Ricoh : Financial Announcement

August 4, 2021

QUARTERLY REPORT

First Quarter ended June 30, 2021

(Results for the Period from April 1, 2021 to June 30, 2021)

Performance Outline (Consolidated)

	Three months	Three months
	ended	ended	Change
	June 30, 2020	June 30, 2021
	Results	Results
Domestic sales	159.3	171.3	7.5%
Overseas sales	193.0	253.4	31.3%
Sales	352.3	424.8	20.6%
Gross profit	122.0	152.3	24.8%
Operating profit (loss)	(21.2)	5.6	-
Profit (loss) before income tax expenses	(22.6)	7.6	-
Profit (loss) attributable to owners of the	(18.6)	4.7	-
parent
Exchange rate (Yen/US$)	107.60	109.50	1.90
Exchange rate (Yen/EURO)	118.47	131.92	13.45
Earnings per share attributable to owners of	(25.76)	6.77	32.53
the parent-basic (yen)
Earnings per share attributable to owners of	(25.76)	6.77	32.53
the parent-diluted (yen)
Cash flows from operating activities	27.3	47.8	20.5
Cash flows from investing activities	(11.4)	(14.0)	(2.6)
Cash flows from financing activities	40.4	(43.0)	(83.4)
Cash and cash equivalents at end of period *1	320.0	321.6	1.6
Capital expenditures *2	12.0	7.5	(4.4)
Depreciation *2	11.3	10.4	(0.8)
R&D expenditures	21.6	22.9	1.2

(Billions of yen)

Year ending

March 31, Change 2022

Forecast

790.0 4.9%

1,120.0 20.6%

1,910.0 13.6%

1. 15.6%

1. -

54.3-

35.4-

106.13 0.08

126.73 3.03

52.52 97.72

52.52 97.72

-	-
-	-
-	-
-	-

43.00.8

44.0 (1.3)

90.0 (0.3)

	March 31, 2021	June 30, 2021	Change
Total assets	1,887.8	1,835.3	(52.5)
Equity attributable to owners of the parent	920.2	899.3	(20.9)
Interest-bearing debt *3	222.4	222.2	(0.1)
Equity attributable to owners of the parent	48.7	49.0	0.3
ratio (%)
Equity per share attributable to owners of	1,281.29	1,288.94	7.65
the parent (yen)

*1 The amounts shown as "cash and cash equivalents at end of the period" are shown on the condensed consolidated statement of cash flows. *2 The amounts presented in capital expenditures and depreciation are for property, plant and equipment.

*3 The amounts are shown bonds and borrowings.

Ricoh Company, Ltd.

• The result forecasts and forward-looking statements included in this document are based on information available to the Company as at the date of submission of this quarterly report and certain assumptions that the Company considers reasonable. The Company makes no guarantees with respect to the achievement of its result forecasts or forward-looking statements. Actual results might be significantly different from the forecasts in the document, depending on various factors. For the assumptions for forecast and other related information, please refer to "3. Qualitative Information on Forecasted Consolidated Financial Results" on page 5.

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Ricoh Company, Ltd. and its Consolidated Subsidiaries

Financial Highlights for the First Quarter Ended June 30, 2021 [Prepared on the basis of International Financial Reporting Standards]

1. Results for the Period from April 1, 2021 to June 30, 2021

(1) Operating Results

		(Millions of yen)
	Three months ended	Three months ended
	June 30, 2020	June 30, 2021
Sales	352,325	424,804
(% change from the previous corresponding period)	(26.2)	20.6
Operating profit (loss)	(21,272)	5,666
(% change from the previous corresponding period)	-	-
Profit (loss) before income tax expenses	(22,612)	7,682
(% change from the previous corresponding period)	-	-
Profit (loss) for the period	(18,663)	4,836
(% change from the previous corresponding period)	-	-
Profit (loss) attributable to owners of the parent	(18,659)	4,787
(% change from the previous corresponding period)	-	-
Comprehensive income (loss)	(14,362)	9,752
(% change from the previous corresponding period)	-	-
Earnings per share attributable to owners of the parent-basic (yen)	(25.76)	6.77
Earnings per share attributable to owners of the parent-diluted (yen)	(25.76)	6.77

Notes: Earnings per share attributable to owners of the parent (basic and diluted) are based on profit (loss) attributable to owners of the parent.

