Canon Marketing Japan Inc.

Canon Marketing Japan Inc.
16-6, Konan 2-chome, Minato-ku, Tokyo 108-8011, Japan
Canon Marketing Japan Group Website
 orporate Information
C
https://cweb.canon.jp/eng/corporate/Investor Relations
canon.jp/8060e-ir

Integrated Report 2022

S ustainability Initiatives
canon.jp/corporate/en/sustainability

For the year ended December 31, 2022

 onsolidated Financial Statements
Chttps://cweb.canon.jp/eng/ir/library/past.html

This report was printed using Canon’s imagePRESS printer.

Contents 
3

The Canon MJ Group’s
Sustainability Management

Functional Strategy

Message from the President

Creating Value through Our Transition to a
Service-Based Business Model
9 	Our Path to Business

Based on the philosophy of Kyosei, we will unite with all of our
stakeholders in realizing a society where all of humanity can enjoy a long life,
work, and live happily together.

Transformation and Further Growth

Public agencies
andlocal governments

NGOs and
NPOs

Intellectual Property Strategy

61

Sustainability Management

13

Focus: History of the IT Solutions Business and65

Initiatives for TCFD Recommendations

Its Source of Competitiveness

67

Initiatives to Support Sustainable Growth

15

The Canon MJ Group Today

17

Value Creation Process

19

Financial Strategy (Financial Capital)

23

Human Resources Strategy (Human Capital)

and the Medium-Term Management Plan (2022–2025)

Promotion of
Sustainability Management

35

Achieve sustainable increases incorporate value by resolving social issues
through our businessBusiness Strategy

Local communities

59

Coexist in Harmony with the Global Environment

Overall Strategy

Educational andresearch institutions

Group IT Strategy

63

31	The Long-Term Management Objectives (2021–2025)

Shareholders
and investors

57

History of the Canon MJ GroupThe Canon MJ Group’s Management Strategy
Employees

Marketing / Service & Support

11

Customers
Suppliers

55

Focus: IT Solutions Business by Customer Segment

43

Overview of Businesses by Segment

45

Consumers Segment

47

Enterprise Segment

49

Area Segment

51

Professional Segment

53

Business Process Outsourcing

The Canon MJ Group’s Corporate Governance71

Directors and Audit & Supervisory Board Members

73

Corporate Governance79

Roundtable Discussion between Outside Directors

Data
83

10-Year Consolidated Financial Summary

85

Consolidated Financial Statements

91

ESG Data

Corporate Data / Investor Information
93

The Canon MJ Group95

Corporate Information

Based on the corporate philosophy of Kyosei, the Canon Group aims
to realize a society in which people, society, and nature are inharmony and in which all human beings can live well. This is in
keeping with the Sustainable Development Goals (SDGs). We believethat materializing Kyosei is the essence of what many call sustainability management. Accordingly, we will expand areas in which we can
combine our Canon products and IT solutions capabilities to resolve
social issues through business.

Editorial Policy
Since fiscal 2019, the Canon MJ Group has published a comprehensive­integrated report that links financial information, such as results and­business strategies, to non-financial information previously published in
CSR reports.
In Integrated Report 2022, we introduce the Canon MJ Group’s ability
to create value over the medium to long term as it pursues the realization ofits 2025 Vision and the Canon Group’s corporate philosophy of Kyosei. We
consider this document an important communication tool for deepening
understanding of the Group among our various stakeholders.
Detailed financial information is available on the Company’s website andin its securities report. The website also details sustainability activities.
Reporting Period
This report covers fiscal 2022, the year ended December 31, 2022, andalso includes details of activities and information for years prior to andafter this period.
Scope of Coverage
Canon Marketing Japan Inc. and domestic and overseas Group companies(some information includes that of parent Canon Inc.)

1

Canon Marketing Japan Inc.

Integrated Report 2022

Notation in This Report
This integrated report includes the following abbreviations.
Canon Marketing Japan Group Canon MJ Group
Canon Marketing Japan Inc. Canon MJ
Reference Guidelines for Integrated Reports
The Integrated Reporting Framework of the International Financial ReportingStandards (IFRS) Foundation
Guidance for Integrated Corporate Disclosure and Company-Investor
Dialogues for Collaborative Value Creation of the Ministry of Economy,
Trade and Industry (METI)
Disclaimer regarding Forward-Looking Statements
This integrated report contains forward-looking statements about the performance and management plans of the Canon MJ Group. All forwardlooking statements are based on management’s assumptions in light of
information available to the Company at the time of publication.
The following factors may therefore influence actual results. These factors
include consumer trends in Japan as well as other major global markets; private capital expenditures; currency fluctuations, notably against the U.S.
dollar; materials prices; and political turmoil in certain countries and regions.

Canon Marketing Japan Inc.

Integrated Report 2022

2

Message from the President

Taking Our Profitable Growth to the Next StageWe will accelerate our development of highly skilled personnel and the pace of ourinvestment in growth with a focus on transitioning to a service-based business model.

Review of Fiscal 2022 Results and Issues We Foresee Beyond Our
Medium-Term Management Plan

Masachika Adachi
President & Representative Director

In fiscal 2022, we posted our highest results for operating income,

The Canon product business has already established a stableordinary income, and net income attributable to owners of the­revenue base in areas such as maintenance services for office multi-

parent. We are steadily proceeding on the right path to achieving

function printers (MFPs) and consumables for laser printers and

ITS3000, our key strategy for realizing ¥300.0 billion in net sales ininkjet printers and boasts exceptionally strong cash generating

the IT solutions business by fiscal 2025.

capabilities. In the IT solutions business, we aim to transition to a

We believe this achievement is the result of a series of efforts toservice-based business model in order to establish a stable revenue

transform the Company into a leaner profit structure, including

base, but I feel that we must increase the momentum of this shift.

clarifying the areas of focus of products and services and target

Unlike systems integration, which can generate billions of yen incustomer segments, providing higher value-added proposals, andsales at a time, the service-based business model is developed

improving productivity through the selection and concentration ofthrough upfront investments, and upon the launch of a service,businesses and the review of business processes.

sales are based on monthly and yearly usage fees. In other words,

Please refer to page 9 for details on our initiatives.

as it takes much longer to generate sales compared with systems
integration, a certain length of preparation time must be set aside.

Meanwhile, there is a positive sense of urgency when it comes to

In that sense, I feel that more needs to be done to prepare for theour business activities beyond the Medium-Term Management Plan

new services that are slated to be launched in fiscal 2023 and(2022–2025). Even as it stands now, we are certainly on the rightfiscal 2024.

track to achieve our targets for ITS3000 and our Medium-Term

Until now, we have revised our initial targets upward when it

Management Plan (2022–2025). However, looking ahead to fiscal

became clear that they were going to be achieved. In my experi-2025 and beyond, we must develop the IT solutions business withence, people develop more quickly when they take the initiative toa greater sense of urgency if we are to gain a competitive edge

aim as high as they can. I hope to create a situation right away inover the market.

which our employees have the capacity to take on new challenges

We intend to accelerate growth by increasing the profitability of
the Canon product business and investing the cash generated from

and, even if we were to increase our targets, cast the move in apositive light as an opportunity for growth.

this business in the IT solutions business and other areas.

Developing Highly Skilled Professionals and Undertaking Growth Investments
to Accelerate Our Transition to a Service-Based Business Model

To continue to grow the IT solutions business, we must constantly

must also be aware of the challenges faced by the users of ourremain up-to-date with the latest technological trends and explore

customers’ products and services.

new technologies. In addition to helping resolve our customers’issues by ensuring a thorough knowledge of their businesses, we

3Canon Marketing Japan Inc.

Integrated Report 2022

We can create new solutions by linking customer issues with thetechnologies suited to overcoming them. Moreover, if theseCanon Marketing Japan Inc.

Integrated Report 2022

4

Message from the President

Distinctive Features of the Group’s IT Solutions Business

The Group’s IT solutions business started out with the sale of MFPs

development projects are of a similar scale as other major systems

and other hardware products and the provision of relevant docu-

integrators, our strength lies in the fact that we have at ourment and imaging solutions. The years that followed saw the­disposal Canon products that input and output information andadditions of system companies such as Sumitomo Metal System

the linkage between these input and output devices and systems.

Solutions Co., Ltd. (now Canon IT Solutions Inc.), a subsidiary

Our customers vary greatly in scales, from large corporationsof the former Sumitomo Metal Industries, Ltd. and a systems

that are several times larger than the Group to companies withintegrator with strengths in the manufacturing industry, into

several dozen employees and individually operated businesses.

the Group through M&As, which has led to where we are today.

There are a variety of organizations within the Group that can

While there are other companies that provide IT solutions using

respond to each of these markets, through which we develop an

their own document equipment, what sets the Group apart is thearray of solutions. This type of structure is also a characteristic

fact that it gets more deeply involved in its mission-critical system

unique to the Group that is seldom found in other IT companies.

and not just in document solutions. Although our system

Co-Creation and Collaborative Creation That Transcend Group Boundaries

solutions are to be deployed as generic services, we can predict thetechnical fields but also familiar with customers' businesses anddegree to which they would be used in the relevant markets andhave an understanding of the overall market. This development

thereby determine whether it is appropriate to make upfront

approach is particularly underscored in our Enterprise segment andinvestments based on their potential business scale. In order toat our Group company Canon IT Solutions Inc.

accelerate investment in growth, we must continue to develop andPlease refer to page 29 for details on ourdevelopment of highly skilled IT solutions professionals.

increase the number of highly skilled personnel who have thecapacity to make such decisions.
The ability to make such decisions on a variety of projects will

Investing for Growthenable us to establish a number of services in advance. Rather than

Although we have declared the goal of investing at least ¥200.0

fearing failure, I believe that creating a wide range of services andbillion in growth over the four-year period through fiscal 2025 ofretaining the ones that have proven successful will expand thethe Medium-Term Management Plan (2022–2025), we have notscale of our IT solutions business. At the Canon MJ Group, ourbeen able to invest at the pace required to reach this target. Whileusual process is to first create various IT solutions for large corpora-

I am not implying that we should invest in just anything, if we looktions and then expand the ones that can be tailored as services

ahead to fiscal 2025 and beyond, our growth may taper off unless

across various industries for small and medium-sized enterprises.

more resources are injected into our business right away.
We have continued to take a proactive stance in regard toDeveloping Highly Skilled IT
Solutions Professionals

5

M&As. Along with making steady progress with preparations, wehave carried out investments and formed business alliances. Going

As the environment surrounding our customers’ businesses

forward, we will continue to seek M&A opportunities that allow us

becomes more diverse and complex, it is becoming increasingly

to generate synergies by closely monitoring our business situation.

difficult for customers to identify and articulate the issues that

With M&As, the companies involved must be pursuing the same

emerge along their extensive value chains. In order to propose

goals in order for them to succeed. In order to widely engage withsolutions upon gaining an in-depth understanding of customers'such companies, we will continue to keep our eyes open for suchsituations and articulating the potential issues, we emphasize theopportunities and invest in projects immediately when deemeddevelopment of human resources who are not only proficient innecessary.

Canon Marketing Japan Inc.

Integrated Report 2022

Co-creation refers to the process of creating value together withissues as the aging workforce and lack of manpower, as well as incustomers by identifying their business issues through dialogue.

accordance with Article 36 of the Labor Standards Act (Article 36

While there is the need to articulate issues that our customers

Agreement) concerning restrictions to overtime hours, which iscannot, visualize potential issues that they face, and make propos-

scheduled to come into effect from April 2024. By simply attachingals for each of them from the perspective of overall optimization,an RFID reader to their arms, construction site managers can

simply developing a new system for each project does not increase

accurately and efficiently identify the locations of construction

efficiency. We must look at issues across industries and uncover thematerials, equipment, and workers with RFID tags. In additioncommon issues while demonstrating the knowledge and speed toto reducing the time spent on locating construction materials,

determine the scope of the system to be generalized.

equipment, and workers, we expect this technology to lead to

Therefore, in addition to our own activities, we will focus on our

benefits such as enabling construction site managers to manage

collaborative creation with diverse business partners, which all

work processes more efficiently and reducing costs through more

have their own unique strengths. By combining the operational

effective placement of personnel.

insights of Canon MJ and our business partners, which are backed

The Canon RFID Location Information Solution can be used notby our extensive track record, with our respective cutting-edge

only at construction sites but also at medical facilities, logistics

technologies, we will strive to make proposals that go above andwarehouses, retail stores, offices, and other locations where

beyond the expectations of our customers and help overcome the­managing the locations of people and objects is deemed essential.

issues of society.

Preparations are well underway for the launch of this service by
the end of fiscal 2023.

Co-Creating Solutions for Society
In August 2022, Canon Inc. developed the Canon Radio
Frequency Identification (RFID) Location Information Solution
to efficiently monitor the locations of people and objects throughEngaging in Collaborative Creation with
Business Partners: A Process Geared to
Developing Edge Solutions

RFID readers, which employ radio waves to read RFID tags in a con-In April 2020, we introduced our Prospectus On-Demand Printing

tactless manner, and conducted trial operations at a construction

System, a project developed together with Mizuho Bank, Ltd. andsite of Obayashi Corporation.

Nomura Research Institute, Ltd. This system enables financial insti-

The construction industry is actively taking measures to promotetutions to easily reference, search for, and print out prospectuses*

digital transformation (DX) as a means to improve the working

through linkage to the mutual fund system on the operation panel

environment and productivity of construction sites, in light of suchof MFPs.

Canon Marketing Japan Inc.

Integrated Report 2022

6

Message from the President

The Prospectus On-Demand Printing System enables users toThis project is also a part of the process of developing edge

avoid the risk of distributing outdated versions of prospectuses­solutions, a key area of focus in the IT solutions business. By draw-

as the system can print out the latest versions at any time as welling on its strength in providing solutions for the financial industry,

as substantially reduce storage, delivery, and disposal costs as thethe Group was able to establish this business by proceeding fromprospectuses do not need to be distributed from warehouses tothe initial announcement to the packaging phase in a mere twostores. This system has been adopted by Okasan Securities Co.,and a half years, which I was extremely pleased with.

Ltd., Nishi-Nippon City Tokai Tokyo Securities Co., Ltd., and otherfinancial institutions.

have continued to manage our business with the mindset of

now that we have reached a breakthrough, we must take ourbreaking away from this situation.

profitable growth to the next stage. We will continue to invest in

We are now in a position to make high-value-added proposals
that identify the true challenges faced by our customers, andsales with our sights set on further growing our business.

In addition to this project, we have begun engaging in other­collaborative creation projects with customers to develop packaged

The Prospectus On-Demand Printing System was originally

growth, enhance the productivity of each employee, and increase

To Our Stakeholders

services that play a key role in their DX efforts. Through our solid

developed on an individual basis for each bank and securities

relationships of mutual trust with customers, we will strive to­company that had decided to adopt this system, but in October

expand our knowledge of various industries and develop solutions

2022, we began providing it as a packaged service called theand services that we can proudly claim as unique strengths of the

The Canon MJ Group is in a position where it has an abundance

MEAP Prospectus On-Demand Printing for FundWeb Library. This

Canon MJ Group.

of highly liquid assets, and therefore, investors often inquire

into one that is always counted on, appreciated, and appealing.

I often tell my employees to strive to develop the Company

move has eliminated the need to develop individual applications,

Moreover, we will expand our business in the sale of such

about our cash allocation. In response, we have set forth an

People will do their best when they feel counted on, which tends

accelerated the implementation process, and enabled support ser-­packages by collaborating with a wide range of business partners

investment target of ¥200.0 billion or more in our Medium-Termto be appreciated. When appreciated, we aspire to become evenvices to be provided uniformly throughout Japan. Backup services

throughout Japan.

Management Plan (2022–2025). As I stated earlier, althoughmore appealing as people and a company, which will lead to* Documents that financial institutions are required to provide to investors when selling
mutual funds, which can either be in paper or electronic format.

we have not been investing at the rate we had initially antici-

even better relationships with customers and business partners.

and other administrator functions have also been incorporated into
this p­ ackaged service as new features.

pated, we will steadily make investments by carefully assessing
our options.

Instilling a Culture of Taking on Challenges to Continue toGrow in the Years Ahead

As representative director, it is my duty to accelerate our transition

We have also received a number of opinions on shareholder

to a service-based business model and take our profitable growth

returns, which I believe attests to the high regard for the growth

to the next stage. In the process, we will instill a culture of takingof both our business and stock price. In the two years since

on challenges, which I am convinced will serve as the cornerstone

I became president, we have increased our dividend by 50%.

of our sustainable growth. I hope that all of our stakeholders will

We intend on continuing to return profits to shareholders bylook forward to the future of the Canon MJ Group.

ensuring profitable growth.
In recent years, we have received an increasing number ofHaving expressed my desire for employees to challenge

I have always urged our employees to take on challenges andembrace new opportunities. Because of our efforts since 2018 to­themselves on various occasions, I am beginning to see gradualestablish a leaner management foundation, we were able tochanges in our corporate culture. Many veteran employees

increase our operating income even during the difficult post-

express their enthusiasm for embarking into new areas of business.

2020 period, which saw the unexpected spread of COVID-19.

I am pleased to see this kind of willingness not only in our

Now that we have entered the post-COVID-19 era, I tell our

younger employees but throughout a wide range of employees.

employees, including new employees and managers at their

The other day, an executive of a company we have been doing

training sessions, to “open their eyes and reach for the sky” sobusiness with for some time told me that the attitude amongthat we can forge ahead to our next stage of profitable growth.

the Canon MJ employees who visit his company has changed.

To co-create and engage in collaborative creation for the

Other clients have stated that our sales representatives have

­purpose of transitioning to a service-based business model means

become more active in making proposals. I am truly delighted

creating new solutions that are unlike those of the past. There

that our proactive approach is catching the attention of thosewill naturally be failures when new challenges are pursued

outside the Company as well.

August 2023

testament to our uniqueness as a company that engages in thebusiness of document, imaging, and IT solutions as well as our
growth potential.

Owing to the efforts we have made over the years to eliminate

with an emphasis on speed. I tell our employees to embark
on challenges as quickly as possible while anticipating the kinds

unnecessary costs and establish a leaner management founda-of failures that may occur. Even if they do not succeed, theytion, we are now able to take on new challenges. Our former

can examine what went wrong and use what they learned

president often talked about becoming a company that is notfrom this experience in their next challenge.

easily influenced by changes in the social environment, and we

Page 9requests from companies to become business partners. This is a

Page 19

Page 23

Please refer to thepages indicated on
the right for details
on each strategy.
Our Path to BusinessTransformation and
Further Growth

7

Canon Marketing Japan Inc.

Integrated Report 2022

Financial Strategy(Financial Capital)

Human Resources Strategy(Human Capital)

Canon Marketing Japan Inc.

Integrated Report 2022

8

Creating Value through Our Transition to a Service-Based Business Model

Our Path to Business Transformation and Further Growth
Strengthening Our Financial Structure and Management Foundation
In addition to improving productivity by strengthening its proposal-­
making capabilities, the Canon MJ Group has taken measures to reform
its business processes and increase the efficiency and productivity of its
business operations.
We are working to visualize the series of tasks being undertaken byeach internal division and optimize overall efficiency. For example, wewere able to improve customer satisfaction and internal productivity
by enhancing the operating efficiency of our customer engineers, whoprovide maintenance and repair work for office MFPs and other products.
By centrally monitoring the status of our customers’ MFPs remotely, we
are able to keep track of the remaining amounts of toner and otherWe have transitioned to a more robust
corporate structure and laid thefoundation for our rapid growth
going forward.
Hatsumi Hirukawa
Director & Vice President
In charge of Group Corporate Planning,Group Communication, andGroup Service & Support
Director of Marketing Headquarters
Vice-Chair of Sustainability
Promotion Committee

consumables as well as the status of paper jams, enabling us to actively
dispatch customer engineers before supplies run out or problems occur.
As a result, we can now manage the schedules of customer engineers ina systematic manner and thereby increase the number of units handled
by each engineer.
In addition, we have reduced our workforce in back-office­departments by refining our shared services.
By focusing on certain customer groups, our employees are now
better positioned to make high-value-added proposals, which has
allowed us to manage selling, general and administrative expenses,
such as advertising and sales promotion costs, more appropriately.

Performance Trend
646.0

629.3

632.2

588.1
621.1

621.6

552.1
545.1

7.2

Amid its drastically changing business environment, the Canon MJ Group more than doubled its operating income
per employee over the period from fiscal 2015 to fiscal 2022. In this section, we will discuss the changes that havebeen made to our business structure to that end and our approach to achieving further growth going forward.

Meanwhile, we endeavored to enhance profitability by withdrawing
from businesses in certain fields where we felt it was difficult to add
value, focusing on areas and industries where we can demonstrate ourstrengths, targeting specific customer groups, and shifting to a strategy
based on customer segments.
For example, in terms of camera products, while we had been­conducting mass marketing campaigns for a wide range of customer
groups, we narrowed our focus to camera users with a strong interestin photography, including professionals and avid photography enthusiasts, and catered our proposals to specific subjects, which has allowed
us to increase the value we provide to customers. In addition toPlease refer to page 35 for details on
our IT solutions business by customer segment.

These efforts have allowed us to continue to increase our operating
income since our reorganization into a customer-centric corporate
structure in fiscal 2018, leading to the achievement of our highest-everresults in fiscal 2022.

198.3

2015

Canon Marketing Japan Inc.

Integrated Report 2022

8.0

2017

5.7

4.7

193.4

2016

Net sales (Billions of yen)

5.2

4.8

4.4

169.3

2018*

165.2

2019

Selling, general and administrative expenses (Billions of yen)

152.7

2020

150.6

2021

Operating margin (%)

149.3

2022

2023 (plan)

2025 (plan)

ROE (%)* Labor costs for customer engineers have been included in cost of sales from fiscal 2018 and beyond.

Operating
Income per Employee
(Millions of yen)

2015

2016

2017

2018

2019

2020

2021

2022

1.5

1.5

1.7

1.7

1.9

1.9

2.4

3.1

Toward Further Growth
The aim of the Group’s business portfolio is to continue to increase theprofitability of the Canon product business and invest these profits into
the IT solutions business and our new businesses, generating profitable
growth. We are reinforcing two strategies to achieve this aim with a highdegree of effectiveness.
The first strategy is to invest in areas where we can further refine ourstrengths, in terms of both strengthening our existing businesses andexploring new businesses.
Please refer to page 19 for details on
our growth investments.

The second is to establish an engagement improvement cycle. The
aim is to be able to autonomously develop highly skilled personnel andmaximize our organizational capabilities. Through close coordination
among the Sustainability Promotion Committee, which operates under

9

6.6

8.7

650.0
9.0
8.9

7.2

Increasing Added Value by Focusing on Our
Strengths and Identifying Our Customer Targets

Please refer to page 15 for details on
our customer-centric approach.

8.5

8.2

624.0

5.7

206.5

individual customers, similar initiatives are being introduced for officemultifunction printers (MFPs), IT ­solutions, and other products and­services for our corporate customers.
At the Canon MJ Group, one of our strengths is our extensive­customer base encompassing large corporations and small andmedium-sized enterprises, which we have boasted for many years.
By identifying the issues and needs that vary according to the sizeof our customers’ businesses, we combine Canon products and IT
solutions and provide value based on each element on a one-stop basis.
As an example of such efforts, we defined key performance indicatorsfor our IT solutions business by customer segment in fiscal 2021.
Based on our deep understanding of the various businesses and­markets we have cultivated to date, we continue to develop solutions
that focus on the areas, industries, and technologies in which we hold acompetitive advantage.

6.9

6.5

4.1

Despite various challenges, such as the 2007–2008 financial crisis,
the Great East Japan Earthquake, and the COVID-19 pandemic, theGroup has continued to develop a more robust corporate structurethat is less susceptible to changes in its external environment. Basedon our customer-centric approach, we set out to strengthen our­corporate structure to be able to efficiently provide the most optimal
solutions with greater added value by fully understanding and identifying the specific issues and needs of each customer. Accordingly,
in 2018 we reorganized our corporate structure from one based on
product and sales channels to one based on markets and customers.

7.1

9.2

the Board of Directors, and the Brand Strategy Committee, the
Human Resources Strategy Committee, and the Quality Improvement
Committee, which all operate under the Management Committee,
we are working to build a greater sense of unity among senior­management and accelerate our efforts in developing new strategies.
Please refer to page 23 for details on
our engagement improvement cycle.

In order to achieve our plans from now until fiscal 2025 ands­ ustainable growth in the years that follow, using a broad perspective
we will seize opportunities, overcome risks, and strive to maximize
our corporate value through a greater sense of unity by leveraging
our ability to make timely decisions.

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Creating Value through Our Transition to a Service-Based Business Model

History of the Canon MJ Group

2000

–

The Canon MJ Group has continued to expand its role in society and its presence in the lives of customers formore than 50 years by identifying with their various issues and aiming to become the most trusted company. We
will remain committed to our approach of always creating and proposing solutions from the viewpoint of ourcustomers and helping overcome the various issues of society.

1968

1981

1990

Canon Business Machines Sales Inc. andCanon Business Machine Services Inc.
established

The Company lists on the Second Section of
the Tokyo Stock Exchange

Becomes Ministry of International Trade andIndustry-certified systems integrator

Canon Camera Sales Co., Ltd. established

Operating income

Forms sales alliance with Sun Microsystems
Japan K.K.

1983

1969

Transitions from wholesale company toinformation services company¥

The Company lists on the First Section of theTokyo Stock Exchange

Operating margin

8.5%

Forms sales alliance with Apple Computer Inc.

1971
Canon Business Machines Sales Inc., CanonBusiness Machine Services Inc., and Canon
Camera Sales Co., Ltd. merge to form Canon
Sales Co., Inc.

49.9 billion

1985
Forms sales alliance with IBM Japan, Ltd. forworkstations and PCs

Releases BP-1000 billing machine and enters
office computer field

Net sales¥

588.1 billion
IT solutions sales¥

241.4 billion

Net sales
Operating income
Operating margin* The figures prior to 1986 are Canon MJ’s
non-consolidated figures.

1968

1970

1980

1990

2000

2005

Roles of the Canon MJ Group

1980– Trading company function (sale of PCs and servers of other companies)
1968– Sale of cameras and business machines

The Canon MJ Group was established in 1968 as a sales company for Canon’s­business machines. Looking to grow the business for Canon’s cameras and businessmachines, the Group strengthened its sales channels and expanded its customer
base by capitalizing on the power of the Canon brand and its sales capabilities.
In addition, to address the diverse needs of customers, we expanded the scopeof our business to include the sale of personal computers manufactured by Apple
Computer Inc. and other companies as well as systems integration, thereby­developing a business like no other.

Canon Marketing Japan Inc.

Integrated Report 20222015

2010– IT provider function
1990– Systems integrator function (systems integration business)

11

2010

2020

2022

Develop a highly resilient­corporate structure that is lesssusceptible to changes in theexternal environment bytransforming our business inline withchanging needs

From 2000 onward, we actively invested in IT, including through M&As, and proceeded to transform our business portfolio into that of an
information services company. However, from 2008 to 2011, the Group felt the impacts of the global financial crisis, the Great East Japan
Earthquake, and other unexpected events and therefore fell short of the profit growth it had aimed to achieve. Seeing this as an opportunity totransform its corporate structure into one less susceptible to changes in the external environment, the Group refined its unique technologicaland development capabilities to promote high-value-added businesses and bolstered productivity to strengthen its earnings structure.
Today, the IT solutions business is our core business. Going forward, we will rapidly expand our business on the road to achieving our 2025
Vision of becoming a “professional corporate group that solves social and customer issues using ICT and the power of humans.”

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Creating Value through Our Transition to a Service-Based Business Model

Focus: History of the IT Solutions Business and
Its Source of Competitiveness
The Canon MJ Group has evolved from a wholesale company into an information services company and­developed the IT solutions business into what is now its core business. We will take a close look at how theIT solutions business evolved into what it is today as well as the sources of its strength.

What inspired theCanon MJ Group to establish
the IT solutions business?

Our IT solutions services are unique in that the value they provide
is not limited to only the customer base that has been cultivatedthrough the sale of Canon products. They meet the needs of an
extensive range of customers, including large corporations, small andmedium-sized enterprises (SMEs), and individuals, as well as the specificneeds of each industry and business category, by flexibly combining
systems integrator (system and software development), trading
company, and IT solutions provider functions.
Systems Integrator (System and Software Development) Function:
Development capabilities utilizing unique technologies that have beenrefined through our development of software for Canon products,
M&As, and other aspects of our business

2022

41

%

Trading Company Function:
Ability to procure products that meet customer needs, including overseas products, and localize them as necessary
IT Solutions Provider Function:
Ability to ensure efficient IT operations through the use of IT (includingAI) and our highly sophisticated data center and to provide a vast arrayof services, including content creation and management

2005

17%

Resolving Social Issues
with IT Solutions

Leveraging these unique features, we offer a wide range ofs­ olutions tailored to the scale, type, and industry of our customers’
businesses. The ability to provide comprehensive IT support to every
type of customer is a strength of ours and our highly profitable­maintenance and operations services are an area of our operations
that continues to achieve solid growth. We continue to expand ourservice-based business model by offering a group of basic modules
that were developed together with large corporations for industryspecific systems to quasi-major and upper medium-sized enterprises
in a form that allows them to combine and select only the ones theyneed as well as to provide them in the form of services to SMEs.

Develop edge solutions
that draw on ourareas of strength andtechnologies

Expand the information
technology outsourcing(ITO) business and BPO­business by making fulluse of our proprietary
technologies

Provide a comprehensive
line of support
services to SMEs for the useof IT and the promotion ofdigital transformation

Ensure the safety andsecurity of society
through bothcybersecurity and physicalsecurity

How did the IT solutions business expand to what it is today?
In 1982, we made Fuji System Development Inc., which we invested inand made an affiliated company in 1978, a subsidiary and launched
the software business. Thereafter, we became an exclusive distributor
in Japan for Apple Computer Inc., which became the starting point for
our full-scale launch of the systems integration business. The systems
integration business proposes solutions that combine hardware andsoftware development by capitalizing on the Group’s trading company
capabilities and partnering with computer manufacturers andIT ­service companies in Japan and overseas. In 2003, we madeSumitomo Metal System Solutions Co., Ltd., which boasted strengths
in systems integration for the manufacturing and logistics industries
as well as security, a subsidiary; in 2007, we acquired Argo 21
Corporation, a company that was highly competitive in the financial
and public sectors; and in 2008, we established Canon IT Solutions Inc.
through the integration of these subsidiaries. As a result, we developeda system conducive to providing a vast range of IT solutions in thebusiness machine industry, which at the time was limited to the saleof hardware and the provision of services in the document domain.
These initiatives, which were carried out with the expectation that
paper-based businesses would eventually hit their peak, have played
an impactful role in increasing our corporate value.
Meanwhile, as the camera and business machine markets matured,
we set our sights on expanding new business domains. In 2012, weestablished the Nishi-Tokyo Data Center, a facility offering high-quality
features, such as advanced security and seismic performance, toexpand our IT outsourcing and cloud service businesses. This data
center has strengthened our system for providing a comprehensive
line of support services throughout the life cycle of our customers’
IT systems, from planning to maintenance and operations. We also

13

Canon Marketing Japan Inc.

Integrated Report 2022

Create value through a service-based
business model

The IT solutions business was launched based on our aspiration of
becoming a company that could provide comprehensive solutions
to various customer needs through the combination of hardware
and software, with Canon products at the core. As many products
began transitioning from analog to digital technology in the 1980sand digitalization and information technology took hold throughout
society due to the proliferation of the internet in the 1990s, themain focus of businesses switched from material hardware to solutions. To accommodate the change in needs from things to experiences that took place throughout these years, we accelerated ourtrans­formation from a wholesale company that relied on hardware
into an information services company, as a solutions provider thatalways took the initiative to seek solutions to customers’ issues.

