Slide 1: Canon Inc. FY 2018 Results
Canon Inc. FY 2018 Results January 30, 2019 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 FY 2018 Results P2 - 4 FY 2019 Projection P5 - 8 Details by Business P9 - 17 (FY 2018 Results & FY 2019 Projection) Financial Situation P18 - 19 Supplementary Information P20 - 34 1
Slide 3: Key Message (FY 2018 Results)
Key Message (FY 2018 Results) Achieved second consecutive year of profit growth, despite overall sales decline Sales Decline in camera and vacuum deposition equipment sales due to change in market conditions Achieved steady revenue growth in Office Continued growth of new businesses, such as m
Slide 4: FY 2018 Financial Results (Full Year)
FY 2018 Financial Results (Full Year) Compared to last year: Achieved growth in both operating profit and net income Compared to previous projection: Exceeded planned profit level through comprehensive expense management and despite lower than expected sales FY 2018 FY 2017 FY 2018 Amount Full Y
Slide 5: FY 2018 Financial Results by Business Unit (Full Year)
FY 2018 Financial Results by Business Unit(Full Year) Office, Medical, and Industry & Others – Sales and profit growth Imaging System – Sales and profit decline, due to market contraction FY 2018 FY 2018 FY 2017 % Amount (Billions of yen) Previous Actual Actual Change Change Projection Office Ne
Slide 6: Key Message (FY 2019 Projection)
Key Message (FY 2019 Projection) FX Assumptions Impact of exchange rate movement （Annual impact given a one yen change） FY 2018 FY 2019 Net Sales Op. Profit USD/Yen 110.43 yen 105.00 yen 13.2 billion yen 4.4 billion yen EUR/Yen 130.29 yen 125.00 yen 6.1 billion yen 3.0 billion yen External Environme
Slide 7: FY 2019 Financial Projection (Full Year)
FY 2019 Financial Projection (Full Year) Project sales and profit decline due to negative impact of exchange rates Strive to strengthen structure through cost reduction, comprehensive expense management, etc. 2019 2018 (Billions of yen) % Change Projection Actual Net Sales 3,900.0 3,951.9 -1.3%
Slide 8: FY 2019 Financial Projection by Business Unit (Full Year)
FY 2019 Financial Projection by Business Unit(Full Year) Imaging System: Lessen impact of market decline, expanding sales in growth areas and promoting cost reduction activities Medical: Sales and profit growth through full contribution of new products and investment into sales & marketing in ov
Slide 9: FY 2019 Operating Profit Analysis
FY 2019 Operating Profit Analysis (FY 2019 Projection versus FY 2018 Actual) Expand sales, particularly Office and Medical Manage price reduction to below last year’s level through well-defined sales & marketing investment Change in Net Sales, excluding FX impact, for reference Office: +25.6 (Bi
Slide 10: Office – MFDs
Office – MFDs 2018: Continued strong sales of color models equipped with features that facilitate linkage with cloud services 2019: Expand sales of new products that have significantly enhanced security features Work to stabilize service revenue through expansion of color device MIF (Billions
Slide 11: Office – Laser Printers
Office – Laser Printers 2018: Expanded hardware sales through new products 2019: Work to improve product mix and strengthen measures to expand sales of consumables (Billions of yen) Full Year Full Year 2018 2018 2017 % Amount 2019 2018 % Previous Actual Actual Change Change Projection Actual Cha
Slide 12: Office – Others
Office – Others Continued steady sales of products for graphic arts segment that have earned high marks from customers Aim for revenue growth through full-scale entry into the package market and efforts to enhance sales structure (Billions of yen) Full Year Full Year 2018 2018 2017 % Amount 2019
Slide 13: Imaging System – Cameras
Imaging System – Cameras Spread seed that will grow to stabilize this business in the future Strengthen presence in mirrorless camera market Expand lineup of products with the EOS R system at its core Accelerate development of new products 『EOS R System』 Improve Profitability Raise proport
Slide 14: Imaging System – Cameras: New Category Cameras
Imaging System – Cameras New Category Cameras • Stylishly designed cameras for young people • Cameras equipped with AI that automatically that are waterproof and highly durable capture images • Cameras optimized for outdoor use in • Cameras that capture the decisive moment in situations where smartp
Slide 15: Imaging System – Cameras
Imaging System – Cameras Focus on improving product mix amid expectations (Billions of yen) Full Year Full Year 2018 2018 2017 % Amount 2019 2018 % Previous Actual Actual Change Change Projection Actual Change Projection Cameras 599.9 702.8 -14.6% 623.1 -23.2 562.8 599.9 -6.2% IJPs 320.2 335.6 -4.
