Integrated Report 2021
Year Ended March 31, 2021
To improve lives and contribute to a better society
Integrated Report 2021Contents
Vision
3
The OMRON Principles
Business
35 CTO Interview
4 SINIC Theory: Predicting the Future
Through the Interrelationships of
Science, Technology, and Society
5 Value Creation Model
7 CEO Interview
Strategy
13 OMRON’s Business and
Fiscal 2020 Results
17 Review of Long-Term Vision: Value
Generation 2020
23 The Direction of Our Next
Long-Term Vision
25 CFO Interview
30 Risk Management
39 Industrial Automation Business (IAB)
45 Electronic and Mechanical
Components Business (EMC)
49 Social Systems, Solutions and
Service Business (SSB)
53 Healthcare Business (HCB)
59 Innovation Exploring Initiative HQ (IXI)
Technology
63 Technology & Intellectual Property HQ
People
65 Human Resources Management
Editorial Policy
Covered Organizations
As a general rule, this report covers 133 companies in the OMRON Group, consisting of OMRON Corporation, 126 consolidated
subsidiaries, and 6 nonconsolidated subsidiaries and affiliates accounted for under the equity method (as of March 31, 2021).
Covered Period
Fiscal 2020 (April 1, 2020 through March 31, 2021). However, this report includes some disclosure items and business activities
that were initiated after April 2021.
References
This integrated report conforms to the integrated reporting frameworks recommended by the International Integrated Reporting
Council and the World Intellectual Capital Initiative and refers to Guidance for Collaborative Value Creation issued by Ministry of
Economy, Trade and Industry. Sustainability-related disclosures have been written with reference to the GRI Standards.
Caution Concerning Performance Forecasts Statements
Performance forecasts and other forward-looking statements are based on information available at the time, as well as on certain
assumptions deemed reasonable by OMRON Group management. Actual results may vary materially depending on a variety of
factors. See “Outlook for Fiscal 2021” when using the projection of results and conditions of assumptions for the results.
1
OMRON Corporation Integrated Report 2021 About the Cover
OMRON practices the OMRON Principles,
working to solve social issues through our
businesses. Each and every one of our
employees is a principal driver of this mission.
OMRON has been holding The OMRON Global
Awards (TOGA) since 2012, encouraging our
employees to set their own goals for solving
social issues in the aim of fostering a culture of
ongoing aspiration toward putting the OMRON
Principles into practice.
The cover of this issue features 16 employees
who were selected, from the 6,405 entries
submitted to the eighth instalment of TOGA
(FY2019), as representatives and leaders in the
practice of the OMRON Principles.
Environment
72 Environment
Governance
75 Round Table Discussion on Corporate
Governance
79 Advanced Compensation
Governance
83 Corporate Governance
93 Audit & Supervisory Board and
Key Audit Matters (KAM)
97 Directors, Audit & Supervisory Board
Members, and Executive Officers
Financial Information
101 Financial and Non-Financial Highlights
Corporate Information
113 Responsible Engagement with Our
Stakeholders
115 OMRON Recognitions
117 Corporate Information and More
In this report, an emphasis was placed on communicating financial information, sustainability information, and content disclosed in various reports
posted on our website as well as content that OMRON is working for sustainable enhancement of corporate value in an easy-to-understand manner.
Please see the OMRON website for details.
Investor Relations
https://www.omron.com/global/en/ir/
Sustainability Information
Sustainability initiatives
https://sustainability.omron.com/en
GRI Content Index
https://sustainability.omron.com/en/guide_line/
Major Sustainability Data
https://sustainability.omron.com/en/performance/
Reports
Corporate Governance Report
https://www.omron.com/global/en/assets/file/about/corporate/
governance/policy/20210701_governance_report_e.pdf
2
OMRON Corporation Integrated Report 2021 The OMRON Principles
OMRON founder Kazuma Tateishi resonated with the public nature of business, saying, “A company
shouldn’t be just about pursuing profits...it has an obligation to serve society.” In 1959, he publicly announced
the OMRON’s Corporate Motto, to improve lives and contribute to a better society. In 1990, we transformed
this motto into the OMRON Principles and have since evolved it with the times.
OMRON Principles
Management Philosophy
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 and solve social issues through our business.
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.
3
VisionOMRON Corporation Integrated Report 2021 SINIC* Theory:
Predicting the Future Through the Interrelationships
of Science, Technology, and Society
Our founder, Kazuma Tateishi, believed that solving social issues through business to create a better society
required the ability to anticipate future social needs. He believed that a company needed a compass to help
predict the future. As our compass, Mr. Tateishi formulated the SINIC predictive theory, which projects the
future based on the cycle of interrelationships between Science, Technology, and Society. OMRON first
announced this predictive theory to the world at the International Future Research World Congress in 1970.
Since then, the SINIC Theory has been our compass for projecting into the future.
The basic philosophy behind the SINIC Theory is that the interrelationships among science, technology, and
society lead to social change. Let us use the Cybernation Society as an example. We can see how the rise of
cybernetics, computer science, and other synthetic sciences in the 1940s became the seeds of electronic
control technologies, programming, and other technology. These technologies gave rise to the PC and the
internet, leading to the advent of the Cybernation Society. Society demanded more data, along with more
accurate and rapid data analysis. These demands forced us to produce CPUs and GPUs with faster processing
power, make advancements in deep learning and other artificial intelligence technologies, and reach higher
levels of sophistication in neuroscience and cognitive science.
The current Optimization Society is going through a transition period of the paradigm shift from the Industrial
Society to the Autonomous Society. Now, in a time when society is facing drastic changes and the future is
uncertain, we are openly promoting use of the SINIC Theory as social knowledge to build the future through
discussions with a diverse array of people.
* SINIC: Seed-Innovation to Need-Impetus Cyclic Evolution
Seed
Technology
Innovation
Please visit our website
to learn more about the
SINIC Theory.
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4
VisionOMRON Corporation Integrated Report 2021
Value Creation Model
OMRON value creation is anchored to future social needs as we work toward our vision of a better society.
Innovation driven by social needs means creating new value through inspired solutions to social issues. At
OMRON, we base value creation on the OMRON Principles and the SINIC Theory (future predictive model).
We commercialize innovations as products and services for our customers, contributing to a better society as
these solutions are put into use. Our value creation model results in business growth and sustainable
corporate value improvement. As we grow, we generate larger amounts of management capital for use in
creating innovation driven by new social needs.
Business Creation Process at OMRON
Management Capital (Input)
Human Capital
Employees
28,254
(As of March 2021)
Social and Relationship Capital
No. of Countries
No. of Countries
Around 120 countries/regions
(As of March 2021)
Financial Capital
Ratings AA-(R&I)/A(S&P)
(As of March 2021)
Intellectual Capital
Patents
11,037
(As of March 2021)
R&D Expenses
¥43.2 billion
(As of March 2021)
Manufactured Capital
Capital expenditures
¥24.0 billion
(As of March 2021)
Intellectual Capital,
Manufactured Capital, Social
and Relationship Capital
Growth Investment*
¥31.8 billion
成長投資*
(FY2017 to FY2020 results)
*M&A + Alliances
Natural Capital
Energy Consumption
297,699 MWh
Water Consumption
(Water Intake)
1,382 km3
(As of March 2021)
5
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Evolution
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Model
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Demographic
Trends
Limited
Resources
Technological
Innovation
Identify Social
Issues
Sensing &
Control
+ Think
Open
Innovation
Launch
and
Monetize
Businesses
C
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Develop
Products and
Services
e
r
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The OMRON Principles
VisionOMRON Corporation Integrated Report 202112345
Business Creation Process at OMRON
Innovation Driven by Social Needs
Identify Social Issues
Identify signs of change in the world and search for social issues (including customer issues) in key areas of focus.
Near-Future Design
Develop near-future design for the next three to ten years, anchored to our future vision of social issues,
technological innovation, and developments in science.
Core Technology Evolution and Business Model Design
Evolve core technologies and design business models necessary for achieving our vision of the near future.
Commercialization
Develop Products and Services
Develop products and services for customers and society.
Launch and Monetize Businesses
Incubate and grow businesses to solve social issues, while identifying new and emerging social issues.
Domains
Products and Services (Output)
Social Value
Factory
Automation
Industrial Automation
Business (IAB)
P39
Factory Automation Device
Healthcare
Healthcare Business
(HCB)
3
D
o
m
a
i
n
s
P53
Healthcare &
Medical Device
Customers:
Manufacturers
Digital
Automotive
Food
Infrastructure
and more
Customers:
Users including
healthcare
professionals and
consumers
Social Solutions
Social Systems,
Solutions and Service
Business (SSB)
P49
Station and
Traffic
Equipment
Maintenance /
Services
Customers:
Railway / Roads,
Housing Makers,
and more
PV Inverters, Other
Devices and Modules that
Support OMRON
GrowthElectronic and
Mechanical Components
Business (EMC)
P45
Customers:
Home Appliance
Makers, and
more
Relays, Other
Tactile switches
Open Innovation
Human Resources
Management
Manufacturing,
Environment
Risk
Management
Corporate Governance
Contribute to economic
development by improving the
productivity of society through
innovative-Automation
Contribute to people around the
world enjoying healthy, vigorous
lives, including increased healthy
life expectancy and reduced
medical expenses
Contribute to realizing a better
society in which people around
the world can continue to live in
safety, security, and comfort by
expanding renewable energy
and providing human-oriented
next-generation systems.
Contribute to the lives of people
around the world and the
development of society through the
provision of devices and modules
6
VisionOMRON Corporation Integrated Report 2021
CEO Interview
Fiscal 2021: The “Start Dash” Year Ahead of
our Next Long-term Vision
President and CEO Yoshihito Yamada
OMRON has overcome the trials of fiscal 2020 in the form of the unprecedented COVID-19
crisis by maximizing the three areas of growth potential, profitability, and ability to respond
effectively to change that we have worked to strengthen under our Value Generation 2020
(VG2020) vision. However, we are not contented to stop there but have our sights set on
firmly grasping our next future. OMRON president and CEO Yoshihito Yamada says “we will
make a start dash toward our next long-term vision, acquire the autonomous growth
potential to bounce back from any form of adversity, and draw our future with our own
hands. We are confident and capable enough to do that.” We asked him about his plans and
his determination to charge up to the company’s next growth stage.
(Interviewer: Integrated Report Production Team)
7
Looking Back on a Year of Unprecedented
Crisis Caused by COVID-19
FY 2020 Results
(Billions of yen)
FY2020 Results
Y/Y
Net Sales
Gross Profit
Operating Income
Net Income
Gross Profit Margin
655.5
298.4
62.5
43.3
45.5%
– 3.3%
– 1.8%
+ 14.1%
+ 10.6%
+ 0.7%pt
second was to fulfill our responsibility to supply our
customers. The third was the minimize the negative
COVID-19 impact on our business.
Given the uncertain outlook, we were prepared for
a decline in sales of ¥100 billion. However, from the
second quarter onward, we started to see clear
signs of a nascent recovery in the global economy
fueled by China.
In July, we announced a full-year operating income
forecast of ¥30 billion, but, thanks to our ability to
quickly grasp changing market trends, we were
actually able to achieve an increase in both sales
and profits in the second half. For the full year, we
achieved double-digit year-on-year growth in
operating income to ¥62.5 billion and our gross
profit margin improved to 45.5%. Market
expectations also increased as a result, with
OMRON’s share price reaching its highest level in
January 2021 since the company was listed, and
market capitalization also reaching a record high.
Our ability to generate increased profits even
during the extremely tough COVID-19 business
environment is proof that our ability to respond
effectively to change is growing stronger.
P13 Fiscal 2020 corporate results
– The COVID-19 pandemic, which grew into
an unprecedented crisis, hit just as OMRON was
preparing to wrap up your VG2020 long-term
vision. Can I ask you to reflect on the past year
when you had to respond to a crisis with
precious little visibility into the future?
In March 2020, when COVID-19 spread across the
globe, we witnessed the declaration of a
succession of lockdowns and states of emergency,
we had no idea how far the virus would spread and
how long it would last.
Fiscal 2020 was meant to be the final year of our
VG2020 long-term vision and the year in which
formulated our next long-term vision and medium
-term management plan. However, given the state
of emergency, it would have caused inevitable
confusion on the frontlines if we tried to formulate
our new long-term vision and crisis response at the
same time. We judged that the COVID-19 pandemic
would not be easily brought under control, so we
determined to temporarily freeze our work on
structuring our next long-term vision and medium-
term management plan, and concentrate on
responding to the immediate crisis. Instead, we
characterized fiscal 2020 and 2021 as a business
transformation period with a focus on immediate
crisis response and the post-COVID world, and
decided to structure our next long-term vision in
fiscal 2022.
I set out three polices for combatting the COVID
emergency in order of priority. The first was to put
the health and safety of our employees first. The
Market Capitalization During VG2020
(Trillions of yen)
2.0
1.5
1.0
0.5
0
11
12
13
14
15
16
17
18
19
FY20
8
VisionOMRON Corporation Integrated Report 2021 Growth Potential, Profitability,
Ability to Respond to Change
– You worked on strengthening three areas in
VG2020: growth potential, profitability, ability
to respond to change. How are those abilities
faring now?
We have been building up assets to ensure future
growth through active investment in order to
strengthen our growth potential. Specifically, that
involves strengthening our solution capabilities,
building new business models, and acquiring new
products and technologies. In terms of
strengthening our solution capabilities, for instance,
we have expanded our automation centers to 37
global locations. Those centers provide venues to
create value together with customers in the
Industrial Automation Business using competitive
and innovative new products and applications. We
are also expanding the number of sales engineers
who can communicate that value to over 1,000
people. We are still creating innovative solutions to
onsite production issues in these automation
centers today. In terms of building new business
models, we have been investing in commercializing
services that are expected to growth significantly
going forward, such as the i-BELT service that uses
data from production sites in the Industrial
Automation Business to improve productivity and
quality, our VitalSight service that offers Remote
patient monitoring services for high blood pressure
in the healthcare business, or our Station
Management Service that provides comprehensive
station management support in the Social Systems,
Solutions and Service Business. In terms of
acquiring new products and technologies, we have
been working to acquire robots and motion
controllers through M&A in the Industrial
Automation Business, develop innovative devices
such as wearable blood pressure monitors with
electrocardiograph functionality in the Healthcare
Business, and to further strengthen our Nebulizer
Business.
Regarding profitability, we focused our resources
Gross Profit Margin Trend
45.5%
44.7%
44.4%
44.8%
(ratio)
44%
41%
38%
37.1%
36.8%
35%
39.3%
39.3%
38.5%
38.5%
11
12
13
14
15
16
17
18
19
FY20
9
on businesses with high profits and high market
share by thoroughly managing our portfolio based
on return on investment capital (ROIC). We have
transferred and converged businesses that have
not shown any evidence of increased profitability
and further strengthened high-profit businesses
through M&A and alliances. These efforts have
boosted the share of total sales contributed by
Industrial Automation and Healthcare Businesses,
which are recognized as the drivers of corporate
growth, has increased from 44% to 72% over the
past 10 years.
Finally, a few words on our ability to respond to
change. OMRON has been working to diversify our
production bases to enhance our ability to respond
to changes in the external environment, such as
changing business environments and natural
disasters. In our fiscal 2020 integrated report,
I introduced the concept of selection and
decentralization that we had been working on, but
we have also been working on a form of delegation
through localization, whereby we delegate authority
to the people in charge of our individual
organizations and production sites around the
world. By appointing local human resources to
head up our global regions and promoting
localization, those individual regions are able to
think for themselves, act autonomously, and take
speedy decisions and action. For instance, at our
Dalian plant in China, we resumed production of
healthcare products, such as thermometers, in
response to request from local government after
taking the necessary precautions, despite the city
being in lockdown. I think we can safely say that
this improvement in our ability to respond to
change is a result of delegation.
As you can see, we have steadily strengthened our
growth potential, profitability, and ability to respond
to change over the past decade, but we still do not
have sufficient ability to boost sales even in adverse
circumstances. If you are asking me whether we
can achieve self-propelled growth in other
businesses, like the double-digit growth rise we
achieved last year in the Healthcare Business,
I think that will really test our true value.
P17 VG2020 Overview
P39 Business
– What is behind the significant
improvement in OMRON’s gross profit margin?
Over the past ten years, we have been able to
continuously improve our gross profit margins
thanks to coordinated sales planning. In particular,
the inclusion of gross profit margins in our sales
department evaluations had a considerable impact.
Introducing a common companywide measure
such as the gross profit margin into the sales
department as well made people feel more
responsibility for profit and cost and inspired a new
sense of solidarity with our production centers. We
will continue to improve our gross profit margin and
VisionOMRON Corporation Integrated Report 2021 consequently our earning potential, and increase
our cash flow so that we can reinvest it in our
business and drive further growth. In terms of our
cash allocation policy, we will continue to prioritize
R&D centric growth investment. This includes
investments in M&A and corporate alliances. We
will also continue to pay stable dividends. Having
said that, when we expect to be able to accumulate
some cash, we will consider making agile
purchases of treasury stock.
P25 CFO Interview
Corporate Philosophy Management
Earns Strong Market Praise
– OMRON has been including in multiple
ESG indices, including the Dow Jones
Sustainability Index (DJSI). What points do
people evaluate the most strongly?
We linked our medium-term management plan
VG2.0 started in 2017 with our key sustainability
issues and set sustainability targets across 11
items. We are also accelerating ESG initiatives to
meet the expectations of various stakeholders.
First on the environment element of ESG, we are
working on two vectors under our Green OMRON
2020 environmental vision: reducing environmental
impact through our own business activities, and
helping customers contribute to the environment
through our products and services. On the former,
we have made our OMRON Carbon Zero
declaration to reduce greenhouse gas emissions to
net zero by 2050. We had already achieved a 50%
reduction by fiscal 2020 compared to fiscal 2016
levels, well above target. We will continue to press
ahead with achieving this plan. In 2019, we also
expressed our support for the Task Force on
Climate-related Financial Disclosures (TCFD) and
are promoting the relevant information disclosure.
On the social element of ESG, our staff have
embraced not only OMRON’s corporate philosophy
of creating a better society but they are also
committed to acting as a good corporate citizen.
This stance was evident in the various global
initiatives we undertook even during last year’s
COVID-19 pandemic based on our corporate
philosophy. One example was that resumption of
production in China. Another was the decision by
our Industrial Automation employees in Spain to
participate in a ventilator development project
together with non-profit organizations attempting to
combat the virus.
Finally, we are constantly evolving our approach to
the governance element of ESG. We chose a
company with an Audit and Supervisory Board
framework because OMRON develops various
businesses on a global scale and so we respect the
independent appointment of auditors for the
purpose of strengthening internal control.
Furthermore, in order to strengthen the supervisory
function of the Board of Directors, we have
established four arbitrary committees under the
jurisdiction of the Board and introduced a hybrid
governance framework that also incorporates the
excellent features of a company with a Nomination
Committee. The heads of the four committees,
including the CEO Selection Advisory Committee,
are outside directors, and I, as the CEO,do not sit
on any of the committees. In 2015, we introduced
evaluations of the Board of Directors to strengthen
its effectiveness. We also revised our executive
compensation system in fiscal 2021. This serves as
added motivation to achieve the next long-term
vision and medium-term management plan.
I believe our inclusion in various ESG indices
reflects investors high evaluations and expectations
of these kinds of efficiency-related initiatives. We
have been included in the DJSI World Index for four
consecutive years. We have also been consistently
assigned the top rating in all ESG indices
recommended by Japan’s Government Pension
Investment Fund. Being included in these indices
helps curb stock price volatility and reduce capital
costs.
P19 Improved Non-financial Value
P65 Human Resources Management
P72 Environment
P75 Corporate Governance
P115 OMRON Recognitions
– You breathed new life into OMRON’s
corporate philosophy through VG2020 and
launched the company’s corporate philosophy
management.
When I took up the position of president and CEO
in 2011, I felt OMRON was somewhat entrapped.
I took over the reins directly after the March 2011
the Great East Japan Earthquake and tsunami
when we were also still feeling the residual effects
of the 2008 global financial crisis. I wanted to break
free from the dark mood and stagnation that
characterized that period of confusion. I thought it
through and decided to make our corporate
philosophy a key source of development
OMRON’s corporate philosophy DNA is based on
the venture spirit of our founder Kazuma Tateishi.
I want to liberate and support the energy and
challenging spirit of our employees, who have
inherited that DNA and want to contribute to the
development of the society and to create new
social needs, through our corporate philosophy. In
2015, we revised our corporate philosophy to make
it more readily understandable and to ensure
steady sustainable develop could be achieved by
putting that philosophy into practice. Over the past
10 years, I have focused on how to get employees
to empathize and sympathize with our corporate
philosophy and how to instill the philosophy in the
field.
10
VisionOMRON Corporation Integrated Report 2021 – The OMRON Global Awards (TOGA) were
launched as a way to instill the company’s
corporate philosophy in the field. It has
blossomed into a major events in which all
employees participate globally. Why do you
think it has expanded and evolved to this
extent?
Over 15,000 employees from all over the world
took part remotely in the TOGA Global Meet held in
December last year and received valuable feedback
from as many as 200 externally invited business
partners.
When we started TOGA in 2012, I never thought it
would develop this far. Original TOGA’s predecessor
was a performance commendation system that
rewarded initiatives from previous fiscal years.
However, I started TOGA because I wanted to share
the challenges not of the past, but of the present
and the future with everyone, and to praise those
efforts. The magnitude of TOGA’s sphere of
resonance both inside and outside the company
has greatly exceeded my expectations.
Why do our employees get so involved in TOGA?
I feel it goes beyond institutional mechanisms and
a desire for self-approval. I often use the words
self-esteem and a sense of mission. I think
employees feel a sense of pride in the feeling that
their work contributes to social development, and
that is what drives such enthusiastic participation in
TOGA. The desires to develop solutions that solve
social issues and to create values that contribute to
social development are powerful magnetic forces
that attract those around you. The sense of
accomplishment that you get from seeing the
project that we launched expand in tandem with its
sphere of influence is unbeatable and extremely
satisfying.
TOGA is a part of our business. While we refer to it
internally as planting the flag, TOGA starts with
finding initiatives that could help solve social
issues, getting two or more colleagues together,
and declaring your plan (planting the flag). If the
supervisor approves the plan as a potential
contributor to social development, we will create
the required environment for employees to actively
engage in the activities during working hours and
approve a budget. As a result, we received 6,461
entries last year, with employees in different
countries planting various different flags.
P65 Human Resources Management
– Have you ever had an idea emerge from
TOGA that have proved successful in your
actual business?
Yes, of course, many. For example, the Metabolic
Management Center (MMC) announced by a
Chinese team in fiscal 2018. Previously people
suffering from diabetes that can cause various
complications had to visit a clinical department to
receive treatment for each symptom but we
created a one-stop medical service solution by
collaborating with key opinion leaders, hospitals,
medical device manufacturers, and other players.
There are already over 650 MMC bases in China
and we are aiming to open the 1,000th center in
fiscal 2021.
The MMC sphere of resonance has spread to
pharmacy chains and MMC Health Convenience
Stores are being set up to help prevent lifestyle-
related diseases such as diabetes and
hypertension. This MMC Health Convenience Store
is a health management and medical services
platform that is transforming urban retail
pharmacies. We can seamlessly connect hospitals,
pharmacies, and households and contribute to the
health and healthy lifestyles of Chinese people with
health check services that use a variety of testing
equipment from blood pressure monitors to
electrocardiographs, and weighing scales. We plan
to increase the number of Health Convenience
Stores from 15 in fiscal 2020 to 100 in fiscal 2021.
Growth Strategy Leading Up to Next
Long-term Vision
– OMRON has your SINIC Theory that serves
as a compass for predicting the future. How do
you think society will change as it seeks to
become an autonomous society over the next
ten years? Also, what will be the likely content
of your next long-term vision?
When formulating the next long-term vision, I took
the opportunity to reconsider OMRON’s
fundamental significance as a company.
OMRON’s reason for being is to create social value
through business and continue to contribute to the
development of society. That is precisely what the
practical application of our corporate philosophy
seeks to do.
According to our seed innovation to need-impetus
cyclic evolution (SINIC) theory, current times are to
be considered as a transition period from an
optimized society to an autonomous society. An
autonomous society is a balanced society in which
people cooperate with each other while
demonstrating their own individuality. You could say
that, right now, the social and economic systems
that were forged on rising economic growth are on
the verge of collapse due to the rapid onslaught of
social issues caused by climate change, super-
ageing societies, and economic disparities, etc. Of
the various issues, OMRON considers reducing
CO2 emissions, the collaboration and coexistence
of people and machines, and extending a healthy
life expectancies as social issues that need to be
solved and will lead to self-driven growth if we can
create the social needs to solve these problems.
P4 SINIC Theory
P23 Direction of Next Long-Term Vision
11
VisionOMRON Corporation Integrated Report 2021 – You have positioned fiscal 2021 as the year
of the “start dash” for your next long-term
vision. Can you tell us about the specific action
plans?
During this defined two-year business transition
period, I feel that the three domains we focused on
during VG2020, namely factory automation,
healthcare, and social solutions, along with the
Electronic and Mechanical Components Business
that supports them, are all now moving nicely into
a new stage of growth.
In the Industrial Automation Business, the paradigm
shift in each industry will likely prove be a great
chance to develop business opportunities. In the
automobile industry for instance, investment in
electric vehicles (EV) through green recovery
policies is expanding. In the food and daily goods
industry, the development of new production
methods using recycled materials is progressing on
the back of accelerated deplasticization. Growth
areas inspired by digitalization are also expanding,
such as the expansion of production facilities
spurred by increased global semiconductor demand
and the expansion of 5G base stations.
In the Electronic and Mechanical Components
Business, the structural reforms that we have
undertaken to date are starting to bear fruit and
business performance is improving as a result of us
swiftly catching the wave of post-COVID economic
recovery. Going forward, we will continue to
accelerate our development of high value-added
module products tailored to the specific needs of
our customers to help boost earnings.
In the Social Systems, Solutions and Service
Business, while we be impacted by railway
customer decisions to curb investment in the wake
of the COVID-19 pandemic, demand for remote
station services and maintenance is steadily
increasing. I also expect to see growing demand
for renewable energy linked to policies designed to
reduce greenhouse gases and continued rising
demand for power conditioners and energy storage
systems to ensure that energy is used effectively.
In the Healthcare Business, full-fledged telehealth
services have accelerated around the world in the
face of COVID-19. In the United States, telehealth
services provided by OMRON are already covered
by Medicare public health insurance for elderly
people. In order to prevent an increase in medical
FY2021 Plan
(Billions of yen)
FY2021 Plan
Y/Y
Net Sales
Gross Profit
Operating Income
Net Income
Gross Profit Margin
700.0
325.0
70.0
48.0
46.4%
+ 6.8%
+ 8.9%
+ 12.0%
+ 10.8%
+ 0.9%pt
costs due to aging populations, global healthcare
trends are shifting from symptom treatment to
prevention to arrest the onset of disease. This just
goes to show that the business vision OMRON has
been championing since 2015, Zero Events:
Reducing the Incidence of Cerebrovascular and
Cardiovascular Disease Caused by High Blood
Pressure to Zero, is perfectly aligned with the
needs of current times.
As you can see, OMRON’s business model is not
just about things, but is evolving in the direction of
providing solutions that combine various services.
In other words, we are evolving from an exhaustive
sell-out model to a continuous recurring model. The
data business is also important for developing a
business model that generates compensation and
new needs by continuing to connect with
customers. OMRON has been practicing Sensing &
Control+Think methods, so we are perfectly
positioned to provide a potential data business and
establish a business model that combines goods
and services.
P35 CTO Interview
P39 Business
– Self-driven growth refers to a structure that
can grow steadily by increasingly profits even in
adverse circumstances. At the same time, in a
broad sense, you could consider this suitable
growth for an autonomous society.
We don’t know when the COVID-19 pandemic will
be brought under control, but the move toward an
autonomous society has already begun. The next
10 year may prove more uncertain and difficult than
ever. In such a situation, OMRON must swiftly
detect nascent signs of change by maintaining
close contact with customers and various
stakeholders, firmly incorporate those changes, and
create self-driven growth that can increase earnings
even in adverse circumstances.
The people who will be responsible for doing this
will be our employees who sympathize with
implementing our corporate philosophy and are
driven by self-esteem and a sense of mission.
I want to create a company that enables the flags
that they hoist to help solve social issues to flutter
proudly across the globe. To that end, we will
realize growth that befits an autonomous society
by promoting the selection and decentralization,
and the delegation and localization that enable
employees to play a leading role. This is the self-
driven growth that OMRON aims to achieve.
As I have already said, we are prepared for that.
Fiscal 2021 is the “start dash” year for our next
long-term vision. I feel we are poised for growth
and am confident that OMRON can realize an even
greater transformation. We will draw in an
autonomous society with our own hands….and run
up to the next stage with that determination in our
hearts.
12
VisionOMRON Corporation Integrated Report 2021 OMRON’s Business and Fiscal 2020 Results
OMRON manufactures and sells market-leading sensing and control products in around 120 countries/regions around
the world. Our products include control equipment, electronic components, social systems, and healthcare items.
Consolidated Sales Composition Ratio
Healthcare Business
(HCB)
Providing a comprehensive
lineup of healthcare products
for home and hospital use
Industrial Automation
Business (IAB)
OMRON’s mainstay business;
innovating global manufacturing
through factory automation
19%
FY 2020
Consolidated Sales by
Business Segment
¥655.5billion
53%
15%
Social Systems, Solutions and
Service Business (SSB)
Offering social infrastructure
systems for a safer, more
comfortable society
13%
Electronic and Mechanical
Components Business (EMC)
Providing the market with
sophisticated components that
create seamless relationships
between people and machines
Net Sales, Operating Income, and Operating Income
Margins by Business Segment for Fiscal 2020
(Billions of yen)
Business Segment
Net Sales
Operating Income
Operating Income Margin
Industrial Automation
Business (IAB)
Electronic and Mechanical
Components Business (EMC)
Social Systems, Solutions
and Service Business (SSB)
Healthcare Business (HCB)
Eliminations and Corporate
Total
346.4
86.0
95.7
123.1
4.3
655.5
58.8
3.0
5.7
20.6
(25.5)
62.5
17.0%
3.4%
6.0%
16.7%
-
9.5%
13
StrategyOMRON Corporation Integrated Report 2021 Net Sales by Region
Asia Pacific
¥ 61.8 billion
Americas
¥ 63.6 billion
10%
9%
Japan
¥ 276.6 billion
FY 2020
Consolidated
Sales by Region*1
42%
¥655.5billion
16%
Ratio of
Overseas Sales
Approx.
58%
Europe
¥ 101.5 billion
23%
Greater China
¥ 151.2 billion
Japan
10,488
37%
Number of Employees by Region
Asia Pacific
5,282
Americas
1,618
18%
Ratio of Overseas
Employees to
Total Employees
Approx.
63%
Europe
2,343
6%
8%
FY 2020
Employees
by Region*1*2
28,254
*1 Regional categories are defined as follows:
Americas includes North America, Central America, and South
America. Europe includes Europe, Russia, Africa, and Middle
East. Greater China includes China, Taiwan, and Hong Kong.
Asia Pacific includes Southeast Asia, Korea, India, and Oceania.
*2 As of March 31, 2021.
30%
Greater China
8,523
14
StrategyOMRON Corporation Integrated Report 2021 Financial Highlights
Gross Profit Margin
ROIC
EPS and Dividend
45.5%
7.8%
¥214.7
Gross Profit Margin
(excluding R&D expenses)
Selling, general and administrative expenses ratio
R&Dexpenses ratio
Operating income margin
(%)
50
40
30
20
10
0
44.7
44.8
45.5
39.3
38.5
39.3
44.4
23.4
10.2
5.7
24.7
24.3
7.5
6.3
8.6
6.4
27.6
28.5
29.9
29.4
10.5
9.2
8.1
9.5
6.6
6.7
6.8
6.6
(%)
15
10
5
0
13.4
12.7
10.6
10.3
9.7
Earnings per share
Dividend payout ratio
Cash dividends per share
Dividend on equity
14.1
(Yen)
400
365.3
39.139.1
31.1
31.6
296.9
300
283.9
32.232.2
260.8
25.025.0
219.0
215.1
25.625.6
214.7
23.023.0
(%)
40
30
20
7.8
Expected cost
of capital
6%
200
100
71
68
68
76
84
84
84
10
0
3.43.4
FY
14
3.13.1
15
3.23.2
16
3.33.3
17
3.53.5
18
3.33.3
19
3.03.0
20
0
FY
14
15
16
17
18
19
20
FY
14
15
16
17
18
19
20
Gross profit margin reached a record high,
driven by stronger group-wide earnings
capacity.
Our focus on ROIC management resulted
in a 7.8% ROIC, above our 6% expected
cost of capital.
OMRON paid dividends of ¥84 per share,
representing dividend on equity above
our target of approximately 3%.
Cash and Cash Equivalents
Ratio of Overseas Sales
Capital Expenditures
¥250.8billion
Cash and cash equivalents
Total interest-bearing liabilities
(Billions of yen)
250.0
200.0
150.0
100.0
50.0
0
250.8
185.5
126.0
106.2
103.9
102.6
82.9
0
0
0.2
0.3
2.1
1.6
0
(%)
70
60
50
40
30
20
10
0
57.7%
¥24.0billion
Overseas Total
Japan
Capital expenditures
Depreciation and amortization
(Billions of yen)
50.0
60.1
60.3
58.4
57.3
56.5
39.9
39.7
41.6
42.7
43.5
54.1
45.9
57.7
42.3
40.0
38.1
36.9
30.0
28.3
31.5
29.0
25.7
35.7
33.0
33.1
25.4
25.7
24.3
24.0
22.8
20.0
10.0
0
FY
14
15
16
17
18
19
20
FY
14
15
16
17
18
19
20
FY
14
15
16
17
18
19
20
As a result of increased operating cash
flow, cash and cash equivalents increased
significantly.
OMRON’s overseas sales ratio remains
over 50%.
OMRON made carefully selected capital
investments, including increased
production facilities and investment in
operating sites for future growth.
* The Automotive Electronics Components Business (AEC) was transferred, and the AEC business was classified as a “discontinued business.” Accordingly, some financial data for fiscal 2017
and 2018 have been reclassified.
15
StrategyOMRON Corporation Integrated Report 2021 Non-Financial Highlights
Ratio of non-Japanese in key
managerial positions overseas
Ratio of women in managerial
roles (OMRON Group in Japan)
Ratio of employees with disabilities
(OMRON Group in Japan)
★
75%
75
70
62
★
6.7%
★
3.0%
Ratio of women in managerial roles (left)
No. of women in managerial roles (right)
OMRON Group in Japan
Japanese national average
(%)
8
6
4
2
0
102
(Persons)
100
(%)
4
6.7
90
5.9
85
5.2
75
50
25
0
3
2
1
0
59
3.6
53
3.3
36
2.3
30
1.9
2.4
2.4
2.5
2.6
2.5
3.0
2.8
1.9
1.9
1.8
2.0
2.1
2.1
2.2
49
49
46
42
(%)
80
60
40
20
0
FY
14
15
16
17
18
19
20
FY
14
15
16
17
18
19
20
FY
14
15
16
17
18
19
20
Depending on the size of the overseas OMRON
Group companies, we increase the ratio of local
employees to the number of important positions
determined by OMRON. In fiscal 2020, in
contrast to a target ratio of non-Japanese of 2/3
(66%), as a result of planned personnel changes
taking effect, we achieved a ratio of 3/4 (75%).
* From fiscal 2018, concurrent positions for governance and
development positions are excluded.
In contrast to a target of 8%, the ratio for fiscal
2020 was 6.7%. Although the desire for career
development is growing among young female
employees, forming a group of medium-to-long-
term candidates is a challenge.
* To date, the ratio of women in managerial roles in the OMRON Group
in Japan has been expressed as the result for the fiscal year under
review as of April 20 of that year (the date on which job titles
reflecting the OMRON Group’s human resource evaluations for the
previous year took effect). This has been changed to express the ratio
as the result for the previous fiscal year (in this report, the ratio as of
April 20, 2021 is expressed as the result for fiscal 2020). In
accordance with this change, the expressions of the ratios of previous
fiscal years have also been retroactively changed to this format.
We are striving to create more employment
opportunities and fulfilling work for disabled
persons. In fiscal 2020, the ratio of
employees with disabilities was 3.0%,
above the legally mandated ratio of 2.2%.
* Figures represent results as of June 20.
* For companies subject to the Act on Employment
Promotion etc. of Persons with Disabilities.
* Employment rate calculation is based on the Act on
Employment Promotion etc. of Persons with Disabilities.
Environmental Contribution
Energy-Generation and
Storage Products
Greenhouse Gas Emissions
826 thousand
ton-CO2
Environmental contribution
CO2 emissions of production sites
(Thousand ton-CO2)
1,200
1,000
851
1,055
971
826
Solar power multi-storage platforms
Energy-Saving Product
800
600
400
200
0
659
593
508
221
202
202
204
193
135
106
FY
14
15
16
17
18
19
20
Left: Environmental sensor
Right: i-BELT energy visualization and analysis
service
124 thousand
ton-CO2
Greenhouse gas emissions
Net sales to CO2 emissions
(Million yen / ton-CO2)
(Thousand ton-CO2)
500
6.16
6
5
4
3
2
1
0
4.12
3.83
4.22
271
3.94
250
5.02
4.47
235
166
124
400
300
200
100
0
FY
14
15
16
17
18
19
20
We are expanding the environmental contribution of OMRON
products and services that reduce the impact on the environment.
We also strive to reduce CO2 emissions at our production centers
through the use of our own energy saving products. In fiscal 2020,
our environmental contribution was 826 thousand ton-CO2, exceeding
production site emissions of 106 thousand ton-CO2.
* Environmental Contribution = Volume of CO2 emissions reduction contributed by society’s
use of the OMRON Group’s energy generation and savings products and services.
https://sustainability.omron.com/en/environ/climate_change/contribution/
OMRON has established its new environmental target “OMRON Carbon
Zero” with the goal of reducing greenhouse gas emissions to zero by
2050. OMRON has set greenhouse gas emissions as an indicator to
achieve that goal. In fiscal 2020, we achieved a 50% reduction compared
to fiscal 2016, substantially exceeding our initial target of a 4% reduction.
* Net sales to CO2 emissions: Net sales per one ton of CO2 emissions
* 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) https://sustainability.omron.com/en/environ/data/ghg_emissions/
Indicates assurance performed by independent third party.
Indicates independent verification or review performed by a third party.
16
StrategyOMRON Corporation Integrated Report 2021 Review of Long-Term Vision: Value Generation 2020
OMRON has conducted business from a long-term perspective under its 10-year long-term vision, Value
Generation 2020 (VG2020), from fiscal 2011 to fiscal 2020. During the effective period of VG2020, we
endeavored to enhance financial value by strengthening our three abilities of growth power, earning capacity
and responsiveness to changes, and non-financial value by engaging in sustainability initiatives. As a result of
our efforts, total shareholder return (TSR), which is an indicator of corporate value creation, roughly
quadrupled over the past ten years, proving a significant increase in corporate value.
Total Shareholder Return (TSR)
(%)
350%
250%
OMRON
TOPIX
397.5%
284.9%
239.9%
222.8%
242.3%
265.1%
187.3%
150%
100.0%
50%
101.5%
76.6%
154.3%
10
11
12
13
14
15
16
17
18
19
20
FY
Improved Financial Value through the Enhancement of Growing Power,
Earning Capacity, and Responsiveness to Changes.
– Enhancing Growing Power
By actively engaging in investment in order to achieve
growth throughout the effective period of VG2020, we
have built up three assets which will sustain future
growth. The first is a strengthened ability to provide
solutions. In our mainstay Industrial Automation
Business, we have developed competitive and innovative
products and applications, while strengthening our
front-line human resources (sales and sales engineers)
to communicate the value of these products and
applications. The second is the formation of new
business models. We invested in commercializing
services that we expect to grow significantly in the
future. These services include i-BELT, a manufacturing
site data utilization service in our Industrial Automation
Business, and remote medical consultation services in
our Healthcare Business. The third is the acquisition of
new products and new technologies. Focusing on fields
such as robotics and AI, we have implemented M&As
and created alliances in order to acquire innovative
technologies and products which OMRON is lacking. We
have acquired businesses in fields such as robotics and
motion controllers for our Industrial Automation
Business, enhancing our product lineup and
technological capabilities. In addition, we have
strengthened the competitiveness of our Healthcare
Business through means such as acquiring nebulizer
businesses and investing in a partner companies
possessing electrocardiogram analysis technology.
Through these approaches, we have been able to build a
foundation for further growth.
– Increasing Earning Capacity
We have been strengthening our earning capacity
steadily by improving our gross profit margin and
optimizing our business portfolio through ROIC
management. We transferred the Automotive Electronic
Components Business and wrapped up low- profit
businesses, narrowing our business portfolio to
businesses with higher profits and market shares,
while concentrating our management resources. In
fiscal 2011, our only business with an operating income
margin of more than 10% was the Industrial
Automation Business, which accounted for about 40%
of total net sales. In fiscal 2020, our Healthcare
17
StrategyOMRON Corporation Integrated Report 2021 Business’ operating income margin also exceeded
10%. Combined with the Industrial Automation
Business, these two businesses have grown to account
for approximately 70% of total net sales. In addition to
these portfolio management actions, we have
continued to improve our earnings power through
efforts conducted jointly among manufacturing, sales,
development and planning, including expanding sales
of high-value-added products, strengthening our ability
to provide solutions, and reducing variable costs and
manufacturing costs. As a result, we improved gross
profit margin, our focus for the past ten years, from
36.8% in fiscal 2011 to 45.5% in fiscal 2020.
Changes in Sales Ratio by Segment
FY2011
Other
9%
FY2020
Other 1%
Electronic and
Mechanical
Components
Automotive
Electronic
Components
14%
Electronic and
Mechanical
Components
13%
10%
Industrial
Automation
44%
10%
Social Systems,
Solutions and Service
Healthcare
Ratios of businesses with at least
10% operating income margin
44% Industrial Automation Business
13%
Social
Systems,
Solutions
and Service
14%
Healthcare
19%
Industrial
Automation
53%
Ratios of businesses with at least
10% operating income margin
72% Industrial Automation Business
and Healthcare Business
– Strengthening Responsiveness to Changes
Since 2011, we have engaged in integrated risk
management to support global business expansion,
improving our responsiveness to changes. Aiming to
further increase productivity and build resilience which
will enable us to weather change, we are working to
optimize our production locations and supply chain. In
addition to M&A activities to acquire new businesses in
our Industrial Automation Business, we doubled the
number of production centers from four in fiscal 2011
to eight, responding to the global expansion of our
customers. In our Healthcare Business, we have
utilized M&As to acquire production locations in Brazil
and Italy in order to position production close to
consumers. In fiscal 2011, we had three production
locations; this has now grown to five. This increase in
production has enabled us to quickly respond to
demand fluctuations in the major markets of the
Americas and Europe. At the same time, we
consolidated 11 production centers to seven in our
Electronic and Mechanical Components Business. We
were able to improve our productivity by consolidating
and eliminating small production centers.
制御機器
ヘルスケア
社会システム
電子部品
17%
17%
6%
3%
– Future Challenges
During the effective period of VG2020, operating
income went from ¥40.1 billion in fiscal 2011 to ¥62.5
billion in fiscal 2020. At the same time, establishing a
sound self-driven growth structure that will help us
fight against headwinds and grow profits solely through
our own capabilities remains a challenge.
As part of our next long-term vision, we will continue to
polish our existing businesses and strive to create
further value in order to acquire the power to achieve
self-driven growth. Moreover, we will also work to
evolve our business model into one combining goods
and services and, through joint development with our
partners, accelerate our challenge to shift to new value
generation, achieving self-driven growth.
Net Sales, Operating Income, Gross Profit Margin Results (FY2011–2020)
Net sales (billions of yen)
Operating income (billions of yen)
Gross profit margin (%)
773.0
619.5
650.5
847.3
833.6
794.2
860.0
859.5
44.8%
45.5%
41.6%
41.2%
678.5
655.5
86.6
68.1
39.3%
38.5%
62.3
39.3%
67.6
77.0
67.3
54.8
62.5
40.1
45.3
38.5%
36.8%
37.1%
11
12
13
14
15
16
17
18
19
20
FY
18
StrategyOMRON Corporation Integrated Report 2021 Improving Non-Financial Value through Sustainability Initiatives
As part of VG2.0, our medium-term management plan launched in fiscal 2017, we established material sustainability
issues (materialities) and worked to improve corporate value. These material sustainability issues are comprised of
two key points: social issues to be solved through our business, and issues responding to stakeholder expectations.
We have set VG2.0 targets for social issues to be solved in our mainline business domains and are taking action to
achieve them. In addition, through the achievement of goals in the fields of human resources management,
manufacturing and the environment, and risk management, we have strengthened our business foundation, built a
relationship of trust with society, and fulfilled our corporate responsibility to society.
Goals for Social Issues to be Solved through Business
Factory Automation
P39
Social Issues
to be Solved
Shrinking labor force, as an issue in global manufacturing.
Shortage of skilled workforce on production floors and requirements of increasingly advanced & diversifying
manufacturing processes.
VG2.0 Goals
Generate applications to embody the concept of innovative-Automation* in our four focused industries, establish
control technologies, and develop new products —Generate Control Technologies for Manufacturing Innovation—
Fiscal 2020
Progress
Integrated: Released the world's first robotic integrated controller. Facilitated the building of systems remotely
through the fusion of virtual and real, achieving these and other advanced, automated manufacturing innovations.
