Slide 1: Canon Inc. FY 2011 Results
Canon Inc. FY 2011 Results January 30, 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 assumptions forme
Slide 2: Agenda
Agenda 4Q/FY 2011 Results P3 – 7 FY 2012 Projections P8 – 11 Details by Business P12 – 17 (4Q/FY 2011 Results and FY 2012 Projections) Financial Situation P18 – 20 Supplementary Information P21 – 28 January 30, 2012 Canon Inc. 2
Slide 3: FY 2011 in Summary
FY 2011 in Summary External Environment Economy: Continued gradual recovery of global economy thanks to emerging markets Year of challenges: The Great East Japan Earthquake, economic troubles in Europe, yen’s rapid appreciation, and Thailand floods Canon’s markets: Remained generally strong, b
Slide 4: Summary of Results
Summary of Results 4Q/FY 2011 Actual (Billions of yen) 4Q FY 2011 2010 Pct. 2011 2010 Pct. Actual Actual Change Actual Actual Change Net Sales 964.8 1,067.9 -9.7% 3,557.4 3,706.9 -4.0% Gross Profit 459.5 492.2 -6.6% 1,736.8 1,783.1 -2.6% (% Sales) 47.6% 46.1% 48.8% 48.1% Op. Profit 94.6 82.8 +14.2%
Slide 5: Summary of Results
Summary of Results FY 2011 Actual (Excluding Earthquake & Thailand Flood Effects) (Billions of yen) FY2011 FY2010 Excluding Earthquake Earthquake Pct. & Thailand Actual & Thailand Actual Flood Change Flood Effects Effects * A B A VS B Net Sales 3,557.4 -236.8 3,794.2 3,706.9 +2.4% Gross Profit 1,736
Slide 6: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2011 Actual v. Projection (Billions of yen) Sales Op. Profit FY 2011 Projection (Oct.25,2011) 3,650.0 360.0 Foreign Exchange Impact Change in Exchange Rate 0.0 -0.3 •1USD: 79.41 to 79.55 yen (Net Sales, Cost of Sales, Expenses) •1EURO: 110.83 to 110.72 yen Sales
Slide 7: Reform and Production Technology
Improved Gross Profit Ratio by Production Reform and Production Technology Gross Profit Ratio USD EURO 55.0% 310.00 50.0% 48.8% 260.00 48.1% 45.0% 210.00 44.5% 40.0% 160.00 130.46 35.0% 114.97 110.00 93.21 110.72 87.40 79.55 30.0% 60.00 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
Slide 8: Assumptions
Assumptions FY 2012 Projection Average FY12 FY11 Exchange Rate Yen-1USD 75.00 yen 79.55 yen Yen-1EURO 100.00 yen 110.72 yen Impact of Exchange Rate Movement (FY12 Impact Given a One Yen Change) Net Sales Operating Profit USD 19.3 billion yen 9.2 billion yen EURO 10.1 billion yen 5.4 billion
Slide 9: Key Points
Key Points FY 2012 Projection External Environment Economy: Continued economic growth of emerging markets, recovery of developed countries will take time, can’t count on significant growth globally Exchange rates: Historically high yen’s appreciation will continue Outlook “Build solid foundation
Slide 10: Summary of Projected Results
Summary of Projected Results FY 2012 Projection (Billions of yen) FY 2012 FY 2011 Pct. Change Projection Actual Net Sales 3,750.0 3,557.4 +5.4% Gross Profit 1,779.0 1,736.8 +2.4% (% Sales) 47.4% 48.8% Op. Profit 390.0 378.1 +3.2% (% Sales) 10.4% 10.6% Net Income Attributable to Canon Inc. 250.0 248.
Slide 11: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2012 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 75.00 yen -199.8 -105.1 •1EURO: 110.72 to 100.00 yen (Net Sales, Cost of Sales, Expenses) Sales Volu
Slide 12: Office
Office Growth Rate y/y (Unit Base) Color Ratio Copiers LP Copiers LP 4Q11 FY11 4Q11 FY11 4Q11 FY11 4Q11 FY11 Color +14% +11% +7% -3% Value Base* 56% 54% 42% 43% 2011 Actual Monochrome +1% -4% -9% +10% Unit Base 36% 33% 14% 12% (Billions of yen) Sales Total +5% +1% -7% +8% *Includes consumables 800 4
Slide 13: Office
Office FY 2012 Projection (Billions of yen) Sales Growth Rate y/y 600 Op. Profit 40.0% 3,000 Monochrome copiers Color copiers ( ) Local Currency Base Op. Profit (Billions of yen) 35.0% Other printing devices Others Office Total Op. Profit Ratio 2,500 +0.3%(+6.5%) 30.0% 1,987 1,918 1,923 400 2,000 25
Slide 14: Consumer
Consumer Growth Rate y/y (Unit Base) D SLR Ratio * 4Q11 FY11 4Q11 FY11 Digital Value Base 73% 71% -11% -4% Cameras Unit Base 30% 28% 2011 Actual IJP -5% +2% * Proportion of digital camera total (Billions of yen) Sales 600 Growth Rate y/y 4Q 35.0% Cameras IJP Others ( ) Local Currency Base Consumer O
