Omron 2015 Annual Report Download - page 42

¥70,655 for the prior year), while copper prices averaged
¥766 per kilo (compared to ¥757 for the prior year).
Selling, general, and administrative expenses rose
¥16.9 billion (9.3%) year on year. However, this increase
was generally in proportion to net sales when compared
to the prior year (23.4% for fiscal 2014 vs. 23.5% for
fiscal 2013). R&D expenses were level year on year,
falling to 5.7% of net sales, compared to a 6.2% mark for
the prior fiscal year.
Net Sales
Other Expenses (Income)
The Omron Group recorded a net amount of ¥0.8 billion
in other income, mainly from the sale of investment
securities. This was a ¥6.8 billion decrease year on year.
Review and Analysis of Consolidated Statements of Income
The Omron Group recorded ¥847.3 billion in net sales
for the year, which represented a ¥74.3 billion (9.6%)
gain year on year. Among the goals we set in our
EARTH-1 STAGE medium-term business plan, we made
particularly notable progress in the Existing Business
Strategy (strengthening of IA business), the Super-Global
Growth Strategy, and the New Business Strategy for
Optimization Society.
Looking at our performance by region, we see that
Greater China once again reported the greatest gains in
net sales and operating income. Japan struggled
to a 2.1% year-on-year decrease, mainly due to the impact
of higher consumption taxes on first-half performance. On
the other hand, the Americas, Europe, Greater China, and
Asia Pacific all reported higher revenues, with year-on-year
gains of 22.3%, 7.4%, 27.0%, and 14.9%.
Cost of Sales and SG&A Expenses
The Omron Group saw cost of sales rise 8.2% for the
fiscal year. This increase was mainly in line with revenue
gains, coming in at 60.7% in cost of sales ratio, just
0.8-points lower than the prior fiscal year. The average
per-kilo price of silver fell to ¥65,260 (compared to
Billions of yen
FY2013 Actual FY2014 Actual
Fixed manufacturing
cost increase
Operating income +18.5
+6.3
＋26.4
-4.1
-10.7
Gross profit +22.3
(Excluding forex and raw materials)
Net sales increase, added
value ratio improvement
68.1
Forex, raw
material costs
SG&A increase
R&D decrease 86.6
+0.6
■ Consolidated Operating Income Analysis (YoY)
Income before Income Taxes and Equity in
Earnings of Affiliates, Net Income Attributable to
Shareholders, and Profit Distribution
10 11 12 13 14
Production Shipments
Inventory
Source: Ministry of Economy, Trade and Industry
(FY)
50
200
150
175
100
125
75
■ Index of Electronic Parts and Devices
(Seasonally adjusted indices, 2010 average = 100)
■ Silver and Copper Prices ■ Exchange Rates
Copper [right axis]
Silver [left axis] (FY)
40,000
60,000
80,000
120,000
0
20,000
100,000
200
400
600
800
1,000
1,200
0
Yen/kg Yen/kg
10
11 1312 14
Yen
70
80
90
100
110
120
130
140
150
USD EUR (FY)
10 11 12 1413
Many economies around the world appear to be in
recovery to one degree or another. The Japanese
economy continued to improve throughout the fiscal
year, despite the negative impact of higher consumption
taxes on certain sectors. The European economy was
essentially flat for the year, while the U.S. continued to
recover, showing greater corporate activity and higher
personal consumption. China remains a powerhouse of
capital investment, mainly in the electronics components
industry. Both Thailand and Indonesia trended to a
moderate recovery, with the economy of Korea likewise
in recovery.
The Omron Group deals in many major markets
around the world. During fiscal 2014, the global
automobile market experienced strong capital
investment particularly so for components in markets
outside Japan. The machine tools and the smartphone
markets continue to grow, driving recovery in demand
for capital investment in these sectors, as well as for
semiconductors. We have also seen a gradual recovery
in capital investment for the consumer electronics and
electronic components markets, and strong demand
for related components in the world’s emerging
economies. While the medical devices market has
struggled somewhat due to the slowdown in the Russian
economy, demand from other emerging economies
remains strong.
