Canon Inc. Second Quarter 2009 Results

Transcription

1 Canon Inc. Second Quarter 29 Results July 28, 29 Masahiro Osawa Managing Director, Group Executive Finance and Accounting Headquarters 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. July 28, 29 Canon Inc.

2 Agenda 2Q 29 Results P3 6 FY 29 Projections P7 1 Details by Business P11 18 Capital Expenditure & Cash Flow P19 2 Supplementary Information P21 26 (LBP: Laser Beam Printers, IJP: Inkjet Printers, SPE: Semiconductor Production Equipment) July 28, 29 Canon Inc. 2

3 2Q 29 in Summary External Environment Continued economic slowdown and strong yen Results Lessened pace of decline in sales and operating profit compared with the previous quarter Achieved more than doubled the OP of first quarter, steadily improving OP ratio Progress in improved management quality Achieved significant expense reduction Maintained selling prices through timely launch of new products Made progress in inventory reduction activities July 28, 29 Canon Inc. 3

4 Summary of Results 2Q&1H 29 Actual (For reference) Pct. Change 29 Actual % Sales Actual % Sales Actual (excluding forex impact) Actual % Sales 2Q Net sales , % 866. Gross profit % % -36.2% % Op. profit % % -72.% % Net income attributable to % % -85.5% Canon Inc. Yen-1USD Yen-1EURO H Net sales , % Gross profit % 1, % -38.1% % Op. profit % % -8.4% % Net income attributable to % % -84.5% Canon Inc. Yen-1USD Yen-1EURO July 28, 29 Canon Inc. 4

5 Transition in Sales and Op. Profit 2Q 29 Actual v. 2Q 28 Actual Sales Op. Profit 2Q 28 Actual 1, Foreign exchange impact [net sales, cost of sales, expenses] Sales volume impact Office Imaging Products Computer Peripherals Business Information Products -2.3 Cameras Optical and Other Products Total Others Total Change Q 29 Actual USD: 1EURO: Change in Exchange Rate to yen to yen July 28, 29 Canon Inc. 5

6 Expense & Inventory Situation Expenses Inventory Operating expenses Bil. Yen reduction Amount Turnover (days) Bil. Yen reduction Q8 2Q8 3Q8 4Q8 1Q9 2Q9 3 '7 '8 '8 '8 '8 '9 '9 Dec. Mar. Jun. Sep. Dec. Mar. Jun. end end end end end end end July 28, 29 Canon Inc. 6

7 Assumptions 29 Current Projection Average Exchange Rate 2H9 FY9 FY8 Yen-1USD 95. yen yen yen Yen-1EURO 13. yen yen yen Impact of Exchange Rate Movement (2H impact given a one yen change) Net sales Operating profit USD 7.7 billion yen 4.2 billion yen EURO 3.1 billion yen 2.3 billion yen July 28, 29 Canon Inc. 7

8 Key Points FY 29 Assumptions Challenging market situation remains, full economic recovery not until next year Yen appreciation continues Projections Exceed previous for operating profit Promote improved management quality Pursue more thorough expense reduction Launch strategic and competitive products in a timely manner Promote inventory reduction activities for SCM enhancement July 28, 29 Canon Inc. 8

9 Summary of Projected Results FY 29 Current Projection FY 29 FY 29 FY 28 Pct. change Current Previous Actual (For reference) Previous Actual FY 29 Current (excluding forex impact) Net sales 3,2. 3,33. 4, % -21.8% 3,443.5 Gross profit 1,41. 1,45. 1, % -27.2% 1,614.8 [% sales] 44.1% 43.5% 47.3% 46.9% Op. profit % -61.7% [% sales] 5.9% 5.4% 12.1% 9.7% Net income attributable to Canon Inc % -64.4% [% sales] 3.4% 3.3% 7.6% Foreign exchange rate Yen 1USD Yen 1EURO July 28, 29 Canon Inc. 9

10 Transition in Sales and Op. Profit FY 29 Current Projection v. FY 29 Previous Projection FY 29 Sales Op. Profit Previous Projection (April. 3, 29) 3, Foreign exchange impact [net sales, cost of sales, expenses] Sales volume impact Office Imaging Products Computer Peripherals Business Information Products -4.1 Cameras Optical and Other Products Total Others Total Change Current Projection (July. 28, 29) 3, USD: 1EURO: Change in Exchange Rate to yen to yen July 28, 29 Canon Inc. 1

