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 ….		July		……………………………………………… ,		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….		July 28, 2015						By ……/s/…………… Shinichi Aoyama ………
								(Signature)*
								Shinichi Aoyama                          Deputy Senior General Manager                          Group Management Center                          Canon Inc.

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

The following materials are included.

 

1.	CONSOLIDATED RESULTS FOR THE SECOND QUARTER AND THE FIRST HALF ENDED JUNE 30, 2015

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CONSOLIDATED RESULTS FOR THE SECOND QUARTER AND

THE FIRST HALF ENDED JUNE 30, 2015

July 27, 2015

CONSOLIDATED RESULTS FOR THE SECOND QUARTER

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

 

			Actual
		Three months ended June 30, 2015				Three months ended June 30, 2014				Change(%)								Three months ended June 30, 2015
Net sales		¥	974,406			¥	926,796				+				5.1			$	7,986,934
Operating profit			104,712				110,549				-				5.3				858,295
Income before income taxes			103,235				116,975				-				11.7				846,189
Net income attributable                          to Canon Inc.		¥	68,195			¥	80,848				-				15.7			$	558,975
Net income attributable to Canon Inc. stockholders per share:
- Basic		¥	62.45			¥	72.61				-				14.0			$	0.51
- Diluted			62.44				72.61				-				14.0				0.51
CONSOLIDATED RESULTS FOR THE FIRST HALF
							(Millions of yen, thousands of U.S. dollars, except per share amounts)
			Actual																				Projected
		Six months ended June 30, 2015				Six months ended June 30, 2014				Change(%)								Six months ended June 30, 2015				Year ending December 31, 2015				Change(%)
Net sales		¥	1,831,851			¥	1,795,108				+				2.0			$	15,015,172			¥	3,930,000				+				5.4
Operating profit			170,909				193,188				-				11.5				1,400,893				380,000				+				4.5
Income before income taxes			164,516				196,166				-				16.1				1,348,492				380,000				-				0.8
Net income attributable                          to Canon Inc.		¥	102,125			¥	128,458				-				20.5			$	837,090			¥	245,000				-				3.8
Net income attributable to Canon Inc. stockholders per share:
- Basic		¥	93.52			¥	114.47				-				18.3			$	0.77			¥	224.36				-				2.0
- Diluted			93.52				114.47				-				18.3				0.77				-								-
		Actual
		As of June 30, 2015				As of December 31, 2014				Change(%)								As of June 30, 2015
Total assets		¥	4,548,076			¥	4,460,618				+				2.0			$	37,279,311
Canon Inc. stockholders’ equity		¥	3,005,227			¥	2,978,184				+				0.9			$	24,633,008

 

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 JPY122=U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of June 30, 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 Second Quarter in Review

Looking back at the global economy in the second 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 Russian economy remained stagnant. The pace of economic expansion in China gradually declined while Southeast Asian countries faced slowdowns owing to local currency depreciation. As for the Japanese economy, improvement was seen in the corporate sector and employment conditions continued to recover. As a result, the global economy overall continued to realize 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, mainly for color models, while demand for semiconductor lithography equipment also increased, fueled by continued customer investment. As for cameras, demand continued to decline both for interchangeable-lens digital cameras and digital compact cameras. Additionally, demand for inkjet printers also decreased from the previous year due to sluggish market conditions in Southeast Asian countries.

The average values of the yen during the second quarter and first half of the year were ¥121.47 and ¥120.39 against the U.S. dollar, respectively, year-on-year depreciations of approximately ¥19 and ¥18, and ¥134.47 and ¥134.19 against the euro, respectively, year-on-year appreciations of approximately ¥5 and ¥6.

