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Financial Results for the Fiscal Year
Ended March 31, 2007 (FY06)
Business Plan for the Fiscal Year
Ending March 31, 2008 (FY07)
April 27, 2007
OMRON Corporation
OMRON Corporation Investor Relations
Contents
1. Executive Summary
P4
2. Results for the Fiscal Year Ended March 31, 2007
P7
3. Business Plan for the Fiscal Year Ending March 31, 2008
P21
4. Progress of Key Strategic Themes
P30
5. Basic Policy on Distribution of Profits
P35
6. Reference
P37
Notes:
1. The financial statements are prepared in accordance with U.S. GAAP.
2. Includes 160 consolidated subsidiaries and 21 affiliated companies accounted for by the equity
method.
3. Projections of results and future developments are based on information available to the Company at
the present 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) the economic conditions surrounding 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
Main Business Areas
Industrial Automation
：Sensing devices, control devices, safety devices,
inspection systems, etc.
IAB
Electronic Components
：Relays, switches, connectors, micro lens arrays,
LCD backlights, optical communications devices, etc.
ECB
Automotive Electronics
AEC
： Keyless entry systems, power window switches, automotive relays,
components, laser radar, TPMS, etc.
Social Systems
SSB
： Ticket gates, ticket vending machines, road management systems,
security management systems, facial recognition systems, etc.
Health Care
HCB
： Digital blood pressure monitors, body composition analyzers,
nebulizers, etc.
Others
：PC peripherals, RFID systems, commercial game machines,
energy management, etc.
Others
HCB
9%
Others
4%
SSB
1 4%
IAB
41%
Net sales 736.7 billion yen
AEC
13%
Results for FY06
ECB
19%
OMRON Corporation Investor Relations
3
1. Executive Summary
OMRON Corporation Investor Relations
4
Executive Summary
FY06 is final milestone toward achieving second-stage objectives of GD2010
‘Accelerating growth while securing profit increase advancing toward FY07 targets by front-loading growth’
FY06 Results
■ Achieved record sales and profits ( 5th consecutive year of increase), absorbing daikohenjo in
FY05
Consolidated
Net sales
Operating income
NIBT
Net income
(1) Net sales :
. . Operating income :
(2)
(3) NIBT:
(4) Business summary:
Result
vs. prev. year vs. original target
¥736.7 billion
117.5%
105.2%
¥64.0 billion
103.1%
101.6% (Operating margin 8.7%)
¥66.3 billion
103.0%
102.0% (NIBT margin
9.0%)
¥38.3billion
107.0%
102.1% (NI margin
5.2%)
17.5% year-on-year increase, mainly due to sales increase from M&A and foreign exchange gains
3.1% year-on-year increase due to solid business, M&A and exchange rate gains, covering raw
material price hike. But 28% increase excluding ¥11.9 billion gain on return of substitutional portion
of employees’ pension fund (daikohenjyo) in previous year.
1.6% increase over target mainly due to foreign exchange rate gains, reduction of R&D expenses.
2.0% increase over target due to operating income plus non-operating income from factors including
gain on establishment of retirement benefit trust.
Sales were solid, with double-digit growth in IAB and strong growth in SSB. In operating income,
AEC moved into black in 3rd quarter although still showed loss in full fiscal year.
Plan for FY07 and Key Points
■ We will aim for the 6th consecutive year of consolidated sales and income growth and prioritize
profits to achieve GD 2nd stage goals.
