Canon Inc. FY 212 Results January 3, 213 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.
Agenda 4Q/FY 212 Results P3 5 FY 213 s P6 9 Details by Business (4Q/FY 212 Results and FY 213 s) P1 15 Financial Situation P16 18 Supplementary Information P19 24 2
FY 212 in Summary External Environment Global economic slowdown due to Europe s debt crisis Yen s appreciation remains at a historically high level Results Posted net sales and profits decrease Strengthen business structure Build solid base for growth Sustained competitive product advantage through new product launches Maintained or improved market share of all core products Firmly maintained healthy financial constitution Healthy level of cash-on-hand (2.3 months of net sales) 3
Summary of Results 4Q/FY 212 Actual 4Q FY 212 211 Pct. 212 211 Pct. Actual Actual Change Actual Actual Change Net Sales 951.4 964.8-1.4% 3,479.8 3,557.4-2.2% Gross Profit 432.4 459.5-5.9% 1,65. 1,736.8-5.% (% Sales) 45.4% 47.6% 47.4% 48.8% Op. Profit 77.7 94.6-17.9% 323.9 378.1-14.3% (% Sales) 8.2% 9.8% 9.3% 1.6% Net Income Attributable to Canon Inc. 61.2 61.4 -.4% 224.6 248.6-9.7% (% Sales) 6.4% 6.4% 6.5% 7.% Foreign Exchange Rate Yen 1USD 81.26 77.4 79.96 79.55 Yen 1EURO 15.31 14.22 12.8 11.72 4
Transition in Sales and Op. Profit FY 212 Actual v. Sales Op. Profit FY 212 (Oct. 25, 212) 3,532. 356. Foreign Exchange Impact (Net Sales, Cost of Sales, Expenses) Sales Volume Impact Office -2.2 Imaging System -65.5 Industry and Others -1.6 +36.9 +19.6 Total -96.3-68.6 Others +7.2 +16.9 Total Change -52.2-32.1 FY 212 Actual 3,479.8 323.9 1USD: 1EURO: Change in Exchange Rate 79.8 to 79.96 yen 11.3 to 12.8 yen 5
Assumptions FY 213 Average Exchange Rate FY13 Yen-1USD 85. yen 79.96 yen Yen-1EURO 115. yen 12.8 yen Impact of Exchange Rate Movement (FY13 Impact Given a One Yen Change) Net Sales Operating Profit USD 19.7 billion yen 7.7 billion yen EURO 8.6 billion yen 4.6 billion yen 6
Key Points FY 213 External Environment Strengthening trend of global economic recovery from the second half of the year Outlook Return to path of growth in line with recovery of related markets Expand sales, leveraging competitive product advantage Flexibly and strategically invest in sales expansion and development Achieve net sales and profit increase 7
Summary of Projected Results FY 213 FY 213 FY 212 Actual Pct. Change Net Sales 3,81. 3,479.8 +9.5% Gross Profit 1,849.8 1,65. +12.1% (% Sales) 48.6% 47.4% Op. Profit 41. 323.9 +26.6% (% Sales) 1.8% 9.3% Net Income Attributable to Canon Inc. 255. 224.6 +13.6% (% Sales) 6.7% 6.5% Foreign Exchange Rate Yen 1USD 85. 79.96 Yen 1EURO 115. 12.8 8
Transition in Sales and Op. Profit FY 213 v. FY 212 Actual Sales Op. Profit FY 212 Actual 3,479.8 323.9 Foreign Exchange Impact (Net Sales, Cost of Sales, Expenses) Sales Volume Impact Office +7.7 Imaging System +12.8 Industry and Others +15.8 +22.9 +19.2 Total +27.3 +32.9 Others -8. -56. Total Change +33.2 +86.1 FY 213 (Jan. 3, 213) 3,81. 41. 1USD: 1EURO: Change in Exchange Rate 79.96 to 85. yen 12.8 to 115. yen 9
8 4Q 6 4 2 3, FY 2,5 2, 1,5 1, 5 Office 212 Actual Sales Monochrome Copiers Printers 498 Color Copiers Others 4Q11 1Q12 2Q12 3Q12 4Q12 1,918 FY11 438 454 1,763 49 456 1,758 (Unit Base) Office Total -8.4%(-11.2%) Printers -14.9%(-18.3%) -4.5%(-6.6%) -.3%(-2.6%) Copier Total -2.6%(-4.8%) Office Total -8.4%(-6.6%) Printers -15.2%(-14.8%) -.%(+2.7%) -1.3%(+.8%) Copier Total -.6%(+1.8%) Copiers ( ) Local Currency Base 13.8% 69 Printers 4Q12 4Q12 Color -6% +8% -32% -6% Monochrome -6% +4% -21% -17% Total -6% +5% -22% -15% 12.1% 53 Color Ratio Op. Profit Op. Profit Ratio Copiers Printers 4Q12 4Q12 Value Base* 55% 54% 46% 46% Unit Base 36% 34% 12% 14% 12.8% 58 Op. Profit 1.1% 41-25.3% 11.2% 4Q11 1Q12 2Q12 3Q12 4Q12 13.5% 259 FY11 11.3% 11.6% 2 24 *Includes Consumables 51-21.5% 1
