Omron 2007 Annual Report Download - page 31

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MARKET ENVIRONMENT AND KEY STRATEGY
Placing High Expectations on the RFID System and
Energy Monitoring Businesses
We have our eyes on people’s growing awareness of
environmental protection and energy-saving. Accordingly, we
are accelerating efforts to identify the potential of the com-
mercialization of energy monitoring equipment and related serv-
ices, which should not only support corporate clients’ promotion
of energy-saving efforts but also contribute to their cost-cut-
ting efforts. We will also take advantage of the full-scale growth
in demand for RFID*-related equipment to provide the global
marketplace with products suitable for UHF and HF radio bands.
Further, we will seek to create new businesses in the fields
of safety, security, environment and health by making full use
of the Omron Group’s core competence.
BUSINESS RESULTS AND FISCAL 2007 OUTLOOK
Photo Sticker Machines, Energy Monitoring
Business Turn in Strong Performance
In fiscal 2006, we saw net sales of ¥27.8 billion (up
6.9% year on year) and operating income of ¥2.4 billion (up
44.8%). Among existing businesses, the mainstay photo
sticker machines performed strongly in the entertainment
business, with the membership of the mobile site linked to
these machines also growing smoothly. In the computer
peripherals business, sales increased for uninterruptible
power supply equipment. Among businesses with particular
emphasis for growth, we started shipments of UHF-band
RFID equipment to the Asian market, following the U.S. and
Japanese markets, and sales of the newly launched energy
monitoring business also grew steadily.
In fiscal 2007, however, despite an expected expansion of
the RFID and energy monitoring businesses, we are forecasting
an operating loss of ¥0.6 billion on net sales of ¥16.5 billion
(down 40.5% year on year), as the sale of the entertainment
business will lead to a corresponding decline in both sales and
operating income and as we continue to invest in the search for
new business opportunities.
MEASURES FOR ACCELERATING GROWTH
Expansion of the Energy Monitoring Business
We are putting extra effort into the energy monitoring
business as a new business area. In this business, we utilize
wireless technology to measure energy consumption of air-con-
ditioning and other equipment, as well as room temperature
and humidity, at manufacturing plants and distribution centers,
process the measurement results into data useful in energy-
saving efforts and feed these data into personal computers of
client companies or into mobile phones of individuals. We
launched the business in fiscal 2006 to provide both equipment
and services to corporate clients who can expect both energy-
saving and cost-cutting benefits. We will seek to double fiscal
2007 sales for the business from the fiscal 2006 level, and at the
same time expand the scope of energy measurement and
enhance the range of data services provided.
Kazunobu Amemiya, Executive Officer
Senior General Manager, Business Development Group
The Business Development Group is contributing to the building of a basis for the Omron
Group’s growth by seeking out and fostering new business opportunities and also supporting
technological development and product commercialization. In particular, we are focusing on
the steadily-growing energy management and RFID businesses and stepping up efforts
toward their further growth.
BUSINESS DEVELOPMENT GROUP AND OTHER BUSINESSES
Seeking Out and Fostering New Business Opportunities
2006
27.8
27.7
0.1
2.4
8.7%
9.7
1.3
3.6
BUSINESS DEVELOPMENT GROUP AND OTHER BUSINESSES RESULTS AND PLANS Billions of yen
2007 Plan
16.5
16.0
0.5
(0.6)
—
9.5
7.1
YoY
106.9%
107.8%
35.0%
144.8%
+2.3%pt.
95.1%
125.4%
51.7%
2005
25.9
25.7
0.2
1.7
6.4%
10.2
1.0
7.0
2004
26.8
26.4
0.4
3.8
14.2%
10.6
5.1
5.8
*Projections for FY2007 are based on exchange rates of ¥115/US$ and ¥150/Euro.
*The sales figures given indicate sales to external customers and exclude inter-segment transactions. Operating income indi-
cates income including internal income prior to the deduction of amounts such as inter-segment transactions and headquarters
expenses that are not apportionable.
*Projections for depreciation and amortization are not publically released.
2003
24.5
24.0
0.5
3.8
15.5%
9.8
1.3
9.5
Remote Monitoring Equipment
A terminal for measuring energy consump-
tion at business facilities that can be installed
easily without requiring any wiring work with
the adoption of a mobile communication net-
work and specified low-power consumption
radio transmission. The terminal can provide
detailed measurement data at low cost.
* RFID: Radio Frequency Identification
Fiscal Year
Net sales*
Domestic
Overseas
Operating income*
Operating income margin*
R&D expenses
Depreciation and
amortization*
Capital expenditures
BUSINESS DEVELOPMENT GROUP AND OTHER BUSINESSES