Integrated Report 2017
Year ended March 31, 2017
A History of Creating Value
Since our foundation, the OMRON Group has delivered numerous innovations and initiatives that
anticipate social needs, solving a variety of social issues. We will continue to produce innovations based
on evolutions in technology, improve lives and contribute to a better society through our businesses.
Social Issues / Needs
Factory floor
automation, stable
social infrastructure
Labor savings in
transportation systems,
user convenience
Promoting health
through in-home
blood pressure
management
Safe, secure,
pleasant living
FY1967
Developed world’s first
automated train station
system
FY1973
Introduced digital blood
pressure monitors
FY1978
Introduced power relays
for printed circuit boards
50years
200+
million units
● A half-century of offering
● Cumulative global sales
train station solutions
of home-use blood
pressure monitors
surpassed 200 million
units in November 2016
1 billion units per year
● Annual shipments of relays
● Embedded in refrigerators,
microwave ovens, air
conditioners, and other
home appliances
OMRON Solutions
FY1966
Produced general-
purpose relays
(MY Series)
800million units
● Cumulative production
volume over nearly 50
years
● Must-have electronic
components for industrial,
social infrastructure
Sales Trends and History
1933 Established
1948 Incorporated
FY
1960
1960
Developed World’s
First Non-Contact
Switch
Target
Net sales
¥1 trillion
VG2.0
¥500 billion
1990
G'90s
2000
GD2010
2010
VG2020
2020
Long-Term Vision
1987
Developed World’s First
Ultra-High-Speed Fuzzy
Logic Controller
1996 Developed VT-WIN Printed Circuit
Board Inspection System
1995 Developed OKAO® Vision Image Sensing
Technology
1990 Changed Corporate Name to OMRON Corporation
1988 Mass-produced Electronic Power Steering Controller
2016 Introduced AI-equipped
Mobile Robots
2015 Revised OMRON Principles
2011 Introduced Sysmac NJ Integrated Machine Automation Controller
2011 Introduced PV Inverters with AICOT® Technology
2007 Wide-Scale Rollout of Production Floor Safety Business
1970
1967
Developed
World’s First
Automated
Train Station
System
1973
Developed Digital Blood
Pressure Monitor
1980
1978
Introduced Power
Relays for Printed
Circuit Boards
1983
Introduced Digital
Thermometer
1972
Developed SYSMAC Programmable Sequence Controller
1970
Announced the SINIC Theory
1959
Established
Corporate Motto
1966 Produced General-purpose Relays (MY Series)
1964 Developed World’s First Automated Traffic Signal
Industrial Automa-
tion 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
Reducing the
environmental impact
of vehicles, improving
car safety
and convenience
Spread of
renewable
energy
Manufacturing
innovations,
advancement
Labor shortage in
advanced economies,
rising labor costs in
emerging economies
FY1988
Mass-produced
electronic power steering
controllers
FY2011
Introduced PV Inverters
with AICOT® Technology
30million units
● Cumulative sales
of electronic power
steering controllers (as
of March 2017)
7.2GW
● Cumulative shipments of
solar power generation/
storage systems (as of
March 2017)
(Equivalent of seven
power plants)
FY2015
Introduced NX Series
machine automation
controller
Fastest in the
industry
※ Internal survey conducted
March 2015
● Fastest processing speed
and storage capacity in the
industry
● Contributing to the
spread of IoT use in next-
generation factories
FY2016
Introduced AI-equipped
mobile robots
Sold in33countries
● High expectations for use
on production floors for
automobiles, electronic
components, food,
medical equipment, and
more
Target
Net sales
¥1 trillion
VG2.0
¥500 billion
1933 Established
1948 Incorporated
FY
1960
1960
Switch
1959
Established
Developed World’s
First Non-Contact
1970
1967
Developed
World’s First
Automated
1973
Developed Digital Blood
Pressure Monitor
1980
1978
Introduced Power
Relays for Printed
Circuit Boards
1972
Train Station
1970
Developed SYSMAC Programmable Sequence Controller
System
Announced the SINIC Theory
1983
Introduced Digital
Thermometer
1987
Developed World’s First
Ultra-High-Speed Fuzzy
Logic Controller
1990
G'90s
2000
GD2010
2010
VG2020
2020
Long-Term Vision
1996 Developed VT-WIN Printed Circuit
Board Inspection System
1995 Developed OKAO® Vision Image Sensing
Technology
1990 Changed Corporate Name to OMRON Corporation
1988 Mass-produced Electronic Power Steering Controller
2016 Introduced AI-equipped
Mobile Robots
2015 Revised OMRON Principles
2011 Introduced Sysmac NJ Integrated Machine Automation Controller
2011 Introduced PV Inverters with AICOT® Technology
2007 Wide-Scale Rollout of Production Floor Safety Business
Corporate Motto
1964 Developed World’s First Automated Traffic Signal
1966 Produced General-purpose Relays (MY Series)
1
Integrated Report 2017VisionOverviewGovernanceFinancial InformationStrategy
Value Creation Model
Input
Human Capital
Social and Relationship Capital
Financial Capital
Employees
36,008
(As of March 2017,
plus new hires and mid-career hires)
No. of Countries
117
(As of March 2017)
Ratings
AA- （R＆I）／ A（S＆P）
(As of March 2017)
Social Issues
Focus Domains
(P28-47)
● Shortage of skilled
workers in advanced
countries, rising labor
costs in emerging
economies
● Diversification in
manufacturing
Factory
Automation
P36
● Increase in number of
patients with brain and
cardiovascular diseases
caused by hypertension
● Respiratory diseases
increasing worldwide
Healthcare
P40
● Increase in accidents
in advanced countries
due to elderly drivers
● Increase in traffic
accidents, congestion,
and environmental
burden in emerging
economies
Mobility
P44
● Global warming due to
CO2 emissions
Energy
Management
P46
Industrial
Automation
Business
Healthcare
Business
Automotive Electronic
Components
Business
Social Systems,
Solutions and
Service Business
Other Businesses
(including
Environmental
Solutions)
Electronic and
Mechanical Components
Business, Other
S
e
n
s
i
n
g
&
C
o
n
t
r
o
l
+
I
T
H
N
K
Technology
& Intellectual
Property HQ
Collaboration
Collaboration
Partners
(customers, companies in other industries,
universities, research institutes)
2
Business Divisions (P77-89)Core Technologies (P26-27)OMRON Corporation
Intellectual Capital
Manufactured Capital
Intellectual Capital, Manufactured
Capital, Social and Relationship Capital
Patents
8,224
(As of March 15, 2017)
R&D Expenses
¥270 billion
(FY2017 to FY2020 plan)
Capital Investment
¥160 billion
(FY2017 to FY2020 plan)
Growth Investment*
¥100– ¥200 billion
(FY2017 to FY2020 plan)
*M&A + Alliances
Customers
KPIs / Social Value
Factory Automation
Equipment
Medical Equipment
Manufacturers
(Auto, Digital,
Food, Other)
Electronics
Retailers,
Pharmacies,
Other
⇒ Users
Automotive Electronic
Components
Station and Traffic
Equipment Maintenance /
Services
Automakers
Railway / Roads
PV Inverters, Other
Housing
Makers, Other
OMRON
(FY2020)
Financial Goals
Net Sales
¥1trillion
Gross Profit Margin
>41%
Operating Income
¥100 billion
ROIC
>10%
ROE
>10%
EPS
>¥300
Contribute to economic growth
through social productivity
improvement
Contribute to healthy and vibrant
lifestyles for people around the
world
Contribute to safe, secure,
pleasant, and clean lifestyles
for people around the world
Contribute to sustainable
society by promoting the use of
renewable energy
Relays, Other
Home Appliance
Makers, Other
Non-Financial Goals
P17
3
Output (Main Products)Integrated Report 2017VisionOverviewGovernanceFinancial InformationStrategy Contents
Vision
Overview
1
2
6
A History of Creating Value
18
Global Business Expansion
Value Creation Model
20
Financial Highlights
Message from the CEO
22
Non-Financial Highlights
24
11-Year Financial and Non-
Financial Highlights
26
Sensing & Control + THINK
14
VG2.0: New Medium-Term
Management Plan
・Management Issues
・Sustainability Issues and Goals
About the Cover
We are all charged with the task of ensuring the sustainability of our precious planet. Our cover
concept imagines the Earth as a complex puzzle. Each puzzle piece is a solution to a social need.
Team OMRON is committed to solving social needs through technological innovation, meeting all
challenges with passion and courage.
Editorial Policy
The scope of this report covers the 181 companies of the OMRON Group, consisting of 164 consolidated subsidiaries and 16 nonconsolidated
subsidiaries and affiliates accounted for under the equity method (as of March 31, 2017).
OMRON Corporation contributes to the creation of a sustainable society by offering solutions to social issues through our business and by engaging in
responsible environmental, social and governance (ESG) initiatives.
We voluntarily disclose the details of our business and ESG activities to our stakeholders. This integrated report conforms to the integrated reporting
frameworks recommended by the International Integrated Reporting Council and the World Intellectual Capital Initiative. ESG-related disclosures have
been written with reference to the G4 Sustainability Reporting Guidelines (core). See our CSR website for a comparative table.
http://www.omron.com/about/sustainability/guide_line/
4
OMRON Corporation Contents
Strategy
Governance
28
30
STARTING VG2.0
A value-generator for people and
the Earth
Special Feature: 1
Driving Manufacturing
Innovation through Technology
and innovative-Automation
56
Message from the Chairman
58
62
Corporate Governance
Special Feature: 3
A Step Forward in
Compensation Governance
36
Factory Automation
40
Healthcare
44
Mobility
46
Energy Management
48
Factory Tour
OMRON Kyoto Taiyo
50
ROIC Management
52
Special Feature: 2
Human Resources Strategy
68
Directors, Audit & Supervisory
Board Members, Honorary
Chairman, and Executive
Officers
74
Responsible Engagement with
Investors
Financial Information
76
Financial Section
96
The Year in Review
98
Corporate Information /
Other Information
Caution Concerning Forward-Looking Statements
Statements in this integrated report with respect to OMRON’s plans and 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, the Americas, Europe, Greater China, and Asia
Pacific; 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.
5
Integrated Report 2017OverviewVisionStrategyGovernanceFinancial Information
Message from the CEO
OMRON is solving social issues through
our businesses, creating innovation through
technological evolution.
Since our very beginning, our corporate
principles have been the cornerstone upon which
we continue to build sustainable businesses.
We still aspire to the words of our founder, when he said, “We will contribute to global society
through our business.” These words have been the underpinnings of our strong management
foundation, inspiring us to build bigger and better.
Looking at the world of today, we see familiar social issues that have only become more grave
over time. Labor shortages, rising payroll costs, more people suffering from advanced age-induced
lifestyle diseases. We have built our reputation upon on successfully solving these issues through
our businesses. This is why we see these changes as a major business opportunity. Our initiatives
in solving these issues ties neatly together with contributing to the achievement of the Sustainable
Development Goals of the United Nations.
Our new medium-term management plan outlines our strategy for sustainable growth. We will be
bold in pursuing new technological innovations. And we will use these technologies as drivers of
our business to solve social issues. These technologies will drive steady, sustainable growth in our
businesses and in our corporate value.
★OMRON Principles (P56-57)
President and CEO
July 2017
6
OMRON Corporation 7
Integrated Report 2017VisionOverviewGovernanceFinancial InformationStrategy EARTH-1 STAGE Review (Fiscal Years 2014-2016)
■ Basic Strategy Successes and Issues
EARTH-1 STAGE represents the second medium-
term management plan under our long-term vision,
VG2020. Under this plan, we pursued three basic
strategies*1 under an overall policy of establishing a
structure for self-driven growth. Our top priority
under this plan was to maximize growth in our
IA-related businesses*2. The Industrial Automation
Business (IAB) is the driving force within the IA-
related businesses. Here, our investments
beginning with GLOBE STAGE (the first medium-
term plan) and new strategies under EARTH-1
STAGE have succeeded in generating steady
growth for the segment. Specifically, fiscal 2016
sales for the IAB amounted to ¥331 billion, a 13%
increase compared to fiscal 2013. This result even
outperformed our EARTH-1 STAGE goal of ¥325
billion. This result was entirely due to new
innovations and our focus on four industries*3 we
believe will contribute to future societal
development. In our Industrial Automation
Business, we have created a strong foundation
that will serve to propel growth under our next
medium-term management plan.
At the same time, we expected our Backlights
Business and Environmental Solutions Business
to be two sources of new business opportunities.
Sales in these businesses declined due to
dramatic changes in the market. The impact of
the downturn in these businesses prevented us
from achieving the six goals outlined under
EARTH-1 STAGE. We intend to roll the successes
and issues from our EARTH-1 STAGE basic
strategies forward in the strategies of our next
medium-term management plan.
*1 Existing Businesses Strategy (Maximization of IA-related businesses),
Super-Global Growth Strategy, and New Business Strategy for the
Optimization Society
*2 IA-related businesses: Extends to both the Industrial Automation Business
and the Electronic and Mechanical Components Business
*3 Four focus industries: Automobiles, digital, food & beverages, and social
infrastructure
■ Profitability Improvement under ROIC Management
I am happy to say that we have made steady
advancements in our ROIC management. OMRON
management is focused on portfolio management,
continuing our transition to a business structure that
generates both growth and profit. As an example,
our Industrial Automation Business acquired a robot
manufacturer and a motion controller
manufacturer in the U.S. during fiscal 2015. On
the other hand, we sold off our oil and gas
business in the U.S. during fiscal 2016. Our
Healthcare Business acquired a Brazilian nebulizer
maker during fiscal 2014, further strengthening
Management Indicators (EARTH-1 STAGE)
Net Sales
Gross Profit Margin
Operating Income Margin
ROIC
ROE
EPS
FY2016 Targets
(Announced April 2014)
Over ¥900 billion
Over 40％
Over 10％
Approx.13％
Approx.13％
Approx. ¥290
Results
¥794.2 billion
39.3％
8.5％
10.3％
10.1％
¥215.1
8
OMRON Corporation the footing of our business. In contrast, we sold
our hospital-use medical equipment business in
Japan. By seizing the opportunity to add or
replace businesses, even in our industrial
automation and healthcare growth segments,
we are building a stronger foundation for growth
and improving our profit structure.
One of our key indicators is gross profit
margin. Here, we posted a record-high 39.3%
for fiscal 2016. This is the equivalent of a 40.7%
gross profit margin if we use the fiscal 2013
foreign exchange rate with which we set our
EARTH-1 STAGE goals. Not only does this
exceed our EARTH-1 STAGE goal of 40%, it also
happens to be among the highest gross profit
margins in the Japanese electronics industry.
We believe our advancements in ROIC
management is largely responsible for this
result. Beyond portfolio management, we can
also point to thorough company-wide practice of
our Down-Top ROIC Tree concept. This concept
links ROIC goals down to the very front lines of
our business. We are improving our profitability
surely and steadily through these types of
ongoing internal efforts.
And, we intend to further develop our
portfolio management and Down-Top ROIC Tree
management, advancing ROIC management for
greater earning power at OMRON.
★ROIC Management (P50-51)
★Down-Top ROIC Tree (P50)
★ Portfolio Management (P51)
New Medium-Term Management Plan VG2.0 (Fiscal Years 2017-2020)
■ Greater Growth Opportunities through Technological Innovation
We have worked hard over many years to create
innovations through our unique Sensing &
Control + THINK core technologies that solve
customer issues. More recently, we have taken
on the challenge to create products and services
with even higher added value as we make
advances in IT-compatible factory automation
equipment and other areas. Meanwhile, we look
outside our environment seeing familiar social
issues becoming even more severe. Labor
shortages, a rapidly aging population, frequent
motor vehicle accidents and congestion, climate
change, and so many more. Further, new
technologies (Artificial Intelligence (AI), the
Internet of Things (IoT)*4 robotics, etc.) have
developed with much greater speed than we
could have imagined when we started our
VG2020 plan. We see these changes as a
favorable development for our businesses.
Riding the wave of new technological innovation
to lead the world in solving social issues is not
only in line with the OMRON Principles and our
mission (i.e. To improve lives and contribute to a
better society), it is also an incredible business
opportunity. We intend to seize the
opportunities in these global changes, using
technology to drive dramatic growth. To this
end, we formulated VG2.0, a new four-year
medium-term management plan.
*4 Connecting all manner of items to the Internet
9
Integrated Report 2017VisionOverviewGovernanceFinancial InformationStrategy ■ Three Basic Strategies
VG2.0 is built on three basic strategies. The first is
to redefine our focus domains and maximize the
strengths of our businesses. We have defined four
businesses that both reflect our strengths and
represent potentially large growing markets through
which we can solve social issues: Factory
Automation, Healthcare, Mobility, and Energy
Management. Under VG2.0, we will focus mainly
on Factory Automation and Healthcare as two
sectors in which we can leverage our strengths
with the most effectiveness.
The second basic strategy is to evolve our
business model. Our plan is to deliver total
solutions that solve customer issues. Rather than
develop stand-alone products and services, we will
provide applications based on new, integrated
technologies, incorporating AI, IoT, and more.
The third basic strategy is to reinforce our core
technologies. As discussed above, VG2.0 is our
strategy to generate innovation based on
technology. For example, we will continue to clearly
identify and develop cross-organizational core
technologies (AI, image processing / recognition,
etc.) and other core technologies unique to each
particular business.
Open innovation will play a critical role in
propelling these three basic strategies forward.
We intend to work closely with customers,
companies in other industries, universities,
research institutes, and others to drive
technological innovation.
★Four Focus Domains: Factory Automation, Healthcare, Mobility,
and Energy Management (P36-47)
Basic Strategies of VG2.0
1. Redefine our focus domains and
maximize the strengths of our
businesses
2. Evolve our business model
3. Reinforce our core technologies
×
Collaborative creations with partners
■ Annualized Growth of 10% in Factory Automation and Healthcare Businesses
By segment, we intend to make a leap forward in
growth in our Industrial Automation Business and
Healthcare Business.
Through our innovative-Automation Manufacturing
concept, the Industrial Automation Business will
deliver a stream of products with new value to our
customers. OMRON is unique as a manufacturer
of entire product lines across all categories of
manufacturing controls. We see this as our
greatest strength. By capturing detailed
interactions among our devices, we make the
difficult task of controlling complex, advanced
movements a simple matter. For example,
equipment adjustments that used to take an
experienced engineer more than a month to
complete can now be performed in just a few
days. We can also automate processes that used
to rely heavily on human labor due to the difficulty
in automation. In the future, we will be able to
use Internet-connected products, now numbering
in the hundreds of thousands, and controllers
outfitted with AI to capture all data from the
manufacturing line. This will allow manufacturers
to predict and prevent equipment trouble to a
degree never possible before. In April, we
announced our acquisition of industrial camera
maker, Sentech. Here, we bolstered our already
strong and diverse product lines, establishing a
competitive advantage through total solutions. Our
sales target for fiscal 2020 is ¥480 billion, or 10%
annual growth. innovative-Automation will serve as
a base for business expansion as we raise the
Industrial Automation Business share of total sales
from 40% to 50%.
10
OMRON Corporation In our Healthcare Business, we plan to
promote Zero Events, an initiative to use blood
pressure monitors to help eliminate life-
threatening seizures. Critical to this initiative will
be creating a new mainstay business that
combines the world’s first wearable blood
pressure monitor and a data management
service connected to a medical clinic. We also
plan to expand and strengthen our sales
channels in the emerging economies. We will
establish an even stronger competitive
advantage beyond the 50% global market share
we hold for blood pressure monitor today.
Aiming to be the undisputed leader in market
share, our Healthcare Business will grow an
annual 10% through these initiatives and more,
including products offering new concepts in
respiratory diseases and pain management.
★ innovative-Automation (P33-34)
★ Zero Events (P42)
■ Investment Discipline Backed by ROIC Management
Under VG2.0, we have set six new management
indicators as targets for revenue and profit
growth. Our target for net sales is ¥1 trillion for
fiscal 2020. Looking beyond 2020, we plan to
make well-analyzed investments critical for
future growth. More specifically, we intend to
increase M&A investments and R&D
expenditures to bolster core technologies,
mainly to grow our Industrial Automation
Business and Healthcare Business. At the same
11
Integrated Report 2017VisionOverviewGovernanceFinancial InformationStrategy time, we will use the Down-Top ROIC Tree
approach, as well as portfolio management and
other deeply rooted ROIC management
principles to generate operating income of ¥100
billion. We will also work to control selling,
general and administrative expenses as a ratio of
net sales.
Continuing to improve gross profit margin
represents another major part of VG2.0, which
sets a target of 41% or greater. This gain in
profit will be used as a resource for investment
and even greater profit gains. As a company
focused on investing in our future, an ideal level
of ROIC and ROE for our company would be
between 10% and 15%. Under VG2.0, we have
set targets for both at 10% as the minimum
level to see us through an unpredictable and
changing business environment.
Management Indicators (VG2.0)
Net Sales
Gross Profit Margin
Operating Income
ROIC
ROE
EPS
FY2020 Targets
¥1 trillion
Over 41％
¥100 billion
Over10％
Over10％
Over ¥300
†1USD = ¥110
1EUR = ¥118
■ Sustainable Increase in Shareholder Value through Medium- and Long-Term
Corporate Growth
Our profit distribution policy remains unchanged.
Our first priority is on investment for future
growth. Our second priority is dividends, and our
third priority is stock buybacks. As always, we
prioritize investment for growth to improve
profits, using these profits as resources for
sustainable increase in shareholder value. We
intend to secure stable dividend distributions,
aiming for an annual dividend payout ratio of
approximately 30% and DOE of 3%. Over the
long term, we will take opportunities to use
reserves for stock buybacks as they arise. Over
the six years since taking over as CEO (2011 to
2016), OMRON’s total shareholder return (TSR)
(annualized) has been 15%, greater than the
TOPIX average of 12% for the same period. Our
total return ratio for the most recent three-year
period is 48%. VG2.0 was planed with a keen
awareness of capital efficiency and shareholder
returns. We will continue to operate our
business with our shareholders in mind, as we
always have in the past.
■ TSR (Annualized Rate)
6 years (since 2011)
OMRON
TOPIX
TOPIX Electric Appliances
15%
12％
10％
■ Identifying Issues for Sustainability, Setting Non-Financial Goals
To achieve the management targets under
VG2.0, we must have an effective human
resources strategy for developing a new
generation of leaders and for attracting a diverse
workforce from outside sources. Last year, we
began an engagement survey (job satisfaction
12
OMRON Corporation Strengthen ROIC Management deeply
rooted, and aim for the balance of the
profit growth & active investment for the
future growth
survey) among all employees worldwide. We
will perform this survey annually, incorporating
the results into our management and human
resources strategy to create a more satisfying
work environment for our employees. We must
also engage in other initiatives, including
reinforcing our supply chain management and
socially sustainable manufacturing practices that
reduce our carbon footprint. We incorporated
these matters into our VG2.0 strategy. We also
included other structural matters related to
sustainability, such as governance and risk
management, which will lead to greater trust in
our management foundation.
We then identify operational and structural
issues important as above and social issues we
can solve through our businesses to be
addressed as our sustainability issues. We have
linked these issues with the Sustainable
Development Goals (SDGs) of the United
Nations. Each sustainability issue has
corresponding non-financial goals. Rest
assured that we will continue to improve our
corporate value by creating value for society.
★ Human Resources Strategy (P52-54)
★ Governance (P58-67)
★ Sustainability Issues (P16)
★ Non-Financial Goals (P17）
We see a variety of risks in this era of rapid and
dramatic change. In terms of protecting
ourselves from political risks or natural disasters,
we pursue a course of integrated risk
management, practicing the PDCA cycle. To
respond to changes in our operating
environment, we have developed a number of
alternate scenarios for each business segment
as part of our plan to react to any dramatic
changes. When given the opportunity, however,
we take risks to grow strong and deep as a
company. We will continue to work hard as a
team, providing value to society. I ask for your
continued support in our efforts.
13
13
Integrated Report 2017VisionOverviewGovernanceFinancial InformationStrategy VG2.0: New Medium-Term Management Plan
Management Issues
VG2.0 is the final four-year business plan under our VG2020 long-term management strategy, which we
started in 2011. VG2.0 is also our growth strategy in anticipation of the social changes beyond that
timeframe. We are looking at the trends, the business environment, and social changes over the next 10
years in light of our SINIC predictive theory*1 and Sustainable Development Goals*2. Here, we set the four
focus domains since we expect to see social needs emerging in these domains most. New technologies,
including Artificial Intelligence (AI), the Internet of Things (IoT), and robotics are evolving at a rate and
scope beyond anything we could have imagined. These technologies dovetail with the evolution of our
own core Sensing & Control + THINK technologies. We are redesigning our business models as we work
to solve social issues through technological innovation.
■ VG2.0 Overview
VG2.0 is built around three basic strategies.
To hasten our progress under these strategies, an
open innovation strategy is added, as well as a
functional business strategy to support and
promote our plan execution.
Pivotal Strategies: Solving Social Issues through our Businesses
Redefine our focus
domains and maximize
the strengths of our
businesses
We have defined focus domains which we believe best leverage our strengths:
Factory Automation, Healthcare, Mobility, and Energy Management.
