6-K
CANON INC (CAJFF)
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Reportof Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16of
the Securities Exchange Act of 1934
| For the month of …. | October | ……………………………………………… , | 2023 |
|---|---|---|---|
| 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-....................
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.
| CANON INC. | ||
|---|---|---|
| (Registrant) | ||
| Date…. | October 26, 2023 | By....../s/.......... Sachiho Tanino............. |
| --- | --- | --- |
| (Signature)* | ||
| Sachiho Tanino<br><br><br>General Manager<br><br><br>Consolidated Accounting Div.<br><br><br>Canon Inc. |
*Print the name and title of the signing officer under his signature.
The following materials are included.
| 1. | RESULTS FOR THE THIRD QUARTER AND THE NINE MONTHS ENDED SEPTEMBER 30, 2023 |
|---|
CONSOLIDATED RESULTS FOR THE THIRD QUARTER AND
THE NINE MONTHS ENDED SEPTEMBER 30, 2023
October 26, 2023
CONSOLIDATED RESULTS FOR THETHIRD QUARTER
| (Millions of yen, thousands of U.S. dollars, except per share amounts) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Actual | ||||||||||||
| Three months<br>ended<br>September 30, 2023 | Three months <br>ended<br>September 30, 2022 | Change(%) | Three months<br>ended<br>September 30, 2023 | |||||||||
| Net sales | ¥ | 1,025,247 | ¥ | 996,090 | + | 2.9 | $ | 6,834,980 | ||||
| Operating profit | **** | 82,624 | 81,440 | + | 1.5 | **** | 550,827 | |||||
| Income before income taxes | **** | 87,320 | 79,076 | + | 10.4 | **** | 582,133 | |||||
| Net income attributable to Canon Inc. | ¥ | 62,134 | ¥ | 54,118 | + | 14.8 | $ | 414,227 | ||||
| Net income attributable to Canon Inc. shareholders per share: | ||||||||||||
| - Basic | ¥ | 62.65 | ¥ | 52.90 | + | 18.4 | $ | 0.42 | ||||
| - Diluted | **** | 62.62 | 52.88 | + | 18.4 | **** | 0.42 | |||||
| CONSOLIDATED RESULTS FOR THE NINE MONTHS | ||||||||||||
| (Millions of yen, thousands of U.S. dollars, except per share amounts) | ||||||||||||
| Actual | Projection | |||||||||||
| Nine months <br>ended<br>September 30, 2023 | Nine months<br>ended<br>September 30, 2022 | Change(%) | Nine months <br>ended<br>September 30, 2023 | Year ending<br>December 31,<br>2023 | Change(%) | |||||||
| Net sales | ¥ | 3,017,254 | ¥ | 2,874,239 | + | 5.0 | $ | 20,115,027 | ¥ | 4,220,000 | + | 4.7 |
| Operating profit | **** | 259,373 | 256,055 | + | 1.3 | **** | 1,729,153 | 400,000 | + | 13.2 | ||
| Income before income taxes | **** | 275,982 | 231,969 | + | 19.0 | **** | 1,839,880 | 425,000 | + | 20.6 | ||
| Net income attributable to Canon Inc. | ¥ | 183,947 | ¥ | 159,118 | + | 15.6 | $ | 1,226,313 | ¥ | 292,000 | + | 19.7 |
| Net income attributable to Canon Inc. shareholders per share: | ||||||||||||
| - Basic | ¥ | 182.98 | ¥ | 153.70 | + | 19.1 | $ | 1.22 | ¥ | 291.65 | + | 23.2 |
| - Diluted | **** | 182.91 | 153.65 | + | 19.0 | **** | 1.22 | 291.53 | + | 23.2 | ||
| Actual | ||||||||||||
| As of <br>September 30, 2023 | As of<br>December 31, 2022 | Change(%) | As of <br>September 30, 2023 | |||||||||
| Total assets | ¥ | 5,619,004 | ¥ | 5,095,530 | + | 10.3 | $ | 37,460,027 | ||||
| Canon Inc. shareholders’ equity | ¥ | 3,291,205 | ¥ | 3,113,105 | + | 5.7 | $ | 21,941,367 | ||||
| Notes: | 1. Canon’s consolidated financial statements are prepared in accordance with U.S.<br>generally accepted accounting principles. | |||||||||||
| --- | --- | |||||||||||
| 2. U.S. dollar amounts are translated from yen at the rate of JPY150=U.S.$1, the<br>approximate exchange rate on the Tokyo Foreign Exchange Market as of September 29, 2023, 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 -
I. Operating Results and Financial Conditions
2023 Third Quarter in Review
Looking back at the third quarter of 2023, although the economic situation varied from one region to another, the global economy recovered modestly. In the United States, thanks to the strong employment situation, consumer spending remained solid. In Europe, however, the economy remained stagnant with strong uninterrupted downward pressure on the economy due to the continuation of tight monetary policy. In China, the economy slowed down due to sluggish real estate market. In other emerging countries, the economy remained solid, mostly centering around consumer spending and the service industry. In Japan, the economy recovered moderately, with consumer spending showing signs of picking up on the back of improvement in the employment and personal income environment.
