Consol. PDF 842kb

Q3 2014 Earnings
Financial Results
for the Third Quarter
Ended December 31, 2014
January 29, 2015
OMRON Corporation
Contents
1. Summary
P. 2
2. Q1-Q3 Results
P. 4
3. Full-Year Forecast
P. 13
4. Corporate Value Improvement
Award
P. 20
References
P. 24
1
Summary
2
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Summary
• Q1-Q3
• Large increase in sales and profits following H1.
• IAB brisk following H1.
• Consolidated OP up due to (1) the weak yen and
(2) expenses carryover.
• Q4 & Full-Year
• No changes to the initial full-year forecast.
• Expects IAB to stay solid in Q4, while Environmental
Solutions and Backlight to see one-time demand drop.
• Even with highly volatile businesses, negative impacts
on OP will be limited thanks to the weak yen.
• Omron will carry out growth investment as planned.
3
Q1-Q3 Results
4
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Q1-Q3 9-Month Results
Large sales & profits increase to post >10% OP.
(Billions of yen)
FY2013
Q1-Q3
FY2014
Q1-Q3
Y/Y
Net Sales
552.4
614.3
+11.2%
Gross Profit
213.8
243.9
+14.1%
(38.7%)
(39.7%)
(+1.0%pt)
48.3
63.0
+30.3%
(8.8%)
(10.3%)
(+1.5%pt)
46.4
65.5
+41.2%
33.9
49.3
+45.2%
1USD(JPY)
99.3
107.2
+7.9
1EUR(JPY)
132.1
140.5
+8.4
(%)
Operating Income
(%)
NIBT
Net Income
attributable to shareholders
5
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Q1-Q3 9-Month Operating Income Analysis, Y/Y
Sales up, added value (%) up, to boost operating income.
Sales up 
Added value
(%) up
SG&A up
-4.5
+24.3
Fixed
manufacturing
costs up
-9.3
(Billions of yen)
R&D up
-1.5
63.0
Forex,
Raw material costs
48.3
+5.7
Gross profit up 19.8
(excl. forex & raw material impacts)
Operating income up 14.7
FY2013
Q1-Q3 Actual
FY2014
Q1-Q3 Actual
6
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Q1-Q3 9-Month Sales by Segment
IAB and "Other" were major drivers.
(Billions of yen)
FY2013
Q1-Q3
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2014
Q1-Q3
Y/Y
212.2
244.6
+15.3%
72.9
75.6
+3.7%
92.3
100.9
+9.3%
45.7
48.0
+5.1%
66.6
73.5
+10.3%
58.1
67.8
+16.8%
4.6
3.9
-16.2%
552.4
614.3
+11.2%
7
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Ref. Q3 3-Month Sales by Segment
(Billions of yen)
FY2013
Q3
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2014
Q3
Y/Y
74.2
83.4
+12.5%
24.1
25.5
+5.7%
32.9
35.3
+7.5%
16.5
17.1
+3.4%
23.8
28.0
+17.8%
19.6
19.2
-2.1%
1.6
1.2
-24.4%
192.7
209.8
+8.9%
8
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Ref. Q1-Q3 9-Month Operating Income by Segment
IAB contributed to the large OP growth.
