Management Briefing June 19 th, 2015 Zenji Miura President and CEO Ricoh Company, Ltd.
Agenda Ricoh Group s Business Conditions Vision 2020 and Beyond Returns and Benefit Plans to Shareholders 1
Ricoh Group s Business Conditions 2
Reviewing FY2014: 1) Core Businesses Developed countries: Sales expansion in developed countries took a break and is in a temporary lull Internal factors: Delays in new product release in FY2013 started to affect sales and profit in annuity business negatively External factors: - Windows XP replacement demand ended - Strikes at West Coast ports in the US that resulted in delivery slowdowns Emerging markets: Sales and profit of machines and annuity business increased 3
Reviewing FY2014: 1) Core Businesses Generally the business conditions of the core businesses indicate stability or recovery 20% 1,000,000 19% 18% Ricoh recaptured the top world share in A3 MFP unit sales in CY2014 -> The number of sold units rose to 19.1% in CY2015 Q1 19.9% Ranked 2 nd in CY2013 17.5% Annualized 17.9% Recaptured the top position in CY2014 Annualized 18.2% 18.7% 17.9% 18.5% 17.9% 19.1% CY2015 Total market unit demand Q1: Jan - Mar Q2: Apr - Jun Q3: Jul - Sep Q4: Oct - Dec 500,000 17% 17.0% 17.0% 16% 15% 0 13_Q1 13_Q2 13_Q3 13_Q4 14_Q1 14_Q2 14_Q3 14_Q4 15_Q1 15_Q2 15_Q3 15_Q4 Source: Ricoh data 4
Reviewing FY2014: 2) Growth/New Businesses Net sales and profits in growth and new businesses are robust by and large Production Printing Further reinforced product lineups that can satisfy customers demanding requests Industrial Products In October 2014 Ricoh Industrial Solutions Inc. started operation In October 2014 Ricoh Electronic Devices Company, Ltd. started operation 5
16 14 12 10 World Economic Forecast for 2015 and Onward IMF s forecast for world economic growth rates (April 2015) % China Emerging markets 8 ASEAN-5 World average 6 China Japan US ASEAN-5 Emerging markets EU World average Lehman Brothers collapse Forecast Great East Japan Earthquake Source: IMF World Economic Outlook April 2015 4 2 0-2 -4-6 Europe US Japan Japan s consumption tax increase from 5% to 8% -8 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 6
Ricoh s Commitment in FY2015 In the wake of the collapse of Lehman Brothers in 2008, the world economy failed to present a clear path Create new businesses that are specific to Ricoh embedded with an innovation DNA as its corporate culture Now is the time to gather Ricoh Group s collective strengths to start challenges to change the course 7
History of Change the Course Ricoh s financial results and three turning points Net sales 2,400 2,200 2,000 1,800 (Bn yen) Operating income 200 Net sales Operating income Change the course 2 Analog -> digital + globalization Operating loss for FY2011 3 1,600 1,400 1,200 1,000 800 600 400 200 0 100 Change the course 1 Photosensitive paper -> OA equipment No dividends in March 1965 1 FY1991 financial results deteriorated 2-200 1936 1938 1940 1942 1944 1946 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 8
Net sales 2,400 2,200 2,000 Challenges to Change the Course Ricoh s innovation DNA and new challenges (Bn yen) Ricoh has had innovations in the past To jump drastically, commit to challenges in new areas Now is the time to change the course Products + services & new businesses 1,800 1,600 1,400 1,200 1,000 800 600 400 200 Analog Copier MFP Digitalization Colorization Networking 0 (200) 1936 1938 1940 1942 1944 1946 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 9
Vision 2020 and Beyond 10
Vision 2020 and Beyond An environmentally friendly company that makes customers feel confident, comfortable, and convenient while exceeding their expectations and to support lifestyle transformation Future Ricoh The RICOH Way RICOH Brand Benefits RICOH Quality Ricoh s strength 2 Technological strength Ricoh s strength 1 Customer contact capability 11
Ricoh s Direction for 2020 and the Future Beyond Commercial printing Office IT services Consumer Document Communication Industrial Public Infrastructure Confident, comfortable, convenient New technology acquisition New technology acquisition Technological strength Customer contact capability 12
Office Developing Products + Services in Core Businesses Customers communication and work style have been changing One-stop solutions based on products + services is provided for customers Office Anytime, anywhere Products + services Mobile office Interactive Whiteboard IT services TV/web meeting system Outsourcing Product Home office Tablets Projector Product Product Products + services Maintenance/service Product Products + services MDS Products + services Next Generation Managed-Cloud Services On the move Product Characters, images, voices, etc. MFP Printer Product Product Paper Product Customers workplace Satellite office 13
