The Canon MJ Groupʼs Value Creation

Purpose of the Canon MJ Group

Value Creation Process

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

Employees

Customers

Localcommunities

Business partners
Shareholders andinvestors

Societal changes being focused onby the Canon MJ Group
Conserve andprotect the global
environment

Popularize
and accelerate
digitalization

Accelerate
workstyle reforms

Promote change
in the workforce

Educationaland research
institutions▶Page 29

Coexist in harmony withthe global environment▶Page 73

Promote responsible
supply chains

Promote risk and crisis
management

Implement soundgovernance▶Page 79

▶Page 80

▶Page 43

Provide solutions that
advance peopleʼs daily
lives, work, and society

Achieve diverse

working styles (work)

Business activities

through increased productivity

Long-Term Management Objectives (2021-2025) / Medium-Term Management Plan (2022-2025)

5,742

Number of employees receiving DX certification/
DX business certification professional level

Pillars ofrevenue

Investment for
future growth

608

Deep understanding ofcustomers throughcustomer-centric approach

660,000 hours*Training hours per person: 41.0 hours(As of December 31, 2023)▶Page 25

Robust ﬁnancial structure
Ability to generate ample cash
▶Page 70

High-quality Canon products
Relationship of trust with customers
Exploration and provision of advanced

Social and relationship capital
Customer segments in various scales
Various and diverse business partners

17

Canon Marketing Japan Inc. | Integrated Report 2023

Canon
productbusiness
Specialized
areas andnewbusinesses

IT solutions
business

Individual
customers

Large corporations
and quasi-major
and upper
medium-sizedenterprises

Small andmedium-sizedenterprises

Market growth potential

Research & Business Development

Customersin specialist
fields▶Page 23

Creation of new businesses based onsocial issues
Tradingcompanyfunction

Economic value

8.7 %

ROE

Total number of training hours

Intellectual capitalsecure society

Developing together
with customers

Professional

Number of employees receiving DX certification/DX
business certification standard level or higher

Increasing the earnings capacity of
the Canon product business and expanding
the IT solutions business with proﬁtArea

13,887*Percentage of employees: 86.3%

Financial capital

Realize a safe and▶Page 51

Customer- and market-based organizational structureEnterprise

Number of employees completing DX certification/
DX business certification exams

Earnings capacity

Business portfolio

4,000

Consumers

Systems engineers▶Page 81

Enrich lives

2025 Vision | Professional corporate group that solves social and customer issues using ICT and the power of humans

16,089Approx.

Value we create
Social value

Improve organizational
capabilities to enable diverse
human resources to thrive▶Page 77

technologies

Number of Employees

Students

Material issues that meet the expectationsand needs of stakeholders

Source of value creation
Human capital

NGOs and NPOs

Public agencies andlocal governments

Systems
integrator
function

IT solutions
providerfunction

Creation of solutions that anticipate changes inthe times and diverse needs

Net sales¥609.5

ITS sales¥268.9Operatingincome¥52.5

billionbillion

Payout ratio

billion43 %(As of December 31, 2023)

The “Three Selfs” spirit: self-motivation, self-management, and self-awarenes

Canon Marketing Japan Inc. | Integrated Report 2023

18

The Canon MJ Groupʼs Value Creation

Value Creation Story

Special feature: Increasing corporate value through M&As
and capital and business alliances

The Group has expanded its business domains through a series of M&As and capital and business alliances
since the 1970s. We established an R&B organization in January 2024 to strengthen our internal structurewith the aim of achieving further sustainable growth and exploring new areas beyond existing businessdomains. We will introduce the history of our M&As and investments up until now, and the outlook for future
expansion of our business domains.

In addition to M&As, the Group is also reinforcing functions
and supplementing resources through capital and businessalliances in order to expand its IT solutions business. Recently,
we have signed capital and business alliance agreementswith Asilla, Inc. and AWL, Inc. to strengthen imaging solutions, with Doctors Inc., which support medical DX, and withCARE CONNECT JAPAN, Inc., which engages in nursing caresolutions.
In January 2024, as one of the concrete measures toachieve our Purpose, we established the R&B (Research& Business Development) Promotion Center and Canon
Marketing Japan MIRAI Fund, a corporate venture capital(CVC) fund. In approaching potential social issues, we willfurther promote collaboration with industry, government, andacademia, especially co-creation with startups.
We are working to sustainably increase corporate value
by continuing a virtuous cycle of making investments with afocus on capital efficiency and profitability, and reinvesting
the profits generated into growth businesses.

Expanding Business Domains through M&As with Highly Unique Companies
Starting with the sale of Canonʼs pioneering cameras andoffice equipment, the Group has expanded its sales channels
and customer base. Later, in 1982, we fully started our software business by making Fuji System Development a subsidiary, which we had invested in and made an affiliate in 1978,
and this was the starting point for the Groupʼs propelling
independent business. In order to respond to the diversifying
needs of customers, we expanded into the sale of hardware
such as PCs manufactured by other companies. Furthermore,
to strengthen our SI service business, which develops mission-critical systems for customers, we made Sumitomo Metal

System Solutions Co., Ltd. a subsidiary in 2003 and Argo 21
Corporation a subsidiary in 2007, integrating these two companies to form Canon IT Solutions Inc. in 2008.
In this manner, under Canon ʼ s DNA of an enterprising
nature, we have listened to the voices of the market and ourcustomers, added highly unique companies with the functions and areas the Group wants to expand into, challenged
ourselves to leverage synergies, and laid the groundworkfor growth. (To▶ Our Path to Business Transformation and theComment from Head of M&A Promotion
It is essential to design a growth strategy that combines organic growth andinorganic growth when considering increasing the Groupʼs corporate value.
Generally, the success rate of M&As is said to be several dozen percent. In
the Companyʼs M&As, we proceed with deals while repeatedly discussing internally why we want a company to join the Group and its strategic positioning
in order to improve its success rate. We have the courage to suspend deals ifthey do not align with our strategy or if we cannot justify the price. Recently,
we have utilized past experiences and focused more on PMI, and establisheda system where members involved in M&A reviews are responsible for bridging
the companies involved and considering value enhancement measures after
acquisition.
Going forward, we intend to execute M&As that will make both the Groupand the newly joined companies, as well as their customers beyond them, glad
to have joined forces.

Formulation of Our Purpose on page 9)

Narrowing Down Target and Priority Areas to Acquire Functions and Resources We Want to Strengthen
In 2018, we changed our organizational structure from being
based on products and sales channels to being based onmarkets and customers, and narrowed our targets through acustomer-oriented strategy. In the Long-Term Management
Objectives (2021-2025) announced in 2021, we set the goalof ITS3000 aiming for IT solutions business sales of ¥300.0
billion, and established KPIs for priority areas. In order tooffer higher value-added proposals, we are narrowing ourJanuary 2003 October 2006 June 2007
Acquires
Sumitomo
Metal System
Solutions Co.,
Ltd. (nowCanon IT
Solutions Inc.)

September
2008

target and priority areas, and pursuing M&As and capital andbusiness alliances to acquire functions and resources that arelacking or need further strengthening in the Group. We invest
not only for expanding the scale of our business, but in companies with competitive advantages in their fields.
Recently, we added QB5 Inc. in 2022, Tokyo Nissan
Computer System Co., Ltd. (now TCS Inc.) in 2023, andPrimagest, Inc. in 2024 to the Group through M&As.

September2017

May 2021

Concludes a capital
Acquires CAD Acquires Argo
Concludes aConcludes aand businesssoftware sales 21 Corporation Acquires
capital and
BicNIWS Inc.
capital andbusiness from (now Canon IT
business alliance alliance agreement(now Qualysite business alliance
Kubota Solid Solutions Inc.) Technologies
agreement with with Capital Asset
Planning, Inc.
agreement
withTechnology
Keyware
Inc.)
Safie
Inc.
Corporation
Solutions Inc.

