Omron 2009 Annual Report Download - page 42

40
Fiscal 2008 in Review
The economic recession and strong yen led to
declines in sales and income
HCB net sales declined 10.9% year on year to ¥63.8 bil-
lion and operating income fell 48.5% to ¥4.8 billion in
fiscal 2008.
Sales of pedometers and electric toothbrushes were
brisk in Japan in the first half. Sales of home blood pres-
sure monitors and body composition monitors, which were
already slowing in the first half, plummeted in the second
half as business conditions worsened and major retailers
stepped up their inventory adjustments. Legislation by the
Japanese government requiring physical examinations and
health guidance to be offered to all holders of national
health insurance aged 40 to 70 in fiscal 2008, did not cre-
ate the desired, stimulating effect for the market.
Equipment sales to medical institutions were boosted
in the first half by large-scale orders but started falling in
the second half as institutions reduced spending on new
equipment. Full-year sales to medical institutions ultimately
fell below the previous year level.
Overseas sales held strong in the first half, supported
by expanded sales channels via major distributors in North
America. Sales were also brisk for blood pressure moni-
tors in developing countries, specifically China and Russia
and countries in Eastern Europe and the Middle East,
where awareness of lifestyle-related disease prevention
is growing as living standards rise. However, sales in devel-
oping nations slowed considerably when the economic
recession intensified in the second half. This slowdown,
coupled with the strong yen, resulted in sales in develop-
ing countries declining 3.1% for the full fiscal year.
Recognizing the challenging conditions, HCB launched
aggressive marketing initiatives to boost sales in China and
focused on fulfilling needs for its higher-priced line of blood
pressure monitors. HCB also conducted dynamic market-
ing campaigns focused on Mother’s Day, Father’s Day,
and other occasions, and displayed large-scale advertise-
ments accompanied by in-store promotions. These efforts
successfully raised full-year overseas sales above the pre-
vious year level.
Domestic sales of blood pressure
monitors were slightly affected by
sluggish market conditions, but
end-user sales regained a recov-
ery track in the fourth quarter of
fiscal 2008.
* 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.
HCB Results and Plans
Analysis of external environment
Net sales*
Domestic
Overseas
North America
Europe
Asia
China
Direct exports
Operating income*
Operating income margin*
R&D expenses*
Depreciation and amortization*
Capital expenditures*
61.1
30.3
30.8
15.4
10.6
1.6
2.9
0.2
8.7
14.2%
3.3
1.1
1.6
2005
65.7
32.8
32.9
13.8
13.1
2.1
3.6
0.3
8.7
13.2%
3.9
1.0
1.5
2006
71.6
35.0
36.6
12.5
15.9
2.1
5.5
0.7
9.4
13.1%
4.3
1.1
2.4
2007
63.8
28.3
35.5
12.0
14.3
2.1
6.7
0.4
4.8
7.6%
4.4
1.2
1.8
2008
61.5
29.0
32.5
11.0
12.0
2.2
6.8
0.5
4.0
6.5%
2009
（Plan）
Fiscal Year
(Billions of yen)
0
3
6
9
12
15
18
Changes in domestic
electronics market
(blood pressure monitors)
1Q2Q3Q4Q1Q 2Q 3Q 4Q
FY2007 FY2008
Other Products Source: Gfk
Omron Products
% of Net Sales
10%
Omron Healthcare Co., Ltd. (HCB) is seeking to expand business in
emerging countries and developing products in line with its “Healthcare
at Home” concept and its long-term business plan.
（Billions of yen）
Segment Information
HCB HEALTHCARE BUSINESS
Health and medical devices and services for home and medical institutions
Check It Out!