Sales of the
IT solutions businessas a percentage ofnet sales

What makes the Group’s IT solutions services unique?

Please refer to page 35 for details on our line of services.

launched our SOLTAGE public cloud service based on this data center;made sweeping improvements to our security business, particularly
with the sale of ESET antivirus software; expanded our business­processing outsourcing (BPO) business centered on Canon BizAttenda
Inc.; and in the process, laid the foundation for what we are today.

2012
Nishi-Tokyo Data Center Building No. 1 begins services

2021
Announces Long-Term
Management Objectives(2021–2025)

2007
Acquires Argo 21 Corporation

2003

2008

2018

2020

Acquires Sumitomo Metal System
Solutions Co., Ltd., renaming it Canon
System Solutions Inc., thus fully entering

Canon IT Solutions Inc.
established

The Company
celebrates its
50th anniversary

Nishi-Tokyo Data Center Building
No. 2 completedProfessional
corporate groupthat solves social andcustomer issues using
ICT and thepower of humans

the IT solutions field

Canon Marketing Japan Inc.

Integrated Report 2022

14

Creating Value through Our Transition to a Service-Based Business Model

The Canon MJ Group Today
We always base our thinking on
the customer and act from thecustomer’s standpoint.
We take a scrupulously customer-centric approach in order to resolve
the issues faced by our customers and to provide maximum value. As apractical way of always ensuring we stay customer centric, we follow
the rule of placing the customer as the subject of our sentences.
For example, rather than making us the subject by stating “Canon
MJ will...,” we begin with “The customer’s issues are...” By using thecustomer’s viewpoint based on the external environment they face, wewill provide solutions that can truly meet their needs in order to bringthem satisfaction and put them in a superior competitive position.

Canon product business + IT solutions businessResolve social issues through businessIndustry
Customers ofCanon MJ’s
customers

Bring satisfaction to thecustomers ofCanon MJ’s customers

Customers’competitors

Based on the Canon Group’s Kyosei corporate philosophy, the Canon
MJ Group will unite with all of its stakeholders in realizing a society
where all of humanity can enjoy a long life, work, and live happily
together. We promote sustainability management by combining theCustomers
Customers maintain anedge over the competition

Canon MJ

Competitors

Canon productbusiness

IT solutions
business

Increased
productivity

We will resolve the various issues of customers and society under ourcustomer-based organization structure.
In order to propose the best possible solutions to the increasingly
diverse and sophisticated needs of our customers, we have establisheda market- and customer-based sales structure that is divided into four
segments. The marketing and service and support functions, which are

Canon product business and the IT solutions business to offer a more
extensive range of solutions and resolve the issues of society throughour business.

not included in the four segments, provide support to each segment
while strengthening our products and services and enhancing­productivity along the value chain.

White Logistics Movement

Customers

Individuals

Large corporations and quasi-major andupper medium-sized enterprises

Small andmedium-sized enterprises

Specialist fields

Segments

Consumers

Enterprise

Area

Professional

We sell cameras, a productmanufactured since the time of
our founding; Canon products,
such as imaging products andinkjet printers; and other nonCanon consumer products toindividual customers via massretailers and online stores.

For large corporations andquasi-major and uppermedium-sized enterprises, we
engage in direct sales of Canon
products and IT solutions that
resolve industry- and businessspecific issues. Our Major
Account (MA) Headquarters isin charge of large corporations
while our General Business(GB) Solution Headquarters
is in charge of quasi-major
and upper medium-sized­enterprises. Meanwhile, Canon
IT Solutions Inc. is in charge ofboth customer groups.

We provide Canon products
and IT solutions to small andmedium-sized enterprises inJapan by fully leveraging ourdiverse channels made up ofindirect sales through business
partners and system partners
and direct sales through Canon
System & Support.

We provide products and­solutions to customers in­specialist fields, such as­production printing, industrial
equipment, and healthcare.

Enriching lives byvirtue of imaging
culture(a campaign to increase
productivity andimprove work environmentsin the logistics sector)

Safe andsecure society

WorkstylereformFood waste
reduction

BPO

MarketingService & Support

Group Headquarters

15

Canon Marketing Japan Inc.

Integrated Report 2022

Brand

Technologicalcapabilities

Customer baseFinancial baseStrengths of theCanon MJ Group

Canon Marketing Japan Inc.

Integrated Report 2022

16

Creating Value through Our Transition to a Service-Based Business Model

Value Creation Process

Canon Group
Corporate Philosophy

Canon MJ Group2025 Vision

Kyosei

Professional corporate group that solves social and customer issues using
ICT and the power of humans(2022 results)

Societal Changes Being Focused onby the Canon MJ Group

Business Activities

Value We Create

Conserve and protect the global environment

Economic value

Popularize and accelerate digitalization

Consumers

Enterprise

Area

Professional

Promote change in the workforce

ROE
Improve
profitability bydetermining
customer targets

9.2%

Accelerate workstyle reforms

IT solutions sales
Develop continuous
relationships withcustomers
Individual
customers

Strengths of the Canon MJ Group

Large
corporations
andquasi-major
and upper
medium-sizedenterprises

Small andmedium-sizedenterprises

241.4 billion¥
Customers inspecialist fields

Edge solutions sales¥26.5 billion
HOME and IT maintenance and operations contracts

Brand• High-quality Canon products• Customer trust amassed throughDeepunderstanding ofcustomers

Staying close tocustomers

Approx 160,000
Security solutions sales¥37.0 billion

years of business

ITO- and BPO-related sales

Customer base¥22.0 billion

Unique solutions• From large companies to small andmedium-sized enterprises• Consumers

Deploy businesses thatmake full use of ourthree functions• Customers in specialist fields• Various and diverse partners
Technical capabilities

Trading company function

Systems integrator function

IT solutions provider function• Approximately 4,000 systems engineers• Enrich lives by virtue of imaging culture
Expectations

Needs• Realize a safe and secure society(security-related technologies, automated web app• Facilitate workstyle reform

creation technologies, video and image-related
technologies, and mathematical technologies)
Financial structure• Robust financial base

Combine the Canon product businessand the IT solutions business toresolve social issues through business

Material Issues• Nationwide network of service engineers• Advanced technologies

Social Value• Increase productivity
Provide solutions that
advance people’s daily
lives, work,and society

Coexist in harmony
with the global
environment

Improve organizational
capabilities to enable
diverse humanresources to thrive

Promote responsible
supply chains

Promote risk andcrisis management

Implement soundgovernance

Pages 63–64, 69

Pages 67–68

Pages 67–69

Pages 69–70

Pages 71–82• Achieve the goals of the White Logistics
Movement• Reduce food waste• High equity ratio

17

Canon Marketing Japan Inc.

Integrated Report 2022

Canon Marketing Japan Inc.

Integrated Report 2022

18

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Financial Strategy (Financial Capital)
Policy on Cash Allocation
Investment for Growth

We will pave the way to sustainablegrowth by continuing to boldly invest in
the future growth of our business.

We are actively investing in growth businesses, systems, and humanresources in line with our announcement of allocating ¥200.0 billion
or more to growth investments during the four-year period under our
Medium-Term Management Plan (2022–2025). We underscore theimportance of investing aggressively in accelerating our transformation
into a service-based business model and achieving further growth.
In terms of investing in growth businesses, in fiscal 2022 we­welcomed QB5 Inc., a human resources business processing outsourcing
company, into the Group. We have also been focusing on developing
new products, including the release of DigitalWork Accelerator, anelectronic transaction management service that will serve as a solution
for many companies in complying with the Law on Book and Record
Keeping through Electronic Methods. In addition, Canon IT Solutions
Inc.’s low-code development tool WebPerformer was upgraded, anda cloud-based version of this platform has been introduced to better
meet the needs of the rapidly growing low-code market. As for systemrelated investments, we have organized and are proceeding with the

Tsuyoshi Osato
Director & Vice President
In charge of Group Auditing,Group Finance & Accounting, and Group Procurement
Chief Executive of Finance & Accounting Headquarters

development of the Group’s next-generation mission-critical system.
By revamping our existing system and reassessing the way we conductbusiness, we aim to enhance productivity even further.
With respect to human resources-related investments, we are taking
measures and creating a framework to develop highly specialized­personnel internally. In addition to our in-house development of
employees who are highly proficient at creating IT solutions and­innovation-minded personnel who will be essential to our entry into
new business domains, we are working to secure specialists fromoutside the Company to speed up the pace of business growth.
Moreover, in response to the recent rapid increases in commodity
prices, we have implemented special pay raises for all employees of theCanon MJ Group. Going forward, we will continue to make every effort
to develop highly skilled professionals, increase employee engagement,
and create a rewarding workplace environment in the process.

Financial Results
While the Message from the President section of this report touches
on Canon MJ’s financial results for fiscal 2022, please allow me to
explain these results in more detail. As the inaugural year of our new
medium-term management plan covering the period up to fiscal
2025, fiscal 2022 was positioned as a crucial year for our business.
We got off to an exceptionally promising start, as net sales improved
7% from the previous year, to ¥588.1 billion, and operating income
soared 26% year on year, to ¥49.9 billion. As a result, we posted ourhighest results for operating income for the second year in a row, in
addition to achieving record-breaking results for ordinary income andnet income attributable to owners of the parent. Moreover, both net
sales and operating income improved in all of our business segments.
The driving force behind this encouraging performance was the
IT solutions business, the focal point of our operations, as sales
improved 9% year on year, to ¥241.4 billion. Due to the rapidly
advancing global trend toward digital transformation (DX), I believe
we were able to successfully tap into demand through the proprietary

technologies we have developed over the years and our long-­
cultivated capabilities for proposing the most optimal solutions
to customers.
Looking back on fiscal 2022, we faced headwinds from the outset
in the form of material supply shortages and surging logistics costs.
Regardless, we fared well in this environment owing to the fact thatour basic strategy of expanding the IT solutions business took holdthroughout the organization.
Based on these fiscal 2022 results, in January 2023 we upwardly
revised our Companywide consolidated financial plan for fiscal 2025.
Our operating income target for fiscal 2025, announced in April
2021, has been increased by ¥8.0 billion, to ¥58.0 billion. As for ROE,
we have already achieved our initial target of 8% ahead of schedule.
Looking ahead to fiscal 2025, we will establish a system that enables
us to consistently achieve ROE of 9% or more and proceed with ourplan of increasing this to 10% or more in the near future.

Shareholder Returns
With regard to cash allocation, we place the same level of importanceon returning profits to shareholders as we do on investing in future
growth. Our policy is to steadily increase dividends in line with profit
growth, steadily implement a dividend payout ratio of 30% or more as
we have continued to do for some time, and increase total shareholder
returns. Meanwhile, investors have requested an increase in thedividend payout ratio. We intend to do exactly that by continuing toachieve profitable growth and realizing even higher levels of net

income attributable to owners of the parent in the future.
We will continue to consider a wide range of measures to increase
the liquidity of our shares, and in 2022 we reviewed our crossshareholdings and promoted activities to increase overall market
liquidity by promoting sales of our shares. Similarly, if a company
holding our shares as cross-shareholdings expresses a desire to sell
these shares, we will proceed with such a sale.

Stock Price Range(Times)
2.5

2.0

Updated Companywide
Consolidated Financial Plan


19

1.5

Updated Financial Plans of Medium-Term
Management Plan (2022–2025)(Billions of yen)2022 (Results)

2023 (Projection)

2025 (Projection)

2025(Previously Announced
Figures)

Net sales

588.1

624.0

650.0

650.0

0

(of which, IT solutions sales)

241.4

269.2

300.0

300.0

0

Operating income

49.9

50.0

58.0

50.0

+8.0

Operating margin

8.5%

8.0%

8.9%

7.7%

+1.2%

ROE

9.2%

8.7%

9.0%

8.0%

+1.0%

Canon Marketing Japan Inc.

Integrated Report 2022

Change from 2025 Targets
Announced in
April 2021

1.0

0.5

Dec.
2012

Canon MJ

Apr.
2013

Aug.

Dec.

TOPIX

Apr.
2014

Aug.

Dec.

Apr.
2015

Aug.

Dec.

Apr.
2016

Aug.

Dec.

Apr.
2017

Aug.

Dec.

Apr.
2018

Aug.

Dec.

Apr.
2019

Aug.

Dec.

Apr.
2020

Aug.

Dec.

Apr.
2021

Aug.

Dec.

Apr.
2022

Aug.

Dec.

Note: Based on December 2012 as 1.0 times

Canon Marketing Japan Inc.

Integrated Report 2022

20

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Financial Strategy (Financial Capital)

Cash Flow(Billions of yen)FCF

The Company has been enhancing its ability to generate ample cash
flow through recent increases in profits and thorough management ofworking capital. Currently, funds that have no immediate use are lentto the parent company in the form of short-term loans. As these shortterm loans can be returned at any time when the need for funds arises,
such as in the case of M&As, we are able to respond flexibly tounexpected events.
In the Medium-Term Management Plan (2022–2025), we declaredthat ¥200.0 billion or more will be invested in growth over the four-year
period from 2022 to 2025. We will make efficient use of the cash
generated toward the achievement of our sustainable growth in
the future.

50.0
40.0

37.7

32.8

30.0

27.6

20.0

We will continue to review our rules to facilitate even timelier
decisions on investments when necessary. At the same time, we will
make sure to maintain financial discipline.
When venturing into new domains with multiple new businesses, it
is natural for some of them to fail to a certain degree. The financial
criteria for withdrawing from such businesses are already in place andin use, so we will quickly and flexibly make changes according to thestate of the Company, in the same way as our investment decisions.

While the Canon MJ Group has not engaged in large-scale M&As in
the past few years, history shows that M&As have played a major rolein its development. As it takes some time before synergies with existing
businesses are created, M&As do not necessarily lead to immediate
profits. On the other hand, even if we were to encounter negative
impacts as a result of amortizing goodwill, our financial base issufficient to withstand such consequences. Therefore, if there is apromising project in sight, we will not hesitate whatsoever in investingin such an opportunity.

16.9

10.0
0
(10.0)(20.0)(10.1)(15.9)

2021

2022

Net cash provided by operating activities

Proactive Engagement with Shareholders and Investors

Net cash provided by investing activities

Free cash flow

Policy on Cash Allocation
Maintain stable dividends based on aconsolidated payout ratio of 30% or more

Shareholder returns
Fiscal 2022–Fiscal 2025

Domains for investment

Growthinvestments of¥200.0 billion
or moreCash onhand

Investment details• Promotion of
DX business• Edge solutions• Data centers• Security, etc.

M&As and investments
System investments
Investments inhuman resources

New business creation

Accelerating the Path to Sustainable Growth
My most important role as chief executive of the Finance & Accounting
Headquarters is to ensure, from a financial perspective, that theappropriate system is in place for realizing the Group’s sustainablegrowth up to 2030 and 2050 from onward.
While we will expand our existing businesses to realize the goals of
the Medium-Term Management Plan (2022–2025), achieving
sustainable growth in the years that follow will entail entry into new
business domains. I would like to implement a variety of systems toaccelerate investment in new businesses, measure the effectiveness ofsuch investments, and develop employees who are highly proficient ininvestment strategies and can bring about innovation.

Canon Marketing Japan Inc.

(Billions of yen)

Maintain an appropriate level of cash and deposits on hand in
preparation for emergencies

Generate profits and reinvest in growth businesses

21

Overall Sales of IT Solutions Business (January to December)

Consumers

Cash anddeposits needed

Integrated Report 2022

2022. I believe this will give readers a better understanding of whichbusinesses are on the rise and the reasons behind upward trends.
Moving ahead, we will continue to actively engage with shareholders
and investors and disclose information in an easy-to-understandmanner to deepen their understanding and trust in the Group.
We look forward to your continued guidance and support.

IT solutions business growth
Priority areas

Operatingcash flow

Since its reorganization in 2018, the Group has been disclosing­financial information based on customer groups. While the IT solutions
business has been achieving solid results, the fact that it is still a­relatively little-known business is an issue we must address. Many
investors have asked for the results of our high-priority IT solutions
business to be disclosed in an easy-to-understand manner. For thisreason, we began disclosing the breakdown of results of the IT solutions
business through a matrix table on our financial presentation in fiscal

Over this past year in particular, we have put systems in place toexpedite the pace of decision-making for investments. When making
decisions on investments and loans, discussions are held by a dedicatedcommittee before the matter is presented to the Board of Directors. In
the past, the committee would spend a great deal of time discussing
almost every project. However, due to the need for quicker decisions on
a greater number of projects in recent years, our rules were changed infiscal 2022, shortening the time for making decisions by delegating
decision-making authority based on the amount of investments andallocating more time to discussions on more-important large-scale
investment projects.

Enterprise

Area

Professional

Other

Composition
Ratio

Total

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2022

Systems integration(YoY change)
services

0

0
–

57.3

64.7
+13%

9.9

10.0
+1%

7.5

9.6
+28%

(1.6)

(2.3)
–

73.0

82.0
+12%

34%

Maintenance andoperations services /(YoY change))
outsourcing

0

0
–

39.0

40.5
+4%

9.2

10.1
+9%

1.4

1.4
+4%

(2.0)

(1.5)
–

47.6

50.5
+6%

21%

IT products and(YoY change)system sales

28.8

29.3
+2%

32.2

37.4
+16%

43.2

45.1
+5%

0

0
–

(3.7)

(2.9)
–

100.5

108.8
+8%

45%

29.3
+2%

128.4

142.6
+11%

62.3

65.2
+5%

8.9

11.1
+24%

(7.3)

(6.7)
–

221.1

Total

(YoY change)

28.8

241.4
+9%

Note: Fiscal 2021 results have been reclassified to reflect the impact of the reclassifications made to certain products and businesses from fiscal 2022. “Other” is a business segment that is
excluded from the reportable segments and includes shared service businesses and the elimination of intersegment transactions.

Canon Marketing Japan Inc.

Integrated Report 2022

22

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Human Resources Strategy (Human Capital)

Aiming to further expand our business, we will
create an environment conducive to pursuing
new challenges in a timely manner by placing
priority on our employee recruitment anddevelopment processes.

this unification will ease the process of personnel transfers, creating newopportunities for employees and enhancing their motivation.
As we transition from a sales-based business to a service-based­business, I imagine it would be quite a task for senior-level employees,
who have continued to work in the sales-based business year after year,
to suddenly be expected to acquire IT skills.
Although this has been a major issue, we came across one unexpectedly pleasant miscalculation. When the Group’s employees were asked totake certification exams for DX and DX business, those of 55 years ofage and under were required to do so, while certification for those of

56 years of age and over was made optional due to the difficulties
involved. Although we had assumed that only a few employees aged 56
and over would take the exams, the results far exceeded our expectations. The exams were taken by 62% of Canon MJ Group employees
aged 56 and over and 83% of Canon MJ Inc. employees in the sameage bracket, not to mention their high scores across the board. The
drive to continue to learn and study among our senior-level employees
served as an inspiration for the management team, including myself.

Minoru Mizoguchi
Director & Senior Vice President
In charge of Group General
Administration & Human Resources Management,Group Legal and Intellectual Property, and Group Logistics
Group Executive of General Administration & Human
Resources Management Headquarters
General Manager of Secretarial Office

Maximizing the Value of Human Capital through the Creationof an Engagement Improvement Cycle

Establishing the Ideal Human Resources Portfolio for aService-Based Business Model
Let me begin by discussing the results of an external assessment that has
been conducted over a number of years on the specific qualities of theCanon MJ Group’s workforce. In this assessment, our employees received
high marks for their strong determination to achieve their goals at all
costs. Meanwhile, the results also indicated that there is room for
improvement from a creativity point of view, such as their ability to makefuture projections on their own and conceptualize freely.
The Canon MJ Group made its start through the sale of Canon
products in Japan. Due to the Group’s sales-based business model,
employees were expected to produce results by working tirelessly tosell products to customers and ensuring that this process was managed
diligently. For that reason, as demonstrated by the results of our external
assessment, there are many employees at Canon MJ with the skills andabilities to deliver on their goals.
In recent years, however, we have seen a change in our business­landscape. Customers’ needs have shifted from standalone products
to services combining products and IT solutions that help resolve theirissues. In response to this change, we at Canon MJ are reinforcing the IT
solutions business and transitioning from a business model centered onsales to one focused on services.
The key to achieving this is to identify customers’ issues, develop­solutions to resolve said issues, strengthen our ability to make proposals
that look ahead to the future and cater to customers’ individual needs,
and create new businesses by pursuing all of these measures. However,
due to the changes in the Group’s business to date, we have yet to reachour goal when it comes to developing highly creative employees who
can create new value.
Aiming to resolve this issue and develop a large number of employees
who are ideally suited to our service-based business model, we establisheda human resources portfolio in 2022. In formulating our new humanresources portfolio, we laid out two major steps: define the type of

23

Canon Marketing Japan Inc.

Integrated Report 2022

human resources necessary based on our business strategy and establish
uniform standards for IT skills across the Group.
In 2022, we proceeded with our first step of defining the type ofhuman resources necessary based on our business strategy. In continuing
to focus on the IT solutions business, we looked into what kinds of
employees would be necessary to win out in the face of competitionand defined the business direction we would pursue in each field andthe level of expertise that would entail.
Specifically, employee expertise was defined by area of expertise, suchas sales and engineering, based on a level of 1 to 5. As levels 4 and 5
indicate extremely high levels of expertise, they have been set as thestandard that all employees should aim to achieve. We also determined
the number of employees of these levels necessary for continuing to
expand our business scale. Although currently targets have only been
established for 2025, the final year of the Medium-Term Management
Plan (2022–2025), we will forge ahead with our sights on 2030 and2035 as well.
In 2023, we advanced with our second step of establishing uniform
standards for IT skills across the Group. Because many of the Group’s
subsidiaries were consolidated through M&As, each company has its
own standards for IT skills. However, to continue to expand our businessgoing forward, we must be aware of the current level of IT skills of ouremployees across the Group. To do so, we will establish benchmarks forthe type of human resources we aim to develop while referring to theDigital Skill Standards (DSS) announced by the Information-technology
Promotion Agency (IPA), an independent administrative agency, and theMinistry of Economy, Trade and Industry of Japan.
Unifying the standards for IT skills will allow us to develop humanresources on a Groupwide level. By extension, we hope to implementa variety of training programs, such as for data scientist training, byselecting talented individuals from each business segment. In addition,

To pull even further ahead with the execution of our business strategy,“maximize the value of human capital” was added as one element of
the basic policies of the Medium-Term Management Plan (2022–2025).
The key to maximizing the value of human capital is establishing an
engagement improvement cycle. The engagement improvement cycle
is a concept in which its three elements—employee job satisfaction,
the development of skilled personnel, and customer satisfaction—areinterconnected and work in a cyclical manner toward the achievementof the Company’s sustainable growth.
To be more specific, employees find their work rewarding when it
brings satisfaction to customers, and employees who find their work
rewarding will strive to grow even further and improve their skills. Whenthese skills are used to provide more value to customers, their level ofsatisfaction increases even further. This engagement improvement cycle
also leads to the growth of the Company.
I believe engagement, a premise for running the engagement
improvement cycle, is also a matter of great significance. This is because
employee engagement is about synchronizing an individual’s sense of
growth with the growth of the organization.
The Group discloses the scores of its employee awareness survey,
which are used as benchmarks for employee engagement. There are 20
questions in total to which employees respond with one of four choices,“agree,” “somewhat agree,” “somewhat disagree,” or “disagree,” andthe results are converted into a score out of 1,000 points. In 2022, thetotal score was 686 points, which is more than the 666 points thatwould have been obtained if all the positive responses had only been
given in the form of “somewhat agree.” As this marks an 8-point
improvement over the previous year, I think we should commend­ourselves to a certain degree.
Looking at the results by category, we scored particularly highin “identifying with management’s vision.” On the other hand,
we scored low in the areas of “impact of job rotation on career­development” and “sense of personal and professional growth.” We
will seek improvement in these areas by unifying standards for IT skills
across the Group and promoting the engagement improvement cycle.

When I reflect on the growth of our employees and the trans­
formation of our corporate culture, I come to realize once again thesignificance of the “Three Selfs” spirit, which constitutes the Canon
Code of Conduct. This spirit has been passed down since the foundingof Canon Inc. and is composed of self-motivation (the willingness
to take on each task in a proactive manner), self-management (theability to manage one’s own affairs), and self-awareness (the awarenessof one’s position, role, and situation).
As I stated previously, we are advocating a shift to a service-based
business model and urging employees to acquire the kind of creativeskills that have not been applied in our business to date. However, a­willingness to do only what we are told essentially runs contrary to the“Three Selfs,” as this spirit is about assertively identifying customers’issues and taking on the challenge of resolving them. I have come tobelieve once again that the spirit of the “Three Selfs” is an aspect of
the Group’s DNA that we must continue to cherish and preservegoing forward.
In continuing to expand our business, there will be a greater need to
identify new opportunities and establish businesses in a timely manner.
If the human resources necessary for developing new businesses are notavailable, it will take a considerable amount of time before they can
begin operations.
To move ahead with changes in the times and rapidly advance ourbusiness, we must make the effort to eliminate time lags by placing­priority on our employee recruitment and development processes.
Employee growth is not something that will happen overnight and sothese processes must be implemented based on appropriate forecasts
and business strategies. I will do what it takes to ensure as little timelag as possible and play an integral role in maximizing the value ofhuman capital.

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24

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Human Resources Strategy (Human Capital)

Vision for Our Human Resources

Professional human resources who demonstrate an enterprising
nature and continue to be selected for
creating new value

Integrating Our Management and Human Resources Strategies 
In addition to adding “maximize the value of human capital” as part of the basic policies of our Medium-Term Management Plan (2022–2025), we clearlylaid out our human resources strategy as one of our major management strategies and have made a commitment among management to swiftly executeand advance this strategy.

Growth Strategy
Enhance the profitability of the Canon product business andrealize profitable growth through the IT solutions business

Human Resources Strategy
Integration

Create an engagement improvement cycle with aview toward sustainable growth

Board of Directors
Code of Conduct
Employees of the Canon MJ Group work daily in accordance with the five guiding principles of the Canon Code of Conduct so that each one of themwill find their job rewarding and live with good health and wealth.
Since its founding, Canon has maintained a management philosophy of promoting an environment in which employees can enjoy rich, happy lives.
This founding philosophy continues today as the basis of the five guiding principles in the Canon Code of Conduct—the “Three Selfs” spirit, meritocracy, internationalism, familism, and health first—which are based on Canon’s commitment to respecting humanity. Through these guiding principles,
we are endeavoring to develop a corporate climate in which all of our employees enjoy working and are proud of their job.

Code of Conduct
The “Three Selfs” Spirit	Adhere to the principles of self-motivation, self-management, and self-awareness in
day-to-day activities
Meritocracy	Employees who have made achievements in important and responsible jobs areassessed fairly and equitably regardless of their age or genderInternationalism	Strive to become a culturally sensitive, internationally minded, sincere, andactive person
Familism	Strengthen the trust and understanding of others and work together in a
spirit of harmony
Health First

Live by the motto “healthy and happy” and work to cultivate character

The Canon MJ Group believes that the promotion of independent
career development is essential to putting together a group of highly
skilled human resources who share its 2025 Vision of becoming a“professional corporate group that solves social and customer issues
using ICT and the power of humans.” Guided by this belief, wedefined 2021 as a “year for new beginnings” and established anorganization to support the career development of our employees.
At the same time, we created an in-house career consultant position
filled by employees with an abundance of experience and soundknowledge, thereby enhancing career awareness among our employees.
We have also been asking managers to hold interviews and training
sessions to foster expert knowledge among their subordinates inorder to support the development of their career paths.

While we place value on approaches that we have maintained since
the time of our founding, the skills and literacy our employees needare constantly changing alongside the external operating environment
amid the rising uncertainty of the global economy and the rapid­progression of digital technologies. To respond flexibly and swiftlyto these changes, including changes occurring around the globe andthe need to refine our understanding of and sensitivities toward thetrue needs of clients, we strive to be a corporate group in which
employees from diverse backgrounds can work with enthusiasm
and demonstrate their full potential.

Management Committee

Sustainability Promotion Committee
Collaboration

Management Committee

Human Resources Strategy Committee

Brand Strategy Committee
Quality Improvement Committee

Structure Underpinning Our Human Resources Strategy
1. Human Resources Strategy Committee

2. Collaboration between Committees

We have established the Human Resources Strategy Committee,
chaired by the president and representative director, as an organizationthat formulates Groupwide human resources strategies and designs
structures for utilizing personnel based on a “right person in the rightposition” approach.
In 2022, the committee held discussions pertaining to the­devel­opment of skilled personnel and the enhancement of employee
engagement. In terms of developing skilled personnel, the committee
developed and implemented a wide variety of measures, including
holding training sessions to cultivate the next generation of management personnel, recruiting and developing employees to fill the newposition of IT business planner, rolling out DX certification and DX
business certification exams targeting all employees Companywide,
and assigning personnel to highly specialized positions. To enhance
employee engagement, the committee carried out a Companywide
survey and held discussions on analyzing the results and determining
how to utilize them going forward.

The Human Resources Strategy Committee collaborates with threeother committees involved in efforts to “maximize the value ofhuman capital,” thereby integrating the Company’s management andhuman resources strategies. These committees are the Sustainability
Promotion Committee, which promotes the sustainability managementof the Group; the Brand Strategy Committee, which oversees efforts
to maintain and improve brand value; and the Quality Improvement
Committee, which implements continuous efforts to improve quality.
Through the close exchange of opinions and the promotion of­collaborative initiatives, the committees are working to maximize thecapabilities of the Company’s human resources in a multifacetedmanner and creating frameworks and environments that lead toresults on the front lines.

Collaborative forum involving the Sustainability Promotion Committee, the Brand Strategy Committee, the Quality Improvement Committee, and the Human Resources
Strategy Committee

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Canon Marketing Japan Inc.

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26

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Human Resources Strategy (Human Capital)

Engagement Improvement Cycle

Human Resources Development We aim to create a cycle in which the independent growth of
employees and the improvement of their skills helps invigorate theorganization as a whole and creates customer satisfaction, ultimately
leading to enhanced job satisfaction and motivation for growth among
our employees. By putting this engagement enhancement cycle into
motion, we are striving to maximize the value of our human capital.
This engagement improvement cycle comprises three elements:
employee job satisfaction, the development of skilled personnel,

and customer satisfaction. Of these elements, in 2022 we sought tovisualize the gap between our current situation regarding employee
job satisfaction and the development of skilled personnel and ourideal vision for these elements. We also moved forward with examinations on how to bridge this gap. In 2023, we will execute initiatives
to address this gap and examine the creation of indicators in order toengage in more concrete efforts toward customer satisfaction.

The Canon MJ Group conducts the same basic training for all roles as well as for increasing expertise in each field and developing personnel who can lead
their departments.

Human resources
development

1

Basic training

Development of managerial personnel

2

Specialist training

Development of specialist personnel

3

Career development support

Sustainably Increase Corporate Value

1
Canon Group Corporate
Philosophy

Motivation forgrowth

Employee job
satisfaction

Engagement Improvement Cycle

Rewarding sense ofcontribution

We have been carrying out an annual engagement survey of Group
employees to use as an indicator to measure the progress we aremaking toward employee job satisfaction since 2021. In addition to
analyzing the overall results of this survey, we also analyze the results
according to such factors as Group company, division, and employee
age. By doing so, we are able to differentiate Groupwide issues andissues specific to certain divisions and visualize them accordingly. Taking
into account the differences in results between the 2021 and 2022
­surveys, we are working to share examples of successful initiatives ina cross-organizational manner. At the same time, we are engaging
in more concrete actions by incorporating initiatives to improveengagement within the business plans of each division.

