Integrated Report 2012
Year ended March 31, 2012
“Working for the benefit of society”
with unwavering resolve
Omron’s Sensing and Control Technology
Brings Machines Closer to People
For over half a century, the Omron Group has operated in accordance with our corporate
motto: “At work for a better life, a better world for all.” A more direct representation of the
sentiment embodied in this slogan is the corporate core value “Working for the benefit of
society” that lies at the heart of the Omron Principles and serves as a proclamation of our
commitment to coexist in harmony with society.
Aware of our role as a member of international society, the Omron Group will act in
accordance with the Omron Principles and continue “Working for the benefit of society.”
We will strive to earn the trust of our stakeholders by acting with integrity, we aim to be
a pioneer in contributing to the development of a sustainable society. To this end, we will
work to ensure the fairness and transparency of corporate activities and will continue to
be a proactive benefactor of society.
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Omron through the Year
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For more information, please refer to the Company’s websites (listed below):
Omron’s Global Website
Investor Relations
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http://www.omron.com/
http://www.omron.com/ir/
http://www.omron.com/about/csr/
The scope of this report covers the 165 companies of the Omron Group, consisting of 153 consolidated subsidiaries and 12 non-consolidated subsidiaries
and affiliates accounted for under the equity method (as of March 31, 2012).
Caution Concerning Forward-Looking Statements
Statements in this annual report with respect to Omron’s plans, strategies, and benefits, as well as other statements that are not historical facts, are forward-looking statements
involving risks and uncertainties. Important factors that could cause actual results to differ materially from such statements include, but are not limited to, general economic conditions
in Omron’s markets, which are primarily Japan, Americas, Europe, Asia Pacific, and Greater China; demand for and competitive pricing pressure on Omron’s products and services in
the marketplace; Omron’s ability to continue to win acceptance for its products and services in these highly competitive markets; and movements of currency exchange rates.
2
Omron Corporation
Integrated Report 2012
1
Integrated CONTENTS
To Our Stakeholders
4 Message from the President
Profile
6 Facets of Human Society
8 Global Business, Local Citizen
10 10-Year Financial Highlights (Omron Corporation and Subsidiaries)
12 Omron through the Year
Business Strategies
14
20
Interview with the President
01 Special Feature 1:
Global Vertical-Horizontal Matrix Management
Striving to Create New Value through Linkages down
Business Lines (Vertical) and between Corporate
Headquarters and Business Divisions (Horizontal)
02 Special Feature 2:
26
Omron’s Supply Responsibility and Business Continuity
We will Fulfill Our Social Responsibility by Creating a
Business Structure that is Resilient to Changes in the
External Environment and Strong in the Face of Risks.
Segment Information
30 Business Segments and Key Products
34 Omron at a Glance
36 Segment Information
36
38
40
42
44
46
Intellectual Property Strategy
Industrial Automation Business (IAB)
Electronic and Mechanical Components Business (EMC)
Automotive Electronic Components Business (AEC)
Social Systems, Solutions and Service Business (SSB)
Healthcare Business (HCB)
Other Businesses
48
49 R&D
Corporate Governance, CSR, and Others
52 The Omron Principles and CSR Management
56
03 Special Feature 3:
Dialogue: The Importance of having a Corporate Philosophy
Earning Stakeholder Trust by Exercising the Omron Principles
Corporate Governance, Internal Control, Compliance,
and Risk Management
60
65 Directors, Corporate Auditors, and Executive Officers
68 04 Special Feature 4: Corporate Governance
Working to Enhance Omron’s Corporate Value
72 05 Special Feature 5: Resolving Environmental Issues
New Vision Contributing to the Global Environment
78 06 Special Feature 6: Resolving Health Issues
Contributing to the Health of People throughout the World
82 Creating Value for Employees
83 Creating Value for Customers
84 Creating Value for Shareholders and Investors
85 Creating Value for Local Communities
86 Omron: Advancing Sensing and Control Technology
Financial Information
87 Financial Section (U.S. GAAP)
Internal Control Section
130
Corporate Information
132 Corporate and Stock Information
Publication of Integrated Report 2012
Previously, Omron has published its annual reports, which contain information on its management vision,
business strategies, and financial condition, and its sustainability reports, which detail corporate social
responsibility (CSR) and other initiatives, as two separate reports. These two reports have been integrated
into a single report entitled Integrated Report 2012.
In addition to bolstering non-financial information, we have taken steps to illustrate the connection between
financial and non-financial information. Rather than simply explaining the Omron Principles and the policy
of risk management, corporate governance, and internal control systems, we have endeavored to further
illuminate our efforts in these areas by providing concrete examples of initiatives whenever possible. For
example, this report contains statements from site managers explaining in detail how Omron’s business
continuity plan functioned in response to the unprecedented Great East Japan Earthquake, which devastated
Japan on March 11, 2011, and how the Company conducted supply chain management to fulfill its supply
responsibility as a component manufacturer.
The goal of this report is to provide all Omron stakeholders, whether inside or outside of the Company, with
an overview of its management and to be the best possible report and the only one necessary for this
purpose. We hope that you will use this, Omron’s first integrated report, to develop an understanding of the
various business activities of the Company, which it will employ in targeting enhanced corporate value over
the long term, and its business activities that aim to prove its value to society. Omron’s integrated reports
will be published once a year.
I would like to ask all our stakeholders for their continued support and understanding.
In creating this report, we incorporated several items raised during a forum investigating how non-financial
data can contribute to ongoing corporate value, which was held by an industry and trade research section of
the Ministry of Economy, Trade and Industry. This forum was held over the period from November 2011 to
March 2012, and as a member of this research section I attended this forum myself. I would like to express
my sincere appreciation to the members of the Ministry research team for providing us with this valuable
opportunity.
Satoshi Ando
Executive Officer
Senior General Manager, Investor Relations Headquarters
2
Omron Corporation
Integrated Report 2012
3
Message from the President
We Will Seize the Opportunities Created by
Market Changes to Accelerate the New Long-Term
Vision, VG2020.
A Look Back at My First Year as President
More than one year has passed since I assumed the
position of president in June 2011. This year has been
one plagued with adversity as we were faced with the
lingering impacts of the Great East Japan Earthquake,
the severe flooding in Thailand, and the strong yen. These
difficulties tested our ability to adapt to drastic changes.
On the other hand, I believe we made considerable
strides during the year. Endeavoring to overcome these
trials helped unify Omron’s management team and
inspired all members of the Omron Group to take the
initiative in standing up to these difficulties. Also during
this year, we developed new products and reinforced our
network targeting emerging markets. At the same time,
we pushed forward with measures to improve profitabil-
ity. These efforts have reaffirmed my confidence in our
capacity to meet the goals defined in VG2020.
Fiscal 2011 Performance and
Shareholder Returns
First, I would like to report on our fiscal 2011 performance.
Our efforts to develop businesses and introduce new
products targeting emerging markets contributed to
sales, and net sales edged up 0.3% year on year, to
¥619.5 billion, accordingly. However, the impacts of
the strong yen and rising raw material prices resulted
in a 16.4% drop in operating income, to ¥40.1 billion.
Regardless of this performance, I feel our efforts
during the year to respond to the changing operating
Consolidated Income Forecast
(Billions of yen)
FY2012
(Forecast)
FY2011
FY2010
Net sales
Gross profit
SG&A expenses
R&D expenses
Operating income
Other expenses, net
Income before income
taxes
Net income (loss) attrib-
utable to shareholders
USD (yen)
EUR (yen)
650.0
243.5
152.0
45.5
46.0
3.0
43.0
28.5
78.7
99.0
4
Omron Corporation
619.5
227.9
145.7
42.1
40.1
6.6
33.5
16.4
79.3
617.8
231.7
142.4
41.3
48.0
6.3
41.7
26.8
85.8
110.3
113.5
environment enabled us to establish foundations for
profitable growth and enhance our ability to respond to
such changes.
In regard to shareholder returns, in fiscal 2011, we paid
annual cash dividends of ¥28.00 per share, down from
¥30.00 in fiscal 2010, resulting in a dividend payout ratio
of 37.6% and a dividend on equity (DOE) ratio of 1.9%.
We will continue to target a dividend payout ratio of at
least 20% and DOE ratio of 1.9%. After securing capital
required for investments in future growth and sufficient
internal reserves, we will distribute the surplus to our
shareholders.
DOE, Dividends, Net Income (Loss) Attributable
Trends in DOE, Dividends, Net Income Attributable to Shareholders
to Shareholders
Annual dividend (yen)
Dividend payout ratio (%)
106.4
22.6
42
24.7
37.6
25
17
30
28
Net income (loss) attributable to shareholders (billions of yen)
DOE (%)
2.5
42.4
1.7
2007
-29.2
2008
2.1
26.8
1.9
16.4
1.2
3.5
2009
2010
2011
(FY)
What Must be and Must Not be Changed
During the year, dramatic changes have taken place in the
global economy. As the operating environment places
increasingly heavy pressure on corporate management,
Omron’s responsiveness to such changes is being chal-
lenged. Amidst rapidly transforming market conditions,
sudden natural disasters, and intensified competition, it is
clear we must respond more quickly, flexibly, and proac-
tively than before. Our employees, products, and solutions
must evolve constantly in response to changing conditions.
We are thus working to ensure management can make the
necessary changes, such as those related to global
human resources systems or investment policies, in a
quick and decisive manner whenever needed.
However, the central aspects of our operations will not
be changed: these central aspects are embodied by the
Omron Principles that form the heart of our corporate
philosophy. Omron regards having a corporate philosophy
as something that is highly important, and we are proud
of the fact that we faithfully implement our principles.
The corporate core value defined by these principles is
“Working for the benefit of society,” and our corporate
motto is “At work for a better life, a better world for all.”
I believe this motto, originally coined over 50 years ago by
founder Kazuma Tateishi as a simple way of expressing our
philosophy, serves a purpose to the Company similar to
that of the spine for humans. Even if we are not aware of
it, our spine supports us and allows us to stand properly.
If we practice management based on the spirit of this
motto, which embodies the belief that companies should
not only pursue profit but also act as responsible corporate
citizens by giving back to the society in which they
operate, I am convinced that Omron will continue to grow
and that this growth will drive the development of society.
Our experience with the Great East Japan Earthquake,
which devastated Japan in 2011, proved these principles
are firmly entrenched throughout the Company. Following
this disaster, many Omron employees voluntarily con tributed
to reconstruction efforts at the stricken regions, providing
support in the healthcare field and in social infrastructure
areas such as transportation and the maintenance of
financial systems. In addition, the entire Group came
together to fulfill its responsibility of supplying products
to customers, an endeavor I think was successful.
The spirit of “Working for the benefit of society” was
naturally and voluntarily practiced by employees, not
imposed on them.
As we accelerate the globalization of our operations,
it is my hope this philosophy will become further rooted
throughout our operations. In hopes of accomplishing
this, in May 2012, we dubbed the anniversary of Omron’s
founding as “OMRON Group FOUNDER’S DAY,” which is
positioned as a day for us to reconfirm our purpose
together with all Omron employees across the globe.
In times of adversity, it is even more important to look
back at our founding and renew our intrepid spirit to
continue taking on challenges into the future.
To Achieve Stronger Growth
Fiscal 2012 will be devoted to advancing the new VG2020
long-term vision based on the three pillars of reinforce-
ment of the Industrial Automation (IA) Business, sales
expansion in emerging markets, and focus on the environ-
mental solutions business. I am confident that this is the
best course of action for us. To achieve higher levels of
growth in the future, we will maximize our efforts geared
toward meeting the goals outlined in VG2020 by creating
new value and operating our business in a speedy man-
ner. I would like to ask for the continued support of all our
stakeholders, and I hope you will look forward to the
future of the Omron Group with anticipation.
August 2012
Yoshihito Yamada
President and CEO
Integrated Report 2012
5
44%
INDuSTRIAL AuTOMATION BuSINESS (IAB)
Manufacturing and sales of control systems and
components for factory automation and industrial equipment
IAB has established a complete lineup of state-of-the-art equipment that plays
a principal role in automation: The sensors that provide automation systems
with the senses of “vision” and “touch,” the controllers that serve as their
“brain,” the drives that form their “limbs,” and the networks that connect
these various items as the “nerve system.” With these sophisticated products,
we are contributing to quality, safety, and the environment by supporting the
innovation of manufacturing industries around the world.
13%
ELECTRONIC AND MECHANICAL COMPONENTS
BuSINESS (EMC)
Manufacturing and sales of electronic components for
consumer appliances, telecommunications equipment,
mobile telephones, amusement devices, and office
automation equipment
EMC utilizes its cultivated strength in monozukuri (product creation)
technology, integrating its relays, switches, connectors, and other
electromechanical components to supply products to customers in a wide
range of industries.
14%
AuTOMOTIVE ELECTRONIC COMPONENTS
BuSINESS (AEC)
Production and sales of electronic components for automobiles
AEC caters specifically to the ever-evolving automotive electronics field,
a subsection of the automobile industry, which continues to grow on
a global basis. This business continues to contribute to the realization
of safer and more secure and comfortable driving by producing
technologies and products designed to create “the best matching of
automobiles to people.”
Net Sales
¥619.5 billion
FY2011
Contributing to Society
9%
SOCIAL SYSTEMS, SOLuTIONS AND SERVICE
BuSINESS (SSB)
Providing solutions and services for contributing to a safer
and more secure and comfortable society
SSB provides various equipment, systems, and services to support
secure and comfortable living environments and a safe societal
infrastructure.
HEALTHCARE BuSINESS (HCB)
Providing health and medical devices and services for
homes and medical institutions
HCB is aiming to expand business with a focus on emerging econo-
mies by developing innovative products and services to enable people
around the world to accurately and easily monitor their health.
10%
9%
OTHER BuSINESSES
Several other business incubation operations under the
direct control of the president
The main objective of operations in these businesses is to undertake
incubation activities for future business expansion. They advance
business in future growth areas including the environmental field,
where energy-conservation and CO2-reduction needs are expected to
continue growing, and the expanding smartphone market.
* In addition to the above, elimination and corporate of 1% is included in net sales.
Leading Market Share
*As of August 2012
Control-Related Equipment
(Domestic Market Share)
Approximately
40%
Source: Nippon Electric Control
Equipment Industries
Association (NECA)
Railway Infrastructure
Equipment (Domestic
Market Share)
Approximately
40%
Source: Omron internal survey
Home-Use Digital Blood
Pressure Monitors
(Global Market Share)
Approximately
50%
Source: Omron internal survey
6
Omron Corporation
Integrated Report 2012
7
Japan (includes direct exports)
¥307.6 billion
Omron Employees
4,245
The Americas
¥74.8 billion
Europe
¥83.6 billion
Asia Pacific
¥52.4 billion
Greater China
¥101.1 billion
Net Sales
¥619.5 billion
FY2011
Domestic
Group
Employees
7,283
Overseas
Group
Employees
24,464
Omron Group
Employees
35,992
*As of March 31, 2012
Greater China
Subsidiaries 27
Affiliates 1
Japan
Subsidiaries 40
Affiliates 9
Japan
Asia Pacific
Subsidiaries 24
Affiliates 2
The Americas
Subsidiaries 24
Europe
Subsidiaries 38
Global Network
Global Business
Omron aims to be a global value-creating group. Underlying this
goal is our strong determination to bring about a brighter tomor-
row by generating new value that can only be conceived by
assuming a “Planet Earth” perspective, in addition to more
conventional human and social perspectives.
To provide customers what they want when they want it,
Omron has established a global network and a highly localized
service system covering its operating bases in Japan, the
Americas, Europe, Greater China, and the Asia Pacific region.
Omron’s 35,992 full time employees provide optimal local
support to its business partners worldwide, through the
Company’s comprehen sive support system ranging from
development to production, distribution, and maintenance.
Omron will continue to take on the challenge of growing into
a truly global group on which its customers and society at large
can rely and depend.
Global Business, Local Citizen
Respect for Diversity
Currently, one-half of the Omron Group’s total net sales derive from outside of Japan,
while two-thirds of its employees are at overseas sites. Looking ahead, the new Value
Generation 2020 (VG2020) long-term management strategy calls on us to pursue growth
through the further globalization of our operations. In this pursuit, Omron will need to
expand across national and regional borders and overcome religious, ethnic, and gender
boundaries to bring out the creativity of each and every one of its employees and inspire
them to come up with new innovations. We will work to generate new value by develop-
ing an accurate understanding of diversifying needs and values through interactions with
our various stakeholders.
Quest to Be a Good Corporate Citizen
In “Working for the benefit of society,” the Omron Group aims to ensure the impartiality
and transparency of management, while it works to install a stakeholder-centered
perspective into management, based on which the Group will practice integrity in its
dialogues with stakeholders, including employees, customers, shareholders, and
communities, and build bonds of trust with these stakeholders. Further, as a mem-
ber of global society, we will contribute to the economic and cultural development of
local communities. At the same time, we will work to resolve various social issues,
such as those related to conserving resources and preserving the environment.
8
Omron Corporation
Integrated Report 2012
9
10-Year Financial Highlights
Omron Corporation and Subsidiaries
Financial Information
IR Library
Operating Income
Omron applies the “single step” presentation of income under U.S. GAAP (i.e., the various levels of
income are not presented) in its consolidated statements of income. For easier comparison to other
companies, operating income is presented as gross profit less selling, general and administrative
expenses and research and development expenses.
Discontinued Operations
Figures for FY2002 onward have been restated to account for businesses discontinued in FY2007.
Net Sales and Operating Income Margin
Operating Results (for the year):
Net sales
Gross profit
Selling, general and administrative expenses
(excluding research and development
expenses)
Research and development expenses
Operating income
EBITDA (Note 2)
Net income (loss) attributable to shareholders
Cash Flows (for the year):
Net cash provided by operating activities
Net cash used in investing activities
Free cash flow (Note 3)
Net cash provided by (used in)
financing activities
Financial Position (at year-end):
Total assets
Total interest-bearing liabilities
Total shareholders’ equity
Per Share Data:
Net income (loss) attributable to
shareholders (basic)
Shareholders’ equity
Cash dividends (Note 4)
Ratios:
Gross profit margin
Operating income margin
EBITDA margin
Return on shareholders’ equity (ROE)
Ratio of shareholders’ equity to total assets
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
Millions of yen
Thousands of
U.S. dollars (Note 1)
FY2011
(Billions of yen)
1,000
¥522,535
201,816
¥575,157
235,460
¥598,727
245,298
¥616,002
232,667
¥723,866
278,241
¥762,985
293,342
¥627,190
218,522
¥524,694
184,342
¥617,825
231,702
¥619,461
227,887
$7,554,402
2,779,110
133,406
40,235
28,175
57,851
511
139,569
46,494
49,397
77,059
26,811
141,185
49,441
54,672
83,314
30,176
157,909
55,315
60,782
91,607
35,763
164,167
52,028
62,046
95,968
38,280
176,569
51,520
65,253
101,596
42,383
¥ 41,854
(30,633)
11,221
¥ 80,687
(34,484)
46,203
¥ 61,076
(36,050)
25,026
¥ 51,699
(43,020)
8,679
¥ 40,539
(47,075)
(6,536)
¥ 68,996
(36,681)
32,315
164,284
48,899
5,339
38,835
(29,172)
133,426
37,842
13,074
40,088
3,518
142,365
41,300
48,037
71,021
26,782
145,662
42,089
40,136
62,753
16,389
1,776,366
513,280
489,463
765,280
199,866
¥ 31,408
(40,628)
(9,220)
¥ 42,759
(18,584)
24,175
¥ 41,956
(20,210)
21,746
¥ 31,946
(26,486)
5,460
$ 389,585
(323,000)
66,585
(1,996)
(28,119)
(40,684)
(38,320)
(4,697)
(34,481)
21,867
20,358
3,333
(33,492)
(408,439)
¥567,399
71,260
251,610
¥592,273
56,687
274,710
¥585,429
24,759
305,810
¥589,061
3,813
362,937
¥630,337
21,813
382,822
¥617,367
19,809
368,502
¥538,280
54,859
298,411
¥532,254
38,217
306,327
¥562,790
46,599
312,753
¥537,323
18,774
320,840
$6,552,720
228,951
3,912,683
800
600
400
200
0
02
03
04
05
06
07
08
09
10
11
Net Sales [left axis]
Operating Income Margin [right axis]
Net Income (Loss) Attributable to
Shareholders and ROE
(Billions of yen)
60
45
30
15
0
–15
–30
02
03
04
05
06
07
08
09
10
11
Net Income (Loss) Attributable to Shareholders [left axis]
ROE [right axis]
(%)
10
8
6
4
2
0
(FY)
(%)
20
15
10
5
0
–5
–10
(FY)
¥ 2.1
1,036.0
10.0
¥ 110.7
1,148.3
20.0
¥ 126.5
1,284.8
24.0
¥ 151.1
1,548.1
30.0
¥ 165.0
1,660.7
34.0
¥ 185.9
1,662.3
42.0
38.6%
5.4%
11.1%
0.2%
44.3%
40.9%
8.6%
13.4%
10.2%
46.4%
41.0%
9.1%
13.9%
10.4%
52.2%
37.8%
9.9%
14.9%
10.7%
61.6%
38.4%
8.6%
13.3%
10.3%
60.7%
38.4%
8.6%
13.3%
11.3%
59.7%
Yen U.S. dollars (Note 1)
Cash Dividends
Dividends & Shareholder Returns
¥ (132.2)
1,355.4
25.0
¥ 16.0
1,391.4
17.0
¥ 121.7
1,421.0
30.0
¥ 74.5
1,457.5
28.0
$ 0.91
17.77
0.34
34.8%
0.9%
6.2%
(8.7)%
55.4%
35.1%
2.5%
7.6%
1.2%
57.5%
37.5%
7.8%
11.5%
8.7%
55.6%
36.8%
6.5%
10.1%
5.2%
59.7%
(Yen)
50
40
30
20
10
0
*2
*1
02
03
04
05
06
07
08
09
10
11
(FY)
*1. Commemorative dividend of ¥7.0 included.
*2. Commemorative dividend of ¥5.0 included.
Long-term corporate vision
Grand Design 2010 (GD2010)
Value Generation 2020 (VG2020)
FY2001–FY2003
FY2004 –FY2007
FY2008 – FY2010
FY2011–FY2020
1st Stage
Establishing a Profit Structure
Concentrating on cost structure
reform and restructuring the
Company as a profit-generating
business
Achievements
• ROE 10%
• Withdrew from unprofitable business,
spun off of the Healthcare Business
• Raised the level of corporate governance
to the global standard
2nd Stage
Balancing Growth & Earnings
Reinforcing business foundations
through aggressive investment in
growth areas, such as M&A, and
cost cutting
Achievement
• Increased EPS (earnings per share) from
¥110.7 (FY2003) to ¥185.9 (FY2007)
Notes: 1. U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2012, of ¥82 = $1.
2. EBITDA = Operating income + depreciation and amortization
3. Free cash flow = Net cash provided by operating activities + net cash used in investing activities
4. Cash dividends per share represent the amounts applicable to the respective year, including dividends to be paid after the end of the year.
3rd Stage
Achieving a Growth Structure
Fortification of growth business
(high profitability)
Revision of 3rd stage due to an
abrupt change in the business
environment
Revival Stage
(from February 2009 to March 2011)
• Emergency Measures
(Cost reduction target of approx.
¥63.0 billion achieved in fiscal 2009)
14 months (February 2009–March 2010)
• Structural Reform (Strengthening of profit
base over the medium term) 26 months
• May 2010 Spun off the Automotive
Electronic Components Business
• April 2011 Spun off the Social Systems,
Solutions and Service Business
GLOBE STAGE
(FY2011–FY2013)
Establishment of profit and growth
structures on a global basis
Goals
• Sales: ¥700 billion
• Operating Income: ¥63 billion
• Gross Profit Margin: 39%
• Operating Income Margin: 9%
EARTH STAGE
(FY2014 –FY2020)
New value generation for growth
Goals
• Sales: ¥1 trillion
• Operating Income: ¥150 billion or higher
• Operating Income Margin: 15% or higher
10
Omron Corporation
Integrated Report 2012
11
Omron through the Year
News Releases
Management Topics
April 21
June 1
Release of striped bitterling (acheilognathus
cyanostigma) into on-site biotope employing
purified factory wastewater—contributing to the
protection of regional biodiversity
Establishment of NTT Smile Energy Co., Ltd., as a
joint venture with NTT West to provide services
supporting residential energy savings
June 30
July 1
OMRON Kyoto Taiyo Co., Ltd., receives Monozukuri
Grand Prize from the Society of Plant Engineers
Japan
Deployment of “smart energy savings” throughout
the Omron Group in Japan
September 8
Acquisition of Chinese power latching relay
manufacturer
October
Donation to support victims of flooding in Thailand
March
December 7
NTT Docomo and OMRON Healthcare announce
alliance in health and medical business
January
February
Establishment of regional head office in India and
commencement of operations
First Omron Group manufacturing facility in Mexico
commences production
March 22
March 29
2012
Establishment of joint venture between OMRON
(China) Co., Ltd., and Hangzhou Tongling Automation
Co., Ltd., a Chinese system integrator and sales agent
Receipt of 2012 Grand Prize in Key Firm of Integrity
Awards
Donation of ¥3.11 million provided to the city of Kyoto
as an “Om-Walk” matching gift for reconstruction
following the Great East Japan Earthquake
Consolidated net sales
¥166.6 billion +0.1%
Consolidated operating income ¥10.0 billion
-7.9%
(YoY change)
2011
Q1
April
Consolidated net sales
Consolidated operating income ¥12.2 billion +9.4% Q2
¥151.4 billion + 3.0%
(YoY change)
Consolidated net sales
¥151.8 billion +0.6%
Consolidated operating income ¥10.6 billion -20.8%
(YoY change)
Q3
Consolidated net sales
Consolidated operating income
(YoY change)
¥149.6 billion
¥7.4 billion -41.7% Q4
-2.5%
May
June
July
August
September
October
November December
January
February
March
Product-Related Topics
■ Industrial Automation Business （IAB） ■ Electronic and Mechanical Components Business （EMC）
■ Automotive Electronic Components Business （AEC） ■ Social Systems, Solutions and Service Business (SSB)
■ Healthcare Business (HCB) ■ Other Businesses
July
Launch of new KP K series of power
conditioners, Japan’s first with
built-in multiple-unit “Anti-Islanding
Control Technology (AICOT)”
July 11
Launch of world’s first fiber laser
marker employing flexible pulse
control technology, enabling fine
marking and processing
July
Development and commencement of
mass production of world’s first
connector using electroforming
technology
July 29
Launch of new Sysmac next-genera-
tion machine automation controller
integrating functions needed for
machine control
August 1
Launch of code reader capable of
reading codes on paper and labels
as well as direct markings on metal,
substrates, and glass surfaces
August 1
Launch of simple electricity logger
for reforming energy-saving activi-
ties at manufacturing sites
August 29
Launch of the HDS-2000 Dual Scan
medical instrument for measuring
visceral fat, the first in the world
using the impedance method for
calculating visceral fat areas safely,
simply, and accurately
September 1
Launch of one of the industry’s most
compact rocker switches with the
industry’s first delay/off function
September 1
Launch of MC-680 predictive ther-
mometer capable of detecting tem-
perature in only 15 seconds
September 20
Launch of the HBF-214/212 body
composition monitor, featuring
compact, thin-profile design and
convenient storage
September 20
Launch of BY80S and BY120S com-
pact and lightweight uninterruptible
power supply units with sinusoidal
wave output
Early November
Launch of Multipeak power
monitoring device, the industry’s
first device capable of simultaneous
predictive monitoring of peak power
consumption in business offices and
individual areas
November 1
Launch of HJA-310 Calorie Scan
activity monitor for indicating calorie
reduction necessary to reach
monthly dieting targets and determine
daily effort
December 1
Launch of cutting-edge fiber amplifier
with unparalleled usability, com-
pletely redesigned and with the
industry’s first smart tuning function
December 1
Launch of temperature controller
featuring outstanding visibility
thanks to black-and-white display
and extra-large characters
January 6
Omron Social Solutions Co., Ltd.,
receives Barrier-Free Universal
Design Promotion Merit Award
January 12
Launch of area fan ionizer that is the
thinnest and most lightweight in its
class and for which location is not an
issue
January 20
Launch of next-generation series
device for external monitoring of
post-reflow substrates equipped with
revolutionary image-processing
technology
February 20
Launch of HBP-1600, Japan’s first
spot-check monitor for automatic
transmission to electronic medical
record of blood pressure, tempera-
ture, and other measurement data
March 5
Launch of Smile Scan Tablet, a real-
time facial expression sensor that
determines the extent to which
someone is smiling which has be-
come and has been made easier to
use and can be employed for work
purposes
Fiscal 2012
April 10
Launch of MC-642L women’s basal
thermometer, the first in Japan to
read temperatures in approximately
10 seconds
April 10
Launch of HSL-001 sleep duration
tracker that records the time it takes
users to fall asleep as well as their
total sleep time by reading the
movements of bedding
12
Omron Corporation
Integrated Report 2012
13
Interview with
the President
We Will Aggressively and Quickly
Practice Global Horizontal-Vertical
Matrix Management to Advance the
Measures Set Out in VG2020.
We will not change the main strategies of VG2020.
We will accelerate the plan.
GLOBE STAGE: Goals & Tasks
Policy
Establishment of a global profit and growth structure
Goals
Tasks
(unchanged)
FY2013
Gross profit margin: 39 %; Operating income margin: 9 %; ROE: 11%;
Net sales: approx. ¥700 billion; Operating income: approx. ¥63 billion
(Assumed exchange rates: 1US$ = ¥78; 1EUR = ¥104)
1. Reinforcement of Industrial Automation (IA) business (IAB & EMC)
2. Sales expansion in emerging markets
3. Focus on environmental solutions business
4. Profit structure reform
5. Strengthening global human resources
Yoshihito Yamada
President and CEO
fiscal 2011. We also established Automation Centers in Japan, China, and Europe to strengthen our customer support
network. Through these centers, we will provide manufacturers around the world with products and services that
optimally meet their needs. One of the key strengths of Omron lies in the utilization of its vast expertise in relation to
production lines. This strength enables the Company to offer customers solutions that not only employ its own prod-
ucts, but also effectively combine these products with those of other companies, allowing the Company to provide
customers with optimal value. Omron will further accelerate the development of Automation Centers around the
world, in emerging countries as well as in the United States and other developed nations.
I am certain that the strategies defined by VG2020, such as sales expansion in emerging markets and the reinforcement
of the IA Business, will lead the Company in the right direction.
Q1 The new long-term vision, VG2020, was announced in July 2011. Later, in April 2012,
you revised your targets for the “GLOBE STAGE” (FY2011–2013), the first phase
of this vision, to reflect the drastic changes in the market environment. In what
specific ways were the targets revised?
Drastic changes in the market environment, such as the strong yen and the instability of financial systems in Europe,
forced us to revise our targets for the “GLOBE STAGE” of VG2020. Regardless, I saw no need to adjust the five basic
tasks: (1) reinforcement of the Industrial Automation (IA) Business (IAB & EMC), (2) sales expansion in emerging mar-
kets, (3) focus on the environmental solutions business, (4) profit structure reform, and (5) strengthening global human
resources. Of these tasks, I feel the reinforcement of the IA Business, one of Omron’s clear areas of strength, and
sales expansion in emerging markets are the most important.
This is because of the rising demand for factory automation in manufacturing industries in emerging markets.
In China, for example, soaring personnel expenses, or in other words, fixed costs, are becoming a burden for manage-
ment, which has subsequently become a serious issue. For these reasons, it is growing increasingly difficult to conduct
successful production operations simply by employing a large number of employees. This situation is boosting the
demand for factory automation and is also creating a highly favorable environment for Omron’s business. Aiming to
take advantage of this environment, we increased the number of sales bases in China from approximately 30 to 50 in
GLOBE STAGE Road Map
FY2013 targets: Gross profit margin: 39%;
Operating income margin: 9%, while making necessary strategic investments
GLOBE STAGE
(Billions of yen)
EARTH STAGE
More than
1,000.0
10,000
8,000
6,000
4,000
Initial Plan
655.0
Net Sales
619.5
650.0
750.0
Around
700.0
Gross Profit Margin
36.8%
37.5%
39.0%
2,000
Operating Income
(Operating Income Margin)
55.0
40.1
46.0
0
(6.5%)
2011
(7.1%)
2012
100.0
Around
63.0
(9.0%)
2013
Over
150.0
(15.0%)
2020
(FY)
14
Omron Corporation
Integrated Report 2012
15
Interview with the President
Forging stronger team relations among business lines (vertical) and
between corporate headquarters and business divisions (horizontal)
will allow us to fully demonstrate the power of the Omron Group.
in China, 75% in India, and 30% in other emerging markets. We will utilize the unique strengths of each business and
conduct management with the aim of further cementing the positions these businesses have already established.
The SSB is also an important business to us, and we will strengthen it by promoting coordination between this
business and the Environmental Solutions Business HQ and IAB. The goal of these initiatives will be to create new
environmental solutions businesses for factories and public facilities. I believe this will enable us to generate business
synergies that are characteristic of Omron into the future.
Also, we will forge stronger vertical team relations down business lines and horizontal relations between them and
create new value through the strategic allocation of management resources, including products,
technologies, human resources, and capital. This is an important management strategy that will enable us to fully utilize
the power of the Omron Group.
Q4 You mentioned forging stronger vertical and horizontal team relations. Specifically,
what initiatives are being implemented?
One example is our efforts to expand operations in emerging countries. Omron established regional headquarters in
Japan, the United States, the Netherlands, China, and Singapore to develop a unique global network and services
systems closely linked to each geographical area.
Recently, we have identified India as a key emerging country in growth strategies and for the reinforcement of the
IA business. To enable business divisions in this country to better focus on business operations, we established a new
regional headquarters in India in fiscal 2011. In addition, we established a regional headquarters in Brazil in fiscal 2012. Now,
with seven regional headquarters, we are ready for the full-fledged advancement of operations in emerging countries. In
accelerating our approach toward emerging countries, it will be vitally important to raise the recognition of the Omron brand.
Omron brand billboard advertisement on a road
connecting to an airport in Sao Paulo, Brazil
Q2 Are there any other changes undergone by markets that you view as opportunities?
The changes in the environmental solutions business, one of the key businesses in VG2020, are particularly beneficial.
After the Great East Japan Earthquake, serious electricity shortages occurred, and their persistence has become a
social issue that must be urgently addressed. The ongoing limited electricity supplies are forcing companies and
individuals to think of ways to conserve electricity and reduce usage during peak hours.
One of the responses to this issue has been the rapid expansion in the usage of solar power. In July 2012, the
Government of Japan launched a system for purchasing electricity generated using renewable energy sources, which is
anticipated to greatly stimulate the growth of the solar power market. We are already witnessing the benefits of growth
in this market, as solar power conditioners, which are used to convert power from solar cells from DC to AC, have
experienced a substantial increase in sales, rising 20% year on year
in fiscal 2011. We are also developing a wide range of solar power-
related businesses, including the provision of an integrated system
for monitoring the operation of solar power systems and managing
on-site maintenance by utilizing remote monitoring.
Further, in order to effectively utilize limited electricity supplies, there
is a rising need for a means to control maximum electricity demand
through the usage of energy consumption monitoring
systems. The Omron Group has introduced such systems
and is already seeing impressive results. Also, several
customers have introduced these systems and are experi-
encing favorable results. These market changes represent
significant opportunities for Omron.
Power conditioner for solar power
generation system
Q3 Focusing on the IA Business will be one of your key strategies. What are your plans
for other business areas?
That is a question often asked by people from both inside and outside the Company. Other businesses, too, are
important to Omron.
Currently, our Automotive Electronic Components Business (AEC), Social Systems, Solutions and Service Business
(SSB), and Healthcare Business (HCB) are run as independent (spin-off) companies, each of which has established
its own unique position in its respective business domains. We believe it is important to target growth for these
businesses that matches their individual characteristics. Faced with harsh market conditions, we implemented
initiatives in these three businesses to accelerate business development through faster decision making. Targeting
further acceleration, we delegated responsibility for these businesses in an appropriate manner to enable more-optimal
business operation. The effects are beginning to appear in various areas. The previously unprofitable AEC saw significant
improvements, and in fiscal 2011, it had an operating income margin of 3.2%, despite the impact of the severe flooding
in Thailand. In fiscal 2012, we anticipate this business will become stronger and will record a margin of 5.3% (forecasts
released on July 30, 2012), which is an exceptionally high level for the automotive industry. The HCB, meanwhile, will
be operated in a manner prioritizing speed and close connections with the sites where our products are used. Through
such management, we will work to meet our ambitious goals for fiscal 2012 of improving sales by approximately 15%
16
Omron Corporation
Integrated Report 2012
17
Free blood pressure testing provided in Delhi, India
Billboard advertisement for Omron’s blood pressure monitors in India
Interview with the President
In pursuing stronger growth, we will strengthen intergroup connections
under the mantra of “Team Omron.”
in the future. Currently, Omron has defined 167 core positions, 59 of which are based overseas. Forty of these positions
are currently filled with Japanese people, with only 19 held by people from other countries. Looking ahead, we realize
that strengthening local management will be essential to continuing our operations as we progressively globalize. For
this reason, I aim to reverse this ratio in the near future.
Accordingly, we will develop an in-house environment conducive to providing such opportunities. I hope employees
will take advantage of these opportunities, and from such motivated employees, the executive management team at
headquarters will be able to find candidates for the next generation of management.
Q6 Lastly, how do you plan to demonstrate your own strengths into Omron’s future
management initiatives? What do you think is most important in management?
I think my own strengths lie in my ability to encourage team building and my management background in international
operations. In the past, I served as president of the Omron Healthcare Europe. During this period, I came to realize the
importance of respecting diversity in team building efforts. The management team consisted of 11 people from six
different countries, three of whom were women. A startling number of opinions were raised and discussions were
grueling but very fruitful. Together, we undertook many challenges, including expansion into the Russian market, and
we were able to succeed thanks to our strong sense of unity. These experiences help me in promoting team building
today. Developing a mutual understanding between all members is of the utmost importance in raising team spirit. This
requires substantial discussion. In this practice, I am always sure to thoroughly listen to others. Drawing on my own
strengths, I will actively gather information from both internal and external sources, be decisive, and work to make
Omron’s management more ever dynamic.
We are working to strengthen intergroup bonds of “Team Omron,” with the aim of guaranteeing even firmer growth
into the future. The management team are leading these efforts as a core part of Team Omron.
At the same time, each business division has their own version of Team Omron. Team Omron holds open discussions
without fear of opposition, and all members work hard together to accomplish the same shared goal. I compare this
type of team work to a shinkansen bullet train. A shinkansen cannot head toward its goal at full speed if all its cars are not
securely connected. Likewise, it is not sufficient for the organization to only be connected within divisions, and this is
why we place such a strong emphasis on promoting connections between business divisions and corporate headquarters
divisions. Going forward, Team Omron will keep running at full speed, heading toward the achievement of the goals
outlined in VG2020.
The HCB currently operates in more than 110 countries. The business-to-consumer (B2C) business is playing an integral
role in raising awareness of the Omron brand. To make Omron known, people must first see our products and under-
stand our technological superiority. Our Omron brand healthcare products embody our philosophies and technological
capabilities. Accordingly, marketing these products and promoting their use in new markets enables us to establish a
bridgehead that will facilitate the introduction of our IAB, AEC, or other business-to-business (B2B) businesses in these
countries.
These brand strategies targeting emerging countries will be conducted by promoting coordination between business
lines and the corporate communications department in headquarters, and through these strategies we will work to raise
brand recognition among consumers in these countries. It has been said, that if brand recognition* among consumers
exceeds 40%, it will represent a significant advantage for expanding operations in these countries. By targeting this goal
of 40%, we have succeeded in raising brand recognition in India from 24% in fiscal 2011 to 45% today. Enhanced brand
recognition has proven to be incredibly beneficial in accelerating the development of our various businesses in the Indian
market. In Brazil, where we started full-fledged brand marketing one year after doing so in India, we have already
achieved brand recognition of approximately 20%. This is an example of the success of coordination between the HCB
and corporate headquarters divisions in establishing a superior position in emerging countries.
* Brand recognition is calculated as the percentage of people that recognize Omron’s logo and have an understanding of Omron’s business activities.
Q5 How about human resources strategies?
What specific measures are you considering?
VG2020 defines developing human resources as an important
management strategy for ensuring future growth. If we are able
to develop a strong team of superior personnel, the growth of
our business will become even stronger. We therefore aim to
grow our human resources in conjunction with our business
growth. In other words, we want to provide new and challenging
opportunities for employees who do exemplary work, and we
want to grow as a company that can continue to provide such
opportunities. For us to grow as such a company, it is important
to emphasize the development of human resources in manage-
ment, and for this reason we have defined the task of strength-
ening global human resources in VG2020.
At the same time, it is important for all employees to establish
their own visions for their future career path. I do not doubt we
will have to compete on the global stage in the future. For this
reason, I hope every employee will have a clear picture of what
work they wish to do in what part of the world.
One specific human resources strategy we have developed is
the Global Core Position Strategy, which was born out of our
desire to actively provide opportunities to non-Japanese employ-
ees by allowing them to participate in management. We have
defined management positions critical to advancing the VG2020
strategies as “core positions.” We intend to discover, promote,
and educate human resources that can take over these positions
18
Omron Corporation
Integrated Report 2012
19
Special
Feature
Global Vertical-Horizontal Matrix Management
Striving to Create New Value through
Linkages down Business Lines (Vertical)
and between Corporate Headquarters and
Business Divisions (Horizontal)
01
Competition is growing more intense in global markets, particularly in emerging economies.
To more firmly establish its competitive advantage, the Omron Group is forging stronger vertical
team relations down its business lines and horizontal linkages between corporate headquarters and
business divisions with the aim of accelerating management. This section looks at the strengths
and strategies of each of our businesses through the lens of matrix management and introduces the
roles of our head office divisions.
(Interviewer: Satoshi Ando, Executive Officer, Senior General Manager, Investor Relations
Headquarters)
Industrial Automation Business (IAB) ——
Further Reinforcing Operations on the
Basis of Three Core Strategies
—— To begin, could you please outline IAB’s
strengths and competitive advantages?
Fujimoto: We are working to boost competitiveness
through three core strategies: “No. 1 in control,” “No. 1 in
product lineup,” and “No. 1 in the future.”
For our “No. 1 in control” strategy, the key is changing
the culture of controls. Under this strategy, we are pro-
moting machine controls that are faster, more precise,
and safe. Our strength in this area is robust machine-
focused engineering. The “No. 1 in product lineup”
strategy emphasizes extending our product lines by
reducing costs on general-purpose products and through
radical changes on a variety of fronts. Our “No. 1 in the
future” strategy refers to anticipating customer needs
and offering proposals that meet those latent demands,
such as by addressing the issue of conserving energy.
Demand for power-saving solutions is increasing through-
out the manufacturing sector, and we have specific
expertise in this area.
—— To bolster your engineering and strengthen
your ability to provide higher added-value
proposals, do you intend to continue pursuing
a strategy of increasing the number of SEs and
acquiring companies in China?
Fujimoto: In the previous fiscal year, we increased the
number of SEs in emerging markets by approximately
50%; the question now is how to enhance their capabili-
ties further. We will also continue looking at M&A and
collaboration opportunities in fields that we are unable to
develop on our own.
—— Please explain more specifically what is
meant by Omron’s “ability to connect” in ways
that other companies cannot.
Fujimoto: One good example is to connect all the highly
sophisticated products on the same network. Through
our Sysmac NJ Series, which I described earlier, we aim
to change the culture of controllers. Going forward, we
also plan to connect to an increasing number of safety-
related products that could not be connected in the past.
Electronic and Mechanical
Components Business (EMC) ——
Monozukuri (Product Creation) Is a
Competitive Advantage That Other
Companies Cannot Emulate
Industrial
Automation
Business
(IAB)
Shigeki Fujimoto
Senior Managing Officer
President, Industrial Automation
Company
The above-mentioned title
is as of the date of this
dialogue (June 20, 2012).
—— What are IAB’s core products?
Fujimoto: Last year, we launched Sysmac NJ Series
controllers that are based on an automation platform for
connecting ultrahigh-speed, high-precision machinery and
controlling them via a single software program. In the
current fiscal year, we expect to expand this series
further as one of our “No. 1 in control” products. Global
standard products are the concept behind our “No. 1 in
product lineup” strategy. In line with this approach, we
plan to steadily roll out products that match the needs of
emerging and other world markets. We are also cultivating
environment-related equipment, such as electricity sensors
and their controllers, as “No. 1 in the future” products.
—— Could you describe IAB’s core technologies?
Fujimoto: Our core technologies provide functionality
that competitors are unable to match. These technologies
effectively utilize general-purpose products and elements
and take advantage of the capabilities of software, and
are the product of countless development processes
conducted in the pursuit of higher levels of functionality.
Moreover, these technologies enable us to create prod-
ucts more inexpensively, holding down costs without
sacrificing quality.
Aiming to Heighten Our Engineering
Prowess through Means such as M&A and
Collaboration
—— What are the issues you face in enhancing
competitiveness further?
Fujimoto: Strengthening our ability to provide proposals
related to sophisticated control products is extremely
difficult, and we face the issue of how to cultivate sales
engineers (SEs) who are well versed in various equip-
ment in a short period of time. Another important issue
lies in being responsive cost-wise in global markets
across our product portfolio. We are working to hold
down development costs by standardizing product
development and creating system platforms that utilize
our products in a standard manner.
20
Omron Corporation
Integrated Report 2012
21
Electronic and
Mechanical Components
Business
(EMC)
Koichi Tada
Managing Officer
Company President,
Electronic and
Mechanical Components
Company
—— Next, please outline the strengths and
business strategies of EMC.
Tada: In fiscal 2012, we plan to aggressively develop our
business in components for industrial equipment, cen-
tered on rapidly growing emerging markets, thereby
recovering our growth and profitability. We will also
concentrate initiatives in the energy and environment
field. In particular, electric vehicles and solar power
generation systems. We intend to enhance competitive-
ness by taking advantage of the broad and finely gauged
global sales network that Omron has built to date and
utilize our manufacturing capabilities, including propri-
etary product design capabilities, materials technologies,
and optimizing technologies based on monozukuri.
Targeting an unshakeable Lead in
Global Market Share
—— What are the core technologies that sup-
port the mainstay relay component segment?
Tada: We hold the top share of the global market for
relay components. Our market share in this area was
more than 20% in the previous fiscal year,* but we are
the leader by only a small margin.* We will work at
increasing our lead.
