Integrated Report 2013
Year ended March 31, 2013
New Automation Solutions
for a Changing World
Omron Corporation is commemorating
the 80th anniversary of its founding.
Corporate Value
Initiatives
48 Omron at a Glance
50
52
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56
58
60
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
Environmental Solutions Business, Electronic Systems & Equipments Business,
Micro Devices Business, and Backlight Business
About Omron
2 Message from the President
4 Omron’s 80-Year History
10 Omron’s Businesses
14 Omron’s Global Network
16 Omron through the Year
18 11-Year Financial Highlights
20 Financial and Non-Financial Highlights
22 Interview with the President
28 Core Theme:
28
Industrial Automation Business (IAB)
Where We’re
Headed
and Emerging Countries
34
Healthcare Business (HCB)
and Emerging Countries
38
Environmental Solutions Business
and Social Systems Business (SSB)
42
Omron’s Risk Management
as Explained by Directors
Corporate Value
Foundation
62 Intellectual Property Strategy
63 R&D
64 Quality
66 Human Resources
68 Resolving
Environmental Issues
72 Relationship Building
with Shareholders
74 The Omron Principles
and CSR Management
77 Corporate Governance
82 Directors, Audit & Supervisory Board
Members, and Executive Offi cers
Financial
Section
86 Financial Section (U.S. GAAP)
102 Internal Control Section
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 Pacifi c (AP) version of the Dow Jones
Sustainability Indexes (DJSI).
As of July 2013
Asia Pacifi c (AP)
Editorial Policy
The scope of this report covers the 165 companies of the Omron Group, consisting of 153 consolidated subsidiaries and 12 non-consolidated subsidiaries and affi liates accounted
for under the equity method (as of March 31, 2013). Through its environmental and governance-related activities, Omron is contributing to the development of a sustainable
society. Since 2012, we have included in our annual reports information on activities that had previously only been available in the CSR report.
Caution Concerning Forward-Looking Statements
Statements in this integrated report with respect to Omron’s plans, strategies, and benefi ts, 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 Pacifi c, 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.
Integrated Report 2013
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of 27.0% and a dividend on equity (DOE) ratio of
2.4%. In fi scal 2012, we raised the defi ned minimum
for the dividend payout ratio from 20% to 25%,
targeting a 2% DOE ratio in consideration of stable
dividend payments. Further, we cancelled a portion
of treasury stock and introduced a shareholder
benefi t program to enhance shareholder returns.
Pursuit of Higher Corporate Value
In pursuit of higher corporate value, we emphasize
capital effi ciency in our management. To that end,
we have been utilizing return on invested capital
(ROIC) as an internal management index. In April
2013, we disclosed our consolidated ROIC target.
In order to facilitate our efforts on this front,
we established the new position of Chief Financial
Offi cer (CFO) in fi scal 2013. This is a change that
I advocated myself based on the belief that it
would help accelerate our decision making, im-
prove the quality of management, and heighten
corporate value.
In Value Generation 2020 (VG2020), the long-term
management strategy released in July 2011,
we declare our dedication to growth. The
fi rst three years of the 10-year period
leading up to 2020 have been desig-
nated as the “GLOBE STAGE,”
during which we will target
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the establishment of a global profi t and growth
structure. Fiscal 2013 is the fi nal year of this stage,
and our goal for this year is to transform Omron
into a stronger company that realizes synergetic
relationships between growth potential, profi tability,
and responsiveness to change. As such, we will
work even harder on profi t and growth structure
reform. The economic climate is currently under-
going substantial change as the too-strong yen
depreciates. We will transform such changes into
opportunity and accelerate our growth strategies.
To Become a Company That Society Requires
Omron will remain dedicated to resolving the numer-
ous issues facing people through its business. We
will strive to make Omron a company that people
around the world require, with high expectations.
I would like to ask for your continued support.
July 2013
Yoshihito Yamada
President and CEO
Message from the President
Omron Reaches 80-Year Milestone
On its way to becoming a sustainable company that contributes to
the global society through innovative products and services
The Milestone of 80 Years
Omron Corporation celebrated the 80th anniversary
of its founding on May 10, 2013. Reaching this mile-
stone could not have been done without your sup-
port, for which I am most grateful.
In the 80 years since Omron’s founding, the
world has changed dramatically. In 1933, the
world’s population was around 2 billion; today, it
exceeds 7 billion. Not only that, per capita GDP has
increased by roughly four times and the average
lifespan has nearly doubled. Throughout its 80-year
history, Omron has taken on countless challenges
as it pursued technological innovation ahead of
social needs. By creating new value centered on
automation, I am confi dent that we contributed to
the sound and sustainable growth of society and
the improvement of people’s lives. Omron has
grown by leaps and bounds and is now a global
leader in the fi eld of automation with over 35,000
employees working in more than 110 countries
around the world.
Omron’s core corporate value is “Working for the
benefi t of society.” This represents our commitment
to coexist and grow in harmony with society. To
accomplish this intrepid spirit everyone will work
together to propel the Company forward to quickly
uncover latent social needs around the world and
provide products and services to contribute to the
sustainable development of society.
Fiscal 2012 Performance
and Shareholder Returns
In fi scal 2012, of our fi ve mainstay businesses, Auto-
motive Electronic Components Business (AEC),
Social Systems, Solutions and Service Business
(SSB), and Healthcare Business (HCB) saw favor-
able growth in sales. As a result, overall net sales
increased 5.0% year on year to ¥650.5 billion, and
operating income was up 13.0%, to ¥45.3 billion. In
regard to profi t structure reforms, sales and market-
ing divisions worked to increase profi tability while
production and development divisions introduced
competitive, new products and improved their
Net Sales and Gross Profi t Margin
Net Sales (Billions of yen)
Gross Profit Margin (%)
700
34.8
35.1
37.5
36.8
37.1
627.2
617.8
619.5
650.5
524.7
600
500
2008
2009
2010
2011
2012
(FY)
Operating Income and Operating Income Margin
7.8
48.0
6.5
40.1
7.0
45.3
Operating Income (Billions of yen)
Operating Income Margin (%)
50
25
0
2.5
13.1
0.9
5.3
2008
2009
2010
2011
2012
(FY)
operating processes. These steadfast efforts led
to a 0.3-percentage-point rise in the gross profi t
margin, to 37.1%.
To shareholders, we paid total annual cash divi-
dends of ¥37.00 per share, including a commemora-
tive dividend of ¥5.00 per share and up from ¥28.00
in fi scal 2011. This resulted in a dividend payout ratio
Dividend, Dividend Payout Ratio, and EPS
Annual Dividend (Yen)
Dividend Payout Ratio (%)
Net Income per Share Attributable
to Shareholders (Yen)
106.4
16.0
17
25
121.7
24.7
30
74.5
37.6
28
137.2
27.0
37
50
25
0
2008
2009
2010
2011
2012
(FY)
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Omron Corporation
Integrated Report 2013
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Omron’s 80-Year History
Continuing to Grow
by Contributing to the
Sustainable Development
of Society
The corporate core value of “Working for the benefi t of society” lies at
the heart of the Omron Principles. Until today, we have continued to
be a pioneer in contributing to the development of a sustainable society
as a proactive benefactor.
Net Sales
(Billions of yen)
Japan
Americas
Europe
Asia Pacifi c
Greater China
* Net sales for the geographic segments of Americas, Europe, and Asia Pacifi c are presented
from 1990 and from 2004 for Greater China.
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1933
1948
1960
1970
1980
1990
2000
2010
2012
(FY)
Addressing the age of automation
Responding to the cybernation revolution
Meeting the needs of the advanced information age
G’90s
GD2010
VG2020
1933: Tateisi Electric Manufacturing Co.
1968: OMRON Tateisi Electronics Co.
1988: Asia Pacifi c regional management
1998: Machine capable of identifying
2007: New R&D center opened in China.
established in Osaka and begins
production of X-ray timers.
established as company’s offi cial
English name.
center established in Singapore
(Omron Asia Pacifi c Pte. Ltd.).
1945: Production moved to Kyoto after main
factory in Osaka is destroyed by fi re
during World War II.
1948: Company name changed to Tateisi
Electronics Co and Kazuma Tateishi
assumes role of president.
1959: Company motto and “OMRON”
trademark established.
1960: World’s fi rst non-contact (solid state)
1969: World’s smallest desk-top electronic
calculator, “CALCULET-1200,”
launched.
1971: World’s fi rst online automated cash
1989: North American regional management
center established in the United
States (Omron Management Center
of America, Inc.).
dispenser developed.
1989: Golden ’90s Plan (G’90s) long-term
1972: OMRON Taiyo Electronics Co.,
Japan’s fi rst factory for workers
with disabilities, jointly established
with Japan Sun Industries.
vision announced.
1990: Company name changed to Omron
Corporation.
1991: In-line inspection system developed.
1994: Greater China regional management
center established in Beijing, China
(Omron (China) Co., Ltd.).
switch developed.
1983: Electronic thermometer goes on sale.
1960: Central R&D Laboratory completed in
1987: World’s fi rst ultra-high-speed fuzzy
Nagaokakyo, Kyoto.
logic controller developed.
1964: World’s fi rst automated traffi c signal
1988: European regional management
1995: Distance warning system for motor
developed.
1967: World’s fi rst unmanned train station
system developed.
center established in the Netherlands
(Omron Europe B.V.).
vehicles developed.
1996: “VT-WIN” PCB solder inspection
system developed.
4
Omron Corporation
counterfeit notes in various
currencies developed.
1999: Internal company system established
to separate management oversight
and business operations.
2001: Grand Design 2010 (GD2010)
plan announced.
2003: Global R&D hub Keihanna Technology
Innovation Center established in
Soraku-gun, Kyoto.
2004: Face recognition technology for
mobile phones developed.
2006: New Omron Principles established.
2006: Global design/production center for
control devices begins operations in
Shanghai, China.
2007: Omron ramps up development of
safety business (machine safeguarding).
2007: Omron 3D image sensing
technology put to practical use
through world’s fi rst real-color
3D Vision Sensor.
2009: Full-fl edged participation in
environmental solutions business
commenced.
2010: METI Minister’s Prize in Energy
Conservation Grand Prix Program
received, along with City of Kyoto
Board of Education, in recognition
of activities to track energy usage
volume and support energy
conservation education at
Kyoto municipal schools.
2010: “WellnessLink” health management
web service launched.
2011: Long-term management strategy,
Value Generation 2020 (VG2020),
announced.
2011: Sysmac NJ series of comprehensive
machine automation controllers
launched.
2012: OMRON Management Centre of
India established in Gurgaon,
Haryana State, India.
2012: 2012 Integrity Award Grand Prize
from Japan’s Integrity Award Council
received.
2012: OMRON Management Center of Latin
America established in Sao Paulo,
Brazil.
2013: Two METI Minister’s prizes received
in environmental solutions fi eld
(Energy Conservation Grand Prix
Program and New Energy Grand
Prix Program).
Integrated Report 2013
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Omron’s 80-Year History
A History of Creating
Social Innovations
Using Advanced
Technologies
Developing products to tackle
the electricity crises that
followed World War II
In May 1933, Kazuma Tateishi founded
Tateisi Electric Manufacturing Co., Omron’s
predecessor. In the years that followed,
the company continued to create products
that were the fi rst in Japan or in the world.
In 1948, the company was reborn as Tateisi
Electronics Co. after succeeding in the
mass-production of the current limiters
it had developed to tackle the electricity
crises that followed World War II.
1948
Current limiter
Leading the times with
an unrelenting intrepid spirit
The origins of Omron’s innovation lie in X-ray timers,
followed by the fi rst domestically produced micro
switch and the world’s fi rst non-contact switch,
all developed to lead industrial innovation.
Founding (1933)
Addressing the age of automation
1960
Anticipating the coming of
the age of automation, Omron
declared 1955 as “Year One
of Automation.” Since then, it
has continued to evolve these
operations while working to
equate the Omron name
with technology.
1943
First domestically produced
micro switch
1960
World’s fi rst non-contact switch
1970s
1960s
Responding to the cybernation revolution
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Omron founder Kazuma Tateishi with engineers
1960
Central R&D Laboratory after completion
of construction
Promoting automation
at production sites
At a time when automation in the manufacturing
industry was trending toward high-mix, low-
volume production, Omron was quick to
realize the need for controllers with high-
processing speeds that allowed programs
to be rewritten. Omron developed a sequence
programmer for machine tools in 1968, and
then in 1972 it released the revolutionary
programmable sequence controller called
Sysmac. After this, Omron continued to
promote the standardization of program
control manufacturing styles, making large
contributions to spreading automation and
improving productivity in factories.
Realizing improved operational
effi ciency and automation of
railway operations
To respond to the needs for improved opera-
tional effi ciency and automation in railway
operations, Omron introduced its multi-function
automated ticket vending machine into
Kobe Station of Japanese National Railways
(currently Japan Railways Group) in 1965.
Later, in 1966, Omron developed automated
ticket gates through a joint effort with Kinki
Nippon Railway and Kinki Sharyo Research
Institute. In 1967, three years before Expo ’70
was held in Osaka, Omron introduced the
world’s fi rst fully unmanned train station sys-
tem into Kita-Senri Station of Hankyu Railway.
1967
World’s fi rst fully unmanned train station system
Acting in accordance with the philosophy of
“To the machine, the work of the machine, to
man the thrill of creation,” Omron continued to
provide automation systems in response to
social needs for increased productivity and
effi ciency, making large contributions to the
development of a more fulfi lling society.
The Company also worked to automate social
infrastructure and healthcare.
Omron’s history is an 80-year
story of contributing to society
through automation technologies.
Hands-on programming experience corner at
Sysmac exhibition
Industrial Automation Business (IAB)
Electronic and Mechanical Components Business (EMC)
Social Systems, Solutions and Service Business (SSB)
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Omron Corporation
Integrated Report 2013
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Omron’s 80-Year History
Contributions to the
Development of a Safer
and More Comfortable
Global Society
Signing of production outsourcing agreement
with Shanghai Huayi Electronic
Production sites established and operated in
Shanghai to produce sensors, FA systems,
and control equipment
1970s
Meeting the needs of
the advanced information age
Present
Contributing to Chinese society
Looking to contribute to industrial develop-
ment in China, Omron began outsourcing
production to Shanghai Huayi Electronic
Factory in 1980. After this, Omron expanded
its Chinese operations, establishing numerous
distributors, joint venture companies, and
even companies created through its own
investment. In 1994, the Company was
converted into a holding company, marking
the fi rst time for the Chinese government to
permit a Japanese manufacturer to establish
such a company in China. Today, Omron’s
operations in China are realizing strong
growth and are making large contributions
to the development of the Chinese economy
and society.
First-generation blood
pressure monitor,
launched in 1973
With the aim of making Omron a globally recognized
brand, Omron began expanding its business overseas
in the 1960s. In accordance with its global expansion
policy of “planning, manufacturing, and selling globally,”
Omron began establishing regional management centers
in the late 1980s, developing centers in the Netherlands,
Singapore, the United States, and fi nally China.
Regional management
center, the Netherlands
Regional management
center, Singapore
Regional management
center, the United States
* Photographs are at time of establishment.
Blood pressure
monitor currently
being sold in Russia
Contributing to healthcare
by people moved
by ideals and dreams
Measuring one’s blood pressure at home—
this is something that would have been
unimaginable around 30 years ago. Today,
the importance of monitoring one’s blood
pressure at home is well known, but at the
time it was commonly recognized that such
monitoring was a doctor’s job. Omron’s blood
pressure monitors are now used in more
than 110 countries around the world. This
accomplishment required these devices to
undergo clinical trials at medical institutions
and be made compliant with legal regulations
and for us to develop sales channels and
educate people with regard to the use of the
monitors. In these efforts, countless people
were moved by ideals and by the dream of
contributing to healthcare by moving these
devices out of the hospital to the home.
Passing the waypoint of 80 years
to advance toward the next challenge
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Creating defi nite value in Asia
and around the world
Present
The milestone of 80 years marks the end of one
chapter in Omron’s history; at the same time, it
represents a waypoint. We are not satisfi ed with
our current position, and we will continue work-
ing to quickly uncover social needs related to
safety, security, healthcare, and the environment,
which we will address by using new automation
technologies. In this way, we will support people
in living more comfortable and fulfi lling lives
around the world.
Future
Commencing full-fl edged
participation in the environmental
solutions business
In 2009, when impacts on society of global
warming and other environmental issues were
rising, Omron commenced full-fl edged partici-
pation in the environmental solutions business.
By leveraging its energy conversion and con-
trol technologies, Omron will construct a
unique value chain that helps energy be created
without waste, stored effectively, and used
wisely. Through these efforts, we will contrib-
ute to the maximization of energy effi ciency
through all stages of the energy life cycle.
Supporting the evolution of
motoring societies with our
automotive electronics business
Omron commenced full-fl edged participa-
tion in the automotive electronics business
in 1983. Since then, we have created nu-
merous technologies as we constantly
developed new products in response to
customer needs. In the future, society will
expect automobiles to be more eco-friendly
and more comfortable and convenient
while also being safer and more reliable.
Omron will continue to pursue innovation
as it works to further evolve motoring
societies and provide them with new value.
Product for
eco-friendly
vehicles
Omron’s new quest
to create global value
has only just begun.
Industrial Automation Business (IAB)
Electronic and Mechanical Components Business (EMC)
Electronic and Mechanical Components Business (EMC)
Electronic and Mechanical Components Business (EMC)
Automotive Electronic Components Business (AEC)
Social Systems, Solutions and Service Business (SSB)
Social Systems, Solutions and Service Business (SSB)
Social Systems, Solutions and Service Business (SSB)
Healthcare Business (HCB)
Other Businesses
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Omron Corporation
Integrated Report 2013
9
Industrial Automation Business (IAB)
Omron’s mainstay business, leading the innovation of global
manufacturing through factory automation (FA)
More than 100,000 FA controllers, sensors, switches, relays, and safety
devices to help improve the productivity of manufacturing facilities. Omron
boasts the top share of the Japanese market for control equipment and has
operations in more than 40 countries and 160 regions, including China and
countries in Europe, North America, and the rest of Asia.
40%
Leading Market Shares
(Approx.)
(As of July 2013)
Control-Related Equipment
(Japanese Market Share)
40%
Source: Nippon Electric Control
Equipment Industries
Association (NECA)
FY1960
Net Sales
¥0.83 billion
Constructed Central R&D
Laboratory
Solidifi ed foundations for
future business growth
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Omron’s
Businesses
Committed to contributing to the
development of emerging countries
and other societies through our
business activities:
• Industrial Automation
• Electronic and Mechanical Components
• Automotive Electronic Components
• Social Systems
• Healthcare
• Environmental Solutions
Creating the unique type of value
that only Omron can.
Electronic and Mechanical Components Business (EMC)
Providing the global market with sophisticated components
that create benefi cial relationships between people and
machines in a variety of fi elds
Relays, switches, connectors, and other fundamental components for use
in industrial equipment, consumer and commercial products, automotive
equipment, and various other items. Components that are steeped in our
superior technologies and have developed over our long history of operation.
13%
Relays
(Global Market Share)
20%
Source: Internal survey
Automotive Electronic Components Business (AEC)
Undertaking new challenges in the automotive electronics
fi eld to help make automobiles safer and friendlier toward
people and the environment
Power window switches with anti-pinching functions, keyless entry systems,
and various other products that utilize our highly functional controller, sensor,
switch, and relay technologies to make motoring safer and more comfortable.
15%
Body Control Units for
keijidousha (a class of
small automobiles defi ned
by Japanese standards)
(Japanese Market Share)
¥59.2 billion
(9%)
50%
¥71.5 billion
(11%)
Social Systems, Solutions and Service Business (SSB)
Offering diverse systems for social infrastructure to assist
making society safer and more comfortable for everyone
Includes train station solutions, such as automated ticket gates and ticket
vending machines, as well as traffi c control systems and other road
traffi c solutions.
Healthcare Business (HCB)
Providing a comprehensive product lineup to support daily
healthcare efforts, whether at home or at medical facilities
Digital blood pressure monitors highly accurate and easy to use at home,
with the number one share of the global market. Continually introducing
new healthcare products and services into the global market, including
thermometers, nebulizers, and pedometers.
11%
11%
Other Businesses
Exploring and developing new businesses outside the realm
of the main fi ve segments / Environmental solutions business
and other operations playing an important part in advancing
the Omron Group’s growth strategy
Energy conversion and control technologies to help maximize energy
effi ciency with regard to energy creation, storage, and saving, and plug-in
module PC and uninterruptible power supply units to provide security and
reliability for the IT and industrial equipment markets.
9%
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Omron Corporation
Source: Internal survey
Railway Infrastructure
Equipment
(Japanese Market Share)
40%
Source: Internal survey
HCB
CB
Home-Use Digital Blood
Pressure Monitors
(Global Market Share)
SSB
50%
Source: Internal survey
Residential-Use
PV Inverters
(Japanese Market Share)
¥68.8 billion
(11%)
FY1990
Net Sales
¥464.4 billion
Changed name from
OMRON Tateisi Electronics Co.
to Omron Corporation
Began operating as
a “New Omron”
¥263.0 billion
(40%)
Eliminations
and corporate
¥6.3 billion (1%)
Other
r
FY2012
Net Sales
¥650.5 billion
IAB
A
AEC
EMC
33%
Source: Internal survey
¥97.6 billion
(15%)
¥84.1 billion
(13%)
Integrated Report 2013
11
Display and
Operating Devices
Proximity Sensors
Nerve System = Network
Indicator Display
Equipment
Senses =
Sensing Devices
Brain = Control Equipment
Limbs =
Motion Devices and Drives
• Safety Equipment
IAB’s safety equipment meets
international safety standards and
contributes to the creation of a safe
workplace environment by automati-
cally sounding an alarm or safely
shutting down machinery when a
worker enters a defi ned danger
zone in a factory.
Safety Controllers
Safety Light Curtains
• 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 effi ciency.
cy.y
Air Particle Sensors
• Automated Optical
Inspection Devices
Segment
Information
P.50
IAB’s automated optical inspection devices use
visual cameras and other means to detect
defective products, thereby helping production
processes to be automated.
Vision
Sensors
Photoelectric
Sensors
t
T
Temperature
Controllers
Programmable
Logic Controllers
Inverters
Servomotors and
Servo Drivers
Safety Door Switches
Safety Laser Scanners
Air Cleaning Units
Ionizers
Air Thermal Sensors
• OKAO Vision
OKAO Vision is gaining wide use as a
technology for correcting exposure in
digital photography and brightness in
photo printing, and its face recognition
capability is utilized in mobile phone
user verifi cation as well as in estimat-
ing age and determining gender.
OKAO Vision Facial
Image Sensing
Printed Circuit Board Power Relays
Surface Mount
Switches
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.
• Social Sensing
Sensors located in public settings
gather data on the movement and
conditions of people, automobiles,
and other objects and provide
optimal information to people and
control equipment.
• Connectors
Connectors are used as an interface
between electronic devices and are
widely used in mobile devices,
industrial equipment, and other
electronics.
• Automotive Switches /
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.
Printed Circuit Board
Inspection Systems
Segment
Information
P.52
Printer Toner Sensors
Power Supply Units for
Amusement Devices
Segment
Information
P.54
FPC Connectors
• Sensors and Modules
We respond to various needs
from the digital imaging and
amusement industries.
• Electric Power Steering
Controllers
Electric power steering controllers
are equipped with high-output and
high-precision sensing functions to
enable smooth steering. These devices
help achieve energy savings and
better mileage.
Power Window Switches
Electric Power Steering
Controllers
• Road Traffi c Solutions
In addition to control systems for traffi c
volumes and traffi c conditions, SSB is
developing next-generation traffi c
safety systems designed to prevent
accidents by transmitting data on
pedestrians, bicycles, and other objects
collected by sensors to nearby vehicles.
Segment
Information
P.56
Segment
Information
P.58
• Industrial Automation Business
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 confi guration
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.
• Relays and Switches
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.
• Transmitter Key and Engine
Start Systems
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.
• Train Station Solutions
SSB provides systems solutions,
including the newest models for
automated ticket gates and ticket
vending machines using universal
design concepts, to increase the
comfort and effi ciency of train stations.
• Healthcare and Medical
Devices for Home Use
HCB supports the health of individuals
by connecting daily personal health
management at home and disease
management at medical institutions.
Automated Ticket Gates
Ticket Vending Machines
Smile Scan Tablets
Traffi c Control Systems
• Medical Devices
for Professional Use
By supplying medical institutions
with highly safe technologies, we
are reducing the risks associated with
healthcare. At the same time, we are
helping develop a society in which
the elderly live healthily.
Sleep Sensors
Blood Pressure
Monitors
Body Composition
Monitors
Body Glucose
Meters
Thermometers
Activity Monitors
Spot Check Monitors
Non-Invasive Vascular
Screening Devices
• PV Inverters for Solar Power
Generation Systems
These PV inverters are used to convert the
DC electricity generated by solar panels into
AC electricity usable in the home. They
contribute to the spread of solar power
systems, a source of renewable energy,
by giving engineers more freedom of design
and improving system effi ciency.
• LCD Backlights
Microlens array technology with
several million micron-sized micro
lenses to maximize light utilization
effi ciency contributes to brighter and
slimmer mobile phones with lower
power consumption.
• Micro Devices
Omron provides new applications
centering on micro electrical
mechanical systems (MEMS).
• Electronic Systems
and Equipment
Business activities related to computers,
devices, uninterruptible power supply
units, and other electronic systems
and equipment.
Segment
Information
P.60
PV Inverters for
Indoor Solar Systems
LCD Backlights
MEMS Absolute
Pressure Sensors
BY-S Series, Uninterruptible
Power Supply Units
12
Omron Corporation
Integrated Report 2013
13
Omron’s
Global Network
Local-oriented business in 35 countries and regions
across the globe, including Japan. More than 35,000
Group employees actively express their values
and appreciate others, strongly bonded toward
creative innovations.
Europe
Japan
Greater
China
Americas
Asia
Pacifi c
Countries and Regions with Omron Bases
Americas
Brazil
Canada
Mexico
The United States
Greater China
China
Hong Kong
Taiwan
Europe (Including Europe, Russia, Africa, and the Middle East)
Austria
Belgium
The Czech Republic
Denmark
Finland
France
Germany
Hungary
Italy
The Netherlands
Norway
Poland
Portugal
Russia
South Africa
Spain
Sweden
Switzerland
Turkey
The United Kingdom
Asia Pacifi c
Australia
India
Indonesia
Malaysia
New Zealand
Singapore
South Korea
Thailand
Vietnam
14
Omron Corporation
Direct Exports
1.6% ¥10.6 billion
Asia Pacifi c
8.4% ¥54.8 billion
Greater China
16.3% ¥106.3 billion
Europe
12.4% ¥80.5 billion
Americas
12.4% ¥80.4 billion
Asia Pacifi c
13.8% 4,895
Greater China
41.7% 14,778
A
b
o
u
t
O
m
r
o
n
Ratio of overseas sales
to net sales
51.1%
FY2012
Consolidated Net Sales
by Region
¥650.5 billion
Japan
48.9% ¥318.0 billion
FY2012
Employee Numbers
by Region
35,411
Ratio of overseas employees
to total employees
67.7%
Japan
32.3% 11,449
Americas
6.5% 2,284
Europe
5.7% 2,005
As of March 31, 2013
Integrated Report 2013
15
Omron through the Year
Q1
–1.0%
Consolidated net sales
Consolidated operating income ¥8.2 billion –32.7%
¥149.9 billion
Q2
¥154.3 billion
Consolidated net sales
Consolidated operating income ¥9.8 billion
+1.7%
–7.1%
Q3
+6.6%
Consolidated net sales
Consolidated operating income ¥9.9 billion +32.7%
¥159.5 billion
Q4
¥186.8 billion +12.1%
Consolidated net sales
Consolidated operating income ¥17.5 billion +75.0%
(YoY change)
(YoY change)
(YoY change)
(YoY change)
2012
April
May
June
July
August
September
October
November
December
January
February
March
2013
A
b
o
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O
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n
Management Topics
Apr. 9
Press Release
Donation of ¥18,723,000 from sales proceeds of
KM Series of electricity monitors to assist post-
Great East Japan Earthquake reconstruction
June 1 Commencement of joint venture between
Omron (China) Co., Ltd., and Hangzhou Tongling
Automation Co., Ltd., a system integrator and
sales agent
M
June 12 Establishment of regional head offi ce in Brazil
Press Release
strengthens operations in this country’s market,
an emerging market prioritized after India
July 2
Joint establishment of docomo Healthcare, Inc.,
a company that plans, develops, and provides
healthcare services, by NTT Docomo, Inc.,
and HCB
July 6 Opening ceremony held at new factory of AEC
in Rojana Industrial Park, Ayutthaya, Thailand
M
Aug. 24 OMRON TAIYO Co., Ltd., celebrates 40th an-
niversary and holds ceremony commemorating
opening of new building
M
Management
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
Sept. 3 Agreement reached between Sobal Corporation
Jan. 30 Announcement of joint project to utilize big
and Omron to collaborate in development of
embedded software
Oct. 1
Conversion of SK Solution Co., Ltd., a dealer of
control equipment, into subsidiary
M
Nov. 7 Donation of US$20,000 for relief of hurricane
Press Release
victims in eastern United States
M
Nov. 8
Press Release
Receipt of IR Grand Prix Award from Japan
Investor Relations Association
data at production sites by Microsoft Japan and
Omron; collaboration between two companies
leads to development of system for tracking
production activities
Mar. 7 Opening ceremony held at new factory of
Shanghai OMRON CONTROL COMPONENTS
Co., Ltd., designed to be the No.1 automated
EMC factory in China
Product-Related Topics
April 13
Receipt of Award for Excellence
in Japan Electrical Manufacturers’
Association 2012 (61st) Electrical
Industrial Technology Achievement
Awards for development of fi ber
laser marker capable of fi ne mark-
ing on highly refl ective materials
and low-absorbance materials
May 10
Launch of MedicalLink blood
pressure management service
for medical institutions employing
information technology
Simultaneous launch of HEM-
7251G blood pressure monitor that
automatically transmits measure-
ment data over 3G networks
May 28 (Press release)
Development of hand gesture
recognition technology that makes
trigger motion unnecessary when
combined with face-sensing
technologies
June 1
Launch of Demand Light Service, a
new application service provider (ASP)
demand monitoring service capable
of monitoring electricity demand
through remote monitoring systems,
realizing lowest market price
June 20
Launch of HBF-215F Karada Scan
body composition monitors, which
feature compact, thin designs with
easy-to-view displays and commu-
nications functions
June 30
Launch of non-contact MEMS
using infrared thermal sensor that
is smaller and more sensitive and
contributes to energy-saving
home electronics
July 2
Release of industry’s fi rst clamp
electricity data logger that acceler-
ates energy-saving efforts at
manufacturing sites
July 5 (Press release)
Development of MEMS absolute
pressure sensor with world-class
sensitivity and power effi ciency
August 1
Release of Smart Camera FQ2
featuring multi-function image
sensors that enable inspection and
positioning to be decided using the
camera alone
August 23
Launch of HEM-6310F, world’s
thinnest, lightest, and quietest
wrist-type blood pressure monitor
that enables measurement data
to be easily transmitted to PCs
for management
September 3
Launch of HBF-252F Karada Scan,
a body composition monitor
equipped with instantaneous
automatic recognition function for
measurement in approximately four
seconds and communication func-
tion for easy management of data
on AndroidTM smartphones or PCs
October 1
Launch of world’s smallest and
lightest DC power relay for eco-
friendly vehicles and condensers
October 15
Commencement of sales of
uninterruptible power supply units
in China
November
Launch of KP55M Series of outdoor
single phase PV inverters compat-
ible with feed-in tariff scheme for
renewable energy (KP44M Series
launched in December)
December
Launch of ultra-compact CMOS
laser sensor E3NC-S series capable
of being installed in narrow spaces
December
Launch of backfl ow preventing relay
MM1X-PV, which contributes to
maximized energy conversion
effi ciency at megasolar facilities
December 3
Launch of NB series of programmable
terminals that provide undisputed
levels of cost performance
Addition of CP1E to lineup of
programmable controllers
December 18
Launch of English and Chinese
versions of TranScope real-time
translation application, which pro-
vides instant translations by reading
text through iPhone or AndroidTM
smartphone cameras
January 25
Receipt of METI Minister’s Prize in
Energy Conservation Grand Prix
Program for promoting an eco-
conscious initiative for plant diag-
nostics and optimization through
Andon environmental information
system
January 25
Receipt of METI Minister’s Prize
in New Energy Grand Prix Program
in recognition of KP-K series of
PV inverters for solar power
generation systems
February 20
Launch of HR-500U, which can be
strapped to one’s wrist to measure
pulse while walking or jogging
March 1
Launch of Mediclean HT-B601
ultrasonic electric toothbrush,
which comes with handy mobile
case equipped with charger that is
ideal for vacations or business trips
March 21
Launch of thermal fl ow-type
MEMS differential pressure
sensor aimed at maximizing air-
conditioning effi ciency
March 28
Provision of Solamoni3G, a solar
power generation system support
service that helps guarantee
generation effi ciency and quality
of medium-scale systems
16
Omron Corporation
Integrated Report 2013
17
11-Year Financial Highlights
Omron Corporation and Subsidiaries
Operating Results (for the year):
Net sales
Gross profi t
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 fl ow (Note 3)
Net cash provided by (used in) fi nancing 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 profi t margin
Operating income margin
EBITDA margin
Return on shareholders’ equity (ROE)
Ratio of shareholders’ equity to total assets
Total return ratio (Note 5)
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2012
Millions of yen
Thousands of
U.S. dollars (Note 1)
A
b
o
u
t
O
m
r
o
n
¥522,535
201,816
¥575,157
235,460
¥598,727
245,298
¥616,002
232,667
133,406
139,569
141,185
157,909
40,235
28,175
57,851
511
41,854
(30,633)
11,221
(1,996)
567,399
71,260
251,610
2.1
1,036.0
10.0
38.6%
5.4%
11.1%
0.2%
44.3%
2475.3%
46,494
49,397
77,059
26,811
80,687
(34,484)
46,203
(28,119)
592,273
56,687
274,710
110.7
1,148.3
20.0
40.9%
8.6%
13.4%
10.2%
46.4%
49.2%
49,441
54,672
83,314
30,176
61,076
(36,050)
25,026
(40,684)
585,429
24,759
305,810
126.5
1,284.8
24.0
41.0%
9.1%
13.9%
10.4%
52.2%
29.1%
55,315
60,782
91,607
35,763
51,699
(43,020)
8,679
(38,320)
589,061
3,813
362,937
151.1
1,548.1
30.0
37.8%
9.9%
14.9%
10.7%
61.6%
47.8%
¥723,866
278,241
164,167
52,028
62,046
95,968
38,280
40,539
(47,075)
(6,536)
(4,697)
630,337
21,813
382,822
165.0
1,660.7
34.0
38.4%
8.6%
13.3%
10.3%
60.7%
49.7%
¥762,985
293,342
176,569
51,520
65,253
101,596
42,383
68,996
(36,681)
32,315
(34,481)
617,367
19,809
368,502
185.9
1,662.3
42.0
38.4%
8.6%
13.3%
11.3%
59.7%
74.7%
¥627,190
218,522
164,284
48,899
5,339
38,835
(29,172)
31,408
(40,628)
(9,220)
21,867
538,280
54,859
298,411
(132.2)
1,355.4
25.0
34.8%
0.9%
6.2%
(8.7%)
55.4%
(29.1%)
¥524,694
184,342
¥617,825
231,702
¥619,461
227,887
¥650,461
$6,919,798
241,507
2,569,223
133,426
142,365
145,662
152,676
1,624,213
37,842
13,074
40,088
3,518
42,759
(18,584)
24,175
(20,358)
532,254
38,217
306,327
16.0
1,391.4
17.0
35.1%
2.5%
7.6%
1.2%
57.5%
106.7%
41,300
48,037
71,021
26,782
41,956
(20,210)
21,746
3,333
562,790
46,599
312,753
121.7
1,421.0
30.0
37.5%
7.8%
11.5%
8.7%
55.6%
25.2%
42,089
40,136
62,753
16,389
31,946
(26,486)
5,460
(33,492)
537,323
18,774
320,840
74.5
1,457.5
28.0
36.8%
6.5%
10.1%
5.2%
59.7%
37.7%
43,488
45,343
67,795
30,203
53,058
(28,471)
24,587
(18,550)
573,637
5,570
366,962
462,638
482,372
721,223
321,309
564,447
(302,883)
261,564
(197,339)
6,102,521
59,255
3,903,851
Yen
U.S. dollars (Note 1)
1.46
17.73
0.39
137.2
1,667.0
37.0
37.1%
7.0%
10.4%
8.8%
64.0%
27.0%
Notes: 1. U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2013, of ¥94 = $1.
