The company announced its fiscal 2019 full year results, the period ended 31 March 2020.
Ricoh said that in the fourth quarter, corporate demand for consumables fell as office operations shrank. Demand for office IT services continued to grow during the year in line with progress in information and communication technology and changing work practices. Although the company noted that even amid the pandemic, demand for IT services continued to expand steadily, reflecting greater IT demand relating to teleworking and other aspects of business continuity.
Fiscal 2019 was the final year of Ricoh’s 19th Mid-Term Management Plan and the second year of the Ricoh Ignite growth strategy. Consolidated sales for fiscal 2019 declined 0.2%, to ¥2,008.5 billion ($18.88 billion/ €17.41 billion). Although sales rose in the Office Service and Industrial Printing segments, they were down in the Office Printing, Commercial Printing, and Thermal segments.
Ricoh stated that the Office Printing revenue downturn reflected lower hardware and consumables demand owing to the COVID-19 pandemic. There was a narrowing down of deals in keeping with a strategic focus on profitable sales and a reduction in the number of machines in field from ongoing contract reviews.
Reviewing its different markets Ricoh said, in Japan, sales rose 8.3% from a year earlier. This was on steady growth, particularly in Office Service, reflecting expanded demand for IT equipment as domestic companies overhauled work practices and higher revenues in such areas as industry solutions services. Sales in the Americas were down 5.9% from a year earlier. Although Industrial Printing sales grew, this reflected a focus on profitable deals and lower Office Printing revenues owing to the COVID-19 pandemic.
Sales in Europe, the Middle East, and Africa were off 4.9% but were up 1.0% after stripping out the foreign exchange impact. The principal factors here were, as in the Americas, a focus on profitable deals and lower Office Printing revenues due to the pandemic.
Gross profit decreased 5.9%, to ¥721.5 billion ($6.78 billion/ €6.26 billion). The drop was despite an earnings contribution from the Office Service business, and reflected a downturn in the Office Printing business, Ricoh explained.
In the Office Printing field, in fiscal 2019, Ricoh endeavoured worldwide to expand sales of the RICOH IM C series of advanced MFPs, which the company launched in January 2019. Office Printing sales for the year decreased 7.4%, to ¥1,006.2 billion ($9.46 billion/ €8.72 billion). Through the third quarter, they kept solid and unit sales of colour A3 MFPs rose 3% reflecting the impact of new models. Ricoh added that hardware sales declined in the fourth quarter, however, due to the COVID-19 pandemic, as lockdowns, requests to voluntarily constrain activities, and other factors constrained customer business activities and caused sales of related consumables to fall. Segment operating profit dropped from ¥117.9 billion ($1.1 billion/ €1.02 billion) posted a year earlier to ¥90.3 billion ($849 million/ €782 million).
The COVID-19 pandemic has affected Ricoh’s business activities in various ways since becoming a pandemic in February 2020. Reviewing its forecast, Ricoh said: “We have stepped up our use of email, teleconferencing, telemarketing, and other tools in response to expanded teleworking and halts in visits to customers. It has become difficult, however, to expand sales of new products and services owing to such factors as declining purchasing demand and an inability to install machines in field.
“On top of that, lower business activity in offices reduced the usage of mainstay multifunctional printers (MFPs), cutting sales of consumables and other offerings. The pandemic will affect our fiscal 2020 performance until an end is in sight for the COVID-19 pandemic.
“The forecast for the fiscal year ending 31 March 2021 has yet to be determined, because it is difficult to reasonably estimate the impact of the COVID-19. We will carefully assess the impact and announce it promptly when we can disclose reasonable forecast.”
