Slide 1: Canon Inc. Second Quarter 2011 Results
Canon Inc. Second Quarter 2011 Results July 25, 2011 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 2011 Results P3 – 6 FY 2011 Projections P7 – 11 Details by Business P12 – 17 Financial Situation P18 – 20 Supplementary Information P21 – 26 July 25, 2011 Canon Inc. 2
Slide 3: 2Q 2011 in Summary
2Q 2011 in Summary External Environment 9 Global economy continued to gradually recover 9 Canon’s markets remained strong 9 Significant yen’s appreciation YoY Results 9 Significant drop in production due to earthquake's impact 9 Made steady progress in production recovery, ability to limit earthquak
Slide 4: Summary of Results
Summary of Results 2Q 2011 Actual (Billions of yen) 2Q 2011 2Q 2010 Pct. Change Actual Actual Net sales 836.6 970.4 -13.8% Gross profit 418.5 475.4 -12.0% [% sales] 50.0% 49.0% Op. profit 78.4 113.4 -30.9% [% sales] 9.4% 11.7% Net income attributable to 53.9 67.6 -20.4% Canon Inc. [% sales] 6.4% 7.0
Slide 5: Summary of Results (Excluding earthquake effects)
Summary of Results 2Q 2011 Actual (Excluding earthquake effects) (Billions of yen) 2Q 2011 2Q 2010 Excluding Earthquake Pct. Actual earthquake Actual effects Change effects A B A VS B Net sales 836.6 -145.9 982.5 970.4 +1.2% Gross 418.5 -68.3 486.8 475.4 +2.4% profit [% sales] 50.0% 49.5% 49.0% Op.
Slide 6: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 2Q 2011 Actual v. 2Q 2010 Actual (Billions of yen) Sales Op. Profit 2Q 2010 Actual 970.4 113.4 Change in Exchange Rate Foreign exchange impact •1USD: 91.96 to 81.58 yen [net sales, cost of sales, -35.3 -16.4 •1EURO: 116.34 to 117.28 yen expenses] Sales volume impac
Slide 7: Assumptions
Assumptions 2011 Current Projection Average 2H11 FY11 FY10 Exchange Rate Yen-1USD 80.00 yen 80.86 yen 87.40 yen Yen-1EURO 115.00 yen 114.97 yen 114.97 yen Impact of Exchange Rate Movement (2H impact given a one yen change) Net sales Operating profit USD 10.2 billion yen 4.8 billion yen EURO
Slide 8: Key Points FY 2011
Key Points FY 2011 Assumptions 9 Global economy – on path of gradual recovery 9 Canon markets – continued strong global demand Projections 9 Accelerate enhancement of stable product-supply system through an early recovery in production 9 Achieve accelerated recovery from the second half to minimize
Slide 9: Summary of Projected Results
Summary of Projected Results FY 2011 Current Projection (Billions of yen) FY 2011 FY 2010 Pct. Change Current projection Actual Net sales 3,780.0 3,706.9 +2.0% Gross profit 1,818.0 1,783.1 +2.0% [% sales] 48.1% 48.1% Op. profit 380.0 387.6 -1.9% [% sales] 10.1% 10.5% Net income attributable to 260.0
Slide 10: Summary of Results (FY 2011 Excluding earthquake effects)
Summary of Results FY 2011 Actual (Excluding earthquake effects) (Billions of yen) FY2011 FY2010 Excluding Current Earthquake earthquake Actual Pct. Change projection effects effects A B A VS B Net sales 3,780.0 -197.4 3,977.4 3,706.9 +7.3% Gross 1,818.0 -122.2 1,940.2 1,783.1 +8.8% profit [% sales]
Slide 11: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2011 Current Projection v. FY 2011 Previous Projection (Billions of yen) Sales Op. Profit Previous Projection (Apr. 26, 2011) 3,730.0 335.0 Change in Exchange Rate Foreign exchange impact -83.8 -51.3 •1USD: 84.36 to 80.86 yen [net sales, cost of sales, expenses]
Slide 12: Office
Office 2Q11 Growth rate y/y (Unit base) Copiers Printers 2Q11 Color ratio Copiers Printers 2Q 2011 Actual Color -15% -33% Value base* 53% 42% Monochrome -24% +4% Unit base 31% 10% Total -21% -1% (Billions of yen) Sales *Includes consumables 800 Others Growth rate y/y Other printing devices ( ) Local
Slide 13: Office
Office FY11 Growth rate y/y (Unit base) Copiers Printers FY11 Color ratio Copiers Printers FY 2011 Projection Color +22% +16% Value base* 54% 43% Monochrome +5% +17% Unit base 34% 13% Total +10% +17% (Billions of yen) Sales *Includes consumables Others Other printing devices 3,000 Growth rate y/y Co
Slide 14: Consumer
Consumer Growth rate y/y (Unit base) D SLR ratio* 2Q 2011 Actual 2Q11 2Q11 Sales Digital cameras -22% Value base 70% IJP +2% Unit base 28% (Billions of yen) * Percentage of cameras sales 600 Others attributable to SLRs, inter- IJP changeable lenses and related accessories Cameras Growth rate y/y ( )
Slide 15: Consumer
Consumer Growth rate y/y (Unit base) D SLR ratio* FY 2011 Projection FY11 FY11 Sales Digital cameras +1% Value base 71% IJP +8% Unit base 27% (Billions of yen) * Percentage of cameras sales Growth rate y/y ( ) Local currency base attributable to SLRs, inter- changeable lenses and related 2,000 acces
Slide 16: Industry and Others (Litho.Equip.)
