Bleak Fiscal Year for Ricoh, with Profits, Sales Sliding

Ricoh Company of Tokyo, Japan, reported results for its fiscal year that ran from April 1, 2016 to March 31, 2017,  with net sales declining by 8.2 percent to ¥2,028.8 billion, and profits declining 94.5 percent to ¥3.4 billion, both versus the previous fiscal year.

Ricoh says sales would have decreased by 1.8 percent as compared to the previous fiscal year if the effects of foreign-currency exchange-rate fluctuations are excluded.

Overall, sales for Ricoh’s Imaging and Solutions segment declined, but sales for Ricoh’s Industrial Products segment and the Other segment increased.

Within Ricoh’s Imaging and Solutions segment, sales in the Americas decreased by 12.2 percent; sales in Europe, the Middle East, and Africa declined by 14.0 percent; and sales in Other region, which includes China, South East Asia, and Oceania, declined by 12.1 percent. As a result, sales for the Imaging and Solutions segment in Ricoh’s overseas market declined by 12.9 percent when compared to the previous fiscal year.

Overall. operating profit for Ricoh Company declined by 66.9 percent, when compared to the previous fiscal year, to ¥33.8 billion.

Imaging and Solutions Group

Sales in the Imaging and Solutions group, which consists of Ricoh’s the Office Imaging, Production Printing, and Network System Solutions groups, declined by 9.2 percent as compared to the previous fiscal year, to ¥1,792.0 billion.

Office Imaging: Sales in this category decreased by 11.0 percent as compared to the previous fiscal year to ¥1,274.8 billion. Sales in Ricoh’s Other region increased, but was offset by the impact of the strengthening of the yen and decrease in sales in the Americas and in Europe, the Middle East, and Africa.

Production Printing: Sales in this category decreased by 7.9 percent, as compared to the previous fiscal year, to ¥206.2 billion. Sales of color cut-sheet printers increased in the  domestic (Japan) market and related parts and supplies and services that increased in both domestic and overseas, but were offset by the impact of the strengthening of the yen and the decrease in sales volume in Europe, the Middle East, and Africa.

In the Americas, sales for Ricoh Office Imaging group declined, mainly, Ricoh says, to strengthening of the Japanese yen versus the U.S. dollar. As a result, overall sales in Americas decreased by 12.2 percent when compared to the previous fiscal year to ¥609.0 billion. Ricoh says that sales in the Americas would have declined by 2.7 percent when the effects of foreign currency fluctuations are excluded.

Network System Solutions Group

Sales for this Ricoh group decreased by 2.4 percent, as compared to the previous fiscal period, to ¥310.9 billion. In the domestic (Japan) market, sales of IT products increased. In the overseas market, sales of IT services increased in the Americas and Europe, the Middle East, and Africa, but were offset by the sales decrease in Ricoh’s Other region such as India.

Forecast

For its current fiscal year that will end on March 31, 2018, Ricoh is forecasting that sales will be down 1.4 percent,  while profits will be down 14 percent, both versus its fiscal year that just ended.

Structural Reforms

Ricoh says it will continue to pursue its “RICOH Resurgent’’ 19th Mid-Term Management Plan which it launched in April 2017. It says this strategy switches its focus to an expansion of market share and deployed copier/MFPs in the field “to reinforce profitability of products and service in the office domain as a top priority.” At the same time, it says it will invest to accelerate business growth. It also says that it will implement cost-related structural reforms, operation-process reforms, and determine business growth “under the significant change of management environment.”

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