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 October, 2003
Commission File Number 2 - 68279
RICOH COMPANY, LTD.
-----------------------------------------------
(Translation of Registrant's name into English)
15-5, Minami-Aoyama 1-Chome, Minato-ku, Tokyo 107-8544, Japan
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(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-__ )
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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.
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(Registrant)
By: /S/ Zenji Miura
------------------------------
Zenji Miura
Senior Vice President
General Manager of
Finance & Accounting Division
October 29, 2003
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[LOGO] RICOH
INTERIM REPORT
Half year ended September 30, 2003
(Results for the Period from April 1, 2003 to September 30, 2003)
Three months ended September 30, 2003
(Results for the Period from July 1, 2003 to September 30, 2003)
PERFORMANCE OUTLINE (CONSOLIDATED)
(1) Half year ended September 30, 2003, 2002 and Year ended March 31, 2004
(Forecast)
(Billions of yen)
--------------------------------------------------------------------------------------------- --------------- -------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2002 Change March 31, 2004 Change
(Results) (Results) (Forecast)
---------------------------------------------------------------- ---------------------------- --------------- -------------
Domestic sales 448.6 449.5 -0.2% 900.0 0.4%
Overseas sales 439.4 407.2 7.9% 900.0 6.8%
Net sales 888.0 856.8 3.6% 1,800.0 3.5%
Gross profit 388.1 360.6 7.6% 783.6 5.1%
Operating income 77.2 61.3 26.0% 152.0 13.7%
Income before income taxes 71.4 55.6 28.3% 144.0 16.6%
Net income 42.2 33.5 26.1% 85.0 17.2%
--------------------------------------------------------------------------------------------- -----------------------------
Exchange rate (Yen/US$) 118.06 123.08 -5.02 113.03 -8.93
Exchange rate (Yen/EURO) 133.47 116.95 16.52 130.74 9.74
--------------------------------------------------------------------------------------------- -----------------------------
Net income per share (yen) 56.79 46.11 10.68 114.42 14.63
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Total assets 1,912.1 1,826.3 85.7 - -
Shareholders' equity 703.0 663.6 39.4 - -
Interest-bearing debt 484.9 543.2 -58.3 - -
--------------------------------------------------------------------------------------------- -----------------------------
Equity ratio (%) 36.8 36.3 0.5 - -
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Shareholder's equity per share (yen) 946.38 912.98 33.40 - -
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Cash flows from operating activities 61.6 99.1 -37.4 - -
Cash flows from investing activities -19.9 -33.3 13.3 - -
Cash flows from financing activities -6.6 -16.5 9.9 - -
Cash and cash equivalents at end of period 225.0 217.4 7.5 - -
--------------------------------------------------------------------------------------------- -----------------------------
Capital expenditures 36.3 38.4 -2.0 75.0 1.0
Depreciation for tangible fixed assets 33.6 33.8 -0.2 70.0 0.4
R&D expenditures 44.2 40.2 4.0 90.0 6.4
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(2) Three months ended September 30, 2003 and 2002
(Billions of yen)
---------------------------------------------------------------------------------------------
Three months ended Three months ended Change
September 30, 2003 September 30, 2002
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Domestic sales 224.3 224.7 -0.2%
Overseas sales 226.3 203.8 11.0%
Net sales 450.6 428.5 5.2%
Gross profit 195.3 174.1 12.2%
Operating income 38.7 25.4 52.6%
Income before income taxes 34.0 23.4 45.7%
Net income 19.9 14.0 42.2%
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Exchange rate (Yen/US$) 117.61 119.19 -1.58
Exchange rate (Yen/EURO) 132.27 117.34 14.93
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Net income per share (yen) 26.75 19.26 7.49
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Capital expenditures 17.6 20.8 -3.1
Depreciation for tangible fixed assets 16.5 16.9 -0.3
R&D expenditures 24.8 21.7 3.1
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RICOH COMPANY, LTD.
* The Company bases the forecast estimates for March 31, 2004 above upon
information currently available to management, which involves risks and
uncertainties that could cause actual results to differ materially from those
projected.
1
POLICIES
(1) Basic Management
The Ricoh Group intends to be the company that gains most from the 21st century.
With this aim, we will continue to provide high reliability and create new value
in order to contribute both to productivity improvement and also to the
knowledge creation for individuals working anytime, anywhere. Accordingly, our
proactive approach encompasses not only products and services for traditional
office setups but also customers working in a broadband environment. Our
three-year 14th medium-term management plan -- which extends from April 2002
until March 2005 -- features the following five basic management policies:
i. Realize a "vital and motivated culture"
ii. Strengthen technologies to become the World No.1 product manufacturing
company
iii. Build "Customer-Friendly" and "Environmentally-Friendly" company
iv. Strengthen each business unit and revolutionize group business structures
v. Strengthen management constitution for competitive advantage
(2) Medium-Term Management Strategies
Ricoh meets the challenges of digital networking in our core competence of
office equipment. Accordingly, we have made every possible effort since our 13th
medium-term management plan to move beyond the manufacture of equipment such as
copiers and printers so that we may overhaul our operational structure, thus
allowing us to help our customers in their efforts to improve or enhance
productivity through our offering.
As a means of further contributing to our customers' profitability, therefore,
we fully recognize the importance of not only copying as relevant to the
ever-increasing digitization of data and capability for colorization, but
also of the proposal of measures capable of realizing efficient and effective
control of printed matter and all other types of document -- or in other words,
the full series of activities including the input, output, storage, and
searching of information.
Our 14th medium-term management plan thus focuses on the realization of total
document volume (TDV), thereby broadening our revenue and earning framework. In
this, our basic strategy features the following three goals:
i. Replacing monochrome products with color models
To provide a full lineup of compact color machines at prices comparable to those
of monochrome models, thus securing our customers' requirements for color
capability without being limited simply to the replacement of monochrome copies.
ii. Increased sales of high-speed models
To provide high-speed copiers with a competitive edge in terms of purchase
price, maintenance costs, and reliability, thus responding suitably to customer
needs for high levels of efficiency.
iii. Provision of printing solutions
To propose optimum combinations of copiers and printers in order to allow
customers to meet additional cost reduction requirements.
Ricoh is striving to enhance its technological capabilities in order to become
the World No.1 product manufacturing company that will provide products and
services more competitive than any others. In specific terms, these efforts
focus on technologies aimed at developing next-generation, high-speed color
imaging equipment, design and development aimed at simplifying the process of
connecting various items of office hardware, and the creation of
environmentally-friendly products and services.
(3) Basic Approach and Policies for Corporate Governance
In our drive to enhance competitive strengths, Ricoh is committed to the
management transparency in accordance with our corporate philosophy and ethics.
We have taken the following steps to ensure a sustainable, high level of
corporate governance.
i. Management organization and other corporate governance structure related to
decision-making, execution and auditing
- Implementation of an auditor system
- Introduction of an executive officer system and the assignment of authority to
divisions in order to clarify their roles
- Maintaining of a board of sixteen directors including two external members to
handle major decisions on group management
- Reinforcement of the auditing of individual divisions and establishment of a
group management Committee to formulate and implement optimal strategies for
the entire group
- Maintaining of auditing required by law through the efforts of four auditors
including two external auditors and establishment of independent internal
auditing through an auditing office
2
(Chart of Corporate Governance)
The chart of Corporate Governance is omitted.
ii. Personal factors, capital-based factors, business factors, and the like
between the company and the two external directors and two external auditors.
There are currently no conflicts of interest.
iii. Corporate governance initiatives implemented by Ricoh over the past year
In January 2003, Ricoh established a Corporate Social Responsibility (CSR)
Office to enable this company to better serve communities.
In terms of the disclosure of corporate information, corporate rules have been
setup for the entire process comprising data research, gathering, reporting, and
disclosure. Furthermore, a Disclosure Committee has been established in order to
ensure that such information is disclosed in a proper, punctual, and
comprehensive manner.
In response to calls for higher degrees of independence
for auditing firms, we have set forth regulations regarding the policies and
measures for advance acknowledgement of audited and non-audited activities. The
board of auditors' advance acknowledgement system has been implemented with
respect to the content of auditing contracts and the corresponding charges.
(4) Challenges
While Japanese and US markets are now showing signs of recovery, the yen still
remains strong with respect to the dollar in the Japanese market, and
consequently, difficulty is still experienced in the prediction of economic
prospects. Added to this, competition is very severe in the field of color
copying and digital networking.
The Ricoh Group's priorities in the achievement of sustainable growth within
such a challenging environment are to create new customer value while further
improving management efficiency, thereby enhancing corporate competitiveness.
In order that we may recognize new customer requirements and provide the highest
levels of product value, it is crucial that this company becomes the World No.1
product manufacturing company. With this fully in mind, we intend to redouble
our efforts in the creation of new value in all facets of management targeting
customer satisfaction, while at the same time, reinforcing our technological
strengths as a means of generating new value with our products and services.
By both creating and providing value in this way, Ricoh will strive to meet its
goals of being people-friendly and environment-friendly. In other words, we will
endeavor to realize higher levels of ease-of-use in order that our customers can
take full advantage of products and services that become evermore complex as
digital networking continues to develop. In this mission, we also strive to
fortify our environmental management system without compromising profitability.
As part of a drive to improve capital efficiency and earning, steady progress is
currently being made in the optimization of efficiency through process reform in
all group fields. Furthermore, we also intend to vastly reduce costs and raise
price competitiveness, thus realizing a highly-efficient, low-cost management
structure capable of responding adequately to today's deflationary business
environment.
3
(5) Dividend Policy
Ricoh endeavors to ensure stable dividends by improving profitability while
increasing retained earnings to enhance our corporate structure and to generate
new business. 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. Rebates to shareholders are paid with consideration
given to the dividend payout ratio. Ricoh understands the market buying of
treasury stock is also seen as an effective means for the payment of dividends.
(6) Approach and Policies for Reducing Minimum Investment Lots
Ricoh plans to keep investment patterns and shareholder composition under close
scrutiny, and we will consider taking the appropriate steps to alter the minimum
investment lot if so required. By reducing the minimum number of shares required
to invest in the company, Ricoh believes that a broader range of investors can
be attracted to equity markets, while at the same time, the liquidity of this
company's shares may be enhanced. Nevertheless, many investors already trade in
Ricoh's shares, and for this reason, management has concluded that there is no
immediate need for reduction of the minimum investment lots.
Furthermore, we intend to pay attention to the condition of business partners
and of shareholder makeup as we carefully study both the necessity and the
timing of implementation of these measures.
4
OPERATING RESULTS & FINANCIAL POSITION
*Overview
The Ricoh Group's consolidated net sales for the medium-term period of fiscal
2003 (the six months period from April 1 to September 30, 2003) increased 3.6%
from the previous corresponding period to Yen 888.0 billion. During this period,
the average yen exchange rates were at Yen 118.06 against the dollar (up Yen
5.02) and Yen 133.47 against the euro (down Yen 16.52). Accordingly, the
increase in sales would be 1.7% excluding effects of such foreign fluctuations.
