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 ….		October		……………………………………………… ,		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….		October 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 THIRD QUARTER AND THE NINE MONTHS ENDED SEPTEMBER 30, 2015

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CONSOLIDATED RESULTS FOR THE THIRD QUARTER AND

THE NINE MONTHS ENDED SEPTEMBER 30, 2015

October 27, 2015

CONSOLIDATED RESULTS FOR THE THIRD QUARTER

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

 

			Actual
		Three months ended September 30, 2015				Three months ended September 30, 2014				Change(%)								Three months ended September 30, 2015
Net sales		¥	925,782			¥	872,208				+				6.1			$	7,714,850
Operating profit			77,259				71,832				+				7.6				643,825
Income before income taxes			73,961				80,164				-				7.7				616,342
Net income attributable                          to Canon Inc.		¥	49,180			¥	58,249				-				15.6			$	409,833
Net income attributable to Canon Inc. stockholders per share:
- Basic		¥	45.03			¥	52.67				-				14.5			$	0.38
- Diluted			45.03				52.67				-				14.5				0.38
CONSOLIDATED RESULTS FOR THE NINE MONTHS
							(Millions of yen, thousands of U.S. dollars, except per share amounts)
			Actual																				Projected
		Nine months ended September 30, 2015				Nine months ended September 30, 2014				Change(%)								Nine months ended September 30, 2015				Year ending December 31, 2015				Change(%)
Net sales		¥	2,757,633			¥	2,667,316				+				3.4			$	22,980,275			¥	3,820,000				+				2.5
Operating profit			248,168				265,020				-				6.4				2,068,067				365,000				+				0.4
Income before income taxes			238,477				276,330				-				13.7				1,987,308				355,000				-				7.4
Net income attributable                          to Canon Inc.		¥	151,305			¥	186,707				-				19.0			$	1,260,875			¥	225,000				-				11.7
Net income attributable to Canon Inc. stockholders per share:
- Basic		¥	138.56			¥	167.10				-				17.1			$	1.15			¥	206.04				-				10.0
- Diluted			138.55				167.10				-				17.1				1.15				-								-
		Actual
		As of September 30, 2015				As of December 31, 2014				Change(%)								As of September 30, 2015
Total assets		¥	4,399,122			¥	4,460,618				-				1.4			$	36,659,350
Canon Inc. stockholders’ equity		¥	2,903,342			¥	2,978,184				-				2.5			$	24,194,517

 

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 JPY120=U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of September 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

 

- 1 -

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I. Operating Results and Financial Conditions

2015 Third Quarter in Review

Looking back at the global economy in the third quarter of 2015, the U.S. economy continued recovering smoothly as employment conditions steadily improved. As for Europe, Western European countries led a steady economic recovery. In contrast, China’s economic slowdown grew more prominent while Southeast Asian countries also faced slowdowns owing to the further depreciation of local currencies. As for the Japanese economy, improvements were seen in corporate earnings and employment conditions also continued to recover. As a result, the global economy overall continued to realize moderate growth despite some weakness in China and Southeast Asia.

As for the markets in which Canon operates amid these conditions, sales of office multifunction devices (MFDs) and laser printers increased gradually thanks to strong demand for color models in developed countries, although demand for monochrome models declined due to the economic slowdown in China and Southeast Asia. As for cameras, demand for both interchangeable-lens digital cameras and digital compact cameras continued to decline compared with last year. Additionally, demand for inkjet printers also decreased slightly from the previous year due to sluggish market conditions in China and Southeast Asia, although demand for semiconductor lithography equipment increased, fueled by continued customer investment.

The average values of the yen during the third quarter and first nine months were ¥122.12 and ¥120.96 against the U.S. dollar, respectively, year-on-year depreciations of approximately ¥18 for both periods, and ¥135.93 and ¥134.74 against the euro, respectively, year-on-year appreciations of approximately ¥2 and ¥5.

