FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of October 2005
Commission File Number 2 - 68279
RICOH COMPANY, LTD.
-----------------------------------------------
(Translation of Registrant's name into English)
15-5, Minami-Aoyama 1-Chome, Minato-ku, Tokyo 107-8544, Japan
-------------------------------------------------------------
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.)
Form 20-F X Form 40-F __
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): __ )
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): __ )
(Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934.)
Yes __ No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-__ )
--------------------------------------------------------------------------------
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Ricoh Company, Ltd.
------------------------------
(Registrant)
By: /S/ Zenji Miura
------------------------------
Zenji Miura
Director,
Corporate Executive Vice President
and Chief Financial Officer
October 27, 2005
--------------------------------------------------------------------------------
$$/BREAK/SECTION=TX/ELEMENT=1
/NOPRE/NOPOST/NOFOLIO/$$END
RICOH October 27, 2005
INTERIM REPORT
Half year ended September 30, 2005
(Results for the Period from April 1, 2005 to September 30, 2005)
Three months ended September 30, 2005
(Results for the Period from July 1, 2005 to September 30, 2005)
PERFORMANCE OUTLINE (CONSOLIDATED)
(1) Half year ended September 30, 2005, 2004 and Year ending March 31, 2006
(Forecast)
(Billions of yen)
--------------------------------------------------------------------------------------------------- -----------------------------
Half year ended Half year ended Year ending
September 30, 2005 September 30, 2004 March 31, 2006
(Results) (Results) Change (Forecast) Change
--------------------------------------------------------------------------------------------------- -----------------------------
Domestic sales 480.9 469.1 2.5% 999.7 2.7%
Overseas sales 442.1 406.8 8.7% 900.3 7.0%
Net sales 923.0 876.0 5.4% 1,900.0 4.7%
Gross profit 388.2 363.8 6.7% 804.0 6.5%
Operating income 66.9 57.7 15.8% 160.0 18.1%
Income before income taxes 69.4 60.0 15.6% 160.0 18.2%
Net income 42.8 35.8 19.7% 97.0 16.7%
--------------------------------------------------------------------------------------------------- -----------------------------
Exchange rate (Yen/US$) 109.42 109.83 -0.41 109.71 2.13
Exchange rate (Yen/EURO) 135.67 133.31 2.36 135.34 0.09
--------------------------------------------------------------------------------------------------- -----------------------------
Net income per share (yen) 58.40 48.48 9.92 132.07 19.43
--------------------------------------------------------------------------------------------------- -----------------------------
Total assets 1,948.5 1,877.4 71.1 - -
Shareholders' equity 905.6 830.2 75.3 - -
Interest-bearing debt 371.7 435.3 -63.5 - -
--------------------------------------------------------------------------------------------------- -----------------------------
Equity ratio (%) 46.5 44.2 2.3 - -
--------------------------------------------------------------------------------------------------- -----------------------------
Shareholders' equity per share (yen) 1,233.08 1,123.84 109.24 - -
--------------------------------------------------------------------------------------------------- -----------------------------
Cash flows from operating activities 73.3 57.9 15.4 - -
Cash flows from investing activities -61.9 -33.9 -27.9 - -
Cash flows from financing activities -49.7 -16.9 -32.8 - -
Cash and cash equivalents at end of period 148.0 214.7 -66.6 - -
--------------------------------------------------------------------------------------------------- -----------------------------
Capital expenditures 58.1 38.2 19.9 114.0 29.2
Depreciation for tangible fixed assets 31.1 31.0 0.0 69.0 2.2
R&D expenditures 54.9 53.4 1.5 116.0 5.5
--------------------------------------------------------------------------------------------------- -----------------------------
(2) Three months ended September 30, 2005 and 2004
(Billions of yen)
----------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2005 September 30, 2004 Change
----------------------------------------------------------------------------------------------
Domestic sales 246.9 235.8 4.7%
Overseas sales 223.1 203.5 9.6%
Net sales 470.0 439.4 7.0%
Gross profit 193.5 174.7 10.8%
Operating income 29.6 18.3 61.3%
Income before income taxes 31.3 18.7 67.0%
Net income 19.1 10.9 75.2%
----------------------------------------------------------------------------------------------
Exchange rate (Yen/US$) 111.22 110.01 1.21
Exchange rate (Yen/EURO) 135.79 134.44 1.35
----------------------------------------------------------------------------------------------
Net income per share (yen) 26.08 14.79 11.29
----------------------------------------------------------------------------------------------
Capital expenditures 23.4 19.5 3.8
Depreciation for tangible fixed assets 15.4 15.0 0.3
R&D expenditures 29.4 29.0 0.3
----------------------------------------------------------------------------------------------
RICOH COMPANY, LTD.
* The Company bases the forecast estimates for March 31, 2006 above upon
information currently available to management, which involves risks and
uncertainties that could cause actual results to differ materially from those
projected.
1
$$/BREAK/$$END
POLICIES
1. Basic Management
The Ricoh Group intends to be the company that gains most from the 21st century.
Based on this group vision, we will continue to contribute both to productivity
improvement and also to knowledge creation for individuals working anytime,
anywhere. This approach will enable us to gain the utmost trust of our customers
and continue to grow and develop our business. Accordingly, our proactive
approach encompasses not only products and services for traditional office
setups, but also customers working in a broadband environment. Our 15th
medium-term management plan - which extends from April 2005 to March 2008 -
features the following five basic management policies:
1. Foster a "Vital and motivated culture" with high objectives and achieve
them;
2. Aim at "World No.1manufacturer" through unique, competitive technology
with leading-edge technologies;
3. Provide customers with "Sensitivity to people's needs", "Sensitivity to
the earth" and "Simplify knowledge creation";
4. Invest smartly in growth areas and expand business foundation; and
5. Innovate group management and maximize capital efficiency.
2. Medium-Term Management Strategies
In terms of Office Solution business - our core competence - we in the Ricoh
Group have made every possible effort since the inception of our 13th
medium-term management plan to move beyond the manufacture and retail of
equipment such as copiers and printers so that we may overhaul our operational
structure, thus enabling us to support our customers in their efforts to improve
or enhance productivity through our offering.
In the 14th medium-term management plan, we defined our principal strategy as
"the realization of TDV, thereby broadening our revenue and earning framework,"
as we recognize that efficient and effective Input/Output(I/O), storage, and
searching of TDV (i.e., total document volume), which includes printed material
in addition to photocopies, will become a pressing issue for our customers.
While there are no changes to the direction of business structure reform and
principal strategy of the Ricoh Group in the 15th medium-term management plan,
we will aim to increase our corporate value by more than ever addressing issues
from the customer's standpoint and continuing to provide values that meet
customers' expectations.
In Office Solution Business, in particular, we are confident that we can further
solidify our business foundation by taking utmost advantage of the abilities and
strengths of the Ricoh Group, such as the comprehensive product line, customer
rapport through sales and service, ability to provide solutions, global
operations, image processing technology, and image processing and merging
technology, to respond to the diverse needs of even greater range of customers.
In Office Solution Business, we have identified "printing" as an area that
presents an outstanding opportunity for growth. Consequently, we will shift a
higher portion of our business resources to this area. Namely, we will continue
to advance such printing solutions as BC (black-color) conversion and TCO (total
cost of ownership) reduction solutions in the office, enter the high-end
production printing market, boost low-end color laser printers and expand gel
jet printers to expand the business domain and size. Furthermore, we will revamp
our sales system solutions and solutions platform to capture a greater share of
major customers, particularly major global accounts.
On the other hand, we will allocate greater business resources to promising
businesses in the Industry Business. In addition, we will seek for greater
business shares of both Office Solutions and Industry Business in emerging
markets.
As technological differentiation is the key to realizing customer value in each
business and increasing profitability, we will continue our aggressive R&D
activities to boost our technical power.
3. Basic Approach and Policies for Corporate Governance
The Ricoh Group is committed to corporate governance by ensuring the
transparency of management and improving competitiveness based on the spirit of
corporate ethics and compliance.
(1) Status of corporate governance
We employ a statutory auditor system. Combined with a more effective board of
directors and an executive officer system, the auditor system reinforces the
supervision of management and supports managerial activities.
The board of directors is composed of eleven directors, of which two are outside
directors. The board of directors makes important decisions concerning the
supervision of management and management of the group.
Under the executive officer system, the executive function is delegated to each
division to clarify roles. As a sub-organization to the board of directors, an
group management committee is composed of the Chief Executive Officer and other
executive officers who meet certain qualifications. This committee takes such
business actions as supervising the divisions and preparing the optimal strategy
for the entire group, within the scope of authority delegated by the board of
directors.
2
$$/BREAK/$$END
Four corporate auditors, including two outside auditors, perform strict audits
by attending the board of directors meetings and management meetings, receiving
reports on exercise of function from the directors, reviewing important
resolution documents, and investigating the status of operations and assets.
Corporate Audit Office, which is the Ricoh Group's internal auditing unit,
performs fair and objective examination and evaluation of how each division is
executing its business based on rational criteria, and provides advice and
recommendations for improvement. As for external auditing, in light of the call
for greater independence of auditing corporations, we have established
regulations concerning the polices and procedures for prior approval for
auditing and non-auditing duties, and have implemented the board of auditors'
prior approval system for details and contract amounts of auditing contracts.
Furthermore, to further reinforce the internal control of the Ricoh Group, we
have formed the Internal Management & Control Office. To maintain the status of
the Ricoh Group as a global company with high corporate values, the section
cooperates with other units and principal group companies to revamp internal
control mechanisms across the group, provide education, and improve business
processes to comply with relevant laws, regulations, and standards, to improve
the effectiveness and efficiency of operations, and to maintain the integrity of
financial reports.
We have established Ricoh Group corporate social responsibility (CSR) charter
and Ricoh Group code of conducts to ensure that every employee in the group
understands and abides by the laws of each country, international rules, and the
spirit of these rules, and acts in good common sense with responsibility.
For corporate disclosure, we have established internal rules that set forth the
process from the collection to preparation, reporting, and disclosure of
information. The disclosure committee was formed to manage the process, and to
ensure the accuracy, timeliness, and completeness of the disclosure.
(2) Outline of personal relationships, capital relationships, transactions, and
other interests between the company, company's outside directors, and outside
auditors
There exists no special interest between the two outside directors, two outside
auditors, and the company.
(3) Corporate governance initiatives implemented by Ricoh over the past year
The Ricoh Group abolished the offices of chairman, president, executive vice
president, executive managing director, and managing director as of June 28,
2005 to further strengthen the ability of the board of directors to supervise
management. In addition, as of the same date, we formed the nomination and
compensation committee, a permanent committee unique to the Ricoh Group, within
the board of directors. Composed of two outside directors and two inside
directors, the nomination and compensation committee, besides performing other
tasks, establishes, revises, and abolishes the director and executive officer
appointment and dismissal regulations, appoints candidates for president and
chief executive officer, and decides on individual compensations for directors
and group management committee members. The committee will create a positive
tension in managerial execution and business execution, which are the core
functions of the company, to further improve their quality and speed.
4. Challenges
As customers' needs become ever more diverse, customers are no longer satisfied
with purchasing products or receiving ordinary service. The competition has also
intensified in the transition to color and in solutions marketing. In order for
the Ricoh Group to achieve growth and development with a focus on these growth
areas, it is essential that we boost our corporate competitiveness by creating
new values for customers and improving managerial efficiency.
In creating customer value, it is important that we forecast customer needs and
improve our products and services to meet these needs. To this end, we will
increase the scope of CS (Customer Satisfaction) management, in which we
aggressively cultivate new values by more than ever placing ourselves in the
shoes of our customers. We will also continue to boost our technical ability to
materialize products and services that provide new values. Our effort will also
continue in improving the efficiency of management to enhance our profitability.
Structural reform will streamline operational processes and improve the earnings
from each project. Furthermore, we will more carefully select projects and
concentrate resources to the selected projects to improve managerial efficiency.
The profit generated from such activities will be aggressively allocated to
investments in growth areas and technologies to further increase profits and
raise corporate value.
5. Dividend Policy
Ricoh endeavors to ensure that policies are regularly updated to take the
dividend payout ratio into consideration in the payment of dividends, while at
the same time increasing retained earnings for the enhancement of corporate
structure and the new business generation. Furthermore, these retained earnings
will be used both in the reinforcement of core businesses and for investment in
new fields with both medium-term and long-term perspectives.
3
$$/BREAK/$$END
6. Concept and Policy of Reducing the Trading Unit
Ricoh plans to keep investment patterns and shareholder composition under close
scrutiny, and we will consider taking the appropriate steps to alter the minimum
investment lot if so required. By reducing the minimum number of shares required
to invest in the company, Ricoh believes that a broader range of investors can
be attracted to equity markets, while at the same time, the liquidity of this
company's shares may be enhanced. Nevertheless, many investors already trade in
Ricoh's shares, and for this reason, management has concluded that there is no
immediate need for reduction of the minimum investment lots.
