Omron 2015 Annual Report Download - page 14

“Driving corporate value through
the Omron Principles”
2. Return on Invested Capital1. Revised Principles and Created Management Philosophy
Management Philosophy
We believe a business should create value for society through its key practices.
We are committed to sustainably increasing our long-term value by putting
Our Mission and Values into practice.
● We uphold a long-term vision in our business practices to create
solutions to society’s needs.
● We operate as a truly global company through our fair and transparent
management practices.
● We cultivate strong relationships with all of our stakeholders through
responsible engagement.
■ FY2014 Results (Management Indicators)
FY
2013
Actual FY
2014
Actual Change
Net sales (¥ billion) 773.0847 .3+9.6%
Gross profit margin 38.5%39.3%+0.8P
Operating income margin 8.8%10.2%+1.4P
ROIC 11.3%13.4%+2.1P
ROE 11.6%13.5%+1.9P
EPS (¥) 209.8283.9+74.1
USD rate (¥) 100.1110.0+9.9
EUR rate (¥) 134.0138.7+4.7
*1 See P. 32 for more.
To succeed and grow at the highest levels,
a company must have a clear mission and
inspiring values. But, it’s not enough to simply
have a mission and values. Every employee
must believe in what the company is trying
to accomplish, putting their commitment into
everyday practice.
In
1959, our founder created our Corporate
Motto. In the half-century since that time, the
line of successive Omron leadership has held
true to the spirit of this Corporate Motto, relying
on the Omron Principles to bind the company
together and to guide our management
decisions. For Omron, our Principles drive us
to become a stronger, better company, while
at the same time they serve as the engine that
supports our ongoing growth.
In May 2015, we revised the Omron
Principles for the first time in nine years.
Return on invested capital (ROIC) is an
important indicator that shows how effectively
a company uses its capital to offer value to
society. This indicator also shows how well
a company meets the expectations of its
shareholders.
At Omron, our businesses operate across
a wide range of formats, from business-to-
business to business-to-consumer. Using ROIC
as a yardstick provides an effective, fair means
for management to measure the performance
of these diverse businesses. Today, we
manage Omron as a portfolio of businesses,
each responsible for delivering return on
invested capital. The Down-Top ROIC Tree is
the tool we use to establish and execute on
key performance indicators tied directly to the
front lines of our businesses. As a result, we
achieved an ROIC in excess of 13% for fiscal
2014, delivering our fiscal 2016 target two
years ahead of schedule.
In January 2015, the Tokyo Stock Exchange
recognized Omron for this initiative, honoring
us as the Grand Prix recipient of the Corporate
Value Improvement Award. This award is the
highest recognition given by the Tokyo Stock
Exchange, which selects only one firm each
year from among the 3,400 publicly traded
companies on the exchange.
Our next challenge is to deliver even higher
levels of quality through our front-line activities.
We must communicate our values more
effectively to all employees, regardless of their
place in the company or knowledge of financial
management concepts.
During February 2015, we began a company-
wide education project led by our accounting
and finance department. Management by
ROIC 1.0 was the original name we gave to
this quantitative approach using Down-Top
ROIC Tree. Now we are operating under
Management by ROIC 2.0*1, upgrading and
accelerating this program of management by
key indicators. We believe this approach will
help us continue to improve at the front lines
of our businesses.
3. FY2014 Results
Fiscal 2014 was our third consecutive year
of higher revenues and profits, as well as our
second consecutive year of record earnings.
Our mainstay Industrial Automation Business
Corporate Value Improvement Award Presentation Ceremony
We believe this revision now clearly
communicates Our
Mission and Our Values
in a way that resonates with and inspires
every employee worldwide. This revision
reaches out to the very front lines of our
businesses to help us all focus on the same
goals, working together to achieve the long-
term vision outlined in our Value Generation
2020 (VG2020) business plan.
We view this as an opportunity to make
a deeper connection with our roots, while
looking forward to sustained growth toward
2020 and beyond. At the same time, we
have created our
Management Philosophy ,
declaring to our stakeholders our stance and
approach in carrying out our business based
on the Omron Principles.
As always, our ultimate mission remains: To
improve lives and contribute to a better society.
Integrated Report 2015 25
24 OMRON Corporation
About Omron Where We’re Headed Corporate Value Initiatives Corporate Value Foundation Financial Section