* Based on Omron’s estimates
In EMC, most of our products endup inside our
customers’ products, so prices are heavily influenced by
fluctuations in the market prices of final products. The
key therefore becomes how to meet our customers’
needs as reasonably as possible. Furthermore, we must
ensure stable product quality. In the past, half of the
relay products that we manufactured in China and other
Asian countries were labor-intensive, which means they
were variable in quality. Now, we are introducing
automated equipment to handle this production in a bid
to make quality more consistent.
——You have described the Company’s
competitiveness and sales and technological
capabilities in key product areas. What are
your thoughts on the business environment?
Tada: The current business environment is tight, but at
the same time it offers opportunities. For example, in
Asia, social security expenses are expected to rise in the
neighborhood of 15% to 25% per year, on average. From
a manufacturing viewpoint, this means higher labor
costs. However, if customers further automated their
operations to counter these labor costs, this presents a
business opportunity for our industrial automation and
electronic components businesses. It is important to take
advantage of the opportunities created by demand trends
driven by changing business environments in China and
other Asian countries.
Healthcare Business (HCB) ——
Expanding Four Core Categories through
an Extensive Sales Network
—— Next, would you explain the Company’s
strengths and competitiveness in HCB?
Miyata: Our sales network is made up of some 300,000
pharmacies throughout the world. In the field of home
healthcare instruments, no other company has a network
that can match ours. We are utilizing this strength to
expand our business in four core categories: blood pres-
sure monitors, thermometers, blood glucose monitors,
and nebulizers. We are also developing new technologies
that allow bio data to be measured at home, formerly a
procedure that could only be done at medical institutions.
The key is to make the best use of our competitive edge
in sales and R&D.
—— Global competition seems to be less
pronounced in HCB than in the IAB and EMC.
What will be the keys to winning out against
local competition?
Miyata: The other day, I went to India, where some 50
competitors provide blood pressure monitors. This situa-
tion brought home to me anew the importance of Omron’s
brand penetration. In addition to measurement precision,
we will work aggressively to disseminate other informa-
01 Global Vertical-Horizontal Matrix Management
of the production technologies of the Electronic and
Mechanical Components Business. Forging links such as
this have been extremely effective. Also, the corporate
headquarters public relations division has supported
efforts to boost our brand recognition on a global level,
which has made our activities easier.
Global Strategy Headquarters ——
Maximizing Management Resources
by Combining Vertical and Horizontal
Elements
—— Please explain the Global Strategy Head-
quarters’ mission and role in implementing
vertical and horizontal strategies.
Miyanaga: We adopted a system of business companies
more than 10 years ago, making our business divisions
autonomous. The goal behind this move was to acceler-
ate business operations. This move has been successful
to some extent, but VG2020 calls for us to make greater
leaps forward. To achieve this, we will need to utilize the
strengths of our global businesses through connections
that go beyond the vertical and horizontal barriers.
The Global Strategy Headquarters carries out the
following three roles in attaining this goal.
Healthcare Business
(HCB)
Kiichiro Miyata
Managing Officer
President and CEO,
OMRON Healthcare Co., Ltd.
tion on product quality that is only available through Om-
ron, thereby ensuring the reliability of our brand.
—— One of your core products is blood pres-
sure monitors, and according to your own esti-
mates you have shares of around 50% of the
global market, approximately 60% in Japan, and
more than 60% in China. What is the core tech-
nology that supports this strength? Also, what
are your strategies for further increasing this
market share?
Miyata: For blood pressure monitors, on the hardware
front measurement precision and ease of use are para-
mount. For example, to reduce the impact that such
conditions as arm thickness and softness have on mea-
sured results, we have developed a sensing and control
technology that responds to individual differences. We
also continue to pursue efforts that improve ease of use,
such as narrower cuffs that are easier to wrap around the
arm. Based on the concept of providing products that are
easy for anybody to use to provide accurate measure-
ments, we are accelerating the popularization of the
“Medical Link” system for providing blood pressure data
measured at home to healthcare institutions, where it
can be assessed by physicians and other specialists. In
this way, we are building up an unassailable business
base from the perspectives of products as well as ser-
vices and systems.
—— HCB is driving one of the VG2020
strategies, “growth in emerging markets.” Have
horizontal and vertical relationships in this busi-
ness changed?
Miyata: Operational speed has picked up through proac-
tive contributions on the horizontal axis from corporate
headquarters. Nowadays, we are able to make effective
use of information on other business lines’ products and
technologies, whereas we were unaware of this informa-
tion in the past. For example, we are moving forward
with production line automation at a rate that develop-
ment personnel in the healthcare sector would have
been unable to handle in the past by taking advantage
22
Omron Corporation
Integrated Report 2012
23
(1) Strategically distributing and allocating strategic
resources
(2) Creating a system of global vertical-horizontal
matrix management
(3) Communicating our strategies both within and
outside the Omron Group
Prioritizing Efficient Investment
—— What has changed, or that you are
working to change, as a result of your new
structure and strategies?
Miyanaga: One element is prioritizing investment. We
are earmarking investment for the further development
of existing businesses, such as industrial automation and
businesses in emerging markets, as well as environmen-
tal businesses and other new businesses. We are also
thinking of expanding our manufacturing structure to
achieve global growth, centered on Asia. By making
capital investments that outpace depreciation and amorti-
zation, we will augment our growth potential and cost-
competitiveness. We are also planning around ¥10 billion
in strategic investment, centered on IA. Furthermore, we
will overhaul our manage ment council by creating a
structure that brings together the heads of our business
Global Strategy
Headquarters
Yutaka Miyanaga
Executive Officer
Senior General Manager,
Global Strategy Headquarters
divisions and head office divisions to enable swifter
decision making.
In the previous fiscal year, we set up a regional head-
quarters in India. This year, we set up a headquarters in
Brazil. Whereas in the past each business line had its
own human resources and administrative functions, the
new structure will provide a package that offers support
for these infrastructure and brand strategy development
functions. Initiatives involving these horizontal functions
are another major change.
Global Resource Management
Headquarters (GRM) ——
Human Resource Strategy to Cultivate
Global Management Resources
—— In closing, could you please outline the
major initiatives of GRM?
Nitto: Our most important initiatives concern human
resources strategy. In addition to rejuvenating our
management team, our initiatives will take a bird’s-eye
view toward the next decade. We will build a structure to
cultivate management resources on a global basis for the
next generation and the generation after that. We have
identified 167 global core positions. We will fill these
positions through both internal training and external
recruiting by determining who is most suitable for these
positions, during what span, and based on what level of
experience. Also, the Company plans to move
aggressively toward assigning locally hired personnel to
core positions.
—— What are your other points of focus?
Nitto: My missions include strategic cash management
and risk management. In the past, the allocation of funds
and real estate tended to be on the basis of vertical
management. We will shift to a more centralized financial
strategy that includes making more-effective use of
management resources. Globally, the risks that we face
are growing, including sudden fluctuations in the eco-
nomic environment and the risk of natural disasters. We
will strive to create structures and systems that avoid
these risks and minimize the damage they cause to
ensure our business divisions can move ahead securely.
01 Global Vertical-Horizontal Matrix Management
—— What will be focuses for the Global
Resource Management Headquarters?
Nitto: We need to embrace diversity wholeheartedly. In
addition to promoting non-Japanese personnel, the key
to our current strategy lies in how to make Japanese
people, as well as Japan itself, more global.
At the same time, there is no point in pursuing diver-
sity if this simply results in fragmentation. It will be
important to maintain the binding force of our corporate
principles. I believe the Company excels in remaining true
to its corporate principles, but this is because we have
management strategies that are fully based on our corpo-
rate principles. Promoting diversity will be a major chal-
lenge, but I believe we can achieve this goal as long as
we rely on our corporate principles as the binding force.
—— We hope these interviews have assisted in
deepening the readers’ understanding of the
Omron Group’s efforts to realize the goals of
VG2020 as well as the possibilities of vertical-
horizontal matrix management.
Global Resource
Management Headquarters
(GRM)
Koji Nitto
Executive Officer
Senior General Manager,
Global Resource
Management Headquarters
Interviewer
Satoshi Ando
Executive Officer, Senior General Manager,
Investor Relations Headquarters
Cultivating New Markets That Engender
Synergies between Businesses
—— Please provide some examples of efforts
you are making to foster ties between business
lines.
Fujimoto: Let us look at relays for solar batteries. These
are manufactured by EMC and sold by IAB, so we natu-
rally need to pursue a joint strategy. EMC excels at manu-
facturing products, while IAB has marketing expertise. By
combining these two strengths, we can move into en-
tirely new markets.
As another example, when IAB aims to move into
emerging markets, the division can benefit from the solid
expertise of HCB, which was an early entrant into these
markets, working to firmly established the Omron brand
there. This situation is extremely favorable.
—— What will be the focuses for the
Global Strategy Headquarters going forward?
Miyanaga: When making decisions, I believe we will need
to strike a balance between stable, incremental improve-
ment and rapid, drastic progress.
From the standpoint of stable, incremental improve-
ment, from our manufacturing processes to the manage-
ment of our global operating performance, it is important
to make ongoing improvements in various business
processes based on the knowledge we gain through our
everyday activities. Conversely, in achieving rapid, drastic
progress, innovation is needed when delving into alto-
gether new products and businesses and developing the
unparalleled cost structures that will be necessary to
succeed in global markets and achive a competitive
advantage.
24
Omron Corporation
Integrated Report 2012
25
Special
Feature
Omron’s Supply Responsibility and Business Continuity
We will fulfill our social responsibility by
creating a business structure that is resilient
to changes in the external environment and
strong in the face of risks.
02
Kiyoshi Yoshikawa
Executive Officer
Senior General Manager,
Global Process Innovation
Headquarters
Amid the Great East Japan Earthquake and the flooding in Thailand, we moved forward on
initiatives to minimize risks. To this end, we sought to decentralize parts procurement risk
and standardize equipment and information systems.
—— Please describe the roles and objectives of
the Global Process Innovation Headquarters.
At Omron, each business division conducts planning,
development, production, and sales in a vertical line, but
the Global Process Innovation Headquarters takes a
horizontal, Companywide approach and has the role of
improving all steps of business processes on a global
basis. Its objective is to improve development, produc-
tion, purchasing, and quality management and further
strengthen each of these processes. To provide total
optimization, the unit functions as a corporate headquar-
ters division and is involved in logistics, IT, and other infra-
structure activities.
—— These major disasters were of course
unexpected. Could you please describe their
impact on the Omron Group and responses of
the Global Process Innovation Headquarters?
The Great East Japan Earthquake, which struck in March
2011, directly affected our sales, maintenance, and
service functions in the Tohoku region. Our production
functions were not directly affected, partly because we
do not have any factories in the Tohoku region. However,
many semiconductor and electronic components manu-
facturers are clustered in Tohoku, and more than 100 of
the suppliers upon which the Omron Group relies were
affected by the disaster. This situation affected our sup-
plies of more than 16,000 parts, so the damage to our
parts procurement network was extensive.
Following the earthquake, we quickly set up a Compa-
nywide disaster response headquarters, centered on
President Yamada, who was head of the Group strategy
department at the time. We launched a Procurement Task
Force, and the Global Process Innovation Headquarters
took on the role of promoting its measures throughout
the organization. We formed project teams comprising
—— After that point, faced with the flooding in
Thailand you were able to procure parts and turn
to alternative sources of production in a rela-
tively short time. Was putting these fundamental
measures into action a case of applying the
lessons the Company had learned as a result of
the Great East Japan Earthquake?
The factory of the Automotive Electronic Components
(AEC) Business was hit directly and severely by the
flooding in Thailand. Some 25 suppliers were affected,
many of them companies that provide us with general-
purpose electronic components, so we felt the effects
over a broad range of businesses. Ultimately, we esti-
mated the impact to have been on a similar scale to that
of the earthquake. However, because we had a complete
list of which parts were used for which products that we
could utilize in the aftermath of the earthquake, we were
able to respond in around two-thirds of the amount of
time that was needed following the earthquake.
—— I understand AEC was the main focus of
recovery and restoration work at your plants in
Thailand. What support did the Global Process
Innovation Headquarters provide?
Business divisions handled the on-site reconstruction and
recovery work themselves; as in the case of the earth-
quake, we took the lead on parts supply measures. We
also provided logistical support as well as support on the
equipment production front when it was urgently need-
ed. The Global Process Innovation Headquarters dis-
patched personnel to China and other parts of Asia with
the aim of facilitating adjustments on a global basis,
including the sourcing of alternative parts and communi-
cation with individual plants.
the heads of purchasing from each business division to
pursue the task force’s initiatives.
First, we worked to meet our responsibility for supply-
ing products and services to our customers. To this
extent, we determined which products were at risk in
terms of procurement and developed measures to mini-
mize these risks. We soon recognized that in addition to
the general-purpose items used in semiconductors and
electronic components, Omron’s proprietary, custom-
made products were subject to substantial risk. Even
though we gathered information from our suppliers on a
daily basis, it was difficult to judge exactly when produc-
tion could recommence. Therefore, we made a Group-
wide decision to place bulk orders for these items,
particularly semi conductors and custom electronic com-
ponents, which entailed exposure to risks as these items
were not returnable.
—— What sort of initiatives did you enact as
next steps?
At an early stage, the disaster response headquarters
recognized it would be difficult to continue production on our
previous scale for a certain length of time. We made the
management decision to give the highest weighting to
business in the medical sector and involving social infrastruc-
ture, followed by businesses of high strategic importance,
and we prioritized products for each business division.
Next, we introduced design changes and alternatives
for key parts for which suppliers did not have inventories
or were unable to supply. We presented delivery time
recovery plans to our customers and asked them to
accept postponed deliveries for orders that were not
urgent or to accept delivery of alternative products. Our
salespeople pulled together to work out adjustments
with customers around the world.
—— I understand these initiatives ultimately
evolved into structural reforms. Can you offer
specific examples of their results?
Afterward, we adopted a strategic and continuous approach
to management, identifying the social responsibility of
each of our businesses, prioritizing business strategies,
and clarifying which products could be discontinued and
replaced with new items. We also promoted the transi-
tion to new generations of products due to business
continuity concerns in the aftermath of the earthquake.
This switching from older products to newer alternatives
was a move that in some cases we had been unable to
accomplish beforehand. At the same time, when revising
designs we encouraged an approach toward product
standardization.
26
Omron Corporation
Integrated Report 2012
27
—— It seems that you are enacting Company-
wide initiatives, including risk response, stan-
dardizing production, and utilizing universal
product coding.
As a measure to quickly restore the production of key
products, under which, in the event that existing facilities
are hit by a major disaster, other manufacturing bases
compensate for this loss in production capacity. In this
sense, standardizing facilities and information systems is
important. In other words, we need to pursue initiatives
that step up our ability to shift to alternative production
given a variety of scenarios. We can postulate a variety of
disasters that may occur in the future, but I believe we
have created a structure that will allow us to respond
flexibly. I consider this readiness to be a major source of
Omron’s competitiveness.
—— Please describe the status of the Omron
energy-saving measures and systems that the
Environmental Solutions Business HQ intro-
duced to address electricity supply shortages
and encourage energy-saving measures.
We responded to the need for electricity-saving mea-
sures in the summer of 2011 by introducing our energy
savings monitoring system*1 at all 21 of our locations
throughout Japan, allowing us to monitor electricity use
at multiple locations. These systems went into operation
on July 1, 2011. We were able to visualize, in real time,
the total amount of power being used at our facilities by
individual power company service area by our three
facilities in the Tokyo Electric Power Co., Ltd.’s service
area, for example, or by the six facilities in the Kansai
Electric Power Co., Inc.’s service area. By making this
Optimizing CO2 reductions by making waste and inefficiencies visible
information visible, the system enabled us to implement
measures to reduce peak power consumption.This year,
we continued these initiatives, which we dubbed “Smart
Power Savings.”* In the summer of 2011, Smart Power
Savings activities led us to reduce peak electricity con-
sumption in the Kansai Electric service area by 22%
compared with fiscal 2010 levels. Reinforcing our own
power generation systems accounted for 6 percentage
points of this amount and “eco-monozukuri (eco-product
creation)*2” for the remaining 16 percentage points.
These measures had the effect of curtailing the amount
of power used at production sites. In the summer of
2012, we will continue with Smart Power Savings initia-
tives, combined with advanced eco-monozukuri. Through
these endeavors, we expect to reduce power consump-
tion by more than 25% compared with fiscal 2010.
*
Smart Power Savings: Omron’s name for proprietary energy-saving measures
being pursued throughout the Company, comprising the following two initiatives:
*1 Energy savings monitoring system: This is a system for monitoring and reducing
peak electricity consumption throughout a specific area.
*2 Eco-monozukuri: Reducing electricity used in manufacturing by improving
production facility operations
Details of our business continuity plan (BCP) and business involving energy-saving
measures are available on our website.
http://www.omron.co.jp/green-automation/trend/bcp/
—— Updating the BCP must certainly have
been a management priority following the
Great East Japan Earthquake and the flooding
in Thailand. Could you outline some specific
BCP-related initiatives?
Omron’s fundamental BCP policy has three main thrusts:
protecting the safety of people, cooperating across the
board in maintaining and restoring social infrastructure,
and minimizing any impact on our customers and Omron’s
businesses. In developing disaster response plans, it is not
sufficient to merely focus on short-term reconstruction
02 Omron’s Supply Responsibility and Business Continuity
Energy savings monitoring system
M2M data center
Uniform electricity consumption management
Factory A
Branch
Internet
transmission
FOMA
communications
Factory B
Factory C
We recognize that “supply
responsibility” is a management priority
for a manufacturer and understand that
fulfilling this responsibility leads to
enhanced corporate value.
Headquarters function
after a disaster, concluding efforts after a sufficient level of
reconstruction is achieved. Rather, we must work vigilantly
on an ongoing basis to ensure that we can minimize the
risks of any future disasters that may occur. Accordingly,
after having experienced last year’s earthquake and flood-
ing in Thailand, I believe we need to conduct a full review
of our initiatives, addressing additional issues and creating
a business structure that is more resilient to changes in
the external environment and stronger in the face of risks.
—— In closing, what was it that inspired you
to go to such lengths to fulfill your “supply
responsibility” as a manufacturer?
If our business divisions and headquarters networks
function smoothly on a daily basis, the moment we
detect an issue that could have a major impact on our
business we can pull together to respond quickly on a
Companywide basis. In the face of the crises that we
have recently experienced, I believe that each employee
has gained a greater recognition of their responsibility to
our businesses. The back ground for this realization is one
of the Omron Principles, of “contributing to society
through business.” Even if recovery measures cause prof-
its to drop temporarily, as a manufacturer we must focus
on meeting the important responsibility of continuing to
supply products and services to our customers. Our core
thinking is that meeting this responsibility ultimately
leads to enhanced corporate value. Going forward, as we
continue to prepare against risks, we need to redouble
our efforts to meet our responsibilities as a company and
realize growth.
28
Omron Corporation
Integrated Report 2012
29
Business Segments and Key Products
Industrial Automation
Business
IAB provides a wide spectrum of devices neces-
sary for the optimal operation of manufacturing
equipment, products ranging from sensors,
control devices, and all types of inspection and
processing equipment to equipment meeting the
growing demand for products to enhance worker
safety and environmental products that contribute
to improving energy efficiency. IAB’s wide-ranging
product lineup, which is number one in the
industry,*1 supports the manufacturing innovation
of customers around
the world.
*1 As of August 2012,
Omron internal survey
Electronic and Mechanical
Components Business
EMC’s strength is its advanced monozukuri
technology in each stage from product design to
materials, metal molds, product processing, and
assembly. It has fostered wide-ranging expertise
through the production of its vast array of relays,
switches, connectors, and other components
utilized in consumer appliances, telecommunica-
tions equipment, mobile devices, amusement
devices, office automation (OA), and other
equipment.
Automotive Electronic
Components Business
AEC is an active contributor to the rapidly advanc-
ing car electronics market that aims to realize a
safe, comfortable, and environmentally friendly
automotive society. The company supplies all
types of controllers, sensors, switches, and other
components to automakers and electrical equip-
ment producers around the world. AEC provides
the sensing and control technology for the future
of auto manufacturing.
The top provider of control equipment for the manufacturing industry
in Japan*1 and supporting manufacturing innovation worldwide
Segment Information >>
36
IAB’s product lines comprise devices for sensing lighting, imaging, vibration, temperature and humidity levels, location, speed, and
other data necessary for the operation of manufacturing equipment; control and motion devices that process large volumes of data
into meaningful and useful information and execute optimal control; and display and operating devices that monitor the control
status at the production site and enable configuration and adjustment. Interconnecting IAB’s devices for data communication
enables high-speed, high-precision control to contribute to enhancing “quality, safety, and the environment” at the production site.
Display and
Operating Devices
Nerve System =
Network
Indicator Display
Equipment
Senses=
Sensing
Devices
Brain=
Control
Equipment
Limbs=
Motion Devices and
Drives
Vision Sensors
Photoelectric
Sensors
Temperature
Controllers
Programmable
Logic
Controllers
Servomotors and
Servo Drivers
Proximity Sensors
Power Supply
Units
Position Control
Units
Inverters
Network
Automated
Optical
Inspection
(AOI) Devices
Laser Repair
Devices for
Liquid-Crystal
Applications
• Safety Equipment
IAB’s safety equipment meets
international safety standards
and contributes to the creation
of a safe workplace environment
by automatically sounding an
alarm or safely shutting down
machinery when a worker
enters a defined danger zone
in a factory.
• Environmental Equipment
IAB’s environmental equipment provides
constant monitoring of manufacturing
environment data, such as the presence
of foreign particles and temperature and
humidity levels, and provides analysis of
electric power consumption data, thereby
contributing to maintaining product quality
standards while also providing data to help
reduce excess power consumption and
improve energy efficiency.
Air Cleaning Units
Safety Controllers
Safety Door Switches
Safety Sensors
Air Thermal Sensors
Air Particle Sensors
Ionizers
A provider of ever-improving digital components to a wide range of
industries, leveraging monozukuri technology
Segment Information >>
38
• Relays and Switches
• OKAO Vision
• Connectors
• Sensors and Modules
Surface-Mounting
High-Frequency Relays
OKAO Vision is gaining wide use
as a technology for correct ing
exposure in digital photography
and brightness in photo printing,
and its face recognition capability
is used in mobile phone user
verification as well as estimating
age and determining gender.
Connectors are used as an interface
between electronic devices and are widely
used in mobile devices, industrial equip-
ment, and other electronics.
We respond to various needs from the
amusement industry and needs for video
equipment with higher specs.
Flexible Optical
Distribution Modules
Power Supply Unit for
Amusement Devices
Surface Mount
Switches
OKAO Vision Facial
Image Sensing
FPC Connectors
Relays are composed of electromag-
nets that convert electric signals to
mechanical movement and switches
that turn electricity on and off. Relays
and switches are used in virtually
all electric and electronic devices,
including refrigerators, microwave
ovens, and air conditioners.
Contributing to the creation of safe and comfortable automobiles
worldwide
• Transmitter Key & Engine Start Systems
Segment Information >>
40
• Automotive Switches /
• Electric Power Steering
Controllers
Controllers
AEC supplies multi-function control units
that integrate control of diverse automobile
body features, including switches to
automatically open and close power
windows, lock and unlock doors, and turn
on and off windshield wipers, using
multiple communication technologies.
Electric power steering controllers are
equipped with high-output and high-preci-
sion sensing functions to enable smooth
steering. These devices help achieve
energy savings and better mileage.
Electric Power Steering Controllers
Transmitter Key
Entry systems enable car doors to be locked
and unlocked by touching the door handle or
pressing a switch for the door without taking
out the transmitter key.
Engine start systems enable car engines to be started or
shut down by pressing a switch from the driver’s seat of
the car without taking the transmitter key out of one’s bag.
Power Window
Switches
30
Omron Corporation
Integrated Report 2012
31
EMCAECIAB Japan’s No. 1*2 supplier of railway infrastructure systems and creator
of a wide variety of social systems
Segment Information >>
42
• Train Station Solutions
• Social Sensing
• Road Traffic Solutions
SSB provides systems solutions, including the
newest models for automated ticket gates and
ticket vending machines using universal designs,
to increase the comfort and efficiency of train
stations.
Sensors located in public settings
gather data on the movement and
conditions of people, automobiles,
and other objects and provide opti-
mal information to people and
control equipment.
In addition to control systems for traffic volumes and traffic conditions, SSB
is developing next-generation traffic safety systems designed to prevent
accidents by transmitting data on pedestrians, bicycles, and other objects
collected by sensors to nearby vehicles.
Social Systems, Solutions
and Service Business
SSB provides a wide variety of systems to
support social infrastructure centering on railway
and traffic control systems. Recently, SSB has
been a major contributor of IC card equipment for
railway systems, building on its position as the top
domestic supplier of automated ticket gates and
ticket vending machines. The company has further
expanded its business scope to contribute to the
realization of a safe, secure, and comfortable soci-
ety through innovative solutions utilizing image
sensing technologies.
*2 As of August 2012,
Omron internal survey
Automated Ticket Gates
Ticket Vending Machines
Smile Scans
Traffic Control Systems
Healthcare Business
Global No. 1*3 market share for digital home blood pressure monitors
and a wide range of products and services for treating lifestyle-related diseases
Segment Information >>
44
• Healthcare & Medical Devices for Home use
• Medical Equipment for Hospital use
HCB provides equipment and services worldwide
for personal and professional use to support the
disease prevention, treatment, and health im-
provement fields. The company’s home blood
pressure monitors command top market shares,
with more than 60%*3 of the domestic market
and more than 50%*3 of the global market. HCB’s
bio-information sensing technology has made it a
leader in the home healthcare market, and it is
taking on the new challenge of supporting daily
personal health management all over the world.
*3 As of August 2012,
Omron internal survey
HCB supports the health of
individuals by connecting daily
personal health management at
home and disease management
at medical institutions.
Sleep Sensors
Body Composition Monitors
Thermometers
Body Glucose Meters
Spot Check Monitors
Blood Pressure Monitors
Activity Monitors
Portable Electrocardiogram (ECG) Monitors
Nebulizers
Central Monitors
Non-Invasive Vascular
Screening Devices
Other Businesses
Discovering and fostering new business opportunities for achieving
group growth strategies
• LCD Backlights
• Micro Devices
• Energy-Saving Solutions
The Other segment explores and develops
new businesses outside the realm of the main
five segments. The segment’s Environmental
Solutions Business, Electronic Systems & Equip-
ments Business, and other operations play an
important part in advancing the Omron Group’s
growth strategy. The Other segment advances
business in future growth areas, including the
environment field and the smartphone market,
which are expected to expand.
Microlens array technology with several million
micron-sized micro lenses to maximize light
utilization efficiency contributes to brighter and
slimmer mobile phones with lower power
consumption.
Omron provides new applications centering on
micro electrical mechanical systems (MEMS).
To maximize energy efficiency, Omron is developing
solutions-based businesses that combine energy-
saving, creating, and storing components with
consulting and engineering services.
MEMS Absolute Pressure
Sensor
Smart Electricity Usage
Monitors
Segment Information >>
46
• Electronic Systems &
Equipment
Business activities related to computers,
devices, uninterruptible power supplies
(UPS), and other electronic systems and
equipment.
LCD Backlights
MEMS Non-Contact
Temperature Sensors
Power Conditioner for
Solar Power Generation
System
BY-S Series, Uninterruptible Power Supply Unit
32
Omron Corporation
Integrated Report 2012
33
SSBHCBOther Omron at a Glance
Performance and Forecast by Segment
Net Sales and Operating Income
Net Sales by Segment
(Billions of yen)
Operating Income by Segment
(Billions of yen)
800
700
600
500
400
300
200
100
0
Eliminations and
Corporate
Other Businesses
Healthcare Business
(HCB)
Social Systems,
Solutions and Service
Business (SSB)
Automotive
Electronic
Components
Business (AEC)
Electronic and
Mechanical
Components
Business (EMC)
Industrial Automation
Business (IAB)
90
60
30
0
–30
09
10
11
12
Forecast
(FY)
09
10
11
12
Forecast
(FY)
R&D Expenses and Capital Expenditures
R&D Expenses by Segment
Capital Expenditures by Segment
(Billions of yen)
60
50
40
30
20
10
0
08
09
10
11
(FY)
(Billions of yen)
40
Eliminations and
Corporate
Other Businesses
Healthcare Business
(HCB)
Social Systems,
Solutions and Service
Business (SSB)
Automotive
Electronic
Components
Business (AEC)
Electronic and
Mechanical
Components
Business (EMC)
Industrial Automation
Business (IAB)
30
20
10
0
08
09
10
11
(FY)
Notes: 1. From fiscal 2009, the Companies adopted the Accounting Standards Codification No. 280, “Segment Reporting” (previously Statement of Financial Accounting
Standards No.131, “Disclosures about Segments of an Enterprise and Related Information”). Accordingly, the figures of the segment information for fiscal
2008 have been restated to conform with the current year presentation.
2. The Company’s business segments were reclassified as IAB, EMC, AEC, SSB, HCB, and Other in the third quarter of fiscal 2009. Figures for fiscal 2008 have
been restated to reflect the new classifications.
3. 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.
4. Fiscal 2008 figures for R&D expenses and capital expenditures are the combined total for all the segments due to the new segment organization.
Industrial Automation
Business (IAB)
Net Sales by Segment
44%
Electronic and Mechanical
Components Business (EMC)
Net Sales by Segment
13%
270.8 274.0
Net Sales
(Billions of yen)
300
250
200
150
100
50
0
Operating Income
Operating Income Margin
(right scale)
(%)
18
(Billions of yen)
60
50
40
30
20
10
0
12.3%
12.8%
35.0
33.3
15
12
9
6
3
0
Net Sales
(Billions of yen)
100
89.0
83.0
80
60
40
20
0
Operating Income
Operating Income Margin
(right scale)
(%)
20
(Billions of yen)
20
16
12
8
4
0
8.7% 9.0%
8.0
7.2
16
12
8
4
0
09 10
11 12
(FY)
Forecast
09 10 11 12
(FY)
Forecast
09 10 11 12
(FY)
Forecast
09 10 11 12
(FY)
Forecast
Automotive Electronic
Components Business (AEC)
Net Sales by Segment
14%
Social Systems,
Solutions and Service
Business (SSB)
Net Sales by Segment
9%
Net Sales
(Billions of yen)
100
95.0
85.0
80
60
40
20
0
Operating Income
Operating Income Margin
(right scale)
(Billions of yen)
6
5
4
3
2
1
0
5.0
2.7
5.3%
3.2%
(%)
12
10
8
6
4
2
0
Net Sales
(Billions of yen)
100
80
60
40
20
0
60.0
57.2
Operating Income
Operating Income Margin
(right scale)
(Billions of yen)
3.0
2.4
1.8
1.2
0.6
0
(%)
10
8
6
4
2
0
1.0
1.7%
0.2%
0.1
09 10 11 12
(FY)
Forecast
09 10 11 12
(FY)
Forecast
09 10 11 12
(FY)
Forecast
09 10 11 12
(FY)
Forecast
Healthcare Business (HCB)
Net Sales by Segment
Other Businesses
Net Sales by Segment
Net Sales
(Billions of yen)
100
80
60
40
20
0
67.5
62.4
10%
Operating Income
Operating Income Margin
(right scale)
(Billions of yen)
10
8
6
4
2
0
(%)
15
12
9
6
3
0
4.0
5.9%
2.9
4.7%
09 10 11 12
(FY)
Forecast
09 10 11 12
(FY)
Forecast
Net Sales
Operating Income (Loss)
9%
(Billions of yen)
100
80
60
40
20
0
59.0
53.5
(Billions of yen)
2.0
0
–2.0
–4.0
–6.0
–8.0
–10.0
–2.0
–3.6
09 10 11 12
(FY)
Forecast
09 10 11 12
(FY)
Forecast
34
Omron Corporation
Integrated Report 2012
35
SEGMENT INFORMATION
Industrial Automation Business (IAB)
44%
Manufacturing and sales of control systems and components for factory
automation and industrial equipment
売上構成比
% of Net Sales
44%
IAB has established a complete lineup of state-of-the-art equipment that plays a principal role in automation.
This lineup includes the sensors that provide automation systems with the senses of “vision” and “touch,”
the controllers that serve as their “brain,” the drives that form their “limbs,” and the networks that connect
these various items as the “nerve system.” With these sophisticated products, we are contributing to quality,
safety, and the environment by supporting the innovation of manufacturing industries around the world.
Fiscal 2011 in Review
Overcoming the challenges presented by the Great East
Japan Earthquake and the strong yen, sales in line with
levels in fiscal 2010 were secured in all regions.
IAB net sales declined 0.4% year on year, to ¥270.8 billion, and
demand as well as elevated demand from Japanese companies
following the severe flooding in Thailand, and as a result capital
investment demand held firm in the automobile and machine tool
industries. The cumulative effect of these factors was sales levels in
fiscal 2011 remaining in line with those in fiscal 2010.
operating income decreased 12.8%, to ¥33.3 billion, in fiscal 2011.
Overseas, sales slipped 0.2%, to ¥147.7 billion, due to the impact
In Japan, sales were down 0.6% year on year, to ¥123.1 billion. In
of the strong yen and other factors. Operations in Europe were
the first quarter, there was concern regarding the impact of delayed
adversely affected by the strong yen and financial instability; however,
capital investment in the automobile and semiconductor industries
demand showed a gradual trend toward recovery, and accordingly
as well as the difficulty in procuring parts, both of which resulted
sales were relatively unchanged year on year. Sales levels were
from the Great East Japan Earthquake. Faced with such adversity,
maintained in China as well, where increased demand for automo-
we prioritized product supply, leading to significant increases in net
biles and consumer electronics as well as higher internal demand
sales, particularly in regard to sensors and programmable logic
for social infrastructure development compensated for the impacts
controllers, which reflected customers’ efforts to secure inventories.
of the inventory adjustment trend that stemmed from monetary
Starting in the second quarter, performance was impacted by
tightening measures. In other areas of Asia, net sales proved solid
continued sluggish capital investment and inventory adjustment
thanks to demand created by reconstruction efforts following the
trends in industries related to semiconductors and electronic
floods in Thailand. In North America, sales of control equipment for
components, but strong capital investment demand in the automo-
oil- and gas-related businesses rose considerably, resulting in
bile and machine tool industries helped keep net sales in line with
favorable overall sales figures. Due to the above, sales in fiscal 2011
levels in the second quarter of fiscal 2010. The third quarter was
were relatively unchanged from levels in fiscal 2010.
marked by the appearance of post-earthquake reconstruction
(Billions of yen)
Check it out!
IAB Results and Forecast
Fiscal Year
Net sales
Domestic
Overseas
Americas
Europe
Asia Pacific
Greater China
Direct exports
Operating income
2008
272.0
125.5
146.5
31.6
70.7
17.4
25.7
1.0
18.2
2009
203.9
91.2
112.7
18.9
51.2
16.8
25.5
0.3
12.7
2010
271.9
123.9
148.0
26.7
56.7
25.0
38.8
0.7
38.2
2011
270.8
123.1
147.7
29.3
55.3
25.3
36.8
1.0
33.3
2012
(Forecast)
274.0
124.0
150.0
32.5
52.5
27.5
36.5
1.0
35.0
Operating income margin
6.7%
6.2%
14.1%
12.3%
12.8%
R&D expenses
Depreciation and amortization
Capital expenditures*
—
—
—
11.1
5.2
1.9
13.2
4.5
2.2
14.4
4.2
3.8
* From fiscal 2009, the Companies adopted the Accounting Standards Codification No. 280, “Segment Reporting.” The Company’s
business segments have been reclassified from the third quarter of fiscal 2009. Accordingly, the segment information figures for
fiscal 2008 have been restated to conform with the current year’s presentation.
* Beginning in fiscal 2010, the Omron Group has been revising the management guidance fees for the purpose of concentrating
capital funds at the headquarters to reinforce selection and concentration and strategically allocate resources. This inclusion has
had an effect on the operating income of each segment.
* Fiscal 2008 figures for R&D expenses, depreciation and amortization, and capital expenditures have not been stated due to the new
segment organization.
* The sales figures given indicate sales to external customers and exclude intersegment transactions. Operating income indicates
income including internal income prior to the deduction of such amounts 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.
Analysis of external
environment
Index of industrial production
and machinery orders and
IAB sales
*
120
100
80
60
40
20
0
(Billions of yen)
35
30
25
20
15
10
5
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2010
FY2011
Index of Industrial Production*
(Seasonally adjusted) [left axis]
Machinery orders* [left axis]
IAB sales [right axis]
*Sources: The Ministry of Economy, Trade and
*Sources: The Ministry of Economy, Trade
Industry and the Cabinet Office,
and Industry and the Cabinet
Government of Japan
Office, Government of Japan
IAB sales trends move on a slight time lag
to indices for industrial production and
machinery orders.
Yoshinobu Morishita
Representative Director and
Executive Vice President
Company President,
Industrial Automation Company
* As of July 21, 2012
Business Strategy and Outlook for Fiscal 2012
We will maintain our standing as the best partner for
manufacturers worldwide.
In the IAB segment, in fiscal 2012 we are forecasting a year-on-
year rise in net sales of 1.2%, to ¥274.0 billion, and a 5.0%
increase, to ¥35.0 billion, in operating income.
Conditions both in Japan and overseas are expected to make
a full-fledged recovery starting in the second half of fiscal 2012,
and consequently full-year net sales are anticipated to be in line
with fiscal 2011. While the strong yen and financial instability in
Europe will continue to represent uncertainty regarding the
future of the operating environment, we are forecasting higher
capital investment in the automobile and machine tool industries
in Japan, North America, and emerging countries, such as China.
The IAB segment aims to respond to the automation needs of
rapidly growing emerging countries as well as the increasingly
more sophisticated and complex needs of developed countries in
the area of controls and in the areas of safety, the environment,
and energy. To facilitate this endeavor, we are reinforcing sales
systems and fortifying global customer support systems. In addi-
tion, we are bolstering our lineup of competitive products by
quickly introducing equipment that boasts industry-leading levels
of new ultra high-speed and high-precision products to beat out
the competitors in emerging markets, which are rapidly gaining
force. Through these efforts, we aim to further strengthen our
robust product lineup, which we believe to be No. 1 in the world.
Further, we are enhancing our lineup of products that assist
manufacturing sites, which use massive amounts of electricity,
in realizing energy savings. These products include our electricity
usage monitoring equipment and our equipment that measures
the humidity, pressure, and electricity flow levels of production
facilities. Striving to maintain our No. 1 standing into the future,
amidst rising concern for environmental issues we will work to
respond to the energy-saving and creation needs of customers in
a wide range of environmental fields.
What’s New
Omron Tongling Automation System (Hangzhou) Co., Ltd., Established
as Joint Venture Company by Omron (China) Co., Ltd., and Chinese
System Integrator / Sales Agent
On March 15, 2012, Omron (China) Co., Ltd., and Hangzhou Tongling Automation Co., Ltd. (HTL), completed
the registration of Omron Tongling Automation System (Hangzhou) Co., Ltd., a joint venture between these
two companies located in Hangzhou, China, that commenced operations in June 2012. This company’s
operations will be centered on the Sysmac machine automation platform* products born out of Omron’s
advanced technologies. By fusing Omron’s expertise related to state-of-the-art control equipment, which we
have accumulated through our dealings with customers around the world, with HTL’s engineering capabilities
that were created by its drive to become a top system integrator in China, this company will assist us in rapidly
developing automation equipment that can compete in the Chinese and global markets.
Omron Tongling Automation
System (Hangzhou) Co., Ltd.
* Sysmac machine automation platform: With a machine automation controller at its core, this platform seamlessly links input and output devices through “one connection,” allowing
entire machines to be controlled by a single controller. Further, this platform enables the programming, motion setting, and network functions of connected equipment to be
adjusted using a single software program, which conforms to the IEC 61131-3 standard. In these ways, the system enables users to achieve drastic improvements in
productivity.
Machine Automation Controllers:
Sysmac NJ Series (NJ3 CPu unit)
For use in our line of NJ Series controllers
that serve as the “brain” for the Sysmac
automation platform, we introduced the NJ3
CPU unit series, which is compatible with
4- or 8-axis motion control, making it ideal for
small scale control. This series complements
the NJ5 CPU unit, compatible with up to
64-axis control, to further enhance our lineup
in this area.
Next-Generation Standard
Temperature Controllers: E5CC and
E5EC (Digital Controllers)
Clamp Electricity Data Logger That
Accelerates Energy-Saving Efforts at
Manufacturing Sites: ZN-CTC11
These new digital temperature controllers
feature present value (PV) displays using
large, white characters for better visibility
and offer improved ease in selection,
operation, and setting. Functionality and
features have also been improved by
increasing the number of inputs and outputs,
significantly expanding the range of
compatible applications,
and other means.
By clamping the ZN-CTC11 electricity data
logger onto power cords, this device can
record the electricity usage of facilities and
production lines without stopping the
equipment. This is the industry’s first clamp
electricity data logger to have the clamp
integrated into the logger (as of June 2012,
Omron internal survey).
36
Omron Corporation
Integrated Report 2012
37
SEGMENT INFORMATION
Electronic and Mechanical Components Business (EMC)
Manufacturing and sales of electronic components for consumer appliances,
telecommunications equipment, mobile telephones, amusement devices,
13%
and office automation equipment
13%
% of Net Sales
売上構成比
EMC utilizes its cultivated strength in monozukuri (product creation) technology, integrating its relays,
switches, connectors, and other electromechanical component products to supply products to customers
in a wide range of industries.
Fiscal 2011 in Review
Following a strong performance by products for the
automobile industry in Japan and overseas, sales
were up year on year.
EMC net sales were up 2.2% year on year, to ¥83.0 billion, and
operating income was down 39.2%, to ¥7.2 billion, in fiscal 2011.
Domestic sales edged up 1.3%, to ¥25.3 billion. Net sales
initially dropped as demand for automotive-use relays and
switches fell in the first quarter in conjunction with the reduced
production of automobiles following the Great East Japan
Earthquake. In July, recovery trends were evident in the automo-
bile and amusement industries, and sales to consumer-related
industries, such as those related to consumer electronics, were
strong due to post-earthquake recovery demand. These factors
encouraged a recovery in second quarter results from the
declines experienced in the first quarter. A strong performance
continued for the remainder of the year, and as a result sales in
Japan were in line with fiscal 2010’s level.
Overseas sales rose 2.6% year on year, to ¥57.7 billion, despite
the impacts of the strong yen, monetary tightening measures in
China, and financial instability in Europe. In China, the monetary
tightening measures implemented during the first half of the
year drove consumer-related industries, such as those related to
consumer electronics, into an inventory adjustment phase with
regard to certain products. However, the impacts of these trends
were outweighed by the benefits of customers working to
procure parts in advance due to concerns for possible supply
shortages after the earthquake. China and other emerging
countries were adversely affected by the global decline in
automobile production as well as the impact on Asian automotive
parts markets of the floods in Thailand that occurred during the
second half of the fiscal year. Nevertheless, sales of automotive
parts and mobile telephone components were strong throughout
fiscal 2011. As a consequence, overseas sales were up.
EMC Results and Forecast*
Fiscal Year
Net sales
Domestic
Overseas
Americas
Europe
Asia Pacific
Greater China
Direct exports
Operating income
2008
2009
2010
2011
76.5
25.6
50.9
8.6
9.2
8.4
20.9
3.8
4.2
70.7
22.3
48.4
7.3
11.7
7.6
19.8
1.9
6.7
81.2
24.9
56.3
13.7
13.0
8.4
19.8
1.5
11.9
83.0
25.3
57.7
13.2
12.9
7.6
22.7
1.3
7.2
(Billions of yen)
2012
(Forecast)
89.0
27.0
62.0
13.0
13.5
9.0
25.0
1.5
8.0
Operating income margin
5.5%
9.5%
14.7%
8.7%
9.0%
R&D expenses
Depreciation and amortization
Capital expenditures*
—
—
—
5.0
8.5
4.2
5.6
6.9
8.7
6.5
7.2
9.9
* From fiscal 2009, the Companies adopted the Accounting Standards Codification No. 280, “Segment Reporting.” The Company’s
business segments have been reclassified from the third quarter of fiscal 2009. Accordingly, the segment information figures for
fiscal 2008 have been restated to conform with the current year’s presentation.
* Beginning in fiscal 2010, the Omron Group has been revising the management guidance fees for the purpose of concentrating
capital funds at the headquarters to reinforce selection and concentration and strategically allocate resources. This inclusion has
had an effect on the operating income of each segment.
* Fiscal 2008 figures for R&D expenses, depreciation and amortization, and capital expenditures have not been stated due to the new
segment organization.
* The sales figures given indicate sales to external customers and exclude intersegment transactions. Operating income indicates
income including internal income prior to the deduction of such amounts 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.
Check it out!
Analysis of external
environment
Global shipments of electronic
components and sales of
EMC products for
consumer electronics
(Billions of yen)
1,500
1,200
900
600
300
0
(Billions of yen)
50
40
30
20
10
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2010
FY2011
Global [left axis]
Japan [left axis]
EMC products for consumer
electronics [right axis]
Source: Japan Electronics and Information
Source: Japan Electronics and Information
Technology Industries Association (JEITA)
Technology Industries Association
(JEITA)
Sales were sluggish from the second half
of fiscal 2011 following the deceleration of
overseas economies.
Koichi Tada
Managing Officer
Company President, Electronic and
Mechanical Components Company
Business Strategy and Outlook for Fiscal 2012
utilizing our monozukuri capabilities, we will focus
on the Greater China region, other parts of Asia, and
environmental fields.
We plan to raise EMC net sales 7.2% year on year, to ¥89.0
billion, and operating income 10.5%, to ¥8.0 billion, in fiscal 2012.
The operating environment for electronic components is
expected to remain harsh overall due to the financial instability in
Europe, the deceleration of growth in the Greater China region,
and the persistence of the strong yen.
Conversely, in China and other parts of Asia, a geographic
segment that accounts for 65% of the world’s population,
markets are expanding rapidly, and we are steadily pushing
forward with initiatives to address this market growth. Our
sophisticated monozukuri capabilities, which enable us to
conduct production in an integrated manner spanning from
product design and material procurement to molding, parts
processing, and assembly, will play a key role in undertaking
these efforts. Utilizing these capabilities, we will improve the
quality, reduce the costs, and stabilize the supplies of relays,
switches, and connectors for industrial machinery, as these are
the characteristics our target industries seek out in products.
In addition, as markets related to the environmental and energy
fields are expanding, we will create components that contribute
to the advancement of environmental fields and target sales
growth for such components. Specifically, we have high
expectations for the future performance of smart meters, which
are electricity meters equipped with communications functions, in
markets in China and other parts of Asia. For this reason, we are
enhancing our power latching relay operations. Power latching
relays are used to control the flow of electricity into smart meters.
