Consol. PDF 1,190kb

FY14 Earnings
2014 Full-Year Results
Ended March 31, 2015
April 27, 2015
OMRON Corporation
Summary
 FY2014
• Sales & profits up 3 years in a row, breaking last year’s best
performance ever.
• Main IAB posted big sales & OP growth to boost total Omron.
 FY2015
• Achieve FY16 targets (EARTH-1 STAGE final year) one year earlier.
• Make additional growth investments. R&D and Capex.
• Raise payout ratio up to 30%, drastically increasing per-share
dividend forecast.
 ROIC Management Upgrading
• Omron will keep upgrading ROIC management to realize
sustainable corporate value improvement.
1
Contents
1. FY2014 Results
P. 3
2. FY2015 Plans
P. 13
3. Upgraded ROIC Management, Ver. 2.0 P. 26
4. Stronger Management Team
P. 31
2
FY2014 Results
3
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
FY2014 Results
Sales & profits up 3 yrs in a row, breaking FY13’s recordhigh performance with >10% OP.
FY2014
Forecast*
FY2014
Actual
vs. Fcst
FY2013
Actual
(¥bn)
Y/Y
Net Sales
835.0
847.3
+1.5%
773.0
+9.6%
Gross Profit
331.0
332.6
+0.5%
297.2
+11.9%
(39.6%)
(39.3%)
(-0.3%pt)
(38.5%)
(+0.8%pt)
84.0
86.6
+3.1%
68.1
+27.2%
(10.1%)
(10.2%)
(+0.2%pt)
(8.8%)
(+1.4%pt)
84.5
87.4
+3.4%
62.0
+40.9%
62.5
62.2
-0.5%
46.2
+34.6%
62.5
64.2
+2.8%
47.0
+36.9%
1USD(JPY)
101.9
110.0
+8.1
100.1
+9.9
1EUR(JPY)
137.1
138.7
+1.6
134.0
+4.7
(%)
Operating Income
(%)
NIBT
Net Income
attributable to shareholders
(Ref: w/o deferred tax asset reversal.
FY14: \2.1bn, FY13: \0.8bn )
*Announced October 28, 2014
4
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Operating Income Analysis, Y/Y
Added value up due to sales & added value % increase
to boost operating income.
Sales & added value % up
 Added value up
+26.4
-4.1
SG&A up
Fixed
manufacturing
costs up
-10.7
Forex,
Raw material
impacts
68.1
(¥bn)
R&D down
+0.6
86.6
+6.3
Gross profit up 22.3
(excl. forex & raw material impacts)
Operating income up 18.5
FY2013
Actual
FY2014
Actual
5
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Operating Income Analysis, vs. Forecast
Better than forecast in spite of business environment changes.
Forex,
Raw material
impacts
84.0
+3.7
Sales down 
Added value
down
-9.0
(¥bn)
Fixed
manufacturing
costs down
+1.6
SG&A
down
+4.2
R&D down
+2.1
86.6
Gross profit down 7.4
(excl. forex & raw material impacts)
Operating income up 2.6
FY2014
Forecast
Announced Oct. 28, 2014
FY2014
Actual
6
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Sales by Segment
• IAB: Large growth.
• HCB: Up mainly in EM. Wins #1 BPM sales in Brazil.
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
(¥bn)
FY2014
Forecast*
FY2014
Actual
vs. Fcst
FY2013
Actual
Y/Y
321.0
331.8
+3.4%
291.7
+13.7%
101.5
103.9
+2.4%
97.7
+6.4%
131.5
137.9
+4.9%
126.6
+8.9%
84.5
80.4
-4.8%
82.7
-2.8%
100.0
100.6
+0.6%
89.3
+12.7%
91.5
87.4
-4.5%
78.9
+10.7%
5.0
5.3
+6.0%
835.0
847.3
+1.5%
*Announced October 28, 2014
6.1
773.0
-13.1%
+9.6%
7
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Operating Income by Segment
IAB posted large OP growth to contribute to increase in total.
(¥bn)
FY2014
Forecast*
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2014
Actual
vs. Fcst
FY2013
Actual
Y/Y
50.0
54.6
+4.6
38.8
+15.9
(15.6%)
(16.5%)
(+0.9%pt)
(13.3%)
(+3.2%pt)
9.2
10.2
+1.0
8.7
+1.5
(9.1%)
(9.8%)
(+0.7%pt)
(8.9%)
(+0.9%pt)
8.9
9.2
+0.3
9.1
+0.1
(6.8%)
(6.7%)
(-0.1%pt)
(7.2%)
(-0.5%pt)
6.2
5.0
-1.2
5.6
-0.6
(7.3%)
(6.2%)
(-1.1%pt)
(6.7%)
(-0.5%pt)
7.2
6.5
-0.7
7.5
-1.0
(7.2%)
(6.5%)
(-0.7%pt)
(8.5%)
(-2.0%pt)
10.5
8.4
-2.1
8.7
-0.3
(11.5%)
(9.6%)
(-1.9%pt)
(11.0%)
(-1.4%pt)
-8.0
-7.3
+0.7
-10.3
+2.9
84.0
86.6
+2.6
68.1
+18.5
(10.1%)
(10.2%)
(+0.2%pt)
(8.8%)
(+1.4%pt)
*Announced October 28, 2014
8
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Consolidated B/S
No major changes in B/S structure.
