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To achieve the goals in the 17th MTP

Redefining core businesses and expanding new businesses

In the markets of developed countries, the demand for MFPs is slowly recovering from the decline that followed the world financial crisis. At the same time, our customers are apparently continuing in their efforts to reduce the number of MFPs or/and printers in their offices and reducing the volume of output. They are also placing more value on "intangible assets (use of services)" in addition to the "tangible goods (ownership of products)." With these changes, it is becoming increasingly difficult to meet the needs of our customers if we focus only on the functions and prices of products.
To respond to these changes, we are improving the value of what we offer by combining both existing and new products and services. Specifically, we are strengthening our managed document services and IT services; expanding sales of projection systems and video conference systems, which support visual communication between offices; and developing functions to combine our MFPs and other printers with smartphones and tablet PCs, which are becoming the major devices used for internet connection. With these activities, we are taking advantage of the relationships the Ricoh Group has built with its customers.

In addition to Imaging and Solutions, we will establish a new core business that can ensure our mid-term growth. Considering possible synergistic effects with existing technologies and businesses, we have set three major areas for our new business operations: "Workplace Innovation," "Intelligent Sensing," and "Visual Revolution." We will put more focus on the development of new businesses in these areas while shifting business resources we gain from improving the efficiency of existing businesses.

Expansion of business areas

Expansion of business areas

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Progress of major measures

We were not able to avoid certain external events that influenced our results in the fiscal ended March 2012 year, the first year of the 17th MTP. External causes for the overall loss around included the damage sustained from the Great East Japan Earthquake and the flooding in Thailand, as well as the financial crisis in Europe and drastic exchange rate fluctuations. We were forced to internally bear the expenses that were needed to put structural reform into practice and to book the impairment loss.
Nevertheless, we were able to stably develop our plans to reform business structure towards the creation of new value for our customers and to improve efficiency through this structural reform. As a result, we can now forge ways toward business recovery and profit growth. The following describes the progress of specific measures described in the basic strategies for the 17th MTP.

Business creation and integration

1. Acquire and maintain top market share in the core business

In March, 2012 we launched new products to expand our product lineup and obtained a large market share in the MFP market both within and outside Japan.
Our new series of color MFPs, the MP C5002/C4002/C3302/C2802 series in Japan, is equipped with advanced environment-friendly features and possesses higher operational efficiency and user friendliness. We will develop more products with high energy-efficiency, such as those featuring lower fusing temperature, to maintain our support of energy saving activities at offices and to reduce the burden on the environment.

2. Enhance customer value by creating synergies among new business and core business

We are creating and expanding the value of our products for customers by combining new and existing products and services. In March, 2012 we began offering products and services for unified communication systems that enable remote image communication, as well as the PJ WX4130 Series, a lineup of ultra-short-throw projectors that allow projection with extra short distances. To these products, we added applications to make them compatible with tablet PCs and offered the products as a solution for paperless conferences, or as a new method to share information.

As a measure taken to further strengthen and expand the Visual Revolution—one of our new core business areas—we acquired PENTAX Imaging System Business from HOYA Corporation. This allows us to grow our single-lens reflex camera business, an area which we see as expanding, and reinforce operational resources to develop factory automation (FA) along with other industrial cameras and optical devices.

3. Accelerate business structure transformation to service businesses in the markets of developed countries

We provide services to support our customers in their document management needs as well as in installation and operation of IT services at their offices, so that we can help improve their operational efficiency and solve their business challenges. In March, 2012 sales in managed document services increased significantly by 20% from the previous year on a local currency basis. Sales of network system solutions also grew by 10% from the previous year, thus validating our achievement in structural transformation, which places more emphasis on the service business.

4. Accelerate business growth in emerging markets

In emerging markets, we first identify functions and prices expected locally and reflect these into our products beginning at the design process. We also prepare locally competent sales systems to expand our business. In March, 2012 we released the Aficio SP100 Series, a series of A4 MFPs designed and developed specifically for the Chinese market and produced locally. We accelerated our business development to meet the rapid growth of the Chinese market for A4 MFPs.

5. Realize profile contributions from the Production Printing business

The production printing business continues to expand its product line and to strengthen sales and development schemes to accelerate profit growth. In March, 2012 we launched Pro C751EX/C651EX, a printer equipped with high image quality and paper flexibility, yet excellent cost performance. Along with the Pro C901 Series, which has already been highly evaluated, the new series has gained large market share in the Americas, EMEA and Japan within and outside Japan, as a solution that meets the diversified needs of customers who demand a wider variety of printing materials, smaller lots and shorter delivery.

Establishment of highly effective management

To build a stronger management system for further growth while properly responding to changes in the business environment, we have brought our measures for structural reform forward. In March, 2012 we allocated 34.1 billion yen as structural reform expenses and took measures to optimize staff size, including solicitation of voluntary retirement for Ricoh and affiliated companies based in Japan. We also worked to improve sales activities to respond to the change in work styles, and increased the efficiency of sales operations, while fully reviewing all business processes in all divisions. As a result of these measures, we were able to realize great improvement.

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Measures to be taken in fiscal 2013

We regard fiscal 2013, the second year of the 17th MTP, as an important year to get on a new track for business growth. While the prospects of the world economy are still uncertain due to the debt crisis in Europe and price hikes in crude oil, the Ricoh Group expects to see positive results in the structural reform efforts it has carried out over the past several years as the influence of the Great East Japan Earthquake and floods in Thailand, which had an enormous impact on business achievements in the previous term, fade away.
To rebuild a management structure to continue our business growth even under a new competitive environment that we must face as a result of expanding our business domain, we will focus on three themes: "To accelerate business structure transformation," "To enforce the foundation for profits" and "To develop new businesses."

Aiming to become an excellent global company that can contribute to a better future

Ricoh's origin started from a wish to create value that is useful for communication among people to share information with many others. And the first company started its business with two communication technologies: sensitive paper and cameras. Since then, we have enhanced image processing technologies through the development of copiers and fax machines, while gaining sales and service capabilities to meet the diverse needs of our customers around the world. By using these knowledge and capabilities, we have brought about a series of innovations that support productivity improvement and knowledge creation of our customers.
Excellent global companies are corporations that can trail-blaze their own future with the support of a variety of stakeholders located throughout the world. In 2002, the Ricoh Group became one of the first companies to sign the United Nations Global Compact. We will keep creating economic value with our stakeholders and will play an active role towards coming up with solutions for various issues faced by society. We will develop ourselves into a brand that is highly appreciated and trusted by the people around the world.

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