Slide 1: Canon Inc. First Quarter 2009 Results
Canon Inc. First Quarter 2009 Results April 30, 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 and
Slide 2: Agenda
Agenda 1Q 2009 Results P3 – 6 FY 2009 Projections P7 – 10 Details by Business P11 – 17 Capital Expenditure & Cash Flow P18 – 19 Supplementary Information P20 – 25 April 30, 2009 Canon Inc. 2
Slide 3: 1Q 2009 in Summary
1Q 2009 in Summary External Environment 9 Ongoing global recession 9 Office products market continued shrink 9 Consumer products market bottoming out 9 Substantial appreciation of the yen, against the U.S. dollar and euro Results 9 Secured profit amid significant drop in sales 9 Implemented “Improve
Slide 4: Summary of Results
Summary of Results 1Q 2009 Actual (Billions of yen) (For Reference) 1Q 2009 1Q 2008 1Q 2009 Pct. change Actual Actual (excluding forex impact) Net sales 687.0 1,007.5 -31.8% 765.4 Gross profit 298.8 499.9 -40.2% 365.8 [% sales] 43.5% 49.6% 47.8% Op. profit 20.0 170.8 -88.3% 63.7 [% sales] 2.9% 17.0%
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 1Q 2009 Actual v. 1Q 2008 Actual (Billions of yen) Sales Op. Profit 1Q 2008 Actual 1,007.5 170.8 Change in Exchange Rate Foreign exchange impact -78.4 -43.7 •1USD: 104.78 to 93.86 yen [net sales, cost of sales, expenses] •1EURO: 157.59 to 121.85 yen Sales volume im
Slide 6: Improved Mgmt. Quality
Improved Mgmt. Quality Expenses Inventory (Billions of yen) (Billions of yen) 400 700 Amount Operating expenses 664 Turnover (days) 614 350 58 600 582 54 53 563 50 Billion Yen 47 47 300 44 Expense reduction 507 500 500 381 386 250 346 329 279 400 200 150 300 1Q08 2Q08 3Q08 4Q08 1Q09 '07 '08 '08 '08
Slide 7: Assumptions
Assumptions 2009 Current Projection Average 2Q-4Q09 FY09 FY08 Exchange Rate Yen-1USD 95.00 yen 94.78 yen 103.23 yen Yen-1EURO 125.00 yen 124.31 yen 151.46 yen Impact of Exchange Rate Movement (2-4Q impact given a one yen change) Net sales Operating profit USD 11.6 billion yen 6.8 billion yen
Slide 8: Key Points FY 2009
Key Points FY 2009 Assumptions 9 Market remains challenging, particularly for office products 9 Full economic recovery not until next year 9 Yen appreciation remains Projections 9 Secure over 100 billion yen in net income amid drop in sales 9 Enhanced “Improved Management Quality” 9 Pursue thorough
Slide 9: 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 Actual Actual impact) projection projection projection Net sales 3,330.0 3,500.0 4,094.2 -4.9% -18.7% 3,
Slide 10: 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 (Jan. 28, 2009) 3,500.0 160.0 •1USD: 90.00 to 94.78 yen Foreign exchange impact •1EURO: 120.00 to 124.31 yen +95.3 +54.4
Slide 11: Business Machines
Business Machines 1Q 2009 Actual / FY 2009 Projection (Billions of yen) 1Q (Billions of yen) FY Sales 900 Growth rate y/y ( ) Local currency base 3,000 600 2,000 -19.1%(-11.5%) 692 -34.7%(-26.4%) 2,660 2,295 300 1,000 2,152 452 0 0 1Q08 1Q09 FY08 FY09 FY09 Previous Current projection projection Op.
