Ricoh 2008 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ...• Improving our products • Improvements made at business sites • Basis for sustainable environmental management • Social contribution of environmental conservation/Environmental communication â- How to Obtain Ricoh's Corporate Information • IR (Investor Relations) http://www.ricoh.com/IR...

  • Page 3
    ... copiers, multifunctional and other printers, facsimiles, personal computers, and related supplies and services, as well as digital cameras and advanced electronic devices. We are rapidly building a solid presence worldwide as a provider of comprehensive document solutions that help customers...

  • Page 4
    ...: production printing and low-end products. In fiscal 2008, the final year of the 15th Mid-Term Management Plan, the Group expanded product offerings in the Office Solutions category, marketing a number of new color multifunctional copiers and color laser printers. With new products characterized...

  • Page 5
    ... system planning and construction for the second consecutive year in J.D. Power Asia Pacific's 2007 Japan Solution Provider Satisfaction Study. In June 2007, Ricoh established InfoPrint Solutions Company, a joint venture company with IBM, to gain a stronger foothold in the production printing market...

  • Page 6
    ... in our business operations. We will also continue translating Ricoh's three core values-i.e., Harmonize with the environment, Simplify your life & work, and Support knowledge management-into our products and services. In other words, we aim to create "customer delight." 5 ANNUAL REPORT 2008

  • Page 7
    ... President and Chief Executive Officer Chairman To O u r S h a r e h o l d e r s a n d C u s t o m e r s ANNUAL REPORT 2008 Corporate Governance / CSR Fiscal 2008 Milestones 16th Mid-Term Management Plan Fiscal 2008 Highlights To Our Shareholders and Customers 6 Financial Section Sustainable...

  • Page 8
    ... Net sales, operating income, net income, operating margin, and net income margin 2,219.9 billion yen (net sales) The Ricoh Group grew its sales in all business segments, especially color MFPs and laser printers. Overall sales rose 7.3% from the previous year, marking the 14th consecutive year of...

  • Page 9
    ...2007 2008 ANNUAL REPORT 2008 8 Financial Section 500 Sustainable Environmental Management Corporate Governance / CSR -198.3 Fiscal 2008 Milestones 173.4 87.6 129.1 33.0 167.2 Operating cash flow, investing cash flow, and free cash flow 194.3 16th Mid-Term Management Plan Fiscal 2008...

  • Page 10
    ..., diazo copiers, scanners, other equipment, supplies, maintenance services, software, etc. Network System Solutions: personal computers, servers, network devices, network software, application software, customer support and service, etc. Industrial Products Semiconductors Thermal media Electric...

  • Page 11
    .... Industrial Products net sales (billions of yen) 2006 2007 2008 (FY) 0 50 100 Thermal media plant in Jiangsu, China begins operation 120.6 133.3 144.3 150 Ricoh Thermal Media (Wuxi) Co., Ltd. began operation in April 2007 as our manufacturing base for high value-added thermal paper, enabling...

  • Page 12
    16th Mid-Term Management Plan Moving beyond customer satisfaction to customer delight: We change our business processes drastically to establish Ricoh Quality. Shiro Kondo President and Chief Executive Officer The Ricoh Group will offer innovative products and services with "Ricoh Value." The ...

  • Page 13
    ... Network administration system â- Front runner in digitization and networking â- CS and customer contact capabilities â- Technologies to integrate image processing and data processing â- Full product range 2F Network devices 1F Services Support Supplies Standalone devices ANNUAL REPORT 2008...

  • Page 14
    ..., marketing, and service. Customers and society Commitments (meeting expectations) Trust Ricoh Brand Continuously delivering three tangible benefits to customers Ricoh Value Harmonize with the environment Simplify your life & work Support knowledge management 13 ANNUAL REPORT 2008

  • Page 15
    ... plant in Thailand. It would be fair to say that the Ricoh Group is well-prepared to make a fresh start and achieve steady revenue growth, looking three or even ten years ahead. Sustainable Environmental Management Corporate Governance / CSR Fiscal 2008 Milestones 16th Mid-Term Management Plan...

  • Page 16
    ... the Group also launched InfoPrint Solutions Company, with IBM Corporation. This joint venture has unparalleled IT solution technologies, system development, and sales and service networks. The combination of Ricoh's traditional core competencies and these three new group companies' product/solution...

  • Page 17
    ... support for many years to come. ANNUAL REPORT 2008 16 Financial Section Sustainable Environmental Management Corporate Governance / CSR Fiscal 2008 Milestones Q7 In closing, tell us about your plans for shareholder returns and enterprise value. 16th Mid-Term Management Plan Fiscal 2008...