Customersatisfaction

Developmentof skilled
personnel

Increase in value
providedGroup Employee Engagement Survey• Implemented engagement survey targeting Canon MJ Group employees• Four options available to answer survey questions: “agree,” ”somewhat agree,””somewhat disagree,” and “disagree,” with points assigned to each answer fora total possible score of 1,000• Response rate of 87% in 2022 (up 2% year on year)(Points)

800

678
600

2021

2022

2025

In our analysis of the results of the employee engagement survey carried out in fiscal 2021, we gained an understanding on how unseeninternal aspects of employees (their personalities and value systems) have a major impact on employee engagement.
Taking this into account, in fiscal 2022 we implemented a survey aimed at visualizing employees’ personalities, ambitions, and attitudes
toward work in conjunction with the employee engagement survey.
We conveyed the results of this survey to the employees themselves, which was utilized as reference information to help them better
understand themselves and consider their future careers. We also disclosed a personnel development support report for supervisors basedon the personalities and inclinations of their subordinates. Furthermore, through management training and explanatory videos, we
engaged in efforts to promote the proper understanding and utilization of survey results.
Opportunities for day-to-day communication have been decreasing due to the widespread adoption of telework and other changes
in workstyles. This has led to concerns that the intuitively cultivated mutual understanding between supervisors and their subordinates isdeclining. Amid these concerns, we are working to improve employee engagement by deepening supervisors’ understanding of the personalities
and values of their subordinates based on objective data and promoting ways of assigning work that help enhance subordinate motivation.
By combining survey results with various other kinds of data, we will examine ways to utilize these results as reference information for
personnel selection and assignment based on performance analysis and as a tool for promoting diverse and dynamic team building.

27

Canon Marketing Japan Inc.

Integrated Report 2022

opportunities, including a system for supporting the acquisitionof ­qualifications, self-selected distance education, and e-learning.
Furthermore, with the aim of strengthening IT skills, we have been
implementing IT passport, DX certification, and DX business certification exams targeting all employees Companywide. At the same time,
we have been pursuing such efforts as having all employees complete
data literacy courses focusing on the handling of data.
Total number of training hours in 2022

600,000 hours

Number of employees completing DX certification/DX
business certification exams* as of February 2023

13,887 (87.1%)

Number of employees receiving DX business certification

4,843 (46.7%)

Number of employees within the above group who havereceived professional level certification or higher

531* Employees can choose between DX certification and DX business certification

Specialist Training

Development of Managerial Personnel

4000

The Canon MJ Group seeks to be an entity that continues to learn,challenge, and evolve. Guided by this vision, we aim to set in motion acycle in which employees learn independently, leverage the knowledge
they gain to take on the challenge of new work, and ultimately become
able to spur change externally and change themselves internally. In our
new employee training and rank-specific training, we offer training thathelps develop a mindset and skill set among employees that allows
them to view change as an opportunity to take on new challenges.
This training is implemented based on a personnel training system thatsystematically develops the ability to think, execute, and work withothers. In addition to business skills such as logical thinking, marketing,accounting, and strategy formulation, our training aims to enable­participants to gradually develop “design thinking” and acquire career
education and human resources development capabilities. We also
­support employee growth by offering a wide range of other learning

2

686

200

TOPIC

Basic Training

KyoseiThe next generation of managerial personnel are determined by
the Nomination and Remuneration Committee, which is chairedby the president and comprises both inside and outside directors.
In addition, discussions on how to cultivate candidates for future
managerial positions are held at meetings of the standing Human
Resources Strategy Committee. In these ways, we have establishedframeworks for holding detailed examinations, including on theappointment of candidates for important positions and participationin selection training, and for developing managerial personnel.

System for Developing Next-Generation
Managerial Personnel
Board of Directors
Nomination and Remuneration Committee
Management Committee
Human Resources Strategy Committee

Quorum 12

Quorum 15

Selection Training
We implement selection training for managers and general managers
with the goal of developing a diverse range of candidates for future
managerial positions. In 2014, we held Quorum 12, a training session
for select personnel in the general manager class. Through events
such as these, we are working to enhance not only the management
skills but also the people skills of select personnel. For example, byincorporating a liberal arts curriculum into such training, we have beenworking to refine the understanding and sensitivities of managerial
candidates with the aim of having them adopt diverse perspectives
and develop flexible ways of thinking.
Furthermore, in 2019 we held Quorum 15, a set of lectures targeting
select managers, in order to swiftly cultivate leadership personnel. These
managers have also been engaging in training through contests
between business schools and field work pertaining to regional­revitalization, among other activities.
Upon completing either Quorum 12 or Quorum 15, participants
are assigned to positions in which they have no previous experience,
thereby helping them develop into diverse personnel with broad ranges
of insight. In this way, Quorum 12 and Quorum 15 function as effective
frameworks for the selection of future talent.

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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Initiative 2

Human Resources Strategy (Human Capital)

Development of Highly Skilled Human Resources at Canon IT Solutions
Canon IT Solutions Inc. is promoting a business co-creation model and the service provision model to realize its goal of becoming a­co-creating company as stated in its VISION 2025. To that end, the company is working to develop the human capital that holds
the key to these models, namely consultants, and personnel who can create service concepts.

Development of Skilled Personnel
In 2022, we defined the type of human resources required for each position and visualized the number of personnel we aim to cultivate for these­positions in accordance with our business strategies. Specifically, we have created role-specific levels for human resources on a range from 1 to 5, withlevels 4 and 5 positioned as requiring highly skilled personnel. We are working to develop such personnel while clarifying the targeted number for eachlevel. In particular, we are focusing on acquiring IT solutions personnel and enhancing their skills.

Co-creation School: Business Co-creation Course
The business co-creation model of Canon IT Solutions requires
human resources who can set the pace for the launch of
new businesses and services while firmly understanding theway customers think about the business environment andbusiness strategy. Playing such a role requires advanced
knowledge and skills, including knowledge of corporate
management, the ability to collect new information related
to matters such as customer strategies and trends, practicalabilities pertaining to consulting frameworks, and fresh insighton numerous types of information and communication technology. The Business Co-creation Course involves a six-month
curriculum that refines the issue identification capabilities of
personnel who will promote the business co-creation model.
It also enables such personnel to accumulate actual experience through hands-on projects. By doing so, this course
supports the growth of human resources who possess
advanced knowledge and skills.

Acquisition of IT Solutions Personnel
In our recruitment activities, we are placing an emphasis on acquiring
human resources with the goal of strengthening our IT solutions business.
In 2022, we commenced recruitment activities for the new positionof IT business planner. As part of these activities, we have been striving
to bolster the number of personnel with good data literacy and businessdesign knowledge. Furthermore, to promptly realize important goalsof our business expansion endeavors, we are stepping up our efforts
toward mid-career recruitment. Over the past several years, the percentage of IT-related personnel we have acquired among the total
number of human resources recruited has been increasing. In particular,
we have been inviting business managers from external institutions to
the Group in an effort to create new value. Since 2018, we have added
10 such managers with diverse backgrounds to serve in new businesses
and businesses related to IT solutions, thereby driving the growth ofsuch businesses.
Additionally, we have been promoting a structure that enables us
to secure human resources more consistently through investment in IT
solutions partnerships in a bid to expand the IT solutions business on acontinuous basis.

Percentage of IT Solutions Personnel toTotal Number of Recruits
402

381

375

52%
50%

43%
108

127

106

214

189

173

51

47
New
Mid-career
graduates hires

2

52

New
Mid-career
graduates hiresNew
Mid-career
graduates hires

2021

2022

2020
IT solutions personnel

Total number of recruits

Percentage of IT personnel (%)

Development of Skilled IT Solutions Personnel

Career Development Support

The Canon MJ Group provides career development support to its employees with the aim of enabling them to think independently about their career,enhancing their motivation by encouraging proactive engagement in duties aimed at achieving their future career vision, and fostering a corporate­culture that better invigorates independent-thinking personnel.
In addition to regular career interviews between employees and their supervisors, we help employees independently realize their ideal careers throughcareer consultation sessions with full-time career consultants (nationally certified) and career seminars specific to employee rank and age group.

Human resources

Rank-specific training
Career support for subordinates

Creative life seminar (52 years of age)
General manager training
Manager training

Career training(subordinate support)

Assistant manager training
Level 4 (chief) training

Initiative 1

Level 3 training

Development of Solutions Specialists in the Major Account Headquarters
Solutions specialists (SSs) at the Major Account (MA)
Headquarters (Enterprise segment), one of the many roles atCanon MJ, have the knowledge and know-how necessary toprovide IT solutions mainly for large corporations, working
closely with customers to develop plans centered on IT­solutions that will resolve the their issues.
In particular, SSs strive to hone their solution planning skills
and business conceptualizing skills in order to strengthen theirskills for conceptualizing and building IT for business based onsocial issues and technological innovation while considering
the growth strategies of customers. The Company has created the “Defining the Ideal SS” document and a skill assessment system and conducts practical training to develop highly
skilled human resources.

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The Company is carrying out multifaceted activities
to ensure that skills firmly take root through group work,classroom learning, on-site practice, presentations, feedback,and other venues, with an emphasis on putting skills into
practice. These activities include the DX Human Resources
Development School for learning methods and processes tocreate new business models, the Design Thinking Workshop
for learning the entire “design thinking” process and gaining
the experience of putting it into practice, and the New Solution
Workshop for putting the solution discovery process—from“shared feelings,” a concept that is particularly important
within design thinking, to “defining the problem”—into
practice.

Workplace

Personal career development

Fifth-year employee training

Career design seminar II (27 years of age)

Second-year employee training

Career design seminar I (24 years of age)

Career interviews between
employees and their supervisors

Digital Skill Standards (DSS) by the Ministry of Economy, Trade andIndustry at the end of 2022, there is a growing need around the world
for personnel who do not fit into conventionally defined roles. As wework to define the type of human resources required for each positionand visualize the targeted number of personnel for these positions inaccordance with our business plans, we are promoting efforts to utilize
the DSS to hone the skills of our IT solutions personnel.

3Career consultation sessions(available as needed)

Focused on human resources involved in the systems integration business,
we have laid out a personnel system based on the Information
Technology Skill Standard (ITSS). We have also provided training on theskills required for each position and offered support for the acquisitionof qualifications. Through such efforts, we have supported the growthof our human resources. Recently, there has been an increase in roles
that go beyond the ITSS. As demonstrated by the establishment of the

Co-creation School: Service Creation Course
The service provision model of Canon IT Solutions needs­personnel that can create services to resolve common issues
in industries, businesses, and day-to-day work as wellas ­services that are highly competitive. To fulfill this role,
employees must have a deep understanding of and insight
into industries, businesses, and day-to-day work, in addition
to the ability to identify social issues and problems throughmarket surveys and analysis and to conceptualize and create
new services that offer solutions. They must also possess­executional capabilities to utilize practical IT to launch newservices. The Service Creation Course offers a curriculum­centered on the Graduate School of Project Design, helping
to strengthen the new service creation capabilities of personnel
who will promote the service provision model, thereby­supporting their growth.

New employee training

Asia Trainee System

In-House Recruiting Program

The Canon Group offers the Asia Trainee System, through which it
sends young employees to undertake language and practical training
at overseas subsidiaries in Asia. The goal of this system is to foster
professionals who are familiar with local languages, cultures, andbusiness practices.
This is a training program of Canon Inc. that aims to have thoseparticipating in the program become strong candidates for future
overseas assignments.

We support career development through the Job Opening Bulletin
System. This program encourages employees to take on new­positions and seeks to stimulate their career aspirations.

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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

The Long-Term Management Objectives (2021–2025) andthe Medium-Term Management Plan (2022–2025)
Progress of Medium-Term Management Plan (2022–2025) Long-Term Management Objectives (2021–2025)
2025 Vision

Professional corporate group that solves
social and customer issues using

ICT and the power of humans

Basic Policy 1 

Basic Policy 3 Expand IT Solutions Businesswith Profit

Strengthen Areas of Expertiseand Create New Businesses

We improved on our results from the previous year for the four Key
performance indicators (KPIs) adopted for each customer segmentof the IT solutions business. The IT solutions business continues toexpand owing to factors such as the increasing number of high-­
value-added services and solutions associated with our service-based
business model.

In the industrial equipment business, one of our areas of expertise,
we achieved significant growth by improving our performance,­particularly in the service business through our support for multi-­
vendor maintenance and orders for projects we have been undertaking
in response to the brisk demand for semiconductors.
Business Strategy (pages 43–54)

IT Solutions Business by Customer Segment (pages 35–42)
Business Strategy (pages 43–54)
Intellectual Property Strategy (pages 59–60)

Medium-Term Management Plan (2022–2025)

Fiscal 2022
Results

Financial Targets (2025)

Operating income

Net sales

ROE

58.0 billion

650.0 billion

9.0%

¥

¥

of which, IT solutions sales

300.0 billion¥

Basic Policy 2 

Basic Policy 4 Increase the Earnings
Capacity of Existing
Businesses

Group Management Aimed atContinuous Growth

We have developed the Canon product business into a highly­efficient and profitable business by deploying strategies that are­tailored to the sales channels of each product. We have been able
to raise the sales price of each product and maintain a high market
share by continuing to introduce appealing products and propose
high-value-added solutions.

The results of our employee awareness survey, which has been
conducted with all Group employees since fiscal 2021, improved fromthat of the previous year. We have also consistently invested in ourhuman resources to strengthen IT skills in line with our IT solutions
strategies for each customer segment.
Financial Strategy (pages 19–20)
Human Resources Strategy (pages 23–30)
IT Solutions Business by Customer Segment:
Investments and Business Alliances (page 37)
Sustainability Management (pages 61–62)

Business Strategy (pages 43–54)
Basic Policy 1 Expand IT Solutions
Business with Profit

Basic Policy 2 

Basic Policy 3 Increase the Earnings
Capacity of Existing
Businesses

Strengthen Areas ofExpertise and Create New
Businesses

Execute and accelerate our IT solutions
strategy by customer segment

Develop strategies tailored to each

Expand the stock business by establishinga service-based business model

Further enhance the profitability of main

customer segment

product businesses

Ensure continuous growth of the industrial
equipment business
Create new businesses

Financial Plan Revision 
Based on our performance in fiscal 2022, we updated our Companywide consolidated financial plan in January 2023, which included revising our­operating income target for fiscal 2025 upward by ¥8.0 billion to ¥58.0 billion. As for ROE, we were able to achieve our initially announced fiscal 2025
target ahead of schedule. Therefore, as we work our way to fiscal 2025, we will establish a system that enables us to steadily achieve ROE of 9% or more
and proceed even further with the intention of achieving 10% in the foreseeable future.

Updated Companywide
Consolidated Financial Plan
Basic Policy 4 

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Integrated Report 2022

Establish an engagement
improvement cycle

Accelerate business investments
toward growth(Billions of yen)
Change from 2025 Targets
Announced in
April 2021

2022 (Results)

2023 (Projection)

2025 (Projection)

2025(Previously Announced
Figures)

Net sales

588.1

624.0

650.0

650.0

0

(of which, IT solutions sales)

241.4

269.2

300.0

300.0

0

Operating income

49.9

50.0

58.0

50.0

+8.0

Operating margin

8.5%

8.0%

8.9%

7.7%

+1.2%

ROE

9.2%

8.7%

9.0%

8.0%

+1.0%

Group Management Aimed at Continuous Growth
Maximize the value ofhuman capital

Updated Financial Plans of Medium-Term
Management Plan (2022–2025)

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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

The Medium-Term Management Plan (2022–2025)

Basic Policy 1 

Basic Policy 3 Expand IT Solutions Business with Profit

Strengthen Areas of Expertise and Create New Businesses

We will expand the scope of our service-based business model by implementing and promoting IT solutions strategies foreach customer segment and ensure continuous growth of the IT solutions business by enhancing the profitability of ourmaintenance, operations, and outsourcing services.
Please refer to pages 35–42 for details on our IT solutions business by customer segment.

Sales by Service Type in the IT Solutions BusinessIndustrial Equipment Business

Creation of New Businessess

We will establish a business structure that is­conducive to continuously generating sales and­profits by expanding our business scale throughthe discovery of new products and developing
highly skilled personnel in the areas of installationand maintenance.

We will take measures to instill innovation skills
in all of our employees while aiming to develop­independent businesses through spinouts and joint
ventures based on our in-house entrepreneurshipprogram and other initiatives.

(Billions of yen)

350.0

269.2

250.0

82.0

73.0

70.9

0

Various seeds+14.2%

50.5

47.6

37.2
101.3

100.5

108.8

Fiscal 2020 (Result)Fiscal 2021 (Result)Fiscal 2022 (Result)

Systems integration services

In-house entrepreneurship program aimed atcreating new businesses(platform holder with multi-vendor
maintenance capabilities)

Ratio ofnet sales:25%

2023–2025 CAGR*

57.5

50.0

Diversified needs

The Canon MJ Group

100.1

200.0

100.0

Suppliers

241.4

221.1

209.6

150.0

Customers

300.0

300.0

Discovery

Planning andsales

Installation
andmaintenanceConsideration of
new products

Expansion ofexisting
businesses

Support for
multi-vendor
maintenance• Skill measurement• Follow-up

111.5

Fiscal 2023 (Plan)

Maintenance and operations services / outsourcing

Fiscal 2025 (Plan)

IT products and system sales* Compound annual growth rate

Basic Policy 2 

Implements measures to enhance theinnovation skills of all employees• Skill acquisition

Plan for2023 andBeyondBasic Policy 4 Increase the Earnings Capacity of
Existing Businesses

Please refer to page 43 for an overview of ourbusinesses by segment.

Printing BusinessIn each customer segment, we propose solutions that help customers cope with their business issues while working toovercome their inadequacies and tap into new demands for printing services.

Group Management Aimed at Continuous Growth
In order to pick up speed in our efforts to “expand the IT solutions business with profit,” “increase the earnings­capacity of existing businesses,” and “strengthen areas of expertise and create new businesses”—the basic policiesof the Medium-Term Management Plan (2022–2025)—we have established “maximize the value of human capital”
as an additional element of the basic policies from fiscal 2023.

Camera BusinessWe will develop stronger relationships with customers by expanding our line of products and comprehensive services thatcater to their various needs and pool the Group’s collective strengths to expand the imaging business by shifting our focus
away from cameras.

Develop Strategies Specific to Each Customer Segment (Printing Business)
Leveraging our customer-focused organizational structure, we will develop strategies that accurately identify the needs ofeach customer segment in a timely manner.
Target Customers

Segments

StrategyEnterprise• Expand sector-specific and operational-specific projects by leveraging our customer base• Tap into new demands for document solutions stemming from the diversification of offices during the
COVID-19 pandemic• Expand business by acquiring new quasi-major and upper medium-sized enterprise customers• Strengthen sales force through reorganization

Area• Strengthen and intensify area marketing• Improve productivity by reassessing business processes

Large corporations

Quasi-major and uppermedium-sizedenterprises

Small and medium-sizedenterprises

33

Canon Marketing Japan Inc.

Integrated Report 2022

Maximize thevalue ofhuman capital

Establish an
engagement
improvement cycle

Accelerate business­investments
toward growthPages 23–30

Page 27

Pages 19–22

Canon Marketing Japan Inc.

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34

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Focus: IT Solutions Business by Customer Segment

The Canon MJ Group will
dramatically grow its business byaccelerating the expansion of its
IT solutions business throughprofits and realizing its growthstrategy, including M&As andstrategic investments.
Katsuya Imoto
Vice President
Director of Group IT Solutions Strategy
Management Center

The Canon MJ Group has been making history for the past 55 years byengaging with its countless customers. The relationships we have builtwith our customers are among our most valuable assets, and we boast
an extensive customer base that ranges from small and medium-sizedenterprises (SMEs) to quasi-major and upper medium-sized enterprises
and large corporations.
In our Long-Term Management Objectives (2021–2025), we declared
the goal of achieving ¥300.0 billion in sales in the IT solutions business.

Our basic policy in developing the IT solutions business is to provide
value that caters to the specific needs of each customer segment, andbased on this policy we are working to clearly define the areas of focus
for each segment as the key elements of our growth strategy. I havetaken the helm in formulating and executing the specific strategies toachieve this goal.

To resolve the issues of SMEs by not only implementing and installingstandalone IT equipment but also combining maintenance and­operations services, in August 2021 Canon System & Support Inc.
began providing its Makasete IT DX Series service based on the conceptof working closely with its customers for years to come. In fiscal 2023,
we will take our Makasete IT DX Series to another level by providing
support services for IT coordination, sales capability enhancement, andemployee training in sequence, which are high on the list of priorities
for managers of SMEs.
To resolve the issues of our quasi-major and upper medium-sizedenterprise customers, it is certainly important to gain a deeper­understanding of their business, but it is also essential to understandthe common issues faced by their industry and similar businesses. Edge
solutions is the answer to such needs of customers and society. Our edge
solutions currently consist of four core solutions, including imaging
solutions, that have combined Canon’s unique strengths, and we willreinforce these solutions even further through the creation of our fifthand sixth edge solutions.
For our large corporation customers, our efforts go beyond
the development of edge solutions to include the development of“co-creation” services aimed at resolving various social issues withour customers. Together with our customers, we will make full useof digital technology, turn innovative ideas into services that benefit
society, and find solutions to social issues.
Moreover, regardless of the size of our customers’ businesses, wewill help them achieve digital transformation (DX) by providing security

support services in response to the increasing demand for cybersecurity
measures in recent years as well as outsourcing services, such as information technology outsourcing (ITO) and business process outsourcing(BPO), based on our data center services, which have earned a highreputation for quality.
For the four aforementioned priority areas of the IT solutions­business (HOME and IT maintenance and operations contracts for
SMEs and edge solutions, security solutions, and ITO and BPO services
for large corporations and quasi-major and upper medium-sizedenterprises), we have adopted the KPIs indicated below for our
Medium-Term Management Plan (2022–2025).
To ensure that we achieve the targets of these four KPIs, the IT
Solutions Promotion Committee was established in October 2020.
President Adachi serves as the chairperson of this committee while
Hatsumi Hirukawa, the director in charge of Group Corporate Planning,and I serve as vice-chairpersons. Under the IT Solutions Promotion
Committee, we have established the Task Force on Edge Solutions
Execution and Promotion, the Task Force on SMB-IT Solutions Execution
and Promotion, and the Task Force on Total Security Execution andPromotion. In each task force, we have removed Group and organizational boundaries and the senior general managers of headquarters
related to the IT solutions business are tasked with the responsibility of
implementing these strategies. We have been expanding our businesswith speed and agility through the continuous operation of a plan–do–
check–act cycle for our strategy execution.

Realizing the Strategies of the IT Solutions Business for Each Customer Segment
In the Japanese economy, which was hit hard by the COVID-19­pandemic, the biggest issue facing SMEs—said to account for 98.6%
of all companies in Japan—from a business continuity perspective is the

securement of skilled professionals, and this need only continues toincrease. It is especially difficult for many of these companies to acquire
IT and security p­ ersonnel on their own.

IT Solutions Business by Customer Segment: KPI Targets

1

Edge Solutions Sales

Large corporations

Canon Marketing Japan Inc.

Area

Provide full support by continuing toengage with customers• Continue to engage with customers by leveraging ournationwide network of service centers and business partnerships

Integrated Report 2022

Enterprise
Quasi-major andupper medium-sizedenterprises

Fiscal 2022

CAGR

Fiscal 2025

26.5 billion

+19%

¥

¥

Digitaldocument
services

Mathematicaland demand
forecasting

45.0 billion

Security
Solutions
Sales
Fiscal 2022

Low-codedevelopment

43

Scope of figures:

Imaging
solutions37.0 billion¥

ITO- andBPO-Related
Sales
Fiscal 2022

22.0 billion

¥

CAGR
CAGR

+13%

+9%
KPI

2

SMEs

Area

Enterprise35• Develop edge solutions that focus on
specific areas of strength, industries, and technologies

Support for both cybersecurity and physicalsecurity measures

Promote DX business by gaining an
in-depth understanding of our customers

Quasi-major andupper medium-sizedenterprises

SMEs• Resolve social issues through co-creation with customers based on a
deep understanding of their diverse range ofbusinesses and markets

Create value through a service-based business model

Large corporations

Provide value-added services by taking fulladvantage of our highly sophisticated data centers

Promote DX business through co-creation with customers

KPI
KPI

HOME and IT Maintenance andOperations Contracts

Fiscal 2025
Fiscal 2025

48.5 billion¥
Fiscal 2022
Approx.

160,000

CAGR

Fiscal 2025+11%

Approx.

32.0 billion¥

220,000

Canon Marketing Japan Inc.

Create value through a service-based business model

KPI

Integrated Report 2022

36

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Focus: IT Solutions Business by Customer Segment

Fiscal 2022 Performance and Our Pursuit of Rapid GrowthIn fiscal 2022, the inaugural year of our Medium-Term Management
Plan (2022–2025), we got off to an exceptionally promising start as
we improved on our results for all of our KPIs from the previous year.
We also invested aggressively to achieve our targets for fiscal 2025.
In addition to investing in strategic business alliances, we are rapidly
expanding the IT solutions business through profits by means of­business transfers in the healthcare IT business as well as M&As asa part of our BPO business. In order to achieve ¥300.0 billion in sales

KPIs of IT Solutions Business

KPI

in the IT solutions business by fiscal 2025 and continue to grow ourbusiness thereafter, we must break with the past and make more
dynamic investments. The Canon MJ Group will dramatically expand
its business by pursuing the measures necessary for realizing its four
KPIs as well as its growth strategy, including M&As and strategic
investments.

Fiscal 2021 Results

Fiscal 2022 Results

Change(from Previous Year)1

Edge solutions sales¥

23.0 billion¥

26.5 billion

+15%

KPI

HOME and IT maintenance andoperations contracts

135,000

160,000+19%

Security solutions sales¥

32.5 billion¥

37.0 billion

+14%

2

KPI

3

KPI

1

Edge Solutions Sales

21.5 billion

ITO- and BPO-related sales

4¥

22.0 billion+2%¥

IT Solutions Business by Customer Segment: Investments and Business Alliances
December 2021
KPI

2

April 2022
KPI

IT maintenance1

Formed a strategic
business alliance withNI Consulting Co., Ltd.

July 2022

Edge solution
Concluded a capital and business allianceagreement with Kantsu Co., Ltd.

KPI

1Edge solution

Edge solution

1

Concluded a capital and business allianceagreement with Capital Asset Planning, Inc.

37

Canon Marketing Japan Inc.

KPI

1Edge solution
Concluded a capital andbusiness allianceagreement with
CHIeru Co., Ltd.

26.5 billion

¥

CAGR

+19%

Fiscal 2025¥

45.0 billion

We refer to the solutions focusing on the areas, industries, and­technologies where the Group holds a competitive edge as edge
­solutions, which consist of imaging solutions, digital document­services, mathematical and demand forecasting, and low-code
development.
With edge solutions, we will continue to hone the strengths of ourvarious existing solutions to create unrivaled IT solutions and expand

the areas where we hold an advantage. In addition, we will establish
a service-based service model by utilizing our customer base to
create solutions individually with customers of large corporations
and then expand them to customers of the same industry as well as
to quasi-major and upper medium-sized enterprises by convertingthese solutions into services.

Digital Document Services

Supporting DX with an Extensive Line of
Devices and Various Imaging Platforms andAnalytics Services

Helping Reform Business Processes through theIntegration of Canon Input and Output Devices
and Canon MJ’s IT Solutions

The Canon Group’s strengths lie in its optical technologies, which havebeen passed down since its founding as a camera manufacturer, its
line of more than 200 devices, its various imaging platforms, and its
elemental technologies for analyzing the most advanced images andvideos. Meanwhile, the Canon MJ Group is teaming up with multiple
vendors in Japan and overseas to expand the scope of its image
analysis solutions as well as providing optimal security products,
helping ensure the safe and secure use of data.

Based on our in-depth knowledge of our customers’ workflow, which
has been cultivated through the supply of Canon input and output
devices, we help customers reform their business processes according
to changes in legal systems and workstyles. For example, in 2022 webegan providing the DigitalWork Accelerator Series, which enablestransaction-related documents to be stored and maintained overthe long term in a manner that complies with the Law on Book andRecord Keeping through Electronic Methods, as a result of which
we have expanded our area of expertise from document solutions
to document services.

Concluded a capital and business allianceagreement with THS, Inc.

January 2022
KPI

December 2022

Reached a basic agreement tointegrate the systems integration
business of Canon Medical Systems
Corporation’s hospital
information system

Fiscal 2022

Creating Unrivaled IT Solutions and Services byRefining Our Competitive Edge

Imaging Solutions
KPI

Edge Solutions Sales

Integrated Report 2022

June 2022
KPI

4

BPO
Reached an agreement on theacquisition of shares of QB5 Inc.

September 2022
KPI

3

Security solution
Concluded a capital and businessalliance agreement with Asilla, Inc.

Canon Marketing Japan Inc.

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38

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Focus: IT Solutions Business by Customer Segment

Mathematical and Demand Forecasting

Proposing Optimal Solutions in the
Manufacturing, Sales, and Logistics Sectors
with the Latest AI Technology and Our
Mathematical Technologies Crafted fromYears of Experience
Leveraging our track record in the research and development ofmathematical technology (operations research) and our know-how
in the use of the latest AI technology, we resolve various businessand management-related issues using an advanced algorithm. Witha particular focus on supply chain management (including demand
forecasting, production planning, and delivery planning), our consultants
provide optimal data-driven solutions and resolve customer issues
by drawing on their data analysis capabilities, such as data analytics
technology and mathematical optimization technology, and their­extensive knowledge of business processes.

Low-Code Development

Developing a Proprietary Low-Code
Development Platform That Facilitates the
Rapid Creation of Web Systems
Launched in 2005 as a platform to pioneer low-code development,
WebPerformer shortens development time by developing web systems
intuitively, releasing systems rapidly, and maintaining quality, facilitatingco-creation-based development between the development department
and the business departments that use these systems. WebPerformer
allows for the development of systems that flexibly adapt to changes
in the business environment and has been adopted by more than
1,300 customers. A cloud version of this development platform,
WebPerformer-NX, was released in 2023, enabling us to expand ourrange of proposals through the operation of front-end systems in thecloud and mission-critical and peripheral systems on premises.

KPI

2

HOME andIT Maintenanceand Operations
Contracts

HOME and IT Maintenance and Operations Contracts
Fiscal 2022

160,000

Approx.

Hiroyuki Hayashi
General Manager
Digital Document Service Planning Division,
Solution Development Center
Business Innovation Section,
Marketing Headquarters

Canon Marketing Japan Inc.

To address the needs of our many customers, we have been developing business document solutions, digital
workflow, and other digital document services for more than 20 years in conjunction with Canon products. We
believe the knowledge we have gained from of the flow of data utilization of our various customers, from input tooutput, and their entire workflow is a strength of the Company. Utilizing this knowledge, in December 2022 welaunched the DigitalWork Accelerator Series service, a cloud service that complies with the Law on Book andRecord Keeping through Electronic Methods and the invoice system in Japan.
DigitalWork Accelerator provides a framework for centralizing the management of transaction-related­documents and managing information on the business processes for the digitalization, approval, and storageof paper documents.
According to customers that have adopted this service, DigitalWork Accelerator is easy to use and has reduced theworkload on the front lines, as it eliminates the need to register purchase orders, invoices, and other documents andto enter index information and can be easily integrated with accounting systems.
Going forward, we will expand our services for this platform, from services geared toward compliance with laws
and regulations, such as the invoice system in Japan, to support for reforming business processes, thereby creating
new value through the strengthening of the linkage with business applications and industry-specific services andaccelerating the growth of our customers’ businesses in the process.

It is becoming more difficult than ever for SMEs to secure highly skilled
professionals, particularly when it comes to acquiring IT and security
solutions experts on their own. To overcome these issues, Canon MJ

Integrated Report 2022

Approx.

