Last Update: March 5, 2024
| Does RICOH Digital Products intend to keep adjusting production in the fourth quarter? |
| By the second quarter, it resolved production adjustments for sales inventories amassed in the previous fiscal year. Results were below target despite a range of sales measures to boost unit sales from the third quarter. We concluded in view of the situation for the fourth-quarter deal pipeline that it would need to adjust fourth-quarter production plans set in the second quarter. It looks to complete a series of production adjustments by the end of fiscal 2023. |
| What earnings level do you project for RICOH Digital Products in fiscal 2024? |
| One guide is ¥6.5 billion in operating profit in the third quarter of fiscal 2023 after completing significant inventory and production adjustments through the first half. The ETRIA joint venture with Toshiba Tec that we plan to establish on July 1 this year should affect RICOH Digital Products’ earnings, although we have yet to estimate the impact. |
| What key factors prompted you to lower your fiscal 2023 operating profit forecast from ¥70 billion, to ¥60 billion? |
| They were primarily revisions for RICOH Digital Products and RICOH Industrial Solutions. For RICOH Digital Products, we had expected production volume to turn around from the third quarter owing to sales expansion measures we rolled out from the second quarter. Unit sales of A3 MFPs improved from the previous quarter in the third quarter, owing partly to the impact of these measures. Unit sales were still below target, however, so after assessing progress with the deal pipeline for the fourth quarter we decided to adjust production plans we formulated in the second quarter. We accordingly cut our segment operating profit forecast from ¥21.4 billion, to ¥14.8 billion. At RICOH Industrial Solutions, Thermal business demand remained weaker than expected even though it was better than in the first half. We cut our segment operating profit projection from ¥6.1 billion, to ¥3.1 billion. |
| Why did you decide to repurchase shares when announcing your third-quarter results on February 6, 2024? |
| Under the 21st Mid-Term Management Strategy, we target a return on equity of 9% by fiscal 2025. We consider adjusting shareholders’ equity one means to that end. We concluded that this is the right time to repurchase shares. One factor is that while we anticipated net assets of around ¥1 trillion by the close of fiscal 2025, they have increased more than expected owing to the impact of foreign exchange rates. Other factors include the standing of growth investments. |
| Tell us about ETRIA’s revenue scale. I want to know the sales and earnings consolidations with Ricoh. |
| We plan to establish ETRIA on July 1, 2024, and will disclose this information at the appropriate time. |
| Can we correctly assume that around half of ¥30 billion in savings from R&D optimization would be in fiscal 2024, boosting earnings by around ¥15 billion yen during that term? |
| We aim to lower R&D cash outflows by about ¥30 billion from the current level by fiscal 2025. Please note, however, that not all R&D expenditure reductions would immediately lower costs, as International Financial Reporting Standards recognize some items as development assets for subsequent amortization, which means recognizing them as expenses. |