We are also taking steps to improve the competitiveness of our
DC power relays for use in electric and hybrid-electric vehicles
with the aim of advancing their use among automobile
manufacturers worldwide.
What’s New
Strengthening Smart Meter—Related
Power Latching Relay Operations
Aiming to strengthen its relay operations, Omron acquired Shanghai Best
Electrical Appliance Manufacturing Co., Ltd. (BST), a manufacturer of power latching relays, which are used
in smart meters.
Smart meters are expected to become a mainstay device in smart grids, which are projected to
experience a rapid increase in demand as an interface for connecting power grids with commercial
buildings or individual homes. Demand is expected to be particularly strong in China and other parts of
Asia. Power latching relays are employed in the load switching units used for directly controlling the supply
of power to these smart meters.
BST commands the leading position in the Chinese market for power latching relays. The company has gained a competitive advantage
through its high-mix, low-volume production system and by enhancing productivity through the use of modular parts.
By incorporating BST’s strengths, Omron will further expand its power latching relay business.
Power latching relays
Remote Reset Rocker Switch: A8GS
The A8GS remote reset rocker switch is
among the smallest rocker switches in the
industry. This switch is primarily used as the
main power switch for office automation
(OA), audio video (AV), and other equipment.
Featuring a solenoid, this switch can be
operated manually and possesses a remote
reset function that allows the switch to be
turned off by outside signals. This function
reduces standby electricity consumption to
zero, thus contributing to energy savings.
Dust-Proof ultra Subminiature Basic
Switch: D2FD
Based on the design specifications of a
popular preceding model, D2FD switches
feature rubber sealing, which means they
can be used in dust-proof environments
(IEC IP6X). Equipped with this high-demand
feature, D2FD switches are the optimal
switches for use in the position sensors of
washing machine lids and refrigerator doors
as well as for use in industrial equipment,
office equipment, telecommunications
equipment, and other
equipment requiring
dust-proof switches.
Hand Gesture Recognition
Technologies
Hand gesture recognition technologies are
used to simultaneously identify the position,
contour, and movement of hands or fingers
from camera-recorded videos. These
technologies enable televisions to be
operated with hand signs, cameras to be
programmed to automatically take pictures
in response to the “peace” sign, and other
motion-based equipment control schemes
to be realized.
38
Omron Corporation
Integrated Report 2012
39
SEGMENT INFORMATION
Automotive Electronic Components Business (AEC )
Production and sales of electronic components for automobiles
売上構成比
14%
% of Net Sales
14%
Omron Automotive Electronics Co., Ltd. (AEC), conducts business operations catering specifically to the
ever-evolving automotive electronics field, a subsection of the automobile industry, which continues to
grow on a global basis. This business continues to contribute to the realization of a safer, more secure, and
more comfortable driving society by producing technologies and products designed to create “the best
matching of automobiles to people.”
Fiscal 2011 in Review
Domestic automobile manufacturers recovered and
automobile markets in emerging countries grew,
stimulating sales increases.
AEC net sales edged up 0.9% year on year, to ¥85.0 billion, and
operating income declined 35.3%, to ¥2.7 billion, in fiscal 2011.
Domestic sales were ¥28.9 billion, up 1.8%, from the previous year.
Automobile production by principal customers fell immediately
after the Great East Japan Earthquake, resulting in a sharp drop
in sales during the first quarter of the year. However, in conjunc-
tion with the recovery of automobile and parts manufacturers,
automobile production gradually recovered starting in the latter
half of the first quarter. In addition, certain automobile manufac-
turers accelerated production to return inventories of completed
vehicles to a certain level. In the second half of the fiscal year,
the recovered production among manufacturers led to a come-
back in demand for the company’s products. The severe flooding
in Thailand that occurred in October damaged our Thai manufac-
turing base, and the issues with procuring electronic compo-
nents after the floods adversely impacted sales in this segment
and in the automobile industry as a whole. Later in the year,
when parts supplies were able to be secured, production by
automobile manufacturers rallied once again. Thanks to the
above, sales were solid on a full-year basis.
Overseas sales rose 0.5%, to ¥56.1 billion, despite the impacts
of the strong yen, the monetary tightening measures in China,
and the financial instability in Europe. During the first half of the
fiscal year, sales to China and other emerging countries as well
as South Korea were strong. In North America, demand from
U.S. automobile manufacturers held firm, but reduced production
among Japanese automobile manufacturers resulted in signifi-
cant declines in sales. The favorable sales trends in China, other
emerging countries, and South Korea continued into the second
half of the fiscal year, thus helping to offset the impacts of the
less-than-ideal exchange rates and the floods in Thailand. As a
result of these factors, overseas sales were overall relatively
unchanged from the previous fiscal year.
2008
2009
2010
2011
AEC Results and Forecast
Fiscal Year
Net sales
Domestic
Overseas
Americas
Europe
Asia Pacific
Greater China
Direct exports
Operating income (loss)
Operating income margin
R&D expenses
Depreciation and amortization
Capital expenditures*
82.1
25.0
57.1
27.9
9.0
12.5
4.7
3.0
(7.1)
—
—
—
—
75.2
23.9
51.3
24.0
2.0
13.1
6.3
5.9
1.7
84.3
28.4
55.9
23.9
2.6
14.2
9.1
6.2
4.2
85.0
28.9
56.1
21.5
2.4
16.2
9.5
6.5
2.7
(Billions of yen)
2012
(Forecast)
95.0
30.0
65.0
23.5
3.0
19.0
11.5
8.0
5.0
2.3%
4.9%
3.2%
5.3%
5.0
2.1
3.6
5.3
2.1
2.0
6.6
2.1
5.2
* From fiscal 2009, the Companies adopted the Accounting Standards Codification No. 280, “Segment Reporting.” The Company’s
business segments have been reclassified from the third quarter of fiscal 2009. Accordingly, the segment information figures for
fiscal 2008 have been restated to conform with the current year’s presentation.
* Beginning in fiscal 2010, the Omron Group has been revising the management guidance fees for the purpose of concentrating
capital funds at the headquarters to reinforce selection and concentration and strategically allocate resources. This inclusion has
had an effect on the operating income of each segment.
* Fiscal 2008 figures for R&D expenses, depreciation and amortization, and capital expenditures have not been stated due to the new
segment organization.
* The sales figures given indicate sales to external customers and exclude intersegment transactions. Operating income indicates
income including internal income prior to the deduction of such amounts 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.
Check it out!
Analysis of external
environment
Worldwide automobile
production (unit basis)
(Millions)
6
5
4
3
2
1
0
EU
China
North America
Japan
Asia
South America
Middle East, Africa
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2010
FY2011
Source: CSM Worldwide, Inc.
Source: CSM Worldwide, Inc.
Sales were poor in Japan due to the
impacts of the Great East Japan
Earthquake, while sales improved
significantly in China.
Yoshinori Suzuki
Managing Officer
President and CEO,
Omron Automotive Electronics Co., Ltd.
Business Strategy and Outlook for Fiscal 2012
Automobile market growth is expected to center on
emerging countries.
For AEC, we are forecasting a year-on-year increase of 11.7%, to
¥95.0 billion, in net sales, with an 85.8% jump in operating
income, to ¥5.0 billion, in fiscal 2012.
In Japan, strong sales are projected as a result of the demand
stimulated by government subsidies for the purchase of eco-
friendly automobiles as well as favorable conditions in the market
for small vehicles. Strong sales are also projected overseas.
Factors expected to support sales growth include the recovering
North American market, expansion in the emerging markets of
China and Southeast Asia, the start of full-fledged production of
globally strategic vehicles by automotive manufacturers in
Thailand and other countries, and the start of production of
new-model vehicles that incorporate Omron’s new products.
Further, the automobile market is expected to continue
growing centered on emerging countries. Against this backdrop,
competition between manufacturers is intensifying and the
globalization of production is accelerating. Aiming to respond to
such market changes, AEC will employ the “One Global Team”
management strategy, under which global expansion will be
pursued by leveraging the Group's accumulated technologies
and techniques and installing high-quality development,
production, sales, and services functions in each major region of
the world. The resulting system will be used to further advance
us in our quest to uncover the social needs inherent to each
different area and quickly and efficiently introduce products that
meet these needs.
What’s New
Automobile Parts Production in Mexico
In February 2012, a new AEC production base was established in
Guanajuato, Mexico. This base has begun the production of automotive electronic components.
As automobile manufacturers are progressively developing and expanding operations in Mexico
and as the production of completed automobiles in this country rises in the future, this new
production base will come to play a central role in developing our own operations thanks to its
convenient access to the automobile markets in the Americas and Europe. In addition, as this is
the Omron Group’s first production base in Mexico, we will utilize it to facilitate social contribution
efforts in this country.
An automotive electronic components
production base, in Mexico
Electric Power Steering Controllers
AEC anticipates that a growing number of
automobile models will utilize its electric power
steering controllers, which enable smooth
steering wheel operation and save energy.
AEC’s long track record has made the business
a highly trusted supplier, and AEC began the
full-fledged mass production of controllers at its
plant in China last year.
Transmitter Key and Engine
Start Systems
AEC is carrying out the development and
production of various devices integrating its
abundant wireless, miniaturization, and
weight-reducing technologies. These
systems provide added convenience for
users and greater ease in locking and
unlocking doors and starting the engine.
Components for Eco-Friendly Vehicles
AEC conducts the mass production of cell
monitoring units, electricity leakage
sensors, and other devices for use in
electric vehicles (EVs). This segment will
continue to develop products that contribute
to higher levels of energy and fuel efficiency
while creating technologies and products for
EVs in the power management and power
conversion fields.
40
Omron Corporation
Integrated Report 2012
41
SEGMENT INFORMATION
Social Systems, Solutions and Service Business (SSB)
Providing solutions and services for cotributing to a safer and more secure,
and comfortable society
売上構成比
% of Net Sales
9%
9%
Omron Social Solutions Co., Ltd. (SSB), provides various equipment, systems, and services to support
secure and comfortable living environments and a safe social infrastructure.
Fiscal 2011 in Review
Sales and income were down due to the stagnant
domestic economy and sluggish capital investment
in the railway industry.
In fiscal 2011, SSB net sales were down 10.4% year on year, to
¥57.2 billion, and operating income was ¥0.1 billion, compared
with ¥1.7 billion in fiscal 2010.
In the railway infrastructure business, demand weakened
during the first half of the fiscal year as a result of the curtailing
of capital investment among railway companies that were
heavily impacted by the Great East Japan Earthquake. While
sales of safety and security solutions centered on remote
monitoring systems increased during the second half of the
fiscal year, capital investment demand from railway companies
failed to recover to pre-earthquake levels. As a result, full-year
sales dropped in this business significantly.
The traffic control and road control systems business benefited
from income from the deliveries and related installation of
products scheduled for the end of fiscal 2010 that were delayed
due to the Great East Japan Earthquake. However, the
stagnancy in the domestic economy led to sluggish sales overall.
The Environmental Solutions Business HQ marked the smooth
launches of energy-saving, creating, and storing businesses. In
the related maintenance business, strong sales continued, as
demand for solar power generation products increased and
related installation expanded substantially.
SSB Results and Forecast
Fiscal Year
Net sales
Domestic
Overseas
Americas
Europe
Asia Pacific
Greater China
Direct exports
Operating income
2008
2009
2010
2011
72.3
70.7
1.6
0.0
0.0
0.0
0.0
1.6
5.2
58.0
57.5
0.5
0.0
0.0
0.0
0.0
0.5
2.7
63.8
63.1
0.7
0.0
0.0
0.0
0.0
0.7
1.7
57.2
56.9
0.3
0.0
0.0
0.0
0.0
0.3
0.1
(Billions of yen)
2012
(Forecast)
60.0
59.0
1.0
0.0
0.0
0.0
0.0
1.0
1.0
Operating income margin
7.2%
4.6%
2.6%
0.2%
1.7%
R&D expenses
Depreciation and amortization
Capital expenditures*
—
—
—
2.9
1.4
1.2
3.0
1.7
1.0
2.2
1.1
0.9
* From fiscal 2009, the Companies adopted the Accounting Standards Codification No. 280, “Segment Reporting.” The Company’s
business segments have been reclassified from the third quarter of fiscal 2009. Accordingly, the segment information figures for
fiscal 2008 have been restated to conform with the current year’s presentation.
* Beginning in fiscal 2010, the Omron Group has been revising the management guidance fees for the purpose of concentrating
capital funds at the headquarters to reinforce selection and concentration and strategically allocate resources. This inclusion has
had an effect on the operating income of each segment.
* Fiscal 2008 figures for R&D expenses, depreciation and amortization, and capital expenditures have not been stated due to the new
segment organization.
* The sales figures given indicate sales to external customers and exclude intersegment transactions. Operating income indicates
income including internal income prior to the deduction of such amounts 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.
Check it out!
Analysis of external
environment
[Reference] Changes in the
number of rail transport
passengers (year on year)
Private Railways
Total
JR Railway Company
（%）
10
8
6
4
2
0
–2
–4
–6
–8
–10
3
2011
4 5 6 7 8 9 10 11 12 1 2 3
2012
（Month）
Source: “Rail Transport Overview”,
Ministry of Land, Infrastructure,
Transport and Tourism
SSB’s business covers a broad range
of social fields, and there are no specific
economic indicators that link closely to
performance. In the railway segment,
for example, SSB’s sales are strongly
influenced by customer budgets for IC
card equipment installation and new
railway and station construction plans.
During fiscal 2011, travel dropped following
the Great East Japan Earthquake, and
capital investment in this area was
influenced accordingly. However, these
conditions showed recovery beginning in
March 2012.
Kiichiro Kondo
Managing Officer
President and CEO
Omron Social Solutions Co., Ltd.
Business Strategy and Outlook for Fiscal 2012
Profit structure reforms and accelerated growth in
business development will generate increases in sales
and income.
In fiscal 2012, we are projecting a 4.9% year-on-year gain in SSB
net sales, to ¥60.0 billion, and a ¥0.9 billion rise in operating
income, to ¥1.0 billion. Existing businesses, such as those related
to stations, railways, traffic control, and road control, will face the
continued curtailment of capital investment. In this environment,
we will advance the profit structure reforms undertaken in fiscal
2011, striving to generate income to be reinvested in growth
areas. Going forward, we will further accelerate growth by
investing this income in environment-related businesses and
reinforcing our strong engineering capabilities as well as by
bolstering our lineup of unique solutions that meet market needs.
In developing environment-related businesses, we will focus on
the following three growth drivers. Working together with the
Environmental Solutions Business HQ, SSB will expand its
business operations in this area centered on engineering fields,
such as system design, installation, and maintenance.
1. Energy creation: We will introduce remote monitoring services
for solar power generation systems that bundle design and
installation services together with maintenance and inspection
and establish a business model for providing one-stop service
for solar power solutions.
2. Energy storage: Focused on electricity storage systems, we will
realize optimal energy systems that link energy creation with
energy saving to manage peak-hour energy usage and realize
other benefits.
3. Energy saving: We will provide services related to the
construction, operation, and maintenance of systems that
monitor and automatically control electricity usage.
What’s New
SSB Receives Minister of State for Special Missions’ Excellence Award
SSB received the Minister of State for Special Missions’ Excellence Award at the
2011 Barrier-Free Promotion Contributor Awards, which was the 10th occasion of this event.
This award is presented to individuals or organizations that have made significant contributions to the
promotion of barrier-free universal design. The goal of the award is to encourage such superior barrier-free
universal design initiatives that assist in making society safer and more comfortable for everyone, including
seniors, people with disabilities, pregnant women, and people with children.
SSB received this award in recognition of its efforts to make the automated ticket vendors and ticket gates in
train stations easier to use for all passengers, including seniors and people with disabilities, by employing
universal design concepts. Another factor considered was SSB’s contribution to developing barrier-free design
guidelines for automated ticket vendors. These guidelines are not only applied to in-house development but have
also been made available to the entire industry.
Automated ticket vendor employing
universal design concepts
Intelligent Image Monitoring System: SS Vision
SS Vision is a new image monitoring system that combines image
recording and replay functions with image enhancement functions.
This system enables the improved efficiency of image monitoring
operations, which are on the rise, while reducing growing security
risks. Moreover, this system is equipped with various image analysis
engines, including those for facial recognition and license plate
identification, and thus can be used in a wide variety of applications.
Real Time Translation Application: TranScope
TranScope is a convenient smartphone application that serves as
a valuable asset in overcoming language barriers when traveling
abroad. The application allows text to be translated by reading the
text through the smartphone’s camera, making it highly viable in
a variety of situations, whether in transit on trains or buses or at
restaurants when reading menus. This application is compatible with
Japanese, Korean, Chinese, and English.
* Image recording functions that employ LECRE Inc.’s ArobaView system
* The application is currently under development,
and we plan to begin sequentially launching
versions for different language pairs
starting in fall 2012.
42
Omron Corporation
Integrated Report 2012
43
SEGMENT INFORMATION
Healthcare Business (HCB)
Providing health and medical devices and services for homes and medical
institutions
10%
売上構成比
% of Net Sales
10%
Kiichiro Miyata
Managing Officer
President and CEO,
Omron Healthcare Co., Ltd.
Omron Healthcare Co., Ltd. (HCB), is aiming to expand business with a focus on emerging economies by
developing innovative products and services to enable people around the world to accurately and easily
monitor their health status.
Fiscal 2011 in Review
Sales were unchanged in Japan due to the Great East
Japan Earthquake, but strong overseas sales growth
drove overall sales increases.
HCB net sales rose 3.0% year on year, to ¥62.4 billion, while
operating income decreased 28.4%, to ¥2.9 billion in fiscal 2011.
Domestic sales were up 1.3%, to ¥27.2 billion. The market for
home-use healthcare devices contracted notably during the first
half of the fiscal year as a result of the electricity-saving efforts
and the declines in consumer spending that were inspired by the
impact of the Great East Japan Earthquake, and consequently
sales were sluggish. In the second half of fiscal 2011, sales of
new home-use healthcare devices, such as thermometers, body
composition monitors, and activity monitors, proved to be
favorable and we were able to expand our market share. In
equipment for use in medical institutions, the world’s first
visceral fat monitor to employ Omron’s dual impedance analysis
method posted sales growth. Conversely, capital investment
was limited in the hospital market due to the influences of the
earthquake, which resulted in weak sales of physiological
monitors, a core product. As a result of the above, overall sales
in Japan were relatively unchanged in fiscal 2011.
Overseas sales were up 4.4%, to ¥35.2 billion. Rising
healthcare awareness contributed to brisk demand for healthcare
devices, and performance in the first half of fiscal 2011 was
consequently strong. Sales were particularly impressive in China,
Central and South America, Southeast Asia, and the Middle East.
In the second half of the year, economic slowdown in China and
North America adversely affected sales, but full-year sales still
showed an increase.
HCB Results and Forecast
Fiscal Year
Net sales
Domestic
Overseas
Americas
Europe
Asia Pacific
Greater China
Direct exports
Operating income
2008
2009
2010
2011
63.6
28.1
35.5
12.0
14.3
2.1
6.7
0.4
4.8
63.4
29.6
33.8
10.8
12.7
2.3
7.4
0.7
7.1
60.6
26.9
33.7
10.2
12.2
2.5
8.0
0.8
4.1
62.4
27.2
35.2
9.8
13.0
2.9
8.6
0.9
2.9
(Billions of yen)
2012
(Forecast)
67.5
29.5
38.0
10.5
13.5
3.5
9.5
1.0
4.0
Operating income margin
7.5%
11.1%
6.7%
4.7%
5.9%
R&D expenses
Depreciation and amortization
Capital expenditures*
—
—
—
5.0
1.3
1.5
5.0
1.2
4.7
5.1
1.5
2.8
* From fiscal 2009, the Companies adopted the Accounting Standards Codification No. 280, “Segment Reporting.” The Company’s
business segments have been reclassified from the third quarter of fiscal 2009. Accordingly, the segment information figures for
fiscal 2008 have been restated to conform with the current year’s presentation.
* Beginning in fiscal 2010, the Omron Group has been revising the management guidance fees for the purpose of concentrating
capital funds at the headquarters to reinforce selection and concentration and strategically allocate resources. This inclusion has
had an effect on the operating income of each segment.
* Fiscal 2008 figures for R&D expenses, depreciation and amortization, and capital expenditures have not been stated due to the new
segment organization.
* The sales figures given indicate sales to external customers and exclude intersegment transactions. Operating income indicates
income including internal income prior to the deduction of such amounts 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.
Check it out!
Analysis of external
environment
Changes in domestic
electronics market
(blood pressure monitors)
(Billions of yen)
2.5
2.0
1.5
1.0
0.5
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2010
FY2011
Omron Products
Other Products
Source: GfK
Sales of blood pressure monitors were
brisk in the second half of the year after
dipping briefly in the first half due to the
impact of the Great East Japan Earth-
quake.
44
Omron Corporation
Business Strategy and Outlook for Fiscal 2012
Markets in emerging countries are expected to
continue expanding.
For HCB, we forecast a gain of 8.1% year on year in net sales,
to ¥67.5 billion, accompanied by a 37.1% increase in operating
income, to ¥4.0 billion, in fiscal 2012.
Improved standards of living, the adoption of Western diets,
and other lifestyle changes in emerging countries, such as China
and India, as well as those in Central and South America, have
resulted in growing trends in lifestyle diseases. We anticipate
these trends will result in the continued expansion of healthcare
device markets in these countries. To capture this demand, we
are strengthening sales systems on a global basis and enhancing
our network of distributors, pharmacies, drugstores, and other
sales channels. Also, we will introduce into these emerging
countries new products that meet the individual needs of
specific countries. Through these efforts, we will work to
accelerate sales growth.
In developed countries, sluggish consumer spending and
limited capital investment among medical institutions is
forecasted. Regardless, we will work to develop new markets
in Japan. To this end, we will introduce sleep sensors and
WellnessLink-compatible products in the home-use healthcare
device market and launch the Medical LINK blood pressure
management service for the medical devices market.
What’s New
Start of Sleep Sensor Business
In April 2012, the HSL-001 sleep duration tracker, a device that helps users correct
their internal body rhythms, was released. This was subsequently followed by the May launch of the HSL-101
sleep sensor, which measures sleep conditions when placed bedside, marking the full-fledged start of our sleep
sensor business.
The HSL-001 sleep duration tracker determines when users drift into sleep and then records their sleep time.
By transferring the recorded data to a specialized sleep rhythm recording application for Android smartphones,
users can easily track data and confirm variances in their sleeping and waking times.
The HSL-101 sleep sensor can be used simply by placing it next to one’s bed. The built-in radio wave sensor
tracks the user’s movements in bed, including that of their chest, and determines whether they are asleep or
awake. This is the first device in Japan to allow sleep conditions to be measured with zero contact and zero
restraint. Further, data can be transmitted to the WellnessLink health management service, which will display
sleep trends classified into three categories of sleep depth and provide reports analyzing sleep trends. In these
ways, this device helps improve sleep quality.
Together with exercise and diet, sleep is a factor that must be considered for
preventing and improving lifestyle diseases. By evolving our lineup of products and
services in this area, we will assist customers in improving sleep quality and comfort
into the future.
HSL-001 sleep duration
tracker
Sleep-depth graph measured by the
HSL-101 sleep sensor
HSL-101 sleep sensor
Omron’s Visceral Fat Monitor System:
HDS-2000 DuALSCAN
HDS-2000 DUALSCAN is the world’s first
visceral fat monitor to employ Omron’s
proprietary dual impedance analysis method.
This system enables medical institutions to
safely and easily measure visceral fat
volumes. As X-ray or CT scans used to be
necessary to measure visceral fat, this
monitor is a safer
option because it does
not involve exposure to
radiation. Also, it is
faster than
conventional methods.
Omron Body Composition Monitor:
HBF-214
This glass body composition monitor
features a slim design with a width of only
28mm, indicating it can safely be stored
even in tight spaces. Equipped with such
basic features as body fat percentage and
visceral fat level measurements, this device
is optimal for household health
management.
Omron Activity Monitor Calorie Scan:
HJA-311
The HJA-311 is more than just a pedometer; it
is an advanced activity monitor equipped with
communications functions that enable it to
measure the total amount of calories burned
throughout a day. When linked with a
specialized application, “Yurupika Diet,” for
Android smartphones, this device can provide
more comprehensive
support in achieving monthly
weight loss goals. Moreover,
the HJA-311 indicates to
users when they have
earned the right to reward
themselves with sweets or
some other diet deviation,
thus helping raise motivation.
Integrated Report 2012
45
SEGMENT INFORMATION
Other Businesses
Several other business incubation operations under the direct control of the
Company president
9%
売上構成比
% of Net Sales
9%
The main objective of operations in the Other segment is to undertake incubation activities for future
business expansion. The Other segment advances business in future growth areas, including the
environmental field, where energy-conservation and CO2-reduction needs are expected to continue
growing, and the expanding smartphone market.
Fiscal 2011 in Review
Solar power conditioners and backlights for smart-
phones contributed positively to sales.
In the Other segment, net sales increased 7.8% year on year,
to ¥53.5 billion, and operating loss improved, from ¥4.7 billion in
fiscal 2010, to ¥3.6 billion in fiscal 2011.
The Environmental Solutions Business HQ registered low sales
during the first half of the year due to the impact of component
procurement difficulties following the Great East Japan Earth-
quake. In the second half of the year, the energy-saving compo-
nents and services business grew thanks to a rise in sales of
systems for monitoring electricity usage in response to the
requests for electricity conservation posed by the government
and power companies in light of the impact of the earthquake.
Sales volumes of solar power conditioners (energy-creation
business) also expanded, as we actively introduced new prod-
ucts in this line, a move taken in consideration of the growing
attention for solar power as an alternative power source. As a
result, full-year sales were strong.
In the Electronic Systems & Equipments Business HQ, sales of
industrial-use computers and contract manufacturing and the
development of electronic devices were weak, as customers
modified or scaled back investment plans due to the earthquake.
However, demand for uninterruptible power supply units to
manage power supply concerns continued to increase. As a
result, overall sales remained essentially unchanged from the
previous fiscal year.
The Micro Devices Business HQ experienced weak sales due
to a decline in demand for contract semiconductor manufactur-
ing and custom integrated circuits for consumer products and
industrial use.
In the Backlight Business, we actively addressed demand in
the firmly established smartphone market, while automotive-use
LED backlights experienced stable demand. Accordingly, sales
were solid throughout the year.
Other Businesses Results and Forecast
Fiscal Year
Net sales
Domestic
Overseas
Americas
Europe
Asia Pacific
Greater China
Direct exports
Operating income (loss)
Operating income margin
R&D expenses
Depreciation and amortization
Capital expenditures*
2008
2009
2010
2011
50.2
30.5
19.7
0.0
0.0
0.0
17.0
2.7
(7.3)
—
—
—
—
43.6
24.7
18.9
0.0
0.0
0.0
17.5
1.3
(5.8)
—
1.7
1.2
1.1
49.7
27.5
22.2
0.0
0.0
0.0
20.7
1.5
(4.7)
—
2.5
1.2
1.9
53.5
29.5
24.0
0.0
0.0
0.0
22.6
1.4
(3.6)
—
2.8
0.9
2.1
(Billions of yen)
2012
(Forecast)
59.0
29.0
30.0
0.0
0.0
0.0
28.0
2.0
(2.0)
—
* From fiscal 2009, the Companies adopted the Accounting Standards Codification No. 280, “Segment Reporting.” The Company’s
business segments have been reclassified from the third quarter of fiscal 2009. Accordingly, the segment information figures for
fiscal 2008 have been restated to conform with the current year’s presentation.
* Beginning in fiscal 2010, the Omron Group has been revising the management guidance fees for the purpose of concentrating
capital funds at the headquarters to reinforce selection and concentration and strategically allocate resources. This inclusion has
had an effect on the operating income of each segment.
* Fiscal 2008 figures for R&D expenses, depreciation and amortization, and capital expenditures have not been stated due to the new
segment organization.
* The sales figures given indicate sales to external customers and exclude intersegment transactions. Operating income indicates
income including internal income prior to the deduction of such amounts 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.
Check it out!
Analysis of external
environment
Smartphone unit shipment
volume trend and forecasts
(Million units)
45
（%）
100
80
60
40
20
30
15
0
*PHS, data transmission cards, and
communications modules not included
Source: MM Research Institute data
The proliferation of smartphones is
expected to expand the backlight market
for high-end liquid-crystal panels.
Business Strategy and Outlook for Fiscal 2012
The smartphone market will continue to expand and
conditions will be favorable for environment-related
businesses.
In the Other segment, in fiscal 2012 we are forecasting a 10.2%
year-on-year rise in net sales, to ¥59.0 billion, and a decrease in
operating loss, from ¥3.6 billion, to ¥2.0 billion.
Conditions will be favorable for the Environmental Solutions
Business HQ in fiscal 2012 as a result of the July 2012 launch of a
government system under which all electricity generated using
renewable energy sources will be purchased and a related
subsidy system. Taking advantage of these conditions, we will
target higher domestic sales of solar power conditioners and a
larger share of this market. Also, we anticipate growth in the
energy-saving components and services business thanks to this
business’s ability to provide the type of electricity-saving solu-
tions for which demand has been growing since 2011. In addition,
we will further expand the scale of operations by developing
comprehensive energy solutions businesses that combine
energy saving, creation, and storage to respond to demand for
business continuity plans and other social needs.
The Electronic Systems & Equipments Business HQ will work
to expand sales of industrial-use computers and contract manu-
facturing and the development of electronic devices. At the
same time, with the aim of boosting sales, we will bolster our
lineup of uninterruptible power supply units, which are register-
ing increases in demand due to concerns regarding electricity
shortages.
In the Micro Devices Business HQ, demand for custom
integrated circuits and other existing products will likely remain
at the same level as in fiscal 2011. However, we will target sales
expansion in the growing market for micro electrical mechanical
systems (MEMS) microphones and sensors.
In the Backlight Business, we will continue to focus develop-
ment on making slimmer and brighter products for use in the
high-resolution liquid-crystal displays of smartphones and are
thus forecasting higher sales in this business. Moreover, we will
advance the automation and boost the productivity of production
lines for mass-produced products while simultaneously reducing
costs in the pursuit of improved profitability.
What’s New
Helping Solar Power Systems Stabilize Generation Volumes and Supporting Maintenance with
Monitoring Services
Solar power continues to gain attention as a means of preventing global warming and as an alternative source of
electricity that can be used to combat electricity shortages, such as those that occurred in Japan during 2011. As such, the solar power market
is expanding with each coming year. Further market growth is anticipated following the July 2012 launch of a government system under which
all electricity generated using renewable energy sources will be purchased and the resulting rise in demand for methods of realizing local
production and consumption of electricity.
In July 2012, Omron launched a new service that supports this market by utilizing remote monitoring to provide an integrated system for
monitoring the operation of solar power systems and managing on-site maintenance. The remote
monitoring of solar power systems allows generation efficiency and malfunctions to be tracked in real
time; should a malfunction occur, the details of this disturbance can be quickly confirmed, thus enabling
the speedy procurement of necessary parts and facilitating timely repairs, replacement, and other
maintenance procedures. This consequently limits generation losses while helping solar power systems
operate stably for longer periods of time.
09 10 11 12 13 14 15 16 (FY)
0
Forecast
Smartphone unit
shipments [left axis]
Feature phone unit
shipments [left axis]
Shipment ratio of
smartphone units to
feature phone units [right axis]
Backlights Business
Four-Inch Backlight for High-End
Smartphones
Our four-inch backlights realize higher levels
of brightness and efficiency while providing
more uniform lighting and enabling slimmer
bodies of smartphones and narrower frames.
Electronic Systems and Equipment Business
uninterruptible Power Supply units:
BY-S Series
The BY-S Series of sine wave output
uninterruptible power supply units features
units that are both compact and affordable
and can be used safely with PCs and
servers. By introducing a lineup of products
with maximum capacities ranging from 350VA
to 1200VA,
we will further
invigorate the
uninterruptible
power supply
unit market.
Micro Devices Business
MEMS Absolute Pressure Sensor
Omron has developed an absolute pressure
sensor capable of accurately detecting 50cm
altitudinal variations through highly precise
sensing of air pressure fluctuations. The
Company will promote the usage of this
sensor, which is among the world’s most
accurate and power
efficient, in
smartphones and
activity monitors.
46
Omron Corporation
Integrated Report 2012
47
Intellectual Property Strategy
Enhancing Profitability and Promoting
Business Growth
The Intellectual Property Center defends high-value technical assets to boost the Group’s competitive strengths and protects
and effectively utilizes the Company’s patents, brand names, and expertise to maximize the Omron Group’s long-term
corporate value. The Center raises the success rate of the Group’s business activities and contributes to enhancing the
profitability and promoting the business growth of the Omron Group.
Establishment and Implementation of the
Omron Intellectual Property Guidelines
connecting our vertical businesses horizontally by leveraging our
intellectual property strengths.
Omron has established Omron Intellectual Property Guidelines
based on the Management Principles to serve as guiding
principles and judgment criteria for the execution of activities
related to intellectual property. In addition, under the Intellectual
Property Policy, derived from the Omron Intellectual Property
Guidelines, the Company formulates an intellectual property
strategy that is consistent with its business and technical
strategies and implements the strategy.
INTELLECTUAL PROPERTY GUIDELINES
1. Create high-quality intellectual property
2. Aggressively utilize intellectual property
3. Respect, protect, and manage intellectual property
4. Recognize Omron’s strengths are based on intellectual property
Intellectual Property Activities
Contributing to Business
The Intellectual Property Center prioritizes and determines the
degree of importance of research projects, in accordance with
our business strategies, and carries out the formulation of
intellectual property strategies in a focused manner, with the
objective of contributing to business through the efficient and
effective use of management resources. Investments are made
from the near-term perspective of strengthening current core
businesses and from the long-term perspective of advancing in
the direction of next-generation technological innovation to
create new business while ensuring that the core businesses
will remain vital in the future. The center also identifies and
analyzes technological trends in new markets, such as
environmental businesses, to ensure the Company is fully
prepared to create an Omron-style business using fundamental
Omron technology and respond swiftly to business opportunities
that may appear when the markets begin expanding.
The Center contributes to the growth of our business value
over the long term through intellectual property by strengthening
internal coordination to respond to rapidly changing market
conditions, accurately assessing our core technologies, creating
a matrix of our businesses and technologies, and thus
Intellectual Property and R&D-Related Data
Promoting Globalization of Intellectual
Property Capabilities
The globalization of our intellectual property has been advancing
ahead of the Omron Group’s Hyper-Global business development.
Our Singapore headquarters, in particular, is positioned as a hub
that is capable of consolidating patent applications and filings for
those innovations created by the Group globally. At the same
time, we are bolstering the functions necessary to support
intellectual property activities in general in the Asia Pacific region,
which is anticipated to experience rapid market growth.
In China, we have expanded both in production and
development and are establishing intellectual property functions
to support localized innovation. With the aim of greatly
enhancing our intellectual property capabilities in China, we are
providing intensive training for Chinese staff to cultivate local
intellectual property management and specialist staff. Similar
training and staff development programs are being conducted at
local affiliated companies in the United States.
We are making steady progress in fortifying our foundation for
global intellectual property through the active cultivation of staff
at all our global operating sites who can contribute to the
Group’s business success with intellectual property expertise.
We are also establishing a global intellectual property
management system and reducing intellectual property risks to
achieve results that are the key components of strong global
intellectual capabilities.
Intellectual Property Holdings in Japan and Overseas
Trademark
rights
12%
Design
rights
12%
Patent rights,
Utility model
rights
27%
Total number of
intellectual properties
Over-
seas
held: 10,704
(as of the end of
Japan
fiscal 2011)
Patent rights,
Utility model
rights
29%
Design
rights
10%
Trademark
rights
10%
Fiscal Year
Number of patents
Applications
Approvals
Total patents
R&D expenses (billions of yen)
R&D expense / Sales ratio
48
Omron Corporation
2007
1,255
943
5,717
515
2008
1,119
826
5,205
489
2009
794
730
5,218
378
2010
901
753
5,452
413
2011
1,068
915
5,959
421
6.7%
7.7%
7.2%
6.7%
6.8%
R&D
Fostering Innovation through
Sensing and Control
The Omron Group conducts R&D in line with a medium- to long-term technology strategy designed to cultivate and
strengthen the Group’s technologies.
Sensing and control, our strengths and core competences, are at the center of our technology strategy. Adopting a
Companywide perspective, the corporate R&D laboratories that constitute our technology headquarters handle the
development of basic technology, while individual business divisions pursue applied technological and product development.
We prioritize the allocation of R&D expenses toward our mainstay businesses, Industrial Automation Business and Electronic
& Mechanical Components Business, aiming to reinforce their product development and manufacturing technologies. Also, we
are pursuing proactive R&D initiatives in the growth business areas of healthcare and the environment.
Core Technologies: What is Sensing & Control Technology?
This is technology used to identify and gather the special data that is needed by people or a system and then rapidly and skillfully
processed to provide valuable information. Omron seeks to create machines with capabilities approaching the level of the five senses,
knowledge, and power of judgment of humans with the objective of realizing machines that can provide optimal service and data to
each individual customer.
Monitoring
Human will
and thoughts
Human body data
Location and
condition of a
person or object
Simulation
data
Gathers
only
the required
data
IN
Sensing
&
Control
Industry
Safety and Security
Conversion
into value
OUT
Value
Environment
Society
Specified data of
a person or object
Small
Fast
Easy
Highly
reliable
Efficient
Optimal
Health
Lifestyles
Natural environment
Integrated Report 2012
49
R&D
Fostering Innovation through Sensing and Control
Automotive Electronic Components
Business (AEC)
To make automobiles more comfortable and fuel
efficient, we are moving forward with the
development of electrically driven power steering
control technology. Through this technology,
which provides steering force assistance, we
strive to further enhance product quality.
Electronic and Mechanical Components
Business (EMC)
Omron uses high-precision electroformed
contacts formed with electroplating
methods for the battery connectors
found in mobile phones. This approach
enables the development of
microminiaturized connectors with
modifiable terminal shapes and
superior properties, which had been
difficult to realize using conventional press
processing techniques.
Automotive
Electronic
Components
Business
(AEC)
Social Systems,
Solutions and
Service Business
(SSB)
Social Systems, Solutions and Service
Business (SSB)
In this business, Omron develops remote
monitoring systems, human detection
sensors, and camera systems. These
products contribute to safety and security
at next-generation train stations and help
ensure passenger safety.
Electronic and
Mechanical
Components
Business
(EMC)
Sensing
&
Control
Healthcare Business (HCB)
In accordance with our mission “to help
realize health and comfortable life for
people around the world,” we
endeavor to develop health-oriented
products that deliver new value. For
example, we were the first
organization in the world to provide
medical equipment for measuring the
percentage of visceral fat simply and
safely, without exposing patients to the risks
attendant to bombarding visceral fat areas with X-rays.
Healthcare
Business
(HCB)
Industrial Automation Business (IAB)
We provide Sysmac—the world’s fastest machine
controller that uses communication technology
to connect control devices swiftly and employs
programming software designed to
international standards—as well as vision
sensors and other devices. These offerings
contribute to higher productivity for plant
equipment and facilities as well as gains in
product quality.
Industrial
Automation
Business
(IAB)
Other
Businesses
Other Businesses
One of the VG2020 strategies involves the
environmental business. In this area, we have
developed power conditioners for solar power
with built-in multiple-unit Anti-Islanding COntrol
Technology (AICOT). We are also working to
develop ultracompact sensor devices with
environmental and health applications. Based on
semiconductor technologies, these devices are
used to sense temperature, airflow, and pressure.
50
Omron Corporation
Integrated Report 2012
51
The Omron Principles and CSR Management
Living up to the Corporate Core Value of
“Working for the Benefit of Society”
Maintaining Honest Dialogue with
Stakeholders to Build Relationships of Trust
Corporate Motto and the Omron Principles
Corporate Motto
The Omron Principles
At work for a better life,
a better world for all
Corporate
Core Value
Working for the
benefit of society
Management Principles
• Challenging ourselves to
always do better
• Innovation driven by
social needs
• Respect for humanity
Management Commitments
• Respect for individuality
and diversity
• Maximum customer
satisfaction
• Relationship-building
with shareholders
• Awareness and practice
of corporate citizenship
Guiding Principles for Action
• Quality first
• Unceasing commitment
to challenging ourselves
• Integrity and high ethics
• Self-reliance and mutual
support
Corporate Core Value: “Working for
the Benefit of Society”
On May 10, 2006, in honor of Omron’s Founda-
tion Day, the Company announced its new
corporate principles: the Omron Principles. The
new principles were established to respond to
the change in values society requires from
companies as well as Omron’s drive to promote
business globally. According to the Omron
Principles, “working for the benefit of society”
is positioned as the corporate core value that
describes the true purpose of the Omron Group’s
existence.
The underlying philosophy of these principles is
that a company’s reason for existence is to serve
society, and only companies that add value and
meet social needs can earn trust and confidence
from society as good corporate citizens and thus
successfully continue to survive as businesses.
The core value reemphasizes the Company’s
commitment to offering benefits for society while
also clearly stating Omron’s determination to
promote business management that emphasizes
value for stakeholders that comprise society.
in turn, spending more than three hours at each location explain-
ing to local executives the concepts behind the Omron Principles
and their implementation. These meetings, which include involved
discussions on the content of the Omron Principles, assist in con-
firming mutual understanding. The meetings are being held at 30
overseas and three domestic locations and involve approximately
300 participants. The managers who attend these meetings
subsequently discuss this content with their subordinates to
instill the Omron Principles throughout the Group.
To deepen employees’ understanding of the Omron Principles
that have carried on for half a century, we have created a comic
book, the Kazuma Tateishi Story, introducing our founder’s
personal background and his struggles to create new business-
es. We distribute the book to employees at overseas locations.
The story has already been
translated into English, Malay, Thai,
Vietnamese, Indonesian, Hindi,
and Chinese. We added Korean to
this list in 2011. The comic book
has proved to be an effective tool
for helping overseas employees
understand the Omron spirit.
Instilling “Management Commitments” and “Guiding
Principles for Action” through Two Guidelines
To ensure the fundamental CSR concepts specified in the
Management Commitments are being thoroughly practiced by all
Group employees, Omron has formulated two guidelines. The
CSR Practice Guidelines establish a code of conduct outlining the
societal responsibilities of each organization in the Omron Group.
The second guideline, Implementing the Guiding Principles for
Action, details specific actions expected of all employees in the
course of their everyday activities and constitutes Guiding
Principles for Action for the corporate philosophy.
We distribute both guidelines to all employees in Japan,
and we are striving to instill and entrench them through our
CSR-based concept of our corporate core value, “working for the
benefit of society.” To cultivate employee understanding, work-
place meetings are held once each year to confirm and debate
the content of these guidelines.
We have translated these two guidelines into 25 languages so
that they can be put into practice on a global basis.
Activities to Instill the Corporate Philosophy
Omron conducts activities to instill its corporate philosophy in
Japan and overseas.
Between 2011 and 2012, Omron’s chairman and vice chairman
are visiting the sites of each of the Company’s global operations,
52
Omron Corporation
CSR Management
Basic CSR Policy
While remaining true to the basic spirit of our corporate motto and corporate
core value, as expressed in our Management Commitments we manage our
business in a way that emphasizes the importance of honest dialogue with
shareholders to forge relationships of trust.
CSR Practice Policies
Framework of CSR Activities
• Contribute to a better society through business operations.
Continuously offer advanced technologies and high-quality products and
services by stimulating innovation driven by social needs.
• Show a commitment to addressing societal issues as a
Business
concerned party.
Address issues such as human rights, the environment, diversity, and
community relations in a way that draws on Omron’s distinctive strengths.
• Always demonstrate fairness and integrity in the promotion
of corporate activities.
Promote more transparent corporate activities that maintain fairness and
integrity not only through strict compliance with laws, regulations, and
social rules but also through increased accountability.
Integrating CSR Promotion under Our Management Strategy
Society
Environment
Corporate Governance/
Internal Controls
• Compliance • Maintenance of corporate ethics
• Information disclosure • Risk management
In fiscal 2011, Omron formulated a new long-term strategy, VG2020, centered on a CSR perspective, thereby integrating CSR and over-
all strategies. At this time, we transferred the main functions of the Group CSR Committee to the Executive Council, integrating them
with the council’s other responsibilities. The committee was subsequently dissolved on March 29, 2012. Supervisory departments and
the CSR-related committees that formerly operated under the Group CSR Committee will continue to take primary charge of individual
CSR issues, which we will work to resolve on a Groupwide basis.
