Slide 1: Canon Inc. Second Quarter 2022 Results
Canon Canon Inc. Second Quarter 2022 Results July 26, 2022 This presentation contains fomard-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management's views and assumptions formed by available information. All
Slide 2: Agenda
Canon Agenda @ 2Q 2022 Results P2-4 @ FY 2022 Projection P5-7 ™@ Details by Business P8 - 14 (2Q 2022 Results & FY 2022 Projection) @ Financial Situation P15 - 16 @ Sustainability Measures P17 @ Excellent Global Corporation Plan Phase VI P18 @ Supplementary Information P19 - 21
Slide 3: Second quarter results overview
As for the second quarter, due to things such as the prolonged Russia-Ukraine conflict and Shanghai’s COVID lockdown, and accelerating global inflation, there is growing uncertainty about the future direction of the global economy. Despite this, demand for our products remained firm. That said, the
Slide 4: All Business Units posted higher sales and profit
All of our Business Units posted higher sales and profit. As for Printing, even though the number of people returning to the office is still on the way to recovery and the supply of products is not sufficient, thanks to structural reforms centered on overseas sales companies and the consolidation of
Slide 5: Factors impacting operating profit
Next, factors impacting operating profit. As for changes in foreign exchange rates, due to significant depreciation of the yen against the U.S. dollar and euro, which was approximately 20 yen and 6 yen, respectively, the impact on operating profit was a positive 28.2 billion yen. As for changes in s
Slide 6: FY 2022 projection: second half assumptions and parts shortages
As for foreign exchange rates in the second half of the year, we assumed 133 yen to the U.S. dollar and 138 yen to the euro. As backorders at the end of June have not changed significantly since the end of March, we expect solid demand for our products to continue. By raising production volume as mu
Slide 7: All four Business Units to post sales and profit growth
Our plan calls for all four Business Units to post sales and profit growth and for Printing and Imaging to post double-digit profitability. As for Medical, we aim to break our record performance of last year and raise profitability to 7.9% 6
Slide 8: Changes in operating profit from previous projection
Next, the changes in operating profit from our previous projection. As for changes in foreign exchange rates, the yen’s depreciation against the U.S. dollar and euro and our revised assumptions for the second half of the year had a positive impact of 41.6 billion yen. As for changes in sales volume,
Slide 9: Printing: Office
Regarding the printing equipment market, while companies seek optimal work styles that combine going to the office and working from home, we are seeing the number of people going to the office gradually recover and progress in office-oriented investment. At the same time, we are seeing continued sta
Slide 10: Printing: Prosumer
In the second quarter, our hardware sales were significantly above last year. As for production, compared with our plan to significantly increase output in order to fulfill backorders this year, we were unable to produce the volume we planned due to the impact of Shanghai’s COVID lockdowns. As a res
Slide 11: Printing: Production market
The production market has been recovering quickly due to the resumption of economic activity. Under the situation of rising prices for energy, paper, and other products, and the labor shortage in printing companies, the shift to digital commercial printing machines, which are superior in terms of co
Slide 12: Imaging: Cameras
As for the camera market, the launch of new mirrorless cameras and interchangeable lenses by each company is supporting continued strong demand. However, due to the global shortage of parts since last year and Shanghai’s COVID lockdown, the supply of products has been insufficient to meet demand. As
Slide 13: Imaging: Network cameras
Network camera demand remained strong, as economic activity returns to normal. Entering the second quarter, the volume of product supply recovered. As a result, we posted a solid double-digit increase in net sales. Network cameras use a management system to store and manage images captured by camera
Slide 14: Medical
As for the diagnostic imaging equipment market, while the supply of equipment will be insufficient due to parts shortages, Japanese market demand is expected to settle down to a pre-COVID level and demand for large equipment in the United States and Europe is recovering. As a result, we expect the o
Slide 15: Industrial: Semiconductor lithography and panels
As for the 2022 semiconductor device market, thanks to continued expansion in the number of semiconductors used in IoT, vehicles, and in other systems, we expect double digit growth. As for semiconductor lithography equipment, against the backdrop of very strong demand, our factories continue to ope
Slide 16: Inventory
Inventory at the end of June increased by about 65.0 billion yen from the end of March. About half of this, which was around 33.0 billion yen, was due to an increase in overseas inventory caused by yen depreciation. Excluding the foreign exchange impact, the inventory of sales companies decreased by
Slide 17: Free cash flow, share repurchase and dividends
Our outlook for free cash flow has not significantly changed. We plan to generate 255.0 billion yen, which exceeds last year, while properly allocating to capital spending and M&As for growth. As for financial cash flow, in May, we repurchased our own shares. As for dividends, as our level of confid
Slide 18: Sustainability measures: nanoimprint
Through our business activities, we are working to not only create new value and resolve societal issues, but also contribute to the protection and conservation of the global environment. As for nanoimprint which we are developing, unlike conventional lithography systems that burn semiconductor circ
Slide 19: Excellent Global Corporation Plan Phase VI
The business environment that surrounds us is unclear going forward, due to several factors such as semiconductor shortages and logistical constraints, the Russia-Ukraine conflict, concern about another COVID outbreak etc. However, demand for our products remains strong, and based on our solid found
Slide 20: Supplementary Information
Supplementary Information
Slide 21: FY 2022 Operating Profit Analysis
FY 2022 Operating Profit Analysis Canon (FY 2022 Current Projection versus FY 2021 Actual) Change in Net Sales, excluding FX impact, for reference Printing: +185.3 ane Imaging: +42.3 (Billions of yen) Medical oe Industrial & Others: +40.3 : Eliminations: -13.5 FX Details Total: +257.0 Net Sales: +27
Slide 22: Printing — Net Sales Growth Rate Y/Y
Printing — Net Sales Growth Rate Y/Y (Hardware & Non-hardware) Canon FY 2021 2Q Full Year on Actual Actual spy rerouwre +10% +40%! +47% +7% Non-hardware +7% +10%! +35% +3%| Office MFDs te Hardware -1% +29% +40% +3% Non-hardware +0% +3%| +30% 0% spy Hardware +47% +44% +4% +2% LPs Non-hardware +15% +8
Slide 23: Office/Prosumer — Net Sales by Product Category
Office/Prosumer — Net Sales by Product Category (Billions of yen) FY FY 2021 Full Year 2Q Full Year u rojectior Actual Actual Office MFDs 138.2 590.6 127.2 478.4 Office [Others 77.3 313.5 66.6 278.7 215.5 904.1 193.8 757.1 LPs 176.2 676.5) 141.4 563.1 Prosumer |IJPs 87.7 393.4 82.8 329.4 263.9 1,069