Slide 12: Office Imaging Products
Office Imaging Products 1Q 2009 Actual / FY 2009 Projection Growth rate y/y Sales (Unit base) (Billions of yen) Growth rate y/y Copying 1Q FY ( ) Local currency base machines 500 Others 2,000 Color -30% -9% Color Monochrome Mono- -31% -17% chrome 400 Total -31% -15% 1,500 288 1,120 -18.6%(-10.3%) 30
Slide 13: Computer Peripherals
Computer Peripherals Growth rate y/y 1Q 2009 Actual / FY 2009 Projection (Unit base) LBP 1Q FY Sales Color -72% -38% Growth rate y/y Mono- -75% -47% (Billions of yen) ( ) Local currency base chrome Total -75% -45% 500 Others 2,000 IJP LBP 380 1,455 -20.1%(-12.9%) 400 1,500 Color ratio (LBP) 1,229 1,
Slide 14: Cameras
Cameras 1Q 2009 Actual / FY 2009 Projection (Billions of yen) 1Q (Billions of yen) FY Sales 500 Growth rate y/y ( ) Local currency base 1,500 400 300 1,000 -24.4%(-12.5%) -13.3%(-3.3%) 200 500 1,042 858 904 100 219 166 0 0 1Q08 1Q09 FY08 FY09 Previous FY09 Current projection projection Op. OP ratio
Slide 15: Cameras
Cameras 1Q 2009 Actual / FY 2009 Projection Growth rate y/y (Unit base) Sales Digital cameras 1Q FY (Billions of yen) Growth rate y/y Compact -10% -8% ( ) Local currency base SLR +10% +2% 500 Video cameras 2,000 Digital cameras Total -7% -7% Interchangeable lenses and others 400 1,500 D SLR ratio* 1
Slide 16: Optical and Other Products
Optical and Other Products 1Q 2009 Actual / FY 2009 Projection (Billions of yen) 1Q (Billions of yen) FY Sales 200 Growth rate y/y 600 ( ) Local currency base 150 400 -30.0%(-26.2%) 100 -27.8%(-23.8%) 200 392 347 50 97 275 70 0 0 1Q08 1Q09 FY08 FY09 FY09 Previous Current projection projection Op. Pr
Slide 17: Optical and Other Products
Optical and Other Products 1Q 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 1Q09 ArF 150 ArF -30.0%(-26.2%) 2 0 392 Immersion Immersion -27.8
Slide 18: 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 750 750 407 488 234 144 309 455 500 500 839 110 325 100 695 617 473 461 432 250 425 250 429 380 362 342 341 330
Slide 19: Cash on Hand
Cash on Hand (Billions of yen) 3.2 3.3 Cash-on-hand Cash-on-hand 2.5 (Months of full-year net sales) 1,156 1,005 2.0 2.3 944 679 630 FYE05 FYE06 FYE07 FYE08 FYE09 Note: In 2007, 450 billion yen was used to acquire own share. In 2008, 100 billion yen. April 30, 2009 Canon Inc. 19
Slide 20: Supplementary Information
Supplementary Information April 30, 2009 Canon Inc. 20
Slide 21: 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 -299.2 -196.8 [net sales, cost of sales, expenses] Sales volume impact Office Imaging Products -107.8 Change in Exchange Rate
Slide 22: Gross Profit Variance Analysis
Gross Profit Variance Analysis 1Q 2009 Actual v. 1Q 2008 Actual (Billions of yen) 1Q09 1Q08 Change (Billions of yen) Gross Profit 298.8 499.9 -201.1 % sales 43.5% 49.6% -6.1 pt. 100 50 11.4 0 -50 -21.3 -20.0 -100 -78.4 -92.8 -150 -200 Forex Sales Price Forex Cost -201.1 impact volume change impact r
Slide 23: Operating Profit Variance Analysis
Operating Profit Variance Analysis 1Q 2009 Actual v. 1Q 2008 Actual (Billions of yen) 1Q09 1Q08 Change Op. Profit 20.0 170.8 -150.8 (Billions of yen) % sales 2.9% 17.0% -14.1 pt. 100 50 27.0 23.3 0 -50 -100 -150 -150.8 -200 -201.1 -250 Total change in Change in Change in SG&A Total change in gross p
Slide 24: 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 13 0.8% 0.7% 10 0.6% 1% 0.4% 0.3% 0 0% FYE05 FYE06 FYE07 FYE08 1QE09 Supplementary Information April 30, 2009 Canon Inc. 24
Slide 25: 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