-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QnYQwXjtHW5X6nFfdoNYXG90ECFuG7WkEym1DX1RlgLIn6/qPWld5qhAKNCabDlU aAA2mn1KrVDKWSAwnOTMmQ== 0000317891-08-000010.txt : 20080424 0000317891-08-000010.hdr.sgml : 20080424 20080424061026 ACCESSION NUMBER: 0000317891-08-000010 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20080424 FILED AS OF DATE: 20080424 DATE AS OF CHANGE: 20080424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RICOH CO LTD CENTRAL INDEX KEY: 0000317891 STANDARD INDUSTRIAL CLASSIFICATION: PHOTOGRAPHIC EQUIPMENT & SUPPLIES [3861] IRS NUMBER: 000000000 STATE OF INCORPORATION: M0 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 002-68279 FILM NUMBER: 08773026 BUSINESS ADDRESS: STREET 1: 13-1, GINZA 8-CHOME STREET 2: CHUO-KU CITY: TOKYO 104-8222 JAPAN STATE: M0 ZIP: 00000 BUSINESS PHONE: 81-3-6278-5241 MAIL ADDRESS: STREET 1: 13-1, GINZA 8-CHOME STREET 2: CHUO-KU CITY: TOKYO 104-8222 JAPAN STATE: M0 ZIP: 00000 6-K 1 r6k080424.txt FLASH REPORT 3-31-2008 FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 REPORT OF FOREIGN PRIVATE ISSUER Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of April 2008 Commission File Number 2 - 68279 RICOH COMPANY, LTD. ----------------------------------------------- (Translation of Registrant's name into English) 13-1, Ginza 8-Chome, Chuo-ku, Tokyo 104-8222, Japan --------------------------------------------------- (Address of Principal Executive Offices) (Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.) Form 20-F X Form 40-F __ (Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): __ ) (Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): __ ) (Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.) Yes __ No X (If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-__ ) - -------------------------------------------------------------------------------- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Ricoh Company, Ltd. ------------------------------ (Registrant) By: /S/ Zenji Miura ------------------------------ Zenji Miura Director, Chief Financial Officer Corporate Executive Vice President April 24, 2008 - -------------------------------------------------------------------------------- RICOH April 24, 2008 FLASH REPORT Year ended March 31, 2008 (Results for the Period from April 1, 2007 to March 31, 2008) Three months ended March 31, 2008 (Results for the Period from January 1, 2008 to March 31, 2008) PERFORMANCE OUTLINE (CONSOLIDATED) (1) Year ended March 31, 2007, 2008 and Year ending March 31, 2009 (Forecast)
(Billions of yen) - -------------------------------------------------------------------------------------------------------------------------- Year ended Year ended Year ending March 31, 2007 March 31, 2008 March 31, 2009 (Results) (Results) Change (Forecast) Change - -------------------------------------------------------------------------------------------------------------------------- Domestic sales 1,002.2 1,016.0 1.4% 1,038.0 2.2% Overseas sales 1,066.6 1,203.9 12.9% 1,222.0 1.5% Net sales 2,068.9 2,219.9 7.3% 2,260.0 1.8% Gross profit 862.4 927.7 7.6% 932.0 0.5% Operating income 174.3 181.5 4.1% 180.0 -0.8% Income from continuing operations before income taxes 174.5 174.6 0.1% 176.0 0.8% Net income 111.7 106.4 -4.7% 108.0 1.4% - -------------------------------------------------------------------------------------------------------------------------- Exchange rate (Yen/US$) 117.02 114.40 -2.62 100.00 -14.40 Exchange rate (Yen/EURO) 150.08 161.69 11.61 160.00 -1.69 - -------------------------------------------------------------------------------------------------------------------------- Net income per share-basic (yen) 153.10 146.04 -7.06 148.15 2.11 Net income per share-diluted (yen) 151.89 142.15 -9.74 144.21 2.06 - -------------------------------------------------------------------------------------------------------------------------- Return on equity (%) 11.0 9.9 -1.1 -- -- Income from continuing operations before income taxes on total assets (%) 8.1 7.8 -0.3 -- -- Operating income on net sales (%) 8.4 8.2 -0.2 8.0 -0.2 - -------------------------------------------------------------------------------------------------------------------------- Total assets 2,243.4 2,214.3 -29.0 -- -- Shareholders' investment 1,070.9 1,080.1 9.2 -- -- Interest-bearing debt 415.6 384.3 -31.2 -- -- - -------------------------------------------------------------------------------------------------------------------------- Equity ratio (%) 47.7 48.8 1.1 -- -- - -------------------------------------------------------------------------------------------------------------------------- Shareholders' investment per share (yen) 1,467.03 1,498.29 31.26 -- -- - -------------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities 167.2 194.3 27.0 -- -- Cash flows from investing activities -115.4 -198.3 -82.9 -- -- Cash flows from financing activities 9.2 -72.1 -81.4 -- -- Cash and cash equivalents at end of period 255.7 170.6 -85.1 -- -- - -------------------------------------------------------------------------------------------------------------------------- Capital expenditures 85.8 85.2 -0.5 90.0 4.7 Depreciation for tangible fixed assets 72.4 72.7 0.3 75.0 2.2 R&D expenditures 114.9 126.0 11.0 130.0 3.9 - -------------------------------------------------------------------------------------------------------------------------- Number of employees (Japan) (thousand people) 40.3 40.4 0.1 -- -- Number of employees (Overseas) (thousand people) 41.6 43.1 1.5 -- -- - --------------------------------------------------------------------------------------------------------------------------
RICOH COMPANY, LTD. * Ricoh bases the forecast estimates for March 31, 2009 above upon information currently available to management, which involves risks and uncertainties that could cause actual results to differ materially from those projected. 1 (2) Three months ended March 31, 2007 and 2008
(Billions of yen) - -------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2007 March 31, 2008 Change - -------------------------------------------------------------------------------------------------- Domestic sales 272.9 266.9 -2.2% Overseas sales 303.3 312.6 3.1% Net sales 576.2 579.5 0.6% Gross profit 235.1 239.0 1.7% Operating income 52.5 47.4 -9.7% Income before income taxes 51.4 40.5 -21.1% Net income 28.4 21.1 -25.5% - -------------------------------------------------------------------------------------------------- Exchange rate (Yen/US$) 119.48 105.60 -13.88 Exchange rate (Yen/EURO) 156.52 158.06 1.54 - -------------------------------------------------------------------------------------------------- Net income per share-basic (yen) 38.92 29.20 -9.72 Net income per share-diluted (yen) 37.88 28.41 -9.47 - -------------------------------------------------------------------------------------------------- Return on equity (%) 2.7 2.0 -0.7 Income before income taxes on total assets (%) 2.3 1.8 -0.5 Operating income on net sales (%) 8.9 8.2 -0.7 - -------------------------------------------------------------------------------------------------- Capital expenditures 28.9 27.3 -1.6 Depreciation for tangible fixed assets 20.4 18.6 -1.7 R&D expenditures 30.5 32.4 1.8 - --------------------------------------------------------------------------------------------------
(3) Three months ended June 30, 2007 and Three months ending June 30, 2008 (Forecast)
(Billions of yen) - --------------------------------------------------------------------------------------------------- Three months ended Three months ending June 30, 2007 June 30, 2008 (Results) (Forecast) Change - --------------------------------------------------------------------------------------------------- Domestic sales 244.7 248.0 1.3% Overseas sales 285.3 288.0 0.9% Net sales 530.1 536.0 1.1% Gross profit 228.7 226.0 -1.2% Operating income 46.6 39.0 -16.3% Income before income taxes 53.2 37.7 -29.2% Net income 33.8 23.0 -32.1% - --------------------------------------------------------------------------------------------------- Exchange rate (Yen/US$) 120.77 100.00 -20.77 Exchange rate (Yen/EURO) 162.72 160.00 -2.72 - --------------------------------------------------------------------------------------------------- Capital expenditures 17.1 18.5 1.3 Depreciation for tangible fixed assets 16.8 16.0 -0.8 R&D expenditures 27.2 28.0 0.7 - ---------------------------------------------------------------------------------------------------
(4) Half year ended September 30, 2007 and Half year ending September 30, 2008 (Forecast)
(Billions of yen) - -------------------------------------------------------------------------------------------------- Half year ended Half year ending September 30, 2007 September 30, 2008 (Results) (Forecast) Change - -------------------------------------------------------------------------------------------------- Domestic sales 504.4 513.0 1.7% Overseas sales 583.9 587.0 0.5% Net sales 1,088.3 1,100.0 1.1% Gross profit 451.2 447.0 -0.9% Operating income 84.5 72.5 -14.3% Income before income taxes 85.0 70.3 -17.3% Net income 53.1 42.8 -19.5% - -------------------------------------------------------------------------------------------------- Exchange rate (Yen/US$) 119.37 100.00 -19.37 Exchange rate (Yen/EURO) 162.36 160.00 -2.36 - -------------------------------------------------------------------------------------------------- Capital expenditures 39.6 45.5 5.8 Depreciation for tangible fixed assets 35.6 34.0 -1.6 R&D expenditures 61.5 63.0 1.4 - --------------------------------------------------------------------------------------------------
2 RICOH COMPANY, LTD. AND CONSOLIDATED SUBSIDIARIES FLASH REPORT (CONSOLIDATED RESULTS FOR THE YEAR ENDED MARCH 31, 2008) 1. RESULTS FOR THE PERIOD FROM APRIL 1, 2007 TO MARCH 31, 2008 (1) Operating Results (Millions of yen) - -------------------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 - -------------------------------------------------------------------------------- Net sales 2,068,925 2,219,989 (% change from the previous fiscal year) 8.4 7.3 Operating income 174,380 181,506 (% change from the previous fiscal year) 17.4 4.1 Income from continuing operations before 174,519 174,669 income taxes (% change from the previous fiscal year) 14.2 0.1 Net income 111,724 106,463 (% change from the previous fiscal year) 15.1 -4.7 Net income per share-basic (yen) 153.10 146.04 Net income per share-diluted (yen) 151.89 142.15 Return on equity (%) 11.0 9.9 Income from continuing operations before income taxes on total assets (%) 8.1 7.8 Operating income on net sales (%) 8.4 8.2 - -------------------------------------------------------------------------------- Notes: i. Equity in income of affiliates: 1,247 million (Yen 1,539 million in previous fiscal year) (2) Financial Position (Millions of yen) - -------------------------------------------------------------------------------- March 31, 2007 March 31, 2008 - -------------------------------------------------------------------------------- Total assets 2,243,406 2,214,368 Shareholders' investment 1,070,913 1,080,196 Equity ratio (%) 47.7 48.8 Equity per share (yen) 1,467.03 1,498.29 - -------------------------------------------------------------------------------- (3) Cash Flows (Millions of yen) - -------------------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 - -------------------------------------------------------------------------------- Cash flows from operating activities 167,297 194,363 Cash flows from investing activities -115,432 -198,350 Cash flows from financing activities 9,282 -72,185 Cash and cash equivalents at end of period 255,737 170,607 - -------------------------------------------------------------------------------- 2. DIVIDEND INFORMATION (Millions of yen)
(Millions of yen) - ------------------------------------------------------------------------------------------------ Year ended Year ended Year ending March 31, 2007 March 31, 2008 March 31, 2009 - ------------------------------------------------------------------------------------------------ Cash dividends, applicable to the year (yen) 28.00 33.00 37.00 Half year (yen) 13.00 16.00 18.00 Year-end (yen) 15.00 17.00 19.00 Total annual dividends (millions of yen) 20,442 23,933 -- Payout Ratio (%) 18.3 22.6 25.0 Dividends on shareholders' equity (%) 2.0 2.2 -- - ------------------------------------------------------------------------------------------------
3. FORECAST OF OPERATING RESULTS FROM APRIL 1, 2008 TO MARCH 31, 2009 (Millions of yen) - -------------------------------------------------------------------------------- Half year ending Year ending September 30, 2008 March 31, 2009 - -------------------------------------------------------------------------------- Net sales 1,100,000 2,260,000 Operating income 72,500 180,000 Income before income taxes 70,300 176,000 Net income 42,800 108,000 Net income per share-basic (yen) 58.71 148.15 - -------------------------------------------------------------------------------- * In accordance with Japanese regulations, Ricoh has issued forecast for its financial results for the fiscal year ending March 31, 2009. These forecast are forward-looking statements based on a number of assumptions and beliefs in light of the information currently available to management and subject to significant risks and uncertainties. 3 4. OTHERS (1) Significant changes to consolidated subsidiaries: Consolidated subsidiaries: 1 removal (Lanier Worldwide, Inc.) (2) Change in accounting method has been made. (3) Number of common stock outstanding (including treasury stock): As of March 31, 2008 744,912,078 shares As of March 31, 2007 744,912,078 shares
(4) Number of treasury stock: As of March 31, 2008 23,960,828 shares As of March 31, 2007 14,924,405 shares
