Slide 1: Canon Inc. FY 2010 Results
Canon Inc. FY 2010 Results January 27, 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 assumptions forme
Slide 2: Agenda
Agenda 4Q/FY 2010 Results P3 – 5 FY 2011 Projections P6 – 9 Details by Business P10 – 17 (4Q/FY 2010 Results and FY 2011 Projections) Financial Situation P18 – 20 Supplementary Information P21 – 26 Jan. 27, 2011 Canon Inc. 2
Slide 3: FY 2010 in Summary
FY 2010 in Summary External Environment Overcame global economic crisis, heading toward economic recovery Canon related markets remained strong, exchange rate environment became more challenging Targets at the Beginning of the Year “First year in a new era of growth,” 7.5% net sales growth, mo
Slide 4: Summary of Results
Summary of Results 4Q/FY 2010 Actual (Billions of yen) (For Reference) 2010 2010 2009 Pct. Change (excluding effects of new consolidation) Actual % Sales Actual % Sales Actual Actual % Sales Net sales 1,067.9 954.1 +11.9% 966.3 (+1.3%) Gross profit 492.2 46.1% 433.8 45.5% +13.5% 429.0 44.4% Op. prof
Slide 5: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2010 Actual v. Projection (Billions of yen) Sales Op. Profit FY 2010 Projection (Oct. 27, 2010) 3,710.0 390.0 Change in Exchange Rate Foreign exchange impact •1USD: +3.8 +3.0 86.69 to 87.40 yen [net sales, cost of sales, expenses] •1EURO: 116.32 to 114.97 yen Sa
Slide 6: Assumptions
Assumptions FY 2011 Projection Average FY11 FY10 Exchange Rate Yen-1USD 85.00 yen 87.40 yen Yen-1EURO 110.00 yen 114.97 yen Impact of Exchange Rate Movement (FY11 impact given a one yen change) Net sales Operating profit USD 19.4 billion yen 10.1 billion yen EURO 10.4 billion yen 5.8 billion
Slide 7: Key Points
Key Points FY 2011 Projection External Environment Gradual global economy recovery Yen remains around current level, gradually weakening towards year- end Performance Outlook 2011 – a year for building a foundation to post results in 2012 that exceed our record of 2007 Expand market share and
Slide 8: Summary of Projected Results
Summary of Projected Results FY 2011 Projection (Billions of yen) FY 2011 FY 2010 Projection Actual Pct. change Net sales 4,100.0 3,706.9 +10.6% Gross profit 1,970.0 1,783.1 +10.5% [% sales] 48.0% 48.1% Op. profit 470.0 387.6 +21.3% [% sales] 11.5% 10.5% Net income 310.0 246.6 +25.7% attributable to
Slide 9: Transition in Sales and Op. Profit
Transition in Sales and Op. Profit FY 2011 Projection v. FY 2010 Actual (Billions of yen) Sales Op. Profit FY 2010 Actual 3,706.9 387.6 Change in Exchange Rate Foreign exchange impact -102.5 -52.9 •1USD: 87.40 to 85.00 yen [net sales, cost of sales, expenses] •1EURO: 114.97 to 110.00 yen Sales volum
Slide 10: Office
Office Sales/Op. Profit (Billions of yen) Net Sales (Billions of yen) Growth rate y/y Operating Profit (Billions of yen) ( ) Local currency base Operating Profit Ratio +18.1%(+26.3%) 17.3% 17.6% 16.1% 14.5% 15.1% QTR 12.7% 522 549 10.6% 465 507 -24.1% 404 409 379 11.1% Excluding new consolidation ef
Slide 11: Office (Copiers)
Office (Copiers) 2010 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 1,984 1,987 522 507 2,000 465 409 1,645 400 379 398 404 1,500 1,000 200 +1.6%(+11.0%) 500 +6.0%(+12.6%)
Slide 12: Office (Other Printing Devices)
Office (Other Printing Devices) 2010 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 1,984 1,987 522 507 2,000 465 409 1,645 400 379 398 404 1,500 +7.4%(+10.8%) -3.8%(+4.7%)
Slide 13: Consumer
Consumer Sales/Op. Profit Net Sales (Billions of yen) Operating Profit (Billions of yen) Growth rate y/y Operating Profit Ratio ( ) Local currency base 18.2% 18.4% 18.1% 16.4% 16.3% 15.8% -0.1%(+9.2%) 11.8% QTR 413 412 7.3% 364 314 332 290 -13.5% 325 242 75 67 65 52 59 39 47 18 1Q09 2Q09 3Q09 4Q09 1
Slide 14: Consumer (Cameras)
Consumer (Cameras) FY 2010 Actual / FY 2011 Projection Sales (Billions of yen) Growth rate y/y ( ) Local currency base 2,000 500 Others IJP Cameras 413 412 1,535 400 1,500 1,391 1,391 364 1,301 332 314 325 300 290 242 1,000 +11.0%(+14.1%) 200 +10.4%(+18.6%) 500 100 +2.9%(+13.2%) 0 0 1Q09 2Q09 3Q09 4
Slide 15: Consumer (IJP)
Consumer (IJP) FY 2010 Actual / FY 2011 Projection Sales (Billions of yen) Growth rate y/y ( ) Local currency base 2,000 500 Others IJP Cameras 413 412 1,535 400 1,500 1,391 1,391 364 1,301 332 314 325 -2.6%(+4.7%) +10.7%(+13.7%) 300 290 +2.5%(+8.3%) 242 1,000 200 500 100 0 0 1Q09 2Q09 3Q09 4Q09 1Q1
Slide 16: Industry and Others
Industry and Others Sales/Op. Profit (Billions of yen) Growth rate y/y ( ) Local currency base Net Sales 109 Net Sales Gross +36.1%(+39.0%) 86 84 Sales 80 69 67 Gross Sales (Includes 59 60 +27.7%(+29.9%) sales 132 QTR among Group 103 109 110 86 85 83 82 business Sales 4 Elimination -17 -16 -18 -8 -2
Slide 17: Industry and Others (Litho.Equip.)
