-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mg2oS2SUHwxKbtM0Ycb2/ejRBhV7nlniAQ20X1S8ANwUv5wFRMNSVp8WfCKyn0lD kAs+OW0GZovlUrweaqWYDA== 0000317891-05-000007.txt : 20050427 0000317891-05-000007.hdr.sgml : 20050427 20050427075443 ACCESSION NUMBER: 0000317891-05-000007 CONFORMED SUBMISSION TYPE: 6-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050427 FILED AS OF DATE: 20050427 DATE AS OF CHANGE: 20050427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RICOH CO LTD CENTRAL INDEX KEY: 0000317891 STANDARD INDUSTRIAL CLASSIFICATION: PHOTOGRAPHIC EQUIPMENT & SUPPLIES [3861] IRS NUMBER: 000000000 STATE OF INCORPORATION: M0 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 6-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 002-68279 FILM NUMBER: 05774597 BUSINESS ADDRESS: STREET 1: 15-5 1-CHOME MINAMI-AOYAMA STREET 2: MINATO-KU CITY: TOKYO 107-8544 JAPAN STATE: M0 ZIP: 00000 BUSINESS PHONE: 81-3-5411-4744 MAIL ADDRESS: STREET 1: 15-5 1-CHOME MINAMI-AOYAMA STREET 2: MINATO-KU CITY: TOKYO 107-8544 JAPAN STATE: M0 ZIP: 00000 6-K/A 1 r6kh17apr27a.txt FLASH REPORT 3-31-2005 FORM 6-K/A Amendment No.1 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, 2005 Commission File Number 2 - 68279 RICOH COMPANY, LTD. ----------------------------------------------- (Translation of Registrant's name into English) 15-5, Minami-Aoyama 1-Chome, Minato-ku, Tokyo 107-8544, Japan ------------------------------------------------------------- (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-__ ) Note Ricoh Company, Ltd. (the "Company") filed its Form 6-K with Securities and Exchange Commission, regarding its financial results for the fiscal year ended March 31, 2005. The Company refiles the Form 6-K/A, amending and replacing the above Form 6-K that is not correct. - -------------------------------------------------------------------------------- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Ricoh Company, Ltd. ------------------------------ (Registrant) By: /S/ Zenji Miura ------------------------------ Zenji Miura Managing Director Executive Vice President General Manager of the Finance & Accounting Division April 27, 2005 - -------------------------------------------------------------------------------- [LOGO OF RICOH] FLASH REPORT Year ended March 31, 2005 (Results for the Period from April 1, 2004 to March 31, 2005) Three months ended March 31, 2005 (Results for the Period from January 1, 2005 to March 31, 2005) PERFORMANCE OUTLINE (CONSOLIDATED) (1) Year ended March 31, 2005, 2004 and Year ending March 31, 2006 (Forecast)
(Billions of yen) - ------------------------------------------------------------------------- ------------------------- Year ended Year ended Year ending March 31, 2005 March 31, 2004 Change March 31, 2006 Change (Results) (Results) (Forecast) - ------------------------------------------------------------------------- ------------------------- Domestic sales 972.9 914.0 6.4% 1,018.5 4.7% Overseas sales 841.1 866.1 -2.9% 881.5 4.8% Net sales 1,814.1 1,780.2 1.9% 1,900.0 4.7% Gross profit 754.5 765.6 -1.4% 815.0 8.0% Operating income 135.5 150.0 -9.7% 165.0 21.8% Income before income taxes 135.3 143.0 -5.4% 161.0 18.9% Net income 83.1 91.7 -9.4% 97.0 16.7% - ------------------------------------------------------------------------- ------------------------- Exchange rate (Yen/US$) 107.58 113.09 -5.51 105.00 -2.58 Exchange rate (Yen/EURO) 135.25 132.65 2.60 130.00 -5.25 - ------------------------------------------------------------------------- ------------------------- Net income per share (yen) 112.64 123.63 -10.99 132.14 19.50 - ------------------------------------------------------------------------- ------------------------- Return on equity (%) 10.0 12.6 -2.6 - - Income before income taxes on total assets (%) 7.1 7.7 -0.6 - - Income before income taxes on net sales (%) 7.5 8.0 -0.5 8.5 1.0 - ------------------------------------------------------------------------- ------------------------- Total assets 1,953.6 1,852.7 100.8 - - Shareholders' equity 862.9 795.1 67.8 - - Interest-bearing debt 410.0 432.7 -22.6 - - - ------------------------------------------------------------------------- ------------------------- Equity ratio (%) 44.2 42.9 1.3 - - - ------------------------------------------------------------------------- ------------------------- Shareholders' equity per share (yen) 1,175.67 1,076.11 99.56 - - - ------------------------------------------------------------------------- ------------------------- Cash flows from operating activities 132.7 154.9 -22.1 - - Cash flows from investing activities -96.1 -63.3 -32.8 - - Cash flows from financing activities -56.4 -74.8 18.3 - - Cash and cash equivalents at end of period 186.8 203.0 -16.1 - - - ------------------------------------------------------------------------- ------------------------- Capital expenditures 84.7 75.5 9.1 114.0 29.2 Depreciation for tangible fixed assets 66.7 67.6 -0.8 67.5 0.7 R&D expenditures 110.4 92.5 17.9 120.0 9.5 - ------------------------------------------------------------------------- ------------------------- Number of employees (Japan) (thousand people) 40.1 38.8 1.3 - - Number of employees (Overseas) (thousand people) 35.0 34.4 0.6 - - - ------------------------------------------------------------------------- ------------------------
RICOH COMPANY, LTD. * The Company bases the forecast estimates for March 31, 2006 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, 2005 and 2004
(Billions of yen) - ------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2005 March 31, 2004 Change - ------------------------------------------------------------------------------------------- Domestic sales 272.4 252.5 7.9% Overseas sales 221.8 218.7 1.4% Net sales 494.3 471.2 4.9% Gross profit 198.5 191.7 3.6% Operating income 39.0 36.5 6.8% Income before income taxes 40.6 38.3 5.9% Net income 25.0 29.8 -15.9% - ------------------------------------------------------------------------------------------- Exchange rate (Yen/US$) 104.60 107.31 -2.71 Exchange rate (Yen/EURO) 137.26 134.10 3.16 - ------------------------------------------------------------------------------------------- Net income per share (yen) 34.08 40.31 -6.23 - ------------------------------------------------------------------------------------------- Return on equity (%) 2.9 4.0 -1.1 Income before income taxes on total assets (%) 2.1 2.0 0.1 Income before income taxes on net sales (%) 8.2 8.1 0.1 - ------------------------------------------------------------------------------------------- Capital expenditures 25.9 23.6 2.3 Depreciation for tangible fixed assets 18.7 18.2 0.4 R&D expenditures 30.8 24.0 6.8 - -------------------------------------------------------------------------------------------
(3) Three months ending June 30, 2005 (Forecast) and Three months ended June 30, 2004
(Billions of yen) - ------------------------------------------------------------------------------------------- Three months ending Three months ended June 30, 2005 June 30, 2004 Change (Forecast) (Results) - ------------------------------------------------------------------------------------------- Domestic sales 248.2 233.3 6.4% Overseas sales 212.8 203.2 4.7% Net sales 461.0 436.5 5.6% Gross profit 198.0 189.1 4.7% Operating income 41.0 39.3 4.1% Income before income taxes 40.0 41.3 -3.2% Net income 25.0 24.8 0.4% - ------------------------------------------------------------------------------------------- Exchange rate (Yen/US$) 105.00 109.65 -4.65 Exchange rate (Yen/EURO) 130.00 132.17 -2.17 - ------------------------------------------------------------------------------------------- Capital expenditures 31.5 18.6 12.8 Depreciation for tangible fixed assets 16.0 15.9 0.0 R&D expenditures 30.0 24.3 5.6 - -------------------------------------------------------------------------------------------
(4) Half year ending September 30, 2005 (Forecast) and Half year ended September 30, 2004
(Billions of yen) - ------------------------------------------------------------------------------------------- Half year ending Half year ended September 30, 2005 September 30, 2004 Change (Forecast) (Results) - ------------------------------------------------------------------------------------------- Domestic sales 499.5 469.1 6.5% Overseas sales 424.5 406.8 4.3% Net sales 924.0 876.0 5.5% Gross profit 396.0 363.8 8.8% Operating income 79.5 57.7 37.6% Income before income taxes 77.0 60.0 28.2% Net income 47.0 35.8 31.2% - ------------------------------------------------------------------------------------------- Exchange rate (Yen/US$) 105.00 109.83 -4.83 Exchange rate (Yen/EURO) 130.00 133.31 -3.31 - ------------------------------------------------------------------------------------------- Capital expenditures 58.5 38.2 20.2 Depreciation for tangible fixed assets 32.0 31.0 0.9 R&D expenditures 60.0 53.4 6.5 - -------------------------------------------------------------------------------------------
2 RICOH COMPANY, LTD. AND CONSOLIDATED SUBSIDIARIES FLASH REPORT (CONSOLIDATED PERFORMANCE FOR THE YEAR ENDED MARCH 31, 2005) DATE OF APPROVAL FOR THE FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 31, 2005, AT THE BOARD OF DIRECTORS' MEETING: APRIL 27, 2005 1. RESULTS FOR THE PERIOD FROM APRIL 1, 2004 TO MARCH 31, 2005 (1) Operating Results (Millions of yen) - ------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 - ------------------------------------------------------------------------------- Net sales 1,814,108 1,780,245 (% change from the previous fiscal year) 1.9 2.4 Operating income 135,506 150,006 (% change from the previous fiscal year) -9.7 12.2 Income before income taxes 135,383 143,063 (% change from the previous fiscal year) -5.4 15.9 Net income 83,143 91,766 (% change from the previous fiscal year) -9.4 26.6 Net income per share-basic (yen) 112.64 123.63 Net income per share-diluted (yen) - - - ------------------------------------------------------------------------------- Notes: i. Equity in income of affiliates: Yen 3,120 million (Yen 2,065 million in previous fiscal year) ii. No change in accounting method have been made. iii. Average number of shares outstanding (consolidated): 738,160,042 shares (742,292,806 shares in previous fiscal year) iv. Net income per share is calculated as required by SFAS No. 128. (2) Financial Position (Millions of yen) - ------------------------------------------------------------------------------- March 31, 2005 March 31, 2004 - ------------------------------------------------------------------------------- Total assets 1,953,669 1,852,793 Shareholders' equity 862,998 795,131 Equity ratio (%) 44.2 42.9 Equity per share (yen) 1,175.67 1,076.11 - ------------------------------------------------------------------------------- Note: Number of shares outstanding as of March 31, 2005: 734,045,879 shares (738,894,891 shares as of March 31, 2004) (3) Cash Flows (Millions of yen) - ------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 - ------------------------------------------------------------------------------- Cash flows from operating activities 132,780 154,911 Cash flows from investing activities -96,198 -63,383 Cash flows from financing activities -56,439 -74,835 Cash and cash equivalents at end of period 186,857 203,039 - ------------------------------------------------------------------------------- (4) Items relating to the scale of consolidation and the application of the equity method: Number of consolidated subsidiaries: 285; nonconsolidated subsidiaries: 40; affiliated companies: 22 (5) Changes relating to the scale of consolidation and the application of the equity method: Consolidated subsidiaries: 15 additions; 51 removals Companies accounted for by the equity method: 6 additions; 4 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, 2005 TO MARCH 31, 2006 (Millions of yen) - -------------------------------------------------------------------------------- Half year ending Year ending September 30, 2005 March 31, 2006 - -------------------------------------------------------------------------------- Net sales 924,000 1,900,000 Operating income 79,500 165,000 Income before income taxes 77,000 161,000 Net income 47,000 97,000 - -------------------------------------------------------------------------------- Note: Net income per share (Consolidated) 132.14 yen In accordance with Japanese regulations, Ricoh has issued forecast for its financial results for the fiscal year ending March 31, 2006. 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 325 subsidiaries and 22 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 support and service including IT environment setup and network administration. [Main Subsidiaries and Affiliates] Production Japan...Tohoku Ricoh Co., Ltd., Ricoh Elemex Corporation, Ricoh Unitechno Co., Ltd., Hasama Ricoh Inc., Ricoh Microelectronics Co., Ltd., Ricoh Keiki Co., Ltd., and Ricoh Printing Systems, Ltd. The Americas...Ricoh Electronics, Inc. Europe...Ricoh UK Products Ltd., Ricoh Industrie France S.A.S. Other regions...Ricoh Asia Industry (Shenzhen) Ltd., Shanghai Ricoh Facsimile Co., Ltd., and Sindo Ricoh Co., Ltd. (affiliated company) Sales and Service Japan...Ricoh Tohoku Co., Ltd., Ricoh Sales Co., Ltd., Ricoh Chubu Co., Ltd., Ricoh Kansai Co., Ltd., Ricoh Chugoku Co., Ltd., Ricoh Kyushu Co., Ltd., and 33 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 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. (2) Mid- to Long-term Business 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 (i.e., Input/Output), 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 from April 2002 to March 2005 thus focused 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 progress made with this basic strategy during the 14th medium-term management plan period and the term under review is described below To encourage customers to make the transition to color models, we have launched a series of multifunction color models and color laser printers to augment our product line. The term under review was no exception, as we introduced the imagio Neo C600 series, a multifunction color model that boasts high-speed color copy and print performance of 45 sheets per minute, and the imagio Neo C455 series, a multifunction color model that offers even better image quality, thanks to the color PxP toner that employs Ricoh's unique polymerized technology. These measures have boosted the Ricoh Group's market share in such principal color copier markets as Japan, the United States of America, and Europe. In the same token, the IPSiO G series, a Gel-Jet printer that we introduced last year to target the demand to replace other manufacturers' monochrome laser printers and ink jet printers in the low-end business printer market, has been widely acclaimed as a business printer that provides high-speed output, high-quality page printing, and low running cost. As a result of our effort to expand sales of high-speed models, our high-speed digital multifunction models have won wide acclaim in both domestic and overseas markets, thus solidifying our positions in those markets. We have also provided since last year a high-speed digital multifunction model that satisfies customers' contemporary needs for security and environmental protection. During the term under review, too, we launched the imagio Neo 753/603 series, a high-speed digital multipurpose model that is equipped with the world's first unauthorized copy guard feature and achieves the highest energy efficiency in its class with QSU, Ricoh's unique energy conservation technology. As for Printing Solutions, we have offered the optimal solutions for minimizing total expenses by combining copier and printer functions, and developed a global support and service network. As a result, we have steadily increased business with customers who have operations around the world. During the term under review, we launched @Remote, a remote management service that constantly monitors the condition and use of output equipment via the Internet. This service reduces the operation and management burden of the IT environment in the office, and helps reduce TCO (total cost of ownership) and improve operation efficiency. The service is provided as a facet of Ricoh's total support service around the world. As the acquisition of stock in Hitachi Printing Solutions, Ltd. was completed on October 1, 2004, the company has become a member of the Ricoh Group as Ricoh Printing Systems, Ltd.. We expect the synergy between the high-speed, reliable technology and system technology developed by the company and the various printer and copier technologies pioneered by the Ricoh Group to help us strengthen a broad spectrum of the product line, from core operating system to office applications, and further expand the printing business. 