Japan's Ricoh weighs impairment charge of up to $900m
Japan's Ricoh weighs impairment charge of up to $900m
Shift to digital forces office equipment makers to retool
Nikkei staff writers
Ricoh President Yoshinori Yama****a laid out the company's new growth strategy earlier this month.
TOKYO -- Office equipment producer Ricoh is considering booking up to 100 billion yen ($929 million) in impairment losses on underperforming North American operations.
The units include U.S. distributor Ikon Office Solutions, which the Tokyo-based company bought for about $1.6 billion in 2008. Ricoh may record the losses for the current fiscal year ending next month. The Japanese company had nearly 390 billion yen in goodwill and intangible assets from such acquisitions on the books at the end of 2017.
Demand for printers and copiers has declined in Ikon's key markets of North America and Europe as businesses shift from paper to digital. Similar circumstances drove Japan's Fujifilm Holdings to pursue the acquisition of longtime U.S. partner Xerox.
Ricoh currently expects to break even on a net basis for the year through March 31. Logging an impairment loss may well plunge it into the red.
Worldwide, shipments of printers, copiers and multifunction devices shrank 4.1% in 2016 to just under 99.03 million units, according to U.S.-based International Data. Shipments have declined 26% over nine years. Color printers and copiers are selling well in emerging economies, but cooling demand has caused sales to slump in many Western markets.
In a way, printer makers have hamstrung themselves with their technological advances. The improving capabilities of multifunction devices -- which perform some combination of printing, copying and scanning -- mean offices need fewer of them.
By 2020, the U.S. market is expected to shrink 6.5% from the level in 2015.
Compounding the headwinds in the office market, there is a glut of players in the commercial and industrial printing segments, resulting in tough competition.
The shift toward digital formats and the growing array of functions that a single machine can handle have cut into demand for such office equipment as copiers and printers.
Ricoh embarked last year on a restructuring plan that included at least 5,000 job cuts, primarily in its biggest overseas market of the U.S. The company has also stopped financial support to a money-losing Indian arm and is working to rebuild assets by selling off shareholdings.
Fujifilm, for its part, recently decided to merge its printer operations with those of Xerox, while U.S. rival HP in November finalized the purchase of Samsung Electronics' printer business.