Canon Inc. Second Quarter 2017 Results

Transcription

1 Canon Inc. Second Quarter 217 Results July 27, 217 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 formed by available information. All statements other than statements of historical fact are statements that could be considered forward-looking statements. When used in this document, words such as anticipate, believe, estimate, expect, intend, may, plan, project or should and similar expressions, as they relate to Canon, are intended to identify forward-looking statements. Many factors could cause the actual results, performance or achievements of Canon to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products or services by Canon s targeted customers, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this presentation. A detailed description of these and other risk factors is included in Canon s annual report on Form 2-F, which is on file with the United States Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. Canon does not intend or assume any obligation to update these forward-looking statements.

2 Agenda 2Q 217 Results P3 6 FY 217 Projections P7 1 Details by Business P11 17 Financial Situation P18 2 Supplementary Information P

3 Key Messages Existing business recovery, New business expansion "Solid progress in business structure transformation" Second quarter results Second consecutive quarter of significant sales and profit growth Raised full-year projection Net sales +3 billion yen and operating profit +6 billion yen Operating profit and net income - Surpassing 3 billion yen and 2 billion yen, respectively 3

4 2Q 217 in Summary Second consecutive quarter of significant sales and profit growth Existing Businesses Trend of recovery continued for laser printers and cameras Sales expansion of lithography equipment New Businesses Continued double-digit growth of network cameras and vacuum deposition equipment for OLED as well as contribution from Toshiba Medical Systems Corporation 4

5 Summary of Results 2Q 217 Actual 2Q 217 2Q 216 Actual Actual Pct. Change Net Sales % Gross Profit % (% Sales) 49.9% 5.3% Op. Profit % (% Sales) 9.7% 8.% Net Income Attributable to Canon Inc % (% Sales) 7.% 6.2% Foreign Exchange Rate Yen 1USD Yen 1EURO

6 Transition in Sales and Op. Profit 2Q 217 Actual v. 2Q 216 Actual Sales Op. Profit 2Q 216 Actual Foreign Exchange Impact (Net Sales, Cost of Sales, Expenses) Sales Volume Impact Office Imaging System -6.7 Medical System Industry and Others Total Others Total Change Q 217 Actual USD: 1EURO: Change in Exchange Rate 18.8 to yen to yen 6

7 Exchange Rate Assumptions 217 Current Projection Average Exchange Rate 2H17 FY17 FY16 Yen-1USD 112. yen yen yen Yen-1EURO 125. yen yen yen Impact of Exchange Rate Movement (2H Impact Given a One Yen Change) Net Sales Operating Profit USD 7.2 billion yen 2.3 billion yen EURO 3.5 billion yen 1.6 billion yen 7

8 Overview of Current Projection Full-year projection "Solid progress in business structure transformation Versus last year Double-digit sales and profit growth Existing businesses - Remains on a path of recovery New businesses - Continue to post significant sales growth Versus previous projection Net sales and operating profit Raised projection by 3 billion yen and 6 billion yen, respectively Improvement in product mix Strict expense control 8

9 Summary of Projected Results FY 217 Current Projection FY 217 FY 216 Pct. Change Current Projection Actual Net Sales 4,5. 3, % Gross Profit 1,954. 1, % (% Sales) 48.2% 49.2% Op. Profit % (% Sales) 8.1% 6.7% Net Income Attributable to Canon Inc % (% Sales) 5.4% 4.4% Foreign Exchange Rate Yen 1USD Yen 1EURO

10 Transition in Sales and Op. Profit FY 217 Current Projection v. FY 217 Previous Projection Sales Op. Profit Previous Projection (Apr. 26, 217) 4, Foreign Exchange Impact (Net Sales, Cost of Sales, Expenses) USD: 1EURO: Change in Exchange Rate to yen to yen Sales Volume Impact Office +17. Imaging System -.1 Medical System +44. Industry and Others Total Others Total Change Current Projection (Jul. 27, 217) 4,