During the second quarter, despite firm sales in Japan, interchangeable-lens digital cameras continued to face severe conditions in other regions while sales volume for digital compact cameras decreased in most regions compared with the same period of the previous year. By contrast, sales of MFDs were strong and unit sales of semiconductor lithography equipment exceeded those for the same period of the previous year. Consequently, boosted by the positive effect of favorable currency exchange rates, second quarter net sales increased 5.1% year on year to ¥974.4 billion. Net sales for the six months ended June 30, 2015 totaled ¥1,831.9 billion, a year-on-year increase of 2.0%. The gross profit ratio for the second quarter, at 51.7%, remained at a high level thanks to highly profitable new products and ongoing cost-cutting activities, while operating expenses increased 7.0% year on year to ¥399.1 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, second-quarter operating profit decreased by 5.3% to ¥104.7 billion. Other income (deductions) decreased by ¥7.9 billion due to foreign currency exchange losses, leading to a year-on-year decline in income before income taxes of 11.7% to ¥103.2 billion, and a decrease in net income attributable to Canon Inc. of 15.7% to ¥68.2 billion. Operating profit for the first half of the year decreased by 11.5% to ¥170.9 billion while income before income tax decreased by 16.1% to ¥164.5 billion and first-half net income attributable to Canon Inc. decreased by 20.5% to ¥102.1 billion.

Basic net income attributable to Canon Inc. shareholders per share was ¥62.45 for the second quarter, a year-on-year decrease of ¥10.16, and ¥93.52 for the first half, a year-on-year decrease of ¥20.95.

 

- 2 -

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Results by Segment

Looking at Canon’s second-quarter performance by business unit, within the Office Business Unit, as for office MFDs, in addition to healthy demand for the color A4 (letter and legal-sized) imageRUNNER ADVANCE C350/C250 lineup and color imagePRESS C800/C700 models for the light production market, sales of new small-office/home-office color A3 (12”x18”) imageRUNNER ADVANCE C3300-series models, which feature high image quality, user-friendliness and productivity, proved popular in markets around the world. Among high-speed continuous-feed printers and wide-format printers, the new Océ-produced VarioPrint i300, Canon’s first high-speed sheet-fed color inkjet press, gained favorable reviews. As for laser printers, despite steadily growing demand for color models, total sales volume decreased due to weak sales of monochrome models. As a result, coupled with the positive effect of favorable currency exchange rates, sales for the business unit totaled ¥537.0 billion, a year-on-year increase of 2.8%, while operating profit totaled ¥79.4 billion, declining 9.9% due to the increase in R&D and other expenses. Sales for the combined first six months of the year totaled ¥1,066.1 billion, a year-on-year increase of 3.3%, while operating profit totaled ¥151.1 billion, a year-on-year decline of 5.9%.

Within the Imaging System Business Unit, although total sales volume of interchangeable-lens digital cameras declined due to market shrinkage, unit sales of interchangeable-lens digital cameras increased from the same period of the previous year in Japan thanks to healthy demand for such new models as the EOS 5DS, EOS 5DS R and EOS M3. As for digital compact cameras, although sales volume declined amid the ongoing contraction of the market due to the effects of the growing popularity of smartphones, profitability improved thanks to the growing ratio of high-added-value models featuring high image quality and high-magnification zoom capabilities, along with a smooth transition from old products to new products. As for inkjet printers, although sales volume in developed countries, such as the U.S. and Western European nations, increased from the same period of the previous year thanks to sales promotions for new products featuring enhanced mobile-device compatibility and MAXIFY business-model inkjet printers, total sales volume declined slightly due to economic stagnation in Southeast Asian countries. As a result, along with the positive effect of favorable currency exchange rates, sales for the business unit increased slightly to ¥332.5 billion, while operating profit totaled ¥50.5 billion, a decline of 0.9%. Sales for the combined first six months of the year totaled ¥595.2 billion, a year-on-year decrease of 4.8%, while operating profit totaled ¥79.6 billion, declining of 14.4% year on year.

In the Industry and Others Business Unit, within the semiconductor lithography equipment segment, ongoing strong investment by manufacturers led to an increase in second-quarter unit sales of lithography systems for memory devices, image sensors and power semiconductor devices compared with the same period of the previous year. As for FPD lithography equipment, amid solid market growth, unit sales for the quarter matched those for the corresponding period of the previous year, and progress was also made in orders and shipments. Looking at medical equipment, although sales volume for Canon’s mainstay digital radiography systems decreased from the same period of the previous year owing to fierce market competition, total sales for the segment increased year on year thanks to efforts to boost sales of high-value-added models. Consequently, along with the impact of the acquisition of Axis, which became a consolidated subsidiary in the second quarter, sales for the business unit increased 36.8% year on year to ¥130.4 billion, while operating profit recorded a loss of ¥3.1 billion owing to upfront investment into next-generation technologies. Sales for the combined first six months of the year totaled ¥219.7 billion, a year-on-year increase of 18.7%, while the operating loss totaled ¥10.9 billion.

