Ricoh reaches agreement to sell shares in Ricoh Logistics System

At a meeting on May 18, the Ricoh Board of Directors agreed to sell 66.6% (omitted the figures below the second decimal place) of the company’s shares in Ricoh Logistics System Co., Ltd., toSBS Holdings Co., Ltd.

Ricoh thereafter plans to transfer all of its remaining ordinary shares in Ricoh Logistics System, representing a 33.3% stake (equivalent to over one-third), to a new joint venture. Following that transfer, Ricoh intends to transfer ordinary shares equivalent to a 33.4% of the new joint venture company to Otsuka Corporation (collectively, these transfers are “Transactions”).

Ricoh plans to complete these transactions, subject to the approval of the relevant regulators, on August 1, 2018. Ricoh Logistics System would thereby become an equitymethod affiliate.

1. Purpose of Transactions

Ricoh formed Ricoh Logistics System in February 1964 by establishing its logistics department as a separate business entity. That company now has more than 100 businesslocations in Japan and 5 overseas. As the Group’s logistics subsidiary, it provided a range of logistics services that underpinned our global supply chain management, including adjacent activities such as packaging design, procurement, production, and sales. Furthermore, it was also involved in customer collections, recycling and treatment, and international logistics. It has also leveraged the expertise it has secured over the years in information and logistics technologies to deliver third-party logistics (3PL) services as part of a diverse portfolio of solutions for customers in a wide range of industries.

SBS Holdings provides an array of 3PL services, and has amassed a wealth of expertise in the development of logistics centers.

In recent years, logistics industry is facing a dramatic change. The ecommerce market has

evolved considerably, and this offers further scope for expansion while posing such challenges as higher personnel and outsourcing costs stemming from labor shortages. These factors are driving efforts to streamline operations through automation leveraging on the Internet of Things and robotics and demand for one-stop services to cater to more diverse and complex needs.

In transferring these shares, Ricoh aims to boost the business of Ricoh Logistics System through a partnership with SBS Holdings, enhancing its competitiveness and accelerating its growth through new capital, resources, and expertise. After these Transactions, Ricoh Logistics System will continue to handle logistics and other services for the Ricoh Group, Otsuka, and other customers. Ricoh Logistics System and SBS Holdings are extremely complimentary businesses because they both focus on 3PL services. The agreement to transfer shares came about following Ricoh’s conclusion that new synergies could be created by combining the networks, customer base, technologies, and know-how of Ricoh Logistics System and SBS Holdings. Not only would this create a strong third-party logistics conglomerate with a full range of logistics capabilities, but it would also enable Ricoh Logistics System to progress sustainably and enhance their corporate value.

After Ricoh, Otsuka is Ricoh Logistics System’s second-largest customer. Ricoh agreed to transfer shares to Otsuka after concluding that an indirect capital participation would be important to the ongoing development and corporate value growth of Ricoh Logistics System.

After the Transactions, Ricoh will continue to support Ricoh Logistics System as an equity method affiliate which will also help underpin the Group’s logistics services.

2. Overview of Ricoh Logistics System

3. Overview of share transferee

4. Overview of joint venture

5. Number of shares transferred, transfer price, and number of shares owned before and after the transfer

(1) Transfer of shares to SBS Holdings

(2) Transfer of shares to joint venture

6. Schedule

7. Outlook

For the year ending March 31, 2019, Ricoh plans to book a 12 billion yen gain on sale of shares on a consolidated basis.

Also for the same fiscal year, the Company plans to book a ¥23.4 million gain on the sale of shares in an affiliate to extraordinary income on a non-consolidated basis.

Please note that there is no change in the announced consolidated financial forecastfor the fiscal year ending March 31, 2019.