Intelligent: Tested and developed 5G solutions, accelerated productivity improvement using IoT data.
Interactive: Contributed to the automation of assembly, feeding, and inspection operations at customer
manufacturing sites by utilizing mobile robots and collaborative robots.
Social Value
Contribute to economic development by improving social productivity.
* innovative-Automation is the unique OMRON concept to bring innovations to production floors.
Healthcare
P53
Social Issues
to be Solved
Increased incidence of brain diseases and cardiovascular diseases attributable to hypertension.
Increased worldwide prevalence of asthma and other respiratory diseases.
VG2.0 Goals
Blood pressure monitor sales: 25 million units/year.
Development of analytical technologies to continuously track blood pressure fluctuations.
Nebulizer and wheeze detector sales: 7.65 million units/year.
Fiscal 2020
Progress
Blood pressure monitor sales: 24 million units/year.
Conducted two clinical research projects. Launched telemedicine service in North America.
Nebulizer and wheeze detector sales: 3.41 million units/year. Launched wheezing sensor in Europe. Promoted
the value of wheeze sensors via seminars with doctors in Europe.
Social Value
Contribute to healthy lives globally by extending healthy life expectancies and reducing medical expenses (initiatives to
expand and continue blood pressure monitoring at home to achieve vision of zero heart attacks and strokes; early
detection and treatment of asthma via nebulizers and wheeze sensors).
Social Solutions
P49
Social Issues
to be Solved
Increase in traffic accidents and traffic jam.
Global warming from CO2 emissions.
Slow growth of the renewable energy market.
VG2.0 Goals
Create driving safety support systems and technologies.
Cumulative shipped capacity of solar power/storage battery systems: 11.2GW.
Build the energy resource aggregation business using solar power/storage battery systems (Japan).
Fiscal 2020
Progress
Analyzed and verified the correlation between risk and changes in driving behavior in certain psychological
states, including joint research on driving risk detection in collaboration with universities.
Solar power systems: Cumulative shipped capacity of 10.3 GW; Storage battery systems: Cumulative shipped
capacity of 695 MWh.
Provided PV inverters to maximize self-consumption and energy management systems for business continuity
measures in emergencies.
Social Value
Contribute to a safe, secure, comfortable, and clean society for all.
Contribute to building a sustainable society by promoting renewable energy.
19
StrategyOMRON Corporation Integrated Report 2021 Solving Issues Responding to Stakeholder Expectations
Human Resources Management
Employees are the most critical element to promote OMRON Principles Management. As employees supporting the growth of OMRON,
we enjoy our work and commit to building an attractive company that accepts the challenge of creating social needs that solve social
issues. We create and evolve conditions where the company and its employees can grow together.
Talent Attraction and Development
P65
OMRON’s
Initiatives
Human
Resources
Strategy
Securing and training of next-generation leaders (candidates for important positions).
Providing of a workplace environment that can attract and empower the diverse talent necessary for business growth.
Fostering of self-motivated employees who can achieve self-transformation and development.
VG2.0 Goals
Fiscal 2020
Progress
Examples
1 Continued evolution of TOGA*1 towards meeting OMRON Principles.
2 Ratio of non-Japanese in key managerial positions overseas: Two-thirds (66%).
3 Accelerate PDCA implementation through VOICE*2 employee engagement surveys.
1 Participation in the 8th (FY2019) TOGA Global Conference: A record 16,000 people, including 200 guests from outside
OMRON. Steadily accelerated the expansion of the circle of empathy and resonance.
2 Ratio of non-Japanese in key managerial positions overseas: Three-fourths (75%).
3 Response rate: 90% (established consistent cycle of listening to and implementing employee feedback).
For the 9th (FY2020) TOGA, a total of 51,033 employees (1.8 times entire employee base) engaged in 6,461 projects.
Used periodic talent reviews in the selection of successors, and in localized positions. Systematic provision of
opportunities for rotating roles and responsibilities as well as training aimed at the appointment of selected successors.
To create a work environment in which employees can fully express their abilities, we strengthened workplace
communications between superiors and subordinates, simplified rules, adopted systems for more flexible work styles,
and leveraged IT infrastructure.
Social Value
OMRON is creating leaders who can drive innovation and employees who possess and express diverse abilities to solve social
issues through our businesses.
*1 TOGA: An abbreviation for The OMRON Global Awards, a participation-type approach for employees worldwide to foster a challenge-oriented corporate culture that uses our business activities
to put into practice the OMRON Principles. Through these activities, each and every employee seeks to voluntarily take on the challenges of solving social issues, and of creating value.
*2 VOICE: VG OMRON Interactive Communication with Employee.
Diversity and Inclusion
P65
OMRON’s
Initiatives
VG2.0 Goals
Fiscal 2020
Results*2
Promoting career advancement for women (OMRON Group in Japan).
Promoting career advancement for persons with disabilities.
Advancement
of Diversity
1 Ratio of women in managerial roles: 8%*1 (OMRON Group in Japan).
2 Ratio of employees with disabilities: Increase number of such employees to above the legally-mandated ratio (OMRON Group in Japan).
1 Ratio of women in managerial roles: 6.7% (OMRON Group in Japan)
2 Ratio of employees with disabilities: 3.0% (OMRON Group in Japan) (legally mandated ratio: 2.2%)
Examples
Promoting career
advancement for
women
Provided leadership training, career training, and networking opportunities for female employees.
Trained managers in employee development skills.
Female management mid-career hires.
Enhanced systems that enable flexible work styles.
Employment of
employees with
disabilities
Empowerment support and verification of reasonable accommodations at all OMRON Group companies.
Established a consultation system and support for activities using professional counselors.
Expanded duties aimed at increasing employment opportunities.
Implemented heart barrier-free training—an awareness amongst everyone of accessibility issues.
Social Value
Achieving a workplace in which diverse human resources can play an active role, regardless of the presence of limitations
such as gender or disabilities.
*1: Ratio of women in managerial roles—April 2022 Goal/KPI. *2: is for April 2021, is for June 2020.
2
1
Wellness Management
OMRON’s
Initiatives
Advancement
of Health
Management
Issuing of employee health management declaration.
Implementation of employee education.
Implementation of initiatives towards ameliorating factors that inhibit good health.
VG2.0 Goals
Fiscal 2020
Progress
Improve awareness of wellness management (spread activities based on Boost5* globally).
Employees who have achieved at least three of the Boost5 categories: 45.3%. Issues related to exercise and meals
remained due to COVID-19. Online events held to improve health awareness of overseas employees.
Examples
Within Japan
Published the OMRON White Paper, and made employees aware of the relationship between Boost5
and employee health and performance.
As one measure to support smokers in quitting tobacco, the Quit Smoking Marathon was held to offer
them team support.
(In FY2020, OMRON Group companies in Japan adopted a policy prohibiting smoking during work hours
including break time while in the office.)
Overseas
Established unique Boost5 in each overseas region and implemented activities.
(10,000 steps-per-day challenge to all employees, weight-loss competition, kickboxing classes, health
seminars, mental health counselors, smoking cessation support by specialists, etc.)
Social Value
Promoting employee health management and fitness increases productivity and employee creativity, as well as contributing
towards job satisfaction and a sense of meaning in life for all employees. This is also effective in reducing medical costs.
*Boost5: We selected and created guidelines for five key themes for evaluating the health of mind and body (exercise, sleep, mental health, nutrition, and smoking).
20
StrategyOMRON Corporation Integrated Report 2021 Occupational Health and Safety
OMRON’s
Initiatives
Health and Safety-related
Management System and
Improvement Activities
Promote the acquisition of international health and safety standards at major production
centers.
Ensure personnel for promotion, and carry out education.
1 Number of major production centers acquiring international health and safety standards: Acquisition at centers comprising
VG2.0 Goals
80% of production.
2 Continue assignments of promotion personnel: All covered sites.
Fiscal 2020
Results
1 Completed certification for sites representing more than 80% of production capacity
2 Maintained assignments of occupational health and safety managers
Examples
Social Value
Introduced an OSH management system to investigate occupational risks; pursuing measures to improve processes for
self-directed recurrence prevention at each location.
Identified and prioritized regions/facilities requiring more personnel; implemented appropriate personnel assignments.
While ensuring compliance with laws and regulations concerning workplace occupational health and safety, we are creating a
work environment to ensure the wellbeing of all employees at the OMRON Group and to maximize their abilities, by striving to
create workplaces at which employees can work safely and healthfully — both physically and mentally.
Respect for Human Rights and Labor Practices
P71
OMRON’s
Initiatives
Human Rights-related Management
System and Improvement Activities
Establishment of management system (human rights policy and organizational structure).
Human rights risk analysis and corrective actions at production sites.
VG2.0 Goals
1 Define and adopt due diligence process.
2 Implement analyses and corrective actions regarding human rights risks at all production sites.
Fiscal 2020
Results
Examples
1 In addition to our own employees, we expanded the scope for employees of temporary staffing companies and
contractors, both in Japan and at targeted overseas sites.
2 Conducted risk analyses and implemented corrective measures at all 25 manufacturing sites.*
Developed training content for employees of contractors working at our locations; implemented human rights training for
representatives of the said employees; provided access to relief measures for employees of contractors.
Communicated our policies to employee dispatch companies and contractors.
Implemented risk assessments at 19 production locations using RBA SAQ (self-assessment questionnaire); confirmed all locations
qualified as Low Risk. In the Labor section, as well, sites qualified as Low Risk expanded to 16 (6 additional sites over the previous year).
Social Value
Achieving a better work environment in which the human rights of all people working in the OMRON Group are respected.
* Production sites accounting for 80% or more of Group production (excludes minor production).
Manufacturing, Environment
By putting the OMRON Principles into practice in a way that complies with its Manufacturing Policy,* OMRON will create social value and strives
to contribute to sustainable manufacturing. In conformance with OMRON’s Purchasing Policy, OMRON also seeks to achieve sustainable
procurement together with suppliers through purchasing practices that conform to our guidelines.
Product Safety and Quality
OMRON’s
Initiatives
Advancement of Groupwide
Product Quality Management
Conducting group-wide product quality management reform.
Reducing product safety risk.
VG2.0 Goals
Fiscal 2020
Results
Examples
Social Value
1 Ratio of newly developed products undergoing safety assessment: 100%.
2 Improve product safety assessments.
1 Product safety assessments for newly developed products: 100%.
2 Confirmed regular application to 101 newly developed products.
Expanded assessment details for the application of latest safety standards, laws, and regulations and to improve market and
customer usability, and applied this to assessment processes in each business.
Incorporating quality, safety, environmental, and human rights into products and services, to bring about sustainable manufacturing.
* OMRON’s manufacturing policy comprises three principles: Quality First; 3F (Front-loading, Flowing & Flexible), and H&E (Human-oriented & Eco-manufacturing). The 3F policy refers to the
creation of value upstream in the development process and delivering that which is required in the needed quantities and at the needed times. The H&E policy refers to achieving the best
match between people and machines and promoting humanity-focused, environmentally friendly manufacturing.
Supply Chain Management
OMRON’s
Initiatives
VG2.0 Goals
Fiscal 2020
Progress
Examples
Engagement with Partners
Promotion of sustainability self-assessment for important suppliers.*1
Introduction of management compliant with RBA,*2 and initiatives to maintain and improve this
1 Sustainability self- assessment for important suppliers (Partner Suppliers): 100% implementation ratio
2 Sustainability self- assessment: Achieve RBA score of 85 or more
1 Self-checks: 100% of critical suppliers.
2 All critical suppliers achieved at least 85 points (low risk) in RBA standard score.
Used individual meetings to dialogue with these suppliers, and to further communicate that sustainability self-assessment
is an issue for business.
Visited suppliers who have not implemented sustainability self-assessment, and requested their cooperation.
Conducted individual dialogues with suppliers with less than 85 points, and conducted follow-up to improve understanding
(Based on the improvement plans, we verified the consistency of initiatives between the person in charge at the critical
supplier and our CSR manager, completing the self-check.).
Social Value
By solving social issues in the supply chain in cooperation with suppliers, achieving a society capable of sustainable production and consumption.
*1 Sustainability self-assessment: Supplier self-evaluation of their own labor, safety, health, and environment, etc. initiatives using a questionnaire. 85 points or above is
considered low risk, whereas 65 points or less is considered high risk. Compliant with RBA (Responsible Business Alliance).
*2 RBA: abbreviation of Responsible Business Alliance. Global CSR alliance centered around the electronics industry.
21
StrategyOMRON Corporation Integrated Report 2021 Reduction of Greenhouse Gas Emissions
P72
OMRON’s
Initiatives
Advancement of
Green OMRON 2020
Reduction in greenhouse gas emissions by improving the efficiency of power usage, and by
introducing renewable energy.
Provision of products and services that contribute to the spread of clean energy.
VG2.0 Goals
Fiscal 2020
Results
Examples
1 Reduce total GHG emissions by 4% (vs. fiscal 2016).
2 Environmental contribution to exceed CO2 emissions from production centers
1 Reduced total GHG emissions by 50% (vs. fiscal 2016).
2 Environmental contribution of 826kt-CO2 > Production location CO2 emissions: 106kt-CO2
Examples of Greenhouse Gas Reduction
Solar power generation system installations: 3 locations in Japan, 1 overseas
Renewable energy procurement: 6 locations in Japan, 1 overseas.
Energy reduction through equipment upgrades and optimized operations (production site in Shenzhen, China).
Potential assessment by professionals to plan mid-term measures for energy conservation and use of renewable energy
at production site in Indonesia.
Social Value
Making sustainable manufacturing a reality by reducing greenhouse gas emissions, and bringing about decarbonized society.
Appropriate Management and Reduction of Hazardous Substances
P72
OMRON’s
Initiatives
VG2.0 Goals
Fiscal 2020
Results
Examples
Social Value
Advancement of
Green OMRON 2020
1 Reduce mercury through prevalent usage of digital thermometers and blood pressure monitors: 69 tons/years.
2 Stop use of equipment using CFCs in FY2018. Also stop use of equipment using HCFCs and mercury (fluorescent lamps) in FY2020.
Build a framework for the management of the chemical substances used in production processes.
Stop use or reduce the use of harmful chemical substances, responding to high social demand.
1 Mercury reduction: 70 tons/years.
2 Eliminated the use of equipment using CFCs in fiscal 2018, and equipment using HCFCs and mercury (fluorescent lamps)
one year ahead of schedule.
Exhibits at trade shows and academic societies for ongoing educational activities for doctors.
Realization of decarbonized society that is in harmony with nature, by reducing negative impacts of chemical substances on
people, organisms, and the environment.
Risk Management
OMRON promotes risk management that integrates all risk-related activities at the global level, in order to ensure business continuity and the
achievement of goals, while also fulfilling its social responsibilities. By disseminating the policies and rules established in-house, OMRON seeks to
build long-term relationships of trust with stakeholders while helping employees engage in work and business with pride and a sense of security.
Fair Business Practices
P30
Enhanced Compliance Program
OMRON’s
Initiatives
Periodic reviews of OMRON Group Rules for Ethical Conduct in order to reflect laws and regulations, and social demand of countries around the world.
Offer continuous, periodic and necessary training and education in order to maintain awareness of compliance and instill matters stipulated in rules.
Assess issues using the whistle-blower system and promptly take corrective actions.
VG2.0 Goals
Dramatic evolution of group governance.
Fiscal 2020
Results
Examples
Social Value
Completed OMRON Group Rules (OGR)* development and mechanism for global rollout.
CEO message (translated into 25 languages; delivered to all global company employees).
E-learning for all employees during Global Corporate Ethics Month (bribery prevention, etc.).
Use promotion videos and posters, etc., to encourage understanding of the internal whistleblowing system (Europe).
Implementing appropriate anti-corruption measures taking into account the political, economic, and cultural circumstances
of each country, and contributing to the maintenance of an orderly and healthy society based upon the rule of law.
Ensuring fair business practices in conformance with applicable laws of respective countries and global rules, thereby
contributing to the realization of the society that allows fair and free competition.
* OMRON Group Rules (OGR): Internal rules established as a foundation for management in order to ensure transparency, fairness, and globality of management, and to ensure appropriate
and prompt decision-making. These encompass 23 globally shared topics, including ethical conduct, risk management, unauthorized control, information security, safety assurance business
management, IT controls, accounting and funding, labor and occupational health, environmental management, procurement, and brand logo management.
Privacy and Data Security
P30
OMRON’s
Initiatives
Rebuilding an
Information Security
Management System
Support for revised and newly enacted laws worldwide concerning the protection of personal
information.
Strengthened technical measures to counter the sharply increasing cyber attacks.
VG2.0 Goals
Build a new information security system.
Fiscal 2020
Results
Consistent engagement in activities based on clearly defined responsibilities, including the promotion of measures by
specialized departments such as legal and IT, as well as regular activities by the Information Security Management Committee.
Examples
Survey into personal information protection laws in each country, and updated OMRON Group Rules.*
Improved training of employees in personal information security and dealing with targeted emails.
Globally conducted website vulnerability assessment and management monitoring.
Social Value
Enable appropriate management of confidential data and personal information to help conduct business safely and securely
in a digitized society.
* OMRON Group Rules (OGR): Internal rules established as a foundation for management in order to ensure transparency, fairness, and globality of management, and to ensure appropriate
and prompt decision-making. These encompass 23 globally shared topics, including ethical conduct, risk management, unauthorized control, information security, safety assurance business
management, IT controls, accounting and funding, labor and occupational health, environmental management, procurement, and brand logo management.
22
StrategyOMRON Corporation Integrated Report 2021 The Direction of Our Next Long-Term Vision
Positioning of Fiscal 2020 and 2021
In 2011, OMRON started Value Generation 2020 (VG2020), a plan that outlines a 10-year vision for our company.
Marking the plan’s final stage and last four years, fiscal 2017 was also the year we launched VG2.0, a medium-term
management plan which additionally defines our growth strategy to respond to social change beyond the timeframe
of VG2020. VG2.0 forecasts future world trends and social changes, incorporating these projections of the future into
our strategies. VG2.0 also reflects considerations of the SINIC theory (OMRON’s unique future predictive model) and
the international initiative Sustainable Development Goals. In VG2.0, we tackled the creation of social needs through
co-creative activities with customers and partners, while focusing on three anticipated business growth domains:
Factory automation (FA), healthcare, and social solutions. These are three domains in which we can expect to
experience business growth by contributing to the resolution of social challenges while at the same time
demonstrating OMRON’S strengths.
In response to the COVID-19 pandemic, we have positioned the two years from fiscal 2020 to fiscal 2021 as a period
of business reform with an eye not only on responding to the immediate crisis but also on the post-COVID world. We
see this as a time in which to accelerate business reform in order to realize sustainable growth in the coming age of
the new normal. Our next long-term vision will begin in fiscal 2022.
The Coming 10 Years as Perceived by OMRON
The world is facing extensive and unpredictable social change unlike anything which has come before, including natural
disasters becoming more powerful and frequent, a headlong plunge into a super-aging society, increasing economic
disparity, and an increasing risk of global division caused by US-China conflict. In addition, the COVID-19 pandemic has
caused people to question just what society and they truly need, transforming people’s values from a focus on material
to emotional wealth, and accelerating the creation of a new, sustainable society and economic system.
OMRON sees the next 10 years as a transition period during which time we will move from a socioeconomic system
predicated on increasing growth through mass production and mass consumption, to a socioeconomic system aiming
to realize a sustainable society. Going forward, in the process of realizing that sustainable society, OMRON perceives
that clashes between old and new values and the strain generated by the existing socioeconomic system will result in
a wealth of social issues which will need to be solved.
OMRON’s purpose
Looking back on our past, whenever the socioeconomic system has undergone great change, OMRON has always built
up its business and grown by identifying social issues and creating social needs. During the period of rapid economic
growth, OMRON solved the social issues found on production floors and at the sites of transportation infrastructure with
new solutions that used machines and systems to automate human work, bringing innovation to peoples lives and
creating an abundant society in which people can live in safety, security, and comfort. Further, in the time of the
advanced information society, OMRON has supported the development of lifestyles, industry, and society by applying
the extensive value it had generated to widely deployable system components and providing them to the global market.
In ways such as these, OMRON has identified the burgeoning social issues of the day and, by transforming them into
economic value, achieved growth together with society. When looking back on the challenges we have overcome using
the OMRON Principles as our driving force, we can perceive our raison d’être clearly. The purpose of OMRON’s
existence is to create social value through our businesses and continue to contribute to society. The next 10 years will
be a time when social issues well forth in the realization of a sustainable society, and they will be a time for OMRON to
demonstrate its raison d’être so that it may remain OMRON. In our next long-term vision, we aim to demonstrate our
reason for existing and respond flexibly to change even in a highly unpredictable society, identify social issues, create
social value and, at the same time, transform social value into economic value and maximize our corporate value.
OMRON Principles: To improve lives and contribute to a better society
Raison d’être: Create social value through our businesses and continue to contribute to society
Mechanism enabling the reproduction of social solutions on a larger scale
Create social value
Obtain proper profit
Reinvest
23
StrategyOMRON Corporation Integrated Report 2021 Social Issues Being Tackled by OMRON
In our next long-term vision, based on the perspective of the business domains we are engaged in and the
technologies which are OMRON’s strengths, we have identified the following social issues: Curbing CO2 emissions,
extending health expectancy, and cooperation and harmony between humans and machines.
In addition, in the resolution of those social issues, OMRON has established the following four solutions as business
opportunities to pursue and will be creating new value accordingly: Increasing sophistication on the production floor,
automating primary and tertiary industries, providing preventative medical support for chronic diseases, and delivering
energy solutions toward carbon neutrality.
Social Transformation Factors
Social Issues Being Tackled by OMRON
OMRON’S Opportunities for Growth
Climate change
Aging society
Curbing CO2 emissions
Extending health expectancy
Increasing sophistication
on the production floor
Automating primary
and tertiary industries
Increasing individual
economic disparity
Preventative
medical support
Energy solutions
Cooperation and
harmony between
humans and machines
OMRON’s Value Generation
What is needed in the transition period to a new socioeconomic system is a change in perspective. Industrial
structures will undergo drastic change, and so too will sources of value change. It is essential that we shift away from
a value generation system derived from a product value perspective and look at markets and ascertain the essence of
issues from the perspective of re-identifying intrinsic value, what we call a essential value perspective. From this
essential value perspective, OMRON will strive to maximize customer value and achieve social goals. To this, OMRON
will also be changing the forms in which value is implemented. In addition to conventional value implementation in the
form of goods, we will also be combining goods and services for each business and selecting the implementations
which offer the highest value.
At the same time, when one has an overarching view of the makeup of social issues from such a essential value
perspective, one can see that the requirements for realizing a sustainable society are complex, and that at times the
entire social system may need to be redesigned. Resolving these social issues and producing new value will be
difficult for OMRON to do alone. Accordingly, we will be accelerating our efforts to tackle the creation of new value
with a focus on collaboration with our partners.
Perspectives Needed for Value Generation
Product Value Perspective
Essential Value Perspective
Established OMRON’s position based on
existing industrial structures, and, from
within those structures, continuously seek
to increase value and improve product
performance and quality
Reexamine the makeup of social issues and,
with the aim of maximizing customer value
and achieving social goals, re-identify
intrinsic value
Implementation Needed
for Value Generation
Social implementation for business
value for which disparity between
goods continues to be important
Products
Services
Social implementation for business
value for which product use is high
I
n
d
u
s
t
r
y
l
a
y
e
r
s
OMRON’s
core value
OMRON’s
core value
Products
Value chain
OMRON's core value
Domain where OMRON's
value can expand
Domain where our partners
can expand their value
Services
24
StrategyOMRON Corporation Integrated Report 2021
CFO Interview
Constantly Evolving
ROIC Management
Enabling OMRON’s
Self-driven Growth
Director, Senior Managing Executive Officer
CFO and Senior General Manager, Global
Strategy HQ
Koji Nitto
Earning Capacity Further Enhanced
despite an Unprecedented Contingency
– You have led OMRON’s COVID-19
countermeasures requiring difficult decisions
amid the challenging situations found all over
the world. What are your thoughts looking back
on the previous fiscal year?
After launching the COVID-19 Emergency
Headquarters in January 2020, as deputy general
manager I oversaw the implementation of
countermeasures while working closely with each
business unit and our overseas sites. During the
pandemic, I focused on our responsibilities as a
member of local communities and our responsibility
to supply products to customers, with employees’
safety and health a top priority. The number of
infections varied by country and region, so our
basic policy was to disseminate information from
the headquarters in Japan while setting up
emergency headquarters in each region; thereby,
ensuring an independent and agile response,
including in terms of working styles.
Furthermore, we reduced fixed costs by more than
¥20 billion per year and actively worked on solution
proposal-based sales and business process reforms
utilizing remote work, in order to survive this crisis
when a substantial drop in sales was expected. As
a result, in fiscal 2020 we posted a 14.1% year-on-
year increase in profits, despite a downturn in
revenue, and gross profit margin, an indicator of
profitability, rose by 0.7 points to 45.5%, marking
the highest level on record.
Our reduction in fixed costs in fiscal 2020 went
beyond just cutting or stopping fixed costs. We
recognized this as an opportunity to transform our
conventional approaches to work, such as face-to-
face communication. Therefore, we were able to
lower fixed costs by ¥22.2 billion, well above the
target of ¥20 billion. At the same time, investments
in IT systems along with the future growth drivers
of the Industrial Automation Business (IAB) and
Healthcare Business (HCB) were carried out after
careful consideration during the COVID-19
pandemic. We were able to progress according to
plan because we worked with the shared
recognition that reducing fixed costs and making
growth investments are actions paving the way to
the future.
25
ROIC Management Underpinned by Portfolio
Management and Down-Top ROIC Tree
– Fiscal 2020 marked the final year of
OMRON’s 10-year long-term vision Value
Generation 2020. During this period, the
Company promoted management based on the
OMRON Principles using both ROIC
Management and Technology Management.
How do you evaluate the results over this 10-
year period?
Our corporate Principles form the foundation of
ROIC Management. Based on this recognition, we
are focusing first and foremost on rebuilding our
business portfolio. Our aim is to contribute to the
development of society through our business,
going beyond increasing sales and profits. If we
can supply the world with essential products, this
will naturally lead to higher sales and profits and
as a result we will be in a position to invest in the
next stage of growth. As such, we will explore
ways to enhance the value we offer by
accelerating growth investments in businesses
that generate profits. At the same time, since
Trends in Return on Invested Capital (ROIC)
businesses that do not generate profits do not
contribute to the world, we will search for the best
partner outside OMRON to take over these
businesses or consider exiting them altogether. In
making these decisions, we will not rely simply on
the numbers, but rather deliberate over the
technologies of these businesses and future
potential of the market.
ROIC was 4.8% in fiscal 2011 at the start of Value
Generation 2020. Since fiscal 2012, though, ROIC
has trended above expected capital cost of 6%,
with the 10-year average sitting at 10.3%. In fiscal
2020, ROIC fell back to 7.8%, but this was
impacted by the transfer of the Automotive
Electronic Components Business in fiscal 2019
and because cash on hand is at 4.6 months of
sales, which greatly exceeds the target range of
one to two months during normal times. Going
forward, in order to further enhance corporate
value, the cash stockpiled until now and the cash
generated from businesses in the future will be
used to strengthen existing businesses and invest
in new opportunities to accelerate our growth. We
will continue to increase capital efficiency and our
ability to generate future cash flow by allocating
management capital in the best way possible.
(%)
15%
10%
5%
0
8.6%
4.8%
13.4%
11.3%
12.7%
10.6%
14.1%
Average
during Value
Generation 2020
10.3%
Excludes impacts
from sale of AECB
7.4%
7.8%
9.7%
10.3%
Expected capital cost: 6%
11
12
13
14
15
16
17
18
19
20
FY
– Business Portfolio Management is
important in promoting ROIC Management.
OMRON had a total of 63 business units as of the
end of fiscal 2020. When evaluating business units
using ROIC, we have established the level of 6% of
expected capital cost for each business to measure
where corporate value is being undermined or not.
From this, the hurdle rate is set at 10%, exceeding
the cost of salespeople and administrative
departments. However, first discussions are held
based on present numbers while considering
differences in the business life cycle and stage,
without making a judgement based solely on this
hurdle rate, to determine problem areas and how
to make improvements. Next, an action plan is
formulated and explained which contains the
milestones and measures needed to clear the
hurdle rate. At that time, I take ownership as the
person responsible for ROIC Management and
need to reach a consensus with the heads of
business units.
Business units probably feel a constant sense of
pressure, but amid our discussions using the
common language of ROIC repeated every year,
composed and realistic opinions naturally emerge.
This includes recognition that a business unit’s
problems can be fully resolved organically,
determination of who to partner with, or whether it
is wise to transfer the business. Furthermore, from
the perspective of the company’s entire business
portfolio, we are now able to examine business
repositioning or organizational restructuring. For
example, we determined that IAB and HCB should
be focus areas as our core business, that the Social
Systems, Solutions and Service Business (SSB)
should develop the solutions business together
26
StrategyOMRON Corporation Integrated Report 2021 with the environmental business, and that the
Electronic and Mechanical Components Business
(EMC) should consolidate its production sites to
enhance its earnings structure.
In fiscal 2020, we added three business units to
investment domains (Category S) compared to
fiscal 2019 and removed four business units from
the profitability restructuring domains (Category
C), which greatly improved the evaluations of
business units compared to fiscal 2019. Going
forward, we will continue to deepen discussions
with business units using the common language
of ROIC to build a more powerful and pliable
business portfolio.
Furthermore, we have changed our expected
capital cost from 6% to 5.5% starting from fiscal
2021. The hurdle rate for the businesses, though,
remains the same at 10%. We will continue aiming
to enhance corporate value by improving ROIC
and lowering capital cost.
Business Units Subject to Portfolio Management (FY2020)
(Unit: billions of yen)
Net Sales: >¥10 billion
26 businesses
Net Sales: ¥10–3 billion
18 businesses
Net Sales: <¥3 billion
19 businesses
Category S ROIC: 10% or above; growth rate (annual): 5% or above
Category A ROIC: 10% or above; growth rate (annual): less than 5%
Category B ROIC: Less than 10%; growth rate (annual): 5% or above
Category C ROIC: Less than 10%; growth rate (annual): less than 5%
80
70
60
50
40
30
20
10
0
Evolving ROIC Management toward
Self-Propelled Growth
– Could you provide a general overview of
OMRON’s improved financial resiliency, which
can be considered as an outcome from a decade
of ROIC Management? Could you also share the
company’s cash allocation policy?
Looking at cash allocation, we have greatly
improved our earnings power compared to 10 years
prior and we have built up capital. Furthermore, we
integrated cash management operations globally
and established as system where cash can be
allocated by the Head Office.
Operating cash flow during Value Generation 2.0
(fiscal 2017 to fiscal 2020) has steadily risen owing
to our enhanced earnings power and efficient use
of working capital. Furthermore, we saw a major
inflow of cash together with these operating cash
flows following the transfer of AEC. Meanwhile, we
are funding capital investment aimed at future
growth and executing strategic investments such
as M&A focused on our core IAB and HCB
segments. As for shareholder returns, we
continued to pay out a stable dividend and initiated
stock buybacks in an agile manner considering
capital efficiency.
27
As a result of these initiatives, book value per share
(BVPS) at the end of fiscal 2020 totaled ¥3,009,
which is roughly double the level of fiscal 2010. In
addition, total shareholder returns including stock
price increased by 397.5% as of the end of fiscal
2020 when using the closing price as of the end of
fiscal 2010, roughly quadrupling.
As for our cash allocation policy including
shareholder returns, we will continuously increase
operating cash flow generated from existing
businesses and prioritize investments needed for
future growth, aiming to sustainably enhance
corporate value. After securing internal reserves
Book Value Per Share (BVPS)
(Yen)
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2,627
2,400 2,455
2,254
2,194
2,080
1,956
1,667
1,421
1,458
オムロン
TOPIX
397.5%
284.9%
239.9%
222.8%
242.3%
265.1%
（率）
3,009
350%
250%
150%
100.0%
187.3%
101.5%
76.6%
154.3%
10
11
12
13
14
15
16
17
18
19
20 FY
50%
10
11
12
13
14
15
16
17
18
19
20
年度
*Figures as of the end of each fiscal year in the case of purchasing
at the closing price as of the end of fiscal 2010.
StrategyOMRON Corporation Integrated Report 2021 needed to fund future investments, we will pay out
a stable and continuous dividend to our
shareholders. To efficiently administer surplus funds
accumulated over many years, we will work toward
management conscious of capital efficiency and
execute stock buybacks in an agile manner.
Trends in Cash Flow
Note 1: Figures presented exclude impacts of foreign exchange rates.
Note 2: Figures for cash flow from investing activities are presented separate from impacts due to business divestitures/acquisitions. Proceeds and
expenditures from business divestitures/acquisitions include “Acquisition of business, net of cash acquired (net with cash outflow amount),”
“Proceeds from sale of business, net of cash paid (net with cash outflow amount)” and “Decrease in investments in affiliates (increase)” appearing
in the consolidated statements of cash flows.
– How will ROIC Management evolve in
OMRON’s future growth?
There are new ways of generating earnings
through the service business and recurring
business amid the worldwide trend of combining
products and user experience. This change has not
been fully reflected in our Down-Top ROIC Tree
previously; thus, we will need to ascertain
initiatives underway while reviewing KPI as
necessary. At the same time, we will have to
establish a new indicator going forward, since
ROIC indicates the present value calculated as
financial information but cannot measure the value
of intangible assets linked to future growth. As
such, aimed at the next long-term vision, we are
holding discussions on indicators and visualization
of future growth including ESG (Environmental,
Social, Governance) issues and non-financial value.
– Fiscal 2021 has been positioned as the
starting line for the Company’s efforts toward
self-driven growth. As CFO, how will you work
to achieve this growth?
In addition to a recovering global economy, there
are growing demands in society to address
sustainability including reducing CO2 emissions.
In fiscal 2021, we will boost revenue across all
business segments by steadily capturing these
business opportunities. In addition, we will work on
structural reforms and on increasing added value by
strengthening the marketability of our products,
while prioritizing investments needed for future
growth along with continuously increasing
operating cash flow generated from existing
businesses aimed at continuing new working styles
implemented during the COVID-19 pandemic. After
securing internal reserves needed to fund future
investments, we will pay out a stable and
continuous dividend to shareholders. Additionally,
surplus funds accumulated over the years will be
used toward management conscious of capital
efficiency by executing stock buybacks in an agile
manner. We will minimize any uptick in fixed costs
to further boost earning capacity going forward.
Currently, our core IAB and HCB segments are
expected to see substantial growth in the future
and for this reason we will work to achieve robust
sales growth here. The cash generated from this
sales growth and strong earnings power will be
deployed to fund M&A, business alliances, and
investments in venture companies, unlocking new
growth opportunities, which will pave the way for
the next stage of our growth. To actualize this
growth, we will invest in human capital and further
accelerate digital transformation (DX) including the
evolution of our core IT systems currently
underway. Since both require a long-term
perspective, we will work toward each with an eye
toward future cash flows.
Today the world is experiencing profound changes
characterized by Volatility, Uncertainty, Complexity
and Ambiguity (VUCA). We will be left behind if we
simply maintain the status quo. In such an era,
OMRON will further strengthen its existing
businesses while also creating value based on new
growth opportunities. Under our next long-term
vision, we will evolve our business model by not
only providing value through products, but also
combining them with services and user experience
and co-creating with partners. Toward this end, in
fiscal 2021 we will speed up our business model
reforms and concepts for our next management
system to actualize growth during the next long-
term vision.
28
77.916020406080100120140160Proceeds from business divestitures/acquisitions (net)Cash inflowsCash outflowsFinancing cash flowInvesting cash flow (excl. business divestitures/acquisitions)Expenditures from business divestitures/acquisitions (net)Operating cash flow(Billions of yen)FY1718192073.771.262.229.410.393.820.425.133.689.80.522.320.935.033.140.835.415.07.2Income (85.1)Expenditure (37.3)Income (73.7)Expenditure (89.0)Income(71.7)Expenditure (76.2)Income (152.0)Expenditure (63.0)Income (104.1)Expenditure (45.5)StrategyOMRON Corporation Integrated Report 2021 ROIC Management
ROIC management consists of Down-Top ROIC
Tree and Portfolio Management.
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.
ROIC Management
Down-Top
ROIC Tree
Portfolio
Management
Down-Top ROIC Tree
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.
KPI
Drivers
Focus industries/
new product sales
Gross Profit
Margin
Services/recurring sales
Online channel sales
Number of innovative apps
Ratio of products with
standardized components
CD ratio/defects cost ratio
Per-Head Production #Units
Automation %
(Headcount Reduction)
Personnel productivity
Staff count in indirect
divisions
T cost/facility cost
Production life time
Fixed inventory value
Delinquent receivables
Added-Value %
Fixed
Manufacturing
Costs %
SG&A %
R&D %
Working Capital
Turnover
Capital investment
Synergistic effects from
M&A
Fixed Asset
Turnover
R
O
C
I
R
O
S
T
u
r
n
o
v
e
r
I
n
v
e
s
t
e
d
C
a
p
i
t
a
l
Portfolio Management
OMRON consists of approximately 60 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
B
S
Expecting Growth
Investment
C
A
Profit Restructuring
Examining Regrowth
)
%
(
e
t
a
R
h
t
w
o
r
G
s
e
a
S
l
)
%
(
e
t
a
R
h
t
w
o
r
G
t
e
k
r
a
M
B
C
S
A
ROIC (%)
Market Share (%)
29
StrategyOMRON Corporation Integrated Report 2021
Risk Management
Corresponding SDGs
Integrated Risk Management for Supporting
Global Business Activities
I
ESG
Legal:
Legal:
Macro:
Macro:
Macro:
Finance:
Finance:
Finance:
Business
strategy
Product
compliance
Anti-trust
Geopolitical
risks
Geopolitical
risks
Geopolitical
risks
Anti-bribery
External Risk
Market trends
Product safety
Market volatility
Geopolitical risks
Economic downturn
Ratings downgrade
Interest rate situation
Exchange fluctuation
Management, Business Strategy, Financial Risk
Overview of Business Risks
M&As and PMI
recovery of investment
Supplier ESG
insufficiency
Change in
international relations
Stricter laws
and regulations
OMRON started integrated risk
management in order to manage the
risks of the Group via a shared
framework in 2011, the same year
OMRON initiated VG2020. The reason
for this was that in order to rapidly
respond to the faster pace of change in
the operating environment and rising
levels of uncertainty, we needed to
become more attuned to risk, scenting
and addressing risks before they
became actualized.
We aim to develop effective risk
management whereby all employees
and management teams can work
together to solve issues arising from
environmental changes that cannot be
resolved at the working level. We work
to improve the quality of our initiatives
by following the plan-do-check-act
(PDCA) cycle on a global scale. We also
regard the accelerated business
environmental changes as
opportunities, and perceive determining how to take risks as an essential perspective. We are additionally addressing
how to build mechanisms enabling efficient, effective, and prompt risk decisions to be made while still adhering to the
OMRON Principles and relevant business rules.
Information
securities
Environmental
laws and regulations
m
p
a
c
t
o
n
m
a
n
a
g
e
m
e
n
t
p
e
r
f
o
r
m
a
n
c
e
Decline in
social evaluation
Climate change
and disaster
Product supply
disruption
Resource, Infrastructure Risk
Security trade
controls
a
n
d
fi
n
a
n
c
i
a
l
Component
shortages
Accounting
fraud
Natural Disaster Risk
Industrial accident
Contagious disease
Unforeseen disaster
Trade restraints
Patent disputes
Defects, recalls
System failure
Human rights
h
e
a
l
t
h
Procurement of
components:
Labor issues
Price changes
Data breach
Procurement of
components:
Tariff laws
Legal Risk
Accounting
finances
Tax
compliance
Information/
IT security
Information/
IT security
Natural
disaster:
Natural
disaster:
Crisis
response
Production:
Quality:
Legal:
Legal:
Labor
R&D:
ESG
ESG
ESG
ESG
Integrated Risk Management Structure
OMRON has established a PDCA cycle that is conducted throughout the year to analyze risks, respond to material
risks, and engage in crisis management. To promote initiatives on a global scale with all employees, risk managers are
appointed for each headquarters, division, regional headquarters, and group company across the world.
Activity Cycle for Integrated Risk Management
Corporate Ethics & Risk Management Committee
Execute Plan
Determine risk response plan for the upcoming year
Determine budgets for the upcoming year
Plan
Do
Share and report information related to material risks
Conduct activities based on the plan
Corporate ethics month
Board of Directors
Annual activity review
Executive Council
Act
Check
Headquarters, regional headquarters, divisions
Corporate Ethics & Risk Management Committee
Analyze Global Risk
Report the progress of activities for the current year
Report the results of global risk analysis
Determine material Group risks for the upcoming year
Annual activity review
Share analysis of risks
Identify material Group risk candidates
Disclose Results of Activities
30
StrategyOMRON Corporation Integrated Report 2021
Risks Surrounding Management and Businesses, and Risk Analysis
As OMRON does business globally, we must respond to a variety of risks. Therefore, the OMRON Group breaks down
all risks that may impact its management or financial condition into categories and determined their interrelationships.
For major risks, we regularly (at least once a year) conduct comprehensive analyses of expected environmental
changes, the appropriateness/sufficiency of Group measures, and actual risk cases that have occurred, and rank these
risks accordingly. S-rank and A-rank risks, as defined below, are called significant Group risks. For these, we monitor
the implementation status of countermeasures and situational changes.
S Rank: Risks of utmost importance to the operation of the Group, which may jeopardize its survival or bring severe
social liability.
A Rank: Risks that impede the achievement of important Group goals
Addressing Material Group Risks
The following examples of significant Group risks represent those matters related to business and finance which may
impact the Group’s operating results and financial condition (including stock price). Items which have undergone a
particularly extensive change in management or business environment and which the OMRON Group is currently
prioritizing are labeled with an asterisk in the table below. However, this is not an exhaustive list of all risks; the Group
may be affected in the future by risks that are not currently foreseeable or considered significant.
Matters discussed here that are not historical fact reflect the judgment of OMRON Group management as of June 25,
2021 (the date of submission of the annual securities report).
S Rank
* COVID-19
* Global information & IT security
* Business continuity
* Quality issues
Crisis response
Accounting/financial fraud
Violation of global laws and regulations
(e.g. cartels, bribery)
Risk
COVID-19 (S Rank)
A Rank
* Geopolitical risks
* Addressing sustainability issues
Human rights risks
Climate change risks
* Recovering M&A and alliance investments
Product compliance
Tax compliance (e.g. customs)
Group company governance systems
Internal fraud
Labor issues
Employee safety
Intellectual property disputes and
legal proceedings
Environment/occupational health
and safety
* Priority topics to be addressed
Risk Scenario
Since the OMRON Group does business at locations and with suppliers on a global scale, prolonged spread of
COVID-19 worldwide would significantly impact Group business activities. Specifically, in the event of decreasing
demand caused by stagnating customer business activities and capital investment or stagnating individual
consumption, or in the event of delayed supply of products to customers over the long term due to events such as
stoppages in parts supply from important suppliers and internal outbreaks of infection, the reduced production
performance and declining sales could impact the Group's operating results or financial condition.
Measures
Continuing from our efforts last year, the Pandemic Response Headquarters, led by our CEO, addresses the
pandemic with top priority to ensuring health and safety of our employees and the prevention of the spread of
infection in regions where we operate. In addition, based on our COVID-19 Business Continuity Plan (BCP), we are
continuing to expand telecommuting and take infection control measures in the workplace in consideration of
various national government/regional laws, regulations, and guidance. Infection status and Group efforts to address
the pandemic have been brought up and discussed at the Board of Directors as a priority topic. In addition, we are
working to improve productivity through new work styles such as remote work and going paperless cultivated amid
the COVID-19 pandemic, while promptly responding to demand generated in the pandemic armed with ample
infection control measures.
Assuming a future business environment with COVID-19, we will continue to maintain our supply chain, accomplish
our responsibility to supply our customers, and fulfill our social responsibilities.
[Major Initiatives]
Implementation of measures based on the COVID-19 Business Continuity Plan (BCP) Monitoring of suppliers
in major countries (54 countries/regions)
control measures Monitoring of infection outbreak status, work attendance rates, etc.
Implementation and continuous improvement of in-house infection
31
StrategyOMRON Corporation Integrated Report 2021 Risk
Global information & IT security (S Rank)
Risk Scenario
The OMRON Group possesses essential business information, as well as personal or confidential information
obtained from business partners during the course of business. New, growing cyberattacks worldwide and
revisions to laws on data and personal information protection in the Americas, China, and Asia, such as stronger
enforcement of GDPR* in Europe, are greatly impacting business activities. In the event of leakage of essential
confidential or personal information due to virus infection of the Group's IT systems, suspension of production
activities, or insufficient Company management in accordance with personal information laws and regulations of
various nations in data, imaging and other businesses, the stoppage of business activities, administrative
penalties, damage to social trust in our brands, and other instances could impact the Group's operating results or
financial condition.
*GDPR: EU regulations for protection of personal information
In order to strengthen information security on a global scale, we hold integrated cybersecurity meetings under
the control of the CFO, creating a system for monitoring and taking preventive actions before risks arise even
during normal times, and for taking unhindered, prompt action in the event of an incident. We also evaluate
measures based on global standard information security management systems, and address issues accordingly.
Furthermore, we have established Group rules on information security and personal information protection. We
are improving the effectiveness of our measures in these areas through initiatives such as website vulnerability
checkups, cyberattack drills, and employee education for enhanced information literacy.
