Omron Corporation Annual Report 2014

FY2014 Annual Report · Omron Corporation
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Integrated Report 2014

Year ended March 31, 2014

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Working for the Beneﬁt of Society: 
The Corporate Philosophy Driving Omron’s Value Creation

Omron has its own predictive theory called the SINIC theory. Recognizing society’s potential needs promptly; 
creating numerous products and services that help industry, society, and people’s lives; and solving social issues 
problems through business̶this is Omron’s value creation story. “Working for the beneﬁt of society”̶the 
aspiration of “creating a better society” implied in this corporate philosophy is being passed on throughout the 
Company, and Omron is aiming to remain “a company that people around the world require, with high 
expectations” and will continue its sustainable growth in the years to come together with greater society.

Omron’s“Unwavering Corporate Spirit”
Flows to Its Management Roots

Corporate Motto

The Omron 
Principles

At work for a better life,

a better world for all

Corporate
Core Value

Working for the 
benefit of society

Management Principles

● Challenging ourselves 
to always do better

● Innovation driven by social needs
● Respect for humanity

Management Commitments

Guiding Principles for Action

● Respect for individuality and diversity
● Maximum customer satisfaction
● Relationship-building with shareholders
● Awareness and practice of corporate 
　citizenship

● Quality first
● Unceasing commitment to 
　challenging ourselves 
● Integrity and high ethics
● Self-reliance and mutual support

■ Management’s Compass － The SINIC Theory*

Omron announced this predictive theory at the First Future Research World Congress 
in April 1970.

From the 1990s onward, Omron has set a long-term management vision based on 
this predictive theory formulated every 10 years with the aim of achieving sustainable 
growth from a long-term perspective.

Seed

Technology

Innovation

Impetus

Need

Progress-
oriented
motivation

Science

Society

ciety

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* For an overview of the SINIC theory, please refer to page 34.

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Automation at
production sites

Automation of 
railway operations

Employment of people 
with disabilities

Resolution of 
health issues

Contribution to 
the proliferation 
of renewable energy

1960  
World’s first non-contact switch

1967  
World’s first fully unmanned train 
station system

1972 
Japan’s first welfare factory
(Omron Taiyo Electronics Co.)

1990s  
Blood pressure monitor 
for overseas market

2011 
PV inverter that eliminates installation 
limits on solar power generation systems

Net sales

Japan
Overseas

¥1 trillion

¥900 billion

(FY)

1959

1970

1980

1990

2000

2011

2014

2017
（Target）

2020
（Target）

1

Long-Term Management Strategy

GLOBE
STAGE

EARTH-1
STAGE

EARTH-2
STAGE

G’90s

GD2010

VG2020

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Integrated Report  2014 
 
 
 
 
 
 
 
 
P. 13

P. 55

P. 62

P. 17

P. 24

P. 33

P. 61

Omron Corporation
Integrated Report  2014

C O N T E N T S

Corporate Value Initiatives

About Omron

38  At a Glance

40  Omron through the Year 

Omron’s Value Creation Story 

Business Areas 

11-Year Financial and Non-Financial Highlights 

Financial Highlights 

Non-Financial Highlights 

Omron’s Management Team 

1

4

8

10

12

14

Where We’re Headed
Long-Term Management Strategy 

16

“Value Generation 2020”  　

Message from the CEO 

Message from the CFO 

17

24

28

Special Feature 1　Global Vertical-Horizontal Management 

OMCA Plays a Central Role in Linking Business  　 

Special Feature 2　More Advanced 

33

Social Need Creation  　 

Explanation of cover

We are all charged with the task of 
ensuring the sustainability of our  
precious planet.
　Omron embarked on the EARTH STAGE 
in April 2014.
　In this stage, Team Omron will strive 
unceasingly to create social needs, 
tackling all challenges placed before it.

Editorial Policy
The scope of this report covers the 166 
companies of the Omron Group, consisting 
of 156 consolidated subsidiaries and 10 non-
consolidated subsidiaries and afﬁliates 
accounted for under the equity method (as of 
March 31, 2014). Through its environmental 
and governance-related activities, Omron is 
contributing to the development of a sustain-
able 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, as well 
as other statements that are not historical 
facts, are forward-looking statements involving 
risks and uncertainties. Important factors that 
could cause actual results to differ materially 
from such statements include, but are not 
limited to, general economic conditions in  
Omron’s markets, which are primarily Japan, 
Americas, Europe, Asia Paciﬁc, and Greater 
China; demand for and competitive pricing 
pressure on Omron’s products and services 
in the marketplace; Omron’s ability to continue 
to win acceptance for its products and 
services in these highly competitive markets; 
and movements of currency exchange rates.

2

42 

Industrial Automation Business (IAB)

44  Electronic and Mechanical Components Business (EMC)

46  Automotive Electronic Components Business (AEC)

48  Social Systems, Solutions and Service Business (SSB)

50  Healthcare Business (HCB)

52  Other Businesses

Environmental Solutions Business, Backlight Business,  
Electronic Systems & Equipments Business， and Micro Devices Business

54  Sustainability Topics

Corporate Value Foundation

58  CSR Management

60  Human Resources Strategies

64  Environmental Management

67  Corporate Governance, Internal Controls, and Compliance and Risk Management

74  Directors, Audit & Supervisory Board Members, Honorary Chairman, and Executive Ofﬁcers

Financial Section

78 

94 

Financial Section (U.S. GAAP)

Internal Control Section

95 

IR Activities Focusing on Engagement 

96  Corporate Information / Stock Information

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Areas

Businesses United by Core Technologies

Global Business Expansion

Focusing on its mainstay Industrial Automation business, 

Omron fully utilizes its core “Sensing and Control” technologies 

Having established bases in 35 countries 

and regions across the globe, including Japan, 

and will continue to contribute to the sustainable development of society.

Omron is expanding its business with a community-oriented approach.

The Omron Group has more than 36,000 employees, 

69.1% of whom are overseas employees.

Employees mutually express their own values and recognize others 

and are strongly bonded toward realizing creative innovations.

Eliminations and Corporate

1%

¥6.0 billion

10%

¥78.9 
billion

38%

¥291.7 
billion

Fiscal 2013
Net Sales 
by Segment
¥773.0 billion

11%

¥89.3 
billion

11%

¥82.7 
billion

16%

¥126.6 
billion

13%

¥97.7 billion

Industrial 
Automation 
Business (IAB)
Omron’s mainstay business, 
leading the innovation 
of global manufacturing 
through factory automation 
(FA)

Electronic and 
Mechanical 
Components 
Business (EMC)
Providing the global 
market with sophisticated 
components that create 
beneﬁcial relationships 
between people and 
machines in a variety 
of ﬁelds

Other Businesses
Exploring and developing 
new businesses, in addition 
to playing a part in Group 
growth strategies, including 
the Environmental  
Solutions Business 

Healthcare Business 
(HCB)
Providing a comprehensive 
product lineup to support daily 
healthcare efforts, whether at 
home or at medical facilities

Social Systems, 
Solutions and Service 
Business (SSB)
Offering diverse systems for 
social infrastructure to assist 
making society safer and more 
comfortable for everyone

Automotive 
Electronic 
Components 
Business (AEC)
Undertaking new challenges in 
the automotive electronics ﬁeld 
to help make automobiles safer 
and friendlier toward people and 
the environment

4

Direct Exports

1.5%

¥11.6 billion

Asia Paciﬁc

9.3%

¥72.3 billion

Greater
China

18.4%

¥142.4
billion

Europe

13.1%

Fiscal 2013
Net Sales
by Region
¥773.0 billion

Japan

44.6%

¥344.8 
billion

¥100.9
billion

Americas

13.1%

¥101.0 billion

Ratio of overseas 
sales to net sales
55.4％ 

Ratio of overseas employees 
to total employees 
69.1％

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どんな会社か？どこへ向かうのか？企業価値の成果企業価値を支える力財務セクションOmron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
IAB

Control Equipment for FA
IAB’s product lines comprise  
devices for sensing light image 
vibration, temperature and humidity 
levels, location, speed, and other 
data needed for operating manu-
facturing equipment; control and 
motion devices for optimal control; 
and display and operating devices 
that monitor control status and 
enable configuration and adjust-
ment. Interconnecting devices over 
open protocol enables high-speed, 
high-precision control, contributing 
to“quality, safety, and  
the environment.”

Relays and Switches
Relays are used in virtually  
all electric and electronic 
devices, including refrigera-
tors, microwave ovens, and 
air conditioners.

EMC

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 
on the door without taking out the 
transmitter key.

Train Station Solutions
SSB provides systems solutions, 
including the newest models for auto-
mated ticket gates and ticket vending 
machines, to increase the comfort 
and efﬁciency of train stations.

Healthcare and Medical Devices for Home Use
HCB supports the health 
of individuals, from daily 
personal health manage-
ment to disease man-
agement at home.

AEC

SSB

HCB

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
Safety equipment 
contributes to the 
creation of a safe 
workplace environ-
ment by automati-
cally sounding an 
alarm or safely 
shutting down 
machinery when     
a worker enters  
a deﬁned danger zone.

Safety 
Controllers

Safety Light 
Curtains

Safety Door 
Switches

Environmental Equipment
environmental equipment 
provides constant monitoring 　
of the presence of foreign 
particles and of temperature 
and humidity levels and 
contributes to energy savings 
by analyzing electric power  
consumption data.

Air Particle Sensors

Automated Optical 
Inspection Devices
Automated optical 
inspection devices     
use visual cameras and 
other means to detect 
defective products, 
thereby helping produc-
tion processes to be 
automated.

Segment 
Information

P.42

Vision 
Sensors

Fiber 
Sensors

Temperature 
Controllers

Programmable 
Logic Controllers

Inverters

Servomotors 
and Servo Drivers

Safety Laser 
Scanners

Air Cleaning Units

Ionizers

Air Thermal Sensors

Printed Circuit 
Board Inspection 
Systems

FPC Connectors

OKAO Vision Facial Image 
Sensing Technology

Facial  Image  Sensing 
Technologies
Image sensing technologies are 
used to recognize people’s faces, and 
conﬁrm people’s identities, estimate 
age, and determine gender. They are 
also capable of recognizing hand or 
ﬁnger movements, thus enabling 
device control without the need     
of a remote controller.

Sensor / Modules
Sensor / modules 
respond to 
various needs 
from the digital 
imaging to 
amusement 
industries.

Segment 
Information

Printer Toner 
Sensors

P.44

Power Supply Units for 
Amusement Devices

Automotive Switches / Controllers

Electric Power Steering Controllers

AEC supplies multi-function 
control units that use multi-    
channel communication technolo-
gies to integrate control of diverse 
automobile body features, includ-
ing power window switches, door 
locks, and windshield wipers. 

Electric power steering 
controllers enable smoother 
steering and help achieve 
energy savings and better 
mileage.

Engine start systems enable car engines to be started by pressing a switch from the driver’s seat of the car.

Power Window 
Switches

Electric Power Steering Controllers

Connectors
Connectors       
are used as an 
interface between 
electronic devices 
and are widely 
used in mobile 
devices and other 
electronics.

Printed Circuit Board Power Relays

Surface Mount 
Switches

Transmitter Key

Environmental 
Solutions

SSB offers total solu-
tions for generating, 
storing, and saving 
energy in a one-stop 
service.

Automated Ticket Gates

Ticket 
Vending 
Machines

Road Trafﬁc Solutions
In addition to systems that 
centralize control of traffic vol-
umes and conditions, SSB is 
developing next-generation traffic 
safety systems designed to 
prevent accidents.

Medical Devices for 
Professional Use
By supplying medical 
institutions with highly safe 
technologies, HCB is trying 
to reduce the risks associat-
ed with healthcare. 

Trafﬁc and Road Management Systems

Sleep Sensors

Blood Pressure 
Monitors

Body Composition 
Monitors

Blood Glucose 
Meters

Thermometers

Activity Monitors

Spot Check Monitors

Non-Invasive Vascular 
Screening Devices

Other

PV Inverters for Solar Power Generation Systems
Used to convert the DC electricity 
generated by solar panels into AC 
electricity usable in the home, these 
PV inverters are contributing to the 
spread of renewable energy.

LCD Backlights
A variety of technologies are utilized to 
contribute to brighter and slimmer mobile 
phones with lower power consumption.

Electronic Systems and Equipment
Omron supplies services related to 
the development and consignment 
production of industrial embedded 
computers and electronic systems 
as well as uninterruptible power 
supply units.

Micro Devices
Omron provides 
new applications 
centering on 
micro electrical 
mechanical 
systems (MEMS).

PV Inverters for Outdoor 
Installation

LCD Backlights

Uninterruptible Power 
Supply Units

MEMS Absolute 
Pressure Sensors

6

Segment 
Information

P.46

Segment 
Information

P.48

Segment 
Information

P.50

Segment 
Information

P.52

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どんな会社か？どこへ向かうのか？企業価値の成果企業価値を支える力財務セクションOmron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
52,028

62,046

95,968

38,280

40,539

(47,075)

(6,536)

(4,697)

630,337

42,995

19,988

382,822

¥   165.0

1,660.7

34.0

38.4%

8.6%

13.3%

9.9%

10.3%

60.7%

49.7%

32,456

64.9

5,206

11-Year Financial and Non-Financial Highlights

Omron Corporation and Subsidiaries

FY2003

FY2004

FY2005

FY2006

FY2007

FY2008

FY2009

FY2010

FY2011

FY2012

Operating Results (for the year):
　Net sales 
　Gross proﬁt 
　Selling, general and administrative expenses 
　(excluding research and development expenses)
　Research and development expenses 
　Operating income (Note 2)
　EBITDA (Note 3)
　Net income (loss) attributable to shareholders
Cash Flows (for the year):
　Net cash provided by operating activities 
　Net cash used in investing activities
　Free cash ﬂow (Note 4)
　Net cash provided by (used in) ﬁnancing activities

Financial Position (at year-end):
　Total assets 
　Cash and cash equivalents
　Total interest-bearing liabilities
　Total shareholders’  equity

¥575,157

235,460

¥598,727

245,298

¥616,002

248,642

¥723,866

278,241

139,569

141,185

149,274

164,167

46,494

49,397

77,059

26,811

80,687

(34,484)

46,203

(28,119)

592,273

95,059

56,165

274,710

49,441

54,672

83,314

30,176

61,076

(36,050)

25,026

(40,684)

585,429

80,619

23,203

305,810

50,501

60,782

91,607

35,763

51,699

(43,020)

8,679

(38,320)

589,061

52,285

2,468

362,937

¥762,985

293,342

176,569

51,520

65,253

101,596

42,383

68,996

(36,681)

32,315

(34,481)

617,367

40,624

18,179

368,502

¥627,190

218,522

¥524,694 

184,342 

¥617,825 

231,702 

¥619,461

227,887

164,284

133,426 

142,365 

145,662

48,899

5,339

38,835

(29,172)

31,408

(40,628)

(9,220)

21,867

538,280

46,631

52,970

298,411

37,842 

13,074 

40,088 

3,518 

42,759 

(18,584)

24,175 

(20,358) 

532,254 

51,726

36,612 

306,327 

41,300 

48,037 

71,021 

26,782 

41,956 

(20,210)

21,746 

3,333 

562,790 

74,735

45,519 

312,753 

42,089

40,136

62,753

16,389

31,946

(26,486)

5,460

(33,492)

537,323

45,257

18,774

320,840

¥650,461

241,507

152,676

43,488

45,343

67,795

30,203

53,058

(28,471)

24,587

(18,550)

573,637

55,708

5,570

366,962

Millions of yen
FY2013

Thousands of
U.S. dollars (Note 1)
FY2013

¥772,966

297,208

$7,504,524

2,885,513

181,225

1,759,466

47,928

68,055

93,144

46,185

79,044

(31,125)

47,919

(16,298)

654,704

90,251

488

430,509

465,320

660,727

904,309

448,398

767,417

(302,184)

465,233

(158,233)

6,356,350

876,223

4,738

4,179,699

Yen

U.S. dollars (Note 1)

24.0

20.0

8.6%

41.0%

40.9%

1,284.8

1,148.3

¥   126.5

¥   110.7

Per Share Data:
　Net income (loss) attributable to shareholders (basic) (EPS)
　Shareholders’ equity 
　Cash dividends (Note 5)
Financial Ratios:
　Gross proﬁt margin
　Operating income margin
　EBITDA margin
　Return on invested capital (ROIC)
　Return on shareholders’ equity (ROE) 
　Ratio of shareholders’ equity to total assets
　Total return ratio (Note 6)
Non-Financial Data:
　Number of employees
　Ratio of overseas employees to total employees (%)
　Number of patents 
　Environmental contribution of products and services (t-CO2) (Note 7)
　CO2 emissions volumes from global production sites (t-CO2) (Note 8)
Notes: 1. U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2014, of ¥103 = $1. 
2. Operating income for ﬁscal 2005 includes an ¥11,915 million gain recorded on the return of pension assets to the government. 
3. EBITDA = Operating income + Depreciation and amortization 
4. Free cash ﬂow = Net cash provided by operating activities + Net cash used in investing activities 
5. Cash dividends per share represent the amounts applicable to the respective year, including dividends to be paid after the end of the year. 
6. Total return ratio = (Total dividends paid + Amount of Company’s own shares repurchased)  / Net income (loss) attributable to shareholders 
7. Environmental contribution: Reduction in CO2 emissions resulting from the use of Omron’s energy-saving or energy-creating products 
8. CO2 emissions volumes calculated based on fuel consumption and electricity purchase volumes for the Company

24,576

24,904

46.4%

49.2%

13.4%

10.2%

52.2%

10.4%

29.1%

13.9%

4,154

4,426

8.2%

9.1%

9.0%

58.4

56.1

¥   151.1

1,548.1

30.0

40.4%

9.9%

14.9%

10.1%

10.7%

61.6%

47.8%

27,408

61.1

4,538

Long-Term Management Strategy

Grand Design 2010 （GD2010）

FY2001 – FY2003

FY2004 – FY2007

1st Stage  Establishing a Proﬁt Structure

2nd Stage   Balancing Growth and Earnings

Concentrating on cost structure reform and restructur-
ing the Company as a proﬁt generating business

Achievements
•  ROE of 10%
•  Withdrew from unproﬁtable business, spun off 

Healthcare Business

•  Raised the level of corporate governance to the 

global standard

Reinforcing business foundations through aggressive 
investment in growth areas, including M&A, and  
cost reduction

Achievements
•  Increased EPS (Earnings per Share)  

from ¥110.7 (FY2003) to ¥185.9 (FY2007)

FY2008 – FY2010

3rd Stage  Achieving 
a Growth Structure

Fortifying of growth business  
(high proﬁtability)

Revival Stage (February 2009 to 
March 2011) Revised 3rd-stage 
targets due to an abrupt change in 
the business environment, imple-
mented cost reductions, and spun 
off Automotive Electronic Compo-
nents Business and Social Systems, 
Solutions and Service Business

8

¥   185.9

1,662.3

42.0

¥  (132.2)

1,355.4

25.0

¥     16.0 

1,391.4 

17.0 

¥   121.7 

1,421.0 

30.0 

¥     74.5

1,457.5

28.0

¥    137.2

1,667.0

37.0

¥   209.8

1,956.1

53.0

$   2.04

18.99

0.51

38.4%

8.6%

13.3%

10.4%

11.3%

59.7%

74.7%

35,426

65.7

5,717

34.8%

0.9%

6.2%

(7.6%)

(8.7%)

55.4%

ー

32,583

63.4

5,205

35.1%

2.5%

7.6%

1.0%

1.2%

57.6%

106.7%

36,299

68.1

5,218

37.5%

7.8%

11.5%

7.8%

8.7%

55.6%

25.2%

35,684

67.8

5,452

216,467

191,103

36.8%

6.5%

10.1%

4.8%

5.2%

59.7%

37.7%

35,992

67.7

5,959

211,364

183,953

37.1%

7.0%

10.4%

8.6%

8.8%

64.0%

27.0%

35,411

67.4

6,448

331,222

176,055

38.5%

8.8%

12.1%

11.3%

11.6%

65.8%

25.3%

36,842

69.1

6,635

671,953

207,426                    

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 proﬁt 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）

FY2011 – FY2013

FY2014 – FY2016

FY2017 – FY2020

GLOBE STAGE
Establishment of proﬁt and growth structures 
on a global basis

 Target

Result

¥750.0 billion ¥773.0 billion
¥68.1 billion
¥100.0 billion
38.5%
42.0%

 Net sales
 Operating income
 Gross proﬁt margin
 Operating income   
　margin
 ROE
Note: Target values are those at time of VG2020 announcement  

over 15%

13.3%

11.6%

8.8%

　(July 2011)

EARTH-1 STAGE
Establishment of “self-driven” growth structure

EARTH-2 STAGE

FY2016 
Targets

●  Net sales 
   over ¥900 billion
●  Operating income  
  over ¥90 billion
●  Gross proﬁt margin  
  over 40%
●  Operating proﬁt margin  
  over 10%
●  ROIC approx. 13%
●  ROE  approx. 13%
●  EPS   approx. ¥290 

FY2020 
Targets

●  Net sales  
  over ¥1 trillion
●  Operating income  
  over ¥150 billion
●  Operating proﬁt margin 
  over 15%

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どんな会社か？どこへ向かうのか？企業価値の成果企業価値を支える力財務セクションOmron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Highlights

Gross Proﬁt Margin 38.5％

ROIC11.3%

Gross profit margin

R&D expenses ratio

Operating income margin

Return on invested capital (ROIC)

Selling, general and administrative expenses ratio (excluding R&D expenses)

%
50

40

38.438.4

37.537.5

36.836.8

37.137.1

38.538.5

34.834.8

35.135.1

26.2

25.4

23.0

23.5

23.4

23.5

7.7

7.2

2.5

0.9

7.8

6.7

6.8

6.5

7.0

6.7

8.8

6.2

30

20

10

0

23.1

8.6

6.7

%
15

10

5

0

 –5

–10

10.4

11.3

7.8

8.6

4.8

1.0

–7.6

EPS ¥ 209.8

Earnings per share (EPS)
Dividends per share

Dividend payout ratio (right scale)

Cash and Cash 
Equivalents

¥90.3 billion 

Cash and cash equivalents

Interest-bearing liabilities

Yen

210

180

150

120

90

60

30

0

–30

–60

–90

–120

–150

209.8

%
125

100

75

50

27.0%

37

25.3%
53

25

0

185.9

106.4%

121.7

137.2

74.5

37.6%

42

22.6%

25

24.7%

16.0 17

30

28

–132.2

Billions of yen

100

75

50

25

0

90.390.3

74.774.7

53.0

51.751.7

46.646.6

45.5

45.345.3

55.755.7

40.640.6

36.6

18.2

18.8

5.6

0.5

(FY)

07

08

09

10

11

12

13

(FY)

07

08

09

10

11

12

13

(FY)

07

08

09

10

11

12

13

(FY)

07

08

09

10

11

12

13

Improved profitability due to production automation and reduction in 
the number of parts and materials contained in products. Looking 
ahead, we will continue to allocate research and development 
expenses at the 6%-to-7% level.

Each business division breaks down the elements that constitute 
ROIC, aims to improve the qualit y of management through a 
Down-Top ROIC Tree by setting each elements as key performance 
indicator (KPIs), and promotes enhanced profitability.

The dividend per share in fiscal 2013 marked an all-time high. The 
shareholder return policy will be changed from “a dividend payout 
ratio of more than 25%” to a policy “targeting a dividend payout ratio 
of 30%” by fiscal 2016.

To realize the establishment of a“self-driven growth structure” 
priority will be given to the allocation of cash to growth investments. 
This allocation is expected to amount to approximately ¥100 billion 
over the three years to fiscal 2016.

Ratio of Overseas 

Sales to Net Sales 55.4%

Japan
Greater China

Americas
Asia Pacific

Europe
Direct Exports

Billions of yen

800

763.0
763.0

773.0
773.0

44.6%

13.1%

18.4%

9.3%

1.5%

627.2
627.2

617.8
617.8

619.5
619.5

650.5
650.5

47.9%

524.7
524.7

50.3%

48.6% 47.8%

48.9%

600

400

13.4%

200

17.6%

49.3%

12.8%

11.7%

16.4%

14.8%

12.0%

12.1% 12.4%

13.1%

13.7% 13.5% 12.4%

12.0% 12.0% 14.7%
6.1%
6.4%
7.6%
3.0%
2.0%
2.0%

0

15.7% 16.3% 16.3%
8.4%

8.1%
1.9%

8.5%
1.8%

1.6%

(FY)

07

08

09

10

11

12

13

Sales are expanding in emerging countries, such as in the Asia Pacific 
region and Greater China, where economic growth is continuing.

10

Capital Expenditures ¥ 33.7 billion

Capital expenditures

Depreciation and amortization

33.7

25.1

28.3

28.3

23.2 23.0

22.6

22.5

27.0

19.5

Billions of yen
40

37.1

36.3

36.8

33.5

30

20

10

0

(FY)

07

08

09

10

11

12

13

Although capital expenditures were temporarily decreased due to the 
ef fects of global financial instabilit y, the amounts invested 
subsequently have exceeded depreciation and amortization.

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Non-Financial Highlights

Toward the realization of a sustainable society, Omron set out its “Green Omron 2020” environmental management 
vision and formulated its ﬁscal 2020 environmental targets in 2011.

Green Omron 2020 Environmental Targets
 (The Omron Group’s Environmental Targets for Fiscal 2020)

1. Improve carbon productivity by 30% compared with the ﬁscal 2010 level on a global basis
2. Environmental contribution > CO2 emissions from global production sites

■ Progress Made in Fiscal 2013

Net sales to CO2 emissions*1

3.73 millions of yen / t-CO2
15％ increase compared with ﬁscal 2010

＊１ Net Sales to CO2 Emissions: Net sales per ton of CO2 emitted

Environmental Contribution*2
Environmental contribution > CO₂ emissions 
from global production sites

Achieved target for 4 consecutive years
670,000 tons

CO₂ emissions volumes
Net sales to CO₂ emissions (right scale)

Millions of yen / t-CO₂

207,426

191,103

183,953

176,055

t-CO₂
225,000

200,000

175,000

150,000

125,000

3.233.23

3.373.37

3.693.69

3.733.73

4.204.20

5

4

3

2

1

(FY)

10

11

12

13

//

0
20（Target）

CO₂ emissions volumes

Environmental contribution

≈

0

t-CO₂
800,000

600,000

400,000

200,000

331,222

216,467

211,364

191,103

183,953

176,055

207,426

＊2 Environmental Contribution: Reduction in CO２ emissions resulting from the use of Omron’s 

energy-saving or energy-creating products and services

0

(FY) 10

11

12

13

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■ Aiming to Remain a True Medical Partner

Attendees at Omron Academies

More than 3,000 people

(Fiscal 2013: Middle Eastern and African countries)

With a view to improving the quality of life (QOL) 
in emerging countries, Omron does not only 
supply healthcare devices, but it also undertakes 
educational activities that include showing 
members of the general public the correct ways 
to use those devices and activities relating to 
targeted diseases. Designed to suit the 
conditions in each country, Omron Academy 
study groups are held for healthcare professionals, 
such as nurses and pharmacists.

Omron Academy

■ Practicing of the Omron Corporate Principles (TOGA)

2,519 entries
23,533 employee participants

In ﬁscal 2012, Omron launched the awards system 
known as The OMRON Global Awards (TOGA), which 
targets its employees around the world. By having its 
employees practice the Omron Principles, Omron will 
create across the globe an “Omron future of growth and 
prosperity” that features mutual learning and respect as 
well as increases the number of people who voluntarily 
take on challenges.