220,000

offers a range of services for its SME customers that include its DX­support services such as HOME and HOME Select Series, and IT­maintenance and operations service, such as Makasete IT DX Series.

IT Maintenance and Operations

Resolving the Issues of SME Customers with
the Makasete IT DX Series

HOME is Canon MJ’s original DX support service that offers security
measures and cloud services on a one-stop basis for a monthly fee. In
addition to providing support for the implementation and operationof unified threat management devices as a security measure, we­facilitate compliance with the Law on Book and Record Keeping
through Electronic Methods, the digitalization of work processes,
and improvements to productivity through the provision of our
HOME Select Series service.

In addition to having to cope with IT equipment failures, SMEs are facinga growing number of other operation-related issues stemming fromchanges in their business environment. The Makasete IT DX Series service
provides customers with a safe and secure environment in which they canconduct business operations by resolving their issues in a timely mannerand providing operational support to ensure the proper use of businesssoftware and the stable operation of IT equipment. We will also expand
our selection of management support services and educational support
services to help overcome the issues faced by managers of SMEs.

Massage from the Person in Charge of Sales
IT Maintenance and Operations
Yasushi Fujimura
Assistant Manager
Tokyo-Daini Sales Dept. 1
Tokyo-Daini Sales DivisionTokyo Sales Group
Sales Headquarters

Canon System & Support Inc.

Customers that do not have an in-house IT specialist often ask about how they should respondto the accelerating pace of digitalization. The Makasete IT DX Series is a service that provides
support for not only equipment selection and implementation but also fault isolation and operations. This allows us, as sales representatives, to confidently make proposals for everything fromequipment selection to operations and gain the support of customers as a trusted IT partner. As
the Company will also be expanding its services to support management in addressing issues
related to the formulation of IT investment plans, the development of sales strategies, and thepromotion of sales activities, I will work to improve my own IT skills and evolve together withcustomers so that we connect with them on a wider scale, from their front lines to management.

Comments from the Person in Charge of the Customer Support Center
IT Maintenance and Operations
Senior Staff
Infrastructure Operation
Support Dept. 1
Customer Support Center
Infrastructure Engineering
Group
Engineering Headquarters
Canon System & Support
Inc.

Canon Marketing Japan Inc.

Fiscal 2022

Providing Stable Security Solutions andEfficient Cloud Services to SME Customers

Yasushi Tateiwa

39

+11%

Maintaining Our Strong Connections with Customers by
Supporting the IT Operations of SMEs

HOME

Message from the Person in Charge of Planning
Digital Document Services, DigitalWork Accelerator 

CAGR

Canon System & Support Inc.

The Customer Support Center receives inquiries from customers under IT maintenanceand operations contracts. In handling our customers’ day-to-day issues, we utilize the tools
necessary to promptly resolve matters remotely. We are also working to improve our knowledge on ways to handle customer inquiries so that we are able to resolve even more issues
for our customers. The number of operation-related inquiries has increased since the releaseof the Makasete IT DX Series, and I get the sense that our operational support services, whichtake into account the ongoing changes in the business environment, are drawing tremendousinterest among customers. Moving ahead, we will continue to provide new value by adhering
to our customers’ needs for everything from troubleshooting to operational support.

Canon Marketing Japan Inc.

Integrated Report 2022

40

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Focus: IT Solutions Business by Customer Segment

KPI

3

Security Solutions
Sales

Security Solutions Sales
Fiscal 2022¥

37.0 billion

CAGR

+9%

KPI
Fiscal 2025¥

48.5 billion

4

ITO- andBPO-Related Sales

Providing Comprehensive Support from a Cybersecurity andPhysical Security Perspectiveof mind through the development of comprehensive security­solutions that encompass both physical security, such as video­surveillance, and cybersecurity, including network intrusion detection
and prevention services.

The demand for outsourcing services continues to rise due to the challenge of securing workers caused by the declining birth rate and aging
population, the accelerating shift to the cloud and the advancement of
security measures due to the evolution of DX, and other factors. At the

Physical Security

Cybersecurity

Information Technology Outsourcing (ITO)

Delivering a Wide Range of Solutions by
Incorporating the Canon Group’s Hardware andSoftware Capabilities

Providing an Array of Products, Services, andSupport Based on the ESET Antivirus Software

Continuously Supporting the IT Environmentsof Customers with the Nishi-Tokyo Data Centerat the Core

Massage from the Person in Charge of Planning
Cybersecurity 

Koji Sekiguchi
Manager
Security Solution Planning Dept. 1
Security Solution Planning Division
Security Solution Planning GroupIT Products Marketing Section
Marketing Headquarters

In addition to antivirus software and other solutions that protect
websites from external attacks, we offer a wide selection of services toprevent cyberattacks, including vulnerability assessment and malware
analysis services. The ESET antivirus software, for which we are an
exclusive distributor in Japan, has gained the recognition of manycustomers for its high detection capabilities and easy operation, ranking
atop Nikkei Computer Customer Satisfaction Survey 2022–2023 in the
security products division for the 10th year in a row.

Canon Marketing Japan Inc.

As the exclusive distributor of the ESET comprehensive endpoint protection software in Japan, Canon MJ not only
purchases and sells the software but also ensures that it can be used by customers with peace of mind throughverification of the security program by the engineering department in accordance with the Canon MJ Group’s
quality standards. The software is released upon confirmation that they meet a certain level of quality. We also
operate a customer support center, through which we receive feedback from ESET users that are forwarded tothe developer ESET, spol. s r.o. In this way, we continue to make improvements in accordance with the needsof the Japanese market and its expectations for high quality. We provide value to customers through a variety
of means, including prepurchase consultation and post-purchase product support, by drawing on our technicalknowledge and expertise cultivated over many years. Going forward, we will continue to deliver reliable security
solutions in order to maintain our solid reputation for accurate malware detection, ease of operation, and technical,
support, and information dissemination capabilities.

We ensure that our customers can always receive support for their
IT environments through our cloud integration services that cater tocustomer needs, our system maintenance and operations services
that minimize the workload of our customers’ operations throughthe strength of our extensive operational track record spanning morethan 20 years, and our data center services that support our customers’
IT systems 24-hours a day, 365-days a year through our exceptional
operational quality and equipment.

Canon Marketing Japan Inc.

Integrated Report 2022¥

22.0 billion

CAGR

+13%

Fiscal 2025¥

32.0 billion

Canon MJ Group, we help create an environment that allows our­customers to focus more closely on their core operations by ensuring
a thorough understanding of their entire business.

Business Process Outsourcing (BPO)

Developing Distinctive Services Based on
Our Unique Technologies
The Canon MJ Group’s BPO services encompass the outsourcing of­specific projects as well as customers’ non-core operations. In addition
to being able to flexibly assign the right personnel for each project,
the strengths of our BPO services lie in our ability to ensure a thoroughunderstanding of our customers’ business flows, make use of the Canon
MJ Group’s abundance of input and output devices and technology, andstreamline and enhance the performance of their series of tasks. We
also make business improvement proposals aimed at streamlining ourcustomers’ core operations.

Massage from Persons in Charge of Operations
ITO (Nish-Tokyo Data Center) 

Shinichi Kobayashi (right)
General Manager
Data Center Management Division
Data Center Service GroupIT Service Technology Headquarters
IT Platform Business Section

Yuko Furusaki (left)
Regular Employee
Data Center Management Division
Data Center Service GroupIT Service Technology Headquarters
IT Platform Business Section

41

Fiscal 2022

Enabling Customers to Focus on Their Core Operations by
Taking Charge of Their IT Operations

Today, cyberspace and physical space are merging in all areas of theworld. While their linkage offers many benefits, we must also consider
the increasing risk of the impact of cyberattacks on physical space.
The Canon MJ Group provides customers with security and peace

By combining the Canon Group’s diverse line of network cameras
with video management software, our proprietary video cloud service
VisualStage, and AI technology, including facial and behavior recognition,
we will support the DX activities of customers in a variety of industries
and business categories by utilizing video data, such as diagnostic
imaging and video analysis, in addition to surveillance.

ITO- and BPO-Related Sales

Canon IT Solutions, Inc.

The Nishi-Tokyo Data Center, owned and operated by the Canon MJ Group, offers exceptional levels of security andoperational quality that meet the strict requirements of our customers and is used by a number of companies inindustries such as finance, manufacturing, and cloud computing. No matter how sophisticated and robust the data
center, it will not be enough to ensure that our services will cater to the needs of our customers. With the aim ofenhancing our operational quality, each week we conduct drills to ensure that we are able to respond quickly andproperly to equipment failures and other problems that occur on a regular basis as well as to prepare for large-scaledisasters based on our Data Center Contingency Plan and its over 200 failure scenarios. Moreover, once a year,
we carry out a comprehensive interlock inspection by cutting off the power supply and using power generators.
The training scenarios are updated each year based on the assumption of failures at multiple facilities, possible
points of failure, and the types of failures that could occur. We have been able to maintain high levels of quality
as a result, as demonstrated by our acquisitions of the Management & Operations Stamp of Approval and otherquality-related certifications.
In addition, Nishi-Tokyo Data Center building No. 1 and No. 2 received Outstanding Specified Anti-Global Warming
Facility (near-top-level business facility) certification from the Tokyo Metropolitan Government’s Bureau of Environment
for their exceptional system for promoting measures against global warming. Moving ahead, we will contribute tomore efficient use of energy in society through the operations of our energy-efficient data centers.
Note: Please refer to our corporate website for information on our various certifications. (in Japanese only)
https://www.canon-its.co.jp/solution/idc/

Canon Marketing Japan Inc.

Integrated Report 2022

42

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Overview of Businesses by Segment
Our business mainly consists of the Canon product business and the IT solutions business. As for customer­segments, Canon MJ operates in the four specific categories, the Consumers, Enterprise, Area, and Professional
segments, and helps many customers create value.

スタッフ

Consumers

Professional

7%

150.2

132.8

Customer segment

Consumers

23%
Area

37%

Net Sales, Operating Income, and Operating Margin

Individuals
We sell Canon products such as cameras, which have been
­manufactured since the time of our founding; imaging products;
and inkjet printers, as well as non-Canon consumer products,
to individual customers through retailers, online stores, andother business formats.

7.3
2018

13.6

9.9
12.3

5.2

4.9

136.6
10.2
13.9

6.9
2019

2020

Net sales (Billions of yen)

Fiscal 2022
breakdown of
net sales bycustomer segment

129.5
10.5

124.7

2021

2022

Operating income (Billions of yen)

Operating margin (%)

Net Sales, Operating Income, and Operating Margin

EnterpriseEnterprise

33%
スタッフ

195.8

188.2

Customer segment
Large corporations and quasi-major and upper medium-sized enterprises
We sell Canon products and IT solutions directly to large corporations
and quasi-major and upper medium-sized enterprises to resolve­management issues that vary by industry and business category. Our
Major Account Headquarters is in charge of large corporations while
our General Business Solution Headquarters is in charge ofquasi-major and upper medium-sized enterprises. Meanwhile,
Canon IT Solutions Inc. is in charge of both customer groups.

202.7

190.6

184.6

7.3
10.1

8.7
2018

5.1

5.1

4.6

2019

17.1

13.9

9.4
2020

Net sales (Billions of yen)

8.4

2021

2022

Operating income (Billions of yen)

Operating margin (%)

IT solutions business
Net Sales, Operating Income, and Operating Margin

41%

Area
257.6

Customer segment

268.3
223.7

Small and medium-sized enterprises

5.4

4.7

Fiscal 2022
breakdown of
net sales bybusiness segment

We provide Canon products and IT solutions to small and mediumsized enterprises in Japan by fully leveraging our diverse channels forindirect sales through business partners and system partners anddirect sales through Canon System & Support Inc.

14.4

12.1

2018

220.8
5.5

4.0
12.0

9.0
2019

2020

Net sales (Billions of yen)

2021

226.6
6.9
15.6

2022

Operating income (Billions of yen)

Operating margin (%)

Net Sales, Operating Income, and Operating Margin

Professional
Canon product business, etc.

59%

46.4

Customer segment

43.7
30.7

Specialist fields
We provide products and solutions for customers in specialist fields,such as production printing, industrial equipment, and healthcare.

31.5
7.9

41.7
12.6
5.2

6.2
1.8
0.9
2018

3.7

1.9

2.5

1.6
2019

Net sales (Billions of yen)

2020

2021

2022

Operating income (Billions of yen)

Operating margin (%)

43

Canon Marketing Japan Inc.

Integrated Report 2022

Canon Marketing Japan Inc.

Integrated Report 2022

44

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Consumers Segment
We will strengthen ties with customers in our existing businesses while
continuing to increase profits by exploring and creating new products
and services that exceed expectations.
On the strength of an organizational structure that was built through the marketing of Canon products
and is flexible and resilient in the face of change, we will help bring more fulfillment and convenience tocustomers’ lives through the products and services we provide.
By strengthening ties with customers through both physical and digital means, we will continue­developing our camera and other existing businesses and identify new needs while exploring and creating
high-value-added products and services that exceed market expectations. In so doing, we will ensure highlevels of customer satisfaction and increase profitability by enhancing productivity through the developmentof a highly efficient sales and service structure.

Examples of Our Initiatives

Fostering of Photographic Culture

Koichi Mikami
Senior Vice President
Director of Consumers Business Unit

Business Activities 

Our Strengths 

In the rapidly emerging consumer market, where trends and technologicalinnovation are rapidly changing, we strive to deliver value that exceeds
customer expectations. Although the camera market has matured, we
expect demand to pick up going forward as photo opportunities
increase as a result of people spending more time outside their homes.
In fiscal 2022, the EOS brand, which celebrated its 35th anniversary,
maintained its leading share*1 of the market for the 15th consecutive
year, as it continues to be loved by many customers. The EOS R seriesof mirrorless cameras has been performing particularly well, and weplan on expanding our lineup of RF interchangeable lenses, which may
be necessary in a variety of shooting scenes. In the printing business,
we offer a lineup of inkjet and laser printers that address the needs
stemming from more people working from home and of individual
business owners, providing high added value through products that
contribute to greater convenience and productivity for our customers.
We are also promoting the sale of consumer-oriented products thatare in line with the changing markets and latest trends and creatingproducts and services that offer new value.

As demonstrated by its leading share*2 of the digital interchangeablelens camera and inkjet printer markets in fiscal 2021, the trust that
Canon has earned from customers over the years for its long-beloved
brand is a significant advantage to Canon MJ. We have developed arange of physical and digital points of contact with customers, including
mass retailers, our very own showrooms and service centers, and the
e-commerce sites of Canon MJ and our business partners. Particularly forcustomers with a strong interest in photography, including professionals
and avid photography enthusiasts, we offer products that cater to arange of expressions specific to each subject and continue to introduce
new activities, including the Canon Photo Circle, to bring even greater
satisfaction to customers and develop a stronger connection with them.
In addition, we are committed to fostering a photographic and imaging
culture that is unique to Canon, a company that has supported theactivities of photographers and filmmakers for many years. Furthermore,
our distribution and sales channels and our marketing capabilities thatenable us to explore and roll out products and services other than thoseof the Canon brand are essential to our business foundation.

*1 Based on research by Canon MJ on the market share of digital interchangeable lenscameras*2 Based on research by Canon MJ

Segment Targets 

142.5
127.5

10.2

9.8

10.2

13.9

14.0

13.0

2022 (Results)
Net sales (Billions of yen)2023 (Projection) 2025 (Projection)
Operating income (Billions of yen)

Operating margin (%)• Increasing number of photo opportunities as a result of people spending
more time outside their homes• Growing demand for video creation• Changes in printing needs due to the increasing adoption of remote
work systems and online classes• Increase in digital communication with customers(including through our corporate website, e-commerce sites, andsocial media)

Risks• Shrinking digital interchangeable lens camera market due to further
functional improvements in digital devices• Reductions in print volume due to changes in printing environment• Increase in purchase prices due to higher crude oil prices andenergy costs

Strategy for Achieving the Goals of Our Medium-Term Management Plan 

Canon Marketing Japan Inc.

Incorporating Canon’s Imaging Technology into Our Broadcasting Activities
In the video production market, we have seen a growing demand inrecent years for IP remote production* due to increased productionof video content. Against this backdrop, in fiscal 2021 Canon Inc.
brought together its long-cultivated imaging and network technologies
to develop a remote camera system for video production that offers
high image quality and streamlines photographic workflow. In
fiscal 2022, Canon expanded its lineup with the introduction of the
CR-X300 outdoor remote camera and the top-of-the-line CR-N700
4K/60P remote camera. Used in a range of outdoor settings, in April
2022 the CR-X300 was adopted as a system to provide on-site images
for the television broadcast of the Masters Tournament, one of thefour major championships in men’s professional golf held in Augusta,
Georgia, in the United States. The cameras installed around the golfcourse swung from side to side and zoomed in and out through theoperation of a remote camera controller set up at a TV station inTokyo. We will continue to deliver such products and solutions that

address the growing needs of customers for remote methods of video
production that offer greater efficiency and labor-saving merits.
* A new IP-based method of broadcasting programs in which the broadcasting stationand the broadcasting site are connected through an IP network and the programs areproduced by a remotely located broadcasting station

Right: Live streaming using the
CR-X300. Canon’s camera
lineup caters to the video
streaming needs of various
indoor and outdoor sporting
events.

Opportunities

As the leading camera manufacturer in Japan, we will play a leading role in developing photographic and imaging cultures. By forming even stronger
relationships with our customers, we will continue to expand our camera, inkjet printer, and other existing businesses while improving profitability. We
will also strive to achieve the goals of the Medium-Term Management Plan (2022–2025) by providing imaging solutions that make full use of Canon’s
imaging technologies and create new products and services that look ahead to the future.

45

photos with those who share their interests, such as landscapes,­railways, and aircraft. Meanwhile, the Canon Photo Contest, which
was established in 1953, was held for the 56th time in fiscal 2022.
The contest, said to be the largestof its kind in Japan, has received
numerous entries from professionals
and amateurs alike. In these ways,
we will proceed with a variety of
approaches to bring more enjoyment
to the lifestyles of customers who havea strong interest in photography.

Awareness of the Market Environment 

Net Sales, Operating Income, and Operating Margin136.6

We have been promoting a variety of activities over the years for­customers with a strong interest in photography, including professionals
and avid photography enthusiasts. One of them is the Canon Photo
Circle, which has been enriching the photographic lifestyles of its
many members since 1954 by providing an abundance of information,such as introductions to the works of professional photographers, details
on new products, and shooting and printing techniques, throughmember magazines and web content. As COVID-19 restrictions were
gradually eased, in fiscal 2022 we began holding activities in person
once again. This club activity has been held at eight locations
throughout Japan to allow users of Canon cameras to enjoy taking

Integrated Report 2022

Creating New Products and Services
Based on the concept of “creating comfortable spaces that bringhappiness to people,” we formed our new brand albos (abbreviatedfrom “always by our side”) through co-creation with Canon
Electronics Inc., a Canon Group company.
The brand’s first product albos Light & Speaker is a wireless speakerwith a built-in lamp that takes users away from their everyday life intoa world of their own through its pleasant sound and lighting. Inspiredby the desire of developers to help customers enrich time spent withloved ones and become immersed in their hobbies through the useof lighting suited to each situation, thisproduct was sophisticatedly designed
through the carving of aluminum andthe use of exceptional precision processing technology.
In terms of the Makuake*1 project,support purchases have topped the ¥25
million mark and 666 supporters havecontributed to its renewal as the No. 1-selling*2 portable Bluetoothspeaker of all time.
Owing to the success of this project and the feedback from­supporters, albos Light & Speaker was released to the general publicin December 2022.
We are proceeding with a variety of measures to spread awarenessof the new albos brand, such as enabling people to try out thealbos Light & Speaker inside a dedicated private room called thealbosROOM, as well as promoting other marketing activities that
­integrate physical and digital elements. Going forward, we will
expand our business not only from a consumer point of view but
also from the perspective of developing business applications.
We will look to invent and create more products and services
like the albos Light & Speaker that bring satisfaction to customers.
*1 A crowdfunding site that provides a mechanism for supporters to discover projects
that strive to create meaningful products and support them by purchasing theseproducts.
*2 As of May 2023

Canon Marketing Japan Inc.

Integrated Report 2022

46

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Enterprise Segment
We will position our unrivaled service-based business as a pillar of
earnings and achieve exponential growth through in-depth analysis ofcustomers and industries, the use of proprietary technologies, andco-creation with customers.

Canon IT Solutions Inc.
We are co-creating the future with our customers by leveraging ourunique technologies and developing highly skilled professionals,
thereby achieving ITS3000 ahead of schedule.

We aim to realize a sustainable society by co-creating solutions with customers and resolving their issues.
Accordingly, we will unite all of the resources of our business unit, including our customer base and oursales, technological, and development capabilities, to further strengthen collaboration and create new­service-based businesses that leverage our strengths to accelerate the growth of the IT solutions business,
which is the driving force of our business.

Hiroyuki Matsumoto
Vice President
Director of Enterprise Business Unit

Business Activities 

Our Strengths 

The Major Account (MA) Headquarters, the General Business (GB)Solution Headquarters, and Canon IT Solutions Inc. work together toprovide Canon products and IT solutions that help resolve the various
industry- and business-specific issues of our vast range of customers,from large corporations to quasi-major and upper medium-sizedenterprises, public agencies, and educational institutions. As digitalization continues to advance, we must take the correct approach todigital transformation (DX) by considering not only partial improvements to efficiency through individual products and information andcommunication technology (ICT) but also how all of the data used inour customers’ business operations can be utilized to transform theirbusinesses. Along with hardware and software solutions, we provide
integrated services that cover everything from systems development
to maintenance and operations, and combine them with our various
IT solutions, including outsourcing. Through these and other efforts,
we help resolve the issues of our customers and promote their DX
strategies through co-creation.

Segment Targets 

Awareness of the Market Environment 

Net Sales, Operating Income, and Operating Margin
249.0
202.7

215.0
9.0

8.4
8.0
17.1
2022 (Results)
Net sales (Billions of yen)

At Canon MJ, we boast an extensive customer base that has been
­developed over the years through the introduction of Canon products
and related solutions for offices. Our strengths lies in our sales capa­
bilities to propose the best possible solutions to our customers bydeveloping solid relationships with them at every level, from the front
lines to management, and resolving their issues by ensuring a soundunderstanding of their business lines, industry, and business activities.
Moreover, Canon IT Solutions, a systems integrator with around 3,500
system engineers within our business unit, has proprietary software
technology, mathematical technology, language processing technology,
image analysis technology, and other highly sophisticated technologicaland development capabilities at its disposal. Through the combinationof these technologies with Canon’s imaging and AI technologies, weare able to create solutions that cannot be equaled by our competitors.
Our collective strength that allows us to provide a range of IT solutionsin the form of proposals, development, maintenance, and operations
in our areas of expertise—backed by Canon products and our technological capabilities—is also a strength of the Company.

17.3

22.5

2023 (Projection) 2025 (Projection)
Operating income (Billions of yen)Opportunities• Increasing demand for IT investments due to strengthening of DX measures• Higher demand as a result of advancements in network infrastructure• Continuously expanding systems integration services market• Greater demand for document solutions consultations due to implementation of workstyle reform• Increasing need for imaging-based solutions• Rising demand for security risk measures• Greater demand for BPO due to the need to improve operational efficiency,
enable employees to concentrate on core duties, and offset the declining
workforce

Risks

Operating margin (%)• Lack of talent and intensifying competition for securing highly skilled professionals in the IT market• Rapidly increasing number of paperless offices due to widening adoptionof telework and digital workflow• Higher purchase prices due to increases in crude oil prices and energy costs

Strategy for Achieving the Goals of Our Medium-Term Management Plan 
The MA Headquarters and GB Solution Headquarters will steadily expand existing businesses, such as Canon products, document solutions, and imaging solutions, while Canon IT Solutions will expand systems integration services as well as solutions such as mathematical and demand forecasting andlow-code development. Moreover, each organization within the business unit will work together to expand our new service-based business modelthrough co-creation with customers and turn it into a pillar of earnings.
To these ends, we will enhance the IT skills of the entire business unit by strengthening our human resources development and reinforce our ability
to create solutions through design thinking. At the same time, we will enhance our development of highly skilled IT personnel through measures that
include acquiring human resources from outside the Company.

47

Canon Marketing Japan Inc.

Integrated Report 2022

Aiming to realize VISION 2025, Canon IT Solutions Inc.’s vision for fiscal 2025, we will strengthen management
through business activities that are based on our medium-term management plan, which places emphasis on­processes and key performance indicators, and forge even further ahead with the development of our three
VISION 2025 business models: the service-based business model, the systems integration model, and the businessco-creation model.
With the service-based business model, we will address the issues shared by many of our customers by drawing
on our technology and knowledge of various industries and businesses accumulated to date. The systems integration
model will facilitate our development of systems that capture the essence of our customers’ issues and underpin theirbusinesses at every stage of the IT life cycle, including maintenance and operations. With the business co-creation
model, we will look into business-related issues that our customers are unaware of and co-create solutions from a
DX point of view. We will also remain committed to developing highly skilled professionals so that we can provide
even greater value to customers through these three business models. Further, we will strengthen engagement
through measures aimed at strengthening ties with customers and ensuring employee satisfaction and growth. As thecenterpiece of the Canon MJ Group’s ITS3000 strategy, Canon IT Solutions will orchestrate the achievement of thisstrategy while relying on the cooperation of Group companies, including the utilization of Canon MJ’s customer base.

Akira Kanazawa
President
Canon IT Solutions Inc.

Business Overview
Canon IT Solutions is a systems integrator that engages in the development, operation, and maintenance of systems
for a wide range of sectors, primarily manufacturing and finance, and provides services to businesses centered ondata centers. On the strength of our high levels of quality control, we offer a vast array of solutions that make use of
our very own software and mathematical technologies that have been cultivated over many years.

Joint Proposal by Canon MJ and Canon IT Solutions (Edge Solutions)

Asset Management Navigation System for Shinkin Banks: Cloud-Based Sales Support Service for Investment Products
The government’s request to the residents of Japan to shift their focus
from savings to investments and the prolonged period of low interest
rates have led to more people building assets through investment
trusts and other financial products. Financial institutions are expanding
their line of financial products to meet this demand, but they are also
being called on to provide sufficient information to investors on risks
and investment policies to ensure that investments are made in thesafest and most appropriate manner.
We offer a variety of cloud-based solutions to support financial­institutions. For shinkin banks, which offer financial services by working
closely with local communities, we have developed the Shinkin
Deposited Asset Navi, a cloud-based sales support service for assets
in custody. This service facilitates shinkin bank employees in helping
customers realize stable asset formation in the sale of investment
trusts, insurance, public bonds, foreign currency deposits, and otherfinancial products by adhering to the Financial Instruments andExchange Act and other relevant laws.
Through co-creation with Shinkin Central Bank, the central financial
institution for the nationwide network of shinkin banks, Shinkin
Deposited Asset Navi was developed to meet the operational­specifications of shinkin banks and is a universal system for the industry
that can be utilized by all such banks in Japan. In Shinkin Deposited
Asset Navi, we have realized a highly secure and scalable cloud service
that reduces operational overhead through the development of acloud-based platform at the Canon MJ Group’s data center, which
complies with international standards such as FISC*1 guidelines
and the M&O Stamp of Approval certification*2. In addition, weplan to offer new services to shinkin banks and expand our services

to financial institutions outside of shinkin banks.
We will bring together Canon’s strengths in cutting-edge imaging
technology and Canon IT Solutions’ technological and development
capabilities and capitalize on our know-how and wealth of businessknowledge accumulated to date on various industries to develop­various service-based solutions going forward.
*1 FISC: The Center for Financial Industry Information Systems. Canon IT Solutions’
Nishi-Tokyo Data Center and Okinawa Data Center comply with the FISC Security
Guidelines on Computer Systems for Banking and Related Financial Institutions.
*2 Please refer to our corporate website for details on the Management & Operations
Stamp of Approval and other certifications. (in Japanese only)
https://www.canon-its.co.jp/solution/idc/

Shinkin banks in Japan
Operational support
for assets in custody

Shinkin Central Bank

Provision of services

Co-creation

Canon MJ

Cooperation

Shinkin Deposited
Asset Navi

Canon IT Solutions

Universal system

Canon Marketing Japan Inc.

Integrated Report 2022

48

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Area Segment
As the largest segment in sales, we will strive to achieve further growthand profitability by orchestrating the digitalization of small andmedium-sized enterprises (SMEs) with untapped potential.
As a business segment that has continued to engage directly with customers and has been creating­customer value with business partners, the Area segment boasts diverse sales channels that span acrossall of Japan. To help resolve the various issues of SMEs, we will strengthen our understanding of their­customers and competitors as well in order to position ourselves to propose better solutions. To that end,
we will strive to develop highly skilled professionals and ensure that our sales channels are perfectly suited
to maximizing earnings. By addressing our customers’ ever changing management issues in the most­flexible and timely manner, we will also help revitalize local communities.

Canon System & Support Inc.
At Canon System & Support, we strive to continue expanding our profitable
service-based business by addressing the concerns of SME customers across Japanthrough our comprehensive line of support services.

Yasuyuki Uotani
Vice President
Director of Area Business Unit

Our Strengths 

Business Activities 
IT investment is drawing greater interest among customers of SMEs
as a solution to issues such as the need to streamline operations due
to labor shortages and strengthen security. For customers of SMEs
lacking in-house IT personnel, we propose the most optimal solutions
by combining Canon products and our IT solutions, such as the
HOME IT support cloud service and our Makasete IT DX Series of­comprehensive IT support services that cover everything from theoperations and maintenance of IT equipment to security. In this way,
we have been supporting the customers of SMEs in resolving their
management issues and advancing their businesses. Moreover, by
taking advantage of our indirect sales channels, made possible by
our nationwide network of business partners as well as our direct
sales channels courtesy of Canon System & Support Inc., we havedeveloped and maintained solid relationships with a wide rangeof customers.

Our strengths lie in our diverse sales channels that span across thecountry, such as our business partners that serve prominent local firms,
system partners that are mainly involved in the systems integration
business, and Canon System & Support, which engages in direct sales.
We support the DX activities of our SME customers to help overcome
their management issues through our ability to propose optimal­solutions by combining Canon products, mission-critical system­packages, security products, maintenance and operations services,
and a variety of other products and services. Also, in a bid to expand
the IT solutions business, we will join forces with business partners that
previously handled primarily Canon products to enhance our sales
capabilities for IT solutions.

Over the years, we have been providing customers with the tools and infrastructure for communicating­information to as many people as possible and to people as far away as possible, which are essential tothe continuity of our customers’ businesses, and helping ensure stable operations in the process.
Since the 1990s, we have been addressing the changing needs associated with the proliferation of PCs andthe internet by providing a range of solutions, including corrective maintenance for PCs and security devices,in a timely manner. Nowadays, SME customers are faced with issues such as uncertainty with regard to theimplementation of DX and a lack of personnel with IT knowledge. In response to these needs, we support ourcustomers’ businesses by helping them plan IT investments and select and implement appropriate IT systems,
as well as by ensuring stable operations through support for day-to-day maintenance and operations whenproblems occur. We will continue to help customers evolve their business through the use of IT by acquiringand developing highly knowledgeable and skilled personnel.

Takeshi Hiraga
President
Canon System & Support Inc.

Business Overview
Canon System & Support is in charge of the direct sales of Canon products and IT solutions and consulting­services for SMEs in Japan.
Leveraging our nationwide business network and group synergies, we provide support services on a one-stopbasis for planning IT investments, selecting and implementing the most optimal solutions to customers’ issues,
day-to-day operations after implementation, and maintenance when problems arise.