Measures
[Major Initiatives]
Website vulnerability checkups and addressing issues Segmenting factory network environments and
strengthening protection Conducting cyberattack drills
analyses of increasingly sophisticated cyber risk cases Understanding personal data regulations and
implementing measures to protect individual rights Thorough handling of information based on information
security rules(e.g. usage, storage, disposal, measures to take in the event of an incident) Employee education for
enhanced information literacy
Implementing data encryption measures based on
Risk
Business continuity (S Rank)
Risk Scenario
The OMRON Group operates production sites in China, Asia, and other regions around the world. We deliver
products to our clients globally through sales sites in these countries and regions. The supply chain for parts and
other items used by the Group is also diversified in processes globally, from materials procurement to the
production assembly process. Our dependence on highly-competitive manufacturers is increasing. Recently,
climate change has caused major natural disasters and earthquakes, large-scale fires at business partners, and
other unforeseen disasters. Tightening product supplies due to this and rising demand has a significant impact on
our business activities. In the event that social infrastructure or economic activities were to halt in a broad area,
or if supply shortages were to occur for critical components, our business activities could be partially suspended
or curtailed, which could have an impact on OMRON Group operating results or financial condition.
Measures
The OMRON Group has devised a business continuity plan (BCP) for not only production, but also purchasing and
procurement, logistics, and IT, and is taking actions to provide for necessary safety measures, business
continuity, and rapid recovery in preparation for the outbreak of new infectious diseases and all kinds of natural
disasters. We also conduct simulations and training drills for emergency situations, operate an employee safety
confirmation system in preparation for disasters, and stockpile emergency food and drinking water to improve
the effectiveness of our continuity plans.
Furthermore, in preparation for an emergency in the supply chain, we are taking measures such as building a
mechanism to ascertain parts supply risk immediately after a disaster and securing strategic parts inventory
according to degree of importance. At present, global supply of semiconductors is tight due to greater use of
electrical equipment in automobiles and increasing demand for personal computers caused by the COVID-19
pandemic-driven acceleration of remote work, as well as due to the expectations of economic recovery in Europe
and the United States. While resolution is not considered likely over the short term, we are striving to secure
supply through strong trust relationships and close communications via strategic dialogue with our suppliers. At
the same time, we are trying to minimize risks by exploring and adopting alternative materials for high-risk parts.
[Major Initiatives]
Formulating and updating business continuity plans (BCP) Conducting simulations and training drills
Centralized management of supplier production area information and establishment of evaluation systems for
alternative production sites Understanding and analyzing market/material information using third-party
information Regular meetings with suppliers (dialogue based on information analysis) Securing parts
inventories according to degree of importance Establishing escalation routes for emergencies
32
StrategyOMRON Corporation Integrated Report 2021 Risk
Quality issues (S Rank)
Risk Scenario
The OMRON Group aims to provide products with a high degree of novelty for accelerating technological evolution
and resolving social issues. Increasing demands for product safety and accuracy, as well as for reporting and
actions taken against product quality defects, and furthermore the globally-growing rigorousness of environmental
chemical substance regulations covering products (such as the European RoHS Directive) and laws, regulations,
and standards relating to product safety are greatly impacting business activities. In the event that we provide
inadequate product design/inspection, inappropriate customer support, or inappropriate reporting, or in the event
that we are non-compliant with laws, regulations, and standards, the resulting large-scale recalls or damage to
social trust in our brands could impact the Group's operating results or financial condition.
In order to maximize customer satisfaction, we have established a basic quality policy based on the principle of quality
first. We have also established a quality management system based on international standard requirements. In addition,
in order to further our quality governance, the Global Procurement and Quality Management HQ, which conducts
top-level oversight of quality, holds company-wide quality meetings. In addition, we have established and enforce
Group rules regarding our quality assurance system, quality assurance activities, and management in the event of a
serious quality issue. Furthermore, we are strengthening our management system by ascertaining trends in globally-
changing environmental and safety-related laws, regulations, and standards related to products and other areas.
Measures
[Major Initiatives]
Acquisition of ISO 9001 / ISO 13485 / IATF 16949*1 Internal audits of QMS*2 at business companies Promotion of
design process problem solving activities Currently working to ascertain trends in environmental and safety-
related laws, regulations, and standards related to products and other areas, and to strengthen management
systems conducting impact assessments
*1 ISO 9001: International standard for quality management systems
ISO 13485: International standard for quality management systems for medical devices
IATF 16949: International standard for quality management systems specifically for the automotive industry
*2 QMS: Quality management system
Risk
Geopolitical risks (A Rank)
Risk Scenario
The OMRON Group operates production sites in China, Asia, and other regions around the world. We deliver
products to our clients globally through sales sites in these countries and regions. Changes in policies and
regulations following shifts in international relations, such as U.S.-China relations, greatly impact our business
activities. In the event that various national export regulations, technology transfer restrictions, and tax
increases impose limitations on development, production, logistics, and sales activities, this could impede the
delivery of products to our customers, impacting the Group's operating results or financial condition.
We regularly monitor global political and economic conditions and trends in laws and regulations, ascertaining
changing business environments in each area and their impact on our performance. We are also exploring systems for
rapidly analyzing and generating insights on the state of optimal production, research and development, and intellectual
property management, as well as on the impact of changes in laws and regulations on our various businesses. In
addition, export regulations in various countries have wielded greater influence in recent years. Our Global Risk
Management and Legal HQ manages a company-wide export control committee, conducting proper security trading
management. These initiatives have been brought up and discussed at the Board of Directors as a priority topic.
Measures
[Major Initiatives]
Analyzing and evaluating policies such as tariff increases in major countries, export restrictions, and emerging
technology trading restrictions based on security export controls Re-evaluating transaction formats and our
supply chain Building a system to manufacture products in parallel at multiple locations
Risk
Addressing sustainability issues (human rights risks) (A Rank)
Risk Scenario
The OMRON Group has business locations around the world, and does business with suppliers across a
number of countries. Awareness of business and human rights is growing more and more, particularly in
developed countries. The increasing demand by stakeholders for addressing ESG concerns at a higher level,
such as calls to address human rights and conflict minerals in the supply chain, greatly impacts our business
activities. In the event that the Group and its suppliers were to fail to appropriately address these, the resulting
suspension of customer transactions, administrative penalties, or damage to social trust in our brands could
impact the Group's operating results or financial condition.
We maintain legal compliance in each country and region, refer to international rules and guidelines regarding
sustainability, such as ISO 26000*1, and have formulated OMRON Group policies and codes of conduct. We have
also declared our compliance with the UK Modern Slavery Act and have publicly announced Group initiatives to
address human rights. We are also taking other measures, such as operating global whistle-blower hotlines.
Regarding human rights risks, which fall under our sustainability targets, we are advancing initiatives through
discussions at the Sustainability Committee, with the oversight and supervision of the Board of Directors. We also
require our suppliers to manage their affairs properly in line with our sustainable procurement guidelines.
Measures
[Major Initiatives]
Establishing OMRON Group Sustainable Conduct Policies and OMRON Group Rules for Ethical Conduct
Implementing RBA*2 risk assessments (at all 25 production sites*3) Declaring compliance with the UK Modern
Slavery Act Conducting human rights training (Japan, China) Operating whistle-blower hotlines worldwide
Conducting human rights training for on-site outsourced employees and establishing whistle-blower hotlines
(Japan) Presenting sustainable procurement guidelines to suppliers and confirming compliance status
*1 ISO 26000: International standard for social responsibility
*2 RBA: Responsible Business Alliance
*3 Production sites accounting for 80% or more of Group production (excludes minor production)
33
StrategyOMRON Corporation Integrated Report 2021 Risk
Addressing sustainability issues (climate change risks) (A Rank)
Risk Scenario
Customers, suppliers, and society as a whole are calling for reductions in greenhouse gas emissions in the
supply chain toward a decarbonized society as well as environmental consideration in products and services as
an international response to climate change risks.
The OMRON Group has business locations around the world, and does business with suppliers and customers
across a number of countries. Due to the rise in energy prices as a result of tightening regulations in various
nations, additional capital investment to address energy savings and renewable energies, and impact from the
introduction of carbon taxes, there are risks of increasing business costs. Furthermore, in the event that OMRON
and its suppliers were to fail to appropriately address these, the resulting suspension of customer transactions,
administrative penalties, or damage to social trust in our brands could harm business opportunities. If the
aforementioned risks were to become apparent, this could impact the Group's operating results or financial
condition.
The OMRON Group maintains compliance with environmental laws, regulations, and guidelines in each country and
region, and has formulated Group policies with reference to international rules. We have also launched analyses of
business opportunities and risks given future regulatory trends. In our declaration of the OMRON Carbon Zero
target, we aim for the company to emit zero greenhouse gas emissions in 2050 (Scopes 1 and 2), and are steadily
reducing emissions each year to achieve this goal. We have also declared our support for the TCFD*1. We conduct
governance, risk management, target-setting, and strategy-building in accordance with this framework, and disclose
information accordingly.
Regarding reduction of greenhouse gas emissions and increase in environmental contribution*2, which fall under our
sustainability targets, we are advancing initiatives through discussions at the Sustainability Committee, with the
oversight and supervision of the Board of Directors.
Measures
[Major Initiatives]
OMRON Carbon Zero declaration Setting greenhouse gas emission reduction targets, implementing energy
savings, implementing captive consumption of renewable energy, and advancing other initiatives based on the
SBT*3 Declaring support for TCFD, disclosing information in accordance with this framework, and implementing
Increasing environmental contribution*2 Presenting sustainable procurement guidelines,
scenario analyses
including for addressing climate change, to suppliers and confirming compliance status
*1 TCFD: Taskforce on Climate-Related Financial Disclosures
*2 Environmental contribution: CO2 emissions that can be reduced by utilizing products and services related to
energy creation and savings in society
*3 SBT: Science Based Targets, a series of medium to long-term targets for greenhouse gas reductions based on
scientific evidence
Risk
Recovering M&A and alliance investments (A Rank)
Risk Scenario
The OMRON Group considers M&A and alliances to be necessary strategies for future growth. In accordance
with this, we work to improve the corporate value of the Group with M&A, alliances, and divestment of business
based on portfolio management*.
Here, in the event that governance or compliance issues arise at the company to receive investment, which could
not be identified even with prior investigation, or in the event of failure to achieve the expected sufficient
synergistic effects due to dramatic deterioration in the economy, changes in the competitive environment, or
changes in laws and regulations, etc., there is a risk that impairment losses may occur due to failure to achieve
the expected results, impacting the Group's operating results or corporate value.
*Portfolio management: Efforts to evaluate businesses based on assessments of economic value and market
value for the approximately 60 business units OMRON controls at present
Measures
When executing M&A and establishing alliances, we form project teams comprised of members from business
divisions, headquarters units, and outside experts. These teams issue investment determinations in consideration
of risks and synergistic effects from collaboration with the Group based on confirmation of financial and contract
details with the company in question and a detailed preliminary examination through conversations with
management, among other actions. Even after the acquisition, business divisions and HQ units work together to
formulate and execute a post-merger integration (PMI) plan given the business strategy and risks. In addition, the
performance of the company in question, the progress of the relevant business strategy, and the assessment of its
business value are regularly reviewed by the Company's Board of Directors.
[Major Initiatives]
Exploring and assessing M&A and alliance candidates based on business strategy Formulating due diligence
and business plans according to M&A and alliance projects Review of specific target progress for post-acquisition
economic impact by the Company's Board of Directors(At least once a year)
34
StrategyOMRON Corporation Integrated Report 2021 CTO Interview
Technology Management
Centered around our
Corporate Philosophy
Representative Director, Senior Managing
Executive Officer, CTO and Senior General
Manager, Technology & Intellectual Property HQ
Kiichiro Miyata
Architectural Thinking Required in
Changing Times
– We have now been living with the
COVID-19 pandemic for one and a half years.
From the perspective of a CTO, what changes
do you consider COVID-19 brought to society
and business?
COVID-19 has resulted in huge, fundamental
changes worldwide. People’s lives are now
different, new values have emerged, and
business rules and practices have changed.
Taking a broader view of these changes, however,
shows that we are being swept along by major
trends. This trend is digital transformation (DX),
which is fundamentally changing the way in
which society and industries function.
All around the world, the internet connects
people with people, people with things, and
things with things—diverse knowledge and
information are generated, distributed, shared,
and they are available whenever needed, in the
needed formats. What makes this all possible is
the exponential evolution of computing power.
The pandemic has resulted in dramatic increases
in the pace of these changes, and given that
operating as we have done before is no longer an
option, we need a fundamental rethink of what is
really necessary.
For us as well, the pandemic has presented an
opportunity to review the core value of science
and technology required when confronted by rapid
social change, and to envisage a future that we
should aspire to. With the imposition of a state of
emergency in spring last year, OMRON employees
in principle had to work from home. In their efforts
to carry out R&D and create new businesses, the
Technology & Intellectual Property HQ and the
Innovation Exploring Initiative HQ (IXI) also had to
rein in some of their collaborative creation
activities, especially some with parties outside the
company. However, thanks to this, we were able
to spend three months discussing in depth the
areas that OMRON really needs to work on, the
value within those areas, and what should be
stopped or changed, without relying on any
assumptions that had hitherto been made.
Through this, we reaffirmed the importance of our
“architecture capacity.”
This architecture capacity is the ability to look
three to five years hence, precisely define an
image of society at that time, and determine what
social issues will need to be resolved, and then
design and put in place the three architectures—
business, technology, and intellectual property—
that are needed to solve the problems and create
social needs. Our experience in this
unprecedented crisis that is the pandemic has
made me very aware that this architecture
capacity is indispensable in order that we can
respond flexibly to change.
35
– Have any businesses been spurred to make
reforms by the pandemic?
Remote patient monitoring are a good example. In
many parts of the world, people hesitate going to
hospitals for fear of infection, and even in Japan,
the ban on online initial diagnoses of patients has
been lifted. However, even if we get past the
COVID-19 pandemic, issues such as shortages of
medical staff and a skewed distribution of medical
services towards urban areas will not
fundamentally be resolved, and are likely to
worsen. It is here that we expect demand for
remote consultation services to grow.
OMRON has invested in U.S. startup AliveCore,
Inc. that provides home electrocardiographs, as
well as Dutch company Luscii Healthtech B.V. that
provides online medical services, and is moving
forward with business alliances. Also, through our
internal venture capital company OMRON
VENTURES CO., LTD. we are investing in British
company Patients Know Best Ltd. that is
developing a medical data sharing system, and
have started collaboration. We have considered
the digitization of healthcare an area for strategic
investment area for some time, but the COVID-19
pandemic has brought this to the fore.
Organizational Mechanism for
Solving Social Issues
– One of the mechanisms that supports
management based on the OMRON Principles is
“Technology Management.” What is OMRON’s
Unique Technology Management that the
company has been aiming for in VG2020?
Based upon OMRON’s Corporate Motto, the idea
of discern new, hitherto not perceived social
needs, and solve social issues is at the core of
what we consider Technology Management.
Central to this is the future predictive SINIC
theory that acts as a lodestone for OMRON’s
management, and that was presented by
company founder Kazuma Tateishi at the World
Futures Studies Federation. This theory was born
from his strong conviction that it was necessary
to grasp social needs by predicting future
society, and to conduct management and
business based upon these. The SINIC theory is
based upon the idea that science, technology,
and society will mutually interact with each other
thus leading to a virtuous cycle—from these,
OMRON’s particular emphasis is upon society.
OMRON has a unique approach of predicting
how society will change and what issues will
arise as a result, and using science and
technology to resolve these issues.
Our founder excelled at quickly perceiving
indications of change in the world, creating a very
specific vision of the future that no-one else had
noticed, and understanding social needs.
However, when the company no longer had
someone with this particular skill, we were
confronted with the problem of who would be
able to forecast future social needs, and come up
with solutions for these. Accordingly, we have
established OMRON SINIC X Corporation (OSX) in
2018 together with IXI, an OMRON Group-wide
innovation platform, in order to work
systematically on business creation and
developing solutions based on SINIC theory. This
is nothing less than putting into practice
“ambidextrous management”—this
simultaneously promotes the deepening of
existing businesses together with the quest for
and establishment of new businesses.
P4 SINIC Theory
– Please tell us about the roles of IXI and
OSX, and their performance.
We are creating an image of the near future, and
working on the architecture for the strategies
needed to make this a reality in terms of
technology, intellectual property, and business
models. IXI is the organization that promotes this
process of backcast-type innovation creation.
OSX, however, is a strategic location that is
tackling the creation of designs for the near future,
based around technological innovation. This is an
independent company that adopts a free research
and development style not constrained by
conventional OMRON systems and rules, and that
hires from outside the company top human
resources in the fields of cutting-edge
technologies. We are working on open innovation
with a diverse range of members.
In the three years since IXI and OSX started, we
have established the “template” for the OMRON-
style innovation that we are pursuing. This is an
Integrated Innovation Process that combines new
business development with knowledge sharing.
This process comprises four phases, namely
“Phase 0: Business Ideation,” “Phase 1: Strategy
Formulation,” “Phase 2: Business Verification &
Technology Validation,” and “Phase 3: Business
Development.” The most difficult of these is Phase
0. Determining the kinds of seeds to select for
innovation, whether these respond to legitimate
social needs, and whether these can be scaled up
for a business exceeding its capital cost is no easy
task.
P63 OSX
P59 IXI
– How did you overcome this problem?
This time, we focused on “planting the flag.” At
OMRON, when employees declare that they
have set high goals, we refer to this as “planting
the flag,” and we have also expanded this flag
planting culture for working with business
partners. For example, even though ostensibly a
robotics business, our making a specific, pointed
declaration on this will clarify what types of
36
BusinessOMRON Corporation Integrated Report 2021 – Please tell us about some projects in the
works using IXI.
I’ll introduce two challenges that aim to create
new businesses, from the perspective of
creating social needs. One of these is our agri-
automation project in China, currently
undergoing business verification. This is so-
called smart agriculture that utilizes OMRON’s
strength of “Sensing & Control + Think” core
technology. We are verifying an Agricultural
Cultivation Support Service that automatically
measures sunlight, temperature, humidity,
carbon dioxide levels, and other variables,
thereby determining optimal conditions for each
crop and providing timing for when to open and
close windows, irrigate, and similar. A feature of
this service is that it is unique in not providing
hardware in order for automation or to save
manpower—rather it provides information that
helps humans in making decisions. Its
instructions let even those workers with little
farming experience produce high-quality crops
both efficiently and stably. At the same time as
helping resolve social issues such as shortages
of agricultural workers and food safety and
security, this will also improve the ability of the
algorithms to analyze and provide feedback for
the data obtained from the system.
Another challenge currently in the business
verification phase is a service using ICT to
provide long-term care prevention services for
the elderly under a partnership agreement with
Oita Prefecture. We know that it is possible to
prevent a high percentage of elderly people from
progressing to needing nursing care if they can
be adequately supported by nursing care
specialists at the stage where they need
assistance. However, there is a serious shortage
of specialists who have the skills and expertise
in this field. Accordingly, we have developed
software that replicates the procedures and
thought processes of nursing care specialists.
We first asked the elderly themselves and their
families about issues with daily life, and how
they’d like these improved. We then analyzed
these responses using this software, so we
could formulate a plan for life function training.
At present, the commonality between these two
products, which we are now aiming to
commercialize, is not only that they respond to
social needs, but the concept of “harmony
between humans and machines.” Specifically,
this is a hybrid system in which technology
assists humans in maximizing their own abilities
and their motivation.
P59 IXI
technology and management resources will be
needed as well as who we should work with,
and what is still lacking in order to expand.
Another thing we have learned is to not trust too
much to on-site judgment. The more we aim for
creation of a business that can predict the future
and that can at times even reform social systems
themselves, the more complex laws and
regulations as well as relationships with
stakeholders become, posing an onerous
responsibility and burden for the sites alone.
Therefore, we ventured to introduce a centralized
decision-making system. This does not, of
course, mean that we only use top-down
decisions. Without losing our sense of haste, top
management stresses conducting discussions
and making rapid decisions with personnel on-
site.
As the speed of change accelerates, rather than
continuing with cautious discussions into
whether something is right or not, the most
important thing is to make a decision. If that
decision proves to be wrong, then we should
learn from that failure, and start over.
Documenting this process makes it useful
knowledge that can be shared.
– Are these seeds ever in short supply?
No, they’re not. This is because all OMRON
employees are provided the opportunity to think
of themes, and take it upon themselves to work
towards making products or services commercially
feasible. IXI is not simply a dedicated organization
for creating new business, but rather a platform.
This has as its purpose having people aware that
new business development is not just something
to be done by others, but instead the entire
group’s ability to create innovation is also
something they need to embrace.
The Technology & Intellectual Property HQ has up
until now also been considering many new
themes. However, there are some areas that are
still unclear in the process of selecting themes,
so from this year we have streamlined how to
select business ideas in Phase 0. Ideas that have
been brought in are refined in weekly themed
meetings, and discussions are held to determine
the next step. Each presentation is limited to 10
minutes and five pages, with plenty of time
spent on discussions. I am the organizer of these
themed meetings, and as such have attended all
of them.
The important thing here as well is to reach
conclusions, or put simply, make decisions.
I briefly cover and share with everyone involved
what we need to do as the next step or whether
this is to be halted, and the reasons for this.
I feel strongly that these highly transparent
discussions and prompt decision-making
processes foster a mindset of innovation within
the company.
37
BusinessOMRON Corporation Integrated Report 2021 Changing our Business Style and Seeking Self-
driven Growth through Collaborative creation
– President Yamada is committed to
achieving self-driven growth—increasing
earnings and growing steadily even under
adverse business conditions. As the CTO, how
are you supporting him?
There are two main challenges we need to
confront. The first is to change our existing
business model, or put differently, our business
style. Our existing business model will only serve
us in the future if the market itself is growing, or if
we can acquire more market share from our
competitors. For OMRON, the increasingly aging
population means that the healthcare market is
expanding, and we hold the top market share, so at
this point we have some control over the market.
However, this may not be the case in the future.
We therefore need to change our business style.
OMRON’s business style up until this point has
been to use our technologies and products to
solve problems faced by customers. Put
differently, we have been providing product value
perspective. However, society is in the midst of
rapid changes, with issues faced by customers
becoming increasingly complex. Solving
fundamental issues thus requires of us a business
model that not only differentiates between
technologies, but that also takes a broader view of
social structures. This is why we are working for
essential value perspective business expansion
centered around IXI. We will evolve our business
style into one that selects the optimal form of the
social implementation of value, including in areas
into which we have not yet forayed.
The other challenge is of collaborative creation.
Given the current pace of the times, we cannot
hope for innovation if we only pay attention to self-
reliance. Furthermore, we will be changing our
business style as well as making forays into new
business fields, so the key will be who we work
with in order that we can quickly acquire new
technologies and business models that we do not
yet possess. Since I assumed the position of CTO,
we have put forth our policy of open innovation, as
well as accelerated cooperation with external
companies, start-ups, and research institutions.
I expect that the know-how and partnerships
gained from this will provide support for OMRON’s
self-driven growth.
P62 OVC
– What is your approach to future technology
development not only for new, but also existing
businesses?
Within the Technology & Intellectual Property
HQ, around 40% of the themes are for
technology development requested by our four
business divisions, but this is of course not
enough. Rather, it is important that we can
unearth the multifarious requirements for
technology that our business units have not yet
picked up on. I would like more of a focus on
technical development, which is planting the flag
for business with technology as a starting point.
Further, building black box technologies and
related business models is indispensable if we
are to deepen and evolve our existing
businesses. Our arsenal includes our unique,
difficult-to-reproduce algorithms for data analysis
and providing feedback, and the question is how
we can further polish these. This is a vital point
for our ambidextrous management.
– The long-term vision for the next period is
starting. As the CTO, how will you commit to
this?
The COVID-19 pandemic has revealed a raft of
vulnerabilities in the current global situation.
Based upon the SINIC theory, at OMRON we
believe that after achieving an optimized society
formed from an integrated balance of humans
and machines, we will arrive at an autonomous
society in which social issues are resolved from
a basis in these new values. However, achieving
this requires that the three elements of science,
technology, and society mutually stimulate
each other and thus develop. Encouraging
this synergy will deepen and evolve the very
significance of our existence.
Specifically, we see that OMRON’s strengths
can be demonstrated through points of interface
between humans and machines. The more
automation progresses not only in medicine and
nursing care but also in manufacturing plants,
the clearer the role of humans will become.
This point of contact between humans and
machines is precisely where OMRON excels—
I’m proud to say that our capabilities for social
implementation can hold their own.
However, it is not so much our technical
capabilities that enable this, rather our
architecture capacity to discern social needs,
commercialize these, and implement them in
society. We are actively employing external
human resource for architect to further
strengthen this capacity. Of course, we have had
many heated discussions as to the framework
for a specific design for the near future, and how
to incorporate this into a specific architecture.
We will use these unrestrained discussions to
ramp up the speed and quality of our “trial and
learning” approach, while putting OMRON’s
particular style of technology management into
practice.
38
BusinessOMRON Corporation Integrated Report 2021 Industrial Automation Business
(IAB)
Domains
Corresponding SDGs
Factory Automation
With the vision to “Bring innovation to manufacturing by automation to enrich lives of people all over the
world,” the Industrial Automation Business leverages OMRON technologies to generate innovations in
manufacturing with a focus on automation. These innovations contribute to productivity advancements in the
global manufacturing industry. We aim for a world where people everywhere are enriched by innovations at
our customers’ manufacturing sites, with our technologies and solutions across a wide range of products at
the top level in the industry, with our unique “innovative-Automation” concept.
VG2.0 Focusing on Innovation in Manufacturing
The environment surrounding the manufacturing industry is changing
significantly. Changes are seen in “what to make,” “how to make,”
“where to make,” and “who is making” as represented by increasingly
advanced products, local production and consumption, and one-piece
manufacturing, as well as seeds represented by artificial intelligence
(AI), Internet of Things (IoT), robotics and other technological
innovations. OMRON has been keeping up with these changes and
aiming for advanced manufacturing with the unique value generation
concept “innovative-Automation” since 2016, in order to solve issues
facing manufacturing sites.
OMRON’s innovative-Automation has three pillars: “integrated
(evolution in control),” “intelligent (development of intelligence),” and
“interactive (new harmonization between humans and machines).”
With these three i’s as keywords, we have generated innovative
control applications by integrating the extensive ILOR+S* product
range with over 200,000 items, including software and services. We
have created over 200 control applications in the past four years,
Managing Executive Officer
Company President,
Industrial Automation Business Company
Junta Tsujinaga
contributing to innovation at many customers’ manufacturing sites.
In terms of evolution in control, we are focusing on issues such as the aging of skilled engineers and a lack of
successors to create control applications for work requiring ultra-high speed and precision, reproducing the
“craftsmanship” of skilled engineers. Some of these applications wind film products with high speed and accuracy or
laminate sheet products with high precision. These new applications properly respond to customers’ needs in digital
industry, which change with greater performance of products (such as rechargeable batteries) or manufacturing
methods. In the course of developing intelligence, we have created advanced applications that utilize information at
manufacturing sites by adopting IoT or AI technology for control devices. Applications that predict product failures and
equipment abnormality utilizing AI-based controllers and “sensory inspection” applications using AI-based vision
systems that can detect defects beyond the five senses contribute to development of self-learning machines and
no-failure production processes, respectively. The i-BELT co-creative data service is also highly regarded by customers
for solving their issues through the collection and visualization of on-site data and data analysis in co-creative projects
with customers. Further, in the context of pursuing new harmonization between humans and machines, we have
realized new automations where workers and machines can collaborate by drawing out each other’s characteristics,
utilizing autonomous mobile robots (AMRs) and collaborative robots. For example, the Mobile Manipulator (MoMa)
mobile working robot, a combination of a mobile robot and a collaborative robot, contributes to flexible manufacturing
that changes production lines depending on what to make.
As mentioned above, we have developed products that enhance ILOR+S and implemented M&A alliances by focusing
on developing applications that promote innovations for manufacturing sites with innovative Automation. We have also
expanded infrastructure and human resources that help customers solve their issues. The number of Automation
Centers (ATC) that reproduce manufacturing site devices and production lines with actual machine models, using
applications created by combining the latest technologies and products, increased to 37 last year. ATCs welcome
thousands of visitors every year, as Collaborative Creation sites where we verify and demonstrate solutions for
manufacturing issues and create new applications with customers. Further, we have increased the number of sales
engineers (SEs) with expertise in OMRON’s control technology and products and manufacturing site experience,
strengthening their technology consultation capabilities for proposing applications and new solutions unique to each
39
BusinessOMRON Corporation Integrated Report 2021 customer. Currently, over 1,000 SEs are working on solving challenging new issues at customers’ manufacturing sites.
* ILOR+S is an abbreviation for Input (input devices such as sensors), Logic (control devices such as controllers), Output (output devices such as motors), Robot, and
Safety (safety devices to ensure the safety of equipment)
Business Highlights
Net Sales / Operating Income / Operating Income Margin
Capital Expenditures / Depreciation
and Amortization / R&D Expenses
Net Sales
Operating Income (right axis)
Operating Income Margin
Capital Expenditure
Depreciation and Amortization
R&D Expenses
(Billions of yen)
396.1
391.8
331.0
15.7%
52.0
18.7%
74.0
352.8
16.1%
346.4
62.9
15.2%
53.6
17.0%
58.8
400
300
200
100
0
16
17
18
19
20
Sales by Product
(Billions of yen)
(Billions of yen)
375.0
120
16.8%
63.0
80
40
0
21
(Forecast)
FY
25
20
15
10
5
0
16.4
4.5
4.2
23.3
21.0
20.0
18.4
9.3
5.2
7.4
6.9
6.9
6.9
4.8
4.1
16
17
18
19
20
FY
Output + Robot
Input
13%
41%
FY2020
Net Sales
¥346.4 billion
46%
Fiber
Sensors
Vision
Sensors
Safety Light
Curtains
Servo Motors and
Drivers
Mobile
Robots
Logic
Programmable
Controllers
Motion
Controllers
Safety
Controllers
Social Issues to be Solved
VG2.0 Goals
Labor shortages(shrinking labor force in developed countries and lack of
skilled workers in emerging economies)
Handling increasingly advanced and diversified manufacturing processes
Developing new products to realize innovative Automation in the four
focused industries (control technology for manufacturing innovation)
Actual Progress during VG2.0
INPUT
R&D cost:
Total ¥82.7 billion
Capital expenditure:
Total ¥25.7 billion
Growth investment:
Total ¥20.5 billion
(Actual for FY2017 through FY2020)
OUTPUT
Profitability improvements by value-added solutions, with GP ratio up 1.0 pt
(vs FY2016)
Deployed over 200 control applications that realize manufacturing innovation
at manufacturing sites
Strengthened product portfolio for innovative Automation improvement
M&A: Industrial code readers, industrial cameras
New products: Over 50 products such as robotic integrated controllers and
AI-based vision systems (doubled from previous year)
Official launch of co-creative on-site data solution business by i-BELT
Increased number of sales engineers to embody control applications at
customers’ manufacturing sites (over 1,000 around the world)
Increased number of Automation Centers around the world to 37 (was 8 as
of 2016)
Expanded business foundation into essential areas, such as mask
manufacturing, medical and pharmaceutical industry
Expanded production capacity for scaling up business (investment in second
plant in Shanghai, China, etc.)
OUTCOME
Contributed to economic
development by enhancing
social productivity through
innovative-Automation
SDGs 8.2.1
SDGs 9.2.1
SDGs 17.16
40
BusinessOMRON Corporation Integrated Report 2021 Contributing to Solving New Social Issues under the COVID-19 Pandemic
Under our policy that OMRON bears a social responsibility to support manufacturing sites around the world as a
company that has been involved in a core field of the manufacturing industry, we started to address COVID-19
pandemic immediately as well.
The outbreak of COVID-19 caused lockdowns and travel restrictions, leading to confusion not only for the
manufacturing industry but also for various social infrastructures. Our Industrial Automation Business has been
independently taking actions for this situation in order to solve various social issues caused by COVID-19 around the
world. For example, we supported urgent production increases and the start-up of new production lines by proposing
automation applications including industrial robots for worldwide shortages of masks, ventilators, and medicines. For
hospitals and medical institutions busy with taking care of infected patients, we have contributed to automating
labor-intensive sanitizing processes by developing mobile sterilization robots with UV lights and applications that
automate the sanitization of medical equipment, collaborating with system integrators as partners. Also, for
production of foods and daily necessities, which has become more serious due to the worsening lack of workforce
under COVID-19, we have helped maintain production of consumables by deploying applications of collaborative
robots that can work with workers.
We also started working on development of products to promote digital transformation (DX) globally, which was
adopted to manufacturing sites earlier than planned due to the pandemic. Our robotic integrated controllers, which
had their worldwide launch in July 2020, automate advanced and complex work that only skilled workers could do by
seamlessly integrating robots and peripheral devices, as well as realizing remote engineering by precisely simulating
technology in the real and virtual worlds. While travel restrictions are in place and access to production sites is limited
all over the world due to COVID-19, this remote engineering has enabled us to commission production equipment and
conduct maintenance remotely. For the new issue of travel restrictions, we have enabled remote performance of
checks that were done by production engineers and maintenance personnel onsite, reducing workloads by over 50%
for processes like equipment start-up and maintenance. Also, with online factory tours and virtual ATC tours, we have
been contributing to customers’ continuous production activities by strengthening global consultation activities by our
SEs and sales teams utilizing our digitalized infrastructure.
OMRON has deployed these applications in our own factories and utilizes them for maintaining production activities
amid the COVID-19 crisis. The OMRON Shanghai manufacturing site improved workers’ work efficiency and realized
unified production and quality by machines supporting workers with data, after adopting the Cell Line Control System
(CLCS), an intelligent production line where workers and machines work together utilizing on-site data. As a result of
addressing new social issues due to COVID-19 crisis, we were able to contribute to continued production activities in
the global manufacturing industry.
Manufacturing floor where humans and
machines work in harmony
Mobile robot equipped with UV light irradiator to
prevent infection
Mobile robots that transport medical waste at
hospitals in Finland
41
BusinessOMRON Corporation Integrated Report 2021 Industrial Automation Business in the Post-COVID World
While production and social activities under COVID-19 become the new normal, changes in the market and society
have been accelerating globally towards the post-COVID world. This shift includes acceleration of green recovery
actions including increased use of electric vehicles (EVs) and renewable energy and shifts to eco-friendly materials.
This will also drive changes to infrastructure for realizing a digital society, represented by increased demand for
semiconductors, 5G and DX. OMRON views these changes as significant business opportunities for our IAB business
and is preparing to respond to various market needs based on technologies and products developed during VG2.0 and
many control applications that embody innovative Automation.
As COVID-19 has significantly changed people’s lifestyles, ways of working, and values, the post-pandemic
manufacturing industry will not simply go back to what it was before COVID-19. Social issues such as aging of skilled
engineers, lack of successors, and shortage of workforce are further accelerating, along with increased market needs
for new automation. Amid these challenges, OMRON is further driving DX in manufacturing. For example, we joined
Nokia’s Local 5G Technology Partnership to develop solutions that utilize 5G, collaborating with other partner
companies as well. We are also working on realizing automated solutions that can respond to the growing need to
shift from a centralized production structure to region-based diversified and close-to-consumption production as
quickly as possible. Examples include CLCS that utilizes mobile robots and collaborative robots modularize production
equipment, aiming for production lines that can be started up in short periods of time according to what to make or
manufacturing locations.
Issues of manufacturing quality are becoming more serious due to the aging of skilled engineers and lack of
production engineers, along with higher demands for quality from markets and consumers. Our “i-BELT” service, with
advanced AI technology, can help manufacturers to continuously maintain and improve manufacturing quality, turning
skilled engineers’ know-how into reusable assets.
For the globally increasing green recovery, we have started developing new solutions in various fields by collaborating
with customers. To combat marine pollution due to plastic waste, we are participating in initiatives to change
packaging materials to renewable biodegradable plastic in partnership with food and consumable manufacturers and
machine manufacturers. We have also been contributing to the growth of green energy use by developing durable,
high-quality parts in collaboration with manufacturers of key parts for wind power generator manufacturers.
OMRON will continue these initiatives that enrich lives of people all over the world by innovating manufacturing with
automation, in response to various post-COVID market changes.
Innovations in Manufacturing by innovative-Automation
Equipment failure
prevention to predict equipment
failures with AI
Non-stop high-precision alignment
systems to position parts moving
at high speed at the micron level
Sensory inspection
to automate visual inspection
relying on human’s senses
Robotic integrated solutions
to precisely synchronize
industrial robots, machines,
and peripheral devices
intelligent
Development of intelligence
integrated
Evolution in control
Driving innovation in manufacturing with three i’s
interactive
New harmonization between
humans and machines
High-speed 3D picking machines
to automate picking of
bulk parts by robots
Flexible cell line where
mobile robots
carry parts and products
AI-based tightening inspection
to predict and correct screw
tightening variance in real time
"Cell Line Control System”
where workers and machines
collaborate and machines support
unskilled workers with data
42
BusinessOMRON Corporation Integrated Report 2021 integrated (evolution in control)
Improvement of the Engineering Experience on a New Architecture - Integrated Solution for
All Machine and Robot Control, an All-in-one Platform
Trelleborg Sealing Solutions is a leading global supplier of sealing solutions. With their wide range of patented product designs
for static and dynamic sealing systems, Trelleborg’s Livorno Plant in Italy provides high-quality thermoplastic polyurethane (TPU)
sealing solutions for a wide range of hydraulic and pneumatic applications, along with accessories.
To support rising demand for green energy resources as well as favorable government policies to encourage renewable energy,
Trelleborg decided to increase production of polyurethane parts for wind power generator turbines and needed to add flexibility
in manufacturing to support various type of products. Their wish was to reduce the time for setting and programming a new
trimming machine that comes with two robots for seals finishing and can be operated on a single platform.
Trelleborg then employed an OMRON-proprietary robotic integrated controller, which can
enable real-time synchronization between all relevant equipment, including robots, vision
sensors, drives, and safety devices, facilitate easy programming for in-house technicians,
improve the speed and accuracy of production, simulate the entire production line,
streamline maintenance, and reduce time to market. As a result, Trelleborg has shortened
its cycle time by 30%, leading to speedy delivery. With the new architecture, the
production engineering team can build the machine in a shorter time, streamlining a
formerly time-taking and complex task. With its unique combination of robots, software
and integrated control architecture, OMRON will continue challenging to meet today’s
social issues as well as expanding green energy with our customers.
Two OMRON robots shaping blue
polyurethane circle parts
As a world leader in engineered polymer solutions that seal, damp, and protect critical
applications in demanding environments, our innovative solutions accelerate performance for
customers sustainably and support environment-friendly activities. With OMRON as our partner,
we were able to satisfy a sudden demand increase for several applications in the fluid power,
agriculture and energy segments. For this project, we expect a pay-back period of about two
years, with future plans to develop and introduce three more machines in the coming three years.
It is also interesting to look at further possibilities, as OMRON’s product portfolio can cover the
whole production process such as machine tending by collaborative robots and intralogistics
with mobile robots. I am excited to take manufacturing to the next level with OMRON and to
contribute to a more sustainable society.
Machinery and Energy Supervisor Trelleborg Sealing Solutions Livorno
David Caluri
integrated (evolution in control)
OMRON’s Perfect Sealing Technology Solution to Drive Sustainable Manufacturing
Plastic containers may be convenient, but they are detrimental to the environment, causing environmental pollution and risking
harm to marine and terrestrial life with the resultant microplastics. To avoid these tragedies and achieve a sustainable society,
many companies, especially in food and commodity industries in Europe, are taking on the challenge of making products with
other recyclable or eco-friendly materials to use less plastic.
OMRON supports this challenge of sustainability with our Perfect Sealing technology. Unlike conventional virgin plastics,
recycled materials tend to be more vulnerable to heat and require higher precision in handling for production. Thus, drawing on
high-precision temperature control technology that has been refined in other industries, such as semiconductors, OMRON
achieved a solution to monitor the machine’s speed and the pressure and temperature being applied to the sealing process. This
enables a new recyclable paper-based film to be formed as planned.
As a result of improved product quality, our customers have been shifting to eco-friendly manufacturing with our products at an
unexpectedly high pace. With our customers, OMRON will continue to lead the movement of sustainable business and
manufacturing globally, driving superior business performance for customers and a better society for all.
Employee Comments
The project was not without its challenges along the way. We required multiple sources of
support from OMRON businesses globally and coordination from different OMRON
departments. However, with our passion for contributing to solving marine plastic waste
problems, the teamwork and attention to detail shown by OMRON members around the world
led us to success in this project. I am extremely proud of the team members supporting this
project and multiple installations around the world. The accomplishment was also awarded the
gold prize at TOGA for FY2020 as an outstanding example of OMRON Corporate Principles
practice out of 6,461 entries. The next challenge is to secure our Perfect Sealing specifications,
locking this solution into the DNA of the customer’s ongoing advances in digital manufacturing.
Global Account Manager Industrial Solutions, OMRON Electronics Ltd.
Allan Gibbons
43
BusinessOMRON Corporation Integrated Report 2021 intelligent (development of intelligence)
Realizing evolving manufacturing sites through Collaborative Creation with customers
Today, society is transforming with focus shifting from things to experiences and services. Ahead of this shift, OMRON has
been providing an on-site data utilization service “i-BELT” that improves productivities and qualities of manufacturing since 2017.
With the i-BELT service, OMRON combines customers’ knowledge with our unique know-how in control devices and software
that we have accumulated as a company well-versed in front-line manufacturing operations, thereby taking on various field tasks.
Kaneka Corporation, which provides solutions to various social challenges with its cutting-edge technology based on chemical
material development, had been working on solving errors in transporting materials in the production of high-performance film.
In order to minimize operational losses due to the film transporting errors, OMRON started collaborating with the customer by
providing the i-BELT service in February 2020. First, we tried to identify causes of the errors in the relevant process by using the
vibration measurement system. This system can collect and monitor various data via multiple sensors installed within the
production line. Together with Kaneka, we strived to build a framework to visualize the production line, while repeatedly verifying
hypotheses on causes and signs of transporting issues though continuously analyzing collected data. As a result of verifications,
the abnormal signs monitoring system was created, which can detect abnormality in the film production line, based on
waveform data of the sensors. With this monitoring system, even less experienced workers can check changes in the film
production status, succeeding in suppressing errors. In order to realize evolving manufacturing sites, we contribute to innovation
in manufacturing with proposals for process visualization and solutions to challenges our customers are facing.
At Shiga Manufacturing Site, Kaneka continues activities for improvement on a daily basis to
pursue the purpose of providing reasonable and high-quality products safely. In this task to
stabilize film transporting, we made most strenuous efforts to quantify operators’ sensory
information among others. The quantification has been established by sensing and data analysis
with OMRON, and the improvement has been made steadily. I am impressed by OMRON’s
approach where their engineers always make discussions together with our engineers based
on i-BELT data analysis before employing a new solution. As a result of these efforts, we were
able to address challenges as a team beyond the company, and reduce transporting errors with
satisfaction. I am looking forward to tackling new challenges together with OMRON in the
future.
Manager of AI & Digital Platform Center Shiga Manufacturing Site Kaneka Corporation
Koji Hanada
interactive (new harmonization between humans and machines)
Automating Small Waste Logistics in Finnish Hospital with Mobile Robots
Labor shortages have long been a major problem in social welfare and medical fields globally, especially in Finland. With the
spread of COVID-19, this problem has become a serious social issue. According to a survey conducted by the Finnish hospital
union, the majority of nurses are considering leaving the medical field.
Under these circumstances, OMRON has collaborated with a major hospital, universities, and the partner system integrator
Dimalog Oy Ltd. to develop a medical waste transport automation system using mobile robots, which are usually used in
factories. In this project, the team focused on the daily work of hospitals that does not require human-to-human interaction and
could use robotics and IT technology, and they aimed for a state in which robots take on this routine work on a daily basis. The
pilot experiment was conducted to automatically transport the waste generated in the hospital's clinical chemistry laboratory to
the waste collection center in the basement of the hospital. To automate waste transportation, OMRON worked with Dimalog
to develop a control system for mobile robots to transport waste on request using a button or according to a schedule, while
optimizing the mobile robots’ travel route.
OMRON will continue to contribute to labor saving in hospital operations, starting from the development of disinfecting robots
mounted with a UV light irradiator to prevent the spread of infection, automated hospital floor cleaning, automated medical
waste transportation, and other solutions to address new social issues in the medical field caused by the COVID-19 pandemic.
Conducting the pilot experiment during the COVID-19 pandemic was a unique challenge, but it
was also an interesting opportunity to witness how OMRON's autonomous robot technology
can easily handle simple hospital transport tasks and enable the human staff to focus on more
critical work amid the pandemic. The test gave us a lot of ideas and insight into how the future
of hospital environments can be shaped by robots and smart technology. All participants in the
trial were impressed by the results and we are currently discussing several future robot tests
and projects for the Finnish health care sector.
CTO, Dimalog Oy Ltd
Teemu Kytömäki
44
BusinessOMRON Corporation Integrated Report 2021 Electronic and Mechanical
Components Business (EMC)
Domains
Corresponding SDGs
Devices and Modules
to Support the Growth
of OMRON
The mission of the Electronic and Mechanical Components Business (EMC) is: “With our devices and
modules, create customer value, and contribute to people and society on the planet.” EMC’s relays,
switches, and connectors play vital roles in switching and connective devices, and sensors act as eyes and
ears for a wide variety of products. As one of OMRON’s core business units, EMC provides these essential
components to customers worldwide in various fields, including home appliance and automotive
manufacturing, that support the safety and security of human life.
