Headquarters

16-6, Konan 2-chome,
Minato-ku, Tokyo 108-8011, Japan
Canon Marketing Japan Website
About the Canon MJ Group
canon.jp/8060(in Japanese only)

Investor Relations
canon.jp/8060e-ir
Sustainability
canon.jp/8060-csr(in Japanese only)

ResolvingSocial Issues
with IT Solutions
Integrated Report

2020
For the year ended December 31, 2020

About the Canon MJ GroupAs a true partner, the Canon MJ Group will prioritize creating added value for customers, become an entity that

Canon MJ Group Now

About the Canon MJ Groupremains resilient and highly proﬁtable even in challenging times, and help resolve social issues.

(Year Ended December 31, 2020)

Sales down owing to the COVID-19 pandemic
constraining sales activities

Record-high operating margin

Tackling climate change

Using resources effectively

Net sales

Operating margin

Helping reduce CO2 at customer sites

Recycling rate

5.7%

120,320t-CO(up 0.5 percentage point from ﬁscal 2019)• Enhancing energy-saving performance of products andadopting carbon offsets• Boosting efficiency through IT solutions• Recycling used products and consumables

Recycling rate =Amount of resources recycled / Total amount ofused products recovered and processed

Work practice reforms

Diversity

Total annual working hours (average for Canon MJ
union members)

Proportion of women in managerial posts(down 12.2% from ﬁscal 2019)99.99%

2

Value Creation of the Canon MJ Group

545.1billion¥

Expanding IT solutions business through
Capital efficiency

Groupwide efforts

ROE

IT solutions as a percentage of net sales

6.6%

37.3%

3.5%

1,697hours(up 1.8 percentage points from ﬁscal 2019)(down 44 hours from ﬁscal 2019)

Robust ﬁnancial baseStable shareholder returns

Undertaking intellectual property activities

Customer satisfaction survey for security products

Total stockholders’ equity ratio

Payout ratio

Number of patents held

Security products

68.2%

35.4%

1,302

1st place(up 3.8 percentage points from ﬁscal 2019)(up 0.4 percentage point from ﬁscal 2019)
The payout ratio has stably exceeded 35% since ﬁscal 2015.

Segment Strategies(¥203.1 billion)(down 0.5 percentage point from ﬁscal 2019)(up 0.4 percentage point from ﬁscal 2019)

Sustainable Management—ESG Initiatives

Note: Number of patents issued and maintained in the Patent Gazetteas of December 31, 2020 (Source: Canon MJ)
Including security-related technologies, automated Web app creation
technologies, and video and image processing-related technologies

for eight consecutive years
Note: Nikkei xTECH and Nikkei Computer Customer Satisfaction Survey 2020-2021

Market share: Canon brand helps boost earnings Market share in Japan in 2020 (Source: Canon MJ)

1

Compact digital cameras

Inkjet printers

Office multifunction printers (MFPs)

Laser printers

Large inkjet printers

34%

45%

48%

16%

30%

40%

No.1

No.1

No.1

No.3

No.1

No.1

No.1 market share for
13 consecutive years

No.1 market share foreight consecutive years

No.1 market share forseven consecutive years

No.1 market share for29 consecutive years

No.1 market share for12 consecutive years

Canon Marketing Japan Inc. I Integrated Report 2020

Financial, ESG, and Corporate Data

Digital interchangeable lens cameras

Canon Marketing Japan Inc. I Integrated Report 20202

About the Canon MJ Group

Factors in Sales Changes for Major Products and Services by Segment for Fiscal 2020

REVIEW BY SEGMENT

Consumers Segment

About the Canon MJ GroupWe are developing businesses in the Consumers, Enterprise, Area, and Professional segments to help numerous

Enterprise Segment

customers create value.
Sales
Large corporations, quasimajor and upper mediumsized enterprises

Individuals

Customers

Digital interchangeable lens cameras and compact

Sales

digital cameras

Deals were down as a result of lackluster market conditions from the start

Although the EOS R5, EOSR6, and EOS Kiss M2 mirrorless cameras launched in

Small-to-medium-sizedenterprises

Specialists

fiscal 2020 were well received, demand was low because people refrained
from going out, thereby dampening purchasing sentiment. Selling opportunities
were limited owing to temporary closures and shorter operating hours among

Office MFPsof the year and restrictions on sales activities from ongoing closures.

Sales

Laser printers

As with office MFPs, performance suffered from the impact on sales
Value Creation of the Canon MJ Group

activities and the absence of the previous year’s large deals.

camera stores and electronics retailers.

Sales
Consumers

Segment

Enterprise

Area

Professional

Inkjet printers

For large corporations, quasi-

We provide Canon input andWe provide specialist solutions.

inkjet printers and othermajor and upper medium-

output devices and solutions• Production printing

products to consumers andsized enterprises, we supply

that help resolve business• Industrial equipment• Healthcare

Canon input and output devices

issues for small-to-medium-of photography.

and solutions that help resolve

sized enterprises nationwide.

products launched in the year under review. Demand remained strong for

Sales

products equipped with reﬁllable Giga Tanks.

• Although the order situation improved from the fourth quarter, there was a

Sales

Ink cartridges

Market shrank amid decreased color printing and New Year’s card production.

Sales

industry-speciﬁc issues.

Office print volumes declined from ongoing telework and other factors.

IT products

IT solutions for large corporations

decline in replacement demand for business PCs that was associated withthe end of Windows 7 support and an absence of the previous year’s largescale projects for systems integration services and infrastructure systems.

Sales of PC peripherals continued to grow owing to rising demand of work

• We experienced project declines and postponements because of reduced

from home. Sales of gaming PCs also continued to grow.

sales activities and other factors.

Segment Strategies

help enhance the enjoyment

Maintenance services and ink cartridges for laser
printers

Demand rose signiﬁcantly owing to an increase in online studying and workfrom home. Sales were therefore strong, particularly for high-value-added

We supply digital cameras,

Sales

Business process outsourcing

Area Segment

Professional Segment

Marketing
Sales

Service and support

Sales by segment

Operating income by segment(Billions of yen)(Billions of yen)

800

600

621.1

Consolidated net sales

43.7

545.1
30.7

400

0

235.8

45
Professional(-13.0)Area(-32.5)171.2

Enterprise(-24.6)

132.8

124.9

Consumers(-7.9)

-19.5

-17.5

2019

2020

Other*1(+1.9)

195.8

since the fourth quarter of the previous term, markets were weak from thesales of monochrome continuous-feed printers and other products.

beginning of the year, and sales activities were limited due to ongoing closures.

• The point-of-purchase production-related business experienced a downturn.

30

Consolidated operating
income

32.4

31.3

1.6

1.9

14.4
15

9.8
8.9

10.1
0

6.9

12.2

-0.5

-1.6

2019

2020

Professional(+0.3)
Area(-4.5)
Enterprise(-1.1)
Consumers(+5.4)
Other*1(-1.1)

Maintenance services and ink cartridges for laser

Sales

printers

While sales of semiconductor production-related equipment increased,

Industrial equipment

Print volumes decreased due to the impact of ongoing telework.

sales of inspection and measurement equipment were down.

Sales

Sales

IT solutions for small-to-medium-sized enterprises

Healthcare

Demand for building teleworking environment remained high, and the HOME

Despite the absence of the previous year’s major deals for pharmacies, we

IT support cloud service performed well, while sales of ESET antivirus

received orders for several large deals from hospitals to construct electronic

software and other security products increased. The number of orders for IT

medical records and medical IT platforms.

systems maintenance and operational services increased. The absence ofNote: In January 2020, the Company transferred the shares of consolidated subsidiary Canon
Lifecare Solutions Inc. to Canon Medical Systems Corporation. Healthcare sales would have been
up if the impact of performance ﬁgures of Canon Lifecare Solutions’ net sales of ¥11.0 billion andoperating income of ¥100 million in the previous ﬁscal year were excluded.

the previous term’s replacement demand surge owing to the termination of
Windows 7 support affected sales of business PCs, offsetting someFinancial, ESG, and Corporate Data

200

268.3

• Lower sales of consumables due to lower print volumes offset higher

Sales

Consolidated operating
incomeProduction printing

Notwithstanding progress in securing office MFP deals that had been postponed60

Consolidated net sales

Sales

Sustainable Management—ESG Initiatives

Group headquarters

Office MFPs and laser printerstelework-related demand.

Figures in parentheses represent changes from ﬁscal 2019.
*1. Other includes intersegment sales, shared service business*2, and BPO services business and other sales not allocated to segments. It also includes corporate and other expenses not allocated to segments.
*2. Shared services are a framework for improving services and reducing costs by centralizing common operations for multiple entities within the Group.

3

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 2020

4

Contents
1
3

About the Canon MJ Group

Canon MJ Group Now
Review by Segment

Editorial Policy
The Canon MJ Group integrated report aims to provide the information its stakeholders need to understand its corporate value creation.
This publication presents the Long-Term Management Objectives (ﬁscal 2021 through 2025) and the Three-Year Management Plan (ﬁscal 2021 through2023) to overview the Canon MJ Group’s ability to create value over the medium through long terms and help materialize a sustainable society. The

Value Creation of theCanon MJ Group

Segment Strategies

7
8
9
15
17
19
21
23
25

Canon Group's Corporate Philosophy
Canon MJ Group’s Sustainability Management
A Message from the President
Milestones
Value Creation Process
Business Activities
The Capital Components of Corporate Value
Long-Term Management Objectives (2021-2025)
Three-Year Management Plan (2021-2023)

27
29
31
33
35

Overview of Segment Strategies
Consumers Segment
Enterprise Segment
Area Segment
Professional Segment

Company incorporated the CSR report and other publications in the integrated report to add environmental, social, and governance (ESG) and othernonﬁnancial information. Detailed ﬁnancial information is available from the Company’s website and securities report. The website also details
sustainability activities.

Categories and Positioning of Disclosed Information

42
44
47
55

Environment
SocialCorporate Governance
Board of Directors and Audit & Supervisory Board Members

Nonﬁnancial Information

Information on website
https://cweb.canon.jp/eng/ir/

Information on website
https://cweb.canon.jp/csr/(in Japanese only)

Summarized

Integrated Report 2020

37 Analysts Assess Canon Marketing Japan’s IT Solutions Business

Sustainable Management—
ESG Initiatives

Financial Information

Securities Report

Corporate
Governance Report

Information Security
ReportDetailed

Reference Guidelines

57
59
61
91
93
94

Financial, ESG, andCorporate Data

10-Year Consolidated Financial Summary
Financial Review
Consolidated Financial Statements
ESG Data
Canon MJ Group
Corporate Data

International Integrated Reporting Framework of the International Integrated Reporting Council (IIRC), and Ministry of Economy, Trade and Industry (METI) Guidance forIntegrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation

Reporting Period
This report covers ﬁscal 2020, ended December 31, 2020, and also includes activities and information before and after that term.

Scope of Coverage
Canon Marketing Japan Inc. and domestic and overseas Group companies (some information includes that of parent Canon Inc.)

Company Name Abbreviations
Third-Party Assessments

This report includes the following company name abbreviations.

The FTSE4Good Index Series has included Canon MJ for the past 17 years. In addition, we became part of FTSE Blossom Japan and the SNAM Sustainability Index for theCanon Marketing Japan Group

Canon MJ Group

fourth consecutive time in the year under review. We have been part of the MSCI Japan ESG Select Leaders Index since 2018.

Canon Marketing Japan Inc.

Canon MJ

Disclaimer Regarding Forward-Looking Statements
This integrated report contains forward-looking statements about the future performance and management plans of the Canon MJ Group. All forward-looking statements are2021

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
Sompo Sustainability Index

5

Canon Marketing Japan Inc. I Integrated Report 2020

THE INCLUSION OF Canon Marketing Japan Inc. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICEMARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Canon Marketing
Japan Inc. BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKSOR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

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. I Integrated Report 2020

6

Value Creation of the Canon MJ Group

Canon MJ Group’s Sustainability Management

About the Canon MJ Group

Canon Group's Corporate Philosophy

Based on the principle of Kyosei, we will strive to create a Company thathelps realize a society in which all of humanity can long live, work,
Value Creation of the Canon MJ Groupand live happily together.

Customers

Kyosei
Living and working together for the common good

Employees

Suppliers

The Canon Group’s corporate philosophy of Kyosei conveys our dedication to seeing all people, regardless of culture,
Publicagencies, local
governments

Shareholders
and investors

Contributing to global prosperity andSegment Strategies

customs, language, or race, harmoniously living and working together in happiness into the future.

Promotion ofsustainability
management
Corporate value sustainably increased
by solving social issues through business

NGOs and NPOs
Educational andresearch institutions

the well-being of mankind

Sustainable Management—ESG Initiatives

Local communities

The Corporate DNA of the Canon Group*Enterprising nature
The Canon Group’s Kyosei corporate philosophy aims to realize a society in which people,

Continue to pursue new values without being limited

keeping with the Sustainable Development Goals (SDGs). We believe that materializing Kyosei
Financial, ESG, and Corporate Databy past examples

society, and nature are in harmony and in which all human beings can live well. This is in

is the essence of what many call sustainability management. We will accordingly expand
areas in which we can combine our Canon products and IT solutions capabilities to resolve*Canon Inc. and its consolidated subsidiaries

social issues through business.

7

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 20208

Value Creation of the Canon MJ GroupA Message from the President

足立 正親

We aim to become essential to the economy and ourValue Creation of the Canon MJ Group

Masachika Adachi
President
代表取締役社長

About the Canon MJ Group

Resolving Social Issues
with IT Solutions
customers and sustainably increase corporate value
by resolving social issues with IT solutions.
Thoughts on Taking the Helmjoining this organization, I have largely worked in large account sales, andsystems proposal that I produced while I was a section chief. Anotherrecognize the great importance of people in corporate management. The

company dominated the market at the time. I took a new approach byCompany adheres to the “Three Selfs” spirit as the foundation of its guiding

identifying and systemizing the customer’s needs. We thereby cut costs

principles. These are self-motivation, self-management, and self-

and improved productivity while simplifying operations for the customer.

awareness. This spirit embraces challenges, takes responsibility, breaks

This system enabled us to sweep across the market and capture an

through barriers, and is vital for our people. I also believe that advanced

extremely high share. We have transformed our business throughskills and in-depth knowledge are essential to deliver high-level services

digitization. Embodying the spirit of the Three Selfs took me to the nextthat lead to customer solutions. Developing people who can do that is anlevel, and I want to give all Canon MJ Group employees more opportunities

important role for management.

to have such experiences.

Sustainable Management—ESG Initiatives

One experience that demonstrated that I had progressed was a

Segment Strategies

I was recently appointed president of the Canon Marketing Japan. Since

Reviewing Fiscal 2020
I will begin my review of the year by discussing the impact of the COVID-19
pandemic.

Canon Marketing Japan Inc. I Integrated Report 2020

printers (MFPs) and laser printers were off amid restricted sales activities.

In business-to-consumer (BtoC) markets, sales plunged amid

Maintenance services for office MFPs and laser printer cartridges, which

declining demand for digital cameras, as people refrained from travel orare key revenue sources, experienced large declines due to demand for

faced event cancelations that would have offered photo opportunities. On

printing in offices dwindling as people refrained from going out andthe upside, demand for inkjet printers and PC peripherals soared on

teleworking rose. These businesses account for a great proportion of net

increased working from home and studying at home.

sales, so these developments signiﬁcantly affected overall performance.

Canon Marketing Japan Inc. I Integrated Report 2020

Financial, ESG, and Corporate Data

9

In the business-to-business (BtoB) area, sales of office multifunction

10

Value Creation of the Canon MJ GroupA Message from the President

annually since ﬁscal 2015. They accounted for 37% of net sales in the year

margin reached 5.7%, a record high for the second consecutive year. This

under review, from 27% ﬁve years earlier. In addition, sales from the data

reﬂected a rise in sales of high-value-added products and better grosscenter business have increased around ﬁve-fold since ﬁscal 2015. That

Indicators for Long-Term Management Objectives 2025

Medium-Term Management Plan* 2023 targets

margins. We also beneﬁted from ongoing efforts to slash selling, general andsaid, IT solutions sales for the year were down 8% from ﬁscal 2019. This

• Net sales ¥650 billion• Net sales ¥600 billion

administrative expenses. Our performance commendably resulted fromwas because although IT product and security software revenues were(including ¥300 billion in IT solutions sales)(including ¥265 billion in IT solutions sales)

endeavors to bolster proﬁtability.

robust in keeping with teleworking expansion, demand that we had enjoyed• Operating proﬁt ¥50 billion• Operating proﬁt ¥40 billion

from the end of support for Windows 7 tapered off. We also experienced• ROE 8.0%

• Operating margin 6.7%

a growth driver. Sales of this business have grown approximately 10%

Management benchmarks and targets for Long-Term Management Objectives and Medium-Term Management Plan

Value Creation of the Canon MJ GroupWe have steadily expanded IT solutions, which we have positioned as

About the Canon MJ Group

Although revenues and earnings for the year were down, our operating• Proﬁt attributable to owners of parent ¥26.5 billion

postponements of large systems projects owing to the pandemic.

• ROE 6.9%

Long-Term Management Objectives and Medium-Term Management Plan
Under Long-Term Management Objectives Phase III, which covered ﬁscal

undertaking business activities that enable everyone to live well. Such

2016 through 2020, we transformed our business portfolio and positioned

thinking mirrors the SDGs and embodies sustainability management. We

the IT solutions business as a growth area. We lifted the proﬁtability ofare taking this opportunity to reaffirm our commitment to Kyosei as anand enhance skills, centered on IT solutions, while developing and

To transform business processes through digital technology, you have to

Canon products by streamlining our sales structure and focusing onunderpinning of our corporate activities.

promoting diverse leadership candidates across generations.

fully understand customers, their industries, and their operations. If we

We seek to become indispensable to society and our customers and

The Board of Directors has responded to the revision of the Corporate

administrative expenses to become more robust. We consequently posted

sustainably enhance corporate value by engaging initiatives that factor in

Governance Code by discussing ways to improve the effectiveness of that

our record operating margin in ﬁscal 2020, the ﬁnal year of that phase.

society and the environment. We set up our Sustainability Committee inbody, segregate management oversight and implementation, and review

From ﬁscal 2018, we switched from a product-based organizational

2021 to act more effectively. By combining Canon products and IT solutions

the business portfolio.

framework to a market- and customer-centric one, creating the foundations

businesses, we will expand areas in which we can deliver solutions tofor better employee understanding of how we should operate and use

social issues and pursue sustainability management with all Group

Long-Term Management Objectives:close to a digitization effort. Digitalization is about creating newGroup resources.

employees taking part to become indispensable to society.

2025 Vision and Business Portfolio Transformation

markets. Co-creation is vital because you even have to factor in the

Our vision for 2025, the ﬁnal year of Long-Term Management Objectives, iscustomers of your customers. DX through digitalization is an area incannot build co-creation structures with customers, we cannot create
solutions that dominate markets.
DX encompasses digitization and digitalization. Digitization isabout digitizing business processes themselves to improve efficiency
and reduce costs. The episode I described earlier in this message was

SDG and ESG Initiatives

to become a professional corporate group that resolves issues for society

which we can leverage the broad customer base that is one of ourbecame a stronger organization, setting the scene to formulate growth

We have made SDG and environmental, social, and governance (ESG)and customers by leveraging the power of information and communications

strengths. We have built trust with numerous customers, from large

strategies under new Long-Term Management Objectives and a new

initiatives top priorities as part of our commitment to sustainability

technology (ICT) and people.

corporations to small-to-medium-sized enterprises. That is themedium-term management plan.

management.

An outline of our basic strategy is on pages 23-24. Here, I would like tofoundation on which we can co-create and provide value.

explain the IT solutions and Canon products businesses and the creation of

When customers proceed with DX, it is extremely important for themManaging Sustainability and Realizing Kyosei

ways to decarbonize the economy. One speciﬁc effort is our participation in

new businesses through a business portfolio shift. We will transform into a

to select partners that deeply understand their businesses. By matching

Sustainable Development Goal (SDG) initiatives represent concerted

the Tokyo metropolitan government’s zero emissions program. We are also

corporate group focusing on the IT solutions business and will continue tothat requirement, we want to be the entity that customers approach ﬁrst toefforts to build an inclusive, sustainable, and resilient future for humankind

endeavoring to enhance the power usage efficiency of our data centers,

review and optimize our business portfolio to deliver sustainable growth.

secure solutions to their issues. We will accordingly focus on IT solutions

and our planet and offer companies an opportunity to rethink why they

and are considering the use of renewables to help streamline their

exist. We began formulating our Long-Term Management Objectives by

operations. We are developing solutions that use demand forecasting anddiscussing the Canon Group’s Kyosei corporate philosophy. Kyosei is about

supply and demand planning systems to cut food losses.

Canon Marketing Japan Inc. I Integrated Report 2020

Financial, ESG, and Corporate Data

On the environmental front, our Sustainability Committee is assessing

Our social initiatives entail efforts to increase employee engagement

Sustainable Management—ESG Initiatives

Objectives Phase III, while the proﬁtability of Canon products improved. We

realizing an economy that harmonizes people, society, and nature andSegment Strategies

high-value-added models. We also strove to lower selling, general and

The IT solutions business grew under Long-Term Management

11* The Medium-Term Management plan employs the basic strategies of Long-Term Management Objectives and is an action plan to realize the 2025 Vision and management indicators. Please see the overview on
pages 25-26.

and thoroughly explore co-creation with our customers.

Accelerating IT Solutions Business Growth
We believe that one of our missions is to accelerate our IT solutions

Human Resources Strategy for Our IT Solutions Businessbusiness and assist customers with their digital transformation (DX) plans.

We will step up mid-career hiring of project managers who can help

Canon Marketing Japan Inc. I Integrated Report 2020

12

Value Creation of the Canon MJ GroupA Message from the President

which we have started doing business through IT solutions. We will

to use big data.

endeavor to differentiate ourselves by drawing on our unique synergies,

About the Canon MJ Groupsecure large projects and data scientists and other highly skilled people

bringing together our technical capabilities in systems integration withalliances with systems partners. We will also simultaneously strengthen

Canon products that work well with the systems we build. At the sameinternal human resources development. We are undertaking measures totime, we will enhance proﬁtability by improving efficiency and cultivating

Investment Strategy under Medium-Term Management Plan

We will focus on capital efficiency and proﬁtability in our decision-increase the number of people with Amazon Web Services and Microsoft

Canon products as a Group revenue source.

Over three years from ﬁscal 2021, we will allocate approximately ¥100

making. We also consider it necessary to maintain certain cash reservebillion to strategic business investments for acquisitions and data

levels to ensure business continuity because it is unclear when thecenter construction and in systems and human resources to drive

pandemic will abate.

Azure certiﬁcations holders. As well, we have expanded training programs

Creating New Businesses

for data scientists and for agile and cloud computing. We are focusing on

business growth.

strengthening our ability to propose cloud computing as the basis for DX in

We will seek new business areas based on our IT solutions and Canon

entering 2021. We have launched initiatives to train business co-creation

products operations to create new businesses. These would include

We envision acquiring companies with the expertise we need in IT

specialists who envision and materialize the transformations of customer

customer services based on our internal practices, such as to reform

solutions. We are considering the construction of a third data center

Our basic shareholder returns policy is to pay dividends based on abusinesses and operations.

work practices through internal DX and services that resolve issues that

because we expect data volumes to increase as 5G becomes ubiquitousconsolidated dividend payout ratio of 30%. We comprehensively take into

become more apparent to us as our understanding of operations inand cashless payments expand, increasing the need to store such dataaccount our medium-term earnings outlook, investment plans, cash ﬂows,

customer segments deepens. We aim to establish new businesses insafely and securely.

and other factors. Cash dividends for ﬁscal 2020 were ¥60 per share,

Improving Proﬁtability of Canon Products Business

Value Creation of the Canon MJ GroupWe will obtain the systems engineers we need through businessareas in which we can help resolve problems by leveraging GroupAs mentioned earlier, for our IT solutions business we hire

generate earnings by reinforcing our strategy to offer high-value-added

strengths. We will not limit ourselves to existing areas. We believe thatproject managers midcareer while training existing employees todevices linked to our IT solutions business. We will also offer Canon

collaborating with companies outside the Group and acquisitions will

improve their skills.

products as data accumulation and collection devices to customers withenable us to reach our goals.

unchanged from a year earlier. The dividend payout ratio for ﬁscal 2020

Segment Strategies

Canon products are a key revenue source for the Group. We will endeavor to

Shareholder Returns

was 35.4%, and has exceeded 35% since ﬁscal 2015.

In Closing

Support for digitizing paper
documents and video
Document solution
Video solution

Data storage
Using the Nishi-Tokyo
Data Center

IT devices

Systems construction
Services creation

Analysis results visualization,
usage, and output

Analysis throughmathematical and demand
forecasting technologies

Help resolve issues for society andcustomers by co-creation withcustomers

Software of other companies

Input devices

Development (AI and low-code development)

Outlook for Fiscal 2021

To Our Stakeholders

In the Consumers segment, we expect a slight pickup in overall camera

We would like to become the port of ﬁrst call for all stakeholders as anunit sales in view of sales of last ﬁscal year plunging and because demandorganization they can count on. We will accordingly strive to resolve social

remains solid for EOS R5 and EOS R6 mirrorless cameras launched in ﬁscal

issues through IT solutions and enhance corporate value. We have2020. We based our projections for inkjet printers on the assumption that

established our direction and measures through 2025 and 2023 based on

demand will not rise as signiﬁcantly as in ﬁscal 2020.

our Long-Term Management Objectives and Medium-Term Management

In the Enterprise segment, we accord particular attention toPlan. Speed will be the key to success. It is important for each employee tochanges in document volumes for the office MFPs of large corporations.

act decisively to achieve our vision. I will do my utmost to foster such a

The pandemic hit these volumes the hardest in ﬁscal 2020. We do not

dynamic corporate culture.

the situation is like that of April and May 2020, when Japan’s state ofMaintenance and operations services

Business process outsourcing

Comprehensive maintenance and operations services for equipment and IT

Financial, ESG, and Corporate Data

expect a signiﬁcant decrease in this segment in the year ahead unless

Total security

Sustainable Management—ESG Initiatives

Total support by combining Canon products and IT solutions businesses

I look forward to the ongoing support and encouragement of our
stakeholders in the year ahead.

emergency was in force.
In IT solutions, customers are asking us about new projects,
principally in the DX ﬁeld, and we are endeavoring to reach our objectives.