2. EBITDA = Operating income + Depreciation and amortization
3. Free cash fl ow = 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.
5. Total return ratio = (Total dividends paid + Amount of Company’s own shares repurchased) / Net income (loss) attributable to shareholders
Long-term corporate vision
Grand Design 2010 (GD2010)
Operating Income
Omron applies the “single step” presentation of income under U.S. GAAP (that is, the various levels of income are not
presented) in its consolidated statements of income. For easier comparison with other companies, operating income is
presented as gross profi t less selling, general and administrative expenses and research and development expenses.
Discontinued Operations
Figures for FY2006 and prior years have been restated to account for businesses discontinued in FY2007.
Value Generation 2020 (VG2020)
FY2001 – FY2003
FY2004 – FY2007
FY2008 – FY2010
FY2011 – FY2020
1st Stage Establishing a Profi t Structure
Concentrating on cost structure reform
and restructuring the Company as a profi t-
generating business
2nd Stage Balancing Growth and Earnings
Reinforcing business foundations through
aggressive investment in growth areas, such
as M&A, and cost cutting
Achievements
• ROE of 10%
• Withdrew from unprofi table business, spun off
of the Healthcare Business
• Raised the level of corporate governance to the
global standard
Achievement
• Increased EPS (Earnings per Share) from ¥110.7
(FY2003) to ¥185.9 (FY2007)
3rd Stage Achieving a
Growth Structure
Fortifi cation of growth
business (high profi tability)
Revision of 3rd stage due to an abrupt
change in the business environment
Revival Stage
(February 2009 to March 2011)
• Emergency Measures
(Cost reduction target of approx. ¥63.0 billion achieved
in fi scal 2009)
14 months (February 2009 – March 2010)
• Structural Reform (Strengthening of profi t 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 profi t and growth
structures on a global basis
• Sales: ¥710 billion
• Operating income:
GOALS
¥58 billion
GOALS
• Gross profi t margin: 39%
• Operating income
margin: 8.2%
Note: Target fi gures were revised in April 2013.
EARTH STAGE
(FY2014 – FY2020)
New value generation for growth
• Sales: ¥1 trillion
• Operating income:
¥150 billion or higher
• Operating income
margin: 15% or higher
18
Omron Corporation
Integrated Report 2013
19
Financial and Non-Financial Highlights
Net Sales and Operating Income
Operating Income Margin
(Billions of yen)
1,000
(Billions of yen)
(%)
100
10
800
600
400
200
0
80
60
40
20
0
8
6
4
2
0
08
09
10
11
12
(FY)
08
09
10
11
12
(FY)
Ratio of Social Contribution Activity
Expenditures by Type (Fiscal 2012)
Ratio of Employees with Disabilities
to Total Employees
(%)
(Japanese operations)
Culture and Arts
0.3
Social Welfare
2.0
Science and
Technologies
12.0
International Exchange,
Environmental,
and Others
0.3
Type
(%)
Voluntary Programs
85.5
4
3
2
1
0
08
09
10
11
12
(FY)
Omron
Omron Group (Japan)
National Average (Japan)
A
b
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O
m
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n
Net Sales [left axis]
Operating Income [right axis]
Cost Composition
(Billions of yen)
750
600
450
300
150
0
Net Income (Loss) Attributable to Shareholders
and Return on Shareholders’ Equity (ROE)
Occupational Accident Frequency
Ratio of Participation in Human Rights Training
(Billions of yen)
60
45
30
15
0
–15
–30
(%)
20
15
10
5
0
–5
–10
(Frequency)
(Japanese operations)
(People / hours)
1.0
0.8
0.6
0.4
0.2
0
2.5
2.0
1.5
1.0
0.5
0
15,000
12,000
9,000
6,000
3,000
0
(%)
100
80
60
40
20
0
08
09
10
11
12
(FY)
08
09
10
11
12
(FY)
08
09
10
11
12
(FY)
08
09
10
11
12
(FY)
Cost of Sales
R&D Expenses
SG&A Expenses
Operating Income
Net Income (Loss) Attributable to Shareholders [left axis]
Return on Shareholders’ Equity (ROE) [right axis]
Omron Group [Japan, left axis]
All Industries [right axis]
Electric Equipment Manufacturing
Industry [left axis]
Frequency =
Deaths Due to Accidents
Aggregate Work Hours
×1 Million Hours
Japanese Group Employees [including temps, left axis]
Aggregate Training Hours [left axis]
Ratio of Participation in Human
Rights Training [right axis]
Earnings per Share (EPS) and
Price-Earnings Ratio (PER)
(Yen)
150
120
90
60
30
0
Net Sales per Employee
(Times)
(Millions of yen)
CO2 Emissions Volumes
(Thousand t-CO2)
(Global production sites)
(Million yen / t-CO2)
150
120
90
60
30
0
25
20
15
10
5
0
200
160
120
80
40
0
5
4
3
2
1
0
(Global production sites)
Energy Usage
(TJ)
4,000
3,000
2,000
1,000
0
08
09
10
11
12
(FY)
08
09
10
11
12
(FY)
10
11
12
(FY)
10
11
12
(FY)
Earnings per Share (EPS) [left axis]
Price-Earnings Ratio (PER) [right axis]
Capital Expenditures and
Cash Flows
Cash Dividends per Share
(Billions of yen)
(Yen)
60
45
30
15
0
50
40
30
20
10
0
08
09
10
11
12
(FY)
08
09
10
11
12
(FY)
Capital Expenditures
Cash Flows
* Cash Flows = Net Income (Loss) Attributable
to Shareholders +
Depreciation & Amortization
20
Omron Corporation
CO2 Emissions Volumes [left axis]
Net Sales to CO2 Emissions [right axis]
* Net Sales to CO2 Emissions: Net Sales per Ton of CO2 emitted
Environmental Contribution
of Products and Services
(Thousand t-CO2)
400
300
200
100
0
10
11
12
(FY)
* Environmental Contribution: Reduction in CO2 emissions resulting
from the use of Omron’s energy-saving or energy-creating products
Electricity
LPG
City Gas (13A)
Fuel Oil A
LNG
Diesel Oil
Kerosene
Employee Ratios (As of April 20, 2013)
Female
20.6
Male
79.4
Sales
16.5
Others
11.0
Research
21.9
(Japanese operations)
Gender
(%)
Type of
Job
(%)
Production
21.5
Office Work
29.1
Integrated Report 2013
21
Interview with the President
Interview with the President
Inter
Inter
We conducted necessary investments,
centered on the core IA Business, regardless
of the harsh operating environment.
(FA) markets of emerging countries, where demand will be supported by economic
growth, higher personnel expenses, and rising quality consciousness. While the
IA Business may face ups and downs in its growth pace, it is sure to realize growth
over the long term.
Profi t structure reforms were another area of focus. We have implemented measures
to minimize the impacts of foreign exchange rate fl uctuations, steadily constructing profi t
structures that are resilient to external changes. Profi tability is also being boosted in
non-IA Business, such as AEC, SSB, and HCB. In addition, our environmental solutions
business, a new area of focus, is developing into a highly promising business by generat-
ing revenues at a faster pace than had been initially anticipated.
While implementing reforms, we are also taking action with the next EARTH STAGE now
in view. In the EARTH STAGE, our focus will be targeting new value generation for growth.
We are allocating management resources to focus businesses to facilitate the develop-
ment of the new products and sales networks that will be necessary for future growth.
W
h
e
r
e
W
e
'
r
e
H
e
a
d
e
d
Yoshihito Yamada
President and CEO
VG2020 Scenario
GLOBE STAGE
EARTH STAGE
Net sales
Establishment of profit and
growth structures on a global basis
New value generation for growth
Q1
How are the strategies of the “GLOBE STAGE” progressing, and what
initiatives are being implemented in preparation for the following
“EARTH STAGE”?
First of all, I have to tell you that we made a downward revision to the performance
targets for the “GLOBE STAGE.” Originally, we targeted net sales of ¥750.0 billion, oper-
ating income of ¥100.0 billion, and a gross profi t margin of 42%, but we revised these
targets to net sales of ¥710.0 billion, operating income of ¥58.0 billion, and a gross profi t
margin of 39%. It was a hard decision, but one that was fully considered. One reason for
the revision was out-of-control external factors, including unfavorable foreign exchange
rates, natural disasters, and global economic recession. However, we admit that there
were also internal issues, such as our vulnerability to foreign exchange. We have already
taken steps to address this issue. Also, performance in the Industrial Automation (IA)
Business, which is sensitive to capital investment trends, was lower than expected.
Looking on the brighter side, we’ve been on the right course in that the GLOBE STAGE
is a period for the establishment of profi t and growth structures on a global basis. We
conducted necessary investments, centered on the core IA Business (IAB & EMC), re-
gardless of the harsh operating environment. These investments were geared toward
developing competitive products and expanding sales networks in emerging countries.
We intend to turn these investments into success. While up until just recently a head-
wind has been blowing in the external operating environment, it is possible that this may
change to a tailwind. Should this occur, the investments and preparations we have ad-
vanced until now will generate substantial returns, particularly in the factory automation
Creation of new business
for the “Optimization of Society”
Growth in emerging markets
FY2020
Maximization of Industrial Automation Business
Profit structure reform
Global human resources strengthening
FY2011
FY2013
Policy for Fiscal 2013
Complete the GLOBE STAGE!
Transform Omron into a stronger company that demonstrates synergies between
growth potential, profi tability, and responsiveness to change
Continue and complete the tasks defi ned for the GLOBE STAGE
TASKS
Reinforcement of IA Business
Profi t structure reform
Sales expansion in emerging markets
Strengthening of global human resources
Focus on environmental solutions business
22
Omron Corporation
Integrated Report 2013
23
Q2
What are your projections for the environmental solutions business
and other businesses that address social needs?
Let me take our HCB and environmental solutions business as examples. HCB aims
to contribute to improving the health of people around the world through its products.
Presently, we are seeing a rise in the number of sufferers of respiratory illnesses in
emerging nations, where air pollution issues are growing ever graver. In addition,
changes in lifestyle environments are resulting in an increase in the number of people
with high blood pressure, diabetes, and other cardiovascular related diseases, and this
is becoming a serious social issue. In this market environment, contributing to health-
care will require higher awareness whereby people monitor and manage their health
condition at home as well as in hospitals. Should the concern for disease prevention rise
in emerging countries, it could lead to a decrease in serious event risks related to heart
attacks, strokes, or other infl ictions. To facilitate such a change, Omron is working to
foster proper understanding with regard to health issues among practitioners, such as
doctors and pharmacists, and patients alike. At the same time, we are developing and
selling easy-to-use healthcare devices to meet the local circumstances and specifi c
demand. HCB currently operates in more than 110 countries around the world, and we
are actively expanding sales channels in this business with a particular focus on emerg-
ing nations. In fi scal 2012, this focus area recorded a 30% year-on-year increase in sales
on a yen basis. In fi scal 2013, we will aggressively develop the business to increase our
contribution to addressing growing healthcare issues.
In the environmental solutions business, we are working to resolve social issues in the
clean energy fi eld through the sale of PV inverters for solar power generation systems
and DC power relays for electric vehicles.
In particular, installations of PV inverters doubled in fi scal 2012 due to the benefi ts of the
feed-in tariff scheme for renewable energy that was launched in Japan during July 2012.
We expect the market will expand in light of concerns for the depletion of fossil fuel re-
serves and environmental pollution,
such as that from CO2 emissions.
Personally, I have the highest
expectations for energy-saving busi-
nesses in the FA market. Energy
management at production sites will
be more important than ever to lead
to an expansion of business opportu-
nities for the Company. Omron itself
is vigorously advancing electricity-
saving initiatives at its plant in Kyoto.
By leveraging the knowledge gained
through this venture, we will grow
energy-saving businesses targeting
manufacturing markets around
the world.
Enhancing corporate value—that’s our focus.
Q3
Q4
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You mentioned transforming Omron into a stronger company that
demonstrates synergies between growth potential, profi tability, and
responsiveness to change. What exactly do you mean by “responsiveness
to change”?
Put simply, it’s the ability to transform risks and changes into opportunities, and when
I say changes I am referring to both positive and negative changes.
We can't do business without taking negative changes and risks into consideration.
We must take steps to limit the impacts of risks on our business. Even an unprecedent-
ed event, such as the Great East Japan Earthquake of 2011, must be incorporated into
medium-to-long-term management plans. For example, based on what we learned from
the earthquake, we reevaluated our production sites in consideration of the risk of a
large-scale natural disaster. And we developed systems that will allow the production
operations at one site to be quickly shifted to another should that site be rendered tem-
porarily unable to produce. I believe that the ability to create benefi ts from risks is one
form of responsiveness to change.
Moreover, as a global company, we need to respond to changes on a global scale.
Over the past two years, we have placed a particular focus on making our operations
more resilient to fl uctuations in foreign exchange rates and rises in personnel expenses
in emerging nations. Faced with the strong yen, we worked to limit the impacts of for-
eign exchange on profi ts by increasing transactions in foreign currencies, procuring more
items locally, and other means. Also, we installed automation systems into our own
factories in China and other Asian countries to offset the rise in personnel expenses
in these countries.
At the same time, we recognize that positive changes represent opportunities we must
grasp. Since the introduction of the “Abenomics” economics stimulus plan, the too-high
yen became weaker and export-oriented companies in Japan are tending healthy. We are
working to quickly reap the benefi ts of these and subsequent accompanying market
changes, seeking to turn the various risks and changes that surround the Company into
opportunities so that we may transform Omron into a stronger company.
How are you pursuing increased shareholder value in management?
To raise corporate value, we are looking at both the quantitative and qualitative sides of
operations. For the quantitative side, we emphasize management of capital costs and
cash fl ows in our operations.
Looking at capital costs to begin with, we utilize the management index of return on
invested capital (ROIC) to ensure that each business generates returns that are appropri-
ate in consideration of their individual capital costs. This index is considered from the
stage of developing strategies for each business, and we evaluate investment projects
and propose improvement measures for asset effi ciency accordingly.
Next, we are focusing on cash fl ow management to realize growth. Currently, free
cash fl ow is positive, and net cash is trending upward. While we are of course always
considering returns to shareholders, at the moment we feel it is best to invest these
funds in future growth, through such means as M&A activities.
Finally, to further reinforce this quantitative focus, from fi scal 2013, we have established
the new position of Chief Financial Offi cer (CFO). We anticipate the CFO, by serving as
the “brain” of the fi nancial side of operations, will be a driving force in boosting both the
quality and speed of decisions related to portfolio management.
24
Omron Corporation
Integrated Report 2013
25
Q5
The post of CFO has been fi lled by Yoshinori Suzuki, who was previously responsible
for management of AEC. Mr. Suzuki has accumulated a wealth of fi nancial knowledge
throughout his career. He also has a strong reputation in the Company for his ability to
reconstruct AEC as its company president during a time when the business was per-
forming quite poorly. Moreover, Mr. Suzuki has been responsible for Companywide
management in the past, when he was placed in charge of formulating management
strategies. For these reasons, we have very high expectations for him. With the new
inclusion of the CFO in the management team, we will conduct even more effective
management with our emphasis on improving corporate value.
Is there anything else you view as important in enhancing corporate value?
Developing human resources and cultivating the corporate culture are both crucial tasks
as these elements underpin corporate activities. As the Company will continue to ex-
pand its business on the global stage and seek to transform into a stronger company,
the development of human resources around the world is crucial. Currently, we have
defi ned 170 “core positions”, and we are actively working to discover and promote
human resources to fi ll these positions. In particular, we are working to fi ll overseas
management positions locally. Elsewise, we are still faced with diversity issues, such
as the promotion of women. However, we are taking steps to address these issues by
establishing specialized teams.
In regard to corporate culture, in fi scal 2012 we inaugurated The OMRON Global
Awards (TOGA). This award program was designed to reward employees for acting on
the spirit we have held since our founding and embarking on bold undertakings to meet
ambitious goals they themselves have declared. The program was also designed to culti-
vate a corporate culture that encourages employees to take on new challenges without
fear of failure. In this competition, more than 20,000 entries, representing over half of
our staff worldwide, formed teams that stepped across national and organizational
boundaries. Then, on “Founder’s Day” in May 2013, awards were presented to the top
13 teams. We intend to continue this initiative into the future. What matters most is to
Production site in China
Sales base in Singapore
We are boldy addressing social issues on a global basis
to make Omron a social must.
proactively take on diffi cult tasks. For this reason, I hope to cultivate a superior corporate
culture that will inspire employees to unite as a strong team that communicates openly
and continues to endeavor to do great things, whether or not we hold such events.
Also, I am aware that communication forms the basis of a good corporate culture. In
accordance with this belief, we hold “The KURUMAZA,” a meeting in which I speak directly
with employees. In fi scal 2012, I visited a number of production sites, principally in Asia.
No suit and tie, I walk around factories in work clothes and speak to the staff therein.
Speaking face-to-face makes it easier for me to express myself and for employees to ex-
press themselves as well. This also enables me to directly learn issues in these worksites.
Outside of work, cheering on our women’s handball team is an important event. The
Omron Handball Team has been reigning champion of the women’s league in Japan. As
a handball player myself in my student days, I get over-excited when it comes to hand-
ball. Cheering our team with employees is thus a special occasion for me. In particular,
the championship match of the Japan league, held in March 2013, was incredibly exciting
as we rooted for our team until our throats were sore and shared in the victory together.
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Omron Handball Team wins Japan women’s league for the
16th time and for the 2nd consecutive year (March 14, 2013)
In closing, I would like to share with you something that is of exceptional importance to
myself. This is the Omron Principles. Currently, roughly two-thirds of the employees that
advance Omron’s international operations are non-Japanese. As such, a diverse range of
values exist within the Company. For this reason, the Omron Principles play an important
role as the binding force that unites all employees throughout the Group. The spirit em-
bodied by these principles and our corporate motto guide us as we work to overcome
cultural and language barriers and form a tightly knit team in which all members hold high
ambitions. We continue to boldly take on new challenges to address global issues as we
strive to make Omron a company that people around the world require, with high expec-
tations. Please look forward to the future endeavors of Team Omron.
26
Omron Corporation
Integrated Report 2013
27
Research and production base in the United States
Core Theme
1
Industrial Automation Business (IAB) and Emerging Countries
History of Automation
and Asian Market of Today
Factory Automation (FA) Growing
Together with People’s Lives
Evolution of Automation
at Production Sites
By supporting factories, Omron has continued to
encompasses all aspects of product creation, includ-
ing production and other processes, management
systems, and quality management techniques.
Omron created the world’s fi rst contactless switch,
which contributed to the development of machines
contribute to the daily development of a more ful-
that could conduct mass production without wear
fi lling and convenient society.
As the focus of production activities changed
from people to machines, we have continued to
or malfunction. The realization of mass production
resulted in an ample supply of products being put
on the market, helping consumers acquire the
advance technological innovation in the fi eld of FA.
items they need with greater ease.
In the mid-20th century, automation was advanc-
In 1972, Omron successfully developed its Sys-
ing in strides in developing nations. Omron de-
mac programmable controller and continued to lead
clared 1955 as “Year One of Automation.” It was
the advance of automation by proposing new value
one of the fi rst companies in Japan to begin devel-
using its revolutionary technologies, such as its
oping and promoting the spread of relays, timers,
ultra-high-speed fuzzy logic controller and visual
and switches, all items that are indispensable in
sensors that can play the part of human eyes, both
automating the movement of machines. Through
world fi rsts. The advance of automation drove
those efforts, Omron helped drive the shift from
growth in the economy, which in turn made peo-
people to machines as agents of production, there-
ple’s lives more comfortable and convenient. We
by reducing human error brought about by extend-
ed work periods and subsequently improving
believe that such automation advancements made
substantial contributions to Japan’s period of strong
production effi ciency and making workplaces safer
economic growth.
for people.
At the same time, we developed the base for
mono zukuri (manufacturing) technology, which
Development of Safer Workplaces
The advance of automation led to a decline in the
need for humans to conduct dangerous tasks.
However, as machines became more powerful,
they eventually came to pose risks to people.
Omron identifi ed that guaranteeing the safety of
machines toward humans is an important theme
and developed safety sensors, which automatically
halt dangerous machines should a worker approach
them, and safety door switches that prevent work-
ers from approaching dangerous machines in the
fi rst place. At the same time, Omron actively pro-
moted the standardization of automation safety
regulations and transmitted information to educate
the market with regard to safety, working to create
safer production sites around the world.
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For Safer Workplaces
• Safety Light Curtains
Halt machines when
a person approaches
equipment that contributes to energy savings. Fur-
ther, we have created means of applying “Sensing
and Control” technologies to energy to reduce
consumption, and these technologies have been
introduced into Omron’s own production sites.
For Environmental Preservation
• Temperature and
Humidity Sensors
• Electricity monitors
Measure electricity
usage
• Safety Door Switches
Halt machines when
doors are opened
Preservation of Natural Resources
When considering natural resources, it is clear
that the energy used by machinery and the impure
substances they emit represent serious environ-
mental issues.
Omron has been proactive in making the automa-
tion equipment it produces lead-free and therefore
more eco-friendly. In addition, we have developed
more precise control technologies to prevent mate-
rials from going to waste due to the production of
defective products.
• Differential Pressure Sensors
Measure pressure differences
between clean rooms and
the outside environment
• Particle Sensors
Measure dust in
clean rooms and
equipment
Future Potential of Automation
FA around the World
Automation has undergone a startling evolution in
Japan over the years. Today, the contributions of
To lower energy consumption, which is particu-
automation’s evolution are everywhere and automa-
larly high in the manufacturing industry, we have
tion technologies have spread throughout the lives
developed an array of sensing, display, and control
of countless people.
28
Omron Corporation
Integrated Report 2013
29
Operations Well Established
in Each Country
Industrial Automation Business (IAB) currently
the 1990s, we continued to develop production and
sales bases while working to make these bases
more locally operated. Later, in 2005, we consoli-
tions of the fundamental mechanisms of equip-
ment and their usage and are made available in
13 languages, including English, Chinese, Vietnam-
operates out of more than 160 bases in more than
dated three factories in China to make a facility that
ese, Thai, and Indonesian.
We began developing operations in China imme-
Hong Kong, Taiwan, China, Indonesia, Thailand,
Repair center in Thailand
40 countries.
would become the core production and develop-
IAB was quick to expand operations into Asia, a
ment base for the global development of IAB. This
move that was partially based on geographic con-
was the birth of Omron (Shanghai) Co., Ltd. (OMS).
siderations. Over half of the world’s population is
Today, we have a comprehensive range of business
concentrated in this region, as emphasized by the
functions well-established in China, including pro-
presence of such “populous giants” as China and
duction, sales, development, planning, services,
India, which boast the world’s fi rst and second
support, and research functions.
largest populations respectively, as well as by the
In addition, IAB has 98 sales bases in 11 coun-
ASEAN countries, which collectively represent the
tries throughout Asia, including Japan.
third largest population. Realizing the great poten-
The development of operations in the Asia Pacifi c
tial for automation to contribute to the development
region began with the establishment of the OM-
of Asia, we were not hesitant in fi rmly establishing
RON Singapore PTE LTD. in 1972. Later, we estab-
operations in this region, which we then utilized to
lished our fi rst production base in Malaysia. Since,
continue our ongoing pursuit to further the advance
we have continued to be a leader in Asia, quickly
of automation.
developing operations that are fi rmly established in
diately after Sino-Japan trade relations were re-
Vietnam, India, and other areas.
stored in 1972, and Omron founder Kazuma Tateishi
proceeded to deepen relationships with this coun-
try thereafter. In the 1980s, we began outsourcing
production to China, helping introduce our accumu-
Connection of Customer Feedback
to All Areas of Operation
Today, it is more important than ever for us to posi-
lated Japanese production technologies into this
tion ourselves closer to customers so that we can
country. At the same time, we established sales
quickly recognize their needs and use these to
outlets in major operating bases, enabling us to
drive change. It is important to refl ect market
support the development of the Chinese economy
needs and changes as well as customer feedback
with our state-of-the-art automation equipment. In
into our products and services. Further, the feed-
Development and
Product Improvement
Bases
Japan, China
Repair Centers
Japan, China, Taiwan, Singapore,
Thailand, Malaysia, India, Vietnam,
Indonesia, the Philippines
back gained from customers who use the products
and services created through this process must
once again be incorporated into products and ser-
vices to spur us forward on the path of constant
evolution. Through the ever revolving cycle of incor-
porating customer feedback into products and ser-
Shanghai Plant
vices, we are actively adapting our operations
to the characteristics of individual regions.
Automation Centers
Japan, China, India (Planned)
This cycle has led to the development
Sales Bases
Japan: 27, South Korea: 4,
Greater China: 53, Asia Pacific: 14
Malaysia Plant
Help Desks for
Japanese Customers
China (Shanghai, Beijing, Guangzhou),
Thailand, Indonesia
Indonesia Plant
Call Centers
Japan, China
of a rich lineup of services and support.
For example, our free e-learning courses
are a form of service and support born out
of the demand for ways to quickly and easily
learn about the latest products and technologies.
These courses provide comprehensive explana-
e-Learning Programs—Virtual FA Tours
Vietnamese
Thai
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and medicine bottles in India was often poor, and
bottles with chipped or warped mouths were fre-
quently shipped and sold at stores. However, con-
sumers became more sensitive toward the quality
and safety of the products they purchased, and this
resulted in a movement devoted to preventing
manufacturers from placing bottles with quality
Indonesian
issues on the market. To support this movement,
Evolution of Automation
In Asian countries, global issues must be addressed
in conjunction with region-specifi c issues.
1. Automation Examples (India)
Food Packaging Equipment
Company A is a food packaging equipment manu-
IAB supplied visual sensing equipment that was
able to analyze the condition of bottle mouths from
recorded images. This enabled all bottles to be
quickly and automatically inspected, thereby pre-
venting the shipment of low-quality bottles.
Metal Processing Equipment
Company C is a manufacturer of metal processing
equipment. This company recognized the need to
ensure worker safety, but at the same time it want-
ed to avoid declines in production volumes or pro-
ductivity that would have resulted from excessive
facturer. As consumption trends accelerated in India,
safety measures, such as fencing off all machines.
this company was faced with the need to further
IAB helped this company realize a workplace that
expand its production volumes. However, the equip-
is both safe and productive by utilizing the safety
ment control system it possessed was unable to
respond to the higher production volumes. To ad-
sensors that are standard equipment on machinery
in developed nations. These sensors were placed
dress this issue and improve productivity, IAB
in optimal positions around areas where danger
helped the company shift to a state-of-the-art sys-
was present.
tem combining controllers and motion, which real-
ized substantial improvements in processing speed
and control precision in comparison to the previous
system. After the shift, the company was able to up
2. Automation Example (Indonesia)
Food Production Equipment
Company D is a sugar manufacturer. At the com-
its production volumes 1.5 times, enabling it to pro-
vide customers with a stable supply of products.
pany, employees previously had to directly confi rm
temperature, humidity, and other variables related to
Food Product Inspection Equipment
Company B is a manufacturer of food product in-
the sugar refi ning processes and then record this
information in production logs by hand. For this
reason, employees were unable to leave refi ning
spection equipment. In the past, the quality of drink
equipment unattended, and they often spent eight
30
Omron Corporation
Integrated Report 2013
31
hours a day doing nothing but confi rming variables.
In order to respond to such global issues related to
By introducing computers equipped with data log-
safety and the environment as well as the need for
ging software along with controllers, IAB helped
high-speed, high-precision control, IAB accumulates
create a system in which all this numeric data is
recorded automatically by computers. This system
successfully reduced the amount of time employ-
cutting-edge technical expertise within its Automation
Centers* so that it may transmit unique technologi-
cal applications throughout the world.
ees devoted to these monitoring tasks to one hour a
day. Workers were thus freed from the task of con-
fi rming variables all day long, which in turn allowed
them to use this time to revise production process-
es and implement other improvement activities.
* Automation Centers provide support services to help people make machines move
as they please. The support services provided by these centers include easing the
connection of equipment from different manufacturers, a task that previously
required substantial time investments, and assistance in realizing high-speed,
high-precision control for demanding pieces of machinery. Also, the centers help
customers quickly install machinery with ease. In these ways, the centers aid our
customers in developing competitive machinery setups.
3. Automation Example (Thailand)
Electricity-Saving Initiatives
Rising costs in Thailand have resulted in a shift
Evolution Driven by Customer Needs
We work to address the various issues faced by
specifi c regions by developing solutions from the
perspective of local customers in these regions.
toward less-wasteful activities at production sites.
The number of products with different specifi ca-
Effi cient electricity use is being considered as one
tions produced by OMS has grown 2.5 times over
way of realizing such activities. As such, factories
the past three years. When looking at the average
are increasingly introducing electricity monitoring
equipment, which can be used to track how much
employee turnover rate in China, OMS has em-
ployee retention rates that are 3 to 5 times better
electricity is being used in specifi c parts of a facility.
than the average. Nonetheless, its operations are
impacted by the rising labor costs and labor short-
falls in coastal areas. For this reason, OMS is em-
ploying Low Cost Intelligent Automation (LCIA) to
make its production operations in this country more
fl exible. Such fl exible production operations are
supported by small robots, a culmination of our
accumulated knowledge and expertise, and the
skills of employees are used to backup this system
while eliminating wastes.