Evolve our business
model
Our plan is to deliver total solutions that solve customer issues. Rather than
develop stand-alone products and services, we will provide applications based
on new, integrated technologies, incorporating AI, IoT, and more.
Reinforce our core
technologies
Our aim is to reinforce both cross-organizational core technologies (AI, robotics,
etc.) and the core technologies within each business unit.
×
Open Innovation Strategy
Collaborative creations
with partners
We intend to work closely with customers, companies in other industries,
universities, research institutes, and others to drive technological innovation.
Functional Business Strategy: Functions Supporting VG2.0
Human resource management
Manufacturing
Risk management
14
OMRON Corporation ■ Our Future Under VG2.0
VG2020
EARTH-1
STAGE
GLOBE
STAGE
VG2.0
(2017-2020)
Our Future
Under VG2.0
A value-generator for people and
the Earth that is qualitatively and
quantitatively superior
Net Sales ¥1trillion
¥100 billion
Operating
Income
Growing Concerns for
Social Issues
Rapid Technological
Innovation
2030 Shared Goals among
International Society
Labor shortages
Adapting to changes
in manufacturing
Aging society
Soaring medical costs
http://www.un.org/sustainabledevelopment/
AI
OMRON SINIC Predictive Theory
Frequent traffic accidents
and congestion
Deteriorating urban
environment
Advancing global
climate change
IoT
Robotics
https://www.omron.com/about/principles/
sinic/
*1 Predictive theory developed in 1970 by OMRON founder Kazuma Tateishi. SINIC is an abbreviation for Seed-Innovation to Need-Impetus Cyclic Evolution.
*2 Sustainable Development Goals were adopted by the United Nations in 2015.
■ Creating and Promoting VG2.0 within OMRON
In April 2016, OMRON began strategic planning
for VG2.0. The following August, executive
officers discussed intensively about the plan at an
Executive Council meeting chaired by the CEO.
After reviewing our results so far under EARTH-1
STAGE, we identified ongoing issues to address in
VG2.0. We also forecasted likely changes over the
next 10 years, identifying our strengths and
weaknesses. Finally, we discussed our objectives
and what we hoped to achieve. After discussions
in subsequent board of director meetings, each
individual business unit and functional division
department were tasked to propose specific
strategies, which were communicated down to
every work location. In this way, the planning
process was not a one-sided management affair.
Many different departments and employees also
participated.
Prior to launching the plan, our CEO and other
top managers explained the plan to OMRON
employees, sharing strategies company-wide to
promote better understanding of and motivation
for VG2.0. We will continue to promote the
objective and progress through internal
communication.
15
Integrated Report 2017VisionOverviewGovernanceFinancial InformationStrategy Sustainability Issues and Goals
Our desire is to always be a company that solves social issues, guided in our mission by the OMRON
Principles. To this end, we incorporated sustainability initiatives into VG2.0, identifying issues and setting
goals based on the Sustainability Policy set by our board of directors. In reaching our goals for
sustainability, we will also grow as a company and raise corporate value by creating value for society.
★ OMRON Principles (P57)
★ Sustainability Policy (P57)
■ Identifying Sustainability Issues and Setting Goals
STEP 1
STEP 2
STEP 3
Identify Issues
Analyze global social issues and ESG trends*1 to identify a broad range of environmental, social, and
economic issues
*1 Sustainable Development Goals, Global Reporting Initiative, The United Nations Global Compact, ISO 26000, Electronic Industry Citizenship Coalition,
Dow Jones Sustainability Index, FTSE4Good, MSCI Global Sustainability Indexes, etc.
Set Priorities and Goals
Work with relevant departments to analyze the materiality of issues through stakeholder and OMRON
perspectives*2
*2 Consider the impact of our businesses on the economy, environment and society, the relation with VG2.0, factors for employee motivation and the
impact on corporate value
Discussions and Approvals at the Management Level
Discussed at the Executive Council with the CEO acting as a meeting chair
Approved by the board of directors
■ Sustainability Management
We have defined two main areas of issues to
tackle under VG2.0. The first are those social
issues we can solve through the four focus
business domains redefined . The second are
issues that support the execution and respond to
the expectations of our stakeholders.
We considered specific initiatives regarding
these issues, setting related non-financial targets.
We will regularly check the progress of these
initiatives and targets, making progress as we
engage with our stakeholders. Achievement of our
targets will also contribute to progress in
Sustainable Development Goals.
OMRON Principles
Sustainability Policy
VG2.0
Solving Social Issues through our Businesses
Responding to Social Needs
Factory Automation
Healthcare
Mobility
Energy Management
Collaborating with Partners
Human Resource Management
Manufacturing
Risk Management
Issues Responding to Stakeholder Expectations
16
OMRON Corporation Increase Corporate Value by Creating Value for Society
Major Financial Goals (Fiscal 2020)
P3, P12
Net Sales
¥1trillion
Operating
Income
¥100 billion
Sustainability Issues and Major Non-Financial Goals (Fiscal 2020)
Response to Social Needs
■ Factory Automation
Manufacturing Innovation
■ Healthcare
Project Zero for brain and cardiovascular diseases,
severe asthma
■ Mobility
Reduction of traffic accidents and the environmental
burden of vehicles
■ Energy Management
Spread of renewable energy
- New products leading to innovative-Automation in
four focus industries
~Create Control Technologies for Manufacturing Innovation~
P36-P47
- Blood pressure monitor unit sales: 25 million / year
- Nebulizer + Asthma wheeze monitor unit sales: 7.65 million / year
- Create safe driving support systems and technologies
- Create advanced driving support / 360° driver assistance
technologies
- Automobiles with environmentally friendly components: 10
million units / year
- Cumulative output volume for solar power (PV) / storage
systems: 11.2GW
Human Resource Management
■ Talent Attraction and Development
■ Diversity and Inclusion
■ Wellness Management
■ Occupational Health and Safety
■ Respect for Human Rights and Labor
Practices
P52-P55
- Evolve and advance TOGA*1 to act in the spirit of the OMRON
Principles
- Ratio of non-Japanese in managerial positions overseas: 66%
- Accelerate PDCA cycle via employee engagement surveys
- Ratio of women in managerial roles
(OMRON Group in Japan): 8%
Manufacturing
■ Product Safety and Quality
■ Reduction of Greenhouse Gas Emissions
■ Appropriate Management and Reduction
of Hazardous Substances
■ Supply Chain Management
- Ratio of product safety assessments for newly developed
products: 100%
- Environmental contribution > CO2 emissions of production sites
- Reduction of mercury through the prevalence of electronic
digital thermometers and electronic blood pressure monitors:
69 tons / year
- Sustainability self-assessments by important vendors:
・ Implementation ratio: 100%
・ Score of 85 or higher
Risk Management
■ Fair Business Practices
■ Privacy and Data Security
- Continuous evolution in group governance
・ Consistent promotion of OMRON Group Rules *2
at all global bases
・ Global training in ethics rules
・Build a new information security system
(Note) OMRON updates the progress and showcases regarding non-financial goals on our corporate website.
*1 Abbreviation for The OMRON Global Awards, an internal award system encouraging employees to put the OMRON Principles in action
*2 Internal rules to ensure OMRON management transparency, fairness, and global perspective; serves as a foundation for proper and timely decision-making
17
Integrated Report 2017VisionOverviewGovernanceFinancial InformationStrategy
Global Business Expansion
OMRON manufactures and sells market-leading sensing and control products in 117 countries around the
world. Our products include control equipment, electronic components, automotive electronic components,
social infrastructure, and healthcare.
Other Businesses
Identifying and developing the next
generation of OMRON businesses
Eliminations and Corporate
1%
¥5.5 billion
Industrial Automation
Business (IAB)
OMRON’s mainstay business;
innovating global manufacturing
through factory automation
Healthcare
Business (HCB)
Providing a comprehensive
lineup of healthcare
products for home and
hospital use
Social Systems,
Solutions and Service
Business (SSB)
Offering social infrastructure
systems for a safer, more
comfortable society
13%
¥ 101.3
billion
8%
¥67.1
billion
8%
¥63.3
billion
Fiscal 2016
Net Sales
by Segment
¥794.2
billion
42%
¥ 331.0
billion
16 %
¥ 132.1 billion
12%
¥93.9 billion
Automotive Electronic
Components Business (AEC)
Electronic and Mechanical
Components Business (EMC)
Developing new ideas in automotive
electronics to make automobiles safer and
more environmentally friendly
Providing the global market with
sophisticated components that create
seamless relationships between people
and machines
■ Fiscal 2016 Earnings by Business Segment
(Billions of yen)
Business Segment
Net Sales
Operating Income (Loss) Operating Income Margin
Industrial Automation Business (IAB)
Electronic and Mechanical Components Business (EMC)
Automotive Electronic Components Business (AEC)
Social Systems, Solutions and Service Business (SSB)
Healthcare Business (HCB)
Other Businesses
Eliminations and Corporate
Total
331.0
93.9
132.1
67.1
101.3
63.3
5.5
794.2
52.0
9.4
7.1
4.0
8.5
(2.1)
(11.3)
67.6
15.7%
10.0%
5.4%
6.0%
8.4%
(cid:12063)
(cid:12063)
8.5%
18
OMRON Corporation Asia Pacific
11. 7%
¥92.7 billion
Ratio of overseas
sales to net sales
Approx.
58%
Greater China
18.7%
¥148.3
billion
Europe
Fiscal 2016
Net Sales
by Region*
¥794.2
billion
Japan
41.6%
¥330.4
billion
13.6%
¥108.1 billion
Americas
14. 4%
¥114.7 billion
Ratio of overseas
employees to
total employees
Approx.
68%
Asia Pacific
16.7%
6,017
Fiscal 2016
Employee Ratio
by Region*
36,008
Employees
Worldwide
Europe
6.0%
2,173
Greater
China
34.1%
12,257
Japan
31. 7%
11,414
Americas
11.5%
4,147
* As of March 31, 2017
Note: Regional categories are defined as follows:
Americas: North America, Central America, South America
Europe: Europe, Russia, Africa, Middle East
Greater China: China, Taiwan, Hong Kong
Asia Pacific: Southeast Asia, Korea, India, Oceania
19
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Financial Highlights
Gross Profit Margin
Gross profit margin
Selling, general and administrative
expenses ratio
(excluding R&D expenses)
R&D expenses ratio
Operating income margin
（%）
40
37.537.5
36.836.8
37.137.1
39.3%
38.538.5
39.339.3
38.538.5
39.339.3
32
24
16
8
0
23.023.0
23.523.5
23.423.4
23.523.5
23.423.4
24.724.7
24.424.4
10
7.87.87.8
6.76.76.7
FY
10
6.86.86.8
6.56.56.5
11
7.07.07.0
6.76.76.7
12
8.88.88.8
6.26.26.2
13
10.210.210.2
5.75.75.7
14
7.57.57.5
6.36.36.3
15
8.58.58.5
6.46.46.4
16
5
0
ROIC
Return on invested capital (ROIC)
ROIC =
Net Income
Invested Capital*
(Net Assets + Interest-Bearing Debt)
* Invested capital represents the average of prior
year-end result and current year quarterly results
（%）
15
10.3%
7.87.8
8.68.6
4.84.8
13.413.4
11.311.3
10.310.3
9.79.7
Expected cost of
Expected cost of
Expected cost of
capital
capital
capital
6%
6%
6%
FY
10
11
12
13
14
15
16
Gross profit margin and operating income margin improved due to a
A focus on ROIC management moved results back to double-digit levels.
stronger earnings structure, countering an even stronger yen valuation
This helped us achieve ROIC in excess of the Company’s expected cost
than the prior year. We aim for over 41% gross profit margin and 10%
of capital at 6% under our EARTH-1 STAGE plan. We plan to continue to
operating income margin by fiscal 2020.
reach ROIC levels in excess of 10%.
Ratio of Overseas Sales to Total Net Sales
Overseas total Japan
58.4%
51.451.4
52.252.2
48.648.6
47.847.8
51.151.1
48.948.9
55.455.4
44.644.6
60.160.1
60.360.3
58.458.4
39.939.9
39.739.7
41.641.6
FY
10
11
12
13
14
15
16
（%）
60
50
40
30
20
10
0
The negative impact of the strong yen led to a slightly lower ratio of
overseas sales for the year. However, sales in Southeast Asia and other
emerging economies continued to grow. We intend to expand our
businesses, particularly among the emerging economies.
20
OMRON Corporation EPS
■ Earnings per share
■ Cash dividends per share
Dividend payout ratio
Cash and Cash Equivalents
■ Cash and cash equivalents ■ Total interest-bearing liabilities
¥215.1
（%）
¥126.0billion
(Billions of yen)
(Yen)
300
250
200
150
100
50
0
283.9283.9
37.6%37.6%
209.8209.8
219.0219.0
215.1215.1
121.7121.7
24.7%24.7%
137.2137.2
27.0%27.0%
25.3%25.3%
74.574.5
2828
3030
3737
5353
31.1%31.1%
31.6%31.6%
25.0%25.0%
7171
6868
6868
60
50
40
30
20
10
0
150
125
100
75
50
25
0
126.0126.0
102.6102.6
90.390.3
82.982.9
74.774.7
55.755.7
45.545.5
45.345.3
18.818.8
5.65.6
0.50.5
0.00.0
0.00.0
0.20.2
FY
10
11
12
13
14
15
16
FY
10
11
12
13
14
15
16
The Company continued to provide a dividend payout ratio in excess of 30%
The Company maintained a zero balance in real terms for interest-bearing
to shareholders. We will continue stable and sustainable shareholder returns.
debt (cash in excess of interest-bearing debt). We may raise capital to
invest in future growth as the need arises.
Capital Expenditures
■ Capital expenditures ■ Depreciation and amortization
¥25.7billion
(Billions of yen)
38.138.1
36.936.9
33.733.7
28.328.3
28.328.3
28.328.3
23.223.2
23.023.0
22.622.6
22.522.5
25.125.1
31.531.5
29.029.0
25.725.7
40
30
20
10
0
FY
10
11
12
13
14
15
16
The Company restrained capital investment temporarily in response to
changes in the business environment. Moving forward, we plan to
re-engage in active investment, building a strong foundation for growth. We
expect to invest ¥160 billion over the next four years in capital investment.
21
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Non-Financial Highlights
OMRON has received independent assurance from Deloitte Tohmatsu Sustainability Co., Ltd. related to our stated ratios of non-Japanese
in managerial positions overseas*1, women in managerial roles, and employees with disabilities.
★ Independent Practitioner’s Assurance (P100)
Ratio of Non-Japanese in Managerial Positions Overseas
Ratio of Women in Managerial Roles （OMRON Group in Japan）
49%
66
49
46
36
42
42
31
Ratio of women in managerial roles
■ No. of women in managerial roles
3.3%
(Number of women managers)
8.0%
60
5353
3636
30
2727
22
23
3.3%
2.3%
1.4%
1.5%
1.8%
1.9%
45
30
15
（%）
8
6
4
2
0
FY
11
12
13
14
15
16
20（Target）
FY
12
13
14
15
16
17
0
20（Target）
Our human resources strategy is one of the important policies in VG.2.0. We
VG.2.0 will be our guide to a more diverse workforce. We recognize the
believe that it is best to entrust the management of our overseas business
fact that few women play responsible leadership roles in Japan. Our plan
units to local managers. We have endeavored to localize key positions in our
calls for raising the ratio of women in management to 8% by the end of
overseas operations. Our fiscal 2020 goal is to have local managerial talent fill
fiscal 2020.
66% of key managerial positions, and we are advancing the training and
promotion of local management talent.
*1 A position deemed crucial for executing VG2020. The CEO must approve the
hiring/transfer of the person assigned this role.
Note: Figures represent results as of April 20.
Ratio of Employees with Disabilities
Employees with disabilities at OMRON Corporation
OMRON Group in Japan
Japanese national average
OMRON Corp.
OMRON Group
in Japan*2
（%）
3.33%
2.47%
2.88
2.20
3.14
3.11
2.24
2.22
3.24
2.35
3.40
3.33
3.14
2.44
2.41
2.47
1.68
1.65
1.69
1.76
1.82
1.88
1.92
Production floor of OMRON Kyoto Taiyo
Since founding OMRON Taiyo Co., Ltd. (special subsidiary of OMRON) in
1972, we have continued to create jobs and expand opportunities for the
FY
10
11
12
13
14
15
16
disabled. Through these activities, we are helping to create a society in
Note: Ratio of employees with disabilities (including special subsidiaries) as of
June each year
*2 For companies subject to the Act on Employment Promotion etc. of Persons
with Disabilities
which the disabled feel the joy and satisfaction of making a positive
contribution through work. We are expanding these initiatives globally.
★ Factory Tour of OMRON Kyoto Taiyo (P48)
22
（%）
80
60
40
20
0
5
4
3
2
1
0
OMRON Corporation OMRON has received independent assurance from Bureau Veritas Japan Co., Ltd. related to our environmental contribution*3 and net
sales to CO2 emissions*4.
★ Independent Practitioner’s Assurance (P100)
Environmental Contribution
Net Sales to CO2 Emissions
■ Environmental
contribution
■ CO2 emissions of
production sites
593 ton-CO2
thousand
（Thousand ton-CO₂）
Environmental Contribution > CO2 Emissions of Production Sites*5
Targets Achieved for Five Consecutive Years
1,000
800
600
400
200
851
661
593
508
313313
193
187
189
193
203
215
221
202
200
¥3.96 ton-CO2
million /
20% Improvement vs. 2010
(Million yen / ton-CO₂)
4.12
3.96
3.833.83
4.30
3.31
3.21
3.213.21
3.60
5
4
3
2
1
0
0
FY
10
11
12
13
14
15
16
FY
10
11
12
13
14
15
16
20（Target）
Environment Vision Green OMRON 2020 is our initiative for creating a sustainable society.
OMRON products and services (including solar power conditioners) reduce environmental impact and contribute to building a low-carbon society. At the
same time, we are striving to reduce CO2 emissions at our production sites by introducing OMRON energy-saving products, which include the Environment
ANDON software. For the past five years, our environmental contribution has exceeded the CO2 emissions from our production sites. Rest assured that we
will continue to reduce our environmental load and expand contributions to the environment through our business operations in our own way.
★ Green OMRON 2020 http://www.omron.com/about/sustainability/environ/vision/green_omron2020/
Contributing to the Global
Environment through Business Activities
PV inverters convert the direct current generated from solar
power into the alternating current used by households
Example of Energy-Generation Product
Maximize the Effective Use of
All Management Resources
(Improve energy, resource productivity)
Products and Services
Useful to Society
(Grow our businesses that have
a positive impact on the
global environment)
Reduce Our
Environmental Impact
Greater
Efficiency
Greater Volume of
Environmental Contribution
Example of Energy-Saving Product
Greater
Contribution
・Electricity monitors continuously measure electricity
volume (left)
・Environment ANDON (right) is software that provides all-in-one
comparison, analysis, and monitoring of measurement data for
each equipment
*3 Environmental Contribution = Volume of CO2 emissions reduction contributed by society’s
use of the OMRON Group’s energy generation and savings products and services.
Calculation method ： http://www.omron.com/about/sustainability/environ/contribution/products/
*4 Net sales to CO2 emissions = Net sales per one ton of CO2 emissions
*5 Since fiscal 2016, OMRON has been using the following published figures for the CO2
emissions coefficient associated with electric power:
Japan: Ministry of the Environment-By Power Company (updated annually); China: National
Development and Innovation Committee – By Power Company (updated annually); Other: IEA,
by country (2011)
http://www.omron.com/about/sustainability/environ/reduce/co2/
Figures in*4 and *5 have been revised retroactively via updated computational method for the
CO2 emissions coefficient.
23
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy 11-Year Financial and Non-Financial Highlights
OMRON Corporation and Subsidiaries (As of and for the years ended March 31)
Operating Results:
Net sales
Gross profit
Selling, general and administrative expenses (excl. R&D expenses)
R&D expenses
Operating income
EBITDA (Note 1)
Net income (loss) attributable to OMRON shareholders
Cash Flows:
Net cash provided by operating activities
Net cash used in investing activities
Free cash flow (Note 2)
Net cash provided by (used in) financing activities
Financial Position:
Total assets
Cash and cash equivalents
Total interest-bearing liabilities
Total shareholders’ equity
Per Share Data:
Net income (loss) attributable to OMRON shareholders (EPS)
Shareholders’ equity
Cash dividends (Note 3)
Dividend payout ratio
Financial Indicators:
Gross profit margin
Operating income margin
EBITDA margin
Return on invested capital (ROIC)
Return on equity (ROE)
Ratio of shareholders’ equity to total assets
Total return ratio (Note 4)
Capital expenditures
Depreciation and amortization
Ratio of overseas sales
Non-Financial Data
Number of employees
Ratio of overseas employees to total employees
Number of patents held (Note 5)
Environmental contribution (thousand ton-CO2) (Note 6)
CO2 emissions of production sites (thousand ton-CO2) (Note 7)
Notes:1. EBITDA = Operating income + Depreciation and amortization
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
¥723,866
¥762,985
¥627,190
¥524,694
¥617,825
¥619,461
¥650,461
¥772,966
¥847,252
¥833,604
278,241
164,167
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
20.6%
38.4%
8.6%
13.3%
9.9%
10.3%
60.7%
49.7%
44,447
33,922
47.3%
32,456
64.9％
5,206
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
185.9
1,662.3
42
22.6%
38.4%
8.6%
13.3%
10.4%
11.3%
59.7%
74.7%
37,072
36,343
52.1%
35,426
65.7％
5,717
218,522
164,284
48,899
5,339
38,835
(29,172)
31,408
(40,628)
(9,220)
21,867
538,280
46,631
52,970
298,411
(132.2)
1,355.4
25
ー
34.8%
0.9%
6.2%
(7.6%)
(8.7%)
55.4%
ー
36,844
33,496
49.7%
32,583
63.4％
5,205
184,342
133,426
37,842
13,074
40,088
3,518
42,759
(18,584)
24,175
(20,358)
532,254
51,726
36,612
306,327
16.0
1,391.4
17
106.4%
35.1%
2.5%
7.6%
1.0%
1.2%
57.6%
106.7%
19,524
27,014
50.7%
36,299
68.1％
5,218
231,702
142,365
41,300
48,037
71,021
26,782
41,956
(20,210)
21,746
3,333
562,790
74,735
45,519
312,753
121.7
1,421.0
30
24.7%
37.5%
7.8%
11.5%
7.8%
8.7%
55.6%
25.2%
23,192
22,984
51.4%
35,684
67.8％
5,452
193
187
227,887
145,662
42,089
40,136
62,753
16,389
31,946
(26,486)
5,460
(33,492)
537,323
45,257
18,774
320,840
74.5
1,457.5
28
37.6%
36.8%
6.5%
10.1%
4.8%
5.2%
59.7%
37.7%
28,341
22,617
52.2%
35,992
67.7％
5,959
189
193
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
137.2
1,667.0
37
27.0%
37.1%
7.0%
10.4%
8.6%
8.8%
64.0%
27.0%
28,285
22,452
51.1%
35,411
67.4％
6,448
313
203
297,208
181,225
47,928
68,055
93,144
46,185
79,044
(31,125)
47,919
(16,298)
654,704
90,251
488
430,509
209.8
1,956.1
53
25.3%
38.5%
8.8%
12.1%
11.3%
11.6%
65.8%
25.3%
33,653
25,089
55.4%
36,842
69.1％
6,635
661
215
332,607
198,103
47,913
86,591
114,930
62,170
77,057
(39,517)
37,540
(29,303)
711,011
102,622
0
283.9
2,254.4
71
25.0%
39.3%
10.2%
13.6%
13.4%
13.5%
68.9%
49.1%
38,143
28,339
60.1%
37,572
69.7％
7,194
851
221
489,769
444,718
(Millions of yen)
¥794,201
311,802
193,539
50,697
67,566
96,532
45,987
77,875
(15,041)
62,834
(15,012)
697,701
126,026
156
469,029
(Yen)
215.1
2,193.7
68
31.6%
39.3%
8.5%
12.2%
10.3%
10.1%
67.2%
31.6%
25,692
28,966
58.4%
36,008
68.3%
8,224
593
200
320,812
205,735
52,790
62,287
93,747
47,290
84,207
(67,116)
17,091
(31,550)
683,325
82,910
0
219.0
2,080.0
68
31.1%
38.5%
7.5%
11.2%
9.7%
10.1%
65.1%
62.7%
36,859
31,460
60.3%
37,709
69.3%
7,686
508
202
2. Free cash flow = Net cash provided by operating activities + Net cash used in investing activities
3. Cash dividends per share represent the amounts applicable to the respective year, including dividends to be paid after the end of the fiscal year.