5 (3) Basic Approach and Policies for Corporate Governance The Ricoh Group is committed to corporate governance by ensuring the transparency of management and improving competitiveness based on the spirit of corporate ethics and compliance. i. Status of corporate governance We employ a statutory auditor system. Combined with a more effective board of directors and an executive officer system, the auditor system reinforces the supervision of management and supports managerial activities. The board of directors is composed of fourteen directors, of which one is an outside director. The board of directors makes important decisions concerning the supervision of management and management of the group. Under the executive officer system, the executive function is delegated to each division to clarify roles. As a sub-organization to the board of directors, an all-company executive committee is composed of the Chief Executive Officer and other executive officers who meet certain qualifications. This committee takes such business actions as supervising the divisions and preparing the optimal strategy for the entire group, within the scope of authority delegated by the board of directors. Five internal auditors, including two outside auditors, perform strict audits by attending the board of directors meetings and management meetings, receiving reports on business from the directors, reviewing important resolution documents, and investigating the status of operations and assets. Corporate Audit Office, which is the Ricoh Group's internal auditing unit, performs fair and objective examination and evaluation of how each division is executing its business based on rational criteria, and provides advice and recommendations for improvement. As for external auditing, in light of the call for greater independence of auditing corporations, we have established regulations concerning the polices and procedures for prior approval for auditing and non-auditing duties, and have implemented the board of auditors' prior approval system for details and contract amounts of auditing contracts. Furthermore, to further reinforce the internal control of the Ricoh Group, we have formed Internal Management & Control Office. To maintain the status of the Ricoh Group as a global company with high corporate values, the section cooperates with other units and principal group companies to revamp internal control mechanisms across the group, provide education, and improve business processes to comply with relevant laws, regulations, and standards, to improve the effectiveness and efficiency of operations, and to maintain the integrity of financial reports. We have established Ricoh Group corporate social responsibility (CSR) charter and Ricoh Group codes of conduct to ensure that every employee in the group understands and abides by the laws of each country, international rules, and the spirit of these rules, and acts in good common sense with responsibility. For corporate disclosure, we have established internal rules that set forth the process from the collection to preparation, reporting, and disclosure of information. The disclosure committee was formed to manage the process, and to ensure the accuracy, timeliness, and completeness of the disclosure. ii. Outline of personal relationships, capital relationships, transactions, and other interests between the company, company's outside directors, and outside auditors There exists no special interest between the one outside director, two outside auditors, and the company. iii. Progress in improving the company's corporate governance during the most recent one-year period The Ricoh Group issued the Social Responsibility Management Report, which informs the public on our policies, organization, corporate activity principles, and status of corporate social responsibility. Combined with the business management report and annual report that we have published, it completes our ability to disclose information as a sustainability report that covers all three aspects (environment, economy, and society) of the Ricoh Group's operations. As a facet of reinforcing the board of directors' ability to supervise management, we have decided to form a nomination and compensation committee, a permanent committee unique to the Ricoh Group, within the board of directors during fiscal year 2006. The nomination and compensation committee will be led by outside directors, and will propose and decide on appointment and discharge systems and compensation system for directors and executive officers. The new committee will be anticipated to give a boost to the board of directors' ability to supervise the all-company executive committee. 6 (4) Challenges As customer needs have become increasingly diverse, they would be no longer satisfied with merely purchasing products or services. The competition has also become increasingly severe in the replacement of monochrome models with color models and providing business solutions. Although such major changes in the market environment may seem like a formidable obstacle, the Ricoh Group sees them as an ideal opportunity for expanding the earnings foundation. This is because we have sufficient ability and strength to meet such changes. By defining target areas, further adding to the abilities and strengths, and striving to create new values for customers, we will provide products and services that satisfy customer needs ahead of the competition, and achieve growth and development. Based on this concept, under the 15th medium-term management plan, which has been in effect since April 2005, we designated printing, emerging markets, and industrial area as the three target areas for growth. In order for the Ricoh Group to achieve growth and development with a focus on these growth areas, it is essential that we boost our corporate competitiveness by creating new values for customers and improving managerial efficiency. To create new values for customers, we will reinforce our CS (customer satisfaction) management, through which we will aggressively cultivate new values, with an emphasis on the three customer values (simplify creativity, user-friendly, and earth-friendly). In essence, we will support customers' creativity activities, create an environment for creativity, further improve the user-friendliness of products and services so customers can take full advantage of the benefits, and provide products and services that help customers to protect the global environment. We will also continue to refine our technology to materialize the new values as products and services. Our effort will also continue in improving the efficiency of management to enhance our profitability. Structural reform will streamline operational processes and improve the earnings from each project. Furthermore, we will more carefully select projects and concentrate resources to the selected projects to improve managerial efficiency. The profit generated from such activities will be aggressively allocated to investments in growth areas and technologies to further increase profits and raise corporate value. (5) Dividend Policy Ricoh endeavors to ensure that policies are regularly updated to take the dividend payout ratio into consideration in the payment of dividends, while at the same time increasing retained earnings for the enhancement of corporate structure and the new business generation. Furthermore, these retained earnings will be used both in the reinforcement of core businesses and for investment in new fields with both medium-term and long-term perspectives. (6) Concept and Policy of Reducing the Trading Unit 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 year 2005 (extending from April 1, 2004 to March 31, 2005), the Ricoh Group recorded consolidated net sales of Yen 1,814.1 billion, or up 1.9% from the previous fiscal year. This marks the eleventh consecutive fiscal year of year-on-year revenue growth. During the term under review, the average exchange rates of the yen against the U.S. dollar and the euro were Yen 107.58 (up Yen 5.51) and Yen 135.25 (down Yen 2.60), respectively. Excluding the effects of these foreign exchange rate fluctuations, consolidated net sales increased 2.4% from the previous fiscal year. In terms of domestic market, sales increased for printing systems such as MFPs (multifunction printers) and laser printers. Ricoh Printing Systems, Ltd., our newly acquired printer company, contributed to the sales increase. Our solutions business such as customer support and service also delivered favorable performance. As a result, overall sales of office equipment increased 5.0% from the previous corresponding period. While other businesses suffered from sluggish demand for semiconductors and lower demand period for measuring equipment, such businesses as optical equipment and leasing maintained strength. Consequently, overall domestic sales increased 6.4% to Yen 972.9 billion. Domestic sales accounted for 53.6% of consolidated net sales, or up 2.3 percentage points. In terms of overseas, sales decreased in the Americas due to the yen's appreciation against the U.S. dollar. In Europe, on the other hand, sales kept strong gains. In other areas, sales decreased as we sold consolidated subsidiaries in optical-related analog businesses. By product category, sales proceeds from our core products (color PPCs and printing systems) increased to compensate for part of the sales declines in standalone analog equipment and optical discs. Due to the aforementioned sale of businesses and the relative yen's appreciation, overseas sales decreased 2.9% from the previous corresponding period to Yen 841.1 billion. Excluding the effects of foreign exchange rate fluctuations, overseas sales increased 1.9%. Overseas sales accounted for 46.4% of consolidated net sales, or down 2.3 percentage points. Gross profit decreased 1.4% from the previous corresponding period to Yen 754.5 billion. Although sales increased in such high-margin, high value added products as MFPs and laser printers and the ongoing cost-cutting efforts contributed to gross profit, the sales promotion of color models in the first half of the term under review, downsizing of the optical disc business, the aforementioned sale of businesses, and the yen's appreciation had a negative effect on gross profit. In terms of selling, general and administrative expenses, R&D expenses was Yen 110.4 billion, up 19.4% from the previous corresponding period. The strategic expenses in product and marketing activities for a "growth strategy" under the 15th medium-term management plan from next fiscal year and IT investment for developing core operating systems increased. Consequently, selling, general and administrative expenses increased 0.6% to Yen 619.0 billion. As a result of these activities, operating income decreased 9.7% from the previous corresponding period to Yen 135.5 billion. In terms of other (income) expenses, interest and dividend income increased. On the other hand, the company reduced interest-bearing liabilities and interest costs by effective management of financing between group companies. Furthermore, although the company recorded a loss from foreign exchange in the previous fiscal year, it enjoyed a gain from foreign exchange during the term under review. As a result, income before income taxes decreased 5.4% to Yen 135.3 billion. The effective tax rate decreased as a result of greater tax deductions for research and development and IT investment and improved overall profitability of consolidated subsidiaries. The effect of improved profitability of consolidated companies is reflected in the minority interests in earnings. In the previous corresponding period, the cumulative effect (Yen 7.3 billion gain) of change in accounting for marketable securities transferred to a pension trust was reflected in the income statement in connection with gain recognition for additional contribution to the employee pension trust. As a result of these activities, net income decreased 9.4% from the previous corresponding period to Yen 83.1 billion. With regard to the state of business segment, Office Equipment benefited from the increase in sales for printing systems and the effort to reduce costs such as those associated with SCM (supply chain management) activities. On the other hand, advance investment for the future business improvement and the downsizing of the optical disc business caused a decrease in net income of Office Equipment from the previous corresponding period. In other businesses, the strength of leasing compensated for the decline in performance of measuring equipment in the sluggish period and semiconductor suffering from a lack of demand. Due to the aforementioned sale of businesses, however, both sales and operating income took a setback compared to the previous corresponding period. With regard to the state of geographic segment, greater sales of the core strategic products mentioned above and high operating ratios in production resulted in higher operating income in Europe and Other. Operating income decreased in Japan and the United States, where strategic investments were made for future activities. In terms of capital, ending balance of total assets increased Yen 100.8 billion to Yen 1,953.6 billion as a result of the consolidation of Ricoh Printing Systems, Ltd. and an increase in operating assets from the sales growth. Interest-bearing liabilities have been reduced by reinforcing regional cash management in Japan, the Americas, and Europe. The ending balance of stockholders' equity increased Yen 67.8 billion to Yen 862.9 billion. Equity ratio went increased 1.3 percentage points from the end of the previous corresponding period to 44.2%. Year-end cash dividend are proposed Yen 10.00 per share, and when combined with the interim dividend of Yen 10.00, total dividend for the current fiscal year 2005 will be Yen 20.00. [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 2.2% to Yen 1,591.8 billion) - ------------------------------------------------- Seeing further advancements in digital networks and increasing volume of information that is processed electronically and in color, customers more than ever desire to improve and reform their operations. In an effort to help these customers manage TDV (total document volume) more efficiently and effectively, the Ricoh Group has continued to offer