Also, OMS is currently holding tours of its
factories for a wide range of visitors. We hope
that these tours will provide customers with a
model example to be considered in solving their
automation issues while at the same time offering
an opportunity for local companies to learn from
our production expertise.
32
Omron Corporation
Soldering by hand
LCIA soldering robots
• Stable levels of quality
• Capital investment 1/3–1/4
Yearly Personnel Expenses
in Asia’s Manufacturing Sector
(US$)
8,000
6,000
4,000
2,000
0
China
Thailand Malaysia
The
Philippines
Fiscal 2009
Fiscal 2012
India
Indonesia
Vietnam Bangladesh Myanmar
Source: Japan External Trade Organization (JETRO)
Note: Personnel expenses include basic salary, allowances, social security, overtime
payments, and bonuses.
Collaboration between Industry,
Government, and Academia
to Invigorate Local Societies
As one way of rooting our operations to the regions
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Design Contest to help foster the development of
prospective automation engineers and provide edu-
cation regarding state-of-the-art technologies.
* Equivalent to technical colleges in Japan
Optimal Relationship between People
and Machines
Out of our development bases in Japan, Europe,
and the United States, we are able to develop an
understanding of the latest trends related to tech-
nologies and international standards. By leveraging
this advantage of our global operations, we hold
seminars and otherwise provide information to help
spread knowledge.
We also participate in committees for developing
safety standards. In such ways, we are working to
develop social foundations that enable a safe and
optimal relationship to be developed between
people and machines.
Pursuit of Further Evolution
The future of market conditions remains unclear.
Nevertheless, we will continue to take on new
challenges to create innovation while advancing
steady improvements through straightforward and
earnest effort. To this end, we are rethinking the
parts we use, reducing the number of parts con-
tained in our products, revising production pro-
cesses, and otherwise refi ning our technologies.
As automation spreads, people’s lives become
in which we work, we are placing an emphasis on
more fulfi lling, which in turn enables them to be more
education, not only of our employees but also of the
students that will support the future of these regions.
creative at work, leading to the further evolution of
automation. Looking back at the history of automa-
Omron is working to share its corporate philoso-
tion, it is clear that demand for automation will con-
phy with educators in Asia while also providing
tinue growing into the future, as will its potential.
opportunities for students to learn about environ-
IAB will create cycles in which changes in soci-
mental issues and the latest technologies. At Chi-
nese vocational and technical colleges*, we help
teach students about manufacturing while they are
ety’s needs and technical innovation give birth to
one another. And these cycles will be created
around the world. IAB will also work to grow as the
in school and hold Omron Classes, which attract vast
quality human resources. In addition, we hold the
provider that is “No. 1 in control,” “No. 1 in product
lineup,” and “No. 1 in the future” so that it can
Omron Cup Sterling Engine CAR Contest and design
make greater contributions to the ever changing
contests, which are based on the themes of environ-
Asian market.
mental preservation and recycled resources. We also
hold the National University Student Photoelectric
We automate!
Integrated Report 2013
33
memeememmmm
Core Theme
TThh
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Core Them
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2
222
Healthcare Business (HCB) and Emerging Countries
Helping Improve the Health of
People in Emerging Countries
As society develops, social needs for means of preventing and treating illness are constantly rising.
HCB develops its operations based on the unique approach of using these needs as drivers for
advancing innovation in its business. We spoke with representatives from sales and marketing
and global product planning divisions that have engagements in emerging countries in Asia.
Rapid Rise in Asthma and COPD
Sufferers in Emerging Countries
— Looking at the particulate matter 2.5 (PM2.5) issue
in China, it would seem that many emerging coun-
tries are facing air pollution issues, and these issues
are growing ever more serious. Is this the case?
Ozeki: Yes. The air pollution issues in emerging
countries are serious, and not only limited to China.
In conjunction with development, chronic malady is
starting to replace infectious disease as the most
common ailment faced by the populous. In China,
this situation is being compounded by a rise in
smoking*1, and we are noticing a rapid increase in
the number of people with chronic obstructive
pulmonary disease (COPD)*2 as a result. In this
manner, environmental pollution and the trend
regarding respiratory diseases are driving a sub-
stantial increase in the number of people suffering
from asthma and COPD.
— Going forward, how do you plan to address the
social needs created by this situation?
Umeda: I believe we can provide a viable option for
addressing this situation in the form of the nebuliz-
ers. They are a type of medical device that enables
vaporized medicines to be inhaled by sufferers of
asthma and other respiratory diseases. There are
primarily three different types: compressor nebuliz-
ers, ultrasonic nebulizers, and mesh nebulizers.
Compressor nebulizers account for approximately
90% of the entire nebulizer market. However, as
these require liquid medicines to be converted into
a fi ne mist, they are often heavy and noisy. By re-
vising the structure of parts, Omron has success-
fully resolved this issue by creating compressor
nebulizers that are both small and quiet. As an
example of this structural revision, we modifi ed
a pump from one of our mainstay blood pressure
monitors to be used in these nebulizers.
Innovating parts in this manner helps cut costs.
Nevertheless, this was not an easy process as
using the blood pressure monitor pump placed
increased importance on the output capacity of
the atomizing unit in ensuring that the pump could
supply a suffi cient amount of medicine mist.
The development process for this atomizing unit
was conducted steadily over a long period of time.
I think Omron is a rarity among manufacturers in
the world for devoting such effort to a single unit.
Mesh nebulizers are generally smaller and quieter
than compressor nebulizers and can be used while
lying down. However, they are also more expensive
than compressor nebulizers and maintenance of
parts is more of a hassle.
*1 Rise in smoking in China: According to a survey conducted in 2012, the smoking
popu lation in China represents one-third of the total global smoking population.
Moreover, in terms of the percentage of smokers, China is No. 2 in Asia
after Indonesia.
*2 COPD: This term refers to chronic bronchitis or emphysema, which is the No. 4
leading cause of death worldwide. The main cause is smoking, with more than
90% of sufferers also being smokers.
Compressor nebulizer
Mesh nebulizer
Importance of Imagining
Usage Situations
— It would seem that the ability to use mesh
nebulizers while lying down would be a signifi cant
advantage in terms of usage.
Umeda: When nebulizers are used by small chil-
dren, it is common for them to be watched over by
their mothers. However, there are those mothers
who want to have their children use nebulizers while
lying down should symptoms permit. Our desire to
Toru Ozeki
Executive Offi cer
and Senior General Manager
in charge of the Sales and
Marketing HQ–Asia
OMRON HEALTHCARE Co., Ltd.
Masahiro Umeda
Manager,
Group Leader,
Product Planning Strategy HQ
OMRON HEALTHCARE Co., Ltd.
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develop products that are easier for patients to use
in recognition of this fact led to the creation of prod-
ucts customers can use while lying down.
In this way, imagining the actual circumstances
under which customers use our products is of ex-
treme importance in the product planning process.
After conducting usage investigations in various
countries, we learned that there were cases in
which proper treatment methods are not well
known and cases in which our products were being
used in incorrect manners.
Ozeki: Usage circumstances are an important point
of focus even with regard to sales.
In other words, simply introducing products that
we developed for Japan, Europe, or the United
States into the markets of emerging countries does
not always work. In developed countries, users tend
to prefer products that are smaller, lighter, and more
comfortable to use, even if they might be more
expensive. However, in emerging countries, the
primary concern is price, with the second concern
being ease of use. Talking to customers in Asia, we
were surprised to hear how their opinions with re-
gard to the weight and noisiness of products differed
from that of customers in Japan. In some Asian
countries, a heavy product is seen as sturdy and
therefore reliable, and a loud product is perceived as
more effective.
— Are there any other examples of differences
between developed and emerging countries?
Umeda: In Japan, a user would generally place
their nebulizer on a table and use it while sitting in a
chair. However, our investigations in Brazil and India
show that it is common to use nebulizers in bed or
on couches. Also, nebulizers are used to treat colds
or nasal infl ammation in addition to asthma.
In this way, the usage environments for our
products differ from country to country.
Oxygen generators for
Chinese market
Importance of Downstream
Management
— Specially, what product strategies
have you envisioned for emerging
countries?
Ozeki: First, we will introduce
products into China, which is a massive
market with large numbers of potential users. In
2012, we launched an oxygen generator for people
with COPD in China. As such, our initial goal will be
to expand sales in this market, targeting substantial
sales volumes, while simultaneously acquiring sales
knowledge. Next, we will apply this experience to
India, Bangladesh, and other countries.
Umeda: In the future, we will utilize Omron’s techno-
logical prowess to provide these markets with lower-
priced products. If we are to expand sales of
nebulizers, which until recently could only be bought
by the wealthy, among the middle class, we must
provide responses to the unaddressed needs of
people in the middle class and then reduce the price
of these responses. In this endeavor, we will fashion
products that accurately respond to the needs of
emerging countries by taking advantage of the tech-
nologies we have accumulated through the process
of creating products for developed countries.
Ozeki: In regard to sales strategies, the method
of supplying products to local sales agents and
then leaving the act of selling up to them is an
obsolete way of developing overseas operations.
34
Omron Corporation
Integrated Report 2013
35
By leveraging the blood pressure monitors for
which Omron holds the top share in the global
market, we have established a sales network
consisting of approximately 110,000 stores
throughout Asia. The way in which our products
are being sold and bought mainly in drug stores,
the downstream end of the distribution chain,
is of utmost importance.
Each store serves as an opportunity for custom-
ers to become acquainted with Omron. As such,
we are actively holding product explanation semi-
nars for store staff and implementing other initia-
tives to make better use of these opportunities.
Further, if we are to contribute to improved health
among the populous, we have to supply our prod-
ucts to a wide range of customers. However, this
means that we must address more demanding
expectations with regard to product specifi cations
and prices. To help guide a wider range of custom-
ers to our products, we offer extensive advice to
stores, which serve as opportunities for customers
to encounter our products. This advice goes as far
as to make suggestions regarding product displays.
This type of steadfast effort has led us to obtain the
leading share of more than 60% for blood pressure
monitors in India.
Storefront in India
Educational forum for distributor in India
— How high is Omron’s brand recognition in
emerging countries? Also, what competition does
Omron face?
Ozeki: We are actively conducting branding activities
in these countries. For example, in China, we hold
events in which consumers can have their blood
pressure tested for free, and we are also broadcast-
ing commercials featuring characters that appeal to
the populous. As a result of these efforts, 60% of
consumers recognize Omron as a company that
helps prevent and treat lifestyle-related diseases. In
addition, after the Lushan earthquake in April 2013,
we donated approximately 500 blood pressure moni-
tors as relief items to help support the victims of the
earthquake.
I believe that efforts such as these are contribut-
ing to improved recognition of the Omron brand.
Similarly, in India, we employ outdoor advertise-
ments, participate in health-related events, and are
otherwise working to improve brand recognition of
the entire Omron Group.
Umeda: In terms of competition, we have to com-
pete with local companies and many other rivals. In
such an environment, it is not enough to simply sell
our products. We must continue to meet the mar-
ket’s needs for evidence and quality while also
retaining necessary approval, all of which represent
hurdles to be cleared if we are to further develop
our operations. This is no easy task, and even man-
ufacturers from Europe and the United States are
having diffi culty accomplishing it.
Ozeki: In recent years, Chinese and South Korean
manufacturers have been a rapidly growing pres-
ence. These manufacturers all share a strong entre-
preneurial spirit committed to cutting open new
markets. However, these manufacturers still only
provide consumer goods. Conversely, Omron not
only offers consumer goods, it also has a robust
lineup of products for medical institutions. In addi-
tion, we are conducting clinical evaluations with
medical practitioners and educational activities tar-
geting pharmacists.
Our ability to promote the Omron brand as a
brand for medical professionals—equating Omron’s
blood pressure monitors with cardiovascular dis-
Our mission is to help treat people
with respiratory illnesses
in Asia and around the world.
Toru Ozeki
It is not enough to just provide
equipment; I want to provide proper
treatment environments as well.
Masahiro Umeda
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eases, nebulizers with respiratory illnesses, and
blood glucose monitors with endocrine system
diseases—is a powerful tool for differentiating HCB.
For example, in China, we worked on guidelines for
hypertension in cooperation with the Chinese Soci-
ety of Hypertension.
I believe that strengthening our relationship with
local academic circles pertaining to medical institu-
tions and medical practitioners is an important point
to consider when advancing into the markets of
emerging countries.
I also must say that I am always surprised at how
many government or academic leaders create
opportunities to meet with us whenever we visit
Asian countries.
— What factors do you think have contributed to
this warm reception?
Ozeki: It is most likely a result of the reputation
that accompanies our leading share in the global
market for blood pressure monitors. In addition,
the factory automation technologies of Industrial
Automation Business (IAB) are garnering a great
deal of attention in government sectors. In this
manner, both IAB and HCB have established strong
reputations in society.
Economic Value Creates Social Value
— What is the situation regarding environmental
issues in emerging countries?
Ozeki: As one initiative of China’s Twelfth Five-Year
Guideline (2011–2015), mercury was banned for use
in industrial applications, and it is expected that the
Thirteenth Five-Year Guideline will forbid the use of
mercury for medical applications. A similar guide-
line was established in India just recently. For this
reason, I feel that offering clinical-minded support
to these countries in making the switch from the
mercury-based blood pressure monitors to elec-
tronic monitors will create economic value and
social value.
— How is economic support for healthcare in
emerging countries?
Ozeki: While the range of healthcare services
offered under health insurance is gradually expand-
ing in emerging nations, we are also seeing a
rise in the number of sufferers of chronic malady,
including such representative examples of this
ailment as asthma and COPD. Accordingly, the
spread of nebulizers, which enable patients to
undergo inhalation-based treatments at home,
will make signifi cant contributions to establishing
a sound balance between health insurance and
public fi nances in these countries. It could be seen
as Omron’s mission to help drive the spread of
nebulizers in emerging countries through pricing
measures and educational activities.
Umeda: Prior, I spoke of mesh nebulizers and com-
pressor nebulizers that employed blood pressure
monitor pumps. These are no doubt revolutionary
products, but they still face issues with regard to
price and maintenance procedures. We are currently
in the process of developing new products to
address these remaining issues, and it is my hope
that we will be able to develop new products that
change the very defi nition of nebulizers.
— In closing, what are your wishes and goals for the
future?
Umeda: There are still countless people around the
world that are unable to receive proper treatment
of asthma and COPD. However, for these people, it
is not enough to just provide equipment; I want to
provide proper treatment environments.
Ozeki: Our mission is to help treat people with
respiratory illnesses around the world. To fulfi ll this
mission, we are improving the capabilities of each
product in our rich lineup and raising brand recogni-
tion to enable Omron’s products to better contrib-
ute to the resolution of the health issues of people
around the world. Currently, more than 30% of
HCB’s earnings are generated in Asia, and we have
the goal of achieving a 50% increase from fi scal
2012 sales in this region by 2020.
36
Omron Corporation
Integrated Report 2013
37
TThh
Core Theme
CC
CCoree TThheemmme
CCoree TThheemmme
Core Theme
ee
333333333333333333333333333
3
3333333333333333
Environmental Solutions Business
and Social Systems Business (SSB)
Contributing to the Spread
of Renewable Energy Systems
The Environmental Solutions Business is one of the pillars of Value Generation 2020 (VG2020). In this
area, we boast the top share of the Japanese market for residential-use PV inverters for solar power
generation systems, which are the most popular option among renewable energy systems.
Omron offers unique, comprehensive solutions that contribute to the realization of a low-carbon
society while at the same time providing customers with the maximum level of convenience. As one
prime example of these solutions, a coordinated effort is being conducted linking the PV inverters and
other environment-related equipment of the Environmental Solutions Business HQ with the engineer-
ing and maintenance services provided by Omron Field Engineering Co., Ltd. (OFE). We asked senior
managers from each entity about plans to expand the respective operations and to contribute to
society through the Environmental Solutions Business.
Market Environment
and Business Overview
— Please explain your business?
a reduction of 70% in suspended particulate matter
(SPM). In January 2013, these efforts were recog-
nized and awarded the Minister of Economy, Trade
Yukumoto: Trends related to energy usage are un-
and Industry Prize in the Energy-Saving Activities
dergoing drastic changes in light of progressive glob-
Category of the 2012 Energy Conservation Grand
al warming and natural energy resource depletion.
Prix Program. We plan to apply the expertise ac-
It will grow ever more important for companies to
cumulated through this project to the development
contribute to the development of a low-carbon
of equipment for supporting energy-saving efforts
society. Amid such changes in the surrounding
and addressing environmental issues.
social context, the Environmental Solutions Busi-
ness HQ was established in March 2009. I as-
— Why did OFE decide to cooperate in developing
sumed my position as senior general manager of
this division in April 2012.
the Environmental Solutions Business?
Echizen: OFE was established more than 40
Not only does the Environmental Solutions Busi-
years ago, when Omron launched AFCs and traffi c
ness HQ develop its own business, it also works in
systems, as a company for providing systems
cooperation with other business divisions, such as
and maintenance related to traffi c signals and
IAB and SSB, to advance business operations in
the fi elds of energy saving and energy creation.
railway facilities.
In the energy-saving fi eld, one example of our
Japanese Market Forecasts
activities would be the eco-conscious optimization
initiatives conducted at the Ayabe Plant in Kyoto.
In October 2010, the Ayabe Plant launched an initia-
tive to halve its energy usage by March 31, 2014.
The unique environmental information monitoring
system provided by the HQ is helping support
that effort.
While the plant still has a ways to go before ac-
complishing this goal, it has already successfully
halved electricity usage in clean rooms and realized
38
38
Omron Corporation
Omron Corporation
(Solar power installations)
8,000
6,000
4,000
2,000
0
2010
2011
2012
2013
(Forecast)
2014
(Forecast)
2015
(Forecast)
(FY)
Residential Use
Small-to-Medium Scale (Several kWs–100kW)
Large Scale (250kW–500kW)
Source: Fuji-Keizai Group, 2012 market forecasts
PV inverter
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Shizuto Yukumoto
Izumi Echizen
Executive Offi cer
Senior General Manager
Environmental Solutions
Business Headquarters
President and
Representative Director
Omron Field Engineering Co., Ltd.
When the Environmental Solutions Business HQ
In particular, the market for inverter sales to indus-
was formed, it was assumed that the division
trial users (over 10kW) has signifi cantly benefi ted
would see support demand over the next 10 to 20
from the introduction of this system.
years and that OFE would have a role to fulfi ll in
Presently, the electricity sales market is not only
capturing this demand, which led to our cooperat-
limited to energy-related companies, but we are
ing in this venture.
seeing newcomers from different industries, and it
Many of our engineers hold qualifi cations for
is therefore entirely possible that this market will
electrical installation and construction manage-
grow to a massive scale. While displaying enor-
ment, and we are seeing a rise in the number of
mous potential for the future, these businesses
employees that are motivated to take on duties in
must address the task of stabilizing the operation
new fi elds by taking advantage of these basic skills.
of solar power generation systems, as these
OFE’s Network
— How is the market for the PV inverter business,
which is central to this cooperative venture?
Yukumoto: In the energy-creation business, we are
experiencing signifi cant increases in installations of
PV inverters, and, in fi scal 2012, the capacity of the
inverters we installed greatly exceeded 650MW. This
brought the cumulative capacity of supplied PV invert-
ers to approximately 2GW, which is roughly equiva-
lent to the generation capacity of two power plants.
On a cumulative basis, our share of the market for
residential-use systems is approximately 30%.
In addition, the 2012 launch of the feed-in tariff
scheme for renewable
energy has driven
strong growth in the
electricity sales market.
Okayama
Hiroshima
Fukuoka
Kitakyushu
Saga
Nagasaki
Kumamoto
Oita
Miyazaki
Kagoshima
Asahikawa
Sapporo
OMRON Field Engineering
Hokkaido Co., Ltd.
Morioka
Sendai
Tokyo
Hokuriku
Nagano
Saitama
Gifu
Otsu
Kyoto
Shizuoka
Nagoya
Kobe
Osaka
Hamamatsu
Chiba
Yokohama
Osaka Call Center
Tokyo Call Center
Head office
Major base
Service base
Call center
OMRON Field Engineering Kyushu Co., Ltd.
Integrated Report 2013
Integrated Report 2013
raterate
3999
39
We will work to contribute to
society by fulfi lling our mission
of maximizing energy effi ciency.
Shizuto Yukumoto
systems often suffer from malfunctions and other
2012 to develop the skills of more than 100
troubles, presenting a serious problem.
construction engineers.
Echizen: Based on the terms of the feed-in tariff
system, customers’ profi ts go down unless their
solar power generation systems function stably for
Solamoni Service
— Please tell us about Solamoni.
a period of 10 to 20 years. At the same time, mal-
Echizen: Solamoni is a solar power generation
functions are often discovered late because of the
system monitoring service. More specifi cally, it
dependence on sunlight for output. This has cre-
provides remote monitoring combined with the
ated a need for monitoring systems, but at present
dispatch of engineers.
a number of PV inverter installations are still only
Yukumoto: The PV inverter business is built upon
using cloud-based monitoring systems. Should a
portion of solar panels experience a decline in gen-
eration effi ciency, these cloud-based systems are
Omron’s core “Sensing and Control” technolo-
gies—a prime example of which is AICOT®*—and
the unique energy conversion technologies that
not prepared to investigate and rectify the causes
have been developed based on those technologies.
of the decline. Conversely, OFE is able to provide
This business is also responsive to the needs of all
analyses of malfunction causes. We can send engi-
areas of the solar power generation system value
neers to inspect or repair systems directly and
chain. There are not many companies in this fi eld
provide these services 24 hours a day, 365 days a
with operations that span from marketing to devel-
year due to OFE’s approximately 1,200 engineers
positioned in about 140 bases throughout Japan.
opment, production, sales, installation, and fi nally
maintenance. We also have a neutral position in the
To bolster the quality of these services, OMRON
industry, being not attached to group companies’
Aso Co., Ltd., in Kyushu, has been holding training
businesses, and this is an important factor in being
sessions at its PV Training Center since summer
chosen by customers.
Solamoni Service Process
Technology division
Technical support
Reliability point 2
Inspection
services
Inspection
Nationwide maintenance bases
Inspection
Restoration
Help desk
Monitoring for malfunction or abnormality
Equipment preparation
Report reception
Manufacturer
Repair
Reliability point 1
Monitoring
services
Dispatch
Abnormality
detection
Malfunction
Report
Distribution center
Equipment distribution
Stocking of quality items
Repair request
Remote monitoring system
Replacement, etc.
Customers’ solar systems
Reliability point 3
Restoration
services
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Echizen: I have witnessed fi rsthand the importance
fundamental level, the reason was simple; it coin-
of a system that can offer services in all areas up to
cides with our corporate philosophy.
maintenance. While there are some misunder-
Omron has always endeavored to develop ventures
standings in this area, solar power generation sys-
that benefi t society. My division was just established
tems are not “maintenance free.” In fact, the rate
in 2009, but we already feel that we are conducting
at which trouble occurs is fairly well defi ned.
a business that practices the Omron Principles.
The products we provide to customers become
Echizen: One of the Management Principles is
part of social infrastructure, and therefore our in-
“Innovation driven by social needs.” However, there
volvement cannot merely end with the sale. The
are not many businesses that can effect direct
ability to respond to customer needs throughout a
change on people’s lifestyles and social infrastruc-
product’s life cycle is one of Omron’s core strengths.
ture. The Environmental Solutions Business is one
Yukumoto: Components, systems, and services
of those few businesses that can drive such change
are all interconnected. In order to maximize energy
by responding to social needs.
effi ciency throughout a product’s life cycle, we
Yukumoto: Realizing the “optimization of energy”
provide customers with comprehensive support,
by effectively utilizing the world’s limited resources
including maintenance. In other words, we want
is a requirement of the current times. As we possess
our customers to know that “We are always beside
the technological and infrastructure development
them!.” We are confi dent Omron is the only com-
capabilities required to realize such optimization, I
pany to possess systems for providing such com-
am sure we are in a unique position on the global
prehensive service.
A Business That Practices
the Omron Principles
— How about the resolution of social issues and
social contribution?
stage. We will continue to practice healthy competi-
tion as we work to contribute to society by fulfi lling
our mission of maximizing energy effi ciency.
Echizen: We are committed to sharing dreams and
a sense of pride and confi dence throughout the
Company. At OFE, our pride comes from our contri-
Yukumoto: Some people may be curious as to
why Omron is working on an environmental solu-
bution to the social infrastructure business. On the
fresh stage represented by the environmental solu-
tions business. Part of the decision was based on
tions fi eld, we will take on new challenges as we
the fact that we possess PV inverters employing
work to fulfi ll our mission and contribute to society
energy conversions technologies, monitoring sys-
through our business.
tems steeped in energy control technologies, and
other relevant products that call upon our strong
technological capabilities. However, on a more
* AICOT® (Anti-Islanding Control Technology): AICOT is a proprietary Omron technology
that prevents the danger of PV inverters operating under islanding conditions in
grid-connected multiple solar power systems. This technology thereby supports the
smooth introduction of solar power generation systems and also removes installation
limitations. For this reason, AICOT is expected to make strong contributions to the
spread of these systems.
At OFE, our pride comes from
our contribution to the social
infrastructure business.
Izumi Echizen
40
Omron Corporation
Integrated Report 2013
41
CoCCoCCoCC
Core Theme
4
Omron’s Risk Management as Explained by Directors
Two Keywords:
Integration and Global
Omron will pursue integrated global risk management
by striking a balance between advance preparation
and proactive action.
—What does risk management mean
to Omron? Also, why is risk manage-
ment necessary?
Sakumiya: Risk management has two sides. One
is the advance preparation for managing risks and
the other is the proactive action of taking risks. A
company must pursue the maximization of earnings
I feel that strengthening such efforts is a matter of
pressing importance for Omron given the circum-
stances I just described.
—What are some important points
for Omron?
Sakumiya: Omron is developing a diverse range of
under the given operating conditions. At the same
businesses on a global scale under a decentralized
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Akio Sakumiya
Senior Managing Director
time, a company must fulfi ll its responsibility toward
management structure. Its operating conditions are
Integrated Global Risk Management Policies
society. It is impossible to move forward without
such that trouble in an individual business in one
properly managing risks. Losses can be incurred if
region could instantly develop into a large risk for
opportunities are missed by not taking risks; these
the overall management of the Omron Group. For
are equitable to those resulting from losses from
this reason, it is essential to manage information
insuffi cient advance preparation.
Business activities are always accompanied by
and countermeasures for all possible risks in an
integrated and global manner. As such, “integra-
risks. Legal and compliance risks are a given.
tion” and “global” are keywords for risk manage-
Recently though, companies have been forced to
ment. Accordingly, we named our efforts
address a series of natural disasters, including the
“integrated global risk management.”
Great East Japan Earthquake, fl oods in Thailand,
Further, Omron’s risk management is not simply
and the outbreak of the new form of infl uenza
about reducing exposure to risks. The corporate
virus, as well as the rising risks of terrorism and
core value of the Omron Principles is “Working for
international political issues. To become a stronger
the benefi t of society,” and accordingly Omron also
company, adaptability to change is essential, in
views risk management as an opportunity to work
addition to the realization of growth potential and
toward such benefi t. For example, we have the
profi tability. The Omron Group is advancing the
important mission of protecting public transportation
strategies of VG2020 and has displayed its intention
systems in the event of a disaster. To that end, we
to proactively expand operations in emerging coun-
have defi ned critical products for this purpose from
tries and conduct M&A activities. However, as the
among such items as traffi c signals, ticket vending
Group takes on challenges in new areas, it will
machines, and automated ticket gates and prepared
be important to predict accompanying risks. As
replacements parts for such equipment. We also
a member of the Board of Directors, which is re-
consider alternative modes of transportation should
sponsible for monitoring and supervising the risk
management efforts of executive departments,
public transportation systems be rendered unusable
and have readied emergency rations and disaster-
1
2
3
4
We will integrate and carry out risk-related activities from a global perspective for
the purpose of securing the continued existence of the Companies and enabling
them to achieve their targets and fulfi ll their corporate social responsibilities.
Based on the Basic Rules of Integrated Global Risk Management, we will endeavor
to avoid, reduce, and transfer losses by collecting risk information, conducting risk
analyses, and implementing countermeasures against risks.
We will identify critical risks to the Group and enable Groupwide responses through
the Executive Council.
In a time of crisis, we will make reports in accordance with established procedures
and form response teams necessary to address the crisis.
42
Omron Corporation
Integrated Report 2013
43
Global risk information is to be integrated throughout the Omron Group.
er or not they are functioning properly. Directors also
(4) procurement and distribution; (5) IT; and (6) the
Need for Integrated Global Risk Management
Globalization of
various business
activities
Increased
exposure to risks
Supply chains
spreading across
national and
regional boundaries
Rise in suddenly
realized risks and
unpredicted risks
Need for
Integrated
Global risk
management
RM’s positioning is not clear
in management of the Omron Group.
RM is executed by each business unit
based on its own understanding.
Dispersed risk information makes it diffi cult
to have a bird’s eye view of the whole situation.
RM is not a routine activity at genba (operating sites)
but is an extra non-routine activity.
I
II
III
IV
Traditional frameworks unable
to address unpredicted risks
RM is to be integrated into the management of the Omron Group.
(RM’s positioning is to be clearly defi ned.)
Intra-Group RM activities are to be integrated under
a common framework.
RM is to be integrated at genba (operating sites).
No uncovered major risks
Endeavor
to achieve
the targets
Fulfi ll corporate
social responsibility
Ensure continu-
ing existence of
the Companies
* RM = Risk management
response gear for people living nearby disaster
ticular emphasis on both of these categories.
zones. In these ways, Omron is conducting activi-
To summarize, risk management activities
ties that give form to its corporate philosophy.
throughout the year are conducted in this order: the
—Could you please provide an
overview of Omron’s risk manage-
ment systems?
Sakumiya: Omron’s basic risk management
identifi cation of risks; the analysis of risks; the des-
ignation of signifi cant risks; the establishment of
plans for response, verifi cation, revision, and report-
ing to the Board of Directors; and then fi nally rel-
evant disclosure. In other words, this process
policies are defi ned within the Resolution by
forms a risk management plan-do-check-act (PDCA)
Board of Directors of Maintaining an Internal
cycle. Going forward, Omron will reinforce these
Control System, and these policies are listed in
activities and further instill them into its global man-
the Company’s Business Report and Corporate
agement activities.
Governance Report.
The basic fl ow of the risk management systems is
as follows. Every year, we identify and analyze the
various risks we are facing from a global perspec-
tive. We then rate these risks, with the greatest
—What systems are being put in
place to facilitate global risk manage-
ment efforts?
Sakumiya: For executive departments, the Global
threats to the Group being assigned an S rank, and
Resource Management Headquarters plays a key
those risks that pose lesser but still represent sig-
role in advancing initiatives as the Company works
nifi cant threats being ranked as A. We place a par-
to develop stronger team relations vertically among
business lines and horizontally between the corpo-
rate headquarters and regional head offi ces, making
for a closely coordinated global vertical-horizontal
matrix management system. As one facet of these
—How are measures to respond to
S-ranked business continuity risks
progressing?
Sakumiya: The Great East Japan Earthquake reaf-
efforts, the Corporate Ethics & Risk Management
fi rmed the importance of ensuring the continuity of
Committee has been established under the Execu-
business operations under any circumstances, and,
tive Council of the Company. In addition, we have
to this end, Omron chose to revise its business
appointed risk managers at all Omron Group com-
continuity plan (BCP). The revised BCP prescribes
panies around the world, and we are utilizing our
specifi c measures regarding recovery time and
global network to share risk information and discuss
level objectives, methods of recovering relevant
response measures in the course of daily activities.
functions, and measures to prevent their loss.
At the same time, directors take on the perspective
Six major functions are considered in the BCP:
of shareholders and other investors from which they
(1) corporate headquarters, both global and re-
monitor executive departments to determine wheth-
gional; (2) business headquarters; (3) production;
W
h
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r
e
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e
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advise these departments in conducting their duties.
safety of operating bases.
Further, in the event of an occurrence that threat-
For example, with regard to (3) production
ens the continuation of our business, a Company-
functions, we have established that the production
wide Emergency Response Headquarters must be
volumes of all business companies should be recov-
established. In preparation for such an occurrence,
ered to predetermined levels within a defi ned period
directors and executive offi cers develop ordered
of time. For accomplishing this goal, we are in the
lists of possible candidates for heading this Emer-
process of considering detailed procedures for
gency Response Headquarters ahead of time.
setting up alternative production sites, securing
—What kind of risks do you identify
as serious?