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671,953

Number of employee participants

Japan

Overseas

Number of people
14,000

12,000

11,604

10,000

9,224

12,379

11,154

8,000

(FY)

12

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For more details on TOGA, please refer to pages 62 and 63. 

Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Omron’s Management Team 

As of June 24, 2014

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Back row,
from the left:

Masayuki Tsuda

Eisuke Nagatomo

Kazuhiko Toyama

Eizo Kobayashi

Yoshifumi Matsumoto

Tokio Kawashima

Audit & Supervisory Board Member  
(Full-time)

Audit & Supervisory Board Member  
(Independent)
Member of the 　　　　　　　　
Corporate Governance Committee

Outside Director
Chairman of the  
Personnel Advisory Committee 
Chairman of the  
CEO Selection Advisory Committee
Chairman of the  
Corporate Governance Committee
Member of the  
Compensation Advisory Committee 

Outside Director
Chairman of the  
Compensation Advisory Committee
Vice Chairman of the  
Corporate Governance Committee 
Member of the  
Personnel Advisory Committee 
Member of the  
CEO Selection Advisory Committee

Audit & Supervisory Board Member  
(Independent)
Member of the  
Corporate Governance Committee

Audit & Supervisory Board Member  
(Full-time)

Front row,
from the left:

Koji Nitto

Akio Sakumiya

Fumio Tateishi

Yoshihito Yamada

Yoshinori Suzuki

Director and  
Senior Managing Ofﬁcer
Senior General Manager,  
Global Strategy Headquarters
Member of the  
Compensation Advisory Committee 

Director and Executive Vice President
Vice Chairman of the  
Personnel Advisory Committee
Vice Chairman of the  
CEO Selection Advisory Committee
Vice Chairman of the  
Compensation Advisory Committee 

14

Chairman of the Board
Member of the  
CEO Selection Advisory Committee

President and CEO

Executive Vice President and CFO
Member of the  
Personnel Advisory Committee 

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-Term Management Strategy “Value Generation 2020”

Message from the CEO

▶Value Generation

The name “Value Generation 2020 (VG2020)” reﬂects our commitment to achieving growth  

by generating value for customers and all of our other stakeholders.

▶Two Stages

Though the competitiveness of the global market is becoming increasingly intense, 

there are many business opportunities. We pursue growth by exploiting these opportunities. 

In VG2020, we have divided the decade from ﬁscal 2011 to ﬁscal 2020 into two separate stages,

and on that basis we will aim to achieve our goals. We have deﬁned the ﬁrst three years  

as GLOBE STAGE, during which we will seek out global growth opportunities for 

existing business ﬁelds. The next seven years is deﬁned as EARTH STAGE, 

a time for us to grow by meeting social needs relating to the sustainability of our planet.

FY2011

FY2014

FY2020

GLOBE STAGE

EARTH STAGE

Establishing proﬁt  
and growth structures  
on a global basis

Providing new value through  
new business ﬁelds

VG2020 Goals 
(fiscal 2020)

16

We will contribute 
to the global 
society through 
our business.

We aim to enhance our corporate 
value by effectively utilizing 
our “Sensing and Control” 
technologies and creating 
social needs that enable us 
to accomplish our goal of 
contributing to the global 
society through our 
business activities.

July 2014

Yoshihito Yamada
President and CEO

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Net salesover ¥1 trillionOperating incomeover ¥150 billionOperating income  margin15%Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
Omron formulates a management strategy every 10 years with the objective of achieving 
sustainable improvements in corporate value from a long-term perspective. When I became 
president in 2011, we launched our third long-term management strategy, Value Generation 2020 
(VG2020). Fiscal 2013 marked the end of the GLOBE STAGE, the ﬁrst three-year period of VG2020, 
and, in April 2014, we entered the EARTH STAGE. In recognition of this milestone, I would like to 
begin by looking back on the past three years and then to explain our future strategies. In the latter 
part of my message, I would like to share my views on management in the context of pursuing the 
long-term enhancement of corporate value.

1. Review of the GLOBE STAGE (Fiscal 2011 – Fiscal 2013)

During the GLOBE STAGE, we focused on 
uniting Omron to boost growth potential, 
proﬁtability, and responsiveness to change. 
We targeted the maximization of the Industrial 
Automation (IA) business, the expansion of 
sales in emerging countries, and the creation 
of new business opportunities, with an 
emphasis on the environmental solutions 
business. Other endeavors included advancing 
management based on return on invested 
capital (ROIC) and the global vertical-horizontal 
management system.
  As a result, in ﬁscal 2013, the GLOBE 
STAGE’s ﬁnal year, net sales totaled ¥773.0 
billion and operating income amounted to 
¥68.1 billion, setting new records for both 
ﬁgures for the ﬁrst time in six years. As we 
were able to quickly identify market changes 
as opportunities, double-digit growth rates in all 
businesses were achieved. ROIC and return on 
equity (ROE) also improved substantially.
  All in all, ﬁscal 2013 was a year in which 
we made great progress in transforming 

■ GLOBE STAGE: Management Indicators

Omron into a solid company with high growth 
potential, improved proﬁtability, and an astute 
ability to respond to change in the pursuit 
of enhanced corporate value. In regard to 
growth potential, sales increased greatly in 
targeted areas, such as emerging countries 
and environmental ﬁelds. Furthermore, the 
Automotive Electronic Components Business 
(AEC), the Social Systems, Solutions and 
Service Business (SSB), the Healthcare 
Business (HCB), and the backlight business 
all recorded impressive sales growth. We also 
focused on improving the gross proﬁt margin, 
one of the most crucial performance indicators, 
and, as a result, proﬁtability increased across 
all businesses. We reinforced our resilience to 
foreign exchange ﬂuctuations by accelerating 
overseas production and procurement. As a 
result, we were able to reduce the negative 
impact on operating income from a foreign 
exchange ﬂuctuation of ¥1 to the US$ from 
¥900 million in 2011 to ¥400 million at the end 
of March 2014. I am also proud to say that our 

Net sales

FY2013 (Actual)

¥773.0 billion

FY2010 (Actual)

¥617.8 billion

Operating income

¥68.1 billion

¥48.0 billion

Gross proﬁt margin

Operating income margin

ROIC

ROE

38.5％

8.8％

11.3％

11.6％

37.5％

7.8％

7.8％

8.7％

USD1 ＝ ¥100
EUR1 ＝ ¥134

USD1 ＝ ¥86
  EUR1 ＝ ¥114

18

management capabilities have improved, with 
more emphasis being placed on ROIC-based 
management and the global vertical-horizontal 
management system. In emerging countries, for 
example, business activities have become more 
efﬁcient due to the increased cross-functional 
support provided by corporate headquarters 
functions, such as ﬁnancial, administration, or 
legal services, to the business divisions. The 
establishment of regional head ofﬁces in India 
and Brazil, making for a total of seven regional 
headquarters, made it possible to achieve our 
goal of improved business efﬁciency.
  Of the targets initially laid out for ﬁscal 2013, 
which were established in ﬁscal 2011, we 

successfully exceeded the net sales target of 
¥750.0 billion. However, there are still tasks 
that remain. We fell short of our targets for 
the gross proﬁt margin, the operating income 
margin, and ROE, which were 42.0%, 13.3%, 
and over 15.0%, respectively. I believe these 
are all crucial indicators, and I am committed 
to improving them going forward. As for 
other tasks, building growth structures in 
the IA business is still a work in progress. In 
addition, we could have grown more through 
coordination with external organizations, such 
as through industry-academia collaboration and 
M&As. We are determined to improve upon 
these areas in the coming EARTH STAGE.

2. Strategies of VG2020’s EARTH-1 STAGE (Fiscal 2014  – Fiscal 2016)

We aim to create a “self-driven growth 
structure” in the EARTH-1 STAGE
The ﬁrst three years of the EARTH STAGE have 
been deﬁned as the EARTH-1 STAGE, with 
the remaining four years being designated the 
EARTH-2 STAGE.
  A main objective of the EARTH-1 STAGE 
is the establishment of a “self-driven growth 
structure.” During the GLOBE STAGE, we 
grew rapidly by taking advantage of tailwinds 
in China, other emerging countries, and the 

environmental solutions business. In the 
EARTH-1 STAGE, we plan to build a “self-
driven growth structure” that enables business 
to grow with or without tailwinds; Omron’s 
“Sensing and Control” technologies are 
core to this undertaking. These technologies 
are expected to strengthen business 
competitiveness and to become a driving force 
for growth in a manner that also contributes to 
society by resolving social issues. For example, 
the spread of production site automation in 

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■ EARTH STAGE Scenario

GLOBE STAGE

EARTH-1 STAGE

EARTH-2 STAGE

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New business strategy for the optimization society
New business strategy for the optimization society

Super-global growth strategy

Existing business strategy

Proﬁt structure reform

Global HR strategy

FY2011

FY2014 – FY2016

FY2020

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
emerging countries could allow people to 
devote their time to creative thinking. We 
also expect more demand for electric vehicles 
(EVs) and hybrid-electric vehicles (HEVs) due to 
society’s greater concern for the environment. 
Omron is contributing to the improvement 
of these vehicles’ performance by providing 
electric power steering controllers and the 
world’s smallest and lightest DC power relay. 
Our increased focus on the environmental 
solutions business should provide solutions 
to energy issues. In addition, there has been 
growing concern for safety issues resulting 
from the degradation of tunnel and bridge 
infrastructure. Omron is at the forefront 
of developing new technology to prevent 
unexpected collapses through monitoring 
vibration changes by sensors. Meanwhile, 
we continue to focus on healthcare areas by 
educating people on cardiovascular-related 
diseases and raising awareness of the 
importance of using blood pressure monitors 
and other devices as more and more people are 
expected to suffer from these diseases due to 
aging populations.
  Japan can be called a developed country 
with many social issues. We plan to develop 
businesses that will help resolve issues 
related to such areas as energy and social 
infrastructure in Japan ﬁrst and then to 
expand those solutions to the fast-growing 
Asian countries.

Three Basic Strategies 
and Operating Strategies
The EARTH-1 STAGE is a period in which we 
will build on the various initiatives implemented 
during the GLOBE STAGE, guided by three 
Basic Strategies. Under the ﬁrst of these, the 
Existing Business Strategy, we will continue 
to focus on strengthening the IA business. 
Speciﬁcally, our plans include advancing 
marketing capabilities for products launched in 
the past three years and growing the business 
by leveraging the Automation Centers*1 we 
have established and our expanded sales 
engineer staff.
*1 Automation Centers: Engineering centers that help realize optimal automation

  Under the second strategy, the Super-
Global Growth Strategy, we will build stronger 
infrastructure with the aim of achieving 
dynamic business growth in “wider Asia,” 
which encompasses China and other Asian 
countries. We consider growing businesses 
in ASEAN countries and India as two main 
business areas, in addition to our already 
growing business in China. The building of 
foundations for growth is essential to achieve 
our goals, and we plan to enhance logistics 
infrastructure and strengthen sales and 
marketing efforts. 
  The third strategy, the New Business 
Strategy for the Optimization Society, aims to 
generate new businesses in ﬁelds related to the 
environment, industry, society, and lifestyles. As 
previously mentioned, we will continue to focus 
on businesses that help resolve social issues. 

■ EARTH-1 STAGE:  Policy and Targets (Fiscal 2016)

Policy

Establishment of a “self-driven growth structure”

Net sales

Over ¥900.0 billion

Targets*3
(FY2016)

Gross proﬁt margin

Operating income margin

ROIC*2

ROE

EPS*2

Over 40%

Over 10%

Approx. 13%

Approx. 13%

Approx. ¥290

*2 Newly introduced medium-term targets
*3 Assumed exchange rates: USD1 = ¥100, EUR1 = ¥135

20

In regard to the Operating Strategies that 
support the three Basic Strategies, we will 
continue to implement the Proﬁt Structure Reform 
and the Global Human Resources Strategy. 
 I will discuss our human resources strategy later.

Medium-Term Performance Targets
For ﬁscal 2016, the ﬁnal year of the EARTH-1 
STAGE, we are targeting more than ¥900.0 billion 
for net sales, 40% or higher for the gross proﬁt 
margin, 10% or higher for the operating income 
margin, and approximately 13% for ROE. As 
we are mindful of the cost of capital and aim 

to live up to shareholder expectations over the 
medium-to-long term, we set the new targets of 
approximately 13% for ROIC and approximately 
¥290 for earnings per share (EPS).
  All Omron businesses are positioned 
in growth ﬁelds, and we have a business 
foundation capable of responding to such 
issues as population aging, environmental 
problems, and other global issues. I am 
conﬁdent in Omron’s long-term growth 
potential and ability to establish a “self-driven 
growth structure” during the EARTH-1 STAGE.

3. Management Indicators, Improvement of Shareholder Value

Entrenchment and Advancement 
of ROIC-Based Management
As I said previously, we set our ﬁrst medium-
term target for ROIC of approximately 13% 
to be achieved in ﬁscal 2016. We will work 
toward realizing this goal along with our existing 
target for ROE. ROIC-based management is 
entrenched throughout Omron. ROIC is not only 
used in the performance-linked compensation 
system for senior executives, but it is also used 
in managing each business by using contributing 
factors shown in a Down-Top ROIC Tree as key 
performance indicators. We established the 
position of Chief Financial Ofﬁcer (CFO) in ﬁscal 
2013, and we will continue to work together 

to improve the quality of various initiatives and 
manage the cost of capital and cash ﬂows.

Improvement of Shareholder Value
During the three years of the GLOBE STAGE, 
we were able to achieve an increase in EPS, 
from ¥122 to ¥210, and a great improvement 
in ROE. Further, Omron’s stock price rose 82%, 
with a 77% increase in dividends. Therefore, 
the total shareholder return (TSR) was 
87% over the three-year period. This rise is 
particularly impressive when compared with the 
average performance of companies listed on 
the First Section of the Tokyo Stock Exchange. 
During the EARTH-1 STAGE, we will continue 

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■ Shareholder Value Improvement under GLOBE STAGE

EPS

ROIC

ROE

Share Price

Dividend Per Share

3-Year TSR*4 (Total Shareholder Return)

GLOBE STAGE

FY2013 (Actual)

FY2010 (Actual)

＋ 72％

＋ 3.5%P

＋ 2.9%P

＋ 82％

＋ 77％

87％

¥210

11.3％

11.6％

¥122

7.8％

8.7％

¥4,260 (year-end)
Record-high ¥4,730 
on January 7, 2014

¥2,338 (year-end)

¥53

―

¥30

―

*4 Total shareholder return is calculated on the assumption that dividends are not reinvested in additional share purchases.

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
pursuing an increase in EPS along with other 
performance indicators in order to further 
improve shareholder value.

In regard to dividends, we aim to increase the 

dividend payout ratio to 30% by ﬁscal 2016, 
compared with the previously targeted 25% 
or higher.

4. Strengthening of Management Capacity

The Omron Principles and Management
The Omron Principles, our corporate philosophy, 
have been internalized by all Omron employees. 
We place special importance on our corporate 
core value, “Working for the beneﬁt of society,” as 
well as our corporate motto, “At work for a better 
life, a better world for all.” In our management 
principles, we value innovations driven by social 
needs and a challenger’s spirit. The OMRON 
Global Awards (TOGA) provides an opportunity 
for employees to put their ambitious spirit to the 
test. In 2014, the award’s second year, 23,533 
employees, roughly two-thirds of our global 

employee base, participated in this initiative. In 
order for us to realize the global expansion of 
our business and to promote the diversity of 
human resources, the Omron Principles play an 
important role as the binding force that unites all 
employees. My continued focus will be to instill 
the Omron Principles and to implement intrepid 
and sustainable management.

Shareholder Engagements
Since becoming president, I have spent a great 
deal of meaningful time with our shareholders 
and other investors. Whenever possible, I pass 

TOGA award ceremony

22

on constructive feedback to the management 
team to be discussed and reﬂected in 
management. One example was the revision 
of the executive compensation system that 
was proposed at the June 2014 shareholders’ 
meeting. We developed this new compensation 
system with the goal of maximizing shareholder 
value over the long term. Speciﬁcally, we 
introduced medium-term, performance-linked 
bonuses that will be adjusted based on progress 
toward achieving the consolidated operating 
income target for the EARTH-1 STAGE. We also 
introduced medium-term, performance-linked 
stock options, a system with exercise rights 
tied to the medium-term target for consolidated 
net sales and separate from the compensation 
system*5. The Compensation Advisory 
Committee will continue to review all executive 
compensation proposals to ensure transparency, 
impartiality, and rationality.

*5 For more  information regarding  new executive compensation systems, 

please refer to page 70.

Reinforcement of Operating Foundations
We have been implementing the Global 
Human Resources Strategy, such as assigning 
local employees to management positions at 
overseas operating sites, which is critical for the 
globalization of management. In 2011, the ratio 
of senior management positions overseas ﬁlled 
by local employees was 31%. By 2013, this 
ratio had increased to 42%. We are also actively 
selecting and educating the next-generation of 
top-rank managers. Training programs for high-
potential junior employees will continue as well.
Further, Omron is strengthening technological 
capabilities to create new innovations and realize 
sustainable management.
  Omron works to realize its goal of contributing 
to the global society by resolving social 
issues through its businesses while achieving 
sustainable growth. We are determined to 
enhance corporate value and to become a 
company that people around the world require 
and have high expectations for.

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
Message from the CFO

EARTH-1 STAGE:
Three Years of Prioritized 
Growth Investment

In April 2013, Omron established the position of Chief Financial Ofﬁcer (CFO). This move was an 
attempt to improve portfolio management and expedite decision making and to better respond 
to today’s volatile operating environment.
  As the ﬁrst CFO, I worked to fulﬁll this responsibility throughout my ﬁrst year and while 
attempting to ﬁnd my own unique style in this role.
  The Chief Executive Ofﬁcer (CEO) is the head commander of Omron. Meanwhile, I, as CFO, 
control ﬁnancial management, including investment and shareholder return policies.

Placing Growth Investment First

During the GLOBE STAGE, we successfully 
strengthened our ability to generate cash by 
improving the profitability of each of our busi-
nesses. In fact, free cash flow amounted to 
¥47.9 billion in fiscal 2013, up ¥23.3 billion 
from fiscal 2012, and net cash totaled approx-
imately ¥90.0 billion. What is most impressive 
is that we accomplished these figures while 
conducting forward-looking growth invest-
ment. We are committed to establishing a 
growth structure for supporting future devel-
opment in the EARTH-1 STAGE. We will allo-
cate cash on hand as well as the cash to be 
generated continually into the future to three 

areas: growth investment, dividends, and 
share buybacks. Growth investment will be of 
particular priority.
  Omron has designated the three-year period 
from fiscal 2014 to fiscal 2016 as the EARTH-1 
STAGE. During this period, we plan to invest 
approximately ¥100 billion in the establishment 
of a “self-driven growth structure.” Specifically, 
we will expand sales channels in the ASEAN 
region, India, South Korea, and other parts of 
Asia to develop operations in these areas into a 
core business pillar alongside those in China. In 
addition, we will accelerate new business de-
velopment in the industrial, social, lifestyle, and 
environmental fields. Omron will also collabo-
rate with other companies and academia.

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July 2014
Yoshinori Suzuki
Executive Vice President and CFO

FY2010

FY2011

FY2012

FY2013

Net sales

Operating income

Operating income margin

Free cash ﬂow*1

Cash and cash equivalents

Total interest-bearing liabilities

Net cash

617.8

48.0

7.8%

21.7

74.7

45.5

29.2

619.5

40.1

6.5%

5.5

45.3

18.8

26.5

*1 Net cash provided by operating activities + Net cash used in investing activities

ROIC

ROE

EPS

7.8%

8.7%

¥121.7

4.8％

5.2%

¥74.5

*2 Assumed exchange rates: USD1 = ¥100, EUR1 = ¥135 

650.5

45.3

7.0%

24.6

55.7

5.6

50.1

8.6％

8.8%

FY2014 
(Plan)*2

Billions of yen

FY2016 
(Plan)*2

800.0

over 900.0

74.0

9.3%

over 90.0

over 10%

ー

ー

ー

ー

ー

ー

ー

ー

773.0

68.1

8.8%

47.9

90.3

0.5

89.8

11.3%

approx. 12%

approx. 13%

11.6%

approx. 12%

approx. 13%

¥137.2

¥209.8

¥231.7

approx. ¥290

Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
  With regard to dividends, we raised the deﬁned 
minimum for the dividend payout ratio from 20% 
to 25% in ﬁscal 2013. We redeﬁned this target 
with the start of ﬁscal 2014, and we now aim to 
raise this ratio to 30% by ﬁscal 2016.
  To create returns for shareholders, we will 
use the capital surplus accumulated over the 
years to conduct share buybacks as the situa-
tion allows.
  Our current sound financial position is what 
enables aggressive business expansion. We 
can therefore focus on maintaining a strong 
balance sheet.

Utilizing a Unique Down-Top 
ROIC Tree

Omron’s management emphasizes capital efﬁ-
ciency, employing indicators like return on invest-
ed capital (ROIC) and return on equity (ROE) as it 
works to further improve corporate value.
  ROIC is a highly viable indicator for evaluat-
ing each business division fairly because it is 
not influenced by differing business character-
istics and scales, as is the case with profit 
amount or profit margin based evaluations.  
We commonly use ROIC internally to realize  
higher-quality portfolio management. Now,  
we are advancing improved profitability by em-
ploying an approach that examines a Down-
Top ROIC Tree for each business, distinguish-
es the factors that contribute to its ROIC, and 
identifies these factors as key performance 
indicators (KPIs). As KPIs, we use both profit 
and loss influencing factors, such as produc-
tion cost reductions in manufacturing divi-
sions, and balance sheet indicators, such as 

KPI

Management Structure Tree

Parts standardization
Target cost of sales
% of overseas production

Gross proﬁt margin

Total number of staff in Japan

SG&A margin

Overseas variable cost

Operating income margin

ROS

vs. hedge target rate

ROI / Impairment risk

Non-operating proﬁt/loss

Effective tax rates

Net income margin

ROIC

Inventory (months / value)
Slow-moving inventory 
　(months / value) 
Disposal
Credits and debts (months)

ROI 
Cash on hand (month)  
Fund procurement capacity

Working capital turnover

Fixed assets turnover

Invested Capital 
Turnover

Net cash

Total Assets 
Turnover

ROA

noncurrent assets turnover. In this way, we 
are improving ROIC. Meanwhile, we aim to 
increase responsiveness to operating environ-
ment changes through onsite application of 
the plan-do-check-act (PDCA) cycle. I too am 
working to develop infrastructure to help 
quantify relevant factors and make the appli-
cation of this cycle easier.

In fiscal 2013, ROE was 11.6%, up 2.8 
percentage points, largely due to higher net 
income. Also, Omron was included in the 
JPX-Nikkei Index 400, a new index created in 
2013. Companies are selected for inclusion in 
this index based on performance, governance, 
and other criteria. ROE is given importance 
above all else. For this reason, I am most proud 
of this accomplishment because it represents a 

high evaluation of Omron’s efforts to improve 
capital efﬁciency.
  With the start of fiscal 2014, we disclosed a 
new earnings per share (EPS) target for fiscal 
2016. We did this to demonstrate to all 
shareholders our unwavering resolve to 
remain ever-mindful of shareholder value as 
we construct growth and profit structures.
  We will keep working to further improve 
management quality by using key management 
indicators. Specifically, over the three-year peri-
od through to the end of fiscal 2016, we will 
decide on and carry out effective investment 
to ensure the establishment of a “self-driven 
growth structure.” We would appreciate your 
continued support and confidence in Omron.

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
Special Feature 1

Global Vertical-Horizontal Management
OMCA Plays a Central Role in Linking Business

One example of such links can be seen in OMCA’s support for setting up a new factory in 
Mexico. To aid this effort, OMCA provided its expertise with regard to trade issues, customs 
rules, and difficult regulatory matters. 

Support for the Launch of AEC’s Mexican Factory

Special Feature1　Global Vertical-Horizontal Management

Headquartered in Hoffman Estates, a northwestern 
suburb of Chicago, in the U.S. state of Illinois, 
OMRON MANAGEMENT CENTER OF AMERICA, 
INC. (OMCA), manages Omron’s operations in the 
Americas. The company’s jurisdiction encompasses 
Canada, United States, Mexico, Brazil, and the rest 
of Latin America. This region is massive in terms of 
scale, and its sales are expected to amount to 
approximately ¥110.0 billion (US$1.1 billion) in ﬁscal 
2014, roughly 15% of Omron’s projected net sales 
for this year.  OMCA supports Omron’s businesses 
in the Americas, helping to maximize their results, 
particularly with regard to advancing VG2020, the 
long-term management strategy. In particular, 
support is offered for this crucial region through 
due diligence and by providing legal, ﬁnancial, tax, 
and human resources services.
  OMCA Chairman, President and CEO Blakeway 
is committed to helping OMCA play a central role 
in linking businesses and divisions through  
Omron’s global vertical-horizontal management 
system, primarily in the Americas but also in other 
parts of the world.

Nigel Blakeway　

OMRON MANAGEMENT 

CENTER OF AMERICA, INC. 

Assistance through Horizontal Links

Mexico’s automobile industry is booming, with 
growth rates as high as 10% per annum. As a 
result, Mexico is now ranked the world’s No. 8 
in automobile production. At present, more than 
1,000 automotive component manufacturers 
have set up operations in the country, and this 
number is expected to grow. Omron is aggres-
sively developing operations in this growth 
market. In February 2012, we established our 
Mexican manufacturing company, Components 
Electronics OEDS De Mexico (OEDS). Going 
forward, OEDS will be positioned as a central 
base for automobile operations due to its close 
proximity to automotive markets in the Ameri-
cas and Europe and to Mexico’s beneficial free-
trade agreements.
  The establishment of the OEDS plant was 
a miraculous feat. While building such a plant 
would normally require 12-to-18 months, custom-
er demand necessitated that this plant be ﬁnished 
in only 6 months. This nearly impossible task was 
surmounted by a committed project team and 

their unwavering sense of determination.

In 2010, the Automotive Electronic Compo-
nents Business (AEC) was spun off from Omron 
and it is now practicing autonomous manage-
ment through a vertical link in Omron’s global 
vertical-horizontal management system. None-
theless, corporate headquarters functions are 
providing ever-more extensive support to boost 
AEC’s operational efficiency. In establishing the 
OEDS plant, for example, OMCA provided its 
assistance through a horizontal link. Specifically, 
OMCA smoothed contracting with local compa-
ny, supported local financing efforts, and provid-
ed other legal and financial assistance.
  Even after the plant’s production line started 
up, OMCA continued to offer support, helping 
communicate the Omron Principles and other-
wise linking the Group together. Also, outside 
of Mexico, vertical and horizontal links are 
maintained throughout AEC to realize ongoing 
improvements in efficiency.

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Mexican manufacturing company established in February 2012

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Integrated Report  2014Omron Corporation 
 
 
 
 
 
 
 
 
 
 
Assistance through Horizontal Links

OMCA has also leveraged its resources and its expertise in other areas, as it supported the  
development of an occupational safety management system at a factory located in Dalian, China, 
outside of its jurisdiction.

