Last Update: September 4, 2023
| Did your operating profit of 10.1 billion yen in the first quarter of fiscal 2023 match your internal target? What are your projections for the second quarter and beyond? |
| After stripping out the foreign exchange impact, an operating profit of 10.1 billion yen would actually be around about 7 billion yen, which was almost in line with our internal target. We look for a quarterly operating profit of 15 to 16 billion yen in the second quarter, rising to around 20 billion yen in the third quarter and climbing further in the fourth quarter. We aim to reach our full-year operating profit goal of 70 billion yen by taking the steps we need each quarter. |
| Why did operating profit at Ricoh Digital Products decline 11.0 billion yen from a year earlier in the first quarter? It’s quite a fall. Is that because market demand is shrinking? |
| We attribute the drop to two primary factors; (1) Unrealized profit impact While earnings were off by 11.0 billion yen, the unrealized profit impact compared with a year earlier was around 5.0 billion yen, so the effective decrease was about 6.0 billion yen. (2) Impact of A3 MFP production adjustments Most of the effective operating profit decrease of 6 billion yen stemmed from A3 MFP production adjustments in keeping with plans we announced at the start of the fiscal year. In particular, part of the decline came from A3 MFP unit sales trending below plans, which forced us to adjust production more than we envisaged. That said, revenues and earnings at Ricoh Digital Services were on track owing partly to controlling prices. Also, unit sales were up from a year earlier, so we do not think prevailing market demand is weak. |
| To which segment did you allocate the PFU business from the first quarter of fiscal 2023? |
| We transferred PFU’s scanner and other document imaging businesses and its embedded computer business to Ricoh Digital Products. We transferred its infrastructure customer services business to Ricoh Digital Services. |
| What did Office Services recurring revenues encompass (see page 7 of presentation of Consolidated Results for FY2023 Q1)? |
| It covered sales under the Office Services business model, which should generate recurring revenues rather than one-time sales. These revenues include IT services operation and maintenance contracts, Business Process Services (for customer output centers), and software subscription fees under monthly contracts. |
| What sorts of communication services does Ricoh Digital Services provide? |
| These include edge devices sales, installations, construction, operations and maintenance, as well as managed services associated with building communications environments. Communication services growth in the first quarter reflected the impacts of consolidating Cenero of the United States, Pure AV of the United Kingdom, and AVC of Denmark, which we had yet to acquire when we posted our first-quarter results last year. We aim to expand our communication services by reinforcing synergies with acquired companies. |
| For the full year, you projected 1.5 billion yen in operating profit for Ricoh Graphic Communications. The first-quarter result was 2.7 billion yen, which greatly exceeded that target. What are the outlooks for the second quarter and beyond? |
| While we performed better than anticipated in the first quarter, the figure included a foreign exchange impact of around 1 billion yen, so we actually performed basically in line with projections. From the second quarter, we do not envisage the same earnings level as in the first quarter. That is because we will further incur structural reforming costs and amortization of R&D expenses associated with new product launches. We are taking steps to develop and market several new products. Although those measures should be effective, we will expect the new offerings to contribute fully to results at least from fiscal 2024 in view of the lead times we need to negotiate deals. |
| Why has Ricoh Industrial Solutions started in the red as you planned? |
| This segment has seasonal elements, so we expected earnings to be lower in the first quarter, on par with a year earlier. In the thermal business, we experienced prolonged market inventory adjustments, so it was harder than envisaged to secure sales volume, so results were lower than expected. We see signs of a sales recovery, and we will roll out measures to achieve a turnaround from the second quarter. |