In the markets in which Canon operates, demand was impacted by the sluggish Chinese economy. On a product basis, despite stagnant market conditions in China, demand for office multifunction devices (MFDs) remained firm thanks to solid demand for printing equipment offering high productivity in other countries. For inkjet printers, while the demand from customers working from home slowed, sales of refillable ink tank models remained firm. For laser printers, demand slowed due to the curbing of corporate investments. For cameras, demand remained solid due to a recovery in travel and leisure. The market of network cameras continued to grow as well. For medical equipment, demand remained firm, particularly in Japan and Europe. For semiconductor lithography equipment, although demand for memory devices remained weak, investments remained at a high level, particularly for power devices, analog devices and sensors. For FPD (Flat Panel Display) lithography equipment, the market continued to shrink due to restrained investments by panel manufacturers.
The average value of the yen against the U.S. dollar in the third quarter and for the first nine months of the year was ¥144.76, a year-on-year depreciation of approximately ¥6, and ¥138.27, a year-on-year depreciation of approximately ¥10, respectively. Correspondingly, against the euro, ¥157.32 a year-on-year depreciation of approximately ¥18, and ¥149.59, a year-on-year depreciation of approximately ¥14.
As for the third quarter, net sales increased by 2.9% year-on-year to ¥1,025.2 billion due to solid demand for network cameras and other new businesses, and the favorable effects of depreciation of the yen. Net sales for the third quarter exceeded ¥1,000 billion for the first time in sixteen years since 2007. Net sales for the first nine months of the year increased by 5.0% year-on-year to ¥3,017.3 billion. Gross profit as a percentage of net sales increased by 1.7 points year-on-year to 47.0% due to an improvement in costs, resulting from easing of component shortages and logistics disruptions, and the favorable effects of depreciation of the yen. Gross profit for the third quarter increased by 6.9% year-on-year to ¥482.1 billion. Operating expenses increased by 8.1% year-on-year to ¥399.4 billion due to an increase in sales-related expenses with the normalization of sales activity. In addition, operating expenses denominated in foreign currencies increased due to depreciation of the yen. As a result, operating profit increased by 1.5% year-on-year to ¥82.6 billion. Other income (deductions) increased by ¥7.1 billion year-on-year to ¥4.7 billion due to a decrease of currency exchange losses, which were substantially incurred last year. As a result, income before income taxes increased by 10.4% year-on-year to ¥87.3 billion and net income attributable to Canon Inc. increased by 14.8% year-on-year to ¥62.1 billion. Consequently, operating profit, income before income taxes and net income attributable to Canon Inc. for the third quarter exceeded last year. Operating profit for the first nine months of the year increased by 1.3% to ¥259.4 billion, while income before income taxes increased by 19.0% to ¥276.0 billion and first nine months net income attributable to Canon Inc. increased by 15.6% to ¥183.9 billion.
Basic net income attributable to Canon Inc. shareholders per share was ¥62.65 for the third quarter, a year-on-year increase of ¥9.75, and ¥182.98 for the first nine months, a year-on-year increase of ¥29.28.
- 2 -
Results by Segment
Looking at Canon’s third-quarter performance by business unit, in the Printing Business Unit, unit sales of MFDs for offices decreased compared with the same period of the previous year, due to stagnant market conditions in China this year and the high level of unit sales last year resulting from the resumption of product supply. As for inkjet printers, unit sales were at the same level as the previous year thanks to solid sales of refillable ink tank models, even as the surge in working from home demand subsided. As for laser printers, unit sales decreased compared with the same period of the previous year due to the curbing of corporate investments. Regarding equipment for the production printing market, unit sales increased compared with the same period of the previous year, thanks to enhancing its product lineup by adding the imagePRESS V1350. As a result, sales of the Printing Business Unit increased by 2.8% compared with the same period of the previous year to ¥570.4 billion. Income before income taxes for the third quarter increased by 6.5% compared with the same period of the previous year to ¥46.8 billion mainly due to decrease in logistics costs. Sales for the first nine months of the year totaled ¥1,703.4 billion, a year-on-year increase of 4.3%, while income before income taxes totaled ¥161.5 billion, a year-on-year decrease of 5.1% due to such effects as weak sales of consumables in the first half of the year.
