Slide 1: Third Quarter 2009 Results
Canon Inc. Third Quarter 2009 Results October 27, 2009 Masahiro Osawa Managing Director, Group Executive Finance and Accounting Headquarters This presentation contains forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties a
Slide 2: Agenda
Agenda 3Q 2009 Results P3 – 7 FY 2009 Projections P8 – 11 Details by Business P12 – 18 Capital Expenditure & Cash Flow P19 – 20 Supplementary Information P21 – 26 (LBP: Laser Beam Printers, IJP: Inkjet Printers, SPE: Semiconductor Production Equipment) Oct. 27, 2009 Canon Inc. 2
Slide 3: 3Q 2009 in Summary
3Q 2009 in Summary External Environment 9 Recovery in some areas of the global economy 9 Significant appreciation of the yen 9 Market demand for consumer goods recovering, but continues to languish at the bottom for office equipment Results 9 Much better business performance compared to second quart
Slide 4: Summary of Results
Summary of Results 2009 3Q & YTD Actual (Billions of yen) (For reference) Pct. 2009 2008 Change 2009 (excluding forex impact) Actual % Sales Actual % Sales Actual Actual % Sales Net sales 774.3 986.0 -21.5% 870.8 Gross profit 349.3 45.1% 475.2 48.2% -26.5% 427.8 49.1% Op. profit 60.0 7.7% 129.3 13.1
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 3Q 2009 Actual v. 3Q 2008 Actual (Billions of yen) Sales Op. Profit 3Q 2008 Actual 986.0 129.3 Change in Exchange Rate Foreign exchange impact -96.5 -58.6 •1USD: 107.61 to 93.46 yen [net sales, cost of sales, expenses] •1EURO: 161.29 to 133.60 yen Sales volume impa
Slide 6: Expense & Inventory Situation
Expense & Inventory Situation Expenses Inventory (Billions of yen) (Billions of yen) 400 Operating expenses 700 57 Bil. Yen Amount 664 reduction Turnover 58 350 (days) 614 600 582 54 53 52 563 50 47 47 300 44 507 237 Bil. Yen 500 reduction 500 381 386 250 346 329 424 427 301 289 279 400 200 150 300
Slide 7: Steady Recovery in Performance
Steady Recovery in Performance Operating Profit Ratio Change in Net Sales/Op. Profit (Y/Y) 30% -1.9% -3.1% 23.6% 0% -6.2% 21.5% 20.8% 20.6% -21.3% -21.5% 20% 20.9% -11.7% 20.1% -28.2% 18.1% -17.6% -25.8% -31.8% 17.0% 17.4% 15.8% 14.9% -30% 14.5% 13.1% 13.1% 11.3% 11.5% -53.6% 10% 7.7% -60% Business
Slide 8: Assumptions
Assumptions 2009 Current Projection Average 4Q09 FY09 FY08 Exchange Rate Yen-1USD 90.00 yen 93.34 yen 103.23 yen Yen-1EURO 130.00 yen 129.69 yen 151.46 yen Impact of Exchange Rate Movement (4Q impact given a one yen change) Net sales Operating profit USD 4.4 billion yen 2.5 billion yen EURO
Slide 9: Key Points FY 2009
Key Points FY 2009 Assumptions 9 Uncertainty during year-end selling season for consumer goods 9 Continued weak market for office equipment 9 Stronger yen compared to previous forecast Projections 9 Achieve previous projection for net sales and profits, offsetting yen’s appreciation with improved bu
Slide 10: Summary of Projected Results
Summary of Projected Results FY 2009 Current Projection (Billions of yen) (For reference) FY 2009 FY 2009 FY 2009 FY 2008 Pct. Change Current projection Current Previous Previous (excluding forex impact) Actual Actual projection projection Projection Net sales 3,200.0 3,200.0 4,094.2 0.0% -21.8% 3,4
Slide 11: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2009 Current Projection v. FY 2009 Previous Projection (Billions of yen) FY 2009 Sales Op. Profit Change in Exchange Rate Previous Projection (July. 28, 2009) 3,200.0 190.0 •1USD: 95.33 to 93.34 yen Foreign exchange impact •1EURO: 128.85 to 129.69 yen -20.1 -16.
Slide 12: Business Machines
Business Machines 3Q 2009 Actual / FY 2009 Projection (Billions of yen) 3Q (Billions of yen) FY Sales 900 Growth rate y/y ( ) Local currency base 3,000 600 2,000 -23.5%(-16.6%) -24.9%(-14.9%) 2,660 300 651 1,000 2,033 2,035 489 0 0 3Q08 3Q09 FY08 FY09 FY09 Previous Current projection projection Op.