(REFERENCE) NON-CONSOLIDATED INFORMATION 1. RESULTS FOR THE PERIOD FROM APRIL 1, 2007 TO MARCH 31, 2008 (1) Operating Results (Millions of yen) - -------------------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 - -----------------------------------------------------------------+-------------- Net sales 1,033,302 1,036,228 (% change from the previous fiscal year) 10.6 0.3 Operating income 86,974 70,500 (% change from the previous fiscal year) 24.8 -18.9 Ordinary income 105,231 79,585 (% change from the previous fiscal year) 27.6 -24.4 Net income 71,908 54,669 (% change from the previous fiscal year) 30.5 -24.0 Net income per share-basic (yen) 98.48 74.99 Net income per share-diluted (yen) 97.69 72.97 (2) Financial Position (Millions of yen) - -------------------------------------------------------------------------------- March 31, 2007 March 31, 2008 - -------------------------------------------------------------------------------- Total assets 1,076,290 1,067,876 Net assets 744,815 761,216 Equity ratio (%) 69.2 71.3 Net assets per share (yen) 1,020.29 1,055.85 4 1. PERFORMANCE (1) OPERATING RESULTS *Overview Consolidated net sales of Ricoh Group for fiscal year 2008 (April 1, 2007 to March 31, 2008) increased by 7.3% to Yen 2,219.9 billion from the previous corresponding period. This marks the fourteenth consecutive year-on-year revenue increase. During this period, the average yen exchange rates were Yen 114.40 against the U.S. dollar (up Yen 2.62) and Yen 161.69 against the euro (down Yen 11.61). Sales would have increased by 5.4% excluding the effects of foreign currency exchange fluctuations. Sales in all the segments such as the Office Solutions, Industrial Products and Other increased. As for the Office Solutions, sales of its digital plain paper copiers (PPCs), multifunctional printers (MFPs) and laser printers, mainly for color products, continuously increased and Information Technology services also increased its sales resulting from the expansion of solutions business. As for Industrial Products, sales of its thermal media, semiconductor and electronic component products increased. As for Other, digital camera increased its sales. As a result, domestic sales increased by 1.4% from the previous corresponding period, to Yen 1,016.0 billion. Overseas sales also increased by 12.9% from the previous corresponding period, to Yen 1,203.9 billion. Gross profit increased by 7.6% from the previous corresponding period, to Yen 927.7 billion. This increase was primarily due to the increased sales of value-added high-margin products such as color MFPs in addition to ongoing cost management controls. Foreign currency fluctuations also served as a factor behind the profit increase. Selling, general and administrative expenses increased by 8.5% from the previous corresponding period, to Yen 746.2 billion. R&D expenses remain high level due to its focus on developing new products. Additionally due to our accelerated efforts in implementing measures for enhancing our capabilities to provide solutions and expanding business spheres, expenses increased. R&D expenses increased by Yen 11.0 billion from the previous corresponding period, to Yen 126.0 billion (5.7% of total sales). As a result, operating income increased by 4.1% from the previous corresponding period, to Yen 181.5 billion. In the other (income) expense, the decrease in other income was due to the appreciation of the Yen in the second half of this year. As a result, income from continuing operations before income taxes increased by 0.1% from the previous corresponding period, to Yen 174.6 billion. The effective tax rate was 36.3%. As a result, net income from continuing operations increased by 0.2% from the previous corresponding period, to Yen 106.4 billion. Net income decreased by 4.7% from net income including gain from the sale of the discontinued operations of Yen 5.5 billion for the previous corresponding period. For assets, cash and cash equivalents decreased and other investments including goodwill increased due primarily to the formation of a joint venture company, InfoPrint Solutions Company, LLC, with IBM Corporation. As a result, total assets increased by Yen 29.0 billion to Yen 2,214.3 billion. Interest-bearing debt decreased by Yen 31.2 billion from the end of the previous corresponding period, to Yen 384.3 billion due to the enhancement of cash management in Japan, the Americas and Europe. The shareholders' equity increased by Yen 9.2 billion from the end of the previous corresponding period, to Yen 1,080.1 billion, and the equity ratio improved by 1.1 percentage point from the previous corresponding period, to 48.8%. A year-end cash dividend of Yen 17.00 per share is proposed. Combined with the interim dividend of Yen 16.00 per share, the total dividend for the fiscal year ended March 31, 2008 will be Yen 33.00 per share. 5 [Graph 1] Consolidated performance The graphs are omitted. The data in the omitted graphs can be shown at the schedule 1 in APPENDIX B. 6 *Consolidated Sales by Product Line Office Solutions (Sales up 7.6% to Yen 1,909.5 billion) - ------------------------------------------------------- Net sales in the Office Solutions segment which consists of Imaging Solutions and Network System Solutions increased by 7.6% from the previous corresponding period, to Yen 1,909.5 billion despite the stiff competition against other manufacturers regarding the color equipment and solution business. The breakdown of sales for Imaging Solutions and Network System Solutions is as shown below. The sales would have increased by 5.5% excluding the effects of foreign currency fluctuations. Imaging Solutions (Sales up 8.2% to Yen 1,709.4 billion) -------------------------------------------------------- Sales of PPCs, MFPs and printers, mainly color equipment, increased both in Japan and overseas due to its expanding product lines and enhanced solution sales structures. The new color MFP products launched as a standard new-generation color model played a large role in this sales increase. Overall sales increased by 8.2% from the previous corresponding period, to Yen 1,709.4 billion. The sales would have increased by 5.9% excluding the effects of foreign currency fluctuations. Network System Solutions (Sales up 3.0% to Yen 200.0 billion) ------------------------------------------------------------- The increase in sales of IT services was due to the expansion of solution business. The sales of personal computers and PC servers increased slightly in Japan. As a result, sales in this category increased by 3.0% from the previous corresponding period, to Yen 200.0 billion. Industrial Products (Sales up 8.2% to Yen 144.3 billion) - -------------------------------------------------------- Net sales in the Industrial Products segment increased by 8.2% from the previous corresponding period, to Yen 144.3 billion. Sales in semiconductors, thermal media as well as electric components increased. Other (Sales up 3.1% to Yen 166.0 billion) - ------------------------------------------ Net sales in this category increased by 3.1% from the previous corresponding period, to Yen 166.0 billion. Sales of digital cameras increased both in Japan and overseas in addition to good performance of the financing services in Japan. [Graph 2] Consolidated sales by product line The graphs are omitted. The data in the omitted graphs can be shown at the schedule 2 in APPENDIX B. 7 * Consolidated Sales by Geographic Area Japan (Sales up 1.4% to Yen 1,016.0 billion) - -------------------------------------------- The Japanese economy was slowing in the second half of this year due to the increase in price of crude oil, the decline in stock market prices, the appreciation of the Yen, the flagging building investment and so on. Ricoh launched its new products and offered a wide range of solutions in an effort to cultivate a growing customers' needs for solutions and color products in the office solutions market. This effort resulted in a significant sales increase in color MFPs and printers and sales of IT services also increased as compared to the previous corresponding period. In the Industrial Products, sales in thermal media and electronic components increased. Sales in the Other increased due to the favorable performance in financing business as well as digital cameras. Overall sales in Japan increased by 1.4% from the previous corresponding period. The Americas (Sales up 2.0% to Yen 434.7 billion) - -------------------------------------------------- In the U.S., a competition in our market become more intensified while the subprime loan arises has precipitated a decline in the economy. The Office Solutions segment focused on strengthening sales structures and expanding product lines in order to provide the best solutions to meet the diverse range of customer needs for color, networking and high-speed products. As a result sales of color MFPs and printers exceeded the last fiscal year's level. These factors combined resulted in a 2.0% increase in the sales in the Americas. The increase in sales in this area would have increased by 4.3% excluding the effects of foreign currency fluctuations. Europe (Sales up 18.9% to Yen 603.2 billion) - --------------------------------------------- As the European economy remaining on a steady footing, the Office Solutions segment proceeded with further strengthening sales structures and expanding product lines in order to provide the best solutions to meet a diverse range of customer needs through the acquisition of Infotec Europe B.V. As a result, sales of PPCs, MFPs and printers exceeded last year's level mainly in color product categories, bringing overall sales in the Office Solutions segment up 19.1% over the previous corresponding period. Sales in the Industrial Products also increased due to the favorable performance of the thermal media and semiconductor business. These factors all resulted in an 18.9% increase in sales in Europe. The increase in sales in this area would have increased by 10.8% excluding the effects of foreign currency fluctuations. Other (Sales up 24.7% to Yen 165.9 billion) - ------------------------------------------- The Other segment including China, other Asian countries and Oceania generally experienced economic evolution, with the Chinese economic continuious rapid growth despite a slight slowdown in some areas. Against this backdrop, the Office Solutions segment achieved higher sales of PPCs, MFPs and printers, largely for color products, in comparison with the previous corresponding period due to the increasing demand for both color and monocrome products. These factors all resulted in a 24.7% increase in overall sales in this area. The sales increase in this area would have increased by 19.3% excluding the effects of foreign currency fluctuations. [Graph 3] Consolidated sales by geographic area The graphs are omitted. The data in the omitted graphs can be shown at the schedule 3 in APPENDIX B. 8 *Segment Information Business Segment - ---------------- Office Solutions - ---------------- Ricoh expanded product lines in the office equipment market as well as in the production printing and low-end markets. Ricoh also strengthened sales structures for solutions business. This resulted in increased sales of PPCs, MFPs and printers, mainly for color products, both in Japan and overseas in addition to increased sales in service and support including IT services. Consequently, overall sales in this segment increased by 7.6% from the previous corresponding period, to Yen 1,909.5 billion. In terms of operating expenses, R&D expenses remain high level due to its focus on developing new products. Additionally due to its accelerated efforts in implementing measures for enhancing our capabilities to provide solutions and expanding business spheres, expenses increased. Ricoh has started to see the positive effect of its structural reform initiatives such as enhancing the efficiency of the core operations. As a result, operating income increased by 4.1% to Yen 234.6 billion from the previous corresponding period. Capital investments increased as compared to the previous corresponding period due to mainly the purchase of molds for new products. Total assets increased as compared to the previous corresponding period due to increases goodwill resulted from the formation of a joint venture company with IBM Corporation. Industrial Products - ------------------- Sales in semiconductors, thermal media and electronic components remained steady. Sales in measuring instruments decreased slightly and sales in optical components decreased as compared to the previous corresponding period. As a result, overall sales in the Industrial Products segment increased by 7.8% to Yen 148.8 billion. Operating income increased from the previous corresponding period due to an increase in its sales volume. Other - ----- The sales in the digital camera businesses increased. As a result, sales in the Other segment increased by 3.1%, operating income increased from the previous corresponding period. (Billions of yen) - ------------------------------------------------------------------------------ Year ended Year ended March 31, 2007 March 31, 2008 Change (%) - ------------------------------------------------------------------------------ Office Solutions: Net sales 1,774.4 1,909.5 7.6 Operating income 225.3 234.6 4.1 Operating income on sales(%) 12.7 12.3 -0.4point Identifiable assets 1,570.7 1,643.5 4.6 Capital expenditures 72.4 74.7 3.2 Depreciation 62.8 63.1 0.5 - ------------------------------------------------------------------------------ Industrial Products: Net sales 138.1 148.8 7.8 Operating income 2.9 4.1 41.6 Operating income on sales(%) 2.1 2.8 0.7point Identifiable assets 93.3 91.6 -1.8 Capital expenditures 8.5 6.5 -24.2 Depreciation 6.0 5.8 -4.6 - ------------------------------------------------------------------------------ Other: Net sales 161.0 166.0 3.1 Operating income 2.2 2.5 15.6 Operating income on sales(%) 1.4 1.5 0.1point Identifiable assets 112.2 106.2 -5.4 Capital expenditures 2.6 2.1 -18.6 Depreciation 2.0 2.1 2.7 - ------------------------------------------------------------------------------ 9 Geographic Segment - ------------------ Japan - ----- Sales in Japan increased in the Office Solutions, Industrial Products and Other segments. As a result, overall sales in Japan increased by 0.9% from the previous corresponding period, to Yen 1,535.5 billion. Operating expenses increased by 1.1% due to an increase in the net sales as well as increases in R&D expenses. Consequently, operating income decreased by 2.2% to Yen 107.9 billion and operating income on net sales decreased by 0.2 percentage point to 7.0%. The Americas - ------------ While sales increased by 1.5% to Yen 435.7 billion due to expanding business spheres, operating income decreased by 88.8% to Yen 2.3 billion due to a decline in the economy and a stiff competition in our market. Operating income as a percentage of net sales decreased by 4.4 percentage points to 0.5%. Europe - ------ Sales significantly increased for mainly color PPCs and MFPs compared with the previous corresponding period. As a result, net sales in Europe increased by 18.2% to Yen 604.8 billion. Operating income increased by 16.9% from the pervious corresponding period, to Yen 39.0 billion. Operating income as a percentage of net sales remained same as the previous corresponding period, to 