Canon (7751) investor relations material

Executive summary

• Achieved record second-quarter net sales, up 3.6% year-over-year, driven by strong compact and network camera sales and semiconductor lithography equipment demand.

• Net sales for the six months ended June 30, 2026, rose 3.5% year-over-year to ¥2,274.5 billion, with operating profit up 7.6% to ¥230.6 billion and net income attributable to shareholders up 9.8% to ¥171.2 billion.

• Operating profit rose 35.2% to 159.2 billion yen, with net income up 46.9% to 122.9 billion yen compared to the same quarter last year.

• Comprehensive income surged 84.3% year-over-year, reflecting strong operational and financial performance.

• Higher costs from memory prices and Middle East disruptions were offset by U.S. tariff refunds and yen depreciation.

Financial highlights

• Second-quarter net sales: 1,180.9 billion yen (+3.6% YoY); first-half net sales: 2,274.5 billion yen (+3.5% YoY).

• Gross profit margin improved to 52.3% in Q2 (from 46.9% YoY); operating margin rose to 13.5% (from 10.3%).

• Net income margin increased to 10.4% in Q2 (from 7.3% YoY).

• Basic EPS rose 16.8% to ¥197.51.

• Cash and cash equivalents at period end were ¥731.9 billion, up from ¥715.2 billion a year earlier.

Outlook and guidance

• Full-year 2026 net sales forecast is ¥4,800 billion (+3.8% year-over-year), with operating profit projected at ¥465 billion (+2.1%) and net income at ¥340 billion (+2.4%).

• Raised full-year operating profit projection by 9.0 billion yen to 465.0 billion yen, reflecting positive FX and tariff impacts.

• Dividend policy targets a payout ratio of around 40%, with annual dividends forecast at ¥160 per share.

• Negative impacts from Middle East situation (−34.6 billion yen) and higher memory costs (−6.0 billion yen) expected to persist.

• U.S. tariff refunds (+37.5 billion yen) and favorable FX (+34.1 billion yen) to offset cost pressures.