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Financial Results for the Fiscal Year
Ended March 31, 2008
and
Business Plans for the Fiscal Year
Ending March 31, 2009
April 28, 2008
OMRON Corporation
OMRON Corporation Investor Relations
Contents
1. Executive Summary
P. 4
2. Results for the Fiscal Year
Ended March 31, 2008
P. 7
3. Business Plans for the Fiscal Year
Ending March 31, 2009
P. 25
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 Omron Group to develop new
technologies and new products, (iv) major changes in the fund-raising environment, (v) tie-ups or cooperative
relationships with other companies, and (vi) movements in currency exchange rates and stock markets.
OMRON Corporation Investor Relations
2
Businesses & Major Products
Industrial Automation Business
IAB
Sensing devices, control devices, safety devices, inspection systems
Electronic Components Business
Relays, switches, connectors, LCD backlights, amusement equipment parts,
ECB
mobile equipment parts, optical communication devices
Automotive Electronic Components Business
Keyless entry systems, power window switches, automotive relays
AEC
components, laser radars, TPMS, EPS (electronic power steering devices)
Social Systems, Solutions and Service Business
Automated ticket gates and ticket vending machines, road management
SSB
systems, security management systems, face recognition systems
Healthcare Business
Professional & home-use digital blood pressure monitors, body composition
HCB
analyzers, thermometers, pedometers, nebulizers, healthcare services
Others
PC peripherals, RFID systems, energy management systems
SSB
11%
HCB
9%
Others
3%
FY07 Net Sales
¥763.0bn
AEC
14%
ECB
20%
OMRON Corporation Investor Relations
IAB
43%
Consolidated
subsidiaries
162
Affiliated companies
accounted for by the
equity method
22
(as of March 31, 2008)
3
1. Executive Summary
OMRON Corporation Investor Relations
4
Executive Summary
FY07 Results
* Pursuant to Statement of Financial Accounting Standards (SFAS). Figures for the previous period/
fiscal year have been reclassified in relation to operations discontinued during FY2007.
Sales & OP: Both up 6 years in a row; hit record high but fall short of initial targets*
Consolidated
Net sales
Operating income
NIBT
Net income
Actual
¥763.0bn
¥65.3bn
¥64.2bn
¥42.4bn
YoY
105.4%
105.2%
99.8%
110.7%
vs. Target
95.4%
87.1%
89.2%
92.2%
Margin (%)
-8.6%
8.4%
5.6%
*announced Apr. 26, 2007
Consolidated net sales: Up nearly 5% year on year due primarily to overseas sales growth and M&A.
5% below target due primarily to drop in domestic IAB sales and weak ECB sales.
Operating income: Up 5% YoY due primarily to sales growth and improved manufacturing structure (see
p. 11). 13% below target due primarily to weak sales (see p.12).
NIBT: 8% off target due primarily to not reaching operating income goal.
FY08 Looking Forward
Sales up for 7th consecutive year
Income down due to investment for growth and severe external environment
Consolidated
Net Sales
Operating Income
NIBT
Net Income
OMRON Corporation Investor Relations
Full Year
¥780.0bn
¥60.0bn
¥59.0bn
¥36.5bn
YoY
102.2%
91.9%
91.9%
86.1%
Margin (%)
-7.7%
7.6%
4.7%
5
Consolidated P/L at a Glance
Profit decrease forecasted for FY08
FY02
522.5
201.8
28.2
5.4%
0.5
2.07
Net sales
Gross profit
Operating income
OP margin
NIAT
EPS (JPY)
<Exchange Rates>
USD
EUR
FY03
575.2
235.5
49.4
8.6%
26.8
110.66
122.1
121.1
113.4
132.4
FY04
598.7
245.3
54.7
9.1%
30.2
126.52
FY05
616.0
232.7
60.8
9.9%
35.8
151.14
107.3
135.0
FY06
723.9
278.2
62.0
8.6%
38.3
164.96
113.4
138.2
117.0
150.3
FY07
763.0
293.3
65.3
8.6%
42.4
185.89
(Units: JPY billions)
FY08 Projection
780.0
300.5
60.0
7.7%
36.5
164.65
114.1
161.9
(JPY 1)
100.0
155.0
*FY02-06 figures reclassified in relation to discontinued operations
Net Sales
Units: USD billions
800
Units: USD billions
80
OP (value, %)
%
12.0
10.0
600
60
8.0
400
40
200
20
6.0
4.0
2.0
0
FY02
FY03
FY04
FY05
FY06
OMRON Corporation Investor Relations
FY07
FY08
(proj.)