(Billions of yen)
FY2013
Q1-Q3
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2014
Q1-Q3
Y/Y
28.3
40.3
+12.0
(13.3%)
(16.5%)
(+3.1%pt)
6.8
7.0
+0.2
(9.3%)
(9.3%)
(±0.0%pt)
7.0
7.1
+0.1
(7.6%)
(7.0%)
(-0.6%pt)
-1.9
-1.0
+0.9
(-)
(-)
(-)
6.4
5.8
-0.6
(9.7%)
(8.0%)
(-1.7%pt)
7.1
8.4
+1.3
(12.2%)
(12.3%)
(+0.1%pt)
-5.4
-4.6
+0.8
48.3
63.0
+14.7
(8.8%)
(10.3%)
(+1.5%pt)
9
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Ref. Q3 3-Month Operating Income by Segment
(Billions of yen)
FY2013
Q3
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2014
Q3
Y/Y
10.4
13.6
+3.1
(14.1%)
(16.3%)
(+2.2%pt)
2.9
3.0
+0.2
(11.8%)
(11.9%)
(+0.1%pt)
2.7
2.9
+0.3
(8.1%)
(8.3%)
(+0.2%pt)
-0.1
0.0
+0.2
(-)
(-)
(-)
2.1
1.9
-0.2
(8.6%)
(6.8%)
(-1.9%pt)
1.3
0.5
-0.8
(6.7%)
(2.5%)
(-4.2%pt)
-1.7
-2.0
-0.3
17.6
20.0
+2.4
(9.1%)
(9.5%)
(+0.4%pt)
10
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Consolidated B/S
(Billions of yen)
(1) Mar. 31, 2014
(2) Dec. 31, 2014
(2) - (1)
Current assets
396.5
428.1
+31.6
Property, plant & equipment
135.6
149.8
+14.3
Investments and other assets
122.6
125.9
+3.3
Total Assets
654.7
703.8
+49.1
Current liabilities
162.7
165.8
+3.1
59.2
46.3
-13.0
Total Liabilities
221.9
212.1
-9.8
Shareholders' equity
430.5
489.2
+58.7
2.3
2.5
+0.2
Total Net Assets
432.8
491.7
+58.9
Total Liabilities and Shareholders' Equity
654.7
703.8
+49.1
65.8%
69.5%
+3.8%pt
Long-term liabilities
Noncontrolling interests
Shareholders' equity to total assets
11
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Consolidated Cash Flows
FCF down due to (1) pension fund contribution and (2) NS
acquisition. Financing activities include share buyback.
(Billions of yen)
FY2013
Q1-Q3
FY2014
Q1-Q3
Y/Y
Operating activities
48.6
42.6
-5.9
Investing activities
-21.4
-27.9
-6.5
Free cash flow (FCF)
27.2
14.8
-12.5
Financing activities
-7.4
-28.9
-21.5
80.0
83.1
+3.2
Capital expenditures
22.6
25.6
+3.0
Depreciation and amortization
18.3
20.5
+2.2
Cash and cash equivalents
at end of the period
12
Full-Year Forecast
13
Summary
Q1-Q3 Results
Q4 Business Environment by Area
Full-Year Forecast
Corp. Value Award
(vs. Oct. 28 Forecast)
Unchanged overall, with some industries and areas slowing
down.
Japan
Capital investment solid especially among large
businesses.
PV will temporarily go stagnant due to market changes.
Overseas
• Americas: US solid overall thanks to increasing consumer
spending and capital investment. Brazil slow amid the
looming economy.
• Europe: Flat overall. Russia weak due to the economy.
• China: Slowdown signs in some industries/areas with
property-related investment cooling down.
• Asia: Thailand and Indonesia unchanged. Business sentiment
better in India. Slowdown in South Korea.
14
Summary
Q1-Q3 Results
Full-Year Forecast
Q4 Business Environment by Segment
Corp. Value Award
(vs. Oct. 28 Forecast)
Japan: Modest upturn overall, with automotive remaining solid and semiconductors
IAB
Industrial Automation
back on a recovery track.
Overseas: Slowdown signs in China. Americas favorable especially N. America.
Europe flat. In Asia, S. Korea will trend down with the other areas flat.
EMC
Electronic & Mechanical
Components
AEC
Automotive Electronic
Components
SSB
Social Systems,
Solutions & Service
Home electronics: In Japan, consumer spending will remain low after the consumption
tax hike. Europe and China will remain solid.
Automotive components: No major changes overall.
Japan: Mini-vehicles will remain healthy. 'Ordinary' cars will keep going down Y/Y.
Overseas: N. America will be solid. Asia and China will trend down. No major changes
in the other areas.
Demand for train system will go solid overall.
Environmental Solutions will temporarily go sluggish due to changes in the PV market.
Japan: Home-use solid. Professional-use will go stagnant due to medical institutions'
HCB
Healthcare
revenue drop and cost reduction efforts.
Overseas: Russia will be weak hit by the ruble crash. The other areas will remain the
same.