December 2013 September
2019
Acquires
Acquires FMS Acquires Chori Launches
Increases
Material
Inc. (nowJoho System
Canon IT
investment
Automation
Canon ITS
Co., Ltd. (now Solutions Inc.
(Thailand)
Medical Inc.)in Safie Inc.
Canon IT
Co., Ltd.
Solutions Inc.)
January 2006 April 2007

19

January 2022

Canon Marketing Japan Inc. | Integrated Report 2023

April 2008

General Manager of Business
Development Department
Corporate Planning Headquarters

Motohiko Kaneko

April 2022

September 2022

January 2023

August 2023

March 2024

Concludes a capitaland business allianceagreement with
Kantsu Co., Ltd.

Concludes acapital andbusiness allianceagreement with
Asilla, Inc.

Acquires the systems
integration division ofCanon Medical
Systems Corporation’s
hospital information
systemConcludes a capital andbusiness allianceagreement with AWL, Inc.

Acquires
Primagest,
Inc.

Concludes a capitaland business allianceagreement with THS, Inc.

Concludes a capital andbusiness alliance agreementwith Doctors Inc.

July 2021

August 2022

December 2022

June 2023

October 2023

Concludes a capital andbusiness alliance agreementwith Needs Well Inc.

Acquires QB5 Inc.

Concludes a capitaland business allianceagreement with
CHIeru Co., Ltd.

Concludes a capitaland business allianceagreement withCARE CONNECT
JAPAN, Inc.

Acquires Tokyo Nissan
Computer System Co.,
Ltd. (now TCS Inc.)

Canon Marketing Japan Inc. | Integrated Report 2023

20

The Canon MJ Groupʼs Value Creation

Value Creation Story

Special feature: Increasing corporate value through M&As and capital and business alliances

Here are some examples of the purposes and expected effects of M&As and investments.

Examples of M&A achievements
For large corporations and quasi-major and upper medium-sized enterprises

QB5 Inc.

Purpose•Develop high value-added solutions for the customer segment ranging from large corporations to quasi-major
and upper medium-sized enterprises and focus on expanding service menus that contribute to the efficiency
of customer operations, including back-office outsourcing

Expected•

Enhance both operational efficiency and service quality and promote highly efficient business operations byexpanding QB5ʼs BPO services to the Groupʼs extensive customer base and incorporating QB5ʼs expertise andbusiness processes into the Groupʼs BPO business
Utilize our IT resources to develop new services that improve the efficiency of customer operations using
advanced technologies such as AI

effects•

For large corporations and quasi-major and upper medium-sized enterprises
Purpose••Expected
effects••••

Enhance the ability to respond to projects and provide added value to customers through mutual complementation of sales and engineering staff
Strengthen proposal and sales capabilities by leveraging TCSʼs sales force and customer base to offer theGroupʼs solutions and products
Strengthen the service provision capabilities of TCSʼs data center business by leveraging the Groupʼs IT
platform
Promote human resource development by utilizing the Groupʼs human resources development and training
programs and exchanging human resources

Primagest, Inc.

•

Aim to further contribute to improving the efficiency of customer operations by utilizing the Groupʼs unique
technologies and the operational experience in the customer segment ranging from large corporations to quasi-major and upper medium-sized enterprises

Expected•

Enhance both operational efficiency and service quality and seek further expansion of the BPO business by
not only expanding Primagestʼs services to the Groupʼs customer base across a wide range of industries, butalso by incorporating Primagestʼs knowledge and expertise into the Groupʼs BPO business
Aim to create new services as a unified entity between both companies by combining the technologies andsystem development capabilities cultivated through the Groupʼs imaging solutions and digital document
services

Representative Director & CEO
Saﬁe Inc.

Ryuhei Sadoshima

Examples of investment achievements
For large corporations and quasi-major and upper medium-sized enterprises
Purpose••Expected
effects•••

For small and medium-sized enterprises
PurposeExpected••

effects••

21

Canon Marketing Japan Inc. | Integrated Report 2023

manufactured by Axis Communications, a Canon Group company, exclusively for Safie Cloud.
On this page, we asked Mr. Sadoshima, Representative
Director & CEO of the company, about the benefits of working with us and the future the company wants to achievewith the Group.

We founded Safie in 2014 with the vision of “create a better future with intelligent vision,” as we wanted to create an open, user-oriented, cloud-driven video
platform. Although we initially engaged in the B2C business, we pivoted to B2B
business in 2016. When we considered delivering services to customers in theB2B business, we thought that collaboration with the Canon Group, which hasa wealth of experience in hardware and software and delivers imaging solutions
globally, was indispensable in terms of the commercial distribution.
With the capital and business alliance in 2017, we were able to provide customers with solutions that combine the Canon Marketing Japanʼs high-quality
hardware with our cloud platform, and now about 250,000 cloud cameras are in
operation, leading to the acquisition of a 56% market share. In addition, throughCanon Marketing Japan, we are expanding VisualStage TypeS based on ourservices to customers in all industries, ranging from small and medium-sizedenterprises (SMEs) to manufacturing sites including large steel companies andfood factories, distribution and airline companies, power companies, and railway
companies.
We are confident that AI solutions using video will grow exponentially going
forward. Against this backdrop, by cooperating with Canon Marketing Japan inedge AI solutions with AI chips embedded in cameras and large-scale services
using Safieʼs platform, we will continue to expand to infrastructure, cities, andglobal services.
Canon Marketing Japan, which has undertaken startup investments in ourcompany twice, has been a partner in our growth. Going forward, we aim toaccelerate cooperation with Canon Marketing Japan MIRAI Fund, a CVC fundestablished by Canon Marketing Japan, create data for everything from homes
to towns, and form an ecosystem to create a better future with intelligent vision
together.

TCS Inc.

Purpose•In 2017, the Company formed a capital and business alliancewith Safie Inc., which has the top market share in cloudrecording services. We have been working together to solve
social issues through video utilization, such as by combining the Companyʼs network cameras and imaging solutions
with Safieʼs cloud services, as well as by providing cameras

Further enhance the full support for our customersʼ IT lifecycle by not only mutually complementing theIT platform businesses of both companies but also combining them with Canon ITS ʼs strength in systemdevelopment
Demonstrate various synergies, such as expanding the Groupʼs solutions to the TCSʼs customer base

For large corporations and quasi-major and upper medium-sized enterprises

effects

Comment from Investee Company

AWL, Inc.

Develop imaging solutions by linking AWLʼs AI image analysis with the Groupʼs network cameras, image management software, and image cloud service, and promote co-creation of DX for stores
Contribute to measures to address worker shortages by utilizing various data related to store operations, notlimited to images
Jointly propose AWLʼs AI image analysis services to the retail industry using our customer base and sales
channels
Jointly develop new functions for AWLʼs AI image analysis services aimed at the retail industry
Create new solutions for the retail industry by linking the Groupʼs network cameras, image management software, and image cloud service VisualStage with AWLʼs AI image analysis services

CARE CONNECT JAPAN, Inc.
Enhance the system and solution lineup to support DX in the nursing care and welfare industry utilizing the knowhow accumulated from solving problems and improving work processes in the nursing care field and contributevalue to customers

Event Canon MJ and Saﬁe Inc. participated in(Tokai Startup Conference in February 2023)

Company name: Safie Inc.
Location: Sumitomo Fudosan
Osaki Garden Tower,

Representative: Ryuhei Sadoshima,
Representative Director & CEO
Description of business:

1-1-1 Nishi-Shinagawa,

Development and operation of the

Shinagawa-ku, Tokyo, Japan

cloud-based video recording and video

Established: October 2014
Capital: ¥5.58 billion

management platform “Safie” andprovision of related services
Corporate website URL:
https://safie.co.jp/en/about/