0
0.0
FY02
FY03
FY04
FY05
FY06
FY07
FY08
(proj.)
6
2. Results for the Fiscal Year
Ended March 31, 2008 (FY07)
OMRON Corporation Investor Relations
7
Consolidated P/L
FY07
Sales: ¥763.0bn; OP margin: 8.6%
Both up year on year, but fell short of initial targets
(Units: JPY billions)
FY06
FY07
FY07/FY06
FY07
Initial target
Actual vs.
Target
Actual (1)
Actual (2)
(2)/(1)
(3)
(2)/(3)
Net sales
723.9
763.0
105.4%
800.0
95.4%
Gross profit
278.2
293.3
105.4%
309.5
94.8%
SG&A
164.2
176.6
107.6%
178.0
99.2%
R&D
52.0
51.5
99.0%
56.5
91.2%
Operating income
62.0
65.3
105.2%
75.0
87.1%
NIBT
64.3
64.2
99.8%
72.0
89.2%
NI from continuing ops
37.1
39.3
106.0%
43.0
91.4%
1.2
3.1
257.5%
3.0
103.3%
38.3
42.4
110.7%
46.0
92.2%
P/L
NI from discontinued ops
NIAT
<Exchange Rates>
(1JPY)
USD
117.0
114.1
-2.9
115.0
-0.9
EUR
150.3
161.9
11.6
150.0
11.9
* FY06 figures reclassified in relation to discontinued operations
OMRON Corporation Investor Relations
8
Consolidated Sales by Area/Segment
FY07
• Overseas sales up nearly 14% year on year
• Initial targets unmet both at home and abroad
• IAB, ECB, AEC and HCB up year on year, but only AEC met target
(Units: JPY billions)
FY06
FY07
FY07/FY06
FY07
Initial target
Actual vs.
Target
Actual (1)
Actual (2)
(2)/(1)
(3)
(2)/(3)
Japan
375.2
365.9
97.5%
396.5
92.3%
Overseas*
348.7
397.1
113.9%
403.5
98.4%
Total
723.9
763.0
105.4%
800.0
95.4%
Japan & Overseas
*Includes direct exports
Business
Actual
Actual
%
Initial Target
%
IAB
305.6
328.8
107.6%
339.5
96.8%
ECB
138.4
154.2
111.5%
180.5
85.4%
AEC
93.3
107.5
115.2%
100.0
107.5%
SSB
105.9
85.2
80.4%
90.0
94.7%
HCB
65.7
71.6
108.9%
73.5
97.4%
Others
15.0
15.7
104.5%
16.5
95.2%
Total
723.9
763.0
105.4%
800.0
95.4%
OMRON Corporation Investor Relations
9
Consolidated Operating Income by Segment
FY07
• IAB, HCB delivered year-on-year increases but did not meet initial targets
• AEC as originally planned
(Units: JPY billions)
FY06
FY07
FY07/FY06
FY07
Initial target
Actual vs.
Target
Actual (1)
Actual (2)
(2)/(1)
(3)
(2)/(3)
Business
IAB
48.5
51.9
107.1%
64.6
80.3%
ECB
13.1
12.6
96.6%
15.3
82.4%
AEC
-1.2
1.4
-
1.4
100.0%
SSB
8.1
7.0
87.3%
7.3
95.9%
HCB
8.7
9.4
108.2%
9.5
98.9%
Others
0.4
0.1
20.2%
-0.6
-
HQ Cost/ Elimination
-15.6
-17.1
-
-22.4
-
Total
62.0
65.3
105.2%
75.0
87.1%
OMRON Corporation Investor Relations
10
Consolidated Operating Income Analysis
FY07
(FY06 to FY07)
Positive impact of sales growth and manufacturing structure reforms were offset by
increase in SG&A expenses, but up year on year due to exchange gains
M&A
gain
-0.3
Exchange
gain
Sales
increase,
product mix
+4.5
+5.1
62.0
(Units: JPY billions)
Material
costs up
+12.1
SG&A, R&D:
Exchange loss
-6.3
-2.4
Manufacturing
fixed costs up
(Exchange loss: -0.4)
(Manuf. FC down: +2.6)
(M&A: -8.5)
Gross Profit
Up ¥15.1bn
SG&A, R&D:
M&A
SG&A
-4.9
up
-5.4
R&D
down
+0.9
65.3
Operating Income
Up ¥3.3bn
(Exchange gain +1.7bn)
FY06
Actual
OMRON Corporation Investor Relations
FY07
Actual
11
Consolidated Operating Income Analysis
FY07
(FY07 Target vs. Result)
Operating income below target; efforts to cut fixed costs not enough
to offset decline in gross profit due to weak sales
(Units: JPY billions)
Manufacturing
fixed costs up
(Exchange loss: -0.9)
(Manuf. FC down: +1.9)
(M&A: -2.4)
Sales down,
product mix
M&A gain
-23.7
+4.0
75.0
-0.9
Material
costs up
+5.9
Exchange gain
-1.4
R&D down
SG&A, R&D:
Exchange loss
-3.1
-1.9
SG&A, R&D:
M&A
+5.3
+6.1
SG&A down
65.3
Gross Profit
Down ¥16.1bn
FY07
Target
OMRON Corporation Investor Relations
Operating Income
Down ¥9.7bn
(Exchange gain +1.9bn)
FY07
Actual
12
IAB
FY07
(Industrial Automation Business)
Sales up nearly 8% year on year to ¥328.8bn with 15.8% OP margin
Domestic sales 7% below target, though applications business
showing signs of improvement. Overseas saw steady growth.