During the third quarter, despite a gradual recovery in sales of interchangeable-lens digital cameras in Japan and Europe, severe conditions continued in other regions while sales volume for digital compact cameras decreased compared with the same period of the previous year. As for office MFDs and laser printers, although sales of color machines were strong, sales of monochrome models were sluggish. Looking at semiconductor lithography equipment and flat panel display (FPD) lithography equipment, unit sales for the quarter exceeded those for the same period of the previous year, supported by favorable market conditions. Consequently, benefitting from the boost provided by the acquisition of Axis and the positive effect of favorable currency exchange rates, third quarter net sales increased 6.1% year on year to ¥925.8 billion. Net sales for the nine months ended September 30, 2015 totaled ¥2,757.6 billion, a year-on-year increase of 3.4%. The gross profit ratio for the third quarter rose 1.2 points year on year to 50.7% thanks to ongoing cost-cutting activities and highly profitable new products, and the gross profit ratio for the first nine months also increased by 0.7 points to 51.2%, remaining at a high level. Operating expenses increased 9.0% year on year to ¥392.0 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 impact of the acquisition of Axis and an increase in R&D expenses related to new products. As a result, third-quarter operating profit increased by 7.6% to ¥77.3 billion. Other income (deductions) decreased by ¥11.6 billion due to foreign currency exchange losses, leading to a year-on-year decline in income before income taxes of 7.7% to ¥74.0 billion, and a decrease in net income attributable to Canon Inc. of 15.6% to ¥49.2 billion. Operating profit for the first nine months of the year decreased by 6.4% to ¥248.2 billion while income before income tax decreased by 13.7% to ¥238.5 billion, and net income attributable to Canon Inc. for the first nine months decreased by 19.0% to ¥151.3 billion.

Basic net income attributable to Canon Inc. shareholders per share for the third quarter was ¥45.03, a decrease of ¥7.64 compared with the corresponding quarter of the previous year, and ¥138.56 for the first nine months of 2015, a year-on-year decrease of ¥28.54.

 

- 2 -

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Results by Segment

Looking at Canon’s third-quarter performance by business unit, within the Office Business Unit, as for office MFDs, despite strong sales around the world of new small-office/home-office color A3 (12”x18”) imageRUNNER ADVANCE C3300-series models, which feature high image quality, user-friendliness and robust productivity, and the color A4 (letter and legal-sized) imageRUNNER ADVANCE C350/C250 lineup, total sales volume decreased, mainly due to weak sales of monochrome models in the Asian market. 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, although total sales volume declined due to weak sales of monochrome models, sales of color machines increased compared with the same period of last year while sales of consumables enjoyed solid growth supported by demand in developed countries. As a result, coupled with the positive effect of favorable currency exchange rates, sales for the business unit totaled ¥510.7 billion, a year-on-year increase of 5.9%, while operating profit totaled ¥67.2 billion, a year-on-year increase of 16.2%. Sales for the combined first nine months of the year totaled ¥1,576.8 billion, growing 4.2% year on year, while operating profit totaled ¥218.3 billion, dipping 0.1% year on year.

Within the Imaging System Business Unit, although total sales volume of interchangeable-lens digital cameras declined due to market shrinkage, sales of interchangeable-lens digital cameras increased from the same period of the previous year in Japan and Europe owing to healthy demand for such new models as the EOS 5DS, EOS 5DS R, EOS Rebel T6i/EOS 750D, EOS Rebel T6s/EOS 760D and EOS M3. As for digital compact cameras, while 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, such as the new PowerShot SX710 HS and PowerShot G3 X. As for inkjet printers, although printer unit sales volume declined from the same period of the previous year owing to the sluggish market in Southeast Asia, sales increased slightly thanks to strong sales of consumables. As a result, sales for the business unit decreased by 4.2% to ¥302.5 billion, while operating profit totaled ¥41.7 billion, a decline of 3.8%. Sales for the combined first nine months of the year totaled ¥897.7 billion, a year-on-year decrease of 4.6%, while operating profit totaled ¥121.3 billion, declining 11.0% year on year.

