PDF 470kb

Results for the Six Months
Ended September 30, 2003
November 4, 2003
OMRON Corporation
1
Contents
1. Summary of Results for the Six Months Ended
September 30, 2004 :Page 4
2. Outlook for the Fiscal Year Ending
March 31, 2004
:Page 13
Notes:
1. The financial statements are prepared in accordance with U.S. GAAP.
2. Includes 134 consolidated subsidiaries and 10 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.
2
Business Domains
IAB:
Industrial Automation Business
Manufacture and sale of control components for factory automation, etc.
ECB:
Electronic Components Business
Manufacture and sale of electronics components for home appliances, mobile
devices, etc.
AEC:
Automotive Electronic Components Business
Manufacture and sale of electronic components for automobiles
SSB:
Social Systems Business *
Equipment for financial institutions (ATMs, etc.), railway companies
(automated passenger gates, etc.) and others
* SSB consists of the Social Systems Solutions and Service Business
Company and the Advanced Module Business Company (AMB).
HCB:
Healthcare Business
Manufacture and sale of medical devices (digital blood pressure monitors,etc.)
Others: Business Development Group/Others
Exploration of new business, businesses not included in above
3
1. Summary of Results for the Six Months
Ended September 30, 2003
4
Six months ended
September 30, 2003
Interim Results
(Billions of yen)
First Half Results
Six Months Ended
September 30, 2003
Six Months Ended
September 30, 2002
% of
Previous
Period
Net sales
270.2
100.0%
246.9
100.0%
109.4%
Gross profit
113.0
41.8%
94.9
38.4%
119.1%
SG&A expenses
71.0
26.2%
65.1
26.4%
109.0%
R&D expenses
20.5
7.6%
18.3
7.4%
111.7%
Operating income
21.5
8.0%
11.5
4.6%
188.0%
2.1
0.8%
24.2
9.8%
8.7%
19.4
7.2%
-12.7
-5.2%
-152.7%
7.7
2.8%
-9.7
-3.9%
-79.1%
Non-operating expenses
EBIT
Net income (loss)
5
Six months ended
September 30, 2003
Net Sales
+9.4%
¥246.9 billion
¥259.0 billion
¥270.2 billion
0%
+12.
HCB
+8.6%
+28.4%
SSB
AEC
ECB
+7.3%
– 0 .5 %
+11.9%
+12.6%
9/2002
+4.3%
IAB
9/2003
– 9 .0 %
+3.7%
+6.4%
Initial Budget
6
Six months ended
September 30, 2003
IAB
+12.6% ¥110.6 billion +6.3%
¥104.0 billion
¥98.2 billion
+29%
+15%
+16%
-1%
+11%
9/2002
China
Asia
Europe
+6%
+9%
+6%
North
America
+3%
Japan
+7%
9/2003
Initial Budget
7
Six months ended
September 30, 2003
ECB
+11.9% ¥43.5 billion +3.7%
¥38.9 billion
+94%
+17%
+6%
+15%
9/2002
Direct Trade
China
Asia
Europe
+41%
+9%
-2%
+4%
-11%
North
America
-6%
+12%
Japan
+3%
9/2003
¥42.0 billion
Initial Budget
8
Six months ended
September 30, 2003
AEC
¥28.4 billion -0.5% ¥28.2 billion
-13%
-3%
+12%
9/2002
-8.9% ¥31.0 billion
Asia
-7%
Europe
-10%
North
America
-14%
+7%
Japan
-3%
9/2003
Initial Budget
9
Six months ended
September 30, 2003
SSB
+28.4% ¥53.7 billion +7.3% ¥50.0 billion
¥41.8 billion
Direct
Trade
+8%
-25%
Japan
+8%
+36%
9/2002
9/2003
Initial Budget
10
Six months ended
September 30, 2003
HCB
+12.0% ¥22.8 billion +8.7% ¥21.0 billion
¥20.4 billion
+53
%
+3%
+22
%
China
Asia
Europe
North
America
+7%
+19
%
+32
%
+9%
+10
%
Japan
+8%
+4%
9/2002
9/2003
Initial Budget
11
Six months ended
September 30, 2003
Operating Income
Net effect of structural reform
Product mix
Sales growth
10.1
10.1
5.8
5.8
(Billions of yen)
0.7
0.7
9.2
9.2
4.0
4.0
Foreign
exchange loss
Increased
expenses
21.5
21.5
(SG&A, R&D,etc.)