Domestic sales of printing systems such as MFPs (multifunctional printers) and
laser printers increased, whereas sales of optical disks and PC servers
decreased, resulting in total sales of Yen 448.6 billion, down 0.2% from the
previous corresponding period. Meanwhile, overseas sales of digital PPC, color
PPC, and printing systems increased particularly in terms of color equipments.
In addition, due to the yen's depreciation against the euro, this increased
overall sales increased 7.9% to Yen 439.4 billion. Excluding the effect of
exchange fluctuations, the total overseas sales would rise 3.8% from the
previous corresponding period.
Gross profit increased 7.6% to Yen 388.1 billion. It was owing to increased
sales of high-margin, high-value added products both in Japan and overseas,
continuous cost cutting activities and yen's depreciation against the euro.
As a result of an increase in strategic costs associated with investment in
research and development and the IT development of core systems, selling,
general and administrative expenses increased 3.9% to Yen 310.8 billion. In
accordance with these results, operating income increased 26.0% to Yen 77.2
billion.
In terms of non-operating profit and loss, the enhancement of cash management
activities in Japan, the US, and Europe are led to reduction of both
interest-bearing debt and interest expenses. However, interest and dividend
income both shrank and the appreciating yen generated foreign exchange losses.
As a result of these factors, income before income taxes increased 28.3% to Yen
71.4 billion from the previous corresponding period.
Due to the change of the Corporate Tax Law in Japan, the amount of tax exemption
on research and development expenses increased, thereby leading to a decline
in the effective tax rate.
Furthermore, whereas minority interests in earnings of subsidiaries increased,
equity in earnings of affiliates decreased from the previous corresponding
period.
As a result, Net income increased 26.1% to Yen 42.2 billion.
[Graph 1] Consolidated performance
The graphs are omitted. The data in the omitted graphs can be shown at the
schedule 1 in APPENDIX B.
5
*Consolidated Sales by Product Line
Office Equipment (Yen 775.5 billion, up 3.5% from the previous corresponding
period)
The Ricoh Group makes solution proposals to customers for the optimization of
their total printing cost in order to support their efficient management of TDV
(total document volume). As a strategy to realize this objective, the group is
shifting away from stand-alone analog equipment toward digitalization,
networking, colorization, and high speed technologies. Consequently, sales of
digital PPC, printing systems such as MFPs and laser printers have continued to
grow.
While domestic sales have decreased due to slow sales of optical discs and PC
servers, overseas sales have increased as a result of increased retail of
digital PPC and printing systems, particularly color equipment, in accordance
with the effect of yen's depreciation against the euro. As a result, total sales
of office equipment have increased to Yen 775.5 billion, 3.5% up over the
previous corresponding period.
Imaging Solutions (Yen 415.0 billion, down 3.5% from the previous
corresponding period)
o Digital Imaging Systems
- Continuous new offering of digital PPC products
("Imagio Neo 352/452 series" in Japan and "Aficio 2035/2045 series" overseas)
- Release of new color PPC products
("Imagio Neo C385/C325 series" in Japan and "Aficio 1224C/1232C series"
overseas)
- Domestic sales have decreased due to a shift to MFPs, slow demand, and
other factors
- Overseas sales have risen due to increased retail of digital PPC and color
PPC.
As a result, sales in this category decreased 0.1% from the previous
corresponding period.
o Other Imaging Systems
- Sales in this category have decreased 12.4% from the previous corresponding
period due to a shift from analog equipments to MFPs or color equipment.
Network Input/Output Systems (Yen 263.1 billion, up 20.2% from the previous
corresponding period)
o Printing Systems
- Offering of new products to cope with the shift to high-speed, networked,
and color models both in Japan and overseas
("IPSiO NX series" and "Imagio Neo C380" in Japan, and "AP-400/400N" and "CL
series" overseas)
- Sales of MFPs and laser printers have continued to grow.
As a result, sales in this category have increased 23.3% from the previous
corresponding period.
o Other Input/Output Systems
- While sales of optical disc products in Japan have decreased, sales in
overseas markets have increased greatly. As a result, the overall sales in
this category have risen by 0.6% from the previous corresponding period.
Network System Solutions (Yen 97.2 billion, down 2.8% from the previous
corresponding period)
- To meet customers' needs for improvement of total cost performance
- To intensify solution-centered activities such as use-ware support,
software solutions, and the like
- Sales decrease in terms of PC servers
Other Businesses (Yen 112.5 billion, up 4.8% from the previous corresponding
period)
Sales of other business segment have increased 4.8% from the previous
corresponding period to Yen 112.5 billion. Sales of semiconductor business
have grown, leasing and other business activities have steadily
progressed.
[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.
6
* Consolidated Sales by Geographic Area
Japan (Yen 448.6 billion, down 0.2% from the previous corresponding period)
Despite the continuing severe condition of the Japanese economy, sales of
printing systems such as MFPs and laser printers have increased, owing to the
implementation of merchandising and marketing strategies to meet customer
requirements. On the other hand, sales of analog products have decreased due to
a shift to MFPs and color products, in addition, sales of optical discs, PC
servers have also declined. As a result, sales of office equipment decreased
1.1% from the previous corresponding period. sales of other business
activities such as semiconductors increased 3.5%.
The Americas (Yen 167.6 billion, down 1.6% from the previous corresponding
period)
Although the US economy is showing signs of recovery, competition has become
more intense, and the yen's appreciation has effected to this segment. Under
these circumstances, we have focused on areas such as digital PPC and printing
systems in order to respond to changing customer needs for networking, color
capability, and higher speeds, and we have also committed to expand sales to
major accounts. Accordingly, Sales in the Americas have decreased 1.6% from the
previous corresponding period. However, after factoring out the yen's
appreciation against dollar it gained 2.4%.
Europe (Yen 196.9 billion, up 18.5% from the previous corresponding period)
Despite the instability of the European economy, we have continuously increased
sales of digital PPC and printing systems, and have maintained the top share in
the European copier market. Aided by increased sales of optical discs and the
yen's depreciation against the euro, sales in Europe have shown an increase of
18.5% from the previous corresponding period.
Others (Yen 74.8 billion, up 5.9% from the previous corresponding period)
In other regions, such as China and other Asian countries, we have committed to
increasing sales of digital PPC and MFPs to meet an overwhelming shift in demand
toward digital, networked, and color-capable products. Demand for optical discs
has also continuously increased, and the semiconductor business also continues
to show strong performance. We have also increased production at our Chinese
manufacturing facilities in order to meet increased worldwide supply. As a
result, sales in the Others have increased 5.9% from the previous corresponding
period.
[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.
7
*Segment Information
Business Segment
Office Equipment
In terms of imaging solutions and printing systems -- our principal product area
-- we have released a series of high value-added products, ranging from low-end
to high-speed models, and with document functionality ranging from input/output
to sharing and management. Accordingly, sales of digital PPC, color PPC, and
MFPs have increased. Laser printers have also generated increased sales both in
Japan and overseas through the continuous offerings of effective new products.
Though sales of PC servers have decreased as a result of sluggish demand, the
optical disc business has shown steady expansion, especially in Europe and other
region. As a result, sales of office equipment increased 3.5% from the previous
corresponding period to Yen 775.5 billion.
Turning our attention to operating expenses, despite strategic investment in
research and development and in IT development of core systems, operating income
increased 9.7% from the previous corresponding period, to Yen 102.6 billion.
This increase has been thanks to increased sales of high value-added products
with high margins, and continuous reduction in production and administration
areas, as well as the effect of the yen's depreciation against the euro. The
ratio of operating income to net sales increased 0.7% from the previous
corresponding period, to 13.2%.
Although capital investment was made, with a focus on enhancing and expanding
new product production lines and research and development, capital investment
declined from the previous corresponding period.
Total assets increased from the previous corresponding period due to an increase
in the finance receivables and in overseas inventories in order to expand sales,
however, asset efficiency has improved.
Other Businesses
The semiconductor business has experienced a recovery of demand in Japan, and
increased sales overseas. Furthermore, businesses such as leasing have shown a
steady performance. As a result, total sales from other businesses have
increased 4.4% from the previous corresponding period, to Yen 113.7 billion.
Regarding operating income, an extraordinary expense was accrued in the metering
equipment business during the same period in the previous year, which is
finished. Besides, increased earnings from our semiconductor and other
businesses, operating income in this segment turned to positive.
(Billions of Yen)
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Half year ended Half year ended Change (%)
September 30, 2003 September 30, 2002
------------------------------------------------------------------------------------------
Office Equipment:
Net sales 775.5 749.3 3.5
Operating income 102.6 93.5 9.7
Operating income on sales(%) 13.2 12.5 0.7
Identifiable assets 1,196.9 1,168.9 2.4
Capital expenditures 31.9 35.2 -9.3
Depreciation 29.3 29.7 -1.1
------------------------------------------------------------------------------------------
Other Businesses:
Net sales 113.7 108.9 4.4
Operating income 2.9 -3.0 -
Operating income on sales(%) 2.6 -2.8 5.4
Identifiable assets 184.0 184.7 -0.4
Capital expenditures 3.9 2.6 46.5
Depreciation 3.3 3.1 7.5
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8
Geographic Segment
Japan
In the office equipment business, aggressive marketing strategies have increased
sales of printing systems in Japan. Sales in Japan have increased 5.1% to Yen
663.2 billion, owing to increased export to overseas markets with steady sales,
and the effect of the yen's depreciation against the euro. Operating income has
increased 52.5% to Yen 56.7 billion, due to writing off of the extraordinary
expense accrued in the metering equipment business during the same period last
year, increased revenue, a shift to high value-added products, and the effect
of continuous cost reductions.
The Americas
Although US economy is on the road to recovery, competition has been heating up
as well. Under these circumstances, we are developing and strengthening our
sales channels, and we have achieved good results from such strategies as
expanding sales of PPC and printing systems, and bolstering our sales to major
accounts. We have seen particularly strong growth in sales of color models,
thanks to the effect of new products. However, sales in the Americas have
decreased 1.5% from the previous corresponding period to Yen 164.9 billion, due
the higher yen against the US dollar. Operating income has increased 1.9% to Yen
7.6 billion, owing to increased income from manufacturing, due to the effect of
production in the optimum regions closer to customers, as well as our commitment
to reducing costs and expenses.
Europe
Throughout Europe, our consolidated subsidiaries have shown increased sales,
especially digital PPC and printing systems. We retain the top share of the
European copier market. Sales in Europe have increased 18.7% to Yen 198.3
billion. Operating income has increased 35.8% to Yen 9.5 billion, owing to
increased income from manufacturing, due to the effect of production in the
optimum regions closer to customers, as well as the effect of the yen's
depreciation against the euro.
Others
In the China region and Asia / Oceania region, we have expanded production in
our manufacturing facilities in China to increase worldwide supply and maintain
high production levels. On the other hand, there has been a large-scale shift in
demand toward digital, networked, and color-capable office equipment, and we are
enhancing our sales readiness in the promising Chinese market. As a result,
sales in other regions have increased 21.5% to Yen 99.8 billion. Operating
income has increased 0.1% to Yen 4.5 billion, owing to increased revenue and
increased production, while offsetting prior investment for enhancing our
Chinese sales readiness.
