Slide 1: Canon Inc. Third Quarter 2011 Results
Canon Inc. Third Quarter 2011 Results October 25, 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 assump
Slide 2: Agenda
Agenda 3Q 2011 Results P3 – 5 FY 2011 Projections P6 – 9 Details by Business P10 – 15 Financial Situation P16 – 19 Supplementary Information P20 – 26 October 25, 2011 Canon Inc. 2
Slide 3: 3Q 2011 in Summary
3Q 2011 in Summary External Environment 9 Started to see growing financial instability in Europe and the U.S., but global economy continued its gradual recovery 9 Canon’s markets also remained strong 9 Rapidly deteriorating exchange rate environment Results 9 Normalized product delivery system and m
Slide 4: Summary of Results
Summary of Results 3Q 2011 Actual (Billions of yen) 3Q 2011 3Q 2010 Pct. Change Actual Actual Net sales 916.9 913.2 +0.4% Gross profit 452.5 446.9 +1.3% [% sales] 49.4% 48.9% Op. profit 122.5 104.4 +17.4% [% sales] 13.4% 11.4% Net income attributable to 77.9 68.2 14.2% Canon Inc. [% sales] 8.5% 7.5%
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit 3Q 2011 Actual v. 3Q 2010 Actual (Billions of yen) Sales Op. Profit 3Q 2010 Actual 913.2 104.4 Foreign exchange impact Change in Exchange Rate [net sales, cost of sales, -33.5 -15.6 •1USD: 85.79 to 77.75 yen •1EURO: 110.61 to 109.98 yen expenses] Sales volume impac
Slide 6: Assumptions
Assumptions 2011 Current Projection Average 4Q11 FY11 FY10 Exchange Rate Yen-1USD 77.00 yen 79.41 yen 87.40 yen Yen-1EURO 105.00 yen 110.83 yen 114.97 yen Impact of Exchange Rate Movement (4Q impact given a one yen change) Net sales Operating profit USD 5.2 billion yen 2.4 billion yen EURO 2
Slide 7: Key Points FY 2011
Key Points FY 2011 External Environment 9 Global economy maintains its gradual recovery, despite slower growth in developed countries 9 Global demand in Canon’s markets remains strong 9 The yen stays at high levels 9 Flooding in Thailand Outlook 9 Promote sales expansion, employing tailored strategi
Slide 8: 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 3,650.0 3,706.9 -1.5% Gross profit 1,756.0 1,783.1 -1.5% [% sales] 48.1% 48.1% Op. profit 360.0 387.6 -7.1% [% sales] 9.9% 10.5% Net income attributable to 230.0
Slide 9: 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 (Jul. 25, 2011) 3,780.0 380.0 Change in Exchange Rate Foreign exchange impact •1USD: 80.86 to 79.41 yen -70.9 -38.3 •1EURO: 114.97 to 110.83 yen [net sa
Slide 10: Office
Office 3Q11 Growth rate y/y (Unit base) Copiers Printers 3Q11 Color ratio Copiers Printers 3Q 2011 Actual Color +16% +3% Value base* 54% 44% Monochrome -4% +10% Unit base 33% 13% Total +2% +9% (Billions of yen) Sales *Includes consumables 800 Others Growth rate y/y Other printing devices ( ) Local c
Slide 11: Office
Office FY11 Growth rate y/y (Unit base) Copiers Printers FY11 Color ratio Copiers Printers FY 2011 Projection Color +24% -1% Value base* 54% 43% Monochrome +4% +9% Unit base 34% 13% Total +10% +7% (Billions of yen) Sales *Includes consumables Others Other printing devices 3,000 Color copiers Growth
Slide 12: Consumer
Consumer Growth rate y/y (Unit base) D SLR ratio* 3Q 2011 Actual 3Q11 3Q11 Sales Digital cameras +15% Value base 72% IJP +4% Unit base 29% (Billions of yen) * Percentage of cameras sales 600 Others attributable to SLRs, inter- IJP changeable lenses and related accessories Cameras Growth rate y/y ( )
Slide 13: Consumer
Consumer Growth rate y/y (Unit base) D SLR ratio* FY 2011 Projection FY11 FY11 Sales Digital cameras -3% Value base 71% IJP +6% Unit base 27% (Billions of yen) * Percentage of cameras sales Growth rate y/y ( ) Local currency base attributable to SLRs, inter- changeable lenses and related 2,000 acces
Slide 14: Industry and Others (Litho.Equip.)