13

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202014

Value Creation of the Canon MJ Group

Milestones
later expanded beyond selling Canon cameras and business machines to offer PCs

The Canon MJ Group launchesLong-Term Management
Objectives Phase II (coveringﬁscal 2011 through 2015).

The key strategies were todominate the domestic market andestablish new businesses.

The key strategies were to expand
the market shares of Canon
products, diversify businesses,
create services businesses, andreform Group operations.

from other companies and systems integration (SI) services. Today, the GroupThe Canon MJ Group launches Long-Term Management
Objectives Phase III (covering ﬁscal 2016 through 2020).
The Company formulated its Group Mission and Group Vision
under this phase. The goals were to combine Canon’s robust
imaging technologies and the IT technologies that the Canon
MJ Group had accumulated over the years to expand theCompany’s business domains while collaborating withcustomers to help resolve social issues.

The Canon MJ Group launchesLong-Term Management Objectives(covering ﬁscal 2021 through 2025)
The Canon MJ Group aims to become a cadre of
professionals who draw on information andcommunications technology (ICT) and their talents
to help resolve social and customer issues.

About the Canon MJ GroupThe Canon MJ Group was established in 1968 to sell Canon’s business machines, and

The Canon Sales Group launchesLong-Term Management
Objectives Phase I (coveringﬁscal 2006 through 2010).

combines its IT capabilities, diverse products, and fine-tuned services to supply
solutions that support all areas of society.
2020
Value Creation of the Canon MJ GroupOperating margin

5.7%

Operating income¥31.3
billionNet sales¥545.1billionSegment Strategies

Expanded IT solutions business

Systems integration businesser companies
Selling PCs and servers of oth

1968

1970

1980

1990

2000

2010

2020

1968

1971

1981

1985

1990

2003

2008

2012

2020

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

Canon Business Machines Sales Inc., CanonBusiness Machine Services Inc., and Canon Camera
Sales Inc. merge to form Canon Sales Co., Inc.
Releases BP-1000 billing processor, enters officecomputer ﬁeld

The Company lists on theSecond Section of the Tokyo
Stock Exchange

Forms sales alliance with IBM Japan, Ltd., forworkstations and PCs• Becomes Ministry of International Trade andIndustry-certiﬁed systems integrator• Forms sales alliance with Sun Microsystems
Japan K.K.

Acquires SUMITOMO METAL System
Solutions Co., Ltd., renaming it CANONSYSTEM SOLUTIONS INC., thus fully
entering the IT solutions ﬁeld

Integrates CANON SYSTEM SOLUTIONS
INC. and Argo 21 Corporation to create
Canon IT Solutions Inc.

Nishi-Tokyo Data
Center begins services

Nishi-Tokyo Data
Center No. 2
completed

1969

1983

2006

2018

The Company lists on the First Section of the Tokyo Stock Exchange
Forms sales alliance with Apple Computer Inc.

Canon Sales Co., Inc. was renamed Canon Marketing Japan Inc.

The Company’s 50th
anniversary

Financial, ESG, and Corporate Data

Canon Camera Sales Inc.
establishedSustainable Management—ESG Initiatives

Digitizing Canon products

Selling cameras and business machines

2007
Acquires Argo 21 Corporation1975 Microsoft Corporation establishedIT
Milestones

1993 Internet usage spreads rapidly

1976 Apple Computer Inc. established1994 Yahoo! launched1983 Swift adoption of word processors and PCs

Canon Marketing Japan Inc. I Integrated Report 20202010 Smartphones become ubiquitous1995 Windows 95 released
1989 PC industry worth ¥1 trillion

15

2004 Facebook debuts

2014 Internet of Things (IoT) era emerges
1998 Google created

Canon Marketing Japan Inc. I Integrated Report 202016

Value Creation of the Canon MJ GroupWe are committed to resolving social issues through business, by expanding ﬁelds in which we can provide social solutions

Value Creation Process

About the Canon MJ Groupby combining our Canon products and IT solutions businesses.

KyoseiCanon Group Corporate Philosophy

Canon MJ Group 2025 Vision: Professional corporate group that solves social and customer issues using ICT and the power of humans
OutputValue Creation Domain

Business activities¥203.1 billion
Individuals

Edge solutions sales• Improving lifestyles through photography andvideography• Enhancing visual expressivity¥18.0 billion

Security solutions sales• Providing systems supporting ﬁnance,
manufacturing, logistics, and other sectors• Realizing DX through co-creation with customers• Total support for the IT environments of small-tomedium-sized enterprises• Attaining business efficiency and quality throughbusiness process outsourcing• Providing total office solutions

IT provider

Customer baseTechnical capabilities

Financial structure• High-quality Canon products• Customer trust from years ofbusiness• From large corporations tosmall-to-medium-sizedenterprises• Consumers• Customers in specialist ﬁelds• Business partners• 4,000 systems engineers• Nationwide network of service
engineers• Robust ﬁnancial base• High equity ratio

Inputs (reinvested in capital)

Productivity improvements

Safe and secure society

Specialist ﬁelds• Expanding business potential with advanced
digital printing• Imports, sales, and support for cutting-edge
equipment for semiconductor sector• Providing solutions to improve operational
efficiency of hospitals, clinics, pharmacies,
medical centers, and other facilities

Photography class EOS Gakuen

Operating for 30 years(educating a total of 200,000 students)
Contributions to reductions
in customer CO2 emissions

120,320t-CO2

Continue to expand ourvalue-creating domain andengage with morecustomers to sustainably
improve corporate value

Financial, ESG, and Corporate Data

Canon Marketing Japan Inc. I Integrated Report 2020

6.6%
(Fiscal 2025 target: 8.0%)(Fiscal 2023 target: ¥26.5 billion)

Brand

Please see page 21 foran explanation of capital.

Workplace reforms

ROE¥22.0 billion
Canon MJ Group Strengths

17¥13.5 billion

Proﬁt attributable to ownersof parent

Financial Capital

Natural Capital

IT and business process
outsourcing-related sales

Sustainable Management—ESG Initiatives

Systems integrator

Food losses¥28.0 billion
Industries, business, and offices

IT solutions businessWhite logistics

HOME, IT maintenance, andoperations contracts

110,000

Staying close
to customers

Manufacturing Capital

Trading company function

Enhancing lives through visual culture(2025 target: ¥300 billion)

Uniquesolutions
Canon products business

The value we
provide to society
in 2025

Segment Strategies

Social andcustomerissuesSmall-to-medium-sized enterprises

Intellectual Capital

IT solutions sales

Professional Customers in specialist ﬁelds

Area

Large corporations, quasi-major andupper medium-sized enterprises

Deepunderstandingof customers

Individual customers

Social CapitalEnterprise

Consumers

Human Capital

Outcomes
Value created

Value Creation of the Canon MJ Group

Input
Capital components ofcorporate value

From page 27, we describe strategies
for each business segment.

Canon Marketing Japan Inc. I Integrated Report 202018

Value Creation of the Canon MJ Groupafter delivering products andservices with extensive support
system of 193 service sites
nationwide and online support

Staying close
to customers
Value Creation of the Canon MJ Groupexperienced people provide

Staying close to customers even
About the Canon MJ Groupcustomers, knowledgeable andDeepunderstanding ofcustomers

Professional Customers in specialist ﬁelds

With deep understanding of

Small-to-medium-sized enterprises

issues with a customer-centric approach.

Large corporations, quasi-major andupper medium-sized enterprises

Individual customers

to sustainable social and economic progress by helping resolve customerArea

We aim to become essential to society and customers and contributeEnterprise

Consumers

Business Activities

optimal solutions

UniquesolutionsSocial andcustomer issues

Contributing to value-creation through a servicebased business* model comprised of uniquesolutions for domains, industries and*Service-based business model is a business model in which we can highlight added value anddeliver ongoing services to customers• Large corporations: In-house-developed cloud services for speciﬁc sectors and operations, data centers, and forbusiness process and IT outsourcing• Small-to-medium-sized enterprises: Including services providing total support for customer IT environments

Canon products business

Segment Strategies

technologies in which we have strengths

The value
we provide to society

IT solutions business
Systems integrator

IT provider

Procuring products and solutions that meet customer needs, including as exclusive
distributor in Japan for Canon products* and serving as exclusive distributor inJapan for ESET antivirus software and semiconductor-related equipment

Supplying optimal systems by fully understanding issues that are common acrossindustries, business sectors, and operations, as well as customer-speciﬁc issues,
drawing on previous systems development and proprietary technologies

Providing solutions to resolve customer issues and full support from implementation
through maintenance and operations

Sustainable Management—ESG Initiatives

Trading company function* Excluding semiconductor exposure equipment, LCD substrate exposure equipment, and medical devices

Canon MJ Group Strengths
Customer Base

Technical Capabilities

Financial Structure

Customer trust amassed through years of business

From large corporations to small-to-medium-sized enterprises

Robust ﬁnancial baseSince our establishment as Canon’s sales division, we have remained theOver more than 50 years, we have built robust relationships with numerous

4,000 systems engineers and a nationwide networkof service engineers

We have long maintained an equity ratio of 50% to 60%, and have built a

exclusive distributor in Japan of Canon brand products (excluding

customers in selling Canon products. As the world of business has

We have accumulated technology by acquiring companies with advanced

strong and sound ﬁnancial position that is essential for sustainable growth.

semiconductor exposure equipment, LCD substrate exposure equipment, anddiversified, so too have customer needs. We leverage customer trust and ourtechnological capabilities and by developing advanced technologies. We

We can therefore continue operating stably even in the face of such

medical devices), including cameras, inkjet printers, multifunction printersachievements to provide optimal products and solutions for all of ourprovide such IT solutions as systems development and cloud and data center

unprecedented crises as the COVID-19 pandemic. At the same time, we(MFPs), and laser printers that Canon manufactures, and have consistently

customers, from large corporations to small-to-medium-sized enterprises.

services by drawing on state-of-the-art development expertise based on ourprioritize capital efficiency and strive to improve our return on equity (ROE).

secured high market shares. We also provide maintenance and support services.

Financial, ESG, and Corporate Data

Brand

profound business and industry insights.

The Corporate DNA of the Canon Group: Enterprising nature
Our corporate culture continues to take on challenges by encouraging businesses to evolve and change to meet the needs of society and customers

19

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202020

Value Creation of the Canon MJ GroupThe Capital Components of Corporate Value
through M&As, and in people, which are our most valuable resource.
We will thereby create a virtuous cycle in which businesses become even stronger and we become more
proﬁtable and reinvest in further growth, contributing to sustainably expanding corporate value.
(Performance results ﬁgures are for ﬁscal 2020)

R&D capabilities for visionary, unique solutions

Intellectual property rights activities

We conduct R&D in low-code development, which has attracted
considerable attention in recent years. We have supplied Web Performer
since 2005. This product incorporates an automated Java application
generation technology (Patent No. 4988226) that received an
encouragement prize in the 2020 Kanto Regional Invention Awards.

The intellectual capital that our R&D generates is an important corporate
asset, so we secure the relevant patents and other intellectual property
rights. In 2020, we published 152 patent applications and 146 patents.
Security-related, automatic web application generation, video and imagerelated, and mathematical technologies are key strengths and representroughly 30% of our patents.

Manufacturing Capital

We will hire and train people with a wealth of knowledge and experience in products and IT to propose and provide optimal
solutions at every customer contact point.

Our infrastructure enjoys high regard for delivering high-quality products and services, and is the foundation for value creation.

Fostering diversity• We have approximately 4,000 systems engineers and highly specialized
technicians and customer engineers providing sales and implementation
support, training them as needed.
• We recruit talented people. Mid-career hires accounted for 12.4% of
new employees in ﬁscal 2020, up 0.5% from a year earlier.
• We implemented the IT Skills Improvement Program for all Group
employees. We also help employees, including those in back office jobs, toacquire IT passports. By April 2021, a total of 3,791 employees had
obtained IT passport certiﬁcation, thus improving IT groupwide knowledge.

• We encourage efficient work practices during prescribed hours andenable employees to balance work with childcare and nursing care. As aresult, 146 employees, including 26 men, took childcare leave in ﬁscal
2020. The rate for returning to work was 95.6%, including 100% formen. We strive to empower women, who held 10.4% of managerial
positions in ﬁscal 2020, up 1.0% from the year before.
• Canon Marketing Japan and Canon IT Solutions had received Platinum
Kurumin certiﬁcation as of June 2021.

With HOME, a safe and secure IT support cloud service for small-tomedium-sized enterprises, we have provided IT maintenance andoperations for roughly 110,000 customers.

Canon Marketing Japan Inc. I Integrated Report 2020

Providing various products and services through our trading
company capabilities• In the Canon products business, we transform customer feedback into
high-value-added information that we send on to Canon Inc.
• We have supported the semiconductor industry by improving our
performance as an exclusive distributor in Japan, swiftly identifying
outstanding equipment from overseas companies.
• As well as importing and selling products from abroad, we have helped
improve customer satisfaction by conveying the views of customers in
the Japanese market and localizing offerings. We have accordingly
ranked No. 1 in customer satisfaction surveys for security products foreight consecutive years.

Establishing a stronger ﬁnancial baseStable shareholder returns

Despite lower sales and profits, our operating margin reached a record
5.7% for the second consecutive year in ﬁscal 2020. This reﬂected higher
sales of high-value-added products, improved gross margins, andextensive efforts to cut selling, general and administrative expenses. The
equity ratio thus rose 3.8% from a year earlier, to 68.2%, laying thefoundation for investing under a medium-term management plan startingin 2021.

Our basic policy is to pay dividends based on a consolidated payout ratioof 30%. We take into account such factors as our medium-term earnings
outlook, investment plans, and cash ﬂow. For ﬁscal 2020, we maintained
stable dividends under a payout ratio of 35.4%. The ratio thus exceeded
35% for the sixth consecutive year.

Natural Capital
We will contribute to a decarbonized economy by providing products and services that lower environmental impact and use
resources and energy effectively.

Decarbonization activities• We have endeavored to reduce energy consumption. In the year underreview, we lowered GHG emissions per unit of production by 4.0% fromﬁscal 2019.
• We strive to contribute to the environment by donating credits to theTokyo metropolitan government, and obtained certiﬁcation for the Nishi-

Financial, ESG, and Corporate Data

Providing safe, secure, and high-value-added IT services todiverse customers

Financial Capital

Sustainable Management—ESG Initiatives• We have continued to provide better products to become a favoredcompany for many customers. We have thus secured No. 1 shares in thedomestic market for such products as interchangeable lens digital
cameras, inkjet printers, and laser printers.
• We maintain contacts with customers through nationwide service sites
and partnerships. We also build relationships as an IT partner forcustomers by providing DX support with local business partners.

We completed construction of the Nishi-Tokyo Data Center Phase II, which
received recognition as a Tier 4 level high-performance facility and the
M&O Stamp of Approval for meeting global standards and complying withthe guidelines of Japan’s Center for Financial Information Systems. We
conduct systems failure and other drills, incurring no major malfunctions,in upholding high safety standards.

While building a solid financial position, we endeavor to generate growth and returns through surplus funds that enable
ﬂexible investments.

We have built our customer base over the years by selling and servicing Canon products, forging strong relationships withpartner companies, and acquiring exclusive domestic distribution rights for the offerings of overseas companies. Therefore, we
are able to continuously create value.

Expanding our customer base

Providing high-quality facilities and value-added services

Canon System & Support Inc., Canon IT Solutions Inc. and Canon
Production Printing Systems Inc. have acquired ISO 9001 certification.
This is an international standard for customer satisfaction and ongoing
improvement of quality management systems through product andservices quality assurance.

Segment Strategies

Expanding the IT solutions business

Quality management

Value Creation of the Canon MJ Group

Human CapitalSocial Capital21

We have among the most patents in our industry. We patent the solutions technologies and supporting techniques that we havecreated through R&D. This enables us to provide superior customer solutions that differentiate us from the competition.

About the Canon MJ GroupWe will use proﬁts from Canon products and IT solutions to invest in strengthening our businesses, includingIntellectual CapitalTokyo Data Center as a quasi-top-level business office.
• We offset emissions by 6,355 metric tons from MFPs we sold.

Circular economy initiatives
We collect and recycle office equipment, ink, toner cartridges, and otherused products. In ﬁscal 2020, we collected and processed 12,015 metrictons of these items, recycling 99.9% of them.

Canon Marketing Japan Inc. I Integrated Report 202022

Value Creation of the Canon MJ Group

Toward 2025 and Beyond

We formulated Long-Term Management Objectives (2021-2025) to guide management efforts to increase
corporate value sustainably. We aim to realize our Kyosei corporate philosophy and 2025 Vision to become aContinuing to Review and Optimize Business Portfolio for Sustainable Growth
The Canon MJ Group will continue these efforts by transitioning its business portfolio to focus on IT solutions.
IT solutions business

Growth potential

highly proﬁtable corporate group by steadily implementing our basic strategies.

• Expand service business model with IT solutions business as core of growth• Document solutions is part of IT solutions business, whose growth will
facilitate expansion for the Canon product businessIT solution
business

KyoseiContributing to global prosperity and the well-being of mankind

Canon products business• Reinforce strategy for these IT solutions business-linked devices• Generate proﬁts by thoroughly streamlining

Specialized areas andnew businesses

Specialized areas and new businesses
Canon productbusiness

Vision, Basic Strategies and Management Indicators

Value Creation of the Canon MJ Group

Corporate Philosophy

About the Canon MJ Group

Long-Term Management Objectives (2021-2025)• Expand the industrial equipment business• Explore ﬁelds to create new businesses that can be growth drivers

2025 Vision
Proﬁtability
Segment Strategies

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

Keep pursuing selection and concentration

Basic Strategies

1. Sustainably increase corporate value by resolving social issues through business

Investing in Growth to Enhance Corporate Value

2. Become a highly proﬁtable corporate group

The Canon MJ Group aims to become a highly profitable, value-creating corporate group by investing in businesses, humanresources, and systems to swiftly resolve social issues.

Reform businesses, placing IT solutions business at the center of growth

Increase added value and enhance proﬁtability with respect to the Canon products business

Sustainable Management—ESG Initiatives

Use customer base to improve sales structures for all customer segments

Sustainably enhance corporate value by resolving social issues through business3. Create a virtuous circle by improving management capital
Become a highly proﬁtable corporate group

Accelerate business growth by developing skilled human resources and increasing engagement
Accelerate business growth through strategic investments

Business investments(including acquisitions)

Systems investments

2025 Management Indicators¥50.0 billion

Net sales¥650.0 billion

Including IT solutions business sales
ROE¥300.0 billion
8.0%Canon productbusiness

Human resources investments(training)

IT solution
business

Brand

Technical capabilities

Customer BaseFinancial Structure

Financial, ESG, and Corporate Data

Operating income

Human resources investments(recruiting)Human
resources

23

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202024

Value Creation of the Canon MJ Group

Three-Year Management Plan (2021-2023)
About the Canon MJ Group

Based on the Long-Term Management Objectives (2021-2025), under the Medium-Term Management Plan

It Solutions Business Sales Targets (by product and solution)(2021-2023) we aim to expand earnings through such initiatives as contributing to value through a service-

The sales targets for the IT solutions business are ¥265 billion in ﬁscal 2023 and ¥300 billion in ﬁscal 2025. We will establish an
extremely proﬁtable IT solutions business by expanding our service-based business model while reinforcing maintenance andoperations services and outsourcing.

1

based business model* in the IT solutions business, our prime growth driver.
*1 This term refers to a business model under which we provide value-added customer services on an ongoing basis.

Three-Year Management Plan
2021 (Forecast)
2023 (Plan)

Net sales¥545.1 billion¥567.0 billion¥600.0 billion

Operating income¥31.3 billion¥34.0 billion¥40.0 billion

Operating margin

5.7%

6.0%

6.7%

¥22.0 billion¥23.5 billion¥26.5 billion

6.6%

6.7%

6.9%

Proﬁt attributable to owners of parent
ROE

300.0
Value Creation of the Canon MJ Group

Results
2020

265.0
209.4

82.7

CAGR 115.0+10.8%

37.2

40.7

50.0

101.3

103.1

100.0

2020

2021

2023

SI services

70.9
IT maintenance and operations services
and outsourcing

IT products / System sales

226.5

25%

2025

Segment Strategies

Contributing value through service-based business model

Targets(Billions of yen)Three-Year Management Plan

IT Solutions Business Development Direction by Customer Segment
Large corporations, quasi-major and upper medium-sized enterprises, and small-to-medium-sized enterprises have different
needs. In developing the IT solutions business, we will cultivate businesses that match the needs of speciﬁc customer segments.
We will also create and strengthen our service-based business model and strive to sustainably expand earnings.

Co-create with customers to build DX business

Edge solutions*2 focusing on areas, industries, and technologies inwhich Canon MJ is strong*2 Edge solutions are solutions that focus on areas,industries, and technologies where Canon MJ has
competitive strengths.

Provide full support by maintaining relationships with customers

25

Area

Small-to-mediumsized enterprises

Canon Marketing Japan Inc. I Integrated Report 2020

Ongoing relationships with customers through service offices across Japanand partnerships
Number of HOME and IT maintenanceand operations services contracts
2020
2023
Approx.
Approx.
110,000
160,000

Operatingcash ﬂow

Shareholder
returns

Business
investments• Investments in focus areas• Data center and other construction• Investments and M&As

Growthinvestments

Systems
investments• Revamp enterprise systems• Improve productivity of existing
businesses through internal DX

CashApprox. ¥100
billion overthree years• Train and promote people to become

Cash

Human resources
leaders
investments• Enhance employee expertise

Financial, ESG, and Corporate Data

Edge solutions sales
2020
2023
¥18 billion¥33 billion

Contributing value through service-based business modelEnterprise
Quasi-major andupper medium-sizedenterprises

Cultivate DX business by deeply understanding customers

Providing value-added services throughhigh-quality data centers

Large corporations

Support solutions for cybersecurity as well as physical security

Resolve social issues through co-creation based on deep understandingof business and the market with diverse customers

Business investments will reﬂect capital efficiency and proﬁtability goals. We will reinvest proﬁts from these investments ingrowth businesses.

Sustainable Management—ESG Initiatives

IT and BPO-related sales
2020
2023
¥13.5 billion ¥21.0 billion

Investment Strategy for Business Growth

Generate earnings and reinvest in growth businesses

Security sales
2020
2023
¥28.0 billion ¥38.0 billion
Canon Marketing Japan Inc. I Integrated Report 202026

Segment Strategies

Overview of Segment Business Strategies
Segment sales for ﬁscal 2020

Segment sales and operating income under Medium-Term Management Plan

(Billions of yen)Consumers Segment

Net sales

Operating income(Billions of yen)(Billions of yen)

128.1

117.5

124.7

We sell cameras—Canon Inc.’s founding business—

About the Canon MJ Group

Segments

inkjet printers, and IT products to consumers. We
10.0

10.0

2021
(Forecast)

2023(Plan)

Value Creation of the Canon MJ Group

contribute to more convenient and fulﬁlling lives
through our products and services.
2021(Forecast)(Billions of yen)

2023
(Plan)Net sales

Operating income(Billions of yen)(Billions of yen)Enterprise Segment

222.0
192.7

We provide Canon products and IT solutions to large
corporations as well as quasi-major and upper medium-

184.6

15.0

11.9

Segment Strategies

sized enterprises customers. We work with them to create
value and resolve speciﬁc industry issues.

2021(Forecast)(Billions of yen)

Area Segment

2023(Plan)

2021(Forecast)

2023(Plan)Net sales

Operating income(Billions of yen)(Billions of yen)

238.0

228.5

We provide Canon products and IT solutions to smallsupport them working on DX through the sales channels

Sustainable Management—ESG Initiatives

to-medium-sized enterprises nationwide. We will

223.7
14.5

11.7

of business partners, direct sales organizations, andsystem partners.
2021(Forecast)(Billions of yen)

30.7

Professional Segment
customers in production printing, industrial equipment,

2021(Forecast)

2023(Plan)Net sales

Operating income(Billions of yen)(Billions of yen)

42.5
Financial, ESG, and Corporate Data

We provide products, services, and solutions to2023(Plan)

34.7

and healthcare. We aim to expand sales of products andsolutions in respective specialist areas.
2021(Forecast)

2023(Plan)

2.4

4.0

2021
(Forecast)

2023(Plan)*From ﬁscal 2021, we transferred part of our organization engaging in direct sales to upper medium-sized and quasi-major enterprises in the Area segment to the Enterprise segment. We accordingly reclassiﬁed results for ﬁscal 2020.
Some ﬁgures therefore differ from those on page 3.

27

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202028

Segment Strategies
number of Canon brand devotees. We will accordingly launch a new

Consumers Segment
Senior Executive Officer

more robust while endeavoring to create new products

Director of Consumers Segment

and services for the years ahead.

photo communication site to maintain strong ties with consumers

Consumer purchasing patterns have diversified as their lifestyles

and enhance added value by providing a venue in which people canhave changed. We will augment mass retailers, camera stores, and otherimmerse themselves in our offerings.

sales channels by building our e-commerce presence while partnering

We will increase sales by broadening our lineup of in-trend non-About the Canon MJ Group

Koichi Mikami

We will make our existing camera and printer businesses

for online meetings and gaming PCs for e-sports.

with other companies to reach our targets for ﬁscal 2021.

Canon products and new services for consumers, including web cameras

Creating new businesses and services
ichikara Lab

The COVID-19 pandemic has enormously changed the business environment.

demand. We will provide printers that best match emerging demand andWe expect demand for digital cameras to recover from a year earlier,expand sales of models with large-capacity ink tanks, which havewhen the market shrank significantly because people refrained fromexperienced particular growth.

going out. That said, we do not expect major market expansion, as

Opportunities

movement restraints will likely continue.

