Ricoh Mid-term Management Strategy March 18, 2008 Shiroh Kondoh President and CEO Ricoh Company, Ltd.
Agenda 1.×× ×× ××
15th Mid-term Plan Review Business Environment 16th Mid-term Plan Outline 2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
1
March 18, 2008
15th Mid-term Plan Review
15th MTP Strategies (1) Growth Strategy
Growth Strategy Structure
ＧＪ Ｉｎｄｕｓｔｒｉａｌ
Ｏｔｈｅｒｓ
Growth Core
Choice & Focus
Technology Differentiation Differentiation High-efficient Ultra Low-cost Operation Management Efficient Capital Usage
ＬＰ
Profit Engine
Positive Investment for Growth strategy
Solutions
Sales and Profit Expansion
Corporate Value Increasing
Ｏｆｆｉｃｅ Creating Customer Value
ＭＦＰ
Structural Reform 2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
3
March 18, 2008
15th MTP Strategies (2)
Growth Area in Printing Business Document ■成長戦略 Production Growth area Volume
Printing
High
Office Growth area High-end - High speed
B to C transition
- Solutions
Ｄ Ｏ+ LP MFP /Ｐ
Mid
Expanding profit
Channel enhancement
Low Growth area GELJET printer Low-end MFP&LP
Office Low-end
Growth area Market
Business Personal
Host printing 2008/3/25 /Production
Office
4
Strategy Execution
Color MFP Full line-up
imagio MP C1600 Series
imagio MP C2500/3000 C2500/3000 Series
imagio MP C3500/4500 C3500/4500 Series
imagio MP C7500 Series
No.1 market share for A3 MFP (Japan/US/Europe) as 2006 unit share of color & B/W total ＊Manufacture-based (source : Ricoh)
J.D Power No.1 for 5 categories (Japan) -
Color laser printers (’06 & ’07) Black and white laser printers (’07) Color copier/MFP (’07) Black and white copier/MFP (’07) Solution provider* (’06 & ’07) *Award for Ricoh Technosystems Co.
2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
5
March 18, 2008
Strategy Execution Enter Production Printing business Oct, 2004 Dec, 2006 Jun, 2007
Acquired Hitachi Printing Solutions Acquired Danka European Business(Infotec) IPS* (JV) established by Ricoh and IBM
*InfoPrint Solutions Company
High speed MFP Cut sheet laser printer Continuous paper printer 2008/3/25
6
Strategy Execution
Competitive low-end products launched - Color laser printer
16ppm for color & BW, affordable, compact and stylish
[ SP C220 ]
[ SP C221S/SF ]
(MFP)
- Gelsprinter
low-cost color printing / waterproof and sun-resistant capability pigment ink
[ GX 2500 ]
[ GX 7000 ] (A3-wide paper)
[ GX 3000SF ]
(MFP)
2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
7
March 18, 2008
Structural Reform Process restructuring for solutions sales
- Established Technology Center in Japan/US/Europe/AP
customer needs search, customization and providing regional solutions
Efficiency improvement
- Japan : sales company integration, service company integration and IT system renewal - The Americas : sales company integration and IT system renewal - Europe : sales company integration and IT system renewal (ongoing)
Established Competitive sales structure
- Solution based sales structure: providing TCO, security, compliance, work-flow improvement, environment solutions - Established sales structure for Global Major Account 2008/3/25
8
Structural Reform
Ricoh Technology Center leads development process innovation - Commended by Nippon Keizai Shimbun 5 policies for “Create without Making” Reduce custom-made parts
Comparison with past model
Products comparison 14th --> 15th MTP
Visualization
[P&M type de velopment, part-module sharing]
Reinforce HR capability
Create with fewer prototypes [3-dimension design]
[Personnel training]
Developing period
5 policies
Creating High Robust Product [Scientific design]
(C)2008 Ricoh Company, Ltd. All rights reserved.
Create and utilize design resources [Information management]
Prototype units created
down
32% down
65% 2008/3/25
9
March 18, 2008
Structural Reform Development of ultra-low cost production and cost reduction - Development of unique Ricoh production systems *MB&R：Modular Build & Replenishment - Configuration and MB&R > Reducing Inventories and logistic cost > Shortening lead-times and installation time
- Established polymerized toner production
2008/3/25
10
Strategy Execution Growth of Industrial products and Others - Thermal Media Business
> Big sales growth in China > Established new plant in China
- Semiconductor Business
> WW top market share of power IC for mobile devices
- Digital Camera Business
> Creating high-end compact market GR DIGITAL : “Camera Grandprix 2006 special prize”
GR DIGITAL
Caplio GX100 : “iF product design award 2008 Gold prize” Caplio GX100 2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
11
March 18, 2008
Environmental Management Reducing the environmental impact of “overall operations” though partnerships with suppliers and customers.