In the Imaging Business Unit, sales of interchangeable-lens digital cameras, in particular mirrorless cameras like the EOS R6 Mark II, a full-frame mirrorless camera released last year, and the new entry-level EOS R50 and EOS R100 mirrorless cameras launched in the first half of this year, remained solid. Sales of RF-series interchangeable-lenses remained solid as well. Sales of network cameras increased thanks to solid demand and enhanced sales activity against the background of diversifying applications. As a result, sales for the third quarter of the Imaging Business Unit increased by 8.7% compared with the same period of the previous year to ¥220.7 billion, while income before income taxes for the third quarter increased by 10.2% compared with the same period of the previous year to ¥40.6 billion. Sales for the first nine months of the year totaled ¥632.3 billion, a year-on-year increase of 12.7%, while income before income taxes totaled ¥113.0 billion, a year-on-year increase of 35.5% due to the steady sales of network cameras and other highly competitive products, as well as non-recurring expenses incurred to close a certain production facility in the previous year.
In the Medical Business Unit, sales remained firm mainly in Japan and Europe. As a result, sales of the Medical Business Unit increased by 5.0% compared with the same period of the previous year to ¥132.4 billion. Income before income taxes for the third quarter increased by 0.3% compared with the same period of the previous year to ¥6.6 billion. Sales for the first nine months of the year totaled ¥389.6 billion, a year-on-year increase of 7.5%, while income before income taxes totaled ¥17.9 billion, a year-on-year decrease of 17.1% mainly due to active investments to augment its workforce in order to enhance its sales capacity.
In the Industrial Business Unit, sales of semiconductor lithography equipment remained strong, particularly for those used in the production of power devices. As a result, unit sales were on par with the same period of the previous year, which saw a significant increase in unit sales. For FPD lithography equipment, unit sales decreased compared with the previous year due to reduced investments by panel manufacturers as the panel market worsened. As a result, net sales of the Industrial Business Unit decreased by 9.4% compared with the same period of the previous year to ¥78.8 billion, and income before income taxes for the third quarter decreased by 6.6% compared with the same period of the previous year to ¥15.9 billion. Sales for the first nine months of the year totaled ¥215.8 billion, a year-on-year decrease of 7.7%, while income before income taxes totaled ¥35.7 billion, a year-on-year decrease of 21.9%.
- 3 -
Cash Flow
During the first nine months of 2023, cash flow from operating activities increased by ¥81.4 billion year-on-year to ¥269.9 billion, mainly due to an increase in profit and efforts to limit the rise in inventory. Cash flow used in investing activities increased by ¥71.7 billion to ¥204.0 billion from the same period of the previous year due to an acquisition of Minaris Medical Co., Ltd., which has in vitro diagnostics and automated analyzer businesses, as well as continued capital investments to improve efficiency and productivity. Accordingly, free cash flow increased by ¥9.7 billion compared with the previous year to ¥65.9 billion.
Cash flow from financing activities increased by ¥94.7 billion year-on-year to ¥65.1 billion due to an increase in proceeds received from short-term loans despite dividends paid increased by ¥11.5 billion from the same period of last year due to an increase in last year’s year-end dividend and this year’s interim dividend, as well as repurchases of ¥100.0 billion of treasury stock.
Owing to these factors, as well as the impact from foreign currency exchange adjustments, cash and cash equivalents increased by ¥158.6 billion to ¥520.7 billion from the end of the previous year.
Outlook
There are still some global economic uncertainties for the fourth quarter onward due to various geopolitical risks, tightening monetary policies across the world in response to inflation, and the risk of an economic slowdown caused by China’s market stagnation and other factors. However, Canon expects the global economy to continue down the track of recovery due to the strong employment situation and improved personal income, particularly in the United States and Japan.
In the market in which Canon operates, demand for office MFDs as key office devices is expected to remain firm, thanks to strong demand for high-productivity printing as well as their reputation. For inkjet printers, the demand for refillable ink tank models is expected to remain solid even though the market of inkjet printers is expected to shrink due to decreased working from home demand. For laser printers, demand is expected to remain weak due to the curbing of corporate investments despite new demand generated from decentralization of offices. As for digital interchangeable-lens cameras, demand is expected to remain solid during the year-end selling season in the fourth quarter. For network cameras, market growth is expected to remain stable due to the continued expansion of security applications and growing demand for applications to enhance productivity and quality at manufacturing and sales sites. In addition, the needs for downsizing and remote control in professional video production equipment are expected to continue, supported by continued growth in demand for online video content. As for the medical equipment market, demand is expected to remain solid despite ongoing uncertainty due to increasing interest rates and delayed purchase of equipment by medical institutions caused by increasing interest rates and labor cost. Canon will steadily execute equipment installation for placed orders. For semiconductor lithography equipment, despite concerns that the temporary decline in some memory device market will continue, demand of equipment for such products as power devices is expected to remain solid. Furthermore, robust demand is expected to continue as semiconductor factories are being constructed in various countries and regions from the viewpoint of economic security. For FPD lithography equipment, the harsh market condition is expected to continue due to ongoing delayed investments by panel manufacturers amid market sluggishness.