Other
Environmental Solutions will temporarily go sluggish due to changes in the PV market.
Backlight will see one-time demand drop due to some customers' model changes.
15
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Full-Year Forecast
No changes to FY14 full-year forecast.
(Billions of yen)
FY2013
Actual
FY2014
Forecast
Y/Y
Net Sales
773.0
835.0
+8.0%
Gross Profit
297.2
331.0
+11.4%
(38.5%)
(39.6%)
(+1.2%pt)
68.1
84.0
+23.4%
(8.8%)
(10.1%)
(+1.3%pt)
62.0
84.5
+36.3%
46.2
62.5
+35.3%
1USD(JPY)
100.1
105.5
+5.4
1EUR(JPY)
134.0
139.2
+5.2
(%)
Operating Income
(%)
NIBT
Net Income
attributable to shareholders
16
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Ref. Full-Year Sales Forecast by Segment
(Billions of yen)
FY2013
Actual
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2014
Forecast
Y/Y
291.7
321.0
+10.0%
97.7
101.5
+3.9%
126.6
131.5
+3.9%
82.7
84.5
+2.2%
89.3
100.0
+12.0%
78.9
91.5
+15.9%
6.1
5.0
-16.5%
773.0
835.0
+8.0%
17
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Ref. Full-Year Operating Income Forecast by Segment
(Billions of yen)
FY2013
Actual
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2014
Forecast
Y/Y
38.8
50.0
+11.2
(13.3%)
(15.6%)
(+2.3%pt)
8.7
9.2
+0.5
(8.9%)
(9.1%)
(+0.2%pt)
9.1
8.9
-0.2
(7.2%)
(6.8%)
(-0.4%pt)
5.6
6.2
+0.6
(6.7%)
(7.3%)
(+0.6%pt)
7.5
7.2
-0.3
(8.5%)
(7.2%)
(-1.3%pt)
8.7
10.5
+1.8
(11.0%)
(11.5%)
(+0.5%pt)
-10.3
-8.0
+2.3
68.1
84.0
+15.9
(8.8%)
(10.1%)
(+1.3%pt)
18
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Ref. Management Targets
FY2013
Actual
FY2014
Forecast
Y/Y
GP Margin
38.5%
39.6%
+1.2%pt
OP Margin
8.8%
10.1%
+1.3%pt
ROIC
11.3%
>13%
-
ROE
11.6%
>13%
-
EPS
\209.8
\285.4
up \75.6
19
Corporate Value Improvement Award
20
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Corporate Value Improvement Award
Omron won the "TSE 2014 Corporate Value Improvement
Award" Grand Prix.
21
Summary
Q1-Q3 Results
Full-Year Forecast
Corp. Value Award
Grand Prix - Why Omron?
TSE highly evaluated Omron’s ROIC management.
<Reason for Selection*>
TSE recognized the outstanding level of management initiatives
implemented to improve corporate value at Omron in its efforts to position
ROIC as an important management benchmark for capital efficiency
and other initiatives to enhance ROIC throughout the organization.
<Outstanding Points**>
1. Investor-oriented management goals for better engagement with investors
2. In-depth management of business portfolio of 100+ business units to
achieve management goals
3. Management system for corporate value improvement (down-top ROIC
tree) shared all through the organization
4. ROIC management efforts practically showing numerical results
Reference
*TSE press release: http://www.tse.or.jp/english/news/07/b7gje60000029vv5-att/b7gje60000029w4m.pdf
**Translation of TSE press release: http://www.tse.or.jp/rules/award/b7gje6000002dpto-att/b7gje6000004x6xu.pdf
22
23
References
24
Conditions: Exchange Rates & Raw Material Costs
No changes to the initially set conditions.
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
25
ROIC Definition
<Consol. B/S>
Net income
ROIC = attributable to shareholders
Invested capital
Invested capital*
= Net assets + Interest-bearing debt
*FY13 year-end & FY14 Q1-Q4 (quarterly results &
forecast) average.
Capital cost forecast at 6%
for EARTH-1 STAGE (FY14-16)
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
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 Third 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
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".
28
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