4. Total return ratio = (Total dividends paid + Amount of shares repurchased) / Net income (loss) attributable to OMRON shareholders (does not include repurchases of
less than one trading unit)
5. Patent information is as of March 15 each year.
6. P23.
Long-Term Management Strategy
Grand Design 2010 （GD2010）
FY2001 – FY2003
1st Stage Establish a Profit Structure
Concentrate on cost structure reform and
restructure 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
24
FY2004 – FY2007
FY2008 – FY2010
2nd Stage Balance Growth and
Earnings
Reinforce business foundations through
aggressive investment in growth areas,
including M&A, and cost reduction
Achievements
• Increased earnings per share from ¥110.7
(FY2003) to ¥185.9 (FY2007)
3rd Stage Achieve a Growth
Structure
Fortify growth businesses (high profitability)
Revival Stage (February 2009 to March 2011)
Revised 3rd-stage targets due to an abrupt
change in the business environment, implement-
ed cost reductions, and spun off Automotive
Electronic Components Business and Social
Systems, Solutions and Service Business
OMRON Corporation 11-Year Financial and Non-Financial Highlights
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
(Millions of yen)
Selling, general and administrative expenses (excl. R&D expenses)
Operating Results:
Net sales
Gross profit
R&D expenses
Operating income
EBITDA (Note 1)
Cash Flows:
Net income (loss) attributable to OMRON shareholders
Net cash provided by operating activities
Net cash used in investing activities
Free cash flow (Note 2)
Net cash provided by (used in) financing activities
Net income (loss) attributable to OMRON shareholders (EPS)
Financial Position:
Total assets
Cash and cash equivalents
Total interest-bearing liabilities
Total shareholders’ equity
Per Share Data:
Shareholders’ equity
Cash dividends (Note 3)
Dividend payout ratio
Financial Indicators:
Gross profit margin
Operating income margin
EBITDA margin
Return on invested capital (ROIC)
Return on equity (ROE)
Ratio of shareholders’ equity to total assets
Total return ratio (Note 4)
Capital expenditures
Depreciation and amortization
Ratio of overseas sales
Non-Financial Data
Number of employees
Ratio of overseas employees to total employees
Number of patents held (Note 5)
Environmental contribution (thousand ton-CO2) (Note 6)
CO2 emissions of production sites (thousand ton-CO2) (Note 7)
278,241
164,167
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
20.6%
38.4%
8.6%
13.3%
9.9%
10.3%
60.7%
49.7%
44,447
33,922
47.3%
32,456
64.9％
5,206
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
185.9
1,662.3
42
22.6%
38.4%
8.6%
13.3%
10.4%
11.3%
59.7%
74.7%
37,072
36,343
52.1%
35,426
65.7％
5,717
218,522
164,284
48,899
5,339
38,835
(29,172)
31,408
(40,628)
(9,220)
21,867
538,280
46,631
52,970
298,411
(132.2)
1,355.4
25
ー
34.8%
0.9%
6.2%
(7.6%)
(8.7%)
55.4%
ー
36,844
33,496
49.7%
32,583
63.4％
5,205
FY2008 – FY2010
¥723,866
¥762,985
¥627,190
¥524,694
¥617,825
¥619,461
¥650,461
¥772,966
¥847,252
¥833,604
184,342
133,426
37,842
13,074
40,088
3,518
42,759
(18,584)
24,175
(20,358)
532,254
51,726
36,612
306,327
16.0
1,391.4
17
106.4%
35.1%
2.5%
7.6%
1.0%
1.2%
57.6%
106.7%
19,524
27,014
50.7%
36,299
68.1％
5,218
7. P23.
231,702
142,365
41,300
48,037
71,021
26,782
41,956
(20,210)
21,746
3,333
562,790
74,735
45,519
312,753
121.7
1,421.0
30
24.7%
37.5%
7.8%
11.5%
7.8%
8.7%
55.6%
25.2%
23,192
22,984
51.4%
35,684
67.8％
5,452
193
187
227,887
145,662
42,089
40,136
62,753
16,389
31,946
(26,486)
5,460
(33,492)
537,323
45,257
18,774
320,840
74.5
1,457.5
28
37.6%
36.8%
6.5%
10.1%
4.8%
5.2%
59.7%
37.7%
28,341
22,617
52.2%
35,992
67.7％
5,959
189
193
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
137.2
1,667.0
37
27.0%
37.1%
7.0%
10.4%
8.6%
8.8%
64.0%
27.0%
28,285
22,452
51.1%
35,411
67.4％
6,448
313
203
297,208
181,225
47,928
68,055
93,144
46,185
79,044
(31,125)
47,919
(16,298)
654,704
90,251
488
430,509
209.8
1,956.1
53
25.3%
38.5%
8.8%
12.1%
11.3%
11.6%
65.8%
25.3%
33,653
25,089
55.4%
36,842
69.1％
6,635
661
215
332,607
198,103
47,913
86,591
114,930
62,170
77,057
(39,517)
37,540
(29,303)
711,011
102,622
0
320,812
205,735
52,790
62,287
93,747
47,290
84,207
(67,116)
17,091
(31,550)
683,325
82,910
0
489,769
444,718
283.9
2,254.4
71
25.0%
39.3%
10.2%
13.6%
13.4%
13.5%
68.9%
49.1%
38,143
28,339
60.1%
37,572
69.7％
7,194
851
221
219.0
2,080.0
68
31.1%
38.5%
7.5%
11.2%
9.7%
10.1%
65.1%
62.7%
36,859
31,460
60.3%
37,709
69.3%
7,686
508
202
¥794,201
311,802
193,539
50,697
67,566
96,532
45,987
77,875
(15,041)
62,834
(15,012)
697,701
126,026
156
469,029
(Yen)
215.1
2,193.7
68
31.6%
39.3%
8.5%
12.2%
10.3%
10.1%
67.2%
31.6%
25,692
28,966
58.4%
36,008
68.3%
8,224
593
200
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 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 have been restated to account for businesses discontinued in FY2007.
Value Generation 2020 （VG2020）
FY2011 – FY2013
GLOBE STAGE
Establishment of profit and growth structures
on a global basis
Net sales
Operating income
Gross profit margin
Operating income margin
ROE
*1 Announced July 2011
Initial Target*1 FY2013 Result
¥773.0 billion
¥68.1 billion
38.5%
8.8%
11.6%
¥750.0 billion
¥100.0 billion
42.0%
13.3%
over 15%
FY2014 – FY2016
FY2017 – FY2020
EARTH-1 STAGE
Establish self-driven growth structure
Net sales
Gross profit margin
Operating margin
ROIC
ROE
EPS
Initial Target*2
over ¥900 billion
over 40%
over 10%
approx. 13%
approx. 13%
approx. ¥290
FY2016 Plan
¥820 billion
39.3%
7.7%
10%
10%
¥222.2
*2 Announced April 2014
VG2.0
Achieve self-driven growth by creating
innovation originated by technological
evolution
FY2020
Targets*3
● Net sales
¥1trillion
● Gross profit margin over 41%
● Operating income
● ROIC
● ROE
● EPS
¥100 billion
over 10%
over 10%
over ¥300
*3 Announced April 2017
25
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy
Sensing & Control + THINK
Evolving Core Technologies
Sensing & Control + THINK are core technologies that run through the heart of
our organization. Taking the lead in each era, OMRON has developed unique core
technologies that create value.
Sensing collects status and other information about people and manufacturing based
on observation of the production floor.
Control provides appropriate solutions to the production floor based on the
information obtained through Sensing.
In 2011, OMRON added a new category, + THINK. This idea expresses the need for
human intelligence in Sensing & Control. We believe that the more Artificial Intelligence
(AI), the Internet of Things (IoT), and other technical innovations evolve, the more these
technologies need to become truly intelligent to be valuable.
OMRON will continue to strengthen and evolve our core technologies to maximize the
value of our contributions to society.
■ What Are Sensing & Control + THINK?
Sensing Technology
(Sensing)
Technology to Incorporate Human
Intelligence into Machines
(+ THINK)
Control Technology
(Control)
Electricity
Sound
waves
Radio-
waves
Images
Power
Light
Magne-
tism
Location
Advice
Infor-
mation
Power
Direction
26
OMRON Corporation Embodiment of Sensing & Control + THINK
Table Tennis Coaching Robot, FORPHEUS
The FORPHEUS System
Sensing
Sees the speed and
trajectory of the ball
+ THINK
Assesses the characteristics of
the ball hit by the opponent
Predicts the speed and location
from where the opponent can
most easily return the ball
Control
Controls the position
to return the ball
True interaction between human and machine
27
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy STARTING VG2.0
A value-generator for people and the Earth that is
qualitatively and quantitatively superior
28
OMRON Corporation STARTING VG2.0
MOBILITY
FACTORY AUTOMATION
ENERGY MANAGEMENT
HEALTHCARE
29
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Special Feature: 1
Driving Manufacturing Innovation
through Technology and innovative-Automation
Yutaka Miyanaga
Executive Vice President
Company President,
Industrial Automation Company
Kiichiro Miyata
Director
CTO and Senior General Manager,
Technology & Intellectual Property HQ
30
OMRON Corporation Driving Manufacturing Innovation
through Technology and innovative-Automation
The Future of Manufacturing in the Years 2020,
2030, and Far Beyond.
Social Needs and OMRON Ambitions in the
Factory Automation Market
Igaki
We are seeing an increasing number of
Miyata
To produce new value in the factory
challenging issues in the factory automation
market, including soaring labor costs and labor
shortages. Given these issues, how do you see
the factory automation market changing as we
head toward the years 2020, 2030, and beyond?
What moves will OMRON make to deal with
these changes?
Automation on the production floor will
Miyanaga
accelerate among emerging economies where
labor costs are beginning to rise. At the same
time, the developed countries are struggling with
aging-related labor shortages. As it is getting more
difficult to pass down the craftsmanship of skilled
workers, we have to find some way to replace
this with machinery and equipment. Even more,
we are inundated with new innovations in
technology, which include Artificial Intelligence
(AI), the Internet of Things (IoT), and robotics.
Factory automation companies around the world
are scrambling to make use of these
technologies. In fact, the factory automation
market is going through such a dramatic period of
growth that we could well call the start of the
second age.
automation market, we must make full use of
new technologies such as AI and IoT to make
machinery smarter. What is required is a fresh
approach. In 2011, OMRON added the idea of
+ THINK to evolve our core technology concept of
Sensing & Control. Why + THINK? Because we
believe we can create new value by moving
beyond simple programmed actions for machines.
We are moving to a stage where we will add
human intelligence to machine behavior. The
+ THINK concept is what will help us bring
amazing innovations in factory automation to the
production floor. We have been showing our
FORPHEUS table tennis coaching robot to people
throughout the world. This is a tangible example
of Sensing & Control + THINK. By incorporating AI
technologies, we have made the robot smarter to
help the human player become better at table
tennis. This is a true representation of the
evolution of OMRON technologies. Our dream is
to link these core technologies to growth in our
business as we solve social issues.
Interviewer
Tsutomu Igaki
Executive Officer
Senior General Manager,
Global Investor Relations &
Corporate Communications HQ
31
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy OMRON is an Innovative Manufacturing Technology
Partner, Offering our Customers the Greatest Lineup of
Products and Application Software in the Industry for
Their Needs
precision machine control is critical for advanced
manufacturing. We believe that there are certain
things that only OMRON can do as a
comprehensive factory automation equipment
manufacturer. We serve many customers as an
innovative and highly respected manufacturing
partner.
Igaki
As the factory automation market
grows, competition is becoming more intense.
How do you assess the unique OMRON initiatives
and strengths?
One of our strengths in factory
Miyanaga
automation is our incredible lineup of automation
products. We offer customers a full-automation
solution from one source. Over the past few
years, we have added to our lineup of products
through acquisitions, raising our ability to provide
total solutions to solve the business issues of our
customers. Beyond sensors, controllers, servo
motors, and a wide range of other products, we
also offer innovative application software to
control robotics and other components tailored to
customer needs. This is just one of the areas in
which OMRON excels over rivals in the industry.
The seamless integration of the largest product
lineup in the industry, along with high-speed, high-
■ Largest Product Lineup in the Industry
32
OMRON Corporation edge technology to a tangible form and delivering
maximum performance is no easy task. Our
depth of experience in embedding software into
small packages has resulted in proprietary
expertise allowing us to take advantage of this
technology.
Of course, software development
Miyanaga
alone cannot maximize production equipment
capacity for our customers. We continue to work
on integrating hardware and software, pursuing
the type of value that only we can provide.
Igaki
Nothing makes a factory automation
equipment maker happier as when their products
and services help customers increase their
productivity. What about the technology aspects?
Miyata
Obviously, application software is a
tremendous strength of ours. We have so many
unique solutions to offer, built on our accumulation
of expertise and data from the production floor.
We will be happy to hear from many more
customers telling us they want to use our
hardware to take advantage of our application
software. Another OMRON strength is our
componentization technology, which we
incorporate into our final products to answer
customer needs. One might think hardware or
software when they hear about technological
evolution. Componentization technology,
however, is extremely challenging to accomplish,
and serves as a key differentiation factor. For
example, a number of companies have designed
algorithms that use AI. Very few, however, have
successfully incorporated AI into their products.
In 2018, we plan to sell a first-of-its-kind
controller that incorporates AI. While it might
appear to be a simple matter, shaping a leading-
A New Concept Bringing Innovation to
Manufacturing: innovative-Automation
Igaki
Our Industrial Automation Business
manufacturing for the future.
(IAB) has announced the strategic concept of
innovative-Automation. This strategy introduces
technological innovation to the production floor for
innovative manufacturing. Can you tell us more
about specific innovative-Automation initiatives?
innovative-Automation is a concept that
Miyanaga
lies at the intersection between market needs and
the unique OMRON value proposition. This
concept represents our deep commitment to
bringing innovation to manufacturing. innovative-
Automation incorporates three “i”s to produce
The first “i” stands for Integrated. We just
discussed the interaction between our deep
product lineup and our control application software.
This interaction makes it easy to realize of
innovative manufacturing, including ultra-high-
speed control and ultra-high-precision processing.
The second “i” stands for Intelligent. The integration
of control and information improves productivity
and quality dramatically. The AI-equipped controller
accumulates vast amounts of data from the
production floor through IoT-compatible sensors.
Based on this data, the AI infers the status of the
33
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy equipment, predicting product defects and
equipment breakdowns.
Our aim for the future is to create production
lines with no unplanned stoppages and
equipment that produces defect-free products.
The third “i” stands for Interactive, which is the
harmony between human and machine. As labor
shortages become worse, the need for robotics
on the production floor becomes greater.
At OMRON, we are solving these needs by
developing robots that work in harmony with
humans. In the future, humans, machines, and
robots will be aware of each other, resulting in a
completely new type of manufacturing in which
all elements on the production floor work in
concert.
Miyata
The OMRON Technology &
Intellectual Property Headquarters is busy
developing algorithms to speed underlying
technologies for innovative-Automation.
Developers cannot create good algorithms
without understanding how they will be used at
the customer site or how they should be
modified. innovative-Automation begins with the
needs of the customer. Useful algorithms cannot
be developed without expertise in manufacturing
and technology, nor can they be developed
without the ability to uncover customer needs.
■ innovative-Automation incorporates
three “i”s
Concept
innovative-Automation
Innovations in manufacturing
Evolution in control
integrated
Direction of
Evolution
Intelligence
developed
through ICT
intelligent
New harmonization
between humans
and machines
interactive
Working with Partners to Create New Value
Igaki
Working with partners is one key for
OMRON to evolve in the factory automation
market. Is the IAB engaged in any specific
projects at present?
Miyanaga
We believe in the importance of
working cooperatively with our customers.
We must do even more to integrate with our
customers on their production floors to
understand their underlying business issues and
create products and services accordingly.
For example, we worked with our customers to
develop a product known as the industry’s most
environment-resistant series of oil-resistant
components. We had many customers who were
struggling with malfunctioning sensors and
switches, damaged by cutting oil used during the
automobile component manufacturing process.
These malfunctions raised the risk of unexpected
production equipment stoppages. Recent
developments in cutting oil have made
processing more efficient. As cutting oil becomes
more popular, the impact on surrounding control
equipment has become more severe. In
response, we conducted experiments on
customers' production floors, which led to the
development of products with outstanding oil-
resistance. Such steady efforts not only allow us
to understand production floor issues, but they
also have the important effect of strengthening
34
34
OMRON Corporation
OMRON Corporation our customer relationships. We are also
contributing to solving production equipment
issues through total solutions. For example, one
Intelligent initiative within innovative-Automation
is to work with our customers to validate data
useful for productivity improvements. We plan to
create new systems with our customers, learning
equipment-related issues and determining the
type of data needed to solve these issues. Our
broad lineup of products allows us to collect data
from every process related to production
equipment. Using this data to propose all-
encompassing improvements to our customers is
another tremendous strength of our company. At
present, we are engaged in a number of projects
with customers, aiming to generate greater
productivity improvements. As a comprehensive
manufacturer of factory automation equipment
familiar with production floor issues, OMRON is
working to add value and functionality to every
product we make. Even more, we will continue
to leverage our total solutions to offer innovations
in manufacturing that originate with our
customers’ needs.
Igaki
Mr. Miyanaga has discussed working
together with partners on the factory automation
production floor. What about ongoing initiatives at
the Technology & Intellectual Property
Headquarters?
Miyata
By working together with partners,
we not only create solutions together, but we
also have an opportunity to expand our own
perception to build new concepts.
The Technology & Intellectual Property
Headquarters coordinates with a wide range of
universities, research labs, and other groups to
advance open innovation across a variety of
fields. The RIKEN BSI-OMRON Collaboration
Center established on June 1, 2017 is one
example. This is a joint project with RIKEN, Japan
located within the RIKEN Brain Science Institute.
The center investigates the relationships among
brain activity, the human body, and human
psychology, aiming to create next-generation
technologies through the integration of
neuroscience and AI. We expect our engagement
in this new field of neuroscience will lead to
solutions for social issues through our factory
automation business, as well as a wide range of
businesses throughout our company. OMRON
will continue to create new value, accelerating
open innovation initiatives, incorporating
knowledge from all sources, and encouraging the
use of OMRON technologies in a wide range of
applications outside our company.
Igaki
You two assured that OMRON will be
moving even faster toward medium- and long-
term growth. Thank you.
Integrated Report 2017
35
35
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Factory Automation
The Factory Automation (FA) domain covers manufacturing of the automobiles and home appliances that
enrich people’s lives over the world. The Industrial Automation Business (IAB) is the main segment that
drives business in this domain.
OMRON provides innovation in manufacturing by putting together a unique and extensive product line to
provide breakthrough solutions beyond the capabilities of our competitors. Moving forward, our focus
will be on four areas that promise particularly high levels of growth: automobiles, digital, food and
beverages, and social infrastructure. We will accelerate our strategic concept of innovative-Automation
to implement rapid growth.
Social Issues
Labor shortages and diversification in manufacturing
The world of manufacturing is entering a period of
transition in terms of technical innovation, serious
labor shortages, and other challenges.
The world is facing major societal issues: The
advanced countries are already dealing with
shortages of skilled workers due to advanced aging.
In fact, the Japanese labor force is expected to
shrink by more than 30 million workers over the
next 40 years. At the same time, the emerging
economies are dealing with soaring wage
increases. Given these changes, initiatives are
under way to disperse manufacturing locations,
alter production methods, and increase the
sophistication of manufacturing technologies.
OMRON is deeply engaged in addressing these
societal challenges by providing automation to
introduce the new future of manufacturing.
Shortages of Skilled
Workers
2017
Labor Force Trends (Japan)
2060
Labor force: 40% decrease （2017⇒2060）
(Source) National Institute of Population and Social Security Research
"Population Projections for Japan (January 2012)"
Results based on medium-fertility and medium-mortality projection
Sharp Rise in Labor
Costs
2008 Minimum Wage Trends (Shanghai, China)
2017
Labor Cost Increase: 2.4 times（2008⇒2017）
(Source) Publications of the Shanghai Municipal Resources and Social
Security Bureau
Value Provided
Contributing to economic development through social productivity improvements
OMRON introduces innovation in manufacturing
that contribute to the improvement of customer
productivity. By extension, this leads to productivity
improvements in society. To achieve these goals,
OMRON is deeply committed to leading-edge
technologies in AI, IoT, and robotics.
We are currently developing an industry-first
AI-equipped controller. This controller can learn
on its own based on accumulated field data,
predicting product defects and facility
malfunctions. Sensors monitor the operational
status of each piece of equipment on production
lines continuously. The AI-equipped controller
analyzes this information to prevent unexpected
36
OMRON Corporation problems before they arise. We have already
conducted a series of tests to validate this
technology, both at our customers' factories and
our own facilities. Our plans call for
commercializing the technology and providing
support services starting in 2018. We are also
moving forward with the critical work of making
our lineup of nearly 100,000 products IoT-capable.
As the front runner in the factory automation
industry, we will continue contributing to the
enrichment of people’s lives around the world by
providing the kind of unique value that is beyond
the reach of our competitors.
Goals for Fiscal 2020
Net sales for main business in domain:
Industrial Automation Business (IAB) ¥480 billion
Sustainability Goal:
New innovative-Automation products across four focus industries
~“Control” technology for manufacturing innovation~
Relevant Sustainable Development Goal
Industry, innovation and infrastructure
■ Fiscal 2016 Sales by Product
Parallel robots
Servo motors
and drivers
Inverters
53%
Logic
Programmable
controllers
Safety controllers
Motion controllers
Output + Robot10%
Industrial Automation
Business (IAB)
37%
Input
Fiber sensors
Vision
sensors
Safety light
curtains
37
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Automation Centers
Automation Centers are technology development
facilities evaluation and verification equipment and
devices. Centers also contain training rooms for
skills development. OMRON currently has eight of
these facilities worldwide. Our Automation Centers
are sources of leading-edge technologies for solving
advanced manufacturing issues. We share
information about the latest technologies,
expertise, and standards among Automation
■ Locations of Automation Centers
Centers, allowing OMRON to provide the most
advanced solutions to our customers. In
practice, OMRON sales departments and
engineers work closely to provide solutions to
global customers.
(Japanese base in Kusatsu, Shiga Prefecture)
Spain
South Korea
China
Japan
India
Thailand
Indonesia
USA
Case Study: Manufacturing Innovation in China
achieved “the impossible,” introducing a five-fold
gain in productivity.
We see more and more examples of this kind
of success in China and throughout the world. In
real ways, OMRON is driving business growth.
OMRON worked with China’s leading food
packaging equipment manufacturer, introducing the
latest in leading-edge technologies. We delivered
industry-leading productivity advancements
successfully under a very short deadline.
Working with our customer, we identified 25
technical issues. The most daunting challenge was
how to cut packaging film in a fixed position. In
theory, the equipment was running correctly, but
not as precise as the client expected. After
considerable trial and error, we were able to
quantify characteristic behavior in the equipment.
Using this information, we modified the controller
programming to meet the needs of the client. By
working closely with people on-site, we resolved
each and every issue. In only six months, we
38
OMRON Corporation Factory Automation
Hannover Messe
Hannover Messe International (HMI) 2017 attracted 225,000 visitors in April this year. This is the
global flagship event for Industry 4.0 and one of the largest fairs worldwide for industrial
automation. Today, HMI is in the spotlight for attracting decision makers from the industrial
automation world. Over 6,000 exhibitors provided insights into the benefits of Industry 4.0 and the
role of humans in the integrated factory of the future. The OMRON booth featuring our AI and
robotics technologies was very popular. Many event-goers had the opportunity to experience the
manufacturing of the future that we aim to create.
Message from the Project Leader
HMI 2017 provided a unique opportunity to showcase to the
market and to media our capability to realize Industry 4.0 by
means of innovative-Automation. We demonstrated an
evolution in integrated control （integrated）, showing a single
controller used to execute simple control over complex
operations. Under the heading intelligence developed through
ICT（intelligent）, we demonstrated how rapidly collected plant
data is used for preventive maintenance to anticipate
equipment breakdowns and malfunctions. We also proved our
capabilities related to new harmonization between humans
and machines （interactive). Here, we demonstrated fixed and
mobile robotic solutions featuring OKAO™ Vision technology
combined with industrial monitors. FORPHEUS, our robotic
table tennis coaching robot, impressed visitors with a concrete
example of our core proposition: Merging Sensing & Control
technologies with the thinking power of AI.
During the event international staff at the booth helped us to
provide information to (potential) customers and journalists
from several countries, underlining our capability to operate
seamlessly across borders. I believe that through
conversations with visitors–many of whom are potential
customers–we were able to demonstrate the strength of the
global OMRON support system. Our staff were proud to show
manufacturers and machine makers how innovative-
Automation is a reality today, capable of innovating the future
of manufacturing through the most advanced automation
solutions on the market.
Matteo Recalcati
Marketing Communication
Manager
OMRON Europe B.V.
39
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Healthcare
The Healthcare domain is in the market for home-use and hospital-use medical devices essential for
leading healthy and active lives. The Healthcare Business (HCB) is the main business in this domain.
We have been building a worldwide culture for measuring blood pressure at home by promoting home-
use digital blood pressure monitors.
OMRON has encouraged the use of nebulizers to treat asthma patients, and our low-frequency therapy
equipment help people ease their neck and back pain. These three main product categories will continue
to drive growth in our Healthcare Business in the future.
Social Issues
Increasing frequency of brain and cardiovascular diseases caused by hypertension
Worldwide increase in respiratory disease
Healthcare costs are rising sharply around the
world due to aging populations among
developed countries and the increasing lifestyle
diseases among emerging economies.
Nearly 1 billion people around the world have
hypertension*1. Each year, the number of
patients with brain and cardiovascular diseases
due to hypertension increases. While a patient
suffering from serious medical events such as
stroke or heart attack may be saved, their quality
of life may be impacted adversely, becoming
bedridden or having impaired speech. These
outcomes affect not just the patient; they can
be significant burdens to their families who
must care for them. In emerging economies,
air pollution and disruptions in traditional
lifestyles have become serious challenges.