Turning toward the currency markets, we saw that
the weakened yen contributed to the Group’s revenue
growth for the year. The average exchange rate for the
fiscal year was ¥110.0 to the U.S. dollar (a ¥9.9 increase),
and ¥138.7 to the Euro (¥4.7 increase). The average
per-kilo price for silver was ¥65,260, a ¥5,395 decrease
compared to the prior fiscal year. Copper cost an average
of ¥766 per kilo, which was a ¥9 increase compared to
the prior fiscal year.
Market Environment
Note: Segment operating income is prepared using the single-step method (which does not show individual income levels) based on U.S. GAAP. For
inter-company comparison, we have defined operating income as gross profit minus selling, general and administrative (SG&A) expenses and
research and development (R&D) expenses.
■ Net Sales and Income before Income
Taxes and Equity in Earnings
of Affiliates
■ Net Income Attributable to Share-
holders and ROE
■ Total Shareholders’ Equity and Ratio
of Shareholders’ Equity to Total
Assets
Income before income taxes and equity
in earnings of affiliates [right]
Net sales [left]
(FY)
10
11 1312 14
0
200
400
600
1,000
800
0
40
80
120
200
160
Billions of yen Billions of yen
847.3
87.4
617.8
41.7
619.5
33.5
650.5
41.2
773.0
62.0
The Omron Group recorded consolidated net sales of
¥847.3 billion for the fiscal year ended March 2015. This
represented a 9.6% year-on-year increase, mainly driven
by significant revenue gains in our Industrial Automation
Business. Operating income improved 27.2% year on
year, reaching ¥86.6 billion. This increase was again
mainly due to Industrial Automation Business revenues
and higher added value ratio. The Group reported income
before income taxes and equity in earnings of affiliates
of ¥87.4 billion (40.9% higher year on year) and net
income attributable to shareholders of ¥62.2 billion
(34.6% increase). In all, the Omron Group marked a third
consecutive year of revenue and profit gains, as well as
a second consecutive year of record earnings.
Total assets at the end of the period amounted
to ¥711.0 billion, which was 8.6% higher compared
to the end of the prior fiscal year. This increase was
mainly due to increases in cash and cash equivalents,
inventories, and other current assets. Acquisitions of
property, plant and equipment also contributed to this
total. Total shareholders’ equity was ¥489.8 billion at
the end of the period, up 13.8%. This increase was
mainly due to significant gains in net income attributable
to shareholders and fluctuations in foreign currency
translation adjustments. Our shareholders’ equity ratio
rose 3.1 points to 68.9% for the year-end.
Return on equity rose nearly 2 points, from 11.6% to
13.5%, while return on invested capital improved from
11.3% to 13.4%.
Overview of Consolidated Results and Financial Condition
0
25
50
75
0
5
10
15
Billions of yen （%）
62.2
13.5%
26.8
16.4
30.2
46.2
11.6%
8.8%
5.2%
8.7%
ROE [right]
Net income attributable to shareholders
[left]
(FY)
10
11 1312 14
Billions of yen
（%）
0
100
200
300
500
400
0
20
40
60
100
80
489.8
68.9%
312.8 320.8 367.0 430.5
55.6% 59.7% 64.0% 65.8%
Total shareholders’equity [left]
(FY)
10
11 1312 14
Ratio of shareholders’ equity to total
assets [right]
Fiscal 2014 Management’s Discussion and Analysis
The Omron Group reported income before income
taxes and equity in earnings of affiliates of ¥87.4 billion,
representing a ¥25.4 billion gain year on year. Net income
attributable to shareholders amounted to ¥62.2 billion, a
¥16.0 billion increase compared to the prior fiscal year.
80 OMRON Corporation Integrated Report 2015 81
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