6.5%. Other - ----- Sales in the Chinese, Asian and Oceana markets increased from the previous corresponding period, mainly for color PPCs, MFPs and printers. A large number of products primarily including color MFPs manufactured in its Chinese production base were supplied on a global basis, significantly boosting the value of exports in China. Consequently, net sales in these areas were up 18.0% to Yen 317.5 billion on a year-on-year basis. Operating income rose 50.7% to Yen 26.4 billion due to increased production volume in these markets. The ratio of operating income to net sales also increased by 1.8 percentage points compared with the previous corresponding period, to 8.3%. [Graph 4] Geographic segment information The graphs are omitted. The data in the omitted graphs can be shown at the schedule 4 in APPENDIX B. 10 *Forecast for the entire fiscal year Economic projections and Ricoh Group's strategies for fiscal year 2009 - ---------------------------------------------------------------------- The global economy is expected to continue growing at a sluggish pace due to the subprime loan, a price of crude oil and so on. The US economy is likely to remain highly stagnant, and the economy in Asian countries will slow down. The Japanese economy is expected to remain highly uncertain expanding due to the decline in stock market prices and appreciation of the Yen although the economy is continued expanding at a gradual pace. Customer needs will become increasingly diversified in the Ricoh Group's markets. Competition is expected to heat up in the area of office solutions, especially the area of color products and solution business. Competition is expected to be fierce in both the Industrial Products and Other segments as companies try to respond to ever-diversifying customer needs. Working against this backdrop, the Ricoh Group aims to enhance its competitive edge by "Creation of customer value" and "High efficiency management" that will promote the continuous growth and further development in the future. Ricoh will launch new products and services throughout fiscal year 2009 with an aim to "Creation of customer value". Ricoh will also step up our efforts to implement structural reforms and strengthening our business foundation in order to further enhance "High efficiency management". Our performance forecast for fiscal year 2008 is as follows: Exchange Rate Assumptions for the full year ended March 31, 2009 US$ 1 = Yen 100.00 (Yen 114.40 in previous fiscal year) EURO 1 = Yen 160.00 (Yen 161.69 in previous fiscal year)
(Billions of yen) - -------------------------------------------------------------------------------------- Year ended Year ending March 31, 2008 March 31, 2009 (Results) (Forecast) Change - -------------------------------------------------------------------------------------- Domestic sales 1,016.0 1,038.0 2.2% Overseas sales 1,203.9 1,222.0 1.5% Net sales 2,219.9 2,260.0 1.8%(*1) Gross profit 927.7 932.0 0.5% Operating income 181.5 180.0 -0.8% Income before income taxes 174.6 176.0 0.8% Net income 106.4 108.0 1.4%
Notes: *1 It will be fifteenth consecutive years of sales growth. * Ricoh bases the forecast estimates for the year ending March 31, 2009 above upon information currently available to management, which involves risks and uncertainties that could cause actual results to differ materially from those projected. 11 (2) FINANCIAL POSITION A) Assets, Liabilities, and Shareholders' investment at Year-End
(Billions of yen) - ------------------------------------------------------------------------------------- March 31, 2007 March 31, 2008 Change - ------------------------------------------------------------------------------------- Total Assets 2,243.4 2,214.3 -29.0 Shareholders' investment 1,070.9 1,080.1 9.2 Equity Ratio 47.7% 48.8% 1.1 points
For Assets, cash and cash equivalents decreased and other investments including goodwill increased due primarily to the formation of a joint venture company, InfoPrint Solutions Company, LLC, with IBM Corporation. As a result, total assets decreased by Yen 29.0 billion to Yen 2,214.3 billion. For Liabilities, interest-bearing debt decreased from the end of the previous period through the enhancement of cash management system in Japan, the Americas and Europe. As a result, total liabilities decreased by Yen 39.7 billion to Yen 1,075.8 billion. In Shareholders' investment, there was no major change in common stock or additional paid-in capital, but Accumulated other comprehensive income decreased due to the decrease in cumulative translation adjustments. Common stock for treasury increased by Yen 15.5 billion. As a result, total Shareholders' Investment increased by Yen 9.2 billion to Yen 1,080.1 billion due to the increase in retained earnings resulting from earning profit. B) Cash Flows
(Billions of yen) - ------------------------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 Change - ------------------------------------------------------------------------------------- Cash flows from operating activities 167.2 194.3 27.0 Cash flows from investing activities -115.4 -198.3 -82.9 Cash flows from financing activities 9.2 -72.1 -81.4 Cash and Cash Equivalents at end of period 255.7 170.6 -85.1
Net cash provided by operating activities increased by Yen 27.0 billion from the previous corresponding period, to Yen 194.3 billion. While net income and depreciation increased, trade receivables and financial receivables increased due to the business expansion. Net cash used in investing activities increased by Yen 82.9 billion from the previous corresponding period, to Yen 198.3 billion, due primarily to a payment for the formation of a joint venture company with IBM Corporation. As a result, free cash flow generated by operating activities and investment activities decreased by Yen 55.8 billion from the previous corresponding period, to Yen 3.9 billion. Net cash used in financing activities amounted to Yen 72.1 billion due primarily to a decrease in interest-bearing debt and purchase of common stock for treasury, while net cash used in financing activities was Yen 9.2 billion in the previous corresponding period due mainly to the proceeds from the issuance of convertible bonds. As a result of the above, cash and cash equivalents as of the end of this fiscal year decreased by Yen 85.1 billion from the end of the previous corresponding period, to Yen 170.6 billion. C) Cash Flow Indices
- -------------------------------------------------------------------------------------------------------------------------------- Year ended Year ended Year ended Year ended Year ended March 31, 2004 March 31, 2005 March 31, 2006 March 31, 2007 March 31, 2008 - -------------------------------------------------------------------------------------------------------------------------------- Shareholders' investment / Total assets 42.9% 44.2% 47.0% 47.7% 48.8% Market capitalization / Total assets 85.3% 69.1% 82.2% 86.4% 53.3% Interest bearing debt / Operating cash flow 2.8 3.1 2.2 2.5 2.0 Operating cash flow / Interest expense 29.3 28.3 33.7 22.8 40.2
Notes: i. All indices are calculated based on consolidated data. ii. Market capitalization equals the stock price at the end of fiscal year multiples by the number of shares outstanding at the end of fiscal year. iii. Operating cash flows is shown in consolidated statement of cash flow. Interest bearing debt equals all debt in consolidated balance sheets. 12 (3) DIVIDEND POLICY Ricoh endeavors to ensure that policies are regularly updated to take the dividend payout ratio into consideration in the payment of dividends, while at the same time increasing retained earnings for the enhancement of corporate structure and the new business generation. Furthermore, these retained earnings will be used both in the reinforcement of core businesses and for investment in new fields with both medium-term and long-term perspectives. The total dividend per share for the fiscal year ended March 31, 2008 and March 31, 2009 will be Yen 33.00 (increased by Yen 5.00 compared with the dividend for fiscal year ended March 31, 2007) and Yen 37.00, respectively. (4) RISK FACTORS Ricoh is exposed to various risks which include the risks listed below. Although certain risks that may affect Ricoh's businesses are listed in this section, this list is not exhaustive. Ricoh's business may in the future also be affected by other risks that are currently unknown or that are not currently considered significant or material. -Ability to respond to rapid technological changes in the document imaging and management industry -Highly competitive markets -The risks of international operations and the risks of overseas expansion -Economic trends in Ricoh's major markets -Foreign exchange fluctuations -Crude oil price fluctuations -Government regulation that can limit its activities or increase its cost of operations -Internal control evaluations and attestation over financial reporting under section 404 of the Sarbanes-Oxley Act of 2002 -Dependence on protecting its intellectual property rights -Dependence on securing and retaining specially skilled personnel -Adverse affection by its employee benefit obligations -Environmental laws and regulations -Risks associated with Ricoh's equipment financing business -Product liability claims that could significantly affect its financial condition -Alliances with other entities -Catastrophic disaster, information technology problems or infectious diseases 13 2. GROUP POSITION The Ricoh Group comprises 306 subsidiaries and 11 affiliates as of March 31, 2008. Their development, manufacturing, sales, and service activities center on Office Solutions, Industrial Products, and Other. Ricoh Company, Ltd., a parent company, heads development. The parent company and subsidiaries or affiliates maintain an integrated domestic and international manufacturing structure. Below, we have listed our main product areas and the positions of key subsidiaries and affiliates. (Office Solutions) In this business category, Ricoh provides products and systems that support the enhancement of the office productivity of customers. Major products include: Digital/analog copiers, MFPs (multifunctional printers), laser printers, facsimile machines, and digital duplicators. Ricoh also provides solution systems including personal computers and servers, utilizing its information technology. Another business Ricoh also provides are support, service, and related supplies, as well as support and service including IT environment setup and network administration. [Main Subsidiaries and Affiliates] Production Japan...Tohoku Ricoh Co., Ltd., Ricoh Elemex Corporation, Ricoh Unitechno Co., Ltd., Hasama Ricoh Inc., Ricoh Microelectronics Co., Ltd., Ricoh Keiki Co., Ltd., and Ricoh Printing Systems, Ltd. The Americas...Ricoh Electronics, Inc. Europe...Ricoh UK Products Ltd., Ricoh Industrie France S.A.S. Other regions...Ricoh Asia Industry (Shenzhen) Ltd., Shanghai Ricoh Digital Equipment Co., Ltd. Sales and Service Japan ...Hokkaido Ricoh Co., Ltd., Ricoh Tohoku Co., Ltd., Ricoh Sales Co., Ltd., Ricoh Chubu Co., Ltd., Ricoh Kansai Co., Ltd., Ricoh Chugoku Co., Ltd., Ricoh Kyushu Co., Ltd., and 26 other sales companies nationwide, Ricoh Technosystems Co., Ltd., Ricoh Leasing Co., Ltd., and Ricoh Logistics System Co., Ltd. The Americas...Ricoh Americas Corporation, InfoPrint Solutions Company Europe...Ricoh Europe PLC, Ricoh Deutschland GmbH, Ricoh UK Ltd., Ricoh France S.A.S., Ricoh Espana S.A., Ricoh Italia S.p.A. and NRG Group PLC Other regions...Ricoh China Co., Ltd., Ricoh Hong Kong Ltd., Ricoh Asia Pacific Operations Ltd., Ricoh Asia Pacific Pte. Ltd., Ricoh Australia Pty, Ltd., and Ricoh New Zealand Ltd. (Industrial Products) Manufacturing and marketing thermal media, optical equipments, semiconductors, electronic component and measuring equipments [Main Subsidiaries and Affiliates] Production and Sales Japan...Ricoh Optical Industries Co., Ltd., Ricoh Elemex Corporation, and Ricoh Microelectronics Co., Ltd. The Americas...Ricoh Electronics, Inc. Europe...Ricoh Industrie France S.A.S. (Other) Supplying optical discs and digital camera, and providing leasing and logistics services [Main Subsidiaries and Affiliates] Sales Ricoh Americas Corporation, Ricoh Europe PLC Other Ricoh Leasing Co., Ltd., Ricoh Logistics System Co., Ltd. 14 (Chart of Business System) The chart of group position is omitted. 