Canon 2002 Annual Report Download - page 31

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SUMMARY OF OPERATIONS
(Millions of yen (Thousands of U.S. dollars
except per except per
share amounts) share amounts)
2002 change 2001 change 2000 change 1999 2002
Net sales ¥ 2,940,128 +1.1% 2,907,573 +7.8% 2,696,420 +6.5% 2,530,896 $ 24,501,067
Operating profit 346,359 +22.9 281,839 +20.4 234,131 +39.1 168,344 2,886,325
Income before income taxes 330,017 +17.2 281,566 +23.9 227,196 +45.6 156,072 2,750,142
Income before cumulative effect of
change in accounting principle 190,737 +16.4 163,869 +22.2 134,088 +90.9 70,234 1,589,475
Net income 190,737 +13.8 167,561 +25.0 134,088 +90.9 70,234 1,589,475
Earnings per share:
Income before cumulative effect of
change in accounting principle:
Basic 217.56 +16.3 187.07 +21.7 153.66 +90.5 80.66 1.81
Diluted 214.80 +16.4 184.55 +21.8 151.51 +90.6 79.50 1.79
Net income:
Basic 217.56 +13.7 191.29 +24.5 153.66 +90.5 80.66 1.81
Diluted 214.80 +13.8 188.70 +24.5 151.51 +90.6 79.50 1.79
CONSOLIDATED RESULT OF OPERATIONS
Fiscal 2002 compared with fiscal 2001
Canon achieved record highs for the company in
both consolidated net sales and net income, and
the third consecutive year of sales and profit
growth, mainly due to a significant rise in sales of
digital cameras and digital video camcorders, and
steady growth in the copying machine product
group. In fiscal 2002, Canon achieved 1.1% growth
in sales, to ¥2,940,128 million (U.S.$24,501 million),
and a 13.8% increase in net income, to ¥190,737
million (U.S.$1,589 million). The improvement in
profit margins in fiscal 2002 was largely
attributable to cost reductions from product
reformation activities and shortened lead times for
bringing new products to market.
Sales
The global economy in 2002 reflected the following trends. The
U.S. economy pointed to signs of an economic upturn at the
beginning of the year, led mainly by progress made in the area
of inventory adjustment. In the second half of the year,
however, the economic recovery in the United States began
losing its momentum, owing to deterioration in consumer
confidence, which resulted in sluggish consumer spending, and
the collapse of several major companies, which led to a decline
in business confidence. While European economies recovered
moderately overall in 2002, the pace of recovery decelerated in
Germany and France during the latter half of the year. In Asia,
China’s economy continued to grow substantially while the
other economies in the region sustained modest growth. The
Japanese economy remained stagnant throughout the year with
no signs of a recovery amid the harsh backdrop of falling stock
prices and growing uncertainty over prospects for a recovery in
the global economy, especially in the United States.
With respect to the markets in which the Canon Group
operates, flagging global demand for personal computers
resulted in reduced demand for printers and other IT-related
equipment, while corporate-use digital copying machines,
especially multifunction and color machines, posted favorable
results. The digital camera and digital video camcorder markets
continued to show strong growth in Japan and overseas,
supported by robust demand. In the field of
semiconductor-production equipment, price and volume
declines in the memory device market due to weak sales of
personal computers inhibited a recovery in capital spending by
chip manufacturers. The average value of the yen in 2002 was
¥124.73 to the U.S. dollar, and ¥118.39 to the euro, a
depreciation of 3% and 8%, respectively, compared with the
previous year.
Amid these conditions, Canon recorded 1.1% growth in
sales, to ¥2,940,128 million (U.S.$24,501 million). This growth
reflected increased sales of digital cameras and digital video
camcorders, and steady growth in the copying machine
segment offsetting decline in semiconductor production
equipment and other product lines.