Slide 16: Imaging System – Inkjet Printers
Imaging System – Inkjet Printers 2018: Although total unit sales were down, sales of refillable ink tank models remained strong 2019: Aiming for market exceeding growth, actively investing in sales & marketing (Billions of yen) Full Year Full Year 2018 2018 2017 % Amount 2019 2018 % Previous Act
Slide 17: Medical System
Medical System 2018: Achieved sales and profit growth, posting continued strong sales of new products we’ve launched so far. 2019: Expect strong growth thanks to full-scale contribution of new products as well as sales structure reinforcement Improve profitability, promoting further cost reduc
Slide 18: Industry & Others
Industry & Others 2018: Strong growth in semiconductor litho. equipment that captured demand for memory 2019: Aim to expand share in both semiconductor and FPD Litho. equipment by capturing the needs of customers Network cameras: Enhance product lineup and aim to continue double-digit growth.
Slide 19: Inventory
Inventory Imaging System: Inventory increase due to impact of external environment Office and Medical: Maintained appropriate level FY 2017 FY 2018 (Billions of yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Amt. 206.9 211.1 222.4 205.1 207.5 209.9 224.6 206.1 Office Days 42 43 46 41 41 42 46 42 Amt. 142.7 148.8
Slide 20: Cash Flow (Full Year)
Cash Flow (Full Year) Comprehensive cash flow management Cash-on-hand: Maintain 500 billion yen level while promoting debt repayment Capital expenditures: Control within the range of depreciation FY 2019 FY 2018 FY 2017 (Billions of yen) Projection Actual Actual Net cash provided by operating
Slide 21: Supplementary Information
Supplementary Information 20
Slide 22: FY 2018 Operating Profit Analysis (Actual vs FY 2017)
FY 2018 Operating Profit Analysis (FY 2018 Actual versus FY 2017 Actual) Change in Net Sales, excluding FX impact, for reference Office: +9.5 Imaging System: -101.9 Medical System: +2.9 Industry & Others: -4.2 Total: -93.7 Service Reclassification Impact (Billions of yen) FX Details Net Sales: +1.0
Slide 23: FY 2018 Operating Profit Analysis (Actual vs Previous Projection)
FY 2018 Operating Profit Analysis (FY 2018 Actual versus FY 2018 Previous Projection) Change in Net Sales, excluding FX impact, for reference Office: -14.9 Imaging System: -29.0 Medical System: -6.7 Industry & Others: -1.3 Total: -51.9 (Billions of yen) FX Details Net Sales: +9.2 Cost of Sales: -4.2
Slide 24: Impact of Change in Pension Accounting Standard
Impact of Change in Pension Accounting Standard Reclassification of Gross profit, Operating expenses, and Other income (deductions) (Full-year impact 9.9 billion yen) No impact on Income before income taxes and Net income Pension accounting - Pre-standard change Pension accounting - Post-standar
Slide 25: Dividend
Dividend (Yen) mam Regular Dividend m= Commemorative Dividend -e=Dividend Payout Ratio 150 150 150 160 0 Canon 160 FY13 FY14 FY15 FY16 FY17 FY18 Plan 24
Slide 26: Net Sales Growth Rate of Hardware & Non-hardware
