January 28, 2021 – Canon released its financial results for the fourth quarter and year-end 2020.
Net sales for the year decreased by 12.1% year-on-year to ¥3,160.2 billion. Gross profit as a percentage of net sales decreased by 1.3 points to 43.5%. Gross profit for the year decreased by 14.5% year-on-year to ¥1,375.9 billion. Operating expenses decreased by 11.9% year-on-year to ¥1,265.3 billion, due to the further promotion of efficiency for expenses throughout the entire Group. As a result, although operating profit decreased by 36.6% year-on-year to ¥110.5 billion, it exceeded the prediction which had been revised upward in the most recent forecast. Other income (deductions) decreased by ¥1.3 billion to ¥19.7 billion, mainly due to decrease of interest and dividend income, while income before income taxes decreased by 33.4% year on year to ¥130.3 billion and net income attributable to Canon Inc. decreased by 33.3% year on year to ¥83.3 billion. Basic net income attributable to Canon Inc. shareholders per share was ¥79.37 for the year, a year-on-year decrease of ¥37.42.
In 2020, sales of MFDs for the office and production printing market both decreased, although they showed signs of recovery since the second half of the year. Unit sales of laser printers, both monochrome and color models, were below those of the previous year. Sales of services and consumables also declined resulting from the moderate recovery in customers’ print volumes after cancellation of office closures in response to the spread of COVID-19 and the resumption of corporate activities.
Looking at Canon’s full year performance by business unit, in the Office Business Unit, although sales of the new imageRUNNER ADVANCE DX series were strong, unit sales of MFDs for the office and the production printing market were below those of the previous year reflecting such factors as the moderate recovery in business negotiations following the resumption of in-office work. As for laser printers, unit sales of both monochrome and color models were below those of the previous year resulting from the continued economic slowdown caused by the COVID-19 pandemic. Sales of services and consumables also declined as a result of a moderate recovery in customers’ print volumes after the resumption of corporate activities. These factors resulted in total sales for the business unit of ¥1,440.2 billion, a year-on-year decrease of 17.8%, while income before income taxes decreased by 49.3% year-on-year to ¥86.5 billion.
As for the Imaging System Business Unit, although unit sales of interchangeable-lens digital cameras were below those of the previous year as the market continued to shrink and, the decline of the demand caused by COVID-19, the shift to mirrorless models accelerated, particularly for full-frame mirrorless models, due to the introduction of the new EOS R5 and EOS R6. As for inkjet printers, sales of printers and consumables increased significantly from the previous year as a result of capturing the recovered demand in some emerging countries as well as the demand for remote working and education in developed countries and China. These factors resulted in total sales for the business unit of ¥712.2 billion, a year-on-year decrease of 11.8%, while income before income taxes increased by 43.1% year-on-year to ¥71.1 billion thanks to improvements in profitability due to the effect of new products.
As for the outlook for 2021, the growing availability of COVID-19 vaccinations means that vaccination programs will gradually be launched around the world. However, it is thought that it will take time to see a fullscale recovery in global economic activities through balanced measures to curb infections and expand economic activities. In Japan, a second State of Emergency was declared some regions, causing concerns about potential effects on the economy. In addition, prospects also remain uncertain throughout the world. However, the pace of the world economy is expected to recover moderately with the various economic measures and fiscal policies in each country and region over the long term. In the markets in which Canon operates, for office MFDs, demand for the imageRUNNER ADVANCE DX series with advanced scan functions and cloud functionality is expected to increase and print volumes are expected to recover. For laser printers, demand is also expected to increase due to signs of recovery of operating conditions in office. As for interchangeable-lens digital cameras, although the overall market is expected to continue to shrink, sales promotion efforts will be strengthened amid the shift to mirrorless and the product mix will be improved. As for inkjet printers, demand is expected to remain solid due to the increase of print volumes while remote working and education needs remain stable due to the risk of additional infections. As for the medical equipment market, demand is expected to remain at around the same level as the previous year due to the risk of additional COVID-19 infections. For semiconductor lithography equipment, while demand for memory devices is expected to remain firm, demand for image sensors and automotive devices is expected to continue to increase. For FPD lithography equipment and OLED panel manufacturing equipment, demand will remain solid as panel manufacturers are expected to increase capital investments. As for network cameras, the market is also expected to trend towards expansion due to increasing demand for high-resolution cameras and the video analysis solutions that require them. With regard to currency exchange rates on which Canon bases its performance outlook, Canon anticipates exchange rates of ¥105 to the U.S. dollar and ¥120 to the euro, representing appreciation of approximately ¥2 against both the U.S. dollar and the euro. Upon taking into consideration the current economic forecast and the aforementioned currency exchange rates, Canon projects full-year consolidated net sales of ¥3,400.0 billion, a year-on-year increase of 7.6%; operating profit of ¥158.5 billion, a year-on-year increase of 43.4%; income before income taxes of ¥176.5 billion, a year-on-year increase of 35.5%; and net income attributable to Canon Inc. of ¥115.0 billion, a year-on-year increase of 38.0%.