Omron 2016 Annual Report Download - page 86

Download and view the complete annual report

Please find page 86 of the 2016 Omron annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 102

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102

Fiscal 2015 in Review
Omron Group net sales for fiscal 2015
amounted to ¥833.6 billion, a 1.6% decline
compared to fiscal 2014. Operating income
amounted to ¥62.3 billion, a decline of 28.1%.
Operating income margin fell to 7.5% (2.7-point
decline), while net income attributable to
shareholders amounted to ¥47.3 billion, a
23.9% drop-off.
　The global economy benefited during the first
half of fiscal 2015 from strong demand for
capital investment, particularly in the U.S. and
the EU. During the second half of the year,
however, the Chinese economic slowdown and
rapid appreciation of the yen led to concerns
about the future direction of world economics.
Reflecting this environment, our Industrial
Automation Business, Automotive Electronic
Components Business, and Healthcare
Business recorded ongoing revenue growth. On
the other hand, we experienced significant
revenue declines in our Other Businesses
segment. Looking toward long-term,
sustainable growth, our mainstay Industrial
Automation Business acquired two companies
during the year. We believe these companies
will provide a springboard for future expansion.
At the same time, the segment incurred higher
R&D expenses and other costs related to up-
front investments for the future. These
transactions had an impact on overall profits for
the Group. This performance marked a year-on-
year decline in revenues and profits for the first
time in seven years.
Consolidated Results
Review of Consolidated Statement of Income
Omron Group net sales for fiscal 2015 fell to
¥833.6 billion, down ¥13.6 billion from the
prior year (1.6%). This decrease was due to
several dramatic changes in the business
environment, including slowing demand in the
solar power and smartphone markets and
weak growth in the Chinese economy. By
region, net sales in Greater China amounted to
¥162.5 billion, an ¥18.4 billion (10.2%)
decrease. This decline was a significant drag on
overall Group revenues. On the other hand,
stable growth in the Americas led to strong
demand for capital investment in the
automobile and other industries. Southeast
Asia and other emerging economies also
showed strengthening demand for capital
investment, as well as ongoing growth in
markets for healthcare and medical devices.
The strength in these regions combined to
support overall revenue performance
throughout the year.
Gross profit margin for fiscal 2015 was down
0.8 point to 38.5%. This decline was mainly
due to the impact of a stronger U.S. dollar, a
weaker Euro, and weaker currencies among
emerging economies. Controlling for these
variables, raw materials costs, and other
external factors shows that gross profit margin
would have actually improved year-on-year.
Selling, general and administrative expenses
were ¥205.7 billion, up ¥7.6 billion from the
prior year (1.3-point increase in comparison to
net sales). This increase was mainly due to
acquisitions and post-acquisition costs incurred
to integrate these new entities into the Omron
Group. R&D expenses amounted to ¥52.8
billion, up ¥4.9 billion (0.6-point increase in
comparison to net sales). This increase was
mainly due to up-front investment for future
growth on the part of the Industrial Automation
Business.
Net Sales Gross Profit Margin, SG&A Expenses and
R&D Expenses
84 OMRON Corporation