Omron 2007 Annual Report Download - page 27

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MARKET ENVIRONMENT AND KEY STRATEGY
Stepping up Efforts to Address Society’s Needs in
Security, Safety, and Comfort
Amid calls for tighter measures to address increasing inci-
dents and accidents in society and growing concern regarding
corporate social responsibility and internal control in the wake of
a series of corporate scandals, the demand for services to pro-
mote a safer, more secure society where people can live with
greater peace of mind is set to increase. Likewise, as values in
our society become increasingly diverse, new services to
address individual needs in pursuit of more comfortable and
convenient lifestyles have emerged one after another. In this
environment of dramatic changes in social needs, SSB cannot
expect significant further growth in its railway and roadway
infrastructure services which have been its mainstay to date.
The widespread use of IC cards has resulted in the need for
fewer ticket vending machines, and government agencies are
restraining investment in infrastructure. To counter this we will
foster image sensing and IC technologies which we have devel-
oped to date by positioning them as core technologies that
will serve as the mainstay of future growth in new business
aimed at providing wide-ranging solutions centered on the
themes of security, safety, comfort, and convenience. Also,
we will continue efforts to transform our business manage-
ment and change business processes in our existing busi-
nesses to strengthen our business structure.
BUSINESS RESULTS AND OUTLOOK FOR FISCAL 2007
Efforts to Secure Profit amid a
Significant Decline in Sales
In fiscal 2006, SSB recorded net sales of ¥105.9 billion
(up 15.4% year on year), and operating income of ¥8.1 billion
(up 82.0%). In the railroad infrastructure business, new and
replacement demand for automated passenger gates and auto-
matic ticket vending machines was a major driving force in
sales as the nationwide transition to IC card use by railways
in Japan continued. Sales in the IC card mobile solutions busi-
ness also grew accompanying an increase in demand for cred-
it authorization terminals. Sales also increased in the new serv-
ices segment due to demand for security against the leaking of
information at production sites. On the other hand, sales in the
roadway infrastructure business tapered considerably. Despite
efforts to promote traffic-load measuring systems, there were
few major contracts. In terms of profits, because of the
decrease in fixed expenses and other costs due to the
changeover in operations, increases in income exceeded the
sales increases considerably.
During fiscal 2007, we expect net sales of ¥90 billion
(down 15.0% year on year) and operating income of ¥7.3
billion (down 9.6%). The cycle of demand accompanying the
introduction of IC cards for transport tickets will come to an
end, and sales are expected to fall off considerably. On the
other hand, we expect an increase in demand for new
Yutaka Takigawa, Senior Managing Officer
Company President, Social Systems Solutions Business Company
In response to today’s growing needs for security, safety and comfort, SSB is promoting
expansion of new business areas by providing solutions that capitalize on the strengths of the
Omron Group in services ranging from image sensing, IC card technology, and system
construction to system maintenance and management.
SOCIAL SYSTEMS BUSINESS (SSB)
Providing solutions and services for realizing a secure, safe, and comfortable social environment