• Expanded teleworking and online learning• More photo opportunities as people ease up on refraining from going out

accounting for a greater proportion of demand because people want to• More engagement with customers through social networking andtake more impressive photos. The EOS R5 and EOS R6 full-sized mirrorless

e-commerce expansion

models launched last year won acclaim for their functionality and for

Risks

enhancing photography. We will continue to supply products that deliver• Shrinking camera market as the result of a new wave of COVID-19 infections

outstanding value to customers.

Strengths

We established ichikara Lab in May 2020. This in-house start-up aims to strengthen marketingand product and services development for young consumers. This entity comprises a crossorganizational team of seven full-time employees and young personnel applied from within
the Company.
We initiated Wakamono Study, which explores insights that lies behind the trends,
values, purchase behaviors and lifestyles of young consumers by constantly discussing
on various themes and works with young people to consider products and services thatyoung people want.
Our ﬁrst offering from that initiative was iNSPiC PV-123 HELLO KITTY, which we released
ichikara Lab team members (above) and ichikara Lab space (below)

in November 2020.

New sites for engaging with consumers• Customer relationships owing to a dominant market share in cameras

a maturing camera market. We aim to increase new demand with products

and printers and contacts with customers ranging from electronics

In April 2021, we opened Canon Photo House Ginza and Canon Photo House Osaka sothat offer novel photography experiences, such as the iNSPiC REC camera

retailers through e-commerce and our showrooms and service centersconsumers could engage directly with us through photography.

and the PowerShot ZOOM.

• Logistics, sales channels, and marketing capabilities that enable us to

At these venues, customers can shoot with the latest cameras and other equipment,

provide non-Canon products to consumers nationwide

experience editing through printing workﬂows, and seek advice on creating the images• A compact organization that responds ﬂexibly to market swings

they want. These locations have sections that encourage people to broaden theirphotos. On the upside, teleworking and online learning has generated new

Sustainable Management—ESG Initiatives

We will provide new ways to enjoy photography and videography inamid decreases in print volumes at home for New Year’s cards andSegment Strategies

At the same time, high-priced full-frame sensor cameras are

The markets for inkjet printers and consumables have dwindled

Value Creation of the Canon MJ Group

Situation analysis

imagination by viewing outstanding photographic works, including by perusing
collections of books by famous photographers.
Canon Photo House communicates with consumers across Japan through online

Medium- and long-term vision and business strategy

seminars and events.
in May 2020 to develop new products and services for new customer

more convenient and interesting through its products and services,segments. We are reinforcing marketing to younger consumers.

Financial, ESG, and Corporate Data

The Consumer Business Unit’s mission is help make consumer lifestyles

Canon Photo House Ginza (above) and Canon Photo House Osaka (below)

including from the camera line with which Canon started out.
We will solidify our existing camera and printer businesses while
endeavoring to create tomorrow’s new products and services.
A good example of that stance is ichikara Lab, which we established

29

Canon Marketing Japan Inc. I Integrated Report 2020

In 2021, we will continue to sell high-value-added products.
These include the EOS R series of full-sized mirrorless cameras andinkjet printers with large-capacity ink tanks. We will strengthen
engagement online and physically with consumers to increase theCanon Marketing Japan Inc. I Integrated Report 202030

Segment Strategies

Enterprise Segment

Canon IT Solutions Inc.
About the Canon MJ Group

Positioning in the Canon MJ GroupThe mission of our Enterprise Business Unit is to become a true partner by collaborating with customers to create

Canon IT Solutions is an IT partner that helps customer businesses evolve. We prioritize being close to customers, cultivating advanced

and deliver value. We aim to earn market and industry recognition for our ability to solve problems and provide

technologies, and resolutely ﬁnishing tasks. We will leverage these qualities to undertake development for customers and help resolve social

solutions, with customers valuing us highly. Accumulating a deep understanding of customer operations will

issues with them. We will also play a leading role in the Canon MJ

Akira Kanazawa
azawa

enable us to provide differentiated service-based solutions by drawing on our customer base and the sales

Group’s Long-Term Management Objectives target of ¥300 billion in

Representative Director
rectorcapabilities of our MA Headquarters and GB Solution Headquarters. We will endeavor to significantly expand our

President and Chief Executive Officer

IT solutions business sales by 2025.

Canon IT Solutions
ns Inc.
Value Creation of the Canon MJ GroupIT solutions business.
Situation assessment

MA Headquarters

GB Solution Headquarters

Hiroyuki Matsumoto

Koji Ishiwata

Senior Executive Officer

Executive Officer

Group Executive of MA Headquarters

Group Executive of GB Solution
Headquarters

Enterprise Business UnitEnterprise Business Unit

We will cultivate our DX business by thoroughly understanding

customers.

our customers.

decisions owing to the impact of the COVID-19 pandemic. IT

Risks

investments are recovering among companies in the manufacturing• Remaining able to adapt rapidly to new technological areas

and other sectors. Although it is unclear when the pandemic will

• Constantly reviewing our business and human resources

abate, customers still need to invest in IT to expand business. We

portfolios to adapt to new management and business trends

consider it essential to divine customer intentions and steadily

Strengths

expand opportunities to supply new value.

• Ability to resolve customer issues by employing systems

Opportunities

development experience• Corporate DX momentum and growing need for IT to offset labor• R&D capabilities that lead to business, such as mathematicalshortages

technologies and natural language processing• More opportunities to use IT in SDG initiatives, one example• Project management skills that enhance entire customer IT life

As economies overall become increasingly digital and online, corporate

In January 2021, we reorganized to strengthen our direct sales structure

being such advanced mathematical technologies as demandcycles, from systems development and infrastructure

customers will likely increase IT investments, leading to an expansion offor quasi-major and upper medium-sized enterprises.

forecasting and logistics optimization to help reduce food losses

construction through operations• Growing demand for high-level data centers that can securely• High-quality IT infrastructure and advanced operational

store and use massive and increasing data volumes owing to thecapabilities, which the Nishi-Tokyo Data Center exempliﬁes

businesses in the DX ﬁeld.

We expect that customer DX needs in offices will be in full swing
from 2023, when work practice reforms and other measures will haveup efforts to seek new ways of working in digital, online environments.

passed a peak. We will draw on synergies with Canon IT Solutions to

We will focus on analyzing customer business issues from sophisticatedemploy our comprehensive proposal and support capabilities and provide

perspectives and offer IT solutions including with Canon products andvalue-added solutions that help customers grow.
We will strive to expand the market share of Canon products and lift

growth of cloud computing and e-commerce and a rising need

Medium- and long-term vision and business strategy
Our long-term vision is to be a co-creator that paves the way towardbusiness strategies.

tomorrow with advanced ICT and enthusiastic employees. We want to

In January 2021, we signiﬁcantly changed our organizational

continue exploring ideas with customers and create business withstructure so we could become closer than ever to customers.

them to build a new future for society and customers by reﬁning ourUnder the new structure, in ﬁscal 2021 we will focus on serving

technology and motivating our employees.

customers resuming and expanding investment activities,

sales of the IT solutions business by providing services covering

source in the years ahead, we will create core solutions by drawing on our

everything from proposals through maintenance, combining Canon

strengths in image, video, document imaging, and other technologies. We

products and IT solutions. We will create solutions for quasi-major andWe will accordingly expand our ICT services to resolve issues

especially in manufacturing, as a key focus in implementing ourwill expand our IT solutions business significantly and make it more

upper medium-sized enterprises to match their investment scales andthat are common to industries, sectors, and operations and engage instrategy. For manufacturers, we offer diverse expertise inprofitable by drawing on synergies between our sales capabilities,

will launch a services model. In addition, we will take on a range ofconsulting to consider ideas with customers and create businesses

embedded software development, computer-aided design, productthrough which we fully understand customers and industries and canchallenges as we grow and expand, building a new sales approach forwith them. Another management priority is to transform businesses

life cycle management, mixed reality, and other engineering

into services to provide ongoing customer value.

solution products. We also have expertise in production

approach various customer departments to formulate and execute

Canon MJ to trigger Groupwide growth.

In managing our businesses, we emphasize key performance

strategies, and the Canon IT Solutions Group, which has technological andindicators and use PDCA cycles to check progress. Executives

developmental strengths.

always share progress with each other in implementing their

Financial, ESG, and Corporate Data

In the IT solutions business, which will become a key revenue

Canon Marketing Japan Inc. I Integrated Report 2020

Sustainable Management—ESG Initiatives

Large corporations that are the MA Division’s customers are stepping

business process outsourcing.

31

for data usage in a data-driven economy

Segment Strategies

We will push forward with our DX business by co-creating with

In 2020, most companies commonly postponed investment

management and demand forecasting. We will return to growth bycomprehensively employing these resources.

Canon Marketing Japan Inc. I Integrated Report 202032

Segment Strategies

Area Segment

Canon System & Support Inc.

Japan by fully leveraging our diverse business and system

Positioning in the Canon MJ Group

Senior Executive Officer

Canon System & Support is our direct sales channel for

Takeshi Hiraga
raga

Director of Area Segment

small-to-medium-sized enterprises in Japan. It provides

Representative Director
ector

sales, service, and maintenance for IT solutions andPresident and Chief Executive Offi
fficerpartners and direct sales channels.

About the Canon MJ Group

Yasuyuki Uotani

We will support DX for small-to-medium-sized enterprises inCanon System & Supportt Inc.

Canon products.

In a shifting business environment, small-to-medium-sized enterprises

Opportunities

will likely make steady progress in digitizing processes to tackle change• Small-to-medium-sized enterprise IT investment will probably rise

The COVID-19 pandemic has transformed how people work, making

Opportunities

and increase corporate value. Japan has more than three million of these• Firms lack specialist IT managers, and managers seek consultants

small-to-medium-sized enterprises increasingly aware of the need

• The attitudes of small-to-medium-sized enterprise managers

enterprises. Overall prospects for IT investments are high, with extensive

Risks

to improve productivity through IT. In practice, however, thosetoward IT investment have changed for the better as a result ofspending continuing in such areas as security. On the downside, many

• The pandemic and other factors are causing customer investment

entities often find it hard to themselves choose, implement,

the pandemic

operate, and maintain IT infrastructure, security measures,• Small-to-medium-sized enterprises need support to develop andcompanies do not know what to invest in because they have no in-housepriorities to ﬂuctuate

telework programs to enhance productivity, and cloud computing

maintain IT environments

IT experts and are unsure where to get advice from.

Strengths

setups.

Strengths

Canon System & Support helps small-to-medium-sized• Our nationwide network enables us to assist with the evolutions

channels, and we are always ready to serve. By sharing issues and• Systems partner channel to develop businesses linked to enterprise andenterprises evolve through IT by providing total services thatthrough IT of small-to-medium-sized enterprises across Japan

collaborating to develop and deliver IT solutions, we can build ongoingother systems

relationships with customers as their partner in this ﬁeld. Our challenge• Key Canon product lines that enjoy high market shares and security

is to create a framework to offer total IT solutions support, including

products and our ability to formulate comprehensive proposals withmaintenance. We are focusing on creating a structure so that we canthose offerings

deliver one-stop customer support with our channels.

• Channel synergies, notably by using Canon System & Support’s best

propositions in addition to printing to small-to-medium-sized enterprises
nationwide, having built that customer base mainly through document
solutions. We aim to offer total support to put them on track for DX.

• We can leverage our direct sales organization strengths to share
best practices and quickly deploy them among customers

Medium- and long-term vision and business strategy
While companies increasingly recognize the importance of IT,

Canon System & Support aims to keep evolving so that it

many worry that they do not know what systems to install orpresents and deploys suitable customer solutions in a fast-

how to use them or handle issues. Installing IT equipment is thechanging IT market. We want customers to focus valuable

start of a process rather than the end. It is important to update

resources on core businesses by entrusting us to handle entire IT

and add functions to resolve problems and check and act on

selection, implementation, operations, and maintenance processes.

their management issues and formulating the proposals they need to

failure causes. Experts are vital for these processes. It is

At the same time, we want to help customers resolve

achieve their business goals.

challenging for many customers that are not large corporations

management issues and thereby build robust relationships withto hire the requisite full-time people, and to educate existing

managements so they seek out our advice first on operational

employees who are not IT experts.

issues.

Over the medium and long terms, we will keep supporting thedevelopment of channels and human resources underlying this businessapproach. We believe that expanding customer contacts through physicalcustomers, increasing our regional and customer business share andand online efforts to stay connected with customers, producing solutionstransforming our operational portfolio, centered on IT solutions.

offering new value by integrating documents and IT, and making a plan

We will accordingly create a business approach that enables us tofor each partner in the channel to cultivate people to implement solutions

constantly secure business by solidly understanding customers,

will allow us to increase our business share in DX for small-to-medium-collaborating with them to consider the evolutions of their setups andsized enterprises.

Financial, ESG, and Corporate Data

We will use expertise from these endeavors to attract new

Canon Marketing Japan Inc. I Integrated Report 2020

that support local communities

maintenance.

Sustainable Management—ESG Initiatives

We will provide IT solutions, including maintenance services, as new value

extend from IT selection to implementation, operations, andSegment Strategies• Community-based business partner channels serving prominent local ﬁrms

Medium- and long-term vision and business strategy

33

Situation analysis

We have a nationwide customer base that we have built with ourpractices in direct sales

Value Creation of the Canon MJ Group

Situation analysis

Canon Marketing Japan Inc. I Integrated Report 202034

Segment Strategies

Professional Segment

Takashi Izaki
Representative Director
President and Chief Executive Officer
Canon Production Printing Systems Inc.

provide point-of-purchase systems for retailers and large-format drawing
output systems for manufacturers.

It is against this market backdrop that Canon ITS Medical will help

time, data printing service volumes for payment slips and notices fromsemiconductors will probably boost investments in such devices,

realize a society that delivers health to all. This will be accomplished by

local governments have remained stable, constraining print volume drops.

particularly power semiconductors.

introducing medical IT centered on electronic medical records and by

In document services, the pandemic prompted companies to adopt

We will continue to strengthen customer and product diversity andpaperless processes, with print volumes falling amid increased

become more robust to adapt to market environment changes. At the

teleworking. We will nevertheless continue to develop new sites andsame time, we will deploy a services sales growth strategy.

For the logistics and retailing sectors, digitization is progressing

We will reinforce our presence in non-semiconductor markets by
beeﬁng up our component OEM business and measuring instrument lineup.

gradually for various reasons, including such factors as population aging
and labor shortages. We will help drive digital transformations in those
sectors by providing new solutions for point-of-purchase systems.

By combining the systems of Canon Production Printing (called Océ
through the end of 2019) with proprietary software technology, we canenjoy growth.

Industrial Equipment

combine the strengths of the Canon Group to provide customer solutions
and add high value to customer businesses.

Division Manager of Industrial Equipment
Professional Business Unit

Medium- and long-term goals• Originality: A dedicated product development team within our business

community healthcare institutions to curb these social security costs byunit uncovers the world’s best products based on market needs andfostering home medical care and reducing medical care duplication.
Medical professional shortages have prompted advocacy for work

• Experienced support: Offering ﬁeld support for an array of domestic andpractice reforms, fueling operational efficiency and work environment

overseas products requiring advanced technologies

improvements within hospitals through the use of IT.

• Diverse product line: Providing total solutions, including process
improvements

Canon ITS Medical will contribute to medical and nursing care DX bypresenting IT solutions centered on electronic records underpinning
medical information connections.

Healthcare

customers not just in form printing but also in commercial and industrial

In industrial equipment, we sell semiconductor manufacturing-related

printing. Our mission is to offer customer solutions, and we seek toand inspection and measurement equipment, primarily to semiconductor

acquire new customers in point-of-purchase systems, large-format

manufacturers. We also supply components and optical measuring

printers, and document services to become No. 1 in our industry.

instruments to the automotive, semiconductor, and LCD sectors andPresident

provide maintenance services.

Canon ITS Medical Inc.

Strengths
Yoshinobu Kuroi
Representative Director• A proven record in introducing IT to hospitals, clinics, pharmacies,
medical centers, and other facilities to streamline efficiency, with• The cloud-based Medical Image Place service offers advanced security that

Canon MJ has a new business development division and trading

By 2025, we aim to be a solutions company that can generate earnings

company capabilities, importing, selling, and supporting equipment from

Canon ITS Medical is the driver for Canon MJ’s medical IT solutions

complies with the guidelines of three ministries; we are developing new

profits by creating new subscription businesses through combining

abroad that meets customer needs, helping to improve Japan’sbusiness for the medical and healthcare sectors.

businesses by taking advantage of medical IT systems shifting to the cloud

existing and new operations. We will accordingly concentrate our people,

manufacturing productivity.

change our sales approach to propose solutions by more extensively• Strengthen sales of in-house products and export offerings

Canon ITS Medical’s diverse medical IT solutions and services• We operate two support centers, one in Tokyo and one in Osaka, as part

contribute to customer value. Its one-stop services extend from proposingof business continuity planning, and have built systems to keep runningand developing systems through implementation, operations, andin the event of disruptions from major disasters

maintenance.

• We help reduce CO2 emissions from medical facilities by encouraging
a shift to electronic medical records that reduces paper and data

• Launch new businesses, further develop new products, and consider

Market trends and strengths

maintenance contracts

printing for ﬂyers, pamphlets, catalogs, and other materials. At the same

Canon Marketing Japan Inc. I Integrated Report 2020

Medium- and long-term approachstorage space

Information sharing among multiple professions in healthcare and

The COVID-19 pandemic has caused customer print volumes to decline.
The decreases have been particularly high in commercial and industrial

Financial, ESG, and Corporate Data

understanding customers and identifying their underlying issues.

Medium- and long-term approach

Sustainable Management—ESG Initiatives

systems consultation capabilities based on this deployment expertiseon printer maintenance services to focus on providing customer solutions.

products, and ﬁnancial resources on the solutions business. We will also

35

Rising medical and nursing care costs and medical personnel shortages

There is a growing need for medical information coordination among

Strengths

As a production printing specialist, we will support transformations forOver the next three to ﬁve years, we will move away from a relianceMarket trends

Segment Strategies

Senior Executive Officer

cloud infrastructure.

are becoming issues in Japan’s increasingly aged society.

provides them along with our technologies
Yasuhisa Oba

contributing to the effective use of a more advanced and diverse medical

Value Creation of the Canon MJ Groupthe form printing sector, catering to their diverse printing needs. We also

for memory devices was also robust, reﬂecting increased shipments fordata centers and a range of electronic devices. Shortages of automotive

expand content creation even in this operating climate.
Canon Production Printing Systems is a positive partner for customers inonline medical care, and other cloud-based systems and services should
About the Canon MJ Group

Production Printing

automotive-related products from the second half of ﬁscal 2020. DemandMarket trends
As with PCs and game consoles, demand recovered for smartphones andnursing care from patient perspectives is becoming increasingly importantin regional healthcare and comprehensive care. Remote image diagnosis,

Canon Marketing Japan Inc. I Integrated Report 2020

36

Analysts Assess Canon Marketing Japan’s IT Solutions Business
Securities analysts and top management conducted an online roundtable discussion on the IT solutions

Masahiro Nakanomyo

Hiroko Satobusiness, which will be vital to the Canon MJ Group’s growth in the years ahead.

Precision instrumentation analyst
at Jefferies (Japan) Limited

IT services and internet analyst
at Jefferies (Japan) Limited

Masahiro Nakanomyo

Masahiro Sakata

Jefferies (Japan) Limited

President & Representative Director (now advisor)

Hiroko Sato

Masachika Adachi

Jefferies (Japan) Limited

Director, Senior Managing Director (now President & Representative Director)

The Canon MJ Group maintains a wide-ranging IT

The Canon MJ Group is in the top echelon ofsolutions domain while handling high-quality Canoncompanies able to offer optimal solutions to large

products. I look for the Group to clarify the synergies

corporations, not just in imaging but also in digital

between both capabilities.

transformation and cloud services.

(The titles of the participants were current at the time of the discussion in February 2021.)

What do you think of the Canon MJ Group as adomestic seller of Canon products in Japan andprovider of proprietary IT solutions?

Adachi: Over the past ﬁve years, we’ve built the foundations for focusing

As 5G becomes commonplace, image-based solutions will probably

away from hardware to services, but I don’t think that’s enough to keep

become mainstream in medicine and manufacturing. The Group’s strengthdelivering growth. As you noted, we serve diverse customers, from large

is that it offers Canon imaging and printing products and has its own

corporations to small-to-medium-sized enterprises and individuals. We

expertise.

Nakanomyo: The Canon MJ Group’s business domain encompasses

have a wide product range. We are unusual as both a manufacturer-

everything from offering Canon products through developing systems,

affiliated trading ﬁrm and a systems integrator, and need to work on our

Adachi: I handled sales for major accounts some years back, and foundSolutions—is a key provider of IT solutions for large corporations. Its

selling IT products, and running data centers. It also has a broad customer

strengths and make them more understandable to enhance ourthat customers were particularly interested in imaging-related proposals.

numerous systems engineers can identify customer needs and offer

base and sales network and draws on plentiful solutions resources

reputation.

Many customers consider Canon strong in imaging and video, and thatsolutions. Its strength is being able to carefully construct systems. We

elevates our brand position. This overlaps with the comments from bothhave a wealth of experience in deploying systems integration services.

of you. We aim to fully leverage these strengths.

It will be important for us to draw on these strengths to create services

through its business-to-business and business-to-consumer businesses.
So, it differs completely from other office equipment sales companies andfrom other IT solutions companies. It’s unique indeed.

What are the strengths of the Group’s IT solutions
business?

Sakata: Canon IT Solutions Inc.—the former Sumitomo Metal Systems

that resolve customer needs and challenges and offer them to otherWe also offer unique solutions that we need to highlight. These include

customers as well.

Sato: I agree. At the same time, the Group comes across as a generalist

Nakanomyo: The breadth of your customer base and business domain

FOREMAST, a demand forecasting solution that draws on our strengths insystems integrator. For better or worse, there is little to distinguish it inare simultaneously strengths and slight weaknesses. From an equity

mathematical technology. Another is WebPerformer, a low-code

Adachi: The strength of our IT solutions business to date has been inthat respect. The Company will need to clearly position its value

market standpoint, you maintain a wide-ranging IT solutions domain

development platform that more than 1,000 companies have deployed.

Canon brand printers, MFPs, and other devices and peripheral IT solutions

proposition to be able to expand its IT solutions business. Still, one option

while handling high-quality Canon products. I look for you to clarify thefor those devices. At the same time, Canon IT Solutions is a systems

could be to explore making generalist systems integration a strength andsynergies between both capabilities.

integrator that delves deep into customer issues and builds systems totake full advantage of that.

37

The Group has a broad client base. Tell us about yourstrengths for large corporations and small-tomedium-sized enterprises.

resolve them. Canon IT Solutions is in the Enterprise segment, which
Sato: Systems integrators will likely become total service providers.

serves large corporations. The sales side of the company has switched its

Sakata: Insiders and outsiders view the Group in slightly different ways, but

I believe that the Group’s strength will be its ability to deliver diverse one-processes to act more like a systems integrator for such corporations.

I think you’re spot on. We believe that the Canon brand’s quality and productstop IT services that extend from upstream processes to maintenance andSpreading that process approach to salespeople overseeing quasi-major

appeal are highly trustworthy. This clout is extremely valuable to us.

operations services and outsourcing through your data centers.

and upper medium-sized enterprises should make us stronger.

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 2020

38

Analysts Assess Canon Marketing Japan’s IT Solutions Business

What are the challenges for the IT solutions
business? How should the Company tackle them todrive further growth?

What are your challenges by customer segment?

also in digital transformation and cloud services. Small-to-medium-sizedenterprise customers are shifting computing from on their premises to

Adachi: For large corporations, we need to train more systems engineers

the cloud and software as a service (SaaS). Japan also lags in businessand salespeople who can go upstream from consulting or speak on equal

processing. The Group maintains its own data centers. Its success in

Nakanomyo: I think your biggest challenge is to develop your business tofootings with customer chief information officers or other executives. We

capitalizing on this transition will depend on how fast it can deliver cloudprovide total solutions rather than standalone products. Winningwill likely need to approach quasi-major and upper medium-sized

and SaaS solutions to customers.

recognition for a killer application or solution would feed success thatenterprises by making good use of solutions that have become services

attracts many companies. Security is probably closest in that respect.

for large corporations. So, in January 2001 we established an organization

Hiring competition is intensifying. A key factor in success as a systems

I think it would be easier for us to understand the Canon MJ Group if it

within the Enterprise segment to strengthen our quasi-major and upper

integrator will be the ability to focus on both hiring and retraining

becomes clearer what it stands for.

medium-sized enterprises businesses.

internally to secure engineers who are adept with advanced technologies.

forecasting solution that draws on our strengths in

Sato: I think you need to improve your slogan to convey the Group’s value

For small-to-medium-sized enterprises, security is one of our strengths,

The operating margins of IT solutions ﬁrms exceed those of companies inmathematical technology. Another is WebPerformer,

proposition succinctly and clearly. You highlighted imaging and IT underas Mr. Nakanomyo noted. But we have been unable to deliver sufficient

other industries. Still, I would like the Group to improve its operating

a low-code development platform.

Long-Term Management Objectives Phase III. Perhaps you should

consulting proposals for processes covering everything frommargin a little in view of its overall situation so that it becomes moreemphasize that more. I think that by including solutions in what the Group

implementation through support. We are thus looking to have more people

prominent as an IT solutions player.

offers, many will be able to understand its strengths and attractiveness.

coordinate complete processes, including for acquisitions.