IAB
Japan
Overseas
North America
Europe
Asia
Greater China
Exports
Total
Operating income
OP margin
FY06
FY07
Actual (1)
140.8
164.8
34.8
81.3
14.0
28.8
5.8
305.6
Actual (2)
144.1
184.7
35.6
92.3
16.2
34.6
6.0
328.8
(2)/(1)
102.3%
112.1%
102.0%
113.5%
116.2%
120.1%
103.6%
107.6%
FY07
Initial target
(3)
154.5
185.0
38.3
85.8
16.2
38.0
6.6
339.5
48.5
15.9%
51.9
15.8%
107.1%
-0.1pt
64.6
19.0%
FY07/FY06
Sales by Area
G. China
11%
Asia
5%
Europe
28%
OMRON Corporation Investor Relations
(Units: JPY billions)
Actual vs.
Target
(2)/(3)
93.3%
99.8%
93.0%
107.6%
100.0%
91.1%
90.9%
96.8%
80.3%
-3.2pt
Exports
2%
Japan
44%
N. America
11%
13
ECB
FY07
(Electronic Components Business)
Sales up over 11% year on year to ¥154.2bn, with 8.2% OP margin,
but 15% below initial target due to weak sales of
small-size backlight business and amusement business
ECB
Japan
Overseas
North America
Europe
Asia
Greater China
Exports
Total
Operating income
OP margin
FY06
FY07
Actual (1)
58.8
79.6
11.0
12.0
8.6
35.7
12.4
138.4
Actual (2)
62.4
91.8
10.4
12.4
10.3
48.3
10.4
154.2
(2)/(1)
106.2%
115.4%
95.0%
102.7%
120.4%
135.4%
84.3%
111.5%
FY07
Initial target
(3)
75.5
105.0
12.2
12.6
9.3
61.2
9.7
180.5
13.1
9.5%
12.6
8.2%
96.6%
-1.3pt
15.3
8.5%
FY07/FY06
(Units: JPY billions)
Actual vs.
Target
(2)/(3)
82.6%
87.4%
85.2%
98.4%
110.8%
78.9%
107.2%
85.4%
82.4%
-0.3pt
Sales by Area
Exports
7%
G. China
31%
As ia 7%
OMRON Corporation Investor Relations
Europe
8%
Japan
40%
N. Am erica
7%
14
AEC
FY07
(Automotive Electronic Components Business)
Sales up over 15% year on year to ¥107.5bn, with 1.3% OP margin
Securing positive operating income thanks to solid domestic sales,
overseas sales growth and manufacturing structure improvement
AEC
Japan
Overseas
North America
Europe
Asia
Greater China
Exports
Total
Operating income
OP margin
FY06
FY07
Actual (1)
26.1
67.2
37.9
9.8
16.2
1.4
2.0
93.3
Actual (2)
28.0
79.5
42.4
13.9
18.3
3.1
1.9
107.5
(2)/(1)
107.4%
118.3%
112.0%
141.2%
113.0%
226.8%
93.2%
115.2%
FY07
Initial target
(3)
25.5
74.5
41.9
12.8
17.3
2.4
0.0
100.0
-1.2
-
1.4
1.3%
-
1.4
1.4%
FY07/FY06
Sales by Area
Asia
17%
Europe
13%
OMRON Corporation Investor Relations
G. China
3%
(Units: JPY billions)
Actual vs.