(Billions of yen)
-------------------------------------------------------------------------------------------------------
Half year ended Half year ended Change (%)
September 30, 2003 September 30, 2002
-------------------------------------------------------------------------------------------------------
Japan:
Net sales 663.2 631.2 5.1
Operating income 56.7 37.2 52.5
Operating income on sales(%) 8.6 5.9 2.7
Identifiable assets 1,061.1 1,047.6 1.3
-------------------------------------------------------------------------------------------------------
The Americas:
Net sales 164.9 167.4 -1.5
Operating income 7.6 7.5 1.9
Operating income on sales(%) 4.7 4.5 0.2
Identifiable assets 192.7 204.8 -5.9
-------------------------------------------------------------------------------------------------------
Europe:
Net sales 198.3 167.1 18.7
Operating income 9.5 7.0 35.8
Operating income on sales(%) 4.8 4.2 0.6
Identifiable assets 186.6 165.8 12.6
-------------------------------------------------------------------------------------------------------
Others:
Net sales 99.8 82.2 21.5
Operating income 4.5 4.5 0.1
Operating income on sales(%) 4.6 5.5 -0.9
Identifiable assets 69.1 59.4 16.3
-------------------------------------------------------------------------------------------------------
9
*Cash Flows
(Billions of yen)
--------------------------------------------------------------------------------------------------
Half year ended Half year ended Change
September 30, September 30,
2003 2002
--------------------------------------------------------------------------------------------------
Cash flows from operating activities 61.6 99.1 -37.4
Cash flows from investing activities -19.9 -33.3 13.3
Cash flows from financing activities -6.6 -16.5 9.9
Cash and Cash Equivalents at End of Period 225.0 217.4 7.5
--------------------------------------------------------------------------------------------------
Net cash provided by operating activities decreased Yen 37.4 billion as compared
to the previous corresponding period, to Yen 61.6 billion. This was attributed
to the fact that although net income and depreciation and amortization expenses
increased, finance receivable have grown and overseas inventories increased in
order to cope with an expansion of sales.
Net cash used in investing activities was Yen 19.9 billion, decrease Yen 13.3
billion as compared to the previous corresponding period. This is due primarily
to capital investment in new product lines and new product development.
As a result, free cash flow generated by operating activities and investing
activities has decreased by Yen 24.0 billion from the previous corresponding
period to Yen 41.6 billion.
Net cash used in financing activities amounted to Yen 6.6 billion, as a result
of factors such as the payment of dividends and the reacquisition of treasury
stock.
Consequently, cash and cash equivalents at the end of this half-year period have
risen by Yen 35.7 billion as compared to the end of the preceding year (March
31, 2003), to Yen 225.0 billion.
Transition of our cashflow indices from fiscal 2000 to 2004 are as follows:
-----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Half year ended Half year ended Half year ended
September 30, September 30, September 30, September 30, September 30,
1999 2000 2001 2002 2003
-----------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity / Total assets 31.4% 35.4% 33.9% 36.3% 36.8%
Market capitalization / Total assets 78.1% 86.9% 72.7% 84.2% 77.3%
Interest bearing debt / Operating cash flow 10.6 20.6 12.2 5.5 7.9
Operating cash flow / Interest expense 11.7 8.9 9.9 24.6 21.5
-----------------------------------------------------------------------------------------------------------------------------------
Notes:
i. All indices are calculated based on consolidated data.
ii. Market capitalization equals the stock price at the end of half year
multiples by the number of shares outstanding at the end of half year.
iii. Operating cash flow is shown in consolidated statement of cash flow.
Interest bearing debt equals all debt in consolidated balance sheets.
10
*Forecast for the entire fiscal year
In terms of forecasted results for the current fiscal year, we have slightly
reduced our estimated sales as announced in July this year to Yen 1,800.0
billion. For the 3rd quarter and onward, we predict an exchange rate of Yen
108.00 against the US dollar, and of Yen 128.00 against the euro. The rapid
appreciation of the yen that began in September of this year is forecasted to
continue.
Meanwhile, as steady sales continue in our core products area such as digital
PPC and printing systems, we intend to implement business strategies such as the
release of valuable new products, and we believe that sales will consequently
increase both in Japan and overseas.
It is our intention to adjust our forecasted operating income upward to Yen
152.0 billion in accordance with the fact that results for the current half-year
period were more stable than initially predicted, and that further profitability
growth is expected. We will also adjust our forecasted income before income
taxes down to Yen 144.0 billion as a result of the effect of exchange losses
incurred during the first half of fiscal 2003. We, however, intend to maintain
our forecast for net income in the current fiscal year at Yen 85.0 billion.
Ricoh Group has centered its 14th medium-term term management plan, started in
April 2002, on expanding its profit base by expanding total document volume. The
basic strategy entails:
.. Responding to greater demand for color documents among office users
.. Expanding sales of high-speed machines
.. Deploying printing solutions
The crucial challenges for our customers will be to improve work flow and
enhance productivity by better managing TDV (total document volumes). We will
support such efforts by continuing to formulate proposals to optimize customer's
total printing costs and offer products and services that meet more
sophisticated needs for color and faster office document production. In
addition, we plan to expand operations by integrating production, sales, and
service through a management base in the highly promising Chinese market, to
complement similar organizations Japan, the United States, and Europe.
Ricoh will pursue efficiencies through process reform in each business domain to
ensure sustainable earnings growth and cash flows, as part of which it is
working on a low-cost management structure that can withstand deflationary
environments by further reinforcing price competitiveness.
Our performance forecasts for fiscal 2004 are as follows:
Exchange Rate Assumptions for the 2nd half year
US$ 1 = Yen 108.00 (Yen 118.06 in 1st half year)
EURO 1 = Yen 128.00 (Yen 133.47 in 1st half year)
Exchange Rate Assumptions for the full year ended March 31, 2004
US$ 1 = Yen 113.03 (Yen 121.96 in previous fiscal year)
EURO 1 = Yen 130.74 (Yen 121.00 in previous fiscal year)
(Billions of yen)
-----------------------------------------------------------------------------------------------------------------------
Year ended Year ended
March 31, 2004 March 31, 2003 Change
(Forecast) (Results)
-----------------------------------------------------------------------------------------------------------------------
Domestic sales 900.0 896.0 0.4%
Overseas sales 900.0 842.3 6.8%
Net sales 1,800.0 1,738.3 3.5% (*1)
Gross profit 783.6 745.3 5.1%
Operating income 152.0 133.6 13.7%
Income before income taxes 144.0 123.4 16.6%
Net income 85.0 72.5 17.2% (*2)
-----------------------------------------------------------------------------------------------------------------------
Notes:
*1...Net sales would be tenth consecutive year of growth.
*2...Net income would be twelfth consecutive year of growth and tenth
consecutive year of record high.
* Ricoh bases the forecast estimates for March 31, 2004 above upon information
currently available to management, which involves risks and uncertainties that
could cause actual results to differ materially from those projected.
11
RICOH COMPANY, LTD. AND CONSOLIDATED SUBSIDIARIES
INTERIM REPORT (CONSOLIDATED. HALF YEAR ENDED SEPTEMBER 30, 2003)
DATE OF APPROVAL FOR THE FINANCIAL RESULTS FOR THE HALF YEAR ENDED SEPTEMBER 30,
2003, AT THE BOARD OF DIRECTORS' MEETING: OCTOBER 29, 2003
1. RESULTS FOR THE PERIOD FROM APRIL 1, 2003 TO SEPTEMBER 30, 2003
(1) Operating Results (Millions of yen)
----------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2002 March 31, 2003
----------------------------------------------------------------------------------------------------------------------
Net sales 888,090 856,821 1,738,358
(% change from the previous corresponding periods) 3.6 4.5 3.9
Operating income 77,255 61,328 133,654
(% change from the previous corresponding periods) 26.0 2.4 3.1
Income before income taxes 71,416 55,673 123,470
(% change from the previous corresponding periods) 28.3 6.0 8.4
Net income 42,265 33,525 72,513
(% change from the previous corresponding periods) 26.1 18.0 17.7
Net income per share-basic (yen) 56.79 46.11 99.79
Net income per share-diluted (yen) - 44.68 96.81
----------------------------------------------------------------------------------------------------------------------
Notes:
i. Equity in income of affiliates: Yen 972 million; Yen 1,608 million (half
year ended September 30, 2002); Yen 2,403 million (year ended March 31, 2003)
ii. Average number of shares outstanding (consolidated): 744,261,032 shares;
727,020,387 shares (half year ended September 30, 2002); 726,659,698 shares
(year ended March 31, 2003)
iii. No change in accounting method has been made.
(2) Financial Position (Millions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
September 30, 2003 September 30, 2002 March 31, 2003
-----------------------------------------------------------------------------------------------------------------------------------
Total assets 1,912,162 1,826,385 1,884,922
Shareholders' equity 703,075 663,665 657,514
Equity ratio (%) 36.8 36.3 34.9
Equity per share (yen) 946.38 912.98 885.41
-----------------------------------------------------------------------------------------------------------------------------------
Note: Number of shares outstanding as of September 30, 2003: 742,906,263 shares; 726,919,110 shares (September 30, 2002);
742,608,635 shares (March 31, 2003)
(3) Cash Flow (Millions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2002 March 31, 2003
-----------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities 61,656 99,119 185,742
Cash flows from investing activities -19,997 -33,395 -98,199
Cash flows from financing activities -6,643 -16,562 -67,143
Cash and cash equivalents at end of period 225,013 217,418 189,243
-----------------------------------------------------------------------------------------------------------------------------------
(4) Items relating to the scale of consolidation and the application of the
equity method:
Number of consolidated subsidiaries: 333; non-consolidated subsidiaries: 37;
affiliated companies: 24
(5) Changes in accounting method, etc.:
Consolidated subsidiaries: No addition; 1 removal
Companies accounted for by the equity method: No change
Notes:
Consolidated financial statements of the Company and its consolidated
subsidiaries have been prepared in conformity with accounting principles
generally accepted in the United States of America.
2. FORECAST OF OPERATING RESULTS FROM APRIL 1, 2003 TO MARCH 31, 2004
(Millions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
Net sales 1,800,000
Operating income 152,000
Income before income taxes 144,000
Net income 85,000
-----------------------------------------------------------------------------------------------------------------------------------
Note: Net income per share (Consolidated) 114.42 yen
In accordance with Japanese regulations, Ricoh has issued forecast for its
financial results for the fiscal year ending March 2004. 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.
12
GROUP POSITION
The Ricoh Group comprises 370 subsidiaries and 24 affiliates.
Their development, manufacturing, sales, and service activities center on office
equipment business and other businesses (optical equipments, semiconductors and
metering equipments).
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 Equipment Business)
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, digital duplicators, optical disks. 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 useware 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., and Ricoh Keiki Co., 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 Facsimile Co., Ltd., and Sindo Ricoh Co., Ltd.