15 3. MANAGEMENT POLICY (1) Basic Management Policy Ricoh Group announced a group vision "Winner in the 21st Century" (Build a strong global RICOH brand), and aims to gain the strong trust of customers by continually contributing to greater customer productivity and knowledge creation, thereby continuing to grow and develop. To these ends, Ricoh is promoting business activities in order to provide innovative products and services for all customers who handle information at work in offices and in their lives out of the office, based on the Ricoh values of "Harmonize with the environment", "Simplify your life and work", and "Support knowledge management". In the 16th Mid-Term Management Plan for the period April 2008 to March 2011, the following 5 basic strategies are established for group management. i. Become the top company in targeted business areas ii. Strengthen and accelerate environmental management iii. Promote Ricoh Quality iv. Create new business lines v. Build a strong global RICOH brand (2) Medium and Long Term Management Strategy Up to now, in Ricoh Group's main business of office solutions, in addition to manufacturing and sales of simple copying machines and printers, Ricoh has provided document management systems through digital image equipment and networking, thereby improving customers' businesses. Ricoh also implemented reforms for a higher productivity business structure. In the previous 15th Mid-Term Management Plan, in order to create a stronger earnings foundation in general office copying equipment and printers, Ricoh pushed forward from black & white to color, incorporated advanced digital technologies, and progressed to network capable equipment, providing solutions which meet the needs of customer business environments. Ricoh also positioned the production printing market and low-end market as new growth areas, and is actively developing these businesses. In its 16th Mid-Term Management Plan, Ricoh shall put even more emphasis on customer viewpoints, and continue providing products and services which exceed customer expectations, thereby earning even greater trust of customers. Especially in the office solutions area, Ricoh Group plans to utilize its strengths such as customer contact abilities, excellent product line, ability to propose solutions, global business development abilities, and image processing technologies, to respond to increasingly diverse needs of more customers, and strengthen its business foundations. Specifically, "Work flow", "Security", "TCO (Total Cost of Ownership)", "Compliance", and "Environment" are important issues for customers. Ricoh will focus on these to provide greater customer value. Ricoh will construct and apply document solutions with networked printing solutions by efficiently networking multiple copying machines and printers, and systems with centralized storage, search, and output by file servers, and thereby contribute to raising overall customer business productivity. Furthermore, Ricoh is aiming at creating new service businesses (business process outsourcing). Towards achieving these goals, Ricoh is working to develop solution platforms and enhance its solution sales organization. Ricoh is providing better color laser printer and GELJET printer products to boost growth of its low-end business and rapidly establish the production printing business, thus expanding its business areas in the printing market. In the industrial market, allocation of business resources is focused on businesses where large growth is expected. Ricoh will put efforts into strengthening cooperation between technical fields and business areas in order to combine diverse fields and create new businesses. Ricoh is also making further advances in business development in emerging markets, in both the office solutions market and the industrial market. In order to increase or create customer value and boost earning power in each business, it is important to secure competitive superiority through technology. Ricoh will continue to actively work to strengthen its technical abilities. Basic strategy achievements this period until today are as follows. In the office solutions market, Ricoh continually creates new color multifunction machines and color laser printers, further enhancing the product line. As a main color multifunction machine, Ricoh launched the imagio MP C7500/6000 (name outside Japan: Aficio C7500/C6000), which reduces its standard power consumption to 1/2 of existing machines, and produces higher quality images by adopting "New color PxP toner". We also launched the "imagio Neo 753RC/603RC", with a recycle parts mass ratio of 88%, and by incorporating Ricoh's unique energy conservation technologies "HYBRID QSU" and "QSU", is far below the recommended power consumption level determined in green purchasing criteria. By achieving excellent environmental performance, higher image quality, and advanced security functions in these new product launches, Ricoh's stronger product line has led it to attain large market shares in color copier/multifunction equipment markets in Japan and overseas. 16 In the low-end printer market, Ricoh launched the IPSiO SP 220 (name outside Japan: Aficio SP C220N), a color laser printer priced similar to black & white printers, which adopts a compact and stylish design and achieves high productivity, printing black & white or color at 16 pages/minute. It can be utilized in a variety of situations, as a high performance color laser printer used at small offices and shop service desks, on an office desktop, or as a shared printer for small work groups. Also, further progress has been made in the unique GELJET technology which combines the advantages of both ink jet and laser technologies. Ricoh launched the IPSiO GX 3000SF/GX3000S (name outside Japan: Aficio GX3000SF/GX3000S/ 3050sfn). This is a color multifunction machine for business users (maximum 4 functions per machine), which achieves higher quality images, higher speed printing, low cost, energy conservation, and saves space. With these new products, Ricoh continues to create the new low-end business color market. To expand business in the production printing market, Ricoh established a joint venture company with IBM, "InfoPrint Solutions Company" in June 2007 (the plan is to make it a wholly owned Ricoh subsidiary in 2010). The company will start operating with 1,200 employees worldwide, and the plan is to add about 1,000 printer maintenance staff in June 2008. The new company will combine Ricoh Group strengths in hardware and software development and production with InfoPrint's strengths in service and software and IT solutions, to provide all sizes of customers with output solutions for office printing, industrial printing, large printing systems, and commercial printing environments. J.D. Power Asia Pacific, Inc. is an international institute specialized in customer satisfaction surveys. In its "2007 Japan Printer Satisfaction Study", Ricoh achieved 1st place in both color printers and black & white printers. Ricoh also achieved the highest evaluation in J.D. Power's "2007 Japan Copier/Multifunction Product Customer Satisfaction Study", for both color machines and black & white machines. Furthermore, Ricoh Technosystems Co., Ltd. received the highest evaluation for system planning and construction 2 years in a row, in its "2007 Japan Solution Provider Satisfaction Study". Ricoh will further strengthen its highly evaluated products, sales handling, support, and services, and advance its efforts from the customer's standpoint. In the industrial market, a new factory for the thermal media business began operating in China, enabling more stable product supply for the China market, in which large growth is expected. Also, in the semiconductor business, products such as Ricoh's power supply ICs for mobile phones have attained leading global market shares. Finally, towards achievement of its growth strategy, Ricoh continued to strengthen its business foundations in this period. In sales and services, Ricoh combined companies in each region of the USA, Europe, and Japan, working to strengthen its sales organization, and to increase business efficiency. In development, at the Ricoh Technology Center which combines the design and development functions, we are promoting design and development process innovation by a cross-functional organization, and rapidly achieving higher development efficiency. (3) Issues to Face Customer needs are increasingly diversifying. It is increasingly difficult to satisfy customers' needs by providing prices and functions of purchased products or specific services. There is also diverse and increasingly harsh competition in color equipment and solutions development. In this rapidly changing market environment, in order for Ricoh Group to continually achieve growth and development and establish a global brand, we consider it most important to thoroughly execute "Creation of customer value" and "High efficiency management", and thereby enhance our competitive strength as a company to gain greater trust of customers. In "Creation of customer value", Ricoh will increasingly practice active discovery of new value by "Customer Satisfaction Management", in addition to Ricoh's unique abilities to pursue the 3 customer values of "Harmonize with the environment", "Simplify your life & work", and "Support knowledge management". That is, Ricoh will strive further to provide products and services which help customers contribute to global environmental conservation, pursue ease of use which enables customers to thoroughly utilize products and services, support knowledge creation activities by customers, and create environments for knowledge creation. In order to boost earnings strength of the overall group, Ricoh will continue working for "High efficiency management". By promoting structural innovations in development, production, sales, etc., selecting businesses for complete focus, and improved business processes, Ricoh will boost earnings power of the overall group and individual businesses. We recognize that another vital issue is ensuring that results of early investments towards growth lead to earnings. Furthermore, by investing profits created in business areas and stronger technologies where large growth is expected, Ricoh will work to boost sales and profits, further growing its corporate value. 17 4. CONSOLIDATED FINANCIAL STATEMENTS (1) CONSOLIDATED BALANCE SHEETS (March 31, 2007 and 2008) Assets
(Millions of yen) - --------------------------------------------------------------------------------------------------------- March 31, 2007 March 31, 2008 Change - --------------------------------------------------------------------------------------------------------- Current Assets Cash and time deposits 257,154 172,138 -85,016 Trade receivables 693,237 699,043 5,806 Inventories 184,354 192,023 7,669 Other current assets 65,347 60,936 -4,411 Total Current Assets 1,200,092 1,124,140 -75,952 Fixed Assets Tangible fixed assets 264,668 254,633 -10,035 Finance receivables 435,874 445,436 9,562 Other investments 342,772 390,159 47,387 Total Fixed Assets 1,043,314 1,090,228 46,914 - --------------------------------------------------------------------------------------------------------- Total Assets 2,243,406 2,214,368 -29,038 ========================================================================================================= Note: Contents of cash and time deposits: Cash and cash equivalents 255,737 170,607 Time deposits 1,417 1,531
Liabilities and Shareholders' Investment
(Millions of yen) - --------------------------------------------------------------------------------------------------------- March 31, 2007 March 31, 2008 Change - --------------------------------------------------------------------------------------------------------- Current Liabilities Trade payables 367,211 360,569 -6,642 Short-term borrowings 178,847 158,442 -20,405 Other current liabilities 189,554 194,745 5,191 Total Current Liabilities 735,612 713,756 -21,856 Fixed Liabilities Long-term indebtedness 236,801 225,930 -10,871 Accrued pension and severance costs 99,028 99,830 802 Other fixed liabilities 44,183 36,373 -7,810 Total Fixed Liabilities 380,012 362,133 -17,879 - --------------------------------------------------------------------------------------------------------- Total Liabilities 1,115,624 1,075,889 -39,735 - --------------------------------------------------------------------------------------------------------- Minority Interest 56,869 58,283 1,414 - --------------------------------------------------------------------------------------------------------- Shareholders' Investment Common stock 135,364 135,364 -- Additional paid-in capital 186,454 186,448 -6 Retained earnings 752,398 835,238 82,840 Accumulated other comprehensive income (loss) 26,998 -31,005 -58,003 Treasury stock -30,301 -45,849 -15,548 Total Shareholders' Investment 1,070,913 1,080,196 9,283 - --------------------------------------------------------------------------------------------------------- Total Liabilities and Shareholders' Investment 2,243,406 2,214,368 -29,038 ========================================================================================================= Note: Other comprehensive income; Net unrealized holding gains on available-for-sale securities 9,001 1,316 -7,685 Pension liability adjustments (including adjustment to -9,406 -20,788 -11,382 initially apply to SFAS No.158, net of tax) Net unrealized gains (losses) on derivative instruments -28 -408 -380 Cumulative translation adjustments 27,431 -11,125 -38,556
Reference: Exchange rate March 31, 2007 March 31, 2008 US$ 1 Yen 118.05 Yen 100.19 EURO 1 Yen 157.33 Yen 158.19 18 (2) CONSOLIDATED STATEMENTS OF INCOME (Three months ended March 31, 2007 and 2008)
(Millions of yen) - -------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2007 March 31, 2008 Change % - -------------------------------------------------------------------------------------------------------------- Net sales 576,291 579,577 3,286 0.6 Cost of sales 341,169 340,519 -650 -0.2 Percentage of net sales (%) 59.2 58.8 Gross Profit 235,122 239,058 3,936 1.7 Percentage of net sales (%) 40.8 41.2 Selling, general and administrative expenses 182,557 191,572 9,015 4.9 Percentage of net sales (%) 31.7 33.0 Operating income 52,565 47,486 -5,079 -9.7 Percentage of net sales (%) 9.1 8.2 Other (income) expense Interest and dividend income 2,055 1,787 -268 -13.0 Percentage of net sales (%) 0.4 0.3 Interest expense 2,227 1,369 -858 -38.5 Percentage of net sales (%) 0.4 0.2 Other, net 933 7,320 6,387 684.6 Percentage of net sales (%) 0.2 1.3 Income before income taxes, equity income and minority interests 51,460 40,584 -10,876 -21.1 Percentage of net sales (%) 8.9 7.0 Provision for income taxes 21,342 17,781 -3,561 -16.7 Percentage of net sales (%) 3.7 3.1 Minority interests in earnings of subsidiaries 1,282 1,582 300 23.4 Percentage of net sales (%) 0.2 0.3 Equity in earnings of affiliates -409 -34 375 -- Percentage of net sales (%) -0.1 0.0 Net income 28,427 21,187 -7,240 -25.5 Percentage of net sales (%) 4.9 3.7 Reference : Exchange rate US$ 1 Yen 119.48 Yen 105.60 EURO 1 Yen 156.52 Yen 158.06
(Year ended March 31, 2007 and 2008)
(Millions of yen) - -------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 Change % - -------------------------------------------------------------------------------------------------------------- Net sales 2,068,925 2,219,989 151,064 7.3 Cost of sales 1,206,519 1,292,262 85,743 7.1 Percentage of net sales (%) 58.3 58.2 Gross Profit 862,406 927,727 65,321 7.6 Percentage of net sales (%) 41.7 41.8 Selling, general and administrative expenses 688,026 746,221 58,195 8.5 Percentage of net sales (%) 33.3 33.6 Operating income 174,380 181,506 7,126 4.1 Percentage of net sales (%) 8.4 8.2 Other (income) expense Interest and dividend income 5,501 6,341 840 15.3 Percentage of net sales (%) 0.3 0.3 Interest expense 7,350 4,835 -2,515 -34.2 Percentage of net sales (%) 0.4 0.2 Other, net -1,988 8,343 10,331 -- Percentage of net sales (%) -0.1 0.4 Income from continuing operations before income taxes, equity income and minority interests 174,519 174,669 150 0.1 Percentage of net sales (%) 8.4 7.9 Provision for income taxes 64,326 63,396 -930 -1.4 Percentage of net sales (%) 3.1 2.9 Minority interests in earnings of subsidiaries 5,508 6,057 549 10.0 Percentage of net sales (%) 0.3 0.3 Equity in earnings of affiliates 1,539 1,247 -292 -19.0 Percentage of net sales (%) 0.1 0.1 Income from continuing operations 106,224 106,463 239 0.2 Percentage of net sales (%) 5.1 4.8 Income from discontinued operations, net of tax 5,500 -- -5,500 -- Percentage of net sales (%) 0.3 -- Net income 111,724 106,463 -5,261 -4.7 Percentage of net sales (%) 5.4 4.8 Reference : Exchange rate US$ 1 Yen 117.02 Yen 114.40 EURO 1 Yen 150.08 Yen 161.69