These countries are seeing increases in the
numbers of asthma sufferers. Today, nearly
400 million people have some type of
Value Provided
respiratory disease worldwide*2.
Through innovative products and services,
OMRON helps preserve the quality of life for
patients and families impacted by these diseases,
while we work to extend healthy life expectancies.
Cardiovascular Diseases
Worldwide costs for
treating cardiovascular
diseases
¥120 trillion*3
Respiratory Diseases
Costs for treating
respiratory diseases
in Japan/US/ EU
¥19 trillion*4
*1 Source: World Health Organization
*2 Source: International Respiratory Society
*3 Estimates based on World Bank and OECD data
*4 Estimates based on Ministry of Health and Labor public data, European
Respiratory Society data, and Creative Biotech Inc.
Contributing to healthy and active lives for individuals worldwide
OMRON contributes to the healthy lives of
people worldwide by predicting risk and
preventing disease. More specifically, we are
working as quickly as possible to reduce the
incidence of brain and cardiovascular diseases
and asthma to Zero Events (complete
elimination).
The aim of Zero Events is to improve the
diagnosis, treatment, and support of disease
prevention through the collection and analysis of
40
OMRON Corporation blood pressure and other vital data.
While we promote the use of nebulizers to
eliminate severe asthma, we are also working
on new technologies to anticipate asthma
attacks for early detection and treatment.
We will keep striving toward a future of
sustainable good health for the people of the
world.
Goals for Fiscal 2020
Net sales for main business in domain:
Healthcare Business (HCB) ¥150 billion
Sustainability Goals:
Blood pressure
monitor sales
25
million
units / year
Nebulizer + Asthma
wheeze monitor sales
7.65
million
units / year
Relevant Sustainable Development Goal
Good Health and Well-being
■ Fiscal 2016 Sales by Product
3%
Patient monitors
4%
Body composition
monitors
6%
Low-frequency therapy
equipment
Other (activity monitors, etc.)
17%
Healthcare Business
(HCB)
51%
Blood pressure
monitors
7%
Thermometers
12%
Nebulizers
41
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy
Toward Zero Victims of Brain and Cardiovascular Diseases
OMRON is developing wearable blood pressure
monitors that can be worn at all times like a
wristwatch. By increasing the frequency to
monitor blood pressure, users can assess the
nature and degree of blood pressure fluctuation
in ways not possible when readings are taken
only in the morning and evening. Users can track
vital data (including activity and sleep tracking) in
addition to blood pressure readings taken in the
home and at work. The goal here is to provide
services to physicians to support the diagnosis,
prevention, and treatment of disease by analyzing
this data using AI technologies.
Wearable blood pressure monitor
Diagnosis and treatment
support services
Blood Pressure
Activity
Sleep
† Artist’s conception
Personalized
diagnosis and
treatment
Visualization of
body condition
and activities
Data accumulation and analysis
Data analysis
using AI
Personalization
In March 2017, OMRON announced a capital and
business partnership with AliveCor Inc. of the
U.S. to provide services supporting the diagnosis
and treatment of atrial fibrillation*1. AliveCor has
service platforms supporting the diagnosis and
treatment of atrial fibrillation using mobile,
wearable, and remote electrocardiograph (ECG)
monitoring devices. This technology is expected
to provide more precision in assessing risks of
brain and cardiovascular diseases by integrating
and analyzing blood pressure and related ECG
data. We will work together with AliveCor to
develop devices and service platforms that
combine our respective strengths.
42
*1 Atrial fibrillation (AF): Condition in which extraneous electrical signals other
than those needed to stimulate the normal contraction of the heart are
transmitted, disturbing the normal functioning of the atrium of the heart.
PatientPhysician OMRON Corporation Healthcare
Achieving Zero Incidents of Severe Asthma
The number of people suffering from asthma
around the world continues to rise. At the same
time, many people are unaware of nebulizer
therapy, especially among the emerging
economies. OMRON is working with medical
institutions and drug companies to increase the
number of hospitals equipped with nebulizer
treatment rooms and pharmacies that carry these
devices. We are contributing to early treatment
and the prevention of severe asthma by making
more patients aware of treating asthma correctly
through treatment devices.
Asthma Wheeze Monitors
Research suggests that 80% of asthma patients
suffer their first attack before the age of five.
However, families are not readily equipped to
assess their child’s symptoms. Delays prevent
the child from receiving proper treatment in the
early stages, resulting in a more severe case of
asthma. Severe asthma can be prevented by
providing patients with medication before they
suffer a major attack.
OMRON is now developing monitors that can
measure, record, and manage the type of
wheezing that signals an impending asthmatic
attack. Through collaborative research with
medical institutions, we are building algorithms
into our devices that can tell the difference
between different types of wheezing. These
monitors will allow families to prevent asthmatic
attacks at home. At the same time, asthma
patients will have better access to appropriate
treatment as doctors will be able to diagnose
symptoms more accurately.
Through greater use of nebulizers and asthma
wheeze monitors, OMRON aspires to prevent
severe juvenile asthma, reaching the ultimate
goal of eliminating severe asthma altogether.
Asthma Wheeze Monitor (Prototype)
43
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Mobility
The goal of the Mobility domain is to achieve urban transportation (cars, trains, etc.) that is safe, stress-
free, and comfortable. The businesses in this domain are the Automotive Electronic Components
Business (AEC) and the Social Systems, Solutions, and Service Business (SSB).
We pursue safety, convenience, and free traffic flow for automobiles and road traffic/social infrastructure
systems through our automobile components, traffic and road management systems, and railway station
management systems. OMRON will strive to provide the world with products and systems for a mobility
society in which people around the world can live in a safe, secure, comfortable, and clean environment.
Social Issues
Increase in accidents involving senior citizens among advanced countries;
more accidents, congestion, and environmental burden in emerging
economies
Cars have made our lives more convenient. At
the same time, however, we seem to find more
and greater issues in mobility society every year.
For example, advanced countries are
experiencing an increase in the number of
accidents caused by senior drivers (mistaking
the accelerator for the brake; wrong-way driving
on freeways, etc.) And it’s not just senior
drivers; as many as 80% of automobile
accidents are caused by human error. Clearly,
something must be done. As emerging
economies rapidly become motorized, accidents
and congestion multiply. Automobile emissions
place a heavier burden on the environment.
To solve these problems, auto makers and
others are working on automated driving and
eco cars. These companies are engaged in
improving road traffic and social infrastructure to
realize the goal of a safer, more eco-friendly
Value Provided
Safe and secure urban development
society. At OMRON, we are solving these
problems through technology and innovations
based on our years of experience in developing
automotive components and traffic and road
management systems.
■ Number of Accidents Involving
Senior Citizen Drivers
400
(Indexing 1993 at 100)
2013
300
200
100
0
1993
322%
Increase Over 20 Years (Japan)
1995
2000
2005
2010 （year）
(Source) National Police Agency (Police White Paper)
To solve the problems of mobility society, we
must deal with cars, people, and traffic.
In 2016, we developed the world’s first on-
board sensor featuring driver sensing
technology, which senses a driver’s condition in
real time. This technology prevents accidents
caused by drivers who are not in a condition to
continue driving. Developments here promise to
assist safe driving, eventually leading to
automated driving.
44
OMRON Corporation One of our strengths is in technologies and
products that provide optimal control of the flow
of cars, traffic, and people. For example, our
traffic and road management systems
incorporate traffic sensing and automotive
sensors that sense people and cars. This
sensing and control coordinates traffic and
roads, resulting in a safer, more comfortable
mobility society. We can help alleviate traffic
congestion by sensing car behavior and
optimizing road and traffic control according to
the conditions detected.
OMRON is also deeply engaged in developing
automotive electronic products to reducing CO2
emissions and environmental load. These
products help us fulfill our goal of creating a
sustainable, eco-friendly society.
We aim to assist in the advancement of
mobility society and preserve the global
environment at the same time through our
products and services.
Goals for Fiscal 2020
Net sales for main businesses in domain:
Automotive Electronic
Components Business (AEC)
¥150 billion
Social Systems, Solutions
and Service Business (SSB)
¥80 billion
Sustainability Goals:
● Creation of driving safety support systems/technologies (SSB)
● Creation of 360-degree around-the-vehicle recognition technology for advanced driver
assistance/automated driving (AEC)
● Number of vehicles equipped with eco-friendly products: 10 million (AEC)
Relevant Sustainable Development Goals
Sustainable Cities
and Communities
Affordable and Clean
Energy
Good Health and
Well-Being
■ Fiscal 2016 Sales by Product
Automated Ticket
Gates
47%
Other (Passive Entry /
Push-Button Engine Start
Systems, Keyless Entry
Systems, etc.)
Automotive
Electronic Components
Business (AEC)
Power Window
Switches
24%
Switches (Power Window
Switches, Power Seat
Switches, etc.)
Other (Software
Development, etc.)
12%
54%
Engineering,
Environmental
Solutions
Social Systems,
Solutions and Service
Business (SSB)
Electronic Power
Steering Controllers
29%
Motor Controllers
(Electronic Power Steering Controllers,
Power Sliding Door Controllers, etc.)
Ticket Vending
Machines
29%
Public Transportation
(Automated Ticket Gates,
Ticket Vending Machines)
5%
Road Traffic (Road
Traffic Management
Systems, etc.)
45
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Energy Management
The Energy Management domain addresses a market that aims to create a world in which people can live
comfortably through increased use of renewable energy in response to climate change caused by rising
levels of CO2 emissions. The business segment in this domain is Environmental Solutions Business
under the Other Businesses.
At OMRON, we contribute to a cleaner global environment by providing PV inverters for solar energy
systems that create renewable energy. We also provide electricity storage systems that make effective
use of energy.
Social Issues
Acceleration of global warming due to increasing CO2 levels
Global warming is a global environmental issue
caused by increasing emissions of greenhouse
gases such as CO2. Scientists predict an increase in
unusual weather patterns and a rise in sea level as
our atmosphere heats up. These changes will bring
environmental destruction and economic losses on
a global scale. While ever-increasing industrial
activity may enrich people’s lives, it is also
damaging the global environment.
In response to these issues, Japan submitted a
draft resolution to the United Nations in 2015. This
resolution targets a 26% reduction in greenhouse
gases by 2030 compared to 2013 levels. The
Japanese government announced the need for a
40% reduction in residential and business
emissions to reach this goal. Worldwide, policies
have been proposed to reduce greenhouse gas
emissions in accordance with COP21*1.
In response to these initiatives, OMRON will
Value Provided
Maximizing energy efficiency
contribute to the growing market of renewable
energy, reducing greenhouse gases by providing
PV inverters and storage systems for solar power
systems.
*1 COP21 (2015 United Nations Climate Change Conference): Conference
held in Paris in 2015 to discuss measures to deal with global warming in
2020 and beyond. The proposed new framework was intended to
supersede the Kyoto Protocol.
■ Outlook for Equipment Capacity
Based on Worldwide Renewable Energy
Equipment Capacity（GW）
3,000
Sunlight Solar heat Wind
2,500
2,000
1,500
1,000
500
0
Biomass Geothermal
Ocean energy
2012
2020
2025
2030
2035
2040
（year）
(Source) International Energy Agency
OMRON offers a wide range of products and
services that maximize energy efficiency. Our
concept is to generate energy without waste, to
store energy effectively, and to use energy wisely.
PV inverters convert direct current electricity
generated by solar panels into the alternating
current used in homes and other applications.
OMRON PV inverters are used at homes and in
industries across Japan. We have held the leading
share in the home-use market for the past five
consecutive years.
In 2015, we introduced our hybrid storage
system for solar power. With this system, a
single PV inverter can handle both solar panels
46
OMRON Corporation and storage batteries. This system makes
efficient use of energy generated from sunlight
and supports what is expected to be a rapidly
growing demand for captive consumption of
solar power.
OMRON will continue to maximize energy
efficiency and contribute to a sustainable society
by expanding our lineup of solar PV inverters and
storage systems.
Goal for Fiscal 2020
Sustainability Goal:
PV / storage system cumulative shipped capacity 11.2 GW
Relevant Sustainable Development Goal
Affordable and Clean Energy
■ Main Products
Energy Generation Products:
Energy Storage Products:
PV Inverter
(single-phase type）
PV Inverter
(three-phase type)
Flexible Storage System
企
業
価
値
の
向
上
47
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Factory Tour
OMRON Kyoto Taiyo Co., Ltd.
〜 Manufacturing plant at the forefront of diversity 〜
OMRON Kyoto Taiyo Co., Ltd. makes nearly 1,500 items, including sockets, timers, photoelectric sensors,
and other control devices and related components. A joint venture between OMRON and the social welfare
service corporation Japan Sun Industries*, this factory has a 30-year history of welcoming individuals with
disabilities to work alongside the able-bodied.
* Founded in 1965 by orthopedic surgeon Yutaka Nakamura, Japan Sun Industries is a social welfare service corporation that uses science and technology to help individuals with
disabilities to manage their lives independently. OMRON currently has eight joint venture manufacturing companies that employ more than 700 individuals with disabilities.
OMRON Kyoto Taiyo Co., Ltd.
■ Overview
Established
April 1986
Shareholders
OMRON 61%;
Japan Sun Industries 39%
Workforce composition*
（As of May 2017）
184 employees, including 147
individuals with disabilities
* Includes vocational trainees living at Japan Sun Industries
■ Main Products
Socket
Timer
Photoelectric
sensor
Electric power
supply
■ Virtual Factory Tour
http://www.kyoto-taiyo.omron.co.jp/360vr/
(Japanese only)
Automation Tailored to Individual Needs
Differences in the physical abilities and skills of
each worker, as well as the particular demands
of each job, call for a variety of innovations. For
example, workers who have the use of only one
hand work on the socket production line.
Normally, workers produce one product at a
time. On this line, however, the production
process is broken down into several steps. For
example, a worker who has the use of only their
right hand does that part of the job requiring a
right hand and vice-verse. This way, individuals
with disabilities can work on a production line
without any loss of productivity. The factory also
uses jigs, tools, assistive devices, and semi-
automated machines according to the
characteristics of each worker’s disability. All
workshops within the factory have been tailor-
made by technicians who themselves have
disabilities. Over the past 30 years, nearly 380
jigs and tools have been developed. The
expertise gained from developing these devices
has been systemized at the Keihanna Technology
Innovation Center. Such knowledge is used to
develop new technologies and designs that
create harmony between humans and machines.
Socket production line; employees with right-hand mobility team up with
employees with left-hand mobility
Developer modifying a standard automatic sealer for use by an employee with
disabled hands
48
OMRON Corporation Unique Approaches to Skills Development and
Production Capacity Enhancement
In addition to developing assistive tools using
jigs and fixtures, OMRON Kyoto Taiyo improves
production capacity by developing individuals’
skills in a unique way to work more efficiently.
Their skills development initiatives start by
measuring each worker’s knowledge and
abilities based on skills, accuracy, and work
speed. This data is used to produce a human
resources map. Next, managers sort out the
abilities necessary for each production step,
resulting in a work map. Managers factor in the
degree of each worker’s disability and skill to
match personnel to suitable tasks. Where it is
simply impossible to compensate for the disability
of a worker, the factory brings in tools to
eliminate the need for skills in the production
step. These initiatives expand to the employment
potential of individuals with severe disabilities,
while still making gains in productivity.
■ Work Map
■ Elimination of the Skills Needed
● Improved level of ability ● Necessary ability
F
a
s
t
W
o
r
k
s
p
e
e
d
l
S
o
w
B
C
Gap
A
B
●
●
●
●
●
Tools help lower the necessary
level of ability from B to C.
B
C
●
●
A
B
●
●
●
F
a
s
t
W
o
r
k
s
p
e
e
d
l
S
o
w
Low
Accuracy
High
Low
Accuracy
High
Identifying the level of individual's ability on the human
resources map can disclose the gap between the ability with the
skills needed for production line shown on the work map.
Using jigs and fixtures can overcome a lack of ability that a
worker cannot compensate for through skills development.
A Barrier-Free Workplace for All Workers
OMRON Kyoto Taiyo has introduced innovations
that allow any worker to perform the 3S
essential basics in the factory: Sort, Set in Order,
and Shine. For instance, sloped shelves make it
impossible for workers to leave unnecessary
objects on the shelf carelessly. A simple twist to
the spines of files make it possible for anyone to
organize them easily. The factory also has a firm
rule that the name of the worker and the time of
return for any borrowed piece of equipment be
written on a whiteboard. In this way, the
borrower and availability of the equipment are
identified. Every year, workers are divided into
teams to compete for the best improvement
initiatives (kaizen). Best practices are shared
through a factory newsletter and an annual
presentation. Factory managers realize that each
disability has its own unique nature. Managers
strive to make the best use of an individual’s
abilities, while providing support and developing
original, creative solutions. The OMRON Kyoto
Taiyo factory is truly a model of making the best
use of diversity.
Sloped shelf ensures files stored inside
Spines of titles make one picture if set in order
49
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy
ROIC Management
OMRON has selected ROIC as a key performance indicator for our business. We stress ROIC management
throughout our organization to encourage further improvement. Our new VG2.0 medium-term management
plan emphasizes ROIC management, which we will use to reach a new level of growth.
Why ROIC?
OMRON encompasses a number of business
divisions with varied characteristics. We believe
ROIC is an excellent measure for assessing
business performance fairly for each business.
Using operating income or operating income margin
as an indicator doesn’t account for variances due to
the nature or scope of a business. ROIC, on the
other hand, measures return on invested capital,
providing a fair assessment. Under VG2.0, we have
defined four focus domains. ROIC is an
indispensable tool as we continue to grow our
unique business portfolio.
Down-Top ROIC Tree
Down-Top ROIC Tree breaks ROIC into key
performance indicators for each department,
allowing us to improve ROIC at the most basic
operating level. Using simple ROS or invested
capital turnover as ROIC indicators are ineffective,
since they do not relate directly to front-line
operations. On-site managers would have trouble
thinking of ways to improve ROIC using these
indicators. However, we can break ROIC down into
automation / head count reduction or facilities
turnover as KPIs of manufacturing departments.
With these indicators, managers can finally see how
their goals tie directly to ROIC improvement
initiatives. At OMRON, one of our greatest
strengths is our unified approach to improving ROIC
from the ground level up.
50
More specifically, ROIC management consists
of Down-Top ROIC Tree and Portfolio
Management.
ROIC
Management
Down-Top
ROIC Tree
Portfolio
Management
■ Down-Top ROIC Tree
KPI
Drivers
Sales in Focus Industries / Areas
Gross Profit Margin
Sales of New / Focus Products
Selling Price Control
Added-Value %
Variable Cost Reduction, Value %
Defect Cost %
Per-Head Production #Units
Automation %
(Headcount Reduction)
Labor Costs-Sales %
Inventory Turnover Months
Slow-Moving Inventory Months
Credits & Debits Months
Facilities Turnover
(1/N Automation Ratio)
R
O
S
Fixed Manufacturing
Costs %
R
O
C
I
SG&A %
R&D %
Working
Capital Turnover
Fixed Asset
Turnover
I
n
v
e
s
t
e
d
C
a
p
i
t
a
l
T
u
r
n
o
v
e
r
OMRON Corporation
Portfolio Management
OMRON consists of approximately 90 business
units, each subject to a portfolio management
system that assesses the economic value of the
unit according to (1) ROIC and (2) sales growth rate.
In this way, OMRON management can make proper
and timely decisions related to new business entry,
growth acceleration, restructuring, or divestiture to
drive improvements in OMRON Group value.
We consider both the economic value and the
market competitiveness of a business to allocate
limited resources in an optimal manner. This
assessment system allows us to identify the
growth potential of each business unit, making an
optimal allocation of our resources.
■ Assessing Economic Value
■ Assessing Competitiveness
S
a
l
e
s
G
r
o
w
t
h
R
a
t
e
(
%
)
B
Expecting Growth
S
Investment
C
Profit Restructuring
A
Examining Regrowth
M
a
r
k
e
t
G
r
o
w
t
h
R
a
t
e
(
%
)
B
C
S
A
ROIC（％）
Market Share (%)
Embracing ROIC Management
To promote ROIC management more widely, we
introduced ROIC Management 2.0 in 2015. ROIC
Management 2.0 incorporates a qualitative
interpretation of ROIC. The interpreted formula tells
us to add needed management resources (N) and
generate greater levels of value to our customers
(V), while reducing loss-making management
resources (L). Using this simple interpreted formula,
our employees in charge of sales or development
functions who may be unfamiliar with financial
statement concepts are able to envision ROIC
improvement measures in their day-to-day work.
Staff in charge of business unit accounting and
finance act as ambassadors responsible for
promoting ROIC Management 2.0. Ambassadors
provide simple case studies of successful ROIC
Management 2.0 initiatives to raise awareness of
ROIC on the front lines of our businesses around
the world.
■ ROIC Translation under ROIC Management 2.0
ROIC≒
Value to our Customers
（V）
+
（N）
Needed Management
Resources
Goods, Money, Time
（L）
Loss-Making
Management Resources
Muri, Muda, Mura
(overburden, waste, unevenness)
① Actively invest needed management resources
(N) in order to create value
② Realize value to our customers (V) more than the
investment amount (↑↑>↑)
③ Reduce loss-making management resources (L)
and shift / invest it to (N)
51
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy
Special Feature: 2
Human Resources Strategy
Accelerating the growth of our people and our organization to drive VG2.0 forward
Three Key Global Initiatives
The goal of our human resources strategy under
VG2.0 is to create a strong company where people
grow, enjoy their work, and keep improving
performance. We have established three initiatives
to accomplish this goal.
The first is to foster leaders.
We included this initiative when we first launched
VG2020. To achieve VG2.0 and sustainable growth in
the future, we must do even more to accelerate the
training of leaders who will drive management and
business. In particular, we must focus on leadership
overseas, raising the ratio of local employees in key
positions from the current one-half to two-thirds
within four years.
The second initiative is the hiring, training, and
effective utilization of a diverse employee base.
This is a new initiative under VG2.0. We want to
generate a new chemical reaction by linking the
talents of those employees who have brought us to
where we are and those employees necessary for
future growth. This chemical reaction is necessary
for creating innovation. We must hire and train
employees who have the skills and unique
experiences to help us achieve this goal. By
encouraging the growth and performance of
individuals with unique characteristics, we can
maximize the potential of a diverse workforce and
provide an environment and systems for
maximum performance.
The third initiative is to foster self-motivated
employees.
The OMRON Group human resources
development policy is to give opportunities to
those who are ambitious and who are well
prepared. We encourage and support those who
take the challenge to generate greater growth.
We plan to offer more programs to improve
capabilities and skills, providing more support for
new career choices that allow individuals to
express their talents and strengths. We will also
implement a ground-up review of the programs
and systems we have in place.
52
Masahiko TomitaExecutive OfficerSenior General Manager, Global Human Resources and Administration HQOMRON Corporation Human Resources
Strategy Goals
Create a strong company that fosters our people, provides an
enjoyable work environment, and encourages high performance
Key Global Initiatives
1
2
3
Foster leaders who will
drive management
and business
Hire, train, and make
effective use of a diverse
employee base
Encourage self-motivated
employees
Health Management and Other Specific Action Plans
We intend to execute a number of specific action
plans for these three initiatives. Here, we will
discuss several of these action plans in detail.
The first deals with fostering leaders. When we
began in fiscal 2011, only one-third of our key
positions overseas were held by local employees.
Today, that ratio is 49 percent. In Asia, in particular,
we started a talent management system during
fiscal 2014 to find and train future leaders. As a
result, the number of individuals capable of serving
in key positions has increased steadily. We are
adopting similar systems in North America and
other regions, promoting talented individuals.
The next deals with redesigning work styles to
encourage innovation. For example, we plan to offer
a wider variety of work arrangements, providing an
improved communications and collaboration
infrastructure, as well as more choices in work
locations, work schedules, and work styles. We
believe flexible work arrangements will motivate
employees to greater productivity, attract a more
diverse workforce, and result in even more
chemical reactions.
We further believe that diversity and inclusion
lead to innovation, and are a critical element to our
future competitiveness. For Japan, in particular,
we have set goals to address the important issue
of promoting career advancement for women. As
of fiscal 2016, we achieved our goal of having a
3.3 percent ratio of women in managerial roles.
Our goal is to raise this ratio to 5 percent by the
end of fiscal 2018, and to 8 percent by the end of
fiscal 2020. Further, we will provide more
opportunities for persons with disabilities to take
an active part globally.
The foundation of our entire human resources
53
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy strategy is that every employee is able to be
healthy and display their talents. Accordingly, we
will promote health management throughout our
entire company. In July, we made a declaration of
health management, identifying five indicators we
believe will result in better employee focus:
Exercise, sleep, mental health, diet and smoking.
This program represents what a company such as
OMRON should be. We plan to address these five
indicators throughout the year, encouraging greater
physical and mental health in our employees and
creating a more happy workplace. Using the
expertise regarding high blood pressure developed
within our Healthcare Business, we aim to
implement full blood pressure management
among all employees, taking yet another active role
in helping promote employee health.
