FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of April, 2004
Commission File Number 2 - 68279
RICOH COMPANY, LTD.
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(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
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Zenji Miura
Executive Vice President
General Manager of the
Finance & Accounting Division
April 28, 2004
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RICOH
FLASH REPORT
Year Ended March 31, 2004
(Results for the Period from April 1, 2003 to March 31, 2004)
Three Months Ended March 31, 2004
(Results for the Period from January 1, 2004 to March 31, 2004)
PERFORMANCE OUTLINE (CONSOLIDATED)
(1) Year ended March 31, 2004, 2003 and 2005 (Forecast)
(Billions of yen)
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Year ended Year ended Year ended
March 31, 2004 March 31, 2003 Change March 31, 2005 Change
(Results) (Results) (Forecast)
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Domestic sales 914.0 896.0 2.0% 935.0 2.3%
Overseas sales 866.1 842.3 2.8% 875.0 1.0%
Net sales 1,780.2 1,738.3 2.4% 1,810.0 1.7%
Gross profit 765.6 745.3 2.7% 785.0 2.5%
Operating income 150.0 133.6 12.2% 175.0 16.7%
Income before income taxes 143.0 123.4 15.9% 165.0 15.3%
Net income 91.7 72.5 26.6% 95.0 3.5%
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Exchange rate (Yen/US$) 113.09 121.96 -8.87 105.00 -8.09
Exchange rate (Yen/EURO) 132.65 121.00 11.65 130.00 -2.65
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Net income per share (yen) 123.63 99.79 23.84 128.57 4.94
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Return on equity (%) 12.6 11.2 1.4 -- --
Income before income taxes on total assets (%) 7.7 6.6 1.1 -- --
Income before income taxes on net sales (%) 8.0 7.1 0.9 9.1 1.1
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Total assets 1,852.7 1,884.9 -32.1 -- --
Shareholders' equity 795.1 657.5 137.6 -- --
Interest-bearing debt 432.7 484.6 -51.8 -- --
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Equity ratio (%) 42.9 34.9 8.0 -- --
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Shareholder's equity per share (yen) 1,076.11 885.41 190.7 -- --
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Cash flows from operating activities 154.9 185.7 -30.8 -- --
Cash flows from investing activities -63.3 -98.1 34.8 -- --
Cash flows from financing activities -74.8 -67.1 -7.6 -- --
Cash and cash equivalents at end of period 203.0 189.2 13.7 -- --
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Capital expenditures 75.5 73.9 1.5 74.5 -1.0
Depreciation for tangible fixed assets 67.6 69.5 -1.8 69.0 1.3
R&D expenditures 92.5 83.5 8.9 100.0 7.4
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Number of employees (Japan) (thousand people) 38.8 39.5 -0.7 -- --
Number of employees (Overseas) (thousand people) 34.4 35.1 -0.8 -- --
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RICOH COMPANY, LTD.
* The Company bases the forecast estimates for March 31, 2005 above upon
information currently available to management, which involves risks and
uncertainties that could cause actual results to differ materially from those
projected.
1
(2) Three months ended March 31, 2004 and 2003
(Billions of yen)
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Three months Three months
ended ended
March 31, 2004 March 31, 2003 Change
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Domestic sales 252.5 236.2 6.9%
Overseas sales 218.7 224.5 -2.6%
Net sales 471.2 460.7 2.3%
Gross profit 191.7 199.7 -4.0%
Operating income 36.5 38.9 -6.2%
Income before income taxes 38.3 37.8 1.5%
Net income 29.8 21.1 40.8%
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Exchange rate (Yen/US$) 107.31 119.04 -11.73
Exchange rate (Yen/EURO) 134.10 127.63 6.47
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Net income per share (yen) 40.31 29.17 11.14
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Return on equity (%) 4.0 3.2 0.8
Income before income taxes on total assets (%) 2.0 2.0 0.0
Income before income taxes on net sales (%) 8.1 8.2 -0.1
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Capital expenditures 23.6 18.8 4.8
Depreciation for tangible fixed assets 18.2 18.1 0.1
R&D expenditures 24.0 22.4 1.5
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(3) Three months ended June 30, 2004 (Forecast) and 2003
(Billions of yen)
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Three months Three months
ended ended
June 30, 2004 June 30, 2003
(Forecast) (Results) Change
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Domestic sales 233.0 224.3 3.9%
Overseas sales 208.0 213.1 -2.4%
Net sales 441.0 437.4 0.8%
Gross profit 192.3 192.7 -0.2%
Operating income 39.0 38.4 1.3%
Income before income taxes 37.5 37.3 0.5%
Net income 22.5 22.3 0.6%
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Exchange rate (Yen/US$) 105.00 118.52 -13.52
Exchange rate (Yen/EURO) 130.00 134.67 -4.67
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Capital expenditures 18.0 18.6 -0.6
Depreciation for tangible fixed assets 17.0 17.0 0.0
R&D expenditures 22.0 19.3 2.6
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(4) Half year ended September 30, 2004 (Forecast) and 2003
(Billions of yen)
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Half year Half year
ended ended
September 30, September 30,
2004 2003
(Forecast) (Results) Change
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Domestic sales 466.0 448.6 3.9%
Overseas sales 429.0 439.4 -2.4%
Net sales 895.0 888.0 0.8%
Gross profit 386.8 388.1 -0.3%
Operating income 78.0 77.2 1.0%
Income before income taxes 74.5 71.4 4.3%
Net income 43.8 42.2 3.6%
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Exchange rate (Yen/US$) 105.00 118.06 -13.06
Exchange rate (Yen/EURO) 130.00 133.47 -3.47
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Capital expenditures 37.0 36.3 0.6
Depreciation for tangible fixed assets 34.0 33.6 0.3
R&D expenditures 50.0 44.2 5.7
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2
RICOH COMPANY, LTD. AND CONSOLIDATED SUBSIDIARIES
FLASH REPORT (CONSOLIDATED. YEAR ENDED MARCH 31, 2004)
DATE OF APPROVAL FOR THE FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 31, 2004,
AT THE BOARD OF DIRECTORS' MEETING: APRIL 28, 2004
1. RESULTS FOR THE PERIOD FROM APRIL 1, 2003 TO MARCH 31, 2004
(1) Operating Results (Millions of yen)
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Year ended Year ended
March 31, 2004 March 31, 2003
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Net sales 1,780,245 1,738,358
(% change from the previous fiscal year) 2.4 3.9
Operating income 150,006 133,654
(% change from the previous fiscal year) 12.2 3.1
Income before income taxes 143,063 123,470
(% change from the previous fiscal year) 15.9 8.4
Net income 91,766 72,513
(% change from the previous fiscal year) 26.6 17.7
Net income per share-basic (yen) 123.63 99.79
Net income per share-diluted (yen) -- 96.81
Return on equity (%) 12.6 11.2
Income before income taxes on total assets (%) 7.7 6.6
Income before income taxes on net sales (%) 8.0 7.1
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Notes:
i. Equity in income of affiliates: Yen 2,065 million (Yen 2,403 million in
previous fiscal year)
ii. Some changes in accounting method have been made.
iii. Average number of shares outstanding (consolidated): 742,292,806 shares
(726,659,698 shares in previous fiscal year)
iv. Net income per share is calculated as required by SFAS No. 128.
(2) Financial Position (Millions of yen)
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March 31, 2004 March 31, 2003
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Total assets 1,852,793 1,884,922
Shareholders' equity 795,131 657,514
Equity ratio (%) 42.9 34.9
Equity per share (yen) 1,076.11 885.41
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Note: Number of shares outstanding as of March 31, 2004: 738,894,891 shares
(742,608,635 shares as of March 31, 2003)
(3) Cash Flow (Millions of yen)
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Year ended Year ended
March 31, 2004 March 31, 2003
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Cash flows from operating activities 154,911 185,742
Cash flows from investing activities -63,383 -98,199
Cash flows from financing activities -74,835 -67,143
Cash and cash equivalents at end of period 203,039 189,243
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(4) Items relating to the scale of consolidation and the application of the
equity method:
Number of consolidated subsidiaries: 321; nonconsolidated
subsidiaries: 39; affiliated companies: 21
(5) Changes relating to the scale of consolidation and the application of the
equity method:
Consolidated subsidiaries: 1 addition; 14 removals
Companies accounted for by the equity method: 2 additions; 3 removals
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, 2004 TO MARCH 31, 2005
(Millions of yen)
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Half year ended Year ended
September 30,2004 March 31, 2005
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Net sales 895,000 1,810,000
Operating income 78,000 175,000
Income before income taxes 74,500 165,000
Net income 43,800 95,000
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Note: Net income per share (Consolidated) 128.57 yen
In accordance with Japanese regulations, Ricoh has issued forecast for its
financial results for the fiscal year ending March 2005. These forecast are
forward-looking statements based on a number of assumptions and beliefs in light
of the information currently available to management and subject to significant
risks and uncertainties.
3
GROUP POSITION
The Ricoh Group comprises 360 subsidiaries and 21 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. (affiliated company)
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
Ricoh Optical Industries Co., Ltd., Ricoh Elemex Corporation
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 position is omitted.
4
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 levels of reliability and to
create new value in order to contribute both to productivity improvement and
also to 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
In terms of office equipment business - our core competence - we in the Ricoh
Group have made every possible effort since the inception of our 13th
medium-term management plan to move beyond the manufacture and retail of
equipment such as copiers and printers so that we may overhaul our operational
structure, thus enabling us to support our customers in their efforts to improve
or enhance productivity through our offering.
As these customers continue to experience heightened demand for operation
improvement and reform, further expansion of digital networking will be
accompanied by changes in the nature of critical customer information in terms
of increased digitization, coloring, and volume.
As a result of these factors, it is expected that efficient and effective I/O,
storage, and searching of TDV (i.e., total document volume), which includes
printed material in addition to photocopies, will become a pressing issue for
said customers.
Our 14th medium-term management plan thus focuses on the realization of 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 expand our lineup of compact color machines at prices comparable to those of
monochrome models, thus satisfying our customers' requirements for color
capability without being limited simply to the replacement of monochrome
copiers.
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.
The state of achievement of these basic strategy goals in the current period is
as follows.
In terms of the replacement of monochrome products with color models, we have
striven to complete our product lineup by continuously introducing new
multifunction color models and color laser printers to the market. As a result
of these efforts, our share in the color copier market in the US and Europe in
particular has increased significantly. Furthermore, with the aim of cultivating
a market for ink-jet printers intended for business usage, we have released the
IPSiO G505/G707 - a pair of color ink-jet printers that utilize Ricoh's unique
gel-jet technology.
Turning our attention to the sale of high-speed copiers, our multifunction
high-speed digital models continue to set an excellent reputation in markets
both here in Japan and overseas, thus establishing a position of prominence in a
vast range of commercial scenes. Finally, with regard to the provision of
printing solutions, we continue to make proposals for the optimization of total
spending on copiers and printers and to implement our global service and support
system in order to steadily expand our business dealings with major clients on
the worldwide stage; furthermore, this is particularly true in the case of the
US and European markets.
At Ricoh, we strive to enhance our technological capabilities in order to become
the world No.1 product manufacturing company, fully capable of providing
products and services with an unrivalled competitive edge. 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.
The Imagio Neo 602/752 series represents one of the achievements made possible
by the above-mentioned strategy: Boasting not only exceptional environmental
characteristics, these multifunction digital copiers simultaneously achieve
ease-of-use and energy efficiency while retaining the high productivity required
of high-speed models.
5
(3) Basic Approach and Policies for Corporate Governance
In our drive to enhance competitive strengths, Ricoh is committed to management
transparency in accordance with our corporate philosophy and ethics.
i. State of implementation of policies for corporate governance
By reinforcing the board of directors and implementing an executive officer
system in accordance with the following measures, we aim to strengthen both
business administration and the enforcement of management.
