Ricoh s Medium-Term Management Plan

Transcription

1 1 Ricoh s Medium-Term Management Plan March 19, 2002 Masamitsu Sakurai President and COO Ricoh Company, Ltd.

2 AGENDA 2 1. Review of 13th Medium-Term Management Plan 2. Business Environment Awareness 3. 14th Medium-Term Management Plan - Group Vision/Management Policy 4. Major Business Strategy 5. New Technology Area to be further reinforced 6. Financial Targets

3 Review of 13th Medium-Term Management Plan (1) 3 -Basic Policy and Business Performance Projection- 1,500 Pretax Profit 1.43 trillion Sales 1.7 trillion Sales ( billion) 1, '93 '94 '95 '96 '97 '98 '99 '00 '01 11th Plan 12th Plan th Plan (As Planned) Pretax profit ( billion) CS Management Further Digitalization Reinforcement of Overseas Sales Reinforcement of MFP Lineup 1.Renovation of group management with the aim of increasing corporate value 2. Reform of business and profitability Structure with the aim of maintaining steady growth 3. Reinforcement of cash flow management and realization of low cost business structure

4 Review of 13th Medium-Term Management Plan (2) Financial Achievements Domestic Overseas (Growth ratio) Net Sales (Pretax profit/net Sales) Pretax Profit As Planned Actual As Planned Actual As Planned Forecast , (1.5%) (6.3%) 1, , , ,700.0 (3.8%) (4.9%) (4.7%) (6.4%) (5.9%) (8.6%) 1,670.0 (6.8%) Net Income RIVAC Spread 0.7% 2.8% 1.6% 3.0% 3.0% 4.1% Free Cash Flow $ EURO Reasons for Achievements:Reform of Operational Profit Structure Expansion of High-Speed Machines Black&White to Color Transition MFP+P Solutions Business ( billion)

5 Review of 13th Medium-Term Management Plan (3) 5 Transition of Sales by Product Category Net Sales ( billion) 2,000 1,800 1,600 1, ,670.0 Other Businesses...Semiconductors, etc. 1,400 1,200 1, % 67% 33% 56% Network System Solutions Software, useware, PCs, etc. Networking I/O Systems MFPs, LPs, optical discs, scanners, etc. Imaging solutions PPCs, facsimile machines, digital duplicators FY 98 FY 01 (Forecast)

6 Business Environment Awareness - Market, Customer 6 Demand Trend ( 01-04) Total PPC/MFP markets are almost flat, but color is tremendously growing. Total LP market is one-digit growth rate, but color is tremendously growing. Sales of MFPs are progressing in both PPC and LP markets. TDV is increasing in line with greater information volume. Customer Needs Colorization, higher speed, lower cost Reduction of TCO, Improvement in business productivity One-Stop, total solution * MFP : Multi Function Printer * LP : Laser Printer * TDV : Total Document Volume(copy volume+print volume) * TCO : Total Cost of Ownership

7 14th Medium-Term Management Plan - Group Vision 7 Winners in the 21st Century Contribute to productivity improvement and knowledge creation for individuals working anytime, anywhere, providing high reliability and new value creation. Ricoh-like values should be clearly recognized by stakeholders, and the Ricoh brand globally established. Customer Employee Shareholders Society 1. World No.1 Products 2. Solid relationship with customers 3. Vital and motivated culture 4. Performance Excellence 5. Responsible action as a corporate citizen Business Domain To provide working individuals with improvements in productivity and knowledge creation anytime, anywhere.

8 14th Medium-Term Management Plan - Group Management Policy 8 Practice Ricoh group management to increase Individual Strengths and maximize Group Collective Strengths for growth and progress 1. Realize a vital and motivated culture 2. Strengthen technologies to become the world No.1 product engineering company 3. Build Customer-Friendly and Environmentally-Friendly company. 4. Strengthen each business unit and revolutionize group business structures. 5. Strengthen management constitution for competitive advantage

9 14th MTP - Enhance Value and Increase Customers, Major Business Strategy 9 <<<Provide customers with new values (Customer enclosure, higher added value ) 4F Document Solutions 3F Printing Solutions 2F Network Connective Equipment 1F Standalone Equipment Supply, service, and support Income sources Maintenance support for networks and equipment Useware B to C Transition Document Solutions Printing Solutions MFP + P High-speed machine sales expansion Enhancing Customer Base *Major Accounts *New Sales Channels *Respond to New Requirements Sales through Internet 5 regional global marketing Major Strategies * B to C.Black and White to Color Existing businesses Expansion of customers >>> Selecting and focusing on promising businesses, and efficient management resource allocation New businesses Further strengthening business structure

