 241 500 500 190 177 290 247 249 250 132 744 213 611 560 505 250 250 470 370 370 342 328 315 300 280
Slide 19: 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 2.4 2.5 2.1 2.1 841 795 773 770 2 679 700 1.5 500 1 0.5 0 0 FYE08 FYE09 FYE10 FYE11 FYE12 FYE12 Previous Current Projection Projection Note 1: 450, 100, 50,
Slide 20: Supplementary Information
Supplementary Information July 25, 2012 Canon Inc. 20
Slide 21: 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 79.96 yen -75.5 -37.9 •1EURO: 110.72 to 101.59 yen (Net Sales, Cost of Sales, Expenses
Slide 22: Gross Profit Variance Analysis
Gross Profit Variance Analysis 2Q 2012 Actual v. 2Q 2011 Actual (Billions of yen) 2Q12 2Q11 Change (Billions of yen) Gross Profit 439.9 418.5 +21.4 % Sales 48.9% 50.0% -1.1 pt. 60 48.7 30 21.4 12.2 8.2 7.5 0 -11.1 -30 -44.1 -60 Forex Sales Price Forex Cost Others Total Impact Volume Change Impact Re
Slide 23: Operating Profit Variance Analysis
Operating Profit Variance Analysis 2Q 2012 Actual v. 2Q 2011 Actual (Billions of yen) 2Q12 2Q11 Change Op. Profit 92.6 78.4 +14.2 (Billions of yen) % Sales 10.3% 9.4% +0.9 pt. 60 30 21.4 14.7 14.2 0 -30 -21.9 -60 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Excludi
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% 14 11 12 10 10 7 1.0% 0.4% 0.3% 0.3% 0.3% 0.2% 0 0.0% FYE08 FYE09 FYE10 FYE11 2QE12 Supplementary Information July 25, 2012 Canon Inc. 24
Slide 25: Financial Ratios
Financial Ratios (Yen) 900 15% 11.1% 9.6% 9.7% 600 9.2% 10% 7.3% 6.3% 6.3% 6.3% 4.9% 300 246.21 5% 3.4% 199.71 204.49 213.46 106.64 0 0% FY08 FY09 FY10 FY11 FY12 Current Projection EPS(Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information July 25, 2012 Canon Inc. 25