Omron 2015 Annual Report Download - page 25

● Higher incomes in emerging economies leading to growth in demand for
consumer electronics and automobiles
● Needs for more functionality in consumer electronics resulting in demand for more
installed components
Market Growth
Drivers
Manufacturing capacity (product quality, cost-reduction activities, etc.)Strengths
■ Sales by Product (Fiscal 2014)
5
,000
4
,000
3
,000
2
,000
1
,000
0
20
15
10
5
0
(Billions of yen)(Billions of yen)
11
(FY) 12 13 14
Global shipments (left)
EMC consumer electronics sales (right)
Making gas appliances safer and more secure
Japanese laws require the installation of intelligent gas meters that automatically turn the flow of gas off
when a leak or major earthquake is detected. Pressure gas switches that detect gas leaks and vibration
sensors that detect earthquakes are two critical components that make using gas safer. These components
also play an important role in preventing secondary damages after an earthquake or other disaster. The
Electronic and Mechanical Components Business has manufactured pressure switches and vibration sensors
for more than 30 years—ever since these safety laws were introduced. We boast a 100%
* share of the
domestic pressure switch market, having sold more than 50 million units on a cumulative basis, and we
continue to develop technologies that improve the
capability of pressure switches and vibration sensors to
detect dangerous events. This is just one way that we
speed the recovery process and provide a lifeline to
citizens in times of emergency.
Pressure
Switch
Microcomputer
Board
Lithium-Ion Battery
Vibration
Sensor
Isolation
Valve
Intelligent Gas Meter
Metered Valve
100%
Share of the domestic pressure
switch market (internal survey)
Source: Internal survey
Relays (Global)
Approx. 20%
12%
29%
Other Electronic
Components
(Amusement Equipment,
Image Sensing, etc.)
71%
Relays, Switches,
Connectors
FPC Connectors
Power Relays for Printed Circuit Boards
Surface-Mounted
Switches
Image Sensing
Power Units for
Amusement Equipment
Segment Information
A lifeline in times of emergency
Manufacture and sales of electronic components
for consumer electronics, automobiles, mobile
devices, and amusement equipment
Electronic and Mechanical
Components Business (EMC)
Source: Japan Electronics and Information Technology
Industries Association
Fiscal 2014 EMC consumer electronics sales moved
higher, in step with global shipment increases.
■ Global Shipments of
Electronic Components
■ Earnings and Projections
* See notes on P. 43.
* Internal survey
(Billions of yen)
FY2011*FY2012*FY2013 FY2014 FY2015
(Forecast)*
Net sales 83.0 84.1 97.7103.9109.0
Japan 25.3 26.7 28.123.924.0
Overseas 57.7 57.4 69.680.085.0
Americas 13.2 13.1 16.618.119.0
Europe 12.9 11.3 14.715.915.5
Asia Pacific 7.6 7.1 8.710.112.0
Greater China 22.7 24.6 28.735.038.0
Direct Exports 1.3 1.4 0.90.90.5
Operating income 5.1 4.4 8.710.211.2
Operating income margin 6.2%5.2%8.9%9.8%10.3%
R&D expenses 5.5 5.2 6.05.4
Depreciation and amortization 7.2 7.4 7.88.0
Capital expenditures 9.9 8.9 10.99.5
Fiscal 2015 Forecast and Strategies
New businesses in new markets
We have set a target of ¥109 billion for fiscal 2015 net
sales (4.9% year-on-year gain), with operating income
scheduled to reach ¥11.2 billion (10.1% increase). Al-
though we have several new products in the pipeline,
we expect earnings in Japan to be level with the prior
year, reflecting sluggishness in certain sectors. Over-
seas, we plan on higher environment-related relay
sales and winning more demand in the automobile
industries of China and the Americas.
We forecast significant growth in the industries
that play to our strengths, including the automobile
and consumer electronics markets. We intend to
release new products that solve customer issues in
the medical and building automation sectors, which
represent new markets for us. We also have plans
to install more compact production lines. This in
turn will result in shorter lead-time from develop-
ment to mass production to market launch, allowing
us to respond quickly to changes in the markets and
customer expectations.
In Japan, revenues underperformed prior-year
levels. With the exception of consumer electronics,
sales of products and services to the consumer and
commercial products market were level year on
year. Higher consumption tax rates placed down-
ward pressure on demand for consumer electronics
and automobiles.
Overseas, favorable exchange rates continued
to have a positive impact on segment earnings. In
particular, we leveraged new projects to expand our
share of the Greater China consumer electronics
market, reporting strong earnings in the consumer
and commercial products sector. Sales to the con-
sumer and commercial products sector in the Amer-
icas and Europe were likewise strong, while steady
demand for products in the automobile industry also
contributed significantly to earnings in Asia.
Higher revenues and ongoing cost-reduction
measures, along with favorable exchange rates,
helped push operating income higher.
Fiscal 2014 in Review
Strong performance in sales to the consumer and
commercial products, automobile industries
Market Share
(FY2014)
Ratio of Total Sales
(FY2014)
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46 OMRON Corporation Integrated Report 2015 47