Three-Year Management Plan 2018 to 2020

January 30, 2018
Canon Marketing Japan Inc.
Masahiro Sakata, President© Canon Marketing Japan Inc. 2018

Details of this Briefing
Progress of the Previous Medium-term Management Plan, Outline of the New Medium-termManagement Plan and Information on Investment and Shareholder Return
I: Review of 2017
II: Brief Description of the New Medium-term Management Plan (2018-2020)
III: Investment Strategy, Shareholder Return

Details to be Announced in April
Premise for Formulation of the New Medium-term Management Plan and Growth Strategies
for Each New Segment
I: Premise for Formulation of the New Medium-Term Management Plan (2018-2020)
II: Description of New Segments
III: Descriptions of Growth Strategies for Each New Segment© Canon Marketing Japan Inc. 2018

1

Contents

1 Review of 2017

2 Overview of the Medium-term Management

Plan for 2018-2020
3 Strategic Investments

4 Shareholder Return© Canon Marketing Japan Inc. 20182

1 Review of 2017

2 Overview of the Medium-term Management

Plan for 2018-2020
3 Strategic Investments

4 Shareholder Return© Canon Marketing Japan Inc. 20183

Review of the Previous Medium-term Management Plan (2017-2019)

Core Themes of the Medium-term Management Plan (2017-2019)

Growing Sales
Achieving growththrough attack &reform Seek to expand business to markets and customers that we were unable to offer
solutions to until now, by shifting to a framework that caters to market and customer
needs.
 Seek to expand business by shifting manpower, funds and other resources from
Canon’s Profitability Growth Areas to Canon’s Growth Areas and Independent Growth
Areas.

Improving percentage profits
Conversion to a
muscular businessstructure© Canon Marketing Japan Inc. 2018

 Seek to further improve profitability of B-to-C, Document Businesses and other ofCanon’s Profitability Growth Areas.

 Implement fundamental structural reforms and seek to reduce SG&A expenses.

42017 General Overview - Progress on Key Management Indicators ■Sales increased slightly and income increased over the previous year.
■Sales fell short of targets due to delayed market recovery for B-to-C, delayed shipments of new production
printing products and other factors. On the other hand, operating income managed to beat targets thanks tothorough efforts to appropriately manage expenses.
■Operating income ratio was a record 4.8%.

Actual results for 2016

Plan at start of 2017

Actual results for 2017

Compared with
Previous YearSales

¥629.3 billion¥645 billion¥632.2 billion+0.5%

SGA ratio

31.5％

31.0％

30.6％

-0.9％

Operatingincome¥27.7 billion¥28.8 billion¥30.4 billion¥+2.7 billion

Operatingincome ratio

4.4％

4.5％

4.8％

+0.4%

Profit attributable toowners of parent¥18.2 billion¥19.8 billion¥20.7 billion¥+2.5 billion

ROE

6.3％

© Canon Marketing Japan Inc. 2018

7.2％
5

2017 General Overview - Weight shift towards growth areas ■Growth was achieved compared with the previous year in Independent Growth Areas driven by
IT solutions and industrial equipment.
■In Canon’s Growth Areas, year-on-year growth was achieved thanks to growing performancewith network cameras.
■ In Canon’s Profitability Growth Areas, a decline occurred due to a weak consumer market.

Independent
Growth Areas(IT solutions, industrial
equipment, medical
imaging solutions, etc.)

Canon’s
Growth Areas(Production printing,network cameras, etc.)