Consolidated
Net sales
Operating income
NIBT
Net income
Year ending March 31, 2008
¥800.0 billion
¥75.0 billion
¥72.0 billion
¥46.0 billion
vs. prev. year
108.6%
117.1%
108.6%
120.2%
OMRON Corporation Investor Relations
(Operating margin
(NIBT margin
(NI margin
9.4%)
9.0%)
5.8%)
5
Summary of Consolidated Net Sales and Operating Income
Expect to achieve growth in sales and income for the 6th consecutive year, record sales and profits
(billions of yen)
Net Sales
Gross Profit
Operating Income
Operating Income Margin
Net Income
EPS(Yen)
FY2002
535.1
207.7
32.3
6.0%
0.5
2.07
FY2003
584.9
240.1
51.4
8.8%
26.8
110.66
FY2004
608.6
249.8
56.1
9.2%
30.2
126.52
FY2005
626.8
253.4
62.1
9.9%
35.8
151.14
FY2006
736.7
284.2
64.0
8.7%
38.3
164.96
FY2007
800.0
309.5
75.0
9.4%
46.0
199.55
122.1
121.1
113.4
132.4
107.3
135.0
113.4
138.2
117.0
150.3
（ yen）
）
115.0
<Curency Rate>
USD
EUR
Net Sales
(billions of yen)
(billions of yen)
1,0 00
150.0
Operating Income
80
1 2.0 %
1 0.0 %
8 00
60
8 .0 %
6 00
40
6 .0 %
4 00
4 .0 %
20
2 00
2 .0 %
0
0
FY02
FY03
FY04
FY05
FY06
FY07(F)
0 .0 %
FY02
FY03
OMRON Corporation Investor Relations
FY04
FY05
FY06
FY07(F)
6
2. Results for the Fiscal Year
Ended March 31, 2007
OMRON Corporation Investor Relations
7
Consolidated Income Statements
FY06 Results
Net sales ¥736.7 billion; Operating margin 8.7%
Reached operating income target set at start of year. Operating income was up 3.1% year-on-year,
but up 28% excluding return of substitutional portion of pension fund (daikohenjyo).
(billions of yen)
Change from
FY05
FY06
YoY Change
FY06
P/L
Original
target
Original
Actual (1)
Net sales
Gross profit
SG&A expenses
R&D expenses
Daikohenjyo
Operating income
NIBT
NIAT
626.8
253.4
152.7
50.5
11.9
62.1
64.4
35.8
113.4
138.2
USD
EUR
*
Actual (2)
736.7
284.2
168.1
52.0
(2)/(1)
target (3)
117.5%
112.2%
110.1%
103.0%
-
(2)/(3)
700.0
282.0
163.5
55.5
105.2%
100.8%
102.8%
93.7%
101.6%
102.0%
102.1%
(yen)
+7.0
+15.3
64.0
66.3
38.3
103.1%
103.0%
107.0%
63.0
65.0
37.5
117.0
150.3
+3.6
+12.1
110.0
135.0
Daikohenjyo: Return of substitutional portion of pension fund
OMRON Corporation Investor Relations
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FY06 Results
Breakdown of Consolidated Sales
by Region and Business
Sales results cleared original targets in Japan and overseas.
By segment, IAB, ECB, AEC and SSB sales exceeded targets.
(billions of yen)
Change from
FY05
FY06
YoY Change
FY06
Original
target
Japan/Overseas
Japan
Overseas
Total
Actual (1)
354.9
271.9
626.8
Actual (2)
388.0
348.7
736.7
(2)/(1)
Original
target (3)
109.3%
128.2%
117.5%
By Business Segment
103.1%
107.8%
105.2%
Original
(1)
IAB
ECB
AEC
SSB
HCB
Others
Total
376.5
323.5
700.0
(2)/(3)
272.7
97.7
77.6
91.8
61.1
25.9
626.8
(2)
305.6
138.4
93.3
105.9
65.7
27.8
736.7
(2)/(1)
112.1%
141.6%
120.3%
115.4%
107.6%
106.9%
117.5%
OMRON Corporation Investor Relations
target(3)
298.0
121.5
91.0
99.0
66.5
24.0
700.0
(2)/(3)
102.5%
113.9%
102.6%
107.0%
98.8%
115.8%
105.2%
9
FY06 Results
Breakdown of Operating Income
By Business Segment
ECB
ECBand
andAEC
AECdid
didnot
notreach
reachtargets,
targets,
but
butthe
theshortfall
shortfallwas
wascovered
coveredby
bySSB
SSBand
andothers.
others.
(billions of yen)
Change from
FY05
FY06
YoY Change
FY06
Original
target
Original
Business Segment
IAB
ECB
AEC
SSB
HCB
Others
HQ Cost/Elimination
Daikohenjyo
Total
Actual (1)
Actual (2)
(2)/(1)
tar get (3)
(2)/(3)
41.9
48.5
115.7%
48.0
101.0%
11.2
-2.0
4.4
8.7
1.7
-15.7
11.9
13.1
-1.2
8.1
8.7
2.4
-15.6
-
116.9%
182.0%
100.4%
144.8%
-
14.5
3.0
6.0
8.5
0.5
-17.5
-
90.2%
134.5%
102.2%
484.2%
-
64.0
103.1%
63.0
101.6%
62.1
OMRON Corporation Investor Relations
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Breakdown of Changes in Operating Income
(compared to previous year)
FY06 Results
Increased
Increasedprofits
profitsoffset
offsetabsence
absenceof
ofgain
gainon
onreturn
returnof
ofsubstitutional
substitutionalportion
portion
of
employees’
pension
fund
in
previous
year.
of employees’ pension fund in previous year.