< Examples > Frontend
- Adoption of plant-based plastic parts - Reuse and recycle of products
RICOH
- Shift to cart-pushing production from belt-line - On-demand toner filler - Zero-waste on all production sites - Low energy consumption products - Resource recirculating eco-packaging
Customer
12
2008/3/25
15th MTP Target and forecast Sales : target almost achieved Operating income : could not achieved target (billions of yen)
Sales
(billions of yen)
2,500
Operating income
250
200
Results
Results
100
135.5
Results
148.5
8.4%
Forecast
174.3
150
11% 188.0
OP margin
1,000
12%
Target
Forecast
Results
Results
1,500
Results
1,815.0
Target
2,068.9 1,909.2
2,000
OP margin(%)
235.0
2,310.0 2,250.0
10%
9%
8.4% (forecsst)
8%
7.8% 7.5% 7%
500
50 6%
0
5%
0
FY05/3
FY06/3
FY07/3
(C)2008 Ricoh Company, Ltd. All rights reserved.
FY08/3
FY05/3
FY06/3
FY07/3
FY08/3 2008/3/25
13
March 18, 2008
Business Environment
Social Concern of world economy recession Deepening environmental concerns
- Higher priority on environmental issues - Global warming became an issue for IT industry
Persistent CSR problems Global capital markets require more for corporate value maximizing 2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
15
March 18, 2008
Business Customer value shift
- hardware-centric business to solutions
Accelerating MFP & LP market fusion
- Propose appropriate choice of functions (scanning, color or B/W, A3 or A4)
Dealer acquisition
- Strengthening direct sales channel
2008/3/25
16
Customer value shift
From hardware-centric business to solutions Product
Value chain changes
Group companies
"Think customer first" 1) Network 2) Workflow 3) Security 4) Environment 5) User interface 6) Post PCs Divisions
Middleware
…
Customer value
Applications
Customer value
Solutions services
Future keywords Output
2008/3/25
17
Hardware
Source: ©2007 IGNITE Group. data
(C)2008 Ricoh Company, Ltd. All rights reserved.
March 18, 2008
16th Mid-term Plan Outline (FY09/3 - FY11/3)
RICOH Group Long Term Vision
Business domain
To create innovative solutions for the information society, based on RICOH values [ RICOH values ] Harmonize with the environment, Simplify your life & work, Support knowledge management
Goal
To be a leader in the 21st century “Build a strong Global RICOH Brand” 1. Provide world class products and services
Customer
2. Develop rock-solid customer relationships
Employee
3. Promote an attractive and vibrant corporate culture
Shareholders Society
4. Focus on financial performance 5. Be an outstanding corporate citizen
Corporate Value Increasing
Customer
2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
20
March 18, 2008
16th MTP Basic concept “New customer value creation” and “Efficiency improvement”, are being achieved. 16th MTP includes
1) Be sure to reap results 3) Further growth
2) Efficiency improvement
16th MTP
Operating income
15th MTP
15th MTP target : ¥ 235 billion FY08/3 forecast : ¥ 188 billion - Large-scale investment into streamlining - Sales channel integration - IPS acquisition - Danka Europe acquisition - Development sites integration
FY06/3
FY07/3
FY08/3
1) Be sure to reap results From 15th MTP implementation
FY09/3
2) Efficiency improvement 3) Further growth
FY10/3
2008/3/25 FY11/3
FY
21
Strategies 1 Become No.1 in target business areas 2 Accelerate environment management 3 Promote Ricoh Quality 4 Create new growth area 5 Build a strong global RICOH brand 2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
22
March 18, 2008
Strategies 1 Become No.1 in target business areas 2 Accelerate environment management 3 Promote Ricoh Quality 4 Create new growth area 5 Build a strong global RICOH brand 2008/3/25
23
1 Become No.1 in target business areas
Creation of new customer value based on our current businesses Ricoh’s strengths Environmental Environmental Management Management Solution Solution proposal proposal capability capability
４Ｆ
IT IT performance performance capability capability
Document Solutions
Globalized Globalized uniform uniform support support
Orientation of values
Solution Solution Platform Platform
３Ｆ
Customization Customization capability capability
Printing Solutions ２Ｆ
Network Network Administration Administration System System
Network Devices Service Supprt Supply
Global Global sales sales channels channels
Full Full lineup lineup Digital Digital and and network network prioritization prioritization
１Ｆ Stand Alone Devices
(C)2008 Ricoh Company, Ltd. All rights reserved.
