Message from the President

Leveraging Our Strengths to Broaden Solutions to Social Issues and Achieve Steady Growth

It has now been four years since I assumed the role of President. In 2024, my fourth year in the role, we achieved our fourth consecutive fiscal year of revenue and profit growth, setting new record highs in operating income, ordinary income, and net income attributable to owners of the parent. As a result, we achieved all of the initial targets set in our Long-Term Management Objectives (2021-2025), established in 2021, ahead of schedule. Furthermore, we focused on capital efficiency while expanding operating revenue, which led to an ROE of 9.6% in 2024, bringing us closer to the 10% range. One example of our initiatives was a tender offer of approximately 20 million shares of treasury stock.
The year 2025 marks the final year of both our Long-Term Management Objectives (2021-2025) and our Medium-Term Management Plan (2022-2025), and we are planning for a fifth consecutive fiscal year of revenue and profit growth. We have revised our IT solutions business net sales target upward by ¥40.0 billion, aiming for ¥340.0 billion. As a result, the business is expected to account for 50% of total net sales. In the Canon products business, we will continue to improve profitability by offering high-value-added proposals to our customers. Looking back over the past four years, I feel confident that we have steadily advanced the two key pillars: Expansion of the ITS Business with Profit and Increase in Earnings Capacity of Existing Businesses.

The sources of our competitive advantage, which drives the continued growth of our Group, are our extensive customer base, our superior technologies that underpin our solutions, and the people that make all this possible.
Our customer base spans a wide range, from large corporations to quasi-major and upper medium-sized enterprises, small and medium-sized enterprises, as well as individual customers. In Japan, I expect there are no companies that can match us in both the breadth and depth of this base. This breadth and depth were not built in a matter of years. Since our founding in 1968, we have passed down, cultivated, and refined our unique expertise and methods over decades, from one generation to the next. It is precisely because we understand our customers’ business better than they do themselves, and perceive even the issues faced by their own customers, that we are able to identify latent challenges they have yet to recognize and offer effective solutions. These long-standing efforts have formed the foundation of the strong trust we enjoy with our customers today. Another hallmark of our strength lies in the close relationships we maintain with top management at customer companies, which speaks to the strength of our customer base. Having spent around 40 years in sales, I personally conducted over 100 business meetings annually with customers, including with executives, during my time as a business manager. Presenting to executives is one of many important traditions passed down from my predecessors and I have passed them down to my successors in turn.
In terms of our solutions that leverage our superior technologies, while there are some other companies also offering IT solutions alongside their proprietary document equipment, what sets our Group apart is our focus not only on document solutions, but also on core systems. As a systems integrator, we handle large-scale development projects comparable in size to those undertaken by major integrators. What gives us a distinct edge is the synergy between Canon’s input/output devices and our systems. One example is our image processing AI collaboration platform, Bind Vision. This proprietary solution uses our own image analysis technology and images photographed by Canon cameras to detect smoke and measure water levels via AI, enabling rapid identification of anomalies. It is a prime example of how our Group's technologies can be combined with Canon products. Through solutions such as these, we are supporting regional disaster prevention and mitigation efforts, thereby contributing to the realization of a safer and more secure society.
To continue creating solutions that harness our customer base and technologies, and to nurture the people who refine them, we deliver specialized training programs that are continuously adapted to meet our customers’ diversifying needs. Since the 1980s, when we began increasing our use of other companies’ IT devices and software in line with the changes and expansion of our business domains, we have been continuously engaged in employee reskilling. Our Group has been involved in IT products and IT solutions for over 40 years, during which time the pace of technological advancement has only accelerated. In order to acquire cutting-edge technologies ahead of societal trends and deliver high-quality proposals that help resolve customer and social issues, we are actively investing not only in internal personnel development, but also in recruiting external personnel through means such as M&A and equity investment. What truly matters, however, is having a culture that genuinely embraces people from diverse backgrounds who join our Group. We take pride in this as one of our greatest strengths.

