FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

 

For the month of ….		April		……………………………………………… ,		2015

 

		CANON INC.
		(Translation of registrant’s name into English)
		30-2, Shimomaruko 3-Chome, Ohta-ku, Tokyo 146-8501, Japan
		(Address of principal executive offices)

[Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F		X		Form 40-F

[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes				No		X

[If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-………………..

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Date….		April 28, 2015						By ……/s/…………… Shinichi Aoyama ………
								(Signature)*
								Shinichi Aoyama                                      General Manager                                      Consolidated Accounting Div.                                      Canon Inc.

*Print the name and title of the signing officer under his signature.

The following materials are included.

1. CONSOLIDATED RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2015

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CONSOLIDATED RESULTS FOR

THE FIRST QUARTER ENDED MARCH 31, 2015

April 27, 2015

CONSOLIDATED RESULTS

(Millions of yen, thousands of U.S. dollars, except per share amounts)

 

			Actual																				Projection
		Three months ended March 31, 2015				Three months ended March  31, 2014				Change(%)								Three months ended March 31, 2015				Year ending December 31, 2015				Change(%)
Net sales		¥	857,445			¥	868,312				-				1.3			$	7,145,375			¥	3,860,000				+				3.6
Operating profit			66,197				82,639				-				19.9				551,642				380,000				+				4.5
Income before income taxes			61,281				79,191				-				22.6				510,675				390,000				+				1.8
Net income attributable                    to Canon Inc.		¥	33,930			¥	47,610				-				28.7			$	282,750			¥	255,000				+				0.1
Net income attributable to Canon Inc. shareholders per share:
- Basic		¥	31.07			¥	42.11				-				26.2			$	0.26			¥	233.53				+				2.0
- Diluted			31.07				42.11				-				26.2				0.26				-								-
		Actual
		As of March 31, 2015				As of December 31, 2014				Change(%)								As of March 31, 2015
Total assets		¥	4,284,215			¥	4,460,618				-				4.0			$	35,701,792
Canon Inc. shareholders’ equity		¥	2,869,104			¥	2,978,184				-				3.7			$	23,909,200

 

Notes:		1.		Canon’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.
		2.		U.S. dollar amounts are translated from yen at the rate of JPY 120 = U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of March 31, 2015, solely for the convenience of the reader.

 

Canon Inc.		30-2, Shimomaruko 3-chome, Ohta-ku,
Headquarter office		Tokyo 146-8501, Japan
		Phone: +81-3-3758-2111

 

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I. Operating Results and Financial Conditions

2015 First Quarter in Review

Looking back at the global economy in the first quarter of 2015, the U.S. economy continued recovering smoothly as employment conditions and consumer spending steadily improved. In Europe, although the U.K. and Germany showed signs of economic recovery, the economies of Russia and Southern European nations remained stagnant. The pace of economic expansion in China remained modest while other emerging countries faced slowdowns owing to currency depreciation. As for the Japanese economy, improvement was seen in the corporate sector and consumer spending was stable. As a result, the global economy overall continued realizing moderate growth.

As for the markets in which Canon operates amid these conditions, demand for office multifunction devices (MFDs) and laser printers maintained steady growth. Demand for semiconductor lithography equipment increased, fueled by continued customer investment. As for cameras, demand continued to decline both for interchangeable-lens digital cameras and digital compact cameras. Looking at inkjet printers, demand decreased slightly from the previous year due to sluggish market conditions in emerging economies.

The average value of the yen during the quarter was ¥119.25 against the U.S. dollar, a year on year depreciation of approximately ¥17, and ¥133.89 against the euro, a year on year appreciation of approximately ¥7.

During the first quarter, MFDs and laser printers enjoyed steady growth that has continued from the previous year. Despite solid growth in the U.S. market, interchangeable-lens digital cameras continued to face severe conditions in other regions while sales volume for digital compact cameras decreased in all regions compared with the same period of the previous year. Net sales of inkjet printers also decreased, mainly in Japan and emerging countries. Consequently, first quarter net sales decreased 1.3% year on year to ¥857.4 billion despite the positive effect of favorable currency exchange rates. The gross profit ratio rose 1.4 points year on year to 51.1% thanks to ongoing cost-cutting activities and efforts aimed at controlling price reductions while gross profit increased 1.6% despite the decline in sales. Operating expenses increased 6.7% year on year to ¥372.4 billion owing to such factors as the increase in foreign-currency-denominated operating expenses after conversion into yen due to the depreciation of the yen, along with the increase in R&D expenses related to new business and new products. As a result, first-quarter operating profit decreased by 19.9% to ¥66.2 billion. Other income (deductions) decreased by ¥1.5 billion due to foreign currency exchange losses while income before income taxes decreased by 22.6% year on year to ¥61.3 billion. Net income attributable to Canon Inc. decreased by 28.7% to ¥33.9 billion due to such factors as the increase in corporate tax as a result of the revision to Japan’s tax system that was passed by the Diet in March.

