Financial Results for the First Quarter Ended June 30, 2012 (FY12 Q1) July 30, 2012 OMRON Corporation © OMRON Corporation Contents 1. FY12 Q1 Results & Full-Year Forecast FY12 Q1 & Full-Year Highlights P. 2 FY12 Q1 Results P. 5 FY12 Full-Year Forecast P. 15 2. References P. 23 Æ Briefing of Healthcare Business strategies to follow this presentation © OMRON Corporation 1 FY12 Q1 Results & Full-Year Forecast Highlights © OMRON Corporation 2 FY12 Q1 & Full-Year Overview ¾ FY12 Q1 sales flat Y/Y. Operating income down. • So far as initially projected. • Sales up Q/Q, led by Industrial Automation Business. ¾ No change to external environment outlook: Gradual recovery overall in the second half. • Greater China and automotive markets solid. • In short-term, we are responding flexibly and swiftly to business environment changes, aiming to achieve first-half & full-year goals, and post growth both in sales and profit in all of the main businesses. • We will continue to work on VG2020 mid-/long-term measures and carry out strategic investments for growth as planned. ¾ FY12 interim dividend forecasted at ¥14. © OMRON Corporation 3 Executive Summary FY12 Q1 Results ¾ Sales almost in line Y/Y (-1.0%), operating income down (-32.7%). ¾ Industrial Automation Business (IAB) saw Y/Y sales drop, as the year-ago quarter had disaster-related temporary demand increase. Other businesses posted increases to cross off the IAB downturn. ¾ Operating income down Y/Y due to forex and increased investments for growth. (Without forex impacts, ¥153.4 bn sales (+1.3%) and ¥9.7 bn OP (-20.5%)) ¾ Exchange rates: 1 USD = ¥80.4; 1 EUR = ¥103.4 (FY11 Q1: 1 USD = ¥81.7; 1 EUR = ¥118.1) ¾ Raw material prices: Copper ¥721/kg; Silver ¥82,880/kg (FY11 Q1: Copper ¥790/kg; Silver ¥96,455/kg) Net Sales Operating Income Net Income attributable to shareholders FY2012 Q1 149.9 8.2 FY2011 Q1 151.4 12.2 Y/Y -1.0% -32.7% 4.7 6.9 -31.8% (Billions of yen) First Half & Full-Year Forecast ¾ Looking to achieve first-half & full-year goals as originally planned, reviewing the initial plans and market conditions. ¾ Q2-Q4 exchange rates: 1 USD = ¥78; 1 EUR = ¥97 (April 26 assumptions: 1 USD = ¥78; 1 EUR = ¥104) ¾ Raw material prices: Copper ¥700/kg; Silver ¥78,000/kg (April 26 assumptions: Copper ¥700/kg; Silver ¥87,000/kg © OMRON Corporation 4 FY12 Q1 Results © OMRON Corporation 5 Consolidated P/L ¾ Sales almost in line with the year-ago quarter. OP down. (Without forex impact, ¥153.4 bn sales (up 1.3%), ¥9.7 bn OP (down 20.5%)) ¾ Gross profit margin down Y/Y due to last year’s post-disaster increase. FY2012 Q1 FY2011 Q1 Y/Y 149.9 54.8 151.4 57.9 -1.0% -5.3% (%) (36.6%) (38.2%) (-1.6% pt) SG&A 36.0 10.6 8.2 35.6 10.1 12.2 +1.2% +4.7% -32.7% (5.5%) (8.0%) (-2.5% pt) 1.4 6.8 0.7 11.5 +99.8% -40.5% 4.7 6.9 -31.8% 80.4 103.4 721 82,880 81.7 118.1 790 96,455 -1.3 -14.7 -69 -13,575 Net Sales Gross Profit R&D Operating Income (%) Non-operating Income (loss), net NIBT Net Income attributable to shareholders 1USD (JPY) 1EUR (JPY) Copper (JPY/kg) Silver (JPY/kg) © OMRON Corporation (Billions of yen) 6 Operating Income Analysis (Y/Y) ¾ OP down due mainly to forex loss on gross profit, and SG&A and R&D for growth. (Billions of yen) 12.2 Sales increase, product mix, fixed manufacturing costs Material costs decrease -0.9 SG&A, R&D Exchange gain +0.8 SG&A, R&D increase +0.1 -2.3 8.2 -1.7 Exchange loss FY2011 Q1 Actual Gross profit decrease ¥3.1 bn FY2012 Q1 Actual Operating income loss ¥4.0 bn (Exchange loss: ¥1.5 bn) © OMRON