Building a Foundation for Self-driven Growth
Engines and Transforming Our Business to
Create and Maximize Value for Customers
Aiming to be a business unit that creates value for customers, at
EMC we support the growth of OMRON’s target domains with our
cutting-edge technologies and reliable manufacturing technologies
built over years. Social issues have become more varied and serious
in recent years, and our business environment, customers, and
competitors are changing drastically. Customers are seeking
partners that can flexibly respond to social changes and technology
innovation. In addition, electronic components have become a
commodity, and new competitors are arising from emerging
countries. In such a market environment, OMRON will continue to
resolve issues at the customer level with its high-quality products
and technologies.
During VG2.0, we made various efforts toward value creation in
Managing Executive Officer
Company President, Electronic
and Mechanical Components
Business Company
Shizuto Yukumoto
order to build a foundation for sustainable self-driven growth. We conducted organizational reforms and quality
improvements as well as developing modules with high added-value that fulfill customers’ requirements. In terms
of organizational reforms, we put great emphasis on optimizing production processes so as to reorganize our
manufacturing sites from 11 to 7 to supply our components steadily. Building a flexible production system to meet
varying demand has successfully improved our capacity utilization rate and production efficiency. In terms of
quality improvements, our manufacturing processes, from the development and design stage to production and
completion, are thoroughly assessed from the standpoints of verification and validation. Strengthening our quality
control system has improved our component quality to ensure the safety of customers’ products. Based on our
“self-driven” growth structure, we have identified changes in customers’ requirements and new demand for
technology innovation and environmental protection, such as smart products and battery development/direct
current power systems, and created a variety of devices and modules. In fiscal 2020, quickly recognizing demand
for computer accessories, electric tools, and non-contact applications due to the COVID-19 situation, we
developed new products in a timely manner to meet additional demand and customer requirements.
The COVID-19 pandemic accelerated the digitalization of society, and demand for semiconductors and electronic
components has increased for development of batteries as power sources and 5G infrastructure. Requirements
for electronic component functions keep changing due to the diversification of lifestyles and environmental
changes, providing OMRON with more opportunities to enhance the value of customers’ products. We strive to
identify any changes in society and accelerate our R&D to create new products in a timely manner. Furthermore,
to improve human life on the planet and develop society, we will keep providing customers worldwide with relays,
our main driver, and switches and sensors, our leading products for business growth.
There are serious social issues requiring solutions, such as global warming and workforce shortages caused by an
aging population and declining birth rate. To realize a carbon-neutral society and safe and secure communication
infrastructure, more sophisticated component functions are required for the development of EVs and reliable
communication platforms for all. Present circumstances are forcing customers to review all conventional design
methods, components, and materials, which means that new market needs are being created. At EMC, we will
45
BusinessOMRON Corporation Integrated Report 2021 determine our target domains, identify design issues for customers’ products from the early development phase,
and resolve social issues with our core technologies, namely “precise processing technologies” and
“combinations of technologies”. We will continue to offer essential key devices in order to achieve ideal solutions
to the aforementioned social issues with our customers.
Business Highlights
Net Sales / Operating Income / Operating Income Margin
Capital Expenditures / Depreciation
and Amortization / R&D Expenses
Net Sales
Operating Income (right axis)
Operating Income Margin
Capital Expenditures
Depreciation and Amortization
R&D Expenses
(Billions of yen)
(Billions of yen)
(Billions of yen)
120
107.1
103.1
95.2
11.6%
88.4
86.0
94.0
90
60
30
0
0
10.2%
9.8
12.5
7.9%
8.2
1.0%
0.9
3.4%
3.0
16
17
18
19
20
40
30
20
4.8%
10
4.5
0
21
(Forecast)
FY
14
12
10
8
6
4
2
0
12.0
10.0
7.7
7.6
7.6
5.9
5.3
5.1
4.9
7.9
6.5
4.6
7.3
4.0
4.1
16
17
18
19
20
FY
Sales by Product
Other Electronic and Mechanical Components
(Amusement Equipment, Image Sensing, etc.)
Relays, Switches, Connectors
Power Supply Units for
Amusement Devices
23%
FY2020
Net Sales
¥86.0 billion
Human Image Sensor
77%
Power Relays for Printed
Circuit Boards
Tactile Switches
Terminal Block Connector
for Printed Circuit Boards
Social Issues to be Solved
VG2.0 Goals
Social issues related to “FA”, “Healthcare”, and “Social Solutions”
As a device and module business unit supporting focus domains, contribute
to achieving sustainability goals in each domain
Actual progress during VG2.0
INPUT
R&D cost:
Total ¥19.5 billion
Capital expenditure:
Total ¥32.0 billion
OUTPUT
Restructuring
The optimization of production locations for stable product supply
(globally, 11 locations to 7 locations)
The establishment of flexible production systems to respond to changes
(Actual for FY2017 through FY2020)
in demand for components
Strengthening of quality control platform
The enhancement of product quality to ensure safety for customers’
products
OMRON Relay & Devices Corporation obtained UL DAP certification
(October 2018)
The development of next generation devices, modules, and technologies
R&D of new technologies and products (example: shut-off relays for
battery capacity expansion aiming for a carbon neutral society)
The creation of non-contact applications required for the “new normal”
of living with COVID-19
OUTCOME
Contribute to the improvement of
human life on the planet and
development of society by
providing devices and modules
SDGs 9.4.1
46
BusinessOMRON Corporation Integrated Report 2021 Creating New Customer Value with Strong Quality Control Platform
During VG2.0, in order to achieve organizational growth, EMC has improved its capacity and speed to create customer
value. Below we outline our approaches to strengthening our quality control system and developing solutions to social
issues caused by the COVID-19 crisis.
Strengthening Quality Control to Ensure Product Safety and Increase Customer Value
OMRON rolled out three new initiatives aimed at improving quality control to deliver high-quality electronic
components that ensure the safety of our customers’ products.
The first is improving the verification and validation process in the entire manufacturing cycle. A scientific approach is
applied to verify that customer requirements are met in accordance with product specifications, design, and requisite
quality. By connecting production data right from the beginning of the design stage, we ensure that all parts are
consistently and properly produced. The foundation of our quality assurance system has evolved through the
implementation of these actions to identify and prevent quality issues at an early stage of the manufacturing cycle.
The second approach is refining equipment maintenance standards and raising awareness of quality assurance. The
conditions of production equipment vary every day in the course of production. Solving this issue required
“harmonized adjustments” to ensure the right finish, but as a result, different problems arose across the
manufacturing process. The steps we took got back to the basics of manufacturing to renew our awareness and
recognize that the action of “harmonized adjustment” will always be accompanied by change and hence to enhance
our change management. We took the same approach in all our global manufacturing sites and at the same time
streamlined data sharing among locations to allow
them to see each other’s activity status. By sharing
best practices across factories, we strive to maintain
high quality standards.
The third approach is implementing data visualization to
monitor production lines in real time. Installing a
system that traces the manufacturing history of all of
our seven factories around the globe and diagnoses
changes in the manufacturing process allows us to
identify the causes of quality defects at an early stage
as well as specifically pinpointing the extent of their
effects, and ultimately minimize loss of performance.
Furthermore, our quality data visualization provides a
quick and effective way to detect anomalies and
problems. By taking a comprehensive approach, we
strive for higher levels of product quality.
Strengthening Quality Level by Combining
the Three Approaches
Higher equipment
maintenance standards
and quality assurance
awareness
Verification
and
Validation process
Visualization
of global
production lines
Production
location
Examination
and analysis
Data
Employee Comments
We focused on three actions at manufacturing sites to promote understanding of what it
means to “get back to the basics of manufacturing.” The first action was visiting local
manufacturing sites to repeatedly discuss the primary purpose of this activity until we were
sure that all of us had gained a clear understanding of it. The second was to coordinate with
staff members on site for practical improvements. And the third was to visualize the outcomes
of those improvements. These approaches, which were first introduced at a single factory,
helped the staff members gain understanding of the basics of manufacturing through actual
experiences. By doing the same in the other factories, more and more people came to realize
the importance of this through better understanding. As we continued promoting awareness
and understanding of quality assurance, we were able to make improvements and move
towards the common goal of creating value for customers in our factories.
Quality Management Division,
Quality Planning Department
Toshihiro Ishii
Obtained UL DAP Certification for Contributing to Timely Product Release
The Yamaga Factory of OMRON RELAY & DEVICES Corp. is the production base for relays,
one of our main products.
By establishing a robust quality management system and enhancing technical capabilities, it has
been assessed by UL, an American third-party safety science company, and became eligible to
participate in the Data Acceptance Program (DAP: Customer Assessment Data Utilization Program).
We qualified to participate in the CTDP (Client Test Data Program) in October 2018, one of the
DAP’s programs, and have maintained continuous participation since that date.
The ability to conduct UL's safety standard certification testing at our factory has enabled us
to speed up the release of new products.
UL DAP Certification
47
BusinessOMRON Corporation Integrated Report 2021 OMRON’s electronic components such as relays, switches, and sensors play important roles in
various settings such as office environments that will ultimately create sustainable smart cities.
Air conditioning system
Lighting
Dust detection
Dust sensor
Motion detection (room occupancy)
Image Sensor
Non-contact temperature
sensor
Visualization of environmental data
Detection of temperature,
humidity, illuminance,
UV and atmospheric
pressure
Environmental sensor
Room entry control device
Body temperature
measurement
Non-contact
temperature
sensor
36.2℃ OK!
Washroom
Hand gesture
recognition
Light Convergent
Reflective Sensor
Elevator
Motor controller for
opening and closing
motion
Power relay
Button operation
Tactile Switch
Non-contact switch
Development of Touch less Hybrid Elevator Switch to Create a Safe
Living Space
The COVID-19 pandemic has increased the need for “touchless” operation in various settings
to avoid multiple people touching surfaces and objects. Elevator buttons are among such
settings, and touchless switches were being considered as a solution. OMRON recognized the
demand in a timely manner and quickly took action by partnering with FUJITEC, the leading
provider of elevators and escalators, to develop a touchless hybrid elevator switch ahead of
the market trend.
OMRON’s touchless hybrid elevator switch enables hands-free operation that provides a tactile
sensation as if actually pressing a button. The switch was developed by combining core
technologies central to EMC, embedded with a sensor for touchless
interface and a durable push-button-style design to realize an
integrated compact switch. We collected survey responses from
hundreds of people and conducted numerous trials to precisely adjust
the specification to human senses before moving to
commercialization. As a result, we achieved a universal design usable
by all people to make the product easier to use for everyone. The
switch is used in elevators manufactured by FUJITEC and rolled out in
December 2020 for offices and shopping malls. These elevators help
reduce infection risk and contribute to building an infrastructure of safe
elevators.
We plan to continue working on solving social issues together with our
customers by improving our core technologies and providing touchless
solutions.
Diversified Products Division,
Business Management
Division HQ
Tetsuya Sumiyoshi
Business Management Department
Touchless hybrid elevator switches used for an elevator at
GINZA PLACE, an integrated commercial facility at the
Ginza 4-chome intersection
FUJITEC aims to realize a “beautiful city appropriate for the new era” through the business of
supplying elevators, escalators, and moving walkways. We started developing a new button
focused on touchless elevator operation during the COVID-19 pandemic last year, and
requested a joint development project with OMRON, considering their remarkable
achievements in button operation products. As a result, we successfully developed a touchless
elevator button that satisfied universal design standards, which is now installed in various
places. We plan to continue development of various interface devices for the next-generation
society. We look forward to working more with OMRON in search of solutions to our needs
and collaborating in joint development projects.
R&D Department Center,
Product Development HQ
FUJITEC CO., LTD.
Noriyoshi Hagizawa
48
BusinessOMRON Corporation Integrated Report 2021 Social Systems, Solutions
and Service Business (SSB)
Domains
Corresponding SDGs
Social Solutions
Social Systems, Solutions and Service Business (SSB) has been working on realizing the society where people
can live more comfortably. Our mission is “to create a society in which the people of the world live in a safer,
more secure and comfortable society.” We support social infrastructure by providing solutions that optimally
combine a wide range of hardware, software and services. These include power conditioners for solar power
generation, storage batteries, railway station systems such as automatic ticket gates and ticket vending
machines, traffic control systems, settlement systems, and network protection systems such as UPS.
Creating a Next-generation Social Platform so
that People Can Flourish and Live Safely and
More Comfortably with Social Automation in
the Future
During VG2.0, SSB recognized lack of labor force as a social issue to
be solved. Therefore, we have attempted to eliminate inconveniences
in daily life through various solutions, such as automation of reception
work at hotels and labor saving for cleaning, security and information
services at stores and buildings. Also, toward the further solution of
social issues and sustainable growth, we integrated our UPS business
in 2018 and environment business in 2020, providing access and value
to new markets such as housing, distribution, information
infrastructure, municipalities, and manufacturing industries
However, we are still required to solve more social issues not only for
issues for certain markets or customers but also by deploying solutions
Managing Executive Officer, President
OMRON SOCIAL SOLUTIONS CO.,LTD.
Toshio Hosoi
to multiple markets. In addition to solving issues at the manufacturing sites we have been focusing on, we are also
working on standardizing and enhancing services that can be provided to various industries and building an operation
system.
With outlook for the next 10 years, we recognize “environment (carbon neutral)”, “resilience” and “labor saving” as the
social issues to be solved. Social issues such as increasing CO2 emissions, accelerating climate change and lack of
labor force due to accelerating decrease of birth rate and aging population could cause various inconvenience and
concerns in our daily life. For companies, management issues are becoming more complex with the need for business
continuity and solution environmental issues. Efficient business management and manpower saving are therefore
urgent issues to solve. We need to resolve not only manufacturing issues by providing existing devices and services,
but also customers’ management issues.
To achieve that, we need to improve ourselves as well. In addition to responding to customers’ needs, we will create
a future society that is safer, securer, and more comfortable by identifying changes in society proactively. Furthermore,
we will aim to realize next-generation social systems with the social automation that we obtained in our SSB.
For example, in energy area, in addition to provision of renewal energy we have been working on, we will also work
on the realization of area energy management that provides optimal balance of energy demands-supplies in the level
of households and facilities in the future. We will start to contribute to spread development of renewable energies by
deploying PV inverters and storage battery systems that we have provided for households to manufacturing industries
and municipalities, utilizing SSB’s wide range of business areas. Further, by connecting each energy and sharing
electric power, we will contribute to carbon neutral and maximized energy usage at regional levels, such as power
storage in preparation for disasters.
Labor shortage is also becoming a serious issue at many industries that support necessary infrastructure for living,
and it is thus required to improve efficiency of operation while maintaining services. We have been providing devices
and systems along with maintenance services for safe system operation, contributing to resolving issues at
customers’ manufacturing sites and maintaining social systems. Moving forward, we will work on manpower saving
and strengthening operations by comprehensively supporting remote monitoring/operation of devices and systems
that customers are working on, and management services that solve customers’ issues by improving and optimizing
49
BusinessOMRON Corporation Integrated Report 2021 work operation processes.
We will continue to take on the challenge of creating next-generation social systems that support a society where
people can live safely, securely and comfortably, resolving the issues of the future with automation that allows people
to thrive
Business Highlights
Net Sales / Operating Income / Operating Income Margin
Capital Expenditures / Depreciation
and Amortization / R&D Expenses
Net Sales
Operating Income (right axis)
Operating Income Margin
Capital Expenditure
Depreciation and Amortization
R&D Expenses
(Billions of yen)
(Billions of yen)
(Billions of yen)
120
116.0
9.4%
100.6
95.7
96.0
6.9%
70.3
6.1%
68.0
4.1
4.8
6.5%
6.5
7.3%
6.0%
10.9
5.7
7.0
90
60
30
0
40
30
20
10
0
6
5
4
3
2
1
0
5.7
3.0
2.1
4.8
2.5
2.0
5.0
2.9
2.0
1.8
1.4
1.4
2.1
1.6
1.3
16
17
18
19
20
21
(Forecast)
FY
16
17
18
19
20
FY
Sales by Product
Other (Software Development, etc.)
Energy, Environmental Solutions
Network protection (UPS)
Engineering
Payment Systems
5%
8%
FY2020
Net Sales
¥95.7 billion
27%
32%
PV inverters
Storage
Batteries
Public Transportation
(Automated Ticket
Gates, Ticket Vending
Machines)
4%
8%
16%
Ticket
Vending
Machines
Automated
Ticket
Gates
Road Traffic (Road
Traffic Management
Systems, etc.)
Social Issues to be Solved
VG2.0 Goals
Increase in traffic accidents and traffic jam
Global warming from CO2 emissions
Slow growth of the renewable energy market
Actual progress during VG2.0
INPUT
R&D cost:
Total ¥17.6 billion
Capital expenditure:
Total ¥10 billion
(Actual for FY2017 through FY2020)
Create driving safety support systems and technologies
Cumulative shipped capacity of solar power/storage battery systems:
11.2 GW
Build the energy resource aggregation business using solar power/
storage battery systems (Japan)
OUTPUT
OUTCOME
Analysis and verification on the relationship between change of
driving behaviors in certain psychological state and risks, such as
joint research on driving risk detection with universities.
Provided automation and labor-saving solutions for reception, guidance,
cleaning, security works for industries with serious lack of labor force.
Provided energy composition and energy management system that
respond to various needs, such as maximized power generation
efficiency, self consumption or business continuity measures.
Cumulative shipped capacity of solar power systems: 10.3 GW
Cumulative shipped capacity of storage battery systems: 695 MWh
Provided data power source, power source protection and monitoring
system for disaster prevention in response to many natural disasters
due to climate change.
Contribute to realize a better society in
which people around the world can
continue to live in a safer, more secure
and comfortable society by expanding
renewable energy and providing
people-friendly next-generation systems.
SDGs
3.6.1
SDGs
11.2.1
SDGs
7.1.2
SDGs
13.2.1
50
BusinessOMRON Corporation Integrated Report 2021 Aiming for Carbon Neutral with Renewable Energy
We have been experiencing many natural disasters due to climate change in recent years. Actions are being taken
around the world aiming for carbon neutrality that aims for zero emissions of greenhouse gas (GHG), including CO2,
the cause of climate change, by 2050. One of the actions is to increase usage rate of renewable energies. Companies
are also required to take approach to realize 100% of renewable energy for electric power used in business activities
(RE100*).
Resolving Issues at Manufacturing Sites with Abundant
Industrial Knowledge and Engineering Skills
Murata Manufacturing is a company that joins RE100 and leads CO2
reduction at many regions by increasing the rate of renewable energy
for electric power used. While the project is proceeded to introduce
solar power systems in domestic business locations, Okayama site of
Murata Manufacturing had issues with installment location. OMRON, as
a member of the project, verified the possibilities from stand point of
insolation, intensity, cost and operation control, and suggested utilization
of “air space” above the company parking for approximately 1,700 cars
as the installment area. A carport type power generator (simplified
garage with roof and columns) was adopted and double sided solar
panels were also installed to maximize its power generation, as they
can generate power from reflection on the back side of roof. Further,
OMRON’s original remote monitoring and maintenance service
(soramoni) prevents loss of generation due to equipment failures and
enables maintaining power generation amount for a long period. Murata
Manufacturing’s complete solar power plant (carport type solar power
generation system) enables power generation for 850 general household
annually, with estimated 2,394 tons of CO2 reduction. Companies will
be the leaders for carbon neutrality—Murata Manufacturing and
OMRON will continue to work on this challenge.
Realizing Sustainable Society with Energy Optimization
at Regional Levels
In Japan where spaces for solar panel installment are limited, this
achievement of Murata has huge potential. Moving forward, with
OMRON’s industry knowledge and high engineering skills, we will
promote introduction of optimal solar power generation system not only
for companies but also for households and municipalities. Moreover, we
will contribute to the realization of a carbon neutral and sustainable
society with area energy management that provide optimal energy uses
at the level of regions.
Construction Department,
EM Design Section
OMRON FIELD
ENGINEERING CO., LTD.
Tatsunori Katagiri
Left: No.1 Solar Power Plant
Right: No.2 Solar Power Plant
Carport type solar power generation system
Murata Manufacturing manages its business with reinforcement of climate change
countermeasures as a material issue. We consider the introduction of carport type to be
effective as a measure for solar power generation at offices. We will continue to promote
energy saving in partnership with OMRON FIELD ENGINEERING CO., LTD..
General Manager, Facility Management Department
Murata Manufacturing Co., Ltd.
Shigehiro Sakata
*RE100 is an international environmental initiative that aims for a 100% renewable energy rate in business activities by 2050.
51
BusinessOMRON Corporation Integrated Report 2021 From Providing Systems to Management Service—Creating the Next
Generation of Railway Station Management
Lack of labor force due to shrinking working population is becoming more serious year by year. Since its foundation,
OMRON has been contributing to improvement of railway station management for railway companies by providing
systems and maintenance services such as automated ticket gates, ticket vending machines and remote monitoring
systems for equipment. On the other hand, issues in railway companies are becoming more and more complex with
challenges such as the needs for non-contact due to COVID-19 crisis as well as business continuity measures for
disasters or response to inbound travelers.
Supporting Head Office’s Station Management Work by
Offering Device Operation Support Service
In pursuit of safety, stability and security, the head office of Odakyu
Electric Railway used to support station employees at all railway lines in
the operation of railway station systems and response to abnormalities.
However, it was a huge challenge for Odakyu with 70 stations to
maintain support systems while improving efficiency. As a solution for
this, OMRON started up a device operation support desk in 2012 and
started outsourcing service to address inquiries of device operation and
failures regardless of the device manufacturers, in response to inquiries
from employees at stations. Since then, this has been not only saving
manpower at the head office but also contributing to stable operation of
railway station systems, seamlessly and immediately responding to
inquiries for abnormalities and meeting on-site needs. We have
accumulated achievements and won trust over 10 years now, and are
continuing to provide smart maintenance utilizing ICT and new value to
further optimize railway station operations.
Station Smart Service Promotion
Section
Social System Support Department
Field Service Business Head Office
OMRON FIELD ENGINEERING CO., LTD.
Hiroshi Watanabe
Maintenance work at station halls
Device operation support desk
Providing Safe, Secure and Comfortable Station Service to All Users by Strengthening Railway Station Operation
How to operate stations efficiently and properly while responding to change of society and travelers’ needs;
this cannot be solved by single system or service. Going forward, we will strengthen station operation and
realize attractive services for travelers by providing not only device operation but also a management service
that comprehensively supports operation of stations from planning to system introduction, operation,
maintenance and improvement with our know-how and knowledge on sites that we obtained through
developing public transportation systems and performing maintenance services over a long time.
It is very helpful that we can have timely information at sites. This leads to smooth
communication with station employees and improves services for customers through the
support desk. Also, new insights are suggested to us every month at monthly reporting
meetings. We look forward to even speedier collaboration in the future.
Customer Sales
Odakyu Electric Railway Co., Ltd.
Yasutaka Inoue
52
BusinessOMRON Corporation Integrated Report 2021 Healthcare Business (HCB)
Domains
Corresponding SDGs
Healthcare
The mission of our Healthcare Business is “To help realize healthy and comfortable lives for people
around the world.” By living up to this mission, we have developed healthcare products and services
with a focus on usability and accuracy of readings that ensures reliability for medical use. OMRON has
achieved certification for medical use for a variety of devices in various countries, including blood
pressure monitors, digital thermometers, and nebulizers. Moreover, OMRON also provides services
that are compatible with each country’s/region’s social infrastructure and healthcare system, which
varies from country to country. These products and services are now available in more than 110
countries across the world.
A New Challenge to Achieve Zero Events by Globally
Driving Remote Patient Monitoring Services
During 2020, the COVID-19 pandemic drastically changed people’s
awareness and ways of living, also impacting social infrastructures
around the world to become the “new normal” in people’s lives.
With the increasing need to take body temperature readings that the
“new normal” has dictated, we reinforced the production system to
increase capacity in our Dalian Factory, China as we expand product
supply. In October 2020, an additional thermometer production line
was installed in the Matsusaka Factory, Japan to ensure a stable
supply of products.
The spread of COVID-19 saw new issues begin to emerge. These
include increased risk of infection from hospital visits and a growing
workload for medical professionals due to an increase in COVID-19
patients. In particular, the risks for patients with chronic diseases such
as hypertension and diabetes become higher once infected. The fear
of potential infection caused many chronic disease patients to avoid
Managing Executive Officer
OMRON Healthcare Co., Ltd.
President and CEO
Isao Ogino
regular hospital visits, causing them to suffer worsening conditions. During the past year, this particular issue became
rather prominent.
These types of social changes make achieving our Cardiovascular Business vision “Reducing the event of
cerebrovascular and cardiovascular diseases caused by high blood pressure to Zero (Zero Events)” that we set in 2015
more important than ever. For realizing Zero Events, it is essential to carry out appropriate blood pressure
management through early-stage detection and treatment of hypertension, as it is one of the main risk factors for
strokes and heart attacks. As we advance toward this vision, OMRON has continued to produce devices that break
new ground. A wearable watch-type blood pressure monitor, already with medical equipment certification, has been
launched in North America, Japan, and Europe. Another device for North America release was a blood pressure
monitor with ECG for simultaneous home monitoring of blood pressure and electrocardiogram data. Our endeavor,
however, goes beyond the development of devices and our efforts to expand into telemedicine on a global stage
already resulted in various new services that have been rolled out on a worldwide basis. In September 2020, OMRON
launched the VitalSight remote patient monitoring (RPM) service in North America, followed by the Hypertension Plus,
another remote monitoring service for hypertension, in the UK in April 2021.
Even with the continuing impact of COVID-19, we see awareness of sustainability is growing with the response to
SDGs and environmental preservation being examples. Our proactive action to achieve SDGs builds on efforts to
promote the health of people around the world through our business growth and involves popularizing blood pressure
monitoring at home. As we develop our innovative devices we also engage in environmentally responsible
manufacturing. Specifics include reducing the use of plastic material by employing paper packaging and preserving
paper resources by downsizing packaging. is A carbon-neutral production line is also under consideration.
Sustainability initiatives are promoted by reviewing our business activities from a wide-ranging perspective and
include measures such as an environmentally friendly office achieved by using solar power.
We will continue to reinforce our fundamental business that is designed to deliver innovative devices to people around
the world and assist their health management. We will also be entering new fields, such as creating personalized
RPM services and AI technology for individually optimized blood pressure management and developing algorithms to
53
BusinessOMRON Corporation Integrated Report 2021 analyze warning signs of strokes and heart attacks. Our goal is being an indispensable partner to doctors and patients
for the prevention and treatment of chronic diseases.
Business Highlights
Net Sales / Operating Income / Operating Income Margin
Net Sales
Operating Income
Operating Income Margin
(Billions of yen)
120
101.3
108.5
115.5
112.0
10.3%
11.2
8.4%
8.5
12.1%
11.3%
13.0
13.5
90
60
30
0
123.1
133.0
(Billions of
yen)
16.7%
16.9%
20.6
22.5
40
30
20
10
0
Capital Expenditures / Depreciation
and Amortization / R&D Expenses
Capital Expenditures
Depreciation and Amortization
R&D Expenses
(Billions of yen)
6.7
6.7
4.0
6.8
6.0
6.9
4.3
3.2
3.0
2.8
2.8
2.8
6.2
3.3
2.2
8
6
4
2
0
16
17
18
19
20
21
(Forecast)
FY
16
17
18
19
20
FY
Sales by Product
Other(Activity Monitors, AED, Electric Toothbrushes, etc.)
Blood Pressure
Monitors
Body Composition
Monitors
TENS Devices
13%
Net Sales in
FY2020
¥123.1 billion
59%
4%
4%
13%
7%
Thermometers
Nebulizers
Social Issues to be Solved
VG2.0 Goals
Increased events of cerebrovascular and cardiovascular diseases attributable
to hypertension
Worldwide prevalence of asthma attack and other respiratory disease
exacerbations
Blood pressure monitor sales: 25 million units/year
Development of analytical technologies to continuously track blood
pressure fluctuations
Nebulizer and wheeze detector sales: 7.65 million units/year
Actual progress during VG2.0
INPUT
Total R&D expenses:
¥27.2 billion
Total capital expenditures:
¥17.5 billion
Total growth investments:
¥9.8 billion
(FY2017-FY2020 results)
OUTPUT
Blood pressure monitor sales: 24 million units/year (FY2020)
Nebulizer and wheeze detector sales: 3.41 million units/year (FY2020)
Developed innovative devices such as a wearable blood pressure
monitor, blood pressure monitor + ECG, and a wheeze detector.
Launched remote patient monitoring services and corporate wellness
services in North America, Europe, Singapore, India and Japan
Established blood pressure monitor and nebulizer production bases in
Brazil and Italy
Set up an additional thermometer production line at the Matsusaka
Factory to fulfill product supply responsibility in the COVID-19 situation
OUTCOME
Helped to extend healthy lifespans
and reduce medical expenditures to
contribute to healthier and more
comfortable lives for people around
the world
SDGs 3.4.1
54
BusinessOMRON Corporation Integrated Report 2021 Introducing Case Studies
Transforming Medical Care to Reduce Cerebrovascular /
Cardiovascular Diseases to Zero
Allowing anyone access to personalized hypertension treatment anywhere
Currently, work is underway to develop and promote RPM services as we aim to resolve common challenges around
the world. Dealing with patients suffering from chronic diseases who are at risk of severe COVID-19 complications,
preventing medical expenditures from soaring, reducing workloads for medical professionals, and easing burdens on
patients visiting clinics are some of these challenges we face. We therefore concentrate on creating an environment
that allows remote monitoring of patient conditions using innovative devices and information technology. We are also
developing algorithms that support doctors for proper diagnosis and treatment. Collaborating more closely with our
partners will help us create new solutions.
Hypertension Plus — Remote patient monitoring service for hypertension supporting medical
care with medication recommended by using self-monitored blood pressure data
About 30% of all adults in the UK are reported to be suffering from hypertension. The National Health Service (NHS), a
publicly funded health system administered by the UK government, has set a goal of achieving an 80% blood pressure
control rate by 2030. As the latest control rate is estimated at 60%, more effort is called for. NHS patients access
pre-registered general practitioners (GPs) except for emergencies. For GPs with busy practices, patients will have
longer wait times that cut into consultation time. Reasons like these can make patients interrupt or even discontinue
treatment. Therefore, enhancing treatment efficiency and supporting continuity of treatment will be the keys for
hypertension management to improve in the UK.
In April 2021, OMRON launched Hypertension Plus, a remote patient monitoring service for hypertension, in the UK.
This service generates a customized blood pressure management and medication plan for each patient using blood
pressure readings taken at home to help enhance the efficiency of clinical practices.
Using Hypertension Plus, a hypertensive patient can send self-measured blood pressure readings to the GP office’s
electronic medical record (EMR) system, enabling the doctor to trace the patient’s blood pressure changes in detail on
the management screen, connected to the EMR system. Hypertension Plus directly recommends a three-month
medication plan that factors in patient attributes and blood pressure levels. It also determines whether medication
needs to be changed based on post-medication blood pressure data and if needed, recommends a new personalized
medication plan. Hypertension Plus was shaped by the TASMIN home blood pressure trials, a clinical study that
proved the potential to reduce blood pressure through self-management and remote adjustment of medications,
conducted at the University of Oxford. Recommendations are based on clinically proven medication titration
techniques for hypertension, conforming to current National Institute for Health and Care Excellence (NICE) guidelines.
These offer guidance for choosing antihypertensive drug treatment depending on patient age, ethnicity, and
complications. Hypertension Plus allows the doctor to check each patient’s conditions in detail within a limited time,
using their consultation time more effectively by referring to the recommended medication plan.
Patients can have their medications modified from home, so hypertension care is uninterrupted and the need for a GP
visit is less. Encouraged by clinical commission groups’ (CCGs) decision to use the service, Hypertension Plus is
currently being deployed at GPs across the UK.
Doctor’s management screen
Blood pressure graph, data, etc. for each patient
Patient’s registered information and 3-month medication plan
recommendation
55
BusinessOMRON Corporation Integrated Report 2021 Patient’s smartphone app screen for patients
Daily blood pressure
management schedule
Blood pressure
management screen
Medication plan screen
Employee Comments
At the end of FY20 OMRON Healthcare Europe reached an important milestone in our Going
for Zero vision, the launch of our first Remote Patient Management service for GP practices
in the UK. Hypertension Plus is based on know-how from the TasminH4 Clinical Study,
exclusively licensed from Oxford University, which demonstrated that remote patient
management, including remote medication reviews, can lead to significant reductions blood
pressure compared to usual office-led care.
Hypertension Plus is designed to improve health outcomes and reduce workload for GPs.
Workflow algorithms help to streamline patient management, and the clinical dashboard is
integrated with medical record systems, ensuring that decisions taken within the platform
are recorded in the patient’s record.
The Hypertension Plus app support patients to manage their blood pressure from home.
Medication plans are displayed in the app, with reminders to take medication and submit
blood pressure readings. Dr’ss decisions are shared with patients and educational content encourages health living.
Throughout FY21 we will be expanding Hypertension Plus to more NHS customers in the UK. This is the start of an
exciting journey that has the potential to transform the way that chronic diseases are managed in Primary Care.
OMRON Healthcare
Europe Connected
Services and Solutions
Director
Paul Stevens
Comments from Partner
Covid-19 has highlighted more than ever the importance of managing cardiovascular risk factors particularly in target
populations. Technologies such as Hypertension Plus can help primary care clinicians to appropriately target their
workload so that they are using their skills most appropriately and able to support patients with the resources they
need to manage their blood pressure.
Dr. Nav Chana
National PCH Clinical Director, National Association of Primary Care (NAPC)
56
BusinessOMRON Corporation Integrated Report 2021 Collaborative research with Kyoto University harnessing AI and vital signs monitoring to realize
Zero Events
Achieving zero cerebrovascular/cardiovascular events caused by high blood pressure requires appropriate blood pressure
control for hypertensive patients, enabling them to maintain their blood pressure within a normal range. Approximately
half the hypertensive patients undergoing treatment still have blood pressure beyond the normal range and study results
indicate that even individuals with normal blood pressure readings may still have a possibility of developing serious
cerebrovascular/cardiovascular diseases from blood pressure fluctuations. Such situations make early-stage detection of
blood pressure changes essential to identify stroke and cardiac event warning signs.
OMRON, aware of these issues, partnered with Kyoto University to launch a research program called “Healthcare Medical
AI” in June 2021 with the goal of exploring how the use of artificial intelligence (AI) can minimize the risk of
cerebrovascular/cardiovascular events. Two study themes are focused on, the first on developing AI that will be able to
generate personalized blood pressure management methods to support lifestyle improvements that help prevent
hypertension and its progression. The second study aims to develop AI that enables the early detection of changes in
blood pressure and other related vital signs self-measured at home to provide the risk identification.
Through developing these two AI technologies, we pursue effective blood pressure control and minimizing the incidence
of cerebrovascular/cardiovascular diseases. To date, OMRON has developed the first-of-its-kind wearable blood pressure
monitor with medical-grade measurement accuracy, as well as pursuing biometric information measurement technology
to monitor body composition
data, physical activity intensity,
and sleep in daily living
conditions. Combining
OMRON’s measurement
technology with Kyoto
University’s accumulated AI
expertise creates a powerful
resource that will allow us to
develop OMRON-unique
Healthcare and Medical AI.
Blood pressure, daytime blood pressure, nighttime blood pressure,
EKG, body weight and body composition data, physical activity
intensity, sleep, diet (salt intake)
Development of AI for detecting
warning signs of cerebrovascular/
cardiovascular events
Development of AI for personalized
blood pressure management
The collaborative research program’s scope of development
Self-measured vital signs data
Vital signs
database
Data accumulation
Diagnosis/
treatment
Medical facility
Analysis
Patient
Doctor
Use
Employee Comments
The prevalence of connected devices has facilitated accumulating cardiovascular disease-
related health data such as blood pressure measured daily at home and lifestyle data. Using
this data, OMRON Healthcare launched remote patient monitoring services in the U.S. and the
UK. As we aim to differentiate OMRON from others with unique services, we initiated a
collaborative research program on artificial intelligence (AI) using health and medical data.
Two points make this research program stand out. Firstly, OMRON Healthcare commands the
top share of the global home-use blood pressure monitor market, providing access to an
immense quantity of high-quality data. Secondly, Kyoto University has many AI and medical
specialists among its distinguished researchers. These points significantly contribute to the
ability to create advanced AI that only the exceptional quality of our data makes possible, and
that can be implemented in actual clinical workflows.
We are presently working on research with results to be published globally in a research paper.
From this starting point, we will expand collaborations with medical and research partners, as we continue to make
progress toward zero cerebrovascular and cardiovascular events.
Development Center
Technology Development HQ
Core Technology Group
Hiroshi Koshimizu
Comments from Partner
Amid the pandemic of COVID-19 and the increasing risk of collapsing the healthcare systems,
one of the urgent challenges is the development of medical systems outside of hospitals. This
is directly associated with the issues, which we are going to face in the very near future, such
as escalation of medical costs due to super-aged society and the decrease of healthcare
professionals. To address these difficult issues together with OMRON Healthcare in this
“Healthcare and Medical AI” collaborative research program, we would like to explore
solutions of how to prevent the event risks to spend happier and healthier lives at home with a
new type of healthcare system and AI studies.
Kyoto University
Graduate School of Medicine
Department of Biomedical Data
Intelligence
Ph.D., Professor
Dr. Yasushi Okuno
57
BusinessOMRON Corporation Integrated Report 2021 Cumulative blood pressure monitor sales of 300 million units indicate a global prevalence of
home blood pressure monitoring
The year 2021 will see global sales of OMRON home-use blood pressure monitors reach the 300 million mark. It is
almost 50 years since OMRON launched its first home-use blood pressure monitor in 1973. At the time, common
thinking was that blood pressure could only be measured at a medical facility, so the concept of home blood pressure
monitoring was not accepted by consumers or medical professionals. But even so, we were confident in our belief
that self-measured blood pressure should help promote people’s health, so OMRON ceaselessly worked to raise
awareness of the public and medical community regarding the importance of home blood pressure monitoring. At the
same time, we were pursuing the usability that would enable anyone to easily obtain accurate readings with medical-
grade measurement accuracy. To make home blood pressure monitoring more accepted, we cooperated with medical
professionals and experts, participating in numerous clinical studies to confirm efficacy. In 2014, some 40 years after
launching our first monitor, our persistent efforts bore fruit. The 2014 Guidelines for the Management of Hypertension
recommended that home blood pressure readings take priority in diagnosis data over doctor office-taken blood
pressure readings, recognizing the efficacy of home blood pressure monitoring. With this, home blood pressure has
been regarded as appropriate criteria for hypertension diagnosis in Japan as well as worldwide.
From the release of its first blood pressure monitor it had been about 30 years before OMRON achieved cumulative
global sales of 100 million units in 2009. But the next milestone of 200 million was reached in seven years, and in just
five years after that, OMRON blood pressure monitors are set to achieve 300 million units in global sales, indicating
home blood pressure monitoring becoming prevalent at an accelerated pace.
Along with the recent rise of lifestyle disease patients, the practice of monitoring blood pressure at home is also
growing in emerging nations. COVID-19 has also played a part in raising people’s health awareness, helping our global
monitor sales to achieve a year-on-year increase of 20% in fiscal 2020. We will remain committed to delivering
innovative and high-quality products to hypertensive and other individuals who need a blood pressure monitor. At the
same time, we will expedite the roll-out of RPM services and the development of AI technology supporting
hypertension treatment as we continue our progress toward achieving Zero Events.
History of blood pressure monitor development in line with
home blood pressure monitoring acceptance
OMRON’s first blood
pressure monitor
Fuzzy logic-based blood
pressure monitor
Fully automatic Spot Arm
blood pressure monitor
Wearable blood
pressure monitor
Blood pressure
monitor + ECG
1973
1978
1991
2002 2004
2018 2019
OMRON’s first monitor
with digital display
Wrist blood pressure monitor
with wrist positioning guide
Connected wrist blood
pressure monitor
Upper arm blood
pressure monitor
58
BusinessOMRON Corporation Integrated Report 2021 Innovation Exploring Initiative HQ (IXI)
Corresponding SDGs
The Innovation Exploring Initiative HQ (IXI) aims for creation of new businesses by designing near future to
solve social issues, and planning and implementing the necessary strategies to realize it. We contribute to
realization of better society by pioneering new business opportunities as the company-wide innovation
platform, and creating social needs with new businesses created by innovating business models.
Making a Model for Creating New Businesses
that Solve Social Issues
OMRON has been banding together across the entire company to
strive for “ambidextrous management” as a way to build up the power
to achieve self-driven growth. IXI plays a role for it with its mission
“Seeking and establishing new businesses.” In order to develop new
businesses and improve reproduction as OMRON’s innovation platform
for the entire company, we are focusing on planning strategies that
create back-casting innovation starting from the near future designs,
building dedicated groups for business verification and accumulating
knowledge. We have implemented over 20 projects since our
establishment three years ago, and four themes are currently
proceeding to business verification phase. Also, in fiscal 2020, we
have built the Integrated Innovation Process as a model of business
creation. In this process, verification points and judgment criteria are
clarified that tend to be personal and vague for new businesses, and
Executive Officer
Senior General Manager of Innovation
Exploring Initiative HQ
Hidetaka Ishihara
quality of themes and implementation speeds have improved significantly. Additionally, we have been working on
strengthening and training human resource for architect and business creation who can promote business
development, through this process. We have established a human resource development method that allows a high-
quality “trial and learning” approach by defining required skills for each job type and giving detailed feedbacks through
the on-the-job training in projects.
Creating New Businesses to Drive Growth and
Accelerating the Social Implementations
In the time of new normal, society drastically changes globally, causing various social issues. On the other hand, for
OMRON with the corporate philosophy to solve social issues through its business, this is a time full of business
opportunities, so we will work on catching those opportunities for new businesses.
Seeking business opportunities does not mean randomly looking for an unknown area. With all the various business
opportunities available, we strategically need to select target areas and maximize investment efficiency. OMRON has
been proceeding businesses with a focus on three domains: factory automation, healthcare, and social solutions. We
will continue to create businesses with these three axes, proactively responding to social issues that could not be
covered in each domain.
In determining the direction of new businesses, we focus on two main approaches. The first approach is business
expansion from an essential value perspective. In this approach, we utilize customer assets that our business divisions
have ever built, re-define our value by recognizing new social issues, and expand our business by advancing business
models. The second approach is expansion into new business areas in our domain. By proactively promoting
collaborative creation with customers regarding the four growth opportunities that OMRON recognizes for next long-
term vision – “rising sophistication of manufacturing,” “automation of primary & tertiary industries,” “preventative
medical support,” and “energy solutions to achieve carbon neutral” – we will powerfully promote the creation of new
value and implementation in society, while obtaining the business assets that OMRON does not have.
Over the course of three years since IXI’s establishment, we have built OMRON-specific model process for business
creation and many external people have joined this, agreeing with OMRON’s approaches and the direction of business
creation. We are also internally training ambitious human resource for architect and business creators, through many
projects. Our goal to “reproduce the founder’s philosophy and capability as a company” is surely being achieved. We
are completely warmed up to fulfil the next long-term vision. From fiscal 2021, we will definitely shift to the goal of
59
BusinessOMRON Corporation Integrated Report 2021 creating businesses to drive OMRON’s growth, focusing more on speedy businesses implementation in society and
accelerating business creation.
Examples of New Business Creation to Solve Social Issues
Promoting Agri-automation Business in Which People Can Flourish
Social Issues to be Solved
In recent years, agriculture in China is experiencing serious lack of labor force, and it has become a social issue
how to continue the farming. At the same time, demand is increasing for vegetables and fruit grown with low
or no pesticides as customers become more conscious of food safety and security. Under these situations, the
number of skilled worker who can produce crops with low or no pesticides is limited, and there is a need to
realize high-quality, stable agriculture that does not depend on human skills.
Effort for Social Implementation
OMRON has developed services that support human judgment in their work
by analyzing cultivation conditions, such as growth of crops, temperature,
humidity and daylight hours, instead of whole automation that requires large
capital expenditure. These services are now being tested in the field in China.
In these services, as the crops growth state is timely quantified and the use
of pesticides and chemical fertilizers are controlled to be minimal, anyone can
work on production at the same level as those of skilled workers, which
contributes to solving lack of labor force. In May 2020, we started up the
cultivation technology development base in China, accelerating developments
to make it a new business. With experimental farms further expanded,
business creation is proceeded with partnerships between Japan and China.
Data Utilization Support Business to Effectively Help Digital Transformation
in Manufacturing
Social Issues to be Solved
With the advanced digital technology, we are now able to obtain large amount of data through sensors at
various places including manufacturing sites. Customers in manufacturing industry expect that they can utilize
the various data for creation of new value in quality improvement, new product development, and collaborative
creation projects by multiple companies. On the other hand, it takes a lot of manpower and time to digitalize
on-site documents and extract necessary information from large amount of data to analyze it. It is required to
facilitate efficient data use and sharing for various purposes.
Effort for Social Implementation
OMRON extracts and processes necessary data from large amount of data collected from manufacturing sites,
and verifies solution value for creative work, such as planning quality improvement and production or
developing new products and services. At our Group’s production sites, we
automatically summarized production control data of parts handled at
multiple locations and significantly improved work efficiency, such as
converting the data into a suitable form for production planning. With these
achievements, we now have started suggesting introduction of data
utilization support business for customers who are in need of production of
multiple products or in variable volume production, such as automotive parts,
digital parts or cosmetics. With lack of labor force in the manufacturing
industry becoming more serious, we will support customers’ DX effort by
enabling more people to engage in work with high added value.
