Canon Marketing Japan Incorporated · TSE:8060

Canon Marketing Japan — Q3 2018 Earnings Presentation

29 slides from Canon Marketing Japan's earnings presentation, Oct 25, 2018

  1. Slide 1: FY2018 3Q Results

    FY2018 3Q Results October 25, 2018 Yoshiyuki Matsusaka Director, Senior Vice President * The figures are rounded off to the nearest 100 million yen in this material. * Forward-looking statements and results forecasts presented in this material are based on the management’s assumptions using currentl

  2. Slide 2: Summary of 2018 3Q Results

    Summary of 2018 3Q Results Net sales ¥147.4 B (Y/Y -5.2B, -3%)  Although we achieved increased sales in the Enterprise segment, each of the Consumers, Area and Professional segments posted decreased sales, resulting in lower net sales. Operating Income ¥6.2 B (Y/Y -1.2B, -16%)  Despite company-wid

  3. Slide 3: Summary of Results 3Q 2018 Actual

    Summary of Results 3Q 2018 Actual (from July 1 to September 30) (Billions of yen)  Summary of Results 3Q 2017 3Q 2018 Changes Amount % Net sales 152.6 147.4 -5.2 -3% (35.9%) (35.3%) (-0.6%) Gross profit 54.8 52.0 -2.8 -5% (4.9%) (4.2%) (-0.7%) Operating income 7.4 6.2 -1.2 -16% (4.9%) (4.3%) (-0.6%

  4. Slide 4: Segment Outline 3Q 2018 Actual

    Segment Outline 3Q 2018 Actual (from July 1 to September 30) (Billions of yen) 3Q 2017 3Q 2018 Changes Op. Op. Op. Net sales Net sales Net sales Income Income Income Consumers 38.7 3.1 35.3 1.5 -3.4 -1.7 Enterprise 43.2 1.9 45.8 1.9 +2.6 +0.0 Area 62.3 2.6 61.4 3.2 -0.9 +0.7 Professional 14.3 -0.2 1

  5. Slide 5: Summary of Results 1Q-3Q 2018 Actual

    Summary of Results 3Q 2018 Actual (from January 1 to September 30) (Billions of yen)  Summary of Results 1Q-3Q 1Q-3Q Changes 2017 2018 Amount % Net sales 456.2 447.9 -8.3 -2% (35.6%) (35.1%) (-0.6%) Gross profit 162.6 157.0 -5.5 -3% (4.0%) (3.5%) (-0.5%) Operating income 18.4 15.9 -2.5 -14% (4.2%)

  6. Slide 6: Segment Outline 1Q-3Q 2018 Actual

    Segment Outline 3Q 2018 Actual (from January 1 to September 30) (Billions of yen) 1Q-3Q 2017 1Q-3Q 2018 Changes Op. Op. Op. Net sales Net sales Net sales Income Income Income Consumers 109.3 5.7 96.3 0.4 -13.0 -5.3 Enterprise 131.1 5.5 139.1 6.8 +8.0 +1.3 Area 193.4 8.0 190.8 9.2 -2.6 +1.2 Professio

  7. Slide 7: Segment Information Consumers Segment

    Segment Information Consumers Segment Net sales : 35.3 B (Y/Y -3.4B, -9%)  Although mirrorless cameras remained steady, sales of digital interchangeable lens cameras declined overall. Inkjet printer sales also fell due to a significant decrease in cartridge sales, resulting in decreased sales for t

  8. Slide 8: Segment Information Enterprise Segment

    Segment Information Enterprise Segment Net sales : 45.8 B (Y/Y +2.6B, +6%)  The solution business expanded mainly for the manufacturing and distribution sectors. The SI and data center businesses also increased, resulting in increased sales. Operating income 1.9 B (Y/Y +0.0B, +2%)  Gross profits d

