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Integrated Report 2013
Year ended March 31, 2013

Table of contents

  • Page 1
    Integrated Report 2013 Year ended March 31, 2013

  • Page 2
    ...64 Quality Corporate Value Initiatives 66 Human Resources 2 Message from the President 4 Omron's 80-Year History 10 Omron's Businesses 68 Resolving Environmental Issues 72 Relationship Building with Shareholders 74 The Omron Principles and CSR Management 77 Corporate Governance 82 Directors, Audit...

  • Page 3
    ...and Shareholder Returns In fiscal 2012, of our five mainstay businesses, Automotive Electronic Components Business (AEC), Social Systems, Solutions and Service Business (SSB), and Healthcare Business (HCB) saw favorable growth in sales. As a result, overall net sales increased 5.0% year on year to...

  • Page 4
    ..., China. 2007: Omron ramps up development of safety business (machine safeguarding). 2007: New R&D center opened in China. 2007: Omron 3D image sensing technology put to practical use through world's first real-color 3D Vision Sensor. 2009: Full-ï¬,edged participation in environmental solutions...

  • Page 5
    ... produced micro switch and the world's first non-contact switch, all developed to lead industrial innovation. 1948 Current limiter Promoting automation at production sites At a time when automation in the manufacturing industry was trending toward high-mix, lowvolume production, Omron was quick...

  • Page 6
    ... to quickly uncover social needs related to safety, security, healthcare, and the environment, which we will address by using new automation technologies. In this way, we will support people in living more comfortable and fulfilling lives around the world. First-generation blood pressure monitor...

  • Page 7
    ... Electronic Components • Social Systems • Healthcare • Environmental Solutions Creating the unique type of value that only Omron can. Industrial Automation Business (IAB) Omron's mainstay business, leading the innovation of global manufacturing through factory automation (FA) Control-Related...

  • Page 8
    ... for Professional Use By supplying medical institutions with highly safe technologies, we are reducing the risks associated with healthcare. At the same time, we are helping develop a society in which the elderly live healthily. Sleep Sensors Blood Pressure Monitors Body Composition Monitors Body...

  • Page 9
    ... Asia Pacific Australia India Indonesia Malaysia New Zealand Singapore South Korea Thailand Vietnam FY2012 Employee Numbers by Region 32.3% 11,449 35,411 Greater China 41.7% 14,778 Americas 6.5% 2,284 Europe 5.7% 2,005 As of March 31, 2013 14 Omron Corporation Integrated Report 2013 15

  • Page 10
    ... blood pressure monitor that automatically transmits measurement data over 3G networks May 28 (Press release) Development of hand gesture recognition technology that makes trigger motion unnecessary when combined with face-sensing technologies June 1 Launch of Demand Light Service, a new application...

  • Page 11
    ...Components Business • April 2011: Spun off the Social Systems, Solutions and Service Business • Operating income: ¥58 billion • Gross profit margin: 39% • Operating income margin: 8.2% GOALS Note: Target figures were revised in April 2013. 18 Omron Corporation Integrated Report 2013...

  • Page 12
    ... * Cash Flows = Net Income (Loss) Attributable to Shareholders + Depreciation & Amortization * Environmental Contribution: Reduction in CO2 emissions resulting from the use of Omron's energy-saving or energy-creating products Office Work 29.1 20 Omron Corporation Integrated Report 2013 21

  • Page 13
    ... returns, particularly in the factory automation Maximization of Industrial Automation Business Profit structure reform Global human resources strengthening FY2011 FY2013 Growth in emerging markets FY2020 Policy for Fiscal 2013 Complete the GLOBE STAGE! Transform Omron into a stronger company...

  • Page 14
    ...scal 2013, we will aggressively develop the business to increase our contribution to addressing growing healthcare issues. In the environmental solutions business, we are working to resolve social issues in the clean energy field through the sale of PV inverters for solar power generation systems...

  • Page 15
    ... on new challenges to address global issues as we strive to make Omron a company that people around the world require, with high expectations. Please look forward to the future endeavors of Team Omron. Research and production base in the United States 26 Omron Corporation Integrated Report 2013...

  • Page 16
    Core Theme 1 Industrial Automation Business (IAB) and Emerging Countries History of Automation and Asian Market of Today Where We're Headed Factory Automation (FA) Growing Together with People's Lives Evolution of Automation at Production Sites By supporting factories, Omron has continued to ...

  • Page 17
    ... of low-quality bottles. Evolution of Automation Connection of Customer Feedback to All Areas of Operation In Asian countries, global issues must be addressed in conjunction with region-specific issues. Metal Processing Equipment Company C is a manufacturer of metal processing equipment. This...

  • Page 18
    ... use this time to revise production processes and implement other improvement activities. In order to respond to such global issues related to safety and the environment as well as the need for high-speed, high-precision control, IAB accumulates cutting-edge technical expertise within its Automation...