Furthermore, we intend to pay attention to the condition of business partners
and of shareholder makeup as we carefully study both the necessity and the
timing of implementation of these measures.
7. Parent Information
Description is omitted since there is no parent company.
4
$$/BREAK/$$END
OPERATING RESULTS & FINANCIAL POSITION
*Overview
The Ricoh Group's consolidated net sales for the medium-term period of fiscal
2006 (the six months period from April 1 to September 30, 2005) increased 5.4%
from the previous corresponding period to Yen 923.0 billion. During this period,
the average yen exchange rates were at Yen 109.42 against the U.S. dollar (up
Yen 0.41) and Yen 135.67 against the euro (down Yen 2.36). Accordingly, the
sales would increase by 5.0% excluding effects of such foreign currency
fluctuations.
As for sales, domestic sales of Imaging Solution increased by 8.0% from the
previous corresponding period. This was primarily due to the continuous increase
in sales of color PPC products, MFPs (multifunctional printers) and laser
printers. On the other hand, net sales of personal computers and PC servers, and
semiconductor in sluggish demand decreased. As a result, domestic sales
increased by 2.5% from the previous corresponding period to Yen 480.9 billion.
Overseas sales of color PPC products, MFPs (multifunctional printers) and laser
printers increased, too, while sales of optical discs decreased. As a result for
overseas, its net sales increased by 8.7% from the previous corresponding period
to Yen 442.1 billion. Excluding effects of foreign currency fluctuations, net
sales in overseas would increase by 7.8% from the previous corresponding period.
Gross profit increased by 6.7% to Yen 388.2 billion from the previous
corresponding period. This increase is due primarily to increase in profit by
sales increase of high value-added products in Office Solution Business segment
and the effects of continuous cost cutting activities for logistics,
manufacturing and so on.
Selling, general and administrative expenses increased by 5.0% from the previous
corresponding period to Yen 321.3 billion. This increase was in the range of
increase in gross profit accordingly and it consisted of strategic expenses as
follows: R&D expenses of Yen 54.9 billion, up 2.9% or Yen 1.5 billion from the
previous corresponding period; increase of sales expenses according to sales
increase; spending to Information Technologies for core operating system
development; enhancing sales and marketing structure overseas and so on.
As a result, operating income increased by 15.8% from the previous corresponding
period to Yen 66.9 billion. Income before income taxes increased by 15.6% to Yen
69.4 billion from the previous corresponding period. In the other
(income)expenses, we had financial improvement such as interest bearing debt
reduction, and a gain from foreign exchange. As for provision for income taxes,
effective tax rate was reduced by expansion of tax exemption on R&D expenses and
expenditures for Information Technologies.
As a result, net income of this term increased 19.7% to Yen 42.8 billion.
[Graph 1] Consolidated performance
The graphs are omitted. The data in the omitted graphs can be shown at the
schedule 1 in APPENDIX B.
5
$$/BREAK/$$END
*Conditions by Product Line
Office Solution Business (Sales up 7.0% to Yen 786.2 billion)
-------------------------------------------------------------
Sales in the Imaging Solution as our core business increased by 8.5% as compared
to the previous corresponding period due primarily to the continuously increase
sales of color PPCs, MFPs and laser printers in Japan and overseas. On the other
hand, net sales in the Network System Solution decreased as compared to the
previous corresponding period due primarily to the decrease sales of personal
computers and PC servers in Japan. As a result, net sales in the Office Solution
Business increased by 7.0% as compared to the previous corresponding period to
Yen 786.2 billion. Net sales would increase by 6.6% excluding impacts of foreign
currency exchange fluctuations.
Imaging Solution (Sales up 8.5% to Yen 693.1 billion)
-----------------------------------------------------
- Although domestic sales of digital PPCs decreased due primarily to the
shift in customer demands to MFPs from stand-alone products, overseas sales
of digital PPCs continued to perform well.
- Color PPCs increased by introducing a new series of products to the
market in responding to the increase of customer demands. - In response to
the demands for high speed, networking and coloration, sales of MFPs
continued to increase by offering new product lineups in Japan and
overseas.
MFPs: Imagio Neo 353/453 series in Japan
Aficio 2035e/2045e series overseas
Color MFPs: Imagio Neo C355/455 series in Japan
Aficio 3224C, Aficio 3228C overseas
- Sales of laser printers continued to increase both in Japan and overseas.
- As a result, sales in this category increased by 8.5%.
Network System Solution (Sales down 2.6% to Yen 93.1 billion)
-------------------------------------------------------------
- Sales in this category decreased due primarily to the decrease in
domestic sales of personal computers and PC servers.
Industry Business (Sales down 0.5% to Yen 58.4 billion)
-------------------------------------------------------
Sales in the Industry Business decreased by 0.5% as compared to the previous
corresponding period to Yen 58.4 billion. This was due primarily to demand
decrease and/or weak demand cycle in semiconductor and optical equipments
businesses.
Other Business (Sales down 5.2% to Yen 78.2 billion)
----------------------------------------------------
Sales in the optical discs business, mainly overseas, decreased, reflected the
withdrawal from the self-developed drive business and its key-module/parts
business in the last second quarter. As a result, net sales in the Other
Business decreased by 5.2% as compared to the previous corresponding period to
Yen 78.2 billion.
[Graph 2] Consolidated sales by product line
The graphs are omitted. The data in the omitted graphs can be shown at the
schedule 2 in APPENDIX B.
6
$$/BREAK/$$END
* Consolidated Sales by Geographic Area
Japan (Sales up 2.5% to Yen 480.9 billion)
------------------------------------------
Although the Japanese economy seems to be on the recovery in terms of companies'
business performance and capital investment, there is a concern of sudden rise
in oil price, and the markets are in severe competitive environment. In this
context, sales of color PPCs, MFPs, and laser printers increased owing to the
implementation of products and marketing strategies to meet customer needs. On
the other hand, sales of personal computers and PC servers decreased. As a
result, sales of office solution business increased by 4.9% from the previous
corresponding period. Sales of industry business including semiconductor
business etc. in the weak demand cycle, and other business decreased by 9.1%,
and 3.5%, respectively. As a result, total of domestic sales increased by 2.5%
from the previous corresponding period to Yen 480.9 billion.
The Americas (Sales up 14.0% to Yen 183.9 billion)
--------------------------------------------------
With concern for the influence of frequent hurricane, competition in its markets
has become more intense. Under these circumstances, we have stepped up sales
effort of color PPCs, MFPs and laser printers in response to changes in customer
needs for networking, color capability, and higher speeds. We have also
committed to expand sales to major accounts. Accordingly, sales of office
solution, our core business, has kept high performance. As a result, total sales
in the Americas resulted in 14.0% increase from the previous corresponding
period.
Europe (Sales up 4.4% to Yen 201.3 billion)
--------------------------------------------
Although the European economy is relatively stable, market competition in some
countries has increased. Under these circumstances, sales of our main products
such as MFPs and laser printers increased continuously, maintaining the top
share in the European office market. Total sales increased by 4.4% from the
previous corresponding period despite decline in sales of optical discs
business.
Others (Sales up 8.1% to Yen 56.7 billion)
-------------------------------------------
In other regions including China, Asian and Oceania countries, sales of Office
Solution has kept high performance. In terms of production, our manufacturing
facilities in China increased their production responding to increased worldwide
supply. As a result, total sales in other regions increased by 8.1% from the
previous corresponding period.
[Graph 3] Consolidated sales by geographic area
The graphs are omitted. The data in the omitted graphs can be shown at the
schedule 3 in APPENDIX B.
7
$$/BREAK/$$END
*Segment Information
Business Segment
----------------
Office Solution Business
------------------------
As measures to realize Ricoh Group's core strategies, namely, (1) Replacing
monochrome products with color models, (2) Increased sales of high-speed models,
and (3) Provision of printing solutions, we have released a series of high
value-added products with document functionality ranging from input/output to
sharing and management, and endeavored to expand their sales. Accordingly, sales
of color PPCs, MFPs and laser printers increased both in Japan and overseas. As
a result, sales of the Office Solution increased by 7.0% from the previous
corresponding period to Yen 786.2 billion.
In terms of operating expenses, there was strategic spending such as investment
in research and development that includes development of main products for the
next term, IT investment for of core operating system development, and
enhancement of sales and marketing structure overseas. Total of operating income
increased by 7.8% to Yen 90.4 billion .
Capital investment increased from the previous corresponding period due
primarily to investment in research and development facility such as the
Technology center in Ebina, Kanagawa prefecture, in order to improve MFPs and
printers etc., new plant for producing high quality, heavy-duty and eco-friendly
toner, and reforcing production line for new product.
Total assets increased from the previous corresponding period due primarily to
an increase in fixed assets for above-mentioned capital expenditures and lease
receivable from sales increase.
Industry Business
-----------------
Sales of semiconductor business decreased, particularly overseas, from the
effect of demand cycle for mobile communications equipment. Sales decreased in
the optical equipment due to the sluggish demand. As a result, total sales of
the Industry Business decreased by 0.5% from the previous corresponding period
to Yen 59.7 billion.
Operating income decreased from the previous corresponding period due to
production adjustment in the semiconductor business. Total assets decreased from
the previous corresponding period.
Other Business
--------------
Sales of Other Business decreased by 5.2% from the previous corresponding period
to Yen 78.2 billion due mainly to the withdrawal from the self-developed drive
business and its key-module/parts business in optical discs business. Operating
income increased from the previous corresponding period due to almost completion
of the above-mentioned withdrawal. Total assets decreased from the previous
corresponding period.
(Billions of yen)
------------------------------------------------------------------------------------------------
Half year ended Half year ended
September 30, 2005 September 30, 2004 Change (%)
------------------------------------------------------------------------------------------------
Office Solution Business:
Net sales 786.2 734.6 7.0
Operating income 90.4 83.9 7.8
Operating income on sales(%) 11.5 11.4 0.1point
Identifiable assets 1,394.0 1,196.7 16.5
Capital expenditures 51.4 32.2 59.6
Depreciation 26.3 25.0 5.0
------------------------------------------------------------------------------------------------
Industry Business:
Net sales 59.7 60.0 -0.5
Operating income -0.1 0.7 -
Operating income on sales(%) -0.3 1.3 -1.6points
Identifiable assets 73.2 78.9 -7.2
Capital expenditures 4.5 3.6 26.9
Depreciation 3.1 3.4 -8.0
------------------------------------------------------------------------------------------------
Other Business:
Net sales 78.2 82.5 -5.2
Operating income 2.1 -1.2 -
Operating income on sales(%) 2.7 -1.5 4.2points
Identifiable assets 115.3 130.7 -11.8
Capital expenditures 1.4 1.2 17.3
Depreciation 1.1 1.1 -5.6
------------------------------------------------------------------------------------------------
8
$$/BREAK/$$END
Geographic Segment
------------------
Japan
-----
In the Office Solution Business, aggressive marketing strategies implemented in
the severe competitive conditions that increased sales of MFPs and laser
printers etc. in Japan. Aided by increased export to overseas markets, sales in
Japan increased by 4.2% to Yen 699.9 billion. Increase in sales of high
value-added products and export, and continuous cost cutting activities for
logistics and manufacturing contributed to generating profit. In the last first
half fiscal year, expenses occurred for the withdrawal from the optical discs
business. As a result, operating income increased by 19.0% to Yen 47.2 billion.
The Americas
------------
We achieved good results from such strategies as expanding sales of color PPCs,
MFPs, and laser printers, and bolstering our sales to major accounts, and saw
growth in sales of these main products. As a result, sales in the Americas
increased by 12.2% from the previous corresponding period to Yen 184.0 billion.
Operating income increased by 5.4% to Yen 6.4 billion due to the above-mentioned
sales increase despite IT investments for core operating system development, and
temporary increase in inventory.
Europe
------
Sales of MFPs and printers increased, and we have retained the top share of the
European office market. Sales of optical disks decreased, however, sales in
Europe for the current term increased by 3.2% to Yen 202.0 billion. Operating
income decreased by 9.1% to Yen 9.9 billion, owing to the strategic cost for
enhancing sales and marketing structure and change of the production lines in
plants.
Others
------
Sales in the Asia/Oceania especially China, continued to increase. In terms of
production, our manufacturing facilities in China increased their production
responding to increased worldwide supply. Total sales in other regions increased
by 9.8% from the previous corresponding period, to Yen 93.5 billion. Operating
income increased by 21.4% to Yen 6.5 billion, due to the effect of favorable
performance in sales, and expanded production volume and high productivity in
production.