Canon’s Profitability
Growth Areas(MFP, laser printers, digital
cameras, ink jet printers,etc.)© Canon Marketing Japan Inc. 2018

Actual results for 2016

Actual results for 2017

%

31%

33%

+4%

（¥197.9 billion)（¥206.7 billion）

7％

7%（¥46.5 billion）

62％（¥384.9 billion）（¥46.9 billion）

60%（¥378.6 billion）（¥+8.8 billion）+1%（¥+0.4 billion）-2%(¥-6.3 billion）

6

2017 General Overview - Sales Growth -Growth in IT Solutions(Billions of Yen)

2016

2017

%

128.8

134.9

+5%

Outside ITS Segment

73.7

76.5

+4%

Between-segment sales

-25.5
177.0

-27.5
183.9

+4%

ITS segment

Group IT solutions total

Increase in SI Services for Finance and Manufacturing+3%

Expansion of Security Business including ESET

+12%

Expanded External Sales for Embedded
Solutions

Nishi-Tokyo Data Center Building 1 will
be fully occupied

Expanded ITS Sales in BS Segment

Advancement of Cloud Strategy© Canon Marketing Japan Inc. 20187

2017 General Overview - Sales Growth -Growth in Industrial Equipment
Market Conditions-

Increasing smartphone capacity, the establishment of new data centers and theelectrification of vehicles has driven growth in the semiconductor market and significantly
expanded capital expenditures.

Factors Behind Increased Sales in 2017
・ Sales of semiconductor processequipment and measurement
equipment have grown

HeliosXP(Mattson)Suprema(Mattson)

Initiatives to Carry New Products
・ Proposing new solutions associatedwith the miniaturization anddensification of semiconductor devices

Mentor(Metryx)

CLUSTERLINE(Evatec)

Year-on-year Sales Growth Ratefor Industrial Equipment+33%© Canon Marketing Japan Inc. 20188

2017 General Overview - Weight shift towards growth areas -Network Cameras

Production Printing(+22% year-on-year)(-3% year-on-year) Number of projects increased throughstronger coordination with AXIS andMilestone Systems

 Increase in cut paper production
printers for the commercial printing
market Business expansion through alliances Stronger sales power thanks to shiftof personnel from other segments

 Attempted to create new market in
the printing industry with theestablishment of a joint venturecompany

IssuesIssues Expertise in design and network
construction
 Development of sales channels© Canon Marketing Japan Inc. 2018

 Delay in release of
black-and-white continuous
feed printer9

2017 General Overview - Weight shift towards growth areas -Measures aimed at Future Sales Growth
Resource ShiftingandConsolidation andStrengthening

Strengthening theCommercial Printing
Segment

 Consolidation and strengthening of BPO business resources Consolidation and strengthening of medical IT resources Consolidation and improved productivity for Group service & support
capabilities

 Establishment of Customer Experience Center Tokyo, a commercial
printing experience-oriented facility on the premises of the Canon Inc.
headquarters
 Establishment of joint venture named Commercial Printing Lab Inc.

 Establishment of Video Solutions Co-creation Project Added to previous year investment in APTJ, which develops on-board
control-related software for cars.

Initiatives aimed atBusiness Creationand Expansion

 Invested in Safie Inc., the operator of a cloud-based video platform.
 Launched drone solutions business in partnership with Prodrone Co., Ltd.,
which we have invested in.
 Started the Canon i Program, a business creation program to cultivate
entrepreneurs in-house.

© Canon Marketing Japan Inc. 201810

Reference: Nishi-Tokyo Data Center Obtains M&O Certification
With the earning of M&O certification, the operational capabilities of the Nishi-Tokyo
Data Center have been verified as sufficiently high according to global standards.
The Second Data Center in Japanto earn M&O Certification

M&O certification is a global standard for data centers established by the Uptime Institute, aU.S.-based private sector group which formulated facility standard “tiers” for data centers, andis an objective assessment of the quality of data center management.
© Canon Marketing Japan Inc. 201811

2017 General Overview - Higher Profit Margins Achieving a Record Operating Income Ratio of 4.8%
Results

Measures No. 1 market share for digital interchangeable lens cameras and compact
camerasEnhancing profitabilityof B-to-C business No. 1 market share for ink jet printers Improved profitability through organizational slimming and enhanced
operating efficiency

 A record number of MFP units have been shipped for three consecutive years since
2015