Sakumiya: For fi scal 2013, risks assigned the
necessary parts and production facilities, and devel-
oping backups of necessary information documents,
including manuals, and standardizing such docu-
ments. Furthermore, over the two years since the
S rank are business continuity risks, including re-
earthquake, Omron has made particular progress
sponse to avian infl uenza and the risk of violation of
in defi ning concrete procedures pertaining to
laws in countries of operation. A-rank risks include
(1) corporate headquarters functions, and full-
the risk of fraud within the Company; the risk of
fl edged drills related to these procedures have
violating environmental laws and regulations;
the risk of violating personal data protection laws;
already begun.
However, these actions require investments of
and the risk of failure to properly manage subsidiar-
both time and money at operating sites. As such, it
ies in emerging countries.
is common for companies to prioritize short-term
Meeting of risk managers
BCP drill at Emergency Response Headquarters
44
Omron Corporation
Integrated Report 2013
45
performance over such efforts. Nevertheless, I feel
rights by supporting armed rebel groups in the
that of foremost importance is the willingness to
Democratic Republic of Congo in Africa. To avoid
formulate concrete targets to address risks and,
the realization of this risk, corporate headquarters
then, consider what must be done to realize these
divisions related to purchasing, legal affairs, and
targets. Such consideration can lead to ways of
CSR have been cooperating with business divisions
installing business continuity measures with mini-
to investigate the situation regarding such minerals
mal burden to operations. Moreover, this process
and implement response measures as necessary.
can also provide us with good opportunities to re-
* ESG: Environmental, Social, and Governance
view existing operations for other purposes.
—Recently, risks related to ESG*
issues have been gaining attention.
In what ways is Omron addressing
these issues?
Sakumiya: As businesses expand globally, the
—What issues must Omron address
going forward?
Sakumiya: Omron has constructed its foundation
for integrated global risk management. It will be
important to continue to enhance efforts in this
area going forward while applying the PDCA cycle.
potential for a company’s business activities to
Of particular importance will be improving activities
impact the environment and society is ever rising.
outside Japan. It is vital that each regional head-
In light of this situation, incorporating ESG consid-
quarters practice risk management in accordance
erations into business activities and installing these
with the characteristics of their respective region.
principles into the core of management strategies
Omron will include more information regarding its
is now more important than ever.
risk management efforts in the Annual Securities
In fi scal 2012, one example of focus initiatives in
Report, on its website, and Integrated Report.
this area was our response to the confl ict mineral
I also hope that Omron will incorporate the valuable
issue. The act of procuring parts and materials in-
opinions of stakeholders into its management in
cluding such minerals for use in products can, albeit
the future.
indirectly, contribute to the violation of human
There are countless issues
to be addressed in the area
of risk management. For this
reason, it is necessary to
prioritize these issues and
continue to address them
in a systematic manner.
Akio Sakumiya
Evaluation of Omron’s Risk Management
by an Outside Director
Sustainable Growth
and Aggressive
Risk Management
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Outside Director
Kazuhiko Toyama
President and CEO of
Industrial Growth Platform, Inc.
Kazuhiko Toyama previously held
positions at Boston Consulting
Group, Inc. He also helped found
and later served as President and
CEO of Corporate Direction Co.,
Ltd., Japan’s fi rst independent
management strategy consultancy.
In 2003, Mr. Toyama was appointed
Senior President and COO of the
Industrial Revitalization Corporation
of Japan at its inception, where he
successfully turned around 41
Japanese companies. In April 2007,
he founded Industrial Growth
Platform, Inc., which provides
management support services
focused on realizing long-term
sustainable business operations
and elevating corporate value.
Mr. Toyama currently serves as
a Vice Chairman of the Japan
Association of Corporate Directors
and a Vice Chairperson of the Japan
Association of Corporate Executives.
There are two main factors that have a signifi cant impact on a company’s
capacity to grow sustainably. One is the company’s ability to achieve har-
mony with society, or, in other words, the ability of the company to orient its
pursuit of profi tability to match social values.
Investors, consumers, and employees are all fundamental elements of
society. If a company is not in harmony with them, it will not be able to grow
over the long term. This is because a company’s most important customer
is society itself.
Harmony with society is imperative for any company. However, it is often
the case for companies that maintain harmony with society at home to not do
the same overseas. An important point of consideration for the future of a
company is its ability to cross national boundaries and overcome ethnic,
religious, and cultural differences to establish a shared set of values. I believe
that Omron, with its corporate core value of “Working for the benefi t of soci-
ety,” has done a very good job at internalizing this principle in its organization.
The other main factor affecting a company’s sustainability is the ability to
practice aggressive risk management. Companies must win out against
constant, fi erce competition. As such, a company that does not take risks
can only decline. At the same time though, a company that takes unneces-
sary risks is doomed to fail. What is needed is a style of management that
effectively controls risks and, then, takes those deemed necessary.
The success of risk management is hinged on the effective use of the
PDCA cycle. Companies do not have the option of being “risk free.” Rather,
they must maintain an understanding of the risks present and control these,
respond quickly to unforeseen circumstances, and, when the cycle has been
completed, decide what they will incorporate into the next spin. There is no
correct path in this process, and companies must continue to address these
issues as long as they exist. I feel that Omron has strong systems in place to
aid it in this undertaking.
If Omron continues to maintain harmony with the global society, while
building solid risk management systems and practicing aggressive risk
management, I am confi dent that the Company will continue to grow into
the future.
46
Omron Corporation
Integrated Report 2013
47
Omron at a Glance
Performance and Forecasts by Segment
Net Sales and
Operating Income
Net Sales by Segment
(Billions of yen)
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
Eliminations and Corporate
Operating Income (Loss) by Segment
(Billions of yen)
800
700
600
500
400
300
200
100
0
09
10
11
12
13
(Forecast)
(FY)
90
60
30
0
–30
Industrial Automation
Business (IAB)
Electronic and Mechanical
Components Business (EMC)
Net Sales
Operating Income and
Operating Income Margin
Net Sales
Operating Income and
Operating Income Margin
(Billions of yen)
(Billions of yen)
282.0
263.0
300
250
200
150
100
50
0
50
40
30
20
10
0
36.5
31.3
12.9％
11.9％
(%)
20
16
12
8
4
0
(Billions of yen)
100
94.0
84.1
(Billions of yen)
12
80
60
40
20
0
9
6
3
0
(%)
12
9
6
3
7.4%
7.0
5.2%
4.4
09 10 11
12 13
(Forecast)
(FY)
09 10 11 12 13
(Forecast)
(FY)
09 10 11 12 13
(Forecast)
(FY)
09 10 11 12 13
(Forecast)
0
(FY)
C
o
r
p
o
r
a
t
e
V
a
l
u
e
I
n
i
t
i
a
t
i
v
e
s
09
10
11
12
13
(Forecast)
(FY)
Automotive Electronic
Components Business (AEC)
Social Systems, Solutions
and Service Business (SSB)
R&D Expenses and
Capital Expenditures
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
Eliminations and Corporate
R&D Expenses by Segment
Capital Expenditures by Segment
(Billions of yen)
(Billions of yen)
60
50
40
30
20
10
0
09
10
11
12
(FY)
40
30
20
10
0
09
10
11
12
(FY)
Notes:
1. From fi scal 2013, certain operations previously included in EMC have been included in IAB following a change in management categorizations. Accordingly, the segment
information fi gures for fi scal 2012 and prior fi scal years have been restated to refl ect this change.
2. Beginning in fi scal 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 (loss) of each segment.
Net Sales
(Billions of yen)
120
108.5
97.6
90
60
30
0
09 10 11 12 13
(Forecast)
(FY)
Operating Income and
Operating Income Margin
Net Sales
Operating Income and
Operating Income Margin
(Billions of yen)
(Billions of yen)
(Billions of yen)
(%)
12
7.0
5.0
6.5%
5.1%
9
6
3
09 10 11 12 13
(Forecast)
0
(FY)
76.0
68.8
80
60
40
20
0
09 10 11 12 13
(Forecast)
(FY)
5
4
3
2
1
0
(%)
10
4.5
5.9%
2.9
4.2%
8
6
4
2
09 10 11 12 13
(Forecast)
0
(FY)
Healthcare Business (HCB)
Other Businesses
82.5
71.5
Net Sales
(Billions of yen)
100
80
60
40
20
0
09 10 11 12 13
(Forecast)
(FY)
Operating Income and
Operating Income Margin
Net Sales
Operating Income (Loss) and
Operating Income Margin
(Billions of yen)
7.0
8.5%
4.4
6.2%
(%)
12
9
6
3
09 10 11 12 13
(Forecast)
0
(FY)
3.5
2.5
5.6%
4.3%
(Billions of yen)
(Billions of yen)
62.0
59.2
80
60
40
20
0
4
2
0
–2
–4
–6
09 10 11 12 13
(Forecast)
(FY)
09 10 11 12 13
(Forecast)
(%)
12
6
0
–6
–12
–18
(FY)
8
6
4
2
0
8
6
4
2
0
48
Omron Corporation
Integrated Report 2013
49
Segment Information
Industrial Automation Business (IAB)
Manufacturing and sales of control systems and components
for factory automation and industrial equipment
% of net sales
40%
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 2012 in Review
Sales in Americas and China were solid
regardless of the rebound from the previous
year’s temporary sales increases.
IAB net sales declined 2.9% year on year, to ¥263.0 billion,
In China, demand for automobiles and machine tools was
down, but demand remained relatively stable on a full-year
basis, and sales proved solid even when compared with the
previous fi scal year, when temporary increases stemming
from earthquake-related demand were recorded. In Asia,
and operating income decreased 11.6%, to ¥31.3 billion, in
while sales held fi rm in ASEAN and emerging countries,
fi scal 2012.
the impacts of limited capital investment in South Korea’s
In Japan, sales were down 5.6% year on year, to ¥116.3
semiconductor industry weighed heavy, and overall sales
billion. Capital investment demand in the automobile industry
were down as a result.
was relatively unchanged, but demand was poor in electronic
In Europe, various economic indicators improved during
component related industries, and particularly in the semicon-
the second half of the year. However, production and new
ductor industry. In addition, IAB experienced a rebound from
investments continued to be limited, resulting in low de-
the temporary increase in sales seen in the previous fi scal year
mand. In the Americas, meanwhile, automobile-related
due to the infl uences of the Great East Japan Earthquake and
demand was favorable, and sales were solid accordingly.
the Thailand fl oods.
IAB pursued more effi cient operations to reduce fi xed
Overseas, sales were strong in China, ASEAN countries,
costs while steadily conducting investment necessary for
and Americas, while conditions remained uncertain in Eu-
the future. However, the heavy impacts of overall sales
rope due to ongoing fi nancial instability. As a result, overseas
declines could not be offset, and operating income de-
sales were relatively unchanged from the previous fi scal
creased as a result.
year, declining only 0.7% year on year, to ¥146.7 billion.
IAB Results and Forecasts
Check it out!
(Billions of yen)
2009
2010
2011
2012
Fiscal Year
Net sales
Japan
Overseas
Americas
Europe
Asia Pacifi c
Greater China
Direct exports
Operating income
Operating income margin
R&D expenses
Depreciation and amortization
Capital expenditures
203.9
91.2
112.7
18.9
51.2
16.8
25.5
0.3
14.6
7.2%
12.0
5.2
1.9
271.9
123.9
148.0
26.7
56.7
25.0
38.8
0.7
41.1
270.8
123.1
147.7
29.3
55.3
25.3
36.8
1.0
35.4
263.0
116.3
146.7
31.6
50.4
24.7
39.4
0.6
31.3
2013
(Forecast)
282.0
117.0
165.0
32.5
56.0
29.9
46.0
0.6
36.5
15.1%
13.1%
11.9%
12.9%
14.2
4.5
2.2
15.4
4.2
3.8
16.5
3.5
2.8
* From fi scal 2013, certain operations previously included in EMC have been included in IAB following a change in
management categorizations. Accordingly, the segment information fi gures for fi scal 2012 and prior fi scal years have
been restated to refl ect this change.
* Beginning in fi scal 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.
* The sales fi gures 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 offi ce expenses that are not apportionable.
* The forecasts for R&D expenses, depreciation and amortization, and capital expenditures are not publicized.
50
Omron Corporation
Analysis of external environment
Index of Machinery orders and IAB sales
(Billions of yen)
100
80
60
40
20
0
50
40
30
20
10
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2011
FY2012
Index of Machinery Orders*
(Seasonally adjusted) [left axis]
IAB Sales [right axis]
*Source: Calculated based on
materials prepared by
the Cabinet Offi ce,
Government of Japan
Japanese IAB sales trends tend
to refl ect those in the machinery
orders index.
Business Strategy and Outlook for Fiscal 2013
We will continue to evolve as the best automation
partner for manufacturers worldwide.
In fi scal 2013 we are forecasting a year-on-year rise in net
sales of 7.2%, to ¥282.0 billion, and a 16.4% increase in
operating income, to ¥36.5 billion.
In Japan, sales are forecasted to be in line with fi scal
2012. While we expect customers to improve performance
Yoshinobu Morishita
Representative Director and
Executive Vice President
Company President,
Industrial Automation Company
due to yen depreciation, capital investment demand in the
network consisting of more than 160 bases.
automobile and machine tools industries will be unchanged
We will continue to contribute to the substantial improve-
from fi scal 2012. Overseas, we are projecting a year-on-year
ments in machine productivity by realizing safer, faster, and
increase in sales. Markets are becoming increasingly linked
more precise control. In this pursuit, we will work to create
on a global scale, resulting in higher volatility, but the
machines that anyone can operate with ease and realize
expectations for ever growing automation are surely
a deeper understanding of applications while developing
rising nonetheless. Evolving as an automation partner to
new applications on a global scale.
manufacturers worldwide, IAB will relentlessly invest and
We will continue to strengthen our operations in emerging
put plans into action throughout fi scal 2013.
countries, where automation needs continue to grow, and
Leveraging the monozukuri (manufacturing) capabilities we
have developed through our global operations, we will launch
also actively work to acquire new technologies that will
contribute to the future of manufacturing. Aiming to evolve
more products than in the previous fi scal year, providing
as an automation partner to manufacturers worldwide, IAB
them to customers around the world through our global
will develop stronger ties within and outside Omron.
What’s New
Joint Project with Microsoft Japan to Utilize Big Data
Manufacturers are increasingly seeking higher levels of quality
This new solution directly links Omron’s Sysmac control with
the SQL Server of Microsoft Corporation to help advance re-
and safety. At the same time, there is a rising need for trace-
forms at production sites by providing the world with a new
ability that allows information to be collected and analyzed on a
means of tracking and utilizing data related to manufacturing.
C
o
r
p
o
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a
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e
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a
l
u
e
I
n
i
t
i
a
t
i
v
e
s
single item basis to instantly determine when, where, and under
what conditions certain items were produced. By strengthening
Omron’s lineup of advanced “Sensing and Control” products,
indispensable to the process of control, we have made it pos-
sible to quickly and accurately upload vast quantities of data
related to individual items mass-produced at production sites to
top servers in real time. By combining these products with
Microsoft’s technologies, we have realized systems for monitor-
ing and analyzing vast quantities of data at production sites in an
accurate, quick, and easy manner. Further, these systems en-
able data to be arranged in a way that is meaningful to onsite
staff and management.
Monitoring Site Data
Data analysis
Feedback
Link
Defect
detection
(CEP)
Quickly collect
data from
equipment
Industry First—Integrated Tool with 3D Motion
Trace Functions
Sysmac Studio is for high-speed, high-precision motion control
Industry First—Photoelectric Sensor Reborn
through the Production Method
This sensor is the fi rst in the FA industry to be produced using
design and safety control in an engineering environment. Using
laser bonding technologies, thereby realizing quality not im-
this tool, the movements of machine structures can be simu-
pacted by differences in parts. Requiring one-tenth the normal
lated using 3D animations on one’s desktop before construction.
capital investment and half the average development period,
This makes it easier to discover errors in control programs and
this method allows us to swiftly respond to customer needs.
parameter confi gurations. These features employ a new, light 3D
drawing engine developed for industrial applications.
Large-scale equipment
Desktop equipment
2.5m
Integrated engineering tool
Sysmac automation platform
2.0m
0.7m
2.0m
0.7m
0.7m
Integrated Report 2013
51
Segment Information
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
% of net sales
13%
EMC utilizes its cultivated strength in monozukuri (manufacturing) technology, integrating its
relays, switches, connectors, and other electromechanical component products to supply products
to customers in a wide range of industries.
Fiscal 2012 in Review
Sales increased following a recovery
in Japanese demand.
Performance was solid in new businesses
in China.
EMC net sales were up 1.3% year on year, to ¥84.1 billion,
Supported by the solid performance of businesses in
China during the second half of the year, overseas sales
were practically unchanged from the previous fi scal year,
declining 0.5%, to ¥57.4 billion.
In Americas, demand was brisk in the automobile industry
but stagnant in consumer-related industries. Similarly, inven-
and operating income was down 14.9%, to ¥4.4 billion,
tory adjustment trends continued in the consumer-related
in fi scal 2012.
industries in Europe, and automotive electronic component
In Japan, sales increased 5.6%, to ¥26.7 billion. During the
demand recovery continued to be delayed even during the
fi rst half of the fi scal year, demand from consumer-related
second half of the fi scal year. In this opaque economic
industries was relatively unchanged from the previous fi scal
environment, exports from China and other parts of Asia into
year, but demand in the automobile industry recovered from
Europe displayed a downward trend. However, demand
the impacts of the Great East Japan Earthquake, driving an
began recovering during the second half of the year. Also,
overall increase demand. In the second half of the year,
performance was solid in new businesses in environmental
demand for “white goods” home appliances was sluggish.
fi elds in China. Due to the above, full-year overseas sales
However, demand was solid in infrastructure-related indus-
showed almost no change overall.
tries, and we saw increased demand in the offi ce equipment
Operating income was down year on year due to the
and mobile device industries. These factors contributed to
impacts of the weak euro and the ongoing decline in
the increase in full-year sales.
internal sales.
EMC Results and Forecasts
Check it out!
Fiscal Year
Net sales
Japan
Overseas
Americas
Europe
Asia Pacifi c
Greater China
Direct exports
Operating income
2009
2010
2011
2012
70.7
22.3
48.4
7.3
11.7
7.6
19.8
1.9
4.8
81.2
24.9
56.3
13.7
13.0
8.4
19.8
1.5
9.0
83.0
25.3
57.7
13.2
12.9
7.6
22.7
1.3
5.1
84.1
26.7
57.4
13.1
11.3
7.1
24.6
1.4
4.4
(Billions of yen)
2013
(Forecast)
94.0
29.5
64.5
14.5
13.9
9.0
26.1
1.0
7.0
Operating income margin
6.8%
11.0%
6.2%
5.2%
7.4%
R&D expenses
Depreciation and amortization
Capital expenditures
4.1
8.5
4.2
4.6
6.9
8.7
5.5
7.2
9.9
5.2
7.4
8.9
* From fi scal 2013, certain operations previously included in EMC have been included in IAB following a change in
management categorizations. Accordingly, the segment information fi gures for fi scal 2012 and prior fi scal years have
been restated to refl ect this change.
* Beginning in fi scal 2010, the Omron Group has been revising the management guidance fees for the purpose of concen-
trating 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.
* The sales fi gures 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 offi ce expenses that are not apportionable.
* The forecasts for R&D expenses, depreciation and amortization, and capital expenditures are not publicized.
Analysis of external environment
Global shipments of electronic
components and sales of EMC products
for consumer electronics
(Billions of yen)
1,500
(Billions of yen)
50
1,200
900
600
300
0
40
30
20
10
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2012
FY2011
Global [left axis]
Japan [left axis]
EMC Products for Consumer
Electronics [right axis]
Source: Japan Electronics and
Information Technology
Industries Association (JEITA)
In fi scal 2012, consumer electronics
sales were strong centered on
emerging countries.
Business Strategy and Outlook for Fiscal 2013
We will improve profi tability by expanding sales
in new fi elds related to the environment and
energy and by exercising our advanced
monozukuri capabilities.
We plan to increase EMC net sales 11.8% year on year,
to ¥94.0 billion, and boost operating income 60.9%, to
¥7.0 billion, in fi scal 2013.
Koichi Tada
Managing Offi cer
Company President,
Electronic and Mechanical
Components Company
Looking at the operating environment for electronic com-
strengthening our lineup of power latching relays for use
ponents, demand is expected to hold strong in the United
in smart meters, which we expect to experience growing
States and the Asia Pacifi c region. Meanwhile, demand in
demand in emerging countries going forward.
Europe and China is forecast to recover steadily. In Japan,
we will capture new customers for businesses centered on
fi elds related to the environment and energy. Overseas, we
To improve profi tability, we intend to utilize Omron’s
advanced monozukuri capabilities. As one facet of these
efforts, we will reduce the amount of silver used in the
will work even more closely with large-scale customers
contact portions of relays, decrease losses of gold and silver
while acquiring new small and medium-sized customers by
plating, and conserve and recycle molding materials in order
utilizing our global sales network. Through these efforts, we
to limit the impacts of raw material price fl uctuations. In
will target higher sales.
addition, we will introduce automated production systems
In addition, we will bolster our lineup of relays, switches,
and low-cost automation systems into factories in China and
and connectors for consumer electronics, automotive
other parts of Asia to reduce the number of people needed
electronic components, offi ce equipment, and industrial
to operate these facilities. These systems will allow us to
machinery and, at the same time, explore new markets
mitigate the impacts of the rising cost of labor in these areas
by leveraging new products. One area of focus will be
and, thereby, accelerate our efforts to reduce costs.
What’s New
Release of World’s Smallest and Lightest DC Power
Relay for Eco-Friendly Vehicles and Condensers
In the automobile industry, the market is expanding for electric
and hybrid-electric vehicles and other eco-friendly vehicles
equipped with high-voltage batteries. As this market grows,
automobile manufacturers are increasingly in need of DC load
control technologies for these clean energy vehicles as well as
means of extending drivable distances by downsizing and
reducing the weight of onboard electrical equipment.
To respond to these needs, EMC released the world’s small-
est and lightest DC power relay. This component can be used as
a main relay or pre-charge relay in
the high-voltage batteries of eco-
friendly vehicles and is approxi-
mately half the size and weight of
relays with similar specifi cations.
DC power relay
Industry’s Smallest Battery
Connector Created Using
Omron’s Unique Electroforming
Technology: XD2B
Employing Omron’s unique electroforming
Round Water-Resistant Connector
That Enables Easy Connection of
Different Shaped Cables with One
Type of Connector: XS5C/G
Developed to aid installation workers,
Facial Expression Estimation
Technology That Further Evolves
Face-Sensing Technologies
Omron’s Facial Expression Estimation
technology is capable of estimating
technology using advanced microfabrica-
this connector is based on the concept of
seven different facial expressions—hap-
tion and materials technologies, this
easily connecting different shaped cables
piness, surprise, fear, disgust, anger,
connector is compatible with the batter-
with only one type of connector and no
sadness, and neutral—all in real time. It
ies of mobile devices and helps make
specialized tools. By applying a pressure
is expected to be used for various ap-
devices smaller while increasing the size
connection method to cables, this con-
plications, such as communication robots
of batteries.
nector can greatly simplify the process of
or in video games that react to users’
connecting cables.
facial expressions.
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Omron Corporation
Integrated Report 2013
53
Segment Information
Automotive Electronic Components Business (AEC)
Production and sales of electronic components for automobiles
% of net sales
15%
OMRON Automotive Electronics Co., Ltd. (AEC), conducts business operations catering specifi -
cally to the ever evolving automotive electronics fi eld, 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 2012 in Review
Sales and income increased in both Japanese
and overseas operations.
We set a new record for sales following the 2008
China, but impressive sales of new models of keijidousha (a
class of small automobiles defi ned by Japanese standards)
helped support demand nonetheless. As a result, full-year
sales in Japan improved year on year.
fi nancial crisis.
Overseas sales rose 20.0%, to ¥67.4 billion, supported by
AEC net sales grew 14.8% year on year, to ¥97.6 billion,
robust demand in certain countries. Demand was low in
and operating income rose 86.1%, to ¥5.0 billion, in fi scal
Europe, especially during the fi rst half of the year, and sales
2012. In Japan, sales were ¥30.2 billion, up 4.8% from the
of Japanese automobiles took a sharp downturn in China.
previous fi scal year, setting a new record for after the 2008
Nevertheless, overall demand from overseas automobile
fi nancial crisis.
manufacturers and emerging markets was brisk. In Americas,
In Japanese operations, while fi scal 2011 was impacted by
demand was strong throughout the year, and demand in
the temporary production adjustment trend that followed the
China increased during the second half of the year. In addi-
Great East Japan Earthquake, this trend disappeared in fi scal
tion, we experienced a rebound from the temporary declines
2012. In addition, the fi rst half of the year felt the benefi ts of
in sales in the previous fi scal year that resulted from the
government measures to promote the purchase of eco-
fl oods in Thailand. This rebound was particularly prominent
friendly automobiles, such as the extension of tax breaks
in the fi rst half of the year. As a result of the above factors,
and the reinstatement of subsidies. These factors drove
overall full-year overseas sales showed a signifi cant increase
strong automobile-related demand during the fi rst half of the
from the previous fi scal year.
year. In the second half of the year, we saw such detracting
Operating income was also substantially higher due to the
factors as a decline in exports to Europe as a result of the
rebound from the abovementioned impacts of the Great
economic recession in Europe and lower sales related to
East Japan Earthquake and the Thailand fl oods.
AEC Results and Forecasts
Check it out!
Fiscal Year
Net sales
Japan
Overseas
Americas
Europe
Asia Pacifi c
Greater China
Direct exports
Operating income
2009
2010
2011
2012
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
97.6
30.2
67.4
25.0
2.8
19.5
13.9
6.2
5.0
(Billions of yen)
2013
(Forecast)
108.5
25.0
83.5
30.5
3.0
24.0
19.0
7.0
7.0
Operating income margin
2.3%
4.9%
3.2%
5.1%
6.5%
R&D expenses
Depreciation and amortization
Capital expenditures
5.0
2.1
3.6
5.3
2.1
2.0
6.6
2.1
5.2
7.0
2.4
5.5
* Beginning in fi scal 2010, the Omron Group has been revising the management guidance fees for the purpose of concen-
trating 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.
* The sales fi gures 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
offi ce expenses that are not apportionable.
* The forecasts for R&D expenses, depreciation and amortization, and capital expenditures are not publicized.
Analysis of external environment
Worldwide automobile production
(unit basis)
(Millions)
6
5
4
3
2
1
0
China
EU
North
America
Asia
Japan
South
America
Middle East,
Africa
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2011
FY2012
Source: CSM Worldwide, Inc.
Sales were poor in Japan due to the
impacts of the Great East Japan
Earthquake, while sales improved
signifi cantly in China.
Business Strategy and Outlook for Fiscal 2013
Automobile market growth is expected to center
on emerging countries.
For AEC, we are forecasting a year-on-year increase of 11.1%,
to ¥108.5 billion, in net sales, with a 39.7% increase in oper-
ating income, to ¥7.0 billion, in fi scal 2013.
In fi scal 2012, new automobile sales recovered to 5 million
Katsuhiro Wada
Managing Offi cer
President and CEO,
OMRON Automotive Electronics Co., Ltd.
vehicles in Japan for the fi rst time in fi ve years. However,
these countries. At the same time, major suppliers from
market conditions are proving to be weak due to the end of
Europe and the United States are becoming more responsive
the government subsidies for the purchase of eco-friendly
toward demand in Asia, resulting in intensifi ed competition.
automobiles. Overseas, meanwhile, demand is expected to
Aiming to respond to such market changes, AEC has been
be strong in the North American market, and sales of Japa-
establishing systems in each major region of the world for
nese automobiles in China will gradually recover from the
quickly uncovering new market needs and providing value-
period of boycotting seen during fi scal 2012. Also, the strate-
added products by utilizing high-quality development, produc-
gic vehicles that Japanese automobile manufacturers in
tion, sales, and services functions. It is also working on the
Thailand have developed for the global market are forecast to
“Global One Team” management strategy, under which
sell well, particularly in Southeast Asia. Accordingly, overseas
global expansion will be pursued by leveraging the Omron
sales should show an overall increase.
Group’s accumulated human resources, technologies, and
Further, the automobile market is expected to continue
management structures. Through these efforts, AEC will work
growing centered on emerging countries. Against this back-
to uncover the social needs inherent to each different region
drop, there is increasing demand from our customers for
and quickly and effi ciently introduce products that meet
conducting development and production operations locally in
those needs.
What’s New
Relocation of Aged Brazilian Factory
In 2008, AEC acquired a 100% stake in a production site in
respond to the automotive
component demand in South
Brazil. This site has since served as a major production base for
America, with a particular
our operations in South America. However, this base was far
focus on Brazil, as we work
from major automobile producing areas and its building and
to expand our operations. The
other facilities were quite aged. We relocated the base to a
factory will also be a base for
newly constructed factory in December 2012 and commenced
the Omron Group’s ongoing
full-fl edged production in January 2013.
social contribution efforts.
Brazil is expected to be the world’s fi fth largest automobile
market in 2020. We will therefore utilize this new base to
AEC’s new factory in Brazil
commenced full-fl edged
operation in January 2013
Electric Power Steering Controllers
AEC anticipates that a growing number of
automobile models will utilize its electric
Transmitter Key and Engine
Start Systems
AEC is carrying out the development
Components for Eco-Friendly
Vehicles
AEC is developing a range of fundamental
power steering controllers for smooth
steering wheel operation and energy
saving. Omron is ready to meet wide-
ranging market needs with its control
technologies that are compatible with
and production of various devices by
technologies and products to contribute
integrating its wireless, miniaturization,
to greater energy savings and fuel-
and weight-reducing technologies for
effi ciency improvements in eco-friendly
which it has established a strong market
vehicles. These developments include
reputation. These devices provide added
lithium-ion battery leakage monitoring
mid- and large-sized vehicles. Also, AEC is
convenience for users and greater ease
units and electricity leakage sensors
strengthening its development and pro-
duction functions in the rapidly growing
Chinese market, responding to demand
utomobile manufacturers.
from Chinese automobile manufacturers.
in locking and unlocking doors and start-
for electric and hybrid-electric vehicles
ing the engines of automobiles.
as well as voltage conversion units for
idling stop systems, which are expected
to become standard equipment for
gasoline vehicles.
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Omron Corporation
Integrated Report 2013
55
Segment Information
Social Systems, Solutions and Service Business (SSB)
Providing solutions and services for contributing to a safer, more secure,
and comfortable society
% of net sales
11%
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 2012 in Review
Sales and income increased signifi cantly
due to growth in the safety and security
and environmental solutions fi elds.
In fi scal 2012, SSB sales and income both increased signifi -
centered on remote monitoring systems were strong.
Accordingly, full-year net sales increased substantially.
The traffi c control and road control systems business
continued to feel the negative trend toward limiting capital
investment seen among customers. Nevertheless, full-year
cantly, with net sales up 20.2% year on year, to ¥68.8 billion,
net sales proved favorable due to the strong performance of
and operating income at ¥2.9 billion, compared with ¥0.1
safety and security solutions.
billion in fi scal 2011.
Environmental solutions related businesses recorded
In the railway infrastructure business, railway companies
impressive full-year net sales due to strong performance
saw improvements in tourism revenues due to the rebound
centered on growth fi elds, such as solar power generation
from the impacts of the Great East Japan Earthquake. As a
system related services. Also, in the related maintenance
result, replacement demand for railway infrastructure was
business, there was a signifi cant rise in the installation of
solid throughout the year. In particular, deliveries of auto-
PV inverters, and full-year net sales were solid as a result.
mated ticket vending machines, automated ticket gates, and
Operating income improved greatly year on year, sup-
other equipment were up, as were orders for related installa-
ported by higher net sales and the benefi ts of profi t structure
tion. In addition, sales of safety and security solutions
reforms in the railway infrastructure business.
SSB Results and Forecasts
Check it out!
Fiscal Year
Net sales
Japan
Overseas
Americas
Europe
Asia Pacifi c
Greater China
Direct exports
Operating income
2009
2010
2011
2012
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
68.8
68.5
0.3
0.0
0.0
0.0
0.1
0.2
2.9
(Billions of yen)
2013
(Forecast)
76.0
74.0
2.0
0.0
0.0
0.0
1.1
0.9
4.5
Operating income margin
4.6%
2.6%
0.2%
4.2%
5.9%
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
2.2
1.1
1.5
* Beginning in fi scal 2010, the Omron Group has been revising the management guidance fees for the purpose of concen-
trating 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.
* The sales fi gures 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
offi ce expenses that are not apportionable.
* The forecasts for R&D expenses, depreciation and amortization, and capital expenditures are not publicized.