Slide 13: Office Imaging Products
Office Imaging Products 3Q 2009 Actual / FY 2009 Projection Growth rate y/y Sales (Unit base) (Billions of yen) Growth rate y/y Copying 3Q FY ( ) Local currency base machines 500 Others 2,000 Color -15% -15% Color Monochrome Mono- -26% -29% chrome 400 Total -23% -26% 1,500 270 1,120 -25.6%(-19.1%) C
Slide 14: Computer Peripherals
Computer Peripherals Growth rate y/y 3Q 2009 Actual / FY 2009 Projection (Unit base) LBP 3Q FY Sales Color -15% -40% Growth rate y/y Mono- -38% -46% (Billions of yen) ( ) Local currency base chrome Total -35% -45% 500 Others 2,000 IJP LBP 400 1,455 -22.5%(-15.1%) 361 -22.7%(-11.1%) 1,500 Color ratio
Slide 15: Cameras
Cameras 3Q 2009 Actual / FY 2009 Projection (Billions of yen) 3Q (Billions of yen) FY Sales 500 Growth rate y/y ( ) Local currency base 1,500 400 300 1,000 -8.3%(+6.2%) -11.9%(-2.6%) 200 1,042 250 500 908 918 100 229 0 0 3Q08 3Q09 FY08 FY09 FY09 Previous Current projection projection Op. OP ratio OP
Slide 16: Cameras
Cameras 3Q 2009 Actual / FY 2009 Projection Growth rate y/y (Unit base) Sales Digital cameras 3Q FY (Billions of yen) Growth rate y/y Compact -6% -8% ( ) Local currency base SLR +7% +10% 500 Video cameras 2,000 Digital cameras Total -4% -6% Interchangeable lenses and others 400 1,500 D SLR ratio* -8
Slide 17: Optical and Other Products
Optical and Other Products 3Q 2009 Actual / FY 2009 Projection (Billions of yen) 3Q (Billions of yen) FY Sales 200 Growth rate y/y ( ) Local currency base 600 150 400 100 -36.9%(-34.0%) -33.7%(-29.2%) 200 392 50 85 260 248 57 0 0 3Q08 3Q09 FY08 FY09 FY09 Previous Current projection projection Op. OP
Slide 18: Optical and Other Products
Optical and Other Products 3Q 2009 Actual / FY 2009 Projection Sales Growth rate y/y (Billions of yen) ( ) Local currency base IC Stepper Unit Breakdown IC Stepper Unit Breakdown by Light Source 200 Others by Light Source 600 SPE FY09 3Q09 ArF 150 ArF 2 2 392 Immersion Immersion -36.9%(-34.0%) -33.7
Slide 19: Capital Expenditure and Free Cash Flow
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) Increase in PP&E Operating C/F 1,000 Net income attributable to Canon Inc. 1,000 Free C/F Depreciation Investing C/F 750 750 407 488 234 144 309 455 500 500 110 839 140 325 110 110 695 617 480 473 465 461 432 250 250 429 380 362
Slide 20: Cash on Hand
Cash on Hand (Billions of yen) Cash-on-hand 3.0 3.1 Cash-on-hand 2.4 (Months of 2nd-Half net sales) 1,156 2.3 2.4 1,005 2.1 944 679 650 680 FYE05 FYE06 FYE07 FYE08 FYE09 FYE09 Previous Current projection projection Note: In 2007, 450 billion yen was used to acquire own share. In 2008, 100 billion ye
Slide 21: Supplementary Information
Supplementary Information Oct. 27, 2009 Canon Inc. 21
Slide 22: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2009 Current Projection v. FY 2008 Actual (Billions of yen) Sales Op. Profit FY 2008 Actual 4,094.2 496.1 Foreign exchange impact -264.8 -159.0 [net sales, cost of sales, expenses] Sales volume impact Office Imaging Products -201.6 Change in Exchange Rate
Slide 23: Gross Profit Variance Analysis
Gross Profit Variance Analysis 3Q 2009 Actual v. 3Q 2008 Actual (Billions of yen) 3Q09 3Q08 Change (Billions of yen) Gross Profit 349.3 475.2 -125.9 % sales 45.1% 48.2% -3.1 pt. 100 50 18.0 14.7 0 -14.0 -2.8 -50 -45.3 -100 -96.5 -150 -125.9 -200 Total Forex Sales Price Forex Cost Others change in im
Slide 24: Operating Profit Variance Analysis
Operating Profit Variance Analysis 3Q 2009 Actual v. 3Q 2008 Actual (Billions of yen) 3Q09 3Q08 Change Op. Profit 60.0 129.3 -69.3 (Billions of yen) % sales 7.7% 13.1% -5.4 pt. 150 100 50 36.7 19.9 0 -50 -100 -69.3 -150 -125.9 -200 Total change in Change in Change in SG&A Total change in gross profi
Slide 25: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 50 Debt Debt/Total Assets 5% 40 4% 32 31 30 27 3% 20 2% 14 11 0.8% 0.7% 10 0.6% 1% 0.4% 0.4% 0 0% FYE05 FYE06 FYE07 FYE08 3QE09 Supplementary Information Oct. 27, 2009 Canon Inc. 25
Slide 26: Financial Ratios
Financial Ratios (Yen) 1,000 20% 16.8% 16.0% 16.3% 16.5% 800 15% 11.1% 10.1% 10.1% 10.6% 10.8% 600 7.3% 10% 377.59 4.2% 400 341.95 5% 258.53 288.63 246.21 2.8% 200 0% 89.11 0 -5% FY04 FY05 FY06 FY07 FY08 FY09 Projection EPS (Basic) ROE ROA (Attributable to Canon Inc) * EPS (Basic) has been adjusted