Industry and Others (Litho.Equip.) Lithography Equipment(Unit sales) IC Stepper Unit Breakdown by Light Source 2Q 2011 Actual 2Q10 2Q11 2Q10 2Q11 IC 5 8 ArF dry 0 0 (Billions of yen) Sales LCD TTL 17 22 2 10 ArF Immersion 0 0 KrF 1 2 200 Others i-line 4 6 Lithography Equipment Corporate and eliminat
Slide 17: Industry and Others (Litho.Equip.)
Industry and Others (Litho.Equip.) Lithography Equipment (Unit sales) IC Stepper Unit Breakdown by Light Source FY 2011 Projection FY10 FY11 FY11 FY10 FY11 FY11 Previous Current Previous Current projection projection projection Projection (Billions of yen) IC 29 41 46 ArF dry 0 0 0 LCD 56 27 31 ArF
Slide 18: Inventories
Inventories (Billions of yen) 800 Amount Turnover (days) 700 52 52 600 50 49 45 46 42 39 35 500 471 479 456 424 427 428 436 400 373 385 300 2QE09 3QE09 4QE09 1QE10 2QE10 3QE10 4QE10 1QE11 2QE11 July 25, 2011 Canon Inc. 18
Slide 19: Capital Expenditure Free Cash Flow
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) Increase in PP&E 1,000 1,000 Operating C/F Net income attributable to Canon Inc. Free C/F Depreciation Investing C/F 750 750 144 402 309 241 500 500 260 150 220 70 247 132 744 617 611 510 473 470 250 250 400 362 370 341 360 342 3
Slide 20: Cash on Hand
Cash on Hand Cash on Hand (Year-end) (Billions of yen) Cash-on-hand Cash-on-hand (In months of 2nd-half net sales) 2.8 2.4 2.5 2.6 2.1 2.3 944 841 795 800 800 679 FYE07 FYE08 FYE09 FYE10 FYE11 FYE11 Previous Current projection projection Note 1: In 2007, 450 billion yen was used to acquire own share
Slide 21: Supplementary Information
Supplementary Information July 25, 2011 Canon Inc. 21
Slide 22: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2011 Current Projection v. FY 2010 Actual (Billions of yen) Sales Op. Profit FY 2010 Actual 3,706.9 387.6 Foreign exchange impact -99.7 -54.3 [net sales, cost of sales, expenses] Sales volume impact Office +222.4 Change in Exchange Rate (FY) Consumer +216.
Slide 23: Gross Profit Variance Analysis
Gross Profit Variance Analysis 2Q 2011 Actual v. 2Q 2010 Actual (Billions of yen) 2Q11 2Q10 Change (Billions of yen) Gross Profit 418.5 475.4 -56.9 % sales 50.0% 49.0% +1.0 pt. 100 50 26.9 21.2 13.1 10.1 0 -24.6 -50 -35.3 -56.9 -68.3 Forex Sales Price Forex Cost Earthquake Others Total change -100 i
Slide 24: Operating Profit Variance Analysis
Operating Profit Variance Analysis 2Q 2011 Actual v. 2Q 2010 Actual (Billions of yen) 2Q11 2Q10 Change Op. Profit 78.4 113.4 -35.0 (Billions of yen) % sales 9.4% 11.7% -2.3 pt. 100 50 16.0 5.8 0.1 0 -50 -35.0 -56.9 Total change Change in Change in Others Total change -100 SG&A in in gross profit SG&
Slide 25: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 50 Debt Debt/Total Assets 5% 40 4% 30 27 3% 20 18 2% 14 10 11 10 0.6% 1% 0.4% 0.3% 0.3% 0.4% 0 0% FYE07 FYE08 FYE09 FYE10 2QE11 Supplementary Information July 25, 2011 Canon Inc. 25
Slide 26: Financial Ratios
Financial Ratios (Yen) 1,000 20% 16.5% 800 15% 11.1% 10.8% 9.2% 9.7% 600 10% 7.3% 4.9% 377.59 400 6.3% 6.4% 5% 246.21 3.4% 199.71 212.06 200 106.64 0% 0 -5% FY07 FY08 FY09 FY10 FY11 Current projection EPS (Basic) ROE ROA (Attributable to Canon Inc) Supplementary Information July 25, 2011 Canon Inc.