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Integrated Report 2014
OMRON Corporation
Integrated Report 2014
Year ended March 31, 2014

Table of contents

  • Page 1
    Integrated Report 2014 Year ended March 31, 2014

  • Page 2
    ... train station system 1972 Japan' s first welfare factory (Omron Taiyo Electronics Co.) 1990s Blood pressure monitor for overseas market 2011 PV inverter that eliminates installation limits on solar power generation systems Sustainable Growth Long-Term Management Strategy G' 90s GD2010 GLOBE...

  • Page 3
    ...Corporation Integrated Report 2014 CONTENTS Corporate Value Initiatives About Omron 38 At a Glance Omron through the Year Industrial Automation Business (IAB) Electronic and Mechanical Components Business (EMC) Automotive Electronic Components Business (AEC) Social Systems, Solutions and Service...

  • Page 4
    ...Greater China 18.4% ¥142.4 billion Fiscal 2013 Japan Net Sales by Region 44.6% ¥344.8 billion ¥ 773.0 billion % Europe ¥ 773.0 billion Americas Corporate Value Foundation 16 13.1% ¥126.6 billion 13 % ¥100.9 billion ¥97.7 billion Automotive Electronic Components Business (AEC...

  • Page 5
    ...We re Headed EMC Printed Circuit Board Power Relays Printer Toner Sensors P.44 OKAO Vision Facial Image Sensing Technology FPC Connectors Surface Mount Switches Power Supply Units for Amusement Devices Corporate Value Initiatives Transmitter Key and Engine Start Systems Automotive Switches...

  • Page 6
    ... (February 2009 to March 2011) Revised 3rd-stage targets due to an abrupt change in the business environment, implemented cost reductions, and spun off Automotive Electronic Components Business and Social Systems, Solutions and Service Business FY2008 - FY2010 3rd Stage Achieving a Growth Structure...

  • Page 7
    ... three years to fiscal 2016. Ratio of Overseas Sales to Net Sales Japan Greater China Billions of yen 55.4 Europe Direct Exports 617.8 619.5 % Capital Expenditures ¥ Capital expenditures 33.7 28.3 28.3 billion Corporate Value Foundation Americas Asia Pacific Depreciation and amortization...

  • Page 8
    ... Omron 2020" environmental management vision and formulated its fiscal 2020 environmental targets in 2011. Green Omron 2020 Environmental Targets (The Omron Group s Environmental Targets for Fiscal 2020) 1. Improve carbon productivity by 30% compared with the fiscal 2010 level on a global basis...

  • Page 9
    ... Compensation Advisory Committee Fumio Tateishi Chairman of the Board Member of the CEO Selection Advisory Committee Yoshihito Yamada President and CEO Yoshinori Suzuki Executive Vice President and CFO Member of the Personnel Advisory Committee 14 Omron Corporation Integrated Report 2014 15

  • Page 10
    ... STAGE Providing new value through new business fields VG 2020 Goals (fiscal 2020 ) Financial Section Net sales over ¥ 1trillion July 2014 Operating income over ¥ 150 billion Operating income margin Yoshihito Yamada President and CEO 15% Integrated Report 2014 17 16 Omron Corporation

  • Page 11
    ... corporate value. In regard to growth potential, sales increased greatly in targeted areas, such as emerging countries and environmental fields. Furthermore, the Automotive Electronic Components Business (AEC), the Social Systems, Solutions and Service Business (SSB), the Healthcare Business...

  • Page 12
    ...-term targets *3 Assumed exchange rates: USD1 = ¥100, EUR1 = ¥135 ¥53 ― 3-Year TSR*4 (Total Shareholder Return) *4 Total shareholder return is calculated on the assumption that dividends are not reinvested in additional share purchases. 20 Omron Corporation Integrated Report 2014 21

  • Page 13
    ... special importance on our corporate "Working for the benefit of society," as core value, "At work for a better well as our corporate motto, In our management life, a better world for all." principles, we value innovations driven by social s spirit. The OMRON needs and a challenger' Global Awards...

  • Page 14
    ... sales channels in the ASEAN region, India, South Korea, and other parts of Asia to develop operations in these areas into a core business pillar alongside those in China. In addition, we will accelerate new business development in the industrial, social, lifestyle, and environmental fields. Omron...

  • Page 15
    ... cost of sales % of overseas production Total number of staff in Japan Overseas variable cost vs. hedge target rate Gross profit margin SG&A margin Operating income margin Non-operating profit/loss ROS About Omron ROI / Impairment risk Where We' re Headed Effective tax rates Inventory (months...

  • Page 16
    ... ongoing improvements in efficiency. Where We' re Headed Nigel Blakeway OMRON MANAGEMENT CENTER OF AMERICA, INC. Corporate Value Initiatives Corporate Value Foundation Financial Section Mexican manufacturing company established in February 2012 28 Omron Corporation Integrated Report 2014 29

  • Page 17
    ... markets as well as in post-merger integration (PMI). According to Blakeway, "A huge part of PMI is just how to integrate the right mind-set and the right code of conduct into the Omron world." Luckily, problems are rarely faced in communicating the Omron Principles within North America. However...