Strengthen the sales structure by establishing a dedicated system for CARE CONNECT JAPANʼs nursing
record system CARE KARTE, and jointly expand it to new customers through means such as jointly holding
seminars
Accumulate know-how in the nursing care and welfare industry through mutual exchange of human resources
Create Canon S&Sʼs services in the nursing care and welfare industry, such as maintenance and operation services for the nursing record system CARE KARTE
Canon Marketing Japan Inc. | Integrated Report 2023

22

The Canon MJ Groupʼs Value Creation

Value Creation Story

Special feature: Increasing corporate value through M&As and capital and business alliances

Establishment of CVC Fund

Launching the R&B Initiatives
We believe that in order to solve increasingly complicatedand challenging social issues and develop a sustainable society, it is necessary as a corporate to constantly look to the
future and continuously create new value that is free fromexisting frameworks.
Through the R&B Promotion Center, which was established in January 2024, we are building a worldwide network
through collaborations with various stakeholders, such as
startups, academic institutions, and government entities,
and working on creating new value. We will search for new
areas of business based on future social issues that are

Startups

not extensions of existing businesses from a backcasting
perspective, while also expanding existing businesses froma forecasting perspective through the activities of Cross
Functional Team*.
In R&B Promotion Center, we are working to transform thebusiness portfolio of the Group by creating future markets
through an entrepreneurship program (Canon i Program), andexpanding collaborations with other companies.

(Registered name: Canon Marketing Japan Future Investment Limited
Liability Partnership)Social implementation of advanced
technologies and research

Building synergies and collaborations

Participation in collaborative projects

Academic andresearch
institutions

Collaboration
between industry,
government and academia

Collaboration
between companies
Canon Marketing Japan Inc.

Enterprise andventure capital

Collaboration with venture capital

Participation in collaborative projects

Investment target: Domestic and overseas startups at all stages, with a focus on early andFund size: ¥10.0 billion (planned)

Operator: Global Brain Corporation

As one of R&B initiatives, we established a ¥10.0-billion CVC
fund “Canon Marketing Japan MIRAI Fund,” to accelerate
open innovation with startups holding cutting-edge technologies and business ideas.
The investment areas of this fund are based on social
issues anticipated in the future, without being bound by theGroupʼs existing businesses. We will invest in domestic andhttps://we-at.tokyo/en/

Conducting demonstration experiments: 10 years from January 29, 2024 (planned)

Government
agencies*WE AT: Established in May 2024 jointly by the University of Tokyo, Tokyo Medical and Dental University, Kyoto University, UTokyo Innovation Platform Co., Ltd., HakuhodoInc., Sumitomo Life Insurance Company, and Canon MJ. It aims to build a global startup ecosystem that creates innovations to solve social issues.
The WE AT logo is a brand logo that embodies the initiatives of WE AT, and is a trademark filed by the University of Tokyo (Trademark Application No. 2023-111782).

Comment from Head of R&B Promotion Center
New business creation does not always produce immediate results, and failures
are inevitable. However, if we fear failure and seek short-term results, we willlose sight of the true significance of this initiative. We will constantly maintaina spirit of challenge, expand the circle of co-creation through open innovation
with startups and academia that have new technologies and business ideas, andwork on creating new businesses based on future social issues.
To create a future full of hope and joy, and to ensure that we continue to bea necessary part of the future society, we intend to push ahead with innovation
throughout entire Canon MJ Group.

President & CEO
Global Brain Corporation

In establishing Canon Marketing Japan MIRAI Fund, Canon Marketing Japan has
launched the R&B Promotion Center as a specialized organization for R&B towork on the creation of new businesses to solve social issues with a future-oriented approach. There is no doubt that the cooperation between the technologies, business development capabilities, excellent human resources, and diverse
networks of large corporations and innovative startups will be a major driving
force for the creation of new value. We expect this to have a significant impact
on promoting open innovation.
The human perspectives and industrial perspectives set by the R&B Promotion
Center focus on “safe and healthy lives from individualsʼ points of view” and“sustainable economic activities,” which are not only perpetual desires, but also
themes that require us to continue to look at things from a future-oriented perspective. We look forward to creating new value together with Canon Marketing
Japan, leveraging our startup discovery capabilities, hands-on support system,and overall fund management know-how that we have developed over the past
25 years.

Yasuhiko Yurimoto
Company name: Global Brain Corporation
Location: Shibuya-ku, Tokyo, Japan
Established: January 1998
Capital: ¥100 million

General Manager of R&B Promotion Center
Corporate Planning Headquarters

overseas startups with innovative technologies and business models in two major domains: (1) Well-being (humanperspectives) and (2) Business Transformation (industrial
perspectives).
In addition to the M&As and venture capital investmentsthat the Group has steadily undertaken so far, we will take on
the challenge of managing a CVC fund.

Comment from Canon Marketing Japan MIRAI Fund General Partner

WE AT*, etc.

Collaboration with other companies

Fund term

middle*Cross Functional Team: Project team formed to connect domains and technologies
explored by the R&B function with business divisions, withthe aim of creating new businesses that lead to the future
growth of the business divisions

Collaboration with advanced
technologies and companies：Canon Marketing Japan MIRAI Fund L.P.

Name

Representative: Yasuhiko Yurimoto,President & CEO
Description of business:
Venture capital businessCorporate website URL:
https://globalbrains.com/en/

Naoya Ishida

23

Canon Marketing Japan Inc. | Integrated Report 2023

Canon Marketing Japan Inc. | Integrated Report 2023

24

The Canon MJ Groupʼs Value Creation

Overall Strategy

Business Strategy

Functional Strategy

Financial Strategy
simultaneously established the R&B (Research & Business
Development) Promotion Center as an organization to create
new businesses, as well as a CVC fund, the Canon Marketing
Japan MIRAI Fund. With R&B and CVC, we are promoting
backcasting approach by formulating hypotheses aboutsocial issues in the next 10 to 20 years and exploring new
businesses from the perspective of how to contribute to solving these issues, while strengthening the business creation
function together with the conventional forecasting approach.

Aim to increase equity spread byboth improving ROE and reducing costof capital while executing bold
growth investments
Director & Vice President
In charge of Group Auditing,Group Finance & Accounting,and Group Procurement
Chief Executive ofFinance & Accounting Headquarters

Medium-Term Management Plan (2022-2025)
The Medium-Term Management Plan (2022-2025) sets financial targets for fiscal 2025 of ¥650.0 billion in net sales (ofwhich ¥300.0 billion from the IT solutions business), ¥58.0
billion* in operating income, and ROE of 9.0%*.