- Adoption of a statutory auditors system
- Placement of an executive officer system and the assignment of authority to
divisions in order to clarify their roles
- Maintaining of a board of fourteen directors including two external members
to handle major decisions on business administration and group management
- Establishment of a group management committee and enforcement of management
through the auditing of individual divisions, formulation of optimum
strategies for the group as a whole, and other similar activities
- Continuation of legally-required auditing through the efforts of four
auditors (including two external auditors) and establishment of independent
internal auditing by a corporate audit office
( Chart of Corporate Governance )
The chart of Corporate Governance is omitted.
ii. Personal, capital-based, business, and other factors 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 addition to establishing both a Corporate Social Responsibility (CSR) charter
for the entire Ricoh Group and group-wide codes of conduct, we have recognized,
understood, and strictly observed national law, international rules, and the
corresponding thinking; furthermore, we have painstakingly ensured that all
activities are carried out with a thorough sense of social awareness and
responsibility. 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.
6
(4) Challenges
Although the economy of Japan and the US began to exhibit some upswing momentum
in the second half of the last fiscal year, prospects for the business climate
remain unpredictable as a result of the continuing appreciation of the yen
against the US dollar and the euro, and also due to epidemics, terrorism, and
other factors adversely affecting international stability. In terms of our
operating environment, furthermore, the level of competition has increased
significantly in the market for digital networking and coloring solutions.
The Ricoh Group's priorities in the achievement of sustainable growth within
such a challenging environment are to create new customer value and to manage in
a highly-efficient manner, thereby enhancing corporate competitiveness. In order
that we may create customer value through the identification of new customer
requirements and the provision of the highest levels of product value to said
customers, it is crucial that Ricoh achieves its aim of becoming the world No.1
product manufacturing company. With this fully in mind, we intend to redouble
our efforts in the creation of value in all facets of management that target
customer satisfaction, while at the same time reinforcing our technological
strengths as a means of generating new value with our products and services.
In addition, we intend to vigorously pursue the three customer-value factors
that we, as a manufacturer, must achieve - namely, simplification of knowledge
creation, harmony with the environment, and the well-being of all. In other
words, we will strive to support our customer's knowledge creation activities,
or alternatively, to create an environment that fosters the creation of
knowledge; to provide products and services that allow our customers to
contribute to protection of the environment; and to achieve higher levels of
user friendliness so that customers may put our products and services to more
efficient use.
Meanwhile, steady progress is currently being made in the optimization of
efficiency through process reform in all group fields, thus improving management
efficiency. In addition to enhancing our earning power through these efforts, we
intend to positively invest the profit that we have achieved in future growth.
Furthermore, in terms of the stock acquisition of Hitachi Printing Solutions,
Ltd., for which a basic agreement was reached at the end of March, we will
endeavor to ensure that this is brought to fruition, thus helping to achieve our
aim of expanding and intensifying the printer industry.
(5) Dividend Policy
Ricoh endeavors to ensure that policies are regularly updated to reflect
increases in earnings and to take the dividend payout ratio into consideration
in the payment of dividends, while at the same time increasing retained earnings
for the enhancement of corporate structure and the generation of new business.
Furthermore, these retained earnings will be used both in the reinforcement of
core businesses and for investment in new fields with both medium-term and
long-term perspectives.
(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.
7
PERFORMANCE
*Overview
In fiscal 2004 (extending from April 1st, 2003 to March 31st, 2004),
consolidated net sales of the Ricoh Group increased 2.4% from the previous
corresponding period to Yen 1,780.2 billion, and this was the 10th consecutive
revenue growth. The average exchange rates prevailing during the term were Yen
113.09 to the dollar (up Yen 8.87) and Yen 132.65 to the euro (down Yen 11.65).
Accordingly, the increase in sales with respect to the previous period would be
1.8%, excluding the effect of such foreign exchange fluctuation.
In terms of the domestic market, sales increased for printing systems such as
multifunctional printers (MFPs) and laser printers. Although sales performance
also became favorable for solutions business such as useware and document
management, sales of optical disc decreased. As a result of these factors,
overall sales of office equipment increased 1.4% from the previous corresponding
period. In terms of other business areas, furthermore, results were affected by
poor demand for measuring equipment. However, optical equipments, leasing and
other business continue to perform favorably. Consequently, overall domestic
sales increased 2.0% to Yen 914.0 billion. Domestic sales accounted for 51.3% of
consolidated net sales, down 0.2%.
In terms of overseas sales, though sales decreased due to the yen's appreciation
against the dollar in the United States, our office equipment business continued
to perform favorably in Europe. In other areas, sluggish demand for optical disc
products led to a reduction in sales figures. In terms of sales by product
category, our core products - namely, color PPCs and printing systems -
generated increased sales, and this compensated for reduced sales of standalone
analog equipments and optical discs. As a result of these factors, sales in
overseas markets increased 2.8% from the previous corresponding previous period
to Yen 866.1 billion. Overseas sales would increased 1.5%, excluding the effect
of foreign exchange rates fluctuations. Furthermore, these sales accounted for
48.7% of consolidated net sales, up 0.2%.
Gross profit increased 2.7% to Yen 765.6 billion. In both Japan and abroad,
sales increased for high-margin, high-value-added products - notably MFPs and
laser printers - and in addition to the effect of the yen's depreciation against
the euro, Ricoh also benefited from ongoing cost cutting efforts.
In terms of selling, general and administrative expenses, increases were
recorded for pension cost and strategic spending on research and development,
the development of core systems, and other activities. Furthermore, although
losses of Yen 5.9 billion were incurred as a result of settlement of tax
qualified pension plan, a gain of Yen 8.3 billion on return of the
substitutional portion of Employees' Pension Fund to the Japanese Government was
recorded. As a result of these factors, expenses increased 0.6% to Yen 615.6
billion.
Ricoh has valued long-lived assets in an appropriate manner, adopting the
expected present-value approach of future cash flow.
Consequently, operating income increased by 12.2% from the previous
corresponding period to Yen 150.0 billion.
In terms of other (income) expenses, interest and dividend income decreased
primarily due to sluggish financial markets, and in addition, foreign exchange
losses also increased. Meanwhile, the company reduced interest-bearing debt and
interest costs by reinforcing cash management systems in Japan, the United
States, and Europe. In accordance with an amendment of the pension system,
furthermore, certain marketable securities were contributed to the employee
retirement benefit trust, and this generated net realized gains of the
securities. As the result, income before income taxes increased 15.9%, to Yen
143.0 billion.
With regard to taxes, the amount of tax exemption on research and development
expenses and information technology investments increased, thereby leading to a
decline in the effective tax rate. The effect of improvement in business
performance of our affiliates is reflected in minority interests in earnings of
subsidiaries. In addition, the cumulative effects of accounting change in
accounting for marketable securities transferred to pension trust in a previous
year were also reflected in the income statement in connection with gain
recognition for additional contribution to the employee pension trust made in
March, 2004. As a result of the above, net income increased 26.6% to Yen 91.7
billion, and this represents the 12th consecutive increase and the 10th
consecutive record high.
With regard to the state of the business segment, sales and operating earnings
associated with office equipment operations rose as a result of increased retail
sales of printing systems and cost reduction activities such as supply chain
management (SCM). Furthermore, stagnation in the sluggish market for measuring
equipment was compensated for by the favorable performance of leasing and other
business. As the results, both sales and operating income increased. Turning our
attention to geographic segments, sales volumes for core strategic products
increased and high production levels were maintained, thus leading to higher
operating earnings in each region.
Year-end cash dividends are proposed as Yen 10.00 per share, and when combined
with interim dividends of Yen 8.00, total dividends for the current fiscal year
2004 will be Yen 18.00.
[Graph 1] Consolidated performance
The graphs are omitted. The data in the omitted graphs can be shown at the
schedule 1 in APPENDIX B.
8
*Consolidated Sales by Product Line
Office Equipment (up 2.4% to Yen 1,557.6 billion)
-------------------------------------------------
Demand placed on customers for productivity overhaul and enhancement has risen
sharply. At the Ricoh group, we continue to propose solutions that optimize our
customers' total printing costs, thus supporting the efficient and effective
management of TDV (total document volume) through the further expansion of
digital networking in combination with increased digitization, colorization and
high speeding, we are advancing the level of digitization and networking in
standalone analog equipments and the level of support for increased color usage
and speed.
As a result, we have significantly increased sales, particularly in MFPs, laser
printers, and other printing solutions. Furthermore, sales generated by solution
business dealing with useware, software, and the like continue to grow. In
Japan, sales of personal computers and servers decreased and there is currently
stagnation in the retail of optical-disc products. Furthermore, overseas
operations are suffering under the effect of turmoil in the Middle East, the
yen's appreciation against to the dollar, sluggish demand in the Asian region,
and other factors. Nevertheless, the deployment and expansion of strategies for
our core products proved effective, and sales increased in both the domestic and
overseas markets. Accordingly, sales of office equipment increased 2.4% from the
previous corresponding period to Yen 1,557.6 billion.
Imaging Solutions (down 6.5% to Yen 803.5 billion)
--------------------------------------------------
In terms of digital imaging systems, the Company has strengthened its
lineup of digital PPC products from standard models to high-speed digital
models, in addition, we also offered new color PPC products to our range.
Digital PPC products are now performing well in overseas markets, and sales
of color PPC products have increased both in Japan and overseas.
Nevertheless, the shift towards printing systems has led to a 3.3%
reduction in overall sales of digital imaging systems from the previous
corresponding period.
In terms of other imaging systems, sales decreased 15.2% as a result of the
trend to move away from analog type equipment in favor of digital
equipments and MFPs. Accordingly, the effect of Ricoh group strategies on
the entire imaging solutions field has lead to sales dropping by 6.5% to
Yen 803.5 billion. Sales in this category accounted for 45.1% of
consolidated net sales, down 4.4%.
Networking Input/Output Systems (up 20.5% to Yen 558.2 billion)
---------------------------------------------------------------
In the field of printing systems, Ricoh introduced new products with higher
levels of speed, networkability, and color support to expand the sale of
printing equipment to meet customer needs. In terms of MPFs, Imagio Neo
352/452 and Imagio Neo C385/C325 was well received here in Japan, and the
same is true for Aficio 2035/2045 and Aficio 1224C/1232C in overseas
markets. Sales of laser printers are also on the increase, with the IPSiO
NX85S and IPSiO CX7200 performing favorably in the domestic market, and the
AP400/400N and Aficio CL3000 moving well overseas. In accordance with these
factors, overall sales of printing systems increased 24.6%.
In the input/output systems, although optical discs performed favorably in
overseas markets in the previous period, there has been a downturn in the
retail of drives, and overall sales for other input/output systems
decreased 10.1%. As a result, sales in networking input/output systems, our
key field for the implementation of strategies, increased 20.5% to Yen
558.2 billion. Sales in this category accounted for 31.4% of consolidated
net sales, up 4.7%.
Network System Solutions (down 0.8% to Yen 195.8 billion)
---------------------------------------------------------
In order to support customers in the optimization of their total printing
costs, Ricoh has strengthened the solution business with respect to
useware, document management, and software. This has also led to increased
domestic and overseas sales. On the other hand, sales of personal computers
and servers continued to decline in Japan, reflecting sluggish information
technology spending. In accordance with these factors, sales in this
category decreased 0.8% to Yen 195.8 billion.
Other Businesses (up 2.2% to Yen 222.6 billion)
-----------------------------------------------
Sales generated by other business activities increased 2.2% to Yen 222.6
billion. Optical equipments, leasing and other business performed favorably,
although results have become stagnant in the sluggish market for measuring
equipment.
[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.