Sales and Service
Japan...Ricoh Tohoku Co., Ltd., Ricoh Chubu Co., Ltd.,
Ricoh Kansai Co., Ltd., Ricoh Chugoku Co., Ltd.,
Ricoh Kyushu Co., Ltd., Tokyo Ricoh Co., Ltd., Osaka Ricoh Co., Ltd.
and 43 other sales companies nationwide,
Ricoh Technosystems Co., Ltd., NBS Ricoh Co., Ltd.,
Ricoh Leasing Co., Ltd., and Ricoh Logistics System Co., Ltd.
The Americas...Ricoh Corporation, Savin Corporation,
and Lanier Worldwide, Inc.
Europe...Ricoh Europe B.V., Ricoh Deutschland GmbH, Ricoh UK Ltd.,
Ricoh France S.A., 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 Pte, Ltd., Ricoh Australia Pty, Ltd.,
and Ricoh New Zealand Ltd.
(Other Businesses)
Manufacturing and marketing optical equipment, semiconductors and metering
equipments, and providing leasing and logistics services
[Main Subsidiaries and Affiliates]
Production
Japan...Ricoh Optical Industries Co., Ltd., Ricoh Elemex Corporation
Overseas...Taiwan Ricoh Co., Ltd.
Sales
Ricoh Corporation, NRG Group PLC
Other
Ricoh Leasing Co., Ltd., Ricoh Logistics System Co., Ltd., and Coca-Cola West
Japan Co., Ltd. (affiliated company)
(Chart of Business System)
The chart of group positions is omitted.
13
CONSOLIDATED PERFORMANCE
1. CONSOLIDATED STATEMENTS OF INCOME
(Three months ended September 30, 2003 and 2002) (Millions of yen)
---------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended Change %
September 30, 2003 September 30, 2002
---------------------------------------------------------------------------------------------------------------------
Net sales 450,637 428,550 22,087 5.2
Cost of sales 255,282 254,402 880 0.3
Percentage of net sales (%) 56.6 59.4
Gross Profit 195,355 174,148 21,207 12.2
Percentage of net sales (%) 43.4 40.6
Selling, general and administrative expenses 156,584 148,747 7,837 5.3
Percentage of net sales (%) 34.8 34.7
Operating income 38,771 25,401 13,370 52.6
Percentage of net sales (%) 8.6 5.9
Other (income) expense
Interest and dividend income 617 1,072 -455 -42.4
Percentage of net sales (%) 0.1 0.3
Interest expense 1,339 2,291 -952 -41.6
Percentage of net sales (%) 0.3 0.5
Other, net 3,950 779 3,171 407.1
Percentage of net sales (%) 0.8 0.2
Income before income taxes,
equity income and minority interests 34,099 23,403 10,696 45.7
Percentage of net sales (%) 7.6 5.5
Provision for income taxes 14,362 11,019 3,343 30.3
Percentage of net sales (%) 3.2 2.6
Minority interests in earnings of subsidiaries 347 -843 1,190 -
Percentage of net sales (%) 0.1 -0.2
Equity in earnings of affiliates 520 777 -257 -33.1
Percentage of net sales (%) 0.1 0.2
Net income 19,910 14,004 5,906 42.2
Percentage of net sales (%) 4.4 3.3
---------------------------------------------------------------------------------------------------------------------
Reference: Exchange rate
US$ 1 Yen 117.61 Yen 119.19
EURO 1 Yen 132.27 Yen 117.34
(Half year ended September 30, 2003, 2002 and year ended March 31, 2003) (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended % Year ended
September 30, 2003 September 30, 2002 Change March 31, 2003
----------------------------------------------------------------------------------------------------------------------------------
Net sales 888,090 856,821 31,269 3.6 1,738,358
Cost of sales 499,983 496,176 3,807 0.8 993,009
Percentage of net sales (%) 56.3 57.9 57.1
Gross Profit 388,107 360,645 27,462 7.6 745,349
Percentage of net sales (%) 43.7 42.1 42.9
Selling, general and administrative expenses 310,852 299,317 11,535 3.9 611,695
Percentage of net sales (%) 35.0 34.9 35.2
Operating income 77,255 61,328 15,927 26.0 133,654
Percentage of net sales (%) 8.7 7.2 7.7
Other (income) expense
Interest and dividend income 1,313 2,035 -722 -35.5 3,772
Percentage of net sales (%) 0.1 0.2 0.2
Interest expense 2,863 4,030 -1,167 -29.0 6,853
Percentage of net sales (%) 0.3 0.5 0.4
Other, net 4,289 3,660 629 17.2 7,103
Percentage of net sales (%) 0.5 0.4 0.4
Income before income taxes,
equity income and minority interests 71,416 55,673 15,743 28.3 123,470
Percentage of net sales (%) 8.0 6.5 7.1
Provision for income taxes 28,424 24,020 4,404 18.3 51,984
Percentage of net sales (%) 3.2 2.8 3.0
Minority interests in earnings of subsidiaries 1,699 -264 1,963 - 1,376
Percentage of net sales (%) 0.1 - 0.0
Equity in earnings of affiliates 972 1,608 -636 -39.6 2,403
Percentage of net sales (%) 0.1 0.2 0.1
Net income 42,265 33,525 8,740 26.1 72,513
Percentage of net sales (%) 4.8 3.9 4.2
----------------------------------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 118.06 Yen 123.08 Yen 121.96
EURO 1 Yen 133.47 Yen 116.95 Yen 121.00
14
2-1. CONSOLIDATED SALES BY PRODUCT CATEGORY
(Three months ended September 30, 2003 and 2002) (Millions of yen)
------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2003 September 30, 2002 Change %
------------------------------------------------------------------------------------------------------
(Office Equipment)
Imaging Solutions:
Digital Imaging Systems 150,161 153,096 -2,935 -1.9
Percentage of net sales (%) 33.3 35.7
Other Imaging Systems 52,165 57,345 -5,180 -9.0
Percentage of net sales (%) 11.6 13.4
Total Imaging Solutions 202,326 210,441 -8,115 -3.9
Percentage of net sales (%) 44.9 49.1
------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 117,351 94,755 22,596 23.8
Percentage of net sales (%) 26.0 22.1
Other Input/Output Systems 18,304 13,672 4,632 33.9
Percentage of net sales (%) 4.1 3.2
Total Network Input/Output Systems 135,655 108,427 27,228 25.1
Percentage of net sales (%) 30.1 25.3
------------------------------------------------------------------------------------------------------
Network System Solutions 53,795 53,122 673 1.3
Percentage of net sales (%) 11.9 12.4
------------------------------------------------------------------------------------------------------
Office Equipment Total 391,776 371,990 19,786 5.3
Percentage of net sales (%) 86.9 86.8
------------------------------------------------------------------------------------------------------
(Other Businesses)
Other Businesses 58,861 56,560 2,301 4.1
Percentage of net sales (%) 13.1 13.2
------------------------------------------------------------------------------------------------------
Grand Total 450,637 428,550 22,087 5.2
Percentage of net sales (%) 100.0 100.0
------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 117.61 Yen 119.19
EURO 1 Yen 132.27 Yen 117.34
(Half year ended September 30, 2003, 2002 and year ended March 31, 2003) (Millions of yen)
------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2002 Change % March 31, 2003
------------------------------------------------------------------------------------------------------------------------
(Office Equipment)
Imaging Solutions:
Digital Imaging Systems 309,158 309,385 -227 -0.1 626,967
Percentage of net sales (%) 34.8 36.1 36.1
Other Imaging Systems 105,936 120,977 -15,041 -12.4 232,746
Percentage of net sales (%) 11.9 14.1 13.4
Total Imaging Solutions 415,094 430,362 -15,268 -3.5 859,713
Percentage of net sales (%) 46.7 50.2 49.5
------------------------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 233,457 189,408 44,049 23.3 408,830
Percentage of net sales (%) 26.3 22.1 23.5
Other Input/Output Systems 29,725 29,535 190 0.6 54,549
Percentage of net sales (%) 3.3 3.5 3.2
Total Network Input/Output Systems 263,182 218,943 44,239 20.2 463,379
Percentage of net sales (%) 29.6 25.6 26.7
------------------------------------------------------------------------------------------------------------------------
Network System Solutions 97,232 100,052 -2,820 -2.8 197,482
Percentage of net sales (%) 11.0 11.7 11.3
------------------------------------------------------------------------------------------------------------------------
Office Equipment Total 775,508 749,357 26,151 3.5 1,520,574
Percentage of net sales (%) 87.3 87.5 87.5
------------------------------------------------------------------------------------------------------------------------
(Other Businesses)
Other Businesses 112,582 107,464 5,118 4.8 217,784
Percentage of net sales (%) 12.7 12.5 12.5
------------------------------------------------------------------------------------------------------------------------
Grand Total 888,090 856,821 31,269 3.6 1,738,358
Percentage of net sales (%) 100.0 100.0 100.0
------------------------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 118.06 Yen 123.08 Yen 121.96
EURO 1 Yen 133.47 Yen 116.95 Yen 121.00
Each category includes the following product line:
Digital Imaging Systems Digital PPCs, color PPCs, digital duplicators and
facsimile machines
Other Imaging Systems Analog PPCs, diazo copiers, and thermal paper
Printing Systems MFPs(multifunctional printers), laser
printers and software
Other Input/Output Systems Optical discs and system scanners
Network System Solutions Personal computers, PC servers, network systems
and network related software
Other Businesses Optical equipments, metering equipments and
semiconductors
15
2-2. CONSOLIDATED SALES BY GEOGRAPHIC AREA
(Three months ended September 30, 2003 and 2002) (Millions of yen)
---------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2003 September 30, 2002 Change %
---------------------------------------------------------------------------------------------------------------------
(Domestic) 224,301 224,731 -430 -0.2
Percentage of net sales (%) 49.8 52.4
(Overseas) 226,336 203,819 22,517 11.0
Percentage of net sales (%) 50.2 47.6
The Americas 88,173 86,262 1,911 2.2
Percentage of net sales (%) 19.6 20.1
Europe 98,332 82,909 15,423 18.6
Percentage of net sales (%) 21.8 19.4
Other 39,831 34,648 5,183 15.0
Percentage of net sales (%) 8.8 8.1
Grand Total 450,637 428,550 22,087 5.2
Percentage of net sales (%) 100.0 100.0
---------------------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 117.61 Yen 119.19
EURO 1 Yen 132.27 Yen 117.34
(Half year ended September 30, 2003, 2002 and year ended March 31, 2003) (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2002 Change % March 31, 2003
------------------------------------------------------------------------------------------------------------------------------------
(Domestic) 448,636 449,575 -939 -0.2 896,022
Percentage of net sales (%) 50.5 52.5 51.5
(Overseas) 439,454 407,246 32,208 7.9 842,336
Percentage of net sales (%) 49.5 47.5 48.5
The Americas 167,664 170,433 -2,769 -1.6 343,940
Percentage of net sales (%) 18.9 19.9 19.8
Europe 196,951 166,169 30,782 18.5 354,477
Percentage of net sales (%) 22.2 19.4 20.4
Other 74,839 70,644 4,195 5.9 143,919
Percentage of net sales (%) 8.4 8.2 8.3
Grand Total 888,090 856,821 31,269 3.6 1,738,358
Percentage of net sales (%) 100.0 100.0 100.0
------------------------------------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 118.06 Yen 123.08 Yen 121.96
EURO 1 Yen 133.47 Yen 116.95 Yen 121.00
16
3. CONSOLIDATED BALANCE SHEETS (September 30, 2003 and March 31, 2003)
Assets (Millions of yen)
--------------------------------------------------------------------------------------------------------------
September 30, 2003 March 31, 2003 Change
--------------------------------------------------------------------------------------------------------------
Current Assets
Cash and time deposits 226,894 200,330 26,564
Trade receivables 407,634 417,942 -10,308
Marketable securities 136 107 29
Inventories 152,154 146,051 6,103
Other current assets 58,567 58,083 484
Total Current Assets 845,385 822,513 22,872
Fixed Assets
Tangible fixed assets 242,258 248,752 -6,494
Finance receivable 497,109 476,293 20,816
Other Investments 327,410 337,364 -9,954
Total Fixed Assets 1,066,777 1,062,409 4,368
--------------------------------------------------------------------------------------------------------------
Total Assets 1,912,162 1,884,922 27,240
--------------------------------------------------------------------------------------------------------------
Note:
Contents of cash and time deposits:
Cash and cash equivalents 225,013 189,243
Time deposits 1,881 11,087
Liabilities and Shareholders' Investment (Millions of yen)
--------------------------------------------------------------------------------------------------------------
September 30, 2003 March 31, 2003 Change
--------------------------------------------------------------------------------------------------------------
Current Liabilities