Tsuyoshi Osato

Achieved Record High Profits for the Third Year in a Row; Aiming to Ensure Achievement of Fiscal
2025 Financial Targets
Overview of Business
For the year ended December 2023, we achieved record highprofits for the third year in a row, with net sales of ¥609.5
billion (up 3.6% year on year), operating income of ¥52.5
billion (up 5.1% year on year), and net income of ¥36.5 billion(up 2.6% year on year). The stock price has also remained at
a high level since the beginning of the year, and we feel thatthe efforts of the Long-Term Management Objectives (20212025) and Medium-Term Management Plan (2022-2025),
which the Group has been promoting, have been confirmedin terms of results, and the direction of the aimed transformation is being appreciated by our stakeholders.
The IT solutions business is driving strong performance. The
sales of the IT solutions business for the period were ¥268.9
billion (up 11.4% year on year), and its sales as a percentageof the Groupʼs net sales composition increased from 37% in
fiscal 2020 to 44% in fiscal 2023. The IT solutions businessconducts business in three areas: systems integration services, maintenance and operations services / outsourcing,and IT products and system sales, with a particular focus
on the highly profitable and sustainable maintenance andoperations services / outsourcing business. For example, data
center services, including cloud services, and the Makasete IT
DX Series, which provides one-stop services from IT planning,equipment selection, installation, training, operation, andmaintenance, are performing well in the enterprise segment
targeting large corporations and upper medium-sized andquasi-major enterprises, and in the area segment targeting
SMEs, respectively. Solutions tailored to each customer segment are being developed in a way that matches the market
needs. We aim to further expand our business centering on
this area in the future.
In addition, in January 2024, the Group announced its
Purpose, which clarifies its social significance, andCash Allocation
Under the Medium-Term Management Plan (2022-2025), we
assume investments of ¥200.0 billion by fiscal 2025 for business growth, with investment strategies focusing on threeareas of business investments, system investments, andhuman resources investments. Continuous investments are
essential for future growth, and we will proceed with flexible
evaluation and speedy decision-making. In business investments, under a basic strategy of positioning the IT solutions
business at the pillar of growth, we expect to make significant investments in the areas of M&As and data centersrelated to IT solutions.
In terms of M&As, we welcomed TCS to the Group in
fiscal 2023. TCS has strengths in the maintenance and operations services/outsourcing area on which we are focusing.

Furthermore, we welcomed Primagest to the Group in March
2024. Primagest is engaged in BPO business, which we havedefined as a focus area within the IT solutions business. The
number of projects under consideration is steadily increasing,
and we are pursuing various projects daily based on long andshort lists. We are aware of the importance of steadily investing for future growth, and are working to seize opportunities
without missing them.
In the data business, demand is expected to grow further inthe future, including for generative AI-related applications, andwe plan to make new investments early on and move forwardwith building No. 3 and subsequent buildings as soon as possible while considering various options in terms of scale andarea.

Approach to Cash Allocation
Shareholder returns
Domains for investment¥4,604

Operatingcash ﬂow

Record high since listing

4,000(As of January 30, 2024)

Growthinvestments of¥200.03,000

billion or more
2,000

Cash on hand

IT solutions
business growth
Priority areas• Edge solutions• IT maintenance for
SMEs• Data centers• Security, etc.

New businesscreation

1,000

Investment details

M&As andinvestments
Systeminvestments
Investments inhuman resources

Reinvest

5,000

25

*Operating income and ROE stated in the Medium-Term Management Plan (20222025) announced on January 27, 2023 were revised upwards.

Continuous Investment for Future Growth and Enhancing Shareholder Returns

Canon MJʼs Stock Price Range (Yen)0

Our ability to generate cash has increased beyond initialexpectations by steadily executing strategies based on thebasic policies of the Medium-Term Management Plan (20222025). We believe that actively investing the ample cash
generated into growth businesses will optimize our businessportfolio and balance sheet, which will lead to improved net
income to net sales ratio and total asset turnover and further
enhance ROE. In each business, there is a growing awarenessthat increasing the efficiency of business assets by allocating
cash to strategic investments will lead to improved ROE for
the Group, and as the Director in charge of finance, I feel confident in achieving the goals two years from now.

Cash and deposits needed, etc.: Maintain an appropriate level of cash anddeposits on hand in preparation for emergencies
2008

2009

2010

2011

Canon Marketing Japan Inc. | Integrated Report 2023

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Canon Marketing Japan Inc. | Integrated Report 2023

26

The Canon MJ Groupʼs Value Creation

Overall Strategy

Business Strategy

Functional Strategy

Financial Strategy
DX, and we are developing these systems as a business foundation to support further productivity improvements.
With respect to human resources investments, it is necessary to secure highly skilled IT human resources throughvarious means to further accelerate the speed of businessexpansion, and we are focusing on upgrading our humanresources both by raising the level of internal human resources and by hiring external human resources.
As an investment manager, I recognize that securing anddeveloping human resources to conduct business investments
is a pressing issue, and one of the main purposes of establishing the R&B and CVC organizations is to develop and produce
employees who are highly proficient in investment strategies
and innovation-minded. By broadly allocating human resources
trained through numerous practices across various businesses, we aim to build a sustainable system where these humanresources can generate new business ideas.

Looking ahead to fiscal 2025 and beyond, we position the
newly established R&B and CVC as key organizations in
implementing business portfolio reform, and plan to strategically invest funds in these areas as they expand. In R&B, wewill explore new areas, as well as expand existing businesses,
while in CVC, we aim to create open innovation with startups
that have cutting-edge technologies and business ideas, andwill make investments of ¥10.0 billion over a 10-year span.
Investments through the CVC are aimed at achieving strategic returns that lead to the creation of new solutions, without
setting hurdles for financial returns such as capital gains orincome gains. However, I recognize that it is my role to charta path where startups grow through our investments and collaboration, and ultimately achieve strategic returns as well as
financial returns. In the CVC, I will make investment decisions
flexibly as the final investment manager.
In system investments, we are investing in the reform of our
mission-critical system and systems that accelerate internal

Shareholder Returns
have decided to implement dividends with a target consolidated payout ratio of 40% or more. Backed by strong businessperformance this fiscal year, we increased the annual dividends
from ¥90 to ¥120, resulting in a payout ratio of 43%.
We will continue increasing dividends by expanding net
income through ongoing investments in sustainable growthwith profits.

We will also focus on returning profits to our shareholders
along with growth investments. For shareholder returns, ourbasic policy has traditionally been to implement dividends
based on a consolidated payout ratio of 30%. However, going
forward, we have revised the dividend target upward, taking
into account the medium-term profit outlooks, investment
plans, and the cash flows generated from investments, andPayout Ratio

Targeting a consolidated
payout ratio of
40% or more

Based on a consolidated
payout ratio of 30%

43%
Payout ratio

38%

37%

35%

35%

33%

33%

120
60

60

60

60

2017

2018

2019

2020

75

90

Stock Price Reached Record Highs; Aiming to Improve ROE and Reduce Cost of Capital
The Companyʼs stock price has reached a record high sincelisting and has remained at a highest-ever level, with a PBR
of 1.28 times and a PER of 15.2 times, and thus we recognizethat the level of our corporate value has been evaluated to acertain degree. We are not content with this, and will continue to work to further increase our PBR in the future.
The cost of capital is currently calculated internally using
commonly employed methods, and we are of course aiming
for a ROE of 9%, a figure that is higher than the cost of capital. Moreover, recognizing that one of the important missionsof management is to increase the equity spread (ROE – costof capital), and we believe it is necessary to further work on
reducing the cost of capital along with improving ROE.
In order to reduce the cost of capital, it is essential to eliminate the asymmetry of information sought by shareholders
and investors and to enhance trust in the Companyʼs growthstrategy in the market. Recognizing an issue in our Group thatthe growth potential of the IT solutions business is particularly not being adequately conveyed to investors, we will work
to gain a broad understanding of the high potential of ourbusiness through IR activities such as business briefings.
In addition, not limited to information dissemination fromthe Company, we plan to actively engage with shareholders

and investors to accurately understand their expectations
and demands of the capital market, reflect them in the formulation of the next Medium-Term Management Plan, and positively link such expectations and demands to future businessdevelopment.

PBR and PER
18.0
14.0
10.0
6.0
2.0

15.2
PER (Times)

10.1

10.9

PBR (Times)

0.79

0.97

2021
2022
Price-to-earnings ratio (PER)
Price book-value ratio (PBR)

1.28
2023

To Our Stakeholders
In order to accelerate business creation towards sustainable growth from fiscal 2025 onward, we must take on thechallenge of various difficulties beyond the frameworks ofexisting businesses, even in areas where past experienceand knowledge are not sufficient, while identifying risks andreturns. Startup investments through R&B and CVC are thefirst steps in these efforts.
However, although startup investments can bring high strategic returns, they also come with a high degree of uncertainty. Furthermore, because rapid decision-making is required,waiting for institutional decisions at the Company could leadto missed business opportunities.
I have been working on establishing frameworks to speed
up investment decisions. We will continue developing internalframeworks that accelerate investments in new businesses
and growth for the Group, and focus on securing and nurturing innovative personnel who will support and operate theseframeworks. In addition, by practicing management thattakes into consideration the cost of capital and stock price,and executing growth investments, we aim to continuously
raise the level of ROE and strengthen returns to shareholders

by increasing the dividend amount in line with income growth.
We hope for your continued guidance and support.