solutions to optimize total printing costs of customers. As a strategy to help the customers, we have advanced the compatibility of standalone analog equipment to digitalization, networking, color technology, and higher output speed. As a result, sales, particularly those of such printing systems as MFPs and laser printers, have soared. Continuing sales gains were also seen in solutions business, including customer support and service. Severe market competition, decrease sales of optical discs, and the yen's appreciation against the U.S. dollar proved to be a challenge for the Ricoh Group. Nevertheless, the development and expansion of strategies for our core products proved effective, and sales increased in both domestic and overseas markets. Accordingly, sales of Office Equipment increased 2.2% from the previous corresponding period to Yen 1,591.8 billion. Imaging Solutions (down 11.0% to Yen 715.0 billion) --------------------------------------------------- In terms of Digital Imaging Systems, the company strengthened its lineup from standard models to high-speed digital models. The company offered a series of new color PPC products that increased its sales particularly overseas. Due to the demand shift to printing systems, however, sales of digital imaging as a whole decreased 7.8% from the previous corresponding period. In terns of Other Imaging Systems, a transition is being advanced from analog to digital or MFPs models. Sales of other imaging systems, as a result, decreased 20.9%. The performance of Imaging Solutions reflects the Ricoh Group's strategy as overall sales decreased 11.0% from the previous corresponding period to Yen 715.0 billion. Sales of this category accounted for 39.4%, down 5.7 percentage points, of net consolidated sales. Network Input/Output Systems (up 20.2% to Yen 670.8 billion) ------------------------------------------------------------ In terms of Printing Systems, the company offered new products that present higher speed, networking, and color technology to increase sales of printing equipment that matches to customer needs. Such domestic MFPs models as imagio Neo 752/602 series and color MFPs models as imagio C245 and imagio NEO C385 and such overseas MFPs models as Aficio 2035/2045 series and color MFPs models as Aficio 2232C/2238C series have won wide acclaim from customers. Laser printers, both monochrome and color models, have increased sales both in Japan and overseas. Ricoh Printing Systems, Ltd., a new subsidiary of the Ricoh Group, has contributed to the sales growth. The company have also seen continuing increase in sales of the Gel-Jet printer, a low-priced color printer for office use. As a result, sales of Printing Systems as a whole increase 28.7% from the previous corresponding period. As for Other I/O Systems, the company streamlined the optical disc business by reorganizing key modules such as in-house developed drives and part units, other than media. As a result, sales of Other I/O Systems declined 68.4% from the previous corresponding period. As a key target of these strategies, sales of Network I/O Systems, as a whole, increased 20.2% from the previous corresponding period to Yen 670.8 billion. Sales of this category accounted for 37.0%, up 5.6 pecentage points, of net consolidated sales. Network System Solutions (up 5.1% to Yen 205.8 billion) ------------------------------------------------------- Sales have continued to increase, both in Japan and overseas, for solutions business, including support and service, as customers have embraced proposals to optimize their total printing costs. The demand for PC servers has begun to recover in Japan. As a result, sales of this category increased 5.1% from the previous fiscal year to Yen 205.8 billion. Other Businesses (down 0.1% to Yen 222.2 billion) ------------------------------------------------- In Japan, while the performance of measuring equipment in the sluggish period and semiconductor suffering from a lack of demand declined, optical equipment and leasing continued to prosper. Overseas, sales decreased as a result of selling subsidiaries in optical-related businesses. As a result, sales of this category decreased 0.1% from the previous corresponding period to Yen 222.2 billion. [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 6.4% to Yen 972.9 billion) - ----------------------------------- While the Japanese economy has been encouraged by signs of recovery in the stock market, capital investment, and corporate performance, high raw material and crude oil prices are a cause for concern. In addition, the domestic market remains under severe competition. Against such a backdrop, Office Equipment has promoted product and sales strategies that meet customer needs. As a result, sales of Printing Systems such as MFPs and laser printers, and solutions business, including support and service, have posted solid sales gains. The sales increase has compensated for the sales decrease in analog equipment, where the company is advancing the transition to MFPs and color models. In Other Businesses, while sales of measuring equipment and semiconductors decreased due to sluggish demand, such businesses as leasing have maintained momentum. As a result, domestic sales increased 6.4% from the previous corresponding period to Yen 972.9 billion. Domestic sales accounted for 53.6%, up 2.3 percentage points, of net consolidated sales. The Americas (down 0.2% to Yen 325.5 billion) - --------------------------------------------- The economies of the Americas remained robust. Amidst the severe competition, we focused on increasing color PPC sales and on printing systems that cater to the customer needs for networking, color technology, and higher output speed through our revamped and reinforced sales network. We also made an effort to boost sales to major accounts. Due to the appreciation of the yen against the U.S. dollar, however, sales in the Americas as a whole fell 0.2% from the previous corresponding period to Yen 325.5 billion. Excluding the effect of the yen's appreciation against the U.S. dollar, sales in the Americas as a whole increased 4.8%. Europe (up 1.6% to Yen 408.9 billion) - ------------------------------------- The European economy has become relatively stable. Sales of color PPCs and printing systems have increased, and the Ricoh Group has maintained its market share lead in photocopiers market. Although sales of optical discs, from which are focusing to media business, decreased, due partly to the yen's depreciation against the euro, sales in Europe as a whole increased 1.6% from the previous corresponding period to Yen 408.9 billion. Other (down 22.4% to Yen 106.6 billion) - --------------------------------------- The demand shift to color and MFPs in office equipment has picked up momentum in China, Asia and other areas. As a result, sales of color PPCs and printing systems have increased from the previous corresponding period. Due to the downsizing of the optical disc business, the sluggish demand for semiconductors and the aforementioned sale of optical-related analog consolidated subsidiaries, however, sales in Other area decreased. Sales of the others decreased 22.4% to Yen 106.6 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 category of Imaging Solutions and Printing Systems, the Ricoh Group has continued to enhance its product lines, including color models, standard models to high-speed digital models, by offering a series of new products that caters to customer needs. As a result, sales of MFPs and laser printers, in particular, made substantial gains. Meanwhile, solutions business, including support and service, has steadily increased its sales as customers have embraced solutions to optimize their total printing costs. While severe market competition, decreasing optical disc sales, and the yen's appreciation against the U.S. dollar have dampened business, the success of strategies for core products has increased its sales both in Japan and overseas. As a result, sales of office equipments as a whole increased 2.2% from the previous corresponding period to Yen 1,591.8 billion. Operating expenses have been brought under control by increasing sales of Printing Systems and promoting such cost-cutting activities as SCM (supply chain management). On the other hand, the company spent strategic advance expenses for the future with products and marketing activities, IT investments to core operating systems and for the downsizing of the optical disc business. Combined with the yen's appreciation, operating income decreased 6.2% from the previous corresponding period to Yen 191.7 billion. Capital investment was allocated primarily to reinforcing production lines for new products and to research and development. As for total assets, operating assets increased as a result of consolidating Ricoh Printing Systems, Ltd., a new printer company that the company purchased in October 2004, and increase of operating assets due to sales growth. Other Businesses - ---------------- In Japan, measuring equipment struggles with lower period and semiconductor suffered from sluggish demand. On the other hand, such businesses as optical equipment and leasing performed favorably. Overseas, sales decreased as a result of selling optical-related analog businesses in the previous fiscal year. As a result, sales of other businesses decreased 0.1% from the previous corresponding period to Yen 224.7 billion. Operating profit was accounted for Yen 0.5 billion.
(Billions of yen) - -------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 Change (%) - -------------------------------------------------------------------------------------------- Office Equipment: Net sales 1,591.8 1,557.6 2.2 Operating income 191.7 204.3 -6.2 Operating income on sales(%) 12.0 13.1 -1.1 Identifiable assets 1,391.4 1,220.7 14.0 Capital expenditures 72.9 65.3 11.6 Depreciation 57.0 57.9 -1.6 - -------------------------------------------------------------------------------------------- Other Businesses: Net sales 224.7 225.0 -0.1 Operating income 0.5 4.6 -88.4 Operating income on sales(%) 0.2 2.1 -1.8 Identifiable assets 164.3 182.5 -10.0 Capital expenditures 9.6 8.7 11.1 Depreciation 6.5 7.7 -16.3 - --------------------------------------------------------------------------------------------
11 Geographic Segment - ------------------ Japan - ----- Amidst the severe competition in the office equipment market, Printing Systems and solutions business have deployed aggressive sales strategies and, as a result, has increased sales in Japan and increased exports to overseas markets. As a result, sales of the Japan segment increased 5.6% from the previous corresponding period to Yen 1,386.7 billion. The effect of the increased sales was amplified by the transition to high value added products and the implementation of such cost cutting measures as SCM (supply chain management). On the other hand, the company increased research and development expenses for the future and spent strategic expenses on aggressive sales activities for the domestic market. Furthermore, the sales decrease of optical discs and the sluggish demand for measuring equipment and semiconductors have decreased operating income by 9.5% from the previous corresponding period to Yen 88.0 billion. The Americas - ------------ Amidst the severe competition in both direct and indirect sales channels, the company increased sales of Printing Systems through the sales channels that we have improved and reinforced over the years, and deployed a strategy of stepping up sales to major accounts. The effort has been rewarded with greater sales of color PPCs, MFPs and laser printers. Sales in the Americas segment increased 3.0% from the previous corresponding period to Yen 330.4 billion. Operating income decreased 10.7% to Yen 13.8 billion as a result of intensifying competition, IT investment for core operating system development, and the yen's appreciation. Europe - ------ Every country and company in Europe saw sales rise, particularly for printing systems. The Ricoh group continues to hold the top share in the photocopier market in Europe. On the other hand, sales of optical discs have decreased. As a result, sales in the Europe segment increased 2.8% from the previous corresponding period to Yen 415.6 billion. Operating income increased 10.6% to Yen 24.3 billion due to increased sales, brining production to appropriate locations closer to consumers, and the yen's depreciation against the euro. Other - ----- The accelerated demand shift of office equipment to MFPs and color technology in China, the rest of Asia, and Oceania has boosted sales of office equipments. The sale of the optical-related analog consolidated subsidiaries has, however, greatly reduced sales. As a result, sales in the Other segment decreased 10.0% to Yen 173.9 billion. As a result of maintaining high operating ratio in production to accommodate the need for increased supply around the world, operating income increased 13.7% to Yen 11.9 billion. [Graph 4] Geographic segment information The graphs are omitted. The data in the omitted graphs can be shown at the schedule 4. [GRAPHS APPEARS HERE] 12 *Financial Position (1) Assets, Liabilities, and Shareholders' Equity at Year-End (Billions of yen) - -------------------------------------------------------------------------------- March 31, 2005 March 31, 2004 Change - -------------------------------------------------------------------------------- Total Assets 1,953.6 1,852.7 100.8 Shareholders' Equity 862.9 795.1 67.8 Equity Ratio 44.2% 42.9% 1.3% - -------------------------------------------------------------------------------- Total assets have increased considerably due primarily to an increase in operating assets due to sales growth and the consolidation of Ricoh Printing Systems, Ltd., which was acquired in October 2004. In Assets, part of the Yen 15.6 billion decrease in cash and time deposits from the end of the previous period (balance of Yen 188.3 billion) and the Yen 44.9 billion decrease in marketable securities was appropriated to the aforementioned acquisition. Trade receivables increased, primarily in Japan, Yen 44.2 billion to Yen 620.5 billion and inventories increased Yen 21.9 billion to Yen 167.3 billion. Fixed assets increased Yen 8.6 billion to Yen 247.4 billion, while finance receivables increased Yen 32.0 billion to Yen 391.9 billion, due to increase of sales. Other investments increased Yen 56.3 billion to Yen 284.5 billion as a result of recognizing goodwill and intangible fixed assets accompanying the aforementioned acquisition. Consequently, total assets increased Yen 100.8 billion to Yen 1,953.6 billion. As for Liabilities, domestic and overseas trade payables increased Yen 38.8 billion to Yen 336.4 billion. Interest-bearing debt decreased Yen 22.6 billion to Yen 410.0 billion as a result of effective utilization of financial resource in the Ricoh Group. In addition, other current liabilities decreased Yen 7.0 billion to Yen 151.4 billion as a result of reducing bonuses and transfer to tax reserve. Retirement benefit obligations increased Yen 9.1 billion to Yen 92.6 billion. As a result, total liabilities decreased Yen 30.7 billion to Yen 1,039.5 billion. In Shareholders' Equity, there was no major change in common stock or additional paid-in capital. Retained earnings increased Yen 69.1 billion to Yen 584.5 billion. Accumulated other comprehensive income increased Yen 8.3 billion and treasury stock decreased Yen 9.5 billion. As a result, total shareholders' equity increased by Yen 67.8 billion to Yen 862.9 billion.