11 Office 2Q 217 Actual Sales Growth rate y/y ( ) Local currency base 6 Monochrome copiers Color copiers 4 Printers Others Office +3.1%(+1.6%) Others -1.%(-2.2%) 2Q17 Growth Rate y/y (Unit Base) Copiers Printers Color +9% +2% Monochrome -4% +1% Total +3% +9% Op. Profit Op. Profit Ratio 2Q17 Color Ratio Copiers Printers Value Base* 58% 52% Unit Base 54% 17% Op. Profit *Includes Consumables Growth rate y/y +17.4% 2 Printers +9.5%(+7.4%) 1.4% 1.% 12.1% 11.9% +2.9%(+1.7%) % %(-5.2%) 2Q16 3Q16 4Q16 1Q17 2Q17 Copier total -.2%(-1.3%) 2Q16 3Q16 4Q16 1Q17 2Q17 11

12 2, 1,5 Office FY 217 Projection Monochrome copiers Printers Sales Growth rate y/y ( ) Local currency base 2,5 1,88 1,836 Color copiers Others Office +3.4%(+1.3%) 1,869 Others +1.8%(-.3%) FY17 Growth Rate y/y (Unit Base) Copiers Printers Color +8% +3% Monochrome -3% +1% Total +3% +1% Op. Profit Op. Profit Ratio FY17 Color Ratio Op. Profit Copiers Growth rate y/y +22.7% Printers Value Base* 59% 51% Unit Base 54% 18% *Includes Consumables 1, Printers +3.6%(+1.7%) 9.4% 9.6% 11.1% %(+4.9%) %(-1.8%) FY16 FY17 FY17 Previous Current Projection Projection Copier total +4.2%(+2.%) FY16 FY17 FY17 Previous Current Projection Projection 12

13 3 2 Imaging System 2Q 217 Actual Growth rate y/y ( ) Local currency base Cameras IJP Others 248 Sales %(-2.5%) 283 Imaging System IJP -2.2%(-3.1%) Growth Rate y/y (Unit Base) Interchangeable Lens Digital Cameras Compact Digital Cameras Op. Profit Op. Profit Ratio 2Q17-5% -8% Total Digital Cameras -6% IJP % Op. Profit Interchangeable Lens Digital Camera Ratio * 2Q17 Value Base 86% Unit Base 57% * Proportion of Total Digital Cameras * Value Base Includes Interchangeable Lenses Growth rate y/y +12.2% 15.% 12.% 15.9% 12.1% 17.2% 1 Cameras -.6%(-1.3%) Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 13

14 Imaging System FY 217 Projection Growth rate y/y ( ) Local currency base 1,6 1,2 Cameras IJP Others 1,95 Sales 1,98 1,119 Imaging System +2.2%(+.%) Growth Rate y/y (Unit Base) Interchangeable Lens Digital Cameras Compact Digital Cameras Op. Profit Op. Profit Ratio FY17-7% -8% Total Digital Cameras -7% IJP +2% Op. Profit Interchangeable Lens Digital Camera Ratio * FY17 Value Base 86% Unit Base 59% * Proportion of Total Digital Cameras * Value Base Includes Interchangeable Lenses 8 IJP +.9%(-1.2%) Growth rate y/y +1.8% 13.2% 14.3% 14.3% 4 Cameras +2.7%(+.4%) FY16 FY17 Previous FY17 Current Projection Projection FY16 FY17 FY17 Previous Current Projection Projection 14

15 Medical System 5 4 2Q 217 Actual & FY 217 Projection Sales Op. Profit 44 Op.Profit Op.Profit Ratio 15.% <Major products> 3 7.5% 1.% CT scanners Aquilion ONE/GENESIS Edition % 5.% Q17 2Q17 FY17 Current Projection 1.2% 1Q17 2Q17 FY17 Current Projection Note : The figures for 1Q17, pertaining to Medical System Business Unit, which was included in "Industry and Others" Business Unit, were reclassified..% Ultrasound diagnostic systems Aplio i-series 15

16 17.5% 1.% 2.5% -5.% Industry and Others 2Q 217 Actual Net Sales Gross Sales (Includes sales among Group businesses) Sales Eliminations (Sales among Group businesses) Growth rate y/y ( ) Local currency base Sales Eliminations Lithography Equipment Others Gross Sales Industry and Others Net Sales +29.1% (+28.2%) Gross Sales +25.% (+24.2%) Gross 172 (Litho.Equip.) +57.4% (+56.1%) Lithography Equipment (Unit Sales) % 2Q16 Op. Profit Op. Profit Ratio 4 3.1% 2Q17 IC FPD 1 14 Op. Profit *Calculation of operating profit ratio includes intersegment sales 3 1.8% IC Lithography Unit Breakdown by Light Source 9 5.4% 2Q % 2Q17 ArF KrF 2 8 i-line 1 11 Growth rate y/y +2,535.5% -5 2Q16 3Q16 4Q16 1Q17 2Q17 Note : The figures for 1Q17, pertaining to Medical System Business Unit, which was included in "Industry and Others" Business Unit, were reclassified. -5 2Q16 3Q16 4Q16 1Q17 2Q17 16