Target
(2)/(3)
109.8%
106.7%
101.2%
108.6%
105.8%
129.2%
107.5%
100.0%
-0.1pt
Exports
2%
Japan
26%
N. America
39%
15
SSB
FY07
(Social Systems Business)
Sales below target at ¥85.2bn, with 8.3% OP margin
Operating income slightly below target as well but improvement in ratio
SSB
Japan
Overseas
North America
Europe
Asia
Greater China
Exports
Total
Operating income
OP margin
FY06
FY07
Actual (1)
101.8
4.1
0.5
0.0
0.0
0.0
3.6
105.9
Actual (2)
81.0
4.2
0.6
0.0
0.0
0.0
3.6
85.2
(2)/(1)
79.6%
101.7%
120.0%
99.1%
80.4%
FY07
Initial target
(3)
87.5
2.5
1.0
0.0
0.0
0.0
1.5
90.0
8.1
7.6%
7.0
8.3%
87.3%
+0.7pt
7.3
8.1%
FY07/FY06
Sales by Area
N.
America
1%
OMRON Corporation Investor Relations
(Units: JPY billions)
Actual vs.
Target
(2)/(3)
92.6%
168.0%
60.0%
240.0%
94.7%
95.9%
+0.2pt
Exports
4%
Japan
95%
16
HCB
FY07
(Healthcare Business)
Sales up nearly 9% year on year to ¥71.6bn with 13.1% OP margin
Growth solid both at home and abroad but not high enough to reach initial targets
HCB
Japan
Overseas
North America
Europe
Asia
Greater China
Exports
Total
Operating income
OP margin
FY06
FY07
Actual (1)
32.8
32.9
13.8
13.1
2.1
3.6
0.3
65.7
Actual (2)
35.0
36.6
12.5
15.9
2.1
5.5
0.7
71.6
(2)/(1)
106.6%
111.2%
90.1%
120.8%
100.5%
152.6%
268.1%
108.9%
FY07
Initial target
(3)
37.5
36.0
14.3
14.4
2.0
4.6
0.7
73.5
8.7
13.2%
9.4
13.1%
108.2%
-0.1pt
9.5
12.9%
FY07/FY06
Sales by Area
Asia
3%
Europe
21%
OMRON Corporation Investor Relations
G. China
8%
(Units: JPY billions)
Actual vs.
Target
(2)/(3)
93.3%
101.7%
87.4%
110.4%
105.0%
119.6%
100.0%
97.4%
98.9%
+0.2pt
Exports
1%
Japan
49%
N.
Am erica
17%
17
Consolidated B/S
FY07
Net worth ratio: 59.7%
Down 1.0pt due primarily to treasury stock acquisition
(Units: JPY billions)
Consolidated B/S
Total Assets
Mar. 2006
Mar. 2007
Mar. 2008
624.1
630.3
617.4
51.0
43.0
40.6
Notes and accounts receivable, trade
147.5
173.4
164.7
Inventories
108.5
94.1
95.1
31.4
31.5
29.7
Property, plant and equipment
157.6
159.3
152.7
Investments and other assets
128.1
129.0
134.6
250.3
247.5
248.9
Short-term debt
46.6
20.1
18.3
Long-term debt
0.5
1.7
1.5
203.2
225.7
229.1
373.8
382.8
368.5
Cash and cash equivalents
Other current assets
Total Liabilities
Other liabilities
Shareholders' Equity
OMRON Corporation Investor Relations
18
Consolidated Cash Flow
FY07
¥34.5 billion cash-out in financial activities
including ¥22.3 billion treasury stock acquisition
(Units: JPY billions)
Consolidated C/F
Mar. 2006
Mar. 2007
Mar. 2008
Operating activities
10.2
40.5
69.0
Investing activities
-34.1
-47.1
-36.7
Free cash flow
-23.9
-6.6
32.3
21.9
-4.7
-34.5
0.7
1.9
-0.2
Net increase/decrease
-1.3
-9.3
-2.4
Cash and cash equivalents at end of the period
51.0
43.0
40.6
Financial activities
Effect of exchange rate changes
OMRON Corporation Investor Relations
19
Reference
Progressing Key Strategies
OMRON Corporation Investor Relations
20
Progressing Key Strategies 1:
Sales Growth in New Businesses
GD 2nd Stage
Strategy
Sales surged year-on-year due primarily to M&A (OPT/OLFT),
achieving initial 2nd-stage mid-term goal of at least ¥68.0 billion
(Actual, JPY billions)
Major Products in New Tech Fields
90.0
80.0
70.0
IAB: Automated optical inspection systems
ECB: LCD backlights
ECB: MEM sensors
AEC: Laser radars
132%
60.0
198%
50.0
¥89.8
40.0
119%
160%
30.0
20.0
10.0
¥18.0
GD2010
2nd stage
(FY04-07)
initial goal: At
least ¥68.0bn
¥67.9
¥28.8
¥34.3
FY04
FY05
0
FY03
OMRON Corporation Investor Relations
FY06
FY07
21
GD 2nd Stage
Strategy
Progressing Key Strategies 2:
Sales Growth in Greater China
Sales jumped year on year by 28%,
but not enough to mark initial 2nd-stage mid-term goal
(Actual, USD millions)
1200
128%
1000
928
726
800
GD2010
2nd stage
(FY04-07)
initial goal:
$1,330 mil
600
400
325
411
412
FY04
FY05
200
0
FY03
OMRON Corporation Investor Relations
FY06
FY07
22
Progressing Key Strategies 3:
Manufacturing Structure Reform
GD 2nd Stage
Strategy
Steady production shift to Greater China
(Actual, JPY billions)
in
g
n
i
ur p 130 %
t
c
a
uf
:U
Man China
13%
er
t
a
G re
400
300
12%
9%
200
100
0
12%
20%
21%
71%
67%
FY03
FY04
Japan
OMRON Corporation Investor Relations
21%
25%
21%
62%
58%
FY06
FY07
23%
65%
FY05
Overseas (ex. G. China)
Greater China
23
Progressing Key Strategies 4:
SG&A Reduction
GD 2nd Stage
Strategy
FY07 SG&A and R&D expenses down to less than 30% of sales
¥736.7
Net sales
(JPY billions)
¥608.6
¥763.0
¥626.8
R&D
6.7%
SG&A (%)
24.1%*
23.8%*
22.8%
23.1%
FY04
FY05
FY06
FY07
29.8%
* FY04 excludes expenses for restricted hazardous chemicals and ATM business.
* FY05 excludes expenses for restricted hazardous chemicals.
* FY02-06 figures include sales of discontinued operation.
OMRON Corporation Investor Relations
24
3. Business Plans for the Fiscal Year
Ending March 31, 2009 (FY08)
OMRON Corporation Investor Relations
25
FY08
Management Policy & Basic Stance
Management Policy
Securing a foothold for sustainable growth
Basic Stance
Make necessary investments to build a mechanism for sustainable
growth – a milestone on our way to achieving the profit and growth
structures we aim to build in the 3rd stage of GD2010* –
and promote management structure reform
* GD (Grand Design) 2010:
Omron's long-term management plan, covering the ten years from April 2001 through March 2011.
OMRON Corporation Investor Relations
26
FY08
Business Environment Forecast
Expected worsening of consumption and capital investment, due to increased
economic uncertainty triggered by oil & raw materials price hike, US economy
slowdown, strong yen and weak US dollar
Business
IAB
Major Sector(s)
Auto, semiconductors,
Elec. components
(Facility investment)
ECB
AEC
Communications,
home electronics,
housing equipment
Automotive
Forecast
Forecast Highlights
• Japan: Increasing uncertainty over semiconductor and IT-related
industries
• Increased anxiety over effects of slowing US economy and
monetary restraint policy in China
• Challenging, due to strong yen and high raw material costs
• Demand for home electronics and housing equipment likely to
drop due to decline in new home construction
• Total car production volume up on a global basis, with
manufacturing sites shifting from leading economies to China,
South America and other Asian nations
• Hit hard by raw material price hike and stronger Canadian dollar
SSB
HCB
Road management,
transportation,
security
Healthcare
OMRON Corporation Investor Relations
• Market stable after peak in demand for IC cards
• Emergence of a new market sector to meet demand for security
• Health consciousness still high in leading economies in spite of
concern over economic downturn and weaker consumption
• Health consciousness on the rise in emerging/developing
countries with stronger buying power
27
GD2010 3rd Stage Milestones
FY08
External environment (market/ business trends) challenging in FY08,
but Omron will continue to make investments to reinforce
its businesses in order to ensure mid-term growth
External Factors
Exchange loss and
raw material price hike
¥8.0bn (exchange loss),
¥1.5bn (price hike)
Active Investment
OP
(JPY
billions)
Increased capital investment
and operating costs
62.0
(See p. 29-30)
65.3
60.8
60.0
54.7
2nd Stage
FY04
FY05
OMRON Corporation Investor Relations
FY06
3rd Stage
FY07
FY08
Plan
FY09
FY10
28
FY08
Proactive Investment: Capital Investment Increase
Plan to invest approx. ¥18bn in new facilities
to reinforce operations and ensure future growth
(Units: JPY billions, approx.)