(2) Cash Flows (Billions of yen) - ------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 Change - ------------------------------------------------------------------------------------------------- Cash flows from operating activities 132.7 154.9 -22.1 Cash flows from investing activities -96.1 -63.3 -32.8 Cash flows from financing activities -56.4 -74.8 18.3 Cash and Cash Equivalents at end of period 186.8 203.0 -16.1 - -------------------------------------------------------------------------------------------------
Although net income and retirement benefit obligations increased, increase of trade receivables, inventories and lease receivable result in net cash provided by operating activities decreasing Yen 22.1 billion from the previous corresponding period to Yen 132.7 billion. Outgoing cash flow for investment activities increased Yen 32.8 billion from the end of the previous corresponding period to Yen 96.1 billion due to ongoing capital investment to reinforce production lines for new products and the purchase of a printer company. As a result of these activities, the free cash flow, which is the total of the cash flows from operating activities and investment activities, decreased Yen 55.0 billion from the previous corresponding period to Yen 36.5 billion of positive cash flow. Outgoing cash flow was incurred for reducing interest-bearing liabilities by encouraging financing between group companies, Yen 14.7 billion for payment of dividends, and Yen 10.6 billion for acquisition of treasury stock. As a result, the outgoing cash flow amounted to Yen 56.4 billion. As a result of the above, the ending balance of cash and cash equivalents decrease Yen 16.1 billion from the end of the previous corresponding period to Yen 186.8 billion.
(3) Cash Flow Indices - ---------------------------------------------------------------------------------------------------------------------------------- Year ended Year ended Year ended Year ended Year ended March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004 March 31, 2005 - ---------------------------------------------------------------------------------------------------------------------------------- Shareholders' equity / Total assets 32.7% 34.5% 34.9% 42.9% 44.2% Market capitalization / Total assets 92.2% 95.6% 73.0% 85.3% 69.1% Interest bearing debt / Operating cash flow 5.2 5.3 2.6 2.8 3.1 Operating cash flow / Interest expense 13.2 12.8 27.1 29.3 28.3 - ----------------------------------------------------------------------------------------------------------------------------------
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 flows is shown in consolidated statement of cash flow. Interest bearing debt equals all debt in consolidated balance sheets. 13 *Forecast for the entire fiscal year Economic projections and Ricoh Group's strategies for fiscal year 2006 - ---------------------------------------------------------------------- Although upturn is projected for Japanese stock market, capital investment, and corporate performance in fiscal year 2006 (extending from April 1, 2005 to March 31, 2006), a full-fledged economic recovery is expected to take more time. Overseas, while economies are expected to remain stable in the meanwhile, the futures of the European and American economies and political and economic uncertainties in such emerging areas as BRICs are a cause for concern. Against such a backdrop, the Ricoh Group has identified "Realization of TDV, thereby broadening our revenue and earning framework" (increase volume and improve value added per page) as the primary strategy under the 14th medium-term management plan. As key strategies, we have set "Replacing monochrome products with color models" "Increased sales of high-speed models" and "Provision of printing solutions" Actions that the company has already taken include the expansion of market share by continuously introducing new products, including multifunction color models and color laser printers, and the expansion of transactions with major accounts by providing a global customer service and support system as a facet of printing solutions. The company intends to reinforce the printer business with further contribution of Ricoh Printing Systems, Ltd. the newly acquired printer company, and continue to reinforce the printer business. As customers needs have become increasingly diverse, they would be no longer satisfied with merely purchasing products or services. The competition has also become increasingly severe in the replacement of monochrome models with color models and in providing business solutions. Although such major changes in the market environment may seem like a formidable obstacle, the Ricoh Group sees them as an ideal opportunity for expanding the earnings foundation. This is because the group has sufficient ability and strength to meet such changes. By exercising the ability to adapt to changing conditions, defining target areas, further adding to the abilities and strengths, and striving to create new values for customers, we will provide products and services that satisfy customer needs ahead of the competition. Based on this awareness, under the 15th medium-term management plan, that starts from fiscal year 2006, we designated printing, emerging markets, and industrial area as the three target areas for growth. In order for the Ricoh Group to achieve growth and development with a focus on these growth areas, it is essential that we boost our corporate competitiveness by creating new values for customers and improving managerial efficiency. Our effort will also continue in improving the management efficiency to enhance our profitability. Structural reform will streamline operational processes and improve the earnings from each project. Furthermore, we will more carefully select projects and concentrate resources to the selected projects to improve managerial efficiency. The profit generated from such activities will be aggressively allocated to investments in growth areas and technologies to further increase profits and raise corporate value. Our performance forecast for fiscal 2006 is as follows: Exchange Rate Assumptions for the full year ended March 31, 2006 US$ 1 = Yen 105.00 (Yen 107.58 in previous fiscal year) EURO 1 = Yen 130.00 (Yen 135.25 in previous fiscal year) (Billions of yen) - -------------------------------------------------------------------------------- Year ending Year ended March 31, 2006 March 31, 2005 (Forecast) (Results) Change - -------------------------------------------------------------------------------- Domestic sales 1,018.5 972.9 4.7% Overseas sales 881.5 841.1 4.8% Net sales 1,900.0 1,814.1 4.7% Gross profit 815.0 754.5 8.0% Operating income 165.0 135.5 21.8% Income before income taxes 161.0 135.3 18.9% Net income 97.0 83.1 16.7% - -------------------------------------------------------------------------------- * Ricoh bases the forecast estimates for the year ending March 31, 2006 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, 2005 and 2004) (Millions of yen) - --------------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2005 March 31, 2004 Change % - --------------------------------------------------------------------------------------------------------------------- Net sales 494,306 471,252 23,054 4.9 Cost of sales 295,712 279,512 16,200 5.8 Percentage of net sales (%) 59.8 59.3 Gross Profit 198,594 191,740 6,854 3.6 Percentage of net sales (%) 40.2 40.7 Selling, general and administrative expenses 159,555 155,203 4,352 2.8 Percentage of net sales (%) 32.3 32.9 Operating income 39,039 36,537 2,502 6.8 Percentage of net sales (%) 7.9 7.8 Other (income) expense Interest and dividend income 809 178 631 354.5 Percentage of net sales (%) 0.2 0.0 Interest expense 1,092 1,090 2 0.2 Percentage of net sales (%) 0.2 0.2 Other, net -1,902 -2,756 854 -31.0 Percentage of net sales (%) -0.3 -0.5 Income before income taxes, equity income and minority interests 40,658 38,381 2,277 5.9 Percentage of net sales (%) 8.2 8.1 Provision for income taxes 14,355 14,744 -389 -2.6 Percentage of net sales (%) 2.9 3.1 Minority interests in earnings of subsidiaries 1,358 1,334 24 1.8 Percentage of net sales (%) 0.2 0.2 Equity in earnings of affiliates 154 161 -7 -4.3 Percentage of net sales (%) 0.0 0.0 Income before cumulative effect of accounting changes 25,099 22,464 2,635 11.7 Percentage of net sales (%) 5.1 4.8 Cumulative effect of accounting change, net of tax - 7,373 -7,373 - Percentage of net sales (%) - 1.5 Net income 25,099 29,837 -4,738 -15.9 Percentage of net sales (%) 5.1 6.3 - --------------------------------------------------------------------------------------------------------------------- Reference : Exchange rate US$ 1 Yen 104.60 Yen 107.31 EURO 1 Yen 137.26 Yen 134.10
(Year ended March 31, 2005 and 2004) (Millions of yen) - --------------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 Change % - --------------------------------------------------------------------------------------------------------------------- Net sales 1,814,108 1,780,245 33,863 1.9 Cost of sales 1,059,531 1,014,619 44,912 4.4 Percentage of net sales (%) 58.4 57.0 Gross Profit 754,577 765,626 -11,049 -1.4 Percentage of net sales (%) 41.6 43.0 Selling, general and administrative expenses 619,071 615,620 3,451 0.6 Percentage of net sales (%) 34.1 34.6 Operating income 135,506 150,006 -14,500 -9.7 Percentage of net sales (%) 7.5 8.4 Other (income) expense Interest and dividend income 2,240 1,925 315 16.4 Percentage of net sales (%) 0.1 0.1 Interest expense 4,684 5,290 -606 -11.5 Percentage of net sales (%) 0.3 0.3 Other, net -2,321 3,578 -5,899 - Percentage of net sales (%) -0.2 0.2 Income before income taxes, equity income and minority interests 135,383 143,063 -7,680 -5.4 Percentage of net sales (%) 7.5 8.0 Provision for income taxes 50,634 56,641 -6,007 -10.6 Percentage of net sales (%) 2.8 3.2 Minority interests in earnings of subsidiaries 4,726 4,094 632 15.4 Percentage of net sales (%) 0.3 0.2 Equity in earnings of affiliates 3,120 2,065 1,055 51.1 Percentage of net sales (%) 0.2 0.1 Income before cumulative effect of accounting changes 83,143 84,393 -1,250 -1.5 Percentage of net sales (%) 4.6 4.7 Cumulative effect of accounting change, net of tax - 7,373 -7,373 - Percentage of net sales (%) - 0.5 Net income 83,143 91,766 -8,623 -9.4 Percentage of net sales (%) 4.6 5.2 - --------------------------------------------------------------------------------------------------------------------- Reference : Exchange rate US$ 1 Yen 107.58 Yen 113.09 EURO 1 Yen 135.25 Yen 132.65
15 2-1. CONSOLIDATED SALES BY PRODUCT CATEGORY
(Three months ended March 31, 2005 and 2004) (Millions of yen) - --------------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2005 March 31, 2004 Change % - --------------------------------------------------------------------------------------------------------------------- [Office Equipment] Imaging Solutions: Digital Imaging Systems 142,583 153,230 -10,647 -6.9 Percentage of net sales (%) 28.8 32.5 Other Imaging Systems 37,592 46,217 -8,625 -18.7 Percentage of net sales (%) 7.7 9.8 Total Imaging Solutions 180,175 199,447 -19,272 -9.7 Percentage of net sales (%) 36.5 42.3 - --------------------------------------------------------------------------------------------------------------------- Network Input/Output Systems: Printing Systems 184,704 151,191 33,513 22.2 Percentage of net sales (%) 37.4 32.1 Other Input/Output Systems 4,486 5,928 -1,442 -24.3 Percentage of net sales (%) 0.9 1.2 Total Network Input/Output Systems 189,190 157,119 32,071 20.4 Percentage of net sales (%) 38.3 33.3 - --------------------------------------------------------------------------------------------------------------------- Network System Solutions 63,326 56,967 6,359 11.2 Percentage of net sales (%) 12.7 12.2 - --------------------------------------------------------------------------------------------------------------------- Office Equipment Total 432,691 413,533 19,158 4.6 Percentage of net sales (%) 87.5 87.8 - --------------------------------------------------------------------------------------------------------------------- [Other Businesses] Other Businesses 61,615 57,719 3,896 6.7 Percentage of net sales (%) 12.5 12.2 - --------------------------------------------------------------------------------------------------------------------- Grand Total 494,306 471,252 23,054 4.9 Percentage of net sales (%) 100.0 100.0 - --------------------------------------------------------------------------------------------------------------------- Reference : Exchange rate US$ 1 Yen 104.60 Yen 107.31 EURO 1 Yen 137.26 Yen 134.10
(Year ended March 31, 2005 and 2004) (Millions of yen) - --------------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 Change % - --------------------------------------------------------------------------------------------------------------------- [Office Equipment] Imaging Solutions: Digital Imaging Systems 559,023 606,270 -47,247 -7.8 Percentage of net sales (%) 30.8 34.1 Other Imaging Systems 156,074 197,304 -41,230 -20.9 Percentage of net sales (%) 8.6 11.0 Total Imaging Solutions 715,097 803,574 -88,477 -11.0 Percentage of net sales (%) 39.4 45.1 - --------------------------------------------------------------------------------------------------------------------- Network Input/Output Systems: Printing Systems 655,328 509,212 146,116 28.7 Percentage of net sales (%) 36.1 28.6 Other Input/Output Systems 15,508 49,025 -33,517 -68.4 Percentage of net sales (%) 0.9 2.8 Total Network Input/Output Systems 670,836 558,237 112,599 20.2 Percentage of net sales (%) 37.0 31.4 - --------------------------------------------------------------------------------------------------------------------- Network System Solutions 205,895 195,822 10,073 5.1 Percentage of net sales (%) 11.3 11.0 - --------------------------------------------------------------------------------------------------------------------- Office Equipment Total 1,591,828 1,557,633 34,195 2.2 Percentage of net sales (%) 87.7 87.5 - --------------------------------------------------------------------------------------------------------------------- [Other Businesses] Other Businesses 222,280 222,612 -332 -0.1 Percentage of net sales (%) 12.3 12.5 - --------------------------------------------------------------------------------------------------------------------- Grand Total 1,814,108 1,780,245 33,863 1.9 Percentage of net sales (%) 100.0 100.0 - --------------------------------------------------------------------------------------------------------------------- Reference : Exchange rate US$ 1 Yen 107.58 Yen 113.09 EURO 1 Yen 135.25 Yen 132.65