Analysis of external environment
Changes in the number of rail
transport passengers (year on year)
Japan Railways
(JR) Group
Total
Private Railways
(%)
10
8
6
4
2
0
–2
1 2 3 4 5 6 7 8 9 10 11 12
2012
Source: Rail Transport Overview,
Ministry of Land, Infrastruc-
ture, Transport and Tourism
SSB’s business covers a wide range of
social fi elds, and there are no specifi c
economic indicators that link closely to
performance. In the railway segment,
for example, SSB’s sales are strongly
infl uenced by customer budgets for IC
card equipment installation and new
railway and station construction plans.
During fi scal 2012, tourism levels
recovered from the slump seen
following the Great East Japan
Earthquake, and the investment
environment in the railway segment
improved as a result.
Business Strategy and Outlook for Fiscal 2013
We will continue to strengthen competitiveness
and build foundations for growth.
In fi scal 2013, we are projecting a 10.5% year-on-year gain in
SSB net sales, to ¥76.0 billion, and a 54.4% rise in operating
income, to ¥4.5 billion.
In existing businesses, such as those related to railways
and traffi c control, we have achieved profi tability through the
Kiichiro Kondo
Managing Offi cer
President and CEO,
OMRON SOCIAL SOLUTIONS Co., Ltd.
implementation of ongoing profi t structure reforms. This
expand. In this pursuit, we will take advantage of the Group’s
profi tability will be taken advantage of to steadily capture
ability to provide package offerings, including products,
replacement demand and thereby maximize earnings. In the
system design, installation, maintenance, and other services,
safety and security fi eld, the experience and expertise ac-
to capture the expanding demand. Further, we will focus on
cumulated through operations thus far will help realize a
the development of new energy-related products and ser-
full-fl edged expansion.
vices from the three perspectives of creation, storing, and
In growth businesses, we will pursue sales growth in the
saving. Through these efforts, we hope to put SSB on the
environmental solutions fi eld, where demand continues to
track toward medium-to-long-term growth.
What’s New
Ticket Reading Systems for Compatible Use
of IC Cards
On March 23, 2013, Japan’s major IC card systems became
compatible with each other, enabling one card to be used at
which enables the same card to be used across Japan at 52
railway companies, 96 bus companies, and approximately
200,000 stores.
most stations in Japan’s largest cities between Hokkaido and
Compatible Use of IC Cards Nationwide
Kyushu. It was previously possible to use IC cards from one
area in others, but this was only available in limited areas. As
such, it was very inconvenient to travel through various different
regions. The introduction of the compatible-use system will
make travel and business trips much more convenient, creating
new potential for IC cards.
As a pioneer in the fi eld of automated ticket vending ma-
chines for almost 50 years, SSB contributed to society with its
automated ticket gate systems. Its 50 years of experience and
efforts to create social needs have led SSB to contribute to the
realization of the world’s largest IC card compatible-use system,
IC Cards
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Stationary Lithium-Ion Electricity Storage System
This system stores the electricity generated by solar power generation systems and
purchased from power companies and thus may be used as a power supply when
needed, such as during a blackout. The system employs lithium-ion rechargeable batter-
ies made with olivine-type lithium iron phosphate, known for their safety, and boasts
the high capacity of up to 19.2kWh coupled with a long lifespan that is resistant to
repetitive charging and discharging. Under normal operating conditions, the system
helps shift electricity usage away from peak hours, effectively cutting peak-hour usage
and conserving electricity. Should a blackout occur, the system automatically activates
to supply a defi ned load to specifi ed equipment, thereby ensuring that lighting, com-
munications facilities, and other equipment necessary to respond to disasters may be
kept functional.
As a means of realizing local electricity production and consumption, electricity stor-
age systems are gaining increased attention along with solar power generation systems,
which are an ever more important part of generation infrastructure. Omron’s electricity
storage systems can function as infrastructure for disaster countermeasures and will be
used to contribute to the development of safer, more secure, and more eco-friendly
social infrastructure.
Electricity storage system
56
Omron Corporation
Integrated Report 2013
57
Segment Information
Healthcare Business (HCB)
Providing health and medical devices and services for homes and
medical institutions
% of net sales
11%
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 2012 in Review
A clear recovery was seen from the impacts
of the Great East Japan Earthquake. Sales
and income were substantially higher both
in Japan and overseas.
In fi scal 2012, HCB sales and income were substantially
among medical institutions recovered, and performance
proved favorable. As result, net sales in Japan increased year
on year.
Overseas sales were up 19.4%, to ¥42.0 billion. Demand
remained low in Southern and Eastern Europe. However,
this was offset by ongoing strong demand for healthcare
higher, with net sales rising 14.5% year on year, to ¥71.5
devices in Russia and China as well as in emerging countries
billion, and operating income up 51.0%, to ¥4.4 billion.
in the Asia Pacifi c and other regions, and overall sales were
In Japan, sales increased 8.2%, to ¥29.5 billion. Demand
favorable as a result. Operations also benefi ted from a busi-
for home-use healthcare devices recovered from the period
ness alliance related to the sale of electric toothbrushes in
of stagnancy that followed the Great East Japan Earthquake,
Europe and the infl uence of rapid yen depreciation in the
and sales of mainstay blood pressure monitors and ther-
third quarter and onward. All these factors contributed to the
mometers were strong throughout the year. In addition, new
substantial rise in full-year overseas sales.
demand was stimulated by the launch of new products, such
Operating income increased greatly due to sales growth
as sleep duration trackers, sleep sensors, wrist-type blood
in Japan and overseas, which offset the impacts of the
pressure monitors, body composition monitors with IT
weak euro.
functions, electric toothbrushes, and electronic massagers.
As a result, full-year sales were strong overall. Investment
HCB Results and Forecasts
Check it out!
Fiscal Year
Net sales
Japan
Overseas
Americas
Europe
Asia Pacifi c
Greater China
Direct exports
Operating income
2009
2010
2011
2012
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
71.5
29.5
42.0
10.8
15.9
3.5
11.1
0.7
4.4
(Billions of yen)
2013
(Forecast)
82.5
31.0
51.5
13.0
18.1
5.6
14.3
0.5
7.0
Operating income margin
11.1%
6.7%
4.7%
6.2%
8.5%
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
5.0
1.9
3.1
* Beginning in fi scal 2010, the Omron Group has been revising the management guidance fees for the purpose of concen-
trating 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.
* The sales fi gures 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
offi ce expenses that are not apportionable.
* The forecasts for R&D expenses, depreciation and amortization, and capital expenditures are not publicized.
Analysis of external environment
Japanese 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
FY2011
FY2012
Omron Products
Other Products
Source: GfK
Sales of blood pressure monitors
surged in the second half.
Business Strategy and Outlook for Fiscal 2013
Sales growth will be targeted
in emerging markets.
We forecast a year-on-year gain of 15.4% in HCB net sales, to
¥82.5 billion, accompanied by a 58.8% increase in operating
income, to ¥7.0 billion, in fi scal 2013.
Trends that accompany economic development, including
improved standards of living, the adoption of Western diets,
and other lifestyle changes in such emerging countries as
Kiichiro Miyata
Managing Offi cer
President and CEO,
OMRON HEALTHCARE Co., Ltd.
China and India as well as those in Central and South Ameri-
In developed countries, people are growing more commit-
ca, have resulted in growing trends in lifestyle diseases. We
ted to preventing illness as obesity increasingly becomes a
anticipate these trends will result in the continued expansion
social issue and healthcare costs rise. This trend is expected
of healthcare device markets in these countries. To respond
to drive growth in the preventative medical care market. HCB
to such trends, we are strengthening sales systems on a
will act ahead of this market growth and develop new sens-
global basis and enhancing our network of distributors, phar-
ing devices and solutions in the fi elds of sleep and exercise
macies, drugstores, and other sales channels. In these ways,
that contribute to health improvement and illness prevention.
we are targeting increased sales in emerging countries.
These offerings will be used to create new markets.
What’s New
Simultaneous Launches of MedicalLink
Blood Pressure Management Service and
Blood Pressure Monitor That Automatically
Transmits Measurements Over 3G Networks
MedicalLink is an IT-based blood pressure management service
for medical institutions. This service supports the treatment of
hypertension by easily sending detailed at-home measurements
to one’s doctor. In conjunction with the start of this service on
May 10, 2012, Omron also launched the HEM-7251G digital
blood pressure monitor, which allows home measurement data
to be automatically transmitted to servers over 3G networks.
MedicalLink is employed at more than 1,500 medical institu-
With MedicalLink, the blood pressure measurements taken
tions across Japan. This service was utilized in the regions that
by hypertension sufferers at home are automatically analyzed
were heavily impacted by the Great East Japan Earthquake to
and shown in graph form on their doctors’ computers. Accord-
watch over senior citizens living alone in temporary housing.
ingly, this service frees patients from the hassle of manually
Further, Aizumisato Town, Fukushima Prefecture, used Medical-
keeping track of daily measurements. The service also makes
Link as part of a system that enables citizens to earn points
it easier for doctors to monitor changes in their patients’ blood
each time they measure their blood pressure. These points can
pressure, which was hard to do using hand-written records.
be exchanged for gift certifi cates and other services in their
Further, users can share real-time data with family members,
town. The system is a revolutionary new initiative that helps
who if living separately can quickly contact a doctor should they
raise health consciousness among citizens while simultaneously
notice a sharp rise in blood pressure.
stimulating the local economy.
Karada Scan Body Composition
Monitor: HBF-252F
This monitor features a quick and easy-to-
Blood Pressure Monitor:
HEM-6310F
The thinnest and lightest in the world,
Sleep Duration Tracker: HSL-002C
When placed bedside, this tracker re-
cords the user’s time to fall asleep, total
use automatic recognition to turn on the
this wrist-type blood pressure monitor is
sleep time, and the number of times
device and start measurements when
easy to store and carry around. Equipped
rolled over while asleep by reading the
one stands on it. It transmits data to PCs
with communication functions that allow
movements of bedding provoked by
and smartphones and realizes Omron’s
measurements to be viewed and man-
bodily motion. Data can be sent to smart-
fastest body composition measurement
aged on PCs and smartphones, it has the
phones to determine the user’s sleep
time of approximately four seconds.
quietest monitoring of any Omron blood
type and provide advice.
pressure monitor.
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Omron Corporation
Integrated Report 2013
59
Segment Information
Other Businesses
Several other business incubation operations
% 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 fi eld, where energy-conservation and CO2-reduction needs are
expected to continue growing, and the expanding smartphone market.
Fiscal 2012 in Review
Demand related to renewable energy
and smartphones contributed to sales.
In the Other segment, net sales increased 10.7% year on
due to concern for electricity supplies in Japan, which re-
sulted from the Great East Japan Earthquake. However, we
saw reduced demand from major customers for industrial-
use computers and contract development and manufacturing
year, to ¥59.2 billion, and operating income of ¥2.5 billion
services for electronic devices. This decrease in demand
was recorded in fi scal 2012, compared with an operating
resulted in overall lackluster full-year sales.
loss of ¥3.6 billion in fi scal 2011.
In the Micro Devices Business HQ, contract semiconduc-
The Environmental Solutions Business HQ experienced
tor manufacturing demand was down. Nevertheless, this
a signifi cant increase in full-year sales, with sales being
decline was offset by the benefi ts of increased demand for
particularly strong for PV inverters (energy-creation busi-
micro electrical mechanical systems (MEMS) microphone
ness). The strong sales can be attributed to the rise in
chips and custom integrated circuits for industrial use, and
renewable energy opportunities in society and the launch
sales proved favorable.
of the feed-in tariff scheme for renewable energy in Japan
In the Backlight Business, we worked to take advantage of
during July 2012.
increased demand in the smartphone market and success-
In the Electronic Systems & Equipments Business HQ,
fully began fi lling large-scale orders during the second half of
sales of uninterruptible power supply (UPS) units were brisk
the fi scal year. As a result, full-year sales were strong.
Other Businesses Results and Forecasts
Check it out!
Fiscal Year
Net sales
Japan
Overseas
Americas
Europe
Asia Pacifi c
Greater China
Direct exports
Operating income (loss)
Operating income margin
R&D expenses
Depreciation and amortization
Capital expenditures
2009
2010
2011
2012
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
59.2
41.4
17.8
0.0
0.0
0.0
16.3
1.5
2.5
4.3%
3.0
1.4
2.5
(Billions of yen)
2013
(Forecast)
62.0
36.5
25.5
0.0
0.0
0.0
23.5
2.0
3.5
5.6%
* Beginning in fi scal 2010, the Omron Group has been revising the management guidance fees for the purpose of concen-
trating 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.
* The sales fi gures 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
offi ce expenses that are not apportionable.
* The forecasts for R&D expenses, depreciation and amortization, and capital expenditures are not publicized.
Analysis of external environment
Facilities by approved output
(Thousands of kW)
15,000
12,000
9,000
6,000
3,000
0
7
8
9 10 11 12 1
2
2012
2013
Megasolar (more than 1,000kW)
Middle solar (less than 1,000kW)
Small-scale solar (less than 10kW)
Source: Agency for Natural Resources
and Energy (ANRE)
The number of solar power installations
is growing rapidly due to the infl uences
of the feed-in tariff scheme.
60
Omron Corporation
Business Strategy and Outlook for Fiscal 2013
The Environmental Solutions Business
is targeting further growth.
In the Other segment, in fi scal 2013 we are forecasting
development and manufacturing services for electronic
devices. Simultaneously, we will bolster our lineup of UPS
units, which continue to experience rising demand, in order
to better promote sales of these items.
a 4.7% year-on-year rise in net sales, to ¥62.0 billion, and
In the Micro Devices Business H.Q., demand for custom
a 38.6% increase in operating income, to ¥3.5 billion.
integrated circuits and other existing products will likely
In the Environmental Solutions Business HQ, we will
remain at the same level as in fi scal 2012. As such, we will
further expand the scale of operations by developing
focus our efforts on MEMS microphones and sensors, which
comprehensive energy solutions businesses that combine
are expected to see soaring demand, in markets for mobile
energy creation, storage, and saving. As the feed-in tariff
devices and consumer electronics. Through these efforts,
scheme is expected to boost market activity for industrial
we will work to expand sales.
solar power generation systems in Japan, we will work to
In the Backlight Business, we expect to enjoy the benefi ts
expand sales of PV inverters in the Japanese market as we
of demand created by the ever increasing need for thinner
target a higher market share. We will also expand the energy-
smartphones and tablets with larger screens. Taking advan-
creation business by providing services that support the
tage of these benefi ts, we will utilize our unique ultrafi ne
stable operation of solar power generation systems over the
processing technologies and pressing technologies to ex-
long term. At the same time, we forecast higher sales in
pand orders for backlight units to be used in high-end smart-
the energy-saving components and services business.
phones and tablets. Moreover, we will continue to advance
In the Electronic Systems & Equipments Business HQ,
the automation of and boost the productivity of production
we aim to capture a higher volume of orders from major
lines for mass-produced products while simultaneously
customers for industrial-use computers and contract
reducing costs in the pursuit of improved profi tability.
What’s New
Omron Receives METI Minister’s Prize in New Energy
Grand Prix Program
Omron was awarded the highest Minister of Economy, Trade
operate even during islanding condi-
tions. To prevent this situation from
occurring, it was previously necessary
and Industry Prize (METI Minister’s Prize) in the Excellent Prod-
for tests to be conducted to verify that
ucts / Services Category of the 2012 New Energy Grand Prix
Program in recognition of its proprietary AICOT® technology,
which is anticipated to make signifi cant contributions to the
spread of solar power generation systems.
interference problems will not occur between differing systems.
Moreover, because islanding detection over a wide area was
diffi cult, solar power systems were limited by safety regulations
to approximately 10% of the sites in each area in order to keep the
In recent years, there has been rising interest in renewable
power grid safe. This issue has been a relatively unnoticed obstacle
energy, which in turn has driven a rapid rise in solar power
hindering the proliferation of solar power generation systems.
generation system installations.
Omron’s answer to this issue is PV inverters that employ the
When solar power generation systems are connected to the
proprietary AICOT® technology.
power grids of power companies, it is necessary to ensure the
systems remain safe during blackouts. For this reason, the PV
inverters used in solar power generation systems must be able
to detect when the system is islanding and contain provisions to
Employing an islanding detection method that is signifi cantly
faster than conventional methods, AICOT® successfully eliminates
the danger of interference. AICOT® can also be easily introduced
into systems without gathering data through interference tests.
prevent power from being transmitted during blackouts. However,
On top of this, it features a wider area detection capacity, thereby
the islanding detection methods used by PV inverters vary be-
tween different manufacturers, and it is therefore possible that
PV inverters will interfere with each other, leading PV inverters to
removing the limitations on system installations. It is anticipated
that these benefi ts will help AICOT® make substantial contribu-
tions to the spread of solar power generation systems.
Backlight Units for High-End
Smartphones
This range of backlight units has been
Uninterruptible Power Supply
Units: BU-2RW Series
This series provides a range of 200V
MEMS Differential Pressure Sensor
This thermal fl ow-type sensor measures
with superior sensitivity and reproduc-
refi ned to better meet customer needs
rack-mounted, continuous inverter UPS
ibility in low pressure environments and
by using our breadth of experience and
units ideal for industrial or embedded
with a wider pressure range. Embedded
sophisticated technologies.
system applications. Moreover, these
application specifi c integrated circuits
units are equipped with LCD monitors to
carry out digital correction to read pres-
easily confi rm the status of the unit.
sure with higher preci-
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infl uence from tempera-
ture than conventional
analog output sensors.
Integrated Report 2013
61
Intellectual Property Strategy
R&D
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 profi tability and promoting the business growth of the Omron Group.
Establishment and Implementation of the
Omron Intellectual Property Guidelines
Omron has established the Omron Intellectual Property Guidelines,
based on the Management Principles, to serve as guiding principles
and judgment criteria for the execution of activities related to intel-
lectual 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 that strategy.
strategies, the Center aims to remove the obstacles that might
impede business divisions when they operate in these countries.
Over the long term, the Center contributes to the growth of our
business value through intellectual property by strengthening internal
coordination to respond to future business globalization and rapidly
changing market conditions. We are accurately assessing our core
technologies, creating an organized map of our businesses and
technologies, and thus connecting our vertical businesses horizon-
tally by leveraging our intellectual property strengths.
Omron 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 and functions 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 effi cient and effective use of
management resources. Specifi cally, in the core Industrial Automa-
tion (IA) Business (IAB & EMC), we aim to secure high growth rates
and signifi cant profi tability during the period of our Value Generation
2020 (VG2020) long-term strategy. To this end, the Center will
strengthen ties with business divisions and clearly identify the
competitive circumstances surrounding key product lines. We expect
that this will enable us to advance more precise intellectual property
strategies. The Center also identifi es and analyzes technological
trends in growth markets, such as the environment and healthcare
markets. Based on the fi ndings, the Center establishes intellectual
property strategies in cooperation with business divisions to ensure
the divisions are fully prepared to create an Omron-style business
using fundamental Omron technology and to respond swiftly when
the markets begin expanding. Further, the Center is responsible for
developing intellectual property portfolios in conjunction with busi-
ness strategies and in response to the globalization of Omron’s
business. By accelerating the acquisition of intellectual property
rights in countries that represent important markets for Omron’s
future ahead of the advancement of business globalization
Intellectual Property and R&D-Related Data
Strengthening Globalization of Intellectual Property
Omron is working harder on its intellectual property in conjunction
with the globalization of its business. In particular, the Singapore site
is positioned as a hub that is capable of consolidating patent applica-
tions and fi lings for those innovations created by the Group globally.
At the same time, the headquarters is developing the systems
necessary to support intellectual property activities in general in the
Asia Pacifi c region, which is anticipated to experience rapid market
growth. In addition, we have expanded both our production and
development activities in China. As such, we aim to greatly enhance
our intellectual property in this country to support localized innova-
tion. To this end, we are providing intensive training for Chinese staff
to cultivate local intellectual property management and specialist
staff that will be key to this innovation. Similarly, in the United States
and Europe, we are strengthening intellectual property systems and
cultivating related regionally oriented staff.
Thus, we are making steady progress in fortifying our foundation
for intellectual property through the active cultivation of staff at all
our 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 strengthen the foundation of this global
intellectual property management system.
Intellectual Property Holdings in Japan and Overseas
Trademark rights
12%
Design rights
12%
Overseas
Patent rights,
Utility model rights
27%
Patent rights,
Utility model rights
30%
Japan
Design rights
10%
Trademark rights
9%
2012
1,084
1,172
6,448
43.5
6.7%
Total number of
intellectual
properties held:
11,367
(as of
March 31, 2013)
2011
1,068
915
5,959
42.1
6.8%
Fiscal Year
Number of patents:
Applications
Approvals
Total patents
R&D expenses (billions of yen)
R&D expenses / Sales ratio
62
Omron Corporation
2008
1,119
826
5,205
48.9
7.7%
2009
794
730
5,218
37.8
7.2%
2010
901
753
5,452
41.3
6.7%
Omron aims to provide society with higher levels
of safety, security, and healthcare and eco-friendly
products and services. To that end, we are constantly
developing new technologies and products.
Omron Will Concentrate on Strengthening 10 Areas of Technology
Omron has continually worked on enhancing its core “Sensing and Control” technologies with the aim of contributing
to the development of the “post-industrial society.” In Omron’s long-term management strategy, Value Generation
2020, we set the following 10 areas of technology as areas to strengthen through increased R&D with an eye to future
needs. Through reinforcing these10 areas throughout the Omron Group, we are aiming to optimize performance, cost,
and speed in order to respond to intensifying global competition.
10 Areas of Technology
Sensing & control
+ intelligence
technologies
Extracting needed data from a range of information and processing this
in a more intelligent way to create greater value
1. Detection, identifi cation,
and recognition technologies
2. Power electronics design
technologies
3. Control technologies
4. Knowledge information technologies
Methodology and facilities designed to realize greater productivity
Methodology
and facility
technologies
Utilization
of open
technologies
Technology
development
effi ciency
enhancement
5. Materials and methods technologies
6. Facility and process technologies
Creating technological innovations through collaborative development utilizing
original technologies and open technologies
7. Network technologies
8. Embedded technologies
Through development process innovation, we aim to greatly enhance
technology development effi ciency in order to be able to create new products
with overwhelming speed.
9. Computer-aided engineering (CAE)
10. Development processes
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Integrated Report 2013
63
Quality
Provision of Safe and Secure Products and Services
Omron is constantly improving the quality of its products and services to satisfy its customers. In this endeavor,
Creation of Safe and Secure Products
That Meet Area Needs
OMRON HEALTHCARE Co., Ltd., is accelerating the glocal-
Initiatives to Improve the Reliability of
Solar Power Systems
OMRON Aso Co., Ltd., operates Omron’s main factory for
we realize that ensuring the safety of the products and services we offer is important to the continuity of our business.
ization* of products. To this end, it employs universal design
eco-friendly products and is thus responsible for manufactur-
We are therefore taking steps to guarantee that our products function safely and can be used with peace of mind.
IAB’s Global Quality Assurance System
Omron’s Industrial Automation Business (IAB) generates
product functions from the user’s perspective. These plans
are used to evaluate the design of all products. Should an
approximately 60% of its sales overseas, and it is becoming
issue be discovered, response teams quickly develop ap-
increasingly more important to respond to the diversifying
propriate revisions and preventative measures and then
needs for products and services of customers in Europe,
rapidly communicate these measures throughout all areas of
Americas, Greater China, and the Asia Pacifi c region.
operation in accordance with global standards. In this way,
IAB is dedicated to preventing the creation and shipment
the quality management methods developed in Japan have
of defective products as well as the recurrence of any issues
been made the standard for our global operations, and we
that may occur. Accordingly, IAB has developed a quality
have installed an effective improvement cycle in all regions
assurance system that is standard throughout its global
of operations. As a result, the number of requests to analyze
operations. The underlying foundations for this system are
products in response to issues discovered declines with
the quality management techniques and design technologies
each coming year.
Omron has accumulated to date.
At the same time, the information gained from repairing
IAB procures components from around the world in
and analyzing products brought into repair centers in each
search of those that will best meet its customers’ product
region helps us develop an understanding of the differences
needs. To ensure the quality of these components, Omron’s
in infrastructure and product usage methods between re-
specialized technicians periodically inspect the production
gions. This understanding in turn enables us to adapt the
lines of component manufacturers, and we otherwise work
specifi cations of products to the needs of specifi c areas. For
with these manufacturers to manage quality. In this manner,
example, in response to feedback from China, we developed
we have put in place systems that prevent defective prod-
power supply equipment that functions stably even in areas
ucts from being created by suppliers.
with unstable power supplies. Through such efforts, we are
IAB also conducts quality management during the develop-
creating new products, services, and support methods
ment phase. Based on a clear understanding of the charac-
based on the feedback received daily through our global
teristics of each component to be used, component quality
network of more than 160 bases.
plans are established to provide a multifaceted evaluation of
Our global network of more than 160 bases is a powerful tool for supporting customers
in advancing the globalization of their business. Each base provides technical consulting,
repairs, and other services to meet the needs of the region in which they are located.
Europe
concepts to make its products easy for anyone to use. At the
ing PV inverters and energy monitoring equipment. For
same time, the company works to uncover latent needs
some time now, this company has been working to reduce
stemming from the unique lifestyles and cultural back-
energy wastes and stabilize usage by installing energy moni-
grounds seen in the markets of emerging countries, which
toring systems and actively tracking energy usage. In order
are known for featuring a diverse range of lifestyles.
to further accelerate these efforts, we established the
Aso Solar Power Training Center, which serves as a training
site for improving engineering capabilities and acquiring
the ability to verify whether or not energy is being used
optimally in solar power generation systems.
Aso Solar Power Training Center
Professional blood pressure monitor HBP-1300 (Japan model)
This training center employs nine solar power generation
systems (total generation capacity of 100kW), including
One example of these efforts would be the HBP-1300
those from both Japanese and overseas makers, which are
blood pressure monitor for medical institutions, which was
used to conduct training geared toward fostering technical
developed to be especially easy to use for the nurses that
skills related to improving product reliability and conducting
measure the blood pressure of patients in Chinese hospitals.
verifi cation testing on products as well as constructing solar
This product employs universal design concepts to enhance
systems, which is learned through hands-on practice. In this
operability in medical institutions. The monitor is slanted to
manner, the training center supports the company in devel-
make the display easier to see by nurses when they mea-
oping engineering systems that enable it to conduct techni-
sure patients’ blood pressure while standing. The HBP-1300
cal verifi cation and offer high-quality services nationwide to
is also the fi rst Omron blood pressure monitor equipped
respond to customer needs.
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with shock-absorbing bumpers to protect the device should
it be dropped. Further, to meet the requests of nurses, the
device features a backlight that allows for measurement
results to be read even in dark places, such as the nighttime
hospital ward. In addition, OMRON HEALTHCARE respond-
ed to the needs of medical institutions, where measure-
ments are frequently conducted, by utilizing more durable
pumps and sensors to increase the overall durability of the
HBP-1300.
Greater China
The HBP-1300 has since been adjusted in consideration of
Solar system construction training
Africa
Asia Pacific
South Korea, Japan
Americas
Oceania
Sales Representative Offices
Sales Branches
the needs of Japan, India, and other markets, and it is now
catering to the needs of a diverse range of medical institu-
tions around the world. Going forward, OMRON HEALTH-
CARE will continue to plan products ahead of social trends in
order to propose the use of items that satisfy people around
the world.
* Glocalization: A combination of globalization and localization
64
Omron Corporation
Integrated Report 2013
65
Human Resources
Respect for Individuality and Diversity and Cultivation of
Human Resources That Can Compete on the Global Stage
One of the Management Commitments described within the Omron Principles is “Respect for individuality and diver-
sity.” Based on this spirit, Omron believes that it is vital to motivate employees with various values and opinions to
fully demonstrate their capabilities without regard to their nationality, gender, or disability in order to achieve both
individual development and growth of the Company. In accordance with this belief, we aim to make Omron a com-
pany that encourages people to grow.
Global Human Resources Strategies
for Individuals and Teams
Omron has positioned human resources strategies as an
and take on challenges while working together as a team.
As one concrete initiative, we began presenting The OMRON
Global Awards (TOGA). In this competition, employees sub-
important element of its overall management strategy to
mit examples of themselves undertaking challenges related
be advanced in order to ensure the steady progress of its
to the three Management Principles of the Omron Prin-
long-term management vision, Value Generation 2020
ciples—Challenging ourselves to always do better, Innovation
(VG2020). The main constituents for advancing these strate-
driven by social needs, and Respect for humanity. We then
gies will be the individuals and teams within the Group, and
select superior examples of employees exercising the corpo-
Omron’s human resources strategies call for both of these to
rate philosophy through presentation rallies and qualifying
be strengthened. Specially, we are implementing the follow-
competitions, with winning entries shared throughout the
ing three human resources strategies, which have been
Omron Group. In fi scal 2012, more than 20,000 entries were
developed in consideration of tasks that currently need to
received from around the world on approximately 2,500
be addressed.
different themes. This competition will continue to be based
The fi rst is the development of human resources that can
on voluntary entry to encourage employees to act on their
fi ll “core positions,” or posts that have been defi ned as criti-
words so that we may subsequently share throughout the
cal. This strategy aims to address the task of maintaining a
Group examples of exercising the corporate philosophy that
suffi cient number of quality global business leaders. Omron
we want other employees to emulate. We believe that this
has defi ned 170 core positions, 60 of which are based over-
approach will further ensconce a corporate culture that
seas, that are critical to advancing the VG2020 strategies, and
inspires employees to take on challenges.
it is actively seeking out and educating human resources
capable of fi lling these positions. In addition, the same posi-
tion evaluation standards are applied throughout Omron’s
global operations to assign the best employee to each posi-
tion from a total optimization perspective, no matter where
in the world the employee is based.
The second strategy is to establish global uniformity with
regard to human resources systems. In concrete terms, we
will adjust systems for positioning, transferring, developing,
and evaluating human resources on a global basis. In fi scal
2012, we instituted a program for selecting and educating
future business leaders. At the same time, we began estab-
lishing education programs for all Omron employees world-
TOGA qualifying competition held at corporate headquarters in Kyoto
wide and developed standard global programs for new
Going forward, we will continue to establish the necessary
employees and new managers.
systems for strengthening our global operations and advance
The third is developing a global corporate culture united by
our human resources strategies to guarantee the success of
practicing the Omron Principles, our corporate philosophy.
VG2020.
We have defi ned the appropriate corporate culture for guar-
anteeing the success of VG2020 as a strong team-based
culture that encourages employees to continue taking on
Empowerment of Women on a Global Scale
Realizing the importance of empowering women, Omron
new challenges. For individuals, we expect them to be strong
established a new department for this purpose in fi scal 2012,
as professionals while also having strong ties to their cowork-
and it is actively advancing women empowerment initiatives.
ers. More specifi cally, we are targeting a corporate culture in
Omron has been committed to recruiting talented people
which all employees around the world share the same goals
without regard to gender while also working to establish a
workplace environment that can allow them to fully demon-
strate their capabilities and contribute to the Company’s
management. Over the years, Omron has continued to
institute a number of measures to this end, including the
launch of a training program targeting mid-career or assistant
manager class female employees. Also, we hold social
events, workshops, and seminars for female employees to
help them network. With regard to the workplace environ-
ment, we are taking steps to improve systems for support-
OMRON Taiyo factory innovated to provide a comfortable workplace
environment for people with disabilities
ing female employees in balancing their work-life with their
more comfortable workplaces for people with disabilities.
home-life. As a result of these efforts, we are seeing a
Thanks to these efforts, the factories are becoming an ever
steady rise in the number of female employees in leadership
more conducive environment for enabling employees to
roles in Japan. Nevertheless, in Japan, only 1.5% (23 em-
exercise their skills. Improvements to the workplace environ-
ployees) of managerial positions were fi lled by women as
ment at these factories have been realized through the
of April 2013. Going forward, we will establish concrete
introduction of production tools, support equipment, and
goals for promoting female employees and work to draw out
semi-automatic devices that employees develop themselves
the potential of female members of the Omron Group so
in accordance with their own needs, as well as through
that we may further improve corporate value.
other activities seeking improvement in such areas as pro-
Message from Representatives
Megumi Hamada (right) and Chie Uemura (left) from
the Global Human Resource Development Department
In the Omron Group outside Japan, women already
fi ll many managerial positions. In Japan, we are making
efforts to promote it as the diversity management.
For this reason, we are going to develop a workplace
environment in Japan that will further empower
Omron’s female employees.
Expansion of Employment Opportunities
for People with Disabilities
OMRON Taiyo and OMRON Kyoto Taiyo
At Omron, we respect individuality and diversity, as is
pledged by the Omron Principles. As such, we are expanding
employment opportunities for people with disabilities.
Inspired by our corporate core value—“Working for the
benefi t of society”—we established OMRON Taiyo Co., Ltd.,
in 1972 in cooperation with social welfare organization Japan
Sun Industries. Based in Beppu, Oita Prefecture, this com-
ductivity or quality. At the same time, employees are devel-
oping their own skills so that they may better utilize this
environment.
