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07-28-2017, 01:16 AM - 1 Like   #1
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Financial Results:FY2018/03

Financial Data > Financial Resul... | Global | Ricoh

07-28-2017, 01:24 AM   #2
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Thank you. There are more details in the following document:

http://www.ricoh.com/IR/financial_data/financial_result/data/30/q1_report.pdf
07-28-2017, 01:49 AM   #3
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Other
Sales in the Other segment increased by 5.0% to 44.9 billion as compared to the previous corresponding period. Though income and profit
in optical equipment business mainly increased, it was offset by the decrease in income and profit in the camera business due to the decrease
in amounts of sales of digital cameras. As a result, operating profit in the Other segment decreased by 2.5 billion as compared to the
previous corresponding period to 2.0 million of loss.

Other: ptical equipment, electronic components, semiconductor devices, digital cameras,
industrial cameras, 3D printing, environment and healthcare
07-28-2017, 01:58 AM - 1 Like   #4
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Not very nice reading...
Sales in the Other segment in Americas down by 56% and Europe 28%, and interesting to see the proportion of these regions to the domestic market and the rest of Overseas. Basically, America is half the size of Europe market, which is 1/20 of Japanese market... Unclear how much of this is digital cameras.

But this one is worrying (though not surprising given the lack of news and new products from Ricoh):
"Sales in the Other segment increased by 5.0% to 44.9 billion as compared to the previous corresponding period. Though income and profit in optical equipment business mainly increased, it was offset by the decrease in income and profit in the camera business due to the decrease in amounts of sales of digital cameras. As a result, operating profit in the Other segment decreased by 2.5 billion as compared to the previous corresponding period to 2.0 million of loss. "

07-28-2017, 02:01 AM - 6 Likes   #5
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Has anyone notified Ron?

07-28-2017, 02:01 AM - 1 Like   #6
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From the document above:

1/ It's difficult to infer anything quantitative concerning Ricoh Imaging or Pentax from the figures of the <Other> division since Ricoh henceforth specifies that the <Other> division includes the following product lines (see p.8, 13 and 14), which go much beyond Pentax, including outside Japan:
QuoteOriginally posted by Ricoh:
<Other>: Optical equipment, electronic components, semiconductor devices, digital cameras, industrial cameras, 3D printing, environment and healthcare.
2/ From a qualitative standpoint there is one valuable statement p. 4:
QuoteOriginally posted by Ricoh:
Other
Sales in the Other segment increased by 5.0% to 44.9 billion as compared to the previous corresponding period. Though income and profit in optical equipment business mainly increased, it was offset by the decrease in income and profit in the camera business due to the decrease in amounts of sales of digital cameras. As a result, operating profit in the Other segment decreased by 2.5 billion as compared to the previous corresponding period to 2.0 million of loss.
In other words: operating profit in the Other segment went from a 2,511m profit for the three month period ended on June 30, 2016 to a 20m loss for the three month period ended on June 30, 2017 as a consequence of "the decrease in income and profit in the camera business due to the decrease in amounts of sales of digital cameras."

Edit: 2.5bn corresponds to US$22.5m.

Last edited by Mistral75; 07-28-2017 at 02:11 AM.
07-28-2017, 02:31 AM   #7
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It's not great news, admittedly, but I imagine it's what they expected - hence why they're focusing on premium / high value products going forward. I suspect it's more evidence of saturation at the lower-end consumer market...
07-28-2017, 03:09 AM - 1 Like   #8
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QuoteOriginally posted by Mistral75 Quote
2/ From a qualitative standpoint there is one valuable statement p. 4:
In other words: operating profit in the Other segment went from a 2,511m profit for the three month period ended on June 30, 2016 to a 20m loss for the three month period ended on June 30, 2017 as a consequence of "the decrease in income and profit in the camera business due to the decrease in amounts of sales of digital cameras."
Edit: 2.5bn corresponds to US$22.5m.
This seems a little weird. 22m USD profit per 3 months lost on cameras alone?

If their profit per $2000 K-1 is 10% that means $200. This in itself would mean they sold 110,000 units less (already reduced to high profit items) in 3 months or 440,000 units less per year.

The initial production volume usually is highest and the K-1 had 7000/month or 84,000/year.

Even if they fully stopped all camera sales to zero for full three months I don't know how they could make 22m less profit per quarter just with cameras.

07-28-2017, 03:22 AM   #9
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When you loose a sale, you loose the corresponding gross margin (income less manufacturing costs, to make it simple), which should be more than 50% to offset the SG&A and recoup the development costs, albeit on the basis of a unit price (K-1) of $1,000 (Ex Works) rather than $2,000 (retailer price).

But your conclusion remains valid: there are identified pluses (optical equipment business) and identified minuses (digital camera business) but we don't know how the other activities behaved (electronic components, semiconductor devices, industrial cameras, 3D printing, environment and healthcare). We only know that the total impact is minus $22m.
07-28-2017, 03:28 AM   #10
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I find interesting how the <Other> group suddenly seems to include more subsegments: "Optical equipment, electronic components, semiconductor devices, digital cameras, industrial cameras, 3D printing, environment and healthcare.".
"decrease in income and profit in the camera business" - does it mean that Ricoh Imaging made a profit (albeit smaller)?
07-28-2017, 04:03 AM   #11
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QuoteOriginally posted by Kunzite Quote
I find interesting how the <Other> group suddenly seems to include more subsegments: "Optical equipment, electronic components, semiconductor devices, digital cameras, industrial cameras, 3D printing, environment and healthcare.".
(...)
So do I. I reckon that part of it is due to actual business transfers from other divisions (I suspect that "industrial cameras" includes both the machine vision cameras and the rugged cameras that were formerly included in the <Industrial products> division) and the remaining to a laudable transparency effort under the guidance of the newly appointed CEO.

