Omron 2015 Annual Report Download - page 28

Increase in patients with lifestyle-related diseases in emerging countries
Market Growth
Drivers
Brand recognition, cooperative relationships with medical and research
institutions
Strengths
* See notes on P. 43.
(Billions of yen)
FY2011 FY2012 FY2013 FY2014 FY2015
(Forecast)*
Net sales 62.4 71.5 89.3100.6111.0
Japan 27.2 29.5 30.831.433.5
Overseas 35.2 42.0 58.569.277.5
Americas 9.8 10.8 14.318.624.5
Europe 13.0 15.9 21.021.218.5
Asia Pacific 2.9 3.5 5.56.68.0
Greater China 8.6 11.1 17.322.426.0
Direct Exports 0.9 0.7 0.40.50.5
Operating income 2.9 4.4 7.56.57.8
Operating income margin 4.7%6.2%8.5%6.5%7.0%
R&D expenses 5.1 5.0 5.25.5
Depreciation and amortization 1.5 1.9 2.33.3
Capital expenditures 2.8 3.1 3.93.9
Fiscal 2015 Forecast and Strategies
Expand our sales network in emerging economies
We have set a target of ¥111 billion for fiscal
2015 net sales and ¥7.8 billion in operating in-
come, representing 10.3% and 19.8% year-on-
year growth. We believe market growth in Japan
will be led by the rise of the status of women in
society and increasing interest among younger
consumers in personal preventive health care.
Overseas, new products in North America and our
fiscal 2014 acquisition of Brazilian nebulizer manu-
facturer NS Industria de Aparelhos Medicos Ltda.
should contribute significantly to earnings. At the
same time, we expect to see major revenue gains
in China and other Asian markets.
In newly emerging economies, changes in lifestyle
customs will mean rising levels of lifestyle-related
disease. While we cannot applaud the development,
we do expect this trend to drive higher demand for
lifestyle disease-related products and services. We
also plan to expand the number of outlets for our
global products in Asia, China, India, and Brazil. We
intend to grow from 380,000 outlets currently to
450,000 outlets by the end of fiscal 2016.
Net sales in Japan increased year on year overall,
despite higher consumption taxes on medical equip-
ment and lower medical reimbursements. For home-
use health and medical devices, massagers, and other
new products—as well as in-store promotions—were
all factors that contributed to strong earnings.
Overseas net sales increased sharply for the year,
due in part to a weaker yen on the global currency
markets. While revenues in Europe struggled to reach
parity with the prior fiscal year, the North American
market provided strong demand for our transcutaneous
electrical nerve stimulation equipment and other new
products. The emerging economies have been show-
ing increasing interest in personal health, which has
been a factor aiding revenue growth in those nations.
Despite revenue gains for the year, operating in-
come underperformed prior-year levels, mainly due
to advanced investment activity and dramatic fluctua-
tions in exchange rates during the second half of the
fiscal year.
Fiscal 2014 in Review
Introduction of new products and health awareness in emerging countries drive
higher revenues
■ Japanese Blood Pressure
Monitor Market (Electronics)
■ Earnings and Projections ■ Sales by Product (Fiscal 2014)
6%
Thermometers
5%
Body Composition
Monitors
5%
Patient Monitors
10%
Nebulizers
52%
Blood Pressure
Monitors
22%
Other
(Activity Trackers, etc.)
12%
6,000
4,500
3,000
1,500
0
(Millions of yen)
11
(FY) 12 13 14
Omron Competitors
Segment Information
We Solve Societal Issues
Acquisition of Brazilian nebulizer maker extends
our reach to respiratory patients throughout South America
In recent years, we have seen more cases of asthma, chronic obstructive pulmonary disease, and other
respiratory diseases in emerging countries due to pollution and smoking. We have been focused on
nebulizers for respiratory patients as the next core business after our blood pressure monitors. In October
2014, Omron acquired Brazilian nebulizer manufacturer NS Industria de Aparelhos Medicos Ltda.,
leapfrogging to the top share of the global market. Moving forward, we plan to speed up the process by
which we supply products to Brazil and throughout South America.
The acquisition of NS has made the manufacturing approval
process much quicker and easier. In the future, we plan to shift
more product development and manufacturing to Brazil, including
that of our blood pressure monitors and other products. We
believe Omron expertise combined with NS facilities will give us
a strong competitive advantage. We also intend to expand our
sales channels in emerging countries, delivering more health and
medical equipment to customers around the world.
Approx. 25%
Global share of the nebulizer
market (internal survey)
Treating respiratory diseases
Manufacture, sales, and services related to home-use/
institutional healthcare and medical devices
Healthcare Business
(HCB)
Market Share
(FY2014)
Ratio of Total Sales
(FY2014)
Source: Internal survey
Home-Use Blood Pressure
Monitors (Global Share)
Approx. 50%
Source: GfK
Slight weakening during fiscal 2014 due to higher
consumption tax rates.
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52 OMRON Corporation Integrated Report 2015 53