11.5
11.5
Six months ended
September 30, 2002
Six months ended
September 30, 2003
12
Six months ended
September 30, 2003
Cash Flows
Six months ended
Six months ended
September 30, 2003 September 30, 2002
Net Cash Provided by Operating Activities
35.5 billion
15.0 billion
(15.5 billion)
(12.8 billion)
20.0 billion
2.2 billion
Net Cash Provided by (Used in) Financing
(17.9 billion)
Activities
Net Increase (Decrease) in Cash and Cash
(0.7 billion)
Equivalents
Cash and Cash Equivalents at End of the
79.3 billion
Period
10.7 billion
Net Cash Used in Investing Activities
Free Cash Flows
12.4 billion
83.2 billion
13
2. Outlook for the Fiscal Year
Ending March 31, 2004
14
Outlook for year
ending March 31, 2004
Fiscal Year Forecast
(Billions of yen)
Fiscal Year
Year Ending
March 31, 2004
(Est.)
Year Ended
March 31, 2003
(Act.)
% of
Previous
Period
Net sales
580.0
100.0%
535.1
100.0%
108.4%
Gross profit
239.0
41.2%
207.7
38.8%
115.1%
SG&A expenses
143.0
24.7%
135.1
25.3%
105.8%
R&D expenses
46.0
7.9%
40.2
7.5%
114.3%
Operating income
50.0
8.6%
32.3
6.0%
154.7%
4.0
0.7%
27.6
5.2%
14.5%
EBIT
46.0
7.9%
4.7
0.9%
972.1%
Net income
24.0
4.1%
0.5
0.1%
4696.7%
Non-operating expenses
15
Outlook for year
ending March 31, 2004
Sales Forecast for the Fiscal Year
Ending March 31, 2004
¥535.1 billion
Year ended
March 31, 2003
HCB
47 .9
-7.7
%
24 .0
+8.0
%
1 37 .5
+10
.0%
5 8.5
-7.9
%
8 9.5
+1.1
%
+4.7
%
2 2 3.5
SSB
9%
-30 .
ECB AEC
.9%
IAB
.0%
+11
+1 7
%
-1.6
¥560.0 billion
.8%
+3.6%
+1 2
Year ending
March 31, 2004
.4%
¥580.0 billion
+1 0
+8.4%
Initial Plan
16
Outlook for year
ending March 31, 2004
IAB Sales Forecast
¥202.5 billion
Year ended March 31,
2003
Solutions
+2
%
Asia
China
+4
%
+3
%
-1 %
Europe
%
+7
%
2
+2
North
America
%
+7
%
¥213.5 billion
Japan
3
+1
Year ending March
31, 2004
+4.7%
-1 %
%
¥223.5 billion
0
+1
+10.4%
Initial Budget
Strengthen sales force
Japan: Distribution agency system
China: Strengthen sales bases, etc.
Development of Solutions business
Smart Sensors
17
Outlook for year
ending March 31, 2004
ECB Sales Forecast
¥79.4 billion
+3
%
+7
5%
+6
%
-3 %
-4 %
Europe China
North
Direct
America
Asia Trade
-7 %
¥88.5 billion
%
40
+1
6%
+1
+1.1%
Japan
-4 %
Year ending March
31, 2004
%
+9
+12.8%
¥89.5 billion
-1 %
3%
+1
Year ended March
31, 2003
B-MLA
Initial Budget
Develop, introduce original products
B-MLA, FPC Connector for mobile components etc.
Strengthen sales capabilities
FPC Connector
18
Outlook for year
ending March 31, 2004
AEC Sales Forecast
¥59.4 billion
Year ended March 31,
2003
%
+3
%
+5
North
America
Europe Asia
Automotive Relays
-3 %
%
-4 %
-10
-8 %
-7.9%
¥63.5 billion
Japan
-4 %
Year ending March
31, 2004
-0 %
-1.6%
¥58.5 billion
Initial Budget
Decline in number of cars sold by
key customers in North America
Strike at key customer in South Korea
Power Window
Switches
19
Outlook for year
ending March 31, 2004
SSB Sales Forecast
¥116.7 billion
Direct
Trade
%
Bill Processing
Module
-15
%
Japan
+1
3
¥125.0 billion
%
+10.0%
-26
Year ending
March 31, 2004
%
+17.9%
¥137.5 billion
2
+2
Year ended
March 31, 2003
Initial Budget
Equipment to handle new bank note in Japan
Approx. ¥15.7 billion
Strong railway business
(Ticket venders in Kanto, SF Card system
in Chubu, etc.)
