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To: Curlton Latts who wrote (15450)	3/5/1998 12:15:00 PM
From: Andrew Brockway	Read Replies (1) \| Respond to of 25960

Stepper info. from Canon: INTERVIEW-Canon's sales robust, exceed forecast By Yuzo Saeki TOKYO, March 5 (Reuters) - Japan's Canon Inc says its sales in the first two months of this year have been stronger than expected, despite extremely weak economic conditions in Japan. ''In January and February, our (parent) sales have been 10 percent higher than a year earlier,'' Fujio Mitarai, president of the maker of cameras, printers and photocopiers, told Reuters in an interview on Wednesday. He said Canon's global sales network, in which 135 marketing units operate, has helped it offset the negative impact of deteriorating business conditions at home. Sales have been buoyed partly by firm European economies as well as Canon's efforts to develop new markets in Eastern Europe, he said. Mitarai said sharp falls in values of Asian currencies have been working positively for business by boosting the price competitiveness of Canon's production units in Asia. Canon's group sales in Asia, excluding Japan, account for only nine percent of total group sales, he added. ''The company will likely be able to maintain robust growth for the next two to three years provided currency rates stay stable and a worldwide recession does not occur,'' he said. Mitarai said Canon would propose a change in its company rules to a general shareholders' meeting this month to allow it to buy back shares, but did not say how many shares the firm would seek to buy back. Mitarai also said the company would continue to maintain a dividend payout ratio of about 20 percent for the next several years. On new business, he said the company aims to boost annual sales of its next-generation semiconductor wafers to 20 to 30 billion yen ($157 million to $236 million) in four to five years from now. The company began sample shipments of silicon-on-insulator (SOI) wafers in August last year. As for the printer business, which accounts for a little over 30 percent of the company's total sales, Mitarai said sales are expected to grow more than 10 percent in 1998 although profitability would decline due to price competition amid weak domestic demand for personal computers. He said the company plans to launch seven new digital printers later this year. Mitarai said steppers -- manufacturing equipment for semiconductor chips -- are currently the weakest sector in Canon's operations. He said that its 1998 sales of steppers are likely to decline by about 30 percent from last year, due to a drastic fall in capital investment at memory chip makers. The company shipped a total of 260 steppers in 1997.<> However Mitarai said the decline was unlikely to have a significant impact on the company's overall earnings as stepper sales account for only about five percent of total sales. Last month, Canon announced that its parent current profit in 1997 reached a record 146.81 billion yen ($1.15 billion), up 17.2 percent from a previous record of 125.23 billion yen ($986 million) in 1996. Current profit is pre-tax and includes losses or gains on investments. For 1998, the company expects its parent current profit to rise further to 150 billion yen ($1.18 billion), although it has said the pace of profit growth will slow to 2.2 percent. Canon said it plans 125 billion yen ($984 million) of parent capital investment in 1998, up from 108.1 billion yen ($851 million) in 1997. 04:45 03-05-98 Copyright 1998 Reuters Limited. All rights reserved.