In the Industry and Others Business Unit, within the semiconductor lithography equipment segment, ongoing strong investment by manufacturers led to healthy sales of lithography systems for memory devices, image sensors and power semiconductor devices. The FPD lithography equipment market also enjoyed strong demand. As a result, unit sales of semiconductor lithography equipment and FPD lithography equipment for the quarter significantly exceeded those for the same period of the previous year. Consequently, along with the impact of the acquisition of Axis, which was consolidated in the second quarter, sales for the business unit increased 43.1% year on year to ¥138.8 billion while operating profit increased by ¥5.6 billion to ¥0.6 billion. Sales for the combined first nine months of the year totaled ¥358.4 billion, a year-on-year increase of 27.1%, while the operating loss totaled ¥10.3 billion owing to upfront investment into next-generation technologies.

Cash Flow

During the first nine months of 2015, cash flow from operating activities totaled ¥330.8 billion, declining ¥67.7 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 ¥133.1 billion year on year to ¥364.5 billion, mainly due to the payment for the acquisition of Axis. Accordingly, free cash flow totaled negative ¥33.7 billion, a decrease of ¥200.8 billion compared with the corresponding year-ago period.

Cash flow from financing activities recorded an outlay of ¥210.0 billion, mainly arising from the dividend payout.

Owing to these factors, as well as the negative impact of foreign currency translation adjustments, cash and cash equivalents decreased by ¥263.3 billion to ¥581.2 billion from the end of the previous year.

 

- 3 -

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Outlook

As for the outlook in the fourth quarter, the pace of recovery in the U.S. is expected to grow stronger as employment conditions improve, while projections for the European economy point to a gradual recovery, mainly in such Western European countries as the U.K. and Germany, despite the uncertainty surrounding Russia and other developing countries in the region. With regard to the Japanese economy, the outlook indicates a gradual recovery trend, although one lacking in strength. Conversely, within the Asian economy, beginning with China, the slowdown has been growing more pronounced with a quick recovery becoming increasingly unlikely. Overall, however, the global economy is expected to move toward a modest recovery led by the U.S. and Europe.

In the businesses in which Canon is involved, although demand for office MFDs and laser printers is expected to continue to grow in developed countries, sales in China and Southeast Asia will likely face prolonged stagnation. As for interchangeable-lens digital cameras, despite the strong recovery in Japan, the U.S. and Western Europe, the market is expected to shrink due to the deterioration of the economies in the Asian region and other factors. While the digital compact camera market is also expected to shrink, demand for high-added-value models featuring high image quality and high-magnification zoom capabilities is expected to grow steadily. Looking at inkjet printers, sales are forecast to decline slightly year on year due to weak market conditions in Asian countries. Within the industrial equipment market, the outlook calls for an increase in demand for semiconductor lithography equipment compared with the previous year as manufacturers are expected to boost capital outlays, as well as increased demand for FPD lithography equipment as device manufacturers boost capital investment for larger-size LCD panels offering higher levels of resolution.

With regard to currency exchange rates for the fourth quarter, on which the Company’s performance outlook is based, Canon anticipates exchange rates of ¥120 to the U.S. dollar and ¥135 to the euro, representing a depreciation of approximately ¥15 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 the sudden economic slowdown in China and elsewhere across Asia as well as other developing countries, along with the negative impact on sales and gross profit due to a revised foreign exchange rate assumption, Canon projects full-year consolidated net sales in 2015 of ¥3,820.0 billion, a year-on-year increase of 2.5%; operating profit of ¥365.0 billion, a year-on-year increase of 0.4%; income before income taxes of ¥355.0 billion, a year-on-year decrease of 7.4%; and net income attributable to Canon Inc. of ¥225.0 billion, a year-on-year decrease of 11.7%.