Basic net income attributable to Canon Inc. shareholders per share for the quarter was ¥31.07, a year on year decrease of ¥11.04.

 

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Results by Segment

Looking at Canon’s first-quarter performance by business unit, within the Office Business Unit, as for office MFDs, despite the healthy demand for new imageRUNNER ADVANCE C350/C250-series models, color A4 (letter and legal-sized)-model imageRUNNER ADVANCE machines, and the imagePRESS C800/C700, color models targeting the light production market, total sales volume decreased slightly from the year-ago period due to slow demand in Asian countries and the rush in demand in Japan during the first quarter of the previous year that preceded the country’s consumption tax increase. As for high-speed continuous-feed printers and wide-format printers, sales of the Océ ColorStream 3000 series showed solid growth. Among laser printers, although sales volume decreased in Japan as a result of the rush in demand during the same period of the previous year leading up to the consumption tax hike, sales volume overall increased owing to steadily growing demand in other regions. As a result, coupled with the positive effects of favorable currency exchange rates, sales for the business unit totaled ¥529.1 billion, a year on year increase of 3.9%, while operating profit totaled ¥71.7 billion, declining 1.0% due to the increase in R&D and other expenses.

Within the Imaging System Business Unit, although sales volume of interchangeable-lens digital cameras declined due to market shrinkage, the U.S. market showed signs of recovery with sales volume increasing from the same period of the previous year. Solid demand for advanced-amateur models, such as the EOS 7D Mark II, contributed to an improvement in the gross profit ratio. As for digital compact cameras, although sales volume for low-end models declined due to the ongoing contraction of the market in all regions from the previous year, sales volume for high-added-value models, featuring high image quality and high-magnification zoom capabilities, increased from the same period of the previous year. As for inkjet printers, although sales volume in the U.S. increased from the same period of the previous year thanks to sales promotions for new products featuring enhanced mobile-device compatibility for which demand is increasing and MAXIFY business-model inkjet printers, total sales volume declined slightly due to economic stagnation in emerging countries and the previous year’s rush in demand in Japan leading up to the hike in the country’s consumption tax. As a result, sales for the business unit decreased by 10.3% to ¥262.7 billion year on year, while operating profit totaled ¥29.1 billion, a decline of 30.7%.

In the Industry and Others Business Unit, within the semiconductor lithography equipment segment, ongoing investment by manufacturers led to an increase in first-quarter unit sales of lithography systems for memory devices and power semiconductor devices from the same period of the previous year. As for FPD lithography equipment, although no sales were recorded during the quarter, the market for FPD lithography equipment showed solid growth with positive developments in orders and shipments. Looking at medical equipment, although total sales for the segment decreased from the same period of the previous year, sales volume for high-resolution wireless models, among Canon’s mainstay digital radiography systems, increased. Consequently, sales for the business unit totaled ¥89.3 billion, a decrease of 0.5% year on year, while operating profit recorded a loss of ¥7.8 billion owing to upfront investment into next-generation technologies.

Cash Flow

During the first quarter of 2015, cash flow from operating activities totaled ¥99.5 billion, a decrease of ¥32.8 billion compared with the same period of the previous year due to the decrease in profit along with an increase in inventory. Due to capital investment focused on new products and a decrease in time deposits with original maturities of more than three months, which are included in short-term investments, cash flow from investing activities decreased ¥22.8 billion year on year to ¥33.7 billion. Accordingly, free cash flow totaled ¥65.8 billion, a decrease of ¥10.0 billion compared with the corresponding year-ago period.

Cash flow from financing activities recorded an outlay of ¥94.6 billion, mainly arising from the dividend payout.

Owing to these factors, as well as the negative impact from foreign currency translation adjustments, cash and cash equivalents decreased by ¥50.9 billion to ¥793.7 billion from the end of the previous year.

