Canon 2010 Annual Report Download - page 6

CANON ANNUAL REPORT 20104
2010 Performance Results
In 2010, consolidated net sales increased 15.5% year on
year to ¥3,706.9 billion, and the gross profi t ratio rose 3.6
points to 48.1%. Operating profi t jumped 78.6% to ¥387.6
billion. By segment,* in the Offi ce Business Unit, sales grew
20.8% to ¥1,987.3 billion while operating profi t surged
27.9% to ¥293.3 billion. In the Consumer Business Unit,
sales edged up 6.9% to ¥1,391.3 billion while operating
profi t climbed 29.7% to ¥238.1 billion. As for the Industry
and Others Business Unit, sales totaled ¥433.0 billion, up
20.9% year on year, and operating loss totaled ¥9.8 billion,
an improvement of ¥66.1 billion. By geographic region,
sales in the Americas grew 14.4% to ¥1,023.3 billion; sales
in Europe increased 17.8% to ¥1,172.5 billion; in Japan,
sales dipped 0.9% to ¥695.7 billion; and in Asia and Oceania
(excluding Japan), sales grew 32.0% to ¥815.4 billion.
Selling, general and administrative expenses increased
19.2% to ¥1,079.7 billion while R&D expenses rose 3.7% to
¥315.8 billion. Net income attributable to Canon Inc. leapt
87.3% to ¥246.6 billion, while net income attributable to
Canon Inc. stockholders per share amounted to ¥199.71 and
¥199.70 in basic and diluted terms, respectively.
The average value of the yen during the year was ¥87.40
against the U.S. dollar, a year-on-year appreciation of
approximately ¥6.00, and ¥114.97 against the euro, a year-
on-year increase of approximately ¥15.00. The strong yen
against these and other currencies put downward pressure
on our performance, reducing net sales and operating profi t
by ¥193.9 billion and ¥127.4 billion, respectively.
Despite the yen’s sharp appreciation in the second half,
Canon aggressively introduced new products and contin-
ued to reduce costs while improving production turnover in
line with increased production. These activities enabled us
to expand our profi ts substantially. Also, comprehensive
cash fl ow management allowed us to enhance manage-
ment effi ciency and accumulate ample cash on hand.
Canon continues its proactive approach to steadily
returning profi ts to stockholders while taking into consider-
ation future investments, free cash fl ow and consolidated
business performance. For 2010, Canon increased its full-
year dividend to ¥120 per share, up ¥10 from 2009.
* Segment sales results include intersegment sales.
Achievements in Previous Phases
In Phase I, which started in 1996, we worked to strengthen
the Company’s fi nancial standing, making efforts to change
our mindset with a focus on total optimization and profi t-
ability. In Phase II, which began in 2001, as the world was
overtaken by the wave of digitization, we reinforced Canon’s
product competitiveness through a new R&D infrastructure
and the in-house production of key components.
In Phase III, launched in 2006, we worked to expand
Canon’s scale with the aim of becoming a truly excellent
global company and achieving “sound growth.” We
2010 Overview
The global economy continued on a path toward mild recovery
in 2010, supported by growth in China, India and other emerg-
ing markets. The U.S. economy continued to recover gradually
while Europe showed signs of a turnaround. Although the
Japanese economy had been picking up gradually, the recovery
came to a standstill due to defl ation and the strong yen.
In 2010, we completed Phase III, further enhancing our
corporate constitution. Achieving our goal of making 2010
the fi rst year in a new era of growth for Canon, we were
able to go on the offensive despite the lingering effects of
the global recession.
Times are changing.
Over the next fi ve years of Phase IV, we will
undergo a transformation, opening new
gateways to the next generation of Canon.