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		¥	3,930,000			¥	3,820,000			¥	(110,000)			¥	3,727,252				+2.5%
Operating profit			380,000				365,000				(15,000)				363,489				+0.4%
Income before income taxes			380,000				355,000				(25,000)				383,239				-7.4%
Net income attributable to Canon Inc.		¥	245,000			¥	225,000			¥	(20,000)			¥	254,797				-11.7%

 

- 4 -

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- 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
		Nine months ended   September 30, 2015				Nine months ended   September 30, 2014
Cash flows from operating activities:
Consolidated net income		¥	158,032			¥	192,924
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization			201,475				190,089
Loss on disposal of fixed assets			4,582				7,936
Deferred income taxes			(6,510)				(2,802)
Decrease in trade receivables			92,140				76,748
Increase in inventories			(76,601)				(14,179)
Increase in trade payables			9,980				3,196
Decrease in accrued income taxes			(21,868)				(10,722)
Decrease in accrued expenses			(3,854)				(120)
Increase (decrease) in accrued (prepaid) pension and severance cost			5,224				(6,618)
Other, net			(31,768)				(37,902)
Net cash provided by operating activities			330,832				398,550
Cash flows from investing activities:
Purchases of fixed assets			(175,268)				(160,629)
Proceeds from sale of fixed assets			2,464				3,096
Purchases of available-for-sale securities			(98)				(266)
Proceeds from sale and maturity of available-for-sale securities			183				2,572
(Increase) decrease in time deposits, net			53,052				(33,542)
Acquisitions of subsidiaries, net of cash acquired			(241,386)				(53,285)
Purchases of other investments			(1,103)				-
Other, net			(2,309)				10,664
Net cash used in investing activities			(364,465)				(231,390)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			557				848
Repayments of long-term debt			(997)				(1,430)
Increase (decrease) in short-term loans, net			18				(50)
Dividends paid			(174,711)				(145,790)
Repurchases of treasury stock, net			799				(100,000)
Other, net			(35,624)				(4,279)
Net cash used in financing activities			(209,958)				(250,701)
Effect of exchange rate changes on cash and cash equivalents			(19,742)				1,958
Net change in cash and cash equivalents			(263,333)				(81,583)
Cash and cash equivalents at beginning of period			844,580				788,909
Cash and cash equivalents at end of period		¥	581,247			¥	707,326

 

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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

 

		September 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.

 

- 15 -

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Canon Inc.

