Omron 2009 Annual Report Download - page 36

34
Fiscal 2008 in Review
Sharp drop in sales in the second half of the year
produced an operating loss. The LCD backlight oper-
ation concentrated on the small and medium-size
device market.
ECB posted a net sales decline of 19.6% year on year to
¥123.9 billion and an operating loss of ¥2.0 billion in
fiscal 2008.
In the first half of the fiscal year, ECB posted record
sales in Japan for its reputed small-size LCD backlights and
sales continued strong for input switches for mobile
devices. Sales were also strong for relays and switches in
China, accompanying growing local demand for low power
consumption air conditioners and other consumer elec-
tronics. However, overall sales were strongly affected by
the slowing growth of the semiconductor and automotive
industries. Stagnant conditions in the business and con-
sumer electronic equipment markets also contributed to
the slowdown as well. Impacted by such factors, relays
for printed circuit boards, switches, connectors, and other
mainstay products slowed, resulting in a 9.5% decline in
sales in the first half of the fiscal year.
Conditions deteriorated further in the second half as
concern about the impending global recession compelled
manufacturers to accelerate their inventory adjustment
efforts, stalling demand even for items that had been mov-
ing quickly in the first half. The end result for this fiscal year
was an overall 10.3% decline in ECB domestic sales.
ECB overseas sales plummeted 26.0% as the weak mar-
ket conditions in Europe during the first half combined with
an abrupt change in the second half in the business environ-
ment in China, which had been a persistent growth market.
The stronger yen also greatly impacted overseas results.
Management determined that it would be extremely
difficult to secure profit in this product category after care-
ful consideration of the intensifying competition and strong
downward pricing pressure for large-size LCD backlights
for LCD TVs. As a result, they decided to dissolve the
Company’s operations related to large-size LCD backlights
in fiscal 2010. Management will now focus on raising prof-
its from its LCD backlight operations by setting its sights
exclusively on the markets for small- and medium-sized
LCD backlights.
* FY2009 (Plan) adopted from FASB Statement No.131,
Disclosures about Segments of an Enterprise and
Related Information.
* Projections for FY2009 are based on exchange rates of ¥95/US$ and ¥125/Euro.
* The sales figures given indicate sales to external customers and exclude inter-segment transactions.
Operating income indicates income including internal income prior to the deduction of amounts such as
inter-segment transactions and head office expenses that are not apportionable.
* Projected figures for R&D costs, depreciation costs, and capital expenditures are not publicized.
ECB Results and Plans
Net sales*
Domestic
Overseas
North America
Europe
Asia
China
Direct exports
Operating income*
Operating income margin*
R&D expenses*
Depreciation and amortization*
Capital expenditures*
97.7
45.0
52.7
9.9
12.5
6.3
14.5
9.5
11.2
11.5%
7.8
8.4
7.1
2005
138.4
58.8
79.6
11.0
12.0
8.6
35.7
12.4
13.1
9.5%
8.1
9.0
12.8
2006
154.2
62.4
91.8
10.4
12.4
10.3
48.3
10.4
12.6
8.2%
8.2
10.5
14.1
2007
123.9
56.0
68.0
8.6
9.2
8.4
37.8
3.9
(2.0)
—
8.1
10.8
17.3
2008
112.0
48.5
63.5
8.6
12.0
7.0
32.3
3.6
3.0
2.7%
2009
（Plan）
Fiscal Year
% of Net Sales
20%
ECB applies the Company’s core technologies to strengthen its
products and develop innovative
monozukuri (the art of product
creation) technology to enhance Omron’s global competitiveness.
ECB sales plummeted as a result of
the rapid and widespread imple-
mentation of inventory adjustment
measures following the sharp dete-
rioration in business conditions in
the second half of fiscal 2008.
(Billions of yen) (Billions of yen)
0
400
800
1200
1,600
2,000
0
10
20
30
40
50
Global shipment of
electronic components
and ECB sales.
1Q2Q3Q4Q1Q 2Q 3Q 4Q
FY2007 FY2008
Global [left axis]
Japan [left axis]
ECB [right axis] Source:JEITA
（Billions of yen）
Segment Information
ECB ELECTRONIC COMPONENTS BUSINESS
Manufacture and sales of electronic components for consumer electronics, mobile phones,
telecommunications and industrial equipment, and amusement devices
Analysis of external environment
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