Slide 1: Canon Inc. Second Quarter 2015 Results
Canon Inc. Second Quarter 2015 Results July 27, 2015 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 2015 Results P3 – 5 FY 2015 Projections P6 – 9 Details by Business P10 – 15 Financial Situation P16 – 18 Supplementary Information P19 – 24 July 27, 2015 Canon Inc. 2
Slide 3: 2Q 2015 in Summary
2Q 2015 in Summary External Environment Global economy - In line with expectations U.S. - Remained solid Europe - Weak recovery Emerging markets - Slowdown Our markets Office - Driven by color Camera - Continued contraction Results Sales increase - Office and Industrial equipment P
Slide 4: Summary of Results
Summary of Results 2Q 2015 Actual (Billions of yen) 2Q 2015 2Q 2014 Pct. Change Actual Actual Net Sales 974.4 926.8 +5.1% Gross Profit 503.8 483.5 +4.2% (% Sales) 51.7% 52.2% Op. Profit 104.7 110.5 -5.3% (% Sales) 10.7% 11.9% Net Income Attributable to Canon Inc. 68.2 80.8 -15.7% (% Sales) 7.0% 8.7%
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 2Q 2015 Actual v. 2Q 2014 Actual (Billions of yen) Sales Op. Profit 2Q 2014 Actual 926.8 110.5 Foreign Exchange Impact Change in Exchange Rate +60.0 +11.7 (Net Sales, Cost of Sales, Expenses) •1USD: 102.13 to 121.47 yen •1EURO: 139.94 to 134.47 yen Sales Volume Imp
Slide 6: Assumptions
Assumptions 2015 Current Projection Average 2H15 FY15 FY14 Exchange Rate Yen-1USD 125.00 yen 122.83 yen 106.18 yen Yen-1EURO 135.00 yen 134.60 yen 140.62 yen Impact of Exchange Rate Movement (2H Impact Given a One Yen Change) Net Sales Operating Profit USD 7.8 billion yen 2.7 billion yen EUR
Slide 7: Key Points FY2015
Key Points FY2015 External Environment Global economy - Gradual recovery U.S. - Solid Europe and emerging markets - Moderate recovery Outlook Sales and profit growth Sales expansion focused on new products Improvement in product mix July 27, 2015 Canon Inc. 7
Slide 8: Summary of Projected Results
Summary of Projected Results FY 2015 Current Projection (Billions of yen) FY 2015 FY 2014 Pct. Change Current Projection Actual Net Sales 3,930.0 3,727.3 +5.4% Gross Profit 1,978.0 1,861.5 +6.3% (% Sales) 50.3% 49.9% Op. Profit 380.0 363.5 +4.5% (% Sales) 9.7% 9.8% Net Income Attributable to Canon I
Slide 9: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2015 Current Projection v. FY 2015 Previous Projection (Billions of yen) Sales Op. Profit Previous Projection (Apr. 27, 2015) 3,860.0 380.0 Change in Exchange Rate Foreign Exchange Impact •1USD: 119.84 to 122.83 yen +67.9 +18.6 •1EURO: 130.92 to 134.60 yen (Net
Slide 10: Office
2Q15 Growth Rate y/y (Unit Base) 2Q15 Color Ratio Office Color Copiers +25% Printers +1% Value Base* Copiers 57% Printers 50% Monochrome -6% -3% Unit Base 46% 16% 2Q 2015 Actual Total +6% -2% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 800 Monochrome copiers
Slide 11: Office
FY15 Growth Rate y/y (Unit Base) FY15 Color Ratio Office Color Copiers +18% Printers +4% Value Base* Copiers 56% Printers 50% Monochrome 0% -1% Unit Base 45% 16% FY 2015 Projection Total +7% 0% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 3,000 Monochrome cop
Slide 12: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens 2Q15 -9% Digital Camera Ratio * 2Q15 Digital Cameras Value Base 85% 2Q 2015 Actual Compact Digital -27% Unit Base 48% Cameras Total Digital Cameras -20% * Proportion of Total Digital Cameras IJP -3% * Value Base Inc
