Canon Marketing Japan Inc.
Second Quarter 2016 Results

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

Summary of Second Quarter 2016 Results
Net sales¥150.2 B （Y/Y -8.5B, -5％）

Net sales were driven by B To B transactions in Business Solutions,IT Solutions, and Industrial.
B To C transactions declined due to the weak market.

Operating Income¥5.1 B （Y/Y ＋0.1B, ＋1％）

Operating income rose, reflecting an increase in sales, particularly sales ofservices and consumable goods, and an overall revision of expenses.
Profit attributable toowners of parent¥3.7 B （Y/Y ＋0.4B, ＋14％）1

Summary of Results
 Summary of Results

2Q 2016 Actual(from April 1 to June 30)(Billions of yen)

 Op. Income Variance Analysis2

Segment Outline

2Q 2016 Actual(from April 1 to June 30)(Billions of yen)

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

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Summary of Results
 Summary of Results

1Q-2Q 2016 Actual(from January 1 to June 30)(Billions of yen)

 Op. Income Variance Analysis

4Segment Outline

1Q-2Q 2016 Actual(from January 1 to June 30)(Billions of yen)

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

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Segment Information

Business Solutions

Net sales: ¥79.9 billion (down ¥0.1 billion, or 0% year on year)
Sales of page printer cartridges, IT solutions, and network cameras rose, while sales of page printers andproduction printing declined. Overall sales were about the same level as a year ago.

Operating income: ¥1.9 billion (up ¥0.2 billion, or 10% year on year)
Operating income climbed from a year ago, chiefly reflecting an increase in stock business, which is highly
profitable, and a reduction in SG&A expenses.
2016 Actual v. 2015 Actual

Net sales - Growth rate

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

6Segment Information

IT Solutions

Net sales: ¥34.9 billion (up ¥0.04 billion, or 0% year on year)
Although sales from data center services and the product business were strong, sales in thesegment rose only slightly largely because of a decline in the embedded software business.

Operating income: ¥1.2 billion (up ¥0.6 billion, or 113% year on year)
Operating income increased mainly due to an improvement in the gross margin ratio and areduction in SG&A expenses.
Net sales(Billions of yen)

2016 Actual v. 2015 Actual

Net sales - Growth rate

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

Segment Information

Imaging SystemNet sales: ¥36.3 billion (down ¥7.8 billion, or 18% year on year)
Sales of digital cameras, in particular, fell.

Operating income: ¥2.1 billion (down ¥1.0 billion, or 33% year on year)
Operating income fell due to a decline in the gross margin associated with a decrease in sales.
Net sales(Billions of yen)

2016 Actual v. 2015 Actual

Net sales - Growth rate

Op. income9Segment Information

Industrial / Medical

Net sales: ¥5.9 billion (down ¥0.9 billion, or 14% year on year)

Net sales fell, chiefly reflecting a decrease in sales of X-ray film and sterilizers in Medical business

Operating income: -¥0.1 billion (up ¥0.3 billion, or - % year on year)
Income improved due to cost-cutting in Industrial and a review of the earnings structure inMedical.
Net sales(Billions of yen)

2016 Actual v. 2015 Actual

Op. income
Net sales - Growth rate10

Summary of Projections(Billions of yen)11

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

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

* “Other” includes intersegment sales, shared service businesses, and corporate expenses that are notallocated to each segment.
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Projections Summary Outline
Comparison between results in the first and second halves in
FY 2015 and those in FY 2016

* “Other” includes intersegment sales, shared service businesses, and corporate expenses that are notallocated to each segment.
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Projections by Segment
Business Solutions

IT Solutions

Imaging System

Industrial / Medical

Sales are expected to increase from 3Q due to the effect of new MFPs andexpansion in network cameras. Sales are projected to increase for the full year.

Sales are forecast to rise from 3Q, reflecting strong performance in the IT
Infrastructure & Service Business and Product Business, primarily in SI service anddata center service. Full-year sales are also expected to rise.

Sales are projected to climb from 3Q due to the expansion of sales ofinterchangeable lens digital cameras.
For the full year, sales are forecast to fall because of low sales in the first half.

 From 3Q, sales in the Industry business are expected to remain flat, and sales
in Medical business are projected to fall.
 For the full year, sales in Industry business are expected to increase, but sales
in Medical business, whose business structure is being reviewed, are forecast
to decline. Overall sales are also projected to fall.
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Execution of Growth Strategies (Progress in LongTerm Management Objectives Phase III 2016 to 2020)

Group-wide reorganization of education business
Consolidating operations related to education, which are spread acrossdifferent segments, within the ITS company to expand the education businessEnhancement of sales of IT security
Setting up a section that deals with resources in the Group’s security
business, which is expected to grow significantly

Launch of an after-the-sale service innovation project(August 1)
Launching a project to build an optimal Group-wide service system in orderto respond to innovative changes in business and improve productivity

16SupplementaryInformation

Capital Relationship Diagram

Supplementary Information

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Results of main consolidated companies(Billions of yen)

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

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Results of main consolidated companies(Billions of yen)

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

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SG&A expenses(Billions of yen)Supplementary Information21

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

 Non-operating expenses

Supplementary Information22

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

 Extraordinary expenses

Supplementary Information

23

Balance Sheets(Billions of yen)

Notes and accounts receivable tradeInventories

Supplementary Information

24

Financial indicator(Billions of yen)

Operating income ratio / ROA / ROE

Profit attributableto owners ofparent

Supplementary Information

25

Financial indicatorPayout ratio / EPS / Dividend per share(Billions of yen)Supplementary Information

26

Financial indicatorCash Flow

(Billions of yen)

Investment

Depreciation and amortization

Supplementary Information

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