Consol. PDF 1,213kb

Q2 2014 Earnings
Financial Results
for the Second Quarter
Ended September 30, 2014
October 28, 2014
OMRON Corporation
Summary
• H1 saw high OP with large sales increase and
higher profitability. Gross profit margin up
1.4%pt, with 10%-plus OP margin.
• Makes upward revision to full-year forecast.
Expects sales to go up in all business
segments, led by constantly strong IAB.
• Annual dividends forecasted at ¥71, up ¥18
y/y. Omron will carry out acquisition and
disposal of own shares, and treasury stock
cancellation.
1
Contents
1. H1 Results
P. 3
2. Full-Year Forecast
P. 11
3. Shareholder Return
P. 18
4. NS Acquisition, Brazil
P. 21
References
P. 29
2
H1 Results
3
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
H1 Results
Large sales increase to post high OP.
(Billions of yen)
FY2014
H1 Forecast
FY2014
H1 Actual
vs. Forecast
FY2013
H1 Actual
Y/Y
Net Sales
400.0
404.5
+1.1%
359.7
+12.4%
Gross Profit
158.0
160.6
+1.6%
137.8
+16.5%
(39.5%)
(39.7%)
(+0.2%pt)
(38.3%)
(+1.4%pt)
39.0
43.0
+10.3%
30.8
+39.7%
(9.8%)
(10.6%)
(+0.9%pt)
(8.6%)
(+2.0%pt)
NIBT
40.0
45.0
+12.5%
30.0
+49.8%
Net Income
29.0
33.7
+16.2%
21.2
+59.1%
1USD(JPY)
101.2
103.4
+2.2
98.2
+5.2
1EUR(JPY)
137.8
139.0
+1.2
128.9
+10.1
(%)
Operating Income
(%)
attributable to shareholders
4
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Sales by Segment
IAB and “Other” were major drivers.
(Billions of yen)
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2014
H1 Forecast
FY2014
H1 Actual
vs. Forecast
FY2013
H1 Actual
156.5
161.2
+3.0%
138.0
+16.8%
51.5
50.1
-2.7%
48.8
+2.7%
65.0
65.6
+0.9%
59.5
+10.3%
31.0
30.9
-0.4%
29.1
+6.0%
46.0
45.5
-1.2%
42.8
+6.1%
47.5
48.6
+2.3%
38.5
+26.4%
2.5
2.6
+4.3%
3.0
-13.3%
400
404.5
+1.1%
359.7
+12.4%
Y/Y
5
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Operating Income Analysis, Y/Y
Sales up, added value (%) up, to boost operating income.
Sales up 
Added value (%) up
-3.4
+19.4
Fixed
manufacturing
costs up
SG&A up
-7.0
(Billions of yen)
R&D up
-1.3
43.0
Forex,
Raw material costs
30.8
+4.5
Gross profit up 16.0
(excl. forex & raw material impacts)
Operating income up 12.2
H1 2013
Actual
H1 2014
Actual
6
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Operating Income Analysis, vs. July Forecast
OP up, due to higher added value led by sales increase,
and cost-spending carryover.
(Billions of yen)
SG&A
down
Fixed
manufacturing
Sales up 
costs up
Added value up
R&D down
43.0
+0.5
+1.4
-0.1
Forex,
Raw material costs
39.0
+1.4
+0.8
Gross profit up 1.3
(excl. forex & raw material impacts)
Operating income up 4.0
H1 2014
Forecast
H1 2014
Actual
7
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Operating Income by Segment
IAB and “Other” were major drivers.