Slide 15: Consumer
Consumer FY 2012 Projection (Billions of yen) Sales Growth Rate y/y Op. Profit 2,000 ( ) Local Currency Base 400 40.0% Cameras IJP Others Consumer Op. Profit (Billions of yen) +10.9%(+17.5%) 35.0% Op. Profit Ratio Growth Rate y/y 1,500 1,391 1,455 +23.5% 1,312 30.0% IJP 25.0% -4.6%(+0.3%) 1,000 200
Slide 16: Industry and Others
Industry and Others Lithography Equipment (Unit Sales) IC Stepper Unit Breakdown by Light Source 2011 Actual 4Q10 FY10 4Q11 FY11 4Q10 FY10 4Q11 FY11 (Billions of yen) Sales IC 10 29 22 52 ArF Dry 0 0 0 0 Corporate and Eliminations LCD 18 56 11 25 ArF Immersion 0 0 0 0 4Q 20.0% Lithography Equipment
Slide 17: Industry and Others
Industry and Others FY 2012 Projection Growth Rate y/y (Billions of yen) Sales ( ) Local Currency Base Op. Profit 600 Corporate and Eliminations Industry and Others 50 20.0% Lithography Equipment Net Sales Op. Profit (Billions of yen) Net Sales Others 338 334 375 +12.2%(+13.9%) 40 Op. Profit Ratio 1
Slide 18: Inventories
Inventories (Billions of yen) 800 90 Amount 80 Turnover (days) 700 70 54 60 52 600 49 45 46 46 50 42 39 518 35 40 500 471 479 477 456 436 30 428 400 373 385 20 10 300 0 4QE09 1QE10 2QE10 3QE10 4QE10 1QE11 2QE11 3QE11 4QE11 January 30, 2012 Canon Inc. 18
Slide 19: Capital Expenditure and 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 750 750 402 500 500 241 160 130 247 230 250 249 132 744 213 611 540 250 250 470 470 380 370 342 340 315 300 280
Slide 20: Return to Shareholders
Cash on Hand and Return to Shareholders Cash on Hand (Year-end) Dividend (Billions of yen) 1500 4 200 120.0% Cash-on hand Dividend Per Share (Yen) Cash-on-hand Payout Ratio 110.0% (In months of 2nd-half net sales, except FYE12, 3.5 (Consolidated Basis) 103.1% which is based on full-year net sales) 1
Slide 21: Supplementary Information
Supplementary Information January 30, 2012 Canon Inc. 21
Slide 22: Latest IMF World Economic Outlook
Latest IMF World Economic Outlook 2007 2008 2009 2010 2011 2012 Jun. Sep. Jun. Sep. Jan. Projection Projection Actual Projection Projection Projection Japan +2.4% -1.2% -6.3% +4.4% -0.7% -0.5% -0.9% +2.9% +2.3% +1.7% US +1.9% -0.3% -3.5% +3.0% +2.5% +1.5% +1.8% +2.7% +1.8% +1.8% Euro +3.0% +0.4% -4.
Slide 23: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit 4Q 2011 Actual v. 4Q 2010 Actual (Billions of yen) Sales Op. Profit 4Q 2010 Actual 1,067.9 82.8 Change in Exchange Rate Foreign Exchange Impact -43.2 -22.1 •1USD: 82.68 to 77.40 yen (Net Sales, Cost of Sales, Expenses) •1EURO: 111.99 to 104.22 yen Sales Volum
Slide 24: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2011 Actual v. FY 2010 Actual (Billions of yen) Sales Op. Profit FY 2010 Actual 3,706.9 387.6 Change in Exchange Rate Foreign Exchange Impact -161.9 -83.3 •1USD: 87.40 to 79.55 yen (Net Sales, Cost of Sales, Expenses) •1EURO: 114.97 to 110.72 yen Sales Vol
Slide 25: Gross Profit Variance Analysis
Gross Profit Variance Analysis 4Q 2011 Actual v. 4Q 2010 Actual (Billions of yen) 4Q11 4Q10 Change (Billions of yen) Gross Profit 459.5 492.2 -32.7 % Sales 47.6% 46.1% +1.5 pt. 100 50 12.8 16.4 15.7 10.0 0 -22.3 -22.1 -32.7 -50 -43.2 -100 Forex Sales Price Forex Cost Earthquake Others Total Impact V
Slide 26: Operating Profit Variance Analysis
Operating Profit Variance Analysis 4Q 2011 Actual v. 4Q 2010 Actual (Billions of yen) 4Q11 4Q10 Change Op. Profit 94.6 82.8 +11.8 (Billions of yen) % Sales 9.8% 7.8% +2.0 pt. 100 50 33.4 11.1 11.8 0 -32.7 -50 -100 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Exclud
Slide 27: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 50 5.0% Debt Debt/Total Assets 40 4.0% 30 3.0% 27 20 2.0% 14 11 12 10 10 0.6% 1.0% 0.4% 0.3% 0.3% 0.3% 0 0.0% FYE07 FYE08 FYE09 FYE10 FYE11 Supplementary Information January 30, 2012 Canon Inc. 27
Slide 28: Financial Ratios
Financial Ratios (Yen) 900 15% 11.1% 9.6% 9.6% 600 9.2% 10% 7.3% 6.3% 6.3% 6.3% 4.9% 300 246.21 5% 3.4% 199.71 204.49 208.07 106.64 0 0% FY08 FY09 FY10 FY11 FY12 Projection EPS(Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information January 30, 2012 Canon Inc. 28