How We Respond to Individual CSR Issues
Individual CSR issues
Department in charge
Heads of CSR-related committees
Innovation driven by social needs
Safety assurance for products and services and
protection of customers
Environmentally conscious business activities
Environmental conservation activities
Respect for human rights
Business divisions, R&D division
Business divisions, quality department
Business divisions, environment
department
Personnel department, legal affairs
department
Companywide quality assurance council
Group Environment Committee
Central Human Rights Committee
Labor standards compliance and respect for
individuality and diversity
Personnel department
Committee for Promoting Employment of People
with Disabilities
Occupational health and safety
Personnel department, legal affairs
department
Community involvement and social contributions
(Corporate citizenship)
Personnel department
Management of information and intellectual
property
Competition and fair dealing
Prevention of corrupt practices
Proper discharge of tax responsibilities,
accounting, and investment activities
Respect for local communities
Legal affairs department, information
systems department, intellectual
property department
Legal affairs department, purchasing
department
Legal affairs department
Finance department
Legal affairs department, general
affairs department
Strict trade management for the maintenance of
international peace and security
Legal affairs department
Prohibition of abuse of corporate position in
personal life
Legal affairs department, personnel
department, investor relations
department
Overall control of CSR
CSR policy, guidelines, and gathering of related
information
CSR department
Occupational Safety and Health Committee
Central Disaster Prevention Committee
Information Security Management Committee
Group Ethical Behavior Promotion Committee
Export Management Committee
Information Disclosure Executive Committee
Integrated Report 2012
53
Framework of
CSR activities
Business
Environment
Society
Governance
Corporate Philosophy and CSR Policy
ESG Information on Our Website
Observance of International CSR
Standards and Guidelines
Detailed environmental, social, and governance (ESG) information is provided on our website.
upholding the united Nations Global Compact’s 10 Principles
http://www.omron.com/about/csr/
The Omron Principles and CSR Policy
Reporting from a Social Perspective
• The Omron Principles
• CSR Policy
• Support for the UN Global Compact
Reporting from an Environmental Perspective
• Environmental Policy, Vision, Targets, and Results
• Special Feature on the Environment
• Green Omron 2020 and Action Guidelines
Omron Eco-Factories, Offices, and Laboratories
Environment-Friendly Business Activities
CO2 emissions reduction, waste reduction, and lowering
consumption of raw materials, reduction of PRTR substances,
water conservation, prevention of air pollution, prevention of
water pollution
Eco-Products
Creation of Environment-Friendly Products and Products That
Contribute to the Environment
Eco-product development, green procurement, product recycling
and reuse
Eco-Logistics
• Responsibility to Employees
Respect for individuality, providing growth opportunities for individuals
Employment, remuneration, employee work environment support
initiatives, and respect for human rights
Respect for workers’ rights, occupational health and safety, human
resource development
Respect for diversity, work-life balance, dialogue with employees
• Responsibility to Customers
With a primary focus on quality, developing and stably providing products
that contribute to the environment, safety, and health
Quality assurance, universal design, dialogue with customers
• Responsibility to Business Partners
Building strong partnerships
CSR procurement, dialogue with business partners
• Responsibility to Shareholders
Building relationships of trust through proactive communications
Distribution of profits, dialogue with investors
• Responsibility to Communities
Activities to contribute to international society as a good corporate citizen
Community contribution activities
Environment-Friendly Logistics
Reducing CO2 and waste emissions from logistics, conserving
resources used in logistics
Governance Report
Eco-Management
Incorporating the Environment into Corporate Management
Environmental management promotion system, environmental
accounting, environmental auditing, environmental risk manage-
ment, promoting acquisition of ISO environmental certification
Eco-Mind
Activities to Promote High Environmental Awareness among All
Employees
Environmental education and awareness enhancement
Eco-Communication
Disclosure to Society of Environmental Information and
Environmental Contribution Activities
Release of environmental information, environmental contribu-
tion activities, biodiversity initiatives
• Performance Data
• Corporate Governance
Fair and impartial management
Basic policy, corporate governance structure, information disclosure
Internal controls
• Compliance
Respecting laws, regulations, and social norms
Promoting compliance activities, compliance education, information
security, fair dealings
• Risk Management
Risk management on a global basis
Omron respects such international standards and guidelines as the Universal Declaration of Human
Rights, the UN Global Compact, ISO 26000, and the OECD Guidelines for Multinational Enterprises and
has formulated CSR Practice Guidelines as a framework for the Groupwide code of conduct. In 2008,
Omron declared its support for the 10 Principles of the United Nations Global Compact (UNGC), which
are universally accepted principles in the areas of human rights, labor standards, the environment, and
anti-corruption. Accordingly, Omron joined the Global Compact Japan Network (GC-JN), a local Global
Compact network. In 2011, Omron dispatched its representative to GC-JN to serve as the chief secre-
tariat and support the network’s administration. Omron will continue to uphold the UNGC’s 10 principles
and sincerely implement them to meet the expectations of stakeholders.
August 2012
Omron Corporation
Hisao Sakuta
Chairman of the BOD
upholding the uN Global Compact’s 10 Principles
UNGC 10 Principles
Omron Group In-House Regulations
Status of Activities
Human
Rights
Principle 1
Businesses should support and
respect the protection of
internationally proclaimed human
rights; and
Principle 2
Principle 3
make sure that they are not
complicit in human rights
abuses.
Businesses should uphold the
freedom of association and the
effective recognition of the right
to collective bargaining;
The basic policy for respect for human rights,
based on the Universal Declaration of Human
Rights, the OECD Guidelines for Multinational
Enterprises, and other major international
standards, is set forth in the Omron Group CSR
Practice Guidelines. In addition, Omron’s respect
for the ILO Declaration on Fundamental Principles
and Rights at Work is discussed in the Omron
Group CSR Practice Guidelines.
2-1-1. Respect for Human Rights
2-1-2. Labor Standards Compliance and Respect
for Individuality and Diversity
Respect for human rights
Responsibility to business
partners
Respect for diversity
Work-life balance
Procurement based on
CSR principles
Principle 4
the elimination of all forms of
forced and compulsory labour;
Labor
Principle 5
Principle 6
the effective abolition of child
labour; and
the elimination of discrimination
in respect of employment and
occupation.
Principle 7
Businesses should support a
precautionary approach to
environmental challenges;
The basic policy for environmental protection is
specified in the Omron Group CSR Practice
Guidelines.
Implementation of Green
Omron 2020
Environment
Principle 8
undertake initiatives to promote
greater environmental
responsibility; and
2-3. Environmental Protection
In 2011, Omron established its “Green Omron
2020,” a new environmental vision.
Principle 9
encourage the development and
diffusion of environmentally
friendly technologies.
Anti-
Corruption
Principle 10
Businesses should work against
corruption in all its forms,
including extortion and bribery.
The basic policy for preventing corrupt practices is
described in the Omron Group CSR Practice
Guidelines.
Compliance
Responsibility to business
partners
2-2-4. Prevention of Corrupt Practices
54
Omron Corporation
Integrated Report 2012
55
Special
Feature
Dialogue: The Importance of having a Corporate Philosophy
Earning Stakeholder Trust by Exercising
the Omron Principles
03
Hisao Sakuta
Chairman of the Board of
Directors
Omron Corporation
One Akiyama
President
IntegreX Inc.
Corporate value comprises both economic
and social factors.
Sakuta: Why did you decide to establish IntegreX Inc.?
Akiyama: I had previously worked at a securities com-
pany. It was then that I first encountered the concept of
socially responsible investment (SRI), which entails
investing in companies that practice socially responsible
management. I was deeply inspired by this concept,
even to the point of holding in-house workshops. How-
ever, I realized that developing SRI fund products would
require a more unbiased standpoint from which to evaluate
companies. Therefore, I decided to establish a company
that investigates and evaluates companies based on
corporate social responsibility (CSR). This was the birth
of IntegreX.
Conducting SRI means investing in companies from a
long-term perspective. Economic factors are naturally of
importance, but SRI requires more emphasis on social
factors, such as whether or not the company displays
integrity to its stakeholders and fulfills its responsibilities
to society. SRI is centered on the belief that if companies
do not properly address such social concerns, they will
not be able to grow and develop in a sustainable manner.
Sakuta: I believe corporate value comprises two ele-
ments: economic factors, such as sales and income, and
social factors, including ethics, morals, and just actions. It
is easy to become overly focused on the economic
factors, which can be dangerous. No matter how high the
economic value of a company may be, if it takes actions
that damage its social value, the overall corporate value
of that company will deteriorate, and it will eventually go
out of business.
Akiyama: Earning the trust of stakeholders is vitally
important for companies. When I first started this busi-
ness, I pondered considerably on the subject of a com-
pany’s responsibility to society. Through this process, I
came to realize the importance of having a corporate
philosophy. Omron has defined its corporate philosophy
as “Working for the benefit of society.” I understand that
you, Chairman Sakuta, have traveled to Omron Group
sites around the world to spread awareness regarding this
philosophy. These efforts were highly evaluated and
Omron was awarded the 2012 Integrity Award Grand
Prize from Japan’s Integrity Award Council.
A corporate philosophy should be a
platform rather than a set of rules.
Akiyama: It is of the utmost importance for a company
to practice its corporate philosophy through its business
activities and reaffirm the value of its existence. For this
reason, the corporate philosophy must be understood by
and shared among employees, and the philosophy must
resonate with employees. When employees feel the
corporate philosophy resonates with them, they are able
to understand the meaning of their work and take pride
in it.
Sakuta: In discussions with managers, we start with
how they see Omron’s corporate core value of “Working
for the benefit of society” and how they are exercising
this philosophy in their daily work. Using our strengths in
sensing and control technology, we aim to provide solu-
tions to social issues relating to safety and security, the
environment, and health by realizing “the best matching
of machines to people.” We see this as Omron’s respon-
sibility to society and our way of “Working for the benefit
of society.”
Of course, there are differences between how such
concepts are viewed by each individual employee and
how they are viewed by the Company. Therefore, it is
best if we perceive the values promoted by Omron as a
broad platform rather than as specific rules. If we are
able to make our own values resonate with the platform
created through the philosophy of “Working for the benefit
of society,” then we can become happy. There may be
some people who do not entirely agree with Omron’s
values. It is important to try to understand what other
people are thinking.
Akiyama: Employees feel great joy in their work when
the Company shares the same goals as them. Also, a
corporate philosophy cannot serve its true purpose if it is
2012 Integrity Award
A balance between binding and propelling
forces is critical to global expansion.
Sakuta: We were honored to receive this award. At
Omron, we view making the corporate philosophy known
throughout the organization as one of the most important
duties of management. Our corporate philosophy is
based on the Omron Principles, which were revised in
2006. At the time, the task of communicating these new
principles was delegated among the Company’s execu-
tives, and we held meetings at sites both inside and
outside of Japan. These efforts have been ongoing, and
since 2011, Vice Chairman Tateishi and I have held nearly
40 discussions to facilitate the understanding and imple-
mentation of the principles in Greater China, Southeast
Asia, North America, Europe, and Japan. We talk face to
face with site managers for more than three hours. The
Omron Principles represent our shared values and consti-
tute the binding force of the Company. As we continue to
grow on a global scale, balancing this binding force with
a propelling force will become increasingly important.
Currently, one-half of the Omron Group’s total net sales
derive from overseas, and two-thirds of its employees
are at overseas sites. Looking ahead, our new long-term
vision, Value Generation 2020 (VG2020), calls on us to
pursue growth through further globalization. In this
pursuit, we have to promote diversity across country and
regional borders as well as across religious and ethnic
boundaries. However, if we are not careful in developing
this diversity, we run the risk of losing the sense of unity
within the Company. That’s what the Omron principles
are for: serving as a minimal but strong force that keeps
us together.
I keep reminding managers of the importance of
bringing out their subordinates’ creativity in making sure
that Omron can continue to be a collection of freethink-
ing and free-acting individuals that exercise creativity by
sharing a set of values.
56
Omron Corporation
Integrated Report 2012
57
03 Dialogue: The Importance of having a Corporate Philosophy
not put into practice. Rather, the true value of a corporate
philosophy comes into effect when employees begin
considering how the philosophy relates to their own work.
I am very impressed with the fact that Omron actively
practices its corporate philosophy.
Borrowings should be returned with interest.
Sakuta: Once or twice a month, I visit overseas sites to
talk with site managers. I truly enjoy these face-to-face
interactions with employees and find them to be very
informative.
It could be said that all the resources needed to operate
a business are borrowed from society. For this reason, at
Omron, our basic belief is that the Company belongs to
society. The employees, capital, and social infrastructure
used in our business are all borrowed from society, thus our
responsibility is to return these borrowings with interest.
For example, our semiconductor plant in Yasu City,
Shiga Prefecture, uses a substantial amount of ground-
water. We employ refined water processing techniques
to return this water cleaner than what we borrowed.
Another example of these efforts can be found at a site
in China located in an area with a relatively high rate of
employee turnover. The manager of this site told me that
even if they knew an employee was going to quit the
following day, they would still give the employee the
At Omron, we believe
the Company
belongs to society.
Discussion in Chicago, the United States
Discussion in Amsterdam, the Netherlands
training he or she needed for that day. This manager
believed that as a manager of a local subsidiary of
Omron, which places an emphasis on “Working for the
benefit of society,” it was their responsibility to make
sure that everyone who entered the Group left it as a
stronger individual. I was very proud to hear this.
Akiyama: It is imperative for companies to fulfill their
responsibility to today’s society, but they must also work
for the society of the future. The future health of a society
requires the contributions of the companies that help
make up that society. Therefore, the sustainability of
society is a key issue. In a similar manner, when cultivating
human resources, companies need to take a long-term
perspective and work to nurture these individuals in a way
that will enable them to benefit the society of the future.
Therefore, the sustainability of society is a key issue. In a
similar manner, when cultivating human resources, com-
panies need to take a long-term perspective and work to
nurture these individuals in a way that will enable them to
benefit the society of the future.
For a company to be respected by society,
a company must respect society.
Akiyama: As you know, the “R” in “CSR” stands for
“responsibility.” However, “responsibility” can sound like
something that is forced upon a company or that it is
made to do. I feel it would be better to look at “R” as
standing for “respect.” A company must pay attention to
the various needs and trends in society, respect them,
and act accordingly. Respecting society in this manner
will ultimately lead to society respecting the company.
I believe building this type of relationship is the true goal
of CSR.
Sakuta: At a European subsidiary, I had a discussion with
managers about the type of company they envisioned for
Omron. After extensive discussion, they concluded that
they wanted Omron to be a trustworthy company. How-
ever, there are cases in which we are unable to come
through on our promises to customers due to quality
defects or other issues. In these cases, it is important we
do not simply let the agreements end in broken promises
but rather work diligently as a team to make things right.
Even in our daily interactions, our response in such situa-
tions can have a significant impact on how we are thought
of thereafter, which may be the line between being
judged as unreliable or proving our reliability. I feel the
discussion of such issues by Company representatives at
the general manager level in this manner will facilitate
Omron’s growth into an even more sound company.
Akiyama: Whether in Japan or overseas, there must be
consistency between what a company says and what it
does. Based on what I have heard so far, it is clear that
managers are constantly pondering the proper course for
the Company to take and that this process is forming the
core of Omron’s strength.
Company employees need “excitement
and anticipation.”
Sakuta: People have a tendency to turn their attention to
things that can be seen. However, there are some,
people such as musicians and poets, who try to convey
messages to the world by expressing their thoughts
through intangible mediums. In a company, how we work
can greatly influence output. In other words, output is
determined by whether or not a company’s employees
enjoy their working environment.
Akiyama: I call such types of enjoyment “excitement
and anticipation.” I also feel it is crucial for companies to
exercise the three “I’s”: Integrity, Innovation, and Ichien-
yugo (or, “circle of interdependence”). Ichien-yugo is a
term coined by Japanese philosopher Sontoku Ninomiya
and refers to the belief that everything in the world is
interdependent, as if contained within a circle. In this
way, two things that appear to be in opposition may
actually be supporting each other. There are some prob-
lems that can only be resolved by combining the unique
strengths of employees and companies or of companies
and society. While Sontoku is often thought to be a
person that spent his life toiling down a scholarly path, it
seems that he actually placed great importance on
“enjoyment.” Likewise, if one’s work lacks “excitement
and anticipation,” innovation will not arise and the indi-
vidual will not grow.
Sakuta: I agree. In fact, Omron used “excitement and
anticipation” for its long-term visions in the 1990s. We
are therefore well aware of the importance of excitement
and anticipation. You also mentioned “innovation,” which
has a special meaning for us as well. Omron founder
Kazuma Tateishi’s favorite words were “innovation” and
“creativity.” We at Omron will strive to continue being a
company at which all employees can fully exercise their
creativity and feel excitement and anticipation.
It is crucial for companies
to exercise the three “I’s”:
Integrity, Innovation,
and Ichien-yugo.
58
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59
Corporate Governance, Internal Control, Compliance, and Risk Management
Promoting Sound and Proper
Corporate Management
Omron is committed to maintaining and exercising a proper corporate governance system while increasing management
transparency. To firmly establish a high standard of corporate ethics, we will continue to enhance our compliance system
and strengthen the risk management framework that supports ongoing improvement in corporate value.
Corporate Governance
Basic Policies
Auditing Functions
Omron is making efforts to fortify its corporate governance based on
the belief that the most crucial factor in earning stakeholders’
support is building an optimal management structure and conduct-
ing fair business operations while enhancing the mechanism (a
supervisory system) for such verification and realizing sustainable
growth.
In line with this basic policy, Omron has adopted an executive
officer system and clearly separates management oversight and
business execution. Under an internal company system, Omron
is realizing faster decision making and efficient business opera-
tions by delegating substantial authority to the president of each
internal company. Moreover, autonomous individual business
units that can specialize in creating value for customers take the
initiative in conducting business. At the same time, through
commitment-based management, we clarify roles and responsi-
bilities and practice corporate value management based on
shareholder value.
Management and Oversight Frameworks
Omron is a “Company with Board of Corporate Auditors”. The
corporate governance regime has a supervisory and observational
function pertaining to the actions of the Board of Directors and also
involves auditing carried out by the Board of Corporate Auditors.
Omron has set the number of members of its Board of Directors at
seven to encourage efficient and meaningful discussion. The only
members of the Board of Directors who are also involved in
business execution activities are the president and CEO as well as
the representative director and executive vice president. Furthermore,
the business operation monitoring function of the Board of Directors
has been strengthened.
To increase objectivity in management, the positions of chair-
man and president and CEO are separated. At the same time,
every effort is made to bolster management oversight functions.
The chairman of the Board of Directors monitors business execu-
tion activities as a representative of the Company’s stakeholders.
Chaired by outside directors, Omron has established the Person-
nel Advisory Committee, the President & CEO Selection Advisory
Committee, the Compensation Advisory Committee, and the
Corporate Governance Committee. In this manner, the Company
is working to increase the transparency and objectivity of man-
agement’s decision-making process.
By incorporating the best aspects of the Companies with Com-
mittees system, we have created a type of hybrid corporate gover-
nance regime that we feel is the most appropriate for the Company.
The Board of Corporate Auditors, composed of four corporate
auditors, audits governance practices and monitors the everyday
management activities of the Board of Directors and other
management staff as well as the nature and operational condi-
tions of the corporate governance regime. The Global Internal
Auditing Headquarters, which reports directly to the president
and CEO, periodically conducts internal audits of accounting,
administration, business risks, and compliance in each headquar-
ters division and in each business company as part of its internal
auditing function. Moreover, the Internal Auditing HQ offers
specific advice for improving business functions.
Appointment of Outside Executives
To allow the Board of Directors to monitor business execution as
a representative of the Company’s stakeholders, two of the
seven directors are outside directors and two of the four corpo-
rate auditors are outside corporate auditors.
Emphasizing the independence of outside executives, Omron
has formulated its own original Outside Executive Eligibility
Criteria in addition to the requirements under Japan’s Corporate
Law. Outside executives are selected using these eligibility
criteria as our standard. In specific terms to be considered for
the position of outside executive, candidates themselves and
the companies or organizations they belong to must comply
with the seven items that serve as Omron’s selection criteria.
Among these seven items, candidates must not have assumed
the role of representative or employee of an independent auditor
for the Omron Group for five years prior to being nominated and
cannot be a major Omron Group shareholder (holding shares
that provide 10% or more of total voting rights) or a director,
auditor, executive officer, or employee of any legal entity that the
Omron Group is a major shareholder of; or a director, auditor,
executive officer, or employee of any principal partner or supplier
of the Omron Group.
The Corporate Governance Committee takes steps to confirm
the aforementioned Outside Executive Eligibility Criteria do not
pose any problem with respect to determination criteria con-
cerning independence formulated by the appropriate securities
exchange. After obtaining a resolution of the Board of Directors,
notifications are submitted with the appropriate securities
exchange for all outside executives as independent officers.
Corporate Governance Initiatives
1999
2003
2011
President
1987–
President Yoshio Tateishi
2003–
President Hisao Sakuta
2011–
President Yoshihito Yamada
Chairman of the Board
of Directors/CEO
President serves as Board of Directors’
Chairman and CEO
Chairman serves as Board of Directors’ Chairman/President
serves as CEO
Separation of
management oversight
and business execution
30 directors
1999~ Number of directors reduced to seven
1999~ Introduction of executive officer system
Advisory board
Outside directors
Outside corporate
auditors
1999
Advisory Board
One member
2003– Two members (seven directors)
One member
1999~
Two members
2003–
Three members (four auditors)
2011–
Two members (four auditors)
1996– Management Personnel
2000– Personnel Advisory Committee
Advisory Committee
Advisory committees
2003– Compensation Advisory Committee
2006– President & CEO Selection Advisory Committee
2008– Corporate Governance Committee
Corporate philosophy
Omron Principles
formulated in 1990
Revised in 1998
Revised in 2006
Corporate motto formulated in 1959
Corporate Governance Structure
Board of Corporate Auditors
Board of Directors
Chairman: Chairman of the BOD
Shareholders Meeting
Corporate Auditors Office
Board of Directors Office
Accounting Auditor
Executive Organization
President & CEO
Executive Council
Personnel Advisory Committee
CEO Selection Advisory Committee
Compensation Advisory Committee
Corporate Governance Committee
CSR-Related Committees*
Head office divisions
Business companies (Internal companies)
Internal Auditing HQ
* The Group Ethical Behavior Promotion Committee, the Information Disclosure Executive Committee, the Group Environment Committee, etc.
Board of Directors (BOD)
The BOD oversees business activities
and decides important business matters
such as management objectives and
strategies.
Compensation Advisory Committee
This committee, chaired by an external
director, determines the compensation
structure for directors and executive of-
ficers, sets evaluation standards, and
evaluates current executives.
Board of Corporate Auditors
This board oversees the corporate
governance system and its implementa-
tion and audits the day-to-day
operations of directors and other
executives.
Corporate Governance Committee
This committee, chaired by an external
director, discusses measures to contin-
uously enhance corporate governance
and increase fairness and transparency
in management.
Personnel Advisory Committee
This committee, chaired by an outside
director, sets election standards for
directors and executive officers, selects
candidates, and evaluates current
executives.
Executive Council
This council determines and reviews
important business operation matters
that are within the scope of authority of
the president.
CEO Selection Advisory Committee
This committee, chaired by an external
director, is dedicated to the nomination
of presidents and deliberates on the
selection of the new president for the
upcoming term and on preparing contin-
gency succession plans.
Director and Corporate Auditor Remuneration
To increase objectivity and transparency, the Compensation
Advisory Committee, chaired by an outside director, is consulted
on the compensation of directors. This committee discusses the
compensation of each individual and makes recommendations.
After receiving these recommendations, the amount of compen-
sation for each director is determined by a resolution of the
Board of Directors, and the amount of compensation for each
corporate auditor is determined by discussions among the
corporate auditors (resolution of the Board of Corporate Audi-
tors). These amounts are within the scope of the aggregate
compensation amounts for all directors and all corporate audi-
tors, as each has been set by a resolution of the General Meet-
ing of Shareholders.
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Omron Corporation
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61
19982001
Fiscal 2011 Director and Corporate Auditor Remuneration
(Millions of yen)
Classification
Number of People
Basic Compensation
Bonus
Total Remuneration
Directors
(Outside Directors)
Corporate Auditors
(Outside Auditors)
Total (Total for Outside
Directors and Auditors)
10
(2)
5
(3)
15
(5)
356
(21)
82
(25)
438
(46)
69
(–)
–
(–)
69
(–)
425
(21)
82
(25)
507
(46)
Compensation amounts listed above include compensation paid to the 3 directors and 1 outside corporate auditor that resigned following the end of the 74th annual shareholders’
meeting held on June 21, 2011.
Director compensation consists of basic compensation (monthly salary), bonus, and stock-based compensation.*
Outside director compensation consists of basic compensation (monthly salary).
Corporate auditor compensation consists of basic compensation (monthly salary).
* Stock-based compensation is administered following guidelines specifying set remuneration amounts to be paid on a monthly basis and utilized to acquire Company stock (through
a director stock ownership plan), which is then held during the individual’s tenure.
Appointments of Directors and Corporate Auditors
Personnel Advisory
Committee
President & CEO
Selection Advisory
Committee
Compensation
Advisory
Committee
Corporate
Governance
Committee
Board of Directors
Internal
Directors and
Auditors
Outside
Directors and
Auditors
Position
Name
Chairman of the BOD
Hisao Sakuta
Director and Executive
Vice Chairman
Representative Director
and President and CEO
Representative Director
and Executive Vice
President
Senior Managing
Director
Director
Director
Full-time Corporate
Auditor
Full-time Corporate
Auditor
Fumio Tateishi
Yoshihito Yamada
Yoshinobu Morishita
Akio Sakumiya
Kazuhiko Toyama
Masamitsu Sakurai
Soichi Yukawa
Tokio Kawashima
Corporate Auditor
Hidero Chimori
Corporate Auditor
Eisuke Nagatomo
Note:
is the chairman
Internal Controls
Maintaining and operating an internal control system to
ensure healthy and effective organizational operations
Two types of internal audits to ensure healthy and
effective organizational operations
Omron has established the Basic Policy on the Maintenance of an
Internal Control System to ensure the healthy and effective opera-
tion of its organization. This policy provides the basis for the mainte-
nance and operation of an internal control system throughout the
Omron Group to ensure the controls are functioning effectively in
each of the four objective areas of financial report accuracy, legal
compliance, operating efficiency, and asset safeguarding.
Omron maintains a monitoring system undertaken by the
internal audit department after each division and affiliated
company conducts its own review of the maintenance and
operation of business processes in accordance with the Internal
Control Reporting System (J-SOX) requirements of Japan’s
Financial Instruments and Exchange Act promulgated in June
2006. The reviews enable each division and affiliated company to
deepen their understanding of the internal controls associated
with financial reporting and thereby serve as a system for
promoting self-governing controls.
Omron conducts two types of internal audits to ensure the
healthy and effective operation of its organization.
The Internal Control Audit is conducted to ensure the internal
controls are functioning effectively in each of the four objective
areas of financial report accuracy, legal compliance, operating
efficiency, and asset safeguarding. The Management Audit
examines the solutions and improvement measures implement-
ed for specific management issues. In the event the result of
these audits includes items recommended for improvement, the
Company supports measures to carry out the improvements.
In addition, the Omron Group has established a Corporate
Auditor Office and placed full-time auditors in each of its four
regions of global business (the Americas, Europe, Greater China,*
and Asia Pacific) to implement internal audits based on local
practices and legal systems at its business sites worldwide.
* Greater China includes China, Hong Kong, and Taiwan.
Compliance
Strengthening global risk management systems
Promoting continuous improvement of management
on the back of a PDCA cycle
Omron’s policy in enhancing information security is to fulfill its
responsibilities to stakeholders by appropriately managing
confidential information supplied from business associates as
well as personal information and its own corporate information
to protect from leakage.
Within the Company, an Information Security Management
Committee was set up as a Groupwide promotional organization
after formulating new management rules that reflect basic
policy. In this regard, Omron is implementing an integrated
management system covering both confidential information and
personal information. As a specific activity, and under the promo-
tion system led by the committee, Omron has conducted
employee education and monitoring to check the status of
management at each worksite. Other activities included the
implementation of measures based on risk analysis for the
leakage of important information and surveys to determine the
information security management status of subcontractors on a
regular basis. Through these activities, the improvement of
information security is sought based on the implementation
of a Groupwide PDCA cycle.
Each year, management rules are reviewed and revised to
reflect changes in the external environment and incorporate
findings from worksite monitoring. In fiscal 2011, a new rule was
added regarding the use of smartphones and related devices.
Overseas, a set of common global rules for information
security has been established, with each Group company
establishing its own regulations based on the common global
rules. Furthermore, information security education is offered at
each affiliated company on a successive basis with steps taken
to confirm the status of management implementation.
Going forward, Omron will continually upgrade and maintain
information security management throughout the world.
Aiming to promote legal and regulatory compliance across the
Group, Omron set up a Group Corporate Ethical Conduct Promo-
tion Committee. In recent years, the committee has expanded
its activities from the promotion of compliance to quick detec-
tion and sharing of risks associated with changes in laws and
regulations and other external environment factors as well as
such changing internal conditions as the launching of new
businesses and entering emerging markets. The committee
members consist of corporate ethics officers from each busi-
ness company and corporate headquarters division in charge of
human resources, general administration, and legal affairs.
In fiscal 2011, the Company formulated the Global Crisis Man-
agement Rules, which cover a wide range of areas, including
reporting channels and response systems in the event of a crisis in
Japan and overseas. At the same time, Omron conducted risk
analysis at several overseas affiliated companies. Moreover,
compliance monitoring activities were undertaken in the person-
nel, labor, and other priority risk fields.
Affiliated companies in Japan appointed corporate ethics
promotion officers in charge of offering compliance education
selected from among manager- and higher-ranking employees.
A corporate ethics promotion officer meeting is held once a year
with these members participating to exchange information
regarding the implementation of a plan-do-check-act (PDCA)
cycle in accordance with an action plan as well as hosting
compliance training.
In fiscal 2012, Omron will put in place a business continuity
plan (BCP) based on deliberation details undertaken by the
Group Corporate Ethical Conduct Promotion Committee in fiscal
2011. At the same time, the Company will strengthen risk man-
agement activities focusing mainly on compliance with global
statutory and regulatory requirements.
Establishing operational regulations with clearly
stated provisions for the protection of whistle-blowers
In Japan and North America, a whistle-blower hotline is in place
inside and outside of the Company for Omron Group executives,
full-time employees, and temporary staff as well as their families.
The Legal Affairs Department staff handle hotline information
within the Company, while an external attorney office serves to
accept information. In fiscal 2008, it became possible to contact
the hotline or seek advice through the electronic bulletin board
on the Company’s intranet in Japan in addition to conventional
telephone and e-mail access.
In fiscal 2011, a total of 15 hotline contacts were made in
Japan and two in North America.
In operating the whistle-blower hotline, responses are based
on the Group’s CSR Guidelines. These guidelines clearly state
strict maintenance of security and the protection of whistle-
blowers from any detrimental treatment. Moreover, Omron
informs employees of the availability of the hotline through
corporate ethics cards, through the intranet, and during new
employee training. Ongoing case studies are used to help
further the skills of advisors. Omron will continue making the
hotline available and improving its response to whistle-blowing.
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63
Risk Management
Basic crisis management policies
Business Continuity Plan (BCP)
Directors, Corporate Auditors, and Executive Officers
As of June 21, 2012
A series of events, including the Great East Japan Earthquake on
March 11, 2011, as well as the flooding in Thailand in October
2011, reinforced the importance of business continuity amid a
crisis to management.
Currently, Omron is conducting Groupwide efforts to review
its BCP, focusing particularly on prioritizing such critical functions
and areas as the head office, headquarters, IT, production, and
supply chain management (SCM).
According to the Global Crisis Management Rules (established
in 1999 and revised in 2011), a “crisis” is defined as any event
that has or may have a significant negative impact on the con-
tinuation of management and business activities by the Omron
Group;
or any event that does or may harm the social credibility of the
Company. These rules cover a wide range of areas while also
outlining basic policies, reporting procedures, and the establish-
ment of an Emergency Response Headquarters.
Based on the Global Crisis Management Rules, the Company
established Disaster Contingency Planning Rules (established in
1999 and revised in 2011) as well as the Product Quality Risk
Management Rules (established in 2012). In addition to
implement ing response procedures by each type of crisis, Omron
is pursuing the compilation of a disaster response manual.
Omron is striving to instill a greater awareness and understand-
ing of the details of these rules among employees by organizing
simulation drills to assist employees in preparing for possible
crises. Moreover, the Company provides training sessions for
emergency risk communications. The Omron Group initial
emergency response manual was prepared by referring to
countermeasures taken in past cases and applying knowledge
gained through drills. This manual serves as an important
reference for the Emergency Response Headquarters in the
event of a crisis.
Basic Policies of Omron’s Global Crisis Management Rules
Taking into consideration the Omron Principles and CSR Guidelines, all Omron Group executives
and employees will take swift and appropriate action based on the following basic policies:
1. Place human life and personal safety at the top of the list of priorities.
2. Give high priority to legal/regulatory compliance and respect for social rules (fairness).
3. Minimize the negative impact of crises on customers and society.
4. Curtail the negative impact of crises on Omronʼs business and strive to ensure smooth
continuation and quick restoration of business operations.
5. Take necessary measures in a sincere and consistent manner
(proper risk communication).
6. Disclose information appropriately and remain accountable (transparency).
Back row, from left:
Soichi Yukawa
Full-Time Corporate
Auditor
Hidero Chimori
Outside Corporate
Auditor
Kazuhiko Toyama
Outside Director
Masamitsu Sakurai
Outside Director
Eisuke Nagatomo
Outside Corporate
Auditor
Tokio Kawashima
Full-Time Corporate
Auditor
Front row, from left:
Yoshinobu Morishita
Representative Director
and Executive
Vice President
Hisao Sakuta
Chairman of the BOD
Yoshihito Yamada
President and CEO
Fumio Tateishi
Director and Executive
Vice Chairman
Akio Sakumiya
Senior Managing Director
Directors
Chairman of the BOD
Hisao Sakuta
Director and Executive Vice Chairman
Fumio Tateishi
Outside Directors
Kazuhiko Toyama
President & CEO of Industrial Growth Platform, Inc.
Masamitsu Sakurai
Chairman and Executive Officer of Ricoh Co., Ltd.
Honorary Chairman
Yoshio Tateishi
Representative Director and
President and CEO
Yoshihito Yamada
Representative Director and
Executive Vice President
Yoshinobu Morishita
Senior Managing Director
Akio Sakumiya
Corporate Auditors
Full-Time Corporate Auditors
Soichi Yukawa
Tokio Kawashima
Outside Corporate Auditors
Hidero Chimori
Partner of Miyake & Partners, Attorney at Law
Eisuke Nagatomo
President & CEO of EN Associates Co., Ltd.
64
Omron Corporation
Integrated Report 2012
65
Senior Managing Officer
Executive Officers
Managing Officers
Shigeki Fujimoto
Group Earnings Structure Reform
Administrator
Yoshinori Suzuki
President and CEO,
OMRON AUTOMOTIVE
ELECTRONICS Co., Ltd.
Masaki Arao
Senior General Manager,
Technology & Intellectual Property
H.Q.
Kiichiro Kondo
President and CEO,
OMRON SOCIAL SOLUTIONS
Co., Ltd.
Kiichiro Miyata
President and CEO,
OMRON HEALTHCARE Co., Ltd.
Koichi Tada
Company President, Electronic and
Mechanical Components Company
Masayuki Tsuda
(China Resident Officer)
Chairman and President, OMRON
ELECTRONIC COMPONENTS
(SHENZHEN) LTD.
Electronic and Mechanical
Components Company
Hideji Ejima
Environmental Solutions
Business H.Q.
Manager, Business Planning
Department, Environmental Solutions
Business H.Q.
Masaki Teshigahara
Technology & Intellectual Property
H.Q.
General Manager, Intellectual Property
Center, Technology & Intellectual
Property H.Q.
Taiji Sogo
Senior General Manager, Strategy
Planning Division H.Q., Industrial
Automation Company
Koji Doi
(China Resident Officer)
Chairman and President, OMRON
(CHINA) CO., LTD.
Hisato Takano
Senior General Manager, Sales &
Marketing Division H.Q., Industrial
Components Division H.Q.
Industrial Automation Company
Takashi Ikezoe
Senior General Manager,
Industrial Components Division H.Q.
Chairman, OMRON (SHANGHAI) CO.,
LTD.
Industrial Automation Company
Yoshihiro Taniguchi
Representative Director and CEO,
OMRON SWITCH & DEVICES
Corporation
Kiyoshi Yoshikawa
Senior General Manager, Global
Process Innovation H.Q.
Koji Nitto
Senior General Manager,
Global Resource Management H.Q.
Shizuto Yukumoto
Senior General Manager,
Environmental Solutions Business
H.Q.
Toshio Hosoi
Managing Director, OMRON SOCIAL
SOLUTIONS CO., LTD.
Shinya Yamasaki
Senior General Manager, Automation
Systems Division H.Q.
Industrial Automation Company
Yutaka Miyanaga
Senior General Manager,
Global Strategy H.Q.
Satoshi Ando
Senior General Manager,
Investor Relations H.Q.
Nigel Blakeway
(U.S. Resident Officer)
Chairman, President and CEO,
OMRON MANAGEMENT CENTER OF
AMERICA INC.
Chairman and President, OMRON
MANAGEMENT CENTER OF EUROPE
Goshi Oba
(China Resident Officer)
Chairman and President,
OMRON INDUSTRIAL AUTOMATION
(CHINA) CO., LTD.
Industrial Automation Company
Takayoshi Oue
Senior General Manager,
Accounting and Finance Center,
Global Resource Management H.Q.
66
Omron Corporation
Integrated Report 2012
67
Special
Feature
Corporate Governance
Working to Enhance
Omron’s Corporate Value
04
Interview with Masamitsu Sakurai, Outside Director
Exemplified by its unique CEO Selection Advisory Committee, Omron’s
robust systems of checks and balances as well as supervision are enhancing
the Company’s corporate value.
—— What roles do you play within the Company’s
Board of Directors and each of its advisory com-
mittees as an outside director?
When considering why I was selected as an outside
director by the Company, I naturally assume that it is
because of my common skill set and experience within
the manufacturing industry. On second thought, how-
ever, Omron is essentially a component and materials
manufacturer, while as Chairman of Ricoh Co., Ltd., I
oversee the assembly of finished products. Recognizing
that manufacturing comes in many shapes and forms, my
role then is to provide input from a different perspective
within the broad manufacturing domain. Coming from a
company that took the path toward globalization a little
earlier than Omron’s initial foray, I expect the Company
will be looking to draw on my experience and knowledge
in this area.
Against the backdrop of a harsh operating environment,
Ricoh has continued to generate steady increases in
revenues and earnings. In hindsight, however, this
growth has occurred without implementing the neces-
sary fundamentals and foundation. Drawing on past
experience, therefore, I see my role as an outside direc-
tor to provide advice that may benefit the Company and
prevent it from taking the wrong path. In another area,
I recognize the importance of Omron’s Personnel Advi-
sory Committee in selecting candidates for the positions
of director, corporate auditor, and executive officer. I am
impressed by the Company’s President & CEO Selection
Advisory Committee, an unprecedented initiative, and
Omron’s steps to establish a fair and impartial personnel
selection system. Coming from outside the Company,
however, I see my role as contributing to the overall
design of Omron’s systems and determining the types of
mechanisms and processes that best fit the Company.
—— In recent years, we have witnessed a suc-
cession of incidents within the corporate sector,
most notably misconduct by senior executives.
As an outside director, how are you involved in
the Company’s system of director checks and
balances and supervision?
With each incidence of misconduct, I have felt that the
point of initial focus has generally been misdirected.
Before questioning whether the external governance is or
is not effective, emphasis should be placed on the inter-
nal governance. In instances where in-house personnel
have a firm grasp on financial and other pertinent infor-
mation, abnormal situations are readily uncovered at an
early stage. The importance then is on establishing an
environment in which any incidence of concern can be
openly and freely brought to light. Quite frankly, the need
to call on external resources because internal personnel
do not want to be whistle-blowers is absurd. In this
regard, the attitude and behavior of the president is of
paramount importance. When senior executives act in a
fair and honest manner, employees will follow suit and
behave accordingly. The role of an outside director is
therefore to provide input into governance mechanisms,
including a company’s checks and balances as well as
supervisory systems from a separate perspective. This is
the principle to which I strive to adhere.
—— What do you believe are Omron’s strengths?
There are several. I believe the most impressive strength
has been the Company’s genuine and earnest efforts to
establish a robust foundation. I am constantly impressed
that whenever an officer provides an explanation of a
particular project or undertaking, it is always based on a
detailed understanding of where the particular business
structure fits within the Company’s overall profit struc-
ture. Everyone within the Company maintains a com-
monly shared image of the degree to which a particular
area requires adjustment, be it costs, fixed, or variable
expenses. This naturally dovetails into a feature of particu-
lar strength, namely the speed with which decisions are
made. Another attribute that defines Omron as a com-
pany is its focus on teamwork. Such sports as soccer and
rugby are based a predetermined set of rules. Omron is
guided by a discipline that places the utmost emphasis
on the Company’s profit structure. This rallying catch-
phrase and commonly held philosophy is truly amazing.
—— What are your thoughts on the Omron
Group’s corporate culture?
In a word, I would say that “earnest” best describes
Omron’s corporate culture. More than just a mere super-
ficial pursuit of the truth, the Company takes steps to
ascertain the roots of a particular matter and fully under-
stand its structure.
This stance is also a distinguishing feature of the
manufacturing sector. Using the Board of Directors as an
example, Omron maintains an open environment that is
conducive to the lively exchange of opinions between
directors and executive departments. This positive trait
that extends throughout the entire Company, coupled
with genuine and flexible efforts to lend a keen ear to the
views of outside directors, are the sources of Omron’s
highly effective corporate governance.
—— What do you feel is required for Omron to
enhance its corporate value?
Omron is currently stepping up its activities in such
promising fields as environmental solutions and health-
care. Recognizing the critical need to secure innovative
technologies if the Company is to nurture these activities
as its next core businesses, I believe it is vital for Omron
to not only form alliances but also enter into M&As with
a strong and unwavering resolve.
Looking ahead, it is imperative that the Company intro-
duce innovations that change the way people behave. To
this end, Omron must accurately picture customers’
future lifestyles and become a company that is capable of
delivering added value that exceeds market expectations.
Of equal importance, and in combining its expertise
across a variety of fields with wide-ranging technologies,
the Company must broaden its horizons beyond the
engineering perspective and incorporate within its ranks
personnel from a diversity of areas. Only in this manner
can the Company hope to come up with the fresh and
innovative ideas necessary to achieve the aforementioned
goal. It is up to Omron’s president to make the bold
decisions to introduce those human resources and acquire
those companies that can trigger change in areas that are
considered of significant value. I would therefore encour-
age Mr. Yamada, Omron’s president, to take increasingly
audacious strides going forward.
Outside Director
Masamitsu
Sakurai
Chairman of
Ricoh Co., Ltd.
Masamitsu Sakurai joined Ricoh Co., Ltd., in 1966. Following successive
appointments as president of Ricoh UK Products Ltd. in 1984, director of Ricoh
Co., Ltd., in 1992, representative director and president in 1996, representative
director and chairman in 2007, and chairman of the Japan Association of
Corporate Executives (Keizai Doyukai), Mr. Sakurai assumed the position of
director and chairman of Ricoh Co., Ltd., in 2011. As the first person with a
technical background to take the helm of Ricoh Co., Ltd., Mr. Sakurai led the
charge toward digital networking, helping the company to develop into a leading
IT entity. In addition to promoting environmental management that balances both
corporate management and environmental concerns, Mr. Sakurai adopted an
aggressive approach toward overseas M&A and was instrumental in the
company’s global growth. Drawing on this proven track record, and after
assuming the position of Keizai Doyukai chairman, Mr. Sakurai put forward
numerous telling recommendations in the fields of both politics and industry.
Appointed an Omron outside director in 2008, Mr. Sakurai has received many
honors, including Commander of the Most Excellent Order of the British Empire in
2003, L’ordre national de la légion d’honneur (National Order of the Legion of
Honour) from the French Republic in 2006, and the Deming Prize in fiscal 2011.
68
Omron Corporation
Integrated Report 2012
69
Interview with Eisuke Nagatomo, Outside Corporate Auditor
Through a corporate governance structure that places the utmost emphasis
on sustainability based on the values of its founder as well as resolute risk
management, Omron is steadily enhancing its corporate value.
—— What roles do you play within the
Company’s Board of Directors and its Corporate
Governance Committee as an outside corporate
auditor?
When conducted in good faith, both the Company with
Committees system, commonly adopted throughout
Europe and the United States, and Japan’s unique Com-
pany with Board of Corporate Auditors’ system are more
than adequate in addressing the needs of all stakehold-
ers. As someone who was appointed as an outside
corporate auditor at the Company’s Shareholders Meet-
ing, it is my duty to draw on every possible source of
outside information and enhance Omron’s management
integrity from a broad perspective. To ensure manage-
ment that consistently addresses the needs of all stake-
holders in good faith, a variety of steps are undertaken.
For example, the Corporate Governance Committee,
which comprises outside directors and outside corporate
auditors, deliberates on those items that it considers are
important to increasing shareholder value. When asked
what must be protected, the answer lies not in the
interests of management, but in the interests of all
stakeholders, including shareholders. As outside corpo-
rate auditors, our role is to protect Omron’s corporate
value. At the same time, I am convinced that enhancing
corporate value is firmly entrenched in the hearts and
minds of the Company’s management.
—— In recent years, we have witnessed a suc-
cession of incidents within the corporate sector,
most notably misconduct by senior executives.
As an outside corporate auditor, how are you
involved in the Company’s system of director
checks and balances and supervision?
The duties of an outside corporate auditor extend well
beyond attending meetings of the Boards of Directors
and Corporate Auditors and reviewing company docu-
ments. In addition to attending every possible meeting,
an outside corporate auditor must maintain continuous
and constant dialogue with executive officers, visit
branch offices and plants, and actively seek opportunities
to listen carefully to comments from the frontline. Con-
ducting numerous hearings directly with employees and
making every effort to accurately grasp the status of
business execution and operations is an effective way to
peg back any incidence of misconduct. For agenda items
scheduled for deliberation and determination by the
Board of Directors, the Board of Corporate Auditors must
play a central role in screening each item through a
process of prior consultation. In the event that a pro-
posed agenda item is considered inappropriate, it is the
responsibility of outside corporate auditors and the Board
of Corporate Auditors to instruct the responsible depart-
ment to make the appropriate modifications or to with-
hold the agenda item. In my experience with the
Company, there has never been an occasion where
instructions have been ignored or an agenda item al-
lowed to proceed to the Board of Directors without
modification or the appropriate action. In my opinion,
Omron’s systems in this regard are functioning more
than adequately.
—— How would you assess the effectiveness of
Omron’s corporate governance?
When serving as managing director of the Tokyo Stock
Exchange, I had the opportunity to closely examine more
than 700 companies. Compared with these companies, I
can commend Omron for its sound initiatives and activi-
ties. The Company is indeed defined by a corporate
governance structure that imbues the spirit and values of
its founder and an unwavering focus on enhancing sus-
tainability. A majority of the Board of Directors comprises
04 Corporate Governance
Outside
Corporate Auditor
Eisuke
Nagatomo
President and Chief
Executive Officer of
EN Associates
Co., Ltd.
Eisuke Nagatomo joined the Tokyo Stock Exchange, Inc., in 1971 and was
appointed managing director in 2003. In 2005, Mr. Nagatomo was appointed chief
self-regulation officer and continued in this position through to 2007. In the same
year, Mr. Nagatomo became president and chief executive officer of EN Associates
Co., Ltd., and appointed an outside corporate auditor of Omron Corporation in
2008. Mr. Nagatomo serves as a visiting professor of the Graduate School of
Commerce, Waseda University, and as an outside director of kabu.com Securities
Co., Ltd., and Miroku Jyoho Service Co., Ltd., since 2010. Mr. Nagatomo is also an
outside corporate auditor of Nikkiso Co., Ltd.
what is required for a global company and how best to
enhance CSR. In addition, and as a member of society,
it is my responsibility to constantly point out the risks of
failing to take appropriate action from a variety of legal
and other aspects. I would therefore like to do my ut-
most to assist Omron enhance its corporate value.
