Ricoh 2004 Annual Report Download - page 20

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Network System Solutions
In order to support customers in the optimization of their total printing costs,
Ricoh has strengthened the solution business with respect to support services,
document management, and software. This has also led to increased domestic
and overseas sales. On the other hand, sales of personal computers and servers
continued to decline in Japan, reflecting sluggish information technology
spending. In accordance with these factors, sales in this category decreased 0.8%
to ¥195.8 billion ($1,883 million).
2. Other Businesses
Sales generated by Other Business activities increased 2.2% to ¥222.6 billion
($2,141 million). Optical equipments, leasing and other business
performed favorably, although results have become stagnant in the sluggish
market for measuring equipment.
CONSOLIDATED SALES BY GEOGRAPHIC AREA
1. Japan
While recovery is now predicted for stock market conditions, corporate
capital expenditure, and business profitability, conditions within the
Japanese domestic market remain difficult. Accordingly, we have promoted
product and marketing strategies in Office Equipment in order to respond
suitably to customer needs, and as a result, Printing Systems such as MFPs
and laser printers performed favorably in terms of sales, as have solution
business products such as support services and software. Meanwhile, sales in
analog equipments replaced with MFPs and color equipments and sales of
personal computers and servers declined. In terms of Other Businesses, sales
have also fallen in the sluggish market for measuring equipment, although
leasing and other business performed favorably. As a result of these factors,
sales in Japan have increased 2.0% to ¥914.0 billion ($8,789 million).
Domestic sales accounted for 51.3% of consolidated net sales, down 0.2
percentage point.
2. The Americas
In circumstances of repercussions from the Iraq war, turmoil in the Middle
East, and severe competition, through its enhanced sales network, Ricoh
has injected full effort into the retail of color PPCs and into Printing
Systems that can respond to customers’ changing needs for networking,
coloration, and high speeding. Furthermore, we have also striven to expand
sales to major accounts. Nevertheless, sales in the Americas have decreased
5.1% to ¥326.3 billion ($3,138 million), due to the higher yen against the
dollar, and after factoring out the yen’s appreciation, sales increased 2.1%.
3. Europe
With European economies remaining relatively stable, sales of color PPCs
and Printing Systems increased. Ricoh has strengthened its sales network
and continuously reinforced its brand power, and these efforts have helped
Ricoh to maintain its top share of the European market for copiers and
MFPs. The yen's depreciation against the euro also contributed. As a result,
sales in Europe increased 13.5% to ¥402.3 billion ($3,869 million).
4. Other
In China and other Asian markets, a full-fledged shift in business-
equipment purchasing trends towards digital networked and color models
has generated an increase in our sales of color PPCs and Printing Systems.
However, demand for optical discs has dropped and performance has also
been affected by a reduction in demand throughout the entire Asian region.
Accordingly, sales in other regions decreased 4.5% to ¥137.4 billion ($1,321
million).
Financial Position
In Assets, trade receivables especially in Japan and Europe increased with
respect to the previous period. Inventories reduced, and property, plant and
equipment decreased mainly owing to capital expenditure focused on
effective performance. On the other hand, finance receivables increased,
mainly in Japan. Factors such as the replacement of investment securities
with marketable securities and lower deferred tax assets as a result of
reduced employee pension obligations caused investments and other assets
decreased. As a result, total assets decreased ¥32.1 billion to ¥1,852.7 billion
($17,815 million).
Turning to liabilities, domestic and overseas trade payables increased.
Interest-bearing debt has been reduced by due primarily to efforts to lower
borrowing. Furthermore, other current liabilities decreased, and as a result
of amendment of the domestic pension system and transfer of the
substitutional portion of the Employees’ Pension Fund, retirement benefit
obligations reduced. In accordance with the above, total liabilities decreased
¥165.3 billion to ¥1,008.7 billion ($9,700 million).
In Shareholders’ Equity, common stock and additional paid-in capital
were essentially unchanged. Retained earnings increased, and accumulated
other comprehensive income decreased due primarily to the decrease of
pension liability adjustments. Consequently, total shareholders’ equity
increased ¥137.6 billion to ¥795.1 billion ($7,645 million).