19 (3)-1. CONSOLIDATED SALES BY PRODUCT CATEGORY (Three months ended March 31, 2007 and 2008)
(Millions of yen) - -------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2007 March 31, 2008 Change % - -------------------------------------------------------------------------------------------------- [Office Solutions] Imaging Solutions 442,138 447,786 5,648 1.3 Percentage of net sales (%) 76.7 77.3 Network System Solutions 58,924 58,512 -412 -0.7 Percentage of net sales (%) 10.2 10.1 Total Office Solutions 501,062 506,298 5,236 1.0 Percentage of net sales (%) 86.9 87.4 - -------------------------------------------------------------------------------------------------- [Industrial Products] Industrial Products 34,561 32,591 -1,970 -5.7 Percentage of net sales (%) 6.0 5.6 - -------------------------------------------------------------------------------------------------- [Other] Other 40,668 40,688 20 0.0 Percentage of net sales (%) 7.1 7.0 - -------------------------------------------------------------------------------------------------- Grand Total 576,291 579,577 3,286 0.6 Percentage of net sales (%) 100.0 100.0 - -------------------------------------------------------------------------------------------------- Reference : Exchange rate US$ 1 Yen 119.48 Yen 105.60 EURO 1 Yen 156.52 Yen 158.06
(Year ended March 31, 2007 and 2008)
(Millions of yen) - ------------------------------------------------------------------------------------------ Year ended Year ended March 31, 2007 March 31, 2008 Change % - ------------------------------------------------------------------------------------------ [Office Solutions] Imaging Solutions 1,580,155 1,709,491 129,336 8.2 Percentage of net sales (%) 76.4 77.0 Network System Solutions 194,312 200,082 5,770 3.0 Percentage of net sales (%) 9.4 9.0 Total Office Solutions 1,774,467 1,909,573 135,106 7.6 Percentage of net sales (%) 85.8 86.0 - ------------------------------------------------------------------------------------------ [Industrial Products] Industrial Products 133,387 144,340 10,953 8.2 Percentage of net sales (%) 6.4 6.5 - ------------------------------------------------------------------------------------------ [Other] Other 161,071 166,076 5,005 3.1 Percentage of net sales (%) 7.8 7.5 - ------------------------------------------------------------------------------------------ Grand Total 2,068,925 2,219,989 151,064 7.3 Percentage of net sales (%) 100.0 100.0 - ------------------------------------------------------------------------------------------ Reference : Exchange rate US$ 1 Yen 117.02 Yen 114.40 EURO 1 Yen 150.08 Yen 161.69
* Each category includes the following product line: Imaging Solutions Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Network System Solutions Personal computers, PC servers, network systems and network related software Industrial Products Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Other Optical discs and digital camera 20 (3)-2. CONSOLIDATED SALES BY GEOGRAPHIC AREA (Three months ended March 31, 2007 and 2008)
(Millions of yen) - ---------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2007 March 31, 2008 Change % - ---------------------------------------------------------------------------------------------- [Domestic] 272,943 266,943 -6,000 -2.2 Percentage of net sales (%) 47.4 46.1 [Overseas] 303,348 312,634 9,286 3.1 Percentage of net sales (%) 52.6 53.9 The Americas 117,084 110,846 -6,238 -5.3 Percentage of net sales (%) 20.3 19.1 Europe 150,856 159,574 8,718 5.8 Percentage of net sales (%) 26.2 27.5 Other 35,408 42,214 6,806 19.2 Percentage of net sales (%) 6.1 7.3 Grand Total 576,291 579,577 3,286 0.6 Percentage of net sales (%) 100.0 100.0 Reference : Exchange rate US$ 1 Yen 119.48 Yen 105.60 EURO 1 Yen 156.52 Yen 158.06
(Year ended March 31, 2007 and 2008)
(Millions of yen) - --------------------------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 Change % - --------------------------------------------------------------------------------------- [Domestic] 1,002,251 1,016,034 13,783 1.4 Percentage of net sales (%) 48.4 45.8 [Overseas] 1,066,674 1,203,955 137,281 12.9 Percentage of net sales (%) 51.6 54.2 The Americas 426,453 434,799 8,346 2.0 Percentage of net sales (%) 20.6 19.6 Europe 507,158 603,219 96,061 18.9 Percentage of net sales (%) 24.5 27.2 Other 133,063 165,937 32,874 24.7 Percentage of net sales (%) 6.5 7.4 Grand Total 2,068,925 2,219,989 151,064 7.3 Percentage of net sales (%) 100.0 100.0 Reference : Exchange rate US$ 1 Yen 117.02 Yen 114.40 EURO 1 Yen 150.08 Yen 161.69
21 (4) CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT Year ended March 31, 2007
(Millions of yen) - ----------------------------------------------------------------------------------------------------------------------------- Accumulated other Additional comprehensive Total Common paid-in Retained income Treasury Shareholders' stock capital earnings (loss) stock Investment - ----------------------------------------------------------------------------------------------------------------------------- Beginning balance 135,364 186,450 665,394 4,099 -31,062 960,245 Cumulative effect of adjustment resulted from applying SAB No.108 -- -- -6,464 -- -- -6,464 - ----------------------------------------------------------------------------------------------------------------------------- Beginning balance (after adjustment) 135,364 186,450 658,930 4,099 -31,062 953,781 - ----------------------------------------------------------------------------------------------------------------------------- Gain (Loss) on disposal of treasury stock 4 4 Dividends declared and approved -18,256 -18,256 Comprehensive income Net income 111,724 111,724 Net unrealized holding gains on available-for-sale securities 73 73 Pension liability adjustment 970 970 Net unrealized losses on derivative instruments -185 -185 Cumulative translation adjustments 24,774 24,774 - ----------------------------------------------------------------------------------------------------------------------------- Total comprehensive income 137,356 ============================================================================================================================= Adjustment to initially apply SFAS No.158 -2,733 -2,733 Net changes in treasury stock 761 761 - ----------------------------------------------------------------------------------------------------------------------------- Ending balance 135,364 186,454 752,398 26,998 -30,301 1,070,913 =============================================================================================================================
Year ended March 31, 2008
(Millions of yen) - ----------------------------------------------------------------------------------------------------------------------------- Accumulated other Additional comprehensive Total Common paid-in Retained income Treasury Shareholders' stock capital earnings (loss) stock Investment - ----------------------------------------------------------------------------------------------------------------------------- Beginning balance 135,364 186,454 752,398 26,998 -30,301 1,070,913 Cumulative effect of adjustment resulted from applying EITF No.06-2 -- -- -995 -- -- -995 - ----------------------------------------------------------------------------------------------------------------------------- Beginning balance (after adjustment) 135,364 186,454 751,403 26,998 -30,301 1,069,918 - ----------------------------------------------------------------------------------------------------------------------------- Gain (Loss) on disposal of treasury stock -6 -6 Dividends declared and approved -22,628 -22,628 Comprehensive income Net income 106,463 106,463 Net unrealized holding losses on available-for-sale securities -7,685 -7,685 Pension liability adjustment -11,382 -11,382 Net unrealized losses on derivative instruments -380 -380 Cumulative translation adjustments -38,556 -38,556 - ----------------------------------------------------------------------------------------------------------------------------- Total comprehensive income 48,460 ============================================================================================================================= Net changes in treasury stock -15,548 -15,548 - ----------------------------------------------------------------------------------------------------------------------------- Ending balance 135,364 186,448 835,238 -31,005 -45,849 1,080,196 =============================================================================================================================
22 (5) CONSOLIDATED STATEMENTS OF CASH FLOWS (Year ended March 31, 2007 and 2008)
(Millions of yen) - ------------------------------------------------------------------------------------------------------------ Year ended Year ended March 31, 2007 March 31, 2008 - ------------------------------------------------------------------------------------------------------------ I. Cash Flows from Operating Activities: Net income 111,724 106,463 Income from discontinued operations, net of tax -5,500 -- - ------------------------------------------------------------------------------------------------------------ Income from continuing operations 106,224 106,463 Adjustments to reconcile net income to net cash provided by operating activities-- Depreciation and amortization 89,632 95,788 Equity in earnings of affiliates, net of dividends received -711 -622 Deferred income taxes -2,197 4,970 Loss on disposal and sales of tangible fixed assets 3,722 2,174 Pension and severance costs, less payments -773 -320 Changes in assets and liabilities-- Increase in trade receivables -15,919 -16,567 (Increase) Decrease in inventories -1,494 129 Increase in finance receivables -28,047 -17,183 (Decrease) Increase in trade payables 2,199 -7,491 Increase in accrued income taxes and accrued expenses and other 11,175 5,216 Other, net 3,486 21,806 - ------------------------------------------------------------------------------------------------------------ Net cash provided by operating activities 167,297 194,363 - ------------------------------------------------------------------------------------------------------------ II. Cash Flows from Investing Activities: Proceeds from sales of property, plant and equipment 463 1,194 Expenditures for tangible fixed assets -85,747 -85,205 Payments for purchases of available-for-sale securities -97,158 -97,958 Proceeds from sales of available-for-sale securities 96,087 100,025 (Increase) Decrease in time deposits, net 64 -240 Proceeds from sales of discontinued operation 12,000 -- Purchase of business, net of cash acquired -23,200 -96,796 Other, net -17,941 -19,370 - ------------------------------------------------------------------------------------------------------------ Net cash used in investing activities -115,432 -198,350 - ------------------------------------------------------------------------------------------------------------ III. Cash Flows from Financing Activities: Proceeds from long-term indebtedness 60,157 67,166 Repayment of long-term indebtedness -49,115 -75,716 Increase in short-term borrowings, net 8,362 -14,598 Proceeds from issuance of long-term debt securities 65,274 -- Repayment of long-term debt securities -55,000 -10,000 Dividend paid -18,240 -22,628 Payment for purchase of treasury stock -799 -15,770 Other, net -1,357 -639 - ------------------------------------------------------------------------------------------------------------ Net cash provided by (used in) financing activities 9,282 -72,185 - ------------------------------------------------------------------------------------------------------------ IV. Net Increase in Cash and Cash Equivalents from discontinued operations 825 -- - ------------------------------------------------------------------------------------------------------------ V. Effect of Exchange Rate Changes on Cash and Cash Equivalents 6,710 -8,958 - ------------------------------------------------------------------------------------------------------------ VI. Net Increase (Decrease) in Cash and Cash Equivalents 68,682 -85,130 - ------------------------------------------------------------------------------------------------------------ VII. Cash and Cash Equivalents at Beginning of Year 187,055 255,737 - ------------------------------------------------------------------------------------------------------------ VIII. Cash and Cash Equivalents at End of Year 255,737 170,607 - ------------------------------------------------------------------------------------------------------------
23 (6) SIGNIFICANT ACCOUNTING POLICIES (CONSOLIDATED) A) CHANGES IN THE SCALE OF CONSOLIDATION AND THE APPLICATION OF THE EQUITY METHOD FROM APRIL 1, 2007 TO MARCH 31, 2008. Consolidated subsidiaries: 34 Additions 35 Removals Companies accounted for by the equity method: 4 Removals B) CONSOLIDATED ACCOUNTING POLICIES (SUMMARY) a. Principles of Consolidation The consolidated financial statements include the accounts of Ricoh and its consolidated subsidiaries. Investments in 20% to 50% owned companies when the Company has the ability to exercise significant influence are accounted for on the equity basis. All significant inter-company balances and transactions have been eliminated in consolidation. b. Securities In conformity with SFAS No.115, securities are mainly classified as available-for-sale securities. Available-for-sale securities are reported at fair value with unrealized gains and losses, net of related taxes, excluded from earnings and reported in accumulated other comprehensive income (loss). The cost of the securities sold is computed based on the average cost of each security held at the time of sale. c. Inventories Inventories are mainly stated at the lower of average cost or market. Inventory costs include raw materials, labor and manufacturing overheads. d. Plant and Equipment Depreciation of plant and equipment is computed principally by using the declining-balance method over the estimated useful lives. Most of the foreign subsidiaries have adopted the straight-line method for computing depreciation. Certain leased buildings, machinery and equipment are accounted for as capital leases in conformity with SFAS No.13, "Accounting for Leases." e. Goodwill and Other Intangible Assets In conformity with SFAS No.142, Goodwill and intangible asset determined to have an indefinite useful life are not amortized. SFAS No.142 requires annual impairment testing thereof. f. Pension and Retirement Allowances Plans The measurement of pension costs and liabilities is determined in accordance with SFAS No.87, "Employers' Accounting for Pensions" and SFAS No.158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans." g. Use of Estimates Management of the Company has made a number of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, including impairment losses of long-lived assets and the disclosures of fair value of financial instruments and contingent assets and liabilities, to prepare these financial statements in conformity with accounting principles ?enerally accepted in the United States of America. Actual results could differ from those estimates. 24 (7) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES (CONSOLIDATED) In June 2006, the FASB ratified the EITF consensus on EITF Issue No.06-2, "Accounting for sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement No.43". Accordingly, Ricoh recorded an increase in accrued expenses of Yen 1,680 million as of April 1, 2007, with a reduction of the beginning balance of retained earnings of Yen 995 millon. 25 (8) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A) SEGMENT INFORMATION a. Operating Segment Information (Three months ended March 31, 2007 and 2008)
