Omron 2010 Annual Report Download - page 42

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42
Segment Information
EMC ELECTRONIC AND MECHANICAL COMPONENTS BUSINESS
Manufacturing and sales of electronic components for consumer appliances, telecommunications equipment,
mobile telephones, amusement devices, and office automation equipment
Fiscal 2009 in Review
Rapid recovery in earnings from structural reform
and other improvements
EMC posted a net sales decline of 7.6% year on year to
¥70.7 billion, while operating income rose 59.6% to ¥6.7 bil-
lion in fiscal 2009.
Domestic demand for numerous electronic compo-
nents improved during the year following the completion of
inventory adjustments in the business and consumer elec-
tronic equipment industries, as well as the automotive
components industries that continued from the second
half of fiscal 2008 through the first quarter of fiscal 2009.
Demand for electronic components for industrial equip-
ment also improved from the substantial declines which
have been ongoing since fiscal 2008, but the recovery still
has not reached the levels attained prior to the economic
crisis. Overall domestic sales to all industries ultimately
declined 12.7% year on year to ¥22.3 billion in fiscal 2009.
Overseas operations in the European and American
markets were faced with business conditions of unprece-
dented severity, but began to show signs of gradual
improvement in the second half of the fiscal year under
review. Business conditions in China and Southeast Asia
moved into recovery in the second quarter, and demand
recovered for several products, notably for relays for con-
sumer appliances (particularly air conditioners), flexible
printed circuit (FPC) connectors for optical disks, and input
switches for mobile devices. The result was a relatively
small decline on an all-industry basis compared with domes-
tic sales, with overseas sales down 5.0% year on year to
¥48.4 billion.
Operating income from overseas operations also
showed substantial improvement as a result of the emer-
gency measures and improved productivity.
* From fiscal 2009, the Companies adopt the Accounting Standards Codification No.280, “Segment Reporting.” Accordingly, the fig-
ures of the segment information for fiscal 2008 have been restated to conform with the current year presentation.
* The Company’s business segments have been reclassified from the third quarter of fiscal 2009. The net sales, operating income, and
operating income margin figures from fiscal 2008 have been restated to reflect the new classifications. The figures for fiscal 2006 and
2007 have not been restated.
* Beginning in fiscal 2010, the Omron Group has been revising the management guidance fees for the purpose of concentrating capital
funds at the headquarters in order to reinforce selection and concentration and allocate resources strategically. This inclusion has had
an effect on the operating income of each segment.
* Fiscal 2006-2008 figures for R&D expenses, depreciation and amortization, and capital expenditures have not been modified to reflect
the new segment organization.
* The sales figures given indicate sales to external customers and exclude intersegment transactions. Operating income indicates income includ-
ing internal income prior to the deduction of amounts such as intersegment transactions and head office expenses that are not apportionable.
* The forecast for R&D expenses, depreciation and amortization, and capital expenditures is not publicized.
* The forecast for fiscal 2010 is as of July 28, 2010.
EMC Results and Forecast
Net sales*
Domestic
Overseas
North America
Europe
Asia
China
Direct exports
Operating income*
Operating income margin*
R&D expenses
Depreciation and amortization*
Capital expenditures
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
76.5
25.6
50.9
8.6
9.2
8.4
20.9
3.8
4.2
5.5%
8.1
10.8
17.3
2008
70.7
22.3
48.4
7.3
11.7
7.6
19.8
1.9
6.7
9.5%
5.0
8.5
4.2
2009
81.0
25.0
56.0
12.5
12.0
8.5
21.0
2.0
10.5
13.0%
2010
(Forecast)
Fiscal Year
% of Net Sales
14%
EMC utilizes its cultivated strength in
monozukuri
(product creation)
technology, integrating its relays, switches, connectors, and other
electromechanical component products to supply products to cus-
tomers in a wide range of industries.
Demand is recovering after beginning
to rise in the first quarter of fiscal 2009.
(Billions of yen) (Billions of yen)
0
300
600
900
1,200
1,500
0
5
10
15
20
25
1Q2Q3Q4Q1Q 2Q 3Q 4Q
FY2008 FY2009
Global shipments of
electronic components and
EMC sales
Global [left axis]
Japan [left axis]
EMC [right axis] Source:JEITA
(Billions of yen) Check it out!
Analysis of external environment