Joint Proposal by Canon MJ, Canon System & Support, and Business Partners (HOME and IT Maintenance and Operations)

Segment Targets 

Awareness of the Market Environment 

Net Sales, Operating Income, and Operating Margin

226.6

239.4

245.0
8.0

15.6

Net sales (Billions of yen)

17.3

• Increases in IT investments as SMEs look to digitalize their business• Increasing demand for security risk measures• Amendments to laws pertaining to SMEs, such as the Law on Book andRecord Keeping through Electronic Methods and the invoice system
in Japan

Risks

7.2
6.9

2022 (Results)

Opportunities

19.5

2023 (Projection) 2025 (Projection)• Lack of talent and intensifying competition for securing highly skilled­professionals in the IT market• Reductions in print volume at offices due to the increased adoption of­telework and digital workflow• Higher purchase prices due to increases in crude oil prices and energy costs

Operating income (Billions of yen)

Operating margin (%)

Strategy for Achieving the Goals of Our Medium-Term Management Plan In order to increase productivity and maximize the profitability of office multifunction printers and other Canon products, we promote area marketing
to identify the specific characteristics of each area and develop the most optimal sales channels. Moreover, by sharing the know-how and skills wehave accumulated to date in Canon System & Support’s direct sales business with our business partners and continuing to expand our IT solutions
business, we will help SMEs ensure compliance with relevant laws and regulations and enhance productivity by digitalizing operations.

49

Canon Marketing Japan Inc.

Integrated Report 2022

Triune Approach to Providing Customer Value
The Business Partner Headquarters of Canon MJ has teamed up with
Canon System & Support and local business partners to address theshortage of talent who can implement DX and security measures,a management issue facing many SMEs. In this joint proposal, we­presented IT solutions to a software development company in a bid
to resolve their security issues.
This customer faced the following issues as it set out to create a
network environment and establish security measures to prepare forcyberattacks in light of the yearly growth of its business.
(1) Lack of information system administrators(2) Increase in administrative tasks associated with enhanced
security measures(3) Need to eliminate regional differences in security levels
The Company and its business partners considered comprehensive
security measures and proposed(1) a high-availability system that can be operated even by newly
appointed personnel,(2) a highly maintainable system that reduces the workload of administrators, and(3) the unification and enhancement of security levels at business sites.
As a result, these proposals were adopted upon receiving highmarks for their ability to reduce the workload of administrators andprovide customers with peace of mind through Canon System &Support’s total support service.

In this scenario, we provided value to customers through a triune
approach that involved the total coordination of business meetings by
Canon MJ; the selection, proposal, and provision of services by ourbusiness partners that catered to customer needs; and the provision ofmaintenance and operations services by Canon System & Support. By
providing value in such manner throughout the country, sales of the
Area segment’s security business soared 118% from the previous year.
Together with our partners, we will continue to provide value bymaking full use of our strengths.

Customers

Comprehensive proposals

Business partners

Maintenance andoperations

Support for proposals

Canon MJ

Cooperation

Canon System & Support

Canon Marketing Japan Inc.

Integrated Report 2022

50

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Professional Segment
Production Printing

Healthcare

We aim to enhance profitability by helping overcome the digitalization
issues of the printing industry with our total solutions that combine ourabundance of products and services.

As one of Japan’s leading independent systems integration vendors inhealthcare, we aim to achieve further growth and profitability by providing comprehensive support for our customers’ digitalization needs.

As digitalization continues to move forward in the printing market, we will make proposals that anticipate
customer needs by enhancing our knowledge of trends and expertise in the printing industry and­ascertaining changes in printing needs. By expanding our scope of proposals to cover total solutions,
including pre- and post-printing processes, in addition to the sale of stand-alone hardware, we willf­urther enhance profitability and resolve our customers’ printing issues.

Based on our know-how in the healthcare industry and the implementation of medical ICT cultivated overthe last five decades, our expert staff, who are in charge of selecting products and services, propose solutions
that live up to customer expectations by accurately identifying the rapidly emerging trend of DX in the medical
industry. In addition, we will improve profitability by stepping up business growth through the integration of
the electronic medical records and other businesses of Canon Medical Systems Corporation other businesses
and drawing on the Canon MJ Group’s business knowledge and ICT know-how to provide comprehensive
support for the digitalization and operations of the medical and healthcare fields as a whole.

Katsumi Ueda
President
Canon Production Printing Systems Inc.

Business Activities 
In the data printing services, publication and commercial printing, industrial
printing, point-of-purchase systems, large format printing, document­services, and other business fields, we propose a range of solutions thatcombine hardware and software by means of which we, as a true partnerthat can always be counted on, ensure our customers receive high added
value for their businesses.

Our Strengths 
We harness our long-cultivated software development capabilities and­combine them with our hardware capabilities, including printing systems
for the form printing industry, point-of-purchase systems for the retailindustry, and drawing management systems for the manufacturing industry,
to address our customers’ professional needs in a wide range of businessdomains.

Yoshinobu Kuroi
President
Canon ITS Medical Inc.

Example Initiative
In fiscal 2022, we were able to facilitate our customers’ entry into
the business of color inkjet cutsheet printers and continuous
feed printers. We were also able to tap into the publicationand commercial printing markets and thereby lay the groundwork to expand sales of inkjet printers upon acceptance of our
proposal to enter the data printing services business in relation
to notifications from local governments. Going forward, we
will aggressively expand our sales activities to increase salesof inkjet printers and enhance our line of proposals to resolve
our customers’ issues, such as enhancing the production­efficiency of printing operations.

Industrial Equipment

Business Activities 
Canon ITS Medical Inc. provides IT solutions to the medical and healthcare
sectors, centered on electronic medical records. We boast an extensive
lineup of IT solutions and services that provide value to customers in the
medical field and offer a one-stop service that covers everything fromsystem proposals and development to installation, operations, andmaintenance.

Our Strengths 
Our strengths lie in our extensive network of contact points with medical
institutions, from large hospitals to clinics. We provide one-stop services,from system proposals to installation, operations, and maintenance,
through our many highly specialized personnel who are familiar with­various medical policies and systems and our over 120 system engineers
who develop, assemble, and install medical information systems. Anotherstrength of ours is our multiple support centers we operate as a part of ourdisaster prevention measures and the services we develop and provide
based on a cloud platform that complies with medical guidelines.

Example Initiative
Canon ITS Medical’s system engineering resources and­customer base, which are essential to system implementation,
were expanded by two-fold as a result of a business integration
with Canon Medical Systems’ hospital information systems
integration function. To ensure access to quality medical­services, even in the face of serious social issues resulting fromdrastic demographic and environmental changes, more andmore medical facilities are quickly adopting the use of digital
devices and electronic medical records. We will shift ourefforts into high gear with the development of DX strategies
that support these facilities.

We aim to build a robust platform that is resilient to market volatility byaddressing domestic needs with superior overseas technologies.
Aiming to realize our goal of ¥50.0 billion in net sales, we will form a business structure that is resilient
to changes in market conditions by building a robust platform that covers after-sales services. We will
strengthen our ability to propose IT solutions to customers, ensure the commercialization of new productlines, strengthen and expand the scale of the non-semiconductor business, and maximize and stabilize ourservices business, all in an effort to enhance the scale of our businesses with the aim of improving profits
and achieve sustainable growth in the process.

Yasuhisa Oba
Vice PresidentGroup Executive of Industrial
Equipment
Canon Marketing Japan Inc.

Our Strengths 
Our strengths lie in our ability to research and discover outstanding products
from overseas based on the latest technological trends worldwide and ourhighly specialized personnel who import a variety of unique products andprovide sales, installation, and maintenance support for these products.

51

Canon Marketing Japan Inc.

Integrated Report 2022

Net Sales, Operating Income, and Operating Margin

41.7
12.6

Business Activities 
We import semiconductor-related equipment, testing and measuring­equipment and components, and optical measuring equipment for­semiconductor manufacturers, mainly from overseas, which are localized
and customized as necessary before being sold in Japan. By providing­support from a sales, installation, and maintenance perspective for theindustrial equipment that helps resolve issues and meets the needs ofour customers, we have been contributing to improvements in Japan’s­manufacturing productivity.

Segment Targets 

44.9

46.0
13.0

Example Initiative
In anticipation of the revitalized power devices market, wehave been strengthening our product lineup by renewing our
product models and concluding agency agreements with new
overseas manufacturers while helping customers overcome theirvarious management issues. Moreover, we have been creating
data on the operational status of industrial equipment throughthe installation of a variety of sensors and cameras to accelerate
the digital transformation of our customer services, shorten
the time required for maintenance and troubleshooting, andimprove customer satisfaction.

7.6

5.2
2022 (Results)
Net sales (Billions of yen)

3.4

6.0

Production
printing

Healthcare

23.8%

23.0%
Fiscal 2022
percentage ofsegment
sales

2023 (Projection) 2025 (Projection)

Industrial
equipment

53.2%

Operating income (Billions of yen)

Operating margin (%)

Canon Marketing Japan Inc.

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52

The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Business Process Outsourcing
At the Canon MJ Group, our business process outsourcing (BPO) is about more than just providing BPO services.
We offer solutions that help customers visualize, enhance, and manage their business processes, such as­document-related services, and improve the operational processes that are insourced or assigned in-house.

Case Studies

BPO Project for a Financial Institution

Achieving Drastic Business Growth through Our
Unrivaled Business-Specific BPO Services
Canon MJ helps customers overcome such hurdles as the labor shortage and workstyle reform throughthe BPO services it provides. In recent years, the Company has engaged in large-scale projects, such as
screening work for financial institutions and government agencies. The know-how accumulated throughthis experience serves as a platform for establishing our business-specific BPO services, which will be
deployed to a vast range of customers. Going forward, we will strengthen and expand the scale ofour BPO service business, which harnesses the strengths of Canon’s unique technologies for document­digitalization, imaging solutions, and other areas.

Junji Asano
Senior General Manager
BPO Management Center
Administrative bodies

Private sector(including central government ministries and agencies and local governments)(including finance, manufacturing, and distribution)

Routine tasks

Temporary tasks

Routine tasks

Visualization of business processes

BPO
Entrusted operations

Entrusted operations

Entrusted operations

Business consulting function

Canon MJ’s administrative outsourcing services for financial institutions
are designed to handle the complex screening paperwork of banks
and other financial institutions. We implement and utilize systems
that are tailored to the specific needs of each business, ensuring thatadministrative duties are performed in the most accurate and efficientmanner. We also utilize online applications, OCR*, and other digital
tools to digitalize and reduce the use of labor in business operations
while implementing a continuous quality improvement cycle.
We will use The Norinchukin Bank as an example of our administrative
outsourcing services for financial institutions.
JA Bank receives approximately three million inquiries related tomatters such as savings and deposits each year from administrative
agencies, which were previously handled by individual JA Bank
branches in Japan. Because the request forms sent by postal mail­differed in format from one government agency to another, they had
to be confirmed, traced, and responded to one by one, leading to asignificant amount of time and money being spent on these inquiries,
which were a part of our noncore operations. The Norinchukin Bank,
the national-level institution of JA Bank, developed a system for digitalizing the process for handling deposit, savings, and other inquiries,
reviewed the workflow, and organized inquiries in digital data format,

establishing an operational system that consolidates the process
for handling written inquiries at the centralized processing center.
This Government Inquiry BPO/OCR Service is an all-in-one BPO­service that uses an OCR system to create data for written inquiries
from local governments and other administrative agencies at the­centralized processing center, which are then looked up in the­database that is linked to JA Bank’s core system and a response is­prepared and sent via postal mail. As a result of this service, JA
Bank is now able to promptly revise and systematize its workflow,­significantly reducing the time and cost that was previously required
to trace and respond to deposit, savings, and other inquiries. The
OCR system is expected to be used on approximately 80% of all
inquiries, as its high-precision and unique ad hoc OCR technology
enables the handling of request forms sent from administrative­agencies in different formats. Accordingly, the time needed to create
inquiry data has been reduced from that of the conventional methodof inputting data manually.
* Optical character recognition: Software that reads text images with a scanner orother device and converts them into character codes that can be read by a computer.
It enables the automation of the process of manually inputting text from paper.

Document digitalization, screening work, help desk, HR-related tasks, etc.

MJ

Develop according to customers’ business issues

The Matsurito Project: Japan’s Festival Exploration Project

IT solutions
Digital document services

Document management tools

AI Optical Character Recognition (OCR)

Workflow

Data center

BPO Management Center

Structure 
The BPO Management Center consists of more than 1,400 members
from Canon MJ and three BPO-related Group companies: Canon
BizAttenda Inc., Canon Business Support Inc., and QB5 Inc. At Canon
MJ, we are developing a business platform that enables us to provide
even better services, such as service planning, operational infrastructuredevelopment, and audits. Meanwhile, Canon BizAttenda is in charge ofperforming the business planning process of each project, managing
their operations, and making improvements while Canon BusinessSupport works to streamline internal business processes and enhance

operational quality. In August 2022, we also welcomed QB5 into theGroup to strengthen our line of BPO services by leveraging its BPO
capabilities in human resources and labor operations.
We have also teamed up with Canon Production Printing Systems
Inc., a provider of on-demand color printing and data printing services,
as well as highly specialized external partners to develop a structurethat is even more conducive to addressing the increasingly s­ ophisticatedneeds of our customers.

Aim 
In recent years, a number of social changes, such as the acceleration of
DX in businesses and the shrinking workforce, have spurred the trend
toward simplifying and using less labor in administrative duties. With
the aim of creating value through our efforts to reduce all types ofadministrative duties, we will work with customers to establish anenvironment that allows them to focus on their core businesses andoperations through the IT solutions and BPO services we provide.
In light of advances in electronic transactions, including amendments
to the Law on Book and Record Keeping through Electronic Methods,
the key to leveraging digital documents as a corporate asset lies in theplanning of the digitalization process and its subsequent implementation
in a timely manner. Through our DigitalWork Accelerator Series,
released in 2022, and our BPO services, we offer comprehensive

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support for our customers’ digital document management activities,
from the planning of operations to digitalization work.
Moreover, in 2022 we were entrusted with several government­policy-related projects, such as screening work on social security­benefits and the passing down of traditional events. We were able tolaunch these projects in short order, further strengthening our outsourcing system. With the expectation that an increasing number of
economic stimulus measures will be implemented going forward, we
will look to expand the scope of our BPO services for government policyrelated projects and thereby contribute to the betterment of society.
Going forward, we will strive to develop a system that meets the
expectations of our customers and expand our services even further.

The BPO Management Center has also been focusing on administrative
affairs. In 2022, we were involved in a number of projects ranging
from administrative procedures to project proposals and management,such as administrative duties related to COVID-19 and the healthcare
system, which has further solidified the foundation of our administrative outsourcing services.
Among these projects is the Agency for Cultural Affairs’ Matsurito
project, which was carried out by incorporating Canon’s uniquesolutions.
Festivals and traditional events in every region of Japan have beencanceled, downscaled, or faced other challenges due to the effects of
COVID-19. Even when these events were resumed, a number of issues
emerged, such as a decline in willingness of local communities to holdthese events, a lack of training for event organizers, and the increased
costs associated with infection prevention measures. In response to thissituation, the Agency for Cultural Affairs developed a project to help
pass down the traditions of local communities. The Matsurito project
was developed based on the concept of exploring Japanese festivals
with the aim of raising awareness and passing down traditional eventsand folk performing arts through the use of digital technology.
In this project, we provided not only administrative support but also
a variety of other services by leveraging Canon’s unique technology andknow-how in photography and imaging, as well as its network of creators active in a variety of fields.
Specifically, we developed a plan to address the specific issues ofeach traditional event, produced a video to convey the appeal of these
events to people of all ages through broadcasters and production companies that have excelled in creating programs on traditional events,
created an introduction page for the dedicated website Matsurito, andshared information on social media during the period leading up to the
day of the event. Moreover, we drew on our years of experience andselected photographers according to the specific content and aims ofphoto shoots in order to take photos that showcase the appeal of
traditional events to a wider audience.
Through this project, we contributed to around 150 traditional
events held in all 47 prefectures of Japan. In addition, as of March
2023, a total of 146 YouTube videos have been released and viewed
over 3.3 million times.
The festival preservation society and festival executive committee
members commented that many people were able to watch the events
because they can be viewed anytime on YouTube and that they hope
it will encourage the younger generation of local communities to­participate in these events. Going forward, we will continue to play a
prominent role in resolving social issues through our BPO business.

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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Marketing / Service & Support
At Canon MJ, our marketing functions consist of Canon product, IT product, and business innovation functions.
We also offer service and support capabilities that support these functions, rapidly enhancing the quality of­products and services and maximizing productivity across the value chain.

Yasukazu Sawada

Shinya Kondo

Ryuji Nakata

Hiroshi KashiharaGroup Executive of
Business Products Marketing Section

Group Executive of
IT Products Marketing Section

Group Executive of
Business Innovation Section

Group Executive ofService & Support Section

Structure 
Our customers’ business environment has undergone drastic changes
in recent years, including the increasing speed of technological developments, and they are striving to enhance their competitiveness inaccordance with these changes. We believe that in order to meet
our customers’ expectations, it is essential that we create highly­competitive products, solutions, and services in the most efficientmanner by adopting new technologies ahead of our customers,
calmly analyzing the rapid and complex changes in markets, andexploring and developing growth markets.

BusinessInnovation

In 2018, the Company reorganized its business units from a structure
based on product and sales channels to one based on markets and­customers. At the same time, in order to support our business units
more efficiently, we established an organization that integrated the
product planning functions and service and support functions throughout the Company. We have since reshaped the organization, and ourbusiness units are now underpinned by four sections: the Business
Product Marketing Section, the IT Product Marketing Section, theBusiness Innovation Section, and the Service & Support Section.

• Develop solutions that incorporate our existing assets• Create new businesses that resolve customer issues by leveraging our unique strengths• Digital document services, imaging and AI, comprehensive security solutions, etc.

Canon
product marketing

IT solutions productmarketingBusiness
product marketing

IT productmarketingService & Support• After-sales support for products and services

Canon Product Marketing

IT Product Marketing

Yasukazu Sawada

Shinya Kondo

Group Executive of
Business Products Marketing Section

Group Executive of
IT Products Marketing Section

The role of the Business Products Marketing Section is to resolve thedocument-related issues of our customers and help them focus on
their core operations by providing high-quality Canon products andsolutions that are easy to use as well as services that ensure theseproducts and solutions are utilized in a safe and secure manner.
To that end, we share the feedback we receive from customers
regarding their expectations, requests, and other matters with Canon
Inc. to develop and supply products and solutions of superior value,
which is another key role of the Business Products Marketing Section.
Moreover, to enhance profitability throughout the value chain, we
continue to promote measures to improve quality and minimize
costs in all of our business activities, from product manufacturing
to product delivery and after-sales support.
We will continue to provide value through our products and­services in response to the ever-changing needs of our customers sothat we continue to be the company of choice for many customers
and connect closely with them.

The need for cutting-edge information and communication technology(ICT) solutions continues to grow due to advances in cloud computing,qualitative changes in business through AI, and increasing concerns
for security in business environments. We provide such solutions withthe aim of supporting the digital transformation (DX) activities of ourcustomers. In the digital security business, we are conducting researchand development in the field of cybersecurity with Canon IT Solutions
Inc. to deliver solutions in accordance with the size of our customers’
businesses in the hope that the Canon MJ Group comes to be associated with security solutions.
By providing customers with Canon products in combination
with external IT products, we have developed a system that canhelp optimize a wide range of business environments.
We are also expanding the areas in which we contribute to­creating new value, such as the provision of card readers with facialrecognition used to verify the status of qualifications online, a new
field in the medical domain, and continue to strive toward realizing
profitable growth and improvements in the IT solutions business withan eye on achieving ¥300.0 billion in segment sales by fiscal 2025.

Business Innovation

Service & Support

Ryuji Nakata

Hiroshi KashiharaGroup Executive of
Business Innovation Section

Group Executive ofService & Support Section

In addition to strengthening our specific product businesses, theBusiness Innovation Section was established to develop solutions
incorporating our existing assets and to create new businesses that
resolve customer issues by leveraging our unique strengths.
We are focused on developing new solutions based on our digital
document services and imaging solutions.
In the area of security solutions, we are working to enhance ourvalue proposition by expanding our line of services that offer com­prehensive solutions to customers’ issues from both a cybersecurity
and physical security perspective through the combination of Canon
products and IT solutions.
In order to enhance the productivity of our customers’ operations,which are optimized according to the individual needs of each business,from the viewpoint of overall optimization, a new mechanism isrequired, such as an integrated DX platform tailored to the value
chain of our customers’ operations. With this in mind, in 2023 webegan conducting a process in which we develop leaders to promote
this field by incorporating graduate school learning and putting it
into practice.

To ensure our customers are able to use our products and services
safely and with peace of mind, the Service & Support Section is
responsible for the planning of after-sales support and quality­assurance. Each member of our department is working to improvetheir expertise in this business and carrying out basic strategies toenhance quality, productivity, and customer satisfaction.
At our Group companies and the companies of our business­partners, we are promoting greater use of the Internet of Things
to enhance their capacity to provide after-sales support for Canon
products. We use NETEYE,* a remote monitoring service, to monitor
the status of our customers’ equipment in real time while conducting
remote monitoring via a call center and providing periodic maintenancethrough the services of engineers, thereby reducing administrative
workload and ensuring a comfortable operating environment for ourcustomers.
As for our quality assurance system, we have strengthened ourframework for assessing combinations of Canon products and­externally sourced products in line with the expansion of IT solutions
as a part of our efforts to ensure that they continue to be used in asafe and secure manner.
* An online support service that monitors the conditions of equipment using the­internet to ensure comfortable operating environments

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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Group IT Strategy
Promotion of Digital Strategies

In the IT division, we play a key role in the transformation andgrowth of the Canon MJ Group by making full use of our knowledge
and experience in ICT and a wide range of businesses, projects, andoperations while working alongside the other business divisions.

To achieve our 2025 Vision, we are working with each business division on three themes to promote our digital strategies, along with developing a
digital business infrastructure that will facilitate the creation of new services and businesses. Through such efforts, we aim to achieve a 25% increasein per-employee productivity* by 2025 by providing each business division with a framework for monitoring and forecasting the status of businesses
and customers using data, efficiently attracting customers, and strengthening relationships with them.

Yukihiro Sasabe* Gross profit (value added) per employee compared with 2021 standards

Senior Vice President
In charge of Group IT, Business Process Innovation Project1

Staying true to our 2025 Vision of becoming a “professional corporategroup that solves social and customer issues using ICT and the powerof humans,” we at the Canon MJ Group are aiming to proceed even­further ahead with our digital transformation and the creation of new
businesses and services and to incorporate the skills and know-how
acquired through these efforts into reforming our customers’ businesses.

As an internal co-creation partner that promotes the digital trans­
formation of the Group’s business divisions and headquarters, the IT
division is implementing this strategies and strengthening its threeframeworks for facilitating this transformation, which serve as thefoundation of these strategies, based on three themes: problem-solving
through data-driven management, the enhanced productivity of existing
businesses, and the creation of new value.

Our Vision and Basic IT Strategies for Enhancing Corporate Value Problem Solving throughData-Driven Management

We are developing a data service infrastructurethat will serve as the starting point for management, businesses, and service offerings
by accumulating the data generated from theGroup’s diverse network of customer contact
points. Moreover, to encourage greater useof data on the front lines, we conduct workshops for specifically designated employees
and are working to develop data analysts
who are experts in the use of data in eachbusiness division and who understand theissues specific to their division.

Professional corporate group that solves social andcustomer issues using ICT and the power of humans

2025 Vision2

Enhance Productivity of
Existing Businesses

3

The development of a new data infrastructure
will not lead to greater productivity or businessgrowth unless it is used in actual business. To
ensure that they cater to the specific value
proposition process of each business, digital
measures are implemented in an agile manner
through a repeated cycle of hypothesis,­prototype, analysis, assessment, and release.
As an example of our efforts, we created adashboard for the sales division that analyzes
and visualizes around 30 types of data. It
enables highly objective decision-making
and streamlines sales activities by predicting
potential customers for each product andnotifying sales representatives.

Creation of
New Value

We aim to create new value for our customers
by incorporating our experience and knowhow in data utilization and digital marketing
accumulated in-house into our service-based
business model. Moreover, the knowledge
acquired through the services we provide will
be reincorporated into our services in the formof added value.
As an example of our efforts, the­direct-sales e-commerce site we establishedwith a partner manufacturer based on theGroup’s know-how as a distributor and its
expertise in utilizing and managing data on
its e-commerce site has helped expand oursales channels and boost sales, which grew
15% in 2022 from the previous year.

Promotion of digital strategies
Problem-solving through data-driven management and the creation of new businesses

Problem solving throughdata-driven management

Enhance productivity ofexisting businesses

Creation of new value

Restructuring Our Management Foundation: Reforming Our Business Processes and Mission-Critical System
Frameworks forfacilitatingtransformation

Restructuring ourmanagement foundation

Strengthening
IT security

Develop a system that adapts
flexibly to changes inbusiness and operations

Strengthen the security
environment and technologies
that facilitate transformation

Developing human resources
who foster transformation
Identify and develop IT personnel
who promote transformation

To ensure the Group’s transformation, we are implementing digital strategies in cooperation with each business division. As frameworks for facilitatingtransformation, which will serve as the platform for promoting our digital strategies, we are proceeding with three initiatives: restructuring our management foundation, strengthening IT security, and developing human resources who foster transformation.

 estructuring ourRmanagement foundation
We are transforming our business portfolio
into one in which the IT solutions business will drive the growth of our businessas well as restructuring our managementfoundation to facilitate this transformation.
We are also developing a new systeminfrastructure that enables the creation of
new services for each business in a rapid,
flexible, and cost-effective manner.

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Strengthening IT security
We have established a security promotion
system that is conducive to formulating
policies and strategies in response tochanges in our business environment andrisks, based on which we are working tostrengthen security through the incorporation of new technologies. Throughthese measures, we have established an
IT security environment that is tailored toincreasingly sophisticated cyberattacks,
digitalization, and changes in working
conditions.

 eveloping human resources whoDfoster transformation
Together with the Human Resources
Department, we are working to enhancethe digital literacy of all employees,­managers, and specifically designatedemployees according to their positions.
Following the digital literacy training heldin 2022, we held our digital marketing
training in 2023, gradually promoting
measures to develop human resources
who will strengthen our data-driven
management.

In order to create an environment conducive to implementing the strategies of each business unit and strengthening their competitiveness, we developed
the Business Process Innovation Project and are reforming our business processes and mission-critical system. We have defined the back-office andafter-sales support functions as the main areas of focus for our business process reform and are developing a composable mission-critical system thatcombines cloud services and packaged software.
Standardizing and Simplifying Our Business Processes

Reforming Our Mission-Critical System

We are radically standardizing and simplifying the identical businessprocesses present throughout the Group’s various business formats.
We are working to establish a system that continuously increases thevalue we provide to our customers and business partners by eliminating
variations in back-office operations and enhancing productivity as
well as streamlining the entire value chain.

By combining the most optimal cloud services and packaged softwarefor each business type and function, we are reforming our missioncritical system into one that is highly agile, flexible, and scalable.
We launched a new system for the financial accounting sector in
January 2022 and are currently renewing the system for the IT service
business domain. Going forward, we will renew other systems insequence to optimize them for each business type and function.

MarketingSales Promotion
and Proposal

Direct sales
Indirect sales
Mass retailers
Systems integration /IT solutions

Estimate andApproval

Order

Purchase andDeliveryBilling

After-Sales
SupportStandardize business processes andenhance productivity
Create and provide
new services foreach business model

Financialaccounting

Develop composable systems foreach business type and operation

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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Intellectual Property Strategy
The Canon MJ Group is formulating and implementing
intellectual property strategies that contribute to improvements incorporate value by strengthening the intellectual creation cycle,
in which intellectual and human assets are used to
expand and create businesses.
Hirokazu Uchio
Senior General Manager ofLegal and Intellectual Property Headquarters

The Canon MJ Group’s intellectual property activities are definedby their multifaceted nature. In order to establish and grow new­businesses, alongside existing ones, we must consider a variety of­factors, such as technological trends, markets, and legal aspects, inaddition to intellectual property rights. The Group will continue topursue new businesses by capitalizing on the intellectual and humanassets that it has accumulated to date.
A variety of customers count on the Canon MJ Group to provide
safe, secure, and high-quality products and services. In order to meetthese expectations, we are firmly protecting our technologies throughintellectual property rights and strengthening our intellectual property
governance. In addition, the Legal and Intellectual Property
Headquarters provides a one-stop service that integrates intellectual
property activities across the Group.
We are committed to supporting the present and carving the futureof the Canon MJ Group through our intellectual property strategies.

The Canon MJ Group’s Innovative Personnel Through patent application activities and intellectual property training,
the Canon MJ Group nurtures innovative personnel with the desire andskills to create inventions who are considered valuable human assets.
In the Canon MJ Group, there are around 20 employees who have filed
for more than 20 patents. These particularly innovative and highly experienced personnel play a leading role in the patent activities of theirrespective divisions and are contributing to developing the next
­generation of innovative personnel by serving as mentors.
Moreover, in the past, around 20% of patents filed by the Canon
MJ Group were invented by employees who did not belong to thedevelopment division, such as members of the sales and marketing
divisions. This attests to the fact that inventors from all areas of theCanon MJ Group, from the front lines of the sales divisions to thedevelopment divisions, are constantly engaging in technological­creation activities to meet the expectations of our customers.
Over the years, our innovative personnel have played a major role in
the growth of the Canon MJ Group. Going forward, we will continue tofollow this path by creating and providing new value to our customers.

Percentage of Patent Inventors from Development and Non-Development Divisions
(%)

2018
2019
2020
2021

Creating a Patent Portfolio to Protect Our Business 

2022

At the Canon MJ Group, new ideas emerge not only from our research and development and product development divisions but also from our sales divisions,where we engage directly with customers. We treat these ideas as inventions and create a patent portfolio to protect our businesses by obtaining patents on them.

020

Non-development divisions

Digitaldocument
services

9%
Patentportfolio

Others60%

Imaging solutions

9%

Printing
Computer-aided
designExtended reality,etc.

Low-codedevelopment
Mathematicaland demand
forecasting

2%

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80

100

Development division

Case Study

When developing new products or updating existing ones, we assume
that functions to be developed will be identified and patents will be
filed without omission prior to releasing the product.
Around 40% of the Canon MJ Group’s patent portfolio, which wasdeveloped through such efforts, consists of patents in security and fourareas of edge solutions: digital document services, imaging solutions,low-code development, and mathematical and demand forecasting.
This patent portfolio is expected to prevent competitors fromentering the businesses fields that will contribute to the further
growth of the Canon MJ Group going forward.

13%

60

Note: The graph shows the number of patent inventors from the development division and non-development divisions as a percentage of the total number of employees who invented
patents (100%).

Utilizing Our Patent Portfolio as aBarrier to Entry of Competitors

Security

40

7%

Patenting Activity for WebPerformer-NX
Because WebPerformer-NX is a new product concept,
we actively engaged in patent application activities andfiled for more than 10 patents before the product was
released in 2023.
Over the course of nearly 10 months, the development
and intellectual property divisions worked closely together toprepare the application. Upon receiving explanations fromthe development division on how WebPerformer-NX differedfrom conventional products and the areas in which it differsfrom our competitors’ products, as well as confirming whichaspects should be protected by patents, we identified 56
prospective functions for application. For each of these 56
items, we conducted a prior art search to verify whether thefunctions were patentable and after considering the productconcept and the significance of each function, we narrowed
down the list of patent applications to 15 functions. Througha series of meetings with each developer, the issues, composition, and effects were compiled and the claims that would
protect the product concept were examined, upon which ahighly dedicated patent specification was drafted.
In these ways, by obtaining patents to protect
WebPerformer-NX technology, we believe we were able toprovide customers with a high-value-added product thatoffers unrivaled and unique functions.

