Consol. PDF 547kb

Q2 2015 Earnings
Financial Results
for the Second Quarter
Ended September 30, 2015
October 27, 2015
OMRON Corporation
Summary
 FY2015 H1 Results
• Sales up, profits down.
• Other saw large OP loss.
• IAB solid.
 FY2015 Full-Year Forecast
• Sales up, profits down, amid changing market environment.
• Omron will take actions for slow PV inverters & backlights.
• Main 5 businesses, especially IAB, will increase sales.
 Shareholder Return
• Payout ratio up to 30%.
• Omron will buy back and cancel treasury stock.
1
Contents
1. FY15 H1 Results
P. 3
2. FY15 Full-Year Forecast
P. 10
3. Shareholder Return
P. 16
4. Steps to Growth
P. 20
References
P. 25
2
FY15 H1 Results
3
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
H1 Results
Sales up, OP down.
(¥bn)
FY2014
H1
FY2015
H1
Y/Y
Net Sales
404.5
413.5
+2.2%
Gross Profit
160.6
161.1
+0.3%
(39.7%)
(39.0%)
(-0.7%pt)
43.0
33.0
-23.3%
(10.6%)
(8.0%)
(-2.6%pt)
45.0
32.8
-27.2%
33.7
24.5
-27.3%
1USD(JPY)
103.4
121.5
+18.1
1EUR(JPY)
139.0
134.2
-4.8
(%)
Operating Income
(%)
NIBT
Net Income
Attributable to Shareholders
4
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Sales by Segment
• IAB, EMC, AEC, and HCB posted sales growth.
• SSB and Other down due to drop in PV inverters and backlights.
FY2014
H1
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Businesses under the Direct Control of HQ
Eliminations & Corporate
Total
FY2015
H1
Y/Y
161.2
170.7
+5.9%
50.1
54.3
+8.5%
65.6
68.5
+4.5%
30.9
28.7
-6.9%
45.5
52.2
+14.8%
48.6
36.8
-24.3%
2.6
2.3
-17.6%
404.5
413.5
(¥bn)
+2.2%
5
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Operating Income by Segment
• IAB & EMC up.
• PV inverters and backlights down with sales down.
FY2014
H1
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Businesses under the Direct Control of HQ
Eliminations & Corporate
Total
FY2015
H1
(¥bn)
Y/Y
26.7
27.0
+0.2
(16.6%)
(15.8%)
(-0.8%pt)
4.0
4.9
+0.9
(7.9%)
(9.0%)
(+1.1%pt)
4.1
3.1
-1.0
(6.3%)
(4.6%)
(-1.7%pt)
-1.0
-2.0
-0.9
(-)
(-)
(-)
3.9
3.9
±0
(8.7%)
(7.5%)
(-1.2%pt)
7.9
-0.1
-8.0
(16.2%)
(-)
(-)
-2.6
-3.8
-1.2
43.0
33.0
-10.0
(10.6%)
(8.0%)
(-2.6%pt)
6
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Operating Income Analysis, Y/Y
OP down, with higher SG&A and R&D intended for growth.
43.0
Forex,
Raw material
impacts
Added value
down
+1.0
-5.2
Fixed
manufacturing
costs down
+0.3
SG&A up
-4.4
(¥bn)
R&D up
-1.6
33.0
Gross profit down 4.9
(excl. forex & raw material impacts)
Operating income down 10.0
H1 2014
Actual
H1 2015
Actual
7
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Consolidated B/S
No notable changes.
(¥bn)
Mar. 31, 2015
Sept. 30, 2015
vs. March
Current assets
434.1
419.4
-14.7
Property, plant & equipment
151.5
151.6
+0.1
Investments and other assets
125.5
127.8
+2.3
Total Assets
711.0
698.8
-12.2
Current liabilities
176.8
158.3
-18.4
42.2
41.9
-0.2
Total Liabilities
218.9
200.3
-18.7
Shareholders' equity
489.8
496.2
+6.4
2.3
2.3
±0
Total Net Assets
492.1
498.5
+6.4
Total Liabilities and Shareholders' Equity
711.0
698.8
-12.2
68.9%
71.0%
+2.1%pt
Long-term liabilities
Noncontrolling interests
Shareholders' equity to total assets
8
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Consolidated Cash Flows
FCF plus, even after M&A and capital investments.
