Omron 2014 Annual Report Download - page 43

82 Omron Corporation Integrated Report 2014 83
Industrial Automation Business (IAB)
In Japan, IAB suffered from generally sluggish capital
investment demand during the first half of fiscal 2013.
In the second half of the year, however, recovery was
seen centered on the semiconductor and electronic
component industries. Sales of new products also
contributed to performance, and full-year domestic
sales were up accordingly. Overseas, the impact of
political unrest and currency devaluation in certain Asian
countries resulted in low demand related to electronic
component industries in China and reduced demand
for exports from China. Conversely, the Americas saw
second-half recovery in factory automation demand
and in oil and gas related businesses. South Koreas
semiconductor, flat panel display, and automobile
industries also experienced strong demand. As a
result of these factors as well as the influences of yen
depreciation, full-year sales increased substantially in all
overseas areas.
Due to the aforementioned, IAB net sales increased
by 10.9% year on year, to ¥291.7 billion, and operating
income rose by 23.6%, to ¥38.8 billion.
Electronic and Mechanical Components Business (EMC)
In Japan, sales of relays and switches to the consumer
electronics industry were strong as a result of recovery
in the domestic economy, the intense heat seen during
the first half of fiscal 2013, and the demand rush
preceding the consumption tax hike. As a result, full-
year domestic sales were up. Overseas, mobile device
demand was solid in China and South Korea, and we
were able to expand our market share to consumer
electronics manufactures in these countries. Also,
demand for consumer and commercial products was
robust in the Americas. Coupled with the influences of
yen depreciation, these factors led to a large increase in
overseas sales.
Due to the aforementioned, EMC net sales increased
by 16.2% year on year, to ¥97.7 billion, while operating
income soared by 98.9%, to ¥8.7 billion, due to the
success of ongoing cost reduction measures.
Automotive Electronic Components Business (AEC)
In Japan, certain customers relocated manufacturing
operations overseas. The impacts of this trend offset
the benefits of government stimulus measures, on
going tax breaks for eco-friendly automobiles, and the
demand rush that preceded the consumption tax hike.
AEC sales were down in Japan accordingly. Overseas,
demand recovery accelerated in North America, and
the scale of China and other Asian markets continued to
expand. As a result, sales were favorable in all overseas
areas.
Due to the aforementioned, AEC net sales increased
by 29.7% year on year, to ¥126.6 billion, and operating
income grew by 81.4%, to ¥9.1 billion, due to the
benefits of yen depreciation.
Social Systems, Solutions and Service Business (SSB)
In the railway infrastructure business, brisk replacement
demand for railway infrastructure equipment was seen
due to recovered 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
solid demand for traffic control systems and solutions
for preventing facility deterioration. Robust demand
for the environmental solutions businesss solar power
related products resulted in strong sales, and increased
sales of related installation services also contributed to
improved performance.
Due to the aforementioned, SSB net sales rose by
20.3%, to ¥82.7 billion, and operating income jumped by
90.5%, to ¥5.6 billion.
FY2010 FY2011 FY2012 FY2013
Net sales 100.0%100.0%100.0%100.0%
Cost of sales 62.5 63.2 62.961.5
Gross profit 37.5 36.8 37.138.5
Selling, general and administrative expenses 23.0 23.5 23.423.5
Research and development expenses 6.7 6.8 6.76.2
Other expenses, net 1.1 1.1 0.70.8
Income before income taxes and equity in earnings of affiliates 6.7 5.4 6.38.0
Income taxes 2.3 2.9 2.22.5
Net income attributable to shareholders 4.3 2.6 4.66.0
Net Sales
In fiscal 2013, the Company advanced the core
strategies of the maximization of the Industrial
Automation (IA) business, growth in emerging markets,
the completion of profit structure reforms, and global
human resources strengthening. The Group also
implemented measures targeting medium-to-long-
term earnings improvements. As a result, sales in
emerging countries increased, and net sales were up by
¥122.5 billion year on year, or 18.8%, to ¥773.0 billion,
accordingly.