Corporation 7 Consolidated B/S ¾ Production adjustments completed in FY11. Inventory well managed in Q1. (Billions of yen) June 30, 2012 Assets Cash and cash equivalents Notes and accounts receivable - trade Inventories Deferred income taxes, other current assets Property, plant and equipment Investments and other assets Liabilities Short-term debt Long-term debt Notes and accounts payable - trade Termination and retirement benefits Other liabilities Net Assets Common stock and retained earnings Accumulated other comprehensive income (loss) Treasury stock Non controlling interests Total Liabilities and Shareholders’ Equity © OMRON Corporation Mar. 31, 2012 (Ref. June 30, 2011) 517.8 537.3 538.4 50.7 122.4 91.3 29.8 118.3 105.3 45.3 141.1 92.3 29.5 120.7 108.4 64.0 120.9 90.8 30.6 117.6 114.5 201.5 215.6 220.1 23.7 0.0 69.2 59.0 49.6 18.8 0.0 79.3 60.4 57.1 30.4 0.0 73.4 64.1 52.2 316.3 321.7 318.3 438.5 -78.6 -44.5 0.9 433.8 -68.4 -44.5 0.8 430.5 -68.6 -44.6 1.0 517.8 537.3 538.4 8 Consolidated Cash Flows ¾ FCF down Y/Y as we carried out investments for growth as planned. (Billions of yen) FY2012 Q1 FY2011 Q1 (Ref. FY2011) Operating activities 12.6 13.3 31.9 Investing activities -7.5 -4.8 -26.5 Free cash flow 5.1 8.6 5.4 Financing activities Effect of exchange rate changes on cash and cash equivalents Net increase/decrease in cash and cash equivalents Cash and cash equivalents at end of the period 2.0 -18.7 -33.5 -1.7 -0.5 -1.5 5.5 -10.7 -29.5 50.7 64.0 45.3 Capital expenditures 7.0 5.4 28.3 Depreciation and amortization 5.3 5.3 22.6 *Capital investment is represented as capital expenditures on the consolidated cash flow statement. © OMRON Corporation 9 Sales by Segment ¾ IAB, EMC and AEC up Q/Q. AEC notably up over the disasteraffected year-ago quarter. ¾ SSB and HCB up Y/Y. (Billions of yen) IAB Industrial Automation FY2012 Q1 FY2011 Q1 Y/Y FY2011 Q4 Q/Q 66.0 74.9 -11.9% 64.9 +1.6% 21.3 20.4 +4.6% 21.0 +1.4% 24.1 18.4 +30.7% 23.8 +1.3% 10.0 9.6 +4.2% 24.2 -58.6% 15.4 14.3 +7.2% 16.1 -4.8% 11.5 12.2 -5.5% 14.0 -17.7% 1.6 1.6 +0.5% 2.5 -35.9% 149.9 151.4 -1.0% 166.6 -10.0% EMC Electronic & Mechanical Components AEC Automotive Electronic Components SSB Social Systems, Solutions & Service HCB Healthcare Other Eliminations & Corporate Total © OMRON Corporation 10 Operating Income by Segment ¾ IAB, EMC, AEC and HCB up Q/Q. (Billions of yen) FY2012 Q1 FY2011 Q1 7.8 12.4 -37.2% 5.6 +39.5% (11.8%) (16.5%) (-4.7% pt) (8.6%) (+3.2% pt) 2.0 2.3 -12.2% 1.3 +52.7% (9.6%) (11.4%) (-1.8% pt) (6.4%) (+3.2% pt) 1.5 0.5 +235.6% 0.8 +79.7% (6.3%) (2.5%) (+3.8% pt) (3.5%) (+2.8% pt) -1.7 -2.0 - 3.9 - (-) (-) (-) (16.1%) (-) 0.9 1.2 -22.2% -0.0 - (5.9%) (8.1%) (-2.2% pt) (-) (+5.9% pt) Other -1.1 -1.3 - -0.6 - Eliminations & Corporate -1.2 -0.9 - -1.0 - 8.2 12.2 -32.7% 10.0 -18.2% (5.5%) (8.0%) (-2.5% pt) (6.0%) (-0.5% pt) IAB EMC AEC SSB HCB Total Y/Y FY2011 Q4 Q/Q (%): Operating income/External sales © OMRON Corporation 11 Performance by Segment (Y/Y) Segment FY12 Q1 Net Sales & Operating Income, vs. FY11 Q1 Net Sales IAB Operating Income Net Sales EMC Operating Income Net Sales AEC Operating Income Net Sales SSB Operating Income Net Sales HCB Operating Income Net Sales Other Operating Income © OMRON Corporation • Japan: Automotive industry’s capital investment solid. Semiconductors & electronic components slow. • Overseas: Europe sluggish. US automotive and emerging markets strong. Down. Sales down due to the strong yen and FY11 Q1 disaster-related surge. • Japan: Demand of consumer