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AnonymousInactivehttp://uk.reuters.com/article/idUKTOE62B00M20100312
CAN RICOH QUADRUPLE MARGIN IN 5 YEARS
?
TOKYO, March 2010- Japan’s Ricoh said it aims to
more than quadruple its operating profit margin to 10 percent in five
years as the world’s No.1 copier maker focuses on new businesses with
growth potential such as digital commercial printers.Ricoh,
which also targets a return on equity of 12 percent in five years in
comparison with 1.6 percent now, has suffered a profit tumble following
the global downturn as corporate clients slashed spending on copiers and
printers.A global trend to reduce paper consumption out of growing
concerns over the environment is also casting a shadow over the
prospects for office machine demand.”We have a rough image for the next
five years, where our conventional businesses might not grow that much,
but our new businesses including production printing will hopefully
double,” Ricoh CFO Zenji Miura told a business strategy briefing.Production
printers, or digital commercial printers, are used to print large
documents such as product manuals and direct mail items quickly and in
bulk, and are a fast-growing segment of the global office equipment
market.Of Ricoh’s total annual revenues of 2 trillion yen ($22 billion),
traditional operations including regular printers and copiers account
for 1.7 trillion yen, while new businesses such as digital commercial
printers and IT services make up the rest.Ricoh, which competes
with Canon Inc , Xerox Corp and Konica Minolta Holdings Inc , bought
International Business Machines Corp’s digital commercial printing
operations for $725 million in 2007.”We are fighting a difficult fight
to get our (production printing) machines installed,” Ricoh Chief
Executive Shiro Kondo said. “But those efforts will start bearing fruit
slowly but steadily from the next business year on.”Kondo, a 37-year
company veteran, took Ricoh’s helm in 2007 as its first top executive
with an engineering background.Fresh out of college, he was
involved in the development of an advanced facsimile, which was dubbed
then the world’s first high-speed office fax machine, and later
sprearheaded the development of Ricoh’s first digital copier for
overseas markets.An avid dealmaker on weekdays and the driving force
behind Ricoh’s purchase of IBM’s commercial printing operation and its
$1.6 billion acquisition in 2008 of U.S. office machine distributor Ikon
Office Solutions, Kondo is a devoted gardener at weekends.Following
the announcement, shares of Ricoh closed up 1.5 percent at 1,371 yen,
outperforming the Nikkei average .N225, which rose 0.8 percent.Ricoh
held a 21.2 percent share in the global copier market in 2009, ahead of
Xerox’s 20.1 percent and Canon’s 15.7 percent, according to data from
research firm Gartner.* Targeted 10 pct
margin compares with 2.3 pct for
2009/10
* Aims for ROE of 12 pct in 5 years vs 1.6 pct for 2009/10
* Sees sales from new businesses doubling in 5 years
* Shares close up 1.5 pct vs Nikkei’s 0.8 pct gain -
AuthorMarch 15, 2010 at 11:11 AM
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