Cash Flow

During the first half of 2015, cash flow from operating activities totaled ¥224.7 billion, declining ¥69.8 billion compared with the same period of the previous year due to the decrease in profit along with an increase in inventory. Cash flow from investing activities increased ¥163.9 billion year on year to ¥306.0 billion, mainly due to the payment for the acquisition of Axis. Accordingly, free cash flow totaled negative ¥81.3 billion, a decrease of ¥233.7 billion compared with the corresponding year-ago period.

Cash flow from financing activities recorded an outlay of ¥123.6 billion, mainly arising from the dividend payout.

 

- 3 -

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Owing to these factors, as well as the negative impact of foreign currency translation adjustments, cash and cash equivalents decreased by ¥217.6 billion to ¥627.0 billion from the end of the previous year.

Outlook

As for the outlook in the third quarter onward, the U.S. is expected to continue to lead the recovery of the global economy while projections for the European economy point to recovery mainly in Western Europe despite the uncertainty surrounding the political tensions between Russia and Ukraine. As for the Asian economy, beginning with China, despite lingering concerns, exports to the U.S. and Western Europe are expected to support a gradual recovery. With regard to the Japanese economy, the outlook indicates a gradual acceleration of the recovery trend amid improvements in employment conditions. Overall, the global economy is expected to move toward a modest recovery.

In the businesses in which Canon is involved, demand for MFDs is projected to expand moderately, mainly for color models. Likewise, demand for color multifunction models in the laser printer market is also expected to continue to realize growth. As for interchangeable-lens digital cameras, despite the slight weakness in the Chinese market, demand is expected to gradually recover in Europe and Southeast Asia, and continue to pick up momentum in the U.S. and Japanese markets. 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, forecasts indicate a year-on-year decline in sales due to weak market conditions in Southeast Asian countries. Within the industrial equipment market, the outlook points to an increase in demand for semiconductor lithography equipment compared with the previous year as manufacturers are expected to boost capital outlays in response to growing 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 for larger-size LCD panels offering higher levels of resolution.

With regard to currency exchange rates for the third quarter onward, on which the Company’s performance outlook is based, Canon anticipates exchange rates of ¥125 to the U.S. dollar and ¥135 to the euro, representing a depreciation of approximately ¥17 against the U.S. dollar and an appreciation of approximately ¥6 against the euro compared with the annual average rates of the previous year.

Upon taking into consideration these foreign exchange rate assumptions and the impact of the acquisition of Axis, Canon projects full-year consolidated net sales in 2015 of ¥3,930.0 billion, a year-on-year increase of 5.4%; operating profit of ¥380.0 billion, a year-on-year increase of 4.5%; income before income taxes of ¥380.0 billion, a year-on-year decrease of 0.8%; and net income attributable to Canon Inc. of ¥245.0 billion, a year-on-year decrease of 3.8%.

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		¥	3,860,000			¥	3,930,000			¥	70,000			¥	3,727,252				+5.4%
Operating profit			380,000				380,000				-				363,489				+4.5%
Income before income taxes			390,000				380,000				(10,000)				383,239				-0.8%
Net income attributable to Canon Inc.		¥	255,000			¥	245,000			¥	(10,000)			¥	254,797				-3.8%

 

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Basic Policy Regarding Profit Distribution

Canon is being more proactive in returning profits to shareholders, mainly in the form of a dividend, taking into consideration medium-term profit forecasts along with planned future investments, cash flow and other factors.

Canon Inc. plans to distribute an interim dividend of ¥75.00 per share for the fiscal year 2015, half the amount of the annual dividend paid out in fiscal 2014, to provide a stable return to shareholders. The year-end dividend, however, has yet to be decided.