3, 2,5 2, 1,5 1, 5 Office FY 213 Sales Monochrome Copiers Printers 1,918 Color Copiers Others 1,758 ( ) Local Currency Base 1,893 FY11 FY13 Office Total +7.7%(+2.2%) Printers +4.4%(+.%) +8.6%(+2.3%) +9.5%(+3.4%) Copier Total +9.%(+2.8%) Op. Profit Op. Profit Ratio 13.5% 259 11.6% 24 Op. Profit +11.6% 12.% 227 FY11 FY13 (Unit Base) Copiers FY13 Printers FY13 Color +8% +2% -6% +16% Monochrome +4% +5% -17% +9% Total +5% +1% -15% +1% Color Ratio Copiers FY13 Printers FY13 Value Base* 54% 54% 46% 46% Unit Base 34% 38% 14% 14% *Includes Consumables 11
6 4Q 4 2 Imaging System 212 Actual Sales 373 Cameras IJP Others 33 37 322 ( ) Local Currency Base Imaging System +1.2%(+7.%) 411 IJP +13.5%(+11.5%) Cameras +5.7%(+2.3%) (Unit Base) Interchangeable Lens Digital Cameras Compact Digital Cameras 13.7% 51 4Q12 Op. Profit Op. Profit Ratio 15.4% 15.1% 47 +3% +14% -6% -2% Total Digital Cameras -3% +2% IJP +1% +2% Interchangeable Lens Digital Camera Ratio * 16.3% 4Q12 13.4% 56 53 55 Value Base 77% 76% Unit Base 32% 31% * Proportion of Total Digital Cameras * Value Base Includes Interchangeable Lenses Op. Profit +8.% 2,5 FY 2, 1,5 1, 4Q11 1Q12 2Q12 3Q12 4Q12 1,445 1,46 1,312 Imaging System +7.2%(+9.%) IJP -1.%(+.9%) 4Q11 1Q12 2Q12 3Q12 4Q12 -.5% 16.1% 16.9% 15.% 5 Cameras +6.8%(+8.6%) 211 244 21 FY11 FY11 12
2,5 2, 1,5 1, 5 Imaging System FY 213 Sales Cameras IJP Others 1,312 1,46 ( ) Local Currency Base 1,579 Imaging System +12.3%(+5.3%) IJP +1.%(+4.1%) Cameras +14.4%(+6.9%) Op. Profit Op. Profit Ratio 16.1% 15.% 211 21 Op. Profit +35.5% 18.% 285 FY11 FY13 FY11 FY13 (Unit Base) Interchangeable Lens Digital Cameras Compact Digital Cameras FY13 +14% +12% -2% -7% Total Digital Cameras +2% -1% IJP +2% +2% Interchangeable Lens Digital Camera Ratio * FY13 Value Base 76% 8% Unit Base 31% 35% * Proportion of Total Digital Cameras * Value Base Includes Interchangeable Lenses 13
2.% 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% -2.% -4.% -6.% -8.% -1.% 25.% 2.% 15.% 1.% 5.%.% -5.% -1.% 4Q Net Sales Gross Sales (Includes sales among Group businesses) Sales 3 Eliminations (Sales among Group businesses) -3 6 FY Net Sales Gross Sales (Includes sales among Group businesses) Sales Eliminations (Sales among Group businesses) Industry and Others 18 212 Actual 15 12 9 6 5 4 3 2 1-1 Sales Sales Eliminations Others 95 89 84 3 19 22 13 9-19 -2-21 -22-2 339 Gross 352 345 421 82 64 63-87 -86-84 FY11 Gross 114 ( ) Local Currency Base 91 Lithography Equipment 77 4Q11 1Q12 2Q12 3Q12 4Q12 334 331 77 71 8 Lithography Equipment (Unit Sales) 323 86 98 4Q11 FY11 4Q12 IC 22 52 6 46 FPD 11 25 1 16 2 Industry and Others Net Sales -8.9%(-9.9%) 1 Gross Sales -6.4%(-7.3%) Gross 17 (Litho.Equip.) -5-7.%(-7.8%) 5 Industry and Others Net Sales -3.2%(-2.9%) Gross Sales -3.1%(-2.9%) Gross 48 (Litho.Equip.) -22.8%(-22.8%) 25 15 5-1 4 3 2 1-1 Op. Profit Op. Profit Ratio 3.3% 3.6% 4 4 IC Stepper Unit Breakdown by Light Source 6.4% 4Q11 FY11 4Q12 ArF KrF 3 7 3 i-line 19 45 6 43 5.4% 6 5-9 -8.9% 4Q11 1Q12 2Q12 3Q12 4Q12 5.8% 24 FY11 2.5% 1 Op. Profit *Calculation of operating profit ratio includes inter-segment sales -75.7% 1.4% 6 14