—— In closing, is there a message that you
would like to convey to stakeholders?
I would call on all stakeholders to adopt an open and frank
stance when analyzing the Company. Moving beyond
immediate gains and profits, I would ask that stakehold-
ers point out any areas in which they believe Omron is
lacking, particularly in the Company’s efforts to further
enhance its significance to society. At the same time,
I would hope that stakeholders will support the Company
over the long term in the belief that Omron’s long-term
efforts will lead to increased corporate value. From my
perspective, as an outside corporate auditor with four
years’ standing, I am confident that the Company will
continue to follow the correct direction and path.
individuals whose principal role is to carry out a supervi-
sory function. These directors take no part in the execu-
tion of business. In addition, I am impressed by the role
played by corporate auditors, whose primary function is
to provide a system of checks and balances and super-
vise the activities of directors. This attitude toward
consistently identifying the risks of failing to take appro-
priate action as well as those risks associated with taking
inappropriate action, combined with unwavering efforts
to enhance corporate value, are collectively the driving
force behind the Company as a going concern.
—— What do you believe is Omron’s strength?
Together with the technological capabilities and its sophis-
tication, Omron’s strength lies in the integrity of its corpo-
rate culture that emphasizes the creation of products that
consistently satisfy customers. This comes from an
awareness of Omron’s significance within society by each
and every employee together with management. While
I am equally sure that the Company can continue to
improve in a variety of areas, Omron is well served by its
unflagging efforts to minimize problems, issues, and risks
as well as garner the trust of users and client customers.
—— What do you feel is required for Omron to
enhance its corporate value?
In its most basic form, corporate governance entails risk
management. Accordingly, aggressively addressing risks
is vital to enhancing corporate value. Omron is already a
company with over half of its revenues generated over-
seas. An important key to securing further growth is
therefore the Company’s ability to rebuild its global risk
management structure and to then accelerate globaliza-
tion. As a part of efforts to fulfill its obligations toward the
supply of essential products and services, Omron must
also work resolutely to rebuild its supply chain and imple-
ment a robust business continuity plan (BCP).
—— You are well versed in a number of fields,
including corporate governance and internal
control systems. How do you plan to utilize
these skills and knowledge with respect to the
Omron Group’s management?
More than just lip service, I believe my primary role is to
put forward specific recommendations that help formu-
late Omron’s management strategies going forward. This
includes bringing to the table an outside perspective on
70
Omron Corporation
Integrated Report 2012
71
Special
Feature
Resolving Environmental Issues
New Vision Contributing to
the Global Environment
05
Recognizing environmental preservation as a management priority, Omron revised its environmental
management vision, “Green Omron 2020,” in 2011. Based on this new vision, the Company will
promote two key measures: reducing the environmental impact of its business activities and
increasing the environmental contributions of its products and services.
Green Omron 2020
Omron established the Group’s Environmental Policy in
1996 and its environmental management vision, "Green
Omron 21," in 2002. Based on this policy and vision,
Omron has promoted environmental management prac-
tices centered on lessening the impact of its business
activities on the environment. Efforts were concentrated
on reducing total CO2 emissions and the amount of waste
associated with business activities in Japan.
The Omron Group formulated its new environmental
management vision, “Green Omron 2020,” in September
2011. In addition to continuing with efforts to reduce the
environmental impact of its internal business activities,
the vision highlights efforts to resolve global environmental
issues by creating and supplying products and services
that reduce environmental impact.
Under this vision, we aim to contribute to the develop-
ment of a sustainable society by maximizing the effec-
tiveness of management resources. Meanwhile, rather
than merely focusing on the environmental impact associ-
ated with increased business activities, we will also con-
centrate on reducing environmental impact by generating
more products and services that contribute to the global
environment. Having expressed these thoughts in our
Environmental Policy, we have established environmental
targets and for Action Guidelines to realize the objectives
of Green Omron 2020.
Maximizing effective use of
management resources
(Improvement of energy/resource productivity)
Offering products/services
beneficial to society
(Expansion of business that
contributes to the global environment)
Reducing
environmental
loads of
business activities
Less
Expanding
contribution
to improving
the environment
through
products/services
More
Omron Group Environmental Policy
Based on the Omron Group Corporate Motto and the Omron Principles, we will contribute to the
reduction of global environmental loads by maximizing the effective use of management resources,
such as human resources, materials, money, and energy, and providing useful products and services
for society.
1. Considering the environmental impact of the Omron Group's business activities, products, and services, we will
establish the Environmental Management System globally and ensure continual improvements.
2. We will comply with the legal and other requirements to which we subscribe concerning environmental aspects, and
we will take actions for environmental conservation and the prevention of pollution.
3. Under the Environmental Policy, we will establish and implement objectives, targets, and programs, and through their
periodic evaluations we will strive to improve, maintain, and review our activities.
4. To accomplish the objectives of the Environmental Policy smoothly and efficiently, we will communicate it to all em-
ployees by providing environmental education and activities as well as subcontractors engaged in activities with the
Omron Group.
5. We will disclose the Environmental Policy and the status of our environmental activities to the public in an appropriate
manner as necessary.
Environmental Targets
The Omron Group’s Environmental Targets for Fiscal 2020
1. Improve carbon productivity*1 (targeting global sales/CO2 emissions from global production sites) by 30% compared
with the fiscal 2010 level on a global basis
*1 Carbon productivity: Sales per ton of CO2 emitted
2. Environmental contribution*2 > CO2 emissions from global production sites
*2 Environmental contribution: Reduction in CO2 emissions resulting from the use of Omron’s energy-saving or energy-creating products
Action Guidelines
Strive to minimize the input of energy/re-
sources for business activities while promot-
ing recycling/reuse and reduction to mini-
mize waste.
Offer customers environmentally warranted
products that help reduce negative environ-
mental impact throughout their life cycles.
Eco-Factories/Office/
Laboratories
Eco-Products
Assess environmental impact of the entire
supply chain, ranging from the procurement
of raw materials to production, sales, and
distribution, and strive to reduce its negative
impact on the environment.
Eco-Logistics
Expand acquisition of ISO 14001 certification
and establish a multi-site ISO registration
system while reducing environmental risk
and ensuring legal/regulatory compliance.
Eco-Management
Promote environmental education and
awareness-raising activities to encourage all
employees to heighten their ecological
awareness and upgrade the level of environ-
mental preservation activities they are in-
volved with.
Eco-Mind
Proactively release information on
Omron’s environmental activities and
results and promote social and community
contributions.
Eco-Communication
72
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Integrated Report 2012
73
Environmental Impact Reduction: Exceeding Targets for Cutting Peak Power Use through Smart Power Savings
Facing increasingly tight electricity supply-demand condi-
tions, Omron conducted Smart Power Savings activities
between July and September 2011.
Smart Power Savings is Omron’s name for the energy-
saving activities the Company is pursuing. By introducing
the Power Savings Monitoring System at our locations in
Japan, we were able to substantially reduce electric
power consumption without making sacrifices on the
operational and production fronts. We implemented a
host of energy-saving measures, such as improving facili-
ties and manufacturing equipment to minimize energy
requirements through eco-manufacturing, and reduced
usage of air conditioners. As a result, we succeeded in
cutting our peak power consumption in all areas beyond
our target levels.
Target and Actual Peak Power Cuts
through Smart Power Savings
Area
Target
Actual
Tokyo Electric Power
Company Incorporated’s
service area (Kanto region)
15% (In response to government
request)
Kansai Electric Power
Co., Inc.’s service area
15% (In response to request from
Kansai Electric)
Chubu Electric Power
Co., Inc.’s service area
Chugoku Electric Power
Co., Inc.’s service area
Kyushu Electric Power
Co., Inc.’s service area
10% (Voluntary target)
10% (Voluntary target)
10% (Voluntary target)
31%
22%
14%
12%
16%
using the Power Savings Monitoring System to
Control Maximum Power Demand
In July 2011, we segmented our 21 domestic business
locations according to electric power company service
area and introduced the Power Savings Monitoring Sys-
tem at each site, making total power use for each area
“visible” in real time. When a site approached the preset
limit for power use, an alarm sounded, alerting the facility
manager to the need for measures to cut peak power
use. In the past, we had used this system for managing
individual sites. By expanding the system to monitor peak
power at several sites, we were able to efficiently man-
age maximum power demand by area without suffering
productivity losses in individual locations.
Employing sensing and control technologies that Omron
has cultivated, the Power Savings Monitoring System
constitutes an environmental business solution. In addition
to using the system ourselves as a summer power-savings
measure, we have provided it to many of our customers,
who have also confirmed its effectiveness in reducing
power consumption.
Area total
Exceeding target
at one site
Achieved target
for all areas
Eco-Manufacturing
“Eco-manufacturing” is Omron’s word for streamlining
the use of energy and resources employed in manufac-
turing as much as possible by improving the operation of
manufacturing equipment and ancillary facilities. Produc-
tion requires a great deal of energy, and the key to eco-
manufacturing lies in economically supplying the amount
of pressure, lighting, and cooling that is needed for pro-
duction precisely when needed. We render these require-
ments visible and strive to save energy by determining
these needs in real time.
On a production line, for example, rather than simply
replace an existing machine with another that is more ener-
gy-efficient—an approach that may be costly—we time-
shift equipment use and switch off power while machines
are in wait mode as well as improve air conditioner and
compressor operation. These approaches have reduced
power consumption by as much as 30% at some facilities.
Energy-Saving Initiatives at the Yasu Office
At Omron’s Yasu Office, the manufacture of semiconduc-
tors, MEMS, and connectors requires a great deal of
energy. Located in the power service area, this plant
accounts for approximately 70% of the power used by all
05 Resolving Environmental Issues
In fiscal 2011, we focused in particular on initiatives to
improve peak power consumption at the Yasu Office by
concentrating on utility services. We will also review tem-
perature and humidity settings at our production facilities,
on the condition that revisions do not affect product qual-
ity. As a result, we expect to save even more energy.
Yasu Office
(City of Yasu, Shiga Prefecture)
The center for our advanced technologies in the
microelectronics business, this facility uses ultrafine
processing technologies to manufacture MEMS,
semiconductors, and connectors. Also, the office
serves as the sales and marketing site for our IAB.
As well as efforts to save energy, at this office we
have introduced equipment to reduce greenhouse gas
emissions and improved wastewater processing
equipment, and employees participate in maintaining
and managing a biotope on site. Through environmental
preservation activities such as these, we take the
region’s natural environment and resources into
account as we work to turn this facility into an
environmentally conscious model factory.
of Omron’s facilities in Japan. Measures to slash power
requirements at the Yasu Office therefore had a major
impact on reducing peak power use throughout the Kan-
sai Electric Power service area.
In June 2011, Yasu Office managers gathered together
and set the goal of reducing peak power use between
July and September 2011 by 9.9% compared with 2010
levels and drawing up measures to reach this objective.
During this process, we realized that such electricity,
water, ventilation, and compressed air used by equipment
at the plant and supplied by utilities accounted for 56% of
peak electricity. We also recognized that around 70% of
utility-related peak electricity went toward refrigeration
systems—turbo freezers, chilled water pumps, cooling
water pumps, and cooling towers—and was used to cool
production equipment.
To cut peak power used by these cooling systems, we
ran simulations and conducted repeated tests with actual
equipment, allowing us to adjust coolant water pump
pressure and optimize flow rates.
In addition to energy-saving measures targeting these
cooling systems, we sprayed water on the roof of the
office wing, reduced lighting, consolidated office areas,
Turbo freezer
and lowered the volume of air delivered by air-condition-
ing systems. Through relatively simple measures such as
these, we succeeded in reducing electricity consumption
from July to September 2011 by 13.3% year on year. In
addition to reducing electricity bills during the period,
these efforts will be instrumental in making power-saving
improvements in future years.
74
Omron Corporation
Integrated Report 2012
75
05 Resolving Environmental Issues
total of 554 units (as of December 2009). Having a total
generation output of 2,129kW, this project is one of the
world’s largest multiunit systems.
The project is attracting significant amounts of attention
from many quarters, taking Pal Town Josai-no-Mori as the
model for an environmental city with low CO2 emissions.
The AICOT® mark’s design is meant to convey a sense of
tenderness toward the environment and people. The large circle
denotes the sun, while the three smaller orbs indicate houses.
* Anti-Islanding COntrol Technology (AICOT®) is a registered trademark of Omron
Corporation (registration number 5205429).
Increasing Environmental Contributions: “AICOT®”—Boosting the Popularity of Solar Power Generation Systems
Trouble Resulting from the Concentration of
Solar Power Generation Facilities
Solar power generation systems are the focus of rapidly
growing attention as a measure for countering the in-
creasingly serious issue of global warming by converting
solar energy, rather than fossil fuels, into electricity. One
problem with installing solar power generation systems
on adjacent roofs, as has been done in the past, is that
this results in multiunit systems—multiple solar power
generation systems connected to electric wires as they
would be for an electric power utility. This complexity can
be the source of system trouble, creating a barrier to the
proliferation of solar power generation systems. We have
addressed this issue by taking the industry lead in devel-
oping AICOT®, an acronym for “Anti-Islanding COntrol
Technology.”
Solar power generation systems configured with Omron
power conditioners* employing AICOT® allow the concen-
tration of solar power generation systems within a certain
area. We believe this technology will contribute signifi-
cantly to the popularization and promotion of solar power
generation systems.
Omron began marketing AICOT®-equipped power con-
ditioners in July 2011. Since that time, sales have grown
steadily as customers have recognized the
advantages the technology provides in alleviating the
problems associated with multiunit systems.
By leveraging the advantages of this technology, Omron
looks forward to encouraging the proliferation of solar
power generation systems. To do so, we will concentrate
on developing AICOT® along with other technologies and
products.
* Power conditioner: A device that converts the direct current supplied by solar panels
to the alternating current used in homes. The higher the power conditioner’s
conversion ratio, the more power it supplies for home use.
Removing the Need for Safety Verification on
Power Generation Systems
Solar power generation systems may continue to gener-
ate electricity even in the event that electricity supplied by
power companies is interrupted due to outages or electri-
cal accidents. This situation, known as “islanding,” can
shock people involved in reconstruction activities, start
equipment fires when electrical service resumes, and
create a host of other problems. To address this situation,
solar power generation systems can be equipped with
anti-islanding functions. For multiunit systems, however,
interference between generation systems can prevent
anti-islanding functions from working properly.
To prevent this situation from occurring, we conduct
interference tests using multiunit systems with individual
meters attached to power conditioner assemblies, con-
firming that no trouble arises and confirming their safety.
As this testing can require one to two months, however,
in the past we faced the risk that such testing could
affect delivery times. Using AICOT®-equipped power
conditioners obviates the need for interference testing on
multiunit systems, eliminating potential problems on
delivery schedules.
Power
cable
Solar battery module
Solar battery module
Power
Power
conditioner
conditioner
Distribution
Distribution
panel
panel
Electric power meter
Electric power meter
Electrical equipment
Electrical equipment
Contributing Significantly to the Popularization
of Solar Power Generation Systems
Another major roadblock exists along the path to the
proliferation of solar power generation systems. For safe-
ty reasons, rules are in place that limit solar power gen-
eration system installation to around 10% of sites to each
area. However, power conditioners equipped with AICOT®
are not subject to this regulation, so they could theoreti-
cally be used to install solar power generation systems on
all roofs.
As a result, Omron is making a major contribution to the
popularization of solar power generation systems, which
use environment-friendly renewable energy.
Accumulated R&D Expertise in Electrical
Equipment Results in AICOT®
Since 2003, Omron has been working with Kandenko Co.,
Ltd., and other organizations in Ota, Gunma Prefecture,
on the Demonstrative Project on Grid-Interconnection of
Clustered Photovoltaic Power Generation Systems, which
was commissioned by the New Energy and Industrial
Technology Development Organization (NEDO). This proj-
Power conditioner with AICOT®
Color display unit makes checking power generation volume enjoyable
ect is part of an R&D effort concentrating on islanding
detection technology during the deployment of multiple
solar power generation systems.
When research began, the industry believed the viability
of this sort of technological development to be low, and
the research was considered difficult. As a result, no
company other than Omron was interested in taking part.
However, we were able to take advantage of the product
development that we had conducted on protective relays
and other electrical equipment. Following six years of
technological development, in 2008 we took the industry
lead by successfully developing AICOT® anti-islanding
technology, which is effective even when solar power
generation systems are concentrated at housing com-
plexes or in high-density residential areas.
At Pal Town Josai-no-Mori, in the City of Ota, Gumma
Prefecture, we are collaborating with inhabitants on the
Demonstrative Project on Grid-Interconnection of
Clustered Photovoltaic Power Generation Systems,
using AICOT® anti-islanding technology for multiunit sys-
tems. AICOT®-equipped power conditioners are used on a
Pal Town Josai-no-Mori
76
Omron Corporation
Integrated Report 2012
77
Special
Feature
Resolving Health Issues
Contributing to the Health of People
throughout the World
06
The desire to be healthy is shared by people throughout the world. With the aim of contributing to
the health of people throughout the world, Omron develops and markets products that contribute
to health maintenance and improvement and detect illness quickly and easily. We also undertake a
host of activities to prevent illness and promote health, both inside and outside the Company.
Contributing to the Health of People in India
Rapid Increase in Number of People with
Lifestyle Diseases a Social Issue
In recent years, Indian lifestyles have come to resemble
those of people in Europe and the United States, and the
number of people suffering from lifestyle diseases has
surged accordingly. Some 130 million people are said
to suffer from hypertension, 100 million from obesity,
and 50 million from diabetes.* Alleviating or preventing
such lifestyle diseases has thus evolved into a major
social issue.
*According to a survey by Global Information, Inc.
To improve this situation in India, we are pursuing
activities centered on Omron Healthcare India (OHS-IN),
combining our experience and lineup of healthcare and
medical instruments with our expertise in health manage-
ment and alleviating illness. Omron first established a
representative office in India in 1997. In 2011, we stepped
Building that houses Omron Healthcare India (OHS-IN)
up marketing efforts involving digital blood pressure moni-
tors. To expand our business activities further, in Novem-
ber we established the marketing company OHS-IN in
Gurgaon, located near Delhi, in the state of Haryana.
Encouraging the Proliferation of Health and
Medical Care Instruments and Contributing to
the Community
Alleviating lifestyle diseases requires first determining a
patient’s condition, followed by the improvement of life-
style habits. At the moment, however, in India only about
0.5% (as of 2010) of people with high blood pressure had
digital blood pressure monitors. Low diffusion levels are
also the norm for electronic thermometers, body compo-
sition monitors, blood glucose monitors, pedometers, and
other healthcare and medical instruments. In many cases,
patients do not have the knowledge needed to use these
healthcare and medical instruments, but another major
issue is that many patients do not recognize the impor-
tance of health management. This situation has been
changing in recent years as more people are becoming
aware of and interested in health, and the percentage of
people engaging in fitness activities is on the rise.
OHS-IN is working to encourage this trend toward
health by augmenting the number of shops that handle
Omron products to enable more households to gain
access to our products. Also, we are producing Hindi-
language documentation and developing products to
match the needs of Indian people. In this way, OHS-IN is
reinforcing sales and promotional activities related to
healthcare and medical instruments. The company is also
contributing to the local community in a number of ways.
For example, we have begun holding free health-check
events to determine blood pressure and other factors,
thereby encouraging an understanding of how to prevent
or alleviate lifestyle diseases.
Activities Targeting a Greater Number of People
Amid intense competition from other companies, OHS-IN
is making steady inroads in the Indian market. In fiscal
2011, the company expanded its sales network to 12,500
shops. Furthermore, Omron-brand digital blood pressure
monitors hold the top share of the Indian market, at 60%,
which reflects the fact that physicians around the world
recognize the quality and reliability of our products. Against
this backdrop, we are steadily cultivating local staff who
understand the importance of the healthcare business.
We aim to popularize digital blood pressure monitors in
small and medium-sized Indian cities with populations of
less than one million. By leveraging the local expertise and
personnel we are cultivating in India, we aim to popularize
healthcare and medical instruments and encourage health-
promotion activities in other emerging markets as well.
Free Health-Check Events
In fiscal 2011, we held 376 free health-check events in
cities with populations of one million or more. Conducted
at such locations as pharmacies, these events gave at-
tendees a chance to check their blood pressure, weight,
and temperature.
Owing to extremely high interest in measuring physical
health parameters, each of these free health-check events
attracts more than 100 people. At these events, we share
test results with participants and give them blood pres-
sure diaries and health handbooks, which explain test
results in careful detail.
A long queue for a free health check
Contributing to the Health of People in India
Exercise is important to maintaining or improving health.
To encourage exercise, Omron sponsors three India’s
most prominent distance-running events: the Mumbai
Marathon, the Delhi Half Marathon, and the Bangalore
10km Marathon, supporting the health of many competi-
tors in the process.
Company booths at each of these marathons introduce
our healthcare and medical instruments, including digital
blood pressure monitors, accompanied by a free health-
check event. Participants can visit our booth to check their
fitness before the race.
Mumbai Marathon
78
Omron Corporation
Integrated Report 2012
79
Dream.Do. Campaign
In January 2012, we launched the “Dream.Do. Campaign”
to advance Omron’s dream of contributing to Indian soci-
ety by resolving health issues. The thrust of the cam-
paign, which features
popular actor Farhan
Akhtar as a brand ambas-
sador, is to emphasize
what a single person can
accomplish if they push
ahead toward their
dreams. Using newspa-
per and mass media
advertising, this cam-
paign is designed to
promote the image of
Omron as a progressive
and approachable brand
as well as raise the
awareness of health
management among
Indian people.
Corporate Dream.Do. Campaign
advertisement featuring Farhan Akhtar
Supporting Pharmacies
Privately managed pharmacies are a major channel for
acquainting Indian consumers with Omron’s healthcare
and medical instruments. Therefore, we conduct semi-
nars to demonstrate to heads of pharmacies how to use
our instruments, augment their understanding, and dis-
seminate knowledge on the appropriate role of instru-
ments in health management.
At the same time, to increase the understanding of
healthcare and medical instruments among consumers
Seminar for the heads of pharmacies held in cooperation with a local
pharmacy association
who are unfamiliar with them, we erect billboards adver-
tising Omron products along the street and at the front of
pharmacies.
Mother’s Day campaign notice at curbside
Providing Support for Large-Scale
Clinical Research in India
In fiscal 2011, we collaborated with the Indian Society of
Hypertension to support a large-scale clinical study involv-
ing leading doctors from Japan, Canada, and India entitled
“the Relationship between Indian Food Culture and Hy-
pertension”. As one of the society’s official sponsors, we
provided medical personnel with digital blood pressure
monitors and other measurement equipment used in the
clinical study.
At Annamalai University, one site of the large-scale
clinical study, OHS-IN donated 100 digital blood pressure
monitors and 100 electronic thermometers for student
use, thereby supporting university research.
Presentation ceremony for donating healthcare and medical instruments
to Annamalai University
06 Resolving Health Issues
Supporting Employee Energy and Health
Commencement of the “GENKI Project”
Recognizing that healthy bodies and ensuring occupa-
tional health and safety are essential if employees are to
fully utilize their skills, Omron has been a leader in various
business activities centered on health and safety. We
have had illness prevention measures targeting lifestyle
and other diseases in place for some time as well as
measures to address mental health. In fiscal 2011, we
augmented these programs by launching the GENKI
Project (genki means “healthy” in Japanese). The project
is aimed at fostering in which employees who are healthy,
full of energy, dynamic, and possess a sense of commu-
nity. During the first year of the project, we conducted
“Om-Walk” and “Kyoto Marathon Participant Support”
activities.
The Om-Walk Walking Event in Japan
The slogan for our Om-Walk event emphasizes being
healthy and competing in calorie-burning activities. Using
our products and services—activity monitors and Well-
nessLink,* our health portal site—teams competed for
the highest overall activity level.
Exercise Effectively
Easy to Record Data
USB
communication
Just by having the pedometer in
your pocket, you can count your
steps each day.
Launch the software and place the
pedometer in the communication tray to
upload your data easily.
Enjoy continuing to exercise
E n j o y
e x e r c i s i n g
o n y o u r o w n
A host of functions with various types
of data that everyone can enjoy
E n j o y
e x e r c i s i n g
t o g e t h e r
Compete with your friends by creating
walking records
・Various rankings
・Group events
・Record calendar
・Graphical display
・Group events
・Data navigation
・Health information
service
The Om-Walk Program
The fiscal 2011 Om-Walk was voluntary; however, 91%
of our employees participated, including temporary work-
ers. (Participants numbered 13,554, composing 807
teams). We used “WellnessLink” to show how competing
teams fared, allowing participants to check their walking
status at a glance via the website and heightening the
sense of participation.
Om-Walk award ceremony
Participants made such comments as “This event in-
creased my awareness of walking and exercise,” “When
commuting to work, I decided to get off my train or bus
one stop earlier and walk the rest of the way,” and “This
was a great conversation topic at work; it helped to im-
prove communications.”
*WellnessLink
This free-of-charge health management service
employs information technology to offer personal
advice based on health data determined by using
Omron healthcare devices on a daily basis. We
offer a service targeting individuals as well as
services for companies and other organizations.
We are increasing the number of devices
designed to communicate with WellnessLink and
simplifying the process of transmitting measured
data. As of July 31, 2012, WellnessLink members
numbered approximately 250,000.
Please refer to the following website for details.
http://www.wellnesslink.jp/
80
Omron Corporation
Integrated Report 2012
81
Creating Value for Employees
Creating Value for Customers
Respect for Individuality and Diversity
Respecting Individuality and Diversity and Fostering Employees Who Are Effective in a
Global Context
Omron has made “respect for individuality and diversity” one of its Management Commitments. We do not
discriminate on the basis of nationality, gender, or ability, and we welcome individuals who have diverse
values and skills. We recognize such attributes encourage corporate and personal growth, and we aim to be
a company that encourages people to grow.
the International Labour Organization (ILO) as well as kudos
from the Indonesian government.
Increasing Opportunities to Empower Women
In order to improve motivation among women, we will work to
increase the number of opportunities for women to contribute
to the workplace and encourage a balance between work and
family life. We are thus promoting devotion to these initiatives
in top management, in the workplace, and among the women
themselves.
In October 2008, Omron launched a project to study ways to
increase the empowerment of female staff. In fiscal 2011, we
held study sessions, lecture presentations, and other events to
brainstorm ideas on expanding women’s networks on a variety
of fronts.
Since fiscal 2001, we have conducted Female Leader Training
to promote women to positions of responsibility. As of fiscal
2011, 124 women have taken advantage of this program. As a
result of these initiatives, the
number of women in core
management positions—de-
fined as positions of respon-
sibility or specialist or higher
positions—has increased
steadily. As of April 2011,
throughout the Omron Group
21 women were in manager
positions and 260 in assis-
tant manager positions.
Female training program
Direct Dialogue with the President
Omron has a practice of encouraging dialogue between employ-
ees and the president called “The KURUMAZA”, which began as
a result of the president’s desire to foster a deeper mutual under-
standing with workplace personnel. This program enables the
president to understand the issues employees face in their daily
work by hearing their problems and issues directly. The program
also gives employees the chance to hear firsthand the presi-
dent’s thoughts and assists in cultivating an atmosphere of mu-
tual understanding. We plan to introduce this program globally.
Cultivating Global Human Resources
To achieve the goal expressed in our new long-term strategy,
Value Generation 2020 (VG2020), of creating a workforce and
organizations to support the global growth of our business, in
fiscal 2012 we will introduce “Team Omron Global Training Pro-
gram (TOP)”—a human resources training system. Focused on
workplace practices, the Camp seeks to nurture staff with vision
who are ready for action. The program begins by determining
employees’ current skills and subsequently shows them the
next steps toward growth while continuing to challenge them.
In the current fiscal year, we have updated “The Boot Camp,”
our training program for newly appointed managers, to strength-
en worksite management. In tandem with the global develop-
ment of our business, we have begun training to assist employ-
ees in quickly boosting their English proficiency and gaining a
necessary understanding of other cultures.
Promoting the Employment of People with
Disabilities on a Global Basis
Omron’s corporate philosophy emphasizes respect for diversity,
and one aspect of this tenet is to increase the number of em-
ployment opportunities for people with disabilities. We continue
to rank at the top of the
manufacturing industry for
our employment of people
with disabilities, which as
of June 2011 amounted to
2.24% of our workforce in
Japan, including 24 Group
companies. In Indonesia,
meanwhile, although the
law stipulates that people
with disabilities must ac-
count for at least 1% of the workforce, few companies comply.
However, in 2010, PT OMRON Manufacturing of INDONESIA
(OMI) created and is implementing a program to provide training
and employment as a package to people with disabilities. This
program has proved successful. OMI has raised its percentage
of people with disabilities to 2% of its workforce, and word of
the program has spread to
other companies in Indone-
sia. Five companies have
now introduced a similar
type of program to OMI.
These efforts have earned
OMI the Best Practice
Award for employing peo-
ple with disabilities from
Omron Kyoto Taiyo
Receiving the Best Practice Award
from the ILO
Maximizing Customer Satisfaction
Aiming to Provide Products and Services That Are Safe and Instill Confidence
We strive to satisfy customers by enhancing the quality of the products and services we offer. By recognizing
business activities leading to the safety of our products, services, and customers as a management priority,
we pursue initiatives to provide products and services that function safely and that customers can use with
confidence.
Quality Assurance
Quality Management
Omron has set forth a Groupwide quality policy while preparing
quality manuals for each business division and Group company
to establish a solid quality assurance system.
As of March 31, 2012, three business companies, 16 Group
companies in Japan, and 24 Group companies overseas had
acquired certification under the ISO 9001 international standard
for their quality management systems. This has led to the estab-
lishment and full-scale implementation of a “plan, do, check,
act” (PDCA) cycle at each organization. The PDCA cycle is in-
tended to first formulate an improvement plan, implement it,
evaluate the degree of achievement, and reflect the evaluation
results by making subsequent improvements. The strict imple-
mentation of an individual PDCA cycle helps ensure safety and
quality of products, the continued improvement of quality, and
the prevention of quality-related problems.
Quick Detection and Prevention of Serious Claims
We manage information on customer inquiries and complaints
regarding defects so we quickly become aware of any major
quality issues that might affect customer safety as well as prevent
such quality issues from recurring. We have established Product
Quality Risk Management Regulations for communicating infor-
mation about any major product quality issues immediately and
accurately to top management.
We respond promptly to customer inquiries and have in place
links between the quality departments at headquarters and
those of business companies and business divisions. This ar-
rangement enables us to respond quickly to complaints and
prevent their recurrence.
The long-term management strategy that began in fiscal 2011
raises the goal for the customer service division of converting
each person who makes an inquiry at the Customer Service
Center into an Omron fan. In fiscal 2012, we changed our operat-
ing structure, shifting from a rank-specific organization to one
that is function based. We are restructuring the center to im-
prove quality and efficiency by creating a call center that is easy
to reach.
Reflecting Customer Feedback in
Product Development
Aiming to provide society with products that are easy for anyone
to use, Omron Healthcare conducts universal design evaluations
at every stage of product development to confirm “universal
quality.” As one example of this process, when configuring the
screens and verification-testing of the service content of the
MedicalLink home blood pressure management service employ-
ing information technology, the company asked private medical
practitioners to evaluate the service. The frank opinions the
company received from healthcare professionals led Omron
Healthcare to introduce improvements.
In the past, usability evaluations and Group interviews were
conducted in a research format that centered on product param-
eters. We have altered this approach and are accelerating our
rollout of lifestyle evaluations (ethnography studies) designed to
uncover potential needs. This method enables us to better un-
derstand overseas needs, particularly in emerging markets,
against substantially different cultural backdrops. Determining
potential needs by taking lifestyles into account is instrumental
in developing “glocal”* product plans. We will remain closely
attuned to customers’ input and needs by using this information
to forecast future needs and gain a head start in the develop-
ment of worldwide product plans.
Customer Service
* A word combining “global” and “local”
Industry-Leading Customer Service and Support
In fiscal 2006, IAB established the Global Service Center. With
the aim of increasing and standardizing service quality, the
center conducts customer satisfaction surveys at the site level
throughout the world (approximately 300 sites in 80 countries or
regions), among other activities.
In B to B Site Ranking, a study of web support in Japan by
Japan Brand Strategy, Inc., Omron has ranked first in customer
service for six consecutive fiscal years, through fiscal 2012.
Omron Healthcare Co., Ltd., has set up a Customer Service
Center, which handles customer queries, parts sales, and repairs
in an integrated manner.
MedicalLink screen
82
Omron Corporation
Integrated Report 2012
83
Creating Value for Shareholders
and Investors
Creating Value for Local
Communities
Relationship Building with Shareholders
IR Activities Focusing on Dialogue
Awareness and Practice of Corporate Citizenship
Contributing to the Development of Local Communities as a Member of International Society
With its investor relations (IR) policy emphasizing interactive communication with current and potential
investors, Omron provides timely and accurate information on the Company's business conditions and
management policies. Omron also aims to reflect investors' comments in its management strategies to
the fullest extent possible to maximize corporate value.
Aiming to be a valued corporate citizen, Omron strives for harmonious coexistence with local communities.
As such, Omron complies with all applicable laws and rules and respects local culture and customs. We also
communicate proactively with local residents and organizations to build relations of mutual understanding.
president made to personally meet investors throughout the world,
presentations of business results and financial standing, telecon-
ferences, and participation in investor relations conferences.
In Japan, we hold tours of our plant in Kusatsu, Shiga Prefec-
ture, for institutional investors and analysts. Overseas, we con-
duct tours of our plants in Shanghai and Guangzhou, in China.
Moreover, we hold well-received technology briefings, centering
on our blood pressure monitor and relay technologies.
Input and feedback obtained through dialogue are relayed via
the investor relations department to the president and the man-
agement team and are used to help create various manage ment
strategies.
Proactive Information Disclosure
We employ an IR site and various other tools to support interac-
tive communications with shareholders and investors by disclos-
ing information on product development and sales activities
tailored to specific markets as well as information on operating
performance. Our IR site features a message from the presi-
dent, explanations of our strategies and operating performance,
and video footage.
Inclusion in SRI Indexes
Omron’s CSR activities have earned high praise from around the
world, and the Company’s shares are included in two major
socially responsible investment (SRI) indexes: the Morningstar
Socially Responsible Investment Index and the Asia Pacific (AP)
version of the Dow Jones Sustainability Index (DJSI).
As of July 25, 2012
Creating More Open and
Interactive Shareholders’ Meetings
In an effort to make its shareholders’ meeting more open and
easier for shareholders to attend, Omron schedules meetings to
avoid days on which the shareholders’ meetings of other large
companies are concentrated. Omron uses a conveniently located
hotel at the JR Kyoto station as a venue for these meetings.
Also, Omron has set up systems that allow shareholders to
exercise their voting rights by post as well as an electronic voting
system that enables exercise via personal computer or mobile
device. Since 2006, Omron has offered access to the Electronic
Voting Platform, creating an environment whereby institutional
investors in Japan and overseas can quickly provide documents
for the general meeting and smoothly
exercise their voting rights.
After the close of the general meet-
ing, a separate presentation to explain
management conditions is held as well
as a shareholder roundtable confer-
ence. These events provide the oppor-
tunity to offer shareholders further
information on Omron’s initiatives that
could not be communicated during the
general meeting.
The 75th annual general shareholders’ meeting, held on June
21, 2012, was attended by 796 shareholders, 134 more than in
the preceding fiscal year. This figure represented 84.3% of
voting rights.
Aiming to Strengthen Two-Way Communications
To enhance communications with individual investors, Omron
conducts corporate presentations and participates in investor
fairs. In fiscal 2011, Omron participated in 24 investor relations
(IR) events, communicating with some 2,500 investors.
For institutional investors, Omron provided about 970 communi-
cation opportunities in fiscal 2011. These included trips that the
Supporting Reconstruction following the
Great East Japan Earthquake
Providing Support through Business Activities
To provide support for the people affected by the Great East
Japan Earthquake and assist in rebuilding the stricken region,
we donated a portion of the proceeds from sales of our KM
Series* of electricity monitors, which are used in energy-saving
activities at manufacturing plants. Through this effort, we raised
¥18,723,000 for the Japanese Red Cross Society.
During the 11 months from May 2011 through March 2012, we
worked with stores that market IAB products, concentrating on
sales of the KM Series. Numerous sales outlets and customers
joined in this effort, recognizing the importance of the KM Series
in saving energy at manufacturing plants and supporting recon-
struction. Their cooperation was instrumental.
* KM Series: A lineup of electricity monitors used to simply and reliably measure and
analyze electricity use.
Sponsoring the Kyoto Marathon
The first Kyoto Marathon was held on March 11, 2012, to support
reconstruction efforts following the Great East Japan Earthquake.
Omron participated as a special sponsor in the event, and numer-
ous employees, colleagues, and family members volunteered
their support on the day of the marathon, cheering on partici-
pants or participating in the race themselves.
The Omron Group in Japan also sponsored an Om-Walk event
(for details, see page 81) during the 11 days leading up to the
marathon and provided matching donations. We donated
¥3,118,000 to correspond with participants’ total activity level,
providing these funds to the Japanese Red Cross Society via the
Kyoto Shimbun Welfare Work Team and crisis management
headquarters in the stricken region.
Lecturing at Ofunato High School
On September 21, 2011, we conducted a lecture at Ofunato High
School, in Iwate Prefecture. Titled “The Connection between
Omron’s Technologies and Society,” the talk coincided with the
school’s “Daylong General University” event. By offering stu-
dents a chance to learn from a broad spectrum of people in the
working world, the event encouraged high school students to
think about developing their own careers and gave them a point
of reference as they considered their paths for the future.
A post-event questionnaire revealed a number of forward-
thinking comments, such as “I want to remain aware of my
relationship with society as I learn” and “I want to become an
engineer who looks at society from various perspectives and
meets its needs.”
We also received a posi-
tive note from one of the
high school instructors: “I
aim to help young people,
whose future is unfolding
before them, find their path
to the future.”
Assisting Reconstruction following
Major Flooding in Thailand
Through Japan Platform, the Omron Group donated ¥5 million to
victims of the major flooding that occurred in Thailand in October
2011.
After restoring its own plant, Omron Automotive Electronics
Co., Ltd., located in Ayutthaya Province, set about helping to
address the many scars left by the flooding, participating in such
volunteer activities as repairing and painting the damaged
schoolhouse of Wat Kan Ham Elementary School. The company
and employee volunteers also made contributions and provided
school supplies.
The volunteer activities
served another purpose:
through association with
members of another
Omron company in Bang-
kok, volunteers strength-
ened the ties within Team
Omron.
84
Omron Corporation
Integrated Report 2012
85
Omron: Advancing Sensing and Control Technology
オムロンの歴史
Founding 1933
10th Year 1943
X-ray Timers
Microswitches
Electromagnetic
Relays
Utilizing sensing and control technologies,
Omron has developed countless products
that are ahead of their time and have
come to meet unrealized social needs
in various areas.
l
o
r
t
n
o
C
&
g
n
i
s
n
e
S
:
y
g
o
l
o
n
h
c
e
T
e
r
o
C
20th Year 1953
Pressure Switches
Contactless Switches
Coin-Operated
Timers
Proximity
Switches
30th Year 1963
Miniature Power
Relays
Photoelectric
Switches
Automatic Ticket Gates
Automatic Food Ticket
Vending Machines
Automated Teller
Machines (ATMs)
40th Year 1973
Sequence
Controllers
Digital Blood Pressure
Monitors
Calculators
Electronic Temperature
Controllers
Electronic
Registers
Servomotors
Solid-State Relays
50th Year 1983
PCB Solder Inspection
Equipment
Radio Frequency Smart
Entry Systems
Digital Thermometers
Electric Power
Steering Controllers
Travel Time
Measurement
Systems
LCD Backlights
60th Year 1993
Switch Mode Power
Supplies
Smart Sensors
70th Year 2003
Machine Automation
Controllers
Body Composition
Monitors
Ultra-Small Pressure
Sensors for Wrist
Blood Pressure
Monitors
FPC Connectors
Social Sensors
Smart Electricity
Volume Monitors
Industrial
Automation
Business
(IAB)
Electronic and
Mechanical
Components
Business
(EMC)
Automotive
Electronic
Components
Business
(AEC)
Social Systems,
Solutions and
Service Business
(SSB)
Healthcare
Business
(HCB)
Other
Businesses
Current Business
Divisions
86
Omron Corporation
Financial Section (U.S. GAAP)
Contents
87 Financial Highlights
88 Six-Year Summary
89 Fiscal 2011 Management’s Discussion and Analysis
94 Business and Other Risks
96 Consolidated Balance Sheets
98 Consolidated Statements of Income
99
Consolidated Statements of Comprehensive
Income (Loss)
100 Consolidated Statements of Shareholders’ Equity
101 Consolidated Statements of Cash Flows
102 Notes to Consolidated Financial Statements
129
Independent Auditors’ Report
Note: Financial Highlights, Six-Year Summary, Fiscal 2011 Management’s Discussion and Analysis, and Business and Other Risks are unaudited.
Financial Highlights
Omron Corporation and Subsidiaries
Years ended March 31, 2012, 2011 and 2010
For the year:
Net sales
Millions of yen
(except per share data)
Thousands of
U.S. dollars (Note 2)
(except per share
data)
FY2011
FY2010
FY2009
FY2011
¥619,461
¥617,825
¥524,694
$7,554,402
Income from continuing operations before income taxes and
equity in loss (earnings) of affiliates
33,547
41,693
10,195
409,110
Net income
16,352
27,016
3,621
199,415
Net income attributable to shareholders
16,389
26,782
3,518
199,866
Per share data (yen and U.S. dollars):
Net income attributable to shareholders
Basic
Diluted
¥ 74.46
¥ 121.66
¥ 15.98
$ 0.91
74.46
121.66
15.98
0.91
0.34
Cash dividends (Note 1)
28.0
30.0
17.0
Capital expenditures (cash basis)
Research and development expenses
¥ 27,502
¥ 21,647
¥ 20,792
$ 335,390
42,089
41,300
37,842
513,280
At year end:
Total assets
Total shareholders’ equity
¥537,323
¥562,790
¥532,254
$6,552,720
320,840
312,753
306,327
3,912,683
Notes: 1. Cash dividends per share represent the amounts applicable to the respective year, including dividends to be paid after the end of the year.
2. The U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate at March 31, 2012, of ¥82 = $1.
Integrated Report 2012
87
FY2011
FY2010
FY2009
FY2008
FY2007
FY2006
Market Environment
Millions of yen (except per share data)
Fiscal 2011 Management’s Discussion and Analysis
Note: The business divisions are presented using their abbreviated names: Industrial Automation Business (IAB), Electronic and Mechanical Components Business
(EMC), Automotive Electronic Components Business (AEC), Social Systems, Solutions and Service Business (SSB), and Healthcare Business (HCB).
Six-Year Summary
Omron Corporation and Subsidiaries
Years ended March 31
Net sales (Notes 3, 4):
Industrial Automation Business (IAB)
Electronic and Mechanical Components
Business (EMC)
Automotive Electronic Components
Business (AEC)
Social Systems, Solutions and Service
Business (SSB)
Healthcare Business (HCB)
Other Businesses
Elimination and Corporate
Costs and expenses:
Cost of sales
Selling, general and administrative expenses
Research and development expenses
Other expenses (income), net
Income (loss) from continuing operations
before income taxes and equity in loss
(earnings) of affiliates
Income taxes
Equity in loss (earnings) of affiliates
Income (loss) from continuing operations
Income from discontinued operations,
net of tax (Note 2)
Net income (loss)
Net income (loss) attributable to noncontrolling
interests
Net income (loss) attributable to shareholders
Per share data (yen):
Income (loss) from continuing operations
Basic
Diluted
Net income (loss) attributable to shareholders
Basic
Diluted
Cash dividends (Note 1)
Capital expenditures (cash basis)
Total assets
Total shareholders’ equity
Value indicators:
Gross profit margin (%)
Income (loss) before tax/Net sales (%)
Return on sales (%)
Return on assets (%)
Return on equity (%)
Inventory turnover (times)
Price/earnings ratio (times)
Assets turnover (times)
Debt/equity ratio (times)
Interest coverage ratio (times)
¥270,835
¥271,894
¥203,917
¥271,204
¥339,161
¥316,812
83,002
81,216
70,717
76,494
100,668
96,240
85,027
84,259
75,163
82,109
107,521
93,321
57,200
62,446
53,535
7,416
619,461
391,574
145,662
42,089
6,589
585,914
33,547
17,826
(631)
16,352
—
16,352
(37)
16,389
63,846
60,629
49,672
6,309
617,825
386,123
142,365
41,300
6,344
576,132
41,693
14,487
190
27,016
—
27,016
234
26,782
57,981
63,359
43,592
9,965
524,694
340,352
133,426
37,842
2,879
514,499
10,195
3,782
2,792
3,621
—
3,621
103
3,518
72,336
63,592
50,989
10,466
627,190
408,668
164,284
48,899
44,472
666,323
(39,133)
(10,495)
811
(29,449)
—
(29,449)
(277)
(29,172)
76,876
71,706
56,841
10,212
762,985
469,643
176,569
51,520
1,087
698,819
64,166
24,272
348
39,546
3,054
42,600
217
42,383
98,707
65,731
44,604
8,451
723,866
445,625
164,167
52,028
(2,233)
659,587
64,279
25,595
1,352
37,332
1,186
38,518
238
38,280
¥ 74.5
74.5
¥ 121.7
121.7
¥ 16.0
16.0
¥ (132.2)
—
¥ 172.5
172.4
¥ 159.8
159.7
74.5
74.5
28.0
¥ 27,502
537,323
320,840
121.7
121.7
30.0
¥ 21,647
562,790
312,753
16.0
16.0
17.0
¥ 20,792
532,254
306,327
(132.2)
—
25.0
¥ 37,477
538,280
298,411
185.9
185.8
42.0
¥ 37,848
617,367
368,502
165.0
164.9
34.0
¥ 44,689
630,337
382,822
36.8
5.4
2.6
6.1
5.2
4.39
23.9
1.13
0.675
153.01
37.5
6.7
4.3
7.6
8.7
4.71
19.2
1.13
0.799
101.96
35.1
1.9
0.7
1.9
1.2
4.19
135.8
0.98
0.738
22.15
34.8
(6.2)
(4.7)
(6.8)
(8.7)
4.54
(8.7)
1.09
0.804
6.01
38.4
8.4
5.6
10.3
11.3
4.96
10.7
1.22
0.675
44.34
38.4
8.9
5.3
10.5
10.3
5.27
19.1
1.19
0.647
57.82
Notes: 1. Cash dividends per share represent the amounts applicable to the respective year, including dividends to be paid after the end of the year.