(Millions of yen) - ------------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2007 March 31, 2008 Change % - ------------------------------------------------------------------------------------------------------------------- OFFICE SOLUTIONS: Net sales: Unaffiliated customers 501,062 506,298 5,236 1.0 Intersegment -- -- -- -- Total 501,062 506,298 5,236 1.0 - ------------------------------------------------------------------------------------------------------------------- Operating expenses 436,247 445,872 9,625 2.2 - ------------------------------------------------------------------------------------------------------------------- Operating income 64,815 60,426 -4,389 -6.8 Operating income on sales in Office Solutions (%) 12.9 11.9 - ------------------------------------------------------------------------------------------------------------------- INDUSTRIAL PRODUCTS: Net sales: Unaffiliated customers 34,561 32,591 -1,970 -5.7 Intersegment 1,087 1,095 8 0.7 Total 35,648 33,686 -1,962 -5.5 - ------------------------------------------------------------------------------------------------------------------- Operating expenses 34,215 33,569 -646 -1.9 - ------------------------------------------------------------------------------------------------------------------- Operating income 1,433 117 -1,316 -91.8 Operating income on sales in Industrial Products (%) 4.0 0.3 - ------------------------------------------------------------------------------------------------------------------- OTHER: Net sales: Unaffiliated customers 40,668 40,688 20 0.0 Intersegment -- -- -- -- Total 40,668 40,688 20 0.0 - ------------------------------------------------------------------------------------------------------------------- Operating expenses 40,620 39,604 -1,016 -2.5 - ------------------------------------------------------------------------------------------------------------------- Operating income 48 1,084 1,036 -- Operating income on sales in Other (%) 0.1 2.7 - ------------------------------------------------------------------------------------------------------------------- CORPORATE AND ELIMINATIONS: Net sales: Intersegment -1,087 -1,095 -8 -- Total -1,087 -1,095 -8 -- - ------------------------------------------------------------------------------------------------------------------- Operating expenses: Intersegment -1,089 -1,096 -7 -- Corporate 13,733 14,142 409 -- Total 12,644 13,046 402 -- - ------------------------------------------------------------------------------------------------------------------- Operating income -13,731 -14,141 -410 -- - ------------------------------------------------------------------------------------------------------------------- CONSOLIDATED: Net sales: Unaffiliated customers 576,291 579,577 3,286 0.6 Intersegment -- -- -- -- Total 576,291 579,577 3,286 0.6 - ------------------------------------------------------------------------------------------------------------------- Operating expenses 523,726 532,091 8,365 1.6 - ------------------------------------------------------------------------------------------------------------------- Operating income 52,565 47,486 -5,079 -9.7 Operating income on consolidated net sales (%) 9.1 8.2 - -------------------------------------------------------------------------------------------------------------------
Capital expenditures:
(Millions of yen) - ------------------------------------------------------------------------------------------------------------------ Three months ended Three months ended March 31, 2007 March 31, 2008 Change % - ------------------------------------------------------------------------------------------------------------------ Office Solutions 23,315 25,401 2,086 8.9 Industrial Products 3,842 682 -3,160 -82.2 Other 904 544 -360 -39.8 Corporate 927 738 -189 -20.4 - ------------------------------------------------------------------------------------------------------------------ Total 28,988 27,365 -1,623 -5.6 ==================================================================================================================
Depreciation:
(Millions of yen) - ------------------------------------------------------------------------------------------------------------------ Three months ended Three months ended March 31, 2007 March 31, 2008 Change % - ------------------------------------------------------------------------------------------------------------------ Office Solutions 17,502 16,897 -605 -3.5 Industrial Products 1,886 1,123 -763 -40.5 Other 585 344 -241 -41.2 Corporate 430 278 -152 -35.3 - ------------------------------------------------------------------------------------------------------------------ Total 20,403 18,642 -1,761 -8.6 ==================================================================================================================
Identifiable assets:
(Millions of yen) - -------------------------------------------------------------------------------------------------------------- March 31, 2007 March 31, 2008 Change % - -------------------------------------------------------------------------------------------------------------- Office Solutions 1,570,757 1,643,500 72,743 4.6 Industrial Products 93,346 91,635 -1,711 -1.8 Other 112,255 106,233 -6,022 -5.4 Eliminations -1,327 -1,063 264 -- Corporate assets 468,375 374,063 -94,312 -20.1 - -------------------------------------------------------------------------------------------------------------- Total 2,243,406 2,214,368 -29,038 -1.3 ==============================================================================================================
26 (Year ended March 31, 2007 and 2008)
(Millions of yen) - ---------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 Change % - ---------------------------------------------------------------------------------------------------------- OFFICE SOLUTIONS: Net sales: Unaffiliated customers 1,774,467 1,909,573 135,106 7.6 Intersegment -- -- -- -- Total 1,774,467 1,909,573 135,106 7.6 - ---------------------------------------------------------------------------------------------------------- Operating expenses 1,549,156 1,674,940 125,784 8.1 - ---------------------------------------------------------------------------------------------------------- Operating income 225,311 234,633 9,322 4.1 Operating income on sales in Office Solutions (%) 12.7 12.3 - ---------------------------------------------------------------------------------------------------------- INDUSTRIAL PRODUCTS: Net sales: Unaffiliated customers 133,387 144,340 10,953 8.2 Intersegment 4,725 4,543 -182 -3.9 Total 138,112 148,883 10,771 7.8 - ---------------------------------------------------------------------------------------------------------- Operating expenses 135,164 144,708 9,544 7.1 - ---------------------------------------------------------------------------------------------------------- Operating income 2,948 4,175 1,227 41.6 Operating income on sales in Industrial Products (%) 2.1 2.8 - ---------------------------------------------------------------------------------------------------------- OTHER: Net sales: Unaffiliated customers 161,071 166,076 5,005 3.1 Intersegment -- -- -- -- Total 161,071 166,076 5,005 3.1 - ---------------------------------------------------------------------------------------------------------- Operating expenses 158,868 163,529 4,661 2.9 - ---------------------------------------------------------------------------------------------------------- Operating income 2,203 2,547 344 15.6 Operating income on sales in Other (%) 1.4 1.5 - ---------------------------------------------------------------------------------------------------------- CORPORATE AND ELIMINATIONS: Net sales: Intersegment -4,725 -4,543 182 -- Total -4,725 -4,543 182 -- - ---------------------------------------------------------------------------------------------------------- Operating expenses: Intersegment -4,727 -4,545 182 -- Corporate 56,084 59,851 3,767 -- Total 51,357 55,306 3,949 -- - ---------------------------------------------------------------------------------------------------------- Operating income -56,082 -59,849 -3,767 -- - ---------------------------------------------------------------------------------------------------------- CONSOLIDATED: Net sales: Unaffiliated customers 2,068,925 2,219,989 151,064 7.3 Intersegment -- -- -- -- Total 2,068,925 2,219,989 151,064 7.3 - ---------------------------------------------------------------------------------------------------------- Operating expenses 1,894,545 2,038,483 143,938 7.6 - ---------------------------------------------------------------------------------------------------------- Operating income 174,380 181,506 7,126 4.1 Operating income on consolidated net sales (%) 8.4 8.2 - ----------------------------------------------------------------------------------------------------------
Capital expenditures:
(Millions of yen) - ---------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 Change % - ---------------------------------------------------------------------------------------------------------- Office Solutions 72,465 74,758 2,293 3.2 Industrial Products 8,580 6,503 -2,077 -24.2 Other 2,630 2,140 -490 -18.6 Corporate 2,125 1,814 -311 -14.6 - ---------------------------------------------------------------------------------------------------------- Total 85,800 85,215 -585 -0.7 ==========================================================================================================
Depreciation:
(Millions of yen) - ---------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 Change % - ---------------------------------------------------------------------------------------------------------- Office Solutions 62,862 63,162 300 0.5 Industrial Products 6,099 5,820 -279 -4.6 Other 2,072 2,128 56 2.7 Corporate 1,399 1,652 253 18.1 - ---------------------------------------------------------------------------------------------------------- Total 72,432 72,762 330 0.5 ==========================================================================================================
Identifiable assets:
(Millions of yen) - ---------------------------------------------------------------------------------------------------------- March 31, 2007 March 31, 2008 Change % - ---------------------------------------------------------------------------------------------------------- Office Solutions 1,570,757 1,643,500 72,743 4.6 Industrial Products 93,346 91,635 -1,711 -1.8 Other 112,255 106,233 -6,022 -5.4 Eliminations -1,327 -1,063 264 -- Corporate assets 468,375 374,063 -94,312 -20.1 - ---------------------------------------------------------------------------------------------------------- Total 2,243,406 2,214,368 -29,038 -1.3 ==========================================================================================================
27 b. Geographic Segment Information (Three months ended March 31, 2007 and 2008)
(Millions of yen) - -------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2007 March 31, 2008 Change % - -------------------------------------------------------------------------------------------------------------- JAPAN: Net sales: External customers 278,995 275,769 -3,226 -1.2 Intersegment 116,642 108,475 -8,167 -7.0 Total 395,637 384,244 -11,393 -2.9 - -------------------------------------------------------------------------------------------------------------- Operating expenses 369,936 360,563 -9,373 -2.5 - -------------------------------------------------------------------------------------------------------------- Operating income 25,701 23,681 -2,020 -7.9 Operating income on sales in Japan(%) 6.5 6.2 - -------------------------------------------------------------------------------------------------------------- THE AMERICAS: Net sales: External customers 116,831 111,005 -5,826 -5.0 Intersegment 727 769 42 5.8 Total 117,558 111,774 -5,784 -4.9 - -------------------------------------------------------------------------------------------------------------- Operating expenses 108,975 114,675 5,700 5.2 - -------------------------------------------------------------------------------------------------------------- Operating income 8,583 (2,901) -11,484 -- Operating income on sales in the Americas(%) 7.3 -2.6 - -------------------------------------------------------------------------------------------------------------- EUROPE: Net sales: External customers 151,335 157,676 6,341 4.2 Intersegment 489 219 -270 -55.2 Total 151,824 157,895 6,071 4.0 - -------------------------------------------------------------------------------------------------------------- Operating expenses 136,822 146,072 9,250 6.8 - -------------------------------------------------------------------------------------------------------------- Operating income 15,002 11,823 -3,179 -21.2 Operating income on sales in Europe(%) 9.9 7.5 - -------------------------------------------------------------------------------------------------------------- OTHER: Net sales: External customers 29,130 35,127 5,997 20.6 Intersegment 45,745 48,855 3,110 6.8 Total 74,875 83,982 9,107 12.2 - -------------------------------------------------------------------------------------------------------------- Operating expenses 71,099 76,829 5,730 8.1 - -------------------------------------------------------------------------------------------------------------- Operating income 3,776 7,153 3,377 89.4 Operating income on sales in Other(%) 5.0 8.5 - -------------------------------------------------------------------------------------------------------------- CORPORATE AND ELIMINATIONS: Net sales: Intersegment -163,603 -158,318 5,285 -- Total -163,603 -158,318 5,285 -- - -------------------------------------------------------------------------------------------------------------- Operating expenses: -163,106 -166,048 -2,942 -- - -------------------------------------------------------------------------------------------------------------- Operating income -497 7,730 8,227 -- - -------------------------------------------------------------------------------------------------------------- CONSOLIDATED: Net sales: External customers 576,291 579,577 3,286 0.6 Intersegment -- -- -- -- Total 576,291 579,577 3,286 0.6 - -------------------------------------------------------------------------------------------------------------- Operating expenses 523,726 532,091 8,365 1.6 - -------------------------------------------------------------------------------------------------------------- Operating income 52,565 47,486 -5,079 -9.7 Operating income on consolidated net sales(%) 9.1 8.2 - --------------------------------------------------------------------------------------------------------------