 

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Outlook

As for the outlook in the second quarter onward, the economic recovery in the U.S. is expected to gain momentum, supported by steady consumer spending and employment conditions. Projections for the European economy point to continued weak growth due to increasing uncertainty surrounding such factors as the recession in the Russian economy and the resurgent financial crisis in Greece. China’s economy is expected to face a slowdown while projections for other emerging countries indicate that more time will be needed for a recovery due to currency depreciations and other factors. As for the Japanese economy, consumer spending is expected to gradually recover amid an improvement in employment conditions. Looking at the global economy as a whole, while the outlook for a recovery going into the latter half of the year remains unchanged, the pace of recovery will likely be slower than originally assumed.

In the businesses in which Canon is involved, demand for MFDs is projected to expand moderately, mainly for color models. Likewise, demand in the laser printer market is also expected to continue growing moderately, centered on multifunction models. As for interchangeable-lens digital cameras, demand is expected to be weaker than originally forecast at the beginning of the year. Within the digital compact camera market, although projections point to continued market contraction for low-end models, demand for high-added-value models featuring high image quality and high-magnification zoom capabilities is expected to grow steadily. Looking at inkjet printers, as market conditions in emerging countries gradually recover as the latter half of the year approaches, demand is expected to remain in line with the previous year. Within the industrial equipment market, demand for semiconductor lithography equipment is expected to increase compared with the previous year as manufacturers are expected to boost capital outlays in response to increasing demand for memory devices, image sensors and power semiconductors, while demand for FPD lithography equipment is also projected to increase as device manufacturers boost capital investment amid growing panel demand.

With regard to currency exchange rates for the second quarter onward, on which Canon’s performance outlook is based, Canon anticipates exchange rates of ¥120 to the U.S. dollar and ¥130 to the euro, representing a depreciation of approximately ¥14 against the U.S. dollar and an appreciation of approximately ¥10 against the euro compared with the annual average rates of the previous year.

Upon taking into consideration these foreign exchange rate assumptions and the current economic forecast, Canon projects full-year consolidated net sales in 2015 of ¥3,860.0 billion, a year on year increase of 3.6%; operating profit of ¥380.0 billion, a year on year increase of 4.5%; income before income taxes of ¥390.0 billion, a year on year increase of 1.8%; and net income attributable to Canon Inc. of ¥255.0 billion, a year on year increase of 0.1%.

Consolidated Outlook

 

Fiscal year		Millions of yen
		Year ending December 31, 2015								Change				Year ended December 31, 2014				Change (%)
		Previous Outlook (A)				Revised Outlook (B)				(B - A)				Results (C)				(B - C) / C
Net sales		¥	3,900,000			¥	3,860,000			¥	(40,000	)		¥	3,727,252				+3.6%
Operating profit			380,000				380,000				-				363,489				+4.5%
Income before income taxes			390,000				390,000				-				383,239				+1.8%
Net income attributable to Canon Inc.		¥	260,000			¥	255,000			¥	(5,000	)		¥	254,797				+0.1%

 

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This document 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 document. 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. AND SUBSIDIARIES

CONSOLIDATED

II. Financial Statements

1. CONSOLIDATED BALANCE SHEETS

 