Improving profitabilityof document business No. 1 market share in laser printers has been maintained for 26 consecutive years
 Revenues from maintenance services have been maintained and expanded due toincrease in print volume associated with the expanded number of units operating in themarket Cartridge sales have increased due to expanded LBPs for specific uses

 SG&A ratio fell due to thorough awareness of costs(31.5% in 2016  30.6% in 2017: year-on-year fall of 0.9%)

Structural reforms© Canon Marketing Japan Inc. 2018



Lower IT costs due to visualization and simplification of business processesHigher productivity per employee

121 Review of 2017

2 Overview of the Medium-term Management

Plan for 2018-2020
3 Strategic Investments

4 Shareholder Return© Canon Marketing Japan Inc. 201813

Medium-term Management Plan (2018-2020) Targets(Billions of Yen)

ActualResults

3-year Management Plan

2017

2018

2019

2020

632.2

645.0

680.0

720.0

（＋0.5％）（+2.0％）（+5.4％）（+5.9％）

30.4

32.0

35.0

38.0

（4.8％）（5.0％）（5.1％）（5.3％）

31.5

33.0

36.0

39.0

（5.0%）（5.1％）（5.3％）（5.4％）

20.7

21.7

24.2

26.1

(ratio)（3.3％）（3.4％）（3.6％）（3.6％）

EPS
ROE

¥159
7.2%

¥167
7.1%

¥187
7.7%

¥202
7.9%

Net sales(%)

Operating income(ratio)Ordinary income(ratio)Profit attributable to owners ofparent© Canon Marketing Japan Inc. 201814

Sales Targets by Growth Scenario
Shifting Weight to Growth Areas(Billions of Yen)

800.0
700.0
600.0

500.0
400.0

233.7

34％

263.6

37％

206.7

33％

215.5

34％

46.9

7％

53.0

8％

69.1

10％

78.8

11％

378.6

60％

376.5

58％

377.3

56％

377.7

52％

300.0

200.0
100.0
0.0

2017

2018

2019

2020

Three-Year Management Plan
Canon’s Profitability Growth Areas© Canon Marketing Japan Inc. 2018

Canon’s Growth Areas

Independent Growth Areas

15

Strengthening and Creating New Sources of Revenue
Conventional Revenue Models

Revenue Models to Grow in the Future

IT Maintenance Services

MFP + maintenance services

Cloud Services
Data Center Services
Security

LBP + toner cartridges

Ink Jet Printers+ ink cartridges© Canon Marketing Japan Inc. 2018

Work to strengthen and create stockbusinesses based on IT solution
technologies

16Core Themes of the Medium-term Management Plan for 2018-2020

Shift to Growth

Enhanced Profitability

Achieving Growth through Attack and Reform

Further Conversion to a Muscular Earnings Structure

Expand Growth Areas

Boost Productivity in
Profitability Growth Areas■ Shift resources to growth businesses■Make active use of M&A and alliances Expand operations and supplement
functioning of growth businesses■ Raise productivity in existing businesses■ Promote fundamental structural reforms■ Create and expand new businesses© Canon Marketing Japan Inc. 201817

Core Themes of the Medium-term Management Plan for 2018-2020
Shifting to a framework that caters to customer and market needs■ Shifting to a new framework
Existing

FutureProduct Centric

Customer Centric

Organizational framework
based on products

Organizational framework
based on customers and markets

Gain a deep understanding of customers and establish processes
to develop and produce results in step with customers.