  9. Slide 9: Segment Information Area Segment

    Segment Information Area Segment Net sales : 61.4 B (Y/Y -0.9B, -1%)  Main hardware declined although IT solutions increased, resulting in lower sales. Operating income 3.2 B (Y/Y +0.7B, +26%)  Operating income rose due to an increase in gross profit from higher sales from laser printer cartridges

  10. Slide 10: Segment Information Professional Segment

    Segment Information Professional Segment Net sales : 11.1 B (Y/Y -3.2B, -23%)  We recorded a decline in sales given a poor performance for health care. Operating income -0.4 B (Y/Y -0.2B, -%)  Operating income fell due to the effects of declining gross profits associated with decreased sales. 201

  11. Slide 11: Segment Information Professional Segment

    Segment Information Professional Segment Net sales - Growth rate (Y/Y) FY2018 3Q Results (from July 1 to September 30) Production Printing +1% Industrial Equipment -33% Healthcare Business -32% Visual Solutions -0% Production Printing We posted higher sales due to a slightly better performance for

  12. Slide 12: Overall Sales of IT Solutions

    Overall Sales of IT Solutions Sales of IT Solutions by Segment (Billions of Yen) 3Q 2017 3Q 2018 Changes Amount % Enterprise segment 26.2 28.7 +2.5 +10% Area segment 13.3 13.9 +0.6 +4% Other 4.8 4.9 +0.1 +3% Total 44.3 47.6 +3.3 +7% 1Q-3Q 1Q-3Q Changes 2017 2018 Amount % Enterprise segment 79.6 87.

  13. Slide 13: Summary of Projections

    Summary of Projections  There is a revision of projection for FY2018. (Billions of Yen) 【Reference】 FY2018 FY2018 FY2017 Changes Changes Previous Current Amount % Actual Amount % projection Projection Net Sales 625.0 620.0 - 5.0 -1% 632.2 -12.2 -2% (4.6%) (4.4%) (-0.2%) (4.8%) (-0.5%) Operating Inc

  14. Slide 14: Summary of Projections by Segment

    Summary of Projections by Segment FY2018 Current Projection v. Previous Projection (Billions of Yen) FY2018 FY2018 Changes Previous Projection Current Projection Op. Op. Net Sales Op. Net Sales Net Sales Income Income Amount % Income Consumers 154.5 9.4 151.0 8.0 -3.5 -2% -1.4 Enterprise 185.0 8.5 1

  15. Slide 15: Summary of Projections by Segment

    Summary of Projections by Segment FY2018 Projection v. FY2017 Actual (Billions of Yen) FY2017 FY2018 Changes Actual Current Projection Op. Op. Net Sales Op. Net Sales Net Sales Income Income Amount % Income Consumers 166.3 12.7 151.0 8.0 -15.3 -9% -4.7 Enterprise 177.6 7.7 185.0 8.5 +7.4 +4% +0.8 Ar

  16. Slide 16: Earnings Forecast: Segment Information (1)

    Earnings Forecast: Segment Information (1) Consumers ■ 4Q: We expect an increase in mirrorless cameras, particularly in EOS R, Canon's first full-sized mirrorless camera. Even so, net sales are expected to decline year on year due to the declining performance for DSLR cameras and inkjet printers. Op

  17. Slide 17: Earnings Forecast: Segment Information (2)

    Earnings Forecast: Segment Information (2) Area ■ 4Q: Shipments of main business equipment will increase along with the continued increase in sales of the IT solution business such as security and support services for the introduction of different types of IT as well as the operation and maintenance

  18. Slide 18: Supplementary Information

    Supplementary Information

  19. Slide 19: Capital Relationship Diagram

    Capital Relationship Diagram Canon Marketing Japan Inc. 50.11% Canon Inc. 背面 174,762 73,303 92.00% SuperStream Inc. 100 100% Canon IT Solutions Inc. 90.00% Qualysite Technologies Inc. 3,617 100 87.50% Canon Software America,Inc. 100% Edifist Learning Inc. US$0.8 million 100 100% Canon Control System