Slide 13: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens FY15 -9% Digital Camera Ratio * FY15 Digital Cameras Value Base 83% FY 2015 Projection Compact Digital -22% Unit Base 45% Cameras Total Digital Cameras -17% * Proportion of Total Digital Cameras IJP 0% * Value Base
Slide 14: Industry and Others
Industry and Others Lithography Equipment IC Lithography Unit Breakdown by Light Source (Unit Sales) 2Q14 2Q15 2Q 2015 Actual 2Q14 2Q15 ArF 0 0 IC 17 19 KrF 5 7 FPD 7 7 i-line 12 12 (Billions of yen) Sales Growth rate y/y ( ) Local currency base 180 Sales Eliminations Industry and Others Lithography
Slide 15: Industry and Others
Industry and Others Lithography Equipment IC Lithography Unit Breakdown by Light Source (Unit Sales) FY15 FY15 FY 2015 Projection FY15 FY15 FY14 Previous Current FY14 Previous Current Projection Projection Projection Projection ArF 0 0 0 (Billions of yen) Sales Growth rate y/y ( ) Local currency bas
Slide 16: Inventories
Inventories (Billions of yen) 800 90 Amount (Billions of yen) Turnover (Days) 700 60 59 59 70 58 52 53 54 54 50 608 50 582 591 600 569 554 563 550 30 533 528 500 10 -10 400 -30 300 -50 2QE13 3QE13 4QE13 1QE14 2QE14 3QE14 4QE14 1QE15 2QE15 July 27, 2015 Canon Inc. 16
Slide 17: Capital Expenditure Free Cash Flow
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) 1,000 1,000 Operating C/F Increase in PP&E Free C/F Net Income Attributable to Canon Inc. Investing C/F Depreciation 750 750 10 500 315 500 257 171 584 255 250 507 528 568 502 492 230 255 245 225 384 250 269 213 250 0 -40 270258
Slide 18: Cash on Hand
Cash on Hand Cash on Hand (Year-end) 1500 4 Cash-on-hand (Billions of yen) Cash-on-hand 3.5 (In months of 2nd-half net sales, except FYE15 Previous Projection, which is based on full-year net sales) 3 2.5 2.6 1000 2.3 2.4 2.5 845 1.9 1.9 789 2 773 667 650 1.5 600 500 1 0.5 0 0 FYE11 FYE12 FYE13 FYE1
Slide 19: Supplementary Information
Supplementary Information July 27, 2015 Canon Inc. 19
Slide 20: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2015 Current Projection v. FY 2014 Actual (Billions of yen) Sales Op. Profit FY 2014 Actual 3,727.3 363.5 Foreign Exchange Impact +188.6 +36.3 Change in Exchange Rate (Net Sales, Cost of Sales, Expenses) •1USD: 106.18 to 122.83 yen •1EURO: 140.62 to 134.60
Slide 21: Gross Profit Variance Analysis
Gross Profit Variance Analysis 2Q 2015 Actual v. 2Q 2014 Actual (Billions of yen) 2Q15 2Q14 Change (Billions of yen) Gross Profit 503.8 483.5 +20.3 % Sales 51.7% 52.2% -0.5pt. 100 60.0 50 20.3 11.1 0 -2.3 -13.4 -35.1 -50 -100 Forex Sales Price Forex Cost Total Impact Volume Change Impact Reduction C
Slide 22: Operating Profit Variance Analysis
Operating Profit Variance Analysis 2Q 2015 Actual v. 2Q 2014 Actual (Billions of yen) 2Q15 2Q14 Change Op. Profit 104.7 110.5 -5.8 (Billions of yen) % Sales 10.7% 11.9% -1.2pt. 100 50 20.3 0 -5.8 -12.9 -13.2 -50 -100 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Exc
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% 12 10 1.0% 0.3% 4 3 2 2 0.1% 0.1% 0.0% 0.0% 0 0.0% FYE11 FYE12 FYE13 FYE14 2QE15 Supplementary Information July 27, 2015 Canon Inc. 23
Slide 24: Financial Ratios
Financial Ratios (Yen) 900 15% 9.6% 600 10% 8.7% 8.4% 8.7% 8.1% 6.3% 5.7% 5.6% 5.9% 5.4% 300 5% 229.03 224.36 204.49 191.34 200.78 0 0% FY11 FY12 FY13 FY14 FY15 Current Projection EPS(Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information July 27, 2015 Canon Inc. 24