To provide customers with greater added value, strive to enhance
IT solution functions as our strength across all business fields.
To make effective use of Group resources and strengthen the ability tocater to customer needs, supervise products, services and personnel
across the Group in a cross-sectoral manner.
© Canon Marketing Japan Inc. 201818

Schematic of the New Framework

Customer
Individuals

Business / OfficeSpecialist Fields

Business Unit

Professional

Enterprise
Consumers(LargeCustomers)

Area(Small-toMedium-Sized
Customers)

Production Printing
Industrial Equipment

Healthcare
Imaging Solutions

Functional Unit
Supervisory Division© Canon Marketing Japan Inc. 2018

IT Platform
BPO

BPO

Call Centers / Services
Marketing Supervision

Service & Support Supervision
19

Expansion of Group IT Solutions
Pursue the optimum utilization of Group resources and make the ITS businessa pillar of growth (average three-year growth rate +9%)EnterpriseArea(Large Customers)(Small-to-Medium-Sized
Customers)

Cloud shift
Solution shift
Digital business shift

Professional

IT Concierge

Development of Data Centers and Cloud Infrastructure, IT Maintenance and Operation

IT Products (PCs, Servers, Network Equipment)
IT Security
Document solutions
SI Solutions by Business Category

Mission-critical and Business
Packaged Software

Imaging Solutions

Embedded (On-board Software
for Vehicles)

IT Support Cloud Service for Smallto-Medium-Sized Enterprises

Medical IT (MIP)

Strengthening the IT Business Infrastructure (Optimum Arrangement of Technical Resources and Quality Control)© Canon Marketing Japan Inc. 201820

1 Review of 2017

2 Overview of the Medium-term Management

Plan for 2018-2020
3 Strategic Investments

4 Shareholder Return© Canon Marketing Japan Inc. 201821

Strategic Investments

Accelerating Growth
in Independent Growth
Areas

M&A
Investments© Canon Marketing Japan Inc. 2018Enhancing IT systems infrastructure including securityImproving solutions for specific business categories
and businesses (for large enterprises and small-tomedium-sized enterprises)Acquiring cutting-edge technologies



Acquiring new independent growth areasEnhancing the Solutions Business for Professionals
Expanding BusinessDomain in Canon’s
Growth Areas

CapitalExpenditure

Strengthening the IT Solutions Business

Strengthening the Imaging solutions business(Network Camera Business, Commercial Imaging Business)Reinforcing business foundations for commercial andindustrial printing

Data CentersConstruction of the Nishi-Tokyo Data Center Building 2

IT Investment



Investment in IT to boost internal productivity and businessefficiency
22

1 Review of 2017

2 Overview of the Medium-term Management

Plan for 2018-2020
3 Strategic Investments

4 Shareholder Return© Canon Marketing Japan Inc. 201823

Shareholder Return and Dividends
Dividend Policy
Our basic policy is to pay dividends to shareholders based on a dividend payout ratio of 30%, while also
taking into account overall issues such as medium-term profit outlook, investment plans and cash flow.

Change in Annual Dividend Per Share (Yen)

70
60
50

40

40
30

45

60

60

2017

2018

50

24

20
10
0
2013

2014

2015

2016

(Forecast)© Canon Marketing Japan Inc. 201824

The performance and future projections made in this document are based on information available at the present time, and include potential risks andinaccuracies.
Owing to various factors, actual results may differ substantially from these projections.

© Canon Marketing Japan Inc. 2018

Three-Year Management Plan 2018 to 2020

April 25, 2018

Canon Marketing Japan Inc.
Masahiro Sakata, President© Canon Marketing Japan Inc. 2018

Contents

1 Assumptions for formulation of the Medium-

Term Management Plan (2018-2020)

2 Main Strategies in New Segments
3 Structural Reforms

1

Contents

1 Assumptions for formulation of the Medium-

Term Management Plan (2018-2020)

2 Main Strategies in New Segments
3 Structural Reforms

2

Environmental Changes & Expansion of Business Opportunities

Market maturation, low birth rate and aging population→Rising demand for high-efficiency solutions in society and businessNeed for workflow improvement at companies→ Intensifying use of outsourcing and cloud systems for concentration on main business/services→ Improving work efficiency and bolstering sales capabilities through proactive utilization of IT
at small-to-medium sized businesses

Need for reduction of medical costs accompanying social aging→ Solutions for reducing costs at medical institutions through utilization of IT technologies→ Increase operational efficiency and monitoring of residents at nursing care facilities

Technological advancement and evolution→Increased investment in new business opportunities and expanding security needs

Incorporation of IT technologies through technological innovation→ Investing in IoT and robotics, etc., in various industry segments→ Investment for revolutionizing points of contact with customers in the financial sector utilizing FinTech→ Increase investment in automatic driving and transition to digital devices in the automobile sector

Reforming and revolutionizing business models→ Investing in new businesses that utilize AI, 3D technologies and digital marketing, etc.

