Slide 1: Canon Inc. First Quarter 2011 Results
Canon Inc. First Quarter 2011 Results April 26, 2011 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 assumpti
Slide 2: Agenda
Agenda 1Q 2011 Results P3 – 6 FY 2011 Projections P7 – 11 Details by Business P12 – 19 Financial Situation P20 – 22 Supplementary Information P23 – 28 April 26, 2011 Canon Inc. 2
Slide 3: 1Q 2011 in Summary
1Q 2011 in Summary External Environment 9 Global economy continued to gradually recover 9 Canon’s markets remained strong 9 Significant yen’s appreciation YoY 9 Great East Japan Earthquake (March 11th) Results 9 Expanded market share and steadily increased MIF through enhanced sales power 9 Newly co
Slide 4: Summary of Results
Summary of Results 1Q 2011 Actual (For Reference) 2011 (Billions of yen) (excluding effects of new consolidation) 1Q 2011 1Q 2010 Pct. Change Actual Pct.Change Actual Actual % Sales 766.8 +1.5% Net sales 839.2 755.5 +11.1% Gross profit 406.2 368.6 +10.2% 361.4 [% sales] 48.4% 48.8% 47.1% Op. profit
Slide 5: Summary of Results (Excluding earthquake effects)
Summary of Results 1Q 2011 Actual (Excluding earthquake effects) (Billions of yen) 1Q2011 1Q2010 Excluding Earthquake Pct. Actual earthquake Actual effects Change effects A B A VS B Net sales 839.2 -21.4 860.6 755.5 +13.9% Gross 406.2 -20.9 427.1 368.6 +15.9% profit [% sales] 48.4% 49.6% 48.8% Op. 8
Slide 6: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 1Q 2011 Actual v. 1Q 2010 Actual (Billions of yen) Sales Op. Profit 1Q 2010 Actual 755.5 86.8 Foreign exchange impact Change in Exchange Rate -50.0 -29.4 [net sales, cost of sales, expenses] •1USD: 90.63 to 82.28 yen •1EURO: 125.07 to 112.86 yen Sales volume impact
Slide 7: Assumptions
Assumptions 2011 Current Projection Average 2Q-4Q11 FY11 FY10 Exchange Rate Yen-1USD 85.00 yen 84.36 yen 87.40 yen Yen-1EURO 120.00 yen 118.28 yen 114.97 yen Impact of Exchange Rate Movement (2-4Q impact given a one yen change) Net sales Operating profit USD 13.3 billion yen 6.3 billion yen
Slide 8: Key Points FY 2011
Key Points FY 2011 Assumptions 9 Global economy after earthquake – continued path of gradual recovery 9 Canon markets – continued strong global demand Projections 9 Rebuild a stable product-supply structure through an early recovery in production 9 Achieve accelerated recovery from the second half t
Slide 9: Summary of Projected Results
Summary of Projected Results FY 2011 Current Projection (Billions of yen) FY 2011 FY 2010 Pct. Change Current projection Actual Net sales 3,730.0 3,706.9 +0.6% Gross profit 1,794.0 1,783.1 +0.6% [% sales] 48.1% 48.1% Op. profit 335.0 387.6 -13.6% [% sales] 9.0% 10.5% Net income attributable to Canon
Slide 10: Summary of Results: FY 2011 Excluding earthquake effects
Summary of Results FY 2011 Actual (Excluding earthquake effects) (Billions of yen) FY2011 FY2010 Excluding Current Earthquake earthquake Pct. Actual projection effects Change effects A B A VS B Net sales 3,730.0 -314.4 4,044.4 3,706.9 +9.1% Gross 1,794.0 -193.3 1,987.3 1,783.1 +11.5% profit [% sales
Slide 11: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2011 Current Projection v. FY 2011 Previous Projection (Billions of yen) Sales Op. Profit Previous Projection (Jan. 27, 2011) 4,100.0 470.0 Foreign exchange impact Change in Exchange Rate [net sales, cost of sales, +70.9 +46.8 •1USD: 85.00 to 84.36 yen •1EURO: 1
Slide 12: Office
Office Sales/Op.Profit (Billions of yen) Net Sales Operating Profit Growth rate y/y Operating Profit Ratio ( ) Local currency base 17.6% +17.5%(+25.4%) 16.1% 15.1% QTR 522 549 13.1% Excluding new consolidation 507 effects 11.1% 409 481 -12.5% 2011 1Q 84 76 72 61 63 Net Sales 409 Op. Profit Ratio 16.