In
Inaddition
additionto
tonet
netincrease
increasein
insales,
sales,
foreign
foreignexchange
exchangegains
gainscovered
coveredhigher
higherraw
rawmaterial
materialcosts
costs
Effect of
Raw
Increase in manufacturing
M&A materials fixed cost (incl. exchange
effect of -1.9)
Profit on
-4.5
+6.5
exchange
Effect of
exchange
rate
-14.7
Sales increase and
+7.7
on SG&A
product mix
expenses
-4.6
-3.6
Effect of
M&A
+35.8
(billions of yen)
Increase
in SG&A
expenses
-7.5
Daikohenjyo
-11.9
Increase
in R&D
expenses
-1.3
Change in gross profit
+¥30.8 billion
64.0
62.1
Change in operating income: +¥1.9 billion
(Effect of exchange rate on operating income: +¥1.2 billion)
FY05
FY06
OMRON Corporation Investor Relations
11
FY06 Results
Breakdown of Changes in Operating Income
(compared to original target)
Operating
Operatingincome
incomemet
metoriginal
originaltarget
targetdue
dueto
todecreased
decreasedR&D
R&Dexpenses
expenses
and
exchange
gains
that
covered
rising
cost
of
raw
materials.
and exchange gains that covered rising cost of raw materials.
Effect of Raw
M&A materials
Profit on
exchange
Sales increase and
product mix
+6.5
-4.3
-6.9
+11.2
-4.3
Change in gross profit
+¥2.2 billion
63.0
Increase in manufacturing
fixed cost (incl. exchange
effect of -2.9)
(billions of yen)
Decrease
Effect of
in SG&A
exchange rate
expenses
on SG&A
expenses Decrease
in R&D
+3.7
expenses
-6.6
+5.3
-3.6
Effect of
M&A
64.0
Change in operating income: +¥1.0 billion
(Effect of exchange rate on operating income: +¥1.7 billion)
FY2006 Results
FY2006 Original
target
OMRON Corporation Investor Relations
12
IAB (Industrial Automation Business)
FY06 Results
Sales:
Sales:¥305.6
¥305.6billion;
billion;Operating
Operatingmargin:
margin:15.9%
15.9%
Achieved
Achieveddouble-digit
double-digityear-on-year
year-on-yeargrowth,
growth,with
withsales
salesand
andprofits
profitsbasically
basicallyon
on
target,
as
strength
continued
in
North
America
and
Europe.
target, as strength continued in North America and Europe.
(billions of yen)
Change from
FY05
FY06
YoY Change
FY06
IAB
Japan
Overseas
North America
Europe
Asia
China
Export
Total
Operating income
Operating income ratio
Original
target
Actual (1) Actual (2)
136.2
140.8
136.5
164.8
25.4
34.8
69.6
81.3
12.7
14.0
24.0
28.8
4.8
5.8
272.7
305.6
41.9
15.4%
48.5
15.9%
(2)/(1)
103.4%
120.7%
137.2%
116.8%
110.1%
120.2%
120.3%
112.1%
115.7%
Original
target (3)
142.0
156.0
29.5
72.5
14.5
33.0
6.5
298.0
48.0
16.1%
Sales by region
(2)/(3)
99.2%
105.6%
118.1%
112.2%
96.4%
87.3%
89.6%
102.5%
Asia
5%
China
9%
Export
2%
Japan
46%
Europe
27%
North America
11%
101.0%
OMRON Corporation Investor Relations
13
FY06 Results
ECB (Electronic Components Business)
Sales:
Sales:¥138.4
¥138.4billion;
billion;Operating
Operatingmargin:
margin:9.5%
9.5%
Sales
Salesgrowth
growthmainly
mainlydue
dueto
tostronger
strongersales
salesof
ofsmall-sized
small-sizedbacklight
backlightbusiness.
business.