Trade payables 273,276 280,798 -7,522
Short-term borrowings 200,568 138,713 61,855
Other current liabilities 161,423 169,072 -7,649
Total Current Liabilities 635,267 588,583 46,684
Fixed Liabilities
Long-term indebtedness 284,392 345,902 -61,510
Retirement benefit obligation 212,756 209,011 3,745
Other fixed liabilities 28,219 30,653 -2,434
Total Fixed Liabilities 525,367 585,566 -60,199
--------------------------------------------------------------------------------------------------------------
Total Liabilities 1,160,634 1,174,149 -13,515
--------------------------------------------------------------------------------------------------------------
Minority Interest 48,453 53,259 -4,806
--------------------------------------------------------------------------------------------------------------
Shareholders' Investment
Common stock 135,364 135,364 0
Additional paid-in capital 186,600 186,521 79
Retained earnings 471,815 434,748 37,067
Accumulated other comprehensive income (loss) -86,531 -94,733 8,202
Treasury stock -4,173 -4,386 213
Total Shareholders' Investment 703,075 657,514 45,561
-------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Investment 1,912,162 1,884,922 27,240
-------------------------------------------------------------------------------------------------------------
Note: Other comprehensive income;
Net unrealized holding gains on available-for-sale
securities 11,381 8,582 2,799
Pension liability adjustments -83,411 -89,119 5,708
Net unrealized gains (losses) on derivative instruments -58 -178 120
Cumulative translation adjustments -14,443 -14,018 -425
Reference: Exchange rate September 30, 2003 March 31, 2003
US$ 1 Yen 111.25 Yen 120.20
EURO 1 Yen 129.19 Yen 129.83
4. RETAINED EARNINGS
For the half year ended September 30, 2003 and year ended March 31, 2003 (Millions of yen)
-------------------------------------------------------------------------------------------------------------
Half year ended Year ended
September 30, 2003 March 31, 2003
-------------------------------------------------------------------------------------------------------------
Retained earnings (beginning balance) 434,748 385,741
Net income 42,265 72,513
Cash dividends 5,198 10,178
Retirement of treasury stock - 13,328
Retained earnings (ending balance) 471,815 434,748
-------------------------------------------------------------------------------------------------------------
17
5. CONSOLIDATED STATEMENTS OF CASH FLOW
(Half year ended September 30, 2003, 2002 and year ended March 31, 2003) (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2002 March 31, 2003
----------------------------------------------------------------------------------------------------------------------------
I. Cash Flows from Operating Activities:
1. Net income 42,265 33,525 72,513
2. Adjustments to reconcile net income to net cash
provided by operating activities--
Depreciation and amortization 37,827 36,782 76,551
Equity in earnings of affiliates, net of dividends received -230 -670 -1,167
Deferred income taxes -1,257 -5,030 -9,289
Loss on disposal and sales of tangible fixed assets 837 777 1,975
Changes in assets and liabilities--
Decrease in trade receivables 7,935 30,129 22,176
(Increase) decrease in inventories -7,979 9,521 14,983
Increase in finance receivables -21,723 -20,230 -33,109
(Decrease) increase in trade payables -6,773 -5,339 5,632
(Decrease) increase in accrued income taxes and
accrued expenses and other -5,069 -2,004 11,173
Retirement benefit obligation, net 9,806 5,354 7,806
Other, net 6,017 16,304 16,498
----------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 61,656 99,119 185,742
----------------------------------------------------------------------------------------------------------------------------
II. Cash Flows from Investing Activities:
1. Proceeds from sales of plant and equipment 134 174 245
2. Expenditures for tangible fixed assets -36,282 -36,576 -71,984
3. Payments for purchases of available-for-sale securities -25,103 -22,019 -52,219
4. Proceeds from sales of available-for-sale securities 33,514 22,133 24,513
5. Increase in investments in and advances to affiliates -141 -586 -448
6. Decrease in time deposits 9,159 3,815 944
7. Other, net -1,278 -336 750
----------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities -19,997 -33,395 -98,199
----------------------------------------------------------------------------------------------------------------------------
III. Cash Flows from Financing Activities:
1. Proceeds from long-term indebtedness 1,125 51,032 58,194
2. Repayment of long-term indebtedness -15,970 -11,559 -23,133
3. Increase (decrease) in short-term borrowings, net 30,244 -48,641 -73,393
4. Proceeds from issuance of long-term debt securities 1,000 10,000 11,000
5. Repayment of long-term debt securities -14,000 -11,553 -11,723
6. Cash dividends paid -5,181 -5,089 -10,176
7. Purchase of treasury stocks -3,643 -460 -17,281
8. Other, net -218 -292 -631
----------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities -6,643 -16,562 -67,143
----------------------------------------------------------------------------------------------------------------------------
IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents 754 -1,916 -1,329
----------------------------------------------------------------------------------------------------------------------------
V. Net Increase in Cash and Cash Equivalents 35,770 47,246 19,071
----------------------------------------------------------------------------------------------------------------------------
VI. Cash and Cash Equivalents at Beginning of Year 189,243 170,172 170,172
----------------------------------------------------------------------------------------------------------------------------
VII. Cash and Cash Equivalents at End of Period 225,013 217,418 189,243
----------------------------------------------------------------------------------------------------------------------------
18
6. SEGMENT INFORMATION
(1) Industry Segment Information
(Three months ended September 30, 2003 and 2002) (Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2003 September 30, 2002 Change %
-----------------------------------------------------------------------------------------------------------------------
OFFICE EQUIPMENT:
Net sales:
Unaffiliated customers 391,776 371,990 19,786 5.3
Intersegment - - - -
Total 391,776 371,990 19,786 5.3
-----------------------------------------------------------------------------------------------------------------------
Operating expenses 337,322 325,007 12,315 3.8
-----------------------------------------------------------------------------------------------------------------------
Operating income 54,454 46,983 7,471 15.9
Operating income on office equipment sales(%) 13.9 12.6
-----------------------------------------------------------------------------------------------------------------------
OTHER BUSINESSES:
Net sales:
Unaffiliated customers 58,861 56,560 2,301 4.1
Intersegment 538 754 -216 -28.6
Total 59,399 57,314 2,085 3.6
-----------------------------------------------------------------------------------------------------------------------
Operating expenses 58,825 60,766 -1,941 -3.2
-----------------------------------------------------------------------------------------------------------------------
Operating income 574 -3,452 4,026 -
Operating income on sales in other businesses (%) 1.0 -6.0
-----------------------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -538 -754 216 -
Total -538 -754 216 -
-----------------------------------------------------------------------------------------------------------------------
Operating expenses:
Intersegment -548 -736 188 -
Corporate 16,267 18,112 -1,845 -
Total 15,719 17,376 -1,657 -
-----------------------------------------------------------------------------------------------------------------------
Operating income -16,257 -18,130 1,873 -
-----------------------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
Unaffiliated customers 450,637 428,550 22,087 5.2
Intersegment - - - -
Total 450,637 428,550 22,087 5.2
-----------------------------------------------------------------------------------------------------------------------
Operating expenses 411,866 403,149 8,717 2.2
-----------------------------------------------------------------------------------------------------------------------
Operating income 38,771 25,401 13,370 52.6
Operating income on consolidated net sales(%) 8.6 5.9
-----------------------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
September 30, 2003 September 30, 2002 Change %
-----------------------------------------------------------------------------------------------------------------------
Office Equipment 1,196,927 1,168,995 27,932 2.4
Other Businesses 184,083 184,776 -693 -0.4
Elimination -7,596 -6,851 -745 10.9
Corporate assets 538,748 479,465 59,283 12.4
-----------------------------------------------------------------------------------------------------------------------
Total 1,912,162 1,826,385 85,777 4.7
-----------------------------------------------------------------------------------------------------------------------
Capital expenditure: (Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2003 September 30, 2002 Change %
-----------------------------------------------------------------------------------------------------------------------
Office Equipment 14,621 19,352 -4,731 -24.4
Other Businesses 2,665 1,194 1,471 123.2
Corporate 391 266 125 47.0
-----------------------------------------------------------------------------------------------------------------------
Total 17,677 20,812 -3,135 -15.1
-----------------------------------------------------------------------------------------------------------------------
Depreciation: (Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2003 September 30, 2002 Change %
-----------------------------------------------------------------------------------------------------------------------
Office Equipment 14,436 14,411 25 0.2
Other Businesses 1,694 1,802 -108 -6.0
Corporate 466 699 -233 -33.3
-----------------------------------------------------------------------------------------------------------------------
Total 16,596 16,912 -316 -1.9
-----------------------------------------------------------------------------------------------------------------------
19
(Half year ended September 30, 2003, 2002 and year ended March 31, 2003) (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2002 Change % March 31, 2003
----------------------------------------------------------------------------------------------------------------------------------
OFFICE EQUIPMENT:
Net sales:
Unaffiliated customers 775,508 749,357 26,151 3.5 1,520,574
Intersegment - - - - -
Total 775,508 749,357 26,151 3.5 1,520,574
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 672,809 655,773 17,036 2.6 1,329,776
----------------------------------------------------------------------------------------------------------------------------------
Operating income 102,699 93,584 9,115 9.7 190,798
Operating income on office equipment sales(%) 13.2 12.5 12.5
----------------------------------------------------------------------------------------------------------------------------------
OTHER BUSINESSES:
Net sales:
Unaffiliated customers 112,582 107,464 5,118 4.8 217,784
Intersegment 1,165 1,492 -327 -21.9 2,755
Total 113,747 108,956 4,791 4.4 220,539
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 110,761 112,047 -1,286 -1.1 222,772
----------------------------------------------------------------------------------------------------------------------------------
Operating income 2,986 -3,091 6,077 - -2,233
Operating income on sales in other businesses (%) 2.6 -2.8 -1.0
----------------------------------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -1,165 -1,492 327 - -2,755
Total -1,165 -1,492 327 - -2,755
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Intersegment -1,195 -1,487 292 - -2,726
Corporate 28,460 29,160 -700 - 54,882
Total 27,265 27,673 -408 - 52,156
----------------------------------------------------------------------------------------------------------------------------------
Operating income -28,430 -29,165 735 - -54,911
----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