Oct. 27, 2015

CONSOLIDATED RESULTS FOR THE THIRD QUARTER

AND NINE MONTHS ENDED SEPTEMBER 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
				3rd quarter				YTD				Year (P)				3rd quarter				YTD				Year						3rd quarter				YTD				Year
Japan
		Office			88,719				280,473				-				86,568				283,258				380,594						+2.5%				-1.0%			-
		Imaging System			45,045				131,781				-				43,210				136,466				207,281						+4.2%				-3.4%			-
		Industry and Others			36,099				98,289				-				30,518				96,839				136,442						+18.3%				+1.5%			-
		Total			169,863				510,543				728,400				160,296				516,563				724,317						+6.0%				-1.2%			+0.6%
Overseas
		Office			421,380				1,294,407				-				395,053				1,228,181				1,695,194						+6.7%				+5.4%			-
		Imaging System			257,121				764,942				-				272,448				804,077				1,135,220						-5.6%				-4.9%			-
		Industry and Others			77,418				187,741				-				44,411				118,495				172,521						+74.3%				+58.4%			-
		Total			755,919				2,247,090				3,091,600				711,912				2,150,753				3,002,935						+6.2%				+4.5%			+3.0%
		Americas
		Office			185,315				537,274				-				160,979				472,967				656,783						+15.1%				+13.6%			-
		Imaging System			80,608				242,077				-				76,181				232,551				345,707						+5.8%				+4.1%			-
		Industry and Others			25,104				53,475				-				7,784				21,127				34,010						+222.5%				+153.1%			-
		Total			291,027				832,826				1,152,300				244,944				726,645				1,036,500						+18.8%				+14.6%			+11.2%
		Europe
		Office			151,415				494,996				-				153,735				497,702				689,275						-1.5%				-0.5%			-
		Imaging System			82,645				239,719				-				81,462				257,610				367,050						+1.5%				-6.9%			-
		Industry and Others			16,423				38,924				-				8,653				22,797				34,159						+89.8%				+70.7%			-
		Total			250,483				773,639				1,070,200				243,850				778,109				1,090,484						+2.7%				-0.6%			-1.9%
		Asia and Oceania
		Office			84,650				262,137				-				80,339				257,512				349,136						+5.4%				+1.8%			-
		Imaging System			93,868				283,146				-				114,805				313,916				422,463						-18.2%				-9.8%			-
		Industry and Others			35,891				95,342				-				27,974				74,571				104,352						+28.3%				+27.9%			-
		Total			214,409				640,625				869,100				223,118				645,999				875,951						-3.9%				-0.8%			-0.8%
Intersegment
		Office			625				1,929				-				629				2,480				2,944						-0.6%				-22.2%			-
		Imaging System			294				929				-				175				486				693						+68.0%				+91.2%			-
		Industry and Others			25,253				72,410				-				22,054				66,736				89,802						+14.5%				+8.5%			-
		Eliminations			(26,172	)			(75,268	)			-				(22,858	)			(69,702	)			(93,439	)					-				-			-
		Total			0				0				0				0				0				0						-				-			-
Total
		Office			510,724				1,576,809				2,126,800				482,250				1,513,919				2,078,732						+5.9%				+4.2%			+2.3%
		Imaging System			302,460				897,652				1,255,500				315,833				941,029				1,343,194						-4.2%				-4.6%			-6.5%
		Industry and Others			138,770				358,440				538,200				96,983				282,070				398,765						+43.1%				+27.1%			+35.0%
		Eliminations			(26,172	)			(75,268	)			(100,500	)			(22,858	)			(69,702	)			(93,439	)					-				-			-
		Total			925,782				2,757,633				3,820,000				872,208				2,667,316				3,727,252						+6.1%				+3.4%			+2.5%

(P)=Projection

 

- S1 -

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Canon Inc.

 

2. SEGMENT INFORMATION BY BUSINESS UNIT

(Millions of yen)

				2015												2014														Change year over year
					3rd quarter				YTD				Year (P)				3rd quarter				YTD				Year						3rd quarter				YTD			Year
Office
		External customers			510,099				1,574,880				2,124,500				481,621				1,511,439				2,075,788						+5.9%				+4.2%			+2.3%
		Intersegment			625				1,929				2,300				629				2,480				2,944						-0.6%				-22.2%			-21.9%
		Total sales			510,724				1,576,809				2,126,800				482,250				1,513,919				2,078,732						+5.9%				+4.2%			+2.3%
		Operating profit			67,244				218,343				295,400				57,892				218,468				292,057						+16.2%				-0.1%			+1.1%
		% of sales			13.2%				13.8%				13.9%				12.0%				14.4%				14.0%						-				-			-
Imaging System
		External customers			302,166				896,723				1,254,300				315,658				940,543				1,342,501						-4.3%				-4.7%			-6.6%
		Intersegment			294				929				1,200				175				486				693						+68.0%				+91.2%			+73.2%
		Total sales			302,460				897,652				1,255,500				315,833				941,029				1,343,194						-4.2%				-4.6%			-6.5%
		Operating profit			41,706				121,313				188,500				43,346				136,334				194,601						-3.8%				-11.0%			-3.1%
		% of sales			13.8%				13.5%				15.0%				13.7%				14.5%				14.5%						-				-			-
Industry and Others
		External customers			113,517				286,030				441,200				74,929				215,334				308,963						+51.5%				+32.8%			+42.8%
		Intersegment			25,253				72,410				97,000				22,054				66,736				89,802						+14.5%				+8.5%			+8.0%
		Total sales			138,770				358,440				538,200				96,983				282,070				398,765						+43.1%				+27.1%			+35.0%
		Operating profit			621				(10,295	)			(15,000	)			(4,952	)			(15,060	)			(21,801	)					-				-			-
		% of sales			0.4%				-2.9%				-2.8%				-5.1%				-5.3%				-5.5%						-				-			-
Corporate and Eliminations
		External customers			-				-				-				-				-				-						-				-			-
		Intersegment			(26,172	)			(75,268	)			(100,500	)			(22,858	)			(69,702	)			(93,439	)					-				-			-
		Total sales			(26,172	)			(75,268	)			(100,500	)			(22,858	)			(69,702	)			(93,439	)					-				-			-
		Operating profit			(32,312	)			(81,193	)			(103,900	)			(24,454	)			(74,722	)			(101,368	)					-				-			-
Consolidated
		External customers			925,782				2,757,633				3,820,000				872,208				2,667,316				3,727,252						+6.1%				+3.4%			+2.5%
		Intersegment			-				-				-				-				-				-						-				-			-
		Total sales			925,782				2,757,633				3,820,000				872,208				2,667,316				3,727,252						+6.1%				+3.4%			+2.5%
		Operating profit			77,259				248,168				365,000				71,832				265,020				363,489						+7.6%				-6.4%			+0.4%
		% of sales			8.3%				9.0%				9.6%				8.2%				9.9%				9.8%						-				-			-
																															(P)=Projection
3. OTHER INCOME / DEDUCTIONS																																		(Millions of yen)
					2015												2014														Change year over year
				3rd quarter				YTD				Year (P)				3rd quarter				YTD				Year						3rd quarter				YTD				Year
		Interest and dividend, net			882				3,794				3,900				1,706				5,389				7,406						(824	)			(1,595	)		(3,506)
		Forex gain (loss)			(5,614	)			(21,140	)			(24,600	)			5,684				(1,971	)			2,628						(11,298	)			(19,169	)		(27,228)
		Equity earnings of affiliated companies			30				337				0				98				310				478						(68	)			+27			(478)
		Other, net			1,404				7,318				10,700				844				7,582				9,238						+560				(264	)		+1,462
		Total			(3,298	)			(9,691	)			(10,000	)			8,332				11,310				19,750						(11,630	)			(21,001	)		(29,750)
																															(P)=Projection