Cross-Regional Exchange of Expertise

Support in Reconstructing the Safety Management System at HCB’s Dalian Plant

OMRON DALIAN CO., LTD. (OMD), employs 
approximately 2,500 workers and produces 
roughly 70% of the blood pressure monitors and 
other healthcare and medical devices Omron 
sells worldwide.

In 2012, an enterprise risk analysis was 

conducted at the Dalian Plant by an assessment 
team consisting of members from both the 
Healthcare Business (HCB) and the corporate 
legal affairs department. The purpose of this 
analysis was to assess critical business risks. 
It was determined that production line safety 
needed to be improved and that employees 
required safety education. A cross-organization-
al task team was thus assembled to reconstruct 
OMD’s safety management system. The team 
consisted primarily of OMD staff, but specialists 
were also called in from OMCA, regional man-
agement company OMRON (CHINA) Co., LTD ., 
the headquarters of HCB, the corporate legal af-
fairs department, and safety business divisions 
of the Industrial Automation Business. 

  The success of a safety management sys-
tem hinges on the employees that work on the 
ground. It is crucial that the practices of regular 
occupational health and safety and machine 
safety risk assessment become thoroughly en-
trenched in these employees’ minds. For this 
reason, safety education is of utmost importance. 
In the United States, Omron’s operations have 
a high level of occupational health and safety 
management systems in place, and robust en-
vironmental, hygiene, and safety education pro-
grams are provided. OMCA was therefore able to 
dispatch specialists on these matters to aid OMD 
not only in inspecting its plant but also in develop-
ing education programs on these subjects.
  This cross-regional exchange of expertise 
is a prime example of Omron’s global vertical-
horizontal management system at work. Going 
forward, we intend to expand the Dalian Plant’s 
safety management initiatives to other divisions.

Special Feature1　Global Vertical-Horizontal Management

  OMCA’s support and advance of Omron’s 
global vertical-horizontal management system 
can also be seen in the restructuring of a manu-
facturing subsidiary that was used by the Elec-
tronic and Mechanical Components Business. 
This subsidiary boasted a strong technological 
base but no longer ﬁtted strategically into the 
overall scheme of Omron’s business portfolio. In 
2013, OMCA undertook the restructuring of the 
subsidiary, providing human resources and legal 
support and ﬁnally divesting it as a management 
buyout. Moreover, this restructuring was under-
taken without incurring any losses or causing 
any inconveniences to the employees of the 
facility.
  Another example concerns a logistics center 
in North America that Omron was directly man-
aging roughly three years ago. To improve efﬁ-
ciency and reduce overhead, OMCA decided to 
utilize the services of a third-party logistics  

company to which it could outsource all ware-
house operations. OMCA successfully transi-
tioned from operating the warehouse itself, and 
the resulting efﬁciencies, costs savings, and 
delivery improvements to customers have 
gained recognition.
  OMCA also serves as an advocate for the 
Omron Principles in the Americas. These princi-
ples are the central binding force for all Omron 
Group companies, and they play a part in ex-
panding local hiring in emerging markets as well 
as in post-merger integration (PMI). According 
to Blakeway, “A huge part of PMI is just how to 
integrate the right mind-set and the right code 
of conduct into the Omron world.”
  Luckily, problems are rarely faced in communi-
cating the Omron Principles within North Ameri-
ca. However, going into South America and 
other areas where customs are different than 
employees are accustomed to can sometimes 

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Omron Dalian Plant

30

Safety education for employees

CEO Yamada speaking with local employees in Brazil

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
present difﬁculties. An important part of entering 
such markets is to have respect for the individu-
als and companies there. CEO Yamada  is 
known to excel in this respect. Moreover, 
OMCA tries to create an open-door policy to 
make sure all employees can speak to any of 
their managers if they have any questions or 
concerns. In fact, CEO Yamada has personally 
visited sites in Brazil and Mexico and spoken 
directly with employees. Such is the level of 
openness at Omron; regular employees can 
speak directly with the CEO. To ensure appropri-
ate actions whenever a new endeavor is under-
taken in a new market, the Omron Principles are 
always used as the standard.

  The Omron Principles clearly deﬁne the  
standards for Omron’s businesses. OMCA is,  
of course, highly devoted to these principles, 
and Blakeway himself states, “I joined Omron 
because of our company principles; not only  
did I want to work with a company of great 
integrity, but I wanted to work through an  
organization that respects its employees and 
respects its stakeholders.” Moved by the spirit 
of the principles, OMCA is actively contributing 
to the local society and addressing social issues 
through its business. In regard to social contri-
butions, OMCA is advancing a robust community 
outreach program through the dedicated non-prof-
it organization Omron Foundation Inc. This founda-
tion provides both time and money to support a 
wide range of activities, with a particular emphasis 
placed on Japanese culture and language educa-
tion and engineering education. A very notable 
contribution was the establishment of the Omron 
Robotics and Mechatronics Laboratory at Northern 
Illinois University’s College of Engineering and 
Engineering Technology. In these ways, OMCA is 
making the Omron Principles apparent in society 
alongside its business presence.
  Looking forward, OMCA is now amply poised 
to strengthen its position in the Americas as it 
embarks on the EARTH-1 STAGE, which targets 
ongoing growth and social contributions. OMCA 
will support and guide businesses in the Ameri-
cas to nurture them into integral parts of Omron’s 
global operations. 
  Closing with Blakeway’s own words, “We  
have delivered in the GLOBE STAGE what we 
promised to do. So, I’m asking for the continued 
support of our stakeholders to allow us to deliv-
er on the strategies in the EARTH STAGE.”

32
32

Special Feature 2

More Advanced

Social Need Creation

Resolving Social Issues with Forward-Thinking Technology

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どんな会社か？どこへ向かうのか？企業価値の成果企業価値を支える力財務セクションOmron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Technology Investment Guided by Predictions of the Future

Technologies Supporting the Achievement of VG2020

Special Feature 2　More Advanced

Omron founder Kazuma Tateishi believed that true managers were those who determined what the 
future would be like. He believed that a company’s management required two attributes: the 
creative ingenuity to evolve technologies and the ability to predict the future. Omron strives to 
equate its name with technology and to quickly identify the needs of the future society. To aid this 
endeavor, in 1970 Omron developed its own predictive theory, called the SINIC theory, as its 
compass for determining the direction of management.

SINIC理論では、科学と技術と社会との間には円環論的な関係があり、次の2つの方向から相互にインパクトを与え合っているとしています。1つの方向は、
新しい科学が新しい技術を生み、それが社会へのインパクトとなって変貌を促すというもの。もう1つの方向は、逆に社会のニーズが新しい技術の開発を促
し、それが新しい科学への期待となるというもの。この2つの方向が相関関係により、お互いが原因となり結果となって社会が発展していくという理論です。

経 営の 羅 針 盤― S I N IC 理 論

Compass Determining 
the Direction of Omron’s 
Management̶The 
SINIC Theory

According to the SINIC theory, 

science, technology, and society 

share a cyclical relationship, 

mutually impacting and 

inﬂuencing each other in two 

distinct ways. In one direction, 

scientiﬁc breakthroughs yield new 

technologies that help society to 

advance. In the other direction, 

social needs spur on technological 

development and expectations for 

new scientiﬁc advancement. 

Thus, both of these factors affect 

each other in a cyclical manner, 

propelling further social evolution.

SINIC DIAGRAM
Seed-Innovation to Need-Impetus Cyclic Evolution

A g ri cul

tura Society

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Handicraft

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Technology

Innovation

Impetus

Need

Progress-
oriented
motivation

Science

Society

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Technics
imitive
eligio

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Seed
Innovation
Need
Impetus
Cyclic Evolution

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Bionetics

Psycho-Biologic
Technics

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Meta-P

Guided by the SINIC theory, Omron has pursued its mission of standing at the forefront of innovation, 
consistently creating the products and markets necessary to each coming era by predicting social 
trends and changes. Over the years, we have continued to allocate a certain portion of revenues to 
research and development, without being inﬂuenced by the operating environment. This is how    
Omron has evolved its “Sensing and Control” technologies (see diagram below).

Human body data

Human will 
and thoughts

Location and 
conditions of
a person or 
an object

information

Sensing
&
Control

IN

Gathers only the 
required data

OUT

Converts 
into value

Industry

Safety and 
Security

value

Environ-
ment

Society

During VG2020’s EARTH STAGE, Omron will 
identify social needs related to sustainability of 
the global environment. Speciﬁcally, we will con-
duct eco-friendly businesses that help combat 
issues like global warming, resource depletion, 
and energy problems. In addition, we will enter 
new businesses that respond to various social 
needs, such as the desire for safer social infra-
structure, particularly with regard to aged bridg-
es and tunnels, and growing healthcare demand 
resulting from the aging of the population.
  To support progress in this management 
strategy, we will strengthen capabilities in 10 
areas of technology, which include Omron’s core 
technologies, to maximize performance and cost 
efﬁciency. In addition, equipment must be easy 
to use while also being capable of recognizing 
people and their actions and responding accord-
ingly. To grant these abilities, we have installed 
the new concept of “Think” into our core tech-
nologies. This combination allows for the need-
ed data to be extracted from a range of informa-
tion and processed in a more intelligent way to 
create greater value.
  Sensors do not just measure physical quantity; 

they present some sort of “meaning” to be 
derived using our knowledge. For example, the 
big data collected from sensors on bridges or 
buildings can be combined with our knowledge 
to evaluate their condition and determine the 
appropriate maintenance timing. Similarly, con-
trollers do not merely perform systematic mo-
tions with high speed and precision. Rather, 
they can be used to strategically manipulate 
equipment setups, processing routes, and ma-
chinery actions to improve efﬁciency. At manu-
facturing sites, our controllers realize optimal 
operating balance with the elimination of 
tradeoffs through control that adds an element 
of ecology to the commonly pursued beneﬁts of 
quality, cost, and delivery (QCD).
  Omron is creating an“Optimization Society” 
that maintains harmony while creating an opti-
mal balance between people and machines, 
nature, and society. For the coming “Autono-
mous Society,” Omron is evolving its “Sensing & 
Control + Think” technologies to provide new 
value in the areas of safety, security, 
healthcare, and the environment.

10 Areas of Technology Advancement

■ “Sensing & Control + Think” technologies

Extracting needed data from a range of information and processing this data in a more intelligent 
way to create greater value

1. Sensing Technology

2. Power electronics Technology

3. Control Technology

4. Systems Intelligence Technology

■ Utilization of open technologies

Creating technological innovations through collaborative development utilizing original technologies and 
open technologies while conducting ongoing R&D ventures pertaining to widely applicable technologies

5. Network Technology

6. Embedded Technology

■ Methodology and facility technologies

Methodology and facilities designed to realize greater productivity

7. Materials and Methods

8. Equipment and Processes

“Sensing & Control 
+ Think”

Sensing: Physical quantity

Meaning
Sensing

● Understand intent 

of motion

● Decipher human will
● Predict future

Control: Operational quantity

Thought-
based
Control

● Enable easy conﬁguration
● Facilitate human actions
● Eliminate tradeoffs

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35

Specified data 
of a person or 
an object

Natural 
environment 

Small

Fast

Easy

Highly 
Reliable

Efficient

Optimal

Health

34

Lifestyles

■ Development efﬁciency enhancement

Through development process innovation, we aim to greatly enhance technology development 
efﬁciency in order to be able to create new products with overwhelming speed

9. Digital Engineering

*1 Common, Module, Option

10.

CMO*1 Method and Development Processes

Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
New Technological Applications for Resolving Social Issues

History of Resolving Social Issues with Forward-Thinking Technology

Special Feature 2　More Advanced

OMRON TOTAL FAIR Held in China: 
Latest Technologies for the Chinese Market
Pursing growth in emerging markets is one of the 
basic strategies of VG2020, and China is positioned 
as a particularly crucial market. As part of our 
strategies, we held the OMRON TOTAL FAIR 
(OTF)̶a private exhibition designed to propose 
new value to the Chinese society̶in Beijing, 
Shanghai, and Guangzhou, in October and Decem-
ber 2013 and March 2014, respectively.
  OTF ’s exhibits were centered on Omron’s   
core “Sensing and Control” technologies, and 
“Think” technologies were also incorporated. At 
OTF, we proposed products and services that 
provide solutions to the issues currently faced 
by China in the ﬁelds of industry, the environ-
ment, energy, society, and living conditions.

the ball’s trajectory and speed through 3D image  
processing. The robot continues the rally by 
employing such techniques as returning balls 
at the same speed as its opponent’s shot and 
otherwise matching its movements to the other 
player’s skill level.

Future Advances in  

“Sensing & Control + Think”

As personnel expenses rise in China, the need 
for technologies for reducing labor requirements 
and improving efﬁciency will increase. The tech-
nological concept of machines that respond to 
human motions has obvious applications in 
industry. At the same time, this concept will 
likely be used in other ﬁelds as well, such as 
for nursing and housework robots.
  Omron founder Kazuma Tateishi used to say, 

Robot That Comprehends Human Movements:  

“To the machine, the work of the machine, to 

“Table Tennis Rallying Robot”

At OTF, our Table Tennis Rallying Robot gar-
nered particular attention. This robot was de-
signed to make it easy for anyone to under-
stand Omron’s“Sensing & Control + Think” 
technologies. The robot works by analyzing the 
movements of the opponent player as well as 

man the thrill of further creation.” We continue 
to hold this philosophy close to our hearts more 
than half a century later. Omron believes that, 
with its future-shaping technologies, it is 
not far from creating a society in which this 
philosophy is realized.

36

World ’s
 First

World ’s
 First

World’s 
Smallest 
and 
Lightest

Kita-Senri Station of Keihanshin Kyuko Railway 

(currently Hankyu Railway, circa 1967)

Non-Contact Switch with Long Lifespan

In 1960, Omron utilized transistor methodology to create 

the world’s ﬁrst non-contact switch. The conventional 

contact switches used at that time had limits in terms 

of usage periods. Omron’s non-contact switch detected 

changes in metal switch positions based on magnetic 

ﬂuctuations. This functionality greatly extended the life span 

of switches, thereby making large contributions to the 

development of mass-produced machinery. This innovation 

was born out of a team of seven young engineers with an 
average age of 20.

Fully Unmanned Train Station System for  
Alleviating Commuter Rush Congestion

In 1967, Omron created the world’s ﬁrst fully unmanned 

train station system by combining automated ticket vend-

ing machines and automated ticket gates. While punch-

hole systems existed, this was the ﬁrst magnetic system. 

Station workers thus became free from punching tickets. 

This system also resolved the social issue of commuter 

rush congestion.

Nebulizer Usable from Various Angles

Always striving to create products that offer ease to patients, 
Omron successfully launched the world’s smallest*1 and 
lightest*1 silent nebulizer*2 in 2002. The atomizing unit of 
this device employed Omron’s unique mesh technologies 

to satisfy the need for a nebulizer that could be used 

anywhere, anytime with ease.

＊1 At time of launch in 2002
＊2 Nebulizer: A medical device that allows patients to inhale medicine 

to treat asthma and other respiratory diseases.

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
■ Operating income / Operating income margin

■ Capital expenditures / Depreciation and amortization

■ R&D expenses

At a Glance

Industrial 
Automation 
Business 
(IAB) 

Electronic and
Mechanical 
Components 
Business 
(EMC)

■ Net sales

Billions of yen
300
250
200
150
100
50
0

■ Net sales

Billions of yen
120

271.9

270.8

263.0

291.7

300.0

Billions of yen
50

40

30

20

10

0

41.1

15.1%

35.4

13.1%

38.8

40.0

31.3

11.9%

13.3%

13.3%

(FY)

10

11

12

13

14
 (Forecast)

(FY)

10

11

12

13

14
 (Forecast)

■ Operating income / Operating income margin

97.7

101.0

Billions of yen
12

11.0%

90

60

30

0

81.2

83.0

84.1

(FY)

10

11

12

13

14
 (Forecast)

9

6

3

0

8.9%

9.1%

8.7

9.2

9.0

6.2%

5.1

5.2%

4.4

(FY)

10

11

12

13

14 
(Forecast)

Automotive 
Electronic 
Components
Business 
(AEC) 

■ Net sales

Billions of yen
120

84.3

85.0

97.6

126.6

128.5

Billions of yen
10

■ Operating income / Operating income margin

(FY)

10

11

12

13

14 
(Forecast)

8

6

4

2

0

9.1

9.2

7.2%

7.2%

4.2

4.9%

2.7

3.2%

5.0

5.1%

(FY)

10

11

12

13

14
 (Forecast)

Social Systems, 
Social Systems, 
Solutions 
Solutions 
and Service 
and Service 
Business
Business
(SSB)
(SSB)

■ Net sales

Billions of yen
100

■ Operating income / Operating income margin

82.7

85.5

Billions of yen
8

75

50

25

0

63.8

57.2

68.8

(FY)

10

11

12

13

14
 (Forecast)

6

4

2

0

7.6%

6.5

6.7%

5.6

2.6%

1.7

4.2%

2.9

0.2%

0.1

(FY)

10

11

12

13

14
 (Forecast)

Healthcare 
Business 
(HCB) 

■ Net sales

Billions of yen
100

■ Operating income / Operating income margin

98.5

89.3

Billions of yen
8

75

50

25

0

60.6

62.4

71.5

(FY)

10

11

12

13

14
 (Forecast)

6

4

2

0

7.5

8.0

8.5%

8.1%

6.7%

4.1

4.7%

2.9

6.2%
4.4

(FY)

10

11

12

13

14
 (Forecast)

%
20

16

12

8

4

0

%
12

8

4

0

%
12

9

6

3

0

%
10

8

6

4

2

0

%
12

9

6

3

0

Billions of yen
6.0

5.2

4.5

4.2

3.8

1.9

2.2

3.5

2.8

4.5

3.0

1.5

0

(FY)

09

10

11

12

13

CAPEX 3.3
Depreciation and 
amortization  3.6

Billions of yen
18

12

6

0

14.2

12.0

15.4

16.5

15.7

(FY)

09

10

11

12

13

■ Capital expenditures / Depreciation and amortization

■ R&D expenses

Billions of yen
12

9

6

3

0

4.2

8.5

8.7

6.9

9.9

7.2

8.9

7.4

(FY)

09

10

11

12

13

CAPEX 10.9

Depreciation and 
amortization    7.8

Billions of yen
6.0

4.5

3.0

1.5

0

5.5

5.2

6.0

4.1

4.6

(FY)

09

10

11

12

13

■ Capital expenditures / Depreciation and amortization

■ R&D expenses

Billions of yen
8

6

4

2

0

5.2

5.5

3.6

2.1

2.0

2.1

2.1

2.4

(FY)

09

10

11

12

13

CAPEX 6.7
Depreciation and 
amortization  3.4

Billions of yen
9

6

3

0

6.6

7.0

8.2

5.0

5.3

(FY)

09

10

11

12

13

■ Capital expenditures / Depreciation and amortization

■ R&D expenses

Billions of yen
2.5

2.0

1.5

1.0

0.5

0

1.4

1.2

1.7

1.0

1.5

1.1

1.1

0.9

(FY)

09

10

11

12

13

CAPEX 1.5
Depreciation and 
amortization  1.2

Billions of yen
4

3

2

1

0

2.9

3.0

2.2

2.2

2.5

(FY)

09

10

11

12

13

■ Capital expenditures / Depreciation and amortization

■ R&D expenses

Billions of yen
5

4.7

1.5

1.3

1.2

2.8

1.5

3.1

1.9

4

3

2

1

0

(FY)

09

10

11

12

13

CAPEX 3.9
Depreciation and 
amortization  2.3

Billions of yen
6.0

5.0

5.0

5.1

5.0

5.2

4.5

3.0

1.5

0

(FY)

09

10

11

12

13

Other 
Businesses 

■ Net sales

Billions of yen
100

49.7

53.5

59.2

78.9

83.0

(FY)

10

11

12

13

14
 (Forecast)

■ Operating income (loss) / Operating income margin

■ Capital expenditures / Depreciation and amortization

■ R&D expenses

Billions of yen
10
8
6
4
2
0
–2
–4
–6

8.7

9.5

11.0%

11.4%

2.5

4.3%

%

12

6

0

(FY)

–4.7

10

–3.6

11

12

13

14
 (Forecast)

Billions of yen
4

3

2

1

0

1.2

1.1

1.9

1.2

2.1

0.9

2.5

1.4

(FY)

09

10

11

12

13

CAPEX 4.0
Depreciation and 
amortization  2.0

Billions of yen
5

4

3

2

1

0

4.3

2.5

2.8

3.0

1.7

(FY)

09

10

11

12

13

* From ﬁscal 2013, certain operations previously included in EMC have been included in IAB following a change in management categorizations.  

 Accordingly, the segment information ﬁgures for ﬁscal 2012 and prior ﬁscal years have been restated to reﬂect this change.

* Forecasts for ﬁscal 2014 are those disclosed on April 24, 2014.

* The sales ﬁgures given indicate sales to external customers and exclude intersegment transactions. Operating income indicates income including internal income  

 prior to the deduction of such amounts as intersegment transactions and head ofﬁce expenses that are not apportionable.

* Forecasts for R&D expenses, depreciation and amortization, and capital expenditures are not publicized.

38

90

60

30

0

75

50

25

0

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Omron through the Year

Management 
Topics

May 2013

Omron celebrated its 
80th anniversary.
Prize-giving ceremony 
for The OMRON 
Global Awards (TOGA) 
was held.

September 2013

Omron selected for fourth 
consecutive year in Dow Jones 
Sustainability Asian Paciﬁc Index (DJSI 
Asia Paciﬁc), a socially responsible 
investment (SRI) index.

Asia Paciﬁc (AP) version

August 2013

Tokyo Institute of Technology, OMRON 
SOCIAL SOLUTIONS Co., Ltd., and 
OMRON Corporation commenced joint research 
into new sensing and monitoring methods to 
monitor deterioration of bridges and other social 
infrastructure and detect catastrophic post-
earthquake damage.

2013

April

Product-Related  
Topics

Industrial Automation Business (IAB)

Electronic and Mechanical  

　　  Components Business (EMC)

Automotive Electronic  
　　  Components Business (AEC)

Social Systems, Solutions and  

　　  Service Business (SSB)

Healthcare Business (HCB)

Other Businesses

October 2013

November 2013

April 2014

OMRON Total Fair 2013 private exhibition 
held in Beijing in October 2013 to propose 
new value to Chinese society.
Held in Shanghai in December 2013.
Held in Guangzhou in March 2014.
Please refer to page 36.

Omron selected in Top 100 Global 
Innovators for 2013 List by Thomson 
Reuters Corporation, of the United 
States, thereby recognized as one of the 
top 100 most innovative companies/
research organizations in the world.
Please refer to page 57.

Omron ranked No. 1 out of 23 companies 
in the electrical/precision equipment 
category at the Excellence in Corporate 
Disclosure Awards sponsored by the 
Securities Analysts Association of  
Japan (SAAJ).

Omron selected in a new share price 
index, the JPX-Nikkei Index 400.

Omron’s Ayabe Plant wins award 
for excellence and jury’s special 

merit award in Nikkei Monozukuri 
magazine’s Best Factory Awards.

December 2013

“Your Voice, Their World” joint 
project with India’s National 
Association for the Blind 
launched to support the large 
number of visually impaired 
people in India through 
educational activities and the 
provision of audio libraries.

2014

OMRON Automotive 
Electronics Co., Ltd., 
absorbs and merges with wholly 
owned subsidiary OMRON Iida 
Co., Ltd. 

Fifth Automation Center̶a 
base from which to spread 
knowledge about cutting-edge FA 
technologies̶inaugurated in India 
following establishment of centers 
in Japan, China, Europe, and the 
United States.
http://www.omron.com/media/
press/2014/04/c0423.html

May

June

July

August

September

October

November

December

January

February

March

April

June 2013

Launch of 

“Andon 
environmental 
information system”
and “sensor 
network server” 
tools that received 
the METI Minister’s 
Prize in the Energy 
Conservation Grand Prix Program.

Japan ﬁrst 
Launch of NX Series safety control units 

July 2013

Launch of one of 
the world’s most 

accurate and power 
efﬁcient absolute pressure 
sensors, capable of 
accurately detecting 50cm 
altitudinal variations in  
air pressure.

May 2013

Launch of DC/DC 
converter for idling 
stop systems, essential for 
stable operation of  
electrical equipment.

that both improve 
productivity and 
assure safety in 
conformity with 
international 
standards  
and rules.

September 2013

Launch of MC-681 
prediction-type 
thermometer that can 
take readings in about 
20 seconds. Designed 
for ease of taking 
measurements and 
reading results.

World ﬁrst  
Launch of HJA-

600T Walk Scan posture 
meter, with an Omron-
developed algorithm 
installed to evaluate a 
user’s walking posture 
after just 10 steps.

March 2014

Launch of KP-R Series  
outdoor-use, multiple PV 

inverters for photovoltaic systems.

Launch of embedded-type 
Human Vision Component 

(HVC), combined a camera module 
and image sensing component that 
incorporates 10 types of image 
sensing technologies, including  
face recognition.

Launch of S8VK Series 
switching power supply that 

can be safely used in 
temperatures from –40°C to +70°C 
and conserve space.

40

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Information

Industrial Automation Business (IAB)

% of Net Sales
（FY2013）

Market Share
（FY2013）

Manufacturing and sales of control systems  
and components for factory automation (FA) and  
industrial equipment

38%

Control-Related Equipment (Japan)

Approx. 40%

Source: Nippon Electric Control 

Equipment Industries 
Association (NECA)

Fiscal 2013 in Review
Despite uncertainty in emerging countries, 
overall sales and income increased.
In ﬁscal 2013, sales in Japan increased year on 
year due to the contributory factors in the second 
half, including a recovery trend in capital investment 
demand, mainly in the semiconductor and electronic 
component industries, and sales of new products.
  Overseas sales showed a signiﬁcant increase 
due partly to the weak yen. In the Americas, 
FA-related demand recovered from the second 
half, and oil and gas related business sales also 
grew in the second half. In Europe, sales were 
ﬁrm amid a moderate economic upturn. Certain 
countries in Asia experienced political instability 
and currency depreciation, but demand was solid 
in South Korea. Circumstances in the Chinese 
market were still uncertain, but sales were up 
year on year due to favorable conditions in the 
electronic component and automobile industries.
  While steadily investing in the future, IAB 
showed a signiﬁcant increase in operating income.

Yutaka Miyanaga
Senior Managing Ofﬁcer
Company President,
Industrial Automation Company

■ Past Performance and Forecast

FY2010

FY2011

FY2012

FY2013

271.9

123.9

148.0

26.7

56.7

25.0

38.8

0.7

41.1

15.1%

14.2

4.5

2.2

270.8

123.1

147.7

29.3

55.3

25.3

36.8

1.0

35.4

13.1%

15.4

4.2

3.8

263.0

116.3

146.7

31.6

50.4

24.7

39.4

0.6

31.3

11.9%

16.5

3.5

2.8

291.7

119.4

172.3

36.9

61.9

28.9

43.8

0.8

38.8

13.3%

15.7

3.6

3.3

(Billions of yen)

 FY2014
(Forecast)

300.0

123.0

177.0

37.5

63.5

30.5

44.5

1.0

40.0

13.3%

Net sales 

Japan 

Overseas 

　Americas 

　Europe 

　Asia Paciﬁc 

　Greater China

　Direct exports

Operating income

Operating income margin 

R&D expenses 

Depreciation and amortization

Capital expenditures 

See notes on page 38.