		Millions of yen
		As of March 31, 2015				As of December 31, 2014				Change
ASSETS
Current assets:
Cash and cash equivalents		¥	793,701			¥	844,580			¥	(50,879)
Short-term investments			41,578				71,863				(30,285)
Trade receivables, net			536,805				625,675				(88,870)
Inventories			562,832				528,167				34,665
Prepaid expenses and other current assets			320,450				321,648				(1,198)
Total current assets			2,255,366				2,391,933				(136,567)
Noncurrent receivables			29,590				29,785				(195)
Investments			66,830				65,176				1,654
Property, plant and equipment, net			1,252,923				1,269,529				(16,606)
Intangible assets, net			171,308				177,288				(5,980)
Other assets			508,198				526,907				(18,709)
Total assets		¥	4,284,215			¥	4,460,618			¥	(176,403)
LIABILITIES AND EQUITY
Current liabilities:
Short-term loans and current portion of long-term debt		¥	937			¥	1,018			¥	(81)
Trade payables			315,148				310,214				4,934
Accrued income taxes			32,897				57,212				(24,315)
Accrued expenses			326,473				345,237				(18,764)
Other current liabilities			190,865				207,698				(16,833)
Total current liabilities			866,320				921,379				(55,059)
Long-term debt, excluding current installments			1,152				1,148				4
Accrued pension and severance cost			272,477				280,928				(8,451)
Other noncurrent liabilities			113,897				116,405				(2,508)
Total liabilities			1,253,846				1,319,860				(66,014)
Equity:
Canon Inc. shareholders’ equity:
Common stock			174,762				174,762				-
Additional paid-in capital			401,482				401,563				(81)
Legal reserve			65,057				64,599				458
Retained earnings			3,261,037				3,320,392				(59,355)
Accumulated other comprehensive income (loss)			(22,280)				28,286				(50,566)
Treasury stock, at cost			(1,010,954)				(1,011,418)				464
Total Canon Inc. shareholders’ equity			2,869,104				2,978,184				(109,080)
Noncontrolling interests			161,265				162,574				(1,309)
Total equity			3,030,369				3,140,758				(110,389)
Total liabilities and equity		¥	4,284,215			¥	4,460,618			¥	(176,403)
		Millions of yen
		As of March 31, 2015				As of December 31, 2014
Notes:
1. Allowance for doubtful receivables		¥	11,545			¥	12,122
2. Accumulated depreciation			2,519,147				2,519,259
3. Accumulated other comprehensive income (loss):
Foreign currency translation adjustments			90,827				144,557
Net unrealized gains and losses on securities			12,799				12,546
Net gains and losses on derivative instruments			608				(2,603)
Pension liability adjustments			(126,514)				(126,214)

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

2. CONSOLIDATED STATEMENTS OF INCOME AND

        CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

Consolidated statements of income
		Millions of yen
		Three months ended March 31, 2015				Three months ended March 31,  2014				Change(%)
Net sales		¥	857,445			¥	868,312				-				1.3
Cost of sales			418,881				436,830
Gross profit			438,564				431,482				+				1.6
Operating expenses:
Selling, general and administrative expenses			293,128				274,025
Research and development expenses			79,239				74,818
			372,367				348,843
Operating profit			66,197				82,639				-				19.9
Other income (deductions):
Interest and dividend income			1,587				1,604
Interest expense			(101)				(103)
Other, net			(6,402)				(4,949)
			(4,916)				(3,448)
Income before income taxes			61,281				79,191				-				22.6
Income taxes			26,429				28,613
Consolidated net income			34,852				50,578
Less: Net income attributable to noncontrolling interests			922				2,968
Net income attributable to Canon Inc.		¥	33,930			¥	47,610				-				28.7
Consolidated statements of comprehensive income
		Millions of yen
		Three months ended March 31, 2015				Three months ended March 31,  2014				Change(%)
Consolidated net income		¥	34,852			¥	50,578				-				31.1
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments			(54,128)				(32,736)
Net unrealized gains and losses on securities			472				(1,319)
Net gains and losses on derivative instruments			3,213				2,378
Pension liability adjustments			(305)				13,937
			(50,748)				(17,740)
Comprehensive income (loss)			(15,896)				32,838								-
Less: Comprehensive income attributable to
noncontrolling interests			740				2,733
Comprehensive income (loss) attributable to Canon Inc.		¥	(16,636)			¥	30,105								-

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

3. DETAILS OF SALES

 

		Millions of yen
Sales by business unit		Three months ended   March 31, 2015				Three months ended   March 31, 2014				Change(%)
Office		¥	529,131			¥	509,176				+				3.9
Imaging System			262,658				292,809				-				10.3
Industry and Others			89,303				89,770				-				0.5
Eliminations			(23,647)				(23,443)								-
Total		¥	857,445			¥	868,312				-				1.3
		Millions of yen
Sales by region		Three months ended March 31, 2015				Three months ended March 31, 2014				Change(%)
Japan		¥	165,143			¥	191,713				-				13.9
Overseas:
Americas			248,975				228,531				+				8.9
Europe			245,959				261,911				-				6.1
Asia and Oceania			197,368				186,157				+				6.0
			692,302				676,599				+				2.3
Total		¥	857,445			¥	868,312				-				1.3

Notes: 1. The primary products included in each of the segments are as follows:

Office Business Unit :
Office multifunction devices (MFDs) / Laser multifunction printers (MFPs) / Laser printers / Digital production printing systems / High speed continuous feed printers / Wide-format printers / Document solutions