60
BusinessOMRON Corporation Integrated Report 2021 Elderly Care Support Business Aimed for Extension of Healthy Life Expectancy (Japan)
Social Issues to be Solved
Ultra aging society that Japan will experience first in the world will afford a huge opportunity for OMRON to
create new businesses. While the number of care givers are shorted for the elderly in needs of long-term care,
it is the social challenge to extend healthy life expectancy where people can make livings independently.
Effort for Social Implementation
About half of people who need light nursing only have physical and mental functional deterioration due to their
living style that is not active, and this can be prevented or improved. It is essential for extending health
expectancy to promote preventing long-term care by “self-reliance support,” which helps those people recover
physical and mental functions to make their daily lives or join social activities. Therefore, OMRON has developed
a system to support promotion of self-reliance that can be utilized further, by
codifying know-how of experts who support self-reliance. Currently, we are in
a partnership with Oita Prefecture, which is proactively supporting the elderly
for self reliance and preventing care need level deterioration and are verifying
systems at nursing care facilities in the prefecture. At nursing sites,
communication is very important to grasp care receivers’ conditions that vary
on individuals. Therefore, this system is designed to decrease work load with
machine supporting daily works so that people can concentrate on creative
works such as having communication. By allowing anyone to give support for
self-reliance at the same level of experts, we will provide new values with
which employees at nursing sites can play more important roles.
Comments from Partner
In Oita Prefecture, we are working on building the community-based integrated care system with the
policy goal of “building a society of healthy longevity and lifelong activity. We have been focusing on
promoting self-reliance and preventing deterioration of care need levels for the elderly, such as holding
community care meetings, which is a leading move in Japan. Within the prefecture, the short-term
intensive prevention service is spreading (which works on improving the elderly’s physical functions
with rehabilitation experts, etc. in a short period aiming for improvement of the quality of the elderly’s
living function such as meals and baths), while it is required to build a system that allows the elderly in
need of support to receive the service. To solve this issue, we as the prefecture have agreed with
OMRON to promote cooperative business utilizing ICT systems. We are working on improving the
quality and efficiency of nursing and preventive long-term care by utilizing and analyzing collected data,
along with promoting self-reliance of the elderly in regions. Also, through our approaches, we plan to
assess and verify the effect of general supporting business for nursing and daily livings, including our
short-term concentrated prevention service.
Senior Staff, Community-based
Integrated Care Promotion Group
Welfare for the Aged Division
Welfare and Health Department
Oita Prefecture
Hikaru Ogasawara
Employee Comments
Feeling My Own Growth through Business Creation Process
With my strong will to narrow the gap between the average life span and health expectancy by
supporting self reliance for the elderly, I joined IXI from a different business division in 2019 and am
now the project leader of elderly care support business. In IXI, you can obtain skills that are necessary
to create businesses proceeding projects steadily, with the vision to solve social issues as an axis. I
only had experience of technology or products developments as an engineer when I joined the division,
but I formed a team with those who had various experience and have been proceeding projects based
on integrated innovation process. Through promoting projects, I was able to not only accumulate
know-how to create new businesses but also recognize my own strength as an engineer to “change
technology into value.” After starting with four members, this project has become a business
department in fiscal 2021 which makes me feel that we are making this a business steadily. With the
large field of Oita Prefecture, we aim for supporting the elderly in Oita first, by verifying the effects with
parties from the Prefectural Office and across the Prefecture. Further, we aim to contribute to the
society by focusing on the social implementation of our system as an eco system that supports
people’s health, in partnerships with more companies and municipalities.
Elderly Care Business
Department
Business Incubation
Center
Yuki Kato
61
BusinessOMRON Corporation Integrated Report 2021 Propelling Collaborative Creation toward New Businesses
To accelerate implementation of new businesses in society, it is important to overcome the
“Not Invented Here Syndrome” and create collaboratively with the startups developing
cutting-edge technologies and business models by open innovation. In particular, for new
business development or areas where innovation of business models is needed, who you
have partnerships with is the key. To deepen key cooperation with partners, OMRON
VENTURES CO., LTD. (OVC) proactively promotes strategic investments and expands the
network to connect to advanced startups.
In seven years since its establishment, OVC has invested in 17 startups and has been
building relationships with venture capital firms in the center of the world’s innovation eco
system. In fiscal 2018, OVC started to accelerate investments for startups in Israel and
Silicon Valley where world-leading high-technology startups emerge, nurturing businesses
and technologies. To invest in foreign companies, it is important to build connections by
getting involved in networks of foreign investors. There are many entrepreneurs who work on solving social issues by
innovative technologies and business ideas, and many successful entrepreneurs establish venture capital firms to
support newcomers. Therefore, excellent entrepreneurs gather at world-famous venture capital firms, creating many
innovations. OVC focuses on the eco system of these innovations and increases the chance to meet excellent
ventures to conduct optimal investments by combining relationships with entrepreneurs and networks with venture
capital firms. Moreover, with the customers and technology assets obtained from these investments, OVC aims to
create more social needs through collaborative creation with IXI and other businesses of OMRON.
Tomoko Inoue
President and CEO
OMRON VENTURES CO., LTD.
and
General Manager
Co-Innovation Design Center
Innovation Exploring Initiative H.Q.
OVC Investment Track Record
May
2015: Plant Life Systems Co., Ltd.
Nov.
2018: Connected Signals, Inc.
Jun.
2015: 3D Media Co., Ltd.
May
2019: Theranica Bio-Electronics Ltd.
Jul.
2015: Organic nico Co., Ltd.
Jun.
2019: Patients Know Best Limited
Mar.
2016: Life Robotics Inc.
Oct.
2019: Realtime Robotics, Inc.
Oct.
2016: Exvision Corporation
Mar.
2020: Avails Medical, Inc.
May
2017: Vegitalia Inc.
Mar.
2020: AIRx Health Inc.
Jun.
2017: Lark Technologies Inc.
Mar.
2021: DIMAAG-AI, Inc.
Dec.
2017: mofiria Corporation
Jul.
2021: Terrals Technologies Pvt. Ltd.
Oct.
2018: De-Identification Ltd. (D-ID)
Example of Collaborative Creation Projects with Investees
Patients Know Best Limited (PKB) (U.K.)
PKB provides platforms to share patients’ medical data. Electrical medical records are common in U.K., but they are not shared
among hospitals. Thus, it was causing physical and financial burden for patients as they needed to repeat check-ups every time
they change hospitals to visit. Also, there were other social issues such as optimization of public medical expenses. For this
situation, PKB has built a medical data sharing system with high security, which patients are authorized to administrate. This
enabled not only to share medical data among hospitals but also for patients to administrate own medical data. Currently, OMRON
Healthcare Europe is working on connecting its health care app “OMRON Connect” and PKB’s system so that patients with chronic
diseases can share their home data measured with OMRON’s devices with hospitals and improve efficiency of treatments.
DIMAAG-AI, Inc. (U.S.)
DIMAAG-AI provides solutions utilizing AI that can explain the estimate results, such as failure detection or machine failure
estimate. It aims for renovating manufacturing processes with human, and the comprehensive system buildings such as generation
of AI model and re-learning after operation with data visualization in inspection area show their characteristics. While inspections by
human are more difficult than before due to lack of labor force or COVID-19 crisis, the social issue is how to inherit experienced
workers’ skills. The Inspection Systems Business Division at IAB works on introduction of AI for substrate visual inspection system
and X-ray inspection system in order to support customers’ high-quality manufacturing processes. With the synergy effect of
collaborative creation with DIMAAG-AI, we are working on realization of unmanned inspection system by introducing AI-based
technologies for various scenes related to inspection operation.
62
BusinessOMRON Corporation Integrated Report 2021 Technology & Intellectual Property HQ
Approaches for Strengthening Our Core Technologies to Realize a New Normal in Society
OMRON’s Core Technologies: Sensing & Control + Think
OMRON has worked to strengthen the idea for its core technologies,
Sensing & Control + Think, in the course of VG2020. “Sensing”
technology refers to the extraction of necessary on-site data. Based on
the information obtained through sensing, “Control” technology
provides appropriate solutions, while “Think” adds the element of
human wisdom. OMRON uses these together to create value for
solving social issues. In 2018, we established OMRON SINIC X
Corporation (OSX) to harness advances in technologies such as AI, IoT,
and robotics, and to further evolve our core technologies. In addition to
our Keihanna Technology Innovation Center, which is the main base for
our R&D activities, the Technology & Intellectual Property HQ also has
a development base on the west coast of the United States and
another in Tokyo, all of which contribute to strengthening OMRON’s
corporate R&D capabilities.
Deputy Senior General Manager, Technology
and Intellectual Property HQ of the Company;
President and CEO, OMRON SINIC X
Corporation
Masaki Suwa
Creating Value and Strengthening Our Business through Core Technologies
The Technology & Intellectual Property HQ and OSX engage in R&D to devise innovative products for our existing
businesses and for new business development. In our R&D activities to strengthen existing businesses, we worked
to downsize PV inverters (a key part of solar power generation systems) and develop small 3D vision sensors that can
be mounted on robot arms to help compensate for labor shortages at manufacturing sites. For new business
development, we have overhauled our theme-planning process and established our Integrated Innovation Process
together with the Innovation Exploring Initiative HQ (IXI) to realize near-future innovation driven by social needs. This
approach allows us to set themes with a great impact on both society and technology in order to realize a world
where people can flourish even more. Examples would include sensing technology such as vision sensors that enable
machines to better understand people and control technology enabling robots to be flexibly and easily handled. We are
also working on the development of AI technologies that support human work by “reading” human intentions from
large amounts of data. These highly evaluated research results have been presented at various conferences, published
in a journal and adopted by IROS,* the world's premier academic society for robots. OMRON is also globally engaged
in intellectual property creation activities such as intellectual property education for engineers and has an internal
reward system for inventions, which has enhanced the company’s patent-application abilities. These efforts have
garnered high praise from other organizations. OMRON was selected as one of Clarivate’s Top 100 Global Innovators
2021, which is given to the most innovative business and research organizations around the world. It marks the fifth
consecutive year OMRON was named as a top innovator by Clarivate.
As society moves toward a new normal, robot and AI technologies will continue to advance, not only in manufacturing
but also for medical care, food, office work, and R&D. OMRON is moving forward with advanced development of
technologies that embody the integration of robotics and AI, such as smart equipment that can make on-site decisions
without requiring humans to spend time providing instructions and machines that harmonize their actions with the
humans who working with them. In terms of co-creative activities through open innovation, the knowledge and know-
how of external business, startups and research institutes in combination with OMRON’s core technologies will create
an organic reaction that drives innovation.
*International Conference on Intelligence Robots and Systems
Case 1
A High-Speed Sensing Technology for Robot Arms
As labor shortages at manufacturing sites become more serious, there is a need to automate the
picking of randomly postured parts of various shapes during the product assembly process.
OMRON therefore developed its own sensing technology in a form of small and lightweight 3D
vision sensors that greatly shortens imaging times with a special detailed projection pattern,
making it possible to measure and recognize objects at high speed. The sensor can be mounted
on the robot arm, allowing the robot to assess parts like a human would. This sensor technology
is installed in the FH-SMD Series 3D Vision System launched by Industrial Automation Business
(IAB) in March 2021 and is contributing to the automation of manufacturing lines.
63
TechnologyOMRON Corporation Integrated Report 2021 Case 2
Development of a Circuit Design Technology to Suppress Noise from
Electromagnetic Interference
For photovoltaic power generation, storage needs are diversifying—for example, as part of
using and selling power, or as a backup during a power outage or disaster. Conventionally,
we had to build a customized system according to purposes, and adding functions
afterwards was costly. OMRON therefore leveraged its many years of know-how in power
electronics technology to develop a multi-purpose inverter for household energy storage systems that supports
additional functions simply by adding option units. This compact and large-capacity system is not limited by installation
environment or available space. This inverter technology is part of our 「Multi-Energy Storage Platform KPBP-A」
released by Social Systems Business (SSB) in October 2020 and contributes to creating a sustainable society through
the spread of renewable energy.
Accelerating Social Implementation of Technology with the World's Cutting-Edge Minds
OSX recruits world-class human resources in AI and robotics technology, carrying out co-creative projects with
research institutes and companies around the globe while creating near-future designs that originate from
innovative technologies. By placing AI, robotics, and sensing technology at the center of our current R&D and
to embody harmony between humans and machines, we are working on innovative approaches to human-
machine communication and the handling of diverse data, and evolving the physical manifestations of
machines. OSX has steadily built a reputation since its establishment in 2018, with papers accepted at world-
class international conferences such as CVPR*1, ICML*2, and ICRA*3, and is attracting excellent interns and
researchers from all over the world. To develop the technological seeds produced by OSX into new businesses,
OMRON discusses ideas with researchers inside and outside the company and is accelerating the social
implementation of innovative technologies.
* 1 Conference on Computer Vision and Pattern Recognition
* 2 International Conference on Machine Learning
* 3 International Conference on Robotics and Automation
Research Themes
If humans and machines can interact via words, they will be able to learn in a coordinated
manner, as if two humans were communicating. People can then focus on more creative
activities. To that end, we are engaged in the area of vision and language research. This
research involves machines expressing in natural language the surrounding conditions they
have captured, and searching or generating images from natural language.
Focusing on the field of informatics, I hope to revive the research and technology paradise.
OSX has the potential to be at the heart of that paradise. The AI and robotics researchers
gathered at OSX will continue to advance collaborations, both internally and by involving
surrounding companies and universities.
An important challenge for AI technologies, especially for products and services that use deep
learning, is how to get a machine to use as small a data set as possible to efficiently learn to a
practical level. OSX is tackling this challenge by applying the results learned in one specific
environment for learning in another environment without sharing the data itself, which enables
efficient learning even with only small amounts of data dispersed in various locations.
OSX has been advancing our highly original approaches by bringing together the cutting-edge
AI research and the current and future needs of the real world. Going forward, we will continue
to work closely with people inside and outside the company to create high-impact and
universal achievements.
Principle Investigator
OMRON SINIC X
Corporation
Yoshitaka Ushiku
Principle Investigator
OMRON SINIC X
Corporation
Ryo Yonetani
64
TechnologyOMRON Corporation Integrated Report 2021 Corresponding SDGs
Human Resources Management that
Supports Management Based on the
OMRON Principles
In order to contribute to social development through our business and to enable our Company and
employees to continue growing together, it is important for each of our employees to aim higher when it
comes to innovation driven by social needs and to give free rein to their can-do spirit. At OMRON, we are
working to create an environment where employees with diverse personal qualities, skills, and experiences
can be empowered and strive to create new value together while gaining satisfaction and a sense of
fulfilment from their work.
A Human Resources Strategy Geared Toward Practice
of the OMRON Principles
We believe that, in order to create innovation and solve social issues
through our business, it is essential for our human resources, diverse in
personal qualities, skills, and experiences, to be energized and performing
to their full potential. VG2.0 has therefore included initiatives aimed at
creating an environment where each employee can work toward self-
development, mutually increase the value of our human resources, and
fully engage in the practice of the OMRON Principles as a team.
The pillars of this strategy are “Expanding the Practice of the OMRON
Principles,” which will broaden the circle of empathy and resonance with
the practice of the OMRON Principles and encourage new practice of
these Principles; “Fostering and Recruiting Leaders,” who will embody our
principles and lead our teams; and “Empowering of Diverse and Versatile
Human Resources,” which will create environments where our diverse
human resources worldwide can engage more enthusiastically in the
practice of the OMRON Principles.
By linking a variety of measures around these three pillars, we are
committed to creating an organizational culture within which employees
can engage in their own work with a sense of pride and satisfaction and
continue to perform to a high standard.
Managing Executive Officer
Senior General Manager of
Global Human Resources and
Administration HQ
Masahiko Tomita
Fostering strong leaders who will
embody the OMRON Principles and
be at the forefront of leading the
organization toward our target state
Further Practice of
the Principles
Dialogue, TOGA
Using employees’ self-set goals (Planting
the Flag) to give employees a real sense
of the link between their work and the
OMRON Principles and promote a culture
of ongoing aspiration toward putting
these Principles into practice
Fostering and
Recruiting Leaders
Global Core Positions and
Core Human Resources Strategies
Diverse & Versatile
Human Resources
VOICE, HR systems, G-HRMS
Creating an environment where each of our
diverse and versatile employees can leverage
their individuality and abilities to the full,
realizing the OMRON Principles
65
PeopleOMRON Corporation Integrated Report 2021 Expanding the Practice of the OMRON Principles
At OMRON, employees’ self-set goals give them a real sense of the connection between their work and the OMRON
Principles and prompt them to work to promote a culture of ongoing aspiration toward putting these Principles into
practice. The OMRON Global Awards (TOGA) are an initiative to share stories about how our Principles are practiced
with our employees throughout the world, in the hope that these stories will resonate with them and expand the
practice of these Principles. First held in 2012, TOGA are used to share entrants’ team efforts to solve social issues.
Sharing these within the Company and beyond provides an opportunity to spread feelings of empathy and resonance
and to give each and every employee a sense of pride and fulfilment in their jobs. (For details of TOGA, please refer to
the section starting on page 69.)
Fostering and Recruiting Leaders
At OMRON, we are working at a global level to foster strong leaders who will embody the OMRON Principles and be
at the forefront of leading the organization toward our target state. Our Global Core Positions and Core Human
Resources Strategies are frameworks for fostering and recruiting leaders who will embody the OMRON Principles
and lead and support teams of diverse human resources in further practice of these Principles. The Global Core
Positions are the most important executive positions that lead the OMRON Group’s management and business.
Currently, approximately 200 Core Positions have been established globally, and we are continually working to
achieve timely assignment of leaders who are capable of taking on the responsibility of these positions. VG2.0 has
created the necessary pipeline through the discovery of human resources suited to assume Core Positions in the
future and the implementation of frameworks to foster them as successors and next-generation leaders. In addition,
our commitment to increasing the percentage of non-Japanese in our overseas Core Positions brought their number
to 75% in fiscal 2020, significantly exceeding our target of 66% and allowing an increasing degree of prompt decision
making based on local perceptions.
Overview of System to Assign the Right People to the
Right Global Core Positions on an Ongoing Basis
Changes in the ratio of non-Japanese in
Core Positions overseas
FY2020 Results
(Percentage of non-Japanese)
Core Position
Appointment
Core Position
Dismissal
Global Core
Position
Business Companies/
Subsidiaries and Affiliates
Key Position
Ready Now
F
o
s
t
e
r
i
n
g
Successors
Select / Replace
Next-generation
Leaders
Select / Replace
80
60
40
20
0
Fiscal 2020 Target
75%
Core Position
Human Resource Pool
11
12
13
14
15
16
17
18
19
20
Fiscal
year
* “Core Positions overseas” is synonymous with the disclosed
“key managerial positions overseas.”
Diverse and Versatile Human Resources
At OMRON, we are striving to create the right environment for our diverse and versatile human resources to be
empowered and leverage their individuality and abilities to accelerate the practice of the OMRON Principles
worldwide. As part of this, we are introducing our employee engagement survey, VOICE, and a global human
resources management system worldwide. We aim to create an attractive organization and environment in which
each employee is highly motivated to practice the OMRON Principles and is able to exercise their abilities to the full.
VOICE : Our Employee Engagement Survey
Management has been running VOICE*, an engagement survey asking for genuine feedback from all employees
worldwide, since fiscal 2016. This is an initiative for OMRON’s continued sustainable development, allowing
management to gauge our Company’s appeal as a workplace, understand and identify management issues, and take
action to solve these issues.
* VOICE: VG OMRON Interactive Communication with Employee
66
PeopleOMRON Corporation Integrated Report 2021 From fiscal 2018, we have incorporated the Sustainable Engagement Index (SEI*), which statistically examines growth
in performance and the Company’s attractiveness. Our management team uses scores based on analysis of the
aggregate data as well as the free comments that communicate what our employees really think to monitor issues,
understand and identify monitoring outcomes as management issues, hold thorough discussions aimed at their
resolution, and continue reforms. In response to the fiscal 2018 survey results, we drafted and implemented over 300
improvement measures worldwide in order to facilitate higher employee performance, including review of decision-
making authority and business processes and development of IT infrastructure and various systems. Many employees
gained a real sense of being able to participate in the creation of better workplaces and organizational reform through
VOICE. As a result, our response rate rose to 90% worldwide in FY2020, the number of free comments increased to
40,453, and scores improved across all 15 survey categories as compared to the previous year. The introduction of
VOICE has allowed employees to participate in planning organizational reform and improvement and our management
team and on-site leaders to begin establishing a Working Environment Improvement Cycle.
* SEI : Sustainable Engagement Index
Progress of VOICE Response Rate/Number of Free Comments
FY2016
FY2017
FY2018
FY2020
56
of which
2 free comments
76
of which
1 free comment
76
of which
1 free comment
69
of which
3 free comments
77%
Recipients:21,911
Respondents:16,975
85%
Recipients:23,617
Respondents:19,957
85%
Recipients:23,707
Respondents:20,161
90%
Recipients:21,287
Respondents:19,176
No. of
questions
Response
rate
No. of free
comments
-
7,614
8,496
40,453
Q1. The best thing about working at OMRON:13,228
Q2. Changes that should be made to improve OMRON:13,167
Q3. Suggestions relating to the COVID-19 pandemic:14,058
Global Human Resources Management System
Our global human resources management system (G-HRMS) is an element of our IT infrastructure that provides a
visualization of the skills, experiences, and aspirations of OMRON Group human resources worldwide, facilitating the
building of excellent teams optimized for engaging with the practice of the OMRON Principles. In order to adopt best
practices in human resources management and visualize and vitalize our diverse human resources, we are introducing
a management system* that is being taken up by many global corporations, and will begin to put it into operation on a
step-by-step basis in fiscal 2021. In fiscal 2022, the starting year of our next long-term vision, we plan to use it not
only to visualize our globally distributed human resources information and make it possible to compile optimal teams
based on our business strategies, but also to provide opportunities for employees to work toward realizing their
individual aims and envisaged careers.
Our G-HRMS will allow employees to “visually showcase” their own abilities and experiences and their diverse
aspirations regarding the practice of the OMRON Principles, allowing us in turn to increase opportunities and possibilities
for employees to freely demonstrate their strengths to the full. We believe that increasing every employee’s sense of
fulfilment and experience of growth in their career and successfully assigning the right people to the right positions on a
global scale will be particular drivers of employee and company growth over the next 10 years.
*SAP Success Factors, developed by German corporation SAP SE
Actions for Future Expectations and Needs Using Our G-HRMS
Future Expectations
and Needs
Actions
Visualization
Visualization of human resources information
Vitalization
Vitalization of human resources
Company
*Strengthening
the
organization
Steady supply of human
resources for continued
business growth
Timely supply of human
resources in our businesses
(existing, new) and projects
Lowering of
management costs
Maximization of individual
employee performance
(increase in engagement)
Employees
*Strengthening
individual
abilities
Feeling job satisfaction,
challenging themselves and
growing in pursuit of their own
aims and careers
Aiming to maximize
organizational outcomes
through visualization of
human resources
information for all
employees
Continuing to increase
motivation as employees
make their own experience,
career aspirations, etc.
tangible and raise their
profile
Strengthening successor
development and pipeline based
on our succession plan
Organizational structuring through
proactive recruitment, fostering, and
assignment based on our business strategies
Timely and accurate information
(e.g., labor costs) required for
appropriate decision making
Allocating human resources that
respects employees’ career
aspirations (expanding provision
of opportunities for employees
to work toward realizing their
aims and careers)
67
PeopleOMRON Corporation Integrated Report 2021 Promotion of Diversity and Inclusion
Diversity and inclusion will drive the evolution of our human resources strategy and power the mutual growth of our Company
and employees. For OMRON, the promotion of diversity and inclusion is an important initiative that seeks to give embodiment
to our philosophy of “always believing in human potential.” We promote diversity in the form of “acceptance of the diverse
personal qualities and values of our diverse human resources” and inclusion as “bringing out and leveraging the abilities of our
diverse human resources.”
We are working to create and deliver value in order to solve social issues through our business. Our human resources are the
actors in this effort, and an abundance of diversity among them will set off new “chemical reactions,” creating equally diverse
value and increasing the variety and number of social issues that we can confront. As part of this, VG2.0 has included efforts to
increase the ratios of women in managerial roles and of employees with disabilities, as well as to expand opportunities to
empower our diverse human resources regardless of factors such as nationality, religion, marital status, gender, sexual
orientation and gender identity, and disability.
In addition, we are actively promoting the hiring of mid-career employees in our Japanese businesses and have welcomed a
total of 643 mid-career recruits during the four years of VG2.0. Furthermore, in order to promote wide-ranging business
creation geared toward the era of the new normal and construction of the foundation to support this, we will begin new
recruitment activities in fiscal 2021 aimed at offering secondary or side positions to professionals external to the company
possessing diverse skills and experiences.
Strengthening Our Human Capital for Practice of the OMRON Principles over the Next Decade
Looking forward to the next 10 years, we see significant changes ahead for the relationships between companies and
employees. As Millennials, Generation Z, and further generations bring new values with them as they become the core
of the workforce, mobility of human resources will gather speed and we can expect the relationship between companies
and their employees to shift from the existing subordinate model to one of equality. Amid this shift, companies will be
required to clearly set out the opportunities for growth and empowerment that they will provide to their employees and
the results they expect.
Within this context of significant change in the relationship between individual and organization, team management that
brings together diverse individuals with versatile expertise and creativity and allows them to fully exercise and continually
increase their abilities will be more necessary than ever for working toward innovation driven by social needs. We will
therefore formulate and implement measures to build a new company–employee relationship that is fair and open, and
to allow that relationship to be one of mutual choice, where the Company and our employees can continue to grow
together. Specifically, in order to combine exploitation of our existing businesses and business evolution through the
creation of innovation, we will take a more proactive approach going forward to new strategic requirements with regard
to acquisition and fostering of human resources and optimal position assignment that allows employees to better
exercise their abilities. Using the measures engaged with in VG2.0 as a basis, we will create environments worldwide in
which our diverse human resources will, through their respective jobs (opportunities), experience job satisfaction and
personal growth and can continue to perform to a high standard.
Diversity and Inclusion Promotion Showcase :
OMRON Joins International Initiative Working to Promote Empowerment of
People with Disabilities
In January 2021, OMRON endorsed the aims and became a member of The Valuable 500*, an international initiative working
to promote empowerment of people with disabilities. OMRON has long been a pioneer in promoting the employment of
people with disabilities, establishing OMRON Taiyo Co., Ltd., Japan’s first welfare factory employing people with disabilities,
in 1972, in collaboration with social welfare organization Japan Sun Industries. Since then, in order to create a society in
which people with disabilities enjoy fulfilling lives and the rewards of work, we have worked to create job opportunities for
people with disabilities and expand opportunities for their empowerment through our business. Today, the OMRON Group
employs people with disabilities not only in our special subsidiary companies, OMRON Taiyo Co., Ltd. and OMRON Kyoto
Taiyo Co., Ltd., but also in every department from Sales and Human Resources to General Affairs, Legal, and Development.
Going forward, the OMRON Group will continue to promote the employment and empowerment of people with disabilities,
allowing us both to fulfill the Group’s social responsibilities and to utilize diversity to drive the Company’s development.
*The Valuable 500 was launched at the World Economic Forum Annual Meeting in Davos in January 2019, and
encourages business leaders to create the changes in business, society, and the economy that will
empower people with disabilities and allow them to realize their potential.
68
PeopleOMRON Corporation Integrated Report 2021 The OMRON Global Awards (TOGA)
OMRON pursues the goal of improving society by solving social issues through our business based on the OMRON
Principles. TOGA initiatives are intended to share the stories of how the OMRON Principles are practiced throughout the
entire Group across the world to ensure that all employees are aware of, and understand, the Principles, which are the
source of OMRON’s strength, and to expand the circle of empathy and resonance.
Highlights
TOGA encourages employees to set their own goals for solving social issues with the aim of fostering a culture of ongoing
aspiration toward putting the OMRON Principles into practice. We share and publicly praise the OMRON Principles practiced
in everyday work and workplaces, expanding the circle of empathy and resonance in practicing the OMRON Principles.
TOGA program is ongoing throughout the year. The teams that pass preliminary selections from our organizations around
the world are invited to come to Kyoto to present their initiatives for practicing the OMRON Principles at the OMRON Global
Meet on May 10, the OMRON Group Founder’s Day. These teams bring back news of how other team initiatives were
received to their local workplaces, sharing their experiences with their co-workers and expanding the circle of empathy and
resonance throughout the world.
Process
TOGA is designed based on the SECI* Model of knowledge management in which
the tacit knowledge of an individual is drawn out to become shared knowledge
throughout an organization. OMRON engages in a cycle of setting inspirational goals,
taking action, and reviewing progress to share information and encourage buy-in
throughout the entire year.
Resonate
5
Plant
the Flag
1
Externalize
Declare
Commitment
2
Resonate
Walk
the Talk
*SECI Model: A knowledge management mechanism produced by Hitotsubashi University professor Ikujiro Nonaka that focuses on
knowledge creation activities. Through a conversion process of socialization, externalization, combination, and internalization,
organizations can take the tacit knowledge of an individual and create shared knowledge throughout a group or organization.
(Source: Globis University, Graduate School of Management MBA Glossary)
Review
and
Share
4
Put
Commitment
into Practice
3
Evolution
The number of entries per employee is rising year by year, our approximately 28,000 employees surpassing themselves in
fiscal 2020 with participant lists (counting multiple entries per person separately) totaling 51,033 for 6,461 entries. TOGA
has taken root as a process to share and recognize voluntary employee initiatives in practicing the OMRON Principles and is
run by employees in each region worldwide. Recent years have seen an increase in initiatives aimed at practicing the
OMRON Principles through cooperation across departments and with external partners in the aim of further innovation
driven by social needs. The circle of empathy and resonance with the passionate desire to fight to solve social issues is also
expanding beyond the Company. Approximately 200 people external to the company—including partner companies,
investors, media personnel, and students—participated in our 8th (2019) TOGA Global Meet, which brought attendees
together from all over the world in a live online format due to the COVID-19 pandemic.
TOGA Evolution
Event-based movement
Rules and communications driven
by the head office
Expanded opportunities for
externalization and resonance
More company-driven,
local workplace participation
Linking innovation driven by
social needs to the workplace
Expanding circle of resonance
inside and outside OMRON
2012
2015
2017
2021
Progress of TOGA Entry and Participant Numbers
Number of entries
Number of participants
51,093
62.469
52,780
51,033
32,751
3,651
38,100
4,173
46,885
5,003
20,828
23,524
2,481
2,519
6,216
6,957
6,405
6,461
2012
2013
2014
2015
2016
2017
2018
2019
2020
(FY)
69
PeopleOMRON Corporation Integrated Report 2021 Examples of Initiatives to
Practice the OMRON Principles
In the eighth year of TOGA (FY2019), 16 entries that put various
OMRON Principles into practice were selected from around the
world and presented online to all employees worldwide.
Example 1
Watch videos of the stories
shared at the Global Meet
showing the OMRON
Principles in practice.
Bionic Leg to Empower and Support Society (B.L.E.S.S.)
(8th [FY2019] TOGA Gold Award Winner)
PT OMRON Manufacturing of INDONESIA (OMI)
Fathian Hafiz Aulia
There are over 35 million people worldwide who have lost legs to unforeseen accidents,
illnesses, and other causes, with as many as 3 million in Indonesia alone. Many prosthetic legs
prioritize appearance and lack flexibility, and in many cases are painful and uncomfortable to
use. Meanwhile, prosthetic legs that can move flexibly are expensive and difficult to obtain. Aulia, who works as an
engineer at OMRON’s Indonesian production plant OMI, has taken a stand against this issue. Of the 2,541 employees
working at OMI, 35 have disabilities. Aulia wanted to help his colleagues who had lost lower limbs. With this in mind,
he assembled a team to develop the kind of accessible, flexible prosthetic leg that was then unavailable. However, the
team encountered obstacles in their lack of expertise on the human gait cycle and the impossibility of procuring all of
the necessary components in-house. They therefore appealed to OMI’s management team, and it was with this latter’s
ready consent that the idea became a company-recognized project. Now able to receive additional support from local
component manufacturers and foundations, their project was successfully developed. The prosthetic leg, combining
increased functionality with a lowered price, was named the Bionic Leg to Empower and Support Society (B.L.E.S.S.), a
title that encapsulates the hopes of its developers. The team received delighted feedback from a colleague who tested
B.L.E.S.S.: “It fits more comfortably than the prosthetic legs I’ve used before; I’m really happy with it.” The circle of
empathy and resonance toward the team has expanded both within and beyond the Company, including to Indonesian
universities and insurance companies, and development to further increase B.L.E.S.S.’s durability and comfort continue.
Example 2
TOGA feature numerous entries striving to solve social issues, even if they are not all selected for the Global Meet.
The following example is an entry that won a Silver Award at the Japan Meet.
Initiative to Achieve Smart Agriculture Through Automation of
Irrigation Processes
(8th [FY2019] TOGA Japan Meet Silver Award Winner)
OMRON Industrial Automation Business Company (IAB)
Satoru Tanaka
The population of agricultural workers in Japan has decreased by approximately 35% over the past ten
years. Aging among these workers is also becoming a social issue. The majority of Japanese agricultural crops are grown
outdoors, a cultivation method which relies on the surrounding natural environment, and on-farm tasks are now falling to the
elderly. Irrigation has a significant impact on crop quality and is becoming a particular burden, being highly weather-dependent and
requiring adjustments in water amounts to be made while checking the state of crops on-site. This issue was taken on by Tanaka
and other members of the team responsible for Sales in our Industrial Automation Business. They began development of a system
to automate irrigation in collaboration with Betsukawa Corporation, a manufacturer of electrical solutions in Ishikawa Prefecture
whose existing business relationship with OMRON included provision of electrical monitoring devices. Development was fraught
with difficulties, with Tanaka and his team lacking the expertise necessary to judge optimal moisture content, which differs from
crop to crop. However, the team members made frequent visits to farms and gained insight from watching producers checking
leaf temperature and moisture content by touch, discovering the correlation between these two factors. They went on to produce
an automated system that judges crop state in real time by quantifying moisture content while monitoring leaf temperature.
Alongside evaluation of the system in multiple farms across the country, they are currently collaborating with new partners,
including startups, and proceeding with testing geared toward the system’s practical application.
70
PeopleOMRON Corporation Integrated Report 2021 Respect for Human Rights
As declared in the OMRON Principles, Our Values include Respect for All. In our view, Respect for All is the value that
underlies all of our activities, including respect for human diversity, personality, and individuality, as well as the pursuit of
a decent life and work. We believe that acting with integrity in our dealings with people at all times will lead to increased
trust from society and the Company’s continued existence.
OMRON has formulated the Sustainable Conduct Policies which sets forth environmental and social issues to be
addressed by the OMRON Group and policies for dealing with the issues, with reference to international norms and
guidelines such as the International Bill of Human Rights. The Sustainable Conduct Policies declares that we will respect
the fundamental human rights of individuals and will not engage in discrimination or human rights violations for any
reason. To this end, we will also respect the United Nations Guiding Principles on Business and Human Rights and are
working to fulfill our corporate responsibility to respect human rights through establishing procedures (human rights due
diligence) for identifying, preventing, mitigating, and rectifying negative impacts on human rights.
OMRON set respect for human rights and labor practices as one of our sustainability initiatives in fiscal 2017. Since then,
we have been working to establish human rights due diligence processes and pursuing human rights risk analysis and
rectification in all of our production locations. In fiscal 2020, we completed our goal of investigating and analyzing human
rights and labor practices at all our production locations. In locations with issues, we have investigated measures to be
taken and are implementing corrective actions. These initiatives are not limited to OMRON employees but are also
being extended to employees of temporary employment agencies and contractors. We are also commencing their
worldwide roll-out. Our initiatives to date will be carried forward as key issues from fiscal 2021 onward, and we will
continue our efforts to strengthen them.
Due Diligence for Human Rights
Policy
Commitment
Risk Identification
and Conducting
Assessment
Examination of
Measures
and Formulation
of Plans
Examination and
Implementation
of Corrective
Actions
Monitoring,
Evaluation,
and Disclosure
Access to
Relief Measures
Respect for
international
human rights
norms and
guidelines
Scope of initiatives
OMRON
employees
Business
partners
(including
suppliers,
customers,
and local
communities)
Risk identification
OMRON’s
production centers
and key suppliers in
regions subject to
significant human
rights risks (approx.
50 companies)
identified as priority
targets
Targets for
assessment
Working in OMRON’s
production centers:
OMRON employees
Employees of
temporary
employment
agencies/contractors
Contractors
Key suppliers
No major human
rights issues* found
in the last three years.
Other areas for
improvement were
identified and plans
for correction
formulated
Areas for immediate
rectification
Restitution of passports
and other documents
that could hinder
freedom of movement
All employment
agency fees to be paid
by the employers
Planning other
medium-term
initiatives
Examination of
corrective actions
Monitoring and
evaluation
Board of Directors
Executive Council
Sustainability
Committee
Integrated Risk
Management
Central Human Rights
Committee
Disclosure
OMRON website
Integrated Report
Interviews
Answering various
types of surveys and
questionnaires
Medium-term
initiatives: in the
process of examining
and implementing
corrections centered
around our initiative
to “Establish a
System of Respect for
Human Rights for Our
On-Site Suppliers”
Expanding eligibility for
human rights training,
expanding eligibility for
use of anonymous
whistle-blower hotlines
(to include suppliers)
Improving employment
terms and welfare
facilities for foreign
migrant workers
Improving long working
hours in certain areas
OMRON Group
establishing a
consultation desk
Eligible users:
directors,employees,
temp personnel,
family members of
the above,
retired employees,
suppliers, employees
of on-site labor
contractors
Target areas:Japan,
the Americas,China,
South Korea, Asia
In addition to the
above, we are
setting up a
compliance hotline
for our suppliers
Target areas:Japan,
China
*Major human rights issues: forced labor, child labor, long working hours, harassment, other discrimination, etc.
OMRON Group Sustainable Conduct Policies and OMRON Group Rules for Ethical Conduct
https://www.omron.com/global/en/assets/img/sustainability/pdf_inquiry/omron_group_sustainable_conduct_policies_rules_for_ethical_conduct_fy21.pdf
71
PeopleOMRON Corporation Integrated Report 2021 Environment
Corresponding SDGs
OMRON believes that creating an environmentally sustainable society corresponds to the OMRON Principle
of "contributing to a better society," and is proactively working to address global issues such as climate
change and resource recycling. Under the VG2.0, OMRON has been strengthening environmental initiatives
in accordance with its corporate environmental vision and policy. In our next long-term vision for 2030, which
is currently under consideration, we will further enhance our environmental initiatives by positioning our
response to the challenges of climate change and resource recycling as one of the most important issues for
OMRON to address.
Environmental Vision: Green OMRON 2020
In the Environmental Vision Green OMRON 2020, we have set six environmental targets to be achieved by fiscal 2021
(recognizing fiscal 2021 as a period for business reform due to the impact of the COVID-19 pandemic, we changed the
target year of Green OMRON to fiscal 2021). We are on track and expect to achieve all of the targets set in our
environmental vision: reduction of greenhouse gas (GHG) emissions, proper management and reduction of hazardous
substances, reduction of waste, prevention of air and water pollution, effective use of water resources, and promotion
of environmental management. In particular, we have designated reducing GHG emissions and properly managing and
reducing hazardous substances as company-wide sustainability issues (materialities), and have been making focused
efforts on these issues in line with goals set in fiscal 2017.
To reduce GHG emissions, OMRON set the OMRON Carbon Zero target in July 2018, which aims to reduce GHG emissions
to zero by 2050. Since then, we have been working to reduce GHG emissions by intensively conserving energy and
promoting the use of renewable energy. In the next long-term vision, we will further strengthen and accelerate our efforts.
Environmental Vision: Green OMRON 2020
OMRON Group Environmental Policy
In line with the OMRON Principles, we will contribute to realizing sustainable societies globally by
providing eco-friendly products and services that can contribute to the global environment and by
making the most effective use of management resources.
1. Provide eco-friendly products and services
that can contribute to the global environment
2. Prevent global warming
3. Use resources efficiently
4. Co-existence with nature
5. Implement environmental management
OMRON Group’s Environmental Objectives
1. Reduction of greenhouse gas emissions
2. Appropriate management and reduction
of hazardous substances
3. Reduction of waste
4. Prevention of air, water, and soil contamination
5. Effective usage of water resources
6. Facilitating environmental management
Disclosure of Climate Change-Related Information based on TCFD*
OMRON recognizes that climate change will impact our future sustainable growth. We are engaged in the following
framework, using the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), for which
we declared our support in February 2019.
*Task force on climate-related financial disclosures established by the Financial Stability Board (FSB).
Governance
OMRON has designated responding to climate change as one of the key sustainability issues under VG2.0. We are
carrying out specific initiatives in accordance with annual targets and plans approved by the Sustainability Committee
and the Executive Council. These initiatives are monitored and supervised by the Board of Directors, based on reports
on their content and progress. Part of the medium-to-long-term, performance-linked compensation for internal directors
and executive officers incorporates evaluations based on sustainability indicators (including response to climate change)
evaluated by third parties. In fiscal 2021, we added progress toward our GHG emissions reduction target to these indicators.
72
EnvironmentOMRON Corporation Integrated Report 2021 Strategy
Under the VG2.0 medium-term management plan and the next long-term vision up to 2030, OMRON has identified
energy solutions that contribute to the realization of carbon neutrality as one of our business opportunities for the creation
of social value. Against this backdrop, in fiscal 2020, we conducted scenario analysis for our energy solutions business,
which operates within the business domain of Social Solutions and provides products and services that directly contribute
to the realization of carbon neutrality. Based on a scenario in which decarbonization and the creation of a circular economy
will accelerate, we identified key risks and opportunities and possible countermeasures. With climate change and
resource recycling as a starting point, we are now making efforts to create new solutions to recover and reuse products.
One example of these efforts is the Power Continue, a fixed-rate rental service for PV inverters, launched in fiscal 2021 in
collaboration with Tokyo Century Corporation. In fiscal 2021, we will also carry out scenario analysis based on multiple
climate change scenarios for our Industrial Automation Business, Electronic and Mechanical Components Business, and
Healthcare Business. In response to the key issues in our next long-term vision, we will examine ways to maximize
business value while taking climate change into account, and utilize the results of this examination to consider business
strategies for the next medium-term plan. Going forward, OMRON will continue to take a firm stand against highly
uncertain climate change risks through scenario analysis, and continue to practice resilient management.
*Please see OMRON Integrated Report 2020 for the results of the scenario analysis of our Energy Solutions Business.
Risk Management
Under its integrated management structure, OMRON manages risks that have a significant impact on management and
finances as key management risks. Climate change risks are also identified as key risks for the Group, and risk
management and countermeasures are implemented. We collect and analyze a wide range of information on risk factors
such as regulations relating to climate change and their impact on business, by conducting audits of environmental legal
compliance assessment globally, assessing vulnerability of each site to natural disasters (flooding, torrential rain, water
shortages, etc.) which are expected to increase in scale and frequency as a result of climate change, and making
preparations for business continuity.
Indicators and Targets
OMRON has designated GHG emissions as an indicator for climate change, and has set the OMRON Carbon Zero
target, which aims to reduce GHG emissions to zero by fiscal 2050. Using the Scope 1 and 2 GHG emissions quantities
of fiscal 2016 as a baseline, we backcast from fiscal 2050 to set reduction targets for fiscal 2030 and fiscal 2020*1 and
are promoting various reduction efforts to achieve these goals. Specifically, in fiscal 2018, we began procuring electricity
from renewable energy sources in Japan. In fiscal 2019, we started Analysis of Energy Conservation Potential*2 for our
operating sites in Asia-Pacific, which is the second largest energy-consuming region after Japan and China. At our
Indonesia Plant, we identified scope for energy conservation equivalent to 23% of its annual energy consumption and
are implementing measures under the medium-term energy conservation plan.
In fiscal 2020, in addition to promoting energy conservation measures at each site and installing new solar power
systems, we conducted analysis of energy conservation potential remotely at our Malaysia Plant, where energy
consumption was high. As a result of these efforts, we reduced GHG emissions to 124 thousand ton-CO2 on a
company-wide basis in fiscal 2020, a 50% reduction compared to fiscal 2016. OMRON will continue its efforts to reduce
greenhouse gas emissions, aiming to reduce the emissions to zero by 2050.
Currently, we are considering setting new targets, including for Scope 3, for the next long-term vision.
*1 Greenhouse gas emissions calculated from sales forecasts, including the Automotive Electronic Components Business (AEC) that was sold off in October 2019. In considering targets to
align with the SBT criteria in fiscal 2017, we set 2016, the year of the latest values, as the reference year. (SBT: Science Based Targets. Science-based, medium- to long-term targets for
reducing greenhouse gases.)
*2 OMRON's unique approach to identifying energy loss risks and opportunities for improving energy efficiency at production locations, formulating specific measures with estimates of
impacts and costs.
GHG Emissions in Fiscal 2020
GHG emissions
(thousand ton-CO2)
250
35
Divesture of
AEC Business
FY2016
(Baseline)
73
20
Withdrawal
from Backlights
Business
22
Use of
renewable
energy
27
Energy
conservation
efforts
22
Other
−50%
from FY2016
124
FY2020
(Results)
EnvironmentOMRON Corporation Integrated Report 2021 Specific Initiatives to Achieve OMRON Carbon Zero
Most of the GHG emitted from OMRON’s business operations comprise CO2 derived from electricity usage. Our
activities to achieve "OMRON Carbon Zero" are therefore centered around two pillars: implementing wide-scale energy
conservation and promoting the switch to renewable electricity.