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 16 2-2. CONSOLIDATED SALES BY GEOGRAPHIC AREA
(Three months ended March 31, 2005 and 2004) (Millions of yen) - --------------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2005 March 31, 2004 Change % - --------------------------------------------------------------------------------------------------------------------- [Domestic] 272,478 252,516 19,962 7.9 Percentage of net sales (%) 55.1 53.6 [Overseas] 221,828 218,736 3,092 1.4 Percentage of net sales (%) 44.9 46.4 The Americas 86,021 82,783 3,238 3.9 Percentage of net sales (%) 17.4 17.6 Europe 108,309 106,019 2,290 2.2 Percentage of net sales (%) 21.9 22.5 Other 27,498 29,934 -2,436 -8.1 Percentage of net sales (%) 5.6 6.3 Grand Total 494,306 471,252 23,054 4.9 Percentage of net sales (%) 100.0 100.0 - --------------------------------------------------------------------------------------------------------------------- Reference : Exchange rate US$ 1 Yen 104.60 Yen 107.31 EURO 1 Yen 137.26 Yen 134.10
(Year ended March 31, 2005 and 2004) (Millions of yen) - --------------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 Change % - --------------------------------------------------------------------------------------------------------------------- [Domestic] 972,975 914,060 58,915 6.4 Percentage of net sales (%) 53.6 51.3 [Overseas] 841,133 866,185 -25,052 -2.9 Percentage of net sales (%) 46.4 48.7 The Americas 325,597 326,380 -783 -0.2 Percentage of net sales (%) 17.9 18.3 Europe 408,906 402,392 6,514 1.6 Percentage of net sales (%) 22.5 22.6 Other 106,630 137,413 -30,783 -22.4 Percentage of net sales (%) 6.0 7.8 Grand Total 1,814,108 1,780,245 33,863 1.9 Percentage of net sales (%) 100.0 100.0 - --------------------------------------------------------------------------------------------------------------------- Reference : Exchange rate US$ 1 Yen 107.58 Yen 113.09 EURO 1 Yen 135.25 Yen 132.65
17 3. CONSOLIDATED BALANCE SHEETS
(March 31, 2005 and 2004) Assets (Millions of yen) - ----------------------------------------------------------------------------------------------------------------- March 31, 2005 March 31, 2004 Change - ----------------------------------------------------------------------------------------------------------------- Current Assets Cash and time deposits 188,311 204,001 -15,690 Trade receivables 620,568 576,366 44,202 Marketable securities 138 45,124 -44,986 Inventories 167,365 145,369 21,996 Other current assets 53,365 55,079 -1,714 Total Current Assets 1,029,747 1,025,939 3,808 Fixed Assets Tangible fixed assets 247,410 238,712 8,698 Finance receivable 391,947 359,925 32,022 Other Investments 284,565 228,217 56,348 Total Fixed Assets 923,922 826,854 97,068 - ----------------------------------------------------------------------------------------------------------------- Total Assets 1,953,669 1,852,793 100,876 - ----------------------------------------------------------------------------------------------------------------- Note: Contents of cash and time deposits: Cash and cash equivalents 186,857 203,039 Time deposits 1,454 962 Liabilities and Shareholders' Investment (Millions of yen) - ----------------------------------------------------------------------------------------------------------------- March 31, 2005 March 31, 2004 Change - ----------------------------------------------------------------------------------------------------------------- Current Liabilities Trade payables 336,499 297,672 38,827 Short-term borrowings 183,518 151,162 32,356 Other current liabilities 151,497 158,594 -7,097 Total Current Liabilities 671,514 607,428 64,086 Fixed Liabilities Long-term indebtedness 226,567 281,570 -55,003 Accrued pension and severance costs 92,672 83,492 9,180 Other fixed liabilities 48,767 36,295 12,472 Total Fixed Liabilities 368,006 401,357 -33,351 - ----------------------------------------------------------------------------------------------------------------- Total Liabilities 1,039,520 1,008,785 30,735 - ----------------------------------------------------------------------------------------------------------------- Minority Interest 51,151 48,877 2,274 - ----------------------------------------------------------------------------------------------------------------- Shareholders' Investment Common stock 135,364 135,364 - Additional paid-in capital 186,551 186,599 -48 Retained earnings 584,515 515,372 69,143 Accumulated other comprehensive income (loss) -21,963 -30,272 8,309 Treasury stock -21,469 -11,932 -9,537 Total Shareholders' Investment 862,998 795,131 67,867 - ----------------------------------------------------------------------------------------------------------------- Total Liabilities and Shareholders' Investment 1,953,669 1,852,793 100,876 - ----------------------------------------------------------------------------------------------------------------- Note: Other comprehensive income; Net unrealized holding gains on available-for-sale securities 4,791 4,026 765 Pension liability adjustments -14,652 -14,863 211 Net unrealized gains (losses) on derivative instruments 117 -24 141 Cumulative translation adjustments -12,219 -19,411 7,192 Reference: Exchange rate March 31, 2005 March 31, 2004 US$ 1 Yen 107.39 Yen 105.69 EURO 1 Yen 138.87 Yen 128.88
4. RETAINED EARNINGS
(Year ended March 31, 2005 and 2004) (Millions of yen) - ----------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 - ----------------------------------------------------------------------------------------------------------------- Retained earnings (beginning balance) 515,372 434,748 Adjustment for change of fiscal period on consolidated subsidiaries 777 - Net income 83,143 91,766 Cash dividends 14,777 11,142 Retained earnings (ending balance) 584,515 515,372 - -----------------------------------------------------------------------------------------------------------------
18 5. CONSOLIDATED STATEMENTS OF CASH FLOWS
(Year ended March 31, 2005 and 2004) (Millions of yen) - --------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 - --------------------------------------------------------------------------------------------------------------- I. Cash Flows from Operating Activities: 1. Net income 83,143 91,766 2. Adjustments to reconcile net income to net cash provided by operating activities-- Depreciation and amortization 78,201 76,968 Equity in earnings of affiliates, net of dividends received -1,966 -1,001 Deferred income taxes 11,353 3,338 Loss on disposal and sales of tangible fixed assets 4,056 2,035 Cumulative effect of accounting change - -7,373 Changes in assets and liabilities-- Increase in trade receivables -26,429 -11,367 Increase in inventories -12,885 -4,317 Increase in finance receivables -30,294 -32,650 Increase in trade payables 27,276 21,316 Decrease in accrued income taxes and accrued expenses and other -13,719 -5,913 Retirement benefit obligation, net 4,307 -609 Other, net 9,737 22,718 - --------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 132,780 154,911 - --------------------------------------------------------------------------------------------------------------- II. Cash Flows from Investing Activities: 1. Proceeds from sales of property, plant and equipment 721 190 2. Expenditures for tangible fixed assets -84,076 -75,432 3. Payments for purchases of available-for-sale securities -79,431 -35,518 4. Proceeds from sales of available-for-sale securities 118,120 45,464 5. (Increase) decrease in time deposits -511 9,915 6. Acquisition of new subsidiaries, net of cash acquired -43,214 - 7. Other, net -7,807 -8,002 - --------------------------------------------------------------------------------------------------------------- Net cash used in investing activities -96,198 -63,383 - --------------------------------------------------------------------------------------------------------------- III. Cash Flows from Financing Activities: 1. Proceeds from long-term indebtedness 72,206 13,349 2. Repayment of long-term indebtedness -60,613 -31,509 3. Decrease in short-term borrowings, net -38,052 -10,728 4. Proceeds from issuance of long-term debt securities 18,000 1,000 5. Repayment of long-term debt securities -22,000 -23,910 6. Dividends paid -14,793 -11,136 7. Payment for purchase of treasury stock -10,624 -11,411 8. Other, net -563 -490 - --------------------------------------------------------------------------------------------------------------- Net cash used in financing activities -56,439 -74,835 - --------------------------------------------------------------------------------------------------------------- IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents 1,200 -2,897 - --------------------------------------------------------------------------------------------------------------- V. Net Increase (Decrease) in Cash and Cash Equivalents -18,657 13,796 - --------------------------------------------------------------------------------------------------------------- VI. Cash and Cash Equivalents at Beginning of Year 203,039 189,243 VII. Adjustment for Change of Fiscal Period on Consolidated Subsidiaries 2,475 - - --------------------------------------------------------------------------------------------------------------- VIII. Cash and Cash Equivalents at End of Period 186,857 203,039 - ---------------------------------------------------------------------------------------------------------------
19 6. SEGMENT INFORMATION (1) Industry Segment Information
(Three months ended March 31, 2005 and 2004) (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- OFFICE EQUIPMENT: Net sales: Unaffiliated customers 432,691 413,533 19,158 4.6 Intersegment - - - - Total 432,691 413,533 19,158 4.6 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 377,706 361,866 15,840 4.4 - -------------------------------------------------------------------------------------------------------------------------- Operating income 54,985 51,667 3,318 6.4 Operating income on office equipment sales(%) 12.7 12.5 - -------------------------------------------------------------------------------------------------------------------------- OTHER BUSINESSES: Net sales: Unaffiliated customers 61,615 57,719 3,896 6.7 Intersegment 644 722 -78 -10.8 Total 62,259 58,441 3,818 6.5 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 63,075 57,752 5,323 9.2 - -------------------------------------------------------------------------------------------------------------------------- Operating income -816 689 -1,505 - Operating income on sales in other businesses (%) -1.3 1.2 - -------------------------------------------------------------------------------------------------------------------------- CORPORATE AND ELIMINATIONS: Net sales: Intersegment -644 -722 78 - Total -644 -722 78 - - -------------------------------------------------------------------------------------------------------------------------- Operating expenses: Intersegment -615 -730 115 - Corporate 15,101 15,827 -726 - Total 14,486 15,097 -611 - - -------------------------------------------------------------------------------------------------------------------------- Operating income -15,130 -15,819 689 - - -------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED: Net sales: Unaffiliated customers 494,306 471,252 23,054 4.9 Intersegment - - - - Total 494,306 471,252 23,054 4.9 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 455,267 434,715 20,552 4.7 - -------------------------------------------------------------------------------------------------------------------------- Operating income 39,039 36,537 2,502 6.8 Operating income on consolidated net sales(%) 7.9 7.8 - -------------------------------------------------------------------------------------------------------------------------- Identifiable assets: (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- Office Equipment 1,391,483 1,220,747 170,736 14.0 Other Businesses 164,337 182,532 -18,195 -10.0 Elimination -10,174 -8,047 -2,127 26.4 Corporate assets 408,023 457,561 -49,538 -10.8 - -------------------------------------------------------------------------------------------------------------------------- Total 1,953,669 1,852,793 100,876 5.4 - -------------------------------------------------------------------------------------------------------------------------- Capital expenditures: (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- Office Equipment 22,330 20,423 1,907 9.3 Other Businesses 2,894 2,444 450 18.4 Corporate 740 752 -12 -1.6 - -------------------------------------------------------------------------------------------------------------------------- Total 25,964 23,619 2,345 9.9 - -------------------------------------------------------------------------------------------------------------------------- Depreciation: (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- Office Equipment 15,082 14,497 585 4.0 Other Businesses 2,640 2,250 390 17.3 Corporate 1,050 535 515 96.3 - -------------------------------------------------------------------------------------------------------------------------- Total 18,772 17,282 1,490 8.6 - --------------------------------------------------------------------------------------------------------------------------
20