Slide 13: Office (Copiers)
Office (Copiers) 1Q 2011 Actual / FY 2011 Projection Sales (Billions of yen) Growth rate y/y ( ) Local currency base Others Other printing devices 2,500 Color copiers 2,180 600 Monochrome copiers 549 1,987 2,039 522 507 2,000 481 409 400 1,500 Copier total Copier total -2.5%(+4.5%) 1,000 -6.1%(-5.7%
Slide 14: Office (Other Printing Devices)
Office (Other Printing Devices) 1Q 2011 Actual / FY 2011 Projection Sales (Billions of yen) Growth rate y/y ( ) Local currency base Others Other printing devices 2,500 Color copiers 2,180 600 Monochrome copiers 549 1,987 2,039 522 507 2,000 481 409 400 1,500 +1.1%(+3.4%) +4.6%(+14.0%) 1,000 200 500
Slide 15: Consumer
Consumer Sales/Op.Profit (Billions of yen) Net Sales Operating Profit Operating Profit Ratio Growth rate y/y 18.4% 18.1% ( ) Local currency base 16.3% 15.8% 13.8% QTR -0.2 %(+7.6%) 412 364 325 290 290 -15.7% 67 59 65 47 40 1Q10 2Q10 3Q10 4Q10 1Q11 Growth rate y/y ( ) Local currency base 17.1% 17.3%
Slide 16: Consumer (Cameras)
Consumer (Cameras) 1Q 2011 Actual / FY 2011 Projection Sales (Billions of yen) Growth rate y/y ( ) Local currency base 2,000 500 Others IJP Cameras 412 1,535 400 364 1,500 1,391 1,378 325 300 290 290 1,000 200 -2.5%(-2.3%) 500 100 +2.8%(+11.2%) 0 0 1Q10 2Q10 3Q10 4Q10 1Q11 FY10 FY11 FY11 Previous Cu
Slide 17: Consumer (IJP)
Consumer (IJP) 1Q 2011 Actual / FY 2011 Projection Sales (Billions of yen) Growth rate y/y ( ) Local currency base 2,000 500 Others IJP Cameras 412 1,535 400 364 1,500 1,391 1,378 325 300 290 290 +4.5%(+5.0%) 1,000 -4.6%(+2.4%) 200 500 100 0 0 1Q10 2Q10 3Q10 4Q10 1Q11 FY10 FY11 FY11 Previous Current
Slide 18: Industry and Others
Industry and Others Sales/Op.Profit (Billions of yen) Growth rate y/y ( ) Local currency base Net Sales 109 Gross 86 84 Sales 71 Net Sales 60 (Includes +17.4%(+20.3%) sales 132 QTR among Group 82 109 110 92 Gross Sales +11.7%(+13.8%) business 4 7 Sales Elimination -22 -3 -23 -5 -26 -23 -6 -21 Op. Pr
Slide 19: Industry and Others (Litho.Equip.)
Industry and Others (Litho.Equip.) 1Q 2011 Actual / FY 2011 Projection (Billions of yen) Sales (Billions of yen) 200 Others 600 Growth rate y/y Lithography equipment ( ) Local currency base 370 150 Corporate and eliminations 338 109 328 400 86 84 71 100 60 200 50 (Litho.Equip.) -29.3%(-29.1%) +134.6
Slide 20: Inventories
Inventories (Billions of yen) 800 Amount Turnover (days) 700 54 52 600 50 49 46 45 42 39 35 500 500 471 456 436 424 427 428 400 373 385 300 1QE09 2QE09 3QE09 4QE09 1QE10 2QE10 3QE10 4QE10 1QE11 April 26, 2011 Canon Inc. 20
Slide 21: Capital Expenditure, 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 750 750 144 402 309 230 241 500 500 310 220 70 247 132 744 625 617 611 473 470 250 250 395 400 362 370 341 342 3
Slide 22: Cash on Hand
Cash on Hand Cash on Hand (Year-end) (Billions of yen) Cash-on-hand Cash-on-hand (In months of 2nd-half net sales, except FYE11, which is based on full-year net sales) 2.8 2.4 2.7 2.6 2.5 2.1 944 930 795 841 800 679 FYE07 FYE08 FYE09 FYE10 FYE11 FYE11 Previous Current projection projection Note 1: I
Slide 23: Supplementary Information
Supplementary Information April 26, 2011 Canon Inc. 23
Slide 24: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2011 Current Projection v. FY 2010 Actual (Billions of yen) Sales Op. Profit FY 2010 Actual 3,706.9 387.6 Foreign exchange impact -9.3 -6.2 [net sales, cost of sales, expenses] Sales volume impact Office +223.7 Change in Exchange Rate (FY) Consumer +204.4
Slide 25: Gross Profit Variance Analysis
Gross Profit Variance Analysis 1Q 2011 Actual v. 1Q 2010 Actual (Billions of yen) 1Q11 1Q10 Change (Billions of yen) Gross Profit 406.2 368.6 +37.6 % sales 48.4% 48.8% -0.4 pt. 100 53.1 44.8 50 37.6 21.9 10.6 0 -21.9 -20.9 -50 -50.0 Forex Sales Price Forex Cost New Earthquake Total change -100 impac
Slide 26: Operating Profit Variance Analysis
Operating Profit Variance Analysis 1Q 2011 Actual v. 1Q 2010 Actual (Billions of yen) 1Q11 1Q10 Change Op. Profit 82.5 86.8 -4.3 (Billions of yen) % sales 9.8% 11.5% -1.7 pt. 100 50 37.6 10.0 -0.3 0.1 0 -3.0 -4.3 -50 -48.7 Change in Change in New Earthquake Others Total change -100 Total change SG&A
Slide 27: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 50 Debt Debt/Total Assets 5% 40 4% 30 27 3% 19 20 2% 14 10 11 10 0.6% 0.5% 1% 0.4% 0.3% 0.3% 0 0% FYE07 FYE08 FYE09 FYE10 1QE11 Supplementary Information April 26, 2011 Canon Inc. 27
Slide 28: Financial Ratios
Financial Ratios (Yen) 1,000 20% 16.3% 16.5% 800 15% 11.1% 10.6% 10.8% 600 9.2% 10% 8.1% 7.3% 4.9% 377.59 400 341.95 6.3% 5.4% 5% 246.21 3.4% 199.71 179.09 200 106.64 0% 0 -5% FY06 FY07 FY08 FY09 FY10 FY11 Current projection EPS (Basic) ROE ROA (Attributable to Canon Inc) Note 1: EPS (Basic) has bee