9
* Consolidated Sales by Geographic Area
Japan (up 2.0% to Yen 914.0 billion)
------------------------------------
While recovery is now predicted for stock market conditions, corporate
capital expenditure, and business profitability, conditions within the
Japanese domestic market remain difficult. Accordingly, we have promoted
product and marketing strategies in office equipment in order to respond
suitably to customer needs, and as a result, printing systems such as MFPs
and laser printers performed favorably in terms of sales, as have solution
business products such as useware and software. Meanwhile, sales in analog
equipments replaced with MFPs and color equipments and sales of personal
computers and servers declined. In terms of other business, sales have also
fallen in the sluggish market for measuring equipment, although leasing and
other business performed favorably. As a result of these factors, sales in
Japan have increased 2.0% to Yen 914.0 billion. Domestic sales accounted
for 51.3% of consolidated net sales, down 0.2%.
The Americas (down 5.1% to Yen 326.3 billion)
---------------------------------------------
In circumstances of repercussions from the Iraq war, turmoil in the Middle
East, and severe competition, through its enhanced sales network, Ricoh has
injected full effort into the retail of color PPCs and into printing
systems that can respond to customers' changing needs for networking,
coloration, and high speeding. Furthermore, we have also striven to expand
sales to major accounts. Nevertheless, sales in the Americas have decreased
5.1% to Yen 326.3 billion, due to the higher yen against the dollar, and
after factoring out the yen's appreciation, sales increased 2.1%.
Europe (up 13.5% to Yen 402.3 billion)
--------------------------------------
With European economies remaining relatively stable, sales of color PPCs
and printing systems increased. Ricoh has strengthened its sales network
and continuously reinforced its brand power, and these efforts have helped
Ricoh to maintain its top share of the European market for copiers and
MFPs. The yen's depreciation against the euro also contributed. As a
result, sales in Europe increased 13.5% to Yen 402.3 billion.
Others (down 4.5% to Yen 137.4 billion)
---------------------------------------
In China and other Asian markets, a full-fledged shift in
business-equipment purchasing trends towards digital networked and color
models has generated an increase in our sales of color PPCs and printing
systems. However, demand for optical discs has dropped and performance has
also been affected by a reduction in demand throughout the entire Asian
region. Accordingly, sales in other regions decreased 4.5% to Yen 137.4
billion.
[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.
10
* Segment Information
Business Segment
----------------
Office Equipment
----------------
In the category of imaging solutions and printing systems, Ricoh has introduced
a range of high value-added products from standard models to high-speed digital
models and with document functionality that extends from input/output to sharing
and administration. Accordingly, domestic and overseas sales of color PPC and
MFPs have grown, and retail volume for laser printers increased - particularly
in terms of color models. Sales continue to increase for useware, software, and
other solutions aimed at satisfying the diverse needs of customers. However,
sales of optical disc business that moved into positive territory during the
last period decreased. As the result of the above factors, sales of business
equipment increased 2.4% to Yen 1,557.6 billion.
Turning our attention to operating expenses, despite increased investment in
research and development and in information technologies for the core system
development, operating income increased 7.1% to Yen 204.3 billion. This increase
has been achieved through increased sales of high value-added products with high
margins, through ongoing cost cutting activities in production and
administration, as well as through the effect of the yen's depreciation against
the euro. The operating income to net sales increased 0.6% to 13.1%.
Capital expenditure focused primarily on the enhancement of new production lines
and on investment for research and development purposes. In terms of total
assets, while account receivables and inventories both grew in this period,
assets efficiency has improved.
Other Businesses
----------------
Optical devices, leasing and other business performed favorably, although
results have become stagnant in the sluggish market for measuring equipment. As
a result, sales in other business increased 2.1% to Yen 225.0 billion, and
operating earnings improved to Yen 4.6 billion.
(Billions of yen)
------------------------------------------------------------------------
Year ended Year ended
March 31, March 31,
2004 2003 Change (%)
------------------------------------------------------------------------
Office Equipment:
Net sales 1,557.6 1,520.5 2.4
Operating income 204.3 190.7 7.1
Operating income on sales(%) 13.1 12.5 0.6
Identifiable assets 1,220.7 1,198.7 1.8
Capital expenditures 65.3 65.7 -0.5
Depreciation 57.9 60.6 -4.5
------------------------------------------------------------------------
Other Businesses:
Net sales 225.0 220.5 2.1
Operating income 4.6 -2.2 --
Operating income on sales(%) 2.1 -1.0 3.1
Identifiable assets 182.5 176.2 3.5
Capital expenditures 8.7 7.2 20.8
Depreciation 7.7 6.9 12.4
------------------------------------------------------------------------
11
Geographic Segment
------------------
Japan
-----
In our office equipment business, sales of 2nd half year in particular increased
for printing systems pursued an aggressive marketing strategy. Useware and other
solution businesses also performed well. In addition, due to higher exports to
overseas markets and the yen's depreciation against the euro, sales in Japan
increased 3.0% to Yen 1,313.1 billion. In combination with this sales growth,
increased retail of printing systems and cost reduction activities such as
supply chain management (SCM), compensated for the effect of sluggish
performance of optical disc business and stagnation in the measuring equipment
market. Accordingly, operating earnings increased 13.0% to Yen 97.3 billion.
The Americas
------------
In an environment characterized by turmoil in the Middle East and intensifying
competition, Ricoh through its continually-enhanced retail channel efficiently
expanded sales of printing systems and improved retail strategies for major
accounts. Sales of MFPs and laser printers increased, particularly in the case
of new color products. However, the yen's appreciation against the dollar has
caused sales in the Americas to drop by 5.5% to Yen 320.7 billion. With full
effort injected into cost cutting through SCM and other activities, operating
earnings increased 8.0% to Yen 15.4 billion.
Europe
------
Operations in Europe succeeded in increasing sales in all regional markets, with
PPCs and printing systems performing particularly well, and Ricoh maintained its
top share in the European copier and MFPs market. As a result, sales in Europe
increased 13.6% to Yen 404.4 billion. Furthermore, operating income increased by
20.6% to Yen 22.0 billion, reflecting higher increase on revenue, the effect of
production in the optimum region closer to customers, and the yen's depreciation
against the euro.
Others
------
The shift in demand for office equipment to MFPs and color models has been
significant both in China and elsewhere in Asia and Oceania. In addition, Ricoh
has maintained high production levels in order to respond to increased demand
all over the world. As a result of these factors, sales for this segment
increased 13.8% to Yen 193.3 billion, and operating income increased 5.0% to
Yen 10.4 billion reflecting higher levels of sales and production.
[Graph 4] Geographic segment information
The graphs are omitted. The data in the omitted graphs can be shown at the
schedule 4.
12
* Financial Position
(1) Assets, Liabilities, and Shareholders' Equity at Year-End
(Billions of yen)
------------------------------------------------------------------------------
March 31, 2004 March 31, 2003 Change
------------------------------------------------------------------------------
Total Assets 1,852.7 1,884.9 -32.1
Shareholders' Equity 795.1 657.5 137.6
Equity Ratio 42.9% 34.9% 8.0%
------------------------------------------------------------------------------
In Assets, account receivables especially in Japan and Europe increased Yen 4.3
billion with respect to the previous period to Yen 422.2 billion. Inventories
reduced Yen 0.6 billion to Yen 145.3 billion. Capital expenditure focused on
effective performance resulted in tangible fixed assets reduced Yen 10.0 billion
to Yen 238.7 billion. On the other hand, finance receivables increased Yen 37.7
billion to Yen 514.0 billion, mainly in Japan. Factors such as the replacement
of investment securities with marketable securities and lower deferred tax
assets as a result of reduced employee pension obligations caused other
investments decreased Yen 109.1 billion to Yen 228.2 billion. As a result, total
assets decreased Yen 32.1 billion to Yen 1,852.7 billion.
Turning to liabilities, domestic and overseas trade payable increased Yen 16.8
billion to Yen 297.6 billion. Interest-bearing debt has been reduced by Yen 51.8
billion to Yen 432.7 billion due primarily to efforts to lower borrowing.
Furthermore, other current liabilities decreased Yen 10.4 billion to Yen 158.5
billion, and as a result of amendment of the domestic pension system and
transfer of the substitutioned portion of the Employees' Pension Fund,
retirement benefit obligations reduced Yen 125.5 billion to Yen 83.4 billion. In
accordance with the above, total liabilities decreased Yen 165.3 billion to
Yen 1,008.7 billion.
In Shareholders' Equity, common stock and additional paid-in capital were
essentially unchanged. Retained earnings increased Yen 80.6 billion to Yen 515.3
billion. Accumulated other comprehensive income decreased Yen 64.4 billion, due
primarily to the decrease of pension liability adjustments. Consequently, total
shareholders' equity increased Yen 137.6 billion to Yen 795.1 billion.
(2) Cash Flows (Billions of yen)
------------------------------------------------------------------------------
Year ended Year ended
March 31, 2004 March 31, 2003 Change
------------------------------------------------------------------------------
Cash flows from operating
activities 154.9 185.7 -30.8
Cash flows from investing
activities -63.3 -98.1 34.8
Cash flows from financing
activities -74.8 -67.1 -7.6
Cash and Cash Equivalents at End
of Period 203.0 189.2 13.7
------------------------------------------------------------------------------
Although net income and depreciation and amortization increased, increase of
account receivables and inventories, and the payment of corporate tax resulted
in net cash provided by operating activities decreasing by Yen 30.8 billion from
the previous corresponding period to Yen 154.9 billion.
While investment continued for the enhancement of new-product lines, factors
such as reduced fund investments resulted in the net cash used in investing
activities decreasing by Yen 34.8 billion from the previous corresponding period
to Yen 63.3 billion.
As a result of the above factors, free cash flow generated by operating and
investing activities increased Yen 3.9 billion to Yen 91.5 billion.
Effective use of financial resources was promoted throughout the group and every
effort was made to reduce interest-bearing debt. Consequently, net cash used in
financing activities reached a level of Yen 74.8 billion. Note that this
expenditure includes dividend payments of Yen 11.1 billion and Yen 11.4 billion
to secure treasury stock.
As a result of these factors, cash and cash equivalents at the close of the term
increased Yen 13.7 billion with respect to the previous period to Yen 203.0
billion.
(3) Cash Flow Indices
---------------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
March 31, 2000 March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004
---------------------------------------------------------------------------------------------------------------------------
Shareholders' equity / Total assets 35.1% 32.7% 34.5% 34.9% 42.9%
Market capitalization / Total assets 98.7% 92.2% 95.6% 73.0% 85.3%
Interest bearing debt / Operating cash flow 3.8 5.2 5.3 2.6 2.8
Operating cash flow / Interest expense 13.3 13.2 12.8 27.1 29.3
---------------------------------------------------------------------------------------------------------------------------
Notes:
i. All indices are calculated based on consolidated data.
ii. Market capitalization equals the stock price at the end of fiscal year
multiples by the number of shares outstanding at the end of fiscal year.
iii. Operating cash flow is shown in consolidated statement of cash flow.
Interest bearing debt equals all debt in consolidated balance sheets.
13
* Forecast for the next fiscal year
* Economic projections and Ricoh Group's strategies for fiscal 2005
While recovery is now predicted for stock market conditions, corporate capital
expenditure, and business profitability, factors such as high unemployment and
the uncertain income environment give rise for concern about the outlook for
fiscal 2005 (extending from April 1st, 2004 to March 31st, 2005), and Ricoh
management considers that it will take time for the Japanese economy to make a
full recovery. In addition, it is also felt that repercussions of the Iraq war,
turmoil in the Middle East, and sever competition will continue to effect
overseas economies as they push towards recovery.
