Message from the President“Bringing Together Hopes and Ideas

with Technologies to Create a Future
beyond Imagining”
Towards Dramatic Growth
Working to Achieve the Goals of Our Medium-Term Management Plan (2022-2025)
We are making steady progress on our Medium-Term
Management Plan (2022-2025). In the fiscal year ended
December 31, 2023, we recorded record high operating
income, ordinary income, and net income attributable toowners of the parent for the third consecutive year.
We believe this achievement is the result of steadily implementing our strategy of increasing the profitability of theCanon product business and investing the cash generated
from this business in the IT solutions business and other areas.
At the same time, we have been implementing our ongoing
efforts, such as improving productivity through business selection and concentration and reviewing business processes.
In our Long-Term Management Objectives (2021–2025),
we set the goal of achieving ¥300.0 billion in net sales in
the IT solutions business by fiscal 2025. We are steadily
approaching this goal, with net sales of ¥241.4 billion in
fiscal 2022, ¥268.9 billion in fiscal 2023, and a target of¥290.0 billion in fiscal 2024. The basic strategy of the ITsolutions business is to provide value that caters to the specific needs of each customer segment, and we are working
to clearly define the areas of focus and transition to a service-type business model. To accelerate this transition to aservice-type business model and take our profitable growth
to the next stage, we will continue to invest in growth andfocus on developing highly skilled professionals.
Our investment strategy is to undertake ¥200.0 billion
in growth investment, including M&As, over the five-year
period ending in fiscal 2025 with the aim of expanding ourIT solutions business. As part of these efforts, in 2023, wemade Tokyo Nissan Computer System Co., Ltd. (now TCSInc.) a wholly owned subsidiary, and made Primagest, Inc. awholly owned subsidiary at the end of March 2024. TCSʼscore businesses are IT infrastructure design and construction, data center services, and system operation. Using

the technical strengths it has developed through thesebusinesses and its highly skilled professionals, it is building
positive, long-lasting relationships with customers. We willcombine TCSʼs strengths with the Groupʼs IT platform business and system development to reinforce maintenance andoperations services/outsourcing, one of our areas of focus.
Primagestʼs strengths lie in its Business Process Outsourcing(BPO) services, which utilize DX. Over many years, it hasestablished a strong customer base, primarily centered on
financial institutions and government ministries, and it enjoys
a high level of trust from customers. By fusing the Groupʼs
own wide-ranging customer base and diverse resources withPrimagestʼs knowledge and highly efficient operation methods, we will further accelerate the expansion of our BPO
business.
We have also concluded capital and business allianceagreements with CARE CONNECT JAPAN, Inc., which develops nursing care systems, AWL, Inc., which excels at AI video
analysis for stores, and Doctors Inc., which supplies digital
health and other services in the medical field. Throughthis investment, we are working to expand our IT solutions
business. The number of investment study projects with thepotential to contribute to business growth is steadily rising.
(To▶ Value Creation Story on page 19)

To develop highly skilled professionals, we are recruiting
personnel from outside the Group. For internal personnel, wevisualize the type of human resources required for each position and role-specific levels in accordance with our businessstrategies. We are also working to raise the base level ofour personnel by enhancing our specialist training, including
administering DX certification exams, DX business certification exams, and design thinking tests aimed at improving
innovation skills. (To▶ Human Resources Strategy on page 29)

Aspiration Incorporated in Our Purpose

President &Representative Director

3Canon Marketing Japan Inc. | Integrated Report 2023

Masachika Adachi

We are simultaneously carrying out multiple long-term initiatives in order to achieve dramatic, sustainable growth infiscal 2025, the final year of our Medium-Term Management
Plan, and beyond.
The Group strives to sustainably increase its corporate
value by solving social issues through our business activities,

but social issues are becoming more complex and severe atan accelerating rate.
We have an extensive customer base that encompasses
everything from large corporations to quasi-major and uppermedium-sized enterprises, small and medium-sized enterprises, and individual customers. We also offer diverse products

Canon Marketing Japan Inc. | Integrated Report 2023

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Message from the President
and services, from products for different customer segments,
such as cameras, business equipment, and semiconductor-related equipment, to SI services and IT services such as ITO
and BPO services. Furthermore, we are expanding our business in each business field in collaboration with our manybusiness partners. Our broad customer base and the various
business partners we collaborate with to offer such a diversity of products and services makes the Group a rarity.
We will continue to focus on M&As as one form of investment for growth and more actively hire and promote outside
personnel, so the Group is poised to grow even more diverse.
We aim to achieve even greater growth by leveraging thisGroup strength of diversity and by further adopting newtechnologies and new knowledge from outside the Group.
Led by this concept, we wish to become an even stronger
unifying force, bringing together stakeholders with the samespirit to solve an even greater breadth of social issues in evenmore areas. This is why in January 2024, based on our philosophy of Kyosei, we have clearly articulated the significanceof the Canon Marketing Japan Group (hereinafter the Canon
MJ Group) in society in the form of our Purpose: “Bringing
together hopes and ideas with technologies to create afuture beyond imagining.” Along with our Purpose, we alsodeclared ourselves to be a MIRAI Marketing Company, which
represents the essence of the Canon MJ Group. When wewere coming up with our Purpose, we wanted to express
both what kind of society we wanted to realize and theGroupʼs strengths and character. The phrase of “create afuture beyond imagining” reflects the moving experience ofseeing a future that surpasses what our customers imagine,
together with our resolve to constantly innovate, unfetteredby convention, to solve the social issues that lie beyond ourcustomers. It also expresses our desire to create a more
beautiful society, abounding with hope and joy. (To▶ OUR
PURPOSE on page 1)