25.% 2.% 15.% 1.% 5.%.% -5.% Net Sales Gross Sales (Includes sales among Group businesses) Sales Eliminations (Sales among Group businesses) Industry and Others FY 213 6 4 2-2 Sales Sales Eliminations Others 334 323 339 Gross 345 421 Lithography Equipment 366 82 63 75-87 -84-95 FY11 FY13 ( ) Local Currency Base Industry and Others 5 Net Sales 346 +7.%(+5.%) 4 Gross Sales +8.1(+6.5%) Gross 441 (Litho.Equip.) 1 +19.5%(+18.9%) 3 2-1 5.8% 24 Op. Profit Op. Profit Ratio 1.4% 6 *Calculation of operating profit ratio includes inter-segment sales Op. Profit -8-1.7% FY11 FY13 Lithography Equipment (Unit Sales) FY13 IC 46 41 FPD 16 24 IC Stepper Unit Breakdown by Light Source FY13 ArF KrF 3 9 i-line 43 32 15
Inventories 8 Amount 9 7 6 35 Turnover (Days) 52 54 42 518 46 56 57 554 542 63 591 57 552 7 5 3 5 479 477 1 436-1 4 385-3 3 4QE1 1QE11 2QE11 3QE11 4QE11 1QE12 2QE12 3QE12 4QE12-5 16
159 276 227 261 27 255 27 258 265 27 257 21 213 342 325 385 384 47 455 175 171 247 249 234 225 213 255 744 13 42 1, 75 Capital Expenditure Increase in PP&E Net Income Attributable to Canon Inc. Depreciation 1, 75 Free Cash Flow Operating C/F Free C/F Investing C/F 5 5 25 25 FY1 FY11 FY13 FY1 FY11 FY13 17
15 Cash on Hand and Return to Shareholders Cash on Hand (Year-end) Cash-on hand (Bilions of yen) Cash-on-hand (In months of 2nd-half net sales, except FYE13, which is based on full-year net sales) 5 4 2 13.1% Dividend Dividend Per Share (Yen) Payout Ratio (Consolidated Basis) 12.% 11.% 1.% 1 2.8 795 2.5 2.5 841 773 2.3 2. 15 3 2 1 11 11 12 12 6.% 13 67.2% 9.% 8.% 7.% 667 64 1 58.3% 6.% 5 44.4% 5.% 5 4.% -1 3.% FYE9 FYE1 FYE11 FYE12 FYE13 Note 1: 45, 1, 5, 1 and 15 billion yen was used to acquire own shares in 27, 28, 21, 211 and 212, respectively. -2 FY8 FY9 FY1 FY11 Plan 2.% 18
Supplementary Information 19
Transition in Sales and Operating Profit 4Q/FY 212 Actual v. 4Q/FY 211 Actual 4Q FY Sales Op. Profit Sales Op. Profit FY 211 Actual 964.8 94.6 3,557.4 378.1 Foreign Exchange Impact (Net Sales, Cost of Sales, Expenses) +24.8 +9.8-54.3-27.4 Change in Exchange Rate(4Q) 1USD: 1EURO: 77.4 to 81.26 yen 14.22 to 15.31 yen Sales Volume Impact Office -32.7-71.5 Imaging System +27.2 +115.5 Industry and Others -1.1-9.5 Total -15.6-33.5 +34.5-43.6 Others -22.6 +6.8-57.8 +16.8 Total Change -13.4-16.9-77.6-54.2 FY 212 Actual 951.4 77.7 3,479.8 323.9 Change in Exchange Rate(FY) 1USD: 1EURO: 79.55 to 79.96 yen 11.72 to 12.8 yen Supplementary Information 2
Gross Profit Variance Analysis 4Q 212 Actual v. 4Q 211 Actual 4Q12 4Q11 Change 1 Gross Profit 432.4 459.5-27.1 % Sales 45.4% 47.6% -2.2pt. 5 24.8 13.7-5 -3.4-22.6-8.9-3.7-27.1-1 Forex Impact on Sales Sales Volume Impact Price Change Forex Impact on Costs Cost Reduction Others Total Change in Gross Profit Supplementary Information 21
Operating Profit Variance Analysis 4Q 212 Actual v. 4Q 211 Actual 4Q12 4Q11 Change Op. Profit 77.7 94.6-16.9 % Sales 8.2% 9.8% -1.6pt. 1 5 16.3-5 -27.1-6.1-16.9-1 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 22
Interest Bearing Debt 5 4 Debt Debt/Total Assets 5.% 4.% 3 3.% 2 1 14 1 11 12.4%.3%.3%.3% 4.1% FYE8 FYE9 FYE1 FYE11 FYE12 2.% 1.%.% Supplementary Information 23
Financial Ratios (Yen) 9 15% 6 9.2% 9.6% 8.7% 9.7% 1% 3 4.9% 3.4% 6.3% 6.3% 5.7% 199.71 24.49 191.34 6.4% 221.2 5% 16.64 FY9 FY1 FY11 FY13 % EPS(Basic) (Attributable to Canon Inc.) ROE ROA Supplementary Information 24