(2) Financial Position

			(Millions of yen)
		March 31, 2021	June 30, 2021
	Total assets	1,887,868	1,835,368
	Total equity	923,852	902,949
	Equity attributable to owners of the parent	920,246	899,309
	Equity attributable to owners of the parent ratio (%)	48.7	49.0
2. Dividend Information
		Year ended	Year ending
		March 31, 2021	March 31, 2022
		(Actual)	(Forecast)
	Cash dividends, applicable to the year (yen)	15.00	26.00
	Interim (yen)	7.50	13.00
	Year-end (yen)	7.50	13.00
Notes: Revision of expected dividends during this period: No
3. Forecast of Operating Results from April 1, 2021 to March 31, 2022
		(Millions of yen)
		Year ending
		March 31, 2022
	Sales	1,910,000
	(% change from the previous corresponding period)	13.6
	Operating profit	50,000
	(% change from the previous corresponding period)	-
	Profit before income tax expenses	54,300
	(% change from the previous corresponding period)	-
	Profit for the period	35,500
	(% change from the previous corresponding period)	-
	Profit attributable to owners of the parent	35,430
	(% change from the previous corresponding period)	-
	Earnings per share attributable to owners of the parent-basic (yen)	52.52

Notes: Revision of forecast of consolidated operating results during this period: No

4. Others

(1) Changes in significant subsidiaries: No

(2) Changes in accounting policies and accounting estimate

(i) Changes in accounting policies required by IFRS: No

(ii) Other changes: No

(iii) Changes in accounting estimate: No

(3) Number of common stock outstanding (including treasury stock):

As of June 30, 2021: 744,912,078 shares; As of March 31, 2021: 744,912,078 shares

(4) Number of treasury stock:

As of June 30, 2021: 47,198,933 shares; As of March 31, 2021: 26,692,132 shares

(5) Average number of common stock:

Three months ended June 30, 2021: 706,901,957 shares; Three months ended June 30, 2020: 724,433,326 shares

Notes: The Company has established the Board Incentive Plan trust in which beneficiaries include Directors and Executive Officers. The

shares owned by the trust account relating to this trust are accounted for as treasury shares. (As of June 30, 2021: 411,200 shares; As of

March 31, 2021: 415,800 shares)

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Qualitative Information on Consolidated Financial Results for the Quarter under Review 1. Qualitative Information on Consolidated Business Results

* Overview of the First Quarter of Fiscal 2021 (April 1 - June 30, 2021)

Ricoh aims to become a digital service company that is a work productivity innovator over the two years of the 20th Mid-Term Management Plan, which started in the fiscal 2021.

In addition to recovering from the business impact of office printing and commercial printing caused by COVID-19, we further strengthen our business structure by optimizing our development, production, and service provide systems. Ricoh also takes the lead in achieving our targets for the 20th Mid-Term Management Plan and aims to increase corporate value by achieving growth in digital services centered on office services business and improving capital profitability.

The global economy continues to be hampered by COVID-19 pandemic. In addition, the economic outlook remains uncertain due to prolonged U.S.-China trade frictions, shortage of semiconductors and other supplies, and stagnation of shipping and other distribution networks.

In Japan, the economic recovery was sluggish due to factors such as the declaration of emergency to prevent the resurgence of infection, although there were signs of improvement in capital investment by companies. In the U.S., the economy continues to recover in line with the spread of vaccines and financial support measures. In Europe, although there are signs of recovery due to the progress of vaccination, economic recovery has slowed due to the resurgence of COVID-19 pandemic. In other regions, while economic recovery is progressing in China, economic activity has stagnated in some emerging countries due to the resurgence of infection with a new variant of COVID-19.

During this period, the average exchange rates of Japanese yen against U.S. dollar and Euro were ¥109.50 (up ¥1.90 from the previous corresponding period) and ¥131.92 (up ¥13.45 from the previous corresponding period) respectively.

Sales for the first quarter increased by 20.6% as compared to the previous corresponding period, when the spread of COVID-19 led to a sharp decline in global economic activity, to ¥424.8 billion. In the office printing business, the recovery in non-hardware sales was slow due to the slow recovery in the percentage of employees attending office by the resurgence of infection with COVID-19. However, sales of edge devices such as multifunctional printers and laser printers significantly exceeded the previous corresponding period, when sales plummeted.

In the office services business, sales have grown steadily, due to the acceptance of our proposals for resolving customer issues such as remote work promotion and digital transformation.

In addition, our business activities have recovered in a number of other business, including the commercial printing business and the industrial printing business. In line with the introduction of the business unit structure, the new business segment adopted in the fiscal 2021, namely Digital Services, Digital Products, Graphic Communications, and Industrial Solutions, posted a significant increase in revenues.

In Japan, sales increased by 7.5% as compared to the previous corresponding period. Although the sales recovery in the office printing business slowed due to the declaration of emergency in major cities by the resurgence of infection and priority measures to prevent the spread of the COVID-19, the package sales in the office service business continued to be strong.

Sales in the Americas increased by 24.1% (an increase of 21.9% excluding foreign currency exchange fluctuations) as compared to the previous corresponding period. The sales recovered in the office printing business and commercial printing business while economic activity was recovering due to the spread of vaccination.