For all Group employees to embody this Purpose, it isimportant that the leaders of each segment and each Group
company interpret the Purpose with respect to their own
divisions and express it in their own words. This helps eachand every field employee see the Purpose as something they
are directly involved in̶to think about how they can embody
the Purpose in their own work, and to put their ideas intoaction. We hope that these actions will become well-known
outside the Group, attracting stakeholders with whom our
Purpose resonates. The entire Group will take on new challenges using a future-oriented approach. (To▶ Our Thoughtson page 7)

Further Ensuring Our Sustainable Growth
To realize our Purpose, we wish to not only solve the socialissues of today but also to promote initiatives aimed at solving the social issues of tomorrow. By doing so, we intend toensure the sustainable growth of society and of the Group.
To this end, it is vital that we refine our business structurefrom a long-term perspective and heighten our effectivenessby supplementing our own technologies and knowledge withoutside technologies and knowledge.
One specific measure we have used to achieve this is
the establishment of the R&B (Research & BusinessDevelopment) Promotion Center in January 2024. The R&B
Promotion Center, with its initial staff of 23 members, will becreating new businesses. It is a specialized organization withtwo functions: a research function that investigates advanced
technologies, business models, and the like, and a businessdevelopment function that creates new business. Throughthese functions, the R&B Promotion Center will reinforce theGroupʼs overall business creation functions.
We have two domains for investment where we anticipate
further market growth: Well-being (human perspectives) and5Canon Marketing Japan Inc. | Integrated Report 2023

Business Transformation (industrial perspectives). Withinthese two domains, we have defined six investment areas,including “life purpose,” creating services that empower anyone to experience the vitality to live in good health throughspiritual enrichment, and “emerging industries,” creating newindustries using innovative technologies that solve socialissues. We plan to actively bring in state-of-the-art technologies and expertise from outside the Group to solve social
issues which cannot be tackled with our own technologies
alone.
In our approach to latent social issues, we are promoting the active real-world deployment of new technologies
through collaboration between industry, academia, and government. We have already launched a joint research projectwith the University of Tokyo, and we plan to promote innovation in conjunction with the Tokyo Metropolitan Government
and to dedicate ourselves to developing innovation-mindedpersonnel.
When we established the R&B Promotion Center, wealso set up the Canon Marketing Japan MIRAI Fund. It isa 10-billion-yen corporate venture capital (CVC) fund thatinvests in the two domains. I look forward to discovering awide range of startup companies through this CVC fund.
I am sure that among the cutting-edge technologies wewill investigate, we will find technologies that have a highlevel of affinity with our current business and which can leverage the Groupʼs resources to expand the business. For thisto materialize, we have assembled a cross-functional team inwhich employees selected from each segment concurrently
hold their current positions as well as R&B positions. These
concurrent members will share the cutting-edge technology
information discovered by the R&B Promotion Center withsales divisions, promoting the use of these technologies incurrent businesses and expanding their scale. (To▶ ValueCreation Story on page 23)

To Our Stakeholders
Through the selection and concentration of businesses andthe transition to a more robust corporate structure, theGroup has heightened its ability to generate cash. We currently consider it vital that we effectively utilize these large
cash reserves, especially through investment in growth. It
is our intention to implement business management that isattentive to profitability and capital efficiency. The cash wegenerate through this business management will be re-invested in growth businesses to further reinforce our business.
By taking this virtuous cycle to an even higher level, we areworking to sustainably increase our corporate value. We arefocused on disclosing information through our Integrated
Report and engaging in dialogue with stakeholders based on
this information in order to provide our stakeholders with adeeper understanding of the Group. (To▶ Financial Strategy onpage 25)

As a result of these initiatives, in fiscal 2023 our stock pricereached a new high. When I was appointed President, ourPBR was less than 1. As of the end of fiscal 2023, it has risen
to 1.28 times. I see this as a reflection of the higher expectations of our shareholders, and I will strive to meet theseexpectations. Over the three-year period between 2020
and 2023, our dividends have doubled, from ¥60 to ¥120. In
January 2024 we changed the target consolidated payout
ratio, which had been 30% or more, to around 40% or more.
We intend on continuing to return profits to shareholders by
ensuring profitable growth.

Bringing together hopes
and ideas with technologies
to create a future beyond
imagining

The Company is a listed subsidiary of Canon Inc. As apublicly listed subsidiary, we understand that our minority
shareholdersʼ greatest concern is whether there is a conflictof interests with our parent company, so we strive to maintain thorough governance. On another front, the expectations and demands of the capital market are heightening. To
demonstrate our dedication to governance, in January 2024
we established a Special Committee as an advisory body tothe Board of Directors. The Special Committee is composed
exclusively of independent outside directors. In addition,
we made the majority of the Nomination and Remuneration
Committeeʼs members independent outside directors. TheSpecial Committee deliberates on and considers the risk ofconflicts of interests between the controlling shareholder andminority shareholders from the perspectives of protecting theinterests of minority shareholders. We will continue to reinforce and enrich our governance efforts.
The Canon MJ Group, a MIRAI Marketing Company, will
promote further transformation, and all of our employees
will work together as one to achieve our Purpose of “bringing together hopes and ideas with technologies to create afuture beyond imagining.” We look forward to your ongoingsupport and guidance.

President &Representative Director

Masachika Adachi

Please refer to the pages indicated below for details on each topic.

Page 9
Our Path to BusinessTransformation and theFormulation of Our Purpose

Page 25

Page 29

Financial Strategy

Human Resources Strategy(Financial Capital)(Human Capital)

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