(Billions of yen)
FY2014
H1 Forecast
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2014
H1 Actual
vs. Forecast
FY2013
H1 Actual
Y/Y
23.6
26.7
+3.1
17.8
+8.9
(15.1%)
(16.6%)
(+1.5%pt)
(12.9%)
(+3.6%pt)
4.4
4.0
-0.4
3.9
+0.1
(8.5%)
(7.9%)
(-0.6%pt)
(8.1%)
(-0.1%pt)
4.4
4.1
-0.3
4.3
-0.2
(6.8%)
(6.3%)
(-0.5%pt)
(7.3%)
(-1.0%pt)
-1.2
-1.0
+0.2
-1.8
+0.8
(-)
(-)
(-)
(-)
(-)
3.6
3.9
+0.3
4.4
-0.5
(7.8%)
(8.7%)
(+0.9%pt)
(10.3%)
(-1.6%pt)
7.0
7.9
+0.9
5.8
+2.1
(14.7%)
(16.2%)
(+1.5%pt)
(15.0%)
(+1.2%pt)
-2.8
-2.6
+0.2
-3.6
+1.0
39.0
43.0
+4.0
30.8
+12.2
(9.8%)
(10.6%)
(+0.9%pt)
(8.6%)
(+2.0%pt)
8
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Consolidated B/S
(Billions of yen)
Mar. 31, 2014
Sept. 30, 2014
Current assets
396.5
423.9
+27.4
Property, plant & equipment
135.6
140.8
+5.3
Investments and other assets
122.6
110.5
-12.1
Total Assets
654.7
675.3
+20.5
Current liabilities
162.7
165.1
+2.4
59.2
42.4
-16.9
Total Liabilities
221.9
207.5
-14.5
Shareholders' equity
430.5
465.2
+34.7
2.3
2.6
+0.3
Total Net Assets
432.8
467.8
+35.0
Total Liabilities and Shareholders' Equity
654.7
675.3
+20.5
65.8%
68.9%
+3.1%pt
Long-term liabilities
Noncontrolling interests
Shareholders' equity to total assets
vs. Mar. 31, 2014
9
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Consolidated Cash Flows
Without ¥13.2bn pension fund contribution, FCF up Y/Y.
(Billions of yen)
FY2013
H1
FY2014
H1
FY2014
H1
Y/Y
(ex. Pension fund)
(ex. Pension fund)
Operating activities
33.8
29.5
42.7
+8.9
Investing activities
-12.9
-9.9
-9.9
+3.1
20.8
19.6
32.8
+12.0
-10.8
-6.7
-6.7
+4.1
66.9
105.4
118.6
+51.6
Capital expenditures
13.6
15.0
15.0
+1.5
Depreciation and amortization
11.9
13.2
13.2
+1.3
Free cash flow (FCF)
Financing activities
Cash and cash equivalents
at end of the period
10
Full-Year Forecast
11
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
H2 Business Environment by Area (vs. H1)
Overall, expecting the H2 climate to be the same as H1.
Japan
will continue to be on a recovery trend overall,
with automotive capital investment going solid.
Overseas
• Americas: US will go solid thanks to increasing consumer
spending and capital investment. Brazil will still feel bitter
sentiment.
• Europe: Flat overall. Russia will remain uncertain.
• China: Active investments in some industries (e.g.
smartphones) will cool down. Others flat overall.
• Asia: Thailand and Indonesia will still remain unclear. But
India and some other countries will see some pickup signs.
12
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
H2 Business Environment by Business Segment (vs. H1)
IAB
Industrial Automation
EMC
Electronic & Mechanical
Components
AEC
Automotive Electronic
Components
SSB
Social Systems,
Solutions & Service
HCB
Healthcare
Other
Japan: Same as H1 overall, thanks to automotive-related demand staying brisk.
Overseas: China's smart-phone related-demand will cool down. Americas
favorable especially N.America. Europe and Asia will stay flat.
Japan: Home electronics and automotives will be the same as H1 overall.
Overseas: Healthy in Americas. Flat in other areas.
Japan: Mini-vehicles will drop partly, but unchanged overall.
Overseas: N. America will be solid. Asia and China will be the same level as H1.
Demand for train system will go solid, enjoying customers' sound performance.
Growth of Environmental Solutions will slow down due to the market change.
Japan: Demand will steadily go back-on-track trend.
Overseas: Healthy overall, while Russia still weak.
In Backlight, smart-phone related orders will stay favorable.
Environmental Solutions will slow down due to the market change.
13
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Full-Year Forecast
Omron makes upward revision, targeting to record highestever profits two years in a row.
