(Jan 15): Canon Inc said it will explore acquisitions in lucrative arenas such as medical devices and chip tools in the coming years, while setting a lower dividend payout target of around 40%.
In a presentation detailing its new five-year plan, the maker of printers, cameras and lithography machines said it plans to invest ¥3 trillion into bolstering its existing businesses while earmarking as much as ¥2 trillion in additional funds for deals, if needed.
While the new payout ratio falls short of the company’s previous 50% benchmark, Canon also said that shareholder returns are expected to total more than ¥1 trillion during the five-year period, and that the company plans to stick to its flexible stance on buybacks. Still, its shares reversed gains after the announcement to close down 0.9% on Thursday.
Canon now confronts a rapidly shifting market for the cameras that made it a household name around the world and a capital-intensive semiconductor manufacturing equipment arena. Its customers include chip giants such as Taiwan Semiconductor Manufacturing Co.
One question that weighs on investor sentiment is whether Canon can execute a smooth transition after decades of reliance on chairman and chief executive officer Fujio Mitarai. Asked whether he plans to helm the company over the entire course of the new five-year plan, the 90-year-old said that he can’t predict the future, but “in my heart, the answer is yes”.
Mitarai, who first became the company’s president in 1995, has yielded that post twice in the past only to retake the role. “Now is not the time to make a concrete announcement” regarding a successor, he said.
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