Unaffiliated customers 888,090 856,821 31,269 3.6 1,738,358
Intersegment - - - - -
Total 888,090 856,821 31,269 3.6 1,738,358
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 810,835 795,493 15,342 1.9 1,604,704
----------------------------------------------------------------------------------------------------------------------------------
Operating income 77,255 61,328 15,927 26.0 133,654
Operating income on consolidated net sales(%) 8.7 7.2 7.7
----------------------------------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
September 30, 2003 September 30, 2002 Change % March 31, 2003
----------------------------------------------------------------------------------------------------------------------------------
Office Equipment 1,196,927 1,168,995 27,932 2.4 1,198,706
Other Businesses 184,083 184,776 -693 -0.4 176,296
Elimination -7,596 -6,851 -745 10.9 -6,908
Corporate assets 538,748 479,465 59,283 12.4 516,828
----------------------------------------------------------------------------------------------------------------------------------
Total 1,912,162 1,826,385 85,777 4.7 1,884,922
----------------------------------------------------------------------------------------------------------------------------------
Capital expenditure: (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2002 Change % March 31, 2003
----------------------------------------------------------------------------------------------------------------------------------
Office Equipment 31,938 35,202 -3,264 -9.3 65,720
Other Businesses 3,916 2,673 1,243 46.5 7,213
Corporate 480 546 -66 -12.1 1,023
----------------------------------------------------------------------------------------------------------------------------------
Total 36,334 38,421 -2,087 -5.4 73,956
----------------------------------------------------------------------------------------------------------------------------------
Depreciation: (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2002 Change % March 31, 2003
----------------------------------------------------------------------------------------------------------------------------------
Office Equipment 29,378 29,718 -340 -1.1 60,687
Other Businesses 3,349 3,115 234 7.5 6,917
Corporate 895 1,062 -167 -15.7 1,954
----------------------------------------------------------------------------------------------------------------------------------
Total 33,622 33,895 -273 -0.8 69,558
----------------------------------------------------------------------------------------------------------------------------------
20
(2) Geographic Segment Information
(Three months ended September 30, 2003 and 2002) (Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30,2003 September 30,2002 Change %
-----------------------------------------------------------------------------------------------------------------------
JAPAN:
Net sales:
External customers 240,584 238,610 1,974 0.8
Intersegment 87,257 74,386 12,871 17.3
Total 327,841 312,996 14,845 4.7
-----------------------------------------------------------------------------------------------------------------------
Operating expenses 304,898 301,485 3,413 1.1
-----------------------------------------------------------------------------------------------------------------------
Operating income 22,943 11,511 11,432 99.3
Operating income on sales in Japan(%) 7.0 3.7
-----------------------------------------------------------------------------------------------------------------------
THE AMERICAS:
Net sales:
External customers 84,431 82,734 1,697 2.1
Intersegment 1,410 1,278 132 10.3
Total 85,841 84,012 1,829 2.2
-----------------------------------------------------------------------------------------------------------------------
Operating expenses 80,451 77,845 2,606 3.3
-----------------------------------------------------------------------------------------------------------------------
Operating income 5,390 6,167 -777 -12.6
Operating income on sales in the Americas(%) 6.3 7.3
-----------------------------------------------------------------------------------------------------------------------
EUROPE:
Net sales:
External customers 97,797 82,046 15,751 19.2
Intersegment 715 535 180 33.6
Total 98,512 82,581 15,931 19.3
-----------------------------------------------------------------------------------------------------------------------
Operating expenses 94,490 78,871 15,619 19.8
-----------------------------------------------------------------------------------------------------------------------
Operating income 4,022 3,710 312 8.4
Operating income on sales in Europe(%) 4.1 4.5
-----------------------------------------------------------------------------------------------------------------------
OTHER:
Net sales:
External customers 27,825 25,160 2,665 10.6
Intersegment 24,110 19,254 4,856 25.2
Total 51,935 44,414 7,521 16.9
-----------------------------------------------------------------------------------------------------------------------
Operating expenses 49,722 42,112 7,610 18.1
-----------------------------------------------------------------------------------------------------------------------
Operating income 2,213 2,302 -89 -3.9
Operating income on sales in other(%) 4.3 5.2
-----------------------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -113,492 -95,453 -18,039 -
Total -113,492 -95,453 -18,039 -
-----------------------------------------------------------------------------------------------------------------------
Operating expenses: -117,695 -97,164 -20,531 -
------------------------------------------------------------------------------------- ---------------------------------
Operating income 4,203 1,711 2,492 -
-----------------------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
External customers 450,637 428,550 22,087 5.2
Intersegment - - - -
Total 450,637 428,550 22,087 5.2
-----------------------------------------------------------------------------------------------------------------------
Operating expenses 411,866 403,149 8,717 2.2
-----------------------------------------------------------------------------------------------------------------------
Operating income 38,771 25,401 13,370 52.6
Operating income on consolidated net sales(%) 8.6 5.9
-----------------------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
September 30, 2003 September 30, 2002 Change %
-----------------------------------------------------------------------------------------------------------------------
Japan 1,061,188 1,047,667 13,521 1.3
The Americas 192,700 204,813 -12,113 -5.9
Europe 186,650 165,816 20,834 12.6
Other 69,154 59,483 9,671 16.3
Elimination -136,278 -130,859 -5,419 4.1
Corporate assets 538,748 479,465 59,283 12.4
-----------------------------------------------------------------------------------------------------------------------
Total 1,912,162 1,826,385 85,777 4.7
-----------------------------------------------------------------------------------------------------------------------
21
(Half year ended September 30, 2003, 2002 and year ended March 31, 2003) (Millions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2003 September 30, 2002 Change % March 31, 2003
-----------------------------------------------------------------------------------------------------------------------------------
JAPAN:
Net sales:
External customers 478,922 478,814 108 0.0 954,310
Intersegment 184,331 152,398 31,933 21.0 320,596
Total 663,253 631,212 32,041 5.1 1,274,906
-----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 606,466 593,978 12,488 2.1 1,188,760
-----------------------------------------------------------------------------------------------------------------------------------
Operating income 56,787 37,234 19,553 52.5 86,146
Operating income on sales in Japan(%) 8.6 5.9 6.8
-----------------------------------------------------------------------------------------------------------------------------------
THE AMERICAS:
Net sales:
External customers 161,965 164,940 -2,975 -1.8 333,935
Intersegment 2,992 2,537 455 17.9 5,620
Total 164,957 167,477 -2,520 -1.5 339,555
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses 157,274 159,936 -2,662 -1.7 325,228
------------------------------------------------------------------------------------------------------------------------------------
Operating income 7,683 7,541 142 1.9 14,327
Operating income on sales in the Americas(%) 4.7 4.5 4.2
------------------------------------------------------------------------------------------------------------------------------------
EUROPE:
Net sales:
External customers 196,560 165,668 30,892 18.6 352,943
Intersegment 1,771 1,432 339 23.7 3,019
Total 198,331 167,100 31,231 18.7 355,962
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses 188,819 160,097 28,722 17.9 337,693
------------------------------------------------------------------------------------------------------------------------------------
Operating income 9,512 7,003 2,509 35.8 18,269
Operating income on sales in Europe(%) 4.8 4.2 5.1
------------------------------------------------------------------------------------------------------------------------------------
OTHER:
Net sales:
External customers 50,643 47,399 3,244 6.8 97,170
Intersegment 49,225 34,830 14,395 41.3 72,664
Total 99,868 82,229 17,639 21.5 169,834
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses 95,302 77,669 17,633 22.7 159,864
------------------------------------------------------------------------------------------------------------------------------------
Operating income 4,566 4,560 6 0.1 9,970
Operating income on sales in other(%) 4.6 5.5 5.9
------------------------------------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -238,319 -191,197 -47,122 - -401,899
Total -238,319 -191,197 -47,122 - -401,899
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses: -237,026 -196,187 -40,839 - -406,841
------------------------------------------------------------------------------------------------------------------------------------
Operating income -1,293 4,990 -6,283 - 4,942
------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
External customers 888,090 856,821 31,269 3.6 1,738,358
Intersegment - - - - -
Total 888,090 856,821 31,269 3.6 1,738,358
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses 810,835 795,493 15,342 1.9 1,604,704
------------------------------------------------------------------------------------------------------------------------------------
Operating income 77,255 61,328 15,927 26.0 133,654
Operating income on consolidated net sales(%) 8.7 7.2 7.7
------------------------------------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
September 30, 2003 September 30, 2002 Change % March 31, 2003
------------------------------------------------------------------------------------------------------------------------------------
Japan 1,061,188 1,047,667 13,521 1.3 1,064,857
The Americas 192,700 204,813 -12,113 -5.9 201,359
Europe 186,650 165,816 20,834 12.6 174,541
Other 69,154 59,483 9,671 16.3 70,458
Elimination -136,278 -130,859 -5,419 4.1 -143,121
Corporate assets 538,748 479,465 59,283 12.4 516,828
------------------------------------------------------------------------------------------------------------------------------------
Total 1,912,162 1,826,385 85,777 4.7 1,884,922
------------------------------------------------------------------------------------------------------------------------------------
22
7. SIGNIFICANT ACCOUNTING POLICIES (CONSOLIDATED)
1. ITEMS RELATING TO THE SCALE OF CONSOLIDATION AND THE APPLICATION OF THE
EQUITY METHOD
Consolidated subsidiaries:
No addition
Removal : Office Research Institute Co., Ltd.
Companies accounted for by the equity method: No change
2. CONSOLIDATED ACCOUNTING POLICIES (SUMMARY)
(1) 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.
(2) 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.
(3) Inventories
Inventories are mainly stated at the lower of average cost or market. Inventory
costs include raw materials, labor and manufacturing overheads.
(4) 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."
(5) 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.
(6) 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 generally accepted accounting
principles. Actual results could differ from those estimates.