During fiscal 2012, we launched a very
important initiative for the OMRON Group, which
we still carry out today. We have challenged
ourselves to practice the OMRON Principles
through our businesses. One key initiative to
share the OMRON Principles among our
employees worldwide is the OMRON Global
Awards, or TOGA. Fiscal 2017 will be the sixth
year of our TOGA program. We plan to improve
and expand TOGA, promoting the shared belief
in our principles and self-directed action.
Last, we began conducting an engagement
survey in fiscal 2016 to ensure progress toward
our human resources strategy. This survey
serves as the starting point for a cycle that
includes action plan execution, evaluation of
results, analysis of issues, and improvements.
We intend to continue with this survey as a
means to improve our initiatives. We aspire to
be a company in which a diverse employee base
feels comfortable exchanging opinions, having
fun, and creating innovations. By attracting and
connecting unique individuals from outside our
company, we will accelerate diversity and
innovation, building an attractive company that
fosters this kind of chain reactions.
OMRON Health Management Declaration
OMRON aims to be a pioneer in creating social needs, and the health of our employees is
accordingly fundamental to our business. We OMRON Group will unite to do our utmost to create
positive working environments full of smiles and vitality so all of our
people can innovate to solve various social issues.
President and CEO
July 3, 2017
54
OMRON Corporation Building a Stronger Business through Diversity
Solving Women’s Health Issues from the Perspective of Women
The passing of the Equal Opportunity Employment
Law in Japan 30 years ago marked the beginning
of major changes in the lives of women. At the
same time, women gained new life choices related
to marriage, birth, and more. A decrease in the
number of births per person and changes in
lifestyles have corresponded to an increase in
dysmenorrhea, uterine disease, and other female-
specific health issues, which are said to cost ¥6
trillion annually in lost labor productivity.
In response to these developments, OMRON
Healthcare launched the OMRON Style Beauty
Project in 2010. The objective of this project is to
balance beauty and health in equal proportions,
making a serious effort to create products and
services that address female-specific health
issues. OMRON Healthcare has developed
products in painstaking detail from a number of
potential-use cases. In addition, the company has
sponsored seminars and other programs to
educate both men and women about female-
specific health issues.
As a result of these initiatives, OMRON brand
recognition rose from 50% in fiscal 2014 to 54% in
fiscal 2016, while favorability ratings rose from 30%
■ Trends in OMRON Style Beauty Project-Related
Products
320
329
330
314
291
350
300
250
200
150
100
50
0
11
12
13
14
15
16
FY
Trends in OMRON Beauty and Health-Related Products; 2011 indexed at
100.
to 41%. Product sales also rose during the period.
OMRON Healthcare has a culture that
encourages all employees, regardless of gender or
seniority, to take on new challenges. The company
is also creating a corporate culture in which male
employees learn more about female-specific
health issues, fostering a greater cooperative
environment. Moving forward, we will work with
even greater urgency to incorporate the female
perspective in our approach, tackling new health
issues head on.
Isao Ogino
President and CEO,
OMRON Healthcare Co., Ltd.
Yoko Shimose
Manager, Cardiovascular Disease
Product Department
Product Planning Strategy HQ
55
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Message from the Chairman
Our Commitment to Corporate Governance for Sustainable Growth and
Greater Corporate Value
To improve lives and contribute to a better society
In 1959, the year that this corporate motto was
created by our founder, OMRON net sales were a
mere ¥400 million. Since that time, we have been
growing our business, introducing numerous world-
and Japan-first innovations driven by social needs.
To contribute to society through our OMRON
Principles, we must evolve our corporate
governance as a framework for supporting bold
decisions and answering the expectations of our
stakeholders. Further, we must do so in an
environment that changes rapidly and dramatically.
In our efforts for sustainable corporate value
growth, we recently did away with all director titles,
except for the title of board chair, who leads the
board of directors. The president (who is also our
chief executive officer) is now positioned as an
executive officer. With this change, we have further
separated the roles of oversight and business
execution, strengthening our supervisory function.
Based on an evaluation of the effectiveness of our
board of directors, during fiscal 2016 we expanded
discussions regarding medium- and long-term
management strategy. More specifically, we
discussed and approved initiatives and goals under
our VG2.0 medium-term management plan, which
we launched in April 2017. At the same time, we
56
OMRON Corporation revised the compensation structure for directors and
executive officers to achieve these goals. We have
tied the achievement of VG2.0 financial goals and
the non-financial factors of sustainability to medium-
term performance-based compensation pay for our
directors and officers. In this way, compensation is
linked to long-term corporate value.
Fiscal 2017 will be the first year of our VG2.0
plan. We have welcomed new members to our
board of directors, and expect to benefit from a
stronger supervisory function based on the
strengths and expertise that these new members
bring. In addition to reviewing specific progress in
VG2.0, the board will discuss important
management issues related to sustainability,
including strategies for technology and human
resources. We will strive to be even more effective
as a board of directors for OMRON Corporation.
In September 2015, the United Nations adopted
Sustainable Development Goals, reflecting common
global social issues to be resolved by the year 2030.
The Paris Agreement establishing new international
rules to counter global warming came into force
in November 2016. In these and other ways, the
world is demanding sustainability on a global
scale. Today, growing corporate value requires an
aggressive and dynamic response to
sustainability-related issues in our environment
and society. OMRON has defined a Sustainability
Policy and built a framework and a system by
which we put these policies into practice. As the
Board of Directors, we will exercise governance
to ensure business activities under VG2.0 raise
OMRON corporate value and answer the needs
of international society.
We will continue to practice the OMRON
Principles as they guide us toward sustainable
corporate value growth and social development
from a global perspective.
Fumio Tateishi
Chairman
July 2017
OMRON Principles
Sustainability Policy
We believe a business should create value for society through its key practices. We are committed
to sustainably increasing our long-term value by putting Our Mission and Values into practice.
● We uphold a long-term vision in our business practices to create solutions to society's needs.
● We operate as a truly global company through our fair and transparent management practices.
● We cultivate strong relationships with all of our stakeholders through responsible engagement.
57
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Corporate Governance
To ensure sustainable creation of corporate value, OMRON works constantly to enhance our
system of corporate governance.
Basic Stance for Corporate Governance of the Company
At the OMRON Group, corporate governance is defined as the system of processes and practices
based on the OMRON Principles and the OMRON Management Philosophy. The system is intended
to ensure transparency and fairness in business and speed up management decisions and practices.
This is done by connecting the entire process from oversight and supervision all the way to business
execution in order to boost the OMRON Group’s competitive edge. OMRON’s corporate governance
also involves building such a system and maintaining its proper function. The ultimate objective is to
achieve sustainable enhancement of corporate value by earning the support of all stakeholders.
OMRON Corporate Governance Policies
OMRON Corporation established the OMRON
Corporate Governance Policies based on the
Basic Stance for Corporate Governance. Since
establishing the Management Personnel Advisory
Committee in 1996, we have spent more than 20
years formalizing and strengthening our systems
of corporate governance. We intend to continue
our pursuit of ongoing corporate governance
improvement as we develop our own unique
vision of governance.
OMRON Corporate Governance Policies
http://www.omron.com/about/governance/organization/
■ Corporate Governance Initiatives
1999
2003
2011
President
1987: Yoshio Tateishi
2003: Hisao Sakuta
2011: Yoshihito Yamada
Chair of the Board
of Directors / CEO
President served as both
2003: Chairman serves as chair of the Board of Directors;
president serves as CEO
Separation of
management oversight
and business execution
30 directors
1999: Revised articles of incorporation,
setting number of board members to 10 or fewer
1999: Adopted executive officer system
2017: Eliminated
board titles*
2017: Positioned presi-
dent as an executive officer
Advisory Board
Outside Directors
1999: Advisory Board
2001: One
outside director
2003: Two outside directors
(seven directors)
2015: Three outside
directors (eight directors)
Audit & Supervisory Board
Members (Independent)
1998: One
member
1999: Two members
2003: Three members
(four auditors)
2011: Two members
(four auditors)
1996: Management Personnel
Advisory Committee
2000: Personnel Advisory Committee
2003: Compensation Advisory Committee
Advisory and Other
Committees
Corporate
Philosophy
1959:
Corporate
Motto
1990: OMRON
Principles
1998: Revised
OMRON Corporate
Governance Policies
58
2006: CEO Selection Advisory Committee
2008: Corporate Governance Committee
2006: Revised
2015: Revised
2015: Established
* Not including chairman of the Board
OMRON Corporation Corporate Governance Framework
OMRON has elected to be a company with an Audit
& Supervisory Board.
without direct corporate representational
authority.
The OMRON Board of Directors is made up of
eight members to ensure substantive discussion
and deliberation about important corporate matters.
OMRON has separated the management oversight
and business execution functions within the
Company, creating a system whereby the majority
of Board directors are not engaged directly in
business operations. We have also adopted a policy
setting the ratio of outside directors to at least one
third of the total number of directors on the Board.
To increase objectivity on behalf of the Board of
Directors, the titles and roles of Chairman of the
Board and President (CEO) are separated. The
Chairman serves as chair of the Board of Directors,
OMRON has established several advisory
committees to assist the Board of Directors.
These committees include the Personnel
Advisory Committee, the CEO Selection Advisory
Committee, the Compensation Advisory
Committee, and the Corporate Governance
Committee. The Personnel Advisory Committee,
the CEO Selection Advisory Committee, and the
Compensation Advisory Committee are all
chaired by outside directors, with at least half of
the committee members being outside directors.
The chair and members of the Corporate
Governance Committee are outside directors and
outside corporate auditors, which offers yet
■ Fiscal 2017 Corporate Governance Structure
Shareholders’ Meeting
Audit & Supervisory Board
Board of Directors
Chair: Chairman of the Board
Audit & Supervisory
Board Office
Board of Directors Office
Accounting Auditor
Sustainability Office
Executive Organization
President & CEO
Executive Council
Personnel Advisory Committee
CEO Selection Advisory Committee
Compensation Advisory Committee
Corporate Governance Committee
Internal Audit Division
Sustainability Committee*
Head Office Divisions
Business Companies
(Internal Companies)
*The Sustainability Committee identifies important issues relating to sustainability in the focus domains, the head office divisions, and various committees (the
Corporate Ethics & Risk Management Committee, the Information Disclosure Executive Committee, and the Group Environment Activity Committee) and oversees
them on a Group-wide basis.
Board of Directors
Audit & Supervisory Board
Personnel Advisory Committee
CEO Selection Advisory Committee
Makes decisions related to perfor-
mance targets and strategies;
oversees the execution of business
operations.
Oversees corporate governance
structure and execution business
operations; conducts audits of
day-to-day business activities, including
those performed by directors.
Sets standards and policies related to
selecting and hiring directors, Audit &
Supervisory Board members, and
executive officers; selects candidates
and evaluates performance of current
directors and executive officers.
Deliberates and nominates candidates
for corporate president & CEO;
deliberates succession candidates in
the event of an emergency.
Compensation Advisory Committee
Corporate Governance Committee
Executive Council
Sets policies for director and
executive officer compensation; evalu-
ates compensation levels and
deliberates specific compensation
packages.
Oversees ongoing corporate
governance improvement; deliberates
policies to advance management
transparency and fairness.
Deliberates and makes decisions
regarding important operational
matters within the scope of the
authority of the president and CEO.
59
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy
another layer of transparency and objectivity
onto its decision-making process.
In these policies, we have created a hybrid
governance framework, combining the best
features of a Company with an Audit &
Supervisory Board and a Company with a
Nominating Committee.
More Effective Oversight
In 1999, OMRON adopted the executive officer
system of management. Since that time, we
have endeavored to separate the roles of
oversight and business execution, setting up
advisory committees, separating the role of
chairman of the Board and that of president, and
ensuring that a majority of the Board consists of
non-executive directors. In this way, we have
improved the supervisory functions of the board
of directors.
Beginning fiscal 2017, no OMRON director has
a specific title, with the exception of the
chairman of the Board. We believe this measure
will help improve the oversight function of the
Board of Directors. As the awareness of
oversight becomes stronger among directors,
the functions of the Board of Directors will
■ Fiscal 2017 Advisory Committee Members
Outside directors attended the 13 meetings of
the Board of Directors held during fiscal 2016 at
a rate of 97.4%. Outside auditors attended at a
rate of 92.3%. Outside auditors attended the 13
meetings of the Audit & Supervisory Board at a
rate of 100%.
become more effective.
At the same time, the president, who is the
chief executive officer, is now elected from
among the executive officers in order to
establish an optimum and flexible execution
system. With the president now an executive
officer, we are able to select the president via
Board resolution in conformity with the fiscal
business year. We believe naming the president
at the beginning of the fiscal year will aid in
creating a more optimum and flexible system of
business execution.
This is one more way in which OMRON
strives for sustainable corporate value growth
through a well-defined separation between
oversight and execution, each side clearly aware
of their responsibilities.
Title
Name
Personnel
Advisory
Committee
CEO Selection
Advisory
Committee
Compensation
Advisory
Committee
Corporate
Governance
Committee
Chairman of the Board
Representative Director
Representative Director
Director
Director
Outside Director
Outside Director
Outside Director
Fumio Tateishi
Yoshihito Yamada
Kiichiro Miyata
Koji Nitto
Satoshi Ando
Eizo Kobayashi★
Kuniko Nishikawa★
Takehiro Kamigama★
□
○
◎
□
□
□
○
◎
□
□
□
○
□
◎
□
Audit & Supervisory Board Member (Full-time)
Kiichiro Kondo
Audit & Supervisory Board Member (Full-time)
Tokio Kawashima
Audit & Supervisory Board Member (Independent) Hideyo Uchiyama★
Audit & Supervisory Board Member (Independent) Tadashi Kunihiro★
◎Chairperson ○Vice-Chairperson □Committee Member ★Independent under Tokyo Stock Exchange rules
◎
○
□
□
□
60
OMRON Corporation
Evaluating the Effectiveness of the Board of Directors
OMRON performs analyses and evaluations of
the effectiveness of the Company’s Board of
directors. The objective of these measures is to
improve Board of Director performance and
realize sustainable enhancement of corporate
value by raising an awareness of the issues and
the direction of the Company among Board
directors. Directors then build a shared
awareness and work to improve the issues
identified.
Fiscal 2016 Evaluation of the Effectiveness
The Corporate Governance Committee is the
body responsible for evaluating the
effectiveness of the Board of Directors.
As with fiscal 2015, all directors and Audit &
Supervisory Board members filled out self-
evaluations anonymously. These evaluations
served as the basis for the evaluation formula.
Evaluations addressed Board deliberation styles
and operating methods. Further, the Corporate
Governance Committee evaluated the fiscal
2016 policy for the operation of the Board of
Directors and related specific initiatives. In
addition, the Board chair and directors were
interviewed individually to provide them with an
opportunity to give their opinions on the
effectiveness of our Board.
The Corporate Governance Committee
analyzed these self-evaluations and interviews,
reporting the results to the Board of Directors.
The Board of Directors then developed operating
policies for fiscal 2017 based on these
evaluation results.
Fiscal 2016 Results of the Evaluation
The Corporate Governance Committee
concluded that there are no problems with the
current governance system or operations. The
committee further concluded that the Board is
functioning appropriately, and confirmed the
initiatives based on the fiscal 2016 policies for
the operation of the Board of Directors. The
committee also confirmed matters identified as
future issues.
Fiscal 2016 Initiatives
・ Discussed medium- to long-term business strategies
and approved the medium-term management plan
VG2.0, including specific initiatives and targets.
・ Formulated company-wide ESG-related policy (Sustain-
ability Policy). Identified important issues (materiality)
based on the policy, and developed the structure to
supervise the management of these issues.
・ Revised Board of Director Rules and delegated board
authority related to certain matters for deliberation.
Future Issues
・ Supervisory functions for achieving VG2.0 goals
Fiscal 2017 Policy for the Operation of the Board of Directors
Based on the results of this evaluation, the Board
of Directors will exercise its supervisory functions
to ensure the Company achieves the objectives
of VG2.0 (beginning fiscal 2017). Supervision will
focus on three main points:
・ Confirming the progress of the short-term
management plan
・ Formulating human resources and technical
strategies which are keys to medium-term
management strategies
・ Driving initiatives to address materiality
identified based on Sustainability Policy
61
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Special Feature: 3
A Step Forward in
Compensation Governance
− Toward Sustainable Corporate Value Growth −
OMRON has been working to strengthen its corporate governance based on the
OMRON Principles. In fiscal 2017, we revised our compensation structure for directors
and executive officers, aiming to spur even greater corporate value growth.
Chairman Fumio Tateishi and outside director Eizo Kobayashi, who served as
chairman of the Compensation Advisory Committee until last year, discussed how
this structure will accelerate sustained corporate value growth at OMRON.
The Approach of OMRON Management and the Role of Compensation
Tateishi
Based on the OMRON Principles, our
aim is to contribute to a better society by sustained
enhancement of corporate value. To accomplish
this, we develop our long-term vision every 10
years. We create a medium-term management plan
that covers a span of three to four years, while we
also create short-term plans for a single fiscal year.
Of course, we must strengthen our corporate
governance as we execute on this vision and these
plans, continuing to raise corporate value. We
consider compensation and appointment to be an
important pillar supporting corporate governance.
We have two goals we want to accomplish with
compensation. The first is to motivate directors
and executive officers practicing the OMRON
Principles to boldly pursue our long-term vision.
The second is to use the disclosure of
compensation policy to demonstrate our
commitment to raising sustainable corporate
value. This is one way we help our stakeholders
understand our philosophy and initiatives
regarding management.
Evolution of Compensation
Even before I was named an outside
Kobayashi
director, I knew OMRON for its strong corporate
governance. I became a director in fiscal 2013.
From the start, I was truly surprised by the level of
commitment to strengthening corporate
governance.
We deliberated compensation within the
Compensation Advisory Committee, and in fiscal
2014 we decided to adopt a compensation
structure that provided a stronger link between
medium-term performance and compensation.
Our objective here was to ensure that we
62
OMRON Corporation Fumio Tateishi
Chairman
Eizo Kobayashi
Outside Director
accomplished our medium-term management plan.
Tateishi
Specifically, we adopted medium-term
performance-linked bonuses that varied according to
the achievement level of the operating income
target defined in our medium-term management
plan. We also tied performance-linked stock
acquisition rights according to the achievement level
of the net sales target.
That’s correct. A number of companies
Kobayashi
have adopted some type of annual performance-
based compensation using a variety of different
performance indicators. However, I think we are
one of the leaders in focusing more on medium- to
long-term performance, linking pay to how well we
meet the expectations of our shareholders and
other stakeholders.
Tateishi
This revised compensation structure
resulted in an even higher motivation among
directors and executive officers to engage with a
focus on reaching our medium- to long-term goals.
Unfortunately, we were not able to accomplish
our initial targets. We did, however, strengthen our
management in terms of medium- to long-term
focus. I consider our M&A activities and growth
investments to be cases in point.
Seeing what is discussed at the Board
Kobayashi
meetings, I am sure OMRON is shifting its
management to a more medium- to long-term
orientation.
The Compensation Advisory Committee
conducted a review of the effectiveness of the
compensation structure.
This was the second revision since fiscal 2014.
The Compensation Advisory Committee paid
particular attention to two factors: Whether the
compensation system functioned as a motivation
for directors and executive officers to improve
sustained corporate value growth and whether the
system was clear enough for our stakeholders to
understand and see whether it was aligned with
their expectations.
Tateishi
Global technology innovation takes
place at near blinding speed today. This innovation
is changing our society in significant ways. How
will we solve the social issues that these changes
63
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy bring? Today, it is more important than ever that we
engage in opportunistic policies looking toward the
society for the year 2030.
Our VG2.0 medium-term management plan,
which we launched in fiscal 2017, provides specific
and actionable measures for accomplishing this
task. I believe that the upgraded compensation
structure will be a driving force to move VG2.0
forward.
Highlights of the Fiscal 2017 Revision
Tateishi
With this revision, the ratio of
compensation for our CEO, for example, has been
changed from 1:1:1 (base salary: short-term
performance linked compensation : medium- to
long-term performance-linked compensation) to
1:1:1.5. I think this change is truly groundbreaking.
The higher the position in our company, the greater
the responsibility for the medium and long term. By
weighting the ratio toward medium- to long-term
performance, we are making it clear what we
expect of people in these positions. This is very
significant for OMRON management.
In addition, the performance indicators
Kobayashi
tied to performance-linked compensation are very
important. We have short-term and medium- to
long-term performance-linked components. Of
course, we must meet the expectations of our
shareholders and other stakeholders every fiscal
year. To do this, we will use an evaluation of ROIC
(the fundamental measure of our management),
operating income, and net income as the indicators
for annual bonuses.
Another question is how to generate business
and management innovation. This includes new
products and services based on new technologies,
M&A, and more. We adopted net sales, EPS, and
ROE as of fiscal 2020 for our medium- to long-
term performance indicators. We believe these
indicators will help us make steady progress in
accomplishing VG2.0. Further, we adopted a
performance-linked stock-based compensation
system to encourage directors and executive
officers to focus on sustainable corporate growth
from the same perspective as our shareholders.
With this recent revision, we added a
Tateishi
sustainability evaluation* to the indicators we use
for medium- to long-term performance-linked
compensation. In the fall of 2015, the United
Nations adopted Sustainable Development Goals.
OMRON needs to accelerate our sustainability
initiatives to contribute to society through our
businesses.
“I believe that the upgraded
compensation structure will
be a driving force to move
VG2.0 forward.”
64
OMRON Corporation “It is important to meet the
expectations of our stakeholders
and to spur greater corporate
value growth.”
With this revision, we spent quite a
Kobayashi
while discussing how to evaluate sustainability and
which objective indicators we could use. We took
great pains to determine objective measures that
weren’t simply self-serving. Finally, we decided to
refer to sustainability indicators obtained from a
third-party organization for transparency and
accountability.
While single-year performance is
Kobayashi
important, it is even more important to meet the
expectations of our stakeholders with our CEO,
directors and executive officers keeping long-term
corporate growth in mind. We believe this new
compensation structure will be very effective in
helping us achieve our VG2020 goals for the year
2020 and raise corporate value.
Tateishi
I believe OMRON has demonstrated to
our stakeholders how serious we are about raising
corporate value by solving social issues through our
businesses, particularly given our adoption of a
sustainability evaluation.
* Sustainability Evaluation
An evaluation based on the Dow Jones Sustainability Indices
(DJSI). The DJSI are a series of ESG Indices which include
companies evaluated and selected based on long-term
shareholder value perspective, reflecting economic,
environmental, and social factors comprehensively.
■ Overview of Revised Compensation Structure
Medium- to
long-term
incentives
Fiscal 2014-
Performance-linked stock
acquisition rights
Medium-term
performance-linked bonuses
Performance-linked
stock compensation
Adoption of new stock
compensation plan
Fiscal 2017-
Performance-linked
stock compensation
Short-term
performance-linked
compensation
Yearly performance-linked
bonuses
Revised performance
evaluation indicators
Bonus
Base salary
Base salary
Base salary
Ratio of compensation
(CEO)
Base: Short-term: Medium- to long-term
= 1 : 1 : 1
Revised ratios
Base: Short-term: Medium- to long-term
= 1 : 1 : 1.5
65
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Future Compensation Structure and Expectations
A compensation structure must evolve
Kobayashi
in response to the times and business environment.
As a Compensation Advisory Committee, we will
continue to review and improve our compensation
structure, ensuring that it functions as a motivation
for strong decision-making by directors and
executive officers and that it meets standards of
transparency and accountability to our stakeholders.
Tateishi
The goal of corporate governance is to
enhance sustainable corporate value by achieving
our long-term vision based on the OMRON
Principles. When corporate governance (including
compensation structure) functions as it should,
directors and executive officers will embrace a
medium- to long-term perspective, leading to
faster execution of policies for creating value into
the future. OMRON directors and executive
officers will work as one united entity to achieve
our long-term vision and raise our corporate value.
New Compensation Policy for Directors
❶ Basic policy
・ The Company shall provide compensation sufficient to recruit as directors exceptional people
who are capable of putting the OMRON Principles into practice.
・ The compensation structure shall be sufficient to motivate directors to contribute to sustainable
enhancement of corporate value.
・ The compensation structure shall maintain a high level of transparency, fairness, and
rationality to ensure accountability to shareholders and other stakeholders.
❷ Structure of compensation
・ Compensation for directors shall consist of a base salary, which is fixed compensation, and
performance-linked compensation, which varies depending on the Company’s performance.
・ Compensation for outside directors shall consist of a base salary only, reflecting their roles and
the need for maintaining independence.
❸ Base salary
・ The amount of a base salary shall be determined by taking into account the salary levels of other
companies, as surveyed by a specialized outside organization.
❹ Performance-linked compensation
・ As short-term performance-linked compensation, the Company shall provide bonuses linked to
yearly performance indicators, and to the degree of achievement of performance targets.
・ As medium- to long-term performance-linked compensation, the Company shall grant stock
compensation linked to the degree of achievement of the goals of the medium-term
management plan, and to the improvement in corporate value (value of stock).
・ The Company shall determine the target amounts for short-term performance-linked
compensation and medium- to long-term performance-linked compensation based on the target
pay mix specified according to each director’s role and responsibility.
❺ Compensation governance
・ All compensation for directors shall be determined by a resolution of the Board of Directors
reflecting the deliberations and recommendations of the Compensation Advisory Committee.