Net Sales Growth Rate of Hardware & Non-hardware FY 2019 FY 2018 FY 2017 Full Year 4Q Full Year 4Q Full Year Projection Actual Actual Actual Actual MFDs Hardware +1% -1% -1% +3% +2% JPY Non-hardware -3% -6% -1% +8% +3% Hardware +5% 0% -2% -3% -2% LC Non-hardware 0% -5% -2% +2% +1% LPs Hardware -6% +
Slide 27: Color Ratio (MFDs & LPs)
Color Ratio (MFDs & LPs) FY 2019 FY 2018 FY 2017 Full Year 4Q Full Year 4Q Full Year Projection Actual Actual Actual Actual Net Sales 60% 60% 59% 59% 58% MFDs QTY 59% 58% 58% 58% 55% Net Sales 52% 51% 51% 52% 52% LPs QTY 19% 19% 18% 20% 18% Sales Growth by Monochrome & Color MFDs FY 2019 FY 2018 FY
Slide 28: Interchangeable Lens Digital Camera Ratio
Interchangeable Lens Digital Camera Ratio FY 2019 FY 2018 FY 2017 Full Year 4Q Full Year 4Q Full Year Projection Actual Actual Actual Actual Value Base 86% 85% 85% 85% 85% Unit Base 64% 60% 61% 60% 58% * Value Base Includes Interchangeable Lenses IC Stepper Unit Breakdown by Light Source (unit) FY 2
Slide 29: New Businesses Composition Ratio
Change in New Businesses Composition Ratio Percentage of sales attributable to new businesses increasing despite lower OLED vacuum deposition equipment sales Making steady progress in converting portfolio Net Sales Composition Note: The outsourcing business of commercial printing within the Offi
Slide 30: 4Q 2018
4Q 2018 29
Slide 31: FY 2018 Financial Results (4Q 2018)
FY 2018 Financial Results (4Q 2018) FY 2018 FY 2017 4Q 4Q % Change 4Q Service 4Q (Billions of yen) Pension Actual Pension Actual (Pre- Actual Cost Actual (Pre-reclassification) (Pre-reclassification) reclassification) Net Sales 1,058.3 0.0 0.0 1,058.3 1,120.3 0.0 1,120.3 -5.5% Gross Profit 489.3 -29
Slide 32: FY 2018 Financial Results by Business Unit (4Q 2018)
FY 2018 Financial Results by Business Unit (4Q 2018) 4Q 2018 4Q 2017 (Billions of yen) % Change Actual Actual Office Net Sales 471.6 477.3 -1.2% Op. Profit 60.7 38.1 +59.2% Imaging Net Sales 297.5 340.9 -12.7% System Op. Profit 39.7 58.5 -32.2% Medical Net Sales 118.2 103.7 +14.0% System Op. Profit
Slide 33: FY 2018 Operating Profit Analysis (4Q 2018 vs 4Q 2017)
FY 2018 Operating Profit Analysis (4Q 2018 Actual versus 4Q 2017 Actual) (Billions of yen) Change in Net Sales, excluding FX impact, for reference Office: +2.7 Imaging System: -25.2 Medical System: +15.7 Industry & Others: -26.2 Total: -33.0 FX Details Net Sales: -12.3 Cost of Sales: +1.5 Op. Expens
Slide 34: Office / Imaging System (4Q 2018)
Office / Imaging System (4Q 2018) Office (Billions of yen) 4Q Net Sales Growth Rate Y/Y Unit Growth Rate Y/Y 2018 2017 % (Local Currency) Actual Actual Change 4Q 2018 4Q 2018 4Q 2018 MFDs 181.3 188.4 -3.8% MFDs ＬＰ Actual Actual Actual LPs 177.3 178.1 -0.5% MFDs -2.4% B&W +4% B&W +5% Others 113.0 110
Slide 35: Medical System / Industry & Others (4Q 2018)
Medical System / Industry & Others (4Q 2018) Medical System Net Sales Growth Rate Y/Y (Local Currency) (Billions of yen) 4Q 2018 2017 % 4Q 2018 Actual Actual Change Actual Net Sales 118.2 103.7 +14.0% Total +15.2% Op. Profit 8.8 4.8 +83.1% (% of Net Sales) 7.5% 4.6% Industry & Others (Billions of ye