Canon Inc. · TSE:7751
Canon — FY2019 Earnings Presentation
34 slides from Canon's earnings presentation, Jan 29, 2020
Slide 1: Canon Inc. FY 2019 Results
Canon Inc. FY 2019 Results January 29, 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 assumptions forme
Slide 2: Agenda
Agenda FY 2019 Results P2 – 4 FY 2020 Projection P5 – 8 Details by Business P9 – 16 (FY 2019 Results & FY 2020 Projection) Financial Situation P17 – 18 Sustainability Measures P19 Supplementary Information P20 – 33 1
Slide 3: Key Message (FY 2019 Results)
Key Message (FY 2019 Results) External environment Phase of global economic slowdown, against a backdrop of uncertainty Business performance Accelerated camera and laser printer market contraction, due to economic slowdown Net sales decline, due to restrained customer investment in Industry &
Slide 4: FY 2019 Financial Results (Full Year)
FY 2019 Financial Results (Full Year) Compared with previous year: Sales and profit decline Compared with previous projection: Below plan, due to weak market, particularly emerging markets FY 2019 FY 2019 FY 2018 Amount (Billions of yen) % Change Previous Actual Actual Change Projection Net Sale
Slide 5: FY 2019 Financial Results by Business Unit
FY 2019 Financial Results by Business Unit (Full Year) Sales and profit decline in Office, Imaging System, and Industry & Others Medical System sales in line with previous year FY 2019 FY 2019 FY 2018 Amount (Billions of yen) % Change Previous Actual Actual Change Projection Office Net Sales 1,7
Slide 6: Key Message (FY 2020 Projection)
Key Message (FY 2020 Projection) Impact of exchange rate movement FX Assumptions （Annual impact given a one yen change） FY 2019 FY 2020 Net Sales Op. Profit USD/Yen 109.03 yen 108.00 yen 12.2 billion yen 4.4 billion yen EUR/Yen 122.03 yen 120.00 yen 6.0 billion yen 2.7 billion yen External Environme
Slide 7: FY 2020 Financial Projection (Full Year)
FY 2020 Financial Projection (Full Year) Sales and profit growth, thanks to new business growth and structural reform 2020 2019 (Billions of yen) % Change Projection Actual Net Sales 3,700.0 3,593.3 +3.0% Gross Profit 1,670.0 1,610.0 +3.7% (% of Net Sales) 45.1% 44.8% Op. Expenses 1,440.0 1,435.3
Slide 8: FY 2020 Financial Projection by Business Unit
FY 2020 Financial Projection by Business Unit (Full Year) In Office, performance of MFD - solid, laser printer consumables - stabilizing Improvement in Imaging System profitability despite continued net sales decline Significant sales and profit growth, thanks to favorable market situation sur
Slide 9: FY 2020 Operating Profit Analysis
FY 2020 Operating Profit Analysis (FY 2020 Projection versus FY 2019 Actual) Increasing profit due to increased sales of Medical System and Industry & Others Includes expenses for new business performance expansion (Billions of yen) FX Details Net Sales: -25.9 Cost of Sales: +8.4 Op. Expenses: +
Slide 10: Office – MFDs
Office – MFDs 2019 sales of new color MFDs and production models performed well Realize market exceeding unit sales growth in 2020, thanks to new products (Billions of yen) Full Year Full Year 2019 2019 2018 % Amount 2020 2019 % Previous Actual Actual Change Change Projection Actual Change Proje
Slide 11: Office – Laser Printers
Office – Laser Printers 2019 market contraction greater than expected, challenging environment expected to persist in 2020 Expand high-quality MIF, actively selling medium- and high-speed models where demand remains firm Aim to stabilize sales of consumables, continuing actions against patent
Slide 12: Office – Others
