Omron 2009 Annual Report Download - page 58

56
Fiscal 2008 Management’s Discussion and Analysis
Growth in Net Sales by Business Segment
IAB
ECB
AEC
SSB
HCB
Others
FY2008
(20.0)%
(19.6)
(23.6)
(6.3)
(10.9)
(7.0)
FY2007
7.6%
11.5
15.2
(19.6)
8.9
4.5
FY2006
12.1%
41.6
20.3
15.4
7.6
(1.3)
Composition of Net Sales by Business Segment
IAB
ECB
AEC
SSB
HCB
Others
FY2008
41.9%
19.8
13.1
12.7
10.2
2.3
FY2007
43.1%
20.2
14.1
11.2
9.4
2.0
FY2006
42.2%
19.1
12.9
14.6
9.1
2.1
SSB (Social Systems Business)
SSB net sales decreased 6.3% year on year to ¥79.9 bil-
lion and operating income fell 24.0% to ¥5.4 billion. New
railway line construction led to increased demand for rail-
way infrastructure equipment, but the overall restrained
spending for corporate capital investment and public sec-
tor investment ultimately drew down sales.
HCB (Healthcare Business)
HCB net sales declined 10.9% year on year to ¥63.8 bil-
lion and operating income decreased 48.5% to ¥4.8 billion.
Sales of home blood pressure monitors and body compo-
sition monitors plummeted amid stagnant demand in the
healthcare and medical equipment markets. Sales were
improving in the first half due to expanded sales channels
in North America and growing demand for blood pressure
monitors in China, Russia, Eastern Europe, and the Middle
East. However, full-year sales declined, from the impacts
of the global recession and strong yen in the second half.
Others
Other Business net sales declined 7.0% year on year to
¥14.5 billion and operating income dropped 49.4% to ¥4.4
million. Increasing consumer consciousness regarding
energy consumption supported steady sales of electricity
usage monitoring services. Sales declined for uninter-
ruptible power supply units and broadband routers.
Japan
The rapid deterioration in economic conditions led to
domestic sales declines of between 10% to 20% for each
of the IAB, ECB, AEC, and HCB segments. Restrained cap-
ital investment by railway companies held domestic sales
flat for the SSB segment. Net sales in Japan declined
15.6% year on year to ¥328.1 billion and operating income
decreased 83.3% to ¥8.4 billion in fiscal 2008.
North America
Sales in North America were brisk for IAB’s oil-related and
safety businesses, but the severe production cuts by the
automobile industry strongly impacted the sales results of
AEC. Net sales in North America fell 21.1% year on year to
¥80.4 billion and operating income declined from ¥2.1 bil-
lion in the previous fiscal year to a ¥0.7 billion operating loss.
Europe
IAB sales in Europe declined 23.5% amid severe deterio-
ration in the business environment in Italy, Spain, and
Eastern Europe. HCB recorded rising sales of blood pres-
sure monitors in Russia, Eastern Europe, and the Middle
East, but posted declining sales for the year following a
downturn in demand in the second half.
Net sales in Europe fell 23.3% year on year to ¥103.1 bil-
lion and operating income decreased 55.7% to ¥6.5 billion.
Greater China
In the Greater China region, encompassing China, Hong
Kong, and Taiwan, the rapid worsening in business condi-
tions as the global economy deteriorated led to IAB and
ECB sales declines of 25.5% and 21.7%, respectively. HCB
posted 22.5% sales growth on expanding demand for
blood pressure monitors.
Total net sales in the Greater China region declined
17.7% year on year to ¥75.2 billion and operating income
decreased 61.4% to ¥3.1 billion.
Southeast Asia and Others
The economic recession and rapid strengthening of the
yen were the major factors behind sales drops of 18.3%
and 31.6% for ECB and AEC, respectively, in the region.
IAB sales edged up 6.9%. Net sales in the Southeast Asia
and other areas declined 13.5% year on year to ¥40.4 bil-
lion and operating income fell 67.1% to ¥1.5 billion.
2. Review of Operations by Region
%
Sales Breakdown by Region
Southeast Asia
and Others
Greater China
Europe
North America
Japan
*Includes direct exports
0
20
40
60
80
100
08
6.1%
12.0%
17.6%
13.4%
50.9%
6.4%
12.0%
16.4%
12.8%
52.4%
5.6%
9.6%
16.1%
13.5%
55.2%
06 07 (FY)