  • Page 18
    ... 3,000 employees to 5,000. A new manufacturing base in Thailand To reinforce its manufacturing network in Asia, Ricoh plans to purchase a 121,000 m2 plot of land in Amata City, Rayong, Thailand to build a manufacturing plant for multifunctional copiers and laser printers. The new manufacturing base...

  • Page 19
    ...., the RICOH Pro C900 is highly productive, producing high-quality images both in color and monochrome at a print speed of 90 sheets per minute, while providing stable, reliable operation and excellent cost effectiveness. At the press conference Awards Most Outstanding Printer Line of the Year and...

  • Page 20
    ... Affiliated companies Affiliated companies Business execution departments • Internal control system construction support • Internal audits Operations audits Accounting audits Governance structure in the Ricoh Group The Ricoh Group has strengthened its corporate governance. (1) Board of...

  • Page 21
    ... color copiers with CUD certification*2 on sale in August 2005 before any other company in the industry. Since then, Ricoh has increased the range of products adopting CUD. In February 2007, we started enhancing our efforts by issuing CUD guidelines, implementing key-person and on-site training...

  • Page 22
    ... such as customers, governments, and nonprofit organizations. * Japan: 46 companies, Asia Pacific/ India: 11 companies (in 8 nations/regions), The Americas: 16 companies (in 14 nations/regions), Europe: 26 companies (in 14 nations), China: 5 companies Bike commuters wearing "Ricoh Eco Logo" jackets...

  • Page 23
    ...Public Accounting Firm Corporate Social Responsibility , Ricoh s Global Network Senior Management Corporate Data 23 29 31 33 34 35 36 63 64 66 68 69 70 ANNUAL REPORT 2008 22 Financial Section Sustainable Environmental Management Corporate Governance / CSR Fiscal 2008 Milestones 16th Mid-Term...

  • Page 24
    ... paper copiers ("PPCs"), multifunctional printers ("MFPs") and laser printers, mainly for color products, continuously increased and Information Technology services also increased its sales resulting from the expansion of solutions business. As for Industrial Products, sales of its thermal media...

  • Page 25
    ...Environmental Management Corporate Governance / CSR Fiscal 2008 Milestones CONSOLIDATED SALES BY GEOGRAPHIC AREA Americas. The increase in sales in this area would have increased 16th Mid-Term Management Plan Office Solutions Imaging Solutions Network System Solutions Industrial Products Other...

  • Page 26
    ... fiscal years 2006, 2007 and 2008 were ¥102.0 billion, ¥85.8 billion and ¥85.2 billion ($852 million), respectively. Ricoh directs a significant portion of its capital investments towards digital and networking equipment, such as digital PPCs / MFPs, laser and GELJET printers, and manufacturing...

  • Page 27
    ... ¥ 15 ¥ 63,900 50,650 200,464 ¥315,014 ¥ 15 Year ended March 31,2008 Millions of Yen Expected maturity date Average pay rate Total 2009 2010 2011 2012 2013 2014 and thereafter Fair Value 16th Mid-Term Management Plan Bonds Convertible Bonds Loans Total 1.43% 1.66 ¥ 54,999 55,202 196,818...

  • Page 28
    ... average exchange rates and estimated fair value. These notional amounts generally are used to calculate the contractual payments to be exchanged under the contracts. During fiscal year 2007, a subsidiary of the Company sold its content distribution business. As a result of such sale, the operating...

  • Page 29
    ...for market risk Fiscal 2008 Milestones 16th Mid-Term Management Plan are subject to equity price risk arising from changes in their market sensitive. Year ended March 31, 2007 Millions of Yen Cost Fair Value Cost Millions of Yen Fair Value 2008 Thousand of U.S. Dollars Cost Fair Value Corporate...

  • Page 30
    ... sale of a business, the operating results from the discontinued operations have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" from fiscal year 2003 to 2006. 29 ANNUAL REPORT 2008

  • Page 31
    ...519 688,026 174,519 64,326 106,224 5,500 111,724 85,800 89,632 ¥2,219,989 1,292,262 746,221 174,669 63,396 106...29.50 13.95 ANNUAL REPORT 2008 30 Financial Section Brand Strategy CSR Environmental Management Corporate Governance Business Strategy Highlights To Our Shareholders and Customers

  • Page 32
    Consolidated Balance Sheets Ricoh Company, Ltd. and Consolidated Subsidiaries March 31, 2007 and 2008 ASSETS Current assets: Cash and cash equivalents Time deposits Trade receivables: Notes Accounts Less- Allowance for doubtful receivables Current maturities of long-term finance receivables, net ...