CS/customer CS/customer contact contact capability capability Imaging Imaging and and data data processing processing integrated integrated technology technology 2008/3/25
24
March 18, 2008
1 Become No.1 in target business areas Entering PP business : business chance growing by market change Market Change by Technology Advancement Open&Downsizing New Application (VDP, BOD, etc)
Standardizing Workflow & Print Assurance Print Quality & Reliability VDP： Ｖａｒｉａｂｌｅ Data Printing BOD： Book On Demand TDV： Total Document Volume
Corporate Printing General Office
iv. Host print downsizing Aiming host and downsized printing
Commercial Printing
Production Printing Market iii. Print outsourcing
Data Center Transaction Billing Financialii.
OA Products
In Plant
PFP
Aiming Transpromo market
Digital Printer Transaction Billing Statement
TDV up by integrating transaction print & POD POD Manual Name Card
POD Catalog Brochure
POD DM Book
i. Offset printing transition Aiming Color POD market
Commercial Printing ( Offset Printing ) 2008/3/25
25
1 Become No.1 in target business areas
Industrial Products and Others Targeting growth areas
- Thermal Media Business > Expanding in Emerging Market > Providing high-value added solutions to developed areas
- Semiconductor Business
> Maintain top share of power IC for mobile devices > Grow in new power IC for digital consumer electronics
- Digital Camera Business
> Expand High-end compact DC market
2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
26
March 18, 2008
Strategies 1 Become No.1 in target business areas 2 Accelerate environment management 3 Promote Ricoh Quality 4 Create new growth area 5 Build a strong global RICOH brand 2008/3/25
27
2 Accelerate environment management Reinforce and accelerate our environmental management [ Ricoh environmental management ] 2. Energy saving, recycling
1. Energy saving, prevention of global warming
[ Action ]
Technology Development
3. Pollution prevention Products active domain
Office active domain
Fundamentals of environmental management ・Environmental management system ・Environmental management information system ・Environmental accounting ・Eco-balance, etc.
Lifecycle Management “Resource/Energy” manegement for products lifecycle
Providing Ricoh’s activity to customer 2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
28
March 18, 2008
Strategies 1 Become No.1 in target business areas 2 Accelerate environment management 3 Promote Ricoh Quality 4 Create new growth area 5 Build a strong global RICOH brand 2008/3/25
29
3 Promote Ricoh Quality Accelerating Process Innovation Astonish our customers Future
Past
Value chain change
Impressed users
Customer value by satisfaction
Satisfied buyers
Usability and other
CS
[ Items ]
Strengthening Marketing R&D Management Reform Strengthening co-operation between processes Accelerating development process innovation 2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
30
March 18, 2008
Strategies 1 Become No.1 in target business areas 2 Accelerate environment management 3 Promote Ricoh Quality 4 Create new growth area 5 Build a strong global RICOH brand 2008/3/25
31
4 Create new growth area
Ricoh’s DNA : Innovation & Growth l ma er ia h T ed M
x Fa
ra me Ca
ed it iz ns r Se ape p
g alo r n A pie Co
al gi t a Di me r Ca
ic s ctr nt Ele one mp Co
MF
P
mi s Se c tor du n co al tic Op n its U
LP
(C)2008 Ricoh Company, Ltd. All rights reserved.
er int r P 2008/3/25
32
March 18, 2008
Strategies 1 Become No.1 in target business areas 2 Accelerating environment management 3 Promote Ricoh Quality 4 Creating new growth area 5 Build a strong global RICOH brand 2008/3/25
33
5 Build a strong global RICOH brand
Impress customers with Ricoh Quality and our commitment to the environment.
Customer & Society RICOH Values
Providing 3 values to customers
Promise >Trust >RICOH Brand
Harmonize with the environment
Simplify your life & work
Support knowledge management 2008/3/25
(C)2008 Ricoh Company, Ltd. All rights reserved.
34
March 18, 2008
16th MTP Targets ( $=¥105、euro=¥155 )
Sales :
(FY2011/3)
¥
Operating income : (FY2011/3)
2,500.0 billion ¥
250.0 billion
Operating margin :
10.0 %
ROE :
12.5 %
Dividends payout ratio :
30.0 %
(FY2011/3)
(FY2011/3)
(Long-term target)
(C)2008 Ricoh Company, Ltd. All rights reserved.
2008/3/25
35
March 18, 2008
