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Operating result under pressure from lower net revenue and higher operating expenses

Dietlikon, 27.04.2007 - Canon (Switzerland) Ltd reported an unchanged gross margin of 47.2 percent on a revenue of CHF 226.2 million, representing a minor year-on-year decline of 1.8 percent. Higher operating expenses arising from efforts to expand the project business sales organization and expenditure in connection with the introduction of new ERP software planned for 2007 put pressure on the operating result. A current market valuation resulted in an extraordinary adjustment of CHF 9.0 million on the real estate portfolio. Canon (Switzerland) Ltd posted a consolidated net annual loss of CHF –7.0 million after tax.

Canon Business Solutions (CBS) defended its market lead. However, owing to a downward trend in black-and-white multifunctional devices and delays in the launch of new products in the high-growth full-color A3 multifunctional product segment, CBS recorded a slight decline. Service activities proved to be a solid mainstay.

The Canon Consumer Imaging (CCI) business unit posted gratifying market growth thanks to the fast-growing digital SLR camera segment. CCI also succeeded in reinforcing its leadership of the digital camera market.

Outlook
Given the solid order backlog in both business units and assuming that developments on the company's markets remain encouraging, operating activities as well as earnings are set to stabilize in the 2007 business year.

The Annual General Meeting of Canon (Switzerland) Ltd will take place on 18 May 2007.

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