Regarding currency exchange rates on which Canon bases its performance outlook for the fourth quarter onwards, Canon anticipates exchange rates of ¥145 to the U.S. dollar and ¥155 to the euro, representing depreciation of approximately ¥8 against the U.S. dollar and depreciation of approximately ¥13 against the euro from the previous year. For the U.S. dollar and the euro, Canon expects the yen to depreciate by ¥5 and depreciate by ¥6 from its previous forecast, respectively.
Upon taking into consideration the currency exchange rates and the current market conditions, Canon revised its forecast to full-year consolidated net sales of ¥4,220.0 billion, a year-on-year increase of 4.7%, due to the market slowdown in China, which mainly affects its laser printer business, as well as postponement of installation of semiconductor lithography equipment and FPD lithography equipment for customer reasons. On the other hand, taking into consideration the decrease in the cost of logistics and components, as well as the gains from depreciation of the yen, Canon maintained its previous outlook, expecting operating profit of ¥400.0 billion, a year-on-year increase of 13.2%; income before income taxes of ¥425.0 billion, a year-on-year increase of 20.6%; net income attributable to Canon Inc. of ¥292.0 billion, a year-on-year increase of 19.7%, recording highs since 2009.
- 4 -
Consolidated Outlook
| Fiscal year | Millions of yen | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Year ending<br><br><br>December 31, 2023 | Change | Year ended<br>December 31, 2022 | Change (%) | ||||||||
| Previous Outlook (A) | Revised Outlook (B) | (B - A) | Results (C) | (B - C) / C | |||||||
| Net sales | 4,363,000 | 4,220,000 | (143,000 | ) | 4,031,414 | +4.7% | |||||
| Operating profit | 400,000 | 400,000 | - | 353,399 | +13.2% | ||||||
| Income before income taxes | 425,000 | 425,000 | - | 352,440 | +20.6% | ||||||
| Net income attributable to Canon Inc. | 292,000 | 292,000 | - | 243,961 | +19.7% |
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.
- 5 -
CANON INC. AND SUBSIDIARIES
CONSOLIDATED
II. Financial Statements
- CONSOLIDATED BALANCE SHEETS
| Millions of yen | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| As of<br>September 30, 2023 | As of<br> December 31, 2022 | Change | |||||||
| ASSETS | |||||||||
| Current assets | **** | 2,461,346 | **** | 2,155,914 | 305,432 | ||||
| Cash and cash equivalents | **** | 520,745 | **** | 362,101 | 158,644 | ||||
| Short-term investments | **** | 4,321 | **** | 10,905 | (6,584 | ) | |||
| Trade receivables | **** | 622,081 | **** | 636,803 | (14,722 | ) | |||
| Inventories | **** | 913,872 | **** | 808,312 | 105,560 | ||||
| Current lease receivables | **** | 159,947 | **** | 137,038 | 22,909 | ||||
| Prepaid expenses and other current assets | **** | 256,424 | **** | 215,990 | 40,434 | ||||
| Allowance for credit losses | **** | (16,044 | ) | (15,235 | ) | (809 | ) | ||
| Non-current assets | **** | 3,157,658 | **** | 2,939,616 | 218,042 | ||||
| Noncurrent receivables | **** | 12,291 | **** | 12,996 | (705 | ) | |||
| Investments | **** | 74,264 | **** | 65,128 | 9,136 | ||||
| Property, plant and equipment, net | **** | 1,101,574 | **** | 1,035,065 | 66,509 | ||||
| Operating lease right-of-use assets | **** | 123,751 | **** | 117,843 | 5,908 | ||||
| Intangible assets, net | **** | 271,331 | **** | 280,995 | (9,664 | ) | |||
| Goodwill | **** | 1,040,689 | **** | 972,626 | 68,063 | ||||
| Noncurrent lease receivables | **** | 323,198 | **** | 279,332 | 43,866 | ||||
| Other assets | **** | 214,443 | **** | 179,297 | 35,146 | ||||
| Allowance for credit losses | **** | (3,883 | ) | (3,666 | ) | (217 | ) | ||
| Total assets | **** | 5,619,004 | **** | 5,095,530 | 523,474 | ||||
| LIABILITIES AND EQUITY | |||||||||
| Current liabilities | **** | 1,725,316 | **** | 1,365,353 | 359,963 | ||||
| Short-term loans and current portion of long-term debt | **** | 607,573 | **** | 296,384 | 311,189 | ||||
| Short-term loans related to financial services | **** | 40,200 | **** | 41,200 | (1,000 | ) | |||
