Omron 2007 Annual Report Download - page 12

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11
In view of these solid results, we raised the annual div-
idend for the fourth consecutive year by ¥4, to ¥34 per
share, in accordance with our basic policy for a payout ratio
of around 20% of consolidated net income (see page 17
for Omron’s capital policy).
Maximizing Corporate Value with
a Long-term Vision
Although the outlook for the economic environment in
fiscal 2007 holds unclear elements such as steep rises in the
prices of raw materials, we anticipate further positive out-
comes from structural reforms and contributions from M&A
activities to date. We are targeting net sales of ¥800 billion
(up 8.6% over the previous period) and operating income
of ¥75 billion. Meeting these targets will raise consolidated
earnings per share (EPS) to about ¥200 (net profit of ¥46
billion), which is roughly double the level of the ¥110 con-
solidated EPS in fiscal 2003.
We are also aware that if we fail to keep business and
investment on an even keel by opting to pursue immediate
gains that can have the potential to stunt our future growth,
or if we shy away from promising challenges simply for the
sake of cutting costs, we will fall behind the times and dimin-
ish as a company. With this in mind, we are aiming to strike
a balance between growth and earnings in the 2nd Stage
of GD2010.
Looking back at the three-year period of the 2nd Stage,
the Group has become even stronger than we could have
anticipated. In terms of earnings, productivity in IAB has
improved significantly following the reorganization of our
global production and development bases. SSB has also
achieved positive outcomes through cost cutting measures
based on selection and concentration. ECB also has achieved
growth through expansion of the liquid crystal backlight busi-
ness, and HCB has improved its position by making a full-
fledged entry into the supply market for medical institutions
and private medical practices. Despite concerns over steep
rises in raw material prices, AEC also lifted its productivity
through management efforts and returned to profitability in
the second half of fiscal 2006. While disparities in profitabil-
ity and growth exist among the business units, our man-
agement strategy of maintaining an effective balance of
growth and earnings is producing steady overall results for
the Omron Group.
Fiscal 2007 will bring us another important step closer to
our goal. However, the 2nd stage of the GD2010 is just
one part of establishing a foundation on which to transform
the Omron Group into a sustainable value creation company.
I am committed to doing my utmost to guide the company
toward maximizing corporate value over the long term based
on GD2010 by promoting optimal distribution of limited
management resources (people, goods, money).
The Omron Group strives to meet the tasks cut out for
us, and I would like to ask all of you to give even greater
support and cooperation in the days ahead.
July 2007
Hisao Sakuta, President and CEO