Slide 1: Canon Inc. FY 2015 Results
Canon Inc. FY 2015 Results January 27, 2016 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 4Q/FY 2015 Results P3 – 6 FY 2016 Projections P7 – 10 Details by Business P11 – 16 (4Q/FY 2015 Results and FY 2016 Projections) Financial Situation P17 – 19 Supplementary Information P20 – 25 January 27, 2016 Canon Inc. 2
Slide 3: FY 2015 in Summary
FY 2015 in Summary External Environment Global economic growth rate – Lowest since the collapse of Lehman Brothers Our markets – Also impacted by further slowdown in emerging markets Results Sales increase – Lower camera sales offset by “Office” and “Industry and Others” Profit decrease – In
Slide 4: Summary of Results
Summary of Results 4Q/FY 2015 Actual (Billions of yen) 4Q FY 2015 2014 Pct. 2015 2014 Pct. Actual Actual Change Actual Actual Change Net Sales 1,042.6 1,059.9 -1.6% 3,800.3 3,727.3 +2.0% Gross Profit 522.8 515.0 +1.5% 1,934.4 1,861.5 +3.9% (% Sales) 50.1% 48.6% 50.9% 49.9% Op. Profit 107.0 98.5 +8.7
Slide 5: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit FY 2015 Actual v. FY 2014 Actual (Billions of yen) FY Sales Op. Profit FY 2014 Actual 3,727.3 363.5 Foreign Exchange Impact Change in Exchange Rate(FY) +146.8 +20.4 •1USD: 106.18 to 121.13 yen (Net Sales, Cost of Sales, Expenses) •1EURO: 140.62 to 134.20 yen
Slide 6: Growth of New Businesses Through Horizontal Expansion and M&A
Growth of New Businesses Through Horizontal Expansion and M&A New Businesses (Trillions of yen) Existing Industry and Others Existing Office Major New Businesses 4 Existing Imaging System 9% 13% 15% Horizontal Expansion Cinema EOS 3 Machine Vision M&A 2 Commercial printing • Océ Network came
Slide 7: Assumptions
Assumptions FY 2016 Projection Average FY16 FY15 Exchange Rate Yen-1USD 120.00 yen 121.13 yen Yen-1EURO 130.00 yen 134.20 yen Impact of Exchange Rate Movement (FY16 Impact Given a One Yen Change) Net Sales Operating Profit USD 14.0 billion yen 4.6 billion yen EURO 6.9 billion yen 2.9 billion
Slide 8: Key Points
Key Points FY 2016 Projection External Environment Global economy – Driven by the U.S., emerging markets unclear Our markets – Remain challenging for some period of time Outlook Sales increase – Driven by B2B, offsetting lower camera sales Profit increase – Cost reduction, improvement in R&D
Slide 9: Summary of Projected Results
Summary of Projected Results FY 2016 Projection (Billions of yen) FY 2016 FY 2015 Pct. Change Projection Actual Net Sales 3,850.0 3,800.3 +1.3% Gross Profit 1,942.5 1,934.4 +0.4% (% Sales) 50.5% 50.9% Op. Profit 360.0 355.2 +1.3% (% Sales) 9.4% 9.3% Net Income Attributable to Canon Inc. 230.0 220.2
Slide 10: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2016 Projection v. FY 2015 Actual (Billions of yen) Sales Op. Profit FY 2015 Actual 3,800.3 355.2 Change in Exchange Rate Foreign Exchange Impact •1USD: 121.13 to 120.00 yen -60.6 -31.0 •1EURO: 134.20 to 130.00 yen (Net Sales, Cost of Sales, Expenses) Sales Volu
Slide 11: Office
Growth Rate y/y (Unit Base) Color Ratio Office Copiers 4Q15 FY15 Printers 4Q15 FY15 Copiers Printers 4Q15 FY15 4Q15 FY15 Color +13% +15% -10% -2% Value Base* 57% 56% 50% 51% 2015 Actual Monochrome -7% -9% -33% -13% Unit Base 48% 46% 18% 17% Total +2% +1% -30% -11% (Billions of yen) 1,000 Sales *Incl
Slide 12: Office
Growth Rate y/y (Unit Base) Color Ratio Office Copiers FY15 FY16(P) Printers FY15 FY16(P) Copiers FY15 FY16(P) Printers FY15 FY16(P) Color +15% +14% -2% +1% Value FY 2016 Projection Monochrome -9% +3% -13% 0% Base* 56% 57% 51% 50% Unit Total +1% +8% -11% 0% 46% 49% 17% 17% Base (P)=Projection *Inclu
Slide 13: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens 4Q15 -5% FY15 -12% Digital Camera Ratio * 4Q15 FY15 Digital Cameras Value Base 83% 83% 2015 Actual Compact Digital -27% -27% Unit Base 47% 46% Cameras * Proportion of Total Digital Cameras -18% -21% (Billions of yen