OMRON Taiyo lists examples of improvement activities from
fi ve perspectives—quality, productivity, the environment,
occupational health and safety, and work range expansion—
on its website.
At OMRON Kyoto Taiyo, improvement activities are ad-
vanced by all employees under the slogan of “A step of a
hundred is greater than 100 steps of one.” These activities
focus on organization, orderliness, and cleanliness and help
cultivate a drive for improvement and a pioneer spirit.
Both factories manufacture blood pressure monitors and
digital thermometers equipped with voice functions. Employ-
ees from OMRON Kyoto Taiyo participate in the development
of some of these healthcare devices from the design phase,
proposing ways of making them easier to assemble and use
for people with disabilities.
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Healthcare device production line at OMRON Kyoto Taiyo
pany established Japan’s fi rst factory for the employment of
Furthermore, we draw on the knowledge gained from
people with disabilities. Later, in 1986, we established OM-
these employees, as well as on our universal design
RON Kyoto Taiyo Co., Ltd., in Kyoto.
expertise, to help contribute through other activities to
Over the years, a number of measures have been imple-
the development of more comfortable working and living
mented to make OMRON Taiyo and OMRON Kyoto Taiyo
environments for people with disabilities.
66
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Resolving Environmental Issues
New Vision Contributing to the Global Environment
Omron Group Environmental Policy
Recognizing environmental preservation as a management priority, Omron revised its environmental management
vision, which is now called “Green Omron 2020,” in 2011. Based on this new vision, the Company will promote two
key measures: environmental contributions of its products and services and reduction of the environmental impact
of its business activities.
Green Omron 2020
Reduction of Environmental Impact on a Global Scale
Environment Contributions Exceeding
Our Environmental Impact
Omron established the Group’s Environmental Policy in
activities on a global scale by creating and supplying
products and services that reduce the environmental
footprint of society.
1996 and its environmental management vision, “Green
Under this vision, we aim to contribute to the develop-
Omron 21” in 2002. Based on this policy and vision,
ment of a sustainable society by maximizing the effec-
Omron has promoted environmental management prac-
tiveness of management resources. Meanwhile, rather
tices centered on lessening the impact of its business
than merely focusing on the environmental impact as-
activities on the environment. Efforts were concentrated
sociated with increased business activities, we will also
on reducing total CO2 emissions and the amount of
concentrate on reducing environmental impact by gener-
waste associated with business activities in Japan.
ating more products and services that contribute to the
The Omron Group formulated its new environmental
global environment. Having expressed these thoughts in
management vision, “Green Omron 2020,” in September
our Environmental Policy, we have established Company-
2011. In addition to continuing with efforts to reduce the
wide environmental targets and have also defi ned Activ-
environmental impact of its internal business activities,
ity Areas and Action Guidelines to realize the objectives
the vision prescribes for the Group to contribute to the
of Green Omron 2020.
reduction of the environmental impact of its business
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
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 effi ciently, we will communicate it to all
employees 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 appropri-
ate manner as necessary.
Green Omron 2020 Environmental Targets
The Omron Group’s Environmental Targets for Fiscal 2020
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1. Improve carbon productivity*1 (targeting global sales / CO2 emissions from global production sites) by 30% compared
with the fi scal 2010 level on a global basis
*1 Carbon productivity: Net 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
For more information regarding the progress of 1. and 2.,
please refer to Financial and Non-Financial Highlights on page 21.
Activity Areas and Action Guidelines
Strive to minimize the input of energy/
resources for business activities while
promoting recycling/reuse and reduction
to minimize waste.
Offer customers environmentally warranted
products that help reduce negative environ-
mental impact throughout their life cycles.
Eco-Factories / Offi ces / 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.
Expand acquisition of ISO 14001 certifi cation
and establish a multi-site ISO registration
system while reducing environmental risk
and ensuring legal/regulatory compliance.
Eco-Logistics
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
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Quest to Become the No. 1 Eco-Factory in the Industry
Receipt of the METI Minister’s Prize in the Energy Conservation Grand Prix Program
Promoting an eco-conscious initiative for plant diagnostics and optimization through
the Andon environmental information system
In fi scal 2012, Omron received the Minister of Economy, Trade and Industry Prize (METI Minister’s Prize) in the Energy-
Saving Activities Category of the 2012 Energy Conservation Grand Prix Program. This award program is hosted by the
Energy Conservation Center, Japan (ECCJ), and supported by the Ministry of Economy, Trade and Industry. Omron was
awarded this highest honor for the environmentally responsible initiative being implemented at its Ayabe Plant in
Kyoto. The initiative employs the Andon system to conduct diagnoses used to optimize the plant’s power usage and
other production-related variables.
Eco-Factory Initiative
In October 2010, the Ayabe Plant launched an initiative to
usage. This system enabled the real-time monitoring and
diagnoses of events for which no improvements had been
further enhance energy-saving efforts at its production site.
possible up until this point due to the time-consuming nature
Through this initiative to maximize energy effi ciency, the
of examination and analysis processes. This in turn helped
Ayabe Plant aims to cut power usage in specifi ed areas to half
facility management staff (suppliers of energy) and factory
the existing level by March 31, 2014. The ultimate goal of this
operators (users of energy) to work collaboratively to pro-
effort is to become the “No. 1 eco-factory in the industry.”
mote energy conservation.
The efforts at this plant began with monitoring electricity
As a result of these efforts, the Ayabe Plant was able to
usage data and were then expanded to include energy-
realize a 50% reduction in power consumed by clean rooms,
saving activities conducted by identifying causes of energy
which require a large amount of electricity. At the same
waste and improving operational effi ciency. The plant will
time, the amount of air-borne dust was reduced by two-
subsequently use control technologies to further boost
thirds. These are just some examples of the 34 documented
energy savings. In the future, the plant intends to utilize
energy-saving and environmental improvements that the
renewable energy and regenerative energy to create and
plant had achieved in January 2013 by cutting electricity usage
store energy. Through this series of efforts, the Ayabe Plant
while improving productivity and product quality. The Ayabe
is devoted to optimizing energy usage throughout the
Plant has been continuously implementing new energy-saving
entire facility.
activities in order to increase the number of improvement
To this end, the Ayabe Plant has installed a variety of
cases to 50, aiming to attain its initial goal of halving power
sensors and its own Andon diagnostic system for power
usage in specifi ed areas by March 31, 2014.
The Ayabe Plant’s Eco-Factory Goal
Targeting a factory with optimal energy use
that generates, stores, and controls energy for savings
Store
Create
Energy savings
through control
Use
Improved
operational
efficiency
Identification
of energy
waste causes
10%
1st
STEP
INDUSTRY’S NO.1
ECO-FACTORY
50%
3rd
STEP
30%
2nd
STEP
We define “eco-factories” as those factories that address
environmental issues head-on and are fully equipped with
technological systems for using industrial products with
reduced environmental impact, lowering pollution,
preserving ecosystems, saving energy, and employing
recycling production systems that conserve resources.
2010
2011
2012
2013
(FY)
The plant is also active in sharing its improvement efforts by
environmental data among the production fl oor staff that
arranging factory tours and holding seminars for manufactur-
are most knowledgeable about operations.
ers at home and abroad.
From Monitoring to Diagnostics:
The Andon Environmental Information System
Effective monitoring entails helping track recorded electricity
This system provides constant, real-time monitoring of
electricity and environmental data. It also provides central-
ized monitoring, which enables data to be arranged by
facility, production line, fl oor, or production stage, and
consequently makes it easy for viewers to see the informa-
and environmental data by displaying it through graphs,
tion they want while also facilitating easier understanding.
bulletin boards, and other means. In order to make further
One function that is particularly characteristic of this sys-
use of this information, it can be deciphered and analyzed
tem is the abnormality monitoring function that informs fl oor
according to usage goals. It is also possible to further evolve
staff what to do should operating conditions change or an
these analyses to provide diagnostics that inform users
abnormality be detected. Another characteristic function is
about the differences between their goals and reality and,
the system’s communication function, which makes it easy
more importantly, help them realize what they must do in
for all members of the production staff to view actual, cen-
order to address these issues.
tralized data, thereby enabling them to maintain a better
Omron’s Andon environmental information system is
understanding of the circumstances at their plant. This in
capable of providing such diagnostics through constant
turn makes it easier for energy and environmental matters to
and centralized monitoring of relevant variables. The Andon
be discussed at the workplace. In this manner, the Andon
system is not a monitoring tool to be used by managers in
system effectively fosters awareness regarding energy
charge of energy savings. Rather, the system is ideally used
saving among all employees and helps all-hands initiatives
as a bulletin board for communicating energy-saving and
be advanced.
Contribution to the Future
It is often believed that energy savings cannot be realized at
productions sites without sacrifi cing quality or productivity.
However, Omron feels that fundamental improvements in
energy-saving and environmental initiatives can enable these
activities to be advanced while simultaneously realizing
improvements in quality and productivity.
The Andon environmental information system was com-
mercialized in June 2013. By providing products such as this,
Omron aims to share the knowledge it has gained through
eco-conscious optimization initiatives with manufacturers and
other customers in Japan and the rest of the world. In this
way, we aim to contribute to the future of manufacturing
by enabling customers to more easily maximize their
energy effi ciency.
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Evolving Monitoring into Diagnostics
and Finally Optimization
Optimize
Diagnose in Comparison
to Standards (goals)
(Evaluate differences between
goals and reality Control
and prevention)
Diagnose
Decipher and Analyze
(Compile databases, stratify and
deepen data Improvement)
Analyze
Sense (Make Apparent)
(Acquire data,
arrange in charts
and graphs Awareness)
Monitor
IAB’s lineup of products for
supporting monitoring efforts
Electricity monitoring systems
and humidity sensors
Andon environmental information system in use
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Relationship Building with Shareholders
IR Activities Focusing on Dialogue
Undertaking Proactive Information Disclosure
We employ an IR site and various other tools to support
• The president, head of management, has continued
interactive communications with shareholders and other
to conduct active dialogues with investors since his
With its investor relations (IR) policy emphasizing interactive communication with current and potential
investors by disclosing information on product develop-
appointment.
investors, Omron provides timely and accurate information on the Company’s business conditions and
ment and sales activities tailored to specifi c markets as
• Important information is accumulated within the IR
management policies. Omron also aims to refl ect investors’ comments in its management strategies to
well as information on operating performance. Our IR
department, which is placed under direct control of
the fullest extent possible to maximize corporate value.
Creating More Open and Interactive
Shareholders’ Meetings
In an effort to make its shareholders’ meetings more
attendance fi gure ever. In addition, 84.3% of voting rights
were exercised, which represented an increase of 2.6
percentage points from the preceding year.
open and easier for shareholders to attend, Omron
In order to provide information to shareholders as quick-
schedules meetings to avoid days on which the share-
ly as possible, the convocation notice for the 76th general
holders’ meetings of other companies are concentrated.
meeting of shareholders, released in May 2013, was
We use a conveniently located hotel at the JR Kyoto
posted on the Company’s website prior to being mailed.
Station as the venue for these meetings. Also, we have
adopted systems that allow shareholders to exercise
their voting rights by post as well as an electronic voting
system that enables shareholders to exercise their voting
Aiming to Strengthen Two-Way
Communications
To enhance communications with individual investors,
rights via personal computer or mobile device. Since
Omron conducts corporate presentations and participates
2006, Omron has offered access to the Electronic Voting
in investor fairs. In fi scal 2012, Omron participated in 17
Platform, creating an environment whereby institutional
IR events, communicating with some 1,100 investors.
investors in Japan and overseas can quickly provide docu-
ments for the general meeting and smoothly exercise
their voting rights.
After the close of the general meeting, a separate pre-
sentation to explain management conditions is held as
well as a shareholder round-table conference. These
events provide the opportunity to offer shareholders fur-
ther information on Omron’s initiatives that could not be
communicated during the general meeting.
Tokyo Stock Exchange IR Festa 2013
For institutional investors, Omron provided about 800
communication opportunities in fi scal 2012.
In addition, we actively utilize our website. As one
example, we posted a video containing a message from
the president to individual investors in which he explains
the introduction of the shareholder benefi t program.
In fi scal 2012, we worked to make the convocation
Input and feedback obtained through dialogues are
notice for the general meeting of shareholders easier to
relayed via the IR department to the Company’s senior
understand. To this end, notices were printed in color and
management. Examples of improvements implemented
made more visual through the inclusion of photographs
in response to dialogues with shareholders include the
and graphs. The information content of the notice was
introduction of the shareholder benefi t program and the
also enhanced. Our June 2012 meeting was attended
cancellation of treasury stock. Going forward, we will
by 796 shareholders, 134 more than in the meeting in
continue to draw on the opinions of shareholders to help
the preceding year (fi scal 2011), making for the highest
formulate various management strategies.
site features a message from the president, explanations
the president, and the department offers appropriate
of our strategies and operating performance, and
responses to inquiries.
video footage.
• The IR department displays strong motivation toward
In fi scal 2012, we held tours of our plant in Kumamoto
improvement and discloses easy-to-understand informa-
Prefecture for institutional investors and analysts.
tion and explanations with regard to each business
Tour of OMRON RELAY & DEVICES Corporation plant
In addition, we received the IR Grand Prix Award in the
Japan Investor Relations Association’s Seventeenth An-
nual IR Grand Prix. The IR Grand Prix Award is only pre-
sented to companies that have received the Best IR
Award at least two other times in the past. Having re-
ceived the Best IR Award in fi scal 2006 and fi scal 2007,
Omron was thus presented with the prestigious IR Grand
Prix Award as this is its third time to receive an award
through this program. The Japan Investor Relations As-
sociation’s reasons for presenting this award to Omron
are as follows.
division.
• The investor relations department values investor feed-
back and holds internal explanatory forums and con-
ducts other activities to transmit this feedback
throughout the Company.
• The Company conducts activities to respond to the
needs of individual investors through a multifaceted
program incorporating its website, investor fairs, and
explanatory forums.
• The annual report has highly evaluated statements from
representatives of each business division, and the CSR
report has been integrated into this report.
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Award ceremony for IR Grand Prix Award
Going forward, we will continue to pursue improve-
ment to better provide information to our shareholders,
investors, and all of our other stakeholders.
Asia Pacifi c (AP)
As of July 2013
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Integrated Report 2013
73
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
CSR Management
Corporate Motto
At work for a better life,
a better world for all
The Omron Principles
Corporate
Core Value
Working for the
benefi t of society
Management Principles
• Challenging ourselves to always
do better
• Innovation driven by social needs
• Respect for humanity
Management Commitments
Guiding Principles for Action
• Respect for individuality and diversity
• Quality fi rst
• Maximum customer satisfaction
• Relationship-building with shareholders
• Awareness and practice of corporate
• Unceasing commitment to
challenging ourselves
• Integrity and high ethics
citizenship
• Self-reliance and mutual support
Corporate Core Value:
“Working for the Benefi t of Society”
On May 10, 2006, in honor of Omron’s Foundation 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 benefi t 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 confi dence from society as good corporate citizens
and thus successfully continue to survive as businesses. The
core value reemphasizes the Company’s commitment to
offering benefi ts for society while also clearly stating Omron’s
determination to promote business management that
emphasizes value for stakeholders that comprise society.
Instilling “Management Commitments”
and “Guiding Principles for Action”
Based on the Corporate Core Value
through Two Guidelines
To ensure the fundamental CSR concepts specifi ed in
corporate philosophy. These lectures were held over the
period from 2008 to 2009 and were attended by a cumula-
tive total of 3,000 executives. Between 2011 and 2012,
Omron’s chairman and vice chairman visited the sites of
global operations, where they met with 300 executives to
the Management Commitments are being thoroughly prac-
discuss the concepts behind the Omron Principles and their
ticed by all Group employees, Omron has formulated two
implementation. These meetings assisted in confi rming
guidelines. The CSR Practice Guidelines establish a code
mutual understanding with regard to the principles. In fi scal
of conduct outlining the societal responsibilities of each
2012, we launched two new initiatives—The Omron Prin-
organization in the Omron Group. The second guideline,
ciples Dialogues and The OMRON Global Awards (TOGA).
Implementing the Guiding Principles for Action, details
These initiatives are designed to cultivate a corporate culture
specifi c actions expected of all employees in the course of
with an emphasis on addressing new challenges by facilitat-
their everyday activities and constitutes Guiding Principles
ing understanding with regard to the Omron Principles so
for Action for the corporate philosophy.
that they may be linked to one’s work and practiced therein.
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
The Omron Principles Dialogues
The Omron Principles Dialogues are a series of group work-
for the benefi t of society.” To cultivate employee understand-
shops focused on developing a pioneer spirit within the
ing, workplace meetings are held once each year to confi rm
framework of the corporate philosophy. These workshops are
and debate the content of these guidelines.
held for all Omron Group employees around the world. To
We have translated these two guidelines into 25 languages
further deepen understanding with regard to the importance
so that they can be put into practice on a global basis.
Activities to Instill the Omron Principles
Throughout its history, Omron has continued to advance
of the Omron Principles and their implementation at overseas
subsidiaries, the Company’s chairman meets with the senior
management of these subsidiaries and holds lectures and
group discussions on the subject. After such meetings with
activities geared toward instilling its corporate philosophy
senior management are held, these managers conduct group
on a global basis. After the 2006 revision of the Omron
sessions at the operating sites around the world. We expect
Principles, the Company’s directors held a series of lectures
that these efforts will produce results during fi scal 2013 as all
targeting executives to explain and further instill this
employees come together in exercising a pioneer spirit.
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
• 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 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.
Framework of CSR Activities
Business
Society Environment
Promote more transparent corporate activities that
Corporate Governance / Internal Controls
maintain fairness and integrity not only through strict
compliance with laws, regulations, and social rules but
also through increased accountability.
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Integrating CSR Promotion under Our Management Strategy
In fi scal 2011, Omron formulated a new long-term strategy, VG2020, centered on a CSR perspective, thereby integrating
CSR and overall strategies. While considering international guidelines, such as ISO 26000 and the United Nations Global
Compact (UNGC), we will identify individual CSR issues, and supervisory departments and the CSR-related committees
will take primary charge as we work to resolve these issues on a Groupwide basis.
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Framework of CSR activities
Individual CSR issues
Departments in charge
Heads of CSR-related committees
Business
Environment
Society
Innovation driven by social needs
Business divisions, R&D division
Safety assurance for products and services
and protection of customers
Environmentally conscious business activities
Environmental conservation activities
Business divisions, quality department
Companywide quality assurance council
Business divisions, environment department
Group Environment Activity Committee
Respect for human rights
Personnel department, general affairs department
Labor standards compliance and respect
for individuality and diversity
Personnel department
Occupational health and safety
Personnel department, general affairs department
Community involvement and social contributions
(Corporate citizenship)
General affairs department
Central Human Rights Committee
Committee for Promoting Employment
of People with Disabilities
Occupational Safety and Health Committee
Central Disaster Prevention Committee
Management of information and intellectual property
Legal affairs department, information systems
department, intellectual property department
Information Security Management Committee
Competition and fair dealing
Prevention of corrupt practices
Legal affairs department, purchasing department
Corporate Ethics & Risk Management Committee
Legal affairs department
Governance
Proper discharge of tax responsibilities, accounting,
and investment activities
Finance department
Respect for local communities
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
Export Management Committee
Information Disclosure Executive Committee
Overall control of CSR
Formulation of CSR policy and guidelines,
gathering of related information
CSR department
74
Omron Corporation
Integrated Report 2013
75
Observance of International CSR Standards
and Guidelines
Omron considers such international standards and guidelines
as the Universal Declaration of Human Rights, the UNGC,
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
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. Omron will continue to uphold the UNGC’s 10
principles and sincerely implement them to meet the
expectations of stakeholders.
July 2013
Omron Corporation
Fumio Tateishi
Chairman of the BOD
Promotion of CSR throughout
the Value Chain
The Omron Group aims to create products that customers
Accordingly, we now make requests to suppliers with regard
to the following nine areas.
(1) Compliance with laws, regulations, and social norms
(2) Assurance of the best quality
(3) Best pricing for parts and materials
(4) Consideration of the global environment
(5) Request for non-use of confl ict minerals
(6) Stable supply of parts and materials
(7) Technical capabilities
(8) Sound business operation
(9) Thorough information management
Profi ts from the trading of minerals mined in the Democratic
Republic of Congo and its neighboring nations have been
used to fi nance armed rebel groups, allowing them to con-
tinue fi ghting and encouraging ongoing inhumane acts, such
as violence, plunder, abuse, human traffi cking, and child
labor. For this reason, such minerals, which include tin,
tantalum, tungsten, and gold, are called “confl ict minerals.”
Aiming to bring confl ict to an end by cutting off the source
of funds for armed groups, the U.S. Dodd-Frank Wall Street
Reform and Consumer Protection Act was signed into law on
July 21, 2010. Section 1502 of the Dodd-Frank Act has man-
dated that companies registered with the Securities and
Exchange Commission (SEC) must publicly disclose their use
of confl ict minerals.
By upholding the purpose of the Dodd-Frank Act and fulfi ll-
ing its corporate social responsibility, Omron is determined to
can trust while fulfi lling its social responsibilities in all of its
promote the procurement of minerals in a responsible man-
business activities. In order to accomplish this, it is not
ner. In fi scal 2012, we began conducting investigations of
enough for us to act alone; cooperation will be required from
suppliers to determine whether or not they use confl ict
our customers, suppliers, and other partners throughout all
minerals, and we also asked our suppliers to avoid the use of
areas of the value chain.
confl ict minerals. Should the use of any confl ict minerals in
As one facet of these efforts, Omron has developed a
Omron Group products be discovered, we will take corrective
self-analysis checklist based on the Electronics Industry
action as quickly as possible.
Code of Conduct (EICC), which is used primarily at produc-
tion sites in China and the Asia Pacifi c region. This checklist
is utilized as a means of evaluating the current progress of
CSR initiatives, uncovering issues, and formulating respons-
es to these issues.
Further, in fi scal 2012, we included a “request for non-use
of confl ict minerals” among our requests to suppliers.
Corporate Governance, Internal Controls,
and Compliance and Risk Management
Promoting Sound and Proper Corporate Management
Omron is committed to maintaining and exercising a proper corporate governance system while increasing manage-
ment transparency. To fi rmly 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
At Omron, senior management was quick to realize the
importance of corporate governance and has progressively
developed foundations for supporting good corporate gover-
nance. As such, Omron has worked to drive the spread of
such foundations in Japan and other countries by having
offi cials assuming principal posts in relevant external organi-
zations and through other means.
Omron’s basic policy is to fortify corporate governance
based on the belief that the most crucial factor in earning
stakeholders’ support is building an optimal management
structure and conducting fair business operations while
enhancing the mechanism (a super visory system) for such
verifi cation and realizing sustainable growth.
In line with this basic policy, Omron has adopted an execu-
tive offi cer system and clearly separates management over-
sight and business execution. Under an internal company
system, Omron is realizing faster decision making and ef-
fi cient business operations by delegating substantial authority
to the president of each internal company. Moreover, autono-
mous 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 responsibilities and practice corporate
value management based on shareholder value.
Management and Oversight Frameworks
Omron is a “Company with Audit & Supervisory Board.”
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
Audit & Supervisory Board.
Omron has set the number of members of its Board of
Directors at seven to encourage effi cient and meaningful
discussion. Since June 2013, the Company has begun in-
creasing the number of directors serving concurrently in
positions related to business execution. This revision will
effectively expedite decision making by directors and improve
the effi ciency of business execution. In addition, the
Company has appointed outside and independent directors,
thereby ensuring that directors concurrently fulfi lling busi-
ness execution roles do not represent a majority in the
Board of Directors. In this manner, we are simultaneously
improving corporate governance functionality.
To increase objectivity in management, the positions of
chairman 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 execution activities as a representative of the
Company’s stakeholders. Furthermore, Omron has estab-
lished the Personnel Advisory Committee, the CEO Selection
Advisory Committee, the Compensation Advisory Committee,
and the Corporate Governance Committee, all chaired by
outside directors. In this manner, the Company is working to
increase the transparency and objectivity of management’s
decision-making process.
By incorporating the best aspects of the Companies
with Committees system, we have created a type of hybrid
corporate governance regime that we feel is the most
appropriate for the Company.
Auditing Functions
The Audit & Supervisory Board, composed of four audit &
supervisory board members, 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 conditions of the corporate gover-
nance regime. The Internal Audit Division, which reports
directly to the president and CEO, periodically conducts
internal audits of accounting, administration, business risks,
and compliance in each headquarters division and in each
business company as part of its internal auditing function.
Moreover, the Internal Audit Division offers specifi c 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
audit & supervisory board members are outside members.
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.
Also, the Corporate Governance Committee takes steps to
confi rm the Outside Executive Eligibility Criteria do not pose
any problem with respect to determination criteria concerning
independence formulated by the appropriate securities ex-
change. After obtaining a resolution of the Board of Directors,
notifi cations are submitted with the appropriate securities
exchange for all outside executives as independent offi cers.
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Corporate Governance Initiatives
Fiscal 2012 Director and Audit & Supervisory Board Member Remuneration
(Millions of yen)
President
Chairman of the Board
of Directors/CEO
Separation of
management
oversight and
business execution
Advisory Board
Outside directors
Audit & Supervisory Board
members (Part-time)
1999
2003
2011
1987–
President Yoshio Tateishi
2003–
President Hisao Sakuta
2011–
President Yoshihito Yamada
President serves as Board of Directors’ Chairman and CEO
Chairman serves as Board of Directors’ Chairman / President serves as CEO
30 directors
1999~ Number of directors reduced to seven
1999~ Introduction of executive officer system
1999 Advisory Board
1998
One
member
1996 – Management Personnel
Advisory Committee
2001
One
member
2003~ Two members (seven directors)
1999~ Two members
2003~Three members (four auditors)
2011~Two members (four auditors)
2000 – Personnel Advisory Committee
Classifi cation
Directors
(Outside Directors)
Audit & Supervisory Board
Members (Part-time)
Total (Total for Outside
Directors and Audit &
Supervisory Board members)
Number of People
Basic Compensation
Bonus
Total Remuneration
7
(2)
4
(2)
11
(4)
360
(21)
82
(17)
442
(38)
144
(–)
–
(–)
144
(–)
504
(21)
82
(17)
586
(38)
* Director compensation consists of basic compensation (monthly salary), bonus, and stock-based compensation*1.
* Outside director compensation consists of basic compensation (monthly salary).
* Audit & supervisory board member compensation consists of basic compensation (monthly salary).
*1 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.
Advisory committees
2003 – Compensation Advisory Committee
Appointments of Directors and Audit & Supervisory Board Members
Corporate
philosophy
Corporate
motto
formulated
in 1959
Omron Principles
formulated in 1990
Revised in 1998
Corporate Governance Structure
Shareholders’ Meeting
2006 – CEO Selection Advisory Committee
2008 – Corporate Governance Committee
Revised in 2006
Audit & Supervisory Board
Board of Directors
Chairman: Chairman of the BOD
Audit & Supervisory Board 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 Audit Division
* This includes: Corporate Ethics & Risk Management Committee, Information Disclosure Executive Committee, Group Environment Activity Committee, etc.
Board of Directors (BOD)
The BOD oversees business activities
and decides important business matters,
such as management objectives and
strategies.
Personnel Advisory Committee
This committee, chaired by an outside
director, sets election standards for
directors and executive offi cers, selects
candidates, and evaluates current
executives.
Compensation Advisory Committee
This committee, chaired by an outside
director, determines the compensation
structure for directors and executive
offi cers, sets evaluation standards,
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.
Audit & Supervisory Board
This board oversees the corporate
governance system and its implementa-
tion and audits the day-to-day operations
of directors and other executives.
CEO Selection Advisory Committee
This committee, chaired by an outside
director, is dedicated to the nomination
of presidents and deliberates on the
selection of the new president for the
upcoming term and on preparing
contingency succession plans.
Corporate Governance Committee
This committee, chaired by an outside
director, discusses measures to con-
tinuously enhance corporate governance
and increase fairness and transparency
in management.
Director and Audit & Supervisory Board
Member Remuneration
To increase objectivity and transparency, the Compensation
Advisory Committee, chaired by an outside director, is con-
sulted on the compensation of directors. This committee
discusses the compensation of each individual and makes
recommendations.
After receiving these recommendations, the amount of
compensation for each director is determined by a resolution
of the Board of Directors, and the amount of compensation
for each audit & supervisory board member is determined by
discussions among the audit & supervisory board members
(resolution of the Board of Corporate Auditors).
The following amounts are within the scope of the
aggregate compensation amounts for all directors and all
audit & supervisory board members, as each has been set
by a resolution of the General Meeting of Shareholders.
Personnel Advisory
Committee
CEO Selection
Advisory Committee
Compensation
Advisory Committee
Corporate Governance
Committee
Position
Chairman of the BOD
Name
Fumio Tateishi
Representative Director and President and CEO
Yoshihito Yamada
Representative Director and Executive Vice President
Yoshinobu Morishita
Senior Managing Director
Senior Managing Director
Outside Director
Outside Director
Akio Sakumiya
Yoshinori Suzuki
Kazuhiko Toyama*
Eizo Kobayashi*
Audit & Supervisory Board Member (Full-time)
Masayuki Tsuda
Audit & Supervisory Board Member (Full-time)
Tokio Kawashima
Audit & Supervisory Board Member (Part-time)
Eisuke Nagatomo*
Audit & Supervisory Board Member (Part-time)
Yoshifumi Matsumoto*
Indicates Chairperson
* Independent Offi cer
Internal Controls
Maintaining and Operating an Internal
Control System 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 operation of its organization. This policy provides
the basis for the maintenance and operation of an internal
control system throughout the Omron Group to ensure the
controls are functioning effectively in each of the four objec-
tive areas of fi nancial report accuracy, legal compliance,
operating effi ciency, and asset safeguarding.
Omron maintains a monitoring system undertaken by
the Internal Audit Division after each division and subsidiary
conducts its own review of the maintenance and operation
of business processes in accordance with the Internal Con-
trol Reporting System (J-SOX) requirements of Japan’s
Financial Instruments and Exchange Act, promulgated in
June 2006. The reviews enable each division and subsidiary
to deepen their understanding of the internal controls associ-
ated with fi nancial reporting and thereby serve as a system
for promoting self-governing controls.
Two Types of Internal Audits to
Ensure Healthy and Effective
Organizational Operations
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 fi nancial report accuracy, legal compliance,
operating effi ciency, and asset safeguarding. The Manage-
ment Audit examines the solutions and improvement mea-
sures implemented for specifi c management issues. In the
event the results of these audits include items recommend-
ed for improvement, the Company supports measures to
carry out the improvements.
In addition, the Omron Group has established the Audit &
Supervisory Board Offi ce and placed full-time auditors in each
of its four regions of global business—Americas, Europe,
Greater China, and Asia Pacifi c—to implement internal audits
based on local practices and legal systems at its business
sites worldwide.
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Compliance and Risk Management
Strengthening Global Response Systems
Aiming to promote legal and regulatory compliance across
the Group, Omron set up the Group Corporate Ethical Con-
duct Promotion Committee. In addition, we have installed
stringent legal affairs and compliance functions into regional
head offi ces overseas to ensure that we can practice effec-
tive compliance and risk management in each region, wheth-
er overseas or in Japan.
In recent years, economic and business globalization has
been accelerating, bringing about changes in legislation and
other elements of the external environment. At the same
time, Omron is progressively advancing its operations on a
global scale, which includes expansion into emerging coun-
tries, and this expansion has resulted in exposure to risks
that could not be previously predicted. In order to respond
to such changes in external and internal conditions, we
have positioned compliance as a matter to be considered
alongside risks, and we are conducting integrated global
risk management initiatives accordingly. Commenced in
fi scal 2011, these initiatives are geared toward addressing
risks faced by the Group, such as natural disaster risks, in
an integrated manner.
In fi scal 2012, Omron revised the Group Corporate Ethical
Conduct Promotion Committee, transforming it into the
Corporate Ethics & Risk Management Committee to enable
better responses to compliance matters and other risks on a
global scale. The membership of this committee consists of
compliance and risk management representatives from the
corporate headquarters and each business company as well
as from regional head offi ces. In addition, we have appointed
risk managers at all Group companies in Japan and abroad
and are taking other steps to create systems that allow for
quick responses to risk-related matters on a global basis.
Further, we have established the Basic Principles of Integreat-
ed Global Risk Management. These rules are applicable
throughout the Omron Group, both in Japan and overseas,
and serve as a framework for implementing an integrated
global risk management plan-do-check-act (PDCA) cycle.
In accordance with the Basic Principles of Integreated
Global Risk Management, we identify major risks faced by
the Omron Group by collecting and analyzing risk-related
information. The Executive Council then guides the entire
company in implementing countermeasures to prevent the
realization of such risks. In response to crises, we have
established the Global Crisis Management Rules, which
defi ne a “crisis” as any event that has or may have a signifi -
cant negative impact on the continuation 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 establishment
of an Emergency Response Headquarters.
