Canon President Steps Down as Forecast Misses

Canon Inc. (7751) said its president will step down after the world’s largest camera maker forecast profit will increase by less than 1 percent for a second straight year.

President and Chief Operating Officer Tsuneji Uchida, 70, will leave both posts effective March 29 and be replaced by Chairman Fujio Mitarai, 76, the Tokyo-based company said in a statement. Uchida, who will become an adviser, offered to resign, Chief Financial Officer Toshizo Tanaka told reporters today.

Net income this year probably will increase to 250 billion yen ($3.3 billion) from 248.6 billion yen last year, the company said in a statement today, lagging behind the 304 billion-yen average of 20 analysts’ estimates compiled by Bloomberg. The maker of PowerShot digital cameras, copiers and chipmaking equipment is boosting output overseas as gains in the yen make it more expensive to manufacture in Japan.

“The announcement was unexpected,” said Masayuki Ohtani, a strategist at Securities Japan Inc. in Tokyo. “While Canon suffered from external obstacles such as the earthquake, floods and the yen’s gain, business results weren’t anything so regrettable.”

The company fell 1 percent to 3,435 yen in Tokyo trading today, before the earnings announcement. The shares dropped 19 percent last year, compared with a 4 percent increase for Nikon Corp. (7731)


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The Yomiuri Shimbun

Canon Inc. has announced Chairman and Chief Executive Officer Fujio Mitarai will return as president in addition to to his current roles. Current President and Chief Operating Officer Tsuneji Uchida, 70, will become adviser.

The unusual decision for Mitarai to return to his role as president comes amid growing uncertainty about the firm's prospects due to the European fiscal crisis and the historic surge of the yen.

It is believed Canon aims to improve its business performance under Mitarai's leadership, as he achieved satisfactory results when he was company president from 1995 to 2006.

Mitarai also served as chairman of the Japan Business Federation (Keidanren) from 2006 to 2010.

Regarding Mitarai's return as president, Vice President Toshizo Tanaka said at a news conference Monday, "When prospects are uncertain, it is safer to bring together experienced veterans instead of hurrying to bring about generational change."

According to the earnings report, Canon's consolidated sales dropped 4 percent from the previous year to 3.56 trillion yen for the business year ended in December, based on U.S. Generally Accepted Accounting Principles.

Main factors for the drop include effects from the Great East Japan Earthquake, floods in Thailand and the superstrong yen.

In December, Canon said it aimed to boost its sales in 2012 to above 4.48 trillion yen--sales figures for the business year ending December 2007.

But on Monday, the firm forecast its 2012 sales ending December to be about 3.75 trillion yen.

According to its medium-term business plan, the company plans to meet a sales target of more than 5 trillion yen in the business year ending December 2015.

Canon hopes to achieve the target by having Mitarai concurrently hold the three posts of chairman, CEO and president and take the lead of company management.

In case the company fails to reach the target, it plans to focus more on merger and acquisition-based expansion, it said.

Canon had intended to bring about generation change to management by 2010. But it postponed execution of the plan because of a drop in results following the collapse of the Lehman Brothers in 2008.

However, the company also announced Monday that four officials will assume the post of directors.

It said the four are about nine years younger than the average age of four outgoing managing directors.

Regarding the creation of a medium-term business plan starting 2016, the company plans to entrust the matter to a younger generation of management, it said.

The career development of young employees will likely be an important task for the company.

Suzuki Motor Corp. President Osamu Suzuki and Fast Retailing Co. President Tadashi Yanai are past examples of chairmen who combined dual roles after resuming presidential duties.

Sony Corp. Chairman and CEO Howard Stringer has also held the post of company president since 2009, as part of that firm's efforts to restructure itself by entrusting more power in one leader.

(Feb. 1, 2012)

As Canon searches for new Leaders, during the current transition in the Office Products industry, they will also need to rebuild their culture. The once dominant figure and brand name is showing signs of trouble right now. They entered a 'Perfect Storm' when Ricoh acquired IKON, which had them in a reactive mode for a long time, then the tragic Earthquake and Floods occurred. In order to halt their slide, Leadership and culture must help navigate the Industry giant through these times, but ships as big as Canon can be difficult to steer. Canon will need to act fast...

right, I read that they are going back to a former COO who is Fujio Mitarai and read that Canon did not think that they had someone like Fujio in the "next generation". I guess that would have meant someone in the 50-60 range?

It seems all of the major copier companies, even KM has had a very tough year. Tsunami, earthquake, floods (thailand), and yes the unexpected rise of the yen has hit them hard.

I heard something that put Canon's "financial troubles" in perspective.

Canon paid cash for Oce.

Canon paid cash for the new Headquarters they are building.

I know that Canon USA is still struggling, I have not heard yet how CBS (Canon Business Solutions) did last year. Has any one heard how CBS did?

Vince