Omron 2004 Annual Report Download - page 35

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Non-operating Profit and Loss
Net non-operating loss came to ¥3,419 million, for a substantial
¥24,162 million improvement over the loss recorded in the previous
year. The main factor was elimination of the fiscal 2002 one-time loss-
es, i.e., structure restructuring expenses such as for the early retire-
ment program.
Net Income before Income Taxes and Net Income
As a result of the foregoing, net income before income taxes, minority
interests, and the cumulative effect of accounting change, increased
to ¥47,984 million, up from ¥4,732 million for the previous year.
Similarly, net income rose to ¥26,811 million, up from ¥511 million.
Net income per share (basic) was ¥110.7, a huge leap from ¥2.1 of
the previous fiscal year. Based on its profit distribution policy, the
Omron Group increased its fiscal 2003 ordinary cash dividend to
¥13.0 in consideration of the current and previous fiscal year results,
and declared a ¥7.0 special cash dividend to commemorate its 70th
anniversary, for a total dividend of ¥20.0 for the fiscal year under
review.
SEGMENT INFORMATION
1. Review of Operations by Business Segment
From fiscal 2003, the Automotive Electronic Components Business
(AEC) was classified separately from the Electronic Components
Business (ECB). The following year-on-year changes in segment sales
have been calculated, using the figures after the reclassification.
moted the introduction of IT in manufacturing industry and the provi-
sion of total solutions to enable customers to improve the quality of
their products. As a result, sales rose substantially for base inspection
systems, displacement sensors, vision sensors, motion controllers,
and safety-related products.
Overseas, sales were generally strong in North America, while we
managed to increase sales in Europe amid the challenging business
environment of euro strength and stagnant capital investment by rein-
forcing our marketing efforts. Sales expanded substantially in
Southeast Asia and China as well, due to expanded direct marketing,
enhancement of sales channels, and stronger efforts on social infra-
structure.
• Electronic Components Business (ECB)
Sales of ECB rose 12.1 percent year-on-year in fiscal 2003, to
¥88,988 million, accounting for 15.2 percent of consolidated net sales.
Despite negative factors such as intensified price competition and
lower retail prices, we expanded sales centered on consumer elec-
tronics and products for the telecommunications industry by offering
value-added products utilized our technological edges. In particular,
sales of backlights for cellular phones, originally introduced in fiscal
2001, doubled compared to the previous fiscal year. Narrow pitch
flexible print circle (FPC) connectors for cellular phones, produced
using ultra-precision 3D fabrication and replication technology, also
showed consistent sales growth, as did cellular phone LED light mod-
ules. Sales of base station relays also increased substantially, due to
rapid expansion of the telecommunications infrastructure markets in
China and Europe.
Note that from fiscal 2003, ECB transferred its electrical and elec-
tronic parts for the automobile business to AEC.
• Automotive Electronics Business (AEC)
Sales of AEC fell by 1.1 percent year-on-year to ¥58,824 million, and
accounted for 10.1 percent of consolidate net sales in the year under
review. Although production in the domestic auto industry was flat on
a unit basis, AEC increased its sales through launching of new prod-
ucts such as laser radars, electronic power steering controllers, and
door lock controllers. These new products are now positioned to fuel
future sales growth. In North America, output reductions centered on
the Big Three were compounded by the weakness of the U.S. dollar
as well as severe price competition in areas such as on-board relays,
resulting in a difficult market environment. The markets in Europe,
Korea, and Asia, however, recorded relatively solid performance.
Sales of on-board relays to European electronic component manufac-
turers showed especially significant gains.
• Social Systems Business (SSB)
Sales of SSB rose 16.6 percent year-on-year to ¥135,997 million,
accounting for 23.3 percent of consolidated net sales. Domestically,
IAB . . . . . . . . . . . . . . . . . . . . . . . .
ECB . . . . . . . . . . . . . . . . . . . . . . .
AEC . . . . . . . . . . . . . . . . . . . . . . .
SSB . . . . . . . . . . . . . . . . . . . . . . .
HCB . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . .
37.8%
14.8%
11.1%
21.8%
7.9%
6.5%
39.3%
15.2%
10.1%
23.3%
8.0%
4.2%
FY2002
FY2003
Sales Breakdown, by Business Segment
• Industrial Automation Business (IAB)
Sales of IAB for the fiscal year under review rose 13.4 percent year-
on-year against a background of global economic recovery, reaching
¥229,638 million and accounting for 39.3 percent of consolidated net
sales. Various types of control equipment, especially for the semicon-
ductor and flat panel display (FPD) industries, experienced significant
growth, and demand from the automotive industry was also relatively
strong. In terms of applications, sales related to equipment quality,
safety, and the environment registered major increases.
Domestically, IAB reinforced its marketing efforts in industries manu-
facturing products such as semiconductors, FPDs, electronic compo-
nents, and automobiles, seeking to maintain a firm grip on the demand
for digital consumer appliances. At the same time, IAB actively pro-