- Profit attributable to owners of parent increased 700 million yen from a year ago, due largely to a gain on sales of noncurrent assets.

Transcription

1

2 - Profit attributable to owners of parent increased 700 million yen from a year ago, due largely to a gain on sales of noncurrent assets. 1

3 2

4 3

5 4

6 5

7 - Net sales were up after overall bullishness in hardware, consumables, IT solutions and others. - Operating income also increased due to growth in sales of highly profitable LBP cartridges and other consumables and a decrease in selling, general and administrative expenses. (Office MFPs) The sales volume jumped year on year. New products, particularly those for SMEs, were strong, and more than one large rental order was obtained. (Laser printers) The sales volume declined year on year. Despite the growth of those for medical and other specific industries, there was a reaction from the major growth in A3 full-color models, for which promotional campaigns were conducted in the same period a year earlier. Meanwhile, sales soared after a rise in unit selling prices. Sales of toner cartridges grew year on year following the continued expansion of shipments to specific industries with large printing volumes. (Maintenance services) Sales remained flat from the same period a year earlier. While the unit price of maintenance fees continued to decrease, a rise in the number of units in the market continued to boost the printing quantity. (Production printing) Sales were higher than in the preceding year. Color on-demand printers were bullish with demand for internal printing in offices, and shipments of new continuous feed printer models were also healthy. (Network cameras) Sales grew year on year. Large orders were won in many different markets, including offices, stores, street monitoring and nursing care and welfare. (IT solutions) In the Business Solutions segment, IT solutions achieved net sales growth by capturing needs for corporate operational streamlining and increased security and by expanding sales of the Home cloudbased IT support solution for small and medium companies and the ESET antivirus software. In June, it formed a capital and business partnership with Z-Works Inc., a software firm developing and operating a cloud-based IoT platform, to embark on the full-scale operation of the IoT-based nursing care support business. (Canon systems and support) While the IT solution business sees IT maintenance services and security-related products as continuously brisk, net sales were unchanged from the preceding year, largely because of a decrease in orders for laser printers. Operating income was down 200 million yen year on year, to 500 million yen, following a temporary rise in logistical and labor costs caused by an increase in new MFP models. (Canon production printing systems) Net sales expanded 6% year on year, to 3,500 million yen, after the shipment of color inkjet continuous feed printers for commercial printing in addition to monochrome continuous feed printers. However, operating income fell 100 million yen from the same period a year earlier to post a loss of 18 million yen. According to the business model, sales of highly profitable maintenance services are posted later than sales of hardware. For this reason, gross margin declined and expenses for installation and others soared temporarily. 6

8 - IT Solutions saw both net sales and operating income almost unchanged. While the IT infrastructure and services business and the products business expanded, the SI services business and the embedded business contracted. (SI services business) Net sales dropped year on year. Despite an increase in projects for the financial industry, projects for some customers occurred in the period before sales were earned. (IT infrastructure and services business) Net sales grew year on year. Data center services showed strong performance. (Embedded business) Net sales declined year on year. Although projects for the automobile industry were brisk, projects for the main customers in the manufacturing industry decreased. (Products business) Net sales jumped year on year following the solid performance of ESET and other security products. (Canon IT Solutions) Net sales remained at almost the same level as the preceding year, at 18,200 million yen. Operating income was up 230 million yen, to 1,000 million yen. (Canon Software) Net sales declined 12% year on year, to 2,600 million yen, and operating income also declined 50 million yen, to 240 million yen. An absorption-type merger between Canon IT Solutions Inc. as the surviving company and Canon Software Inc. as the disappearing company took place on July 1, [Orders and order backlog] Orders in the SI services business increased, mainly from the financial industry. Due chiefly to the reaction of a large-scale order concerning data centers received in the previous year, orders and the order backlog both decreased. 7

9 - This slide portrays total IT Solutions sales. - Sales other than the IT Solutions segment increased due to a sales hike in the Business Solutions segment. - In IT Security, which is included in the overall sales of IT Solutions, sales of the ESET antivirus software and equipment related to the UTM, which integrates multiple security functions, expanded. 8

10 - Net sales declined year on year. While inkjet printer sales grew, those of compact cameras and inkjet cartridges tumbled. - Operating income slid slightly. The segment continued its endeavors to cut selling, general and administrative expenses. However, a sales decline led to shrinkage in the gross margin. (Interchangeable lens digital cameras) Sales of mirrorless cameras jumped significantly because of the healthy market situation and the release of new products. However, the SLR camera market was dull. The sales volume decreased year on year. (Compact digital cameras) Sales decreased year on year. The market remained on a downward trend, and the Company s shipment volume declined. (Inkjet printers) The sales volume rose year on year after brisk sales for consumer and business applications. There was also a reaction from the Company s shipment shrinkage because of a large amount of inventories in the market in the same period a year earlier. Ink cartridge sales contracted year on year amid the continued downward trend of the printing volume. (Commercial imaging equipment) Sales dropped year on year due to sluggish sales of mainstay products such as TV lenses for broadcasting and video cameras for business use. 9

