Omron 2004 Annual Report Download - page 8

6
Strategy Overview for GD2010 New Phase 2
—Improving production and sales efficiency, and
expanding growth-oriented regions and business
domains
To raise profitability, we are focusing on two major initiatives. First,
we are increasing the efficiency of our marketing system by
strengthening and integrating our authorized distributors. Second,
we are rationalizing our production processes and materials pro-
curement. Through these two measures, we aim to lower the
aggregate ratio of selling, general and administrative (SG&A)
expenses and fixed manufacturing expenses to total sales by sev-
eral percentage points during GD2010 New Phase 2.
We will achieve higher earnings stability and growth potential,
meanwhile, by carrying out the following two measures. First, we
will further develop high-growth markets, particularly China.
Second, we will expand new technology-driven business domains
with high-value-added technologies, namely, our four core tech-
nologies of microreplication processing, light wave control,
vision/optical/radio wave sensing, and artificial intelligence informa-
tion control. Through these measures, we will reach the final goal
of GD 2010 New Phase 2, which is a doubling of the aggregate
business value, i.e., the total current net value of future cash flows,
generated by each of our business segments.
*For more details of our New Phase 2 strategy, please refer to the section entitled
“FY2004-2007 Medium-Term Management Plan (GD2010 New Phase 2).”
CORPORATE GOVERNANCE
Strong corporate governance systems are required for the maxi-
mization of corporate value, two essential facets of which are (1)
committed execution of strategy and (2) incorporation of valuable
opinions and critiques from outside the company. The Company’s
management is centered on the Board of Directors, Executive
Meeting, and Board of Corporate Auditors. The managing officer
system and internal company system serve to promote the separa-
tion of the roles of corporate management and business execution,
while also speeding up decision-making, with management moni-
toring provided by the corporate auditors. Furthermore, thorough a
proactive IR strategy and an open shareholders’ meeting, manage-
ment receives valuable opinions and critiques from investors and
analysts. We will continue to further enhance and reinforce our cor-
porate governance.
A RETURN FOR ALL OF OUR STAKEHOLDERS
We are committed to rewarding shareholders for their support
through both expanded corporate value and dividends. On the
other hand, as we enter a new stage of growth we will be required
to expand advance investments in future growth for the time being,
necessitating higher levels of retained earnings.
That much said, we take our dividend policy quite seriously. In
fact, in the year under review we doubled the dividend to ¥20 per
share, including a 70th anniversary commemorative dividend of ¥7
per share. For the future we are targeting a dividend payout rate of
about 20% of consolidated current net income. To our customers,
we will contribute to greater productivity and profitability by provid-
ing high-value-added products and services. To society at large,
we will contribute to the maintenance of a sound society and envi-
ronment through our business activities and through a variety of
volunteer activities. With the unwavering trust and support of all our
stakeholders, the Omron Group will continue to strive to maximize
corporate value.
July 2004
Hisao Sakuta
President and CEO
Doubling Total Business Value
Maximizing long-term corporate value
Doubling total business value
Enhancing brand value
GD2010 Long-Term Management Goal
New Medium-Term Management Goal
Business B
ＰＶ*
Business A
ＰＶ*
Business C
ＰＶ*
Corporate expenses
Total business value
Brand value Corporate value
* PV＝Present Value