Canon Marketing Japan Incorporated · TSE:8060
Canon Marketing Japan — Q1 2024 Earnings Presentation
36 slides from Canon Marketing Japan's earnings presentation, Apr 23, 2024
Slide 1: 1Q 2024 Results
1Q 2024 Results April 23, 2024 Hatsumi Hirukawa Director, Senior Vice President * The figures are rounded off to the nearest 100 million yen in this material. * Forward-looking statements and results forecasts presented in this material are based on the management’s assumptions using currently avail
Slide 2: Agenda
Agenda ◼ Key Points P.3 ◼ Summary of Results P.4 ◼ Op. Income Variance Analysis P.5 ◼ Segment Outline P.6 ◼ Segment Information P.7-10 ◼ Sales of Products and Services by Segment P.11 ◼ Summary of Projections P.12 ◼ Summary of Projections by Segment P.13-15 ◼ Projections by Segment P.16-17 ◼ Outline
Slide 3: Key Points
Key Points Summary of 1Q of FY2024 Financial Results • Net sales rose and income declined year on year. • IT Solutions business continued to grow at a high rate. Sales rose 9% year on year. • Both sales and profits grew exceeded the plan. 2024 Financial Projections • The net sales forecast was revis
Slide 4: Summary of Results
1Q 2024 Actual Summary of Results (from January 1 to March 31) (Billions of yen) 1Q 1Q Changes 2023 2024 Amount % Net sales 154.8 157.2 +2.4 +2% (33.7%) (32.6%) (-1.1%) Gross profit 52.2 51.3 -0.9 -2% (9.9%) (8.8%) (-1.1%) Operating income 15.3 13.8 -1.5 -10% (10.0%) (8.9%) (-1.1%) Ordinary income 1
Slide 5: Op. Income Variance Analysis
1Q 2024 Actual Op. Income Variance Analysis (from January 1 to March 31) (Billions of yen) +0.8 -1.7 -0.6 15.3 13.8 1Q FY2023 Increase in Deterioration in Increase in 1Q FY2024 net sales GP margin SG&A expenses Deterioration in GP margin Increase in SG&A expenses ・Gross profit margin declined mainly
Slide 6: Segment Outline
1Q 2024 Actual Segment Outline (from January 1 to March 31) (Billions of yen) 1Q FY2023 1Q FY2024 Changes Op. Op. Op. Net sales Net sales Net sales Income Income Income Consumers 32.6 3.1 30.1 2.1 -2.5 -1.0 Enterprise 54.7 5.9 59.0 5.5 +4.4 -0.4 Area 59.8 4.7 59.8 5.2 -0.1 +0.5 Professional 11.7 1.9
Slide 7: Segment Information Consumers Segment
Segment Information Consumers Segment ✓ Net sales decreased mainly reflecting a decrease in sales of digital interchangeable lens cameras and inkjet printers. ✓ Operating income declined due to a decrease in gross profit caused by lower sales. (Billions of yen) 1Q FY2023 FY2024 Changes Net sales 32.