Imaging System Business Unit :
Interchangeable lens digital cameras / Digital compact cameras / Digital camcorders / Digital cinema cameras / Interchangeable lenses / Compact photo printers / Inkjet printers / Large-format inkjet printers / Commercial photo printers / Image scanners / Multimedia projectors / Broadcast equipment / Calculators

Industry and Others Business Unit :
Semiconductor lithography equipment / FPD (Flat panel display) lithography equipment / Digital radiography systems / Ophthalmic equipment / Vacuum thin-film deposition equipment / Organic LED (OLED) panel manufacturing equipment / Die bonders / Micromotors / Network cameras / Handy terminals / Document scanners

 

2. The principal countries and regions included in each regional category are as follows:
Americas: United States of America, Canada, Latin America
Europe: United Kingdom, Germany, France, Netherlands, European countries, Middle East and Africa
Asia and Oceania: China, Asian countries, Australia

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

4. CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Millions of yen
		Three months ended March 31, 2015				Three months ended March 31, 2014
Cash flows from operating activities:
Consolidated net income		¥	34,852			¥	50,578
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization			64,416				61,352
Loss on disposal of fixed assets			916				2,647
Deferred income taxes			(713)				4,212
Decrease in trade receivables			67,368				61,575
Increase in inventories			(52,604)				(6,945)
Increase in trade payables			27,012				6,651
Decrease in accrued income taxes			(23,650)				(16,677)
Decrease in accrued expenses			(8,053)				(12,162)
Increase (decrease) in accrued (prepaid) pension and severance cost			1,202				(6,326)
Other, net			(11,294)				(12,651)
Net cash provided by operating activities			99,452				132,254
Cash flows from investing activities:
Purchases of fixed assets			(56,344)				(57,418)
Proceeds from sale of fixed assets			495				1,861
Purchases of available-for-sale securities			(73)				(122)
Decrease in time deposits, net			27,808				25
Acquisitions of subsidiaries, net of cash acquired			(4,351)				(980)
Purchases of other investments			(963)				-
Other, net			(293)				159
Net cash used in investing activities			(33,721)				(56,475)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			248				179
Repayments of long-term debt			(358)				(580)
Decrease in short-term loans, net			-				(41)
Dividends paid			(92,806)				(73,905)
Repurchases of treasury stock, net			364				(50,006)
Other, net			(2,051)				(1,391)
Net cash used in financing activities			(94,603)				(125,744)
Effect of exchange rate changes on cash and cash equivalents			(22,007)				(11,853)
Net change in cash and cash equivalents			(50,879)				(61,818)
Cash and cash equivalents at beginning of period			844,580				788,909
Cash and cash equivalents at end of period		¥	793,701			¥	727,091

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5. NOTE FOR GOING CONCERN ASSUMPTION

      Not applicable.

6. SEGMENT INFORMATION

(1)  SEGMENT INFORMATION BY BUSINESS UNIT

 

				Millions of yen
				Three months  ended March 31, 2015				Three months ended March  31, 2014				Change(%)
Office
Net sales:
		External customers		¥	528,499			¥	508,099			+	4.0
		Intersegment			632				1,077			-	41.3
		Total			529,131				509,176			+	3.9
Operating cost and expenses					457,415				436,719			+	4.7
Operating profit				¥	71,716			¥	72,457			-	1.0
Imaging System
Net sales:
		External customers		¥	262,349			¥	292,613			-	10.3
		Intersegment			309				196			+	57.7
		Total			262,658				292,809			-	10.3
Operating cost and expenses					233,540				250,783			-	6.9
Operating profit				¥	29,118			¥	42,026			-	30.7
Industry and Others
Net sales:
		External customers		¥	66,597			¥	67,600			-	1.5
		Intersegment			22,706				22,170			+	2.4
		Total			89,303				89,770			-	0.5
Operating cost and expenses					97,142				97,391			-	0.3
Operating profit				¥	(7,839)			¥	(7,621)				-
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-
		Intersegment			(23,647)				(23,443)				-
		Total			(23,647)				(23,443)				-
Operating cost and expenses					3,151				780				-
Operating profit				¥	(26,798)			¥	(24,223)				-
Consolidated
Net sales:
		External customers		¥	857,445			¥	868,312			-	1.3
		Intersegment			-				-				-
		Total			857,445				868,312			-	1.3
Operating cost and expenses					791,248				785,673			+	0.7
Operating profit				¥	66,197			¥	82,639			-	19.9

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

(2)  SEGMENT INFORMATION BY GEOGRAPHIC AREA

 

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

7. SIGNIFICANT CHANGES IN CANON INC. SHAREHOLDERS’ EQUITY

       None.

8. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

(1)  GROUP POSITION

 

1.

Number of Group Companies

 

		March 31, 2015		December 31, 2014		Change
Subsidiaries		263		261		2
Affiliates		7		7		-
Total		270		268		2

 

2.

Change in Group Entities

 

Subsidiaries
Addition:		5 companies
Removal:		3 companies

 

3.

Subsidiaries Listed on Domestic Stock Exchange

Tokyo Stock Exchange (1st section): Canon Marketing Japan Inc., Canon Electronics Inc.

 

(2)  SIGNIFICANT

ACCOUNTING POLICIES

Canon’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.

 

-12-

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Canon Inc.

April 27, 2015

CONSOLIDATED RESULTS FOR

THE FIRST QUARTER ENDED MARCH 31, 2015

SUPPLEMENTARY REPORT

TABLE OF CONTENTS

 

				PAGE
1.		SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT			S    1
2.		SEGMENT INFORMATION BY BUSINESS UNIT			S    2
3.		OTHER INCOME / DEDUCTIONS			S    2
4.		BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT			S    3
5.		SALES GROWTH IN LOCAL CURRENCY (Year over year)			S    3
6.		PROFITABILITY			S    4
7.		IMPACT OF FOREIGN EXCHANGE RATES			S    4
8.		STATEMENTS OF CASH FLOWS			S    4
9.		R&D EXPENDITURE			S    5
10.		INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION			S    5
11.		INVENTORIES			S    5
12.		DEBT RATIO			S    5
13.		OVERSEAS PRODUCTION RATIO			S    5
14.		NUMBER OF EMPLOYEES			S    5

 

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Canon Inc.

 

1. SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT		(Millions of yen)

				2015								2014										Change year over year
				1st quarter				Year (P)				1st quarter				Year						1st quarter				Year
Japan
		Office			95,160				-				102,020				380,594						-6.7	%			-
		Imaging System			38,154				-				53,343				207,281						-28.5	%			-
		Industry and Others			31,829				-				36,350				136,442						-12.4	%			-
		Total			165,143				741,500				191,713				724,317						-13.9	%			+2.4	%
Overseas
		Office			433,339				-				406,079				1,695,194						+6.7	%			-
		Imaging System			224,195				-				239,270				1,135,220						-6.3	%			-
		Industry and Others			34,768				-				31,250				172,521						+11.3	%			-
		Total			692,302				3,118,500				676,599				3,002,935						+2.3	%			+3.8	%
		Americas
		Office			176,828				-				156,166				656,783						+13.2	%			-
		Imaging System			63,980				-				65,897				345,707						-2.9	%			-
		Industry and Others			8,167				-				6,468				34,010						+26.3	%			-
		Total			248,975				1,147,700				228,531				1,036,500						+8.9	%			+10.7	%
		Europe
		Office			167,503				-				173,532				689,275						-3.5	%			-
		Imaging System			71,048				-				81,551				367,050						-12.9	%			-
		Industry and Others			7,408				-				6,828				34,159						+8.5	%			-
		Total			245,959				1,009,000				261,911				1,090,484						-6.1	%			-7.5	%
		Asia and Oceania
		Office			89,008				-				76,381				349,136						+16.5	%			-
		Imaging System			89,167				-				91,822				422,463						-2.9	%			-
		Industry and Others			19,193				-				17,954				104,352						+6.9	%			-
		Total			197,368				961,800				186,157				875,951						+6.0	%			+9.8	%
Intersegment
		Office			632				-				1,077				2,944						-41.3	%			-
		Imaging System			309				-				196				693						+57.7	%			-
		Industry and Others			22,706				-				22,170				89,802						+2.4	%			-
		Eliminations			(23,647	)			-				(23,443	)			(93,439	)					-				-
		Total			0				0				0				0						-				-
Total
		Office			529,131				2,180,500				509,176				2,078,732						+3.9	%			+4.9	%
		Imaging System			262,658				1,310,000				292,809				1,343,194						-10.3	%			-2.5	%
		Industry and Others			89,303				460,900				89,770				398,765						-0.5	%			+15.6	%
		Eliminations			(23,647	)			(91,400	)			(23,443	)			(93,439	)					-				-
		Total			857,445				3,860,000				868,312				3,727,252						-1.3	%			+3.6	%

(P)=Projection

 

- S1 -

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Canon Inc.