(¥bn)
(1) Mar. 31, 2014 (2) Mar. 31, 2015
(2) - (1)
Current assets
396.5
434.1
+37.6
Property, plant & equipment
135.6
151.5
+15.9
Investments and other assets
122.6
125.5
+2.8
Total Assets
654.7
711.0
+56.3
Current liabilities
162.7
176.8
+14.1
59.2
42.2
-17.1
Total Liabilities
221.9
218.9
-3.0
Shareholders' equity
430.5
489.8
+59.3
2.3
2.3
+0.1
Total Net Assets
432.8
492.1
+59.3
Total Liabilities and Shareholders' Equity
654.7
711.0
+56.3
Shareholders' equity to total assets
65.8%
68.9%
Long-term liabilities
Noncontrolling interests
+3.1%pt
9
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Consolidated Cash Flows
FCF down due to NS acquisition and ¥13.2bn pension fund
contribution. Financing activities include ¥15bn share buyback.
(¥bn)
FY2013
Actual
FY2014
Actual
Y/Y
Operating activities
79.0
77.1
-2.0
Investing activities
-31.1
-39.5
-8.4
47.9
37.5
-10.4
-16.3
-29.3
-13.0
90.3
102.6
+12.4
Capital expenditures
33.7
38.1
+4.4
Depreciation and amortization
25.1
28.3
+3.3
Free cash flow (FCF)
Financing activities
Cash and cash equivalents
at end of the period
10
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Three Key Targets
Steady progress in 3 strategic measures. Brisk Y/Y growth.
(¥bn)
FY2014
Forecast*
FY2014
Actual
vs. Fcst
FY2013
Actual
422.5
435.8
+3.1%
389.4
+11.9%
292.5
300.4
+2.7%
247.6
+21.3%
60.0
64.3
+7.2%
52.2
+23.2%
1USD(JPY)
101.9
110.0
+8.1
100.1
+9.9
1EUR(JPY)
137.1
138.7
+1.6
134.0
+4.7
Y/Y
IA Business
Reinforcement
IA Business Sales
Super-Global
Emerging Market
Sales
New Businesses for
Optimization Society
NB Sales
*Announced October 28, 2014
11
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Management Targets
Improvement in 6 management targets, especially ROIC.
FY2013
Actual
Net Sales (\bn)
FY2014
Actual
Y/Y
773.0
847.3
+9.6%
GP Margin
38.5%
39.3%
+0.8%pt
OP Margin
8.8%
10.2%
+1.4%pt
ROIC
11.3%
13.4%
+2.1%pt
ROE
11.6%
13.5%
+1.9%pt
EPS (\)
209.8
283.9
+74.1
1USD(JPY)
100.1
110.0
+9.9
1EUR(JPY)
134.0
138.7
+4.7
12
FY2015 Plans
13
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
FY15 Business Environment by Area
Expects gradual recovery overall, with some emerging
markets uncertain.
Japan
Electronic components & semiconductors solid, especially large
businesses. Automotive soft due to mini-car tax hike.
Overseas
• Americas: US solid overall with consumer spending and capital
investment going up. 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. Smartphones brisk.
• Asia: Thailand and Indonesia on recovery thanks to higher
consumer spending.
14
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
FY15 Policy
Accelerate EARTH-1
Work even harder on
self-driven growth engine
and numerical targets
Omron will
1. Achieve EARTH-1 STAGE goals one year earlier
2. Sustain efforts toward higher profitability (GP%)
3. Increase sales and profits in all business segments
15
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
FY15 Plans
Aiming for sales & profits growth 4 yrs in a row, despite
changes in business environment.
(¥bn)
FY2014
Actual
FY2015
Forecast
Y/Y
Net Sales
847.3
900.0
+6.2%
Gross Profit
332.6
356.0
+7.0%
(39.3%)
(39.6%)
(+0.3%pt)
86.6
90.0
+3.9%
(10.2%)
(10.0%)
(-0.2%pt)
87.4
89.0
+1.8%
62.2
66.5
+7.0%
1USD(JPY)
110.0
115.0
+5.0
1EUR(JPY)
138.7
130.0
-8.7
(%)
Operating Income
(%)
NIBT
Net Income
attributable to shareholders
16
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
FY15 Operating Income Analysis, Y/Y
Aiming for higher OP while steadily carrying out growth
investment.