23
8. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) FAIR VALUE OF MARKETABLE SECURITIES
The securities and the respective cost, gross unrealized holding gains, gross
unrealized holding losses and fair value as of September 30, 2003 and March 31,
2003 are as follows:
(Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
September 30, 2003
-----------------------------------------------------------------------------------------------------------------------
Gross unrealized Gross unrealized
Cost holding gains holding losses Fair value
-----------------------------------------------------------------------------------------------------------------------
Current:
Corporate debt securities 121 4 - 125
Other 11 - - 11
-----------------------------------------------------------------------------------------------------------------------
132 4 - 136
-----------------------------------------------------------------------------------------------------------------------
Noncurrent:
Equity securities 6,088 8,146 126 14,108
Corporate debt securities 45,013 2 83 44,932
Other 1,261 266 12 1,515
Nonmarketable securities (at cost) 7,171 - - 7,171
-----------------------------------------------------------------------------------------------------------------------
59,533 8,414 221 67,726
-----------------------------------------------------------------------------------------------------------------------
(Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
March 31, 2003
-----------------------------------------------------------------------------------------------------------------------
Gross unrealized Gross unrealized
Cost holding gains holding losses Fair value
-----------------------------------------------------------------------------------------------------------------------
Current:
Corporate debt securities 107 - - 107
Other - - - -
-----------------------------------------------------------------------------------------------------------------------
107 - - 107
-----------------------------------------------------------------------------------------------------------------------
Noncurrent:
Equity securities 6,328 5,148 519 10,957
Corporate debt securities 45,020 5 195 44,830
Other 9,459 10 654 8,815
Nonmarketable securities (at cost) 7,371 - - 7,371
-----------------------------------------------------------------------------------------------------------------------
68,178 5,163 1,368 71,973
-----------------------------------------------------------------------------------------------------------------------
(2) DERIVATIVE
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
September 30, 2003, and March 31, 2003 are as follows:
(Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
September 30, 2003
-----------------------------------------------------------------------------------------------------------------------
Carrying Estimated
amount Fair value
-----------------------------------------------------------------------------------------------------------------------
Interest rate swap agreements, net 2,543 2,543
Foreign currency contracts-net credit 1,136 1,136
Currency options-net credit 1,147 1,147
-----------------------------------------------------------------------------------------------------------------------
Total 4,826 4,826
-----------------------------------------------------------------------------------------------------------------------
(Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
March 31, 2003
-----------------------------------------------------------------------------------------------------------------------
Carrying Estimated
amount Fair value
-----------------------------------------------------------------------------------------------------------------------
Interest rate swap agreements, net 3,985 3,985
Foreign currency contracts-net credit -594 -594
Currency options -466 -466
-----------------------------------------------------------------------------------------------------------------------
Total 2,925 2,925
-----------------------------------------------------------------------------------------------------------------------
(3) TRANSACTIONS OF RICOH WITH AFFILIATES (Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
September 30, 2003 March 31, 2003
-----------------------------------------------------------------------------------------------------------------------
Account balances:
Receivables 5,768 6,434
Payables 2,524 1,604
-----------------------------------------------------------------------------------------------------------------------
(Millions of yen)
-----------------------------------------------------------------------------------------------------------------------
Half year ended Year ended
Sept. 30, 2003 March 31, 2003
-----------------------------------------------------------------------------------------------------------------------
Transactions:
Sales 11,196 26,510
Purchases 6,485 19,808
Dividend income 742 1,236
-----------------------------------------------------------------------------------------------------------------------
24
-APPENDIX A- (Half year ended September 30, 2003)
1. CONSOLIDATED SALES BY PRODUCT CATEGORY
(Three months ended September 30, 2003 and 2002) (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended Change excluding
September 30, 2003 September 30, 2002 Change % exchange impact %
------------------------------------------------------------------------------------------------------------------------------------
(Office Equipment)
Imaging Solutions:
Digital Imaging Systems 150,161 153,096 -2,935 -1.9 -6,966 -4.6
Percentage of net sales (%) 33.3 35.7
Domestic 58,879 64,916 -6,037 -9.3 -6,037 -9.3
Overseas 91,282 88,180 3,102 3.5 -929 -1.1
Other Imaging Systems 52,165 57,345 -5,180 -9.0 -7,271 -12.7
Percentage of net sales (%) 11.6 13.4
Domestic 17,215 18,555 -1,340 -7.2 -1,340 -7.2
Overseas 34,950 38,790 -3,840 -9.9 -5,931 -15.3
Total Imaging Solutions 202,326 210,441 -8,115 -3.9 -14,237 -6.8
Percentage of net sales (%) 44.9 49.1
Domestic 76,094 83,471 -7,377 -8.8 -7,377 -8.8
Overseas 126,232 126,970 -738 -0.6 -6,860 -5.4
------------------------------------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 117,351 94,755 22,596 23.8 18,724 19.8
Percentage of net sales (%) 26.0 22.1
Domestic 47,893 41,908 5,985 14.3 5,985 14.3
Overseas 69,458 52,847 16,611 31.4 12,739 24.1
Other Input/Output Systems 18,304 13,672 4,632 33.9 4,110 30.1
Percentage of net sales (%) 4.1 3.2
Domestic 1,101 2,495 -1,394 -55.9 -1,394 -55.9
Overseas 17,203 11,177 6,026 53.9 5,504 49.2
Total Network Input/Output Systems 135,655 108,427 27,228 25.1 22,834 21.1
Percentage of net sales (%) 30.1 25.3
Domestic 48,994 44,403 4,591 10.3 4,591 10.3
Overseas 86,661 64,024 22,637 35.4 18,243 28.5
------------------------------------------------------------------------------------------------------------------------------------
Network System Solutions 53,795 53,122 673 1.3 605 1.1
Percentage of net sales (%) 11.9 12.4
Domestic 52,593 52,469 124 0.2 124 0.2
Overseas 1,202 653 549 84.1 481 73.7
------------------------------------------------------------------------------------------------------------------------------------
Office Equipment Total 391,776 371,990 19,786 5.3 9,202 2.5
Percentage of net sales (%) 86.9 86.8
Domestic 177,681 180,343 -2,662 -1.5 -2,662 -1.5
Overseas 214,095 191,647 22,448 11.7 11,864 6.2
The Americas 87,892 86,032 1,860 2.2 3,193 3.7
Europe 97,087 81,823 15,264 18.7 4,309 5.3
Other 29,116 23,792 5,324 22.4 4,362 18.3
------------------------------------------------------------------------------------------------------------------------------------
(Other Businesses)
Other Businesses 58,861 56,560 2,301 4.1 1,606 2.8
Percentage of net sales (%) 13.1 13.2
Domestic 46,620 44,388 2,232 5.0 2,232 5.0
Overseas 12,241 12,172 69 0.6 -626 -5.1
The Americas 281 230 51 22.2 45 19.6
Europe 1,245 1,086 159 14.6 32 2.9
Other 10,715 10,856 -141 -1.3 -703 -6.5
------------------------------------------------------------------------------------------------------------------------------------
Grand Total 450,637 428,550 22,087 5.2 10,808 2.5
Percentage of net sales (%) 100.0 100.0
Domestic 224,301 224,731 -430 -0.2 -430 -0.2
Percentage of net sales (%) 49.8 52.4
Overseas 226,336 203,819 22,517 11.0 11,238 5.5
Percentage of net sales (%) 50.2 47.6
The Americas 88,173 86,262 1,911 2.2 3,238 3.8
Percentage of net sales (%) 19.6 20.1
Europe 98,332 82,909 15,423 18.6 4,341 5.2
Percentage of net sales (%) 21.8 19.4
Other 39,831 34,648 5,183 15.0 3,659 10.6
Percentage of net sales (%) 8.8 8.1
------------------------------------------------------------------------------------------------------------------------------------
Reference: Exchange rate
US$ 1 Yen 117.61 Yen 119.19 Yen -1.58
EURO 1 Yen 132.27 Yen 117.34 Yen 14.93
Each category includes the following product line:
Digital Imaging Systems Digital PPCs, color PPCs, digital duplicators and
facsimile machines
Other Imaging Systems Analog PPCs, diazo copiers, and thermal paper
Printing Systems MFPs(multifunctional printers), laser printers and
software
Other Input/Output Systems Optical discs and system scanners
Network System Solutions Personal computers, PC servers, network systems
and network related software
Other Businesses Optical equipments, metering equipments and
semiconductors
A1
(Half year ended September 30, 2003, 2002 and year ended March 31, 2003) (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Change excluding Year ended
September 30, 2003 September 30, 2002 Change % exchange impact % March 31, 2003
------------------------------------------------------------------------------------------------------------------------------------
(Office Equipment)
Imaging Solutions:
Digital Imaging Systems 309,158 309,385 -227 -0.1 -5,860 -1.9 626,967
Percentage of net sales (%) 34.8 36.1 36.1
Domestic 124,773 135,866 -11,093 -8.2 -11,093 -8.2 265,654
Overseas 184,385 173,519 10,866 6.3 5,233 3.0 361,313
Other Imaging Systems 105,936 120,977 -15,041 -12.4 -18,264 -15.1 232,746
Percentage of net sales (%) 11.9 14.1 13.4
Domestic 36,497 40,961 -4,464 -10.9 -4,464 -10.9 80,520
Overseas 69,439 80,016 -10,577 -13.2 -13,800 -17.2 152,226
Total Imaging Solutions 415,094 430,362 -15,268 -3.5 -24,124 -5.6 859,713
Percentage of net sales (%) 46.7 50.2 49.5
Domestic 161,270 176,827 -15,557 -8.8 -15,557 -8.8 346,174
Overseas 253,824 253,535 289 0.1 -8,567 -3.4 513,539