 

2. SEGMENT INFORMATION BY BUSINESS UNIT

(Millions of yen)

				2015								2014										Change year  over year
					1st quarter				Year (P)				1st quarter				Year						1st quarter			Year
Office
		External customers			528,499				2,179,200				508,099				2,075,788						+4.0%			+5.0%
		Intersegment			632				1,300				1,077				2,944						-41.3%			-55.8%
		Total sales			529,131				2,180,500				509,176				2,078,732						+3.9%			+4.9%
		Operating profit			71,716				330,000				72,457				292,057						-1.0%			+13.0%
		% of sales			13.6%				15.1%				14.2%				14.0%						-			-
Imaging System
		External customers			262,349				1,308,300				292,613				1,342,501						-10.3%			-2.5%
		Intersegment			309				1,700				196				693						+57.7%			+145.3%
		Total sales			262,658				1,310,000				292,809				1,343,194						-10.3%			-2.5%
		Operating profit			29,118				187,200				42,026				194,601						-30.7%			-3.8%
		% of sales			11.1%				14.3%				14.4%				14.5%						-			-
Industry and Others
		External customers			66,597				372,500				67,600				308,963						-1.5%			+20.6%
		Intersegment			22,706				88,400				22,170				89,802						+2.4%			-1.6%
		Total sales			89,303				460,900				89,770				398,765						-0.5%			+15.6%
		Operating profit			(7,839	)			(22,800	)			(7,621	)			(21,801	)					-			-
		% of sales			-8.8%				-4.9%				-8.5%				-5.5%						-			-
Corporate and Eliminations
		External customers			-				-				-				-						-			-
		Intersegment			(23,647	)			(91,400	)			(23,443	)			(93,439	)					-			-
		Total sales			(23,647	)			(91,400	)			(23,443	)			(93,439	)					-			-
		Operating profit			(26,798	)			(114,400	)			(24,223	)			(101,368	)					-			-
Consolidated
		External customers			857,445				3,860,000				868,312				3,727,252						-1.3%			+3.6%
		Intersegment			-				-				-				-						-			-
		Total sales			857,445				3,860,000				868,312				3,727,252						-1.3%			+3.6%
		Operating profit			66,197				380,000				82,639				363,489						-19.9%			+4.5%
		% of sales			7.7%				9.8%				9.5%				9.8%						-			-
																				(P)=Projection
3. OTHER INCOME / DEDUCTIONS																										(Millions of yen)
					2015								2014										Change year  over year
				1st quarter				Year (P)				1st quarter				Year						1st quarter				Year
		Interest and dividend, net			1,486				2,300				1,501				7,406						(15)			(5,106)
		Forex gain (loss)			(7,926	)			(8,900	)			(5,807)				2,628						(2,119	)		(11,528)
		Equity earnings of affiliated companies			301				200				93				478						+208			(278)
		Other, net			1,223				16,400				765				9,238						+458			+7,162
		Total			(4,916	)			10,000				(3,448	)			19,750						(1,468	)		(9,750)
																				(P)=Projection

 

- S2 -

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Canon Inc.

 

4. BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT
				2015				2014
				1st quarter		Year (P)		1st quarter		Year
Office
		Monochrome copiers		15%		16%		15%		16%
		Color copiers		19%		20%		18%		19%
		Printers		43%		41%		43%		42%
		Others		23%		23%		24%		23%
Imaging System
		Cameras		59%		62%		62%		64%
		Inkjet printers		31%		29%		29%		27%
		Others		10%		9%		9%		9%
Industry and Others
		Lithography equipment		18%		24%		16%		23%
		Others		82%		76%		84%		77%
										(P)=Projection
5. SALES GROWTH IN LOCAL CURRENCY (Year over year)
				2015
				1st quarter		Year (P)
Office
		Japan		-6.7%		-
		Overseas		-1.7%		-
		Total		-2.8%		+0.2%
Imaging System
		Japan		-28.5%		-
		Overseas		-12.8%		-
		Total		-15.6%		-6.8%
Industry and Others
		Japan		-12.4%		-
		Overseas		+7.5%		-
		Total		-1.8%		+14.5%
Total
		Japan		-13.9%		+2.4%
		Overseas		-5.2%		-1.5%
		Americas		-6.3%		-1.6%
		Europe		-4.1%		-3.4%
		Asia and Oceania		-5.3%		+1.1%
		Total		-7.1%		-0.7%
						(P)=Projection