(Billions of yen)
(1) FY2014
Initial Fcst
(2) FY2014
Oct. Fcst
(2)/(1)
FY2013
Actual
Y/Y
Net Sales
800.0
835.0
+4.4%
773.0
+8.0%
Gross Profit
317.0
331.0
+4.4%
297.2
+11.4%
(39.6%)
(39.6%)
(±0.0%pt)
(38.5%)
(+1.2%pt)
74.0
84.0
+13.5%
68.1
+23.4%
(9.3%)
(10.1%)
(+0.8%pt)
(8.8%)
(+1.3%pt)
71.0
84.5
+19.0%
62.0
+36.3%
51.0
62.5
+22.5%
46.2
+35.3%
1USD(JPY)
100.0
101.9
+1.9
100.1
+1.8
1EUR(JPY)
135.0
137.1
+2.1
134.0
+3.1
(%)
Operating Income
(%)
NIBT
Net Income
attributable to shareholders
14
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Full-Year Sales Forecast by Segment
Sales up in all, especially looking IAB to stay strong.
(Billions of yen)
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
(1) FY2014
Initial Fcst
(2) FY2014
Oct. Fcst
(2)/(1)
FY2013
Actual
Y//Y
300.0
321.0
+7.0%
291.7
+10.0%
101.0
101.5
+0.5%
97.7
+3.9%
128.5
131.5
+2.3%
126.6
+3.9%
85.5
84.5
-1.2%
82.7
+2.2%
98.5
100.0
+1.5%
89.3
+12.0%
83.0
91.5
+10.2%
78.9
+15.9%
3.5
5.0
+42.9%
6.1
-16.5%
835.0
+4.4%
773.0
+8.0%
800.0
15
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Full-Year Operating Income Forecast by Segment
Eyeing big OP increase with solid IAB.
(Billions of yen)
(1) FY2014
Initial Fcst
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
(2) FY2014
Oct. Fcst
(2)-(1)
FY2013
Actual
Y//Y
40.0
50.0
+10.0
38.8
+11.2
(13.3%)
(15.6%)
(+2.2%pt)
(13.3%)
(+2.3%pt)
9.2
9.2
±0.0
8.7
+0.5
(9.1%)
(9.1%)
(±0.0%pt)
(8.9%)
(+0.2%pt)
9.2
8.9
-0.3
9.1
-0.2
(7.2%)
(6.8%)
(-0.4%pt)
(7.2%)
(-0.4%pt)
6.5
6.2
-0.3
5.6
+0.6
(7.6%)
(7.3%)
(-0.3%pt)
(6.7%)
(+0.6%pt)
8.0
7.2
-0.8
7.5
-0.3
(8.1%)
(7.2%)
(-0.9%pt)
(8.5%)
(-1.3%pt)
9.5
10.5
+1.0
8.7
+1.8
(11.4%)
(11.5%)
(+0.1%pt)
(11.0%)
(+0.5%pt)
-8.4
-8.0
+0.4
-10.3
+2.3
74.0
84.0
+10.0
68.1
+15.9
(9.3%)
(10.1%)
(8.8%)
(+1.3%pt)
(+0.8%pt)
(8.8%)
16
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Management Indices
Looking to achieve all targets. ROIC and EPS steadily better.
(1) FY2014
Initial Fcst
Gross Profit
Margin
Operating Profit
Margin
(2) FY2014
Oct. Fcst
(2)-(1)
FY2013
Actual
Y/Y
39.6%
39.6%
±0.0%pt
38.5%
+1.2%pt
9.3%
10.1%
+0.8%pt
8.8%
+1.3%pt
ROIC
approx.
12%
>13%
-
11.3%
-
ROE
approx.
12%
>13%
-
11.6%
-
\231.7
\285.5*
up \53.8
\209.8
up \75.7
EPS
*FY2014 EPS forecast includes planned share buyback this fiscal year.
17
Shareholder Return
18
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Per-Share Dividend Forecast
Planning to increase annual dividend to ¥71, up ¥18.
Interim decided at ¥31.
Up ¥18
Full-year, forecast
[Interim below in brackets]
71
[31]
53
[25]
FY2013
Actual
FY2014
Forecast
*Interim dividend decided.
19
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Share Buyback, Own Share (Treasury Stock) Cancellation
Omron is to buy back 3mil or ¥15bn shares, and cancel 9.9mil
treasury stock.