We also offer unique solutions that we need tohighlight. These include FOREMAST, a demand

Masachika Adachi

Sakata: We seek people externally while developing them internally. This
Sakata: The term IT solutions is somewhat vague. The Group currently
deﬁnes itself in terms of the digital transformation areas it will pursue,

Where would you like the Canon MJ Group to head in
the years ahead?

includes executives. All of us are learning more about IT solutions. We’reendeavoring to think more in terms of solutions, and constantly exploring

Sakata: IT solutions for small-to-medium-sized enterprises come with athe extent to which it will do so, and identifies its strengths in thosecomplete sales and support structure, physical and online, enabling us toﬁelds. We plan to clearly state our direction when we announce our new

Nakanomyo: I think that the Group can lead the digital transformation

value. People are pivotal to adding value, so we are committed humanfully assist customer IT setups. Our salespeople once tended to offer

Long-Term Management Objectives and Medium-Term Management Plan

drive in Japan. The COVID-19 pandemic has revealed remaining

resources development.

standalone products, but they now provide total solutions. These combine

in April 2021.

inefficiencies at Japanese companies. I have high hopes for the Group’s

a range of products and services to resolve customer issues. Our
challenge will be for salespeople to deliver total solutions and draw on

We are also endeavoring to expand human resources, including by hiring,

our strong support structure.

to increase the number of people who can draw a concept of our IT
solutions business and show the way forward.

ways to resolve issues for society and customers. That’s how we can add

ability to resolve such issues as a total service provider by creating a

Adachi: For example, if systems are of the same scale as those we havevariety of new solutions.

handled, we need to accumulate expertise to build them with fewer
systems engineers, boosting operating margins. We will thus focus on

Sato: I believe that the systems integrator sector offers a lot of

education to enhance the skills of those people.

opportunities today because player positions are changing so
Adachi: When we present proposals in particular areas, we have todramatically. The Canon MJ Group is in the top echelon of companies able

Thank you, Ms. Sato and Mr. Nakanomyo, for sharing your perspectives

demonstrate that other vendors can’t compete or that it would be better

to offer optimal solutions to large corporations, not just in imaging but

today. We have emphasized the IT solutions business under our Long-

to collaborate with us. So, I think it will be important to reinforce area andTerm Management Objectives and Medium-Term Management Plan, andservice strengths for large corporations and small-to-medium-sized

will strengthen that business in coming years. We will endeavor to deliver

enterprises and disseminate information externally.

better results by leveraging synergies with Canon’s product businesses
and bolster corporate value to match your expectations.

39

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202040

E

S Social

at customer requests. Although the eco-

lifestyles and safeguarding the environment by deploying in-housefriendly technologies of our products lower

measures to prevent climate change and reduce waste while pursuingemissions across the product life cycle, we

distinctive initiatives as a marketing enterprise.

still purchase offset credits*2 equivalent to
the emission amounts that cannot be

Preventing Climate Change

reduced, thereby virtually eliminating

Initiatives at Business Sites

emissions*3.

We upgrade office equipment to energy-efficient models and implement

Under this scheme, we transfer offset

measures to reduce lighting and air conditioning power consumption. We

credits equivalent to emissions reductions

also shrink our environmental footprint by improving work processes andfrom the use of offset products to customers

work practices. Examples include car-sharing sales and service vehicles

who wish to use them.

and no-overtime work days.

G Corporate GovernanceimageRUNNER ADVANCE
C3330F-RG

Customers can use emissions reductions from offset creditstransferred to them as their own reductions. Also, we use offset credits• Board of Directors and Audit &consumption in the showroom and customer service areas of Canon S

that local governments sell, thereby contributing to regional CO2 reduction

Supervisory Board Members

Tower and branches. This achievement was made possible throughactivities.

derived from renewable energy sources offsets electricity consumed from

Segment Strategies

We effectively slashed to zero our CO2 emissions from electricity

purchases under the J-Credit Scheme*, under which credits for power

Value Creation of the Canon MJ GroupE Environment

The Canon MJ Group seeks to contribute to social progress by enhancing

About the Canon MJ Group

Sustainable Management
ESG Initiatives

Environment*1. Carbon offsets reduce GHG emissions to compensate for emissions elsewhere.
*2. Credits issued for carbon offsetting*3. Emissions for all units shipped in the Refreshed series are offset.

other sources. In 2020, we applied this system to the shuttle bus running
between the Canon S Tower and the Makuhari Office to virtually eliminate

Resource Recycling

its CO2 emissions.

Product Collection and Recycling Activities

Product and Services Initiatives• Reducing environmental impact by providing IT solutions

Canon Marketing Japan Inc. I Integrated Report 2020

and those cartridges from customers and dealers and to recycle valuable
resources within the Group, thereby contributing to the creation of arecycling-driven economy.
Canon recycling sites reuse and materially and thermally recycle

The Canon MJ Group offers a range of document and other IT solutions.

used products, cartridges, and other items from customers so they

These solutions, for example, improve business efficiency and lower costs

become resources instead of landﬁll.

by reducing energy consumption at customer sites through the use of

The Refreshed series of office MFPs exempliﬁes our approach. Afterdata centers and paper document digitization to reduce paper resources.

disassembling collected equipment to the component level, we clean andThis also lowers environmental impact by reducing resource and energy

wash parts, replacing deteriorated and worn parts in accordance with

consumption.

strict recycling standards. Refurbished equipment goes through• Introducing carbon offsets

production and inspection lines employing the same standards as those

We introduced a carbon offset*1 scheme to offset CO2 emissions of ourfor equipment solely employing new parts. We fully verify quality andoffice MFPs and certain production printers throughout product life cycles

reliability in bringing out refurbished offerings as new products.

Canon Marketing Japan Inc. I Integrated Report 2020

Financial, ESG, and Corporate Data

41

We set up a program to efficiently collect used Canon MFPs, laser printers,
Sustainable Management—ESG Initiatives*The Japanese government certiﬁes J-Credits under the J-Credit Scheme of the Ministry of Economy, Tradeand Industry, the Ministry of the Environment, and the Ministry of Agriculture, Forestry and Fisheries. The
scheme encourages entities to adopt and expand the use of renewable energy by converting intangible
CO2 emissions reductions and absorptions into credits that they can trade in markets.

42

Sustainable Management—ESG Initiatives
Environment

S

Society

The Canon MJ Group contributes to society in a variety of ways, includingof June 2020, 2.15% of Canon MJ’s employees were people with

We monitor and manage water consumption at key business sites. At ourby creating frameworks to provide safe and reliable products and services

disabilities. The Group will continue pushing ahead with new graduate

headquarters in Shinagawa, we use water-saving panels in the cafeteria

to customers and by developing workplaces that prize the contributions

and midcareer hiring of individuals with disabilities.

and other areas. We collaborate with the Shinagawa Grand Commonsof each employee.

urban development council to use recycled water in restrooms and other

Activities of the project heldin Miyagi Prefecture• Balancing professional and private commitments

Activities of the project heldin Fukui Prefecture

Relations with Employees

Canon MJ has rolled out a range of programs to foster career plans andwater consumption when verifying semiconductor equipment by

Respect for Human Rights and Diversity

create more attractive employment environments by empowering its

We strive to prevent unfair discrimination and harassment of employees. We

people to balance work with childcare and nursing care commitments.

sustainable economy.
We endeavor through the project to encourage participation in thePreventing Pollution
Carefully Managing Chemical Substances
We identify and manage all chemical substances that we use in aftersales support for our products. Steps under our Chemical SubstanceManagement Procedures include monitoring hazardous substance usage

In April 2021, we received Platinum Kurumin

personalities and values can play an active role and grow with one another.

Certiﬁcation from the Minister of Health, Labour andWelfare for excellence in offering childcare support.

biodiversity and conservation through My Action Declaration*, a set of ﬁve
actions to protect biodiversity.
*To reach the Aichi Diversity Targets, we must all be aware of the impacts of our lifestyles on biodiversity.

Disseminating Website Contents• Supporting women’s advancement
In support of the Women’s Action Plan of Keidanren (Japan Business• Combating harassment

Federation), Canon MJ and Canon IT Solutions Inc. submitted voluntary

The Canon MJ Group engages in various awareness-building initiatives toplans to appoint female officers and managers.

prevent sexual and power harassment.

The Canon website offers access to the Animarium, an online virtualAlso, Canon System & Support Inc., Canon Production Printing

Harassment issues are part of the agenda for training new

by assessing their environmental impacts, and conﬁrm appropriate usage

town, river, sea, and mountain space in which visitors can learn about

Systems Inc., Canon BizAttenda Inc., and Canon Customer Support Inc.

employees and managers. Compliance meetings also position harassment

and storage methods.

the environment and biodiversity through photos about the wonders offormulated action plans based on their speciﬁc challenges to foster theas an issue for discussion within work units.

living things.

participation of women in workplaces and appoint and recruit female

We make it easier for employees to seek advice about harassment

Conserving Biodiversity

managers. By 2025, Canon MJ looks to have women accounting for 6.0%

by offering consultations and by enabling the sharing of concerns by

Implementing the Furusato Projectof managerial positions and 20.0% of deputy manager roles.

email or telephone.

• Initiatives to employ people with disabilities

Developing Human Resources

The Canon MJ Group is committed to employing people with disabilities,

We empower all employees to learn and grow by providing the support

and accordingly endeavors to create a barrier-free work environment. As

they need while encouraging voluntary learning. Our Human Resources

Sustainable Management—ESG Initiatives

We determine whether or not we can use new chemical substances

Segment Strategies

amounts and storage.

activities of groups with which we are collaborating to raise awareness offoster a corporate culture in which diverse people with different

Value Creation of the Canon MJ Group

areas in keeping with Tokyo metropolitan government objectives. We cut

minimizing their operations.

About the Canon MJ GroupManaging Water Use

Our Furusato Project aims to bequeath a better world to future generations
in keeping with our recognition that biodiversity is essential for a

TOPIC

Canon IT Solutions Receives Letter of Appreciation from Governor of Tokyo for Helping to Realize Zero Emission
Tokyo Strategy

Canon IT Solutions endorsed the Tokyo metropolitan government’s efforts to realize its

handling specialist training and workplace supervisors overseeing day-

Employees with Disabilities (Non-Consolidated Basis)(Number of people)(%)

Zero Emission Tokyo strategy, donating 19,893 metric tons of CO2 reduction credits from

200

2.4

the Nishi-Tokyo Data Center. That facility participates in the Tokyo Cap-and-Trade150

appreciation from the Governor of Tokyo for donating credits after lowering emissions
and energy consumption more than required.
*This program obliges office building occupants and other energy users to reduce their CO2 emissions, and allows themto trade emissions excesses or shortfalls as credits.

Canon Marketing Japan Inc. I Integrated Report 2020

157.0

100

150.0

2.16%

150.0
2.15%

149.5
2.19%

foster their growth.

142.0
2.15%

2.2

2.10%
50
0

to-day operations to design ideal experiences for each employee andFinancial, ESG, and Corporate Data

Program*, a mandatory emissions trading scheme. The company received a letter of

43

Department oversees overall training. It joins hands with departments• Asia trainee system
The Canon Group maintains the Asia Trainee System, through which it

0

sends young employees to undertake language and practical training at

Percentage of employees with disabilities

overseas subsidiaries in Asia. The goal is to foster professionals who are*Calculated according to prescribed working hours, disability degrees, and other factors in keeping with
the Ministry of Health, Labour and Welfare standards.

familiar with local languages, cultures, and business practices. This is(FY) 2016

2017

2018

Number of employees with disabilities

2019

2020

Canon Marketing Japan Inc. I Integrated Report 202044

Sustainable Management—ESG Initiatives
Societyin the program to become strong candidates for future overseas
assignments.

products and services that meet customer needs.
2. Prioritize green procurement of products and services that help shrink
our environmental footprint as part of conservation initiatives.
3. Offer fair trading opportunities and procure fairly in keeping with laws

• In-house recruiting programand social norms.
4. Engage in procurement activities that foster mutually beneﬁcial long-This program encourages employees to take on new positions and moreterm relationships with business partners to realize a sustainable

fully tap our human resources.

economy.

Quality Managementby checking that they have established product chemical substance

Quality Management Systemmanagement systems based on the standards and by surveying

The Canon MJ Group established a quality management system thatenvironmentally hazardous substances in raw materials, parts andaugments the requirements of ISO9001, the international standard for

auxiliary materials of products for which we consign production.

quality management systems to control quality risks. This approach is in* These mandatory standards for Canon Group companies stipulate the parent’s green procurement
requirements as part of its environmental protection initiatives.

Procuring Minerals Responsibly

keeping with our Basic Policy on Product Safety and ensures that we provide
top-quality products and services that are safe and reliable for customers.
For the quality management system, we established policies and

The Canon MJ Group tackles the challenge of sourcing minerals responsibly

targets for the relevant products, services, and support. We pursue

Enhancing Job Satisfaction

Rigorous Procurement Compliancein conﬂict-affected areas* in accordance with a basic policy of the Canon

ongoing improvements through plan-do-check-act (PDCA) cycles andOur meritocracy-based corporate culture fully recognizes achievements in

The Canon MJ Group educates about its action guidelines andGroup. We ensure peace of mind for Canon product customers by requesting

clarify responsibilities and authority for achieving goals.

important and responsible jobs, regardless of age or gender. Our work

procurement laws and regulations initiative to ensure optimal and fair

suppliers to conﬁrm the provenances of minerals in their products and help

environment encourages employees to grow and develop personally andbusiness transactions. We established the Group Procurement

us eliminate the use of conﬂict minerals.

beneﬁt our organization.

Regulations, maintaining requirements for fair and equitable transactions,• Work practice reform initiatives

and regulations.

We launched the Work Practice Reform Promotion Project to enhance

We established a department that oversees our Procurement

productivity Groupwide so employees can complete their tasks during

Department, and aim to regulate the Canon MJ Group overall by educating

regular working hours.

about procurement-related laws and rules and monitoring compliance.

We staggered work hours and broadened the scope of teleworking

We provide buyer education for Procurement Department employees
to raise compliance awareness based on the Group Procurement• Raise awareness by implementing no-overtime work days and sharing

Regulations.

results on our information site

As well as stating our requirements of business partners, weCanon Inc., which oversees manufacturing and other manufacturers, andrespond swiftly to customer issues.

Telework Supporter Service Helps Enhance Work Practices and Prevent Spread of COVID-19 Infections

BellSystem24, Inc., a leading call center company, introduced Telework Supporter in
2019. About 25% of its home-based operation booths use this cloud-based service from
Canon IT Solutions.

• Diversify work practices by using satellite offices and telework andconclude basic agreements before engaging in transactions with them,staggering work hours

committing to complying strictly with laws and ordinances and to

this less stressful than camera monitoring systems in which managers check videos of• Enhance work efficiency by encouraging the use of IT tools and robotic

engaging in fair and honest transactions that do not violate corporate

employees on the job. The system also reduces the risk of information leaks.

process automation (RPA), through which software robots run

ethics or erode social trust. After we start doing business with theseapplications on PCs

partners, we conduct regular surveys to check progress in an array of

Procurement Activities

them with feedback on assessments.

Telework Supporter uses facial recognition to manage work attendance. People ﬁnd

BellSystem24 views security as a top priority, so it was impressed with the system’s ability to detect peeping and spooﬁng, lowering the riskof information leaks.
The pandemic has prompted many companies to adopt telework as part of work practice reforms. We will keep contributing to the expansion

Financial, ESG, and Corporate Data

areas, including from environmental and social perspectives, providing

Sustainable Management—ESG Initiatives

to help safeguard employees from COVID-19.

TOPIC

We manage product quality in the marketplace by collaborating with

Segment Strategies

environmental protection, and compliance with procurement-related laws

* Some minerals from the Democratic Republic of Congo and adjoining countries are prevalent across theglobal supply chain. They are called conﬂict minerals because they fund armed groups in Central Africa.
The United States enacted legislation that requires U.S.-listed companies to disclose their use of
conﬂict minerals, raising interest worldwide in this issue. From 2020, we took the impact of theEuropean Union’s conﬂict minerals regulations into account in expanding the scope of our assessments
to cover all conﬂict and high-risk areas worldwide in line with the OECD Due Diligence Guidance.

Value Creation of the Canon MJ GroupWe support career development through the Job Opening Bulletin System.

We brief new suppliers on these standards. We conﬁrm compliance

About the Canon MJ Group

one of the training programs of Canon Inc. We want those participatingof telework and business progress in various markets by providing Telework Supporter and other IT solutions.

Basic Procurement Policy
The Canon MJ Group established the following basic procurement policy.

Engaging in Green Procurement

1. Foster efficient and competitive business activities by pursuing safety

The Canon MJ Group endeavors to eliminate hazardous chemical substancesand quality and endeavoring to stably procure reasonably priced

45

Canon Marketing Japan Inc. I Integrated Report 2020

by complying with the Global Canon Green Procurement Standards*.

Canon Marketing Japan Inc. I Integrated Report 2020

46

Sustainable Management—ESG Initiatives(As of March 26, 2021)

Corporate Governance Organization

G

Corporate Governance

General Meeting of Shareholders
Appointment / Dismissal

Appointment / Dismissal

Appointment / Dismissal
About the Canon MJ Group

Monitoring

6 Directors
Board of Directors

Inquiry

Nomination and Remuneration Committee

Overview of Corporate Governance at the Canon MJ Groupof the Board of Directors. Such agreements are appropriately and fairly• Organizational format: Company with Audit & Supervisory Board members

implemented without compromising the Company’s interests. The Company

Management Committee• Number of directors: 6

acts appropriately and fairly in all transactions, not just those with its

Sustainability Promotion Committee• Number of outside directors: 2

controlling shareholder, to avoid compromising its independence andDisclosure Committee• Number of outside directors designated as independent: 2

interests and to safeguard the interests of all shareholders.

ReportCooperation
Audit of ﬁnancial
statements

Independent
AuditorCooperation

Internal Auditors Office

Cooperation

Internal audits

Internal Controls Evaluation Committee• Term of directors: 1 year

AdviceLawyers /Licensed Tax Accountants

Relationship with the Parent Company• Number of outside Audit & Supervisory Board members: 3

Our parent company is Canon Inc., whose policy is to list its subsidiaries• Number of outside Audit & Supervisory Board members designated as

on stock exchanges to optimize its consolidated results, ensuring

Board of Directors

auditor and the Internal Auditors Office to assess performance andindependent: 2

earnings stability by maintaining the independence and dynamic

We maintain a structure in which the representative director oversees

corporate assets and ensure sound management.

• Term of Audit & Supervisory Board members: 4 years

management structures of those companies. This approach enhances

Companywide business strategies and execution, while supervision of

There are ﬁve Audit & Supervisory Board members, of whom three• Independent auditor: Deloitte Touche Tohmatsu LLC

Group value in keeping with the interests of all shareholders, including

business domains and headquarters functions is primarily throughare outside auditors. Their duties include attending Board of Directors’• Use of executive officer system: Yes

minority ones.

executive directors, and add at least two independent outside directors tomeetings, communicating with directors and other parties, and perusing

ensure sound management. In accordance with laws and ordinances, theimportant documents in line with the auditing policies and work

Board of Directors monitors important decisions and implementation.

allocations that the Audit & Supervisory Board stipulates, and conducting

Canon MJ sells and services Canon products. It also sells andStaff Managers

Basic Stance on Corporate Governancecustomer requests. To develop our own businesses, we have to make

Other decisions are handled by the representative director or under

We recognize that sustainable growth in corporate value requires ongoingswift decisions, procure funds ﬂexibly, and attract talented people. We are

the representative director’s direction and supervision through executive

improvement in such areas as management transparency and theable to do this because we are listed and operate independently. We thus

officers whom the Board of Directors appoints through its resolutions toInternal Auditors Officemonitoring of progress toward management targets. This is reﬂected inbelieve that expanding earnings through our businesses help increase theassume responsibility for making and implementing decisions for

The Internal Auditors Office produces internal audit policies for Canon MJ

our wide-ranging initiatives to strengthen corporate governance. We have

Canon Group’s corporate value while beneﬁting shareholders overall.

business domains and headquarters functions.

and its subsidiaries as an independent specialist that reports directly to

implemented all principles of Japanese Corporate Governance Code.

rigorous audits by examining operations and property.

the president. It also conducts audits, assesses, and advises on all

limited to exercising voting rights as a shareholder. No parent directors

appointments, and other matters, the Board of Directors extensively

business activities from the perspectives of credibility of ﬁnancial reports,

Initiatives to Enhance Corporate Governancehold concurrent positions with us. More than half of the members of our

discusses and decides about important matters relating to legal affairs

the validity and efficiency of operations, legal compliance, and the2011 Adopts executive officer system

voluntary Nomination and Remuneration Committee are independent

and Board regulations at gatherings that are normally held once monthly,

conservation of assets. The auditors of Canon IT Solutions Inc. and Canon2014 Appoints one outside director

outside directors, ensuring transparency and fairness. We confirm thator as needed, and at Management Committee meetings attended by the

System & Support Inc. conduct assessments based on the same policies.

2016 Increases number of outside directors to twotransactions with Canon Inc., such as to determine purchase prices anddirectors of Canon MJ and the presidents of major subsidiaries.

The Canon MJ Group has 50 audit staff members.

2016 Establishes standards for independent outside directors

interest rates on loans, do not disadvantage either party. We only

2016 Japanese Corporate Governance Code and Audit & Supervisory
Board members (Standard)

implement these transactions after signing contracts.

Audit & Supervisory Board

Outside Directors and Outside Audit & Supervisory Board Members

The Audit & Supervisory Board functions independently of the Board of(as Deﬁned under the Companies Act)

Policy on Constructive Dialogue with Shareholders

Directors, and comprises individuals who are familiar with the Company’s

Canon MJ has two outside directors and three outside Audit & Supervisory

The Company helps to drive sustainable growth and improve corporate

business or corporate management and who have accounting or other

Board members. Pursuant to the consent of all Audit & Supervisory Board

value over the medium and long terms by engaging in constructive

expertise. At least one outside Audit & Supervisory Board member is anmembers and the Board of Directors, we implemented our Standard for

dialogue with shareholders, including through general meetings ofoutside person who fulﬁlls the independence criteria of Standard that theoutside directors and outside Audit & Supervisory Board members toshareholders, brieﬁngs on management plans for the medium and long

Board of Directors separately determines.

clarify for the independence of outside directors and outside Audit &Protection of Minority Shareholders in Transactions with theControlling Shareholder
The Company’s controlling shareholder is Canon Inc. The Company
concludes important basic agreements with Canon Inc. based on resolutions

Canon Marketing Japan Inc. I Integrated Report 2020

terms, results brieﬁngs, and meetings with major institutional investors.

The Audit & Supervisory Board cooperates with the independent

Financial, ESG, and Corporate Data

As well as engaging in regular deliberations about results, executive

Sustainable Management—ESG Initiatives

The parent company’s involvement in running our organization is2018 Sets up Nomination and Remuneration Committee

Segment Strategies

services the products and IT solutions of other entities in response to

Value Creation of the Canon MJ Group

Business Segments / Group Companies• Number of Audit & Supervisory Board members: 5• Number of executive officers: 23

47

5 Audit & Supervisory Board Members
Audit & Supervisory Board

Supervisory Board members in keeping with the Japanese Corporate

Canon Marketing Japan Inc. I Integrated Report 2020

48

Sustainable Management—ESG Initiatives
Corporate Governanceof Directors analyzed and evaluated the ﬁndings. These talks conﬁrmed

Appointment and Nomination Procedures

Canon Group, Canon MJ has also applied global perspectives bySupervisory Board members satisfy the independence criteria and help

the overall effectiveness of the Board of Directors. We will draw on the

To nominate director or Audit & Supervisory Board member candidates

establishing systems based on the same standards.

maintain and improve the transparency and accountability of the Board ofviews of directors and auditors (in matters relating to management index)

and appoint senior executive officers (including successors and president

Directors.

in running the Board of Directors to further improve its effectiveness inand representative director candidates), the president and representative

Corporate Ethics and Compliancethe course of discussions.

director first nominates candidates from among those fulfilling

For the Canon MJ Group, compliance is not simply a matter of obeying

requirements. The nomination is submitted at a meeting of the Board oflaws and regulations. We also commit to complying with laws and social

The Company does not maintain a specialist organization or provide
full-time staff to assist outside directors or outside Audit & Supervisory

Policies and Procedures for Determining Remuneration for

Directors after the Nomination and Remuneration Committee confirms

rules, maintaining social justice, and continuing to meet the expectations

provide outside directors with prior explanations of Board of Directors’

Senior Executives and Directorsthat it is fair and appropriate.

of society. We engage in compliance from the perspectives of initiatives tomeeting agendas as needed. Internal auditors, directors in charge of

Remuneration for the representative director and directors consists of basic

operations, and other officials provide outside Audit & Supervisory Board

remuneration, which is a ﬁxed basic monthly fee for executing their roles

members with prior explanations of Board of Directors’ meeting agendas

and duties, a bonus linked to performance during the ﬁscal year, and stock

as needed. Outside Audit & Supervisory Board members attend Audit &incentives also linked to performance to promote improvements in medium-

Dismissal Procedures for Management Team Executives

the Canon Group Code of Conduct, which presents the standards that they

Supervisory Board meetings, as well as liaison meetings conducted as

to long-term business performances and corporate value. The same applies

Directors and Audit & Supervisory Board members can ask the Nomination

should uphold in performing their duties, and Compliance Cards, which

needed, to exchange information on important audit details among Audit

to remuneration for executive officers, who are senior executive officers or

and Remuneration Committee for deliberations at any time to decidedescribe the “Three Selfs” spirit (covering self-motivation, self-& Supervisory Board members.

above. Outside directors only receive basic remuneration.

whether the dismissal of a representative director, executive director, ormanagement and self-awareness). We educate and train employees to

The Company maintains a voluntary four-person Nomination andexecutive officer who is a senior executive officer or above (collectively,enhance awareness. In addition, we distribute compliance-related email

Outside Directors’ and Outside Audit & Supervisory Board Members’

Remuneration Committee comprising the president, one director, and“management team executives”) is necessary in the event of illegal,

newsletters to help our people better understand and adhere to laws andAttendance at Board of Directors’ Meetings and Audit & Supervisory

two independent outside directors. The committee verifies theunfair, or treasonous behavior among such individuals, if they have failed

rules relating to our business.

Board Meetings

appropriateness of the remuneration system for directors and executive

to fulﬁll their roles, or for other reasons that make such people unsuited

Attendance at meetings of the Board of Directors and Audit& Supervisory Board during ﬁscal 2020

officers who are senior executive officers or above, including ideas on

to retain their posts as management team executives.

calculating basic remunerations and bonuses and the criteria for granting

All results of Nomination and Remuneration Committee deliberations shall

Akio
Dobashi

18/18 times (100%) of Board of Directors’ meetings

performance-linked remuneration. Remunerations are all in line with thebe submitted to the Board of Directors, regardless of the outcome of Board of

YoshioOsawa

remuneration structure, whose basic calculation approaches were

Directors’ deliberations on the necessity of dismissal. The management team

18/18 times (100%) of Board of Directors’ meetings

resolved at meetings of the Board of Directors and are verified by the

executives subject to deliberations cannot join in discussions.