 

- S3 -

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																			Canon Inc.
6. PROFITABILITY
				2015								2014
				1st quarter				Year (P)				1st quarter				Year
ROE *1					4.6	%			8.5	%			6.7	%		8.7%
ROA *2					3.1	%			5.7	%			4.6	%		5.9%
																(P)=Projection
*1 Return on Equity ; Based on Net Income attributable to Canon Inc. and Total Canon Inc. Shareholders’ Equity *2 Return on Assets ; Based on Net Income attributable to Canon Inc.   7. IMPACT OF FOREIGN EXCHANGE RATES
		(1) Exchange rates																	(Yen	)
				2015												2014
				1st quarter				2nd-4th quarter (P)				Year (P)				1st quarter		Year
		Yen/US$			119.25				120.00				119.84			102.69			106.18
		Yen/Euro			133.89				130.00				130.92			140.77			140.62
																			(P)=Projection
		(2) Impact of foreign exchange rates on sales (Year over year)
								(Billions of yen)
				2015
				1st quarter				Year (P)
		US$			+45.9				+166.3
		Euro			(11.5	)			(66.5	)
		Other currencies			+6.6				+25.8
		Total			+41.0				+125.6
									(P)=Projection
		(3) Impact of foreign exchange rates per yen		(Billions of yen)
				2015
				2nd-4th quarter (P)
On sales
		US$			12.0
		Euro			4.9
On operating profit
		US$			4.4
		Euro			2.2
					(P)=Projection
8. STATEMENTS OF CASH FLOWS																(Millions of yen)
				2015								2014
				1st quarter				Year (P)				1st quarter				Year
Net cash provided by operating activities					99,452				528,000				132,254			583,927
Net cash used in investing activities					(33,721	)			(568,000	)			(56,475	)		(269,298)
Free cash flow					65,731				(40,000	)			75,779			314,629
Net cash used in financing activities					(94,603	)			(179,800	)			(125,744	)		(300,886)
Effect of exchange rate changes on cash and cash equivalents					(22,007	)			(24,800	)			(11,853	)		41,928
Net change in cash and cash equivalents					(50,879	)			(244,600	)			(61,818	)		55,671
Cash and cash equivalents at end of period					793,701				600,000				727,091			844,580
																(P)=Projection

 

- S4 -

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Canon Inc.

 

9. R&D EXPENDITURE														(Millions of yen)
				2015								2014
				1st quarter				Year (P)				1st quarter		Year
		Office			27,372				-			24,686		104,391
		Imaging System			21,439				-			20,940		87,510
		Industry and Others			12,284				-			6,194		26,516
		Corporate and Eliminations			18,144				-			22,998		90,562
		Total			79,239				315,000			74,818		308,979
% of sales					9.2%				8.2%			8.6%		8.3%
														(P)=Projection
10. INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION														(Millions of yen)
				2015								2014
				1st quarter				Year (P)				1st quarter		Year
		Increase in PP&E			45,202				205,000			38,054		182,343
		Depreciation and amortization			64,416				275,000			61,352		263,480
														(P)=Projection
11. INVENTORIES
(1) Inventories												(Millions of yen)
				2015				2014				Difference
				Mar.31				Dec.31
		Office			242,882				238,344			+4,538
		Imaging System			185,832				168,802			+17,030
		Industry and Others			134,118				121,021			+13,097
		Total			562,832				528,167			+34,665
(2) Inventories/Sales*												(Days)
				2015				2014				Difference
				Mar.31				Dec.31
		Office			41				42			(1)
		Imaging System			51				43			+8
		Industry and Others			154				132			+22
		Total			54				50			+4
*Index based on the previous six months sales.
12. DEBT RATIO
				2015				2014				Difference
				Mar.31				Dec.31
		Total debt / Total assets			0.0%				0.0%			0.0%
13. OVERSEAS PRODUCTION RATIO
				2015				2014
				1st quarter				Year
		Overseas production ratio			62%				60%
14. NUMBER OF EMPLOYEES
				2015				2014				Difference
				Mar.31				Dec.31
		Japan			68,690				69,201			(511)
		Overseas			121,984				122,688			(704)
		Total			190,674				191,889			(1,215)

 

- S5 -