Industry and Others (Litho.Equip.) Lithography Equipment (Unit sales) IC Stepper Unit Breakdown by Light Source 3Q 2011 Actual 3Q10 3Q11 3Q10 3Q11 IC 10 11 ArF dry 0 0 (Billions of yen) Sales LCD TTL 16 26 7 18 ArF Immersion 0 0 KrF 2 2 200 Others i-line 8 9 Lithography Equipment Corporate and elimi
Slide 15: Industry and Others (Litho.Equip.)
Industry and Others (Litho.Equip.) Lithography Equipment (Unit sales) IC Stepper Unit Breakdown by Light Source FY 2011 Projection FY10 FY11 FY11 FY10 FY11 FY11 Previous Current Previous Current projection projection projection Projection (Billions of yen) IC 29 46 50 ArF dry 0 0 0 LCD 56 31 28 ArF
Slide 16: Inventories
Inventories (Billions of yen) 800 Amount Turnover (days) 700 52 54 50 49 600 45 46 42 39 518 35 500 479 456 471 427 428 436 400 373 385 300 3QE09 4QE09 1QE10 2QE10 3QE10 4QE10 1QE11 2QE11 3QE11 October 25, 2011 Canon Inc. 16
Slide 17: 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 750 750 144 402 309 241 500 500 260 150 130 247 230 132 744 617 611 510 473 470 250 250 362 370 360 342 341 340
Slide 18: 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) 2.8 2.4 2.5 2.1 2.3 2.1 944 841 795 800 700 679 FYE07 FYE08 FYE09 FYE10 FYE11 FYE11 Current Previous projection projection Note 1: In 2007, 450 billion yen was used to acquire own share
Slide 19: Summary of Results
Summary of Results FY 2011 Actual (Excluding earthquake & Thailand flood effects) (Billions of yen) FY2011 FY2010 Excluding Earthquake earthquake Current & Thailand & Thailand Actual Pct. Change projection flood flood effects effects A B A VS B Net sales 3,650.0 -236.9 3,866.9 3,706.9 +4.9% Gross 1,
Slide 20: Supplementary Information
Supplementary Information October 25, 2011 Canon Inc. 20
Slide 21: 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 Change in Exchange Rate (FY) Foreign exchange impact •1USD: 87.40 to 79.41 yen -169.6 -86.6 •1EURO: 114.97 to 110.83 yen [net sales, cost of sales, ex
Slide 22: Gross Profit Variance Analysis
Gross Profit Variance Analysis 3Q 2011 Actual v. 3Q 2010 Actual (Billions of yen) 3Q11 3Q10 Change (Billions of yen) Gross Profit 452.5 446.9 +5.6 % sales 49.4% 48.9% +0.5 pt. 100 50 33.5 28.8 12.7 5.6 0 -20.3 -15.6 -50 -33.5 Forex Sales Price Forex Cost Earthquake Total change -100 impact volume ch
Slide 23: Operating Profit Variance Analysis
Operating Profit Variance Analysis 3Q 2011 Actual v. 3Q 2010 Actual (Billions of yen) 3Q11 3Q10 Change Op. Profit 122.5 104.4 +18.1 (Billions of yen) % sales 13.4% 11.4% +2.0 pt. 100 50 18.1 5.6 7.3 5.2 0 -50 Total change Change in Change in Total change -100 in gross profit SG&A SG&A in (excluding
Slide 24: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 50 Debt Debt/Total Assets 5% 40 4% 30 27 3% 20 17 2% 14 10 11 10 0.6% 1% 0.4% 0.3% 0.3% 0.4% 0 0% FYE07 FYE08 FYE09 FYE10 3QE11 Supplementary Information October 25, 2011 Canon Inc. 24
Slide 25: Financial Ratios
Financial Ratios (Yen) 1,000 20% 16.5% 800 15% 11.1% 10.8% 9.2% 600 8.7% 10% 7.3% 4.9% 377.59 400 6.3% 5.8% 5% 246.21 3.4% 199.71 191.43 200 106.64 0% 0 -5% FY07 FY08 FY09 FY10 FY11 Current (Attributable to Canon Inc) projection EPS (Basic) ROE ROA Supplementary Information October 25, 2011 Canon In
Slide 26: Trends in Gross Profit Ratio & Exchange Rates
Trends in Gross Profit Ratio & Exchange Rates (Yen) 55% 170 51% 50% 48% 49% 50% 150 45% 130 40% 110 Gross Profit Ratio 35% 90 US$ EURO 30% 70 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY07 FY08 FY09 FY10 FY11 Supplementary Information October 25, 2011 Canon Inc. 26