Slide 8: Segment Information Enterprise Segment
Segment Information Enterprise Segment ✓ Net sales increased, thanks to the solid sales of Canon products, other in addition to steady sales of IT Solutions. ✓ Despite an increase in profit margin due to a rise in sales, operating income declined, reflecting the negative impact of the absence of lar
Slide 9: Segment Information Area Segment
Segment Information Area Segment ✓ Net sales remained flat from a year earlier due to a decrease in sales of Canon products, other, albeit robust sales of IT Solutions. ✓ Operating income increased, mainly reflecting a rise in gross profit due to a higher percentage of sales of high value-added IT S
Slide 10: Segment Information Professional Segment
Segment Information Professional Segment ✓ Net sales increased, attributable to rising sales in the Production Printing and Healthcare business. ✓ Operating income declined due to a decrease in gross profit caused by lower sales in Industrial equipment. 1Q (Billions of yen) FY2023 FY2024 Changes Pro
Slide 11: Sales of Products and Services by Segment
1Q 2024 Actual Sales of Products and Services by Segment (from January 1 to March 31) (Billions of yen) Composition Consumers Enterprise Area Professional Other Total Ratio 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 SI services - - 17.4 18
Slide 12: Summary of Projections
Summary of Projections (Billions of yen) FY2024 FY2024 Changes FY2023 Changes Previous Current Projection Projection Amount % Actual Amount % Net Sales 630.0 645.0 +15.0 +2% 609.5 +35.5 +6% (8.6%) (8.4%) (-0.2%) (8.6%) (-0.2%) Operating Income 54.0 54.0 - - 52.5 +1.5 +3% (8.7%) (8.5%) (-0.2%) (8.8%)
Slide 13: Summary of Projections by Segment
Previous Projection vs Summary of Projections by Segment Current Projection (Billions of yen) FY2024 FY2024 Previous Current Changes Projection Projection Net Op. Net Op. Net Sales Op. Sales Income Sales Income Amount % Income Consumers 139.3 13.7 139.3 13.7 - - - Enterprise 231.2 20.5 231.2 20.5 -
Slide 14: Summary of Projections by Segment
FY2023 Actual vs Summary of Projections by Segment FY2024 Projection (Billions of yen) FY2023 FY2024 Changes Actual Projection Op. Op. Net Sales Op. Net Sales Net Sales Income Income Amount % Income Consumers 138.9 14.1 139.3 13.7 +0.4 +0% -0.4 Enterprise 220.3 19.7 231.2 20.5 +10.9 +5% +0.8 Area 22
Slide 15: Summary of Projections by Segment
Summary of Projections by Segment (Billions of yen) Actual Actual Actual Projection Changes Changes 1Q 2023 2Q-4Q 2023 1Q 2024 2Q-4Q 2024 1Q 2Q-4Q Net sales Op. Income Net sales Op. Income Net sales Op. Income Net sales Op. Income Net sales Op. Income Net sales Op. Income Consumers 32.6 3.1 106.3 11
Slide 16: Projections by Segment
Projections by Segment ◼ Consumers Segment ✓ Net sales are forecast to increase due to steady sales of digital interchangeable lens cameras and IT products. ✓ Operating income is expected to increase, reflecting a rise in gross profit due to higher sales. (Billions of yen) Actual Actual Actual Proje
Slide 17: Projections by Segment
Projections by Segment ◼ Area Segment ✓ Net sales are forecast to rise, reflecting strong sales of IT Solutions. ✓ Operating income is expected to increase, reflecting a rise in gross profit due to higher sales. (Billions of yen) Actual Actual Actual Projection Changes Changes 1Q 2023 2Q-4Q 2023 1Q
Slide 18: Outline of Main Products Sales
Outline of Main Products Sales Please see the Supplementary Material for 2024 1Q on our website. ・URL https://cweb.canon.jp/eng/ir/library/presentation.html 18
Slide 19: The Incorporation of Primagest, Inc.
The Incorporation of Primagest, Inc. ✓ Primagest, Inc. joined Canon MJ Group on March 29. ✓ We will merge Primagest‘s deep knowledge and customer base in the financial sector with Canon MJ Group’s customer base and technology across a range of industries to offer business process reform solutions ta
Slide 20: Canon Marketing Japan Group
Canon Canon Marketing Japan Group
Slide 21: Supplementary Information
Supplementary Information 21
Slide 22: Capital Relationship Diagram
Capital Relationship Diagram Canon Marketing Japan Inc. 57.76% Canon Inc. 73,303 100% Canon IT Solutions Inc. 90.00% Qualysite Technologies Inc. 3,617 100 100% TCS Inc. 868 87.50% Canon Software America,Inc. US$0.8 million 100% Canon System & Support Inc. 4,561 49.00% Canon IT Solutions (Thailand) 1
Slide 23: SG&A expenses
1Q 2024 Actual SG&A expenses (from January 1 to March 31) (Billions of yen) 1Q FY2023 1Q FY2024 Changes Advertising expenses 1.0 1.0 -0.0 Promotion expenses 0.8 0.6 -0.2 Warranty expenses 0.7 0.7 -0.0 Other direct selling expenses 4.4 4.3 -0.0 Personnel expenses 22.7 22.4 -0.4 Office expenses 2.0 1.