13/13 times (100%) of Board of Directors’ meetings
10/10 times (100%) of Audit & Supervisory Board meetings
Iwao
There were 18 meetings of the Board of Directors in ﬁscal 2020. He
Hashimoto attended all 13 gatherings subsequent to his appointment.
There were 17 meetings of the Audit & Supervisory Board in ﬁscal
2020. He attended all 10 gatherings subsequent to his appointment.

Analysis and Evaluation of Effectiveness of the Board of Directors
The Company consulted with directors and Audit & Supervisory Board
members about the effectiveness of the Board of Directors, and the Board

49

Canon Marketing Japan Inc. I Integrated Report 2020

We normally convene the compliance meeting to conﬁrm compliancerisks and countermeasures at each work site. There were no suchgatherings in 2020 because of the pandemic, but we have resumed themin 2021. We also maintain an ongoing internal reporting system.

Information Security
The Canon MJ Group helps realize a secure society by managing

Nomination and Remuneration Committee.

Internal Controls

information security based on its governance oversight. Products andincentives for directors must be less than the maximum total

Based on the Companies Act, the Board of Directors resolved the basic

solutions for customer information security issues draw on our expertise

remuneration approved at general meetings of shareholders. Bonuses,

policy for an internal controls system to ensure appropriate businessin this ﬁeld.

however, are determined when proposals for them are approved atpractices, and is deploying that system in line with the policy.

The total of basic remuneration and performance-linked stock

ordinary general meetings of shareholders.

There were 17 meetings of the Audit & Supervisory Board in ﬁscal
2020. He attended all 10 gatherings subsequent to his appointment.

Shigeo18/18 times (100%) of Board of Directors’ meetings
Hasegawa 17/17 times (100%) of Audit & Supervisory Board meetings

All officers and employees of the Canon MJ Group receive copies ofMembers of Nomination and Remuneration Committee

We have taken various steps to bolster information security

Chaired by the president, the Internal Controls Evaluation Committee

governance, moving forward with objective assessments and ongoing

consists of officials representing corporate departments and subsidiaries. Its

improvements. We formulated the Basic Policy on Information Security fortask is to develop internal controls systems for the entire Canon MJ Group.

the Canon MJ Group and rolled out the Information Security Management

Canon Inc., which is listed on the New York Stock Exchange, has

System (ISMS) and Personal Information Protection Management System

Minoru Mizoguchi: Director, Senior Executive Officer

adopted systems that comply with the Sarbanes-Oxley Act, a U.S. law(PMS) for the Group to standardize and streamline management. We are

Akio Dobashi: Outside Director

designed to improve corporate governance. As a member of the global

optimizing our information security countermeasures, training information

Masachika Adachi: Chairperson, President & Representative Director

Financial, ESG, and Corporate Data

Outside Audit &13/13 times (100%) of Board of Directors’ meetings
Supervisory
10/10 times (100%) of Audit & Supervisory Board meetings
Board members Nobutoshi
There were 18 meetings of the Board of Directors in ﬁscal 2020. He
Matsumoto attended all 13 gatherings subsequent to his appointment.

ensure that all of our people act ethically and obey the law.

Sustainable Management—ESG Initiatives

Outsidedirectors

before deliberations by the Board of Directors.

raise awareness, educating, and undertaking organizational activities to

Segment Strategies

Name

The Audit & Supervisory Board discusses and consents to nominees

Value Creation of the Canon MJ Group

Board members. Directors in charge of operations and other officials

About the Canon MJ Group

Governance Code and standard. Our outside directors and outside Audit &Yoshio Osawa: Outside Director

Canon Marketing Japan Inc. I Integrated Report 202050

Sustainable Management—ESG Initiatives
Corporate Governance

About the Canon MJ Group

Messages from Outside Directors
security personnel, and have secured and maintained certiﬁcation underDepartments formulating business continuity plans conduct desk-

the ISMS Conformity Assessment Scheme and PrivacyMark. We deployedbased simulations and drills based on scenarios in keeping with themes

As I stated in the previous integrated report, the Company has had no governance issues to the best of

the Canon MJ Computer Security Incident Response Team to reinforce

that match their circumstances. We explore countermeasures for issues

my knowledge. I have been an outside director for ﬁve years, since which I have found that directors

cybersecurity. We also issue an information security report.

that arise in drills.

increasingly speak at meetings and engage in more vigorous discussions.
If I had to highlight an issue, it would be that the Company could operate more swiftly in

Ongoing training enables us to respond decisively to emergencies.

everything from setting policies and goals to implementing specific strategies. In IT solutions in

Business Continuity• Assessments

for major earthquakes, inﬂuenza outbreaks, and other crises.

A secretariat overseeing Groupwide business continuity management
activities conﬁrms the effectiveness of business continuity planning byparticular, which we have positioned as a growth business, clearly communicating growth strategy
progress internally and externally should accelerate expansion. I believe that we can improve ourcorporate value by better informing our customers and the market of the social issues that we seek to
Akio Dobashi
Outside Director

resolve through IT.

Business Continuity Planningassessing departmental management activities from third-party

This planning entails formulating preparatory measures to keep

perspectives. We evaluate the effectiveness of these efforts from thosemarkets that we are willing to invest in talent development and acquisitions should make it easier for

operations running without interruption or to aid swift recoveries

perspectives, identify issues, clarify improvements, and provide feedback

us to obtain useful acquisitions information. In reinforcing human resources, we need to make our IT

following disasters and therefore help the Group fulfill its social

on activities for subsequent ﬁscal years.

solutions growth strategy clear and more proactively hire new graduates and midcareer people who

responsibilities. We choose important operations that should continue andHaving ample funds should beneﬁt us greatly as we accelerate growth. Demonstrating to capitalwant to work in IT-related areas.

Tackling the COVID-19 Pandemic
We make the health and safety of customers and Canon MJ GroupI believe that our corporate governance setup has evolved since my appointment in 2018. The

Business Continuity Management

employees our ﬁrst priority, and have taken the following preventive steps

COVID-19 pandemic has changed how our people work. We have been able to constrain infections,

We run business continuity plans based on drills and other businessto maintain business continuity even as infections spread across Japan.

which is testament to our governance approach working well.

continuity management plans and endeavor to enhance their effectiveness.

1. Work practices

The four members of the Nomination and Remuneration Committee, which the Company
launched in 2018, held fruitful deliberations in 2020. I think that the Board of Directors has

Key initiatives• Stagger work hours and have people work from satellite offices

deepened discussions not just about the organization and structure but has also enhanced• Building a contact system

2. Employee behavior

awareness about corporate governance while materially improving it. In the years ahead, I think we

We set up this system so relevant parties can properly communicate and• Ensure that employees practice social distancing, wear masks and wash
hands thoroughly, and avoid closed, crowded, and close-contact settings

services and can be used outside working hours. By efficiently sharing• Ensure that employees step up health management and swiftly reportdisaster situation, business damage, and other information, we seek tosuspected infections

streamline decision-making, prevent secondary damage, and maintain• Generally prohibit overseas business travel and cancel or postpone

and swiftly restore business continuity.

unnecessary domestic business trips• Hold online meetings with customers, business partners, andemployees, and prohibit large-scale in-person gatherings internally

It is important to remain constantly ready for disasters and prepare• Consider caution in holding in-person face events

speciﬁc responses.

• In principle, prohibit overseas travel for personal purposes

We regularly conduct drills to ensure that people can properly use
social networking services in emergencies, notably by sending messages

3. Measures at business sites• Regularly disinfect office ﬂoors and common areas

will need to focus more on risk and crisis management and pursuing the SDGs to address a range
Yoshio Osawa
Outside Directorof risks.
We did not sense that the Company fully employed its business strengths despite having a broadcustomer base, supporting its product capabilities with a solid Canon brand and advanced
technologies. The Board of Directors has continued to discuss the need to provide more total solutions,
including Canon products and IT solutions, and maintenance and operations services to satisfy
customers. Over the past three years, the entire organization seems to have taken a new tack. The
Company and its customers rapidly increased teleworking last year in response to the pandemic. I

Financial, ESG, and Corporate Data

• Drills

Sustainable Management—ESG Initiatives• Implement teleworking (to reduce office headcounts by 70%)

respond following disasters. The system leverages social networking

Segment Strategies

formulate business continuity plans for each of them.

Value Creation of the Canon MJ GroupThe Canon MJ Group formulates business continuity measures to prepare

think this situation increased an internal awareness of the need to provide total solutions, as IT is partand parcel of telework.
It will be essential for all employees to become knowledgeable about IT to move forward. We
should become speedier, notably in investing in human resources development, providing services that
integrate Canon products and IT solutions, and undertaking acquisitions.

about safety and disaster situations.

51

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202052

Sustainable Management—ESG Initiatives
Corporate Governanceinformation systems, and reinforce safety management structures. While

Information Management

Credit Risks

We formulated the Canon MJ IR Policy in 2008 to clarify our stance, which is

the Group does its utmost to maintain systems to comply with such

The Canon MJ Group holds important information about various GroupThe Canon MJ Group could experience unforeseen credit losses, as it

disclosed on the official investor relations (IR) website below. For retailrequirements, transactions with medical institutions and medical

operations. It has also amassed a considerable amount of sensitive

engages in numerous transactions in which it collects payments afterinvestors, the president, the managing executive officer overseeing IR, or

equipment dealers could decline if its safety management structure or

information about companies and individuals in the course of providing

providing goods and services. The Company therefore draws on credit

other executives conduct Company brieﬁngs. In 2020, Canon MJ conducted

information systems do not perform as envisaged.

customer solutions. We accordingly formulated the Basic Policy on

information from external credit bureaus and other sources as part ofAs we purchase products and services from many business partners,

Information Security and the Basic Policy on Information Security Rules

thorough credit management efforts while hedging risks through factoring

investors, the Company augments medium- to long-term management plan

including parent company Canon Inc., we may face the risk of insufficientfor the Group, educate and train employees to increase awareness of theand other means. The Company provides allowances for doubtful receivables

brieﬁngs by the president at the beginning of the year with quarterly results

supplies of goods owing to certain partner circumstances, including

importance of information management, implement and check the status

to cover the risks of losses on collection. Large unforeseen uncollectible

brieﬁngs at which the managing executive officer in charge of IR outlines

natural disasters and major accidents. Results could be affected if suchof system security measures, and create and deploy an ISMS.

amounts could detract from the Group’s results and ﬁnancial position.

performances. The Company also embraces individual interview requests,

situations hamper sales activities.

meeting requests from analysts and institutional investors, andteleconferences with foreign institutional investors.

Systems Development

Canon MJ IR website

We develop systems under contract in diverse ﬁelds to provide solutions

canon.jp/8060e-ir

to customers. In moving forward with projects, we endeavor to reduce theBusiness Risks
Impacts of Market Competition and Fluctuations

frameworks and carefully managing projects and work hours.
Signiﬁcantly higher man-hours to accommodate customer requests

In office MFPs and maintenance services, price competition continues. The

for additional speciﬁcations or changes, disagreements with customers

unit price for maintenance services continues to fall, and proﬁtability could

about speciﬁcations and progress, or other factors could greatly increase

deteriorate if price competition intensiﬁes. A decline in print volumes driven

costs and affect business performance.

by the trend toward paperless offices could affect the Canon MJ Group’s

management systems stipulating selection criteria and methods for

Relationship with the Parent Company

conﬁrming security management measures.

Canon MJ is a subsidiary of Canon Inc., which owned 58.5% of its stock as

We additionally set up the Computer Security Incident Response
Team to prevent, detect, and tackle cyberattacks.

of December 31, 2020. The Company has the exclusive right to sell all
Canon brand products in Japan, the exceptions being semiconductor

Notwithstanding these measures, information that leaks externally as

exposure equipment, LCD substrate exposure equipment, and medicala result of cyberattacks could greatly inconvenience business partners anddevices. In ﬁscal 2020, Canon Inc. accounted for a large proportion of ourother stakeholders or lower the credit standing of the Canon MJ Group, thus

overall purchases.

possibly hampering its operations, results, and ﬁnancial position.

Because of this relationship, a major shift in the management
policies or business activities of Canon Inc. could have a significant

Natural Disasters

impact on the business activities, performance, and ﬁnancial position ofEarthquakes, typhoons, and other natural disasters and outbreaks of

the Canon MJ Group. If it becomes impossible to maintain the superiority

Data Center Businessserious infectious diseases in areas in which the Group does businessof Canon products in relevant industries for whatever reason, the Group’s

could constrain revenues from genuine Canon counterparts.

Our Nishi-Tokyo Data Center offers data center, cloud, and systems

could affect its operations. While it maintains redundant equipment andresults could be adversely affected.

The digital interchangeable lens camera market could continue tooperations subscription services. The advanced facilities are on stable

information systems as backup, the Group cannot guarantee it we would

shrink as the overall market shifts from SLR to mirrorless models. Sales

ground and provide robust security, meeting strict facilities and operating

sufficiently avert damage from such disasters, which could adversely

IT Governance: Investing in IT to Boost Corporate Value

declines of inkjet printers and inkjet cartridges may accelerate amid thequality standards. We obtained the M&O Stamp of Approval in 2017* from

affect its performance and ﬁnancial position.

The Group endeavors in various ways to enhance corporate governancedecrease in the print volume associated with the declining demand fora third-party organization as recognition for meeting global data center

printing New Year’s greeting cards.

operations expertise standards over the years

and keep improving corporate value. IT is important to corporate

turmoil. Depending on how this situation affects Canon Inc. and othermanagement and the Group is deploying IT governance. We arebusiness partners, they may not be sufficiently able to provide products andinstitutionalizing IT investment management and have set up IT

services.

investment assessment committees under the auspices of the

In the industrial equipment business, capital spending among

Nonetheless, an earthquake, major ﬂood, ﬁre, or other disaster or an

semiconductor and device manufacturers greatly affects orders for

infectious disease outbreak, operational error, or cyberattack could cause

semiconductor fabrication and measuring equipment. Results could

facilities and systems to halt operations or result in leaks of important

If the pandemic were to worsen and stretch out, the global economy

Management Committee. These assessment committees approve andstagnate if these manufacturers reduced such expenditure.

customer information, harming business partners and other related

and our operations could stagnate, the business activities and investment

evaluate investment projects from the perspectives of business growthparties. Such situations could erode trust and adversely affect the Group’s

appetites of business partners could decline, and our business activities

and productivity improvement to optimize the effectiveness of IT

operations, results, and ﬁnancial position.

could face restrictions owing to government requests, adversely affecting

investment and reduce risks.

Device Act (formerly, the Pharmaceutical Affairs Act) makes it mandatory
to appoint sales administrators, set up post-marketing traceability

Canon Marketing Japan Inc. I Integrated Report 2020

*The Uptime Institute, a private entity in the United States, has established global standards for data
center operational quality.

Financial, ESG, and Corporate Data

The COVID-19 pandemic has caused supply chain and production

Sustainable Management—ESG Initiatives

results. An increase in unit sales of third-party laser printer toner cartridges

In the medical equipment business, the Pharmaceutical and Medical

53

For subcontractors, we established and oversee rules andSegment Strategies

risk of unprofitable projects by establishing internal deliberation

Value Creation of the Canon MJ Group

Company brieﬁngs for retail investors in July. For analysts and institutional

About the Canon MJ GroupIR Activities

our results and ﬁnancial position.

Canon Marketing Japan Inc. I Integrated Report 2020

54

Sustainable Management—ESG Initiatives

Board of Directors and Audit & Supervisory Board Members
About the Canon MJ GroupAs of March 26, 2021

Iwao Hashimoto
Audit & Supervisory Board Member(Outside)

Akio Dobashi
Director(Outside)

Yoshio Osawa
Nobutoshi Matsumoto

Director(Outside)

Audit & Supervisory Board Member(Outside)
Value Creation of the Canon MJ Group

Shigeo Hasegawa
Audit & Supervisory Board Member(Outside)

Segment Strategies
Sustainable Management—ESG Initiatives

Shinichi Inoue
Audit & Supervisory Board Member(Standing)

Hatsumi Hirukawa
Director, Senior Executive Officer
Masachika Adachi
President & Representative Director

55

Canon Marketing Japan Inc. I Integrated Report 2020

Financial, ESG, and Corporate Data

Minoru Mizoguchi
Director, Senior Executive Officer

Masatoshi Tanise
Audit & Supervisory
Board Member(Standing)

Shiro Hamada
Director, Senior Executive Officer

Canon Marketing Japan Inc. I Integrated Report 202056

Financial, ESG, and Corporate Data

10-Year Consolidated Financial Summary
Millions of yen

Thousands of U.S. dollars(Note 1)

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2020

Net sales (Note 5)¥ 545,060¥ 621,134¥ 621,591¥ 632,190¥ 629,314¥ 646,003¥ 659,432¥ 657,216¥ 659,218¥ 632,419$ 5,240,962

Operating income

31,31832,44028,94130,407

27,676

26,64725,08817,013

16,802

8,442

301,135

Proﬁt before income taxes

33,46333,30330,70830,91928,90327,49825,85817,055

17,52910,972

321,760

Proﬁt attributable to owners of parent

21,99722,25020,826

20,68018,162

15,67016,03010,168

10,5796,764

211,510

Total assets

506,605

503,699

498,791

510,833

497,728

486,502479,747

467,076

462,574

447,765

4,871,202

Total stockholders’ equity (Note 4)

345,459

324,476

303,028

297,032

280,473

277,008

270,061

256,795

253,862

250,671

3,321,721

Cash ﬂows from operating activities

38,49022,053

16,99028,88533,30629,73038,191

28,781

33,7678,716

370,096

Cash ﬂows from investing activities(26,175)(94,585)(10,526)

7,964(19,461)(44,536)(15,221)(25,757)(16,067)(12,108)(251,683)

Cash ﬂows from ﬁnancing activities(6,587)(8,557)(7,839)(7,145)(6,086)(6,225)(4,545)(9,105)(11,813)(3,811)(63,337)

Cash and cash equivalents at end of year

60,13154,494

135,572

136,980

107,286

99,574

120,607

102,183108,260

102,373

578,183

Overview of the Canon MJ Group

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Years ended December 31

For the year:

Value Creation of the Canon MJ GroupAt year-end:

Cash flows:

Segment Strategies

U.S. dollars(Note 1)Per share of common stock:
Proﬁt attributable to owners of parent (Note 2)¥ 169.65¥ 171.60¥ 160.61¥ 159.48¥ 140.06¥ 120.84¥ 123.62

60.00

60.00

60.00

60.00

50.00

45.00

40.00

24.00

24.00

20.00

0.58

2,664.20

2,502.39

2,336.97

2,290.70

2,162.96

2,136.22

2,082.60

1,980.22

1,907.50

1,827.25

25.62

Cash dividends (Note 3)
Stockholders’ equity (Note 4)

¥

76.67

¥

77.45

¥

49.30

$

1.63

4. Total stockholders’ equity in the above table represents the total of stockholders’ equity and accumulated other comprehensive income (loss) in the consolidatedbalance sheets.
5. Effective ﬁscal 2013, we have changed to an accounting method that deducts a portion of sales incentives (which had previously been accounted for under selling,
general and administrative expenses) from net sales; therefore, the amount of net sales for ﬁscal 2012 and relevant key management indicators have been adjusted
retroactively.

Net Sales and Return on Sales (ROS)

Total Stockholders’ Equity and ROE(Billions of yen / %)Net Sales

Operating Income and Operating Margin

ROS

Operating
Income(Billions of yen / %)OperatingMargin32.4
30.4

659 657 659 646
632
629 632 622 621
25.1

545
3.6

28.9

(Billions of yen / Times)

5.2

302

317 325

340 348 362

383

Current
Ratio(Billions of yen / %)Total Stockholders’Equity

3.0

4.1

2.9

3.1

251 254 257

270 277

2.6
8.4 2.5

1.1

6.1 5.7

2.5
2.0 1.9 2.0 2.1

2.4 2.4

Total Assets and Total Stockholders’ Equity Ratio

Profit Attributable to Owners of Parent(Billions of yen / %)(Billions of yen)

324

4.4
16.8 17.0 3.8

ROE

Total Assets

345

377 380
3.5

4.8 4.7

4.0

1.6 1.5

Total
Current
Liabilities

Total Stockholders’Equity Ratio

398

31.3
5.7

Total
Current
Assets

2.2 2.3

165 160 157 157
151 163 165

280
6.5

297 303
7.2 6.9 7.1
6.6

448

480
463 467

56.0 54.9 55.0

487 498

511 499 504 507

56.3 56.9 56.4 58.1

20.7 20.8
60.8

64.4

68.2

18.2
16.0 15.7

10.6 10.2

4.2
130 1202.7

22.3 22.0

Financial, ESG, and Corporate Data

3.3 3.4

26.6

27.7

Working Capital

Sustainable Management—ESG Initiatives

Notes 1. The ﬁgures have been presented in U.S. dollars by translating all Japanese yen amounts at ¥104 to U.S.$1, the prevailing exchange rate as of December 31, 2020.
2. Proﬁt attributable to owners of parent per share is based on the weighted-average number of shares of common stock outstanding during the respective ﬁscal years.
3. 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.

4.0

6.8

108

1.3
FY ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20

57

Canon Marketing Japan Inc. I Integrated Report 2020

FY ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20

FY ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20

FY ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20

FY ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20

FY ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20

Canon Marketing Japan Inc. I Integrated Report 202058

Financial, ESG, and Corporate Data

Financial Review
Net Salesof large deals like those of the previous year. Maintenance service sales

Consolidated net sales for the year ended December 31, 2020, decreased

for office MFPs and laser printer cartridges decreased, as ongoing

12.2% from a year earlier, to ¥545,060 million. This stemmed fromteleworking lowered office print volumes.
Sales of IT solutions for large enterprises declined despite improved

interchangeable lens cameras. There were also rolling Companywide

orders toward the fourth quarter. This reﬂected the absence of two of the

shutdowns from April through May due to the spread of the COVID-19,

previous year’s performance drivers. They were business PC replacement

which hampered business activities. These factors offset gains in related

demand following the end of support for Windows 7 and major projects

products and services to meet rising teleworking demand.

for systems integration (SI) services and infrastructure systems. Anotherfactor was decreases in or postponements of projects owing to curtailed

Segment Information• Consumers Segment

business activities.

While sales of digital cameras spiked temporarily on the strength of aincome declined 11.4%, to ¥8,920 million.

Segment sales thus decreased 12.6%, to ¥171,238 million. Segment

government travel incentive program and other factors, demand remainedon the strength of several large projects for building electronic medical

related businesses were down.

records and medical IT infrastructure for hospitals. This offset the impact

Industrial Equipmentof the absence of the previous year’s major projects for dispensaries.

In this business unit, we provide manufacturing, inspection, and measurement

In January 2020, the Company transferred the shares of consolidated

equipment, and other products, mainly for semiconductor manufacturers.

subsidiary Canon Lifecare Solutions Inc. to Canon Medical Systems

Sales of semiconductor manufacturing equipment rose during the term, but

Corporation. In the year ended December 31, 2019, Canon Lifecare

sales of inspection and measurement equipment were down, lowering sales.

Solutions posted net sales of ¥11.0 billion and operating income of

Healthcare¥0.1 billion.

Here, we develop systems, mainly for hospital and clinic electronic

As a result of these factors, segment sales fell 29.7%, to ¥30,710

medical records, and build infrastructure. We also provide receipt

million. Segment income was up 16.3%, to ¥1,880 million, reﬂecting

computers and other offerings to dispensaries. During the year, sales roselower selling, general and administrative expenses.

Income Analysis
Consolidated net sales decreased 12.2%, to ¥545,060 million.
Cost of sales dropped 14.1%, to ¥361,077 million. Gross proﬁt was

Operating income thus dropped 3.5%, to ¥31,318 million. Total otherincome jumped 148.5%, to ¥2,145 million.

generally sluggish because constraints on mobility dampened purchasing• Area Segmentinterest. Temporary closures and shorter business hours among camera

Sales fell for office MFPs, laser printers, and other mainstay businessand appliance retailers limited selling opportunities. Sales of digitalequipment. This was despite progress in the fourth quarter with MFPinterchangeable lens and compact digital cameras thus declined

projects that had experienced delays, and reﬂected sluggish markets

Financial Position

signiﬁcantly despite favorable reviews of our EOS R5, EOS R6, and EOS

from the start of the year and business activity restrictions from rolling

Total current assets increased ¥2,945 million from the end of the previous

largely because of a ¥7,436 million decline in notes and accounts payable.

Kiss M2 mirrorless models, launched in the year under review.

shutdowns. Sales of maintenance services and laser printer cartridges

year, to ¥380,349 million. This was due mainly to a ¥15,632 million rise in

Total long-term liabilities decreased ¥6,532 million, to ¥52,050

dropped amid lower print volumes from an ongoing impact of

cash and cash equivalents and short-term loans receivable, a ¥7,339

million, principally because of a ¥6,072 million decrease in net deﬁned

teleworking, although markets gradually picked up.

million decrease in notes and accounts receivable, and a ¥6,190 million

beneﬁt liabilities.

teleworking and online learning. Sales were robust, particularly of new

down 8.5%, to ¥183,983 million. Selling, general and administrative
expenses declined 9.4%, to ¥152,665 million.

Proﬁt attributable to owners of parent therefore decreased 1.1%, to¥21,997 million. Net income per share was down ¥1.95, to ¥169.65.

and other high-value-added offerings. Reﬁllable GIGA TANK models

Demand for building teleworking environments remained highcontinued to do well, helping boost inkjet printer sales. Ink cartridgein IT solutions for small-to-medium-sized enterprises. Sales of the HOME

sales were off because the market for these items contracted amid lower

IT support cloud service were steady. Sales were up for ESET antivirus

This reﬂected a ¥18,213 million increase in buildings and structures,parent, ¥6,483 million in dividends paid, and ¥5,253 million incolor printing and New Year’s card volume.

software and ﬁrewall and other security equipment. We focused onowing largely to the completion of the second phase of the Nishi-Tokyo

remeasurements of deﬁned beneﬁt plans.

securing maintenance and operation services for customers’ IT

Data Center, with construction in progress dropping ¥12,518 million. Also,from rising telework demand and ongoing growth in gaming PC sales.

equipment, boosting order numbers. Despite increased teleworking

rental assets declined ¥1,478 million and deferred tax assets were down

These factors caused segment sales to drop 6.0%, to ¥124,875

demand, sales of business PCs dwindled in the absence of high¥1,573 million.

million. Segment income rocketed 78.0%, to ¥12,219 million. This reﬂected

replacement demand growth experienced in the previous term in line

efforts to generate earnings by lifting the sales contributions of high-with the end of support for Windows 7. Sales of IT solutions therefore fell.

value-added products, evaluating market conditions, and constraining

Segment sales accordingly decreased 12.1%, to ¥235,767 million.