  • Page 18
    ... as it embarks on the EARTH-1 STAGE, which targets ongoing growth and social contributions. OMCA will support and guide businesses in the Americas to nurture them into integral parts of Omron' s global operations. Closing with Blakeway ' s own words, "We have delivered in the GLOBE STAGE what...

  • Page 19
    ... development process innovation, we aim to greatly enhance technology development efficiency in order to be able to create new products with overwhelming speed 9. Digital Engineering *1 Common, Module, Option 10. CMO*1 Method and Development Processes 34 Omron Corporation Integrated Report 2014...

  • Page 20
    Special Feature 2 More Advanced New Technological Applications for Resolving Social Issues OMRON TOTAL FAIR Held in China: Latest Technologies for the Chinese Market Pursing growth in emerging markets is one of the basic strategies of VG2020, and China is positioned as a particularly crucial ...

  • Page 21
    ... 12 13 14 (Forecast) 9 6 3 0 6 4 2 0 (FY) 5 .2 3 .6 2.1 2.0 2.1 2.1 5.5 2 .4 6 3 0 (FY) Corporate Value Initiatives 10 11 12 13 14 (Forecast) (FY) 10 09 10 11 12 13 09 10 11 12 13 Social Systems, Solutions and Service Business â- Net sales Billions of yen 100 â- Operating...

  • Page 22
    ... spread knowledge about cutting-edge FA technologies inaugurated in India following establishment of centers in Japan, China, Europe, and the United States. http://www.omron.com/media/ press/2014/04/c0423.html Where We re Headed Corporate Value Initiatives 2013 2014 April Product-Related Topics...

  • Page 23
    .... About Omron Where We re Headed Corporate Value Initiatives Europe China Japan Asia Pacific America Corporate Value Foundation Yutaka Miyanaga Senior Managing Officer Company President, Industrial Automation Company Sales base Automation Center* Wide range of products Global business sites...

  • Page 24
    ... Printed Circuit Board Power Relays 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY2012 FY2013 Global [left axis] Japan [left axis] EMC Products for Consumer Electronics [right axis] 0 Surface Mount Switch FPC Connectors Image Sensing Source: Japan Electronics and Information Technology Industries Association...

  • Page 25
    ... Components Business (AEC) Production and sales of electronic components for automobiles Fiscal 2013 in Review FY2013 Business Strategy and Outlook for Fiscal 2014 16% Body Control Units for Miniature Vehicles (Japan) We will transform into a value-creating company and strengthen our management...

  • Page 26
    ... of yen) Number of Rail Transport Passengers Per Month (year on year change) FY2011 FY2012 FY2013 FY2014 (Forecast) 3 Private Railways Breakdown of Sales by Product Line (Fiscal 2013) FY2010 Net sales Japan Overseas Americas Europe Asia Pacific Greater China Direct exports Operating income...

  • Page 27
    ...healthcare and medical devices and services for homes and medical institutions Fiscal 2013 in Review FY2013 Business Strategy and Outlook for Fiscal 2014 11% Home-Use Blood Pressure Monitors (Global) We will expand sales networks centered on emerging countries. In fiscal 2014, HCB is targeting...

  • Page 28
    ... system, the Environmental Solutions Business is working to increase sales of and its market share for PV inverters in Japan. In collaboration with SSB, we are aiming to further expand our energy-creation business, for example by undertaking monitoring services that support the long-term, stable...

  • Page 29
    ... data RF tag Reader/writer automotive electronic components, items that are created using Omron s unique technologies. FY13 Result New OMR plant, completed in August 2012 FY16 Target Approx. ¥10.0 billion Approx. ¥5.0 billion Reader/writer RF tag 54 Omron Corporation Integrated Report 2014...

  • Page 30
    ... 135/85mmHg Hypertension diagnosis based on blood pressure levels at home the AICOT ® technology, aiming for faster proliferation of solar power generation systems. KP-K series (indoor-use) KP-M series (outdoor-use) KP-R series (outdoor-use) 56 Omron Corporation Integrated Report 2014 57

  • Page 31
    ... as human rights, the environment, diversity, and community relations in a way that draws on Omron' s distinctive strengths. Society Environment Supporting advancement of females KPI: Percentage of female managers P.60 - 63 Corporate Value Initiatives Always demonstrate fairness and integrity in...

  • Page 32
    ... April 2012 Percentage of female managers April 2014 April 2018 (Plan) 1.4% 1.8% 5% level Currently, Japan legally requires companies to maintain a ratio of employees with disabilities to total employees of at least 2 . The Omron Group, including OMRON Taiyo Co., Ltd. (a specially certi...

