CG Scorecard – Ricoh

25 September 2019 - 12:00 am UTC

CG Scorecard – Ricoh
Ricoh, a Tokyo-based printing products manufacturer.
  • Member of the Ricoh San-Ai Group, a corporate group revolved around its founder Kiyoshi Ichimura which is comprised of Ricoh Group companies and San-Ai Oil Group companies.
  • Holds shares in 38 non-listed companies amounting to JPY 1.1bn (USD 10.2m) and 23 listed entities amounting to JPY 13.5bn (USD 125m). Companies includes San-Ai Oil, Omron, Otsuka, and among others.
  • Owns a 52.99% in Ricoh Leasing, a Tokyo-based leasing provider, with a market cap of JPY 112.3bn (USD 1.07bn). Ricoh’s stake in Ricoh Leasing is worth JPY 59.5bn (USD 565m), representing approximately 7.6% of Ricoh’s equity value.
  • Low ROE and low P/BV; Ricoh operates at 4x net debt / EBITDA, which is high compared to its peers’ median of 1.04x EBITDA.
  • Ricoh trades at 13.57x price-to-earnings (P/E) and 7.95x EBITDA. It trades higher than its peers’ median multiple in terms of P/E (13x) and EV/EBITDA (6.59x) but trades lower in book-value than peers (0.82x vs 1.01x).
  • Various asset management firms had held shares in the company, including entities relating to Sumitomo Mitsui Trust Bank, Mizuho Bank, Mitsubishi UFJ Financial Group, Blackrock Japan, and Eastbridge Investments.
  • Effissimo Capital Management which has a 18.99% stake, recently changed the purpose of its investment from “portfolio investment”, to possibly introducing important proposals depending on the situation. The fund disclosed its initial 8.61% stake in Ricoh on 4 September 2015.
  • Total board of 13 members, of which seven are outside members. There is one female director, who is an outside member of the company.
  • Outside independent members: Makoto Azuma (age 74), first appointed in 2014, was a former executive at Toshiba and an advisory professor at the Tsing Hua University. He is the Chairperson of the Compensation Committee. Masami IIjima (age 69) was appointed in 2016; he is the current Chairperson of the board at Mitsui & Co., an outside director at Softbank Group and Isetan Mitsukoshi Holdings. Iljima is head of Ricoh’s nomination committee. Mutsuko Hatano (age 58) appointed in 2016, has an academic background and was previously at Hitachi. Kazuhiro Mori (age 72), who was first appointed in 2018, was a former vice president at Hitachi and had executive roles at various Hitachi related companies. Mori is a Trustee at Toyo University.
  • Outside audit & supervisory committee members: Takashi Narusawa (age 69), who was appointed in 2016, was a former executive at the Nomura Research Institute and is a current outside director at The Nisshin OilliO Group. Shigeru Nishiyama (age 57), who was appointed in 2016, has an accounting background, is a Professor at Waseda Business School and an outside director at Macromill. Yo Ota (age 51) appointed in 2017, is a partner at law firm Nishimura & Asahi and Vice Chairman of the Corporate Governance Committee at the Japan Association of Corporate Directors.
  • The company said it has business dealings with these companies and others related to its outside independent members and audit & supervisory committee members. However, Ricoh claims that each of these dealings amounts to less than 1% of its consolidated sales. This would not interfere with the independence of its outside members, the company said in its governance report. 
by Vivian Wong and Tack Kang