Promoting Renewable Energy Tailored to Each Site
To increase the use of renewable energy, OMRON has installed solar power systems at its operating sites and promoted
the procurement of carbon-free electricity. In preparation for the installation of solar power systems at the Company’s
sites, we toured the premises of each site to conduct feasibility studies, including into sufficient roof sturdiness and space
to install solar panels. By fiscal 2020, we had installed solar power systems at six sites in Japan: Yasu and Kusatsu (Shiga
Prefecture), Katsuragawa (Kyoto Prefecture), Matsusaka (Mie Prefecture), Okayama Prefecture, and Oita Prefecture.
As for the procurement of CO2-free electricity, we began purchase of electricity derived from renewable sources in
2018 for sites in the Kansai region and in 2019 for those in the Kanto region, covering a total of 10 sites in the Kansai
and Kanto areas. These efforts have been implemented overseas as well, and we began procuring electricity derived
from wind power at our site in the Netherlands in 2017. In China, our local sites are taking measures to generate "return
on investment" optimized for their individual situations, such as procuring electricity derived from solar power systems
installed by local power companies on our own premises.
Employee Comments
Responding to Climate Change and Contributing to the Realization of a
Sustainable Society
Our current business activities presuppose a sound global environment. As a company, we
must implement measures to protect the environment in a comprehensive and systematic
manner, with consideration for our business circumstances. In particular, we recognize that
addressing climate change is critical. As part of our response, we have set a target of
reducing GHG emissions. We are well ahead of our target at this point, yet we will continue
to further our efforts and hope to contribute to the realization of a sustainable society.
Global Human Resources
and Administration HQ
Kiyoaki Harada
Thorough Implementation of Energy Conservation Starts with Thorough Analysis
In the summer of 2018, OMRON conducted Analysis of Energy Conservation Potential in cooperation with OMRON FIELD
ENGINEERING Co., Ltd. (OFE), a Group company engaged in energy operations and facility improvement. The Analysis was
carried out at 13 sites—mainly Japanese production locations with high levels of energy consumption—as a preliminary step
toward thorough energy conservation. Through this analysis, we identified energy loss risks and opportunities for energy
efficiency, formulated specific measures, and estimated the effects and costs of these measures, thereby exploring the potential
for energy conservation at each site.
As a result, it became clear that the investigated sites had already taken standard energy-saving measures, and that site-specific
measures needed to be taken to further reduce energy consumption. In response to this situation, OFE utilized the energy
rationalization expertise it has cultivated over the past 10 years to analyze the sites’ differing energy use patterns from various
angles and create maximally effective solutions. For example, at production locations that generate large amounts of heat during
the manufacturing process, such as semiconductor manufacturing, we implemented 52 different energy-saving measures
tailored to the business environment, including the reuse and efficient utilization of heat that had previously been discarded.
Employee Comments
Precise Understanding of On-site Interviews is Key
When conducting energy diagnostics of a production site, precisely understanding the
operation of the facility through on-site interviews is vital. It was very difficult to move forward
while eliminating the various risks produced by the new measures, such as operational
reviews and the resulting impacts on production quality.
Energy Management HQ
OMRON Field Engineering
Co., Ltd.
Masaru Kajiwara
74
EnvironmentOMRON Corporation Integrated Report 2021 Round Table Discussion on Corporate Governance
Enhancing Sustainable Corporate Value
through Strengthening the Effectiveness of the
Board of Directors
Fumio Tateishi
Chairman (Chairman of the
Board of Directors)
Member of the CEO Selection
Advisory Committee
Eizo Kobayashi
Outside Director
Chairman of the CEO Selection
Advisory Committee
Chairman of the Corporate
Governance Committee
Member of the Personnel
Advisory Committee
Member of the Compensation
Advisory Committee
OMRON’s Ever-Evolving, Unique
Initiatives toward Improving the
Effectiveness of the Board of Directors
– How would you view OMRON’s initiatives
to improve the effectiveness of the Board of
Directors?
Tateishi: OMRON has taken a unique approach to
enhancing oversight functions of the Board over 25
years. To further strengthen the functions, in 2015,
we launched the initiative of “evaluating the
effectiveness of the Board of Directors” conducted
by the Corporate Governance Committee
comprising only Outside Directors and Outside
Audit & Supervisory Board Members. The
perspectives of Outside Executives who are also
members of the Board of Directors ensure that
evaluations are not only objective but also effective.
I believe this system works more effectively for
OMRON than evaluations by third parties.
Kobayashi: It is very important to evaluate how
much a board of directors is fulfilling its expected
responsibilities. That’s why many listed companies
have evaluated their effectiveness as is also
required by Japan's Corporate Governance Code. In
many companies, a board of directors or a third
party takes the lead in such evaluations. On the
other hand, OMRON’s initiative, which allows a
committee comprising only Outside Directors and
Outside Audit & Supervisory Members to perform
evaluations, is very unique from the perspectives
of both objectivity and effectiveness, as Mr. Tateishi
pointed out.
75
Tateishi: The Board discusses and determines the
operational policy and focus themes for the
upcoming year based on the evaluation results by
the Committee. We have continued to improve the
effectiveness of the Board of Directors through
these two mechanisms: evaluations by the
Corporate Governance Committee, and the
determination of the operational policy and focus
themes by the Board of Directors.
How to Improve the Effectiveness of
the Board of Directors
– What specific measures has OMRON taken
to increase the effectiveness?
Kobayashi: It is noteworthy that evaluations by the
Committee have improved year by year. Specifically,
OMRON’s Integrated Report increased the number
of pages describing its initiatives to improve the
effectiveness from one and a half in 2016 to five in
2020. In addition, the Board identified the current
issues after analyzing discussions on the focus
themes, and shared them with stakeholders in the
Integrated Report 2021. The Committee has rated
the Board as highly effective for its efforts to solve
the issues recognized through such discussions.
The Committee sometimes judges the Board from
a strict perspective and requires it to take remedial
measures, but the Board humbly listens to the
Committee and seriously addresses the issues. As
the Committee chairman, I have a real feeling that
the Board is a place for in-depth discussions.
Tateishi: The Board determines the operational
policy and focus themes based on the results of
evaluations by the Committee. As a result of our
efforts to enhance the Board’s effectiveness every
year, its functions as a monitoring board have
improved, while the ratio of discussions on medium-
and long-term issues increased to 70%. I expect
that by sharing medium- and long-term issues raised
by the Board as an oversight function with Executive
Officers led by President and CEO, the quality of
management and the speed of decision-making
process will increase more than ever.
Kobayashi: The Committee assesses the Board
based on questionnaire-style self-evaluations by
Directors and Audit & Supervisory Board Members.
The self-evaluations, formerly a once-a-year
requirement, have been performed immediately
following each Board meeting since fiscal 2019. In
addition, since fiscal 2021, Outside Executives have
conducted reviews of Board meetings right after
their closing. This immediate review allows us to
share our afterthoughts and opinions unuttered
during the meeting and encourages us to lead
deeper and better discussions at future meetings.
As a result, we can have more in-depth discussions
in the evaluations at the end of the fiscal year, which
I believe leads to improved evaluation content.
OMRON’s Outside Directors and Audit &
Supervisory Board Members are very unique for
their wide variety of experience, careers, and
insights. We can say that the effectiveness of the
Board of Directors has been improved by these
members who can speak out without restraint or
conjecture.
Tateishi: When it comes to the diversity required
for a board of directors, OMRON has an extremely
diverse group of directors with a wide variety of
experience and expertise. All of them are socially-
conscious and ready to discuss strategies for the
future. The effectiveness of the Board has steadily
improved through free and open-minded
discussions, various initiatives for effectiveness
evaluations, and the evaluations-based decision-
making process for operational policies and focus
themes for the following year.
Focus Themes for Improving
Corporate Value
– Could you tell us about how the Board of
Directors determined its focus themes for fiscal
2021?
Tateishi: In the first theme of “completion of the
next long-term vision and determination of the next
medium-term management plan,” we attach more
importance to completing the long-term vision.
OMRON formulated its first long-term vision in
1991, and this will be the fourth one. While a long-
term vision is becoming increasingly important in
this era of uncertainty, there aren’t many
companies that have been working on a long-term
vision over 30 years.
OMRON is characterized by its ever-evolving
approach to formulating a long-term vision. In
76
GovernanceOMRON Corporation Integrated Report 2021 Kobayashi: The biggest challenge in realizing the
long-term vision is probably human resources. We
need to create a roadmap by actively adopting
various external insights, including those from the
outside directors and open innovation.
OMRON is developing human resources who can
play a leading role in fulfilling the vision. However,
unlike other management resources, we can’t utilize
human resources as they are. As competition for
talents is intensifying in the face of a declining
population, we need to formulate a long-term plan
and make an investment in order to attract and
develop talent from all over the world.
Tateishi: I completely agree. The kind of human
resources required for realizing the ideal society in
2030 or even further in the future is surely different
from those needed today. I think it is the
responsibility of the Board to not only actively
discuss this challenge but also monitor whether the
human resources strategy is being executed
appropriately.
Kobayashi: When I look at OMRON as an Outside
Director, I actually feel that a culture of challenging
something new has been steadily instilled throughout
the organization. I think employees’ enthusiasm for
TOGA is a successful example. Their passionate and
statements such as “Yes, we can” and “nothing
impossible” always remind me the need for the
Board to engage in discussions that respond to this.
addition to the conventional forecasting method
envisioning the future starting from the present,
OMRON also adopted a backcasting approach that
allows us to start with defining what a society should
be, and then create a roadmap to the ideal future. By
using these approaches, designed to identify
necessary factors to fill the gaps between ideals and
reality, we can discuss how to reach the goal.
In preparation for formulating the next long-term
vision, the Board presented executives with five
points of view for their supervising operations,
including responses to the new normal era post
COVID. This is exactly what the “new OMRON”
should be in the post-COVID era. I believe it is also
important for the Board to show this course of
direction to executives.
Board of Directors Operational Policy and Focus Themes for Fiscal 2021
Board of Directors Operational Policy for Fiscal 2021
To enable the OMRON Group to achieve a drastic increase in corporate value over the next 10 years, the Board
of Directors will exercise its oversight functions in a multifaceted manner and from the short-term and medium-
to long-term perspectives.
Focus Themes
Completion of the next long-term vision and determination of the next medium-term management plan
Points to be supervised
Response to the new normal era post COVID
Initiatives for key sustainability issues
Transformation of business model and acceleration of innovation
Reform of human resources management
Strengthening resilience
Response to increasing geopolitical risks
Checking the progress of establishing a companywide IT system
77
GovernanceOMRON Corporation Integrated Report 2021
Tateishi: As the second focus theme, we
designated “response to increasing geopolitical
risks,” as was done in fiscal 2020. Currently, there
are many conflicts all over the world, triggered by
environmental problems, climate change, human
rights, and other issues. We need to not only
manage geopolitical risks to avoid possible impacts
on our business performance but also to see the
risks as opportunities to solve increasingly serious
social issues. We require executives to contribute
to creating a better society by emphasizing respect
for all, one of our important values declared in the
OMRON Principles.
Kobayashi: As you mentioned, we need two
perspectives: how to enhance our resilience to any
changes to persistently carry on our business even
in a state of crisis, and how to negotiate new
challenges of the post-COVID era to move on to the
next stage of growth.
We also need to steadily make progress in the third
focus theme, “checking the progress of
establishing a companywide IT system.” I believe
that it is essential to raise the overall level of our IT
system by one level or two with the aim of
speeding up the decision-making process and
implementing resilient, lean, and effective
management on a global scale.
A Virtuous Cycle Brought by Practice of
OMRON Principles and Promotion of
Sustainability
– The revised Corporate Governance Code
requires companies to proactively address
sustainability issues and appropriately disclose
their initiatives. Could you tell us about
OMRON’s sustainability initiatives?
Tateishi: Since its foundation, OMRON has
operated under the principle of contributing to
future social development through its business.
Prior to the revision of Japan’s Corporate
Governance Code, we already had set 11
sustainability goals based on the OMRON
Sustainability Policy formulated in 2017, and
promoted our own initiatives. As of 2017, we
incorporated the sustainability goals into our
medium-term management plan because we were
in the middle of our long-term vision. This time, we
set the sustainability goals in the new long-term
vision from the beginning.
Kobayashi: While most companies advocate
sustainability nowadays, there are differences in
their initiatives. Under these circumstances,
OMRON has been committed to integrating
sustainability into its management in order to
realize the sustainable enhancement of corporate
value. I’m confident that these efforts will have a
positive impact on society. Because OMRON
cannot solve all social issues by itself, it is also
important for OMRON to actively convey its
messages to society as an opinion leader.
Tateishi: OMRON emphasizes the importance of
innovation driven by social needs, so it is no
exaggeration to say that the implementation of
corporate principles and promotion of sustainability
are synonymous. While heightening non-financial
value by promoting sustainability, we will also
increase our financial value by solving social issues
thorough our business. I believe that we can create
a virtuous cycle for the further enhancement of
corporate value by pursuing these two goals.
The Board of Directors will strive to continue to
improve its effectiveness in order to fulfill the
mission toward the sustainable enhancement of
corporate value.
78
GovernanceOMRON Corporation Integrated Report 2021 Advanced Compensation
Governance for Improving
Corporate Value
Takehiro Kamigama
Outside Director
Chairman of the Compensation Advisory Committee
Vice Chairman of the Corporate Governance Committee
Member of the Personnel Advisory Committee
Member of the CEO Selection Advisory Committee
Characteristics of OMRON’s
Management
– Mr. Kamigama, you were appointed as an
Outside Director of OMRON in 2017. Could you
tell us about the characteristics of OMRON’s
management?
I can say that the strength of OMRON’s
management is, in a nutshell, the balance of
capital efficiency-oriented ability to constantly
earn profits, as represented by ROIC
management, and faithful management focusing
on the OMRON Principles.
Firstly, OMRON’s earning capacity is characterized
by its business operations emphasizing gross
profit margin. OMRON’s gross profit margin rose
from 36.8% in fiscal 2011 to 45.5% in fiscal
2020. It is noteworthy that all departments,
including the ones of development, purchasing,
production, logistics, and sales, have been
working together as a company to improve gross
profit margin, an indicator showing the essence
of corporate earning capacity. In order to
continuously increase the gross profit margin,
which usually reaches a limit at a certain level,
companies must carefully control their selling
prices and costs, and improve their product
portfolios. I believe that OMRON will be able to
further enhance its profitability by focusing on
service-based or recurring businesses rather
than goods-based ones to shift its business
model to one capable of adapting to ever-
changing social needs.
Secondly, to survive this rapidly-changing and
complicated era, we need principles or a
compass as support for management decisions.
My position as an Outside Director of OMRON
reminds me of the importance of such principles.
In particular, I’ve been giving my attention to the
structure for implementing the OMRON
Principles, and the ability to disseminate its
messages both inside and outside OMRON.
Every year, OMRON holds TOGA to share stories
of employees practicing the OMRON Principles
in daily operations. TOGA encourages employees
from all over the world to team up, set their own
79
GovernanceOMRON Corporation Integrated Report 2021 goals, and share their thoughts, activities, and
results throughout the entire Group, which
results in expanding the circle of empathy and
resonance. Since assuming office as an Outside
Director, I have attended TOGA events in Japan
and overseas to witness new social issue-based
services and businesses. I am impressed that
TOGA, the source of OMRON’s ability to create
new businesses and of employees’ high
motivation in their work, is a best practice for
sustainable management that is required in the
SDGs era. In addition, OMRON formulates its
10-year vision to solve social issues based on the
SINIC Theory, a managerial compass, with the
aim of contributing to a better society. OMRON
enhances its value by reviewing results and
issues to formulate a new 3- or 4-year medium
term management plan that is released three
times during a 10-year long-term vision period.
This is indeed a great initiative to autonomously
implement management and business operations
required by Japan’s Corporate Governance Code,
including ESG management, in order to meet the
expectations of all stakeholders.
– Could you tell us about OMRON’s
compensation governance?
OMRON emphasizes compensation governance
for two reasons. The first reason is to motivate
directors to achieve the 10-year long-term vision
targets in order to realize the sustainable
enhancement of corporate value. Specifically, the
results of the short- and medium-term
management plans formulated based on the
long-term vision are linked to compensation for
directors, which leads to further sustainable
improvement of corporate value. The second
reason is to not only to ensure the transparency
and objectivity of the compensation structure for
directors through disclosure of the structure but
also to promote better understanding of OMRON’s
management among stakeholders. In this sense,
we consider the disclosure in this Integrated
Report as part of our compensation governance.
Overview of Compensation Structure
for Directors
– Please tell us an overview of the
compensation structure for directors.
The current structure was established in fiscal 2017.
This structure aims to reflect the perspectives of all
stakeholders, including shareholders, in OMRON’s
management. By clarifying a linkage between the
directors’ remuneration and improved corporate
values (business value, shareholder value, and
social value), we motivate directors to achieve the
targets of the medium-term management plan. We
also maximize their motivation to contribute to the
sustainable improvement of corporate value by
encouraging them to hold the company’s stock.
Specifically, compensation for directors consists of
a base salary, or fixed compensation; short-term
performance-linked compensation (bonuses) that
varies depending on the company’s performance;
and medium-to-long-term, performance-linked
compensation (stock compensation). When
determining base salaries, to ensure objectivity, we
refer to those of over 100 major Japanese
companies that have been surveyed by an outside
organization. We also determine the ratio of
performance-linked compensation to base salary
according to each director’s position and role. For
example, the ratio for President and CEO is 1 : 1 :
1.5 (base salary : bonuses : stock compensation).
We adopted this relatively high composition ratio of
performance-linked compensation after referring to
the levels in Europe and the U.S.
In fiscal 2021, we revised the evaluation items and
criteria for medium-to-long-term, performance-
linked compensation (stock compensation) that is
linked to the degree of achievement of
performance targets in the medium-term
management plan. Stock compensation comprises
performance-linked component (60%), linked to the
degree of achievement of the medium-term
management plan, and the nonperformance-linked
component (40%), which aims for director retention
and motivation to improve share prices over the
medium-to-long-term, and is paid under the
condition of a certain term of service.
Objectives and Key Points of Revision of
Compensation Structure for Directors
– What are the aim and approach for revising
the compensation structure for directors?
The aim is to further motivate directors to achieve
the targets of the next long-term vision and
medium-term management plan. In addition, we
need to improve the compensation structure
whenever the management policy is required to be
revised in accordance with changes in the business
environment and stakeholder expectations. I feel
80
GovernanceOMRON Corporation Integrated Report 2021 proud that the former structure, revised in fiscal
2017, was also an advanced one for its initiatives
such as the introduction of sustainability evaluation.
Our 4-year experience after the previous revision
helped us to further improve the structure.
– What are the key points of the revised
compensation structure?
This time, we revised mainly medium-to-long-
term, performance-linked compensation (stock
compensation). It will now be evaluated using
three items, which are financial targets
evaluation, corporate value evaluation, and
sustainability evaluation. We calculate the
amount of stock compensation by using these
items that have their own set evaluation weights.
Firstly, we set the highest evaluation weight of
60% for financial targets evaluation. Secondly,
we newly adopted corporate value evaluation
with its weight of 20%, for the purpose of
maximizing our corporate value in the next long-
term vision. Thirdly, we allocated 20% to the
weight of sustainability evaluation, with the aim
of not only promoting the implementation of the
OMRON Principles, our most important values,
but also further reflecting the expectations for
the SDGs and the importance of sustainability.
The weight of sustainability evaluation is
relatively high compared to other companies,
making it one of OMRON’s features.
– Could you give us more details of those
three evaluation items? Firstly, please tell us
about the financial targets evaluation.
We removed net sales from the KPIs of the
financial targets evaluation, which until now had
been net sales, EPS, and ROE. Before reaching
this decision, we had many heated discussions in
the Compensation Advisory Committee. While
some members pointed out that net sales are
important for the manufacturing industry and that
removing net sales could reduce employee
awareness of business growth, there were
various other views such as the need to focus on
profits rather than net sales, and the
inappropriateness of pursuing continuous sales
growth in a rapidly changing business
environment. In the process of discussions, we
invited the President and CEO to the Committee
meetings and asked him to explain the policy of
the executives that aim to transform our
business model from a product-based one by
increasing the ratio of service and recurring
businesses in the next long-term vision. Unlike
the previous long-term vision and the VG2.0
medium-term management plan that were sales
growth-oriented, the next long-term vision will
give priority to maximizing corporate value as our
management target. For this reason, the
Committee members finally reached a unanimous
decision to remove net sales from the KPIs.
– Next, please tell us about corporate value
evaluation.
Medium-to-long-term, performance-linked
compensation (stock compensation) aims to
heighten director motivation to contribute to the
sustained improvement in corporate value from
the same perspective as stakeholders, including
shareholders. Actually, OMRON’s stock price
rose from 4,885 yen (closing price on March 31,
2017) to 8,640 yen (closing price on March 31,
2021) during the 4-year period of the previous
VG2.0 plan. This increase of 77% was far above
the 29% rise in the Tokyo Stock Price Index, well
known as TOPIX, during the same period. On the
other hand, we didn’t have any KPIs to evaluate
the improvement of corporate value. For this
reason, we introduced a new KPI named relative
TSR, an indicator that compares OMRON’s total
shareholder return (TSR) in the covered period to
the percentage change of the TOPIX Total Return
Index. The use of relative TSR, which can evaluate
increases or decreases in TSR by using the TOPIX
Total Return Index as a benchmark, allows us to
appropriately reflect the improvement of
corporate value in compensation.
– What about sustainability evaluation?
OMRON’s management is based on practicing
the OMRON Principles that aim to create a better
society by solving social issues through our
business. For this reason, we adopted
sustainability evaluation when introducing
medium-to-long-term, performance-linked
compensation in fiscal 2017. At that time, as there
were only a few companies using sustainability
evaluation for director compensation, we adopted
only a third-party evaluation to ensure objectivity
in our first attempt. On the other hand, for this
revision, we introduced the new KPIs of
“reduction of greenhouse gas emissions” and
“score of Sustainable Engagement Index (SEI)*1
in engagement survey*2,” as our internal targets,
in addition to the existing third-party evaluation.
In ESG management, Environment and Social
particularly contribute to OMRON’s growth as
well as attract the greatest interest from our
stakeholders. That’s why we adopted E- and
S-related indicators. In addition, the revision of
81
GovernanceOMRON Corporation Integrated Report 2021 sustainability evaluation is based on insights
obtained through dialogues and engagement with
institutional investors. We will strive to enhance
the effectiveness of our compensation structure
for directors through dialogues and engagement
with our stakeholders.
*1 Survey measuring employees’ voluntary motivation to contribute to targets of the
organization
*2 Indicator that measures the presence of a high level of motivation to contribute to the
achievement of targets, maintained through good mental and physical health, or a
strong sense of belonging to the organization, or a productive work environment
– Please tell us about the Compensation
Advisory Committee that discussed and
deliberated the revision of the compensation
structure for directors.
The Committee is made up of three Outside
Directors, including myself as the Chairman, and
two Internal Directors, all of whom have diverse
business experience and conduct discussions
from various perspectives. For example, the
Committee had held a meeting to discuss and
deliberate the revision every month since
October 2020 until we completed its design in
February 2021. In each of these five meetings,
we took about an hour to deliberate it thoroughly.
– Lastly, could you tell us about your
thoughts for the future?
I believe that the revised compensation structure
covers all themes stakeholders currently expect
of corporate management. In particular, I’m
convinced that medium-to-long-term,
performance-linked compensation (stock
compensation) will be highly regarded as a good
practice. On the other hand, I think OMRON has
other management issues to address, such as
how to accelerate innovation to design the next
growth engine, and how to promote diversity by
increasing the ratio of female executives and
managers in Japan as well as of non-Japanese
managers overseas. As an Outside Director, I will
strive to actively contribute to sustainably
increasing OMRON’s value through monitoring
and supervising in the Board of Directors in
addition to activities in the Compensation
Advisory and other committees.
Medium-to-long-term, performance-linked compensation (stock compensation) after revision
Performance-linked
portion
＝
Base amount for
each position
×（
Financial targets
evaluation
60%
+
Corporate value
evaluation
20%
+
Sustainability evaluation
20%
）
Evaluation
weight
60%
EPS
ROE
20%
Relative TSR*1
Financial targets
evaluation
Corporate value
evaluation
Indicators
Sustainability
evaluation
20%
Reduction of greenhouse gas emissions (internal target)
Score of Sustainable Engagement Index (SEI)*3 in engagement survey*2
(internal target)
Dow Jones Sustainability Indices (third-party evaluation)
*1 Indicator that compares total shareholder return (TSR) of OMRON in the covered period to the percentage change of TOPIX
Total Return Index (Relative TSR = TSR ÷ Percentage change of TOPIX Total Return Index)
*2 Survey measuring employees’ voluntary motivation to contribute to targets of the organization
*3 Indicator that measures the presence of a high level of motivation to contribute to the achievement of targets, maintained
through good mental and physical health, or a strong sense of belonging to the organization, or a productive work environment
Medium-to-long-term, performance-linked compensation (stock compensation) before revision
Performance-linked
portion
=
Base amount for each
position
×
Performance score
(Net sales 30%, EPS 70%)
×
ROE score
×
Sustainability
evaluation
82
GovernanceOMRON Corporation Integrated Report 2021 Corporate Governance
Basic Stance for Corporate Governance
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 framework 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 https://www.omron.com/global/en/about/corporate/governance/policy/
Corporate Governance Initiatives
1999
2003
2011
President
1987: Yoshio Tateishi
2003: Hisao Sakuta
2011: Yoshihito Yamada
Chairman 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
president as an
executive officer
Advisory Board
1999: Advisory Board
Outside Director
Audit & Supervisory
Board Members
(Independent)
Advisory and Other
Committees
2001: One
outside
director
2003: Two outside directors
(seven directors)
2015: Three
outsidedirectors
(eight directors)
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
2006: CEO Selection Advisory Committee
2008: Corporate Governance Committee
2006: Revised
2015: Revised
2015: Established
* Not including chairman of the Board
Corporate
Philosophy
1959:
Corporate
Motto
1990:
OMRON
Principles
1998: Revised
OMRON Corporate
Governance Policies
83
GovernanceOMRON Corporation Integrated Report 2021 Corporate Governance Framework
OMRON has elected to be a company with an Audit & Supervisory Board.
The OMRON Board of Directors is made up of eight members to ensure substantive discussion and deliberations.
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 chair of the Board and President
(CEO) have been separated. The Chairman serves as chair of the Board of Directors with no direct corporate
representational authority.
OMRON has established several advisory committees to enhance the oversight functions of 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 CEO is not a member of any of
these committees. The chair and members of the Corporate Governance Committee are outside directors and outside
members of the Audit & Supervisory Board. This structure offers another layer of transparency and objectivity to the
decision-making process.
In these policies, OMRON has created a hybrid governance framework that combining the best features of a company
with an Audit & Supervisory Board and a company with a Nomination Committee.
Outside directors and outside members of the Audit & Supervisory Board attended the 13 meetings of the Board of
Directors held during fiscal 2020 at a rate of 100% and 96.2%, respectively. Outside members had an attendance rate
of 96.2% at the 13 meetings of the Audit & Supervisory Board.
Fiscal 2021 OMRON’s Corporate Governance Structure
Shareholders’ Meeting
Audit & Supervisory Board
Board of Directors
Chair: Chairman of the Board
Audit & Supervisory Board Office
Board of Directors Office
Personnel Advisory Committee
Accounting Auditor
Sustainability Office
CEO Selection Advisory Committee
Compensation Advisory Committee
Corporate Governance Committee
Executive Organization
President
Executive Council
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
Selects board directors, auditors,
and executive officers, determines
compensation for directors and
executive officers, makes
decisions on important business
issues, and performs other
supervisory functions.
Audit & Supervisory Board
Oversees corporate governance
framework and execution
business operations; conducts
audits of day-to-day business
activities, including those
performed by directors.
Personnel Advisory Committee
Sets standards and policies
related to selecting and hiring
directors, Audit & Supervisory
Board members, and executive
officers; deliberates on proposed
candidates.
CEO Selection Advisory
Committee
Deliberates candidates for
selection as new CEO; deliberates
succession plans and candidates
in the event of an emergency.
Compensation Advisory
Committee
Sets policies for director and
executive officer compensation;
deliberates compensation levels
and specific compensation
packages.
Corporate Governance
Committee
Oversees ongoing corporate
governance improvement;
deliberates policies to advance
management transparency and
fairness.
Executive Council
Deliberates and discusses
important operational matters
within the scope of the authority
of the president and CEO;
determines future direction.
84
GovernanceOMRON Corporation Integrated Report 2021 Fiscal 2021 Advisory Committee
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
Takehiro Kamigama
Izumi Kobayashi
Audit & Supervisory Board Member (Full-time)
Shuji Tamaki
Audit & Supervisory Board Member (Full-time)
Kiyoshi Yoshikawa
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
Approach to Composition of Board of Directors
In order to strengthen the supervisory function of the Board of Directors, OMRON supervision from execution, and the majority
of the Board consists of Directors who are not involved with business execution. In addition, at least one-third of the Board of
Directors consists of Outside Directors. To ensure independence, Outside Directors and Outside Audit & Supervisory Board
Members (Independent) are appointed based on OMRON’s Independence Requirements for Outside Executives. The diversity
of the Board of Directors will also be ensured by providing a well-balanced mix of human resources with experience, expertise,
and knowledge among the Directors and Audit & Supervisory Board Members.
Composition of Board of Directors
Ratio of
Outside Directors
Ratio of
Non-executive Directors
Ratio of
Female Directors
Outside
Directors:
3
Executive
Directors:
3
5 / 8
62.5%
3 / 8
37.5%
Outside
Directors:
5
Female
Director:
1
1 / 8
12.5%
Non-
executive
Directors:
5
Male
Directors:
7
Ratio of Outside Executives
(Outside Directors / Audit & Supervisory
Board Members (Independent))
Inside
Executives:
7
5 / 12
41.7%
Outside
Executives:
5
Main Areas of Experience and Expertise of Outside Directors and Audit & Supervisory Board Members (Independent)
Name & Title
Corporate
management
Financial
accounting
Legal
Compliance
Internal controls
Global business &
expatriation
Manufacturing
technology
R&D
Background
and Qualifications
Eizo Kobayashi
Outside Director
Takehiro Kamigama
Outside Director
Izumi Kobayashi
Outside Director
Hideyo Uchiyama
Tadashi Kunihiro
Audit & Supervisory
Board Members
(Independent)
Audit & Supervisory
Board Members
(Independent)
85
General trading
company
Manufacturing
Financial and
international
organization
Certified public
accountant
Lawyer
GovernanceOMRON Corporation Integrated Report 2021
Director Compensation
Compensation Policy for Directors
1 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.
2 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.
The compensation composition ratio of performance-linked compensation to base salary shall be determined according to
each Director’s role and responsibility.
Compensation for outside directors shall consist of a base salary only, reflecting their roles and the need for maintaining
independence.
3 Base Salary
The amount of a base salary, paid monthly, shall be determined by taking into account the salary levels of other companies,
as surveyed by a specialized outside organization.
4 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. Bonuses shall be paid as a lump sum after the conclusion of the fiscal year.
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 performance-linked component of stock compensation shall be paid after the medium-term management plan concludes,
while the non-performance-linked component shall be paid after the Director retires.
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.
5 Compensation
Governance
The compensation composition, compensation composition ratio, level of the base salary, as well as performance indicators
and evaluation methods of performance-linked compensation shall be determined based on the deliberations and
recommendations of the Compensation Advisory Committee.
The amount of compensation for each Director shall be determined by a resolution of the Board of Directors reflecting the
deliberations and recommendations of the Compensation Advisory Committee.
Overview of Compensation Structure for Directors (From fiscal 2021)
(1) Compensation Composition Ratio
Compensation to Directors and Executive Officers consists of a base salary (fixed compensation) and compensation according to Company performance,
namely short-term performance-linked compensation (bonuses) and medium-to-long-term, performance-linked compensation (stock compensation). The
ratio of compensation consisting of performance-linked compensation compared to base salary has been determined for each role:
Base Salary
:
Short-term
Performance-linked
Compensation (Bonuses)
:
Medium-to-long-term,
performance-linked compensation
(stock compensation)
= 1 : 1 : 1.5*
* Referring to Representative Director, President and CEO
* The ratio is based on the assumption that the performance targets are set as 100% for each performance-linked compensation.
(2) Base Salary
A base salary is paid monthly to Directors and Executive Officers 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 (Bonuses)
Bonuses are paid as a lump sum after the fiscal year concludes to Executive Officers and Directors excluding Outside Directors as short-term performance-
linked compensation, which is linked to yearly performance indicators and the degree of achievement of performance targets. Director bonuses vary
between 0% and 200% according to the achievement of operating income, net income, and ROIC targets defined in the annual operating plan.
Base amount
for each position
×
Performance score
(Operating income 50%,
net income 50%)
×
ROIC score
=
Short-term Performance-linked
Compensation (bonuses)
*Individual targets and other benchmarks are set for Executive Officer performance according to their duties.
(4) Medium-to-long-term, performance-linked compensation (stock compensation)
Stock compensation is paid as medium-to-long-term, performance-linked compensation to Executive Officers and Directors excluding Outside Directors.
Stock compensation comprises the performance-linked component (60%), which is linked to the degree of achievement of the medium-term
management plan, and the nonperformance- linked component (40%), which aims for retention and motivation to improve share prices over the medium-
to long-term, and is paid under the condition of a certain term of service. The performance-linked component of stock compensation is paid after the
medium-term management plan concludes, while the non-performance-linked component is paid after the Director retires. The performance-linked
component will fluctuate in the range of 0% to 200% depending on the degree of achievement of performance targets in the medium-term management
plan. In the event of serious misconduct during their term of office, and such misconduct harms the Company, the Compensation Advisory Committee
will deliberate and make a recommendation. Based on this discussion and recommendation, the Board of Directors and President shall resolve to limit
the payment of stock-based compensation for Directors and Executive Officers, respectively.
P82 Medium-to-long-term, performance-linked compensation
(5) Performance indicators of performance-linked compensation
Short-term performance-linked compensation (bonuses) sets indicators to evaluate profitability and efficiency for the achievement of the short-term
management plan based on the medium-term management plan.
Medium-to-long term, performance-linked compensation (stock compensation) sets indicators to evaluate profitability and efficiency from a financial
perspective, improved corporate value compared to the stock market from a corporate value perspective, and sustainable management from a non-
financial perspective for the achievement of the medium-term management plan.
86
GovernanceOMRON Corporation Integrated Report 2021 Initiatives Towards Improving the Board of Directors’ Effectiveness
Status of Initiatives Towards Improving the Board of Directors’ Effectiveness
The Company ensures transparency and fairness in business management, speeds up management decisions and practices,
and strives to boost the OMRON Group’s competitive edge. The ultimate objective is to achieve sustained enhancement of
corporate value. To this end, the Company reinforces the oversight functions of Board of Directors through initiatives for
improving its effectiveness.
Such initiatives are undertaken in a cycle of (1) evaluation of Board of Directors’ effectiveness, and (2) determination of the
operational policy and focus themes of Board of Directors and formulation and implementation of annual plans.
(1) Evaluation of Board of Directors’ effectiveness
The Company’s evaluation of Board of Directors’ effectiveness is conducted by Corporate Governance Committee chaired by a
Director (Independent) and comprising only Directors (Independent) and Audit & Supervisory Board Members (Independent)
(hereinafter “Outside Executives”). Outside Executives act as members of Board of Directors while having the perspectives of
all stakeholders including the shareholders. Corporate Governance Committee, which is composed only of Outside Executives,
performs evaluations in order to ensure that evaluations are both objective and effective.
(2) Determination of the operational policy and focus themes of Board of Directors and formulation and
implementation of annual plans
Based on the evaluation results by Corporate Governance Committee in (1) and the business environment, etc., Board of
Directors determines its operational policy and focus themes for the next fiscal year. Board of Directors formulates and
implements annual plans based on this operational policy.
The Company continues to improve Board of Directors’ effectiveness by implementing (1) and (2) above on a yearly basis.
Corporate Governance Committee has evaluated these initiatives to be the Company’s unique, optimal activities that are both
objective and effective. Board of Directors recognizes the Company's initiatives as being more effective than evaluations by
third parties.
Initiatives Towards Improving the Board of Directors’ Effectiveness
Fiscal 2021
Fiscal 2019
Fiscal 2020
Determination of
the operating
policy
Execution
Evaluation
Determination of
policies for
operating the Board
of Directors for the
following fiscal year
based on evaluation
results
Implementation of
measures to
improve the
effectiveness
through the Board
of Directors
meetings
Analysis and
evaluation of the
Board’s
effectiveness and
the execution status
of measures
Evaluation
Analysis and
evaluation of the
Board’s
effectiveness and
the execution status
of measures
Board of Directors
Corporate Governance
Committee
Determination of
the operating
policy
Execution
Determination of
policies for
operating the Board
of Directors for the
following fiscal year
based on evaluation
results
Implementation of
measures to
improve the
effectiveness
through the Board
of Directors
meetings
Board of Directors
Implementation
bodies
Corporate Governance
Committee
Evaluation of the Board of Directors’ Effectiveness for Fiscal 2020
The methods of the evaluation of Board of Directors’ effectiveness and the evaluation items in the self- evaluation for fiscal
2020 are as described below.
2-1. Evaluation Methods
1 Self-evaluations by Directors and Audit & Supervisory Board Members
Each Director and Audit & Supervisory Board Member performed self-evaluations of the contents of discussions at the
meetings of the Board of Directors and the extent of oversight functions exercised, immediately following each meeting
of the Board of Directors.
87
GovernanceOMRON Corporation Integrated Report 2021 Each Director and Audit & Supervisory Board Member performed self-evaluations of the operation, etc. of the Board of
Directors over the course of the year following the meeting of the Board of Directors held in February and March 2021.
2 Interviews by the Chair of Board of Directors
The Chair of the Board of Directors conducted individual interviews with Directors and Audit & Supervisory Board
Members between January and March 2021.
3 Evaluation by Corporate Governance Committee
The Corporate Governance Committee evaluated the Board of Directors’ effectiveness in March and April 2021.
2-2. Self-evaluation Items
Self-evaluation items are as follows. Evaluations were performed from the perspectives of whether or not Board of Directors
sufficiently exercised its oversight functions, and whether it contributed to the exercise of its oversight functions. Evaluations
are performed by completing anonymous questionnaires. For each evaluation item, answers are provided using five-point scales
and free comment fields.
1 Self-evaluations performed immediately following meetings of Board of Directors
Content of discussions at the meeting of Board of Directors
Extent of oversight functions exercised by Board of Directors are demonstrated
2 Self-evaluations for the entire year, performed at the end of the fiscal year
1. Operation of Board of Directors
1) Board of Directors Operational Policy for Fiscal 2020
2) Focus themes for fiscal 2020
3) Deliberations and reports regarding issues other than focus themes
4) Board of Directors operational policy for fiscal 2021 and its focus themes
2. Increasing information sharing opportunities
1) Separate meetings
2) Initiatives on information sharing opportunities
3. Advisory Committees
4. Other Overall Issues regarding Board of Directors
3 Other self-evaluations
(evaluations performed when new officers are appointed, when medium-term management plans
are formulated, when changes are made to the corporate governance system, etc.)
Scale and composition of Board of Directors
State of operations of Board of Directors
Operation of the advisory committees
Results of Evaluation of Board of Directors’ Effectiveness for Fiscal 2020
Corporate Governance Committee conducted an evaluation of Board of Directors’ effectiveness for fiscal 2020 and
reported the results of the evaluation at Board of Directors meeting held on May 14.
Board of Directors Operational Policy for Fiscal 2020
“To enable the OMRON Group to deliver new value in this period of social structure transformation, Board of Directors will
exercise its oversight functions in a multifaceted manner and from the short-term and medium- to long-term perspectives.”
Focus Themes
Business operations with COVID-19 in mind
Response to increasing geopolitical risks
Creation of new businesses in the period of transformation and taking on the challenge of new business model
development
Building a new core information system
Determination of the direction of next long-term vision with new values in mind
88
GovernanceOMRON Corporation Integrated Report 2021 3-1. General comments on evaluation
1 Operation of the Board of Directors
In order to realize further improvements in corporate value, based on the results of the evaluation of the Board of Directors’
effectiveness for fiscal 2019, the Board of Directors discussed the Board of Directors’ operation policy for fiscal 2020. The Board
determined that in fiscal 2020, on top of the need to respond to the COVID-19 pandemic, it is important to accurately and
speedily grasp global changes, and to provide new value during this period of transformation of the social structure. Based on
these discussions, the Board of Directors set the “exercise of its oversight functions in a multifaceted manner and from the
short-term and medium- to long-term perspectives” as its operation policy, and listed five focus themes. Based on this
operation policy of the Board of Directors, the President and CEO reported on issues including initiatives for focus themes and
the status of responses to environmental changes to the Board of Directors, and discussed the issues. (*Please refer to 3-2. 1
“Initiatives regarding focus themes” below for more details on focus themes.)
While the next long-term vision had been scheduled to start in fiscal 2021, affected by the COVID-19 global pandemic, the
Company placed the highest priorities on crisis response so as to ensure business continuity and profits. At the same time,
since it is necessary to conduct preparations and transformation for the world after the containment of the COVID-19 pandemic
(“post-COVID”), the President and CEO proposed to the Board of Directors to postpone the start of the next long-term vision
by a year. In addition, besides resolving social issues based on SDGs, it was suggested that the next long-term vision should be
formulated such that it reflects initiatives made from a medium- to long-term perspective in preparation for the post-COVID
world. With regard to this, the Board of Directors deemed the postponement of the start of the next long-term vision to be
appropriate. The Board also debated the importance of recognizing the speed of transformation of the social structure and the
messages that must be given to both parties within and outside the Company when announcing the reason for the
postponement. In particular, in order to adapt to the rapid speed of change of the social structure, the Board reaffirmed the
necessity of accelerating responses at a pace beyond current expectations.
In addition to the above, the President and CEO reported the status of business execution to the Board of Directors, on issues
including: the status of response to COVID-19, the performance of each fiscal year in light of the impact thereof, the short-term
management plan of each BC, and initiatives related to sustainability. Regarding these issues, the Board of Directors positively
evaluated the President and CEO’s business operations amidst the COVID-19 crisis. Furthermore, from the perspective of social
structural changes due to COVID-19, geopolitical risks and such, the Board discussed the importance of further strengthening
existing businesses, creating new business opportunities, and disseminating information from the viewpoint of stakeholders,
including investors. In particular, in order for the Company to grow further in the post-COVID era, the Board recognized the
further importance of acquiring and utilizing human resources who are not entrapped by existing mindsets and are able to think
freely and creatively, and the cultivation of a corporate culture where the spirit of constantly challenging oneself can be
demonstrated. In discussions regarding sustainability, the Board recognized that it is vital for OMRON to further link
sustainability initiatives to opportunities for the creation of new businesses, in order to achieve its goal of resolving social issues
through its businesses.
The Corporate Governance Committee, recognizing that the Board of Directors has positioned fiscal 2020 as a year required to
operate under the COVID-19 crisis and as a preparation period for the next long-term vision in view of the new society post-
COVID, evaluated favorably on the following: timely reports on business conditions and focus themes were made from those
involved in business execution; and Outside Directors and Audit & Supervisory Board Members (Independent) raised issues
about the responses needed to realize further improvements in corporate value in the post-COVID era, and engaged in
discussions thereof. Furthermore, while discussions at meetings of the Board of Directors revolved around the medium-to-long-
term strategies and its function as a monitoring board heightened, it also appropriately functioned as a management board, with
each important case, including the responses to quality issues, components procurement and geopolitical risks, being
deliberated individually. The fine balance of these aspects was also commended by the Committee.
From the above-mentioned facts, the Corporate Governance Committee recognized that the Board of Directors exercised its
oversight functions from multifaceted viewpoints including both the short-term and medium-to-long-term perspectives. Those
involved in business execution took advice from the Board of Directors earnestly and evolved their strategies or initiatives
accordingly. As a result of the Board and those involved in business execution working together to make the two-wheel system
of management oversight and business execution function properly, gross profit margin improved despite the COVID-19 crisis,
and profits grew as well. Therefore, the Committee has deemed that the effectiveness of the Board of Directors has increased.
2 Increasing information sharing opportunities
The Board of Directors strove to increase information sharing opportunities by conducting individual meetings, etc. aimed at
improving the effectiveness of the Board of Directors. In fiscal 2020, amidst the impact of the COVID-19 pandemic, the
following meetings were held: “Interviews by the Chair of the Board of Directors” where the Chair of the Board of Directors
meets with individual Directors or Audit & Supervisory Board Members; “Outside Executives Discussions” attended only by
Outside Directors and Audit & Supervisory Board Members (Independent) to exchange opinions; and “Direct Meetings with the
Accounting Auditor” where the Board of Directors and the Accounting Auditor have discussions directly.
The Corporate Governance Committee considered these initiatives to be effective opportunities for improving the Board’s
effectiveness. Specifically, Interviews by the Chair of the Board of Directors were commended, as they provided a place for
executives to voice concerns that they may not be able to fully convey during Board of Directors meetings. In Outside
89
GovernanceOMRON Corporation Integrated Report 2021 Executives Discussions, younger management executives introduced new businesses, which allowed for a deeper
understanding of each of the Company’s businesses as well as of the next-generation management personnel. In a Direct
Meeting with the Accounting Auditor, a discussion was conducted about the medium to long term based on the Accounting
Auditor’s auditing knowledge. In this meeting, due to the different perspectives and stances of the Accounting Auditor and
Directors and Audit & Supervisory Board Members, the subjects could not be sufficiently deliberated. The Committee requested
that they should carefully determine the themes and consider how to proceed the discussion more smoothly from the next
time onwards. Regarding on-site visits that could not be conducted due to the impact of COVID-19, since these visits are an
important activity that allows Outside Executives to have a sense of the Company’s businesses, the Committee requested for
their resumption depending on the situation of the pandemic.
