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 user 2005-03-15 at 9:48:00 am Views: 121
  • #10871

    Ricoh targets 60% operating profit jump in 3 years

    TOKYO, March 05 – Japan’s Ricoh Co. Ltd. said on
    Tuesday it aimed to raise operating profit by about 60 percent over the next
    three years by expanding sales of advanced copiers and boosting its presence in
    the printer market.

    But Ricoh, the world’s third-largest copier maker after
    Canon Inc. and Xerox, suggested any profit rise would be modest in the next
    business year from April 1 as it invests heavily in research and development to
    drive future growth.

    Unveiling a new business plan, Ricoh said it would aim for
    a group operating profit of 235 billion yen ($2.24 billion) and sales of 2.3
    trillion yen in the year to March 2008, up from its estimates for 147 billion
    yen and 1.82 trillion yen this year.

    “It is not OK to simply make products or solutions that are
    on par with those of our competitors. We have to come up with new features and
    offer new value, and that requires placing a great importance on technological
    development,” Ricoh President Masamitsu Sakurai told a meeting of analysts and

    “We expect fiscal 2005 (year to March 2006) to be a year of
    investment within our medium-term business plan. I see the real contribution to
    profit coming in 2006 and 2007,” Sakurai said.

    Ricoh plans to expand sales of colour multi-function
    printers (MFPs), which are often referred to as office copiers because they can
    copy and scan. MFPs generate a steady revenue stream from toner long after the
    sale of the machine.

    The plan also calls for increasing sales of laser printers,
    a segment of the market where Ricoh has lagged behind its rivals, and a new type
    of ink printer called “geljet” that uses proprietary technology and was
    developed to tap office demand.

    Inkjet printers by Canon and Seiko Epson Corp. are almost
    exclusively sold to consumers for use in the home.


    Ricoh is also hoping to increase its share of the market
    for high-speed printers, helped by its acquisition last year of the printer
    operations of Hitachi Ltd., which was particularly strong in large
    print-on-demand systems.

    But some analysts questioned whether Ricoh’s 2007/08 sales
    target was realistic considering the highly competitive nature of the office
    equipment market. The 2.3 trillion yen forecast represents annual revenue growth
    of 8.4 percent.

    In addition to beefing up its lineup of copiers and
    printers, Sakurai said robust demand for its optical units used in projectors
    and rear projection televisions would help propel group sales.

    Sakurai was also asked to explain why Ricoh would fall
    short of its target for sales of 2 trillion yen in 2004/05 under its previous
    medium-term business plan.

    “The main reason was severe competition in our core office
    equipment business,” Sakurai said.

    Ricoh expects group operating profit to drop 2 percent in
    2004/05, hit by heavy promotion costs for new colour copiers, restructuring
    expenses for pulling out of the optical disc drive and components business, and
    sluggish sales of chips.

    On a net basis, Ricoh is aiming for a profit of 137 billion
    yen in 2007/08, compared with its forecast for 85 billion yen in 2004/05. It
    plans to boost return on assets to 11 percent in 2007/08 from 7.4 percent this
    financial year.

    The company also unveiled plans to buy back about 60
    billion yen worth of its own shares in the three years through March 2008,
    aiming to boost shareholder value. Ricoh said it would buy roughly 20 billion
    yen each year.

    Sakurai said he would like to lift Ricoh’s dividend payout
    ratio to above 20 percent by 2007/08, compared with about 17 percent now.

    According to research firm Gartner Dataquest, Ricoh held
    12.0 percent of the $26.4 billion worldwide copier market in 2003, behind Xerox
    at 14.3 percent and Canon at 24.6 percent. Sharp Corp. was fourth with a 6.6
    percent share.

    Shares of Ricoh ended down 0.05 percent at 1,913 yen. The
    benchmark Nikkei average fell 0.25 percent.