In fi scal 2013, regional head offi ces will play a central role
in practicing integrated global risk management in order to
raise overall responsiveness to change, which will be es-
sential to ensuring Omron becomes a stronger company.
Risk Management
Omron conducts global risk analyses each year, based on
which the Company identifi es major risks and then responds
to these risks in a prioritized manner. The following is an
explanation of such risks and the measures being imple-
mented in response to these risks.
• Business continuity risks
The Company has established a business continuity plan
(BCP) to minimize the impacts of emergency situations on
operations. This plan contains provisions deemed necessary
to facilitate the safety as well as the continuity and early
restoration of business operations in the event of a large-
scale earthquake, such as a quake in the Nankai Trough or
directly under the Tokyo metropolitan area, or other natural
disasters; fi res; a worldwide outbreak of a new form of
infl uenza virus; and other emergency situations. To this end,
the plan defi nes the conditions under which it will be insti-
tuted, describes methods of deciding alternative bases and
transferring functions, and sets out what procedures are
core to the Company’s operations. Related operating manu-
als have also been established.
We are continually improving our BCP by confi rming
its effectiveness and conducting BCP-related evaluations
and drills.
• Risk of violation of laws in countries of operation
Omron develops its operations on a global basis, and it is
therefore necessary to take precautions against violating
laws related to the prevention of bribery of public offi cials,
personal information protection, antitrust measures, and
security trade control. For this reason, the Company con-
ducts employee education and training programs to ensure
that employees are able to act in compliance with such laws.
• Information leakage risk (information security)
Omron has the basic policy of fulfi lling its responsibility
toward customers, society, investors, and other stakehold-
ers through appropriate security management. In accor-
dance with this policy, we conduct integrated management
of confi dential and personal information. Periodically, we also
conduct employee training, checks of information manage-
ment conditions at worksites, investigations of information
management by subcontractors, and information security
monitoring. Further, information security measures are
constantly revised in accordance with the fi ndings of these
activities and changes in the external environment.
Overseas, we implement technological information leak-
age prevention measures and monitor information manage-
ment at our various overseas production and R&D bases,
implementing improvement measures as necessary. In
addition, subsidiaries have formulated internal information
management regulations in accordance with globally
accepted rules and standards.
Recently, we have strengthened technological information
security in light of the possibility of a cyber-attack against our
Whistle-Blower Hotline
Establishing operational regulations with clearly
stated provisions for the protection of whistle-blowers
In 2003, a whistle-blower hotline was established for Omron
Group executives, full-time employees, and temporary staff
as well as their families. Staff of the Legal Affairs Depart-
ment handles hotline information within the Company, while
an external attorney offi ce serves to accept information. In
operating the whistle-blower hotline, we have established
internal regulations ensuring 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.
Overseas, a similar whistle-blower hotline has been estab-
lished for operations in Americas, which was the fi rst area to
establish such a hotline outside of Japan.
In fi scal 2012, operations in Europe were equipped with a
whistle-blower hotline, joining the ranks of Japan and the
Americas, and such hotlines were installed for operations in
the Asia Pacifi c region at the end of the fi scal year. During
fi scal 2012, a total of 20 hotline reports and consultations
were made in Japan, six were made in the Americas, and
one was made through the new hotline in Europe.
In fi scal 2013, we will install a whistle-blower hotline in the
remaining Great China area. Further, in Japan and overseas,
we will continue to promote employee awareness as to the
hotlines’ existence and analyze case studies to help enhance
the skills of advisors. In these ways, Omron will improve its
response to whistle-blowing.
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information systems. Going forward, we will continue to
improve the level of information security management in
Japan and around the world.
• Risks associated with transferring employees
across borders
As Omron accelerates the global expansion of its operations,
it is seeing a rise in the number of opportunities for person-
nel to be exchanged between companies and for employees
to work in cooperation with people of various different na-
tionalities. This in turn has increased the possibility that labor
issues may appear due to differences in culture, customs, or
treatment.
To prevent such issues from occurring, we are enhancing
risk communication efforts and bolstering our ability to
manage people with different cultural backgrounds.
• Purchasing and procurement risks
Omron conducts procurement by selecting reliable suppliers
and asking that they cooperate with certain requests. These
requests include those related to compliance and prohibition
of child labor, forced labor, and bribery.
From the perspective of socially responsible procurement,
Omron endorses the efforts to address confl ict minerals
issues that were instigated in the United States. Accordingly,
we conduct investigations of major suppliers to determine
whether or not they use confl ict minerals and are otherwise
addressing this issue in our mineral procurement efforts. We
are committed to conducting appropriate purchasing and
procurement activities, and, should the use of any confl ict
minerals in Omron Group products be discovered, we will
take corrective action as quickly as possible.
• Environmental management risks
The Group works to comply with a wide variety of environ-
mental laws and regulations, including those related to
climate change, air and water pollution, hazardous sub-
stances, waste, product recycling, and the contamination of
soil and groundwater.
In fi scal 2013, we will implement measures to further
improve our responsiveness to environmental laws and regu-
lations, with a particular emphasis placed on our operating
sites and factories. These measures will include training
related to such laws and regulations, compliance-related
audits at production sites in China and the Asia Pacifi c
region, and education programs on auditing methods for
ensuring legal compliance.
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81
Directors, Audit & Supervisory Board Members,
and Executive Offi cers
As of June 21, 2013
Directors
Senior Managing Director
Akio Sakumiya
Outside Director
Eizo Kobayashi
April 1975
June 2003
Joined Omron
Executive Offi cer and President
and CEO of OMRON Ichinomiya
Co., Ltd. (now OMRON
Amusement Co., Ltd.)
March 2009 President of Electronic and
Mechanical Components
Company
June 2010 Managing Executive Offi cer
Senior Managing Director
June 2011
(to present)
Senior Managing Director
and CFO
Yoshinori Suzuki
April 1975
June 2003
Joined Omron
Executive Offi cer and Senior
General Manager of Corporate
Strategy Planning HQ
June 2006 Managing Executive Offi cer
March 2007 President of Automotive
May 2010
April 2013
June 2013
Electronic Components Company
President and CEO of OMRON
Automotive Electronics Co., Ltd.
Senior Managing Executive
Offi cer and CFO
Senior Managing Director
and CFO (to present)
Back row,
from left:
Masayuki Tsuda
Audit & Supervisory
Board Member
(Full-time)
Eisuke Nagatomo
Audit & Supervisory
Board Member
(Independent)
Kazuhiko Toyama
Outside Director
Eizo Kobayashi
Outside Director
Yoshifumi Matsumoto
Audit & Supervisory
Board Member
(Independent)
Tokio Kawashima
Audit & Supervisory
Board Member
(Full-time)
Front row,
from left:
Akio Sakumiya
Senior Managing Director
Fumio Tateishi
Chairman
Yoshihito Yamada
President and CEO
Yoshinobu Morishita
Executive Vice President
Yoshinori Suzuki
Senior Managing Director
and CFO
Directors
Chairman
Fumio Tateishi
President and CEO
Yoshihito Yamada
Executive Vice President
Yoshinobu Morishita
Audit & Supervisory Board
Member (Independent)
Eisuke Nagatomo
Joined Tokyo Stock Exchange
April 1971
November 2001 Executive
June 2003 Managing Director
June 2007 Advisor
October 2007 Representative Director of EN
Associates Co., Ltd. (to present)
June 2008 Assumed the position of Audit
& Supervisory Board Member
(Independent) of Omron
April 2004
Joined ITOCHU Corporation
Executive Offi cer
April 1972
June 2000
April 2002 Managing Executive Offi cer
Representative Director and
June 2003
Managing Director
Representative Director and
Senior Managing Director
President and CEO
Chairman and
Representative Director
Chairman (to present)
June 2004
April 2010
June 2011
June 2013 Director of Omron (to present)
Audit & Supervisory
Board Members
Audit & Supervisory Board
Member (Full-time)
Masayuki Tsuda
April 1977
June 2008
September 2008 Chairman and President of
Joined Omron
Executive Offi cer
OMRON ELECTRONIC COMPO-
NENTS (SHENZHEN) LTD.
March 2013 Senior General Manager of
Global Internal Auditing HQ
June 2013 Assumed the position of Audit
& Supervisory Board Member
(Full-time) of Omron (to present)
Audit & Supervisory Board
Member (Independent)
Yoshifumi Matsumoto
April 1989
Registered as attorney with
Osaka Bar Association;
Joined Miyake Law Offi ce
(now Miyake & Partners)
January 1996 Partner (to present)
June 1997
Registered as patent attorney
with Japan Patent Attorneys
Association
June 2013 Assumed the position of Audit
& Supervisory Board Member
(Independent) of Omron
(to present)
Honorary Chairman
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Joined Omron
Aug. 1975
June 1997 Director
June 1999
June 2001
June 2003
June 2008
June 2013
Retired as Director,
Managing Executive Offi cer
Senior General Manager of
Corporate Strategy Planning HQ
Executive Offi cer and Executive
Vice President, and President
of Industrial Automation
Company
Executive Vice Chairman
Chairman of the Board
(to present)
April 1984
June 2008
Joined Omron
Executive Offi cer and President
and CEO of OMRON
HEALTHCARE Co., Ltd.
March 2010 Senior General Manager of
Corporate Strategy Planning HQ
June 2010 Managing Executive Offi cer
June 2011
President and CEO (to present)
April 1972
June 2003
Joined Omron
Executive Offi cer and General
Manager of Sensing Device
Department, Industrial
Automation Company
June 2008
June 2006 Managing Executive Offi cer
March 2008 President of Industrial
Automation Company
Senior Managing
Executive Offi cer
Executive Vice President
Representative Director
and Executive Vice President
(to present)
President of Industrial
Automation Company
(to present)
June 2011
June 2012
July 2012
Outside Director
Kazuhiko Toyama
April 1985
April 1986
Joined Boston Consulting
Group, Inc.
Established Corporate
Direction Co., Ltd.
March 1993 Director
April 2000 Managing Director
President and CEO
April 2001
Senior President and COO
April 2003
of Industrial Revitalization
Corporation of Japan (IRCJ)
President and CEO of Industrial
Growth Platform, Inc.
(to present)
April 2007
June 2007 Director of Omron (to present)
Audit & Supervisory Board
Member (Full-time)
Tokio Kawashima
April 1982
Joined Mitsubishi Bank Ltd.
(now The Bank of Tokyo-
Mitsubishi UFJ, Ltd.)
September 2008 Regional Head for Germany
April 2011
and General Manager,
Dusseldorf
Retired from The Bank of
Tokyo-Mitsubishi UFJ, Ltd.
April 2011
Joined Omron
June 2011 Assumed the position of Audit
& Supervisory Board Member
(Full-time) of Omron
Honorary Chairman
Yoshio Tateishi
Director
August 1963 Joined Omron
May 1973
June 1976 Managing Director
June 1983
June 1987
June 2003
Senior Managing Director
President and CEO
Representative Director
and Chairman of the Board
Chairman of Kyoto Chamber
of Commerce and Industry
(to present)
May 2007
June 2011 Honorary Chairman
(to present)
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Managing Officers
Masaki Arao
Senior General Manager,
Technology & Intellectual Property HQ
Katsuhiro Wada
President and CEO,
OMRON Automotive Electronics Co., Ltd.
Kiichiro Kondo
President and CEO,
OMRON SOCIAL SOLUTIONS Co., Ltd.
Executive Officers
Kiichiro Miyata
President and CEO,
OMRON HEALTHCARE Co., Ltd.
Shigeki Fujimoto
Business Development Executive
Koichi Tada
Company President,
Electronic and Mechanical Components
Company
Yutaka Miyanaga
Senior General Manager,
Global Strategy HQ
Taiji Sogo
Senior General Manager,
Global Internal Auditing HQ
Koji Doi
Chairman and President,
OMRON (CHINA) CO., LTD.
(China Resident Offi cer)
Kiyoshi Yoshikawa
Senior General Manager,
Global Manufacturing Innovation HQ
Shizuto Yukumoto
Senior General Manager,
Environmental Solutions Business HQ
Shinya Yamasaki
Senior General Manager,
Automation Systems Division HQ
Industrial Automation Company
Satoshi Ando
Senior General Manager,
Investor Relations HQ
Nigel Blakeway
Chairman, President and CEO, OMRON
MANAGEMENT CENTER OF AMERICA, INC.
(U.S. Resident Offi cer)
Chairman and President,
OMRON MANAGEMENT CENTER OF EUROPE
Goshi Oba
Chairman and President,
OMRON INDUSTRIAL AUTOMATION
(CHINA) Co., Ltd.
Industrial Automation Company
(China Resident Offi cer)
Takayoshi Oue
Senior General Manager,
Global Finance and Accounting HQ
Isao Ogino
Director and Senior Managing Offi cer
Senior General Manager,
Management Strategy HQ
OMRON HEALTHCARE Co., Ltd.
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President and CEO,
OMRON SWITCH & DEVICES Corporation
Masanori Takahashi
President and CEO,
OMRON RELAY & DEVICES Corporation
Koji Nitto
Senior General Manager,
Global Resource Management HQ and
Senior General Manager,
Global SCM and IT Innovation HQ
Takashi Ikezoe
Senior General Manager,
Industrial Components Division HQ
Industrial Automation Company
Chairman, OMRON (SHANGHAI) CO., LTD.
Toshio Hosoi
Managing Director,
OMRON SOCIAL SOLUTIONS Co., Ltd.
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Integrated Report 2013
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Financial Section (U.S. GAAP)
87 Financial Highlights
88 Six-Year Summary
89 Fiscal 2012 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
Financial Highlights
Omron Corporation and Subsidiaries
Years ended March 31, 2013, 2012 and 2011
For the year:
Net sales
Income from continuing operations before income taxes
and equity in loss (earnings) of affi liates
Net income
Net income attributable to shareholders
Per share data (yen and U.S. dollars):
Net income attributable to shareholders
Basic
Diluted
Cash dividends (Note 1)
Millions of yen
(except per share data)
Thousands of
U.S. dollars (Note 2)
(except per share
data)
FY2010
FY2011
FY2012
FY2012
¥617,825
¥619,461
¥650,461
$6,919,798
41,693
27,016
26,782
33,547
16,352
16,389
41,237
30,117
30,203
438,691
320,394
321,309
¥ 121.66
¥ 74.46
¥ 137.20
$ 1.46
121.66
30.0
74.46
28.0
137.20
37.0
1.46
0.39
Capital expenditures (cash basis)
Research and development expenses
¥ 21,647
¥ 27,502
¥ 30,383
$ 323,223
41,300
42,089
43,488
462,638
At year end:
Total assets
Total shareholders’ equity
¥562,790
¥537,323
¥573,637
$6,102,521
312,753
320,840
366,962
3,903,851
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, 2013, of ¥94 = $1.
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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, net
Income (loss) from continuing operations
before income taxes and equity in loss
(earnings) of affiliates
Income taxes
Equity in loss (earnings) of affi liates
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 / Shareholders‘ equity ratio (times)
Interest coverage ratio (times)
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
Millions of yen (except per share data)
¥339,161
¥271,204
¥203,917
¥271,894
¥270,835
¥262,983
100,668
76,494
70,717
81,216
83,002
84,107
107,521
82,109
75,163
84,259
85,027
97,643
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
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)
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
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
57,200
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
68,754
71,520
59,240
6,214
650,461
408,954
152,676
43,488
4,106
609,224
41,237
14,096
(2,976)
30,117
—
30,117
(86)
30,203
¥ 172.5
172.4
¥ (132.2)
—
¥ 16.0
16.0
¥ 121.7
121.7
¥ 74.5
74.5
¥ 137.2
137.2
185.9
185.8
42.0
(132.2)
—
25.0
16.0
16.0
17.0
121.7
121.7
30.0
74.5
74.5
28.0
137.2
137.2
37.0
¥ 37,848
617,367
368,502
¥ 37,477
538,280
298,411
¥ 20,792
532,254
306,327
¥ 21,647
562,790
312,753
¥ 27,502
537,323
320,840
¥ 30,383
573,637
366,962
38.4
8.4
5.6
10.3
11.3
5.0
11.0
1.2
0.68
44.34
34.8
(6.2)
(4.7)
(6.8)
(8.7)
4.5
—
1.1
0.80
6.01
35.1
1.9
0.7
1.9
1.2
4.2
135.8
1.0
0.73
22.15
37.5
6.7
4.3
7.6
8.7
4.7
19.2
1.1
0.80
101.96
36.8
5.4
2.6
6.1
5.2
4.4
23.9
1.1
0.67
153.01
37.1
6.3
4.6
7.4
8.8
4.5
16.9
1.2
0.56
153.01
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 Financial Accounting Standards Board (FASB) issued Accounting Standards Codifi cation (ASC) No. 250, “Presentation of Financial
Statements,” the fi gures of the consolidated statements of operations related to the discontinued operations have been separately reported from the
ongoing operating results.
3. Starting with fi scal 2010, the PV inverter business in the “Industrial Automation Business” was transferred to “Other.” The fi gures of the segment informa-
tion for the prior years have been restated to conform with the current year presentation.
4. From fi scal 2009, the Companies adopted the ASC No. 280, “Segment Reporting. The fi gures of the segment information for the prior years have been
restated to conform with the current year presentation.
Fiscal 2012 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).
Market Environment
1. Macroeconomic Environment
In fiscal 2012, the Japanese economy benefited from the
gradual alleviation of the residual impacts of the Great East
Japan Earthquake. However, recession in the semiconductor
industry continued, and overall conditions remained relatively
unchanged from fiscal 2011. While real GDP experienced
negative growth in the second quarter, the rapid rise in
Japanese stock prices and depreciation of the yen seen in the
latter half of the fiscal year helped improve consumer
confidence. Personal consumption drove GDP at the end of
the fiscal year, and year-on-year growth of 0.9% was recorded
in the fourth quarter.
Overseas, the financial crisis in Europe persisted and
economic growth decelerated in China, resulting in an
operating environment that was opaque on the whole.
However, signs of economic recovery were seen in ASEAN
countries and there was a clear recovery trend centered on
the United States that began in the fourth quarter.
As a result of these factors, Japan’s real GDP grew 1.2%
over the full fiscal year and 2.0% for the calendar year.
Growth Rates of Real GDP for Each Country / Region (Calendar-Year Basis)
2011
2012
2013 Estimates
Japan
–0.7
2.0
1.6
0.2*
1.2*
U.S.
1.8
2.2
1.9
EU
1.4
–0.6
–0.3
China
India
Brazil
Total
9.3
7.8
8.0
7.7
7.8
8.0
2.7
0.9
3.0
4.0
3.2
3.3
Source: IMF, “World Economic Outlook,” April 2013
Note: Fiscal-year basis for fi gures marked with an asterisk (*)
Japanese Macroeconomic Environment
Growth Rate of Real Private
Capital Investment
(%)
8
6
4
2
0
–2
–4
–6
–8
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2011
2012
(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
2011
2012
(FY)
Orders [left axis]
Change from the previous quarter [right axis]
Note: Seasonally adjusted
Source: Cabinet Office, Government of Japan
(%)
60
40
20
0
–20
2. The Omron Group Market Environment
In regard to markets related to the Omron Group, white goods,
other consumer electronics, electronic components, and
healthcare devices saw robust demand throughout the entire
fiscal year, while demand for semiconductors and machine
tools was generally sluggish. Concerning automotive electronic
components, capital investment and component demand was
brisk outside Europe. However, the end of the government
subsidies for the purchase of eco-friendly automobiles in Japan
resulted in a decline in demand during the second half of the
fiscal year.
Further, we were freed from the heavy impacts of the strong
yen, which placed pressure on earnings throughout fiscal 2011,
as the yen began to depreciate in the third quarter. Similarly, the
prices of raw materials, which had also placed pressure on
earnings previously, remained low throughout the first half of
the year, but then rose once again during the second half of the
year in conjunction with the depreciation of the yen. The
average exchange rates for fiscal 2012 were ¥83.2 to the U.S.
dollar, down ¥3.9 from the previous fiscal year, and ¥107.6 to
the euro, a ¥2.7 year-on-year rise. In raw material prices, the
average price per kilogram of silver was ¥83,042, down ¥9,337
year on year, and copper was ¥686 per kilogram, down ¥52.
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(Seasonally adjusted indices, 2005 average =100)
Silver and Copper Prices
Exchange Rates
300
250
200
150
100
50
2009
2010
2011
2012
(FY)
Production
Shipments
Inventory
Source: Ministry of Economy, Trade and Industry
(Yen/kg)
120,000
100,000
80,000
60,000
40,000
20,000
0
(Yen/kg)
1,200
1,000
800
600
400
200
0
(FY)
(Yen)
140
130
120
110
100
90
80
70
2009
2010
2011
2012
2009
2010
2011
2012
(FY)
Silver [left axis]
Copper [right axis]
US$
EUR
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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 profi t minus selling, general and administrative (SG&A) expenses and research and
development (R&D) expenses.
In this market environment, the Omron Group’s consolidated
net sales for fi scal 2012 rose 5.0% year on year, to ¥650.5
billion. This increase was due to strong sales in the Automo-
tive Electronic Components Business (AEC), the Social
Systems, Solutions and Service Business (SSB), and the
Healthcare Business (HCB). Due to higher sales as well as the
benefi ts of improved effi ciency with regard to fi xed costs and
reduced variable expenses in all segments, operating income
was up 13.0%, to ¥45.3 billion; income before income taxes
rose 22.9%, to ¥41.2 billion; and net income attributable to
shareholders soared 84.3%, to ¥30.2 billion. In this manner,
all income fi gures showed substantial increases.
Total assets rose 6.8% from the end of the previous fi scal
year, to ¥573.6 billion, largely due to increased notes and
accounts receivable—trade and cash and cash equivalents.
Total shareholders’ equity was up 14.4%, to ¥367.0 billion, as
a result of foreign currency translation adjustments and
treasury stock cancelation. This led to a rise in the share-
holders’ equity ratio, to 64.0%, from 59.7% at the end of the
previous fi scal year.
Return on equity (ROE) stood at 8.8%, and return on
invested capital (ROIC) was 8.6%, both percentages up from
5.2% and 6.9%, respectively, in the previous fi scal year.
Net Sales and Income (Loss) before
Income Taxes
Net Income (Loss) Attributable to
Shareholders and ROE
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
08
09
10
11
12
(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
08
09
10
11
12
(FY)
Net income (loss) attributable to shareholders
[left axis]
ROE [right axis]
(%)
20
10
0
–10
–20
(Billions of yen)
400
300
200
100
0
08
09
10
11
12
(FY)
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 fi scal 2012, the Group implemented measures targeting
the reinforcement of the Industrial Automation (IA) business,
sales expansion in emerging markets centered on Asia, and
the expansion of sales in the environmental solutions
business through the development of a strong business
model. These measures proved to be successful, and net
sales were up ¥31.0 billion year on year, or 5.0%, to ¥650.5
billion, as a result.
By region, sales in Europe declined 3.7% year on year,
primarily as a result of the persisting fi nancial crisis. Regard-
less, sales were up 6.8% in Japan, 7.5% in the Americas,
5.2% in the Greater China region, and 4.7% in the Asia Pacifi c
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
+11.9
Forex, raw
material costs
+1.2
–0.9
Fixed
manufacturing
costs increase
–5.8
SG&A
increase
Gross profit up
¥11.0 billion
(excluding forex
and raw materials)
Operating income increase
¥5.2 billion
–1.2
R&D increase
(including
strategic
investment
increase)
45.3
2012
Actual
(FY)
40.1
2011
Actual
Cost of Sales and SG&A Expenses
Cost of sales increased 4.4% year on year following higher
net sales, and the cost of sales ratio declined 0.3 percentage
point, to 62.9%. In fi scal 2012, the average price per kilogram
of silver was ¥83,042, lower than the level of ¥92,379 seen in
the previous fi scal year. The average price per kilogram of
copper likewise declined, to ¥686 from ¥738 in fi scal 2011.
However, the prices of these raw materials began rising once
again in conjunction with yen depreciation in the latter half of
fi scal 2012, and it will be necessary to carefully monitor these
trends going forward.
SG&A expenses increased ¥7.0 billion, or 4.8%, from the
previous fi scal year, but the SG&A-to-sales ratio declined 0.1
percentage point, to 23.4%. At the same time, R&D expenses
were up ¥1.4 billion, or 3.3%, but the R&D-to-sales ratio was
relatively unchanged from the previous fi scal year’s 6.8%,
at 6.7%.
Other Expenses
Other expenses decreased ¥2.5 billion year on year, to ¥4.1
billion, due to improvement in foreign exchange loss, net.
Income before Income Taxes, Net Income Attributable
to Shareholders, and Profi t Distribution
As a result of the above, income before income taxes and
equity in loss (earnings) of affiliates amounted to ¥41.2 billion,
up ¥7.7 billion from the ¥33.5 billion recorded in the previous
fiscal year. Likewise, net income attributable to shareholders
was ¥30.2 billion, up ¥13.8 billion from the previous year’s
¥16.4 billion. Basic net income attributable to shareholders per
share rose from ¥74.5 in fiscal 2011 to ¥137.2 in fiscal 2012.
The Company’s basic policy for dividend payments is to
secure sufficient internal capital resources for future growth
while maintaining a minimum 20% dividend payout ratio,
targeting a 2% dividend on equity (DOE) ratio, and returning
profits to shareholders to the greatest extent possible after
these conditions are met. Beginning in fiscal 2013, the
Company will raise the defined minimum for the dividend
payout ratio to 25% and will issue dividends in accordance
with that policy going forward.
For fiscal 2012, the Company issued a commemorative
dividend of ¥5.0 per share to show its appreciation for its
shareholders on the 80th anniversary of the founding of
Omron on May 10, 2013. Combined with the regular dividend
payment, this made for a total annual cash dividend of ¥37.0
per share, ¥9.0 per share higher than in the previous fiscal
year. The consolidated dividend payout ratio was 27.0%, and
the DOE ratio was 2.4% in fiscal 2012.
Dividends per Share
(Yen)
50
40
30
20
10
0
08
09
10
11
12
(FY)
Costs, Expenses, and Income as Percentages of Net Sales
Net sales
Cost of sales
Gross profi t
Selling, general and administrative expenses
Research and development expenses
Other expenses, net
Income before income taxes and equity in loss (earnings) of affi liates
Income taxes
Net income
Segment Information
FY2009
100.0%
FY2010
100.0%
FY2011
100.0%
FY2012
100.0%
64.9
35.1
25.4
7.2
0.6
1.9
0.7
0.7
62.5
37.5
23.0
6.7
1.1
6.7
2.3
4.3
63.2
36.8
23.5
6.8
1.1
5.4
2.9
2.6
62.9
37.1
23.4
6.7
0.7
6.3
2.2
4.6
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
comparison with other companies, operating income represents gross profi t 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.
1. Review of Operations by Business Segment
Industrial Automation Business (IAB)
IAB net sales decreased 2.9% year on year, to ¥263.0 billion.
Operating income dropped 11.6%, to ¥29.5 billion, as a result
of the lower sales, which offset the benefi ts of efforts to
improve effi ciency with regard to fi xed costs. In Japan, sales
were lower than seen in the previous fi scal year, when we
recorded temporary sales increases following the Great East
Japan Earthquake and fl oods in Thailand. Further, capital invest-
ment demand in the automobile industry was unchanged from
the previous fi scal year, while demand was sluggish in the
electronic component industry and particularly low in the
semiconductor industry. Overseas, demand in the automobile
industry of the Americas was solid as was overall demand in
China and ASEAN countries. Regardless, the impacts of the
economic recession in Europe and limited capital investment
in South Korea’s semiconductor industry were heavy.
Electronic and Mechanical Components Business (EMC)
EMC net sales increased 1.3% year on year, to ¥84.1 billion.
However, operating income declined 13.8%, to ¥6.2 billion, due
to the impacts of the euro depreciation that continued
throughout the fi scal year and a decrease in internal sales. In
Japan, during the fi rst half of the year under review, demand in
the automobile industry recovered from the slump seen
following the Great East Japan Earthquake. In the second half
of the year, we saw recovery of demand in the infrastructure,
offi ce equipment, and mobile device industries. Overseas, the
impacts of the recession in Europe persisted, but these impacts
were offset by brisk demand for automobile-related products in
the Americas and environment-related products in China.
Automotive Electronic Components Business (AEC)
AEC net sales increased 14.8% year on year, to ¥97.6 billion.
Operating income grew 86.1%, to ¥5.0 billion, as a result of
the rise in sales as well as the rebound from the previous
fi scal year’s period of temporary production adjustment. In
Japan, demand for the Company’s products was strong
throughout the entire fi scal year. The number of new automo-
biles sold in Japan rose for the fi rst time in two years. This
was because demand benefi ted from government measures
to promote eco-friendly automobiles during the fi rst half of
the year and the popularity of small vehicles in the second
half of the year. Overseas, sales suffered from the impacts
of the economic recession in Europe and the sudden drop
in sales of Japanese automobiles in China. However, sales
in emerging countries and other regions were for the most
part favorable.
Social Systems, Solutions and Service Business (SSB)
SSB net sales increased 20.2% year on year, to ¥68.8 billion.
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infrastructure business resulted
Higher sales and profi t structure reforms centered on the
railway
in a 2,874.5%
increase in operating income, to ¥2.9 billion. In the railway
infrastructure business, replacement demand for railway
infrastructure equipment recovered from the slump that
followed the Great East Japan Earthquake, and performance
of safety and security solutions centered on remote
monitoring systems was particularly strong. Further, sales
were brisk for the traffi c control and road control systems
business’s safety and security solutions; the environmental
solutions business’s solar power system services, electricity
storage systems, and monitoring and control systems; and
the related maintenance business’s solar power-related
products. In this manner, all major business areas saw favor-
able sales.
Healthcare Business (HCB)
HCB net sales stepped up 14.5% year on year, to ¥71.5 billion,
and operating income was up 51.0%, to ¥4.4 billion, following
strong sales in Japan and overseas. In the home-use health-
care device fi eld in Japan, sales of mainstay blood pressure
monitors and thermometers recovered, and we worked to
stimulate new demand through the introduction of new
products. As a result, overall performance in this fi eld was
strong. In equipment for use in medical institutions, there
was a gradual recovery trend in investment among major
hospitals, and performance proved favorable. Overseas,
demand for healthcare devices continued to increase in
Russia and China as well as in emerging countries in the Asia
Pacifi c and other regions. Operations also benefi ted from a
business alliance related to the sale of electric toothbrushes
in Europe and the infl uence of yen depreciation in the second
half of the fi scal year. All these factors contributed to earnings
in overseas operations.
Other Businesses
The Other segment’s net sales increased 10.7% year on year,
to ¥59.2 billion. Further, operating income of ¥2.5 billion was
recorded, compared with an operating loss of ¥3.6 billion in
the previous fi scal year. This improvement can be attributed to
higher sales in the Environmental Solutions Business as well
as to the benefi ts of profi t structure reforms instituted in all
businesses. In July 2012, a feed-in tariff scheme for renew-
able energy was launched in Japan, sparking interest for
renewable energy throughout the country and contributing to
signifi cant increases in sales of mainstay PV inverters in the
Environmental Solutions Business. In the Micro Devices
Business, demand for microphones and custom integrated
circuits for industrial use was up, driving strong performance.
Likewise, performance was also impressive in the Backlight
Business due to increased demand from the smartphone
market. However, the Electronic Systems & Equipments
Business suffered from sluggish performance due to reduced
demand from major customers for industrial-use computers,
for
contract development and manufacturing services
electronic devices, and other offerings. This offset the solid
demand for uninterruptible power supply units that resulted
from electricity shortages in Japan.
Growth in Net Sales by Business Segment
Composition of Net Sales by Business Segment
IAB
EMC
AEC
SSB
HCB
Other
FY2010
33.3%
FY2011
(0.4)%
FY2012
(2.9)%
14.8
12.1
10.1
(4.3)
13.9
2.2
0.9
(10.4)
3.0
7.8
1.3
14.8
20.2
14.5
10.7
IAB
EMC
AEC
SSB
HCB
Other
FY2010
44.0%
FY2011
43.7%
FY2012
40.4%
13.2
13.6
10.3
9.8
8.0
13.4
13.7
9.2
10.1
8.6
12.9
15.0
10.6
11.0
9.1
Note: The composition of net sales is based on the classifi cations reported
in the Six-Year Summary (page 88).
2. Review of Operations by Region
Japan
In Japan, capital investment demand for electronic compo-
nents was sluggish and particularly poor for semiconductors.
However, demand recovery was seen in a wide range of other
fi elds, including those for automotive products and medical
equipment. Also, the change in the mindset of the populous of
Japan following the Great East Japan Earthquake drove sales
of products related to safety and security and to the environ-
ment to impressive levels. As a result, sales in EMC, AEC, SSB,
HCB, and the Other segment all showed year-on-year increases.
Accordingly, net sales (including direct exports) in Japan rose
6.8% year on year, to ¥328.5 billion, and operating income was
up 45.2%, to ¥31.5 billion.