Rising demand for improved security→ Bolstering security against increasingly sophisticated cyber attacks

Advancement of business and higher efficiency in society through utilization of imaging
technologies→ Utilizing high-resolution images (i.e. 4k & 8k)→ Deploying monitoring and security/protection solutions utilizing the data of network camera for marketing
applications and developing new businesses utilizing drones

3Core Themes of the Medium-term Management Plan for 2018-2020

Shift to Growth

Achieving Growth through Attack and Reform

Expand Growth Areas■ Shift resources to growth businesses■Make active use of M&A and alliances Expand operations and supplement
functioning of growth businesses

Enhanced Profitability

Further Conversion to a Muscular Earnings Structure

Boost Productivity in
Profitability Growth Areas■ Raise productivity in existing businesses■ Promote fundamental structural reforms■ Create and expand new businesses

4Core Themes of the Medium-term Management Plan for 2018-2020
Shifting to a framework that caters to customer and market needs■ Shifting to a new framework

Existing

Product Centric
Organizational framework
based on products

FutureCustomer Centric
Organizational framework
based on customers and markets

Gain a deep understanding of customers and establish processes
to develop and produce results in step with customers.
To provide customers with greater added value, strive to enhance
IT solution functions as our strength across all business fields.
To make effective use of Group resources and strengthen the ability tocater to customer needs, supervise products, services and personnel
across the Group in a cross-sectoral manner.
5Medium-term Management Plan (2018-2020) Targets(Billions of Yen)

ActualResults
Net sales(%)

Operating income

2017

632.2
(+0.5%)

30.4

3-year Management Plan
2018

645.0

(+2.0%)

32.0

2019

680.0

(+5.4%)

35.0

2020

720.0

(+5.9%)

38.0(ratio)(4.8%)(5.0%)(5.1%)(5.3%)(ratio)(5.0%)(5.1%)(5.3%)(5.4%)(ratio)(3.3%)(3.4%)(3.6%)(3.6%)

Ordinary income
Profit attributable to owners ofparent
EPS
ROE

31.5

20.7

¥159
7.2%

33.0

21.7

¥167
7.1%

36.0

24.2

¥187
7.7%

39.0

26.1

¥202
7.9%
6

Net Sales and Operating Income Targets of Individual Segments(Billions of Yen)

ActualMedium-Term Management Plan

2017

OperatingincomeNet sales

Growth rate

Consumers
Enterprise
Area
Professional

Other
Consolidated
total

2018

166.3

Net sales

Income ratio

12.7

-

(7.6%)-(4.5%)

-

177.1
257.3
54.5
-23.0
632.2
(+0.5%)

Growth rate

163.0

2020

OperatingincomeIncome ratio

11.6(-2.0%)(7.1%)(+3.3%)(4.6%)(4.4%)(+1.4％)(5.1%)-(+11.9%)-(4.8%)(+2.0%)

7.9

183.0

11.2

261.0

-1.9

0.5
30.4

61.0

-23.0
645.0

OperatingincomeNet sales

Growth rate

170.0

11.5

-

(6.8%)-(4.5%)-(5.0%)-(3.0%)(+5.9%)(5.3%)

8.5

220.0

13.2

280.0

-1.3

80.0

0
32.0

-30.0
720.0

(5.0%)

Income ratio

10.0
14.0

2.4

0.1
38.0

7

Sales Targets by Growth Scenario

Shifting Weight to Growth Areas(Billions of Yen)