11 Sales Op. Profit Business Machines 2Q 29 Actual / FY 29 Projection Q 2Q8 2.1% 14 2Q8 Growth rate y/y ( ) Local currency base -3.3%(-23.6%) 486 2Q9 OP ratio 14.3% 11.3% Growth rate y/y -6.6% 55 2Q9 3, 2, 1, ,66 2.5% 545 FY 2,152 2,33 FY8 FY9 FY9 Previous 18% OP ratio 13.6% 16% 13.7% FY8 FY9 FY9 Previous -23.6%(-17.2%) Current Current -49.% = OP ratio in local currency basis July 28, 29 Canon Inc. 11

12 Office Imaging Products 2Q 29 Actual / FY 29 Projection Growth rate y/y ( ) Local currency base Others Color Monochrome 312 2Q8 Sales -3.6%(-23.1%) %(-22.6%) -29.%(-19.9%) -33.5%(-26.%) 2Q9 2, 1,5 1, 5 1, %(-2.6%) %(-11.9%) -27.3%(-19.6%) -32.8%(-26.%) FY8 FY9 FY9 Previous Current Growth rate y/y (Unit base) Copying machines 2Q July 28, 29 Canon Inc. FY Color -27% -16% Monochrome -35% -24% Total -33% -22% Color ratio (Copying machines) Value base* Unit base 2Q FY 49% 49% 27% 27% Calculated on a post reclassification basis *Includes consumables 12

13 New Products Enhanced coordination with IT systems Entry to Light Production market TCO reduction C551 :51ppm C551F:51ppm C545 :45ppm C545F:45ppm C5 series C535 :35ppm C535F:35ppm C53 :3ppm C53F:3ppm C7 series color/mono C765 :6/65ppm C755 :55/55ppm C9PRO series color/mono C975 :7/75ppm C965 :6/65ppm New Lineup : 3 Series 12 Models * Same speed for color & monochrome 13 July 28, 29 Canon Inc.

14 Computer Peripherals 2Q 29 Actual / FY 29 Projection Others IJP LBP 364 Sales Growth rate y/y ( ) Local currency base -3.9%(-24.8%) %(-6.7%) 2, 1,5 1, 1, %(-15.2%) 1,162 1, %(-2.6%) Growth rate y/y (Unit base) LBP 2Q FY Color -57% -4% Monochrome -61% -46% Total -6% -45% Color ratio (LBP) Value base* Unit base 2Q FY 46% 45% 17% 16% %(-31.3%) 2Q8 2Q9 (LBP: Laser Beam Printers, IJP: Inkjet Printers) -25.3%(-19.7%) FY8 FY9 FY9 Previous Current *Includes consumables Growth rate y/y (Unit base) 2Q July 28, 29 Canon Inc. FY IJP +2% -1% 14

15 Cameras Sales Op. Profit 2Q 29 Actual / FY 29 Projection Q 2Q8 21.5% 67 2Q8 Growth rate y/y ( ) Local currency base 246 2Q9 OP ratio = OP ratio in local currency basis -2.7%(-11.3%) 21.8% % Growth rate y/y 2Q9-42.% 1,5 1, , FY8 FY9 FY9 18.% 188 FY Previous OP ratio 15% 8.7% %(-4.7%) 16% 1.7% % FY8 FY9 FY9 Previous Current Current July 28, 29 Canon Inc. 15

16 Cameras 2Q 29 Actual / FY 29 Projection Video cameras Digital cameras Interchangeable lenses and others 31 Sales Growth rate y/y ( ) Local currency base -2.7%(-11.3%) 2, 1, ,42 1, -17.1%(-7.1%) -41.8%(-34.%) %(-4.7%) %(-5.8%) -8.9%(-.2%) Growth rate y/y (Unit base) Digital cameras 2Q FY Compact -17% -8% SLR +11% +5% Total -13% -6% D SLR ratio* Value base Unit base 2Q FY 51% 49% 19% 17% * Percentage of digital cameras sales attributable to SLRs 2Q8 2Q9-25.%(-17.2%) FY8 FY9 FY9-3.7%(-24.5%) Previous Current July 28, 29 Canon Inc. 16