(Year ended March 31, 2005 and 2004) (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- OFFICE EQUIPMENT: Net sales: Unaffiliated customers 1,591,828 1,557,633 34,195 2.2 Intersegment - - - - Total 1,591,828 1,557,633 34,195 2.2 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 1,400,121 1,353,304 46,817 3.5 - -------------------------------------------------------------------------------------------------------------------------- Operating income 191,707 204,329 -12,622 -6.2 Operating income on office equipment sales(%) 12.0 13.1 - -------------------------------------------------------------------------------------------------------------------------- OTHER BUSINESSES: Net sales: Unaffiliated customers 222,280 222,612 -332 -0.1 Intersegment 2,506 2,462 44 1.8 Total 224,786 225,074 -288 -0.1 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 224,241 220,391 3,850 1.7 - -------------------------------------------------------------------------------------------------------------------------- Operating income 545 4,683 -4,138 -88.4 Operating income on sales in other businesses (%) 0.2 2.1 - -------------------------------------------------------------------------------------------------------------------------- CORPORATE AND ELIMINATIONS: Net sales: Intersegment -2,506 -2,462 -44 - Total -2,506 -2,462 -44 - - -------------------------------------------------------------------------------------------------------------------------- Operating expenses: Intersegment -2,475 -2,494 19 - Corporate 56,715 59,038 -2,323 - Total 54,240 56,544 -2,304 - - -------------------------------------------------------------------------------------------------------------------------- Operating income -56,746 -59,006 2,260 - - -------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED: Net sales: Unaffiliated customers 1,814,108 1,780,245 33,863 1.9 Intersegment - - - - Total 1,814,108 1,780,245 33,863 1.9 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 1,678,602 1,630,239 48,363 3.0 - -------------------------------------------------------------------------------------------------------------------------- Operating income 135,506 150,006 -14,500 -9.7 Operating income on consolidated net sales(%) 7.5 8.4 - -------------------------------------------------------------------------------------------------------------------------- Identifiable assets: (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- Office Equipment 1,391,483 1,220,747 170,736 14.0 Other Businesses 164,337 182,532 -18,195 -10.0 Elimination -10,174 -8,047 -2,127 26.4 Corporate assets 408,023 457,561 -49,538 -10.8 - -------------------------------------------------------------------------------------------------------------------------- Total 1,953,669 1,852,793 100,876 5.4 - -------------------------------------------------------------------------------------------------------------------------- Capital expenditures: (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- Office Equipment 72,923 65,366 7,557 11.6 Other Businesses 9,675 8,712 963 11.1 Corporate 2,103 1,429 674 47.2 - -------------------------------------------------------------------------------------------------------------------------- Total 84,701 75,507 9,194 12.2 - -------------------------------------------------------------------------------------------------------------------------- Depreciation: (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- Office Equipment 57,020 57,956 -936 -1.6 Other Businesses 6,504 7,774 -1,270 -16.3 Corporate 3,272 1,954 1,318 67.5 - -------------------------------------------------------------------------------------------------------------------------- Total 66,796 67,684 -888 -1.3 - --------------------------------------------------------------------------------------------------------------------------
21 (2) Geographic Segment Information
(Three months ended March 31, 2005 and 2004) (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- Three months ended Three months ended March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- JAPAN: Net sales: External customers 277,023 258,807 18,216 7.0 Intersegment 97,677 83,638 14,039 16.8 Total 374,700 342,445 32,255 9.4 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 355,371 322,424 32,947 10.2 - -------------------------------------------------------------------------------------------------------------------------- Operating income 19,329 20,021 -692 -3.5 Operating income on sales in Japan(%) 5.2 5.8 - -------------------------------------------------------------------------------------------------------------------------- THE AMERICAS: Net sales: External customers 85,645 81,216 4,429 5.5 Intersegment 1,345 1,385 -40 -2.9 Total 86,990 82,601 4,389 5.3 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 80,940 74,417 6,523 8.8 - -------------------------------------------------------------------------------------------------------------------------- Operating income 6,050 8,184 -2,134 -26.1 Operating income on sales in the Americas(%) 7.0 9.9 - -------------------------------------------------------------------------------------------------------------------------- EUROPE: Net sales: External customers 110,307 105,222 5,085 4.8 Intersegment 774 963 -189 -19.6 Total 111,081 106,185 4,896 4.6 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 102,883 99,566 3,317 3.3 - -------------------------------------------------------------------------------------------------------------------------- Operating income 8,198 6,619 1,579 23.9 Operating income on sales in Europe(%) 7.4 6.2 - -------------------------------------------------------------------------------------------------------------------------- OTHER: Net sales: External customers 21,331 26,007 -4,676 -18.0 Intersegment 24,328 21,921 2,407 11.0 Total 45,659 47,928 -2,269 -4.7 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 42,329 44,645 -2,316 -5.2 - -------------------------------------------------------------------------------------------------------------------------- Operating income 3,330 3,283 47 1.4 Operating income on sales in other(%) 7.3 6.8 - -------------------------------------------------------------------------------------------------------------------------- CORPORATE AND ELIMINATIONS: Net sales: Intersegment -124,124 -107,907 -16,217 - Total -124,124 -107,907 -16,217 - - -------------------------------------------------------------------------------------------------------------------------- Operating expenses: -126,256 -106,337 -19,919 - - -------------------------------------------------------------------------------------------------------------------------- Operating income 2,132 -1,570 3,702 - - -------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED: Net sales: External customers 494,306 471,252 23,054 4.9 Intersegment - - - - Total 494,306 471,252 23,054 4.9 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 455,267 434,715 20,552 4.7 - -------------------------------------------------------------------------------------------------------------------------- Operating income 39,039 36,537 2,502 6.8 Operating income on consolidated net sales(% ) 7.9 7.8 - -------------------------------------------------------------------------------------------------------------------------- Identifiable assets: (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- Japan 1,187,190 1,071,297 115,893 10.8 The Americas 206,979 188,644 18,335 9.7 Europe 228,568 188,184 40,384 21.5 Other 66,319 63,701 2,618 4.1 Elimination -143,410 -116,594 -26,816 23.0 Corporate assets 408,023 457,561 -49,538 -10.8 - -------------------------------------------------------------------------------------------------------------------------- Total 1,953,669 1,852,793 100,876 5.4 - --------------------------------------------------------------------------------------------------------------------------
22
(Year ended March 31, 2005 and 2004) (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- JAPAN: Net sales: External customers 994,499 962,127 32,372 3.4 Intersegment 392,216 351,070 41,146 11.7 Total 1,386,715 1,313,197 73,518 5.6 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 1,298,640 1,215,875 82,765 6.8 - -------------------------------------------------------------------------------------------------------------------------- Operating income 88,075 97,322 -9,247 -9.5 Operating income on sales in Japan(%) 6.4 7.4 - -------------------------------------------------------------------------------------------------------------------------- THE AMERICAS: Net sales: External customers 322,975 315,504 7,471 2.4 Intersegment 7,486 5,249 2,237 42.6 Total 330,461 320,753 9,708 3.0 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 316,651 305,284 11,367 3.7 - -------------------------------------------------------------------------------------------------------------------------- Operating income 13,810 15,469 -1,659 -10.7 Operating income on sales in the Americas(%) 4.2 4.8 - -------------------------------------------------------------------------------------------------------------------------- EUROPE: Net sales: External customers 412,333 400,646 11,687 2.9 Intersegment 3,310 3,770 -460 -12.2 Total 415,643 404,416 11,227 2.8 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 391,271 382,383 8,888 2.3 - -------------------------------------------------------------------------------------------------------------------------- Operating income 24,372 22,033 2,339 10.6 Operating income on sales in Europe(%) 5.9 5.4 - -------------------------------------------------------------------------------------------------------------------------- OTHER: Net sales: External customers 84,301 101,968 -17,667 -17.3 Intersegment 89,647 91,373 -1,726 -1.9 Total 173,948 193,341 -19,393 -10.0 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 162,042 182,870 -20,828 -11.4 - -------------------------------------------------------------------------------------------------------------------------- Operating income 11,906 10,471 1,435 13.7 Operating income on sales in other(%) 6.8 5.4 - -------------------------------------------------------------------------------------------------------------------------- CORPORATE AND ELIMINATIONS: Net sales: Intersegment -492,659 -451,462 -41,197 - Total -492,659 -451,462 -41,197 - - -------------------------------------------------------------------------------------------------------------------------- Operating expenses: -490,002 -456,173 -33,829 - - -------------------------------------------------------------------------------------------------------------------------- Operating income -2,657 4,711 -7,368 - - -------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED: Net sales: External customers 1,814,108 1,780,245 33,863 1.9 Intersegment - - - - Total 1,814,108 1,780,245 33,863 1.9 - -------------------------------------------------------------------------------------------------------------------------- Operating expenses 1,678,602 1,630,239 48,363 3.0 - -------------------------------------------------------------------------------------------------------------------------- Operating income 135,506 150,006 -14,500 -9.7 Operating income on consolidated net sales(%) 7.5 8.4 - -------------------------------------------------------------------------------------------------------------------------- Identifiable assets: (Millions of yen) - -------------------------------------------------------------------------------------------------------------------------- March 31, 2005 March 31, 2004 Change % - -------------------------------------------------------------------------------------------------------------------------- Japan 1,187,190 1,071,297 115,893 10.8 The Americas 206,979 188,644 18,335 9.7 Europe 228,568 188,184 40,384 21.5 Other 66,319 63,701 2,618 4.1 Elimination -143,410 -116,594 -26,816 23.0 Corporate assets 408,023 457,561 -49,538 -10.8 - -------------------------------------------------------------------------------------------------------------------------- Total 1,953,669 1,852,793 100,876 5.4 - --------------------------------------------------------------------------------------------------------------------------
23 7. SIGNIFICANT ACCOUNTING POLICIES (CONSOLIDATED) 1. CHANGE RELATING TO THE SCALE OF CONSOLIDATION AND THE APPLICATION OF THE EQUITY METHOD FROM APRIL 1, 2004 TO MARCH 31, 2005. Consolidated subsidiaries: 15 additions including Ricoh Printing Systems, Ltd. and Shanghai Ricoh Digital Equipment Co., Ltd. 51 removals including Hanimex Australasia Pty Ltd. Companies accounted for by the equity method: 6 additions including Triangle Spirit Corporation 4 removals including Shanghai Ricoh Digital Equipment 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. Certain overseas subsidiaries of the company changed their fiscal year end from December 31 to March 31, at the beginning of fiscal 2005. As a result, retained earnings increased by Yen 777 million and other comprehensive income (loss) decreased by Yen 1,665 million. (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 accounting principles generally accepted in the United States of America. Actual results could differ from those estimates. (8) Reclassification to Prior Years' Consolidated Financial Statements The accompanying consolidated balance sheet for the year ended March 31, 2004, reflects the reclassification of finance receivables expected to be collected within one year from the balance sheet date, or the current portion, previously included in investments and other assets to current assets to conform with the presentation used for the year ended March 31, 2005. The effect of this reclassification was to increase total current assets by Yen 154,122 million from Yen 871,817 million to Yen 1,025,939 million at March 31, 2004. 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, 2005 and March 31, 2004 are as follows:
(Millions of yen) - ---------------------------------------------------------------------------------------------------------------- March 31, 2005 - ---------------------------------------------------------------------------------------------------------------- Gross Gross unrealized unrealized Cost holding gains holding losses Fair value - ---------------------------------------------------------------------------------------------------------------- Current: Corporate debt securities 137 - - 137 Other 1 - - 1 - ---------------------------------------------------------------------------------------------------------------- 138 - - 138 - ---------------------------------------------------------------------------------------------------------------- Noncurrent: Equity securities 7,479 9,021 49 16,451 Corporate debt securities 6,000 45 - 6,045 Other 1,229 480 - 1,709 Nonmarketable securities (at cost) 6,949 - - 6,949 - ---------------------------------------------------------------------------------------------------------------- 21,657 9,546 49 31,154 - ---------------------------------------------------------------------------------------------------------------- (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 Other 1,174 492 - 1,666 Nonmarketable securities (at cost) 7,105 - - 7,105 - ---------------------------------------------------------------------------------------------------------------- 13,332 8,572 33 21,871 - ----------------------------------------------------------------------------------------------------------------
(2) DERIVATIVES The Company and certain of its subsidiaries enter into various financial instrument contracts in the normal course of business and in connection with the management of their assets and liabilities. The outstanding agreements, carrying amount and estimated fair value of derivative financial instruments as of March 31, 2005, and March 31, 2004 are as follows:
(Millions of yen) - ---------------------------------------------------------------------------------------------------------------- March 31, 2005 - ---------------------------------------------------------------------------------------------------------------- Carrying Estimated amount Fair value - ---------------------------------------------------------------------------------------------------------------- Interest rate swap agreements, net 1,683 1,683 Foreign currency contracts-net credit 181 181 Currency options-net credit -813 -813 - ---------------------------------------------------------------------------------------------------------------- Total 1,051 1,051 - ---------------------------------------------------------------------------------------------------------------- (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 -145 -145 - ---------------------------------------------------------------------------------------------------------------- Total 3,997 3,997 - ---------------------------------------------------------------------------------------------------------------- (3) TRANSACTIONS OF RICOH WITH AFFILIATES (Millions of yen) - ---------------------------------------------------------------------------------------------------------------- March 31, 2005 March 31, 2004 - ---------------------------------------------------------------------------------------------------------------- Account balances: Receivables 3,416 3,530 Payables 2,964 2,217 - ---------------------------------------------------------------------------------------------------------------- (Millions of yen) - ---------------------------------------------------------------------------------------------------------------- Year ended Year ended March 31, 2005 March 31, 2004 - ---------------------------------------------------------------------------------------------------------------- Transactions: Sales 19,365 19,534 Purchases 27,286 18,714 Dividend income 1,154 1,064 - ----------------------------------------------------------------------------------------------------------------
26 - -APPENDIX- (Year ended March 31, 2005) 1. CONSOLIDATED QUARTERLY PERFORMANCE OUTLINE
(Billions of yen) - ----------------------------------------------------------------------------------------------------------------------------------- 1Q Change(%) 2Q Change(%) 3Q Change(%) 4Q Change(%) - ----------------------------------------------------------------------------------------------------------------------------------- Net sales 436.5 -0.2 439.4 -2.5 443.7 5.4 494.3 4.9 Gross profit 189.1 -1.9 174.7 -10.6 192.1 3.4 198.5 3.6 Operating income 39.3 2.3 18.3 -52.6 38.7 6.9 39.0 6.8 Income before income taxes 41.3 10.7 18.7 -45.0 34.6 4.2 40.6 5.9 Net income 24.8 11.4 10.9 -45.1 22.2 13.0 25.0 -15.9 - ----------------------------------------------------------------------------------------------------------------------------------- Net income per share (yen) 33.69 - 14.79 - 30.08 - 34.08 - - ----------------------------------------------------------------------------------------------------------------------------------- Total assets 1,855.7 - 1,877.4 - 1,899.8 - 1,953.6 - Shareholders' equity 812.9 - 830.2 - 841.9 - 862.9 - - ----------------------------------------------------------------------------------------------------------------------------------- Shareholders' equity per share (yen) 1,100.24 - 1,123.84 - 1,139.87 - 1,175.67 - - ----------------------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities 42.2 - 15.7 - 16.3 - 58.4 - Cash flows from investing activities -10.8 - -23.0 - -56.6 - -5.6 - Cash flows from financing activities -21.2 - 4.3 - -6.0 - -33.4 - Cash and cash equivalents at end of period 215.4 - 214.7 - 168.1 - 186.8 - - ----------------------------------------------------------------------------------------------------------------------------------- (2) Capital expenditures and Depreciation (Billions of yen) - ----------------------------------------------------------------------------------------------------------------------------------- 1Q 2Q 3Q 4Q - ----------------------------------------------------------------------------------------------------------------------------------- Capital expenditures 18.6 19.5 20.5 25.9 Depreciation for tangible fixed assets 15.9 15.0 16.9 18.7 - ----------------------------------------------------------------------------------------------------------------------------------- (3) R&D Expenditures (Billions of yen) - ----------------------------------------------------------------------------------------------------------------------------------- 1Q 2Q 3Q 4Q - ----------------------------------------------------------------------------------------------------------------------------------- R&D expenditures 24.3 29.0 26.1 30.8 R&D expenditures / Total Sales (%) 5.6 6.6 5.9 6.2 - ----------------------------------------------------------------------------------------------------------------------------------- (4) Interest income (expenses) net (Billions of yen) - ----------------------------------------------------------------------------------------------------------------------------------- 1Q 2Q 3Q 4Q - ----------------------------------------------------------------------------------------------------------------------------------- Interest income (expenses) net -0.6 -0.6 -0.9 -0.2 - ----------------------------------------------------------------------------------------------------------------------------------- (5) Exchange Rate - ----------------------------------------------------------------------------------------------------------------------------------- 1Q 2Q 3Q 4Q - ----------------------------------------------------------------------------------------------------------------------------------- Exchange rate (Yen/US$) 109.65 110.01 106.01 104.60 Exchange rate (Yen/EURO) 132.17 134.44 137.16 137.26 - -----------------------------------------------------------------------------------------------------------------------------------
A1 2. CONSOLIDATED SALES BY PRODUCT CATEGORY
(Three months ended March 31, 2005 and 2004) (Millions of yen) - ----------------------------------------------------------------------------------------------------------------------------------- Change excluding Three months ended Three months ended exchange March 31, 2005 March 31, 2004 Change % impact % - ----------------------------------------------------------------------------------------------------------------------------------- [Office Equipment] Imaging Solutions: Digital Imaging Systems 142,583 153,230 -10,647 -6.9 -10,618 -6.9 Percentage of net sales (%) 28.8 32.5 Domestic 60,962 69,041 -8,079 -11.7 -8,079 -11.7 Overseas 81,621 84,189 -2,568 -3.1 -2,539 -3.0 Other Imaging Systems 37,592 46,217 -8,625 -18.7 -8,933 -19.3 Percentage of net sales (%) 7.7 9.8 Domestic 12,989 16,974 -3,985 -23.5 -3,985 -23.5 Overseas 24,603 29,243 -4,640 -15.9 -4,948 -16.9 Total Imaging Solutions 180,175 199,447 -19,272 -9.7 -19,551 -9.8 Percentage of net sales (%) 36.5 42.3 Domestic 73,951 86,015 -12,064 -14.0 -12,064 -14.0 Overseas 106,224 113,432 -7,208 -6.4 -7,487 -6.6 - ----------------------------------------------------------------------------------------------------------------------------------- Network Input/Output Systems: Printing Systems 184,704 151,191 33,513 22.2 32,786 21.7 Percentage of net sales (%) 37.4 32.1 Domestic 81,243 64,255 16,988 26.4 16,988 26.4 Overseas 103,461 86,936 16,525 19.0 15,798 18.2 Other Input/Output Systems 4,486 5,928 -1,442 -24.3 -1,450 -24.5 Percentage of net sales (%) 0.9 1.2 Domestic 1,326 1,186 140 11.8 140 11.8 Overseas 3,160 4,742 -1,582 -33.4 -1,590 -33.5 Total Network Input/Output Systems 189,190 157,119 32,071 20.4 31,336 19.9 Percentage of net sales (%) 38.3 33.3 Domestic 82,569 65,441 17,128 26.2 17,128 26.2 Overseas 106,621 91,678 14,943 16.3 14,208 15.5 - ----------------------------------------------------------------------------------------------------------------------------------- Network System Solutions 63,326 56,967 6,359 11.2 6,335 11.1 Percentage of net sales (%) 12.7 12.2 Domestic 61,131 55,502 5,629 10.1 5,629 10.1 Overseas 2,195 1,465 730 49.8 706 48.2 - ----------------------------------------------------------------------------------------------------------------------------------- Office Equipment Total 432,691 413,533 19,158 4.6 18,120 4.4 Percentage of net sales (%) 87.5 87.8 Domestic 217,651 206,958 10,693 5.2 10,693 5.2 Overseas 215,040 206,575 8,465 4.1 7,427 3.6 The Americas 85,853 82,663 3,190 3.9 5,629 6.8 Europe 106,523 104,981 1,542 1.5 -2,141 -2.0 Other 22,664 18,931 3,733 19.7 3,939 20.8 - ----------------------------------------------------------------------------------------------------------------------------------- [Other Businesses] Other Businesses 61,615 57,719 3,896 6.7 3,947 6.8 Percentage of net sales (%) 12.5 12.2 Domestic 54,827 45,558 9,269 20.3 9,269 20.3 Overseas 6,788 12,161 -5,373 -44.2 -5,322 -43.8 The Americas 168 120 48 40.0 51 42.5 Europe 1,786 1,038 748 72.1 715 68.9 Other 4,834 11,003 -6,169 -56.1 -6,088 -55.3 - ----------------------------------------------------------------------------------------------------------------------------------- Grand Total 494,306 471,252 23,054 4.9 22,067 4.7 Percentage of net sales (%) 100.0 100.0 Domestic 272,478 252,516 19,962 7.9 19,962 7.9 Percentage of net sales (%) 55.1 53.6 Overseas 221,828 218,736 3,092 1.4 2,105 1.0 Percentage of net sales (%) 44.9 46.4 The Americas 86,021 82,783 3,238 3.9 5,680 6.9 Percentage of net sales (%) 17.4 17.6 Europe 108,309 106,019 2,290 2.2 -1,426 -1.3 Percentage of net sales (%) 21.9 22.5 Other 27,498 29,934 -2,436 -8.1 -2,149 -7.2 Percentage of net sales (%) 5.6 6.3 - ---------------------------------------------------------------------------------------------------------------------------------- Reference: Exchange rate US$ 1 Yen 104.60 Yen 107.31 Yen -2.71 EURO 1 Yen 137.26 Yen 134.10 Yen 3.16
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, 2005 and 2004) (Millions of yen) - --------------------------------------------------------------------------------------------------------------------------------- Year ended Year ended Change excluding March 31, 2005 March 31, 2004 Change % exchange impact % - --------------------------------------------------------------------------------------------------------------------------------- [Office Equipment] Imaging Solutions: Digital Imaging Systems 559,023 606,270 -47,247 -7.8 -42,084 -6.9 Percentage of net sales (%) 30.8 34.1 Domestic 231,526 253,830 -22,304 -8.8 -22,304 -8.8 Overseas 327,497 352,440 -24,943 -7.1 -19,780 -5.6 Other Imaging Systems 156,074 197,304 -41,230 -20.9 -40,527 -20.5 Percentage of net sales (%) 8.6 11.0 Domestic 59,371 70,762 -11,391 -16.1 -11,391 -16.1 Overseas 96,703 126,542 -29,839 -23.6 -29,136 -23.0 Total Imaging Solutions 715,097 803,574 -88,477 -11.0 -82,611 -10.3 Percentage of net sales (%) 39.4 45.1 Domestic 290,897 324,592 -33,695 -10.4 -33,695 -10.4 Overseas 424,200 478,982 -54,782 -11.4 -48,916 -10.2 - --------------------------------------------------------------------------------------------------------------------------------- Network Input/Output Systems: Printing Systems 655,328 509,212 146,116 28.7 148,366 29.1 Percentage of net sales (%) 36.1 28.6 Domestic 283,141 218,165 64,976 29.8 64,976 29.8 Overseas 372,187 291,047 81,140 27.9 83,390 28.7 Other Input/Output Systems 15,508 49,025 -33,517 -68.4 -33,550 -68.4 Percentage of net sales (%) 0.9 2.8 Domestic 3,247 4,981 -1,734 -34.8 -1,734 -34.8 Overseas 12,261 44,044 -31,783 -72.2 -31,816 -72.2 Total Network Input/Output Systems 670,836 558,237 112,599 20.2 114,816 20.6 Percentage of net sales (%) 37.0 31.4 Domestic 286,388 223,146 63,242 28.3 63,242 28.3 Overseas 384,448 335,091 49,357 14.7 51,574 15.4 - --------------------------------------------------------------------------------------------------------------------------------- Network System Solutions 205,895 195,822 10,073 5.1 10,078 5.1 Percentage of net sales (%) 11.3 11.0 Domestic 199,070 191,302 7,768 4.1 7,768 4.1 Overseas 6,825 4,520 2,305 51.0 2,310 51.1 - --------------------------------------------------------------------------------------------------------------------------------- Office Equipment Total 1,591,828 1,557,633 34,195 2.2 42,283 2.7 Percentage of net sales (%) 87.7 87.5 Domestic 776,355 739,040 37,315 5.0 37,315 5.0 Overseas 815,473 818,593 -3,120 -0.4 4,968 0.6 The Americas 324,853 325,106 -253 -0.1 16,251 5.0 Europe 403,574 398,109 5,465 1.4 -4,674 -1.2 Other 87,046 95,378 -8,332 -8.7 -6,609 -6.9 - --------------------------------------------------------------------------------------------------------------------------------- [Other Businesses] Other Businesses 222,280 222,612 -332 -0.1 99 0.0 Percentage of net sales (%) 12.3 12.5 Domestic 196,620 175,020 21,600 12.3 21,600 12.3 Overseas 25,660 47,592 -21,932 -46.1 -21,501 -45.2 The Americas 744 1,274 -530 -41.6 -494 -38.8 Europe 5,332 4,283 1,049 24.5 958 22.4 Other 19,584 42,035 -22,451 -53.4 -21,965 -52.3 - --------------------------------------------------------------------------------------------------------------------------------- Grand Total 1,814,108 1,780,245 33,863 1.9 42,382 2.4 Percentage of net sales (%) 100.0 100.0 Domestic 972,975 914,060 58,915 6.4 58,915 6.4 Percentage of net sales (%) 53.6 51.3 Overseas 841,133 866,185 -25,052 -2.9 -16,533 -1.9 Percentage of net sales (%) 46.4 48.7 The Americas 325,597 326,380 -783 -0.2 15,757 4.8 Percentage of net sales (%) 17.9 18.3 Europe 408,906 402,392 6,514 1.6 -3,716 -0.9 Percentage of net sales (%) 22.5 22.6 Other 106,630 137,413 -30,783 -22.4 -28,574 -20.8 Percentage of net sales (%) 6.0 7.8 - --------------------------------------------------------------------------------------------------------------------------------- Reference: Exchange rate US$ 1 Yen 107.58 Yen 113.09 Yen -5.51 EURO 1 Yen 135.25 Yen 132.65 Yen 2.60
