Omron 2013 Annual Report Download - page 29

54 Omron Corporation Integrated Report 2013 55
Corporate Value Initiatives
Relocation of Aged Brazilian Factory
In 2008, AEC acquired a 100% stake in a production site in
Brazil. This site has since served as a major production base for
our operations in South America. However, this base was far
from major automobile producing areas and its building and
other facilities were quite aged. We relocated the base to a
newly constructed factory in December 2012 and commenced
full-fl edged production in January 2013.
Brazil is expected to be the world’s fi fth largest automobile
market in 2020. We will therefore utilize this new base to
respond to the automotive
component demand in South
America, with a particular
focus on Brazil, as we work
to expand our operations. The
factory will also be a base for
the Omron Group’s ongoing
social contribution efforts.
Fiscal 2012 in Review
Sales and income increased in both Japanese
and overseas operations.
We set a new record for sales following the 2008
fi nancial crisis.
AEC net sales grew 14.8% year on year, to ¥97.6 billion,
and operating income rose 86.1%, to ¥5.0 billion, in fi scal
2012. In Japan, sales were ¥30.2 billion, up 4.8% from the
previous fi scal year, setting a new record for after the 2008
fi nancial crisis.
In Japanese operations, while fi scal 2011 was impacted by
the temporary production adjustment trend that followed the
Great East Japan Earthquake, this trend disappeared in fi scal
2012. In addition, the fi rst half of the year felt the benefi ts of
government measures to promote the purchase of eco-
friendly automobiles, such as the extension of tax breaks
and the reinstatement of subsidies. These factors drove
strong automobile-related demand during the fi rst half of the
year. In the second half of the year, we saw such detracting
factors as a decline in exports to Europe as a result of the
economic recession in Europe and lower sales related to
% of net sales
15%
Katsuhiro Wada
Managing Offi cer
President and CEO,
OMRON Automotive Electronics Co., Ltd.
China, but impressive sales of new models of keijidousha (a
class of small automobiles defi ned by Japanese standards)
helped support demand nonetheless. As a result, full-year
sales in Japan improved year on year.
Overseas sales rose 20.0%, to ¥67.4 billion, supported by
robust demand in certain countries. Demand was low in
Europe, especially during the fi rst half of the year, and sales
of Japanese automobiles took a sharp downturn in China.
Nevertheless, overall demand from overseas automobile
manufacturers and emerging markets was brisk. In Americas,
demand was strong throughout the year, and demand in
China increased during the second half of the year. In addi-
tion, we experienced a rebound from the temporary declines
in sales in the previous fi scal year that resulted from the
fl oods in Thailand. This rebound was particularly prominent
in the fi rst half of the year. As a result of the above factors,
overall full-year overseas sales showed a signifi cant increase
from the previous fi scal year.
Operating income was also substantially higher due to the
rebound from the abovementioned impacts of the Great
East Japan Earthquake and the Thailand fl oods.
AEC’s new factory in Brazil
commenced full-fl edged
operation in January 2013
Automotive Electronic Components Business (AEC)
Production and sales of electronic components for automobiles
OMRON Automotive Electronics Co., Ltd. (AEC), conducts business operations catering specifi -
cally to the ever evolving automotive electronics fi eld, a subsection of the automobile industry,
which continues to grow on a global basis. This business continues to contribute to the realization
of a safer, more secure, and more comfortable driving society by producing technologies and
products designed to create “the best matching of automobiles to people.”
Segment Information
Analysis of external environment
AEC Results and Forecasts
(Billions of yen)
Fiscal Year 2009 2010 2011 2012 2013
(Forecast)
Net sales 75.2 84.3 85.0 97.6 108.5
Japan 23.9 28.4 28.9 30.2 25.0
Overseas 51.3 55.9 56.1 67.4 83.5
Americas 24.0 23.9 21.5 25.0 30.5
Europe 2.0 2.6 2.4 2.8 3.0
Asia Pacifi c 13.1 14.2 16.2 19.5 24.0
Greater China 6.3 9.1 9.5 13.9 19.0
Direct exports 5.9 6.2 6.5 6.2 7.0
Operating income 1.7 4.2 2.7 5.0 7.0
Operating income margin 2.3% 4.9% 3.2% 5.1% 6.5%
R&D expenses 5.0 5.3 6.6 7.0
Depreciation and amortization 2.1 2.1 2.1 2.4
Capital expenditures 3.6 2.0 5.2 5.5
* Beginning in fi scal 2010, the Omron Group has been revising the management guidance fees for the purpose of concen-
trating capital funds at the headquarters to reinforce selection and concentration and strategically allocate resources.