(¥bn)
FY2014
FY2015
H1
H1
Y/Y
Operating activities (Operating CF)
29.5
35.4
+6.0
Investing activities (Investing CF)
-9.9
-27.1
-17.2
Free cash flow (FCF)
19.6
8.4
-11.3
Financing activities (Financing CF)
-6.7
-9.2
-2.5
105.4
99.6
-5.8
Capital expenditures
15.3
17.5
+2.2
Depreciation and amortization
13.2
15.2
+2.1
Cash and cash equivalents
at end of the period
9
FY15 Full-Year Forecast
10
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
H2 Business Environment by Area (vs. H1)
More uncertain on a global level, especially in emerging markets.
Japan
• Automobile: Capital investments will recover. But sales still
slow, especially mini cars.
• Unclear overall with semiconductors still soft.
Overseas
• Americas: North America will go solid thanks to consumer
spending and capital investment increase. Brazil will remain
slow due to the stagnant economy.
• Europe will be flat as a whole.
• China will slow down due to the worsening economy.
• Asia will slow down in total, with Thailand and Indonesia
suffering delay in economic recovery.
11
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
H2 Business Environment by Business Segment (vs. H1)
IAB
Industrial Automation
EMC
Electronic & Mechanical
Components
AEC
Automotive Electronic
Components
SSB
Social Systems,
Solutions & Service
Japan: Semiconductors will remain soft. Automotive-related demand will come back.
Overseas: China will slowdown. Asia will remain slow. In the US, oil & gas still sluggish, FA
flat. Mexico steady. Europe flat.
Home electronics: Solid overall, thanks mainly to demand in Europe.
Automotive components: Flat overall. Japan will remain slow. N. America healthy.
Japan: Will remain soft due to mini-car tax hike.
Overseas: China will keep slowing down with car sales drop. N. America still strong backed
by the robust economy.
Train station system will go solid overall, enjoying steady capital investments.
Environmental Solutions: The market for small-sized biz-use will remain low.
Japan: Home-use solid, enjoying inbound (foreign tourists') demand. Professional-use will
HCB
Healthcare
stay stagnant.
Overseas: China will slow down with stagnant market growth. Brazil showing slowdown
sign hit by the stagnant market.
Other
Businesses under the
Direct Control of HQ
Environmental Solutions: Both residential-/small-sized biz-use will remain low.
Backlight: Will remain hit by the delaying recovery of the smartphone market in China.
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H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Full-Year Forecast
Omron makes downward revision.
(1) FY2015
Initial Plan
(2) FY2015
Oct. Fcst*
(¥bn)
(2)/(1)
(3) FY2014
(2)/(3)
Actual
Net Sales
900.0
860.0
-4.4%
847.3
+1.5%
Gross Profit
356.0
338.0
-5.1%
332.6
+1.6%
(39.6%)
(39.3%)
(-0.3%pt)
(39.3%)
(±0%pt)
90.0
70.0
-22.2%
86.6
-19.2%
(10.0%)
(8.1%)
(-1.9%pt)
(10.2%)
(-2.1%pt)
NIBT
89.0
71.0
-20.2%
87.4
-18.8%
Net Income
Attributable to Shareholders
66.5
53.5
-19.5%
62.2
-13.9%
1USD(JPY)
115.0
120.8
+5.8
110.0
+10.8
1EUR(JPY)
130.0
134.6
+4.6
138.7
-4.1
(%)
Operating Income
(%)
*H2 forex assumption: 1USD = ¥120, 1EUR = ¥135
13
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Full-Year Sales Forecast by Segment
• IAB: Oil & Gas down, but up in total.
