TOKYO, March 12 (Reuters) - Japan's Ricoh (7752.T) said it aims to more than quadruple its operating profit margin to 10 percent in five years as the world's No.1 copier maker focuses on new businesses with growth potential such as digital commercial printers.
Ricoh, which also targets a return on equity of 12 percent in five years in comparison with 1.6 percent now, has suffered a profit tumble following the global downturn as corporate clients slashed spending on copiers and printers.
A global trend to reduce paper consumption out of growing concerns over the environment is also casting a shadow over the prospects for office machine demand.
"We have a rough image for the next five years, where our conventional businesses might not grow that much, but our new businesses including production printing will hopefully double," Ricoh CFO Zenji Miura told a business strategy briefing.
Production printers, or digital commercial printers, are used to print large documents such as product manuals and direct mail items quickly and in bulk, and are a fast-growing segment of the global office equipment market.
Of Ricoh's total annual revenues of 2 trillion yen ($22 billion), traditional operations including regular printers and copiers account for 1.7 trillion yen, while new businesses such as digital commercial printers and IT services make up the rest.
Ricoh, which competes with Canon Inc (7751.T), Xerox Corp (XRX.N) and Konica Minolta Holdings Inc (4902.T), bought International Business Machines Corp's (IBM.N) digital commercial printing operations for $725 million in 2007.
"We are fighting a difficult fight to get our (production printing) machines installed," Ricoh Chief Executive Shiro Kondo said. "But those efforts will start bearing fruit slowly but steadily from the next business year on."
Kondo, a 37-year company veteran, took Ricoh's helm in 2007 as its first top executive with an engineering background.
Fresh out of college, he was involved in the development of an advanced facsimile, which was dubbed then the world's first high-speed office fax machine, and later sprearheaded the development of Ricoh's first digital copier for overseas markets.
An avid dealmaker on weekdays and the driving force behind Ricoh's purchase of IBM's commercial printing operation and its $1.6 billion acquisition in 2008 of U.S. office machine distributor Ikon Office Solutions, Kondo is a devoted gardener at weekends.
Following the announcement, shares of Ricoh closed up 1.5 percent at 1,371 yen, outperforming the Nikkei average .N225, which rose 0.8 percent.
Ricoh held a 21.2 percent share in the global copier market in 2009, ahead of Xerox's 20.1 percent and Canon's 15.7 percent, according to data from research firm Gartner. ($1=90.59 Yen) (Editing by Michael Watson)
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