(Billions of yen)
----------------------------------------------------------------------------------------------
Half year ended Half year ended
September 30,2005 September 30, 2004 Change (%)
----------------------------------------------------------------------------------------------
Japan:
Net sales 699.9 671.4 4.2
Operating income 47.2 39.6 19.0
Operating income on sales(%) 6.8 5.9 0.9point
Identifiable assets 1,186.2 1,069.7 10.9
----------------------------------------------------------------------------------------------
The Americas:
Net sales 184.0 163.9 12.2
Operating income 6.4 6.1 5.4
Operating income on sales(%) 3.5 3.7 -0.2point
Identifiable assets 235.7 205.1 14.9
----------------------------------------------------------------------------------------------
Europe:
Net sales 202.0 195.7 3.2
Operating income 9.9 10.9 -9.1
Operating income on sales(%) 4.9 5.6 -0.7point
Identifiable assets 226.0 206.1 9.7
----------------------------------------------------------------------------------------------
Others:
Net sales 93.5 85.2 9.8
Operating income 6.5 5.4 21.4
Operating income on sales(%) 7.1 6.4 0.7point
Identifiable assets 73.1 60.4 21.1
----------------------------------------------------------------------------------------------
9
$$/BREAK/$$END
*Cash Flows
(Billions of yen)
--------------------------------------------------------------------------------------------
Half year ended Half year ended
September 30, September 30,
2005 2004 Change
--------------------------------------------------------------------------------------------
Cash flows from operating activities 73.3 57.9 15.4
Cash flows from investing activities -61.9 -33.9 -27.9
Cash flows from financing activities -49.7 -16.9 -32.8
Cash and Cash Equivalents at End of Period 148.0 214.7 -66.6
--------------------------------------------------------------------------------------------
Net cash provided by operating activities increased Yen 15.4 billion as compared
to the previous corresponding period, to Yen 73.3 billion. It was due mainly to
the fact that net income and depreciation increased and trade receivable was
collected, despite lease receivable increased from sales expansion.
Net cash used in investing activities increased Yen 27.9 billion as compared to
the previous corresponding period, to Yen 61.9 billion. Investment in research
and development facility such as the Technology Center in Ebina, Kanagawa
prefecture, in order to improve MFPs and printers etc., new plant for producing
high quality, heavy-duty and eco-friendly toner, and reforcing production line
for new product occurred.
As a result, free cash flow generated by operating and investing activities
decreased Yen 12.5 billion as compared to the previous corresponding period, to
Yen 11.4 billion.
Net cash used in financing activities amounted to Yen 49.7 billion due primarily
to the reduction of interest-bearing debt and the payment of dividend.
As a result, cash and cash equivalents at the end of this first half decreased
by Yen 38.8 billion as compared to the end of the preceding fiscal year, to Yen
148.0 billion.
Transition of our cashflow indices from fiscal 2002 to 2006 are as follows:
------------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Half year ended Half year ended Half year ended
September 30, September 30, September 30, September 30, September 30,
2001 2002 2003 2004 2005
------------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity / Total assets 33.9% 36.3% 36.8% 44.2% 46.5%
Market capitalization / Total assets 72.7% 84.2% 77.3% 81.7% 66.8%
Interest bearing debt / Operating cash flow 12.2 5.5 7.9 7.5 5.1
Operating cash flow / Interest expense 9.9 24.6 21.5 25.0 33.4
------------------------------------------------------------------------------------------------------------------------------------
Notes:
i. All indices are calculated based on consolidated data.
ii. Market capitalization equals the stock price at the end of half year
multipled by the number of shares outstanding at the end of half year.
iii. Operating cash flow is shown in consolidated statement of cash flow.
Interest bearing debt equals all debt in the consolidated balance sheets.
10
$$/BREAK/$$END
*Forecast for the entire fiscal year
Forecast and measures of Ricoh Group for the entire fiscal year
---------------------------------------------------------------
Although the Japanese economy is likely to recover, American economy continues
good condition and the European economy is stable, there is a concern with
frequent nature disasters and sudden rise in oil price all over the world. In
our business environment, competition for color-capable products, digitalization
and networking becomes more intense.
With regard to this fiscal year, we revised up our sales forecast to Yen 1,900.0
billion from the forecast announced in July. As for Imaging Solution that
continues steady sales growth as our core business, we predict that its sales
both in Japan and overseas will be increased by certain business strategies such
as releasing valuable new products. In order to achieve the growth, we continue
strategic business investments in the second half of the fiscal year.
We keep our fiscal forecast for gross profit, income before income taxes and net
income from the forecast in July. For the third quarter and onward, we predict
an exchange rate of Yen 110.00 against the U.S. dollar and of Yen 135.00 against
the euro.
Our performance forecasts for fiscal 2006 are as follows:
Exchange Rate Assumptions for the 2nd half year
US$ 1 = Yen 110.00 (Yen 109.42 in 1st half year)
EURO 1 = Yen 135.00 (Yen 135.67 in 1st half year)
Exchange Rate Assumptions for the full year ending March 31, 2006
US$ 1 = Yen 109.71 (Yen 107.58 in previous fiscal year)
EURO 1 = Yen 135.34 (Yen 135.25 in previous fiscal year)
(Billions of yen)
-----------------------------------------------------------------------------------------
Year ending Year ended
March 31, 2006 March 31, 2005
(Forecast) (Results) Change
-----------------------------------------------------------------------------------------
Domestic sales 999.7 972.9 2.7%
Overseas sales 900.3 841.1 7.0%
Net sales 1,900.0 1,814.1 4.7%
Gross profit 804.0 754.5 6.5%
Operating income 160.0 135.5 18.1%
Income before income taxes 160.0 135.3 18.2%
Net income 97.0 83.1 16.7%
-----------------------------------------------------------------------------------------
* Ricoh bases the forecast estimates for March 31, 2006 above upon information
currently available to management, which involves risks and uncertainties that
could cause actual results to differ materially from those projected.
11
$$/BREAK/$$END
RICOH COMPANY, LTD. AND CONSOLIDATED SUBSIDIARIES
INTERIM REPORT (CONSOLIDATED. HALF YEAR ENDED SEPTEMBER 30, 2005)
DATE OF APPROVAL FOR THE FINANCIAL RESULTS FOR THE HALF YEAR ENDED SEPTEMBER 30,
2005, AT THE BOARD OF DIRECTORS' MEETING: OCTOBER 27, 2005
1. RESULTS FOR THE PERIOD FROM APRIL 1, 2005 TO SEPTEMBER 30, 2005
(1) Operating Results (Millions of yen)
-----------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2005 September 30, 2004 March 31, 2005
-----------------------------------------------------------------------------------------------------------------
Net sales 923,020 876,003 1,814,108
(% change from the previous corresponding periods) 5.4 -1.4 1.9
Operating income 66,907 57,758 135,506
(% change from the previous corresponding periods) 15.8 -25.2 -9.7
Income before income taxes 69,407 60,064 135,383
(% change from the previous corresponding periods) 15.6 -15.9 -5.4
Net income 42,867 35,821 83,143
(% change from the previous corresponding periods) 19.7 -15.2 -9.4
Net income per share-basic (yen) 58.40 48.48 112.64
Net income per share-diluted (yen) - - -
-----------------------------------------------------------------------------------------------------------------
Notes:
i. Equity in income of affiliates: Yen 935 million; Yen 1,434 million (half year
ended September 30, 2004); Yen 3,120 million (year ended March 31, 2005)
ii. Average number of shares outstanding (consolidated): 734,019,631 shares;
738,843,718 shares (half year ended September 30, 2004); 738,160,042 shares
(year ended March 31, 2005)
iii. No change in accounting method has been made.
(2) Financial Position (Millions of yen)
-----------------------------------------------------------------------------------------------------------------
September 30, 2005 September 30, 2004 March 31, 2005
-----------------------------------------------------------------------------------------------------------------
Total assets 1,948,587 1,877,455 1,953,669
Shareholders' equity 905,674 830,280 862,998
Equity ratio (%) 46.5 44.2 44.2
Equity per share (yen) 1,233.08 1,123.84 1,175.67
-----------------------------------------------------------------------------------------------------------------
Note: Number of shares outstanding as of September 30, 2005: 734,481,701 shares;
738,785,590 shares (September 30, 2004); 734,045,879 shares (March 31, 2005)
(3) Cash Flows (Millions of yen)
-----------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2005 September 30, 2004 March 31, 2005
-----------------------------------------------------------------------------------------------------------------
Cash flows from operating activities 73,397 57,980 132,780
Cash flows from investing activities -61,916 -33,939 -96,198
Cash flows from financing activities -49,795 -16,906 -56,439
Cash and cash equivalents at end of period 148,010 214,706 186,857
-----------------------------------------------------------------------------------------------------------------
(4) Items relating to the scale of consolidation and the application of the
equity method:
Number of consolidated subsidiaries: 277; non-consolidated subsidiaries: 39;
affiliated companies: 21
(5) Changes relating to the scale of consolidation and the application of the
equity method:
Consolidated subsidiaries:
1 addition; 9 removals
Companies accounted for by the equity method: 2 removals
Notes:
Consolidated financial statements of the Company and its consolidated
subsidiaries have been prepared in conformity with accounting principles
generally accepted in the United States of America.
2. FORECAST OF OPERATING RESULTS FROM APRIL 1, 2005 TO MARCH 31, 2006 (Millions of yen)
-----------------------------------------------------------------------------------------------------------------
Net sales 1,900,000
Operating income 160,000
Income before income taxes 160,000
Net income 97,000
-----------------------------------------------------------------------------------------------------------------
Note: Net income per share (Consolidated) 132.07 yen
In accordance with Japanese regulations, Ricoh has issued forecast for its
financial results for the fiscal year ending March 31, 2006. These forecast are
forward-looking statements based on a number of assumptions and beliefs in light
of the information currently available to management and subject to significant
risks and uncertainties.
12
$$/BREAK/$$END
GROUP POSITION
The Ricoh Group comprises 316 subsidiaries and 21 affiliates.
Their development, manufacturing, sales, and service activities center on Office
Solution Business, Industry Business, and Other Business.
Ricoh Company, Ltd., a parent company, heads development. The parent company and
subsidiaries or affiliates maintain an integrated domestic and international
manufacturing structure. Below, we have listed our main product areas and the
positions of key subsidiaries and affiliates.
(Office Solution Business)
In this business category, Ricoh provides products and systems that support the
enhancement of the office productivity of customers. Major products include:
Digital/analog copiers, MFPs (multifunctional printers), laser printers,
facsimile machines, and digital duplicators. Ricoh also provides solution
systems including personal computers and servers, utilizing its information
technology. Another business Ricoh also provides are support, service, and
related supplies, as well as support and service including IT environment setup
and network administration.
[Main Subsidiaries and Affiliates]
Production
Japan...Tohoku Ricoh Co., Ltd., Ricoh Elemex Corporation, Ricoh Unitechno
Co., Ltd., Hasama Ricoh Inc., Ricoh Microelectronics Co., Ltd., Ricoh Keiki
Co., Ltd., and Ricoh Printing Systems, Ltd.
The Americas...Ricoh Electronics, Inc.
Europe...Ricoh UK Products Ltd., Ricoh Industrie France S.A.S.
Other regions...Ricoh Asia Industry (Shenzhen) Ltd., Shanghai Ricoh Facsimile
Co., Ltd., and Sindo Ricoh Co., Ltd. (affiliated company)
Sales and Service
Japan ...Hokkaido Ricoh Co., Ltd., Ricoh Tohoku Co., Ltd., Ricoh Sales Co.,
Ltd. Ricoh Chubu Co., Ltd., Ricoh Kansai Co., Ltd., Ricoh Chugoku Co., Ltd.,
Ricoh Kyushu Co., Ltd., and 32 other sales companies nationwide, Ricoh
Technosystems Co., Ltd., NBS Ricoh Co., Ltd., Ricoh Leasing Co., Ltd., and
Ricoh Logistics System Co., Ltd.
The Americas...Ricoh Corporation, Lanier Worldwide, Inc.
Europe...Ricoh Europe B.V., Ricoh Deutschland GmbH, Ricoh UK Ltd., Ricoh
France S.A., Ricoh Espana S.A., Ricoh Italia S.p.A., and NRG Group PLC
Other regions...Ricoh China Co., Ltd., Ricoh Hong Kong Ltd., Ricoh Asia
Pacific Pte. Ltd., Ricoh Australia Pty, Ltd., and Ricoh New Zealand Ltd.
(Industry Business)
Manufacturing and marketing thermal media, optical equipments, semiconductors,
electronic component and measuring equipments
[Main Subsidiaries and Affiliates]
Production and Sales
Japan...Ricoh Optical Industries Co., Ltd., Ricoh Elemex Corporation, and
Ricoh Microelectronics Co., Ltd.
The Americas...Ricoh Electronics, Inc.
Europe...Ricoh Industrie France S.A.S.
(Other Business)
Supplying optical discs and digital camera, and providing leasing and logistics
services
[Main Subsidiaries and Affiliates]
Sales
Ricoh Corporation
Other
Ricoh Leasing Co., Ltd., Ricoh Logistics System Co., Ltd., and Coca-Cola West
Japan Co., Ltd. (affiliated company)
(Chart of Business System)
The chart of group position is omitted.