Sales &
added value % up
 Added value up
86.6
Forex,
Raw material
impacts
+30.9
-6.8
SG&A up
Fixed
manufacturing
costs up
-14.4
(¥bn)
R&D up
-4.9
90.0
-1.4
Gross profit up 24.1
(excl. forex & raw material impacts)
Operating income up 3.4
FY2014
Actual
FY2015
Forecast
17
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
R&D, Capex
Higher R&D and Capex to realize sustainable growth.
R&D
Capex
48.0
47.9
47.9
43.5
42.1
(¥bn)
53.0
38.1
33.7
28.3
2011
R&D
Capex
28.3
2012
2013
2014
2015 (fcst)
IAB, HCB, core technology reinforcement
IAB + EMC, Backlights
(e.g. processing/ inspecting equipment)
18
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
FY15 Business Environment by Segment
Global: Automotive & smartphones brisk overall.
IAB
Industrial Automation
Japan: Solid overall as electronic components & semiconductors grow.
Overseas: Slowdown in China. Oil & gas in Americas sluggish due to crude price drop.
Europe flat. Asia will go flat or recover moderately.
EMC
Electronic & Mechanical
Components
AEC
Automotive Electronic
Components
SSB
Social Systems,
Solutions & Service
HCB
Healthcare
Other
Home electronics: Remain solid with white goods sales volume going up.
Automotive components: Rather slower as growth of car sales slows down.
Japan: Soft as mini-vehicles unit sales go down.
Overseas: N. America will be solid. China steady despite slowing growth. Asia flat.
Train system will go solid overall, enjoying increasing number of passengers.
Environmental Solutions: PV-related business will go solid. Monitoring & maintenance
service will see demand increase.
Japan: Home-use solid. Professional-use will go stagnant.
Overseas: Russia weak. N. America, China & Asia healthy overall.
Environmental Solutions: Residential flat. New demand (e.g. power storage) will go up.
Backlight will remain bright.
19
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
FY15 Sales Forecast by Segment
Aiming for higher sales in all segments.
(¥bn)
FY2014
Actual
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2015
Forecast
Y/Y
331.8
345.0
+4.0%
103.9
109.0
+4.9%
137.9
140.0
+1.5%
80.4
85.0
+5.7%
100.6
111.0
+10.3%
87.4
105.0
+20.2%
5.3
5.0
-5.7%
847.3
900.0
+6.2%
20
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
FY15 Operating Income Forecast by Segment
Aiming for higher OP in all segments while working harder on
growth investment.
(¥bn)
FY2014
Actual
IAB
Industrial Automation
EMC
Electronic & Mechanical Components
AEC
Automotive Electronic Components
SSB
Social Systems, Solutions & Service
HCB
Healthcare
Other
Eliminations & Corporate
Total
FY2015
Forecast
Y/Y
54.6
57.0
+2.4
(16.5%)
(16.5%)
(+0.1%pt)
10.2
11.2
+1.0
(9.8%)
(10.3%)
(+0.5%pt)
9.2
9.3
+0.1
(6.7%)
(6.6%)
(-0.1%pt)
5.0
5.5
+0.5
(6.2%)
(6.5%)
(+0.3%pt)
6.5
7.8
+1.3
(6.5%)
(7.0%)
(+0.6%pt)
8.4
10.0
+1.6
(9.6%)
(9.5%)
(-0.1%pt)
-7.3
-10.8
-3.5
86.6
90.0
+3.4
(10.2%)
(10.0%)
(-0.2%pt)
21
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Three Key Targets
• Fuel IA Business reinforcement.
• Record-high sales both IAB and EMC.
FY2014
Actual
(¥bn)
FY2015
Forecast
Y/Y
IA Business
435.8
454.0
+4.2%
300.4
332.0
+10.5%
64.3
71.0
+10.4%
1USD(JPY)
110.0
115.0
+5.0
1EUR(JPY)
138.7
130.0
-8.7
Reinforcement
IA Business Sales
Super-Global
Emerging Market
Sales
New Businesses for
Optimization Society
NB Sales
22
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
VG2020 Long-Term Strategy
EARTH-1 STAGE is important to achieve VG2020 targets.
EARTH-1 STAGE Midterm Targets
Sales:
>¥900bn
OP%:
>10%
(FY2016)
VG2020 Long-Term Targets
Sales: >¥1tn
OP%: 15%
(FY2020)
23
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
FY15 Management Targets
Aiming to achieve EARTH-1 STAGE targets one year earlier.
