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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Ricoh Company, Ltd.    7752   JP3973400009

RICOH COMPANY, LTD.

(7752)
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Ricoh : Positioning FY2020 and Accelerating Transformation

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05/08/2020 | 03:54am EDT

Positioning

FY2020 &

Accelerating

Transformation

May 8, 2020

Jake Yamashita

President and CEO Ricoh Company, Ltd.

©2020 Ricoh Company, Ltd. All RightsReserved

Forward-Looking Statements

The plans, prospects, strategies and other statements, except for the historical events, mentioned in this material are forward-looking statements with respect to future events and business results. Those statements were made based on the judgment of Ricoh's Directors from the information that is now obtainable. Actual results may differ materially from those projected or implied in such forward-looking statements and from any historical trends. Please refrain from judging only from these forward-looking statements with respect to future events and business results. The following important factors, without limiting the generality of the foregoing, could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements:

a. General economic conditions and business trend b. Exchange rates and their fluctuations

c. Rapid technological innovation

d. Uncertainty as to Ricoh's ability to continue to design, develop, produce and market products and services that achieve market acceptance in hot competitive market

No company's name and/or organization's name used, quoted and/or referenced in this material shall be interpreted as a recommendation and/or endorsement by Ricoh.

This material is not an offer or a solicitation to make investments. Please do not rely on this material as your sole source of information for your actual investments, and be aware that investments decisions are your responsibility.

Note: In this document, fiscal years are defined as follows:

FY2019 = Fiscal year ended March 31, 2020, etc.

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

1

Positioning FY2020

A year of "Emergency Response & gearing up" to prepare for "Lift Off"

The 19thMTP

The 20thMTP

FY2017 -

FY2018 - FY2019

FY2020

FY2021 - FY2022

Resurgent

Ignite

Enhance our strengths

Pursue high targets

and refine our

companywide

implementation

in steering toward

capabilities to deliver

growth

growth

Key 1

pointsLiquidity

Emergency

Lift Off

Response

&

Ensure sustainable

Gearing Up

growth and further

progress

23Accelerating

Financial stability

transformation

for the 'new normal'

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

2

1. Securing liquidity to deal with business fluctuations

Securing liquidity to deal with a 30% drop in annual sales

FY2019

IR presentation

Page. 15

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

3

2. Improving financial stability

Improving financial stability and reducing both risk assets and debt through the de-consolidation of Ricoh Leasing

billions of yen

Liabilities

Asset

& Equity

Lease asset

Debt

10,013

9,334

Shareholder's

equity*

Equity ratio

9,325

34.2

Total assets: 2.7 trillion JPY

Balance Sheet as at March 2019

Liabilities

Asset

& Equity

Lease asset 2,243

Debt

1,796

Shareholder's

equity*

Equity ratio

9,202

52.8

Total assets:1.7 trillion JPY

Balance Sheet as at March 2020

(excluding Ricoh Leasing asset)

*Shareholder's equity: Equity attributable to owners of the parent

4

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

Uncertainty of FY2020 outlook

  • The impact of coronavirus is uncertain - both its magnitude and duration
  • Implementing initiatives to recover profit, yet unable to see FY2020 outlook

FY20 outlook

FY19 OI

Ricoh Leasing

Emergency

The impact of

Additional

(Excl. the impact of

De-consolidation

response &

coronavirus

initiatives

Gearing Up

coronavirus)

94.7

Approx. 18

Approx. 25

Uncertain

X

=

TBD

billion JPY

billion JPY

+α

billion JPY

Ref: assumption of operating income

Recovery from

OI impact

A

from-30billion JPY

Q2 onwards

to-40billion JPY

OI impact

Recovery from

B

from-60billion JPY

2H onwards

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

to-70billion JPY

5

3. Accelerating transformation for the 'new normal'

From an Office automation equipment manufacturer to a

Digital services company

A company that supports workers' creativity and provides services to meet changing workplaces

Expected changes in society, markets and customers

  • Greater emphasis on a more sustainable economy
  • From paper to electronic data in the document market
  • The borders of when and where we work will disappear
  • Shift in importance to feeling valued and new ways of working (workstyles)
    → increase in gig workers and sole traders
  • Routine tasks will be automated and thereby reducing manpower

→people shift to focusing on more creative work

The spread of COVID-19 has forcibly

accelerated a change to working practices

What we now need to accelerate is to:

(1) Grow out of being a manufacturer

(2) Provide digital services

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

6

3-(1) Grow out of being a manufacturer

Seeing the world of work now that we anticipated happening during "Ricoh Lift Off" has accelerated a change to our value proposition

Value proposition centered on an MFP

Provide vertical solutions

for each workplace

A manufacturer that

A company with a deep

makes best-in-class

understanding of the issues

devices

associated with customers'

Ricoh's initiatives

business process

  • Comprehensively reform the value chain, which was optimized for our MFP business
    • Prioritize development and production focus to

provide best-in-class devices

16billion JPY

 Expand procurement and supply OEMs

  • Improve productivity in sales and service operations
  • Optimize locations and organizational structure etc.
  • Promote efficiency through our digital revolution

Digitalize business processes in headquarters

9billion JPY

Strengthen digital manufacturing

etc.