  • Page 33
    ...,238 (31,005) (45,849) 1,080,196 ¥2,214,368 1,353,640 1,864,480 8,352,380 (310,050) (458,490) 10,801,960 $ 22,143,680 ANNUAL REPORT 2008 32 Financial Section Brand Strategy CSR Environmental Management Corporate Governance Business Strategy To Our Shareholders and Customers

  • Page 34
    Consolidated Statements of Income Ricoh Company, Ltd. and Consolidated Subsidiaries For the Years Ended March 31, 2006, 2007 and 2008 2006 Millions of Yen 2007 2008 Thousands of U.S. Dollars 2008 Net sales: Products Post sales and rentals Other revenue Total ¥1,108,746 693,138 107,354 1,909,...

  • Page 35
    Consolidated Statements of Shareholders' Investment To Our Shareholders and Customers Millions of Yen Ricoh Company, Ltd. and Consolidated Subsidiaries For the Years Ended March 31, 2006, 2007 and 2008 Common stock Additional paid-in capital ¥ 186,551 (101) Retained earnings ¥ 584,515 (16,178...

  • Page 36
    ... of long-term debt securities Dividends paid Payment for purchase of treasury stock Other, net Net cash provided by (used in) financing activities CASH FLOWS OF DISCONTINUED OPERATIONS: Net, operating cash flows Net, investing cash flows Net, financing cash flows Effect of exchange rate change on...

  • Page 37
    ...not only Ricoh brand products but also other brands, such as Gestetner, Lanier and Savin. Ricoh manufactures its products primarily in 15 plants in Japan and 6 plants overseas, which are located in the United States, United Kingdom, France and China. 2. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES...

  • Page 38
    ...manages its exposure to certain market risks, primarily foreign currency and interest rate risks, through the use of derivative instruments. As a matter of policy, Ricoh does not enter into derivative contracts for trading or speculative purposes. In accordance with Statement of Financial Accounting...

  • Page 39
    ...-average number of shares of ANNUAL REPORT 2008 38 Financial Section Sustainable Environmental Management Corporate Governance / CSR (o) Research and Development Expenses and Advertising Costs Fiscal 2008 Milestones 16th Mid-Term Management Plan The related future minimum lease payments and...

  • Page 40
    ...for the years ended March 31, 2007 and 2008. Corporate Tax Law. However, based on an evaluation of residual values realized from disposition of property, plant and equipment, Ricoh concluded that the residual value of substantially all long lived assets is negligible at the end of useful life. This...

  • Page 41
    ... venture company (now known as InfoPrint Solutions Company, LLC) which was spun-out from on IBM's Printing Systems Division to provide output solutions for production printing area. InfoPrint Solutions Company, LLC will benefit from access to IBM's powerful worldwide distribution and sales network...

  • Page 42
    ... the Company acquired the European operations of Danka Business Systems PLC ("Danka's European operations") for total cash consideration of ¥27,132 million including direct acquisition costs. Ricoh made the acquisition to strengthen its sales and service network in major countries in Europe. Ricoh...

  • Page 43
    ... Mid-Term Management Plan Fiscal 2008 Highlights 2009 2010 2011 2012 2013 2014 and thereafter ¥ 216,434 178,680 129,159 79,217 33,348 8,360 $ 2,164,340 1,786,800 1,291,590 792,170 333,480 83,600 Ricoh sold finance lease receivables in prior years through securitization transactions. The value...

  • Page 44
    ... 2008 Thousands of U.S. Dollars 2008 Marketable securities: Available-for-sale securities Investment securities: Available-for-sale securities Non-marketable equity securities ¥ 177 ¥ 0 $ 0 ¥70,362 4,474 ¥74,836 ¥69,962 1,282 ¥71,244 $699,620 12,820 $712,440 43 ANNUAL REPORT 2008

  • Page 45
    ... months or longer Gross unrealized Fair value holding losses Total Corporate Governance / CSR 2008: Noncurrent: Available-for-sale: Equity securities Corporate debt securities 16th Mid-Term Management Plan ¥ 177 Non-current: Equity securities ¥49,261 Corporate debt securities 6,000 Other 242...

