In the first quarter of 2009, Canon generated cash flow from operating activities of ¥52.4 billion (U.S.$535 million), a decrease of ¥55.0 billion (U.S.$562 million) compared with the previous year, mainly reflecting the reduction in consolidated net income.
As capital investments were focused on items relevant to introducing new products and achieving cost reductions, cash flow from investing activities totalled ¥102.0 billion (U.S.$1,041 million), a year-on-year decrease of ¥87.5 billion (U.S.$892 million). Accordingly, free cash flow totalled negative ¥49.6 billion (U.S.$506 million), a decrease of ¥32.4 billion (U.S.$331 million)from the year-ago period.
The office imaging products market saw a drop in demand for monochrome models and sales of colour laser beam printers, which had enjoyed healthy expansion, fell below the year-ago level. Ink jet printers also experienced a significant decrease in demand for single-function models
Net sales for the period totalled ¥687.0 billion (U.S.$7,011 million), a year-on-year decline of 31.8 percent, mainly due to the effects of substantially reduced sales volumes arising from decreased demand for network MFDs and laser beam printers, along with the substantial rise in the value of the yen.
Despite the launch of new products and ongoing cost-cutting efforts targeting an improved gross profit ratio, such factors as the appreciation of the yen, reduction in sales volumes and falling product prices led to a 6.1 point decline in the ratio to 43.5 percent. Consequently, gross profit decreased by 40.2 percent to ¥298.8 billion (U.S.$3,049 million).
Although, operating expenses declined by 15.3 percent owing to a Group-wide effort to curb expenses, operating profit dropped 88.3 percent to ¥20.0 billion (U.S.$204 million). Other income (deductions) reversed to positive by ¥6.6 billion (U.S.$67 million), mainly due to an improvement in currency exchange losses. As a result, income before income taxes totalled ¥22.4 billion (U.S.$229 million), a decline of 86.6 percent, while net income attributable to Canon Inc. also recorded a decrease of 83.4 percent to ¥17.7 billion (U.S.$181 million).
Looking at Canon’s first-quarter performance by business sector, within the business machines segment, demand for office equipment declined significantly amid the rapid deterioration of economic conditions. As for office imaging products, while demand for digital commercial printers increased, flagging sales in major regions for network digital MFD