Ricoh Americas Corporation 5 Dedrick Place, West Caldwell, New Jersey 07006, U.S.A. Phone: +1-973-882-2000 Facsimile: +1-973-882-2506 http://www.ricoh-usa.com/ Ricoh Europe PLC 66 Chiltern Street, London W1U 4AG, United Kingdom Phone: +44-20-7465-1000 Facsimile: +44-20-7224-5740 http://www.ricoh-europe.com/ Ricoh Asia Pacific Pte Ltd. 260 Orchard Road #15-01/02 The Heeren, Singapore 238855 Phone :+65-830-5888 Facsimile: +65-830-5830 http://www.ricoh.com.sg/ Ricoh China Co., Ltd. 17F., Huamin Empire Plaza, No.728 Yan An West Road, Shanghai, China Phone: +86-21-5238-0222 Facsimile: +86-21-5238-2070 http://www.ricoh.com.cn/ Ricoh Company, Ltd. IR Department, Corporate Communication Center Ricoh Building, 8-13-1 Ginza, Chuo-ku, Tokyo 104-8222 Japan Phone: +81-3-6278-5254 Facsimile: +81-3-3543-9329 e-mail [email protected] http://www.ricoh.com/ir/ NPO Color Universal Design Organization has certified this report as a color universal design due to its easy-to-see features based on careful color selection. RICOH GROUP SUSTAINABILITY REPORT (ECONOMIC) 2007 Earning the public’s trust Activity reports from 3 perspectives: “environment,” “corporate social responsibility,” and “economic” Being a good corporate citizen means striving to be a val- ued and respected member of society by contributing to its sustainable growth. To this end, the Ricoh Group be- lieves in being outstanding in all areas of the environment, the economy, and corporate social responsibility as well as openly communicating its activities. The Ricoh Group publishes information on its activities in reports written from three different perspectives: the environment, the economy, and corporate social responsibility. This report provides our shareholders, customers, and other stake- holders with information on our management policies, business performance in fi scal 2007, and fi nancial condi- tion to facilitate a better understanding of what we do and how we work. Annual Report and Other Reports Economic Environment Corporate Social Responsibility R I C O H G R O U P S UST AINABILITY REPO RT (ENVIRONMENT) Sustainability Report Sustainability Report Sustainability Report （Economic） （Environment） （Corporate Social Responsibility） • Management policy • Concept of sustainable environmental • Concept of CSR • Management results management • Integrity in corporate activities • Financial status • Improving our products • Harmony with the environment • Improvements made at business sites • Respect for people • Basis for sustainable environmental • Harmony with society management • Social contribution of environmental conservation/Environmental communication ■ How to Obtain Ricoh's Corporate Information • IR (Investor Relations) http://www.ricoh.com/IR/ • Sustainable environment management http://www.ricoh.com/environment/index.html • Corporate social responsibility http://www.ricoh.com/csr/ • Social contribution http://www.ricoh.com/about/csr_environment/sc.html 1 ANNUAL REPORT 2007 Corporate Profile Ricoh Company, Ltd., is a leading global manufacturer of offi ce automa- Editorial Policy 1 tion equipment. Our lineup includes copiers, multifunctional and other Corporate Profile 2 printers, facsimiles, personal computers, optical disc products, and re- Financial Highlights 2 lated supplies and services, as well as digital cameras and advanced Contents 2 electronic devices. 3 We are rapidly building a solid presence worldwide as a provider of com- To Our Shareholders and Customers investors Customers prehensive document solutions that help customers streamline their busi- nesses and cut operating costs. Highlights 7 The Ricoh Group includes Ricoh Company, Ltd. and 322 subsidiaries and affi liates – 114 companies in Japan and 208 overseas, together em- ploying around 81,000 people. Business Strategy 11 ●Cautionary Statement Ricoh bases the estimates in this annual report on information currently available to management, which Corporate Governance 18 involves risks and uncertainties that could cause actual results to differ materially from those projected. Corporate Social Responsibility Financial Highlights CSR / Environmental Management 19 Ricoh Company, Ltd., and consolidated subsidiaries for fiscal 2007 and fiscal 2006 Thousands of Millions of yen % change U.S. dollars Brand Communications 21 2006 2007 2007 2007/2006 For the year: ￥1,909,238 ￥2,068,925 ＄17,533,263 8.4％ Net sales Japan ￥966,224 ￥1,002,251 ＄8,493,653 3.7％ Financial Section 22 Overseas ￥943,014 ￥1,066,674 ＄9,039,610 13.1％ Net income ￥97,057 ￥111,724 ＄946,814 15.1％ Per share data (in yen and dollars): Net income Basic ￥132.33 ￥153.10 ＄1.30 15.7％ Diluted ￥132.33 ￥151.89 ＄1.29 14.8％ Cash dividends ￥24.00 ￥28.00 ＄0.24 16.7％ declared At year-end: Total assets ￥2,041,183 ￥2,243,406 ＄19,011,915 9.9％ Shareholders' equity ￥960,245 ￥1,070,913 ＄9,075,534 11.5％ ※ As a result of the sale of business, the operating results from the discontinued business have been reclassifi ed from fi scal 2003 to 2006 in this report. ANNUAL REPORT 2007 2 To Our Shareholders and Customers 