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 ending March 31, 2006 Half year ending September 30, 2005 ---------------------------------------- ---------------------------------------- Year ended Change Change Change Change Mar.31,'05 Forecast % Forecast(*) % Forecast % Forecast(*) % - ----------------------------------------------------------------------------------------------------------------------------------- [Office Equipment] Imaging Solutions: Digital Imaging Systems 559.0 500.9 -10.4 509.7 -8.8 246.6 -10.5 251.2 -8.8 Domestic 231.5 208.4 -10.0 208.4 -10.0 102.5 -10.0 102.5 -10.0 Overseas 327.4 292.5 -10.7 301.3 -8.0 144.1 -10.8 148.7 -8.0 Other Imaging Systems 156.0 122.7 -21.4 124.9 -20.0 63.6 -21.6 64.8 -20.1 Domestic 59.3 47.5 -20.0 47.5 -20.0 24.7 -20.1 24.7 -20.1 Overseas 96.7 75.2 -22.2 77.4 -20.0 38.9 -22.5 40.1 -20.1 Total Imaging Solutions 715.0 623.6 -12.8 634.6 -11.3 310.2 -13.0 316.0 -11.4 Domestic 290.8 255.9 -12.0 255.9 -12.0 127.2 -12.2 127.2 -12.2 Overseas 424.2 367.7 -13.3 378.7 -10.7 183.0 -13.6 188.8 -10.8 - ----------------------------------------------------------------------------------------------------------------------------------- Network Input/Output Systems: Printing Systems 655.3 828.5 26.4 842.6 28.6 395.7 31.3 402.8 33.7 Domestic 283.1 361.3 27.6 361.3 27.6 174.9 36.7 174.9 36.7 Overseas 372.1 467.2 25.5 481.3 29.3 220.8 27.4 227.9 31.5 Other Input/Output Systems 15.5 11.2 -27.8 11.2 -27.8 5.3 -41.0 5.3 -41.0 Domestic 3.2 3.0 -7.6 3.0 -7.6 1.4 -6.0 1.4 -6.0 Overseas 12.2 8.2 -33.1 8.2 -33.1 3.9 -47.9 3.9 -47.9 Total Network Input/Output Systems 670.8 839.7 25.2 853.8 27.3 401.0 29.2 408.1 31.5 Domestic 286.3 364.3 27.2 364.3 27.2 176.3 36.2 176.3 36.2 Overseas 384.4 475.4 23.7 489.5 27.3 224.7 24.2 231.8 28.2 - ----------------------------------------------------------------------------------------------------------------------------------- Network System Solutions 205.8 215.8 4.8 216.2 5.0 103.7 4.7 103.9 4.9 Domestic 199.0 206.0 3.5 206.0 3.5 99.5 3.5 99.5 3.5 Overseas 6.8 9.8 43.6 10.2 49.5 4.2 43.7 4.4 50.5 - ----------------------------------------------------------------------------------------------------------------------------------- Office Equipment Total 1,591.8 1,679.1 5.5 1,704.6 7.1 814.9 6.4 828.0 8.1 Domestic 776.3 826.2 6.4 826.2 6.4 403.0 8.8 403.0 8.8 Overseas 815.4 852.9 4.6 878.4 7.7 411.9 4.1 425.0 7.4 The Americas 324.8 345.2 6.3 353.3 8.8 166.4 3.4 174.1 8.2 Europe 403.5 407.9 1.1 424.5 5.2 195.2 2.1 200.1 4.7 Other 87.0 99.8 14.7 100.6 15.6 50.3 15.9 50.8 17.0 - ----------------------------------------------------------------------------------------------------------------------------------- [Other Businesses] Other Businesses 222.2 220.9 -0.6 221.4 -0.4 109.1 -0.9 109.3 -0.7 Domestic 196.6 192.3 -2.2 192.3 -2.2 96.5 -2.3 96.5 -2.3 Overseas 25.6 28.6 11.5 29.1 13.4 12.6 11.7 12.8 13.5 The Americas 0.7 2.1 182.3 2.1 182.3 1.0 159.1 1.0 159.1 Europe 5.3 5.7 6.9 5.9 10.7 2.0 11.2 2.0 11.2 Other 19.5 20.8 6.2 21.1 7.7 9.6 5.6 9.8 7.8 - ----------------------------------------------------------------------------------------------------------------------------------- Grand Total 1,814.1 1,900.0 4.7 1,926.0 6.2 924.0 5.5 937.3 7.0 Domestic 972.9 1,018.5 4.7 1,018.4 4.7 499.5 6.5 499.5 6.5 Overseas 841.1 881.5 4.8 907.5 7.9 424.5 4.3 437.8 7.6 The Americas 325.5 347.3 6.7 355.4 9.2 167.4 3.8 175.1 8.5 Europe 408.9 413.6 1.1 430.4 5.3 197.2 2.2 202.1 4.7 Other 106.6 120.6 13.1 121.7 14.1 59.9 14.1 60.6 15.4 - -----------------------------------------------------------------------------------------------------------------------------------
* Excluding foreign exchange impact
Reference: Year ended Mar. 31, '05 Year ending Mar. 31, '06 Half year ending Sept. 30, '05 Exchange rate (Results) (Forecast) (Forecast) US$ 1 Yen 107.58 Yen 105.00 Yen 105.00 EURO 1 Yen 135.25 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 4. FORECAST OF CONSOLIDATED SALES BY NEW PRODUCT CATEGORY
(Billions of yen) - ----------------------------------------------------------------------------------------------------------------------------------- Year ending March 31, 2006 Half year ending September 30, 2005 ---------------------------------------- ---------------------------------------- Year ended Change Change Change Change Mar.31,'05 Forecast % Forecast(*) % Forecast % Forecast(*) % - ----------------------------------------------------------------------------------------------------------------------------------- [Office Solution Business] Imaging Solution Business 1,332.2 1,406.8 5.6 1,431.2 7.4 683.8 7.0 696.2 8.9 Domestic 564.1 606.3 7.5 606.3 7.5 296.7 10.8 296.7 10.8 Overseas 768.1 800.5 4.2 824.9 7.4 387.1 4.3 399.5 7.6 Network system Solution Business 199.1 209.1 5.0 209.4 5.2 100.0 4.6 100.2 4.8 Domestic 192.3 199.2 3.6 199.2 3.6 95.8 3.4 95.8 3.4 Overseas 6.8 9.9 45.1 10.2 49.5 4.2 43.7 4.4 50.5 Office Solution Business Total 1,531.4 1,615.9 5.5 1,640.6 7.1 783.8 6.7 796.4 8.4 Domestic 756.4 805.5 6.5 805.5 6.5 392.5 8.9 392.5 8.9 Overseas 774.9 810.4 4.6 835.1 7.8 391.3 4.6 403.9 7.9 The Americas 312.1 331.3 6.1 339.1 8.6 159.4 3.7 166.9 8.6 Europe 385.6 391.2 1.4 407.3 5.6 187.1 3.1 191.7 5.6 Other 77.0 87.9 14.0 88.7 15.1 44.8 14.9 45.3 16.1 - ----------------------------------------------------------------------------------------------------------------------------------- [Industry Business] Industry Business 119.4 117.7 -1.4 118.5 -0.8 59.7 1.6 60.2 2.5 Domestic 80.8 72.5 -10.3 72.5 -10.3 37.4 -5.8 37.4 -5.8 Overseas 38.5 45.2 17.2 46.0 19.2 22.3 17.0 22.8 19.6 The Americas 10.1 13.6 34.5 13.9 37.5 6.9 34.9 7.1 38.8 Europe 15.3 14.8 -3.5 15.3 -0.2 6.9 -4.4 7.2 -0.2 Other 13.1 16.8 28.0 16.8 28.0 8.5 26.4 8.5 26.4 - ----------------------------------------------------------------------------------------------------------------------------------- [Other Business] Other Business 163.2 166.4 1.9 166.9 2.2 80.5 -2.5 80.7 -2.3 Domestic 135.6 140.5 3.6 140.5 3.6 69.6 0.8 69.6 0.8 Overseas 27.5 25.9 -6.1 26.4 -4.3 10.9 -19.6 11.1 -18.2 The Americas 3.2 2.4 -27.2 2.4 -27.2 1.1 -55.8 1.1 -55.8 Europe 7.8 7.6 -3.5 7.8 -1.0 3.2 -25.5 3.2 -25.5 Other 16.4 15.9 -3.2 16.2 -1.3 6.6 -2.6 6.8 0.3 - ----------------------------------------------------------------------------------------------------------------------------------- Grand Total 1,814.1 1,900.0 4.7 1,926.0 6.2 924.0 5.5 937.3 7.0 Domestic 972.9 1,018.5 4.7 1,018.5 4.7 499.5 6.5 499.5 6.5 Overseas 841.1 881.5 4.8 907.5 7.9 424.5 4.3 437.8 7.6 The Americas 325.5 347.3 6.7 355.4 9.2 167.4 3.8 175.1 8.5 Europe 408.9 413.6 1.1 430.4 5.3 197.2 2.2 202.1 4.7 Other 106.6 120.6 13.1 121.7 14.1 59.9 14.1 60.6 15.4 - -----------------------------------------------------------------------------------------------------------------------------------
* Excluding foreign exchange impact
Reference: Year ended Mar. 31, '05 Year ending Mar. 31, '06 Half year ending Sept. 30, '05 Exchange rate (Results) (Forecast) (Forecast) US$ 1 Yen 107.58 Yen 105.00 Yen 105.00 EURO 1 Yen 135.25 Yen 130.00 Yen 130.00
Each category includes the following product line: Imaging Solution Business Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Network system Solution Business Personal computers, PC servers, network systems and network related software Industry Business Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Other Business Optical discs and digital camera A5 - -APPENDIX B- [SCHEDULE 1] CONSOLIDATED PERFORMANCE
- --------------------------------------------------------------------------------------------------------------------------------- Year ended Year ended Year ended Year ended Year ended March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004 March 31, 2005 - --------------------------------------------------------------------------------------------------------------------------------- Net sales (left axis) 1,538.2 1,672.3 1,738.3 1,780.2 1,814.1 Net income (right axis) 53.2 61.6 72.5 91.7 83.1 Return on equity (right axis) 9.7 10.4 11.2 12.6 10.0 Return on assets (right axis) 6.0 6.4 6.6 7.7 7.1 Net income per share (left axis) 76.85 88.27 99.79 123.63 112.64 - ---------------------------------------------------------------------------------------------------------------------------------
[SCHEDULE 2] CONSOLIDATED SALES BY PRODUCT LINE
- --------------------------------------------------------------------------------------------------------------------------------- Year ended Year ended Year ended Year ended Year ended March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004 March 31, 2005 - --------------------------------------------------------------------------------------------------------------------------------- Imaging Solutions 867.0 934.1 859.7 803.5 715.0 Network I/O Systems 261.8 344.2 463.3 558.2 670.8 Network System Solutions 209.5 206.9 197.4 195.8 205.8 Other Businesses 199.8 186.9 217.7 222.6 222.2 - --------------------------------------------------------------------------------------------------------------------------------- Imaging solutions (%) 56.4 55.8 49.5 45.1 39.4 Networking I/O systems (%) 17.0 20.6 26.7 31.4 37.0 Network system solutions (%) 13.6 12.4 11.3 11.0 11.3 Other Businesses (%) 13.0 11.2 12.5 12.5 12.3 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, 2001 March 31, 2002 March 31, 2003 March 31, 2004 March 31, 2005 - --------------------------------------------------------------------------------------------------------------------------------- Japan 930.4 902.6 896.0 914.0 972.9 The Americas 252.6 341.7 343.9 326.3 325.5 Europe 247.4 311.3 354.4 402.3 408.9 Others 107.6 116.6 143.9 137.4 106.6 - --------------------------------------------------------------------------------------------------------------------------------- Japan (%) 60.5 54.0 51.5 51.3 53.6 The Americas (%) 16.4 20.4 19.8 18.3 17.9 Europe (%) 16.1 18.6 20.4 22.6 22.5 Others (%) 7.0 7.0 8.3 7.8 6.0 Total 100.0 100.0 100.0 100.0 100.0 - ---------------------------------------------------------------------------------------------------------------------------------
[GEOGRAPHIC SEGMENT]
- --------------------------------------------------------------------------------------------------------------------------------- Year ended Year ended Year ended Year ended Year ended Japan March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004 March 31, 2005 - --------------------------------------------------------------------------------------------------------------------------------- Net sales (Billions of yen) 1,233.9 1,248.6 1,274.9 1,313.1 1,386.7 Operating income (Billions of yen) 83.5 106.1 86.1 97.3 88.0 Operating income on net sales (%) 6.8 8.5 6.8 7.4 6.4 - ---------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------- Year ended Year ended Year ended Year ended Year ended The Americas March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004 March 31, 2005 - --------------------------------------------------------------------------------------------------------------------------------- Net sales (Billions of yen) 256.4 346.9 339.5 320.7 330.4 Operating income (Billions of yen) 8.9 11.4 14.3 15.4 13.8 Operating income on net sales (%) 3.5 3.3 4.2 4.8 4.2 - ---------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------- Year ended Year ended Year ended Year ended Year ended Europe March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004 March 31, 2005 - --------------------------------------------------------------------------------------------------------------------------------- Net sales (Billions of yen) 257.7 313.3 355.9 404.4 415.6 Operating income (Billions of yen) 11.2 12.1 18.2 22.0 24.3 Operating income on net sales (%) 4.4 3.9 5.1 5.4 5.9 - ---------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------- Year ended Year ended Year ended Year ended Year ended Others March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004 March 31, 2005 - --------------------------------------------------------------------------------------------------------------------------------- Net sales 117.1 146.9 169.8 193.3 173.9 Operating income 6.1 7.0 9.9 10.4 11.9 Operating income on net sales 5.3 4.8 5.9 5.4 6.8 - ---------------------------------------------------------------------------------------------------------------------------------
B1 -----END PRIVACY-ENHANCED MESSAGE-----