11 (Industrial segment) - Sales of industrial equipment were bullish. Capital investment was active in the semiconductor-related market. - Sales increased year on year following a rise in orders for semiconductor production equipment and inspection and measurement equipment, and service sales. - Sales growth led to income growth. (Medical segment) - Sales fell, reflecting a reaction to large-scale orders in the same period a year earlier despite sales growth in medical cloud services and others. - Income decreased due to the impact of the sales decline. 10

12 11

13 12

14 13

15 [Business Solutions] - The office MFP market is estimated to remain flat or to shrink slightly in terms of annual shipment volume. - The Company will promote the third-generation ir-adv series, the lineup of which has been expanded for the fiscal year under review, mainly to the middle-ranked customer group, in which the Company s market share is relatively small, with the aim of achieving year-on-year growth in shipment volume. - For laser printers, the Company aims to increase the unit sales volume and cartridge sales year on year by cultivating customers in the distribution and retail market and in the medical market, in both of which the Company still holds a limited market share, and in the domain of high-speed printers. - For production printing, the Company plans to attain year-on-year sales growth by pressing ahead with the shipment of continuous feed printers, given that installation and acceptance inspections are scheduled in the second half in many projects. In addition, a dedicated team will work to cultivate customers in commercial printing. - For network cameras, the Company will build closer ties with Axis and Milestone. It will stimulate corporate demand for monitoring and approach financial and other business sectors where advanced image management is required in a bid to achieve significant year-on-year expansion. [IT Solutions] - In the SI service business, the Company envisions the continuation of large-scale projects for the financial industry and receives more inquiries for a combination of solutions and Canon products from educational institutions. The Company expects to achieve a year-on-year sales increase. - In the products business, the Company aims to expand sales of ESET and other security items and IT products, and anticipates a year-on-year sales rise. - In the embedded business, sales are expected to remain on a downward trend. - With regard to data centers, which serve as one of the pillars in the IT infrastructure and services business, the first building is expected to reach full occupancy earlier than presumed. The Company will be giving detailed consideration to the construction of a second phase building on the same premises. 14

16 [Imaging System] - In the interchangeable lens digital camera market, sales of SLR cameras are expected to be weaker than initially forecasted despite the expansion of mirrorless cameras. The sales volume is expected to decline by around 100,000 units year on year, to approximately 1.17 million units. - The Company will enhance its lineup of mirrorless cameras and promote it positively by waging a user campaign in a bid to increase sales year on year. As for SLR cameras, the Company will release the EOS 6DMark II as the world s lightest full-size SLR camera in August. Accordingly, the middle range will be brisk, whereas the entry range will decrease. The whole interchangeable lens digital camera market is forecasted to shrink, although it was initially forecasted to remain flat. - The compact camera market is weaker than initially forecast. The plan to achieve year-on-year growth will be revised downwards. - The plan for inkjet printers to suffer a year-on-year decline will be revised upwards, taking into account a higher sales volume than planned for the first half. The share of high unit price products will continue to be increased in Q3 and later in an effort to secure profit while improving sales efficiency. - In view of the outlook mentioned above, full-year net sales will be revised downwards by 3,000 million yen, to 158,000 million yen, with a 1% year-on-year slide. The operating income forecast is kept on hold from the previous plan on the assumption of cutting costs to make up for the income decline following the sales slide. [Industrial/Medical] - The plan for industrial equipment, which was initially aiming to increase income year on year, will be revised upwards. Given that capital investment in semiconductor-related markets is brisk, sales of semiconductor manufacturing equipment and inspection and measurement equipment products and services for them are projected to be strong. - In the medical business, the Company will aim to boost sales in view of the numerous inquiries received on the new digital radiography product released in July and an increase in large projects concerning information systems and others for hospitals for the second half. - In view of the outlook mentioned above, the industrial equipment sales forecast will be revised upwards. As a result, the Industrial/Medical segment is projected to see net sales rise 13% year on year, to 36,500 million yen, and operating income up 1,000 million yen year on year, to 1,200 million yen. [Conclusion] - In accordance with the Long-Term Management Objectives and the Three-Year Management Plan, the share of high-priced products will be increased in existing domains such as cameras and printers amid the maturation of markets. In so doing, the Company will improve sales efficiency and profitability and aim to maintain its market share. - Resources will be shifted to growth domains such as network cameras and IT solutions including IT security, 15

17 data centers and cloud services in a bid to attain growth. 15

18 16