42

■ Index of Machinery  
   Orders and IAB Sales

100

90

80

70

60

50

40

30

20

10

0

Billions of yen
35

30

25

20

15

10

5

0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY2012

FY2013

Index of Machinery Orders*
 (Seasonally adjusted) [left axis]
IAB Sales [right axis]

*Source: Calculated based on materials 

prepared by the Cabinet Ofﬁce, 
Government of Japan

Japanese IAB sales trends tend to reﬂect 
those in the machinery orders index.

Business Strategy and Outlook for Fiscal 2014
We will contribute to manufacturing innovation by delivering valuable products and services.

In ﬁscal 2014, ending March 31, 2015, IAB is tar-
geting net sales of ¥300.0 billion, a 2.8% increase 
year on year, and operating income of ¥40.0 billion, 
up 3.2%. In Japan, we expect sales to remain ﬁrm, 
mainly to the semiconductor and electronic com-
ponent industries. Overseas, despite such negative 
factors as the slowing economic growth rates in 
emerging markets, we anticipate demand will be ro-
bust mainly in developed countries and thus expect 
an overall increase in sales.
  We posted higher sales and proﬁts in ﬁscal 2013 
but were unable to achieve the business growth 
initially envisaged under the GLOBE STAGE. IAB 
was impacted by the ongoing sense of uncertainty 
centered on emerging economies and the greater 
than expected amount of time needed to launch 
and market new products.

  The wide range of products we have launched 
over the past three years and our controllers that 
realize advanced control boast industry-leading 
competitiveness. We will keep working to better 
propose solutions based on an extensive product 
lineup, ranging from sensors to programmable 
logic controllers and drives. Through our global 
business sites and service network, we will bring 
about business growth by delivering higher-
value-added products and services to customers 
in targeted industries.
  We will also contribute to innovation in manufac-
turing by providing valuable products and services 
to our customers mainly in the electronic device and 
automobile industries, which are expected to con-
tinue to expand in the years to come centered on 
emerging countries.

Europe

China

Japan

America

Asia Pacific

Sales base
Automation Center*

Wide range of products

Global business sites and service network (150 plus bases)
* Engineering center that helps realize optimal automation

■ Breakdown of Sales by Product Line (Fiscal 2013)

10%

Safety Equipment
(Safety Light Curtains)

60%

Control Equipment
 (Programmable 
Logic Controllers)

Programmable Logic Controller

Safety Light Curtains

30%

Sensing Equipment
(Sensors and Switches)

Temperature Controller

Fiber Sensor

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Segment Information

Electronic and Mechanical
Components Business (EMC)

% of Net Sales
（FY2013）

Market Share
（FY2013）

Manufacturing and sales of electronic components 
for consumer electronics, automobiles, mobile phones, 
and amusement devices

13%

Relays（Global）

Approx. 20%

Source: Internal survey

Fiscal 2013 in Review
Sales  were strong  to domestic and overseas 
consumer and commercial product markets.
In Japan, relays and switches for the consumer 
electronics industry recorded strong sales due to 
the economic recovery, the extreme heat in the 
ﬁrst half of the year, and the surge in demand 
ahead of the hike in the consumption tax rate. 
Thus, sales in ﬁscal 2013 increased year on year.
  Overseas, sales surged, in part due to the im-
pact of yen depreciation. Other factors contribut-
ing to the increase included growth in our share 
of the consumer electronics market and ﬁrm 
demand from the mobile device industry in Chi-
na and South Korea. In the Americas, there was 
strong demand in the consumer and commercial 
product markets, and improvement in these mar-
kets in Europe associated with economic recov-
ery also contributed to sales.
  Operating income increased substantially year 
on year due to higher sales, ongoing cost reduc-
tion initiatives, and the yen’s depreciation.

Kenji Matsunami
Managing Ofﬁcer
Company President,
Electronic and Mechanical Components Company

■ Past Performance and Forecast

FY2010

FY2011

FY2012

FY2013

Net sales 

Japan 

Overseas 

　Americas 

　Europe

　Asia Paciﬁc 

　Greater China

　Direct exports

Operating income

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

Operating income margin 

11.0%

6.2%

5.2%

R&D expenses 

Depreciation and amortization

Capital expenditures 

See notes on page 38.

4.6

6.9

8.7

5.5

7.2

9.9

5.2

7.4

8.9

97.7

28.1

69.6

16.6

14.7

8.7

28.7

0.9

8.7

8.9%

6.0

7.8

10.9

(Billions of yen)

FY2014
(Forecast)

101.0

26.0

75.0

17.5

15.5

10.0

31.0

1.0

9.2

9.1%

■ Global Shipments of 
　Electronic Components  
　and EMC Sales for  
　Consumer Electronics
Billions of yen
Billions of yen
1,500
5

1,200

900

600

300

0

4

3

2

1

0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY2012

FY2013

Global [left axis]
Japan [left axis]
EMC Products for Consumer
Electronics [right axis]

Source: Japan Electronics and Information 

Technology Industries Association (JEITA)

In ﬁscal 2013, sales of products for consumer 
electronics were strong.

44

Business Strategy and Outlook for Fiscal 2014
We will enhance marketing activities in each industry and create new products.

In ﬁscal 2014, EMC is targeting net sales of 
¥101.0 billion, up 3.4% year on year, and operat-
ing income of ¥9.2 billion, up 6.3%. We forecast 
a year-on-year decrease in sales in Japan due to 
the impact of the consumption tax hike on the 
consumer electronics industry and lower domes-
tic demand because some automobile industry 
customers shifted production abroad. Overseas, 
in addition to higher sales of power latching 
relays for smart meters, we forecast an increase 
in sales to the automobile industry, which is ex-
pected to see production expansion in China and 
North America.

  We will expand sales by enhancing marketing 
and creating new products for each industry we 
serve, including areas of strength like automobile 
and consumer electronics industries as well as 
other areas, for example, the medical and build-
ing automation industries.
  Meanwhile, in manufacturing, by building a 
production system with more compact lines that 
is resilient to changes in the business environ-
ment and working to shorten the lead times from 
development to production, we will launch new 
products in a timely manner in order to respond 
to customer expectations.

■ Target Industries

HEMS*

* HEMS：Home Energy 
　Management System

Building Automation

Energy

Creation of new 
products for 
every industry to 
expand sales

Industry

Communication

■ Breakdown of Sales by Product Line (Fiscal 2013)

31%

Other Electronic Products
(Image Sensing and Sensors)

Printer Toner 
Sensor

Image Sensing

Medical

Car

Amusement

69%

Relays, Switches, 
and Connectors

Printed Circuit Board Power Relays

Surface Mount 
Switch

FPC Connectors

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Segment Information

Automotive Electronic 
Components Business (AEC)

Production and sales of electronic components  
for automobiles

% of Net Sales
（FY2013）

Market Share
（FY2013）

16%

Body Control Units for Miniature 
Vehicles (Japan)

Approx. 50%

Source: Internal survey

Fiscal 2013 in Review
The robust market and new products for North 
America, Asia Paciﬁc, and Greater China con-
tributed to a strong performance.
In Japan, sales decreased because some custom-
ers transferred production overseas. This offset the 
favorable effect of government economic mea-
sures, the continuation of tax breaks for eco-
friendly automobiles, and the surge in demand 
before the consumption tax hike.
  Overseas, sales were up signiﬁcantly overall due 
in part to the weak yen. Although the European 
market trended toward recovery, the automobile 
industry remained weak. However, the accelerated 
recovery in North America, continued strong mar-
ket expansion in China and other countries in Asia, 
and successive new product launches contributed 
to the sales increase.
  Operating income increased substantially year on year 
due to higher sales and the impact of yen depreciation.

Katsuhiro Wada
Managing Ofﬁcer
President and CEO,
OMRON Automotive Electronics Co., Ltd.

■ Past Performance and Forecast

Net sales 

Japan 

Overseas 

　Americas 

　Europe 

　Asia Paciﬁc 

　Greater China

　Direct exports

Operating income

FY2010

FY2011

FY2012

FY2013

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

126.6

28.4

98.2

33.3

3.3

29.2

25.4

7.2

9.1

(Billions of yen)

FY2014
(Forecast)

128.5

25.0

103.5

37.5

3.5

28.5

27.0

7.0

9.2

Operating income margin 

4.9%

3.2%

5.1%

7.2%

7.2%

R&D expenses

Depreciation and amortization

Capital expenditures 

See notes on page 38.

5.3

2.1

2.0

6.6

2.1

5.2

7.0

2.4

5.5

8.2

3.4

6.7

46

■ Worldwide Automobile  
　Production (unit basis)

Millions

■ Breakdown of Sales by Product Line (Fiscal 2013)

52%

Other
(Passive Entry / Push Engine 
Start Systems and Keyless 
Entry Systems)

7

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

FY2012

FY2013

Source: IHS Automotive

In ﬁscal 2013, growth was notable in China.

Business Strategy and Outlook for Fiscal 2014
We will transform into a value-creating company and strengthen our management platform.

In ﬁscal 2014, AEC is targeting net sales of ¥128.5 
billion, up 1.5% year on year, and operating income 
of ¥9.2 billion, up 1.3%. In Japan, we expect lower 
sales due to the consumption tax hike and to some 
customers transferring production abroad. Over-
seas, we forecast higher sales due to robust de-
mand in North America as well as strong demand 
in China and other Asian countries.
  We achieved double-digit sales growth through 
ﬁscal 2012 and ﬁscal 2013. Now, taking VG2020 
into view, we will tackle the challenges of trans-
forming into a value-creating company that pro-
actively addresses social issues through ﬁscal 
2016. In ﬁscal 2014, the ﬁrst year of the EARTH-1 
STAGE, we will further shorten planning and devel-
opment processes and work on the development 
of products that anticipate market demand. We will 
increase sales by standardizing our existing prod-
ucts and implementing sales and marketing tailored 
to burgeoning emerging markets. In addition, we 
will work to strengthen our management founda-
tion, for example our human resources, in order to 
globalize businesses more efﬁciently.

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Ever-growing emerging markets

24%

Switches
(Power Window Switches 
and Power Seat Switches)

Power Window Switches

Electric Power 
Steering Controllers

24%

Motor Controls
(Electric Power Steering Controllers 
and Power Slide Door Controllers)

Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Segment Information

Social Systems, Solutions 
and Service Business (SSB)

Provision of solutions and services for contributing 
to a safer, more secure, and comfortable society

% of Net Sales
（FY2013）

Market Share
（FY2013）

11%

Railway Infrastructure 
Equipment (Japan)

Approx. 40%

Source: Internal survey

Fiscal 2013 in Review
Sales and income increased signiﬁcantly 
driven by railway infrastructure and environ-
mental solutions.
In ﬁscal 2013, the railway infrastructure busi-
ness saw brisk replacement demand for railway 
infrastructure equipment due to recovered 
performance by railway companies and pre-con-
sumption tax hike demand. Demand for safety 
and security solutions centered on remote moni-
toring systems was also ﬁrm, and sales showed 
a substantial increase year on year. Underpinned 
by demand for trafﬁc control systems and 
solutions for preventing facility deterioration, 
sales were strong in the trafﬁc control and road 
control systems business. In the environmental 
solutions business, sales rose strongly year on 
year, reﬂecting ﬁrm demand for solar power 
generation system related products and install-
ment services.
  Operating income increased substantially 
because of the sales increase.

Kiichiro Kondo
Managing Ofﬁcer
President and CEO,
OMRON SOCIAL SOLUTIONS Co., Ltd.

■ Past Performance and Forecast

Net sales 

Japan 

Overseas 

　Americas 

　Europe 

　Asia Paciﬁc 

　Greater China

　Direct exports

Operating income

FY2010

FY2011

FY2012

FY2013

(Billions of yen)

FY2014
(Forecast)

63.8

63.1

0.7

0

0

0

0

0.7

1.7

57.2

56.9

0.3

0

0

0

0

0.3

0.1

68.8

68.5

0.3

0

0

0

0.1

0.2

2.9

82.7

82.4

0.3

0

0

0

0.2

0.1

5.6

85.5

84.5

1.0

0

0

0

1.0

0

6.5

Operating income margin 

2.6%

0.2%

4.2%

6.7%

7.6%

R&D expenses

Depreciation and amortization

Capital expenditures 

See notes on page 38.

3.0

1.7

1.0

2.2

1.1

0.9

2.2

1.1

1.5

2.5

1.2

1.5

■ Number of Rail Transport  
　Passengers Per Month  
　(year on year change)
％
3

Private Railways

Total

Japan Railways (JR) Group

2

1

0

–1

–2

–3

1 2 3 4

5 6 7 8
2013

9 10 11 12

Source: Rail Transport Overview, Ministry of 

Land, Infrastructure, Transport 
and Tourism 

SSB covers a wide range of social ﬁelds, and 
there are no speciﬁc economic indicators 
closely linked to performance. In the railway 
segment, for example, SSB’s sales are 
inﬂuenced by customers’ investment plans 
(e.g., IC card equipment installation and new 
railway and station construction plans).

48

Business Strategy and Outlook for Fiscal 2014
We will expand the environmental solutions business through a nationwide installment  
and maintenance service network.

In ﬁscal 2014, SSB is targeting net sales of 
¥85.5 billion, up 3.4% year on year, and oper-
ating income of ¥6.5 billion, up 17.1%. Despite 
the spike in demand prior to the consumption 
tax hike, the railway infrastructure business is 
expecting sales to be on par with the previous 
year due to the increase in demand for security 
and safety solutions. In the trafﬁc and road con-
trol systems business, the demand for security 
and safety products and services among road 
managers will make up for lower investment 

demand for trafﬁc control systems. We there-
fore expect sales to be on par with the previous 
ﬁscal year. In the environmental solutions busi-
ness, we expect higher sales due to ongoing 
robust demand for solar power generation.
  Our strengths in the environmental solutions 
business include our nationwide installment and 
maintenance service network and our numerous 
experienced engineers. We will leverage these 
strengths to unfailingly meet rising demand to 
further increase sales.

■ Strengths of the Environmental Solutions Business

Nationwide Field Service Engineering

Number of Bases / Engineers

140 / 1,200

Ready to meet expanding demand 
with our nationwide installment 
and maintenance service network

Main base ●
Service base ★

■ Breakdown of Sales by Product Line (Fiscal 2013)

12%

Other
(Software Development)

58%

Maintenance and Support, 
Environmental Solutions

23%

Railway Infrastructure
(Automatic Ticket Gates 
and Ticket Vending Machines)

Automatic Ticket 
Gates

Ticket Vending Machines

7%

Public Transportation
(Public Transportation 
Management Systems)

Trafﬁc Control Systems

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Segment Information

Healthcare Business (HCB)

% of Net Sales
（FY2013）

Market Share
（FY2013）

Provision of healthcare and medical devices and 
services for homes and medical institutions

11%

Home-Use Blood Pressure 
Monitors (Global)

Approx. 50%

Source: Internal survey

Fiscal 2013 in Review
Sales increased by responding to higher health 
awareness in emerging countries.
In Japan, sales of our core blood pressure 
monitors and thermometers were strong. Sales 
of patient monitors for medical institutions also 
showed an increase.
  Overseas, sales increased substantially due to 
the weak yen and higher sales of blood pressure 
monitors, a result of our success in responding 
to rising health awareness in emerging countries. 
While we were adversely impacted by the stagnant 
Russian economy and political instability in some 
Southeast Asian countries, we beneﬁted from 
increased demand in other emerging countries.
  Operating income increased substantially com-
pared with the previous year due to higher sales, on-
going cost reduction initiatives and yen depreciation.

Kiichiro Miyata
Managing Ofﬁcer
President and CEO,
OMRON HEALTHCARE Co., Ltd.

■ Past Performance and Forecast

FY2010

FY2011

FY2012

FY2013

■ Japanese Electronics 
　Market for Blood 
　Pressure Monitors
Billions of yen

(Billions of yen)

FY2014
(Forecast)

Net sales 

Japan 

Overseas 

　Americas 

　Europe 

　Asia Paciﬁc 

　Greater China

　Direct exports

Operating income

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

89.3

30.8

58.5

14.3

21.0

5.5

17.3

0.4

7.5

98.5

32.5

66.0

15.5

22.5

6.5

21.0

0.5

8.0

Operating income margin 

6.7%

4.7%

6.2%

8.5%

8.1%

R&D expenses

Depreciation and amortization

Capital expenditures 

See notes on page 38.

5.0

1.2

4.7

5.1

1.5

2.8

5.0

1.9

3.1

5.2

2.3

3.9

2.5

2.0

1.5

1.0

0.5

0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY2012

FY2013

Other Products
Omron Products

Source: GfK

Sales surged in the second half.

50

Business Strategy and Outlook for Fiscal 2014
We will expand sales networks centered on emerging countries.

In ﬁscal 2014, HCB is targeting net sales of ¥98.5 
billion, up 10.3% from the previous ﬁscal year, and 
operating income of ￥8.0 billion, up 6.0%. We 
expect an increase in sales as consumer spending 
picks up following economic recovery in North 
America and Europe and the rising health aware-
ness in emerging countries.
  In recent years, the number of people with life-
style-related diseases is on the rise in emerging 
countries, including China, India, and those in 
Central and South America, due to the changes 

in lifestyle habits following economic growth. We 
predict demand expansion to continue for both 
healthcare and medical devices. In response, we 
will continue to increase the number of stores sell-
ing and marketing our healthcare products, with a 
emphasis on China, India, and elsewhere in Asia as 
well as Brazil, from 360,000 stores in ﬁscal 2013 
to 430,000 stores in ﬁscal 2016.
  We will keep working to strengthen our sales 
and marketing structure and aim to increase sales 
by expanding our sales network.

■ Planned Increase in Total Number of Stores

Western Europe

Russia

Fiscal 2013: 360,000 stores → Fiscal 2016: 430,000 stores

North America

China

(FY)

13

16

(FY)

16

13
CIS / Eastern Europe / 
Middle East and Africa

Japan

(FY)

13

16

(FY)

13

16

(FY)

13

16

India

Asia Pacific

(FY)

13

16

(FY)

13

16

(FY)

13

16

Central and South America

(FY)

13

16

Further expansion 
centered on emerging 
markets

■ Breakdown of Sales by Product Line (Fiscal 2013)

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Blood Pressure Monitors

20%

Other
(Activity Monitors 
and Blood Glucose 
Monitors)

Activity Monitor

6%

Patient Monitors

6%

Body Composition 
Analyzers

7%

Thermometers

9%

Nebulizers

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Segment Information

Other Businesses

Undertaking of incubation activities 
for business expansion 

% of Net Sales
（FY2013）

Market Share
（FY2013）

10%

Residential-Use  
PV Inverters (Japan)

Approx. 40%

Source: Internal survey

Fiscal 2013 in Review
Demand related to renewable energy and smartphones contributed to sales and income.

In ﬁscal 2013, the Environmental Solutions Busi-
ness and the Backlight Business performed strongly 
due to renewable energy and smartphone demand 
respectively, increasing both sales and income.
  In the Environmental Solutions Business, the 
sales volume of PV inverters increased substan-
tially, driven by growing interest in the use of 
renewable energy, and sales were up sharply 
compared with the previous year.
  The Backlight Business posted a signiﬁcant 
year-on-year increase in sales because we fo-
cused on high-end backlight models following the 
expansion of the smartphone and tablet markets.

  In the Electronic Systems & Equipments Busi-
ness, uninterruptible power supply units per-
formed strongly due to higher capital investment 
following business recovery and the last-minute 
demand preceding the consumption tax hike. In 
contrast, sales of industrial-use built-in comput-
ers and contract development and manufacturing 
services for electronic devices were weak due to 
an order decrease from major customers. Over-
all, sales were unchanged year on year.
  In the Micro Devices Business, sales rose 
sharply year on year due to a rapid increase in 
demand for MEMS microphones.

■ Past Performance and Forecast

FY2010

FY2011

FY2012

FY2013

(Billions of yen)

FY2014
(Forecast)

Net sales 

Japan 

Overseas 

　Americas 

　Europe 

　Asia Paciﬁc 

　Greater China

　Direct exports

49.7

27.5

22.2

0

0

0

20.7

1.5

53.5

29.5

24.0

0

0

0

22.6

1.4

Operating income (loss)

（4.7）

（3.6） 

Operating income margin 

R&D expenses

Depreciation and amortization

Capital expenditures 

See notes on page 38.

ー

2.5

1.2

1.9

ー

2.8

0.9

2.1

59.2

41.4

17.8

0

0

0

16.3

1.5

2.5

4.3%

3.0

1.4

2.5

78.9

51.0

27.9

0

0

0

25.6

2.3

8.7

83.0

50.0

33.0

0

0

0

31.0

2.0

9.5

11.0%

11.4%

4.3

2.0

4.0

■ Solar Power Generation 
   Systems: Approved Output

1,000kW
8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

4 5 6 7 8 9 10 11 12 1 2
FY2013

FY2014

Megasolar (> 1,000kW)
Middle Solar (< 1,000kW)
Small-Scale Solar (< 10kW)

Source: Agency for Natural Resources 

and Energy (ANRE)

The  feed-in  tariff  system  is  contributing  
to growth.

52

Business Strategy and Outlook for Fiscal 2014
We will target further expansion of the Environmental Solutions Business.

In ﬁscal 2014, the Other Businesses segment is 
targeting net sales of ¥83.0 billion, up 5.1% year on 
year, and operating income of ¥9.5 billion, up 9.5%.
  Amid a continually brisk market for industrial 
solar power generation systems due to the feed-
in tariff system, the Environmental Solutions 
Business is working to increase sales of and its 
market share for PV inverters in Japan. In collab-
oration with SSB, we are aiming to further ex-
pand our energy-creation business, for example 
by undertaking monitoring services that support 
the long-term, stable operation of systems. Also, 
we have started preparing for the deregulation of 
the electric power market, which is due to start 
in 2016. We will work to expand our business 
by developing a total energy solutions business 
to expertly store and wisely use energy that is 
generated without waste.
  In the Backlight Business, we will aim to in-
crease orders received for high-end backlight units 

in response to the ongoing trend toward larger, yet 
thinner and higher-deﬁnition smartphones. At the 
same time, we will focus on our proprietary thin-
screen technologies and existing molding tech-
nologies while remaining fully prepared for further 
signiﬁcant growth in sales and proﬁts.
  In the Electronic Systems & Equipments Busi-
ness, we will work to receive increased orders 
from our main customers for industrial-use built-
in computers and contract development and 
OEM services for electronic devices. We will 
also strive to expand sales by augmenting our 
lineup of uninterruptible power supply units.
  In the Micro Devices Business, we forecast de-
mand for our existing products, such as custom 
integrated circuits, will remain roughly ﬂat. We 
will focus on MEMS microphones and MEMS 
sensors in the mobile device and consumer 
electronics markets, where signiﬁcant growth is 
expected, to expand sales.

■ Businesses and Main Products

Environmental Solutions

Backlight

PV Inverters for Solar Power Generation Systems

LCD Backlights

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Micro Devices

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Sustainability Topics
IAB and Consumer Safety and Security  

 100%

Sustainability Topics
EMC and Localization of Management  

 42%

Percentage of major domestic automobile manufacturers using RFID

Percentage of overseas core positions ﬁlled by local staff (as of March 31, 2014)

Traceability Management Provides Consumers with Safety and Security

New Female President in China

The Industrial Automation Business (IAB) not only creates equipment for factory automation (FA) but also 
contributes to traceability management with radio frequency identiﬁcation (RFID)* technologies to provide 
consumers with safety and security. Traceability management links manufacturing data, such as production 
dates and parts information, directly to a product, enabling both to be managed together. Should a product be 
found defective, proper traceability management makes it easier to determine the cause of the defect by using 
the associated manufacturing data.

To achieve “true globalization,” it is necessary to create social needs based on the speciﬁc 
conditions of individual countries. Therefore, the Company must be an organization at 
which local employees can actively participate in management. In 2013, Xu Jian assumed 
the position of president of Shanghai OMRON Control Components Co., Ltd. (OMR), 
a manufacturing company in Shanghai that is part of the Electronic and Mechanical 
Components Business (EMC).

President, OMR
Ms. Xu Jian 

Widespread Usage in the Automobile Industry 
Addresses Strong Consumer Demand for Safety

Traceability makes this possible. The current environment 

is such that the social responsibility of a manufacturer will 

First Duty: Establishing a “Meeting Room”

Omron Principles and Corporate DNA

Traceability management is employed in various industries, 

to crises like recalls. Therefore, traceability management is 

including those related to food, pharmaceuticals, and 

expected to be even more commonly used in a wider 

consumer electronics. However, it is particularly 

range of industries going forward.

production area. Due to its location inside a manufacturing 

plant, all employees ranked below section chief go about 

this philosophy, OMR launched a new human resource 
development plan in ﬁscal 2014 that includes both on-the-

their duties while wearing lint-free work suits.

job training and off-the-job training. From her experience,  

be called into question if it is unable to respond appropriately 

Xu’s ﬁrst duty was establishing a “meeting room” in the 

Product creation is people creation. In accordance with 

widespread in the automobile industry, where consumer 

demand for safety is especially high. Engines and other key 

safety-related systems have an immense impact on the 

RFID Contributes to Traceability Management

overall quality and safety of an automobile. For this reason, 

One possible method of employing RFID in traceability 

these items require particularly stringent traceability 

management involves afﬁxing radio frequency (RF) tags 

management. In the event of a recall, it is crucial for a 

to transportation-use pallets. Each time a new part is 

manufacturer to be able to quickly and accurately ascertain 

embedded in an unﬁnished product on the pallet, a 

which vehicles were afﬂicted and then analyze the defect. 

specialized reader/writer imprints information regarding that 

  This initiative has enabled 

the plant to respond to 

sudden disruptions in 

production quicker than 

was previously possible.

Emphasis on QCDS

Xu has come to believe that people grow by learning of  

their own value, and she is committed to cultivating human 

resources that inherit the Omron Principles and our 

corporate DNA. Through steadfast effort, Xu will continue to 

pursue improvements in product manufacturing capabilities.

Objectives and Gratitude as Driving Forces

Xu emphasizes the importance of communication with the 

■ Other Uses for RFID

By equipping runners’ race bibs with an 
RF tag, it is possible to track with ease 
runners’ times. This is accomplished by 
equipping checkpoints with reader/writers 
that extract data from the RF tag installed 
on the race bib to record the time when a 
runner passes a checkpoint.

* About RFID
RFID technologies generally employ RF tags and reader/
writers that connect to one another through wireless 
communication to exchange and store data.

part onto the RF tag. After a product is completed, a type of 

barcode, known as a quick response (QR) code, will be 

printed on the product, and this code will be linked to the 

manufacturing data contained in the RF tag. Both will then be 

managed together on a server. Should a defect occur, the 

manufacturer can retrieve the manufacturing data contained 

on the server based on the QR code. By employing this 

method, manufacturers are able to trace the cause of defects 

more easily.

Imprint

Store data

The Chinese manufacturing industry is undergoing great 

local authorities and communities as well as with customers 

change. Due to wage hikes, energy shortages, and higher 

expectations for quality, Chinese manufacturers now 

and their business partners. She handled most of the 
negotiations related to the 2012 opening of the new plant, 

require automation systems with the same level of 

personally taking part in the process from land selection 

precision as those used in developed nations. OMR is a 

through to the plant’s establishment. The local government 

ﬂagship production site for relays and switches. Aiming to 
become China’s No. 1 fully automated plant, OMR places 

thus has expectations for Xu’s exploits as president  

of OMR.

emphasis on improvements related to quality, cost, 

  Xu is an inspiration for many local employees at OMR. 

delivery, and services (QCDS). The Chinese automobile 

Aiming to serve as a role model for these employees,  

industry continues to grow rapidly. We therefore expect 

Xu states that she will “continue to advance forward, driven 

a rise in the production of compact and multi-functional 

by objectives and gratitude, without fear of failure.” 

automotive electronic components, items that are 

created using Omron’s unique technologies.