Sales trends (image) Office Commercial printing Production Printing Business Further expand production printing business Accelerate business expansion in the commercial printing market by releasing strategic products Secure competitive advantages through high valueadded printing Enable hybrid operation of offset printing (*1) and digital printing (*2) *1 Offset printing: Mass printing at a time using print data plates *2 Digital printing: On-demand printing of multiple small-lot materials in a short period of time 191.9 billion yen etc. Commercial printing (Printing by companies in the printing industry) Inplant printing (Mass printing within enterprises) FY2007 FY2014 FY2020 14
Commercial printing Industrial Inkjet Business Future development of the inkjet business Pivoting on the proprietary inkjet head technology, proactively enter into markets other than Office or Commercial Printing Possible business areas Document, etc. Email Sales promotion materials, etc. Brochure Label, package Foods, beverages, retails Other: 3D model, etc. Aerospace parts Mobile mockup Material Catalog Textile, etc. Decoration, etc. Apparels Wallpapers Office Commercial printing Industrial 15
Industrial Industrial Business Expand in-vehicle, security, FA, and other industrial businesses In-vehicle Security FA (Factory automation) 16
Consumer Cameras Combining PENTAX technology and Ricoh technology has resulted in new values New New New 17
Consumer A Spherical Camera RICOH THETA RICOH THETA provides its proprietary new visual experiences Released in November 2014, the next-generation RICOH THETA m15 is for movie filming as well as conventional still image shooting 18
Public/Infrastructure Urban Development Contributing to creating urban areas that are confident, comfortable, and convenient by capitalizing on Ricoh s technology and customer contact capability developed through core businesses Participating in urban development in Ebina, Kanagawa Prefecture, and Katsuragi, Nara Prefecture Infrastructure development solutions conscious of safety and environment (security systems, LED streetlights, energy management, etc.) Digital signage information services to provide comfort and convenience Create systems to maintain/manage infrastructure and to continuously achieve development/growth of a city A development blueprint of the west part of Ebina station *This image represents a current design and may be different from the final design. A façade of RICOH Future House 19
Ricoh Celebrates its 80 th Anniversary on February 6 th, 2016 Founded Camera business developed MFP business developed greatly OA business started and expanded Globally expanded through digitization Establishing a global brand Riken Kankoshi Co., Ltd. founded on February 6, 1936 In 1938 the company name was changed to Riken Optical Co., Ltd. In 1963 the company name was changed to Ricoh Company, Ltd. Production printing Founder Kiyoshi Ichimura High-speed MFP Pro C901 1975 Deming award Imagio MP1350 Digital MFP Color MFP C751EX/C651EX IWB FAX Imagio MP C3000SP 1955 RICOPY 101 1973 RIFAX 600S Thermal paper FAX Copier Scanner Color copier PJS UCS Electronic copier Printer Silver salt camera Thermal paper Diazo copier 1965 RICOPY BS-1 1950 Ricoh Flex III 1975 DT1200 Thermal media Software Semiconductor Imagio MF200 CD-R/RW, CD-R/RW, DVD+RW/R DVD+RW/R Digital camera GJ printer Internet services MDS IT services THETA 36 40 50 60 70 80 90 2000 10 20 20
Toward Ricoh s Centennial Anniversary, Creating a Future with Shareholders Vision 2020 and Beyond 18 th Mid-Term Management Plan (MTP) 19 th MTP 20 th MTP 21 th MTP 22 23 24 25 2014 2015 2016 80 th anniversary 2017 2018 2019 2020 2021 2022 Tokyo Olympics Paralympics 2023 2024 2025 2036 100 th anniversary Vision 2020 and Beyond 18 th Mid-Term Management Plan 21
Returns and Benefit Plans to Shareholders 22
Returns to Shareholders Increased dividends for FY2015 are scheduled (a dividend payout ratio of 31%) [Full-year dividends trends] 33 33 33 25 29 Yen/share 33 34 35 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 (Forecast) Mid-term policy for returns to shareholders: a total return ratio of 30% is a yardstick 23
Benefit Plans to Shareholders Ricoh s special benefit plans to shareholders will continue Presenting a calendar (shareholders having share units) Inviting shareholders to events (selected by lottery) Camera seminar Touring Ichimura Shizenjuku Tickets for Top League Rugby games Tickets for Ricoh Philharmonic Orchestra concerts Specially reduced prices for Cameras (all shareholders) 24
To Achieve Sustainable Improvement of Corporate Value Ricoh Group strives to improve corporate value Reinforcement and growth of businesses Reinforce and develop earnings power for core businesses Expand profits Achieve growth by creating new profit generators Improve asset efficiency Improve ROE Improve corporate value Appropriate capital policy Autonomous corporate governance 25