800.0
700.0
600.0

34%

233.7

34%

263.6

37%

206.7

33%

215.5

400.0

46.9

7%

53.0

8%

69.1

10%

78.8

11%

200.0

378.6

60%

376.5

58%

377.3

56%

377.7

52%

500.0
300.0
100.0
0.0

2017
Canon’s Profitability Growth Areas

2018

2019

Three-Year Management Plan

Canon’s Growth Areas

2020

Independent Growth Areas
8

Contents

1 Assumptions for formulation of the Medium-

Term Management Plan (2018-2020)

2 Main Strategies in New Segments
3 Structural Reforms

9Consumers Segment

10Consumers Segment

Maintain and increase
profitability in principal
business fields■ Build closer ties between the production and sales
sections to develop attractive products■ Cut SG&A expenses and review the operation process■ Obtain the largest market share in mirrorless cameras
and expand the entry-level customer base

Expandgrowth areas■ Improve business inkjet printers, laser printers andother products and services for the SOHO market■ Step up the e-commerce business

11Enterprise Segment

12Enterprise Segment

Expand ITS business■Change the business focus from sales of business equipment tosales of solutions to expand the ITS business■Shift from provision of SI services upon contract toprovision of proposals and value through solutions

Build closer ties
with customers■Solidify our customer base as a source of strength byincreasing customer satisfaction and make it into ashared asset of the Group beyond segments andcompanies

Create high value-added
businesses and increase
profitability■Create high value-added businesses matched withmarket needs and increase the income ratio

Expand sales by
spreadingsolutions toother sections■ Ensure sector-specific solutions for other sections in thecompany to boost sales and productivity

13Enterprise Segment: Expand Sector-Specific Solution Business
Create a business model with high added-value and productivity
Function-specific typeService provision type

Shift to Cloud

Shift to Sector-Specific
Solutions

SI Business(Develop from scratch, SI core,
IT infrastructure)

Superior system development and technicalcapabilities, knowledge owned as a system
integrator, high performance data centers andpersonnel dedicated to the cloud

Document
Solution
Business(Device, software and development)

Excellent customer base, high level of sales capability asa trading company and significant skills of sectorspecific solution specialists (SS) to resolve businessissues14

Area Segment

15

Area Segment■ Deepen marketing activities in individual regions incooperation with direct sales staff (Canon System &Strengthening sales with
Support) and partners and devise and carry out sales
area marketingstrategies specific to customer groups
and solution business■ Strengthen the IT solution business with active use of
security and cloud solutions

Increasing profitability
by boostingsales efficiency■ Expand non-face-to-face sales and other activities
to increase sales efficiency■ Shift resources to cultivate medium-sized customers

16

Area Segment: Rebuild Business Models Matched with Different Sizes of Customers
Solutions provided

staff members

Area Sales

29 staff members or fewer

Security solutions

30-99

Document solutions

Account Sales

Mission-critical solutions(General Business)

Sector/process-specificsolutions

GB

Take advantage of solution
results forlarge enterprises
Thoroughly cultivate
customers to boost sales

IT Concierge
Increase sales
centering on IT
solutions
Inside sales
Increase sales efficiency

Successively introduce business models built at Canon System & Support to partners
17Professional Segment

18Professional Segment – Production Printing
Production Printing■ Cut sheets-

Strengthening salesforce, expanding solution business in commercial printing-

In-house production and expansion of the central reprographic department(CRD) business-business area

Encouraging replacement with competitors’ machines at mission-criticalprinting■ Continuous forms-

Introduce products matched with the Japanese market-

Actively use the Customer Experience Center Tokyo, a facility for gaining
experience with commercial printers, to boost the capacity to make proposals-

Enhance marketing to diverse commercial printing markets (manuals, catalogs,
newspapers, signage & displays, stickers & labels and direct mail) and carry out full-scale
entry into the area of industrial printing (banner ads, wallpapers, labels)