13
$$/BREAK/$$END
CONSOLIDATED PERFORMANCE
1. CONSOLIDATED STATEMENTS OF INCOME
(Three months ended September 30, 2005 and 2004) (Millions of yen)
---------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2005 September 30, 2004 Change %
---------------------------------------------------------------------------------------------------------
Net sales 470,038 439,453 30,585 7.0
Cost of sales 276,507 264,744 11,763 4.4
Percentage of net sales (%) 58.8 60.2
Gross Profit 193,531 174,709 18,822 10.8
Percentage of net sales (%) 41.2 39.8
Selling, general and administrative expenses 163,906 156,338 7,568 4.8
Percentage of net sales (%) 34.9 35.6
Operating income 29,625 18,371 11,254 61.3
Percentage of net sales (%) 6.3 4.2
Other (income) expense
Interest and dividend income 699 470 229 48.7
Percentage of net sales (%) 0.1 0.1
Interest expense 1,186 1,086 100 9.2
Percentage of net sales (%) 0.3 0.2
Other, net -2,174 -990 -1,184 119.6
Percentage of net sales (%) -0.6 -0.2
Income before income taxes,
equity income and minority interests 31,312 18,745 12,567 67.0
Percentage of net sales (%) 6.7 4.3
Provision for income taxes 11,276 7,860 3,416 43.5
Percentage of net sales (%) 2.4 1.8
Minority interests in earnings of subsidiaries 1,464 780 684 87.7
Percentage of net sales (%) 0.3 0.2
Equity in earnings of affiliates 572 822 -250 -30.4
Percentage of net sales (%) 0.1 0.2
Net income 19,144 10,927 8,217 75.2
Percentage of net sales (%) 4.1 2.5
---------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 111.22 Yen 110.01
EURO 1 Yen 135.79 Yen 134.44
(Half year ended September 30, 2005 and 2004 and Year ended March 31, 2005) (Millions of yen)
--------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2005 September 30, 2004 Change % March 31, 2005
--------------------------------------------------------------------------------------------------------------------------
Net sales 923,020 876,003 47,017 5.4 1,814,108
Cost of sales 534,767 512,123 22,644 4.4 1,059,531
Percentage of net sales (%) 57.9 58.5 58.4
Gross Profit 388,253 363,880 24,373 6.7 754,577
Percentage of net sales (%) 42.1 41.5 41.6
Selling, general and administrative expenses 321,346 306,122 15,224 5.0 619,071
Percentage of net sales (%) 34.9 34.9 34.1
Operating income 66,907 57,758 9,149 15.8 135,506
Percentage of net sales (%) 7.2 6.6 7.5
Other (income) expense
Interest and dividend income 1,384 1,073 311 29.0 2,240
Percentage of net sales (%) 0.1 0.1 0.1
Interest expense 2,195 2,316 -121 -5.2 4,684
Percentage of net sales (%) 0.2 0.3 0.3
Other, net -3,311 -3,549 238 -6.7 -2,321
Percentage of net sales (%) -0.4 -0.5 -0.2
Income before income taxes,
equity income and minority interests 69,407 60,064 9,343 15.6 135,383
Percentage of net sales (%) 7.5 6.9 7.5
Provision for income taxes 24,785 23,779 1,006 4.2 50,634
Percentage of net sales (%) 2.7 2.7 2.8
Minority interests in earnings of subsidiaries 2,690 1,898 792 41.7 4,726
Percentage of net sales (%) 0.3 0.2 0.3
Equity in earnings of affiliates 935 1,434 -499 -34.8 3,120
Percentage of net sales (%) 0.1 0.1 0.2
Net income 42,867 35,821 7,046 19.7 83,143
Percentage of net sales (%) 4.6 4.1 4.6
--------------------------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 109.42 Yen 109.83 Yen 107.58
EURO 1 Yen 135.67 Yen 133.31 Yen 135.25
15
$$/BREAK/$$END
2-1. CONSOLIDATED SALES BY PRODUCT CATEGORY
(Three months ended September 30, 2005 and 2004) (Millions of yen)
---------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2005 September 30, 2004 Change %
---------------------------------------------------------------------------------------------------------
(Office Solution Business)
Imaging Solution Business 343,643 314,562 29,081 9.2
Percentage of net sales (%) 73.1 71.6
Network System Solution Business 54,565 52,355 2,210 4.2
Percentage of net sales (%) 11.6 11.9
Total Office Solution Business 398,208 366,917 31,291 8.5
Percentage of net sales (%) 84.7 83.5
---------------------------------------------------------------------------------------------------------
(Industry Business)
Industry Business 32,381 29,177 3,204 11.0
Percentage of net sales (%) 6.9 6.6
---------------------------------------------------------------------------------------------------------
(Other Business)
Other Business 39,449 43,359 -3,910 -9.0
Percentage of net sales (%) 8.4 9.9
---------------------------------------------------------------------------------------------------------
Grand Total 470,038 439,453 30,585 7.0
Percentage of net sales (%) 100.0 100.0
---------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 111.22 Yen 110.01
EURO 1 Yen 135.79 Yen 134.44
(Half year ended September 30, 2005 and 2004 and Year ended March 31, 2005) (Millions of yen)
--------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2005 September 30, 2004 Change % March 31, 2005
--------------------------------------------------------------------------------------------------------------------------
(Office Solution Business)
Imaging Solution Business 693,130 639,056 54,074 8.5 1,332,299
Percentage of net sales (%) 75.1 73.0 73.4
Network System Solution Business 93,151 95,606 -2,455 -2.6 199,129
Percentage of net sales (%) 10.1 10.9 11.0
Total Office Solution Business 786,281 734,662 51,619 7.0 1,531,428
Percentage of net sales (%) 85.2 83.9 84.4
--------------------------------------------------------------------------------------------------------------------------
(Industry Business)
Industry Business 58,459 58,760 -301 -0.5 119,408
Percentage of net sales (%) 6.3 6.7 6.6
--------------------------------------------------------------------------------------------------------------------------
(Other Business)
Other Business 78,280 82,581 -4,301 -5.2 163,272
Percentage of net sales (%) 8.5 9.4 9.0
--------------------------------------------------------------------------------------------------------------------------
Grand Total 923,020 876,003 47,017 5.4 1,814,108
Percentage of net sales (%) 100.0 100.0 100.0
--------------------------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 109.42 Yen 109.83 Yen 107.58
EURO 1 Yen 135.67 Yen 133.31 Yen 135.25
Note: Effective from this financial period, our business segment is changed into
three categories such as "Office Solution", "Industry" and "Other". Accordingly,
information for the previous corresponding period has been reclassified to
conform with the current classification.
Each category includes the following product line:
Imaging Solution Business Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo
copiers, scanners, MFPs(multifunctional printers), laser printers and software
Network system Solution Business Personal computers, PC servers, network systems and network related software
Industry Business Thermal media, optical equipments, semiconductors, electronic component and measuring
equipments
Other Business Optical discs and digital camera
16
$$/BREAK/$$END
2-2. CONSOLIDATED SALES BY GEOGRAPHIC AREA
(Three months ended September 30, 2005 and 2004) (Millions of yen)
---------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2005 September 30, 2004 Change %
---------------------------------------------------------------------------------------------------------
(Domestic) 246,926 235,864 11,062 4.7
Percentage of net sales (%) 52.5 53.7
(Overseas) 223,112 203,589 19,523 9.6
Percentage of net sales (%) 47.5 46.3
The Americas 96,759 82,929 13,830 16.7
Percentage of net sales (%) 20.6 18.9
Europe 96,920 92,664 4,256 4.6
Percentage of net sales (%) 20.6 21.1
Other 29,433 27,996 1,437 5.1
Percentage of net sales (%) 6.3 6.3
Grand Total 470,038 439,453 30,585 7.0
Percentage of net sales (%) 100.0 100.0
---------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 111.22 Yen 110.01
EURO 1 Yen 135.79 Yen 134.44
(Half year ended September 30, 2005 and 2004 and Year ended March 31, 2005) (Millions of yen)
--------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2005 September 30, 2004 Change % March 31, 2005
--------------------------------------------------------------------------------------------------------------------------
(Domestic) 480,917 469,176 11,741 2.5 972,975
Percentage of net sales (%) 52.1 53.6 53.6
(Overseas) 442,103 406,827 35,276 8.7 841,133
Percentage of net sales (%) 47.9 46.4 46.4
The Americas 183,915 161,330 22,585 14.0 325,597
Percentage of net sales (%) 19.9 18.4 17.9
Europe 201,399 192,987 8,412 4.4 408,906
Percentage of net sales (%) 21.8 22.0 22.5
Other 56,789 52,510 4,279 8.1 106,630
Percentage of net sales (%) 6.2 6.0 6.0
Grand Total 923,020 876,003 47,017 5.4 1,814,108
Percentage of net sales (%) 100.0 100.0 100.0
--------------------------------------------------------------------------------------------------------------------------
Reference : Exchange rate
US$ 1 Yen 109.42 Yen 109.83 Yen 107.58
EURO 1 Yen 135.67 Yen 133.31 Yen 135.25
17
$$/BREAK/$$END
3. CONSOLIDATED BALANCE SHEETS
(September 30, 2005 and March 31, 2005)
Assets (Millions of yen)
---------------------------------------------------------------------------------------------------------------------
September 30, 2005 March 31, 2005 Change
---------------------------------------------------------------------------------------------------------------------
Current Assets
Cash and time deposits 148,582 188,311 -39,729
Trade receivables 614,812 620,568 -5,756
Marketable securities 145 138 7
Inventories 167,768 167,365 403
Other current assets 55,439 53,365 2,074
Total Current Assets 986,746 1,029,747 -43,001
Fixed Assets
Tangible fixed assets 256,857 247,410 9,447
Finance receivable 405,788 391,947 13,841
Other Investments 299,196 284,565 14,631
Total Fixed Assets 961,841 923,922 37,919
---------------------------------------------------------------------------------------------------------------------
Total Assets 1,948,587 1,953,669 -5,082
---------------------------------------------------------------------------------------------------------------------
Note:
Contents of cash and time deposits:
Cash and cash equivalents 148,010 186,857
Time deposits 572 1,454
Liabilities and Shareholders' Investment (Millions of yen)
---------------------------------------------------------------------------------------------------------------------
September 30, 2005 March 31, 2005 Change
---------------------------------------------------------------------------------------------------------------------
Current Liabilities
Trade payables 324,505 336,499 -11,994
Short-term borrowings 147,310 183,518 -36,208
Other current liabilities 155,108 151,497 3,611
Total Current Liabilities 626,923 671,514 -44,591
Fixed Liabilities
Long-term indebtedness 224,444 226,567 -2,123
Retirement benefit obligation 92,458 92,672 -214
Other fixed liabilities 47,327 48,767 -1,440
Total Fixed Liabilities 364,229 368,006 -3,777
---------------------------------------------------------------------------------------------------------------------
Total Liabilities 991,152 1,039,520 -48,368
---------------------------------------------------------------------------------------------------------------------
Minority Interest 51,761 51,151 610
---------------------------------------------------------------------------------------------------------------------
Shareholders' Investment
Common stock 135,364 135,364 -
Additional paid-in capital 186,450 186,551 -101
Retained earnings 620,034 584,515 35,519
Accumulated other comprehensive income (loss) -15,521 -21,963 6,442
Treasury stock -20,653 -21,469 816
Total Shareholders' Investment 905,674 862,998 42,676
---------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Investment 1,948,587 1,953,669 -5,082
---------------------------------------------------------------------------------------------------------------------
Note: Other comprehensive income;
Net unrealized holding gains on available-for-sale securities 6,623 4,791 1,832
Pension liability adjustments -14,213 -14,652 439
Net unrealized gains (losses) on derivative instruments 183 117 66
Cumulative translation adjustments -8,114 -12,219 4,105
Reference: Exchange rate September 30, 2005 March 31, 2005
US$ 1 Yen 113.19 Yen 107.39
EURO 1 Yen 136.13 Yen 138.87
4. RETAINED EARNINGS
(Half year ended September 30, 2005 and Year ended March 31, 2005) (Millions of yen)
---------------------------------------------------------------------------------------------------------------------
Half year ended Year ended
September 30, 2005 March 31, 2005
---------------------------------------------------------------------------------------------------------------------
Retained earnings (beginning balance) 584,515 515,372
Adjustment for change of fiscal period on consolidated subsidiaries - 777
Net income 42,867 83,143
Cash dividends 7,348 14,777
Retained earnings (ending balance) 620,034 584,515
---------------------------------------------------------------------------------------------------------------------
18
$$/BREAK/$$END
5. CONSOLIDATED STATEMENTS OF CASH FLOWS
(Half year ended September 30, 2005 and 2004 and Year ended March 31, 2005) (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2005 September 30, 2004 March 31, 2005
------------------------------------------------------------------------------------------------------------------------------------
I. Cash Flows from Operating Activities:
1. Net income 42,867 35,821 83,143
2. Adjustments to reconcile net income to net cash
provided by operating activities--
Depreciation and amortization 39,812 36,963 78,201
Equity in earnings of affiliates, net of dividends received -110 -631 -1,966
Deferred income taxes -1,105 2,362 11,353
Loss on disposal and sales of tangible fixed assets 1,059 1,569 4,056
Changes in assets and liabilities--
(Increase) decrease in trade receivables 15,508 27,001 -26,429
(Increase) decrease in inventories 1,624 -6,122 -12,885
Increase in finance receivables -17,194 -20,876 -30,294
(Decrease) increase in trade payables -12,414 -20,386 27,276