products industry slow. Automotive and amusement strong. • Overseas: Consumer goods makers in Europe still adjusting inventories. Down due to the strong yen and internal sales decrease. • Japan: Favorable thanks to the measures to support eco-car purchases. • Overseas: Europe slow, but healthy overall. Surged. Sales up. The year-ago quarter had temporary production cutback. Railway companies orders up. Equipment delivery and related installation up. Road management systems slow. Smaller loss thanks to sales increase. • Japan: New consumer products favorable. • Overseas: Steady led by further growing demand for healthcare products in emerging markets. Down due to the strong yen. Environmental Solutions healthy. Electronic equipment, micro devices, and backlights slow. Smaller loss thanks to Environmental Solutions sales growth. 12 Sales by Area (JPY) ¾ Greater China and Asia Pacific down Y/Y, because the year-ago quarter had post-disaster temporary surge. Up Q/Q. (Billions of yen) FY2012 Q1 FY2011 Q1 Japan 70.3 67.7 +3.9% 90.6 -22.4% Americas 20.1 18.0 +11.6% 21.0 -4.2% Europe 18.8 22.9 -17.7% 20.1 -6.2% Greater China 26.9 28.0 -3.7% 22.3 +20.9% Asia Pacific 13.7 14.8 -7.6% 12.7 +8.2% Total 149.9 151.4 -1.0% 166.6 -10.0% © OMRON Corporation Y/Y FY2011 Q4 Q/Q 13 Sales by Area (FY11 Q1 Rates) ¾ Europe down 7.0% Y/Y in the flat exchange rate (with forex impact, down 17.7% in JPY). (Billions of yen) FY2012 Q1 FY2011 Q1 Y/Y FY2011 Q4 Q/Q Americas 20.6 18.0 +14.1% 21.3 -3.4% Europe 21.3 22.9 -7.0% 22.9 -6.9% Greater China 26.8 28.0 -4.2% 22.9 +17.3% Asia Pacific 14.4 14.8 -2.8% 13.6 +6.1% *Flat FY11 Q1 rates applied. © OMRON Corporation 14 FY12 Full-Year Forecast © OMRON Corporation 15 FY12 Full-Year Forecast ¾ Sales and OP as initially planned, full-year and first-half as well. ¾ Aiming at growth both in sales and profit supported by robust sales in emerging markets. (Billions of yen) FY2012 Net Sales Gross Profit (%) SG&A R&D Operating Income (%) Non-operating Income (loss), net NIBT Net Income attributable to shareholders 1USD (JPY) 1EUR (JPY) Copper (JPY/kg) Silver (JPY/kg) © OMRON Corporation FY2011 Y/Y Apr. 2012 Forecast 650.0 243.5 619.5 227.9 +4.9% +6.9% 650.0 243.5 (37.5%) 152.0 45.5 (36.8%) 145.7 42.1 (+0.7% pt) +4.4% +8.1% (37.5%) 152.0 45.5 46.0 40.1 +14.6% 46.0 (7.1%) 3.0 43.0 (6.5%) 6.6 33.5 (+0.6% pt) -54.5% +28.2% (7.1%) 3.0 43.0 28.5 16.4 +73.9% 28.5 78.7 99.0 693 78,323 79.3 110.3 738 92,379 -0.6 -11.3 -45 -14,056 78.0 104.0 700 87,000 16 Business Environment Forecast by Segment Segment IAB Q2-Q4 Forecast, vs. Q1 • Japan: Capital investments of automotive and machine tools will remain strong. Semiconductors and electronic components will remain slow. • Overseas: • Americas: Car-related investments in North America will stay strong. • Europe: Exports will be steady. Italy and Germany will remain slow. • Asia Pacific: Solid even after demand for Thailand restoration cools down. • Greater China: Will recover gradually in the second half. EMC • Japan: Amusement will be strong. • Overseas: • Americas: Car-related demand will stay strong. • Europe: Uncertainty due to the monetary crisis will continue. • Asia Pacific: Will be slow, mainly in exports to Europe. • Greater China: Will recover gradually, while consumer goods customers are still adjusting inventories. AEC • Japan: Will see drop in the second half after special demand backed by eco-car subsidiaries is over. • Overseas: Solid in North America; China will see further demand increase. SSB Demand for