10 14th MTP - Strategy for Operational Structure Reform 10 Goal Major Strategies Sales Products Technology Structure Reform Optimize TDV Customer Needs Color High Speed One-Stop Total Solutions B to C Transition High-speed machine sales expansion MFP+P Printing Solution Sales Strategies Product Strategies World s Strongest Engine In-house Key Components GW Architecture Ricoh Document Highway New TSS SCM P300 Document Solution Global 5 Region Marketing

11 B to C Transition (1) - What B to C transition is meant for and aimed at 11 What Black and White to Color transition is meant for and aimed at (to be confirmed) <Background> *To meet the needs for colorization <Aim> *Increase TDV *Add more value per copy/print <Contents> *Replace existing B/W machines with color *Cultivate new market with color

12 B to C Transition (2) - Strengthening of High Speed Machines, and Product Lineup 12 *During the 13th MTP, Ricoh performed successfully by strengthening color machines centered on the mid-volume segment. *In the 14th MTP, we will launch a flagship color model in the high-volume segment, thus establishing a comprehensive lineup.

13 B to C Transition (3) - World s Highest Image Quality and Reliability 13 World s Strongest Engine In terms of its image quality, reliability, environmental friendliness, and appliance-like ease, Ricoh will provide the strongest color LP/MFP engine, which overwhelms the competition. Completion of World s Strongest Engine Module-in development results accordingly Strengthen in-house key components which supports the strongest engine

14 Solutions Business (1) - What Solutions Business is meant for and aimed at 14 Printing Solution <Aim> Aimed to increase our market share, acquire TDV, and raise the customer loyalty <Contents> Provide our customers with the most appropriate printing environment that meets with the needs of the digital network era. Document Solution <Aim> Raise the customer loyalty, and add new profit such as in TDV, consultation and training <Contents> Provide our customers with the best combination of I/O equipment and software programs to improve their document flow and operation.

15 Solutions Business (2) - Keys For Success Reliable Support and Service 3. Proposal/Arrangement Ability 2. Meeting Open & Modular 1. Products-Basic Functions, Reliability

16 Solutions Business (3) - Open & Modular 16 GW Architecture By adopting open technology, and utilizing modular common architecture in all the products, development lead time and costs can be drastically reduced and secure flexibility achieved. Conventional Architecture Main Board Copying application OS Printer Board Printer application OS HDD NIC FAX Board FAX application OS Telephone Line Memory Engine Control Board Scanner Board Scanner application OS SCSI Memory Copying application GW Architecture Controller Board Printer application Scanner application Application I/F GW Architecture Common Service General-Purpose OS Engine I/F... Engine Control Board Other application HDD NIC Telephone Line Memory XML Printer Engine Scanner Engine B/W printer Engine Color Printer Engine Scanner Engine GW.Grand Works

17 Solutions Business (4) - Open & Modular 17 Ricoh Document Highway (RDH) Concept Promote Open & Appliance-like ease platform which realizes seamless communication between hardware and applications Business Personal Equipment PPC / MFP Printers / Scanners Application Software Seamless Communication Ricoh Document Highway Platform

18 Solutions Business (4) - Open & Modular 18 Ricoh Document Highway (RDH) Concept Desktop Distribution Network Management Management Document creation, information use Device management Printing support Document Highway System management Intranet/Internet Output Storage & retrieval Input Applications integration

19 Solutions Business (5) - Promotion of TCO Improvement 19 Proposal for Optimal Products TCO Administration Program to propose optimal configuration of office products Japan Customer Configuration Sheet Sahoo North America Print Wise Docutivity Europe Pay Per Page MFP + LP Software to administrate status of office product use Japan Ridoc IO Account Ridoc IO Gate Overseas Print Observer Print Trender PAS Docosoft