  • Page 19
    ... pressure monitors to be used in these nebulizers. Innovating parts in this manner helps cut costs. Nevertheless, this was not an easy process as using the blood pressure monitor pump placed increased importance on the output capacity of the atomizing unit in ensuring that the pump could supply...

  • Page 20
    ... to make suggestions regarding product displays. This type of steadfast effort has led us to obtain the leading share of more than 60% for blood pressure monitors in India. Storefront in India Educational forum for distributor in India - How high is Omron's brand recognition in emerging countries...

  • Page 21
    ... Manager Environmental Solutions Business Headquarters Izumi Echizen President and Representative Director Omron Field Engineering Co., Ltd. Market Environment and Business Overview - Please explain your business? Yukumoto: Trends related to energy usage are undergoing drastic changes in light...

  • Page 22
    ... of social issues and social contribution? Yukumoto: Some people may be curious as to why Omron is working on an environmental solutions business. Part of the decision was based on the fact that we possess PV inverters employing energy conversions technologies, monitoring systems steeped in energy...

  • Page 23
    ...Integrated Global Risk Management Policies 1 2 3 4 We will integrate and carry out risk-related activities from a global perspective for the purpose of securing the continued existence of the Companies and enabling them to achieve their targets and fulfill their corporate social responsibilities...

  • Page 24
    ...executive departments, the Global Resource Management Headquarters plays a key role in advancing initiatives as the Company works to develop stronger team relations vertically among Meeting of risk managers BCP drill at Emergency Response Headquarters 44 Omron Corporation Integrated Report 2013...

  • Page 25
    ... of procuring parts and materials including such minerals for use in products can, albeit indirectly, contribute to the violation of human * -What issues must Omron address going forward? Sakumiya: Omron has constructed its foundation for integrated global risk management. It will be important to...

  • Page 26
    ... Automation Business (IAB) Automotive Electronic Components Business (AEC) Healthcare Business (HCB) Electronic and Mechanical Components Business (EMC) Social Systems, Solutions and Service Business (SSB) Other Businesses Eliminations and Corporate Industrial Automation Business (IAB) Net Sales...

  • Page 27
    ...technologies, we have realized systems for monitoring and analyzing vast quantities of data at production sites in an accurate, quick, and easy manner. Further, these systems enable data to be arranged in a way that is meaningful to onsite staff and management. This new solution directly links Omron...

  • Page 28
    ... in monozukuri (manufacturing) technology, integrating its relays, switches, connectors, and other electromechanical component products to supply products to customers in a wide range of industries. % of net sales 13% Business Strategy and Outlook for Fiscal 2013 Koichi Tada Managing Officer...

  • Page 29
    ... Team" management strategy, under which global expansion will be pursued by leveraging the Omron Group's accumulated human resources, technologies, and management structures. Through these efforts, AEC will work Corporate Value Initiatives Fiscal 2012 in Review China, but impressive sales of new...

  • Page 30
    ... strong performance of safety and security solutions. Environmental solutions related businesses recorded impressive full-year net sales due to strong performance centered on growth fields, such as solar power generation system related services. Also, in the related maintenance business, there was...

  • Page 31
    ...products, such as sleep duration trackers, sleep sensors, wrist-type blood pressure monitors, body composition monitors with IT functions, electric toothbrushes, and electronic massagers. As a result, full-year sales were strong overall. Investment Corporate Value Initiatives ness alliance related...

  • Page 32
    ...ne processing technologies and pressing technologies to expand orders for backlight units to be used in high-end smartphones and tablets. Moreover, we will continue to advance the automation of and boost the productivity of production Corporate Value Initiatives The Environmental Solutions Business...

  • Page 33
    ... effective use of management resources. Specifically, in the core Industrial Automation (IA) Business (IAB & EMC), we aim to secure high growth rates and significant profitability during the period of our Value Generation 2020 (VG2020) long-term strategy. To this end, the Center will strengthen...

  • Page 34
    ... creating new products, services, and support methods based on the feedback received daily through our global network of more than 160 bases. Aso Solar Power Training Center Professional blood pressure monitor HBP-1300 (Japan model) This training center employs nine solar power generation systems...

  • Page 35
    ...safety, and work range expansion- on its website. At OMRON Kyoto Taiyo, improvement activities are adCorporate Value Foundation OMRON Taiyo factory innovated to provide a comfortable workplace environment for people with disabilities Global Human Resources Strategies for Individuals and Teams Omron...

  • Page 36
    ..."Green Omron 2020, " in 2011. Based on this new vision, the Company will promote two key measures: environmental contributions of its products and services and reduction of the environmental impact of its business activities. Omron Group Environmental Policy Based on the Omron Group Corporate Motto...

  • Page 37
    ... that address environmental issues head-on and are fully equipped with technological systems for using industrial products with reduced environmental impact, lowering pollution, preserving ecosystems, saving energy, and employing recycling production systems that conserve resources. 2011 2012 2013...