• EMC, AEC and HCB up while struggling in emerging markets.
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Businesses under the Direct Control of HQ
Eliminations & Corporate
Total
(1) FY2015
(2) FY2015
Initial Plan
Oct. Fcst
345.0
350.0
+1.4%
331.8
+5.5%
109.0
108.0
-0.9%
103.9
+3.9%
140.0
138.0
-1.4%
137.9
+0.1%
85.0
80.0
-5.9%
80.4
-0.5%
111.0
111.0
±0%
100.6
+10.3%
105.0
68.0
-35.2%
87.4
-22.2%
5.0
5.0
±0%
5.3
-3.4%
900.0
860.0
-4.4%
847.3
+1.5%
(2)/(1)
(3) FY2014
(¥bn)
Actual
(2)/(3)
14
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Full-Year Operating Income Forecast by Segment
IAB & EMC up. Focus on “IA Business Maximization” working.
(¥bn)
(1) FY2015
(2) FY2015
Initial Plan
Oct. Fcst
57.0
55.0
-2.0
54.6
+0.4
(16.5%)
(15.7%)
(-0.8%pt)
(16.5%)
(-0.7%pt)
11.2
10.5
-0.7
10.2
+0.3
(10.3%)
(9.7%)
(-0.6%pt)
(9.8%)
(-0.1%pt)
9.3
7.5
-1.8
9.2
-1.7
(6.6%)
(5.4%)
(-1.2%pt)
(6.7%)
(-1.3%pt)
5.5
3.5
-2.0
5.0
-1.5
(6.5%)
(4.4%)
(-2.1%pt)
(6.2%)
(-1.8%pt)
7.8
7.0
-0.8
6.5
+0.5
(7.0%)
(6.3%)
(-0.7%pt)
(6.5%)
(-0.2%pt)
10.0
-3.5
-13.5
8.4
-11.9
Businesses under the Direct Control of HQ
(9.5%)
(-)
(-)
(9.6%)
(-)
Eliminations & Corporate
-10.8
-10.0
+0.8
-7.3
-2.7
90.0
70.0
-20.0
86.6
-16.6
(10.0%)
(8.1%)
(-1.9%pt)
(10.2%)
(-2.1%pt)
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Total
(2)/(1)
(3) FY2014
Actual
(2)/(3)
15
Shareholder Return
16
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Per-Share Dividend
• Omron is raising payout ratio to 30% this year.
• Set FY15 interim dividend at ¥34, up ¥3.
• Forecasting full-year total at ¥74, up ¥3.
Dividend,
Full-year
¥71
¥74
(25.0%)
(30.1%)
Year-end
¥40
¥40
Interim
¥31
¥34
FY2014
Actual
FY2015
Forecast
(payout ratio)
*Interim fixed.
17
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Treasury Stock Buyback and Cancellation
Omron will buy back its own ¥15bn or 4mil shares and will
cancel all of the acquired stock.
Value
¥15bn
Number of
Shares
4mil
Acquisition
Period
Oct. 28, 2015
- Dec. 25, 2015*
*Ends when reaching either of the above.
18
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Number of Outstanding Shares
The number of shares issued (excl. treasury stock), highest in
FY1994 at 262mil, will go down to 213mil this year.
 The Number of Outstanding Shares (excl. treasury stock)
■ Shares issued (excl. treasury stock)
■ Treasury stock acquisition
262
13
249
29
220
FY1994
FY2000
(mil shares)
Lehman
Bros’
Collapse
FY2008
FY2015 fcst
220
FY2013
3
217
FY2014
4
213
FY2015
fcst
19
Steps to Growth
20
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
M&A to Speed-Up Growth
• M&A as a part of Omron’s 10-year VG2020 key strategies.
• Carried out M&A this year to maximize IA Business.
Maximization of
IA Business
Super-Global Growth
Strategy
Delta Tau
IAB, Sept. 2015
Adept
IAB, Oct. 2015
NS
HCB, Oct. 2014
New Business
Strategy for the
Optimization Society
21
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
M&A: Why Delta Tau and Adept
To offer a wider range of products.
