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・Sales in Business Solutions rose, while sales of compact cameras and inkjet cartridges in

Imaging System declined.

・Sales of the embedded software business and IT products in IT Solutions fell. As a result,

net sales remained roughly flat from a year ago.

・Operating income rose ¥900 million, reflecting the rise in sales in Business Solutions and Company-wide cost cutting.

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(Office MFP)・The new product launched in June performed well on the back of large projects, and the

number of units in operation in the market increased steadily.・Unit sales of office MFPs, however, declined year on year, reflecting large-scale rental

projects at major companies in the same period of the previous fiscal year.

(Page printers)・Unit sales in certain industries such as medical and distribution increased.・Unit sales to general offices decreased, and total unit sales declined year on year.・Sales of toner cartridges increased year on year as a result of the continued expansion of

shipments in certain industries with a large print volume.

(Maintenance services)・Although the unit price of maintenance fees continued to decline, sales rose slightly from a

year earlier, with the print volume remaining firm mainly due to an increase in the number of business instruments in operation in the market.

(Production printing)・Sales rose year on year mainly due to the posting of sales of new continuous feed printers,

which are handled by Canon Production Printing Systems, a Group company, from 4Q after a delay in their shipment.

(Network cameras)・Sales increased year on year, driven by lot projects for monitoring systems for lines at

plants, theme parks, sports facilities, etc.

(Canon Systems & Support)・Net sales increased 2% year on year, to 30.1 billion yen, reflecting the continued steady

performance of the IT Solutions business such as security products and IT maintenance services.

・Operating income rose 0.3 billion yen year on year, to 1.2 billion yen due to the increase in net sales.

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(SI services business)・Sales increased year on year, due to the strong performance of projects for the financial

and manufacturing industries.

(IT infrastructure & services business)・Although data center services performed well, sales declined year on year in reaction to

large infrastructure projects in the same period of the previous fiscal year.

(Embedded business)・Although sales in the auto industry increased, overall sales declined year on year following

a decrease in projects for certain customers in manufacturing.

(Products business)・Sales fell year on year due to a decrease in sales of IT hardware products, although sales

of a leading security product remained strong.

(Canon IT Solutions Inc.)・Sales dropped 6% year on year to 26 billion yen, and operating income declined by 0.3

billion yen, to 1.7 billion yen.

[Orders and order backlog]・Both orders and order backlog declined in reaction to a large project in the same period of

the previous fiscal year.

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・This shows the overall sales for IT Solutions.

・Sales other than the IT Solutions segment in 4Q climbed 1.0 billion yen, reflecting increases

in the security business and commercial data collection terminals, etc. in the Business

Solutions segment.

・In IT Security, which is included in the overall sales of IT Solutions, sales of ESET, antivirus

software, FortiGate, firewall equipment, and GUARDIAN, an email security service,

increased steadily throughout the year.

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(Interchangeable lens digital cameras)・The unit sales of interchangeable lens digital cameras decreased year on year because of

sluggishness in the market although the Company work to expand sales, especially sales of new products.

(Compact digital cameras)・Unit sales of compact digital cameras declined year on year due to a delay in recovery from

the impact of the Kumamoto Earthquakes on the Company, in addition to a weak demand.

(Inkjet printers)・Although the Company worked to expand sales, especially sales of new products launched

in September, in 4Q, the peak demand season, unit sales fell year on year due to a continued decline in the market. However, the value of sales increased year on year as high-unit-price products accounted for a greater percentage of unit sales on the back of launches of competitive products.・Sales of cartridges also declined year on year partly due to the decrease in unit sales of

inkjet printers.

(Commercial imaging equipment)・Sales decreased year on year because sales of leading products, such as commercial video

cameras and TV lenses, were weak.

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(Industrial equipment)・Sales declined year on year due to postponements of certain semiconductor manufacturing

equipment projects into 2017, but operating income improved mainly given the reduction of selling, general and administrative expenses.

(Medical-related)・Sales declined year on year due to the revision of handling for certain low-profit products,

and income decreased mainly due to the effect of the one-time amortization of the goodwill

of a Group company.

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・Before describing full-year projections by segment, I’d like to describe the effect of changes in the business classifications of Group companies.

・To expand growth areas, the Group reclassified and consolidated its resources on a large scale in January 2017.

・Canon BizAttenda Inc., which engages mainly in the outsourcing business, and A&A Co., Ltd., which deals in 3D CAD software, have been transferred from the IT Solutions segment to the Business Solutions segment. Canon ITS Medical Inc., which engages in the medical business, has been transferred from IT Solutions to Industrial / Medical.

・Net sales and income in IT Solutions appear to decline due to the transfers, but overall sales of IT solutions do not fall.

・FY 2017 projections are compared with the FY 2016 actual results that reflect the effects of the transfers.

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Projections by segment are as described on the slides.

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Projections by segment are as described on the slides.

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