environmental solutions will go up. HCB • Japan: Demand for healthcare services will continue to grow. • Overseas: Emerging markets will keep growing with higher health consciousness. Other Demand for Environmental Solutions will keep growing. Backlights will recover in the second half. © OMRON Corporation 17 Full-Year Sales Forecast by Segment ¾ Looking to fulfill initial plans, full-year and first-half as well. ¾ Sales up Y/Y in all of the five main businesses. (Billions of yen) FY2012 Forecast IAB Industrial Automation FY2011 Actual Y/Y Apr. 2012 Forecast 274.0 270.8 +1.2% 274.0 89.0 83.0 +7.2% 89.0 95.0 85.0 +11.7% 95.0 60.0 57.2 +4.9% 60.0 67.5 62.4 +8.1% 67.5 59.0 53.5 +10.2% 59.0 5.5 7.6 -25.8% 5.5 650.0 619.5 +4.9% 650.0 EMC Electronic & Mechanical Components AEC Automotive Electronic Components SSB Social Systems, Solutions & Service HCB Healthcare Other Eliminations & Corporate Total © OMRON Corporation 18 IAB Sales ¾ Industrial Automation coming back after bottoming out in FY11 Q3. ¾ Expecting sales increase in the second half thanks to demand recovery and efforts made since last fiscal year: new products launch and sales & marketing enforcement. 80 (Billions of yen) 70 60 50 ～ ～ Q1 Q2 Q3 FY2010 Q4 Q1 Q2 Q3 FY2011 Q4 Q1 Q2 Q3 Q4 FY2012 [Q1 exchange rates] FY10: 1 USD = ¥91.5, 1 EUR ¥116.9; FY11: 1 USD = ¥81.7, 1 EUR =¥118.1; FY12: 1 USD = ¥80.4, 1 EUR = ¥103.4 © OMRON Corporation 19 Industrial Automation Outlook Japan ¾ Automotive and machine tools, especially overseas shipment, will remain strong. ¾ Electronic components and semiconductors will be slow. Demand related to smartphones and tablet computers will be favorable. Uncertain overall while expecting order increase from some customers in the second half. Europe ¾ The economy will be sluggish due to the financial crisis in Europe, especially Italy, Germany, and Spain. Slow overall, even with steady food and automotive exports. Greater China ¾ Domestic demand and capital investments will go up overall, thanks to the Chinese government’s economic stimulus package in the second half. ¾ Wider range of our global-standard products launched last fiscal year, which are designed to meet emerging markets too, will contribute to sales growth. © OMRON Corporation 20 EMC Outlook Home Appliances ¾ Recovery of Europe and Greater China will take longer due to the financial crisis in Europe. ¾ Greater China will see gradual recovery in the second half, mainly in white goods. Automotive Components ¾ Demand will grow for fuel-efficient cars in North America and mini-vehicles in emerging markets. ¾ Production cutback in Europe is a concern. Amusement ¾ Expecting growth thanks to our customers’ solid performance in the leveling-off market. © OMRON Corporation 21 Full-Year Operating Income Forecast by Segment ¾ Despite forex impacts on all segments, looking to achieve first-half & full-year initial targets by cutting general costs where necessary. ¾ OP up Y/Y in all of the five main businesses. (Billions of yen) FY2012 Forecast FY2011 Actual Apr. 2012 Forecast Y/Y 35.0 33.3 +5.0% 35.0 (12.8%) (12.3%) (+0.5% pt) (12.8%) 8.0 7.2 +10.5% 8.0 (9.0%) (8.7%) (+0.3% pt) (9.0%) 5.0 2.7 +85.8% 5.0 (5.3%) (3.2%) (+2.1% pt) (5.3%) 1.0 0.1 +920.4% 1.0 (1.7%) (0.2%) (+1.5% pt) (1.7%) 4.0 2.9 +37.1% 4.0 (5.9%) (4.7%) (+1.2% pt) (5.9%) Other -2.0 -3.6 - -2.0 Eliminations & Corporate -5.0 -2.5 - -5.0 46.0 40.1 +14.6% 46.0 (7.1%) (6.5%) (+0.6% pt) (7.1%) IAB EMC AEC SSB HCB Total (%): Operating income/External sales © OMRON Corporation 