Slide 24: Non-operating income and expenses
Non-operating income and expenses (Billions of yen) FY2023 FY2024 Changes 1Q 1Q 1Q Interest income 0.1 0.1 +0.0 Dividend income 0.0 0.0 +0.0 Foreign exchange gains 0.0 0.0 +0.0 Other, net 0.1 0.1 +0.0 Total non-operating income 0.2 0.3 +0.0 Interest expense 0.0 0.0 -0.0 Loss on investments in partne
Slide 25: Extraordinary income and losses
Extraordinary income and losses (Billions of yen) FY2023 FY2024 Changes 1Q 1Q 1Q Gain on sales of long-lived assets 0.0 0.0 +0.0 Total extraordinary income 0.0 0.0 +0.0 Loss on sales and disposal of long-lived assets 0.0 0.0 +0.0 Loss on sales of shares of subsidiaries and associates 0.2 - -0.2 Othe
Slide 26: Balance Sheets
Balance Sheets (Billions of yen) ■Notes accounts receivable-trade and (Billions of yen) Dec. 31 Mar. 31 Changes 2023 2024 Assets 557.4 563.9 +6.6 contract assets Current assets 418.6 388.4 -30.2 Notes accounts receivable-trade and contract assets Cash and deposits 89.7 99.4 +9.7 Turnover (days) Note
Slide 27: Financial Indicator
Financial Indicator (Billions of yen) 8.2% 9.2% 8.7% 8.4% 8.5% 8.6% 6.6% 7.2% 6.6% 6.6% 6.6% 5.7% 5.7% 4.4% Net income attributable to owners of the parent Operating income margin ROE ROA 35.6 36.5 37.5 29.4 22.0 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Projection 27
Slide 28: Financial Indicator: Cash Flow, Capital Investment
Financial Indicator (Billions of yen) ■Cash Flow ■Capital Investment 18.2 18.5 1Q 2Q-4Q FY Actual Projection 13.8 14.6 FY 2023 Actual 2.4 7.0 9.4 FY 2024 Projection 3.6 12.2 15.8 3.9 -4.4 ■Depreciation and amortization 1Q 1Q 1Q 2Q-4Q FY 2023 2024 Actual Projection FY 2023 Actual 2.4 7.4 9.7 FY 2024
Slide 29: Financial Indicator
Financial Indicator Payout Ratio 43% 41% 33% 35% 33% 281 289 EPS : Yen 274 227 170 Dividend per share : Yen 120 120 90 75 60 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Projection 29
Slide 30: Sales Breakdown by Segment (FY2023)
Sales Breakdown by Segment (FY2023) (Billions of yen) 4 Professional 1 Consumers Net sales Operating income 6% Net sales Operating income 40.2 3.6 138.9 14.1 (9.0%) 22% (10.1%) Customers in specialized areas Individual customers -Production printing -Industrial equipment Net sales 609.5 -Healthcare
Slide 31: Business Summary by Segment
Business Summary by Segment 1 Consumers 2 Enterprise This segment sells imaging products, including cameras which are the For large, quasi-large and medium companies, this segment directly business Canon has been operating since its foundation, inkjet printers provides Canon products and IT Solution
Slide 32: Business Summary by Segment
Business Summary by Segment 3 Area 4 Professional Harnessing diverse channels consisting of indirect sales by business This segment offers solutions to customers in the specialized areas partners and system partners, and direct sales by Canon System and like Production printing, Industrial equipment
Slide 33: Contribution of the service business model to value creation
Enterprise and Area Segments Both Enterprise and Area segments are providing Canon products and IT Solutions, but their customers are different. Canon products IT Solutions business business Contribution of the service business model to value creation 1. Promote DX business through co-creation with
Slide 34: Edge Solutions (Mission-critical Total Solution System for Manufacturing Industry)
［for Quasi-major and upper medium-sized enterprises］ Edge Solutions (Mission-critical Total Solution System for Manufacturing Industry） Optimize and strengthen SCM Provide SCM/ERP total solution Issue in VUCA era utilizing mathematical technologies Production Scheduler Demand forecasts / supply and
Slide 35: HOME & IT Maintenance and Operation Services
［for SMEs］ HOME & IT Maintenance and Operation Services (Full Support for Business Innovation) Decrease in workforce Total support for selection, introduction and Issue Protection of information assets operation and maintenance of IT solutions NEW ◼ Management support services ◼ Security pack ◼ Main
Slide 36: Canon Marketing Japan Group
Canon Canon Marketing Japan Group
Canon Marketing Japan — Q1 2024 Earnings Presentation on 6ix