Ricoh targets 60 percent operating profit jump in three years

Japanese office equipment maker Ricoh Co Ltd said on Tuesday it aimed to boost operating profit by about 60 percent over the next three years by expanding sales of advanced copiers and finding new growth areas in the printing field. But Ricoh, the world's third-largest copier maker after Canon Inc and Xerox, suggested any profit growth would be modest in the next financial year starting April 1, due to heavy investments and structural reform costs.
Under a new business plan, Ricoh will aim for a group operating profit of 235 billion yen ($2.24 billion) and sales of 2.3 trillion yen in the year to March 2008, compared with its estimates for 147 billion yen and 1.82 trillion yen in 2004/05.
"We expect fiscal 2005 (year to March 2006) to be a year of investment within our medium-term business plan," Ricoh President Masamitsu Sakurai told a meeting of analysts and reporters. "I see the real contribution to profit coming in 2006 and 2007."
Sakurai said he expected sales of mufti-function printers used in offices to continue to expand over the next few years, generating a steady stream of revenue from toner and other consumables and forming the core profit engine for the group.
He is also banking on strong sales growth of laser printers and a new type of ink jet printer for office use. Other areas poised for growth are industrial printing services and optical components for rear projection televisions, Sakurai said.
On a net basis, Ricoh is aiming for a profit of 137 billion yen in 2007/08, compared with its forecast for 85 billion yen in 2004/05. It plans to boost return on assets to 11 percent in 2007/08 from 7.4 percent this financial year.
The company also unveiled plans to buy back about 60 billion yen's worth of its own shares in the three years through March 2008, aiming to boost shareholder value.
Ricoh said it would buy roughly 20 billion-yen each year.
Sakurai said he would like to lift Ricoh's dividend payout ratio to above 20 percent by 2007/08, compared with about 17 percent now.
According to research firm Guarantor Dataquest, Ricoh held 12.0 percent of the $26.4 billion world-wide copier market in 2003, behind Xerox at 14.3 percent and Canon at 24.6 percent. Sharp Corp was fourth with a 6.6 percent share.
Shares of Ricoh were up 0.21 percent at 1,918 yen, outperforming the benchmark Nikkei average's 0.40 percent decline.