Omron 2005 Annual Report Download - page 28

KEIICHIRO AKAHOSHI, OMRON HEALTHCARE Co., Ltd.
Representative Director and Chief Executive Officer
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REVIEW OF FISCAL 2004
•Keeping the expansion on track
The home healthcare and medical equipment market
expanded steadily on the global scale in response to an
increase in the number of patients with lifestyle-related dis-
eases and the rising awareness of self-care. Although sharp
growth in the Chinese market was dampened temporarily
by government measures to suppress the overheated econ-
omy, we nevertheless maintained sales at a high level there.
A breakdown by product reveals that the HCB segment’s
mainstay products of digital blood pressure monitors for
home use and body composition monitors with scales per-
formed well. Growth in sales of digital blood pressure
monitors for home use was particularly strong and sus-
tained in the U.S., and in Japan, sales of body composition
monitors with scales climbed steeply thanks to aggressive
advertising and promotion. As a result, the HCB segment’s
sales increased 7.7% year-on-year to ¥50.6 billion and oper-
ating income increased 6.2% to ¥7.6 billion. Meanwhile,
operating income margin declined 0.1 percentage points to
15.1% because of increased temporary expenditures for
quality enhancements.
BUSINESS ENVIRONMENT AND KEY STRATEGY
•Expanding our existing domains and developing new
growth domains using our outstanding brand strength
Health consciousness is growing around the world, accom-
panying such trends as aging populations and increases in
lifestyle-related diseases caused by irregular diet and
stress, including hypertension and diabetes, which occur
primarily in advanced countries. These trends have raised
expectations for a continuous global expansion of demand
for healthcare and medical equipment such as digital blood
pressure monitors for home use and body composition
monitors with scales. The HCB segment will aggressively
expand sales of its digital blood pressure monitors, already
established as the world’s top brand, in China and Europe
where the potential is especially high. In the domestic mar-
ket, too, we will be determinedly addressing the health
needs of consumers through expanded sales of body
composition monitors with scales and portable electrocar-
diographs. In addition, we plan to actively develop the
home medical care domain, a field in which bio-informa-
tion such as blood pressure measured at home is used at
medical institutions.
MEASURES FOR ACCELERATING GROWTH
•Expansion and reinforcement of our mainstay bio-infor-
mation sensing systems business
In June 2005, we purchased Colin Medical Technology
Corporation (CMT), the top manufacturer of blood pres-
sure monitors for medical institutions. We intend to use
this opportunity to incorporate CMT products for medical
institutions such as inpatient blood pressure monitoring
devices and vascular screening devices into our home
healthcare and medical equipment business. With this
acquisition, we will now be able to create a system that
can provide bio-information sensing systems for use in loca-
tions ranging from homes to surgery rooms and hospital
wards. The acquisition is expected to yield valuable syner-
gies from the use of CMT’s sales channels into medical
institutions and the joint development of next-generation
products utilizing the strong technological skills of both
companies. In the term ended December 2004, CMT’s net
sales amounted to ¥8.6 billion. With the strategic benefits
to be derived from this acquisition, the Omron healthcare
group is aiming for sales of ¥75.0 billion and an operating
income margin of 15% in fiscal 2007.
•Launch of new category products
Recent years have seen the field of preventive medicine
grow in importance. Preventive medicine requires daily
attention to one’s state of health, and it is increasingly rec-
ognized that bio-information obtained, for instance, by
blood pressure measurements taken at home can be use-
ful even in diagnoses performed at medical institutions. For
this reason, we are focusing attention on product develop-
ment that links home health checks to medical institutions.
We have already begun sales (in January 2005) of a
portable electrocardiograph that can display electrocardio-
gram waveforms, information useful at medical
institutions. We have also commenced sales (in April 2005)
of Medinote, a blood pressure monitor and manager
designed under guidelines for self-monitoring of blood
pressure at home prepared by the Japanese Society of
Hypertension. We intend to propel growth upward by
aggressively introducing this new category of products.
OMRON HEALTHCARE Co., Ltd. (HCB) commands an overwhelming market share
across the globe for digital blood pressure monitors for home use. By taking advan-
tage of this strong consumer brand, we intend to expand our business into the new
home medical care domain, which connects patient homes and medical institutions,
with a view to reinforcing our platform for profitability.
HEALTHCARE BUSINESS (HCB)
Manufacture and sale of medical devices for home and professional use