Share Buyback Treasury Stock Cancellation
3mil or
¥15bn
9.9mil
Treasury
Stock,
7.04mil
0.14mil
Sept. 30,
2014
Oct. 29 – Dec. 5
Dec. 25
Dec. 25
(after cancellation)
* Share buyback ends when the amount reaches 3mil shares or ¥15bn.
Dec. 25 cancellation = the above buyback + currently owned 6.9mil shares.
20
NS Acquisition, Brazil
21
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
EARTH-1 STAGE Strategy
Omron acquired NS company to accelerate EARTH-1 STAGE
strategy of “Super-global Growth”.
Maximization of
IA Business
Super-global Growth
Strategy
New Business Strategy for
the Optimization Society
22
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
About NS Company
Top Nebulizer Company in Brazil with 40-plus-year history
• Company Name
NS Indústria de Aparelhos Médicos Ltda.
• Establishment
November 27, 1969
• Business
Manufacture and sales of nebulizers
(Domestic top share of 40%)
• FY13 Consol.
BRL 97.5million (¥4.5bn)*
*1BRL = 45.8 JPY
Sales
• Number of employees 480
Nebulizers are …
Therapeutic devises that vaporize liquid
medicine so patients can inhale. Used for the
treatment of asthma, and COPD, chronic
obstructive pulmonary disease.
23
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Why Acquired, 1/3: To Win Global Top Share
With NS, Omron can expand its business in the largest
nebulizer market, then win global #1 market share.
Before Acquisition, 2014
After Acquisition
1
Corp. A
1 Omron + NS
2
Omron
2
Corp. A
3
Corp. B
3
Corp. B
4
Corp. C
4
Corp. C
5
NS
:
:
*Omron’s Research
24
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Why Acquired, 2/3: To Win Sales & Service Network
Omron can utilize NS’s wide sales & service network of
healthcare products in Brazil all at once.
NS Sales & Service Representatives
+
The number of
pharmacies, medical
device dealers, home
electronics retailers
Coverage of
the Brazil market*
approx.
approx.
15,000
50,000
25%
85%
Sales reps
Service reps
*Omron’s research, estimating the number of
pharmacies, medical device dealers, and home
electronics retailers in Brazil at approx. 60,000 in total.
*as of FY2013
25
H1 Results
Full-Year Forecast
Shareholder Return
NS Acquisition
Why Acquired, 3/3: To Get Local Manufacture & R&D Sites
With manufacture and R&D sites in Latin America, Omron is
ready to grow faster in the region.
• Swift production approvals & licenses
(originally time-consuming)
• Manufacture and R&D possible in
Brazil
Expansion in Latin America
26
Omron Nominated for TSE Award
Omron selected as one of the four finalists of
Tokyo Stock Exchange "Corporate Value Improvement Award" in 2014
TSE website:
http://www.tse.or.jp/english/listing/award/corporate_value.html
27
28
References
29
Conditions: Exchange Rates & Raw Material Costs
No change to the initially set conditions.
Q3-Q4 Conditions
Exchange rates
• 1 USD = ¥100
• 1 EUR = ¥135
Raw material costs
• Silver = ¥72,000/kg
• Copper = ¥760/kg
¥1 fluctuation impact (full-year, approx.)
Price change impact (full-year, approx.)
Sales
OP
USD
¥3.1bn
¥0.4bn
Silver
EUR
¥0.8bn
¥0.4bn
Copper
Price change
OP
¥1,000/kg
¥0.1bn
¥10/kg
¥0.1bn
30
ROIC Definition
<Consol. B/S>
Net income
ROIC = attributable to shareholders
Invested capital
Invested capital*
= Net assets + Interest-bearing debt
*FY13 year-end & FY14 Q2-end average.
Capital cost forecast at 6%
for EARTH-1 STAGE (FY14-16)
31
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, 2015”. Figures rounded to the nearest JPY million and percentage to one decimal place.
Contact:
Investor Relations Department
<IRに関するお問い合わせ>
Investor
Relations Headquarters
Omron
Corporation
オムロン株式会社
Phone:
+81-(0)3-6718-3421
経営IR室
経営IR部
Email: [email protected]
: www.omron.com
03-6718-3421
電話 Website:
E-mail : [email protected]
*To subscribe to Omron IR email newsletters:
HPアドレス
www.omron.co.jp
Send us:
an email
titled "subscribe".
32
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