Total non-current assets decreased ¥39 million, to ¥126,256 million.

Total current liabilities decreased ¥11,584 million, to ¥108,440 million,

Total net assets climbed ¥21,022 million, to ¥346,115 million. Thiswas due mainly to ¥21,997 million in proﬁt attributable to owners of

Total liabilities and net assets thus increased ¥2,906 million, to¥506,605 million.
The total stockholders’ equity ratio rose 3.8 percentage points, to68.2%. Stockholders’ equity per share rose ¥161.81, to ¥2,664.20.

Cash Flows
payments for purchases of property, plant and equipment, ¥9,995 million

with ¥22,053 million a year earlier. Prime factors were ¥33,463 million inin an increase in short-term loans receivable, net, and ¥3,730 million in• Professional Segment

proﬁt before income taxes, ¥11,254 million in depreciation andpayments for purchases of intangible assets.

• Enterprise Segment

Production Printing

amortization, ¥5,358 million in a decrease in inventories, ¥5,277 million

Net cash used in ﬁnancing activities was ¥6,587 million, compared

Sales of office multifunction printers (MFPs) declined amid sluggish

We supply fast continuous feed and cut-paper printers mainly to thein a decrease in notes and accounts receivable-trade, and ¥6,263 million

with ¥8,557 million a year earlier. This was due mainly to ¥6,512 million

markets from the start of the year, as well as owing to rolling shutdowns

printing industry. We also offer point-of-purchase systems for the retailin a decrease in notes and accounts payable-trade and ¥13,575 million inin dividends paid.

that constrained business activities. Sales of laser printers were also

sector. In the year under review, sales of monochrome continuous-feed

income taxes paid.

down because of the business activity impact and owing to the absence

printers and other products were up, but sales of consumables dropped

Segment income dropped 31.3%, to ¥9,898 million.

spending.

Net cash used in investing activities was ¥26,175 million, compared

Financial, ESG, and Corporate Data

Net cash provided by operating activities was ¥38,490 million, comparedselling, general and administrative expenses centering on advertising

Sustainable Management—ESG Initiatives

Sales of IT products were up signiﬁcantly on gains in PC peripherals

drop in merchandise and ﬁnished goods.

Segment Strategies

Demand for consumer inkjet printers jumped as a result of greater

Value Creation of the Canon MJ Groupsigniﬁcant demand downturns in key business equipment and digitalamid lower print volumes, while sales of point-of-purchase production-

Overview of the Canon MJ Group

Business Performance

Cash and cash equivalents at the end of the year were up ¥5,637
million from a year earlier, at ¥60,131 million.

with ¥94,585 million a year earlier. This was due to a ¥14,695 million in

59

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202060

Financial, ESG, and Corporate Data

Consolidated Balance Sheets¥ 60,131
105,328
27,826
180,007
7,123(66)
380,349¥ 54,494
112,667
34,110170,0126,197(76)377,404

28,36069,905167
16,26638,17879
1,577
154,532(70,802)
83,73028,91851,692
167
16,88739,656147
14,095
151,562(68,748)
82,814

5,374
1
294
1
5,670

4,148
2
316
3
4,469

11,30336
416
3,427
19,2202,659(205)
36,856126,256¥ 506,605

11,03836393
4,359
20,7932,775(382)
39,012
126,295¥ 503,699

LIABILITIES AND NET ASSETSCURRENT LIABILITIES:
Notes and accounts payable (Note 10)
Lease obligations (Notes 10 and 18)
Accrued income taxes
Consumption taxes payable
Accrued expenses
Accrued bonuses
Accrued directors’ bonuses
Accrued product warranties
Accrued loss on order received (Note 4)
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:
Lease obligations (Notes 10 and 18)
Deferred tax liabilities (Note 13)
Allowance for long-term continuous service rewards
Net deﬁned beneﬁt liabilities (Note 12)
Other long-term liabilities (Note 18)
Total long-term liabilities

2020

2019

¥ 44,107
54
7,005
5,548
16,16729,357
108,440¥ 51,543
72
8,236
5,902
17,856
3,373
100
652
189
32,101
120,02474
1952
47,884
3,139
52,050103—
1,043
53,956
3,480
58,58273,30373,30382,815
188,482(2,104)342,496

82,820202,783(31,926)
326,980

4,231
(29)
5
(1,244)2,963
656
346,115¥ 506,605

3,930
11
52
(6,497)(2,504)617
325,093¥ 503,699

5,664
75
454
9

COMMITMENTS AND CONTINGENT LIABILITIES (Notes 3 and 9)
NET ASSETS:STOCKHOLDERS’ EQUITY (Notes 8 and 19):
Common stock
Authorized 299,500,000 shares; Issued 131,079,972 and 151,079,972 shares
as of December 31, 2020 and 2019, respectively
Capital surplus
Retained earnings
Treasury stock
Total stockholders’ equity
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):Net unrealized gains on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of deﬁned beneﬁt plans
Total accumulated other comprehensive income (loss)
NON-CONTROLLING INTERESTS
Total net assets
Total liabilities and net assets

Financial, ESG, and Corporate Data

INVESTMENTS AND OTHER ASSETS:
Investments in securities (Notes 10 and 11)Long-term loans receivable
Net deﬁned beneﬁt assets (Note 12)
Lease deposits (Notes 17 and 18)
Deferred tax assets (Note 13)
Other investments and other assets
Allowance for doubtful receivables
Total investments and other assets
Total non-current assets
Total assets (Note 14)

2019

Sustainable Management—ESG Initiatives

INTANGIBLE ASSETS:
SoftwareLease assets
Utilization rights
Other intangible assets
Total intangible assets

2020

Segment Strategies

PROPERTY, PLANT AND EQUIPMENT:Land
Buildings and structures
Machinery and vehicles
Furniture and ﬁxtures
Rental assets
Lease assets
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment

Millions of yen

Millions of yen

Value Creation of the Canon MJ GroupASSETS
CURRENT ASSETS:
Cash and cash equivalents (Notes 10 and 11)
Notes and accounts receivable (Note 10)
Inventories (Note 4)
Short-term loans receivable (Note 10)
Other current assets
Allowance for doubtful receivables
Total current assets

Overview of the Canon MJ Group

Canon Marketing Japan Inc. and Consolidated Subsidiaries
December 31, 2020 and 2019

• See accompanying notes to consolidated ﬁnancial statements.
• Certain reclassiﬁcations have been made in the consolidated ﬁnancial statements of the previous ﬁscal year to conform to the classiﬁcations used in the current ﬁscal year.

61

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202062

Financial, ESG, and Corporate Data

Consolidated Statements of Comprehensive Income

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Years ended December 31, 2020 and 2019

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Years ended December 31, 2020 and 2019

399
(12)
452
(6)
231
2,744
283
—
278
(738)
(1,021)
(317)
(274)
126
2,145
33,463

350
(13)
768
—
248
—
13
(83)
2
—
(207)
(329)
—
114
863
33,303

12,526(1,134)
11,392¥ 22,071

12,626(1,663)
10,963¥ 22,340¥¥

74
21,997¥ 22,071

PROFIT
OTHER COMPREHENSIVE INCOME (LOSS) (Note 7):
Net unrealized gains or losses on available-for-sale securities
Deferred gains / (losses) on hedges
Foreign currency translation adjustments
Remeasurements of deﬁned beneﬁt plans, net of tax
Total other comprehensive income (loss)
Comprehensive income
COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of parent
Non-controlling interests

2020¥ 22,071

2019¥ 22,340

303
(40)
(56)
5,253
5,460
¥ 27,531

1,412
9
(25)
7,229
8,625
¥ 30,965¥ 27,464
67¥ 30,87590• See accompanying notes to consolidated ﬁnancial statements.

Sustainable Management—ESG Initiatives

PROFIT ATTRIBUTABLE TO:
Non-controlling interests
Owners of parent
Proﬁt

2019
¥ 621,134
420,108
201,026
168,586
32,440

Segment Strategies

INCOME TAXES (Note 13):
Current
Deferred
Total income taxes
Proﬁt

2020
¥ 545,060
361,077
183,983
152,665
31,318Millions of yen

Value Creation of the Canon MJ GroupNET SALES (Note 14)
COST OF SALES (Note 4)
Gross proﬁt
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 5)
Operating income (Note 14)
OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Insurance income
Foreign exchange losses
Gain on investments in partnership
Subsidies for employment adjustment
Gain on sales of ﬁxed assets (Note 6)
Loss on impairment of ﬁxed assets
Gain on sales of investments in securities (Note 11)
Loss on sales of shares of subsidiaries and associates (Note 16)
Loss on sales and disposal of ﬁxed assets (Note 6)
Loss on devaluation of investments in securities (Note 11)
Loss on COVID-19 (Note 6)
Other, net
Total other income
Proﬁt before income taxes

Millions of yen

Overview of the Canon MJ Group

Consolidated Statements of Income

90
22,250¥ 22,340
Yen¥ 169.65¥ 169.62¥ 60.00

Financial, ESG, and Corporate Data

PER SHARE DATA:
Proﬁt attributable to owners of parent
Basic
DilutedCash dividends applicable to the year

¥ 171.60¥ 171.58¥ 60.00• See accompanying notes to consolidated ﬁnancial statements.

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Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202064

Financial, ESG, and Corporate Data

Consolidated Statements of Changes in Net Assets

Consolidated Statements of Cash Flows
Millions of yen

Number of sharesof common stock
151,079,972
151,079,972

73,303

Stockholders’ equity
CapitalRetained
surplusearnings¥ 82,820¥ 189,958(997)
82,820188,961
22,250(8,428)Treasurystock¥ (31,924)(31,924)(2)

151,079,972¥ 73,303¥ 82,820(20,000,000)

131,079,972¥ 73,303¥ 202,783
21,997(6,483)¥ (31,926)(3)
3
29,822

2(29,822)
29,815(29,815)¥ 82,815¥ 188,482¥ (2,104)

1,411¥ 3,930301¥ 4,231

2

9
¥ 11

(40)
¥ (29)

76

(24)
¥ 52

(47)
¥5

(13,726)

543

7,229
¥ (6,497)

90
(16)
0
¥ 617

5,253
¥ (1,244)

74
(28)
(7)
¥ 656

¥ 303,571(997)
302,574
22,250(8,428)
(2)
90
(16)
8,625
¥ 325,093
21,997(6,483)
(3)
5
—
—
74
(28)
5,460
¥ 346,115¥ 33,463¥ 33,303

11,254
—
(180)
2,028
(19)
2,324
(399)
12
(150)
(278)
317
738
(231)
5,277
5,358
(6,263)(1,568)51,683395(13)(13,575)
38,49012,257
83
(67)
4,469
(19)
(65)
(350)
13
190
(2)
329
—
(248)
4,858
(1,805)(24,301)
4,039
32,684347(13)(10,965)
22,053

CASH FLOWS FROM INVESTING ACTIVITIES:Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchases of intangible assets
Payments for purchases of investments in securities
Proceeds from sales of investments in securities
Proceeds from sales of shares of a subsidiary resulting in change in scope of consolidation
Decrease (increase) in short-term loans receivable, net
Other, net
Net cash provided by (used in) investing activities(14,695)
1,010(3,730)
(311)
697
829
(9,995)
20(26,175)(11,651)
17(1,451)(1,384)
328—(79,998)(446)(94,585)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of ﬁnance lease obligations
Payments for purchases of treasury stock
Dividends paid
Other, net
Net cash used in ﬁnancing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(73)
(3)
(6,512)
1(6,587)(91)
5,637
54,494¥ 60,131(110)(2)(8,442)(3)(8,557)
11(81,078)
135,572¥ 54,494

Financial, ESG, and Corporate Data

• See accompanying notes to consolidated ﬁnancial statements.

2,519

Total net
assets2019

Sustainable Management—ESG Initiatives

BALANCE AT JANUARY 1, 2019
Cumulative effect of changes in accounting policies (Note 2)
Restated balance at beginning of year
Proﬁt attributable to owners of parent
Cash dividends
Purchase of treasury stock
Proﬁt attributable to non-controlling interests
Cash dividends paid to non-controlling interests
Other, net
BALANCE AT JANUARY 1, 2020
Proﬁt attributable to owners of parent
Cash dividends
Purchase of treasury stock
Disposition of treasury stock
Cancellation of treasury stock
Transfer from retained earnings to capital surplus
Proﬁt attributable to non-controlling interests
Cash dividends paid to non-controlling interests
Other, net
BALANCE AT DECEMBER 31, 2020

Accumulated other comprehensive income (loss)
Net unrealized Deferred gains Foreign currency Remeasurements
Non-controlling
gains on available- or losses ontranslation of deﬁned beneﬁt
interests
for-sale securities
hedgesadjustmentsplans¥ 2,519¥ 2¥ 76¥ (13,726)
¥ 543

2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Proﬁt before income taxes
Adjustments for:
Depreciation and amortization
Loss on impairment of ﬁxed assets
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in net deﬁned beneﬁt liabilities
Decrease (increase) in net deﬁned beneﬁt assets
Increase (decrease) in accrued bonuses
Interest and dividend income
Interest expense
Loss (gain) on sales and disposal of property, plant and equipment, net
Loss (gain) on sales of investments in securities
Loss (gain) on valuation of investments in securities
Loss (gain) on sales of shares of subsidiaries and associates
Loss (gain) on investments in partnership
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

Segment Strategies

Millions of yen

Millions of yen

Value Creation of the Canon MJ GroupBALANCE AT JANUARY 1, 2019
Cumulative effect of changes in accounting policies (Note 2)
Restated balance at beginning of year
Proﬁt attributable to owners of parent
Cash dividends
Purchase of treasury stock
Proﬁt attributable to non-controlling interests
Cash dividends paid to non-controlling interests
Other, net
BALANCE AT JANUARY 1, 2020
Proﬁt attributable to owners of parent
Cash dividends
Purchase of treasury stock
Disposition of treasury stock
Cancellation of treasury stock
Transfer from retained earnings to capital surplus
Proﬁt attributable to non-controlling interests
Cash dividends paid to non-controlling interests
Other, net
BALANCE AT DECEMBER 31, 2020

Commonstock¥ 73,303

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Years ended December 31, 2020 and 2019

Overview of the Canon MJ Group

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Years ended December 31, 2020 and 2019

• See accompanying notes to consolidated ﬁnancial statements.

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Canon Marketing Japan Inc. I Integrated Report 202066

Financial, ESG, and Corporate Data

Notes to Consolidated Financial Statements
Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated ﬁnancial statements of Canon
Marketing Japan Inc. (the “Company”) and its consolidated
subsidiaries (the “Group”) are prepared on the basis of accounting
principles generally accepted in Japan, which are different in certain
respects as to application and disclosure requirements ofInternational Financial Reporting Standards, and are compiled from

Summary of Significant Accounting Policies(a) Principles of Consolidation
The accompanying consolidated ﬁnancial statements for the year
ended December 31, 2020 and 2019, include the accounts of theCompany and all of its 17 (19 in 2019) subsidiaries. The changes
include sale of Canon Lifecare Solutions Inc. and liquidation of Canon
IT solutions (Philippines), Inc.
All intercompany accounts and transactions are eliminated inconsolidation.

(e) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation iscomputed by the declining-balance method for property and67

Canon Marketing Japan Inc. I Integrated Report 2020(h) Allowance for Doubtful Receivable
To cover possible losses on collection, an allowance for receivables
with higher risk of collectability is estimated on an individual basis.
For all other receivables, an allowance is calculated based on the pastexperiences of uncollected amount.
(i) Provision for Accrued Bonuses
The estimated payable for current year’s portion of employees’ bonus
is recorded based on the next round payment.
(j) Provision for Accrued Directors’ Bonuses
The estimated payable for current year’s portion of director’s bonus isrecorded based on the next round payment.

(m) Allowance for Long-Term Continuous Service Rewards
The estimated amount payable is recorded in order to cover paymentof rewards to employees in accordance with internal regulations on
long-term continuous service.
(n) Accounting Method for Retirement Benefits(1) Method of attributing estimated amounts of retirement beneﬁts toperiods
In calculating retirement beneﬁt obligations, the estimated amount of
retirement beneﬁts attributed to a period up to the current ﬁscal year
is primarily determined using the beneﬁt formula basis.
(2) Amortization of unrecognized actuarial gains and losses and priorservice cost
Unrecognized prior service cost is amortized by the straight-line
method over the average remaining service period of the eligible
employees at the time when it arose. Unrecognized actuarial gains
and losses are amortized from the ﬁscal year following the year inwhich they arose by the straight-line method over the averageremaining service period of the eligible employees.
(3) Application of simpliﬁed method at smaller-sized companies
Certain consolidated subsidiaries apply the simpliﬁed method for
calculating net deﬁned beneﬁt liabilities and net periodic beneﬁt
costs. Under this method, the payments for voluntary early retirementof all eligible employees at the end of the ﬁscal year are recognized
as retirement beneﬁt obligations.
(o) Income Taxes
Deferred tax assets and liabilities are recorded to reﬂect the impact of
temporary differences between assets and liabilities recognized forﬁnancial reporting purposes and such amounts recognized for tax
purposes. These deferred taxes are measured by applying thestatutory income tax rate to the temporary differences.

(r) Per Share Amounts
Basic earnings (proﬁt attributable to owners of parent) per share iscomputed based on the weighted-average number of shares ofcommon stock outstanding during each period. The computation ofdiluted earnings per share reﬂects the maximum possible dilution
from exercise of option.
Cash dividends per share presented in the accompanying
consolidated statements of income are dividends applicable to therespective ﬁscal years, including dividends to be paid after the end of
the respective ﬁscal years.
(s) Standards for Recognizing Significant Revenues and Expenses
The Company and its consolidated subsidiaries adopted AccountingStandards Board of Japan (ASBJ) Statement No. 29, AccountingStandard for Revenue Recognition, March 30, 2018, and ASBJ
Guidance No.30, Implementation Guidance on Accounting Standard
for Revenue Recognition, March 30, 2018. The normal timing forrecognizing key performance obligations and revenues in corebusinesses is as follows.
The Group sells and provides services for Canon products. It also
provides products and services in the IT solutions and industrial
equipment and healthcare ﬁelds. For sales of offerings that do not
require customer acceptance inspections, customers normally obtain
control of products upon delivery. The Group’s performanceobligations are thereby deemed fulﬁlled, so revenue is recognized
upon product delivery. Services mainly entail maintenanceagreements, so revenue is recognized evenly over the lengths of these
agreements or, in accordance with the extent of product usage, basedon amounts determined in those agreements.
Each reporting segment has unique revenue recognition methods,
as outlined below. The Enterprise and Area segments provide similar
products and services, so their revenues are stated collectively.

Financial, ESG, and Corporate Data(d) Inventories
Merchandise and service parts are valued at cost determined by themonthly moving-average method. The carrying amount in the balance
sheet represents the amount after write-downs due to decreased
proﬁtability.
Work in process is valued at cost determined by the speciﬁc
identiﬁcation method.
Supplies are valued at cost determined by the last-purchaseprice method. The carrying amount in the balance sheet represents
the amount after write-downs due to decreased proﬁtability.

(g) Leases
Leased assets under ﬁnance lease contracts are depreciated by thestraight-line method over their respective lease contract term withzero residual value.

(q) Foreign Currency Financial Statements
The balance sheet accounts of the foreign subsidiaries are translated
into Japanese yen at the current exchange rates in effect at thebalance sheet date, except for the components of net assets,
excluding non-controlling interests, which are translated at their
historical exchange rates.
Revenue and expense accounts are translated at the averageexchange rates prevailing during the year.

Sustainable Management—ESG Initiatives(c) Securities
Securities consist of debt and equity securities. Held-to-maturity debt
securities are stated at amortized cost.
Available-for-sale marketable securities are stated at fair market
value, with unrealized gain or loss, net of the applicable taxes,
reported as a separate component of net assets. Available-for-salesecurities whose fair value is not readily determinable are stated atcost determined by the moving-average method.

(f) Intangible Assets
Software for sales is depreciated by the amount larger of thedepreciation calculated based on the estimated sales quantity, theestimated sales revenue, or the straight-line method using theestimated effective duration of sales (up to three years). Internal-use
software is depreciated by the straight-line method based on thelength of in-house durability (ﬁve years).

(l) Provision for Accrued Loss on Order Received
Certain consolidated subsidiaries provide the service under softwaredevelopment contracts. Expected loss from those contracts is recorded
as provision for accrued loss on order received at each year end, if
occurrence of loss is probable and loss amount is reasonably estimated.

Segment Strategies(b) Cash Equivalents
The Company and its consolidated subsidiaries consider all highly
liquid investments, including securities, time deposits, and certiﬁcatesof deposit, all of which mature or become due within three months ofthe date of acquisition, to be cash equivalents.

equipment, with the exception of items that are depreciated by thestraight-line method at rates based on the estimated useful lives of
the respective assets.
Such items are leased assets, certain assets of consolidated
subsidiaries, buildings purchased on or after April 1, 1998 (exclusiveof furniture and ﬁxtures), and furniture and ﬁxtures and structurespurchased on or after April 1, 2016.
The useful lives are as follows:
Buildings and structures, from 3 years to 75 years; furniture andﬁxtures, from 2 years to 20 years; and rental assets, 3 years.

in foreign currencies are translated into Japanese yen at the current
exchange rates in effect at the balance sheet date except for foreign
currency-denominated payables covered by exchange contracts forhedge purpose. The foreign exchange gains and losses ontranslation are recognized in the accompanying consolidated
statements of income.

Value Creation of the Canon MJ Group2the consolidated ﬁnancial statements prepared by the Company as
required by the Japanese Financial Instruments and Exchange Act.
Certain accounts and items presented in the original consolidated
ﬁnancial statements in Japanese have been reclassiﬁed for theconvenience of readers outside of Japan.

(k) Provision for Accrued Product Warranties
Costs arising from a one-year free warranty contract for consumer
products are recorded based on the past experiences of free repairs.
To cover payment of free program maintenance and repairs for certain
consolidated subsidiaries, the estimated amount of future costs isrecorded based on past experiences.

Overview of the Canon MJ Group1(p) Translation of Foreign Currency Accounts
All short-term and long-term receivables and payables denominatedCanon Marketing Japan Inc. I Integrated Report 2020

68

Financial, ESG, and Corporate Data
Notes to Consolidated Financial Statements

Professional segment
Where equipment performance is subject to customer acceptanceinspections, sales are recognized upon such acceptance inspections.

(2) Hedging instrument and Hedged item
Hedging instrument—Forward exchange contracts
Hedged item—Foreign currency-denominated payables(4) Hedging instrument’s effectiveness
The Company does not assess hedge effectiveness at ﬁscal year-end
because hedging instrument and hedged item have the same
currency, amount, and due date in accordance with the Company’s
hedging policy.

69

Canon Marketing Japan Inc. I Integrated Report 2020(v) New Accounting Pronouncements(Accounting Standard and Implementation Guidance on Revenue
Recognition)
Accounting Standard for Revenue Recognition (ASBJ Statement No. 29,
March 31, 2020)
Implementation Guidance on Accounting Standard for Revenue
Recognition (ASBJ Guidance No. 30, March 31, 2020)(Accounting Standard for Accounting Policy Disclosures, Accounting
Changes and Error Corrections)
Accounting Standard for Accounting Policy Disclosures, Accounting
Changes and Error Corrections (ASBJ Statement No. 24, March 31, 2020)(1) Summary
ASBJ established the requirements for presentation and disclosure
related to revenue recognition.
(2) Scheduled application date
The Group plans to apply the relevant accounting standards from the
beginning of the ﬁscal year ending December 31, 2022.
(Accounting Standard for Fair Value Measurement and other)
Accounting Standard for Fair Value Measurement (ASBJ Statement No.
30, July 4, 2019)
Accounting Standard for Measurement of Inventories (ASBJ Statement
No.9, July 4, 2019)
Accounting Standard for Financial Instruments (ASBJ Statement No.10,
July 4, 2019)
Implementation Guidance on Accounting Standard for Fair Value
Measurement (ASBJ Guidance No. 31, July 4, 2019)
Implementation Guidance on Disclosures about Fair Value of Financial
Instruments (ASBJ Guidance No. 19, March 31, 2020)(1)Summary
In order to improve the comparability with the international accounting
standards, ”Accounting Standard for Fair Value Measurement” and“Implementation Guidance on Accounting Standard for Fair Value
Measurement” were developed and guidance on fair value measurement
was established. The accounting standard and the implementation
guidance apply to the fair value of the following items:• Financial instruments under “Accounting Standard for Financial
Instruments”• Inventories held for trading purposes under “Accounting Standard
for Measurement of Inventories”
In addition, “Implementation Guidance on Disclosures about Fair

(1) Summary
This accounting standard clariﬁes the disclosure requirement foraccounting principles and procedures which are not covered by3(Accounting Standard for Disclosure of Accounting Estimates)
Accounting Standard for Disclosure of Accounting Estimates (ASBJ
Statement No. 31, March 31, 2020)(1) Summary
The purpose of this accounting standard is to disclose information toassist users of the ﬁnancial statements to understand the content ofaccounting estimates of the items whose risks materially affect theﬁnancial statements in the following ﬁscal year.
(2) Scheduled application date
The Group plans to apply the accounting standard from the end of theﬁscal year ending December 31, 2021.

