Nomura Investment Forum 2010 Future Growth November 29, 2010 1 1 ２ Notes 1. 2. Results for the Second Quarter Ended September 30, 2010 (FY10/Q2) and Full-year Forecast Future growth The consolidated statements of Omron Corporation (the Company) are prepared in accordance with U.S. GAAP. 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, and (vi) movements in currency exchange rates and stock markets.. © Copyright OMRON Corporation , All Rights Reserved. ●2 1 Results for the Second Quarter Ended September 30, 2010 (FY10/Q2) and Full-year Forecast © Copyright OMRON Corporation , All Rights Reserved. ●3 FY10 Q2 Results ¾Sales are almost in line with Jul 28 forecast. Results improved dramatically YoY reflecting the recovery of economic conditions. ¾Improvement in operating income owing to efficient management of fixed costs, compared with Jul 28 forecast. (Billions of yen) < Net Sales > 297.9 232.4 < Operating Income > 24.4 -7.7 FY09 Q1-Q2 Actual <Q1-Q2 Total PL> FY10 Q1-Q2 Actual Total P/L (cumulative) Net Sales FY09 Q1-Q2 Actual （億円） FY10 Q1-Q2 Actual FY10 Q1-Q2 FY09 Q1-Q2 Result Result YoY 297.9 232.4 Operating Income 24.4 -7.7 - NIBT Net income 23.5 -9.6 - 15.0 -6.9 - (attributable to shareholders) © Copyright OMRON Corporation , All Rights Reserved. +28.2% ●4 Projected Results for FY10 Full Year ¾Both sales and OP at the same level as Jul 28 forecast (Billions of yen) < Net Sales > 615.0 < Operating Income > 615.0 524.7 46.0 46.0 FY10 Jul 28 fcst FY10 Forecast 13.1 FY10 Jul 28 fcst FY09 Actual Total P/L Net Sales Operating Income NIBT Net income (attributable to shareholders) FY09 Actual FY10 Forecast FY10 Forecast FY09 Actual FY10 Jul 28 fcst YoY vs. Jul 28 fcst 615.0 46.0 44.5 524.7 13.1 10.2 615.0 46.0 44.5 +17.2% +251.8% +336.5% +0.0% +0.0% +0.0% 29.5 3.5 29.5 +738.5% +0.0% © Copyright OMRON Corporation , All Rights Reserved. ●5 Structural Reform Long-term Targets (Billions of yen) 1US$=JPY114.1 1EURO=JPY161.9 Net sales 763.0 750.0 627.2 615.0 Variable (46.0%) costs 524.7 615.0 580.0 (42%) 61.6% Fixed manufacturing (15.6%) costs (45.2%) (45.2%) 62.0% 62.5% 65.2% 62.3% 64.8% (16%) 155.3 SG&A (17.3%) (17.3%) (23.1%) R&D Operating income 51.5 65.3 164.3 133.4 FY07 (25.4%) (6.7%) (8.6%) 48.9 (21%) 141.5 (26.2%) (7.8%) 37.8(7.2%) 5.3(0.9%) 13.1(2.5%) FY08 FY09 ～ ～ (20.7%) (18.7%) 176.6 58% (24.4%) 144.5 143.0 (23.5%) (23.3%) 43.0(7.4%) 43.0(7.0%) 43.0(7.0%) 33.0(5.7%) 46.0(7.5%) 46.0(7.5%) FY10 FY10(P) (Q1E) © Copyright OMRON Corporation , All Rights Reserved. FY10 (Q2E) 60.0 (8.0%) 100.0 (13.3%) FY201X 15% ～ FY202X ●6 8 projects of Structural Reform Added Addedvalue valueratio ratio Improvement Improvement Investments Investments Fixed Fixed manufacturing manufacturingcosts costs Inventory Inventory Expenses Expenses Top Topglobal globalproducts products Work -life balance Work-life balance IT ITmanagement management © Copyright OMRON Corporation , All Rights Reserved. ●7 ２ Future Growth © Copyright OMRON Corporation , All Rights Reserved. ●8 Future growth ＜Key factors for future growth＞ (Existing business) Business growth in emerging economies ＋ (New business) New businesses to meet social needs © Copyright OMRON Corporation , All Rights Reserved. ●9 【Existing Business】 Accelerated Automation in China ¾ Higher and more diverse demand for factory automation in the transforming Chinese market environment. Automation Demand in China High speed, high accuracy