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02-01-2014, 01:29 AM   #1
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Ricoh Financial Results Q3 2014

Ricoh has published their latest financial results. I must admit that my understanding of this is limited, but as far as I can see, the company is doing pretty well as a group. Cameras are not included in the "Imaging and Solutions" category, but make up the main part of the "Other" category. This category had a 9.2% increase in sales over the same period last year. They still made a loss of 300 million yen ($3m) in the "Other" category, but they lost 2.3 billion yen ($23m) in the same period last year, so it is a fair improvement.

If someone knows how to interpret these statements properly, please feel free to correct me!

FY2014 3rd Quarter Financial Announcement / Investor Relations / About Ricoh | Ricoh Global

02-01-2014, 01:59 AM   #2
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QuoteOriginally posted by JPT Quote
Ricoh has published their latest financial results. I must admit that my understanding of this is limited, but as far as I can see, the company is doing pretty well as a group. Cameras are not included in the "Imaging and Solutions" category, but make up the main part of the "Other" category. This category had a 9.2% increase in sales over the same period last year. They still made a loss of 300 million yen ($3m) in the "Other" category, but they lost 2.3 billion yen ($23m) in the same period last year, so it is a fair improvement.

If someone knows how to interpret these statements properly, please feel free to correct me!

FY2014 3rd Quarter Financial Announcement / Investor Relations / About Ricoh | Ricoh Global
I think the growth is the most important part. What else is included in "Other"?
02-01-2014, 05:21 AM   #3
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Ok, Ricoh as a whole:
  • roughly doubled profits but this was driven entirely by the lower yen/dollar exchange rate (most likely translating non-Japan sales back into yen).
  • return on equity is starting to improve after four or so years of very ordinary returns to shareholders, but is still below pre-financial crisis levels.
  • net sales globally increased by 2.5% excluding foreign exchange effects. Excluding fx impact, US sales flattish, Europe down a bit, Other (China, SE Asia, Oceania) up 10%.
  • Japan home market sales picked up quite materially.
  • cost control measures remain an important strategic focus across the group.

If the "Other" category is where Pentax sits, then sales for the three quarters to end 2013 were up about 9% with currency effects excluded. The December quarter looked a bit weak though compared to growth in the two earlier quarters.

Other also looks to include lease financing activities and I don't see where cameras vs leasing is broken down, so I have no idea whether lease financing is a material element of Other or not.

With that proviso, excluding fx effects:

Domestic "Other" sales up 7.8% (Abenomics doing its thing)
US "Other" sales down 1.1% (come on you guys!!!)
Europe "Other" sales down 16% (did somebody mention there was a recession there?)
Other (China, SE Asia, Oceania) sales up 24% (must be my K-3 and FA77 purchases. Fellow Adelaide forum members Sandy Hancock and jackassp probably also made a handy contribution)

That's a quick'n'dirty interpretation for you all.
02-01-2014, 07:00 AM   #4
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QuoteOriginally posted by southlander Quote
Ok, Ricoh as a whole:
  • roughly doubled profits but this was driven entirely by the lower yen/dollar exchange rate (most likely translating non-Japan sales back into yen).
  • return on equity is starting to improve after four or so years of very ordinary returns to shareholders, but is still below pre-financial crisis levels.
  • net sales globally increased by 2.5% excluding foreign exchange effects. Excluding fx impact, US sales flattish, Europe down a bit, Other (China, SE Asia, Oceania) up 10%.
  • Japan home market sales picked up quite materially.
  • cost control measures remain an important strategic focus across the group.

If the "Other" category is where Pentax sits, then sales for the three quarters to end 2013 were up about 9% with currency effects excluded. The December quarter looked a bit weak though compared to growth in the two earlier quarters.

Other also looks to include lease financing activities and I don't see where cameras vs leasing is broken down, so I have no idea whether lease financing is a material element of Other or not.

With that proviso, excluding fx effects:

Domestic "Other" sales up 7.8% (Abenomics doing its thing)
US "Other" sales down 1.1% (come on you guys!!!)
Europe "Other" sales down 16% (did somebody mention there was a recession there?)
Other (China, SE Asia, Oceania) sales up 24% (must be my K-3 and FA77 purchases. Fellow Adelaide forum members Sandy Hancock and jackassp probably also made a handy contribution)

That's a quick'n'dirty interpretation for you all.
I am wondering what the effect for brutal price increase of lenses from last year and hd lens... Sounds a good strategy?