 

 

- 5 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

II. Financial Statements

1. CONSOLIDATED BALANCE SHEETS

 

 

- 6 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

2. CONSOLIDATED STATEMENTS OF INCOME AND

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

- 7 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

 

- 8 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

3. DETAILS OF SALES

 

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

  2. The principal countries and regions included in each regional category are as follows:

 

- 9 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

4. CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Millions of yen
		Six months ended     June 30, 2015				Six months ended     June 30, 2014
Cash flows from operating activities:
Consolidated net income		¥	105,732			¥	132,986
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization			131,977				123,515
Loss on disposal of fixed assets			2,396				5,442
Deferred income taxes			(1,740)				(316)
Decrease in trade receivables			60,974				60,413
(Increase) decrease in inventories			(56,480)				2,603
Increase in trade payables			16,687				11,141
Increase (decrease) in accrued income taxes			(7,177)				8,851
Decrease in accrued expenses			(28,223)				(23,657)
Increase (decrease) in accrued (prepaid) pension and severance cost			3,690				(6,827)
Other, net			(3,124)				(19,664)
Net cash provided by operating activities			224,712				294,487
Cash flows from investing activities:
Purchases of fixed assets			(117,501)				(112,613)
Proceeds from sale of fixed assets			2,103				2,487
Purchases of available-for-sale securities			(98)				(226)
Proceeds from sale and maturity of available-for-sale securities			183				51
(Increase) decrease in time deposits, net			51,936				(31,044)
Acquisitions of subsidiaries, net of cash acquired			(241,386)				(11,301)
Purchases of other investments			(965)				-
Other, net			(278)				10,579
Net cash used in investing activities			(306,006)				(142,067)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			435				700
Repayments of long-term debt			(712)				(1,126)
Decrease in short-term loans, net			-				(48)
Dividends paid			(92,806)				(73,905)
Repurchases of treasury stock, net			803				(100,001)
Other, net			(31,285)				(2,007)
Net cash used in financing activities			(123,565)				(176,387)
Effect of exchange rate changes on cash and cash equivalents			(12,756)				(20,258)
Net change in cash and cash equivalents			(217,615)				(44,225)
Cash and cash equivalents at beginning of period			844,580				788,909
Cash and cash equivalents at end of period		¥	626,965			¥	744,684

 

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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

 

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

 

 

- 12 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

(2) SEGMENT INFORMATION BY GEOGRAPHIC AREA

 

 

- 13 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

 

- 14 -

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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

 

		June 30, 2015		December 31, 2014		Change
Subsidiaries		304		261		43
Affiliates		5		7		(2)
Total		309		268		41

 

2.

Change in Group Entities

 

Subsidiaries
Addition:		47 companies
Removal:		4 companies

 

Affiliates (Carried at Equity Basis)
Removal:		2 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.

 

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Canon Inc.

July 27, 2015

CONSOLIDATED RESULTS FOR THE SECOND QUARTER

AND THE FIRST HALF ENDED JUNE 30, 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

 

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.

 

