5/1/2017 5:10 PM Sales decreased despite increased sales in business - - PDF document

5/1/2017 5:10 PM 1 Sales decreased despite increased sales in business solutions, which were offset by decreased sales in other segments. Operating income rose ¥500 million, reflecting cost cutting that made up for a decrease in the gross margin due to decreased sales. Profit attributable to owners of parent increased ¥1 billion from a year ago due to gains on sales of shares held and the revision of the corporate tax rate, among

• ther reasons.

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(Office MFPs)

• Unit sales of office MFPs declined year on year, reflecting large-scale rental projects in the same

period of the previous fiscal year. (Laser printers)

• Unit sales of laser printers remained the same as those a year earlier, with increased sales of

printers for certain industries such as the medical industry, despite a decrease in large-scale projects for general offices.

• Sales of toner cartridges increased year on year due to increased shipments in certain industries

with a large print volume. (Maintenance services)

• Although the unit price of maintenance fees continued to decline, sales remained the same as

those of a year earlier, with the print volume remaining firm. (Production printing)

• Sales of production printing increased year on year due to the strong performance of shipments of

color on-demand printers for professional use and continuous feed printers. (Network cameras)

• Sales increased year on year due to orders for large-scale projects received.
• We delivered the integrated monitoring solution, which combines a camera and the software of

Milestone, to the theme park "LEGOLAND Japan" that opened in April. (Canon Systems & Support) Both sales and income increased, reflecting the continued steady performance of the IT Solutions business such as security products. (Canon production printing systems)

• Sales increased due to increased shipments of the Oce monochrome continuous feed printer.
• On the other hand, operating income decreased, resulting in a deficit, because of a decrease in the

maintenance services for the former models of continuous feed printers and downward revaluation

• f parts, among other reasons, upon switching to the Oce continuous feed printer, which led to a

temporary decline in the level of the gross margin.

• The maintenance services for the continuous feed printers shipped during the first quarter will

gradually contribute to sales in and after the second quarter.

• On the third day of this month, the Company established the "Commercial Printing Lab Inc."

together with ISHIDA TAISEISHA, Inc. The Canon Group positions production printing as its growth field under the Three-Year Management Plan. Through this joint venture, we will create a new market in the printing industry, such as the printing and content production businesses utilizing inkjet-type high-speed continuous feed printers for professional use.

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(SI services business)

• Sales increased year on year due to the strong performance of projects for the financial industry,

etc. (IT infrastructure & services business)

• Sales declined year on year in reaction to large infrastructure projects in the same period of the

previous fiscal year. (Embedded business)

• Sales declined year on year following a decrease in projects for major customers in manufacturing.

(Products business)

• Sales of the products business remained the same due to a decrease in sales in the engineering

solutions business including CAD, despite strong sales of security products, etc. [Orders and order backlog]

• Both orders and order backlog declined due to a decrease of those in the embedded business, etc.

despite an increase in SI services for the financial industry, etc.

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Sales other than the IT solutions segment increased due to increases in the security business and commercial data collection terminals, etc. in the Business Solutions segment. Sales of "IT Security" included in overall IT solutions increased year on year due to strong sales of the antivirus software "ESET."

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(Digital interchangeable lens cameras)

• The unit sales of digital interchangeable lens cameras sold decreased year on year due to a

decrease in the volume shipped during the current fiscal period when new products were not released as compared to the same period of the previous fiscal year when the "EOS 80D" was released and a temporary decline in the level of store stocks just before the launch of a new product in April, among other reasons. (Compact digital cameras)

• The unit sales of compact digital cameras sold increased year on year due to the recovery of

product supply upon the elimination of the impact of the Kumamoto Earthquake. (Inkjet printers)

• Sales of business inkjet printers were strong with an increase in the volume sold from a year

earlier.

• Sales of inkjet cartridges decreased year on year because of the declining print volume.

(Commercial imaging equipment)

• Sales of commercial imaging equipment fell year on year due to a decrease in projects for

broadcasting stations, among other reasons.

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(Industrial segment)

• The Company received steady orders in the Industrial segment due to active capital expenditure in

the market of semiconductor products and services. However, both sales and income declined, reflecting a difference in the timing of delivery inspections of some products from a year ago. (Medical segment)

• Both sales and income decreased in the Medical segment in reaction to large-scale projects in the

same quarter of the previous fiscal year.

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Projections of annual business performance by segment [Business Solutions]

• MFP will increase the share of the highly competitive third-generation iR-ADV, especially among

the middle-ranked customer group.

• The production printing business will focus on increasing sales of MS500 and the Oce monochrome

continuous feed printer, and will also expand sales of cut paper printer. Recently, a facility to enable customers to experience the commercial printing system, Customer Experience Center Tokyo, was opened in the premises of the head office of Canon Inc. The facilities provide an opportunity for customers to directly experience a series of workflows, including after- processing such as bookbinding, in addition to a wide range of commercial printers of the Canon Group, including the products of Oce. We will utilize these new facilities to grow the production printing business. The network camera business will further strengthen the partnership with AXIS and Milestone and push forward with the development of needs for monitoring among corporations and the approach to the financial and other industries that require advanced image management to achieve substantial growth beyond that of the previous year. [IT Solutions]

• The SI service business expects to receive increased orders for new projects in the financial

industry, as well as solutions for demand forecasts aimed at the manufacturing and distribution service industries and solutions for educational institutions. In addition, the IT infrastructure service expects to receive continuous orders for large-scale data center projects that will exceed the plan.

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[Imaging System]

• For Digital Interchangeable Lens Cameras (DILCs), during the current year the market expects to

maintain the quantity sold in the previous year.

• For DILCs, during the current year the Company expects to maintain the quantity sold in the

previous year by focusing on increased sales of new products released this month.

• The volume of compact cameras sold is expected to increase as the impact of last year’s

Kumamoto Earthquake subsides.

• As for inkjet printers, the Company will ensure sufficient profitability by increasing the ratio of

printers with high unit prices, while the market continues to shrink. [Industrial/Medical] The Industrial segment should see an increase in sales and profits of products and services in the semiconductor market, reflecting solid sales of products and services. The Medical segment will make efforts to grow sales and profits of new digital radiography products scheduled to be released in July and non-mydriatic fundus cameras and the medical IT field, among

• thers.

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