Ecofriendly Energy control Safety control Risk Optimal Engineering management Equipment Programming compatibility Software/ Network Precision machinery technology processing Service & Support Ｓｅｎｓｉｎｇ ＆Ｃｏｎｔｒｏｌ Full line-up of control components © Copyright OMRON Corporation , All Rights Reserved. Omron’s Added Value • Larger production, better productivity • Locally procured equipment • Self-made production equipment • Better rural economy, less workforce in urban areas • Increased labor costs • Tighter overwork rules Safe & comfortable work environment High added-value & quality ●10 【Existing Business】 IAB’s Advantages in the Greater China Area ¾IAB has constructed technical service networks and supply chains to support ¾今後数年間、中国の工場自動化市場は、従来以上に成長すると想定 customers around the Greater China area. 哈尔滨 Manufacturing Manufacturing/ /R&D R&D(OMS) (OMS) :Shanghai :Shanghai Sales : 6 branch offices (Shanghai, Sales : 6 branch offices (Shanghai,Guangzhou, Guangzhou, Beijing, Beijing,Dalian, Dalian,Xian, Xian,Wuhan) Wuhan) 35 35sales salesoffice office(including (includingTaiwan) Taiwan) 沈阳 北京 Logistics Logistics :5:5sites sites(Tianjin, (Tianjin,Shanghai, Shanghai,Guangzhou, Guangzhou, Hong Kong, Taipei) Hong Kong, Taipei) 大連 天津 Customer CustomerSupport SupportCenter Center(CSC) (CSC) :Shanghai :Shanghai SE SECenter Center :16 :16sites sites(Shanghai, (Shanghai,Beijing, Beijing, 济南 西安 Guangzhou, Guangzhou,and andother other13 13sites) sites) Distributors : More than 100 Distributors : More than 100 成都 昆明 重慶 郑州 青島 南京 無錫 蘇州 合肥 上海 杭州 武漢 寧波 温州 南昌 台湾 長沙 厦门 福州 台北 中山 新竹 広州 東莞 深圳 台中 佛山 香港 台南 © Copyright OMRON Corporation , All Rights Reserved. ●11 【Existing Business】 Automation at IAB Shanghai Plant (OMS) ¾ Key Words 1. Automation, standardization, and quality stabilization of common assembly processes ¾今後数年間、中国の工場自動化市場は、従来以上に成長すると想定 2. Best matching of machines to people 3. Non full-auto: Cost effective, partly automated production lines Manual screwing Manual parts insertion Manual soldering Auto Auto Auto Less workforce Less workforce More stable quality (Requiring less skills) © Copyright OMRON Corporation , All Rights Reserved. ●12 Business Expansion in Industrial Countries < Expand production capability > Expand production volume Improve productivity / yield ratio → Continuously strive to perfect productive capability & quality © Copyright OMRON Corporation , All Rights Reserved. ●13 【New Business】 Health Status Sensing Sensing Monitoring Simulation Control (Preventive advice) Heart attack!? Blood glucose level Surgery Blood pressure Medication Pulse Exercise therapy Cardiograph Dietetic therapy Weight change Present condition © Copyright OMRON Corporation , All Rights Reserved. ●14 【New Business】 Solutions: Industry / Society / Lifestyle Industry Society Lifestyle Environmentally conscious cost reductions Safety and security Security, Comfort, Healthcare Sensing & monitoring of equipments conditions in production sites Safety & security, comfort, train station environment Home security, nursing & personal care, safety confirmation Microphones Temperature, humidity, Illumination intensity Airflow Air pressure Vibrations, microphones Pressures IAB Airflow Temperature, humidity Microphones SSB © Copyright OMRON Corporation , All Rights Reserved. Temperature, humidity, Illumination Temperature, Vibration, illumination microphones Pressure HCB and others ●15 【New Business】 Necessary