19

Professional Segment – Industrial Equipment / Healthcare
Industrial Equipment■ Exclusive distribution of overseas manufacturing equipment to domestic
semiconductor manufacturers=> Expand Film deposition equipment manufactured by Evatec=> Introduce Mattson’s equipment for annealing
Healthcare■ Medical imaging: Expand business by establishing collaboration scheme with
Canon Medical Systems Corporation■ Expand OCT angiography■ Medical IT: Expand the medical IT business in collaboration with Canon Medical
Systems Corporation
20

Professional Segment: Imaging Solutions / Network Cameras

Expand projects to the area of video platform system integration
to enlarge the scale of businessIoT device connection

Extended image analysis■ Human counts■ Estimation of attributes■ Face authentication

Video management platform

Sound equipment and sensors

POS system

Control system

IT system linkage

Multi-vendor cameras

Cloud linkage
Extension of camera
functions

General video
recording system
21

Group IT Solutions

22

Group IT Solutions

Outline of ITS Business in Different Segments and Key Themes
Enterprise(Large Customers)

Crossindustry
solutions

Independent
domainsolutions
IT products

Area

Professional(Small-to-Medium-Sized
Customers)

Security
solutions

Data centers andsystem platforms

Cloud-based
security
solutions

Network cameras
andvideo monitoring
platforms

Document
solutionsCompany-wide
document
management andwork flow platforms

Cloud-based
document
management

Electronic draftsubmission systemfor printed matters

Sector-specificsystem integration

Business software
package

Video solutions

Embedded(automotive software)

IT support cloud services forsmall-to-medium-sizedenterprises

Medical IT (MIP)

Computers, network equipment, servers
and security software
MIP:Medical Image Place
23

Strengthening and Creating New Sources of Revenue
Conventional Revenue Models

Revenue Models to Grow in the Future

IT Maintenance Services

MFP + maintenance services
LBP + toner cartridges
Ink Jet Printers+ ink cartridges

Cloud Services
Data Center Services
SecurityWork to strengthen and create stockbusinesses based on IT solution
technologies

24Group IT Solutions Result and Targets

237.0
183.9

(Billions of Yen)

196.0

Professional
Consumers
Area

2017
Result2018
Target～～Enterprise

2020
Target25

Contents

1 Assumptions for formulation of the Medium-

Term Management Plan (2018-2020)

2 Main Strategies in New Segments
3 Structural Reforms

26

Fundamental Structural Reforms: Operation Process Reform

Dramatic simplification of business processes in 2017-2019
 Analysis business operations
in all businesses
・ Visualize processesTime
optimization
時間の最適化・ Visualize costs

 Redesign business processes
・ Revise process rules

・ Create time to find customers
・ Shorten task processing time27

Fundamental Structural Reforms: SG&A Expenses Reduction

SG&A ratio: 30.6% in 2017 -> 28.5% in 2020
■ Main actions in 2018-2020

 Fundamentally revise business processes in all Group companies
 Integrate currently scattered call centers in the Group to reduce the amount Construct the Group’s optimal system for after-sales services
 Carry out structural reform of staff■ Reduction of principal expenses

Reduction Policy

Logisticalexpenses

To be cut by efficiently operating warehouses amid an upward trend due to an increasein shipments and requests for price increases

Officeexpenses

To be cut by integrating area offices and service centers to reduce the amountAdvertisingexpenses

Introduce more efficient advertising expenses through optimal allocation based on thedigital shift28Appendix

29

Outsiders’ Evaluation:

Selected for the Health and Productivity
Stock Selection for the First Time

Canon Marketing Japan Inc. was highly regarded for its management philosophy andpolicy, organizational structure, systems and implementation of measures, andassessment and improvements that it was recently selected for the Health &Productivity Stock Selection for the first time.
30

The performance and future projections made in this document are based on information available at the present time, and include potential risks andinaccuracies.
Owing to various factors, actual results may differ substantially from these projections.

© Canon Marketing Japan Inc. 2018