 

- S2 -

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Canon Inc.

 

4. BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT
				2015						2014
				3rd quarter		YTD		Year (P)		3rd quarter		YTD		Year
Office
		Monochrome copiers		16%		15%		16%		16%		16%		16%
		Color copiers		19%		20%		21%		19%		19%		19%
		Printers		41%		42%		40%		42%		42%		42%
		Others		24%		23%		23%		23%		23%		23%
Imaging System
		Cameras		62%		63%		62%		65%		65%		64%
		Inkjet printers		28%		28%		29%		27%		27%		27%
		Others		10%		9%		9%		8%		8%		9%
Industry and Others
		Lithography equipment		25%		22%		23%		25%		23%		23%
		Others		75%		78%		77%		75%		77%		77%
														(P)=Projection
5. SALES GROWTH IN LOCAL CURRENCY (Year over year)
				2015
				3rd quarter		YTD		Year (P)
Office
		Japan		+2.5%		-1.0%		-
		Overseas		-3.5%		-4.0%		-
		Total		-2.4%		-3.5%		-3.3%
Imaging System
		Japan		+4.2%		-3.4%		-
		Overseas		-13.1%		-12.5%		-
		Total		-10.7%		-11.1%		-11.0%
Industry and Others
		Japan		+18.3%		+1.5%		-
		Overseas		+70.8%		+54.5%		-
		Total		+41.5%		+25.4%		+33.8%
Total
		Japan		+6.0%		-1.2%		+0.6%
		Overseas		-2.5%		-4.0%		-3.1%
		Americas		+2.3%		-2.0%		-1.7%
		Europe		+2.0%		+0.2%		-0.1%
		Asia and Oceania		-12.9%		-11.2%		-8.5%
		Total		-1.0%		-3.4%		-2.4%
								(P)=Projection

 