Identifiable assets:
(Millions of yen) - ------------------------------------------------------------------------------------------------------ March 31, 2007 March 31, 2008 Change % - ------------------------------------------------------------------------------------------------------ Japan 1,282,085 1,272,110 -9,975 -0.8 The Americas 256,049 310,028 53,979 21.1 Europe 314,815 326,824 12,009 3.8 Other 101,550 102,451 901 0.9 Eliminations -179,468 -171,108 8,360 -- Corporate assets 468,375 374,063 -94,312 -20.1 - ------------------------------------------------------------------------------------------------------ Total 2,243,406 2,214,368 -29,038 -1.3 ======================================================================================================
28 (Year ended March 31, 2007 and 2008)
(Millions of yen) - ------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 Change % - ------------------------------------------------------------------------------------------------------- JAPAN: Net sales: External customers 1,026,663 1,050,923 24,260 2.4 Intersegment 495,304 484,590 -10,714 -2.2 Total 1,521,967 1,535,513 13,546 0.9 - ------------------------------------------------------------------------------------------------------- Operating expenses 1,411,653 1,427,575 15,922 1.1 - ------------------------------------------------------------------------------------------------------- Operating income 110,314 107,938 -2,376 -2.2 Operating income on sales in Japan(%) 7.2 7.0 - ------------------------------------------------------------------------------------------------------- THE AMERICAS: Net sales: External customers 426,009 432,287 6,278 1.5 Intersegment 3,253 3,496 243 7.5 Total 429,262 435,783 6,521 1.5 - ------------------------------------------------------------------------------------------------------- Operating expenses 408,150 433,429 25,279 6.2 - ------------------------------------------------------------------------------------------------------- Operating income 21,112 2,354 -18,758 -88.8 Operating income on sales in the Americas(%) 4.9 0.5 - ------------------------------------------------------------------------------------------------------- EUROPE: Net sales: External customers 508,200 602,224 94,024 18.5 Intersegment 3,595 2,585 -1,010 -28.1 Total 511,795 604,809 93,014 18.2 - ------------------------------------------------------------------------------------------------------- Operating expenses 478,380 565,736 87,356 18.3 - ------------------------------------------------------------------------------------------------------- Operating income 33,415 39,073 5,658 16.9 Operating income on sales in Europe(%) 6.5 6.5 - ------------------------------------------------------------------------------------------------------- OTHER: Net sales: External customers 108,053 134,555 26,502 24.5 Intersegment 160,990 183,043 22,053 13.7 Total 269,043 317,598 48,555 18.0 - ------------------------------------------------------------------------------------------------------- Operating expenses 251,486 291,141 39,655 15.8 - ------------------------------------------------------------------------------------------------------- Operating income 17,557 26,457 8,900 50.7 Operating income on sales in Other(%) 6.5 8.3 - ------------------------------------------------------------------------------------------------------- CORPORATE AND ELIMINATIONS: Net sales: Intersegment -663,142 -673,714 -10,572 -- Total -663,142 -673,714 -10,572 -- - ------------------------------------------------------------------------------------------------------- Operating expenses: -655,124 -679,398 -24,274 -- - ------------------------------------------------------------------------------------------------------- Operating income -8,018 5,684 13,702 -- - ------------------------------------------------------------------------------------------------------- CONSOLIDATED: Net sales: External customers 2,068,925 2,219,989 151,064 7.3 Intersegment -- -- -- -- Total 2,068,925 2,219,989 151,064 7.3 - ------------------------------------------------------------------------------------------------------- Operating expenses 1,894,545 2,038,483 143,938 7.6 - ------------------------------------------------------------------------------------------------------- Operating income 174,380 181,506 7,126 4.1 Operating income on consolidated net sales(%) 8.4 8.2 - -------------------------------------------------------------------------------------------------------
Identifiable assets:
(Millions of yen) - ------------------------------------------------------------------------------------------------------- March 31, 2007 March 31, 2008 Change % - ------------------------------------------------------------------------------------------------------- Japan 1,282,085 1,272,110 -9,975 -0.8 The Americas 256,049 310,028 53,979 21.1 Europe 314,815 326,824 12,009 3.8 Other 101,550 102,451 901 0.9 Eliminations -179,468 -171,108 8,360 -- Corporate assets 468,375 374,063 -94,312 -20.1 - ------------------------------------------------------------------------------------------------------- Total 2,243,406 2,214,368 -29,038 -1.3 =======================================================================================================
29 B) FAIR VALUE OF MARKETABLE SECURITIES The securities and the respective cost, gross unrealized holding gains, gross unrealized holding losses and fair value as of March 31, 2007 and March 31, 2008 are as follows:
(Millions of yen) - ------------------------------------------------------------------------------------------------- March 31, 2007 - ------------------------------------------------------------------------------------------------- Gross unrealized Gross unrealized Cost holding gains holding losses Fair value - ------------------------------------------------------------------------------------------------- Current: Corporate debt securities 176 -- -- 176 Other 1 -- -- 1 - ------------------------------------------------------------------------------------------------- 177 -- -- 177 - ------------------------------------------------------------------------------------------------- Noncurrent: Equity securities 49,261 14,991 142 64,110 Corporate debt securities 6,000 10 -- 6,010 Other 242 -- -- 242 Nonmarketable securities (at cost) 4,474 -- -- 4,474 - ------------------------------------------------------------------------------------------------- 59,977 15,001 142 74,836 - -------------------------------------------------------------------------------------------------
(Millions of yen) - ------------------------------------------------------------------------------------------------- March 31, 2008 - ------------------------------------------------------------------------------------------------- Gross unrealized Gross unrealized Cost holding gains holding losses Fair value - ------------------------------------------------------------------------------------------------- Current: Corporate debt securities -- -- -- -- Other 0 -- -- 0 - ------------------------------------------------------------------------------------------------- 0 -- -- 0 - ------------------------------------------------------------------------------------------------- Noncurrent: Equity securities 62,208 6,231 3,723 64,716 Corporate debt securities 6,000 -- 754 5,246 Other -- -- -- -- Nonmarketable securities (at cost) 1,290 -- 8 1,282 - ------------------------------------------------------------------------------------------------- 69,498 6,231 4,485 71,244 - -------------------------------------------------------------------------------------------------
C) DERIVATIVES The Company and certain of its subsidiaries enter into various financial instrument contracts in the normal course of business and in connection with the management of their assets and liabilities. The outstanding agreements, carrying amount and estimated fair value of derivative financial instruments as of March 31, 2007 and March 31, 2008 are as follows: (Millions of yen) - -------------------------------------------------------------------------------- March 31, 2007 - -------------------------------------------------------------------------------- Carrying Estimated amount Fair value - -------------------------------------------------------------------------------- Interest rate swap agreements, net 751 751 Foreign currency contracts-net credit 633 633 Currency options-net credit -2 -2 - -------------------------------------------------------------------------------- Total 1,382 1,382 - -------------------------------------------------------------------------------- (Millions of yen) - -------------------------------------------------------------------------------- March 31, 2008 - -------------------------------------------------------------------------------- Carrying Estimated amount Fair value - -------------------------------------------------------------------------------- Interest rate swap agreements, net -594 -594 Foreign currency contracts-net credit 1,349 1,349 Currency options 100 100 - -------------------------------------------------------------------------------- Total 855 855 - -------------------------------------------------------------------------------- D) TRANSACTIONS OF RICOH WITH AFFILIATES (Millions of yen) - ----------------------------------------------------------------------- March 31, 2007 March 31, 2008 - ----------------------------------------------------------------------- Account balances: Receivables 3,541 3,080 Payables 2,611 1,930 - ----------------------------------------------------------------------- (Millions of yen) - ----------------------------------------------------------------------- Year ended Year ended March 31, 2007 March 31, 2008 - ----------------------------------------------------------------------- Transactions: Sales 16,158 20,184 Purchases 28,993 21,274 Dividend income 828 625 - ----------------------------------------------------------------------- 30 E) PER SHARE DATA (Yen) - -------------------------------------------------------------------------- March 31, 2007 March 31, 2008 - -------------------------------------------------------------------------- Shareholders' equity per share 1,467.03 1,498.29 Net income per share-basic 153.10 146.04 Net income per share-diluted 151.89 142.15 A reconciliation of the numerator and the denominators of the basic and diluted per share computations for income is as follows: (Millions of yen) - -------------------------------------------------------------------------- March 31, 2007 March 31, 2008 - -------------------------------------------------------------------------- Net income 111,724 106,463 Effect of dilutive securities -8 -25 - -------------------------------------------------------------------------- Diluted net income 111,716 106,438 - -------------------------------------------------------------------------- (Shares) - -------------------------------------------------------------------------- March 31, 2007 March 31, 2008 - -------------------------------------------------------------------------- Weight average common shares outstanding 729,744,656 729,010,475 Effect of dilutive securities 5,757,813 19,741,071 - -------------------------------------------------------------------------- Diluted common shares outstanding 735,502,469 748,751,546 - -------------------------------------------------------------------------- 31 - -APPENDIX- YEAR ENDED MARCH 31, 2008) 1. CONSOLIDATED QUARTERLY PERFORMANCE OUTLINE (1)Financial Statements Summary (Quarterly)
(Billions of yen) - ------------------------------------------------------------------------------------------------------------------------------ 1Q Change(%) 2Q Change(%) 3Q Change(%) 4Q Change(%) - ------------------------------------------------------------------------------------------------------------------------------ Net sales 530.1 9.4 558.2 11.1 552.0 9.2 579.5 0.6 Gross profit 228.7 12.9 222.4 8.3 237.4 8.2 239.0 1.7 Operating income 46.6 14.7 37.9 16.7 49.4 1.6 47.4 -9.7 Income before income taxes 53.2 37.6 31.7 -10.6 49.0 0.5 40.5 -21.1 Net income 33.8 16.2 19.3 -15.8 32.1 2.8 21.1 -25.5 - ------------------------------------------------------------------------------------------------------------------------------ Net income per share (yen) 46.38 -- 26.45 -- 44.01 -- 29.20 -- Net income per share-diluted (yen) 45.15 -- 25.75 -- 42.84 -- 28.41 -- - ------------------------------------------------------------------------------------------------------------------------------ Total assets 2,313.5 -- 2,299.8 -- 2,294.9 -- 2,214.3 -- Shareholders' investment 1,111.0 -- 1,114.5 -- 1,132.3 -- 1,080.1 -- - ------------------------------------------------------------------------------------------------------------------------------ Shareholders' investment per share (yen) 1,522.12 -- 1,527.18 -- 1,551.72 -- 1,498.29 -- - ------------------------------------------------------------------------------------------------------------------------------ Cash flows from operating activities 21.4 -- 57.4 -- 26.0 -- 89.5 -- Cash flows from investing activities -107.2 -- -29.8 -- -23.8 -- -37.4 -- Cash flows from financing activities -2.8 -- -4.3 -- -3.2 -- -61.6 -- Cash and cash equivalents at end of period 171.6 -- 190.1 -- 189.4 -- 170.6 -- - ------------------------------------------------------------------------------------------------------------------------------
