Ricoh Q216 Results Causes Step Up of Structural Reform Efforts

H1 Operating Profit dropped 70.5 Percent

Ricoh Company, Ltd. reported its Q216 results on October 27, 2016 (please see Figures 1, 2, and 3 below).

  • Q2 Sales of ¥483.7 billion (B), declined 13.0 percent (Y/Y)
  • Q2 Operating Profit of ¥5.7B, declined 84 percent (Y/Y)
  • Q2 Imaging & Solutions Sales of ¥424.9B, declined 14 percent
  • Q2 Imaging & Solutions Operating Profit of ¥16.0B declined 66 percent
  • Q2 Operating Margin of 1.2 percent declined 82 percent (Y/Y)
  • Disclosed it had amended its full-year forecasts in view of H1 results




Our View

As can be seen in Figure 3 above, Ricoh’s operating profit margin for the Company and for its Imaging and Solutions business unit has been on a major downward trend since Q414.

Ricoh reported poor H1 results. Sales down 11.3 percent to ¥971.4B, operating profit declined 70.5 percent to ¥16.5B. Ricoh also provided a “Challenges and Direction” report where it reviewed its strategies, its core business overview (discussing the changes in customer workstyles), how it intends to ‘stem the tide’ in poor financial results, and its future growth strategies of its:

  • Core businesses (imaging equipment, Visual Communications including projectors, interactive white boards, and unified communication system) and IT services,
  • Commercial printing
  • Industrial printing

It appears that Ricoh has some underlying problems that must be dealt with including getting all management on the same page. The vision of the company needs to be clearly addressed and key management must support the vision in order for the company to achieve its financial results and come out of its financial doldrums it has experienced since Q115.

The company has had its ups and downs with revenue generation since 2009 and despite this it did launch several new A3 MFPs, new laser printers, exhibited at drupa 2016 and reinforced it visual communication systems lineup. Ricoh has all the tools, now it has got to pull it together and position itself for growth.

Ricoh changed its forecasts once again (see Figure 4):

Figure 4: Ricoh Outlook

Prior Forecast
Revised Forecast
-1.5 percent
Gross Profit
-2.3 percent
Op Profit
-27.3 percent



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