■ OMR Net Sales Target

RF tag

Reader/writer

New OMR plant, completed in August 2012

FY13 Result

Approx.
¥5.0 billion

FY16 Target

Approx. 
¥10.0 billion

54

RF tag

Reader/writer

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Omron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
Sustainability Topics
HCB and Global Diagnosis Standards  

Number of Omron blood pressure monitors sold over 40 years since launch

 Approx . 160 million

Sustainability Topics

Other Business (Environmental Solutions Business)  
and Effective Use of Intellectual Properties

Japanese market share for residential-use PV inverters*1

 Approx. 40%

Home Blood Pressure Study That Changed World Standards

Named One of the Most Innovative Corporations

In April 2014, the Japanese Society of Hypertension revised its hypertension treatment 
guidelines for the ﬁrst time in ﬁve years. This revision was a step ahead of the world in 
stipulating that blood pressure data collected at home should be given higher consideration 
in making diagnoses than blood pressure data collected in hospitals. Omron changed the face 
of hypertension treatment when it launched its ﬁrst home-use digital blood pressure monitor 
40 years ago. The revision of the hypertension treatment guidelines marks another major shift 
in the direction of hypertension treatment.

Dr. Yutaka Imai 
Tohoku University Graduate School 
of Pharmaceutical Sciences

Japan’s Ohasama Study played an important role in shaping 

century, the World Health Organization as well as other 

the history of blood pressure monitoring as it became 

international medical institutions and hypertension 

integral in establishing global standards for hypertension 

associations began employing this standard, and they 

diagnosis. The Ohasama Study is an ongoing study of the 

continue to do so today.

residents of Ohasama (now merged with Hanamaki City) 

  Hypertension treatment is constantly evolving through the 

in the northern region of Japan’s main island. This study 
began approximately 30 years ago in 1986, when blood 

cooperation of clinical researchers and patients around the 

world. Going forward, Omron will continue to aid progress in 

pressure monitoring was still seen as an act only physicians 

this ﬁeld by utilizing its sophisticated biometric technologies 

or nurses could perform. Omron became involved in this 

in collaboration with researchers. By working closely with 

project through the request of the study’s leader, Dr. Imai of 

medical practitioners, Omron will make ongoing contributions 

Tohoku University. To support the study, Omron supplied 

to the health of people across the globe.

home-use blood pressure monitors. We have since 

continued to help monitor the blood pressure of more 
than 4,000 residents while advancing the research.

  The Ohasama Study found that blood pressure levels 

at home were more closely linked to the risk of strokes 

or heart attacks than levels at hospital and, therefore, 

more clinically valuable. The study made this ﬁnding by 

comparing the blood pressure readings taken by Ohasama 

residents at home to those taken at hospitals for a number 

of years. Also, the study suggested that blood pressure of 
135/85mmHg measured at home should be seen as the 

standard for hypertension diagnosis. Around the turn of the 

■ Academic and Medical Institutions Employing Standards Based on the Ohasama Study

WHO / ISH
World Health Organization / International Society of Hypertension

JNC
Joint  National Committee

Chinese Guidelines for 
the Management of 
Hypertension

JSH
Japanese Society of Hypertension

ESH / ESC
European Society of Hypertension / 
European Society of Cardiology

135/85mmHg

Hypertension diagnosis based on blood pressure levels at home

56

For the ﬁrst time, Thomson Reuters Corporation (headquartered in New York City) named Omron as one of the 
Top 100 Global Innovators*2  in October 2013.

Intellectual Property Strategy Boosts Omron’s 
Competitive Strength

acquisition of intellectual property rights. We also continue 

striving to make a positive contribution to the global society 

by providing high-quality services and products in the areas 

Omron implements a unique intellectual property strategy 

of safety, security, healthcare, and the environment.

that combines business strategies and technological 

strategies. By accurately assessing the technologies that 

differentiate Omron from its competitors and also by 

implementing vertical-horizontal management through 

which businesses (vertical) are linked to and coordinated 

with technologies (horizontal), we aim to achieve long-term 

business growth supported by intellectual property assets. 

We remain committed to maximizing long-term corporate 

value through innovative technologies and the proactive 

■ Intellectual Property Data

Number of patents:

Applications
Approvals
Total patents

FY2011

FY2012

FY2013

1,068
915
5,959

1,084
1,172
6,448

1,040
949
6,635

*1   As of March 2014
*2  For more details, please refer to the Top 100 Global Innovators website 
　  http://top100innovators.com

■ Intellectual Property Holdings

Trademark rights
12%

Design rights
12%

Overseas

Patent rights, 
Utility model rights
28%

Total number 
of intellectual
properties
11,460

(as of March 31, 2014)

Patent rights, 
Utility model rights
31%

Japan

Design rights
9%

Trademark rights
8%

■ Standardization of Patent Technology

Solar power generation systems have been gaining 

a lot more attention recently as an effective 

countermeasure for global warming.

  There has been an issue with “multiunit systems” 

̶that is multiple solar power generation 

systems connected to electric wires as they 

would be for an electric power utility.  During 

blackouts, this situation could lead to problems 

with detecting islanding over a wide area. This 

complexity has been a source of system trouble, 

creating a barrier to the proliferation of solar 

power generation systems.

In order to solve this problem, Omron developed 

AICOT®, an acronym for “Anti-Islanding Control 

Technology,” which is a completely new innovation.

  Omron lifted patent restrictions and standardized 

the AICOT® technology, aiming for faster 

proliferation of solar power generation systems.

1. Patented Technology:
PV inverter islanding detection method
This technology became a base for the new certiﬁcation 
system that is compatible with multiunit systems, and we 
have partially lifted patent restrictions.

2. Technology Brand: AICOT®
AICOT® refers to the Omron brand of Anti-Islanding Control 
Technology for multiunit solar power systems.

3. Product Lineup
AICOT® technology is installed in all of Omron’s PV  
inverters for the Japanese market.

KP-K series
(indoor-use)

KP-M series 
(outdoor-use)

KP-R series 
(outdoor-use)

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Omron CorporationIntegrated Report  2014 　  　                                                                
 
 
 
 
 
 
 
 
 
 
CSR Management

Identiﬁcation of ESG Material Issues

In ﬁscal 2013, Omron analyzed important issues related to environmental, social, and governance (ESG) 
factors, highly pertinent to the Company’s business. In this undertaking, we considered information and 
feedback from global socially responsible investment (SRI) investigation companies, shareholders, and other 
stakeholders. We identiﬁed material issues that could potentially impact our sustainability and deﬁned related 
key initiatives to be addressed during the EARTH STAGE.
  We established targets, and we will apply the plan-do-check-act (PDCA) cycle in pursuing these targets.

ESG

Material Issues

Key Initiatives for EARTH STAGE

Related Pages

Social

Diversity

Environ-
mental

Eco-
monozukuri

● Educating the next-generation  

of top-rank managers

　 KPI: Percentage of core positions ﬁlled 
　　　  by local human capital

● Supporting advancement  

of females 

　 KPI: Percentage of female managers

Human Resources 
Strategies

P.60–63

● Providing energy-saving and 
energy-creating products
　 KPI: Environmental contribution 

● Minimizing energy and resource 
consumption, recycling, and 
reducing waste output

　 KPI: Carbon productivity (CO2 emissions 
　　　 from global production sites )
　　　 Target: 30% improvement on a global 
　　　 basis compared with the ﬁscal 2010 
　　　 level by ﬁscal 2020

Environmental 
Management
P.64–66

Corporate 
Governance

● Strengthening systems for 
improving management 
transparency and fairness
　 (Diversity of the Board of Directors  

and compensation systems)

Gover-
nance

Risk 
Management

● Instituting countermeasures  

for major Group risks

Corporate 
Governance,  
Internal Controls,  
and Compliance and  
Risk Management
P.67–73

Responding to Stakeholder Expectations by Creating a Better Society 
through Our Business

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 stakeholders to forge relationships of trust.

CSR Practice Policies  

● Contribute to a better society through  

■ Framework of CSR Activities

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 such issues as human rights, the environment, 
diversity, and community relations in a way that draws  
on Omron’s distinctive strengths.

● Always demonstrate fairness and integrity  
in the promotion of corporate activities. 
Promote more transparent corporate activities that maintain 
fairness and integrity not only through strict compliance  
with laws, regulations, and social rules but also through 
increased accountability.

Business

Society  Environment

Corporate Governance / Internal Controls

• Compliance 
• Maintenance of 
corporate ethics

• Information disclosure
• Risk management

Observance of International CSR Standards and Guidelines  

  Omron will continue to respect international 
CSR standards and guidelines and sincerely 
implement measures to meet the expectations 
of its stakeholders.

July 2014

Omron Corporation
Chairman of the Board
Fumio Tateishi

Omron respects such international CSR  
standards and guidelines as the Universal  
Declaration of Human Rights, the United  
Nations Global Compact (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 
Ten Principles of the UNGC, which are univer-
sally accepted principles in the areas of human 
rights, labor standards, the environment, and 
anti-corruption. Accordingly, Omron joined the 
Global Compact Network Japan (GC-JN), a 
local Global Compact network. Later, in 2013, 
Omron entered the Global Compact Network 
China (GC-CN).

58

59

About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionOmron CorporationIntegrated Report  2014Human Resources Strategies: (1) Diversity

■ Appointing Global Human Resources to Global Core Positions  

■ Percentage of Global Core Positions Filled by Non-Japanese Human Capital

Omron is systemically securing and educating 
the next-generation of top-rank managers to 
become capable leaders that can support its 
future. From the perspective of globalization, we 
are committed to placing local human capital in 
management positions at operating sites outside 
Japan. We believe that it is best to have people 
from a given country or region conduct manage-
ment in that area. These people are most able 

to make fast and appropriate management  
decisions and lead the organizations and  
people in their country or region. In ﬁscal 
2011, the ratio of core positions at overseas 
sites ﬁlled by local human capital was 31％.  
By March 31, 2014, this ratio had increased to  
42％. Going forward, we will continue to culti-
vate local employees and assign these human  
capital to important positions.

Local 
31％

Local 
42％

Overseas
37%

FY2011

Domestic
63％

Overseas
35％

FY2013

Domestic
65％

■ Promoting the Advancement of Female Human Capital  

Currently, the number of female employees in 
leadership roles is low, especially in Japan. Om-
ron realizes that this is an issue needing to be ad-
dressed. The percentage of female employees in 
Japan as of April 20, 2014, was 21％, with 1.8％ 
of managers being female. By ﬁscal 2016, we 
aim to employ several female executives in Japan 
and have female managers account for 3％ of total 

managers. By 2018, we plan to have female man-
agers account for 5％. Going forward, Omron will 
progressively cultivate a workplace environment 
in which female employees can continue working 
even after life events like marriage and childbirth. 
Furthermore, we will develop a corporate culture 
that allows any employees with high ambitions to 
achieve advancement, regardless of gender.

■ Percentage of Female Managers in Japan

Percentage of female managers

1.4%

1.8%

April 2012

April 2014

April 2018 
(Plan)

 5% level

■ Developing a Workplace Environment That Empowers  
　 People with Disabilities  
Currently, Japan legally requires companies to 
maintain a ratio of employees with disabilities 
to total employees of at least 2％. The Omron 
Group, including OMRON Taiyo Co., Ltd. (a 
specially certiﬁed subsidiary under the Act on 
Employment Promotion of Persons with Dis-
abilities), has a ratio of 3.24％, one of the high-
est of any manufacturing company in Japan. 
Overseas, government policies pertaining to 
the employment of people with disabilities and 
social awareness toward these individuals vary 
by country. As such, it is necessary to develop 
the appropriate workplace environment based 

on the conditions of each country.
  Omron aims to develop a workplace environ-
ment in which people with disabilities are em-
powered and can work unimpeded, and it will 
formulate related initiative policies based on the 
conditions of each country.

60

61

About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionIntegrated Report  2014Omron CorporationHuman Resources Strategies: (2) Evolving Award System 
for Promoting the Omron Principles

The Omron Global Awards（TOGA）

Omron pledges to create tangible value on a global scale by facilitating the efforts of all employees 
to practice the Omron Principles.

About TOGA

1

TOGA is a system available to all employees around the world for promoting the practice 
of the Omron Principles by linking the principles to everyday work (as of June, 2014).

The Omron Principles

Corporate
Core Value

Working for the 
benefit of society

Management Principles

● Challenging ourselves to 
　always do better
● Innovation driven by social needs
● Respect for humanity

Management Commitments

Guiding Principles for Action

● Respect for individuality and diversity
● Maximum customer satisfaction
● Relationship-building with shareholders
● Awareness and practice of corporate 
　citizenship

● Quality first
● Unceasing commitment to 
　 challenging ourselves 
● Integrity and high ethics
● Self-reliance and mutual support

Characteristics
1. Recognition of self-declared achievement
　 In TOGA, entries are made as teams, and entrants are required 
　 to declare the challenges they will be taking on at the time of 
　 entry, before they accomplish their goals.

2. Award categories based on ﬁve sayings of the founder
　 Each team can choose a category that best describes the key 
　 concept of the team’s activity.

3. Exemplary practices shared through tournament-style competition 
　 Tournament-style competition cultivates a corporate culture in 
　 which employees are inspired by each other, promoting mutual 
　 development and understanding.

Connection between Award Categories and the Omron Principles

Five sayings of the founder

Challenging  ourselves 
to always do better

“70/30 Rule”
“Don’t Say ‘I Cannot’”

Innovation driven by 
social needs

“Customer Centric”
“Be a Pioneer.”

Respect for humanity

“Those Who Make Others Happy”

62

TOGA by Numbers

2

■ Number of Entries and Participants by Region  
  (Fiscal 2013)

■ Distribution of Entries by Category (Fiscal 2013) 

Region

Japan

Greater China

South Korea

Asia Paciﬁc

Americas

Europe

Total

Entries

Participants

1,276

12,379

742

54

222

93

132

7,115

345

1,930

667

1,097

2,519

23,533

“Those Who Make 

Others Happy”

7%

“Be a Pioneer.”

16%

Entries
2,519

“Customer 
  Centric”

27%

Challenge Story and Beyond

Entry Theme: Fastest Development of Outdoor-Use PV Inverters  

Category: “Be a Pioneer.”

“70/30 Rule”
7%

“Don’t Say 
‘I Cannot’ ”

43%

3

In October 2012, a project team employed 
new development techniques and teamwork 
to develop a small-scale industrial PV inverter 
for outdoor use in half the time that would 
be normally required. This valiant effort 
enabled the product to meet market needs 
through a timely launch.

  In June 2014, Omron completed systems 
for expanded production of this PV inverter 
to respond to solid market growth. Going 
forward, we will work to make larger 
contributions to the proliferation of solar 
power generation systems.

And then…

Development  
in progress

KP-M series 
(outdoor-use)

63

About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionIntegrated Report  2014Omron CorporationEnvironmental Management

Becoming a Global Value-Creating Company with Environmental 
Contributions Exceeding Environmental Impacts

Omron established the Group’s Environmental Policy in 1996 and its environmental management 
vision, “Green Omron 21,” in 2002. In 2011, Omron formulated its environmental management 
vision, “Green Omron 2020.” In addition to continuing with efforts to reduce our own environmental 
impact, the vision prescribes for the Group to create and supply functional products and services that 
reduce the environmental footprint of society. Acting in accordance with Omron’s core corporate value 
of “Working for the beneﬁt of society,” we will promote more encompassing environmental 
management to contribute to the realization of a sustainable society that recycles.

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

Expanding Environmental Contribution  

The growth of our PV inverter operations contributed greatly to the expansion of 
environmental contribution.

■ CO2 Emissions Volumes and 
　Environmental Contribution

■ Distribution of Environmental Contribution by Source
   (Fiscal 2013)

t-CO2
800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

90,000 
tons of CO2
Other

Environmental
Contribution
by Source 
(Fiscal 2013)

670,000 

tons of CO2

580,000 
tons of CO2
PV inverters

External Recognition of Environmental Impact Reduction Activities  

Omron’s efforts to reduce the environmental impact of its production sites have been highly 
evaluated on a global scale, with the Company recently receiving the Grand Prize for the Global 
Environment Award in Japan and the Prime Minister’s Hibiscus Award in Malaysia.

Improving Productivity and Saving Energy 
through Eco-Monozukuri̶23rd Grand Prize 
for the Global Environment Award

Reducing Environmental Impacts at 
Production Sites̶Environmental Award 
from the Malaysian Government

Omron was presented with the Japan Business 
Federation Chairman’s Award at the 23rd Grand 
Prize for the Global Environment Award in 
recognition of its promotion of eco-monozukuri, 
which entails coordination between production 
divisions (electricity users) and facility divisions 
(providers of electricity) to boost productivity and 
quality while reducing electricity usage. We will 
further advance eco-monozukuri to contribute to  
the environment by supplying society with energy-
saving products and services.

In December 2013, OMRON MALAYSIA SDN. 
BHD. (OMB) received the Prime Minister’s 
Hibiscus Award from the Malaysian government. 
This environmental award was presented to 
OMB in recognition of its efforts to reduce the 
environmental impact. We see the receipt of 
this prestigious honor as an opportunity to 
further advance energy-saving activities while 
stepping up education activities targeting 
plant workers.

Clean room that realized energy savings and improved productivity by reducing 
ﬂoating particles

Receipt of the Hibiscus Award from the Deputy Prime Minister of Malaysia (center)

Reducing Environmental Impacts across the Value Chain

To track the environmental impacts of its businesses across the entire value chain, in ﬁscal 2013  
Omron began employing the Greenhouse Gas Protocol (GHG Protocol), an international accounting and 
disclosure tool for greenhouse gas emissions, based on Scope 1, Scope 2, and Scope 3 of the GHG Protocol.

GHG
Protocol

Scope 1

Explanation

Examples

Direct emissions, including those from 
internal fuel combustion and industrial 
processes

・Emissions from combustion of fuel (city gas, kerosene, etc.) 

 at operating sites

・Greenhouse gas emissions from manufacturing*

Scope 2

Indirect emissions from consumption 
of purchased electricity, heat, or steam

・ CO2 emissions by power companies resulting from electricity used 
  at operating sites

Scope 3

Other indirect emissions

・Emissions resulting from steps required to produce purchased raw  

 materials and products as well as items related to purchased 
 products

・Emissions resulting from electricity consumed during usage of sold  

 products by users (consumers / businesses)

(FY)

2010

2011

2012

2013

CO2 emissions from production sites

Environmental contribution

PV inverters

Other

＊ Perﬂuorocarbons (PFCs), sulfur hexaﬂuoride (SF6), hydroﬂuorocarbons (HFCs), etc.

64

65

About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionOmron CorporationIntegrated Report  2014Third-Party Greenhouse Gas Emissions Veriﬁcation Statement

The Company received a Greenhouse Gas Emissions Veriﬁcation Statement from third-party 
organization Bureau Veritas Japan Co., Ltd., thereby verifying the reliability of its greenhouse 
gas emissions reports. The statement, which follows, declares that the Company has accurately 
collected, calculated, and disclosed emissions data in accordance with Scope 1, Scope 2, and Scope 
3 of the GHG Protocol. Going forward, Omron will utilize the results of its calculations to conduct 
more-effective emission reduction activities.

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 
management transparency. To ﬁrmly establish a high standard of corporate ethics, we will continue to enhance 
our compliance system and strengthen the risk management framework that supports ongoing improvement in 
corporate value.

Corporate Governance

Basic Policies  
At Omron, senior management has realized the im-
portance of corporate governance for many years and 
has progressively developed foundations for support-
ing good corporate governance. As such, Omron has 
worked to drive the spread of such foundations in 
Japan and other countries by having ofﬁcials assuming 
principal posts in relevant external organizations and 
through other means.
  Omron’s basic policy is to fortify corporate gov-
ernance 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 

■ Corporate Governance Initiatives

(a supervisory system) for such veriﬁcation and realiz-
ing sustainable growth.

In line with this basic policy, Omron has adopted an 
executive ofﬁcer system and clearly separates manage-
ment oversight and business execution. Under an inter-
nal company system, Omron is realizing faster decision 
making and efﬁcient business operations by delegating 
substantial authority to the president of each internal 
company. Moreover, autonomous individual business 
units that can specialize in creating value for customers 
take the initiative in conducting business. At the same 
time, through commitment-based management, we 
clarify roles and responsibilities and practice corporate 
value management based on shareholder value.

President

Chairman of the Board 
of Directors / CEO

Separation of 
management 
oversight and 
business execution

Advisory Board

Outside Directors

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 

2001

One
member

2003– Two members (seven directors)

Audit & Supervisory Board
members (independent)

One
member

1999– Two members

2003– Three members (four auditors)

2011– Two members (four auditors)

1996– Management Personnel 
Advisory Committee

2000– Personnel Advisory Committee

Advisory Committees

2003– Compensation Advisory Committee

Corporate
Philosophy

Omron Principles
formulated in 1990 

Revised in 1998

Revised in 2006

2006– CEO Selection Advisory Committee

2008– Corporate Governance Committee

66

67

1998Corporatemottoformulatedin 1959About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionOmron CorporationIntegrated Report  2014 
 
Management and Oversight Frameworks  

Omron is a “Company with Audit & Supervisory 
Board.” The corporate governance regime has a su-
pervisory 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 efﬁcient and 
meaningful discussion.

In order to strengthen management oversight functions 

and separate these functions from business execution, 
the Company has appointed multiple outside and inde-
pendent directors, thereby ensuring that directors concur-
rently fulﬁlling business execution roles do not represent 
a majority in the Board of Directors. In this manner, we 
are improving corporate governance functionality.
  To increase objectivity in management and to bolster 

management oversight function of the Board of Direc-
tors, the positions of chairman of the Board of Director 
and president and CEO are separated. The chairman of 
the Board of Directors monitors business execution activ-
ities as a representative of the Company’s stakeholders. 
  Furthermore, Omron has established the Person-
nel 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.

■ Corporate Governance Structure

Shareholders’ Meeting

Audit & Supervisory Board

Board of Directors

Chairman: Chairman of the Board

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

＊   These committees include: 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 man-
agement targets and strategies.

Audit & Supervisory Board
This board oversees the corpo-
rate governance system and its 
implementation and audits the 
day-to-day operations of direc-
tors and other executives.

Compensation Advisory 
Committee
This committee, chaired by an 
outside director, determines 
the compensation structure for 
directors and executive ofﬁcers, 
sets evaluation standards, and 
evaluates current executives.

Corporate Governance 
Committee
This committee, chaired by an 
outside director, discusses mea-
sures to continuously enhance 
corporate governance and in-
crease fairness and transparency 
in management.

CEO Selection Advisory 
Committee
This committee, chaired by an 
outside director, is dedicated to 
the nomination of presidents 
and CEOs and deliberates on 
the selection of the new presi-
dent and CEO for the upcoming 
term and on preparing contin-
gency succession plans.

Personnel Advisory 
Committee
This committee, chaired by an 
outside director, sets election stan-
dards for directors and executive 
ofﬁcers, selects candidates, and 
evaluates current executives.

Executive Council
This council discusses and 
determines important business 
operation matters that are with-
in the scope of authority of the 
president and CEO.

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 gov-
ernance regime. The Internal Audit Division, which reports 

directly to the president and CEO, periodically conducts in-
ternal 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 speciﬁc advice 
for improving business functions.

Appointment of Outside Executives  
To allow the Board of Directors to monitor business 
execution as a representative of the Company’s stake-
holders, two of the seven directors are outside direc-
tors and two of the four Audit & Supervisory Board 
members are outside members.
  Emphasizing the independence of outside execu-
tives, Omron has formulated its own original Outside 
Executive Eligibility Criteria in addition to the require-
ments under Japan’s Corporate Law.
  Also, the Corporate Governance Committee takes 
steps to conﬁrm the Outside Executive Eligibility 
Criteria do not pose any problem with respect to deter-
mination criteria concerning independence formulated 
by the appropriate stock exchange. After obtaining a 
resolution of the Board of Directors, notiﬁcations are 
submitted with the appropriate stock exchange for all 
outside executives as independent ofﬁcers.

■ Number of Major Meetings Held 
   and Rates of Attendance (Fiscal 2013)  

Meetings of the Board of Directors: 13
Meetings of the Audit & Supervisory Board: 13
Attendance of outside directors 
　at meetings of the Board of Directors: 96%
Attendance of Audit & Supervisory Board 
　members (independent) at meetings  
　of the Board of Directors: 100.0%
Attendance of Audit & Supervisory Board 
　members (independent) at meetings  
　of the Audit & Supervisory Board: 96%

Note: For Outside Directors and Audit & Supervisory Board members (independent) 

that assumed their positions in June 2013, attendance is for meetings of the 
Board of Directors and the Audit & Supervisory Board held on and after June 20, 
2013.

■ Appointments of Directors and Audit & Supervisory Board Members　

Position

Name

Chairman of the Board

Fumio Tateishi

Representative Director and 
President and CEO

Representative Director and 
Executive Vice President

Director and Executive  
Vice President

Director

Outside Director 

Outside Director 

Audit & Supervisory Board 
Member (Full-time)

Audit & Supervisory Board 
Member (Full-time)

Audit & Supervisory Board 
Member (Independent) 

Audit & Supervisory Board 
Member (Independent) 

Yoshihito Yamada

Yoshinori Suzuki

Akio Sakumiya

Koji Nitto

Kazuhiko Toyama◆

Eizo Kobayashi◆

Masayuki Tsuda

Tokio Kawashima

Eisuke Nagatomo◆

Yoshifumi Matsumoto◆

◎ Indicates Chairperson　◆ Independent Ofﬁcer

Personnel 
Advisory 
Committee

CEO Selection 
Advisory 
Committee

Compensation 
Advisory 
Committee

Corporate 
Governance 
Committee

○

○

◎

○

○

○

◎

○

○

○

○

◎

◎

○

○

○

68

69

About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionOmron CorporationIntegrated Report  2014 
Financial Incentives for Directors and Audit & Supervisory Board Members  

implementing the Company’s motto and the Omron Principles.

As part of its drive to strengthen the governance of 
compensation for its Directors, in June 2014 the 

gradual manner, in order to increase the Directors’ 

motivation to attain the performance targets.

Company introduced medium-term, performance-linked 

  The performance-linked stock acquisition rights are 

bonuses in an effort to give Directors incentive to 

issued with charge, and are exercisable only when the 

achieve medium-term management targets. This 

pre-assigned criteria of the Company’s consolidated 

incentive was also accompanied by the issuing of 

ﬁnancial results are met, and according to the extent to 

performance-linked stock acquisition rights to Directors. 

which the performance targets are achieved. Because 

  The medium-term, performance-linked bonuses shall 

the stock acquisition rights are not favorable for 

be paid to Directors based on the level of achievement 

individuals who are allotted these rights, they do not fall 

of performance targets set forth in the medium-term 
management plan for the EARTH-1 STAGE. The target 
value is ¥90 billion in consolidated operating income  
for ﬁscal 2016, the ﬁnal year of the medium-term 

management plan. Along with this target value, 

minimum and maximum target values were set to 

further increase Directors’ motivation toward meeting 

the medium-term performance targets. 

under the category of compensation for Directors. 