- S3 -

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												Canon Inc.
6. PROFITABILITY
				2015				2014
				YTD		Year (P)		YTD		Year
ROE *1				6.9%		7.6%		8.6%		8.7%
ROA *2				4.6%		5.0%		5.9%		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
				3rd quarter		YTD		4th quarter (P)		Year (P)		3rd quarter		YTD		Year
Yen/US$				122.12		120.96		120.00		120.71		104.22		103.01		106.18
Yen/Euro				135.93		134.74		135.00		134.82		137.78		139.53		140.62
																(P)=Projection
(2) Impact of foreign exchange rates on sales (Year over year)								(Billions of yen)
				2015
				3rd quarter		YTD		Year (P)
		US$		+50.2		+155.5		+169.1
		Euro		(3.6)		(25.0)		(41.1)
		Other currencies		+5.8		+22.8		+20.1
Total				+52.4		+153.3		+148.1
								(P)=Projection
(3) Impact of foreign exchange rates per yen				(Billions of yen)
				2015
				4th quarter (P)
On sales
		US$		3.6
		Euro		1.8
On operating profit
		US$		1.3
		Euro		0.8
				(P)=Projection
8. STATEMENTS OF CASH FLOWS												(Millions of yen)
				2015						2014
				3rd quarter		YTD		Year (P)		3rd quarter		YTD		Year
Net cash provided by operating activities				106,120		330,832		465,000		104,063		398,550		583,927
Net cash used in investing activities				(58,459)		(364,465)		(445,000)		(89,323)		(231,390)		(269,298)
Free cash flow				47,661		(33,633)		20,000		14,740		167,160		314,629
Net cash used in financing activities				(86,393)		(209,958)		(210,000)		(74,314)		(250,701)		(300,886)
Effect of exchange rate changes on cash and cash equivalents				(6,986)		(19,742)		(24,600)		22,216		1,958		41,928
Net change in cash and cash equivalents				(45,718)		(263,333)		(214,600)		(37,358)		(81,583)		55,671
Cash and cash equivalents at end of period				581,247		581,247		630,000		707,326		707,326		844,580
												(P)=Projection

 

- S4 -

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Canon Inc.

 

9. R&D EXPENDITURE														(Millions of yen)
				2015						2014
				3rd quarter		YTD		Year (P)		3rd quarter		YTD		Year
		Office		25,692		80,310		-		23,758		74,457		104,391
		Imaging System		22,139		67,027		-		20,262		62,228		87,510
		Industry and Others		16,245		46,614		-		6,402		19,145		26,516
		Corporate and Eliminations		18,197		51,254		-		24,705		71,002		90,562
		Total		82,273		245,205		325,000		75,127		226,832		308,979
% of sales				8.9%		8.9%		8.5%		8.6%		8.5%		8.3%
														(P)=Projection
10. INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION														(Millions of yen)
				2015						2014
				3rd quarter		YTD		Year (P)		3rd quarter		YTD		Year
Increase in PP&E				44,295		148,326		195,000		42,277		127,294		182,343
Depreciation and amortization				69,498		201,475		270,000		66,574		190,089		263,480
														(P)=Projection
11. INVENTORIES
(1) Inventories								(Millions of yen)
				2015		2014		Difference
				Sep.30		Dec.31
		Office		251,330		238,344		+12,986
		Imaging System		195,578		168,802		+26,776
		Industry and Others		148,163		121,021		+27,142
		Total		595,071		528,167		+66,904
(2) Inventories/Sales*								(Days)
				2015		2014		Difference
				Sep.30		Dec.31
		Office		44		42		2
		Imaging System		56		43		+13
		Industry and Others		124		132		(8)
		Total		57		50		+7
*Index based on the previous six months sales.
12. DEBT RATIO
				2015		2014		Difference
				Sep.30		Dec.31
Total debt / Total assets				0.0%		0.0%		0.0%
13. OVERSEAS PRODUCTION RATIO*
				2015		2014
				YTD		Year
Overseas production ratio				48%		45%
*From the 2nd quarter of 2015, 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
				Sep.30		Dec.31
		Japan		68,753		69,201		(448)
		Overseas		123,523		122,688		+835
		Total		192,276		191,889		+387

 

- S5 -