2. In accordance with Accounting Standards Codification No. 360, “Property, Plant and Equipment,” the figures of the consolidated statements of operations
for the prior years related to the discontinued operations have been separately reported from the ongoing operating results to conform with the current
year presentation.
3. Starting with the fiscal year ended March 31, 2010, the Companies adopted Accounting Standards Codification No. 280, “Segment Reporting” (previously
Statement of Financial Accounting Standards No.131, “Disclosures about Segments of an Enterprise and Related Information”). The figures of the segment
information for the prior years have been restated to conform with the current year presentation.
4. Starting with the fiscal year ended March 31, 2011, the solar power conditioner business in the “Industrial Automation Business” was transferred to
“Other.” The figures of the segment information for the prior years have been restated to conform with the current year presentation.
1. Macroeconomic Environment
In fiscal 2011, the economic climate in Japan continued to
face harsh conditions, such as depression in corporate
production activities and consumer spending due to the
impact of the Great East Japan Earthquake, which occurred
on March 11, 2011. Moreover, efforts to recover from these
impacts were impeded by electricity shortages, which were
the result of the nuclear power plant incident that followed
the earthquake as well as the tight supply and demand
situation regarding parts. Overseas, while growth continued
in emerging countries, the combined impacts of the monetary
tightening in China, high unemployment rates in the United
States, the instability of financial systems in Europe, and
the severe flooding in Thailand in October 2011 further
strengthened the sense of stagnancy in the global economy.
The decrease in exports as a result of disrupted supply
chains in Japan and the sharp rise in resource imports forced
Japan to record a trade deficit for the first time in 31 years,
when deficits resulted from the 1979 oil crisis. Also, the
current account balance surplus dropped by more than 50%
in comparison with fiscal 2010. Further, the real GDP of Japan
was down 1.8% year on year during the first quarter of the
fiscal year. While a recovery was evident during the summer
months, real GDP did not show any change over the full fiscal
year and was down 0.7% for the calendar year.
Growth Rates of Real GDP for Each Country/Region (Calendar-Year Basis)
2010
2011
2012 Estimates
Japan
4.4
–0.7
2.0
2.3*
–0.6*
U.S.
3.0
1.7
2.1
EU
1.9
1.4
–0.3
China
10.4
9.2
8.2
India
10.6
7.2
6.9
Brazil
Total
7.5
2.7
3.0
5.3
3.9
3.5
Source: IMF; “World Economic Outlook,” April 2012
Note: Fiscal-year basis for figures marked with an asterisk (*)
Domestic Macroeconomic Environment
Growth Rate of Real Private
Capital Investment
(%)
6
3
0
–3
–6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010
2011
(FY)
Note: Seasonally adjusted
Source: Cabinet Office, Government of Japan
Growth Rate of Machinery Orders
(Manufacture)
(Billions of yen)
1,000
950
900
850
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010
2011
(FY)
Orders [left axis]
Change from the previous quarter [right axis]
Note: Seasonally adjusted
Source: Cabinet Office, Government of Japan
(%)
15
10
5
0
–5
2. The Omron Group Market Environment
In Japan, the drive for energy saving and increased environ-
mental awareness contributed to higher product sales. Also,
demand for Omron products is expanding steadily in growing
markets in China and the Asia Pacific region.
Conversely, downward pressure was placed on earnings by
soaring materials prices and the strong yen, for which the
average exchange rates appreciated to ¥79.3 to the U.S. dollar,
up ¥6.5 from the previous fiscal year, and to ¥110.3 to the euro,
a ¥3.2 year-on-year rise.
The direct impact of the Great East Japan Earthquake was
minimal for the Omron Group, whose main production sites are
located outside the affected areas. In response to the supply
chain disruptions, we established emergency product supply
systems to fulfill our responsibility to supply products and limit
the impact of these disruptions on society to the greatest
extent possible.
Index of Electronic Parts and Devices
(Seasonally adjusted indices, 2005 average =100)
Silver and Copper Prices
Exchange Rates
300
250
200
150
100
50
2008
2009
2010
2011
(Yen/kg)
120,000
100,000
80,000
60,000
40,000
20,000
0
(Yen/kg)
1,800
1,500
1,200
900
600
300
0
(Yen)
160
150
140
130
120
110
100
90
80
70
2008
2009
2010
2011
2008
2009
2010
2011
Production
Shipments
Inventory
Silver [left axis]
Copper [right axis]
US$
EUR
Source: Ministry of Economy, Trade and Industry
88
Omron Corporation
Integrated Report 2012
89
Overview of Consolidated Results and Financial Condition
Note: Segment operating income is prepared using the single-step method (which does not show individual income levels) based on U.S. GAAP. For an easier
comparison with other companies, operating income represents gross profit minus selling, general and administrative (SG&A) expenses and research
and development (R&D) expenses.
In this market environment, the Group’s consolidated net
sales were heavily affected by the strong yen, but it was still able
to record a 0.3% year-on-year increase, to ¥619.5 billion, due to
sales contributions of such initiatives as expanding operations in
emerging countries and introducing new products. However,
the strong yen and high raw materials prices significantly
impacted income, resulting in year-on-year decreases of 16.4%
in operating income, to ¥40.1 billion; 19.5% in income before
income taxes, to ¥33.5 billion; and 38.8% in net income
attributable to shareholders, to ¥16.4 billion.
Total assets decreased 4.5% from the end of the previous
fiscal year, largely due to declines in cash and time deposits,
which was a result of the redemption of commercial paper, as
well as in deferred tax assets. Total shareholders’ equity was
up 2.6%, to ¥320.8 billion, due to the accumulation of retained
earnings, and led to a rise in the shareholders’ equity ratio, to
59.7%, from 55.6% at the end of the previous fiscal year.
Return on equity (ROE) stood at 5.2%, and return on
invested capital (ROIC) was 6.9%, both percentages down
from 8.7% and 9.3%, respectively, in the previous fiscal year.
Net Sales & Income before
Income Taxes
Net Income Attributable to
Shareholders & ROE
Total Shareholders’ Equity and Ratio of
Shareholders’ Equity to Total Assets
(Billions of yen)
(Billions of yen)
160
800
600
400
200
0
–200
120
80
40
0
–40
07
08
09
10
11
(FY)
Net sales [left axis]
Income (loss) before income taxes [right axis]
* Figures have been restated to account for businesses
discontinued in FY2007.
(Billions of yen)
50
25
0
–25
–50
07
08
09
10
11
(FY)
Net income attributable to shareholders
[left axis]
ROE [right axis]
(%)
20
10
0
–10
–20
(Billions of yen)
400
300
200
100
0
07
08
09
10
11
(FY)
Total shareholders’ equity [left axis]
Ratio of shareholders’ equity to
total assets [right axis]
(%)
80
60
40
20
0
Review and Analysis of the Statements of Income
Net Sales
In fiscal 2011, the yen continued to appreciate against the
dollar and the euro, negatively impacting sales. At the same
time, sales benefited from the successes of such initiatives
as expanding operations in China, India, and other emerging
countries and the aggressive introduction of new products.
As a result, net sales were up ¥1.6 billion year on year, or
0.3%, to ¥619.5 billion.
By region, sales declined 1.4% in Japan. Overseas, sales in
Europe were down 1.1%, due to the impacts of the sovereign
debt crisis, whereas sales were up 0.6% in the Americas,
4.2% in the Greater China region, and 4.7% in the Asia Pacific
region. Performance in the Greater China region continued to
lead other overseas segments in terms of both net sales and
operating income.
Consolidated Operating Income Analysis (YoY)
Billions of yen
Sales increase, product mix,
fixed manufacturing costs
+7.8
–8.5
Exchange
loss
Material
costs
increase
–3.1
SG&A,
R&D,
Exchange gain
+3.1
–7.2
SG&A,
R&D increase
(including
strategic
investment)
40.1
Gross profit loss –3.8 bn
Operating income loss –5.4 bn
(Exchange loss)
2011
Actual
(FY)
48.0
2010
Actual
Cost of Sales and SG&A Expenses
Cost of sales increased 1.4% year on year due to soaring raw
materials prices, and the cost of sales ratio rose 0.7
percentage point, to 63.2%. In fiscal 2011, the average price
per kilogram of silver rose rapidly, to ¥92,379, compared with
¥62,664 per kilogram recorded in the previous year, and the
unit price of copper also remained high. While the Company
strove to limit manufacturing fixed costs and enhance its
product mix, the environment continued to present difficul-
ties with regard to profitability.
SG&A expenses increased ¥3.3 billion, or 2.3%, from the
previous fiscal year, and the SG&A-to-sales ratio rose 0.5
percentage point, to 23.5%. At the same time, R&D expenses
were up ¥0.8 billion, or 1.9%, and the R&D-to-sales ratio rose
0.1 percentage point, to 6.8%. This increase was due to the
Company’s policy to steadily implement investment as neces-
sary for future growth.
Other Expenses (Income) * See Note 12 on page 115.
Other expenses increased ¥0.2 billion year on year, to ¥6.6
billion, due to the impact of loss on impairment of goodwill
and foreign exchange loss, net.
Income before Income Taxes, Net Income Attributable
to Shareholders, and Profit Distribution
As a result of the above, income before income taxes and
equity in loss (earnings) of affiliates amounted to ¥33.5 billion,
declining ¥8.1 billion from the ¥41.7 billion recorded in the
previous fiscal year. Likewise, net income attributable to
shareholders was ¥16.4 billion, down ¥10.4 billion from the
previous year’s ¥26.8 billion. Basic net income attributable to
shareholders per share fell from ¥121.7 in fiscal 2010, to
¥74.5 in fiscal 2011.
The Company distributed an annual cash dividend of ¥28.0
per share in fiscal 2011, representing a ¥2.0 decrease from
the previous fiscal year payment. The dividend payment was
determined based on the Company’s basic policy of securing
(Yen)
50
40
30
20
10
0
Costs, Expenses, and Income as Percentages of Net Sales
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Research and development expenses
Other expenses, net
Income before income taxes and equity in loss (earnings) of affiliates
Income taxes
Net income
Segment Information
sufficient internal capital resources for future growth while
maintaining a minimum 20% dividend payout ratio and
targeting a 2% dividend on equity (DOE) ratio and returning
profits to shareholders to the greatest extent possible after
these conditions are met. The consolidated dividend payout
ratio was 37.6%, and the DOE ratio was 1.9% in fiscal 2011.
Dividends per Share
07
08
09
10
11
(FY)
FY2011
100.0%
FY2010
100.0%
FY2009
100.0%
63.2
36.8
23.5
6.8
1.1
5.4
2.9
2.6
62.5
37.5
23.0
6.7
1.1
6.7
2.3
4.3
64.9
35.1
25.4
7.2
0.6
1.9
0.7
0.7
Note: Segment operating income is prepared using the single-step method (which does not show individual income levels) based on U.S. GAAP. For easier compari-
son with other companies, operating income represents gross profit minus SG&A expenses and R&D expenses.
Note: In segment information, sales represent sales to external customers and exclude intersegment transactions. Conversely, operating income includes income
from intersegment transactions before deductions of headquarters expenses and other non-apportionable amounts.
Please refer to pages 36–47 for detailed segment business results, fiscal 2012 outlook, and strategy.
1. Review of Operations by Business Segment
Industrial Automation Business (IAB)
IAB net sales decreased 0.4% year on year, to ¥270.8
billion. Operating income was impacted by the strong yen and
the Group’s strategic investment efforts and thus dropped
12.8%, to ¥33.3 billion. In Japan, sales were up during the first
quarter but were lackluster throughout the rest of the fiscal
year due to the impacts of inventory adjustment trends and
sluggish demand for semiconductor and electronic compo-
nent-related products. Overseas, operations in Europe were
affected by external factors including the strong yen and the
instability of financial systems, but these factors were offset
by strong sales of control equipment for oil- and gas-related
businesses in the Americas and the benefits of reconstruction
demand following the floods in Thailand. Overall performance
in overseas operations was strong accordingly.
Electronic & Mechanical Components Business (EMC)
EMC net sales increased 2.2% year on year, to ¥83.0 billion.
However, operating income declined 39.2%, to ¥7.2 billion,
due to the lower sales of high-profit-margin factory automation
(FA) products as well as the impacts of the strong yen and
soaring raw materials prices. In Japan, sales of automotive
components and amusement devices quickly recovered after
the Great East Japan Earthquake, and post-earthquake recon-
struction demand drove strong sales of certain components
for consumer products. Overseas, sales of products for the
automobile industry and mobile telephones grew.
Automotive Electronic Components Business (AEC)
AEC net sales edged up 0.9% year on year, to ¥85.0 billion,
however, operating income fell 35.3%, to ¥2.7 billion, as a
result of the strong yen and the impacts of the Great East
Japan Earthquake and floods in Thailand. Domestic sales
were adversely influenced in the first half of the fiscal year by
reduced production among automobile manufacturers, the
main customers for this business. However, demand recov-
ered later in the year in conjunction with the recovery of these
manufacturers. In overseas operations, strong demand from
overseas automobile manufacturers and the economic
growth of emerging countries contributed positively to sales.
90
Omron Corporation
Integrated Report 2012
91
Social Systems, Solutions and Service Business (SSB)
In SSB, net sales decreased 10.4% year on year, to ¥57.2
billion, and operating income was down 94.1%, to ¥0.1 billion.
The environmental solutions business saw the smooth launch
of energy-saving, creating, and storing businesses, and the
related maintenance business witnessed continued sales
expansion for solar power generation and accompanying
installation services. Conversely, the railway infrastructure
business suffered due to the persisting trend of limited invest-
ment among railway companies after the earthquake, which
offset favorable sales of safety and security solutions centered
on remote monitoring systems, thus leading to sluggish
sales. Performance in the traffic control and road control
systems business was lackluster in a similar manner.
Healthcare Business (HCB)
HCB net sales stepped up 3.0% year on year, to ¥62.4
billion, but operating income was down 28.4%, to ¥2.9 billion,
as a result of the impacts of the strong yen and the imple-
mentation of strategic investments. In Japan, sales of new
home-use healthcare devices, such as activity monitors, body
composition monitors, and thermometers, proved to be favor-
able and we managed to expand our market share. In equip-
ment for use in medical institutions, the world’s first visceral
fat monitor posted sales growth. However, the overall trend
of curtailing capital investment in the market resulted in weak
sales of physiological monitors, a core product. Overseas,
meanwhile, demand for Omron’s healthcare equipment
increased, particularly in emerging markets, and sales were
strong in all areas except the Americas, where the impact of
the strong yen was particularly heavy.
Other Businesses
The Other segment’s net sales increased 7.8% year on year,
to ¥53.5 billion, and operating loss improved ¥1.1 billion, to
¥3.6 billion, due to the benefits of cost-reduction measures
instituted in the micro devices business. In the environmental
solutions business, the social drive for electricity saving and
the development of alternative energy sources contributed to
expansion of the energy-saving components and services
business, which includes systems for making electricity
usage data more accessible, while sales of solar power condi-
tioners, as part of the energy-creation business, were also
strong. In the electronic systems and equipment business,
demand for uninterruptible power supply units continued to
increase in view of rising power supply concerns. In the micro
devices business, sales were sluggish for contract semicon-
ductor production orders and custom integrated circuits for
consumer products and industrial use. In the backlight
business, sales increased notably thanks to strong demand
for smartphones.
Growth in Net Sales by Business Segment
Composition of Net Sales by Business Segment
IAB
EMC
AEC
SSB
HCB
Other
FY2011
(0.4)%
2.2
0.9
(10.4)
3.0
7.8
FY2010
33.3%
FY2009
(24.8)%
14.8
12.1
10.1
(4.3)
13.9
(7.6)
(8.5)
(19.8)
(0.4)
(14.5)
IAB
EMC
AEC
SSB
HCB
Other
FY2011
43.7%
FY2010
44.0%
FY2009
38.9%
13.4
13.7
9.2
10.1
8.6
13.2
13.6
10.3
9.8
8.0
13.5
14.3
11.0
12.1
8.3
Note: The Other segment includes “Eliminations and Corporate.”
Note: The composition of net sales is based on the classifications reported
in the Six-Year Summary (page 88).
Greater China
In China, while the monetary tightening measures imple-
mented by the Chinese government slowed the economy to
a degree, the overall strong growth trend in the market
continued. In this environment, sales of components for the
automobile industry and products for use in mobile telephones
in the EMC were solid, and the HCB made particular notable
contributions to sales. As a result, net sales in the Greater
China region rose 4.2% year on year, to ¥101.1 billion.
Operating income, however, decreased 26.3%, to ¥8.4
billion, due to the worsening of the product mix. Regardless
though, the Greater China region still accounted for the
largest portion of the sales and income compared with other
overseas segments.
Asia Pacific
In the Asia Pacific region, the impact of the floods in Thailand
was only temporary, and the subsequent reconstruction
demand contributed to higher sales in the IAB. The AEC, HCB,
and other businesses also registered improved performances.
As a result, net sales in the Asia Pacific region increased 4.7%
year on year, to ¥52.4 billion. Operating income contracted
20.6%, to 4.7%, due to the impacts of natural disasters and
the worsening of product mixes.
Financial Condition
Assets
Total assets amounted to ¥537.3 billion at the end of fiscal
2011, representing a decrease of ¥25.5 billion, or 4.5%,
compared with the previous fiscal year-end. This decrease is
mainly attributable to declines in cash and time deposits and
the result of the redemption of commercial paper as well as
in deferred tax assets.
Liabilities and Shareholders’ Equity
Total liabilities amounted to ¥215.6 billion, down ¥33.5
billion from the previous fiscal year-end. This decline is largely
due to lower short-term debt and termination and retirement
benefits.
Total shareholders’ equity was up ¥8.1 billion, to ¥320.8
billion, causing the shareholders’ equity ratio to rise 4.1
percentage points, to 59.7%, compared with 55.6% at the
end of the previous fiscal year. The debt/equity ratio was
0.675 times, showing improvement from the previous year’s
0.799 times. Shareholders’ equity per share was ¥1,457.51 at
the end of the fiscal year, compared with ¥1,421.03 per share
at the end of the previous fiscal year.
Working Capital & Current Ratio
(Billions of yen)
200
150
100
50
0
07
08
09
10
11
(FY)
Working capital [left axis]
Current ratio [right axis]
(%)
220
190
160
130
100
Outstanding Interest-Bearing Debt & Debt/Equity Ratio
(Billions of yen)
(Times)
2.0
60
45
35
15
0
1.5
1.0
0.5
0
07
08
09
10
11
(FY)
Outstanding interest-bearing debt [left axis]
Debt/equity ratio [right axis]
2. Review of Operations by Region
Japan
sales in the Americas rose 0.6%, to ¥74.8 billion, and operating
income increased 5.4%, to ¥3.0 billion.
Cash Flows
In Japan, demand for semiconductors, electronic compo-
nents, and consumer electronics was sluggish, and invest-
ment in railways and transportation infrastructure was low. At
the same time, post-earthquake reconstruction demand and
changes in consumer tendency fueled strong sales of
automobiles, machine tools, amusement devices, and
environment-related products. Also as a result of these
trends, sales in the IAB, EMC, AEC, and HCB were relatively
unchanged from the previous fiscal year. Due to the above,
net sales (including direct exports) in Japan declined 1.4%
year on year, to ¥307.6 billion, and operating income was
down 27.1%, to ¥21.7 billion.
The Americas
In the Americas, sales in the HCB were heavily impacted by
the strong yen. However, the IAB benefited from the recent
increases in the price of crude oil, and sales of local oil- and
gas-related businesses were up accordingly. As a result, net
Europe
In Europe, the Company faced an increasingly harsh operating
environment, as major countries showed negative growth on a
quarterly basis and in the exchange market the yen continued to
appreciate against the euro. Performance in the HCB was
strong, but sales of certain products in the IAB and EMC were
adversely affected by ongoing inventory adjustment trends. As a
result, net sales in Europe declined 1.1% year on year, to ¥83.6
billion, and operating income decreased 11.0%, to ¥3.0 billion.
Sales Breakdown by Region
(%)
100
80
60
40
20
0
7.6%
14.7%
14.8%
11.7%
8.1%
15.7%
13.7%
12.0%
8.5%
16.3%
13.5%
12.1%
51.3%
50.5%
49.6%
09
10
11
(FY)
Asia Pacific
Greater China
Europe
The Americas
Japan
* Includes direct exports
Cash and cash equivalents at the end of the fiscal year stood at ¥45.3 billion, a ¥29.5 billion decrease from the end of the
previous fiscal year.
Cash Flows from Operating Activities
Net cash provided by operating activities totaled ¥31.9
billion, down ¥10.0 billion from the previous fiscal year. Major
factors included a decline in net income before the deduction
of noncontrolling interests and decreases in notes and
accounts receivable—trade, net, and inventories.
Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥26.5
billion, up ¥6.3 billion from the previous fiscal year. This
advance was the result of increased investments in such
areas as the expansion of production sites and production
facilities.
Cash Flows from Financing Activities
Net cash used in financing activities was ¥33.5 billion,
compared with net cash provided by financing activities of
¥3.3 billion in the previous fiscal year. Major outflows included
those to repay debt and issue dividend payments.
Free Cash Flow
(Billions of yen)
40
30
20
10
0
–10
07
08
09
10
11
(FY)
92
Omron Corporation
Integrated Report 2012
93
Business and Other Risks
Regarding a number of items described in the “Status of
Business and the Status of Accounting” of this report, some
items may pose risks and influence the Omron Group’s
management results and financial condition (including share
price), and Omron believes these items may substantially
affect investor decisions. Note that items referring to the
future reflect the Omron Group’s forecasts and assumptions
as of June 22, 2012, the release date of its Yukashoukenhou-
kokusho (Annual Securities Report filed under the Financial
Instruments and Exchange Act of Japan).
(1) Economic Conditions
The primary businesses of the Omron Group are the Indus-
trial Automation Business, Electronic and Mechanical Compo-
nents Business, Automotive Electronic Components Business,
Social Systems, Solutions and Service Business, and Health-
care Business. Accordingly, demand for Omron Group
products is affected by economic conditions in these markets.
Both in Japan and overseas, therefore, market forces affecting
the product markets in which the Omron Group conducts
business can result in the contraction of demand for its
products, thereby possibly having a negative impact on the
Group’s operating results and financial condition.
(2) Risks Accompanying Overseas Business Activities
The Omron Group actively conducts such business activi-
ties as production and sales in overseas markets. The Group
may be subject to operating difficulties in countries outside
Japan related to possible social unrest due to factors including
differences in culture or religion; political turmoil and uncer-
tainty in economic trends; differences in business customs in
areas such as the structure of relationships with local
businesses and the collection of receivables, specific legal
systems and investment regulations; changes in tax systems;
difficulty guaranteeing safety, labor shortages, and problems
in the labor management relationship; and terrorism, wars,
and other political circumstances.
These risks associated with overseas operations may have
a negative impact on the Omron Group’s operating results
and financial condition.
(3) Exchange Rate Fluctuation
The Omron Group has 116 overseas affiliated companies
and continues to target increased sales in emerging countries,
such as China and other Asian countries, while taking other
steps to reinforce its business operations in overseas
markets. The percentage of consolidated net sales accounted
for by overseas sales during fiscal 2011 was 52.2%, and
Omron expects further increases in the overseas operations
ratio due to factors such as production shifts. The Omron
Group seeks to hedge against exchange rate risk, for example,
by balancing imports and exports denominated in foreign
currencies. Exchange rate fluctuations, however, could have a
negative impact on the Omron Group’s operating results and
financial condition.
(4) Product Defects
The Omron Group seeks to provide “maximum customer
satisfaction” by providing the best quality products and
services based on its “Quality first principle.” Regarding
quality, the Group has established an ISO-certified quality
control system and develops and manufactures its products
in accordance with this system. A Groupwide quality check
system is in place for the ongoing improvement of the quality
of the Group’s entire line of products and services.
While Omron takes every precaution against the occur-
rence of defects, it has become extremely difficult to
guarantee that defects will not occur (including defects that
arise due to the changing environments in which the products
are used) or that recalls will not occur.
Changing conditions in Japan, such as the establishment of
the Consumer Affairs Agency, have necessitated corporate
responses that pay more attention to consumer protection.
Product quality is also increasingly a major issue overseas.
For this reason, product defects that require large-scale
product recalls or that carry damage beyond the coverage
capability of liability insurance could not only incur substantial
losses for the Group but also seriously damage trust in the
Company and the Omron brand. Such a situation could lead to
declining sales for the Group and has the potential to
negatively impact the Group’s financial condition.
The Group also strives to provide Environmental Assurance
Products that do not include banned substances designated
in the Restriction of Hazardous Substances (RoHS) Directive
enforced by the European Union in July 2006. The Group
is investigating the status of regulated chemical substances
in components and materials and is seeking to use compo-
nents and materials that do not contain banned substances.
Since 2009, the Group adheres to the European Union’s
Registration, Evaluation, Authorization and Restriction of
Chemicals (REACH) Regulation concerning the identification
of contained substances. Despite the Group’s efforts, the
frequent modifications of the regulations on controlled
substances complicate the supervisory efforts, and it is
possible that infractions could incur, such as failure to comply
with modified regulations.
(5) Research and Development Activities
The Omron Group has established technical strategies to
facilitate the development and reinforcement of technologies
from a medium- to long-term perspective and is advancing
research and development (R&D) activities accordingly.
Sensing and control technology is an area in which the
Company is particularly strong; this area represents the
source of our competitive edge. For this reason, we are
focusing R&D expenses on our mainstay Industrial Automa-
tion Business and Electronic and Mechanical Components
Business, areas in which we are pursuing the development of
new products and the strengthening of manufacturing
technologies. As a result, the R&D-to-sales ratio remains at
approximately 7%.
The Group conducts R&D activities with the aim of devel-
oping new products that meet market needs. However,
it is possible that the anticipated results of these activities
may not be achieved due to delays in R&D plans or a lack of
technological capabilities. It is also possible that the products
created through such R&D activities may not be as successful
in markets as expected. In such cases, the Omron Group’s
operating results and financial condition could be adversely
affected.
(6) Information Leakage
The Omron Group acquires personal information and classi-
fied customer information through its business processes
and acquires important information in the course of business.
The Omron Group is taking steps to reinforce control over the
information the Group handles and to further improve
employees’ information literacy with the goal of preventing
external entry into its internal information systems and misap-
propriation by third parties resulting from theft or loss of that
information. Unanticipated leakage of internal information,
however, due for example to invasion of internal information
systems using technology exceeding implemented security
levels could exert a negative impact on the Omron Group’s
operating results and financial condition.
(7) Risks Associated with Patent Rights and
Other Intellectual Property Rights
The Omron Group conducts research on technology devel-
oped by other companies and in the public domain in the
course of its R&D and design activities. A very large number
of intellectual property rights exist within the Group’s range of
business and products, and new intellectual property rights
are declared on a daily basis. The potential therefore exists
that a third party could present a claim regarding one of the
Group’s specific products or components, which could have a
negative impact on the Group’s operating results and financial
condition.
When exercising our intellectual property rights during
efforts to resolve issues related to the intellectual property
rights of the Group, disputes with third parties could arise,
such as oppositional tactics from the third party subject to the
exercise of rights.
The Omron Group takes appropriate measures to recognize
and compensate employees for inventions, such as through
the Employee Invention Compensation Program and the
Invention Commendation Program. Disputes regarding the
value of an invention can arise with inventors, including inven-
tors who have retired from the Group.
The Omron Group has accumulated technology and exper-
tise allowing it to differentiate its products from those of its
competitors. However, the ever-increasing sophistication of
counterfeit product manufacturing and sales methods and
other factors make it virtually impossible to completely
protect all of the Group’s proprietary technology and exper-
tise in certain regions, including China. The Group implements
strategic measures to protect its intellectual property rights,
but the circulation of low-quality counterfeit items fraudu-
lently bearing the Omron brand has the potential to damage
the trust in the Group’s products and the Group’s brand image
and could have a negative impact on the Group’s operating
activities.
Omron has focused on brand management since its incep-
tion and in recent years has initiated prompt and appropriate
countermeasures to the use of domain names similar to
“Omron” that have appeared overseas. Identifying and taking
action against all such fraudulent domain names that have
been registered is virtually impossible. The danger exists that
the same or a similar name to “Omron” could be used in a
fraudulent business transaction that could damage the trust
in the Group.
(8) Natural Disasters
The Omron Group has implemented the necessary safety
measures and taken steps to facilitate the continuity and
early restoration of business operations in the case of a
natural disaster, fire, or other calamity, including a large-scale
earthquake in Japan’s Tokai, Tonankai, or Tokyo metropolitan
areas, and has implemented preventive measures for other
types of emergency situations, such as a worldwide outbreak
of a new form of influenza virus.
The Group and its business clients maintain operating bases
in Japan and around the world, making it virtually impossible to
completely avoid the risks that would arise from an unfore-
seen natural disaster, fire, or other calamity. A major event of
an unforeseen scale could impact Group operations, such as
limiting its ability to carry out production and business activi-
ties. Events such as the above could have a negative impact
on the Group’s operating results and financial condition.
(9) Raw Material Shortages and Provision Price Rises
It is absolutely essential to the Group’s manufacturing
activities to obtain raw materials and parts of sufficient quality
in a timely manner and in necessary quantities. Therefore, we
stringently select suppliers from a reliability standpoint.
However, if one of the following supply issues were to arise
and we were to have difficulty changing suppliers, securing
additional suppliers, or switching to different parts under such
conditions, the Group’s performance could be adversely
affected.
• The supply chain is significantly disrupted due to an unfore-
seen natural disaster or accident.
• The deterioration of the management situation at a supplier
resulted in reduced or halted supply of materials or parts.
• Market demand increased.
Further, while the Group has concluded contracts with
suppliers to fix provision prices, if increased demand in
emerging countries or an influx of capital into these countries
were to result in a rise in the prices of petrochemicals, steel,
silver, copper, rare earths, or other raw materials, it could
impact manufacturing costs.
Certain raw materials and parts can only be procured from
specific suppliers. According, events such as the above could
have a negative impact on the Group’s operating results and
financial condition.
(10) Environmental Laws and Regulations
The Group must comply with a wide variety of environ-
mental laws and regulations, including those related to
climate change, air and water pollution, hazardous substances,
waste, product recycling, and the contamination of soil and
groundwater. These laws and regulations not only apply to the
Omron Group’s current business activities but may also be
retroactively applied to past business activities or the past
activities of businesses transferred from other companies
through acquisition or some other means. It is possible that
compliance with future environmental laws and regulations or
efforts to improve the environmental soundness of opera-
tions could result in a rise in expenses related to the environ-
ment, which could subsequently have an adverse effect on
the Group’s operating results and financial condition.
94
Omron Corporation
Integrated Report 2012
95
Millions of yen
Thousands of
U.S. dollars (Note 2)
FY2011
FY2010
FY2011
LIABILITIES AND SHAREHOLDERS’ EQUITY
FY2011
FY2010
FY2011
Millions of yen
Thousands of
U.S. dollars (Note 2)
Consolidated Balance Sheets
OMRON Corporation and Subsidiaries
March 31, 2012 and 2011
ASSETS
Current Assets:
Cash and cash equivalents (Note 1)
¥ 45,257
¥ 74,735
$ 551,915
Notes and accounts receivable—trade (Note 5)
143,304
137,531
1,747,610
Allowance for doubtful receivables (Note 1)
Inventories (Note 1, 3)
Deferred income taxes (Note 1, 13)
Other current assets (Note 4, 18, 20)
(2,205)
92,253
17,975
11,513
(2,230)
86,151
20,183
11,520
(26,890)
1,125,037
219,207
140,402
Total Current Assets
308,097
327,890
3,757,281
Property, Plant and Equipment (Note 1, 7):
Land
Buildings
Machinery and equipment
Construction in progress
Total
Accumulated depreciation
26,950
128,870
142,148
7,417
27,875
125,686
136,792
6,836
328,659
1,571,585
1,733,512
90,451
305,385
297,189
3,724,207
(184,679)
(177,191)
(2,252,183)
Current Liabilities:
Short-term debt (Note 8)
Notes and accounts payable—trade
Accrued expenses
Income taxes payable
Other current liabilities (Note 1, 10, 13, 18, 20)
¥ 18,774
¥ 45,519
$ 228,951
79,331
29,179
623
24,989
77,836
29,414
2,188
26,475
967,451
355,841
7,598
304,744
Total Current Liabilities
152,896
181,432
1,864,585
Deferred Income Taxes (Note 1,13)
Termination and Retirement Benefits (Note 1, 10)
Other Long-Term Liabilities
738
60,432
1,577
697
65,485
1,524
9,000
736,976
19,232
Shareholders’ Equity (Note 1, 11):
Common stock, no par value:
Authorized: 487,000,000 shares in 2012 and 2011
Net Property, Plant and Equipment
120,706
119,998
1,472,024
Issued:
239,121,372 shares in 2012 and 2011
64,100
64,100
781,707
Investments and Other Assets:
Investments in and advances to affiliates (Note 1)
Investment securities (Note 1, 4, 20)
Leasehold deposits
Deferred income taxes (Note 1, 13)
Other assets (Note 1, 6, 7)
14,443
36,161
7,219
34,516
16,181
13,521
35,694
7,126
42,190
16,371
176,134
440,988
88,037
420,927
197,329
Total Investments and Other Assets
108,520
114,902
1,323,415
Total
See notes to consolidated financial statements.
¥ 537,323
¥ 562,790
$ 6,552,720
Capital surplus
Legal reserve
Retained earnings
Accumulated other comprehensive income (loss) (Note 1, 16)
Treasury stock, at cost— 18,991,739 shares and
99,078
10,034
260,557
(68,433)
99,081
9,574
250,824
(66,227)
1,208,268
122,366
3,177,524
(834,548)
19,032,544 shares in 2012 and 2011, respectively
(44,496)
(44,599)
(542,634)
Total Shareholders’ Equity
Noncontrolling interests
Total Net Assets
Total
See notes to consolidated financial statements.
320,840
312,753
3,912,683
840
899
10,244
321,680
313,652
3,922,927
¥537,323
¥562,790
$6,552,720
96
Omron Corporation
Integrated Report 2012
97
Consolidated Statements of Income
OMRON Corporation and Subsidiaries
Years ended March 31, 2012, 2011 and 2010
Consolidated Statements of Comprehensive Income (Loss)
OMRON Corporation and Subsidiaries
Years ended March 31, 2012, 2011 and 2010
Millions of yen
Thousands of
U.S. dollars (Note 2)
FY2011
FY2010
FY2009
FY2011
¥619,461
¥617,825
¥524,694
$7,554,402
Net Income
Millions of yen
Thousands of
U.S. dollars (Note 2)
FY2011
FY2010
¥16,352
¥ 27,016
FY2009
¥ 3,621
FY2011
$199,415
Net Sales (Note 1)
Costs and Expenses:
Cost of sales
Selling, general and administrative expenses (Note 1)
Research and development expenses
Other expenses, net (Note 8,12,20,21)
391,574
145,662
42,089
6,589
386,123
142,365
41,300
6,344
340,352
133,426
37,842
2,879
4,775,293
1,776,366
513,280
80,353
Total
585,914
576,132
514,499
7,145,292
Income before Income Taxes
and Equity in Loss (Earnings) of Affiliates
Income Taxes (Note 1,13)
Equity in Loss (Earnings) of Affiliates
Net Income
Net Income (loss) attributable to noncontrolling interests
33,547
17,826
(631)
16,352
(37)
41,693
14,487
190
27,016
234
10,195
3,782
2,792
3,621
103
409,110
217,390
(7,695)
199,415
(451)
Net Income attributable to shareholders
¥ 16,389
¥ 26,782
¥ 3,518
$ 199,866
Per Share Data (Note 14):
Net Income attributable to shareholders
Basic
Diluted
See notes to consolidated financial statements.
FY2011
Yen
FY2010
FY2009
U.S. dollars
(Note 2)
FY2011
74.46
74.46
121.66
121.66
15.98
15.98
0.91
0.91
Other Comprehensive Income (Loss), –net of tax (Note 16):
Foreign currency translation adjustments:
Foreign currency translation adjustments arising
during the year
Reclassification adjustment for the portion realized
in net income
Net change in Foreign currency translation adjustments
during the year
Pension liability adjustments:
Pension liability adjustments arising during the year
Reclassification adjustment for the portion realized
in net income
Net change in Pension liability adjustments during the year
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during the year
Reclassification adjustment for losses on impairment
realized in net income
Reclassification adjustment for net gains on sale realized
in net income
Reclassification adjustment for net gains on Share
exchange in net income
Net unrealized gains (losses)
Net gains (losses) on derivative instruments:
Net gains on derivative instruments designated as cash
flow hedges during the year
Reclassification adjustment for net gains (losses) realized
in net income
Net gains (losses)
Other Comprehensive Income (Loss)
Comprehensive Income
Comprehensive Income (Loss) attributable to
noncontrolling interests
(1,613)
(10,376)
(1,400)
(19,671)
(892)
(14)
—
(10,878)
(2,505)
(10,390)
(1,400)
(30,549)
625
(704)
(79)
460
227
(188)
(74)
425
3
(57)
(54)
(2,213)
14,139
(1,534)
4,531
7,622
(649)
(2,183)
(514)
4,017
(1,566)
4,966
466
(10)
(4)
(1,114)
893
(841)
52
(13,635)
13,381
305
(350)
—
4,921
737
(186)
551
8,089
11,710
(8,586)
(964)
5,610
2,768
(2,293)
(902)
5,183
37
(695)
(658)
(26,988)
172,427
(44)
212
62
(536)
Comprehensive Income attributable to shareholders (Note 1)
¥14,183
¥ 13,169
¥11,648
$172,963
See notes to consolidated financial statements.
98
Omron Corporation
Integrated Report 2012
99
(762)
(762)
Net loss on sale and disposal of property, plant and equipment
Balance, March 31, 2010
239,121,372
64,100
99,081
9,363
230,859
(52,614)
(44,462)
306,327
Consolidated Statements of Shareholders’ Equity
OMRON Corporation and Subsidiaries
Years ended March 31, 2012, 2011 and 2010
Number of
common shares
issued
Common stock Capital surplus
Legal reserve
Millions of yen
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
Shareholders’
Equity
Noncontrolling
interests
Total Net
Assets
Treasury stock
Balance, March 31, 2009
239,121,372
¥64,100
¥99,059
¥ 9,059
¥231,388
¥(60,744)
¥(44,451)
¥298,411
¥1,570
¥299,981
3,518
(3,743)
3,518
103
3,621
(3,743)
(3,743)
Net income
Cash dividends paid to
OMRON Corporation
shareholders, ¥17 per share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
and other
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury stock
Sale of treasury stock
Grant of stock options
Net income
Cash dividends paid to
OMRON Corporation
shareholders, ¥30 per share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
and other
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury stock
Sale of treasury stock
Net income
Cash dividends paid to
OMRON Corporation
shareholders, ¥28 per share
Cash dividends paid to
noncontrolling interests
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury stock
Sale of treasury stock
304
(304)
—
(62)
(62)
—
8,130
8,130
(41)
8,089
(0)
22
(13)
2
(13)
2
22
(13)
2
22
808
234
307,135
27,016
26,782
26,782
(6,605)
211
(211)
16,389
(6,164)
460
(460)
(6,605)
(6,605)
(0)
(0)
(121)
(121)
—
—
(13,613)
(13,613)
(22)
(13,635)
(140)
2
899
(37)
313,652
16,352
16,389
(6,164)
(6,164)
—
(15)
(15)
—
Balance, March 31, 2011
239,121,372
64,100
99,081
9,574
250,824
(66,227)
(44,599)
312,753
(0)
(1)
(140)
3
(140)
2
(3)
(32)
(2,206)
(2,206)
(7)
(2,213)
(10)
113
(10)
78
(10)
78
Balance, March 31, 2012
239,121,372
¥64,100
¥99,078
¥10,034
¥260,557
¥(68,433)
¥(44,496)
¥320,840
¥ 840
¥321,680
Common stock Capital surplus
Legal reserve
Thousands of U.S. dollars (Note 2)
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
Shareholders’
Equity
Noncontrolling
interests
Total Net
Assets
Treasury stock
Balance, March 31, 2011
$781,707 $1,208,305
$116,756 $3,058,829 $(807,646) $(543,890) $3,814,061
$10,963 $3,825,024
Net income
Cash dividends paid to OMRON Corporation
shareholders, $0.34per share
Cash dividends paid to noncontrolling interests
Transfer to legal reserve
Other comprehensive income (loss)
Acquisition of treasury stock
Sale of treasury stock
Balance, March 31, 2012
See notes to consolidated financial statements.
199,866
(75,171)
5,610
(5,610)
199,866
(451)
199,415
(75,171)
—
(183)
(75,171)
(183)
—
(37)
(390)
(26,902)
(26,902)
(85)
(26,987)
(122)
1,378
(122)
951
(122)
951
$781,707 $1,208,268
$122,366 $3,177,524 $(834,548) $(542,634) $3,912,683
$10,244 $3,922,927
Consolidated Statements of Cash Flows
OMRON Corporation and Subsidiaries
Years ended March 31, 2012, 2011 and 2010
Operating Activities:
Net income
Adjustments to reconcile net income to net cash provided
by operating activities:
Millions of yen
Thousands of
U.S. dollars (Note 2)
FY2011
FY2010
FY2009
FY2011
¥ 16,352
¥ 27,016
¥ 3,621
$ 199,415
Depreciation and amortization
22,617
22,984
27,014
Loss on impairment of property, plant and equipment
Net gain on sale of investment securities
Loss on impairment of investment securities
Loss on impairment of goodwill
Termination and retirement benefits
Deferred income taxes
Equity in loss (earnings) of affiliates
Changes in assets and liabilities:
Notes and accounts receivable—trade, net
Inventories
Other assets
Notes and accounts payable—trade
Income taxes payable
Accrued expenses and other current liabilities
Other, net
Total adjustments
Net cash provided by operating activities
Investing Activities:
Proceeds from sale or maturities of investment securities
Purchase of investment securities
Capital expenditures
Decrease (increase) in leasehold deposits
Proceeds from sale of property, plant and equipment
Equity transaction with noncontrolling interests
Decrease (increase) in investment in and loans to affiliates
Proceeds from acquisition of business, net
Proceeds from sale of business, net
Other, net
861
671
(307)
391
2,009
(5,669)
9,981
(631)
(6,838)
(6,538)
(483)
682
(1,562)
388
22
15,594
31,946
693
(911)
606
413
(7)
805
—
(4,785)
5,374
190
(16,227)
(12,174)
1,048
9,301
(453)
8,383
(518)
14,940
41,956
109
—
558
217
(636)
632
—
(5,110)
(1,031)
2,792
(14,440)
4,977
4,457
13,298
1,995
4,554
(139)
39,138
42,759
1,004
(15)
275,817
10,500
8,183
(3,744)
4,768
24,500
(69,134)
121,720
(7,695)
(83,390)
(79,732)
(5,890)
8,317
(19,049)
4,732
268
190,171
389,586
8,451
(11,110)
(27,502)
(21,647)
(20,792)
(335,390)
(101)
2,307
—
(480)
(1,012)
—
520
276
1,066
—
20
—
(34)
—
335
1,490
(106)
(931)
—
431
—
(1,232)
28,134
—
(5,854)
(12,341)
—
6,342
Net cash used in investing activities
(26,486)
(20,210)
(18,584)
(323,000)
Financing Activities:
Net borrowings (repayments) of short-term debt
Repayments of long-term debt
Dividends paid by the Company
Dividends paid to noncontrolling interests
Acquisition of treasury stock
Sale of treasury stock
Other, net
Net cash provided by (used in) financing activities
(26,744)
—
(6,604)
(15)
(10)
2
(121)
(33,492)
Effect of Exchange Rate Changes on Cash and Cash Equivalents
(1,446)
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of the Year
(29,478)
74,735
29,052
(20,000)
(5,285)
(0)
(140)
3
(297)
3,333
(2,070)
23,009
51,726
(16,282)
(326,146)
—
—
(3,083)
(80,537)
(762)
(13)
1
(219)
(20,358)
1,278
5,095
46,631
(183)
(122)
24
(1,475)
(408,439)
(17,634)
(359,487)
911,402
Cash and Cash Equivalents at End of the Year
¥ 45,257
¥ 74,735
¥ 51,726
$ 551,915
See notes to consolidated financial statements.
100
Omron Corporation
Integrated Report 2012
101
Notes to Consolidated Financial Statements
OMRON Corporation and Subsidiaries
1. Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
principles generally accepted in the United States of America.
OMRON Corporation (the “Company”) is a multinational
Certain reclassifications have been made to amounts previously
manufacturer of automation components, equipment and
reported in order to conform to classifications as of and for the
systems with advanced computer, communications, and control
year ended March 31, 2012.
technologies. The Company conducts business in more than 30
countries around the world and strategically manages its world-
Principles of Consolidation
wide operations through four regional management centers in the
The consolidated financial statements include the accounts of
United States, the Netherlands, China and Singapore. Products,
the Company and its subsidiaries (collectively, the “Companies”).
classified by type and market, are organized into business
All significant intercompany accounts and transactions have been
segments as described below.
eliminated in consolidation.
Industrial Automation Business manufactures and sells
Investments, in which the Companies have a 20% to 50%
control components and systems, including programmable logic
interest (affiliates), are accounted for using the equity method.
controllers, sensors, and switches used in automatic systems in
The consolidated financial statements include all the Company’s
industry. In the global market, industrial automation business
subsidiaries (153 and 152 companies at March 31, 2012 and 2011,
offers many services, such as those involving sensors, program-
respectively).
mable logic controllers, timers, vision sensors, automated optical
inspection devices, safety components, temperature controllers,
Application of Equity Method
and motion controllers.
Investments in the Company’s affiliated companies are accounted
Electronic and Mechanical Components Business manufactures
for using the equity method.
and sells electric and electronic components, such as those found
Affiliated companies recorded on the equity method as of
in relays, switches, components, and units for amusement
March 31:
devices, connectors, and combination jogs.
2012
Automotive Electronic Components Business develops and
— Hitachi-Omron Terminal Solutions, Corp. and others.
produces automotive electronic components and other compo-
Total: 12 companies
nents for automobiles and automotive electronic components
2011
manufacturers throughout the world. Automotive electronic
— Hitachi-Omron Terminal Solutions, Corp. and others.
components business offers many services, such as those
Total: 14 companies
involving passive entry devices, power window switches, and
electric power steering.