* A similar policy has been adopted for executive officers toward achieving medium- to long-term
performance targets.
66
OMRON Corporation Overview of New Compensation Structure (Directors, Executive Officers)
1）Ratio of compensation
Compensation consists of base salary (fixed compensation) and compensation according to
Company performance, namely short-term performance-linked compensation and medium- to
long-term performance-linked compensation.
The ratio of compensation consisting of performance-linked compensation compared to base
salary has been determined for each role:
Base salary
：
Short-term
：
Medium- to long-term
1：1：1.5
=
(CEO)
2）Base salary (directors, executive officers)
A base salary is paid as fixed compensation. Base salaries are determined for each role by taking into
account the salary levels of officers at other companies (benchmarked companies of the same
industry and scope selected by the Compensation Advisory Committee), as surveyed by a specialized
outside organization.
3）Short-term performance-linked compensation (internal directors, executive officers)
Bonuses are paid based on yearly performance indicators and the degree of achievement of
performance targets.
Director bonuses (excluding outside directors) vary from 0% to 200% according to the achievement
of operating income, net income, and ROIC targets defined in the annual operating plan.
Bonus
=
Target amount for
each position
×
Performance score
（Operating income 50%, Net income 50%）
×
ROIC score
Performance indicators for executive officers are established individually according to their
respective responsibilities.
4）Medium- to long-term performance-linked compensation (internal directors, executive officers)
The performance-linked component (60%) and non-performance-linked component (40%) are paid as
stock-based compensation.
The performance-linked component may vary from 0% to 200%. This range is based on
achievement of net sales, EPS, and ROE targets based on our medium-term management plan, as
well as a sustainability evaluation* based on a third-party organization.
Stock-based
compensation
=
Target amount for
each position
×
Performance score
(Net sales 30%, EPS 70%)
×
ROE score
×
Sustainability score
The non-performance-linked component aims for retention and motivation to improve share prices
over the medium- to long-term. Payment is conditioned on a certain term of service.
As a rule, stock paid in stock-based compensation must be held by the individual during their term
of service. In the event that an individual in question engages in serious misconduct during their
term of service, and such misconduct harms the Company, the Compensation Advisory Committee
will deliberate and make a recommendation. Based on this recommendation, the Board of Directors
(when said individual is a director) or the CEO (when said individual is an executive officer) shall
resolve to limit the payment of stock-based compensation.
* Sustainability Evaluation
An evaluation based on the Dow Jones Sustainability Indices (DJSI). The DJSI are a series of ESG Indices which include companies
evaluated and selected based on long-term shareholder value perspective, reflecting economic, environmental, and social factors
comprehensively.
Fiscal 2016 director compensation was paid based on the former compensation structure. For more information,
see the following URL:
http://www.omron.com/about/ir/shareholder/pdfs/convocation_notice_80th.pdf
(Convocation Notice for the 80th Ordinary General Meeting of Shareholders, P43-44)
67
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Board of Directors and Auditors
As of June 22, 2017
Takehiro Kamigama
Outside Director
Eizo Kobayashi
Outside Director
Fumio Tateishi
Chairman
Personnel Advisory Committee Member
Chairman of the Personnel Advisory Committee
CEO Selection Advisory Committee Member
CEO Selection Advisory Committee Member
Chairman of the CEO Selection Advisory Committee
Compensation Advisory Committee Member
Chairman of the Corporate Governance Committee
Corporate Governance Committee Member
Compensation Advisory Committee Member
Kuniko Nishikawa
Outside Director
Chairman of the Compensation Advisory
Committee
Vice Chairman of the Corporate Governance
Committee
Personnel Advisory Committee Member
CEO Selection Advisory Committee Member
Satoshi Ando
Director
Vice Chairman of the Personnel Advisory
Committee
Vice Chairman of the CEO Selection
Advisory Committee
Vice Chairman of the Compensation
Advisory Committee
Yoshihito Yamada
President and CEO
68
OMRON Corporation Kiichiro Miyata
Director, Senior Managing
Executive Officer, CTO
Personnel Advisory Committee
Member
Kiichiro Kondo
Audit & Supervisory Board
Member
Hideyo Uchiyama
Audit & Supervisory Board Member
(Independent)
Corporate Governance Committee
Member
Yoshihito Yamada
President and CEO
Koji Nitto
Director, Senior Managing Executive
Officer, CFO
Compensation Advisory Committee
Member
Tokio Kawashima
Audit & Supervisory Board Member
Tadashi Kunihiro
Audit & Supervisory Board
Member (Independent)
Corporate Governance
Committee Member
69
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Directors, Audit & Supervisory Board
As of June 22, 2017
Directors
Chairman Fumio Tateishi
Director Satoshi Ando
Aug. 1975 Joined OMRON
Jun. 1997 Director
Jun. 1999 Managing Executive Officer
Jun. 2001 Senior General Manager, Corporate Strategic
Planning HQ
Jun. 2003 Executive Officer and Executive
Vice President; President,
Industrial Automation
Business Company
Jun. 2008 Director and Executive Vice
Chairman
Jun. 2013 Chairman of the Board
(to present)
President and CEO Yoshihito Yamada
Apr. 1984 Joined OMRON
Jun. 2008 Executive Officer; Representative Director and
President, OMRON
Healthcare Co., Ltd.
Mar. 2010 Senior General Manager,
Corporate Strategic
Planning HQ
Jun. 2010 Managing Executive Officer
Jun. 2011 Representative Director
and President (to present)
Director Senior Managing Executive Officer, CTO
Kiichiro Miyata
Apr. 1985 Joined Tateisi Institute of Life Science, Inc. (now
OMRON HEALTHCARE Co., Ltd.)
Mar. 2010 Representative Director and President of OMRON
Healthcare Co., Ltd. (Retired in March 2015)
Jun. 2010 Executive Officer
Jun. 2012 Managing Executive Officer, OMRON
Apr. 2015 Chief Technology Officer (CTO) and Senior General
Manager of Technology &
Intellectual Property HQ
(to present)
Apr. 2017 Senior Managing Director
(to present)
Jun. 2017 Representative Director
(to present)
Director Senior Managing Executive Officer, CFO
Koji Nitto
Apr. 1983 Joined OMRON
Mar. 2011 Senior General Manager, Global Resource
Management HQ
Jun. 2011 Executive Officer
Mar. 2013 Senior General Manager, Global SCM and IT
Innovation HQ
Apr. 2013 Managing Executive Officer
Mar. 2014 Senior General Manager,
Global Strategy HQ (to present)
Apr. 2014 Senior Managing Executive
Officer (to present)
Jun. 2014 Director (to present)
Apr. 2017 Chief Financial Officer
(CFO) (to present)
Apr. 1977 Joined The Bank of Tokyo, Ltd. (now The Bank of
Tokyo-Mitsubishi UFJ, Ltd.)
July 2003 Branch Manager of Jakarta Branch, The Bank of
Tokyo-Mitsubishi UFJ, Ltd. (Resigned in June 2007)
Jun. 2007 Audit & Supervisory Board Member
(Independent), OMRON
Jun. 2011 Executive Officer and Senior General Manager,
Investor Relations HQ
Mar. 2015 Senior General Manager,
Global Investor Relations &
Corporate Communications HQ
Apr. 2015 Managing Executive Officer
Jun. 2017 Director (to present)
Outside Director Eizo Kobayashi
Apr. 1972 Joined ITOCHU Corporation
Jun. 2000 Executive Officer, ITOCHU Corporation
Apr. 2002 Managing Executive Officer, ITOCHU Corporation
Jun. 2003 Representative Director and Managing Director,
ITOCHU Corporation
Apr. 2004 Representative Director and Senior Managing
Director, ITOCHU Corporation
Jun. 2004 President and CEO, ITOCHU Corporation
Apr. 2010 Chairman and Representative
Director, ITOCHU Corporation
Jun. 2011 Chairman, ITOCHU Corporation
Jun. 2013 Outside Director, OMRON
(to present)
Jun. 2016 Chairman, ITOCHU
Corporation (to present)
Outside Director Kuniko Nishikawa
Apr. 1986 Joined Citibank N.A.
Feb. 1996 Joined A.T. Kearney, Inc.
Sep. 2000 President & CEO, Supernurse Co. Ltd.
Aug. 2010 Established Firststar Healthcare Co. Ltd., President
& CEO (to present)
Jun. 2013 President, Benesse MCM Corp.
Jun. 2015 Outside Director, OMRON
(to present)
May 2017 Chief Executive Officer,
FRONTEO Healthcare, Inc.
(to present)
Outside Director Takehiro Kamigama
Apr. 1981 Joined TDK Corporation
Jun. 2002 Corporate Officer, TDK Corporation
Jun. 2003 Senior Vice President, TDK Corporation
Jun. 2004 Director & Executive Vice President,
TDK Corporation
Jun. 2006 President & Representative
Director, TDK Corporation
Jun. 2016 Chairman & Representative
Director, TDK Corporation
(to present)
Jun. 2017 Outside Director, OMRON
(to present)
70
OMRON Corporation
Members, and Honorary Chairman
Audit & Supervisory Board Members
Audit & Supervisory Board Member
Kiichiro Kondo
Audit & Supervisory Board Member
Hideyo Uchiyama
Apr. 1977 Joined Mitsui Ocean Development & Engineering
Co., Ltd.
Nov. 1975 Joined Arthur Young & Company
Dec. 1979 Joined Asahi Accounting Company (now KPMG
Jan. 1988 Joined Mitsui Trust and Banking Company, Limited
AZSA LLC)
(now Sumitomo Mitsui Trust Bank, Limited)
Apr. 1999 Joined OMRON
Apr. 2007 Senior General Manager, Public Solutions Business
Department, Social Systems Solutions and Service
Business Company
Mar. 1980 Registered as Certified Public Accountant
July 1999 Representative Partner, KPMG AZSA LLC
May 2002 Board Member, KPMG AZSA LLC
Jun. 2006 Executive Board Member, KPMG AZSA LLC
Jun. 2010 Managing Partner, KPMG AZSA LLC, Chairman,
Jun. 2007 Executive Officer
Apr. 2011 President and CEO, OMRON
Social Solutions Co., Ltd.
Jun. 2011 Managing Executive Officer
Jun. 2015 Audit & Supervisory Board
Member (to present)
Audit & Supervisory Board Member
Tokio Kawashima
Apr. 1982 Joined Mitsubishi Bank Ltd. (now The Bank of
Tokyo-Mitsubishi UFJ, Ltd.)
Sep. 2008 Regional Head for Germany and General Manager
of Dusseldorf Branch, The
Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Apr. 2011 Joined OMRON
Jun. 2011 Audit & Supervisory Board
Member (to present)
KPMG Japan
Sep. 2011 Chairman, KPMG Asia Pacific
Oct. 2013 CEO, KPMG Japan
Sep. 2015 Executive Advisor, ASAHI Tax
Corporation (to present)
Jun. 2016 Audit & Supervisory Board
Member (Independent),
OMRON (to present)
Audit & Supervisory Board Member
Tadashi Kunihiro
Apr. 1986 Registered as attorney with the Daini Tokyo Bar
Association; Joined Nasu & Iguchi Law Office
Jan. 1994 Established Kunihiro Law Office
(now T. Kunihiro &
Co. Attorneys-at-Law)
Jun. 2017 Audit & Supervisory Board
Member (Independent),
OMRON (to present)
Honorary Chairman
Honorary Chairman Yoshio Tateishi
Apr. 1963 Joined OMRON
May 1973 Director
Jun. 1976 Managing Director
Jun. 1983 Senior Managing Director
Jun. 1987 President and CEO
Jun. 2003 Representative Director and
Chairman of the Board
May 2007 Chairman, Kyoto Chamber of
Commerce and Industry
(to present)
Jun. 2011 Honorary Chairman
(to present)
71
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy
Executive Off icers
President
Yoshihito Yamada
CEO
Executive Vice President
Yutaka Miyanaga
Company President,
Industrial Automation Company
Senior Managing Executive Officers
Kiichiro Miyata
CTO and Senior General Manager,
Technology & Intellectual Property
HQ
Managing Executive Officers
Shigeki Fujimoto
Senior General Manager,
Business Development HQ
Katsuhiro Wada
President and CEO,
OMRON AUTOMOTIVE
ELECTRONICS CO., LTD.
Shizuto Yukumoto
Company President,
Electronic and Mechanical
Components Company
Toshio Hosoi
President and CEO,
OMRON SOCIAL SOLUTIONS
CO., LTD.
72
Koji Nitto
CFO and Senior General Manager,
Global Strategy HQ
Isao Ogino
President and CEO,
OMRON HEALTHCARE CO., LTD.
Kiyoshi Yoshikawa
Senior General Manager,
Global Manufacturing Innovation
HQ
Nigel Blakeway
Chairman, President and CEO,
OMRON MANAGEMENT CENTER
OF AMERICA, INC.
OMRON Corporation Executive Officers
Goshi Oba
Chairman and President,
OMRON INDUSTRIAL
AUTOMATION (CHINA) CO., LTD.
Takayoshi Oue
Senior General Manager,
Global Finance and Accounting HQ
Hideji Ejima
Senior General Manager,
Environmental Solutions Business
HQ
Seigo Kinugawa
Senior General Manager,
Strategy Planning Division HQ, and
Senior General Manager,
Robotics Business Development
Project, Industrial Automation
Company
Takashi Kitagawa
Senior General Manager,
Board of Directors Office
Masahiko Tomita
Senior General Manager,
Global Human Resources and
Administration HQ
Munenori Odake
Senior General Manager,
Sales & Marketing Division HQ,
Industrial Automation Company
Kenji Sugawa
Director, Executive Vice President,
and Senior General Manager,
Global Sales and Marketing Group HQ,
OMRON HEALTHCARE CO., LTD.
Shuji Tamaki
Senior General Manager,
Global Risk Management and
Legal HQ
Ken Tanikawa
President and CEO,
OMRON PRECISION
TECHNOLOGY CO., LTD.
Makoto Ota
President and CEO,
OMRON RELAY & DEVICES
Corporation
Tsutomu Igaki
Senior General Manager,
Global Investor Relations &
Corporate Communications HQ
Jian Xu
China Manufacturing Innovation
Executive, Global Manufacturing
Innovation HQ,
and President and CEO,
SHANGHAI OMRON CONTROL
COMPONENTS CO., LTD.
Junta Tsujinaga
Senior General Manager,
Product Business Division HQ,
Industrial Automation Company
73
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Responsible Engagement with Investors
Our Sustainability Policy includes a declaration that we cultivate strong relationships with all of our
stakeholders through responsible engagement. The OMRON Corporate Governance Policies also define our
relationship with our stakeholders, detailing basic policies related to constructive engagement with
shareholders. Based on these policies, OMRON management and the Investor Relations department take the
lead in holding responsible engagement with our shareholders and investors. We believe that responsible
engagement leads to greater corporate value.
★ OMRON Corporate Governance Policies (P58)
★ Sustainability Policy (P57)
to the meeting. In fiscal 2016, printed convocation
notices were sent at least four weeks prior to the
general meeting of shareholders to ensure
shareholders have sufficient time to study
proposals prior to the meeting.
The 79th Ordinary General Meeting of
Shareholders (Friday, June 23, 2016)
Attendees
Ratio of Voting
Rights Exercised
1,006
86.9%
General Meeting of Shareholders
We believe our general meeting of shareholders is
the ultimate decision-making body for our
company. We promote engagement with our
shareholders, providing an appropriate environment
for them to exercise their voting rights. To promote
participation, we hold our general meeting of
shareholders at least three business days before
the traditional date used by the majority of
companies. We also arrange for the meeting to be
in a large hall in a hotel connected directly to the
Kyoto Train Station for the sake of convenience.
We publish convocation notices in Japanese and
English on our corporate website one month prior
Institutional Investors
OMRON engages directly with institutional
investors in Japan and across the world through
meetings and telephone conferences. Our Investor
Relations Department responds to institutional
investor requests for meetings to the greatest
extent possible. We are proactive in disclosing
information through our integrated report, ESG
disclosures, and other means to build constructive
interactions with a diverse range of institutional
investors.
A technology seminar was held again in fiscal
2016, providing attendees an opportunity to play
with the factory automation equipment of the
Industrial Automation Business.
74
Factory automation technology seminar
OMRON Corporation The seminar helped investors understand more
about the superiority of our products, which
translates into competitive market advantage for
the Industrial Automation Business.
Fiscal 2016 Engagement
Meetings
769times
Individual Investors
OMRON holds a number of information sessions
during the year, providing opportunities to engage
directly with many individual investors. We use
these sessions to communicate the special nature
of OMRON to individual investors, discussing our
history, businesses, and financial results in
straightforward language.
We are also unique in that we hold joint
information sessions with other companies.
Fiscal 2016 Engagement
No. of Events
Total No. of Participants
8
400
Information session for individual investors
Shareholder Benefits
OMRON offers a program of shareholder benefits to show our appreciation for their support, as
well as to further their understanding about our company. Shareholders can choose between a gift
of OMRON Healthcare devices or a donation to Japan Sun Industries, a social welfare organization.
Every year, we receive messages from many shareholders expressing their happiness and
appreciation for these benefits.
Gift of OMRON Healthcare Devices
Donation to Japan Sun Industries
75
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Financial Section (U.S. GAAP)
77 Six-Year Summary
78 At a Glance
80 A Review of EARTH-1 STAGE Business Plan
（Fiscal 2014 to 2016）
82
Fiscal 2016 in Review
88 Outlook for Fiscal 2017
90 Consolidated Balance Sheets
92 Consolidated Statements of Income
93 Consolidated Statements of Comprehensive Income
94 Consolidated Statements of Shareholders’ Equity
95 Consolidated Statements of Cash Flows
For more information, please refer to the Company’s audited annual financial report:
http://www.omron.com/ir/irlib/annual.html
76
OMRON Corporation
80 A Review of EARTH-1 STAGE Business Plan
77 Six-Year Summary
78 At a Glance
（Fiscal 2014 to 2016）
82
Fiscal 2016 in Review
88 Outlook for Fiscal 2017
90 Consolidated Balance Sheets
92 Consolidated Statements of Income
93 Consolidated Statements of Comprehensive Income
94 Consolidated Statements of Shareholders’ Equity
95 Consolidated Statements of Cash Flows
Six-Year Summary
OMRON Corporation and Subsidiaries
Years ended March 31
Net Sales1：
Industrial Automation Business (IAB)
Electronic and Mechanical Components
Business (EMC)
Automotive Electronic Components
Business (AEC)
Social Systems, Solutions and Service
Business (SSB)
Healthcare Business (HCB)
Other Businesses
Eliminations and Corporate
Net Sales by Region
Japan
Americas
Europe
Greater China
Asia Pacific
(Total)
Costs and Expenses:
Cost of sales
Selling, general and administrative expenses
(excl. R&D expenses)
R&D expenses
Other expenses (income), net
(Total)
Income before income taxes and equity in
earnings of affiliates
Income taxes
Equity in loss (earnings) of affiliates
Net income (loss)
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
Millions of yen (except per share data)
¥270,835
¥262,983
¥291,739
¥331,840
¥335,959
¥330,959
83,002
84,107
97,699
103,946
103,681
93,938
85,027
97,643
126,620
137,883
139,966
132,060
57,200
68,754
82,695
80,410
77,538
67,129
62,446
71,520
89,275
100,615
108,121
101,295
53,535
59,240
78,949
87,382
63,028
7,416
6,214
5,989
5,176
5,311
63,264
5,556
307,649
328,470
356,342
351,321
342,824
339,841
74,820
80,427
100,992
123,496
130,968
112,191
83,561
80,453
100,929
108,427
109,147
101,074
106,283
142,444
180,954
162,508
52,357
54,828
72,259
83,054
88,157
102,633
147,751
91,785
619,461
650,461
772,966
847,252
833,604
794,201
391,574
408,954
475,758
514,645
512,792
482,399
145,662
152,676
181,225
198,103
205,735
193,539
42,089
43,488
47,928
47,913
52,790
6,589
4,106
6,048
(797)
(3,399)
50,697
2,074
585,914
609,224
710,959
759,864
767,918
728,709
33,547
41,237
62,007
87,388
65,686
65,492
17,826
14,096
19,475
28,893
20,043
(631)
(2,976)
(3,782)
(3,937)
(2,039)
16,352
30,117
46,314
62,432
47,682
19,882
(712)
46,322
335
215.1
215.1
68
25,816
697,701
469,029
Net income (loss) attributable to noncontrolling interests
(37)
(86)
129
262
392
Net income attributable to OMRON shareholders
16,389
30,203
46,185
62,170
47,290
45,987
Per Share Data (yen):
Income from continuing operations
Basic
Diluted
Cash dividends2
74.5
74.5
28
137.2
137.2
37
209.8
ー
53
283.9
283.9
71
219.0
219.0
68
Capital expenditures (cash basis)
27,502
30,383
32,218
37,123
37,903
Total assets
Total shareholders' equity
Financial Indicators:
Gross profit margin
Operating income margin
Return on sales
ROIC (Return on invested capital)
ROE (Return on equity)
Asset turnover (times)
Inventory turnover (times)
Shareholders’ equity ratio
537,323
573,637
654,704
711,011
683,325
320,840
366,962
430,509
489,769
444,718
36.8%
37.1%
38.5%
6.5%
2.6%
4.8%
5.2%
1.1
4.4
7.0%
4.6%
8.6%
8.8%
1.2
4.5
8.8%
6.0%
11.3%
11.6%
1.3
5.0
39.3%
10.2%
7.3%
13.4%
13.5%
1.2
4.8
38.5%
39.3%
7.5%
5.7%
9.7%
10.1%
1.2
4.6
8.5%
5.8%
10.3%
10.1%
1.2
4.5
59.7%
64.0%
65.8%
68.9%
65.1%
67.2%
Notes: 1. During fiscal 2013, certain divisions of the EMC were included in the IAB due to a change in management categorizations.
2. Cash dividends per share represent the amounts applicable to the respective year, including dividends to be paid after the end of the fiscal year.
77
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy
At a Glance
Industrial Automation
Business (IAB)
Share of the Control-Related
Equipment Market (Japan): Approx.
40％
Source: Nippon Electric Control
Equipment Industries Association
■ Net Sales / Operating Income / Operating Income Margin
■ Net Sales ■ Operating Income ● Operating Income Margin (right axis)
(Billions of yen)
331.8
336.0
331.0
350.0
（%）
20
291.7
16.5%
263.0
13.3%
14.3%
15.7%
16.0%
11.9%
31.3
38.8
54.6
47.9
52.0
56.0
12
13
14
15
16
17 （Forecast）
Electronic and Mechanical
Components Business (EMC)
Share of the Relays
Market (Global): Approx.
20％
■ Net Sales / Operating Income / Operating Income Margin
■ Net Sales ■ Operating Income ● Operating Income Margin (right axis)
(Billions of yen)
97.7
103.9
103.7
93.9
94.0
8.9%
9.8%
8.2%
10.0%
9.6%
10
8.7
10.2
8.5
9.4
9.0
84.1
5.2%
4.4
12
13
14
15
16
17 （Forecast）
0
350
300
250
200
150
100
50
0
FY
120
100
80
60
40
20
0
FY
10
0
（%）
20
■ Capital Expenditures / Depreciation
and Amortization / R&D Expenses
● Capital Expenditures ● Depreciation and Amortization
● R&D Expenses
(Billions of yen)
20
15
10
5
0
FY
16.5
15.7
15.3
18.2
16.4
3.5
3.6
5.3
4.2
4.5
2.8
3.3
3.5
4.0
4.2
12
13
14
15
16
Source: Internal survey
■ Capital Expenditures / Depreciation
and Amortization / R&D Expenses
● Capital Expenditures ● Depreciation and Amortization
● R&D Expenses
(Billions of yen)
12
10
8
6
4
2
0
FY
10.9
7.8
6.0
8.9
7.4
5.2
9.5
8.0
5.4
8.9
8.3
4.9
7.9
6.5
4.6
12
13
14
15
16
Automotive Electronic
Components Business (AEC)
Share of the Body Control Units for
Miniature Vehicles Market (Japan): Approx.
50％
Source: Internal survey
■ Net Sales / Operating Income / Operating Income Margin
■ Net Sales ■ Operating Income ● Operating Income Margin (right axis)
(Billions of yen)
150
120
90
60
30
0
FY
126.6
7.2%
97.6
5.1%
137.9
140.0
132.1
131.0
6.7%
5.2%
5.4%
5.0%
5.0
9.1
9.2
7.3
7.1
6.5
12
13
14
15
16
17 （Forecast）
■ Capital Expenditures / Depreciation
and Amortization / R&D Expenses
● Capital Expenditures ● Depreciation and Amortization
● R&D Expenses
(Billions of yen)
10
8
6
4
2
0
FY
9.3
9.2
8.2
8.5
6.7
6.5
6.9
5.2
5.3
4.9
4.7
3.4
7.0
5.5
2.4
12
13
14
15
16
（%）
10
5
0
78
OMRON Corporation † During fiscal 2013, certain divisions of the EMC were included in the IAB due to a change in management categorizations.
We have revised our business classifications, reclassifying certain operations under SSB to the Other Businesses segment beginning
fiscal 2017.
† 2017 forecast was announced April 27.
Social Systems, Solutions and
Service Business (SSB)
Share of the Station Equipment
Market (Japan): Approx.