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

				2015												2014														Change year over year
				2nd quarter				1st half				Year (P)				2nd quarter				1st half				Year						2nd quarter				1st half				Year
Japan
		Office			96,594				191,754				-				94,670				196,690				380,594						+2.0%				-2.5%			-
		Imaging System			48,582				86,736				-				39,913				93,256				207,281						+21.7%				-7.0%			-
		Industry and Others			30,361				62,190				-				29,971				66,321				136,442						+1.3%				-6.2%			-
		Total			175,537				340,680				723,400				164,554				356,267				724,317						+6.7%				-4.4%			-0.1%
Overseas
		Office			439,688				873,027				-				427,049				833,128				1,695,194						+3.0%				+4.8%			-
		Imaging System			283,626				507,821				-				292,359				531,629				1,135,220						-3.0%				-4.5%			-
		Industry and Others			75,555				110,323				-				42,834				74,084				172,521						+76.4%				+48.9%			-
		Total			798,869				1,491,171				3,206,600				762,242				1,438,841				3,002,935						+4.8%				+3.6%			+6.8%
		Americas
		Office			175,131				351,959				-				155,822				311,988				656,783						+12.4%				+12.8%			-
		Imaging System			97,489				161,469				-				90,473				156,370				345,707						+7.8%				+3.3%			-
		Industry and Others			20,204				28,371				-				6,875				13,343				34,010						+193.9%				+112.6%			-
		Total			292,824				541,799				1,191,100				253,170				481,701				1,036,500						+15.7%				+12.5%			+14.9%
		Europe
		Office			176,078				343,581				-				170,435				343,967				689,275						+3.3%				-0.1%			-
		Imaging System			86,026				157,074				-				94,597				176,148				367,050						-9.1%				-10.8%			-
		Industry and Others			15,093				22,501				-				7,316				14,144				34,159						+106.3%				+59.1%			-
		Total			277,197				523,156				1,067,800				272,348				534,259				1,090,484						+1.8%				-2.1%			-2.1%
		Asia and Oceania
		Office			88,479				177,487				-				100,792				177,173				349,136						-12.2%				+0.2%			-
		Imaging System			100,111				189,278				-				107,289				199,111				422,463						-6.7%				-4.9%			-
		Industry and Others			40,258				59,451				-				28,643				46,597				104,352						+40.6%				+27.6%			-
		Total			228,848				426,216				947,700				236,724				422,881				875,951						-3.3%				+0.8%			+8.2%
Intersegment
		Office			672				1,304				-				774				1,851				2,944						-13.2%				-29.6%			-
		Imaging System			326				635				-				115				311				693						+183.5%				+104.2%			-
		Industry and Others			24,451				47,157				-				22,512				44,682				89,802						+8.6%				+5.5%			-
		Eliminations			(25,449	)			(49,096	)			-				(23,401	)			(46,844	)			(93,439	)					-				-			-
		Total			0				0				0				0				0				0						-				-			-
Total
		Office			536,954				1,066,085				2,195,100				522,493				1,031,669				2,078,732						+2.8%				+3.3%			+5.6%
		Imaging System			332,534				595,192				1,310,000				332,387				625,196				1,343,194						+0.0%				-4.8%			-2.5%
		Industry and Others			130,367				219,670				515,200				95,317				185,087				398,765						+36.8%				+18.7%			+29.2%
		Eliminations			(25,449	)			(49,096	)			(90,300	)			(23,401	)			(46,844	)			(93,439	)					-				-			-
		Total			974,406				1,831,851				3,930,000				926,796				1,795,108				3,727,252						+5.1%				+2.0%			+5.4%

(P)=Projection

 

- S1 -

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Canon Inc.

 

2. SEGMENT INFORMATION BY BUSINESS UNIT

(Millions of yen)

				2015												2014														Change year over year
					2nd quarter				1st half				Year (P)				2nd quarter				1st half				Year						2nd quarter				1st half			Year
Office
		External customers			536,282				1,064,781				2,194,000				521,719				1,029,818				2,075,788						+2.8%				+3.4%			+5.7%
		Intersegment			672				1,304				1,100				774				1,851				2,944						-13.2%				-29.6%			-62.6%
		Total sales			536,954				1,066,085				2,195,100				522,493				1,031,669				2,078,732						+2.8%				+3.3%			+5.6%
		Operating profit			79,383				151,099				306,800				88,119				160,576				292,057						-9.9%				-5.9%			+5.0%
		% of sales			14.8%				14.2%				14.0%				16.9%				15.6%				14.0%						-				-			-
Imaging System
		External customers			332,208				594,557				1,308,500				332,272				624,885				1,342,501						-0.0%				-4.9%			-2.5%
		Intersegment			326				635				1,500				115				311				693						+183.5%				+104.2%			+116.5%
		Total sales			332,534				595,192				1,310,000				332,387				625,196				1,343,194						+0.0%				-4.8%			-2.5%
		Operating profit			50,489				79,607				203,000				50,962				92,988				194,601						-0.9%				-14.4%			+4.3%
		% of sales			15.2%				13.4%				15.5%				15.3%				14.9%				14.5%						-				-			-
Industry and Others
		External customers			105,916				172,513				427,500				72,805				140,405				308,963						+45.5%				+22.9%			+38.4%
		Intersegment			24,451				47,157				87,700				22,512				44,682				89,802						+8.6%				+5.5%			-2.3%
		Total sales			130,367				219,670				515,200				95,317				185,087				398,765						+36.8%				+18.7%			+29.2%
		Operating profit			(3,077	)			(10,916	)			(19,400	)			(2,487	)			(10,108	)			(21,801	)					-				-			-
		% of sales			-2.4%				-5.0%				-3.8%				-2.6%				-5.5%				-5.5%						-				-			-
Corporate and Eliminations
		External customers			-				-				-				-				-				-						-				-			-
		Intersegment			(25,449	)			(49,096	)			(90,300	)			(23,401	)			(46,844	)			(93,439	)					-				-			-
		Total sales			(25,449	)			(49,096	)			(90,300	)			(23,401	)			(46,844	)			(93,439	)					-				-			-
		Operating profit			(22,083	)			(48,881	)			(110,400	)			(26,045	)			(50,268	)			(101,368	)					-				-			-
Consolidated
		External customers			974,406				1,831,851				3,930,000				926,796				1,795,108				3,727,252						+5.1%				+2.0%			+5.4%
		Intersegment			-				-				-				-				-				-						-				-			-
		Total sales			974,406				1,831,851				3,930,000				926,796				1,795,108				3,727,252						+5.1%				+2.0%			+5.4%
		Operating profit			104,712				170,909				380,000				110,549				193,188				363,489						-5.3%				-11.5%			+4.5%
		% of sales			10.7%				9.3%				9.7%				11.9%				10.8%				9.8%						-				-			-
																															(P)=Projection
3. OTHER INCOME / DEDUCTIONS																																		(Millions of yen)
					2015												2014														Change year over year
				2nd quarter				1st half				Year (P)				2nd quarter				1st half				Year						2nd quarter				1st half				Year
		Interest and dividend, net			1,426				2,912				3,000				2,182				3,683				7,406						(756	)			(771	)		(4,406)
		Forex gain (loss)			(7,600	)			(15,526	)			(19,500	)			(1,848	)			(7,655	)			2,628						(5,752	)			(7,871	)		(22,128)
		Equity earnings of affiliated companies			6				307				300				119				212				478						(113	)			+95			(178)
		Other, net			4,691				5,914				16,200				5,973				6,738				9,238						(1,282	)			(824	)		+6,962
		Total			(1,477	)			(6,393	)			0				6,426				2,978				19,750						(7,903	)			(9,371	)		(19,750)
																															(P)=Projection