Sales in the Europe, the Middle East, and Africa increased by 43.2% (an increase of 28.6% excluding foreign currency exchange fluctuations) as compared to the previous corresponding period. Although the recovery in the office printing was moderated by the resurgence of COVID- 19, sales of office services increased due to accelerating sales of office services packages and continued acquisitions of IT service companies. Sales in other regions increased by 23.4% (an increase of 13.4% excluding foreign currency exchange fluctuations) as compared to the previous corresponding period mainly due to the sales recovery in the office printing business.

As a result, sales in the overseas market increased by 31.3% as compared to the previous corresponding period. Excluding effects of foreign currency fluctuations, sales in overseas would have increased by 23.0% as compared to the previous corresponding period.

Gross profit increased by 24.8% as compared to the previous corresponding period, to ¥152.3 billion due to an increase in sales in each business segment.

Selling, general and administrative expenses increased by 3.7% as compared to the previous corresponding period, to ¥150.3 billion.

Other income increased compared to the previous corresponding period primarily due to gain on the sale of U.S. manufacturing subsidiary land in the first quarter period.

Operating profit increased by ¥26.9 billion compared to the previous corresponding period, to ¥5.6 billion. Excluding the foreign exchange impact, operating profit increased by ¥24.0 billion compared to the previous corresponding period.

Net finance income and costs increased as compared to the previous corresponding period due to an increase in foreign exchange gains.

Profit before income tax expenses increased by ¥30.2 billion as compared to the previous corresponding period, to ¥7.6 billion.

Income tax expenses increased by ¥6.7 billion as compared to the previous corresponding period mainly due to a significant increase in profit before income tax expenses.

As a result, profit attributable to owners of the parent increased by ¥23.4 billion as compared to the previous corresponding period, to ¥4.7 billion.

Comprehensive income was ¥9.7 billion due to an increase in profit for the period.

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* Review by Business Segment

Digital Services

Digital Services sales were ¥346.3 billion and increased by 22.1% as compared to the previous corresponding period. In the office services business, sales increased as a result of the continued acquisition of IT service companies in Europe and accelerating sales of office services packages in Japan and Europe. In the office printing business, although there has been a recovery in office activities due to the widespread use of vaccination, the recovery in the attendance rate has slowed due to the resurgence of COVID-19 pandemic, and the recovery of the print volume has lagged behind expectations. However, sales of edge devices, such as MFPs (multifunctional printers) and laser printers, have recovered. As a result, sales of Digital Services increased significantly compared to the previous corresponding period. Operating profit was squeezed by shortages of semiconductors and other parts and by rising shipping costs. However, we are generating operating profit by increasing gross profit due to the increase in sales, strengthening our maintenance and service structure, and steadily improving profitability in the printing center business in the U.S.

As a result, Digital Services operating profit was ¥1.3 billion and increased by ¥8.6 billion as compared to the previous corresponding period.

Digital Products

Digital Products sales were ¥3.3 billion and increased by 13.9% (Sales including intersegment sales were ¥89.4 billion and increased by 12.6%) as compared to the previous corresponding period. Sales of edge devices and consumables increased due to a recovery in economic activity in spite of a shortage of semiconductors and other components and a stagnant distribution network. Despite the impact of rising shipping costs and other factors, in addition to an increase in gross profit due to increased sales, we are making steady progress in improving operating profit through cost-cutting measures to strengthen our business structure, such as streamlining development and consolidating production bases.

As a result, Digital Products operating profit was ¥9.0 billion and increased by ¥10.7 billion as compared to the previous corresponding period.

Graphic Communications

Graphic Communications sales were ¥42.5 billion and increased by 32.3% as compared to the previous corresponding period. The resumption of economic activity resulted in an increase of sales in the commercial printing business due to a recovery in investment motivation. In the industrial printing business, sales increased due to a recovery in demand for inkjet heads and an increase in demand for industrial printers. We are also making steady progress in efforts to reduce costs through the digitization of development and production and the streamlining of service activities.

As a result, Graphic Communications operating profit was ¥1.0 billion and increased by ¥9.9 billion as compared to the previous corresponding period.

Industrial Solutions

Industrial Solutions sales were ¥26.9 billion and increased by 12.3% as compared to the previous corresponding period due to increased sales in both the thermal media and industrial products business. In the thermal media business, sales of Silicone-top Linerless Label are steadily increasing and demand for tickets in the U.S. and demand in the logistics industry are expanding. On the other hand, upfront investments to increase production capacity and higher raw material prices are putting pressure on operating profit. In addition, in the industrial products business, sales increased due to a recovery in demand in the automotive industry. As a result, Industrial Solutions operating profit (loss) was ¥0.9 billion (loss) and increased by ¥0.8 billion as compared to the previous corresponding period.