Example Invention

Patent Invention by the Marketing Division
We obtained patents for ideas brought forth by the marketing division to resolve issues it had identified from a customer perspective
concerning the management of images from the many network
cameras installed for security and disaster detection purposes.
This invention shows the location of network cameras on a­displayed map and shows images from network cameras that havebeen installed within the map area. When the displayed map area
is changed, the images displayed from the network cameras alsochange to those of the cameras placed within the adjusted map
area, enabling users to check each image through a simple
operation.

Position A

Position B

Position C
Patent number: 7125615

Intellectual Property Governance 
The Canon MJ Group has established a governance system that protects
the intellectual property of its products and services while respecting
the rights of other entities.
For example, we have established an environment that enables us
to take firm action against counterfeit batteries that may cause serious
accidents and provide safe Canon products to customers. Moreover,

we have realized complex and sophisticated intellectual property governance for the products and services we provide, such as research into
the patents and trademarks of other entities, the appropriate use of
copyrighted materials, and compliance with licensing terms when using
open source software.

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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Sustainability Management
We will accelerate our sustainability management
initiatives toward the development of a sustainable
society with all of our stakeholders.

Stakeholder
Perspective
International
community

Hatsumi Hirukawa
Vice-Chair of
Sustainability Promotion Committee

Country

Looking Back on Our Sustainability Efforts to Date
Two years have passed since the Sustainability Promotion Committee
was established in February 2021 as a forum for examining ourapproach to realizing the sustainable development of both society
and the Canon MJ Group. In 2022, the committee convened a totalof five times, an increase over its first year, to discuss and take various
actions to address a wide range of topics, including reports on the
progress and measures of our medium-term environmental targets,
improvements to our measures based on the TCFD recommendations,
updates with regard to information disclosure, participation in various
initiatives, and human rights measures.
Moreover, matters to be discussed and resolved by the
Sustainability Promotion Committee are important topics that relate
to the core aspects of management and are cross-organizational
themes that involve multiple other committees and divisions.
Therefore, we determined that a system in which the committee
operates under the direct supervision of the Board of Directors wasnecessary, and on April 1, 2023, we transitioned from a system inwhich the Sustainability Promotion Committee operates under theManagement Committee to a system in which the committee
operates under the Board of Directors. Accordingly, we have clarified
the matters to be resolved by the committee and defined those to be

2. Consider stakeholder needs in relation to
the Group’s material issues

1. Sort the needs of stakeholders

reported for discussion and approval by the Board of Directors.
In January 2023, we added four new members and enhanced thestructure of the Sustainability Promotion Committee, which has taken
the lead in promoting sustainability management initiatives
throughout the Canon MJ Group. Also, due to the fact thatsustainability management and the external disclosure of suchmatters are closely related to our communication strategies, theSustainability Promotion Committee has convened alongside theBrand Strategy Committee since the latter-half of fiscal 2022.

Board of Directors

Sustainability Promotion
Committee

Secretariat: Sustainability
Promotion Division

Committee chair: President
Committee vice-chair: Executive officer in charge of planning
Committee members: Directors, directors of business units, presidents of majorGroup companies, and heads of related divisions

InvestorThink tank

United Nations

SDGs

Japanesegovernment

SDGs Action Platform

Ministry of the
Economy, Tradeand Industry

Practical Guidelines
on Corporate
Governance Systems

FTSE Russell

ESG rating criteria

Mitsubishi ResearchInstitute, Inc.

Integrate,
Arrange,andClassify

receiving advice from outside experts, sorting the needs of our various
stakeholders, and taking the Canon MJ Group’s growth strategies andpolicies into consideration.

Material Issues

List of societal
expectations

Long-Term
Management
Objectives(2021–2025)

Expectations(one
criterion)

List ofsocietal needs

Management Plan

Medium-TermAmong others

Our Material Issue-Focused Approach
Due to their cross-sectional and multifaceted nature, our approach tomaterial issues is spearheaded by the Sustainability Promotion
Committee, which collaborates with the human resources,
procurement, legal affairs, and other relevant internal departments aswell as the Human Resources Strategy Committee, Risk and Crisis
Management Committee, and the Quality Improvement Committee,
which operate under the Management Committee. The Sustainability
Promotion Committee assembles and visualizes the measures that are
already being taken as well as the measures that need to be taken in
the future, determines their level of priority, and establishes KPIs todevelop a specific action plan.
In fiscal 2022, our key outcomes for material issues were as follows.
With respect to the environment, we achieved 100% use ofrenewable energy for the electricity used at five of the Group’sbusiness sites, including Group headquarters and Canon MJ’s officebuildings. Also, in an effort to help realize a resource-recycling society,we identified risks and took measures to maintain our recycling rate
for product waste at 99.9% or higher. In terms of respect for humanrights, we identified the negative impacts of our business activities onhuman rights as a part of our human rights due diligence process anddetermined the high-priority issues. In addition, we conductede-learning for all Group employees to promote awareness of humanrights. We also defined the scope of risk and crisis management andestablished KPIs that are linked to the Risk and Crisis Management
Committee and the Companywide risk map.
In fiscal 2023, we will proceed with measures in accordance withthe themes and KPIs we have established.

Resolve Social Issues throughBusiness Activities• Canon product business• Combination of the IT solutions
business and other businesses
Environment• Climate changeE
Environment• Pollution prevention• Resource recycling• Biodiversity conservation

Expectations

Provide solutions
that advancepeople’s daily lives,work, and society
Improve organizational
capabilities to enable
diverse human resources
to thrive

Coexist in harmony withthe global environment

The Canon MJ Group’s
Material Issues

Supply Chain• Environment• Human rights

E

S
Social

Risk and Crisis Management• Compliance• Business continuity planning(BCP)• Information security• Quality management

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SocialS
SocialPromote risk andcrisis management

Promote responsible
supply chains

Environment

Human Resources andOrganizational
Capabilities• Health and safety• Human rights• Increase motivation andproductivity• Diversity and inclusion• Increase engagement

Implement soundgovernance

Needs

Governance• Promotion of a sound governance structure

61

Needs
(five criteria)(2022–2025)

Resolving Societal
Issues throughInnovation

Material Issue Identification Process
At the Canon MJ Group, we define material issues as key issues thatneed to be addressed immediately in order to maintain sustainablegrowth. We have identified six high-priority issues (one to meet the
expectations of society and five to meet the needs of society) by

The Canon MJ Group’s
Growth Strategies
and Policies

Inventory List ofSocietal Issues

Information Source

3. Identify material issues

G
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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Coexist in Harmony with the
Global Environment

Functional Strategy

Relevant material issue

The Canon MJ Group is promoting activities in line with the Canon MJ Group Environmental
Vision 2050 and the Canon MJ Group 2030 Medium-Term Environmental Targets, the interim­targets of this vision, in an effort to contribute to the realization of a sustainable society thatcoexists in harmony with the global environment.

Coexist in harmony
with the global
environment

Furusato (Hometown) Project Activities in 2022
Guided by its Groupwide Biodiversity Policy, the Canon Group is carrying out its Furusato(Hometown) Project with the aim of preserving beautiful and verdant local communities for future
generations. In this project, we promote participation in the activities of collaborating organizations
and work to conserve and raise awareness of biodiversity based on the My Action Declaration,*1 a
set of five actions to protect biodiversity.

Canon MJ Group 2030 Medium-Term Environmental Targets

Realization of Carbon Neutrality 
Fiscal 2030
Target38%

Fiscal 2022 Result

reduction in in-house CO2 emissions (compared with fiscal 2021)

Contribution to Biodiversity Conservation and Pollution Prevention 
Redesigning Our Social Contribution Activities to Protect Biodiversity

4.6% decrease from fiscal 2021

*1 An initiative that enables each of us to feel a sense of connection with biodiversity in our daily lives and take action in
our immediate surroundings with the goal of protecting biodiversity.

Achieving 100% Use of Renewable Energy at
Five Group Business Sites

Contributing to Customers’ CO2 Reduction
through Our Business

Promoting Green Procurement to Eliminate Hazardous Chemical
Substances from the Supply Chain

We achieved 100% use of renewable energy at five of our businesssites, including the Group headquarters (Canon S Tower) and Canon
MJ’s office buildings (Konan, Makuhari, Aomori, and Kumamoto
offices), by acquiring the FIT Non-Fossil Certificate With Tracking* forapproximately nine months of electricity used over the period from
April 2022 to December 2022.

Nishi-Tokyo Data Center Building No. 2 Certified as an
Outstanding Specified Anti-Global Warming Facility

As a part of our pollution prevention efforts, we are taking measures to eliminate hazardous
chemical substances*2 and appropriately manage the chemical substances used in our businessactivities based on the Canon Green Procurement Standards.

* A certificate that separates and certifies the non-fossil value of electricity generated
from non-fossil power sources, such as solar, wind, and biomass, with tracking­information on the type of power source and the location of power plants.

In March 2023, Nishi-Tokyo Data Center Building No. 2, owned andoperated by Canon IT Solutions Inc., was recognized by the Tokyo
Metropolitan Government’s Bureau of Environment as an Outstanding
Specified A­ nti-Global Warming Facility (near-top-level business facility).
As a result, both the No. 1 building, which received the same designation in 2020, and the No. 2 building of the Nishi-Tokyo Data Center
have been recognized as business sites that have an outstanding
system in place for promoting measures against global warming. On
the strength of its high-performance facilities and excellent operational
quality, which have been refined through the 11 years of operation of
the No. 1 building, the Nishi-Tokyo Data Center has made significant
contributions to reductions in our customers’ CO2 emissions. By
squarely confronting society’s needs and expectations and providing
value through information and communication technology (ICT), we
will continue to play a key role in realizing a society that achieves a­harmonious balance between prosperity and the environment.

Contribution to the Realization of a Resource-Recycling Society 
Fiscal 2030
TargetAchieve zero emissions from product waste

Fiscal 2022 Result(recycling rate of 99.9% or more)

99.9% or higher

At the Canon MJ Group, we aim to maintain a recycling rate*1 of
99.9% or higher for end-of-use products collected from customers,such as printers and MFPs. We have maintained our recycling rate
at over 99.9% to date and will continue to do so by identifying thepotential risks and taking measures in response.
*1 Recycling rate (rate at which end-of-use products are converted into new resources)= Amount of products disposed of through methods other than landfill disposal ÷
Total amount of products disposed ofPromoting Measures to
Reduce Plastic Emissions
We have defined the scope and method for calculating plastic emissions and introduced new methods of measuring and managing
these emissions in 2022. Examples of our plastic emissions reduction
measures include selling packaging materials as plastic raw materials
and donating products that were returned by customers.

Monitoring and Enhancing the Efficiency of theGroup’s Water Use
In order to reduce water resource consumption by recycling water,
Canon MJ’s head office building, in cooperation with the Shinagawa
Grand Commons Community Development Council, participatesin the Reclaimed Water Utilization Project promoted by the Tokyo
Metropolitan Government’s Bureau of Sewerage and uses the recycledwater supplied by the bureau in toilets and other facilities. We havealso reduced water consumption at our head office building by­installing toilet faucets that make minimal use of water.

Analyzing and Disclosing Information on theGroup’s Water Risks
In an effort to monitor the Canon MJ Group’s water risk, a water risk
assessment was carried out at its business sites in Japan using the
Aqueduct Water Risk Atlas,*2 which confirmed that its overall waterrisk falls under the “low” or “low–medium” levels.

*2 Please refer to page 69 for details on measures to eliminate hazardous chemical substances.

The Group’s Environmental Initiatives from a
Business Partner Perspective
The first step in declaring a commitment to achieving net-zero emissions is to ensure that all businessactivities are considered when calculating greenhouse gas (GHG) emissions. Until now, GHG emissions
were calculated mainly based on the physically visible aspects of businesses, but in recent years, advertising costs, outsourcing costs, and other areas with which emissions were not directly associated in the past
are being taken into account in order to realize more comprehensive measurements. In 2022, we assisted
Canon MJ in identifying its Scope 3 emissions. I believe the approach we take in reducing the emissions
we have identified and communicating our intention for doing so to external parties will be of particularimportance going forward.
In November 2022, COP27 was held in Egypt, where a high-level expert group convened by the
UN secretary-general drew some attention when it recommended that actions be taken to ensure theaccountability and transparency of the net-zero emissions commitments declared by businesses and otherentities. While many companies around the world are now declaring their shift to a low-carbon economy
or their net-zero emissions commitments, whether these companies have legitimate climate transition
plans and truly intend on implementing them is being called into question. I believe Canon MJ has a­governance system in place that ensures that the progress of measures related to risks and opportunities
of climate change is confirmed under the supervision of the Board of Directors and is constantly working
to enhance the effectiveness of this system.
Today, society is faced with many issues, such as energy conservation at data centers and the problem ofmarine plastic pollution. I commend the fact that, in light of these circumstances, Canon MJ has been able
to conserve energy and recycle waste through the introduction of renewable energy at its business sites
and on the strength of its high-performance facilities and operational quality, as well as its determination
to take action as I stated earlier.
We look forward to Canon MJ’s efforts going forward and hope that we at WasteBox, Inc. will continue
to make a difference in the world’s transition to a low-carbon economy.

Shuichiro Suzuki
President
WasteBox, Inc.

*2 A
 global water risk assessment tool developed by the World Resources Institute

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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Initiatives for TCFD Recommendations
Strategy • Holds jurisdiction over climate change-related
matters• Serves as the secretariat of the Sustainability
Promotion Committee• Identifies and assesses climate change impacts• Monitors climate change impacts, confirms the progress of measures,and reports to the Sustainability Promotion Committee• Reports and makes recommendations on the identified climatechange impacts to risk management divisions throughout theCompany

Supervisory System of the Board of Directors

Sustainability Promotion Committee

The Canon MJ Group has a system in place under which the Board of
Directors supervises matters to be discussed and resolved by the
Sustainability Promotion Committee, as they are important matters that
relate to the core aspects of management and pertain to the entire
organization. The Board of Directors receives reports on the risks andopportunities associated with climate change from the Sustainability
Promotion Committee at least once a year and monitors and supervises
the progress of measures related to such risks and opportunities.

Matters concerning climate change are discussed by the Sustainability
Promotion Committee. The Sustainability Promotion Committee ischaired by the president & representative director, who assumes overall
responsibility for all sustainability-related matters, including climatechange. The committee assesses the impact of climate change on ourbusiness at least once a year and holds discussions concerning ourapproach to minimizing the identified risks and seizing opportunities.

Risk Management 
The Sustainability Promotion Division, which oversees matters related toclimate change, takes the lead in identifying the risks and opportunities
of climate change and assesses the circumstances of its impact on ourbusiness in cooperation with the relevant internal divisions and Group
companies. The Sustainability Promotion Division also examines appropriate responses, which are reported and proposed for deliberation to

the Sustainability Promotion Committee. The division also reports
and deliberates on certain climate change-related impacts and mattersto risk management divisions throughout the Company, thereby
assuming the role of integrating the impacts of climate change into
our Companywide risk management.

Impact on BusinessClassification

Scenario

Government policies /legal frameworks

Sustainability Promotion
Division

Sustainability
Promotion
Division• Convenes at least four times a year with the president &representative director as the committee’s chair• Confirms the progress of climate change initiatives• Reports important climate change-related matters to the Board of
Directors

Risk

Details / Specific Examples

Business
Sites

Systems
Printers
Data
Integration and
MFPs
Centers
Services

Moderate

Cost ofenergy-saving
equipment

The achievement of CO2 emissions reduction targets would
require the installation of energy-saving equipment, leading
to higher equipment costs.

Low

Cost ofrenewableenergyfacilities

The achievement of CO2 emissions reduction targets and theintroduction of new technologies to accommodate the shift toclean energy would entail the establishment and redevelopment of renewable energy facilities, leading to higher facility
costs.

Low

Changes inprinting
environment

Changes in the printing environment, such as the increased
cost of procuring paper due to forest conservation efforts,
reductions in paper use stemming from an increase incustomers’ environmental awareness, and advances indigitalization, are reducing the printing needs of customers incertain business fields.

High

Provide solutions that are tailored to the needsof customers’ changing printing environments(provide digital solutions in increasingly
digitalized fields and more-efficient printing
solutions in areas with high printing demand)

Reputational
damageThe Company’s inability to facilitate the shift to a low-carbon
society may deteriorate its reputation among customers,
investors, and society as a whole.

Low

Disclose our approach and the status of ourmeasures to address climate change

Damage toproduct
storagefacilities

Damage to product storage facilities as a result of flooding andother water-related disasters caused by the increasing intensityand frequency of heavy rainfall may impede the Company’sbusiness activities.

Low

Propose measures to be implemented atwarehousing companies

Inability tocommute towork

Employees’ inability to commute to work due to transportationor other issues caused by the increasing intensity and frequency
of weather-related disasters may impede the Company’sbusiness activities.

Low

Maintain and promote a system and frameworkthat allow businesses to continue to operate as
usual even when employees do not come to theoffice due to telework or other reasons

Increase inaveragetemperatures

The rise in average temperatures may lead to higher air
conditioning costs for data center server rooms and businesssites.

Low

Consider the establishment of energy-saving
facilities

Rise in sea
levelsThe number of areas susceptible to changing sea levels may
increase and certain facilities located in low-altitude coastal
areas may incur damage or even become submerged.

Low

Collect information on and analyze and address
the risk of damages

Financial
ImpactMeasures

1.5°C

4°C

Assess the impact ofeach scenario on
our business

Formulate responses to risks
and opportunities

Metrics and Targets 
Aiming to realize carbon neutrality, we are working to achieve our goalof reducing in-house CO2 emissions by 38% (compared with 2021) aspart of our climate change countermeasures in the Canon MJ 2030
Medium-Term Environmental Targets. In 2022, we achieved a 4.6%
reduction*1 in CO2 emissions compared with the previous year. In

addition, the Canon MJ Group has aggregated and disclosed its GHG
emissions.*2*1 Please refer to page 63 for our measures aimed at the realization of carbon neutrality.
*2 Please refer to page 91 for details on our GHG emissions.

Details / Specific Examples

Reduction ofenergy costs

Lower energy costs resulting from the increasing adoption ofrenewable energy will lead to a more stable supply of energy.

Low

Collect information on and consider the
adoption of renewable energy

Increases inorganizational
value throughimproved ability
to address
climate change

A systematic approach to climate change that includes climate
risk assessment and risk diversification measures will help
stabilize business operations and facilitate the development ofsolid management and business foundations, spurring
improvements in external assessments and stock prices.

Low

Disclose our approach and the status of ourmeasures to address climate change

Increased
opportunities
for systems
integration
servicebusinesses• Increasing need for demand forecasting and supply–demandplanning solutions that help reduce CO2 emissions by
optimizing and streamlining logistics operations• Declining use of paper in manufacturing processes andgrowing need for DX that contributes to greater productivity
along the engineering chain• Rising demand for digitalization and document management
services due to greater emphasis on energy and forest
conservation

High

Strengthen solutions businesses that help
customers reduce CO2 emissions and makeeffective use of paper resources

Increased
opportunities
for printer andMFPbusinesses

Increased demand for environment-friendly products certified
with environmental labels, such as printers and MFPs

1.5°C

4°C

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Systems
Data
Printers
Centers Integration and MFPs
Services

Opportunities

EnergyPrepare multiple scenarios andarrange assessments onrisks and opportunities

Integration into Companywide
risk management

Business
Sites•C ollect information on and analyze andaddress recent trends in environmental
regulations• P romote measures to achieve the Canon MJ
Group 2030 Medium-Term Environmental
Targets (including the consideration of
establishing renewable energy facilities andCO2 emissions reduction initiatives)• Collect information on and consider the
adoption of renewable energy based on the
global situation

Resilience

Identify important risks andopportunities and arrange
concrete examples

Cooperation between business divisions andGroup companies

Scenario

Products and services

Identify climate change scenarios and businesses impacted
by climate change

Classification

Opportunities

Sustainability Promotion Division

Countermeasures

The implementation of carbon taxes would lead to higher
electricity prices and operating costs, as it would entail the
payment of taxes for the amount of CO2 emitted by theCompany and raise the cost of generating electricity for the
power company.

Impact on Business

Risk Management Process

Financial
ImpactImpact ofcarbon tax
implementation on the
Company andsuppliers

Technology

Deliberate• Promotes environmental measures, including
climate change response

MarketSustainability
Promotion
Committee

were carried out by selecting risks and opportunities that were sharedthroughout the Group as well as the Group’s key businesses that havea significant impact on climate change. Climate change impacts are
determined to be risks or opportunities based on short- or medium- tolong-term (beyond 2030) time frames.

Reputation

Sustainability Promotion
Committee

Details• Approves important sustainability management-related matters(including climate change)• Confirms the progress of measures related to risks and opportunities
of climate change

Acute

Board ofDirectors

Oversee

Deliberate

Climate Change-Related Functions• Oversees sustainability management
initiatives (including climate change)

Chronic

Committee

Board of Directors

Transition risks

Climate Change Response Promotion Structure

At the Canon MJ Group, we conducted scenario analyses to identify
the various risks and opportunities posed by climate change to ourbusiness. Using the Intergovernmental Panel on Climate Change’s
Representative Concentration Pathway (RCP) scenarios of 1.5°C (RCP
1.9) and 4°C (RCP 8.5) as well as the International Energy Agency’s
Sustainable Development Scenario (IEA-SDS), the scenario analyses

Physical risks

Governance Increased
opportunities
for data
centerbusinesses

Strengthen sales of energy-efficient, user-friendly

Moderate products• Growing demand for zero-carbon data centers that
contribute to reductions in customers’ Scope 3 emissions• Greater demand for robust data centers that can withstandnatural disasters for the purpose of establishing a business
continuity plan (BCP) as a result of the increasing frequency
of weather-related disasters

High

Strengthen data center businesses that help
customers reduce CO2 emissions and ensurebusiness continuity

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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Initiatives to Support Sustainable Growth
Relevant material issues

Respect for Human Rights

Promote responsible
supply chains

Improve organizational
capabilities to enable
diverse human resources
to thrive

Basic Stance 

Improve organizational
capabilities to enable
diverse human resources
to thrive

Relevant material issue

Diversity
Approach to Diversity 

Based on the United Nations Guiding Principles on Business andHuman Rights, the Canon MJ Group is developing initiatives to promoterespect for the human rights of its employees, business partners, andall other stakeholders involved in the Group’s business activities. We
promote respect for human rights by taking measures in accordancewith the Canon Group Human Rights Policy, which was formulated
in 2021. The policy clearly states that we conduct human rights due

diligence, operate a grievance mechanism, conduct awareness training,and engage in dialogue with stakeholders in order to ensure respect forinternationally recognized human rights, including the prohibition ofchild and forced labor, the prevention of unreasonable restrictions on
movement and excessive overtime work, and respect for freedom of
association and the right to collective bargaining.

Human Rights Awareness Training 
We conducted an e-learning program for employees with the aim of
instilling basic knowledge on business and human rights and awarenessof the Canon Group Human Rights Policy. In 2022, a total of 15,193

Canon MJ Group executives and employees participated in the­program (98.1% participation rate).

Based on Kyosei, the Canon Group’s corporate philosophy, the Canon MJ Group aims to realize a society in which all people, regardless of culture, customs, language, or ethnicity, can live and work together in happiness. Through our corporate activities rooted in Kyosei, we will continue to embrace
diversity as we aim to become a company where diverse human resources with different personalities and values can flourish and continue to grow bymotivating each other.

Empowerment of Women 
Six Canon MJ Group companies have established an action plan based on their respective issues, which include the appointment andhiring of female managers. Canon MJ is working to increase the ratio of women in management positions to 6.0% or more and in
deputy management positions, who are candidates for management positions, to 20.0% or more by 2025.
In addition, both Canon MJ and Canon IT Solutions have acquired two-star Eruboshi (L Star) certification from the Minister of Health,Labour and Welfare.
The chart on the right shows the wage difference between
Wages of Canon MJ’s Female Employees as a
Canon MJ’s male and female employees.
Percentage of Male Employees

All employees

Human Rights Due Diligence 
In implementing human rights due diligence, we identified the negative
impacts of the Canon MJ Group’s business activities on human rights
and issues of high priority based on the United Nations Guiding
Principles on Business and Human Rights and guidelines issued by theJapanese government. We will continue with our existing measures toreduce human rights risks even further while strengthening them withrespect to newly identified issues.

Employees

150.8%

Balancing Work with Childcare and Nursing Care 

Customers / Consumers

Discrimination based on race, gender,
religion, and other factors

Employing People with Disabilities Harassment

Canon MJ strives to create a comfortable workplace environment
where all employees, regardless of disability, can make the most of theirabilities and experience and to provide more employment opportunities
for people with disabilities.

Child labor
High-priority
issues75.1%

Of whom, contract employees

Aiming to create an environment where employees can work vibrantly while balancing work with childcare and nursing care
­responsibilities, we have a variety of systems in place that facilitate their career development and allow them to continue to work
while focusing on their personal lives. Both Canon MJ and Canon IT Solutions have acquired Platinum Kurumin certification for their
excellence in providing childcare support.

Rights Holder
Suppliers / Contractors

79.0%

Of whom, permanent employees

Forced labor
Excessive overtime work
Occupational health and safety /Health hazards and accidents

Employees with Disabilities (Non-Consolidated)(Number of people)

250

(%)

2.25

2.20

2.15

150.5

148.5

142.0

2.10

200
150

150.0

2.29

147.5

139.0

2.0
1.5
1.0

50

0.5
2017

Number of employees

2018

2019

2020

2021

2022

0

Employment rate

Relevant material issue

Health and Productivity Management

Example of Human Rights Measures

2.5

100

0

Invasion of privacy

2.32

Improve organizational
capabilities to enable
diverse human resources
to thrive

Harassment Prevention
At the Canon MJ Group, we take various measures to prevent
sexual harassment, power harassment, and other problems
before they occur. In training sessions for new employees andnewly appointed managers, we clearly define workplace harassment
and incorporate case studies as well as train them on appropriate
ways to respond if an incident were to occur. Also, in our compliance meetings,* our divisions hold discussions on harassment

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from the perspective that it can take place at any time in oursurroundings.
* An annual meeting of Group employees held at all worksites (approx. 2,000
divisions) for the purpose of raising awareness of compliance in the workplace,promoting specific measures, strengthening communication, and discussing
and sharing information on the risks associated with our business and­operations and implementing preventive measures.

The Canon MJ Group promotes initiatives to support the health of
employees and realize health and productivity management based on
the principle of “Health First” set forth in the Canon Code of Conduct.
The health of each and every employee drives employee performanceand engagement and contributes to sustainable increases in corporate
value by maximizing the value of human capital.
Based on our Three-Year Health Management Plan and our annuallyformulated Canon MJ Group Safety and Health Activity Policy, we
engage in health management with a focus on cancer, lifestyle disease,and mental health, three priority issues that the Group has beenworking to address. In addition, by appointing a director in charge,

Canon MJ is working to standardize health support policies across theGroup to support the health of its employees.
As a result of these efforts, 11 Canon MJ Group companies, including Canon MJ, were recognized under the 2023 Certified Health &Productivity Management Outstanding
Organizations Recognition Program asa corporation that excels in practicing
health and productivity management.

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The Canon MJ Group’s Management Strategy

Overall Strategy

Business Strategy

Functional Strategy

Initiatives to Support Sustainable Growth

Relevant material issues

Procurement Activities
The Canon MJ Group is committed to developing solid relationships
with its suppliers and ensuring awareness of its fundamental approachto procurement activities. In view of this, we disclose our Basic
Procurement Policy on our corporate website to ensure that products
and services are consistently procured at appropriate prices while­complying with procurement-related laws and regulations and paying
due consideration to protecting the environment.

Coexist inharmony with theglobalenvironment

Promote responsible
supply chains

Moreover, to raise compliance awareness, we provide training toemployees in the Procurement Department on the Group’s action
guidelines and procurement-related laws and regulations. With new
suppliers, we assess the potential risks prior to engaging in business
transactions and conclude basic agreements at the start of each­transaction, committing to complying strictly with laws and ordinances
and to engaging in fair and honest transactions that do not violate­corporate ethics or erode social trust.

Engagement in Green Procurement
We endeavor to eliminate hazardous chemical substances by complying with the Canon Green Procurement Standards, and we make sure thatthe product chemical management systems established for suppliers are being implemented and that suppliers are continually complying withthese standards.

Measures to Ensure Responsible Minerals Procurement
The Canon MJ Group tackles the challenge of sourcing minerals responsibly in conflict-affected areas in accordance with the Canon Group Basic Policy
on Responsible Minerals Sourcing. We ensure peace of mind for Canon product customers by requesting suppliers to confirm the origins of minerals intheir products and help us eliminate the use of conflict minerals.

Relevant material issue

Risk and Crisis Management
We have established the Risk and Crisis Management Committee,
chaired by the director, senior vice president in charge of Group
General Administration & Human Resources Management, for the­purpose of building and implementing risk management systems andAreas of activity of the Risk andCrisis Management Committee(1) Preparation and set up of risk management systems(2) Preparation and set up of crisis management systems(including BCP)
(3) Raising and promoting awareness of corporate ethics
and compliance(4) Information security(5) Internal reporting response

Promote risk
and crisis
management

crisis management systems in order to improve the corporate value of
the Canon MJ Group and minimize loss for our stakeholders.

Raising and Promoting Awareness of Corporate Ethics and Compliance 
At the Canon MJ Group, we view compliance not only as the observance of laws and regulations but also as upholding laws and social
rules, maintaining social justice, and continuing to meet the expectations of society. To ensure that each individual always acts in good faithwith high ethical standards and a law-abiding spirit, we promote compliance activities from the perspective of raising awareness, instillingknowledge, and undertaking organizational measures.
We strive to ensure that all executives and employees are thoroughly
informed of the Canon Group Code of Conduct, which sets forth thestandards to be observed in the execution of their duties, and distributecopies of the Compliance Card containing the “Three-Selfs” spirit (selfmotivation, self-management, and self-awareness), which represents

the Canon Group’s universal guiding principles, while enhancing
awareness and instilling knowledge through education and training
programs. We also distribute compliance-related email newsletters toensure better understanding of and adherence to laws, regulations,and various rules related to our business operations.
Moreover, at our compliance meetings, we discuss and verify­compliance risks, the measures to be taken to address these risks,
and important compliance-related matters at each worksite. We also
continue to operate our internal reporting system.

Promoting Information Security 
PolicyThe Canon MJ Group is working to strengthen its information security
infrastructure in order to contribute to the realization of a safe, secure,and sustainable society by means of business activities that resolve theissues of customers and society through the power of people and ICT.
The Group takes measures against cyberattacks and other information
security risks and regards the appropriate handling of information
assets used in business activities as an important management priority.
We strive to continue to improve information security through the useof third-party certifications, such as the Information Security
Management System (ISMS) Conformity Assessment Scheme and thePrivacyMark System.
To strengthen information security governance, the Group promotes
an information security management system involving all employees
through direction, monitoring, and assessment by management.

Cybersecurity Countermeasures
In a bid to minimize cybersecurity risks and damages to the Group’s
infrastructure and the products and services it provides to customers,
we established the Canon Marketing Japan Group Computer Security
Incident Response Team (Canon MJ-CSIRT), which takes measures toprevent, monitor, and respond to cyberattacks.
Canon MJ-CSIRT is an organization consisting of various internal
departments related to IT, information security, and quality managementthat collaborates with the Canon Group’s CSIRT and other external
institutions and organizations, such as the Nippon CSIRT Association.
In addition, the Group conducts cybersecurity training at least once a
year as a measure against information security risks.