 

- S2 -

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Canon Inc.

 

4. BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT
				2015						2014
				2nd quarter		1st half		Year (P)		2nd quarter		1st half		Year
Office
		Monochrome copiers		16%		15%		16%		16%		15%		16%
		Color copiers		21%		20%		20%		19%		19%		19%
		Printers		41%		42%		41%		43%		43%		42%
		Others		22%		23%		23%		22%		23%		23%
Imaging System
		Cameras		66%		63%		62%		67%		64%		64%
		Inkjet printers		25%		28%		29%		25%		27%		27%
		Others		9%		9%		9%		8%		9%		9%
Industry and Others
		Lithography equipment		23%		21%		22%		28%		22%		23%
		Others		77%		79%		78%		72%		78%		77%
														(P)=Projection
5. SALES GROWTH IN LOCAL CURRENCY (Year over year)
				2015
				2nd quarter		1st half		Year (P)
Office
		Japan		+2.0%		-2.5%		-
		Overseas		-6.8%		-4.3%		-
		Total		-5.2%		-4.0%		-1.2%
Imaging System
		Japan		+21.7%		-7.0%		-
		Overseas		-11.7%		-12.2%		-
		Total		-7.6%		-11.4%		-8.5%
Industry and Others
		Japan		+1.3%		-6.2%		-
		Overseas		+71.8%		+44.7%		-
		Total		+34.7%		+17.0%		+27.6%
Total
		Japan		+6.7%		-4.4%		-0.1%
		Overseas		-4.2%		-4.7%		-0.9%
		Americas		-2.2%		-4.1%		-0.0%
		Europe		+2.7%		-0.7%		-0.4%
		Asia and Oceania		-14.4%		-10.4%		-2.4%
		Total		-2.3%		-4.6%		-0.7%
								(P)=Projection

 