Dividend per share:
Yen

27

Canon Marketing Japan Inc. | Integrated Report 2023

2021

2022

2023

2025

Canon Marketing Japan Inc. | Integrated Report 2023

28

The Canon MJ Groupʼs Value Creation

Overall Strategy

Business Strategy

Functional Strategy

Human Resources Strategy
Acquisition and Development of Specialist Personnel
to Achieve Our Business Strategy

Aiming to Create an Engagement Improvement Cycle
to Sustainably Enhance Corporate Value
Director & Senior Vice President
In charge of Group General Administration &Human Resources Management,Group Legal and Intellectual Property,Group Logistics and Secretarial Oﬃce
Group Executive of General Administration &Human Resources Management Headquarters

Minoru Mizoguchi

Maximizing the Value of Human Capital through the Engagement Improvement Cycle
In order to pull further ahead with our business strategy
with our aim of becoming a professional corporate group, weat the Canon MJ Group need to further strengthen the link
between our business strategy and human resources strategy
from a medium- to long-term perspective. As such, we haveadded “establish an engagement improvement cycle” to oneof the basic policies in the Medium-Term Management Plan
(2022-2025). The engagement improvement cycle consistsof three elements: employee job satisfaction, the development of skilled personnel, and customer satisfaction, and isan initiative geared toward linking our business strategy andhuman resources strategy. By formulating and executing measures to provide value based on our business strategy, we
aim to achieve customer satisfaction. As for human capital,
the source of value creation, we aim to develop skilled personnel and enhance employee job satisfaction.

We encourage autonomous growth and specialization
through the development of skilled personnel, and enhancement of organizational capabilities so that individual
employees can perform to their full potential through job satisfaction, maximizing the value of human capital. The idea isthat the value created from these efforts brings satisfaction
to customers, which in turn leads to enhanced job satisfaction and motivation for growth among employees, thereby
creating a virtuous cycle that ultimately results in the sustainable growth of the company.
In our human resources strategy, we aim to create a virtuous cycle by working to develop skilled personnel and achieve
employee job satisfaction, thereby leading to the sustainableenhancement of corporate value through the realization of
our Purpose.

Sustainably Increase Corporate Value
Purpose of the Canon MJ Group

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

Increase in value provided

Developmentof skilled
personnel

Rewarding sense of contribution

Engagement improvement cycle

Employeejob
satisfaction

Motivation for growth

Achieving Business Growth by Developing Skilled Personnel amid a Shrinking Workforce
Bridging the Gap between Business Growth and a
Workforce Decline by Developing Skilled Personnel
In Japan, the workforce is shrinking at an accelerating pace,causing intensified competition for IT personnel in particular. Against this backdrop, we expect the number of Group
employees to fall as a result of natural attrition owing to29

Canon Marketing Japan Inc. | Integrated Report 2023

our personnel structure. In order to achieve business growthin such an environment, we are working to clarify the gap
between having a smaller workforce and achieving business growth, and are developing skilled personnel to bridge
this gap.

In the development of skilled personnel, we are implementing
initiatives mainly on two fronts: acquiring and developing specialist personnel to achieve our business strategy, and raising
the level of employeesʼ basic skills, including digital skills, tofurther improve productivity.
As part of these initiatives, we defined the skills requiredin achieving our business strategy in accordance with theMedium-Term Management Plan (2022-2025). This was thenused to identify the number of employees in each skill levelclassified from 1 to 5, and set targets for each level. Our particular focus is on developing highly skilled personnel by promoting participation in training and seminars and reinforcing
work experience through job rotation. Simultaneously, we aretaking measures to develop the next generation of managerial
personnel. To this end, we have established frameworks for
managerial personnel development, such as conducting selection training for managers and general managers and appointing them to key positions.
We also place importance on hiring professional personnel
from outside the company as a means of developing skilled
personnel, and are actively carrying out recruitment activities
on this front. The Group has adopted meritocracy as a guiding principle in the Canon Code of Conduct since its founding,and has been actively conducting mid-career recruitment
from an early stage. In addition, we have systems in placethat enable employees to perform to the best of their ability, such as the position-based pay system, under which

compensation is determined based on job duties and performance, regardless of age or years of service. We believe thatthese systems can provide us with a certain advantage evenin the face of intensifying competition for human resources in
the labor market.

Further Improvement of Productivity by Raising Basic
Skill Levels

Our initiatives to raise employeesʼ basic skill levels are aimed
at improving the productivity of each employee across all
Group departments not limited to those in the IT solutions
business. Thus we work to enhance their digital skills andhelp them acquire the business skills required of their rank.
Since 2022, we have implemented DX certification and DX
business certification exams across the entire Group for two
consecutive years. As of the end of 2023, approximately
5,700 employees have received certification at the standard
level or higher (of which approximately 600 have professional
level certification).

Active Investment in Human Resources Aimed at
Developing Skilled Personnel
Under the Medium-Term Management Plan (2022-2025), weplan to spend ¥200.0 billion by 2025 on growth investments
including investments in human resources. To achieve further
growth, we intend to accelerate investments geared toward
the acquisition and development of professionals and innovative personnel, particularly those with expertise in IT.

Improving Employee Satisfaction through Visualization of Engagement Scores and Creation of a Rewarding Workplace
Engagement Scores Improved Two Years in a Row
As part of measures to improve employee job satisfaction, we
have been working on the visualization of engagement scoresas well as creation of a rewarding workplace.
We have been conducting an annual engagement surveyof all Group employees since 2021, to visualize our engagement scores. By formulating and implementing improvement
measures based on the survey results, we have improved our
engagement score for two consecutive years.
In January 2024, we established the Canon MJ Group
Purpose based on the belief that we need to unify the aspirations of diverse Group employees. Many companies havejoined the Group through M&As and other means, and their
origins and business activities vary greatly from one another.
As we expect new organizations and personnel to be added
going forward, raising a sense of unity within the Canon MJ
Group and improving employee job satisfaction are importanttasks in terms of our business strategy. I believe that clarifying our Purpose and carrying out initiatives to make sure
it reaches all corners of the Group will raise the rewarding
sense of contribution and job satisfaction of each and every
employee working in the Group, thereby leading to theestablishment of an engagement improvement cycle.