Other

Other segment sales were ¥5.5 billion and decreased by 41.4% as compared to the previous corresponding period. A prime factor was the adoption of equity method accounting for Ricoh Leasing Co., Ltd. (hereinafter, Ricoh Leasing). On the other hand, in the camera business, sales of new products were favorable and returned to profitability. As a result, Other segment operating profit (loss) was ¥3.2 billion (loss). Excluding the impact of the adoption of equity method accounting for Ricoh Leasing, both sales and operation profit increased.

• Ricoh adopted a business unit structure from April 1, 2021. Based on this new business unit structure, Ricoh changed Operating Segment Information from this fiscal year. Prior year comparative figures have also been reclassified to conform to the current year's presentation.

2. Analysis of Consolidated Financial Position

*Assets, Liabilities and Equity

Total assets decreased by ¥52.5 billion as compared to the end of the previous fiscal year, to ¥1,835.3 billion. "Trade and other receivables" decreased by ¥49.9 billion from the end of the previous fiscal year, mainly due to the collection of receivables recorded at the end of the previous fiscal year.

Total liabilities decreased by ¥31.5 billion as compared to the end of previous year, to ¥932.4 billion. "Trade and other payables" decreased by ¥34.9 billion, mainly due to the payment of payables recorded at the end of the previous fiscal year.

Total equity decreased by ¥20.9 billion as compared to the end of previous fiscal year, to ¥902.9 billion. "Treasury stock" increased by ¥25.2 billion because of share repurchase to increase shareholder returns.

Equity attributable to owners of the parent therefore decreased by ¥20.9 billion, to ¥899.3 billion. The equity attributable to owners of the parent ratio remained stable, at 49.0%.

* Cash Flows (Three months from April 1, 2021 to June 30, 2021)

Net cash provided by operating activities increased by ¥20.5 billion as compared to the previous corresponding period, to ¥47.8 billion. The proceeds increased due to significant improvement in profit for the period.

Net cash used in investing activities increased by ¥2.6 billion as compared to the previous corresponding period, to ¥14.0 billion. During the previous corresponding period, there was an increase in expenditure for property, plant and equipment due to Ricoh Leasing being a consolidated subsidiary and a temporary cash income due to partial transfer of shares of Ricoh Leasing. During the first quarter of this fiscal year, cash income increased due to the sale of land at a manufacturing subsidiary in U.S., while expenditures increased due to the acquisition of an IT service company in Europe and the acquisition of intangible assets. As a result, cash expenditures increased compared to the previous corresponding period.

Free cash flow (net cash provided by operating activities plus net cash used in investing activities) totaled ¥33.7 billion, up by ¥17.8 billion. Net cash provided by (used in) financing activities decreased by ¥83.4 billion as compared to the previous corresponding period, to ¥43.0 billion in expenditure. During the previous corresponding period, Ricoh procured in preparation for the risk of business environment deterioration because of COVID-19. On the other hand, during the first quarter of this fiscal year, the Company acquired ¥25.2 billion of treasury stock and increased expenditures.

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As a result, the balance of cash and cash equivalent at the end of period decreased by ¥8.6 billion as compared to the end of previous fiscal year, to ¥321.6 billion.

3. Qualitative Information on Forecasted Consolidated Financial Results

Since the business results and the business environment including foreign currency fluctuations in the first quarter were within expectation, there was no change on the forecast of sales, gross profit, operating profit, profit before income tax expenses and profit attributable to owners of the parent from those previously announced in May this year.

Ricoh maintains the assumed exchange rates set forth in May of ¥105 against the U.S. dollar and of ¥125 against the euro in and after the second quarter while the actual exchange rates during the first quarter have been incorporated into exchange rate assumptions for the full year.

Exchange Rate Assumptions for the full year ending March 31, 2022
US$ 1 =	¥106.13	(¥106.05 in previous fiscal year)
EURO 1 =	¥126.73	(¥123.70 in previous fiscal year)
					(Billions of yen)
					Year ending
				Year ended	March 31, 2022
			March 31, 2021	(Forecast)	Change
	Domestic sales		753.0	790.0	4.9%
	Overseas sales		929.0	1,120.0	20.6%
	Sales			1,682.0	1,910.0	13.6%
	Gross profit		572.3	661.4	15.6%
	Operating profit (loss)	(45.4)	50.0	-
	Profit (loss) before income tax expenses	(41.0)	54.3	-
	Profit (loss) attributable to owners of the parent	(32.7)	35.4	-

• The result forecasts and forward-looking statements included in this document are based on information available to the Company as at the date of submission of this quarterly report and certain assumptions that the Company considers reasonable. The Company makes no guarantees with respect to the achievement of its result forecasts or forward-looking statements. Actual results might be significantly different from the forecasts in the document, depending on various factors. Factors which may affect the actual business results include but are not limited to the economic situation in the geographic areas where Ricoh conducts business, including Japan, the Americas, Europe, Middle East, Africa, China and Asia, market environment, and currency exchange rates.

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