Growth strategy of Ricoh NPR <6209>.

1. Market Environment When it comes to video distribution, there are few pure-play companies that can handle various types of video distribution, such as J-Stream <4308>. However, some companies that are partially similar include Brightcove Inc and Vimeo Inc for video sharing and distribution platforms, and Akamai Technologies, Inc. and Amazon.com Inc , which provide Amazon CloudFront and CDN services, respectively. They are all global giant companies. In addition, some major ISP providers that deliver the service to their own members and portal site providers that partner with major content holders to provide secondary distribution services also conduct some business similar to the company. In the case of webinars in the pharmaceutical area, which account for a large proportion of the company's revenue, some overlap with the business of Kimura Information Technology Co., Ltd. and M3, Inc. 2. Meanwhile, the viewing environment of internet videos has improved both indoors and outdoors, due to people carrying devices capable of playing videos such as smartphones at all times, as well as the improvement of Wi-Fi environments and the spread of 5G. Additionally, the increasing use of videos in SNS and in-house portals, improved recognition of cost reduction and promotional effects resulting from the use of videos, and other factors have further improved the video-distribution environment. Therefore, not only Generation Z, who grew up with digitalization, but all generations have started to watch videos on the internet, and the video distribution market has rapidly expanded, especially due to the increase in demand for online services amid the COVID-19 pandemic. It was expected that the demand for hybrid and other types of video distribution would continue to be strong even after the pandemic. However, with the transition to the fifth phase of the new coronavirus infection in May 2023, there has been a strong trend toward real-world meetings, particularly in the pharmaceutical and EVC areas, and the industry seems to have gone through a short-term plateau. Nevertheless, it is widely believed that online services, including hybrid, will regain their growth momentum by 2024, after the real-world meeting trend subsides, given the convenience and high value of video distribution. In this environment, the company, which has accumulated know-how as a pioneer and a pure-play company for many years while constantly incorporating cutting-edge technology, is also expected to return to the growth trend.

While the global automobile market is expected to expand primarily in emerging countries, environmental regulations and electrification are expected to reduce ICE in the medium to long term in response to climate change and energy issues.

On the other hand, the development of hydrogen engines and e-fuel engines that use hydrogen generated from renewable energy sources is also underway. When comparing the CO2 emissions on a Well-to-Wheel basis between EVs and HEVs (Hybrid Electric Vehicle), HEVs equipped with engines with a thermal efficiency of 50%, which are currently being developed, have been shown to be competitive with EVs. This suggests that HEVs may become an option for next-generation mobility. As a recent topic, in March 2023, the EU changed its previous policy of banning the sale of gasoline engine vehicles in 2035 to allowing engine vehicles that use CO2 and hydrogen synthetic fuels to be sold after 2035. In addition, it has been pointed out that the disposal of used EV batteries and the increase in import tariffs on Chinese-made EVs by the EU following the United States could slow down the EV trend. Against this backdrop, the company is promoting technological development for the evolution of engines, such as further fuel efficiency improvement of gasoline engines and adaptation to next-generation engines that use hydrogen and alternative fuels. In addition, the company is focusing on expanding business in non-ICE areas in consideration of the trend of electrification and promoting reform of business portfolios.

Against this backdrop, the company is promoting technological development for the evolution of engines, such as further fuel efficiency improvement of gasoline engines and adaptation to next-generation engines that use hydrogen and alternative fuels. In addition, the company is focusing on expanding business in non-ICE areas in consideration of the trend of electrification and promoting reform of business portfolios.

(Authored by FISCO guest analyst Masanobu Mizuta)