Decrease in accrued income taxes and
accrued expenses and other -563 -3,765 -13,719
(Decrease) increase in retirement benefit obligation -146 1,332 4,307
Other, net 4,059 4,712 9,737
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 73,397 57,980 132,780
------------------------------------------------------------------------------------------------------------------------------------
II. Cash Flows from Investing Activities:
1. Proceeds from sales of property, plant and equipment 312 578 721
2. Expenditures for tangible fixed assets -58,038 -37,758 -84,076
3. Payments for purchases of available-for-sale securities -60,213 -6,149 -79,431
4. Proceeds from sales of available-for-sale securities 62,788 5 118,120
5. (Increase) decrease in time deposits, net 910 118 -511
6. Acquisition of new subsidiaries, net of cash acquired - - -43,214
7. Other, net -7,675 9,267 -7,807
------------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities -61,916 -33,939 -96,198
------------------------------------------------------------------------------------------------------------------------------------
III. Cash Flows from Financing Activities:
1. Proceeds from long-term indebtedness 35,776 24,917 72,206
2. Repayment of long-term indebtedness -54,169 -33,832 -60,613
3. (Decrease) increase in short-term borrowings, net 20,654 9,099 -38,052
4. Proceeds from issuance of long-term debt securities - 9,000 18,000
5. Repayment of long-term debt securities -44,000 -18,000 -22,000
6. Dividend paid -7,348 -7,405 -14,793
7. Payment for purchase of treasury stocks -237 -251 -10,624
8. Other, net -471 -434 -563
------------------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities -49,795 -16,906 -56,439
------------------------------------------------------------------------------------------------------------------------------------
IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents -533 2,057 1,200
------------------------------------------------------------------------------------------------------------------------------------
V. Net Increase (Decrease) in Cash and Cash Equivalents -38,847 9,192 -18,657
------------------------------------------------------------------------------------------------------------------------------------
VI. Cash and Cash Equivalents at Beginning of Year 186,857 203,039 203,039
VII. Adjustment for Change of Fiscal Period on Consolidated Subsidiaries - 2,475 2,475
------------------------------------------------------------------------------------------------------------------------------------
VIII. Cash and Cash Equivalents at End of Period 148,010 214,706 186,857
------------------------------------------------------------------------------------------------------------------------------------
19
$$/BREAK/$$END
6. SEGMENT INFORMATION
(1) Industry Segment Information
(Three months ended September 30, 2005 and 2004) (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2005 September 30, 2004 Change %
------------------------------------------------------------------------------------------------------------------------------
OFFICE SOLUTION BUSINESS:
Net sales:
Unaffiliated customers 398,208 366,917 31,291 8.5
Intersegment - - - -
Total 398,208 366,917 31,291 8.5
------------------------------------------------------------------------------------------------------------------------------
Operating expenses 356,455 332,531 23,924 7.2
------------------------------------------------------------------------------------------------------------------------------
Operating income 41,753 34,386 7,367 21.4
Operating income on sales in Office Solution
Business (%) 10.5 9.4
------------------------------------------------------------------------------------------------------------------------------
INDUSTRY BUSINESS:
Net sales:
Unaffiliated customers 32,381 29,177 3,204 11.0
Intersegment 658 598 60 10.0
Total 33,039 29,775 3,264 11.0
------------------------------------------------------------------------------------------------------------------------------
Operating expenses 32,686 30,025 2,661 8.9
------------------------------------------------------------------------------------------------------------------------------
Operating income 353 -250 603 -
Operating income on sales in Industry Business (%) 1.1 -0.8
------------------------------------------------------------------------------------------------------------------------------
OTHER BUSINESS:
Net sales:
Unaffiliated customers 39,449 43,359 -3,910 -9.0
Intersegment - - - -
Total 39,449 43,359 -3,910 -9.0
------------------------------------------------------------------------------------------------------------------------------
Operating expenses 38,279 45,229 -6,950 -15.4
------------------------------------------------------------------------------------------------------------------------------
Operating income 1,170 -1,870 3,040 -
Operating income on sales in Other Business (%) 3.0 -4.3
------------------------------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -658 -598 -60 -
Total -658 -598 -60 -
------------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Intersegment -685 -590 -95 -
Corporate 13,678 13,887 -209 -
Total 12,993 13,297 -304 -
------------------------------------------------------------------------------------------------------------------------------
Operating income -13,651 -13,895 244 -
------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
Unaffiliated customers 470,038 439,453 30,585 7.0
Intersegment - - - -
Total 470,038 439,453 30,585 7.0
------------------------------------------------------------------------------------------------------------------------------
Operating expenses 440,413 421,082 19,331 4.6
------------------------------------------------------------------------------------------------------------------------------
Operating income 29,625 18,371 11,254 61.3
Operating income on consolidated net sales (%) 6.3 4.2
------------------------------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------
September 30, 2005 September 30, 2004 Change %
------------------------------------------------------------------------------------------------------------------------------
Office Solution Business 1,394,012 1,196,759 197,253 16.5
Industry Business 73,231 78,910 -5,679 -7.2
Other Business 115,397 130,783 -15,386 -11.8
Elimination -7,536 -9,184 1,648 -17.9
Corporate assets 373,483 480,187 -106,704 -22.2
------------------------------------------------------------------------------------------------------------------------------
Total 1,948,587 1,877,455 71,132 3.8
------------------------------------------------------------------------------------------------------------------------------
Capital expenditure: (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2005 September 30, 2004 Change %
------------------------------------------------------------------------------------------------------------------------------
Office Solution Business 19,483 15,908 3,575 22.5
Industry Business 2,577 2,090 487 23.3
Other Business 939 822 117 14.2
Corporate 449 770 -321 -41.7
------------------------------------------------------------------------------------------------------------------------------
Total 23,448 19,590 3,858 19.7
------------------------------------------------------------------------------------------------------------------------------
Depreciation: (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2005 September 30, 2004 Change %
------------------------------------------------------------------------------------------------------------------------------
Office Solution Business 12,937 11,831 1,106 9.3
Industry Business 1,658 1,885 -227 -12.0
Other Business 590 665 -75 -11.3
Corporate 282 717 -435 -60.7
------------------------------------------------------------------------------------------------------------------------------
Total 15,467 15,098 369 2.4
------------------------------------------------------------------------------------------------------------------------------
Note: Effective from this financial period, our business segment is changed into
three categories such as "Office Solution", "Industry" and "Other". Accordingly,
information for the previous corresponding period has been reclassified to
conform with the current classification.
20
$$/BREAK/$$END
(Half year ended September 30, 2005 and 2004 and Year ended March 31, 2005) (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2005 September 30, 2004 Change % March 31, 2005
----------------------------------------------------------------------------------------------------------------------------------
OFFICE SOLUTION BUSINESS:
Net sales:
Unaffiliated customers 786,281 734,662 51,619 7.0 1,531,428
Intersegment - - - - -
Total 786,281 734,662 51,619 7.0 1,531,428
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 695,849 650,741 45,108 6.9 1,335,059
----------------------------------------------------------------------------------------------------------------------------------
Operating income 90,432 83,921 6,511 7.8 196,369
Operating income on sales in Office Solution
Business (%) 11.5 11.4 12.8
----------------------------------------------------------------------------------------------------------------------------------
INDUSTRY BUSINESS:
Net sales:
Unaffiliated customers 58,459 58,760 -301 -0.5 119,408
Intersegment 1,244 1,266 -22 -1.7 2,506
Total 59,703 60,026 -323 -0.5 121,914
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 59,874 59,245 629 1.1 121,872
----------------------------------------------------------------------------------------------------------------------------------
Operating income -171 781 -952 - 42
Operating income on sales in Industry
Business (%) -0.3 1.3 0.0
----------------------------------------------------------------------------------------------------------------------------------
OTHER BUSINESS:
Net sales:
Unaffiliated customers 78,280 82,581 -4,301 -5.2 163,272
Intersegment - - - - -
Total 78,280 82,581 -4,301 -5.2 163,272
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 76,152 83,820 -7,668 -9.1 167,431
----------------------------------------------------------------------------------------------------------------------------------
Operating income 2,128 -1,239 3,367 - -4,159
Operating income on sales in Other Business (%) 2.7 -1.5 -2.5
----------------------------------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -1,244 -1,266 22 - -2,506
Total -1,244 -1,266 22 - -2,506
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Intersegment -1,279 -1,268 -11 - -2,475
Corporate 25,517 25,707 -190 - 56,715
Total 24,238 24,439 -201 - 54,240
----------------------------------------------------------------------------------------------------------------------------------
Operating income -25,482 -25,705 223 - -56,746
----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
Unaffiliated customers 923,020 876,003 47,017 5.4 1,814,108
Intersegment - - - - -
Total 923,020 876,003 47,017 5.4 1,814,108
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 856,113 818,245 37,868 4.6 1,678,602
----------------------------------------------------------------------------------------------------------------------------------
Operating income 66,907 57,758 9,149 15.8 135,506
Operating income on consolidated net sales (%) 7.2 6.6 7.5
----------------------------------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
September 30, 2005 September 30, 2004 Change % March 31, 2005
----------------------------------------------------------------------------------------------------------------------------------
Office Solution Business 1,394,012 1,196,759 197,253 16.5 1,358,136
Industry Business 73,231 78,910 -5,679 -7.2 72,406
Other Business 115,397 130,783 -15,386 -11.8 125,278
Elimination -7,536 -9,184 1,648 -17.9 -10,174
Corporate assets 373,483 480,187 -106,704 -22.2 408,023
----------------------------------------------------------------------------------------------------------------------------------
Total 1,948,587 1,877,455 71,132 3.8 1,953,669
----------------------------------------------------------------------------------------------------------------------------------
Capital expenditure: (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2005 September 30, 2004 Change % March 31, 2005
----------------------------------------------------------------------------------------------------------------------------------
Office Solution Business 51,456 32,245 19,211 59.6 70,638
Industry Business 4,573 3,603 970 26.9 8,509
Other Business 1,455 1,240 215 17.3 3,451
Corporate 684 1,149 -465 -40.5 2,103
----------------------------------------------------------------------------------------------------------------------------------
Total 58,168 38,237 19,931 52.1 84,701
----------------------------------------------------------------------------------------------------------------------------------
Depreciation: (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2005 September 30, 2004 Change % March 31, 2005
----------------------------------------------------------------------------------------------------------------------------------
Office Solution Business 26,320 25,076 1,244 5.0 53,439
Industry Business 3,150 3,425 -275 -8.0 7,450
Other Business 1,104 1,169 -65 -5.6 2,635
Corporate 531 1,371 -840 -61.3 3,272
----------------------------------------------------------------------------------------------------------------------------------
Total 31,105 31,041 64 0.2 66,796
----------------------------------------------------------------------------------------------------------------------------------
Note: Effective from this financial period, our business segment is changed into
three categories such as "Office Solution", "Industry" and "Other". Accordingly,
information for the previous corresponding period has been reclassified to
conform with the current classification.