3-2. Overview of Board of Directors’ Operations
1 Initiatives regarding focus themes
Focus theme: Business operations with COVID-19 in mind
As COVID-19 has a material impact on business, the Board of Directors has set “Business operations with COVID-19 in
mind” as one of its focus themes. Based on this, the President and CEO has set 1 placing the highest priority on the
safety and health of employees, 2 fulfilling our supply responsibilities in the supply chain, and 3 securing business
performance as an emergency mode as the three pillars of business operations, and the Board of Directors reported on
the status of infections and measures, the global production system, careful management of fixed costs, and measures
to improve earning ability. With regard to this, the Board of Directors confirmed that the safety and health of employees
is our highest priority, and discussed the stable supply of products through the tri-polar framework between Japan,
China, and Southeast Asia, the supply–demand trends and procurement status of key components such as
semiconductors, and the need for growth investment despite the careful management of fixed costs. In particular,
concerns over a further worsening of supply shortage of semiconductors were discussed and shared.
Through continuous monitoring by the Board of Directors, the Company fulfilled its social responsibility towards
employees and the supply chain based on its corporate principles. Even amidst the COVID-19 crisis, the Company
increased its profits through improving its gross profit margin and other means. The Corporate Governance Committee
commends such achievement and deems that the Board of Directors has appropriately exercised its oversight
functions.
Focus theme: Response to increasing geopolitical risks
As the relationships between countries evolve and become more complex by the day, and such changes have a
material impact on business and performance, the Board of Directors has set “Response to increasing geopolitical
risks” as a focus theme. Based on this, the President and CEO regularly reported to the Board of Directors about
changes in the business environment in each region and how performance is being impacted, in relation to topics about
business performance. The President and CEO also reported on the optimal production, R&D, and the ideal
management of intellectual property, as well as systems that can speedily detect and provide insight about changes in
legal regulations that will affect each business. In response, the Board discussed the need to constantly bear in mind
the fact that relationships between countries may evolve beyond the previous scope of expectations. In particular, due
to rapid changes in geopolitical risks, the Board recognized that risk management based on an assessment of each
country’s circumstances is a necessary task, and confirmed that the Board will continue this discussion.
The impact of geopolitical risks is reported at Board of Directors meetings, and appropriate responses are discussed.
Responses against geopolitical risks are incorporated into the internal control system, and the Board of Directors
sufficiently monitors such risks and recognizes the issues that must be tackled going forward. Therefore, the Corporate
Governance Committee deems that the Board of Directors has appropriately exercised its oversight functions.
90
GovernanceOMRON Corporation Integrated Report 2021 Focus themes: Determination of the direction of next long-term vision with new values in mind
Creation of new businesses in the period of transformation and taking on the
challenge of new business model development
Continuing from the previous fiscal year, the Board of Directors has set the “Determination of the direction of next
long-term vision with new values in mind” as a focus theme relating to the next long-term vision, which is being
formulated. In addition, the Board has set the “Creation of new businesses in the period of transformation and taking
on the challenge of new business model development” as a focus theme. Based on this, at Board of Directors
meetings, the President and CEO reflected the current state of the assumptions and targets set for the next long-
term vision, raised at Board of Directors meetings in the previous fiscal year. Furthermore, the President and CEO
reported to the Board about the next long-term vision based on the post-COVID worldview and changes in values, as
well as the direction of new businesses that use existing businesses as their starting point. Regarding this, the Board
discussed how one’s viewpoint can widen through exchanges with people from different industries, the employment
of human resources with specialized expertise, and the utilization of talented personnel obtained through M&As,
since the nurturing of next-generation leaders who can guide the Company towards the next long-term vision is an
important issue that is necessary for further growth. At the same time, the Board recognized the importance of
creating a corporate culture that encourages employees to take on challenges, and the necessity of building
mechanisms that enable trial and error. Regarding the creation of new businesses, the Board recognized that the
active utilization of corporate venture capitals will be important going forward. Furthermore, in order to realize its
goals, the Board concluded that it is important to link the Company’s goals to the dreams and ambitions of employees.
The President and CEO also gave an interim report on the next long-term vision regarding the Industrial Automation
Business and the Healthcare Business, which are mainstay businesses. In the interim report, the President and CEO
reflected on each of the two above businesses over the past ten years, and reported on the social issues of each
business domain in the next decade, the technologies and new business models required to resolve those issues, as
well as on the status of reviews of M&A and alliances. With regard to this, the Board of Directors discussed the
possibility of realizing the creation of new businesses and measures. In particular, based upon that discussion, the
Board recognized that it is necessary to employ a more flexible human resources strategy throughout the Company,
since the implementation of measures for new businesses will require human resources with vastly different
capabilities.
Regarding the next long-term vision, the Board displayed their awareness of issues based on changes in the external
environment, including the COVID-19 crisis and geopolitical risks. The Committee commends the Board for making
steady progress towards completion within fiscal 2021. Furthermore, since discussions are being made at Board of
Directors meetings about issues and tasks necessary for further growth, the Corporate Governance Committee
deems that it has appropriately exercised its oversight functions. The Committee has also verified that the Board will
continue to fulfill its oversight functions in preparation for the start of the next long-term vision in fiscal 2022.
Focus theme: Building a new core information system
As IT systems vary between business divisions and regions, recognizing the importance of having a unified system
globally, the Board of Directors has set “Building a new core information system” as a focus theme, for the third year
following fiscal 2018 and fiscal 2019. Based on this, the President and CEO reported to the Board of Directors that the
planning phase is progressing according to schedule and the advanced introduction of a portion of the systems,
including the purchase of indirect materials and reimbursements, is progressing smoothly, but that it is necessary to
review the scope of implementation due to the issue of a lack of IT personnel. Regarding this, the Board discussed
the importance of spreading awareness throughout the Company that they are building an operational process that
must be compatible with system flows based on global standards, the importance of bridging the people in charge of
bringing this large-scale decade-long project to its fruition, the people on site, and the human resources who are
constructing the system, as well as the need to continue discussions on this theme, from the standpoint of scale and
difficulty. In particular, the Board recognized that the most important issue which should be the top priority is to
secure and allocate talented personnel from each business division.
The Board discussed the key mindset and human resources needed for this large-scale project at meetings by
leveraging the experience and insights of the Outside Executives, and as a result of the discussions, the future
direction of monitoring became clarified. Thus, the Corporate Governance Committee judges that the effectiveness of
the Board of Directors has appropriately exercised its oversight functions.
91
GovernanceOMRON Corporation Integrated Report 2021 2 Other deliberation/reporting items
The Board of Directors has deliberated on 29 proposals to be resolved and 30 reported cases, including quarterly business
results as a legally required matter for deliberation, election proposals of executives, etc., and regularly reported proposals such
as those relating to product quality risks and disciplinary cases.
The Corporate Governance Committee commends the Board of Directors for making explanations in election proposals of
executives, a legally required matter for deliberation, based on the status of the promotion of diversity, as well as for making
highly transparent explanation for each individual case for Outside Executives.
3-3. Overview of increasing information sharing opportunities
The Board of Directors and the Audit & Supervisory Board are working to facilitate information sharing outside of meetings of
Board of Directors in order to improve the effectiveness of the Board. In fiscal 2020, individual meetings were held to help
Outside Executives better understand execution and to deepen communication between them.
The specific approaches are as follows.
1 Individual meetings
Outside Directors’ and Accounting Auditor’s opinion exchange meeting (continuously held from fiscal 2015)
Supervisory and auditing functions are being strengthened by sharing the viewpoints of the Accounting Auditor with Outside
Directors. In addition, we are building a relationship through this approach to exchange information on risks and other
information without going through OMRON.
Interviews by the Chair of the Board of Directors (continuously held from fiscal 2016)
The Chair of the Board of Directors holds individual interviews with Directors and Audit & Supervisory Board Members once
a year to discuss improvement plans related to the operation of the Board of Directors.
Outside Executives Discussions (continuously held from fiscal 2019)
Outside Executives hold quarterly opinion exchange meetings to deepen communication between them.
Board of Directors operational policy for fiscal 2021 and its focus themes
Based on the results of evaluation conducted by Corporate Governance Committee, Board of Directors engaged in a discussion
to determine its operational policy for fiscal 2021. Based on the results of this discussion, Board of Directors operational policy
for fiscal 2021 and its focus themes were determined at Board of Directors meeting held on May 27.
Board of Directors Operational Policy for Fiscal 2021
“To enable the OMRON Group to achieve dramatically improved corporate value in the next decade, the Board of
Directors will exercise its oversight functions in a multifaceted manner and from the short-term and medium- to
long-term perspectives.”
Focus Themes
Completion of next long-term vision and determination of medium-term management plan
< Points to be supervised >
Response to the new normal era post COVID
Initiatives for key sustainability issues
Transformation of business model and acceleration of innovation
Reform of human resources management
Strengthening resilience
Response to increasing geopolitical risks
Checking the progress of establishing a companywide IT system
92
GovernanceOMRON Corporation Integrated Report 2021 Maintaining Audit Functions
Conducive to Maximized
Corporate Value and
Contributing to the Evolving
Governance Structure
Hideyo Uchiyama
Independent Audit & Supervisory Board Member
Member of the Corporate Governance Committee
The revision of the Corporate Governance Code requires companies listed on the TSE Prime
Market to further strengthen their governance systems. We spoke with Independent Audit &
Supervisory Board Member Hideyo Uchiyama about the function of the Audit & Supervisory
Board in OMRON's governance structure and the new Key Audit Matters (KAM).
Positioning and Role of the Audit &
Supervisory Board in OMRON's
Governance
– Could you tell us about the characteristics
of OMRON's governance structure and your
assessment of it?
The governance structure of Japanese
companies has long supported economic
growth after WWII, with Directors and
executives serving concurrently, and without
sufficient separation between execution and
supervision. In recent years, there has been a
transition to governance through monitoring,
which encourages decisive decision making by
management and strengthens the
accompanying supervisory structure. The role
of Audit & Supervisory Board Members has
become more essential and clearer at the same
time as the Audit & Supervisory Board system
has also experienced historical changes and
has been reformed to ensure adequate
functioning.
Although OMRON has an Audit & Supervisory
Board, it has a hybrid institutional design with
four voluntary committees chaired by Outside
Directors, and the Chairman of the Board of
Directors is a Non-executive Director. My
opinion is that this distinctive system design is,
in a nutshell, close to the perfect form of a
company with an Audit & Supervisory Board. I
believe that this is an extremely appropriate
governance structure that was uniquely
established under OMRON’s corporate culture,
since it addresses the demands of the times
with a monitoring board, while also
strengthening the functions of Audit &
93
GovernanceOMRON Corporation Integrated Report 2021 Supervisory Board Members.
– Mr. Uchiyama, as an Audit & Supervisory
Board Member, you are also a member of the
Corporate Governance Committee. What are the
functions and roles of that committee?
OMRON's Corporate Governance Committee
consists of Outside Directors and Independent
Audit & Supervisory Board Members, and its
main role is to evaluate and report on the
effectiveness of the Board of Directors. Under
Japan’s Companies Act, the role of Audit &
Supervisory Board Members is to supervise
the execution of duties by Directors, so the
Committee engages both those who are
supervising and being supervised. We are
aware that the expectations of our stakeholders
can be met by frankly exchanging opinions to
improve OMRON’s governance functions,
regardless of our respective positions.
In addition, regular meetings are held between
Outside Directors and executive division
managers, and information is exchanged among
Outside Directors based on questions and
answers concerning the business handled by
executive division managers. While Audit &
Supervisory Board Members are single-person
organs that they can exercise their authority
independently, and Independent Audit &
Supervisory Board Members generally work on
company issues based on their individual
expertise and experience, it is also necessary
for them to fully understand the role of Outside
Directors in dealing with company issues in
order to ensure the effectiveness of
monitoring.
When I was appointed as an Independent Audit
& Supervisory Board Member for OMRON,
Chairman Tateishi sent me a message saying,
“Welcome to Team OMRON.” I understand now
that it is important for both Outside Directors
and Independent Audit & Supervisory Board
Members to think about how they should
function as a team to improve corporate value
while fully understanding their own positions.
The OMRON approach of mutual understanding
and discussing as a team is also an excellent
point from the viewpoint of ensuring the
effectiveness of governance.
Confidence of Initiatives to Improve
the Effectiveness of the Audit &
Supervisory Board
– Meaningful communication also leads to
strengthened governance. How would you
describe the effectiveness of Audit &
Supervisory Board Member functions at
OMRON?
I believe that there are a number of factors that
can improve the effectiveness of Audit &
Supervisory Board Member functions. It is
often asked whether there are proper
structures in place to support activities of Audit
& Supervisory Members, cooperation between
the Internal Audit Division and the Audit &
Supervisory Board, and cooperation with an
independent Accounting Auditor. Rather than
being inferior, I feel that OMRON's
infrastructure is in fact superior when
compared to other companies in many ways.
However, the important thing is how effective
Audit & Supervisory Board Members in such an
infrastructure. Independent Audit &
Supervisory Board Members are required
naturally to be prepared to express opinions
that are necessary for governance. I think that
the quality they should have is “inquisitiveness
based on healthy skepticism.” Because Audit &
Supervisory Board Members are elected at the
Shareholders’ Meeting, it is essential for them
to maintain the viewpoint of shareholders and
to think and make proposals based on social
norms and with an appropriate problem-solving
perspective. I believe that what enables
OMRON to do this is the fact that information
is appropriately provided to Outside Executives
so that their opinions are meaningful and useful
to management, and most importantly, because
its Corporate Philosophy is firmly rooted and
forms the backbone of the company. Our
Corporate Philosophy is always shared as the
basis and serves as the benchmark for
decisions even in the various discussions we
have. I feel that this has strengthened
OMRON's governance.
– What is the kind of organization that you
think is ideal for the Internal Audit Division at
OMRON from the perspective of
“inquisitiveness based on healthy skepticism”?
At OMRON, the Global Auditing Office checks
the maintenance and operational status of the
internal control system throughout the
company. Their work is carried out under the
direction of the President, and they must have
the attitude and ability to detect, analyze, and
solve management issues in order to function
as the hands, feet, eyes, and ears of the
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GovernanceOMRON Corporation Integrated Report 2021 President.
For quite a while, it has been suggested to
management that this kind internal audit work
should be positioned as a career plan for
human resources they want to cultivate in the
future.
Auditing is often regarded as a compliance role
that checks the consistency with internal
regulations and the status of legal compliance.
While this is important, at the same time, I
would like internal audit managers to have the
perspective of how to appropriately manage
the potential and emerging management issues
faced by each business segment, and to gain
experience so that they can acquire this
perspective.
People grow by encountering and acquiring
ideas from perspectives that are not their own.
How things appear are very different at the foot
of Mt. Fuji, the 5th station, and the summit.
When in charge of internal auditing, you are in
an environment where you can be in constant
contact with superiors. This makes it an
attractive division where you have the
opportunity to grow within the company.
OMRON Governance Effectiveness
through KAM Implementation
– KAM has been newly implemented in
Japan, although a similar system had been used
earlier in other countries. What are your
thoughts about OMRON's response to KAM and
its significance?
Continuity, identical conditions, and identical
treatment are emphasized in the world of
auditing and accounting. In particular, audit
reports have maintained the same format in
every detail, including wording, throughout the
history of legal proceedings. Triggered by the
Lehman crisis, questions were raised about the
usefulness of the traditional, self-serving audit
reports to stakeholders, and KAM was
introduced in order to improve audit
transparency.
Even so, KAM is not concluded just in audit
reports, but also needs to be disclosed in a
consistent manner so that it can be read
together with the non-financial information
released by OMRON. For example, it is
important to disclose information about
business risks disclosed by the company as
non-financial information, including what kind
of problems occur in accounting, how to handle
this awareness in auditing, and how to
communicate this externally as KAM in the
audit report.
This fiscal year, the Accounting Auditor
described the evaluation of goodwill and other
items associated with investments in the
Industrial Automation Business and the
Healthcare Business as KAM on a consolidated
basis for OMRON. As strategic investments
during the period of VG2020, they are
recognized as having a key impact on
management strategies and the Consolidated
Financial Statements, and are disclosed in the
securities report as items related to M&A given
an A rating by OMRON, which conducts
integrated risk management.
Although the Audit & Supervisory Board
Members determined the Accounting Auditor's
recognition and disclosure of OMRON’s
awareness of these events were
comprehensive and appropriate in KAM, the
wording was repeatedly discussed between
the Accounting Auditor and executives, and
efforts were made to connect it with non-
financial information as much as possible and
to present it in an understandable way to
readers. Accordingly, OMRON's securities
report itself has also changed significantly, and
I think the content has become easier to
understand. I particularly emphasized that the
content should have a sufficient understanding
of the original significance of KAM, while being
from the perspective of shareholders,
investors, and stakeholders.
There are concerns that KAM will just become
boilerplate, but I believe that this is groundless
if a stance like OMRON is taken. Those
involved in auditing should also properly utilize
KAM as a communication tool in order to
discover how to increase the information value
of audit reports. Going forward, I expect that
KAM will be a point to evaluate a company’s
stance toward information disclosure and, by
extension, to also evaluate its governance.
– Finally, please tell us your own thoughts
about OMRON's future governance structure?
OMRON constantly evolves and tailors its
governance structure for the changing times,
and as previously mentioned, it is close to
being the culmination of a company with an
Audit & Supervisory Board. However, what is
important is to maintain an attitude of not
95
GovernanceOMRON Corporation Integrated Report 2021 remaining in the current situation, but to
continue to adopt new trends and further
strengthen and expand governance.
As a new initiative this year, we have changed
the monthly evaluation of the Board of
Directors, which had been conducted in writing
until last year, to a format where the contents
of Board of Directors meetings are reviewed
only by Outside Directors and Independent
Audit & Supervisory Board Members
immediately after meetings. There are
discussions as to “whether there has been
enough debate”, or “whether things need to be
examined from a different perspective.” These
discussions are held in a timely manner without
taking time away from Board of Directors
meetings, and their contents are reflected in
subsequent meeting operations as appropriate,
with a summary of results for the year used as
the basis for evaluating the Board of Directors.
I believe that these daily actions will lead to
improved effectiveness with a seemingly on-
site presence.
As an Independent Audit & Supervisory Board
Member, I will continue to maintain audit
functions that contribute to enhancing
corporate value without compromising what
we have now, and as a member of Team
OMRON, I will keep contributing to the further
strengthening of the governance structure and
maximize OMRON's corporate value.
Securities Report (84th Term) Excerpt from the Independent Auditor's Report and the Internal Control Audit Report
Key Audit Matters
Key Audit Matters are matters that the auditor considers to be particularly important as a professional expert in the audit
of the Consolidated Financial Statements for the consolidated fiscal year.
The KAM are addressed in the auditing process of the Consolidated Financial Statements and in forming the audit
opinion, and the auditing firm does not express individual opinions on these matters.
Key Audit Matters for Fiscal Year Ended March 31, 2021
1. Evaluation of goodwill associated with investments in the industrial automation business and recoverability of
deferred income tax assets of U.S. consolidated corporations
As part of strategic investments in the long-term vision “Value Generation 2020 (VG2020),” OMRON acquired shares of
Delta Tau Data Systems, Inc. and Adept Technology, Inc. in 2015, and Microscan Systems, Inc. in 2017 to make them
consolidated subsidiaries in the Industrial Automation Business (IAB). (Hereinafter, these transactions are collectively
called “business combination transactions.”)
All of these consolidated subsidiaries are U.S.-based companies.
OMRON has recorded goodwill on its Consolidated Balance Sheets through these important business combination
transactions.
In addition, mainly as a result of focused R&D investment and customer development activities to achieve advanced
applications through matching acquired product technologies with existing ones from OMRON, the U.S. consolidated tax
payment group, which includes the subsidiaries acquired through the above business combination transactions, incurred
a tax loss carried forward in previous fiscal years.
For the loss carried forward, deferred income tax assets for future tax benefits are recorded on the Consolidated Balance
Sheets.
2. Evaluation of goodwill associated with investments in the healthcare business and evaluation of investments in affiliates
As part of strategic investments in the long-term vision “Value Generation 2020 (VG2020),” OMRON acquired shares of
NS Industria de Aparelhos Medicos Ltda. in 2014 to make it a consolidated subsidiary in the Healthcare Business (HCB).
In addition, OMRON gradually acquired shares of AliveCor, Inc. starting in 2017, and made it an affiliate accounted for
using the equity method in 2020.
Through these investment activities, OMRON records goodwill on its Consolidated Balance Sheets, as well as
investments in and advances to affiliates, which include goodwill under the equity method.
96
GovernanceOMRON Corporation Integrated Report 2021 Directors (As of June 30, 2021)
Directors
Fumio Tateishi
Chairman
CEO Selection Advisory
Committee Member
Yoshihito Yamada
President and CEO
Aug. 1975 Joined OMRON
Jun. 1997 Director
Jun. 1999 Managing Executive Officer
Jun. 2001 Senior General Manager,
Corporate Strategic
Planning HQ
Jun. 2003 Executive Vice President;
President, Industrial
Automation Business
Company
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
Jun. 2008 Director and Executive Vice
President (to present)
Chairman
Jun. 2013 Chairman of the Board (to
present)
Directors
Outside Directors
Kiichiro Miyata
Director, Senior Managing
Executive Officer, CTO
Personnel Advisory Committee
Member
Koji Nitto
Director
Senior Managing Executive Officer, CFO
Compensation Advisory Committee
Member
Apr. 1985 Joined Tateisi Institute of
Life Science, Inc. (now
OMRON HEALTHCARE
Co., Ltd.)
Mar. 2010 Representative Director and
President, OMRON
HEALTHCARE Co., Ltd.
Jun. 2010 Executive Officer
Jun. 2012 Managing Executive Officer
Apr. 2015 Chief Technology Officer
(CTO) and Senior General
Manager of Technology &
Intellectual Property HQ (to
present)
Apr. 2017 Senior Managing Executive
Officer (to present)
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)
Jun. 2017 Representative Director (to
(to present)
present)
Apr. 2018 Senior General Manager,
Innovation Exploring
Initiative HQ
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
Apr. 1977 Joined The Bank of Tokyo,
Ltd. (now MUFG Bank, Ltd.)
July 2003 Branch Manager of Jakarta
Branch, The Bank of
Tokyo-Mitsubishi, Ltd. (now
MUFG Bank, 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)
Eizo Kobayashi
Outside Director
Chairman of the CEO Selection Advisory
Committee
Chairman of the Corporate Governance
Committee
Member of the Personnel Advisory Committee
Member of the Compensation Advisory Committee
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
Apr. 2018 Senior Representative,
ITOCHU Corporation
Apr. 2020 Director Emeritus, ITOCHU
Corporation (to present)
Takehiro Kamigama
Outside Director
Chairman of the Compensation
Advisory Committee
Vice Chairman of the Corporate
Governance Committee
Member of the Personnel Advisory Committee
Member of the CEO Selection Advisory Committee
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
Izumi Kobayashi
Outside Director
Chairman of the Personnel Advisory Committee
Member of the Selection Advisory Committee
Member of the Compensation Advisory
Committee
Member of the Corporate Governance
Committee
Apr. 1981 Joined Mitsubishi Chemical
Industries Limited (now
Mitsubishi Chemical
Corporation)
Jun. 1985 Joined Merrill Lynch
Futures Japan Inc.
Dec. 2001 President and
Representative Director,
Merrill Lynch Japan
Securities Co., Ltd. (now BofA
Securities Japan Co., Ltd.)
Jun. 2017 Outside Director, OMRON
Nov. 2008 Executive Vice President of
(to present)
Jun. 2018 Mission Executive, TDK
Corporation
Jun. 2021 Chief Consultant,
Contemporary Amperex
Technology Japan KK (to
present)
Multilateral Investment
Guarantee Agency, The
World Bank Group
Apr. 2015 Vice Chairperson of Japan
Association of Corporate
Executives
Jun. 2016 Governor of Japan
Broadcasting Corporation
Jun. 2020 Outside Director, OMRON
(to present)
97
GovernanceOMRON Corporation Integrated Report 2021
Audit & Supervisory Board Members (As of June 30, 2021)
Audit & Supervisory Board Members (Full-time)
Audit & Supervisory Board Members (Independent)
Shuji Tamaki
Audit & Supervisory Board
Member (Full-time)
Kiyoshi Yoshikawa
Audit & Supervisory Board
Member (Full-time)
Hideyo Uchiyama
Audit & Supervisory Board
Member (Independent)
Corporate Governance
Committee Member
Tadashi Kunihiro
Audit & Supervisory Board
Member (Independent)
Corporate Governance
Committee Member
Apr. 1985 Joined OMRON
Mar. 2008 General Manager of the
Legal Center, Management
Resources Innovation HQ
Mar. 2015 Senior General Manager of
Global Risk Management
and Legal HQ
Apr. 2015 Executive Officer
Jun. 2021 Audit & Supervisory Board
Member (Full-time) (to
present)
Apr. 1983 Joined OMRON
Mar. 2010 Senior General Manager,
Monozukuri Innovation HQ
Jun. 2010 Executive Officer
Apr. 2016 Managing Executive Officer
Jun. 2019 Audit & Supervisory Board
Member (Full-time) (to
present)
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)
Nov. 1975 Joined Arthur Young &
Company
Dec. 1979 Joined Asahi Accounting
Company (now KPMG
AZSA LLC)
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,
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)
98
GovernanceOMRON Corporation Integrated Report 2021
Executive Officers (As of June 30, 2021)
President
Yoshihito Yamada
CEO
Senior Managing Executive Officers
Kiichiro Miyata
CTO and Senior General Manager,
Technology & Intellectual Property HQ
Koji Nitto
CFO and Senior General Manager,
Global Strategy HQ
Managing Executive Officer
Shizuto Yukumoto
Company President, Electronic and
Mechanical Components Company
Seigo Kinugawa
CEO, OMRON EUROPE,
Industrial Automation Company
Masahiko Tomita
Senior General Manager,
Global Human Resources and
Administration HQ
Junta Tsujinaga
Company President,
Industrial Automation
Company
Toshio Hosoi
President and CEO,
OMRON SOCIAL SOLUTIONS
Isao Ogino
President and CEO,
OMRON HEALTHCARE
Nigel Blakeway
Chairman and CEO, OMRON
MANAGEMENT CENTER OF AMERICA
and Chairman, OMRON MANAGEMENT
CENTER OF EUROPE
and Chairman, OMRON MANAGEMENT
CENTER OF ASIA PACIFIC
99
GovernanceOMRON Corporation Integrated Report 2021 Executive Officers
Goshi Oba
Chairman and President,
OMRON INDUSTRIAL AUTOMATION
(CHINA)
Takayoshi Oue
Senior General Manager,
Global Finance and Accounting HQ
Tsutomu Igaki
Senior General Manager,
Global Investor & Brand
Communications HQ
Jian Xu
President and CEO,
OMRON (CHINA)
Kenji Eda
Senior General Manager,
Global Procurement and Quality
Management HQ
Shinji Fukui
Senior General Manager,
Technology Development Division HQ,
Industrial Automation Company
Seiji Takeda
General Manager,
Corporate Planning Dept.,
Global Strategy HQ
Taisuke Tateishi
Senior General Manager,
Energy Solutions Business HQ,
OMRON SOCIAL SOLUTIONS
Katsuhiro Shikata
President and CEO,
OMRON FIELD ENGINEERING
Virendra Shelar
President, OMRON MANAGEMENT
CENTER OF ASIA PACIFIC
and General Manager, Global Human
Resource Strategy Dept.
Masayuki Yamamoto
Senior General Manager,
Strategy Planning Division HQ,
Industrial Automation Company
Robert Black
President, CEO and COO,
OMRON ELECTRONICS (USA),
Industrial Automation Company
Masahiko Ezaki
Senior General Manager of Business
Management Division HQ, Electronic
and Mechanical Components Company
Hidetaka Ishihara
Senior General Manager of Innovation
Exploring Initiative HQ
Hisako Takada
Senior General Manager of CEO Office
Motohiro Yamanishi
Senior General Manager of Product
Business Division HQ,
Industrial Automation Company
100
GovernanceOMRON Corporation Integrated Report 2021 Financial Results
Consolidated Earnings
During fiscal 2020, we began operating under an emergency response mode due to the COVID-19 pandemic, placing our
highest priorities on preventing the spread of infection and on business continuity. The business environment surrounding the
OMRON Group continued to present challenges due to the impact of the spread of COVID-19, beginning at the end of the
previous fiscal year. However, demand recovered globally through the second half of the fiscal year, driven by China. In this
environment, the Group demonstrated its responsiveness to changes, which it had cultivated over the years, while it accurately
seized business opportunities in an opportunistic manner. As a result, net sales declined slightly to ¥655.5 billion, down 3.3%
from the prior fiscal year. In addition, gross profit margin rose to a record high of 45.5%, up 0.7 points from the prior fiscal year,
despite the challenging business environment presented by the COVID-19 crisis, reflecting the results of Solution oriented
sales, variable cost reductions and other efforts we have pursued for some time. Further, operating income increased
significantly to ¥62.5 billion, up 14.1% from the prior fiscal year, as a result of implementing fixed cost reductions on a scale of
¥20.0 billion a year.
Consolidated Statements of Income
Net Sales
OMRON Group net sales for fiscal 2020 amounted to ¥655.5 billion, down 3.3% from the prior fiscal year. Our Industrial
Automation Business (IAB) and Electronic and Mechanical Components Business (EMC) recorded lower sales compared to the
prior fiscal year due to the impact of the spread of COVID-19 during the first half of the fiscal year, despite a recovery over the
second half of the fiscal year by accurately capturing changes in demand. Sales of the Social Systems, Solutions and Service
Business (SSB) fell significantly compared to the prior fiscal year as a result of ongoing restrained investment by customers
associated with our Public Transportation (Automated Ticket Gates, Ticket Vending Machines) Systems. In the Healthcare
Business (HCB), global demand for blood pressure monitors and thermometers rose in response to rising awareness of health
management among consumers. As a result of our quick response to these rising demands, net sales increased significantly
compared to the prior fiscal year.
Gross Profit Margin, SG&A Expenses, and R&D Expenses
Gross profit margin rose to a record high of 45.5%, up 0.7 points from the prior fiscal year, despite the challenging business
environment presented by the COVID-19 crisis, reflecting the results of Solution oriented sales, variable cost reductions and
other efforts we have pursued for some time. Selling, general and administrative expenses were down ¥10.3 billion to ¥192.7
billion, mainly due to company-wide efforts to control and reduce fixed costs. Research and development expenses fell ¥2.8
billion year on year to ¥43.2 billion, mainly due to detailed selection in research and development projects.
Operating Income and Net Income Attributable to OMRON Shareholders
OMRON Group operating income for the year was ¥62.5 billion (14.1% increase), while our operating income margin was 9.5%
(1.5 points increase), due to significantly improved gross profit margin and implementing fixed cost reductions on a scale of
¥20.0 billion a year. Net income attributable to OMRON shareholders came in at ¥43.3 billion (42.2% decrease). Net income
attributable to OMRON shareholders of ¥74.9 billion for the prior fiscal year included net income from discontinued operations
including gain on sale of the Automotive Electronic Components Business. Excluding this effect, the change in net income
attributable to OMRON shareholders was an increase of 10.6% year on year.
Fiscal 2020 in Review
Net sales
Gross profit margin
¥655.5billion
YoY
-3.3%
45.5%
YoY
+0.7%pt
Operating income
Net income attributable to OMRON shareholders
¥62.5billion
YoY
+14.1%
¥43.3billion
YoY
-42.2%
Average exchange rate during the period
USD ¥105.8 EUR ¥123.2 RMB ¥15.5
101
Financial InformationOMRON Corporation Integrated Report 2021 Results of Each Business Segment
Industrial Automation Business (IAB)
During fiscal 2020, in the automotive industry, the IAB continued to face challenging conditions due to production cutbacks and
revised investments due to the impact of the spread of COVID-19. Meanwhile, capital expenditure for semiconductors and
rechargeable batteries in the digital industry became active, and particularly in China, demand for capital expenditure continued
to be strong. In addition, demand for capital expenditure in connection with masks and other products related to measures
against COVID-19 grew globally. We leveraged local sales and systems engineering human resources which we have been
strengthening, to accurately capture these rising demands, leading to a recovery in net sales over the second half of the fiscal
year. However, net sales for the fiscal year were lower year on year. While net sales decreased year on year, operating income
increased due to our actions to increase added value and control fixed costs. As a result, net sales for fiscal 2020 totaled ¥346.4
billion, down 1.8% from the prior fiscal year, and operating income totaled ¥58.8 billion, up 9.7% from the prior fiscal year.
Electronic and Mechanical Components Business (EMC)
During fiscal 2020, demand declined significantly at the beginning of the fiscal year due to the impact of lockdowns under
COVID-19 crisis. The decline in demand reached a low point in the second quarter as customers resumed production and sales
activities. Since then, demand has been on a recovery track globally, most notably in China. In addition to responding quickly to
these changes in demand, we launched new products in focused markets such as power tools and PC peripherals, where
demand increased due to the COVID-19 crisis. As a result, while net sales in the second half of the fiscal year recovered to the
level on par with the same period in the prior fiscal year, net sales for the fiscal year were lower year on year due to the
significant impact of the decline in sales at the beginning of the fiscal year. Operating income rose significantly year on year,
owing to our efforts to control fixed costs and implement structural reforms, in addition to the recovery in net sales. As a result,
net sales to external customers for fiscal 2020 totaled ¥86.0 billion, down 2.6% from the prior fiscal year, and operating income
totaled ¥3.0 billion, up 222.7% from the prior fiscal year.
Social Systems, Solutions and Service Business (SSB)
During fiscal 2020, demand was firm for upgrades in our Traffic and Road Management Systems Business. Meanwhile, the
Public Transportation Systems Business experienced the impact of ongoing restrained investment by customers. Our Energy
Solutions Business also experienced weak sales of storage battery systems due to the impact of voluntary restraints on social
activities. As a result, net sales fell sharply compared to the prior fiscal year. Despite efforts to control fixed costs and improve
added value, operating profit declined significantly compared to the prior fiscal year due to a sizable decrease in net sales. As a
result, net sales for fiscal 2020 totaled ¥95.7 billion, down 17.5% from the prior fiscal year, and operating income totaled ¥5.7
billion, down 47.5% from the prior fiscal year.
Healthcare Business (HCB)
During fiscal 2020, global demand for blood pressure monitors and thermometers rose in response to rising awareness of
health management among consumers in response to the spread of COVID-19. In addition, the impact of lockdowns and
curfews further accelerated the shift of consumer purchasing behavior to the online market. In response to these changes in
demand, we strengthened our product supply capacity by quickly establishing a system to increase production. We also
strengthened sales activities through online channels. These efforts combined led to a significant increase in net sales
compared to the prior fiscal year. Operating income rose significantly compared to the prior fiscal year due to a large increase in
net sales, as well as our actions to control fixed costs and increase added value. As a result, net sales for fiscal 2020 totaled
¥123.1 billion, up 9.9% from the prior fiscal year, and operating income totaled ¥20.6 billion, up 52.3% from the prior fiscal year.
102
Financial InformationOMRON Corporation Integrated Report 2021 Review of Financial Condition
OMRON Group continued to invest actively in sustainable corporate value improvements and conduct ROIC management
focused on capital efficiency. Total assets at the end of fiscal 2020 amounted to ¥820.4 billion, an increase of ¥62.3 billion
compared to the end of the prior fiscal year, mainly due to an increase in cash and cash equivalents. Total liabilities decreased
¥14.5 billion to ¥211.0 billion, mainly due to a decrease in reserve for termination and retirement benefits stemming from
improved investment performance results in our corporate pension plan. Total net assets increased ¥76.8 billion compared to
the end of the prior fiscal year to ¥609.4 billion, mainly due to the recording of net income attributable to OMRON shareholders.
Shareholders’ equity increased ¥76.5 billion compared to the end of the prior fiscal year to ¥606.9 billion. As a result, our
shareholders’ equity ratio was 74.0%, compared to 70.0% at the end of the prior fiscal year, maintaining a strong financial
footing. Further, ROE (return on equity) and ROIC (return on invested capital), two important financial indicators, have remained
above our expected cost of capital of 6%.
Capital Expenditures
During fiscal 2020, we strictly selected essential capital expenditure, including enhancement of production equipment and base
investments with the aim of creating future growth, as well as the renewal of IT infrastructure. As a result, total capital
investments of ¥24.0 billion were made, representing a 27.6% decrease compared to the prior fiscal year.
Cash Flows
Net cash provided by operating activities amounted to ¥93.8 billion, an increase in cash provided of ¥4.0 billion compared to the
prior fiscal year. This result was mainly due to the recording of net income, as well as decreases in notes and accounts
receivable-trade and inventories, as a result of having secured sufficient funds on hand in each area globally to prepare for
sudden changes in business environment and conducted business operations with strengthened management of working
capital such as notes and accounts receivable-trade and inventories. Net cash used in investing activities was ¥14.8 billion,
mainly due to an additional investment in AliveCor, Inc. in the U.S. in the Healthcare Business (HCB) and the transfer of all
shares of Hitachi-OMRON Terminal Solutions, Corp., an equity method affiliate. (When excluding net proceeds from sale and
acquisition of businesses, etc. of ¥10.3 billion, net cash used in investing activities was ¥25.1 billion, a decrease in cash used of
¥8.5 billion compared to the prior fiscal year.) Free cash flows amounted to ¥79.0 billion, a decrease of ¥39.4 billion compared
to the prior fiscal year (when excluding net proceeds from sale and acquisition of businesses, etc., an increase of ¥12.5 billion
compared to the prior fiscal year). Net cash used in financing activities was ¥20.4 billion, a decrease in net cash used of ¥9.1
billion compared to the prior fiscal year. This result was mainly due to dividends paid. In addition to the preceding, changes in
foreign currency translation were factors having an impact on cash and cash equivalents. As a result, the balance of cash and
cash equivalents at March 31, 2021 amounted to ¥250.8 billion, an increase of ¥65.2 billion compared to the end of the prior
consolidated fiscal year.
Dividend Policy
Our basic policy for profit distribution is to aim for sustainable corporate value growth, and thus OMRON prioritizes investment
necessary for future business expansion. These investments include research and development, capital investments, mergers
and acquisitions, and other investments for future growth. Having secured internal reserves, the Company makes decisions
regarding ongoing profit distribution to shareholders in consideration of capital efficiency. The Company has established and
applied a guideline of approximately 30% in payout ratio and approximately 3% of DOE for the periods covered by the VG2.0
medium-term management plan. Our full-year dividend for fiscal 2020 was ¥84 per share, in view of business performance,
DOE standards and past dividend levels, in order to secure stable and continuous dividends. As a result, our dividend payout
ratio was 39.1%, and our dividend on equity ratio (DOE) was 3.0%.
Changes in Shareholder Returns
(Yen)
100
75
50
25
0
Dividend per share (Left vertical axis)
Dividend payout ratio (Right vertical axis)
Total return ratio (Right vertical axis)
37.6
28
11
27.0
25.3
37
12
53
13
62.7
31.1
68
49.1
25.0
71
79.5
32.2
84
47.7
23.0
84
(%)
80
60
40
20
0
42.642.6
39.139.1
84
20
31.6
68
16
48.2
25.6
76
17
¥14.3 billion
14
¥15.0 billion
15
¥15.0 billion
18
FY
19
¥25.7 billion ¥18.6 billion ¥14.0 billion
Total amount of treasury stock acquired
103
Financial InformationOMRON Corporation Integrated Report 2021 Outlook for Fiscal 2021
Fiscal 2021 is an important year to begin taking actions toward our next long-term vision. It will also be a year in which we see
an acceleration in transition to the new social and economic systems of the post-COVID era. The OMRON Group believes this
period of change will be the perfect opportunity to hasten the creation of new value and evolve our work style and operations.
Therefore, our policies will consist of “maximizing the responsiveness to changes” and “accelerating transformation”. In
“maximizing the responsiveness to changes”, we plan to leverage the assets that we have cultivated through our existing
businesses and to seize business opportunities more swiftly than ever to achieve sales growth. In fiscal 2021, we will continue
to prepare for various risks. At the same time, we will ensure that we seize business opportunities created by the recovery of
economic activity and the acceleration of innovation, linking these opportunities to growth.
In “accelerating transformation”, we will undertake the following three actions, looking ahead to our next long-term vision.
The first action is “business model transformation and the challenge for new businesses creation”. By transforming our
business models through i-BELT, a data utilization service at manufacturing sites, remote medical services, and other means,
we plan to deepen relationship with existing customers and develop new customers, thereby growing sales. We will also
identify emerging social issues and new business themes addressable by the OMRON Group, creating and implementing new
business concepts. The second action is “transformation of our operations”. Here, we intend to shift resources to high-value-
added operations, such as solutions and services that support new business models. We will work to advance the business
process improvements and other actions aimed at business continuity under the COVID-19 crisis to enhance productivity and
efficiency gains. To support these efforts, we will continue to strengthen our group IT infrastructure, which we have already
been pursuing for some time. The third action is “transformation of work styles and human resources management”. The
OMRON Group intends to build a structure that allows it to use human resources information formerly managed locally by each
business and area on a global basis. In addition, we will actively recruit specialized human resources from outside our
organization to create a structure for taking on the challenge of solving social issues as a global mixed team across countries
and areas.
We assume that the business environment during fiscal 2021 will continue to benefit from a recovery in the global economy.
Specifically, we expect to see ongoing investments to increase semiconductor manufacturing capacity worldwide. In addition,
we expect demand for capital expenditure related to electric vehicles (EV) and renewable energy to increase due to the growing
social demand for CO2 reduction. We believe demand for health equipment in the healthcare industry, including blood pressure
monitors and other products, will remain strong globally, as the population continues to age and people become more health
conscious.
We will seize on these business opportunities in a steady manner, and we expect to see an increase in sales across all business
segments in fiscal 2021. Although we will factor in the impact of price hikes for certain raw materials, we plan to continue our
efforts to increase added value by strengthening our product competitiveness and engage in restructuring, leading to improved
gross profit margin. While SG & A expenses and research and development expenses will rise as a result of an increased
intensity in activities, we will improve productivity through the continuation of new work styles implemented during the
COVID-19 crisis.
Net sales
Gross profit
(Gross profit margin)
Operating income
(Operating income margin)
Income before income taxes from continuing operations
¥65.1 billion
Net income attributable to OMRON shareholders
¥43.3 billion
Average USD exchange rate
Average EUR exchange rate
Average RMB exchange rate
¥105.8
¥123.2
¥15.5
FY2020
FY2021
¥655.5 billion
¥700.0 billion
¥298.4 billion
(45.5%)
¥62.5 billion
(9.5%)
¥325.0 billion
(46.4%)
¥70.0 billion
(10.0%)
¥67.0 billion
¥48.0 billion
¥108.0
¥128.0
¥16.5
Change
+6.8%
+8.9%
[+0.9%pt]
+12.0%
[+0.5%pt]
+2.9%
+10.8%
+¥2.2
+¥4.8
+¥1.0
104
Financial InformationOMRON Corporation Integrated Report 2021 Outlook for Each Business Segment
Industrial Automation Business (IAB)
For fiscal 2021, in the digital industry, we expect capital expenditure in semiconductors and rechargeable batteries to continue
to be strong, particularly in China and South Korea. In the automotive industry, we expect to see a gradual recovery, especially
for EV/ADAS. We expect to see an increase in capital expenditure related to food and daily goods for environment-related
factors, including new plastic-free materials. In response to these changes, we continue to intensify our efforts to offer control
applications for solving issues in manufacturing floors. As well, we will steadily capture the increasingly sophisticated needs for
automation and labor savings, projecting net sales for fiscal 2021 to increase to ¥375.0 billion, up 8.2% from the prior fiscal
year. Although we will continue to invest in strengthening our abilities to provide solutions, we expect operating income to
increase to ¥63.0 billion, up 7.2% from the prior fiscal year, due to higher sales and improved productivity.
Electronic and Mechanical Components Business (EMC)
For fiscal 2021, we expect to see a continued moderate recovery on a global scale, mainly driven by consumer demand in China
and demand for automobiles. In this context, we aim to steadily capture growing demand through actions that include supply
chain management optimization. We expect net sales for fiscal 2021 to increase to ¥94.0 billion, up 9.3% from the prior fiscal
year, as we strengthen distinctive applications and products that meet the emerging needs in our focus industries. Although we
will factor in the impact of soaring raw material prices, we expect operating income to significantly increase to ¥4.5 billion, up
51.9% from the prior fiscal year, due to increased sales and our actions to improve added value.
Social Systems, Solutions and Service Business (SSB)
For fiscal 2021, we expect to see ongoing constrained investment among customers in our Public Transportation System
Business due to the impact of lower travel revenues. In our Energy Solutions Business, on the other hand, we project an
increase in demand for storage battery systems and other products due to the growing need to reduce CO2 emissions and
prepare for disasters. Further, we expect our Engineering Business to see growing demand for industrial-use renewable energy
equipment. We will provide solutions that combine products and services to meet these demands. As a result of these efforts,
we expect net sales for fiscal 2021 to increase to ¥96.0 billion, up 0.4% from the prior fiscal year. We expect operating income
to significantly increase to ¥7.0 billion, up 23.0% from the prior fiscal year, due to our actions to increase added value etc., in
addition to an increase in sales.