From Workstyle Reforms to Job Satisfaction Reforms
With the aim of creating a rewarding workplace, we launched
the Work Practice Reform Promotion Project in 2020, andhave since been making efforts to lay down the foundation
for reforms including our system reforms.
In addition, as part of our job satisfaction reforms throughwhich we pursue workstyles that bring out the best in each

employeeʼs individuality while also improving productivity, we
are working to realize new workstyles that create added value
by establishing varied workplaces, revising work processes,
and establishing frameworks to encourage telework.
We have also positioned diversity promotion as one of
our key issues in improving our organizational capabilities sothat employees from diverse backgrounds are able to workwith enthusiasm and demonstrate their full potential. We areworking to increase the percentage of people in managerial
posts who are women to 6.0% or more (4.8% in 2023) and thepercentage of people in chief or assistant manager positions,which are positions held by prospective managers, who are
women to 20.0% or more (16.4%) by 2025. Moreover, basedon the health first principle set forth in the Canon Codeof Conduct, we are carrying out strategic and continuous
initiatives to improve employee health literacy and develop
a health culture. Thanks to these efforts, Canon MJ was
selected under 2024 KENKO Investment for Health Stock
Selection and was certified under the 2024 Certified Health& Productivity Management Outstanding Organizations
Recognition Program.
Our human resources strategy is an ongoing endeavor. I
have been in the HR field for many years, and have always feltthat it is an eternal challenge working out how best to synchronize the skills needed to carry out work duties with theabilities and intentions of individual employees. An abundanceof talented personnel goes to waste if we are unable to fully
utilize their potential. We will strive to maximize the potentialof each and every employee and to enable the company andour personnel to continue growing together.
Canon Marketing Japan Inc. | Integrated Report 2023

30

The Canon MJ Groupʼs Value Creation

Overall Strategy

Business Strategy

Functional Strategy

Human Resources Strategy

Vision for Our Human Resources

Engagement Improvement Cycle “Development of Skilled Personnel”

Professional Human Resources who Demonstrate
an Enterprising Nature and Continue to be
Selected for Creating New Value

We are working to achieve our business strategy and further improve productivity by developing skilled personnel through an
engagement improvement cycle.
Increase in value provided

Developmentof skilled
personnel

Customersatisfaction

Rewarding sense of contribution

Engagement improvement cycle

Employeejob
satisfaction

Motivation for growth

Adhere to the principles of self-motivation, self-management, and self-awarenessin day-to-day activities

Meritocracy

Make vitality (V), specialty (S), originality (O), and personality (P) daily pursuits

Internationalism

Strive to become a culturally sensitive, internationally minded, sincere, and active person

FamilismStrengthen the trust and understanding of others and work together in a spirit of harmony

Health First

Live by the motto “healthy and happy” and work to cultivate character

We continue to learn of our own accord based on the “Three Selfs” spirit and use the cultivated knowledge to take on new
challenges in our business or work. In doing so, we accomplish transformation. And this is where we start learning something new
again. People develop and grow through this cycle. Through growth achieved via proactive learning and the resulting change inbehavior, we aim to develop professional human resources who demonstrate an enterprising nature and continue to be selected
for creating new value.

1

Enhancing Corporate Value through the Engagement Improvement Cycle
We aim to create a cycle in which the independent growth of employees and the improvement of their skills helps invigorate theorganization as a whole and creates customer satisfaction. Ultimately, it leads to enhanced job satisfaction and motivation forgrowth among our employees. By putting this engagement improvement cycle into motion, we strive to maximize the value of ourhuman capital.
This engagement improvement cycle comprises three elements: employee job satisfaction, the development of skilled personnel,
and customer satisfaction. Of these elements, in 2022 we sought to visualize the gap between our current situation regarding
employee job satisfaction and the development of skilled personnel and our ideal vision for these elements. In 2023, we implemented measures to bridge this gap and also worked to create indicators in order to engage in more concrete efforts toward customer satisfaction. In 2024, we will quantitatively visualize the connections between each element and their impact, while also
accelerating efforts to achieve our Purpose through a virtuous cycle, thereby enhancing corporate value.
Four committees are working together to promote initiatives geared toward achieving an engagement improvement cycle.
These committees are the Sustainability Promotion Committee, which promotes the sustainability management of the Group; theBrand Strategy Committee, which oversees efforts to maintain and improve brand value; the Quality Improvement Committee,
which implements continuous efforts to improve quality, and the Human Resources Strategy Committee, which promotes initiatives to maximize the value of our human capital. Through the close exchange of opinions and the promotion of collaborative
initiatives, the committees are working to integrate the Companyʼs management and human resources strategies by creating
frameworks and environments that lead to results.

31

Canon Marketing Japan Inc. | Integrated Report 2023

Personnel structureTime• Development of specialist personnel• Acquisition of external personnel• Leadership training• Programs that support growth and taking on challenges

2

Further Improvement in Productivity• Acquisition of rank-specific business skills• Enhancement of digital skills

In order to achieve the Medium-Term Management Plan
(2022-2025), we defined the positions and skill requirements
deemed significant in achieving our business strategy, andcategorized them into levels 1 to 5. We identified the gap
between the number of employees required for each skill

Medium-Term
Management
Plan

Gap

Acquisition and Development of Specialist Personnel toAchieve Our Business Strategy

Defining the Positions and Skill Requirements Deemed
Significant in Achieving Our Business Strategy

Defining thepositions andskill requirements
deemed significant
in achieving ourbusiness strategy

Business growth

Development ofskilled personnel

The “Three Selfs” Spirit

As a result of the decline in Japanʼs labor force, we expect the number ofGroup employees to decrease due to natural attrition. In order to increase
the value we provide with a smaller workforce than we currently have,thereby bridging the gap between business growth and workforce decline,
we are working to develop skilled personnel on two fronts. The first initiative
involves acquiring and developing specialist personnel to achieve our business strategy, while the second consists of improving the skills of employees across the entire Group in order to achieve even higher productivity.

Development ofSkilled Personnel

Code of Conduct

Two-pronged Approach to Developing Skilled Personnel

Medium-Term
Management Plan

The Canon MJ Group carries out its daily business in accordance with the five guiding principles of the Canon Code of Conduct
passed down since its founding so that each employee will find their job rewarding and live with good health and wealth.

Identifying
the gap andformulating
measures tobridge itlevel in 2025, the final year of the Medium-Term Management
Plan (2022-2025), and the current number of employees.
Based on this, we have been formulating and executing measures aimed at closing this gap, dividing them into measures
to be carried out across the entire Group and those to be
implemented by each division.

Implementing
Groupwidemeasures anddivisional
measures

Confirming
progress with
KPIs andupdating targets

Canon Marketing Japan Inc. | Integrated Report 2023

32

The Canon MJ Groupʼs Value Creation

Overall Strategy

Business Strategy

Functional Strategy

Human Resources Strategy

1Acquisition and Development of Specialist Personnel to Achieve Our Business Strategy
Development of Specialist Personnel

In developing specialists for each position, we divided skills
into specialized skills for specific business and transferrable
skills that work across multiple businesses. As skills related
to the IT solutions business fall under both categories, going
forward we will link them with the Groupʼs positions, visualize

the number of personnel we aim to cultivate for these positions, and provide training to improve their skills in accordance with the Digital Skill Standards*.
*Digital Skill Standards: Definition of the skills required in the digital age, announced
by the Ministry of Economy, Trade and Industry (METI) andthe Information-technology Promotion Agency (IPA) in 2022

Initiative 1
Development of Highly Skilled Human Resources at Canon IT Solutions
Canon IT Solutions Inc. is promoting a business co-creation model and the service provision model to realize its
goal of becoming a co-creating company as stated in its VISION 2025. To that end, the company is working todevelop the human capital that holds the key to these models, namely consultants, and personnel who can create
service concepts.
Co-creation School: Business Co-creation Course

Co-creation School: Service Creation Course

The Business Co-creation Course involves a sixmonth curriculum that refines the issue identification capabilities of personnel who will promote
the business co-creation model. It also enables
such personnel to accumulate actual experiencethrough hands-on projects. By doing so, thiscourse supports the growth of human resources
who possess advanced knowledge and skills.

The Service Creation Course offers a curriculum
centered on the Graduate School of Project
Design, helping to strengthen the new service
creation capabilities of personnel who will promote the service provision model, thereby supporting their growth.

Acquisition of External Personnel
In our recruiting activities, we are actively conducting mid-career recruitment in addition to the regular hiring of newcollege graduates. Our particular focus has been on humanresources that will drive the IT solutions business and as aresult, personnel with diverse backgrounds are playing anactive role by breathing new life into our operations.
The R&B Promotion Center, which was newly established in
January 2024, gathers innovative personnel discovered andcultivated within the company, and also welcomes experienced personnel from outside the company as leaders.
Going forward, we plan to continue recruiting professionals
in new fields that will take on challenges in various fields aswell as within the R&B Promotion Center.