Building on the strengths of our Group, and with a strong sense of responsibility toward future generations, the planet, and the world ahead, we unveiled our Group Purpose in January 2024 under Canon’s corporate philosophy of Kyosei: “Bringing together hopes and ideas with technologies to create a future beyond imagining.” This Purpose was the product of nearly two years of frank and repeated discussions among our officers. Out of more than a hundred candidates, we crafted the final statement with careful attention to each word. Since 2023, even prior to the official announcement, I have been traveling to Group companies across Japan to speak directly with employees in a dialogue series called “Miraibi (‘Future Light’) Talks,” where I share the intent behind the Purpose in my own words. After the COVID-19 pandemic, which made face-to-face communication difficult, it has been deeply meaningful to finally reconnect with employees in person across the country. These exchanges have reinforced my belief in the importance of uniting the aspirations of approximately 18,000 diverse Group employees while further advancing co-creation and collaboration with stakeholders to accelerate the resolution of social issues. Gradually, initiatives embodying our Purpose are emerging and spreading throughout the entire Group.

With the announcement of our Purpose, we established a dedicated organization for R&B (Research & Business Development) to drive the creation of new businesses. Today’s social issues are becoming increasingly complex and severe, marked by significant uncertainty. To create new value, we are promoting open innovation in collaboration with like-minded startups, academic institutions, and government organizations in Japan and overseas, regardless of language or nationality. In 2024, through our corporate venture capital arm, the Canon Marketing Japan MIRAI Fund, we made nine investments. Some of these investments may appear unrelated to our current business domains, but we look forward to unveiling them as new businesses in the near future.
In our IT Solutions business, we have defined four priority domains^* and are accelerating our shift to a service-based business model with the aim of achieving profitable business growth. In particular, we are welcoming into our Group companies operating in the domains that we aim to grow and distinctive companies that offer capabilities we wish to acquire, with a focus on Edge solutions, maintenance and operations services, and outsourcing. In 2023, Tokyo Nissan Computer System Co., Ltd. (now TCS, Inc.), a company with strengths in IT infrastructure design and construction, system maintenance and operations, and data centers, joined our Group through M&A. In 2024, we added Primagest, Inc., known for its strength in BPO services utilizing DX.
By leveraging our Group’s strong customer base to deliver solutions from TCS and Primagest, and offering our Group’s own solutions to their customers in turn, we are steadily expanding our business scale by creating synergies that draw on the strengths of both sides. In M&A, not only is it crucial to conduct careful due diligence beforehand, but also to ensure smooth and swift post-merger integration. Since conducting our first M&A in 1978, we have continued to pursue M&As and have honed our capabilities in this area. One of the reasons we defined our Purpose lies here. Our Group has grown through the addition of many companies over the years and is characterized by its rich diversity. Moving forward, we will actively pursue M&As and investments to acquire technologies and functions that we wish to further strengthen. Our Purpose reflects our commitment to respecting diversity and turning it into corporate value. We have pledged to execute at least ¥200 billion in growth investments by 2025, and as of 2024, we have already executed approximately 70% of this amount. Looking ahead, we will continue to carefully assess the situation and focus on M&A and investments that can generate synergy with our Group.

We believe that our consistent performance growth attests to the effectiveness of our governance framework. Nevertheless, as a listed subsidiary under a listed parent company, we recognize the general risks associated with such structures, particularly the potential for conflicts of interest between parent and subsidiary companies. With this in mind, we are committed to demonstrating our sincere approach to governance and fulfilling our accountability, especially with respect to protecting the interests of minority shareholders. As part of these efforts, in January 2024 we established a Special Committee composed of three independent outside directors. The Special Committee met five times in 2024 to deliberate matters including confirmation of procurement from the parent company and the repurchase of treasury stock via a tender offer. In March 2025, we appointed an additional female outside director with expertise in finance and accounting, increasing the number of independent outside directors to comprise half of our Board of Directors. So far we have taken steps to strengthen governance, for instance, by appointing a female outside director in 2023 and increasing the proportion of independent outside directors on the Nomination and Remuneration Committee to a majority. We will continue enhancing and reinforcing our governance to drive further business growth.