Operating
income
fell
short
of
target
due
to
factors
including
Operating income fell short of target due to factors including
rising
risingraw
rawmaterial
materialcosts
costsand
andlower
lowerselling
sellingprices.
prices.
(billions of yen)
Change from
FY05
FY06
YoY Change
FY06
ECB
Original
target
Sales by region
Original
Japa n
Overseas
North America
Europe
Asia
China
Export
Total
Operating income
Operating income ratio
Actual (1) Actual (2)
45.0
58.8
52.7
79.6
9.9
11.0
12.5
12.0
6.3
8.6
14.5
35.7
9.5
12.4
97.7
138.4
11.2
11.5%
13.1
9.5%
(2)/(1)
target (3)
130.5%
55.0
151.1%
66.5
110.9%
11.0
96.2%
10.5
136.5%
7.0
245.4%
28.5
130.8%
9.5
141.6%
121.5
116.9%
14.5
11.9%
(2)/(3)
106.8%
119.7%
99.7%
114.7%
122.3%
125.1%
130.3%
113.9%
Export
9%
China
26%
Asia
6%
Europe
9%
Japan
42%
North America
8%
90.2%
OMRON Corporation Investor Relations
14
AEC (Automotive Electronic Components Business)
FY06 Results
Sales:
Sales:¥93.3
¥93.3billion;
billion;Operating
Operatingincome
incomewas
wasnegative.
negative.
AEC
AECreturned
returnedto
toconsolidated
consolidatedprofitability
profitabilityininsecond
secondhalf,
half,reflecting
reflecting
productivity
improvements
in
North
American
operations.
productivity improvements in North American operations.
(billions of yen)
Change from
FY05
FY06
YoY Change
FY06
AEC
Original
target
Original
Japan
Overseas
North America
Europe
Asia
China
Export
Total
Operating income
Operating income ratio
Actual (1) Actual (2)
27.2
26.1
50.4
67.2
28.8
37.9
6.2
9.8
15.1
16.2
0.1
1.4
0.0
2.0
77.6
93.3
-2.0
-
-1.2
-
(2)/(1)
target (3)
95.7%
27.0
133.5%
64.0
131.5%
36.5
157.9%
10.5
106.8%
16.0
1032.4%
1.0
0.0
120.3%
91.0
-
3.0
3.3%
Sales by region
(2)/(3)
96.6%
105.1%
103.7%
93.8%
101.0%
136.3%
102.6%
Asia
17%
ChinaExport
1% 2%
Japan
28%
Europe
11%
North America
41%
-
OMRON Corporation Investor Relations
15
AEC Performance
FY06 Results
Although
AEC
achieved
profitability
Althoughwell
wellshort
shortof
ofinitial
initialtargets,
targets,
AEC
achieved
profitability
rd and 4th quarters.
on
an
operating
basis
in
3
rd
th
on an operating basis in 3 and 4 quarters.
(billions of yen)
Quarterly trends in operating income
2.0
1.5
1.0
0.5
0
-0.5
Original targets
Forecast in Oct.
-1.0
-1.5
Result in Jan.
Q1
Q2
Q3
Q4
FY06 emergency actions contributed to profit in the second half
Cost reduction by VAVE／
／ Price hikes／
／ Production shift from North
America to other regions／
／ Productivity improvement
OMRON Corporation Investor Relations
16
SSB (Social Systems Business)
FY06 Results
Sales:
Sales:¥105.9
¥105.9billion;
billion;Operating
Operatingmargin:
margin:7.6%
7.6%
Shift
Shiftto
toIC
ICininKanto
Kantopublic
publictransportation
transportationsystems
systems
contributed
to
substantial
sales
increase.
contributed to substantial sales increase.
Operating
income
Operating incomewell
wellabove
abovetarget
targetdue
dueto
toeffect
effectof
ofstructural
structuralreforms.
reforms.