17 1.% 9.% 8.% 7.% 6.% 5.% 4.% 3.% 2.% 1.%.% Industry and Others Net Sales FY 217 Projection 1,6 1,2 8 Growth rate y/y ( ) Local currency base Sales Eliminations Lithography Equipment Others 52 Sales 1, Lithography Equipment (Unit Sales) FY16 Industry and Others Net Sales +24.4% (+23.2%) Gross Sales +21.4% (+2.4%) FY17 FY17 Previous Current Projection Projection IC FPD Op. Profit Op. Profit Ratio *Calculation of operating profit ratio includes intersegment sales IC Lithography Unit Breakdown by Light Source FY16 Op. Profit FY17 FY17 Previous Current Projection Projection ArF KrF i-line Growth rate y/y % 6.5% Gross Sales (Includes sales among Group businesses) Sales Eliminations (Sales among Group businesses) Gross FY16 FY17 FY17 Previous Current Projection Projection Gross 71 (Litho. Equip.) +63.2% (+62.3%) % % 7 FY16 FY17 FY17 Previous Current Projection Projection 17

18 Inventories 8 Amount Turnover (Days) QE15 3QE15 4QE15 1QE16 2QE16 3QE16 4QE16 1QE17 2QE

19 Capital Free Cash Flow Expenditure 1, Increase in PP&E Net Income Attributable to Canon Inc. Depreciation 1, Operating C/F Free C/F Investing C/F FY14 FY15 FY16 FY17 FY17 Previous Current Projection Projection (5) FY14 FY15 FY16 FY17 FY17 Previous Current Projection Projection 19

20 Cash on Hand Cash on Hand (Year-end) 1,5 Cash-on-hand Cash-on-hand (In months of 2nd-half net sales, except FYE17 Previous Projection, which is based on full-year net sales) , FYE13 FYE14 FYE15 FYE16 FYE17 Previous Note : Approx. 5, 15 and 5 billion yen was used to acquire Projection own shares in 213, 214 and 217, respectively. The cumulative amount since 27 is approx. 1.1 trillion yen. FYE17 Current Projection 2

21 Supplementary Information 21

22 Transition in Sales and Operating Profit FY 217 Current Projection v. FY 216 Actual Sales Op. Profit FY 216 Actual 3, Foreign Exchange Impact (Net Sales, Cost of Sales, Expenses) Sales Volume Impact Office Imaging System Medical System Industry and Others Total Others Total Change FY 217 Current Projection 4, USD: 1EURO: Change in Exchange Rate to yen to yen Supplementary Information 22

23 Gross Profit Variance Analysis 2Q 217 Actual v. 2Q 216 Actual 2Q17 2Q16 Change 8 Gross Profit % Sales 49.9% 5.3% -.4pt Forex Impact on Sales Sales Volume Impact Price Change Forex Impact on Costs Cost Reduction Total Change in Gross Profit Supplementary Information 23

24 Operating Profit Variance Analysis 2Q 217 Actual v. 2Q 216 Actual 2Q17 2Q16 Change Op. Profit % Sales 9.7% 8.% +1.7pt Total Change in Gross Profit Change in SG & A (Excluding Forex Impact) Change in SG & A (Forex Impact) Total Change in Operating Profit Supplementary Information 24

25 Interest Bearing Debt 45 Debt Debt/Total Assets % 25.% 2.% 11.9% 12.5% 15.% 1.% 5.% %.%.% FYE13 FYE14 FYE15 FYE16 2QE17.% Supplementary Information 25

26 Financial Ratios (Yen) 9 15% 6 8.4% 8.7% 7.4% 7.9% 1% 3 5.6% % % % 3.1% % % FY13 FY14 FY15 FY16 FY17 Current Projection EPS(Basic) (Attributable to Canon Inc.) ROE ROA % Supplementary Information 26