Omron 2015 Annual Report Download - page 26

We Solve Societal Issues
● Stable growth in automobile demand; higher installation rates of electronic
automotive components in emerging markets
● Increase in electronic automotive components for safety and environmental
impact reduction
Market Growth
Drivers
● Development and production delivering high-quality electronic components
● Relationships of trust with a wide range of customers as an independent supplier
● Ability to work closely with customers to plan and develop products that anticipate
future car society needs
Strengths
Idle-off for better fuel efficiency
Stricter CO2 laws and rising consumer awareness of their own carbon footprint have driven improvements
in automobile fuel efficiency. One example is the popular idle-off function that has become a more visible
feature over the past few years. This function reduces the use of fuel when a driver stops their car, leading to
expected fuel efficiency gains of 5% to 10%, depending on individual driving patterns. However, electric
vehicles and hybrids can experience a dramatic drop in voltage once the car is restarted. This can interfere
with car audio and other electrical systems. To solve this problem, we invented a compact, high-function DC/
DC converter that provides stable voltage when starting after idle-off. Our business also produces a number
of other products that contribute to fuel efficiency and smaller carbon footprints, including electronic power
steering controllers, fuel pump modules,
high-output DC/DC converters for hybrid
vehicles, and more.
A more environmentally responsible car society 5% to 10%
Fuel efficiency gains
from idle-off technology
23%
Switches
(Power Window Switches,
Power Seat Switches, etc.)
25%
Motor Controllers
(Electronic Power Steering
Controllers, Power Sliding Door
Controllers, etc.)
52%
Other
(Passive Entry/Push-Button
Engine Start Systems,
Keyless Entry Systems, etc.)
Electronic Power Steering
Controllers
Power Window
Switches
16%
30
25
20
15
10
5
0
(Millions of units)
14 15*(FY) 16*18*19*
17*20*
Korea
South
America
Other
Asia
Japan
China
North
America
Europe
Segment Information
Development, manufacture, and sales of on-board
automobile electronic components
Automotive Electronic
Components Business (AEC)
* See notes on P. 43.
(Billions of yen)
FY2011 FY2012 FY2013 FY2014 FY2015
(Forecast)*
Net sales 85.0 97.6 126.6137.9140.0
Japan 28.9 30.2 28.425.920.0
Overseas 56.1 67.4 98.2112.0120.0
Americas 21.5 25.0 33.339.342.5
Europe 2.4 2.8 3.33.64.0
Asia Pacific 16.2 19.5 29.232.234.0
Greater China 9.5 13.9 25.429.932.0
Direct Exports 6.5 6.2 7.27.17.5
Operating income 2.7 5.0 9.19.29.3
Operating income margin 3.2%5.1%7.2%6.7%6.6%
R&D expenses 6.6 7.0 8.28.5
Depreciation and amortization 2.1 2.4 3.44.7
Capital expenditures 5.2 5.5 6.76.5
Fiscal 2015 Forecast and Strategies
Focus on North America and emerging economies;
new business projects for greater growth
We have set a target of ¥140 billion for fiscal 2015
net sales (1.5% year-on-year growth), with operat-
ing income scheduled to reach ¥9.3 billion (0.8%
growth). We expect domestic revenues to decline,
mainly due to bearish automobile demand. Looking
overseas, we forecast overall growth, supported by
strong North American markets. At the same time,
it is difficult to predict the direction of the econ-
omies of China and other Asian nations with any
certainty.
To drive growth under the EARTH-2 STAGE
(FY2017-2020) plan, we will focus on developing
products that solve new needs arising in our car
society. We will also look beyond products that an-
swer the stated needs of our clients, actively seeking
answers to future car society issues.
We intend to answer the challenges presented by
the goals set in Omron’s long-term vision (VG2020),
winning new projects and building a foundation for
a new stage of growth.
Revenues in Japan were down year on year, mainly
due to higher consumption taxes and slow demand
among certain customers.
Overseas, favorable exchange rates contributed
to sharply higher earnings compared to the prior
fiscal year. A strong U.S. economy drove revenues
in North America, while a more gradual recovery in
Europe still supported revenue growth in that region.
We found revenue gains in China and the nations of
Asia, pushed by slightly weaker—but still positive—
economic growth.
Revenue growth and the weakness of the yen were
two major factors contributing to significant operating
income gains overseas.
Fiscal 2014 in Review
Strong earnings in North America;
growth in China / Asia despite economic slowdown
■ Worldwide Automobile
Production
■ Earnings and Projections
Source: IHS Automotive
We expect notable growth in China.
Market Share
(FY2014)
Ratio of Total Sales
(FY2014)
Source: Internal survey
Body Control Units for
Miniature Vehicles (Japan)
Approx. 50%
* Forecast (as of May 2015)
■ Sales by Product (Fiscal 2014)
About Omron Where We’re Headed Corporate Value Initiatives Corporate Value Foundation Financial Section
48 OMRON Corporation Integrated Report 2015 49