----------------------------------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 233,457 189,408 44,049 23.3 37,899 20.0 408,830
Percentage of net sales (%) 26.3 22.1 23.5
Domestic 100,351 82,016 18,335 22.4 18,335 22.4 177,510
Overseas 133,106 107,392 25,714 23.9 19,564 18.2 231,320
Other Input/Output Systems 29,725 29,535 190 0.6 -449 -1.5 54,549
Percentage of net sales (%) 3.3 3.5 3.2
Domestic 2,743 5,958 -3,215 -54.0 -3,215 -54.0 10,100
Overseas 26,982 23,577 3,405 14.4 2,766 11.7 44,449
Total Network Input/Output Systems 263,182 218,943 44,239 20.2 37,450 17.1 463,379
Percentage of net sales (%) 29.6 25.6 26.7
Domestic 103,094 87,974 15,120 17.2 15,120 17.2 187,610
Overseas 160,088 130,969 29,119 22.2 22,330 17.0 275,769
----------------------------------------------------------------------------------------------------------------------------------
Network System Solutions 97,232 100,052 -2,820 -2.8 -2,900 -2.9 197,482
Percentage of net sales (%) 11.0 11.7 11.3
Domestic 95,260 98,754 -3,494 -3.5 -3,494 -3.5 194,873
Overseas 1,972 1,298 674 51.9 594 45.8 2,609
----------------------------------------------------------------------------------------------------------------------------------
Office Equipment Total 775,508 749,357 26,151 3.5 10,426 1.4 1,520,574
Percentage of net sales (%) 87.3 87.5 87.5
Domestic 359,624 363,555 -3,931 -1.1 -3,931 -1.1 728,657
Overseas 415,884 385,802 30,082 7.8 14,357 3.7 791,917
The Americas 166,800 169,927 -3,127 -1.8 3,721 2.2 342,568
Europe 194,700 164,431 30,269 18.4 8,600 5.2 349,577
Other 54,384 51,444 2,940 5.7 2,036 4.0 99,772
----------------------------------------------------------------------------------------------------------------------------------
(Other Businesses)
Other Businesses 112,582 107,464 5,118 4.8 4,144 3.9 217,784
Percentage of net sales (%) 12.7 12.5 12.5
Domestic 89,012 86,020 2,992 3.5 2,992 3.5 167,365
Overseas 23,570 21,444 2,126 9.9 1,152 5.4 50,419
The Americas 864 506 358 70.8 393 77.7 1,372
Europe 2,251 1,738 513 29.5 274 15.8 4,900
Other 20,455 19,200 1,255 6.5 485 2.5 44,147
----------------------------------------------------------------------------------------------------------------------------------
Grand Total 888,090 856,821 31,269 3.6 14,570 1.7 1,738,358
Percentage of net sales (%) 100.0 100.0 100.0
Domestic 448,636 449,575 -939 -0.2 -939 -0.2 896,022
Percentage of net sales (%) 50.5 52.5 51.5
Overseas 439,454 407,246 32,208 7.9 15,509 3.8 842,336
Percentage of net sales (%) 49.5 47.5 48.5
The Americas 167,664 170,433 -2,769 -1.6 4,114 2.4 343,940
Percentage of net sales (%) 18.9 19.9 19.8
Europe 196,951 166,169 30,782 18.5 8,874 5.3 354,477
Percentage of net sales (%) 22.2 19.4 20.4
Other 74,839 70,644 4,195 5.9 2,521 3.6 143,919
Percentage of net sales (%) 8.4 8.2 8.3
----------------------------------------------------------------------------------------------------------------------------------
Reference: Exchange rate
US$ 1 Yen 118.06 Yen 123.08 Yen -5.02 Yen 121.96
EURO 1 Yen 133.47 Yen 116.95 Yen 16.52 Yen 121.00
Each category includes the following product line:
Digital Imaging Systems Digital PPCs, color PPCs, digital duplicators and
facsimile machines
Other Imaging Systems Analog PPCs, diazo copiers, and thermal paper
Printing Systems MFPs(multifunctional printers), laser printers and
software
Other Input/Output Systems Optical discs and system scanners
Network System Solutions Personal computers, PC servers, network systems
and network related software
Other Businesses Optical equipments, metering equipments and
semiconductors
A2
2. FORECAST OF CONSOLIDATED PERFORMANCE
(Billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Half year Three months Half year
ended ended ended Year ended
Sept. 30, Dec. 31, Mar. 31, Mar. 31,
2003 Change 2003 Change 2004 Change 2004 Change
Results % Forecast % Forecast % Forecast %
------------------------------------------------------------------------------------------------------------------------------------
Net sales 888.0 3.6 436.5 3.8 911.9 3.4 1,800.0 3.5
Gross profit 388.1 7.6 189.7 2.6 395.4 2.8 783.6 5.1
Operating income 77.2 26.0 35.7 6.9 74.7 3.3 152.0 13.7
Income before income taxes 71.4 28.3 34.7 15.7 72.5 7.1 144.0 16.6
Net income 42.2 26.1 20.0 12.4 42.7 9.6 85.0 17.2
------------------------------------------------------------------------------------------------------------------------------------
Net income per share (yen) 56.79 - 26.92 - 57.63 - 114.42 -
------------------------------------------------------------------------------------------------------------------------------------
Capital expenditure 36.3 - 19.0 - 38.6 - 75.0 -
Depreciation for tangible fixed assets 33.6 - 18.0 - 36.3 - 70.0 -
R&D expenditure 44.2 - 22.0 - 45.7 - 90.0 -
------------------------------------------------------------------------------------------------------------------------------------
Exchange rate (Yen/US$) 118.06 - 108.00 - 108.00 - 113.03 -
Exchange rate (Yen/EURO) 133.47 - 128.00 - 128.00 - 130.74 -
------------------------------------------------------------------------------------------------------------------------------------
3. FORECAST OF CONSOLIDATED SALES BY PRODUCT CATEGORY
(Billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Half year ended March 31, 2004 Year ended March 31, 2004
------------------------------ -------------------------
Forecast Change Forecast(*) Change Forecast Change Forecast(*) Change
% % % %
------------------------------------------------------------------------------------------------------------------------------------
(Office Equipment)
Imaging Solutions:
Digital Imaging Systems 299.7 -5.6 305.8 -3.7 608.8 -2.9 609.3 -2.8
Domestic 116.8 -10.0 116.8 -10.0 241.6 -9.1 241.6 -9.1
Overseas 182.9 -2.6 189.0 0.6 367.2 1.7 367.7 1.8
Other Imaging Systems 94.0 -15.8 96.0 -14.1 200.0 -14.1 198.7 -14.6
Domestic 36.0 -9.0 36.0 -9.0 72.5 -10.0 72.5 -10.0
Overseas 58.0 -19.6 60.0 -16.9 127.5 -16.2 126.2 -17.1
Total Imaging Solutions 393.8 -8.3 401.8 -6.4 808.9 -5.9 808.0 -6.0
Domestic 152.8 -9.8 152.8 -9.8 314.1 -9.3 314.1 -9.3
Overseas 240.9 -7.3 249.0 -4.2 494.8 -3.6 493.9 -3.8
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Network Input/Output Systems:
Printing Systems 277.4 26.5 283.3 29.1 510.9 25.0 510.6 24.9
Domestic 118.7 24.4 118.7 24.4 219.1 23.4 219.1 23.4
Overseas 158.7 28.1 164.5 32.8 291.8 26.2 291.5 26.0
Other Input/Output Systems 30.4 21.5 30.7 23.0 60.1 10.2 59.8 9.7
Domestic 2.0 -50.3 2.0 -50.3 4.8 -52.5 4.8 -52.5
Overseas 28.3 35.8 28.7 37.5 55.3 24.5 55.0 23.8
Total Network Input/Output Systems 307.8 25.9 314.0 28.5 571.0 23.2 570.4 23.1
Domestic 120.8 21.2 120.8 21.2 223.9 19.3 223.9 19.3
Overseas 187.0 29.2 193.2 33.5 347.1 25.9 346.5 25.7
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Network System Solutions 95.6 -1.8 95.7 -1.7 192.9 -2.3 192.8 -2.3
Domestic 93.7 -2.5 93.7 -2.5 189.0 -3.0 189.0 -3.0
Overseas 1.9 47.6 2.0 52.6 3.9 49.8 3.8 49.2
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Office Equipment Total 797.3 3.4 811.6 5.2 1,572.8 3.4 1,571.4 3.3
Domestic 367.3 0.6 367.3 0.6 727.0 -0.2 727.0 -0.2
Overseas 429.9 5.9 444.2 9.4 845.8 6.8 844.4 6.6
The Americas 163.1 -5.5 182.5 5.7 329.9 -3.7 356.1 4.0
Europe 212.2 14.7 207.4 12.0 406.9 16.4 380.4 8.8
Other 54.5 12.8 54.3 12.4 108.9 9.2 107.8 8.1
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(Other Businesses)
Other Businesses 114.5 3.8 114.2 3.6 227.1 4.3 225.8 3.7
Domestic 83.9 3.2 83.9 3.2 173.0 3.4 173.0 3.4
Overseas 30.5 5.5 30.2 4.5 54.1 7.4 52.8 4.8
The Americas 1.0 19.5 1.1 32.8 1.8 38.4 2.0 49.3
Europe 3.3 6.5 3.1 0.9 5.6 14.7 5.2 6.1
Other 26.1 4.9 25.9 3.9 46.6 5.6 45.6 3.3
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Grand Total 911.9 3.4 925.9 5.0 1,800.0 3.5 1,797.3 3.4
Domestic 451.3 1.1 451.3 1.1 900.0 0.4 900.0 0.4
Overseas 460.5 5.9 474.5 9.1 900.0 6.8 897.3 6.5
The Americas 164.1 -5.4 183.6 5.9 331.8 -3.5 358.2 4.2
Europe 215.6 14.5 210.5 11.8 412.6 16.4 385.6 8.8
Other 80.7 10.1 80.2 9.5 155.5 8.1 153.4 6.6
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* Excluding foreign exchange impact
A3
-APPENDIX B-
[SCHEDULE 1] CONSOLIDATED PERFORMANCE
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Half year ended Half year ended Half year ended Half year ended Half year ended
September 30, September 30, September 30, September 30, September 30,
1999 2000 2001 2002 2003
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Net sales (Billions of yen) 717.5 735.3 820.0 856.8 888.0
Net income (Billions of yen) 20.4 25.8 28.4 33.5 42.2
Return on equity (%) 4.1 4.7 5.0 5.2 6.2
Return on assets (%) 2.1 3.0 3.1 3.0 3.8
Net income per share (Yen) 29.55 37.27 40.97 46.11 56.79
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[SCHEDULE 2] CONSOLIDATED SALES BY PRODUCT LINE
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Half year ended Half year ended Half year ended Half year ended Half year ended
September 30, September 30, September 30, September 30, September 30,
1999 2000 2001 2002 2003
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Imaging solutions (Billions of yen) 455.9 422.2 458.3 430.3 415.0
Network I/O systems (Billions of yen) 82.1 108.6 168.3 218.9 263.1
Network system solutions (Billions of yen) 89.4 100.4 102.9 100.0 97.2
Other Businesses (Billions of yen) 89.9 103.8 90.5 107.4 112.5
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Imaging solutions (%) 63.6 57.4 55.9 50.2 46.7
Network I/O systems (%) 11.4 14.8 20.5 25.6 29.6
Network system solutions (%) 12.5 13.7 12.6 11.7 11.0
Other Businesses (%) 12.5 14.1 11.0 12.5 12.7
Total (%) 100.0 100.0 100.0 100.0 100.0
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[SCHEDULE 3] CONSOLIDATED SALES BY GEOGRAPHIC AREA
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Half year ended Half year ended Half year ended Half year ended Half year ended
September 30, September 30, September 30, September 30, September 30,
1999 2000 2001 2002 2003
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Japan (Billions of yen) 421.8 456.1 452.7 449.5 448.6
The Americas (Billions of yen) 122.8 112.4 162.6 170.4 167.6
Europe (Billions of yen) 130.9 117.1 148.1 166.1 196.9
Others (Billions of yen) 41.8 49.5 56.5 70.6 74.8
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Japan (%) 58.8 62.0 55.2 52.5 50.5
The Americas (%) 17.1 15.3 19.8 19.9 18.9
Europe (%) 18.3 16.0 18.1 19.4 22.2
Others (%) 5.8 6.7 6.9 8.2 8.4
Total (%) 100.0 100.0 100.0 100.0 100.0
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A4