In light of these conditions and as part of its 14th medium-term term management
plan - a plan that comes to completion with the end of this fiscal year - the
Ricoh Group has opted to expand its profit base in accordance with the core
strategy of expanding total document volume (i.e., by increasing volume and
value per sheet). In specific terms, we have promoted activities in line with
the following policies.
- Replacing monochrome products with color models
- Increased sales of high-speed models
- Provision of printing solutions
The crucial challenges for our customers will be to improve workflow and enhance
productivity by better management of total document volume. We will support such
efforts by continuing to formulate proposals to optimize our customers' total
printing costs and by promoting on-going products and services that meet more
sophisticated needs for color and speed in office document production.
With regard to activities to date, we have expanded our market share by
continuously introducing new multifunction color models and color laser printers
to the market. We have released a range of color ink-jet printers for business
applications. In accordance with the enhancement of our printing solutions, we
have increased business with major clients through the use of our global-scale
service and support system. Furthermore, in terms of the stock acquisition of
Hitachi Printing Solutions, Ltd., for which a basic agreement was reached at the
end of March we will endeavor to ensure that this is brought to fruition, thus
helping to achieve our aim of expanding and intensifying the printer industry.
Ricoh will pursue efficiencies through process reform in each of the group's
business areas in order to ensure sustainable earnings growth and to generate
cash flow; in addition, we will further reinforce our price competitiveness
through the reduction of product costs and the streamlining of business
structure.
Our performance forecasts for fiscal 2005 are as follows:
Exchange Rate Assumptions for the full year ended March 31, 2005
US$ 1 = Yen 105.00 (Yen 113.09 in previous fiscal year)
EURO 1 = Yen 130.00 (Yen 132.65 in previous fiscal year)
(Billions of yen)
-------------------------------------------------------------------------
Year ended Year ended
March 31, 2005 March 31, 2004 Change
(Forecast) (Results)
-------------------------------------------------------------------------
Domestic sales 935.0 914.0 2.3%
Overseas sales 875.0 866.1 1.0%
Net sales 1,810.0 1,780.2 1.7% (*1)
Gross profit 785.0 765.6 2.5%
Operating income 175.0 150.0 16.7%
Income before income taxes 165.0 143.0 15.3%
Net income 95.0 91.7 3.5% (*2)
-------------------------------------------------------------------------
Notes:
*1...Net sales would be eleventh consecutive year of growth.
*2...Net income would be thirteenth consecutive year of growth and eleventh
consecutive year of record high.
* Ricoh bases the forecast estimates for March 31, 2005 above upon information
currently available to management, which involves risks and uncertainties that
could cause actual results to differ materially from those projected.
14
CONSOLIDATED PERFORMANCE
1. CONSOLIDATED STATEMENTS OF INCOME
(Three months ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------
Three months ended Three months ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
Net sales 471,252 460,798 10,454 2.3
Cost of sales 279,512 261,031 18,481 7.1
Percentage of net sales (%) 59.3 56.6
Gross Profit 191,740 199,767 -8,027 -4.0
Percentage of net sales (%) 40.7 43.4
Selling, general and administrative
expenses 155,203 160,835 -5,632 -3.5
Percentage of net sales (%) 32.9 35.0
Operating income 36,537 38,932 -2,395 -6.2
Percentage of net sales (%) 7.8 8.4
Other (income) expense
Interest and dividend income 178 1,134 -956 -84.3
Percentage of net sales (%) 0.0 0.2
Interest expense 1,090 1,525 -435 -28.5
Percentage of net sales (%) 0.2 0.3
Other, net -2,756 731 -3,487 --
Percentage of net sales (%) -0.5 0.1
Income before income taxes,
equity income and minority interests 38,381 37,810 571 1.5
Percentage of net sales (%) 8.1 8.2
Provision for income taxes 14,744 15,235 -491 -3.2
Percentage of net sales (%) 3.1 3.3
Minority interests in earnings of
subsidiaries 1,334 1,724 -390 -22.6
Percentage of net sales (%) 0.2 0.4
Equity in earnings of affiliates 161 336 -175 -52.1
Percentage of net sales (%) 0.0 0.1
Income before cumulative effect
of accounting change 22,464 21,187 1,277 6.0
Percentage of net sales (%) 4.8 4.6
Cumulative effect of accounting change,
net of tax 7,373 -- 7,373 --
Percentage of net sales (%) 1.5 --
Net income 29,837 21,187 8,650 40.8
Percentage of net sales (%) 6.3 4.6
-------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 107.31 Yen 119.04
EURO 1 Yen 134.10 Yen 127.63
(Year ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------
Year ended Year ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
Net sales 1,780,245 1,738,358 41,887 2.4
Cost of sales 1,014,619 993,009 21,610 2.2
Percentage of net sales (%) 57.0 57.1
Gross Profit 765,626 745,349 20,277 2.7
Percentage of net sales (%) 43.0 42.9
Selling, general and administrative
expenses 615,620 611,695 3,925 0.6
Percentage of net sales (%) 34.6 35.2
Operating income 150,006 133,654 16,352 12.2
Percentage of net sales (%) 8.4 7.7
Other (income) expense
Interest and dividend income 1,925 3,772 -1,847 -49.0
Percentage of net sales (%) 0.1 0.2
Interest expense 5,290 6,853 -1,563 -22.8
Percentage of net sales (%) 0.3 0.4
Other, net 3,578 7,103 -3,525 -49.6
Percentage of net sales (%) 0.2 0.4
Income before income taxes,
equity income and minority interests 143,063 123,470 19,593 15.9
Percentage of net sales (%) 8.0 7.1
Provision for income taxes 56,641 51,984 4,657 9.0
Percentage of net sales (%) 3.2 3.0
Minority interests in earnings of
subsidiaries 4,094 1,376 2,718 197.5
Percentage of net sales (%) 0.2 0.0
Equity in earnings of affiliates 2,065 2,403 -338 -14.1
Percentage of net sales (%) 0.1 0.1
Income before cumulative effect
of accounting change 84,393 72,513 11,880 16.4
Percentage of net sales (%) 4.7 4.2
Cumulative effect of accounting change,
net of tax 7,373 -- 7,373 --
Percentage of net sales (%) 0.5 --
Net income 91,766 72,513 19,253 26.6
Percentage of net sales (%) 5.2 4.2
-------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 113.09 Yen 121.96
EURO 1 Yen 132.65 Yen 121.00
15
2-1. CONSOLIDATED SALES BY PRODUCT CATEGORY
(Three months ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------
Three months ended Three months ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
( Office Equipment )
Imaging Solutions:
Digital Imaging Systems 153,230 166,111 -12,881 -7.8
Percentage of net sales (%) 32.5 36.0
Other Imaging Systems 46,217 54,917 -8,700 -15.8
Percentage of net sales (%) 9.8 12.0
Total Imaging Solutions 199,447 221,028 -21,581 -9.8
Percentage of net sales (%) 42.3 48.0
-------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 151,191 116,450 34,741 29.8
Percentage of net sales (%) 32.1 25.3
Other Input/Output Systems 5,928 10,565 -4,637 -43.9
Percentage of net sales (%) 1.2 2.3
Total Network Input/Output Systems 157,119 127,015 30,104 23.7
Percentage of net sales (%) 33.3 27.6
-------------------------------------------------------------------------------------------------------
Network System Solutions 56,967 57,357 -390 -0.7
Percentage of net sales (%) 12.2 12.4
-------------------------------------------------------------------------------------------------------
Office Equipment Total 413,533 405,400 8,133 2.0
Percentage of net sales (%) 87.8 88.0
-------------------------------------------------------------------------------------------------------
( Other Businesses )
Other Businesses 57,719 55,398 2,321 4.2
Percentage of net sales (%) 12.2 12.0
-------------------------------------------------------------------------------------------------------
Grand Total 471,252 460,798 10,454 2.3
Percentage of net sales (%) 100.0 100.0
-------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 107.31 Yen 119.04
EURO 1 Yen 134.10 Yen 127.63
(Year ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------
Year ended Year ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
( Office Equipment )
Imaging Solutions:
Digital Imaging Systems 606,270 626,967 -20,697 -3.3
Percentage of net sales (%) 34.1 36.1
Other Imaging Systems 197,304 232,746 -35,442 -15.2
Percentage of net sales (%) 11.0 13.4
Total Imaging Solutions 803,574 859,713 -56,139 -6.5
Percentage of net sales (%) 45.1 49.5
-------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 509,212 408,830 100,382 24.6
Percentage of net sales (%) 28.6 23.5
Other Input/Output Systems 49,025 54,549 -5,524 -10.1
Percentage of net sales (%) 2.8 3.2
Total Network Input/Output Systems 558,237 463,379 94,858 20.5
Percentage of net sales (%) 31.4 26.7
-------------------------------------------------------------------------------------------------------
Network System Solutions 195,822 197,482 -1,660 -0.8
Percentage of net sales (%) 11.0 11.3
-------------------------------------------------------------------------------------------------------
Office Equipment Total 1,557,633 1,520,574 37,059 2.4
Percentage of net sales (%) 87.5 87.5
-------------------------------------------------------------------------------------------------------
( Other Businesses )
Other Businesses 222,612 217,784 4,828 2.2
Percentage of net sales (%) 12.5 12.5
-------------------------------------------------------------------------------------------------------
Grand Total 1,780,245 1,738,358 41,887 2.4
Percentage of net sales (%) 100.0 100.0
-------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 113.09 Yen 121.96
EURO 1 Yen 132.65 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
16
2-2. CONSOLIDATED SALES BY GEOGRAPHIC AREA
(Three months ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------
Three months ended Three months ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
( Domestic ) 252,516 236,250 16,266 6.9
Percentage of net sales (%) 53.6 51.3
( Overseas ) 218,736 224,548 -5,812 -2.6
Percentage of net sales (%) 46.4 48.7
The Americas 82,783 89,330 -6,547 -7.3
Percentage of net sales (%) 17.6 19.4
Europe 106,019 99,927 6,092 6.1
Percentage of net sales (%) 22.5 21.7
Other 29,934 35,291 -5,357 -15.2
Percentage of net sales (%) 6.3 7.6
Grand Total 471,252 460,798 10,454 2.3
Percentage of net sales (%) 100.0 100.0
-------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 107.31 Yen 119.04
EURO 1 Yen 134.10 Yen 127.63
(Year ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------
Year ended Year ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
( Domestic ) 914,060 896,022 18,038 2.0
Percentage of net sales (%) 51.3 51.5
( Overseas ) 866,185 842,336 23,849 2.8
Percentage of net sales (%) 48.7 48.5
The Americas 326,380 343,940 -17,560 -5.1
Percentage of net sales (%) 18.3 19.8
Europe 402,392 354,477 47,915 13.5
Percentage of net sales (%) 22.6 20.4
Other 137,413 143,919 -6,506 -4.5
Percentage of net sales (%) 7.8 8.3
Grand Total 1,780,245 1,738,358 41,887 2.4
Percentage of net sales (%) 100.0 100.0
-------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 113.09 Yen 121.96
EURO 1 Yen 132.65 Yen 121.00
17
3. CONSOLIDATED BALANCE SHEETS
(March 31, 2004 and 2003)
Assets (Millions of yen)
-------------------------------------------------------------------------------
March 31, March 31,
2004 2003 Change
-------------------------------------------------------------------------------
Current Assets
Cash and time deposits 204,001 200,330 3,671
Trade receivables 422,244 417,942 4,302
Marketable securities 45,124 107 45,017
Inventories 145,369 146,051 -682
Other current assets 55,079 58,083 -3,004
Total Current Assets 871,817 822,513 49,304
Fixed Assets
Tangible fixed assets 238,712 248,752 -10,040
Finance receivable 514,047 476,293 37,754
Other Investments 228,217 337,364 -109,147
Total Fixed Assets 980,976 1,062,409 -81,433
-------------------------------------------------------------------------------
Total Assets 1,852,793 1,884,922 -32,129
-------------------------------------------------------------------------------
Note:
Contents of cash and time deposits:
Cash and cash equivalents 203,039 189,243
Time deposits 962 11,087
Liabilities and Shareholders' Investment (Millions of yen)
-------------------------------------------------------------------------------
March 31, March 31,
2004 2003 Change
-------------------------------------------------------------------------------
Current Liabilities
Trade payables 297,672 280,798 16,874
Short-term borrowings 151,162 138,713 12,449
Other current liabilities 158,594 169,072 -10,478
Total Current Liabilities 607,428 588,583 18,845
Fixed Liabilities
Long-term indebtedness 281,570 345,902 -64,332
Retirement benefit obligation 83,492 209,011 -125,519
Other fixed liabilities 36,295 30,653 5,642
Total Fixed Liabilities 401,357 585,566 -184,209
-------------------------------------------------------------------------------
Total Liabilities 1,008,785 1,174,149 -165,364
-------------------------------------------------------------------------------
Minority Interest 48,877 53,259 -4,382
-------------------------------------------------------------------------------
Shareholders' Investment
Common stock 135,364 135,364 --