(billions of yen)
Change from
FY05
FY06
YoY Change
FY06
SSB
Original
targe t
Original
Ja pan
Overseas
North Ame rica
Europe
Asia
China
Export
Total
Ope rating income
Ope rating income ratio
Actual (1) Actual (2)
90.5
101.8
1.3
4.1
0.2
0.5
0.0
0.0
0.0
0.0
0.0
0.0
1.1
3.6
91.8
105.9
4.4
4.8%
8.1
7.6%
(2)/(1)
target (3)
112.6%
95.0
308.8%
4.0
262.1%
0.5
0.0
0.0
0.0
317.9%
3.5
115.4%
99.0
182.0%
6.0
6.1%
(2)/(3)
107.2%
103.0%
97.0%
103.8%
107.0%
Sales by region
North America
0%
Export
4%
Japan
96%
134.5%
OMRON Corporation Investor Relations
17
HCB (Healthcare Business)
FY06 Results
Sales:
Sales:¥65.7
¥65.7billion;
billion;Operating
Operatingmargin:
margin:13.2%
13.2%
In
Inline
linewith
withoriginal
originaltargets
targetsas
asEurope
Europeand
andAsia
Asia
covered
coveredsales
salesdrop
dropin
inNorth
NorthAmerica.
America.
(billions of yen)
Change from
FY05
FY06
YoY Change
FY06
HCB
Original
target
Original
Japan
Overseas
North America
Europe
Asia
China
Export
Total
Operating income
Operating income ratio
Actual (1) Actual (2)
30.3
32.8
30.8
32.9
15.4
13.8
10.6
13.1
1.6
2.1
2.9
3.6
0.2
0.3
61.1
65.7
8.7
14.2%
8.7
13.2%
(2)/(1)
target (3)
108.2%
33.5
107.0%
33.0
89.8%
16.0
124.3%
11.0
127.0%
1.5
123.8%
4.0
106.8%
0.5
107.6%
66.5
100.4%
8.5
12.8%
(2)/(3)
98.0%
99.7%
86.4%
119.5%
138.1%
90.0%
50.2%
98.8%
Sales by region
Europe
20%
AsiaChina
3% 5%
Japan
50%
North America
21%
102.2%
OMRON Corporation Investor Relations
18
FY06 Results
Consolidated Balance Sheet
Increase
Increaseinintotal
totalassets
assetsdue
dueto
toincrease
increaseininreceivables,
receivables,increase
increaseinininventories
inventories
resulting
from
business
acquisitions
and
currency
translation,
resulting from business acquisitions and currency translation,etc.
etc.
Increase
in
short-term
loans
to
fund
M&A.
Increase in short-term loans to fund M&A.
Cash
and
cash
equivalents
Cash and cash equivalentsare
arebeing
beingreduced.
reduced.Net
Networth
worthratio
ratiowas
was60.7%
60.7%
(billions of yen)
B/S
FY04
Total Assets
Cash and cash equivalents
Notes and accounts receivable - trade
Inventories
Other current assets
Net Property, Plant and Equipment
Investments and Other Assets
Total Liabilities
Bank Loans / Current portion of L/T debt
Long-term debt
Other liabilities
Shareholders' Equity
FY05
585.4
80.6
121.7
68.6
25.0
154.7
134.8
279.6
22.9
1.8
254.9
305.8
OMRON Corporation Investor Relations
589.1
52.3
136.3
75.0
28.8
167.6
129.1
226.2
2.8
1.0
222.4
362.9
FY06
630.3
43.0
173.4
94.1
31.6
159.3
129.0
247.5
20.1
1.7
225.7
382.8
19
FY06 Results
Consolidated Statements of Cash Flows
Net
Netcash
cashused
usedin
ininvesting
investingactivities
activitieswas
was¥47.1
¥47.1billion
billion
due
dueto
toacquisitions
acquisitionsfor
forfuture
futuregrowth,
growth,etc.
etc.
(billions of yen)
C/F
FY04
Net cash provided by operating activities
Net cash used in investing activities
Free cash flow
Net cash used in financing activities
Effect of exchange rate changes
Net increase (decrease)
Cash and cash equivalents at end of the period
61.1
-36.1
25.0
-40.7
1.2
-14.4
80.6
OMRON Corporation Investor Relations
FY05
51.7
-43.0
8.7
-38.3
1.3
-28.3
52.3
FY06
40.5
-47.1
-6.5
-4.7
1.9
-9.3
43.0
20
3. Business Plan for the Fiscal Year
Ending March 31, 2008
OMRON Corporation Investor Relations
21
Business Plan
for FY07
FY07 Management Policy
FY 2007 Policy
‘Prioritizing Profit to Achieve GD2010 Second-stage Goals’
Basic stance
●Set out profit-focused measures in our annual
plan to ensure operating profit in excess of
75 billion yen.