Increased capital investment
+2.0
EPS facility (AEC)
Yasu reinforcement
(ECB)
+7.0
+2.0
+2.0
+3.5
Other
IT structure reform
(HQ)
OPT reinforcement
(ECB)
56.0
(planned)
+2.0
Actual:
37.8
OMS reinforcement
(IAB)
FY07
OMRON Corporation Investor Relations
¥18.2 billion
FY08
29
Proactive Investment: R&D/ SG&A Increase
FY08
Plan to invest approx. ¥11bn to strengthen existing businesses
and expand new businesses
(Units: JPY billions, approx.)
Higher costs
-8.0
+15.0
65.3
Exchange
loss
Net income up
due mainly to
sales increase
and earnings
recovery
• Global no. 1 strategy (strengthen existing businesses)
• New business expansion
• IT structure reform, etc.
-1.5
Raw material
costs up
-11.0
Proactive investment
Mid-term investment
• R&D, SG&A
(excl. SG&A due to sales increase)
• Depreciation
(with increased capital investment)
(OP
actual)
60.0
(OP
planned)
FY07
OMRON Corporation Investor Relations
Down ¥5.3 billion
FY08
30
Consolidated P/L (Projected)
FY08
Eyeing slight increase in sales in challenging environment
Operating income to drop due to exchange loss, raw material cost hike
and continuing investment aimed at ensuring future growth
(Units: JPY billions)
FY07
FY08
Yr/Yr
Actual
Plan
%
Net sales
763.0
780.0
102.2%
Gross profit
293.3
300.5
102.4%
SG&A
176.6
183.5
103.9%
R&D
51.5
57.0
110.6%
Operating income
65.3
60.0
91.9%
NIBT
64.2
59.0
91.9%
NIAT
42.4
36.5
86.1%
EPS
185.89
164.65
88.6%
<Exchange Rates>
USD
EUR
OMRON Corporation Investor Relations
(1 JPY)
114.1
161.9
100.0
155.0
-14.1
-6.9
31
FY08
Consolidated Sales by Area/Segment
Sales growth expected at 2% (Japan: +5%, overseas: -1%)
Eyeing business growth in IAB, SSB and HCB
(Units: JPY billions)
Japan & Overseas
FY07
FY08
Yr/Yr
Actual
Plan
%
Japan
365.9
385.0
105.2%
Overseas*
397.1
395.0
99.5%
Total
763.0
780.0
102.2%
*Includes direct exports
Business
FY07 Actual
FY08 Plan
%
IAB
328.8
337.5
102.6%
ECB
154.2
154.5
100.2%
AEC
107.5
108.5
100.9%
SSB
85.2
90.0
105.6%
HCB
71.6
74.0
103.4%
Others
15.7
15.5
99.1%
Total
763.0
780.0
102.2%
OMRON Corporation Investor Relations
32
Consolidated Operating Income by Segment
FY08
SSB up, HCB unchanged and other businesses down
(Units: JPY billions)
Business
FY07
FY08
Yr/Yr
Actual
Plan
%
IAB
51.9
50.0
96.3%
ECB
12.6
11.5
91.0%
AEC
1.4
0.5
35.5%
SSB
7.0
8.0
113.6%
HCB
9.4
9.5
101.0%
Others
0.1
0.0
-
HQ Cost/ Elimination
-17.1
-19.5
113.0%
Total
65.3
60.0
91.9%
OMRON Corporation Investor Relations
33
R&D Expenses by Segment
FY08
Up by 10% overall, with all businesses increasing investment aimed at growth
(Units: JPY billions)
Business
FY07
FY08
Yr/Yr
Actual
Plan
%
IAB
19.5
21.0
107.9%
ECB
8.2
9.0
109.9%
AEC
8.3
8.5
102.4%
SSB
2.6
4.0
151.6%
HCB
4.3
5.5
127.4%
HQ and Others
8.6
9.0
104.6%
Total
51.5
57.0
110.6%
OMRON Corporation Investor Relations
34
Reference
• Depreciation Costs & Capital Investment Plans
• GD2010 3rd Stage Key Strategies
• Exchange Rates and Raw Material Prices
• Dividends, Stock Repurchases and Cancellation
OMRON Corporation Investor Relations
35
Depreciation by Segment
FY08
Up approx. 10% year on year overall, with all businesses increasing capital investment