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

7

3-(2) Provide digital services

Ricoh's digital services include IT infrastructure, connecting workflows

through digitalizing and providing new workstyles

Value proposition

IT infrastructure

Digitalizing workflows

New workstyles

Digitalizing frontlines

Execution / main products & services

Connectto workplaces

RICOH

IT services + edge devices

Smart Cloud

Connectto workflows

Integration Platform

Connectto workers

Microsoft 365, Meeting room services

(RSI)

Digital transformation

on the frontlines

Work- places

Offices

Home

Frontlines

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

8

3-(2) Provide digital services

Services that digitalize diverse workplaces

Revealed by coronavirus: The importance of workplace digitalization.

Home

Enable workers to use systems that were previously only available in offices

Application services to overcome

Offices

Manage digital workflows

between offices and frontlines

Issues with business processes

Frontlines

4

1

2

Digitalize facts from

the frontlines

3

Automatically

Automatically

issue invoices

digitalize invoices

to customers Customers

Supplierscoming from

suppliers

Reduce stress between from frontlines and offices, from process to process, from

offices and offices and from offices and home

Key words are"Remote" and"Automated"

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

9

3-(2) Provide digital services

Implementation in Japan: A lot of vertical applications

Extracted from Growth strategy "Ricoh Ignite" issued on Feb. 6th, 2018

Customers

Edge devices

Value source

Connect offices and frontlines

Applications/solutions

Value source

Solutions from Ricoh and partners

Platform

Value source

Platforms by data source

Unified platform to enable data transactions

Customer access/support

Value source

Customer base (1.4M/Worldwide)sales/support network

Remote working applications

Remote

  • Work from home pack

+Adding a service package that provides secure printing (plan to release by the end of May 2020)

Auto-

Vertical applications

mated

  • Forwell-being, a security and safety package

Monitoring visitors using 3D sensors to prevent incidents

 Construction

 Real estate

  • Manufacturer  Healthcare

 Logistics

 Tourism

Plan to release 108 packages (10 verticals + 1

business process) in early June

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

10

3-(2) Provide digital services

Implementation overseas: Packaged services for "remote" work

Extracted from Growth strategy "Ricoh Ignite" in Feb. 6th, 2018

Remote working service

Remote

Value source

Connect offices and frontlines

Applications/solutions

Value source

Solutions from Ricoh and partners

Platform

Value source

Platforms by data source

Unified platform to enable data transactions

Customer access/support

Value source

Customer base (1.4M/Worldwide)sales/support network

  • A packaged service to provide laptops, printers as well as a guidebooks, training and support
  • Large insurance company in UK had to shift all employees to remote working due to the virus.
  • Ricoh UK provided all devices
    (Thousands of tablets, smartphones and headsets)
  • Established the IT network and security protocols

Virtual classroom service

Remote

  • A package of devices and software to provide remote classrooms
  • Ricoh Italy provided the service on a30-day free trial basis to schools/universities
  • Teachers can easily host a classroom session through the video conferencing system
  • Students can access the classroom from their computers, tablets or smartphones

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

11

3-(2) Provide digital services

Digital needs addressed on the frontlines

"Remote"and "Automated"are required even in frontlines

Frontlines

Needs

Value proposition

Products/services

Real

• Need to experience a

• Provide remote property viewings

Virtual Tour

estate

property without

by digitalizing 360 degree images

going on-site

of rooms using THETA

Services

Social

• Prioritize maintenance

• Capture road surface data

Road inspection

based on road

using our stereo camera

infrastructure

system

conditions

mounted on motorcar

• Need to minimize

• Provide DNA standard template

Standard DNA series of reference

Hospitals

secondary infections by

to improve accuracy of PCR

DNA plates that overcome the

accurately identifying

testing

challenges with PCR testing

infected individuals

• Need to have a highly

• Provide packaged services

Schools

interactive classroom

that include hardware and

Virtual Classroom

experience, even during

software to enable remote

Services

lockdown

classrooms

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

12

Execution Plan & communication with capital markets

IR

Board

meeting

Emergency

Project

Business Unit

  • Present current status of initiatives to capital markets quarterly
  • Announce the 20thMid Term Management Plan at the appropriate time
  • Monitor management and initiatives
  • Support strategy and policy implementation with flexibility

Executive directors (Yamashita, Matsuishi and Sakata) are in charge of Emergency Project

1. Liquidity

2. Financial stability

3. Accelerating transformation

for the "new normal"

May 8, 2020

(C)2020 Ricoh Company, Ltd. All Rights Reserved

13

Disclaimer

Ricoh Company Ltd. published this content on 08 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2020 07:53:03 UTC

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Financials
Sales 2020 1 993 B 18 539 M 18 539 M
Net income 2020 58 306 M 542 M 542 M
Net Debt 2020 714 B 6 647 M 6 647 M
P/E ratio 2020 10,0x
Yield 2020 3,40%
Capitalization 560 B 5 209 M 5 210 M
EV / Sales 2019
EV / Sales 2020 0,64x
Nbr of Employees 90 000
Free-Float 93,8%
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Technical analysis trends RICOH COMPANY, LTD.
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 1 010,21 JPY
Last Close Price 773,00 JPY
Spread / Highest target 81,1%
Spread / Average Target 30,7%
Spread / Lowest Target -2,98%
EPS Revisions
Managers
NameTitle
Yoshinori Yamashita President, CEO & Representative Director
Nobuo Inaba Chairman
Hidetaka Matsuishi CFO, Director & GM-Business Planning Division
Seiji Sakata Director & Chief Technology Officer
Hisao Murayama Managing Executive Officer & GM-Quality Technology
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