This inclusion has had an effect on the operating income of each segment.
* The sales fi gures given indicate sales to external customers and exclude intersegment transactions. Operating income
indicates income including internal income prior to the deduction of such amounts as intersegment transactions and head
offi ce expenses that are not apportionable.
* The forecasts for R&D expenses, depreciation and amortization, and capital expenditures are not publicized.
Check it out!
Source: CSM Worldwide, Inc.
Sales were poor in Japan due to the
impacts of the Great East Japan
Earthquake, while sales improved
signifi cantly in China.
Business Strategy and Outlook for Fiscal 2013
Automobile market growth is expected to center
on emerging countries.
For AEC, we are forecasting a year-on-year increase of 11.1%,
to ¥108.5 billion, in net sales, with a 39.7% increase in oper-
ating income, to ¥7.0 billion, in fi scal 2013.
In fi scal 2012, new automobile sales recovered to 5 million
vehicles in Japan for the fi rst time in fi ve years. However,
market conditions are proving to be weak due to the end of
the government subsidies for the purchase of eco-friendly
automobiles. Overseas, meanwhile, demand is expected to
be strong in the North American market, and sales of Japa-
nese automobiles in China will gradually recover from the
period of boycotting seen during fi scal 2012. Also, the strate-
gic vehicles that Japanese automobile manufacturers in
Thailand have developed for the global market are forecast to
sell well, particularly in Southeast Asia. Accordingly, overseas
sales should show an overall increase.
Further, the automobile market is expected to continue
growing centered on emerging countries. Against this back-
drop, there is increasing demand from our customers for
conducting development and production operations locally in
these countries. At the same time, major suppliers from
Europe and the United States are becoming more responsive
toward demand in Asia, resulting in intensifi ed competition.
Aiming to respond to such market changes, AEC has been
establishing systems in each major region of the world for
quickly uncovering new market needs and providing value-
added products by utilizing high-quality development, produc-
tion, sales, and services functions. It is also working on the
“Global One 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
to uncover the social needs inherent to each different region
and quickly and effi ciently introduce products that meet
those needs.
Electric Power Steering Controllers
AEC anticipates that a growing number of
automobile models will utilize its electric
power steering controllers for smooth
steering wheel operation and energy
saving. Omron is ready to meet wide-
ranging market needs with its control
technologies that are compatible with
mid- and large-sized vehicles. Also, AEC is
strengthening its development and pro-
duction functions in the rapidly growing
Chinese market, responding to demand
from Chinese automobile manufacturers.
What’s New
Transmitter Key and Engine
Start Systems
AEC is carrying out the development
and production of various devices by
integrating its wireless, miniaturization,
and weight-reducing technologies for
which it has established a strong market
reputation. These devices provide added
convenience for users and greater ease
in locking and unlocking doors and start-
ing the engines of automobiles.
Components for Eco-Friendly
Vehicles
AEC is developing a range of fundamental
technologies and products to contribute
to greater energy savings and fuel-
effi ciency improvements in eco-friendly
vehicles. These developments include
lithium-ion battery leakage monitoring
units and electricity leakage sensors
for electric and hybrid-electric vehicles
as well as voltage conversion units for
idling stop systems, which are expected
to become standard equipment for
gasoline vehicles.
0
3
2
1
4
5
6
North
America
Asia
China
EU
Middle East,
Africa
South
America
Japan
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2011 FY2012
Worldwide automobile production
(unit basis)
(Millions)
utomobile
manufacturers.