●Lay the foundation for a growth structure that
supports increased profits, in preparation for the
third stage of GD2010
*Grand Design 2010 (GD2010) : Long-term management vision for the 10 years from April 2001 to March 2011
OMRON Corporation Investor Relations
22
Business Plan
for FY07
Assumed Operating Environment
Operating Environment
IAB
ECB
AEC
SSB
HCB
Capital investment in auto industry expected to pick up this summer. Investment in
IT- related industries is less foreseeable.
Quality, safety and environment related business expected to grow.
Outlook for industrial components market is generally bullish; growth is also
expected for TV and other digital home appliances.
Solid demand for communication relays in Europe and United States. High growth in
mobile phone related demand in emerging countries continues.
Domestic auto production volume on the increase. But mini vehicles ratio is
increasing.
North American demand is anticipated less than the previous year. But module
business is expected to grow due to greater need for safety and security.
Sales of public transportation equipment will decline as shift to common IC card
systems in Kanto region has peaked.
Expansion of new business areas such as security-related business is expected.
Domestic demand is expected to be solid, but demand for North American blood
pressure monitors is weak.
Blood pressure monitor demand in Europe and Asia is expected to grow
substantially.
OMRON Corporation Investor Relations
23
Business Plan
for FY07
Forecast of Consolidated
Statements of Operations
Aim for new sales and profit records with sixth
consecutive year of growth.
Prioritize Profit to Achieve GD2010 Second-stage Goals.
(billions of yen)
FY2005
NIAT
626.8
253.4
152.7
50.5
11.9
62.1
2.2
64.4
35.8
ROE
10.7%
Net sales
Gross profit
SG&A expense
R&D expense
'Daiko-henjyo'
Operating income
Non-０ perating profit and loss
NIBT
USD
EUR
113.4
138.2
FY2006
736.7
284.2
168.1
52.0
64.0
2.3
66.3
38.3
FY2007
YoY Change
Forecast
％
800.0
108.6%
309.5
108.9%
178.0
105.9%
56.5
108.6%
75.0
117.1%
-3.0
72.0
108.6%
46.0
120.2%
10.3%
117.0
150.3
OMRON Corporation Investor Relations
11.5%
115.0
150.0
+1.2
(yen)
-2.0
-0.3
24
Sales Forecast by Region
and Business Segment
Business Plan
for FY07
Expect sales growth of 9% （ Japan 2%, Overseas 16%）
By segment, we expect sales growth of 10% or more in IAB, ECB and HCB
(billions of yen)
FY2005
FY2006
Japan/Overseas
Japan
Overseas*
Total
By business
IAB
ECB
AEC
SSB
HCB
Others
Total
354.9
271.9
626.8
FY2005
272.7
97.7
77.6
91.8
61.1
25.9
626.8
FY2007
YoY
Forecast
%
388.0
348.7
736.7
FY2006
396.5
403.5
800.0
FY2007
305.6
138.4
93.3
105.9
65.7
27.8
736.7
OMRON Corporation Investor Relations
339.5
180.5
100.0
90.0
73.5
16.5
800.0
102.2%
115.7%
108.6%
%
111.1%
130.5%
107.2%
85.0%
111.8%
59.5%
108.6%
25
Business Plan
for FY07
Consolidated Operating Income Forecast
(by Business Segment)
IAB will sharply increase profits through global productivity structure reforms
AEC will restore profits.
We aim for record-high profits
(billions of yen)
FY2005
By Business
IAB
ECB
AEC
SSB
HCB
Others
HQ Cost/Elimination
'Daiko-henjyo'
Total
41.9
11.2
-2.0
4.4
8.7
1.7
-15.7
11.9
62.1
FY2006
48.5
13.1
-1.2
8.1
8.7
2.4
-15.5
64.0
FY2007
Forecast
64.6
15.3
1.4
7.3
9.5
-0.6
-22.4
75.0
OMRON Corporation Investor Relations
YoY
%
133.1%
116.8%
90.5%
109.3%
144.8%
117.1%
26
Business Plan
for FY07
Sales and Operating Income Growth by Business
Sales
SSB
・Strengthen proposal-based sales. Focus on AOI (Automated Optical Inspection), safety
components and application sensor businesses.