Quality Management 
Board of Directors
President

Management Committee

Risk and Crisis Management Committee
Chairperson: D irector in charge of Group General
Administration & Human Resources Management
Committee vice-chair: Vice President in charge of Group IT
Members: Vice Presidents and above, Group Executive of Corporate Planning
Headquarters, Group Executive of Brand Communication
Headquarters, and Group Executive of Legal and Intellectual Property
Headquarters
Risk and Crisis Management Committee meetings held four times a year

The Canon MJ Group is constantly working to enhance quality so that it
continues to provide safe, reliable, and high-quality products, services,and support to its customers and earn high levels of customer
satisfaction.
In proceeding with our business transformation with the IT solutions
business at the core of our business growth, we have declared ourcommitment to continuing to address customer needs by means of

our quality policy, which we work to ensure awareness of in all of ouremployees on a regular basis.
Moreover, we have established a quality management system thatcombines the requirements of ISO 9001, the international quality
management standard, with the Canon MJ Group's unique frameworkin an effort to improve customer satisfaction.

Key Initiatives and KPIs for Promoting Risk and Crisis Management
Key Initiatives

692023 Metrics (KPIs)

Ensure rigorous risk and crisis management

Hold Risk and Crisis Management Committee meetings at least four times a
year, in principle

Train employees on risk and crisis management

Provide training on compliance, the BCP, and information security, andquality to all employees at least once a year

Address information security risks

Conduct cybersecurity training at least once a year

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The Canon MJ Group’s Corporate GovernanceDirectors and Audit & Supervisory Board Members (as of April 1, 2023)

Shiro Hamada

83Standing Audit & Supervisory Board Member

Masatoshi Tanise

97Standing Audit & Supervisory Board Member

Toshiharu Hasebe

6

Director

8

7
9

6

3

1

Outside

5
4

10
11

Hiroko Kawamoto

Director
1

OutsideIndependent

Masachika Adachi

President & Representative Director

Independent

2

Hatsumi Hirukawa

Director & Vice President

2

Minoru Mizoguchi

Director & Senior Vice President
4

Tsuyoshi Osato

Director & Vice President

5

Yoshio Osawa

Director

OutsideIndependent

10

Iwao Hashimoto

Standing Audit & Supervisory Board Member
11

Independent

Nobutoshi MatsumotoStanding Audit & Supervisory Board Member
12

OutsideOutsideShigeo Hasegawa

Audit & Supervisory Board Member

OutsideIndependent

12

Please refer to our corporate website for details on the professional backgrounds ofour directors and Audit & Supervisory Board members.

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The Canon MJ Group’s Corporate GovernanceCorporate Governance
Basic Stance on Corporate Governance 

Principal Meeting Bodies 

We recognize that sustainable growth in corporate value requires
ongoing improvement in such areas as management transparency andthe monitoring of progress toward management targets. This isreflected in our wide-ranging initiatives to strengthen corporate
governance.

Overview of Corporate Governance
Organizational Format

Company with Audit &Supervisory Board

Use of Executive Officer System

Yes

Number of Executive Officers

20

Ratio of Outside Directors

Board of Directors

43%

Members: 7 in total
Term of office: 1 year

Meetings held in fiscal 2022

13 times

Corporate Governance Structure (As of April 1, 2023) 

The Company’s Board of Directors maintains a structure in which the representative director oversees
Companywide business strategies and execution while supervision of business domains and headquarters­functions is primarily carried out by executive directors. There are two or more independent outside directors toensure sound business management. In accordance with laws and ordinances, the Board of Directors monitors themaking and implementation of important decisions. Other decisions are handled by the representative director orunder their direction and supervision by executive officers whom the Board of Directors appoints through its resolutions to assume responsibility for making and implementing decisions for business domains and headquartersfunctions. As well as engaging in regular deliberations about financial results, executive appointments, and othermatters, the Board of Directors extensively discusses and makes decisions on important matters relating to legal
affairs and Board regulations at the Board of Directors’ meetings, which are held once a month, in principle, orat extraordinary meetings of the Board of Directors when necessary, and at Management Committee meetings
attended by the directors of Canon MJ and the presidents of major subsidiaries.

General Meeting of Shareholders
Appointment / Dismissal

Appointment / Dismissal

Appointment / Dismissal

Monitoring
Inquiry

Nomination andRemuneration Committee

5 Audit & Supervisory
Board Members

Report

7 Directors

Accounting
Audit

Cooperation

Management Committee

Internal Auditors Office

Cooperation

Independent Auditor(Deloitte Touche Tohmatsu
LLC)

Audit & Supervisory Board
Board of Directors

Audit & Supervisory
Board

Cooperation

Disclosure Committee
Sustainability Promotion
Committee

Internal Controls Evaluation Committee
Internal Audit

Business Segments / Group Companies

AdviceStaff Managers

Lawyers / Licensed Tax
Accountants

Risk and Crisis Management Committee

Ratio of Outside Audit &Supervisory Board Members

60%

Members: 5 in total
Term of office: 4 years

Meetings held in fiscal 2022

Nomination andRemuneration Committee

Ratio of Outside Directors

17 times

50%

Members: 4 in total

The Audit & Supervisory Board functions independently of the Board of Directors and comprises individuals who
are familiar with the Company’s business or corporate management and who have accounting or other expertise.
At least one outside Audit & Supervisory Board member is a person who satisfies the independence standards andqualifications separately prescribed by the Board of Directors. The Audit & Supervisory Board cooperates with theaccounting auditors and the internal audit division of the Company to audit the execution of duties by directors
and the status of assets of the Company to ensure sound business management. There are five Audit &Supervisory Board members, of whom three are outside auditors. Their duties include attending Board of
Directors’ meetings, communicating with directors and other parties, examining important documents, and­conducting rigorous audits by examining business operations and the status of financial assets in accordancewith the auditing policies and division of duties determined by the Audit & Supervisory Board.

The Company maintains a voluntary four-person Nomination and Remuneration Committee comprising the­president & representative director, one director, and two independent outside directors. This Committee­deliberates on the nomination of candidates for director, Audit & Supervisory Board member, and vice president
positions, as well as considering the appropriateness of the remuneration system for directors and executive officers who are vice presidents or above, and reports to the Board of Directors.

Internal

External

Holding of the Executive Officer Meeting attended by all directors, Audit & Supervisory Board members, and executive officers
The Executive Officer Meeting is held twice a year as a venue for intensive discussions on issues related to the transformation of the Canon MJ Group over the medium to long termor on urgent management topics and is attended by all directors, Audit & Supervisory Board members, and executive officers. The meetings are held at an off-site location over one
and a half days to provide an opportunity to foster communication between officers. Sometimes study meetings are held in which lecturers, with expertise matching the meetingtheme, are invited from outside the Company. In 2022, the meetings resulted in lively discussions on the growth of the IT solutions business, our human resources and investment
strategies, and other areas of operations.

Status and Skills Matrix of Directors 
Skills Matrix
Time in OfficeOutside /Independent

Attendance at Board of Directors’ Meetings
in Fiscal 2022

Masachika Adachi

President & Representative Director

8 years

Minoru Mizoguchi

Director & Senior Vice President

2 years

100% (13/13)

Hatsumi Hirukawa

Director & Vice President

3 years

100% (13/13)

Tsuyoshi Osato

Director & Vice President

1 year

100% (10/10)

Yoshio Osawa

Director

5 years

100% (13/13)

Toshiharu Hasebe

Director

1 year

100% (10/10)

Hiroko Kawamoto

Director——

Corporate
Management

Sales & Marketing

Finance & Accounting

Human Resources

Legal Affairs &Risk Management

IT Solutions & DX

100% (13/13)

Chairperson
Note: A
 ttendance at the Board of Directors’ meetings for Tsuyoshi Osato and Toshiharu Hasebe is for meetings held after they were elected as directors at the 54th Ordinary General
Meeting of Shareholders convened on March 29, 2022.

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The Canon MJ Group’s Corporate GovernanceCorporate GovernanceInternal Audit 
The Internal Auditors Office produces internal audit policies for Canon
MJ and its subsidiaries as an independent specialist that reports directly
to the president. It also conducts audits and assessments and advises
on all business activities from the perspectives of the credibility of­financial reports, the validity and efficiency of operations, legal

Appointment and Nomination Procedures compliance, and the conservation of assets. The auditors of Canon IT
Solutions Inc. and Canon System & Support Inc. conduct assessments
based on the same policies. The Canon MJ Group has 50 audit staff
members.

Outside Directors and Outside Audit & Supervisory Board Members 
Canon MJ has three outside directors and three outside Audit &Supervisory Board members. Pursuant to the consent of all Audit &Supervisory Board members and the approval of the Board of Directors,
we implemented our Independence Standards for Independent
Directors/Audit and Supervisory Board Members in order to clarify
the standards for ensuring the independence of outside directors andoutside Audit & Supervisory Board members in keeping with Japan’s
Corporate Governance Code and the independence criteria set by
securities exchanges in Japan. Our outside directors and outside Audit& Supervisory Board members satisfy the independence criteria andhelp maintain and improve the transparency and accountability of
the Board of Directors. The Company does not have dedicatedorganizations or employees to assist outside directors or outside Audit& Supervisory Board members in their duties. Executive directors andother officials provide outside directors with prior explanations of Boardof Directors’ meeting agendas as needed. Internal auditors, directors incharge of operations, and other officials provide outside Audit &Supervisory Board members with prior explanations of Board of
Directors’ meeting agendas as needed. Outside Audit & Supervisory
Board members attend Audit & Supervisory Board meetings, as wellas liaison meetings conducted as needed, to exchange information
on important matters and audit details among Audit & Supervisory
Board members.

through the questionnaire into the operation of the Board of Directors,
thereby achieving sustainable growth and increasing corporate value
over the medium to long term.
Based on the results of the evaluation in fiscal 2022, the Company
has considered the composition of the Board of Directors, and fromthe perspective of improving service quality and ensuring diversity, atthe 55th Ordinary General Meeting of Shareholders held on March 29,
2023, the Company appointed one female outside director with extensive experience in and exceptional insight into corporate management,
the service industry, and diversity.
.

Initiatives to Enhance Corporate Governance 2011

Adopts executive officer system

2018

Establishes Nomination and Remuneration Committee

2014

Appoints one outside director

2021

Complies with the revisions to Japan’s
Corporate Governance Code2016

Increases number of outside directors to two

2022

Increases number of outside directors to three

2023

Appoints one female outside director

Establishes standards for independent outside directors
Complies with the principles of Japan’s Corporate
Governance Code75

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the Board of Directors after the Nomination and Remuneration
Committee confirms that they are fair and appropriate.
The Audit & Supervisory Board discusses and consents to nominees
before deliberations by the Board of Directors.

Dismissal Procedures for Management Team Executives 
Directors and Audit & Supervisory Board members can ask theNomination and Remuneration Committee to deliberate on whether
the dismissal of a representative director, executive director, or executive
officer who is a vice president or above (collectively, “management
team executives”) is necessary if they have committed illegal, unfair, or
treasonous acts; if they have failed to fulfill their roles; or if they haveotherwise proven themselves unfit as management team executives. All
results of Nomination and Remuneration Committee deliberations shallbe submitted to the Board of Directors, regardless of the outcome ofBoard of Directors’ deliberations on the necessity of dismissal. The
management team executives subject to deliberations cannot join in
discussions.

Remuneration for Senior Executives and Directors 
Policies and Procedures for Determining Remuneration

Analysis and Evaluation of Effectiveness of the Board of Directors 
We conducted a questionnaire for directors and Audit & Supervisory
Board members on the effectiveness of the Board of Directors and­analyzed and evaluated the effectiveness of the Board of Directors. The
assessment criteria were (1) deliberations of the Board of Directors, (2)the composition of the Board of Directors, (3) succession planning, and(4) the sufficiency or process of discussions. These talks confirmed theoverall effectiveness of the Board of Directors. Going forward, we will
strive to ensure and improve the effectiveness of the Board of Directors
even further by continuing to enhance discussions on matters to beconsidered by the Board of Directors as well as its composition, management training, and other matters. In this way, we will improve thedecision-making function of the Board of Directors by incorporating theopinions of directors and Audit & Supervisory Board members obtained

To nominate director or Audit & Supervisory Board member candidates
and appoint vice presidents (including successors and candidates forpresident & representative director), the president & representative
director first nominates candidates from among those who fulfill theprescribed requirements. Nominations are submitted at a meeting of

The Nomination and Remuneration Committee verifies the appropriateness of the remuneration system for directors and executive­officers who are vice presidents or above, including the standards
for calculating basic remuneration and bonuses and the criteria for
granting stock compensation-type stock options. The amount of­individual remuneration is determined in line with the remuneration
structure, of which basic calculation approaches were resolved atmeetings of the Board of Directors and have been verified by the
Nomination and Remuneration Committee.
The total of basic remuneration and stock compensation-type stock
options for directors must be less than the maximum total

remuneration approved at general meetings of shareholders. Bonuses,
however, are determined when proposals for them are approved atordinary general meetings of shareholders.

Members of Nomination and Remuneration Committee
Masachika Adachi (Chairperson, President & Representative Director)
Minoru Mizoguchi (Director & Senior Vice President)
Yoshio Osawa (Outside Director)
Toshiharu Hasebe (Outside Director)

Composition of Remuneration
Remuneration for the representative director and directors consists ofbasic remuneration, which is a fixed basic monthly fee for executing
their roles and duties; a bonus linked to performance in the fiscal year;
and stock compensation-type stock options as incentives to promote
improvements in medium- to long-term business performance and corporate value. The same applies to remuneration for executive officers
who are vice presidents or above.
Outside directors only receive basic remuneration. With regard to the
proportion of basic remuneration, bonuses, and stock compensation-type

stock options, because we believe that it is important to engage withmanagement from a medium- to long-term perspective, our basic
approach is to emphasize the level and stability of basic remuneration.
At the same time, with the aim of enhancing performance over thecourse of a single fiscal year, bonuses and stock compensation-type
stock options for directors can account for up to 30% and 20% of
basic remuneration, respectively.

Protection of Minority Shareholders in Transactions with the Controlling Shareholder 
The Company’s controlling shareholder is Canon Inc. Important­transactions with Canon Inc. are deliberated on, considered, and­executed by the Board of Directors to ensure that the interests ofminority shareholders of the Company are not damaged, after independent outside directors provide objective opinions rooted in extensive

experience and superior knowledge of corporate management andother matters. The Company acts appropriately and fairly in all transactions, not only those with its controlling shareholder, to avoid compromising its independence and interests and to safeguard the interests ofall shareholders.

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The Canon MJ Group’s Corporate GovernanceCorporate Governance
Relationship with the Parent Company 
Our parent company is Canon Inc., whose policy is to list its subsidiaries
on stock exchanges to optimize its consolidated results, ensuring
earnings stability by maintaining the independence and dynamic­management structures of those companies. This approach enhancesGroup value in keeping with the interests of all shareholders, including
minority ones. Canon MJ sells and services Canon products. It also sells
and services the products of other entities and provides IT solutions in
response to customer needs. To develop our own businesses, wemust make swift decisions, procure funds flexibly, and attract talented
people. We are able to do this because we are listed and operate­independently. We thus believe that expanding earnings through ourbusinesses helps increase the Canon Group’s corporate value while

Strategic Shareholdings benefiting shareholders overall. The parent company’s involvement inrunning our organization is limited to exercising voting rights as ashareholder. and no directors of the parent company hold concurrent
positions with us. Half of the members of our voluntary Nomination
and Remuneration Committee are independent outside directors,
ensuring transparency and fairness. When engaging with Canon Inc.,
such as determining purchase prices and setting interest rates for loans,
we ensure that transactions do not disadvantage either party and they
are conducted through the exchange of written agreements.

Basic Approach to and Preparations for the Exclusion of Antisocial Forces Basic Policy
The Company and Group companies maintain a resolute approach to antisocial forces that threaten the order and safety of civic society, and the basic
policy is to eliminate all relationships with antisocial forces.

The Canon MJ Group only holds shares of other listed companies
when these shareholdings help to improve the corporate value andthe medium- to long-term development of the Group, taking into
­consideration factors such as management strategies, business alliances,the maintenance and strengthening of transactions, the developmentof collaborative businesses, and the creation of new forms of synergy.
The Company reviews the reasonableness of individual reciprocal
cross-shareholdings at meetings of the Board of Directors in a comprehensive assessment that considers the significance of shareholdings
and other results of a qualitative evaluation as well as a quantitativeevaluation of the value of transactions with investment targets anddividends and whether unrealized gains are commensurate with capitalcosts, on a regular basis each year.
As a result of the assessments, when it is judged that holding certain
shares is no longer reasonable, the holding will be reduced through thesale of said shares. As of December 31, 2022, the Company held 49
listed stocks as cross-shareholdings, a decline from the 59 listed stocks
held as strategic shareholdings as of December 31, 2021. In addition,
the shares of the company to which the Company’s outside director isaffiliated have been sold as of December 31, 2022.

Policy for Constructive Dialogue with Shareholders 
To contribute to the sustainable growth and medium- to long-term
enhancement of corporate value, the Company holds constructive­dialogue with shareholders through various means, such as general

meetings of shareholders, briefings on long-term management objectives and medium-term management plans, financial results briefings,
and interviews with major institutional investors.

Status of IR Activities 

Status of Preparations• In addition to setting out action guidelines to eliminate relationships with antisocial forces, the workplace regulations of the Company contain provisions
to the same effect, and we work to ensure that employees fully comply with these guidelines and provisions.
• The general affairs division of the head office of the Company has been designated as the Group’s control division in charge of responding to antisocial
forces. It shares information on antisocial forces with the general administration departments of the respective branches and works to prevent­transactions, etc., with antisocial forces before they occur.
• A collaborative structure has been built with the police, attorneys-at-law, and other external organizations.

The Company aims to build long-term relationships of trust with­everyone participating in capital markets and acquire suitable appraisals
by making timely, appropriate, and fair disclosure of not only financial
information but also non-financial information and by enhancing
opportunities for dialogue. In addition, we strive to report insights
and assessments brought to light through dialogue to the Board of

Directors, the Management Committee, and other decision-making
entities and reflect them in the Company’s management in order toachieve improvements in corporate value over the medium to longterm. We have established the Canon MJ IR Policy to clarify our stanceto investor relations (IR) disclosure, which is disclosed on the IR website.

• Payments of contributions, etc., are examined in advance in order to confirm that there are no problems of legality or corporate ethics.

Results of Activities in Fiscal 2022

Internal Controls 
Based on the Companies Act, the Company has determined the basic
policy for its internal control system to ensure appropriate businesspractices and is deploying that system in line with the policy. The
Internal Controls Evaluation Committee has been established for the
purpose of developing an internal control system for the entire Canon
MJ Group, consisting of officials representing corporate departments
and subsidiaries.

Canon Inc. has adopted systems that comply with the SarbanesOxley Act, a U.S. law designed to improve corporate governance. As amember of the global Canon Group, Canon MJ has also applied global
perspectives by establishing systems based on the same standards.

Individual Investors• Holding of Company briefings (online) by the president &­representative director, the managing executive officer­overseeing IR, and other executives (three times a year)• Renewal of website for individual investors• Distribution of email newsletters by the personnel incharge of IR

Securities Analysts and Institutional Investors(Japan and Overseas)• Holding of medium-term management plan briefings (online)by the president & representative director• Holding of financial results briefings (online) by the managing
executive officer overseeing IR• Holding of individualized IR information sessions* by the­president & representative director (seven times a year), themanaging executive officer overseeing IR (11 times a year),and personnel in charge of IR (75 times a year)• Holding of small meetings specific to each business segment(twice a year)• Feedback based on investor reviews for business officers* Information sessions for fund managers and analysts, who belong to theactive, passive, growth, and value funds in Japan and overseas

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The Canon MJ Group’s Corporate GovernanceRoundtable Discussion between Outside Directors
closely to their needs and drawing on sales and coordination skills.

with excuses for why they cannot do something before they are

The Group’s growth to date has been underpinned by its frontline

given the opportunity, and because of this we must create oppor-

employees who are intimately familiar with the diverse needs andtunities and an environment for them to learn. This does not mean

issues of its customers. For that reason, unless the mindsets ofthat people will take action simply by giving them opportunities,

those on the front lines shift to a service-oriented approach, thebut I believe it is an important stepping stone to that end. SimilarGroup will not be able to raise its top line and accelerate the speed

to the way the pledge to “leave no one behind,”the underlying

of growth.

principle of the Sustainable Development Goals (SDGs), is realized

During my years at the NTT Group, we launched the IT solutionsin practice —through dialogue and care— a talent managementbusiness. In doing so, we also faced the monumental task of figuringsystem that emphasizes dialogue with individuals, rather than without how to change the mindsets of our countless employees ingroups, has become extremely important and, in fact, an acceptedJapan. This is why I believe the Company’s approach to changing

mode of practice. Employees’ skills must be developed in a way

employees’ frame of mind is a major issue to be addressed by 2025.

that recognizes the individual’s understanding and progress.

Canon MJ is a very family-oriented company that values people.

Hiroko Kawamoto

Yoshio Osawa

Toshiharu Hasebe

Outside Director

Outside Director

Outside Director

Rather than losing hope in those who do not change their way

Osawa: I fully agree. I have also heard that making the proposalof thinking, I hope the Company can engage with each of itsof IT solutions is something that employees, particularly those inapproximately 16,000 employees and thoroughly educate them.

senior positions, who have traditionally excelled at selling devices
are finding it difficult to get used to. Figuring out how to create

Kawamoto: Upon assuming the position of outside director, I

and invest in tools that support such employees is also an issue

received various explanations from the person in charge. Althoughthat needs to be addressed.

I have yet to visit the front lines or monitor the situation, I believe

Unlocking the Full Potential of the Canon MJ Group
Outside Directors Yoshio Osawa and Toshiharu Hasebe, together with newly appointed Outside Director
Hiroko Kawamoto, sat down to discuss the challenges facing the Canon MJ Group in its efforts to push forward
even further with its growth strategy.

Progress over the Past Year and Challenges That Lie Ahead 

To enhance employee motivation toward the IT solutions

that promoting diversity and inclusion (D&I) will lead to more timely­business, upper management has been firmly engaged in sharing

decision-making and the achievement of discontinuous growth.

best practices and recognizing employees through the presentation

To change employees’ way of thinking, the Company mustof awards. As senior-level employees have also been recognized­provide fair and equal opportunities, without bias toward age,for these awards to date, I believe the perspectives of the entire

gender, or workstyle, and create an environment where everyone

company will change by continuing to pursue these measures

can take on a variety of challenges. Many people tend to come up

with conviction.

Spurring Innovation through the Creation of an Environment That Encourages People to Speak Out 

Osawa: Despite its challenging business environment, Canon MJ

one, thereby enhancing the proposal skills of the IT solutions

Osawa: Director Kawamoto is drawing interest for being the firstshare your views based on your experience, and I expect thehas been steadily improving business results and increasing its­business—and the results are becoming clearly apparent in thefemale director at Canon MJ, but I am truly pleased to work alongside­discussions at the Board of Directors’ meetings to be held from

corporate value. Under these circumstances, I would have to say

financial statements. However, in the Area segment where thea manager of her caliber, regardless of gender. As you spoke ofperspectives unlike those of the past.

that its challenge is to transition from a business model centeredbusiness centers on small and medium-sized enterprises (SMEs)

earlier in regard to D&I, there will be many opportunities for you toon product sales to one centered on services, providing not only

across Japan, this change in employees’ way of thinking is still astandalone hardware products but also comprehensive IT solutions

work in progress, despite the extraordinary efforts on the front

that encompass system development, networks, cloud computing,lines. There is tremendous potential for this segment to play amaintenance, and operations. It is imperative that the Company

prominent role in the digital transformation (DX) activities of cus-

continues to speed up the pace of this transition. Changing thetomers by drawing on its strong customer ties that span the coun-mindset of each employee and enhancing their skills are essential

try and changing employees’ way of thinking to service-basedto achieving this goal.

sales. While the Company is working to enhance the skills of its

In 2023, the Company transitioned to a system that expedites

employees as it further promotes the change in focus to service-

the decision-making processes for transitioning to a service-based

based sales, the speed of the development of these skills remains

business model and carrying out growth investments by giving more

an issue.

The decision-making process has picked up
speed over the past year. The Company willneed to move quickly in transforming itself
into a service-oriented business model andchanging the mindsets of its employees.

decision-making authority to the directors in charge, depending on
the amount of investments. The decisions made by the directors in

Hasebe: I have felt the same way over the past year. While thecharge are, of course, ultimately reported to the Board of Directors,president and other members of management are exceptionallywhich performs a supervisory role.

quick and decisive in their decision-making, I also feel that there is

Meanwhile, changing the mindsets of employees and enhancing
their skills are pivotal to the Group’s transition to a service-based

79

still room for improvement when it comes to changing employees’
frame of mind.

business model. In 2018, the organizational structure also began

I think Canon MJ’s greatest strength is the fact that it has earned

to shift from a product-oriented structure to a customer-oriented

the trust of various customers throughout the country by adhering

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The Canon MJ Group’s Corporate GovernanceRoundtable Discussion between Outside Directors

In recent years, the Company has transitioned to amore robust corporate structure that generates
more profit. To continue to achieve top-line growth
toward 2030, it must leverage its existing products
within their shrinking markets and successfully
carry out large-scale M&As.

Kawamoto: Prior to learning more about the Company’s business,

Osawa: Canon MJ is an exceptionally cash-rich company andmy impression was that the Canon product business accounted

already has nearly ¥300.0 billion in funds. Its shareholders andfor a high percentage of Canon MJ’s net sales. However, when I

investors will most certainly expect an increase in dividends and alearned that the highly promising IT solutions business accounts forbuyback of the Company’s shares.

roughly 41% of its net sales, I came to realize that Canon MJ is ahighly independent company.
The Company has been developing a range of new businesses

In this context, the Company will need to strike a sound balance
between business investments and shareholder returns by investing
in its business to enhance corporate value and maintaining stablein recent years without relying on the strength of Canon’s brand.

dividends based on a payout ratio of 30% or more, its basic

Having said that, because Canon MJ is a part of the Canon brand,­dividend policy. I believe it is essential that the Company continues

one that is rich in history, it is important that it makes the most of

to grow as a listed company independent from its parent company,

both approaches.

Canon, while also creating synergies.

2023 Marks the Start of the Journey toward Achieving Unmet Goals 
Hasebe: At Canon MJ, there are still not enough women inPrior to joining Canon MJ, I was a flight attendant at All Nippon­management positions. I hope that Director Kawamoto will serve

Airways, where I gained experience in frontline operations. Whenas a role model for the other female employees and inspire them

I joined the company, I was only involved in domestic flights, but

to pursue management roles.

I later became involved in international flights as well. As thenumber of large aircraft increased, so did the number of jobs.

Kawamoto: For example, while mixing the colors red and blue

Accordingly, the number of people I managed grew, allowing me toto create a new color is considered innovation, sharpening blue

gain experience in both in-flight operations and ground operations

and distinguishing it from the rest of the palette through discus-

management. As a manager, I was mainly responsible for improving

sion as a group is also a form of innovation. In order to engage

service quality and developing the employees and organization toin such discussions, we must ensure that there is a certain level

ensure high levels of customer service. Upon assuming the role ofof psychological safety that allows people to discuss matters

executive officer, I began to see the bigger picture of management.

­without being afraid to do so. Creating such an environment

As an outside director of Canon MJ, I hope to draw on my years

where diverse discussions can take place is, I believe, my roleof experience and my unique sensibilities to look at things from aand what is expected of me.

neutral perspective and communicate in my own way.

Relationship with the Canon Group and the Appropriateness of a Parent–Subsidiary Listing 
Osawa: Because the Company is a listed subsidiary of Canon Inc.,

listed company and therefore has discretionary authority, it canit has an obligation to clearly explain the appropriateness of adevelop its own business independently into one where IT solutions

parent–subsidiary listing to each shareholder and investor.

other than Canon products account for around half of the Company’s

There have been concerns raised recently over the fact that the

net sales by leveraging synergies with Canon products.

Osawa: The year 2023 marks the midpoint of the Long-Termcontinue to achieve top-line growth toward 2030, it must leverage

Management Objectives that began in 2021. At this point in time,

its existing products within their shrinking markets, speed up the

we must conduct a thorough review of how much progress has

transformation into a service-based business, and successfully carry

been made with the Company’s strategies. The information we need,out large-scale M&As. I hope 2023 turns out to be a year in whichsuch as key performance indicators (KPIs) and key goal indicators,

the Company makes a fresh start in these endeavors.

is all there and has been provided to us, so it is abundantly clear
what the Company has achieved and what it has not. I believe

Kawamoto: The Canon Group has the amazing corporate

2023 marks the start of Canon MJ’s journey toward achieving its­philosophy of Kyosei, which, simply stated, seeks to realize aunmet goals. We must also look ahead to the next medium-term­society in which all of humanity can live and work happily together.

management plan that will cover the period up to 2030 andI hope the Canon MJ Group can also embrace this corporate­succeed the current medium-term management plan, which will

­philosophy and founding spirit. In order to revitalize the Japanesewrap up in 2025, by taking into account the declining number of

economy, I think it would be a good idea to not only view theemployees involved in productivity improvements and humanCompany’s competitors as rivals but also as partners and to start

resource development as well as management efficiency.

discussing how to work together as an industry rather than as­individual companies.

Hasebe: Because KPIs are established from a variety of angles,
such as on a department or product basis, it is fairly clear to us

Hasebe: I believe that upper management and the managers ofwhich are the areas of focus and which are the areas in need ofeach business segment are already looking in the same direction. I

improvement. For that reason, it is easy to hold discussions based

am looking forward to seeing the change in mindsets that will enable

on these matters.

the Company’s approximately 16,000 employees to follow the same

In recent years, the Company has transitioned to a more robustroute and the transition to a service-oriented business model.

corporate structure that generates more profit. However, toCompany’s ¥180.0 billion short-term loan to its parent company
may halt growth investments. This loan, however, gives an advan-

Hasebe: While I commend the fact that the merits of a parent–

tage to Canon MJ because the interest rate is higher than that ofsubsidiary listing are being demonstrated in this case, I believebanks and the funds can be reclaimed at any time if needed.

there is room for further improvement. Because the service-based

As an independent outside director, I am particularly careful when81

business is largely being pursued by Canon MJ on its own while

monitoring the protection of interests of minority shareholders.

Canon has proprietary technologies in the visual and document

Regardless, there have not been any cases of moral hazard infields at its disposal, I believe there will be more opportunities towhich the parent company undermines the interests of the generalcollaborate, such as by incorporating these technologies intoshareholders of its subsidiary for the sake of its own interest. If the

new DX solutions. From the standpoint of medium- to long-term

Company were a wholly owned subsidiary, it would likely be able to

growth, I would like to see the Company take greater advantage

only sell Canon products. However, because Canon MJ is a publicly

of its relationship with the parent company.

Canon Marketing Japan Inc.

Integrated Report 2022

I would like to see the Company provide fair and equal
opportunities, without bias toward age, gender, or
workstyle, and create an environment where everyone cantake on a variety of challenges. It must also ensure that
there is a certain level of psychological safety that allows
people to discuss matters without being afraid to do so.

Canon Marketing Japan Inc.