17 Optical and Other Products Sales Op. Profit 2Q 29 Actual / FY 29 Projection Q 2Q8 62 2Q9.1% -6 2Q8 Growth rate y/y ( ) Local currency base OP ratio = OP ratio in local currency basis -37.2%(-33.9%) -4.6% -5.8% 2Q FY FY8 FY9 FY9 Previous OP ratio -33.8%(-3.8%) % -6% -7.2% -5.9% -6.8% FY8 FY9 FY9 Previous Current Current July 28, 29 Canon Inc. 17

18 Optical and Other Products 2Q 29 Actual / FY 29 Projection Others SPE Sales Growth rate y/y ( ) Local currency base IC Stepper Unit Breakdown by Light Source %(-33.9%) %(-16.%) 2Q9 ArF Immersion KrF i-line %(-3.8%) %(-8.4%) IC Stepper Unit Breakdown by Light Source FY9 ArF Immersion 2 KrF 2 i-line 6 2Q8 2Q9 SPE (Unit sales) -54.7%(-53.8%) 2Q8 2Q9 IC 26 2 LCD 17 1 TTL (SPE: Semiconductor Production Equipment) FY8 FY9 FY9 Previous SPE (Unit sales) FY8 Current -58.7%(-57.5%) FY9 Previous Projection FY9 Current Projection IC LCD TTL July 28, 29 Canon Inc. 18

19 Capital Expenditure Free Cash Flow 1, Increase in PP&E Net income attributable to Canon Inc. Depreciation 1, Operating C/F Free C/F Investing C/F FY6 FY7 FY8 FY9 Projection FY6 FY7 FY8 FY9 Projection July 28, 29 Canon Inc. 19

20 Cash on Hand ,156 1, Cash-on-hand Cash-on-hand (Months of 2nd-Half net sales) FYE5 FYE6 FYE7 FYE8 FYE9 Projection Note: In 27, 45 billion yen was used to acquire own share. In 28, 1 billion yen. July 28, 29 Canon Inc. 2

21 Supplementary Information July 28, 29 Canon Inc. 21

22 Transition in Sales and Operating Profit FY 29 Current Projection v. FY 28 Actual Supplementary Information Sales Op. Profit FY 28 Actual 4, Foreign exchange impact [net sales, cost of sales, expenses] Sales volume impact Office Imaging Products Computer Peripherals Business Information Products -5.7 Cameras Optical and Other Products Total Others Total Change FY 29 Current 3, Change in Exchange Rate (FY) 1USD: 1EURO: to yen to yen July 28, 29 Canon Inc. 22

23 Gross Profit Variance Analysis 2Q 29 Actual v. 2Q 28 Actual 1 2Q9 2Q8 Change Gross Profit % sales 43.5% 49.% -5.5 pt Forex impact on sales Sales volume impact Price change Forex impact on costs Cost reduction Total change in gross profit Supplementary Information July 28, 29 Canon Inc. 23

24 Operating Profit Variance Analysis 2Q 29 Actual v. 2Q 28 Actual 2Q9 2Q8 Change 1 5 Op. Profit % sales 5.7% 14.5% -8.8 pt Total change in gross profit Change in Change in SG&A SG&A forex impact (excluding forex impact) Total change in operating profit Supplementary Information July 28, 29 Canon Inc. 24

25 Interest Bearing Debt 5 Debt Debt/Total Assets 5% 4 4% % 2 1.8%.7%.6% %.3% 2% 1% FYE5 FYE6 FYE7 FYE8 2QE9 % Supplementary Information July 28, 29 Canon Inc. 25

26 Financial Ratios (Yen) 1, 16.8% 16.% 16.3% 16.5% 2% % 1.1% 1.6% 1.8% 11.1% 7.3% 15% 1% % 2.8% % % FY4 FY5 FY6 FY7 FY8 FY9 EPS (Basic) ROE ROA (Attributable to Canon Inc) Projection -5% * EPS (Basic) has been adjusted to reflect a 3-for-2 forward stock split (effective date July 1, 26) Supplementary Information July 28, 29 Canon Inc. 26