Automated
Passenger Gate
20
Outlook for year
ending March 31, 2004
HCB Sales Forecast
¥42.3 billion
Asia
China
+6
%
+2
0%
Europe
+8
%
+7
%
+8
%
4%
+5
-4 %
North
America
%
+9
＋8.0%
¥43.5 billion
Japan
%
+7
Year ending
March 31, 2004
%
＋11.0%
¥47.0 billion
1
+1
Year ended
March 31, 2003
Digital Blood
Pressure Monitor
Initial Budget
Increasing global concern about health
“Top Brand” evaluation (Consumer Reports)
New product introductions
(Chair massager, body-fat analyzer, etc. )
Nebulizer
21
Outlook for year
ending March 31, 2004
Operating Income Forecast
(Billions of yen)
Product mix
14.4
14.4
Sales growth
19.7
19.7
32.3
32.3
Year ended
March 31, 2003
17.4
17.4
1.0
1.0
Net effect of
structural reform
Increased expenses
50.0
50.0
(SG&A, R&D, etc.)
Year ending
March 31, 2004
22
Outlook for year
ending March 31, 2004
ROE Forecast
ROE: %
12.0
10.0
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
7.5
6.7
8.4
9.3
3/2005
Target
10.0
ROE (Act./Est.)
0.2
Planned ROE under GD2010
-5.1
GD2010: Long-term vision to
2010 announced 5/2001.
3/2001
3/2002
3/2003
3/2004 (Est.)
23
Outlook for year
ending March 31, 2004
Results of Structural Reforms 1
Implementation Period
From April 2002 to September 30, 2003
Targets
Results
◆ Reduction of Group
fixed and variable expenses
¥30.5 billion
¥32.4 billion
◆ Overseas production ratio
50% increase
52% increase
◆Withdrawal from low-profit
and unprofitable businesses
2 businesses
5 subsidiaries
8 businesses
11 subsidiaries
Tasks
24
Outlook for year
ending March 31, 2004
Results of Structural Reforms 2
Effect of structural reforms = ¥32.4 billion
¥1.0 billion
¥5.9 billion
¥7.5 billion
¥18.0 billion
¥30.5 billion
Variable Exp.
¥6.0 billion
General Exp.
¥10.9
billion
Variable Exp.
-¥0.5 billion
+¥2.4 billion
¥5.0 billion
General Exp.
¥5.0 billion
¥14.4 billion
Personnel Exp.
¥8.0 billion
Effects in
year ended
3/31/03
Estimated effects
in year ending
3/31/04
Cumulative
Effects
¥6.5
billion
General Exp.
¥8.5
billion
Personnel
Exp.
Personnel Exp.
¥15.5
billion
Variable Exp.
±¥0 billion
¥15.5
billion
Initial
Plan
25
Outlook for year
ending March 31, 2004
Results of Structural Reforms 3
Business Structure
Consolidation/sale of 8 businesses/ 11 subsidiaries
Reorganization of SSB, withdrawal from paper-handling
business, sale of Omron Alphatech Corporation,
dissolution of Creative Service Business
Closed 3 factories in Japan ,
Manufacturing Structure increased overseas production ratio by 50%
Purchasing Processes
Area for direct central purchasing of materials
expanded 3.1 times
Management Productivity Management staff reduced 21%
Head Office Structure
Asset Structure
Employment Structure
Additional Measures
3 divisions, 3 departments eliminated through
consolidation; head office fixed expenses reduced
14%
Decision to sell 11 properties
Consolidation of R&D bases
Early retirement of 1,462 employees + more than
800 leave group
Reductions in distribution / information expenses
26
Outlook for year
ending March 31, 2004
Growth Areas
Projections for growth in sales of products and technologies in expanding markets
and business areas, with results for the year ended March 31, 2003 as a baseline
¥176 billion
¥171 billion
Device Business
MLA/
MEMS Business
AEC
¥26
billion
Solutions Business
User Segment Business
Amusement Business
Other
¥21
billion
¥150 billion
Chinese Market
IAB/ECB
AMB/HCB
Year ended
3/31/03
Year ending
3/31/04
Initial Plan
Year ending
3/31/04
Forecast
Note: Certain figures above contain overlaps in products and regions.
Sizes of boxes in the diagram are not proportional to monetary values.
27
Outlook for year
ending March 31, 2004
B-MLA (Backlight-Micro Lens Array)
Winner of 2003 Keidanren Chairman’s Award from
Japan Institute of Invention and Innovation
High brightness
High efficiency
Low power
consumption
Simple
structure
Minimal color
unevenness
Microphotonics technology
+
Micro-replication processing
technology
28
Outlook for year
ending March 31, 2004
Microphotonics Technology
(Technology to miniaturize and integrate various optical functions and
control optical waves)
＋
Micro-replication processing technology (Production technology)
MLA
PｰMLA
B-MLA
Front light
DR-LED
Fiber optic device
Replicated polymer optical wave guide
29