Additional paid-in capital 186,599 186,521 78
Retained earnings 515,372 434,748 80,624
Accumulated other comprehensive
income (loss) -30,272 -94,733 64,461
Treasury stock -11,932 -4,386 -7,546
Total Shareholders' Investment 795,131 657,514 137,617
-------------------------------------------------------------------------------
Total Liabilities and Shareholders'
Investment 1,852,793 1,884,922 -32,129
-------------------------------------------------------------------------------
Note: Other comprehensive income;
Net unrealized holding gains on
available-for-sale securities 4,026 8,582 -4,556
Pension liability adjustments -14,863 -89,119 74,256
Net unrealized gains (losses) on
derivative instruments -24 -178 154
Cumulative translation
adjustments -19,411 -14,018 -5,393
March 31, March 31,
Reference: Exchange rate 2004 2003
US$ 1 Yen 105.69 Yen 120.20
EURO 1 Yen 128.88 Yen 129.83
4. RETAINED EARNINGS
(Year ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------
Year ended Year ended
March 31, March 31,
2004 2003
-------------------------------------------------------------------------------
Retained earnings (beginning balance) 434,748 385,741
Net income 91,766 72,513
Cash dividends 11,142 10,178
Retirement of treasury stock -- 13,328
Retained earnings (ending balance) 515,372 434,748
-------------------------------------------------------------------------------
18
5. CONSOLIDATED STATEMENTS OF CASH FLOW
(Year ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------
Year ended Year ended
March 31, March 31,
2004 2003
-------------------------------------------------------------------------------
I. Cash Flows from Operating Activities:
1. Net income 91,766 72,513
2. Adjustments to reconcile net income to
net cash provided by operating activities--
Depreciation and amortization 76,968 76,551
Equity in earnings of affiliates, net of
dividends received -1,001 -1,167
Deferred income taxes 3,338 -9,289
Loss on disposal and sales of tangible
fixed assets 2,035 1,975
Cumulative effect of accounting change -7,373 --
Changes in assets and liabilities--
(Increase) decrease in trade
receivables -11,367 22,176
(Increase) decrease in inventories -4,317 14,983
Increase in finance receivables -32,650 -33,109
Increase in trade payables 21,316 5,632
(Decrease) increase in accrued income
taxes and accrued expenses and other -5,913 11,173
Retirement benefit obligation, net -609 7,806
Other, net 22,718 16,498
-------------------------------------------------------------------------------
Net cash provided by operating activities 154,911 185,742
-------------------------------------------------------------------------------
II. Cash Flows from Investing Activities:
1. Proceeds from sales of property, plant
and equipment 190 245
2. Expenditures for tangible fixed assets -75,432 -71,984
3. Payments for purchases of available-for-
sale securities -35,518 -52,219
4. Proceeds from sales of available-for-
sale securities 45,464 24,513
5. Decrease in time deposits 9,915 944
6. Other, net -8,002 302
-------------------------------------------------------------------------------
Net cash used in investing activities -63,383 -98,199
-------------------------------------------------------------------------------
III. Cash Flows from Financing Activities:
1. Proceeds from long-term indebtedness 13,349 58,194
2. Repayment of long-term indebtedness -31,509 -23,133
3. Decrease in short-term borrowings, net -10,728 -73,393
4. Proceeds from issuance of long-term debt
securities 1,000 11,000
5. Repayment of long-term debt securities -23,910 -11,723
6. Cash dividends paid -11,136 -10,176
7. Purchase of treasury stocks -11,411 -17,281
8. Other, net -490 -631
-------------------------------------------------------------------------------
Net cash used in financing activities -74,835 -67,143
-------------------------------------------------------------------------------
IV. Effect of Exchange Rate Changes on Cash
and Cash Equivalents -2,897 -1,329
-------------------------------------------------------------------------------
V. Net Increase in Cash and Cash Equivalents 13,796 19,071
-------------------------------------------------------------------------------
VI. Cash and Cash Equivalents at Beginning of
Year 189,243 170,172
-------------------------------------------------------------------------------
VII. Cash and Cash Equivalents at End of Period 203,039 189,243
-------------------------------------------------------------------------------
19
6. SEGMENT INFORMATION
(1) Industry Segment Information
(Three months ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------
Three months ended Three months ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
OFFICE EQUIPMENT:
Net sales:
Unaffiliated customers 413,533 405,400 8,133 2.0
Intersegment -- -- -- --
Total 413,533 405,400 8,133 2.0
-------------------------------------------------------------------------------------------------------
Operating expenses 361,866 352,578 9,288 2.6
-------------------------------------------------------------------------------------------------------
Operating income 51,667 52,822 -1,155 -2.2
Operating income on office
equipment sales(%) 12.5 13.0
-------------------------------------------------------------------------------------------------------
OTHER BUSINESSES:
Net sales:
Unaffiliated customers 57,719 55,398 2,321 4.2
Intersegment 722 606 116 19.1
Total 58,441 56,004 2,437 4.4
-------------------------------------------------------------------------------------------------------
Operating expenses 57,752 56,300 1,452 2.6
-------------------------------------------------------------------------------------------------------
Operating income 689 -296 985 --
Operating income on sales in
other businesses (%) 1.2 -0.5
-------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -722 -606 -116 --
Total -722 -606 -116 --
-------------------------------------------------------------------------------------------------------
Operating expenses:
Intersegment -730 -573 -157 --
Corporate 15,827 13,561 2,266 --
Total 15,097 12,988 2,109 --
-------------------------------------------------------------------------------------------------------
Operating income -15,819 -13,594 -2,225 --
-------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
Unaffiliated customers 471,252 460,798 10,454 2.3
Intersegment -- -- -- --
Total 471,252 460,798 10,454 2.3
-------------------------------------------------------------------------------------------------------
Operating expenses 434,715 421,866 12,849 3.0
-------------------------------------------------------------------------------------------------------
Operating income 36,537 38,932 -2,395 -6.2
Operating income on
consolidated net sales(%) 7.8 8.4
-------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
-------------------------------------------------------------------------------------------------------
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
Office Equipment 1,220,747 1,198,706 22,041 1.8
Other Businesses 182,532 176,296 6,236 3.5
Elimination -8,047 -6,908 -1,139 16.5
Corporate assets 457,561 516,828 -59,267 -11.5
-------------------------------------------------------------------------------------------------------
Total 1,852,793 1,884,922 -32,129 -1.7
-------------------------------------------------------------------------------------------------------
Capital expenditure: (Millions of yen)
-------------------------------------------------------------------------------------------------------
Three months ended Three months ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
Office Equipment 20,423 15,845 4,578 28.9
Other Businesses 2,444 2,913 -469 -16.1
Corporate 752 52 700 1,346.2
-------------------------------------------------------------------------------------------------------
Total 23,619 18,810 4,809 25.6
-------------------------------------------------------------------------------------------------------
Depreciation: (Millions of yen)
-------------------------------------------------------------------------------------------------------
Three months ended Three months ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
Office Equipment 14,497 15,389 -892 -5.8
Other Businesses 2,250 2,262 -12 -0.5
Corporate 535 452 83 18.4
-------------------------------------------------------------------------------------------------------
Total 17,282 18,103 -821 -4.5
-------------------------------------------------------------------------------------------------------
20
(Year ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------
Year ended Year ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
OFFICE EQUIPMENT:
Net sales:
Unaffiliated customers 1,557,633 1,520,574 37,059 2.4
Intersegment -- -- -- --
Total 1,557,633 1,520,574 37,059 2.4
-------------------------------------------------------------------------------------------------------
Operating expenses 1,353,304 1,329,776 23,528 1.8
-------------------------------------------------------------------------------------------------------
Operating income 204,329 190,798 13,531 7.1
Operating income on office
equipment sales(%) 13.1 12.5
-------------------------------------------------------------------------------------------------------
OTHER BUSINESSES:
Net sales:
Unaffiliated customers 222,612 217,784 4,828 2.2
Intersegment 2,462 2,755 -293 -10.6
Total 225,074 220,539 4,535 2.1
-------------------------------------------------------------------------------------------------------
Operating expenses 220,391 222,772 -2,381 -1.1
-------------------------------------------------------------------------------------------------------
Operating income 4,683 -2,233 6,916 --
Operating income on sales in
other businesses (%) 2.1 -1.0
-------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -2,462 -2,755 293 --
Total -2,462 -2,755 293 --
-------------------------------------------------------------------------------------------------------
Operating expenses:
Intersegment -2,494 -2,726 232 --
Corporate 59,038 54,882 4,156 --
Total 56,544 52,156 4,388 --
-------------------------------------------------------------------------------------------------------
Operating income -59,006 -54,911 -4,095 --
-------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
Unaffiliated customers 1,780,245 1,738,358 41,887 2.4
Intersegment -- -- -- --
Total 1,780,245 1,738,358 41,887 2.4
-------------------------------------------------------------------------------------------------------
Operating expenses 1,630,239 1,604,704 25,535 1.6
-------------------------------------------------------------------------------------------------------
Operating income 150,006 133,654 16,352 12.2
Operating income on
consolidated net sales(%) 8.4 7.7
-------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
-------------------------------------------------------------------------------------------------------
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
Office Equipment 1,220,747 1,198,706 22,041 1.8
Other Businesses 182,532 176,296 6,236 3.5
Elimination -8,047 -6,908 -1,139 16.5
Corporate assets 457,561 516,828 -59,267 -11.5
-------------------------------------------------------------------------------------------------------
Total 1,852,793 1,884,922 -32,129 -1.7
-------------------------------------------------------------------------------------------------------
Capital expenditure: (Millions of yen)
-------------------------------------------------------------------------------------------------------
Year ended Year ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
Office Equipment 65,366 65,720 -354 -0.5
Other Businesses 8,712 7,213 1,499 20.8
Corporate 1,429 1,023 406 39.7
-------------------------------------------------------------------------------------------------------
Total 75,507 73,956 1,551 2.1
-------------------------------------------------------------------------------------------------------
Depreciation: (Millions of yen)
-------------------------------------------------------------------------------------------------------
Year ended Year ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
Office Equipment 57,956 60,687 -2,731 -4.5
Other Businesses 7,774 6,917 857 12.4
Corporate 1,954 1,954 -- --
-------------------------------------------------------------------------------------------------------
Total 67,684 69,558 -1,874 -2.7
-------------------------------------------------------------------------------------------------------
21
(2) Geographic Segment Information
(Three months ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------
Three months ended Three months ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
JAPAN:
Net sales:
External customers 258,807 249,405 9,402 3.8
Intersegment 83,638 83,382 256 0.3
Total 342,445 332,787 9,658 2.9
-------------------------------------------------------------------------------------------------------
Operating expenses 322,424 310,014 12,410 4.0
-------------------------------------------------------------------------------------------------------
Operating income 20,021 22,773 -2,752 -12.1
Operating income on sales
in Japan(%) 5.8 6.8
-------------------------------------------------------------------------------------------------------
THE AMERICAS:
Net sales:
External customers 81,216 86,937 -5,721 -6.6