| Other short-term loans and current portion of long-term debt | **** | 567,373 | **** | 255,184 | 312,189 | ||||
| Trade payables | **** | 344,065 | **** | 355,930 | (11,865 | ) | |||
| Accrued income taxes | **** | 45,251 | **** | 48,414 | (3,163 | ) | |||
| Accrued expenses | **** | 393,784 | **** | 365,847 | 27,937 | ||||
| Current operating lease liabilities | **** | 36,489 | **** | 33,281 | 3,208 | ||||
| Other current liabilities | **** | 298,154 | **** | 265,497 | 32,657 | ||||
| Non-Current liabilities | **** | 358,184 | **** | 381,147 | (22,963 | ) | |||
| Long-term debt, excluding current portion of long-term debt | **** | 2,920 | **** | 2,417 | 503 | ||||
| Accrued pension and severance cost | **** | 169,745 | **** | 189,215 | (19,470 | ) | |||
| Noncurrent operating lease liabilities | **** | 88,899 | **** | 85,331 | 3,568 | ||||
| Other noncurrent liabilities | **** | 96,620 | **** | 104,184 | (7,564 | ) | |||
| Total liabilities | **** | 2,083,500 | **** | 1,746,500 | 337,000 | ||||
| Canon Inc. shareholders’ equity | **** | 3,291,205 | **** | 3,113,105 | 178,100 | ||||
| Common stock | **** | 174,762 | **** | 174,762 | - | ||||
| Additional paid-in capital | **** | 404,934 | **** | 404,838 | 96 | ||||
| Retained earnings | **** | 3,782,280 | **** | 3,729,244 | 53,036 | ||||
| Legal reserve | **** | 61,554 | **** | 64,509 | (2,955 | ) | |||
| Other retained earnings | **** | 3,720,726 | **** | 3,664,735 | 55,991 | ||||
| Accumulated other comprehensive income (loss) | **** | 287,503 | **** | 62,623 | 224,880 | ||||
| Treasury stock, at cost | **** | (1,358,274 | ) | (1,258,362 | ) | (99,912 | ) | ||
| Noncontrolling interests | **** | 244,299 | **** | 235,925 | 8,374 | ||||
| Total equity | **** | 3,535,504 | **** | 3,349,030 | 186,474 | ||||
| Total liabilities and equity | **** | 5,619,004 | **** | 5,095,530 | 523,474 | ||||
| Millions of yen | |||||||||
| As of<br>September 30, 2023 | As of<br>December 31, 2022 | ||||||||
| Notes: | |||||||||
| 1. Accumulated depreciation | **** | 3,107,984 | **** | 2,962,228 | |||||
| 2. Accumulated other comprehensive income (loss): | |||||||||
| Foreign currency translation adjustments | **** | 413,202 | **** | 191,287 | |||||
| Net unrealized gains and losses on securities | **** | 26 | **** | (34 | ) | ||||
| Net gains and losses on derivative instruments | **** | (1,704 | ) | (428 | ) | ||||
| Pension liability adjustments | **** | (124,021 | ) | (128,202 | ) |
- 6 -
CANON INC. AND SUBSIDIARIES
CONSOLIDATED
- CONSOLIDATED STATEMENTS OF INCOME AND
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Consolidated statements of income
| Results for the third quarter | Millions of yen | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Three months<br>ended<br>September 30, 2023 | Three months <br>ended<br> September 30, 2022 | Change(%) | |||||||
| Net sales | **** | 1,025,247 | **** | 996,090 | + | 2.9 | |||
| Cost of sales | **** | 543,197 | **** | 545,057 | |||||
| Gross profit | **** | 482,050 | **** | 451,033 | + | 6.9 | |||
| Operating expenses: | |||||||||
| Selling, general and administrative expenses | **** | 315,099 | **** | 294,576 | |||||
| Research and development expenses | **** | 84,327 | **** | 75,017 | |||||
| **** | 399,426 | **** | 369,593 | ||||||
| Operating profit | **** | 82,624 | **** | 81,440 | + | 1.5 | |||
| Other income (deductions): | |||||||||
| Interest and dividend income | **** | 3,550 | **** | 1,542 | |||||
| Interest expense | **** | (659 | ) | (207 | ) | ||||
| Other, net | **** | 1,805 | **** | (3,699 | ) | ||||
| **** | 4,696 | **** | (2,364 | ) | |||||
| Income before income taxes | **** | 87,320 | **** | 79,076 | + | 10.4 | |||
| Income taxes | **** | 21,379 | **** | 21,827 | |||||
| Consolidated net income | **** | 65,941 | **** | 57,249 | |||||
| Less: Net income attributable to noncontrolling interests | **** | 3,807 | **** | 3,131 | |||||
| Net income attributable to Canon Inc. | **** | 62,134 | **** | 54,118 | + | 14.8 | |||
| Results for the nine months | Millions of yen | ||||||||