Development of Innovative Personnel and Business Development Accelerators toward Creation of New Value
Discovery and Development of Innovative Personnel

Training of Business Development Accelerators

In order to create new value, we have identified
the skills and mindset needed for innovation,
and are working to discover and develop innovative personnel.
In 2023, we implemented e-learning in which
all Canon MJ Group employees were taught
basic knowledge on design thinking followed
by a design thinking test to visualize their innovation skills. We will encourage employees tounderstand their own strengths and characteristics and connect this to further skill improvement, as well as provide opportunities for highly
skilled personnel to play an active role in theGroup.
In addition, we are working to develop
employeesʼ skills and mindset by conducting
various in-house workshops that utilize art
thinking and design thinking, as well as external
programs that enable cross-industry exchanges.

We are internally training business development
accelerators who own the knowledge to create
solutions from scratch.
Business development accelerators provide
support for the in-house entrepreneurship program, co-creation projects with other companies, and other initiatives in order to accelerate
the Groupʼs business development and increase
the probability of success.
They are able to get involved in a wide rangeof projects such as providing startup support asa capitalist for the venture capital in which wehave invested, both inside and outside of thecompany and refine their skills.

(Number of people)
New graduates
Mid-career hires

214

189

197

63

52

51
2021

2022

2023

Leadership Training
Based on the “Three Selfs” spirit that constitutes the Canon
Code of Conduct, the Canon MJ Group provides training
to support the demonstration of leadership from younger employees through to managers. In the current VUCA
(Volatility, Uncertainty, Complexity, and Ambiguity) era, we
encourage the concept of shared leadership, in which each
person thinks autonomously, involves others, and takes action.
Accordingly, we are working to foster self-motivation andself-awareness, part of the Three Selfs spirit.

Development of Managerial Personnel

Initiative 2

Recruitment Results of IT Solutions Personnel

The next generation of managerial personnel is determinedby the Nomination and Remuneration Committee, which ischaired by the president and comprises both inside and outside directors. The development of the potential candidates
is deliberated by the Human Resources Strategy Committee.
These processes are followed by examining the specifics suchas the appointment of candidates for important positions
and participation in selection training, forming the long-term
framework for developing managerial personnel.
We have held Quorum 12 since 2014, a training session
for select personnel in the general manager class. While theparticipants are expected to enhance their management skills
through such sessions, incorporating a liberal arts curriculum
into such training also enables them to enhance their people
skills, refine the understanding and sensitivities of managerial
candidates, and develop flexible ways of thinking.

Furthermore, we have held Quorum15 since 2019, a set of
lectures targeting select managers, in order to swiftly cultivate leadership personnel. These managers have also been
engaging in training through contests between businessschools and field work pertaining to regional revitalization,
among other activities. Upon completing either Quorum 12
or Quorum 15, participants are assigned to positions in which
they have no previous experience, thereby helping themdevelop into diverse personnel with broad ranges of insight.
In this way, Quorum 12 and Quorum 15 function as effective
frameworks for the development of the next generation ofmanagerial personnel.

System for Developing Next-Generation Managerial Personnel
Board of Directors
Nomination and Remuneration Committee
Management Committee
Human Resources Strategy Committee

Quorum12

Quorum15

Programs that support growth and taking on challenges
Career Development Support Program
In addition to regular career interviews between employees
and their supervisors, we help employees to think independently about their career through career consultation sessions with full-time career consultants (nationally certified)and career seminars specific to employee rank and age group.
It supports their proactive engagement in duties aimed atachieving their career goals.

In-House Recruiting Program and FA System

program encourages employees to take on new positions andseeks to stimulate their career aspirations. JOBS is a programthat allows employees to transfer across departments andcorporations and to put themselves up for new positions.
We also began operating the company FA (Free Agent)system in 2023, which provides employees with the opportunity to take on challenges of their own will. FA is a system inwhich employees have the right to indicate their intentions
with respect to their career and the type of job they wish totake on.

We support career development through an in-house recruiting program, JOBS (Job Opening Bulletin System). This

33

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Canon Marketing Japan Inc. | Integrated Report 2023

34

The Canon MJ Groupʼs Value Creation

Overall Strategy

Business Strategy

Functional Strategy

Human Resources Strategy

2

An Overall Picture of Our Employee Development and Career Support Measures Backing theDevelopment of Skilled Personnel

Further Improvement of Productivity
Acquisition of Rank-Specific Business Skills

Employees are able to gain the basic business skills required
for each rank at the time of promotion through systematic
rank-specific training, and consolidate these skills throughon-the-job training. Based on the Katz model*, we aim tohave employees hone conceptual, technical, and human skills.

In addition to rank-specific training, we also provide opportunities for voluntary learning to support the improvementof business skills used day-to-day through a variety of programs, such as self-selected distance education and externalseminars.

*A theory proposed by management scholar Robert L. Katz that categorizes and articulates the skills required for management by hierarchy and skill level

Enhancing Digital Skills
With the aim of acquiring basic digital skills and improving
operational efficiency, we had all employees complete data
literacy e-learning courses in 2022, and take DX certification
and DX business certification exams in 2023. By exposing
employees to the latest examples of DX, we aim to not only
improve productivity, but also broaden the conversations
they can have with customers and business partners, thereby leading to the creation of new ideas. We will continue to
conduct the DX certification and DX business certification
exams twice a year to provide an environment in which we
can update employees on the latest information.

In addition, each year over 1,000 employees work hard to
improve their skills through Aidemy Business, an e-learning
platform specialized in AI, to learn basic knowledge andcarry out Python training. In particular, hands-on lectures by
in-house data scientists and on-the-job support are available
to employees who work with data as partof their job, and they are putting in theeffort to apply and enhance their skills inpractice. We aim to improve operational
efficiency by utilizing various data accumulated in-house.

The Canon MJ Group coordinates its human resources development efforts with career support measures in order toeffectively develop specialist personnel and further improve
productivity. In terms of human resources development, we
provide rank-specific training to support transitions to second-year employees, fifth-year employees, and managerial
positions, as well as training for all employees to acquire

Development Measures
Groupwide

We began implementation of DX certification and DX
business certification programs for all Group employees
in 2022, and 5,742 employees received certification by
the end of 2023, of which 608 received professional
level certification with a score of 800 points or higher.

This time, three Group companies simultaneously received the Corporate Excellence Award andExcellence Award (for individuals) in the IFSJ Innovation
Awards in the DX Certification™ Series sponsored by
the Innovation Fusion Society of Japan.

By rankBy age group

Quorum12(Selection training fornext-generation managerial
personnel)

Creative life seminar II(57 years of age)Groupwide

Creative life seminar I(52 years of age)

Data analyst development

Quorum15(Selection training fornext-generation managerial
personnel)

Career design seminar IV &individual meetings(40 years of age)

Digital marketing training

Training for new line managers

Career training (subordinate
support) & individual meetings

Digital skills

DX certification
Assistant manager training

Aidemy Business
Data literacy training

Empowerment Program(Empowerment of women)

Business skills

Training for new Level 4 employees(chiefs)

Design thinking test
TOEIC test

Training for new Level 3 employees

Self-selected distanceeducation

Career design seminar III &individual meetings(35 years of age [planned])

Fifth-year employee training

Career design seminar II &individual meetings(27 years of age)

Second-year employee training

Career design seminar I &individual meetings(24 years of age)Award Overview Corporate Excellence Award: Given to companies with the highest number of certified
employees in the DX Certification Series
Excellence Award (for individuals): Given to individuals who have achieved excellent scores(the top three) in the DX Certification Series

Career Support Measures

Training for new general managers

DX business certification

Three Canon MJ Group Companies Simultaneously Received the “Corporate Excellence Award” andthe “Excellence Award” in the “DX Certification™” Series

digital and business skills. With regard to career support
measures, in addition to career seminars specific to employee
rank and age group, as groupwide measures, we help employees independently realize their ideal careers through regularcareer interviews between employees and their supervisorsand career consultation sessions with full-time career consultants (nationally certified).

