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2 Omron Corporation
Shareholders
To Our
In May 2001, Omron unveiled Grand Design 2010 (GD2010), a long-term vision for
the first decade of the 21st century that expresses where we want the Omron
Group to be in the year 2010, and the basic guidelines for the management
strategies that will get us there. While accelerating the structural reforms of
GD2010 aimed at boosting quality and speed, in November 2001 we announced the
start of a new set of structural reforms for raising Group productivity in response
to the downturn in our results and the rapidly changing business environment. To
succeed in global competition, we are extending reforms to areas we have not
previously tackled, and intend to complete these by September 2003.
A Dynamic Commitment to Structural Transformation,
Globalization and Unique Value
PERFORMANCE: SUBSTANTIAL DECLINE IN EARNINGS
For the year ended March 31, 2002, consolidated net sales declined
10.1 percent year-on-year to ¥534.0 billion. In addition to the drop in net
sales, Omron posted losses on impairment of nonperforming assets in
connection with business restructuring, and on impairment of securities.
As a result, the Company recorded a consolidated net loss before income
taxes, minority interests and cumulative effect of accounting change of
¥25.4 billion and a net loss of ¥15.8 billion.
This decline in earnings reflected the economic downturn due to the slump
in the information technology (IT) industry, notably in the United States,
which led to investment cutbacks in the semiconductor and IT-related
industries and a decline in earnings among electrical equipment and
electronics companies. These factors resulted in weaker demand for
industrial automation systems and electronic components, Omron’s main
products. In addition, restrained investment by financial institutions and
railway companies in Japan had a major impact on sales of banking systems
and automatic fare collection systems.
MANAGEMENT STRATEGY: BUILDING A CORPORATE STRUCTURE THAT
DOES NOT DEPEND ON GROWTH
In this challenging environment, our paramount task is restoring earnings
for the fiscal year ending March 2003 and beyond. To that end, we have
established the Value-Added Innovation Committee 21 (VIC21), made up of