Slide 14: Imaging System
Growth Rate y/y (Unit Base) Interchangeable Lens Imaging System Interchangeable Lens FY15 -12% FY16(P) -7% Digital Camera Ratio * FY15 FY16(P) Digital Cameras Value Base 83% 85% FY 2016 Projection Compact Digital -27% -24% Unit Base 46% 51% Cameras * Proportion of Total Digital Cameras -21% -16% Tot
Slide 15: Industry and Others
Industry and Others Lithography Equipment (Unit Sales) IC Stepper Unit Breakdown by Light Source 4Q14 FY14 4Q15 FY15 2015 Actual 4Q14 FY14 4Q15 FY15 ArF 0 0 0 0 IC 12 54 23 80 KrF 4 14 8 21 Growth Rate y/y i-line 8 40 15 59 FPD 5 22 15 34 (Billions of yen) 210 Sales ( ) Local Currency Base 15 Sales
Slide 16: Industry and Others
Industry and Others Lithography Equipment IC Stepper Unit Breakdown by Light Source FY 2016 Projection (Unit Sales) ArF FY15 0 FY16(P) 0 FY15 FY16(P) IC 80 86 KrF 21 33 FPD 34 37 i-line 59 53 (P)=Projection (Billions of yen) Growth Rate y/y Sales ( ) Local Currency Base Op. Profit 800 40 15.0% Sales
Slide 17: Inventories
Inventories (Billions of yen) 800 Amount (Billions of yen) 90 Turnover (Days) 700 59 70 58 57 52 53 54 54 50 47 50 591 595 600 569 554 563 550 30 533 528 502 500 10 -10 400 -30 300 -50 4QE13 1QE14 2QE14 3QE14 4QE14 1QE15 2QE15 3QE15 4QE15 January 27, 2016 Canon Inc. 17
Slide 18: Capital Expenditure Free Cash Flow
Capital Free Cash Flow Expenditure (Billions of yen) (Billions of yen) 1,000 1,000 Increase in PP&E Operating C/F Net Income Attributable to Canon Inc. Free C/F Depreciation Investing C/F 750 750 21 500 500 315 250 230 255 220 230 257 584 550 250 250 507 475 454 275 273 285 269 300 264 230 250 189 1
Slide 19: Cash on Hand and Return to Shareholders
Cash on Hand and Return to Shareholders Cash on Hand (Year-end) Dividend 1500 5 200 120.0% Cash-on hand (Billions of yen) Regular Dividend (Yen) Cash-on-hand Commemorative Dividend marking the 75th 110.0% (In months of 2nd-half net sales, except FYE16, 4 Anniversary of the Company's Establishment wh
Slide 20: Supplementary Information
Supplementary Information January 27, 2016 Canon Inc. 20
Slide 21: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2015 Actual v. Projection (Billions of yen) Sales Op. Profit FY 2015 Projection (Oct. 27, 2015) 3,820.0 365.0 Foreign Exchange Impact Change in Exchange Rate +2.8 +2.1 (Net Sales, Cost of Sales, Expenses) •1USD: 120.71 to 121.13 yen •1EURO: 134.82 to 134.20 yen
Slide 22: Gross Profit Variance Analysis
Gross Profit Variance Analysis 4Q 2015 Actual v. 4Q 2014 Actual (Billions of yen) 4Q15 4Q14 Change (Billions of yen) Gross Profit 522.8 515.0 +7.8 % Sales 50.1% 48.6% +1.5pt. 50 16.8 11.3 7.8 0 -6.6 -7.0 -6.7 -50 Forex Sales Price Forex Cost Total Impact Volume Change Impact Reduction Change on Impa
Slide 23: Operating Profit Variance Analysis
Operating Profit Variance Analysis 4Q 2015 Actual v. 4Q 2014 Actual (Billions of yen) 4Q15 4Q14 Change Op. Profit 107.0 98.5 +8.5 (Billions of yen) % Sales 10.3% 9.3% +1.0pt. 50 7.8 8.5 3.0 0 -2.3 -50 Total Change in Change in Total Change in SG & A SG & A Change in Gross Profit (Excluding (Forex Im
Slide 24: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) 50 5.0% Debt Debt/Total Assets 40 4.0% 30 3.0% 20 2.0% 12 10 4 1.0% 3 2 0.3% 0.1% 2 0.1% 0.0% 0.0% 0 0.0% FYE11 FYE12 FYE13 FYE14 FYE15 Supplementary Information January 27, 2016 Canon Inc. 24
Slide 25: Financial Ratios
Financial Ratios (Yen) 900 15% 600 8.4% 10% 8.7% 8.7% 7.4% 7.7% 5.7% 5.6% 5.9% 5.0% 5.1% 300 5% 229.03 210.61 191.34 200.78 201.65 0 0% FY12 FY13 FY14 FY15 FY16 Projection EPS(Basic) ROE ROA (Attributable to Canon Inc.) Supplementary Information January 27, 2016 Canon Inc. 25