Contingent Liabilities
Contingent liabilities as of December 31, 2020 and 2019, were as follows:
Millions of yen

Guarantees for employees’ housing loans
Total

4

2020
¥6
¥6

2019
¥7
¥7

Inventories
Inventories as of December 31, 2020 and 2019, were composed of the following:
Millions of yen

Merchandise
Service parts
Work in process
Supplies
Total

2020
¥ 23,198
3,893
104
631
¥ 27,826

2019¥ 29,512
3,769
206
623
¥ 34,110

Financial, ESG, and Corporate Data(u) Application of Consolidated Taxation System
The Company and certain consolidated subsidiaries have adopted theconsolidated taxation system.
The Company plans to shift from current consolidated taxation system
to group tax sharing system which is to be established in near future.
With regard to differences under the group tax sharing systemestablished by Act on Partial Revision of the Income Tax Act (Act No. 8,2020) and differences under the single tax return ﬁling system(3) Impact of applying relevant accounting standards
The Group is assessing the impact on the consolidated ﬁnancial
statements of applying the Accounting Standard for Fair Value
Measurement.

(2) Scheduled application date
The Group plans to apply the accounting standard from the end of theﬁscal year ending December 31, 2021.

Sustainable Management—ESG Initiatives(3) Hedging policy
The Company hedges the risk of changes in foreign currencydenominated payables’ Japanese Yen equivalent cash ﬂow
attributable to changes in the related foreign currency exchange rates.

(2) Scheduled application date
The Group plans to apply the relevant accounting standards from the
beginning of the ﬁscal year ending December 31, 2022.

current accounting standards.

Segment Strategies(t) Key Hedge Accounting Methods(1) Hedge accounting method
Accounts payable denominated in foreign currencies for which foreignexchange forward contracts are used to hedge the foreign currency
ﬂuctuations is translated at the contracted rate if the forward
contracts qualify for hedge accounting.

Value of Financial Instruments” was revised and established theprinciples regarding disclosures such as a breakdown of the fair valueof ﬁnancial instruments by level of the fair value hierarchy.

Value Creation of the Canon MJ GroupEnterprise and Area segments
For product repairs and installations and other services, sales arerecognized when it is deemed that services have been completed in
keeping with performance obligations. Contract development softwaresales are recognized based on input methods for software for which
reasonable progress can be estimated. If it is impossible to estimate
reasonable progress, sales are recognized based on cost recovery
methods for recoverable expenses.

reexamined together with transition to the group tax sharing system,
the Company and certain consolidated subsidiaries calculate theamounts of deferred tax assets and deferred tax liabilities based on
the Income Tax Act before the revision, not applying Paragraph 44 of
ASBJ Guidance No. 28, Implementation Guidance on Tax EffectAccounting, issued on February 16, 2018, as permitted by Paragraph 3of the PITF No. 39, Practical Solution on the Treatment of Tax EffectAccounting for the Transition from the Consolidated Taxation System
to the Group Tax Sharing System, issued on March 31, 2020.

Overview of the Canon MJ Group

Consumers segment
Sales are measured at discounted prices pledged in agreementswith customers, net of rebates and other factors in line with sales.
Estimates are based on past trends and other known factors attimes of sale. Sales are recognized to the extent that signiﬁcant
reversals are unlikely.

Note: For the software development contracts from which contract losses are expected, the inventory related to such contracts and relevant reserves for contract losses do not offset each other and have beenrecorded in gross amounts in current assets and current liabilities, respectively.

Write-downs of inventories for the years ended December 31, 2020 and 2019, net of the amount of the reversal, were included in the following account:
Millions of yen

Cost of sales

2020
¥ 964

2019
¥ 1,381

Canon Marketing Japan Inc. I Integrated Report 202070

Financial, ESG, and Corporate Data

7

Selling, General and Administrative Expenses
The primary components of “Selling, general and administrative expenses” for the years ended December 31, 2020 and 2019, were as follows:2019¥ 76,235
2,795
100
397
9,203
534
1

Millions of yen

2020

2019

Amount arising during the year

¥ 667

¥ 2,207

Reclassiﬁcation adjustments

(221)

(160)

Pre-tax amount

446

2,047

Tax effect

(143)

(635)

Net-of-tax amount

303

1,412

(59)

14

Pre-tax amount

(59)

14

Tax effect

19

(5)

Net-of-tax amount

(40)

9

(56)

(25)

Pre-tax amount

(56)

(25)

Tax effect——Net-of-tax amount

(56)

(25)

Amount arising during the year

4,744

5,731

Reclassiﬁcation adjustments

2,877

4,739

Pre-tax amount

7,621

10,470Tax effect(2,368)(3,241)Net-of-tax amount

5,253

7,229

¥ 5,460¥ 8,625

Net unrealized gains or losses on available-for-sale securities:

Research and development costs included in “Selling, general and administrative expenses” and “Cost of sales” for the years ended December 31, 2020 and 2019, amounted to ¥427 million and ¥495
million, respectively.

Value Creation of the Canon MJ Group

Salaries and allowances
Provision for accrued bonuses
Provision for accrued directors’ bonuses
Provision of allowance for long-term continuous service rewards
Retirement benefit costs
Provision for accrued product warranties
Provision of allowance for doubtful receivables

Other Comprehensive Income (Loss)
The following table shows amount arising during the year, reclassiﬁcation adjustments, pre-tax amount, tax effect, and net-of-tax amount foreach component of other comprehensive income (loss) for the years ended December 31, 2020 and 2019:

Millions of yen

2020¥ 69,828
4,988
75
368
7,119
446
4

Overview of the Canon MJ Group

5

Deferred gains or losses on hedges:
Amount arising during the year

6

Other Income (Expenses)
1. The components of “Gain on sales of ﬁxed assets” for the years ended December 31, 2020 and 2019, were as follows:
Millions of yen

Foreign currency translation adjustments:

00Remeasurements of deﬁned beneﬁt plans:

—
¥ 283

0
¥ 13

Amount arising during the year

2. The components of “Loss on sales and disposal of ﬁxed assets” for the years ended December 31, 2020 and 2019, were as follows:
Millions of yen

Buildings and structures
Furniture and fixtures
Rental assets
Software
Other
Total

2020
¥ (26)
(36)
(62)
(888)
(9)
¥ (1,021)2019¥ (91)
(40)
(73)
(3)
(0)
¥ (207)

Total other comprehensive income (loss)

8

Sustainable Management—ESG Initiatives

2019
¥8
3
2
—
—

Segment Strategies

Buildings and structures
Machinery and vehicles
Furniture and fixtures
Rental assets
Land
Software
Other
Total

2020
¥ 103
2
2
1
175

Common Stock and Dividends
1. The following table shows the movement of number of common stock for the years ended December 31, 2020 and 2019.

Issued stock
Treasury stock

As of January 1,
2019

Increase orpurchase(Thousands ofshares)151,080
21,413—
1

Decrease or sale
As of December 31,(Thousands of2019shares)——151,080
21,414

Increase orpurchase(Thousands ofshares)—1

Financial, ESG, and Corporate Data

3. Loss on COVID-19 mainly related to event cancellation fees, resulted from the government’s restrictions on events and outdoor gatherings in
response to the outbreak of COVID-19.

Decrease or sale
As of December 31,(Thousands of2020
shares)

20,00020,002131,080
1,413

Notes: 1. The decrease of issued stock of 20,000 thousand shares was due to the cancellation of treasury stock.
2. The increase of treasury stock of 1 thousand shares was due to the purchase of fractional stock.
3. The decrease of treasury stock of 20,002 thousand shares was due to the cancellation of treasury stock, the disposal of performance-linked stock incentives, and the sale of fractional stock.

71

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202072

Financial, ESG, and Corporate Data
Notes to Consolidated Financial Statements

2020
Resolution date

Annual dividendInterim dividend

March 26, 2020
July 27, 2020

Total dividends Dividend per share(Millions of yen)
(Yen)
¥ 3,890¥ 30¥ 2,593¥ 20

Resolution date
March 27, 2019
July 23, 2019

Total dividends Dividend per share(Millions of yen)
(Yen)
¥ 4,538¥ 35¥ 3,890¥ 30

Annual dividend of ¥5,187 million (¥40 dividend per share) was resolved by the General Meeting of Shareholders held on March 26, 2021.
Total dividend per share was ¥60 for ﬁscal 2020 and ﬁscal 2019.

Derivative transactions consist of forward exchange contracts tohedge against the risks of ﬂuctuations in foreign currency-denominatedtrade payables.
(3) Supplementary explanation on fair values of ﬁnancial instruments
The fair values of ﬁnancial instruments include not only values basedon market quotations, but also values calculated on a theoreticalbasis in cases where market quotations are not available. Such values
may vary depending on different assumptions, as variables arefactored into the calculation of such values.

Value Creation of the Canon MJ Group

Dividends

2019

equity securities issued by business counterparties of the Group, andare exposed to market price ﬂuctuation risk. Regarding this risk, theGroup periodically monitors the fair values of the securities and theﬁnancial condition of their issuers, i.e., business counterparties. In
addition, for securities other than held-to-maturity debt securities,
the Group continuously reviews the status of security holdings, taking
market conditions and relationships with business counterparties into
consideration.
Trade payables, consisting of notes and accounts payable, aremainly those due within six months.

Overview of the Canon MJ Group2. Matters regarding dividends
The Company distributes a semiannual interim dividend by resolution of the Board of Directors and annual dividend by resolution of the General
Meeting of Shareholders.
Semiannual interim dividends is paid to the common stock holders of the Company as of semiannual period-end and annual dividend is paid
to the common stock holders of the Company as of year-end.
Resolution date, total dividends, and dividend per share for the years ended December 31, 2020 and 2019, were as follows:

2. Fair values of ﬁnancial instruments
The book values of ﬁnancial instruments in the consolidated balance sheets as of December 31, 2020 and 2019, their fair values, and thedifferences between the two are as follows. The table below, however, excludes the ﬁnancial instruments whose fair values are not readily
determinable (see Note 2).
Millions of yen

2020

9

Lease Transactions

Millions of yen

Due within one year
Due after one year
Total

2020
¥ 2,6118,479¥ 11,090

2019¥ 2,486
9,203¥ 11,689

2. Lessors’ accounting
The following table shows future minimum lease income subsequent to December 31, 2020 and 2019, for noncancelable operating leases:(1) Cash and deposits(2) Notes and accounts receivable
Allowance for doubtful accounts
Notes and accounts receivable, net(3) Short-term investments in securities and investments in securities(4) Short-term loans receivable
Total assets(5) Notes and accounts payable
Total liabilities

Fair value¥ 59,631

105,328

105,328

10

Financial Instruments

(66)

(66)

—

105,262
9,558
180,007¥ 354,458¥ 44,107¥ 44,107

—
—
—
—
—
—
Millions of yen(2) Types and risks of ﬁnancial instruments and systems to control
those risks

73

Canon Marketing Japan Inc. I Integrated Report 2020

Operating receivables, consisting of notes and accounts receivable,
are exposed to credit risks of customers. The Group strives to mitigate
these risks by strict credit control utilizing credit information provided
by external credit agencies, as well as by credit insurance and otherrisk-hedging means.
Short-term loans receivable are mainly the loans to the parent
company by the Company, rendered in compliance with the internal
regulations for investment and management of funds.
Short-term investments in securities and investments insecurities consist primarily of held-to-maturity debt securities and2019(1) Cash and deposits(2) Notes and accounts receivable
Allowance for doubtful accounts
Notes and accounts receivable, net(3) Short-term investments in securities and investments in securities(4) Short-term loans receivable
Total assets(5) Notes and accounts payable
Total liabilities

Book value¥ 53,994

Fair value¥ 53,994

112,667

112,667

(76)

(76)

112,591

112,591

9,059
170,012¥ 345,656¥ 51,543¥ 51,543

9,059
170,012¥ 345,656¥ 51,543¥ 51,543

Difference
—
—
—
—
—
—
—
—
—

Canon Marketing Japan Inc. I Integrated Report 2020

Financial, ESG, and Corporate Data

1. Information on ﬁnancial instruments(1) Policies for ﬁnancial instruments
The Group limits its asset management to ﬁnancial instrumentscharacterized as very safe and believes that ﬁnancing should mainly
be conducted through the use of Group ﬁnances whenever necessary.
The Company enters into derivative transactions to hedge against
foreign exchange ﬂuctuation risks and not for speculative purposes.

—

Sustainable Management—ESG Initiatives

Due within one year
Due after one year
Total

2019
¥ 2,148
2,406¥ 4,554—

105,262
9,558
180,007¥ 354,458¥ 44,107¥ 44,107

Millions of yen

2020¥ 1,819
2,998¥ 4,817Difference

Segment Strategies

1. Lessees’ accounting
The following table shows future minimum lease payments subsequent to December 31, 2020 and 2019, for noncancelable operating leases:

Book value¥ 59,631

74

Financial, ESG, and Corporate Data
Notes to Consolidated Financial Statements

11

Overview of the Canon MJ Group

Securities
Securities as of December 31, 2020 and 2019, were classiﬁed and included in the following accounts:
Millions of yen

Securities classiﬁed as:
Available-for-sale:
Investments in securities
Held-to-maturity:
Cash and cash equivalents
Total

2020

2019

¥ 11,303¥ 11,038500¥ 11,803500¥ 11,538

Value Creation of the Canon MJ Group

Notes: 1. Calculation methods of fair values of ﬁnancial instruments and other matters related to securities are as below:
Assets(1) Cash and deposits, (2) Notes and accounts receivable, andthe prices at the security exchanges or quotations obtained from
(4) Short-term loans receivablecounterparty ﬁnancial institutions. Details of securities by holding
The book values of these assets are used as their fair values, since
objectives are described in Note 11 Securities.
they are to be settled in the short term and, accordingly, their bookvalues approximate their fair values.
Liabilities(5) Notes and accounts payable(3) Short-term investments in securities and investments in securities The book values of these liabilities are used as their fair values, since
The fair values of equity securities are based on the prices at thethey are to be settled in the short term and, accordingly, their booksecurity exchanges, and those of debt securities are based onvalues approximate their fair values.
Notes: 2. The book values of ﬁnancial instruments whose fair values are not readily determinable as of December 31, 2020 and 2019, were as follows:
Millions of yen

2020¥ 1,380¥ 865

Equity securities
Investments in investment partnerships

2019¥ 1,564¥ 915

These ﬁnancial instruments are not included in (3) Short-term investments in securities and investments in securities in the preceding table offair values, since they do not have market prices and, therefore, their fair values are not readily determinable.

Millions of yen

Due within
1 year¥ 53,994
112,6672019
Due after
1 year
—
—

2020
Cost
Securities classiﬁed as:
Available-for-sale:
Equity securities
Held-to-maturity:
Cash and cash equivalents
Total

Unrealized gains—
500
170,012¥ 337,173————

Fair value¥ 2,993¥ 6,163¥ (98)¥ 9,058500¥ 3,493——500¥ 6,163¥ (98)¥ 9,558

Millions of yen

2019
Cost

—
500
180,007¥ 345,466

Unrealized losses

Securities classiﬁed as:
Available-for-sale:
Equity securities
Held-to-maturity:
Cash and cash equivalents
Total

Unrealized gains

Unrealized losses

Fair value¥ 3,014¥ 5,594¥ (49)¥ 8,559500¥ 3,514——500¥ 5,594¥ (49)¥ 9,059

Sustainable Management—ESG Initiatives

Cash and deposits
Notes and accounts receivable
Short-term investments in securities and investments in securities
Held-to-maturity debt securities:(1) Corporate bonds(2) Other
Short-term loans receivable
Total

Due within
1 year¥ 59,631
105,3282020
Due after
1 yearMillions of yen

Segment Strategies

Notes: 3. The redemption schedule of monetary claims and securities with maturities as of December 31, 2020 and 2019, were summarized as follows:

The carrying amounts and aggregate fair values of investments in securities as of December 31, 2020 and 2019, were as follows:

Notes: 4. The repayment schedule of lease obligations as of December 31, 2020 and 2019, was as follows:
Millions of yen

1 year to
2 years¥ 39

2 years to
3 years¥ 23

3 years to
4 years¥ 10

1 year to
2 years¥ 49

2 years to
3 years¥ 33

3 years to
4 years¥ 17

2019
4 years to
5 years¥4

Available-for-sale securities whose fair value is not readily determinable as of December 31, 2020 and 2019, were as follows:
Millions of yen

Available-for-sale:
Equity securities
Investments in investment partnerships
Total

2020

2019

¥ 1,380865¥ 2,245¥ 1,564915¥ 2,479

Financial, ESG, and Corporate Data

Due within
1 year¥ 54

2020
4 years to Due within
5 years
1 year¥2¥ 72

The proceeds, realized gains and realized losses of the available-for-sale securities which were sold during the years ended December 31, 2020
and 2019, were as follows:

75

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202076

Financial, ESG, and Corporate Data
Notes to Consolidated Financial Statements

Proceeds
Available-for-sale:
Equity securities
Others
Total

¥ 250
93
¥ 343

Realized gains

2020
Realized losses

¥ 229
49
¥ 278

0
—
0

Proceeds

Realized gains
¥0
2

—
0

¥ 19

¥2

0

2019
¥ 218,637
6,360
1,187
2,149
(8,011)(669)——¥ 219,653(2) Reconciliation of plan assets at beginning and end of year (excluding the simpliﬁed method)
Millions of yen

2020¥ 193,609
166,852
26,757
20,711¥ 47,468¥ 47,884(416)¥ 47,468

2020¥ 166,870
4,127
1,198
2,927
(7,088)(1,536)¥ 166,498

Unfunded retirement beneﬁt obligations
Net liabilities and assets in consolidated balance sheets
Net deﬁned beneﬁt liabilities
Net deﬁned beneﬁt assets
Net liabilities and assets in consolidated balance sheets2019¥ 200,318
167,214
33,104
20,459¥ 53,563¥ 53,956(393)¥ 53,563

2019¥ 159,766
3,980
7,211
3,001
(7,088)—¥ 166,870(5) Retirement beneﬁt costs
Millions of yen

2020¥ 6,142940(4,127)
3,282
(293)
116
¥ 6,060

Service costs
Interest costs
Expected return on plan assets
Amortization of actuarial gains and losses
Amortization of prior service costs
Net periodic beneﬁt costs using the simpliﬁed method
Retirement beneﬁt costs of deﬁned beneﬁt plans

2019¥ 6,360
1,187(3,980)
5,012
(273)
125
¥ 8,431

Note: In addition to the above retirement beneﬁt costs, the Group recorded ¥441 million and ¥584 million for extra retirement payments for the years ended December 31, 2020 and 2019, respectively.

(6) Remeasurements of deﬁned beneﬁt plans before income tax effect adjustment
Changes in unrecognized prior service costs and unrecognized actuarial gains and losses for the years ended December 31, 2020 and 2019, wereas follows:
Millions of yen

2020
Unrecognized priorservice costs
At beginning of year
Net change
At end of year

¥ (1,803)294¥ (1,509)

Unrecognizedactuarial gains
and losses¥ 11,234(7,915)¥ 3,319

Total¥ 9,431(7,621)¥ 1,810

Financial, ESG, and Corporate Data

Canon Marketing Japan Inc. I Integrated Report 2020

Millions of yen

Sustainable Management—ESG Initiatives

Retirement beneﬁt obligations at beginning of year
Service costs
Interest costs
Actuarial gains and losses
Beneﬁt paid
Prior service costs
Decrease resulting from exclusion of subsidiaries in consolidation
Other
Retirement beneﬁt obligations at end of year

77(4) Reconciliation of retirement beneﬁt obligations and plan assets at year-end and net deﬁned beneﬁt liabilities and assets in consolidatedbalance sheets

Note: Plan assets include plan assets for which the simpliﬁed method was applied.

Millions of yen

2020¥ 219,653
6,142
940(3,547)(8,163)—(1,904)0¥ 213,121

2019
¥ 712
125
(24)
(33)
¥ 780

Segment Strategies

plans, and lump-sum severance payment plans. The Company
sometimes provides retiring employees with extra retirement
payments not included in the retirement beneﬁt obligations actuariallycalculated in line with its retirement beneﬁt accounting.

2. Defined benefit plans(1) Reconciliation of retirement beneﬁt obligations at beginning and end of year (excluding the simpliﬁed method)

Plan assets at beginning of year
Expected return on plan assets
Actuarial gains and losses
Contributions from the employer
Beneﬁt paid
Decrease resulting from exclusion of subsidiaries in consolidation
Plan assets at end of year

2020
¥ 780
116
(8)
(43)
¥ 845

Net deﬁned beneﬁt liabilities at beginning of year
Net periodic beneﬁt costs
Beneﬁt paid
Contributions to plans
Net deﬁned beneﬁt liabilities at end of year

Funded retirement beneﬁt obligations
Plan assets

Employees’ Retirement and Severance Benefits
1. Overview
The Company has a deﬁned contribution pension plan, a pension planwith a market-based variable accumulation rate (quasi-cash balanceplan), and a lump-sum severance payment plan, and its domestic
consolidated subsidiaries have deﬁned beneﬁt corporate pension

Millions of yen

Value Creation of the Canon MJ GroupImpairment loss of ¥1 million and ¥8 million was recorded on listed equity securities in the years ended December 31, 2020 and 2019,respectively.
Impairment loss of ¥316 million and ¥321 million was recorded on unlisted equity securities in the years ended December 31, 2020 and 2019,respectively.

12(3) Reconciliation of retirement beneﬁt obligations at beginning and end of year for which the simpliﬁed method was applied

2019
Realized losses¥019Overview of the Canon MJ Group

Millions of yen

2019
Unrecognized priorservice costs¥ (1,407)(396)¥ (1,803)

Unrecognizedactuarial gains
and losses¥ 21,308(10,074)¥ 11,234

Total¥ 19,901(10,470)¥ 9,431

Canon Marketing Japan Inc. I Integrated Report 202078

Financial, ESG, and Corporate Data
Notes to Consolidated Financial Statements

13

Overview of the Canon MJ Group(7) Plan assets
1. Main components of plan assets
Ratios for main components of plan assets were as follows:

Income Taxes
The effects of signiﬁcant temporary differences, which resulted in deferred tax assets and liabilities as of December 31, 2020 and 2019, were as follows:
Millions of yen

2019
21%
3
52
18
6
100%

Note: The composition of pooled funds was 47% in bonds and 53% in stocks for the year ended December 31, 2020, and 47% in bonds and 53% in stocks for the year ended December 31, 2019.

2. Methodology for setting long-term expected rates of return
The long-term expected rate of return on plan assets is determined by considering current and projected plan asset allocations and current andanticipated long-term rates of return from diverse plan assets.
(8) Actuarial assumptions
The principal actuarial assumptions as of December 31, 2020 and 2019, were as follows:
2019
0.21 - 0.48%
2.0 - 2.5%
1.9 - 2.6%

3. Defined contribution plan
The required contributions of the Company and consolidated subsidiaries to deﬁned contribution plans totaled ¥1,949 million and ¥1,964 million
for the years ended December 31, 2020 and 2019, respectively.

2019¥ 14,882
1,953
840
726
712
676
607
566
432
295
141
103
91
68
32
1,215
23,339(856)¥ 22,483¥ 16,769
1,155
808
1,092
804
721
487
281
542
323
202
106
308
84
36
1,184
24,902(986)¥ 23,916¥ (1,888)(1,280)—(96)¥ (3,264)¥ 19,219¥ (1,747)(1,280)(5)(91)¥ (3,123)¥ 20,793

2020¥ 19,220(1)¥ 19,219

2019¥ 20,793—¥ 20,793

Sustainable Management—ESG Initiatives

2020

Segment Strategies

Discount rates
Long-term expected rates of return on plan assets
Estimated rates of salary increases

2020
0.24 - 0.59%
2.0 - 2.5%
1.9 - 2.6%

DEFERRED TAX ASSETS:
Net deﬁned beneﬁt liabilities
Accrued bonuses
Excess depreciation of ﬁxed assets
Recording of estimated future variable consideration
Accrued business tax and business office tax
Excess amortization of software
Asset retirement obligations
Loss on devaluation of investments in securities
Loss on disposal and devaluation of inventories
Allowance for long-term continuous service rewards
Accrued product warranties
Loss on valuation of golf club membership
Loss carryforward
Lump-sum depreciable assets
Loss on impairment of ﬁxed assets
Other
Gross deferred tax assets
Less: valuation allowance
Total deferred tax assets
DEFERRED TAX LIABILITIES:Net unrealized gains on available-for-sale securities
Deferred capital gain
Deferred gains or losses on hedges
Other
Total deferred tax liabilities
Net deferred tax assets

Value Creation of the Canon MJ Group

Bonds
StocksPooled funds
Life insurance company general accounts
Other
Total

2020
22%
3
52
17
6
100%

Note: Net deferred tax assets as of December 31, 2020 and 2019, are reﬂected in the following accounts in the consolidated balance sheet:

Investments and other assets—deferred tax assets
Long-term liabilities—deferred tax liabilities
Net deferred tax assets

A reconciliation between the statutory income tax rate and the effective income tax rate for the years ended December 31, 2020 and 2019,
was as follows:

79

Canon Marketing Japan Inc. I Integrated Report 2020

2020
31.0%
0.3
0.9
(0.1)

2019
31.0%
0.7
1.0
(0.1)

2.4

—

(0.5)
34.0%

0.3
32.9%

Canon Marketing Japan Inc. I Integrated Report 2020

Financial, ESG, and Corporate Data

Statutory income tax rate
Entertainment and other expenses permanently not deductible for tax purposes
Per-capita levy of inhabitants’ taxes
Dividend income not taxable
Adjustment of book value of stocks of subsidiary for consolidated tax
payment system
Other
Effective income tax rate

80

Financial, ESG, and Corporate Data
Notes to Consolidated Financial Statements

Overview of the Canon MJ Group14(3) Information by reportable segment for the years ended December 31, 2020 and 2019, was as follows:

Segment Information

Millions of yen

1. Segment Information(1) Description of Reportable Segments
Reportable segments are constituent units of the Group for which
separate ﬁnancial information is available and they are subject toperiodic reviews by the Board of Directors to determine theallocation of management resources and assess their respective
operating results.

•Industrial Equipment
Sells products such as semiconductor manufacturing systems and inspection and measurement devices mainly tosemiconductor manufacturers and other electronics device manufacturers.

