Canon (7751) investor relations material

Executive summary

• Net sales for 1Q 2026 rose 3.3% year-over-year to ¥1,093.7 billion, reaching a record high, with strong demand in Japan and Asia, and overseas sales up 4.3% while domestic sales were flat.

• Operating profit declined 26.1% year-over-year to ¥71.4 billion due to higher memory costs, additional U.S. tariffs, and a shift toward lower-margin products and channels.

• Net income attributable to shareholders fell 33.1% to ¥48.3 billion.

• Comprehensive income increased significantly to ¥72.2 billion from ¥15.9 billion a year ago, driven by positive foreign currency translation adjustments.

• Profitability was pressured by weak market conditions in the Printing Group and increased geopolitical risks, particularly in the Middle East.

Financial highlights

• 1Q 2026 net sales: ¥1,093.7B (+3.3% YoY); gross profit: ¥505.3B (+0.9% YoY); operating profit: ¥71.4B (-26.1% YoY); net income: ¥48.3B (-33.1% YoY).

• Gross profit margin decreased to 46.2% from 47.3% YoY; operating margin fell to 6.5% from 9.1%.

• Basic EPS dropped to ¥55.20 from ¥77.27 year-over-year.

• Cash and cash equivalents increased to ¥639.5 billion from ¥585.9 billion at year-end 2025.

• Net cash provided by operating activities fell sharply to ¥24.5 billion from ¥71.9 billion year-over-year.

Outlook and guidance

• Full-year 2026 net sales projected at ¥4,765.0B (+3.0% YoY); operating profit at ¥456.0B (+0.1% YoY); net income at ¥333.0B (+0.3% YoY).

• Dividend forecast maintained at ¥160 per share, targeting a payout ratio of around 40%.

• Memory costs expected to negatively impact results by approximately ¥50B; further raw material and transportation cost increases not included in guidance.

• FX assumptions for 2Q onward: USD/JPY 150, EUR/JPY 175.