20 Solutions Business (6) - Case Study of TCO Improvement 20 Customer:Beverage Maker (US) TCO Administration Copier (Company A) Copier (Company B) Printer (Company C) Printer (Company D) Proposal for Optimal Products All products are digitalized/ networked Facsimile machine (Company E) 104 units of copiers, facsimiles, and printers (diverse manufacturers) Ricoh MFP+LP 30 units (still installing) $83K/year Cost Down

21 Global 5 region marketing strategy (1) -Overseas Sales by Region 21 Net Sales ( billion) % % 45% Americas % Europe % % of net sales % of net sales 150 Others % 40% 40% 0 FY 98 FY 01 FY 04 (Forecast) (Plan)

22 Global 5 region marketing strategy (2) -Overseas Sales by Product Category 22 Net Sales ( billion) 1, , % 56% Other Businesses...Semiconductors, etc. Network System Solutions Software, useware, PCs, etc % Networking I/O Systems 500 MFPs, LPs, optical discs, scanners, etc. 400 Imaging solutions 300 PPCs, facsimile machines, digital duplicators % 70% 39% 0 FY 98 FY 01 FY 04 (Forecast) (Plan)

23 Global 5 region marketing strategy (3) Major Account Strategy 23 Strengthening Global Major Account(MA) Strengthen MA sales structure globally Integrate Ricoh group sales power including Lanier and NRG EUROPE NRG Subs. NRG Distributors Ricoh Subs. Ricoh Distributors Lanier N R G R E CHINA GCL ROS Ricoh Distributors RH JAPAN Sales Co.s MA Domestic MA Int l Account Branch RC AMERICAS O P G RBU SAVIN Lanier RLA R Canada RA ASIA PACIFIC Ricoh Subs. Ricoh Distributors Lanier

24 New Technology Area To Be Further Reinforced 24 Reinforcement of core business *Strongest Engine *Zero emission *Key component Growth of core business *New image process *GW Architecture II *RDH II *High speed communications *Large capacity optical memory Cultivation of new business *Ubiquitous Document *Environment-related etc. Basic Research Photonics Micro machining Nano technology High-speed wireless technology Environment-related technology Appliance-like ease technology Personalization-related technology * RDH : Ricoh Document Highway

25 Promotion of Structural Reform - Major Countermeasures Total Process Reform Activity (New TSS) *Reduce development time *Quality up *Cost down 2. SCM *Reduce inventories *Reduce lead time 3. Company-wide structural reform activity (P300) *Sales structure reform *Review of product base

26 14th MTP Financial Targets 26 Domestic Overseas Net Sales Pretax Profit Forecast % of net sales 14 MTP % of net sales , % 46% 6.8% 1, , , % 50% Operating Income % % 124/$ 120/$ 8.0% Net Income % % CAGR 3.4% 9.3% 6.2% 12.6% 12.3% 13.5% ( billion, %) Growth Ratio 10% 31% 20% 43% 42% 46% Total assets turnover ROA 6.4% 8.3% RIVAC Spread 4.1% 5.5% Free Cash Flow billion( 99-01) billion( 02-04)

27 14th MTP - Changes in Business Structure 27 Transition of Sales by Product Category Net Sales ( billion) 2,000 1,800 1,600 1,400 1,200 1, , % 21% 2, % Other Businesses...Semiconductors, etc. Network System Solutions Software, useware, PCs, etc. Networking I/O Systems 1, % 56% 36% MFPs, LPs, optical discs, scanners, etc. Imaging solutions PPCs, facsimile machines, digital duplicators 0 FY 98 FY 01 FY 04 (Forecast) (Plan) Further Accelerate Business Structure Reform toward Growth Areas

28 14th MTP - Summary 28 Net Sales ( billion) 1,500 Net Sales Pretax Profit 1.67 trillion 2.0 trillion Pretax profit ( billion) 100 1, '96 '97 '98 '99 '00 '01 '02 '03 '04 (Forecast) 12th Plan CS Management Reinforcement of Overseas Sales Further Digitalization Reinforcement of MFP Lineup 13th Plan 14th Plan Continuous Promotion of Business Structure Reform *High-speed machine sales expansion *B to C Transition *MFP+P *Solution Business Continuous promotion of company-wide structural reform Further Reinforcement of Technology (Plan) Contribute to productivity improvement and knowledge creation for individuals working anytime, anywhere

29 *The Company bases the estimates above on information currently available to management, which involves risks and uncertainties that would cause actual results to differ materially from those projected. 29