Office – Others Continue to launch products for graphic arts market in 2020 Deepen cooperation under the unified brand of Canon (Billions of yen) Full Year Full Year 2019 2019 2018 % Amount 2020 2019 % Previous Actual Actual Change Change Projection Actual Change Projection MFDs 645.6 684.3 -5.7
Slide 13: Imaging System – Cameras
Imaging System – Cameras Interchangeable-lens camera market continues to shrink in 2020 at similar rate as 2019 Plan to improve hardware product mix, focusing on professional and advanced-amateur market segments where demand remains stable (Billions of yen) Full Year Full Year 2019 2019 2018 % A
Slide 14: Imaging System – Inkjet Printers
Imaging System – Inkjet Printers 2019 net sales down, due to market contraction Expand inkjet printer sales in 2020, raising appeal of refillable ink tank models (Billions of yen) Full Year Full Year 2019 2019 2018 % Amount 2020 2019 % Previous Actual Actual Change Change Projection Actual Chang
Slide 15: Medical System
Medical System 2019 net sales up, thanks to effect of new products launched so far Expand sales in 2020, concentrating efforts on enhancing sales capability Improve profitability, accelerating cost reduction activities by strengthening cooperation among the Group (Billions of yen) Full Year Fu
Slide 16: Industry & Others – Lithography Equipment
Industry & Others – Lithography Equipment Improve profitability, accelerating cost reduction activities by strengthening cooperation among the Group Post significant growth in lithography equipment unit sales in 2020, thanks to memory market recovery (Billions of yen) Full Year Full Year 2019 20
Slide 17: Industry & Others – Others
Industry & Others – Others Return to OLED vacuum deposition equipment net sales growth in 2020, thanks to recovery in customer investment Aiming for network camera growth also in 2020, thanks to enhanced lineup (Billions of yen) Full Year Full Year 2019 2019 2018 % Amount 2020 2019 % Previous Ac
Slide 18: Inventory
Inventory Building up inventory of Medical System and lithography equipment, as sub-segment of Industry & Others, to respond to future sales growth Plan to reduce inventory level of cameras, a sub-segment of Imaging System FY 2018 FY 2019 (Billions of yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Amt. 207.5 209.
Slide 19: Cash Flow (Full Year)
Cash Flow (Full Year) 2019 cash-on-hand maintained at level that provides sufficient liquidity Promote a healthier financial constitution in 2020, improving operating cash flow FY 2020 FY 2019 FY 2018 Projection Actual Actual (Billions of yen) Net cash provided by operating activities 430.0 358.
Slide 20: Sustainability Measures: Major Achievements in 2019
Sustainability Measures Major Achievements in 2019 Realize low-carbon society Achieved 3.4% Lifecycle CO2 emissions per product improvement compared to 2018 (CAGR target 3%) 4.7％ CAGR Improvement 1.0 40％ Total Improvement 0.8 ・Development and sales of energy saving products 0.6 →Approx. 1.6% impro
Slide 21: Supplementary Information
Supplementary Information 20
Slide 22: FY 2019 Operating Profit Analysis (vs FY 2018 Actual)
FY 2019 Operating Profit Analysis (FY 2019 Actual versus FY 2018 Actual) Change in Net Sales, excluding FX impact, for reference Office: -52.4 (Billions of yen) Imaging System: -107.6 Medical System: +10.3 Industry & Others: -81.8 Total: -231.5 FX Details Net Sales: -90.7 Cost of Sales: +18.0 Op. Ex
Slide 23: FY 2019 Operating Profit Analysis (vs Previous Projection)