(2) Capital expenditures and Depreciation
(Billions of yen) - ------------------------------------------------------------------------------------------------------------------- 1Q 2Q 3Q 4Q - ------------------------------------------------------------------------------------------------------------------- Capital expenditures 17.1 22.5 18.1 27.3 Depreciation for tangible fixed assets 16.8 18.8 18.4 18.6 - -------------------------------------------------------------------------------------------------------------------
(3) R&D Expenditures
(Billions of yen) - ------------------------------------------------------------------------------------------------------------------- 1Q 2Q 3Q 4Q - ------------------------------------------------------------------------------------------------------------------- R&D expenditures 27.2 34.3 32.0 32.4 R&D expenditures / Total Sales (%) 5.1 6.1 5.8 5.6 - -------------------------------------------------------------------------------------------------------------------
(4) Interest income (expenses) net
(Billions of yen) - ------------------------------------------------------------------------------------------------------------------- 1Q 2Q 3Q 4Q - ------------------------------------------------------------------------------------------------------------------- Interest income (expenses) net 0.1 0.2 0.6 0.4 - -------------------------------------------------------------------------------------------------------------------
(5) Exchange Rate
- ------------------------------------------------------------------------------------------------------------------- 1Q 2Q 3Q 4Q - ------------------------------------------------------------------------------------------------------------------- Exchange rate (Yen/US$) 120.77 117.98 113.24 105.60 Exchange rate (Yen/EURO) 162.72 162.00 163.96 158.06 - -------------------------------------------------------------------------------------------------------------------
A1 2. CONSOLIDATED SALES BY PRODUCT CATEGORY (Three months ended March 31, 2007 and 2008)
(Millions of yen) - -------------------------------------------------------------------------------------------------------------------- Three months ended Three months ended Change Change excluding March 31, 2007 March 31, 2008 % exchange impact % - -------------------------------------------------------------------------------------------------------------------- [Office Solutions] Imaging Solutions 442,138 447,786 5,648 1.3 17,184 3.9 Percentage of net sales (%) 76.7 77.3 Domestic 162,197 159,312 -2,885 -1.8 -2,885 -1.8 Overseas 279,941 288,474 8,533 3.0 20,069 7.2 Network System Solutions 58,924 58,512 -412 -0.7 -412 -0.7 Percentage of net sales (%) 10.2 10.1 Domestic 56,344 55,168 -1,176 -2.1 -1,176 -2.1 Overseas 2,580 3,344 764 29.6 764 29.6 Office Solutions Total 501,062 506,298 5,236 1.0 16,772 3.3 Percentage of net sales (%) 86.9 87.4 Domestic 218,541 214,480 -4,061 -1.9 -4,061 -1.9 Overseas 282,521 291,818 9,297 3.3 20,833 7.4 The Americas 112,411 105,750 -6,661 -5.9 5,771 5.1 Europe 142,930 152,773 9,843 6.9 8,110 5.7 Other 27,180 33,295 6,115 22.5 6,952 25.6 - -------------------------------------------------------------------------------------------------------------------- [Industrial Products] Industrial Products 34,561 32,591 -1,970 -5.7 -1,458 -4.2 Percentage of net sales (%) 6.0 5.6 Domestic 20,218 16,822 -3,396 -16.8 -3,396 -16.8 Overseas 14,343 15,769 1,426 9.9 1,938 13.5 The Americas 4,160 4,663 503 12.1 972 23.4 Europe 5,347 5,442 95 1.8 49 0.9 Other 4,836 5,664 828 17.1 917 19.0 - -------------------------------------------------------------------------------------------------------------------- [Other] Other 40,668 40,688 20 0.0 419 1.0 Percentage of net sales (%) 7.1 7.0 Domestic 34,184 35,641 1,457 4.3 1,457 4.3 Overseas 6,484 5,047 -1,437 -22.2 -1,038 -16.0 The Americas 513 433 -80 -15.6 -37 -7.2 Europe 2,579 1,359 -1,220 -47.3 -1,165 -45.2 Other 3,392 3,255 -137 -4.0 164 4.8 Grand Total 576,291 579,577 3,286 0.6 15,733 2.7 Percentage of net sales (%) 100.0 100.0 Domestic 272,943 266,943 -6,000 -2.2 -6,000 -2.2 Percentage of net sales (%) 47.4 46.1 Overseas 303,348 312,634 9,286 3.1 21,733 7.2 Percentage of net sales (%) 52.6 53.9 The Americas 117,084 110,846 -6,238 -5.3 6,706 5.7 Percentage of net sales (%) 20.3 19.1 Europe 150,856 159,574 8,718 5.8 6,994 4.6 Percentage of net sales (%) 26.2 27.5 Other 35,408 42,214 6,806 19.2 8,033 22.7 Percentage of net sales (%) 6.1 7.3 - -------------------------------------------------------------------------------------------------------------------- Reference: Exchange rate US$ 1 Yen 119.48 Yen 105.60 Yen -13.88 EURO 1 Yen 156.52 Yen 158.06 Yen 1.54
Each category includes the following product line: Imaging Solutions Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Network System Solutions Personal computers, PC servers, network systems and network related software Industrial Products Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Other Optical discs and digital camera A2 (Year ended March 31, 2007 and 2008)
(Millions of yen) - ------------------------------------------------------------------------------------------------------------- Year ended Year ended Change excluding March 31, 2007 March 31, 2008 Change % exchange impact % - ------------------------------------------------------------------------------------------------------------- [Office Solutions] Imaging Solutions 1,580,155 1,709,491 129,336 8.2 93,238 5.9 Percentage of net sales (%) 76.4 77.0 Domestic 604,059 608,913 4,854 0.8 4,854 0.8 Overseas 976,096 1,100,578 124,482 12.8 88,384 9.1 Network System Solutions 194,312 200,082 5,770 3.0 4,925 2.5 Percentage of net sales (%) 9.4 9.0 Domestic 184,672 188,141 3,469 1.9 3,469 1.9 Overseas 9,640 11,941 2,301 23.9 1,456 15.1 Office Solutions Total 1,774,467 1,909,573 135,106 7.6 98,163 5.5 Percentage of net sales (%) 85.8 86.0 Domestic 788,731 797,054 8,323 1.1 8,323 1.1 Overseas 985,736 1,112,519 126,783 12.9 89,840 9.1 The Americas 405,457 416,446 10,989 2.7 20,498 5.1 Europe 479,859 571,481 91,622 19.1 52,147 10.9 Other 100,420 124,592 24,172 24.1 17,195 17.1 - ------------------------------------------------------------------------------------------------------------- [Industrial Products] Industrial Products 133,387 144,340 10,953 8.2 9,822 7.4 Percentage of net sales (%) 6.4 6.5 Domestic 76,202 78,212 2,010 2.6 2,010 2.6 Overseas 57,185 66,128 8,943 15.6 7,812 13.7 The Americas 19,388 16,159 -3,229 -16.7 -2,867 -14.8 Europe 19,378 22,425 3,047 15.7 1,780 9.2 Other 18,419 27,544 9,125 49.5 8,899 48.3 - ------------------------------------------------------------------------------------------------------------- [Other] Other 161,071 166,076 5,005 3.1 4,469 2.8 Percentage of net sales (%) 7.8 7.5 Domestic 137,318 140,768 3,450 2.5 3,450 2.5 Overseas 23,753 25,308 1,555 6.5 1,019 4.3 The Americas 1,608 2,194 586 36.4 619 38.5 Europe 7,921 9,313 1,392 17.6 760 9.6 Other 14,224 13,801 -423 -3.0 -360 -2.5 - ------------------------------------------------------------------------------------------------------------- Grand Total 2,068,925 2,219,989 151,064 7.3 112,454 5.4 Percentage of net sales (%) 100.0 100.0 Domestic 1,002,251 1,016,034 13,783 1.4 13,783 1.4 Percentage of net sales (%) 48.4 45.8 Overseas 1,066,674 1,203,955 137,281 12.9 98,671 9.3 Percentage of net sales (%) 51.6 54.2 The Americas 426,453 434,799 8,346 2.0 18,250 4.3 Percentage of net sales (%) 20.6 19.6 Europe 507,158 603,219 96,061 18.9 54,687 10.8 Percentage of net sales (%) 24.5 27.2 Other 133,063 165,937 32,874 24.7 25,734 19.3 Percentage of net sales (%) 6.5 7.4 - ------------------------------------------------------------------------------------------------------------- Reference: Exchange rate US$ 1 Yen 117.02 Yen 114.40 Yen -2.62 EURO 1 Yen 150.08 Yen 161.69 Yen 11.61
Each category includes the following product line: Imaging Solutions Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Network System Solutions Personal computers, PC servers, network systems and network related software Industrial Products Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Other Optical discs and digital camera A3 3. FORECAST OF CONSOLIDATED SALES BY PRODUCT CATEGORY
(Billions of yen) - --------------------------------------------------------------------------------------------------------- Year ending March 31, 2009 Half year ending September 30, 2008 - --------------------------------------------------------------------------------------------------------- Change Change Change Change Forecast % Forecast(*) % Forecast % Forecast(*) % - --------------------------------------------------------------------------------------------------------- [Office Solutions] Imaging Solutions 1,751.5 2.5 1,813.5 6.1 847.9 2.5 889.3 7.5 Domestic 627.6 3.1 627.6 3.1 308.3 3.9 308.3 3.9 Overseas 1,123.9 2.1 1,185.9 7.8 539.6 1.7 581.0 9.5 Network System Solutions 205.0 2.5 205.1 2.5 100.4 3.3 100.5 3.4 Domestic 192.6 2.4 192.6 2.4 94.6 3.2 94.6 3.2 Overseas 12.4 3.8 12.5 4.7 5.8 3.5 5.9 5.3 Office Solutions Total 1,956.5 2.5 2,018.6 5.7 948.3 2.6 989.8 7.0 Domestic 820.2 2.9 820.2 2.9 402.9 3.8 402.9 3.8 Overseas 1,136.3 2.1 1,198.4 7.7 545.4 1.7 586.9 9.4 The Americas 395.9 -4.9 452.2 8.6 195.3 -5.3 232.9 12.9 Europe 600.5 5.1 606.3 6.1 282.9 4.2 286.8 5.6 Other 139.9 12.3 139.9 12.3 67.2 15.0 67.2 15.0 - --------------------------------------------------------------------------------------------------------- [Industrial Products] Industrial Products 143.5 -0.6 145.7 0.9 70.4 -9.1 71.9 -7.2 Domestic 79.8 2.0 79.8 2.0 39.8 -10.1 39.8 -10.1 Overseas 63.7 -3.7 65.9 -0.3 30.6 -7.9 32.1 -3.4 The Americas 13.9 -14.0 15.9 -1.6 6.9 -13.9 8.2 2.3 Europe 20.3 -9.5 20.5 -8.6 10.0 -13.2 10.2 -11.5 Other 29.5 7.1 29.5 7.1 13.7 0.1 13.7 0.1 - --------------------------------------------------------------------------------------------------------- [Other] Other 160.0 -3.7 160.0 -3.7 81.3 -5.8 81.3 -5.8 Domestic 138.0 -2.0 138.0 -2.0 70.3 -2.2 70.3 -2.2 Overseas 22.0 -13.1 22.0 -13.1 11.0 -23.4 11.0 -23.4 The Americas 1.2 -45.3 1.2 -45.3 0.6 -57.0 0.6 -57.0 Europe 7.2 -22.7 7.2 -22.7 3.7 -38.1 3.7 -38.1 Other 13.6 -1.5 13.6 -1.5 6.7 -4.1 6.7 -4.1 - --------------------------------------------------------------------------------------------------------- Grand Total 2,260.0 1.8 2,324.3 4.7 1,100.0 1.1 1,143.0 5.0 Domestic 1,038.0 2.2 1,038.0 2.2 513.0 1.7 513.0 1.7 Overseas 1,222.0 1.5 1,286.3 6.8 587.0 0.5 630.0 7.9 The Americas 411.0 -5.5 469.3 7.9 202.8 -6.0 241.7 12.1 Europe 628.0 4.1 634.0 5.1 296.6 2.6 300.7 4.0 Other 183.0 10.3 183.0 10.3 87.6 10.7 87.6 10.7 - ---------------------------------------------------------------------------------------------------------
* Excluding foreign exchange impact Reference: Year ending Mar. 31, '09 Half year ending Sept. 30, '08 Exchange rate (Forecast) (Forecast) - ------------------------------------------------------------------------- US$ 1 Yen 100.00 Yen 100.00 EURO 1 Yen 160.00 Yen 160.00 Each category includes the following product line: Imaging Solutions Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Network System Solutions Personal computers, PC servers, network systems and network related software Industrial Products Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Other Optical discs and digital camera A4 - -APPENDIX B- [Schedule 1] Consolidated performance
Year ended Year ended Year ended March 31, 2006 March 31, 2007 March 31, 2008 - --------------------------------------------------------------------------------------- Net sales 1,909.2 2,068.9 2,219.9 Net income 97.0 111.7 106.4 Return on equity 10.6 11.0 9.9 Return on assets 7.6 8.1 7.8 Net income per share 132.33 153.10 146.04
[Schedule 2] Consolidated sales by product line
Year ended Year ended Year ended March 31, 2006 March 31, 2007 March 31, 2008 - --------------------------------------------------------------------------------------- Imaging Solution Business 1,446.6 1,580.1 1,709.4 Network System Solution Business 190.5 194.3 200.0 Industry Business 120.6 133.3 144.3 Other Business 151.3 161.0 166.0 - --------------------------------------------------------------------------------------- Imaging Solution Business (%) 75.8 76.4 77.0 Network System Solution Business (%) 10.0 9.4 9.0 Industry Business (%) 6.3 6.4 6.5 Other Business (%) 7.9 7.8 7.5 100.0 100.0 100.0 - ---------------------------------------------------------------------------------------
[Schedule 3] Consolidated sales by geographic area
Year ended Year ended Year ended March 31, 2006 March 31, 2007 March 31, 2008 - --------------------------------------------------------------------------------------- Japan 966.2 1,002.2 1,016.0 The Americas 387.4 426.4 434.7 Europe 434.8 507.1 603.2 Others 120.8 133.0 165.9 - --------------------------------------------------------------------------------------- Japan (%) 50.6 48.4 45.8 The Americas (%) 20.3 20.6 19.6 Europe (%) 22.8 24.5 27.2 Others (%) 6.3 6.5 7.4 Total 100.0 100.0 100.0 - ---------------------------------------------------------------------------------------
[Schedule 4] Geographic Segment Information
Year ended Year ended Year ended Japan March 31, 2006 March 31, 2007 March 31, 2008 - --------------------------------------------------------------------------------------- Net sales (Billions of yen) 1,406.0 1,521.9 1,535.5 Operating income (Billions of yen) 95.7 110.3 107.9 Operating income on net sales (%) 6.8 7.2 7.0
Year ended Year ended Year ended The Americas March 31, 2006 March 31, 2007 March 31, 2008 - --------------------------------------------------------------------------------------- Net sales (Billions of yen) 393.3 429.2 435.7 Operating income (Billions of yen) 15.2 21.1 2.3 Operating income on net sales (%) 3.9 4.9 0.5
Year ended Year ended Year ended Europe March 31, 2006 March 31, 2007 March 31, 2008 - --------------------------------------------------------------------------------------- Net sales (Billions of yen) 438.7 511.7 604.8 Operating income (Billions of yen) 21.4 33.4 39.0 Operating income on net sales (%) 4.9 6.5 6.5
Year ended Year ended Year ended Others March 31, 2006 March 31, 2007 March 31, 2008 - --------------------------------------------------------------------------------------- Net sales 200.2 269.0 317.5 Operating income 15.0 17.5 26.4 Operating income on net sales 7.5 6.5 8.3
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