Input
Logic
Output
Vision Sensors
Controllers
PLC
Fiber Sensors
Emergency
Stop Switches
Adept
Robots
Safety
Light Curtains
Delta Tau
Motion
Controllers
Safety
Controllers
Servomotors
Servo Drivers
Inverters
Safety
Robots
22
H1 Results
Full-Year Forecast
Shareholder Return
Steps to Growth
Creation of New Business Opportunities
• Processing Line: Realizing higher-speed/accuracy production equipment
• Assembly & inspection lines: Creating a new style of automation human-machine harmony.
Information Technology (IoT of diverse control equipment)
Higher Precision
Processing Line
Injection Molding
Machines
Human-Machine Harmony
Conveyor
Line
Assembly
Line
Inspection
Line
Machine
Tools
Robotics Tech. (+R)
Omron’s Control Technology (ILO+S)
23
24
References
25
Conditions: Exchange Rates & Raw Material Costs
Revising conditions taking market fluctuations into account.
FY15 H2 conditions (Changes from the April 27 conditions, ¥)
Exchange rates
Raw material costs
• 1 USD = ¥120 (+5)
• Silver = ¥65,000/kg (-2,000)
• 1 EUR = ¥135 (+5)
• Copper = ¥770/kg (-70)
¥1 fluctuation impact (full-year, approx.)
Price change impact (full-year, approx.)
Sales
OP
USD
¥3.4bn
¥0.3bn
Silver
EUR
¥0.8bn
¥0.4bn
Copper
Price change
OP
¥1,000/kg
¥80mn
¥10/kg
¥30mn
*FY2014 results used to calculate exchange rates & raw material costs fluctuation impacts.
26
ROIC Management: Down-Top ROIC Tree
On-site
To-Dos
Cycle
KPI
• Sales in focus
industries/areas
• Sales of new/focus products
• Selling price control
• Variable costs reduction,
value/%
• Defect costs %
• Per-head production #
• Automation %
(headcount reduction)
• Labor costs–sales %
• Inventory turnover months
• Slow-moving inv. months
• Credits & debts months
• Facilities turnover
(1/N automation ratio)
Drivers
GP Margin
Added
-value %
ROS
Fixed manuf.
costs %
ROIC
SG&A %
R&D %
Working capital
turnover
Fixed assets
turnover
Invested
Capital
Turnover
27
ROIC Definition
<Consol. B/S>
Net income
ROIC = attributable to shareholders
Invested capital
Invested capital*
= Net assets + Interest-bearing debt
*The average of FY14 year-end result, FY15
quarterly results and forecasts.
Capital cost forecast at 6%
for EARTH-1 STAGE (FY14-16)
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Notes
1. The consolidated statements of Omron Corporation (the Company) are prepared in accordance with U.S. GAAP.
2. Projected results and future developments are based on information available to the Company at the current time,
as well as certain assumptions judged by the Company to be reasonable. Various factors could cause actual results
to differ materially from these projections. Major factors influencing Omron's actual results include, but are not
limited to,
(i) economic conditions affecting the Company's businesses in Japan and overseas
(ii) demand trends for the Company's products and services
(iii) the ability of the Company to develop new technologies and products
(iv) major changes in the fundraising environment
(v) tie-ups or cooperative relationships with other companies
(vi) movements in currency exchange rates and stock markets, and
(vii) accidents and natural disasters.
3. The presentation slides are based on “Summary of Consolidated Financial Results for the Second Quarter of the
Fiscal Year Ending March 31, 2016”. Figures rounded to the nearest JPY million and percentage to one decimal place.
Contact:
Investor Relations Department
Investor Relations Headquarters
Omron Corporation
Phone: +81-(0)3-6718-3421
Email: [email protected]
Website: www.omron.com
*To subscribe to Omron IR email newsletters:
Send us an email titled "subscribe".
29
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