FY2014
Actual
FY2015
Forecast
EARTH-1 STAGE
Targets, FY2016*
Net Sales (\bn)
847.3
900.0
>900.0
GP Margin
39.3%
39.6%
>40%
OP Margin
10.2%
10.0%
>10%
ROIC
13.4%
>13%
approx. 13%
ROE
13.5%
>13%
approx. 13%
EPS (\)
283.9
306.1
approx. 290
1USD(JPY)
110.0
115.0
100.0
1EUR(JPY)
138.7
130.0
135.0
*Announced April 24, 2014
24
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Dividends
Raise payout ratio up to 30% one year earlier.
30% payout
Full-year per-share
dividend forecast
(payout ratio)
¥92
(30.1%)
¥71
(25.0%)
FY2014
FY2015
25
Upgraded ROIC Management, Ver. 2.0
26
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Corporate Value Improvement Award
Omron won the "TSE 2014 Corporate Value Improvement
Award" Grand Prix.
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
*Translation of TSE press release
http://www.jpx.co.jp/equities/listed-co/award/tvdivq0000005svh-att/tvdivq000000umdo.pdf
27
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
ROIC
ROIC management efforts practically showing steady
improvement in ROIC.
(¥bn)
847.3
773.0
Sales
OP
FY
8.6%
4.8%
ROIC
40.1
2011
11.3%
650.5
619.5
13.4%
86.6
68.1
45.3
2012
2013
2014
28
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
ROIC Management Upgrading
Higher awareness & practice of ROIC management
 Deeper on-site understanding  ROIC definition now evolving
 ROIC in general
ROIC =
Operating Profit × (1 – effective tax rate)
Invested Capital
 OMRON’s ROIC used in Down-Top ROIC Tree (ROIC 1.0)
ROIC =
Net Profit
Net Sales
×
Net Sales
Invested Capital (working capital + fixed assets)
 ROIC evolved through on-site use of the Tree (ROIC 2.0)
ROIC ≒
(V)
(N) + (L)
29
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
ROIC Management Upgrading
ROIC management evolution: Starting up ROIC management 2.0
Omron will keep upgrading ROIC management so everyone at Omron can
better understand ROIC, take it as my own matter, and act autonomously.
<ROIC Formula>
ROIC ≒
Value to customers (stakeholders) (V)
Needed
management (N)
resources
Goods, money, time
Loss-making
+ management (L)
resources
Muri, Muda, Mura
(waste, unevenness, overburden)
(1) Increase investments in Needed management resources for
growth (N) based on growth strategies
(2) Raise (V) more than (N)
(3) Reduce Loss-making management resources (L) to shift
to/invest in (N)
30
Stronger Management Team
31
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
New Position: CTO
Former Healthcare Head Miyata as CTO, new position set this April.
Kiichiro MIYATA
Bio
CTO
Mission
Apr. 2015
CTO and Senior General Manager, Technology &
Intellectual Property HQ, OMRON Corp.
Mar. 2010
President and CEO, OMRON HEALTHCARE Co., Ltd.
Apr. 2006
Executive Officer and Senior General Manager of Product
Strategy HQ, OMRON HEALTHCARE Co., Ltd.
Sept. 1998
R&D group leader, Omron Institute of Life Science, Co., Ltd.
Apr. 1985
Joined Tateisi Institute of Life Science, Inc.
(1) Reinforce core technologies of Omron Group as a whole
(2) Promote open innovation through collaboration with
external partners
(3) Develop new technologies targeting 2020 and beyond
32
FY14 Results
FY15 Plans
ROIC Mgmt 2.0
Management Team
Three-as-One Management Team
• CEO, CFO, and CTO will work together to further improve
Omron’s corporate value.
• CFO and CTO experienced Business Segment leaders.
Yoshihito YAMADA
CEO
CFO
CTO
Yoshinori SUZUKI
Kiichiro MIYATA
Former Automotive Electronics
Components Head
Former Healthcare Head
33
34
References
35
Conditions: Exchange Rates & Raw Material Costs
FY15 conditions based on FY14 results.
Exchange rates
Raw material costs
• 1 USD = ¥115
• Silver = ¥67,000/kg
• 1 EUR = ¥130
• Copper = ¥840/kg
¥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
36
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
37
ROIC Definition
<Consol. B/S>
Net income
ROIC = attributable to shareholders
Invested capital
Invested capital*
= Net assets + Interest-bearing debt
*FY14 year-end result & FY15 quarterly forecasts
average.
Capital cost forecast at 6%
for EARTH-1 STAGE (FY14-16)
38
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 Year Ended March 31,
2015 (U.S. GAAP)”. Figures rounded to the nearest JPY million and percentage to one decimal place.
Contact:
IR Group, Investor Relations Department
Global IR & Corp. Communications HQ
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".
39
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