Intersegment 1,385 1,810 -425 -23.5
Total 82,601 88,747 -6,146 -6.9
-------------------------------------------------------------------------------------------------------
Operating expenses 74,417 83,754 -9,337 -11.1
-------------------------------------------------------------------------------------------------------
Operating income 8,184 4,993 3,191 63.9
Operating income on sales
in the Americas(%) 9.9 5.6
-------------------------------------------------------------------------------------------------------
EUROPE:
Net sales:
External customers 105,222 99,704 5,518 5.5
Intersegment 963 936 27 2.9
Total 106,185 100,640 5,545 5.5
-------------------------------------------------------------------------------------------------------
Operating expenses 99,566 93,879 5,687 6.1
-------------------------------------------------------------------------------------------------------
Operating income 6,619 6,761 -142 -2.1
Operating income on sales
in Europe(%) 6.2 6.7
-------------------------------------------------------------------------------------------------------
OTHER:
Net sales:
External customers 26,007 24,752 1,255 5.1
Intersegment 21,921 18,489 3,432 18.6
Total 47,928 43,241 4,687 10.8
-------------------------------------------------------------------------------------------------------
Operating expenses 44,645 40,897 3,748 9.2
-------------------------------------------------------------------------------------------------------
Operating income 3,283 2,344 939 40.1
Operating income on sales
in other(%) 6.8 5.4
-------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -107,907 -104,617 -3,290 --
Total -107,907 -104,617 -3,290 --
-------------------------------------------------------------------------------------------------------
Operating expenses: -106,337 -106,678 341 --
-------------------------------------------------------------------------------------------------------
Operating income -1,570 2,061 -3,631 --
-------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
External customers 471,252 460,798 10,454 2.3
Intersegment -- -- -- --
Total 471,252 460,798 10,454 2.3
-------------------------------------------------------------------------------------------------------
Operating expenses 434,715 421,866 12,849 3.0
-------------------------------------------------------------------------------------------------------
Operating income 36,537 38,932 -2,395 -6.2
Operating income on
consolidated net sales(%) 7.8 8.4
-------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
-------------------------------------------------------------------------------------------------------
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
Japan 1,071,297 1,064,857 6,440 0.6
The Americas 188,644 201,359 -12,715 -6.3
Europe 188,184 174,541 13,643 7.8
Other 63,701 70,458 -6,757 -9.6
Elimination -116,594 -143,121 26,527 -18.5
Corporate assets 457,561 516,828 -59,267 -11.5
-------------------------------------------------------------------------------------------------------
Total 1,852,793 1,884,922 -32,129 -1.7
-------------------------------------------------------------------------------------------------------
22
(Year ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------
Year ended Year ended
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
JAPAN:
Net sales:
External customers 962,127 954,310 7,817 0.8
Intersegment 351,070 320,596 30,474 9.5
Total 1,313,197 1,274,906 38,291 3.0
-------------------------------------------------------------------------------------------------------
Operating expenses 1,215,875 1,188,760 27,115 2.3
-------------------------------------------------------------------------------------------------------
Operating income 97,322 86,146 11,176 13.0
Operating income on sales
in Japan(%) 7.4 6.8
-------------------------------------------------------------------------------------------------------
THE AMERICAS:
Net sales:
External customers 315,504 333,935 -18,431 -5.5
Intersegment 5,249 5,620 -371 -6.6
Total 320,753 339,555 -18,802 -5.5
-------------------------------------------------------------------------------------------------------
Operating expenses 305,284 325,228 -19,944 -6.1
-------------------------------------------------------------------------------------------------------
Operating income 15,469 14,327 1,142 8.0
Operating income on sales
in the Americas(%) 4.8 4.2
-------------------------------------------------------------------------------------------------------
EUROPE:
Net sales:
External customers 400,646 352,943 47,703 13.5
Intersegment 3,770 3,019 751 24.9
Total 404,416 355,962 48,454 13.6
-------------------------------------------------------------------------------------------------------
Operating expenses 382,383 337,693 44,690 13.2
-------------------------------------------------------------------------------------------------------
Operating income 22,033 18,269 3,764 20.6
Operating income on sales
in Europe(%) 5.4 5.1
-------------------------------------------------------------------------------------------------------
OTHER:
Net sales:
External customers 101,968 97,170 4,798 4.9
Intersegment 91,373 72,664 18,709 25.7
Total 193,341 169,834 23,507 13.8
-------------------------------------------------------------------------------------------------------
Operating expenses 182,870 159,864 23,006 14.4
-------------------------------------------------------------------------------------------------------
Operating income 10,471 9,970 501 5.0
Operating income on sales
in other(%) 5.4 5.9
-------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -451,462 -401,899 -49,563 --
Total -451,462 -401,899 -49,563 --
-------------------------------------------------------------------------------------------------------
Operating expenses: -456,173 -406,841 -49,332 --
-------------------------------------------------------------------------------------------------------
Operating income 4,711 4,942 -231 --
-------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
External customers 1,780,245 1,738,358 41,887 2.4
Intersegment -- -- -- --
Total 1,780,245 1,738,358 41,887 2.4
-------------------------------------------------------------------------------------------------------
Operating expenses 1,630,239 1,604,704 25,535 1.6
-------------------------------------------------------------------------------------------------------
Operating income 150,006 133,654 16,352 12.2
Operating income on
consolidated net sales(%) 8.4 7.7
-------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
-------------------------------------------------------------------------------------------------------
March 31, 2004 March 31, 2003 Change %
-------------------------------------------------------------------------------------------------------
Japan 1,071,297 1,064,857 6,440 0.6
The Americas 188,644 201,359 -12,715 -6.3
Europe 188,184 174,541 13,643 7.8
Other 63,701 70,458 -6,757 -9.6
Elimination -116,594 -143,121 26,527 -18.5
Corporate assets 457,561 516,828 -59,267 -11.5
-------------------------------------------------------------------------------------------------------
Total 1,852,793 1,884,922 -32,129 -1.7
-------------------------------------------------------------------------------------------------------
23
7. SIGNIFICANT ACCOUNTING POLICIES (CONSOLIDATED)
1. CHANGE RELATING TO THE SCALE OF CONSOLIDATION AND THE APPLICATION OF THE
EQUITY METHOD FROM APRIL 1, 2003 TO MARCH 31, 2004.
Consolidated subsidiaries:
Addition: NRG SECURITIES LTD.
14 removals including OFFICE RESEARCH INSTITUTE CO., LTD.
and TAIWAN RICOH CO., LTD.
Companies accounted for by the equity method:
2 additions including RICOH SOFTWARE RESEARCH CENTER (BEIJING) CO., LTD.
3 removals including T&P CO., LTD.
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.
In March 2000, the Company contributed certain marketable equity securities, not
including those of its subsidiaries and affiliated companies, to its employee
retirement benefit trust (the "Trust") fully administered and controlled by an
independent bank trustee, with no cash proceeds thereon (the "2000 Transfer").
The 2000 Transfer of the available-for-sale securities was accounted for as a
sale in accordance with SFAS No.125, "Accounting for Transfer and Servicing of
Financial Assets and Extinguishments of Liabilities" and accordingly the
recorded pension liability was reduced by the fair market value amount of the
transferred securities. The fair value of these securities at the time of
transfer was Yen 20,760 million. The net unrealized gains on these
available-for-sale securities amounting to Yen 13,095 million and was initially
included in "Accumulated other comprehensive income (loss)" on the consolidated
balance sheets with the expectation of being reflected in realized gains in the
statements of income upon the future sale of the transferred securities by the
trustee.
In March 2004, the Company contributed certain additional marketable equity
securities, not including those of its subsidiaries and affiliated companies to
the Trust, with no cash proceeds thereon (the "2004 Transfer"). The fair value
and net unrealized gains on these available-for-sale securities at the time of
transfer was Yen 3,648 million and Yen 2,691 million, respectively.
In connection with the 2004 Transfer, the Company has changed its accounting
policy with respect to the recognition of unrealized gains and losses as
realized in the statements of income on transfers of such marketable equity
securities. The Company has concluded that it is preferable to recognize in the
statements of income unrealized gains or losses associated with marketable
equity securities transferred to the Trust when the Company has effectively
given up the economic rewards of ownership, that is, when the assets are no
longer considered corporate assets and when the Trust has the irrevocable and
unrestricted right to realize those benefits as and when it chooses. This
generally occurs at the time the assets are transferred to the Trust and not
upon future sale of the assets by the trustee provided.
Accordingly, the Company has recognized realized gains in the consolidated
statement of income on the transfer of marketable equity securities to the Trust
for fiscal 2004 of Yen 2,691 million. In addition, the Company has recognized in
its fiscal 2004 consolidated statement of income a cumulative effect of
accounting change, net of tax, of Yen 7,373 million associated with the 2000
Transfer.
(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."
24
(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) Pension and Retirement Allowances Plans
The measurement of pension costs and liabilities is determined in accordance
with SFAS No.87, "Employers' Accounting for Pensions." Under SFAS 87, changes in
the amount of either the projected benefit obligation or plan assets resulting
from actual results different from that assumed and from changes in assumptions
can result in gains and losses not yet recognized in the consolidated financial
statements. Amortization of an unrecognized net gain or loss is included as a
component of the net periodic benefit plan cost for a year if, as of the
beginning of the year, that unrecognized net gain or loss exceeds 10 percent of
the greater of (1) the projected benefit obligation or (2) the fair value of
that plan's assets. In such case, the amount of amortization recognized is the
resulting excess divided by the average remaining service period of active
employees expected to receive benefits under the plan. The expected long-term
rate of return on plan assets used for pension accounting is determined based on
the historical long-term rate of return on plan assets. The discount rate is
determined based on the rates of return of high-quality fixed-income investments
currently available and expected to be available during the period to maturity
of the pension benefits.
Pursuant to the newly enacted Defined Payment Corporate Pension Act, Ricoh
received an approval of exemption from the Minister of Health, Labor and
Welfare, effective January 1, 2003, from the obligation for benefits related to
future employee service with respect to the substitutional portion of its EPF.
Ricoh received government approval of exemption from the obligation for benefits
related to past employee service in January 2004 with respect to the
substitutional portion of its domestic contributory plan. The transfer to the
government was completed on March 16, 2004.
Ricoh accounted for the transfer in accordance with Emerging Issues Task Force
Issue No. 03-2 "Accounting for the Transfer to the Japanese Government of the
Substitutional Portion of Employee Pension Fund Liabilities" ("EITF 03-2"). As
specified in EITF 03-2, the entire separation process is to be accounted for at
the time of completion of the transfer to the government of the substitutional
portion of the benefit obligation and related plan assets as a settlement in
accordance with Statement of Financial Accounting Standards No. 88 "Employers'
Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and
for Termination Benefits". As a result of the transfer, Ricoh recognized net
settlement gain of Yen 8,315 million for the year ended March 31, 2004 and is
presented net in operating expense.
(7) 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.