  Through the introduction of these new initiatives, the 

Company’s governance system regarding compensation 
for Directors and other incentive plans covers: 1) a base 

salary paid for the roles and responsibilities as Directors; 
2) yearly performance-linked bonuses based on the level 

of achievement of short-term management plan targets; 
and 3) incentives linked with increases in corporate 

  The performance-linked stock acquisition rights  

value and awarded according to the level of achieve- 

were issued under the condition of the achievement  

ment of performance targets set forth in the medium-

of medium-term management targets and a rise in the 

Company’s stock price. The objectives are to create 

term management plan, which was established to meet 
the goals of the VG2020 long-term strategy. These 

medium-to-long-term shareholder value, and to 

include medium-term performance-linked bonuses, 

encourage Directors to own shares of the Company. The 

performance-linked stock acquisition rights, and stock 

target value to be used as the basis for conditions for 
exercising stock acquisition rights shall be ¥900 billion in 
consolidated net sales set for ﬁscal 2016, the ﬁnal year 

compensation. Through this compensation structure, the 

Company intends to enhance Directors’ motivation to 

attain management goals in the short, medium, and 

of the Company’s medium-term management plan. In 

long terms. 

addition to this target value, the Company set forth 

  The basic principles and policy for compensation for 

minimum and maximum target values, varying the 

Directors and Executive Ofﬁcers are as follows:

percentage of exercisable stock acquisition rights in a 

 

Basic Principles of Compensation for Directors and Executive Ofﬁcers

● Compensation for Directors and Executive Ofﬁcers shall be based on the implementation of the Company’s motto 

and corporate principles (the Omron Principles).

● The Company shall pay compensation sufﬁcient to recruit, hire and maintain exceptional personnel as managers.  
● The compensation structure shall contribute to long-term maximization of corporate value by providing motivation  

for Directors and Executive Ofﬁcers.  

● The compensation structure shall maintain a high level of transparency, fairness and rationality, to ensure account 

ability to shareholders and other stakeholders. 
● To ensure transparency, fairness and rationality in the compensation for individuals, each Director / Executive 

Ofﬁcer’s compensation shall be set by consultation with the Compensation Advisory Committee.

● The purpose of compensation shall be made clear, and a compensation plan shall be created according to the roles 

and responsibilities of each Director / Executive Ofﬁcer.

● Compensation for Directors shall consist of a base salary, yearly performance-linked bonuses, and medium-to-long-term, 

performance-linked compensation. 
● The Company shall provide base salaries sufﬁcient to recruit, hire and maintain exceptional personnel capable of  

Compensation Policy for Directors

● The Company shall provide yearly performance-linked bonuses as performance incentives with emphasis on yearly results.

- The amount of yearly performance-linked bonuses shall be based on a standard amount for each position, and shall be 
determined according to the degree of achievement and growth rate for evaluation indicators for bonuses, including 
income before income taxes, return on invested capital (ROIC), net income attributable to shareholders, and cash 
dividends per share. 

● To ensure thorough implementation of the Company’s long-term management plan, the Company shall provide the  

following two types of compensation linked to medium-to-long-term performance as incentives for meeting medium- 
term management targets. 

- The Company shall pay medium-term, performance-linked bonuses depending on the achievement of medium-term 

management targets.

- The Company shall grant stock compensation*1 as compensation linked to maximization of corporate value (share-

holders’ value).

● Separate from the compensation stated above, the Company shall issue performance-linked stock acquisition rights*2.

- Performance-linked stock acquisition rights shall be issued under the condition of the achievement of medium-term 
management targets by Directors and a rise of the Company’s stock price. The objectives are to create medium-to-
long-term shareholder value and encourage Directors to own shares of the Company. 

● Compensation for outside directors shall consist of a base salary only, reﬂecting their roles and the need for 

maintaining independence.

● No retirement bonuses shall be paid.
● The level of compensation shall be determined by taking into account the levels of other companies surveyed  

by a specialized outside organization.

*1 The guidelines for stock compensation shall consist of a fixed amount of compensation given each month to Directors, who will use it to make monthly 

purchases of the Company’s stock (through the officers’ stockholding association) and hold this stock during their term of office.

*2 The performance-linked stock acquisition rights are issued with charge at a price equivalent to the fair value of the stock acquisition rights, thus the amount to 

be paid in exchange for stock acquisition rights is not favorable for individuals who are allotted the stock acquisition rights. Because of this, the stock acquisition 
rights do not fall under the category of compensation for Directors, and thus they shall be issued via a resolution by the Company’s Board of Directors. 

Compensation Policy for Audit & Supervisory Board Members

● Compensation for Audit & Supervisory Board Members shall consist only of a base salary that reﬂects their roles.  

It shall be sufﬁcient to recruit, hire and maintain excellent personnel.  

● No retirement bonuses shall be paid.
● The level of compensation shall be determined by taking into account the levels of other companies surveyed  

by a specialized outside organization.

■ Fiscal 2013 Director and Audit & Supervisory Board Member Remuneration

To increase objectivity and transparency, the Compensation Advisory Committee, chaired by an outside director, is consulted on 
the compensation of directors. This committee discusses the compensation of each individual and makes recommendations.
  After receiving these recommendations, the amount of 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 all directors and all Audit & Supervisory Board members, as each has been set 
by a resolution of the General Meeting of Shareholders.

(Millions of yen)

Classiﬁcation

Number of People

Basic Compensation

Bonuses

Total Remuneration

Director 
(Outside Directors)

Audit & Supervisory Board members 
(Independent)

Total 
(Outside Executives)

9
（3） 

6
（3）

15
（6）

344
（23）

82
（18）

426
（41）

194
（−）

−
（−）

194
（−）

538
（23）

82
（18）

620
（41）

Notes: 1.  Director compensation consists of basic compensation, bonus, and stock-based compensation.

2. Outside director compensation consists of basic compensation.
3. The above basic compensation of Directors includes the amount paid as stock compensation to Directors, excluding Outside Directors.
4. Audit & Supervisory Board member compensation consists of basic compensation.

70

71

About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionOmron CorporationIntegrated Report  2014Internal Controls

Message from an Outside Director

Maintaining Internal Controls to Ensure Healthy and Effective Operations  

Omron has established the Basic Policy on the Mainte-
nance of Internal Controls to ensure the healthy and effec-
tive operation of its organization. This policy provides the 
basis for the maintenance and operation of internal con-
trols throughout the Omron Group to ensure the controls 
are functioning effectively in each of the four objective 
areas of ﬁnancial report accuracy, legal compliance, operat-
ing efﬁciency, and asset safeguarding.
  Omron maintains a monitoring system undertaken by 

the Internal Audit Division after each division and sub-
sidiary conducts its own review of the maintenance and 
operation of business processes in accordance with the 
Internal Control Reporting System (J-SOX) requirements 
of Japan’s Financial Instruments and Exchange Act, pro-
mulgated in June 2006. The reviews enable each division 
and subsidiary to deepen its own understanding of the inter-
nal controls associated with ﬁnancial 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.
  One is the Internal Control Audit to ensure whether 
the internal controls are functioning effectively in each of 
the four objective areas of ﬁnancial report accuracy, legal 
compliance, operating efﬁciency, and asset safeguarding. 
The other is the Management Audit, which examines 
the solutions and improvement measures implemented 
for speciﬁc management issues. In the event the results 
of these audits include items recommended for 

improvement, the Company supports measures to 
carry out the improvements.

In addition, the Omron Group has established the 
Internal Divisions Audit and placed full-time auditors in 
each of its four regions of global business̶Americas, 
Europe, Greater China*, and Asia Paciﬁc̶to implement 
internal audits at its business sites worldwide based on 
local practices and legal systems and in accordance with 
globally standardized audit policies.

* Greater China: China, Hong Kong, and Taiwan

Strengthening Compliance and Risk Management on a Global Scale  

Compliance and Risk Management

The Omron Group faces various risks related to com-
pliance, regulations, and other issues in its business 
operations. In order to address these risks, we employ 
an approach called Integrated Global Risk Management, 
which manages information and countermeasures in an 
integrated and global manner.
  The basic provisions for Integrated Global Risk Manage-
ment are deﬁned in the Basic Policy on the Maintenance 
of Internal Controls by the Board of Directors. Further, 
the Basic Rules of Integrated Global Risk Management 
describe the framework for risk management initiatives, 
and this framework is applied to all Omron Group compa-
nies around the world.
  To enhance these activities, the Corporate Ethics & 
Risk Management Committee has been established. 
Through the committee, various risk countermeasures are 
discussed and implemented by members from the cor-
porate headquarters and business companies as well as 
from overseas regional head ofﬁces. In addition, we have 
appointed risk managers to take charge of compliance and 
risk management at all Omron Group companies around 
the world, and we are utilizing our global network to quick-
ly share risk information and discuss countermeasures on 
a daily basis.

  A speciﬁc initiative of Integrated Global Risk Manage-
ment is the identiﬁcation of Group Critical Risks. Every 
year, we identify and analyze the risks that the Omron 
Group faces from a global perspective. We assess these 
risks and categorize the most signiﬁcant risks into S 
rank and those less signiﬁcant risks into A rank. We then 
establish plans for risk countermeasures to be imple-
mented throughout the entire Company via the Executive 
Council. After veriﬁcation and correction, the results are 
reported to the Board of Directors and ﬁnally disclosed. 
In other words, this process forms the risk management 
PDCA cycle. For ﬁscal 2014, S-rank risks include busi-
ness continuity risk and violation of laws, such as bribery. 
A-rank risks include internal fraud, CSR non-compliance 
(Electronic Industry Citizenship Coalition (EICC), conﬂict 
minerals, and occupational health and safety), and global 
IT governance risk.

In ﬁscal 2014, we will further strengthen the Integrated 
Global Risk Management PDCA cycle and more intensive-
ly integrate it into our business activities to enhance risk 
management initiatives. In particular, we will redouble our 
efforts overseas, using the central role of regional head 
ofﬁces to carry out risk management in accordance with 
regional conditions.

Cultivation of 
Responsiveness  
and Management ̶
Execution Capabilities 
from a Global 
Perspective

Expectations of an Outside Director
I assumed the position of outside director of Omron 
in June 2013, and one year has since passed.
  Omron is a manufacturer, whereas I am from 
a general trading company. I believe that the 
Company’s expectation is for me to give suggestions 
and advice that will help cultivate the responsiveness 
and the management-execution capabilities needed 
to advance steadily toward the achievement of 
Omron’s goals. And I am expected to do this while 
quickly and accurately ascertaining changes in the 
operating environment from a global standpoint. 

I therefore hope to support Omron’s management 

in achieving the goals of the VG2020 long-term 
management strategy, and I will accomplish this  
by fulfilling my duties as an outside director.

Revision of Executive Compensation 
Systems
When I became an outside director, I also assumed 
the role of chairman of the Compensation Advisory 
Committee. In this capacity, I have advanced 
vigorous discussions aimed at better governing 
executive compensation at Omron.
  Omron’s management strategies had defined 
medium-to-long term targets, but the Company 
lacked compensation systems for directors that 
were linked to the accomplishment of these targets. 
I therefore felt that Omron needed better governance 

for executive compensation if it was to pursue 
sustainable growth. For this reason, I initiated efforts 
aimed at a revision of compensation systems.
  As new systems, we introduced medium-term, 
performance-linked bonuses that will be adjusted 
based on progress toward achieving medium-term 
management targets. We also issued stock options with 
performance-linked exercise conditions to encourage 
directors to hold a stake in the Company and pursue 
medium-to-long-term improvements in shareholder 
value. I feel that these systems have effectively 
reinforced the governance of director compensation.
  The strengthening of governance must not 
remain confined to executive compensation and 
other internal systems. Governance systems must 
be made effective before they can contribute 
to improved corporate value, which is their 
ultimate goal. For this reason, I help to verify 
the effectiveness of the initiatives of the Board 
of Directors and the Company’s various advisory 
committees through active participation while 
simultaneously providing suggestions for further 
reinforcing corporate governance at Omron.

July 2014

Outside Director 
Eizo Kobayashi
Chairman, ITOCHU Corporation

72

73

About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionOmron CorporationIntegrated Report  2014 
 
 
Directors, Audit & Supervisory Board Members,  
and Honorary Chairman

As of June 24, 2014

Directors

Chairman of the Board　Fumio Tateishi
August  1975  Joined Omron
June 1997  Director
June 1999  Retired as Director, Managing Executive Ofﬁcer
June 2001  Senior General Manager of Corporate Strategy 

Planning HQ

June 2003  Executive Ofﬁcer 

and Executive Vice 
President, and President 
of Industrial Automation 
Company
June 2008   Executive Vice Chairman
June 2013  Chairman of the Board
  (to present)

President and CEO　Yoshihito Yamada
April 1984 
June 2008  Executive Ofﬁcer and 
President and CEO of 
OMRON HEALTHCARE Co., Ltd.

Joined Omron

March 2010  Senior General Manager of 

Corporate Strategy Planning HQ

June 2010  Managing Executive Ofﬁcer
June 2011  President and CEO

 (to present)

Executive Vice President and CFO　
Yoshinori Suzuki
April 1975 
June 2003  Executive Ofﬁcer and Senior General Manager 
of Corporate Strategy Planning HQ

Joined Omron

June 2006  Managing Executive Ofﬁcer
March 2007  President of Automotive Electronic 
Components Company
May 2010  President and CEO of 
OMRON Automotive 
Electronics Co., Ltd.

April 2013  Senior Managing Executive 
Ofﬁcer and CFO

June 2013  Senior Managing Director 

and CFO 

June 2014  Executive Vice President 

and CFO (to present)

Executive Vice President　Akio Sakumiya
April 1975   Joined Omron
June 2003   Executive Ofﬁcer 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 Ofﬁcer
June 2011   Senior Managing Director 
June 2014   Executive Vice President 
(to present)

Director, Senior Managing Ofﬁcer　Koji Nitto
April 1983 
March 2011  Senior General Manager of Global Resource 

Joined the Omron

Management HQ 
June 2011  Executive Ofﬁcer 
March 2013  Senior General Manager of Global 

SCM and IT Innovation HQ 
April 2013  Managing Executive Ofﬁcer 
March 2014  Senior General Manager 

of Global Strategy HQ 
(to present) 

April 2014  Senior Managing 
Executive Ofﬁcer 
(to present)

June 2014  Director of Omron

 (to present)

Outside Director　Kazuhiko Toyama
April 1985 
Joined Boston Consulting Group, Inc.
April 1986  Established Corporate Direction Co., Ltd.
March 1993  Director
April 2000  Managing Director
April 2001  President and CEO
April 2003  Senior President and COO 
of Industrial Revitalization 
Corporation of Japan (IRCJ)

April 2007  President and CEO 
of Industrial Growth 
Platform, Inc. (to present)

June 2007  Director of Omron 

(to present)

Joined ITOCHU Corporation

Outside Director　Eizo Kobayashi
April 1972 
June 2000  Executive Ofﬁcer
April 2002  Managing Executive Ofﬁcer
June 2003  Representative Director and 

Managing Director

April 2004  Representative Director and 

Senior Managing Director

June 2004  President and CEO
April 2010  Chairman and 

Representative Director

June 2011  Chairman (to present)
June 2013  Director of Omron 

(to present)

Audit & Supervisory Board Members

Honorary Chairman

Honorary Chairman　Yoshio Tateishi
August 1963  Joined Omron
May 1973  Director
June 1976  Managing Director
June 1983  Senior Managing Director
June 1987  President and CEO
June 2003  Representative 

Director and Chairman 
of the Board

May 2007  Chairman of Kyoto 

Chamber of Commerce 
and Industry (to present)

June 2011  Honorary Chairman 

(to present)

Audit & Supervisory Board Member (Full-time)　
Masayuki Tsuda
April 1977 
June 2008  Executive Ofﬁcer
September   Chairman and President of OMRON 
  2008 

Joined Omron

ELECTRONIC COMPONENTS
(SHENZHEN) LTD.

March 2013  Senior General Manager 

June 2013 

of Global Internal 
Auditing HQ
 Audit & Supervisory 
Board Member 
(Full-time) 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  Regional Head for 
  2008 

Germany and General 
Manager, Düsseldorf

April 2011  Retired from The Bank of 
Tokyo-Mitsubishi UFJ, Ltd.
Joined Omron

April 2011 
June 2011  Audit & Supervisory 

Board Member 
(Full-time) of Omron
(to present)

Joined Tokyo Stock Exchange

Audit & Supervisory Board Member (Independent)　
Eisuke Nagatomo
April 1971 
November   Executive Ofﬁcer
  2001
June 2003  Managing Director
June 2007  Advisor
October  
  2007 
June 2008  Audit & Supervisory 

Representative Director of EN 
Associates Co., Ltd.  (to present)

Board Member
(Independent) of Omron
(to present)

Audit & Supervisory Board Member (Independent)　
Yoshifumi Matsumoto
April 1989  Registered as attorney with Osaka Bar Association; 
Joined Miyake Law Ofﬁce (now Miyake & Partners)
Partner (to present)

January 
   1996
June 1997  Registered as patent attorney 
with Japan Patent 
Attorneys Association

June 2013  Audit & Supervisory 

Board Member 
(Independent) of 
Omron (to present)

74

75

About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionOmron CorporationIntegrated Report  2014 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Executive Ofﬁcers

Senior Managing Ofﬁcer

Yutaka Miyanaga

Company President, 
Industrial Automation Company

Managing Ofﬁcers

Masaki Arao

Senior General Manager,
Technology & Intellectual 
Property HQ

Kiichiro Kondo

President and CEO, 
OMRON SOCIAL 
SOLUTIONS Co., Ltd.

Kiichiro Miyata

President and CEO,
OMRON HEALTHCARE Co., Ltd.

Katsuhiro Wada

President and CEO,
OMRON Automotive 
Electronics Co., Ltd.

Shizuto Yukumoto

Senior General Manager,
Environmental Solutions 
Business HQ

Kenji Matsunami

Company President, 
Electronic and Mechanical 
Components Company

Executive Ofﬁcers

Shigeki Fujimoto

Business Development Executive

Koji Doi　

Chairman and President,
OMRON (CHINA) Co., LTD.

Takashi Ikezoe

Senior General Manager,
Industrial Components Division HQ
Industrial Automation Company, and
Chairman, OMRON (SHANGHAI) Co., LTD.

Kiyoshi Yoshikawa

Senior General Manager,
Global Manufacturing Innovation HQ

Satoshi Ando

Senior General Manager,
Investor Relations HQ

Yoshihiro Taniguchi

Representative Director, President and CEO, 
OMRON SWITCH & DEVICES CORPORATION

Toshio Hosoi

Managing Director, Senior General Manager, 
Solution Business HQ
OMRON SOCIAL SOLUTIONS Co., Ltd.

Takayoshi Oue

Senior General Manager, 
Global Finance and Accounting HQ

Isao Ogino

Director, Executive Vice President, 
OMRON HEALTHCARE Co., Ltd.

Masanori Takahashi

Representative Director and CEO, 
OMRON RELAY & DEVICES CORPORATION

Izumi Echizen

Senior General Manager, 
Global Resource Management HQ

Hideji Ejima

General Manager, Business Planning Department,  
and General Manager, Application Engineering Center, 
Environmental Solutions Business HQ

Seigo Kinugawa

Senior General Manager, 
Strategy Planning Division HQ
Industrial Automation Company

Takashi Kitagawa

Senior General Manager, 
Board of Directors Ofﬁce

Nigel Blakeway　

Masahiko Tomita

Chairman, President and CEO, 
OMRON MANAGEMENT CENTER OF AMERICA, INC., and 
Chairman and CEO, OMRON ELECTRONICS, LLC.

General Manager, 
Corporate Planning Department, 
Global Strategy HQ

Goshi Oba　

Chairman and President, 
OMRON INDUSTRIAL AUTOMATION
(CHINA) Co., Ltd.

76

77

About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionOmron CorporationIntegrated Report  2014Financial Section (U.S. GAAP)

  79 

Financial Highlights

  80 

Six-Year Summary

  81 

Fiscal 2013 Management’s Discussion and Analysis

  86 

Business and Other Risks

  88 

Consolidated Balance Sheets

Thousands of

U.S.dollars (Note 2)

(except per share data)

Financial Highlights 

Omron Corporation and Subsidiaries
Years ended March 31, 2014, 2013 and 2012  

For the year:

Net sales 

Millions of yen
(except per share data)

Thousands of
U.S.dollars (Note 2)
(except per share 
data)

FY2011

FY2012

FY2013

FY2013

¥619,461

¥650,461

¥772,966

$7,504,524

Income before income taxes and equity in earnings of afﬁliates 

33,547

41,237

62,007

602,010

Net income 

16,352

30,117

46,314

449,650

Net income attributable to shareholders 

16,389

30,203

46,185

448,398

Per share data (yen and U.S. dollars):

    Net income attributable to shareholders

　　 Basic

　　 Diluted 

74.46

74.46

137.20

137.20

209.82

ー

2.04

ー

  90 

Consolidated Statements of Income

　Cash dividends (Note 1) 

28.0

37.0

53.0

0.51

  91 

Consolidated Statements of Comprehensive Income (Loss)

  92 

Consolidated Statements of Shareholders’ Equity

  93 

Consolidated Statements of Cash Flows

For more detailed information, please refer to the Company’s Audited Annual Financial Report:
http://www.omron.com/ir/irlib/annual.html

Capital expenditures (cash basis) 

Research and development expenses

27,502

42,089

30,383

43,488

32,218

47,928

312,796

465,320

At year end:

Total assets 

537,323

573,637

654,704

6,356,350

Total shareholders’ equity

320,840

366,962

430,509

4,179,699

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, 2014, of ¥103 = $1.

78

79

Omron CorporationIntegrated Report  2014About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial Section 
Six-Year Summary 

Omron Corporation and Subsidiaries　
Years ended March 31

Net sales (Notes 2, 3):
　 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
　(excluding research and development expenses) 
　Research and development expenses
　Other expenses, net

Income (loss) before income taxes and 
equity in loss (earnings) of afﬁliates
Income taxes
Equity in loss (earnings) of afﬁliates
Income (loss) from continuing operations
Net income (loss)
Net income (loss) attributable to shareholders
Per share data (yen):
　Income (loss) from continuing operations
　　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 (%) 
　ROIC (Return on invested capital) (%)
　ROE (Return on equity) (%) 
　ROA (Return on asset) (%) 
　Assets turnover (times) 
　Inventory turnover (times) 
　Debt / Shareholders’ equity ratio (times) 

FY2008

FY2009

FY2010

FY2011

FY2012

FY2013

Millions of yen (except per share data)

¥271,204

¥203,917

¥271,894

¥270,835

¥262,983

¥291,739

76,494

70,717

81,216

83,002

84,107

97,699

82,109

75,163

84,259

85,027

97,643

126,620

72,336

63,592

50,989

10,466

57,981

63,359

43,592

9,965

63,846

60,629

49,672

6,309

57,200

62,446

53,535

7,416

68,754

71,520

59,240

6,214

82,695

89,275

78,949

5,989

627,190

524,694

617,825

619,461

650,461

772,966

408,668

340,352

386,123

391,574

408,954

475,758

164,284

133,426

142,365

145,662

152,676

181,225

48,899

44,472

37,842

2,879

41,300

6,344

42,089

6,589

43,488

4,106

47,928

6,048

666,323

514,499

576,132

585,914

609,224

710,959

 (39,133)
(10,495)

811

(29,449)

(277)

(29,172)

 (132.2)

ー

25.0

37,477

538,280

298,411

34.8

(6.2)

(4.7)

(7.6)

(8.7)

(6.8)

1.1

4.5

0.80

10,195
3,782

2,792

3,621

103

3,518

16.0

16.0

17.0

20,792

532,254

306,327

41,693
14,487

190

27,016

234

26,782

121.7

121.7

30.0

21,647

562,790

312,753

33,547
17,826

(631)

16,352

(37)

16,389

74.5

74.5

28.0

27,502

537,323

320,840

41,237
14,096

(2,976)

30,117

(86)

30,203

137.2

137.2

37.0

30,383

573,637

366,962

35.1

37.5

36.8

37.1

1.9

0.7

1.0

1.2

1.9

1.0

4.2

6.7

4.3

7.8

8.7

7.6

1.1

4.7

5.4

2.6

4.8

5.2

6.1

1.1

4.4

6.3

4.6

8.6

8.8

7.4

1.2

4.5

0.73

0.80

0.67

0.56

62,007
19,475

(3,782)

46,314

129

46,185

209.8

ー

53.0

32,218

654,704

430,509

38.5

8.0

6.0

11.3

11.6

10.1

1.3

5.0

0.52

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. Starting with ﬁscal 2010, the PV inverter business in the “Industrial Automation Business” was transferred to “Other.” The ﬁgures of the segment 

information for the prior years have been restated to conform with the current year presentation.

3. From ﬁscal 2009, the Companies adopted the ASC No. 280, “Segment Reporting.” The ﬁgures of the segment information for the prior years have 

been restated to conform with the current year presentation.

Fiscal 2013 Management’s Discussion and Analysis

Note: The business divisions are presented using their abbreviated names: Industrial  Automation Business (IAB), Electronic and Mechanical Components Busi-

ness (EMC), Automotive Electronic Components Business (AEC), Social Systems, Solutions and Service Business (SSB), and Healthcare Business (HCB).

Market Environment

Conditions held ﬁrm in principal markets related to 
the Omron Group, both in Japan and overseas. In the 
automotive sector, domestic capital investment showed 
recovery and market conditions were support by strong 
component demand in Japan and emerging countries. 
Domestic capital investment related to semiconductors 
recovered due to the popularity of smartphones, and 
there were signs of potential improvements in domestic 
and overseas capital investment in machine tools. 
Conditions for consumer electronics and electronic 
components beneﬁted from increased capital investment 
and robust overseas component demand. Meanwhile, 
medical devices saw solid demand accompanying 

growing health awareness in emerging countries.

In foreign exchange, the Bank of Japan’s massive 
monetary easing policy caused the yen to depreciate 
rapidly against the U.S. dollar and the Euro. This trend 
buoyed the Group’s earnings. Yen depreciation also 
caused the price of copper to rise, while the price 
of silver continued to drop, as was the case in ﬁscal 
2012. The average exchange rates for ﬁscal 2013 were 
¥100.1 to the U.S. dollar, up by ¥16.9 from the previous 
ﬁscal year, and ¥134.0 to the Euro, a ¥26.4 year-on-
year rise. In raw material prices, the average price per 
kilogram of silver was ¥76,713, down by ¥6,329 year 
on year, and copper was ¥733 per kilogram, up by ¥47.

■ Index of Electronic Parts and Devices

■ Silver and Copper Prices

■ Exchange Rates

(Seasonally adjusted indices, 2010 average = 100)
200

175

150

125

100

75
≈
0

2011

2010
Production 
Inventory

2012
Shipments 

2013

（FY）

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

Yen
150
140
130
120
110
100
90
80
≈
0

2010

2011

2012

2013

（FY）

2010

2011

2012

2013

（FY）

Silver [left axis]

Copper [right axis]

USD

EUR

Overview of Consolidated Results and Financial Condition

Note: Segment operating income is prepared using the single-step method (which does not show individual income levels) based on U.S. GAAP. For an 

easier comparison with other companies, operating income represents gross proﬁt minus selling, general and administrative (SG&A) expenses and 

research and development (R&D) expenses.

