To Our Stakeholders

I am honored to have taken the helm at Ricoh in April 2023. At the same time, the increased responsibilities that I have undertaken are humbling.

That month, we revised the Ricoh Way, our corporate philosophy, positioning Fulfillment through Work as our Mission and Vision. We will materialize our objectives by ­accelerating our transformation into a digital services ­company that remains close to customers and empowers workers’ creativity.

My mission as CEO is to enhance Ricoh’s corporate value and lead the company toward a brighter future. I will do my utmost to help Ricoh earn the trust of all stakeholders, including shareholders, employees and their families, customers, business partners, and society.

I spent much of my career overseas, particularly in Europe and the United States. This experience underlined the importance of diversity in organizational management. I have valued communicating well with people because languages and cultures vary dramatically across countries and regions. When in Europe, I fostered a culture that embraced the diversity of our people. We took their personalities and opinions into account. We respected wide-ranging ideas to generate new synergies. A homogenized organization never evolves. Achieving our transformation into a digital services company, we will champion employee diversity and encourage our people to pursue new challenges by supporting their growth, thereby driving our business growth.

We devoted considerable energy to our transformation as a digital services company under our 20th MTP. We made acquisitions and other growth investments while internally overhauling our organization, structure, and IT systems to strengthen our management underpinnings. In April 2021, we adopted a business unit structure, transferring authority to those entities so they can respond swiftly to changes in their markets. In managing returns on invested capital and our business portfolios, we accelerated efforts to become more profitable and reform our structure. We also bolstered talent to execute our strategies better. In April 2022, for example, we introduced a Ricoh-style job-based personnel system in Japan. At the same time, we had to tackle business climate changes that had occurred in recent years. Disruptions in the global supply chain led to delays in equipment supplies, particularly of MFPs, detracting from our results.

In fiscal 2022, the final year of the 20th MTP, sales exceeded our initial target, reaching ¥2,134.1 billion. Operating profit was below our initial projection, at ¥78.7 billion. Our return on equity (ROE) was lower than anticipated, at 5.9%. This reflected such factors as delayed print volume recoveries, shortages of hardware components, and surging raw materials prices. On the upside, we progressed steadily with efforts to resolve social issues, earning high regard worldwide for these endeavors. We position ESG targets as future financial targets because ESG initiatives enable us to avoid risks and ultimately capitalize on emerging business opportunities. We will keep pushing forward with ESG and implement our management stance of aligning efforts to create a sustainable economy and drive business growth.

Our basic policy of reinforcing regional strategies and evolving Group management is central to building recurring revenues from digital services.

Our printing business has generated stable earnings through high-margin recurring revenue businesses. These include selling consumables for printing and maintenance services at customer sites, starting from flows in selling MFPs. We will ensure growth as a digital services company by accelerating efforts to create new recurring revenues that augment our printing business. We will offer a range of digital services that address specific customer issues. We will thereby expand our recurring revenue businesses, including device and IT environment support services and Software as a Service application services, to build and grow a revenue stratum.

The digital services market offers excellent growth potential. Our global customer network through such hardware as MFPs is one key strength. Our many unique and outstanding edge devices serve as gateways between analog information, such as text, photos, audio, and videos, and the digital information that machines and software process. We integrate these edge devices with a range of applications and services that we and our partners provide through the RICOH Smart Integration platform to help digitalize work processes for customers. Service and support through a specialized structure are essential for small and mid-sized corporate clients because such entities typically lack in-house IT expertise. So, we are convinced that we can leverage the strengths of an industry-leading sales and support structure that is close to customers to become a market leader.

We are steadily pursuing acquisitions and business alliances globally to strengthen our ability to deliver digital services. It was in keeping with that approach that in fiscal 2022 we acquired PFU Limited, the world’s top provider of business scanners. In May 2023, we announced that we would form a joint venture company by the first half of fiscal 2024 that gives us a technological edge by integrating the MFP and other device manufacturing and development of Ricoh and Toshiba Tec Corporation. Competitive edge devices are vital to delivering digital services. We will become even more competitive and robust in manufacturing by bringing together the technologies and expertise of our Group and our partners to generate synergies. Also, we are broadening the scope of workflow digitalization by expanding our application lineup, including through a business partnership that we formed in fiscal 2022 with Cybozu, Inc., to deploy the RICOH kintone plus solution in Japan and North America. We are focusing on enhancing the digital services consultation skills of our digital professionals.