Canon Inc. · TSE:7751
Canon — Q1 2020 Earnings Presentation
22 slides from Canon's earnings presentation, Apr 23, 2020
Slide 1: First Quarter 2020 Results
Canon Inc. First Quarter 2020 Results April 23, 2020 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 2020 Results P2 – 5 2Q 2020～ Outlook P6 Details by Business P7 – 14 (1Q 2020 Results) Financial Situation P15 – 16 Sustainability Measures P17 Supplementary Information P18 – 21 1
Slide 3: Key Message (1Q 2020 Results)
Key Message (1Q 2020 Results) External environment Spread of COVID-19 completely changes global economic landscape Global economy faces worst recession since the Great Depression Business performance Factory shutdowns and decline in capacity utilization rates Some products in short supply
Slide 4: FY 2020 Financial Results
FY 2020 Financial Results (1Q 2020 Actual versus 1Q 2019 Actual) In line with plan at beginning of year, but COVID-19 pulled down sales and profit New businesses as a whole post sales and profit growth 1Q 2020 1Q 2019 (Billions of yen) % Change Actual Actual Net Sales 782.3 864.5 -9.5% Gross Pro
Slide 5: FY 2020 Financial Results by Business Unit
FY 2020 Financial Results by Business Unit (1Q 2020 Actual versus 1Q 2019 Actual) Office closed with profit increase thank to comprehensive expense management Other Business Units recorded sales and profit decline 1Q 2020 1Q 2019 (Billions of yen) % Change Actual Actual Office Net Sales 397.6 43
Slide 6: FY 2020 Operating Profit Analysis
FY 2020 Operating Profit Analysis (1Q 2020 Actual versus 1Q 2019 Actual) Negative impact from changes in sales volume: Office and Imaging System - short product supply and worsening market conditions, Industry & Others - Postponed installation work Offset impact of lower volumes through expense
Slide 7: 2Q 2020～ Outlook
2Q 2020～ Outlook External environment Despite governments and financial authorities swift response, serious recession is inevitable due to stagnant economic activity Unable to predict when COVID-19 pandemic fades Outlook Second quarter will be worse than first quarter Unable to predict when
Slide 8: Office – MFDs
Office – MFDs Many companies closed in first quarter, lower unit sales and service revenue Office work continues to be constrained, expect further decline in second quarter (Billions of yen) 1Q Full Year 2020 2020 2020 2019 % 2019 % Current Previous Actual Actual Change Actual Change Projection
Slide 9: Office – Laser Printers
Office – Laser Printers 1Q: Significant decline in unit sales mainly due to short product supply 2Q~: Expect demand for medium- to high-speed models to decrease due to economic downturn (Billions of yen) 1Q Full Year 2020 2020 2020 2019 % 2019 % Current Previous Actual Actual Change Actual Chang
Slide 10: Office – Others
Office – Others 1Q: Impact from COVID-19 was limited 2Q~: Expect performance to be challenged due to postponement of trade shows and stagnant sales activity (Billions of yen) 1Q Full Year 2020 2020 2020 2019 % 2019 % Current Previous Actual Actual Change Actual Change Projection Projection MFDs
Slide 11: Imaging System – Cameras
Imaging System – Cameras 1Q: Lower revenue due to market contraction and COVID-19 impact Announced development of full-frame mirrorless camera, EOS R5. Stimulate demand with even sharper focus on professionals and advanced amateurs (Billions of yen) 1Q Full Year 2020 2020 2020 2019 % 2019 % Curr
Slide 12: Imaging System – Inkjet Printers
Imaging System – Inkjet Printers 1Q: Revenue increase thanks to increased demand for home printing due to remote working etc. 2020: Enhance lineup of refillable ink tank models and focus on raising expense efficiency (Billions of yen) 1Q Full Year 2020 2020 2020 2019 % 2019 % Current Previous Ac
Slide 13: Medical System
Medical System A lot of business activity restrained by COVID-19 Despite being impacted, will enhance product competitiveness and sales structure to prepare for the future (Billions of yen) 1Q Full Year 2020 2020 2020 2019 % 2019 % Current Previous Actual Actual Change Actual Change Projection P
Slide 14: Industry & Others – Lithography Equipment
Industry & Others – Lithography Equipment Even amid travel restrictions, local subsidiaries and other companies were able to install semiconductor lithography equipment Full-year FPD lithography equipment unit sales expected to decline due to longer amount of time needed for installation (Billio
Slide 15: Industry & Others – Others
Industry & Others – Others OLED vacuum deposition equipment also saw unavoidable push out of installations. Working to minimize impact, prepare for when installation work re-starts Network cameras: Promote as planned strengthening of lineup with eye towards when pandemic fades (Billions of yen)
Slide 16: Inventory
Inventory Imaging System: Produce taking into account parts delivery situation Industry & Others: Increased inventory due to limited ability to install equipment at customer sites FY 2019 FY 2020 (Billions of yen) 1Q 2Q 3Q 4Q 1Q Amt. 215.5 206.1 201.3 191.9 194.9 Office Days 43 43 42 40 42 Amt.
Slide 17: Cash Flow
Cash Flow (1Q 2020 Actual versus 1Q 2019 Actual) While 1Q profit declined, generated cash by improving working capital and restraining capital expenditures Preparing for unexpected, based on the mindset of prioritizing cash flow 1Q 2020 1Q 2019 Amount (Billions of yen) Actual Actual Change Net c
Slide 18: Expanding Measures to Realize Kyosei
Environmental and CSR Activities Expanding Measures to Realize Kyosei ■Three important issues and case examples Strive to achieve new CO2 reduction target that exceeds the Paris Agreement Swiftly stop the spread of COVID-19 in line with building global consensus through products (Medical business)
Slide 19: Supplementary Information
Supplementary Information 18
Slide 20: Net Sales Growth Rate of Hardware & Non-hardware
Net Sales Growth Rate of Hardware & Non-hardware FY 2020 FY 2019 1Q Full Year 1Q Full Year Actual Projection Actual Actual MFDs Hardware -18% - -3% -7% JPY Non-hardware -2% - -4% -5% Hardware -17% - -2% -4% LC Non-hardware 0% - -2% -2% LPs Hardware -21% - -2% -5% JPY Non-hardware -7% - -12% -15% Har
Slide 21: Color Ratio (MFDs & LPs) Sales Growth by Monochrome & Color MFDs
Color Ratio (MFDs & LPs) FY 2020 FY 2019 1Q Full Year 1Q Full Year Actual Projection Actual Actual Net Sales 60% - 59% 59% MFDs QTY 58% - 58% 59% Net Sales 53% - 52% 52% LPs QTY 21% - 18% 20% Sales Growth by Monochrome & Color MFDs FY 2020 FY 2019 1Q Full Year 1Q Full Year Actual Projection Actual A
Slide 22: Interchangeable Lens Digital Camera Ratio; IC Stepper Unit Breakdown
Interchangeable Lens Digital Camera Ratio FY 2020 FY 2019 1Q Full Year 1Q Full Year Actual Projection Actual Actual Value Base 83% - 84% 85% Unit Base 60% - 63% 62% * Value Base Includes Interchangeable Lenses IC Stepper Unit Breakdown by Light Source (unit) FY 2020 FY 2019 1Q Full Year 1Q Full Year