Financial Strategy

The five years we spent executing the "Long-Term Management Objectives (2021-2025)" delivered results that gave us a strong sense of achievement on the performance front. We achieved increases in sales and profits for five consecutive fiscal periods, setting new record highs in everything from operating income to net income. We see this as the result of our business structure transformation working in concert with the financial strategy supporting it.
​Our strong performance has been driven primarily by the IT solutions business. It accounted for 37% of total net sales in 2020, and this figure rose to over 50% in 2025. The business achieved the Long-Term Management Objectives sales target of ¥300.0 billion through organic growth alone and, through the implementation of financial strategies such as M&A and investments, grew to a scale of ¥343.4 billion. This reflects not merely sales growth, but a fundamental and large shift in the Group's revenue structure. Growth in recurring services — particularly maintenance and operation services, and outsourcing — contributed significantly to the improvement in profitability. The execution of the Group's M&A and investments also contributed to this outcome. At the same time, our Canon products business continues to generate stable revenue and remains a vital source of revenue for the Group. The emergence of a clear structural outline — with the Canon products business providing the revenue foundation and the high-margin recurring business within our IT solutions business growing on top of it — is one of the most significant achievements of the past five years.

On the financial strategy front, we have steadily executed a wide range of initiatives over the past five years. On growth investment, we publicly committed to deploying approximately ¥200 billion in growth investment over five years. Actual spending across business investment, investments in human resources, and system investments totaled ¥172.6 billion. Business investment breaks down as follows: three M&A transactions, 17 small-scale investments accompanied by capital and business alliances, and 14 startup investments through our corporate venture capital (CVC).
​We believe it was important that we structured these investments with a clear awareness of time horizons. First, we position M&A as a means of expanding our top line over a relatively short time horizon. We expand our business scale through acquisitions, absorb the resulting amortization of goodwill and other related items, and grow revenue through the creation of synergies. Second, small-scale investments accompanied by capital and business alliances are similarly short-term in focus, aimed at strengthening our existing businesses through means such as expanding our product offerings and talent base. Third, our CVC investments are a long-term initiative aimed at sustainable growth over a 10- to 20-year horizon. By investing across three time horizons in a balanced manner, we believe we have been able to build a solid track record in our current business while simultaneously planting the seeds for future growth.

Under our "Long-Term Management Objectives (2021-2025)," improving capital efficiency has been as important a theme as pursuing growth investment. An initiative symbolizing this was the acquisition of treasury stock held by the parent company in 2024. At the time, the parent company's voting rights ratio had risen to approximately 58%, while the ratio of outstanding shares had fallen to approximately 37%. We also recognized that the growing balance of short-term loans receivable to the parent company required greater transaction transparency, given the parent-subsidiary listing relationship. Beyond these issues, making better use of our ample cash and optimizing our equity base to improve ROE were also important priorities.
Against this backdrop, we proposed acquiring our shares held by the parent company. We executed a tender offer for approximately 20 million of treasury stock at a scale of around ¥81.9 billion^*, then promptly cancelled the shares acquired. This series of transactions improved the ratio of outstanding shares from approximately 37% to 45%, and reduced the parent company's voting rights ratio to approximately 51%. Short-term loans receivable to our parent company, which had reached as much as ¥180.0 billion at their peak, were also fully eliminated through our acquisition of treasury stock and M&A activity. Furthermore, we raised our ROE from the 6% range before the start of our Long- Term Management Objectives to above 10% in 2025. This acquisition of treasury stock was an exceptionally important decision in that it resolved multiple capital policy challenges at once, and it stands as one of the initiatives I pursued most tenaciously over the past five years.

We also worked actively to reduce our cross-shareholdings. At the end of 2021, we held cross-shareholdings in 35 listed companies. By the end of 2025, we had reduced that number to nine.
​Throughout this process, we proposed, where appropriate, that counterparties sell their holdings of our shares back to us as treasury stock rather than disposing of them in the market. Acquisition of treasury stock arising from these efforts totaled approximately ¥5.0 billion over this period. We also carried out ¥10.0 billion in acquisition of treasury stock between October and December 2025, and announced a further ¥30.0 billion acquisition of treasury stock in January 2026. We view these measures not merely as shareholder returns, but as initiatives to improve capital efficiency and drive ROE higher.
​Over the past five years, our share price has roughly tripled, reaching an all-time high since listing. We believe the market has recognized our progress to some degree, but personally, I see room for further upside. That is precisely why we are signaling to the market through acquisition of treasury stock and similar measures that our shares remain undervalued.
​Our shares had been trading at an investment unit above ¥500,000, so in April 2026 we executed a 2-for-1 share split in order to lower the investment unit, make our shares more accessible to investors, and improve liquidity by increasing the number of shares outstanding.
​We are often perceived as simply a trading company that handles Canon products, but our business is more than that. While Canon products remain our core, we combine them with IT solutions as added value, and our business domain has expanded significantly. On top of that, what sets our solutions apart from those of large system integrators is that we deliver them in close partnership with our customers. Communicating this reality more accurately is an important priority for our IR efforts going forward. A deeper understanding of the Group among investors could, we believe, lower our cost of capital, with room for our share price to be recognized further.

Investments in human resources are also important to support our growth strategy. To develop our skilled personnel, we are running a certification system for highly skilled IT personnel and a selective training program for candidates who are expected to take on future leadership roles, but my own focus is on developing "investment strategy personnel." We need skilled personnel who can envision the future of our businesses, identify the missing pieces needed to realize that vision, determine where to invest, and carry decisions through to execution. Deploying the ¥200.0 billion in growth investment is not in itself the goal. We want to place many such skilled personnel across each of our businesses ̶ people who can link business strategy to investment decisions, thinking along the lines of "this is the business we want to build in the future, this is the domain we are missing, so this is where we should invest."
​We believe that developing skilled personnel with that instinct and judgment - through hands-on M&A and post-merger integration (PMI) work, engagement with startups through CVC, and open innovation activities - is the foundation that will support the Group's sustainable growth.

The greatest strength of the Group's financial base lies in stable cash generation. Our strong financial position gives us ample resources to support flexible acquisition of treasury stock and growth investment. At the same time, our challenges are clear. The Canon products business is not a business that grows steadily upward without interruption. We therefore believe we need to expand the recurring business in the IT solutions area, including maintenance, operations, and outsourcing, so that both our "Canon stock" and "IT stock" engines support the Company. In the Canon products business as well, rather than forcing top-line growth, it is important to improve profitability through productivity gains and cross-selling. This will also lead to higher ROE.
​Our basic approach to the balance sheet is to convert cash we earn into revenue-generating business assets, rather than simply holding it. We want to build a balance sheet where the seeds of future revenue and profit accumulate steadily ̶ not as cash in current assets, but as non-current assets, intangible assets, and where appropriate, goodwill. We currently operate debt-free, but we would not rule out using debt financing if a significant growth opportunity arose and our available cash alone could not fully fund it. We will not hesitate to act when doing so is necessary to avoid missing an opportunity.

What I prioritize above all else is building a framework for the Group's sustained growth. Over the past five years, we have made meaningful progress in strengthening our earnings power, executing our financial strategy, and enhancing corporate value. We see the next five years as a period of preparation for an even greater leap forward beyond that. We need to build a foundation that allows the Group to keep evolving 10 and 20 years from now. That means advancing growth investment to develop our businesses, and developing investment strategy personnel capable of thinking through and executing that work independently. We will direct the cash we have accumulated into growth investment, generate new cash from those investments, and sustain that cycle going forward. I see it as my responsibility to make this virtuous cycle a reality.