Americas
In the Americas, there were signs of improvement in employ-
ment conditions and the housing market, resulting in a gradual
recovery in the economy. In particular, conditions in the
automotive markets were brisk, supporting sales in IAB and
EMC. As a result, net sales in the Americas rose 7.5% year on
year, to ¥80.4 billion. However, operating income was down
62.4%, to ¥1.1 billion, due to the worsening of product mixes.
Europe
In Europe, while the economy showed signs of bottoming out,
certain countries continued to suffer from the impacts of the
sovereign debt crisis, and overall economic conditions
Sales Breakdown by Region
(%)
100
80
60
40
20
0
8.1%
15.7%
13.7%
12.0%
8.5%
16.3%
13.5%
12.1%
8.4%
16.3%
12.4%
12.4%
50.5%
49.6%
50.5%
10
11
12
(FY)
Asia Pacific
Greater China
Europe
Americas
Japan*
* Includes direct exports
remained poor. During the second half of fi scal 2012, amid the
depreciation of the yen, we undertook new business ventures,
such as an alliance in HCB related to the sale of electric tooth-
brushes. Regardless though, earnings in IAB and EMC were
low. As a result, net sales in Europe declined 3.7% year on
year, to ¥80.5 billion, and operating income decreased 24.0%,
to ¥2.3 billion.
Greater China
In China, the rate of economic growth decelerated and there
were signs of deterioration in other economic indicators as
well. Nevertheless, demand remained solid on the whole.
There were some reasons for concern, such as the slump in
product exports to Europe and the sudden drop in sales by
Japanese automobile manufacturers, but brisk internal demand
for environment-related products, health- and medical-care
equipment, and other products continued. As a result, net
Financial Condition
Assets
Total assets amounted to ¥573.6 billion at the end of fi scal
2012, representing an increase of ¥36.3 billion, or 6.8%,
compared with the previous fi scal year-end. This rise was
largely due to increases in notes and accounts receivable—
trade and cash and cash equivalents accompanying higher
sales and income.
Liabilities and Shareholders’ Equity
Total liabilities amounted to ¥204.9 billion, down ¥10.8 billion
from the previous fiscal year-end. This decline was largely
due to lower short-term debt and termination and retirement
benefits.
Total shareholders’ equity was up ¥46.1 billion, to ¥367.0
billion, as a result of foreign currency translation adjustments
stemming from yen depreciation and treasury stock cancella-
tion. This caused the shareholders’ equity ratio to rise 4.3
percentage points, to 64.0%, compared with 59.7% at the
end of the previous fi scal year. The debt/equity ratio was 0.56
times, showing improvement from the previous year’s 0.67
times. Shareholders’ equity per share was ¥1,667.40 at the
end of the fi scal year, compared with ¥1,457.51 per share at
the end of the previous fi scal year.
Cash Flows
sales in the Greater China region rose 5.2% year on year, to
¥106.3 billion, and operating income increased 34.4%, to ¥11.3
billion, with the Greater China region once again accounting for
the largest portion of sales and income compared with other
overseas segments.
Asia Pacifi c
In the Asia Pacifi c region, the impacts of limited semiconductor-
related capital investment in South Korea weighted heavy, but
demand related to reconstruction from the Thailand fl oods was
generally strong, as was demand in other areas. There has also
been a recent rise in demand for healthcare devices in conjunc-
tion with the establishment of a middle-income group. As a
result, net sales in the Asia Pacifi c region increased 4.7% year
on year, to ¥54.8 billion. Operating income, however, contracted
15.5%, to ¥4.0 billion, due to the worsening of product mixes.
Working Capital and Current Ratio
(Billions of yen)
250
200
150
100
50
0
08
09
10
11
12
(FY)
Working capital [left axis]
Current ratio [right axis]
(%)
240
220
200
180
160
140
Outstanding Interest-Bearing Debt and Debt/Equity Ratio
(Billions of yen)
(Times)
2.0
60
45
30
15
0
1.5
1.0
0.5
0
08
09
10
11
12
(FY)
Outstanding interest-bearing debt [left axis]
Debt/equity ratio [right axis]
Cash and cash equivalents at the end of the fiscal year stood at ¥55.7 billion, a ¥10.5 billion increase from the end of the previous
fiscal year.
Cash Flows from Operating Activities
Net cash provided by operating activities totaled ¥53.1 billion,
up ¥21.1 billion from the previous fi scal year. Major factors
included an increase in net income before the deduction of
noncontrolling interests and a decrease in inventories.
Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥28.5
billion, up ¥2.0 billion from the previous fiscal year. This
increase was the result of higher investments in such areas
as production facilities.
Cash Flows from Financing Activities
Net cash used in financing activities was ¥18.6 billion, down
¥14.9 billion from 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
08
09
10
11
12
(FY)
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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 infl uence the Omron Group’s
management results and fi nancial condition (including share
price), and Omron believes these items may substantially
affect investor decisions. Note that items referring to the
future refl ect the Omron Group’s forecasts and assumptions
as of June 21, 2013, the release date of its Yukashoukenhou-
kokusho (Annual Securities Report fi led under the Financial
Instruments and Exchange Act of Japan).
(1) Economic Conditions
The Omron Group conducts business worldwide, and its
operations are affected by fl uctuations in the economy and
social conditions in Japan and overseas. Therefore, recessions
occurring in the Omron Group’s markets both within Japan and
overseas may have an adverse affect on the Group’s results
and fi nancial condition. Furthermore, we assume that the ratio
of overseas business will continue to increase as the Group
actively expands globally. The Group maintains a solid structure
resistant to changes in the external environment by, for
example, coping with foreign exchange risk by expanding
overseas production and increasing local procurement to
improve the balance of foreign currency denominated income
and expenditures. We also hedge foreign exchange risk through
short-term forward contracts executed with fi nancial institu-
tions. Nonetheless, rapid fl uctuations in the exchange rates of
currencies, such as the U.S. dollar and the euro, as well as a
protracted period of yen strength, could have an adverse
impact on the Group’s operating results and fi nancial condition.
(4) International Relations
The Omron Group actively conducts such business activi-
ties as production and sales in overseas markets. The
Group may be subject to operating diffi culties in countries
outside Japan related to possible social unrest due to
factors including differences in culture or religion; political
turmoil and uncertainty in economic trends; differences in
business customs in areas such as the structure of relation-
ships with local businesses and the collection of receiv-
ables, regulations governing confl ict minerals, specifi c legal
systems, and investment regulations; changes in tax
systems; diffi culty 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 fi nancial condition.
(5) Human Resources
Cross-corporation personnel exchanges and opportunities for
employees of a variety of nationalities to work together are
expanding in line with increasing globalization. Therefore,
labor troubles may arise due to differences in culture, customs,
and treatment. Also, while the localization of management
must proceed amid accelerating business globalization, it
may not be possible to secure a suffi cient number of superior
candidates for management-level positions. Furthermore, the
Omron Group employs a large number of personnel in Asia,
where a rise in employee wages could have an impact on the
Group’s operating results and fi nancial condition.
(2) Legal and Regulatory Risks
The Omron Group operates worldwide and is therefore
subject to a wide variety of laws and regulations, including
investment rules, labor laws, personal data protection laws,
laws against bribery of public offi cials, and anti-monopoly
laws. Our compliance efforts include training and education
programs for our employees and others. Nonetheless,
instances in which additional expenses are incurred to ensure
compliance in the event of the enactment of new laws,
changes to existing laws, or the adoption of stricter interpre-
tations of laws and ordinances by regulators could have an
adverse impact on the Group’s operating results and fi nancial
condition.
(6) Management of Funds
The Omron Group raises funds by issuing commercial paper
and other means. Therefore, fi nancial market instability, rising
interest rates in Japan, or a rating agency downgrade could
result in restrictions on fund-raising and an increase in
fi nancing costs, which could affect the Group’s operating
results and fi nancial condition. In order to maintain fl exibility
in capital expenditures and M&A at the global level, as well as
to improve capital effi ciency, the Group pays close attention
to the level of cash reserves and the deployment of funds.
Cash reserves are held as working capital or as a source of
funds for business investment and are not employed for
investment purposes.
(3) Natural Disasters
The Omron Group has established a business continuity plan
(BCP) that formulates necessary safety measures and steps
to facilitate business continuity and early restoration of opera-
tions in the event of fi re or natural disaster, including large-
scale earthquakes in the Nankai Trough or directly under the
Tokyo metropolitan area, as well as hypothetical events, such
as the outbreak of new infl uenza viruses that raise concerns
about a global pandemic. The Group and its business partners
maintain operating bases in Japan and around the world,
making it virtually impossible to completely avoid the risks
that would arise from an unforeseen natural disaster, fi re, or
other calamity. A major event of an unforeseen scale could
impact Group operations by, for example, causing a reduction
of business, which could have an impact on the Group’s
operating results and fi nancial condition.
(7) Information Security
The Omron Group possesses operationally important infor-
mation and obtains confi dential personal information and
information on its business partners in the course of business.
The Omron Group is taking steps to reinforce control over the
information the Group handles and further improve employee
information literacy with the goal of preventing misappropria-
tion of that information by third parties due to theft or loss.
Nonetheless, leaks of such information due to unforeseen
circumstances could have an impact on the Group’s operating
results and fi nancial condition.
Moreover, although the Group is strengthening technolog-
ical measures in preparation for cyber-attacks against its infor-
mation systems, as well as damage, alteration, or leaks of
important data, information system stoppages or similar
incidents caused by cyber-attacks surpassing the assumed
system security level could have an impact on the Group’s
operating results and fi nancial condition.
(8) Risks Associated with Patent Rights and Other
Intellectual Property Rights
The Omron Group’s R&D and design consists of researching
technologies developed by other companies as well as those
in the public domain. The Group’s business and product lines
encompass an extremely large number of intellectual property
rights, with new intellectual property rights declared on a daily
basis. A third party could therefore present a claim regarding a
specifi c Group product or component, negatively impacting
the Group’s operating results and fi nancial condition. The
exercise of our rights as a means to resolve issues related to
Group intellectual property could result in disputes with third
parties, in the form of measures to oppose by the counter-
party. The Omron Group takes appropriate measures to recog-
nize 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 among inventors, including
inventors who have retired from the Group.
The Omron Group has always focused on brand manage-
ment and, in recent years, has initiated prompt and appro-
priate countermeasures against the use of domain names
similar to “Omron” that have appeared overseas. Nonethe-
less, it is diffi cult to comprehend fully and take action against
all aspects of improper domain name registration, so the
danger exists that the fraudulent use of the “Omron” brand or
similar domain name could damage trust in the Group.
(9) Production
The Omron Group has manufacturing bases outside Japan,
including in China as well as in other Asian countries, and
supplies products to customers worldwide through its inter-
national sales offi ces. To ensure continued manufacturing
stability, the Group has established and is executing the
measures called for under its BCP, which covers the entire
supply chain from production through logistics, including IT.
Nonetheless, disaster, disease, labor disputes, deterioration
of public order, terrorism, and international relations issues
can cause a partial or full cessation of production, which could
have an impact on the Group’s operating results and fi nancial
condition if supplies to customers are disrupted.
(10) Purchasing and Procurement
Obtaining raw materials and parts of suffi cient quality in a
timely manner and in necessary quantities is absolutely
essential to the Group’s manufacturing. Therefore, we strin-
gently select suppliers for reliability. Nonetheless, limits on
supply or other supply issues could arise in cases such as
signifi cant supply chain disruption due to an accident or a
natural disaster, the imposition of supply limits or cessation
due to management issues at the supplier, or a broad increase
in market demand. In such cases, diffi culties in changing
suppliers, securing additional suppliers, or switching to
different parts under such conditions could have an impact on
the Group’s operating results and fi nancial condition.
While the Group contracts with suppliers to determine
prices, the market prices for materials such as petrochemi-
cals, steel, silver, copper, rare earths, and other raw materials
are linked to increased demand as well as the infl ux of capital
into emerging countries. The resulting price fl uctuations can
affect manufacturing costs and could have an impact on the
Group’s operating results and fi nancial condition.
(11) Quality Assurance
The Omron Group seeks to maximize customer satisfaction
by providing the best quality products and services based on
its “quality fi rst” principle. Regarding quality, the Group
develops and manufactures products in accordance with its
ISO-certifi ed quality control 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 occurrence
of defects, it has become diffi cult 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 have necessitated
greater attention to consumer protection. Product quality is
also increasingly a major issue overseas. For these reasons,
product defects that require large-scale product recalls or that
carry damage beyond the scope of the Group’s liability insur-
ance could seriously damage trust in the Company and the
Omron brand, possibly leading to declining sales that could
have a negative impact on the Group’s fi nancial 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
adopted by the European Union in July 2006. The Group is
investigating the status of regulated chemical substances in
components and materials and strives to use components and
materials that do not contain banned substances. Since 2009,
the Group has adhered to the European Union’s Registration,
Evaluation and Authorisation Chemicals (REACH) Regulation
concerning the identifi cation of contained substances. Despite
the Group’s efforts, frequent modifi cations of the regulations
on controlled substances that complicate supervisory efforts
could result in infractions, such as failure to comply with
modifi ed regulations.
(12) Environmental Conservation
The Group must comply with a wide variety of environmental
laws and regulations, including those related to climate
change, air and water pollution, hazardous substances, waste,
product recycling, and the contamination of soil and ground-
water. These laws and regulations apply not only to the
Omron Group’s current business, but may also be retroac-
tively 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 compli-
ance with future environmental laws and regulations or efforts
to improve the environmental soundness of operations could
result in a rise in expenses related to the environment, which
in turn could have an impact on the Group’s operating results
and fi nancial condition.
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Omron Corporation
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95
Consolidated Balance Sheets
OMRON Corporation and Subsidiaries
March 31, 2012 and 2013
ASSETS
Current Assets:
Cash and cash equivalents
Notes and accounts receivable-trade
Allowance for doubtful receivables
Inventories
Deferred income taxes
Other current assets
Millions of yen
FY2011
FY2012
Thousands of
U.S. dollars
FY2012
¥ 45,257
¥ 55,708
$ 592,638
143,304
158,911
1,690,543
(2,205)
92,253
17,975
11,513
(1,988)
91,013
17,611
12,439
(21,149)
968,223
187,351
132,330
Total Current Assets
308,097
333,694
3,549,936
Property, Plant and Equipment:
Land
Buildings
Machinery and equipment
Construction in progress
Total
Accumulated depreciation
26,950
128,870
142,148
7,417
26,591
137,821
156,186
6,729
282,883
1,466,181
1,661,553
71,585
305,385
(184,679)
327,327
3,482,202
(200,492)
(2,132,894)
Net Property, Plant and Equipment
120,706
126,835
1,349,308
Investments and Other Assets:
Investments in and advances to affi liates
Investment securities
Leasehold deposits
Deferred income taxes
Other assets
14,443
36,161
7,219
34,516
16,181
17,939
38,193
6,914
30,612
19,450
190,840
406,309
73,553
325,660
206,915
Total Investments and Other Assets
108,520
113,108
1,203,277
Total
¥ 537,323
¥ 573,637
$ 6,102,521
U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2013, of ¥94 = $1.
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Short-term debt
Notes and accounts payable-trade
Accrued expenses
Income taxes payable
Other current liabilities
Millions of yen
FY2011
FY2012
Thousands of
U.S. dollars
FY2012
¥ 18,774
¥ 5,570
$ 59,255
79,331
29,179
623
24,989
75,592
32,818
3,907
27,814
804,170
349,128
41,564
295,894
Total Current Liabilities
152,896
145,701
1,550,011
Deferred Income Taxes
Termination and Retirement Benefi ts
Other Long-Term Liabilities
738
60,432
1,577
595
56,944
1,634
6,330
605,787
17,382
Shareholders’ Equity:
Common stock, no par value:
Authorized: 487,000,000 shares in FY2012 and FY2011
Issued:
227,121,372 shares and 239,121,372 shares
64,100
64,100
681,915
in FY2012 and FY2011, respectively
Capital surplus
Legal reserve
Retained earnings
Accumulated other comprehensive income (loss)
Treasury stock, at cost: 6,992,907 shares and 18,991,739 shares
99,078
10,034
260,557
(68,433)
99,066
10,876
253,654
(44,349)
1,053,894
115,702
2,698,447
(471,798)
in FY2012 and FY2011, respectively
(44,496)
(16,385)
(174,309)
Total Shareholders’ Equity
Noncontrolling Interests
Total Net Assets
Total
320,840
840
321,680
366,962
1,801
368,763
3,903,851
19,160
3,923,011
¥537,323
¥573,637
$6,102,521
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Omron Corporation
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Consolidated Statements of Income
OMRON Corporation and Subsidiaries
Years ended March 31, 2011, 2012 and 2013
Consolidated Statements of Comprehensive Income (Loss)
OMRON Corporation and Subsidiaries
Years ended March 31, 2011, 2012 and 2013
Millions of yen
FY2010
FY2011
FY2012
Thousands of
U.S. dollars
FY2012
¥617,825
¥619,461
¥650,461
$6,919,798
Net Income
FY2010
¥ 27,016
Millions of yen
FY2011
¥16,352
FY2012
¥30,117
Thousands of
U.S. dollars
FY2012
$320,394
Net Sales
Costs and Expenses:
Cost of sales
Selling, general and administrative expenses
Research and development expenses
Other expenses, net
386,123
142,365
41,300
6,344
391,574
145,662
42,089
6,589
408,954
152,676
43,488
4,106
4,350,575
1,624,213
462,638
43,681
Total
576,132
585,914
609,224
6,481,107
Income before Income Taxes
and Equity in Loss (Earnings) of Affi liates
Income Taxes
Equity in Loss (Earnings) of Affi liates
Net Income
Net Income (Loss) attributable to noncontrolling interests
41,693
14,487
190
27,016
234
33,547
17,826
(631)
16,352
(37)
41,237
14,096
(2,976)
30,117
(86)
438,691
149,957
(31,660)
320,394
(915)
Net Income attributable to shareholders
¥ 26,782
¥ 16,389
¥ 30,203
$ 321,309
Per Share Data:
Net Income attributable to shareholders
Basic
Diluted
FY2010
Yen
FY2011
FY2012
U.S. dollars
FY2012
¥121.66
121.66
¥74.46
74.46
¥137.20
137.20
$1.46
1.46
U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2013, of ¥94 = $1.
Unrealized holding gains (losses) arising during the year
(1,566)
Other Comprehensive Income (Loss), net of tax:
Foreign currency translation adjustments:
Foreign currency translation adjustments arising
during the year
Reclassifi cation adjustment for the portion realized
in net income
Net unrealized gain and loss
Pension liability adjustments:
Pension liability adjustments arising during the year
Reclassifi cation adjustment for the portion realized
in net income
Net unrealized gain and loss
Unrealized gains (losses) on available-for-sale securities:
Reclassifi cation adjustment for losses on impairment
realized in net income
Reclassifi cation adjustment for net gains on sale realized
in net income
Reclassifi cation adjustment for net gains on share
exchange in net income
Net unrealized gain and loss
Net gains (losses) on derivative instruments:
Unrealized holding gains (losses) arising during the year
Reclassifi cation adjustment for net gains (losses) realized
in net income
Net unrealized gain and loss
Other Comprehensive Income (Loss)
Comprehensive Income
Comprehensive Income (Loss) attributable to
noncontrolling interests
(10,376)
(1,613)
22,523
239,606
(14)
(10,390)
(1,534)
(649)
(2,183)
466
(10)
(4)
(1,114)
893
(841)
52
(13,635)
13,381
(892)
(2,505)
(43)
(457)
22,480
239,149
625
(704)
(79)
460
227
(188)
(74)
425
3
(57)
(54)
(2,213)
14,139
(21)
(894)
(915)
(223)
(9,511)
(9,734)
2,317
24,649
693
7,372
(425)
(4,521)
—
2,585
—
27,500
(455)
(4,840)
549
94
24,244
54,361
5,840
1,000
257,915
578,309
212
(44)
74
787
Comprehensive Income attributable to shareholders
¥ 13,169
¥14,183
¥54,287
$577,522
U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2013, of ¥94 = $1.
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Omron Corporation
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Consolidated Statements of Shareholders’ Equity
OMRON Corporation and Subsidiaries
Years ended March 31, 2011, 2012 and 2013
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, 2010
239,121,372
¥64,100
¥99,081
¥ 9,363
¥230,859
¥(52,614)
¥(44,462)
¥306,327
¥ 808
¥307,135
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
26,782
(6,605)
211
(211)
26,782
234
27,016
(6,605)
(6,605)
(0)
(0)
—
(121)
(121)
—
(13,613)
(13,613)
(22)
(13,635)
16,389
(6,164)
460
(460)
(140)
2
899
(37)
313,652
16,352
16,389
(6,164)
(6,164)
—
(15)
(15)
—
Net income
Cash dividends paid to
OMRON Corporation
shareholders, ¥30 per share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
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
(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
Net income
Cash dividends paid to
OMRON Corporation
shareholders, ¥37 per share
Cash dividends paid to
noncontrolling interests
Equity transaction with
noncontrolling interests
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury stock
Sale of treasury stock
Retirement of treasury stock
(12,000,000)
30,203
(8,145)
(12)
842
(842)
30,203
(86)
30,117
(8,145)
(8,145)
(2)
(2)
(12)
—
889
877
—
24,084
24,084
160
24,244
(0)
(28,119)
(9)
1
28,119
(9)
1
—
(9)
1
—
Balance, March 31, 2013
227,121,372
¥64,100
¥99,066
¥10,876
¥253,654
¥(44,349)
¥(16,385)
¥366,962
¥1,801
¥368,763
Common stock Capital surplus
Legal reserve
Thousands of U.S. dollars
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
Shareholders’
Equity
Noncontrolling
interests
Total Net
Assets
Treasury stock
Balance, March 31, 2012
$681,915 $1,054,022
$106,745 $2,771,882 $(728,011) $(473,362) $3,413,191
$ 8,937 $3,422,128
Net income
Cash dividends paid to
OMRON Corporation
shareholders, $0.39 per share
Cash dividends paid to
noncontrolling interests
Equity transaction with
noncontrolling interests
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury stock
Sale of treasury stock
Retirement of treasury stock
Balance, March 31, 2013
321,309
(86,649)
(128)
8,957
(8,957)
321,309
(915)
320,394
(86,649)
(86,649)
(21)
(21)
(128)
—
9,457
9,329
—
256,213
256,213
1,702
257,915
(0)
(299,138)
(96)
11
299,138
(96)
11
—
(96)
11
—
Consolidated Statements of Cash Flows
OMRON Corporation and Subsidiaries
Years ended March 31, 2011, 2012 and 2013
Operating Activities:
Net income
Adjustments to reconcile net income to net cash provided
by operating activities:
Millions of yen
FY2010
FY2011
FY2012
Thousands of
U.S. dollars
FY2012
¥ 27,016
¥ 16,352
¥ 30,117
$ 320,394
Depreciation and amortization
22,984
22,617
22,452
238,851
Net loss on sale and disposal of property, plant and equipment
Loss on impairment of long-lived assets
Net gain on sale of investment securities
Loss on impairment of investment securities
Loss on impairment of goodwill
Termination and retirement benefi ts
Deferred income taxes
Equity in loss (earnings) of affi liates
Changes in assets and liabilities:
Increase in notes and accounts receivable-trade
Decrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in income taxes payable
Increase in 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, net
Proceeds from sale of property, plant and equipment
Decrease (increase) in investment in and loans to affi liates
Sale of business, net of cash acquired
Acquisition of business, net of cash acquired
Purchase of noncontrolling interests
Other, net
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
—
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)
578
3,265
(677)
1,086
153
(4,433)
3,762
(2,976)
(5,827)
8,641
21
(5,927)
3,121
1,519
(1,817)
22,941
53,058
1,658
(0)
6,149
34,734
(7,202)
11,553
1,628
(47,160)
40,021
(31,660)
(61,989)
91,926
223
(63,053)
33,202
16,160
(19,330)
244,053
564,447
17,638
(0)
(21,647)
(27,502)
(30,383)
(323,223)
276
1,066
20
(34)
—
—
—
(101)
2,307
(480)
—
(1,012)
—
520
457
836
4,862
8,894
(1,884)
(20,043)
90
141
(10)
624
957
1,500
(106)
6,638
Net cash used in investing activities
(20,210)
(26,486)
(28,471)
(302,883)
Financing Activities:
Net borrowings (repayments) of short-term debt
Repayments of long-term debt
Dividends paid by the Company
Dividends paid to noncontrolling interests
Proceeds from equity transactions with noncontrolling interests
Other, net
Net cash provided by (used in) fi nancing activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of the Year
29,052
(20,000)
(5,285)
(0)
—
(434)
3,333
(2,070)
23,009
51,726
(26,744)
(13,273)
(141,202)
—
(6,604)
(15)
—
(129)
(33,492)
(1,446)
(29,478)
74,735
—
—
(6,164)
(65,574)
(2)
819
70
(21)
8,713
745
(18,550)
(197,339)
4,414
10,451
45,257
46,956
111,181
481,457
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$681,915 $1,053,894
$115,702 $2,698,447 $(471,798) $(174,309) $3,903,851
$19,160 $3,923,011
Cash and Cash Equivalents at End of the Year
¥ 74,735
¥ 45,257
¥ 55,708
$ 592,638
U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2013, of ¥94 = $1.
U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2013, of ¥94 = $1.
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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 fi nancial reporting (“ICFR”) fi led under the Financial Instru-
ments and Exchange Act of Japan. This report is presented merely as supplemental information. There are differences between an assessment 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 “signifi cant locations and/or business units.” At selected “signifi cant locations and/or business units,”
we included in the scope of assessment, business processes leading to sales, accounts receivable and inventories as signifi cant accounts that may have
a material impact on our business objectives. Further, in addition to selected signifi cant 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)
signifi cant 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 fi nancial reporting.
Management’s Report on Internal Control
1. Matters relating to the basic framework for internal control over
fi nancial reporting
Yoshihito Yamada, President and Chief Executive Offi cer; and Yoshinori
Suzuki, Senior Managing Director and Chief Financial Offi cer are
responsible for designing and operating effective internal control over
fi nancial reporting of Omron Corporation (the “Company”) and have
designed and operated internal control over fi nancial 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 misstate-
ments may not be completely prevented or detected by internal
control over fi nancial reporting.
2. Matters relating to the scope of assessment, the basis date of
assessment and the assessment procedures
The assessment of internal control over fi nancial reporting was
performed as of March 31, 2013 which is the end of this fi scal year.
The assessment was performed in accordance with assessment
standards for internal control over fi nancial reporting generally
accepted in Japan.
In conducting this assessment, we evaluated internal controls
which may have a material effect on our entire fi nancial 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, identifi ed key
controls that may have a material impact on the reliability of the
Company’s fi nancial 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 fi nancial reporting for the Company, as well as its consoli-
dated subsidiaries and equity-method affi liated companies, from the
perspective of the materiality that may affect the reliability of their
fi nancial reporting. The materiality that may affect the reliability of the
fi nancial reporting is determined by taking into account the materiality
of quantitative and qualitative impacts on fi nancial reporting. In light of
the results of assessment 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 affi liated companies
determined to have an insignifi cant quantitative and qualitative infl u-
ence on the reliability of fi nancial 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 “signifi cant locations and/or
business units.” At selected “signifi cant locations and/or business
units,” we included in the scope of assessment, business processes
leading to sales, accounts receivable and inventories as signifi cant
accounts that may have a material impact on the business objectives
of the Company. Further, in addition to selected signifi cant 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) signifi cant 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 fi nancial reporting.
3. Matters relating to the results of the assessment
The above assessments determined that the Company’s internal
control over fi nancial reporting was effective as of the last day of the
fi scal year under review.
4. Additional notes
No material items to report.
5. Special notes
No material items to report.
June 21, 2013
Yoshihito Yamada
President and CEO
Omron Corporation
Yoshinori Suzuki
Senior Managing Director
and CFO
Omron Corporation
Corporate Information
As of March 31, 2013
Date of Establishment
May 10, 1933
Number of Employees
(Consolidated)
35,411
Paid-in Capital
¥64,100 million
Common Stock
Authorized
487,000,000 shares
Issued
227,121,372 shares
Number of shareholders
30,794
Stock Listings
Tokyo Stock Exchange
Frankfurt Stock Exchange
Ticker Symbol Number
6645
Custodian of Register
of Shareholders
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
Asia Pacifi c
Omron Asia Pacifi c Pte. Ltd.
(Singapore)
Tel 65-6835-3011
Fax 65-6835-2711
Head Offi ce
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
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 Japanese
Manufacturing, Sales &
Marketing, and Research &
Development Locations
Manufacturing
Kusatsu Offi ce
Tel 81-77-563-2181
Fax 81-77-565-5588
Ayabe Offi ce
Tel 81-773-42-6611
Fax 81-773-43-0661
Yasu Offi ce
Tel 81-77-588-9000
Fax 81-77-588-9901
Sales & Marketing
Tokyo Offi ce
Shinagawa Front Building 7F
2-3-13, Konan, Minato-ku,
Tokyo 108-0075, Japan
Tel 81-3-6718-3400
Fax 81-3-6718-3408
Mishima Offi ce
Tel 81-55-977-9000
Fax 81-55-977-9080
Nagoya Offi ce
Tel 81-52-571-6461
Fax 81-52-565-1910
Osaka Offi ce
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 Offi ce
Tel 81-86-277-6111
Fax 81-86-276-6013
Website
For more detailed information, please refer to our website.
About Omron
http://www.omron.co.jp/ (Japanese)
http://www.omron.com/ (English)
Investor Relations
http://www.omron.co.jp/ir/ (Japanese)
http://www.omron.com/ir/ (English)
CSR
http://www.omron.co.jp/about/csr/ (Japanese)
http://www.omron.com/about/csr/ (English)
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Omron Corporation
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Stock Information
As of March 31, 2013
Stock Price Osaka Securities Exchange*
(Index)
200
180
160
140
120
100
80
60
40
20
0
2004/3
Monthly Volume
Omron
Nikkei 225 Index
2005/3
2006/3
2007/3
2008/3
2009/3
2010/3
2011/3
2012/3
2013/3
(1,000
Shares)
30,000
20,000
10,000
0
Note: Share index (2004/3E=100)
Ownership and
Distribution of Shares
(%)
100
23.8%
24.6%
19.3%
80
60
40
20
0
37.2%
37.6%
44.1%
5.5%
0.4%
5.7%
0.8%
5.6%
0.7%
33.1%
31.3%
30.3%
10
11
12
(FY)
(As of March 31)
Individuals and others
Foreign institutions and individuals
Other corporations
Financial instruments dealers
Financial institutions
Yearly High and Low Prices*
FY
2003
2004
High (¥)
Low (¥)
2,740
1,648
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
2012
2,478
1,436
* Stock price information is for the 1st section of the Osaka Securities Exchange before the July 16, 2013, integration of the cash equity markets
of the Tokyo Stock Exchange and the Osaka Securities Exchange.
Publication of Integrated Report 2013
Omron conducts management from a long-term perspective in its quest to work for the benefi t of the global society through its
business. Integrated thinking has always been a core element of this perspective. As one aspect of this, we are actively
disclosing information and conducting investor relations activities to practice “relationship-building with shareholders,” which is
one of Omron’s management commitments. For this reason, we made the switch to integrated reporting in 2012, and this report
is thus our second integrated report.
Integrated Report 2013 has been constructed to provide the Company’s stakeholders with concrete and easy-to-understand
information regarding Omron’s management. I feel confi dent that this report will prove to be a viable tool for the shareholders
and other investors that provide the Company with stable funding over the long term.
Several organizations, including the International Integrated Reporting Council (IIRC), are providing frameworks and other
guidelines for integrated reporting. While following such guidelines, we went creative and sought our way of helping readers
better understand Omron’s management.
Further, in July 2012, the Corporate Reporting Lab was established by a corporate accounting offi ce of the Ministry of
Economy, Trade and Industry of Japan. This lab conducts studies on corporate governance and communication between compa-
nies and investors from a variety of perspectives, and results of these studies are released in both Japanese and English. As a
member of the lab’s Planning Committee, I took this lab’s fi ndings into mind when constructing this integrated report.
Omron has just begun undertaking the new challenge of publishing integrated reports. I would like to ask for your continued
support and understanding as we continue to evolve our integrated reporting efforts going forward.
Satoshi Ando
Executive Offi cer
Senior General Manager,
Investor Relations Headquarters
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INQUIRIES
Shinagawa Front Building 7F
2-3-13, Konan, Minato-ku, Tokyo 108-0075, Japan
Investor Relations Headquarters
Investor Relations Department
Phone: +81-3-6718-3421 Fax: +81-3-6718-3429
URL: http://www.omron.com/ir/
Board of Directors Offi ce
Corporate Social Responsibility Department
Phone: +81-3-6718-3410 Fax: +81-3-6718-3411
URL: http://www.omron.com/about/csr/
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Integrated Report 2013
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Printed in Japan