  • Page 46
    ...-for-sale securities for the years ended March 31, 2006, 2007 and 2008. Effective October 1, 2005, UFJ Holdings, Inc. ("UFJ") and Mitsubishi Tokyo Financial Group, Inc. completed a merger, in which the UFJ shares of common stock owned by the Company were exchanged for shares of common stock of...

  • Page 47
    ... back-office information systems. ANNUAL REPORT 2008 46 Financial Section Sustainable Environmental Management Corporate Governance / CSR Fiscal 2008 Milestones Thousands of U.S. Dollars 2008 Gross carrying Accumulated amount amortization Net carrying amount 16th Mid-Term Management Plan...

  • Page 48
    ... 2010 2011 2012 2013 ¥22,618 18,375 15,302 13,536 9,989 $226,180 183,750 153,020 135,360 99,890 As of March 31, 2008, all of the carrying value of goodwill was allocated to the Office Solutions segment. The changes in the carrying amounts of goodwill for the years ended March 31, 2007 and 2008...

  • Page 49
    ... loss carryforward not previously recognized Tax credit for increased research and development expense Other, net 41% 0 2 (2) (4) (0) 41% 0 1 (1) (3) (1) 41% 1 2 (3) (4) (1) 16th Mid-Term Management Plan Fiscal 2008 Highlights ¥56,165 1,398 ¥64,326 4,196 ¥63,396 - $633,960 - To Our...

  • Page 50
    ... related to unrecognized tax benefits in income taxes in the consolidated statements of income. Both interest and penalties accrued as of March 31, 2008 and interest and penalties included in income taxes for the year ended March 31, 2008 are not material. Ricoh files income tax returns in Japan...

  • Page 51
    ... and 2008, respectively. The Company and certain of its subsidiaries enter into the contracts with financial institutions regarding lines of credit and overdrawing. Those same financial institutions hold the issuing programs of commercial paper and medium-term notes. Ricoh had aggregate lines of...

  • Page 52
    ... of year Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Employer contribution Plan participants' contributions Settlement Benefits paid Foreign exchange impact Plan assets acquired in connection with business acquisition Fair value of plan assets...

  • Page 53
    ... Sustainable Environmental Management Discount rate Rate of compensation increase Expected long-term return on plan assets 3.0% 5.0% 3.2% 2.8% 5.4% 3.1% 3.1% 5.3% 3.2% 16th Mid-Term Management Plan Fiscal 2008 Highlights Lease deposits and other Accrued expenses and other Accrued pension and...

  • Page 54
    .... Ricoh addresses diversification by the use of mutual fund investments whose underlying investments are in domestic and international fixed income securities and domestic and international equity securities. These mutual funds are readily marketable and can be sold to fund benefit payment...

  • Page 55
    ...Sustainable Environmental Management Corporate Governance / CSR Fiscal 2008 Milestones ¥24,724 ¥ 50 ¥24,774 16th Mid-Term Management Plan 2006: Foreign currency translation adjustments Unrealized gains (losses) on securities: Unrealized holding gains (losses) arising during the year Less...

  • Page 56
    ...800) (108,050) (5,770) (113,820) $(580,030) For fiscal year 2008, pension ...balance Change during the year Ending balance Unrealized gains (losses) on derivatives: Beginning balance Change during the year Ending balance Minimum pension liability adjustments: Beginning balance Change during the year...

  • Page 57
    ... (250) 16th Mid-Term Management Plan Thousands of U.S. Dollars 2008 Fiscal 2008 Highlights Weighted average number of shares of common stock outstanding 733,434 Effect of dilutive securities: Euro Yen Zero Coupon Convertible Bonds -Due December 2011 - To Our Shareholders and Customers

  • Page 58
    ..., under cancelable and non-cancelable operating lease agreements for office space and machinery and equipment. The minimum rental payments required under operating lease that have lease terms in excess of one year as of March 31, 2008 are as follows: As of March 31, 2008, the Company and certain...

  • Page 59
    ... in the summary of significant accounting policies, as discussed in Note 2. Ricoh's operating segments are comprised of Office Solutions, including copiers and related supplies, communications and information systems, Industrial Products, including thermal media and semiconductors, and Other...

  • Page 60
    ...U.S. Dollars 2008 2006 2008 Sales: Office Solutions Industrial Products Other Intersegment transaction Consolidated Operating expenses: Office Solutions Industrial Products Other Intersegment transaction Unallocated expense Consolidated Operating income: Office Solutions Industrial Products Other...