13 consecutive years of net sales increase, the fi scal 2007 was ¥153.10 (US$1.30) and the return on and both net sales and profi ts break record shareholder’s equity (ROE) was 11.0%. The annual divi- highs dend declared for the fi scal 2007 was ¥28.00 per share (US$0.24), marking the seventh year in a row of dividend The consolidated sales of the Ricoh group for the fi scal year increase. ended March 31, 2007 were ¥2,068.9 billion (US$17,533 million), an increase of 8.4% over the previous fi scal year. Cash generated amid business investment In the thirteenth consecutive year of sales growth, sales exceeded ¥2 trillion for the fi rst time. Operating income As for cash fl ow, while internal reserves grew as a result rose 17.4% over the previous fi scal year to ¥174.3 billion of increased assets accompanying business expansion (US$1,477 million) and net income rose 15.1% to ¥111.7 and business investments as acquisition of shares of sub- billion (US$946 million), with both sales and profi ts sidiaries, free cash fl ow, which is the total cash fl ow pro- breaking records. duced by operating activities and investment, was ¥51.8 In fi scal 2007, sales of multifunctional printers (MFPs) and billion(US$439 million). laser printers – mainly of color products – continued to rise Total assets rose ¥202.2 billion from the previous fi scal from the previous fi scal year both in Japan and overseas. year , reaching ¥2,243.4 billion (US$19,011 million), as Sales of IT services on the back of the expanded solutions business expanded. Shareholders’ equity increased ¥110.6 business also grew. The Industrial Products and Other ar- billion from the previous fi scal year to ¥1,070.9 billion eas also increased sales. (US$9,075 million) due to the increase of retained earn- Gross profi ts on sales rose thanks to increased sales of value- ings. The equity ratio improved 0.7 points over the previ- added products such as color MFPs and to the fruits of ous fi scal year to 47.7% ongoing cost reduction activities as well as positive foreign exchange fl uctuation. Executing 15th Mid-term Management Plan Also, selling, general and administrative expenses remained high due to the energy poured into research and devel- Since its 13th Mid-term Management Plan, the Ricoh opment and the development of core operating systems. Group has strived to reform its business structure for Of- There were also increased costs associated with the deploy- fi ce Solutions, its main business segment, to "not only ment of policies for strengthening solution proposals and manufacture and sell copiers and printers but to support expanding business areas. Despite this, the ratio of sell- improvement and innovation in the customer's operations ing, general and administrative expenses to sales decreased by providing devices and systems." compared to the previous fi scal year, in part thanks to the Also, based on the recognition that effi cient and effective initial results of structural reforms such as core business input/output, storage and search of total document volume effi ciency enhancement. (TDV) – including not only copies but also printed docu- With these successful results, Ricoh increased profi ts and ments – are becoming critical issue for our customers, in improved the profi t margin. Net income per share for the 14th Mid-term Management Plan Ricoh implemented 3 ANNUAL REPORT 2007 To Our Shareholders and Customers Customers its major strategy "of expanding the revenue and earnings in that market. OurTo Shareholders and framework by the realization of TDV," and business has In the low-end business printer market, Ricoh is creating been executed accordingly. a new color market by introducing new products such as In the 15th mid-term Plan, there are no changes in the di- color laser printers and GELJET printers that further ad- rection of this strategy and business structure reform, but vance Ricoh's unique GELJET technology. efforts were made to expand corporate value by even more In the development of printing solutions, Ricoh has been Highlights seeing from the customers’ perspective and continuing to increasing its accounts through total cost of ownership provide value that meets their expectations. (TCO) solutions that combine copiers and printers, and In the Offi ce Solutions segment, Ricoh recognizes that it through the high marks it receives for its worldwide sup- can meet further needs of a greater number of customers port and service organization. While developing document and establish a solid business foundation by fully utiliz- solutions to improve workfl ow, Ricoh is also strengthen- ing all the Ricoh Group's capacities and strengths – a full ing support and solution sales organizations at its Japa- BusinessStrategy lineup of products, sales and service customer contacts, nese, American, and European technology centers, which the ability to provide solutions, global operations, and im- provide software linking digital copiers with operating age processing and image processing fusion technologies.