02-01-2014, 03:55 PM   #5
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Q3 2014 already, it seemed like yesterday it was the first month of 2014.
02-01-2014, 04:04 PM   #6
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QuoteOriginally posted by jogiba Quote
Q3 2014 already, it seemed like yesterday it was the first month of 2014.
You've got to love deadpan humour…

I presume the Japanese Financial Year (or maybe Ricoh's) starts in the June quarter (that's April-May-June, before anyone else leaps in).
02-01-2014, 04:13 PM   #7
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Japanese companies end their Fiscal Year March 31. 4Q2014 is the March Quarter of FY 2014, ending March.
02-02-2014, 11:08 PM   #8
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I don't think they have pentax included in this they have it in some subsidiary that they are not accounting on this. There is no way that the ratio of sales can be 104 Japan, 4 Americas, 6 EMEA, and 5 other. Growth is there and that is good, but I think this only counts GR, that would make sense for GR. I think it is ironic that pentax is part of Ricoh Imaging Co but is not part of the Ricoh Imaging & Solutions division on their financial reports.

02-03-2014, 01:16 AM   #9
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Pentax is no longer a separate entity; there's Ricoh Imaging now, and AFAIK they're included in Others (together with the lease financing business, and perhaps other stuff). My guess is that the non-Ricoh Imaging part is the one responsible for those ratios.
02-03-2014, 07:36 AM   #10
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If they have lease financing business and other stuff that is focused on the japanese market, that may explain why their revenue is so disproportionately high, Digital cameras is the only thing their footnotes mentions under Others. 4 billion yen translates into ~100,000 units if they had a $400 average wholesale unit price across their line but what their average unit price is will depend greatly on what their mix of DSLRs, Lenses, Qs, and Compacts is. If the Qs, compacts, and low end lenses are more than 50% of their sales, it would probably be lower than $400.
02-10-2014, 05:02 AM   #11
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QuoteOriginally posted by starjedi Quote
I am wondering what the effect for brutal price increase of lenses from last year and hd lens... Sounds a good strategy?
In my business, a service business, there is a saying that if you increase the price 10% and lose 50% of your customers you make more money. It doesn't translate to a retail endeavor quite as starkly, but you get the idea. At penny margins you have to move volume, substantial volume.

I would suggest that Ricoh is going to avoid the death spiral price wars and focus on holes that the big guys are dropping due to their cost cutting. The volume sales and revenues aren't there anymore.
02-10-2014, 08:31 AM   #12
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QuoteOriginally posted by derekkite Quote
In my business, a service business, there is a saying that if you increase the price 10% and lose 50% of your customers you make more money. It doesn't translate to a retail endeavor quite as starkly, but you get the idea. At penny margins you have to move volume, substantial volume.

I would suggest that Ricoh is going to avoid the death spiral price wars and focus on holes that the big guys are dropping due to their cost cutting. The volume sales and revenues aren't there anymore.
In a sense, I am waiting for the other shoe to drop so to speak. I wonder if there will be similar price hikes out of Canon and Nikon at some point in the near future. Sigma and Tamron have certainly escalated their pricing structures. Canikon might be in a pricing standoff though where they can't increase prices without sacrificing market share.

The other thing that might be going on is the free razor where they have been pricing the bodies more aggressively than Hoya used to and that might be to sell more lenses (razor blades).
02-10-2014, 09:28 AM   #13
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QuoteOriginally posted by mikemike Quote
In a sense, I am waiting for the other shoe to drop so to speak. I wonder if there will be similar price hikes out of Canon and Nikon at some point in the near future.
The newer Canon and Nikon highend glass tends to be quite expensive. The MRSP of newer Canon 24-70 is around $2,300. The older version was selling for around half that. The new 24-70 f4 is $1,500. Expect prices on new lenses, particularly FF glass, to continue increase due to contracting camera and lens sales, inflation, and demand for improved glass to take advantage of advances in sensor technology.
02-10-2014, 09:31 AM   #14
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QuoteOriginally posted by northcoastgreg Quote
The newer Canon and Nikon highend glass tends to be quite expensive. The MRSP of newer Canon 24-70 is around $2,300. The older version was selling for around half that. The new 24-70 f4 is $1,500. Expect prices on new lenses, particularly FF glass, to continue increase due to contracting camera and lens sales, inflation, and demand for improved glass to take advantage of advances in sensor technology.
Any capital costs associated with a new lens design and manufacturing process must be amortized versus the new lens, whereas the capital costs for the old lens are likely materially recovered. To that extent, the old lens can have a lower price and still be a profitable sale.
02-10-2014, 09:45 AM   #15
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QuoteOriginally posted by monochrome Quote
Any capital costs associated with a new lens design and manufacturing process must be amortized versus the new lens, whereas the capital costs for the old lens are likely materially recovered. To that extent, the old lens can have a lower price and still be a profitable sale.
That doesn't explain Ricoh's pricing moves though.
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