Oct. 25, 2007 Canon Inc. Canon Inc. Third Quarter 2007 Results October 25, 2007 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 20-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.
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Canon Inc. Third Quarter 2007 ResultsOct. 25, 2007 Canon Inc. Canon Inc. Third Quarter 2007 Results October 25, 2007 Masahiro Osawa Managing Director, Group Executive Finance and Accounting
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Oct. 25, 2007 Canon Inc.
Canon Inc.Third Quarter 2007 Results
October 25, 2007Masahiro Osawa
Managing Director, Group ExecutiveFinance 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 20-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.
Oct. 25, 2007 Canon Inc.
Supplementary Information
FY2007 Current Projections
Details by Product
4Q 2007 Current Projections
Third Quarter Results / FY 2007 Current Projections
773.04,560.02007 Current Projection (Oct. 25, 2007)
+66.0+403.2Total Change-157.0-161.8Others
+209.3+436.1Total-0.8Optical and Other Products
Sales volume impact[net sales, cost of sales, expenses]
+76.7+128.9Foreign exchange impact707.04,156.82006 Actual
Op. ProfitSalesFY
Change in Exchange Rate
116.43 to 117.98 yen146.51 to 160.29 yen
•1USD:•1EURO:
Supplementary Information
Oct. 25, 2007 Canon Inc.
444 489
510
539 60
8
49 49 4751
45
0
200
400
600
800
FYE03 FYE04 FYE05 FYE06 3QE070
20
40
60
80Inventories
Turnover (Days)
98
39 32 2131
3.1%
0.5%0.7%0.8%1.1%
0
50
100
150
200
FYE03 FYE04 FYE05 FYE06 3QE070%
2%
4%
6%
8%Debt
Debt/Total Assets
Inventories Interest Bearing Debt(Billions of yen)(Billions of yen) (Days)
Supplementary Information 28
Oct. 25, 2007 Canon Inc.
193
226
262 35
5
343 38
4 455 50
0
319 384
380 440
0
200
400
600
800
1,000 Capex
Net income
Depreciation
253 40
1
461
448
309
234 36
0
562
606 69
5 80820
5
0
200
400
600
800
1,000 Operating C/F
Free C/F
Investing C/F
FY04 FY05 FY06 FY07Projection
FY04 FY05 FY06 FY07 Projection
(Billions of yen)
Free Cash FlowCapitalExpenditure
(Billions of yen)
[Major Expenditures in 2007]New factory (Oita Canon Materials)Production engineering base (Yanagicho, Kawasaki City)Production equipment for inkjet key partsAutomated machinery for cartridge productionProduction equipment for toner
Supplementary Information 29
Oct. 25, 2007 Canon Inc.
341.95288.63
396.49
209.21 258.53
15.9% 16.8% 16.0% 16.3% 16.8%
11.0%10.6%10.1%9.0% 10.1%
0
200
400
600
800
1,000
FY03 FY04 FY05 FY06 FY07-5%
0%
5%
10%
15%
20%
EPS (Basic) ROE ROA
Financial Ratios
(Yen)
Supplementary Information 30
Projection
Common stock held by stockholders as of June 30, 2006, were split on a 3-for-2 basis. EPS (Basic) has been adjusted to retroactively reflect the forward stock split.