・ Focus on miniature backlight business. Generate synergy with OPT (Omron Precision Technology)
・ Expansion projected for amusement components business.
・ Focus on products in new tech fields with emphasis on safety.
・ Focus on sales growth in China, where we established a new production base.
・ IC conversion of public transportation systems in Kanto has peaked.
・ Focus on security as a new business area.
HCB
・ Focus on hypertension and obesity prevention care business with mission of prevention
and early detection of lifestyle diseases. Regional focus on China and Russia.
IAB
ECB
AEC
Operating
income
IAB
・ Profit structure: Achieve internal target of 5:3:2
・ Improve profits in growth businesses (PLC, AOI, safety devices, etc.)
AEC
・ Improve profits with expansion of China business and relay business
・ Full-scale launch of optical communication devices, synergy with OPT in miniature backlights expected.
・ Increase sales of growth products (laser radars, tire pressure monitoring systems, electronic power
steering, etc.) ・Ongoing profit improvement at North American production base
SSB
・Continued promotion of structural reforms and operational reform
・ Focus on getting security business fully under way
HCB
・ Enter new category markets
・ Strengthen marketing of growth categories
ECB
OMRON Corporation Investor Relations
27
Business Plan
for FY07
Forecast of IAB Sales Growth
Strengthen domestic
domestic applications
applications business
business and
and expand
expand sales
sales of
of
Strengthen
AOI and
and PLC
PLC in
in Greater
Greater China
China area.
area.
AOI
Aim for
for 111%
111% growth
growth year-on-year
year-on-year basis
basis
Aim
Expand sales of AOI and PLC
(billions of yen)
approx.
+3.5
Strengthen applications
business
approx.
+14.0
approx.
+4.5
approx.
+2.0
Asia
approx.
+9.0
China
Europe
Japan
North America
305.6
339.5
Sales increase +33.9b
FY2007
FY2006
OMRON Corporation Investor Relations
28
Business Plan
for FY07
IAB P/L Structure
Having reduced fixed costs, achieve Profit and Loss structure
of 5:3:2
(billions of yen)
4,000
400
Trends in the IAB PL
structure
Consolidated 3
Shanghai factories
Consolidated Mishima
and Okayama factories
Production transfer to
Shanghai
350
3,500
339.5
Consolidated 2 Business
Units
300
3,000
250
2,500
Cost rate decline by
approx 2%
229.6
2,000
200
Productivity at manufacturing dept. is
improved by approx. 30%
150
1,500
30%
100
1,000
50
500
00
16%
15%
FY2003
49%
31%
33%
FY2004
FY2005
FY2006
19%
FY2007
(Plan)
PL structure of
５：３：２ will be completed.
OMRON Corporation Investor Relations
29
4. Progress of Key Strategic Themes
30
Progress of Key Strategic Themes
(1) Sales Growth in New Tech Fields
Sharp increase over previous period due to contribution of OMRON PRECISION TECHNOLOGY Co.,
Ltd. (formerly Pioneer Precision Machinery Corp.)
Expect to surpass ¥100b in final year of second stage of GD2010 (FY2007)
Estimate
Over¥100b
(billions of yen)
Products in New Tech Fields
90.0
IAB: Automated Optical Inspection Systems, etc.
80.0
ECB: Back Light for LCD, etc.
ECB: MEMS Sensors, etc.
AEC: Laser radars for automobiles, etc.