Conditions for Sensor Networks ・ Miniaturization ・ Wireless communication with controllers ・ Lack of need for external electricity source ・ Communication networks ・ Low cost © Copyright OMRON Corporation , All Rights Reserved. ●16 【New Business】 Smart Sensing Module 2010 Development of platform with sensor modules Sensor modules Temperature sensor CO2 sensor Humidity sensor Flow sensor Illuminance sensor ON-OFF sensor Acceleration sensor Infrared ray sensor Wireless module Power supply module Absolute pressure sensor Microphone One common substrate (platform) Up to 12 different types of sensor data measurable simultaneously GPS Current sensor Camera module Mounted Sensors © Copyright OMRON Corporation , All Rights Reserved. Connected Sensors ●17 【New Business】 Smart Sensing Module Sensing Technology Control Technology - MEMS/NEMS - Specialized nano-thin film Signal processing IC High accuracy sensor Knowledge IC Antenna Wireless Communication Technology Capacitor RFIC - Ubiquitous network - Zigbee, RFID Buildup multilayer memory ASIC Power generation device - Feature extraction - Inference learning - Knowledge information control Energy Technology - Compact and environment-based power generation - Mass electricity accumulation Integration Technology - Si penetration wiring (MEMS/MOS) - Wafer-level package - MEMS/MOS vertical integration © Copyright OMRON Corporation , All Rights Reserved. ●18 【New Business】 Vibration-driven Energy Generator Smaller and lighter: Wider application possibilities Thinner: Enable easier production line monitoring Lighter: Less effect on vibrating sources Size: 20 x 20 x 4 mm; Weight: 3.7 g 20 mm © Copyright OMRON Corporation , All Rights Reserved. ●19 【New business】 New technology : SSM and experimental study Yasu Factory (manufacturing semiconductors) Keihanna Innovation Center Ｒｅａｌ Ｔｉｍｅ Ｍｏｎｉｔｏｒ Smart Sensing Module Sensing & Control Parameters :Temperature and relative humidity, airflow, vibration, human detection, air particles, currents, carbon dioxide levels, etc. Cost-cutting effect (Power bill savings ) ¥4mil / year (Keihanna Innovation Center) © Copyright OMRON Corporation , All Rights Reserved. ●20 【New business】 Case Examples of SSM sensor installations Acoustic & acceleration sensors on a pump Acoustic sensor on a pump A temperature and relative humidity sensor on an exhaust air duct © Copyright OMRON Corporation , All Rights Reserved. ●21 【New Business】 One Application for MEMS (Bridge Safety Monitoring) Experimental study on a bridge on a freeway in the Kanto district of Japan. ・Vibration sources : Vibration of bridge ・Sensors : Temperature, vibration, and weight ・Communications : RFID, ucode, ZigBee © Copyright OMRON Corporation , All Rights Reserved. ●22 【New Business】 Railway Station Solution Digital signage Aged people Suspicious individuals Suspicious individuals Disabled passengers Passenger flow Congestion Suspicious objects Trouble Unusual conditions Realization Images Illumination ・Temperature and humidity ・Air pressure Air conditioning ・Airflow ・Illumination intensity ・Congestion Station interior Platform Appropriate control Induction © Copyright OMRON Corporation , All Rights Reserved. ●23 “Shaping Our Sense of Security” with Sensing and Control Technology Contact: Omron Corporation IR and M&A Planning HQ, IR Department Phone : +81-3-3436-7170 E-mail : [email protected] Website (English) : www.omron.com 24