Workplace/Manager

Careerinterviews
betweenemployees
and their
supervisors(once ayear)

Careerconsultants

Post-event
interview(3 months
later)
Careerconsultation
sessions(available asneeded)New employee training

Award Details

Canon MJ (DX Business Certification)
Corporate Excellence Award: Had the highest number of employees
certified at the professional level
Excellence Award (for individuals): One of its employeesʼ score camewithin the top three highest scores
Canon S&S (DX Business Certification)
Corporate Excellence Award: Had the highest number of employees
certified at Professional or Expert level
Excellence Award (for individuals): One of its employeesʼ score camewithin the top three highest scores
Canon IT Solutions (DX Certification)
Corporate Excellence Award: Had the highest number of employees
certified at Professional, Expert, orStandard level
Excellence Award (for individuals): One of its employeesʼ score camewithin the top three highest scores

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36

The Canon MJ Groupʼs Value Creation

Overall Strategy

Business Strategy

Functional Strategy

Human Resources Strategy

Engagement Improvement Cycle “Employee Job Satisfaction”

Workstyle Reform Promotion

We are working to use engagement scores as an indicator and create a comfortable working environment to improve employee
job satisfaction, part of the engagement improvement cycle.
Increase in value provided

Developmentof skilled
personnel

Customersatisfaction

Rewarding sense of contribution

Engagement improvement cycle

Employeejob
satisfaction

Motivation for growth

We are promoting workstyle reform through three task
forces: Workplace, Workstyle, and Work Processes.
Our diverse range of workplaces and workstyles
in which employees can independently choose when
and where they work, such as telework and staggered
working hours, contribute to the achievement of job
satisfaction and productivity improvement.
We also aim to increase the added value of employeesʼ day-to-day work through the visualization of work
process productivity.

Transform the awareness, knowledge, and actionsof each and every person

Workplace ・Link new work practices and business site strategies
・Create a mechanism for bringing about atransformation in the internal culture
・Build a diverse workplace

Realizing new work practices that generate added
value

Work
processes ・Visualize productivity and implement measures
・Transform shared services
・Reassess work processes

Shift to flexible work practices that are notlimited by time or location

Work style

Engagement Scores Improved Two Years in a Row
Group Employee Engagement Survey
・ Implemented engagement survey targeting Canon MJ Group
employees
・ Four options available to answer survey questions: “agree,”“somewhat agree,” “somewhat disagree,” and “disagree,” withpoints assigned to each answer for a total possible score of 1,000

678

686

706

Examples of Various Measures for Workplaces, Workstyles, and Work Processes
The Canon MJ office offers many meeting spaces as places
for co-creation, while our satellite offices provides a wide
variety of work environments suitable for intensive work. In
order to realize location-independence, we are abolishing
fixed-line telephones and expanding online meeting tools.
The hybrid workstyle of combining in-office work andtelework has led to enhanced business continuity and the

reduction of travel time and costs, among other benefits.
In order to revitalize communication in hybrid work, we arepromoting the use of internal social networking sites (SNS)where all Group employees can participate to share knowhow and recent topics, location monitoring tools that show
who is where, and one-on-one communication between
supervisors and their subordinates.

2022

2023

2025

Dubbed the Engagement Caravan, we conduct dialogue between
the Group Employee Engagement Survey Secretariat and eachbusiness division.
Through these activities, we exchange opinions on employee
satisfaction and growth based on the results of the employee
engagement surveys carried out in each organization, clarify
organizational issues according to job characteristics and theoperating environment, and bring together initiatives to support
effective growth. We aim to increase job satisfaction in each organization by instilling the best practices we have learned throughout the Group.

Initiative 2Management and Career Support Utilizing Personality and Value Diagnosis
using this to communicate better with them improvetheir relationship and help with managing thesesubordinates.
We also intend for employees themselves to recognize their personality traits, strengths, and weaknesses, and use them to gain a clear career vision, thereby
improving employee satisfaction and improving theoverall performance of the organization.

Our free-address office where employees can choose the environment thatbest suits their day-to-day work

A co-creation desk that realizes communication between employees working
in-office and remotely

Revitalizing Communication withTools that Support Hybrid Work
Employees upload posts on various
themes, such as sharing knowledge andknow-how, introducing products andservices, holding events, and spreading
information on the initiatives of theirdepartment.

Our satellite office shared among
Group companies

Solo workspaces
prepared by individual
employees including
their home

Fostering Internal Job Satisfaction by Realizing External Job Satisfaction
We help employees achieve better work (= enjoyment) in the three areas of colleagues, spaces, and time (external job satisfaction), and foster the three sensesof solidarity, contribution, and achievement (internal job satisfaction) that can begained from these efforts, thereby leading to improved job satisfaction.

Improving Employee Job Satisfaction to Create
an Engagement Improvement Cycle
Canon MJ Group Style of Job Satisfaction
Three areas
Three senses(external satisfaction)
Having good colleagues and acomfortable space to spend agood time leads to good work

Colleagues

Good work＝

2021

Dialogue with Employees through “Engagement Caravan” Activities

Canon Marketing Japan Inc. | Integrated Report 2023

to build

Hybrid Work Across Various Workplaces

Initiative 1

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・Pursue the organizational community that we wish
・Make communication more active in all directions
・Build systems for supporting telework

We have been carrying out an annual engagement survey of Group
employees to evaluate the progress we are making toward employee
job satisfaction since 2021. The survey is conducted in a four-choice
format, with points assigned to each answer for a total possible
score of 1000. Our goal is to have all 20 key questions answered withaffirmative responses (667 points or more). In fiscal 2023, the scoreincreased for the second consecutive year, with 15 of the 20 questions answered with affirmative responses (compared to 12 in fiscal
2022). We will continue to carry out this survey, analyze employee
responses, identify issues and implement countermeasures, and aim
for further improvement.
In fiscal 2023, in addition to the existing questions, we added
questions related to growth to analyze the relationship between
employeesʼ desire for growth and their behavior. This will enable us
to better understand employeesʼ awareness and desire for growth,which will help us to implement specific measures to increase theirjob satisfaction.

In recent years, the number of employees withdiverse values and work perspectives has increased,
resulting in changes in the way we communicate. In
order to respond to such a new environment, we conduct surveys of all Group employees on their personalities, preferences, and work philosophy, and provide
feedback to them and their superiors.
Superiors understanding the characteristics of theirsubordinates and the source of their motivation, andShift to highly
productive
workstyles inwhich each
employee canperform to theirfull potential
and play anactive role

Time

Space

enjoyment

Use of staggered shifts
Visualization of productivity

Sense ofsolidarity

The feeling of wanting to do something with colleagues
who share the same feelings⇒ Becomes a source of communication and cooperation

Sense of The feeling of wanting to help someone (something)
contribution ⇒ Fulfilled through expectations, empathy, gratitude, etc.
Sense of Gained from the results (evaluation) of work and growthaccomplish- ⇒ Fulfilled more strongly by sharing with othersmentWorkplace reforms

Promotion of hybrid workTime(internal satisfaction)
Good emotions from good work lead tojob satisfaction

Space

Satellite office strategy
Shifting to mobile sites

Location monitoring tools

Colleagues

Revitalizing communication
through Connect
Deepening mutual understanding
through 1-on-1 meetings andon-the-job training

Canon Marketing Japan Inc. | Integrated Report 2023

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