21
$$/BREAK/$$END
(2) Geographic Segment Information
(Three months ended September 30, 2005 and 2004) (Millions of yen)
-----------------------------------------------------------------------------------------------------------------
Three months ended Three months ended
September 30, 2005 September 30, 2004 Change %
-----------------------------------------------------------------------------------------------------------------
JAPAN:
Net sales:
External customers 254,094 241,810 12,284 5.1
Intersegment 99,327 93,541 5,786 6.2
Total 353,421 335,351 18,070 5.4
-----------------------------------------------------------------------------------------------------------------
Operating expenses 335,278 327,311 7,967 2.4
-----------------------------------------------------------------------------------------------------------------
Operating income 18,143 8,040 10,103 125.7
Operating income on sales in Japan(%) 5.1 2.4
-----------------------------------------------------------------------------------------------------------------
THE AMERICAS:
Net sales:
External customers 96,021 82,552 13,469 16.3
Intersegment 445 3,519 -3,074 -87.4
Total 96,466 86,071 10,395 12.1
-----------------------------------------------------------------------------------------------------------------
Operating expenses 91,325 81,812 9,513 11.6
-----------------------------------------------------------------------------------------------------------------
Operating income 5,141 4,259 882 20.7
Operating income on sales in the Americas(%) 5.3 4.9
-----------------------------------------------------------------------------------------------------------------
EUROPE:
Net sales:
External customers 96,093 93,315 2,778 3.0
Intersegment 1,326 848 478 56.4
Total 97,419 94,163 3,256 3.5
-----------------------------------------------------------------------------------------------------------------
Operating expenses 93,350 89,354 3,996 4.5
-----------------------------------------------------------------------------------------------------------------
Operating income 4,069 4,809 -740 -15.4
Operating income on sales in Europe(%) 4.2 5.1
-----------------------------------------------------------------------------------------------------------------
OTHER:
Net sales:
External customers 23,830 21,776 2,054 9.4
Intersegment 24,392 22,808 1,584 6.9
Total 48,222 44,584 3,638 8.2
-----------------------------------------------------------------------------------------------------------------
Operating expenses 44,808 41,549 3,259 7.8
-----------------------------------------------------------------------------------------------------------------
Operating income 3,414 3,035 379 12.5
Operating income on sales in Other(%) 7.1 6.8
-----------------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -125,490 -120,716 -4,774 -
Total -125,490 -120,716 -4,774 -
-----------------------------------------------------------------------------------------------------------------
Operating expenses: -124,348 -118,944 -5,404 -
-----------------------------------------------------------------------------------------------------------------
Operating income -1,142 -1,772 630 -
-----------------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
External customers 470,038 439,453 30,585 7.0
Intersegment - - - -
Total 470,038 439,453 30,585 7.0
-----------------------------------------------------------------------------------------------------------------
Operating expenses 440,413 421,082 19,331 4.6
-----------------------------------------------------------------------------------------------------------------
Operating income 29,625 18,371 11,254 61.3
Operating income on consolidated net sales(%) 6.3 4.2
-----------------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
-----------------------------------------------------------------------------------------------------------------
September 30, 2005 September 30, 2004 Change %
-----------------------------------------------------------------------------------------------------------------
Japan 1,186,255 1,069,762 116,493 10.9
The Americas 235,714 205,198 30,516 14.9
Europe 226,006 206,108 19,898 9.7
Other 73,123 60,406 12,717 21.1
Elimination -145,994 -144,207 -1,787 1.2
Corporate assets 373,483 480,188 -106,705 -22.2
-----------------------------------------------------------------------------------------------------------------
Total 1,948,587 1,877,455 71,132 3.8
-----------------------------------------------------------------------------------------------------------------
22
$$/BREAK/$$END
(Half year ended September 30, 2005 and 2004 and Year ended March 31, 2005) (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Year ended
September 30, 2005 September 30, 2004 Change % March 31, 2005
----------------------------------------------------------------------------------------------------------------------------------
JAPAN:
Net sales:
External customers 495,618 481,473 14,145 2.9 994,499
Intersegment 204,313 189,951 14,362 7.6 392,216
Total 699,931 671,424 28,507 4.2 1,386,715
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 652,681 631,732 20,949 3.3 1,298,640
----------------------------------------------------------------------------------------------------------------------------------
Operating income 47,250 39,692 7,558 19.0 88,075
Operating income on sales in Japan(%) 6.8 5.9 6.4
----------------------------------------------------------------------------------------------------------------------------------
THE AMERICAS:
Net sales:
External customers 182,319 159,184 23,135 14.5 322,975
Intersegment 1,753 4,814 -3,061 -63.6 7,486
Total 184,072 163,998 20,074 12.2 330,461
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 177,607 157,865 19,742 12.5 316,651
----------------------------------------------------------------------------------------------------------------------------------
Operating income 6,465 6,133 332 5.4 13,810
Operating income on sales in the Americas(%) 3.5 3.7 4.2
----------------------------------------------------------------------------------------------------------------------------------
EUROPE:
Net sales:
External customers 199,569 193,941 5,628 2.9 412,333
Intersegment 2,446 1,789 657 36.7 3,310
Total 202,015 195,730 6,285 3.2 415,643
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 192,048 184,768 7,280 3.9 391,271
----------------------------------------------------------------------------------------------------------------------------------
Operating income 9,967 10,962 -995 -9.1 24,372
Operating income on sales in Europe(%) 4.9 5.6 5.9
----------------------------------------------------------------------------------------------------------------------------------
OTHER:
Net sales:
External customers 45,514 41,405 4,109 9.9 84,301
Intersegment 48,019 43,818 4,201 9.6 89,647
Total 93,533 85,223 8,310 9.8 173,948
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 86,934 79,788 7,146 9.0 162,042
----------------------------------------------------------------------------------------------------------------------------------
Operating income 6,599 5,435 1,164 21.4 11,906
Operating income on sales in Other(%) 7.1 6.4 6.8
----------------------------------------------------------------------------------------------------------------------------------
CORPORATE AND ELIMINATIONS:
Net sales:
Intersegment -256,531 -240,372 -16,159 - -492,659
Total -256,531 -240,372 -16,159 - -492,659
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses: -253,157 -235,908 -17,249 - -490,002
----------------------------------------------------------------------------------------------------------------------------------
Operating income -3,374 -4,464 1,090 - -2,657
----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED:
Net sales:
External customers 923,020 876,003 47,017 5.4 1,814,108
Intersegment - - - - -
Total 923,020 876,003 47,017 5.4 1,814,108
----------------------------------------------------------------------------------------------------------------------------------
Operating expenses 856,113 818,245 37,868 4.6 1,678,602
----------------------------------------------------------------------------------------------------------------------------------
Operating income 66,907 57,758 9,149 15.8 135,506
Operating income on consolidated net sales(%) 7.2 6.6 7.5
----------------------------------------------------------------------------------------------------------------------------------
Identifiable assets: (Millions of yen)
----------------------------------------------------------------------------------------------------------------------------------
September 30, 2005 September 30, 2004 Change % March 31, 2005
----------------------------------------------------------------------------------------------------------------------------------
Japan 1,186,255 1,069,762 116,493 10.9 1,187,190
The Americas 235,714 205,198 30,516 14.9 206,979
Europe 226,006 206,108 19,898 9.7 228,568
Other 73,123 60,406 12,717 21.1 66,319
Elimination -145,994 -144,207 -1,787 1.2 -143,410
Corporate assets 373,483 480,188 -106,705 -22.2 408,023
----------------------------------------------------------------------------------------------------------------------------------
Total 1,948,587 1,877,455 71,132 3.8 1,953,669
----------------------------------------------------------------------------------------------------------------------------------
23
$$/BREAK/$$END
7. SIGNIFICANT ACCOUNTING POLICIES (CONSOLIDATED)
1. CHANGE RELATING TO THE SCALE OF CONSOLIDATION AND THE APPLICATION OF THE
EQUITY METHOD FROM APRIL 1, 2005 TO SEPTEMBER 30, 2005.
Consolidated subsidiaries:
1 Addition
9 Removals
Companies accounted for by the equity method:
2 Removals
2. CONSOLIDATED ACCOUNTING POLICIES (SUMMARY)
(1) Principles of Consolidation
The consolidated financial statements include the accounts of Ricoh and its
consolidated subsidiaries. Investments in 20% to 50% owned companies when the
company has the ability to exercise significant influence are accounted for on
the equity basis. All significant inter-company balances and transactions have
been eliminated in consolidation.
(2) Securities
In conformity with SFAS No.115, securities are mainly classified as
available-for-sale securities. Available-for-sale securities are reported at
fair value with unrealized gains and losses, net of related taxes, excluded from
earnings and reported in accumulated other comprehensive income (loss).
The cost of the securities sold is computed based on the average cost of each
security held at the time of sale.
(3) Inventories
Inventories are mainly stated at the lower of average cost or market. Inventory
costs include raw materials, labor and manufacturing overheads.
(4) Plant and Equipment
Depreciation of plant and equipment is computed principally by using the
declining-balance method over the estimated useful lives. Most of the foreign
subsidiaries have adopted the straight-line method for computing depreciation.
Certain leased buildings, machinery and equipment are accounted for as capital
leases in conformity with SFAS No.13, "Accounting for Leases."
(5) Goodwill and Other Intangible Assets
In conformity with SFAS No.142, Goodwill and intangible asset determined to have
an indefinite useful life are not amortized. SFAS No.142 requires annual
impairment testing thereof.
(6) Use of Estimates
Management of the Company has made a number of estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses,
including impairment losses of long-lived assets and the disclosures of fair
value of financial instruments and contingent assets and liabilities, to prepare
these financial statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
24
$$/BREAK/$$END
8. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) FAIR VALUE OF MARKETABLE SECURITIES
The securities and the respective cost, gross unrealized holding gains, gross
unrealized holding losses and fair value as of September 30, 2005 and March 31,
2005 are as follows:
(Millions of yen)
---------------------------------------------------------------------------------------------------------------------
September 30, 2005
---------------------------------------------------------------------------------------------------------------------
Gross unrealized Gross unrealized
Cost holding gains holding losses Fair value
---------------------------------------------------------------------------------------------------------------------
Current:
Corporate debt securities 144 - - 144
Other 1 - - 1
---------------------------------------------------------------------------------------------------------------------
145 - - 145
---------------------------------------------------------------------------------------------------------------------
Noncurrent:
Equity securities 6,920 12,041 37 18,924
Corporate debt securities 6,000 30 - 6,030
Other 684 258 - 942
Nonmarketable securities (at cost) 6,419 - - 6,419
---------------------------------------------------------------------------------------------------------------------
20,023 12,329 37 32,315
---------------------------------------------------------------------------------------------------------------------
(Millions of yen)
---------------------------------------------------------------------------------------------------------------------
March 31, 2005
---------------------------------------------------------------------------------------------------------------------