In this market environment, the Omron Group’s 
consolidated net sales in ﬁscal 2013 rose by 18.8% 
year on year, to ¥773.0 billion, following large revenue 
improvements in all segments. The gross proﬁt margin 
improved as a result of lower ﬁxed costs in manufacturing 
operations and reduced variable costs. Combined with 
higher sales, this improvement resulted in operating 
income rising by 50.1%, to ¥68.1 billion; income before 
income taxes and equity in earnings of afﬁliates increasing 
by 50.4%, to ¥62.0 billion; and net income attributable to 
shareholders growing by 52.9%, to ¥46.2 billion. In this 
manner, the signiﬁcant increases in income ﬁgures seen 
in ﬁscal 2012 continued in ﬁscal 2013.

  Total assets rose by 14.1% from the end of the previous 
ﬁscal year, to ¥654.7 billion, mainly due to increased cash 
and cash equivalents and notes and accounts receivable–
trade. Total shareholders’ equity was up by 17.3%, to 
¥430.5 billion, as a result of foreign currency translation 
adjustments as well as the substantial increase in net 
income attributable to shareholders. This led to a rise in the 
shareholders’ equity ratio, to 65.8%, from 64.0% at the 
end of the previous ﬁscal year.
  Return on equity (ROE) stood at 11.6%, and return on 
invested capital (ROIC) was 11.3%, both percentages 
up from 8.8% and 8.6%, respectively, in the previous 
ﬁscal year.

■ Net Sales and Income before 
Income Taxes and Equity in  
Earnings of Afﬁliates

■ Net Income Attributable 
to Shareholders and ROE

■ Shareholders’ Equity and Ratio of 

Shareholders’ Equity to Total Assets

Billions of yen
160

773.0

Billions of yen
75

%
15

Billions of yen
500

Billions of yen
800

600

524.7

617.8

619.5

650.5

120

400

200

0

41.7

33.5

41.2

62.0

10.2

09

10

11

12

13 （FY）

80

40

0

50

25

0

26.8

8.7%

16.4

30.2

8.8%

5.2%

3.5

1.2%1.2%

09

10

11

12

11.6%

46.2

10

5

0
13 （FY）

400

300

200

100

0

306.3

312.8

320.8

57.6%

55.6%

59.7%

64.0%

367.0

430.5

65.8%

%
100

80

60

40

20

09

10

11

12

0

13 （FY）

当社株主に帰属する当期純利益［左軸］
Shareholders’ equity [left axis]
Ratio of shareholders’ equity to total assets 
[right axis]

株主資本利益率（ROE）［右軸］

81

80

Net sales [left axis]
Income before income taxes and equity in earnings 
of aﬃliates [right axis]

Net income attributable to shareholders

 [left axis]
ROE [right axis]

Omron CorporationIntegrated Report  2014About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial Section 
Review and Analysis of the Consolidated Statements of Income

■ Costs, Expenses, and Income as Percentages of Net Sales

Net Sales
In ﬁscal 2013, the Company advanced the core 
strategies of the maximization of the Industrial 
Automation (IA) business, growth in emerging markets, 
the completion of proﬁt structure reforms, and global 
human resources strengthening. The Group also 
implemented measures targeting medium-to-long-
term earnings improvements. As a result, sales in 
emerging countries increased, and net sales were up by 
¥122.5 billion year on year, or 18.8%, to ¥773.0 billion, 
accordingly.
  By region, sales grew by 8.4% in Japan, by 25.6% 
in the Americas, by 25.5% in Europe, by 34.0% in 
the Greater China region, and by 31.8% in the Asia 
Paciﬁc region. Performance in the Greater China region 
continued to lead other overseas segments in terms of 
both net sales and operating income.

Cost of Sales and SG&A Expenses
Cost of sales increased by 16.3% year on year 
following higher net sales, while the cost of sales ratio 
declined by 1.4 percentage points, to 61.5%. In ﬁscal 
2013, the average price per kilogram of silver was 
¥76,713, lower than the level of ¥83,042 seen in  
the previous ﬁscal year. The average price per kilogram 
of copper, conversely, rose, to ¥733 from ¥686 in  
ﬁscal 2012. 
  SG&A expenses increased by ¥28.5 billion, or 
18.7%, from the previous ﬁscal year, but the SG&A-
to-sales ratio remained relatively unchanged at 
23.5%. At the same time, R&D expenses were up 
by ¥4.4 billion, or 10.2%. This increase was due 
to the Company’s strategy of steadily conducting 
investments as necessary for future growth. The 
R&D-to-sales ratio, however, declined from the 
previous ﬁscal year’s 6.7%, to 6.2%.

Other Expenses
Other expenses, net, rose by ¥1.9 billion year on year, 
to ¥6.0 billion, due to an increase in foreign exchange 
loss, net. 

Income before Income Taxes and Equity in Earnings  
of Afﬁliates, Net Income Attributable to Shareholders, 
and Proﬁt Distribution
As a result of the previously mentioned factors, 
income before income taxes and equity in earnings of 
afﬁliates amounted to ¥62.0 billion, up by ¥20.8 billion 
from ¥41.2 billion recorded in the previous ﬁscal year. 
Likewise, net income attributable to shareholders was 
¥46.2 billion, up by ¥16.0 billion from the previous 
year’s ¥30.2 billion. Basic net income attributable to 
shareholders per share rose from ¥137.2 in ﬁscal 2012 
to ¥209.8 in ﬁscal 2013.
  The Company’s basic policy for dividend 
payments is to secure sufﬁcient internal capital 
resources for future growth while stably and continually 
improving shareholder returns. Speciﬁcally, the target 
dividend payout ratio was raised to more than 25% in 
ﬁscal 2013, and a ratio of 30% will be targeted for ﬁscal 
2016. The target for the dividend on equity (DOE) ratio 
will remain at 2% for the foreseeable future.

In accordance with this policy, the Company paid a 
total annual cash dividend of ¥53.0 per share, ¥16.0 
per share higher than in the previous ﬁscal year. The 
consolidated dividend payout ratio was 25.3%, and the 
DOE ratio was 2.9% in ﬁscal 2013.

■ Dividends per Share

Yen
60

50

40

30

20

10

0

8.5%
16.3%

12.1%
30
49.6%

8.4%
16.3%
12.4%
12.4%

28
50.5%

17

9.3%

37
18.4%
13.1%

13.1%
46.1%

53

東南アジア他

中華圏

欧州

北米
日本 * 直接輸出含む

09

10

11

12

13 （FY）

■ Consolidated Operating Income Analysis (YoY)

Net sales increase, 
GP margin improve

Fixed manufacturing
costs increase

–7.1

＋25.7

SG&A 
increase

–13.3

Billions of yen

R&D 
increase

–3.1

68.1

Forex, raw 
material costs

+20.6

45.3
45.3

FY2012
Actual

82

Gross proﬁt up ¥18.6 billion
(excluding forex and raw materials)

Operating income increase ¥22.8 billion

(including strategic
investment)

FY2013
Actual

Net sales

Cost of sales

Gross proﬁt 

Selling, general and administrative expenses

Research and development expenses

Other expenses, net

Income before income taxes and equity in earnings of afﬁliates

Income taxes

Net income attributable to shareholders

FY2010

FY2011

FY2012

FY2013

100.0%

100.0%

100.0%

100.0%

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

61.5

38.5

23.5

6.2

0.8

8.0

2.5

6.0

Notes: 1. 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 proﬁt minus SG&A expenses and R&D expenses.

2. 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.

Segment Information

1. Review of Operations by Business Segment  
Industrial Automation Business (IAB)
In Japan, IAB suffered from generally sluggish capital 
investment demand during the ﬁrst half of ﬁscal 2013. 
In the second half of the year, however, recovery was 
seen centered on the semiconductor and electronic 
component industries. Sales of new products also 
contributed to performance, and full-year domestic 
sales were up accordingly. Overseas, the impact of 
political unrest and currency devaluation in certain Asian 
countries resulted in low demand related to electronic 
component industries in China and reduced demand 
for exports from China. Conversely, the Americas saw 
second-half recovery in factory automation demand 
and in oil and gas related businesses. South Korea’s 
semiconductor, ﬂat panel display, and automobile 
industries also experienced strong demand. As a 
result of these factors as well as the inﬂuences of yen 
depreciation, full-year sales increased substantially in all 
overseas areas.
  Due to the aforementioned, IAB net sales increased 
by 10.9% year on year, to ¥291.7 billion, and operating 
income rose by 23.6%, to ¥38.8 billion.

Electronic and Mechanical Components Business (EMC)
In Japan, sales of relays and switches to the consumer 
electronics industry were strong as a result of recovery 
in the domestic economy, the intense heat seen during 
the ﬁrst half of ﬁscal 2013, and the demand rush 
preceding the consumption tax hike. As a result, full-
year domestic sales were up. Overseas, mobile device 
demand was solid in China and South Korea, and we 
were able to expand our market share to consumer 
electronics manufactures in these countries. Also, 
demand for consumer and commercial products was 
robust in the Americas. Coupled with the inﬂuences of 
yen depreciation, these factors led to a large increase in 
overseas sales.
  Due to the aforementioned, EMC net sales increased 
by 16.2% year on year, to ¥97.7 billion, while operating 

income soared by 98.9%, to ¥8.7 billion, due to the 
success of ongoing cost reduction measures.

Automotive Electronic Components Business (AEC)
In Japan, certain customers relocated manufacturing 
operations overseas. The impacts of this trend offset 
the beneﬁts of government stimulus measures, on 
going tax breaks for eco-friendly automobiles, and the 
demand rush that preceded the consumption tax hike. 
AEC sales were down in Japan accordingly. Overseas, 
demand recovery accelerated in North America, and 
the scale of China and other Asian markets continued to 
expand. As a result, sales were favorable in all overseas 
areas.
  Due to the aforementioned, AEC net sales increased 
by 29.7% year on year, to ¥126.6 billion, and operating 
income grew by 81.4%, to ¥9.1 billion, due to the 
beneﬁts of yen depreciation.

Social Systems, Solutions and Service Business (SSB)
In the railway infrastructure business, brisk replacement 
demand for railway infrastructure equipment was seen 
due to recovered performance by railway companies 
and the pre-consumption tax hike demand increase. 
In addition, safety and security solutions centered on 
remote monitoring systems performed well, leading to 
increased sales. In the trafﬁc control and road control 
systems business, performance was supported by 
solid demand for trafﬁc control systems and solutions 
for preventing facility deterioration. Robust demand 
for the environmental solutions business’s solar power 
related products resulted in strong sales, and increased 
sales of related installation services also contributed to 
improved performance.
  Due to the aforementioned, SSB net sales rose by 
20.3%, to ¥82.7 billion, and operating income jumped by 
90.5%, to ¥5.6 billion.

83

Omron CorporationIntegrated Report  2014About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial Section 
Healthcare Business (HCB)
In the home-use healthcare and medical device ﬁeld 
in Japan, sales of mainstay blood pressure monitors 
and thermometers proved favorable, and we worked 
to stimulate new demand through the introduction 
of new products. Performance was also strong for 
use in medical institutions, and full-year domestic 
sales increased accordingly. Overseas, demand for 
healthcare and medical devices continued to increase 
in emerging countries, excluding Russia and certain 
Southeast Asian countries, while sales of blood 
pressure monitors rose in developed countries. 
Overseas performance was exceptionally strong 
overall, with sales showing large increases.
  Due to the aforementioned, HCB net sales increased 
by 24.8%, to ¥89.3 billion, and operating income rose 
by 71.2%, to ¥7.5 billion, as a result of the beneﬁts of 
ongoing cost reduction measures and yen depreciation.

Other Businesses
The Environmental Solutions Business experienced a 
substantial increase in sales of PV inverters supported 
by rising interest in renewable energy. The Electronic 
Systems & Equipments Business suffered from 
reduced demand for industrial-use computers and 
contract development and manufacturing services for 
electronic devices. Conversely, sales of uninterruptible 
power supply units were favorable due to the rise in 
capital investment stemming from improved corporate 
performance as well as the demand rush that preceded 
the consumption tax hike. The Micro Devices Business 

saw rapid growth in microphone demand. Meanwhile, 
the Backlight Business beneﬁted from the brisk 
smartphone market as well as large performance 
contributions from the tablet PC ﬁeld, which the 
Company entered in ﬁscal 2013.
  Due to the aforementioned, the Other segment’s net 
sales increased by 33.3% year on year, to ¥78.9 billion, 
and operating income surged by 243.5%, to ¥8.7 billion.

■ Growth in Net Sales by Business Segment

IAB

EMC

AEC 

SSB 

HCB 

Other

FY2011

(0.4)%

2.2 

0.9 

(10.4)

3.0

7.8 

FY2012

(2.9)%

FY2013

10.9%

1.3 

14.8 

20.2

14.5

10.7 

16.2 

29.7 

20.3

24.8

33.3 

■ Composition of Net Sales by Business Segment

IAB

EMC

AEC 

SSB 

HCB 

Other

FY2011

43.7%

FY2012

40.4%

FY2013

37.7%

13.4

13.7

9.2

10.1

8.6

12.9

15.0

10.6

11.0

9.1

12.6

16.4

10.7

11.5

10.2

Note: The composition of net sales is based on the classiﬁcations reported 

in the Six-Year Summary (page 80).

2. Review of Operations by Region  
Japan
In Japan, economic recovery drove sales increases in 
a wide range of ﬁelds. During the second half of the 
ﬁscal year, capital investment demand for automation 
equipment improved, and this improvement combined 
with the fourth quarter’s pre-consumption tax hike 
demand rush supported performance. As a result, sales 
in IAB, EMC, SSB, HCB, and the Other increased year 
on year. Accordingly, net sales in Japan rose by 8.4% 
year on year, to ¥344.8 billion. Sales increases were 
particularly strong in the second and third quarters, 
which contributed to a 50.4% year-on-year rise in 
operating income, to ¥47.4 billion.

Americas
In the Americas, uncertainty regarding U.S. monetary 
policy was dispelled, and the United States saw clear 
economic improvements in the forms of brisk corporate 
activity, higher wages, and a better job market. Sales 
were particularly strong for automotive electronic 
components as well as electronic components for the 
consumer and commercial product industries. While oil 
and gas related business conditions were sluggish during 
the ﬁrst half of ﬁscal 2013, recovery was seen in the 
second half. As a result, net sales in the Americas rose by 
25.6% year on year, to ¥101.0 billion. However, operating 
income was down by 80.8%, to ¥0.2 billion, due to higher 
costs associated with South American operations.

Europe
In Europe, corporate and consumer conﬁdence 
improved, creating a modest recovery trend. 
Previously sluggish sales of electronic components 
for the consumer and commercial product industries 
beneﬁted particularly from this recovery. HCB sales 
also expanded. Overall sales exceeded ﬁscal 2012’s 
levels throughout the year, and income growth was 
exceptionally strong during the fourth quarter. As a 
result, net sales in Europe increased by 25.5% year on 
year, to ¥100.9 billion, and operating income rose by 
68.6%, to ¥3.9 billion.

■ Sales Breakdown by Region

%
100

80

60

40

20

0

1.8%
8.5%

1.6%
8.4%

16.3%

16.3%

13.5%

12.1%

12.4%

12.4%

1.5%
9.3%

18.4%

13.1%

13.1%

47.8%

48.9%

44.6%

11

12

13

（FY）

Direct Exports
Asia Paciﬁc
Greater China
Europe
Americas
Japan

84

Greater China
In China, economic uncertainty persisted in light of 
sluggish corporate activity and consumer spending and 
a poor housing market, but growth rates remained high 
regardless. In particular, strong performance contributions 
were made by the large increases in sales of electronic 
components for the mobile device and consumer 
electronic industries, automotive electronic components, 
and medical devices. As a result, net sales in the Greater 
China region rose by 34.0% year on year, to ¥142.4 
billion, and operating income increased by 58.3%, to 
¥17.9 billion, with the Greater China region once again 
accounting for the largest portion of sales and income 
compared with other overseas segments.

Asia Paciﬁc
In the Asia Paciﬁc region, political unrest and poor market 
sentiment in certain countries continued to create an air 
of uncertainty. Nevertheless, overall demand expanded 
for medical devices. Demand was also strong for 
automation equipment for the semiconductor, ﬂat panel 
display, and automobile industries as well as for electronic 
components for the mobile device and consumer 
electronics industries. Performance exceeded ﬁscal 
2012’s levels throughout the year due to this trend, which 
was particularly robust in South Korea. As a result, net 
sales in the Asia Paciﬁc region increased by 31.8% year 
on year, to ¥72.3 billion, and operating income rose by 
77.5%, to ¥7.1 billion.

Financial Condition

Assets
Total assets amounted to ¥654.7 billion at the end of 
ﬁscal 2013, representing an increase of ¥81.1 billion, 
or 14.1%, compared with the previous ﬁscal year-end. 
This rise was mainly due to increases in cash and cash 
equivalents and notes and accounts receivable–trade 
accompanying substantially higher sales and income.

Liabilities and Shareholders’ Equity
Total liabilities amounted to ¥221.9 billion, up by ¥17.1 
billion from the previous ﬁscal year-end. This increase 
was largely due to higher notes and accounts  
payable–trade.
  Total shareholders’ equity was up by ¥63.5 billion, 
to ¥430.5 billion. Factors behind this rise included 
the substantial increase in net income attributable to 
shareholders, foreign currency translation adjustments 
stemming from yen depreciation, and higher unrealized 
gains on available-for-sale securities due to stock 
price improvements. Accordingly, the shareholders’ 
equity ratio rose by 1.8 percentage points, to 65.8%, 
compared with 64.0% at the end of the previous ﬁscal 
year. The debt / equity ratio was 0.52 times, showing 
improvement from the previous year’s 0.56 times. 
Shareholders’ equity per share was ¥1,956.06 at the 

end of the ﬁscal year, compared with ¥1,667.04 per 
share at the previous ﬁscal year-end.

■ Working Capital and Current Ratio

Billions of yen
250

8.5%
16.3%
13.5%
183.7% 180.7%
12.1%

130.2

146.5
49.6%

201.5%

155.2

8.4%
16.3%
12.4%
12.4%

50.5%

229.0%

188.0

200

150

100

50

0

09

10

11

12

Working capital [left axis]
Current ratio [right axis]

243.7%

233.8

9.3%

18.4%
13.1%

%
250

220

190

160

13.1%
46.1%

130

≈
0
13 （FY）

■ Outstanding Interest-Bearing Debt and Debt / Equity Ratio

Billions of yen
60

36.6

8.5%
16.3%
45.5
13.5%
12.1%

8.4%
16.3%
12.4%
12.4%

0.73

0.80 0.67

49.6%

18.8

50.5%

09

10

11

Times
2.0

1.5

1.0

0.5

0

9.3%

18.4%
0.52
13.1%

13.1%
0.5
46.1%

13 （FY）

0.56

5.6

12

45

30

15

0

Outstanding interest-bearing debt [left axis] 
Debt / equity ratio [right axis]

Cash Flows

Cash and cash equivalents at the end of the ﬁscal year 
stood at ¥90.3 billion, a ¥34.5 billion increase from the 
end of the previous ﬁscal year. Changes in cash ﬂows 
are described below.

Cash Flows from Financing Activities
Net cash used in ﬁnancing activities was ¥16.3 billion, 
down by ¥2.3 billion from the previous ﬁscal year. 
Major outﬂows included those to repay short-term debt 
and issue dividend payments.

Cash Flows from Operating Activities
Net cash provided by operating activities totaled ¥79.0 
billion, up by ¥26.0 billion from the previous ﬁscal year. 
Major factors included net income before the deduction 
of noncontrolling interests.

Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥31.1 
billion, up by ¥2.7 billion from the previous ﬁscal year. 
This increase was the result of higher investments in 
such areas as production facilities.

■ Free Cash Flow

Billions of yen

50

40

30

20

10

0

8.5%
16.3%
13.5%
12.1%
21.7

49.6%

8.4%
16.3%
12.4%
12.4%

24.6

50.5%

24.2

09

10

5.5

11

47.9

9.3%

18.4%
13.1%

13.1%
46.1%

12

13 （FY）

85

Omron CorporationIntegrated Report  2014About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial SectionBusiness and Other Risks

A number of items may pose risks and influence the Omron 
Group’s  management 
results  and  financial  condition 
(including share price), and Omron believes these items may 
substantially affect investor decisions. Note that items refer-
ring  to  the  future  reflect  the  Omron  Group’s  forecasts  and 
assumptions  as  of  June  25,  2014,  the  release  date  of  its 
Yukashoukenhoukokusho  (Annual  Securities  Report  filed 
under the Financial Instruments and Exchange Act of Japan).

(1) Economic Conditions
The Omron Group conducts business worldwide, and its opera-
tions  are  affected  by  changes  in  macroeconomic  conditions, 
trends in markets related to the Group’s business, and fluctua-
tions in economic conditions in Japan and overseas. Therefore, 
such  factors  may  have  an  effect  on  the  Group’s  operating 
results  and  financial  condition.  Furthermore,  we  assume  that 
the ratio of overseas business will continue to increase as the 
Group  actively  expands  globally.  Accordingly,  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 procure-
ment to improve the balance of foreign currency denominated 
income and expenditures. We also hedge foreign exchange risk 
through  short-term  forward  contracts  executed  with  financial 
institutions.  Nonetheless,  rapid  fluctuations  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 impact on 
the Group’s operating results and financial condition.

(2) Legal and Regulatory Risks
The Omron Group operates worldwide and is therefore subject 
to a wide variety of laws and regulations, including labor laws, 
personal  data  protection  laws,  security  trade  control  regula-
tions, laws against bribery, and anti-monopoly laws. Our compli-
ance  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 or regulations, changes to 
existing laws or regulations, or the adoption of stricter interpre-
tations  of  laws  or  regulations  could  have  an  impact  on  the 
Group’s operating results and financial condition.

(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 the early restoration of opera-
tions  in  the  event  of  a  disaster,  including  earthquakes  in  the 
Nankai Trough or directly under the Tokyo metropolitan area, as 
well as hypothetical events, such as the outbreak of new influ-
enza  viruses.  The  Group  and  its  business  partners  maintain 
operating bases around the world, making it virtually impossible 
to completely avoid the risks that would arise from an unfore-
seen disaster, infectious disease, pandemic, or other calamity. 
Especially  considering  the  fact  that  disasters  have  recently 
been becoming greater in scale, 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 financial condition.

(4) International Relations
The Omron Group actively conducts such business activities 
as production and sales in overseas markets. The Group may 
be subject to operating difficulties in countries outside Japan 
related to possible social unrest due to factors including differ-
ences in culture or religion; political turmoil and uncertainty in 
economic  trends;  differences  in  business  customs  in  areas, 
such  as  the  structure  of  relationships  with  local  businesses; 
issues  regarding  country-specific 
laws  and  regulations; 
changes in tax systems; security trade control regulations; and 
terrorism, armed conflicts, and other political circumstances. 
These  operating  difficulties  associated  with  overseas  opera-
tions  may  have  an  impact  on  the  Omron  Group’s  operating 
results and financial condition.

(5) Human Resources
Cross-border and cross-corporation personnel movements and 
opportunities for employees of a variety of nationalities to work 
together  are  expanding  in  line  with  increasing  globalization. 
Accordingly,  labor  troubles  may  arise  due  to  differences  in 
culture,  customs,  and  treatment.  In  addition,  the  Company  is 
exposed  to  risks  including  the  inability  to  secure  a  sufficient 
number of superior candidates for management-level positions 
to proceed with the localization of management and the possi-
bility of a rise in employee wages in Asia. The materialization of 
such  risks  could  have  an  impact  on  the  Group’s  operating 
results and financial condition. Furthermore, the Group could be 
adversely affected by risks related to occupational health and 
safety, such as occupational accidents that impact employees 
or  facilities.  The  materialization  of  these  risks  could  have  an 
impact on the Group’s operating results and financial condition.

(6) Management of Funds
The Omron Group raises funds by issuing commercial paper and 
other means. Therefore, financial market instability, rising interest 
rates  in  Japan,  or  a  rating  agency  downgrade  could  result  in 
restrictions  on  fund-raising  and  an  increase  in  financing  costs, 
which  could  affect  the  Group’s  operating  results  and  financial 
condition. In order to maintain flexibility in capital expenditures 
and  M&A  at  the  global  level,  as  well  as  to  improve  capital 
efficiency,  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 financial investment purposes.

(7) Information Security
The Omron Group possesses operationally important informa-
tion and obtains confidential personal information and informa-
tion  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, it is possible that leaks of such information could 
occur due to unforeseen circumstances. 
  The Group is strengthening countermeasures for cyber-
attacks  against  its  information  systems  and  reinforcing  IT 
governance.  Regardless,  damage,  alteration,  or  leaks  of 
important data, 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 financial condition.

(8)  Risks  Associated  with  R&D,  Patent  Rights,  
       and Other Intellectual Property Rights
The  Omron  Group  continues  to  create  new  products  that 
achieve  greater  levels  of  value  by  adhering  to  technical 
standards. However, when developing products in response to 
standards that are still in the process of being formulated, there 
is a possibility that details of the finalized standards may differ 
from those at the drafting stage. In such situations, additional 
R&D investment may be required, which could have an impact 
on the Group’s operating results and financial condition.
  The Omron Group researches the intellectual property rights 
of  third  parties  when  conducting  R&D  and  design  activities. 
Nevertheless, a dispute could arise during business activities 
if a third party claims that the Group has violated its intellectual 
property rights. In regard to relationships with employees as 
well,  the  Omron  Group  has  developed  systems  to  compen-
sate employees for inventions and addresses such inventors 
in an appropriate manner. Regardless, disputes regarding the 
value of an invention could arise with inventors.

In regard to brand management, it is possible that the Group 
could  suffer  damages  should  a  third  party  use  the  “Omron” 
brand  in  a  fraudulent  manner  and  manufacture  and  sell 
products similar to those of the Group. In recent years, there 
has been a rise in the use of domain names similar to “Omron” 
overseas.  The  Group  has  initiated  prompt  and  appropriate 
countermeasures against such fraudulent use. Nonetheless, it 
is  difficult  to  comprehend  fully  and  take  action  against  all 
aspects of improper domain name registration, so the danger 
exists  that  fraudulent  business  activities  using  “Omron”  or  a 
similar  domain  name  could  damage  trust  in  the  Group.  A 
serious dispute due to such inappropriate use of the Omron 
Group’s  intellectual  property  could  have  an  impact  on  the 
Group’s operating results and financial condition.

(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 interna-
tional  sales  offices.  To  ensure  continued  manufacturing 
stability,  the  Company  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, international relations issues, and other 
disturbances can cause a partial or full cessation of production, 
which could have an impact on the Group’s operating results 
and financial condition if supplies to customers are disrupted.

(10) Purchasing and Procurement
Obtaining  raw  materials  and  parts  of  sufficient  quality  in  a 
timely manner and in necessary quantities is absolutely essen-
tial  to  the  Group’s  manufacturing.  Therefore,  we  stringently 
select suppliers for reliability. Nonetheless, limits on supply or 
other  supply  issues  could  arise  in  such  cases  as  significant 
supply  chain  disruption  due  to  an  accident  or  a  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,  difficulties  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 financial condition. 