Industry and Others (Litho.Equip.) FY2010 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 345 338 109 400 275 80 86 84 100 67 60 69 59 200 50 +42.7%(+44.1%) -4.0%(-3.
Slide 18: Inventories
Inventories (Billions of yen) 800 Amount Turnover (days) 700 54 52 Excluding 600 47 50 49 45 46 effects of new consolidation 39 507 500 45 36 500 44 471 456 35 424 427 428 400 385 373 300 4QE08 1QE09 2QE09 3QE09 4QE09 1QE10 2QE10 3QE10 4QE10 Jan. 27, 2011 Canon Inc. 18
Slide 19: 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 1,000 Net income attributable to Canon Inc. Free C/F Depreciation Investing C/F 750 750 144 402 230 335 309 241 500 310 500 245 247 132 744 675 625 617 611 473 250 250 395 362 370 341 342 340
Slide 20: Cash on Hand and Return to Shareholders
Cash on Hand and Return to Shareholders Cash on Hand (Year-end) Dividend (Billions of yen) Cash on hand Dividend per share (Yen) Cash on hand (In months of 2nd-half net sales, except FYE11, Payout ratio 103.1% which is based on full-year net sales) (Consolidated basis) 2.8 2.7 2.4 2.5 2.1 930 944 84
Slide 21: Supplementary Information
Supplementary Information Jan. 27, 2011 Canon Inc. 21
Slide 22: Transition in Sales and Operating Profit
Transition in Sales and Operating Profit 4Q/FY 2010 Actual v. 4Q/FY 2009 Actual (Billions of yen) 4Q FY Sales Op. Profit Sales Op. Profit 2009 Actual 954.1 92.1 3,209.2 217.1 Foreign exchange impact [net sales, cost of sales, expenses] -71.8 -46.4 -193.9 -127.4 Change in Exchange Rate (4Q) Sales vol
Slide 23: Gross Profit Variance Analysis
Gross Profit Variance Analysis 4Q 2010 Actual v. 4Q 2009Actual 4Q10 4Q09 Change (Billions of yen) Gross Profit 492.2 433.8 +58.4 % sales 46.1% 45.5% +0.6 pt. 100 63.2 58.4 48.8 48.2 50 9.6 0 -50 -39.6 -71.8 -100 Forex New Total Sales Price Forex Cost -150 impact volume change impact reduction consol
Slide 24: Operating Profit Variance Analysis
Operating Profit Variance Analysis 4Q 2010 Actual v. 4Q 2009 Actual 4Q10 4Q09 Change Op. Profit 82.8 92.1 -9.3 (Billions of yen) % sales 7.8% 9.7% -1.9 pt. 100 58.4 50 15.8 0 -12.2 -9.3 -50 -71.3 Total change in Change in Change in SG&A New Total change in -100 gross profit SG&A forex impact consoli
Slide 25: Interest Bearing Debt
Interest Bearing Debt (Billions of yen) Debt 50 5% Debt/Total Assets 40 4% 31 30 27 3% 20 2% 14 10 11 10 0.7% 0.6% 1% 0.4% 0.3% 0.3% 0 0% FYE06 FYE07 FYE08 FYE09 FYE10 Supplementary Information Jan. 27, 2011 Canon Inc. 25
Slide 26: Financial Ratios
Financial Ratios (Yen) 1,000 20% 16.3% 16.5% 800 15% 11.1% 11.3% 10.6% 10.8% 9.2% 600 10% 7.3% 4.9% 7.6% 377.59 400 341.95 6.3% 5% 246.21 3.4% 252.35 199.71 200 106.64 0% 0 -5% FY06 FY07 FY08 FY09 FY10 FY11 Projection EPS (Basic) ROE ROA (Attributable to Canon Inc.) * EPS (Basic) has been adjusted t