25
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 March 31, 2004 and March 31, 2003
are as follows:
(Millions of yen)
--------------------------------------------------------------------------------------------
March 31, 2004
--------------------------------------------------------------------------------------------
Gross Gross
unrealized unrealized
Cost holding gains holding losses Fair value
--------------------------------------------------------------------------------------------
Current:
Corporate debt securities 45,139 6 22 45,123
Other 1 -- -- 1
--------------------------------------------------------------------------------------------
45,140 6 22 45,124
--------------------------------------------------------------------------------------------
Noncurrent:
Equity securities 5,053 8,080 33 13,100
Corporate debt securities -- -- -- --
Other 1,174 492 -- 1,666
Nonmarketable securities (at cost) 7,105 -- -- 7,105
--------------------------------------------------------------------------------------------
13,332 8,572 33 21,871
--------------------------------------------------------------------------------------------
(Millions of yen)
--------------------------------------------------------------------------------------------
March 31, 2003
--------------------------------------------------------------------------------------------
Gross Gross
unrealized 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 March
31, 2004, and March 31, 2003 are as follows:
(Millions of yen)
----------------------------------------------------------------------------
March 31, 2004
----------------------------------------------------------------------------
Carrying Estimated
amount Fair value
----------------------------------------------------------------------------
Interest rate swap agreements, net 2,266 2,266
Foreign currency contracts-net credit 1,876 1,876
Currency options-net credit -145 -145
----------------------------------------------------------------------------
Total 3,997 3,997
----------------------------------------------------------------------------
(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)
----------------------------------------------------------------------------
March 31, 2004 March 31, 2003
----------------------------------------------------------------------------
Account balances:
Receivables 3,530 6,434
Payables 2,217 1,604
----------------------------------------------------------------------------
(Millions of yen)
----------------------------------------------------------------------------
Year ended Year ended
March 31, 2004 March 31, 2003
----------------------------------------------------------------------------
Transactions:
Sales 19,534 26,510
Purchases 18,714 19,808
Dividend income 1,064 1,236
----------------------------------------------------------------------------
26
-APPENDIX A- (Year ended march 31, 2004)
1. CONSOLIDATED QUARTERLY PERFORMANCE OUTLINE
(Billions of yen)
-----------------------------------------------------------------------------------------------------------------------
1Q Change(%) 2Q Change(%) 3Q Change(%) 4Q Change(%)
-----------------------------------------------------------------------------------------------------------------------
Net sales 437.4 2.1 450.6 5.2 420.9 0.0 471.2 2.3
Gross profit 192.7 3.4 195.3 12.2 185.7 0.5 191.7 -4.0
Operating income 38.4 7.1 38.7 52.6 36.2 8.4 36.5 -6.2
Income before income taxes 37.3 15.6 34.0 45.7 33.2 10.9 38.3 1.5
Net income 22.3 14.5 19.9 42.2 19.6 10.5 29.8 40.8
-----------------------------------------------------------------------------------------------------------------------
Net income per share (yen) 30.04 -- 26.75 -- 26.53 -- 40.31 --
-----------------------------------------------------------------------------------------------------------------------
Total assets 1,924.6 -- 1,912.1 -- 1,922.1 -- 1,852.7 --
Shareholders' equity 685.7 -- 703.0 -- 708.8 -- 795.1 --
-----------------------------------------------------------------------------------------------------------------------
Shareholders' equity per share (yen) 920.97 -- 946.38 -- 958.20 -- 1,076.11 --
-----------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities 39.8 -- 21.7 -- 20.0 -- 73.2 --
Cash flows from investing activities -7.9 -- -12.0 -- -20.4 -- -22.9 --
Cash flows from financing activities -6.4 -- -0.2 -- 15.8 -- -84.0 --
Cash and cash equivalents at end of
period 215.9 -- 225.0 -- 238.3 -- 203.0 --
-----------------------------------------------------------------------------------------------------------------------
(2) Capital expenditures and Depreciation (Billions of yen)
-----------------------------------------------------------------------------------------------------------------------
1Q 2Q 3Q 4Q
-----------------------------------------------------------------------------------------------------------------------
Capital expenditures 18.6 17.6 15.5 23.6
Depreciation for tangible fixed assets 17.0 16.5 15.7 18.2
-----------------------------------------------------------------------------------------------------------------------
(3) R&D Expenditures (Billions of yen)
-----------------------------------------------------------------------------------------------------------------------
1Q 2Q 3Q 4Q
-----------------------------------------------------------------------------------------------------------------------
R&D expenditures 19.3 24.8 24.2 24.0
R&D expenditures / Total Sales (%) 4.4 5.5 5.8 5.1
-----------------------------------------------------------------------------------------------------------------------
(4) Interest income (expenses) net (Billions of yen)
-----------------------------------------------------------------------------------------------------------------------
1Q 2Q 3Q 4Q
-----------------------------------------------------------------------------------------------------------------------
Interest income (expenses) net -0.8 -0.7 -0.9 -0.9
-----------------------------------------------------------------------------------------------------------------------
(5) Exchange Rate
-----------------------------------------------------------------------------------------------------------------------
1Q 2Q 3Q 4Q
-----------------------------------------------------------------------------------------------------------------------
Exchange rate (Yen/US$) 118.52 117.61 108.92 107.31
Exchange rate (Yen/EURO) 134.67 132.27 129.58 134.10
-----------------------------------------------------------------------------------------------------------------------
A1
2. CONSOLIDATED SALES BY PRODUCT CATEGORY
(Three months ended March 31, 2004 and 2003) (Millions of yen)
-----------------------------------------------------------------------------------------------------------------
Three months Three months
ended ended Change excluding
March 31, 2004 March 31, 2003 Change % exchange impact %
-----------------------------------------------------------------------------------------------------------------
( Office Equipment )
Imaging Solutions:
Digital Imaging Systems 153,230 166,111 -12,881 -7.8 -9,957 -6.0
Percentage of net sales (%) 32.5 36.0
Domestic 69,041 66,170 2,871 4.3 2,871 4.3
Overseas 84,189 99,941 -15,752 -15.8 -12,828 -12.8
Other Imaging Systems 46,217 54,917 -8,700 -15.8 -8,305 -15.1
Percentage of net sales (%) 9.8 12.0
Domestic 16,974 18,822 -1,848 -9.8 -1,848 -9.8
Overseas 29,243 36,095 -6,852 -19.0 -6,457 -17.9
Total Imaging Solutions 199,447 221,028 -21,581 -9.8 -18,262 -8.3
Percentage of net sales (%) 42.3 48.0
Domestic 86,015 84,992 1,023 1.2 1,023 1.2
Overseas 113,432 136,036 -22,604 -16.6 -19,285 -14.2
-----------------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 151,191 116,450 34,741 29.8 35,131 30.2
Percentage of net sales (%) 32.1 25.3
Domestic 64,255 51,043 13,212 25.9 13,212 25.9
Overseas 86,936 65,407 21,529 32.9 21,919 33.5
Other Input/Output Systems 5,928 10,565 -4,637 -43.9 -4,681 -44.3
Percentage of net sales (%) 1.2 2.3
Domestic 1,186 1,868 -682 -36.5 -682 -36.5
Overseas 4,742 8,697 -3,955 -45.5 -3,999 -46.0
Total Network Input/Output Systems 157,119 127,015 30,104 23.7 30,450 24.0
Percentage of net sales (%) 33.3 27.6
Domestic 65,441 52,911 12,530 23.7 12,530 23.7
Overseas 91,678 74,104 17,574 23.7 17,920 24.2
-----------------------------------------------------------------------------------------------------------------
Network System Solutions 56,967 57,357 -390 -0.7 -335 -0.6
Percentage of net sales (%) 12.2 12.4
Domestic 55,502 56,795 -1,293 -2.3 -1,293 -2.3
Overseas 1,465 562 903 160.7 958 170.5
-----------------------------------------------------------------------------------------------------------------
Office Equipment Total 413,533 405,400 8,133 2.0 11,853 2.9
Percentage of net sales (%) 87.8 88.0
Domestic 206,958 194,698 12,260 6.3 12,260 6.3
Overseas 206,575 210,702 -4,127 -2.0 -407 -0.2
The Americas 82,663 88,937 -6,274 -7.1 2,316 2.6
Europe 104,981 98,309 6,672 6.8 1,560 1.6
Other 18,931 23,456 -4,525 -19.3 -4,283 -18.3
-----------------------------------------------------------------------------------------------------------------
( Other Businesses )
Other Businesses 57,719 55,398 2,321 4.2 1,879 3.4
Percentage of net sales (%) 12.2 12.0
Domestic 45,558 41,552 4,006 9.6 4,006 9.6
Overseas 12,161 13,846 -1,685 -12.2 -2,127 -15.4
The Americas 120 393 -273 -69.5 -254 -64.6
Europe 1,038 1,618 -580 -35.8 -624 -38.6
Other 11,003 11,835 -832 -7.0 -1,249 -10.6
-----------------------------------------------------------------------------------------------------------------
Grand Total 471,252 460,798 10,454 2.3 13,732 3.0
Percentage of net sales (%) 100.0 100.0
Domestic 252,516 236,250 16,266 6.9 16,266 6.9
Percentage of net sales (%) 53.6 51.3
Overseas 218,736 224,548 -5,812 -2.6 -2,534 -1.1
Percentage of net sales (%) 46.4 48.7
The Americas 82,783 89,330 -6,547 -7.3 2,062 2.3
Percentage of net sales (%) 17.6 19.4
Europe 106,019 99,927 6,092 6.1 936 0.9
Percentage of net sales (%) 22.5 21.7
Other 29,934 35,291 -5,357 -15.2 -5,532 -15.7
Percentage of net sales (%) 6.3 7.6
-----------------------------------------------------------------------------------------------------------------
Reference: Exchange rate
US$ 1 Yen 107.31 Yen 119.04 Yen -11.73
EURO 1 Yen 134.10 Yen 127.63 Yen 6.47
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
(Year ended March 31, 2004 and 2003) (Millions of yen)
-------------------------------------------------------------------------------------------------------------------------------
Year ended Year ended Change excluding
March 31, 2004 March 31, 2003 Change % exchange impact %
-------------------------------------------------------------------------------------------------------------------------------
( Office Equipment )
Imaging Solutions:
Digital Imaging Systems 606,270 626,967 -20,697 -3.3 -21,034 -3.4
Percentage of net sales (%) 34.1 36.1
Domestic 253,830 265,654 -11,824 -4.5 -11,824 -4.5
Overseas 352,440 361,313 -8,873 -2.5 -9,210 -2.5
Other Imaging Systems 197,304 232,746 -35,442 -15.2 -38,022 -16.3
Percentage of net sales (%) 11.0 13.4
Domestic 70,762 80,520 -9,758 -12.1 -9,758 -12.1
Overseas 126,542 152,226 -25,684 -16.9 -28,264 -18.6