Healthcare Business (HCB)
For fiscal 2021, we forecast continued strong demand on a global basis in connection with a growing awareness of in-home
health management. Although we do expect a reactionary decrease in demand for thermometers after the surge caused by the
spread of COVID-19, we assume that blood pressure monitor demand will remain strong due to increased demand for blood
pressure management related to chronic diseases. In China, one of the largest market for blood pressure monitors, we plan to
build a network infrastructure in collaboration with doctors and pharmacies to provide products and services for patients with
chronic diseases. As a result of these efforts, we expect net sales for fiscal 2021 to increase to ¥133.0 billion, up 8.1% from
the prior fiscal year. Although we will continue investments to expand remote medical services, we expect operating income to
increase to ¥22.5 billion, up 9.4% from the prior fiscal year, due to increased sales and improved productivity.
105
Financial InformationOMRON Corporation Integrated Report 2021 Consolidated Financial Statements
Consolidated Balance Sheets
OMRON Corporation and Subsidiaries
March 31, 2020 and 2021
ASSETS
Current Assets:
(Millions of yen)
(Millions of yen)
FY2019
FY2020
LIABILITIES AND SHAREHOLDERS’ EQUITY
FY2019
FY2020
Current Liabilities:
Cash and cash equivalents
¥ 185,533
¥ 250,755
Notes and accounts payable - trade
¥ 64,496
¥ 69,561
Notes and accounts receivable - trade
134,786
135,161
Accrued expenses
Allowance for doubtful receivables
(759)
(756)
Income taxes payable
Inventories
104,301
103,265
Short-term operating lease liabilities
Assets held for sale
Other current assets
441
—
Other current liabilities
22,837
26,007
Total Current Liabilities
151,299
161,370
Total Current Assets
447,139
514,432
Property, Plant and Equipment:
Deferred Income Taxes
37,179
2,516
11,070
36,038
44,441
3,504
11,179
32,685
1,717
40,236
19,820
12,463
1,671
7,598
27,709
12,673
Land
Buildings
Machinery and equipment
Construction in progress
20,446
129,110
147,038
5,467
19,778
124,404
153,142
3,281
Total
302,061
300,605
Termination and Retirement Benefits
Long-Term Operating Lease Liabilities
Other Long-Term Liabilities
Total Liabilities
225,535
211,021
Accumulated depreciation
(187,535)
(187,577)
Shareholders’ Equity:
Net Property, Plant and Equipment
114,526
113,028
Capital
64,100
64,100
Investments and Other Assets:
Right-of-use assets under operating leases
Goodwill
Investments in and advances to affiliates
Investment securities
Leasehold deposits
Prepaid benefit costs
Deferred income taxes
Other assets
30,327
38,568
29,251
25,782
7,486
—
37,416
27,629
38,153
39,160
13,159
33,423
7,675
6,736
24,179
30,434
Common stock
Authorized: 487,000,000 shares in FY2019
487,000,000 shares in FY2020
Issued: 206,244,872 shares in FY2019
206,244,872 shares in FY2020
Capital surplus
Legal reserve
Retained earnings
100,521
101,403
20,981
22,931
451,768
476,185
Accumulated other comprehensive income (loss)
(83,606)
(32,945)
Treasury stock
(23,349)
(24,816)
Total Investments and Other Assets
196,459
192,919
4,306,748 shares in FY2019
4,574,294 shares in FY2020
Total Shareholders’ Equity
530,415
606,858
Noncontrolling Interests
Total Net Assets
2,174
2,500
532,589
609,358
Total
¥ 758,124
¥ 820,379
Total
¥ 758,124
¥ 820,379
106
Financial InformationOMRON Corporation Integrated Report 2021
Consolidated Statements of Income
OMRON Corporation and Subsidiaries
Years ended March 31, 2019, 2020 and 2021
Net sales
Costs and Expenses:
Cost of sales
Selling, general and administrative expenses
Research and development expenses
Other expenses, net
Total
Income before Income Taxes and Equity in Earnings of Affiliates
Income Taxes
Equity in earnings of affiliates
Net Income from Continuing Operations
Net Income from Discontinued Operations
Net Income
Net Income Attributable to Noncontrolling Interests
FY2018
¥ 732,581
FY2019
¥ 677,980
(Millions of yen)
FY2020
¥ 655,529
407,097
208,895
49,335
1,342
666,669
65,912
17,016
1,578
47,318
7,673
54,991
668
374,278
202,954
45,988
2,924
626,144
51,836
11,270
963
39,603
35,732
75,335
440
357,178
192,687
43,184
(2,609)
590,440
65,089
15,093
6,098
43,898
—
43,898
591
Net Income Attributable to OMRON Shareholders
¥ 54,323
¥ 74,895
¥ 43,307
FY2018
FY2019
FY2020
(Yen)
Per Share Data:
Net Income Attributable to OMRON Shareholders:
Net Income Attributable to OMRON Shareholders from Continuing Operations
Net Income Attributable to OMRON Shareholders from Discontinued Operations
Basic
Diluted
¥ 223.95
36.84
¥ 260.78
—
¥ 191.00
174.26
¥ 365.26
—
¥ 214.72
—
¥ 214.72
—
* The consolidated statement of income for FY2018 has been reclassified in line with the classification change of the Automotive Electronic Components Business (AEC) to
discontinued operations.
107
Financial InformationOMRON Corporation Integrated Report 2021
Consolidated Statements of Comprehensive Income
OMRON Corporation and Subsidiaries
Years ended March 31, 2019, 2020 and 2021
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)
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
Comprehensive Income Attributable to Noncontrolling Interests
Comprehensive Income Attributable to OMRON Shareholders
FY2018
¥ 54,991
(4,419)
(109)
(4,528)
(11,419)
2,556
(8,863)
32
(73)
(41)
(13,432)
41,559
651
¥ 40,908
FY2019
¥ 75,335
(23,674)
(119)
(23,793)
7,033
3,365
10,398
77
(160)
(83)
(13,478)
61,857
368
¥ 61,489
(Millions of yen)
FY2020
¥ 43,898
23,138
310
23,448
24,630
3,053
27,683
(629)
295
(334)
50,797
94,695
727
¥ 93,968
108
Financial InformationOMRON Corporation Integrated Report 2021
Consolidated Statements of Shareholders’ Equity
OMRON Corporation and Subsidiaries
Years ended March 31, 2019, 2020 and 2021
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, 2018
213,958,172
¥ 64,100
¥ 99,588
¥ 19,940
¥ 390,950
¥ (49,359)
¥ (19,689)
¥ 505,530
¥ 1,856
¥ 507,386
Cumulative impact of the
application of FASB
Accounting Standards
Update 2016-01 and
2018-03*1
Balance, April 1, 2018
(reflecting application of
FASB Accounting
Standards Update 2016-01
and 2018-03
Net Income
Cash dividends paid to
OMRON Corporation
shareholders, ¥84 per
share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
and other
Stock-based payment
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury
stock
Net Income
Cash dividends paid to
OMRON Corporation
shareholders, ¥84 per
share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
and other
Change in shareholders’
equity due to decrease in
consolidated subsidiaries
Stock-based payment*2
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury
stock
Cancellation of treasury
stock
7,650
(7,426)
224
224
213,958,172
64,100
99,588
19,940
398,600
(56,785)
(19,689)
505,754
1,856
507,610
54,323
(17,398)
645
1,886
(1,886)
54,323
668
54,991
(17,398)
(17,398)
—
—
645
—
(343)
(343)
(65)
(65)
645
—
(13,415)
(13,415)
(17)
(13,432)
(25,697)
(25,697)
74,895
(17,107)
2
(74)
360
(2,386)
2,460
1,541
(1541)
74,895
(17,107)
—
2
—
360
—
2,099
440
(25,697)
506,311
75,335
(17,107)
(293)
(293)
2
—
360
—
(13,406)
(13,406)
(72)
(13,478)
(18,541)
(18,541)
(40,578)
40,578
—
(18,541)
—
Balance, March 31, 2019
213,958,172
64,100
100,233
21,826
433,639
(70,200)
(45,386)
504,212
Balance, March 31, 2020
206,244,872
¥ 64,100
¥ 100,521
¥ 20,981
¥ 451,768
¥ (83,606)
¥ (23,349)
¥ 530,415
¥ 2,174
¥ 532,589
Net Income
Cash dividends paid to
OMRON Corporation
shareholders, ¥84 per
share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
and other
Stock-based payment*3
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury
stock
43,307
(16,940)
0
882
1,950
(1,950)
43,307
591
43,898
(16,940)
(16,940)
—
0
882
—
50,661
(1,467)
(401)
(401)
0
882
—
50,797
(1,467)
136
50,661
(1,467)
Balance, March 31, 2021
206,244,872
¥ 64,100
¥ 101,403
¥ 22,931
¥ 476,185
¥ (32,945)
¥ (24,816)
¥ 606,858
¥ 2,500
¥ 609,358
*1 Represents the impact of applying FASB Accounting Standards Update 2016-01 and 2018-03.
*2 Includes ¥(275) million, the amount of decrease in capital surplus due to changes in the estimates of stock-based payment.
*3 Includes ¥309 million, the amount of increase in capital surplus due to changes in the estimates of stock-based payment.
109
Financial InformationOMRON Corporation Integrated Report 2021 Consolidated Statements of Cash Flows
OMRON Corporation and Subsidiaries
Years ended March 31, 2019, 2020 and 2021
Operating Activities:
Net Income
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization
Net loss (gain) on sale and disposals of property, plant, and equipment
Impairment losses on long-lived assets
Net loss on valuation of investment securities
Net loss on sale of investment securities
Termination and Retirement Benefits
Deferred income taxes
Equity in earnings of affiliates
Gain on sales of business
Changes in assets and liabilities:
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase in other assets
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
Increase in investments in affiliates
Proceeds from sale of business, net of cash paid
Acquisition of business, net of cash acquired
Other, net
Net Cash Provided by (Used in) Investing Activities
Financing Activities:
Net borrowings (repayments) of short-term debt
Dividends paid by the Company
Dividends paid to 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
Cash and Cash Equivalents at End of the Year
Cash and Cash Equivalents from Discontinued Operations at End of the Year
FY2018
FY2019
FY2020
(Millions of yen)
¥ 54,991
¥ 75,335
¥ 43,898
30,459
(1,098)
196
563
—
3,818
(383)
1,578
(407)
(534)
(3,491)
(294)
(5,401)
(2,775)
(6,851)
874
16,254
71,245
465
(602)
(39,045)
(193)
3,475
(498)
1,817
(830)
454
(34,957)
2,109
(16,776)
(343)
(25,716)
(57)
(40,783)
1,722
(2,773)
113,023
110,250
6,400
28,605
(1,487)
498
1,170
43
(436)
(125)
963
(51,450)
12,944
10,704
(6,422)
(1,319)
15,614
3,570
1,600
14,452
89,787
1,423
(2,344)
(37,629)
62
4,565
(2,231)
64,460
—
333
28,639
6,365
(17,250)
(293)
(18,571)
319
(29,430)
(13,713)
75,283
110,250
185,533
—
22,756
(325)
1,976
(7,615)
—
(617)
1,164
6,098
—
3,893
5,425
955
6,237
833
5,301
3,852
49,933
93,831
751
(1,057)
(26,662)
(189)
2,069
7,850
2,453
—
0
(14,785)
(1,587)
(16,952)
(352)
(1,471)
10
(20,352)
6,528
65,222
185,533
250,755
—
Cash and Cash Equivalents from Continuing Operations at End of the Year
¥ 103,850
¥ 185,533
¥ 250,755
* Consolidated statements of cash flows consist of cash flows from continuing operations and cash flows from discontinued operations. We have not presented cash flows separately for
discontinued operations.
110
Financial InformationOMRON Corporation Integrated Report 2021
11-Year Financial and Non-Financial Highlights
OMRON Corporation and Subsidiaries
Long-Term Management Strategy
Grand Design 2010 (GD2010)
Financial Indicators:
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 provided by (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) (Yen)
Shareholders’ equity
Cash dividends (Note 3) (Yen)
Dividend payout ratio
Other Financial Data:
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 Indicators:
Number of employees
Ratio of overseas employees to total employees
Ratio of non-Japanese in key managerial positions overseas (Note 5)
Ratio of women in managerial roles (OMRON Group in Japan) (Note 6)
Number of women in managerial roles
Ratio of employees with disabilities (OMRON Group in Japan) (Note 7)
Number of patents held (Note 8)
Environmental contribution (thousand ton-CO2)
CO2 emissions of production sites (thousand ton-CO2)
Net sales to CO2 emissions (million yen / ton-CO2)
Greenhouse gas emissions (thousand ton-CO2)
Note: 1. EBITDA = Operating income + Depreciation and amortization
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
Value Generation 2020 (VG2020)
¥617,825
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%
—
—
—
2.2%
5,452
193
187
3.31
—
¥619,461
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%
34%
1.4%
22
2.2%
5,959
189
193
3.21
—
¥650,461
241,507
152,676
43,488
45,343
67,795
30,203
53,058
(28,471)
24,587
(18,550)
573,637
55,708
5,570
366,962
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%
36%
1.5%
23
2.2%
6,448
313
203
3.21
—
¥772,966
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%
42%
1.8%
27
2.4%
6,635
661
215
3.60
—
¥847,252
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
489,769
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%
42%
1.9%
30
2.4%
7,194
851
221
3.83
—
¥833,604
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
444,718
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%
46%
2.3%
36
2.4%
7,686
508
202
4.12
—
¥794,201
312,161
193,093
50,539
68,529
97,495
45,987
77,875
(15,041)
62,834
(15,012)
697,701
126,026
156
469,029
215.1
2,193.7
68
31.6%
39.3%
8.6%
12.2%
10.3%
10.1%
67.2%
31.6%
25,692
28,966
58.4%
36,008
68.3%
49%
3.3%
53
2.5%
8,224
593
202
3.94
250
¥732,306
327,585
201,777
48,622
77,186
101,501
63,159
73,673
(55,842)
17,831
(33,082)
744,952
106,223
298
505,530
296.9
2,400.4
76
25.6%
44.7%
10.5%
14.6%
12.7%
13.0%
67.9%
48.2%
33,027
24,315
57.3%
36,193
68.1%
49%
3.6%
59
2.6%
8,774
659
204
4.22
271
¥732,581
325,484
208,895
49,335
67,254
92,609
54,323
71,245
(34,957)
36,288
(40,783)
749,878
103,850
2,086
504,212
260.8
2,455.2
84
32.232.2%
44.4%
9.2%
12.6%
10.6%
10.8%
67.2%
79.5%
35,661
25,355
56.5%
35,090
67.6%
62%
5.2%
85
2.5%
9,782
1,055
193
4.47
235
(Millions of yen)
¥655,529
298,351
192,687
43,184
62,480
85,236
43,307
93,831
(14,785)
79,046
(20,352)
820,379
250,755
0
606,858
214.7
3,009.2
84
39.1 %
45.5 %
9.5 %
13.0 %
7.8 %
7.6 %
74.0 %
42.6 %
23,959
22,756
57.7 %
28,254
62.9 %
75 %
6.7 %
102
3.0 %
11,037
826
106
6.16
124
¥677,980
303,702
202,954
45,988
54,760
80,466
74,895
89,787
28,639
118,426
(29,430)
758,124
185,533
1,593
530,415
365.3
2,626.6
84
23.0%
44.8%
8.1%
11.9%
14.1%
14.5%
70.0%
47.7%
33,110
25,706
54.1%
28,006
62.2%
70%
5.9%
90
2.8%
10,087
971
135
5.02
166
2. Free cash flow = Net cash provided by operating activities + Net cash provided by (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. The ratio of local employees to the number of important positions determined by OMRON depending on the size of the overseas OMRON Group companies, concurrent positions for
governance and development positions are excluded.
6. To date, the ratio of women in managerial roles (OMRON Group in Japan) has been expressed as the result for the fiscal year under review as of April 20 of that year (the date on which job
titles reflecting the OMRON Group’s human resource evaluations for the previous year took effect). This has been changed to express the ratio as the result for the previous fiscal year (in this
report, the ratio as of April 20, 2021 is expressed as the result for fiscal 2020). In accordance with this change, the expressions of the ratios of previous fiscal years have also been
retroactively changed in this format.
7. Figures represent results as of June 20.
For companies subject to the Act on Employment Promotion etc. of Persons with Disabilities.
Employment rate calculation is based on the Act on Employment Promotion etc. of Persons with Disabilities.
8. Patent information is as of March 31 each year.
111
Financial InformationOMRON Corporation Integrated Report 2021
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
Value Generation 2020 (VG2020)
Selling, general and administrative expenses (excl. R&D expenses)
Net income (loss) attributable to OMRON shareholders
Net cash provided by operating activities
Net cash provided by (used in) investing activities
Free cash flow (Note 2)
Net cash provided by (used in) financing activities
Financial Indicators:
Operating Results:
Net sales
Gross profit
R&D expenses
Operating income
EBITDA (Note 1)
Cash Flows:
Financial Position:
Total assets
Cash and cash equivalents
Total interest-bearing liabilities
Total shareholders’ equity
Per Share Data:
Shareholders’ equity
Cash dividends (Note 3) (Yen)
Dividend payout ratio
Other Financial Data:
Gross profit margin
Operating income margin
EBITDA margin
Net income (loss) attributable to OMRON shareholders (EPS) (Yen)
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 Indicators:
Number of employees
Ratio of overseas employees to total employees
Ratio of non-Japanese in key managerial positions overseas (Note 5)
Ratio of women in managerial roles (OMRON Group in Japan) (Note 6)
Number of women in managerial roles
Ratio of employees with disabilities (OMRON Group in Japan) (Note 7)
Number of patents held (Note 8)
Environmental contribution (thousand ton-CO2)
CO2 emissions of production sites (thousand ton-CO2)
Net sales to CO2 emissions (million yen / ton-CO2)
Greenhouse gas emissions (thousand ton-CO2)
¥617,825
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%
—
—
—
2.2%
5,452
193
187
3.31
—
¥619,461
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%
34%
1.4%
22
2.2%
5,959
189
193
3.21
—
¥650,461
241,507
152,676
43,488
45,343
67,795
30,203
53,058
(28,471)
24,587
(18,550)
573,637
55,708
5,570
366,962
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%
36%
1.5%
23
2.2%
6,448
313
203
3.21
—
¥772,966
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%
42%
1.8%
27
2.4%
6,635
661
215
3.60
—
¥847,252
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
489,769
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%
42%
1.9%
30
2.4%
7,194
851
221
3.83
—
¥833,604
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
444,718
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%
46%
2.3%
36
2.4%
7,686
508
202
4.12
—
¥794,201
312,161
193,093
50,539
68,529
97,495
45,987
77,875
(15,041)
62,834
(15,012)
697,701
126,026
156
469,029
215.1
2,193.7
68
31.6%
39.3%
8.6%
12.2%
10.3%
10.1%
67.2%
31.6%
25,692
28,966
58.4%
36,008
68.3%
49%
3.3%
53
2.5%
8,224
593
202
3.94
250
¥732,306
327,585
201,777
48,622
77,186
101,501
63,159
73,673
(55,842)
17,831
(33,082)
744,952
106,223
298
505,530
296.9
2,400.4
76
25.6%
44.7%
10.5%
14.6%
12.7%
13.0%
67.9%
48.2%
33,027
24,315
57.3%
36,193
68.1%
49%
3.6%
59
2.6%
8,774
659
204
4.22
271
¥732,581
325,484
208,895
49,335
67,254
92,609
54,323
71,245
(34,957)
36,288
(40,783)
749,878
103,850
2,086
504,212
260.8
2,455.2
84
32.232.2%
44.4%
9.2%
12.6%
10.6%
10.8%
67.2%
79.5%
35,661
25,355
56.5%
35,090
67.6%
62%
5.2%
85
2.5%
9,782
1,055
193
4.47
235
(Millions of yen)
¥655,529
298,351
192,687
43,184
62,480
85,236
43,307
93,831
(14,785)
79,046
(20,352)
820,379
250,755
0
606,858
214.7
3,009.2
84
39.1 %
45.5 %
9.5 %
13.0 %
7.8 %
7.6 %
74.0 %
42.6 %
23,959
22,756
57.7 %
28,254
62.9 %
75 %
6.7 %
102
3.0 %
11,037
826
106
6.16
124
¥677,980
303,702
202,954
45,988
54,760
80,466
74,895
89,787
28,639
118,426
(29,430)
758,124
185,533
1,593
530,415
365.3
2,626.6
84
23.0%
44.8%
8.1%
11.9%
14.1%
14.5%
70.0%
47.7%
33,110
25,706
54.1%
28,006
62.2%
70%
5.9%
90
2.8%
10,087
971
135
5.02
166
Indicates assurance performed by independent third party.
Indicates independent verification or review performed by a third party.
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.
Changes in Accounting Policies
With the company’s adoption of US GAAP in fiscal 2018, we have reclassified consolidated statements of income for fiscal years 2016 and later for presentation herein.
Financial Data Reclassification
The Automotive Electronics Components Business (AEC) was transferred, and the AEC business was classified as a “discontinued business.” Accordingly, some financial data for fiscal 2017
and 2018 have been reclassified.
112
Financial InformationOMRON Corporation Integrated Report 2021 Responsible Engagement with Our Stakeholders
As stated in our Sustainability Policy, OMRON cultivates strong relationships with our stakeholders through
responsible engagement. Relationship of trust through engagement with our stakeholders is an indispensable asset
for the sustainable growth of OMRON and an essential element for us to create social needs. We are committed to
responsible engagement with all of our stakeholders to sustainably improve our corporate value and solve social
issues through our business.
Stakeholders
Major Initiatives
Means of communications
Actual initiatives
Communication through sales
activities
Customer support
We conducted a joint development with our customers by utilizing 37
AUTOMATION CENTERs (ATC).
FY2020 results:
- We realized remote customer services on a global basis.
- We realized the exhibition tours using virtual space (in Japan: Tokyo and
Kariya, overseas: Spain, Singapore, North American areas, etc.).
We contributed to the improvement of our customers’ global competitiveness through
our 150 or more support networks in 40 countries around the world.
In the Healthcare Business, we set up a residential environment space for monitoring
and utilized the results to develop wheezing sensors.
User monitoring
Our wheezing sensor “WheezeScan” received the “Good Design Award” in
2020.
Exhibitions
Website
We enhanced the recognition of the OMRON brand through exhibition at China
International Import Expo (CIIE) 2020. Over 500 business opportunities were
created.
We enhanced our website to provide the latest information and services. We were
ranked No.1 overall in the BtoB site rankings for the fourteenth consecutive year.
Briefings on our purchasing policy
(Global Partner Conference)
We shared OMRON’s management policies and sustainable procurement policies
with major suppliers. We held one-on-one online meetings in FY2020.
Sustainability self-assessment
Assessment based on third-party
standards
We awarded or renewed green
supplier certification. During
Survey on conflict minerals
VOICE
(Global Employee Engagement
Survey)
“The KURUMAZA” meeting facilitates
direct communication between the
CEO and employees
“OMRON Principles Missionary
Dialogues” facilitate direct
communication between the
Chairman and employees
TOGA
(The OMRON Global Awards)
We asked suppliers to conduct self-assessment of compliance with the
Sustainable Procurement Guidelines. We confirmed the compliance status of 19
suppliers in Asia/Pacific that conducted the self-assessment in FY2020.
We conducted self-checks using the RBA* evaluation tool. We asked 69 suppliers
we identified as having sustainability risks to implement corrective actions.
*RBA: Responsible Business Alliance
“Green procurement” that helps reduce negative environmental impact
FY2020, we certified 92 more companies as green suppliers, and completed
assessments for a cumulative total of 3,026 companies. We proactively adopted
materials that do not contain hazardous chemical substances to help reduce
negative environmental impact in our supply chain.
We conducted surveys by using conflict minerals reporting template, the industry
standard, tracking upstream supply chain and implementing corrective actions.
We promoted procurement in a manner not to drive environmental destruction
and human rights violation.
We conducted an employee engagement survey to provide management with
feedback from all employees for solving issues. In FY2020, we conducted a survey
targeting all 28,006 employees of the OMRON Group (response rate 90%), and
identified management issues from 40,453 free comments. The Executive Council
discussed those issues to take action to solve them.
We organized a forum of communication between the CEO and employees for the
purposes of making the OMRON Principles the driver for OMRON’s growth.
Direct dialogues with top executives to have practicing the OMRON Principles
take root in the organization. In FY2020, a total of three dialogues were held
online, including overseas areas.
An event where teams that received Gold Awards gather at the Kyoto Head Office,
make presentations on their commitment to putting the OMRON Principles into
practice to the executives and employees, and receive applause.
In FY2020, TOGA was conducted as a hybrid of real and virtual events.
It drew a total of 15,000 entries from inside and outside the Company, making
more and more people inspired and resonated with practicing the OMRON
Principles.
Employee Health Management
Declaration “Boost5 Project”
We consider the health of our employees as an important management
foundation, and issued “The OMRON Health White Paper” based on the
visualization and analysis of the status of their health.
Presentation of business results/ESG
Meeting/briefings for individual
investors
We held meetings for presentation of business results (four times), briefings for
individual investors (twice), ESG Meeting, and meetings with institutional
investors (more than 570 times), entirely online.
As in the past, we conducted highly transparent IR activities.
Ordinary General Meeting of
Shareholders
Our Ordinary General Meeting of Shareholders was also streamed online. 72
shareholders attended the Meeting at the venue and 407 shareholders via the
internet. The percentage of voting rights exercised was 88.1%, hitting an all-time
high.
Publication of IR-related materials
We actively disclosed information through publication of IR-related materials,
including the Integrated Report and Shareholders’ News.
Planning and operation of the IR
website and sustainability website
We disclosed information including financial results related materials in a timely
manner. We provided a broader range of non-financial information.
Customers
We provide better
products and
services, with the aim
of solving social
issues through our
business.
Transaction
partners
We are engaged in
global procurement
activities and working
with our suppliers to
improve the level of
sustainability in our
supply chain.
Employees
We are committed to
creating a company
where employees can
unleash their abilities
and passions and
demonstrate them to
the fullest.
Shareholders
and investors
We are working to
engage in two-way
interactive
communication with
shareholders and
investors, with the
aim of “realizing
highly transparent
management.”
113
Corporate InformationOMRON Corporation Integrated Report 2021 Customer Engagement
OMRON Opens a Virtual Facility of its AUTOMATION CENTER, a
Showcase Facility for State-of-the Art FA Technology
OMRON has commenced a virtual tour to its AUTOMATION CENTER (ATC), a factory
automation technology center where customers join with OMRON to find solutions to their
manufacturing issues, and is working with customers to solve issues even as travel restrictions
are imposed due to COVID-19.
Allowing customers from around the world to view on their computers the virtual content that
features facilities and demonstration machines at the flagship ATC-TOKYO, the largest of 37
ATCs across the globe, this new service gives global customers the most realistic experiences
of OMRON’s state-of-the-art FA technology anytime, anywhere. Afterwards, customers can
also have a remote experience of many solution services including “demonstration/verification”
and “technology training” if they wish, leading to the creation of an environment similar to the
customers’ facilities.
Thanks to these processes, we have engaged with over 4,000 customers even under the state
of emergency, and are constantly creating innovative solutions.
Employee Engagement
“VOICE,” Our Employee Engagement Survey
Since 2016, OMRON has conducted the global employee engagement survey “VOICE” with
the aim of allowing management to listen directly to feedback from employees, identify
management issues, and take actions to solve them. OMRON focuses on organizational
management, systems, human resource development, organizational culture, etc. which make
up the foundations that support our business, and promotes to create a company where each
employee of the OMRON Group learns and embraces the OMRON Principles, strategies, and
Company goals, and can work with a focus on demonstrating their talents (with a high level of
engagement) to achieve them.
OMRON Principles Missionary Dialogues
Since FY2013, OMRON has worked on the “OMRON Principles Missionary Dialogues,” a forum
of communication between the Chairman of the Board and top executives from around the
world who will be the next generation of leaders. Through the Dialogues, participants
externalize in their own words what the practice of the OMRON Principles means to them. In
addition to deepening their own understanding of the OMRON Principles, they discuss how
they contribute to the Company’s growth and expand the circle of resonance for the OMRON
Principles among members in their own divisions. In FY2020, the Dialogues were held online
for the first time due to the COVID-19 crisis. Holding the Dialogues online allowed many
members to participate, and a wider variety of opinions were exchanged by utilizing the chat
function and other features.
Shareholder and Investor Engagement
Organized the General Meeting of Shareholders and ESG
Meeting under the COVID-19 crisis.
OMRON strives to raise corporate value through dialogues with shareholders and investors. In
FY2020, we held the 83rd Ordinary General Meeting of Shareholders and the ESG Meeting
online in order to prevent the spread of COVID-19. In the Ordinary General Meeting of
Shareholders, we were able to engage with a large number of shareholders and investors by
also utilizing the internet to broadcast the Meeting by relay while keeping the number of
shareholders attending the Meeting at the venue to a minimum. These efforts have resulted in
a 3.7 point increase in the percentage of voting rights exercised to a record high of 88.1%. In
the ESG Meeting, we gave an explanation on our business, our human resource initiatives
based on the OMRON Principles, our initiatives for sustainability and the environment, energy
solution business, and climate change. The Meeting was attended by 225 shareholders and
investors (including a record 170 investors), asking many questions and making comments.
The knowledge we received from these dialogues has led to improvements in our management
initiatives. OMRON will work to disclose information to our shareholders and investors in a
highly transparent manner even under the COVID-19 crisis.
3D Walkthrough Rendering of the Virtual
ATC-TOKYO
Virtual Tour Image of Demonstration
Machines
A poster calling on employees to
respond to VOICE
OMRON Principles Missionary Dialogues
The 83rd Ordinary General Meeting of
Shareholders
(June 23, 2020)
FY2020 ESG Meeting
(March 1, 2021)
114
Corporate InformationOMRON Corporation Integrated Report 2021 OMRON Recognitions
OMRON Innovations Recognized
Selected as Top 100 Global Innovator 2021
OMRON was selected for a fifth consecutive year from fiscal
2016 as a Top 100 Global Innovator, an award recognizing the
best 100 innovative companies and research institutes.
Coverage in Various Indexes
OMRON has been lauded by ESG assessment institutions around the world, leading to the inclusion of its stock in
ESG indexes in Japan and abroad. OMRON has been listed in the Dow Jones Sustainability Asia Pacific Index for the
eleventh consecutive year since 2010. We have also been listed for the fourth straight year on the Dow Jones
Sustainability World Index since FY2017. We have also been included for the seventh consecutive year in the MSCI
ESG Leaders Index from 2015 and for the sixth consecutive year in the FTSE4Good Index Series. We have also been
included in a range of other indexes.
ESG Indexes
With the commencement of ESG investing by the Japan Government Pension Investment Fund (GPIF), OMRON was
selected as a component member of three ESG indexes in July 2017 for the fifth consecutive year. In 2018, we were
also selected for the S&P/JPX Carbon Efficient index for the third consecutive year.
Major Indexes in Japan
Since March 2019, we have been included as one of the 225 stocks that make up
the Nikkei Stock Average.
115
Corporate InformationOMRON Corporation Integrated Report 2021 OMRON Contributions to Sustainability Recognized
Designated 2021 Health &
Productivity Stock Selection
OMRON has been recognized for the third
consecutive year since FY2018 as a Health
Management Brand stemming from our
OMRON Employee Health Management
Declaration (led by senior management) and
the OMRON Health White Paper
(visualization of employee health).
Selected as a Nadeshiko Brand
OMRON has been recognized for
our engagement in diversity
promotion activities for the fourth
consecutive year since FY2017.
Designated as a Gold Standard Workplace in
the PRIDE Index, the Highest Evaluation
Awarded Platinum Rating from EcoVadis for
Sustainability
OMRON was highly recognized and
awarded for our approaches in
environmental fields in CSR activities.
OMRON was designated as a Gold Standard
Workplace for the fourth consecutive year,
the highest evaluation under the PRIDE
Index by work with Pride, an NGO that
evaluates companies and other organizations
for their initiatives related to sexual
minorities, including LGBT.
Ranked “Gold Class” in S&P Global
Sustainability Award for the First Year
OMRON Communications Recognized
Ranked No.1 overall in Toyo Keizai Inc.’s
“SDGs Ranking of 500 Companies
Representing Japan”
必見！ 「SDGs500社ランキング」初公表
毎週土曜日発行（
-
/
定価
円
+
非財務情報の決定版
ESG CSR
SDGs
日
代
本
表
を
す
る
500社
OMRON ranked No.1 overall in the SDGs
ranking sponsored by Toyo Keizai Inc. We
were also ranked No.1 in the categories of
environment and corporate governance, and
No.3 in the category of sociality.
Awarded Semi-Grand Prix in
NIKKEI Annual Report Awards
2020
OMRON’s Integrated Report 2020 won the
Semi-Grand Prix Award in the NIKKEI Annual
Report Awards 2020.
Best Japan Brands 2021
We have been included in the Japan
business brand evaluation ranking
announced each year by Interbrand Japan
for the fourth consecutive year since 2018,
and our brand was valued at 880 million
US dollars (approximately 96.8 billion yen),
up 1% from the previous year.
Selected for Having Created Excellent Integrated
Report and Most-Improved Integrated Report
OMRON has been recognized for the high
quality of our integrated report by asset
managers entrusted by the Government
Pension Investment Fund (GPIF), and was
selected for the fourth consecutive year for
having created an excellent integrated report
and most-improved integrated report.
116
を本日るす表代Corporate InformationOMRON Corporation Integrated Report 2021 Corporate Information As of March 31, 2021
Major Manufacturing & Development, Sales & Marketing, and
Research & Development Centers in Japan
Manufacturing &
Subsidiaries and Affiliates
Development
Kusatsu Office
Okayama Office
Ayabe Office
Yasu Office
OMRON SOCIAL SOLUTIONS Co., Ltd.
OMRON HEALTHCARE Co., Ltd.
OMRON RELAY & DEVICES Co., Ltd.
OMRON SWITCH & DEVICES Co., Ltd.
OMRON AMUSEMENT CO., Ltd
OMRON FIELD ENGINEERING Co., Ltd.
Research & Development
OMRON SOFTWARE Co., Ltd.
Keihanna Technology
OMRON ASO Co., Ltd.
Innovation Center
OMRON EXPERTLINK Co., Ltd.
Sales & Marketing
Tokyo Office
Osaka Office
Nagoya Office
Mishima Office
Regional Headquarters
North America
OMRON MANAGEMENT
CENTER OF AMERICA
(United States of America, Illinois)
Europe
OMRON MANAGEMENT
CENTER OF EUROPE
(The Netherlands, North Holland)
Greater China
OMRON MANAGEMENT
CENTER OF CHINA (Shanghai)
Asia Pacific
OMRON MANAGEMENT
CENTER OF ASIA PACIFIC
(Singapore)
Korea
OMRON MANAGEMENT
CENTER OF KOREA (Seoul)
Established
May 10, 1933
Incorporated
May 19, 1948
Capital
¥64,100 million
Number of Employees
(Consolidated)
28,254
Common Stock
Issued 206,245 thousand shares
Trading Unit 100 shares
Number of Shareholders 27,848
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
117
Corporate InformationOMRON Corporation Integrated Report 2021 Stock Information
Share Price and Volume
(Yen, Point)
10,000
Daily Trading Volume
OMRON
TOPIX
TOPIX Electric Appliances
8,000
6,000
4,000
2,000
0
2011/3
(1,000 Shares)
5,000
4,000
3,000
2,000
1,000
0
2012/3
2013/3
2014/3
2015/3
2016/3
2017/3
2018/3
2019/3
2020/3
2021/3
* OMRON share prices prior to July 16, 2013 reflect prices on the First Section of the Osaka Securities Exchange. Share prices on July 16, 2013 and later reflect prices on the First Section of the
Tokyo Stock Exchange.
Total Shareholder Return (TSR*1)
FY
OMRON
TOPIX
2016
147.9%
114.7%
TOPIX Electric Appliances
127.0%
2017
191.2%
132.9%
157.8%
2018
161.4%
126.2%
140.9%
2019
177.4%
114.2%
138.9%
2020
269.7%
162.3%
234.3%
*1 Represents total investment return to shareholders, combining capital gains and dividends.
The calculation of this figure is a required disclosure under Cabinet Office Ordinance.
This figure reflects period-end value for fiscal years beginning with fiscal 2016, assuming an
investment at the fiscal 2015 year-end closing price.
52-Week High / Low, Volatility*2
Dividends per Share / Payout Ratio
FY
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
High (¥)
10,040
6,870
6,300
7,670
5,120
5,900
5,800
4,730
2,478
2,357
Low (¥)
Volatility (%)
5,330
4,410
3,740
4,385
3,045
2,742
3,365
2,213
1,436
1,381
28.8
32.3
34.5
27.1
32.5
40.0
30.9
39.7
29.9
36.5
FY
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
Dividends per Share (¥)
Payout Ratio (%)
84
84
84
76
68
68
71
53
37*3
28
39.1
23.0
32.2
25.6
31.6
31.1
25.0
25.3
27.0
37.6
*2 Volatility: Price fluctuation risk expressed in standard deviations
*3 Including ¥5.0 per share of 80th anniversary memorial dividend
Ownership and Distribution of Shares
%
100
80
60
40
20
0
16.0%
12.6%
11.5%
33.4%
35.4%
36.9%
5.7%
2.8%
5.5%
1.9%
5.1%
2.1%
42.1%
44.6%
44.4%
2018
2019
2020
(FY-end)
Individuals and others
(including treasury stock)
Foreign investors
Other corporations
Financial instruments
dealers
Financial institutions
Shareholder Distribution by Number of
Shares Held (Trading unit: 100 shares)
100 to less than1,000
1.7%
10 to less
than 100
15.2%
1,000 to less than 5,000
0.5%
More than
5,000
0.2%
27,848
Shareholders
End of March 2021
Less than 10
82.4%
118
Corporate InformationOMRON Corporation Integrated Report 2021 Independent Third-Party Assurances
To enhance the reliability of the information presented in Integrated Report 2021, the following information
associated with social and environmental performance provided herein has been assured or reviewed by
independent third parties*.
Data subject to independent assurance
Data subject to independent assurance
Ratio of non-Japanese in key managerial
positions overseas (P16, 112)
Ratio of women in managerial roles (OMRON
Group in Japan) (P16, 112)
Ratio of employees with disabilities (OMRON
Group in Japan) (P16, 112)
GHG emissions (P16, 22, 73, 112)
Net sales to CO2 emissions (P16, 22, 73, 112)
Data subject to independent review
Environmental contribution (P16, 22, 73, 112)
Members for Integrated Report 2021
Industrial Automation
Company
Hidetaka Kitajima
Takehiko Hioka
Electronic and Mechanical
Components Company
Katsuhisa Suzuki
Naru Yasuda
Innovation Exploring Initiative HQ
Makoto Ohira
OMRON SOCIAL SOLUTIONS
Takahiro Iesato
Yoko Kitamura
Hirotaka Ogino
Ryotaro Mori
Junko Yoshida
OMRON HEALTHCARE
Kaori Iijima
Yoichi Tomita
* KPMG AZSA Sustainability Co., Ltd.
Bureau Veritas Japan Co., Ltd.
Global Human Resources and
Administration HQ
Nana Itoi
Sachio Inami
Ryota Ueshima
Yoshinobu Kokufugata
Shuji Tatsuoka
Shin Nakajima
Toshiaki Harada
Yasuteru Yamamoto
Global Risk Management and Legal HQ
Koji Okamoto
Yoshichika Tanabe
Sachiko Yagi
119
INDEPENDENT ASSURANCE STATEMENT To: OMRON Corporation Bureau Veritas Japan Co., Ltd. (Bureau Veritas) has been engaged by OMRON Corporation (OMRON) to provide limited assurance and to conduct an external review over sustainability information selected by OMRON. This Assurance Statement applies to the related information included within the scope of work described below. Selected information The scope of our assurance work was limited to assurance over the following information included within the ‘Major sustainability Data’ page of the OMRON’s corporate website (the ‘Website’) or reported internally to OMRON Group only for the purpose of internal management for the period of April 1, 2020 through March 31, 2021 (the ‘Selected Information’): 1) GHG emissions (CO2, CH4, N2O, HFCs, PFCs, SF6 and NF3) through business operations of OMRON Group’s 95 sites both inside and outside Japan. However, CO2 emissions generated from use of electricity for living use, steam and hot water at OMRON DALIAN Co., Ltd. are out of verification scope. 2) Water usage and Waste water discharged through business operations of OMRON Group’s 29 sites both inside and outside Japan. 3) Waste volume, Final disposal of waste, Hazardous waste volume and Final disposal of hazardous waste through business operations of OMRON Group’s 39 sites both inside and outside Japan. Note: The scope of ‘hazardous waste’ was defined by OMRON with consideration of laws and regulations. 4) VOC handled and VOC released to air through business operations of OMRON Group’s 26 sites both inside and outside Japan. 5) Renewable energy purchased or generated at OMRON Group’s 95 sites both inside and outside Japan. 6) Categories 1, 2, 3, 6 and 7 of Scope 3 GHG emissions accounted and reported in line with the GHG Protocol’s ‘Corporate Value Chain (Scope 3) Accounting and Reporting Standard’ within the boundaries defined by OMRON for each category. 7) Carbon Productivity (Global sales / CO2 emissions from global production sites) The scope of our review work was limited to review about the following information included within the ‘Major sustainability Data’ page of the Website for the period of April 1, 2020 through March 31, 2021 (the ‘Selected Information’): 1) The amount of contribution to CO2 emission reduction through the use of products and services sold in FY2020 Note: The boundaries and accounting methodologies are defined by OMRON. OMRON Corporation Integrated Report 2021 From the Publisher
We prepared this Integrated Report for 2021, a year that passes the baton from the former long-term vision “VG2020”
concluded in fiscal 2020 to the next long-term vision starting in fiscal 2022, with focus on three points.
The first was describing the present OMRON’s value generation story structured with combination of “three
timelines.” Specifically, the three timelines consist of the “long-term: 10 years,” “medium-term: 4 years” and “short-
term: compared to the prior fiscal year.” In the “long-term” perspective, we aimed to express our journey of value
generation with a long-term viewpoint by summarizing the former long-term vision, as well as showing the direction
of the next long-term vision. Next, we incorporated the “medium-term” perspective into the descriptions of each
business in the Business section. We aimed to describe the fact that our assets and abilities cultivated during the four-
year period of the former medium-term management plan (fiscal 2017 to 2020) have lead to the current growth in
each business. Lastly, we secured a role of this report as an annual report by summarizing the “short-term” financial
results with a main focus on the fiscal 2020 actual results.
The second was that outside directors and independent Audit & Supervisory Board members respectively took part in
the Governance section of this report. Regarding the “Board of Directors’ Effectiveness”, Chairman of the Board of
Directors and the lead Outside Director had a conversation. We interviewed Chairman of the Compensation Advisory
Committee about the “Compensation Governance,” as well as an independent Audit & Supervisory Board member
about the actions taken by the Audit & Supervisory Board and a response to KAM (Key Audit Matters). OMRON has a
hybrid governance framework that combines a company with the Audit & Supervisory Board and a Selection Advisory
Committee. We have thought that presenting discussions on the effectiveness of governance by outside directors as
well as independent Audit & Supervisory Board members will lead to securing further transparency and development
of constructive dialogue with the markets.
Finally, from this fiscal year, we clarified each role of the “Business Report,” “Securities Report” and “Integrated
Report,” and, at the same time, attempted to link these disclosure statements together in the “value generation
story” that combines the financial and non-financial information. While editing this Integrated Report, which is a
voluntary disclosure, we mainly focused on complementing the securities report by multilaterally depicting the
information leading to the non-financial value with officers’ and employees’ viewpoints. Please read the securities
report if you have not yet done so.
We will continue to place great value on dialogue with our stakeholders. We look forward to hearing your honest
opinions in this regard.
Publisher and Editor-in-Chief, Integrated Report 2021
Executive Officer Global Investor & Brand Communications HQ
Tsutomu Igaki
Edition Team Members for Integrated Report 2021
Global Investor & Brand Communications HQ
Tsutomu Igaki (Editor-in-Chief)) Satomi Somekawa (Deputy Editor-in-Chief) Kisho Iida Hiroshi Oda Arihiro Yokota
Sustainability Office
Rumi Ueyama
Masaru Kaizaki
Yasuyuki Hirakawa
Yuki Yoshikawa
Board of Directors Office
Yuriko Sunaga
Naoki Nakai
Shinya Nagata
Global Strategy HQ
Satoko Murakoshi
Global Investor &
Brand Communications HQ
Shunji Okumura
Takeshi Yamamoto
Kenji Kawauchi
Mana Yamamoto
Production cooperation
TAKARA PRINTING CO., LTD.
DIAMOND,Inc.
Delights co ltd.
Emiri Kida
Kanako Kimura
Yukari Sakamoto
Tomomi Sato
Noboru Shibata
Megumi Nakai
Atsushi Fujita
Kazuki Matsuyama
Keisuke Miura
Yuko Murayama
120
OMRON Corporation Integrated Report 2021 OMRON Corporation
Shiokoji Horikawa,Shimogyo-ku, Kyoto 600-8530, Japan
Contact
Global Investor & Brand Communications
www.omron.com/global/en/
Please access the Inquiry Form from the QR Code on the right.