  • Page 33
    ... TOGA Omron pledges to create tangible value on a global scale by facilitating the efforts of all employees to practice the Omron Principles. About TOGA 1 Region Japan Greater China South Korea Asia Pacific Americas Entries TOGA by Numbers Number of Entries and Participants by Region (Fiscal 2013...

  • Page 34
    ... the environmental impact of its production sites have been highly evaluated on a global scale, with the Company recently receiving the Grand Prize for the Global s Hibiscus Award in Malaysia. Environment Award in Japan and the Prime Minister' About Omron Improving Productivity and Saving Energy...

  • Page 35
    ...external organizations and through other means. Omron' s basic policy is to fortify corporate governance based on the belief that the most crucial factor in earning stakeholders' support is building an optimal management structure and conducting fair business operations while enhancing the mechanism...

  • Page 36
    ... of the Board of Directors monitors business execution activities as a representative of the Company' s stakeholders. Furthermore, Omron has established the Personnel Advisory Committee, the CEO Selection Advisory Committee, the Compensation Advisory Committee, and the Corporate Governance Committee...

  • Page 37
    ... to make monthly s stock (through the officers' stockholding association) and hold this stock during their term of office. purchases of the Company' *2 The performance-linked stock acquisition rights are issued with charge at a price equivalent to the fair value of the stock acquisition rights, thus...

  • Page 38
    ... from the corporate headquarters and business companies as well as from overseas regional head offices. In addition, we have appointed risk managers to take charge of compliance and risk management at all Omron Group companies around the world, and we are utilizing our global network to quickly...

  • Page 39
    ... with Osaka Bar Association; Joined Miyake Law Office (now Miyake & Partners) Partner (to present) Registered as patent attorney with Japan Patent Attorneys Association Audit & Supervisory Board Member (Independent) of Omron (to present) June 2013 74 Omron Corporation Integrated Report 2014 75

  • Page 40
    ...SOCIAL SOLUTIONS Co., Ltd. Takashi Kitagawa Senior General Manager, Board of Directors Office Nigel Blakeway Chairman, President and CEO, OMRON MANAGEMENT CENTER OF AMERICA, INC., and Chairman and CEO, OMRON ELECTRONICS, LLC. Masahiko Tomita General Manager, Corporate Planning Department, Global...

  • Page 41
    ... 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, 2014, of ¥103 = $1. Financial Section 78 Omron Corporation Integrated Report 2014...

  • Page 42
    ...Industrial Automation Business (IAB) Electronic and Mechanical Components Business (EMC) Automotive Electronic Components Business (AEC) Social Systems, Solutions and Service Business (SSB) Healthcare Business (HCB) Other Businesses Elimination and Corporate Costs and expenses: Cost of sales Selling...

  • Page 43
    ... performance by railway companies and the pre-consumption tax hike demand increase. In addition, safety and security solutions centered on remote monitoring systems performed well, leading to increased sales. In the traffic control and road control systems business, performance was supported by...

  • Page 44
    Healthcare Business (HCB) In the home-use healthcare and medical device field in Japan, sales of mainstay blood pressure monitors and thermometers proved favorable, and we worked to stimulate new demand through the introduction of new products. Performance was also strong for use in medical ...

  • Page 45
    ... 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 its international sales offices. To ensure continued manufacturing stability, the Company has established and is executing...

  • Page 46
    ...637 430,509 2,269 432,778 ¥654,704 4,179,699 Corporate Value Foundation 22,029 4,201,728 $6,356,350 U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2014, of ¥103 = $1. Financial Section 88 Omron Corporation Integrated Report 2014 89

  • Page 47
    ... translations of Japanese yen at the approximate exchange rate on March 31, 2014, of ¥103 = $1. U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2014, of ¥103 = $1. Financial Section 90 Omron Corporation Integrated Report 2014 91

  • Page 48
    ... OMRON Corporation and Subsidiaries Years Ended March 31, 2012, 2013 and 2014 Consolidated Statements of Cash Flows OMRON Corporation and Subsidiaries Years Ended March 31, 2012, 2013 and 2014 Millions of yen Thousands of U.S. dollars Millions of yen Number of common shares issued Common stock...

  • Page 49
    ...draw on feedback of stakeholders to help formulate various management strategies. The Securities Analysts Association of Japan presented the Company with the 2013 Award for Excellence in Corporate Disclosure in the Electric / Precision industry category, selecting Omron as No. 1 from among 23 other...

  • Page 50
    ... Bank, N.A. Head Office Shiokoji Horikawa, Shimogyo-ku, Kyoto 600-8530, Japan Tel: +81-75-344-7000 Fax: +81-75-344-7001 Overseas Headquarters Europe OMRON MANAGEMENT CENTER OF EUROPE (The Netherlands) North America OMRON MANAGEMENT CENTER OF AMERICA (Illinois) Brazil OMRON MANAGEMENT CENTER OF...

  • Page 51
    Printed in Japan