(Units: JPY billions)
Business
FY07
FY08
Yr/Yr
Actual
Plan
%
IAB
11.7
12.5
106.8%
ECB
10.5
12.0
114.7%
AEC
8.0
8.5
105.8%
SSB
3.3
3.5
106.5%
HCB
1.1
1.5
133.1%
HQ
1.7
2.0
115.6%
Total
36.3
40.0
110.1%
OMRON Corporation Investor Relations
36
Capital Investment by Segment
FY08
Up approx. 50% year on year overall, with all businesses increasing
investment aimed at growth
(Units: JPY billions)
Business
FY07
FY08
Yr/Yr
Actual
Plan
%
IAB
6.6
10.0
151.0%
ECB
13.7
22.0
160.5%
AEC
8.7
9.5
108.7%
SSB
1.3
2.0
153.2%
HCB
2.5
2.5
101.9%
HQ and Others
5.0
10.0
199.0%
Total
37.8
56.0
148.0%
OMRON Corporation Investor Relations
37
FY08
Key Strategy 1: Strengthening Existing Businesses
- Repositioning Omron as Global No. 1 -
Continued investment to reinforce existing businesses
Category
Relays
Safety equipment
Key Tasks
• Shift to mother factory & optimal-site
production
• Development of inter-business
technologies
• Consider integrated global purchasing
• M&A synergy acceleration (OSTI)
• Accelerated global business expansion
• Further improvements in sensor
technology
LCD backlights
Category
QLM (automated
optical inspection
systems)
Micro PLCs
• Setting up a framework to promote
global business
• Strengthening R&D/manufacturing at
OMS
• Setting up a framework to promote
global business
EPS
• M&A synergy acceleration (OPT)
• Manufacturing process innovation
• Accelerated shift to mid-sized backlights
Blood pressure
monitors
Key Tasks
• Optimal site production
• Increase in the number of newly
launched items
OMRON Corporation Investor Relations
• Launch of platform-type products
• Optimal site production improvement
Body composition
monitors
• Proactive efforts to create global
manufacturing framework
• Revitalization of domestic market
38
Key Strategy 2: Expanding New Businesses
FY08
- GD2010 3rd Stage New Business Growth Strategy -
By looking ahead at business expansion in 10 years and beyond,
start up new projects that will make 7% of FY2010 total sales
Domain
Industry
Security/
safety
Key Tasks
Laser microfabrication
Capitalize on OLFT merger.
MEMS (Micro Electro
Mechanical Systems)
MEMS microphones. Reinforced development, manufacturing at OSC.
Face recognition systems
Enhance face recognition/search systems.
Social sensors
Search for new demand, strengthen technology and product
development.
Online healthcare
management
Develop net-enabled products.
Energy consumption
measurement
Develop highly accurate measurement technology.
Solar power conditioners
Develop core technology.
Society
Healthcare
Environment/energy
80
60
New Businesses Sales Plan
(JPY billions, approx.)
70.0
Target:
7% of
FY10
sales
40
12.5
20.0
20
0
OMRON Corporation Investor Relations
FY07
FY08
FY09
FY10
39
Key Strategy 3: Sales Growth in Greater China
FY08
Maintain high growth of at least 20% annually to achieve USD 1,800mil in 2010
Units: USD millions
2000
Annual growth of at least 20%
1500
Approx.
928
1000
500
0
Approx. 1,800
1,080
726
325
FY03
411
FY04
OMRON Corporation Investor Relations
412
FY05
FY06
FY07
FY08
(proj.)
