Canon Marketing Japan Inc.
Third Quarter 2016 Results

October 26, 2016
Yoshiyuki Matsusaka
Director , Senior Vice President* The figures are rounded off to the nearest 100 million yen in this material.
* Forward-looking statements and results forecasts presented in this material are based on the management’s assumptions using currently available
information and therefore contain inherent risks and uncertainties.
As a consequence, due to a range of possible factors, actual results may materially differ from the forecasts.

Summary of Third Quarter 2016 Results
Net sales¥147.5 B （Y/Y -8.0B, -5％）

Net sales decreased, reflecting a decline in shipments of compact cameras andinkjet printers in Imaging System and a review of the business structure in Medical.

Operating Income¥5.5 B （Y/Y -1.6B, -23％）

Operating income decreased, reflecting a decline in profit associated with adecline in sales in Imaging System.
Reference

Operating income (Jan. to Sep.)

Profit attributable toowners of parent¥15.8 B (Y/Y +0.2B, +1%)

¥3.4 B （Y/Y -0.8B, -20％）

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Summary of Results
 Summary of Results

3Q 2016 Actual(from July 1 to September 30)(Billions of yen)

 Op. Income Variance Analysis

2Segment Outline

3Q 2016 Actual(from July 1 to September 30)(Billions of yen)

“Other” includes the intersegment sales and the corporate expenses that are not allocated to the sharedservice businesses or to each segment.

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Summary of Results
 Summary of Results

1Q-3Q 2016 Actual(from January 1 to September 30)(Billions of yen)

 Op. Income Variance Analysis

4Segment Outline

1Q-3Q 2016 Actual(from January 1 to September 30)(Billions of yen)

“Other” includes the intersegment sales and the corporate expenses that are not allocated to the sharedservice businesses or to each segment.

5Segment Information

52%

Business Solutions

Net sales: ¥79.2 billion (down ¥0.6 billion, -1% year on year)
 Sales of MFP, page printer cartridges, and network cameras, among other items, increased. However, net
sales decreased marginally, mainly reflecting the decline in sales of production printing.

Operating income: ¥2.6 billion (up ¥0.1 billion, +6% year on year)
Operating income rose from a year ago, chiefly due to an increase in stock business, which is highly profitable,
and a decrease in SG&A expenses.
2016 Actual v. 2015 Actual

Net sales - Growth rate

Net sales(Billions of yen)Op. income

6Segment Information

22%IT Solutions

Net sales: ¥34.1 billion (down ¥0.1 billion, -0% year on year)
Although sales of SI services and the IT infrastructure service business increased, sales inthe segment decreased largely due to a decline in the embedded software business.

Operating income: ¥0.9billion (down ¥0.2 billion, -15% year on year)
Operating income fell due to a decline in profit associated with a decline in sales.
2016 Actual v. 2015 Actual

Net sales - Growth rate

Net sales(Billions of yen)Op. income7[Reference] Overall sales of IT Solutions(Billions of yen)8

Segment Information

22%Imaging System

Net sales: ¥35.0 billion (down ¥6.3 billion, -15% year on year) Overall sales of consumer products declined largely due to sluggish consumer spending. Sales of compact
digital cameras decreased significantly from a year ago, which were particularly affected by the Kumamoto
Earthquake.

Operating income: ¥1.8 billion (down ¥1.9 billion, -52% year on year)
Operating income fell due to a decrease in the gross margin associated with a decline in sales.
(Billions of yen)

2016 Actual v. 2015 Actual

Net sales - Growth rate

Net sales

Op. income9Segment Information

4%Industrial / Medical

Net sales: ¥5.6 billion (down ¥1.1 billion, -16% year on year)
Sales decreased due to a backlash to the strong performance a year ago in Industrial as well as a review ofthe earnings structure in Medical.

Operating income: ¥0.1 billion (up ¥0.2 billion, - % year on year)
Operating income increased due to cost reductions and a review of earnings structures.