Gross unrealized Gross unrealized
Cost holding gains holding losses Fair value
---------------------------------------------------------------------------------------------------------------------
Current:
Corporate debt securities 137 - - 137
Other 1 - - 1
---------------------------------------------------------------------------------------------------------------------
138 - - 138
---------------------------------------------------------------------------------------------------------------------
Noncurrent:
Equity securities 7,479 9,021 49 16,451
Corporate debt securities 6,000 45 - 6,045
Other 1,229 480 - 1,709
Nonmarketable securities (at cost) 6,949 - - 6,949
---------------------------------------------------------------------------------------------------------------------
21,657 9,546 49 31,154
---------------------------------------------------------------------------------------------------------------------
(2) DERIVATIVES
The Company and certain of its subsidiaries enter into various financial
instrument contracts in the normal course of business and in connection with the
management of their assets and liabilities. The outstanding agreements, carrying
amount and estimated fair value of derivative financial instruments as of
September 30, 2005, and March 31, 2005 are as follows:
(Millions of yen)
---------------------------------------------------------------------------------------------------------------------
September 30, 2005
---------------------------------------------------------------------------------------------------------------------
Carrying Estimated
amount Fair value
---------------------------------------------------------------------------------------------------------------------
Interest rate swap agreements, net 1,283 1,283
Foreign currency contracts-net credit -917 -917
Currency options-net credit 59 59
---------------------------------------------------------------------------------------------------------------------
Total 425 425
---------------------------------------------------------------------------------------------------------------------
(Millions of yen)
---------------------------------------------------------------------------------------------------------------------
March 31, 2005
---------------------------------------------------------------------------------------------------------------------
Carrying Estimated
amount Fair value
---------------------------------------------------------------------------------------------------------------------
Interest rate swap agreements, net 1,683 1,683
Foreign currency contracts-net credit 181 181
Currency options -813 -813
---------------------------------------------------------------------------------------------------------------------
Total 1,051 1,051
---------------------------------------------------------------------------------------------------------------------
(3) TRANSACTIONS OF RICOH WITH AFFILIATES (Millions of yen)
---------------------------------------------------------------------------------------------------------------------
September 30, 2005 March 31, 2005
---------------------------------------------------------------------------------------------------------------------
Account balances:
Receivables 3,117 3,416
Payables 2,877 2,964
---------------------------------------------------------------------------------------------------------------------
(Millions of yen)
---------------------------------------------------------------------------------------------------------------------
Half year ended Year ended
September 30, 2005 March 31, 2005
---------------------------------------------------------------------------------------------------------------------
Transactions:
Sales 9,258 19,365
Purchases 10,563 27,286
Dividend income 825 1,154
---------------------------------------------------------------------------------------------------------------------
25
$$/BREAK/SECTION=A/ELEMENT=1
/NOPRE/NOPOST/NOFOLIO/$$END
-APPENDIX- (Half year ended September 30, 2005)
1. CONSOLIDATED SALES BY PRODUCT CATEGORY
(Three months ended September 30, 2005 and 2004) (Millions of yen)
-------------------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended Change excluding
September 30, 2005 September 30, 2004 Change % exchange impact %
-------------------------------------------------------------------------------------------------------------------------------
(Office Solution Business)
Imaging Solution Business 343,643 314,562 29,081 9.2 26,738 8.5
Percentage of net sales (%) 73.1 71.6
Domestic 139,619 128,418 11,201 8.7 11,201 8.7
Overseas 204,024 186,144 17,880 9.6 15,537 8.3
Network System Solution Business 54,565 52,355 2,210 4.2 2,189 4.2
Percentage of net sales (%) 11.6 11.9
Domestic 52,385 50,844 1,541 3.0 1,541 3.0
Overseas 2,180 1,511 669 44.3 648 42.9
Office Solution Business Total 398,208 366,917 31,291 8.5 28,927 7.9
Percentage of net sales (%) 84.7 83.5
Domestic 192,004 179,262 12,742 7.1 12,742 7.1
Overseas 206,204 187,655 18,549 9.9 16,185 8.6
The Americas 91,407 79,582 11,825 14.9 10,890 13.7
Europe 92,393 87,497 4,896 5.6 4,066 4.6
Other 22,404 20,576 1,828 8.9 1,229 6.0
-------------------------------------------------------------------------------------------------------------------------------
(Industry Business)
Industry Business 32,381 29,177 3,204 11.0 3,151 10.8
Percentage of net sales (%) 6.9 6.6
Domestic 20,220 19,426 794 4.1 794 4.1
Overseas 12,161 9,751 2,410 24.7 2,357 24.2
The Americas 5,082 2,774 2,308 83.2 2,279 82.2
Europe 3,528 3,665 -137 -3.7 -169 -4.6
Other 3,551 3,312 239 7.2 247 7.5
-------------------------------------------------------------------------------------------------------------------------------
(Other Business)
Other Business 39,449 43,359 -3,910 -9.0 -3,982 -9.2
Percentage of net sales (%) 8.4 9.9
Domestic 34,702 37,176 -2,474 -6.7 -2,474 -6.7
Overseas 4,747 6,183 -1,436 -23.2 -1,508 -24.4
The Americas 270 573 -303 -52.9 -306 -53.4
Europe 999 1,502 -503 -33.5 -510 -34.0
Other 3,478 4,108 -630 -15.3 -692 -16.8
-------------------------------------------------------------------------------------------------------------------------------
Grand Total 470,038 439,453 30,585 7.0 28,096 6.4
Percentage of net sales (%) 100.0 100.0
Domestic 246,926 235,864 11,062 4.7 11,062 4.7
Percentage of net sales (%) 52.5 53.7
Overseas 223,112 203,589 19,523 9.6 17,034 8.4
Percentage of net sales (%) 47.5 46.3
The Americas 96,759 82,929 13,830 16.7 12,863 15.5
Percentage of net sales (%) 20.6 18.9
Europe 96,920 92,664 4,256 4.6 3,387 3.7
Percentage of net sales (%) 20.6 21.1
Other 29,433 27,996 1,437 5.1 784 2.8
Percentage of net sales (%) 6.3 6.3
-------------------------------------------------------------------------------------------------------------------------------
Reference: Exchange rate
US$ 1 Yen 111.22 Yen 110.01 Yen 1.21
EURO 1 Yen 135.79 Yen 134.44 Yen 1.35
Each category includes the following product line:
Imaging Solution Business Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo
copiers, scanners, MFPs(multifunctional printers), laser printers and software
Network system Solution Business Personal computers, PC servers, network systems and network related software
Industry Business Thermal media, optical equipments, semiconductors, electronic component and measuring equipments
Other Business Optical discs and digital camera
A1
$$/BREAK/$$END
(Half year ended September 30, 2005 and 2004 and Year ended March 31, 2005) (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Change excluding Year ended
September 30, 2005 September 30, 2004 Change % exchange impact % March 31, 2005
------------------------------------------------------------------------------------------------------------------------------------
(Office Solution Business)
Imaging Solution Business 693,130 639,056 54,074 8.5 50,781 7.9 1,332,299
Percentage of net sales
(%) 75.1 73.0 73.4
Domestic 289,241 267,770 21,471 8.0 21,471 8.0 564,163
Overseas 403,889 371,286 32,603 8.8 29,310 7.9 768,136
Network System Solution
Business 93,151 95,606 -2,455 -2.6 -2,498 -2.6 199,129
Percentage of net sales
(%) 10.1 10.9 11.0
Domestic 88,984 92,683 -3,699 -4.0 -3,699 -4.0 192,304
Overseas 4,167 2,923 1,244 42.6 1,201 41.1 6,825
Office Solution Business
Total 786,281 734,662 51,619 7.0 48,283 6.6 1,531,428
Percentage of net sales
(%) 85.2 83.9 84.4
Domestic 378,225 360,453 17,772 4.9 17,772 4.9 756,467
Overseas 408,056 374,209 33,847 9.0 30,511 8.2 774,961
The Americas 174,373 153,727 20,646 13.4 21,294 13.9 312,188
Europe 191,064 181,476 9,588 5.3 6,419 3.5 385,689
Other 42,619 39,006 3,613 9.3 2,798 7.2 77,084
------------------------------------------------------------------------------------------------------------------------------------
(Industry Business)
Industry Business 58,459 58,760 -301 -0.5 -375 -0.6 119,408
Percentage of net sales
(%) 6.3 6.7 6.6
Domestic 36,078 39,704 -3,626 -9.1 -3,626 -9.1 80,833
Overseas 22,381 19,056 3,325 17.4 3,251 17.1 38,575
The Americas 8,221 5,116 3,105 60.7 3,136 61.3 10,112
Europe 7,473 7,214 259 3.6 136 1.9 15,338
Other 6,687 6,726 -39 -0.6 -21 -0.3 13,125
------------------------------------------------------------------------------------------------------------------------------------
(Other Business)
Other Business 78,280 82,581 -4,301 -5.2 -4,386 -5.3 163,272
Percentage of net sales
(%) 8.5 9.4 9.0
Domestic 66,614 69,019 -2,405 -3.5 -2,405 -3.5 135,675
Overseas 11,666 13,562 -1,896 -14.0 -1,981 -14.6 27,597
The Americas 1,321 2,487 -1,166 -46.9 -1,165 -46.8 3,297
Europe 2,862 4,297 -1,435 -33.4 -1,475 -34.3 7,879
Other 7,483 6,778 705 10.4 659 9.7 16,421
------------------------------------------------------------------------------------------------------------------------------------
Grand Total 923,020 876,003 47,017 5.4 43,522 5.0 1,814,108
Percentage of net sales
(%) 100.0 100.0 100.0
Domestic 480,917 469,176 11,741 2.5 11,741 2.5 972,975
Percentage of net sales
(%) 52.1 53.6 53.6
Overseas 442,103 406,827 35,276 8.7 31,781 7.8 841,133
Percentage of net sales
(%) 47.9 46.4 46.4
The Americas 183,915 161,330 22,585 14.0 23,265 14.4 325,597
Percentage of net
sales (%) 19.9 18.4 17.9
Europe 201,399 192,987 8,412 4.4 5,080 2.6 408,906
Percentage of net
sales (%) 21.8 22.0 22.5
Other 56,789 52,510 4,279 8.1 3,436 6.5 106,630
Percentage of net
sales (%) 6.2 6.0 6.0
------------------------------------------------------------------------------------------------------------------------------------
Reference: Exchange rate
US$ 1 Yen 109.42 Yen 109.83 Yen -0.41 Yen 107.58
EURO 1 Yen 135.67 Yen 133.31 Yen 2.36 Yen 135.25
Each category includes the following product line:
Imaging Solution Business Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers,
scanners, MFPs(multifunctional printers), laser printers and software
Network system Solution Business Personal computers, PC servers, network systems and network related software
Industry Business Thermal media, optical equipments, semiconductors, electronic component and measuring equipments
Other Business Optical discs and digital camera
A2
$$/BREAK/$$END
2. CONSOLIDATED SALES BY PREVIOUS PRODUCT CATEGORY (FOR REFERENCE)
(Three months ended September 30, 2005 and 2004) (Millions of yen)
--------------------------------------------------------------------------------------------------------------------------------
Three months ended Three months ended Change excluding
September 30, 2005 September 30, 2004 Change % exchange impact %
--------------------------------------------------------------------------------------------------------------------------------
(Office Equipment)
Imaging Solutions:
Digital Imaging Systems 135,959 136,148 -189 -0.1 -1,036 -0.8
Percentage of net sales (%) 28.9 31.0
Domestic 54,598 54,818 -220 -0.4 -220 -0.4
Overseas 81,361 81,330 31 0.0 -816 -1.0
Other Imaging Systems 36,056 38,828 -2,772 -7.1 -3,005 -7.7
Percentage of net sales (%) 7.7 8.8
Domestic 14,716 14,917 -201 -1.3 -201 -1.3
Overseas 21,340 23,911 -2,571 -10.8 -2,804 -11.7
Total Imaging Solutions 172,015 174,976 -2,961 -1.7 -4,041 -2.3
Percentage of net sales (%) 36.6 39.8
Domestic 69,314 69,735 -421 -0.6 -421 -0.6
Overseas 102,701 105,241 -2,540 -2.4 -3,620 -3.4
--------------------------------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 181,508 149,373 32,135 21.5 30,815 20.6
Percentage of net sales (%) 38.6 34.0
Domestic 72,915 61,260 11,655 19.0 11,655 19.0
Overseas 108,593 88,113 20,480 23.2 19,160 21.7
Other Input/Output Systems 2,633 3,594 -961 -26.7 -968 -26.9
Percentage of net sales (%) 0.6 0.8
Domestic 615 551 64 11.6 64 11.6
Overseas 2,018 3,043 -1,025 -33.7 -1,032 -33.9
Total Network Input/Output Systems 184,141 152,967 31,174 20.4 29,847 19.5
Percentage of net sales (%) 39.2 34.8
Domestic 73,530 61,811 11,719 19.0 11,719 19.0
Overseas 110,611 91,156 19,455 21.3 18,128 19.9
--------------------------------------------------------------------------------------------------------------------------------
Network System Solutions 56,141 54,049 2,092 3.9 2,071 3.8
Percentage of net sales (%) 11.9 12.3
Domestic 53,961 52,538 1,423 2.7 1,423 2.7
Overseas 2,180 1,511 669 44.3 648 42.9
--------------------------------------------------------------------------------------------------------------------------------
Office Equipment Total 412,297 381,992 30,305 7.9 27,877 7.3
