July 24, 2024
Canon Marketing Japan Inc.
FY2024/2Q Financial Results
Q&A at Presentation Meeting for Analysts
Date and Time: July 24, 2024, 16:00-16:40
Format: Zoom webinar
Presenters:- Hatsumi Hirukawa, Director and Senior Vice President (in charge of group planning and groupcommunications)- Tsuyoshi Osato, Director and Vice President (in charge of group accounting)――――――――――――――――――――――――――――――――――――――――[Q1-1]In the second quarter, what progress did sales and income make in relation to your forecasts?
[A1-1]
Results of all segments were almost as projected. They slightly exceeded the forecasts, if anything.
――――――――――――――――――――――――――――――――――――――――[Q1-2]
Did both sales and income slightly exceed the forecasts?
[A1-2]
They were not far above the forecasts. We achieved the targets and the results slightly exceeded them.
――――――――――――――――――――――――――――――――――――――――[Q1-3]Are sales and income of the Consumers segment included?
[A1-3]Your understanding is correct.
――――――――――――――――――――――――――――――――――――――――[Q1-4]
What impact did the new consolidation of Primagest, Inc. and TCS Inc. have in the second quarter?
What impact on the full-year results do you expect? Please also tell me where in the breakdown of
ITS by segment they are included.

1[A1-4]Previously, annual sales of TCS Inc. were around 8.0 billion yen. Because it joined the Group in
October last year, a simple addition will not take place in the fourth quarter of this year. However, thefull-year result will be on the same level. The results of TCS Inc. have been strong and are expectedto add something extra. It is included in maintenance and operation service/outsourcing among ITS
businesses. That belongs to the Enterprise segment. Previously, annual sales of Primagest, Inc. werearound 18.0 billion yen. This year, the company's sales for nine months will be included, which meansthat sales of around 15.0 billion yen are forecast to be added. The business has been making steadyprogress. It is included in the Other segment, in maintenance and operation service/outsourcing among
ITS businesses.
――――――――――――――――――――――――――――――――――――――――[Q1-5]Is the amount of sales of Primagest, Inc. for the second quarter around 5.0 billion yen?
[A1-5]
It is not that much.
――――――――――――――――――――――――――――――――――――――――[Q1-6]Is the amount of sales of TCS Inc. for the second quarter around 2.0 billion yen?
[A1-6]
I think it is around that level because the amount for this year is expected to be 8.0 billion yen withan additional amount.
――――――――――――――――――――――――――――――――――――――――[Q1-7]
Did ITS grow more than 10% year on year even if the impact of new consolidation is excluded?
[A1-7]
It has been steady.
――――――――――――――――――――――――――――――――――――――――[Q2-1]You said that the forecast for IT products and system sales was revised upward and there was a project
for educational institutions. Am I correct in thinking that the overall PC market is showing signs ofrecovery and the market itself is becoming buoyant? What time lag should we expect to be between
the commencement of a proposal and the appearance of its effects on results?

2[A2-1]
We understand that the overall market is steady. Regarding the end of support for Windows 10,
manufacturers seem to be taking actions early, unlike on the previous occasion. We understand that it
is taking effect in the market. We understand that each sales division is tapping into the demand. At
the Canon Marketing Japan Group, purchasing and selling PCs is not all we do. Each sales division
makes proposals with high added value. Some of them have already produced effects on businessresults while others will in the future. We believe it will take a little while before the effects on
major companies are produced. Small- and medium-sized corporate customers placed orders
with Canon S&S and GB Solutions HQs at the same time as the replacement. We understand that they
have begun to be reflected in the current results.
――――――――――――――――――――――――――――――――――――――――[Q2-2]
Results for the second quarter show that the numerical result of industrial equipment was strong. Is
this as forecast or does it allow us to expect the market to pick up in the second half as well?
[A2-2]
In industrial equipment, we have finished deliveries for this year and some deliveries for the next year.
While there are cases where the increase in sales from services is greater than forecast, the year-onyear increase is as initially forecast. The key point will be whether progress will be made as forecastin the second half as well and sales from services will slightly exceed the forecast.
――――――――――――――――――――――――――――――――――――――――[Q2-3]Does it mean that industrial equipment is relatively good as activities for the next year and onward?
[A2-3]As reported in newspapers and others, the national government is actively investing. Members of
the industrial equipment are aggressively implementing sales activities targeting those investment
destinations as well, and we have received good reports. Steady growth is expected next year andonward.
――――――――――――――――――――――――――――――――――――――――[Q2-4]
I have questions about the tender offer for own shares. You said that even after the acquisition, Canon
will hold more than 50% of your shares and will continue to be the parent company. Please tellme what was behind your decision to acquire the shares in a way that the parent company will continue
to exist, at a time when there is a lot of controversy over parent-subsidiary listings. In addition, inthe Medium-Term Management Plan, you said that you would drive investment growth. Will there be3

any changes to the way you apply funds due to the application of funds to the acquisition of own
shares?
[A2-4]
Our policy to maintain the parent-subsidiary listings remains unchanged at present. We are talking
about the acquisition of own shares under the assumption that we will maintain the parent-subsidiarylistings with Canon. However, we are not in a position to give answers about the future. We remain
determined to enhance our corporate value while maintaining the parent-subsidiary listings, and wewould like to move in that direction.
Acquisition of own shares on a scale of around 80.0 billion yen will not affect the investment forgrowth at 200.0 billion yen. We will continue to invest in growth. Please view the 80.0 billion yen or
so as coming from a completely different wallet. In terms of cash allocations, please view ouracquisition of own shares as a means of shareholder returns.
――――――――――――――――――――――――――――――――――――――――[Q3-1]
Regarding the acquisition of own shares, it has been decided that you will acquire them from Canonas your parent company. You have clearly stated that you also plan to cancel the shares. Considering
this, the ratio at approximately 17% of the total number of issued shares is considerable. I feel that theimpact on the share price will be great if you cancel the shares at all once in the coming two months.
I also thought that the project would remain talked about longer if you cancel the shares a little more
slowly. Please give supplementary explanations about the reason for the drastic decision.
[A3-1]
One objective of the acquisition of own shares is to increase the tradable share ratio. The current ratioof our tradable shares is approximately 38%. We would like to increase the tradable share ratio to beable to increase trading in our shares. We expect that the tradable share ratio will increase to around
45% as a result of the acquisition and cancellation of our own shares. We would like to implement it
promptly to achieve the objectives.
――――――――――――――――――――――――――――――――――――――――[Q3-2]
Do you mean that the expression of your intention to increase the tradeable share ratio as soon as
possible was related to the decision?
[A3-2]
Because it has been demanded in the capital market, we would like to respond to the demand reliably.
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*The content reflects some additions and modifications to enable it to be better understood.
* Disclaimer
The performance and future forecasts made in this document are based on information
available at the present time, and include potential risks and inaccuracies. Owing to various
factors, actual results may differ materially from these projections.

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