Omron 2010 Annual Report Download - page 66

66
Fiscal 2009 Management’s Discussion and Analysis
Overview of Consolidated Results and Financial Condition
Review and Analysis of the Statements of Income
In this market environment, the combined impact from the
global recession extending into the second quarter,
restrained capital investment in the manufacturing indus-
try, and the strong yen resulted in a 16.3% year-on-year
decline in consolidated net sales to ¥524.7 billion in fiscal
2009. While sales revenue declined, the Group-wide effort
to reduce costs produced a substantial 144.9% year-on-
year improvement in operating income to ¥13.1 billion.
Income before income taxes amounted to ¥10.2 billion,
and net income attributable to shareholders amounted to
¥3.5 billion.
Total assets declined 1.1% from the previous fiscal
year, primarily due to reduced inventories. The improve-
ment in net profit raised total shareholders' equity by 2.7%
year on year, which raised the equity ratio to 57.5% from
55.4% at the end of the previous fiscal year.
Return on equity (ROE) amounted to 1.2%, and the
return on investment capital (ROIC) was 2.2%.
Sales
Consolidated net sales amounted to ¥524.7 billion, a year-
on-year decline of ¥102.5 billion or 16.3%, which was
largely due to the substantial drop in demand in the first
half and the strong yen.
While the global economic crisis caused substantial
declines in demand, as the year progressed sales steadily
improved for the electronic components, automotive elec-
tronic components, and domestic FA businesses.
By region, sales declined 18.0% in Japan (including
direct exports) and fell 23.9% in North America, 24.7% in
Europe, and 1.7% in the Asia Pacific. In contrast, sales in
the Greater China region rose 2.5%.
Cost of Sales and SG&A Expenses
The decline in sales led to a 16.7% year-on-year decrease
in cost of sales. The cost to sales ratio decreased 0.3 per-
centage point to 64.9%. The decrease was primarily due to
a respite in the rise of raw materials prices and emergency
measures including reductions in variable costs and man-
ufacturing fixed costs.
SG&A expenses were reduced by ¥30.9 billion, or
18.8%, from the previous fiscal year as the Company
responded to the decline in sales with comprehensive
efforts to lower expenses and strictly limit large invest-
ments. The Company likewise reduced R&D expenses by
¥11.1 billion, or 22.6%. The SG&A expense-to-sales ratio
accordingly declined by 0.8 percentage point to 25.4%,
and the R&D expense-to-sales ratio decreased 0.5 per-
centage point to 7.2%.
Other Expenses (Income) * See Note 12 on page 93
The amount of other expenses, net was a net loss of ¥2.9
billion, representing a ¥41.6 billion decrease in loss in this
category from the previous fiscal year when the Company
recorded impairment losses for goodwill, property, plant
and equipment, and investment securities.
Income before Income Taxes, Net Income
Attributable to Shareholders, and Profit Distribution
As a result of the above, income before income taxes
amounted to ¥10.2 billion in fiscal 2009, an increase of
¥49.3 billion from the ¥39.1 billion loss before income taxes
Note: Segment operating income is prepared using the single-step method (that does not show individual income levels) based on U.S. GAAP. For an eas-
ier comparison to other companies, operating income represents gross profit minus selling, general and administrative (SG&A) expenses, and
research and development (R&D) expenses.
Billions of yen Billions of yen
Net Sales & Income before Income Taxes
Net sales［left axis]
Income (loss) before income taxes［right axis］
* Figures have been restated to account for
businesses discontinued in FY2007.
-200
0
200
400
600
800
-40
0
40
80
120
160
05 06 0907 08 (FY)
Billions of yen %
Net Income Attributable to Shareholders & ROE
Net income (loss) Attributable to Shareholders［left axis］
ROE［right axis］
-50
-25
0
25
50
-15
-10
-5
0
5
10
15
05 06 0907 08 (FY)
yen
Dividends per Share
0
10
20
30
40
50
05 06 0907 08 (FY)