Integrated Report 2022

82

Data

10-Year Consolidated Financial Summary(Millions of yen) (Thousands of U.S. dollars*3)
2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2022

¥ 657,215¥ 659,432¥ 646,002¥ 629,313¥ 632,189¥ 621,591¥ 621,134¥ 545,060¥ 552,085¥ 588,132$ 4,422,045

Operating income

17,01225,087

26,647

27,67630,40628,941

32,43931,317

39,69949,947375,541

Net income before income taxes

17,05425,85827,49728,90330,91830,70833,302

33,46343,094

51,523387,391

Net income attributable to owners of the parent

10,167

16,03015,67018,161

20,67920,82622,25021,99729,42035,552

267,308

Equity257,075

270,352

277,438

280,919

297,522

303,570

325,092

346,114374,676

400,372

3,010,316

Total assets

467,076

479,747

486,502497,727

510,832

498,790503,698

506,604

526,418

543,740

4,088,271

Cash flows from operating activities

28,78038,19029,73033,30628,885

16,99022,05238,49032,75637,725

283,647

Cash flows from investing activities(25,757)(15,221)(44,536)(19,460)

7,963(10,526)(94,584)(26,174)(15,894)(10,107)(75,992)

Cash flows from financing activities(9,105)(4,544)(6,224)(6,086)(7,145)(7,838)(8,557)(6,587)(9,160)(11,260)(84,662)

102,182

120,607

99,573

107,285

136,979

135,571

54,49360,131

68,02884,632

636,331

For the year:
Net sales

At year-end:

Cash flows:

Cash and cash equivalents at end of year

Per share of common stock:(U.S. dollars*3)(Yen)

Equity¥ 1,980.22¥ 2,082.60¥ 2,136.22¥ 2,162.96¥ 2,290.70¥ 2,336.97¥ 2,502.39¥ 2,664.20¥ 2,883.74¥ 3,081.07

76.67

123.62120.84140.06

159.48160.61

171.60169.65226.88274.16

2.06

24.00

40.00

45.00

50.00

60.00

60.00

60.00

60.00

75.00

90.00

0.68

Net income*1
Cash dividends*

2

$

23.17

The amounts shown have been rounded down to the nearest million yen.
Notes: * 1 Net income per share is based on the weighted-average number of shares of common stock outstanding during the respective fiscal years.
*2 Cash dividends per share are the amounts applicable to the respective fiscal years, including dividends to be paid after the end of the respective fiscal years.
*3 The figures have been presented in U.S. dollars by translating all Japanese yen amounts at ¥133 to US$1, the prevailing exchange rate as of December 31, 2022.

Operating Income andOperating Margin

Net Sales
657

659

Working Capital

Total Shareholders’ Equity and ROE
399

49
646

629

632

621

621
545

552

588

324

39

25
17

3.8

26

4.1

27

4.4

30

4.8

32
28

4.7

339

347

397
387

377

380
3.5

31

8.5

3.0

7.2
5.2

362

5.7

2.0

2.1

2.2

2.3

3.7

3.9
256

3.1

270

277

280

297

303

324

345

467

2.5

164.9 164.7 159.6 156.9 157.3

2.6

396

373

419

6.1
129.9 120.0
108.4 107.1 108.0

5.7

6.5

7.2

6.9

7.1

8.2

479

486

497

510

55.0

56.3

498

503

506

526

543

35
29

9.2

6.6

Net Income Attributable to
Owners of the Parent andNet Income Margin

Total Assets andTotal Shareholders’ Equity Ratio

56.9

56.4

58.1

60.8

64.4

68.2

71.0

73.5
16
10

4.0

22

20

20

3.3

3.4

3.6

ʼ17

ʼ18

ʼ19

5.3

15

2.4

2.4

ʼ14

ʼ15

2.9

6.0

21

18
4.0

1.5

ʼ13

ʼ14

ʼ15

ʼ16

ʼ17

ʼ18

ʼ19

ʼ20

ʼ21

Net Sales (Billions of yen)

ʼ22

ʼ13

ʼ14

ʼ15

ʼ16

ʼ17

ʼ18

.00

ʼ19

ʼ20

ʼ21

ʼ22

ʼ13

ʼ14

ʼ15

ʼ16

ʼ17

ʼ18

ʼ19

ʼ20

ʼ21

ʼ22

ʼ13

ʼ14

ʼ15

ʼ16

ʼ17

ʼ18

ʼ19

ʼ20

ʼ21

ʼ22

ʼ13

ʼ14

ʼ15

ʼ16

ʼ17

ʼ18

ʼ19

ʼ20

ʼ21

ʼ22

ʼ13

ʼ16

ʼ20

ʼ21

ʼ22

Operating Income (Billions of yen)

Total Current Assets (Billions of yen)

Total Shareholders’ Equity (Billions of yen)

Total Assets (Billions of yen)

Net Income Attributable To Owners Of The Parent (Billions of yen)

Operating Margin (%)

Total Current Liabilities (Billions of yen)

ROE (%)

Total Shareholders’ Equity Ratio (%)

Net Income Margin (%)

Current Ratio (Times)
Note: The yen amounts indicated on the graphs above have been rounded down to the nearest billion yen.

83

Canon Marketing Japan Inc.

Integrated Report 2022

Canon Marketing Japan Inc.

Integrated Report 2022

84

Data

Consolidated Balance Sheet
Canon Marketing Japan Inc. and Consolidated Subsidiaries
December 31, 2022
(Millions of yen)2022(Millions of yen)

2021

ASSETS2021¥ 47,376¥ 46,323

LIABILITIES AND EQUITYCURRENT ASSETS:

CURRENT LIABILITIES:   Cash and cash equivalents¥ 84,632¥ 68,029   Notes and accounts payable-trade110,432

—

46

53

—

107,368   Accrued income taxes

7,453

6,955

  Inventories

38,521

35,236   Consumption taxes payable

5,426

6,089

   Short-term loans receivable

180,013

180,004  Accrued expenses

16,62816,127

6,154

5,469

  Accrued bonuses

3,440

4,148

(44)

(24)

   Accrued directors’ bonuses

119

98

419,708

396,082   Accrued product warranties

243

292

   Accrued loss on contracts

115

309

   Notes accounts receivable-trade and contract assets   Notes and accounts receivable-trade   Other current assets   Allowance for doubtful receivables   Total current assets
PROPERTY, PLANT AND EQUIPMENT:   Current portion of long-term lease obligations  Land28,36028,360   Other current liabilities

27,216

26,715   Buildings and structures

80,18974,946   Total current liabilities

108,062

107,109   Machinery and vehicles

167

167

LONG-TERM LIABILITIES:   Furniture and fixtures

15,22516,092   Long-term lease obligations

74

81  Rental assets

35,91336,735   Allowance for long-term continuous service rewards

749

899

  Lease assets

40

40   Accrued pension and severance cost

32,14240,914   Construction in progress

897

2,393

   Other long-term liabilities

2,341

2,738

   Total

160,791

158,733   Total long-term liabilities

35,30644,632  Accumulated depreciation(75,514)(73,579)    Net property, plant and equipment

85,277

85,154   Authorized, 299,500,000 shares; issued, 131,079,972 shares as of December 31,
2022 and 2021.

73,30373,303  Capital surplus

82,827

82,82429—

233,355

208,825(2,093)(2,092)

5,203

7,873

    Deferred gain (loss) on derivatives under hedge accounting

(15)

23

   Foreign currency-translation adjustments

294

126

6,668

3,068

399,571373,950801727

400,372

374,677¥ 543,740¥ 526,418

INTANGIBLE ASSETS:  Software

5,365

6,227

  Goodwill

327—   Facility utilization rights

303

303

   Other intangible assets

01   Total intangible assets

5,995

6,531

13,312

17,353

16

36

393

421

  Lease deposits

2,768

2,962

   Deferred tax assets

12,904

14,975   Other investments and other assets

3,555

2,999

   Allowance for doubtful receivables

(188)

(95)

32,76038,651¥ 543,740¥ 526,418   Investments in securities   Long-term loans receivable   Prepaid pension and severance costs    Total investments and other assets   Total assets

COMMITMENTS AND CONTINGENT LIABILITIESEQUITY:INVESTMENTS AND OTHER ASSETS:SHAREHOLDERS’ EQUITY:  Common stock:   Stock acquisition rights  Retained earnings   Treasury stock, at cost; 1,404,790 shares in 2022 and 1,403,572 shares in 2021  ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):    Unrealized gain (loss) on available-for-sale securities    Defined retirement benefit plans   Total
NON-CONTROLLING INTERESTS   Total equity    Total liabilities and equity

85

2022

Canon Marketing Japan Inc.

Integrated Report 2022

Canon Marketing Japan Inc.

Integrated Report 2022

86

Data

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Year Ended December 31, 2022

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Year Ended December 31, 2022

(Millions of yen)(Millions of yen)

2022

2021

¥ 588,132¥ 552,086

COST OF SALES:

388,843

361,810Gross profit

199,289

190,276

Unrealized gain (loss) on available-for-sale securities

149,342

150,577

Deferred gain (loss) on derivatives under hedge accounting

(38)

52

49,947

39,699Foreign currency-translation adjustments

194

136

Defined retirement benefit plans

3,600

4,312

1,083

8,144

¥ 36,710¥ 37,640¥ 36,612¥ 37,547

98

93

NET SALESSELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Operating income
OTHER INCOME (EXPENSES):

NET INCOME

300

275

   Total other comprehensive income

Dividend income

210

283

COMPREHENSIVE INCOME

Interest expense

(12)

(12)

Insurance income

459

506

Foreign exchange gains

29—

Owners of the parent

Foreign exchange losses—(6)

Non-controlling interests

Gain on investments in partnership—

278

Loss on investments in partnership

(29)

—

Gain on sales of long-lived assets

3

6

—

203

Gain on sales of investments in securities

730

1,255

Loss on sales of investments in securities

(18)

—

Gain on sales of shares of subsidiaries and associates—

896

Loss on sales of shares of subsidiaries and associates

—

(40)

(124)

(124)

Loss on disaster

—

(169)

Loss on impairment of investments in securities

(58)

(18)

Other, net

8663   Total other income (expenses)

1,576

3,396

Net income before income taxes

51,52343,095Current

14,244

12,971

Deferred

1,652

628

15,896

13,59935,62729,496

Loss on sales and disposal of long-lived assets

2021¥ 35,627¥ 29,496(2,673)3,644

OTHER COMPREHENSIVE INCOME (LOSS):

Interest income

Insurance income due to disaster

2022

COMPREHENSIVE INCOME ATTRIBUTABLE TO:

INCOME TAXES:   Total income taxes
Net income
NET INCOME ATTRIBUTABLE TO:
Non-controlling interests
Owners of the parent
Net income

75

76

35,552

29,420¥ 35,627¥ 29,496(Yen)

PER SHARE DATA:
Net income attributable to owners of the parent  -Basic¥ 274.16¥ 226.88  -Diluted

274.10226.83

90.00

75.00

Cash dividends applicable to the year

87

Canon Marketing Japan Inc.

Integrated Report 2022

Canon Marketing Japan Inc.

Integrated Report 2022

88

Data

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Year Ended December 31, 2022

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Year Ended December 31, 2022
(Thousands of shares / Millions of yen)

(Millions of yen)

Shareholders’ equity
Common stock

Balance at January 1, 2021
 Net income attributable to owners of the parent

StockacquisitionrightsRetainedearnings

2021¥ 51,523¥ 43,095

9,593

10,246

CASH FLOWS FROM OPERATING ACTIVITIES:Treasury stock

SharesAmountCapitalsurplus131,080¥ 73,303¥ 82,815  —¥ 188,482(1,413)¥ (2,104)

—

—

—

—

29,420——

Amortization of goodwill

30

—

111

(243)

SharesAmount

Net income before income taxes
Depreciation and amortization Cash dividends

—

—

—

—

(9,077)——

Increase (decrease) in allowance for doubtful receivables Purchase of treasury stock

—

—

—

—

—

(1)

(2)

Increase (decrease) in accrued pension and severance costs(3,480)(544) Disposition of treasury stock

—

—

9

—

—

9

14

Decrease (increase) in prepaid pension and severance costs

(46)

(45)

Net
  income attributable to non-controlling interests

—

—

—

—

—

—

—

Increase (decrease) in accrued bonuses(716)(1,486) 
Cashdividends paid to non-controlling interests

—

—

—

—

—

—

—

Loss (gain) on sales and disposal of property, plant and equipment, net

108

112

—

Loss (gain) on sales of investments in securities(712)(1,255)

Loss on impairment of investments in securities58

18 Net change in the year
Balance at January 1, 2022

—

—

—

—

—

—

131,080

73,30382,824—

208,825(1,405)(2,092)Net  income attributable to owners of the parent

—

—

—

—

35,552——

Loss (gain) on sales of shares of subsidiaries and associates

—

(856)

 Cash dividends

—

—

—

—

(11,022)——

Loss (gain) on investments in partnership

29

(278)

 Purchase of treasury stock

—

—

—

—

—

(1)

(4)

Decrease (increase) in notes and accounts receivable(2,895)(1,988) Disposition of treasury stock

—

—

3

—

—

2

3

Decrease (increase) in inventories(3,280)(7,467) Net income attributable to non-controlling interests

—

—

—

—

—

—

—

Increase (decrease) in notes and accounts payable-trade

986

2,222

Cash
 
dividends paid to non-controlling interests

—

—

—

—

—

—

—

Income taxes paid

(13,820)(13,104) Net change in the year

—

—

—

¥ 29

—

—

—

Other, net

236

4,330

131,080¥ 73,303¥ 82,827¥ 29¥ 233,355(1,404)¥ (2,093)

37,72532,757(8,890)(14,587)

24

18

Payments for purchases of intangible assets(894)(2,242)

Payments for purchases of investments in securities(676)(1,089)Proceeds from sales of investments in securities

1,330

1,893

Payments for purchases of shares of a subsidiary

(210)

—

Balance at December 31, 2022

(Millions of yen)

Deferred
Unrealized
gain (loss)
ForeignDefinedgain (loss)
on derivacurrency- retirement
on availabletives
translation
benefitfor-sale
under hedge adjustments
plans
securities
accounting

Balance at January 1, 2021
 Net income attributable to owners of the parent¥ 4,231¥ (29)——¥Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:Payments for purchases of property, plant and equipment

Accumulated other comprehensive income (loss)

Proceeds from sales of property, plant and equipment
Noncontrolling Total equity
interests

Total

5

¥ (1,244)¥ 345,459¥ 656¥ 346,115——

29,420—29,420

Proceeds from sales of shares of a subsidiary—

847

Decrease (increase) in short-term loans receivable, net

11

3

(802)

(737)

(10,107)(15,894)

(56)

(62)

 Cash dividends

—

—

—

—

(9,077)—(9,077) Purchase of treasury stock

—

—

—

—

(2)

—

(2)

 Disposition of treasury stock

—

—

—

—

23

—

23

Net cash used in investing activities Net income attributable to non-controlling interests

—

—

—

—

—

76

76

CASH FLOWS FROM FINANCING ACTIVITIES:Other, net

—

—

—

—

—

(22)

(22)

Repayments of finance lease obligations Net change in the year

3,642

52

121

4,312

8,127

17

8,144

Payments for purchases of treasury stock

Balance at January 1, 2022

7,873

23

126

3,068

373,950727

374,677

Dividends paidNet
  income attributable to owners of the parent

—

—

—

—

35,552—35,552 Cash dividends

—

—

—

—

(11,022)—(11,022) Purchase of treasury stock

—

—

—

—

(4)

—

(4)

 Disposition of treasury stock

—

—

—

—

6

—

6

Effect of exchange rate changes on cash and cash equivalents

245

195

 Net income attributable to non-controlling interests

—

—

—

—

—

75

75

Net increase in cash and cash equivalents

16,603

7,898 Cash dividends paid to non-controlling interests

—

—

—

—

—

(24)

(24)

Cash and cash equivalents at beginning of year

68,02960,131(2,670)

(38)

168

3,600

1,089

23

1,112

¥ 84,632¥ 68,029¥ 5,203¥ (15)¥ 294¥ 6,668¥ 399,571¥ 801¥ 400,372

Cash dividends paid to non-controlling interests Net change in the year
Balance at December 31, 2022

89

2022

Canon Marketing Japan Inc.

Integrated Report 2022

(4)

(3)

(11,020)(9,073)

Dividends paid to non-controlling interests

(24)

(22)

Other, net

(156)

—

(11,260)(9,160)Net cash used in financing activities

Cash and cash equivalents at end of year

Canon Marketing Japan Inc.

Integrated Report 2022

90

Data

ESG Data
ENVIRONMENT*1

2018

2019

2020

2021

2022

SOCIETY

GHG emissions (Scope 1 and 2) (t-CO2)

2019

2020

2021

2022

Group employees

Scope 1*2

7,864

7,275

5,765

5,800

5,916

Number of men

14,202

13,89013,38513,007

Scope 2*3

40,92243,50145,733

51,95249,489Number of women

3,078

3,110

3,159

3,213

3,291

Total

48,78650,77651,49857,75255,405

Total

17,28017,000

16,544

16,22015,973Category 1. Purchased goods and services*5

236,406

313,133

284,892

632,093

606,018

Number of men

3,131

3,037

2,898

2,785

2,683

Category 2. Capital goods*6

27,726

65,34141,80738,96634,286

Number of women

92

97

106

108

117

3,223

3,134

3,004

2,893

2,800

68.3

74.5

64.5

63.6

73.5

202 (15)144 (18)143 (26)

136 (43)145 (62)

9 (4)

4 (0)

9 (5)

3 (3)

5 (3)

Childcare leave

97.1 (100.0)

82.4 (100.0)

95.6 (100.0)

95.8 (100.0)

96.1 (100.0)

Family care leave

87.5 (100.0)

GHG emissions (Scope 3) (t-CO2)*4

Total

4,601

8,993

9,061

11,34912,382

4,039

4,175

3,785

4,944

4,999

137

153

93

975

1,153

9,048

12,032

6,119

2,476

2,488

Childcare leave

5,401

6,915

7,445

8,712

7,488

Family care leave

0

0

0

0

0

1,122

1,073

967

1,450

1,293

0

0

0

0

0

Category 11. Use of sold products*

88,59086,30983,331

87,844

107,649

Category 12. End-of-life treatment of sold products*15

15,74915,11816,26921,05919,833

219

461

518

366

941

0

0

0

0

0

Category 4. Upstream transportation and distribution*

8

Category 5. Waste generated in operations*9
Category 6. Business travel*10
Category 7. Employee commuting*

11

Category 8. Upstream leased assets*12
Category 9. Downstream transportation and distribution*13
Category 10. Processing of sold products
14

Category 13. Downstream leased assets*16
Category 14. Franchises

Number of Group employees taking
childcare and family care leave*18

Percentage of Group employees returning to work after taking
childcare and family care leave*19 (%)

75.0 (−) 100.0 (100.0) 100.0 (100.0) 100.0 (100.0)

Number of Group retirees and reemployed workers

290

Number of retirees

319

304

478

469

Number of reemployed workers

175

163

192

239

286

Average age of Group employees

44.6

44.7

44.8

45.5

45.7

Average number of years of service of Group employees

18.9

19.6

19.6

19.5

20.0

Number of employees

150.5

148.5

142.0

147.5

139.0

Percentage of employees (%)

2.25

2.20

2.15

2.32

2.29

0

0

0

0

0

513,703454,287

810,234

798,530—

114,389

115,863

124,891

125,183

Recycled water—

19,455

13,999

9,596

10,543Groundwater—

21,89522,001

19,75018,486

Total—

155,739

151,863

154,237

154,212Sewerage system—

91,13782,50875,48077,364

Number of directors

Total

—

91,13782,50875,48077,364In-house (men)

5

4

4

4

4

In-house (women)

0

0

0

0

0

In-house total

5

4

4

4

4

Outside (men)

2

2

2

2

3

Outside (women)

0

0

0

0

0

Outside total

2

2

2

2

3

Total

7

6

6

6

7

In-house (men)

2

2

2

2

2

In-house (women)

0

0

0

0

0

In-house total

2

2

2

2

2

Outside (men)

3

3

3

3

3

Outside (women)

0

0

0

0

0

Outside total

3

3

3

3

3

Total

5

5

5

5

5

62.6

63.4

62.3

62.6

63.3

Number of Board of Directors’ meetings

15

16

18

16

13

Number of Audit & Supervisory Board meetings

18

20

17

17

17

23

23

23

23

20

Total
Water intake and wastewater discharge ofapplicable buildings (m3)*17
Water intake (water supply) Public water

Waste emissions (t)18,635

Total emissions

21,09815,67014,075

14,879ESG Data Notes*1 The scope of environmental data covers 11 Group companies in Japan, which account for
99% of the Group’s net sales. (Canon Marketing Japan Inc., Canon System & Support
Inc., A&A Co., Ltd., Canon IT Solutions Inc., SuperStream Inc., Qualysite Technologies
Inc., Canon Production Printing Systems Inc., Canon ITS Medical Inc., Canon
BizAttenda Inc., Canon Business Support Inc., and Canon Customer Support Inc.)*2 S cope 1: Direct emissions (town gas, liquefied petroleum gas, diesel, kerosene,
gasoline, etc.)*3 S cope 2: Intermediate emissions (electricity, steam, etc.)*4 In 2021, the scope of data was expanded to cover Group companies indicatedin *1 and the method of calculation was revised. Results for 2021 are based on
the revised calculation logic. Results for 2021 based on the previous method
can be accessed on our corporate website.
https://canon.jp/corporate/csr/esgdata (in Japanese only)*5 Calculated by multiplying the Group’s purchases by per-unit emissions of individual
purchases based on the number obtained by multiplying the carbon footprintof products (CFP) data of core products by the number of products. In the caseof businesses for which CFP data is not available, calculated by multiplying theamount purchased by per-unit emissions indicated on the Input-Output Tablesof the Ministry of Economy, Trade and Industry
 alculated by multiplying the amount of capital goods purchased by the Group*6 C
by emissions intensity per price of capital goods*7 C alculated by multiplying the amount of fuel and energy consumed by the Groupby the emissions intensity at the time of fuel procurement (resource extraction,
production, and delivery) eliveries to customers are calculated using the fuel consumption method.
*8 D
Deliveries between warehouses are calculated using the ton-kilometer method.
Storage is calculated by multiplying the average annual inventory volume byenergy intensity.
*9 C alculated by multiplying the Group’s total volume of waste, excluding the volumeof used Canon products previously recorded under Category 12, by the emissions
intensity by type of waste and treatment method

Canon Marketing Japan Inc.

Percentage of Group employees taking paid leave (%)

393,038

Category 15. Investments

Wastewater discharge

12,682

Group management

Category 3. Fuel- and energy-related activities
not included in Scope 1 or 2*7

91

2018

Integrated Report 2022

*10 Calculated by multiplying the number of Group employees by per-unit emissionsof business trips*11 Calculated by multiplying the amount paid for each mode of transportation by
per-unit emissions of each mode. In the case of private car commuting, calculated by converting the total mileage to fuel usage and multiplying it by per-unit­emissions for fuel combustion*12 Encompasses leased buildings and vehicles and included in Scope 1 and 2*13 Calculated by determining average transportation distances and weights of­distributed products for each region and multiplying it by per-unit emissionsof transportation*14 Calculated by determining the lifetime power consumption for main products
and multiplying it by per-unit emissions for nationwide average power
consumption*15 Calculated by multiplying the CFP data of main products by the number of theseproducts. In the case of businesses for which CFP data is not available, calculated
by multiplying the sales ratio*16 Calculated by determining annual power consumption of each leased productand multiplying it by per-unit emissions for nationwide average power
consumption*17 Scope of data for water intake and wastewater discharge of applicable buildings
covers Canon Marketing Japan (Headquarters, Konan office, Makuhari office,Aomori office, and Kumamoto office), Canon IT Solutions (Nishi-Tokyo office), andCanon Customer Support (Akita office), which account for roughly 38% of theGroup’s employees*18 The figure in parentheses indicates the number of men.
*19 The figure in parentheses indicates the percentage of Group employees returning
to work that were men.
*20 Average of both directors and Audit & Supervisory Board members*21 As of December 31 each year

Number of employees with disabilities (non-consolidated)

GOVERNANCE

2018

2019

2020

2021

2022

Number of Audit & Supervisory Board members

Average age of corporate officers*20, 21
Number of Board of Directors’ and Audit & Supervisory
Board meetings

Number of executive officers

Canon Marketing Japan Inc.

Integrated Report 2022

92

Corporate Data / Investor Information

The Canon MJ Group (as of December 31, 2022)
Position within the Canon Group

Third-Party Assessments / Awards Received 
Canon MJ has been selected for the FTSE4Good Index Series for 19 consecutive years since fiscal 2004 and for the FTSE Blossom Japan Index for six
consecutive years since fiscal 2017.
In addition, we have been included in numerous indexes, including the SOMPO Sustainability Index for 12 consecutive years since 2012 and the
MSCI Japan ESG Select Leaders Index, a general ESG index developed by MSCI Inc., for four consecutive years since 2018.

Canon Marketing Japan Inc.
Markets Canon products and services in Japan and provides its
unique IT solutions.

Canon
Canon

EuropeAmericas

Canon
Canon

MarketingMarketing Asia

Japan

Canon Inc.

Research, development,
and manufacture ofCanon products

Canon MJ was selected for the “Most Liked!” IR Award at the 2022 IR Awards, organized by the Japan Investor Relations
Association (JIRA). This award was established in 2020 with the aim of encouraging companies to actively share their IR
activities and strive to realize best practices. Canon MJ was one of 20 companies selected for the award through a voting
system that considered entries from 207 companies.

Segment

Company Name

Canon IT Solutions Inc., SuperStream Inc., Qualysite Technologies Inc.,
Canon Software America, Inc., Canon IT Solutions (Thailand) Co., Ltd., andMaterial Automation (Thailand) Co., Ltd.

Area Business Unit

Sompo Sustainability Index

Canon MJ Selected for “Most Liked!” IR Award

Canon
Australia

Enterprise Business Unit

2023

Canon System & Support Inc. and A&A Co., Ltd.

Production Printing

Canon Production Printing Systems Inc.

Healthcare

Canon ITS Medical Inc.

Professional
Business UnitBPO Services

Canon BizAttenda Inc., Canon Business Support Inc., and QB5 Inc.

Service & Support

Canon Customer Support Inc.

Canon MJ Receives Two-Star Rating in the Information Technology Federation ofJapan’s Cyber Index Corporate Survey 2022
The Cyber Index Corporate Survey is a survey conducted by the Information Technology Federation of Japan on the cybersecurity initiatives of com­panies comprising the Nikkei 500 index and their disclosure of such information, aimed at encouraging private companies to disclose the details of
their cybersecurity measures. Canon MJ was one of 11 companies to receive two stars, the highest honor established from the current fiscal year,
as a company that continues to demonstrate outstanding commitment to and information disclosure of cybersecurity measures.

Canon MJ Ranked atop Nikkei Computer Customer
Satisfaction Survey for 10th Consecutive Year
Canon MJ was ranked No. 1 in the Nikkei Computer Customer Satisfaction Survey 2022–2023 in the security products­category. This marks the 10th year in a row that we have ranked atop this survey, which is a testament to our unwaveringcommitment to providing products and services that cater to the needs of customers and a comprehensive line of­maintenance and operational support by drawing on the strengths of our long-cultivated know-how and our­outstanding cybersecurity professionals.

Canon IT Solutions Recognized for EDI Technology Patent
Canon IT Solutions was recognized at Kanto Region Invention and Innovation Awards 2022, held by the Japan Institute ofInvention and Innovation, for its development of technology that utilizes electronic data interchange (EDI) to monitor job execution.

The Group comprises 14 consolidated subsidiaries.

93

Canon Marketing Japan Inc.

Integrated Report 2022

Canon Marketing Japan Inc.

Integrated Report 2022

94

Corporate Data / Investor Information

Corporate Information (as of December 31, 2022)
Trade Name

Canon Marketing Japan Inc.

Date of
Establishment

February 1, 1968

Common Stock ¥73,303 million
Headquarters

16-6, Konan 2-chome,
Minato-ku, Tokyo 108-8011, Japan

Description ofBusiness

Domestic marketing of Canon products andrelated solutions

Number of
Employees

Consolidated: 15,973
Non-consolidated: 4,653

Canon MJ maintains a website that includes information on its financial results, management plan, and sustainability initiatives, including
those related to ESG, to further facilitate communication with shareholders. The website contains the following:

Main Locations Headquarters, Konan office,of Operations Makuhari office, and branches(Sapporo, Sendai, Nagoya, Osaka, Hiroshima,and Fukuoka)
Stock Listing

Major Shareholders• Investor relations website

Percentage ofOwnership(%)

The Tokyo Stock Exchange, the Prime Market(from April 4, 2022)
Securities code: 8060

Canon Inc.

75,70858.4

The Master Trust Bank of Japan, Ltd.
(Trust Account)

8,809

6.8

Canon Marketing Japan Group
Employee Stock Ownership
Association

5,577

4.3

Custody Bank of Japan, Ltd. (Trust
Account)

3,688

2.8

STATE STREET BANK AND TRUSTCOMPANY 505001

1,478

1.1

Canon Marketing Japan Group
Business Partner Stock Ownership
Association

1,265

1.0

THE BANK OF NEW YORK, TREATYJASDEC ACCOUNT

1,239

1.0

SMBC Nikko Securities Inc.

1,082

0.8

Mizuho Bank, Ltd.

1,001

0.8

879

0.7

Total number ofshares authorized

299,500,000 shares

Number ofshares issued

131,079,972 shares

Number ofshareholders

11,166• Sustainability website
canon.jp/corporate/en/sustainability

canon.jp/8060e-ir

Status of Shares
Number of
Shares Held(Thousands)

Name of Shareholder

Canon MJ Website• News for investors

Information on:• Financial results and otherfinancial information• Environmental, social, andgovernance (ESG) initiatives• Information on Long-Term
Management Objectives andMedium-Term
Management Plan

• Sustainability management
policy and structure• Stock information• Value creation process• The Canon MJ Group’smaterial issues• Information for
individual investors• Integrated reports

1.1%
1.8%

12.7%

13.3%

Shareholder
Composition
Financial institutions
Securities companies

12.0%

The Dai-ichi Life Insurance
Company, Limited

Integrated Report 2022: Editor’s Postscript

Other domestic companies
Foreign companies, etc.
Individuals and others
Treasury stock

59.1%

Stock Price / Trading Volume
Trading Volume (Shares)

Stock Price (Yen) 
3,600

10,000,000

Member of the Integrated Report 2022 editorial team

2,700

7,500,000

1,800

5,000,000

Thank you for taking the time to read Integrated Report 2022.
Based on the various opinions and feedback we received from our stakeholders
in regard to Integrated Report 2021, we have enhanced the content of the report to­provide a better understanding of our business and growth story.
Integrated Report 2022 is the fourth integrated report issued by the Group andwas prepared based on the theme of “ability and speed to make change.” We haveendeavored to provide readers with an understanding of how the Canon MJ Groupestablished its management foundation and its sound financial position as well as how
it has accelerated the growth of its IT solutions business toward the realization of its
Long-Term Management Objectives (2021–2025). In order to expand the Group’s­business with a greater sense of speed toward sustainable growth, we are aiming totransition to a service-based business model in the IT solutions business, and in view ofthis, we are focusing on developing highly skilled personnel and investing in growth aswell as actively creating a culture of taking on new challenges. We hope that we are able
to convey this aim and the measures we are taking to this end in Integrated Report 2022.
It is our hope that this report helps provide our stakeholders with a better understandingof the Canon MJ Group. We will continue to value opportunities to engage with our
stakeholders, and therefore, we hope that you continue to share your honest opinions
and feedback.

Takuya JoshinGroup Executive of Corporate Planning Headquarters

900

02,500,000

Jan.

Feb. Mar. Apr.

May Jun.

Jul.

Aug. Sep.

Oct. Nov. Dec. Jan.

2020

Feb. Mar. Apr.

May Jun.

Jul.

2021

Aug. Sep.

Oct. Nov. Dec.

Jan. Feb. Mar.

Apr.

May Jun.

Jul.

2022

Aug. Sep.

Oct. Nov. Dec.

Jan. Feb. Mar.

Apr.

May

0

2023

e

95

Canon Marketing Japan Inc.

Integrated Report 2022

Canon Marketing Japan Inc.

Integrated Report 2022

96