Net sales(Billions of yen)

2016 Actual v. 2015 Actual

Op. income
Net sales - Growth rate10

Summary of Projections(Billions of yen)11

Projections Summary Outline
FY2016 Current Projection v. Previous Projection(Billions of yen)

“Other” includes intersegment sales, shared service businesses, and corporate expenses that are notallocated to each segment.
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Projections Summary Outline
FY2016 Projection v. FY2015 Actual(Billions of yen)

* “Other” includes intersegment sales, shared service businesses, and corporate expenses that are notallocated to each segment.
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Projections by Segment
 4Q: The Company forecasts an increase in sales largely due to theeffects of new MFP models and the commencement of shipments ofmonochrome continuous feed printing systems. Operating income isexpected to decrease mainly due to an increase in expenses for therelease of new products.

Business Solutions

 Full year: The Company forecasts an increase in sales, although aslight downward revision will be made to the previous plan, as aresult of the adjustment to shortfalls during the first three quarters.
Operating income, which remains unchanged from the previous
announcement, is expected to increase from a year ago.

 4Q: The Company forecasts an increase in sales for the SI service
business, while the IT infrastructure service business is anticipated todecrease. As a result, overall sales are expected to remain at thesame level. Operating income is projected to decrease due to theimpact of strategic investments which will work over the next few years.

IT solutions

 Full year: The Company forecasts an increase in sales, although aslight downward revision will be made to the previous plan, as a resultof shortfalls in the IT infrastructure service and embedded businesses.
Operating income, which remains unchanged from the previous
announcement, is projected to increase from a year ago.
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Projections by Segment

Imaging System

 4Q: The Company forecasts an increase in sales due to efforts
focused on the expansion of new interchangeable lens digital
cameras and inkjet printers. Operating income is also projected toincrease given an increase in the weighting of highly profitableproducts as well as cost reductions.
 Full year: The Company forecasts a greater decrease in sales, as adownward revision will be made to the previous plan to reflect
shortfalls in the first three quarters. Operating income is also projected
to decrease in association with the decline in sales.

 4Q: The Company forecasts a decrease in both sales and income,chiefly reflecting the reassessment of low-profit products in Medical.

Industrial / Medical

 Full year: The Company forecasts a decrease in sales of 6% from ayear ago, or by 1.1 billion yen from the previous plan. Operating
income is projected to increase due to an increase in the weighting ofmaintenance services in Industrial on top of an improvement in
profitability in Medical, as well as cost reductions in the twobusinesses.
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SupplementaryInformation

Capital Relationship Diagram

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Supplementary Information

Results of main consolidated companies(Billions of yen)

*1. The amounts are before intersegment elimination.
*2. The results of Canon System & Support Inc. for 2015 are adjusted considering the business transfer of the GB Sales
Headquarters from Canon Marketing Japan Inc.
*3. The results of Canon IT Solutions (Consolidated) for 2015 are the consolidated results of Canon MJ IT Group Holdings
Inc.

Supplementary Information

18

Results of main consolidated companies(Billions of yen)

*1. The amounts are before intersegment elimination.
*2. The results of Canon System & Support Inc. for 2015 are adjusted considering the business transfer of the GB Sales
Headquarters from Canon Marketing Japan Inc.
*3. The results of Canon IT Solutions (Consolidated) for 2015 are the consolidated results of Canon MJ IT Group Holdings
Inc.

Supplementary Information

19

SG&A expenses(Billions of yen)Supplementary Information20

Non-operating income and expenses
 Non-operating income(Billions of yen)

 Non-operating expenses

Supplementary Information21

Extraordinary income and expenses
 Extraordinary income(Billions of yen)

 Extraordinary expenses

Supplementary Information

22

Balance Sheets(Billions of yen)

Notes and accounts receivable trade

Inventories

Supplementary Information

23

Financial indicator(Billions of yen)

Operating income ratio / ROA / ROE

Profit attributableto owners ofparent

Supplementary Information

24

Financial indicatorPayout ratio / EPS / Dividend per share

Dividend per share：Yen
EPS：YenSupplementary Information

25

Financial indicator(Billions of yen)

Investment

Depreciation and amortization

Cash Flow

Supplementary Information

26

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