Note: The Company transferred all of the shares of consolidated subsidiary Canon Lifecare Solutions Inc. to Canon Medical Systems Corporation, effective January 1, 2020. (Note 16)(2) Methods of measurement for sales, segment income (loss),
assets, and other items for reportable segments
Accounting methods for reportable segments are the same as theaccounting methods described in Note 2 Summary of signiﬁcantaccounting policies.

Segment income (loss) is measured based on the amount ofoperating income. Intersegment sales and transfers are based onmarket prices.

Net sales:
External customers
Intersegment
Total
Segment income (loss)
Segment assets
Other items:
Depreciation and amortization
Changes in the amount of property,
plant and equipment and intangible
assetsArea¥ 124,830 ¥ 162,069 ¥ 225,893
45
9,169
9,874
124,875 171,238 235,767
12,2198,920
9,898
44,10098,152
68,943

Professional¥ 29,195
1,515
30,7101,880
14,956

Other

Total

Adjustments Consolidated¥ 3,073 ¥ 545,060— ¥ 545,060
6,297
26,900 ¥ (26,900)—
9,370 571,960 (26,900) 545,060(1,566) 31,351(33) 31,318
2,815 228,966 277,639 506,605

570

7,190

2,746

339

27

10,872382

11,254

1,355

11,747

2,839

338

41

16,32032

16,352

Notes: 1. “Other” includes call center business and BPO service business, which are not included in reportable segments.
2. Adjustments are as follows:(1) Adjustment of segment income (loss) eliminates intersegment transactions.
(2) Adjustment of segment assets is for corporate assets that do not belong to reportable segments. These assets mainly comprise surplus funds (cash and marketable securities) and assets related
to head office land, buildings, and head office administrative units.
(3) Adjustment of depreciation and amortization is for head office building expenses that do not belong to reportable segments.
(4) Adjustment of increase of property, plant and equipment and intangible assets consists of capital investments in head office buildings that do not belong to reportable segments.
3. Total segment income (loss) after adjustments for reportable and other business segments equals operating income in the consolidated statements of income.

Millions of yen

Year ended or as of December 31

2019
Reportable Segment
Consumers Enterprise

Net sales:
External customers
Intersegment
Total
Segment income (loss)
Segment assets
Other items:
Depreciation and amortization
Changes in the amount of property,
plant and equipment and intangible
assetsArea¥ 132,737 ¥ 186,652 ¥ 256,139
53
9,176
12,171
132,790 195,828 268,310
6,865
10,07014,39844,761
94,42474,465

Professional¥ 41,888
1,788
43,676
1,617
24,737

Other

Total

¥ 3,718 ¥ 621,134
5,579
28,767
9,297 649,901(714)
32,2362,352 240,739

Adjustments Consolidated
Sustainable Management—ESG Initiatives•Healthcare
Provides IT solutions, system development, network construction, and sells hardware for the medical and healthcare ﬁeld.
[Major Group companies]
Canon Lifecare Solutions Inc.
Canon ITS Medical Inc.

Consumers Enterprise

Segment Strategies•Production Printing
Sells high-speed continuous feed printers and high-speed cut sheet printers to the printing industry.
[Major Group company]
Canon Production Printing Systems Inc.

2020
Reportable Segment

Value Creation of the Canon MJ Group

Major Business Areas and Group Companies
Reportable Segment
Major Business Areas and Group Companies
Consumers
Sells products such as digital cameras and inkjet printers primarily to individual customers.
Enterprise
Sells products such as office MFPs and laser printers, provides maintenance services, and provides solutions that
contribute to solving business problems in each industry for large companies.
[Major Group company]
Canon IT Solutions Inc.
Area
Sells products such as office MFPs and laser printers, provides maintenance services, and provides solutions that
help customers solve business problems for small and medium-sized businesses in Japan.
[Major Group company]
Canon System & Support Inc.
Professional
Provides solutions for customers in each area.

Year ended or as of December 31— ¥ 621,134¥ (28,767)—(28,767) 621,134
204
32,440262,960 503,699

641

7,462

3,218

387

29

11,737520

12,257618

17,723

2,516

544

23

21,42427

21,451

81

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 2020

Financial, ESG, and Corporate Data

Notes: 1. “Other” includes call center business and BPO service business, which are not included in reportable segments.
2. Adjustments are as follows:(1) Adjustment of segment income (loss) eliminates intersegment transactions.
(2) Adjustment of segment assets is for corporate assets that do not belong to reportable segments. These assets mainly comprise surplus funds (cash and marketable securities) and assets related
to head office land, buildings, and head office administrative units.
(3) Adjustment of depreciation and amortization is for head office building expenses that do not belong to reportable segments.
(4) Adjustment of increase of property, plant and equipment and intangible assets consists of capital investments in head office buildings that do not belong to reportable segments.
3. Total segment income (loss) after adjustments for reportable and other business segments equals operating income in the consolidated statements of income.

82

Financial, ESG, and Corporate Data
Notes to Consolidated Financial Statements

15(2) Information by geographical area
1. SalesDisclosure of information on sales by geographical area is omitted since sales to domestic external customers accounts for more than 90% ofconsolidated net sales.

Related Party Transactions
Transaction conditions and policies for deciding transaction conditions with related party(1) Purchases of products are decided based on price negotiations each ﬁscal year, after considering market prices and the affiliated company’s
proposals regarding desired prices.
(2) Sales of office equipment, consumables, and other inventories are subject to similar conditions as general transactions.
(3) With regard to loans of capital, interest rates on loans are decided rationally after considering market interest rates. Furthermore, collateral is
not accepted.
Transaction with major corporate stockholders for the year ended December 31, 2020, and related balance as of December 31, 2020, were as follows:

Category(3) Information by major customers
Disclosure of information by major customers is omitted since no customer accounts for 10% or more of consolidated net sales.

Name ofcompany

Percentage Related contents
Balance at
Capital orTransaction
possession Board
end of ﬁscal
investment Businessamountof voting members
year
Address
capital contents or
Business Contents of transactions (Millions of Accounts
rightsholding(Millions of(Millions of occupation
relationships
yen)(Ownership) concurrent
yen)
yen)
(%)
positions

3. Information on impairment loss on property, plant and equipment by reportable segment
Impairment losses on property, plant and equipment by reportable segment for the year ended December 31, 2019, were as follows:
There were no applicable items for the year ended December 31, 2020.

Year ended or as of December 31

2019
Reportable Segment
Consumers Enterprise

Impairment loss

OhtaParent
Canon Inc.
ku,Tokyocompany

¥ 50

¥ 33

Area

Professional
—

—

Other

Total

Adjustments

Recordedamount

—

¥ 83

—

¥ 83

Accounts
Purchases¥ 17,302¥ 144,943
payableof products
Development
andOperating Sales ofmanufacturing
Manufacture transactions office equipin the office, (Ownership) 0 holdAccounts
of products
ment and¥174,762 imaging Direct 58.5 concurrent¥
3,480
receivable¥ 1,848
sold byconsumables,
system, and Indirect 0.0 positions
and others
Canon MJ
and otherindustrial
inventories
equipment
Nonareas
Short-term
Loans of¥ 180,000¥ 10,000
operatingloans
capitaltransactions

Segment Strategies

Millions of yen

Value Creation of the Canon MJ Group

2. Property, plant and equipment
Disclosure of information on property, plant and equipment by geographical area is omitted since the amount of domestic property, plant andequipment accounts for more than 90% of total property, plant and equipment recorded in the consolidated balance sheets.

Overview of the Canon MJ Group

2. Related Information(1) Information by product and service
Disclosure of information by product and service is omitted since the segment information contains the same information.

Note: Transaction amounts do not include consumption tax or other taxes, however, the account balances include consumption tax.

Note: “Other” represents operating segments which are not included in the reportable segments and includes operations such as the shared-services business.

Transaction with major corporate stockholders for the year ended December 31, 2019, and related balance as of December 31, 2019, were as follows:

5. Information on gain on negative goodwill
There were no applicable items for the years ended December 31, 2020 and 2019.

Category

Name ofcompany

Percentage Related contents
Balance at
Capital orTransaction
possession Board
end of ﬁscal
investment Businessamountof voting members
year
Address
capital contents or
Business Contents of transactions (Millions of Accounts
rightsholding(Millions of(Millions of occupation
relationships
yen)(Ownership) concurrent
yen)
yen)
(%)
positions

Parent
OhtaCanon Inc.
company
ku,Tokyo

Sustainable Management—ESG Initiatives

4. Information on amortization and balance of goodwill by reportable segment
There were no applicable items for the years ended December 31, 2020 and 2019.

Financial, ESG, and Corporate Data

Purchases
Accounts¥ 182,020¥ 17,878of products
payableDevelopment
andOperating Sales ofmanufacturing
Manufacture transactions office equipin the office, (Ownership) 0 holdAccounts
of products
ment and¥174,762 imaging Direct 58.5 concurrent¥ 7,172 receivable ¥ 1,560
sold byconsumables,
system, and Indirect 0.0 positions
and others
Canon MJ
and otherindustrial
inventories
equipment
Nonareas
Short-term
Loans of
¥ 170,000¥ 80,000
operatingloans
capitaltransactions

Note: Transaction amounts do not include consumption tax or other taxes, however, the account balances include consumption tax.

83

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202084

Financial, ESG, and Corporate Data
Notes to Consolidated Financial Statements

2. Outline of accounting treatment(1) Amount of gain or loss on transfer
Loss on sales of shares of subsidiaries and associates ¥738 million(2) Proper book value of assets and liabilities related to the transferred
subsidiary and breakdown thereof
Current assets ¥7,047 million
Non-current assets ¥326 million
Total assets ¥7,373 million
Current liabilities ¥2,303 million
Non-current liabilities ¥603 million
Total liabilities ¥2,906 million(3) Accounting treatment
The difference between consolidated book value and sales price oftransferred shares is recorded as “Loss on sales of shares ofsubsidiaries and associates” under other income (expenses).
3. Reportable segment that included the transferred subsidiary
Professional segment

Millions of yen

Average interest rate (2020)
Lease obligations:
Current portion of lease obligations
Lease obligations (excluding current portion)
Deposits
Total

19

2020
¥

0.00%

54
74
128
2,967
¥ 3,095

2019
¥

72
103
175
3,330
¥ 3,505

Stockholders’ Equity
The Corporate Law of Japan went into effect on May 1, 2006, replacing
the Commercial Code. It is applicable to events or transactions ofcompanies in Japan occurring on or after May 1, 2006, and for ﬁscal
years ending on or after May 1, 2006.
The Corporate Law stipulates that the amounts actually paid in orprovided in consideration for newly issued stock shall be recorded ascommon stock. However, it also allows 50% or less of such amounts
to be recorded as additional paid-in capital.
Under the Corporate Law, a company that meets certain criteria
can establish its Articles of Incorporation so that dividends can be
paid to its existing stockholders by resolution of the Board of
Directors, without requiring the approval of a resolution at a General

Meeting of Shareholders. The Company has met said criteria andamended its Articles of Incorporation at the annual General Meeting of
Shareholders for the year ended December 31, 2006. The Corporate
Law provides that an amount equal to 10% of the amount to be
disbursed as distributions of capital surplus (other than the capitalreserve) and retained earnings (other than the legal reserve) betransferred to the capital reserve and the legal reserve, respectively,
until the sum of the capital reserve and the legal reserve equals 25%of the common stock account. However, such appropriation cannot bemade if the aggregate amount of the legal reserve exceeds 25% ofcommon stock (i.e., the aggregate amount of the Company’s legal
reserve has already reached 25% of its common stock).

Sustainable Management—ESG Initiatives

4. Estimated amount of gain or loss from the business divestiturerecorded in the consolidated statements of income for the
fiscal year ended December 31, 2020
Gain or loss from the business divestiture is not included in the
consolidated statements of income for the ﬁscal year ended December
31, 2020, since the business was divested at the beginning of the year
then ended.

Lease obligations and deposits as of December 31, 2020 and 2019, were as follows:

Segment Strategies

1. Overview of transfer of shares(1) Name of transferee of shares
Canon Medical Systems Corporation(2) Name and description of business of the transferred subsidiary
1. Name: Canon Lifecare Solutions Inc.
2. Description of business: Sale of medical and healthcare
equipment and related consumables, and medical imaging
systems(3) Reason for transfer of shares
The Group’s healthcare business had consisted of a medical systems
business focused on diagnostic medical imaging equipment and ahealthcare-related business conducted by Canon LCS, as well as
hospital information systems based on electronic health records andsystem integration business conducted by Canon ITS Medical Inc.
The Company determined that for Canon LCS, the best move for
future growth was to join the Canon Medical Group.
In addition, this latest restructuring is consistent with the medical
business restructuring policy being implemented by the Canon
Group. The Group will continue to collaborate with the Canon Groupin the future, aiming for growth of the medical IT solutions business.
(4) Date of share transfer
January 1, 2020

(5) Other matters regarding the outline of transaction, including legal
formTransfer of shares for cash

Lease Obligations and Deposits

Value Creation of the Canon MJ Group(Transfer of shares of a subsidiary)
The Company transferred all the shares of Canon Lifecare Solutions Inc.
(hereinafter “Canon LCS”), a consolidated subsidiary, to Canon Medical
Systems Corporation (hereinafter “Canon Medical”) on January 1, 2020,
based on a resolution of a meeting of the Board of Directors held on
November 26, 2019. As a result of this share transfer, Canon LCS was
excluded from the Company’s consolidation.

17

18

Business Combination

Overview of the Canon MJ Group

16

Asset Retirement Obligations
The Group recognizes restoration obligations under real estate rental
agreements of buildings and other real estates as asset retirement
obligations.
Instead of recognizing liabilities, the Group reasonably estimates
the uncollectible amount of lease deposits related to the real estate

rental agreements, and accounts for the portion of such estimatedamount attributable to the current ﬁscal year as an expense.
The outstanding balances of lease deposits considered
uncollectible as of December 31, 2020 and 2019, were ¥3,195 millionand ¥2,853 million, respectively.

Financial, ESG, and Corporate Data

85

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202086

Financial, ESG, and Corporate Data

Independent Auditor’s Report
Overview of the Canon MJ Group
Value Creation of the Canon MJ Group
Segment Strategies
Sustainable Management—ESG Initiatives
Financial, ESG, and Corporate Data

87

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 202088

Financial, ESG, and Corporate Data
Independent Auditor’s Report(This page intentionally left blank)

Overview of the Canon MJ Group
Value Creation of the Canon MJ Group
Segment Strategies
Sustainable Management—ESG Initiatives
Financial, ESG, and Corporate Data

89

Canon Marketing Japan Inc. I Integrated Report 2020

Canon Marketing Japan Inc. I Integrated Report 2020

90

Financial, ESG, and Corporate Data

ESG Data
2016

2017

2018

2019

2020

8,339

7,995

7,579

6,975

5,765

GHG emissions (Scope 1 and 2) (t-CO2)
Scope 133,87941,20743,80045,73340,513

41,874

48,78650,77551,498Category 1. Purchased goods and services (Note 1)—

219,377

199,906

283,983

252,705

Category 2. Capital goods (Note 2)
Category 3. Fuel- and energy-related activities not included in Category 1 or 2
(Note 3)Category 4. Upstream transportation and distribution (Note 4)—

40,292

27,726

65,34141,807

—

4,012

4,601

8,993

9,061

—

4,701

4,039

4,175

3,922

Category 5. Waste generated in operations (Note 5)

—

90

137

153

92

Category 6. Business travel (Note 6)

—

9,918

9,048

12,032

6,119

Category 7. Employee commuting (Note 7)

—

5,154

5,401

6,915

7,445

Category 8. Upstream leased assets (Note 8)

—

0

0

0

0

Category 9. Downstream transportation and distribution (Note 9)

—

1,271

1,122

1,073

1,104

Category 10. Processing of sold products

—

0

0

0

0

Category 11. Use of sold products (Note 10)—

101,11188,59086,30983,331Category 12. End-of-life treatment of sold products (Note 11)—18,566

15,749

6,422

5,241

Category 13. Downstream leased assets (Note 12)

—

222

219

5,587

4,473

Category 14. Franchises

—

0

0

0

0

Category 15. Investments

—

0

0

0

0

Total

—

404,714356,538

480,983

415,299

Tap water

120,215

148,857

154,283

161,912160,884

Groundwater

20,363

19,943

21,43821,89522,001

0

0

0

0

0

140,578

168,800

175,721

183,807

182,885

GHG emissions (Scope 3) (t-CO2)

2017

2018

2019

2020

14,681
3,206
17,887

14,502
3,150
17,652

14,202
3,078
17,28013,8903,110
17,00013,385
3,159
16,544

3,303
80
3,383
—

3,228
85
3,313
60.7

3,131
92
3,223
68.3

3,037
97
3,134
74.5

2,898
106
3,004
64.5

134
10

140
7

202
9

144
4

143
9

—
—

98.7
100.0

97.1
87.5

82.4
75.0

95.6
100.0

279
199
—
—

288
189
44.3
18.7

290
175
44.6
18.9

316
163
44.7
19.6

304
192
44.8
19.6

157
2.16

150
2.10

151
2.15

150
2.19

142
2.15

2016

2017

2018

2019

2020

8
0
8
2
0
2
10

8
0
8
2
0
2
10

5
0
5
2
0
2
7

4
0
4
2
0
2
6

4
0
4
2
0
2
6

2
0
2
3
0
3
5
62.9

2
0
2
3
0
3
5
63.9

2
0
2
3
0
3
5
62.6

2
0
2
3
0
3
5
63.4

2
0
2
3
0
3
5
62.3

16
16
28

17
18
23

15
18
23

16
20
23

18
17
23

Segment Strategies

32,174

Total

2016

Value Creation of the Canon MJ Group

Scope 2SOCIETY
Group employees
Number of men
Number of women
Total
Group management
Number of men
Number of women
Total
Percentage of Group employees taking paid leave (%)
Number of Group employees taking childcare and nursing care leave
Childcare leave
Nursing care leave
Percentage of Group employees returning to work after taking childcare andnursing care leave (%)
Childcare leave
Nursing care leave
Number of Group retirees and reemployed workers
Number of retirees
Number of reemployed workers
Average age of Group employees
Average length of service of Group employees (years)
Number of parent company employees with disabilities
Number of employees
Percentage of employees (%)

Overview of the Canon MJ GroupENVIRONMENT

Water consumption by source (m3)

Industrial water
Total
Total emissions (metric tons)

19,94021,24420,947

21,372

16,204

Sales units (metric tons per million yen)

0.032

0.034

0.034

0.034

0.030

Amounts recycled (metric tons)
Total volume of products recovered and processed from marketplace

14,424

13,777

14,10914,84012,015

Recycled amount (Note 13)

14,394

13,773

14,108

14,83912,015

Recycling rate (%) (Note 14)

99.79

99.97

99.99

99.99

99.99

ESG Data Notes

91

Canon Marketing Japan Inc. I Integrated Report 2020

Note 8. Encompassing leased buildings and vehicles and included in Scope 1 and 2
Note 9. Calculated by determining average transportation distances and weights of products transported by region
multiplied by transportation units
Note 10. Calculated by determining lifetime power consumption for each product multiplied by average power consumption units
Note 11. Calculated by classifying products sold by waste disposal units for the weights of each material
Note 12. Calculated by determining annual power consumption of each leased product multiplied by average power
consumption units
Note 13. Total weight after excluding simple incineration and landﬁll disposal from total volumes of products recovered andprocessed from marketplace
Note 14. Amounts recycled divided by total volume of products recovered and processed from marketplace
Note 15. Averages for directors and Audit & Supervisory Board members
Note 16. At December 31 each year

Canon Marketing Japan Inc. I Integrated Report 2020

Financial, ESG, and Corporate Data

Note 1. Calculated by multiplying weights of product materials and product wastes by materials and process units
Note 2. Calculated by multiplying totals for each capital goods purchases category by category units
Note 3. Total fuel and power consumed at each site totaled and multiplied by units from fuel extraction through combustion/
power generation
Note 4. Distribution from suppliers to production sites are calculated by multiplying the unit of transportation by seeking the
average transportation distance and transport weight. Logistics from production bases to customers are calculated
by multiplying logistics results by the unit of transportation.
Note 5. Materials-speciﬁc waste amounts at each site added, multiplied by materials waste disposal units
Note 6. Total payments per transportation mode multiplied by units per mode. For accommodations, total amounts paid
converted into average number of nights, for multiplying by accommodation units
Note 7. Total payments per transportation mode multiplied by units per mode. In the case of private car commuting, afterconverting the total mileage associated with commuting to fuel usage, add by multiplying the unit of fuel combustion.

Sustainable Management—ESG Initiatives

Industrial waste emissions

GOVERNANCE
Number of directors
In-house (men)In-house (women)
In-house total
Outside (men)Outside (women)
Outside total
Total
Number of Audit & Supervisory Board members
In-house (men)In-house (women)
In-house total
Outside (men)Outside (women)
Outside total
Total
Average age of corporate officers (Notes 15 and 16)
Number of Board of Directors’ and Audit & Supervisory Board meetings
Number of Board of Directors’ meetings
Number of Audit & Supervisory Board meetings
Number of executive officers

92

Financial, ESG, and Corporate Data

Canon MJ Group

Corporate Data
As of December 31, 2020

Position within the Canon Group

Canon Marketing Japan

Headquarters
Canon S Tower, 16-6, Konan 2-chome, Minato-ku,
Tokyo 108-8011, JapanWe market Canon’s products and services inJapan and provide our unique IT solutions.

Canon
Asia
MarketingCanon
Marketing
Japan

Canon
Inc.

Canon
U.S.A.

Canon
Australia

Canon IT Solutions Inc.

Systems integration (SI) and consulting, IT services, and software development
and sales

SuperStream Inc.

Planning, development, and sales of SuperStream NX management infrastructure
solution for accounting and salaries

Qualysite Technologies Inc.

Java systems development, and data center operations, maintenance, andauxiliary services

Canon Software America, Inc.

Development of business applications software for Group companies

Canon Information Systems (Shanghai) Inc.

Consulting for companies in China (Group companies, Japanese, Western andChinese companies), development of systems integration (SI), andimplementation of various solutions

Canon Inc.
Canon Marketing Japan Group Employee Stock Ownership Association
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
STATE STREET BANK AND TRUST COMPANY 505001
SMBC Nikko Securities Inc.
Canon Marketing Japan Group Business Partner Stock Ownership Association
THE BANK OF NEW YORK, TREATY JASDEC ACCOUNT
Mizuho Bank, Ltd.
Custody Bank of Japan, Ltd. (Trust Account 9)

Canon IT Solutions (Thailand) Co., Ltd.

Supervision of businesses of Group companies in Thailand and Vietnam* The company possesses 1,412,822 shares of its treasury shares (1.1% of the total number of issued shares).
* The percentage of ownership is calculated by deducting the number of treasury shares from the total number of issued shares.

Material Automation (Thailand) Co., Ltd.

Proposals, sales, and service related to IT hardware through software

Shareholder Composition

ASAHI-M.A.T. Co., Ltd.

Sales and support for CAD, CAM, and CAE in Thailand

MAT Vietnam Company Limited

Proposals, sales, and service related to IT hardware through software
in Vietnam

Canon System & Support Inc.

IT solutions consulting, sales, support, and maintenance services for Canon’s
and third parties’ products

A&A Co., Ltd.

Exclusive domestic sales of 3D CAD software Vectorworks Japanese version andplanning, development, and sales of related software

Canon Production Printing Systems Inc.

Sales and maintenance services for production printers and consumables,development and delivery of workﬂow systems, and provision of printing services

Stock Price Range and Trading Volume

Canon ITS Medical Inc.

Providing IT solutions for the medical and healthcare ﬁeld, systems development,
network construction, and hardware sales

Stock Price (Yen)
3,000

Canon BizAttenda Inc.

Consulting, business support BPO, back office BPO, office support outsourcing,
contact center outsourcing, temp staffing, and services

2,500

Canon Marketing Japan Inc. I Integrated Report 2020

Number of shares held(Thousands)
75,708
5,860
4,754
2,669
1,517
1,347
1,219
1,192
1,001
997

Name of shareholder

Percentage of ownership
(%)
58.4%
4.5
3.7
2.1
1.2
1.0
0.9
0.9
0.8
0.8

Canon MJ Investor Relations Website

Treasury Stock
Individuals and Others 1.1%
13.1%

Financial Institutions
12.7%
Securities Companies
2.0%

Foreign Companies, etc.
12.2%

Other Domestic Companies
58.9%

Canon MJ maintains a comprehensive investor relations (IR) website to further
facilitate communication with shareholders. The website contains:• News for investors • IR calendar• Financial results and other ﬁnancial information• Information on Long-Term Management Objectives (2021-2025) and Three-YearManagement Plan (2021-2023)• Stock information • Integrated reports
canon.jp/8060e-ir

Trading Volume (Shares)
10,000,000

8,000,000

2,000

Canon Business Support Inc.

Office services for Group companies and BPO-related services

Canon Customer Support Inc.

Customer inquiry service, service center business, and photoculture support,
primarily for Canon products

The Group comprises 16 consolidated subsidiaries.

93

Major Shareholders

Lines of business

BPO Services

Service & Support

Stock Listing
Canon Marketing Japan Inc.’s common stock is traded on the First
Section of the Tokyo Stock Exchange. (Ticker Symbol: 8060)

Financial, ESG, and Corporate Data

Healthcare

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

Sustainable Management—ESG Initiatives

Professional BU

Number of Shares Issued
131,079,972 sharesCompany nameArea BU

Production
Printing

Number of Employees
Consolidated: 16,544
Non-consolidated: 4,908

Common Stock¥73,303 million

Segment Strategies

Enterprise BU

Description of Business
Domesic marketing of Canon products and related solutions

Value Creation of the Canon MJ Group

Research and development,
and manufacturing ofCanon’s products

Segment

Number of Shareholders
11,254

Date of Establishment
February 1, 1968

Canon
EuropeOverview of the Canon MJ GroupAs of March 31, 2021

6,000,000

1,500
4,000,000

1,000

2,000,000

500
0

2018
1

3

5

7

9

11

2019
1

3

5

7

9

11

2020
1

3

5

7

9

11

2021
1

0
3

Canon Marketing Japan Inc. I Integrated Report 202094