| Nine months <br>ended <br>September 30, 2023 | Nine months<br>ended<br> September 30, 2022 | Change(%) | |||||||
| Net sales | **** | 3,017,254 | **** | 2,874,239 | + | 5.0 | |||
| Cost of sales | **** | 1,596,423 | **** | 1,564,776 | |||||
| Gross profit | **** | 1,420,831 | **** | 1,309,463 | + | 8.5 | |||
| Operating expenses: | |||||||||
| Selling, general and administrative expenses | **** | 914,628 | **** | 832,335 | |||||
| Research and development expenses | **** | 246,830 | **** | 221,073 | |||||
| **** | 1,161,458 | **** | 1,053,408 | ||||||
| Operating profit | **** | 259,373 | **** | 256,055 | + | 1.3 | |||
| Other income (deductions): | |||||||||
| Interest and dividend income | **** | 9,103 | **** | 3,167 | |||||
| Interest expense | **** | (1,474 | ) | (737 | ) | ||||
| Other, net | **** | 8,980 | **** | (26,516 | ) | ||||
| **** | 16,609 | **** | (24,086 | ) | |||||
| Income before income taxes | **** | 275,982 | **** | 231,969 | + | 19.0 | |||
| Income taxes | **** | 77,951 | **** | 61,962 | |||||
| Consolidated net income | **** | 198,031 | **** | 170,007 | |||||
| Less: Net income attributable to noncontrolling interests | **** | 14,084 | **** | 10,889 | |||||
| Net income attributable to Canon Inc. | **** | 183,947 | **** | 159,118 | + | 15.6 |
- 7 -
CANON INC. AND SUBSIDIARIES
CONSOLIDATED
Consolidatedstatements of comprehensive income
| Results for the third quarter | Millions of yen | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Three months<br>ended<br>September 30, 2023 | Three months <br>ended<br> September 30, 2022 | Change(%) | |||||||
| Consolidated net income | **** | 65,941 | **** | 57,249 | + | 15.2 | |||
| Other comprehensive income (loss), net of tax | |||||||||
| Foreign currency translation adjustments | **** | 40,004 | **** | 42,987 | |||||
| Net unrealized gains and losses on securities | **** | 21 | **** | (21 | ) | ||||
| Net gains and losses on derivative instruments | **** | (752 | ) | 617 | |||||
| Pension liability adjustments | **** | 842 | **** | 4,254 | |||||
| **** | 40,115 | **** | 47,837 | ||||||
| Comprehensive income (loss) | **** | 106,056 | **** | 105,086 | + | 0.9 | |||
| Less: Comprehensive income (loss) attributable to noncontrolling interests | **** | 4,248 | **** | 3,965 | |||||
| Comprehensive income (loss) attributable to Canon Inc. | **** | 101,808 | **** | 101,121 | + | 0.7 | |||
| Results for the nine months | Millions of yen | ||||||||
| Nine months <br>ended <br>September 30, 2023 | Nine months<br>ended<br> September 30, 2022 | Change(%) | |||||||
| Consolidated net income | **** | 198,031 | **** | 170,007 | + | 16.5 | |||
| Other comprehensive income (loss), net of tax | |||||||||
| Foreign currency translation adjustments | **** | 223,928 | **** | 309,018 | |||||
| Net unrealized gains and losses on securities | **** | 60 | **** | (21 | ) | ||||
| Net gains and losses on derivative instruments | **** | (1,214 | ) | (1,867 | ) | ||||
| Pension liability adjustments | **** | 3,993 | **** | 3,519 | |||||
| **** | 226,767 | **** | 310,649 | ||||||
| Comprehensive income (loss) | **** | 424,798 | **** | 480,656 | - | 11.6 | |||
| Less: Comprehensive income (loss) attributable to noncontrolling interests | **** | 15,971 | **** | 12,757 | |||||
| Comprehensive income (loss) attributable to Canon Inc. | **** | 408,827 | **** | 467,899 | - | 12.6 |
- 8 -
CANON INC. AND SUBSIDIARIES
CONSOLIDATED
- DETAILS OF SALES
Results for the third quarter
| Millions of yen | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Sales by business unit | Three months endedSeptember 30, 2023 | Three months ended<br>September 30, 2022 | Change(%) | ||||||
| Printing | **** | 570,360 | **** | 554,778 | + | 2.8 | |||
| Imaging | **** | 220,686 | **** | 202,933 | + | 8.7 | |||
| Medical | **** | 132,406 | **** | 126,074 | + | 5.0 | |||
| Industrial | **** | 78,849 | **** | 87,037 | - | 9.4 | |||
| Others and Corporate | **** | 44,744 | **** | 53,790 | - | 16.8 | |||
| Eliminations | **** | (21,798 | ) | (28,522 | ) | - | |||
| Total | **** | 1,025,247 | **** | 996,090 | + | 2.9 | |||
| Millions of yen | |||||||||