  While the Group contracts with suppliers to determine prices, 
the market prices for such materials as petrochemicals, steel, 
silver, copper, rare earths, and other raw materials are linked to 
increased demand in emerging countries as well as the influx of 
capital into these countries. Resulting price increases can affect 
manufacturing costs and could have an impact on the Group’s 
operating results and financial condition.
  The  Omron  Group  is  expected  to  respond  to  various, 
increasingly more complex expectations from customers and 
society in areas across the entire supply chain. These expecta-
tions  include  addressing  conflict  mineral  issues  and  making 
business activities more eco-friendly. The Group requests that 
suppliers  adhere  to  CSR-compliant  procurement  policies. 
However, in the event that suppliers are unable to respond to 
these  demanding  standards,  the  Group’s  ability  to  procure 
necessary materials and products may be impeded, and sales 
of the Group’s products may suffer as a result. Such a situa-
tion could have an impact on the Group’s operating results and 
financial condition.

(11) Quality Assurance
The Omron Group develops and manufactures products and 
provides services in accordance with its ISO-certified quality 
control system. A Groupwide quality check system is in place 
that  entails  quality  inspections  and  other  activities  aimed  at 
the ongoing improvement of the quality of the Group’s entire 
line  of  products  and  services.  Through  these  efforts,  the 
Group seeks to maximize customer satisfaction by providing 
higher quality products and services based on its “quality-first” 
principle. However, as it is virtually impossible to predict all of 
the  conditions  under  which  Omron  products  will  be  used,  it 
has become difficult to guarantee that defects 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.  The  risk  of  a  recall 
due to a major product defect or the inability to conduct appro-
priate  first-response  and  other  emergency  measures  to  the 
materialization  of  such  risks  could  adversely  affect  Omron’s 
reliability or brand image, and sales could decline as a result. 
Such a situation could have an impact on the Group’s operating 
results and financial condition.

(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 groundwater. In the 
future,  it  is  possible  that  the  Group  will  face  difficulty  in 
complying  with  environmental  laws  and  regulations,  meeting 
additional  obligations  for  measures  to  improve  the  environ-
mental soundness of operations, or responding to other  expec-
tations.  These  factors,  or  some  unforeseeable  circumstance, 
could  result  in  the  Group  incurring  additional  environment- 
related  expenses.  Furthermore,  the  Group’s  operations  could 
be  halted  due  to  violations  of  environmental  regulations  or 
customers could be lost due to failure to comply with environ-
mental regulations. These situations could have an impact on 
the Group’s operating results and financial condition.

86

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Omron CorporationIntegrated Report  2014About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial Section 
Consolidated Balance Sheets

OMRON Corporation and Subsidiaries
March 31, 2013 and 2014

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

FY2012

FY2013

¥   55,708

158,911

(1,988)

91,013

17,611

12,439

¥   90,251

174,216

 (1,812)

97,677

22,688

13,473

Thousands of  
U.S. dollars

FY2013

$    876,223 

1,691,417

(17,592)

948,320

220,272

130,806

  Total Current Assets

333,694

396,493

3,849,446

Property, Plant and Equipment:

  Land

  Buildings

  Machinery and equipment

  Construction in progress

  Total

  Accumulated depreciation

26,591

137,821

156,186

6,729

327,327

(200,492)

26,344

140,495

171,192

7,126

345,157

 (209,591)

255,767

1,364,029

1,662,058

69,184

3,351,038

(2,034,864)

  Net Property, Plant and Equipment

126,835

135,566

1,316,174

Investments and Other Assets:

Investments in and advances to afﬁliates

Investment securities

  Leasehold deposits

  Deferred income taxes

  Other assets

  Total Investments and Other Assets

Total

17,939

38,193

6,914

30,612

19,450

113,108

¥ 573,637

21,349

51,117

6,950

20,918

22,311

122,645

¥ 654,704

207,272

496,282

67,476

203,087

216,613

1,190,730

$ 6,356,350 

U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2014, of ¥103 = $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

FY2012

FY2013

Thousands of  
U.S. dollars 

FY2013

¥    5,570

¥       488

$      4,738 

75,592

32,818

3,907

27,814

85,218

39,897

6,340

30,764

827,359

387,350

61,553

298,680

  Total Current Liabilities

145,701

162,707

1,579,680

Deferred Income Taxes

Termination and Retirement Beneﬁts

Other Long-Term Liabilities

595

56,944

1,634

2,167

50,683

6,369

21,039

492,068

61,835

Shareholders’ Equity:

  Common stock, no par value:

  Authorized:  487,000,000 shares in 2012 and 2013

Issued:  227,121,372 shares in 2012 and 2013

64,100

64,100

622,330

  Capital surplus

  Legal reserve

  Retained earnings

  Accumulated other comprehensive income (loss)

  Treasury stock, at cost: 7,032,043 shares in 2013

99,066

10,876

253,654

(44,349)

99,067

11,196

287,853

(15,162)

961,816

108,699

2,794,689

(147,204)

  　　　　　　　　 6,992,907 shares in 2012

(16,385)

(16,545)

(160,631)

  Total Shareholders’ Equity

Noncontrolling Interests

  Total Net Assets

Total

366,962

1,801

368,763

¥573,637

430,509

2,269

432,778

¥654,704

4,179,699

22,029

4,201,728

$6,356,350

88

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Omron CorporationIntegrated Report  2014About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial Section 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Income

OMRON Corporation and Subsidiaries
Years Ended March 31, 2012, 2013 and 2014

Consolidated Statements of Comprehensive Income (Loss)

OMRON Corporation and Subsidiaries
Years Ended March 31, 2012, 2013 and 2014

Net Sales

Costs and Expenses:

  Cost of sales

  Selling, general and administrative expenses

  Research and development expenses

  Other expenses, net

  Total

Income before Income Taxes and Equity in Earnings of Afﬁliates

Income Taxes

Equity in Loss (Earnings) of Afﬁliates

Net Income

Net Income (Loss) attributable to noncontrolling interests

Millions of yen

FY2011

FY2012

¥619,461 

¥650,461

FY2013

¥772,966

391,574 

145,662 

42,089 

6,589 

585,914 

33,547 

17,826 

(631)

16,352 

(37)

408,954

152,676

43,488

4,106

609,224

41,237

14,096

(2,976)

30,117

(86)

475,758

181,225

47,928

6,048

710,959

62,007

19,475

(3,782)

46,314

129

Thousands of 
U.S. dollars 

FY2013

$7,504,524 

4,619,011

1,759,466

465,320

58,717

6,902,514

602,010

189,078

(36,718)

449,650

1,252

Net Income attributable to shareholders

¥  16,389 

¥  30,203

¥  46,185

$   448,398 

Per Share Data:

  Net Income attributable to shareholders

  Basic

  Diluted

FY2011

Yen

FY2012

FY2013

U.S. dollars 

FY2013

¥74.46 

74.46 

¥137.20

137.20

¥209.82

−

$2.04

−

Net Income

Other Comprehensive Income (Loss), net of tax:

  Foreign currency translation adjustments:

  Foreign currency translation adjustments arising during the year

  Reclassiﬁcation adjustment for the portion realized in net income

  Net unrealized gain and loss

  Pension liability adjustments:

  Pension liability adjustments arising during the year

  Reclassiﬁcation adjustment for the portion realized in net income

  Net unrealized gain and loss

  Unrealized gains (losses) on available-for-sale securities:

  Unrealized holding gains (losses) arising during the year

  Reclassiﬁcation adjustment for losses on impairment realized    

       　in net income

  Reclassiﬁcation adjustment for net gains on sale realized 

       　in net income

  Reclassiﬁcation adjustment for net gains on share exchange 

       　in net income

  Net unrealized gain and loss

  Net gains (losses) on derivative instruments:

  Unrealized holding gains (losses) arising during the year

  Reclassiﬁcation 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

FY2011

¥16,352 

Millions of yen

FY2012

¥30,117

FY2013

¥46,314

Thousands of  
U.S. dollars

FY2013

$449,650 

(1,613)

(892)

(2,505)

625 

(704)

(79)

460 

227 

(188)

(74)

425 

3 

(57)

(54)

(2,213)

14,139 

22,523

(43)

22,480

(21)

(894)

(915)

18,946

183,942

(1)

(10)

18,945

183,932

326

1,375

1,701

3,165

13,350

16,515

2,317

10,002

97,107

693

(425)

−

2,585

−

−

(1,116)

(10,835)

−

8,886

−

86,272

(455)

(1,409)

(13,679)

549

94

24,244

54,361

1,249

(160)

29,372

75,686

12,126

(1,553)

285,166

734,816

(44)

74

314

3,049

Comprehensive Income attributable to shareholders

¥14,183 

¥54,287

¥75,372

$731,767 

U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2014, of ¥103 = $1.

U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2014, of ¥103 = $1.

90

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Omron CorporationIntegrated Report  2014About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial Section 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Shareholders’ Equity

OMRON Corporation and Subsidiaries
Years Ended March 31, 2012, 2013 and 2014

Consolidated Statements of Cash Flows

OMRON Corporation and Subsidiaries
Years Ended March 31, 2012, 2013 and 2014

Number of 

common shares 

Common stock Capital surplus

Legal reserve

issued

239,121,372

¥64,100

¥99,081

¥9,574

Millions of yen

Accumulated 

Retained 

other 

earnings

comprehensive 

income (loss)

¥(66,227)

¥250,824
16,389 

(6,164)

460 

(460)

239,121,372

64,100

(3)
99,078

10,034

(2,206)

(68,433)

(10)
113 
(44,496)

(32)
260,557
30,203

(8,145)

(12)

842

(842)

(12,000,000)
227,121,372

64,100

 99,066

10,876

24,084

(44,349)

(9)
1
28,119
 (16,385)

(0)
(28,119)
253,654

46,185 

(11,666)

320

(320)

1

29,187

(161)
1 

Balance, March 31, 2011
  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

Balance, March 31, 2012
  Net income

Cash dividends paid to   
OMRON Corporation 
shareholders, ¥37 per share

Cash dividends paid to 

noncontrolling interests

Equity transaction with 

noncontrolling interests  
and other

  Transfer to legal reserve
Other comprehensive  

income (loss)

  Acquisition of treasury stock
  Sale of treasury stock
  Retirement of treasury stock

Balance, March 31, 2013

  Net income

Cash dividends paid to  
OMRON Corporation 
shareholders, ¥53 per share

Equity transaction with 

noncontrolling interests  
and other

  Transfer to legal reserve

Other comprehensive  

income (loss)

  Acquisition of treasury stock
  Sale of treasury stock

(2)

(2)

889

160

877
̶

24,244
(9)
1
̶

(12)
̶

24,084
(9)
1
̶

 366,962

1,801

 368,763

46,185 

129

46,314

(11,666)

(11,666)

̶

29,187
(161) 
2

154

185

154

̶

29,372
(161) 
2

Balance, March 31, 2014

227,121,372

¥ 64,100 

¥ 99,067 

¥ 11,196 

¥ 287,853 

¥ (15,162)

¥ (16,545)

¥ 430,509 

¥ 2,269 

¥ 432,778 

Number of 

common shares 

Common stock Capital surplus

Legal reserve

issued

Accumulated 

Retained 

other 

earnings

comprehensive 

income (loss)

Total 

Treasury stock

Shareholders’ 

Equity

Noncontrolling 

Total Net 

interests

Assets

Thousands of U.S. dollars

Balance, March 31, 2013

227,121,372 

$ 622,330

$ 961,806

$ 105,592 $ 2,462,660 

$ (430,573) $ (159,077) $ 3,562,738 

$ 17,485  $ 3,580,223 

  Net income

Cash dividends paid to  
OMRON Corporation 
shareholders, $0.51 per share

Equity transaction with 

noncontrolling interests  
and other

 Transfer to legal reserve

Other comprehensive  

income (loss)

  Acquisition of treasury stock
  Sale of treasury stock

448,398

(113,262)

3,107

(3,107)

448,398 

1,252

449,650

(113,262)

(113,262)

1,495

1,495

− 

−

10

283,369

283,369 

1,797 

285,166 

(1,563)
9 

(1,563)
19 

(1,563)
19 

Balance, March 31, 2014

227,121,372

$ 622,330 

$ 961,816 

$ 108,699  $ 2,794,689 

$ (147,204) $ (160,631) $ 4,179,699 

$ 22,029  $ 4,201,728 

U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2014, of ¥103 = $1.

Total 

Treasury stock

Shareholders’ 

Equity

Noncontrolling 

Total Net 

interests

Assets

¥(44,599) ¥312,753
16,389 

¥899
(37)

¥313,652
16,352 

Operating Activities:

  Net income

　Adjustments to reconcile net income to net cash 
　  provided by operating activities:

Millions of yen

Thousands of  
U.S. dollars

FY2011

FY2012

FY2013

FY2013

¥ 16,352 

¥ 30,117

¥ 46,314

$  449,650 

  Depreciation and amortization

22,617 

22,452 

(6,164)

̶ 

(2,206)
(10)
78 
320,840
30,203

(6,164)

(15)
̶ 

(2,213)
(10)
78 
321,680
30,117

(15)

(7)

840
(86)

  Net loss on sales and disposals 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 beneﬁts

  Deferred income taxes

  Equity in loss (earnings) of afﬁliates

  Changes in assets and liabilities:

(8,145)

(8,145)

Increase in notes and accounts receivable - trade

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)

25,089 

1,146 

804 

(1,714)

501 

− 

(4,417)

2,170 

 (3,782)

(6,613)

(325) 

(32)

5,824

2,277 

10,883

919

32,730 

79,044 

2,840 

(2,179)

243,582

11,126

7,806 

(16,641)

4,864

− 

(42,883)

21,068 

(36,718)

(64,204)

(3,155) 

(311) 

56,544

22,107

105,660

8,922

317,767 

767,417 

27,573 

(21,155)

(27,502)

(30,383)

(32,218)

(312,796)

(101)

2,307 

(480)

̶

(1,012)

̶

520 

457 

836 

(1,884)

90 

141 

(10)

624 

75

794 

209

26

(672)

−

− 

728

7,709

2,029

252

(6,524) 

− 

−

  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 afﬁliates

  Sale of business, net of cash acquired

  Acquisition of business, net of cash acquired

  Purchase of noncontrolling interests

  Other, net

  Net cash used in investing activities

(26,486)

(28,471)

(31,125)

(302,184)

Financing Activities:

  Net repayments of short-term debt

  Dividends paid by the Company

  Dividends paid to noncontrolling interests

  Proceeds from equity transactions with noncontrolling interests

  Other, net

  Net cash used in ﬁnancing 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

(26,744)

(6,604)

(15)

̶

(129)

(33,492)

(1,446)

(29,478)

74,735 

(13,273)

(6,164)

(2)

819 

70 

(18,550)

4,414 

10,451 

45,257

(5,135)

(10,566)

−

22 

(49,854)

(102,583)

−

214 

(619) 

(6,010)

(16,298)

(158,233)

2,922 

34,543 

55,708

28,369

335,369

540,854

Cash and Cash Equivalents at End of the Year

¥ 45,257 

¥ 55,708

¥ 90,251

$ 876,223

U.S. dollar amounts represent translations of Japanese yen at the approximate exchange rate on March 31, 2014, of ¥103 = $1.

92

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Omron CorporationIntegrated Report  2014About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial Section 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Internal Control Section

Management’s Report on Internal Control

NOTE TO READERS:
The following is an English translation of the management’s report on internal control over ﬁnancial reporting (“ICFR”) ﬁled under the Financial 
Instruments and Exchange Act of Japan. This report is presented merely as supplemental information. There are differences between an 
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 “signiﬁcant locations and/or business units.” At 
selected “signiﬁcant locations and/or business units,” we included in the scope of assessment, business processes leading to sales, accounts 
receivable and inventories as signiﬁcant accounts that may have a material impact on our business objectives. Further, in addition to selected 
signiﬁcant locations and/or business units, we also included in the scope of assessment, as business processes having greater materiality, 
business  processes  relating  to  (i)  greater  likelihood  of  material  misstatements  and/or  (ii)  significant  accounts  involving  estimates  and  the 
management’s  judgment  and/or  (iii)  a  business  or  operation  dealing  with  high-risk  transactions,  taking  into  account  their  impact  on  the 
ﬁnancial reporting.

Management’s Report on Internal Control
1.  Matters relating to the basic framework for internal control 

over ﬁnancial reporting 

Yoshihito Yamada, Representative Director and President; and 
Yoshinori Suzuki, Representative Director and Executive Vice 
President and CFO are responsible for designing and operating 
effective internal control over ﬁnancial reporting of Omron 
Corporation (the  “Company”) and have designed and operated 
internal control over ﬁnancial reporting in accordance with the 
basic framework for internal control set forth in“The Standards 
and Practice Standards for Management Assessment and Audit 
Concerning Internal Control Over Financial Reporting (Council 
Opinion)”released by the Business Accounting Council.
  The internal control is designed to achieve its objectives to the 
extent reasonable through the effective function and combination 
of its basic elements. Therefore, there is a possibility that 
misstatements may not be completely prevented or detected  
by internal control over ﬁnancial reporting.

2.  Matters relating to the scope of assessment, the basis date 

of assessment and the assessment procedures 

The assessment of internal control over ﬁnancial reporting 
was performed as of March 31, 2014 which is the end of this 
ﬁscal year. The assessment was performed in accordance with 
assessment standards for internal control over ﬁnancial reporting 
generally accepted in Japan.

In conducting this assessment, we evaluated internal controls 
which may have a material effect on our entire ﬁnancial reporting 
on a consolidation basis (“entity-level controls”) and based on 
the results of this assessment, we selected business processes 
to be tested. We analyzed these selected business processes, 
identiﬁed key controls that may have a material impact on the 
reliability of the Company’s ﬁnancial reporting, and assessed the 
design and operation of these key controls. These procedures 
have allowed us to evaluate the effectiveness of the internal 
controls of the Company.
  We determined the required scope of assessment of internal 
control over ﬁnancial reporting for the Company, as well as its 
consolidated subsidiaries and equity-method afﬁliated companies, 
from the perspective of the materiality that may affect the 
reliability of their ﬁnancial reporting. The materiality that may affect 
the reliability of the ﬁnancial reporting is determined by taking into 
account the materiality of quantitative and qualitative impacts on 
ﬁnancial 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 afﬁliated companies determined 
to have an insigniﬁcant quantitative and qualitative inﬂuence on 
the reliability of ﬁnancial reporting are not included in the scope 
of assessment of entity-level controls.
  Regarding the scope of assessment of internal control over 
business processes, we selected locations and business units 
to be tested based on the previous year’s consolidated net sales 
(after the elimination of transactions between consolidated 
companies), and the companies whose net sales reaches 
two-thirds of total amount on a consolidation basis were 
selected as“signiﬁcant locations and/or business units.” At 
selected“signiﬁcant locations and/or business units,” we included 
in the scope of assessment, business processes leading to 
sales, accounts receivable and inventories as signiﬁcant accounts 
that may have a material impact on the business objectives 
of the Company. Further, in addition to selected signiﬁcant 
locations and/or business units, we also included in the scope of 
assessment, as business processes having greater materiality, 
business processes relating to (i) greater likelihood of material 
misstatements and/or (ii) signiﬁcant accounts involving estimates 
and the management’s judgment and/or (iii) a business or 
operation dealing with high-risk transactions, taking into account 
their impact on the ﬁnancial reporting.

3. Matters relating to the results of the assessment
The above assessments determined that the Company’s internal 
control over ﬁnancial reporting was effective as of the last day of 
the ﬁscal year under review.

4. Additional notes
No material items to report.

5. Special notes
No material items to report.

June 25, 2014

Yoshihito Yamada
Representative Director 
and President
Omron Corporation

Yoshinori Suzuki
Representative Director and 
Executive Vice President and CFO
Omron Corporation

94

IR Activities Focusing on Engagement

With its investor relations (IR) policy emphasizing interactive communication with investors through 
engagement, Omron provides timely and accurate information on the Company’s business conditions 
and management policies. Omron also aims to reﬂect investors’ comments in its management 
strategies to the fullest extent possible to maximize corporate value.

Activities in Fiscal 2013  

Communications with individual investors

Number of events  

Number of participants   

27
2,140

IR events, such as corporate presentations  
and investor fairs

Communications with institutional investors

Number of direct interactions 
with investors  

 932

Private meetings and teleconferences between the 
president and investors in Japan and overseas, IR 
conferences, tours of plants in Japan and China 
(Shanghai and Guangzhou), observation of 
technological exhibitions, and other activities

Shareholders’ meeting held on June 20, 2013
Number of attending 
shareholders  

772
 85.5%

Percentage of voting 
rights exercised  

Disclosing Information through IR Website
We employ an IR site and various other tools to 
support engagement with shareholders and other 
investors by disclosing information on product 
development and sales activities tailored to speciﬁc 
markets as well as information on operating 
performance. Our IR site features a message from the 
president, explanations of our strategies and operating 
performance, and video footage. IR materials are made 
available in both Japanese and English simultaneously 
to realize timely disclosure and to minimize disparities 
between the information available to investors in 
Japan and investors overseas.

Input and feedback obtained through these activities 
are relayed via the IR Department to the Company’s 
senior management.
  Based on such feedback, Omron is accelerating 
initiatives to improve the efﬁciency, transparency, and 
effectiveness of management. For example, we utilized 
stakeholder input in evolving ROIC-based management 
and revising executive compensation systems.
  As an example of improvements, we introduced the 
shareholder beneﬁt program in ﬁscal 2013. Going forward, 
we will continue to draw on feedback of stakeholders to 
help formulate various management strategies.

Integrated Report 2013 received the best integrated 
reporting award from the World Intellectual Capital 
Initiative （WICI） Japan, the Japanese branch of the WICI.
  This report also received a commendation in the 
Nikkei Annual Report Awards 2013, sponsored by 
Nikkei Inc.

In the 2013 Vision Awards held by League of 
American Communications Professionals LLC, this 
report received a total of ﬁve awards, including the 
platinum award in the Equipment, Machinery & 
Instruments industry category.

i

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c
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The Securities Analysts Association of Japan 
presented the Company with the 2013 Award 
for Excellence in Corporate Disclosure in the 
Electric / Precision industry category, selecting 
Omron as No.1 from among 23 other companies 
in this category.

■ Inclusion in SRI Indexes

Asia Paciﬁc (AP)

As of July 2014

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Omron CorporationIntegrated Report  2014About OmronWhere We’re HeadedCorporate Value InitiativesCorporate Value Foundation Financial Section 
 
 
 
 
 
Corporate Information / Stock Information As of March 31, 2014

Date of Formation  

May 10, 1933

Ticker Symbol Number  

6645

Date of Establishment  

Accounting Date  

May 19, 1948

March 31

Paid-in Capital  
¥64,100 million

Number of Employees 
(Consolidated)  

36,842

Common Stock   

Issued 
227,121 thousand shares 
Share unit number 
100 shares 
Number of shareholders 
26,757

Stock Listings  

Tokyo Stock Exchange 
Frankfurt Stock Exchange

Annual Shareholders’  Meeting 

June

Custodian of Register 
of Shareholders  

Mitsubishi UFJ Trust and 
Banking Corporation

Depositary and Transfer
Agent for American
Depositary Receipts  
JPMorgan Chase  
Bank, N.A.

Head Ofﬁce  

Shiokoji Horikawa, 
Shimogyo-ku,  
Kyoto 600-8530, Japan 
Tel: +81-75-344-7000 
Fax: +81-75-344-7001

Overseas Headquarters  
Europe 
OMRON MANAGEMENT 
CENTER OF EUROPE 
(The Netherlands)

North America 
OMRON MANAGEMENT 
CENTER OF AMERICA 
(Illinois)

Brazil 
OMRON MANAGEMENT 
CENTER OF BRAZIL 
 (São Paulo)

Asia Paciﬁc 
OMRON MANAGEMENT 
CENTER OF ASIA  
PACIFIC (Singapore)

India 
OMRON MANAGEMENT 
CENTER OF INDIA 
(Haryana)

Greater China 
OMRON MANAGEMENT 
CENTER OF CHINA 
(Shanghai)

Major Japanese Manu-
facturing, Sales & Mar-
keting, and Research & 
Development Locations

Manufacturing  
Kusatsu Ofﬁce 
Ayabe Ofﬁce 
Yasu Ofﬁce

Sales & Marketing  

Tokyo Ofﬁce 
Mishima Ofﬁce 
Nagoya Ofﬁce 
Osaka Ofﬁce

Research & Development  

Keihanna Technology  
　Innovation Center 
Okayama Ofﬁce

■ Stock Price  and Monthly Trading Volume* Tokyo Stock Exchange and Osaka Securities Exchange

Monthly Volume

Omron
TOPIX

（Index）
200

180

160

140

120

100

80

60

40

20

0

(1,000 Shares)

30,000

20,000

10,000

0

2004/3

2005/3

2006/3

2007/3

2008/3

2009/3

2010/3

2011/3

2012/3

2013/3

2014/3

Note: Share index (2004/3E = 100)

■ Yearly High and Low Prices*

■ Ownership and Distribution of Shares

Publication of Integrated Report 2014

Omron Corporation is dedicated to driving innovation through its business activities.  
We quickly provide the products and services that society requires, thereby contributing 
to the development of the global society while growing as a company.
  We emphasize the following three principles: management adhering to the Om-
ron Principles, highly transparent and effective corporate governance systems, and 
constructive engagement with stakeholders founded on voluntary disclosure. These 
principles guide us in conducting management from a long-term perspective as we 
pursue ongoing improvements in corporate value, shareholder value, and brand value.
  On the business front, Omron is strengthening its global vertical-horizontal manage-
ment system (a matrix management system for business units) while conducting  
business portfolio management and utilizing return on invested capital (ROIC) as a  
management indicator.
  Therefore, it would not be too much to say that integrated thinking has long been built into 
our management.
  We took great care in designing Integrated Report 2014 to communicate to all stake-
holders Omron’s ability to create value from a long-term perspective, referring to inter-
national frameworks for integrated reports, such as those by the International Integrated 
Reporting Council (IIRC) and the World Intellectual Capital Initiative (WICI).
  We welcome your honest opinions and feedback.

July 2014

Satoshi Ando
Executive Ofﬁcer 
Senior General Manager,
Investor Relations Headquarters

Website  

For more detailed information, please refer to our website.

FY

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

High（￥）

Low（￥）

2,885

3,620

3,590

3,510

2,385

2,215

2,418

2,357

2,478

4,730

2,150

2,210

2,615

1,950

   940

1,132

1,749

1,381

1,436

2,213

* Stock price and trading volume information is for the 1st 
section of the Osaka Securities Exchange before July 16, 
2013, and for the 1st section of the Tokyo Stock 
Exchange thereafter.

（%）

100

24.6%

19.3%

14.0%

37.6%

44.1%

48.0%

5.7%
0.8%

5.6%
0.7%

6.0%
1.0%

31.3%

30.3%

31.0%

(FY)

2011

2012

2013

80

60

40

20

0

96

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）

Individuals and others
Foreign institutions and individuals
Other corporations
Financial instruments dealers
Financial institutions

INQUIRIES

Shinagawa Front Building 7F
2-3-13, Konan, Minato-ku, Tokyo 108-0075, Japan

Investor Relations Headquarters
Investor Relations Department

Board of Directors Ofﬁce
Corporate Social Responsibility Department

Tel: +81-3-6718-3421 Fax: +81-3-6718-3429

Tel: +81-3-6718-3410 Fax: +81-3-6718-3411

Omron Corporation 
 
 
 
 
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Printed in Japan