Ricoh 2010 Annual Report Download - page 35

34
ANNUAL REPORT 2010
To Our Shareholders
and Customers
Corporate Social
Responsibility
Financial
Section
Fiscal 2010 Highlights
and Progress of MTP
RICOH NOW
to fiscal year 2009) as well as the net effect of the depreciation of
the U.S. Dollar and the Euro in relation to the Japanese Yen (which
decreased selling, general and administrative expenses by ¥32.1
billion as compared to fiscal year 2009). Such decreases fully offset
the increase in expenses that resulted from reflecting a full fiscal
year of expenses incurred by IKON for the first time (which
increased selling, general and administrative expenses by ¥68.8
billion as compared to fiscal year 2009).
Operating income:
Consolidated operating income for fiscal year 2010 decreased by
11.5% (or ¥8.5 billion) to ¥65.9 billion from ¥74.5 billion for fiscal
year 2009. Operating income as a percentage of net sales decreased
by 0.3 percentage points from 3.6% for fiscal year 2009 to 3.3% for
fiscal year 2010. This decrease in operating income compared to
fiscal year 2009 was due primarily to the decrease in gross profit
resulting from the decrease in net sales, which was partially offset
by the decrease in selling, general and administrative expenses, as
group-wide cost reduction efforts in R&D, manufacturing and sales
operations contributed to a decline in such expenses.
Interest and dividend income:
Consolidated interest and dividend income for fiscal year 2010
decreased by ¥1.7 billion to ¥3.4 billion from ¥5.2 billion for fiscal
year 2009. This decrease in interest and dividend income was
attributable to lower interest rates reflecting the adverse financial
market conditions on a global basis.
Interest expense:
Consolidated interest expense for fiscal year 2010 increased by
¥2.2 billion to ¥8.1 billion from ¥5.8 billion for fiscal year 2009.
This increase in interest expense reflected the increase in the
average outstanding amount of interest-bearing debt that Ricoh
borrowed from third parties in fiscal year 2010.
Foreign currency exchange (gain) loss, net:
Consolidated foreign currency exchange loss, net included in other
(income) expenses for fiscal year 2010 decreased by ¥10.8 billion
to ¥4.7 billion from ¥15.5 billion for fiscal year 2009. This decrease
was primarily due to the depreciation of the U.S. Dollar and the
Euro in relation to the Japanese Yen.
Loss on impairment of securities:
Consolidated loss on impairment of securities for fiscal year 2010
decreased by ¥26.6 billion to ¥0.1 billion from ¥26.8 billion for
fiscal year 2009. This decrease in loss on impairment of securities
was attributable to the lower volatility in the stock markets as
compared to fiscal year 2009.
Fiscal Year 2010 Compared to Fiscal
Year 2009
Net sales:
Consolidated net sales of Ricoh for fiscal year 2010 decreased by
3.6% (or ¥75.3 billion) to ¥2,016.3 billion from ¥2,091.6 billion for
fiscal year 2009. For fiscal year 2010, Ricoh recorded a decrease in
net sales in all of its operating segments. This decrease was due
primarily to the decrease in customer demand for Ricoh products
resulting from the global economic downturn stemming from the
global financial crisis and the debt crisis in Dubai and Greece.
More specifically, the 3.6% decrease was due primarily to the 6.1%
decrease in sale of products, the 0.3% decrease in sale of post
sales and rentals, and the 8.7% decrease in sales of other revenue.
The net effect of the depreciation of the U.S. Dollar and the Euro in
relation to the Japanese Yen also adversely affected Ricoh’s
consolidated net sales in fiscal year 2010 as compared to fiscal year
2009 in Japanese Yen. Had the foreign currency exchange rates
remained the same as in fiscal year 2009, Ricoh’s consolidated net
sales would have increased by 1.1%.
In addition, while net sales generated by IKON contributed to net
sales during fiscal year 2010, since fiscal year 2010 was the first
fiscal year in which IKON’s results were consolidated into Ricoh’s
financials for a full fiscal period, the contribution made by IKON was
not sufficient to fully offset the decrease in Ricoh’s net sales.
Cost of sales:
Consolidated cost of sales for fiscal year 2010 decreased by 3.5%
(or ¥43.3 billion) to ¥1,193.9 billion from ¥1,237.3 billion for fiscal
year 2009. This decrease was due primarily to the decrease in sales
of products as well as the net effect of the depreciation of the U.S.
Dollar and the Euro in relation to the Japanese Yen.
Gross profit:
Consolidated gross profit for fiscal year 2010 decreased by 3.8%
(or ¥32.0 billion) to ¥822.3 billion from ¥854.3 billion for fiscal year
2009. This decrease in gross profit primarily reflects the decrease
in net sales in Ricoh’s operating segments as well as the net effect
of the depreciation of the U.S. Dollar and the Euro in relation to the
Japanese Yen.
Selling, general and administrative expenses:
Consolidated selling, general and administrative expenses for fiscal
year 2010 decreased by 3.0% (or ¥23.5 billion) to ¥756.3 billion
from ¥779.8 billion for fiscal year 2009. This decrease was
primarily due to group-wide cost reduction efforts in R&D,
manufacturing and sales operations (which decreased selling,
general and administrative expenses by ¥54.0 billion as compared