Slide 1: Canon Inc. First Quarter 2015 Results
Canon Inc. First Quarter 2015 Results April 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 1Q 2015 Results P3 – 5 FY 2015 Projections P6 – 9 Details by Business P10 – 15 Financial Situation P16 – 18 Supplementary Information P19 – 24 April 27, 2015 Canon Inc. 2
Slide 3: 1Q 2015 in Summary
1Q 2015 in Summary External Environment Level of global economic recovery below expectations U.S. economy showed solid growth Economies of Europe and emerging countries were weak Our markets Steady growth of office and lithography equipment Continued camera market contraction Results S
Slide 4: Summary of Results
Summary of Results 1Q 2015 Actual (Billions of yen) 1Q 2015 1Q 2014 Pct. Change Actual Actual Net Sales 857.4 868.3 -1.3% Gross Profit 438.6 431.5 +1.6% (% Sales) 51.1% 49.7% Op. Profit 66.2 82.6 -19.9% (% Sales) 7.7% 9.5% Net Income Attributable to Canon Inc. 33.9 47.6 -28.7% (% Sales) 4.0% 5.5% Fo
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 1Q 2015 Actual v. 1Q 2014 Actual (Billions of yen) Sales Op. Profit 1Q 2014 Actual 868.3 82.6 Foreign Exchange Impact Change in Exchange Rate +41.0 +7.3 (Net Sales, Cost of Sales, Expenses) •1USD: 102.69 to 119.25 yen •1EURO: 140.77 to 133.89 yen Sales Volume Impac
Slide 6: Assumptions
Assumptions 2015 Current Projection Average 2Q-4Q15 FY15 FY14 Exchange Rate Yen-1USD 120.00 yen 119.84 yen 106.18 yen Yen-1EURO 130.00 yen 130.92 yen 140.62 yen Impact of Exchange Rate Movement (2Q-4Q Impact Given a One Yen Change) Net Sales Operating Profit USD 12.0 billion yen 4.4 billion ye
Slide 7: Key Points FY2015
Key Points FY2015 External Environment Weaker than previously projected global economic recovery U.S. economy remains solid Delayed economic recovery in Europe, emerging countries and China Our markets Steady growth of office and industrial equipment Continued camera market contraction O
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 3,860.0 3,727.3 +3.6% Gross Profit 1,923.0 1,861.5 +3.3% (% Sales) 49.8% 49.9% Op. Profit 380.0 363.5 +4.5% (% Sales) 9.8% 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 (Jan. 28, 2015) 3,900.0 380.0 Change in Exchange Rate Foreign Exchange Impact •1USD: 120.00 to 119.84 yen -34.3 -16.8 •1EURO: 135.00 to 130.92 yen (Net
Slide 10: Office
1Q15 Growth Rate y/y (Unit Base) 1Q15 Color Ratio Office Color Copiers +11% Printers -1% Value Base* Copiers 56% Printers 52% Monochrome -12% +3% Unit Base 44% 16% 1Q 2015 Actual Total -3% +3% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 800 Monochrome copier
Slide 11: Office
FY15 Growth Rate y/y (Unit Base) FY15 Color Ratio Office Color Copiers +17% Printers +5% Value Base* Copiers 56% Printers 50% Monochrome +3% +2% Unit Base 43% 16% FY 2015 Projection Total +9% +2% *Includes Consumables (Billions of yen) Sales Growth rate y/y ( ) Local currency base 3,000 Monochrome c
Slide 12: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens 1Q15 -22% Digital Camera Ratio * 1Q15 Digital Cameras Value Base 82% 1Q 2015 Actual Compact Digital -27% Unit Base 43% Cameras Total Digital Cameras -25% * Proportion of Total Digital Cameras IJP -3% * Value Base In
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 +2% * Value Base
Slide 14: Industry and Others
Industry and Others Lithography Equipment IC Lithography Unit Breakdown by Light Source (Unit Sales) 1Q14 1Q15 1Q 2015 Actual 1Q14 1Q15 ArF 0 0 IC 12 18 KrF 3 2 FPD 2 0 i-line 9 16 (Billions of yen) Sales Growth rate y/y ( ) Local currency base 180 Sales Eliminations Lithography Equipment Others 150
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 61 60 59 70 58 52 53 54 54 50 608 50 600 589 582 569 563 554 550 30 533 528 500 10 -10 400 -30 300 -50 1QE13 2QE13 3QE13 4QE13 1QE14 2QE14 3QE14 4QE14 1QE15 April 27, 2015 Canon Inc. 16
Slide 17: Capital Expenditure and 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 750 750 500 315 210 500 257 171 584 260 255 250 507 515 528 568 230 255 225 384 269 305 213 250 250 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, which is based on full-year net sales) 3 2.5 2.6 2.6 1000 2.3 2.4 2.5 845 860 1.9 789 2 773 667 1.5 600 500 1 0.5 0 0 FYE11 FYE12 FYE13 FYE14 FYE15 FYE15 Previo
Slide 19: Supplementary Information
Supplementary Information April 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 +125.6 +24.9 Change in Exchange Rate (Net Sales, Cost of Sales, Expenses) •1USD: 106.18 to 119.84 yen •1EURO: 140.62 to 130.92
Slide 21: Gross Profit Variance Analysis
Gross Profit Variance Analysis 1Q 2015 Actual v. 1Q 2014 Actual (Billions of yen) 1Q15 1Q14 Change (Billions of yen) Gross Profit 438.6 431.5 +7.1 % Sales 51.1% 49.7% +1.4pt. 100 50 41.0 4.8 7.1 0 -2.0 -12.1 -24.6 -50 -100 Forex Sales Price Forex Cost Total Impact Volume Change Impact Reduction Chan
Slide 22: Operating Profit Variance Analysis
Operating Profit Variance Analysis 1Q 2015 Actual v. 1Q 2014 Actual (Billions of yen) 1Q15 1Q14 Change Op. Profit 66.2 82.6 -16.4 (Billions of yen) % Sales 7.7% 9.5% -1.8pt. 100 50 7.1 0 -9.1 -14.4 -16.4 -50 -100 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Excludi
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 1QE15 Supplementary Information April 27, 2015 Canon Inc. 23
Slide 24: Financial Ratios
Financial Ratios (Yen) 900 15% 9.6% 600 10% 8.7% 8.4% 8.7% 8.5% 6.3% 5.7% 5.6% 5.9% 5.7% 300 5% 229.03 233.53 204.49 191.34 200.78 0 0% FY11 FY12 FY13 FY14 FY15 Current Projection EPS(Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information April 27, 2015 Canon Inc. 24