| Sales by region | Three months endedSeptember 30, 2023 | Three months ended<br>September 30, 2022 | Change(%) | ||||||
| Japan | **** | 213,428 | **** | 201,091 | + | 6.1 | |||
| Overseas: | |||||||||
| Americas | **** | 328,008 | **** | 311,553 | + | 5.3 | |||
| Europe | **** | 270,461 | **** | 251,981 | + | 7.3 | |||
| Asia and Oceania | **** | 213,350 | **** | 231,465 | - | 7.8 | |||
| **** | 811,819 | **** | 794,999 | + | 2.1 | ||||
| Total | **** | 1,025,247 | **** | 996,090 | + | 2.9 | |||
| Results for the nine months | |||||||||
| Millions of yen | |||||||||
| Sales by business unit | Nine months ended <br>September 30, 2023 | Nine months ended<br>September 30, 2022 | Change(%) | ||||||
| Printing | **** | 1,703,444 | **** | 1,632,443 | + | 4.3 | |||
| Imaging | **** | 632,347 | **** | 561,031 | + | 12.7 | |||
| Medical | **** | 389,576 | **** | 362,503 | + | 7.5 | |||
| Industrial | **** | 215,765 | **** | 233,779 | - | 7.7 | |||
| Others and Corporate | **** | 141,359 | **** | 157,102 | - | 10.0 | |||
| Eliminations | **** | (65,237 | ) | (72,619 | ) | - | |||
| Total | **** | 3,017,254 | **** | 2,874,239 | + | 5.0 | |||
| Millions of yen | |||||||||
| Sales by region | Nine months ended <br>September 30, 2023 | Nine months ended<br>September 30, 2022 | Change(%) | ||||||
| Japan | **** | 652,598 | **** | 627,576 | + | 4.0 | |||
| Overseas: | |||||||||
| Americas | **** | 944,583 | **** | 893,993 | + | 5.7 | |||
| Europe | **** | 790,223 | **** | 720,649 | + | 9.7 | |||
| Asia and Oceania | **** | 629,850 | **** | 632,021 | - | 0.3 | |||
| **** | 2,364,656 | **** | 2,246,663 | + | 5.3 | ||||
| Total | **** | 3,017,254 | **** | 2,874,239 | + | 5.0 | |||
| * | Based on the realignment of Canon’s internal management structure, from the fourth quarter ended December<br>31, 2022, Canon has changed the name and structure of segments from Industrial and Others Business Unit and Corporate and eliminations to Industrial Business Unit, Others and Corporate and Eliminations. Also, a certain business, which was previously<br>included in Others, has been presented within the Printing Business Unit from the beginning of the first quarter of 2023. Operating results for the three and nine months ended September 30, 2022 have also been reclassified. | ||||||||
| --- | --- | ||||||||
| Notes: | 1. The primary products included in each of the segments are as<br>follows: | ||||||||
| --- | --- | ||||||||
| Printing Business Unit : | |||||||||
| Office multifunction devices (MFDs) / Document solutions / Laser multifunction printers (MFPs) /<br><br><br>Laser printers / Inkjet printers / Image scanners / Calculators / Digital continuous feed presses /<br><br><br>Digital sheet-fed presses / Large format printers | |||||||||
| Imaging Business Unit : | |||||||||
| Interchangeable-lens digital cameras / Interchangeable lenses / Digital compact cameras / Compact photo printers /<br><br><br>MR Systems / Network cameras / Video management software / Video content analytics software /<br><br><br>Digital camcorders / Digital cinema cameras / Broadcast equipment / Projectors | |||||||||
| Medical Business Unit : | |||||||||
| Computed tomography (CT) systems / Diagnostic ultrasound systems / Diagnostic X-ray systems /<br> <br>Magnetic resonance imaging (MRI) systems / Clinical chemistry<br>analyzers / Digital radiography systems / Ophthalmic equipment | |||||||||
| Industrial Business Unit : | |||||||||
| Semiconductor lithography equipment / FPD (Flat panel display) lithography equipment /<br><br><br>OLED Display Manufacturing Equipment / Vacuum thin-film deposition equipment / Die bonders | |||||||||
| Others : | |||||||||
| Handy terminals / Document scanners | |||||||||
| 2. The principal countries and regions included in each regional category are as<br>follows: | |||||||||
| Americas: United States of America, Canada, Latin America<br><br><br>Europe: United Kingdom, Germany, France, Netherlands, European countries, Middle East and Africa<br><br><br>Asia and Oceania: China, Asian countries, Australia |
- 9 -
CANON INC. AND SUBSIDIARIES
CONSOLIDATED