  • Page 38
    ... communication with current and potential investors, Omron provides timely and accurate information on the Company's business conditions and management policies. Omron also aims to reï¬,ect investors' comments in its management strategies to the fullest extent possible to maximize corporate value...

  • Page 39
    ... promote business management that emphasizes value for stakeholders that comprise society. CSR Practice Policies • Contribute to a better society through business operations. Continuously offer advanced technologies and high-quality products and services by stimulating innovation driven by social...

  • Page 40
    ... each business company as part of its internal auditing function. Moreover, the Internal Audit Division offers specific advice for improving business functions. Corporate Value Foundation Promotion of CSR throughout the Value Chain The Omron Group aims to create products that customers can trust...

  • Page 41
    ... global business-Americas, Europe, Greater China, and Asia Pacific-to implement internal audits based on local practices and legal systems at its business sites worldwide. Audit & Supervisory Board This board oversees the corporate governance system and its implementation and audits the day-to-day...

  • Page 42
    ... the corporate headquarters and each business company as well as from regional head offices. In addition, we have appointed risk managers at all Group companies in Japan and abroad and are taking other steps to create systems that allow for quick responses to risk-related matters on a global basis...

  • Page 43
    ... Omron Director Managing Director Senior Managing Director President and CEO Representative Director and Chairman of the Board Chairman of Kyoto Chamber of Commerce and Industry (to present) Honorary Chairman (to present) June 2008 June 2013 June 2011 82 Omron Corporation Integrated Report 2013...

  • Page 44
    ..., OMRON MANAGEMENT CENTER OF EUROPE Kiichiro Kondo President and CEO, OMRON SOCIAL SOLUTIONS Co., Ltd. Shizuto Yukumoto Senior General Manager, Environmental Solutions Business HQ Goshi Oba Chairman and President, OMRON INDUSTRIAL AUTOMATION (CHINA) Co., Ltd. Industrial Automation Company (China...

  • Page 45
    ... amounts applicable to the respective year, including dividends to be paid after the end of the year. 2. The U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate at March 31, 2013, of ¥94 = $1. Financial Section 86 Omron Corporation Integrated Report 2013...

  • Page 46
    ... using their abbreviated names: Industrial Automation Business (IAB), Electronic and Mechanical Components Business (EMC), Automotive Electronic Components Business (AEC), Social Systems, Solutions and Service Business (SSB), and Healthcare Business (HCB). FY2007 Net sales (Notes 3, 4): Industrial...

  • Page 47
    ... in sales of Japanese automobiles in China. However, sales in emerging countries and other regions were for the most part favorable. Social Systems, Solutions and Service Business (SSB) SSB net sales increased 20.2% year on year, to ¥68.8 billion. 90 Omron Corporation Integrated Report 2013 91

  • Page 48
    ... and security solutions; the environmental solutions business's solar power system services, electricity storage systems, and monitoring and control systems; and the related maintenance business's solar power-related products. In this manner, all major business areas saw favorable sales. Healthcare...

  • Page 49
    ... held as working capital or as a source of funds for business investment and are not employed for investment purposes. (9) Production The Omron Group has manufacturing bases outside Japan, including in China as well as in other Asian countries, and supplies products to customers worldwide through...

  • Page 50
    ...,840 840 321,680 ¥537,323 366,962 1,801 368,763 ¥573,637 3,903,851 19,160 3,923,011 $6,102,521 Financial Section U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2013, of ¥94 = $1. 96 Omron Corporation Integrated Report 2013 97

  • Page 51
    ... Consolidated Statements of Comprehensive Income (Loss) OMRON Corporation and Subsidiaries Years ended March 31, 2011, 2012 and 2013 Millions of yen Thousands of U.S. dollars FY2010 Net Sales Costs and Expenses: Cost of sales Selling, general and administrative expenses Research and development...

  • Page 52
    ...Years ended March 31, 2011, 2012 and 2013 Millions of yen Number of common shares issued Accumulated other comprehensive income (loss) Treasury stock Consolidated Statements of Cash Flows OMRON Corporation and Subsidiaries Years ended March 31, 2011, 2012 and 2013 Millions of yen Total Shareholders...

  • Page 53
    ... 65-6835-2711 India OMRON Management Center of India (Haryana) Tel 91-124-4921700 Fax 91-124-4921777 Greater China Omron (China) Co., Ltd. (Shanghai) Tel 86-21-5888-1666 Fax 86-21-5888-7933 Major Japanese Manufacturing, Sales & Marketing, and Research & Development Locations Manufacturing Kusatsu Of...

  • Page 54
    ... equity markets of the Tokyo Stock Exchange and the Osaka Securities Exchange. Publication of Integrated Report 2013 Omron conducts management from a long-term perspective in its quest to work for the benefit of the global society through its business. Integrated thinking has always been a core...

  • Page 55
    Printed in Japan