45％
■ Net Sales / Operating Income / Operating Income Margin
■ Net Sales ■ Operating Income ● Operating Income Margin (right axis)
Source: Internal survey
■ Capital Expenditures / Depreciation
and Amortization / R&D Expenses
● Capital Expenditures ● Depreciation and Amortization
(Billions of yen)
100
● R&D Expenses
（%）
10
(Billions of yen)
2.5
2.2
2.5
82.7
80.4
77.5
68.8
6.7%
6.2%
67.1
6.0%
63.5
6.3%
4.2%
4.1%
2.9
5.6
5.0
3.2
4.0
4.0
12
13
14
15
16
17 （Forecast）
2.0
1.5
1.0
0.5
0
FY
5
0
80
60
40
20
0
FY
1.5
1.5
2.1
1.7
2.2
1.6
1.5
1.8
1.4
1.4
1.4
1.2
1.1
12
13
14
15
16
Healthcare Business (HCB)
Share of the Home-Use Blood Pressure
Monitors Market (Global): Approx.
50％
Source: Internal survey
■ Net Sales / Operating Income / Operating Income Margin
■ Net Sales ■ Operating Income ● Operating Income Margin (right axis)
■ Capital Expenditures / Depreciation
and Amortization / R&D Expenses
● Capital Expenditures ● Depreciation and Amortization
(Billions of yen)
120
100
80
60
40
20
0
FY
8.5%
100.6
108.1
101.3
8.4%
105.0
9.0%
89.3
6.2%
71.5
6.5%
6.7%
4.4
7.5
6.5
7.3
8.5
9.5
12
13
14
15
16
17 （Forecast）
● R&D Expenses
（%）
10
(Billions of yen)
8
6.1
6.2
5.2
5.5
3.9
3.9
3.8
5.0
3.1
3.3
2.8
2.3
1.9
3.3
2.2
12
13
14
15
16
6
4
2
0
FY
5
0
Other Businesses
Share of the Residential-Use PV
Inverters Market (Japan): Approx.
40％
Source: Internal survey
■ Net Sales / Operating Income (Loss) / Operating Income Margin
■ Net Sales ■ Operating Income (Loss) ● Operating Income Margin (right axis)
(Billions of yen)
100
80
60
40
20
0
-20
FY
11.0%
73
78.9
87.4
9.6%
72
59.2
63.0
63.3
60.0
4.3%
2.5
8.7
8.4
12
13
14
15
16
17 （Forecast）
（4.1）
（2.1）
（1.0）
（%）
12
6
0
■ Capital Expenditures / Depreciation
and Amortization / R&D Expenses
● Capital Expenditures ● Depreciation and Amortization
● R&D Expenses
(Billions of yen)
8
6
4
2
0
FY
6.9
5.3
4.3
5.5
4.6
3.7
3.0
4.0
2.5
1.4
2.0
3.1
2.5
1.7
1.4
12
13
14
15
16
79
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy A Review of EARTH-1 STAGE Business Plan
(Fiscal 2014 to 2016)
The OMRON Group aims to become a value
generator for people and the Earth that is
qualitatively and quantitatively superior by
managing our businesses under Value
Generation 2020 (VG2020), our ten-year long-
term vision formulated in 2011. The EARTH-1
STAGE business plan, as the second stage of
VG2020, covered the fiscal years 2014 to 2016.
This plan defined a self-driven growth structure
by which OMRON can grow independently under
our own power in any operating environment.
During the three years of EARTH-1 STAGE, we
concentrated on (1) strategy for our existing
businesses, (2) super-global growth strategy, and
(3) new business strategy for the optimization
society. The following is a review of our progress.
In terms of executing strategy for our existing
businesses, we focused on maximizing the
strength of our Industrial Automation Business.
We improved our ability to provide technologies
to solve customer issues by expanding our
mainstay businesses in four focus industries and
by launching automation centers. We also
acquired U.S.-based companies in motion
■ Three Basic Strategies: Goals and Results
IA-related Business Sales
Emerging Economy Sales
New Business Sales
FY2016 Goals
Fiscal 2016 Results
¥440 billion
¥424.9 billion（-3%）
¥320 billion
¥274.3 billion（-14%）
¥90 billion
¥52.6 billion（-42%）
■ Net Sales
■ Gross Profit Margin (%)
：EARTH-1 STAGE Goals (published April 2014)
(Billions of yen)
847.3 833.6
794.2
773.0
650.5
619.5
FY
11
12
13
14
15
16
900
800
700
600
500
400
300
200
100
0
80
39.3
39.3
38.5
38.5
（%）
40.0
39.0
38.0
37.1
37.0
36.8
36.0
35.0
0
FY
11
12
13
14
15
16
OMRON Corporation controller and robot manufacturing, and took on
other initiatives to accelerate the creation of new
value and build a foundation for future business
growth. As a result, we accomplished our
EARTH-1 STAGE sales target for our Industrial
Automation Business.
In pursuit of our super-global growth strategy,
we achieved high growth rates in our Industrial
Automation Business and our Healthcare
Business, particularly in China and Asia. We held
OMRON Total Fairs in Thailand and Indonesia,
which led to a large number of new business
discussions. In our Healthcare Business, we
acquired a Brazilian nebulizer company and
engaged in other measures to grow sales
steadily throughout Central and South America.
Further, we strengthened our business
foundation by bolstering our production centers
in Mexico and Indonesia, as well as by hiring and
training core human resource leaders for our
businesses in Asia.
To optimize strategy for new businesses, we
pursued industry-academia partnerships,
alliances with other companies, and
collaborations with external resources to create
new businesses. However, we were not
successful in creating other businesses with the
scale and growth of our Environmental Solutions
Business.
As a result of the initiatives above, we
improved our earnings ability in the EARTH-1
STAGE, while accelerating the transition to a
business foundation supporting sustainable
revenue growth. We were also able to put our
Industrial Automation Business on a new growth
path. At the same time, due to the impact of
changes in the business environment and other
factors, we did not achieve either of our initial
quantitative goals of more than ¥900 billion in
sales and operating income margin of at least
10%. We do believe that we are on our way to
establishing a self-driven growth structure. Our
next medium-term business plan will continue
this theme.
■ Operating Income
■ ROIC
(Billions of yen)
90
80
70
60
50
40
30
20
10
0
86.6
68.1
67.6
62.3
45.3
40.1
FY
11
12
13
14
15
16
（%）
14.0
13.0
12.0
10.0
8.0
6.0
4.0
2.0
0
13.4
11.3
10.3
9.7
8.6
4.8
FY
11
12
13
14
15
16
81
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Fiscal 2016 in Review
Consolidated Earnings
Fiscal 2016 was the final year of EARTH-1
STAGE. During the year, our goals were to rebuild
our earnings structure and to create an engine for
self-driven growth. During the year, we worked to
rebuild our earnings structure, as well as to
generate businesses and innovations that drive
growth. Fiscal 2016 net sales decreased 4.7%
year on year to ¥794.2 billion. In addition to
growth in our mainstay Industrial Automation
Business, we also made strides in improving our
company-wide ability to generate earnings.
This improvement resulted in operating income
of ¥67.6 billion (8.5% increase year on year) and
operating income margin of 8.5% (1.0-point
increase).
Net income attributable to OMRON shareholders
amounted to ¥46.0 billion, which was 2.8%
lower than prior year. This decrease was primarily
due to restructuring in our Backlights Business.
Consolidated Statement of Income
Net Sales
OMRON Group net sales for fiscal 2016 fell to
¥794.2 billion, down 4.7% from the prior year.
This decrease owed in part to the negative
impact of yen appreciation. Overseas net sales
amounted to ¥463.8 billion, a ¥39 billion (7.8%)
decrease. Our divestment of a oil-related
business in the Americas and the impact of lower
Backlights Business sales in Greater China were
the major factors that combined to drive sales
down. OMRON recorded ¥330.4 billion in net
sales in Japan, a slight decrease of 0.1%.
Gross Profit Margin, SG&A Expenses, and
R&D Expenses
Gross profit margin for fiscal 2016 was 39.3%,
a 0.8-point increase compared to the prior fiscal
year. This improvement was mainly due to
ongoing efforts to improve variable cost ratios
and lower fixed manufacturing costs. Selling,
general and administrative expenses were
¥193.5 billion, down 5.9% from the prior year.
Research and development expenses amounted
to ¥50.7 billion, down 4.0%.
Operating Income, Income before Income Taxes
and Equity in Earnings of Affiliates, and Net
Income Attributable to OMRON Shareholders
OMRON Group operating income for the year was
¥67.6 billion (8.5% increase), while our operating
income margin was 8.5% (1.0-point increase).
Non-operating expenses, including impairments
and restructuring in our Backlights Business,
drove income before income taxes and equity in
earnings of affiliates down 0.3% to ¥65.5 billion.
Net income attributable to OMRON shareholders
amounted to ¥46.0 billion, down 2.8%.
82
OMRON Corporation Fiscal 2016 in Review
■ Consolidated Operating Income Analysis (YoY)
62.3
Added-value up
+17.7
Fixed
manufacturing
costs down
+0.6
SG&A down
+2.9
R&D down
+0.9
(Billions of yen)
67.6
Forex impact
-13.8
Special factors*
-3.0
Gross profit
(excluding forex impact)
+18.3
FY2015 Actual
*Provision for retirement benefits -2.0
Pro forma standard tax -1.0
FY2016 Actual
Review of Operations by Business Segment
Industrial Automation Business (IAB)
Our Industrial Automation Business recorded
domestic net sales of ¥133.5 billion for fiscal
2016, a 2.3% increase year on year. This result
was mainly due to higher sales in our digital and
other focus sectors. Sales were lower overseas,
mainly due to the divestment of an oil-related
business in the Americas. At the same time,
however, demand was solid in the automobile-
related industries. Sales increased in Europe year
on year, due to the contributions of a U.S.-based
subsidiary acquired by the OMRON Group. The
weak euro also led to strong demand for export
company products. In Greater China, demand
was strong in the digital, infrastructure, and
environmental-related industries. Increased digital
industry investment in South Korea helped spur
greater sales in Asia. However, the negative
impact of foreign exchange and other factors
resulted in overseas net sales falling 3.9% year
on year to ¥197.5 billion. While the segment
reported lower sales of ¥ 331.0 billion (1.5%
decrease) as a whole, ongoing efforts to add
more value to products resulted in higher gross
profit margin, leading to an 8.5% increase in
operating income at ¥52.0 billion.
Net sales
Japan
Overseas
Americas
Europe
Greater China
Asia Pacific
Direct exports
Operating income
Operating income margin
R&D expenses
Depreciation and amortization
Capital expenditures
FY2012
263.0
116.3
146.7
31.6
50.4
39.4
24.7
0.6
31.3
11.9%
16.5
3.5
2.8
FY2013
291.7
119.4
172.3
36.9
61.9
43.8
28.9
0.8
38.8
13.3%
15.7
3.6
3.3
FY2014
331.8
126.7
205.1
47.6
67.8
55.0
34.1
0.7
54.6
16.5%
15.3
3.5
4.2
FY2015
336.0
130.5
205.5
40.4
69.3
58.3
36.9
0.6
47.9
14.3%
18.2
4.0
5.3
FY2016
331.0
133.5
197.5
30.3
65.6
59.6
41.3
0.6
52.0
15.7%
16.4
4.2
4.5
(Billions of yen)
FY2017 (Forecast)
350.0
140.0
210.0
32.0
69.0
64.0
45.0
0.0
56.0
16.0%
83
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Electronic and Mechanical Components Business (EMC)
Domestic net sales for the segment decreased by
3.4% to ¥22.5 billion. This decrease was mainly
due to declining demand in the amusement
industry. Overseas, inventory adjustments among
our customers in the automotive-related industries
in the Americas resulted in lower demand. In
Europe, demand in automotive-related industries
was strong. In Greater China, demand in the
consumer and commercial products industries
decreased while demand was solid in the
automotive-related industries. In Asia, demand
was robust in both the consumer and commercial
product industries and the automobile-related
industries. Owing in part to the strong yen,
overseas net sales fell 11.1% to ¥71.5 billion,
while the segment as a whole recorded net sales
of ¥93.9 billion, a 9.4% decrease. Profits
improved over the prior fiscal year, mainly due to
productivity improvements enacted during fiscal
2015. Fiscal 2016 operating income amounted to
¥9.4 billion, a gain of 11.0%.
Net sales
Japan
Overseas
Americas
Europe
Greater China
Asia Pacific
Direct exports
Operating income
Operating income margin
R&D expenses
Depreciation and amortization
Capital expenditures
FY2012
84.1
26.7
57.4
13.1
11.3
24.6
7.1
1.4
4.4
5.2%
5.2
7.4
8.9
FY2013
97.7
28.1
69.6
16.6
14.7
28.7
8.7
0.9
8.7
8.9%
6.0
7.8
10.9
FY2014
103.9
23.9
80.0
18.1
15.9
35.0
10.1
0.9
10.2
9.8%
5.4
8.0
9.5
FY2015
103.7
23.2
80.5
19.9
16.1
33.6
10.4
0.5
8.5
8.2%
4.9
8.3
8.9
FY2016
93.9
22.5
71.4
16.3
14.8
29.0
11.3
0.1
9.4
10.0%
4.6
7.9
6.5
Automotive Electronic Components Business (AEC)
(Billions of yen)
FY2017 (Forecast)
94.0
21.5
72.5
15.5
14.5
30.0
12.5
0.0
9.0
9.6%
In Japan, net sales decreased 10.0% to ¥19.0
billion. This was mainly the result of declining
production of mini vehicles (Kei cars). Overseas
sales amounted to ¥113.1 billion, a decrease of
4.9%. Economic growth in the U.S. drove demand
growth in the Americas. At the same time,
government tax breaks in Greater China resulted
in strong sales and demand for automobile-related
products in that region. Despite these positive
factors, the appreciation of the yen had a major
negative impact on overseas results. As a result,
sales for the segment as a whole fell to ¥132.1
billion, down 5.6% for the year. Operating income
fell 2.9% to ¥7.1 billion, mainly due to lower sales
for the segment.
Net sales
Japan
Overseas
Americas
Europe
Greater China
Asia Pacific
Direct exports
Operating income
Operating income margin
R&D expenses
Depreciation and amortization
Capital expenditures
FY2012
97.6
30.2
67.4
25.0
2.8
13.9
19.5
6.2
5.0
5.1%
7.0
2.4
5.5
FY2013
126.6
28.4
98.2
33.3
3.3
25.4
29.2
7.2
9.1
7.2%
8.2
3.4
6.7
FY2014
137.9
25.9
112.0
39.3
3.6
29.9
32.2
7.1
9.2
6.7%
8.5
4.7
6.5
FY2015
140.0
21.1
118.9
47.6
4.6
27.4
31.9
7.3
7.3
5.2%
9.3
5.3
6.9
FY2016
132.1
19.0
113.1
43.9
3.9
28.0
30.1
7.2
7.1
5.4%
9.2
4.9
5.2
(Billions of yen)
FY2017 (Forecast)
131.0
15.5
115.5
42.0
3.0
30.0
32.5
8.0
6.5
5.0%
84
OMRON Corporation Social Systems, Solutions and Service Business (SSB)
Sales in our public transportation business
declined significantly compared to the prior year,
as the demand cycle for upgrading station
equipment reached a low point during fiscal 2016.
Demand for both upgrades to traffic-related
terminals and investment in expressways
was weak. As a result, sales in the traffic and road
management system business also decreased
compared with the previous fiscal year. Further,
demand fell in the solar power and related
markets, driving down performance in the
environmental solutions business significantly. As
a result, segment net sales fell 13.4% to ¥67.1
billion. Despite lower sales for the year, fiscal
2016 operating income was significantly higher,
increasing 25.3% to ¥4.0 billion. This result was
mainly due to productivity improvement
initiatives.
Net sales
Japan
Overseas
Americas
Europe
Greater China
Asia Pacific
Direct exports
Operating income
Operating income margin
R&D expenses
Depreciation and amortization
Capital expenditures
FY2012
68.8
68.5
0.3
0.0
0.0
0.1
0.0
0.2
2.9
4.2%
2.2
1.1
1.5
FY2013
82.7
82.4
0.3
0.0
0.0
0.2
0.0
0.1
5.6
6.7%
2.5
1.2
1.5
FY2014
80.4
79.1
1.3
0.0
0.0
0.3
0.0
1.1
5.0
6.2%
2.1
1.4
1.7
FY2015
77.5
75.7
1.8
0.0
0.0
0.6
0.0
1.2
3.2
4.1%
2.2
1.6
1.5
FY2016
67.1
66.5
0.6
0.0
0.0
0.3
0.0
0.3
4.0
6.0%
1.8
1.4
1.4
(Billions of yen)
FY2017 (Forecast)
63.5
62.0
1.5
0.0
0.0
0.5
0.0
1.0
4.0
6.3%
† We have revised our business classification, reclassifying certain operations under SSB to the Other Business segment beginning with fiscal 2017.
Healthcare Business (HCB)
Despite steady growth in sales of online home-
use healthcare equipment in Japan, demand for
these products was weak at big home appliance
retailers in suburban areas. Sales of institutional
equipment decreased, primarily due to the
transfer of shares of a medical equipment
subsidiary. As a result, sales in Japan fell to ¥28.9
billion, a decrease of 7.1% for the year. Overseas,
sales of blood pressure monitors in Brazil were
strong. In addition to sales of new blood pressure
monitor products in Russia, the expansion of
dealer networks throughout Europe contributed to
ongoing solid performance throughout the region.
In Greater China, the online market continued to
expand while demand in pharmacies and other
store channels was weak. Demand was strong in
Asia. Despite these positive factors, the strong
yen had a major negative impact on overseas
results, driving sales down 6.0% for the year to
¥72.4 billion. Segment sales amounted to ¥101.3
billion, down 6.3%. However, productivity
improvements and other initiatives combined for
significant profit gains. As a result, operating
income amounted to ¥8.5 billion, up 17.2%.
Net sales
Japan
Overseas
Americas
Europe
Greater China
Asia Pacific
Direct exports
Operating income
Operating income margin
R&D expenses
Depreciation and amortization
Capital expenditures
FY2012
71.5
29.5
42.0
10.8
15.9
11.1
3.5
0.7
4.4
6.2%
5.0
1.9
3.1
FY2013
89.3
30.8
58.5
14.3
21.0
17.3
5.5
0.4
7.5
8.5%
5.2
2.3
3.9
FY2014
100.6
31.4
69.2
18.6
21.2
22.4
6.6
0.5
6.5
6.5%
5.5
3.3
3.9
FY2015
108.1
31.1
77.0
23.1
19.2
25.4
8.9
0.5
7.3
6.7%
6.1
3.8
2.8
FY2016
101.3
28.9
72.4
21.7
18.3
23.1
9.0
0.3
8.5
8.4%
6.2
3.3
2.2
(Billions of yen)
FY2017 (Forecast)
1,05.0
27.0
78.0
22.5
18.5
25.5
11.0
0.5
9.5
9.0%
85
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Other Businesses
Sales decreased significantly for the year, mainly
due to performance in our Backlights Business,
affected by falling prices in the smartphone
market and weak demand for high-end
smartphones in Greater China. While our
Environmental Solutions Business continued to
experience weak demand in the solar power
generation-related market, expanded product
offerings in storage batteries contributed to year-
on-year sales gains. In our Electronic Systems and
Equipment Business, demand was strong for
uninterruptible power supply units and contract
services for the development and production of
electronic devices. Accordingly, sales increased
compared to the prior fiscal year. Due to weak
demand for smartphone microphones, sales in our
Micro Devices Business fell year on year. The
Other Businesses segment as a whole, recorded
¥63.3 billion in net sales, an increase of 0.4% year
on year. The segment recorded an operating loss
of ¥2.1 billion, narrowing losses compared to the
prior year, primarily due to more effective controls
over fixed costs.
Net sales
Japan
Overseas
Americas
Europe
Greater China
Asia Pacific
Direct exports
Operating income (loss)
Operating income margin
R&D expenses
Depreciation and amortization
Capital expenditures
FY2012
59.2
41.4
17.8
0.0
0.0
16.3
0.0
1.5
2.5
4.3%
3.0
1.4
2.5
FY2013
78.9
51.0
27.9
0.0
0.0
25.6
0.0
2.3
8.7
11.0%
4.3
2.0
4.0
FY2014
87.4
45.8
41.6
0.0
0.0
38.2
0.0
3.4
8.4
9.6%
5.5
2.5
6.9
FY2015
63.0
44.0
19.0
0.0
0.0
17.1
0.0
1.9
（4.1）
̶
4.6
3.1
5.3
FY2016
63.3
55.0
8.3
0.0
0.0
7.3
0.0
1.0
（2.1）
̶
3.7
1.7
1.4
(Billions of yen)
FY2017 (Forecast)
60.0
53.5
6.5
0.0
0.0
6.0
0.0
0.5
（1.0）
̶
† We have revised our business classification, reclassifying certain operations under SSB to the Other Business segment beginning with fiscal 2017.
Review of Financial Condition
Total assets at the end of fiscal 2016 amounted to
¥697.7 billion, an increase of ¥14.4 billion
compared to the end of the prior fiscal year. This
increase stems from an increase in cash and cash
equivalents of ¥43.1 billion.
Total liabilities decreased ¥9.3 billion to ¥226.9
billion. While current liabilities increased ¥9.4
billion compared to the end of the prior fiscal year,
termination and retirement benefits decreased by
¥18.6 billion.
Net assets increased ¥23.7 billion to ¥470.8
billion. Net income attributable to OMRON
shareholders and other factors led to an increase
in retained earnings of ¥28.8 billion. As a result,
shareholders’ equity amounted to ¥469.0 billion
(year-on-year increase of ¥24.3 billion), while
shareholders’ equity ratio increased 2.1 points to
67.2%. This decrease in liabilities and increase in
shareholders’ equity resulted in a debt-equity ratio
of 0.48, an improvement of 0.05 points.
86
OMRON Corporation Capital Expenditures
The OMRON Group made ¥25.7 billion in total
capital investments during fiscal 2016,
representing a 30.3% decrease compared to the
prior fiscal year. The Group engaged in a deliberate
approach to investment, performing due diligence
of each project in light of the negative impact of
yen appreciation and other factors contributing to
an uncertain business environment.
Cash Flows
Cash and cash equivalents as of the end of fiscal
2016 amounted to ¥126.0 billion, an increase of
¥43.1 billion compared to the end of the prior
fiscal year. Net cash provided by operating
activities amounted to ¥77.9 billion. This was a
decrease of ¥6.3 billion compared to the prior
fiscal year, mainly due to decreases in net income
(¥46.3 billion, decrease of ¥1.4 billion year on year)
and depreciation and amortization (¥29.0 billion,
decrease of ¥2.5 billion). Net cash used in
investing activities amounted to ¥15.0 billion. This
was a decrease of ¥52.1 billion in outlays, mainly
Dividend Policy
Our policy for profit distribution is to prioritize
investment in R&D necessary for ongoing
corporate value improvement, capital expenditures,
and M&A. At the same, we strive for stable,
consistent returns for our shareholders. Our
medium-term business plan through fiscal 2016
called for raising our payout ratio to 30%.
due to lower capital expenditures (¥25.8 billion,
decrease of ¥12.1 billion year on year), the sale of
a Group business (¥7.2 billion), and other factors.
Free cash flow (total of net cash provided by
operating activities and net cash used in investing
activities) amounted to ¥62.8 billion, increased
¥45.7 billion versus the prior fiscal year. Net cash
used in financing activities amounted to ¥15.0
billion, a decrease in outlays of ¥16.5 billion. The
OMRON Group paid ¥14.5 billion in dividends
(¥1.5 billion decrease compared to fiscal 2015).
We achieved this goal one year ahead of plan in
fiscal 2015. Our payout ratio for fiscal 2016 was
31.6%, a 0.5-point increase compared to the prior
fiscal year. Our dividend on equity ratio was 3.2%,
which was a 0.1-point increase compared to the
prior fiscal year.
87
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Outlook for Fiscal 2017
Consolidated Earnings
While the global economic environment for fiscal
2017 remains in a moderate recovery, uncertainty
will continue, depending on the impact of the
direction of economic policies of the U.S. and
Europe. In the OMRON Group's major markets in
Japan, we expect firm demand for capital
investment, mainly in the automobile and digital
industries. Overseas, activity in the U.S.
automobile-related market is expected to
decelerate. However, we expect continued strong
consumer spending and capital investment.
In Europe, growing consumer spending should
result in a gradual recovery for corporate capital
investment. In China, recovery of consumer
spending is likely to enter a lull. On the other
hand, the effects of expanded government
investment and other policies are likely to
continue, resulting in a steady recovery. In Asia,
Korea shows signs of a decline in capital
investment growth. At the same time, we expect
the economies of Thailand and India to recover.