Total Imaging Solutions 803,574 859,713 -56,139 -6.5 -59,056 -6.9
Percentage of net sales (%) 45.1 49.5
Domestic 324,592 346,174 -21,582 -6.2 -21,582 -6.2
Overseas 478,982 513,539 -34,557 -6.7 -37,474 -7.3
-------------------------------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 509,212 408,830 100,382 24.6 94,874 23.2
Percentage of net sales (%) 28.6 23.5
Domestic 218,165 177,510 40,655 22.9 40,655 22.9
Overseas 291,047 231,320 59,727 25.8 54,219 23.4
Other Input/Output Systems 49,025 54,549 -5,524 -10.1 -6,459 -11.8
Percentage of net sales (%) 2.8 3.2
Domestic 4,981 10,100 -5,119 -50.7 -5,119 -50.7
Overseas 44,044 44,449 -405 -0.9 -1,340 -3.0
Total Network Input/Output Systems 558,237 463,379 94,858 20.5 88,415 19.1
Percentage of net sales (%) 31.4 26.7
Domestic 223,146 187,610 35,536 18.9 35,536 18.9
Overseas 335,091 275,769 59,322 21.5 52,879 19.2
-------------------------------------------------------------------------------------------------------------------------------
Network System Solutions 195,822 197,482 -1,660 -0.8 -1,680 -0.9
Percentage of net sales (%) 11.0 11.3
Domestic 191,302 194,873 -3,571 -1.8 -3,571 -1.8
Overseas 4,520 2,609 1,911 73.2 1,891 72.5
-------------------------------------------------------------------------------------------------------------------------------
Office Equipment Total 1,557,633 1,520,574 37,059 2.4 27,679 1.8
Percentage of net sales (%) 87.5 87.5
Domestic 739,040 728,657 10,383 1.4 10,383 1.4
Overseas 818,593 791,917 26,676 3.4 17,296 2.2
The Americas 325,106 342,568 -17,462 -5.1 7,186 2.1
Europe 398,109 349,577 48,532 13.9 15,008 4.3
Other 95,378 99,772 -4,394 -4.4 -4,898 -4.9
-------------------------------------------------------------------------------------------------------------------------------
( Other Businesses )
Other Businesses 222,612 217,784 4,828 2.2 3,067 1.4
Percentage of net sales (%) 12.5 12.5
Domestic 175,020 167,365 7,655 4.6 7,655 4.6
Overseas 47,592 50,419 -2,827 -5.6 -4,588 -9.1
The Americas 1,274 1,372 -98 -7.1 -1 -0.1
Europe 4,283 4,900 -617 -12.6 -943 -19.2
Other 42,035 44,147 -2,112 -4.8 -3,644 -8.3
-------------------------------------------------------------------------------------------------------------------------------
Grand Total 1,780,245 1,738,358 41,887 2.4 30,746 1.8
Percentage of net sales (%) 100.0 100.0
Domestic 914,060 896,022 18,038 2.0 18,038 2.0
Percentage of net sales (%) 51.3 51.5
Overseas 866,185 842,336 23,849 2.8 12,708 1.5
Percentage of net sales (%) 48.7 48.5
The Americas 326,380 343,940 -17,560 -5.1 7,185 2.1
Percentage of net sales (%) 18.3 19.8
Europe 402,392 354,477 47,915 13.5 14,065 4.0
Percentage of net sales (%) 22.6 20.4
Other 137,413 143,919 -6,506 -4.5 -8,542 -5.9
Percentage of net sales (%) 7.8 8.3
-------------------------------------------------------------------------------------------------------------------------------
Reference: Exchange rate
US$ 1 Yen 113.09 Yen 121.96 Yen -8.87
EURO 1 Yen 132.65 Yen 121.00 Yen 11.65
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
A3
3. FORECAST OF CONSOLIDATED SALES BY PRODUCT CATEGORY
(Billions of yen)
----------------------------------------------------------------------------------------------------------------------------------
Year ended March 31, 2005 Half year ended September 30, 2004
------------------------------------- -------------------------------------
Year ended Change Change Change Change
Mar.31,'04 Forecast % Forecast(*) % Forecast % Forecast(*) %
----------------------------------------------------------------------------------------------------------------------------------
( Office Equipment )
Imaging Solutions:
Digital Imaging Systems 606.2 543.3 -10.4 556.0 -8.3 281.6 -8.9 291.6 -5.7
Domestic 253.8 230.0 -9.4 230.0 -9.4 119.1 -4.5 119.1 -4.5
Overseas 352.4 313.3 -11.1 326.0 -7.5 162.5 -11.9 172.5 -6.4
Other Imaging Systems 197.3 157.5 -20.1 161.5 -18.1 83.9 -20.7 87.2 -17.7
Domestic 70.7 60.5 -14.5 60.5 -14.5 31.2 -14.5 31.2 -14.5
Overseas 126.5 97.0 -23.3 101.0 -20.2 52.7 -24.0 56.0 -19.4
Total Imaging Solutions 803.5 700.9 -12.8 717.5 -10.7 365.5 -11.9 378.8 -8.7
Domestic 324.5 290.5 -10.5 290.5 -10.5 150.3 -6.8 150.3 -6.8
Overseas 478.9 410.4 -14.3 427.0 -10.9 215.2 -15.2 228.5 -10.0
----------------------------------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 509.2 636.5 25.0 651.5 27.9 293.2 25.6 303.6 30.0
Domestic 218.1 265.8 21.8 265.8 21.8 124.6 24.2 124.6 24.2
Overseas 291.0 370.7 27.4 385.7 32.5 168.6 26.7 179.0 34.5
Other Input/Output Systems 49.0 48.9 -0.2 51.1 4.2 22.9 -22.8 24.1 -18.9
Domestic 4.9 2.7 -45.8 2.7 -45.8 1.0 -63.5 1.0 -63.5
Overseas 44.0 46.2 5.0 48.4 9.9 21.9 -18.6 23.1 -14.4
Total Network Input/Output Systems 558.2 685.5 22.8 702.6 25.9 316.1 20.1 327.7 24.5
Domestic 223.1 268.5 20.3 268.5 20.3 125.6 21.8 125.6 21.8
Overseas 335.0 417.0 24.5 434.1 29.5 190.5 19.0 202.1 26.2
----------------------------------------------------------------------------------------------------------------------------------
Network System Solutions 195.8 203.4 3.9 203.7 4.0 100.8 3.7 101.0 3.9
Domestic 191.3 196.0 2.5 196.0 2.5 97.6 2.5 97.6 2.5
Overseas 4.5 7.4 63.8 7.7 70.4 3.2 62.4 3.4 72.4
----------------------------------------------------------------------------------------------------------------------------------
Office Equipment Total 1,557.6 1,589.9 2.1 1,623.8 4.2 782.5 0.9 807.5 4.1
Domestic 739.0 755.0 2.2 755.0 2.2 373.5 3.9 373.5 3.9
Overseas 818.5 834.9 2.0 868.8 6.1 409.0 -1.6 434.0 4.4
The Americas 325.1 318.2 -2.1 342.8 5.4 154.6 -7.3 173.9 4.3
Europe 398.1 410.1 3.0 418.5 5.1 199.2 2.4 204.6 5.1
Other 95.3 106.5 11.7 107.5 12.7 55.1 1.3 55.5 2.1
----------------------------------------------------------------------------------------------------------------------------------
( Other Businesses )
Other Businesses 222.6 220.0 -1.1 220.4 -1.0 112.5 -0.1 112.7 0.1
Domestic 175.0 180.0 2.8 180.0 2.8 92.5 3.9 92.5 3.9
Overseas 47.5 40.0 -15.8 40.4 -15.1 20.0 -15.1 20.2 -14.3
The Americas 1.2 1.2 -5.3 1.3 2.0 0.8 -7.4 0.9 4.2
Europe 4.2 6.6 55.6 6.8 58.8 3.5 55.8 3.6 59.9
Other 42.0 32.2 -23.4 32.3 -23.2 15.7 -23.2 15.7 -23.2
----------------------------------------------------------------------------------------------------------------------------------
Grand Total 1,780.2 1,810.0 1.7 1,844.2 3.6 895.0 0.8 920.2 3.6
Domestic 914.0 935.0 2.3 935.0 2.3 466.0 3.9 466.0 3.9
Overseas 866.1 875.0 1.0 909.2 5.0 429.0 -2.4 454.2 3.4
The Americas 326.3 319.4 -2.1 344.1 5.4 155.4 -7.3 174.8 4.3
Europe 402.3 416.8 3.6 425.3 5.7 202.7 3.0 208.2 5.7
Other 137.4 138.7 0.9 139.8 1.7 70.8 -5.4 71.2 -4.9
----------------------------------------------------------------------------------------------------------------------------------
* Excluding foreign exchange impact
Reference: Year ended Mar. 31, '04 Year ended Mar. 31, '05 Half year ended Sept. 30, '04
Exchange rate (Results) (Forecast) (Forecast)
US$ 1 Yen 113.09 Yen 105.00 Yen 105.00
EURO 1 Yen 132.65 Yen 130.00 Yen 130.00
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, measuring equipments and
semiconductors
A4
-APPENDIX B-
[SCHEDULE 1] CONSOLIDATED PERFORMANCE
---------------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
March 31, 2000 March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004
---------------------------------------------------------------------------------------------------------------------------
Net sales (Billions of yen) 1,447.1 1,538.2 1,672.3 1,738.3 1,780.2
Net income (Billions of yen) 41.9 53.2 61.6 72.5 91.7
Return on equity (%) 8.1 9.7 10.4 11.2 12.6
Return on assets (%) 4.4 6.0 6.4 6.6 7.7
Net income per share (Yen) 60.61 76.85 88.27 99.79 123.63
---------------------------------------------------------------------------------------------------------------------------
[SCHEDULE 2] CONSOLIDATED SALES BY PRODUCT LINE
---------------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
March 31, 2000 March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004
---------------------------------------------------------------------------------------------------------------------------
Imaging Solutions (Billions of yen) 898.0 867.0 934.1 859.7 803.5
Networking I/O Systems (Billions of yen) 173.1 261.8 344.2 463.3 558.2
Network System Solutions (Billions of yen) 181.9 209.5 206.9 197.4 195.8
Other Businesses (Billions of yen) 194.0 199.8 186.9 217.7 222.6
---------------------------------------------------------------------------------------------------------------------------
Imaging Solutions (%) 62.0 56.4 55.8 49.5 45.1
Networking I/O Systems (%) 12.0 17.0 20.6 26.7 31.4
Network System Solutions (%) 12.6 13.6 12.4 11.3 11.0
Other Businesses (%) 13.4 13.0 11.2 12.5 12.5
Total 100.0 100.0 100.0 100.0 100.0
---------------------------------------------------------------------------------------------------------------------------
[SCHEDULE 3] CONSOLIDATED SALES BY GEOGRAPHIC AREA
---------------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
March 31, 2000 March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004
---------------------------------------------------------------------------------------------------------------------------
Japan (Billions of yen) 873.1 930.4 902.6 896.0 914.0
The Americas (Billions of yen) 231.1 252.6 341.7 343.9 326.3
Europe (Billions of yen) 258.5 247.4 311.3 354.4 402.3
Others (Billions of yen) 84.3 107.6 116.6 143.9 137.4
---------------------------------------------------------------------------------------------------------------------------
Japan (%) 60.3 60.5 54.0 51.5 51.3
The Americas (%) 16.0 16.4 20.4 19.8 18.3
Europe (%) 17.9 16.1 18.6 20.4 22.6
Others (%) 5.8 7.0 7.0 8.3 7.8
Total 100.0 100.0 100.0 100.0 100.0
---------------------------------------------------------------------------------------------------------------------------
[SCHEDULE 4] GEOGRAPHIC SEGMENT INFORMATION
---------------------------------------------------------------------------
Year ended Year ended
Japan March 31, 2003 March 31, 2004
---------------------------------------------------------------------------
Net sales (Billions of yen) 1,274.9 1,313.1
Operating income (Billions of yen) 86.1 97.3
Operating income on net sales (%) 6.8 7.4
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Year ended Year ended
The Americas March 31, 2003 March 31, 2004
---------------------------------------------------------------------------
Net sales (Billions of yen) 339.5 320.7
Operating income (Billions of yen) 14.3 15.4
Operating income on net sales (%) 4.2 4.8
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Year ended Year ended
Europe March 31, 2003 March 31, 2004
---------------------------------------------------------------------------
Net sales (Billions of yen) 355.9 404.4
Operating income (Billions of yen) 18.2 22.0
Operating income on net sales (%) 5.1 5.4
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Year ended Year ended
Others March 31, 2003 March 31, 2004
---------------------------------------------------------------------------
Net sales (Billions of yen) 169.8 193.3
Operating income (Billions of yen) 9.9 10.4
Operating income on net sales (%) 5.9 5.4
---------------------------------------------------------------------------
A5