Omron 2013 Annual Report Download - page 13

22 Omron Corporation Integrated Report 2013 23
Where We're Headed
Interview with the President
How are the strategies of the “GLOBE STAGE” progressing, and what
initiatives are being implemented in preparation for the following
“EARTH STAGE”?
First of all, I have to tell you that we made a downward revision to the performance
targets for the “GLOBE STAGE.” Originally, we targeted net sales of ¥750.0 billion, oper-
ating income of ¥100.0 billion, and a gross profi t margin of 42%, but we revised these
targets to net sales of ¥710.0 billion, operating income of ¥58.0 billion, and a gross profi t
margin of 39%. It was a hard decision, but one that was fully considered. One reason for
the revision was out-of-control external factors, including unfavorable foreign exchange
rates, natural disasters, and global economic recession. However, we admit that there
were also internal issues, such as our vulnerability to foreign exchange. We have already
taken steps to address this issue. Also, performance in the Industrial Automation (IA)
Business, which is sensitive to capital investment trends, was lower than expected.
Looking on the brighter side, we’ve been on the right course in that the GLOBE STAGE
is a period for the establishment of profi t and growth structures on a global basis. We
conducted necessary investments, centered on the core IA Business (IAB & EMC), re-
gardless of the harsh operating environment. These investments were geared toward
developing competitive products and expanding sales networks in emerging countries.
We intend to turn these investments into success. While up until just recently a head-
wind has been blowing in the external operating environment, it is possible that this may
change to a tailwind. Should this occur, the investments and preparations we have ad-
vanced until now will generate substantial returns, particularly in the factory automation
VG2020 Scenario
Establishment of profit and
growth structures on a global basis
New value generation for growth
GLOBE STAGE EARTH STAGE
FY2011 FY2013 FY2020
Net sales
Global human resources strengthening
Profit structure reform
Growth in emerging markets
Creation of new business
for the “Optimization of Society”
Maximization of Industrial Automation Business
Q1
Policy for Fiscal 2013
(FA) markets of emerging countries, where demand will be supported by economic
growth, higher personnel expenses, and rising quality consciousness. While the
IA Business may face ups and downs in its growth pace, it is sure to realize growth
over the long term.
Profi t structure reforms were another area of focus. We have implemented measures
to minimize the impacts of foreign exchange rate fl uctuations, steadily constructing profi t
structures that are resilient to external changes. Profi tability is also being boosted in
non-IA Business, such as AEC, SSB, and HCB. In addition, our environmental solutions
business, a new area of focus, is developing into a highly promising business by generat-
ing revenues at a faster pace than had been initially anticipated.
While implementing reforms, we are also taking action with the next EARTH STAGE now
in view. In the EARTH STAGE, our focus will be targeting new value generation for growth.
We are allocating management resources to focus businesses to facilitate the develop-
ment of the new products and sales networks that will be necessary for future growth.
We conducted necessary investments,
centered on the core IA Business, regardless
of the harsh operating environment.
Inter
Inter
Complete the GLOBE STAGE!
Transform Omron into a stronger company that demonstrates synergies between
growth potential, profi tability, and responsiveness to change
Yoshihito Yamada
President and CEO
Continue and complete the tasks defi ned for the GLOBE STAGE
Reinforcement of IA Business
Sales expansion in emerging markets
Focus on environmental solutions business
Profi t structure reform
Strengthening of global human resources
TASKS
Interview with the President