[Company analysis] Canon Inc. (キヤノン)

「Canon Inc. (キヤノン)」is a company specializing in video and optical equipment, and mainly deals with camera, video recorder, lens, copier, printer, CMOS, etc. Since its initial listing on the Tokyo stock exchange market, in 1949, it has never recorded a annual loss. The business of「Canon」are consisted of "Office Division", "Imaging Systems Division", "Medical Systems Division"and "Industrial Equipment and Other Divisions". The number of consolidated employees is approximately 25,891.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Canon Inc.
Company name (Japanese)	キヤノン
Date of establishment	Tuesday, August 10, 1937
Headquarters location	〒146-8501 東京都大田区下丸子三丁目30番2号
Capital	174,762
Consolidated sales	3,951,937
Consolidated operating profit	342,952
Consolidated total assets	4,899,465
Consolidated capital	3,017,913
Capital adequacy ratio	61.6%
Consolidated number of employees	25,891

 

 

 

2. Summary and Features

 
「Canon」was founded in 1933 under the name「Precision Optical Instruments Laboratory(精機光学研究所)」. At the time of their founding, they manufactured simple optical glass lenses and delivered them mainly to「Nippon Kōgaku Kōgyō(日本光学工業)」(now "Nikon Corporation"). The current company name, "Canon," came from "KWANON," the name of the first camera prototype that they released in 1933.

In 1940, they launched Japan's first industrial X-Ray camera, and then started producing zoom lenses for TV broadcasting. The company name was changed to the current "Canon" in 1947, the "Canon AE-1" installed in the first microcomputer was released in 1976, and the "Powershot 600", the first digital camera, was released in 1992. Canon still holds the world's highest level of camera-related technology, and has the world's top share (49%) in the interchangeable lens camera market and the world's top share (30%) in compact digital cameras.

In addition,「Canon」started the copy machine business in the 1960s. And in the 1982s, they invented "bubble jet" printer which utilizing the pressure of the bubble generated by ejected ink from heated ink nozzle. This method allow them to print a more precise image. Since then, they were able to compete with the world top class printer manufacturer,「Xerox」. And In 2009, they purchased the German printer maker「Océ」and by this acquisition, they were able to secure the world's top share in the printer field. 

The strength of「Canon」is sometime to be said that they have many products with world's top market share in various fields. Although the market itself is shrinking, the profitability of the office equipment / imaging system business is also extremely high. And the greatest advantage is, US patents tha they hold. At present, the number of  US patents of「Cannon」is No.1 in Japan and 3rd largest quantity in the world. In other words, they have the most advanced technology in Japan.

However, it is an undeniable truth that most of the industries in which「Canon」currently holds the top class share are in shrinking industries. In particular, according to the advances in smartphone technology and application, the digital camera market will be inevitably shrink. In addition, as digitalization is progressing in the office equipment field, sales of multifunction devices and printers that handle paper are expected to decline. To counter this,「Canon」 has a strategy of acquiring growth businesses through M & A and making them as a new core business.

 

 

 

3. Major Business

 

■ Imaging Systems Division
They handle interchangeable lens digital cameras, video recorders, inkjet printers, etc. Although the market growth is stagnant, the operating margin is high at around 15%. In the DSLR camera market, there is a fierce battle for market share with「Nikon Corporation」.

■ Medical Systems Division
They handle CT, ultrasonic diagnostic equipment, MRI and other diagnostic imaging equipment. Since they acquired business from「Toshiba」, 「Cannon」gained stable growth and profits from the business. Especially, In the diagnostic imaging equipment market, they have the top market share in Japan, and they are in competition with 「Hitachi Corporation」and「Shimadzu Corporation」.

■ Industrial equipment and other business divisions
It handles semiconductor exposure equipment, vacuum deposition equipment, network cameras, etc. and is evaluated as a growth business.

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		3,401,487	4,080,015	3,951,937
Consolidated operating profit		228,866	331,479	342,952
Consolidated total assets		5,138,529	5,198,291	4,899,465
Consolidated net assets		2,994,622	3,096,175	3,017,913
Breakdown of sales	Office business	1,807,819	1,865,928	1,807,301
	Imaging System business	1,095,289	1,136,188	1,008,165
	Medical System business	0	436,187	437,578
	Industrial device・Others	584,660	731,704	805,211
	Adjustments	-86,281	-89,992	-106,318