OPT
40.1b
60.0
FY07
Original
target
67.9b
70.0
198%
(reference)
OPT
21.9b
50.0
119%
40.0
160% 28.8b
30.0
20.0
18.0b
10.0
0
68.0 b
34.3b
Actual
FY2003
FY2004
FY2005
Actual
FY2006
OMRON Corporation Investor Relations
FY2007
31
Progress of Key Strategic Themes
(2) Sales Growth in Greater China
Sales of OMRON PRECISION TECHNOLOGY Co., Ltd. made strong
contribution
Sales up 176% year-on-year, 107% vs. start-of-year target
But difficult to achieve original target of FY2007
(reference)
（MUSD)
FY07
Original
target
1400
1200
1008
FY2006 Actual
1000
YoY Change
176%
Change from Original target 107%
800
600
400
325
411
412
726
1330MUSD
676
200
0
FY2003 FY2004
FY2005
FY2007
FY2006
Original Target
Actual
OMRON Corporation Investor Relations
Plan
32
Progress of Key Strategic Themes
(3) Global Production Reform
Ongoing shift of production to Greater China
Greater China production ratio continued to increase in FY2006; will reach about 30% in FY2007
(billions of yen)
Production in
Greater China to
increase by 4.5 times
400
300
12%
20%
21%
71%
67%
200
0
13%
25%
19%
65%
62%
51%
FY2005
(Actual)
FY2006
(Actual)
12%
9%
100
30%
FY2003
(Actual)
FY2004
(Actual)
Japan
23%
Overseas Production
(Excluding China Area)
OMRON Corporation Investor Relations
FY2007
(Plan)
China Area Production
33
Progress of Key Strategic Themes
(4) SG&A Expenses Reform
Continuously control
control
SG&A
costs
at達成に
offices
and headquarters
headquarters
Continuously
costs
offices
and
目標の
販管費比率２２
２２％
％
に向け
目標のSG&A
販管費比率
２２at
達成
to achieve
achieve
target
of販管費の
4:3:1の
P/L
structure
to
target
of
4:3:1
P/L
structure
事業部門、
、the
本社部門とも
とも販管費
抑制を
を継続
事業部門the
本社部門
とも
販管費
抑制
¥736.7b
¥626.8b
¥608.6b
Net
Sales
SG&A
Expenses
¥800.0b
Increase of SG&A expenses
controlled to 16%
24.1
％
FY2004
(Actual)
＊
23.8
％
FY2005
(Actual)
＊
22.8
％
FY2006
(Actual)
22.0
％
FY2007
(Target)
•Excluding extraordinary factors of ATM business and response to hazardous chemical substance regulations in FY2004
•Excluding extraordinary factor of response to hazardous chemical substance regulations in FY2005
OMRON Corporation Investor Relations
34
5. Basic Policy on
Distribution of Profits
OMRON Corporation Investor Relations
35
Basic Policy on Distribution of Profits
Omron
Omronwill
willincrease
increasecash
cashdividends
dividendsfor
forFY
FY2006
2006to
to34
34yen
yenper
pershare
sharewhile
while
aiming
aimingfor
forDOE
DOEof
of2%
2%and
andmaintaining
maintainingaaminimum
minimumpayout
payoutratio
ratioof
of20%
20%for
for
FY2007.
FY2007.
<Basic Policy on Distribution of Profits>
1. Place top priority internal funds for growth investments to raise corporate value
2. Return surplus earnings to shareholders as much as possible after considering the
free cash flow level
3. Enhance stable, uninterrupted shareholder returns by taking into account
consolidated results as well as indicators including dividend on equity (DOE) in
annual dividends
4. Aim for DOE of 2% and maintain a minimum payout ratio of 20%
5. Over the long-term, use retained earnings to flexibly provide returns to
shareholders, including share repurchases
Cash Generation
Free cash flow
Cash into Stock
Capital with clear applications
(Capital expenditures, acquisitions, working capital, etc.)
Debt reduction
Internal funds
Dividends
(Payout
ratio 20%
and前後
DOE) 2%)
配当金
(配当性向
20%
Retained earnings
Share repurchases
OMRON Corporation Investor Relations
36
6. Reference
OMRON Corporation Investor Relations
37
Raw Material Price Hike
Reference
Copper
Copperprices
pricesrose
rosesharply
sharplyfrom
fromsecond
secondhalf
halfof
ofFY2005.
FY2005.
Prices
Pricesshowed
showedtemporary
temporarydownward
downwardtrend,
trend,but
butrecently
recentlyprices
pricesbegan
beganrising
risingagain.
again.
Silver
Silverprices
pricescontinue
continueto
torise.
rise.
silver price
（yen/kg）
silver
copper price
（yen/kg）
copper
1,100
60,000
Raw material impact
55,000
1,000
900
50,000
800
45,000
700
copper：
： +78％
％
40,000
600
silver：
： +63％
％
500
35,000
400
30,000
300
25,000
200
20,000
100
0
15,000
FY2003
FY2004
FY2005
FY2006
OMRON Corporation Investor Relations
FY2007
38
Aiming for the Best Matching of
Machines to People
OMRON Corporation
-Contact us Corporate Strategic Planning HQ
Investor Relations Department
Phone: +81-3-3436-7170
E-mail: [email protected]
URL:
www.omron.co.jp