By region, sales grew by 8.4% in Japan, by 25.6%
in the Americas, by 25.5% in Europe, by 34.0% in
the Greater China region, and by 31.8% in the Asia
Pacific region. Performance in the Greater China region
continued to lead other overseas segments in terms of
both net sales and operating income.
Cost of Sales and SG&A Expenses
Cost of sales increased by 16.3% year on year
following higher net sales, while the cost of sales ratio
declined by 1.4 percentage points, to 61.5%. In fiscal
2013, the average price per kilogram of silver was
¥76,713, lower than the level of ¥83,042 seen in
the previous fiscal year. The average price per kilogram
of copper, conversely, rose, to ¥733 from ¥686 in
fiscal 2012.
SG&A expenses increased by ¥28.5 billion, or
18.7%, from the previous fiscal year, but the SG&A-
to-sales ratio remained relatively unchanged at
23.5%. At the same time, R&D expenses were up
by ¥4.4 billion, or 10.2%. This increase was due
to the Companys strategy of steadily conducting
investments as necessary for future growth. The
R&D-to-sales ratio, however, declined from the
previous fiscal years 6.7%, to 6.2%.
Other Expenses
Other expenses, net, rose by ¥1.9 billion year on year,
to ¥6.0 billion, due to an increase in foreign exchange
loss, net.
Income before Income Taxes and Equity in Earnings
of Affiliates, Net Income Attributable to Shareholders,
and Profit Distribution
As a result of the previously mentioned factors,
income before income taxes and equity in earnings of
affiliates amounted to ¥62.0 billion, up by ¥20.8 billion
from ¥41.2 billion recorded in the previous fiscal year.
Likewise, net income attributable to shareholders was
¥46.2 billion, up by ¥16.0 billion from the previous
years ¥30.2 billion. Basic net income attributable to
shareholders per share rose from ¥137.2 in fiscal 2012
to ¥209.8 in fiscal 2013.
The Companys basic policy for dividend
payments is to secure sufficient internal capital
resources for future growth while stably and continually
improving shareholder returns. Specifically, the target
dividend payout ratio was raised to more than 25% in
fiscal 2013, and a ratio of 30% will be targeted for fiscal
2016. The target for the dividend on equity (DOE) ratio
will remain at 2% for the foreseeable future.
In accordance with this policy, the Company paid a
total annual cash dividend of ¥53.0 per share, ¥16.0
per share higher than in the previous fiscal year. The
consolidated dividend payout ratio was 25.3%, and the
DOE ratio was 2.9% in fiscal 2013.
Billions of yen
FY2012
Actual
FY2013
Actual
Fixed manufacturing
costs increase SG&A
increase
(including strategic
investment)
R&D
increase
Operating income increase ¥22.8 billion
45.3
+20.6
＋25.7
–7.1
–13.3
68.1
45.3
Gross profit up ¥18.6 billion
(excluding forex and raw materials)
Forex, raw
material costs
Net sales increase,
GP margin improve
–3.1
■ Consolidated Operating Income Analysis (YoY)
■ Costs, Expenses, and Income as Percentages of Net Sales
1. Review of Operations by Business Segment
Notes: 1. Segment operating income is prepared using the single-step method (which does not show individual income levels) based on U.S. GAAP.
For easier comparison with other companies, operating income represents gross profit minus SG&A expenses and R&D expenses.
2. In segment information, sales represent sales to external customers and exclude intersegment transactions. Conversely, operating income
includes income from intersegment transactions before deductions of headquarters expenses and other non-apportionable amounts.
Review and Analysis of the Consolidated Statements of Income
Segment Information
■ Dividends per Share
9.3%
18.4%
13.1%
13.1%
46.1%
16.3%
8.5%
12.1%
49.6%
16.3%
8.4%
12.4%
12.4%
50.5%
東南アジア他
中華圏
欧州
北米
日本 *直接輸出含む
09 10 11 12 13 （FY）
0
10
20
40
50
60
30
Yen
17
30 28
37
53
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