Differing Fiscal Year Ends
Social Systems Solutions and Service Business encompass
Certain subsidiaries have different fiscal year ends from that of
the sale of card authorization terminals mainly for the domestic
the Company and respective fiscal year end financial statements
markets. Passing gates, automated ticket machines, electronic
of those subsidiaries were used for the purpose of the Company’s
panels, terminal displays, railway infrastructure systems, traffic
consolidation. For the years ended March 31, 2012 and 2011,
control, road control systems, security systems, and payment
difference in fiscal year ends between certain subsidiaries and the
systems for traffic information and monitoring purposes are also
Company did not have a material effect on the Company’s consol-
supplied for the domestic market.
idated financial statements.
Healthcare Business sells digital blood pressure monitors,
digital thermometers, body composition monitors, pedometers,
use of Estimates
biological information monitors, and nebulizers aimed at both the
The preparation of consolidated financial statements in conformity
consumer and institutional markets.
with accounting principles generally accepted in the United States of
Other handles search and cultivation of new businesses and as
America requires management to make estimates and assumptions
headquarters’ direct control business cultivates and enhances
that affect the reported amounts of assets and liabilities and disclo-
businesses that are not part of the above five business segments.
sure of contingent assets and liabilities at the date of the consoli-
The group provides products, such as solar power conditioner
dated financial statements and the reported amounts of revenues
equipment, computer peripheral equipment, microelectrical-
and expenses during the reporting period. Actual results could differ
mechanical system (MEMS) microphone chips, and liquid crystal
from those estimates.
display (LCD) backlight.
Cash Equivalents
Basis of Financial Statements
Cash equivalents consist of highly liquid investments with
The accompanying consolidated financial statements are stated
original maturities of three months or less, including time deposits,
in Japanese yen. Based upon requirements for depositary receipts
commercial paper, and securities purchased with resale agree-
issued in Europe, they are presented in accordance with accounting
ments and money market instruments.
Allowance for Doubtful Receivables
an indefinite useful life is not to be amortized, but instead tested for
An allowance for doubtful receivables is established in amounts
impairment until its life is determined to be no longer indefinite.
considered to be appropriate based primarily upon the Compa-
nies’ past credit loss experience and an evaluation of potential
Long-Lived Assets
losses within the outstanding receivables.
Long-lived assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an
Marketable Securities and Investments
asset might be unrecoverable. Recoverability of assets to be held
The Companies classify all of their marketable equity and debt
and used is measured by a comparison of the carrying amount of an
securities as available for sale. Available-for-sale securities are
asset to undiscounted cash flows expected to be generated by the
carried at market value with the corresponding recognition of net
asset. If such assets are considered to be potentially impaired, the
unrealized holding gains and losses as a separate component of
impairment to be recognized is measured by the amount by which
accumulated other comprehensive income (loss), net of related
the carrying amount of the assets exceeds the fair value. Assets to
taxes, until recognized. If necessary, individual securities classi-
be disposed of other than by sale are considered held and used until
fied as available for sale are reduced to fair value by a charge to
disposed. Assets to be disposed of by sale are reported at the lower
income in the period in which the decline is deemed to be other
of the carrying amount or fair value, less selling costs.
than temporary. Available-for-sale securities are reviewed for
other-than-temporary declines in the carrying amount based on
Advertising Costs
criteria that include the length of time and the extent to which the
Advertising costs are charged to earnings as incurred. Advertising
market value has been less than cost, the financial condition, and
expense was ¥5,908 million ($72,049 thousand), ¥5,701 million,
near-term prospects of the issuer and the Company’s intent and
and ¥ 4,957 million for the years ended March 31, 2012, 2011, and
ability to retain the investment for a period of time sufficient to
2010, respectively, and are included in selling, general, and admin-
allow for any anticipated recovery in market value.
istrative expenses in the consolidated statements of operations.
Other investments are stated at the lower of cost or estimated
net realizable value. The cost of securities sold is determined on
Shipping and Handling Charges
the average cost basis.
Inventories
Shipping and handling charges were ¥7,066 million ($86,171
thousand), ¥7,125 million, and ¥6,005 million for the years ended
March 31, 2012, 2011, and 2010, respectively, and are included in
Domestic inventories are mainly stated at the lower of cost,
selling, general, and administrative expenses in the consolidated
determined by the first-in, first-out method, or market value. Also,
statements of operations.
overseas inventories are mainly stated at the lower of cost, deter-
mined by the moving-average method, or market value.
Termination and Retirement Benefits
Property, Plant, and Equipment
Termination and retirement benefits are accounted for and are
disclosed in accordance with ASC No. 715, “Compensation-
Property, plant, and equipment are stated at cost. Depreciation
Retirement Benefits,” based on the fiscal year end fair value of
of property, plant, and equipment has been computed principally on
plan assets and the projected benefit obligations of employees.
a declining-balance method based upon the estimated useful lives
The provision for termination and retirement benefits includes
of the assets. However, certain of the Company’s subsidiaries
amounts for directors and corporate auditors of the Companies.
located outside Japan have computed depreciation using a straight-
line method based upon the estimated useful lives of the assets.
Income Taxes
The estimated useful lives primarily range from 3 to 50 years for
Deferred income taxes reflect the tax consequences on future
buildings and from 2 to 15 years for machinery and equipment.
years of differences between the tax bases of assets and liabilities
Depreciation expense was ¥19,165 million ($233,720 thousand),
and their financial reporting amounts, operating loss carryforwards,
¥19,095 million, and ¥ 22,239 million for the years ended March
and tax credit carryforwards. Future tax benefits, such as net
31, 2012, 2011, and 2010, respectively.
operating loss carryforwards and tax credit carryforwards, are
recognized to the extent that such benefits are more likely than not
Goodwill and Other Intangible Assets
to be realized. The effect on deferred tax assets and liabilities of a
The Companies account for their goodwill and other intangible
change in tax rates is recognized in income in the period that
assets in accordance with the Financial Accounting Standards Board
includes the enactment date.
(FASB) issued Accounting Standards Codification (ASC) No. 350,
Based on available information at the reporting date, and
“Intangibles-Goodwill and Other,” which requires that goodwill no
considering a more likely than not threshold, tax benefit related to
longer be amortized, but instead tested for impairment at least
tax position was recognized.
annually. ASC No. 350 also requires recognized intangible assets be
The Company and certain domestic subsidiaries compute
amortized over their respective estimated useful lives and reviewed
current income taxes based on consolidated taxable income as
for impairment. Any recognized intangible asset determined to have
permitted by Japanese tax regulations.
102
Omron Corporation
Integrated Report 2012
103
Consumption Taxes and Other Value-Added Taxes
Stock-Based Compensation
Consumption taxes and other value-added taxes have been
The Companies apply ASC No. 718, “Compensation-Stock
excluded from sales and are shown net included in other receivables.
Compensation,” and recognize stock-based compensation cost
measured by the fair value method.
Product Warranties
Liability for estimated warranty-related cost is established at
the time revenue is recognized and is included in other current
Translation of financial statement items of the Company’s
subsidiaries located outside Japan into Japanese yen
liabilities. The liability is established using historical information,
Consolidated financial statements of the Company’s subsid-
including the nature, frequency, and average costs of past
iaries located outside Japan are translated based upon ASC No.
warranty claims.
Derivatives
830, “Foreign Currency Matters”. Assets and liabilities of the
subsidiaries are translated into Japanese yen at the rates of
exchange in effect at the balance sheet date. Income and expense
Derivative instruments and hedging activities are accounted for
items are translated at the average exchange rates prevailing
in accordance with ASC No. 815, “Derivatives and Hedging”. This
during the year. Gains and losses resulting from translation of
standard establishes accounting and reporting standards for deriv-
financial statements are reported in accumulated other compre-
ative instruments and for hedging activities and requires that an
hensive income (loss) as foreign currency translation adjustments.
entity recognize all derivatives as either assets or liabilities in the
consolidated balance sheets and measure those instruments at
Comprehensive Income (Loss)
fair value.
The Companies apply ASC No. 220, “Comprehensive Income”.
For foreign exchange forward contracts, foreign currency
Comprehensive income (loss) is composed of net income (loss)
swaps, interest rate swaps, and commodities swaps, on the date
attributable to shareholders, changes in foreign currency transla-
the derivative contract is entered into, the Companies designate
tion adjustments, changes in pension liability adjustments,
the derivative as a hedge of a forecasted transaction or the
changes in unrealized gains (losses) on available-for-sale securities
variability of cash flows to be received or paid related to a recog-
and changes in net gains (losses) on derivative instruments, and
nized asset or liability (“cash flow” hedge). The Companies
comprehensive income (loss) is disclosed within the consolidated
formally document all relationships between hedging instruments
statements of comprehensive income (loss).
and hedged items, as well as its risk management objective and
strategy for undertaking various hedge transactions. This process
New Accounting Standards
includes linking all derivatives that are designated as cash flow
In September 2011, the FASB issued Accounting Standards
hedges to specific assets and liabilities in the consolidated
Update No. 2011-8, “Intangibles-Goodwill and Other (Topic 350):
balance sheet or to specific firm commitments or forecasted
Testing Goodwill for Impairment”.
transactions. Based on the Companies’ policy, all foreign exchange
ASU No. 2011-8 gives companies the option to perform a quali-
forward contracts, foreign currency swaps, interest rate swaps,
tative assessment to first assess whether the fair value of a
and commodities swaps entered into must be highly effective in
reporting unit is less than its carrying amount. If an entity deter-
offsetting changes in cash flows of hedged items.
mines that the carrying value of the reporting unit is more likely
Changes in fair value of a derivative that is highly effective and
than not less than its fair value, then performing further impair-
that is designated and qualifies as a cash flow hedge are recorded
ment test becomes unnecessary. ASU No. 2011-8 is effective for
in other comprehensive income (loss) until earnings are affected
fiscal years beginning on or after December 15, 2011. The adoption
by the variability in cash flows of the designated hedged item.
of this standard is not expected to have a significant impact on our
Cash Dividends
Cash dividends are reflected in the consolidated financial state-
ments at proposed amounts in the year to which they are appli-
2. Translation into u.S. Dollars
The consolidated financial statements are stated in Japanese
cable, even though payment is not approved by shareholders until
yen, the currency of the country in which the Company is incorpo-
the annual general meeting of shareholders held early in the
rated and operates. The translation of Japanese yen amounts into
consolidated financial statements.
3. Inventories
Inventories at March 31, 2012 and 2011, consisted of:
Finished products
Work in process
Materials and supplies
Total
Millions of yen
2012
¥52,033
14,177
26,043
¥92,253
2011
¥48,945
11,644
25,562
¥86,151
Thousands of
U.S. dollars
2012
$ 634,549
172,890
317,598
$1,125,037
4. Marketable Securities and Investments
Cost, gross unrealized holding gains and losses, and fair value of available-for-sale and held-to-maturity securities at March 31,
2012 and 2011, were as follows:
2012
2011
Unit: Millions of yen
Cost (*)
Gross unrealized
gains
Gross unrealized
losses
Fair value
Cost (*)
Gross unrealized
gains
Gross unrealized
losses
Fair value
Available-for-sale
securities:
Debt securities
¥ 10
¥ —
Equity securities
19,382
12,366
Total
¥19,392
¥12,366
¥ —
(236)
¥(236)
¥ 10
31,512
¥ 10
19,173
¥31,522
¥19,183
¥ —
12,126
¥12,126
¥ —
(254)
¥(254)
¥ 10
31,045
¥31,055
Unit: Thousands of U.S. dollars
2012
Cost (*)
Gross unrealized
gains
Gross unrealized
losses
Fair value
Available-for-sale
securities:
Debt securities
$ 122
$ —
$ —
$ 122
Equity securities
236,366
150,805
(2,878)
384,293
Total
$236,488
$150,805
$(2,878)
$384,415
(*) Cost represents amortized cost for debt securities and cost for equity securities.
2012
2011
Unit: Millions of yen
Amortized
cost
Gross unrealized
gains
Gross unrealized
losses
Fair value
Amortized
cost
Gross unrealized
gains
Gross unrealized
losses
Fair value
Held-to-maturity
securities:
Debt securities
¥150
¥—
¥—
¥150
¥175
¥—
¥—
¥175
Unit: Thousands of U.S. dollars
2012
Amortized
cost
Gross unrealized
gains
Gross unrealized
losses
Fair value
Held-to-maturity
securities:
Debt securities
$1,829
$—
$—
$1,829
following fiscal year. Resulting dividends payable are included in
U.S. dollar amounts is included solely for convenience of the
Maturities of debt securities classified as available-for-sale and held-to-maturity securities at March 31, 2012 and 2011, were as follows:
other current liabilities in the consolidated balance sheets.
readers outside of Japan and has been made at the rate of ¥82 to
Revenue Recognition
$1, the approximate rate of exchange at March 31, 2012. Such
translation should not be construed as representations that the
The Companies recognize revenue when persuasive evidence
Japanese yen amounts could be converted into U.S. dollars at the
of an arrangement exists, delivery has occurred and title and risk
above or any other rate.
of loss have transferred, the sales price is fixed or determinable,
and collectibility is probable.
Due within one year
Due after one year through five years
Due over five years
Total
Millions of yen
Thousands of U.S. dollars
2012
2011
2012
Cost
¥ 25
¥110
¥ 25
¥160
Fair value
¥ 25
¥110
¥ 25
¥160
Cost
¥ 25
¥110
¥ 50
¥185
Fair value
Cost
Fair value
¥ 25
¥110
¥ 50
¥185
$ 305
$1,341
$ 305
$1,951
$ 305
$1,341
$ 305
$1,951
104
Omron Corporation
Integrated Report 2012
105
Gross unrealized holding losses and fair value of certain available-for-sale equity securities, aggregated by the length of time,
that they have been in a continuous unrealized loss position at March 31, 2012 and 2011, were as follows:
The carrying amount of goodwill in each segment at March 31, 2012 and 2011, and changes in its carrying amount in each
segment for the year ended March 31, 2012 and 2011, were as follows:
Less than 12 month
Equity securities
Millions of yen
Thousands of U.S. dollars
2012
2011
2012
Fair value
Gross unrealized
holding losses
Fair value
Gross unrealized
holding losses
Fair value
Gross unrealized
holding losses
¥2,020
¥(236)
¥862
¥(254)
$24,634
$(2,878)
(*) In regards to the gross unrealized holding losses of available-for-sale securities, the related securities have been at a loss position for a relatively short period of
time. Based on this fact and other relevant factors, management has determined that these investments are not considered other-than-temporarily impaired.
Proceeds from sales of available-for-sale securities were ¥415
Aggregate cost of nonmarketable equity securities accounted
million ($5,061 thousand), ¥106 million, and ¥938 million for the
for under the cost method totaled ¥4,514 million ($55,049
years ended March 31, 2012, 2011, and 2010, respectively.
thousand) and ¥4,489 million at March 31, 2012 and 2011, respec-
Gross realized gains on sales were ¥318 million ($3,878 thousand),
tively. Investments with an aggregate cost of ¥4,510 million
¥20 million, and ¥592 million for the years ended March 31, 2012,
($55,000 thousand) and ¥4,489 million at March 31, 2012 and
2011, and 2010, respectively.
2011, respectively, were not evaluated for impairment because (a)
There were no realized losses on sales for the year ended
the Companies did not estimate the fair value of those invest-
March 31, 2012 and 2010. Realized losses on sales were ¥3
ments as it was not practicable to do so and (b) the Companies
million for the years ended March 31, 2011.
did not identify any events or changes in circumstances that
Losses on impairment of available-for-sale securities recog-
might have had a significant adverse effect on the fair value of
nized to reflect declines in market value considered to be other
those investments.
than temporary were ¥384 million ($4,683 thousand), ¥790
million, and ¥517 million for the years ended March 31, 2012,
2011, and 2010, respectively.
5. Notes and accounts receivables
The companies have entered into different types of transactions with affiliated companies through the ordinary course of
business.
The amount of accounts receivable with affiliates resulting from these transactions was ¥2,484 million ($30,393 thousand) for
the year ended March 31, 2012.
6. Goodwill and Other Intangible Assets
The components of acquired intangible assets, excluding goodwill, at March 31, 2012 and 2011, were as follows:
Intangible assets subject to amortization:
Software
Other
Total
Millions of yen
Thousands of U.S. dollars
2012
2011
2012
Gross amount
Accumulated
amortization
Gross amount
Accumulated
amortization
Gross amount
Accumulated
amortization
¥34,618
4,191
¥38,809
¥27,316
1,530
¥28,846
¥ 35,060
2,554
¥ 37,614
¥ 26,771
1,622
¥ 28,393
$422,171
51,109
$473,280
$333,122
18,658
$351,780
Aggregate amortization expense related to intangible assets was ¥3,462 million ($42,220 thousand), ¥3,889 million, and
¥4,775 million for the years ended March 31, 2012, 2011, and 2010, respectively.
Estimated amortization expense for the next five years ending March 31 is as follows:
Years ending March 31
2013
2014
2015
2016
2017
Intangible assets, not subject to amortization, at March 31, 2012 and 2011, were immaterial.
Millions of yen
Thousands of
U.S. dollars
¥3,718
2,806
1,540
791
296
$45,341
34,220
18,780
9,646
3,610
Millions of yen
2012
Industrial
Automation
Business
Electronic and
Mechanical
Components
Business
Automotive
Electronic
Components
Business
Social Systems
Solution and
Service Business
Healthcare
Business
Balance at beginning of year
Goodwill
Accumulated impairment loss
Total
Acquisition
Impairment
Sales of business entity
Foreign currency translation
adjustments and other
Balance at end of year
Goodwill
Accumulated impairment loss
Total
¥10,298
(9,406)
¥ 892
—
—
—
¥ 338
(265)
¥ 73
258
—
—
¥ 588
(588)
¥ —
—
—
—
(1)
17
—
10,297
(9,406)
¥ 891
613
(265)
¥ 348
588
(588)
¥ —
¥—
—
¥—
—
—
—
—
—
—
¥—
Other
Total
¥ 2,009
—
¥ 2,009
—
(2,009)
—
¥ 19,787
(16,813)
¥ 2,974
258
(2,009)
—
¥ 6,554
(6,554)
¥ —
—
—
—
—
—
16
6,554
(6,554)
¥ —
2,009
(2,009)
¥ —
20,061
(18,822)
¥ 1,239
Millions of yen
2011
Industrial
Automation
Business
Electronic and
Mechanical
Components
Business
Automotive
Electronic
Components
Business
Social Systems
Solution and
Service Business
Healthcare
Business
Balance at beginning of year
Goodwill
Accumulated impairment loss
Total
Acquisition
Impairment
Sales of business entity
Foreign currency translation
adjustments and other
Balance at end of year
Goodwill
Accumulated impairment loss
Total
¥10,361
(9,406)
¥ 955
—
—
—
¥ 343
(265)
¥ 78
—
—
—
¥ 588
(588)
¥ —
—
—
—
(63)
(5)
—
10,298
(9,406)
¥ 892
338
(265)
¥ 73
588
(588)
¥ —
¥ —
—
¥ —
—
—
—
—
—
—
¥ —
Other
Total
¥2,009
—
¥2,009
—
—
—
¥ 19,855
(16,813)
¥ 3,042
—
—
—
¥ 6,554
(6,554)
¥ —
—
—
—
—
—
(68)
6,554
(6,554)
¥ —
2,009
—
¥2,009
19,787
(16,813)
¥ 2,974
Thousands of U.S. dollars
2012
Balance at beginning of year
Goodwill
Accumulated impairment loss
Total
Acquisition
Impairment
Sales of business entity
Foreign currency translation
adjustments and other
Balance at end of year
Goodwill
Accumulated impairment loss
Total
Industrial
Automation
Business
Electronic and
Mechanical
Components
Business
Automotive
Electronic
Components
Business
Social Systems
Solution and
Service Business
Healthcare
Business
Other
Total
$ 125,585
(114,707)
$ 10,878
—
—
—
$ 4,122
(3,232)
$ 890
3,146
—
—
$ 7,171
(7,171)
$ —
—
—
—
(12)
207
—
125,573
(114,707)
$ 10,866
7,475
(3,232)
$ 4,244
7,171
(7,171)
$ —
$—
—
$—
—
—
—
—
—
—
$—
$ 79,927
(79,927)
$ —
—
—
—
$ 24,500
—
$ 24,500
—
(24,500)
—
$ 241,305
(205,037)
$ 36,268
3,146
(24,500)
—
—
—
195
79,927
(79,927)
$ —
24,500
(24,500)
$ —
244,646
(229,537)
$ 15,110
106
Omron Corporation
Integrated Report 2012
107
In accordance with ASC No. 350, the Companies recognized impairment losses for the fiscal year ended March 31, 2012, of
¥2,009 million ($24,500 thousand) in other. Due to the increasing competition in the backlight business market, the fair value of the
associated reporting unit decreased. The impairment losses are included in “Other expenses, net” of the consolidated financial
statements of income. The fair value of the reporting unit was estimated by using the present value of expected future cash flows.
7. Impairment loss on Long-lived Assets
In accordance with ASC No. 360, “Property, Plant and Equip-
ment”, the Companies recognized impairment losses on long-
lived assets for the fiscal years ended March 31, 2012 of ¥534
million ($6,512 thousand) for impairment of property plant and
equipment due to decreasing profitability in the semiconductor-
related business in other, and ¥137 million ($1,671 thousand)
for impairment of office building due to its uncertainty of usage
since one of our subsidiaries relocated its head office.
The Companies recognized impairment losses on long-lived
assets for the fiscal year ended March 31, 2011, of ¥96 million
and ¥317 million in automotive electronic component business
and other, respectively.
These impairment losses are included in “Other expenses,
net” of consolidated statements of income.
Each of the fair value of these reporting units was estimated by
using their each present value of expected future cash flows.
8. Short-Term Debt
Short-term debt at March 31, 2012 and 2011, consisted of the following:
Commercial paper
The weighted-average annual interest rates
¥18,000
¥45,000
$219,512
Millions of yen
2012
2011
Thousands of
U.S. dollars
2012
2012
2011
0.1%
0.2%
Unsecured debt:
10. Termination and Retirement Benefits
The Company and its domestic subsidiaries sponsor termi-
nation and retirement benefit plans which cover substantially
all domestic employees (the “funded contributory termina-
tion and retirement plan in Japan”). Benefits were based on a
point-based benefits system, under which benefits are calcu-
lated based on accumulated points awarded to employees
each year according to their job classification and performance.
If the termination is involuntary, the employee is usually
entitled to greater payments than in the case of voluntary
termination.
The Company and its domestic subsidiaries fund a portion
of the obligation under these plans. The general funding policy
is to contribute amounts computed in accordance with
actuarial methods acceptable under Japanese tax law.
Obligations and Funded Status
The reconciliation of beginning and ending balances of the benefit obligations and the fair value of the plan assets at March
31, 2012 and 2011, are as follows:
Change in benefit obligation:
Benefit obligation at beginning of year
Service cost, less employees’ contributions
Interest cost
Actuarial loss
Benefits paid
Settlement paid
Benefit obligation at end of year
Change in plan assets:
Millions of yen
2012
2011
Thousands of
U.S. dollars
2012
¥166,874
¥164,857
$2,035,049
4,284
3,337
1,058
(5,804)
(737)
4,090
3,297
906
(5,562)
(714)
52,244
40,695
12,902
(70,780)
(8,988)
¥169,012
¥166,874
$2,061,122
The weighted-average annual interest rates
774
519
9,439
Fair value of plan assets at beginning of year
¥ 97,890
¥ 93,922
$1,193,780
2012
2011
Total
4.2%
3.1%
¥18,774
¥45,519
$228,951
Total interest cost incurred and charged to expense for the years ended March 31, 2012, 2011, and 2010, amounted to ¥269
million ($3,280 thousand), ¥219 million, and ¥381 million, respectively.
9. Leases
The Companies do not have any material capital lease
agreements.
The Companies have operating lease agreements primarily
involving offices and equipment for varying periods. Generally
leases that expire are expected to be renewed or replaced by
other leases. At March 31, 2012, future minimum lease payments
applicable to noncancelable leases having initial or remaining
noncancelable lease terms in excess of one year were as follows:
Actual return on plan assets
Employers’ contributions
Benefits paid
Settlement paid
3,511
9,515
(5,037)
(737)
305
9,262
(4,885)
(714)
Fair value of plan assets at end of year
¥105,142
¥ 97,890
Fair value of assets in retirement benefit trust at beginning of year
¥ 6,279
¥ 7,356
Actual return on assets in retirement benefit trust
328
(1,077)
42,817
116,037
(61,427)
(8,987)
$1,282,220
$ 76,573
4,000
Fair value of assets in retirement benefit trust at end of year
¥ 6,607
¥ 6,279
$ 80,573
Funded status at end of year
¥ (57,263)
¥ (62,705)
$ (698,329)
Years ending March 31
2013
2014
2015
2016
2017
Thereafter
Total
Millions of yen
Thousands of
U.S. dollars
¥ 4,166
$ 50,805
3,560
3,013
2,507
1,356
4,544
43,415
36,744
30,573
16,537
55,414
¥19,146
$233,488
Lease expense amounted to ¥13,207 million ($161,061 thousand), ¥12,425 million, and ¥12,507 million for the years ended
March 31, 2012, 2011, and 2010, respectively.
108
Omron Corporation
Integrated Report 2012
109
Amounts recognized in the consolidated balance sheets at March 31, 2012 and 2011, consist of:
Other current liability
Termination and retirement benefit
Total
Millions of yen
2012
¥ (628)
(56,635)
¥(57,263)
2011
¥ (902)
(61,803)
¥(62,705)
Thousands of
U.S. dollars
2012
$ (7,658)
(690,671)
$(698,329)
Amounts recognized in accumulated other comprehensive income (loss) at March 31, 2012 and 2011, consist of:
Net actuarial loss
Prior-service cost
Total
Millions of yen
2012
¥ 78,213
(12,296)
¥ 65,917
2011
¥ 80,558
(14,149)
¥ 66,409
The accumulated benefit obligation at March 31, 2012 and 2011, was as follows:
Millions of yen
2012
2011
Thousands of
U.S. dollars
2012
$ 953,817
(149,951)
$ 803,866
Thousands of
U.S. dollars
2012
Accumulated benefit obligation
¥164,669
¥163,061
$2,008,159
Components of Net Periodic Benefit Cost
The expense recorded for the contributory termination and retirement plans for the years ended March 31, 2012, 2011, and
2010, included the following components:
Service cost, less employees’ contributions
Interest cost on projected benefit obligation
Expected return on plan assets
Amortization
Net periodic benefit cost
2012
¥ 4,284
3,337
(3,482)
1,193
¥ 5,332
Millions of yen
2011
¥ 4,090
3,297
(3,349)
1,100
¥ 5,138
Thousands of
U.S. dollars
2012
$ 52,244
40,695
(42,463)
14,548
2010
¥ 3,978
3,259
(3,316)
873
¥ 4,794
$ 65,024
Weighted-average assumptions used to determine termination and retirement benefit costs for the years ended March 31,
2012, 2011, and 2010 are as follows:
Discount rate
Compensation increase rate
Expected long-term rate of return on plan assets
2012
2.0%
2.0%
3.0%
2011
2.0%
2.0%
3.0%
2010
2.0%
2.0%
3.0%
The expected return on plan assets is determined by estimating the future rate of return on each category of plan assets
considering actual historical returns and current economic trends and conditions.
Plan assets
The Company’s investment policies are designed to ensure
that adequate plan assets are available to provide future
payments of pension benefits to eligible participants. Taking
into account the expected long-term rate of return on plan
assets, the Company formulates a model portfolio composed
of the optimal combination of equity and debt securities in
order to yield a total return that will match the expected return
on a mid-term to long-term basis.
The Company evaluates the gap between long-term
expected return and actual return of invested plan assets to
determine if such differences necessitate a revision in the
formulation of the model portfolio. In the event that the
Company determines the need for a revision of the model
portfolio to accomplish the expected long-term rate of return
on plan assets, the Company revises the model portfolio to
the extent necessary.
Target allocation of plan assets is 20% equity securities,
69% debt securities and life insurance general account
assets, and 11% other. Equity securities are mainly composed
of stocks that are listed on various securities exchanges. The
Company has investigated the business condition of investee
companies and appropriately diversified the equity invest-
ments by type of industry, brand, and other relevant factors.
Debt securities are primarily composed of government bonds,
public debt instruments, and corporate bonds. The Company
has investigated the quality of the debt issue, including rating,
interest rate, and repayment dates and appropriately diversi-
fied the debt investments. For investments in life insurance
general account assets, contracts with the insurance compa-
nies include a guaranteed interest and return of capital.
The Company’s fair value of pension plan assets by asset category as of March 31, 2012 and 2011, are as follows:
Millions of yen
Thousands of U.S. dollars
2012
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
The unrecognized net actuarial loss and the prior-service benefit are being amortized over 15 years.
Equity securities
Domestic stocks(*1)
¥ 8,316
¥ —
¥ —
¥ 8,316
$101,415
$ — $ —
$ 101,415
The estimated net actuarial loss and prior-service benefit that will be amortized from accumulated other comprehensive
income (loss) into net periodic benefit cost for the year ending March 31, 2013, are summarized as follows:
Net actuarial loss
Prior-service cost
Millions of yen
¥ 3,251
¥(1,853)
Thousands of
U.S. dollars
$ 39,646
$(22,598)
Measurement Date
The Company and certain of its domestic subsidiaries use March 31 as the measurement date for projected benefit obligation
and plan assets of the termination and retirement benefits.
Assumptions
Weighted-average assumptions used to determine benefit obligations at March 31, 2012 and 2011, are as follows:
Discount rate
Compensation increase rate
110
Omron Corporation
2012
2.0%
2.0%
2011
2.0%
2.0%
Overseas stocks
1,712
Joint trusts (*2)
Debt securities
Joint trusts(*3)
Other assets
Life insurance general
account assets
Joint trusts
Others
Total
—
20,030
59,521
14,291
5,792
—
—
—
—
1,712
20,030
59,521
—
14,291
1,423
—
7,215
664
—
—
—
—
664
20,878
—
—
—
—
—
244,268
725,866
—
—
—
20,878
244,268
725,866
174,280
—
174,280
70,634
17,354
8,098
—
—
87,988
8,098
¥10,692
¥99,634
¥1,423
¥111,749
$130,391
$1,215,048
$17,354
$1,362,793
(*) 1. Domestic stocks of equity securities include ¥18 million ($220 thousand) of common stock of the Company as of March 31, 2012.
2. Joint trusts of equity securities invest in listed equity securities consisting of approximately 20% Japanese companies and 80% foreign companies.
3. Joint trusts of debt securities invest in approximately 60% Japanese government bonds and 40% foreign government bonds.
Integrated Report 2012
111
Millions of yen
2011
Level 1
Level 2
Level 3
Total
Equity securities
Domestic stocks
¥ 8,047
¥ —
¥ —
¥ 8,047
Overseas stocks
1,873
Joint trusts (*1,2)
Debt securities
Joint trusts (*3)
Other assets
Life insurance general
account assets
Joint trusts
Others
Total
—
17,539
56,560
14,097
5,102
—
—
—
—
—
367
—
1,873
17,539
56,560
14,097
5,469
584
—
—
—
—
584
¥10,504
¥93,298
¥367
¥104,169
(*) 1. Joint trusts of equity securities include ¥16 million of common stock of the Company as of March 31, 2011.
2. Joint trusts of equity securities invest in listed equity securities consisting of approximately 20% Japanese companies and 80% foreign companies.
3. Joint trusts of debt securities invest in approximately 60% Japanese government bonds and 40% foreign government bonds.
Level 1 assets are composed principally of equity securities
which are valued using unadjusted quoted market prices
in active markets with sufficient volume and frequency of
transactions.
Level 2 assets are composed principally of joint trusts and
life insurance general account assets that invest in equity and
debt securities. These joint trusts and insurance general
account assets are valued at their net asset values.
Level 3 assets are composed of private equities and real
estate funds, which are valued at net asset value.
The Company’s pension plan assets classified as Level 3 as of March 31, 2012 and 2011, are as follows:
Millions of yen
2012
2011
Thousands of U.S. dollars
2012
Private
equity
Hedge
fund
Real estate
fund
Total
Private
equity
Hedge
fund
Real estate
fund
Total
Private
equity
Hedge
fund
Real estate
fund
Total
¥367
¥—
¥ —
¥367
¥347
¥ 508
¥—
¥ 855
$4,476
$—
$ — $4,476
0
—
13
—
—
—
7
—
7
—
1
—
—
(140)
1,036
1,049
19
(368)
—
¥380
—
¥—
—
—
—
—
¥1,043
¥1,423
¥367
¥ —
—
—
—
—
¥—
1
(140)
0
—
(349)
159
—
—
—
85
—
85
—
12,634
12,793
—
—
—
—
—
¥ 367
$4,635
$— $12,719 $17,354
Balance at beginning
of year
Total gain and loss
(realized or unrealized)
Current period’s
holding
Current period’s sale
Purchase, issuance,
and settlement
Current period’s
transfer to (from)
Level 3
Balance at end of year
Cash Flows
Contributions
The Companies expect to contribute ¥9,685 million ($118,110 thousand) to their domestic termination and retirement benefit
plans in the year ending March 31, 2013.
Benefit Payments
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
Years ending March 31
2013
2014
2015
2016
2017
2018—2022
Millions of yen
Thousands of
U.S. dollars
¥ 6,668
$ 81,317
6,935
7,270
7,057
7,168
84,573
88,659
86,061
87,415
39,105
476,890
Certain employees of European subsidiaries are covered by
a defined benefit pension plan. The projected benefit obliga-
tion for the plan and related fair value of plan assets were
¥4,672 million ($56,976 thousand) and ¥3,844 million ($46,878
thousand), respectively, at March 31, 2012, and ¥3,424 million
and ¥2,872 million, respectively, at March 31, 2011.
The Companies also have unfunded noncontributory termi-
nation plans administered by the Companies. These plans
provide lump-sum termination benefits which are paid at the
earlier of the employee’s termination or mandatory retirement
age, except for payments to directors and corporate auditors
which require approval by the shareholders before payment.
11. Shareholders’ Equity
Japanese companies are subject to Japanese Corporate
Law (the “Corporate Law”).
The Corporate Law requires that all shares of common stock
be issued with no par value and at least 50% of the issue price
of new shares is required to be recorded as common stock
while the remaining net proceeds are required to be presented
as additional paid-in capital, which is included in capital surplus.
The Corporate Law permits Japanese companies, upon
approval of the board of directors, to issue shares to existing
shareholders without consideration by way of a stock split.
Such issuance of shares generally does not give rise to changes
within the shareholders’ accounts.
The Corporate Law also requires that an amount equal to
10% of dividends must be appropriated as a legal reserve or as
additional paid-in capital (a component of capital surplus)
depending on the equity account charged upon the payment of
such dividends until the total of aggregate amount of legal
reserve and additional paid-in capital equals 25% of the
common stock. Under the Corporate Law, the total amount of
additional paid-in capital and legal reserve may be reversed
The Companies record provisions for termination benefits
sufficient to state the liability equal to the plans’ vested
benefits, which exceed the plans’ projected benefit obliga-
tions.
The aggregate liability for the termination plans, excluding
the funded contributory termination and retirement plan in
Japan, as of March 31, 2012 and 2011, was ¥3,845 million
($46,890 thousand) and ¥4,450 million, respectively. The aggre-
gate net periodic benefit cost for such plans for the years ended
March 31, 2012, 2011, and 2010, was ¥574 million ($7,000
thousand), ¥346 million, and ¥515 million, respectively.
without limitation of such threshold. The Corporate Law also
provides that common stock, legal reserve, additional paid-in
capital, other capital surplus, and retained earnings can be
transferred among the accounts under certain conditions upon
resolution of the shareholders.
The Corporate Law also provides for companies to purchase
treasury stock and dispose of such treasury stock by resolution
of the board of directors. The amount of treasury stock
purchased cannot exceed the amount available for distribution
to the shareholders which is determined by a specific formula.
Under the Corporate Law, companies can pay dividends at
any time during the fiscal year in addition to the year-end
dividend upon resolution at the shareholders’ meeting. For
companies that meet certain criteria, such as; (1) having the
board of directors; (2) having independent auditors; (3) having
the Board of Corporate Auditors; and (4) the term of service of
the directors is prescribed as one year rather than two years of
normal term by its articles of incorporation, the board of direc-
tors may declare dividends (except for dividends in kind) if the
company has prescribed so in its articles of incorporation.
112
Omron Corporation
Integrated Report 2012
113
The Corporate Law permits companies to distribute
dividends in kind (noncash assets) to shareholders subject to
a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year
upon resolution of the board of directors if it is stipulated by
the articles of incorporation of the company. Under the Corpo-
rate Law, certain limitations were imposed on the amount of
capital surplus and retained earnings available for dividends.
The Corporate Law also provides certain limitations on the
amounts available for dividends or the purchase of treasury
stock. The limitation is defined as the amount available for
distribution to the shareholders, but the amount of net assets
after dividends must be maintained at no less than ¥3 million.
Such amount available for the dividends under the Corporate
Law was ¥58,699 million ($715,841 thousand) at March 31,
2012, based on the amount recorded in the Company’s
general book of accounts.
Stock Options
The Company has authorized the granted options to purchase
common stock of the Company to certain directors and execu-
tive officers of the Company under a fixed stock option plan.
Under the above-mentioned plan, the exercise price of each
option exceeded the market price of the Company’s common
stock on the date of grant and the options expire five years
after the date of the grant. Generally, options become fully
vested and exercisable after two years. A summary of the
Company’s fixed stock option plan activity and related informa-
tion for the year ended March 31, 2012, are as follows:
Fixed options
Options outstanding at March 31, 2009
Granted
Exercised
Expired
Options outstanding at March 31, 2010
Granted
Exercised
Expired
Options outstanding at March 31, 2011
Granted
Exercised
Expired
Options outstanding at March 31, 2012
Options exercisable at March 31, 2012
Fixed options
Options outstanding at March 31, 2011
Granted
Exercised
Expired
Options outstanding at March 31, 2012
Options exercisable at March 31, 2012
Shares (number)
Weighted-average
exercise price
838,000
¥2,930
Unit: Yen
Weighted-average fair
value of options granted
during the year
¥ —
¥ —
¥ —
—
—
(179,000)
659,000
—
—
(205,000)
454,000
—
—
(217,000)
237,000
237,000
—
—
2,580
¥3,026
—
—
2,550
¥3,240
—
—
3,031
¥3,432
¥3,432
Unit: U.S. dollars
Weighted-average fair
value of options granted
during the year
$ —
Shares (number)
Weighted-average
exercise price
454,000
$39.51
—
—
(217,000)
237,000
237,000
—
—
36.96
$41.85
$41.85
The fixed stock options at March 31, 2012 are as follows:
Options outstanding
Options exercisable
Shares (number)
237,000
237,000
Weighted-average
remaining
contractual life
0.25 years
0.25 years
Range of exercise prices
Weighted-average exercise price
Yen
U.S. dollars
Yen
U.S. dollars
¥3,432
¥3,432
$41.85
$41.85
¥3,432
¥3,432
$41.85
$41.85
No fixed stock options were granted for the years ended March 31, 2012, 2011, and 2010.
The Black-Scholes option-pricing model used by the
Company was developed for use in estimating the fair value
of fully tradable options, which have no vesting restrictions
and are fully transferable. Additionally, option valuation models
require the input of highly subjective assumptions, including
the expected stock price volatility. It is management’s opinion
that the Company’s stock options have characteristics signifi-
cantly different from those of traded options and because
changes in the subjective input assumptions can materially
affect the fair value estimate, the existing models do not
necessarily provide a reliable single measure of the fair value
of its stock options.
There was no cash received from exercise of options under
the plan for the year ended March 31, 2012. When options are
exercised, the Company reissues its treasury stock.
12. Other Expenses, net
Other expenses, net, for the years ended March 31, 2012, 2011, and 2010, consisted of the following:
Net loss on sales and disposals of property,
plant, and equipment
Loss on impairment of goodwill
Loss on impairment of property, plant, and equipment
Cost for quality control
Cost for environmental remediation
Loss on impairment of investment securities
Net gain on sales of investment securities
Interest income, net
Foreign exchange loss, net
Dividend income
Net loss on sales of business entity
Other, net
Total
Millions of yen
2012
2011
2010
Thousands of
U.S. dollars
2012
¥ 861
2,009
671
330
567
391
(307)
(204)
1,195
(545)
—
1,621
¥6,589
¥ 606
¥ 558
$10,500
—
413
2,874
—
805
(7)
47
2,102
(538)
—
42
¥6,344
—
217
—
—
632
(636)
(72)
723
(609)
966
24,500
8,183
4,024
6,915
4,768
(3,744)
(2,488)
14,573
(6,646)
—
1,100
¥2,879
19,768
$80,353
114
Omron Corporation
Integrated Report 2012
115
13. Income Taxes
The provision for income taxes for the years ended March 31, 2012, 2011, and 2010, consisted of the following:
Current income tax expense
Deferred income tax expenses, exclusive of the following
Change in the valuation allowance
Change in the effective statutory tax rates
2012
¥ 7,845
4,802
(167)
5,346
Millions of yen
2011
¥ 9,113
5,640
(266)
—
Thousands of
U.S. dollars
2012
$ 95,671
58,561
(2,037)
65,195
2010
¥4,813
(904)
(127)
—
Total
¥17,826
¥14,487
¥3,782
$217,390
Amendments to the Japanese tax regulations were enacted into law on November 30, 2011. As a result of these amend-
ments, the statutory income tax rate will be reduced from approximately 41% to 38% effective April 1, 2012, and then further
reduced to approximately 36% effective April 1, 2015.
Total amount of income taxes for the years ended March 31, 2012, 2011, and 2010, respectively, are allocated to the following items:
“Income Taxes” in consolidated statement of income
Accumulated other comprehensive income (loss)
Foreign currency translation adjustments
Pension liability adjustments
Unrealized gains (losses) on available-for-sale securities
Net gains (losses) on derivative instruments
2012
¥17,826
(257)
(1,377)
(106)
(32)
Millions of yen
2011
¥14,487
(88)
(94)
(2,496)
36
Thousands of
U.S. dollars
2012
$217,390
(3,134)
(16,792)
(1,293)
(390)
2010
¥ 3,782
72
2,792
3,420
383
Total
¥16,054
¥11,845
¥10,449
$195,781
The Company and its domestic subsidiaries are subject to a
number of taxes based on income, which in the aggregate
resulted in a normal tax rate of approximately 41.0% in 2012,
2011, and 2010.
The effective income tax rates of the Companies differ from
the normal Japanese statutory rates for the years ended
March 31, 2012, 2011, and 2010, as follows:
Japanese statutory effective tax rates
Increase (decrease) in taxes resulting from
permanently nondeductible items
Tax credit for research and development expenses
Losses of subsidiaries for which no tax benefit was provided
Difference in subsidiaries’ tax rates
Change in the valuation allowance
Impairment of goodwill
Change in the effective statutory tax rates
Other, net
Income taxes burden rates after the application of tax effect accounting
2012
41.0%
2011
41.0%
2010
41.0%
1.1
(0.6)
1.5
(11.5)
(0.5)
2.5
15.9
3.7
53.1
2.0
(0.4)
1.1
(10.2)
(0.6)
—
—
1.8
34.7
1.1
(3.5)
2.3
(3.6)
(0.9)
—
—
0.7
37.1
The approximate effect of temporary differences and tax credit and loss carryforwards that gave rise to deferred tax balances
at March 31, 2012 and 2011, were as follows:
Millions of yen
Thousands of U.S. dollars
2012
2011
2012
Deferred
tax assets
Deferred
tax liabilities
Deferred
tax assets
Deferred
tax liabilities
Deferred
tax assets
Deferred
tax liabilities
Inventory valuation
¥ 5,730
¥ —
¥ 5,687
¥ —
$ 69,878
$ —
Accrued bonuses and vacations
Termination and retirement benefits
Marketable securities
Property, plant, and equipment
Other temporary differences
Tax credit carryforwards
Operating loss carryforwards
5,161
23,918
—
1,427
14,831
3,800
11,266
—
—
2,775
—
2,899
—
—
5,990
29,646
—
—
62,939
291,683
—
—
—
3,490
—
33,841
2,122
17,658
4,990
9,352
—
807
—
—
17,402
180,867
46,341
137,390
—
35,354
—
—
Subtotal
¥66,133
¥5,674
¥75,445
¥4,297
$ 806,500
$69,195
Valuation allowance
(8,802)
—
(9,639)
—
(107,341)
—
Total
¥57,331
¥5,674
¥65,806
¥4,297
$ 699,159
$69,195
The total valuation allowance decreased by ¥837 million
($10,207 thousand) and ¥137 million in 2012 and 2011,
respectively.
As of March 31, 2012 and 2011, the Companies had
operating loss carryforwards corporate tax approximating
¥13,822 million ($168,561 thousand) and ¥11,440 million,
respectively, part of local tax approximating ¥12,338 million
($150,463 thousand) and ¥10,430 million, respectively, avail-
able for reduction of future taxable income, the majority of
which would expire by 2016.
The Company has not provided for Japanese income taxes
on unremitted earnings of certain foreign subsidiaries to the
extent that they are believed to be indefinitely reinvested. The
accumulated unremitted earnings of the foreign subsidiaries
which the Company has not recognized deferred tax liabilities
were ¥88,417 million ($1,078,256 thousand) and ¥78,769
14. Per Share Data
The Company accounts for its net income per share in
accordance with ASC No. 260, “Earnings per share”. Basic net
income per share has been computed by dividing net income
available to common shareholders by the weighted-average
number of common shares outstanding during each year.
Diluted net income per share reflects the potential dilution of
million at March 31, 2012 and 2011, respectively. Dividends
received from domestic subsidiaries are expected to be
substantially free of tax.
The Companies have adopted ASC No. 740, “Income Taxes”.
The Companies believe that the total amount of unrecognized
tax benefits as of March 31, 2012, is not material to its result
of operations, financial condition, or cash flows.
The Companies recognize interest and penalties accrued
related to unrecognized tax benefits in income taxes in the
consolidated statements of income.
The Companies file income tax returns in Japanese and
foreign jurisdictions. With few exceptions, tax examinations in
Japan, for years prior to March 31, 2009, have been finished.
With few exceptions, tax examinations in foreign countries,
for years prior to March 31, 2003, have been finished.
convertible bonds and stock options and has been computed
by the “if-converted” method for convertible bonds and by
the treasury stock method for stock options.
