05 December 2012 Asia Pacific/Japan Equity Research Office Electronics (Precision (Japan)) / MARKET WEIGHT Precision Sector Research Analysts SECTOR REVIEW Yu Yoshida 81 3 4550 9815
[email protected] Ricoh remains top pick for 2013 amid ongoing consolidation in office-equipment market Figure 1: HW / NHW average LC base sales growth rate (2011-12): Relatively positive for Ricoh Average LC base sales growth rate (2011-2012) (1) Winners of 8% (3) Limited impact consolidation effect from consolidation 6% Lexmark Konica Minolta 4% Brother Ricoh 2% 0% -8% -6% -4% -2% 0% 2% 4% 6% 8% -2% Canon (Laser Fuji Xerox printer) Canon (Copier) Non-hardware Fuji Xerox -4% (Copier) (Laser printer) -6% (4) Unable to offset the (2) Losers of -8% consolidation effect impact from consolidation Hardware Note: × shows copier makers and △ shows laser printer makers Source: Company data, Credit Suisse ■ Summary: The labor equipment ratio (machines in force ÷ number of employees) for office equipment (printers + laser printers) is declining, especially the ratio for single-function laser beam printers (LBPs). In this report, we examine the 2013 office-equipment demand outlook and the positioning of individual companies in the current market environment. ■ Focal points: The office labor equipment ratios for the US and Western Europe are diverging as the ratio has been falling in the US since 2010 while holding near peak levels in Western Europe. The divergence is related to regional differences in (1) the number of large enterprises, (2) the speed of tablet PC diffusion, and (3) the ratio of color multifunction printers. However, tablet PC diffusion in Western Europe is likely to pick up in 2013, raising the probability of a change in office environments that should push down the region’s labor equipment ratio.