  20. Slide 20: Results of main consolidated companies

    Results of main consolidated companies (Billions of Yen) 3Q FY2017 3Q FY2018 Changes Amount % Enterprise Canon IT Solutions Inc. Net sales 21.0 22.7 +1.7 +8% Op. income 1.4 (6.7%) 1.5 (6.5%) +0.1 (-0.2%) Area Canon System & Support Inc. Net sales 29.2 28.5 -0.7 -2% Op. income 0.7 (2.3%) 1.0 (3.3%) +

  21. Slide 21: Results of main consolidated companies

    Results of main consolidated companies (Billions of Yen) 1Q-3Q 1Q-3Q Changes FY2017 FY2018 Amount % Enterprise Canon IT Solutions Inc. Net sales 62.0 66.2 +4.2 +7% Op. income 4.0 (6.4%) 5.1 (7.7%) +1.1 (+1.3%) Area Canon System & Support Inc. Net sales 90.2 88.2 -2.0 -2% Op. income 2.3 (2.6%) 2.7 (3

  22. Slide 22: SG&A expenses

    SG&A expenses (Billions of Yen) FY 2017 FY 2018 Changes 3Q 1Q-3Q 3Q 1Q-3Q 3Q 1Q-3Q Advertising expenses 1.9 6.0 2.0 5.8 +0.1 -0.2 Promotion expenses 1.1 3.4 0.9 3.2 -0.2 -0.3 Warranty expenses 1.2 3.9 1.2 3.6 -0.0 -0.4 Other direct selling expenses 4.9 15.1 4.7 14.4 -0.2 -0.7 Personnel expenses 30.6

  23. Slide 23: Non-operating income and expenses

    Non-operating income and expenses (Billions of Yen)  Non-operating income FY 2017 FY 2018 Changes 3Q 1Q-3Q 3Q 1Q-3Q 3Q 1Q-3Q Interest income 0.0 0.1 0.0 0.2 +0.0 +0.0 Dividend income 0.0 0.1 0.0 0.1 +0.0 +0.0 Insurance income 0.0 0.5 0.0 0.5 +0.0 -0.0 Gain on investments in partnership - - -0.0 0.5

  24. Slide 24: Extraordinary income and expenses

    Extraordinary income and expenses (Billions of Yen)  Extraordinary income FY 2017 FY 2018 Changes 3Q 1Q-3Q 3Q 1Q-3Q 3Q 1Q-3Q Gain on sales of fixed assets 0.0 0.9 0.0 0.1 -0.0 -0.7 Gain on sales of investments 0.1 0.5 0.1 0.5 +0.0 -0.1 in securities Gain on sales of shares of - - - 0.2 - +0.2 subsi

  25. Slide 25: Balance Sheets

    Balance Sheets Dec. 31 Sep. 30 (Billions of Yen) Changes 2017 2018 Notes and accounts receivable trade Assets 510.8 495.0 -15.8 Current assets 397.5 384.9 -12.7 Cash and deposits 137.0 114.2 -22.7 Notes and accounts receivable 125.6 104.3 -21.3 Inventories 33.9 34.4 +0.6 Other (current assets) 101.

  26. Slide 26: Financial Indicator

    Financial Indicator (Billions of Yen) Operating income ratio / ROA / ROE Profit attributable to owners of parent 25

  27. Slide 27: Financial Indicator

    Financial Indicator Payout Ratio / EPS / Dividend per share Payout Ratio Dividend per share : EPS : Yen Yen 26

  28. Slide 28: Financial Indicator

    Financial Indicator (Billions of Yen) Investment Cash Flow 1Q-3Q 4Q FY Actual Projection Projection FY 2017 9.3 4.3 13.7 FY 2018 7.7 4.4 12.2 Depreciation and amortization 1Q-3Q 4Q FY Actual Projection Projection FY 2017 10.7 3.6 14.3 FY 2018 10.0 3.0 13.0 27

  29. Slide 29: Canon

    Canon Canon Marketing Japan Inc.

Canon Marketing Japan — Q3 2018 Earnings Presentation on 6ix