Canon 2014 Annual Report Download - page 41

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39
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STRATEGY
Sales by Segment
(Billions of yen)
Office Business Unit
Imaging System
Business Unit
Industry and Others
Business Unit
Eliminations
5,000
3,000
2,000
1,000
0
4,000
20142013201220112010
Sales by Geographic Area
(Billions of yen)
Japan
Americas
Europe
Asia and Oceania
5,000
3,000
2,000
1,000
0
4,000
20142013201220112010
imported or includes imported materials. Many of these raw
materials are subject to fluctuations in world market prices
accompanied by fluctuations in foreign exchange rates that
may affect Canon’s cost of sales. Other components of cost
of sales include depreciation expenses, maintenance expens-
es, light and fuel expenses, and rent expenses. The ratio of
cost of sales to net sales for 2014 and 2013 was 50.1% and
51.8%, respectively.
Gross profit
Canon’s gross profit in 2014 increased by 3.5% to ¥1,861,472
million from 2013. The gross profit ratio also increased by 1.7
points year on year to 49.9%. The increase in the gross profit
ratio reflects ongoing cost-cutting efforts along with the posi-
tive effects of the depreciation of the yen.
Operating expenses
The major components of operating expenses are payroll,
R&D, advertising expenses and other marketing expens-
es. Despite the negative effect of depreciation of the yen,
group-wide efforts to thoroughly reduce spending contrib-
uted to limit the increase year on year to 2.5% to a total of
¥1,497,983 million.
Operating profit
Operating profit in 2014 increased 7.8% from 2013 to a total
of ¥363,489 million. The ratio of operating profit to net sales
increased 0.8% to 9.8% from 2013.
Other income (deductions)
Other income (deductions) for 2014 increased ¥9,423 mil-
lion to ¥19,750 million, mainly due to foreign currency
exchange gain.
Income before income taxes
Income before income taxes in 2014 was ¥383,239 million,
an increase of 10.3% from 2013, and constituted 10.3% of
net sales.
Income taxes
Provision for income taxes in 2014 increased by ¥9,912 mil-
lion from 2013. The effective tax rate during 2014 remained
consistent with 2013. The effective tax rate for 2014 was
30.8%, which was lower than the statutory tax rate in Japan.
This was mainly due to the tax credit for R&D expenses.
Net income attributable to Canon Inc.
As a result, net income attributable to Canon Inc. in 2014
increased by 10.5% to ¥254,797 million, which represents
6.8% of net sales.
Segment information
Canon divides its businesses into three segments: the Office
Business Unit, the Imaging System Business Unit and the
Industry and Others Business Unit.
•The Office Business Unit mainly includes Office multifunc-
tion devices (“MFDs”) / Laser multifunction printers (“MFPs”) /
Laser printers / Digital production printing systems / High
speed continuous feed printers / Wide-format printers /
Document solutions
•The Imaging System Business Unit mainly includes
Interchangeable lens digital cameras / Digital compact
cameras / Digital camcorders / Digital cinema cameras /
Interchangeable lenses / Inkjet printers / Large-format ink-
jet printers / Commercial photo printers / Image scanners /
Multimedia projectors / Broadcast equipment / Calculators
•The Industry and Others Business Unit mainly includes
Semiconductor lithography equipment / FPD (Flat panel dis-
play) lithography equipment / Digital radiography systems /
Ophthalmic equipment / Vacuum thin-film deposition equip-
ment / Organic LED (“OLED”) panel manufacturing equip-
ment / Die bonders / Micromotors / Network cameras / Handy
terminals / Document scanners