Percentage of net sales (%) 87.7 86.9
Domestic 196,805 184,084 12,721 6.9 12,721 6.9
Overseas 215,492 197,908 17,584 8.9 15,156 7.7
The Americas 94,266 82,719 11,547 14.0 10,574 12.8
Europe 96,039 91,678 4,361 4.8 3,497 3.8
Other 25,187 23,511 1,676 7.1 1,085 4.6
--------------------------------------------------------------------------------------------------------------------------------
(Other Businesses)
Other Businesses 57,741 57,461 280 0.5 219 0.4
Percentage of net sales (%) 12.3 13.1
Domestic 50,121 51,780 -1,659 -3.2 -1,659 -3.2
Overseas 7,620 5,681 1,939 34.1 1,878 33.1
The Americas 2,493 210 2,283 1,087.1 2,289 1,090.0
Europe 881 986 -105 -10.6 -110 -11.2
Other 4,246 4,485 -239 -5.3 -301 -6.7
--------------------------------------------------------------------------------------------------------------------------------
Grand Total 470,038 439,453 30,585 7.0 28,096 6.4
Percentage of net sales (%) 100.0 100.0
Domestic 246,926 235,864 11,062 4.7 11,062 4.7
Percentage of net sales (%) 52.5 53.7
Overseas 223,112 203,589 19,523 9.6 17,034 8.4
Percentage of net sales (%) 47.5 46.3
The Americas 96,759 82,929 13,830 16.7 12,863 15.5
Percentage of net sales (%) 20.6 18.9
Europe 96,920 92,664 4,256 4.6 3,387 3.7
Percentage of net sales (%) 20.6 21.1
Other 29,433 27,996 1,437 5.1 784 2.8
Percentage of net sales (%) 6.3 6.3
--------------------------------------------------------------------------------------------------------------------------------
Reference: Exchange rate
US$ 1 Yen 111.22 Yen 110.01 Yen 1.21
EURO 1 Yen 135.79 Yen 134.44 Yen 1.35
Each category includes the following product line:
Digital Imaging Systems Digital PPCs, color PPCs, digital duplicators and facsimile machines
Other Imaging Systems Analog PPCs, diazo copiers, and thermal paper
Printing Systems MFPs(multifunctional printers), laser printers and software
Other Input/Output Systems Optical discs and system scanners
Network System Solutions Personal computers, PC servers, network systems and network related software
Other Businesses Optical equipments, metering equipments and semiconductors
A3
$$/BREAK/$$END
(Half year ended September 30, 2005 and 2004 and Year ended March 31, 2005) (Millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Half year ended Half year ended Change excluding Year ended
September 30, 2005 September 30, 2004 Change % exchange impact % March 31, 2005
------------------------------------------------------------------------------------------------------------------------------------
(Office Equipment)
Imaging Solutions:
Digital Imaging Systems 276,229 275,531 698 0.3 -169 -0.1 559,023
Percentage of net sales (%) 29.9 31.5 30.8
Domestic 111,409 113,924 -2,515 -2.2 -2,515 -2.2 231,526
Overseas 164,820 161,607 3,213 2.0 2,346 1.5 327,497
Other Imaging Systems 75,554 81,074 -5,520 -6.8 -5,918 -7.3 156,074
Percentage of net sales (%) 8.2 9.2 8.6
Domestic 30,157 30,912 -755 -2.4 -755 -2.4 59,371
Overseas 45,397 50,162 -4,765 -9.5 -5,163 -10.3 96,703
Total Imaging Solutions 351,783 356,605 -4,822 -1.4 -6,087 -1.7 715,097
Percentage of net sales (%) 38.1 40.7 39.4
Domestic 141,566 144,836 -3,270 -2.3 -3,270 -2.3 290,897
Overseas 210,217 211,769 -1,552 -0.7 -2,817 -1.3 424,200
------------------------------------------------------------------------------------------------------------------------------------
Network Input/Output Systems:
Printing Systems 361,729 301,343 60,386 20.0 58,283 19.3 655,328
Percentage of net sales (%) 39.2 34.4 36.1
Domestic 152,977 127,975 25,002 19.5 25,002 19.5 283,141
Overseas 208,752 173,368 35,384 20.4 33,281 19.2 372,187
Other Input/Output Systems 5,842 8,979 -3,137 -34.9 -3,150 -35.1 15,508
Percentage of net sales (%) 0.6 1.0 0.9
Domestic 1,342 1,490 -148 -9.9 -148 -9.9 3,247
Overseas 4,500 7,489 -2,989 -39.9 -3,002 -40.1 12,261
Total Network Input/Output Systems 367,571 310,322 57,249 18.4 55,133 17.8 670,836
Percentage of net sales (%) 39.8 35.4 37.0
Domestic 154,319 129,465 24,854 19.2 24,854 19.2 286,388
Overseas 213,252 180,857 32,395 17.9 30,279 16.7 384,448
------------------------------------------------------------------------------------------------------------------------------------
Network System Solutions 96,351 99,038 -2,687 -2.7 -2,730 -2.8 205,895
Percentage of net sales (%) 10.5 11.3 11.3
Domestic 92,184 96,115 -3,931 -4.1 -3,931 -4.1 199,070
Overseas 4,167 2,923 1,244 42.6 1,201 41.1 6,825
------------------------------------------------------------------------------------------------------------------------------------
Office Equipment Total 815,705 765,965 49,740 6.5 46,316 6.0 1,591,828
Percentage of net sales (%) 88.4 87.4 87.7
Domestic 388,069 370,416 17,653 4.8 17,653 4.8 776,355
Overseas 427,636 395,549 32,087 8.1 28,663 7.2 815,473
The Americas 181,226 160,944 20,282 12.6 20,952 13.0 324,853
Europe 199,010 191,189 7,821 4.1 4,525 2.4 403,574
Other 47,400 43,416 3,984 9.2 3,186 7.3 87,046
------------------------------------------------------------------------------------------------------------------------------------
(Other Businesses)
Other Businesses 107,315 110,038 -2,723 -2.5 -2,794 -2.5 222,280
Percentage of net sales (%) 11.6 12.6 12.3
Domestic 92,848 98,760 -5,912 -6.0 -5,912 -6.0 196,620
Overseas 14,467 11,278 3,189 28.3 3,118 27.6 25,660
The Americas 2,689 386 2,303 596.6 2,313 599.2 744
Europe 2,389 1,798 591 32.9 555 30.9 5,332
Other 9,389 9,094 295 3.2 250 2.7 19,584
------------------------------------------------------------------------------------------------------------------------------------
Grand Total 923,020 876,003 47,017 5.4 43,522 5.0 1,814,108
Percentage of net sales (%) 100.0 100.0 100.0
Domestic 480,917 469,176 11,741 2.5 11,741 2.5 972,975
Percentage of net sales (%) 52.1 53.6 53.6
Overseas 442,103 406,827 35,276 8.7 31,781 7.8 841,133
Percentage of net sales (%) 47.9 46.4 46.4
The Americas 183,915 161,330 22,585 14.0 23,265 14.4 325,597
Percentage of net sales (%) 19.9 18.4 17.9
Europe 201,399 192,987 8,412 4.4 5,080 2.6 408,906
Percentage of net sales (%) 21.8 22.0 22.5
Other 56,789 52,510 4,279 8.1 3,436 6.5 106,630
Percentage of net sales (%) 6.2 6.0 6.0
------------------------------------------------------------------------------------------------------------------------------------
Reference: Exchange rate
US$ 1 Yen 109.42 Yen 109.83 Yen -0.41 Yen 107.58
EURO 1 Yen 135.67 Yen 133.31 Yen 2.36 Yen 135.25
Each category includes the following product line:
Digital Imaging Systems Digital PPCs, color PPCs, digital duplicators and facsimile machines
Other Imaging Systems Analog PPCs, diazo copiers, and thermal paper
Printing Systems MFPs(multifunctional printers), laser printers and software
Other Input/Output Systems Optical discs and system scanners
Network System Solutions Personal computers, PC servers, network systems and network related software
Other Businesses Optical equipments, metering equipments and semiconductors
A4
$$/BREAK/$$END
3. FORECAST OF CONSOLIDATED PERFORMANCE
(Billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Half year ended Three months ending Half year ending Year ending
Sept. 30, 2005 Change Dec. 31, 2005 Change Mar. 31, 2006 Change Mar. 31, 2006 Change
Results % Forecast % Forecast % Forecast %
------------------------------------------------------------------------------------------------------------------------------------
Net sales 923.0 5.4 465.0 4.8 976.9 4.1 1,900.0 4.7
Gross profit 388.2 6.7 201.0 4.6 415.7 6.4 804.0 6.5
Operating income 66.9 15.8 38.0 -1.8 93.0 19.7 160.0 18.1
Income before income taxes 69.4 15.6 37.7 8.8 90.5 20.3 160.0 18.2
Net income 42.8 19.7 22.3 0.3 54.1 14.4 97.0 16.7
------------------------------------------------------------------------------------------------------------------------------------
Net income per share (yen) 58.40 - 30.36 - 73.67 - 132.07 -
------------------------------------------------------------------------------------------------------------------------------------
Capital expenditure 58.1 - 28.0 - 55.8 - 114.0 -
Depreciation for tangible fixed
assets 31.1 - 18.5 - 37.8 - 69.0 -
R&D expenditure 54.9 - 28.5 - 61.0 - 116.0 -
------------------------------------------------------------------------------------------------------------------------------------
Exchange rate (Yen/US$) 109.42 - 110.00 - 110.00 - 109.71 -
Exchange rate (Yen/EURO) 135.67 - 135.00 - 135.00 - 135.34 -
------------------------------------------------------------------------------------------------------------------------------------
4. FORECAST OF CONSOLIDATED SALES BY PRODUCT CATEGORY
(Billions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Half year ending March 31, 2006 Year ending March 31, 2006
------------------------------- --------------------------
Forecast Change Forecast(*) Change Forecast Change Forecast(*) Change
% % % %
------------------------------------------------------------------------------------------------------------------------------------
(Office Solution Business)
Imaging Solution Business 728.2 5.0 724.7 4.5 1,421.3 6.7 1,414.5 6.2
Domestic 310.5 4.8 310.5 4.8 599.7 6.3 599.7 6.3
Overseas 417.7 5.3 414.2 4.4 821.5 7.0 814.7 6.1
Network System Solution Business 109.9 6.2 109.9 6.2 203.0 2.0 203.0 1.9
Domestic 105.2 5.6 105.2 5.6 194.1 1.0 194.1 1.0
Overseas 4.7 20.5 4.7 20.5 8.8 29.9 8.8 29.3
Office Solution Business Total 838.1 5.2 834.6 4.7 1,624.3 6.1 1,617.5 5.6
Domestic 415.7 5.0 415.7 5.0 793.9 5.0 793.9 5.0
Overseas 422.4 5.4 418.9 4.5 830.4 7.2 823.6 6.3
The Americas 173.8 9.7 166.5 5.1 348.1 11.5 341.5 9.4
Europe 205.2 0.5 208.7 2.2 396.2 2.7 396.5 2.8
Other 43.4 14.0 43.7 14.8 86.0 11.6 85.5 10.9
------------------------------------------------------------------------------------------------------------------------------------
(Industry Business)
Industry Business 59.6 -1.7 59.5 -1.9 118.0 -1.1 117.8 -1.3
Domestic 36.7 -10.8 36.7 -10.8 72.7 -10.0 72.7 -10.0
Overseas 22.9 17.3 22.8 16.8 45.2 17.4 45.1 16.9
The Americas 7.0 40.1 6.7 34.1 15.2 50.5 14.9 47.9
Europe 8.0 -1.5 8.2 0.9 15.4 0.9 15.5 1.4
Other 7.9 23.5 7.9 23.5 14.5 11.1 14.6 11.3
------------------------------------------------------------------------------------------------------------------------------------
(Other Business)
Other Business 79.2 -1.7 79.4 -1.5 157.5 -3.5 157.6 -3.4
Domestic 66.3 -0.4 66.3 -0.4 132.9 -2.0 132.9 -2.0
Overseas 12.8 -8.1 13.1 -6.7 24.5 -11.0 24.6 -10.6
The Americas 0.2 -75.3 0.2 -75.3 1.5 -53.9 1.5 -53.8
Europe 5.4 50.8 5.4 50.8 8.2 4.9 8.2 4.4
Other 7.2 -24.3 7.5 -22.2 14.7 -10.0 14.9 -9.0
------------------------------------------------------------------------------------------------------------------------------------
Grand Total 976.9 4.1 973.5 3.8 1,900.0 4.7 1,893.0 4.4
Domestic 518.7 3.0 518.7 3.0 999.7 2.7 999.7 2.7
Overseas 458.1 5.5 454.8 4.7 900.3 7.0 893.3 6.2
The Americas 181.0 10.2 173.4 5.6 364.9 12.1 357.9 10.0
Europe 218.6 1.2 222.3 3.0 419.9 2.7 420.3 2.8
Other 58.5 8.3 59.1 9.2 115.3 8.2 115.0 7.9
------------------------------------------------------------------------------------------------------------------------------------
* Excluding foreign exchange impact
A5
$$/BREAK/SECTION=B/ELEMENT=1
/NOPRE/NOPOST/NOFOLIO/$$END
-APPENDIX B-
[SCHEDULE 1] CONSOLIDATED PERFORMANCE
----------------------------------------------------------------------------------------
Half year ended Half year ended Half year ended
September 30, September 30, September 30,
2003 2004 2005
----------------------------------------------------------------------------------------
Net sales (left axis) 888.0 876.0 923.0
Net income (right axis) 42.2 35.8 42.8
Return on equity (right axis) 6.2 4.4 4.8
Return on assets (right axis) 3.8 3.2 3.6
Net income per share (left axis) 56.79 48.48 58.40
----------------------------------------------------------------------------------------
[SCHEDULE 2] CONSOLIDATED SALES BY PRODUCT LINE
----------------------------------------------------------------------------------------
Half year ended Half year ended Half year ended
September 30, September 30, September 30,
2003 2004 2005
----------------------------------------------------------------------------------------
Imaging Solution Business 629.7 639.0 693.1
Network System Solution Business 93.5 95.6 93.1
Industry Business 54.6 58.7 58.4
Other Business 110.1 82.5 78.2
----------------------------------------------------------------------------------------
Imaging Solution Business (%) 70.9 73.0 75.1
Network System Solution Business (%) 10.5 10.9 10.1
Industry Business (%) 6.2 6.7 6.3
Other Business (%) 12.4 9.4 8.5
100.0 100.0 100.0
----------------------------------------------------------------------------------------
[SCHEDULE 3] CONSOLIDATED SALES BY GEOGRAPHIC AREA
----------------------------------------------------------------------------------------
Half year ended Half year ended Half year ended
September 30, September 30, September 30,
2003 2004 2005
----------------------------------------------------------------------------------------
Japan 448.6 469.1 480.9
The Americas 167.6 161.3 183.9
Europe 196.9 192.9 201.3
Others 74.8 52.5 56.7
----------------------------------------------------------------------------------------
Japan (%) 50.5 53.6 52.1
The Americas (%) 18.9 18.4 19.9
Europe (%) 22.2 22.0 21.8
Others (%) 8.4 6.0 6.2
Total 100.0 100.0 100.0
----------------------------------------------------------------------------------------