  • Page 61
    ... ANNUAL REPORT 2008 60 Financial Section Sustainable Environmental Management Corporate Governance / CSR Fiscal 2008 Milestones Sales: Japan The Americas Europe Other 16th Mid-Term Management Plan Fiscal 2008 Highlights Depreciation: Office Solutions Industrial Products Other Corporate...

  • Page 62
    ... Exchange Law, which a Japanese public company is subject to. Thousands of U.S. Dollars 2008 2006 Millions of Yen 2007 2008 Sales: Japan External customers Intersegment Total The Americas External customers Intersegment Total Europe External customers Intersegment Total Other External customers...

  • Page 63
    ... for the years ended March 31, 2006, 2007 and 2008: Millions of Yen 2007 Thousands of U.S. Dollars 2008 2006 2008 ANNUAL REPORT 2008 62 Financial Section Sustainable Environmental Management Corporate Governance / CSR Fiscal 2008 Milestones 16th Mid-Term Management Plan Research and...

  • Page 64
    ...of Ricoh's internal control over financial reporting as of March 31, 2008 an assessment of internal control over financial reporting of InfoPrint Solutions Company, LLC (a joint venture company with IBM which commenced its operations on June 1, 2007), except for the goodwill and intangibles relating...

  • Page 65
    Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Ricoh Company, Ltd.: We have audited the accompanying consolidated balance sheets of Ricoh Company, Ltd. (a Japanese corporation) and subsidiaries as of March 31, 2007 and 2008, and the related ...

  • Page 66
    ...). Ricoh Company, Ltd. acquired InfoPrint Solutions Company, LLC during the year ended March 31, 2008, and management excluded from its assessment of the effectiveness of Ricoh Company, Ltd. and subsidiaries' internal control over financial reporting as of March 31, 2008, InfoPrint Solutions Company...

  • Page 67
    ... create new value for the world at the interface of people and information Our Goal To be a good global corporate citizen with reliability and appeal Our Principles To think as an entrepreneur To put ourselves in the other person's place To find personal value in our work ANNUAL REPORT 2008 66

  • Page 68
    ... Conduct by revising the Ricoh Business Code of Conduct to reflect more responsible corporate activities that achieve harmony with society and the global environment together with the establishment of the Ricoh Group CSR Charter. Please refer to Ricoh's Web site for details. 67 ANNUAL REPORT 2008

  • Page 69
    ... (Malaysia) Sdn. Bhd. New Zealand Ricoh New Zealand Limited Philippines Ricoh (Philippines), Inc. Singapore Ricoh Asia Pacific Pte Ltd. Ricoh Printing Systems Singapore Pte Ltd. Thailand Ricoh (Thailand) Ltd. Taiwan Ricoh Hong Kong Ltd. Taiwan Branch The Americas Production Mexico Ricoh Industrial...

  • Page 70
    Senior Management As of June 26,2008 Board of Directors Representative Directors Masamitsu Sakurai (Chairman of the board) Shiro Kondo Executive Officers Chairman Masamitsu Sakurai Group Executive Officers Makoto Hashimoto Yuji Inoue Hideko Kunii Shiroh Sasaki Hiroshi Tsuruga Kohji Sawa Norihisa ...

  • Page 71
    ... Corporate Headquarters Ricoh Building, 8-13-1 Ginza, Chuo-ku, Tokyo 104-8222 Japan Tel: +81-3-6278-2111 Fax: +81-3-6278-2997 Date of Establishment February 6, 1936 Number of Shares Authorized 1,500,000,000 shares Number of Shares Issued (as of March 31, 2008) 744,912,078 shares Stock Listings Tokyo...

  • Page 72
    ...://www.ricoh.com.cn/ â- Ricoh Company, Ltd. IR Department, Corporate Communication Center Ricoh Building, 8-13-1 Ginza, Chuo-ku, Tokyo 104-8222 Japan Phone: +81-3-6278-5254 Facsimile: +81-3-3543-9329 e-mail [email protected] http://www.ricoh.com/ir/ This report uses waterless printing, which...

  • Page 73
    ... and thoughts will help us produce even better and easier to understand Annual Reports. Please answer the questions on the other side of this page and fax it to us at the number below. Fax: +81-3-3543-9329 Ricoh Bldg., 8-13-1 Ginza, Chuo-ku, Tokyo 104-8222, Japan IR Department, Ricoh Co., Ltd.

  • Page 74
    ...8. 9. 10. 11. Institutional investor Analyst Individual investor Consultant Customer of the Ricoh Group Business person Corporate IR staff Business partner of the Ricoh Group Media representative Government/public administration Employee of the Ricoh Group or family member of employee 12. Student 13...