Facing this environment, the OMRON Group will
launch our new medium-term business plan,
VG2.0, in fiscal 2017. Our qualitative goal toward
fiscal 2020 is to become a value generator for
people and the Earth that is qualitatively and
quantitatively superior. Our quantitative goals are
to reach ¥1 trillion in net sales and ¥100 billion in
operating income. The next basic policy will be
known as ~Start up VG2.0~ A Firm First Step
Toward Innovation. During the first year of our
medium-term business plan, we plan to invest
actively in our future to create a foundation for
growth. Our fiscal 2017 plan calls for net sales of
¥810.0 billion (2.0% increase versus fiscal 2016),
operating income of ¥68.0 billion (0.6% increase),
and net income attributable to OMRON
shareholders of ¥48.5 billion (5.5% increase). We
plan to raise gross profit margin, an indicator of our
earnings ability, to 40.6% (1.4-point increase year
on year). Finally, our target for the important ROIC
and ROE indicators is 10% or higher in each.
Industrial Automation Business
(IAB)
In Japan, we anticipate firm demand for capital
investment, particularly in the automobile and
digital industries, to drive year-on-year growth in
sales. Overseas, the digital industry should lead in
continued firm demand for capital investment,
combined with increasing demand for investment
in automation, labor-saving, and information
technology to drive sales higher year on year. As a
result, the IAB forecasts net sales of ¥350.0 billion
for fiscal 2017, a 5.8% increase year on year. With
ongoing investment in growth, higher sales, and
improved gross profit margin, we expect
operating income to amount to ¥56.0 billion (7.7%
increase).
Electronic and Mechanical
Components Business (EMC)
In Japan, the EMC expects demand for
automobile-related industries and consumer and
commercial product industries to be level with the
previous year. Demand for amusement industry
spending will likely remain weak, leading to a
reduced revenue plan for fiscal 2017. Overseas,
we expect demand for consumer and commercial
product industries in the U.S. and Europe will
remain firm, while the electricity-related business
should grow in Asia. While demand in the
automobile-related industries in Asia and China
should be strong, we expect waning demand in
other regions. As a result, the EMC forecasts net
sales of ¥94.0 billion (0.1% increase year on year).
We expect operating income to amount to ¥9.0
billion (4.5% decrease), mainly due a temporary
increase in expenses related to productivity
improvements.
88
OMRON Corporation Outlook for Fiscal 2017
economies of the world, particularly in Asia,
should see healthy demand for related products.
Accordingly, we forecast higher overseas sales
for fiscal 2017. As a result, the HCB forecasts
net sales of ¥105.0 billion for fiscal 2017 (3.7%
increase) and operating income of ¥9.5 billion
(11.3% increase).
Other Businesses (Businesses
under the Direct Control of
Headquarters)
We forecast lower sales in our Backlights
Business due to business optimization. Despite
sluggish demand for the industrial sector of the
solar power-related market, we expect that
strong demand for storage batteries and related
products will generate year-on-year sales growth
in our Environmental Solutions Business for
fiscal 2017. We plan for higher sales in our
Electric Systems and Equipment Business,
mainly due to an expanded lineup of
uninterruptible power supply products. In our
Micro Devices Business, we forecast a
significant decline in fiscal 2017 sales, impacted
negatively by lower sales of products for
smartphone microphones. As a result, the Other
Businesses segment forecasts fiscal 2017 net
sales of ¥60.0 billion (12.4% decrease year on
year) and operating loss of ¥1.0 billion. This
operating loss represents a ¥900 million
improvement compared to fiscal 2016 operating
losses due to the impact of optimization in our
businesses.
* Comparisons to fiscal 2016 figures are calculated on revised business
classifications for fiscal 2016 actuals (¥68.5 billion in net sales, ¥1.8
billion in operating loss).
Automotive Electronic
Components Business (AEC)
In Japan, we expect to see significant declines in
vehicles equipped with OMRON Group products.
Overseas, we forecast decreases in vehicle
models equipped with Omron Group products and
slower demand in North America. However, firm
demand in Korea and China, should result in
higher sales overseas as a whole. The AEC
forecasts net sales of ¥131.0 billion (0.8% year on
year decrease), with operating income of ¥6.5
billion, 8.8% lower owing to investment in growth
projects.
Social Systems, Solutions and
Service Business (SSB)
The SSB segment projects lower sales in its train
station solutions business due to reaching a low
point in the cycle for upgraded station equipment.
The traffic and road management system
business will likely generate higher sales based on
demand for traffic-related terminal upgrades and
investment in expressways. Combining these
factors, the SSB forecasts net sales of ¥63.5
billion (2.6% increase year on year) and operating
income of ¥4.0 billion (8.5% increase).
* Comparisons to fiscal 2016 figures are calculated on revised business
classifications for fiscal 2016 actuals (¥61.9 billion in net sales, ¥3.7 billion in
operating income).
Healthcare Business (HCB)
In Japan, the increase in individuals suffering from
lifestyle diseases associated with an aging society
and greater interest in health lead us to anticipate
growth in medical equipment sales. However,
since we have transferred shares of our medical
equipment subsidiary to another company, we
project lower sales for fiscal 2017. Overseas,
economic growth is spurring lifestyle changes and
an increase in interest in health. The emerging
89
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Consolidated Balance Sheets
OMRON Corporation and Subsidiaries
March 31, 2016 and 2017
ASSETS
Current Assets:
Cash and cash equivalents
Notes and accounts receivable - trade
Allowance for doubtful receivables
Inventories
Deferred income taxes
Other current assets
Total Current Assets
Property, Plant and Equipment:
Land
Buildings
Machinery and equipment
Construction in progress
Total
Accumulated depreciation
Net Property, Plant and Equipment
Investments and Other Assets:
Goodwill
Investments in and advances to affiliates
Investment securities
Leasehold deposits
Deferred income taxes
Other assets
FY2015
FY2016
(Millions of yen)
¥82,910
165,093
(1,654)
107,267
18,469
17,524
389,609
26,376
146,412
204,499
6,142
383,429
(236,864)
146,565
30,253
25,048
37,055
6,758
22,080
25,957
¥126,026
169,210
(1,320)
109,404
19,123
13,461
435,904
25,550
141,527
189,286
6,104
362,467
(234,852)
127,615
30,385
25,303
27,006
6,907
21,101
23,480
Total Investments and Other Assets
147,151
134,182
Total
¥683,325
¥697,701
90
OMRON Corporation
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes and accounts payable - trade
Accrued expenses
Income taxes payable
Other current liabilities
Total Current Liabilities
Deferred Income Taxes
Termination and Retirement Benefits
Other Long-Term Liabilities
Total Liabilities
Shareholders’ Equity:
Capital
Common stock
Authorized: 487,000,000 shares in FY2016
487,000,000 shares in FY2015
Issued: 213,958,172 shares in FY2016
213,958,172 shares in FY2015
Capital surplus
Legal reserve
Retained earnings
Accumulated other comprehensive income (loss)
Treasury stock
152,836 shares in FY2016
149,398 shares in FY2015
Total Shareholders' Equity
Noncontrolling Interests
Total Net Assets
Total
FY2015
FY2016
(Millions of yen)
¥82,606
37,975
6,890
35,192
162,663
660
62,289
10,679
236,291
¥89,362
39,354
6,994
36,371
172,081
763
43,708
10,392
226,944
64,100
64,100
99,101
15,194
317,171
(50,204)
(644)
99,138
17,813
346,000
(57,363)
(659)
444,718
469,029
2,316
447,034
1,728
470,757
¥683,325
¥697,701
91
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy
Consolidated Statements of Income
OMRON Corporation and Subsidiaries
Years ended March 31, 2015, 2016 and 2017
Net Sales
Costs and Expenses:
Cost of sales
Selling, general and administrative expenses
Research and development expenses
Other expenses (income), net
Total
Income before Income Taxes and Equity in Earnings of Affiliates
Income Taxes
Equity in Earnings of Affiliates
Net Income
Net Income Attributable to Noncontrolling Interests
FY2014
¥847,252
FY2015
¥833,604
(Millions of yen)
FY2016
¥794,201
514,645
198,103
47,913
(797)
759,864
87,388
28,893
(3,937)
62,432
262
512,792
205,735
52,790
(3,399)
767,918
65,686
20,043
(2,039)
47,682
392
482,399
193,539
50,697
2,074
728,709
65,492
19,882
(712)
46,322
335
Net Income Attributable to OMRON Shareholders
¥62,170
¥47,290
¥45,987
Per Share Data:
Net income Attributable to OMRON Shareholders:
Basic
Diluted
FY2014
FY2015
FY2016
(Yen)
¥283.89
283.89
¥218.95
218.95
¥215.09
215.09
92
OMRON Corporation
Consolidated Statements of Comprehensive Income
OMRON Corporation and Subsidiaries
Years ended March 31, 2015, 2016 and 2017
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 (loss)
Pension liability adjustments:
Pension liability adjustments arising during the year
Reclassification adjustment for the portion realized in net income
Net unrealized gain (loss)
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during the year
Reclassification adjustment for the portion realized in net income
Net unrealized gain (loss)
Net gains (losses) on derivative instruments:
Unrealized holding gains (losses) arising during the year
Reclassification adjustment for the portion realized in net income
Net unrealized gain (loss)
Other Comprehensive Income (Loss)
Comprehensive Income (Loss)
Comprehensive Income Attributable to Noncontrolling Interests
FY2014
¥62,432
FY2015
¥47,682
FY2016
¥46,322
(Millions of yen)
21,846
−
21,846
227
1,316
1,543
7,074
(3,062)
4,012
(656)
975
319
27,720
90,152
331
(23,916)
−
(23,916)
(29,525)
1,486
(28,039)
(5,776)
(4,818)
(10,594)
658
(946)
(288)
(62,837)
(15,155)
248
(9,003)
(7)
(9,010)
4,908
3,046
7,954
1,164
(7,283)
(6,119)
983
(1,109)
(126)
(7,301)
39,021
193
Comprehensive Income (Loss) Attributable to OMRON Shareholders
¥89,821
¥(15,403)
¥38,828
93
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy
Consolidated Statements of Shareholders’ Equity
OMRON Corporation and Subsidiaries
Years ended March 31, 2015, 2016 and 2017
Number of
common shares
issued
Common
stock
Capital
surplus
Legal
reserve
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Treasury
stock
Total
shareholders'
equity
Noncontrolling
interests
Total net
assets
(Millions of yen)
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
Net income
Cash dividends paid to
OMRON Corporation
shareholders, ¥71 per
share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
and other
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury
stock
Sale of treasury stock
Retirement of treasury
stock
Issuance of stock
acquisition right
62,170
(15,513)
2,207
(2,207)
62,170
262
62,432
(15,513)
(15,513)
̶
̶
̶
(277)
(277)
2
2
̶
27,651
27,651
69
27,720
(15,054)
(15,054)
(15,054)
(9,723,500)
0
(2)
5
(31,129)
1
31,131
1
̶
5
1
̶
5
Balance, March 31, 2015
217,397,872
64,100
99,070
13,403
301,174
12,489
(467)
489,769
2,325
492,094
Net income
Cash dividends paid to
OMRON Corporation
shareholders, ¥68 per
share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
and other
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury
stock
Sale of treasury stock
Retirement of treasury
stock
(3,439,700)
Issuance of stock
acquisition right
47,290
(14,656)
1,791
(1,791)
47,290
392
47,682
(14,656)
(14,656)
̶
̶
̶
(256)
(256)
(1)
(1)
̶
(62,693)
(62,693)
(144)
(62,837)
(15,023)
(15,023)
(15,023)
0
31
(14,846)
0
14,846
0
̶
31
0
̶
31
Balance, March 31, 2016
213,958,172
64,100
99,101
15,194
317,171
(50,204)
(644)
444,718
2,316
447,034
Net income
Cash dividends paid to
OMRON Corporation
shareholders, ¥68 per
share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
and other
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury
stock
Sale of treasury stock
Issuance of stock
acquisition right
45,987
(14,539)
14
23
2,619
(2,619)
(0)
45,987
335
46,322
(14,539)
(14,539)
̶
14
̶
(297)
(297)
(484)
(470)
̶
(7,159)
(7,159)
(142)
(7,301)
(16)
1
(16)
1
23
(16)
1
23
Balance, March 31, 2017
213,958,172
¥64,100
¥99,138
¥17,813
¥346,000
¥(57,363)
¥(659)
¥469,029
¥1,728
¥470,757
94
OMRON Corporation
Consolidated Statements of Cash Flows
OMRON Corporation and Subsidiaries
Years ended March 31, 2015, 2016 and 2017
Operating Activities:
Net income
Adjustments to reconcile net income to net cash provided
by operating activities:
FY2014
FY2015
FY2016
(Millions of yen)
¥62,432
¥47,682
¥46,322
Depreciation and amortization
28,339
31,460
28,966
Net loss (gain) on sale and disposals of property, plant
and equipment
Impairment losses on long-lived assets
Net gain on sale of investment securities
Impairment losses on investment securities
Gain on contribution of securities to retirement benefit trust
Termination and retirement benefits
Deferred income taxes
Equity in earnings of affiliates
Gain on sale of business
Changes in assets and liabilities:
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in income taxes payable
Increase (decrease) 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
Proceeds from sale of business, net of cash paid
Acquisition of business, net of cash acquired
Other, net
Net cash used in investing activities
Financing Activities:
Net borrowings (repayments) of short-term debt
Dividends paid by the Company
Dividends paid to noncontrolling interests
Payments for equity transactions with noncontrolling interests
Acquisition of treasury stock
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
3,432
137
(4,337)
166
̶
(17,427)
11,938
(3,937)
̶
3,384
(10,671)
(2,828)
1,658
(3,127)
6,318
1,580
14,625
77,057
5,274
(603)
(37,123)
118
768
(30)
̶
(8,003)
82
(39,517)
(853)
(12,985)
(277)
̶
(15,054)
(134)
(29,303)
4,134
12,371
90,251
Cash and Cash Equivalents at End of the Year
¥102,622
(485)
463
(1,499)
68
(4,140)
698
2,283
(2,039)
̶
9,436
6,061
1,003
(7,189)
3,433
(4,614)
1,586
36,525
84,207
2,214
(330)
(37,903)
115
2,239
(20)
̶
(33,448)
17
(67,116)
2
(16,077)
(256)
̶
(15,023)
(196)
(31,550)
(5,253)
(19,712)
102,622
¥82,910
705
12,998
(3,764)
558
(7,004)
2,863
11
(712)
(3,686)
(8,923)
(7,112)
2,604
8,384
852
5,097
(284)
31,553
77,875
4,606
(3,274)
(25,816)
(145)
2,278
30
7,187
̶
93
(15,041)
155
(14,539)
(297)
(470)
(16)
155
(15,012)
(4,706)
43,116
82,910
¥126,026
95
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy The Year in Review
For OMRON, fiscal 2016 was a year for promoting portfolio management, building a stronger foundation for
growth, and improving our earnings structure. To realize dramatic growth, we reinforced our business
foundations, particularly for the Industrial Automation Business and Healthcare Business.
Management and Business
May 2016
Completed sale of U.S.-based
OMRON Oilfield and Marine Inc.
http://www.omron.com/media/
press/2016/06/c0603.html
June 2016
OMRON Healthcare signed a
partnership with Fukuda Denshi,
and agreed to transfer shares in
OMRON Colin (concluded December
2016)
http://www.omron.com/media/
press/2016/06/h0609.html
2016
September 2016
Included in the Dow Jones
Sustainability Asia/Pacific Index
for 7th consecutive year
http://www.omron.com/media/
press/2016/09/c0909.html
June 2016
Selected for inclusion in the
FTSE4Good Index Series
http://www.omron.com/media/
press/2016/06/c0621_2.html
FTSE4Good is an investment
index designed to promote
investment in corporations
meeting global ESG standards.
April−May
June
July
August
September
October
November
December
January
February
March
April
June 2016
Develops world’s
first advanced AI
onboard sensor to detect
driver status in real time
http://www.omron.com/
media/press/2016/06/
c0606.html
July 2016
Introduced first FA equipment compatible
with IO-Link Integrated FA and ICT for
smarter production facilities
http://www.omron.com/
media/press/2016/
06/c0630.html
Released new Industrial PC Platform, making
production sites integrated and intelligent
http://www.omron.com/media/press/2016/07/c0727.
html
August 2016
Simultaneously
introduced new image
sensing unit around the world;
speed of human condition
recognition 10x greater than
previous models
http://www.omron.com/media/
press/2016/08/c0824.html
Products and Services
96
OMRON Corporation Industrial Automation
Business (IAB)
Social Systems, Solutions and
Service Business (SSB)
Electronic and Mechanical
Components Business (EMC)
Automotive Electronic
Components Business (AEC)
Healthcare Business (HCB)
Other Businesses
January 2017
Named 2016 Top 100 Global
Innovator; recognized as one of the
top 100 most innovative companies
in the world
April 2017
Entered an agreement to
acquire Sentech Co., Ltd.,
a manufacturer of machine vision
systems for industrial applications
and cameras for various medical
and laboratory applications
(concluded July 2017)
http://www.omron.com/media/
press/2017/04/c0427.html
February 2017
OMRON Corporation and
OMRON Healthcare Co., Ltd.
selected among White 500
for Outstanding Health and
Productivity Management
April−May
June
July
August
September
October
November
December
January
February
March
April
2017
November 2016
Cumulative sales of
home-use blood pressure
monitors topped 200 million units
worldwide
http://www.omron.com/media/
press/2016/12/h1205.html
December 2016
Introduced KPM2 Series
outdoor single-phase PV
inverter; more functionality
supporting improved solar power
system generation
volume
January 2017
Launched AI-equipped
Mobile Robot LD Series;
offers flexible, easily
programmable, and automated
transportation
http://www.omron.com/media/
press/2016/10/c1003_2.html
March 2017
Introduced HEM-7600T upper
arm blood pressure monitor;
integrates unit and arm cuff for smooth
operation from application to
measurement
Introduced IoT-compatible
tri-axis accelerometer;
measures direct vibrations on
buildings, bridge pillars, etc., during
earthquakes for optimum maintenance
and prevention
97
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Corporate Information As of March 31, 2017
Overseas Headquarters
Major Manufacturing & Development, Sales & Marketing,
and Research & Development Centers in Japan
Established
May 10, 1933
Incorporated
May 19, 1948
Capital
¥64,100 million
Number of Employees
(Consolidated)
36,008
Common Stock
Issued
213,958 thousand shares
Trading Unit
100 shares
Number of Shareholders
36,277
Stock Listings
Tokyo Stock Exchange,
Frankfurt Stock Exchange
Securities Code
6645
Fiscal Year-End
March 31
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
North America
OMRON MANAGEMENT
CENTER OF AMERICA
(Illinois)
Brazil
OMRON MANAGEMENT
CENTER OF BRAZIL
(São Paulo)
Europe
OMRON MANAGEMENT
CENTER OF EUROPE
(The Netherlands)
Greater China
OMRON MANAGEMENT
CENTER OF CHINA
(Shanghai)
Asia Pacific
OMRON MANAGEMENT
CENTER OF ASIA
PACIFIC (Singapore)
India
OMRON MANAGEMENT
CENTER OF INDIA
(Haryana)
Korea
OMRON MANAGEMENT
CENTER OF KOREA
(Seoul)
●
Manufacturing & Development
Kusatsu Office
Ayabe Office
Yasu Office
Research & Development
Keihanna Technology Innovation Center
Okayama Office
Sales & Marketing
Tokyo Office
Mishima Office
Nagoya Office
Osaka Office
●
●
●●
●
●
●
●
●
●
●
●
●
●
●
●
Coverage in ESG Indexes
Recognizing our commitment to sustainability, OMRON is a constituent member of major ESG indexes as below.
Overseas, we have been included for the seventh consecutive year in the Dow Jones Sustainability Asia/Pacific Index. We have also been
included for the third consecutive year in the MSCI Global Sustainability Indexes, and have been selected again this year in the FTSE4Good
Index Series and STOXX Global ESG Leaders Index. In Japan, we have been covered under the Morningstar Socially Responsible Investment
Index every year since the index was first published in 2003.
FTSE4Good is an investment index designed
to promote investment in corporations meeting
global ESG standards.
THE INCLUSION OF OMRON CORPORATION IN ANY MSCI INDEX, AND THE USE
OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN,
DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF
OMRON Corporation BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES
ARE THE EXCLUSIVE PROPERTY OF MSCI.
MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR
SERVICE MARKS OF MSCI OR ITS AFFILIATES.
98
OMRON Corporation
Stock Information
■ Total Shareholder Return (TSR*1) Tokyo Stock Exchange
Daily Trading Volume
OMRON
TOPIX
TOPIX Electric Appliances
TSR (Annualized rate)
Holding Period
OMRON
TOPIX
TOPIX Electric Appliances
3 years
6%
10%
11%
5 years
25%
15%
14%
10 years
6%
0%
0%
（Index）
250
200
150
100
50
0
(1,000 Shares)
2,000
1,600
1,200
800
400
0
2007/3
2008/3
2009/3
2010/3
2011/3
2012/3
2013/3
2014/3
2015/3
2016/3
2017/3
† Share index (2007/3E = 100)
† 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.
† TSR holding period indexed to March 2017
*1 TSR: Total investment return, combining capital gains and dividends
■ 52-Week High / Low, Volatility*2
■ Dividends per Share / Payout Ratio
FY
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
High (¥)
Low (¥)
Volatility (%)
5,120
5,900
5,800
4,730
2,478
2,357
2,418
2,215
2,385
3,510
3,045
2,742
3,365
2,213
1,436
1,381
1,749
1,132
940
1,950
32.5
40.0
30.9
39.7
29.9
36.5
34.7
35.9
52.4
36.3
FY
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
Dividends per Share (¥)
Payout Ratio (%)
68
68
71
53
37*3
28
30
17
25
42*4
31.6
31.1
25.0
25.3
27.0
37.6
24.7
106.4
―
22.6
*2 Volatility: Price fluctuation risk expressed in standard deviations
*3 Including ¥5.0 per share of 80th anniversary memorial dividend
*4 Including ¥5.0 per share of 75th anniversary memorial dividend
■ Ownership and Distribution of Shares
（%）
100
80
60
40
20
0
12.4%
14.4%
12.4%
47.6%
45.2%
47.5%
5.7%
1.8%
5.8%
0.9%
5.7%
1.1%
32.5%
33.7%
33.3%
2014
2015
2016
（FYE）
Individuals and
others
Foreign investors
Other
corporations
Financial instru-
ments dealers
Financial
institutions
■ Shareholder Distribution by Number of
Shares Held
(Trading unit: 100 shares)
100 to less than1,000
1.4%
10 to less
than 100
15.9%
1,000 to less than 5,000
0.4%
More than
5,000
0.2%
36,277
Shareholders
Less than 10
82.1%
99
Integrated Report 2017OverviewVisionGovernanceFinancial InformationStrategy Independent Practitioner’s Assurance
To enhance the reliability of the information presented in Integrated Report 2017, the following information
associated with the social and environmental performance in this report was reviewed by independent third
parties*.
* Deloitte Tohmatsu Sustainability Co., Ltd.: A related company of Deloitte Touche Tohmatsu LLC, a member firm of Deloitte Touche Tohmatsu Limited.
* Bureau Veritas Japan Co., Ltd.
Scope of Independent Practitioner’s
Assurance Report
● Ratio of non-Japanese in managerial positions
overseas (P22)
● Ratio of women in managerial roles (OMRON
Group in Japan) (P22)
● Ratio of employees with disabilities (P22)
Scope of Independent Practitioner’s
Assurance Report
● Environmental contribution (P23)
● Net sales to CO2 emissions (P23)
100
OMRON Corporation From the Editor-in-Chief
Fiscal 2017 marks the sixth year since OMRON has
Sustainability Promotion Office, together with a great
issued its annual report in the Integrated Report
deal of cooperation both within and outside of the
format.
company, went through a painstaking process of trial
In drafting the fiscal 2017 edition of the Integrated
and error to produce this report. As we strive to
Report, we have focused on our new medium-term
improve the Integrated Report, the entire production
management plan, VG2.0. A single narrative ties this
team looks forward to receiving frank comments and
report together, from the CEO message to each
opinions about the report from you, the reader.
July 2017
Tsutomu Igaki
Executive Officer and Senior General Manager
Global Investor Relations &
Corporate Communications HQ
The Integrated Report Production Team
special feature. We have done our best to
communicate the specifics and strategies of VG2.0.
Moreover, this year OMRON formulated a company-
wide initiative (sustainability policy) for
environmental, social, and governance, so-called
ESG. We identified sustainability issues and goals,
set non-financial targets, and disclosed this
information in this Integrated Report for the first time
ever. We also reported on our director and officer
compensation scheme, which was revised this year.
We believe this Integrated Report provides readers
with a better understanding of the development
behind OMRON governance.
Our Investor Relations Department and the
OMRON Integrated Report 2016: Awarded for Excellence
The OMRON Integrated Report 2016 was
selected winner of the Award for Excellence in
Integrated Reporting from the World Intellectual
Capital Initiative Japan. This report was also
awarded Second Prize in the Nikkei Annual Report
Awards sponsored by Nikkei, Inc.
Shinagawa Front Building, 7F, 2-3-13, Konan, Minato-ku, Tokyo 108-0075, Japan
Investor Relations Department
Global Investor Relations & Corporate Communications HQ
Engagement Department
Sustainability Office
Tel: +81-3-6718-3421
Tel: +81-3-6718-3412
IR Information
http://www.omron.com/about/ir/
Sustainability Information
http://www.omron.com/about/sustainability/
New Medium-Term
Management Plan, VG2.0
http://www.omron.com/vg2020/