Earnings Slump at Ricoh for Fourth Quarter and Full Fiscal Year

Ricoh billboardApril 29, 2015 – Ricoh Company of Japan reported results for its fiscal year ending March 31, 2015, with sales up 1.7 percent, but profit down 5.8 percent. For its fourth quarter ending March 31, 2015, the firm reported that sales were down 1.9 percent, and profit was down 44.9 percent to 16.2 billion yen.

Overview of Full Fiscal Year

Despite only a moderate recovery in the Japan economy, Ricoh says sales for its Industrial Products business increased, and sales of color MFPs “increased significantly” in Japan. However, sales for Ricoh’s Network System Solutions business “decreased significantly,” which it attributes to a rebound from a special demand for PCs at the end of previous corresponding period. As a result, Ricoh says sales in the overall Japan market decreased by 7.2 percent as compared to the previous corresponding period.

As for the overseas market, Ricoh says the U.S. economy continued to show solid recovery and the European economy showed signs of a rally, but the outlook of the overall global economy remains uncertain with the continuous decline in oil prices and the slowdown in the growth of emerging markets, including China. Even under such market conditions, however, Ricoh says that an increase in the sales of color MFPs, the acquisition of U.S.-based mindShift Technologies. and a weak Japanese yen contributed to an overall increase in Ricoh’s overseas sales.

Ricoh sales in the Americas increased by 10.1 percent (an increase of 0.5 percent when foreign-currency exchange fluctuations are taken into account), sales in Europe, Middle East and Africa increased by 2.6 percent (a decrease of 0.7 percent excluding foreign-currency exchange fluctuations), and sales in Ricoh’s Other region, which includes China, South East Asia and Oceania, increased by 15.7 percent (an increase of 8.8 percent, excluding foreign-currency exchange fluctuations).

As a result, Ricoh’s sales overseas market increased by 7.9 percent as compared to the previous corresponding period. Excluding effects of foreign-currency fluctuations, however, sales overseas would have increased by 1.2 percent as compared to the previous corresponding period.

Overview of Full Fiscal-Year Sales

Sales by Ricoh product line for Ricoh’s fiscal-year 2015 are as follows:

  • Imaging & Solutions sales were up 1.6 percent to ¥1,997.2 billion.Ricoh’s Imaging & Solutions business is made up of Office-Imaging, Production-Printing, and Network-System Solutions businesses. The breakdown for these groups is as follows:
    • Office-Imaging sales were up 2.2 percent to ¥1,509.7 billion. Ricoh attributes sales growth for this segment to the weakening of the Japanese yen and the increase in sales in both the domestic and overseas market for color MFPs introduced in the previous fiscal year.
    • Production Printing sales were up 6.6 percent to ¥191.9 billion sales.  Ricoh says this sales increase was achieved through the increase in sales of color cut-sheet production printers introduced during the previous fiscal year, along with the increase in sales of related parts and supplies and services in both the domestic and overseas market.
    • Network System Solutions sales were down 4.1 percent to ¥295.4 billion. Overall sales in this category decreased with the rebound from the special demand for PCs at the end of previous corresponding period in the Japan market. The acquisition of mindSHIFT Technologies in the United States. and the expansion in the Indian market contributed to sales in the overseas market.
  • Industrial Products sales were up 7.1 percent to ¥117.7 billion. Ricoh attributes an increase in sales for its Thermal business.
  • Sales for Ricoh’s Other group were down 3.2 percent to ¥116.9 billion. The firm attributes declining camera sales to lower sales for this group.

Ricoh’s Fiscal-Year Forecast

For its current fiscal year that will end March 31, 2016, Ricoh is forecasting net sales will be up 7.5 percent to 2.4 trillion yen, and profit will be up 21 percent to 83 billion yen, up 21 percent, both versus the previous fiscal year.

Despite only moderate economy recovery in Japan, developed economies, and emerging economies, Ricoh says it expects to “maintain sustainable growth from the increased sales-competitiveness and profitability achieved by the company’s renewed lineup of digital MFPs,” while creating “new profit generators” and through company-wide efforts to streamline costs. It says it plans to reinforce its office-imaging business, and “accelerate growth” in new businesses.

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