A reconciliation of the numerators and denominators of the
basic and diluted net income per share computations as of
March 31, 2012, 2011, and 2010, was as follows:
116
Omron Corporation
Integrated Report 2012
117
Numerator
Net income attributable to Shareholders
Diluted Net income attributable to shareholders
2012
¥16,389
¥16,389
Millions of yen
2011
¥26,782
¥26,782
2010
¥3,518
¥3,518
Thousands of
U.S. dollars
2012
$199,866
$199,866
Denominator
2012
2011
2010
Weighted-average common shares outstanding
220,093,275
220,131,599
220,158,389
Dilutive effect of:
Stock options
—
—
—
Diluted common shares outstanding
220,093,275
220,131,599
220,158,389
15. Supplemental Information for Cash Flows
Supplemental cash flow information for the years ended March 31, 2012, 2011, and 2010, was as follows:
Interest paid
Income taxes paid
Noncash investing and financing activities
2012
¥ 269
9,409
Millions of yen
2011
¥ 482
9,636
2010
¥ 652
2,813
Thousands of
U.S. dollars
2012
$ 3,280
114,744
Liabilities assumed in connection with capital expenditures
2,682
1,843
299
32,707
16. Other Comprehensive Income (Loss)
The change in each component of accumulated other comprehensive income (loss) for the years ended March 31, 2011, 2010,
and 2009, was as follows:
Foreign currency translation adjustments:
Beginning balance
Change for the year
Ending balance
Pension liability adjustments:
Beginning balance
Change for the year
Ending balance
Unrealized gains (losses) on available-for-sale securities:
Beginning balance
Change for the year
Ending balance
Net gains (losses) on derivative instruments:
Beginning balance
Change for the year
Ending balance
Total accumulated other comprehensive loss:
Beginning balance
Change for the year
Ending balance
2012
Millions of yen
2011
2010
Thousands of
U.S. dollars
2012
¥(34,046)
¥(23,678)
¥(22,319)
$(415,195)
(2,498)
(36,544)
(38,736)
(79)
(38,815)
6,570
425
6,995
(15)
(54)
(69)
(10,368)
(34,046)
(36,553)
(2,183)
(38,736)
7,684
(1,114)
6,570
(67)
52
(15)
(1,359)
(23,678)
(40,570)
4,017
(36,553)
2,763
4,921
7,684
(618)
551
(67)
(30,464)
(445,659)
(472,390)
(964)
(473,354)
80,122
5,183
85,305
(182)
(658)
(840)
(66,227)
(2,206)
(52,614)
(13,613)
(60,744)
8,130
(807,645)
(26,903)
¥(68,433)
¥(66,227)
¥(52,614)
$(834,548)
Tax effects allocated to each component of other comprehensive income (loss), including other comprehensive income (loss)
attributable to noncontrolling interests and reclassification adjustments for the years ended March 31, 2012, 2011, and 2010,
were as follows:
2012
Millions of yen
2011
2010
Before-tax
Tax (expense)
Net-of-tax
Before-tax
Tax (expense)
Net-of-tax
amount
benefit
amount
amount
benefit
amount
Before-tax
amount
Tax (expense)
benefit
Net-of-tax
amount
¥(1,870)
¥ 257
¥(1,613)
¥(10,464)
¥ 88
¥(10,376) ¥ (1,328)
¥ (72)
¥(1,400)
(892)
—
(892)
(14)
—
(14)
—
—
—
(2,762)
257
(2,505)
(10,478)
88
(10,390)
(1,328)
(72)
(1,400)
(263)
888
625
(1,177)
(357)
(1,534)
7,681
(3,150)
4,531
Pension liability Adjustments
(1,456)
1,377
(79)
(2,277)
(1,193)
489
(704)
(1,100)
451
94
(649)
(872)
358
(514)
(2,183)
6,809
(2,792)
4,017
379
81
460
(4,376)
2,810
(1,566)
8,417
(3,451)
4,966
384
(157)
227
789
(323)
466
516
(212)
304
(318)
130
(188)
(17)
(126)
319
52
106
(74)
425
(6)
(3,610)
2,496
(1,114)
8,341
(3,420)
4,921
7
2
(10)
(592)
243
(349)
(4)
—
—
—
11
(8)
3
1,514
(621)
893
1,250
(513)
737
(97)
(86)
40
32
(57)
(54)
(1,426)
88
585
(36)
(841)
52
(316)
934
130
(383)
(186)
551
¥(3,985)
¥1,772
¥(2,213)
¥(16,277)
¥2,642
¥(13,635)
¥14,756
¥(6,667)
¥ 8,089
Foreign currency translation
adjustments:
Foreign currency translation
adjustments arising during
the year
Reclassification adjustment
for the portion realized in
net income
Net change in foreign currency
translation adjustments
during the year
Pension liability adjustments:
Pension liability adjustments
arising during the year
Reclassification adjustment
for the portion realized in
net income
Unrealized gains (losses) on
available-for-sale securities:
Unrealized holding gains
(losses) arising during the year
Reclassification adjustment
for losses on impairment in
net income
Reclassification adjustment for
net gains on sales in net income
Reclassification adjustment
for net gains on share
exchange in net income
Net unrealized gains (losses)
Net gains (losses) on
derivative instruments:
Net gains (losses) on derivative
instruments designated as
cash flow hedges during
the year
Reclassification adjustment
for net gains (losses)
realized in net income
Net gains (losses)
Other comprehensive
income (losses)
118
Omron Corporation
Integrated Report 2012
119
Foreign currency translation
adjustments:
Foreign currency translation
adjustments arising during the year
Reclassification adjustment for the
portion realized in net income
Net change in foreign currency
translation adjustments during
the year
Pension liability adjustments:
Pension liability adjustments arising
during the year
Reclassification adjustment for the
portion realized in net income
Thousands of U.S. dollars
2012
Before-tax
Tax (expense)
Net-of-tax
amount
benefit
amount
$(22,805)
$3,134 $(19,671)
(10,878)
— (10,878)
(33,683)
3,134
(30,549)
(3,207)
10,829
7,622
(14,549)
5,963
(8,586)
Pension liability Adjustments
(17,756)
16,742
(964)
Unrealized gains (losses) on
available-for-sale securities:
Unrealized holding gains (losses)
arising during the year
Reclassification adjustment for
losses on impairment in net income
Reclassification adjustment for
net gains on sales in net income
Reclassification adjustment for
net gains on share exchange
in net income
Net unrealized gains (losses)
Net gains (losses) on
derivative instruments:
Net gains (losses) on derivative
instruments designated as cash flow
hedges during the year
Reclassification adjustment for
net gains (losses) realized in
net income
Net gains (losses)
Other comprehensive income
(losses)
4,622
988
5,610
4,683
(1,915)
2,768
(3,878)
1,585
(2,293)
(1,537)
3,890
635
1,293
(902)
5,183
134
(97)
37
(1,182)
(1,048)
487
390
(695)
(658)
$(48,597)
$21,609 $(26,988)
The following methods and assumptions were used to estimate the fair values of each class of financial instruments for which
it is practicable to estimate its value:
Nonderivatives
(1) Cash and cash equivalents, notes and accounts receivable,
short-term debt, and notes and accounts payable:
The carrying amounts approximate fair values.
Derivatives
The fair value of derivatives generally reflects the estimated
amounts that the Companies would receive or pay to termi-
nate the contracts at the reporting date, thereby taking
into account the current unrealized gains or losses of open
contracts. Dealer quotes are available for most of the
18. Derivatives and Hedging Activities
The Companies enter into foreign exchange forward
contracts and combined purchased and written foreign
currency swaps to hedge changes in foreign currency rates
(primarily the U.S. dollar and the euro). The Companies enter
into interest rate swaps to hedge changes in interest rates.
The Companies enter into commodities swaps to hedge
changes in prices of commodities, including copper and silver
used in the manufacturing of various products. The Companies
do not use derivatives for trading purposes. The Companies
are exposed to credit risk in the event of nonperformance by
counterparties to derivatives, but management considers the
exposure to such risk to be minimal since the counterparties
maintain good credit ratings.
(2) Investment securities (see Note 4):
The fair values are estimated based on quoted market prices
or dealer quotes for marketable securities or similar instru-
ments. Certain equity securities included in investments
have no readily determinable public market value and it is not
practicable to estimate their fair values.
Companies’ derivatives. For the rest of the Companies’ deriv-
atives, pricing or valuation models are applied to current
market information to estimate fair value. The Companies do
not use derivatives for trading purposes.
Changes in the fair value of foreign exchange forward
contracts, and foreign currency swaps designated and quali-
fying as cash flow hedges are reported in accumulated other
comprehensive income (loss). These amounts are subse-
quently reclassified into other expenses, net, in the same
period as and when the hedged items affect earnings. Changes
in the fair value of commodities swaps designated and quali-
fying as cash flow hedges are reported in accumulated other
comprehensive income (loss) and are subsequently reclassi-
fied into cost of sales, net, in the same period as and when the
hedged items affect earnings. Substantially, all of the accumu-
lated other comprehensive income (loss) in relation to foreign
exchange forward contracts, foreign currency swaps, and
commodities swaps at March 31, 2012, is expected to be
reclassified into earnings within 12 months.
The notional amounts of outstanding contracts to exchange foreign currencies at March 31, 2012 and 2011, were as follows:
Millions of yen
2012
¥49,095
¥ 1,200
¥ —
2011
¥43,184
¥ 1,200
¥ 1,307
Thousands of
U.S. dollars
2012
$598,720
$ 14,634
$ —
17. Financial Instruments and Risk Management
Fair Value of Financial Instruments
The carrying amounts and estimated fair values as of March 31, 2012 and 2011, of the Companies’ financial instruments are
as follows:
Forward exchange contracts
Foreign currency swaps
Commodities swaps
Millions of yen
Thousands of U.S. dollars
2012
2011
2012
Carrying amount
Fair value
Carrying amount
Fair value
Carrying amount
Fair value
Derivatives
Included in other current assets (liabilities)
Forward exchange contracts
¥(703)
¥(703)
¥(340)
¥(340)
$(8,573)
$(8,573)
Foreign currency swaps
Commodities swaps
(16)
—
(16)
—
(27)
198
(27)
198
(195)
—
(195)
—
120
Omron Corporation
Integrated Report 2012
121
The fair values of derivatives at March 31, 2012 and 2011, were as follows:
Derivatives designated as hedges
Assets
Forward exchange contracts
Commodities swaps
Liabilities
Forward exchange contracts
Foreign currency swaps
Commodities swaps
Millions of yen
2012
¥394
¥ —
Millions of yen
2012
¥(1,096)
¥ (16)
¥ —
2011
¥254
¥213
2011
¥(594)
¥ (27)
¥ (15)
Thousands of
U.S. dollars
2012
$4,805
$ —
Thousands of
U.S. dollars
2012
$(13,366)
$ (195)
$ —
The effects on consolidated statements of operations for the year ended March 31, 2012, were as follows:
Derivatives designated as hedges
Cash flow hedge
Forward exchange contracts
Foreign currency swaps
Commodities swaps
Profit and loss of other
comprehensive income (loss)
(hedge effective portion)
Transfer from other comprehensive
income (loss) to profit and loss
(hedge effective portion)
Millions of yen
Thousands of
U.S. dollars
Millions of yen
Thousands of
U.S. dollars
¥ 6
¥ 8
¥(11)
2012
$ 73
$ 98
$(134)
¥ 89
¥ 0
¥(146)
$ 1,085
$ 0
$(1,780)
The amount of hedge ineffectiveness was not material.
The effects on consolidated statements of income for the year ended March 31, 2011, were as follows:
Derivatives designated as hedges
Cash flow hedge
Forward exchange contracts
Foreign currency swaps
Interest rate swap
Commodities swaps
The amount of hedge ineffectiveness was not material.
Profit and loss of other
comprehensive income (loss)
(hedge effective portion)
Transfer from other comprehensive
income (loss) to profit and loss
(hedge effective portion)
Millions of yen
2011
¥738
¥ —
¥ 39
¥117
¥(841)
¥ —
¥ —
¥ —
19. Commitments and Contingent Liabilities
The Company and certain of its subsidiaries are defendants
in several pending lawsuits. However, based upon the infor-
mation currently available to both the Company and its legal
counsel, management of the Company believes that damages
from such lawsuits, if any, would not have a material effect on
the consolidated financial statements.
Concentration of Credit Risk
Financial instruments that potentially subject the Compa-
nies to concentrations of credit risk consist principally of
short-term cash investments and trade receivables. The
Companies place their short-term cash investments with high
credit quality financial institutions. Concentrations of credit
risk with respect to trade receivables, as approximately 48%
of total sales are concentrated in Japan, are limited due to the
large number of well-established customers and their disper-
sion across many industries. The Company normally requires
customers to deposit funds to serve as security for ongoing
credit sales.
Balance at beginning of year
Addition
Utilization
Balance at end of year
20. Fair Value Measurements
ASC No. 820, “Fair Value Measurements and Disclosures,”
defines fair value as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. ASC
No. 820 establishes a three-level fair value hierarchy that
prioritizes the inputs used to measure fair value as follows:
Guarantees
The Company provides guarantees for bank loans of other
companies. The guarantees for the other companies are
made to ensure that those companies operate with less
finance costs. The maximum payment in the event of default
at March 31, 2012 and 2011, is ¥185 million ($2,256 thousand)
and ¥246 million, respectively. The carrying amount of the
liability recognized under those guarantees at March 31, 2012
is immaterial.
Cost for Environmental Remediation
The Companies record an environmental remediation
accrual when the probability of the accrual is probable and the
amount can reasonably be estimated. As of March 31, 2012,
the environmental remediation accrual is ¥567 million ($6,915
thousand).
Product Warranties
The Companies issue contractual product warranties under
which they generally guarantee the performance of products
delivered and services rendered for a certain period or term.
Changes in accrued product warranty cost for the years ended
March 31, 2012 and 2011, are summarized as follows:
Millions of yen
2012
¥ 3,951
1,237
(2,256)
¥ 2,932
2011
¥ 1,437
3,913
(1,399)
¥ 3,951
Thousands of
U.S. dollars
2012
$ 48,183
15,085
(27,512)
$ 35,756
Level 1 — Inputs are quoted prices in active markets for
identical assets or liabilities.
Level 2 — Inputs are quoted prices for similar assets or liabil-
ities in active markets, quoted prices for identical
or similar assets or liabilities in markets that are
not active, inputs other than quoted prices that are
observable, and inputs that are derived principally
from or corroborated by observable market data by
correlation or other means.
Level 3 — Inputs are significant to measure fair value of
assets or liabilities and unobservable.
122
Omron Corporation
Integrated Report 2012
123
The assets and liabilities that are measured at fair value on a recurring basis at March 31, 2012, are as follows:
Investment securities
Millions of yen
Thousands of U.S. dollars
Amount of Fair Value Measurements
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
¥ 10
31,512
¥ —
—
¥—
—
¥ 10
31,512
$ 122
384,293
$ —
—
$— $ 122
384,293
—
Investment securities mainly consist of listed stocks. Since fair value of the investment securities is valued using a quoted
market price in active markets for identical assets and can be observed, these are classified as Level 1.
Derivatives
Derivatives consist of foreign exchange forward contracts, foreign currency swaps, and commodity futures. Since fair value
of derivatives is valued using the observable market data, such as foreign exchange rates or interest rates, these are classified
as Level 2.
402
—
4,902
—
4,902
The assets and liabilities that are measured at fair value on a nonrecurring basis at March 31, 2011, are as follows:
Assets
Investment securities
Debt securities
Equity securities
Derivative
Foreign exchange
forward contracts
Liabilities
Derivative
Foreign exchange
forward contracts
Foreign currency
swaps
Investment securities
—
—
—
402
1,105
16
—
—
—
1,105
16
—
—
13,476
195
—
—
13,476
195
Investment securities mainly consist of publicly listed stocks. Since fair value of the investment securities is valued using a
quoted market price in active markets for identical assets and can be observed, these are classified as Level 1.
Derivatives
Derivatives consist of foreign exchange forward contracts, foreign currency swaps, and commodity futures. Since fair value
of derivatives is valued using the observable market data, such as foreign exchange rates or interest rates, these are classified
as Level 2.
The assets and liabilities that are measured at fair value on a nonrecurring basis at March 31, 2012, are as follows:
Total amount of
income (loss)
Level 1
Level 2
Level 3
Total
Total amount of
income (loss)
Level 1
Level 2
Level 3
Total
Millions of yen
Thousands of U.S. dollars
Amount of Fair Value Measurements
Assets
Nonmarketable
investment
securities
Long-lived assets
Goodwill
¥ (6)
(671)
(2,009)
¥—
—
—
¥—
—
—
¥ 4
224
—
¥ 4
224
—
$ (73)
(8,183)
(24,500)
$—
—
—
$—
—
—
$ 49
2,732
—
$ 49
2,732
—
During the year ended March 31, 2012, the Company classified most of assets described above in Level 3 as the Company
used unobservable inputs to value these assets when recognizing impairment losses related to the assets. The fair value for the
major assets was measured through discounted future cash flows.
The assets and liabilities that are measured at fair value on a recurring basis at March 31, 2011, are as follows:
Amount of Fair Value Measurements
Millions of yen
Level 1
Level 2
Level 3
Total
Assets
Investment securities
Debt securities
Equity securities
Derivative
Foreign exchange
forward contracts
Commodities swaps
Liabilities
Derivative
Foreign exchange
forward contracts
Foreign currency
swaps
Commodities swaps
¥ 10
31,045
—
—
—
—
—
124
Omron Corporation
¥ —
—
254
213
594
27
15
¥ —
—
¥ 10
31,045
—
—
—
—
—
254
213
594
27
15
Amount of Fair Value Measurements
Millions of yen
Total amount of
income (loss)
Level 1
Level 2
Level 3
Total
Assets
Nonmarketable
investment
securities
¥ (5)
Long-lived assets
(413)
¥—
—
¥—
—
¥ 2
¥ 2
137
137
During the year ended March 31, 2011, the Company classified most of the assets described above in Level 3 as the Company
used unobservable inputs to value these assets when recognizing impairment losses related to the assets. The fair value for the
major assets was measured through discounted future cash flows.
21. Segment Information
Operating segment information
ASC No. 280, “Segment Reporting,” establishes the disclosure
of information about operating segments in financial state-
ments. Operating segments are defined as components of an
enterprise about which separate financial information is avail-
able that is evaluated regularly by the chief operating decision
maker in deciding how to allocate resources and in assessing
performance. The operating segments are determined based
on the nature of the products and services offered.
The Company discloses five operating segments: “Indus-
trial Automation Business,” “Electronic and Mechanical
Components Business,” “Automotive Electronic Components
Business,” “Social Systems Solution and Service Business,”
and “Healthcare Business”. These segments are mainly
separated based on the Companies’ consideration of their
lines of business and size within the consolidation. The
Company presents operating segments other than the above
five segments in “Other”.
The primary products included in each segment are as
follows:
(1) Industrial Automation Business: Sensors, programmable
logic controllers, timers, vision sensors, automated optical
inspection devices, safety components, temperature
controllers, and motion controllers.
(2) Electronic and Mechanical Components Business: Relays,
switches, components, and units for amusement devices,
connectors, and combination jogs.
(3) Automotive Electronic Components Business: Passive
entry devices, power window switches, and electric
power steering.
(4) Social Systems Solution and Service Business: Railway
infrastructure systems, traffic control, road control
systems, security systems, and payment systems.
(5) Healthcare Business: Digital blood pressure monitors,
digital thermometers, body composition monitors, pedom-
eters, biological information monitors, and nebulizers.
(6) Other: Solar power conditioner equipments, computer
peripheral equipments, MEMS microphone chips, and
LCD backlight.
The segment information is substantially presented in
accordance with accounting principles generally accepted in
the United States of America.
Revenues and expenses directly associated with specific
segments are disclosed in the figures of each segment’s
operating result.
Based on the Company’s allocation method used by
management to evaluate results of each segment, revenues,
and expenses not directly associated with specific segments
are allocated to each segment or included in “Eliminations
and others”.
Integrated Report 2012
125
¥ 4,186
¥ 7,169
¥ 2,105
¥ 1,125
¥ 1,533
¥ 939
¥ 17,057
¥ 5,560
¥ 22,617
Capital expenditures
¥ 1,850
¥ 4,231
Operating segment information as of and for the years ended March 31, 2012, 2011, and 2010, was as follows:
2010
2012
I Sales and Segment
profit (loss)
1. Sales to external
Industrial
Automation
Business
Electronic and
Mechanical
Components
Business
Automotive
Electronic
Components
Business
Social Systems
Solutions and
Service
Business
Healthcare
Business
Millions of yen
Other
Total
Eliminations
and others
Consolidated
customers
¥270,835
¥ 83,002
¥85,027
¥57,200
¥62,446
¥53,535
¥612,045
¥ 7,416
¥619,461
2. Intersegment Sales
6,054
53,080
296
3,980
69
15,417
78,896
(78,896)
—
Total
¥276,889
¥136,082
¥85,323
¥61,180
¥62,515
¥68,952
¥690,941
¥(71,480)
¥619,461
¥ 33,328
¥ 7,240
¥ 2,691
¥ 98
¥ 2,918
¥ (3,553)
¥ 42,722
¥ (2,586)
¥ 40,136
¥211,356
¥106,011
¥55,452
¥57,423
¥46,436
¥38,756
¥515,434
¥ 21,889
¥537,323
Segment profit (loss)
II Assets, depreciation,
and capital
expenditures
Assets
Depreciation and
amortization
Capital expenditures
¥ 3,758
¥ 9,908
¥ 5,196
¥ 856
¥ 3,752
¥ 2,096
¥ 25,566
¥ 2,775
¥ 28,341
Annotations about the above segment information:
No. 1 Intersegment sales are recorded at the same prices used in transactions with third parties.
No. 2 Eliminations and others include items, such as unclassifiable expenses, eliminations of internal transaction among each segment.
No. 3 Depreciation and amortization and capital expenditures include expenses and expenditures arising from intangible assets.
2011
I Sales and Segment
profit (loss)
1. Sales to external
Industrial
Automation
Business
Electronic and
Mechanical
Components
Business
Automotive
Electronic
Components
Business
Social Systems
Solutions and
Service
Business
Healthcare
Business
Millions of yen
Other
Total
Eliminations
and others
Consolidated
customers
¥271,894
¥ 81,216
¥84,259
¥63,846
¥60,629
¥49,672
¥611,516
¥ 6,309
¥617,825
2. Intersegment Sales
6,006
56,886
Total
Segment profit (loss)
II Assets, depreciation,
¥277,900
¥138,102
¥ 38,228
¥ 11,914
493
¥84,752
¥ 4,162
4,682
¥68,528
¥ 1,653
38
17,020
85,125
(85,125)
—
¥60,667
¥ 4,078
¥66,692
¥696,641
¥(78,816)
¥617,825
¥ (4,659)
¥ 55,376
¥ (7,339)
¥ 48,037
and capital
expenditures
Assets
Depreciation and
amortization
¥209,019
¥109,325
¥48,387
¥70,642
¥42,528
¥35,465
¥515,366
¥ 47,424
¥562,790
Capital expenditures
¥ 2,169
¥ 8,654
¥ 4,493
¥ 6,860
¥ 2,057
¥ 2,023
¥ 1,658
¥ 1,038
¥ 1,249
¥ 4,659
¥ 1,232
¥ 17,549
¥ 5,435
¥ 22,984
¥ 1,957
¥ 20,500
¥ 2,692
¥ 23,192
Annotations about the above segment information:
No. 1 Intersegment sales are recorded at the same prices used in transactions with third parties.
No. 2 Eliminations and others include items, such as unclassifiable expenses, eliminations of internal transaction among each segment.
No. 3 Depreciation and amortization and capital expenditures include expenses and expenditures arising from intangible assets.
Industrial
Automation
Business
Electronic and
Mechanical
Components
Business
Automotive
Electronic
Components
Business
Social Systems
Solutions and
Service
Business
Healthcare
Business
Millions of yen
Other
Total
Eliminations
and others
Consolidated
I Sales and Segment
profit (loss)
1. Sales to external
customers
¥203,917
¥ 70,717
¥75,163
¥57,981
¥63,359
¥43,592
¥514,729
¥ 9,965
¥524,694
2. Intersegment Sales
4,088
43,961
Total
Segment profit (loss)
II Assets, depreciation,
¥208,005
¥114,678
¥ 12,694
¥ 6,739
691
¥75,854
¥ 1,731
3,898
¥61,879
¥ 2,654
86
14,047
66,771
(66,771)
—
¥63,445
¥ 7,055
¥57,639
¥581,500
¥(56,806)
¥524,694
¥ (5,822)
¥ 25,051
¥(11,977)
¥ 13,074
and capital
expenditures
Assets
Depreciation and
amortization
¥179,512
¥104,354
¥52,520
¥69,794
¥45,808
¥33,212
¥485,200
¥ 47,054
¥532,254
¥ 5,211
¥ 8,480
¥ 2,099
¥ 3,607
¥ 1,378
¥ 1,181
¥ 1,342
¥ 1,500
¥ 1,262
¥ 19,772
¥ 7,242
¥ 27,014
¥ 1,088
¥ 13,457
¥ 6,067
¥ 19,524
Annotations about the above segment information:
No. 1 Intersegment sales are recorded at the same prices used in transactions with third parties.
No. 2 Eliminations and others include items, such as unclassifiable expenses, eliminations of internal transaction among each segment.
No. 3 Depreciation and amortization and capital expenditures include expenses and expenditures arising from intangible assets.
2012
I Sales and Segment
profit (loss)
1. Sales to external
customers
2. Intersegment Sales
Total
Segment profit (loss)
II Assets, depreciation,
and capital
expenditures
Assets
Depreciation and
amortization
Industrial
Automation
Business
Electronic and
Mechanical
Components
Business
Automotive
Electronic
Components
Business
Social Systems
Solutions and
Service
Business
Healthcare
Business
Thousands of U.S dollars
Other
Total
Eliminations
and others
Consolidated
$3,302,866
$1,012,220
$1,036,915
$697,561
$761,537
$652,866
$7,463,965
$ 90,437
$7,554,402
73,829
647,317
3,610
48,537
841
188,012
962,146
(962,146)
—
$3,376,695
$1,659,537
$1,040,525
$746,098
$762,378
$840,878
$8,426,111
$(871,709)
$7,554,402
$ 406,439
$ 88,293
$ 32,817
$ 1,195
$ 35,585
$ (43,329)
$ 521,000
$ (31,537)
$ 489,463
$2,577,512
$1,292,817
$ 676,244
$700,280
$566,293
$472,634
$6,285,780
$266,940
$6,552,720
$ 51,049
$ 87,427
$ 25,671
$ 13,720
$ 18,695
$ 11,451
$ 208,013
$ 67,805
$ 275,818
Capital expenditures
$ 45,829
$ 120,829
$ 63,366
$ 10,439
$ 45,756
$ 25,561
$ 311,780
$ 33,841
$ 345,621
Annotations about the above segment information:
No. 1 Intersegment sales are recorded at the same prices used in transactions with third parties.
No. 2 Eliminations and others include items, such as unclassifiable expenses, eliminations of internal transaction among each segment.
No. 3 Depreciation and amortization and capital expenditures include expenses and expenditures arising from intangible assets.
Reconciliation between segment profit (loss) and income before income taxes and equity in loss (earnings) of affiliates for the
years ended March 31, 2012, 2011, and 2010, is as follows:
Total amount of segment profit
Other expenses, net
Eliminations and others
Income before income taxes and equity in loss (earnings)
of affiliates
2012
¥42,722
6,589
(2,586)
Millions of yen
2011
¥55,376
6,344
(7,339)
2010
¥ 25,051
2,879
(11,977)
Thousands of
U.S. dollars
2012
$521,000
80,353
(31,537)
¥33,547
¥41,693
¥ 10,195
$409,110
126
Omron Corporation
Integrated Report 2012
127
Geographic information
Information by the Companies’ sales to external customers and property, plant, and equipment separated into major geographic
areas as of and for the years ended March 31, 2012, 2011, and 2010, is as follows:
2012
Sales to external customers
¥307,649
¥74,820
¥83,561
¥101,074
¥52,357
¥619,461
Property, plant, and equipment
¥ 79,548
¥ 4,166
¥ 4,290
¥ 24,572
¥ 8,130
¥120,706
Japan
Americas
Europe
Greater China
Southeast Asia
and Others
Consolidated
Millions of yen
Millions of yen
Japan
Americas
Europe
Greater China
Southeast Asia
and Others
Consolidated
¥311,906
¥74,397
¥84,511
¥97,012
¥49,999
¥617,825
¥ 83,109
¥ 4,210
¥ 4,485
¥21,381
¥ 6,813
¥119,998
Millions of yen
Japan
Americas
Europe
Greater China
Southeast Asia
and Others
Consolidated
¥269,143
¥61,154
¥77,607
¥77,136
¥39,654
¥524,694
¥ 85,247
¥ 5,108
¥ 5,483
¥20,853
¥ 6,303
¥122,994
2011
Sales to external customers
Property, plant, and equipment
2010
Sales to external customers
Property, plant, and equipment
2012
Sales to external customers
Property, plant, and equipment
Deloitte Touche Tohmatsu LLC
Shijokarasuma FT Square
20, Naginataboko-cho
Karasuma-higashiiru, Shijo-dori
Shimogyo-ku, Kyoto 600-8008
Japan
Tel: +81 (75) 222 0181
Fax: +81 (75) 231 2703
www.deloitte.com/jp
Independent Auditors’ Report
To the Board of Directors and Stockholders of OMRON Corporation
We have audited the accompanying consolidated balance sheets of OMRON Corporation and subsidiaries (the “Company”) as
of March 31, 2012 and 2011, and the related consolidated statements of income, comprehensive income (loss), shareholders’
equity, and cash flows for each of the three years in the period ended March 31, 2012, all expressed in Japanese yen. These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
Thousands of U.S. dollars
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also
Japan
Americas
Europe
Greater China
Southeast Asia
and Others
Consolidated
$3,751,817
$912,439 $1,019,037 $1,232,610
$638,499 $7,554,402
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
$ 970,098
$ 50,805 $ 52,317 $ 299,659
$ 99,145 $1,472,024
presentation. We believe that our audits provide a reasonable basis for our opinion.
Annotations about the above geographic information:
No. 1 Classification of country or area is based upon physical geographic approximation.
No. 2 Major countries or areas belonging to segments other than Japan are as follows:
(1) Americas: United States of America, Canada and Brazil
(2) Europe: Netherlands, Great Britain, Germany, France, Italy and Spain
(3) Greater China: China, Hong Kong and Taiwan
(4) Southeast Asia and Others: Singapore, Republic of Korea, India, and Australia
No. 3 For sales and property, plant, and equipment, there were no material amounts specific to a particular country that will have required separate
disclosure as of and for the years ended March 31, 2012, 2011, and 2010.
No. 4 During the year ended March 31, 2012, we changed the name North America to Americas. This was only a name change and no change to the
geographic composition of this group has been made.
No. 5 There are no sales to important single external customer, which is required to be separately disclosed, for the years ended March 31, 2012, 2011,
and 2010.
22. Acquisition
There have not been any significant acquisitions for the years ended 2012, 2011 and 2010.
23. Subsequent Events
The Companies have adopted ASC No. 855, “Subsequent Events.” ASC No. 855 establishes the disclosure of the date that
subsequent events are recognized and the estimate of nature and financial effect of unrecognized subsequent events.
No significant event took place since March 31, 2012 through June 22, 2012, the date when Yukashouken-Houkokusho (Annual
Securities Report filed under the Financial Instruments and Exchange Act of Japan) for the year ended March 31, 2012 was
available to be issued.
128
Omron Corporation
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of OMRON Corporation and subsidiaries as of March 31, 2012 and 2011, and the results of their operations and their
cash flows for each of the three years in the period ended March 31, 2012, in conformity with accounting principles generally
accepted in the United States of America.
Our audits also comprehended the translation of Japanese yen amounts into United States dollar amounts and, in our opinion,
such translation has been made in conformity with the basis stated in Note 2 to the consolidated financial statements. Such
United States dollar amounts are presented solely for the convenience of readers outside Japan.
Kyoto, Japan
June 22, 2012
Member of
Deloitte Touche Tohmatsu Limited
Integrated Report 2012
129
Internal Control Section
Management’s Report on Internal Control
NOTE TO READERS:
The following is an English translation of the management’s report on internal control over financial reporting ("ICFR") filed under the Financial
Instruments and Exchange Act of Japan. This report is presented merely as supplemental information. There are differences between an assess-
ment of ICFR under the Financial Instruments and Exchange Act ("ICFR under FIEA") and one conducted under the standards of the Public
Company Accounting Oversight Board (United States) ("ICFR under PCAOB");
In an assessment of ICFR under FIEA, there is detailed guidance on the scope of an assessment of ICFR, such as quantitative guidance on
business location selection and/or account selection. In an assessment of ICFR under PCAOB, there is no such detailed guidance. Accordingly,
regarding the scope of assessment of internal control over business processes, we selected locations and business units to be tested based
on annual consolidated net sales (after the elimination of transactions between consolidated companies), and companies with net sales of
approximately two-thirds of the total amount on a consolidation basis were selected as "significant locations and/or business units." At selected
"significant locations and/or business units," we included in the scope of assessment, business processes leading to sales, accounts receivable
and inventories as significant accounts that may have a material impact on our business objectives. Further, in addition to selected significant
locations and/or business units, we also included in the scope of assessment, as business processes having greater materiality, business
processes relating to (i) greater likelihood of material misstatements and/or (ii) significant accounts involving estimates and the management’s
judgment and/or (iii) a business or operation dealing with high-risk transactions, taking into account their impact on the financial reporting.
Management’s Report on Internal Control
1. Matters relating to the basic framework for internal control
over financial reporting
Yoshihito Yamada, President and Chief Executive Officer; and
Takayoshi Oue, Senior General Manager of the Accounting and
Finance Center, Executive Officer, and Chief Financial Officer are
responsible for designing and operating effective internal control
over financial reporting of Omron Corporation (the "Company")
and have designed and operated internal control over financial
reporting in accordance with the basic framework for internal
control set forth in "The Standards and Practice Standards for
Management Assessment and Audit Concerning Internal Control
Over Financial Reporting (Council Opinion)" released by the
Business Accounting Council.
The internal control is designed to achieve its objectives to the
extent reasonable through the effective function and combination
of its basic elements. Therefore, there is a possibility that
misstatements may not be completely prevented or detected by
internal control over financial reporting.
2. Matters relating to the scope of assessment, the basis date
of assessment and the assessment procedures
The assessment of internal control over financial reporting was
performed as of March 31, 2012 which is the end of this fiscal
year. The assessment was performed in accordance with assess-
ment standards for internal control over financial reporting gener-
ally accepted in Japan.
In conducting this assessment, we evaluated internal controls
which may have a material effect on our entire financial reporting
on a consolidation basis ("entity-level controls") and based on the
results of this assessment, we selected business processes to
be tested. We analyzed these selected business processes,
identified key controls that may have a material impact on the
reliability of the Company’s financial reporting, and assessed the
design and operation of these key controls. These procedures
have allowed us to evaluate the effectiveness of the internal
controls of the Company.
We determined the required scope of assessment of internal
control over financial reporting for the Company, as well as its
consolidated subsidiaries and equity-method affiliated compa-
nies, from the perspective of the materiality that may affect the
reliability of their financial reporting. The materiality that may
affect the reliability of the financial reporting is determined by
taking into account the materiality of quantitative and qualitative
130
Omron Corporation
impacts on financial reporting. In light of the results of assess-
ment of entity-level controls conducted for the Company and its
consolidated subsidiaries, we reasonably determined the scope
of assessment of internal controls over business processes.
Consolidated subsidiaries and equity-method affiliated compa-
nies determined to have an insignificant quantitative and qualita-
tive influence on the reliability of financial reporting are not
included in the scope of assessment of entity-level controls.
Regarding the scope of assessment of internal control over
business processes, we selected locations and business units to
be tested based on the previous year’s consolidated net sales
(after the elimination of transactions between consolidated
companies), and the companies whose net sales reaches
two-thirds of total amount on a consolidation basis were selected
as "significant locations and/or business units." At selected "signif-
icant locations and/or business units," we included in the scope of
assessment, business processes leading to sales, accounts
receivable and inventories as significant accounts that may have
a material impact on the business objectives of the Company.
Further, in addition to selected significant locations and/or
business units, we also included in the scope of assessment, as
business processes having greater materiality, business
processes relating to (i) greater likelihood of material misstate-
ments and/or (ii) significant accounts involving estimates and the
management’s judgment and/or (iii) a business or operation
dealing with high-risk transactions, taking into account their
impact on the financial reporting.
3. Matters relating to the results of the assessment
The above assessments determined that the Company’s
internal control over financial reporting was effective as of the last
day of the fiscal year under review.
4. Additional notes
No material items to report.
5. Special notes
No material items to report.
June 22, 2012
Yoshihito Yamada
President
Chief Executive Officer
Omron Corporation
Independent Auditors’ Report
(filed under the Financial Instruments and Exchange Act of Japan)
NOTE TO READERS:
Following is an English translation of the Independent Auditors’ Report filed under the Financial Instruments and Exchange Act of Japan.
This report is presented merely as supplemental information.
There are differences between an audit of internal control over financial reporting (“ICFR”) under the Financial Instruments and Exchange
Act (“ICFR under FIEA”) and one conducted under the standards of the Public Company Accounting Oversight Board (United States) (“ICFR
under PCAOB”);
• In an audit of ICFR under FIEA, the auditors express an opinion on management’s report on ICFR, and do not express an opinion on the
Company’s ICFR directly. In an audit of ICFR under PCAOB, the auditors express an opinion on the Company’s ICFR directly.
• In an audit of ICFR under FIEA, there is detailed guidance on the scope of an audit of ICFR, such as quantitative guidance on business
location selection and/or account selection. In an audit of ICFR under PCAOB, there is no such detailed guidance. Accordingly, regarding
the scope of assessment of internal control over business processes, locations and business units to be tested were selected based on
the previous year’s net sales that in total reaches two-thirds of total net sales on a consolidation basis and were identified as “significant
locations and/or business units.” At the selected “significant locations and/or business units,” business processes leading to sales,
accounts receivable and inventories as significant accounts that may have a material impact on the business objectives of Omron Corpo-
ration (the “Company”) were included in the scope of assessment. Furthermore, in addition to selected “significant locations and/or
business units” and their material business processes, other locations and /or business units and other business processes that may
have (i) a greater likelihood of material misstatements and/or, (ii) significant accounts involving estimates and management’s judgment,
and/or (iii) a business or operation dealing with high-risk transactions, taking into account their impact on the financial reporting, were
also included in the list of locations and/or business units to be tested and in the scope of assessment.
To the Board of Directors of OMRON Corporation.
June 22, 2012
Independent Auditors’ Report
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner, Engagement Partner, Certified Public Accountant: Kazuyasu Yamada
Designated Unlimited Liability Partner, Engagement Partner, Certified Public Accountant: Kenichi Takai
Designated Unlimited Liability Partner, Engagement Partner, Certified Public Accountant: Hiroaki Sakai
Audit of Financial Statements
Pursuant to the first paragraph of Article 193-2 of the Financial Instru-
ments and Exchange Act, we have audited the consolidated financial
statements included in the Financial Section, namely, the consolidated
balance sheet, and the related consolidated statements of income,
comprehensive income (loss), shareholders’ equity and cash flows of
OMRON Corporation (the “Company”) and its consolidated subsidiaries
for the fiscal year from April 1, 2011 to March 31, 2012 , and the related
notes, and consolidated supplementary schedules.
Management’s Responsibility for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of
these consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America pursuant to
the third paragraph of the Supplementary Provisions of the Cabinet Office
Ordinance for Partial Amendment of the Regulations for Terminology,
Forms and Preparation Methods of Consolidated Financial Statements
(No.11 of the Cabinet Office Ordinance in 2002), and for such internal
control as management determines is necessary to enable the prepara-
tion of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We conducted our audit in
accordance with auditing standards generally accepted in Japan. Those
standards require that we plan and perform the audit to obtain reason-
able assurance about whether the consolidated financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial state-
ments. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the consoli-
dated financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control. An audit
also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the
consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Audit Opinion
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
OMRON Corporation and its consolidated subsidiaries as of March 31,
2012, and the results of their operations and their cash flows for the
year then ended in conformity with accounting principles generally
accepted in Japan.
Audit of Internal Control
Pursuant to the second paragraph of Article 193-2 of the Financial
Instruments and Exchange Act, we have audited management’s report
on internal control over financial reporting of OMRON Corporation as of
March 31, 2012.
Management’s Responsibility for the Report on Internal Control
Management is responsible for designing and operating effective
internal control over financial reporting and for the preparation and fair
presentation of its report on internal control in conformity with assess-
ment standards for internal control over financial reporting generally
accepted in Japan. There is a possibility that misstatements may not be
completely prevented or detected by internal control over financial
reporting.
Auditor’s Responsibility
Our responsibility is to express an opinion on management’s report
on internal control based on our internal control audit. We conducted
our internal control audit in accordance with auditing standards for
internal control over financial reporting generally accepted in Japan.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether management’s report on internal
control is free from material misstatement.
An internal control audit involves performing procedures to obtain
audit evidence about the results of the assessment of internal control
over financial reporting in management’s report on internal control. The
procedures selected depend on the auditor’s judgment, including the
significance of effects on reliability of financial reporting. An internal
control audit includes examining representations on the scope, proce-
dures and results of the assessment of internal control over financial
reporting made by management, as well as evaluating the overall
presentation of management’s report on internal control.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, management’s report on internal control over financial
reporting referred to above, which represents that the internal control
over financial reporting of OMRON Corporation as of March 31, 2012 is
effectively maintained, presents fairly, in all material respects, the
results of the assessment of internal control over financial reporting in
conformity with assessment standards for internal control over financial
reporting generally accepted in Japan.
Interest
Our firm and the engagement partners do not have any interest in the
Company for which disclosure is required under the provisions of the
Certified Public Accountants Act.
The above represents a translation, for convenience only, of the original report
issued in the Japanese language.
Integrated Report 2012
131
Corporate and Stock Information
As of March 31, 2012
Date of Establishment
May 10, 1933
Number of Employees
(Consolidated)
35,992
Paid-in Capital
¥64,100 million
Common Stock
Authorized
487,000,000 shares
Issued
239,121,372 shares
Number of shareholders
33,188
Stock Listings
Osaka Securities Exchange
Tokyo Stock Exchange
Frankfurt Stock Exchange
Ticker Symbol Number
6645
Custodian of Register of Share-
holders
Mitsubishi UFJ Trust and
Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, Japan
Depositary and Transfer Agent for
American Depositary Receipts
JPMorgan Chase Bank,
N.A.1 Chase Manhattan Plaza,
New York, NY 10005, U. S. A.
Brazil
OMRON Management Center
of Latin America (Sao Paulo)
Tel 55-11-2101-6348
Fax 55-11-2101-6301
ADR Holder Contact :
JPMorgan Service Center
P.O. Box 64504 St. Paul, MN
55164-0504 U.S.A.
Tel 1-800-990-1135
E-mail jpmorgan.adr@wellsfargo.
com
Website
http://www.omron.com
(Japanese)
http://www.omron.com
(English)
Head Office
Shiokoji Horikawa,
Shimogyo-ku, Kyoto
600-8530, Japan
Tel 81-75-344-7000
Fax 81-75-344-7001
Overseas Headquarters
Europe
Omron Europe B.V.
(The Netherlands)
Tel 31-23-568-1300
Fax 31-23-568-1391
North America
Omron Management Center of
America, Inc. (Illinois)
Tel 1-224-520-7650
Fax 1-224-520-7680
Asia-Pacific
Omron Asia Pacific Pte. Ltd.
(Singapore)
Tel 65-6835-3011
Fax 65-6835-2711
India
OMRON Management Center
of India (Haryana)
Tel 91-124-4921700
Fax 91-124-4921777
Greater China
Omron (China) Co., Ltd.
(Shanghai)
Tel 86-21-5888-1666
Fax 86-21-5888-7933
Major Domestic
Manufacturing, Marketing,
and Research & Development
Locations
Manufacturing
Kusatsu Office
Tel 81-77-563-2181
Fax 81-77-565-5588
Ayabe Office
Tel 81-773-42-6611
Fax 81-773-43-0661
Yasu Office
Tel 81-77-588-9000
Fax 81-77-588-9901
Sales & Marketing
Tokyo Office
2-3-13, Konan,
Minato-ku, Tokyo
108-0075, Japan
Tel 81-3-6718-3400
Fax 81-3-6718-3408
Mishima Office
Tel 81-55-977-9000
Fax 81-55-977-9080
Nagoya Office
Tel 81-52-571-6461
Fax 81-52-565-1910
Osaka Office
Tel 81-6-6347-5800
Fax 81-6-6347-5900
Research & Development
Keihanna Technology
Innovation Center
Tel 81-774-74-2000
Fax 81-774-74-2001
Okayama Office
Tel 81-86-277-6111
Fax 81-86-276-6013
Stock Price Osaka Securities Exchange
(Index)
240
220
200
180
160
140
120
100
80
60
40
20
0
2003/3
Monthly Volume
Omron
Nikkei 225 Index
2004/3
2005/3
2006/3
2007/3
2008/3
2009/3
2010/3
2011/3
2012/3
(1,000
Shares)
30,000
20,000
10,000
0
Note: Share index (2003/3E=100)
Yearly High and Low Prices*
Ownership and
Distribution of Shares
(%)
100
24.4%
23.8%
24.3%
80
60
40
20
0
39.2%
37.2%
37.6%
5.6%
0.3%
5.5%
0.4%
30.5%
33.1%
5.7%
0.8%
31.3%
0%
0%
0.3%
09
10
11
(FY)
(As of March 31)
Individuals and others
Foreign institutions and individuals
Other corporations
Financial instruments dealers
Financial institutions
Local government authorities
FY
High (¥)
Low (¥)
2002
2,115
1,320
2003
2,740
1,648
2004
2,885
2,150
2005
3,620
2,210
2006
3,590
2,615
2007
3,510
1,950
2008
2,385
940
2009
2,215
1,132
2010
2,418
1,749
2011
2,357
1,381
* Stock prices listed in the First Section of Osaka Securities Exchange
132
Omron Corporation
INQUIRIES
Investor Relations Headquarters
Investor Relations Department
Shinagawa Front Building 7F
2-3-13, Konan, Minato-ku, Tokyo 108-0075, Japan
Phone: +81-3-6718-3421 Fax: +81-3-6718-3429
URL: http://www.omron.com/ir/
Board of Directors Office
Corporate Social Responsibility Department
Shiokoji Horikawa, Shimogyo-ku,
Kyoto 600-8530, Japan
Phone: +81-75-344-7174 Fax: +81-75-344-7111
URL: http://www.omron.com/about/csr/
Integrated Report 2012
133