- CONSOLIDATED STATEMENTS OF CASH FLOWS
| Millions of yen | ||||||
|---|---|---|---|---|---|---|
| Nine months endedSeptember 30, 2023 | Nine months ended<br>September 30, 2022 | |||||
| Cash flows from operating activities: | ||||||
| Consolidated net income | **** | 198,031 | **** | 170,007 | ||
| Adjustments to reconcile consolidated net income to net cash provided by operating<br>activities: | ||||||
| Depreciation and amortization | **** | 174,112 | **** | 166,225 | ||
| Loss (gain) on disposal of fixed assets | **** | 3,059 | **** | (9,549 | ) | |
| Deferred income taxes | **** | (10,060 | ) | (6,081 | ) | |
| Decrease in trade receivables | **** | 61,379 | **** | 8,399 | ||
| Increase in inventories | **** | (41,126 | ) | (153,886 | ) | |
| Increase in lease receivables | **** | (19,082 | ) | (11,070 | ) | |
| (Decrease) increase in trade payables | **** | (26,576 | ) | 75,275 | ||
| Decrease in accrued income taxes | **** | (4,964 | ) | (12,740 | ) | |
| Increase in accrued expenses | **** | 1,072 | **** | 20,144 | ||
| Decrease in accrued pension and severance cost | **** | (22,926 | ) | (29,442 | ) | |
| Contribution of cash to retirement benefit trust | **** | (18,000 | ) | - | ||
| Other, net | **** | (25,034 | ) | (28,801 | ) | |
| Net cash provided by operating activities | **** | 269,885 | **** | 188,481 | ||
| Cash flows from investing activities: | ||||||
| Purchases of fixed assets | **** | (156,948 | ) | (132,251 | ) | |
| Proceeds from sale of fixed assets | **** | 2,533 | **** | 14,316 | ||
| Proceeds from maturity of held to maturity securities | **** | - | **** | 2,151 | ||
| Purchases of securities | **** | (6,685 | ) | (20,053 | ) | |
| Proceeds from sale and maturity of securities | **** | 13,181 | **** | 6,518 | ||
| Acquisitions of businesses, net of cash acquired | **** | (56,219 | ) | (5,890 | ) | |
| Other, net | **** | 117 | **** | 2,859 | ||
| Net cash used in investing activities | **** | (204,021 | ) | (132,350 | ) | |
| Cash flows from financing activities: | ||||||
| Repayments of long-term debt | **** | (1,456 | ) | (1,546 | ) | |
| Decrease in short-term loans related to financial services, net | **** | (1,000 | ) | (800 | ) | |
| Increase in other short-term loans, net | **** | 306,280 | **** | 197,840 | ||
| Dividends paid | **** | (130,870 | ) | (119,326 | ) | |
| Repurchases and reissuance of treasury stock, net | **** | (100,014 | ) | (100,012 | ) | |
| Other, net | **** | (7,860 | ) | (5,738 | ) | |
| Net cash provided by (used in) financing activities | **** | 65,080 | **** | (29,582 | ) | |
| Effect of exchange rate changes on cash and cash equivalents | **** | 27,700 | **** | 37,354 | ||
| Net change in cash and cash equivalents | **** | 158,644 | **** | 63,903 | ||
| Cash and cash equivalents at beginning of period | **** | 362,101 | **** | 401,395 | ||
| Cash and cash equivalents at end of period | **** | 520,745 | **** | 465,298 | ||
| * | Certain items in the consolidated statements of cash flows for the nine months ended September 30, 2022, have<br>been reclassified to conform to the current year’s presentation. | |||||
| --- | --- |
- 10 -
CANON INC. AND SUBSIDIARIES
CONSOLIDATED
- NOTE FOR GOING CONCERN ASSUMPTION
Not applicable.
- NOTE ON SIGNIFICANT CHANGES IN CANON INC. SHAREHOLDERS’ EQUITY
None.
- BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Canon’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.
- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUBSEQUENT EVENT
On October 2, 2023, Canon Marketing Japan Inc., a subsidiary of the Company, acquired 93.09% of the issued shares of Tokyo Nissan Computer System Co., Ltd. excluded treasury stock through a public cash tender offer for consideration of ¥10,249 million in order to expand its IT solution business. Further information related to the accounting for this business combination has not been disclosed, because none of the activities required to complete the initial accounting for this acquisition have been completed as of the announcement date of the third quarter of 2023 consolidated results.
- 11 -