FY09
FY10
(target)
40
20
04
/
20 0 4
04
/
20 0 6
04
/
20 0 8
04
/
20 1 0
04
/
20 1 2
05
/
20 0 2
05
/
20 0 4
05
/
20 0 6
05
/
20 0 8
05
/1
20 0
05
/
20 1 2
06
/
20 0 2
06
/
20 0 4
06
/0
20 6
06
/
20 0 8
06
/
20 1 0
06
/1
20 2
07
/
20 0 2
07
/
20 0 4
07
/0
20 6
07
/
20 0 8
07
/
20 1 0
07
/
20 1 2
08
/0
20 2
08
/
20 0 4
08
/
20 0 6
08
/0
20 8
08
/
20 1 0
08
/
20 1 2
09
/0
2
FY08
160
Exchange Rates (USD, EUR)
USD: Down since second half of 2007
EUR: Continuously strong since second half of 2006
1JPY
170
USD
150
EUR
100
90
OMRON Corporation Investor Relations
FY07 ¥161.9/EUR
140
FY08 ¥155.0/EUR
130
120
110
FY07 ¥114.1/USD
FY08 ¥100.0/USD
80
41
Raw Material Prices
FY08
Silver: Soaring since second half of 2007
Copper: Remaining high since FY06
Silver price quotation, JPY/Kg
70,000
60,000
30,000
FY07 ¥53,153
Silver
1300
Copper
1100
March 2006
Silver: ¥40,160
Copper: ¥643
50,000
40,000
Copper price quotation, JPY/Kg
FY08 ¥60,000 1500
March 2003
Silver: ¥18,510
Copper: ¥240
900
FY07 ¥895
FY08 ¥850
700
500
20,000
10,000
100
-100
20
03
/
2 0 03
03
2 0 / 06
03
/
2 0 09
03
2 0 / 12
04
2 0 / 03
04
2 0 / 06
04
2 0 / 09
04
/
2 0 12
05
2 0 / 03
05
/
2 0 06
05
2 0 / 09
05
2 0 / 12
06
2 0 / 03
06
2 0 / 06
06
/
2 0 09
06
2 0 / 12
07
2 0 / 03
07
2 0 / 06
07
2 0 / 09
07
/
2 0 12
08
2 0 / 03
08
/
2 0 06
08
2 0 / 09
08
2 0 / 12
09
/0
3
0
300
OMRON Corporation Investor Relations
42
Basic Policy on Profit Distribution
Dividends
FY07 dividend plan: Total of ¥42 with ¥5 commemorative
to mark Omron's 75th anniversary.
Omron will aim to maintain the payout ratio at a minimum of 20% and DOE of 2%.
Basic Policy on the Distribution of Profits
(1) In order to maximize corporate value over the long term, internal capital resources will be secured for measures that will
increase corporate value.
(2) After taking into consideration the required investments for future growth and the level of free cash flow, surplus will be
distributed to shareholders to the maximum extent possible.
(3) For dividends in fiscal 2007 and every year thereafter, OMRON's policy will be to enhance stable, uninterrupted profit
distributions by taking into account consolidated results as well as indicators including dividends on equity (DOE).
(4) OMRON will aim to maintain the payout ratio at a minimum of 20% and make profit distributions with a near-term DOE
target of 2%.
(5) Utilizing retained earnings that have been accumulated over a long period of time, OMRON intends to systematically
repurchase and retire the Company's stock to benefit shareholders.
Dividend Per Share
Term
Interim
Year-end
Total
Dividend
¥17
¥25
Ordinary
Dividend
Commemorative
Dividend
Annual
¥20
¥5
¥42
Value
Payout Ratio
Ordinary
¥37
Approx.
20%
Approx.
2.2%
Ordinary +
Commemorative
¥42
Approx.
23%
Approx.
2.5%
OMRON Corporation Investor Relations
DOE
Ref: OMRON Announces 75th
Anniversary Commemorative Dividend
(From Jan. 30 disclosure)
Omron plans to pay an ordinary year-end dividend of
20 yen per share in fiscal 2007. The Company also
plans to pay a commemorative dividend of 5 yen per
share in addition to the ordinary year-end dividend, for
a year-end dividend of 25 yen per share.
43
Stock
Cancellation
Additional Stock Repurchase and Cancellation
Additional treasury stock repurchased from Feb. 1 to Mar. 6, 2008 (6mil shares,
approx. ¥13.5bn), followed by cancellation of 10mil shares on Mar. 21
Additional Treasury Stock Repurchased
(1) Number of shares:
6 million
(2) Total cost of shares: Approx. ¥13.5bn
(3) Period:
February 1, 2008 to
March 6, 2008
(Mil shares)
30
Number of Treasury Shares
Treasury Stock Canceled
(1) Number of shares:
10 million
(2) Date of cancellation: March 21, 2008
(3) % of treasury stock
after cancellation:
7.3%
Additional
6.0 repurchase
10%
10.0
(cancelled)
20
21.44
(Total)
10
27.44
(Total)
(24.12mil)
17.44
(7.3%)
0
FY03
FY04
FY05
FY06
FY07
FY07
(Dec 31) (additional repurchase)
No. outstanding: 249,121,372
OMRON Corporation Investor Relations
FY07
(after cancellation)
239,121,372
44
"Best Matching of Machines to People"
OMRON Corporation
Contact:
Corporate Strategic Planning HQ,
IR Department
Phone:
E-mail:
URL (English):
OMRON Corporation Investor Relations
+81-(0)3-3436-7170
[email protected]
www.omron.com