FY 2019 Operating Profit Analysis (FY 2019 Actual versus FY 2019 Previous Projection) Change in Net Sales, excluding (Billions of yen) FX impact, for reference Office: -6.8 FX Details Imaging System: -21.3 Net Sales: +21.6 Medical System: -15.7 Cost of Sales: -6.0 Industry & Others: -10.1 Op. Expens
Slide 24: Dividend
Dividend （Yen） Regular Dividend Commemorative Dividend 200 Dividend Payout Ratio 160 160 160 150 150 150 10 136.1% 150 108.7% 100 74.4% 71.4% 50 68.4% 0 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Plan 23
Slide 25: New Businesses Sales Composition Ratio
Change in New Businesses Sales Composition Ratio New Businesses Exsiting Businesses 100% 80% 60% 40% 20% 24% 25% 28% 0% FY 2018 FY 2019 FY 2020 Actual Actual Projection 24
Slide 26: Net Sales Growth Rate of Hardware & Non-hardware
Net Sales Growth Rate of Hardware & Non-hardware FY 2020 FY 2019 FY 2018 Full Year 4Q Full Year 4Q Full Year Projection Actual Actual Actual Actual MFDs Hardware +5% -10% -7% -1% -1% JPY Non-hardware 0% -5% -5% -6% -1% Hardware +6% -6% -4% 0% -2% LC Non-hardware +1% -2% -2% -5% -2% LPs Hardware -9%
Slide 27: Color Ratio (MFDs & LPs)
Color Ratio (MFDs & LPs) FY 2020 FY 2019 FY 2018 Full Year 4Q Full Year 4Q Full Year Projection Actual Actual Actual Actual Net Sales 60% 60% 59% 60% 59% MFDs Units 59% 58% 59% 58% 58% Net Sales 51% 51% 52% 51% 51% LPs Units 21% 21% 20% 19% 18% Sales Growth by Monochrome & Color MFDs FY 2020 FY 2019
Slide 28: Interchangeable Lens Digital Camera Ratio; IC Lithography Unit Breakdown
Interchangeable Lens Digital Camera Ratio FY 2020 FY 2019 FY 2018 Full Year 4Q Full Year 4Q Full Year Projection Actual Actual Actual Actual Net Sales 85% 86% 85% 85% 85% Units 65% 64% 62% 60% 61% * Net Sales Includes Interchangeable Lenses IC Lithography Equipment Unit Breakdown by Light Source (Un
Slide 29: 4Q 2019
4Q 2019 28
Slide 30: FY 2019 Financial Results (4Q 2019)
FY 2019 Financial Results (4Q 2019) 4Q 2019 4Q 2018 (Billions of yen) % Change Actual Actual Net Sales 953.5 1,058.3 -9.9% Gross Profit 423.4 489.3 -13.5% (% of Net Sales) 44.4% 46.2% Op. Expenses 370.7 389.7 Op. Profit 52.7 99.6 -47.1% (% of Net Sales) 5.5% 9.4% IBT 51.5 100.0 -48.5% Net Income 32.
Slide 31: FY 2019 Financial Results by Business Unit (4Q 2019)
FY 2019 Financial Results by Business Unit (4Q 2019) 4Q 2019 4Q 2018 (Billions of yen) % Change Actual Actual Office Net Sales 435.3 471.6 -7.7% Op. Profit 40.6 60.7 -33.1% Imaging Net Sales 237.2 287.2 -17.4% System Op. Profit 20.7 42.5 -51.3% Medical Net Sales 110.0 118.2 -6.9% System Op. Profit 7
Slide 32: FY 2019 Operating Profit Analysis (4Q 2019 vs 4Q 2018)
FY 2019 Operating Profit Analysis (4Q 2019 Actual versus 4Q 2018 Actual) FX Details Net Sales: -33.3 Cost of Sales: +8.4 Change in Net Sales, excluding (Billions of yen) Op. Expenses: +11.0 FX impact, for reference Office: -17.9 Imaging System: -34.9 Medical System: -4.3 Industry & Others: -6.5 Tota
Slide 33: Office / Imaging System (4Q 2019)
Office / Imaging System (4Q 2019) Office (Billions of yen) 4Q Net Sales Growth Rate Y/Y Unit Growth Rate Y/Y (Local Currency) 2019 2018 % Actual Actual Change 4Q 2019 4Q 2019 4Q 2019 MFDs LP Actual Actual Actual MFDs 167.8 181.3 -7.5% LPs 156.2 177.3 -11.9% MFDs -3.8% Monochrome +1% Monochrome -16%
Slide 34: Medical System / Industry & Others (4Q 2019)
Medical System / Industry & Others (4Q 2019) Medical System (Billions of yen) 4Q Net Sales Growth Rate Y/Y (Local Currency) 2019 2018 % Actual Actual Change 4Q 2019 Actual Net Sales 110.0 118.2 -6.9% Op. Profit 7.6 8.8 -13.5% Total -3.6% (% of Net Sales) 6.9% 7.5% Industry & Others (Billions of yen)