- S3 -

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												Canon Inc.
6. PROFITABILITY
				2015				2014
				1st half		Year (P)		1st half		Year
ROE *1				6.8%		8.1%		9.0%		8.7%
ROA *2				4.5%		5.4%		6.2%		5.9%
*1 Return on Equity ; Based on Net Income attributable to Canon Inc. and Total Canon Inc. Shareholders’ Equity										(P)=Projection
*2 Return on Assets ; Based on Net Income attributable to Canon Inc.
7. IMPACT OF FOREIGN EXCHANGE RATES
		(1) Exchange rates														(Yen)
				2015								2014
				2nd quarter		1st half		2nd half (P)		Year (P)		2nd quarter		1st half		Year
		Yen/US$		121.47		120.39		125.00		122.83		102.13		102.40		106.18
		Yen/Euro		134.47		134.19		135.00		134.60		139.94		140.35		140.62
																(P)=Projection
		(2) Impact of foreign exchange rates on sales (Year over year)						(Billions of yen)
				2015
				2nd quarter		1st half		Year (P)
		US$		+59.4		+105.3		+196.8
		Euro		(10.0)		(21.5)		(43.1)
		Other currencies		+10.6		+17.2		+34.9
		Total		+60.0		+101.0		+188.6
								(P)=Projection
		(3) Impact of foreign exchange rates per yen		(Billions of yen)
				2015
				2nd half (P)
On sales
		US$		7.8
		Euro		3.3
On operating profit
		US$		2.7
		Euro		1.5
				(P)=Projection
8. STATEMENTS OF CASH FLOWS												(Millions of yen)
				2015						2014
				2nd quarter		1st half		Year (P)		2nd quarter		1st half		Year
Net cash provided by operating activities				125,260		224,712		502,000		162,233		294,487		583,927
Net cash used in investing activities				(272,285)		(306,006)		(492,000)		(85,592)		(142,067)		(269,298)
Free cash flow				(147,025)		(81,294)		10,000		76,641		152,420		314,629
Net cash used in financing activities				(28,962)		(123,565)		(179,000)		(50,643)		(176,387)		(300,886)
Effect of exchange rate changes on cash and cash equivalents				9,251		(12,756)		(25,600)		(8,405)		(20,258)		41,928
Net change in cash and cash equivalents				(166,736)		(217,615)		(194,600)		17,593		(44,225)		55,671
Cash and cash equivalents at end of period				626,965		626,965		650,000		744,684		744,684		844,580
												(P)=Projection

 

- S4 -

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Canon Inc.

 

9. R&D EXPENDITURE														(Millions of yen)
				2015						2014
				2nd quarter		1st half		Year (P)		2nd quarter		1st half		Year
		Office		27,246		54,618		-		26,013		50,699		104,391
		Imaging System		23,449		44,888		-		21,026		41,966		87,510
		Industry and Others		18,085		30,369		-		6,549		12,743		26,516
		Corporate and Eliminations		14,913		33,057		-		23,299		46,297		90,562
		Total		83,693		162,932		330,000		76,887		151,705		308,979
% of sales				8.6%		8.9%		8.4%		8.3%		8.5%		8.3%
														(P)=Projection
10. INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION														(Millions of yen)
				2015						2014
				2nd quarter		1st half		Year (P)		2nd quarter		1st half		Year
Increase in PP&E				58,829		104,031		200,000		46,963		85,017		182,343
Depreciation and amortization				67,561		131,977		270,000		62,163		123,515		263,480
														(P)=Projection
11. INVENTORIES
(1) Inventories						(Millions of yen)
				2015		2014		Difference
				Jun.30		Dec.31
		Office		255,842		238,344		+17,498
		Imaging System		189,020		168,802		+20,218
		Industry and Others		146,621		121,021		+25,600
		Total		591,483		528,167		+63,316
(2) Inventories/Sales*								(Days)
				2015		2014		Difference
				Jun.30		Dec.31
		Office		44		42		+2
		Imaging System		58		43		+15
		Industry and Others		157		132		+25
		Total		59		50		+9
*Index based on the previous six months sales.
12. DEBT RATIO
				2015		2014		Difference
				Jun.30		Dec.31
Total debt / Total assets				0.0%		0.0%		0.0%
13. OVERSEAS PRODUCTION RATIO*
				2015		2014
				1st half		Year
Overseas production ratio				48%		45%
*From this quarter, the method used to calculate the overseas production ratio has changed. The distinctions between domestic and overseas of parts supplied overseas from Japan as well as other adjustments have been made to more accurately reflect the underlying reality. Past figures have been adjusted to conform to the new method of calculation.
14. NUMBER OF EMPLOYEES
				2015		2014		Difference
				Jun.30		Dec.31
		Japan		69,272		69,201		+71
		Overseas		125,726		122,688		+3,038
		Total		194,998		191,889		+3,109

 

- S5 -