22 References © OMRON Corporation 23 Exchange Rates & Raw Material Costs Full-Year Fluctuation Impact • Exchange rates, ¥1 fluctuation impact (full-year, approx) USD EUR Sales ¥2.8 bn ¥0.8 bn OP ¥0.7 bn ¥0.4 bn • Silver & copper price change impact (full-year, approx) Silver Copper © OMRON Corporation Price change ¥1,000/kg ¥10/kg OP ¥100 mil ¥100 mil 24 © OMRON Corporation 110 FY11 ¥79.3 2013/01 FY09 ¥130.3 2012/10 2012/07 2012/04 2012/01 FY08 ¥100.7 2011/10 FY10 ¥113.5 2011/07 2011/04 2011/01 2010/10 130 2010/07 2010/04 2010/01 2009/10 2009/07 2009/04 2009/01 2008/10 2008/07 2008/04 2008/01 90 2007/10 2007/07 100 2007/04 150 2007/01 2006/10 2006/07 2006/04 2006/01 2005/10 2005/07 160 2005/04 2005/01 2004/10 2004/07 2004/04 Exchange Rates (USD, EUR) 170 1JPY USD EUR FY07 ¥161.9 140 FY08 ¥144.5 FY11 ¥110.3 120 FY12 Q1 ¥103.4 FY07 ¥114.1 FY10 ¥85.8 FY12 Q1 ¥80.4 80 FY09 ¥92.9 70 25 Raw Material Prices (Silver, Copper) Silver price quotation, JPY/kg Copper price quotation, JPY/kg 140,000 1400 Silver 120,000 FY11 ¥91,854 Copper FY07 ¥916 100,000 March 2006 Silver: ¥40,160 Copper: ¥643 FY12 Q1 ¥77,477 1000 (¥82,880)** FY10 ¥739 FY08 ¥657 80,000 1200 800 FY09 ¥610 March 2003 Silver: ¥18,510 Copper: ¥240 60,000 600 FY11 ¥717 40,000 FY10 ¥66,387 FY07 ¥54,230 FY12 Q1 ¥674 (¥721)** 400 FY09 ¥48,067 FY08 ¥46,265 20,000 200 2013/01 2012/10 2012/07 2012/04 2012/01 2011/10 2011/07 2011/04 2011/01 2010/10 2010/07 2010/04 2010/01 2009/10 2009/07 2009/04 2009/01 2008/10 2008/07 2008/04 2008/01 2007/10 2007/07 2007/04 2007/01 2006/10 2006/07 2006/04 2006/01 2005/10 2005/07 2005/04 2005/01 2004/10 2004/07 2004/04 2004/01 2003/10 2003/07 0 2003/04 0 *Monthly simple moving average (SMA) of price quotations. **Average used for financial results. © OMRON Corporation 26 Businesses and Major Products • Electronic signal sensing • Electrical current/voltage control Relays, switches, connectors, amusement equipment parts, mobile device parts • Human sensing • Traffic sensing • IC card technology LCD backlights, semiconductors/MEMS, energy saving/environmental solutions business, electronic systems and equipment Other AEC EMC Automotive Electronic Components Business Electronic and Mechanical Components Business Automated ticket gates and ticket vending machines, SSB road management systems, Social Systems, security management Solutions systems, face recognition & Service systems Business IAB Industrial Automation Business • Radio wave sensing • Automotive body control Keyless entry systems, power window switches, automotive relays, EPS (electronic power steering) • Bio-information sensing • Behavior sensing Home- and professional-use digital blood pressure monitors, Healthcare body composition analyzers, Business thermometers, pedometers, nebulizers, patient monitors, cardiovascular screening monitors HCB Sensing • Displacement and measurement sensing • Temperature control • Machine control • Vision sensing Proximity/photoelectric/vision sensors, PLCs, temperature controllers, machine safeguarding equipment, inspection systems © OMRON Corporation & Control Consolidated subsidiaries 151 Affiliates accounted for by the equity method 12 (as of June 30, 2012) 27 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. © OMRON Corporation Contact: Investor Relations Department Investor Relations Headquarters Omron Corporation Phone: +81-(0)3-6718-3421 Email: [email protected] Website (English): www.omron.com *To subscribe to Omron IR email newsletter: Send us an email titled "subscribe". 28