They have changed their way of presenting their various businesses. Formerly we had:

<Imaging & Solutions>
Office Imaging
Production Printing
Network System Solutions
<Industrial Products>
<Other>

Now we have:

<Office Printing>
<Office Service>
<Commercial Printing>
<Industrial Printing>
<Thermal Media>
<Other>

---------- Post added 07-28-2017 at 01:51 PM ----------

There are additional documents online:

http://www.ricoh.com/IR/data/pre/pdf/h30q1_1.pdf See pages 5 and 15 for the new segments. <Other> is subdivided into 'Industrial Products' (Optical equipment, electronic components, semiconductor devices), 'Smart Vision' (Digital and industrial cameras) and 'Other' (Finance business in Japan, 3D printing, environment and healthcare)

http://www.ricoh.com/IR/data/pre/pdf/h30q1_3.pdf (report on structural reform and its progress) "Extensive business selectivity - Leave no stones unturned in screening businesses - We plan to disclose this information at the right time" (page 7)

http://www.ricoh.com/IR/data/pre/pdf/h30q1_2.pdf (oddly, with the old subdivision. The <Other> category is supposed to increase its sales by 9% in FY2018/03 after +5% in Q1).

Last edited by Mistral75; 07-28-2017 at 04:51 AM.
07-28-2017, 05:22 AM   #12
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I read it this morning. It is very difficult to see development for the camera business in the future. The camera business is loosing money and not a little. There is only something to say about sales in the America's. As in previous quarter sales went down! And they went down a lot. It looks like that sales to the America's (North, South, Middle and the Caribbean) are down to something like a 1 million USD sales on a monthly base. They put some things together with the previous camera business and now together that is less then it was for camera only a year ago. Remember these sales are combined for Theta, aps-c, fullframe, 645z and Gr. So sales are becoming marginal for Ricoh-Imaging in this area.

Something has to happen to stop the money loosing that is happening!
07-28-2017, 05:47 AM   #13
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QuoteOriginally posted by Mistral75 Quote
When you loose a sale, you loose the corresponding gross margin (income less manufacturing costs, to make it simple), which should be more than 50% to offset the SG&A and recoup the development costs, albeit on the basis of a unit price (K-1) of $1,000 (Ex Works) rather than $2,000 (retailer price).
I agree to the logic. But even with $500 gross margin per unit they wouldnt be able to make these profit reductions even if they sold only K-1s and ran at full initial production volumes.
I would expect expensive K-1s to be less than half of sales (so the other models also can only loose much less margin if sales decline) and production output reduced to significantly less than the initial 7000 - maybe 4-5000.
It just doesnt seem possible at all.
07-28-2017, 06:03 AM   #14
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QuoteOriginally posted by beholder3 Quote
I agree to the logic. But even with $500 gross margin per unit they wouldnt be able to make these profit reductions even if they sold only K-1s and ran at full initial production volumes.
I would expect expensive K-1s to be less than half of sales (so the other models also can only loose much less margin if sales decline) and production output reduced to significantly less than the initial 7000 - maybe 4-5000.
It just doesnt seem possible at all.
A few months ago Mistral75 estimated that Pentax has annual revenues of 23-31 billion yen per year, I think (could be wrong). Obviously only an estimate. A decline of 2.5 billion yen in income and profits in the "Other" division for just one quarter due to a reported decline in camera sales represents a massive proportion of that on an annual basis, far above the average decline in the camera market as a whole. So the question is whether one believes that Pentax's camera finances have suddenly fallen off a cliff to the tune of 30-40 per cent down at an annual rate or whether the "Other" division's figures are now so mixed up with a range of different businesses - not to mention which cameras are in which business - that it is pretty impossible to tell anything from them about one business alone. Plus there could easily be restructuring stuff going on in there since we know Ricoh are doing this over the whole company. These figures are probably very opaque from a Pentax-watcher's POV. Fair to say there will have been a decline since most camera-makers will be reporting one in a declining market but how much and how significant for Pentax is very hard to tell.

Last edited by mecrox; 07-28-2017 at 06:24 AM.
07-28-2017, 06:08 AM - 1 Like   #15
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QuoteOriginally posted by beholder3 Quote
This seems a little weird. 22m USD profit per 3 months lost on cameras alone?

If their profit per $2000 K-1 is 10% that means $200. This in itself would mean they sold 110,000 units less (already reduced to high profit items) in 3 months or 440,000 units less per year.

The initial production volume usually is highest and the K-1 had 7000/month or 84,000/year.

Even if they fully stopped all camera sales to zero for full three months I don't know how they could make 22m less profit per quarter just with cameras.
Well you have a running operation with staff, factorys and offices. Those are mostly fixed costs. They should be payed by sales, on a % basis over production costs. So if sales plummit and fixed costs don't adjust fast enough you loose a lot of money. Then there is the option of a write-off of stock. Maybe you do cut staff numbers but you take costs for those leaving staff in this quarter. Making a bigger loss then expected is not a big problem, stopping it is.

I don't think K-1 production is at a high level at the moment. Something around 1000ish would maybe be enough.
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